UK Science Budget

Baroness Blackwood of North Oxford Excerpts

Wednesday 21st October 2015 Westminster Hall

[Stuart Andrew]

My hon. Friend raises an incredibly important and valid point, which emphasises the points I am making about Government investment in this important area.

An investment in research is an investment in our economy. The UK life sciences industry generates an estimated annual turnover of £56 billion and employs 183,000 people across the UK. Investment encourages innovation, attracts business to the UK and leads to treatments and technologies that allow us all to lead healthier, more productive lives.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

I congratulate my hon. Friend on securing the debate. He is making an excellent case for science. He will know that the Science and Technology Committee is conducting an inquiry into the science budget. Many witnesses have expressed concern that total investment in research and development in the UK is historically low and falling. Does my hon. Friend agree with them that there is a case for a road map to increase R and D, even though the situation cannot be reversed immediately? That would not only ensure that we retained our competitiveness internationally, but send an important signal to investors that we are a good place to invest in.

[Stuart Andrew]

The Chair of the Select Committee is absolutely right. We want to maintain our position as world leaders in this area, and it is important that we do that.

The Government have recognised the link between R and D spending and national productivity, and they have even highlighted science and innovation as a key driver in their plan to make the UK a more productive nation. The spending review therefore gives the Government a real opportunity to invest the resource needed to deliver on that promise, creating a more prosperous nation.

--- Later in debate ---

[Joseph Johnson]

We have discussed that question at great length in Select Committees and, of course, we understand that the impact of our science spend is a function both of the efficiency of our science base and of the inputs that go into it—the amount of money that we spend every year on science. The hon. Lady will recognise that we underscored our commitment to science in the last Parliament by ring-fencing expenditure at £4.6 billion at a time of discretionary savings across the rest of Government activity to the tune of £98 billion. Furthermore, she will know from our previous discussions and from Government documents that we have committed to a road map for capital expenditure all the way to 2021 to the tune of £1.1 billion per annum, which will give businesses, researchers and charities the certainty they need about the role that the Government intend to play in investing in our science base.

[Nicola Blackwood]

The Minister is right to sing the praises of our science community. We are a science superpower in terms of quality and impact, but the Science and Technology Committee has heard widespread concerns about time lag and how historical investment is perhaps leading to our current strength. Does he share the concerns expressed on both sides of the House about the low level of current R and D investment? Will he commit to a long-term plan to raise that investment?

[Joseph Johnson]

We have set out a road map taking us all the way to 2021, and it provides considerable certainty on capital. Of course, a spending review is coming up 25 November, so it would be rash of me to embark on commitments here and now.

[Joseph Johnson]

I would not want to do that for obvious reasons. I do not agree with the generally pessimistic tone of my hon. Friend the Member for Oxford West and Abingdon, because investment in science is increasing. The Government play their part, but we should not forget the important part played by the business community in R and D, nor the part that R and D tax credits play in enabling business to make that supporting investment.

I told the Select Committee the other day that the value of our R and D tax credits has now increased to £1.8 billion a year, enabling more than 11,000 businesses to do innovative research. That is significantly up on the previous year, when the figure was only about £1.4 billion. The taxpayer is making a substantial contribution to enabling R and D in this country; business R and D expenditure is also up. In 2013, UK businesses spent a total of £18.4 billion on R and D, an increase of 8% in cash terms on 2012, so it is wrong to focus only on the Government’s share, which we protected in the last Parliament and for which we have outlined a trajectory to 2021 on the capital side. There will be a real-terms increase in capital spend. We are putting in place an ecosystem to make it possible for business and others to continue their investment.

[Nicola Blackwood]

I think the Minister has misunderstood me. I intended to ask for a road map for both public and private investment. I agree that one is useless without the other.

[Joseph Johnson]

The 3% target is an EU target that may or may not be relevant to the UK environment. Targets, in and of themselves, are abstract things. What is relevant is the policy levers that we have put in place to drive behavioural change in companies and charities in order to increase investment. A target in itself achieves nothing, and I do not want to indulge in such targets.