If Osborne wants growth, he must protect science and our universities

The huge cuts to laboratories and equipment have already undermined the UK's world class science base.

Britain’s long-term prospects for economic growth could be seriously damaged today if the Chancellor announces further cuts to the funding for scientific research in the Spending Review. Three years ago, he froze the overall budget for research projects and made huge reductions in the amount to be spent on laboratories and equipment, undermining the UK’s world class science base in universities. One of the implications of the attack on science funding for the UK’s competitiveness became obvious earlier this month when we were overtaken for the first time by China in a key international league table showing the proportion of national wealth that is invested in research and development. According to provisional figures from the OECD, total R&D spending by China in 2011 increased to 1.84 per cent of its gross domestic product, up from 1.76 per cent the year before, while UK expenditure fell from 1.80 to 1.77 per cent over the same period.

It is particularly ironic given that the government has this month hosted the annual summit of the G8 nations, which previously was a gathering of the world’s biggest economies. The UK now lies fifth among the G8, behind Japan, the United States, France and Germany, in terms of annual expenditure on research and development, and well below the average for the 28 Member States of the European Union.

Some may question whether it really matters that our competitors are investing more in R&D than us. After all, the input of funding does not guarantee the quality of output in terms of products and services that drive economic growth. But a review of data from 19 countries published by the OECD earlier this year concluded that productivity growth is linked to R&D and patenting.

The decrease in UK investment in research and development is partly due to the reduction in government funding, which fell slightly from 0.58 to 0.57 per cent of GDP between 2010 and 2011. But the relatively low level of the UK’s R&D spending is not only due to declining government support for science. The private sector in the UK also invests less than its counterparts in other countries. This is largely because of the dominance of businesses in the services sectors, which traditionally do not carry out very much in R&D. The latest breakdown shows that the financial and professional services sectors, including banking, insurance, accounting and management consultancy, provided 14.5 per cent of UK GDP in 2011, up from 13.5 per cent the previous year, a much higher proportion than in any other G8 country, including the United States.

The coalition has acknowledged that the UK’s future competiveness depends not just on our traditional strengths in areas such as financial services, but also requires the nurture and growth of new knowledge-based businesses and industries. The Coalition Agreement promised to "create a fairer and more balanced economy, where we are not so dependent on a narrow range of economic sectors". And its ‘Plan for Growth’, published in March 2011, laid out an ambition for the UK to not only remain the world’s biggest centre for financial services, but also to become a global leader in, for example, advanced manufacturing, life sciences, and low-carbon energy. Such sectors depend fundamentally for their success on research and innovation, and the government can create an environment that is conducive not just by offering the right financial incentives, such as tax credits for R&D, but also by ensuring a strong and healthy research base, particularly within universities.

Britain gave birth to the modern scientific revolution in the 17th century and its glittering list of international prize winners is evidence of our excellence in basic research. Most recently, Sir John Gurdon shared the 2012 Nobel Prize for Medicine or Physiology for his early outstanding work on the potential of stem cells, which provided the basis for today’s exciting pursuit of promising new treatments for many serious diseases and illnesses.

In a speech at the Royal Society last November, George Osborne acknowledged that "the sheer quality and range of scientific enquiry ... is one of our nation’s greatest achievements in which we can take real pride", and noted that "the quality of our scientific research base is one of the most significant factors encouraging international companies to bring high-value investment here". 

But the coalition is now sapping this strength, not just through underfunding, but also by its clumsy drive against immigration which is discouraging talented overseas researchers from coming to the UK to study and work.

With countries like China and other developing countries now emerging as economic powerhouses, and investing more in the development of their own knowledge-based economic sectors, UK universities can no longer expect to automatically attract the best and the brightest from around the world. So it is crucially important that the Spending Review boosts the UK’s future prospects for prosperity and growth by increasing research funding for our outstanding universities.

An original copy of The Origin of Species which forms part of 'The Royal Society: 350 Years of Science' exhibition is displayed in front of a portrait of Charles Darwin. Photograph: Getty Images.

Bob Ward is policy and communications director of the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science.

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How the mantra of centrism gave populism its big break

A Labour insider reflects on the forces behind the march of populism. 

For just under a quarter of a century, British politics has been dominated by what might be called, paradoxically, a “theology of centrism” - the belief that most people were more concerned with what works than ideology, and that politics should principally be the art of improving the delivery of public goods. It was a theology that, for all their policy differences, united Tony Blair and David Cameron. Anyone who thought electoral success could be won anywhere but from the centre was either naïve or fanatical, or both... but definitely wrong.

Now, populism is on the march across the West. In Britain, as elsewhere, the political class is unnerved and baffled.

So what happened? Partly, as with all revolutions in politics, the answer is: “events”. Unsuccessful wars, economic crashes and political scandals all played their part. But that isn’t enough of an explanation. In fact, the rise of populist politics has also been a direct result of the era of centrism. Here is what has taken place:

1. A hollow left and right

First, the theology of centrism was the culmination of a decades-long hollowing out of mainstream politics on the left and right.

In the mid-20th century, Conservatism was a rich tapestry of values – tradition, localism, social conservatism, paternalism and fiscal modesty, to name but a few. By 1979, this tapestry had been replaced by a single overriding principle - faith in free-market liberalism. One of Margaret Thatcher's great achievements was to turn a fundamentalist faith in free markets into the hallmark of moderate centrism for the next generation of leaders.

It is a similar story on the left. In the mid-20th century, the left was committed to the transformation of workplace relations, the collectivisation of economic power, strong civic life in communities, internationalism, and protection of family life. By the turn of the 21st century, the left’s offer had narrowed significantly – accepting economic liberalism and using the proceeds of growth to support public investment and redistribution. It was an approach committed to managing the existing economy, not transforming the structure of it or of society.

And it was an approach that relied on good economic times to work. So when those good times disappeared after the financial crash, the centrism of both parties was left high and dry. The political economic model of New Labour disappeared in the first days of October 2008. And when a return to Tory austerity merely compounded the problem of stagnant living standards, public faith in the economic liberalism of the centre-ground was mortally wounded.

2. Fatalism about globalisation

Second, Labour and Tory politics-as-usual contained a fatalism about globalisation. The right, obsessed with economic liberalism, welcomed globalisation readily. The left under Bill Clinton in the US and Blair in the UK made their parties’ peace with it. But globalisation was not a force to be managed or mitigated. It was to be accepted wholesale. In fact, in his 2005 Conference speech, PM Tony Blair chastised those who even wanted to discuss it. “I hear people say we have to stop and debate globalisation," he said. “You might as well debate whether autumn should follow summer. They're not debating it in China and India.” (I bet they were, and still are.) The signal to voters was that it was not legitimate to fret about the pace and consequences of change. No wonder, when the fretting began, people turned away from these same politicians.

3. A narrowing policy gap

Third, the modernising projects of Blair and Cameron ended up producing a politics that was, to use Peter Mair’s term, “cartelised”. The backgrounds, worldviews and character of party elites began to converge significantly. Both parties’ leaderships accepted the same external conditions under which British politics operated – globalisation, economic liberalism, sceptical acceptance of the EU, enthusiasm for closeness to the US on security issues. The policy space between both main parties narrowed like never before. As a result, economic and class divisions in the country were less and less reflected in political divisions in Westminster.

The impression arose, with good reason, of an intellectual, cultural and financial affinity between politicians across the main divide, and between the political class and big business. This affinity in turn gave rise to a perception of “groupthink” across the elite, on issues from expenses to Europe, and one that came with a tin ear to the concerns of struggling families. It may be misleading it is to depict all politicians as snug and smug members of a remote Establishment. Nevertheless, social and economic convergence inside Westminster party politics gave populists an opportunity to present themselves as the antidote not just to Labour or the Tories, but to conventional politics as a whole.

4. New political divides

Lastly, the populist moment was created by the way in which new electoral cleavages opened up, but were ignored by the main political parties. The last decade has seen a global financial crash that has restored economic insecurity to frontline politics. But at the same time, we are witnessing a terminal decline of normal party politics based fundamentally on the division between a centre-left and centre-right offering competing economic policies. 

Of course economics and class still matter to voting. But a new cleavage has emerged that rivals and threatens to eclipse it - globalism vs nationalism. Globalists are economically liberal, positive about trade, culturally cosmopolitan, socially progressive, with a benign view of globalisation and faith in international law and cooperation. Nationalists are hostile to both social and economic liberalism, want more regulation and protection, are sceptical of trade, see immigration as an economic and cultural threat, and have little time for the liberal international order.

The factors that drive this new electoral divide are not just about voters’ economic situation. Age, geography and education levels matter – a lot. Initially both main parties were tectonically slow to respond to this new world. But populism – whether Ukip, the SNP or Theresa May's Tories – has thrived on the erosion of the traditional class divide, and sown seeds of panic into the Labour party as it faces the prospect of sections of its traditional core vote peeling away.

Centrists thought their politics was moderate, pragmatic, not ideological. But signing up to free market liberalism, globalisation and an economistic view of politics turned out to be seen as a curious kind of fundamentalism, one which was derailed by the 2008 crisis. The exhaustion of the theology of centrism did not create populism – but it did allow it a chance to appeal and succeed.

Those on the left and right watching the march of populism with trepidation need to understand this if they are to respond to it successfully. The answer to the rise of populist politics is not to mimic it, but to challenge it with a politics that wears its values proudly, and develops a vision of Britain’s future (not just its economy) on the foundation of those values. Populists need to be challenged for having the wrong values, as well as for having anger instead of solutions.

But calling for a return to centrism simply won’t work. It plays precisely to what has become an unfair but embedded caricature of New Labour and Notting Hill conservatism – power-hungry, valueless, a professional political class. It suggests a faith in moderate managerialism at a time when that has been rejected by events and the public. And it tells voters to reconcile themselves to globalisation, when they want politicians to wrestle a better deal out of it.

Stewart Wood, Lord Wood of Anfield, was a special adviser to No. 10 Downing Street from 2007 to 2010 and an adviser to former Labour leader Ed Miliband.