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Mr. Williams: I agree absolutely with my hon. Friend. The Committee is delighted that, following a second report, the Government have embraced the principle of establishing the Human Genetics Advisory Commission. People have serious anxieties about genetics, more so perhaps in Germany and other European countries than in Britain, but we have concerns in Britain too. The Select Committee became aware of those concerns during our inquiry.
The comments made earlier by the hon. Member for Mossley Hill represent a strand of opinion. It is not a majority view, but it is a strong view and I share some of his reservations. I am hostile to the idea of germ line gene therapy--our report reflected that hostility--and I am sceptical about the agricultural implications, such as genetic engineering and genetically manipulated organisms. It is important that the hon. Gentleman's views be reflected in the composition of the Human Genetics Advisory Commission. As pointed out earlier, we want the majority of members to be lay people so that the commission carries public confidence. The more open the proceedings and minutes of the commission--its findings should be published simultaneously with submissions to the Government--the more confidence people will have that the public view will be properly reflected.
I found our inquiry on genetics fascinating and our report has been well received. I think it made an important contribution and I am delighted that the Government reconsidered their initial view after we published our second report and that the commission will be established as soon as possible. It should eventually become a statutory commission rather than purely advisory.
In my reading for this debate, I considered in some detail the research and development scoreboard that was published a few weeks ago. Many of the conclusions are disturbing and I shall mention two or three examples, mainly from the Financial Times. Among the top 300 companies in the world, investment in research and development in 1995 showed an increase of 5 per cent. in cash terms. The United Kingdom managed 4 per cent. while the United States forged ahead with 11 per cent. The United Kingdom increase was slightly ahead of Germany's 3 per cent., Japan and Switzerland saw zero growth and investment fell in Belgium, France and Italy. Our figure for that one year does not sound too bad because our investment rose by 4 per cent. and the average for the top 300 companies was 5 per cent., but the Financial Times commented:
The Financial Times also points out:
The performance of British companies is not quite so bad throughout the report. In vehicle engineering, Lucas Industries, our top company, is 21st in the world league table. Indeed, in some sectors, we do quite well. Unilever is top of the food companies, Shell Transport and Trading is second of all oil companies, BT is seventh in the world
league of telecommunications companies, and in pharmaceuticals, Glaxo Wellcome is second, SmithKline Beecham fourth and Zeneca sixth. To tie in with my earlier comments on genetics, it is no coincidence that we are world beaters in pharmaceuticals because, as the Committee found throughout its work on genetics, there is high investment in research and development and a very good return. Taking the scoreboard as a whole, only 18 of the 300 companies listed are British. That shows the historical decline in manufacturing industry in this country.
As a scientist, I am very concerned about what is happening in Britain to science in higher education and the industrial sector. The Clerk to the Select Committee is very good at finding us no end of press releases, and included in them in the past couple of weeks was literature on the decision in Japan to which my hon. Friend the Member for Selly Oak has referred. In Japan, they are planning to increase funding for research in basic science by 60 per cent. by 2000--a 12 per cent. growth in the science budget every year for the next four years. What a wonderful environment to be in. I know that historically Japan has rather ignored science and perhaps lived off international basic science, but it has now seen its importance and intends to invest heavily in it.
Mrs. Jane Kennedy (Liverpool, Broadgreen):
It is a privilege and an honour to speak in this debate. It is a privilege because being asked by my hon. Friends to draw together the different strands of this detailed debate and present a summary on behalf of the Opposition is to be granted a rare opportunity that most of us have an ambition to realise when we are elected but not all of us get. It is an honour because I am sensible of the fact that I am surrounded by hon. Members who have made the study of science and its applications their life's work. I associate myself and my hon. Friends on the Front Bench with the tribute paid by my hon. Friend the Member for Cambridge (Mrs. Campbell) to my hon. Friend the Member for Motherwell, South (Dr. Bray). I include in those comments about scientists being present my hon. Friends the Members for Cambridge, for Birmingham, Selly Oak (Dr. Jones) and for Carmarthen (Mr. Williams).
I pay tribute to the Select Committee. As somebody who is not and would not claim to be a scientist, I found the lucidity and accessibility of the report on human genetics of great help in understanding the issues that have been debated.
The hon. Member for Pudsey (Sir G. Shaw), and my hon. Friends the Members for East Kilbride (Mr. Ingram) and for Cambridge all dealt with the importance of
achieving the right framework for patenting. The Minister owes it to us to comment on that when he responds, because he did not mention it in his opening speech.
The issue of the membership of the testing committee and of the commission was raised by several hon. Members. They spoke of lay representation, and said that the commission, in particular, should be weighted heavily towards lay representatives rather than professors of ethics. Even Members such as the hon. Member for Hastings and Rye (Mrs. Lait) and myself, or even my hon. Friend the Member for Motherwell, North (Dr. Reid), might be qualified to serve on such a commission.
The hon. Member for Harrow, West (Mr. Hughes) talked about the need for a balance to be struck between what the Government can and cannot do. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) intervened earlier to ask whether regulation would be statutory or voluntary. My answer to him is that statutory regulation may be too inflexible to allow for good, well-founded and ethically sound use of human genetic research, and that the speedy development in that area needs a speedy response from the regulators. Parliament may be too slow to respond adequately to the demands of that industry. We shall have to return to that issue.
That does not mean that we are running away from the idea of regulation. Such activities must be carefully regulated, and setting up the commission will be an important step along that route. We must get the balance right between public trust in the work of the companies and scientists in the field, and the stifling of innovation that might result if the regulations are too rigid.
The Select Committee repeatedly returns to that subject in its report, saying that regulations need to be robust and well applied. It concludes that on the whole, the regulatory framework in the United Kingdom is good. None the less, as many hon. Members have said, the establishment of the new commission is to be welcomed.
I press the Minister to answer the question asked by my hon. Friend the Member for East Kilbride: which will be the lead Department of State in dealing with the commission? To which Department will it report? It is of overriding importance to establish the commission quickly, especially in view of the concerns expressed from both sides of the House today.
The Select Committee noted the Government's view that most of the important human disease genes are likely to be identified over the next five years. The huge range of information that will then be available to us needs to be dealt with sensitively, carefully and properly, in accordance with the range of concerns that have been expressed in the debate.
One of the commission's main objectives must be to foster public confidence, and public understanding of the scientific research on the subject, of its potential for enormous health benefits and of the United Kingdom's opportunity to capitalise on that. It is also important that we maintain our lead in Europe as a centre for innovation in biotechnology.
It is necessary to foster confidence, partly because public confidence, or lack of it, in the biotechnology industry can have a crucial effect on its success and its ability to grow. The knock-on effect on the knowledge and confidence of the financial institutions obviously has an impact on the availability of venture capital.
The Bank of England's third report on finance for small firms, which was published in January, says that there is evidence that many high-technology small businesses in the United Kingdom are under-achieving in terms of innovation and subsequent growth. Providing management and marketing support, and corporate venturing, may be the way to satisfy the financial needs of such small firms.
Investment by large corporations in the equity of small nascent companies has not occurred in the United Kingdom to the same extent as it has in the United States. The Bank of England concludes that that difference is largely cultural, and calls upon policy makers to act as facilitators in encouraging the process.
In his opening speech the Minister said that he was worried that industry might not appreciate the importance of its role in fostering scientific innovation. He went on to quote from the press release accompanying the report that he published this morning--a press release whose message was, "British research in good shape".
The report discusses the relationship between publicly funded basic research and the United Kingdom's general economic performance. What is the Minister's response to the Select Committee's criticism that although overseas research and development in the United Kingdom may come in from Europe, United Kingdom investment in the industry often goes to the United States?
The report published today is a welcome tool to illustrate the creative tension that exists between academic and industrial research, and the academics involved in its production have suggested that the evidence is mixed as to whether new firms have been created on a significant scale as a result of the funding of basic research. Work on the topic has been based mainly on case studies of particular universities and fields of science. A previous review found little convincing evidence of major benefits from academic research in terms of generating spin-off companies.
Although it is certainly true that some universities are surrounded by a substantial number of firms--Cambridge is an obvious example of that--the growth rates of these companies is often low. All too frequently, academics do not make good entrepreneurs, and the effective exploitation of their technology usually requires that the ownership of the technology and its managerial control be taken out of their hands at an early stage.
The report refers to Europe, where biotechnology firms--of which Britain has the largest number--generally cluster in areas of academic excellence. However, most such firms in the UK have industrial and not academic founders, despite the fact that Britain has more star scientists in molecular biology than any other European country. Some of the best researchers in the world are working in the UK in our research institutes, universities and hospitals, as many hon. Members have said. Our innovative biotechnology sector is currently hampered by a lack of venture capital funding and a generally cautious commercial environment. We are in danger of reaping the health benefits, but missing out on the industrial benefits that could accrue to the United Kingdom.
"The UK scoreboard, published today by the Department of Trade and Industry, shows that British companies spent 4 per cent. more on R and D in 1995 than in 1994, while their sales rose by 9 per cent. and profits by 18 per cent."
It is a historic sadness of British industry that profits are not reinvested in research and development.
"In 1995, the world's top 300 companies devoted some 4.4 per cent. of sales to R and D--compared to an average of 2.5 per cent. for the . . . UK companies".
In France, Germany, Japan and the United States, companies invest twice as much in research and development as a proportion of sales. The scoreboard examines various sectors in detail and, in the chemical sector, the top British chemical company--Imperial Chemical Industries or ICI--is 26th in the world investment league. In the electronics section, the top British electronics company is 21st in the world investment league. In engineering, our top company, Rolls-Royce, is 20th.
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