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The scrutiny will also examine current ownership and financing arrangements, and will recommend alternative models where that would lead to more effective operation of the customer- contractor principle and better value for money.

It is essential that Britain does not waste resources on out-of-date structures, when it is vital for our future that our output of good science is increased. I look forward to receiving the scrutiny report.

This debate heralds a new chapter in a genuine and enduring British success story. I do not want to look back in time, but rather to focus on a key element of the Government's approach to the challenge that lies before us, as this country strives to compete ever more effectively in the high-tech world in which we live. I want briefly to set in its historical context the reasoning behind the changes the Government are making to the research council system.

The Department of Scientific and Industrial Research--the DSIR--and the University Grants Committee were established in 1915 and 1919 respectively, as a way of channelling Government funds into important activities that the Government had no wish directly to control. As the hon. Member for Cheltenham (Mr. Jones) may recall, the University Grants Committee was established primarily to stop Lloyd-George diverting all the funds to the University College of Wales. That arm's-length principle was also embodied in the Haldane recommendations of 1918, which represent the real foundation of our science research system. Haldane's recommendations set out the principles that governed the operation of our first research councils--the Medical Research Council, founded in 1920, and the original Agricultural Research Council, founded in 1931. Both councils, Haldane's principles and the research system that stemmed from them are all alive and well today. Government, then as now, held the purse strings--but those with central policy responsibilities, then as now, do not tell scientists which projects to undertake. The same governing principles continued to apply when, following the Trend report of 1963, three more research councils came into being as a result of the Science and Technology Act 1965. The DSIR ceased to exist and the two historic councils--the ARC and MRC--joined three new councils in a new structure, reporting then to the Secretary of State for Education and Science rather than to Privy Council committees. That five- council system has also generally served us well, for the best part of 30 years.

If there is a criticism of the reform of the research council system that occurred in the 1960s, it is that it entailed too much administrative tidying up, and too little strategic direction. Science was joined with education in an academic camp, and technology was given its own separate Ministry. Overall strategic thinking arguably moved the wrong way.

The unfortunate result was a widening of the gap between science and technology, when the opposite was needed. The strategies set out in the Government's 1993 White Paper shifted the direction, to minimise that gap.

In correcting that imbalance, however, the Government have taken care not to overthrow a research council system that has functioned well for many years. To make a clean break with such a distinguished past would have been an unnecessary gamble. Rather, the Government are set on a

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path of evolution, building on past successes, in the light of a clear emphasis on the economic and technological partnership between industry and academia, without threatening the excellence of the research itself.

Today, the Government seek the House's approval for draft Orders in Council which declare three new bodies to be research councils for the purposes of the Science and Technology Act 1965. They are : the Biotechnology and Biological Sciences Research Council--BBSRC ; the Engineering and Physical Sciences Research Council--EPSRC ; and the Particle Physics and Astronomy Research Council--PPARC.

The White Paper announced the intention to create the three new councils from 1 April this year. The orders would, from 1 April, bring the new Councils within the scope of the primary legislation that governs the United Kingdom's research councils ; most importantly, the orders will give me power to fund the new councils.

Sir Trevor Skeet (Bedfordshire, North) : I am very much encouraged by what my right hon. Friend has been saying. I think that this is good for the research councils, but I hope that the boundaries are not fixed for ever. I hope that the overlap will be considered realistically, bearing in mind the fact that biotechnology and chemistry could be subdivided into two or three parts. That would not be healthy for either industry.

Mr. Waldegrave : My hon. Friend has made an extremely good point. Part of the purpose of appointing a director general for research councils is to go some way towards the recommendation of the Morris committee and the House of Lords Select Committee, which argued for a single research council, to avoid the problem of having boundaries. I came to the conclusion that such a huge structure would end up being more bureaucratic than the single-tier research councils. However, with a director general specifically charged to oversee the boundaries and to ensure that anything that may lie across them or outside the current categories does not escape, we shall address the extremely important problem that my hon. Friend rightly raises. The new councils were incorporated by royal charter on 16 December. The object of each charter makes explicit the obligations on each council to work to meet the needs of the users of its research and training outputs, and to contribute to the economic competitiveness of the United Kingdom and--this is new--the work for the public understanding of science, in line with the mission statements set out in the White Paper.

It is fair that, in cases in which there are large research grants--not in every case--there should be some obligation on those who are receiving public money to demonstrate if possible the importance of what they are doing to the wider community who are paying for it.

Sir Dudley Smith (Warwick and Leamington) :As my right hon. Friend knows, I have a long-standing interest in the pharmaceutical industry. It is perhaps an industry which, more than any other, through such co- operation can be got across to the public, because of the eventual outcome of new medicines and new lifesaving devices. From what my right hon. Friend has said today, it seems that, although the research council has worked well in the past, there is a better opportunity for further co-operation in that respect.

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Mr. Waldegrave : I am well aware of my hon. Friend's long-standing interest and expertise in these matters. I believe that the strong support that we have received from what is, after all, one of Britain's most powerful and successful industries is a sign that we are on the right lines. We have received support and detailed co-operation from the pharmaceutical and chemical industries in this country in the work that we have been doing and are continuing to do.

The clearly defined objects, which are set out in the mission statements which lie before the House and which are reproduced in the schedule to each draft order, give us, for the first time, a clear yardstick against which to measure the overall performance of the research councils, and the degree to which they have introduced appropriate structures and mechanisms to deliver what we are asking of them. That is not empty managerial jargon. The objects articulate clear national purposes.

The councils also throw out a challenge to industry. A partnership clearly needs wholehearted commitment from all the partners ; the recent excellent report of the House of Lords Select Committee--which welcomed the broad thrust of what we have done--made the fair point that it is now up to industry to respond if the system is to work properly.

Dr. Bray : The right hon. Gentleman has emphasised that the objectives identified in the schedules represent operational guidance for the research councils. Why do they differ from the mission statements in the White Paper?

Mr. Waldegrave : They differ because we have engaged in further consultation, which I would expect the hon. Gentleman to welcome. The principle on which I have been operating is that, unless we work broadly with the grain of what the scientific and engineering communities want, we will not achieve the success that we want. Hon. Members on both sides of the House would probably agree that we need more from industry than the warm words with which it has greeted the White Paper and the direction of our policy. I am gratified by the piles of responses from leading industrialists and academics, from which I am able to quote ; but if the potential is to be genuinely achieved, we need investment, partnership and a more long-term view. The achievements of the chemical and pharmaceutical industries must be matched with those of a wider section of industrial life.

Mr. Michael Connarty (Falkirk, East) : Is the right hon. Gentleman as concerned as I was to learn that the British Technology Group--which handles one third of the patents resulting from university research-- receives 85 per cent. of its income from licences from foreign companies? It says that the British industry is doing nothing to take this up voluntarily. What is the right hon. Gentleman doing to make industry take that step more formally? At present it is just a wish, which currently seems to be failing.

Mr. Waldegrave : The statistic that the hon. Gentleman quoted is rather a good indicator of the direction in which we must move. I do not think that the present position is cause for congratulation. The whole thrust of our policy is to build a partnership which we hope will improve that position.

It is because this is very much more than a wish that we are building new partnerships, and--after only a few weeks--beginning to redirect the research councils'

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priorities towards forming close working partnerships with industry. It is easy for us to blame industry, but the fault is not all on one side ; it also lies with the classic British separation of academia and wealth creation.

The other day, a distinguished scientist told me that there was nowadays not much point in talking about C. P. Snow's "two cultures", arts and sciences. The real cultural division is now between the academic sciences and the sciences connected with manufacture and wealth creation. We now need to reverse what I have described as the division between science and technology, which was somewhat widened by the instutitional structures established in the 1960s. That is an all-party point ; I am not being party political.

We used to talk of technology transfer as though it were a linear process, but it is not like that : progress and co-operation must be much more intimately linked, and that is what we are endeavouring to achieve. Along with my colleagues in other Departments, I find that our partners in industry are co-operating wholeheartedly to make the partnerships real ; and the new initiatives that I announced earlier are a concrete step towards that end.

There is, however, another side to the coin. Industry does not want Government-funded research to gear itself up simply to meet short-term needs. One of the best ways of protecting long-term research is to gain support from the best and most far-sighted industries. We must sustain our traditional excellence and innovativeness in the core disciplines of biology, chemistry, mathematics and physics. One of the additional amounts that Sir John Cadogan has managed to find is intended to finance the not immediately applied subject of stochastic mathematics.

I should make it clear that the objects of all the councils also reflect the White Paper mission statements in requiring each council to support basic as well as strategic and applied research, with a strong emphasis on quality. I make no apology for stressing that emphasis again. We must have top-quality research ; supporting second-rate research is completely wasteful. In this area above all, we must have the courage to close things down when they lose their quality, and to shift money back to excellence.

Mr. Dalyell : On the topic of closing down, may I ask the Chancellor about JET? What is happening in the dispute between personnel paid United Kingdom rates and those paid EC rates?

Mr. Waldegrave : That is the responsibility not of my Department but of the European Community, which has been negotiating with the staff on those matters. My Department has not been directly involved. It is for the Commissioner and JET to negotiate directly.

Mr. Mike Hall (Warrington, South) : Will the Chancellor comment on the future of the Daresbury and Rutherford Appleton laboratories? I am worried that Daresbury, the leader in the world of nuclear physics, will close down, and I hope that the Chancellor will reassure me this afternoon that that excellent facility in my constituency has a future under the new arrangements that he has announced to the House today.

Mr. Waldegrave : Because of the change in the structure of SERC, the Daresbury and Rutherford Appleton laboratories need new structures, which are now being considered. In the meantime, those laboratories are being managed as a unity, which is sensible. An option for the

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future is that they become a unified research facility, which could be at the service of research universities and the country as a whole. Some universities are interested in managing them. A number of options are being considered.

The hon. Gentleman, who is assiduous on behalf of his constituents and the nation concerning that important facility, will know that decisions must be taken in due course about new facilities for synchrotron radiation at Daresbury. Those decisions have not yet been made but the important facilities that remain at Daresbury will be approaching the end of their life in the next decade, and we must decide what will follow.

Under the Research Council restructuring, two of the five existing councils --the Agricultural and Food Research Council and the Science and Engineering Research Council--will cease to exist in their present form from 1 April. There are pragmatic as well as strategic reasons for that. In its present form, SERC receives about half of the total funds allocated under the science budget and simply has too great a span of research.

The majority of SERC's portfolio will therefore be divided between the Engineering and Physical Sciences Research Council and the Particle Physics and Astronomy Research Council. That split builds on the logic of SERC's own recent reorganisation of its internal board structure.

The EPSRC will support research in chemistry, mathematics, physics and engineering, and will develop close links with the industries underpinned by the physical sciences and engineering. That council will have an especially prominent role in developing partnerships between scientists and engineers, and industrial and commercial users of research, building on the good work already done by SERC in that area. I pay a warm tribute to the work undertaken by Sir Mark Richmond, the last head of SERC in its old form.

The PPARC will fund research and post-graduate training in particle physics and astronomy. That council will, almost exclusively, support basic research, although it too will have a responsibility to consider its potential contribution to wealth creation, particularly in high quality engineering. The quality of the engineering in many of those great facilities is extremely high.

Important developments are taking place in those sciences. Since the American abdication from the superconducting collider, the European Particle Physics Laboratory, CERN, now stands as the pre-eminent world resource in that area. Decisions must soon be taken about the next generation of particle accelerator, known as the large hadron collider. The creation of PPARC within the research council system will provide a clear focus for consideration of the United Kingdom's approach to such large programmes.

A new council is being created to recognise the increasing importance of research in the life sciences. That council is the Biotechnology and Biological Sciences Research Council. The BBSRC will, to a significant extent, combine the current work in biology and biotechnology of the AFRC and the SERC. It will also develop close links with biologically based industries, in line with its mission statement.

The creation of a dedicated council for these areas of research will make sure that we have the capacity to respond quickly to the many opportunities arising in the

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life sciences. It will help us to build on the considerable achievements of United Kingdom researchers in these fields supporting, for example, the development of disease-resistant crops, or the formulation of new pharmaceutical products.

The three new councils will join the Medical Research Council, the Natural Environment Research Council, the Economic and Social Research Council, all of which now have revised charters conforming in all respects to the model of the new councils.

Sir Trevor Skeet : This is a technical and complex arrangement. What are the special responsibilities of the Director General of the Research Councils, and how do they fit in with those of the chief scientific adviser?

Mr. Waldegrave : The director general advises me on the distribution of money to the research councils and on the matter--one that my hon. Friend and I discussed in the Chamber earlier today--of keeping an eye on the boundaries and ensuring proper flexibility and co-operation in the work of the councils. The chief scientific adviser has much wider responsibilities, running across the whole of government. He is, of course, the Prime Minister's chief adviser--not mine, although he works in my Department.

The troika of senior people at the head of my Department--the permanent secretary, Mr. Richard Mottram, the chief scientific adviser and the director general--work together to co-ordinate and provide a sense of direction in the Government's entire science and technology effort.

The revised charters conform to the new model, in a system where each council has a clear focus to meet the needs of the users of its research--a system that will continue to support basic as well as strategic and applied research but will help to ensure that relevance to the country's needs, alongside excellence, is a clear criterion in selecting research proposals for support ; and a system committing the councils to promotion of and support for related post-graduate training.

There will be some other significant adjustments in the new system. The Natural Environment Research Council will take over from SERC responsibility for research in earth observation, atmospheric chemistry and science-based archaeology. The Economic and Social Research Council will take the lead in setting up and running a joint committee on the management of innovation, which will have the active participation of all the other councils. In making these changes, I have followed the advice, above all, of Sir David Phillips, the retiring chiarman of ABRC and one of the finest of our post-war public servants in the administration of science.

From 1 April, all councils will have a part-time chairman, selected with a view to securing representation for research users and to bringing in relevant industrial or commercial experience. I am pleased to say that we have very good people for these roles. Sir David Plastow of Inchcape plc will continue as chairman of the Medical Research Council, and Sir Alistair Grant of the Argyll group, who is the current chairman of AFRC, will become the BBSRC's first part-time chairman. Mr. Robert Malpas of the Cookson group took up the chairmanship of the Natural Environment Research Council last year. AT EPSRC we shall have British

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Telecom's Dr. Alan Rudge, and at PPARC Dr. Peter Williams of Oxford Instruments. I shall announce the part-time chairman of ESRC shortly.

It is very encouraging for the future of science and engineering in this country that such a strong team of top-flight people from industry and commerce is in place and that our leading science-based firms have shown themselves willing to support the new system in this most important respect.

We are also assembling a very powerful team of chief executives. Sir Dai Rees FRS carries on at MRC. Professor Tom Blundell FRS will move from AFRC to BBSRC. Vacant posts are being filled through open competition. Professor John Krebs FRS will be chief executive of NERC from 1 April, and in the case of PPARC we have Professor Ken Pounds FRS.

The White Paper on science and technology has been widely welcomed in the scientific and industrial communities. At lunch time today we heard from Lord Flowers a generous tribute to that document. We took a strategic look at what scientific research and post-graduate training should be funded, and we have resolved to build on existing strengths to create a closer and more systematic partnership between the science and engineering base and industry and commerce. The creation of the new research councils is a key step in that process. Accordingly, I commend to the House the draft orders, which enable the next building blocks of our strategy to be put in place. 4.29 pm

Mr. Michael Meacher (Oldham, West) : I begin with the admission that prior to the debate I had not heard of Megalab UK, but I had the good fortune to be given the Cabinet Office handout. The Chancellor of the Duchy of Lancaster, who never knowingly understates his exploits, described it in a byline as "the biggest experiment in the world". Underneath were the words, "The search for the mass experiment". Unfortunately, in the course of his long speech, he did not tell us what it was and the mind boggles as to what he was thinking of. Perhaps it is a lie detector for the Scott inquiry, perhaps the manufacture of a bullet-proof vest for the Prime Minister, which would certainly come in useful, or even the discovery of a definition of "back to basics". Perhaps what the right hon. Gentleman really had in mind when he used the words "mass experiment" is something that we all want--a general election as soon as possible. I can at least share the right hon. Gentleman's surprise that we are debating three relatively non-controversial orders on the Floor of the House at peak time for three and a half hours. I agree that there are apparently no limits to the perversities of business management in this place. However, we have the unaccustomed opportunity to debate what we all agree is a key issue for the future of this country but which is rarely given the political attention that it deserves. I refer, of course, to the role of research in Britain's science base. In that context, let me say immediately that we would not wish to dispute the principle of the establishment of the three research councils, but some questions still need to be answered. Although I listened carefully to the right hon. Gentleman, I do not think that he answered them.

First, the Science and Engineering Research Council has been split into the Engineering and Physical Sciences

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Research Council and PPARC, or the Particle Physics and Astronomy Research Council because, in the past, currency fluctuations affecting foreign commitments of the latter side, such as those involving CERN or the Conseil Europe en pour la Recherche Nucle aire, have severely squeezed the budget of the former side. Now that the split has been made, how will the PPARC budget be guaranteed against excessive fluctuations in sterling? Two years ago, Ministers had a ready answer and said that the problem would be cured by the exchange rate mechanism, but that fell apart.

Secondly, the Biotechnology and Biological Sciences Research Council is to replace the Agriculture and Food Research Council. The new emphasis on biotechnology, genetics and other abstract theories sounds fine but the AFRC has historically had a mission to support farming efficiency and food safety. How can we be sure that those important roles will be protected in the priorities of the new organisation ?

Thirdly, there is what I may perhaps refer to as the missing research council, the dog that did not bark in the night, or the one that the Government are not creating--the humanities research council. [ Hon. Members-- : "Hear, hear."] I am glad that there is some support for that view from Conservative Members. Why has the right hon. Gentleman ignored the advice of the Economic and Social Research Council and the British Academy which conducted a joint study of the problem, chaired by Sir Brian Follett who is the vice-chancellor of Warwick university ? As the House knows, the study concluded that a group was needed to protect research in humanities in British universities. I think that I am right in saying that the academy has been forced to establish its own pretend group, so why has the right hon. Gentleman omitted to set up one ? Is it perhaps because it does not fit in with the Government's well-known economic market prejudices ? If there is some other reason, we should like to know. The hon. Member for Bedfordshire, North (Sir T. Skeet), who has left the Chamber, mentioned the important subject of the role and accountability of the Director General of the Research Councils, Sir John Cadogan. He has been in post for a month only. It is still not clear what right he has to tell organisations with their own royal charters what to do. What will be his relationship with the heads of the research councils and with the chief scientific adviser at the Office of Science and Technology ? The right hon. Gentleman was asked that question. He gave a smooth answer which, I think, conceals a problem of considerable overlap and potential tension, but we shall see what happens.

We know that Sir John Cadogan will not be the accounting officer for the science budget. He will not be the line manager for the heads of the research councils, but he will have, as was said, direct access to the right hon. Gentleman and he will not have to pass his advice on the science budget through the chief scientific adviser. Even so, the House of Lords Select Committee on Science and Technology was worried that he still might not be able to command sufficient authority ; the right hon. Gentleman did not mention that. It suggested, therefore, that he should be given the right to publish his advice to the right hon. Gentleman--I wonder what he feels about that--and the right himself to dispose of a slice of the science budget, perhaps 1 or 2 per cent. or something of that order, and "to touch the tiller of the science base in ways which could make an important difference over a number of years"

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--to use the Committee's phrase. That is an important proposal and we should like to know the Government's response to it.

In contrast, the Opposition argue that to entrench the director general's authority in that way could risk vesting too much control in OST or the Office of Public Service and Science when at the same time there was not enough control over other Departments' research and development. That is already a sector in which the discrepancy produces perverse effects on the overall output of Government research.

The right hon. Gentleman likes to tell us--he did so again today--that OST spending on the research councils is to be maintained, and in some ways increased, during the next two years. What he does not tell us is that the spending on research by other Departments will decrease for the second year in succession. The Ministry of Agriculture, Fisheries and Food, for example, has already announced a 6 per cent. cut in its research budget and other Departments are announcing reductions. If we consider the situation overall during the next three years, the Government will cut their spending on science by more than £400 million.

According to the latest issue of their "Annual Review of Government-funded Research and Development" in 1993, the Government spent £5.6 billion on science in 1991. By 1995, that will have decreased to £5.2 billion. Contrary to the right hon. Gentleman's assurances, or in addition to those assurances about protecting his own research council budgets, it is one of the great tragedies of the recession that Government Departments have responded to the general call for spending cuts by targeting their research budgets. In spite of all the fine words in the White Paper, the Government, when it comes to the economic pinch, do not believe in investing in research.

The annual review also shows that, of the G7 leading industrial countries, only Britain and Germany cut their research in 1991. As a percentage of gross domestic product, Britain spent 2.19 per cent. on research in 1990 and only 2.08 per cent. in 1991, which is the latest year for which we have the figures.

I am fully aware that the Government argue that they spend on R and D an amount that is comparable with the amounts spent by other members of the G7 overall, but that is because the United Kingdom's figure is inflated by unduly high military R and D expenditure. If one combines the comparison to civil research and development--that is basically what we are discussing today--Britain spends little more than half what Germany and France spend. That telling statistic is mapped clearly in that excellent report.

As for civil R and D--I am now referring to the dual support system-- Britain's research council budgets have to be substantially supplemented by the higher education funding councils, and it is precisely there that the resource switch into teaching caused by the pressures of student numbers and cuts in Government funding has put the greatest squeeze on research budgets. That is the development that has had the sharpest impact on university research. Moreover, the Government also plan to shed thousands of scientific staff over the next few years. By 1995 the number of people employed by the Government in research is forecast to fall by about 6,000-- 16 per cent.

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That is not the only source of insecurity among the scientific community. The right hon. Gentleman mentioned again today that the future of up to 30 research council institutes was being sketched out by a panel of so-called efficiency experts who had been sent around the country looking for candidates for privatisation--or, as we learnt today, if not privatisation, then contractorisation or some other model. The right hon. Gentleman asked : can we afford to have the wrong structures? I ask : can we afford to have the constant undermining of professional morale involved in uprooting the institutes for such purposes?

There is also a real fear in the scientific community that long-term research, and research that is not commercially profitable, will gradually be phased out. I know that that is a sensitive area and that the Government deny the possibility, but one must ask what is meant by a switch towards wealth creation. What exactly are the Government trying to achieve? Fears are generated by such language. One might conclude that that atmosphere is hardly likely to be conducive to the right hon. Gentleman's admirable desire for a partnership, which we would endorse, between science, the Government and industry.

Indeed, that whole idea was roundly attacked by the House of Lords Select Committee. The right hon. Gentleman was somewhat selective in his references to its report. Yes, much of the White Paper is applauded in it, but there is much criticism, too. In this case, the ground was that Britain's traditional scientific strengths could be undermined. Those are not my words but those of the House of Lords Select Committee, which said that the right hon. Gentleman's "predilection for wealth creation"--

Mr. Waldegrave : The words that the hon. Gentleman has quoted are not those of the Select Committee but come from the account in the New Scientist. I had a word with Lord Flowers at lunch, and he authorised me to say that the account in Nature is much more accurate in that matter than the account in the New Scientist.

Mr. Meacher : I am glad to hear that, but I am not entirely satisfied. We would still like to know exactly what is meant by the right hon. Gentleman's predilection for wealth creation. In what precise ways does he expect to change the direction and funding of research budgets? Exactly how will that affect what happens on the ground? There is a certain mysticism about the idea, and that is a source of considerable concern.

The Lords Select Committee says that if universities and research councils are forced to spend more of their scarce funds on research for industry, in the long term that would be bad for science, and bad for industry too. The Committee insists, rightly, that the needs of user communities should be interpreted in the broadest fashion. The whole idea should not be confined to the short-term need for answers to specific questions. If companies want that, they can perfectly well get it for themselves, from their own laboratories, or they can pay for it if they need to use the science base.

The Select Committee continues--I quote this passage because I agree with it-- [Laughter.] Let me put that another way. The passage expresses a view which I share, which I am glad to see strongly and eloquently expressed by the Lords Select Committee :

"The priorities for the Science Base ought to be longer-term needs".

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It is precisely that feeling that causes ripples of uncertainty when we hear phrases such as "wealth creation". Is that really a longer-term need, or will it be translated in a very different way? The report says that the priorities should be

"longer-term needs, for a resource of fundamental knowledge and a source of researchers trained to international standards." That is absolutely right.

Indeed, there must be real concern about whether basic and fundamental research in mathematics, physics and chemistry is being put at risk by the shift towards wealth creation. Such research is also threatened by another change that the Government are making, to which the hon. Member for Bedfordshire, North referred--the abolition of the Science and Engineering Research Council. One of that body's predecessor's functions was to fund research that fell in the gaps between other councils. That responsibility will cease to exist when SERC is wound up in April. Some researchers can then expect to find that no council will fund their worthwhile research. That is the risk.

The Minister's view is that the director general will be concerned with flexibility and with filling gaps. We shall have to see, but there certainly is a problem. I suppose that the Minister may reply that if such work falls outside the new overview--I believe that he prefers that terminology to the word "strategy"--it has no place in his national framework. However, any suggestion of a top-down approach is widely seen as running counter to the essence of scientific research, which depends heavily on the enthusiasm and inspiration of individuals.

The Lords Select Committee was well aware of that, saying : "If the Government's new strategy for the Science Base is so directive that it leaves no space for a keen young scientist with a new idea, then it will defeat its own object, by starving the Science Base at its roots."

The right hon. Gentleman seems to be nodding ; how far is he really aware of that danger? How far does he intend to press the strategic emphasis on wealth creation? That is probably the single most important question that we want answered in the debate.

The uncertainty, and the reason why we are so concerned about it, is illustrated by the technology foresight programme. The Minister is right to say that the OST may see that as a long-term affair, with programmes looking up to 15 years ahead, and only loosely connected with current spending plans. However, the Department of Trade and Industry sees it in a different light, as directing funding for research in the near future. That is a serious problem, because the right hon. Gentleman has failed to win over his ministerial colleagues to an agreed Government strategy. He continues to influence science only via OST funding, with no remit whatever over other departmental expenditure. The Department of Trade and Industry has just announced that it is to scrap the post of chief scientist, without the chief scientific adviser in the OST being given any authority over the science spending plans of other Departments, such as the DTI. So much for the Government's commitment to science. The interdepartmental confusion of objectives is a major serious flaw in their strategy.

There is at least one good thing to be said for the right hon. Gentleman's latest plans--I am sure that he will be relieved to hear me say that. At least he is now backing away from his daft idea of reducing the number of PhDs, by insisting that all postgraduate students must take a master's degree first. He should be far more concerned about the lack of a proper academic career structure,

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because nearly half of the United Kingdom academic research scientists are now on short-term contracts running for less than three years. When those contracts run out, often they cannot get further jobs, and they leave research altogether.

The science base of the country is, as we all agree, an absolutely key national resource. It is also one which, sadly, has declined and has not been nurtured to the extent that it deserves. I think that I am right in saying that, in the 1950s, King's college, Cambridge displayed more Nobel prize winners than the whole of France.

Mr. Waldegrave : It was not King's college.

Mr. Meacher : It may have been King's or it may have been another university. I readily accept that the right hon. Gentleman has more knowledge than me on that matter. One Cambridge college had more Nobel prize winners than the whole country of one of our major industrial competitors. Virtually no Nobel prizes have been awarded to British scientists working in Britain since 1978. That is a clear mark of our decline and it is matched by the plummeting of the United Kingdom in the science citation index in the 1980s.

The orders may well set out a new structure for the research councils, but I have to tell the right hon. Gentleman--

Mr. Waldegrave : Will the hon. Gentleman give way?

Mr. Meacher : I suppose so.

Mr. Waldegrave : Have not we plummeted from second place to second place in the citation index?

Mr. Meacher : It is well below second place, but I shall check on that. Whereas we were only just behind the United States, we have now fallen a long way behind. I believe that we have been overtaken by other countries. The right hon. Gentleman is far from producing a convincing strategy which will reverse that sharp decline and, until that science base is strengthened, the future of our manufacturing industry and the standard of living of our people will not be securely underpinned.

4.51 pm

Sir Giles Shaw (Pudsey) : I welcome the motions, although I am rather saddened that there is not a larger attendance to debate matters affecting science, technology, innovation and the entire creative output of British industry. I am saddened even further that the Chancellor of the Duchy of Lancaster now departs. There are six members of the Select Committee on Science and Technology present and I shall therefore be brief in the hope that all of them will be able to present their views.

I welcome the creation of the new research councils. I also welcome what the Chancellor said about funding. Even if the decisions taken in November implied that there might be a modest increase in funding for science, the announcement is virtually in line with inflation and maintains the status quo. That is not unreasonable in such difficult times.

I suggest to my hon. Friend the Parliamentary Secretary that it is a little sad that my right hon. Friend the Chancellor saw fit not to publish the distribution of the money between the research councils before the debate or to make them known during the debate. If he had done so, that would have allowed us to discuss how the distribution of the

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funding would affect the three councils that we are discussing and the others in the group. However, that is a matter of small import against the long-term importance of what is being debated today. The hon. Member for Oldham, West (Mr. Meacher) raised a number of queries as to whether the council will have a significant long-term and stable interest in the science sector and the innovative technology that must be drawn out of the science base. My hon. Friend the Parliamentary Secretary will know that it is essential in financing, whether of the councils or of the science base as a whole, that we arrange to have a stable cash flow. That cash may increase, but if we are to maintain the necessary rhythm of science development in each of the sectors covered by the councils, to begin decreasing the expenditure that is fed to those councils in their new form would cause difficulties.

The Engineering and Physical Sciences Research Council is the core issue on which I wish to spend most of my time. As Sir William Barlow of the Royal Academy of Engineering says :

"Of the new councils the ESPRC, as reflected in its mission statement, probably has the most important role."

I endorse that because we have been looking for a way to isolate such research from our major competitors and from those from whom it currently requires a transfusion of scientific endeavour, but also at least to give the council a remit that is related to the basic requirements of manufacturing. In that case, the Royal Academy of Engineering is right to regard it as the most important council and that is no doubt why Sir William Barlow also says :

"We warmly welcome the establishment of the Engineering and Physical Sciences Research Council. We hope that this will reinforce the importance of engineering in industrial wealth creation." That is one of the themes that has engaged the Select Committee on Science and Technology during its current research. There should be a requirement to ensure that in Britain there is not only a deep and clear commitment to scientific endeavour that has the possibility of lifting our industrial base and of lifting the industrial culture but a recognition of engineering and the development of engineering as crucial elements that affect out competitiveness and success as an economic nation and the success of our academic institutions as a source of excellence. In that cause, I believe that the Engineering and Physical Sciences Research Council will play an important role and I hope that we see that developed soon.

One of the objects of the council, set out in the order, is that it has

"to provide advice, disseminate knowledge, and promote public understanding in the fields of engineering and the physical sciences."

I hope that my right hon. Friend the Chancellor and the Director General of the Research Councils, when he is fully acquanted with his new remit, will consider the dissemination of knowledge among British industry as a crucial issue. That was patently exposed when examining witnesses in Committee. It contrasts massively with the knowledge, integration and acceptance of innovation in the other economies against which we are able to meassure ourselves, albeit in a peripheral sense.

In Germany, right down to small and medium-size enterprises, the knowledge of, the need for, and the ability

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