RESEARCH AND DEVELOPMENT

HC Deb 19 March 1963 vol 674 cc282-311

7.3 p.m.

Mr. Frederick Lee (Newton)

During the previous debate a number of right hon. and hon. Gentlemen on both sides of the Committee complained of the lack of information about Supplementary Estimates. We must make the same complaint regarding this Vote. My right hon. Friend the Member for Easington (Mr. Shinwell) complained, with some justice, that there is an anomaly in that we are expected to pass Estimates running into hundreds of millions of £s but we are confined to discussing the Supplementary Estimates to them.

In this case, I think that is a greater anomaly than ever, because a huge proportion of the original Estimate and perhaps even a bigger portion of the Supplementary Estimate represents public money being expended by private enterprise. I do not complain necessarily about that. I see no other method of doing our business under existing conditions. But one feels that the machinery of the House of Commons has become totally inadequate when it comes to hon. Members obtaining information regarding these great sums of money which they are asked to vote.

The original Estimate was for £231,900,000, and now we are asked to make provision for a further £13,750,000 to make a total of £245,650,000. These are huge sums of money. Even confining myself, as I must, to the Supplementary Estimate we are asked to accept the need for a further £13,750,000 of public money—most of it to be expended by private enterprise—on the very small amount of information which we can get from the Estimates or from questions regarding them.

I make no apology for asking the Parliamentary Secretary for a far greater amount of information about the need for this additional expenditure than we have yet heard. The biggest single item within this sum of £13,750,000 is the increase of £9,825,000 for research and development in outside industry. Anyone conversant with research and development knows how difficult it is to assess, at a given moment and within manageable proportions, the amount of money which is necessary. I do not wish to appear to be carping. But I believe that when year after year we see how wide of the mark we can be in our estimates for research and development, especially in connection with the Ministry of Aviation, it is necessary that hon. Members should have far greater facilities than they possess now to acquaint themselves with the reasons for these increases.

I am not complaining that the sum, in itself, is excessive, but I think it is for the Minister to show that the sum far which he is asking is justified by the results achieved, or the results which we may expect from the expenditure of this additional sum. As I have said, we cannot hope to estimate within a narrow proportion on ventures of this kind. But one notes that the amount allocated for research and development in private industry has gone up by the figure I have given and the amount allocated to the Ministry establishments has been revised downwards by £525,000. May we have an explanation of how it is that within the increased figure there is what I suppose could be described as a great mistake? In one footnote we see an explanation that there has been slower progress made in certain developments. May we have an explanation of the type of work on which the research and development side of the programme has made slower progress than in others? One is almost tempted to wonder whether some of the work previously allocated to the Ministry's own development teams has been handed to private industry for its research people to do the job, instead of the Ministry's.

Could we have an explanation as to the effort the Ministry is now making to obtain a far closer supervision of research and development by industry itself? I am speaking, of course, of the allocation of public money to private enterprise. I am asking, in the light of the long experience we have now had, whether the Ministry is satisfied with the machinery at its disposal for examining research and development within the aircraft industry in this case, and whether it is making real efforts to eliminate unnecessary duplication which we all know goes on. What machinery is now in existence for the cancellation of projects which, after being placed out to industry, it is realised are not likely to justify the expenditure involved?

One feels, I think with some knowledge, that in many instances projects for which the Ministry has estimated—and, maybe, projects for which we are now being asked to vote Supplementary Estimates—will never mature to anything which will be tangible in the economic life of the country. In many instances the research and development for which we are asked to pay goes on long beyond the point at which there could be an adequate return for the Estimates we are now asked to pass. Conversely, there may well be—I think there are—instances in which because of a shortage of money for R. and D. many worth-while projects may be abandoned, whereas a little more expenditure would bring to fruition a very successful project.

My feeling is that we have not yet got the kind of machinery within the industry which would give us the right answer to questions of that type. One notices in the N.E.D.C. Report a recommendation that fuller investigation is needed about whether Britain is devoting enough to research and development to support real economic growth and whether a better way can be found of deciding how the State can best invest its money in research with a view to getting the best economic and social returns. That is one of the recommendations which the N.E.D.C. has produced. It is a fairly substantial point which certainly has relevance to the problems we are discussing within the Ministry of Aviation. I suppose that it, of all the Ministries, is asked to dispense public money to private enterprise on an extremely lavish scale.

None of us in this Committee grudges expenditure on research and development when we can feel that an adequate return is possible—I put it no higher than that—but when we are considering a Supplementary Estimate for a considerable sum we are provided with no particular yardstick by which we can measure the returns which we hope we shall receive. Within the Estimate we see the project of the European Launcher Development Organisation. One of the items is for £6,100,000 for work done by industry on behalf of E.L.D.O. I should like the Minister to tell us what guarantees we have that this high expenditure is to lead to anything tangible for Britain.

One reads disquieting items in the newspapers in these days to the effect that there is considerable doubt whether the E.L.D.O. project will ever come to fruition. It is relevant when we are asked to vote this amount of money to ask the Government to give us information, which only they can give, as to the possibilities which may be expected from such expenditure.

I have looked through the announcement which the right hon. Gentleman, now the Minister of Defence, made in this House on 16th April, 1962, when he told us that the Convention to bring E.L.D.O. into being had been signed by seven Governments. He strung off the names of the various Governments and pointed out the stages of the development. They would include, in the first stage anyway, a British rocket—Blue Streak—and other nations would take the second and third stages and so on. I understand it is the case that of those seven Governments listed by the right hon. Gentleman so far only one has ratified the Convention. That is the Australian Government.

Unfortunately, according to Article 18 of the Convention, that is the one Government which is not expected to pay any money. If we reach a situation in which of seven Governments one is not expected to pay any money towards the project and that Government is the only one which ratifies the Convention, that is not exactly the best of all guarantees of solvency for the rest of the membership. Therefore, the Parliamentary Secretary to the Ministry of Aviation cannot expect this Committee to grant a Supplementary Estimate containing a very appreciable sum of money for this project unless he gives more information as to the possibilities of an adequate return.

The Times yesterday—sometimes The Times is right on these matters—told us that a certain meeting took place at Chequers during the weekend. A communiqué was issued from the Ministry of Aviation telling us that: The results of the rationalization of the industry up to date and its relation to Government were reviewed. The military, civil and space programmes were considered. Action on the matters discussed will be taken through the normal channels. If my guess is right, that after all this time only the Australian Government have ratified the Convention and even the British Government, which initiated the project, has riot yet ratified it, it would be very remiss of hon. Members to pass this Supplementary Estimate before we had a far greater assurance from the hon. Gentleman about the possibilities of E.L.D.O. than we have at the moment.

It begins to look dangerously as if not only was Blue Streak to be the first section of the new rocket for E.L.D.O. but suspiciously like it being the last stage as well. I do not know if the Minister of Defence was trying to justify the terrific expenditure which the nation had to incur in the production of Blue Streak and was, therefore, rather desperate to get on with the matter and put across the propaganda line which we all heard for so long, or, having done that, that the Government are now reconciled to the fact that E.L.D.O. will not become a going concern.

As to some of our partners in E.L.D.O., the French are now going ahead with their own S.E.R.E.B. Diamant and hope to launch their first satellite in two years' time, one year ahead of the first E.L.D.O. satellite which could possibly be sent up from Woomera. We know from the newspapers that the Germans are not in the least happy about E.L.D.O. They signed the original Convention, but they have not ratified it. They are already arguing that we would merely be duplicating a very great deal of the work which the Americans have already done on this type of satellite production.

We understand that Italy is also making her own arrangements to launch her own satellite with American rockets. Added to that, we hear reports that our own Cabinet has now decided to place contracts with British firms to build our own satellite for bouncing radio and T.V. signals around the world. In view of this, I must say that the House of Commons is not being treated with the respect with which it has a right to expect to be treated when we are presented with a Supplementary Estimate containing large sums for E.L.D.O., although the signatories to the original Convention, including our own Government, are in no hurry to ratify the Convention and apparently are all going ahead with their own projects to what must obviously be the detriment of the E.L.D.O. scheme.

I have not said these things because I do not wish to see Britain playing an adequate part in new communications systems. On the contrary. I had said them because I want to see us holding our own in this kind of new development. We know that the future of communications by the Post Office—I am thinking in terms of Commonwealth links—may well depend on our ability to produce our own satellite comparable with Telstar. In this respect, I should like to ask the Parliamentary Secretary whether any assessment has been made of the comparative costs of producing our own satellite within our own communications system, as distinct from the more conventional cable-laying activities common to this type of communication. I should like to be informed whether there are any figures which would enlighten us on the comparative costs.

I have here an article from the Economist of 14th July, 1962. I will not go through it now. It discusses costing in this sense. It is not pessimistic. It takes the view that, given a sufficient outlay on a thoroughly competent satellite of this type, it might well be a paying proposition as distinct from cables, and would certainly save us from the colossal expense of having to use other nations' communications systems, such as the system which the Americans are now perfecting.

We on this side are not opposing new conceptions of this type. Indeed, I have said many times that a nation such as ours, bereft of indigenous raw materials, must rely for the future almost wholly upon our ability to sell brains and not merely produce third-rate goods which other nations can produce. This is the future of a nation with fifty million-odd people on a small island with a great background of skill, knowledge and know-how. Unless we can get one jump ahead in modern technology and the application of research and development to new industries, it is hypocritical to say that we can demand a decent living standard in an island like this.

I am not querying the Supplementary Estimates from a carping point of view, from the desire always to argue that the Government should never present the Committee with Supplementary Estimates, especially on important industrial developments of this type. I do not take that view. Nor do I argue that we must always expect exact estimates at a given time. I know that that is impossible. However, I think that the Committee is entitled to know the answers to some of the questions I have asked. I hope that we are not going to be fobbed off with the statement that we are part of a great European project, which I do not believe will ever come to fruition. If we take that attitude, we shall not be adapting ourselves to make the effort which I think is necessary if Britain is to keep abreast of these great and vital changes which are now taking place.

I therefore hope that when replying the Parliamentary Secretary will address himself to these very important matters. I do not expect him at this stage to tell us whether the Cabinet has made the decision which it has been suggested it has made. I warn the hon. Gentleman that we shall take a very serious view if in a year or two's time, after having brought before the Committee these Supplementary Estimates which give the world the idea that Britain is serious in putting her resources into E.L.D.O., we are told that not only has the originator of the scheme lost all faith in it, but that as other nations are not ratifying the Convention we ourselves are using that as a pretext to come out. That would not be treating the House of Commons in a proper manner in relation to such Supplementary Estimates.

For these reasons, I should like the Parliamentary Secretary to say as much as he can at this time on those aspects of the Supplementary Estimate on which I have touched. Other hon. Members may well want to concentrate on other items within the Supplementary Estimate. For my part, I shall be very disappointed unless I receive satisfactory answers to these points.

Mr. Charles Doughty (Surrey, East)

I listened with great interest to the speech of the hon. Member for Newton (Mr. Lee). To a large extent I agreed with him. If we in this island are to continue to live comfortably and, I hope, prosperously, we must keep well ahead of other countries in technology. In that race this country must encourage its inventions. In this very important task the Government must give every assistance which they reasonably can.

In research and development it is always difficult to estimate ahead. It is said that a project may cost £X, and the work goes ahead on that basis. Perhaps it does cost £X. However, there may come a time when it is said, "We have not done quite as well as was expected". Then the difficult decision has to be made whether to write the project off because it will cost too much, whether to cut the project down, or whether to put more money into it and go back to the House of Commons with a Supplementary Estimate. It must always be remembered that the best of inventions nowadays takes so long to develop that when it finally works somebody else may well have a better one. We must not be left behind in this race. I fully understand why the Government have to come to the Committee and ask for Supplementary Estimates on a number of items.

I have one or two questions to ask upon the general principles. There are payments made to private firms which very efficiently do a large amount of work on these projects. Is the relationship this? The Government want some form of invention, be it a guided missile or a manned aeroplane, and say to a firm dealing with such matters, "This is our idea. Can you do research for us and quote us a price for the research?" Or is it that a firm comes to the Government and says, "We have a certain idea on the drawing board. We cannot take the enormous risk of proceeding with the experiment from our own finances and we would like some Government support. Of course, if it becomes successful the Government can have the advantage of placing an order and having the goods delivered to them, either for military or civil purposes." I am keeping strictly off technical points, because I do not have the technical knowledge to develop this further and to discuss how a particular article is made.

It is interesting to note that Subhead L contains a grant to Messrs. Short Brothers and Harland Limited. I am not criticising that, for I realise the importance of that firm. It operates in an area which is suffering—I hope temporarily—a small degree of unemployment, and I agree that everything should be done to keep the company going, as long as it is efficient. However, I should like some more details about this grant. For instance, is it a loan to enable Shorts to carry on, is it a payment in advance of work not yet completed or is it a grant—a present given to the firm to increase its capital—which will not be returned at a later date? I am simply asking for information and am in no sense criticising what I strongly suspect is a wise decision on the part of the Government. I will leave this matter, because we can, if we wish, return to it later.

I turn to Subhead D1 which deals with the European Launcher Development Organisation. Hon. Members should be given more information about this because we are being asked to vote a considerable sum of money. Will this Convention be ratified? We know that certain European countries are anxious to follow what I might call the "go-it-alone" principle, but if this plan is successful what advantages will this country get out of it, military or civil? Will we be given the fullest information or will we merely be a seventh partner in the organisation? What are the anticipated costs by way of Supplementary Estimates, and what are the prospects of it being brought to a successful conclusion? Will it be successfuly concluded in time for it to have a practical use, always remembering that inventions are quickly superseded these days?

I appreciate the difficulty of estimating ahead and I know that costs and wages are continually going up. I realise that the highly-skilled people involved in this work are entitled to proper remuneration. It is important that we in this island and the firms interested in modern inventions—and there are enough of them now, it would seem—should be always pressing ahead to ensure that we remain in advance of other nations. Only that way can we obtain orders and, thereby, maintain a high standard of living by our exports. It is necessary for the Government to support firms doing this work, but they should support them wisely to ensure that the country's money is not wasted.

7.34 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I am particularly interested in the subject of research and development and I wish to some extent to follow what was said by the hon. and learned Member for Surrey, East (Mr. Doughty) about the intangibles which surround this subject. One must approach this matter remembering that whatever research or development is undertaken in any sphere it is never a complete loss. Something is always learned by someone, even if the project involves new alloys or steels to enable metals to withstand various temperatures and high compressions.

In such cases it is usually up to the executives and others in private establishments to spot and sort out the results of the research and to see how they can be usefully applied, not necessarily in the sphere in which the research was undertaken. This is an important feature of any industrial establishment and many of the best ideas are applied in spheres different from the one in which the actual research first took place.

It is no wonder that some of the wording of the Supplementary Estimate, particularly in the modern age in which we live, is rather surprising. We find, for instance, an increase of £9,825,000 under the general heading of "Research and development work by industry". It seems that the main cost of the increase has arisen because bills have been presented for payment quicker than had been expected, coupled with increases in pay and prices. The increased prices refer, I imagine, to raw materials and not to the cost of the research work as such. Nevertheless, there is no indication in the words used in Subhead C1 that more research is being done, and I should like a break-down of the figures so that the country in general and the Committee in particular can be sure of how the increase of £9,825,000 has arisen, for it seems a much greater sum than could have resulted merely from industrial companies presenting their bills more quickly.

Since I find it a rather amazing reason to be given—that bills are being presented more quickly than had been expected—I hope that we will be told exactly what increases are represented in the figure of £9,825,000. Does it mean that deliveries are being made more speedily to the Ministry of Aviation? I hope that we shall be given an assurance that the Ministry is not being turned into a sort of bank to consume excess ancillary products that come under the general heading of "research and development". All sorts of things could be involved in this, and I should like to know if it is simply a question of goods having been delivered more quickly or whether there has been a falling off in industrial activity, leading to more products being loaded upon State Departments.

I want to be certain about this because it is a rather delicate problem. I do not wish to be unfair to anyone or to make any unjust allegations. I am merely seeking the facts, for we are the custodians of the public purse. I am anxious to know if the increase of £9,825,000 has resulted because certain units have suffered a decrease in domestic orders, so to speak, and have sought to deliver at a faster rate to Government Departments. If so, can we be certain that the research is being done not purely in the interests of private industrial units? We want to be certain that this has not arisen merely because of slackness of trade, a falling off in orders or the recession we have had in the last two years.

Many of us know how, in slack times, extra work is piled on to a Government order, or put into a department dealing with Government work. It is an old habit to use Government Departments as a bank, as it were, for surplus resources. I feel that in this reference to some bills having been presented for payment more quickly may be detected some of those vicious practices of the past, and I hope that the Parliamentary Secretary can reassure us on that score.

We also see an increased provision for research and development establishments. Does the National Research and Development Corporation play any part in research work for the Ministry of Aviation? The Corporation comes under the Board of Trade, and deals with research and development for all sorts of commercial and civilian products. That is its function, and the 1962 Report shows that it has done research in biology, science, chemistry and mechanical engineering. It is a Government institution, financed by the Board of Trade, and it could surely do a great deal of research and development work that would be as helpful to the Ministry as other work has been to British industry.

We must use our State resources not only for the defence of the country but for furthering the capacity of our industries to meet competition and to export products that are superior in quality to those of any other nation. We should finance any institution that is equipped to do that sort of thing. I believe that the National Research and Development Corporation is such an institution, but I do not find any mention of its being in receipt, as an institution, of any of this money from the Ministry. It should, because I have no doubt at all that it can play a very valuable part.

I do not know whether the D.S.I.R. gets any financial aid from the Department, but, in any case, I doubt whether it does that sort of research. It does fundamental research, which is quite different from the field work with which we are here dealing.

It is that sort of thing that worries me about this Supplementary Estimate. I should like to see the amount put as high as the nation can afford, because our future depends on the sacrifices we are prepared to make in order to undertake research and development in every realm where we have to earn our living. Otherwise, we shall fall behind, and will not create the climate, conditions and facilities necessary to make proper use of our young scientists from the universities. The main complaint of all young people with scientific and engineering qualifications whom I meet is always, not that they are underpaid but that resources and facilities are not made available to them. A group of young scientists have told me that their reason for wanting to go to the United States is not that they will get better pay—not at all—but that the research and development establishments over there have much more equipment.

That is the great thing. We, of our age, should encourage young people to seek more resources to exploit and develop. They should not be encouraged necessarily to seek more personal income at their time of life—they can think of all that later. They want more resources to work on, and more development to do. That is very important to young people, especially creative young people.

I therefore hope that we can be assured that the Ministry is using the N.R.D.C., which has an ever-increasingly important part to play, and I hope that no money will be spared to provide all the necessary instruments of research and development so that our young scientists from the universities can find first-class equipment to use in our institutions. If that is done, I am confident that what the country does in the future will compare with anything that has been done in the past.

7.45 p.m.

Mr. Farey-Jones (Watford)

If I understood the hon. Member for Dunbartonshire, East (Mr. Bence) aright, he said that he would be delighted to vote for even greater amounts than appear in this Vote provided they were canalised in certain directions, very much agree with what he said. I am sorry that I did not hear the previous speeches—unfortunately I was delayed outside the Chamber—because, as hon. Members know, I regard research and development as of extreme importance.

I find it difficult to get at the facts as itemised in these pages. The figures seem to be so presented as to conceal something. We all know that in reality that is not the case, but this is a research and development Vote and I hope that the Minister will tell us exactly what we are doing in that direction. By and large, in relation to the Ministry's job the total amount we appear to be spending on research is completely inadequate if we are to keep, if not in the vanguard, at least catching up with what is happening in the outside world.

I suppose we all know that one of the major problems in the Armed Services today—in fact, in any major development in the science of electronics, nucleonics or computers—is the supreme difficulty of recruiting young men and women fresh from college, university and technical school who are prepared to devote their formative years in research on British products. The student, or the professor, does not necessarily emphasise the condition of vast pay. What the average researcher really wants is pride in his job, the knowledge that he is doing something really worth while, that his work leads to a positive end, that the people for whom and with whom he is working really know what they are doing, and that there is an end object.

A noble Lord for whom I have the utmost affection, regard and respect has complained in another place about the United States removing from this country some of our most brilliant brains. Even concerning the Ministry of Aviation that is desperately true, because the man who has the most to do with the development of radar is working in the United States right now. In fact, without his presence there some of the fantastic things that are happening in, shall I say, outer space would not have been possible. That is equally true of medicine, but this is not a Vote concerning doctors. But it is very true in the world of computers, it is frightfully true in the world of nucleonics, and it is perhaps one of the things on which in future Estimates the Ministry of Aviation and the men in Whitehall will, in my opinion, have to revise their outlook and really get modern.

Our problem in the world of research is quite a simple one. We have not the fantastic funds that the United States have—but then Britain never did have—but we have a natural ability and natural facility for producing better things at cheaper cost, provided we have the courage to give our researchers and the people engaged in it what one might call a reasonably free rein. On the other hand, when I look at the Supplementary Estimate and see how our research is distributed, I do not feel as happy as I should like to feel—far from it.

I was rather pleased to see the reference to the proposed expenditure on the European Launcher Development Organisation. I should like the Minister to tell us what, in fact, is the position. Have we ratified our agreement with E.L.D.O. on this matter? Do we intend to ratify it? In what form is our contribution to be made? Or are we, perhaps, going to realise that before we expend a lot of money we should be infinitely wiser to do the whole thing ourselves and use some of our research and design staff so desperately needing confidence in the future for that purpose?

I particularly want to say a few words about the grant to Short Bros. and Harland. There we have, in my opinion, a major problem, not only of employment in Northern Ireland, but of confidence in the future of some extremely brilliant workers and one of the best design staffs in the United Kingdom. I hope that the Minister will give some indication before we pass this Vote in which form the Ministry of Aviation intends in future to canalise and direct our research workers. We all know, for instance, that at Farnborough we have some of the most peerless technical brains that exist in the world, and I personally would sound a note of warning. I am fully aware that some of our best brains in this country may willy-nilly feel compelled to leave this island and take up residence in the United States for the simple reason that wherever they look in March, 1963, there is no centrally directed canalised research organisation for the various phases and the various challenges that we have to meet.

I do not want to take up the time of other hon. Members who, I am sure, are anxious to speak on this matter. On the other hand, I am deeply sensitive to the fact that the young men and women in our grammar schools and leaving the universities are looking for something to believe in and something to which they can dedicate their future. I hope, therefore, that some of the remarks that I have made will prompt the Minister to give us some insight into how this money will be spent.

7.55 p.m.

Mr. Eric Fletcher (Islington, East)

I find myself in almost complete agreement with the sentiments which have been expressed on both sides of the Committee with regard to the Supplementary Estimate of the Ministry of Aviation which we are being asked to pass. I regard it as one of the most important and one of the most significant in the batch of Supplementary and Civil Estimates for 1962–63, and I think it is very appropriate that the Committee should spend some time in discussing both the significance and the implications of this Supplementary Estimate. I think that the Committee is entitled to do that not because it wants to cavil at or oppose the Government's request for this additional Vote, but because the Committee is sensitive of the supreme importance of this effort, and also because I think the Committee and the country are very desirous of having much more information about it than has been vouchsafed at present.

The Committee will be aware that in this Supplementary Estimate, apart from the Short Bros. item, which I do not propose to go into, there are two particular Supplementary Estimates which excite interest and attention. There is one for an increase in Vote C.1 of £9,825,000 for research and development work by industry. This is because it is now proposed to revise the original provision of £177 million to approximately £186½ million. The other item is entirely new because it is proposed by the Supplementary Estimate to Vote just over £6 million for the European Launcher Development Organisation for which only a nominal item of £10 was included in the original Estimate.

May I take these two items in sequence? First, I think that the Committee will agree with what my hon. Friend the Member for Dumbartonshire, East (Mr. Bence) and the hon. Member for Watford (Mr. Farey-Jones) said about the supreme importance to this country of research in industry. I do not think it is an exaggeration to say that, taking a long view, our national fortunes may well depend on the extent to which our scientists and our technicians gear themselves to the opportunities and possibilities of the next decade or so.

In every realm of science, particularly in the realms of nuclear science, electronics, computer research and so forth, I hope that the Minister will tell us whether he regards this increased Vote as sufficient to do anything to stem the tide of emigration of senior scientists from this country, about which we have all been so shocked to learn recently in the Report published by the Royal Academy.

When I had a Question on the Order Paper to the Prime Minister a week or so ago I was shocked at the apparent complacency of the right hon. Gentleman about this growing tide of emigration. The Prime Minister pointed out that it was not only to the United States. He seemed to think that it was some excuse or mitigation that a large part of the emigration went to Commonwealth countries. I dare say that it does, but where-ever it goes, whether to the United States or to Commonwealth countries, does nothing to weaken the arguments put forward in that trenchant Report by the Royal Academy. It pointed out that this loss of highly trained senior scientists had not only very serious economic consequences for the country, because large sums had been invested in training them, but it seriously affected our competitive power with other countries in a sphere in which it is essential that we should be predominant and pre-eminent in the next few years.

I agree with what hon. Members have said, and from my own experience I know that to those with whom I have talked on this subject it is not merely, if indeed at all, higher salaries and rewards overseas that tempt a large number of our most highly trained scientists to emigrate. A far more potent reason is their feeling that they have greater opportunities and facilities in the United States and elsewhere for developing techniques. They have the apparatus and the equipment that they want. They have the facilities for getting on with their research, and they do not feel so handicapped as they do here by obstacles of one kind and another.

In that context I wonder whether this increase of about £10 million, which is only about 2 per cent. of the original Estimate, is enough to allay growing concern on this subject. I hope that the Parliamentary Secretary will say something about this, because it has produced considerable alarm. I hope that he will also be able to answer some of the questions which my hon. Friends have posed, and others which I shall ask, so that we may know in greater detail how this additional money will be spent.

Am I right in thinking that, although it is on the Ministry of Aviation Vote, some part of it will be applied through other channels such as, for example, the D.S.I.R. and the universities? The vital question is whether the Parliamentary Secretary is satisfied that there is an ideal system of co-ordination in research today between the universities and the research establishments under the Minister's jurisdiction. I doubt whether some of the professors of applied science in some of our leading universities would think that there is. But if we are to succeed in these activities it is most important that there should be the closest co-operation and co-ordination between the universities, the advanced colleges of technology, and the Minister. It would be very regrettable if students who obtained these higher degrees in the universities felt themselves thwarted from working for the Ministry of Aviation because they thought that there were greater opportunities and possibilities overseas.

Mr. Loughlin

My hon. Friend will find on page 91 of the Supplementary Estimates under B.1. a reference to: Research and development establishments: salaries and wages etc. Under this heading there is an increased Supplementary Estimate and a subtitle which reads: Increased rates of pay offset by reduction in staff. Surely this is the policy which the Government are pursuing and not the one which my hon. Friend is now advocating.

Mr. Fletcher

I am obliged to my hon. Friend for that interjection. It is a valid point. I always find it difficult to appreciate the precise significance of the way in which some of these Supplementary Estimates are prepared. I hope that the Parliamentary Secretary will tell us what is the precise relationship between the proposed increase under B.1 of £225,000, compared with the increase of nearly £10 million for research and development work by industry. Is any part of the sum of nearly £10 million to be applied to salaries and wages? If not, how is it to be applied? Will it all go on equipment and apparatus? If some part is to go on salaries and wages, what is the point of dividing the Estimates between B.1 and C.1?

Would I be justified in saying that B1 is confined to research and development at Ministry establishments whereas Cl relates to research and development by industry generally for which the Ministry of Aviation is responsible? If that is the explanation, would the Parliamentary Secretary explain why it is that for research and development at the Ministry's own establishment the increased rates of pay as offset by reductions in staff? Is it the Ministry's policy now to reduce its own research and development at Ministry establishments and apply more money and channel part of this £10 million through other organisations and establishments? If so, what is the implication of that policy? I should like to know particularly how much of this expenditure is applied to the D.S.I.R. and how much is channelled to universities and similar organisations?

I now come to an Estimate which is of at least equal interest to the Committee and that is the proposed Vote for the first time of £6,100,000 for the European Launcher Development Organisation, which for convenience is sometimes referred to as E.L.D.O. The Committee, and indeed the country, know very little about this development. Here is an ideal opportunity for the Parliamentary Secretary to tell us much more about it. All we know so far is that on 16th April last the Minister of Defence announced that the Convention for the establishment of this European Launcher Development Organisation had been signed. Incidentally, although it is called a European organisation, the Convention was signed not only by Belgium, France, West Germany, Italy, the Netherlands and the United Kingdom, but also by the Government of Australia. As I understand, it is out of date. The only country which has ratified the Convention is Australia. I understand that none of the European Governments has yet ratified it.

Therefore, the relevant questions which we should ask the Minister are these. Is it the Government's intention to ratify the Convention and, if so, when? Can the Minister tell us the latest news about the intentions of any of the other European Governments to ratify the Convention? Does the Minister think that the breakdown of the Common Market negotiations recently will be a deterrent to France or to any of the other Common Market countries in their attitude to E.L.D.O.? What, for example, is the attitude of President de Gaulle to E.L.D.O. now compared with April, 1962? This question, as I am sure the Committee will realise, is very pertinent because, whether or not E.L.D.O. was a good thing in conception, and although this Committee is being asked to vote £6 million towards it, the degree of influence which we seem to have in E.L.D.O. is extremely tenuous and nebulous.

The Minister of Defence said with regard to the initial programme that a French rocket would be used at the second stage. He said that the third stage would be developed under the leadership of the Federal Republic of Germany and that The design, development and construction of the first series of satellite test vehicles will be carried out under the leadership of the Italian Republic, and the equipment for the ground guidance stations under the leadership of Belgium and of the long range telemetry links under the leadership of the Netherlands."—[OFFICIAL REPORT, 16th April, 1962; Vol. 658, c. 7.] The launcher devices at Woomera were going to be used.

This may have been a very fine conception, but it is pertinent to observe that the prospects of European co-operation on this scale were, presumably, much rosier a year ago, when we had a reasonable prospect of entering the Common Market and having an economic association, if not a close political association, with the other Common Market nations. But no proposal was made in the original Estimates about making a contribution to E.L.D.O. It is only now, a year after the Convention was signed, that the Minister proposes that we should pass this Vote of £6 million.

We are, therefore, entitled to know whether the Minister is as satisfied as he was a year ago that this degree of European co-operation and integration is as feasible as it seemed then. Why are we being asked to accept a Supplementary Vote before the Government have ratified the Convention or before any other European nation has ratified it?

In asking these questions, I do not wish it to be thought that I am saying one word in derogation of the ideal of space research. I think that space research is all important. Anyone who recognises the fantastic developments by the United States and Soviet Russia in recent years in space research, in satellites circling not only this planet but other planets, and such novel developments as Telstar and all the possibilities which it opens up of revolutionary concepts in communications must be conscious of the immense importance of space research, not merely as an academic exercise but as something which has within it the possibility of revolutionising our present conception of world communication, whether by telephone, television or methods not yet understood or fully developed.

Mr. John Eden (Bournemouth, West)

I agree with much of what the hon. Gentleman has been saying and support the sentiments which he has been expressing, but I am sure that he will recognise the difficulty in trying to keep a balance in all the demands made on us. I think that he will accept that each of us, as a member of this Committee, must look over the whole range of expenditure. The largest Supplementary Estimate, although it has not been selected for discussion, is £25 million for National Assistance. Does not he think that there is some significance in this fact in trying to keep the balance between, on the one hand, encouraging the sort of developments which he has called for and, on the other, ensuring social justice and meeting all the other demands made on the Exchequer?

Mr. Fletcher

I appreciate the hon. Gentleman's point. I do not regard the two Supplementary Estimates as in any way inconsistent. I do not think that there is any inconsistency between—

Mr. Eden

No; I am not suggesting that there is.

Mr. Fletcher

I do riot think that the hon. Gentleman suggests that there is any inconsistency here. I think that he is saying that it is necessary to keep these two things in perspective, which I am trying to do. I do not think any hon. Member opposes the proposed increase in the Estimate for National Assistance. I certainly do not. It is not out of perspective for the Government to propose this increased expenditure on research and on National Assistance. However, taking a long-term view, I am sure that we shall not be able to afford adequate National Assistance, adequate social justice or an adequate standard of living for our people unless we are in the forefront of technical research.

Although our geographical position still gives us certain advantages, the history of the last few years shows that some of the other historical advantages on which we have depended no longer exist. However, I believe that the insular genius of this country has resided for a long time past, and still resides, in the capacity, energy and inventive outlook of our leading scientists. It is more essential in the scientific field than in any other field that the Government should give a lead and stimulus so that we can take the fullest advantage of reaping the rewards which I am sure will be open to us as a country if we take time by the forelock and do not stint the expenditure which is necessary at this stage.

What I wish to know is whether this or any other amount of money is better spent in this form or in some other form. Does the Minister still think, as the Minister of Defence apparently thought a year ago, that the best contribution to space research is by being a member of the Convention, which has not yet been ratified? Are we, or are we not, prejudicing our chances of independent effort in space research by participating in this joint programme?

None of us can answer these questions unless the Minister tells us how far the project envisaged in E.L.D.O. a year ago has gone. Has it started? Has it been ratified? How much of the preliminary work has been done? The Convention, which I have read, contains a great many expressions of pious hope about what might be done, but it is nebulous. What we want at this stage is concrete facts. Would we be better off if we spent more money on our own space research, if necessary with Australia and other Commonwealth countries? These are the problems to which the House of Commons should address itself. We do not quarrel with the expenditure of money—we all realise the vital necessity of it—but we are anxious to ensure that the money is being spent in the best possible way.

8.21 p.m.

The Parliamentary Secretary to the Ministry of Aviation (Mr. Neil Marten)

I should like to thank my many hon. Friends and hon. Members opposite who have made such pleasant contributions to the debate. In asking the Committee to vote an extra sum for aviation, I should like, first, to explain the reasons for the increases in expenditure on research and development work by industry, which is the subject of the Vote, and then deal with the much-discussed European Launcher Development Organisation. If I do not answer all the many questions which have been put to me, I will certainly follow them up; it may be that I am limited in time, since another debate is to follow, or because I do not have the answers with me.

Many hon. Members have asked what we are doing with this money on research and development. They want more details about it. I recognise this difficulty. It was raised in the debate yesterday on the Air Estimates. As hon. Members opposite then recognised, difficulty arises when one is dealing with a lot of projects which are secret, some of which are confidential and many of which involve commercial contracts. Is it right, for example, to divulge the details of secret, confidential or commercial contracts in the House of Commons? I understand the difficulties of hon. Members. How to overcome this real problem is perhaps, worthy, of discussion outside this Chamber.

As will be seen from the Supplementary Estimates, under Subhead Cl the cost of research and development work by industry has risen from £168.7 million to £177.2 million, an increase of £8.5 million. The remainder of the expenditure is on Australia and on the items in paragraphs (3) and (4).

I must first explain that £4.3 million of the £8.5 million is due to two items which are not directly research and development. This probably answers the points made tonight by many hon. Members.

The first of those two items is the engineering wage award, colloquially known as the 3 per cent.—It was, in fact, 3.1 per cent.—which operated from 9th July, 1962. During the current year that will cost an extra £2.3 million. The second item, to which the hon. Member for Dunbartonshire, East (Mr. Bence) particularly referred, is that of prompt payment and it amounts to about £2 million. As the hon. Member said, some bills for development work are being presented for payment more quickly than hitherto.

In making estimates of annual cash requirements, we have to make certain assumptions about the rate at which these bills are presented. Over the last year, there has been a noticeable speeding up of this process. I believe that this is partly due to beneficial changes in the reorganisation of the aircraft industry. The industry is coming round to getting itself together and taking the best from one unit of production and passing it on to the next. I believe that we are now seeing in this way the effect of the amalgamation of firms. We have to bear in mind that this desire for prompter payment is a once-for-all operation and will not affect the eventual cost of the work under contract. We under-provided for this trend of prompter billing to the extent of £2 million. The hon. Member for Dunbartonshire, East asked whether the Ministry was acting as banker in this connection. If I understood the hon. Member's argument correctly, I do not think we are.

To return to the Supplementary Estimate on actual research and development work in industry, one must subtract from the £8.5 million the £2.3 million for wages and the £2 million for prompter payment. One is then left with the true figure on research and development, which amounts to £4.2 million as the actual increase on research and development costs. That is what we have been discussing tonight in this context.

That represents an increase, as the hon. Member for Islington, East (Mr. Fletcher) said, of less than 2½ per cent., which, out of a total of £168.7 million, and in view of the complexity, magnitude and variety of projects, is not at all bad. Here, of course, we are dealing with total expenditure, and this modest increase includes under-estimating on some projects being balanced against overestimating on others.

The Committee is familiar with the difficulties of estimating total development costs of projects, and I do not want to weary hon. Members with a complete lecture on that subject. Other countries face exactly the same problem. We find that assessing how much we are to spend in a particular year on a particular project is easier than estimating the total cost. The record of the Ministry of Aviation, taking one year with another, and bearing in mind the magnitude of the problem, has been good.

Over the last eight years, taking the figures for the Vote—we have been only one-tenth of 1 per cent. overspent. I think that great credit is due to the Ministry for this result.

Mr. Lee

But, in fairness, one should add that we did not necessarily get all the hardware we estimated for.

Mr. Marten

That is a fair point. Nevertheless, out of a net total of £1,750 million over the last eight years, our Estimates have been out by £2 million only.

In each major project, there are a number of subsidiary development programmes going on in various companies. For example, the development of a major combat aircraft usually involves very large effort in the development of navigational equipment, weapons, radar and a multitude of smaller components. If a difficulty arises on any one of these, it can have serious repercussions throughout the whole system and affect the cost estimates for the whole project, while, of course, any delay caused by one of these faults or snags adds to the time scale and therefore to the bill for wages.

When confronted by increased spending on a project in a particular year, we have two courses open to us, short of cancellation. First, we can hold the annual expenditure to the level for which Parliament has given authority, but if we do so it may well have a chain reaction throughout the whole project and will certainly mean a slippage of deilvery dates and a probable increase in the ultimate cost. If we take the second course, however, we can accept that our previous estimates were wrong and approach Parliament for more money to enable us to maintain the momentum of the development.

The disadvantages of the first course need no emphasising, and we are now following the second in asking the Committee for an increase which is less than 2½ per cent. What did the Ministry do when it saw this possible Supplementary Estimate coming up? Faced by the prospect of net over-spending on this Vote, the Ministry went through the whole programme under discussion in the middle of 1962 and, wherever there was scope for deferring or slowing down work without significantly interfering with the needs of the Services, we did so. No one can estimate with complete accuracy individual costs on research and development projects. The programme must be kept flexible in order to permit changes in requirements, largely by the Services, or improved methods. As the hon. Member for Dunbartonshire, East so rightly said, many of these modifications which have to be made produce great technological benefits, but no one, or no country, has found the answer to this problem. One starts off with the basic plan and if the sole desire is to stick doggedly to it one will restrict flexibility and the project will probably suffer.

The hon. Member for Newton (Mr. Lee) asked about closer supervision, and I can assure him that many methods of close supervision are operated by the Ministry. I think that the smallness of this Supplementary Estimate justifies those methods.

The hon. Member for Dunbartonshire, East also asked about the cost of research and wanted to know whether the Government got anything back on what they provided for private industry. The answer is that the Government do. For example, the Government get back a levy on the sale of an aero-engine based partly on Government money in research.—[An HON. MEMBER: "How much?"] The amount varies and is negotiated in the contract when the development is proposed. There is no exact, set formula for it and I think that in certain circumstances the Government have the right to be a little "easy" about collecting it back for a short time while the aero-engine gets off the ground, as it were, to the point of actual sales.

Mr. Bence

Some of the best aircraft engines in the world have been developed by research in private institutions and by Government establishments and then manufactured overseas under licence. For instance, Pratt and Whitney manufacture Rolls-Royce engines under licence. Does the Treasury get any of the licence fee when that happens?

Mr. Marten

Yes, it does, but I cannot say precisely off the cuff what it gets in the way of drawback when there is manufacture under licence overseas.

The hon. Member for Islington, East asked about liaison between the universities and the Government establishments. When I have been to Government establishments, such as the Royal Aircraft Establishment at Farnborough, and I have asked this question on the ground, as it were, I have found that they regard liaison as satisfactory. We should like to see even more done in that way. I think that I have said sufficient to show that the increases are not due to any carelessness on the part of the Ministry of Aviation, and I hope that the Committee will approve them.

I now turn to the subject of the European Launcher Development Organisation, shortly, E.L.D.O. The reasons for the extra provision for E.L.D.O. are clearly stated on page 92 of the Supplementary Estimates, and I will not take up the time of the Committee by going through all that again in great detail. Suffice it to say that the delay in setting up E.L.D.O. has caused certain payments from E.L.D.O. to be postponed, as until it is set up, it clearly cannot pay anything; nor, on the other hand, can we pay our share into E.L.D.O. until it is set up. As provision for both these payments was made in the original Estimates, the matter had to be adjusted in the accounts. As we hoped to receive £1.1 million more than we paid out, the Supplementary Estimates now seek the Committee's approval for the provision of this sum, which will be recouped when the convention is ratified.

The Convention for the establishment of E.L.D.O. was drawn up at a conference in Lancaster House in October, 1961. The Convention was signed by Australia, Belgium, France, Germany. Italy, the Netherlands and the United Kingdom in March, 1962. The first programme of the organisation, consisting of a three-stage launcher, of which Blue Streak is the first stage, a French rocket the second and a German rocket the third, is presently estimated to cost a total of about £70 million over a period of five years from November, 1961. It is estimated that a satellite test vehicle will be placed in orbit early in 1966. This is being made in Italy by the Italians.

The hon. Member for Newton asked for tangible results and concrete facts. I hope that that was something, but I will take the opportunity to bring the Committee up to date and say that we have conducted a successful series of static firings at Spadeadam of both the engines and of the complete Blue Streak. The first rocket, which will be sent to Australia for testing at the launching site at Woomera, is at present making preliminary tests at Spadeadam prior to dispatch later this year. Another concrete fact is that the first flight test firing of the Blue Streak first stage is expected to take place in Australia in the spring of 1964. I hope that those few facts will give the Committee concrete examples of how this project is going ahead.

Mr. Emrys Hughes (South Ayrshire)

Can the hon. Gentleman give us some more information about the testing of Blue Streak in Australia? Has he any idea what this will cost?

Mr. Marten

I have no figures which I can readily give the hon. Gentleman, but I have just given the Committee a figure of £70 million which the whole project will cost to all the E.L.D.O. countries. That cost will then be split between the members of E.L.D.O. in the proportions set out as an annexe to the E.L.D.O. Convention.

Mr. John Biggs-Davison (Chigwell)

Does my hon. Friend expect the other European Powers concerned speedily to ratify this Convention? Does not this expenditure depend to a large extent on its ratification?

Mr. Marten

I am coming to the question of ratification, which I think was mentioned by practically every hon. Member who spoke during the debate.

I was trying to give the Committee some concrete facts to show how far the project had gone. My hon. and learned Friend the Member for Surrey, East (Mr. Doughty) asked whether the results would be advantageous to this country, and whether we would get the results of the firing of any satellites. The answer is "Yes". The information coming in will be pooled.

As many hon. Members have said, only the Australians have so far ratified the Convention. We expect to ratify it by the middle of this year, and we hope that all countries will have ratified it by the autumn. I cannot, of course, speak for the other countries because they have their own constitutional ways of doing this, but the best estimate we can give is that the Convention should be completely ratified by the autumn.

The reason why our ratification has not taken place as quickly as some hon. Members thought it might have, is purely an administrative one, in that questions of protocol and diplomatic immunity are being worked out in the usual way. There is no holding back on our part.

Mr. Lee

Has the hon. Gentleman any doubts about whether any one of the seven will refuse to ratify the Convention at the appropriate time?

Mr. Marten

I have no evidence of any doubts at all, and I would tell the hon. Gentleman if I had.

Mr. Fletcher

Is the hon. Gentleman saying that the break-down of the Common Market negotiations has no bearing on this?

Mr. Marten

I am coming to that point, which the hon. Gentleman raised in his speech. I think that the question he posed is, and must be, very much one of opinion. Naturally a lot of hon. Members studied the question of the Common Market, and I think that as a group of people we know quite a lot about it. I have seen no effect whatsoever of the breakdown of the Common Market negotiations on the forward move to get the E.L.D.O. Convention ratified. E.L.D.O. comes into force when States, the total of whose contribution according to the table in the annexe to the financial protocol to the Convention amounts to 85 per cent., have ratified the Convention.

Since the cancellation of Blue Streak as a military weapon, work has continued in the United Kingdom on those aspects of the rocket which will be useful as the first stage of the satellite launcher. The Convention provides that the cost of the first programme is to be shared on the basis of the table in the annexe to the financial protocol. The table lists all the countries who were present at the earlier Strasbourg Conference, and the percentage contributions are based on the gross national product of the countries concerned, except that we have offered to pay one-third of the total cost. The Convention provides that if any of the countries do not participate in the organisation —and presumably, also, if they do not ratify—the United Kingdom, France and Germany will consult as to sharing the shortfall caused by the failure of these other countries to join.

As from 1st November, 1961, the cost falls on E.L.D.O., as does the cost of the work going on in other member countries. Pending sufficient ratifications and the coming into being of E.L.D.O., the member countries have set up a preparatory group with headquarters staff in Paris to co-ordinate work which is going on in their various countries. The question was raised by several hon. Members whether other members of E.L.D.O. were carrying out their own national space programmes. The answer is that they are, but the amount of work that they can afford individually is not very great, and I do not think that it poses any threat to E.L.D.O. as a whole. During the interim period the work of member countries for E.L.D.O. is being undertaken at their own risk, but subject to repayment from E.L.D.O. when it comes into being.

I have dealt at some length with the Supplementary Estimate before the Committee, and also with the subject which most interests hon. Members—that of E.L.D.O. I hope that, as a result of what I have told the Committee, it will approved the Supplementary Estimate.

Question put and agreed to.

Resolved, That a Supplementary sum, not exceeding £13,750,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1963, for the salaries and expenses of the Ministry of Aviation for the administration of supply (including research, development and inspection), and of civil aviation; for contributions to two international organisations, a grant in aid, a conditional grant, and sundry other services.