Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the planned £20.4 billion of research and development spending on (a) economic growth, (b) the national investment rate and (c) crowding in of private investment.

At Autumn Budget 2024, the government protected R&D by allocating £20.4bn to support its missions, including the growth mission. Recent Department for Science, Innovation and Technology published research has found an average rate of return to public R&D of 40% after 6 years from when the investment is made [1]. The government’s investment will also boost business investment in R&D. Although estimates of the impact on private investment vary, on average £1 of public R&D investment leverages around £2 of private R&D investment in the long run [2]. The Office for Budget Responsibility is responsible for modelling the impact of government policy on the economy.

[1] Returns to Public Research and Development - GOV.UK

[2] Research and development: relationship between public and private funding - GOV.UK