HC Deb 21 November 1984 vol 68 cc290-1
10. Mr. Freeman

asked the Secretary of State for Trade and Industry what further steps he proposes to take to encourage the level of research and development expenditure by the private sector.

Mr. Pattie

As I announced in reply to my hon. Friend the Member for Enfield, North (Mr. Eggar) on 12 November, my Department is carrying out a review of our support for industrial research and development. The review will be completed within five months, when I shall announce the conclusions.

Mr. Freeman

Will my hon. Friend discuss with his colleagues in the Government the merits of requiring a fixed minimum of the Government's research and development budget to be spent through small firms? Is he aware that that is the practice under federal law in the United States and is still the practice of the Ministry of Defence in this country? Does he agree that small firms are the engines of growth and job creation and are often more innovative than large firms in research and development?

Mr. Pattie

I agree that there is much to commend small firms. On a point of detail, however, unless things have changed dramatically in the seven weeks since I left the Ministry of Defence, there is no positive discrimination in favour of small companies, according to rules. I remain unconvinced that the cause of small firms would be enhanced by an almost legislative framework positively requiring that funds go to smaller companies. Nevertheless, my hon. Friend raises an important question and I shall be happy to discuss it further with him.

Dr. McDonald

Does the hon. Gentleman agree with his right hon. Friend the Secretary of State for Energy that the future for jobs lies in high technology rather than with the Chancellor's view that the future lies in the low technology sector? If so, will he give priority to encouraging research and development in high technology and, especially, information technology?

Mr. Pattie

I think that the answer lies with both my right hon. Friends.

Mr. Wrigglesworth

Does the Minister agree that expenditure on research and development—I emphasise development as well as research— in both the private sector and the public sector falls lamentably short of that of our major industrial competitors in Germany, Japan and America? Are the Government worried about that, and if so what are they doing about it?

Mr. Pattie

The total spending on research and development in the United Kingdom is quite considerable, but it is a matter of some anxiety whether all of it is focused and organised in the best possible way. The Ministry of Defence, of course, has a sizeable share of that spending.

Mr. Forman

Does my hon. Friend accept that research and development expenditure in the private sector can be greatly assisted by an intelligent public procurement policy?

Mr. Pattie

Yes, and that is exactly the policy that we seek to follow.

Mr. Geoffrey Robinson

Is the Minister aware that it is no use just coming to the Dispatch Box and voicing anxiety about the Government's grossly distorted spending on research and development for defence purposes? Is he aware that Government support for research and development in non-aerospace and non-defence related industries is under half that of our major competitors? What does he intend to do to rectify that?

Mr. Pattie

The proportion of the overall research budget spent for military purposes is similar to that which prevailed under the Labour Government. Precisely the same considerations obtain. We shall endeavour to ensure that efforts in research, advanced research and pre-competitive research such as the Alvey programme are properly focused, co-ordinated and organised. That is the real answer.