Theresa May to announce £2bn per year funding boost for science and research

Theresa May is to announce a £2bn funding boost for science and research. Credit: PA

Theresa May is to announce a £2 billion per year funding boost for science and research by 2020.

In her first speech to the Confederation of British Industry (CBI) annual conference, the Prime Minister will also suggest she will match Donald Trump's expected cuts to corporation tax - bringing it to a record low - as she attempts to hold out an olive branch to business leaders following a series of disputes.

Ahead of Wednesday's Autumn Statement, Ms May will stress her "aim" for the UK to maintain its status as having the lowest corporation tax rate in the G20 group of countries.

Currently in the UK the rate of tax on company profits is 20%, but it is due to fall to 17% by 2020.

However, in the US, the President-Elect has pledged to cut the federal business tax rate from 35% to 15%, raising the prospect of a further slashing of corporation tax in the UK.

Labour leader Jeremy Corbyn will also address the CBI. Credit: PA

Mrs May will tell the CBI: "In the Autumn Statement on Wednesday, we will commit to substantial real terms increases in Government investment in R&D (research and development) - investing an extra £2 billion a year by the end of this Parliament to help put post-Brexit Britain at the cutting edge of science and tech.

"And we will also review the support we give innovative firms through the tax system ... because my aim is not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation."

The Prime Minister will insist she will "always believe in business" and the benefits it brings.

But she will stress firms need to do "more to spread those benefits around the country, playing by the same rules as everyone else when it comes to tax and behaviour, and investing in Britain for the long-term".

The extra investment for science and business marks the first step in Mrs May's industrial strategy, which is "not about propping up failing industries or picking winners, but creating the conditions where winners can emerge and grow".

Alongside the funding boost, Mrs May will outline plans for an industrial strategy challenge fund designed to improve the country's "relatively weak" ability to commercialise innovations developed in the UK.

It will be targeted at emerging fields like robotics and artificial intelligence, industrial biotechnology and medical technology, satellites and advanced materials manufacturing.

Mrs May will also announce a Treasury review of tax breaks for UK research and development (R&D) organisations to look at whether R&D tax credits can be increased further from £2.5 billion a year.

Ms May will also say the Brexit vote presents an once-in-a-generation opportunity not just to leave the European Union but to change the country to make it fairer forever.

The funding boost is intended to put post-Brexit Britain at the cutting edge of science and technology. Credit: PA

Jeremy Corbyn will also address the conference and tell industry leaders that "Labour will be on the side of the innovators, entrepreneurs and investors" as long as they "live up to their side of the deal" by treating workers fairly.

As part of a concerted push to build links with business, the Labour leader will say companies must pay decent wages, respect workers' rights and pay the taxes they owe.

In return, a Labour government would use a £500 billion national investment bank to "break the logjam" in bank lending which has "starved" small and medium-sized companies.

It will be focused on helping firms join in the "fourth industrial revolution" powered by the internet of things and "big data", he will say.