The advent of the Liz Truss government means more research spending “going to the places that have already got it” in the “golden triangle”, a Labour shadow minister has warned.
Lucy Powell, shadow secretary of state for digital, culture, media and sport, a department responsible for the key innovation sectors of digital and technology, told a fringe event on Labour’s research and development agenda at the party’s conference in Liverpool that Ms Truss’ rise to power meant that “levelling up is now dead”.
“You can’t do levelling up and trickle down at the same time,” the Manchester Central MP added, in reference to the new government’s decision to abolish the top 45p rate of income tax for those earning above £150,000 a year.
The Truss government’s approach of “leaving things to the market” and cutting taxes will mean “more and more research and development investment going to the places that have already got it”, Ms Powell told the event, hosted by the Onward thinktank and RELX.
Richard Jones, vice-president for regional innovation and civic engagement at the University of Manchester, whose ideas on using research investment to drive regional growth were praised by former Number 10 adviser Dominic Cummings, told the event that tackling regional imbalances in the UK’s productivity was key to dealing with stagnant wages and the fact it is “difficult to finance public services to the extent we want”.
He argued for an increase in research spending – noting that the UK’s spend of 1.7 per cent of gross domestic product on research development was behind the Organisation for Economic Co-operation and Development average of 2.5 per cent – and a move away from spending that is “too concentrated” in London, Oxford and Cambridge.
“It is clear that our government currently says it doesn’t believe in industrial strategy – but of course pretty much everybody does some kind of industrial strategy,” said Professor Jones, independent science adviser to the Innovation Greater Manchester project, selected as one of three “innovation accelerators” in the Johnson government’s Levelling Up White Paper.
He added: “The current government says it’s in favour of financial services, it’s in favour of oil and gas…Those are the sectors that drove the economy in the 90s. It’s a very backward-looking agenda.”
He argued the focus should instead be on sectors such as Net Zero – requiring a “huge amount of R&D” – and on healthcare.
Asked whether there was a risk of viewing of Oxford and Cambridge as a problem, Ms Powell said that “levelling up should not be levelling down” and reducing the performance of high-achieving places.
But she added: “We do have to talk about divvying up the cake more fairly.”
Professor Jones said Cambridge was a “fantastic place, but it’s also a completely impossible place to live and an impossible place to expand”.
He added: “The UK is a big enough place to have more than one centre.”
Oliver Coppard, Labour mayor of South Yorkshire, said the country and a Labour government would need to focus more on the “D” element of R&D to generate more “world-leading companies and wealth creation”.
He said that would mean talking about funding: “How do we match up the money…with the ideas we have in this country? I’m not sure in the Labour party that’s a conversation we’ve quite got right yet.”
Mr Coppard highlighted South Yorkshire’s innovation success in hosting Boeing’s first manufacturing facility outside the US, attracted by the University of Sheffield’s Advanced Manufacturing Research Centre.
And he highlighted the recent creation of the Northern Gritstone partnership, an investment company created by the universities of Leeds, Manchester and Sheffield to fund university spin-offs in sectors such as advanced materials, energy and health technology.
“The more we see that kind of work, the more we will see innovation flourish in places like South Yorkshire,” said Mr Coppard.
