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9.22 p.m.

Lord Lucas: My Lords, this is a challenging debate to reply to. I cannot remember when I have been asked so many questions in such a short time. I shall certainly take advantage of the offer of the noble Lord, Lord Carter, to allow me to write to him. I shall look most carefully in Hansard at what I have said and try to make sure that I have covered in proper detail all the points that have been raised.

We attach great importance to the maintenance of the scientific base in this country as does everyone who has spoken in the debate. Sometimes this scientific base has to be kept within the public sector facilities; for instance, when the performance of statutory functions or the provision of policy advice to Ministers are concerned. But, by and large, the greater good for the United Kingdom as a whole will be obtained by working with the private sector. That is for a whole range of reasons--better understanding and exploitation of commercial opportunities; better focusing of effort; better cost control and more scope for the most talented employees.

The noble Lord, Lord Desai, said that basic research was equally good in the public sector. I do not disagree with him. I believe that there is a strong role for basic research in both sectors. Certainly, the public sector has a very honourable record in basic research, which we have every intention of continuing. But a lot of the work done within the agricultural research institutes is of a type where there are obvious commercial benefits to come from it and which we believe will benefit from being undertaken in a more commercially oriented environment. Where it is something that requires the distribution of the results to the public or generally broadcasting them, since we shall be paying for it through MAFF, that is something that we can require as part of the contract.

Nowhere is the Government's commitment to the research base clearer than in the food and agricultural sector where the Government have invested, and continue to invest, heavily (about £258 million in 1996-97).

The noble Lord, Lord Mackie of Benshie, asked where we are in the European league table. I do not have an answer and I shall have to write to him about it.

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In earlier years the priority was to increase food production; the results were impressive. Now we are looking to make better use of resources by reducing inputs, ensuring that agriculture is truly sustainable and addressing environmental issues. MAFF relies heavily on science to protect the public and to investigate animal and plant diseases. We need to be confident that research is carried out expertly and without bias and that it is also provided in the most effective way.

The prior options programme investigates whether work undertaken by public research establishments still needs to be done; whether it needs to be funded publicly; whether the work needs to be done by a public sector body; whether there is scope for rationalising with other public sector establishments working in the same areas; and how establishments and functions should be managed in the future. It is surely correct to ask those questions about the responsible use of taxpayers' funds, to say the least of it.

I turn now to the particular question of ADAS, formally MAFF's Agricultural Development and Advisory Service. I had always wondered what it stood for. Doubtless the noble Lord, Lord Desai, knew that from his childhood. This is clearly a subject which is dear to the heart of the noble Lord, Lord Carter, and of rather more recent acquaintance to mine, too. I might indeed say, "amo amas ADAS" for both of us, not that that is correct Latin grammar, but it approximates English. All of the commercial consultancy work, laboratory services and all the R&D work of ADAS will be privatised. The work which is not suitable for privatisation--for instance, work connected with payments under environmental schemes--is to be retained in a new executive agency, the Farming and Rural Conservation Agency.

This privatisation has been well presaged. I do not believe that we are rushing at it. The organisation is ready. We have a good opportunity and a large quantity of interest is already evident although we have not yet sent out the full information package, which will be made available to serious buyers only.

I shall tackle in no particular order some of the questions asked by the noble Lord, Lord Carter. He asked what the relationship of the privatised ADAS would be to BBSRC and NERC. The public sector research establishments, including those of BBSRC and NERC, already have a wide range of strategic links with both public and private sector bodies wherever there is mutual benefit. We expect that to continue after the privatisation of ADAS.

The noble Lord asked how privatisation will affect ADAS's BSE work. Not at all. All the R&D work which the Government places with ADAS will be subject to a tightly specified contract with the new owners, as is the normal practice. In the longer term we are building safeguards into the privatisation which will safeguard the MAFF-commissioned work on the experimental farms and that will be done over the long term.

As regards intellectual property rights, the Government are well aware of the need to make appropriate arrangements to safeguard intellectual

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property rights and ensure that Government-funded R&D results are not high-jacked for commercial purposes.

The noble Lord, Lord Carter, wanted to know what "risk adjusted and net benefit" to the taxpayer means. Perhaps I may translate that as, "Looking for the best deal available in terms of proceeds from the sale and future services to MAFF and the Welsh Office". There are clearly a great many aspects to this with MAFF as a major customer and the Government as the beneficiary of any possible proceeds. It will be difficult to decide exactly what is the net benefit because so many factors come into it. But I do not believe that there is anything in the formula to surprise the noble Lord.

None of the change at ADAS means that we will spend less on agricultural research. ADAS will continue to provide advice and research to the Government, and the volume of work will be governed as at present by the available money and government priorities for that money. Nothing in the privatisation of ADAS will change that decision. It will still feature as a line in the MAFF spending settlement. That matter will be decided independently of whether or not ADAS is privatised. We hope that under a privatised ADAS we will be able to continue the process that has been going on in ADAS for several years, buy research more cheaply and thereby obtain more research for the same amount of money.

Privatisation will bring benefits to a wide range of interested parties. It will bring benefits to the taxpayer because it will allow MAFF to concentrate on its core activities. There may even be some proceeds from the privatisation, although it is a matter for MAFF how it chooses to balance the terms of the sale and whether it looks for guaranteed terms for the future business that it places with ADAS, which may itself bring a benefit, or looks for cash up front.

As to terms, clearly the identity of the purchaser will be a matter of keen interest to us. As the noble Lord, Lord Carter, hopes, we will look for objectivity, impartiality and freedom from commercial interference. There is not much point in placing work on pesticides with a pesticide company. No one including the Government believes that that is far enough away from commercial influence on that particular subject. Therefore, the identity of the purchaser will matter to us a great deal because of the future business that we expect to place with ADAS. We will not entertain a situation in which simply the highest price wins; it will be a combination of price and suitability of purchaser.

We believe that privatisation of ADAS will itself provide the stimulus to improve its performance and make the best of its opportunities for growth. ADAS is strongly in favour of its own privatisation. We believe that it will bring benefits to the farmer. It should lead to greater efficiency and a better response to market demand. The noble Lord, Lord Mackie, in particular raised the subject of farmers' use of ADAS. He harked back to the old days when advice was free on almost

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any subject under the sun. Clearly, we have moved away from that. We demand that farmers ask for advice which they consider is worth paying for. That is a habit which has become easy to those farmers I know. If they cannot afford it themselves they band together in groups to get it. They do not necessarily go to ADAS. As the noble Lord, Lord Carter, knows, there are a number of other thriving agricultural consultancies. The process of asking for advice and deciding whether or not it is worth having is something that is best dealt with by the users of that advice rather than that it should be provided and chosen by the Government, in which case it may well end up in the farmer's waste paper basket as an unwanted and unnecessary piece of advice.

Of course, if we wish farmers to have certain advice it will be open to us--and doubtless we will continue this--to pay ADAS or some other consultancy to undertake the work and disseminate the results free. But if it is information which farmers can properly pay for themselves we see no reason to add to what is already a very heavily subsidised industry.

Lord Mackie of Benshie: My Lords, surely the noble Lord does not suggest that the great rise in production during the period when advice was free in this country resulted from advice which was untrue, wasteful or was thrown in the waste paper basket.

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