Select Committee on European Union Thirty-Seventh Report


Government Response

  The Government welcomes the thorough and wide-ranging work undertaken by the Committee in its examination of the Seventh Framework Programme (FP7) proposals and in the production of the associated Report.

  Since the Report was published there have been positive steps forward in the negotiation of FP7.

  The European Parliament completed its First Reading of the FP7 proposal on 15 June 2006. The Commission published a revised proposal for FP7 on 28 June 2006. In response to these events and to keep the legislative process on track the Presidency produced a compromise text, consistent with UK priorities, with the aim of reaching Political Agreement at an extraordinary Competitiveness Council on 24 July 2006. Political Agreement was achieved and on the basis of this agreement the Council established a Common Position at the Competitiveness Council on 25 September. This will be forwarded to the European Parliament for consideration in accordance with the codecision procedure. The European Parliament is aiming for a Second Reading of FP7 in November and Council hope to formally adopt FP7 at the December Competitiveness Council.

  We expect to mark the start of FP7 with a launch event in London in early 2007, it is hoped that the Science Minister Lord Sainsbury, the Chief Scientific Advisor Sir David King and an EC Commissioner will attend this event.


Conclusion 1: We welcome the increased funding for research and development from roughly €5 billion per annum under FP6 to around €7.7 billion per annum under FP7.

  The Commission's revised FP7 proposal of 28 June 2006 maintains the amounts proposed by the Commission in the amended proposals of 24 May 2006. These—set the FP7 budget at approximately €54 billion, equating to roughly €7.7 billion per annum.

  At the Competitiveness Council on 24 July 2006 Political Agreement was reached on a text that included the same total amount for FP7 as that contained in the Commission's revised proposal.


Recommendation 1: We were concerned that some areas of industry believed no competitive gain for UK business had been attributed to EU research programmes. We understand that FP7 aims to make research and development more industry-driven and the funding less bureaucratic and complicated. We urge the Government to ensure this aim becomes a reality and that industry supports these new instruments.

  The Commission has been receptive to the concerns expressed by the Government and shared by industry across Europe about the need to ensure that FP7 is driven by the needs of the ultimate end users of research in industry. It has sought to strengthen the industry input into the policy making process through such instruments as the European Technology Platforms (ETPs) and is seeking to make FP7 more industry-friendly in its programmes and structures. The Government welcomes this increased openness to the needs of industry.

  The Commission has made a strong and public commitment to tackle bureaucracy in FP7. It has undertaken to improve communication with participants, simplify procedures and speed-up processes. Its proposal for the FP7 Rules of Participation puts forward a number of measures to help improve the implementation of the programme such as giving greater autonomy to consortia, removing complex cost reporting models and the relaxation of some of the existing requirements surrounding dissemination, use and access to results from funded projects, which should make FP7 a more attractive proposition for industry. The Government has and will continue to support the Commission in its efforts to improve the delivery of the programme and monitor its performance once the programme is launched.


Conclusion 2: We welcome the proposal for the European Technology Platforms, involving a range of stakeholders including industry, to identify large scale industrial challenges and agree a strategy for tackling them (a Strategic Research Agenda). We also welcome the intention to implement a strategic research agenda through public-private partnerships (Joint Technology Initiatives) as this is most likely to ensure that the research projects are industry-driven. This method of funding will allow important programmes of research requiring substantial sums of money to be taken forward.

  The Government also welcomes the increased effort to engage industrial end users in the process of establishing the priorities for FP7 funding in the Cooperation Specific Programme. European Technology Platforms, which are industry driven, can play a key role in identifying a Strategic Research Agenda (SRA) for their industrial sector. This should also feed into the process of setting the work programmes and defining the fields in which calls for proposals for FP7 funding will be made, though the individual projects undertaken to advance SRAs will be funded through these calls and using established FP funding instruments, as well as other potential sources of funding.

  Joint Technology Initiatives (JTls), which involve FP funding in support of large scale public/private partnerships, are also driven by industry but go a stage further in terms of integration and combining private sector, national and European level funding. The Government supports the concept of JTIs in cases where the criteria (eg of scale, European added value, importance of the subject etc) set out in the FP7 proposals are met.

  Six possible JTIs have been identified by the Commission. It is not yet clear how many of these will ultimately be funded and on what scale; it is for instance possible that there will be a staggered start with some JTIs being launched before others. Our expectation now is that the Commission will come forward with proposals on this subject in the first half of 2007. The Government's preference at this stage (and subject to further information about the scale, scope and structure of individual JTls) would be that the JTIs on innovative medicines, aeronautics and hydrogen and fuel cells should be priorities for an early launch.

Recommendation 2: The Minister was unsure what monitoring and reporting systems would be in place to safeguard these projects. It is essential that appropriate systems are in place and we ask the Government to ensure that this happens.

  There are still no concrete proposals in this field. The Government shares the Committee's concern about the importance of the governance structures for JTIs. There will be a need to balance the need for proper oversight by Member States (and indeed by the European Commission) with the need for JTls to have adequate flexibility and industrial leadership in order to address industrial priorities and secure significant private investment. We shall of course make every effort to ensure that the most appropriate balance is struck in each case.


Conclusion 3: We welcome the implementation of an ERC as an instrument which could add value at an EU level.

Recommendation 3: We accept the Minister's assurance that the quality of the members of the ERC governing body would ensure the ERC was independent. However we accept the CBI's point that it will be impossible to assess the independence of the ERC until it was operational. We accordingly urge the Government to seek a post-implementation review of the ERC's independence to meet the concerns of industry.

  The current FP7 proposals include a provision for a thorough mid term review of the operation of the ERC by 2010. This review will consider whether the legal base upon which the ERC has been established and the governance structures which derive from this are adequate to ensure the effective independence of the ERC from outside influence which we wish.

Conclusion 4: We welcome the peer review system which replicates best practise in the UK's research councils and the USA's National Science Foundation.

  The ERC Scientific Council has recently published further information on how the peer review process will operate. This, along with updates on how the Council intends to implement the funding actions under the FP7 Ideas Specific Programme can be found on its website (


Conclusion 5: The Minister told us that the Government is "very sceptical" over the Commission's proposal to establish a European Institute of Technology. On the basis of the evidence received so far, the arguments against remain persuasive. However the proposal for an EIT remains under scrutiny and we will report further in due course.

  The Commission proposes to bring forward proposals relating to the EIT shortly. The Government will examine these in detail when they appear and will report further to the Committee in the course of the scrutiny process. The UK's success criteria for the EIT relate to clarity of purpose, clarity of the criteria for selecting both research topics and universities/institutes and clarity of expected outcomes. We continue to stress these criteria to the Commission and to other Member States.


Recommendation 4: National Mobility Programmes should enhance the number and calibre of researchers in the EU. We urge the Government to consult with industry to ensure that its concerns about National Mobility Programmes are addressed.

  The Government continues to work with the Commission to clarify how its proposals for co-funding national programmes would work in practice to ensure that it is possible for industry based researchers to participate on the same terms as they would be able to participate in the corresponding UK funding actions.


Conclusion 6: We were pleased to note that the Government shared our concern that there should be a synergy between the CIP and EU industrial policy and the structural funds. This is essential if the CIP is to deliver its objectives.

  The Government is pleased to see that the Political Agreement text for FP7 agreed by the ,European Council at the Competitiveness Council on 25 September draws synergies with both the Structural Funds Regulation and CIP.


Recommendation 5: We note that the budget line for space and security under the Seventh Framework Programme for Research has not yet been agreed but will need to be reduced.

  The budget for the different areas of research in FP7 will not be finalised until the programme is agreed via the codecision procedure. The Government is content that the budget included in the political agreement text reflects UK priorities.

Recommendation 6: We attach great importance to the undertakings given in Commissioner Verheugen's letter, in particular that there should be a "clear and exclusive focus on civil research". These undertakings should be reflected in FP7. We recommend that the Government seek agreement on the following:

    —  The Commission should engage with Member States at an early stage on all research proposals under the programme in order that the scope of the proposed research can be determined prior to commencement.

    —  COREPER should refer proposals on the space and security programme which it considers to be outside the civilian scope of that programme to the GAERC which should make a final determination on whether the research may be carried out.

    —  When proposing to carry out research on dual-use technology, the Commission should be mandated to co-operate with Member States and the European Defence Agency.

  The Government agrees wholeheartedly with the Committee that the focus of FP7 must be on civil research. It is worth noting that the Framework Programme does not have the necessary legal basis to fund defence research; projects funded by the programme must be of a civil nature. Decisions concerning defence matters can only be taken by intergovernmental cooperation under the Common Foreign and Security Policy pillar of the European Union.

  The Government will be able to closely scrutinise and monitor the Commission's management and implementation of the space and security programmes through participation in the relevant programme committee. The committee will fulfil a number of important roles, foremost being the development and approval of the Work Programme, which sets out the detailed objectives, specific scientific and technological priorities and the timetable for implementation. It will also have access to a wide range of information including details of submitted proposals and consortia, full evaluation reports and the lists of projects that will be funded. The Government believes that the committee will be able to carry out the functions foreseen by the Committee.

Recommendation 7: We recommend that the Government provide updates on the negotiations of the space and security programme as soon as they become available.

  The Government will continue to keep the committee up to date on the development of the negotiations relating to the space and security thematic area, and the whole of FP7.

Letter from the Chairman to Lord Sainsbury of Turville, Parliamentary Under-Secretary of State for Science and Innovation, Department of Trade and Industry

  Thank you for your Government Response which Sub-Committee C considered at its meeting on 26 October. The following comments relate only to that part of the Response dealing with space and security.

  We noted in our Report that in your letter dated 10 May 2006 you stated that the Government wished to see the budget line for space and security reduced in favour of other thematic areas such as health, energy and transport. However, in your Response you now state that "The Government is content that the budget included in the political agreement text reflects UK priorities". Can you confirm that the budget for space and security in the political agreement text has been reduced? If not, have your priorities changed?

  We welcome your agreement that the focus of FP7 must be on civil research and that the Framework Programme does not have the necessary legal basis to fund defence research. We were also concerned, however, with the potential involvement of the Commission in research into dual-use technologies. We therefore proposed three safeguard mechanisms which could be built into the Framework Programme.

  We recommended that the Commission should engage with Member States at an early stage on all research proposals under the space and security programme in order to determine the scope of the proposals. The information you have provided in your Response on the programme committee reassures us that this engagement will take place.

  However. we also proposed a further two safeguards—reference to the GAERC and consultation with the EDA—which your Response does not address. We ask that you respond specifically to these proposals stating whether you raised them in negotiations and whether you agree that they would assist in ensuring that the FP7 retains its civilian focus.

30 October 2006

Letter from Malcolm Wicks MP, Minister for Science and Innovation, Department of Trade and Industry to the Chairman

  Thank you for your letter of 30 October to Lord Sainsbury in which you raise certain points concerning the space and security elements in the Seventh Framework Programme as reflected in the political agreement text. I am replying as this matter falls within my portfolio.

  The budget for space and security in the original Commission proposals to which David Sainsbury's letter of 10 May referred was set at €2.858 billion. In the political agreement text these budgets (which have now been divided into separate programmes in line with UK preferences) stand at €2.78 billion-€1.43 billion for space and € 1.35 billion for security. This overall reduction took place in the context of an overall increase in the sums allocated to the Cooperation Specific Programme, so in percentage terms the share of Framework money going to these areas has been reduced in line with UK preferences. While the political agreement text may be subject to minor adjustment as it goes through the co-decision process with the European Parliament, it is unlikely that these figures will be substantially modified. This therefore represents a satisfactory outcome from a UK perspective.

  You also raise the issue of safeguard mechanisms to enable Member States to ensure that the security research element is solely focused on civil security research and that they are fully involved in the consideration of all research proposals. I can report that we are pleased with a number of recent developments.

  Firstly, it has been agreed that due to the particularly sensitive nature of security research, a Regulatory Committee should be established as the Programme Committee for the security research part of FP7. This will provide Member States with a greater say in the scope of the programme, with recourse to the Council if agreement cannot be reached with the Commission.

  Secondly, under the draft Rules of Participation, for security research it is envisaged that specific provisions will be laid out in the grant agreement relating to "changes to the consortium's composition, confidentiality, classification of information, and information to Member States, dissemination, access rights, transfer of ownership of foreground and use thereof".

  This is an important development, as it will allow UK and other Member States to scrutinise in detail any project proposals which involve the use or creation of classified information or that may require export licences. Member States will be able to flag up any proposals of concern and scrutinise them to ensure that all security issues have been complied with.

  Finally, the draft Council Decision on Framework Programme 7, also explicitly mentions the need to consult the EDA.

24 November 2006

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