Budget 2021: Sunak pushes back R&D £22bn spending goals by two years
In today’s budget announcement, Chancellor Rishi Sunak said the government will funnel “unprecedented funding” into innovation, increasing R&D spending to £20bn a year by the end of this parliament in 2024 – but this is down from his previous commitment in March of £22bn per year.
Sunak has erred on the side of caution by pushing back the government’s goal for reaching £22bn in R&D spending by two years to 2026/27, rather than 2024/25, as was pledged in March.
Spending on R&D will be £20bn a year by the end of this parliament, a 50 per cent increase from its start – the fastest cash increase ever, Sunak said.
As a result, R&D spending will rise to 1.1 per cent of GDP, Sunak said. This compares with the OECD average of just 0.7 per cent.
In the US, R&D spending stands at 0.7 per cent, in Germany it’s 0.9 per cent, and in France, it’s 1 per cent.
This will be in addition to a change in the R&D tax relief rules, Sunak said, which will be expanded to include cloud computing and data.
Currently, the system subsidises R&D that occurs outside of the UK, but from April 2023, the tax relief will subsidise investment in the UK, Sunak said.
This investment is part of the government’s mission to make the UK a “science and technology superpower”, Sunak said.
More to follow.