HC Deb 17 May 1988 vol 133 cc900-21

10.12

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. John Butcher)

I beg to move, That this House takes note of European Community Documents Nos. 9454/87 and 5616/88 on the Joint Research Centre and 10845/86 on EUREKA and Community Science and Technology; and supports the Government's aims of raising the quality and relevance of the work at the Joint Research Centre and of using EUREKA to help British industry become more competitive in world markets.

Mr. Nigel Spearing (Newham, South)

On a point of order, Mr. Speaker. The motion refers to European Community document No. 5616/88. The Scrutiny Committee has not looked at that document, which recently arrived at Whitehall. The explanatory memorandum was issued within the past two or three days. Had the Scrutiny Committee been able to see the document last Wednesday it might well have concluded that this matter did not materially affect the course of the debate, but the debate on the document occurs a little too soon. Perhaps the Minister will comment on that and on the timetable of the debate in relation to the decision in Brussels, with which it may well be connected.

Mr. Alan Haselhurst (Saffron Walden)

Further to the point of order, Mr. Speaker. I take the point made by the hon. Member for Newham, South (Mr. Spearing). As a member of the Select Committee on European Legislation, I should like to raise a similar matter in connection with this document. There is at least one other document which the Scrutiny Committee has recommended should be considered by the House—that on the mutual recognition of higher education diplomas. That matter will be decided within a short time by the European Council and has been recommended for debate, yet we have not been given the opportunity to discuss it. This seems to be an odd juxtaposition of business.

Mr. Speaker

I am sure that the Minister has heard what has been said. The motion is in order.

Mr. Butcher

It may be helpful if I deal immediately with the matter raised by the hon. Member for Newham, South (Mr. Spearing) before going into the main body of my speech.

European Community documents Nos. 9454/87 and 5616/88 deal with the Joint Research Centre. The first document forms the original basis for the debate on the JRC. I am aware that the second document, 5616/88, has not yet been considered by the European Legislation Committee. I apologise for the fact that we have not given the Committee time to give us the benefit of its advice on this second document, which contains slightly amended proposals on the JRC. It was only recently provided by the Commission. After careful consideration, we did not consider that it merited postponement of the debate, in view of the pressure on the Parliamentary timetable and, more important, so that we could have the view of the House well in advance of the next Research Council meeting, which will be on 29 June, when further negotiations are scheduled.

We shall be delighted to receive any further observations of the Committee well in advance of that date, if that is its wish. The House has exercised its right in the highest form by debating these two issues this evening. I assure the hon. Member for Newham, South that my hon. Friends and I will carefully examine the record of this evening's exchanges. We will find it helpful to have that in advance of our negotiations on 29 June.

Mr. Haselhurst

I am grateful for what my hon. Friend has said, but he will understand the perplexity of members of the European Legislation Committee when there is uneven treatment by the Government of measures that are put forward. We are not ungrateful for the fact that the House has been given the opportunity to discuss this matter, but it is odd that it should be discussed before the Select Committee has seen the document, especially when there are the measures to which I referred on a point of order which we recommended for debate but which have not been considered.

Mr. Butcher

I shall draw to the attention of my right hon. Friend in another Department the subject matter on which my hon. Friend would like a debate. However, as I said in my response to the hon. Member for Newham, South (Mr. Spearing), there was a delay in the documents coming from the Commission. My right hon. Friend the Chancellor of the Duchy of Lancaster explained the complication and the difficulties of the time table in a letter to the Committee. I readily conceded that under more ideal circumstances this should not happen, and we will take into account the views expressed for by the House. As requested, we have supplied the day for the debate. I hope the House will consider that I have observed the courtesies in that explanation to the hon. Gentleman and that I can now proceed to explain what these two issues are all about.

Mr. William Cash (Stafford)

I am also a member of the Select Committee on European Legislation. Although we understand the position as expressed by my hon. Friend, the fact remains that, as we move nearer to the implementation of the internal market, with the increased use of article 100A and the accelerated procedure that that must involve, there will clearly be a greater need for closer observation of the requirements that have been laid down by resolution of the House. Further, there is a strong case for the changes in the terms of reference of the Committee to ensure that, in the avant-project stage,. there is greater opportunity for consideration of those matters that cannot be met exclusively by other Parliaments. The Committee needs to be fully involved at an earlier stage. I hope my hon. Friend will accept that as a short interruption, but one that I regard as highly important.

Mr. Butcher

My hon. Friend has made a valid point. I do not disagree with a word of what he has said. There is the additional factor of the sheer volume of measures, directives and papers that are now emerging. This means that all Whitehall Departments must be vigilant in ensuring that the Scrutiny Committee and, if it so recommends, the House have ample opportunities to look at those well in advance, if necessary, of decisions being made.

As I explained earlier, we are dealing with two issues tonight which bring together two very different ventures which in some ways characterise the old and the new approaches to European collaboration in research and development. What both have in common is that they need to remain flexible and attuned to Europe's needs. It is illuminating to compare and contrast the two.

The first is the European Community's Joint Research Centre. It is the Community's own public laboratory, financed by the Community member states, with the European Commission bearing responsibility for its overall management. Long-established, it seems increasingly to have lost its way and is now failing to respond to the Community's needs. The Commission's proposals seek to correct that state of affairs.

EUREKA, on the other hand, is a very much newer and different venture. It brings together European industrial partners, both from within the Community and outside. It avoids bureaucratic central control. Responsibility for initiatives rests with the industrial participants themselves and flexibility of response is very much the keynote of its success. The Commission document addresses the specific aspect of co-operation between EUREKA and the European Community.

The JRC is a considerable undertaking, with four laboratories in different member states of the Community—Ispra in Italy, Karlsruhe in the Federal Republic of Germany, Geel in Belgium, and Petten in the Netherlands.

The JRC's last four-year research programme, covering the years 1984 to 1987, showed a total staff complement of 2,260, of whom about three quarters were at the largest laboratory at Ispra and with a central management team in Brussels. Total expenditure was some 700 million ecu, roughly 26 per cent. of the Community's total R and D expenditure at that time.

It is not possible to understand the problems that we are facing at the JRC today without going a little further back into its history. It was established in 1957 for the joint conduct in the European Community of nuclear research for peaceful purposes. In the 1950s nuclear power was young science and the many important subsequent developments in the safe generation of nuclear energy were still in the future. By the late 1980s the nuclear industry is, by any standards, mature and the nuclear research community in all countries has developed with it.

At the JRC, however, one might be forgiven for thinking that time has stood still. It is true that the range of its activities has widened, but as recently as the period 1984 to 1987, 60 per cent. of the JRC's research programme remained in nuclear fission and reactor studies, with a further 7 per cent. concerned with nuclear fusion. Non-nuclear energy studies accounted for a further 6 per cent. Some 14 per cent. was concentrated on the environment and only another 14 per cent. was devoted to research into industrial technologies.

In short, the JRC has not diversified its activities as have comparable public laboratories in the United Kingdom and elsewhere. It has not stayed in step with the rest of the Community's R and D effort, which is directed ever more to improving the competitive position of European industry.

That is not acceptable for what, under the Commission's proposal, amounts to nearly 1 billion ecu of expenditure—or £700 million—at the JRC between 1988 and 1991. We are, therefore, looking to the JRC to earn an increasing share of its expenditure from external customers and to accomplish more from the still substantial financial resources that would continue to be provided by the Community's framework programme. Despite growth in external earnings, those resources are expected to amount to about 700 million ecu—£500 million—or some 13 per cent. of the framework programme. Only the ESPRIT programme of 1.6 million ecu is larger. The United Kingdom has been outspoken in its criticisms and in pointing out that this unhappy situation cannot continue, and we are now far from alone in making that judgment.

Last year a panel of distinguished European industrialists prepared a report which was sharply critical of the JRC. They advocated major reform. They urged faster movement towards a larger proportion of external contracts for customers outside the Commission. Other Community member states have similarly stressed the need and the Joint Research Centre's own board of governors—which is at present more an advisory body than a governing board in the true sense.

I am glad to say that in its proposal the Commission faces the need for change. It provides a good basis for further discussion, even though it does not go as far as we believe is required. Above all, we need to make faster progress and to see a greater sense of urgency on the Commission's part.

We accept that change at the JRC cannot happen overnight, but the problems have been allowed to slip for too long. Our public laboratories in this country started long ago to adopt a more commercial approach to their work. The JRC has to face change which may be more harsh than if it had been tackled earlier. Now is the moment when the JRC must be given clear guidelines for the future.

The Commission has a key responsibility. The Single European Act highlighted its role in the management of the Community's joint R and D effort. It should make no mistake. The JRC, representing such a large proportion of that total effort, will demonstrate whether or not it is prepared to discharge that responsibility effectively.

It is our intention to work rapidly towards the conclusion of an agreement with the Commission, the European Parliament and other member states which will set the targets for a Joint Research Centre that will increasingly show real vitality and responsiveness to customers' needs.

We shall expect the Joint Research Centre to go after more demanding targets for growth in external contracts and to accept tighter financial targets overall. We are looking for a target that by 1991 at least 20 per cent. of the JRC's turnover will come from work for public or private customers external to the Commission. This is a demanding target, but not an unreasonable one. Only in this way can we be sure that the stills at the JRC will be more widely tested as well as becoming more widely available.

We shall expect clear-cut principles governing the JRC"s relationship to the customers for its work. These customers must include the various directorates general of the European Commission, which must be free to turn to laboratories other than the JRC if they consider their research needs would be better met elsewhere.

We shall expect a more rapid turnover of staff. Some members of staff may wish to leave. New blood will be required as well. The JRC must have the right staff with the right disciplines. Its staff costs must come down.

We shall expect the JRC management to be given clearer responsibilities, to pay more heed to the advice of customers and experts from Community member states, and to demonstrate the ability to improve the quality of JRC research in areas where it has been deficient.

We shall expect the executive role of the board of management to be strengthened too.

Mr. Tam Dalyell (Linlithgow)

As a member of the indirectly elected European Parliament Budget Committee who on several occasions has been to Ispra, may I ask whether the Minister agrees that the root of the matter is Italian law and all its difficulties? The Minister says that we must have a turnover. It is difficult to get any kind of turnover once one accepts that Italian law operates, at any rate in relation to local employees. Having tried, as a Member of the European Parliament, to negotiate with the Italian trade unions, let me say that it is extremely difficult to get things changed as the Minister is suggesting.

Mr. Butcher

If tonight we were looking for a model of the sort of operation and apparatus that we should like to see, we need not go further than an establishment not too far from the constituencies of the hon. Members for Linlithgow (Mr. Dalyell) and for Motherwell, South (Dr. Bray)—the National Engineering Laboratory. It and other research establishments have responded positively to the freer movement that is now taking place in engineering disciplines. They are responding to the market, looking for external contracts and are being successful.

I do not wish to go into the question of Italian practices. On many occasions we have debated Spanish practices. The question of employment conditions in Italy as they affect research-based workers must be addressed within the new disciplines that we are putting before the House tonight. In rehearsing our negotiating stance, those who will pursue the negotiations are aware of these questions. Perhaps they do not have such vivid experience as the hon. Gentleman, but I assure him that his point will not be lost on those who speak for us in the third week of June.

The United Kingdom wants to see in the JRC a modern, worthwhile, scientific institution. We want to see relevant research programmes, effective management, and an efficient operation. I hope that this will not be the last chance to get it.

EUREKA is an initiative presenting unique opportunities and challenges to British and European industry, as I shall briefly explain to the House. Established in 1985, with considerable United Kingdom influence, EUREKA's goal is to help Europe compete with the rest of the world and to win markets for advanced technology goods and services. This can be achieved only by strengthening European and United Kingdom industrial productivity and competitiveness, and by exploiting the single market as a springboard for worldwide sales. EUREKA'S purpose, therefore, is to foster and facilitate pan-European collaboration in high-risk, technical projects. But the choice of projects is left to industry—the so-called "bottom-up" approach.

Fostering projects does not create wealth. Profits come only from successful exploitation in the market place. EUREKA aims at achieving that outcome through a flexible, collaborative framework within the 19 member countries. The driving force comes from industry, with national Administrations and the Commission playing an important role, making sure that the economic conditions are right and that the European market is ready for exploitation.

What does EUREKA provide in the way of incentives for industry to take up the challenge of pan-European collaboration? First, it provides a network of national EUREKA offices for bringing projects and partners together. Secondly, and most important, it provides supportive measures. Put simply, these are steps taken by Governments towards improving a project's commercial prospects; for example, the adoption of a new common standard or regulatory measure. Lastly, EUREKA offers political commitment from all 19 member countries and the Commission, which is a member in its own right, to removing obstacles to collaboration, and ultimately commercial exploitation.

The real hallmark of EUREKA is the nature of its projects, which are industry led and market driven. Participants are free to manage them as they wish with the minimum of red tape. The projects can be in any area of advanced technology and can cover the full spectrum of research and development. There is no central bureaucracy for the participants to deal with, no single pool of funding with conditions attached that the participants must meet, no preconceived strategies or limitations imposed on them, no prescribed EUREKA contract restricting their freedom to negotiate, and no regulations on the way participants establish and run their projects.

I have already said that EUREKA is not simply a funding mechanism. Firms wishing to make their own private financial arrangements are free to participate in and benefit from EUREKA, just as much as those being publicly funded by their national Governments. Each member country is free to make its own funding provisions for her national participants.

This, then, is the theory of EUREKA in outline. But is it working? The answer so far is clearly yes, for there are now more than 160 agreed projects, involving a total estimated investment cost of nearly £3 billion. Most projects have a duration spanning two to five years. Most of them are therefore still at the early stages, but the signs already point to these projects having a major impact in the future. Just over half these projects involve estimated costs of under £7 million. In another third, project costs lie between £7 million and £35 million, and for the remainder the costs are still bigger, with four projects exceeding a forecast spend of £70 million. Even more pleasingly, British participants are involved in one third, or 56 of these projects, 14 being United Kingdom-led and having an estimated total investment cost of £1.1 billion.

To give the House a flavour of the project mix so far, about 35 per cent. are in information technology, 18 per cent. in robotics and manufacturing, 13 per cent. in biotechnology, 12 per cent. in new materials and the rest mostly cover lasers, energy, telecommunications and the environment. Specific examples involving the United Kingdom are HDTV which is a European competitor to the Japanese and American versions of the next generation of TV for the 1990s, EUROLASER or the application of lasers to industrial production technology, and FAMOS, or new flexible, automated manufacturing systems.

Through that outline description of EUREKA I hope that I have helped the House to understand better what makes EUREKA so special and the reasons why it has a priority role in my Department's research and technology initiative. It ensures that United Kingdom firms form part of a stronger European technological capability through industry-led projects with European partners, and that United Kingdom firms are well placed to take advantage of the completion of the single market.

As the motion states, my Department's aim is to use EUREKA to help British industry become more competitive in world markets. Through EUREKA our innovators can combine strengths and share risks with their counterparts in Europe, free to profit from their undoubted talents and enterprise, through the critical mass and synergy which characterise all EUREKA projects. The rest of Europe is taking up the EUREKA challenge, and British firms must do the same if they are not to miss the boat.

Mr. John Marshall (Hendon, South)

Does my hon. Friend accept that, in addition to the advantages that he has enumerated, there is evidence from those who have attended debates in the European Parliament, as I have done, of the coming together, perhaps for the first time., of our parliamentary colleagues in the European Parliament and ourselves in looking to opportunities in the regions and in our constituencies? Collaboration between European and Westminster parliamentarians can provide the basis for an active role m furthering the process that my hon. Friend has been outlining tonight.

Mr. Butcher

My hon. Friend makes an excellent point. The additional advantage that accrues to these projects is that they extend outside the 12 or 13 countries within the Community.

I know that our colleagues in the House who have strong connections with Europe have mainly become great supporters of EUREKA, not least because at the beginning it was seen as a counterbalance to the growing strength of American research and development work in certain key technologies. It is to the credit of those who saw EUREKA as a major opportunity—I see my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie) here today—that the programme has moved so fast and so many excellent projects have been brought forward already.

From what I have said, the House will be clear that EUREKA is quite different from other collaborative programmes, such as Community research and development, of which the JRC is a part. EUREKA is not in competition with these other programmes. It complements them and provides a major route for exploiting the pool of raw technology coming through from these other programmes. This applies particularly to the exploitation of the fruits of the Community's research programmes, which point leads me to the third document, 10845/86, concerning links between EUREKA and Community science and technology.

The Government's view is that these links will become clearer through following the case-by-case approach, as the Research Council concluded in December 1986. Since then, there has been very little progress. However, l am pleased to inform the House that, following the most recent meeting of the Research Council on 11 April 1988, the Commission will be bringing forward new proposals for clarifying these matters.

Mr. Dalyell

What, in the Government's view, is the reason for the delay since 1986?

Mr. Butcher

The various partners have been anxious that the EUREKA programme should be complementary to other programmes. There has been a continuing discussion about the relationship of ESPRIT, BRITE and other aspects of the framework programme. If there has been crab-like progress in the interim, that is because Ministers from different countries may have wanted value for money and non-duplication of resources. That is my assessment of one of the major factors. The Government's view is that these links will become clearer by following the case-by-case approach. There seems to be no dissension about the fact that that process has served us well.

We wish these proposals to recognise that EUREKA is indeed a natural route for exploiting the results of Community R and D, and also that some of the R and D needs identified by work under EUREKA could be more appropriately carried out under a Community programme. The best way forward remains the step-by-step approach that we have advocated from the beginning. Only by close collaboration between projects, EUREKA officials and the Commission can the right decisions be made, consistent with EUREKA's bottom-up philosophy.

In view of what I have said, this debate is most timely. With regard to both the JRC and EUREKA, our basic aims are value for money and to help British industry become more competitive in world markets. I therefore commend the motion to the House.

10.41 pm
Dr. Jeremy Bray (Motherwell, South)

The House is indebted to the Select Committee on European Legislation for juxtaposing these documents. I fully understand its members' complaints about not having had time to consider one of them, but I should have thought that a more justifiable general complaint was that the House was generally far too dilatory about considering the papers that the Select Committee recommends to it. The Committee has certainly made helpful observations about the documents.

We support the Government's intention to tighten up the management of the joint research centres. They need to be more clearly pointed at objectives and integrated with industry. They need to update their range of concerns to bring them into line with those which industry and society face.

However, I find no great contribution in the Government's approach to positive thinking about what the joint research centres should be doing. For instance, if the Government were thinking positively about the jobs that the centres need to do, their thinking could not be encompassed by the present framework of the joint research centres.

Let us consider one piece of work that should clearly be done nowadays on a European basis: the maintaining of absolute standards of mass, length, time and so on. Historically, that has been perhaps the principal mission of the National Physical Laboratory in this country. We devote an inadequate and incorrectly scaled effort to that area. It is not justifiable to do it on a national basis. It becomes expensive if one gets involved in hydrogen masers, and so on, which are of great interest for radio telescopes, radio astronomy work, and co-ordinating and synchronising signals across the diameter of the earth and out to the satellites. It is not exactly the sort of thing that is done on a tiny budget to measured time standards in the National Physical Laboratory.

If Europe as a whole is to do sensible work on the management of time standards, it must encompass the frontiers of research on the one hand and working down through the different levels of application to the grass roots implementation of standard services to industry on the other. The National Physical Laboratory used to do that. It is beyond the scope of the budget it can hope for today, but it would be reasonable to ask the joint research centres to do it, although I am not thinking necessarily of any existing joint research centres. It might be sensible to enlarge the framework of scientific and technical activity which is covered by the joint research centres.

If the Government were willing to put positive thinking into the work programme, they would find it much easier to deal with some of the intractable problems which I am sure they are faced with in ESPRIT and elsewhere in the JRCs. If the Government appear to be on the side of the people with whom they are working, and if they share their technical interest and the view that they have an essential contribution to make to industry and society, it is more likely that those people will be on the Government's side and will be willing to accept the major changes which are needed in their work and organisation.

I ask the Government, not just from a British point of view, to consider the traditions of the great national laboratories in Germany and France and ask what benefits we can gain from the Centre National de la Recherche Scientifique in France and the Max Planck institutes in Germany. The Government should ask how the work of the JRCs fits into the wider context of what Europe should be covering in science. I can well understand the Government and the Commission running a mile at the thought of subjecting a wider range of scientific activity to the present management and structure of the JRCs, but that is not the necessary end point of the freer thinking which the Government should initiate.

To put the different parts of the picture into a pattern, on EUREKA it is bottom up, industry-led and market-driven, but basically it is a familiar pattern of technological support to the many schemes which we have had in this country. Those who know how to operate them know how to put in applications; they know the procedure in departments and they get their proposals through. Approval is not automatic, nor is there an overall, coherent industrial programme of application lying behind it.

The Government may say that its very strength is that it is intended to be industry-led, market-driven, bottom up and all that, but it can result in an extraordinary jumble of variable-quality work without necessarily achieving the increase in technological competitiveness which we seek, say, in electronic components or in mechanical engineering so that Europe can fully match the best that is available in the United States in professional equipment or in Japan in consumer products.

The Select Committee on European Legislation and the European Commission point us to the need for examining the relationship between EUREKA and the collaborative programme of the European Community generally—ESPRIT, RACE, BRITE and so on. In this, there is a quite different approach in that there is, for example in RACE a clear perception not only of the sort of technology developments that will take place in telecommunications, but of the developments that will take place in standards and applications. Clear developments are already under way in important software areas, and to their credit the Government support and recognise those in other ways.

BRITE takes traditional technologies and industries and begins to explore the immense potential for the upgrading of the technology used in many rather down-to-earth industries. ESPRIT is reaching a significant volume of activity and should offer the prospects of major initiatives. I hope that those initiatives will be followed up by industry.

The joint research centres are being looked at rather narrowly as a revamping of a particular research organisation which is perhaps rather dead on its feet. EUREKA is very much a first come, first served programme that is industry-led and market-driven, but it has no special industrial logic. Then there are the specific technology area of programmes such as ESPRIT, RACE, BRITE and so on. They have industrial logic and a clear technology strategy.

The reason for a certain sense of dissatisfaction about the overall pattern in Britain is that the Government do not offer any overall strategy for industrial and technological development. They rather positively turn their face against that. It is not simply that no clear picture is emerging in Britain for developments for broad band, space fusion and so on, but that the basic underlying logic is not clear. The Government follow the general principle of non-intervention and say that the free market must provide.

In the early days after 1979, the Government started to develop a clear understanding that there are some things that industry could not do well or could not do at all and on which the Government needed to take a positive initiative. I attribute a good deal of that initiative to the influence of Duncan Davies who, as chief scientist in the Department of Trade and industry, had a good deal of influence upon Lord Keith Joseph. I understand that directly from Mr. Davies. That pattern has not been carried through to the enterprise initiative or whatever it is called—the one in which the arrow comes up one's backside—in the Department of Trade and Industry.

Mr. Rhodri Morgan (Cardiff, West)

It is a harpoon.

Dr. Bray

I am grateful for that explanation.

We urgently need a statement about the Government's overall science and technology policy. That cannot wait until the next election. It must have urgent attention or we will lose desperately important time. The statement should embrace a Government reply to the strategy document of the Advisory Board for the Research Councils and the practical, down-to-earth concerns about the supply of scientists and engineers and the support developments needed in the education system and the school curriculum.

Once in place, that overall strategic plan for the application of science and technology would enable us to make a positive contribution to European science and technology. It would also enable us to take a positive approach to the joint research councils and build them up into the genuine European science framework that Europe justifies and requires. It would enable us to integrate EUREKA with the much more positively mission-orientated approach offered by the other programmes. It could begin to get into Europe as a whole the sort of technological initiatives that we badly need and that our European partners, in their own interests, would like to join us in furthering.

10.55 pm
Sir Geoffrey Pattie (Chertsey and Walton)

I wish to say a few words about the joint research centres, particularly the centre at Ispra.

The commentary by my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs on the documents represents a reasonable behind-the-scenes achievement by the Government in their negotiations, but it shows that there is still a great deal more work to be done. Bearing in mind the difficulties to be surmounted, particularly the obdurate nature of the relevant commissioner, I do not want to underestimate the magnitude of the Government's task. However, the performance of the establishment at Ispra in recent years has been nothing less than a scandal because it has conducted a series of irrelevant programmes. During the time that I was involved in the Department of Trade and Industry, I could never find anyone in any Government or in the appropriate circles in Brussels who could say what the organisation was supposed to be doing and to try to change its tack proved to be absolutely impossible.

The panel of industrialists referred to in the Government's commentary reported on the future role of the joint research centre and recommended a much larger customer orientation and a re-structuring of the largest JRC establishment at Ispra in Italy. In its proposals the Commission recognise the need for change and have taken account of some of the principles set out by the Panel. However, a large part of the customer orientation will consist of work for other Commission Directorates. We see here the sadness and reservation in the words of the officials drafting the text—for example, that the Commission has taken account only of some of the principles set out by the Panel. The document continues: Work for genuinely external parties is expected to increase from about 10 per cent. at present to only 14 per cent. by 1991. As the Department fairly says: In negotiations so far we have been pressing for this target to be raised to 20 per cent.

I pay tribute to what the Government have been able to achieve so far, but the task is enormous. We should all like to see the various programmes improved, but, in view of waste of this order—hundreds of millions of units of account—it becomes scandalous. The hon. Member for Motherwell, South (Dr. Bray) mentioned his experience in dealing with the Italian trade unions. As he well knows, that is all part of the solidity and intractability of the situation. The people involved, whether Italian nationals or not, are completely locked into a series of programmes. It is verging on the obscene at a time when there is great pressure on the budget and we would like to see money released and used for other purposes.

I hope that the steps reported to the House tonight for a new structure for all the joint research centres will lead to an improvement and a dramatic change at Ispra. My hon. Friend the Minister, in his introductory remarks, mentioned the problems that even the board of governors has experienced. I know, from talking to the chief scientific adviser to the Government, that the governors have a great advisory role. They can submit a report and make suggestions, yet the joint research centre at Ispra carries on exactly as before.

All those things must change. I urge my right hon. and hon. Friends to maintain the pressure. A series of first steps have been reported to us tonight, largely taken as a result of the pressure that this country and others have brought to bear. In the time that I represented the United Kingdom at the Research Council, I did not find another Minister representing any of our partners—it was not a case of Britain being isolated in that respect—who know what Ispra was doing. Therefore, there was total unanimity about that.

I hope that my hon. Friend the Minister will maintain the pressure and regard what is being reported to the House tonight as the start. I welcome what my hon. Friend has told us tonight about EUREKA. The United Kingdom played a full part in getting that series of programmes into a relevant format. Department of Industry and Foreign Office officials worked extremely hard on that and continue to do so. I believe that the Commission has never particularly liked or welcomed EUREKA programmes. They are a little maverick and involve awkward people from outside the Community. Although the memorandum has some pleasant things to say about EUREKA, in the overlap sections there are other comments about the various programmes that are duplicated—as is their tendency.

I add those comments about EUREKA while welcoming what my hon. Friend said about the programme. I urge him to keep up the pressure.

11.1 pm

Mr. Malcolm Bruce (Gordon)

There are obviously two aspects to the motion before the House. I hope that it is acceptable for me to qualify my comments by introducing a slightly jarring note about the clear general acceptance of criticism of the system, the need for reform and for the British Government to take a positive role in pushing for that reform. I do not dispute the need for that. However, the Government are not formulating a clear direction where they believe things should be going. I am sure that the Minister is aware that there is a lack of confidence in the Government's domestic approach to research and science in general. Against that background, there is legitimate suspicion about the Government's objective in terms of the pressure that they are bringing to bear in the Community.

That is borne out in the motion. As has been accepted, the joint research centre needs to be reformed, targeted and given specific direction. The explanatory memorandum states: The JRC's activities are relevant to the creation of the single market"— something that will concern us all— to the improvement of the Community's industrial competitiveness, to the protection of the environment and to the enhancement of safety. I wonder why the Government's motion refers only to helping British industry become more competitive in world markets and excludes the relevant references to other factors. Is that because the Government have decided that research projects have no business doing anything other than promoting competitiveness?

I am not disputing the desire for competitiveness. However, I believe that the other objectives are also important, relevant and worth supporting. I should like the Minister to tell us whether he agrees with me, or whether the exclusion of those factors from the motion is significant.

Reference has been made to the need to push research according to market or near-market considerations. It has been obvious for a long time that the Government have a warmth for EUREKA rather than for the joint research centre for that reason. That is perhaps understandable and consistent. I have no objection to attempts aimed at ensuring commercial relevance and research taking account of its applicability and commercial accountability. However, does the Minister accept that too much pressure in those areas can prejudice useful follow-up research?

That aspect is of particular concern to the scientific community when it sees that pure research is being squeezed out of the system at the same time. My understanding is that researchers complain that they are prevented from following up opportunities which may lead in interesting directions because they do not have immediate commercial relevance. I am worried that the general thrust of the Government's contribution seems to militate against such work.

Will the Minister tell the House how he believes the EUREKA projects can usefully be assessed and evaluated? Reading the documents, one sees figures on the number of projects and how much money is involved, but it is not clear how useful those projects are. Reference has been made to duplication and overlap, but, leaving that aside, is there not a method for evaluating how valuable research has been and what kind of results have been produced?

In the Alvey programme, the Government have gone for fairly rigorous testing and have subsequently ordered cuts. It would be interesting to know whether the Government have any constructive proposals for evaluation.

Arising from that—perhaps this is putting the matter too simply, but the Minister will know about this more than I do—fears have been expressed about instances where two large companies, which operate from different locations in two European countries, get together and qualify for a research project that really does not provide anything new or dynamic. If so, the present system of evaluation is neither useful nor valid. The Government could make some valid input by making constructive proposals for dealing with such situations.

Will the Minister tell the House how smaller companies can cut themselves in? If the situation is as I have described, it is clear that larger companies with larger research organisations, and having a greater degree of sophistication, find out fairly rapidly how to milk the system, whereas small companies, which do not have the same guidance and opportunities, are shut out. I can only say in a very mundane way that, having experience of working for small or medium-size companies in my own area—in the days when they existed—which sought access to funding under European or British Government innovation projects, it is apparent that the sophisticated companies corner the market and that small companies are squeezed out. It would be nice to see the Government pressing for a role for small companies and helping to secure a greater share of relevant funding.

I have asked one or two quesions which I hope will be considered relevant. I believe that if this debate is to follow through constructively, the Government—I do not wish to stray beyond the bounds of order—must give us a clear idea of their own science and research policy, over and above trying to ensure near market or market commercial accountability.

Many people in this country are proud of the fact that Britain has a good research record, but they are worried that our application of that research is not always as good as it could be and that the pressure applied by the Government will not solve the problem. They believe that applying that pressure will result in the quality and volume of pure research being squeezed, without any noticeable increase in the successful application of research to the country's advantage.

I look forward to the Minister's replies with interest. I hope that the Government will steer future debates more clearly, showing that their lead is not a purely negative one about waste and duplication, but a slightly more positive one on accountability, how small businesses are becoming involved, what our clear objectives are and how we can ensure that the EC and the wider European interests gel on track in a coherent direction. It would be nice to see the Government giving a lead rather than just carping about the cost of what is being produced.

11.10 pm
Mr. Tam Dalyell (Linlithgow)

The Government inherited one almighty mess in relation to Ispra. The whole Ispra project started on the wrong foot, because it never had any clear scientific object or mission. It was a sop to the Italians for not getting the research facilities to which they thought they were entitled. It was a national partition of the European cake. That is almost the worst possible basis for starting any kind of scientific union.

In brackets, I might say something pretty awful. We can thank our lucky stars that, thanks to Commissioner Brunner and to a number of hon. Members of all parities, Conservative and Labour—I and colleagues played our part in this—we prevented the Joint European Torus project from going to Ispra. I say here and now that if fusion had gone to Ispra, the kind of advances that have been made at Culham simply would not have taken place. Commissioner Brunner was right to say that it should be either at a German site or in Britain, where there is a determined engineering capacity.

I listened to Italians such as Senator Noë and Mr. de la Briotta in the European Parliament going on and on about Ispra. It was deeply unsatisfactory, but, having said that, I am sanguine as to what can be done about it. I do not say that I have news for the Minister—I think that he understands the position full well—but there are such things as contracts. That is why I interrupted in relation to Italian law. The Italians have cast-iron contracts. The Milanese lawyers have done a wonderful job for them, and the Minister will find that they are contracts for life. Unless something can be done about all this, root and branch, I do not see what progress can be made and what turnover of people can possibly be achieved.

My information is rather secondhand. It used to be firsthand. Before the debate I made inquiries, and I understand that things have not changed greatly from the old days. What will be done about the whole basis of contract, because no progress will be make at Ispra unless something is done about it?

Incidentally, that may be part of the difference between Ispra on the one hand and Karlsruhe on the other, which, from the occasional visit, I thought was rather good, and perhaps Petten and Geel. Do the same gloomy predictions occur in the other three?

I ask, as the hon. Member for Gordon (Mr. Bruce) asked, what is their function and what does the Minister see as their object? They were doing what seemed to be quite good work on sunlight and heating, but it was pretty small scale and I am told that better work is done elsewhere. The right hon. Member for Chertsey and Walton (Sir G. Pattie) has recent ministerial experience, and he asked the same question.

What is now seen as a sensible objective? Is there any future in some joint European effort on radioactive decommissioning, radioactive waste management and, in particular, super-compaction of solid waste? The Government have not said that that is best done at Ispra. Incidentally, it may be done better at Dounreay. Nevertheless, with this type of objective, it is sensible to ask whether it should be done on a European scale. I should like more clearly to hear what ideas the Government have on the constructive things that Ispra, Petten, Geel and Karlsruhe can do.

Paragraph 14 of document 9454/87 states: The United Kingdom would like closer links between JRC programmes and other Community programmes in similar areas. The proposals for enhanced powers for the Board of Governors are welcome, though the details have yet to be clarified and it is necessary that other structural changes at the JRC should operate in the interests of clear management responsibility.

As has been said, the board of governors does not have a great say. I wonder what is really meant by other Community programmes in similar areas".

Can flesh and blood be put on those words? What exactly are we getting at? My hon. Friend the Member for Cardiff, West (Mr. Morgan) wishes to speak, and I must allow time for the Minister to reply to the questions that have been asked of him.

11.16 pm
Mr. Rhodri Morgan (Cardiff, West)

I shall raise two points in relation to EUREKA. The Minister described the EUREKA document as clearly showing that EUREKA is successful on two grounds. He said that we are getting our share of it, that it does not follow bureaucratic principles, that it has the solid, good, old-fashioned virtue of a step-by-step approach and no red tape, and that it is bottoms-up. They were all good, sound phrases, borrowed from a Daily Express editorial of 30 years ago. They do not demonstrate whether EUREKA will perform in terms of the objectives of an industrial and technological policy of reducing the gap that has emerged between Japan and, to a lesser extent, the United States of America and the disparate countries of Europe, because EUREKA covers several countries outside the European Community.

We want to know how EUREKA will achieve objectives, not merely that it will not fall into the trap of over-bureaucratisation that we can see in Ispra and, to a much lesser extent, in the administrative systems that the Commission must impose on directly funded research programmes such as ESPRIT, BRITE, RACE, and so on. We want an assurance that it will not fall into those traps and that it will achieve something. The right question is not whether we are getting a share of EUREKA but whether it will produce results. Surely the dangers are just the same as those with RACE, ESPRIT, BRITE and other directly funded Commission programmes. They do extremely little for regions, small firms and the encouragement of enterprise.

For too long we have suffered—EUREKA is likely to suffer in the same way—from being dominated by large firms. I refer to the national champions—the firms that are in with the powers-that-be. In this country, in electronics it is GEC and, occasionally, ICL and Plessey. In Germany it is Siemens, and in Holland it is Philips. Those firms already have the cash, and they are already well in with their Governments. They get much public sector funding, and they have no problems in getting private sector funding. They participate in EUREKA in the same way. Because of the way in which Davignon set up the ESPRIT programme, they were the first firms to get in with ESPRIT.

Ludicrously and paradoxically, firms with enormous cash mountains—such as GEC with well over £1 billion— are given cash. Apparently, such firms do not have enough cash to carry out research and development in collaboration with industrial partners. That is nonsense. The firms which have a desire to take risks—unlike, say, GEC—and which do not have cash should be given cash. Firms such as GEC with plenty of cash should be encouraged to take risks.

EUREKA operates on a national champion to national champion basis. It says, "GEC will please talk to Siemens. Philips will please talk to Thomson. Olivetti will please to talk to Philips and, preferably, Thomson." Cash-rich firms which wish primarily to protect their market share in Europe, rather than to catch up with the Japanese in world markets, will inevitably be the participants in EUREKA. They are the powers-that-be. They get in first. They get the invitations to the big conferences in the Queen Elizabeth II conference centre and in Hanover. They will dominate—not the small firms in the regions and the firms willing to take risks and make the breakthroughs.

What would happen if the Government had a science and technology policy which they tried to relate to EUREKA and the other European sources of public funds to encourage research and development? The Government may want to look beyond the silicon chip to the next generation of materials, such as gallium arsenide, which can do the job much faster. They may try to link the University Grants Committee funding for pre-competitive research and development, which is carried out with encouragement from ESPRIT, with the collaboration at industrial level on development rather than research, through EUREKA. They may also want to look at those firms undertaking significant work.

Over the past year, firms such as GEC and Plessey have been engaged in a massive quarrel over whether Britain will have a modern properly funded gallium arsenide foundry. The whole idea has been squashed, despite enormous efforts by the Department of Trade and Industry to get the two companies to work together. Smaller firms still at the venture capital stage, such as those involved in plasma technology in Bristol and electro-tech instrument development in south Wales, have made great efforts. In collaboration with University college, Cardiff and the university of Wales institute of science and technology in Cardiff, they are getting on with the job and doing the type of work on which the Minister would like to be able to report to the House. EUREKA and other Community programmes are intended to assist in that work.

Small firms which are still in the venture capital stage and universities such as Cardiff, which do not get big favours from the UGC and are outside the main stream of collaborative research, are willing to take risks and to reduce the gap in micro-electronic technology between Britain and Japan. Those firms are most unlikely to get funds from EUREKA on a big scale and to do well out of ESPRIT. They do not have the clout with the powers-that-be.

How will the Minister correct the fundamental flaw which has occurred with ESPRIT, RACE and others and which is likely to occur with EUREKA? The small firms that are genuinely not averse to risk and the universities that are not in the golden triangle are cut out. How will the Minister ensure that the small firms and the universities in the regions get their proper share? This is needed if Britain is to catch up with Japan in science and technology. Jobs should flow from that catching up.

11.24 pm
Mr. Butcher

I thank all those who have spoken in the debate, during which considerable agreement has emerged. I shall do my best, in the time available, to deal with the various requests for information.

The hon. Member for Motherwell, South (Dr. Bray) wished to know the stage that negotiations had reached and where we see our position to be. I am sure that he would not expect me to say in fine detail exactly how we will pursue our objectives, but it is right to restate what we are doing in those negotiations.

The last JRC programme ran out at the end of 1987. An informal discussion on the Commission's proposal for a new programme was held last December at the Research Council, and there was a substantive discussion at the 11 April Research Council. The European Parliament has also examined the proposal, and it should be possible for the Council to reach a common position at its next meeting on 29 June.

The main outstanding issues relate to aspects of management and staffing policy. I shall come in detail to the points made by my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie) and the hon. Members for Cardiff, West (Mr. Morgan) and for Linlithgow (Mr. Dalyell). However, en passant, I say to the hon. Member for Linlithgow that we support his contention that the search for best practice now has to be on a pan-European basis.

If, for example, I am looking for examples of best practice in the higher education institution in engineering, I should look at Aachen. I know that some of the more enlightened engineers in this country see Aachen as a model that has critical mass, expertise, and delivers teaching in volume of the highest quality, but, in addition, it is a major research centre. If the hon. Gentleman decodes some of the remarks made by Ministers from the Dispatch Box in recent months, he may see the beginnings of a policy that we believe will learn from the Aachen experience.

Having said that, we also have to learn from the Ispra experience. The root of the matter has been identified in two speeches tonight as being Italian law operating in favour of local employees. I do not wish to turn this into a political debate, so I shall not go into too much detail about the role of trade unions in Italy. However, at the start of the JRC, the staff conditions of our Commission employees were determined by the Commission, and the trade unions have been resisting the introduction of flexibility. That has not been helpful to the JRC's scientific vitality. We believe that the trade unions, too, are increasingly aware of the need for change. It is primarily for the Commission to tackle this obstruction to scientific change.

The United Kingdom would like agreement on the following changes to JRC's staff conditions: a greater rate of annual turnover of staff, including the entry of younger scientists, with skills appropriate to JRC's future needs; more staffing to be on the basis of secondment to and from national institutions rather than on a permanent basis; a programme of compulsory retirements, which is necessary to achieve those ends; and a reduction of the cost of the JRC on the Community budget. The Commission has produced a working paper on staffing policy. It includes proposals for a reduced number of' permanent staff, reservation of posts for visiting scientists and the transfer of some service staff out of JRC budgets, consistent with the practice elsewhere in the Commission.

The Commission assures us that the necessary flexibility in staffing policy is available under the present legal base of JRC. We are willing to examine the possibilities within the present framework, but we do not rule out the need for a more radical change if pressure is unsatisfactory.

In case Opposition Members think that we are in a draconian gung-ho mood arid are seeking redundancies, I refer them to my opening speech, when I said that we need new blood. Further, without naming sites in the United Kingdom, at our own research establishments we are familiar with the problem of staff who have been in their positions for perhaps a quarter of a century. They are comfortable in their programmes, which have been rolling for a long time, and would bitterly resent the accusation that somehow they should examine how it is that they have been deploying their intellectual resources over this period of time on programmes which perhaps need some adjustment, and perhaps reassignment to other branches within their research establishment.

Ispra is that writ large, but with some peculiarly domestic Italian questions that need resolving. For reasons which I am sure my right hon. Friend the Member for Chertsey and Walton will understand, it is not advisable for me tonight to engage in a tirade against that. I simply state the criteria on which we shall judge the efficacy of the Commission in making its arrangements for its employees. I suspect that there will be consensus among Ministers at the next Council meeting on the sorts of things that we want to see achieved.

Mr. Dalyell

In the New Scientist of 29 October, under the byline of Debora Mackenzie, a table was published showing that 350 staff are between 51 and 55 years of age, that between the ages of 56 and 60 there are just under 200, and that between the ages of 46 and 50 there are 250—I suspect that the table is familiar to the Minister—with just 10 or so between the ages of 21 and 25. Is the age range really as cock-eyed as that?

Mr. Butcher

I do not have immediate access to figures to confirm or deny that point. However, those who have observed the Ispra phenomenon have remarked on the way in which the staff are deployed. I stated earlier that we in the United Kingdom are vividly aware that staffing is top-heavy and that it may be subject to hardening of the arteries in both a metaphorical sense and, perhaps, among many of the staff. However, we are on to that. My right hon. Friend the Member for Chertsey and Walton asked us to keep up the pressure, and of course we shall.

Perhaps this should not have been a debate in which we examined the Government's general domestic research policy, but Opposition Members have tempted me to make one or two comments on that. It is interesting to note that what is going on in Europe in the framework programme and in the EUREKA programme is mirrored by what is happening in the United Kingdom. We have said clearly that, as a Government, observing an industrial sector that is now making healthy profits, it will be for companies to make their own commercial judgments in their own way now that they can luxuriate in investment, and their own R and D decisions.

Given the changed trading conditions—if this is not a strategy, it is a matter for debate, and I believe that it is simply an observation on changed conditions—it is correct for public sector money, whether employed by the Department of Trade and Industry or by the Department of Education and Science, to move upstream and away from near-market exploitation. We have been discussing that very concept tonight. This is not a strategy in the way in which the right hon. Member for Chesterfield (Mr. Benn) would recognise a strategy. However, it is clearly stated in several of the objectives in our White Paper and it is articulated in the pattern of spending which the House can examine carefully, because it has been placed before the House.

We can look, for example, at LINK, to meet the higher education links with outside industry, at EUREKA, at our DTI-sponsored programmes on advanced technologies, on things such as SMART—the small firms merit award for research and technology—at our exceptional projects and at things within sectors such as launch aid. We already have a number of programmes moving forward on key enabling technologies. The IT programeme rolls at £85 million over the next five years, building on Alvey, which was well assessed. Although Alvey has had its critics, any objective evaluation of it will show that it produced the goods and the results. The question now is the one raised by the hon. Member for Cardiff, West: will industry have the sense to exploit those technologies and not simply leave behind another collection of fundamental ideas which others may exploit?

Higher education institutions are participating in EUREKA, as are small and medium-sized enterprises, to a significant extent, so the point that was made in that connection is not lost on us. I hope that there will be an occasion, should the House wish, when we can look more closely at the Government's current emphasis on research and development policy.

My right hon. Friend the Member for Chertsey and Walton suspected that the Commission never liked EUREKA and tended to overstate its overlaps with the Community's own research and development policy. I can only tell my right hon. Friend that he is absolutely right. I did not regard his speech as cynical. I thought that he made an observation on a real phenomenon.

As for the profiles of the programmes within the various sites, at Ispra we have reactor safety, industrial hazards, fusion research, non-nuclear energy, environmental protection and remote sensing. At Karlsruhe they are undertaking research in the nuclear fuel cycle. At Geel in Belgium they are producing nuclear measurements and reference materials. At Petten in the Netherlands they are dealing with reactor studies and high temperature materials. In Brussels there is an administration of 20. That is the central administration and is not to be confused with the administrative function in the REs.

The hon. Member for Linlithgow asked what we wished to see by way of new emphases within those facilities. In my opening remarks I said we felt it regrettable that, for example, the environmental programmes were running at about 14 per cent. Hence much work remains to be done there. We feel that their briefs could be expanded, but we must encourage them to seek custom, and in the first instance that custom will have to take advantage of the expertise that exists in-house. As with operations such as NEL and NPL, what they have in situ will bring along their first customers, but we hope that many of those will be industrial and private sector, although the Commission may put some work to them.

I have referred to small and medium-sized enterprises. It is not true to say that we are talking only about large firms in the programmes. Many small firms are involved in EUREKA, ESPRIT and BRITE. They are involved in at least 40 per cent. of the projects across those programmes.

I was asked about evaluation—about how we are to assess EUREKA—and whether it is simply to be reliant on numbers of projects or the amount spent. The hon. Member for Cardiff, West highlighted a point of crucial importance. In the past, Governments—I am talking generically—have measured success either by the amount spent or by whether those who benefited from projects stated themselves to be content.

If a research or other body has just received a large sum of money, it will be reasonably content. We have had difficulty—as a task of Government generally—in measuring the output of any Whitehall Department's spending. We find it easy to measure input, taking into account the number of staff deployed, the amount of cash and the degree of effort but as soon as one asks what has been achieved, one gets different replies. We are aware of this and my Department is perfecting the science of measuring output against expenditure on the commitment of man and woman years.

It is early days yet for EUREKA. The projects are industry-led and are funded primarily from the private sector. It is up to industry to assess the value, although, in the final analysis, the market will make the assessment, remembering that all the projects are allegedly near-market projects.

I was asked by the hon. Member for Linlithgow what we meant by closer links between the JRC and Community programmes in similar areas. The JRC has activities in materials, environment and energy, and we hope that these will be kept in step with other efforts within the framework programme.

Mr. Dalyell

The Minister has been courteous in answering my questions and I am not complaining, but what about the decommissioning of radioactive waste? Is there a future there?

Mr. Butcher

The short answer must be yes, because it would appear that in several member states this has become a political as well as an industrial question. My personal view is that the search for safer fuels is of equal importance. That does not mean that I shall impose my bias into these arrangements, but the decommissioning question remains, if the House will excuse the metaphor, a live one.

The hon. Member for Gordon (Mr. Bruce) pointed to the lack of confidence in the Government's science policies. My right hon. Friend the Secretary of State for Education and Science told the House of the increase of 15 per cent. in the science Vote since 1979. That is not enough for some scientists. There are wild accusations that we are no longer supporting basic and commercial research, and it is alleged that our sole criterion for supporting research is whether it will achieve a measured result in the market in the short term. That is a wholly unfair allegation. We have shifted the emphasis of science and technology policy in the right direction. If industry in its current state of profitability cannot bring forward appropriate development projects that are near to the market it will not be the Government's fault. We have delivered the framework within which it can do that.

Question put and agreed to.

Resolved, That this House takes note of European Community Documents Nos. 9454/87 and 5616/88 on the Joint Research Centre and 10845/86 on EUREKA and Community Science and Technology; and supports the Government's aims of raising the quality and relevance of the work at the Joint Research Centre and of using EUREKA to help British industry become more competitive in world markets.

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