May unveils £4bn plan to Brexit-proof British economy
UK Prime Minister Theresa May has announced £4bn of spending on research and development and regional growth strategies, setting out plans to help the economy grow after Brexit.
Amid stiff competition, Britain is looking to carve out a new global role as a leader in "industries of the future" such as artificial intelligence and driverless cars after it exits the European Union in March 2019.
Badly damaged by a botched snap election and with Brexit talks running behind schedule, Mrs May is looking to stir up some economic optimism to help her fragile minority government through Britain's most uncertain period since World War II.
As part of the run-up to UK chancellor Philip Hammond's budget on Wednesday, she announced a £1.7bn fund to help regenerate cities and a £2.3bn boost to research and development spending, due in 2021/22. "This is a new long-term approach to shaping a stronger and fairer economy for decades to come," she said in a newspaper article.
The central challenge of Wednesday's budget will be to improve Britain's persistently weak productivity, which lags international rivals and is seen as a major limiting factor on economic growth.
The new funding is linked to Britain's 'Industrial Strategy' - a push to create more skilled, high-paying jobs, first announced after she took office last year, to help fortify Britain's services-reliant economy against Brexit-related shocks.
Mrs May has already set a target to increase R&D spending to 2.4pc of economic output by 2027 - in line with Organisation for Economic Cooperation and Development (OECD) averages.
The funding announced yesterday would take spending to £12.5bn in 2021/22, building on an existing commitment to raise public research spending to £12bn.
The transport-focused 'Transforming Cities Fund' will try to better link up Britain's cities in search of productivity improvements and foster greater collaboration and innovation.
"This will help make sure people across the country have better options to combine different modes of transport - supporting projects which will improve connectivity, reduce congestion and introduce new mobility services and technology," said business minister Greg Clark, who is leading the Industrial Strategy initiative. (Reuters)
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