§ 15. Dr. Lynne JonesTo ask the President of the Board of Trade if he will make a statement on his policies to encourage United Kingdom manufacturing companies to increase their investment in research and development.
§ Mr. McLoughlinThe best encouragement that the Government can provide is a stable economic environment with low inflation, low interest rates and low corporation tax, together with selective assistance, such as that provided by the Department in appropriate cases.
§ Dr. JonesAre not United Kingdom manufacturing tools twice as old as German tools and three times as old as Japanese tools? Do not British companies spend twice as much on dividends as they spend on research and development? It is no wonder that we have such a massive trade deficit, which is unprecedented in a recession. When will the Government shake themselves out of the complacency shown by Ministers' answers this afternoon and learn from the Japanese and other Pacific rim countries, which are investing massively in research and development? Why do they not start by transferring savings from defence research and development to civil research? If they did, at least the Minister could boast that his Department's budget was somewhat larger than that of the Department of National Heritage.
§ Mr. McLoughlinI am not sure whether the hon. Lady was trying to talk her question out. The fact remains that industry-funded research and development rose 28 per cent. in real terms between 1981 and 1991. Of the companies questioned by the Confederation of British Industry in an innovation trends survey, 50 per cent. planned to increase their research and development expenditure in 1993, which is very encouraging.