LONDON (Reuters) – Prime Minister Theresa May yesterday announced 4 billion pounds ($5.28 billion) of spending on research and development and regional growth strategies, setting out plans to help the economy grow after Brexit.
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Amid stiff international 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 EU in March 2019.
Badly damaged by a botched snap election and with Brexit talks running behind schedule, Ms May is looking to stir up some economic optimism to help her fragile minority government through Britain’s most uncertain period since World War Two.
Yesterday, as part of the run-up to finance minister Philip Hammond’s budget on Wednesday, she announced a 1.7 billion pound fund to help regenerate cities and a 2.3 billion pound boost to research and development spending, due in 2021/22. Further details of the funding were not yet available.
“This is a new long-term approach to shaping a stronger and fairer economy for decades to come,” May said in a Times 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 that was first announced by Ms May after she took office last year to help fortify Britain’s services-reliant economy against Brexit-related shocks.
Ms May has already set a target to increase R&D spending to 2.4 percent of economic output by 2027 – a level in line with Organisation for Economic Cooperation and Development (OECD) averages.