HC Deb 13 July 1992 vol 211 cc805-6
31. Mr. Simon Coombs

To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the level of private sector research and development in Britain.

Mr. Waldegrave

The latest information is that the level of private sector research and development was some £8.1 billion in the United Kingdom in 1990, up about 13 per cent. in real terms since 1985.

Mr. Coombs

Is my right hon. Friend aware that the independent scoreboard of research and development data, which is so often quoted by the Opposition, has recorded an increase in business research and development for 1990–91? Is that not an excellent record of performance, bearing in mind the difficult economic circumstances of the past two years?

Mr. Waldegrave

My hon. Friend is right. It was an encouraging indicator that, despite the first year of recession, private sector firms have not cut research, if we are to believe the independent scoreboard. I hope that that shows that there has been an underlying sea change in the attitude of our industrial firms to the importance of R and D for the long term.

Dr. Bray

Does the Minister agree that, when comparing like with like among those firms—apart from the pharmaceutical industry—there is a major lag between spending by British companies and that of their industrial competitors overseas? Does the Minister see any chance of closing that gap if we fail to provide the incentives to firms to increase their industrial research and development that are provided in other countries, particularly the United States?

Mr. Waldegrave

As the hon. Gentleman knows, the picture is mixed. Some of the leading firms in Britain do better than their counterparts. For example, GEC at 7.2 per cent. is lower than Siemens at 10.8 per cent., but higher than Philips at 6.8 per cent. As one would expect, the percentage for Glaxo is very high. It is not a universal picture. However, it is encouraging that British firms have been increasing their position and, to some extent, catching up with their rivals abroad, as they need to do.

Mr. Dykes

Is my right hon. Friend now confident that the United Kingdom is getting its fair share of the very sizeable research contracts in the EEC system, particularly, for example, in high definition television?

Mr. Waldegrave

We get almost our just return from the EC expenditure on research and development—and perhaps a little bit better than that. It will be one of our objectives during our presidency to ensure that the quality of assessment and management of that increasingly large programme is improved further. It is very important, and of increasing importance, particularly in the near-to-industry area of research in this country.

32. Mr. Barnes

To ask the Chancellor of the Duchy of Lancaster what initiatives he proposes to take to encourage a switch from military to civilian research and development; and if he will make a statement.

Mr. Robert Jackson

The defence research and development programme is directed to the future equipment needs of the armed forces. The interface between military and civil R and D is an issue in which I shall take a close interest—for example, in the context of the Government's White Paper on science and technology.

Mr. Barnes

Does the Minister accept that Britain's high level of investment in military rather than civilian research and development means that this country has often lacked a competitive edge? Will he have a word with the Secretary of State for Defence to ensure that major defence establishments such as Farnborough begin to move into civilian research and development, away from military research and development, to give us that competitive edge?

Mr. Jackson

The hon. Gentleman should not overlook the substantial contribution made by the defence industries, for example, to the balance of payments. Those firms make an important contribution to the economy. With regard to the hon. Gentleman's point about Farnborough and other institutions within the Ministry of Defence research framework, the establishment of the Defence Research Agency has provided an opportunity to review the position and we will consider it again in the White Paper. The DRA will be able to consider the possibilities for diversification in the way suggested by the hon. Gentleman.

Mr. Jacques Arnold

Does not the Defence Research Agency already carry out work for non-governmental customers? Is not there much scope in that regard?

Mr. Jackson

My hon. Friend is absolutely right. The DRA has inherited a wide-ranging and complex set of businesses and there are many sites. It is considering what it has been given and I am sure that it will take advantage of the opportunities such as those to which my hon. Friend referred.