House of Commons Hansard Debates for 18 Jun 1993

Mr. Robert Jackson (Wantage) : For me it is a welcome coincidence that this debate comes so soon after I left the Department dealing with the issues that we are discussing today. Ex-Ministers retain some relevant inside knowledge of their former Department for perhaps a month after leaving it, so I am still just within my sell-by date. I assure my right hon. and hon. Friends that I do not intend to follow recent precedent and turn what I have to say into any sort of personal statement. [ Hon. Members-- : "Hear, hear."]

I congratulate my hon. Friend the Member for Boothferry (Mr. Davis), who has taken over from me as Parliamentary Secretary to the Office of Public Service and Science. I hope that he enjoys, in his first departmental office, what Macaulay described as

"that closely watched slavery that is mocked by the name of Power."

I was pleased to have had the opportunity to take part in the discussion within the Government that led up to the publication last month of the White Paper on science and technology. I shall always remember with special pleasure and real affection the officials and leading scientists with whom I was privileged to work.

I want to speak essentially about the Government's role in general support for science and technology, especially through the research councils. Another large topic concerns the role of Departments as customers for research, upon which I hope that the House will be allowed to have a debate in good time for the conclusion of the further review that is announced in the White Paper. Many constituencies will be affected, and hon. Members should have an opportunity to consider the issues.

The White Paper embodies a carefully constructed balance between what are perceived to be two distinct concerns : the concern that Government support for

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science should be directed to the most intellectually significant work ; and the concern that the public funds devoted to science should show demonstably useful returns for the people of the country, especially in terms of wealth creation.

The House will notice that I say that those two concerns are "perceived" to be distinct. That is certainly, I am afraid, the case within Whitehall. In my experience, however--my right hon. Friend reported this in his opening speech--the more informed and far-sighted industrialists recognise that the best way for the Government to support wealth creation is for them to nourish the science base and the ideas and highly trained people that it produces.

The main message that I want to leave with the House is that it is critical that, in the implementation of the White Paper policies, a proper balance should be maintained between those two concerns. It is important that Government spending on science and technology should have a clear, easily recognised and explained rationale. Otherwise, matters that should be treated on a long-term basis will be overwhelmed by the whims of Whitehall fashion, or lost to sight in the all-too-brief half-life of the passing parade of Ministers. It is also important to recognise that, while the role of Government in support of science is of critical importance, it is, inevitably and necessarily, a limited role. Putting on one side, for another occasion I hope, the question of how Departments should manage the direct procurement of science for their departmental purposes, the central role of Government in supporting science and technology, as the White Paper clearly argued in chapter 3, is to remedy what economic analysis identifies as a "market failure" in research and development.

Fundamental, speculative science and strategic generic science and technology are necessary for the progress of any science-based economy. As the White Paper clearly says, because of the speculative nature of that work, the long lead time involved and the inescapable openness of most research involving academics, market-orientated operators cannot be expected to fund that kind of work in any comprehensive or reliable manner. The essential role of the Government in supporting science is to fill that gap.

It must not, however, be the role of the Government to second-guess business in respect of the application of R and D to commercial ventures. Paragraph 2.20 of the White Paper makes the point clearly that the Government are not equipped to make commercial decisions. More fundamentally, the effect of too much Government involvement in business decisions about R and D is to diminish the sense of responsibility for R and D within business.

One of the most hopeful achievements of the 1980s, making for greater competitiveness in British business, was the growing recognition in our boardrooms that such matters as R and D and training are too important to be left to the Government. I hope that we will do nothing in the 1990s to undermind that dawning enlightenment.

One of the reasons, above all, why the Government must limit their aspirations in the matter of supporting R and D for business is, quite simply, that the resources that the Government have available for general support for science and technology are, regrettably, extremely limited. The scale of investment required for R and D for business

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in a science-based economy quite simply dwarfs the resources that are allocated in general support for science by the Government. Moreover, it is a simple fact that, in an economy whose leading companies are more and more global in their scale and aspirations, the name of the game in R and D has long ceased to be to exploit the intellectual resources of only one country.

If it is true that the Government's investment in general support for science is simply too small to have much leverage upon R and D for business, it is also true, however, that those limited funds are already more than overstretched in fulfilling what I have described as the central role for the Government in this matter--support for fundamental and strategic science.

The bottom line, as they say, is that any significant shift of Government R and D funding to support what are taken to be business objectives will, in the first place, never be enough to make much difference to business and, secondly, could have potentially catastrophic effects upon the availability of resources for basic and strategic science.

To be more concrete, let me give some figures to illustrate what I mean. Twenty per cent. of the annual research councils' budget amounts to some £240 million. That sum equates to no more than 4 per cent. of the estimated annual spend by British industry on R and D. Yet that £240 million covers just about the whole of the cost of the Medical Research Council, on which we spend currently £257 million, or it equates to the cost of supporting all the work done in astronomy and particle physics, at a cost of £190 million, together with the whole of the sum devoted to the Economic and Social Research Council--£53 million.

I have spoken of the White Paper as embodying a carefully calculated balance between the concern for good science and the concern for wealth creation. I hope that what I have said so far explains why that balance is important. Now let me say something about some of the critical points on which the maintenance of that balance will depend and concerning which I believe that the House would be right to exercise great vigilance. I hope and believe that the Select Committee on Science and Technology will play a leading role in that.

First of all, and perhaps most fundamental, there is the question of the balance between OPSS-funded activities and those funded by other Departments, notably by the Department of Trade and Industry. I regret that the White Paper was unable to furnish evidence of a conclusive understanding on that point.

I hope that my right hon. Friend will pay close attention to decisions taken by other Departments that might create pressures for compensating activity on his part. I hope that neither he nor the research councils will feel it necessary to divert their efforts to make good gaps that may be created by decisions, especially the unilateral decisions, of other Departments.

Next, there is the question of the general direction of the research councils, which has already been mentioned today, and on which I received a reassuring answer from my right hon. Friend at Question Time recently. My right hon. Friend recognises that he assumed a great responsibility when he persuaded the Prime Minister to create a Ministry for science. That major step towards

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centralisation has had the inevitable consequence of the end of the Advisory Board for the Research Councils--the ABRC--as a

quasi-executive body, at arm's length from the Government, operating as a buffer between them and the research councils.

The role played by the ABRC is now to be played within OPSS by the Director -General for Research Councils. It is critical that the person filling that position should understand the world of fundamental science, and that he or she should have an understanding of the role that reflects the rationale for research council funding and the balances that are set forth in the research White Paper. Each individual research council has a new mission statement, promulgated, no doubt constitutionally, in the White Paper. Those mission statements are carefully balanced, along the lines that I have described. It is critical that the new chairmen of the research councils, drawn as they all will be from business, should honour that balance, together with their council and chief executives. I hope that they will never be allowed to forget that they are independent organisations operating under royal charters, not Departments or dependencies of the Government. Their accountability is essentially for how they spend the money allocated to them, not for what they spend it on within the terms of their charters.

One of the White Paper's welcome features is the creation of the new Particle Physics and Astronomy Research Council, which should help to sustain support for the important fundamental sciencies by reducing the extent of direct competition for their funding with other research council activities. However, it is essential that the words of the White Paper and the new mission statements about the continuing responsibility for basic science of all the research councils should be respected. The PPARC must not be allowed to become an alibi for a general retreat from fundamental science.

Another key point of balance relates to universities. The White Paper proposes to retain the dual support system. I am glad about that, because, within reason, decentralisation and pluralism and the multiplicity of decision centres are necessary for success in supporting speculative science. But it is important to emphasise two implications of retaining the dual support system which are not sufficiently recognised in the White Paper.

First, because they constitute only one side of the dual support system, the research councils cannot develop new funding policies without reference to the universities. The university research economy depends on inputs from the research universities. That is another point of balance which will need careful watching. There is a second and wider issue relating to the dual support system, which involves the new machinery for co-ordinating research councils and higher education funding councils described in the White Paper. Just as the balance in the White Paper between concern for scientific excellence and concern for science and technology in support of business must be carefully honoured and respected, so the same balance must be reflected in the working of the university side of the dual support system.

While it is a vulgar category mistake to suppose that applied research and development cannot embody excellent science, there should be no departing in university or research councils from the principle that the

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limited funds provided by the Government for research must be applied only in support of scientifically significant and valuable work.

Critical mass in research is important. It has been recognised, at least since the ABRC study in 1987, that the research money provided to universities has been dispersed too much and insufficiently concentrated on centres of excellence. Current HEFC research policy is producing a desirable shift to the best research departments in the leading research universities. It would be a matter of great concern if that policy were to be reversed in the name of relevance to wealth creation.

I have given merely an outline of a few of the difficult balances that my right hon. Friend and my hon. Friend the Parliamentary Secretary, and those who work with them, will have to keep in mind as they implement the White Paper. I am sure of their good will for science in the task, and hopeful of their success--and that of their successors--in it. However, I do not think that all parts of the Government have either understood or accepted the rationale for Government support for science and technology which I have described and which I believe is embodied in the White Paper.

Ultimately, we all have to recognise that the Whitehall machine is a pretty crude operation, and there is always the danger that the nuanced and subtle elegancies of policy balance in a White Paper will in practice be boiled down into simple and potentially destructive operational conclusions. I know that my right hon. Friend will want to ensure that that does not happen.

On this, perhaps rather minatory, note, let me briefly add a few concluding words about one of the great gaps in the White Paper--that relating to defence, on which I share the perceptions of my right hon. Friend the Member for Pudsey, the Chairman of the Select Committee. I do not want to sound like the Irishman who, when asked for directions, answered that he would not start from where his interlocutor found himself. I well understand the Government's dilemma in relation to defence research. Defence industries are already under great strain, and the motto "Let's not make the situation even more difficult" has consequently been the order of the day.

However, the true starting point for the debate must be the recognition that, as one of the big three after the war, aspiring still to sit at the top table, Britain has now for four decades taxed herself for military purposes beyond the strength of her economy. One of the most serious aspects of that overtaxing is the absorption of scarce scientific and technological talent in defence-related work, with little or no civilian benefit and with high opportunity costs from the diversion of efforts from civilian purposes. The result is that far too many of Britain's leading industrial concerns are defence-dependent--an effect reinforced by generations of industrial strategists in high places investing in the existing and politically influential, and confusing success in subsidised exporting with the achievement of real and positive economic returns.

I shall suggest an alternative industrial strategy for those who are so rightly anxious to promote competitiveness and innovation in British industry. The cold war has ended, the requirement for sophisticated weapons is collapsing and, after the Iran debacle, international arms registers are the order of the day. The military bias of British and American industry in the post-war period no

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longer makes political sense--just as Japanese competition has long shown that it does not make economic or industrial sense. What is needed is an industrial strategy designed to facilitate the most rapid shift of resources freed from a contracting defence industry to be used in competitive industries serving civilian markets. I make no judgment about how it would be best to do that, except to say that market mechanisms will work most effectively. The hon. Member for Redcar (Ms Mowlam) has been showing approval for some of my remarks so far, but I have to say that I am deeply sceptical about Labour's idea of a defence conversion agency. Whatever way is chosen, I have no doubt that it is in that sphere that the present generation of Ministers has the best hope of improving long-term British industrial competitiveness.

If that effort were to be undertaken, not the least important of the resources to be freed would be the huge resources of scientific and technological brainpower that are still tied up in our defence industries. It is a pity that the Government have missed the opportunity to address that topic in all its depth and scale in the first major science and technological statement for 20 years, which comes at a time when the end of the cold war has so self-evidently created an occasion for a fundamental rethink on the subject. A dangerous fallacy is still lurking in the air-- that some way can be found to erect a strategy securing British industrial competitiveness on the basis of the Government's support for science and technology. I hope that I have shown why that idea is both misconceived and deeply threatening to one of Britain's remaining areas of undoubted world- class excellence--its excellence in fundamental science.

The Government's White Paper provides a basis from which that fallacy can be combated. Buy my last word today is that the influence of that fallacy will be successfully resisted only if my right hon. Friend and my hon. Friend, and those who work with them, stand by the settlement embodied in the White Paper and hold fast to the rationale for their work which it sets forth.

11.28 am

Mr. James Wallace (Orkney and Shetland) : I am sure that the House is indebted to the hon. Member for Wantage (Mr. Jackson) for his contribution. He may not be a member of the Front-Bench team now, but the insights that he gave in his analysis of military research and development and its consequences, and the importance of the science base, are valuable. I am sure that he will continue to make such contributions from the Back Benches.

Although the hon. Gentleman said that his speech was not a personal statement, it contained echoes of other personal statements when the hon. Gentleman slightly lifted the veil on what has been going on within and between Departments. That confirmed many of our suspicions.

In order to catch the last plane to my constituency this evening I shall have to leave before the end of the debate. I have written to Madam Speaker about that and told the Front-Bench spokesmen. I shall read the report of the debate in Hansard.

The Chancellor of the Duchy of Lancaster, who has explicit responsibility for science and engineering

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technology, is not just any Cabinet Minister but one who, by his performance today and in the past, shows clear enthusiasm and commitment. Contrary to what we have heard from the Opposition, this is the second such debate that we have had in Government time in 53 weeks. The White Paper heralds the biggest shake-up in the approach to science for two decades.

In view of all those ingredients, we should be excited at the prospect of a serious attempt to come to grips with a hitherto neglected and undervalued area of our national life. However, I fear that all too soon the excitement will disappear and we shall be left with the feeling that we have missed yet another opportunity for British science. The extent to which the Chancellor of the Duchy used quotes to try to buoy his case suggests that he also appreciates that.

As some hon. Members have already said, problems will be produced not so much by what is in the White Paper as what is not. However, it would be wrong to be wholly critical because the document contains positive proposals. The Technology Foresight exercise offers the prospect of a more purposeful sense of direction. Its embodiment of the annual "Forward Look" and the emphasis on a more open approach are welcome developments. I hope that there will be a more open approach and that we shall not see narrow objectives and straitjackets. The document is an opportunity to bring science and technology, Government and industry into a much more constructive partnership.

The Chancellor of the Duchy identified one of the criticisms of the White Paper, although he would claim that it is misplaced. It is the White Paper's failure to address funding. That is not a matter for another time and another place, because the issue is crucial. We take the view that the White Paper fails adequately to address industry's poor record on innovation and what can be done about it. I welcome the comments by the hon. Member for Pudsey (Sir G. Shaw), who is the Chairman of the Select Committee on Science and Technology, about the current investigation into innovation. We look forward to the conclusions. Both those failures point to an underlying failure by Government Departments to get their act together. The speech by the hon. Member for Wantage confirms that.

Almost every hon. Member who has spoken so far has mentioned the Ministry of Defence. The White Paper contains no strategy for conversion from military to civilian research and development. Jobs are at stake the length and breadth of Britain from central Scotland to--dare I mention it?-- Siemens Plessey Systems in Christchurch. If there is no strategy, many talented people will take their talents abroad, and that will be a great loss to the nation.

It is important to acknowledge past achievements, not least in basic science research. That has been generously funded over many years, but, although the Government may claim that during their 14 years in office there has been an increase, the application of a proper deflator to increases in salaries and in the cost of equipment shows that there has been a real reduction in resources for science over the past 14 years. During that period of reduction in

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our country, most of our competitors, recognising the importance of science in supporting modern industry, have been increasing their commitment to academic research.

There is a need to inject more resources and to make sure that we offer attractive careers to our young scientists. That means tackling low academic salaries and providing a career structure. I regret that, in response to an intervention, the Minister seemed to take a complacent attitude to that, reflecting the White Paper's attitude of passing the buck to the universities to let them sort out the problem. Anyone who knows about the difficulties faced by universities over their funding knows that it is a forlorn hope to expect them to undertake that from within their own resources. It is disappointing that there is inadequate support from other Departments, especially the Department of Trade and Industry. When the President of the Board of Trade was stalking the country in his Back-Bench days, he made many speeches about reversing the trend of the decline in science funding. When he took up his present post we had great expectations of his doing something positive and imaginative. Instead, on the day of the White Paper's launch, the DTI announced its withdrawal from a range of new technology initiatives. In the past week, the closure of the Warren Spring Laboratory was announced. That was mentioned by the hon. Member for Redcar (Ms Mowlam). As the right hon. Member for Halton (Mr. Oakes) said, many people identify the importance of the environmental challenge as the new frontier for science and research and development. There is a need to devise new, clean technologies, and Warren Spring could have been said to be at the cutting edge of that new environmental technology. Now it will be lumped together with the Atomic Energy Authority research station at Harwell.

Many of us recall how the dead hand of Harwell stopped Dr. Salter proceeding at Edinburgh university with his innovative ideas for wave power. Although Harwell is no longer dominated and obsessed by the amount of money spent on nuclear research, it has held back at least one project that could have led to an important development in renewable energy technology.

The attitude of the DTI is to limit support to the exploitation of proven rather than new and uncertain technologies. If that attitude prevails, short-termism, which has bedevilled British industry, preventing it from trying to innovate and establish a link between academic science and industry, will be made worse.

I should like to quote from a letter to my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) from Dr. John Isaacs of the department of pathology at Cambridge university. My hon. Friend wrote to him after he read an article about an important developoment, CAMPATH-1H, in the treatment of rheumatoid arthritis. My hon. Friend sought more information and in his letter Dr. Isaacs stated : "Progress is slow primarily as a result of financial constraints. The nature of our research makes it extremely expensive, and whilst Government agencies such as the Medical Research Council do their best, they cannot provide all of the necessary finances. Sadly, science does not carry a high political profile in the UK and there seems little prospect of increasing central funding to the Medical Research Council for work such as ours. Indeed, the current Government has put clinical science funding squarely into the court of Industry. Not surprisingly, however, Industry is primarily interested in products which are close to major clinical applications. Thus we have been developing CAMPATH-1H

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and related compounds for more than 13 years, but an Industrial sponsor has only recently been found. Furthermore, such funding may remove one's scientific licence' during product development or block further novel developments for purely corporate reasons, and is therefore far from ideal I apologise for venting our frustrations upon you in this way but we all feel very let down by the recent Science White Paper which does not tackle the fundamental problems of research funding."

That letter is from a person who has been very much involved in an important development in medical science. It is not the view of a politician but of someone in the field. I hope that, collectively, we will take his criticisms to heart as we address these issues. It is clear that academic science cannot be translated into new products and processes without expenditure by industry. It is sometimes tempting to lay the blame at the door of Governments, but the problem is so endemic that the problem could be laid at the door of this Government or that of the last Labour Government or even the last Liberal Government. It has been a problem for at least a century.

Our poor showing in adapting expertise and brilliance at the basic scientific level and putting that into product development is a measure of industry's failure to pick up and exploit the creativity of British science. The Government blame the scientists and say that they are not coming up with the right kind of research, and use their usual panacea of putting business men in charge of the research councils. In other words, those who have failed British science--I direct this not against individuals but against the generality--are being put in charge of research and could infect it with the same short-termism that has bedevilled British industry for some time. It is important to recognise that there is a cultural problem. The very fact that many hon. Members have spoken of the need to raise the status of scientists, engineers and technologists is indicative of the lack of proper status from which they have suffered for so long. It is also important to concentrate on education and training. The national curriculum addresses the need for pupils up to the age of 16 in England to be provided with basic teaching in science and technology, and that is welcome. However, a curriculum commitment is worthless unless there are the teachers and the equipment to make it a reality. With too few teachers of maths, physics and technology, it is clear that we shall need a crash programme to train teachers in those subjects and secure adequate provision of text books and equipment.

Beyond the age of 16, A-level specialisation, particularly in England, means that many bright pupils do not study maths or science. While I could not be held up as a good example, having been allowed by my school to give up all science except maths--I am pleased to learn from the right hon. Member for Halton that that redeems me--at the secondary 2 level, there is still an opportunity to pursue at least one or two sciences to a much later stage within the Scottish system.

We must also recognise the value of scientists and engineers and encourage the employment of graduate scientists and engineers. For some time, my party has been advocating a scheme that was pioneered in West Germany in the 1970s, whereby small and medium-sized firms were paid 50 per cent. of the salary of graduates on a sliding scale over five years to encourage them to take on science and engineering graduates. That scheme was wound up in West Germany in the 1980s, because it had achieved its

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objectives, but has recently been reintroduced in east Germany to try to bring on that development there. We should consider that here.

We must recognise, as the right hon. Member for Halton said, that there are also problems with the financial institutions, with the reluctance of the City to take a sufficiently long-term view, and its insistence on having an arm's-length relationship between financiers and industry. We should be promoting longer-term relationships and using non-executive directors in a continental-style supervisory board so that they have a much more supportive relationship with the company in which they have invested. Within those institutional ideas, there are examples of imaginative measures that should have been included in the White Paper if it was to address some of the fundamental issues.

I do not blame the Chancellor of the Duchy, who is clearly committed to his subject, but he is obviously not getting the necessary support from other parts of government. When he asked in his review why the United Kingdom seemed to be less successful than its competitors in translating inventions to the marketplace, his thoughts were in the right direction and his ambitions were high. His failure to deliver suggests that his hands have been tied by the Treasury, the Department of Trade and Industry and the Ministry of Defence. Therefore, he has had to concentrate on what he can do in his own empire and has rearranged some chairs in the research councils. That is not necessarily bad in itself, but when more glittering prizes were at stake, that remains a missed opportunity. 11.43 am

Sir Trevor Skeet (Bedfordshire, North) : My right hon. Friend the Chancellor of the Duchy of Lancaster has an horrendous task before him. I have seen a DTI report, published in 1993, containing a list of international rankings of companies by expenditure on research and development. One of our leading companies--perhaps the most leading--is ICI, which comes out at No. 47. The list is roughly as follows : in the first 50 companies there are 20 United States companies, 11 Japanese, six German, four Swiss, three French and a number of other European companies.

It is interesting to look at the participants in Germany. They include Daimler-Benz, Siemens, Bayer, Hoechst and BASF and Volkswagen. Before the war, IG Farben was broken into three parts--Bayer, Hoechst and BASF. They have all now grown larger than ICI and are spending much more money on research, so it is not at all surprising that they score so high in the international list. I mention that because that is the problem which my right hon. Friend the Chancellor of the Duchy of Lancaster faces and the one with which he will have to deal.

The White Paper has some extremely useful recommendations, but one point stands out clearly : there has been a complete dispersal of funding. The Office of Science and Technology has no responsibility for research and development in the Ministry of Defence, the Department of Trade and Industry or the Department of Health. A large part of it is beyond the responsibility of the Chancellor. I make a plea for a more fully integrated science policy. When the Director-General of Research Councils, mentioned on page 32, assumes his responsibilities, he will allocate a much smaller sum of money than he should have received.

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Civil responsibilities are important. Hon. Members have said that the defence budget will be cut. If Yeltsin falls in the former Soviet Union, I cannot imagine that there will be any such diminution, and I hope that the defence budget will continue as it is, but there must also be an increase in the amount of money for science.

There is a need for change in the public attitude to the profession of engineers, but engineers themselves also have a responsibility. They are fragmented and must get together in a more centralised unit. We must recognise the important contribution that engineers can make to wealth creation. I think that they can do it, but the attitude of the Government towards industry in general is important. Britain must take a leaf out of the French book and help our companies abroad. Commercial facilities of United Kingdom embassies throughout the world should be directed towards helping United Kingdom manufacturing companies that are seeking local market intelligence. If we support companies, not merely in the United Kingdom but abroad, we can rehabilitate a situation that has caused us great problems. The crux of the report comes in pages 16 to 23 on Technology Foresight. That programme has been launched by the Technology Foresight steering group and will contribute to the thinking of the Council for Science and Technology, which will in turn influence Her Majesty's Government. That is a critical body and, if my hon. Friend the Under- Secretary can tell us, I should like to know what its composition will be. Will it be broad enough in its base to do its task? It is crucial that the right people are appointed to it and I hope that there will not be a reshuffling of the old pack. Let me refer to one or two changes that have occurred. The Council for Science and Technology was called ACOST--the Advisory Council on Science and Technology--from 1987. Prior to that, there was the Advisory Council for Applied Research and Development. All moved on, one after the other. They did much the same thing--advised Governments on the course and picked the winners, and ensured that taxpayers' money was not wasted but put to good use.

In an intervention, I asked my right hon. Friend the Chancellor of the Duchy to nominate who is to be the Director-General of Research Councils, because he will be vital and the arch-piece of the whole system. Sir David Phillips will have some responsibility, because he will deal with the science "boundary commission", which will allocate the boundaries between the six research councils. The chemical industry and biotechnology industry must also be satisfied about their placings.

The work of the Director-General of Research Councils was formerly done by the Advisory Board for the Research Councils, which succeeded the Council for Scientific Policy in 1972. Most of those groups were heralded with all the pipes that could be put behind them and were told that they could fulfil the future of United Kingdom scientific policy, but some petered out over the years.

The crux of the White Paper, which I support, is to determine at governmental level, through all the agencies available--including the Royal Society and people inside government--who will be the future winners. I believe that it is for industry to provide the answer, but the Government may take some of the responsibility because

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they will provide some of the cash. It is important that we do not appoint to those councils people who will not be able to discharge the highest responsibilities of state. We must not repeat past mistakes.

I feel obliged to pass over defence because that has been adequately covered--although it could be the subject of a full day's debate. About £2.6 billion per annum is spent on research in defence, and lengthy consideration should be given to whether a bigger allocation should be made to civil research.

As to executive agencies, I support the approach taken by my right hon. Friend the Chancellor of the Duchy of Lancaster, although the hon. Member for Redcar (Ms Mowlam) does not. It has been indicated that Warren Spring Laboratory is to be closed. In my judgment, it will not, but will be merged with the AEA Technology at Harwell. A merger means not necessarily a closure, but the transference of one set of servants to another facility that will remain a government institution. As Harwell is a DTI institution, for the time being it will be a case of one function being added to another.

If it is possible to farm out such responsibilities to other bodies, which can probably undertake them much better, why not do the same in respect of the National Physical Laboratory, the Laboratory of the Government Chemist and the National Weights and Measures Laboratory--all of which are at Teddington and part of the DTI ? The same question could be asked of the National Engineering Laboratory in Glasgow. Are they being lined up for launching at a future date ? Could not their work be done adequately in the private sector ? The House would be interested to know.

Several years ago, the annual subscription to CERN was about £55 million, which was large. Today, we find that the responsibility for international subscriptions will be borne by the science budget as a whole. However, as the Science and Engineering Research Council is to be split in two, we may find ourselves in great difficulties. The part that deals with heavy science may find its expenditure reducing over the years. Why should the whole of the science budget take it ? Why not follow the practice in Italy, where funds provided through the Foreign Office become a charge on the state, particularly for foreign subscriptions ?

As to research council boundaries, I understand the advantage of dividing one council into a number of departments, because, without referring to the House or anyone else, it will be possible to move a subject from one box into another very quietly--but when the councils are granted their royal charters and their boundaries are defined, they will each vigorously argue their case.

Chemists engaged in the development of proteins, genes, DNA and so on and in the application of biotechnology must depend more on chemists and on chemical engineers than on biologists. Biotechnology is fitted into three research councils. The Biotechnology and Biological Sciences Research Council will absorb the Agricultural and Food Research Council. The Medical Research Council will embrace health care, biotechnology and the food industries. The Natural Environment Research Council will be involved in the environmental area.

Biotechnology has been separated from the mainstream of chemistry funding located in the Engineering and Physical Sciences Research Council. The Institution of Chemical Engineers complains :

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biotechnology should, in the new Biotechnology and Biological Sciences Research Council, be separated from process engineering, which is logically placed in the new Engineering and Physical Sciences Research Council."

The institution feels that biochemical engineering is a vital aspect of biotechnology. Either the groupings should be modified or some way should be found of funding biochemical engineering as a section of process engineering.

I believe that chemistry has been misplaced and that anything affiliated with chemistry and biotechnology should have its frontiers re-examined, to ensure that those particular industries--which are most valuable to the United Kingdom--are not disturbed. Much work will have to be done on the six research councils to avoid fragmenting associated industries.

Over some years, I have seen the rundown of manufacturing industry in the United Kingdom, and since the war the virtual disappearance of our domestic motor cycle, bicycle, shipbuilding, machine tool, cutlery, glassware, electronic equipment and, to a certain extent, motor vehicle industries.

Mr. Ken Purchase (Wolverhampton, North-East) : Is there anything left?

Sir Trevor Skeet : I assure the hon. Gentleman that it can be vouchsafed that many good industries remain in the United Kingdom. No one country in the world can have all the blessings and all the stars. I have been examining the allocation of employees in the United Kingdom. It appears that more than 70 per cent. are employed in the service industries, and between 20 and 25 per cent. in manufacturing industry. Our scientific base is too small. A figure approaching half the United Kingdom's budget is spent on welfare and health. The welfare of the nation, in its truest sense, lies in manufacturing industry, which has to support everything else ; I feel that more should be contributed to it. I hope that we can debate this subject again soon, because it is vitally important. The White Paper has great potential as a framework, but I should like to know more of the details relating to, for instance, the selection of the experts. I congratulate my right hon. Friend the Chancellor of the Duchy of Lancaster, but I shall be very critical if the proposals are not implemented as I should like them to be.

12 noon

Dr. Jeremy Bray (Motherwell, South) : The hon. Member for Bedfordshire, North (Sir T. Skeet), who is a veteran of science debates, has made another valuable contributioof the Duchy of Lancaster says that there is little real difference between the parties on science policy. Before discussing that agreeable proposition, let me explore one or two areas in which I see substantial differences--not so much between Government and Opposition policy as between the Government's views and those of working engineers and scientists. The question of resources for science follows from the economic gain from technological competitiveness ; technological competitiveness, in turn, follows from research and development and a command of the science base.

There is nothing wrong with the British economy that could not be put right by 2 per cent. per annum faster

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growth in the export of manufactures than is represented by our share of world trade and our relative prices. That means £2 billion more next year, another £2 billion on top of that the year after, and so on. What could be simpler? However, it needs an awful lot of doing.

It needs much more than technology transfer and research and development. It needs investors ; it needs capacity to increase investment ; it needs training ; it needs intelligent corporate strategies ; it needs whole- hearted participation in global development, with both inward and outward investment. However, we also need new and competitive technology. That means learning from others and working at the frontiers of development.

There is a wide misapprehension--not only in the Government--of the time lags involved in the profitable application of research and development. The heaviest development costs come near the point of production and pay- off ; given an expenditure weighting, it is reasonable to look for the pay- off from research and development within three to eight years. We are talking about a complex interaction between research and technological development, rather than a sequential process from discovery to application. A vigorous growth in scientific and technological activity is an important factor in the achievement of economic growth within the current decade.

The Chancellor of the Duchy of Lancaster should have started his argument with the Treasury and the DTI by contributing to their success, or at least reducing the extent of their failure. The grimmer the prospects for the economy, the greater the emphasis needed on technological competitiveness. There is no sign that the right hon. Gentleman was able, or even tried, to get the Treasury and the DTI to understand the plight in which we find ourselves without a more technologically competitive industrial base.

Tactically--no doubt with the prodding of the hon. Member for Wantage--the right hon. Gentleman won the support of the Thatcherite Chief Secretary to the Treasury, against the barbarian President of the Board of Trade, who wanted to shut down basic science altogether and stuff the loot into helicopters for the Iraqs of the future. Tactically, however, he did not get the Treasury to understand the latest evidence from the United States on the effectiveness of intervention in industrial technology and research and development fiscal incentives, such as Bronwyn Hall's recent NBER paper ; not did he clear up the muddle-headedness of the President of the Board of Trade, who spurns support for near-market research while demanding that Government-supported research be near the market.

As for defence research, although the Ministry of Defence acknowledges the "spin-in" to defence from civilian micro-electronic and information technology, the Chancellor did get the Ministry to understand that defence research is gravely weakened generally by not being thoroughly integrated with civil research and development. I am no enthusiastic supporter of the security services. However, I cannot for the life of me see how MI5 and MI6, let alone peacekeeping to guard against communal strife, terrorism and industrial sabotage, crop, animal and human disease and natural and man- made environmental disasters--the security threats of today and tomorrow-- can be adequately safeguarded by a 1940s-stye defence research and development establishment. Even those who

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deal with the things that go bang--the things that move fast and unerringly--have more to learn from integration with civil science and technology than from claustro-phobic, exclusively defence-orientated work.

The Chancellor can influence departmental research activity by helping Departments to understand how, by using science better, they can achieve greater success in their main task. Directors of departmental laboratories have considerable insight in that regard ; but what are they to make of an Office of Science and Technology that asks not, "How can we help your Department to understand how it can make better use of your science in this laboratory?" but, "Is what you are doing really necessary? Could someone else do it more cheaply? How will you subject your work to market testing?" No wonder the Chancellor of the Duchy and his minions are sent packing with fleas in their ears by other Departments. Does that help the right hon. Gentleman to establish the authority he needs when he must deploy the full weight of scientific opinion with his colleagues--for example, to correct the mistaken belief of the Secretary of State for Health that the threat of an AIDS epidemic from heterosexual activity is diminishing?

As I have said, the grimmer the prospects for the economy, the greater is the country's need for competitive technology and research and development. That is what the Chancellor has failed to get across. He has all the arguments to hand : he can deploy them with the research councils and, in particular, with the Economic and Social Research Council. All he has managed to do, however, is secure a cut in the planned science budget, and in Government research and development generally.

When it comes to matters on which the right hon. Gentleman might claim to have achieved more agreement within the scientific community, I wonder whether he realises quite what he has taken on. I consider the restructuring of the research councils sensible : I am glad that biology is being strengthened so that it can build on the incredible advances that it has made.

The Chancellor, however, has now taken responsibility for such matters as deciding how much should go into the various research councils, and into "big science" in particular. It is no good his wringing his hands and saying how much more sensible if would be if American particle physicists scrapped their plans for a super-conducting super-collider, and put their money into CERN's more intelligent and cost-effective large hadron collider.

My view and, I believe, that of many scientists is that there is scope for fascinating and fast advance in particle physics theory, but it is by no means clear, however, that, starting in 50 years' time, physicists would still want to build large particle accelerators. Conceptually, there are ways in which high concentrations of energy might be created in the laboratory--by what the Chancellor might describe as wind surfing on laser beams in ways that they will explain to him at Culham.

The big science today, with the big, diverse, understandable and fascinating pay-off, is astronomy. Particle physics can get only so much science support worldwide, and if the super-conducting super-collider goes ahead, the large hadron collider does not. No science council and no Government-appointed or independent body will ever give the Chancellor that kind of advice. The

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