Civil Research and Development (Hansard, 19 July 1989)

§ 9. Mr. Bill Michie
To ask the Chancellor of the Duchy of Lancaster if he has any plans to seek to increase the level of civil research and development spending by British industry.

§ Mr. Forth
The Government have created a favourable economic climate, which encourages companies to invest in research and development themselves. Industry increased its own funding of research and development by about 30 per cent. in real terms between 1983 and 1987.

§ Mr. Michie
Even taking that into account, at present British industry is enjoying record profits, mainly off the backs of the workers in industry and those who lost their jobs. Directors are giving themselves massive wage increases. Instead of putting money into research and development, they are putting it into their own pockets. That is quite different from what is happening with our major competitors abroad. They are putting a percentage of their output into R and D, which we are not and we are stagnating.

§ Mr. Forth
The hon. Gentleman is wrong for two reasons. Largely because of the volume of noise—probably of approval for what I said—coming from Opposition Members, the hon. Gentleman did not hear me when I said that industry had increased its own funding of research and development by about 30 per cent.——

§ Ms. Clare Short
We do not believe the Government's statistics.

§ Mr. Forth
—in real terms between 1983 and 1987.

§ Mr. Holt
On a point of order, Mr. Speaker. I distinctly heard the hon. Member for Birmingham, Ladywood (Ms. Short) call the Minister a liar.

§ Mr. Speaker
Order. The hon. Gentleman is perfectly correct to draw that to my attention. I did not hear it. I hope that the hon. Lady did not say that, but if she did I am sure that she would be prepared to withdraw the remark.

§ Ms. Short
I said that we do not believe the Government's statistics. They lie to us all the time about statistics. That is my view and I think that that is allowed.

§ Mr. Speaker
Order. Can the hon. Lady help us to get on and confirm that she did not accuse the Minister of being a liar? That is all that I ask her to do.

§ Ms. Short
I have just made it clear that I said that it was impossible to believe the Government's statistics because they lie to us all the time. I did not accuse the Minister of lying to us—I was referring to the barrage of statistics that we are given.

§ Mr. Speaker
Perhaps we can accept that and get on.

§ Mr. Forth
On the hon. Gentleman's other point. he claimed that we are behind other countries in civil research and development. We are ahead of some, at about the same level as some, and behind others. There is nothing wrong with that. It is hardly reasonable to expect us to be ahead of everybody.

§ Mr. Oppenheim
Does my hon. Friend agree that all this concentration on research and development can be misleading, bearing in mind that in the world's most successful economy—in Japan—private industry and the Japanese Government spend relatively little on R and D, preferring to concentrate their resources on buying in licences from others, improving their technology and concentrating resources on manufacturing production and marketing?

§ Mr. Forth
Yes, my hon. Friend is correct. Interestingly, Japan is one country in the league table suggested by the hon. Member for Sheffield, Heeley (Mr. Michie) which invests less than we do. We must try to maximise the effectiveness of the research and development spend in this country. The Department of Trade and Industry has many programmes to encourage collaborative research between higher education and industry, between different companies and within the European Community framework. That is the way to proceed and it will be much more useful to consider the effectiveness of our research and development spend in those terms than to look at the overall figure.

§ Dr. Bray
I think that the Minister should check his figures. Since the German and Japanese industries spend 50 per cent. more of their own money on research and development as a proportion of their domestic product than British industry does, and since after 10 years of this Government British industry is plainly not increasing its research and development fast enough even to narrow, let alone close, the gap, with Germany and Japan, does the Minister agree that it is necessary for the Government to 335 increase their support and incentives for research and development rather than reduce them, as they have, from the peak level by 20 per cent. in real terms?

§ Mr. Forth
It would be particularly futile and not a good way to spend any of our time for me to bandy figures with the hon. Member for Motherwell, South (Dr. Bray). If he would care to write to me, I am perfectly prepared to indicate—[Interruption.]

§ Mr. Speaker
Order. These interruptions take up a lot of time and hon. Members want to ask questions.

§ Mr. Forth
If the hon. Gentleman would care to write to me I am perfectly prepared.

Hon. Members
This is question time.

§ Mr. Speaker
Order. The Minister should be able to complete his answer. If he intends to write a letter, perhaps we can progress more quickly.

§ Mr. Forth
If the hon. Gentleman would like to do as I have just suggested, I shall be prepared to give him the correct figures, which I am sure he would find reassuring. We believe and continue to believe that by having a low tax regime and an environment in which companies can be profitable, we leave the decision of how to invest in their hands, rather than confiscating money from companies through taxation and imposing our decisions on them about how they should invest. That surely makes sense in a vigorous, capitalist economy.