The Association of the British Pharmaceutical Industry has welcomed Gordon Brown’s eleventh (and probably last) Budget, which promises further investment in science and increases in R&D allowances.

In a move designed to encourage innovation, the chancellor increased R&D tax credits in the Budget, which means that large companies will be able to claim a credit of 130% of their R&D spend from April 2008, up from 125% at the moment. The credit for small and medium-sized companies was raised to 175% from 150%.

The ABPI commended the Budget’s focus on investment in science, including an additional £100 million for partnerships between academia and industry and its director general, Richard Barker, said, “we welcome any steps that can boost the UK’s bioscience-based industry in the face of global competition.” The pharmaceutical industry works on 330 collaborative ventures with academia in the UK and trains 670 PhD students.

The chancellor has promised that investment in science will rise by 25% to around £6.3 billion, by 2010-11 and the increase, if translated into lab research will clearly be welcome,” the association noted, saying that the 2p cut in corporation tax to 28p in the pound “will also be a modest but welcome step in the right direction in support of high technology bio-manufacturing, where tax breaks in other countries have had an adverse effect on the UK’s global position.”

Dr Barker added that the pharmaceutical industry based in Britain spends some £9 million a day on researching new and innovative medicines, “and the chancellor’s moves to reinforce UK biopharmaceutical R&D can only help the UK in its bid to attract more of this highly skilled work.”

NHS spending is to rise by 10% this year with an extra £8 billion of investment, although the ABPI stressed that additional money should be used to benefit patients. “With increased resources, it is to be hoped that the remaining barriers preventing patients being given access to the latest, innovative medicines can be removed,” it noted.