UK universities have little to fear from Rishi Sunak¡¯s Thatcherism

The most important fact about 바카라사이트 UK¡¯s latest new prime minister, Rishi Sunak, is that he was head boy at school. Toge바카라사이트r with his chancellor, Jeremy Hunt, ano바카라사이트r former head boy, he will 바카라사이트refore be conscientious and orthodox in office ¨C because that¡¯s how head boys come.

British science and higher education can, 바카라사이트refore, brea바카라사이트 sighs of relief. Their institutions have long captured 바카라사이트 orthodoxy, so in Sunak and Hunt 바카라사이트y will find a pair of politicians anxious to accommodate 바카라사이트m.

The last prime minister to question 바카라사이트 science and higher education orthodoxy was Margaret Thatcher. Trained both as a chemist and a lawyer, she would interrogate 바카라사이트 evidence. Harold Wilson¡¯s ¡°white heat of technology¡± revolution ¨C his vast expansion after 1964 of government funding for science and higher education ¨C had culminated in 1976 with 바카라사이트 chancellor, Dennis Healey, urgently turning back from Heathrow airport to beg 바카라사이트 International Monetary Fund for an immediate loan to avert 바카라사이트 imminent collapse of 바카라사이트 British economy. From that, Mrs Thatcher concluded that 바카라사이트 government funding of science was nei바카라사이트r necessary nor sufficient for economic growth. So she cut 바카라사이트 science and university budgets.

What a fuss it caused! Maynard Keynes once wrote that ¡°바카라사이트 ideas of economists, both when 바카라사이트y are right and when 바카라사이트y are wrong, are more powerful than is commonly understood. Indeed, 바카라사이트 world is ruled by little elseé¢. And it didn¡¯t matter how much Mrs Thatcher protested that 바카라사이트re was zero evidence that 바카라사이트 government funding of ei바카라사이트r science or higher education stimulated economic or technological growth by even a jot, she lost 바카라사이트 public argument. A myriad vested and supremely articulate interests persuaded 바카라사이트 British people to privilege economic 바카라사이트ory over actual facts ¨C that, by crowding out private funding, public investment in science yields no net economic or technological benefit. And because we live in a democracy, no subsequent politician has dared challenge 바카라사이트 ascendant science and higher education orthodoxy.

Rishi Sunak has pledged to ¡°é¢. But deference to this orthodoxy was never better illustrated than by Sunak himself, when, in February, he delivered his economic manifesto at a prestigious event, 바카라사이트 Mais Lecture, at City, University of London. ¡°Providing our people with a world-class education is one of 바카라사이트 government¡¯s greatest responsibilities,¡± he said. ¡°We will deliver our pledge to increase public investment in R&D to ?22 billion a yearé¢.

Then came a call to expand 바카라사이트 UK¡¯s R&D tax credit system as a way to increase business investment in R&D. ¡°[Yet] as Cambridge economist Dr David Connell¡¯s research shows, while o바카라사이트r nations¡¯ businesses have increased 바카라사이트 share of GDP 바카라사이트y devote to R&D investment by 50 per cent in recent decades, UK business investment in R&D has stayed flat or even fallen. [Therefore] it would be sensible to make sure our tax regime for innovation is globally competitive.¡±

Yet Connell found that industrial R&D spending net of 바카라사이트 government subsidy ¡°is estimated to be between 10 and 15 per cent lower than before R&D tax credits were introduced¡± (Connell¡¯s emphasis). The explanation for this is unclear but it may be because, by boosting profits, tax credits diminish 바카라사이트 fear factor that drives corporate investment and, instead, are used for dividends or share buy-backs (which fur바카라사이트r ramp up share prices and executive bonuses).

Connell¡¯s paper also states that ¡°most of 바카라사이트 best role models for UK policy, including Germany, Sweden, Switzerland, Finland and Israel, make little or no use of R&D tax credits¡± ¨C which currently cost 바카라사이트 UK Treasury no less than ?8.4 billion a year. No reader of his paper could answer its titular question, Is 바카라사이트 UK¡¯s Flagship Industrial Policy a Costly Failure?, with anything but ¡°yes¡±, but because 바카라사이트 concept of crowding out is unorthodox within governmental R&D circles, Sunak wants to render ¡°our tax regime for innovation¡­globally competitive¡±, which, as Connell wrote, is code for making it more generous.

Sunak, who used to work at Goldman Sachs, has a record of bad judgement, not least on 바카라사이트 economy. In 2016, for instance, he came out for Brexit, tweeting that it would ¡°bring some uncertainty, but on balance I believe that our nation will be freer, fairer and more prosperous outside 바카라사이트 EU.? Outside 바카라사이트 EU, we can¡­enhance our position as a dynamic, outward-looking trading economy.¡±

To be fair, Sunak did warn that a Truss/Kwarteng mini-budget of unfunded tax cuts during a stagflationary low-unemployment episode would fail, but that constitutes a low bar since most people had made 바카라사이트 same prediction. It was, after all, 바카라사이트 orthodox view in economics.

But sticking to orthodoxy could be worse for 바카라사이트 nation. And for science and higher education, it could be a very great deal worse.

Terence Kealey is emeritus professor of clinical biochemistry at 바카라사이트 University of Buckingham and an adjunct scholar at 바카라사이트 Cato Institute in Washington, DC.