Autumn Statement should direct at least £4.5bn to boosting science, technology and regional growth
27 November 2012
The Autumn Statement must set out a new growth strategy focussing on science, technology, innovation and regional growth, with decisive action to channel at least £4.5bn into stimulating these areas of the economy. Without such action, Britain is on course for a decade of low productivity growth, stagnating living standards and low investment.
In its submission to the Autumn Statement published tomorrow (27 Nov), The Work Foundation calls on the Chancellor to deliver on his pledge to make Britain a world leader in key new technologies where we have the potential to thrive, and to build on the ambition to restore regional balance. It backs calls from the Campaign for Science and Engineering (CASE) and Nesta for funds from the sale of 4G licences to be invested in science, technology and innovation. It also calls for a further round of the Regional Growth Fund and for more resources to be channelled into Local Enterprise Partnerships in order drive growth in the regions.
In addition, the report raises concerns about the efficacy of R&D tax credits and calls for them to be frozen at their current rates, with future increases in resources to be focused on university-industry collaboration.
The submission sets out a range of measures to boost innovation and support regional growth. It calls on the Chancellor to:
- Set out a new plan for growth drawing on the recommendations of the Heseltine Review;
- Unlock capital markets for growing SMEs by bringing forward the British Business Bank and encouraging banks to link business loans to managerial development programmes and mentoring;
- Increase the size of the Regional Growth Fund in future rounds by a further £1bn and channel all bids via Local Enterprise Partnerships;
- Increase the LEP Capacity Fund to £50m from the current £25m;
- Increase science and technology funding by at least £300m to offset the real-terms decline over the past three years;
- Implement the Heseltine Review recommendations supporting innovation and technological development;
- Freeze R&D tax credits at their current rates with future support switched to university-business collaborations through enhanced funding of the Research Councils and HEFCE;
- From the 4G licence sale, direct up to £1.7bn in additional TSB funding over the next three to five years in line with the 4Growth campaign;
- Also from the 4G sale, set aside up to £1.5bn over the next three to five to fund university and TSB technology incubators, create the next generation of world class university research facilities and support and attract top quality researchers
Ian Brinkley, director of The Work Foundation, said: “We believe the government has scope to relax the pace of deficit reduction in the short-term in order to directly fund new investment and stimulate growth. While there are legitimate concerns about the impact this may have on the markets, there is less likely to be an adverse reaction if the stimulus is clearly focussed on creating assets and underpinning sustainable growth.
“We therefore think that it would be a mistake for the Chancellor to go for expensive short-term tax cuts. The money would be much better used if channelled into additional infrastructure investment, supporting the science, design and technology base and strengthening innovation-focussed institutions. We strongly support the Campaign for Science and Engineering and Nesta’s proposition that the proceeds from the sale of 4G licences should be channelled into these areas.
“Furthermore, given falling real wages and the fact that employers are hiring in large numbers, there is little need for the government to pursue wasteful measures aimed at making the labour force less expensive or more flexible, such as national insurance holidays or further de-regulation. Such measures will do nothing to spur demand in the economy.”
Notes to Editors:
1. Ian Brinkley is available for interviews, comment and briefings.
2. The Work Foundation’s Autumn Statement Submission is available to download from The Work Foundation website.
3. The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. In October 2010, Lancaster University acquired The Work Foundation, forming a new alliance that enables both organisations to further enhance their impact.
Tom Phillips 020 7976 3554
Anna Kharbanda 020 7976 3646
For urgent out-of-hours media enquiries: Nasreen Memon 07825 527 036