§ 11.10 a.m.
§ Lord Orr-Ewing
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what steps they are taking to ensure that levels of research and development in the private sector are sustained throughout the recession.
My Lords, the main responsibility for industrial research and development must rest with industry itself. The Government's aim is to create a climate in which industry will be profitable and can invest appropriately in research and development. The Government, however, recognise the need for some support from the taxpayer, particularly during times of low profitability and low liquidity. Department of Industry support to industrial research and development amounted to £177 million in 1979–80. The Chancellor of the Exchequer announced on 24th November an additional £52 million industrial support package which included significant extra funds for research and development in industry.
§ Lord Orr-Ewing
My Lords, do not these figures belie the suggestion that the Government are doing nothing to promote research and development in industry? Would the noble Viscount tell the House how much, in addition to this, is spent by private industry in carrying out research and development on behalf of the Ministry of Defence? Has he got figures which show whether we are doing as much now in this country as is being done by governments in competitive countries like France for their research and development?
My Lords, the total Department of Industry expenditure on industry support will be about £2.8 billion in 1980–81. This includes £714 million regional and general industrial support, £150 million on scientific and technological assistance, £595 million for aerospace, shipbuilding, steel and vehicle manufacture and £138 million subscription of capital to the British Steel Corporation and public dividend capital to British shipbuilders. Much of the money provided to a public corporation is eventually spent on investment goods in the private sector.
I believe my noble friend referred to the Ministry of Defence expenditure on research and development. I can say this to him: The Ministry of Defence is a major source of Government funds for R and D in industry. The MoD's R and D programmes support defence requirements. In 1979–80 the Ministry of Defence spent about £850 million on this within private industry and the public corporations.
§ Baroness Gaitskell
My Lords, is the noble Viscount aware that research and development is carried out mainly by industrial colleges, by the colleges in this country, and that so long as the cuts go on we shall not have the amount of research and development which we need?
My Lords, I understand the noble Baroness's question on colleges and universities, but this Question was on industry. When the Government give out money in any way it very often goes to universities or associations which are dealing with R and D.
§ Lord Taylor of Gryfe
My Lords, would the noble Viscount tell us what is being done to maintain the level of research and development in the equally important public sector? Is he aware that the research and development departments of many of the public sector industries which are innovative are being restricted by the constraints of the public sector borrowing requirement?
My Lords, it is the Government's intention that money and financial help should be given to all bodies in industry as a whole. Therefore, in that respect, although the noble Lord feels there is a restriction on borrowing and so on, it is still the Government's intention to keep research and development financed.
§ Lord Rochester
My Lords, would the noble Viscount agree that research and development is especially important in the chemical industry? Would he further agree that R and D in chemical firms in this country is suffering not only from the recession but also from the relatively high prices still being charged for electricity and heavy fuel as to their bulk use, in comparison with the prices paid by our international competitors?
My Lords, the best way I can answer the noble Lord on his question is to say that on energy and conservation demonstration projects scheme, £0.556 million was given to R and D. As to our competitors in the EEC, I have no information on that at this stage, but would willingly let the noble Lord have information on that point.
§ Baroness Sharples
My Lords, would my noble friend agree that where firms have to shed labour the money saved is being used to do their own research?
My Lords, I quite agree with my noble friend and this is a great help towards industry as a whole and to the Government.
§ Lord Harmar-Nicholls
My Lords, when this country takes over the presidency of the European Community, will the noble Viscount prevail upon his colleagues to adopt the same spirit there as he has announced this afternoon, and particularly with regard to transport where they have removed from their budget even nominal amounts that were put in in order to bring about research, so that when money can be spent it is more likely to be wisely spent? If the spirit he has announced today could prevail there, it may do us all a lot of good over the whole of Europe.
My Lords, I am so grateful to my noble friend. I am sure that he is a member of the European market and that he will do his best to help me in what I have been trying to do.
§ Lord Wynne-Jones
My Lords, can the noble Viscount tell us how much money the Government are contributing towards the research associations? I do not think he mentioned that in the list of Government expenditure he read out.
My Lords, perhaps I might say that research and development requirement boards, if that is the answer the noble Lord wants me to give—
§ Lord Gainford
My Lords, can my noble friend tell us what is being done for small companies as regards R and D?
§ Lord Barnby
My Lords, would the noble Viscount not agree that, on this question of research, there seems to be an encouragement to private industry, but there are many of us in this House who have been associated with research organisations and difficulty will develop should we put too much on to encouragement of private firms to withdraw support from the research organisations? Withdrawing support from long-established research organisations could mean that there is a danger that there will be less effective research, remembering that the research associations distribute so widely the results of their activities.
My Lords, I am most grateful to my noble friend for his question. I shall bring it to the attention of my right honourable friend.
§ Lord Grimston of Westbury
My Lords, would my noble friend the Minister confirm that a new start-up scheme announced by the Chancellor will apply to research and development?
My Lords, this particular scheme is applying to small- and medium-sized firms, as I understand it.
§ Lord Leatherland
My Lords, may I ask the noble Viscount—and I do so as one who for over 15 years was treasurer of a university—whether he would take steps to see that the research grants to universities are not cut unless it is absolutely essential?
My Lords, that is going against the trend of this Question, and I think that it is another matter.