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Chancellor will have to do better than he has so far if he is to justify such a tough decision in the minds of most scientists and successfully divert the money to other sciences instead of losing it to science as a whole.

Mr. Spink : Does the hon. Gentleman agree that we should support the joint European torus project because it may give an engineering solution to fusion physics?

Dr. Bray : I understand what the hon. Gentleman is saying. The joint European torus is a different matter ; it has nothing to do with high- energy particle physics. It is to do with methods of electricity generation in the future. I believe that it should be financed by a research levy on the generating authorities, but the Government have effectively closed research into electricity generation.

The Chancellor has started many hares : securing genuine career development for scientists ; giving engineering the right kind of research ; getting the research councils sufficiently to support overlapping ; underpinning disciplines such as chemistry ; making the Technology Foresight programme more fertile than a mule, a cross-breed between an academic science policy research unit and a Neddy talking shop. I hope desperately, for the sake of the country, that he can chase them all.

I shall not embarass the right hon. Gentleman by enumerating all those policies that he has lifted from Labour policy--from which, indeed, his office was hatched--but one that I shall mention, as a contribution to the vital public understanding and enjoyment of science, is a national exposition of contemporary science. Although that will culminate in 2001, the build-up needs to start now. If science is so fascinating because it helps us to understand the world--even the funny job that we try to do in this place--it is a fascination and understanding which must be shared with the community as a whole.

12.12 pm

Mr. Spencer Batiste (Elmet) : The White Paper, with its emphasis on the linkage between science and technology and wealth creation, comes after 150 years in which that linkage has been progressively weakened. It has been weakened not by deliberate intent or malice but by the lack of strategic overview of the impact of disparate policies and social trends throughout the period. That is the focus of what I want to deal with today, because we have evolved, as many people have observed, into an industrial society with an anti-industrial culture, which is at the core of the problem that we must now address. In the 19th century, the heirs of the giants of the industrial revolution became country landowners. In his book, "Audit of War", Corelli Barnett described with frightening clarity how in the post-war period our manufacturing industry was unable to produce the products that our scientists had designed. In the post-war period, the low esteem and rewards for engineers have bedevilled recruitment of the very best people. Death duties and high taxation have inhibited the growth of family companies, which in Germany have been one of the triggers for long- term investment in research and development. Family companies in Germany have passed knowledge and wealth on from generation to generation through retained profits. We effectively destroyed our domestic motor industry by using it as an economic regulator, subjecting it to

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repeated changes with which it could not cope, while the Japanese used their car industry as the launch pad of their industrial endeavour in the post-war world.

The irony is that there is no shortage of innovative ideas or world-class science and technology in Britain. But by the late 1970s, we had a real lack of world-class ability to manufacture the fruits of that science and technology base.

Dr. Spink : Will my hon. Friend acknowledge that there has been an increase in research and development in motor vehicle industries of 65 per cent. in the last decade? Does not he welcome that?

Mr. Batiste : I am coming on to that point.

I was talking about the position in the late 1970s. We had poor industrial relations and little management training. We had poor technology transfer from academic institutions. We had a lack of large personal discretionary wealth, which has been the main feature of innovative entrepreneurial investment in the United States. We had over-institutionalised financial structures and a growing lack of skills at foreman and technician level in industry.

As my hon. Friend the Member for Castle Point (Dr. Spink) pointed out, quite a lot changed in the 1980s. Taxation on companies has been reduced and industrial relations transformed. The privatisation process has put large chunks of our industry outside the constraints of the public sector borrowing requirement. The single market process is developing a marketplace for Europe of a size that will enable our companies to compete more effectively with Japan and the United States. Our universities have become more focused on the need to relate to industry.

The pharmaceutical industry has shown that it can draw money out of the stock markets for high-quality investment in a research and development based industry, which has enabled it to become a world leader. We have received massive inward investment from Japan and the United States, which has reborn our motor industry and has triggered world-class manufacturing practices in the component supply industry, which means that not only can we supply our own domestic needs, but, increasingly, we will be able to find new markets in Europe and elsewhere.

The reality is that things have improved in the United Kingdom in the 1980s, but they have improved everywhere else, too. The rest of the world has not stood still. The pace of change is increasing all the time. Our science and technology base is one of our greatest assets. We must face up to the challenge of drawing out the wealth-creating opportunities of that science base while maintaining its creative impetus and independence.

To achieve that, it is vital that the same tune is sung throughout government. The creation of the Office of Science and Technology and the appointment of my right hon. Friend the Chancellor was, I believe, an essential first step in creating the vehicle within government for focusing policy on science and technology. The White Paper is the second step in the right direction and has rightly received a positive and justified welcome.

Many colleagues have highlighted many of the features of the White Paper and I shall not repeat those points, save to summarise what I see as the most important--the recognition of the core role of science and technology in wealth creation, the identification of the United Kingdom's science and technology needs, the restatement of the need for dual funding of universities, the important

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strengthening of the role of the chief scientific adviser so that he can make a more decisive impact in the councils of government and the acceptance of Government involvement in all stages of the innovatory process, including near-market research.

It must be said that our history is littered with examples of our having carried forward the R and D programme to the point where it is about to achieve commercial success, but we have then withdrawn Government support and the programme has failed. A classic example of particular relevance today is that of communication satellites. We developed a world lead, withdrew resources just as the product approached the marketplace and allowed the United States to overtake us and to reach a position of dominance.

The development of the Government's role in Technology Foresight and the development of technology transfer are crucial, as is the restructuring of the research councils with mission-oriented focus. The identification of training needs in industry at large and the education of the public are also part of the process of making us a culture which is friendly to industry and research and development rather than one that is hostile to wealth creation.

The one aspect of the White Paper with which I had some difficulty is the rejection of the concept of Faraday centres. The Select Committee on Science and Technology recently visited Germany where we saw the excellent work of the Max Planck Society and the Fraunhofer and Steinbeis institutes. On reflection, I think that my right hon. Friend was right. Without wishing to diminish the considerable contribution that those institutes make in Germany, I felt that they diminished what went into the universities and, therefore, what could come out of the universities. I believe that the creation of the Smith Institute for Mathematics at Cambridge and Oxford was a better model for us than the German model which no doubt works extremely well there.

Mr. Andrew Miller (Ellesmere Port and Neston) : I also went on that Select Committee trip. Does not the hon. Gentleman agree that institutes such as the Stuttgart Institute for Micro-Electronics are an excellent example of partnership between the state and private sector? Should not the Chancellor consider carefully such institutes which help to cultivate small and medium-sized enterprises?

Mr. Batiste : I entirely endorse what the hon. Gentleman says. Clearly, we saw mechanisms in Germany that provide funding to bring research ideas out of the universities, develop them that little bit further and push them into industry. It is important that we study and learn from those mechanisms, but my point was that in Britain it could be better done within the university structure rather than in institutions that drew strength away from the universities, as I felt was the case in Germany.

We must now consider whether the promise of the White Paper will be fulfilled and whether the powers of the Office of Science and Technology are adequate for the tasks it has set itself. There will always be an overlap between the responsibilities of different Departments of State. That is inevitable, but we are rapidly approaching a time when we need to carry out a radical reappraisal of the structure of government. We have not had such a reappraisal for a very long time. The nature of our society

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and the challenges we face are changing. It is inevitable that some of the structures of government would have to change along with them.

How, for example, can the Department of Health effectively be the sponsor of the pharmaceutical industry while being its largest customer? It is a conflict of interest which means that one side is not given adequate weight in Government debates. How can the Ministry of Defence, which is charged with the security of the nation and trying to achieve value for money, be responsible for promoting the civilian spin-offs of the technology that it develops? What does the Department of Employment do which cannot be divided more efficiently among other Departments?

Clearly, we need to introduce into government the same sense of mission orientation that we have introduced into the research councils. There needs to be a clear distinction between the roles of customer, supplier, regulator and provider. When we have a clear mission orientation within government, each of those roles can be performed more effectively.

If the needs of our science base and of the wealth creation process that arises from that science base are to be fulfilled, the OST must have a decisive voice in many of the decisions of government, even those with consequences far outside the strict confines of science and technology debates.

It is clear from the debate today that there is a wide welcome in the House and in the country as a whole for the White Paper and for the strategic direction it sets out. The House wishes the Chancellor well in the battles to come. Members of the Select Committee share that wish and we shall do our bit to promote his functions in government. We shall monitor his progress carefully and with the keenest possible interest because, as we approach the turn of the century, there can be nothing more important to the success of our country in the next century than that he should succeed in his job now.

12.25 pm

Mr. Ken Purchase (Wolverhampton, North-East) : In order to compete in the world economy, Britain must improve the performance of its manufacturing industry. As has already been said many times, the key is investment in research and development.

Where investment in research and development has been high, as in chemicals and pharmaceutical, we lead the world, although even in that instance our position is threatened following the first assault by the Department of Health on the list of drugs which may be prescribed on the national health service. Evidence already shows that fewer patents are being registered by British pharmaceutical companies since the assault. The Government may claim that their action has reduced the level of year-on-year increases in the drugs bill with, as yet, they claim, no discernible effect on patients treated with generic equivalents. The question is, what effect will the loss of sales of proprietary brands in the home market have on companies' ability to invest in research and ultimately to maintain the lead which creates the demand for new and developed products ? Let us be clear about the importance of exports, especially of high added value goods. Manufacturing

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accounts for four fifths of our exports. By comparison, manufacturing accounts for only one fifth of our gross domestic product, whereas in the 1970s, it accounted for almost one third. No wonder our balance of trade is in such dire straits.

As our industry has shrunk, the budgets available, company by company, for research and development and for training have withered. That is especially true in the small and medium-sized companies, where the first casualties of recession and cuts are inevitably training,R and D, marketing and all the activities that are not regarded as essential for survival. Now we are sucking in imports at enormous cost to substitute for what, just 15 years ago, we had both the technology and the capacity to make for ourselves.

As mainline R and D budgets have shrunk, so Britain has lost the value of simultaneously developed complementary technology. In the early 1960s, I worked on experimental parts for Concorde and TSR 2--hydraulic flight control and landing systems. A whole new body of knowledge was developed in respect of metal cutting and measurement control. Titanium has excellent weight-to-strength properties, ideal for the purposes of aerospace components, but it is an alloy whose use is limited because of the very high friction created during the cutting process, which created measurement control problems. That led to a demand for new cutting techniques and to the consequent further development of cobalt and ceramic tools and new resins and abrasives. Those demands necessarily involved numbers of companies not directly contracting in to the Concorde project. In that way, all the knowledge gained and the techniques developed became the common currency of engineering technology. Unfortunately, these days every company that I visit relies on imports to bring continuous improvements to those processes.

The brilliant world-leading machine tool sector around Coventry, Birmingham and Wolverhampton--and a small group of high-tech companies in the south- east--has virtually gone. One is led to ask, "Is there anything left?" Fortunately, there is a little left, and it is working very hard. In the late 1980s, Ministers were declaring that the import of machine tools was a sign that our manufacturers were gearing up for recovery. To my mind, however, what was presented as good news sadly confirmed that our own machine tool sector was as good as dead.

Times move on and science will not be thwarted. Now the same company that I worked for has developed new smart fly-by-light control systems, using fibre optics to replace the typical mechanical systems currently used in most aircraft. The first flight using the system was on 13 February this year and the system was validated from flight data by the Civil Aviation Authority. However, some doubt--I hope only temporary--has been cast on continuing Government support. On 6 May, the Select Committee on Trade and Industry learned from the Minister of State at the Department that support for the civil aircraft research and demonstration programme is to be reduced by 20 per cent. per year over the next three years. I am not sure how fly-by-light will be affected, but the uncertainty created at all levels within participating companies is profound.

Just when reduced demand worldwide is resulting in major United Kingdom aerospace companies stepping back programmes and just when we have the even greater problem of companies in the far east that are determined

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to go into aerospace in a big way-- Indonesia is a case in point--the British Government choose to shed doubt on their support for world-beating technology being developed in this country. Hon. Members must ask how the prospect of stepping back from research and development can possibly be compatible with the claims in the White Paper that the science base is to be protected from cuts. If the Department of Trade and Industry can contemplate cuts in near-market research, what chance does blue skies research have? In any event, the White Paper contains no plans for vital increases in science-based funding over the next few years, without which there will be a negative effect on the confidence of scientists and engineers throughout the country.

The Government seem to think that their emphasis on shifting resources towards projects with the greatest industrial relevance will be greeted with acclamation--it may not be unqualified. The best United Kingdom companies have always realised the value of original research, without which the industrial vibrancy created by a successful programme of research to market innovation is lost. The White Paper fails to tackle the need for long-term financial support for research. Its authors are confined to a market philosophy and necessarily take only a short-term view. That short- termism is especially a characteristic of pension fund managers' attitudes. They are under constant pressure to arrange their portfolios so that they can consistently out-perform the average return. As pension funds and other insurance interests hold roughly 50 per cent. of all shares in companies, they are in a powerful position to demand a return when, judging by company profits, none should really be available. It is a feature of R and D investment that it is overwhelmingly funded by retained profits which diminish as shareholders demand a better-than-average dividend from cutting -edge companies that are desperate to invest in winning, long-term projects. That is a major problem for Britain which our rivals do not suffer. It is fuelled by the lack of loyalty felt towards our industry by fund managers and it contrasts with the very much greater level of individual and non-corporate ownership common in America, Japan, Germany and France, to which reference was made earlier.

That ownership yields a fierce pride towards the companies in which people have invested and that is lacking in Great Britain. Not too long ago, I recall a lord of the realm--Sir Jeffrey Sterling--saying, in relation to shipping and registration, that his first duty was to his shareholders and not to Britain. Such a statement is indicative of the lack of loyalty felt towards our indigenous companies and industries that seems to be common throughout the country. The White Paper is silent on such matters, no doubt warned off by competing departmental interests. However, it is not so silent when it enthuses about new committee structures for the research councils. Some might say that that is simply an exercise in deck-chair management while no one is captain of the ship. Someone must be put in charge soon.

A genuine partnership between education, industry, finance and the Government is urgently required. However, only the Government can provide the catalyst for that to happen. Economic modelling suggests that significant national benefits are available if, as a result of

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real partnership, improved manufacturing performance can be achieved. Modelling also shows, despite some inefficiencies resulting from badly managed Government intervention such as the

overly-bureaucratic procedures required to obtain finance, that a balance of advantage will remain and will result in improved industrial performance at a new higher equilibrium position. We have some remarkable inherent strengths and advantages in many of our best companies. However, genuine understanding by the Government is necessary to ensure that support is available to encourage invention and innovation. Doing nothing except reorganising the research councils is not an option. Full European co- operation is too far away to prevent further deterioration in our global competitive position. Hoping for inward investment from Japanese companies enthusiastic to take advantage of British inventiveness is foolish in the extreme.

The way forward is to invest heavily in supply-side changes that favour the whole process of education, research and the manufacturing sector. Only in that way will the natural ability and potential of our people be realised and released. We must demonstrate our confidence in British-owned companies based in this country. That means that they must be allowed to develop with the use of a healthy level of retained profits and free from financial speculators and greedy takeover moves. In such an environment, our companies can grow at similar rates to those of our international competitors. For the whole period of Conservative Governments, the emphasis has been on the acquisition, stripping out and selling of companies that have been the backbone of British manufacturing. Now, when manufacturing represents such a small part--one fifth, as I said earlier--of gross domestic product, far too many City fleas are getting a free ride and a free meal on the over-burdened, over-stretched body of British industry.

I regret that the White Paper fails to argue strongly for a cultural change which would value the scientists and engineers on whom the country is so dependent for sustaining our well-being. I regret also that it fails to recognise the opportunity to put the real added value of applied science and technology at the top of the agenda.

Because of that failure, the White Paper can be only partly welcomed. Perhaps in future it will be seen as an occasion when once again, the Government did ary to the innuendo of the hon. Member for Wolverhampton, North-East (Mr. Purchase), I warmly welcome the White Paper. I hope that the hon. Gentleman's criticisms and those of other hon. Members, in particular the pointed but intelligent comments of my hon. Friends the Members for Pudsey (Sir G. Shaw) and for Wantage (Mr. Jackson), will be taken to heart when the Government consider future action.

I also welcome the White Paper because I am honoured to be chairman of the all-party engineering development group of this House and of the other place. The White Paper is a further illustration of the Government's commitment to pushing manufacturing, engineering, technology and science up to the top of the political agenda. That would not have happened without the

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support and commitment of my right hon. Friend the Prime Minister, who was responsible for setting up the Office of Public Service and Science, for which my right hon. Friend the Chancellor of the Duchy of Lancaster and my hon. Friend the newly appointed Parliamentary Secretary, Office of Public Service and Science are responsible. The White Paper is also a significant indication of the determination to improve the competitiveness of British industry, and that determination was highlighted in the House only a week ago. It is an indication of closer contact and interaction between industry, academia and the Government. Training and enterprise councils are an illustration of that, as are company training schemes, both of which are mentioned in the White Paper. Only the other day, I had the privilege of opening the university of Brighton's teaching company centre--just outside my constituency but, of course, embracing it. We in Sussex are proud that it is already the largest teaching company centre in the country.

I welcome the creation of the Engineering and Physical Sciences Research Council, and I voice the same hope that has been voiced by some of my hon. Friends--that practising engineers from industry will be strongly represented on the council.

The White Paper is also a welcome reminder of the importance of setting high standards, particularly in engineering. Standard setting in Europe is now very influential worldwide, in contrast with years gone by, when most standard setting emanated from the United States. The United Kingdom, within Europe, is a world leader, and we should praise the British Standards Institution's job in that sphere. From the engineering standpoint, the White Paper underlines the importance of engineering to the United Kingdom. That point cannot be overstated. It has been stated by Ministers time and again, yet somehow it does not sink into everybody's mind. In engineering, we have annual sales of £100,000 million, including £50,000 million of exports, output accounting for 42 per cent. of our manufacturers' gross domestic product, and the employment of about 2 million people. That also emphasises the importance of the White Paper to manufacturing and engineering within manufacturing in this country. Like others before me, I wish to ask one or two questions. Will Government funding be adequate to the task that the White Paper identifies? For instance, are the Government pledged to protect the science vote as an investment in our country's future from any imminent Budget cuts? My right hon. Friend cannot commit himself on that point, but he can commit himself to the battle for it. What additional help can be expected from the Treasury to encourage the financing and introduction of industrial innovation, especially through the Technology Foresight exercise? I and other hon. Members wonder whether the Treasury is close enough to industry to understand its real needs.

We must question whether more industrially relevant research can be undertaken without a serious reduction in support from the research councils for basic research, which is already mission-oriented. That research accounts for 20 per cent. of the research councils' expenditure. What

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can be done to encourage and help industrial managers to grasp the opportunities offered by British research and innovation, and to make the long-term investment that is needed to profit from it? The central issue relates to how we regain Britain's position as a world-class manufacturer. That is not thoroughly addressed in the White Paper. The reason may be traced to a point made by hon. Members on both sides of the House about Government policy coherence through all Departments to ensure that science, engineering and technology are developed.

While I welcome the added emphasis on masters' degrees, I share the worries expressed by my hon. Friend the Member for Pudsey and the right hon. Member for Halton (Mr. Oakes) about basic education in terms of the teaching of mathematics and arithmetic in the national curriculum. Do we need to consider broadening the sixth form curriculum and giving students greater encouragement to continue their education and vocational training until 18, or even after? The Department of Trade and Industry has been mentioned in that context. Should it be given the main responsibility for science, engineering and technology development? Having raised that question, I must say that the Department has cut its annual expenditure on research and development, and does not seem to be committed to the maintenance of support for innovation.

The future role of the Ministry of Defence was mentioned by my hon. Friends the Members for Pudsey and for Wantage. What Government help will be given to assist market forces in the switch from military to civil research and development? I suppose that it all comes back to a recommitment to developing engineering, science, technology and our manufacturing potential.

An anti-industrial culture still too often prevails. In all Government Departments, there is room for encouragement to change. The Royal Academy of Engineering and other institutions and federations in the engineering world will do their bit to help the Government bring about the necessary change. The contrast between our commitment to national excellence in science, engineering and technology and our relative weakness in exploiting it to economic advantage still remains. The White Paper represents a most welcome beginning to a process of change. Equally, that process must continue to develop.

12.48 pm

Mrs. Anne Campbell (Cambridge) : I enjoyed the speech of the hon. Member for Lewes (Mr. Rathbone) who made some valid points to which I shall return.

One statement in the White Paper, with which I entirely agree, states :

"Women are the country's biggest single most under-valued and therefore under-used human resource."

It is perhaps no great surprise, but nevertheless a great disappointment, to find that just nine lines of that 74-page document were devoted to the subject of attracting more women into science and engineering.

The Chancellor of the Duchy of Lancaster has chosen to opt out by deferring any further discussion on that matter until the report of the working group and committee of inquiry into women in science and technology has been published. That inquiry was not established until March, nine months into the debate on the White Paper, and it is not due to report until September. I do not know whether that is a means of

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sidelining the problems faced by women scientists ; if so, the opportunity to tackle those problems will be lost for a long time. It says a great deal about the Government's commitment to science and technology that, only a few days after publication of the White Paper, they announced the closure of Warren Spring Laboratory, Britain's premier research institute for environmental technology. On the day that the White Paper was released, however, the Chancellor of the Duchy said :

"On Warren Spring, my right hon. Friend the President of the Board of Trade has not taken any final decision."--[ Official Report, 26 May 1993 ; Vol. 225, c. 932.]

I find that answer a little disingenuous.

The Government have reneged on the agreement reached last year to relocate Warren Spring at a site in Welwyn Garden City, bought for that purpose. The environmental problems facing this country are not diminishing, but increasing. This is not the time to cut the investment on environmental technology or to disband research teams with internationally renowned expertise.

Some of the White Paper proposals are sound, including the Technology Foresight programme and the annual "Forward Look". Many in the scientific community and in the Labour party have long argued for a national strategy for science. The progress in that direction is welcome. In general, however, the White Paper is a damp squib, which promised much and delivered little. In addition, I fear that some of what it has delivered is wrongheaded.

Paragraph 1.13 of the White Paper acknowledges

"the widely perceived contrast between our excellence in science and technology and our relative weakness in exploiting them to economic advantage."

Having acknowledged that analysis, however, the White Paper fails to comprehend the significance of it.

Many of the reforms to the administration of the science budget and research councils proposed in the White Paper imply that the problem lies not in exploitation of the science base for economic advantage, but with the science base itself. I strongly object to that analysis. The White Paper has tackled that problem by streamlining the research councils so that they will be staffed with fewer members overall and with more people from industry.

The research councils are being instructed to give greater emphasis to applied research. The implication is that the councils are currently allocating funds for the wrong sort of research, yet that misses the point entirely. I fear that the reforms, if applied literally, may stifle creative research in Britain. The applications of basic research cannot be anticipated, which is true almost by definition. The difficulty of picking winners is well established. It is not true that our scientists are failing to produce scientific innovations, which could be taken up by industry. Many of their innovations are taken up by industry, but the problem is that they are not taken up by British industry.

An excellent letter from Professor Roger Needham, who is professor of computing at Cambridge university and one of my constituents, was sent to the Select Committee on Science and Technology. He set out succinctly that the two things he creates are skilled people and ideas. He described, with some feeling, the difficulty he encounters in getting United Kingdom companies to realise that they should try to persuade good graduates to work for them. He described further difficulties that he has had in getting companies to accept good ideas. He wrote :

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"When it comes to the exploitation of results, the situation is not much better. An extreme but nevertheless genuine case, is as follows. A research student came to see us after working for GEC for ten years. In the course of his PhD work he took out a patent on an invention and he talked to British Telecom and GEC about it. They were polite but uninterested although the subject matter was very relevant to their businesses. He published a paper in an international journal, sold his patent to a Californian start-up and is now with them as a respected engineer."

Other advanced industrial economies are keen to exploit the fruits of the labours of British scientists, but I fear that we will not realise the potential of British science until the British Government, British industry and British financial institutions realise the error of their ways. The White Paper contains nothing to encourage that process.

Page 15 of the White Paper states :

"the Government recognises that circumstances can arise where market forces do not work in a satisfactory manner and investments in commercial research and development which offer a good economic return to the nation will not go ahead without some sort of public support."

The statement that market forces do not always work is a refreshing admission from the Government.

I shall describe a situation in which market forces are clearly not working. The United Kingdom research and development score board was published last week. It has already been mentioned by several hon. Members, including the hon. Member for Bedfordshire, North (Sir T. Skeet) who quoted from it at length. It showed that the 336 British companies surveyed spent on average 1.6 per cent. of their income on research and development last year compared with an average of 4.6 per cent.--almost three times as much- -for the world's 200 top spending companies. Even the 11 British companies ranked among the top 200 for research and development spending on average spent just 2.5 per cent. of their income on research and development, compared with between 4 or 6 per cent. for the other companies. To cap it all, the average British company spends twice as much on dividends to shareholders as on research and development. That compares with the world's top 200 companies which spend two and a half times as much on research and development as they do on dividends--they have their priorities right ; we have our priorities wrong.

Even the President of the Board of Trade described the figures as sobering. In a debate in the House earlier this year, the Chancellor of the Duchy of Lancaster described the result of a similar survey as sobering. Perhaps the entire Cabinet find the figures sobering--it will no doubt find the results of next year's survey equally sobering. But the question is--what is the Cabinet going to do about it?

Once again, the Government have failed to take the opportunity to introduce additional tax incentives for firms spending on research and development. In rejecting tax incentives, the White Paper states that the Government's aim remains

"the avoidance of special tax subsidies which distort commercial investment decisions."

That dogma rings hollow. Against all the evidence, the Government remained mesmerised by their faith in market forces.

The United Kingdom, Turkey and New Zealand share the dubious distinction of being the only countries out of the 24 members of the Organisation for Economic Co-operation and Development that spent a smaller proportion of their national wealth on research and development in 1990 than they did in 1981. In Britain, responsibility for the decline lies squarely with the Tory

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Government. The proportion of gross domestic product invested by the Government in civil research and development fell from 0.72 per cent. in 1981 to 0.5 per cent. in 1990. Those figures come from the Save British Science society. That meant that the Government spent £1.2 billion less on civil research and development in 1990 than they would have done if they had maintained spending at the 1981 level as a proportion of GDP.

Much of the fall can be attributed to the rigid application of the near- market rule--another foolish element of Tory dogma. The White Paper refers to the relaxation of the rule, but it is a timid reference. It would be interesting if the Chancellor of the Duchy of Lancaster could underline and strengthen the commitment to spending more money on near-market research.

The White Paper's failure to address the issue of resources and set targets for increasing the proportion of national investment in research and development is one of its greatest omissions. We read that Government spending on defence-related research and development will be reduced in real terms by one third by the end of the decade. There is no discussion of the possibility that, as a result, more resources will be diverted into civil research and development. There is no statement about how scientific expertise built up in the defence industry might be preserved for the nation. The diversification of the defence industry is not even discussed. It is a simple story of cuts. That is a great missed opportunity, well illustrated by my hon. Friend the Member for Motherwell, South (Dr. Bray), to divert resources into the areas that threaten the security of the western world.

Hon. Members have spoken about careers in science and technology. The chapter in the White Paper dealing with that subject is deeply disappointing. Worse than that, many scientists will find parts of it highly insulting. There is a consensus that a postgraduate setting out on a career in scientific research should have more formal training at the outset. In that sense, the proposal that postgraduates should normally undertake a year's tuition for a master's degree before embarking on a PhD course is welcome. However, I am deeply concerned--that concern is shared by many scientists--about the manner in which the change in the pattern of postgraduate training is to be achieved. There will be no new resources, which means that more people taking master's degrees will mean fewer people taking PhDs. Throughout the long debate leading to the publication of the White Paper, I have not heard anyone suggest that this country suffers from a surfeit of people with a PhD. We need more scientists trained to the highest degree if our economy is to thrive in the long term.

The White Paper makes little reference to the poor financial rewards of scientists compared with highly qualified people in other professions. I presume that that is because the Government are not willing to admit to a problem that they are unwilling to solve. When job insecurity is added to poor financial reward, it is a wonder that anyone chooses to pursue a career in scientific research in this country. I have been married to a research scientist for the past 30 years and therefore speak with feeling and some interest in the subject.

Far too many of our brightest scientists live a hand-to-mouth existence on short-term contracts. In that respect, the proposal that the research councils should

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fund more longer-term fellowships and that the universities should allocate funds to support some research staff between contracts is welcome. However, the White Paper is unapologetic about the plight of the majority of research workers who will still have to move from one short-term contract to the next and from one institution or project to another, always worried about where the next pay cheque will come from.

The White Paper is worse than unapologetic because it contains the appalling assertion that scientists themselves are to blame for being condemned to a series of short-term contracts. That is in paragraph 7.28 which says that they have unreasonable ambitions to pursue careers in academia when what they need is more career guidance to disabuse them of the idea that they can pursue the career of their choosing. That is complete rubbish. Short-term contracts are not the choice of the scientist ; they are the choice of the employer and, effectively, the choice of the Government.

It is the lack of a career structure and of basic conditions such as maternity leave and child care that lead to many women moving out when they reach childbearing age. I shall not pursue that as I raised it in an intervention. According to Department of Employment statistics, although 56 per cent. of laboratory technicians are women, only 20 per cent. of chemists and less than 10 per cent. of engineers are women. Women are poorly represented in the research councils. The Advisory Board for the Research Councils has only one woman on its 24-member council and among the permanent staff there are no women at grade 4 and only one woman out of 23 at grade 5. That pattern is reflected in the research councils.

Gender discrimination is rife. A Royal Society of Chemistry survey showed that 29 per cent. of women encountered discrimination. Worse still, when the Institute of Physics conducted a similar survey, it found that 49 per cent. of women had experienced discrimination when applying for jobs.

In the introduction to the White Paper, the Government have the gall to quote the president of the Royal Society, Sir Michael Atiyah, another of my constituents. He said :

"Too much stress on organisational structures may obscure the basic fact that progress in science depends on the ideas, inspiration and dedication of individual scientists, not the machinations of councils, committees and Departments."

The problem is that the Government have not the wit to understand the meaning of those words. Far too much of the White Paper is about "the machinations of councils, committees and Departments" and far too little is about fostering the talents of our scientists. The White Paper is a failure because it fails to address even the chronic under-investment by British industry in research and development and innovation.

In advance of the debate, I consulted another constituent of mine, Dr. Matthew Freeman, who works at the Medical Research Council's laboratory of molecular biology in Cambridge, and who is also on the executive committee of Save British Science. He said :

"There is nothing inspiring in the White Paper. Scientists in Britain are demoralised and uncertain and were looking for some hope. Apart from some stirring sentiments there is nothing to relieve the gloom. If you ask scientists at the bench what would help, none would say that an internal shake-up in the committee structure in Whitehall would be a high priority. As an ex-chairman of British Scientists Abroad, I am sure that there will not be a single scientist who will decide to return to Britain on the basis of this White Paper."

Column 1151

That says it all.

1.5 pm

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