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Cambridge Corporate Gateway Dinner

The Rt. Hon. Stephen Timms MP,  Minister for Digital Britain, also Financial Secretary to the Treasury
Queen's College,  09 October 2007

Thank you David. I am delighted to be here and to be back in Cambridge. Thank you for your welcome and for the chance to say a few words to you.

Cambridge epitomises a very British combination of history and tradition with an international, modern and creative outlook. The contribution of Cambridge, and of the Cambridge Network, has been crucially important for Britain, and I am certain will be crucially important in the future as well.

I am the Minister for Competitiveness in the new Department for Business, Enterprise and Regulatory Reform. Some people have suggested to me there is an issue over the department’s name, but everyone has been very positive about the department’s content: a department with a clear brief to be a strong and effective voice for business across Whitehall, having within it the Government’s regulatory reform brief.

My brief within the department is a pretty wide one, including for example responsibility for telecommunications. In that capacity I have been arguing recently for the need for Britain – having come from behind on broadband to now a world leading position on broadband availability and take up – to consolidate our international competitiveness by embracing next generation broadband in the near future. In other countries in Europe and elsewhere, fibre to the home is starting to be deployed on a significant scheme. There are not yet the applications for that to present a significant competitive advantage to those countries, but there probably soon will be, and we need in Britain to maintain the competitive advantage we gain from a high quality, high performance telecommunications network in every part of the country.

I have had the opportunity over the past three months top visit manufacturers around the country, and I have been encouraged by what I have seen. Too often, people think that manufacturing in Britain has had it. In fact, Britain is the world’s sixth largest manufacturing economy. We make almost twice as many cars in Britain today as we did twenty five years ago. Last month, I launched the new Mini Clubman model at a large car plant near another well known UK university – well over a million Minis sold since the new Mini was launched, 80% of them exported, and the cars popular in countries where the last British family cars to be sold were Morris 1100s. And it has been good to see a series of positive reports about the state of manufacturing over the past few weeks – the Engineering Employers’ Federation, the Chartered Institute of Purchasing and Supply and the CBI all confirming a positive assessment for manufacturing in the UK at present.

And in our view – substantiated in the publication today of the Government’s Pre-Budget Report and Comprehensive Spending Review for the three years from April next year – is that, to maintain that positive picture, we need above all to maintain the remarkable new stability which has underpinned our economy over the past decade. We used to be, on the inflation measure, the least stable economy in the G8. Since 1997 we have been the most stable economy in the G8, bar none – and one of the fastest growing in terms of GDP per head. And maintaining that stability will be the foremost requirement of economic management in the period ahead.

We will also want to ensure the UK continues to be competitive on tax. The pro-enterprise changes to Capital Gains Tax ten years ago have been immensely important for us – for the kind of developments I have been visiting today – and we have reduced the main company rate of Corporation Tax so that our rate continues to be the lowest in the G8. And we need to keep tax competitiveness under close examination.

And we also need to continue to invest – in education and skills, building up apprenticeships and successful vocational education alongside the academic excellence which will be just as important for Britain’s success as it has been in the past and which this university stands for in the eyes of the whole world. The Chancellor has underlined our commitment today to continue to invest in the health service too – and we are determined to maximise the benefits from that investment in UK-based biotech and pharmaceutical research.

We provide R&D tax credits, fund the Research Councils, have maintained our commitment to build up the publicly funded science budget. We provide R&D grants to SMEs, help with networks such as the Knowledge Transfer Networks and work with partners on specific sectoral strategies.

Britain has done well over the past decade at creating new businesses. We have 4½ million businesses in Britain today, more than ever before, and benchmarking by the OECD, World Bank and others confirms that the UK is a very good place in which to do business – particularly by comparison with the rest of Europe.

But comparison with the US shows us in a less positive light. The US is much better at enabling new small companies to become big ones. And so we are currently reviewing our enterprise support framework, with John Hutton and I holding a series of discussions with small business owners around the country, asking them what more Government can do to remove the barriers which are holding back their growth. Our aim is to publish a new enterprise strategy in the Spring of next year.

I have been at three of those events so far, and what has been striking – and for me at least quite surprising – has been the prominence at all of them of demand for better mentoring and networking, better linkages into universities to access new technologies – really as a stronger demand than better access to finance or regulatory reform, important as both of those undoubtedly are. So the Cambridge Network is a model we will want to learn from and perhaps seek to encourage to develop elsewhere.

I welcome this initiative, to bring top global companies to Cambridge to see business and research opportunities here, and do so in a tailored way. Each company’s needs are different and detailed and it is great that Cambridge can respond to this.

I have been learning today about some of what Cambridge and the surrounding region has to offer. I’ve concentrated on aspects of advanced electronics – microelectronics, and photonics. I know there is plenty else here, but that has been my particular focus today.

I visited Cambridge Display Technology who concentrate on research and commercial development of polymer light emitting diodes for flat panel displays, lighting and other applications. Having been founded by Cambridge University, then subsequently in US ownership, it is now Japanese owned and has a range of overseas development partners. Our openness in Britain to international investment and partnerships is a key strength in a globalised economy.

I also visited ARM, focused on the design of reduced instruction set computing microprocessors. I had the privilege of opening their first Shanghai office five years ago, and they now licence their products to world famous companies around the globe.

And I’ve been to the CAPE – the partnership between Cambridge University Department of Engineering, where I spent a postgraduate year a long time ago, and major industrial partners in electronics and photonics. CAPE is a model of university – industry collaboration, ensuring that business issues are at the top of the research agenda, and giving a focus for multidisciplinary research.

These are exactly the sorts of ventures that are taking Britain forward as a place to do business. We need more and the Cambridge Corporate Gateway events this week are a very welcome contribution to that.

Let me finally say a few words about a specific UKTI initiative. UK Trade and Investment is the Government organisation which helps companies go international. They can be overseas owned companies which UKTI attracts to the UK, or British based companies which UKTI helps to do business overseas.

UKTI is particularly keen to boost to UK’s R&D output. It has recruited 17 R&D specialists from business with deep knowledge of R&D carried out in a number of specific sub-sectors. They work with cross Government virtual teams to bring together foreign multinationals and UK expertise in universities and other research establishments.

UKTI is working with my deparetment, with Research Councils, Foreign Office, RDAs and Devolved Administrations, amongst others, and with UK based innovative companies through its trade development initiatives where we think that increased export capacity will lead to increased R&D output. Steve O’Leary from UKTI who is here can explain more.

Thank you again for the chance to be here this evening. Please do let me know what more you think we can do in Government to support your success – either this evening or by dropping me an e-mail subsequently. I hope we shall be working together to make the most of the great opportunities ahead for Britain. And I wish all of you great success in the future.

Thank you.