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Preparing Britain's Economy for the Future

We have a very effective inflation-targeting regime. As the hon. Gentleman knows, the Bank of England was set up to be independent by the Government and it has a clear remit to bear down on inflation. We see no risks to inflation in the short or medium term, but these are matters for the Bank of England. We are taking important action now to help business through these tough times. At the heart of our strategy for tackling the economic downturn is our ambition to build for the years ahead, which is where I want to focus my comments. It has been my great privilege as a member of the Government to see from all angles both the challenges we face and the strengths we have as a country. As Minister for Trade, I saw how the UK was respected and trusted around the world for its openness and sense of fair play. I saw how China and India were already transforming the global economy and know how they will become even more prominent in the decades ahead. That highlights the central importance of our need strategically to partner with them in future. As the Minister for Climate Change and the Environment, I saw compelling evidence on global warming and how it will affect our planet if we do not take action, but I also saw the tremendous opportunities available to businesses that can become the first movers in helping to build the low-carbon economies of the future. As the Minister for Science and Innovation, I saw the world-class research expertise in our universities and the opportunities for innovation it presents for UK companies with the skills and the imagination to help us respond to the challenges of climate change in a globalising world. As the world economy emerges from the downturn, there will be major new opportunities for British business, but global competition is getting tougher and technological change is always accelerating. We cannot afford to stand back as other countries invest and raise skill levels in high-value sectors. I consider it vital for the United Kingdom to continue to invest in infrastructure in the economy, and to have an active industrial policy. In April the Government outlined their vision for Britain's economic and industrial future in a document called "Building Britain's Future - New Industry, New Jobs", which explains where Government action can have the most impact. We need to invest in growth to speed recovery and support the manufacturing and services that are essential to ensuring that British people and businesses can compete successfully for the jobs of the future. If we are to succeed in the high-tech, low-carbon economy that lies ahead, we need to act wherever we can to remove the barriers that hold business back. In April, in the Budget, we announced a £750 million strategic investment fund to support advanced industrial projects of strategic significance, £250 million of which will be earmarked for low-carbon investments. The statement that we heard earlier demonstrates the need for us to continue to take action on the low-carbon agenda. A further £50 million will be spent on expanding the Technology Strategy Board's budget and its programme of support for business innovation, which is also vital to our long-term economic prosperity. It will help to drive future growth in areas such as low-carbon technologies, but also advanced manufacturing more generally in the life sciences. Those funds will help to turn more bright ideas into products that can succeed in the marketplace and improve our ability to identify the skills that are needed for future success. As I have said, infrastructure—our energy infrastructure, water, transport and telecommunications—is vital to our future. I believe that, in that future, Britain will compete with other countries in the quality of infrastructure it can provide for its people and its businesses. Preparing for that future means adapting to the changes that are transforming the world in which our people and businesses operate. The digital revolution is one such transformation. The "Digital Britain" report that was published this week sets out clear plans for an active industrial policy to maximise the benefits of the digital revolution.