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Mr. Ernie Ross (Dundee, West): I welcome the opportunity to talk about the impact of the biomedical industry on the economy of Scotland. Like you, Mr. Deputy Speaker, I grew up in an era when the belief that there was a job for life was instilled in most of us. We went to school, we left school and we hoped to start an apprenticeship. We imagined that we would join the thousands of men and women who marched through the factory gate every day with a piece in our pocket. We thought that we would do that for 40 years and would retire with our gold watches and dig our allotments or look after our grandchildren.
That world has disappeared in the past 20-odd years. I am not saying that I regret it, but the Dundee that I grew up in is nothing like the Dundee of today. For decades, our national reputation as the workshop of the world rested on the assumption that we had a unique manufacturing capacity. When I first became a Member of Parliament, I had already served my time in a shipyard and had then become an engineer. I imagined that I would be an engineer for the rest of my life. Not long after I became an MP, the shipyard closed and other manufacturing sectors started to disappear. I remember arguing with the Scottish Development Agency, as it was then, that we should do something to revive manufacturing industry in Dundee, if not in Scotland.
We received a good response from the Conservative Government at the time, who were a good bunch of Tories. They understood the need to support the economy in Scotland and did one or two things right. They got it wrong for the next 17 years, but initially they did things right. We in Dundee realised that we also had to change and we established the Dundee Project, which was the first of its kind in Scotland. A Labour-controlled town council worked with a Tory-controlled regional council and a Tory Government through the SDA. Each put their responsibilities into one pot.
The Dundee Project was established in 1980 and has since become the Dundee Partnership. Instead of a person having to go to the Government, local authorities and universities to find out if there were development opportunities, land and skilled people in the area, they were able to go through one door and obtain the information that they needed. It paid off.
As an engineer, I maintained that we should be searching the world for manufacturing companies to come to Dundee. A guy called Geoff Lonsdalewho has since moved on but is still working in the enterprise industrysaid to me, "Look, Ernie, Dundee's future lies in the medical area." I looked at him, thinking that he was having me on. I thought he was trying to deter me from pursuing manufacturing companies and I could not understand how hospitals and doctors could create jobs. The biotechnology industry may have existed in America, but it did not exist even in anyone's head in Dundee, far less in terms of wealth creation there. That is why I am glad that we are having this debate.
Biotechnology is important for the health of the individual and the economy. The medical and scientific communities are presented with new challenges as the world's population grows and ages, and the demand for new and better medicines is expected to grow. There are many conditions for which there are not yet effective cures, such as cancer, heart disease, allergies and tropical diseases. Scotland has a vital role to play in world health terms to try to resolve that problem.
During the past three years, the biotechnology sector alone has grown by 30 per cent. The European bioscience market is expected to be worth £100 billion by 2005, so the Scottish bioscience community has a vital role to play in our economic future as well as a contribution to make to our health.
Growth in the sector is bound to create new opportunities on our doorstep, so that we can offer better jobs than working in the Dundee jute mills. More importantly, as an engineer I witnessed a loss of skill and talent in the 1970s and 1980s. During those decades, some of our brightest and best scientists moved abroad to apply their talents and there were many inquiries into how to reverse that trend. We are now witnessing such a reversal, with Scotland attracting research scientists from around the globe. We should all be proud of that.
I have often heardusually from Opposition Membersthat Scotland gets more than its share. On this occasion, I am prepared to accept that argumentbut we are entitled to receive more. Scotland consistently secures a greater percentage share of funding from United Kingdom research councils. That is one piece of evidence that shows the ground-breaking, important and high-quality work going on in Scotland. Earlier, I mentioned the world-class nature of the research currently undertaken in Scotland. That is backed by the most recent research assessment exercise, which concluded that an 18 per cent. improvement in quality had been recordeda faster rate of improvement than in any other part of the UK. We are entitled to more than our share, because of the quality of work being carried out in Scotland.
Although we can be justly proud of what has been achieved thus far, the biotechnology sector as we understand it, is still in its infancy. In the years ahead, it must continue to develop, and it can do so only by working in partnership. That partnership will involve collaboration between the Government, universities, the enterprise network, research funding institutes, local government, the pharmaceutical industry and private investorsall have been critical to what has been achieved. That same determination to work in partnership will be critical to our future success.
I have spent years attacking the pharmaceutical companies for the prices that they charge for their drugs. Now, I must admit that Dundee has benefited. The Wellcome Trust, the largest research trust in the world, gave Dundee scientists a substantial sum to open the
The Minister, who knows Dundee wellas do you, Mr. Deputy Speakerwill not be surprised to hear that Dundee is famed for many reasons. We used to be famous for jute, jam and journalism; comics such as The Dandy and the Beano, with Desperate Dan; and shipbuilding, the industry in which I served my apprenticeship. I remember walking through the door of the Caledon shipyard in 1958. We were trying to compete with the Japanesethe Koreans had not yet started to build ships. I went into the shed where the platers worked and saw a machine punching out holes for the rivets to go into the plates. The machine that we were using was built in 1921 and the Japanese were then building ships in sheds.
The Caledon shipyard launched many ships, some of which are still sailing the seas. Dundee built the Discovery, the ship that Captain Scott used to go to the Antarctic. Although it was locked in the ice for at least a year, the craftsmanship that went into building the ship ensured that it came back. That ship is now back in Dundee and is in the Discovery's visitor centre as the centrepiece of our maritime history.
One of the largest whaling fleets in Britain was based in Dundee. James Chalmers invented the adhesive postage stamp and James Bowman Lindsay the electric light. When Mary Shelley was staying on the Broughty Ferry road she came up with the concept of Frankenstein. That was nothing to do with Dundee, may I add; it just inspired her. Those hon. Members who had marmalade on their toast this morning should know that it was first made by Janet Keiller in Dundee. One of our local councillor's predecessors, the Belgian de Gernier family, brought fish and chips to Dundee. There is also the famous Dundee "peh"or pie for the Hansard reporterTimex and NCR.
All those industries will, to a greater or lesser degree, ensure Dundee's place in history. However, many are predicting that the city's relatively new biotechnology industry has the potential to eclipse the importance of all those examples of what Dundee has given to the world. Dundee is home to one of the most exciting research and biotechnology clusters and some of the most eminent research scientists to be found anywhere in the United Kingdom, if not the world. Dundee is home to Sir Philip Cohen; the Wellcome Trust building that I have mentioned; Sir David Lane, famous for p53, the cancer gene; Cyclacel; Professor Roland Wolfe; and Professor Sir Alfred Cuscheiri, a pioneer of non-invasive or keyhole surgery.
Dundee is tremendously fortunate to have some of the world's most highly regarded scientists. Their presence in the city has attracted many other research scientists from around the globe to work in the city. Such a concentration of expertise in life sciences has in turn led to a growth of leading companies and cutting edge spin-outs such as Axis-Shield plc, the largest biotech company in Scotland, and Cyclacel, the cancer therapeutics company which last year alone attracted £34 million in investment. I was delighted that the Prime Minister recently accepted an invitation to open the new Cyclacel premises and witness for himself the nature and
The city's two academic institutions have played a leading role in biotech development. Dundee university and the university of Abertay produce world-class research, develop extensive links with business, and demonstrate a willingness to exploit commercial opportunities. In Dundee university, Sir Philip Cohen, Sir David Lane and Peter Downes were named by the Institute for Scientific Information as three of the 15 most highly cited UK scientists between 1980 and 2000. That is the quality of person that we have managed to attract to Dundee. In the latest research assessment exercise, Dundee university achieved the highesta five-starrating for its entire school of life sciences, and the university of Abertay's environmental grouping, including the school of life sciences, achieved a four-star rating, its best ever.
The Wellcome Trust research centre in Dundee is home to a team of international scientists who are striving to understand the nature of diseases including cancer, heart disease, diabetes, allergies and tropical diseases. I mentioned a moment ago the role of the biotech industry in Scotland in halting and reversing the brain drain about which we are all so worried. In Dundee, the Wellcome Trust research centre houses more than 250 scientists and has attracted world-class research scientists from 48 nations, including the United States, Germany, Holland, Switzerland, Ireland, Italy and Japan, all working on what I grew up knowing as the Hackie. The only prominent thing on the Hackie when I was growing up was the Princess cinema and a street that, when the Queen was crowned 50 years ago, had a marvellous street party. Other than that, the Hackie was full of old industries such as jute mills. There is now a Wellcome Trust building, with 250 scientists from 48 countries on the Hackie. When I visit schools, I tell kids that their future lies on the Hackiethe Hawkhill. When I was growing up, if someone had said that our future lay on the Hackie, people would have thought that that person was mad. They would have brought along the van and wheeled him away. Yet on the Hawkhill we have 250 scientists from all over the world, living in Dundee.
The city has had to work hard to provide the right conditions for growth, expansion and the attraction of biotechnology ventures. Dundee is now home to 20 biotechnology companies and an emerging professional support sector. The most important of those conditions is partnership. As I said, the conscious decision made in 1980 to give up some political control and work in partnership is now reaping the reward. If Geoff Lonsdale were here today, I would be singing his praises even more. He understood where the future lay.
The city's two universities, Scottish Enterprise Tayside, Dundee city council and the Dundee business community have all played their part in the success that is Dundee's biotechnology industry, and we in Government must play our part. Support for the new emerging industry is vital for not only the Scottish economy but, probably more importantly, the world's health.
I am enormously proud that so many of the world's leading scientists call Dundee and Scotland home. The industry has shown remarkable growth, and with our supportI look forward to hearing the Minister's commentsthe potential is mind blowing.
David Hamilton (Midlothian): I congratulate my hon. Friend the Member for Dundee, West (Mr. Ross) on having initiated the debate and on his tour of Dundee. I am akin to some of his words, even on the other side of the Forth. The history that he developed through Dundee and the historic significance of former industries play a significant part in my constituency, too.
In the past 10 years, biotechnology in Midlothian has expanded beyond belief. I am slightly younger than my hon. Friend, and I remember the coal industry in Midlothian. When I started in the industry at 15 years of age, people went down the pit at 16 years of age. There were some 20 pits in Midlothian alone. There is now not one. The bad news is that in Fife, the last of the coal industry has now gone in Scotland as a whole. On every street near where I lived there was a miner or someone who worked for Ferranti, a big company at the time. People were guaranteed a job either as an apprentice or going through life as a painter and decorator, electrician or plumberall the jobs that people cannot find nowadays because everyone goes to university. Has anyone tried to find a plumber? It costs a fortune. There is a lesson in that.
From that proud tradition of 20 collieries in Midlothian, we have moved on at quite a pace. Midlothian has undergone a transformation from minor specialising in biotechnology researcha transformation that many other areas in the country would emulate. Dundee has been going longer than Midlothian in relation to biotechnology, but I am glad to say that we are beginning to move fast in that area.
In 1998, I and a group of people from research organisations went to north America to visit key centres of technology in Massachusetts, San Diego and Vancouver. During that week of hectic travel, we saw a mature biotechnology industry where both public and private sector groups are visibly working together to create a dynamic business environment.
People were positively encouraged to spin out of academic organisations to set up their own companies. We have still not mastered that. In the United Kingdom, academia takes a different view from the private sector, and they do not gel well, except in certain areas. That is getting better but, at present, we do not do what happens in north America, where the two sectors come together. That is a major area, in which we must make progress.
Support mechanisms were in place to ensure that the business planning processes were tailored to suit the individual needs of the company; that is another important area where we must begin to develop a strategy, if we want to move forward.
There was evidence of a mature financial sector, which understood the needs of the biotech sector; in particular, it was an environment where venture capital and angel finance seemed to be readily available. They are not always available in our country.
We saw an environment with a first-class range of incubation centres and science park developments that provide the technology sector with a range of physical facilities. That encouraged co-operation between academic groups and the business sector.
For me, the visit was a confirmation that what had already begun in Midlothian would have far-reaching positive effects for the entire region. For many years, the Bush estateone of the development areas in Midlothianhas been recognised as a centre for agricultural research and development. That is where everything started. The concept of developing the Bush area as Edinburgh Technopolea science city or precinct on the edge of the citywas first developed as long ago as 1990 by Edinburgh university, Scottish Enterprise Edinburgh and Lothian, and Midlothian council.
The additional development of the Pentlands science park proved to be a key milestone, which has been further enhanced by several other developments at the Bush, such as the Roslin institute; everyone has heard of the cloning of Dolly the sheep, and other developments have spun off from that.
However, there is a danger that we might begin to lose some of the expertise that we now have, if we do not begin to work hard together. Given the lack of finance, some of the scientists at Roslin are beginning to consider moving out. That is a big danger for Scotland; it is not a Midlothian issue, but a Scottish issue, and it must be addressed.
Other developments include Edinburgh university's Dick Vet small animal hospital, and a new campus at Gowkley Moss where Midlothian council and Scottish Enterprise Edinburgh and Lothian have purchased land to allow a range of organisations to expand and develop their research and development and their manufacturing on the same site, which is another major step forward.
It is estimated that £50 million of capital development has taken place in Midlothian over the past 10 years. As a result, Midlothian now faces a problem; we are running out of land that can be used for the continued expansion of the area.
One of the key stakeholders in the rapid development of the biotechnology sector has been the East of Scotland European Partnership, which has supported a range of projects with both capital and revenue grants. With a physical environment in place which can match that of anywhere in the world, the biotech sector in Midlothian is beginning to develop a range of support services similar to that which we saw in north America.
The financial sector in Scotland is also beginning to respond more positively to the needs of the biotech sector. However, there are still investment gapssuch as the lack of venture capitalists, as has been mentioned.
It is not easy for an individual to set up a new company or form a spin-out company from an academic organisation. Where that company is also involved with complex technology, the technical risk often brings added worry for the entrepreneur. Another sign of the maturity of the technology sector in Midlothian is that the public and private sectors are working together.
I learned from my trip to North America that Scotland is very small on the international map. I recall that our guide in Boston said, "We are just going next door to see the next place." Next door was 40 miles away. We drove there. That is how our guide thought of the concept of "next door". Therefore, when we discuss Scotland and Midlothian, we must talk about Glasgow, Dundee and Midlothian as one place. It should not be a matter of Glasgow as opposed to Edinburgh or Midlothian as opposed to Dundee. We must consider the market as Scotland as a whole and work on that basis. The European market is one which we can dominate, and we are dominating it currently. With the legislative changes that are taking place, we can capture a major part of the American market with new developments.
There are fewer than 100 companies in Midlothian that, including everyone's support network, employ 2,000 people. With a population of 90,000, they are substantial employers in anyone's figures. We aim to increase that employment to 3,000 to 4,000 in the next two to three years, and with that in mind, I suggest that Members who have an interest meet Scottish Enterprise, with which we can develop a strategy on how to develop Scotland as a whole.
Mr. Iain Luke (Dundee, East): I congratulate my hon. Friend the Member for Dundee, West (Mr. Ross) on securing this debate on an industry that promises so much benefit in alleviating suffering and promoting health. We have both been keen on having the debate, not only because of the industry's medical significance but because of its growing importance to the economy of Scotland and the United Kingdom. It promotes jobs and economic well-being. My hon. Friend the Minister has taken a great interest in the subject and has also been keen to have a debate to examine the strengths and weaknesses of the biomedical and technical industry in Scotland to see what we can do to promote and foster it.
I am also glad to see the shadow Secretary of State for Scotland, the hon. Member for Beckenham (Mrs. Lait). This is an important debate for her party, and we look forward to hearing her contribution.
As my hon. Friend the Member for Dundee, West commented, we are fortunate that our home town of Dundee is well placed to exploit the opportunities that have come its way as a result of successful research programmes in biomedical technology and the life sciences. I must point out that he has been around Dundee and Hawkhill much longer than I have, so he knows more about the differences in opportunities in Dundee's economic package, given the drastic changes in Dundee during the past 50 or so years.
The economic history of Dundee, and indeed Scotland, is characterised by innovation, excellence and the need to adapt to change, new demands, products and forms of production. That dynamic process has not always been easy, and sometimes it has been extremely difficult. Our city, and Scotland, has been blessed with an ability to adapt and flourish despite the difficulties that have beset us.
Both universities have developed biomedical research facilities and degree courses in biotechnology. That has been married with the creation of a first-class teaching hospital at Ninewells and, through the work of the universities and the Government, the promotion of high-quality medical research opportunities. As my hon. Friend said, those opportunities have attracted scientists and medical men with global reputations.
Dundee has become a world-class centre. It has put itself at the forefront of research and academic renown. Points have been made about the strength of the industry. Outwith Cambridge, Dundee has the highest percentage of life scientists and researchers per head of the country than any other part of the country. Reference was made to the top 15 renowned scientists in the UK, and three of them are working at Dundee university. The city and the university should be proud of that track record.
The city has been blessed by developments at both universities. As my hon. Friend said, the siting of the Wellcome Trust buildinga major research facility for the UK and the worldalso helped. It has played a significant role in bringing research work to the city, which has led to the discovery of new drugs and treatments that cure many life-threatening illnesses and diseases. The pioneering biomedical work at the university is closely linked to practice at NinewellsDundee's university teaching hospital. Sir Alfred Cuschieri's surgery has had a significant impact on the medical engineering and biomedical research worlds. These are all added dimensions to the industry that means so much to Scotland.
Abertay university has not been as heavily promoted in this area, but it has moved on and is working harder to become a leading player in computer technology and computer games, which is another industry that has a great impact on Scotland's economic base. It is showing much promise, and is working with countries such as Japan. The point has been made that the UK, Europe and the United States are great at inventing things, but Japan is probably the largest producer. This country invented CDs and cassettes, but they are produced overseas, especially in Japan.
The biomedical technology industry has given substance to the Scottish economy in which IT and the microchip industry have supplanted the old manufacturing base. The IT and microchip sector is global, but has had its problems with recent downturn. As the Scottish manufacturing base changes, those areas of excellence must be promoted to ensure that the economy continues to grow and prosper. The healing influences of the biomedical research industry will, I hope, provide a soothing ointment to ensure that in any future downturn and rush of attendant economic consequences, distresses are mended or even avoided.
It is important also to note the progress that has been made, as my hon. Friend the Member for Dundee, West made clear. Certain initiatives have helped, such as the research and development grants that the Budget proposed, and the review of the incubator granta fund specifically targeted to kick-start such facilities. My hon. Friend mentioned the progress that has been made in the Lothian area. The Dundee project provides a unique partnership, in which the local enterprise company, the local council, the university, chambers of commerce and the Wellcome Trust development play an important role in developing a strategy for the future economic growth of the city. That has to be looked at as a microcosm. Within that strategy, Dundee has seen, as in Lothian, the creation of a technopole, sometimes called a crucible, whereby the products of research development in the universities can be transferred to production, providing jobs and prosperity. Production can be diversified.
In February my right hon. Friends the Prime Minister and the Secretary of State for Scotland had an opportunity to see the fruits of this activity first hand when they visited and opened Cyclacel Ltd. in our crucible and technical park. The company is engaged in the production and development of novel cancer therapies in its new Dundee premises just off Hawkhill; it is also based in Cambridge. I hope that my hon. Friend the Minister as well as the spokesman for the Conservative party will have the chance to visit the endeavour and see at first hand what goes on there. They would see the products of men and women employed in the research operation in Dundee. Sir David Lane and his wife Bridget have been at the heart of this enterprise, which is now of global significance.
The potential was made clear by Shield Diagnostic, or Axis-Shield as it is now known. The company started as a collaboration between Dundee university and Tayside region, as it was then, a council responsible for industrial promotion. An enterprise share fund was created and it financed the first steps of the development on the road to Axis-Shield, which is now another global impact company. It employs more than 100 people in Dundee. Others are employed in Norway, where the
That follows in the steps of another pioneering Scot, Alexander Fleming, who discovered the wonder drug penicillin, which has saved so many lives. Medical research and the production of new medicines and drugs is a critical part of the sector, worth millions of pounds£100 million was mentioned earlierin the UK and globally. It is essential to recognise the importance of this activity, and we must understand how best to promote it. The Government recognised that in the Budget, which will help to foster the promotion of such enterprise.
It is an economic truism that economic activity never stays still and the market continues to move on. Over its long history, the Scottish economy has seen momentous changes, constantly having to reposition itself. My hon. Friend the Member for Dundee, West referred to Dundee as a jute city, but no jute is left, only a museum to the former industry. We have obviously moved on and left that history behind. We have some fond memories, but also harsh memories of the conditions in which people worked.
Mr. Luke : No, I never worked in the industry. I am younger than my hon. Friend, so I missed that opportunity, though my familycertainly my father and grandmotherwere employed in it at one time or another.
As I said, Dundee has had a history of change in which it has had to reposition itself to new and demanding types of production and products. My town provides a microcosm of the Scottish dimension. Globalism, the international development of the capitalist economic system, in which costs mean that labour-intensive forms of enterprise are always on the move, must be replaced by an alternative form of development. Only when enterprise, high-quality academic initiatives and proper investment are married together in conducive circumstances do mature economies such as the UK prosper and grow.
The 1998 DTI White Paper entitled "Our Competitive Future: Building the Knowledge Driven Economy", made the point that the UK no longer relies on its natural resources such as coal and steel. Our competitiveness depends on our making the most of our distinct and valuable assets that competitors find it difficult to imitate. In Britain's modern economy, these distinctive assets are increasingly knowledge, skills and creativity, rather than traditional factors such as land and other natural resources.
The validity of that comment is evident in the approach adopted in Dundee and throughout Scotland, and in the success in promoting the biomedical technology industry and its contribution to the Scottish economy. That industry must be fostered, and I am sure
Mr. David Heath (Somerton and Frome): I, too, congratulate the hon. Member for Dundee, West (Mr. Ross) on introducing this topic for debate, and the hon. Members for Midlothian (David Hamilton) and for Dundee, East (Mr. Luke) on their contributions.
I do not speak for my party on Scottish matters, nor do I represent a Scottish constituency. I do, however, speak for the Liberal Democrats on science, and to a large extent we are here to celebrate a great British success story in that regard: the development of biotechnology and the science base in Scotland, and the things that flow from that. It is a great shame that the debate has coincided with the sitting of the Scottish Grand Committee, because some hon. Members who would have wished to take part in this debate cannot do so.
The story of Dundee and the development of its industries is inspirational to the rest of the country. We should be clear about that. I cannot claim a huge acquaintance with Dundee. I can remember going there some years ago, when the conference of what was the Liberal party was held there. It would be fair to say that, at that time, Dundee's industries faced an uncertain future. The old idea of "jute, jam and journalism"which owed much to its alliterative qualityas something to remember Dundee by did not clearly suggest a future. At that time, the city faced the possibility that the highest aspiration that a young person in Dundee could have was to be editor of the Beano, and that was about it.
All credit should therefore go to the people of Dundee, the local authorities involved and the universities that the city has the good fortune to have in its proximity for realising that they could invest in and develop new markets and activities. They have done extremely well, and I certainly look forward to my next opportunity to return to Dundee to see the splendid east European town hall, which we all love so well, and the progress that has been made.
As the hon. Member for Midlothian has said, this is not only about Dundee, but about what is happening in Midlothian and Glasgow, and the developments associated with the universities there. However, it is pleasing that, for once, it was not Glasgow or Edinburgh that took the lead, but another city in Scotland.
We have seen the rapid growth of the biotechnology industry to the point where it is quickly becoming the most prominent part of a growing Scottish economy. We should take note of that. Business a.m. of 26 April refers to seven gazelle companies, those companies that are leaping ahead of the pack. It says that Inverness Medical would have been the runaway, had it been classified as a Scottish company rather than an American offshoot of Johnson & Johnson. That is another example of biomedical development in Scotland. Mr. Gordon Maclennan from Scottish Enterprise Glasgow is quoted as saying that he expects biotechnology firms to make their presence felt over the next few years by filling up the gaps in the area.
The Scotsman of 25 April provides an upbeat assessment of the biotechnology industries in Scotland. It says that they have not found their growth prospects seriously damaged by the events of last year and any economic uncertainty in the global climate, and are still progressing. That is valuable. I know that the Minister will wax lyrical on the subject when he replies. He waxed lyrical the other day in response to a question from his hon. Friend the Member for Norwich, North (Dr. Gibson). He was not ashamed to proclaim the success story of biotechnology in Scotland. I do not wish to detract from that or to criticise it, but I want to put it into a United Kingdom context.
The Scottish economy is not divorced from the rest of the UK economy. We are seeing similar developments elsewhere. That is good. Cambridge, which has always been the brand leader, is developing links between its science base and industry. Similar things are happening in my area. Bath and Bristol universities are coming together to form a partnership with industry to develop biotechnologies. The hon. Member for Dundee, West used many vernacular terms to baffle the Official Report. I will not do the same with west country terms, as that would not be appreciated. The developments in the west country are to be encouraged.
The university of Ulster is doing something very similar in the different economic conditions in Northern Ireland. There is much to be said for that. Indeed, the Secretary of State for Trade and Industry, when she was the Minister for Small Business and E-Commerce, said:
It is important to latch on to that fact. It should drive much of government thinking and industrial thinking about where we move forward. If we do not exploit the sectors where we have clear advantages, we will find it difficult to compete on a wider UK basis. It is by no means certain that we will retain our advantages in this sector. It will need constant support from the Government and the private sector. New companies will require constant incubation as they come along and we will need a research environment that aids our predominance.
I want to focus on what we need to do to maintain the progress that has been made. The first element is the research environment. Unless we are doing leading-edge research in our universities and in the private sector research facilities, we will not maintain our leading position. That undoubtedly means that guidance needs to be given to the Higher Education Funding Councils, for both England and Scotland, to understand that investment in research in science and technology in our universities is not only innately good because it expands our knowledge base but also economically good because of its potential for spin-offs.
That is why exercises such as the research assessment exerciseon which the Science and Technology Committee recently reportedare important. When exercises are carried out to assess the value and quality of research at universities, good performance is
Greater integration between the various research councils is needed. Medical biotechnology often cuts across various research council topicsmedical, physical or whateverand it is important to achieve cross-connections. Therefore I welcome the development over the past week of an umbrella body, Research Councils UK, which will enable that integration. I hope that we will concentrate our funding not only on scientific applications but also on blue-sky research.
It is often people pushing the envelope of scientific research that results in great advances leading to greater economic performance. We should not assume that every development must be on the basis of existing science. We must give scope for our scientists and technologists to think outside the envelope. We must ensure that the research environment is not constrained by avoidable legal problems. I do not mean that we should throw away the rule book or that there should not be an ethical dimension to legislation on biotechnologythat is important.
It is also important that this place keeps pace with the great pace of change in science, and that it is prepared to legislate when required to maintain that progress. We had excellent debates on stemcell research. Whether or not we came to the right conclusions, the arguments were sound. We must be flexible enough to recognise where problems develop as research moves forward and to react accordingly. We should take a precautionary, but not superstitious, approach to the development of science.
The Scottish experience in the business environment has lessons for the rest of the United Kingdom. The development of the Scottish Enterprise biotechnology group and support systems such as the biotech business mentors programme, the Enterprise fellowship programme and the Proof of Concept fund, are positive ways of supporting people in the industry and helping them believe that there is an active environment in which they can develop.
Mr. Luke : Will the hon. Gentleman also recognise the good air links between Dundee and the rest of the UK that I believe have made so much difference in bringing renowned scientists to Dundee and promoting biomedical technology?
Mr. Heath : The hon. Gentleman is right. Infrastructure is crucial, as is the rest of the business environment, and I welcome the research and development tax credits that the Chancellor announced in the Budget. As my hon. Friend the Member for Twickenham (Dr. Cable) said, according to the firms that are engaged in the business, the Chancellor has got it 95 per cent. right. If we could say that about everything that the Chancellor says and does, I would be a much happier man. Well done on that, and well done if the Government are prepared to support changes in patent law to ensure that it is consistent with scientific research. The one problemas with all manufacturing industriesis the exchange rate and the effect that it has on the competitiveness of British biotechnology firms, but I hope that that will eventually be addressed.
There are two more components that I want to talk about. One is direct investment. I do not want to say much about that, but I welcome increases in the science budget. They are insufficient and I do not believe that they will be widely disseminated, but let us welcome them.
It is desperately important that we give higher education every opportunity to engage with local industry, to develop the sort of links that we see in Scotland throughout the United Kingdom. We give higher education the opportunity to train the top scientists of the future. I note that Scotland makes up 9 per cent. of the United Kingdom population, but produces 17 per cent. of all UK biotechnology-related PhDs, and 17 per cent. of the UK's graduates in first degrees in medicine and industry. That is a marvellous record. I should like to see it extended to the rest of the country, and it is something to which those who are responsible for education within England and Wales should aspire.
Finally, we must not neglect the teaching of science within the schools that provide the people who will work in the industries. At present, we are deficient in that area. British childrenunder the Scottish, English and Welsh education systemsare not sufficiently attracted into the sciences. We need to address that problem urgently.
David Hamilton : With your experience in the sciences, do you accept my earlier point about academia and business? There is a division within Britain that I did not see in the USA. We are educating people, bringing them through the universities and collegeswe are doing that in Midlothian and it is now part of the curriculumbut people in academia are holding back and not wanting to expand on the information that they have. On the other side, the business community is trying desperately to fund packages, but the information technology that we want to achieve is not there.
Mr. Deputy Speaker (Mr. John McWilliam) : Order. The hon. Member for Midlothian (David Hamilton) used the expression "you". That refers to me. As it happens, I have experience of the sciences, but I am not taking part in the debate.
Mrs. Jacqui Lait (Beckenham): Thank you, Mr. Deputy Speaker. It has been a pleasure to listen to all the contributions. I congratulate the hon. Member for Dundee, West (Mr. Ross) on securing the debate. I lived in his constituency and worked in the jute industry in the late 1960s, a period which saw the demise of the industry. I worked for Jute Industries Ltd., which moved into North sea oilthe cutting edge of technology at the time. As everybody has said, Dundee and Scotland have always been at the cutting edge of invention. Life moves on and, with sadness, we have seen the end of the jute industry. Also, with sadness in a sense, we regard the oil industry as mature, not a state-of-the-art industry. Dundee is now sharing in the new industries that come from the research base, which has always been one of Scotland's strengths. For many hundreds of years, there were more universities in Scotland than in England, and we have seen the fruits of that endeavour.
I congratulate all who are involved in the Dundee Project for grasping what faced them in the 1980s and for making such a success of it. We must recognise that when big decisions are made, it takes a long time for the payback to come. We are now seeing the benefits of what people did 20 years earlier. Such a message is spreading more widely throughout the United Kingdom and the hon. Member for Somerton and Frome (Mr. Heath) was right to point that out.
The Government recently announced that there is to be a new high-tech universitybased on the regenerative ability of a new universityin my former constituency of Hastings and Rye. I hope that Mr. Lonsdale can be tracked down and congratulated on behalf of us all. The effect of his decision that Ninewells should work with Dundee university and Abertay has come not to a satisfactory conclusion because I expect those industries to move on, but has progressed satisfactorily.
It is interesting to see how the change from emphasis on manufacturing is now being accepted throughout Scotland and is moving to the knowledge-based economy and the effect that that has on developing a sophisticated economy. I congratulate everyone who takes part. I should be happy to take up the invitation of the hon. Member for Dundee, East (Mr. Luke) to visit some industries in Dundee. After the debate has finished, perhaps he would give me some contact names. It is one of my objectives to visit as many industries as possible. I have already visited several throughout the rest of Scotland.
As has been mentioned, we must make sure that we receive back-up. The hon. Member for Midlothian made cogent points about how business and academia in the United States have learned to co-operate in a way that we are having difficulty in developing in the United Kingdom. Having spoken to people who are active in the venture capital market in Scotland, I understand that while there is a willingness to invest in the new industries, some packages that are offered to inventors to encourage them to move into companies are not as sophisticated as in other places. Someone who is developing a company can be called on to put their house and their pension on the line, whereas other venture capitalists south of the border are developing much more sophisticated help packages so that there is not the same threat if something goes wrong. We need to take away some of the risks from our inventors who, let us face it, are not rounded business people. They need reassurance to encourage them to continue to invent new products and ideas. There continues to be a need for sophisticated packages of venture capital aid to encourage yet more people into the business world.
We are also conscious that although many universities are developing incubator companies and science parks, growing businesses and working closely with established businesses, there is wariness about whether that is the right way forward. Had I not been speaking in the debate, I would have attended the open day at the Hunter centre for entrepreneurship at Strathclyde university. The centre is encouraging people from the academic body who have ideas to make presentations to an audience of people who can help to develop those ideas. It is difficult for inventors to realise that to get a product to market, one needs the advice of experts in marketing, as well as accountants and lawyers, who can ensure that intellectual property as well as company formation is properly established.
The idea behind the open day is to get people to move forward towards the market. As it is my old university, I beg leave to bang its drum a little. I believe that the school of entrepreneurship is uniquein the world, not only the United Kingdomin managing to marry up undergraduate degrees with entrepreneurial classes. As people leave universitywith degrees rather than PhDsthey have an understanding of business and how to move products forward into the marketplace.
From small acorns grow the great oaks of academic powerhouses such as the MIT. That is what we should be aiming for. Dare I utter this heresy, but we should consider bypassing Cambridge and moving into a
We must also ensure critical mass. Indeed, as the hon. Members for Dundee, West, and for Dundee, East both said, Dundee has probably already achieved that. Employees come to Dundee to be in the company of people with the same intellectual interests and ability. People can be hired from that mass to ensure that companies, in which people can move around easily, can grow and develop. These people are in many instances home grown, and we must ensure that others can come in easily from abroad. I hope that the Government will make it as easy as possible for people to get the necessary permissions to come in to contribute to the Scottish economy. That is crucial to its future development and success.
There are also broader areas of concern. The hon. Member for Somerton and Frome referred to the regulatory environment. Having worked in the chemical industry, I am conscious of how quickly regulation that is developed to meet a particular situation throws into question previous regulation. We are not sufficiently adept at European Union level from where most regulation stems. We are in a global market, and it could be argued that a world body such as the World Trade Organisation should create the regulatory environment rather than Europe, but that is the subject of another debate. We must ensure that that environment can create modern regulation and that old and conflicting regulation is dropped and done away with. It is always a problem to make sure that that happens, because people are comfortable with old, established regulations. It is difficult to move on, and we Members of Parliament need to be well aware of that problem.
The use of animals in development is a controversial issue. We do not dare back away from it; we must address it. I was glad that the Government stood up for Huntingdon Life Sciences in the end. We must ensure that businesses that need to use animals do so in the most effective way, and that there are tight controls over the way that animals are used. However, we should recognise that there is need for such use from time to time. Science moves on, and many of the old tests have been replaced by more modern and less invasive techniques. In some cases, the use of animals has been done away with altogether. However, we must allow animals to be used when that is required.
We must broadly consider other potential impediments to development. What is likely to impede future development? I have talked about the critical mass of scientists and inventors. We also need to consider whether there are any external drawbacks, and whether factors such as the higher cost of regulation and business taxes will have a detrimental effect on those starting up businesses or investing in incubating businesses.
There is a new research and development tax credit, but we must ask whether it is outweighed by the other costs put on business. In Scotland, the business rate is 9 per cent. higher than in England. These issues matter at the marginand beyond, when things get too far out of hand. If the Government stop people from investing, matters should be reviewed.
I am delighted to have taken part in the debate, and I congratulate the hon. Member for Dundee, West on securing it. I am sorry that the Scottish Grand Committee is sitting now; I am sure that he would have liked to have heard more contributions from other hon. Members from Scotland. It is worth mentioning in passing that I do not see any members of the Scottish National party here. One would have hoped they would be prepared to contribute to a debate on the future prosperity of Scotland.
The Minister of State, Scotland Office (Mr. George Foulkes) : I also join in giving hearty congratulations and thanks to my hon. Friend the Member for Dundee, West (Mr. Ross) on initiating the debate. It is appropriate that we have had a lively and extremely well informed debate on a subject that is important to Scotland and the United Kingdom.
I welcome the generous remarks of the hon. Member for Somerton and Frome (Mr. Heath), who says that we are celebrating a success story for Scotland and the United Kingdom. Perhaps that answers the question put by the hon. Member for Beckenham (Mrs. Lait), who asked why Members of the Scottish National party are not present. Notwithstanding the meeting of the Scottish Grand Committee, I would have thought that the SNP could have managed for one of its five Members of Parliament to come along.
Biomedical research industries in Scotland are a success story, but the SNP does not like that; it does not fit into its political agenda of talking down Scotland and pretending that everything in Scotland is bad. The hon. Member for Somerton and Frome mentioned the Business a.m. gazelle awards, which I had the privilege of presenting. It is remarkable that in Scotland there are 280 "gazelles", or companies with phenomenal 100 per cent. growth.
I congratulate and commend my hon. Friends the Members for Dundee, West and for Dundee, East. I visited Dundee twice recently and on each occasion had a fantastic welcome. I was greatly impressed by how the city is responding to the challenges of the 21st century, in not only this respect but others, too.
I was also impressed by how my hon. Friends are representing their constituents so well and so assiduously, and are quietly and effectively supporting innovation and new job opportunities, not only in this sector but in many others. It is not always the person who shouts the loudest and gets the biggest headline and their picture in the newspaper who is the most effective Member in Parliament.
The topic is close to the heart of my hon. Friend the Member for Dundee, West. Tayside benefits particularly from the industry's presence, as I shall discuss in more detail in a moment. I shall not cite the impressive statistics that both my hon. Friends mentioned on jobs and investment in the area.
Dundee, in particular, and the technology park, share the success in Scotland in biomedical research in the commercial sector. My hon. Friend the Member for Dundee, West mentioned Cyclacel and Axis-Shield, but there are others, and both Dundee and Abertay universities have excellent records in the biomedical and biotechnology fields. I speak as a graduate of Edinburgh
The biomedical research centre is part of the medical faculty at Dundee, and was set up in 1992 at Ninewells hospital medical school laboratory block. It aims to provide a focus of excellence in biomedical research. The level of excellence attained was underlined by The Guardian's assessment of the top 100 UK universities in 2000, which placed Dundee second in the entire UK in the table for biosciences. That is a tremendous record.
Abertay, the newer but equally effective university, which I had the pleasure of visiting on Monday, was praised last month by the network director of Scottish Enterprise's biotechnology group. Almost 15 years ago, Abertay offered Scotland's first degree in biotechnology, from drug design to food and drink manufacture. It now boasts innovative and progressive courses.
The two universities are extremely effective, and I can confirm that they are working together. The expertise in biotechnical research at Dundee is world renowned and is fuelling the engine room of the industries in the Tayside region as a whole. Indeed, Dundee is now home to 25 per cent. of Scotland's biotechnology companies.
I am confident that, given continued support and encouragement of the right sort, growth will continue. Biotechnology offers huge opportunities. Following the publication of the map of the human genomeas some will know, John Sulston received the Robert Burns humanitarian award at Culzean Castle, at an event that my hon. Friend the Member for Ayr (Sandra Osborne) and I attended last Fridaythere are huge opportunities for wealth creation, high-quality jobs and improving the quality of life. The UK has the leading biotechnology industry in Europe. I shall discuss later the point made by my hon. Friend the Member for Midlothian (David Hamilton).
Scotland is making inroads and grasping the vast opportunity that biotechnology offers. Industry, academia, the enterprise networks and the Scottish Executive must all play their part, individually and collectively, if we want to ensure that we do not lose our position as a potential market leader and allow others to exploit that opportunity.
The commercial and social benefits of biosciences are enormous. Genomics can be harnessed to develop radical new treatments for previously intractable diseases such as Parkinson's, Alzheimer's and cancer, for which we have sought treatment for so many years. That is why it is vital. It also supports novel developments to improve the environment. Therefore, Scotland is well-established in this regard, as the hon. Member for Somerton and Frome generously said.
With just under 9 per cent. of the UK population, Scotland wins 12 per cent. of total UK funding for research, 13 per cent. of research councils' resources for research, 13 per cent. of the Government research departments' resources for research, and 12 per cent. of the EU research resources that are spent in the UK. Therefore, we are getting more than our fair share, and rightly so. The per capita income from research grants and contracts in Scotland is also higher than in other parts of the UK.
Scotland produces 1 per cent. of all the research publications in the world; in that regard, it ranks third in the world per head of population. Scotland has the highest concentration of biotechnology provision in Europe; 18 per cent. of all UK biotechnology-related PhDs are awarded in Scotland.
We are not complacent. We can and we should do more; we should build on this foundation. However, we should also recognise and acknowledge what has been achieved so far, as the hon. Member for Somerton and Frome said.
The infrastructure is in place to develop the potential. We have several science parksthe West of Scotland science park, the Pentlands science park, the Stirling university innovation park, the Dundee medipark, and the Aberdeen science and technology park, which I had the privilege of visiting.
In his eloquent contribution, my hon. Friend the Member for Midlothian mentioned the growing potential in Midlothian. He referred to plans to develop the manufacturing facility at the newly created national biomanufacturing centre at Gowkley Moss in Midlothianthese centres always have strange names. That is where PPL Therapeuticswhich harnessed the Dolly technology to create the life-enhancing drug AAT for the treatment of cystic fibrosiswill construct its £42 million manufacturing facility, so it is a very important development.
In these parks, we can find some of the sector's globally-recognised companies: Cyclacel, which has been mentioned, is developing important cancer therapies; PPL Therapeutics is developing proteins to fight diseases such as pancreatitis and cystic fibrosis; Pantherix is developing anti-infective therapies and antibiotics; Axa-Shield is producing a kit that predicts heart attacks, which is very important for those of us who are moving on in years; other companies are also producing various diagnostic kits, and others are developing medical devices and heart valves. All of those are important areas.
My hon. Friend the Member for Midlothian rightly averred that it is easier to raise finance for biotechnology in the USA than it is in the UK. Finance for biotechnology in the UK is a major issue, as we know. There is concern that the European drive in biotechnology will help other countries, such as Germany, to overtake the UK as the leading biotechnology industry centres in Europe. We are determined that that will not happenin particular, by building on Scotland's lead.
Currently, the UK leads Europe in biotechnology, and Scotland's science base is second to none. Entrepreneurship is booming. The venture capital industry has stimulated more start-upsin particular specialised biotechnology start-upsthan anywhere else. That is a good sign.
As the hon. Member for Somerton and Frome rightly mentioned, Scottish Enterprise has identified biotechnology as a key economic development driver, and it has implemented a £40 million biotechnology cluster action plan, which it launched in November 1999.
It is significant that the framework for action that Scottish Enterprise announced in 1999 has already been substantially achieved well ahead of schedule. In September 2001, employment in the sector was 24,406above the 24,000 target that was set in 1999. There were 86 biotechnology companies, and 291 support and supply companieswe had anticipated 290. Allowing for possible mergers, we are almost on target already, and are well ahead of the target date.
On international co-operation, there are interesting collaborations such as the Scotland-Maryland biotechnology alliance, which was launched at Bio 2000 and signed in Edinburgh in August 2001. Scottish Enterprise and the Maryland science alliance are working together to stimulate further growth in our biotechnology industries through a series of activities over the next two years. A 27-strong trade mission from Maryland, which included 10 biotechnology companies and three universities, visited in August. As a result of the initiative, four Scottish companies have already secured deals with their Maryland counterparts that are worth more than £1.5 million. I want to see more such collaboration between Scotland and the United States. As my hon. Friend the Member for Midlothian said, we can learn much from it.
We accept that there is a continuing need to boost industry's investment in research in Scotland. Scottish industry invests only 0.5 per cent. of its gross domestic product on research and development. That is half that of the UK, a third of the Organisation for Economic Co-operation and Development average and less than a fifth of Sweden's. The Government are determined to help. In the 2002 Budget, UK tax credits for small business research and development were extended to include large businesses, as the hon. Member for Somerton and Frome mentioned. That will encourage investment in the biotechnological and biomedical industries.
The Scottish Executive's science strategy for Scotland identified bioscience, genomics and medical research as priority areas. The aims are to build critical mass, improve performance, and strengthen local and international networks. The Government and the Scottish Executive will work in partnership: the Government will provide the funding and the Executive will provide their science strategy. The Government have also delivered the programme Bio-wise, which is led by the Department for Trade and Industry, to encourage industry uptake of biotechnology. They also introduced the £750 million joint infrastructure fund to update the science and research-base infrastructure, from which Scotland benefited by about £65 million.
My hon. Friend the Member for Midlothian also talked about bridging the gap between academia and industry, which is what Scottish Biomedical exists to do. It delivers milestone-driven research projects on behalf of pharmaceutical and biotechnology companies by matching the needs of business with the skills, expertise and technologies of research departments of the universities of Scotland. A prime example of that success was the £5.2 million deal with Kyorin Pharmaceutical Co. Ltd. of Japan, the result of which was the state-of-the-art Kyorin-Scotland research laboratory in the West of Scotland science park. The formula "research plus business plus infrastructure" equals success.
I accept the point made by my hon. Friend that more needs to be done if the UK is to continue to lead in Europe and to catch up with the United States. I will meet the BioIndustry Association in the next few weeks to discuss that. More needs to be done to keep Scotland ahead of the field. Commercialisation is just the start. We must nurture and go for growth. Growth needs different measures, such as the Executive's refocusing of regional selective assistance. We must focus on growing indigenous Scottish firms such as those in our biomedical and biotechnology sector. Access to finance is also key. Ernst & Young noted that Scottish Enterprise's framework for action identified that two of Europe's three largest venture capital investments were in Scottish biotechnology companies.
Biomedical research and industry in the wider biotechnology sector already have a key role in the Scottish economy. My hon. Friend says that the Government should play a key part. I assure him and the Chamber that the Government have played their part and will continue to do so. Through partnership and sensible devolution, the Scottish Executive and British Government are working together on a commitment to fuel a knowledge-based economy based on excellence in research and innovation, delivering high growth and high quality jobs for a highly skilled work force. That is the way forward for Scotland and the United Kingdom.