Examination of Witnesses (Questions 320-321)
22 MARCH 2005
RT HON
GORDON BROWN
MP, MR JON
CUNLIFFE, MR
MIKE ELLAM,
MR DAVE
RAMSDEN, MS
SARAH MULLEN
AND MR
JOHN KINGMAN
Q320 Chairman: On that competitive challenge,
Chancellor, during our recent inquiry focused on China, we heard
that China is now the third-largest investor in the world in R&D,
well ahead of the United Kingdom. The Budget has been criticised
for failing to do more to encourage training or commercial R&D.
What underpins the success of the other developed countries in
delivering a better record of spending on R&D?
Mr Brown: I think we are catching
up after being pretty much at a low level for quite a long period
of time, and the 10-year science framework is designed to help
us catch up in these areas. As far as the exploitation of commercial
R&D is concerned, there are issues about the definition of
what qualifies as R&D for the R&D Tax Credit—Mr
Kingman is here—but we continue to look at these issues,
including what classifies as training in research and development
as well. I do not know whether you want to say something on that?
Mr Kingman: We made a commitment
in the Budget to consult further on the R&D Tax Credit, both
on ways of encouraging take-up and, also, whether we are actually
hitting the right target companies in terms of the fast-growing
and medium-sized R&D companies. We also did make an important
announcement in the Budget on stem cells and bringing together
participants in stem cell research, which is a really important,
strategic opportunity for the UK.
Mr Brown: I do believe we recognise
that we have got to do better in future years. When I saw the
stem cell research, for example, that was being done in China
it did make me more convinced that we have got to move ahead in
these new areas where there are considerable medical advances
to be made to the benefit of the population as a whole, but there
are greater commercial advantages for Britain moving forward in
this area as well. We will continue to do more on these issues
of research and development, aware, as I said earlier, that China
is not a low-cost manufacturer competing against us; it is also,
in addition to being a low-cost manufacturer, increasingly a high-tech
competitor as well.
Q321 Chairman: Thank you, Chancellor.
On the issue of productivity challenge, which is very important,
and maybe on a lighter note, are you quite happy with the productivity
output of your officials this morning, since they have come along
here?
Mr Brown: I think you worked them
even harder yesterday, and I gather they are all working tomorrow.
Chairman: Thank you very much.
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