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Research And Development

Volume 404: debated on Thursday 8 May 2003

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7.

What steps he is taking to encourage investment in research and development in the north-east. [111888]

The Government are encouraging investment in research and development throughout Britain. Last year, we allocated the largest sustained increase in the science budget for more than a decade and, to boost commercial research and development, we have introduced tax credits for large and small companies.

I welcome my hon. Friend's response. For the record, my region has accorded widespread praise for the research and development credits proposals announced in the Budget. However, will the Minister acknowledge that the management of British industry needs an urgent change of culture, given that Corus spends only £64 million out of an operational budget of £7.2 billion on research and development in the steel industry? Is not that simply managing decline in the steel industry rather than growth in the UK?

My hon. Friend is right to point to the importance of private sector investment, because the major variation in research and development spending in each region primarily reflects private sector variations. My right hon. Friend the Chancellor is well aware of the particular challenges faced in my hon. Friend's region. He mentioned in his Budget statement that business R and D in the south-east is worth £450 a head, and that in my hon. Friend's region, the north-east, it is only £50 a head. The £650 million in R and D tax credits will help, as will the work being done in the region by One NorthEast. My hon. Friend might like to know that her regional development agency is now investing more than twice the average amount invested in other regions in support of regional science, engineering and technology.

Universities are at the very heart of the north-east region's research and development programme, as they are in any region. Does my hon. Friend agree that any proposal that suggested a further concentration on a few universities, nearly all of which would be in the south-east, would be a disaster for regional regeneration?

I pay tribute to my hon. Friend's expertise in this area. He is Chairman of the Select Committee on Education and Skills, and has also worked for a long time on these matters. What he says is right, of course, but he is also right to say that RDAs have a very important role now. They must encourage regional innovation and better local transfer of knowledge, and—crucially, as my hon. Friend mentioned—they should foster better and more collaboration between universities and businesses in the regions.