Question

To ask the Secretary of State for Business, Innovation and Skills, what measure of inflation his Department uses for research and development spending; and what research he has (a) commissioned and (b) consulted in forming his policy.

The Department currently uses the GDP deflators published by the Treasury to remove the effect of inflation from research and development (R&D) spending. The Office for National Statistics carried out some work to develop an R&D deflator; however, this work did not include a forward looking deflator so was not suitable for applying to future expenditure. We have not commissioned any research, but continue to monitor new developments in this area.