Research and Development (Hansard, 4 December 1996)

§ 19. Mr. Olner
To ask the President of the Board of Trade what has been the percentage change in total Government spending on research and development since 1985. [5799]

§ Mr. Ian Taylor
Estimated Government expenditure on research and development in 1996–97 is 36 per cent. higher than the cash expenditure in 1985–86.

§ Mr. Olner
In precise terms, there has been a reduction of 16.5 per cent. since 1985 in Government-funded research and development. Is it any wonder that we are now 15th out of 22 in the Organisation for Economic Co-operation and Development league in terms of spending on this sort of research and development? We are a manufacturing nation and we cannot go forward with any strength in the future without research and development that is properly funded. Are there are any hidden cuts in the science budget that was decided yesterday?

§ Mr. Taylor
The hon. Gentleman forgets that his figures encompass defence expenditure, which has been declining. He also forgets the cessation of fast breeder reactor research and launch aid, so the statistics are naturally distorted. The science budget is up by 20 per cent. and the amount spent by universities and research councils is up by 12 per cent. over the period that we are discussing. That is very important for the long-term strength of our research and development base.
The hon. Gentleman is right to be concerned that too many of our companies are not necessarily investing in research and development at the right intensity in relation to sales. I should like to see an improvement in that, given the dramatically increasing need for us to innovate and present new products which will compete in the wider world. There is certainly no lack of effort by the Government to ensure that the science base is strong.

§ Mr. Hoon
In the light of that answer, how does the Minister explain the Government's figures published the "Forward Look of Government Funded Science and Technology 1996", which shows that the severe cuts in 1038 Government-funded research and development for both civil and defence purposes are set to continue. Why is the United Kingdom the only OECD country showing a real terms reduction in annual Government funding of civil research and development?

§ Mr. Taylor
The hon. Gentleman must have heard the earlier reply as I am sure that he normally pays great attention. There are various distorting factors in the total civil research budget. The figures that I gave for the science base, which include money for university infrastructure from the Higher Education Funding Councils and through the research councils, is up in real terms.
The Budget announced by my right hon. and learned Friend the Chancellor of the Exchequer last week specifically emphasised the Government's commitment to the science base by making sure that there is a cash increase year on year. That is important to ensure that the research councils' expenditure plans are safeguarded. Further details will be provided in January when we allocate to the various research councils. I assure the hon. Members for Ashfield (Mr. Hoon) and for Nuneaton (Mr. Olner) that the United Kingdom's science base is strong and healthy and that our spending efficiency compared with other countries, not least those in the G7, is admirable.