NCUB’s attendance at the party political conferences took place against an interesting political and economic backdrop. The mood at the Labour and Conservative Party conferences was very different.
The Labour party was determined to prove itself as the party of fiscal responsibility and green growth, while the Conservative party was straining all its sinews to present a united front behind its recent growth plans, against a backdrop of unease within and beyond the party (especially in the markets).
On research and development (R&D)
The Conservative Party Conference saw few new announcements on R&D. However, it did coincide with the confirmation of the new Science and Investment Security Minister, Nusrat Ghani MP. After three months of the Ministerial post sitting vacant, the news came as a relief for sector leaders who called for swift progress on issues such as tackling the UK’s blocked membership of EU R&D programmes and making the case for the important role of research and innovation within the government’s emerging economic growth strategy, including protecting last year’s Spending Review uplift for R&D.
Former Science Minister George Freeman made several notable appearances at the conference fringe events, consistently making the case for continued R&D funding and arguing for growth that is based on science, research and innovation.
The previous week at the Labour Party Conference, Shadow Business Secretary Jonathan Reynolds launched Labour’s Industrial Strategy, reiterating the party’s aim to increase overall R&D investment to 3% of GDP by 2030. This included a commitment to raise public R&D spending 1.85% of GDP, committing an extra £1.3bn of funding within the first two years of a Labour government.
With the recent announcement made by the Office for National Statistics to change the way it counts business R&D spend, there is speculation that this could result in the UK immediately ‘hitting’ the government’s target of achieving 2.4% of GDP in economy-wide R&D spending, potentially reducing pressure on the government for continued and sustained public investment. NCUB recently called on government to confirm its commitment to invest £22 billion annually in R&D in order to encourage a greater level of private expenditure, set out in the Autumn Budget and Spending Review 2021. Positively, the £22bn spending commitment was confirmed this week by the new Science Minister in her first appearance in front of the House of Commons Science and Technology Select Committee.
Before the conferences began, Chancellor Kwasi Kwarteng launched the new Growth Plan aimed at unleashing, unlocking and unburdening the private sector to promote economic growth.
The Growth Plan represented a significant pivot in Conservative government economic policy, deliberately placing the private sector, not the state, in the driving seat for strategic economic decision making. NCUB’s full analysis of the Growth Plan can be found here.
Notably, a reversal of the planned removal of the 45% tax rate for higher earners made headlines at the start of the Conservative party conference but there were several positive announcements in the Plan, which were reiterated at Conference, and welcomed by businesses. They included investment zones, a £1 million Annual investment Allowance made permanent, and a package of measures designed to direct additional private capital into innovative businesses to help them grow.
Earlier this year, Labour’s Shadow Chancellor, Rachel Reeves, had announced that a review of startups would be conducted by crossbench peer Jim O’Neill to make Britain the “best place in the world to start and grow a business”. The theme continued at conference and the increase in business presence at Labour’s conference this year was commented on by conference regulars throughout.
On energy markets
The Conservatives’ plan to make good on their promise to introduce energy relief for households and business in the form of an Energy Price Guarantee and an Energy Bill Relief Scheme was met with approval at the Conference.
Labour’s flagship announcement on energy came in the form of Sir Keir Starmer’s announcement that a Labour government would set up a publicly owned energy group with the ability to invest directly in renewable energy and nuclear projects within the first year of being in power. In his speech to the party conference, the Labour leader announced that “Great British Energy” — modelled on European state-owned companies such as EDF of France — would help potentially deliver energy independence for the UK. Labour also introduced a headline aim for UK energy production to be based fully on renewable sources by 2030.
On universities and skills
On the higher education front, Labour delegates heard a promise from Shadow Chancellor Rachel Reeves that Labour would fund universities to take on an extra 7,500 medical students per year, doubling the number of students compared to this year. She also promised to create an additional 10,000 nursing and midwifery placements.
Labour also included several initiatives in their Industrial Strategy to introduce life-long education in FE colleges to all ages, abolish tuition fees for anyone studying their first undergraduate degree and drive-up quality and numbers of apprenticeships.
Tuition fees took centre stage at a Conservative party fringe event featuring both Philip Augur, author of the Post-16 HE Review and Lord David Willetts. Discussion centred around who should go to university, with Augar suggesting Conservative plans for a student number cap were “a bizarre proposition” and that he had no interest in limiting student intakes. Augar also said that, given the present rate of inflation, “universities were getting to the point” where the undergraduate tuition fee was no longer sustainable. There was broad consensus amongst the panel that university should be open for everyone.
A further highlight from both conferences were fringe events focused on the role of universities in the civic agenda. NCUB were delighted to join one of several panels focused on how government can work together with universities to ‘level up’. NCUB’s Chief Executive, Dr Joe Marshall, highlighted the role of universities as place-makers in a session hosted by NCUB member University of York and the Purpose Coalition. A further session hosted by the Education Policy Institute and NCUB member Sheffield Hallam University discussed how universities can and are making a demonstrable, strategic and long-term impact across the country in levelling up, building a strong public sector workforce, global-leading innovation and industry, highly skilled jobs, recovery from Covid-19, and Net Zero.
With the theatre and drama of party conferences over, and with inflation and the long-term sustainability of the public finances at risk, many are now looking towards the government’s commitment to publish the Medium-Term Fiscal Plan, alongside a full OBR forecast at the end of this month.
The Conservative’s promise for growth is ambitious against a backdrop of deteriorating public finances and potentially a crisis of confidence amongst private markets. NCUB strongly believes that any economic growth strategy, and the future prosperity of the UK, is strongly reliant on a vibrant, resilient and well supported research and innovation system. Vital to achieving this will be continued support from government for enabling valuable collaboration between universities and businesses, which will drive the innovations and the skills that the UK will need in the future.