Scottish Affairs Committee - Minutes of EvidenceHC 140-II

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Oral Evidence

Taken before the Scottish Affairs Committee

on Tuesday 4 February 2014

Members present:

Mr Ian Davidson (Chair)

Mike Crockart

Jim McGovern

Sir James Paice

Mr Alan Reid

Lindsay Roy


Examination of Witnesses

Witnesses: Rt Hon David Willetts MP, Minister for Universities and Science, Department for Business, Innovation and Skills, and Rt Hon David Mundell MP, Under-Secretary of State for Scotland, gave evidence.

Q4373Chair: Can I welcome you both to this meeting of the Scottish Affairs Committee? As you are aware, we are conducting an inquiry into the various impacts of separation, and today we are looking at the question of science and research. I think it would be helpful if the two Ministers introduced themselves for the record, and then we will go on with questions.

Mr Willetts: I am David Willetts, Minister for Universities and Science.

David Mundell: I am David Mundell, Scotland Office Minister.

Q4374Chair: Under the Scotland Act 1998, research was reserved and universities devolved to the Scottish Government. How is the relationship and overlap between the two currently managed in practice?

Mr Willetts: I think we have been able to make it work. The research remains a UKwide responsibility. I described my post a moment ago, and my science responsibilities are UK-wide. Scotland has an excellent research capability, as a result of which it does very well from the UK-wide allocation of funding simply on the basis of excellence. When it comes to teaching and teaching arrangements, my responsibilities are only for England. There is a different way of delivering higher education teaching in Scotland, so we have a very clear sense of where there is a shared UK responsibility and where there is a devolved issue.

Chair: We have to vote now. With that answer to ponder, we will go off and vote and come back in a little while.

Sitting suspended for Divisions in the House.

On resuming-

Q4375Chair: Following that up, could you clarify for us what powers the Scottish Government have that now affect the research sector in Scotland, and what further powers they would get in the event of separation?

Mr Willetts: Research is a UK-wide responsibility, and we allocate funding according to the principle of excellence. As we set out in our "Scotland analysis: on science and research," which came out last autumn, because there is excellent science and research in Scotland, although it has about 8% of UK GDP, it gets about 13% of research council funding. That is a good example of how the UK is better as a whole than apart. Scotland has excellent research, and we are funding it out of the UK tax base on a higher level than I think would be possible for Scotland on its own.

Q4376Chair: How do you deal with the issue of Scotland getting more than its fair share? If Scotland got less than what could be described as its fair share, there would be very strong arguments that Scotland was being deprived and done down and the share should be moved up to share of the population. Are these sorts of issues taken into account at all? How do you respond to that sort of argument?

Mr Willetts: The individual allocations of funding are determined by the science and research community as a whole, and people based in Scottish institutions are an important part of that. The criterion is excellence. The reason why British science is so good is that it is simply allocated on the basis of excellence. You are absolutely right. Scotland does very well out of it, not simply in the sense of a net financial transfer, though we think there is such a transfer; it gains from being part of a single integrated system where you can have specialist institutions dotted across the whole of the UK financed out of the UK tax base. As a medium-size economy with 60 million people, we have a very high number of world-class centres, because we can specialise. The Roslin Institute is where we do a lot of our animal genetics; Edinburgh is where we have a lot of our computing and IT skills for the UK as a whole. If the UK broke up, it would be very hard to maintain those arrangements.

Q4377Mike Crockart: Can I turn to the subject of the common research area? The White Paper published last year makes it quite clear that the Scottish Government would wish to remain part of a UK common research area, ensuring no barriers to collaborative research, access to facilities and peer review for researchers throughout the UK, which is exactly the argument you have been making for why it is such a good system at the moment. What would be the advantages and disadvantages of such a common research area to a separate Scotland and the rest of the UK?

Mr Willetts: I would make two points. It is very odd that people say the great case for independence is, "Don’t worry. Things will carry on exactly as if nothing had happened." The fact is that, if Scotland separated, there would be big changes. Across Europe there is a common research area, so we have cross-border cooperation on science projects in France, Germany or whatever, but it is not the same as the integrated UK research system. We have bilateral arrangements with other countries, and because they have different accounting arrangements and ways of doing things, by and large the way the system works is that, if, say, we have cooperation with the French, we pay for the costs of a shared project within the UK and the French pay for the costs within France, and we have an Anglo-French cooperation agreement on top of that. It is not a basis for large-scale budget transfers. We are not actually paying for research in French universities; we are getting French researchers and British university researchers working together. The common research area is nothing like the level of integration you have in the UK, where there is genuinely a single integrated research and science system.

Q4378Mike Crockart: With an independent Scotland, if the negotiations were to arrange a common research area, what would be the differences between the situation as it is now and the situation post-independence?

Mr Willetts: I am sure that over time the systems would diverge. There would be different policies on pay rates or pension arrangements, and, as they diverged, any cooperation-I hope there would be cooperation-would be like Anglo-French cooperation. It would be two different systems that agreed to do a project jointly, with each paying their own costs. At the moment, you have a genuinely integrated system where there are UKwide specialisms located in Scotland. I do not sit in BIS calculating how much of the money is being spent in Newcastle and how much in Glasgow; it is a completely integrated system from which all parts of the UK benefit, but especially Scotland, because-let me quote the figures-we reckon it gets about 13% of all the research council grants that are issued.

Q4379Mike Crockart: There is a feeling in some of the evidence we have taken already that perhaps research councils are not as tuned to specific Scottish problems as they might be. Do you think that a separate Scotland would be able to exert more policy influence in this shared research council structure, given that it would then be paying in a proportion, whether by head of population or whatever? Would the direct paying in give it a greater policy influence?

Mr Willetts: I think it would go the other way, again for two reasons. First, the Scottish Government are already able to spend extra money on top of what they get out of UK science, if they wish. If there were, for example, a special medical condition that particularly affected people living in Scotland, I am confident that it would be researched on a UK-wide basis, but if the Scottish Government wanted to spend extra on top to research it, nothing stops them doing that at the moment.

In addition, along with my earlier point about specialisation, the international pressure-the international role-that comes from the UK being in the world premier league for science helps Scotland. There is a Carnegie Group of G8 plus 5 for Science Ministers. We met just outside Washington last year. When I am there talking to the American science adviser and the French or the Italian Science Minister, I am speaking on behalf of the UK; I am making the case for science across the UK. It is very hard to imagine how Scotland on its own would have a place at that table. I have literally just come from a lunch with members of the Saudi Government. One of the things we have been talking about is research cooperation between the UK and Saudi Arabia. They have interests in areas such as agri-science; we were discussing whether we could do more cooperation on agriscience. There I am speaking for the UK. I remember talking to them specifically about the expertise of the Roslin Institute and the work it was doing on breeding chickens. I was there on behalf of the UK talking to them about UK scientific excellence. That is the kind of extra influence Scotland gets as part of the UK.

Q4380Mike Crockart: Could I turn to the other streams of funding? Up to now we have been concentrating on the funding council research grants and the research councils research grants, which are 30% and 26% respectively. That comes to only 56%. A huge proportion of research funding comes from charities, businesses and other sources. What impact do you think separation would have on levels of funding coming from those sources?

Mr Willetts: That is a very fair question. To some extent, the charities would want to speak for themselves. These are charities that raise funds within the UK. Obviously, the bulk of it comes from outside Scotland. I think you would find that organisations like Cancer Research UK, or whatever, and the medical research charities would tend to focus on the remaining UK. Again, there would be an issue about how we could do as well apart as we can together. Together we have a system that is world-class. To be honest, without being complacent, it is hard to see how you could have a science output much better, given the input, than the UK achieves. The UK as a whole is the world’s most productive science nation in terms of taking the input and the amount of high-quality science you get. This really is something that works for everyone, and it is an environment in which Scottish science has flourished. It is hard to see how any other model, certainly a more fragmented one, could do as well.

Q4381Mike Crockart: Do you have any statistics on the proportion of charity funding of research that goes outwith the UK at the moment?

Mr Willetts: I do not have that to hand, but perhaps I can send the Committee a note if we have anything. Of course, we are not directly responsible for charities, but if we have any figures I will send them.

Q4382Mike Crockart: It is indicative, and the point you are making is that it would be likely to stay within the UK.

Mr Willetts: I have now found a figure. Let me read this out to you. It is rather similar to public funding. Approximately 13% of funding raised by members of the Association of Medical Research Charities in 2011 was spent on research in Scotland. That is the one figure I have. If we have other figures, I will send them to the Committee.

Q4383Mike Crockart: It is still significantly higher than a per head population share.

Mr Willetts: Yes.

Q4384Mike Crockart: If such funding were more difficult to come by for Scottish universities, are there other sources that they could turn to-for example, further European funding? We are always hearing that we need to be more like the Nordic states. Are there other sorts of collaboration that Scotland and Scottish universities could do?

Mr Willetts: There are some very small-scale collaborations. There is a very small amount of Czech-Slovak cooperation, but I think we are talking about less than £10 million; there is some Nordic collaboration, but not on a large scale-perhaps a bit above £10 million. But those two small-scale projects are nothing like the scale of the single integrated UK science base that we have at the moment. The evidence is that, by and large, if separation occurs, as one would expect, there are natural processes that pull systems apart. As they diverge more and more, so you lose the integrated shared single scientific endeavour.

Q4385Mike Crockart: To give it some scale, if those sorts of schemes are £10 million, we are talking about total research income for Scottish institutions of £861 million in 2011-12, so that would be just over 1%.

Mr Willetts: Yes. As an example, in 2012-13, Scotland got research council current spending grants of £257 million, which is 13% of the total of research council grants. I am very happy about that; it is because Scottish science is excellent, but that is the scale of the funding that would be at risk if this world-class integrated system was fragmented.

Q4386Jim McGovern: The stats suggest that the amount spent on R and D in the UK has gradually fallen behind other European countries. Do you believe that this puts the UK’s research sector at risk of falling behind its competitors?

Mr Willetts: We have a very productive R and D system. While some countries devote a higher percentage of GDP to R and D, there is general recognition that we get a lot out for what we put in. We score very highly for rates of innovation, and we score particularly highly for attracting internationally mobile R and D. We have one of the most global R and D systems; about 20% of all the R and D in the UK comes from internationally mobile businesses. Part of my job-I am very happy to do it-is attracting internationally mobile companies from around the world and saying, "If you really want to do high-quality R and D, think of doing it in the UK." That could be anywhere in the UK. I am happy to attract them to Scotland, but it is part of the effort that the UK Government make.

Q4387Jim McGovern: We are already behind other countries-for example, Germany and the United States-and also below the average for the EU. These other countries and organisations seem to increase their spending, while ours has always been behind and has remained pretty much static as a percentage of GDP. I know it is not a race.

Mr Willetts: We have been able, even in tough times when we are trying to reduce the budget deficit, to protect the science budget with ring-fenced expenditure of £4.6 billion, and we have been able to add to the Technology Strategy Board’s spending. We have created a new network of Catapult centres, which are modelled roughly on German Fraunhofer institutes. Some of them are located in Scotland, such as the offshore renewables Catapult centre, so when there are increases in expenditure Scotland benefits from them.

Q4388Jim McGovern: So falling behind other countries and even being below the EU average, and other countries increasing while we stay the same, is nothing to be concerned about.

Mr Willetts: There are always arguments to be made for more spending. It is just possible that behind closed doors I might even make some of those arguments, but the fact is that for the Government as a whole, given the fiscal challenge we faced, protecting the science budget in cash terms and increasing the budget for the Technology Strategy Board shows a pretty serious commitment to R and D in tough times.

Q4389Jim McGovern: Can I clarify one point? When you say it is ring-fenced, does that mean it does not go up but just stays the same in cash terms, which means a reduction in real terms?

Mr Willetts: For the lifetime of this Parliament, we have fixed it at £4.6 billion a year, year after year from 2010-11 through to 2015-16. You are right that you have to recognise there is inflation. On the other hand, the advantage of the ring fence is what I say to the science community: "Every pound you can save by improving efficiency is a pound you can spend on science. You know there is £4.6 billion, so if, for example"-this is relevant to our inquiry today-"you get better at sharing equipment so that two different universities, or a network of universities, share one expensive bit of kit, and you save some money that way, the £4.6 billion is intact and you get to spend more money on new science."

Q4390Mr Reid: Thank you for coming along this afternoon. Professor Stephen Salter, emeritus professor of engineering design at Edinburgh university, suggests there is insufficient knowledge of Scotland within the UK research councils. What is your response to that?

Mr Willetts: I am surprised by that. We genuinely work on a UKwide basis, and the fact that Scotland does so well out of this UK funding is evidence that we are very well aware of Scottish research excellence. When I think of some of the specific decisions we have taken recently, the great moment for us in the UK as a whole was when Professor Peter Higgs, who had been based at Edinburgh for some time, got his Nobel prize. We announced that we would be funding out of a UK resource a Higgs institute in Edinburgh to honour him and carry forward his work. We are very well aware of the strength of the Scottish research base.

Q4391Mr Reid: What do you see as the advantages and disadvantages of an independent Scotland setting up its own research council?

Mr Willetts: It would obviously be for Scotland to decide how to do it. The dilemma it would face is that across the UK we have a broad science base. We have humanities; social sciences; strength in life sciences; and strength in nuclear and physical sciences. If you are a small country, you have to specialise. I think it would have to take some very tough decisions about what it would specialise in and how to access worldwide scientific research. One of the advantages of having a broad base is not simply that you do it all in your own country; it means that you have sufficient expertise so that you can also understand what is happening around the world. You have some domestic expert who can appreciate the significance of something they have just done at Stanford.

Q4392Mr Reid: The "Scotland analysis" paper says that collaboration between the rest of the UK and a separate Scotland would be "associated with levels of risk not present" in the current collaborative arrangements. Could you set out what those risks are?

Mr Willetts: As I said, you would lose participation in an integrated UK system. This is not because somehow we want to see Scotland go; it is absolutely the opposite. I think Scotland does fantastically well out of and is a fantastic part of the UK-wide science base, but if you have a separate Government you end up having a separate system. When you have a separate system and go your own way, collaboration gets harder. You lose that arrangement from which you clearly do very well financially. You also lose the international stuff. Science is now so international that one of the advantages of the UK being taken very seriously as a science power is that we have a seat at the table. At virtually every major science conference, science policy discussion and science grouping, the UK Science Minister is one of the people in the top group expected to be invited and to be able to join in. We are in a very small group. We are up there; after the US, we are probably next in many areas. Then there is Germany, and China is coming along. You would lose that ability to be part of the global debate shaping research priorities through groups like the G8 Science Ministers’ summit, which we hosted last year. You can put Alzheimer’s, antibiotic resistance or climate change on the agenda; you help to shape it. Despite everyone’s best efforts, Scotland would inevitably have less ability to shape that global agenda.

Q4393Mr Reid: In situations like this, the Scottish Government always argue that in international forums Scotland would do better by having a seat at the table. Why do you think Scotland is best represented by a UK seat at the table rather than by a separate Scottish seat?

Mr Willetts: Because at the kind of events I am describing there are eight, 10 or 12 seats round the table; there aren’t 25 or 30 seats round the table. For example, the smaller European states might be represented via the European Commission, so if Scotland entered the EU, it might have the Commissioner representing it, but I would say that being represented by a Brussels Commissioner is rather less effective than being represented by a UK Minister who is absolutely aware directly of our responsibilities to Scotland.

Chair: I am not sure I am aware of any advantages to Scotland of being represented by an EU Commissioner, but that is perhaps an issue for a different day.

Q4394Mr Reid: What barriers do you think would be erected in the event of separation, as far as collaboration and research are concerned?

Mr Willetts: I am sure that nobody would want deliberately to set up barriers. It is just a matter of growing apart. There would be different pension arrangements. What would happen to your career prospects if you moved between work in different institutions? Would your pension rights be affected? Given that it looks as though it would be very hard for Scotland to keep the pound, would there be a currency risk in collaborative arrangements? Would there be the same health and safety rules for the labs? Would there be the same attitude to the use of animals in experiments? On all these things, a Scottish Government, day by day and week by week, would be taking rather different decisions from the rest of the UK, so the two systems would be diverging. That is why you would end up with something much more like the international collaboration between us and France, rather than the integrated system of the UK.

Q4395Sir James Paice: There is one very obvious example where there is already a difference in policy, which is of course GM. Scotland has vowed to be GM-free. That would be a challenge in that sector.

Can I push you a little more on the issue of international involvement? Accepting entirely what you say about the number of seats available, what gets the UK to the top table? Is it a function of spend on research or reputational criteria on research, or is it simply that the scale of the British economy puts us there? In other words, is there an inbuilt factor that will prevent a small country like Scotland from being there if they were to do everything else right?

Mr Willetts: It is a combination. It is partly just being a medium-size country and being big enough to count. It is partly the quality, but also the volume, of our scientific work. We produce in the UK-it is an extraordinary achievement-16% of the world’s most highly cited scientific research. If you are doing a conference on almost any subject, you tend to want some British representation on science policy, which is obviously what I tend to see. Equally, if you are doing a discussion on synthetic biology or cosmology, you will want the Brits there. You know the other countries. It is a small group. There is obviously the US. There is Germany and France. There is China. Then there are emerging big science powers, like India and Brazil, but round those tables you tend not to see the smaller European states, even if individually they are doing some excellent science.

Q4396Sir James Paice: To give some examples, Holland or Denmark, or indeed Switzerland, which is outside the EU, do not appear at these levels, even though their individual reputations as centres of excellence are good.

Mr Willetts: If they have a particular specialism, yes, of course they would. If you were arranging a scientific conference on an area where there was real expertise in Switzerland or wherever, I am sure the scientific community would want Switzerland to be represented. My point is that when it comes to the big decisions on, say, global science policy or global science infrastructure-the big projects that no one country can do and we want to do globally-those are the kinds of discussions you have at G8 Science Ministers’ meetings. It is at G8, or G8 plus 5, where these types of discussions happen, where you say, "Antibiotic resistance is a big thing, and we need to do something about it." It tends to be the nations that have a big enough science spend and a big enough science presence to make a difference by the decisions they take.

Q4397Sir James Paice: Would that have knock-on consequences for the ability of the countries excluded from that forum to have scientific excellence? Do they lose by not being represented at it, or, for that matter, do we gain by being represented? How can you balance that?

Mr Willetts: I understand what you are saying. You have the ability to shape the agenda. You can be a niche player, but the concentration of high-class science facilities in Scotland is partly because it is part of a wider system. It does have a very unusual concentration for its size, and that is because it benefits not just from the funding that comes from the rest of the UK but from being part of a very effective integrated system, and you would lose that.

Q4398Sir James Paice: Without wishing to put words into your mouth, your view is that Scotland on its own could not really have access to international forums and would suffer in terms of its overall ability to deliver global science.

Mr Willetts: I would almost put it the other way round. Scotland does incredibly well at the moment. It is not just that British science is a success; Scottish science is a success. We all take great pride in that, and I am very aware of it. The best you can say is that we would hope to carry on the current arrangements. That brings out the scale of the risk if you break them up. In reality, despite everyone’s best efforts, it would not be possible to maintain the old arrangements-I will not repeat myself-because they would just grow apart. Scotland can specialise in some things where it has world-class centres-renewable energy or agricultural science, as you very well know-but at the same time it is not cutting itself off; it is completely integrated with other centres. The diamond light source, the synchrotron at Harwell and the high-performance computing in Daresbury are in many ways Scottish facilities as well. Scottish scientists get to use them automatically, in a way a French scientist does not. A Scottish scientist, as part of the UK-funded science community, has right of access to all the world-class science facilities around the UK, in a way that a French or German does not. You would lose the ability to participate straightforwardly, with no barriers and no questions asked, in these world-class science facilities, and that would make life tougher.

Q4399Chair: Surely, separatists would say, "We are so good, as shown by the fact that we get more than our population share of awards at the moment, that the world would beat a path to our door. It is not quite that the world could not survive without us, but we do such excellent work, and we are so bright, and we are about to win the world cup"-possibly, we will not do that-"and have achieved so much, that people will want us at these top tables." It is almost, "The world will not be able to survive without us." How do you respond to that argument, which is usually put forward with an air of complete conviction?

Mr Willetts: I fully understand that is what a Scottish Government would want to do, but it is very hard; doing that outside a world-class, large-scale integrated science system is much tougher. At the moment, Scotland gets the ability to be distinctive while having all the benefits of membership of the single UK science club, and access to all those other science facilities and complete mobility of people, with nobody fussing about whether the research is being done in Edinburgh, Oxford, Strathclyde or wherever. That goes.

Q4400Chair: In that case, does it necessarily go? It would be argued, "We are so good that they would want to keep Scotland as part of an integrated UK whole in order that we can continue to sustain the rest of you. Therefore, people would make strenuous efforts to collaborate and cooperate," to quote the Edinburgh agreement, "and it is in the interests of England, Wales and Northern Ireland to keep things as much as possible exactly as they are at the moment."

Mr Willetts: Of course, people want to cooperate, but just look at the evidence. What happened after the break-up of Czechoslovakia, for example? You see that they diverge because the underlying forces are pulling them apart. Every week a decision would be taken by a Scottish Government, not even necessarily a science decision, that pulled the system apart. Earlier, I gave some practical examples. As soon as you have a different regime for cage sizes, animal protections in a lab, a different pension regime for a researcher, a slightly different rule on what you publish, or a different test of the industrial implications of your research and research priorities, all that type of stuff pulls them apart, so it ceases to be fully integrated. You have international cooperation, but that is not the same as a single integrated system.

Q4401Jim McGovern: On the subject of attracting academics to the UK as things stand, and possibly with a separate Scotland and RUK, what are the key factors that would influence where leading researchers based themselves, and how successful is the UK currently in attracting leading academics?

Mr Willetts: We are very successful in attracting internationally mobile academics-academics move to the UK and make their careers outside the UK. They move around. The quality of the UK science base is one of the things that attracts them to the UK. Part of what I try to negotiate on behalf of the UK as a whole when I am on international missions is breaking down those barriers-for example, negotiating mutual recognition of qualifications and structures of cooperation on science and research projects. We have excellent arrangements historically with India. With our new emerging powers fund, we are putting in funding to research cooperation between us and the emerging science powers-China, Mexico, Brazil and South Africa. When I travel the world with others of the delegation, I take with me Scottish professors, vice-chancellors of Scottish universities and leaders of Scottish research institutes because I help make the case for investment in them.

Q4402Jim McGovern: That is in the UK.

Mr Willetts: Yes, because they are part of a UK delegation. When I go to Canada and the US next week, when it is the US Association for the Advancement of Science annual conference, there will be a senior representative from the University of Edinburgh in my delegation. We will be talking to the Canadian Science Minister and presenting at Chicago. She will be part of the delegation and will be making a pitch for the University of Edinburgh, and good for her.

Q4403Jim McGovern: Is it fair to say that senior students and leading academics would prefer to move to larger educational communities than to smaller ones?

Mr Willetts: I am sure that in the event of a separation the Scottish Government would do their best, but on the ability to present and influence, I suspect-I do not know-that invitations to speak at the American Association for the Advancement of Science do not come easy. You do not have rows of Science Ministers turning up from all around the world; they tend to look to what they see as the major science players to attend and participate. That is how you get a global position from sharing in a UK-wide reputation and research base.

Q4404Chair: But surely a person from Edinburgh university is there on merit, and Scottish scientists, it would be argued, are so good that it is for your own good to have them as part of your delegation. Therefore, even in the event of separation, you would want to have the strongest collaboration you possibly could, which would involve continuing to have people from the University of Edinburgh on delegations.

Mr Willetts: I have great respect for French and German academics, but by and large I do not take them on delegations that I am bringing to pitch for UK science. It would be a different arrangement. It is not that we would feel in any way anti-Scottish; it would just be a different proposition. Let me give another practical example. I have given some examples of how in reality the systems would diverge. Here is another example from the life sciences. Part of what you do when abroad is to pitch to life science companies, which are very international, to do their R and D in the UK. The chief executive of the Association of Medical Research Charities made a point about multi-site trials-life sciences research where you do clinical trials at multiple sites. Multi-site trials are set up across tens of hospitals across the UK, and at present they do not have to worry about different regimes. If Scotland was to be independent and that consistency was lost, the multi-site trial becomes much more difficult. If I am saying to an international life sciences company, "Come and do your clinical trials here," I am no longer saying, "Come and do your clinical trials in a UK life sciences environment." For all I know, perfectly legitimately, a Scottish Government would have decided on a different set of rules-a different rule on patient confidentiality or a different model-which means that it is hard to make an integrated offer.

Q4405Chair: Are you ruling out the possibility of the existing UK research councils continuing to have Scottish involvement in membership after separation?

Mr Willetts: I find it hard to see how we could maintain the-well, we would carry on-

Q4406Chair: I understand that. You are verging on Sir Humphrey here. I want to be clear. Are you ruling it out-yes or no-because that is basically what you are building up to? I think people in Scotland deserve that degree of clarity.

Mr Willetts: Right. Research councils fund UK-based activities. Rest of the UK research councils, in the event of a split, would finance research activities in the rest of the UK. That is how it would work. We do not, by and large, finance research activities in France or Germany. We would of course collaborate on an international basis wherever possible, but it is hard to see how the rest of the UK taxpayers and research councils would just say, "This is research we will pay for to be done somewhere else." That is not how international collaboration works, and it is international collaboration we would be talking about.

Q4407Chair: I understand the point about having caveats-"hard to see why," and so on-but I want to be absolutely clear. As the relevant Minister, are you saying that, in the event of separation, the existing arrangements of UK research councils would be changed to reflect the new constitutional structure, and that the UK research councils would no longer include representatives from Scotland and Scottish universities? There might be collaboration and cooperation with them, sharing of things and all the rest of it, but they would not be part of that structure.

Mr Willetts: The rest of the UK would carry on with its research councils and Scotland would not be part of that structure.

Chair: Fine. That is very helpful.

Q4408Mike Crockart: We have touched on the excellent world-class infrastructure that we have in the UK as a whole, and a certain proportion of that is based in Scotland. To maintain those facilities is not a cheap option. When we look at the vast array that we have in Scotland, such as the Roslin Institute-you mentioned the transgenic chicken facility, which I know a little bit about, because Aviagen, the company that benefits from that, is based in the constituency. These are world-class but also massively expensive institutions. Is any research being done to estimate what the cost would be of maintaining the Scottish part of the research infrastructure that exists in the UK at present?

Mr Willetts: We have not done those types of calculations, because we hope and expect that the UK carries on and that what you describe will not happen. Certainly, those types of calculations could and should be done by someone, and I think they would find a large bill for Scotland, and again a strategic decision as to which of these you maintain.

Q4409Mike Crockart: Effectively, Scotland would have to pick winners and the areas it wanted to specialise in.

Mr Willetts: It would. Given that it would immediately face a significant loss of revenue, because it does so well at the moment out of the UK-wide science budget, it would face a double hit. It would lose that extra transfer from which it benefits at the moment and would face the challenge of what it was going to specialise in with its smaller budget.

Q4410Mike Crockart: You talk about a significant loss of income. Would there necessarily have to be that significant loss of income? These are world-class infrastructure research facilities that the rest of the UK would have had free access to, and it would want to continue that access. Surely, there would be a legitimate call for that access to continue to the benefit of both countries.

Mr Willetts: Yes. I want to make it clear again that I am not seeking a division; I am not saying that it is something anyone would deliberately aim for. I would regard it as an inevitable consequence, if there were to be a separation, that a Scottish Government would become responsible for the Roslin Institute and would decide their rules on what they wanted the Roslin Institute to do: the regulations for the condition of the chickens in the institute; the pension arrangements for the people working there; and the currency in which it operated, which might well not be sterling. In reality, the integrated system would have gone; it would be located over a border. All the evidence, from science as from everywhere else, is that there is a border effect. A border is a barrier. You would be putting up a new barrier. Borders are not trivial things. You would soon find people saying, "Why are we paying for these things to be done in the way they want them to be done in Scotland? We’ve got a different way of doing things south of the border; we’ve got a different set of regulations. Doing things our way is what we’re going to fund."

Q4411Mike Crockart: Do you accept that separation would not damage just Scotland’s research capability but would damage the rest of the UK’s continuing research capability, because it would find it more difficult to get access to these institutions? Take, for example, the Scottish Centre for Regenerative Medicine, which is an excellent new facility in Edinburgh. If the burgeoning life sciences sector were to lose easy access to that, surely that would damage RUK’s research capability.

Mr Willetts: Yes; it would be a lose-lose situation. At the moment, we are in a win-win situation. It is not something I would relish from the point of view of the rest of the UK. We all gain from this arrangement; we all gain from being part of a big integrated system where funding is allocated by merit, not geography. That is what we have at the moment; that is why we are world-class in science, and both the remaining UK and Scotland would lose from that separation when it comes to science.

Q4412Mike Crockart: My final question is about access to Europe-wide institutions, the perfect example being CERN. Is it your understanding that the continuing UK’s membership and access to that would continue, but it would be something that would have to be negotiated for a separate Scottish state?

Mr Willetts: Yes. Our legal advice on this has always been clear that the remaining UK takes on the legal responsibilities. There is a network of international science institutions, and we pay our subscriptions to them. There would be a decision for a future Scotland about which ones it wanted to negotiate to enter, and on what terms.

Q4413Chair: Can I clarify the point you mentioned about the lose-lose position? The response from those in favour of separation would be that the way to avoid lose-lose is to keep things exactly as they are, and then you have win-win; otherwise, you are cutting off your nose to spite your face. Therefore, that runs contrary to the point you made earlier about breaking up the research councils. How do you respond to that?

Mr Willetts: I am not actively seeking this disengagement, but when I look at it, it is clear to me that, as soon as you have two different countries and two different systems, the integrated science base fractures. It is not because anybody wants it to happen. I am sure that best efforts would be made to avoid it happening, but it seems to be inevitable, for all the reasons why we spend our research budget in our country-because taxpayers say, "Why should we pay for them when they’ve got better pensions, or a different set of rules on animals? Why should we pay for somebody at that facility to earn a higher pay rate than we have here? Why should we cover their currency risk when they are not part of our currency?" There is a limit to it. That was what happened in Czechoslovakia. By and large, they diverge much more rapidly than people expect, not as a result of a massive decision to split but as a result of the aggregating effect week by week of lots of little decisions pulling them apart.

Q4414Jim McGovern: The proposed structure of a post-separation Scottish Government does not include a Minister with a specific portfolio for higher education and research. This is in the White Paper, incidentally, which is fairly clear on that. What benefit does having a Minister like yourself with these responsibilities bring to the sector? This allows you to blow your own trumpet.

Mr Willetts: Exactly. I can make the case for my own job. These are the kinds of things that Prime Ministers change, and have the right to change, but a feature of the UK system is that a lot of our research happens in universities, which is not the case to the same extent elsewhere. In Germany, universities tend to be less research intensive and they have a bigger network of nonuniversity labs. They have Max Planck institutes and Fraunhofer institutes. Britain-both Scotland and England-has tended to have research-intensive universities, so the university agenda and the science and research agenda overlap a lot, and I find that being able to bring that together in a single coherent view works well for that reason. The French have a very similar system. They have a Minister for universities and research. Obviously, it would be up to a Scottish Government to decide, but it is all part of the integration, efficiency and performance of our science base.

Q4415Jim McGovern: The disadvantage of not having a Minister with those specific responsibilities would be almost a direct negative. If there was not such a Minister, there would be a gap there.

Mr Willetts: If you think of the science ring fence that you asked about before, that £4.6 billion reaches scientists by two main routes: one is through the research councils, and the other is through the higher education funding councils-we have different ones in England and Scotland. If you do not have integrated universities and science, those might be budgets coming in from two different Departments, and alignment would be very complicated.

Q4416Sir James Paice: Can we turn to something completely different: students in higher education? I appreciate from your earlier comments that it is not really your responsibility. We are going to come to tuition fees, which is a serious point. Before we do that, could we look at visas? The SNP Government-the Scottish Government-has opposed curbs on student migration, and its White Paper commits it to restoring the post-study work visa, which we abolished two years ago. Now Universities Scotland is calling for relaxation of the visa and of eligibility restrictions for international students. Do you think there has been any impact of those restrictions? Do you think that within a common travel area, which Scotland says it would want to be part of with the rest of the UK, it is feasible to have different visa requirements?

Mr Willetts: In answer to your second point, you are quite right. It would be very odd to have a common travel area so that a Scottish visa decision essentially entitled people to live or work in the rest of the UK as well. That does not seem to add up.

On your earlier point, this is a concern raised with me by universities across the UK. It is not a distinctive Scottish issue; it is raised by English universities as well. We did tighten up the regime to tackle abuse, and there was abuse under the old arrangements: for example, people coming to study who did not have the level of academic qualification properly to benefit from going to university. Maybe they did not have good enough English, for example. We have tightened the criteria for people to come to study, but there is no cap on the number of legitimate students. One of the points I try to communicate when I am abroad is that it is not fair to an overseas student if, for example, they find themselves in a class with fellow students who do not speak English well enough to keep up, or endlessly having to pause to explain something. Requiring a higher standard of English before you participate in a university education in the UK is part of our being a quality offering, but we do not limit the total numbers. The good news-thank heavens-is that numbers of applications from students outside the EU for UK universities continue to rise.

David Mundell: There are some specifics. The number of students studying in Scotland from China, the US, Malaysia, Canada, Norway, Saudi Arabia, Hong Kong and Thailand all rose in 2012-13, which people might not necessarily have gauged from recent remarks by Mr Mike Russell.

Sir James Paice: Thank you. Noted.

Q4417Chair: It might be helpful if you gave details of that in writing, because, as you say, that is not the impression that is being created. I was slightly surprised, Mr Willetts, when you seemed to be saying that there were no limits on the numbers of students coming into the UK with the requisite qualifications. Is that correct?

Mr Willetts: That is correct. There is no cap on the number of legitimate students. We have set rather higher standards for their basic English, for example; we are much more actively checking up on the academic qualifications they say they have, to be sure they really have them and that they are not making misleading claims about prior academic attainment, but after that there is not a cap on the number.

Q4418Jim McGovern: Is there some sort of plan to deal with what are known as bogus universities, never mind bogus students or bogus qualifications? Somebody just gets an address and says it is the university of such and such.

Mr Willetts: Yes. I did myself see what I think was called the Oxbridge College of Business Management above a fish and chip shop in a town somewhere in the north-west of England. I suspect that anybody who had applied to it from India might have been in for a sad disappointment when they arrived. We have had a crackdown on bogus colleges. It is part of maintaining the reputation of the UK higher education brand. We do not want anybody to be caught out by a bogus college. It is hard to know what is worse: being complicit in turning up there when actually you are trying to get a job in a taxi firm and claim you are coming as a student, which is completely wrong; or being an innocent victim and turning up thinking you are going to do business studies at Oxford or Cambridge and finding you are not. Either way, it is bad and it is something we have cracked down on by much tougher rules implemented by BIS and the UK Border Agency. If it is a legitimate student at a legitimate university or education institution, there is no cap on the numbers.

Q4419Chair: In those circumstances, it is very difficult to see what Universities Scotland would be complaining about, or am I missing a point here? Are they arguing that the standard of English and the standard of qualifications necessary to come here are being set too high? What is the nature of the difficulty?

Mr Willetts: There are endless comparisons. I am very aware of this. It is a competitive market. Our main competition is the US, Australia and to some extent Canada. There is a whole host of factors in the assessment of the competitiveness of your regime. There is debate about issues like healthcare costs. It so happens that, if you go to the US, you have to pay a large amount of money for health care; Australians already impose a charge for Australian health care. We are always aware that we are in a competitive market, and we have to make sure that the UK offer is not falling behind. The universities are sometimes anxious that the offer could be falling behind, but in the international education strategy that we released last summer, which is a cross-Government agreed document, we are aiming to encourage more overseas students to Britain, with the aim, as an absolute minimum, of maintaining our market share in a growing market. We hope we can do better than that. That strategy was signed up to by all the Departments across Government before we released it.

Q4420Lindsay Roy: The Scottish Government, in the event of separation, propose to continue charging English students and rest of UK students fees. If they are a member of the EU, would it be possible for them to do that?

Mr Willetts: I do not see how that is consistent with EU law. It states that students from other member states must be treated the same as local students in relation to tuition fees. It is absolutely clear. To quote a spokesman for the European Commissioner for Education: "Unequal treatment based on nationality…is regarded as discrimination which is prohibited by Article 18 of the Treaty on the Functioning of the EU."

Q4421Lindsay Roy: How would this attempt at discrimination be perceived by the rest of the UK Government?

Mr Willetts: If Scotland joined the EU and tried to say that French students could come to Scotland without paying fees but English students coming to Scotland would pay fees, despite the fact that legally for their purposes we would be identical-we are both other EU member states-I simply cannot see how that would be legal.

Going beyond that, what we have been discussing for the first hour are claims by the advocates of independence that they could maintain an integrated research system. I am saying that, sadly, I think they would grow apart, and I gave some examples of how they would grow apart. If one of the first acts of the Scottish Government, at the same time as trying to say that we have an integrated research base, is to say, "By the way, you professors, there’s going to be a discriminatory fee that is only paid by students from England and is not paid by students from France or Germany, despite the fact that they are all member states," it does not bode well for maintaining a fully integrated academic base, because these are the same institutions; we are talking about the University of Strathclyde, the University of Edinburgh and the University of Glasgow. If one of your first acts would be not just illegal but incredibly unfriendly towards a fellow member state of the EU, it is not a good basis for maintaining integrated research activity, is it?

Q4422Lindsay Roy: And it is not compatible with the First Minister’s assertion that the rest of the UK would be our best friends.

Mr Willetts: No. You would be picking out one specific fellow member state and saying that, contrary to all EU law, you are going to have a measure that discriminates against that member state in a way that is differentiated from France or Germany. It seems contrary to EU law and contrary to the kind of spirit that, as you say, people claim they want to see.

Q4423Chair: But surely you would understand that. In the spirit of the Edinburgh agreement, surely you would understand, forgive and just accept that it was meant with the best of possible intentions.

Mr Willetts: We believe in the principle of students from different EU member states being treated equally. It would be very hard to understand how, within the framework of EU law, you could discriminate against students coming from one EU member state.

David Mundell: It is not just a matter for people in the continuing United Kingdom; it would be a matter for the other 27 member states of the EU.

Q4424Chair: Why would it be a matter for them if they are not the ones being discriminated against? Presumably, they would not mind.

David Mundell: I think they would. The former European Commissioner for Education, Jan Figel, has said this would be illegal and a breach of the treaty, and the other member states are interested in treaty breaches within the EU. It is not for the rest of the UK just to nod through a breach. This is one of what seems to be an increasingly long list of exemptions or opt-outs which the Scottish Government claim can be negotiated for Scotland.

Q4425Lindsay Roy: So there is no objective justification for this.

David Mundell: The only justification for it is concerns raised by parents and students in Scotland that the current finance regime for higher education in Scotland would not be sustainable if those domiciled in England attending Scottish universities had free tuition fees.

Q4426Lindsay Roy: Can you tell us how much is contributed by the rest of the UK students to the Scottish Government purse for university education?

Mr Willetts: We have the estimates here. We reckon that there are about 20,000 students from the rest of the UK studying in Scotland per year, bringing about £150 million into Scottish higher education, so you would lose £150 million of revenues before you started.

Q4427Lindsay Roy: There would be a black hole.

Mr Willetts: Correct. It would be a black hole. Currently, you would lose about £150 million.

Q4428Chair: But you would only lose £150 million if you stopped treating English, Welsh and Northern Ireland students differently. If you keep the existing system, you do not lose that money at all.

Mr Willetts: Correct. At the moment, those fees are paid. That ability to charge is permitted within EU law, because within the EU a single member state can run different rules for one part of the single member state as against the other. But EU law is clear: once they are different member states, you cannot do that, so Scotland would lose the ability to charge fees to students from the rest of the UK and that would cost it £150 million.

David Mundell: There has been a significant increase in the number of students from the Republic of Ireland within Scotland since the Scottish Government have had the policy of no tuition fees. It is anticipated that there would be an increasing number of students applying from England, Wales and Northern Ireland should that policy apply.

Q4429Chair: You might say that this policy is illegal, but it is in the Scottish Government’s White Paper, so presumably they have had legal advice on it. Can I clarify whether or not there has there been any communication between the UK Government and the Scottish Government as to the legality of this proposal?

David Mundell: My understanding is that there has not. The legal basis from which the Scottish Government have quoted is selective quoting from an opinion, which I think was obtained by Universities Scotland. As in the case of a number of legal opinions, it could be interpreted in a number of ways.

Q4430Lindsay Roy: I am assuming, rightly I think, that you have read at least some of the 670 pages of the White Paper. Scottish universities have asked for clarity in the event of a separate Scotland. Does the White Paper provide that clarity?

Mr Willetts: I do not believe it does, because on several of these crucial issues, such as fees, it does not seem to engage with the reality of EU law; and it does not engage either with the other point I was trying to make a moment ago. We are talking about real life institutions. To pick at random the University of Manchester and the University of Edinburgh, on one side, we are being told, "We want to regard them as integrated, shared partners in a continuing single research exercise, working together. No gaps. No differences," but we are also being told that, for example, a student being subsidised at the University of Manchester who went to study at Edinburgh for a year or two years, would have fees imposed on him or her that would not be imposed on them if they came from the Sorbonne or from Bologna. It does not make sense. You cannot put up a new barrier aimed specifically at keeping out students from Manchester, at the same time as saying that your aim is to be a single integrated research area with Manchester.

Q4431Lindsay Roy: What other clarification would you have expected in the White Paper?

Mr Willetts: As well as all the other benefits, clearly this is an area where Scotland has a direct financial benefit. It has a direct financial benefit from the fees totalling about £150 million collected from students from the rest of the UK. It has a direct financial benefit from the research funding going into Scotland. That is all accepted. A serious document would have engaged with how they would tackle the black hole in the finances of a Scottish Government if those sources of revenue were lost.

Lindsay Roy: Okay. Finally-

Q4432Chair: Sorry, before you move on to your finally, can I continue to pursue that?

You were arguing, Minister, that it is difficult to imagine, if you had Scottish universities or a Scottish Government discriminating directly against English students, that you would still have collaboration between universities and research, but surely that is exactly what we have at the moment. You have a system of collaboration on research across universities throughout the UK, yet essentially you have an anti-English discriminatory policy on fees. If it works fine at the moment, why should it not work fine after separation?

Mr Willetts: Because at the moment we operate within a legal UK framework and we accept that English students in Scotland would pay those fees. That is not the situation in the event of Scottish independence. At that point, their legal position changes dramatically; they cannot do that any more.

Q4433Chair: The Committee finds itself in a bit of a difficulty here. We have representatives of the UK Government saying it would be illegal to charge anti-English fees, but we have representatives of the Scottish Government saying, no, it would be legal.

Lindsay Roy: It might be.

Chair: How would this be resolved? Can I clarify whether or not the UK Government is seeking to obtain evidence of the Scottish Government’s legal advice, or is it putting the two sets of lawyers in a room to try to clarify it? It seems to me absolutely essential that people in Scotland are given some guidance by the time of the referendum about what the truth is.

Mr Willetts: There have been unequivocal statements from the European Commission.

David Mundell: There are very clear statements-Mr Willetts gave one of them-which the European Commission has confirmed. Unequal treatment based on nationality is regarded as discrimination and is prohibited. It is very difficult to see a way in which a statement of that intensity could be challenged, but, Mr Davidson, you are aware that the Scottish Government repeatedly proceed on the basis of assertion to the contrary of other statements. As far as I am aware, they have not provided any evidence to back up their assertions on this matter, and ultimately it is for them to do that.

Q4434Chair: But, to be fair, neither have you. The Committee finds that representatives of the UK Government are asserting various things based on statements from the European Commission and other things, and the Scottish Government are equally asserting something completely different. Understandably, people in Scotland are not quite sure which of these allegators, as it were, are to be believed in these circumstances. You can understand the dilemma. Since this is such a clear example of disagreement, I want to try to seek a way forward as to how to get it resolved. Is it possible for the UK Government to produce a legal opinion to this Committee, or one that they pass to the Scottish Government to seek a legal opinion from them? It seems obvious that there is a whole string of issues on which the Scottish Government are proceeding on the basis of assertion. This seems to me to be one of the weakest and clearest, but it is essential that we nail it down. How can we get clarity for the voters?

David Mundell: I’m afraid I do not agree with the premise of your argument. I believe that it is for those who are proposing separation and the break-up of the United Kingdom to validate their claims. Our position is that we wish to retain the United Kingdom, and retain Scotland within the United Kingdom. We are not making contingency arrangements for Scotland leaving the United Kingdom. On this matter, we have very clear statements which have been made on behalf of the EU, or by people who have previously held the office of European Commissioner for Education, as external evidence in that regard.

Q4435Chair: But those are opinions.

David Mundell: It is for the people who are proposing that there be this significant change, and that they can opt out of what is clearly stated European law, to demonstrate that that is the case.

Q4436Lindsay Roy: Mr Mundell, are you aware that Universities Scotland claim they have sought legal advice, and they say it is possible that they could charge fees for students from the rest of the UK, based on some kind of objective justification? When we asked them about it, they could not give us an example from any country where this had been confirmed, but my understanding is that they have sought legal advice.

David Mundell: I have a copy of the advice they sought, and it contains the statement: "Whether it would be possible to advance an argument that was focused on the potential cultural impact in the severe reduction in opportunity for Scots-domiciled learners if RUK students were entitled to ‘free’ HE in Scotland could only be established after careful analysis and research of the sort that would meet the scrutiny of the European Court and which Belgium failed to present in Bressol"-the case. That is about the strength of the argument on which this is based. I am sure that, if the Committee does not have it, this legal opinion could be made available to you. I am by profession a lawyer and have not practised for a very long time, but it does not seem to me to be a definitive statement that Scotland would be able to opt out of established European Union law.

Q4437Lindsay Roy: Indeed, if I take you aright, it is a very weak argument in your opinion.

David Mundell: On the basis of this legal opinion, I would not be anticipating that Scotland would be able to opt out of this very clear provision in EU treaties.

Q4438Chair: However, it has been suggested that, in the event of separation, there would be an interim period during which Scotland was out of the European Union. There would be independence and then a period during which negotiations were conducted. During that period outside the European Union, I am presuming that it would be entirely legal for Scotland to discriminate against English students in the way that has been suggested. Is that correct?

David Mundell: I think it is clear from evidence presented to the Committee, or certainly produced elsewhere, that the period between Scotland being a member as part of the United Kingdom and being a member as a separate country is unprecedented. Therefore, there is extreme uncertainty over what the arrangements would be in that period. Clearly, the length of that period is going to be affected by the number of opt-outs that Scotland is going to seek, and the length of negotiations it will take to become a full member of the EU.

Q4439Chair: Presumably, Scotland could seek an opt-out on the question of being able to discriminate against English, Welsh and Northern Ireland students, if the negotiating skills of Scotland’s representatives are such that it is possible to reach an agreement on this matter.

David Mundell: As I understand it, on the basis of the White Paper, Scotland is seeking a whole range of opt-outs and variances in arrangements between Scotland and the rest of the EU.

Q4440Jim McGovern: David, if in the period following the referendum Scotland separated from the UK and used that as a loophole to discriminate against students from other countries, it would not exactly help its application to get back into the EU, would it?

David Mundell: As Mr Willetts has said, the behaviour of Scotland in the post-referendum period is very likely to influence how other parties, whether it is the continuing United Kingdom or other countries in the EU, respond to Scotland’s requests and claims to be a partner and a good neighbour. In particular, Mr Russell’s claim that there was xenophobia in the rest of the UK did not seem to me to be a particularly good-neighbourly comment; it did not seem to be a comment that would induce partnership, but it was particularly outrageous since his first proposed act as an independent Scotland Education Minister would be to discriminate against people from England, Wales and Northern Ireland.

Q4441Lindsay Roy: Conversely, if the rest of the UK were to withdraw from the European Union, what impact would it have on higher education both in this country and in a separate Scotland?

Mr Willetts: From the rest of the UK?

Lindsay Roy: If the rest of the UK withdrew from the EU.

Mr Willetts: I think we are getting down into the realms of wildest speculation here. We are robust members of the EU.

Chair: So that’s a "Don’t know." That is two levels of not taking advice, is it?

Lindsay Roy: We’ll let your colleagues know.

Jim McGovern: It’s called "whatiffery."

Q4442Lindsay Roy: Mr Mundell, from your knowledge of the Scottish education system, to what extent do you think academia is being favourably funded compared with higher education and vocational education, given the reduced numbers in further education and vocational skills?

David Mundell: As a constituency MP in Scotland, personally I am appalled at the way in which the Scottish Government have treated further education in Scotland.

Lindsay Roy: So am I.

David Mundell: It is quite clear that, in order to fund what they regard as a flagship policy of free higher education, they have discriminated against the further education sector in a disgraceful way, which has had an adverse effect on thousands of young people throughout Scotland, and certainly has had a detrimental effect on both Dumfries and Galloway College and Scottish Borders College in my own constituency.

Q4443Lindsay Roy: Can you comment further on the impact on manufacturing, business and commerce?

David Mundell: Only from my own perspective, because obviously further education remains a devolved matter. I think it is extremely short-sighted, and is a complete contradiction to the approach that has been pursued in England where there has been, as I understand it, much greater recognition of the role that further education has to play, but we are not tied to the Scottish Government’s funding requirements in relation to higher education.

Lindsay Roy: That is very helpful.

Q4444Chair: Can I ask about one final point, which is whether or not collaboration between universities on defence-related matters, where there are issues of sovereign capability, raises any different matters in terms of cooperation and collaboration across boundaries, and whether or not there are any implications in all of that for separation?

Mr Willetts: That is a very interesting angle. You would imagine that highly sensitive defence-related R and D would be even harder to do outside your national boundaries than the rest of science. I think it is a very relevant question.

Q4445Chair: I am thinking in particular of Selex Galileo in Edinburgh, which has defence collaboration with a number of universities, some in what would be the remaining UK and others in Scotland, where the intellectual property is, as I understand it, owned by the Ministry of Defence. Are there precedents from existing practice in terms of intellectual property owned by the MOD being shared with what would then be a foreign state to allow international collaboration?

Mr Willetts: There is international collaboration, notably with the US, other members of NATO and France, but it is just the most vivid example of my earlier argument. We tend to know the IP we have generated in our country from our spending. We may share it with someone else; there may be some trading back and forth in return for some IP they have generated, but we are very aware of where the IP has come from and who the ultimate owner is, and you tend to do that sensitive research in your own country.

Q4446Chair: I think those are all the questions we have. Normally, at the end of all these events we ask our witnesses whether or not they have any answers prepared to questions we have not asked, or whether there is anything in particular they want to get off their chests. Is there anything that you feel we have not touched on that would help illuminate this area?

Mr Willetts: I think we have covered the key points.

David Mundell: As ever, it has been a pleasure to appear before the Committee, and I look forward to an imminent return.

Chair: I look forward to seeing you again, Mr Mundell. Can I just remind you at this point that you still owe me the £2 that you borrowed from me on the train down from Scotland?

Prepared 21st March 2014