WE are entering the greatest period of political and economic change since possibly the Second World War.

This will be the worst recession since 1929 and the global economy is shrinking for the first time since the 1940s.

The downturn is hitting hardest in the developed Western economies of Europe and North America.

Our Government is now borrowing over £100 billion a year.

We are used to the big powers being the current G8 nations: America, Britain, Germany, France, Italy, Russia, Canada and Japan.

That Western-orientated World leadership is fast becoming a hangover from the 20th Century, and the future looks very different.

This will have profound implications for Britain's place in the world.

It will make a difference to our political influence, our military power and our relative prosperity.

It will challenge the status of our liberal democratic values.

And while the economic rise of Asia will bring very welcome poverty alleviation to millions of people, the implications for population growth and climate change are enormous.

So Britain must forge new alliances to introduce global banking regulation, safeguard free trade, promote business enterprise, avoid mass unemployment and protect the environment.

Making our way in this new era will require leadership and boldness.

These are serious times and serious political solutions are needed to respond to the scale of the challenge.