British spending on R&D jumps by 10%

The UK enjoyed its biggest surge in spending on research and development for 13 years in 1999, according to new official figures.

The UK enjoyed its biggest surge in spending on research and development for 13 years in 1999, according to new official figures.

Total expenditure jumped by 10 per cent to £11.3bn, of which £1.7bn was defence-related. Adjusting for inflation, the increase was 7 per cent. The Treasury said the improvementreflected the stable, low inflation economic environment. In his pre-Budget report earlier this month Gordon Brown, the Chancellor, announced he would be looking at proposals from the Engineering Employers' Federation and Confederation of British Industry to extend the R&D tax credit introduced for small firms earlier this year.

The upturn last year was due to private sector spending. The Government's expenditure on R&D was almost unchanged in cash terms, at £1.2bn, and its share of the total declined from 12 per cent to 10 per cent. The pharmaceuticals and aerospace industries account for the lion's share of business research and development, at 22 per cent and 11 per cent respectively. There is a tax incentive for pharmaceuticals firms, while the aerospace industry benefits from government funds for defence research.

These two sectors are followed by the car industry, communications equipment, chemicals and computers. But most sectors of British industry spend little on research and development by comparison with overseas competitors.

The South-east and east of England, followed at some distance by the North-west, are home to almost two-thirds of all UK spending on business innovations. Wales and Scotland account for only small shares of the total.