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"considerable support provided by BIS to STFC in recognition of adverse exchange rate movements this year and last, some £40 million in total."
That was a mixture of grant and loan. I understand that some of that loan was to be repaid from future years, or the next year. Will the Minister clarify that? If he cannot do so today, I ask him to make it explicit in a letter to me. I want to know exactly how much of what has been given to the STFC for each of the past two years and for the current year to support its budget has to be repaid from future budget allocations. Will that still be the case if no further grant is awarded and the exchange rate is fixed so that the Treasury takes the risk above a certain level?
If there is no future support, and there is a buffering of exchange rate variations, which might seem sensible, the key question is: at what level will the buffering take place? If it takes place at the current level of the pound-it is likely that the pound will increase and that the STFC could benefit, having more cash to spend from such an increase-and if that windfall goes to the Treasury, above a £3 million buffer, the STFC will not benefit. Indeed, it seems that it will not benefit from the grant and loan support that it currently receives.
I ask the Minister to reassure me that there will not be a double whammy. What has gone down might go up. The STFC has lost out from what has gone down. Will it miss out on the benefit from what goes up and lose its grant support? That will have serious implications for its future health.
I am grateful once again to my hon. Friend for giving way. Does he agree that the Minister needs to understand that such questions are important because increased and reduced budgets cannot be easily accommodated in the long-term planning of physics
and astronomy? In other words, an increase or a decrease in budget can be catastrophic to long-term initiatives of benefit to the country. We need clarity, even if it is slightly bad news, because the scientific community could at least plan to live within its means.
Dr. Harris: That is right. What was disappointing about the press release and the announcement is that, in many cases, it was not a long-term solution. I realise that funding for the support of large domestic facilities will be ring-fenced, and that arrangements will be made for other research councils to pay their fair share, and I welcome that. However, in respect of international subscriptions the press release says only that
"from the next spending review onwards...BIS is looking at options for managing the currency risks better."
"BIS is working closely with the Bank of England on how to reduce the exposure of the STFC."
It then states that a "new arrangement will provide". A new arrangement might provide, or would provide, but no new arrangement has been proposed as yet. I would be grateful for some clarity on that. I have seen proposals whereby the Treasury will take the risk and benefit of any changes that have an impact greater than £3 million on budget exchange rate changes, but the key point is where the baseline is drawn.
Criticisms have been made, not least in the report of the Select Committee on Science and Technology, about the management of the STFC. I shall not speak for or against the recommendations or the criticisms made in the science community. However, politicians should take responsibility for the overall budget position, and not seek to hide behind their failure to recognise that there is a problem-or behind those individuals running the research council. The Haldane principle makes clear that it is for research councils, through peer review, to allocate funding to specific projects. I realise that, but the Government must take responsibility for the overall allocations to research councils. They are made by the Government.
In the remaining time, I wish to deal with the question of scientific careers, particularly in physics. At the moment, it is difficult. People working in university physics laboratories that are funded by the STFC or the Engineering and Physical Sciences Research Council-the success rate for grant applications to the EPSRC is so low that it has taken the unusual step of placing a ban on repeat funding applications-are not happy with the situation. When PhD students or young post-doctoral students in such departments seek advice on whether it is a healthy area in which to work, they get the answer that one would expect from more senior researchers who are facing difficulties with ongoing funding and with cuts in the projects on which they are working, often in collaboration with other countries which are not withdrawing support. What advice do those researchers give to the undergraduates, doctoral students and post-doctoral students in their department? They will not tell them that it is great field in which to work and that the future is healthy. They will tell them the opposite, which will lead to problems in
retaining some of the brightest and the best that we need. We have that problem throughout our education system, which my hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) will talk about.
We still have a fundamental problem with the number of entries to A-level physics. Data from the Joint Council for Qualifications show that between 1985 to 2008, there has been a slow and inexorable reduction in numbers. Indeed there was a year-on-year reduction until 2006-07. There was a slight upturn in 2008, but the number was still the third lowest since 1985. Although there has been an improvement in mathematics and, to a certain extent, in chemistry, we have not seen the same in physics.
Without people taking physics A-levels, it is hard to see how we can encourage them to take physics degrees. Other data from the Higher Education Statistics Agency, which the Minister must be intimately acquainted with-I am sure that it is his bedtime reading given his worries about the state of higher education funding, and it may even help him get to sleep-show that the number of applicants to study physics as a first degree qualification has not risen since 1985; indeed, the number has been flatlining. Therefore, despite the best efforts of this Government to promote science, which have been far better than those of the previous Government, it cannot be said that they have been successful.
One of the reasons is that we are in a vicious circle. Students are not studying physics and graduating in sufficient numbers with physics, so there are not enough people who have the necessary specialist background to go back into teaching physics to inspire the next generation of young people to study physics at school. That circle must be broken. I do not see how that can be done while the Government continue to pile debt on students.
Students will not choose-if they can do the maths and these students can do the maths-to take relatively low-paid jobs in teaching or in research when they can go into other jobs in, for example, the finance sector where their numeracy is not only well regarded but much better rewarded. Public sector teaching posts and research posts will never be able to compete with some of the salaries that are on offer in the City, but the Government can make an effort by not imposing a further distortion of career choice by piling huge amounts of debt on graduates. Students know that that debt is there waiting for them when they pass the threshold and will hold them back in their ability to get a mortgage and settle down with a family. Moreover, they will see their peers, who are in other fields, get on the housing ladder much earlier. That is a real problem.
The first thing that I want to hear from the Minister is that he recognises that we have not made progress in the number of entrants to physics A-levels and physics degrees. I want to hear those words from him, because the first law of science is to define the problem. If we are not able to define or recognise the problem, it will be difficult to find the solutions that we need.
Another problem is that half the population-the female half of the population-are not staying in physics or in engineering. The burden of debt is a particular problem for them. There is obviously a stereotyping of careers going on and a question over whether careers advice is adequate in girls' schools or to girls in schools, given the relatively small numbers who study the subjects. The Royal Society report recently demonstrated a significant leaky pipeline, which is much greater for women scientists
than for male scientists, and much more work needs to be done by research funders to identify the problems, to do exit interviews, to do surveys and to find out why the people they fund are leaving science in such a way.
A short debate such as this is not enough to do justice to all the information that I have been sent, and I am very grateful to the people in the field for sending me the information and background, to the Institute of Physics and to the research councils themselves that have provided briefings.
In the next few weeks, as we go through to the general election, I hope that physics and science will have a very high profile. I will continue to make these points, seek to hold the Government to account and hope that we will see, in the general election, a clear difference between the parties on the specifics of funding. I hope that my own party will make it clear that it will find the resources from existing budgets to re-stabilise the STFC, and that we have clear proposals to give stability to physics funding.
We need to break the vicious cycle that exists for physics students, physics graduates and physics teachers. We have failed to break out of that cycle over the past 20 years and, disappointingly, during the tenure of this Government. I recognise that the Government have increased the science budget in real terms and that, overall, science spending has increased, but the fundamental facts, as set out in the Royal Society report, are that our share of spend on science as a proportion of our GDP is no higher now than it was when this Government came to power and no higher than it was during the Thatcher years. We have not solved the problem and we must not be complacent. I urge the Minister not to be complacent because we are far, far away from the target of 2.5 per cent. of GDP being spent on science, and the trickle-down effect of the failure to meet that target can be seen in physics and so many other subjects. I look forward to hearing his response to this debate.
Mr. Andrew Smith (Oxford, East) (Lab): I congratulate my fellow Oxford MP, the hon. Member for Oxford, West and Abingdon (Dr. Harris), on securing this important debate. Physics is vital to Oxford and Oxfordshire, to science in the UK and to our economy more generally. I, too, thank the Institute of Physics and others who have sent me very helpful material on the matter. It was an Institute of Physics report that suggested that nearly 6.5 per cent. of the UK economy is critically dependent on physics research. Beyond that, the physical sciences drive something like a third of the UK economic output.
High-tech manufacturing accounts for half the manufacturing jobs in the UK, and the UK is a major venue for science, with UK businesses attracting £4 billion in inward investment to fund research and development. Such increases in private investment in research and development followed rises in public investment in science. In that sense, the increases over the past decade, which I was pleased the hon. Gentleman acknowledged, have had a significant and dramatic impact on the UK economy. In that context, it is all the more tragic that we face some of these pressures and dilemmas.
Does the right hon. Gentleman agree that we have only to look at the long-term impact of the Apollo space programme in the United States to see
how what could be regarded as pure research or the pursuit of scientific goals directly impacts on the capability of the economic sector to make profit for the industry? Indeed, the United States is still benefiting from the investment that it made in the 1960s.
I share the concerns voiced by the hon. Member for Oxford, West and Abingdon about the pressures facing the Science and Technology Facilities Council in general and physics funding in particular. As I have said, those pressures are tragic, given that they come after an unprecedented investment in science in recent years. I certainly reinforce the questions that the hon. Gentleman asked about the future of the STFC grants and I urge the Government to look very carefully at that area of funding again.
There is an important question to be asked about who should carry currency risk; there is indeed a case for its being a responsibility of the Treasury. However, if that is the case, there must be an understanding and an agreement of the long-term real international currency-weighted value of the commitment that is being made to these international projects.
Adam Afriyie (Windsor) (Con): The right hon. Gentleman said that science was "starved" of funding. However, as the hon. Member for Oxford, West and Abingdon (Dr. Harris) has pointed out, the percentage share of GDP that was invested in science during the years that he mentioned is exactly the same as the percentage share of GDP that is invested today. So is the right hon. Gentleman arguing that the Government today are starving science of money?
Mr. Smith: No. Of course, there has been a considerable increase in GDP as well. The figures that I am citing today-for example, the science budget is nearly £4 billion a year now, having been virtually doubled-show that there has been a very substantial increase in investment, and science has benefited from that. I acknowledge the pressures on science funding and indeed I am calling on the Government to look again at the situation facing the STFC in general and physics funding in particular. However, it is only fair to acknowledge the progress that has been made and I hope that the hon. Gentleman will do so.
Furthermore, the hon. Member for Oxford, West and Abingdon referred to the importance of science in the context of the general election and the debates that we will be having in coming weeks. If the Conservative party wants to cut public expenditure more quickly than the Government are proposing to, the hon. Member for Windsor (Adam Afriyie) must say either that cuts in science funding will be greater than those proposed by the Government or that funding will be cut somewhere else to prevent the cuts to science funding that would otherwise happen. There must be an honest debate about cuts too.
I am really glad that the right hon. Gentleman has raised that issue, because it is entirely in the Government's hands to produce a comprehensive spending review. They have refused to do so and that is
what is creating all the uncertainty around the STFC and many of the other research councils. So it is a bit rich of the Government to accuse the Opposition of not coming clean on figures when they have all the figures to hand and all of the powers to make a decision to hold a CSR.
Mr. Smith: I did not actually accuse the hon. Gentleman of not coming clean. What I said was that, as the Conservatives had come clean and said that they wanted to cut public expenditure harder and quicker than the Government are proposing to, there are questions that they had to answer.
Dr. Harris: I thank the right hon. Gentleman for his contribution to the debate. We often face each across this Chamber because we have many interests in common. I hope that he will recognise two important points. First, the capital spending of his Government-the Labour Government-has been significant, in higher education in particular. That must be recognised and I recognise it.
Secondly, however, the recurrent funding in science spending as a whole is not a doubling. The doubling of the science budget has run simultaneously with the reduction in spending from departmental budgets. So, although there has been a 40 per cent. real terms increase in overall science spending-not a doubling of the spending-science is only getting its fair share of GDP growth. That is more than science received under the Conservatives, but it is no more than science's fair share and that is why we are still well behind other countries in the proportion of our wealth that we spend on science and research.
The hon. Gentleman mentioned capital. I want to talk briefly about the Science Research Infrastructure Fund, which was another success story in terms of the boost that it gave to facilities and to staff morale by attracting staff from overseas. It also impacted positively on student numbers and encouraged greater use of facilities by businesses, including smaller businesses. However, since the SRIF ended and funding became part of the full economic cost of research allocated by the research councils, there is now some concern that the money is not being spent within universities in support of the research infrastructure, doubtless because of other pressures that the universities face. I wonder if the Minister can say something about that subject.
I also wanted to talk about the research assessment exercise and how it is developing. That exercise also had a significant impact on the science and innovation base, by helping to improve the overall quality of UK research. Nevertheless, it is of concern that its successor-the research excellence framework-has "impact of research" criteria.
In mentioning those criteria, I return to the point that was made by the hon. Member for Montgomeryshire (Lembit Öpik), who has now left the Chamber, when he
talked about the long-term benefits of big projects and blue-skies research. That emphasis on "impact" is probably a consequence of a shift in the thinking of at least some of those steering UK science policy for publicly funded scientific research to demonstrate economic and societal impact.
However, there are real difficulties about the criteria and the methodology of the research excellence framework, and it is hoped that they will not be too restrictive for physics and other disciplines. We can all probably think of many cases of breakthroughs in physics-in relativity, quantum mechanics or whatever area-where it would have been very difficult at the outset of the research to have said what the consequences and the benefits of that research would be. How the difficulty of demonstrating the benefits of research fits within impact criteria based around the economy and society is another issue that it would be wise to look at further.
This debate matters not only because science is important in its own right, but because it means jobs, prosperity and welfare for the future, both for those who work in science and for those in the many jobs that are generated by science. In Oxfordshire, we have seen big successes, including the Harwell science and innovation campus, and major facilities, such as the Diamond Light Source and the ISIS neutron facility in Harwell, which are global centres of pioneering research. The Rutherford Appleton laboratories are developing new techniques to help in the development of fusion. The tier 1 computing centre at the laboratories is the UK focus for processing data from the large hadron collider at the European Organisation for Nuclear Research, or CERN.
Sharp Laboratories UK, which is based in Oxford science park, is another example of a company based in Oxfordshire. It employs more than 100 people and it conducts world-leading research and development, creating technologies such as advanced flat screen displays. Companies such as Sharp Laboratories UK are based in the UK because of the strength of the UK science base and because of the graduates trained in cutting edge science, which that science base provides. We have a good record in Oxford and at Oxford university in spinning out companies from physics research. Companies such as Oxford instruments are now well known world leaders and newer companies such as Oxonica and RF Sensors are bringing physics research to the market, generating local jobs in the process.
If we are to sustain that success-surely there ought to be general agreement that it is vital that we do so-we must more effectively resolve these questions of basic funding. We also need to look still further at the support that is given to businesses as they develop, grow and apply the benefits of scientific research, because the recession has put pressures on science businesses, as it has on other businesses, and perhaps especially on smaller science-based companies. As we know, to bring a piece of world-leading research to commercial applicability and ultimately to profit can take several years and can require several stages of investment.
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