R&D Spending: Comparisons (Hansard, 27 October 1988)

§ The Secretary of State for Trade and Industry (Lord Young of Graffham)
My Lords, I undertook to write to the noble Lord with this information on 14th June, following the Question he asked on that day. I very much regret that, due to an oversight, I did not do so. The latest year for which figures are available is 1986. Government-funded research and development amounted to 0.6 per cent. of the GDP. The corresponding figure for the private sector was 1.2 per cent.

§ Lord Dormand of Easington
My Lords, I am glad to have that explanation from the Secretary of State, which I fully accept. Does the Minister agree that a high level of research and development is of the utmost importance in an economy such as ours? Is he aware that in both the public and private sectors the percentages which he has just given fall in particular below those of our competitors, not least the United States of America, Germany and Japan? When will the Government take seriously their role in both the public and private sectors of research and development?

§ Lord Young of Graffham
My Lords, the last year for which I have total figures is 1986. If we examine the figures, we find that the United Kingdom spent some 2.4 per cent. of GDP on R&D, compared with 2.3 per cent. for France and 2.8 per cent. for the United States. Although figures for Germany and Japan are not available, it is true that they are far closer to those of the United States than to ours.
If we look at government-funded R&D, in 1985 we spent 1.2 per cent., compared with 1.3 per cent. for the United States and 1.4 per cent. for France. We 1710 appear to have spent almost three times as much as Japan on government-funded R&D as a percentage of GDP in 1985. That is at least something which would cause many people surprise.

§ Lord Williams of Elvel
My Lords, does the noble Lord accept that his department was alerted to his unfortunate failure to write to my noble friend Lord Dormand of Easington by the Library of this House? Our Library was only alerted to this yesterday by myself when I asked for the figures that the noble Lord had promised. Is he aware that the department described this failure as "an administrative error"? Does the Minister accept that it makes the task of opposition rather difficult in this House if we cannot get access to figures that have been promised us in the Library?
I have tried to reconstruct some of the figures that the noble Lord has given us today in preparation for this Question. I arrived at slightly different figures from those of the noble Lord but he has information which I do not possess. Has the Minister any up-to-date figure on Japanese expenditure on civil research and development? In the annual review, as he will be aware, the OECD has withdrawn the Japanese figures, for reasons which I do not quite understand. Can the noble Lord give us any figure for civil research and development in Japan, funded by private industry as opposed to the Japanese Government, with which we can compare the figures that he gave us today?

§ Lord Young of Graffham
My Lords, it may well be that the noble Lord, Lord Williams of Elvel, is infallible. I certainly am not; nor are most human beings. An oversight took place by my department. I apologised for it this morning in writing, and I apologise in front of your Lordships' House now. I think that the noble Lord should look carefully at this, particularly when last week he quoted so very much out of context to me on another matter which arose in your Lordships' House. Industry-funded R&D in 1985 in the United Kingdom was 1 per cent. of GDP. In Japan it was 1.8 per cent.; in France it was 0.9 per cent.; in the United States of America it was 1.3 per cent. In all this argument it is the quality of research that counts, not the quantity.

§ Lord Ezra
My Lords, does the noble Lord agree that the further stimulus of civil R&D should constitute one of the major steps to be taken, to prepare for the challenge of the single market in 1992?

§ Lord Young of Graffham
My Lords, I very much agree with the noble Lord, Lord Ezra. That is why my department's expenditure on R&D is directed mainly to progammes like LINK which look towards collaborative research for higher education institutions and the commercial world. It is directed also towards EUREKA which looks very much towards research being conducted by United Kingdom companies and companies in France, Germany and members of the Community. It is as well to accept that it is a EUREKA programme that has enabled us in two and a half years to develop a compatible system for high definition television and one which I believe will successfully rival and challenge the Japanese system for that process.

§ Lord Cledwyn of Penrhos
My Lords, if the noble Lord agrees with the noble Lord, Lord Ezra, about this challenge, why is so little R&D going to Wales, Scotland and some of the regions of England? Is the noble Lord aware that the amount going to the South-East is out of all proportion? There is no opportunity in Wales for a development of this kind and that is causing acute concern in Scotland, Wales and the North of England.

§ Lord Young of Graffham
My Lords, R&D expenditure goes to those establishments which are spending it on R&D. It does not go as a regional policy. The noble Lord the Leader of the Opposition should know very well that expenditure on regional aid in Wales far exceeds that in England. I have seen figures for Wales which show tremendous developments in the Principality. I should hardly have thought that that was a serious complaint. If research establishments are set up in the Principality which qualify for aid then they will get it. We do not allocate that sort of money on a regional basis.

§ Lord Cledwyn of Penrhos
My Lords, I take the point the noble Lord makes, but I wish to mention one figure. Out of £100 million allocated for R&D in microelectronics, £40 million goes to the South-East and £200,000 goes to Wales. That is a balance out of all proportion.

§ Lord Young of Graffham
My Lords, it may well be entirely in proportion, if one considers the establishments that exist in those areas to carry out this research. I must confess that I have not detected any great anti-Welsh bias in my department, but I shall go back and examine the matter.

§ Lord Kennet
My Lords, when will the Government make a statement about their intentions on the future of civilian research into nuclear fusion? Can the Secretary of State, even now, give an assurance that that statement will not make it inevitable that JET should close down or leave this country in 1992?

§ Lord Young of Graffham
My Lords, I have studied the Question intently, but I cannot find very much connection between the original Question and the question the noble Lord has just put. If he would care to place his question on the Order Paper or write to me, I should be only too happy to answer it.

§ Lord Dormand of Easington
My Lords, as the figures which the Secretary of State gave to me are so much at variance with the figures I have, and, apparently, with the figures which my noble friend Lord Williams of Elvel has, will the Secretary of State be so kind as to let me have the source of his figures? I agree with the noble Lord's statement that quality counts, rather than quantity in itself. But is he implying that in this country, both in the public and the private sectors, the quality is not as high as it should be?

§ Lord Young of Graffham
No, my Lords. However, there have been notable cases in the past, even in this country, when considerable expenditure on R&D has 1712 been totally wasted. It is important that we fund only those projects which are worth funding.