Theresa May backtracks on plans to put workers on company boards saying businesses will not be forced into it
PM said in a speech to the CBI the flagship proposal was now just one option in her package of reforms
THERESA May has backtracked on her flagship plans to put workers on the boards of big companies, saying firms will not be forced into the move.
The Prime Minister said in a speech at the CBI the idea was just one option in her package of reforms, as she promised an extra £2billion a year for cutting edge research.
She said while she wanted the voices of workers to be heard, companies would not be forced to directly appoint staff or trade union representatives onto their boards.
"Better governance will help companies to take better decisions, for their own long-term benefit and that of the economy overall," Mrs May told business leaders.
"So this is an important task. We will work with you to achieve it, and I know you will rise to the challenge."
She added: "While it is important that the voices of workers and consumers should be represented, I can categorically tell you that this is not about mandating works councils, or the direct appointment of workers or trade union representatives on Boards.
"Some companies may find that these models work best for them – but there are other routes that use existing Board structures, complemented or supplemented by advisory councils or panels, to ensure all those with a stake in the company are properly represented.
"It will be a question of finding the model that works."
Asked afterwards if she had dropped plans for the direct appointment of workers on boards, the PM replied: "What I have clarified today is we have been very clear we want workers' representation on boards.
"There are a number of ways in which that can be achieved.
RELATED STORIES:
"We are going to be consulting with business this autumn about how that can be achieved alongside other issues of corporate governance, and we will be working with businesses up and down the country to make sure that what we arrive at is the best model, the model that is going to work for everybody."
Her Business Secretary had already hinted this morning the PM was looking at watering down the proposals while confirming that the Government was committed to publishing them before the end of the year.
Greg Clark said ministers were working with business on how the idea could be implemented, telling the BBC Radio 4 Today programme: "There are different ways of doing this.
"Theresa May has talked about an economy that works for everyone - that includes workers, employees, consumers, the supply chain businesses - so we will put forward a series of ways in which those voices can be represented on boards.
"We will publish those plans. We will have options. We are working with business.
"It is very important that the confidence that the employees in every part of the country have that very successful British business works for them is something that Theresa May and this Government takes very much to its heart and we are acting on it."
In response the TUC General Secretary Frances O’Grady said: “Theresa May made a clear promise to have workers represented on company boards. The proposals in her speech today do not deliver on this.
“This is not the way to show that you want to govern for ordinary working people."
Ahead of Philip Hammond's crucial Autumn Statement on Wednesday, Mrs May used her speech to also set out plans to assist business, including her ambition to ensure the UK has the lowest corporate tax rates in the G20 group of advanced economies and measures to boost productivity.
And she offered to seek certainty for employees concerned about their future in the UK in the wake of Brexit, declaring she will seek an "early agreement" with other EU states on the status of UK nationals living elsewhere in Europe and EU nationals in Britain.
She announced the launch of a Patient Capital Review, chaired by Sir Damon Buffini, to help innovative firms get the long-term investment they need to transform breakthrough ideas into sustainable businesses.
And she said that the Government was launching a review of its Small Business Research Initiative under Cambridge entrepreneur David Connell to ensure it does more to give innovators their first break.