Brexit Grants Briefing

In the run up to Brexit both the UK Government and the EU have tried to give some clarity to business on the subject of grants for R&D.  The UK has stressed its commitment to industrial R&D nationally throughout the process and with respect to Horizon 2020 announced funding  guarantees for projects contracted before Brexit which will run beyond the UK’s departure date from the Union.

The Chancellor, Phillip Hammond’s recent announcement on support for R&D have included £200 million for high performance computing, laser technology and genomics/biotechnology.  Post-Brexit rumours circulate of significant investments in the UK economy, particularly R&D.  As Brexit approaches both industry and academia have pushed hard on the need to maintain research links with the European Union.  There is a powerful lobby from both camps for the Government to find ways in which the UK can collaborate with European partners in R&D going forward.  There is a significant fear that the fruitful research collaborations built up over 40 years will be lost, to the detriment of British industry.

..and so to the recent March votes in the House of Commons on Mrs May’s deal and the course of Brexit. 

A short extension to the Brexit process offers little or no advantage to companies wanting to access Horizon 2020 R&D programmes as few bidding opportunities will be available between now and June 2019.  A long extension to the Brexit process could extend the opportunities to bid for Horizon 2020 until the end of the programme.  However, it should be noted that the European Commission may attach conditions to a long extension of Brexit and it is unwise to assume that the UK’s position with respect to Horizon 2020 programmes would remain unchanged.

So, Brexit poses some significant problems over the coming months, but all is not gloom and doom on the support for R&D.  The Government is currently consulting on the creation of the UK National Prosperity fund, which will among other things support innovation in UK industry.  The aim of the fund is to recycle money that would have gone to Brussels before Brexit to meet UK national priorities.  Details are expected to emerge over the coming months.

Rumours circulating in Westminster indicate the Chancellor is planning to give the UK economy an “economic boost” post-Brexit to counteract any negative effects on industry.  There is talk of support for innovation, high value jobs and the “modern economy”, usually shorthand for investment in R&D via a variety of grant mechanisms.

Finally, even as this article was being drafted the Speaker of the House, John Bercow, ruled on whether the House could debate Mrs May’s Brexit deal for a third time.  Given the ruling that this is not allowed under the rules unless substantial changes to the motion are made the indication is that the extension to article 50, the withdrawal agreement, will be long.  So, potentially Horizon 2020 opportunities will continue for a significant period and the implementation of the UK National prosperity fund may inevitably be delayed.  Given the uncertainty created by this ruling, there will be pressure on the Chancellor to provide a boost to the economy to ameliorate the problems for industry.