Budget Resolutions and Economic Situation

Chris Skidmore Excerpts

Monday 8th March 2021 Commons Chamber

[Chris Skidmore (Kingswood) (Con) [V]]

I welcome this Budget, not only for its record levels of support in the present due to the pandemic, but for having an eye on the future. However, if we do not own our future, the future will own us. Although this Budget was delivered in a period of extreme economic uncertainty and gloom, the one shining shaft of light has been the UK’s leading role in the covid vaccination programme, which has been delivered solely due to the impact of research and development. Clearly, research and development not only changes lives, as we have always known, but saves them too. As the covid R number begins to fall rapidly due to vaccination, we need now to turn our attention to the other vital R number: the figure that we spend on R&D in the United Kingdom. We have set ourselves a target of spending 2.4% of GDP on research and development by 2027, yet we currently spend only 1.8%. Compared with other countries—China spends 2.1% of GDP, the US spends 2.8%, Germany spends 3.1%, South Korea spends 4.5% and Israel spends 4.9%—we are falling behind in the global race when it comes to R&D. There are now just 2,135 days until we reach that 2027 target date. If we are not careful, we will miss the target altogether.

The Government have already committed to increase the public spend on R&D from £12 billion a year to £24 billion by 2024-25, which is incredibly welcome, but we must now focus on leveraging in private R&D spend, which is currently around £30 billion a year and needs to rise to £70 billion by 2027. How are we going to achieve that? I was delighted that the Budget includes a consultation on R&D tax reliefs. Although tax reliefs follow the Frascati manual, they are currently limited to staffing costs, materials and software. We urgently need to include data, education and skills in that package.

The reliefs are part of a wider picture that must be addressed in the spending review. We need to look at our R&D commitment for the future—for 2027—and be bold, establishing new international research schemes to bring in the leverage and get private companies to come to this country and commit to R&D. After all, research and development is about to get us out of this pandemic. If we wish to invest in research and development now, it can point us in a fantastic direction for the future.