HC Deb 11 December 1989 vol 163 cc803-19 12.30 am
The Minister for Industry (Mr. Douglas Hogg)

I beg to move, That this House takes note of European Community Document No. 8375/89 and COR 1 and the Supplementary Explanatory Memorandum submitted by the Department of Trade and industry on 22nd November 1989 relating to the Framework Programme of Community research and development activities 1990 to 1994; and supports the Government's view that the Commission's proposals for expenditure need to be more clearly justified before the Programme can be agreed. Despite the late hour, the debate is timely and important as the Research Council is to meet on 15 December and will discuss proposals for a third framework programme for Community research and development for the years 1990–94. I am therefore extremely grateful that I have this opportunity to learn both the views and the concerns of hon. Members. I shall endeavour to highlight the main areas of interest, but I will leave to the end of the debate my response to queries on the more detailed aspects of the proposal.

The first framework programme was for the years 1984–87, and the budget was of 3.75 billion ecu, or £2.5 billion. The second framework covers the years 1987–91 and has a budget of 5.4 billion ecu or £3.6 billion. It is that programme which is now in existence. The Commission is now proposing a programme of significantly expanded research activities in six main areas with a total cost of 7.7 billion ecu, or a programme of about £5.1 billion. Further details are given in the explanatory memorandum before the House. There would be a two-year overlap with the present framework programme.

The origins of the present proposal lie in the review required in the third year of the present programme. The Commission produced a paper on the state of science and technology in Europe. In addition, a report on the operation of the current framework was produced by a review panel of five eminent figures in European science and technology. The Commission concluded that a further five-year programme should be proposed. The framework programme sets out the broad objectives, technical coverage and funding of the main lines of activity. The detail of specific programme proposals would be the subject of subsequent decisions.

The Government have taken a constructive and prominent part in negotiations. Our objective is, if at all possible, to reach agreement on 15 December. We have a number of reservations, some of which are shared by other countries and most of which have been expressed at the past two meetings of the Research Council.

First, the Government were and indeed are not satisfied that the Commission has adequately justified the size and coverage of the new programme. We thought it essential that the proposal was fully supported by adequate technical information and that the Commission demonstrated the added value required for action at Community level. The original proposal was clearly deficient in both these regards.

To correct this lack of detail as to technical goals and purpose, we and other member states have worked with the Commission to produce a completely revised technical annex to the proposal.

I am glad to be able to tell the House that, not least as a result of our efforts, the revised draft decision is now a great deal more satisfactory than it was and broadly accords with out expectations. Thus, the objectives for each area of proposed activity are made clear. It emphasises that Community research and development should concentrate on pre-competitive work and should avoid near-market activities. Support of product development is excluded. The importance of Community research and development in the context of setting European norms and standards is fully recognised. The programme will also include selective feasibility projects to validate such standards.

So far as the technical annex is concerned, only a relatively small number of technical issues remain to be resolved at the Council on 15 December. I can assure the House that I shall press for improvements where we deem them to be necessary. I shall also press for a more detailed breakdown of the proposed financing as between the lines and sublines of the programme. I also favour a larger number of specific programmes than the six originally proposed by the Commission. This is essential for coherent programme management and for satisfactory financial planning.

Mr. Tam Dalyell (Linlithgow)

What are the additions that are proposed?

Mr. Hogg

At the moment there are six programme lines. The problem with having such a limited number of them is that too much is subsumed within them. Therefore, we should like to expand the number of lines. We have in mind 20, but it might be possible to reduce that if the Commission would come to an agreement on a slightly lesser figure. We should be better able to define the exact context of the proposed work within a larger number of lines, and as we hope that each of the lines will have a management committee, it would be better to provide a more coherent system of management than we have. At the moment the programme has 37 lines, but I concede that that is too many.

Mr. Dalyell

What does Mr. Pandolfi think about a national Government interfering to this extent in what he might think is his business? Some of us had the impression at the Royal Society conference on 14 November that the Commission was less than happy about the attitude of the British Government.

Mr. Hogg

I do not think that that is right. We have a great deal of support for increasing the number of lines. I recall clearly, at the last meeting of the Council, the Dutch delegation arguing in favour of 20 lines, and I was able to support what it had in mind. There is considerable support in the Council for expanding the number of lines because it is felt that six lines are too few to reflect accurately the amount of work that is being proposed and does not permit of sufficiently direct and detailed control of that work. We are not isolated in this regard.

A second concern is the nature of the decision to be taken about the funding of the programme after 1992. The current budgetary perspective for the Community under the 1988 inter-institutional agreement runs to 1992. It is essential that any new funding proposals for research and development do not prejudge any arrangements which replace the IIA.

There must therefore be a clear distinction between budgetary resources in the period covered by the present agreement and any new commitments beyond 1992 which must be subject to further decision, once the current IIA has been reviewed in 1992. That further decision will of course have to be unanimous.

By accepting the proposal for a new 1990–94 programme overlapping with the current 1987–91 programme, we are moving towards a series of rolling programmes, themselves subject to a mid-term review. As yet, the Government have not taken a final view on the desirability of continuing rolling programmes. However, it is obvious that they have real managerial and scientific advantages.

Mr. Matthew Taylor (Truro)

I understand that the projected figures would simply carry forward the present spending levels. The Minister has said that such a level of spending would be unacceptable. May we assume, therefore, that there will be reductions in the Commission's research and development budget?

Mr. Hogg

I find it difficult to understand the hon. Gentleman's point. I shall be dealing with funding. If the hon. Gentleman thinks that I have done his question less than justice, when I have done so, I shall certainly give way again and he can make such criticism as he thinks fit.

Another concern is the lack of detail regarding management and evaluation. The Commission has suggested that these details can be resolved later. However, I have been insistent that these important issues should be clarified at the outset. Clear objectives, the procedures for programme management, including the role of member states, procedures for the appraisal of research and development proposals and the evaluation of programme results, together with specific provision for a mid-term evaluation of the whole framework programme, should all be included in the text.

Finally—this is the point that concerns the hon. Member for Truro (Mr. Taylor)—I come to the overall cost of the new framework programme. We have always thought that 7.7 billion ecu is far too high, on grounds of affordability and of programme content. It is this issue which will probably occupy most of Friday.

For the period 1990–92, 3.1 billion ecu is of course still available from the current programme. The present IIA includes a ceiling of 2.7 billion ecu for further work. That would be additional to the 3.1 billion ecu to which I have just referred.

In my view, the figure of 2.7 billion ecu for the period 1990–92 is too high. It is not justified by the content of the technical annex and should be reduced.

Mr. Dalyell

First, has any provision been made for the European proposals on means of research? Secondly, has environmental aid been taken into account, either through the proposed European environmental agency or by some other means, to assist research in eastern Europe?

Mr. Hogg

My recollection, after reading the technical annex, is no. However, I shall have my answer checked and if I am wrong I shall correct the error.

I have dealt with spending in 1990–92, but there are two elements to the spending during that period. The 3.billion ecu, which is the outstanding balance of the existing programme, is the first element in the budget. The second element in the budget is the sum we can add up to a ceiling of 2.7 billion ecu. Our judgment is that that second element is too high and I shall be pressing for a substantial reduction in that figure.

Mr. Matthew Taylor

The Minister has certainly clarified his position. In principle, under the IIA those spending figures are already agreed and so the process of carrying them forward for another two years produces the 7.7 billion ecu figure. It appears that the Minister is pressing for a cut in a figure that has already been agreed.

Mr. Hogg

The hon. Gentleman misunderstands the position. The word, "ceiling" does not imply entitlement. It is a sum that is available, subject to a decision being made that it should be drawn down. That decision depends, for example, on the financial requirements of the work contained in the technical annex. Our judgment is that on grounds of programme content a spend of 2.7 billion ecu could not be justified. Therefore, I do not accept that the programme is being cut, merely that the programme in place does not justify a spend of 2.7 billion ecu. I shall be resisting such a suggestion and pressing for a lower amount when we discuss the matter on Friday.

Mr. Matthew Taylor

I assume that the Government would still seek to count the money that is put into European research and development against our own national budget on research and development spending.

Mr. Hogg

It is true that all those sums are drawn from a common pool. The hon. Gentleman has a detailed letter on precisely that point which explains the interrelationship between moneys that are available for domestic spend and moneys that become available for supporting the European research and development programme. The hon. Gentleman will find a fairly full explanation of the interrelationship between those two items in the supplementary memorandum which is now before the House. I hesitate to summarise it at this late hour, especially as it is already in written form. As it is about 12.45 am I am quite capable of misinterpreting it.

Mr. Dalyell

As a recipient of a number of letters, I should like to put on record that I am extremely impressed by the quality of much of the regular input by the British Civil Service into the European scientific decision making. One may have questions about the decisions, but the quality of our Civil Service in Europe is a credit to this country.

Mr. Hogg

The fact that the technical annex is now so much better than it was when first published by Mr. Pandolfi owes a great deal to the work carried out by civil servants in the DTI and in Brussels. I am grateful for the work done by officials and I am grateful to the hon. Gentleman for his kind remarks.

I have laboured slightly over the 1990–92 spending programme. I have still to deal with the period 1993–94. I suspect that additional resources will be proposed by the Commission as a result of the 1992 mid-term review. Therefore, it would be appropriate for the figures agreed at Friday's Council to taper down towards the end of the period. We are probably looking at only one part of the funds that are likely to be available for that period. If we proceed to rolling programmes further funds will be provided in 1992 for the forthcoming period. The Commission proposes 5 billion ecus for the period 1993—94, which we believe is too high and requires substantial reduction.

In the course of my speech, I have tried briefly to highlight the main issues in the knowledge that, with the leave of the House, I may be able to respond later to specific issues raised by hon. Members.

Since discussions first began with the Council, considerable progress has been made. In concert with other countries, the United Kingdom has succeeded in securing important changes, which have greatly improved the proposal that the Council is to consider on Friday. We enter those discussions with the hope that an agreement can be secured. We shall endeavour to reach an agreement, but the House will expect us to protect the proper interests of the United Kingdom, which we will seek to do.

12.50 am
Dr. Jeremy Bray (Motherwell, South)

If the Minister will forgive me, I shall speak in pounds rather than billion ecus because I want to make a comparison with the United Kingdom's domestic funding of research and development.

The increase in Community funding of the framework programme from £3.7 billion over the five years 1987–91 to £7.2 billion over the overlapping five years 1990–94 is substantial. The average United Kingdom contribution to funds through the Community budget at 18 per cent. of the total would increase, therefore, from £133 million to £260 million a year. The House will forgive me for eliding the difference between the approved, the ceiling, the later years and so on. The increase from £133 million to £260 million is large.

By comparison, the United Kingdom's budget for 1991 for all the research councils will be £897 million and for the medical research council perhaps £200 million. The European Commission proposes that United Kingdom spending through the framework programme should just about double in three years—from two thirds the size of the medical research council's budget to four thirds. If it were a choice between the medical research council and the framework programme, I would choose the medical research council every time, but it is not.

As many of the Community's programmes are in industrial areas, it is perhaps more appropriate to make the comparison with total United Kingdom Government spending on civil research and development, which is projected to be £1.1 billion in 1990–91. The Commission proposes that the framework programme should increase from about one eighth to one quarter in three years. That is serious money. Is it worth it, or to the poor starved body of British science is it manna from heaven? What scientist will quibble about whether his money comes through the research council or the European Community?

The Council of Ministers, we are told, has not yet considered in detail the overall level of funding or the relative balance between the different lines of research. In total disbelief, or whatever it is that goes beyond scepticism, the Minister tells us in his supplementary memorandum of 22 November that the Commission and the Presidency hope for agreement by the Council by the end of 1989, and that the next Council discussion will be on 15 December. We wish him a happy Christmas in Brussels. As the Council will act by unanimity, I take it that the Minister is seeking the support of the House for delaying action. Our appropriate response is a flea in his ear. The Government's fault lies not in their stars—be they the stars of Europe or of science—but in themselves.

The House is indebted to the Select Committee on European Legislation, as always, for its prompt report on the draft Council decision, the Government's explanatory memorandum and the supplementary memorandum. The Select Committee has given us a comparison of Government funding of civil research and development at 0.58 per cent. of GDP in the United Kingdom, 0.71 per cent. in Italy, 0.92 per cent. in France and 0.96 per cent. in Germany. As usual, Britain is at the bottom of the European first division.

The Government perpetually speak of their nominal and, indeed, real increase in research and development since 1979, but as a percentage of GDP—which is the best measure of research intensity—Government funding of civil research and development stays paralytically fixed while, in an increasingly science-based world, other countries have been increasing their research and development rapidly to well above our previously higher levels. For example, the science budget in the United Kingdom was 0.16 per cent. of GDP in 1979–80 and is forecast to be 0.16 per cent. in 1990–91.

With the more direct effect on competitiveness of support given to industry, between 1964 and 1986 civil research and development funded from all sources increased from 1.5 to 1.8 per cent. of GDP in Britain, while in Germany it increased from 1.3 to 2.6 per cent. and in Japan from 1.3 to 2.8 per cent., leapfrogging the British effort.

For the United Kingdom, therefore, if the Government will not increase their funding of research and development and will take no serious steps to encourage industry to increase its funding of R and D, Britain cannot afford to look the gift horse of the European framework programme in the mouth. That is a tremendous pity. Britain and British science have a major contribution to make to European Community science. It does not lie in nagging away at the drafting of Council decisions which, with the best will in the world, can give only general guidance to the administration of major support programmes.

I agree that the drafting in the annex to the supplementary memorandum is an improvement on the original memorandum, but to expand the treatment of biomedical and health research from seven to 21 lines and to come up with statements such as 325 million Europeans wish to maintain or improve their state of health by way of scientific advances is not a terribly profound statement on the management of scientific research.

The contribution from Britain does not lie in trying to impose criteria which, as the Select Committee correctly observed, cannot in practice be applied to Community expenditure in the same way as to domestic expenditure. United Kingdom Government Departments have only limited control over the cost and shape of Community research programmes. The Committee may agree with the Government that the information provided by the Commission remains insufficient for a proper appraisal of the programme, but can bureaucracies and assemblies appraise good research programmes properly? Does it really improve matters to increase the lines from five to 20 or 30? Is it a matter of the Government satisfying themselves that a process has been set up among the scientists which works and produces results?

We do not ask in the House for details, line by line, of the expenditure of research councils. There are five research councils and they have discretion within the sums granted to them to conduct their research programmes. How can we hope to direct the far more complex aspects of European research programmes by proxy, through ministerial representatives on councils, which then give instructions to officials, who then set up advisory bodies, which then consider proposals put to them?

The Commisssion's tactics in proposing the extension of the framework programme have been to go for the greatest freedom that they can get away with in the administration of the programme and the largest increase. What will be the Government's response? Will it be to whittle away the increase in the framework programme as much as possible and then to deduct what remains from departmental expenditures on research and development?

United Kingdom Departments are not in charge of the European programmes in their areas. Will they fight their hardest to reduce those programmes and will their own urgent and perhaps quite different programmes be cut to the extent that they fail to reduce the European programmes? That seems to be the worst of all worlds. That would alienate others, lose us influence in Europe and starve activity at home.

An alternative approach which might eventually cost no more is to enter positively into the European programmes and thus be able to influence them in directions that can contribute to urgent United Kingdom priorities. With Britain a significant, but not dominant, partner in European programmes, the Government's aim should be first to encourage and help British scientists to use the European programmes effectively and, secondly, to improve the European programme systems from within, working with the grain of the European debate.

Britain probably has most to contribute, and will be most listened to, in the direction of research in basic science. We have much to learn about the organisation of industrial support services from Germany and in the management of big, high-tech projects from France. There are, of course, exceptional individuals and areas in which British management has been and will be superb, but we should not be afraid to learn from our European partners.

Having said that, we come back to the framework programme. Should we support the proposed virtual doubling of expenditure? Even if the whole increase is added to the British Government's civil research and development expenditure, we should still be below the level of Italy, our lowest European partner, in the percentage of gross domestic product that the Government spend in support of civil research and development. As the Government will not increase departmental research and development expenditure, the European framework programme increases cannot be objectionable in principle and should not be deducted from British departmental programmes.

Different approaches will be appropriate to different programmes. In some, it would be appropriate to depart from the shared cost contract which is the Community's principal instrument of research funding, flexible though it may be. In others, support should be given to a single research contractor, if that is the best way in which to do the work. An example outside the framework programme is that I hear more aircraft builders today asking whether the next generation of European aircraft would best be built by a single European corporation rather than by a consortium of separate national corporations.

The framework programme may be a suitable way in which to organise European participation in the proposed international astronomical institute to plan the next generation of space telescopes. What may be appropriate is still more flexible rolling funding in which a programme that does not need all its funding does not spend the money just because it is there and in which a programme that clearly deserves better funding can obtain it without having to wait for the rolling on of the next framework programme. That condition is met partly by the very broad lines of research that have been proposed and may not be quite as stupid as the Minister has suggested. It should still be possible even to switch funding between the broad lines that have been given. It is all a matter of building confidence in the administration and peer groups of the framework programme, to which Britain should make its full contribution.

With what seems likely to end up as a significant increase in the funding of the framework programme, whatever the British Government say or do, the basic end of research should not be neglected at the European level. That is well represented by the European Research Foundation, a modest body which is supported by our own research councils and science vote, and by corresponding bodies in other countries. The foundation should be encouraged to grow towards the status and role of a full European research council, for which it deserves modest additional funding, although it is small by comparison with the framework programme.

We wish the Council of Ministers success in its further consideration of the framework programme and we shall follow its development with great interest.

1.3 am

Mr. Roger King (Birmingham, Northfield)

I find it difficult to object to anyone—or any organisation—who suggests that we should, as a Community, spend more on research and development. If we do not, some of our competitors elsewhere will outperform us in activities that are essential to provide the wherewithal for our everyday life. Having said that, I have a feeling that the way in which the Community seeks to undertake research and development, as outlined in the extensive documents before us, is not the most successful way in which to proceed.

I have read that after the war we adoped a scatter gun approach to R and D and many of the projects that this country embarked on were subsequently found to be no good. The Bristol Brabazon leaps to mind—an aircraft which was supposed to conquer the world but which could barely get off the ground because some of the basic technological innovations in it—the engine, for instance—were ill engineered and ill devised.

We moved on to atomic energy, in the form of the Magnox reactors, which found a market in the United Kingdom but nowhere else. Then our engineers and scientists developed the AGR system, which found some favour in this country, although its performance has been open to doubt for many years. But as a product that could bring wealth to the country, it was a lamentable failure, and we have sought to embrace designs developed elsewhere in the world.

It is not as if the Community will spend small amounts of money. Since 1984 it has been engaging in R and D, and between 1987 and 1991 it will spend £3.6 billion on it. There should be accountability for the spending of that money, to see what it has produced in terms of everyday consumer goods and of an improvement in our factories. We need evidence that money spent by the Community for research's sake has benefited us.

I am reminded that research by committee is never the best way to push back the frontiers of technology. Scientists need a target at which to aim, a challenge to meet. The United States and Japan realise that. Much of what they do is commercially based and they do less research for its own sake.

The letter from Filippo M. Pandolfi is illuminating. One or two paragraphs in it clearly explain the difficulty that many of us have in accepting the merits of the proposals. For example, paragraph 10 on page 6 says: Against this, the funds allocated to research in the area of energy represent a net percentage reduction. This is due to the fact that, in the energy sector, one sees, on the one hand, the development of important projects arising from the current framework programme which, in many cases, will take several more years". Presumably this research programme has been rolling at least since 1984 and we do not really know what these important projects are—yet we are being asked to carry on allowing this sort of expenditure.

On industrial and materials technology, page 24 of the letter states: Priority will be given to major integrated projects; among these, the development of the 'clean car'". That does not mean a car that never gets dirt on its bodywork; I assume that it means a car that does not harm the environment. But every world car manufacturer is rapidly researching that, and the project hardly needs funds from a central bureacracy concentrated on it.

The European Commission and countries thoughout the world have made laws on exhaust emissions, thereby driving manufacturers to produce clean cars. They will not be able to sell cars that do not conform to these standards. Community taxpayers should not have to pay twice for this—once for the cars that they buy, at a price that includes development costs, and again through taxes, to enable someone else to develop what manufacturers are already developing.

I wonder what kind of system would encourage another agency to develop that kind of research. Perhaps such an agency would fund existing car manufacturers to develop those technologies. However, how could we fund that fairly among all the car manufacturers in Europe so that they all got the same slice of the cake and not one manufacturer was able to benefit from Community grant to press ahead with clean car technology?

Concentrating on the car industry for the moment because these points are relevant to our debate, the document from which I have already quoted states in relation to energy: The research includes the use of hydrogen and other suitable substitutes for liquid fuels in the transport sector. That research is already being undertaken by virtually every car and vehicle manufacturer in the world. In the United States, California is taking the lead in introducing higher and more stringent restrictions on the internal combustion engine. California is obliging American, Japanese and European manufacturers that want to sell cars in California in the latter part of the next decade to develop engines that will run on alternative fuels. Those manufacturers hardly need another agency to spur them on. To stay in business, they must develop alternatives.

Throughout the memoranda, it appears to me that, although the research is worth proceeding with, it is already being undertaken by companies in their respective disciplines. We are aware that if we do not push ahead with that research and development, companies will cease to exist. The spur of global competition is probably already strong enough to promote that research.

If I had a choice, I would welcome the amount of money being allocated to research and development being channelled directly into companies to carry out their own research and development and to make bids for that money to carry out that research themselves. We do not need a concentrated bureaucracy in the centre of Europe deciding which way the Community should progress in research and development. Companies are best able to make that choice and can best decide what their lines of research and development should cover.

I welcome all kinds of funding for research. However, I am not happy that we are going about it in the right way. I am not sure that we are not creating a technological version of the common agricultural policy.

1.12 am
Mr. Matthew Taylor (Truro)

To address the debate sensibly we must consider the background issues, the first of which relates to the low level of civil research arid development in this country over many years under both Labour and Conservative Governments. That dates back to the 1960s. Although we now manage to spend a lower level of our GDP on civil research and development than previously, the position is becoming worse.

Although the hon. Member for Birmingham, Northfield (Mr. King) said that we should by and large leave research and development to the private sector, a policy of not putting large amounts of money into research and development has not led to that development being carried out in the private sector. This country has been falling behind for want of research and development and for want of taking a technological lead in world markets. I do not believe that this country's policy has paid off. Even if that were not the case, as we watch developments occuring in the world market with the great advances by Japan and, not far behind, America—which sees the threat from Japanese research and development as substantial—it is increasingly important that we recognise that one-nation let alone one-company research and development programmes are unlikely to generate the kind of progress that we need to get back on to the world stage in terms of being leaders in research and development. That is where the role of Europe comes into play, and that Is why I think that it is such a shame that the Government's attitude has been to slow things down and backtrack on the plans that Europe has tried to introduce—plans that have already been approved in principle under the inter-institutional agreement, as pointed out earlier in a question to the Minister.

I have four criticisms of the Government's approach. First, I think that they are justified in saying that the programmes are so loose—certainly in the original draft form—that the result is what has been described as "research and development by committee". There is insufficient democratic control over what programmes may be pursued. I do not believe, however, that the answer should lie with Ministers asking for more and more detail, which can only end in a process that we have seen before—Ministers swapping programmes and saying, "We'll have a little of this because it is of advantage to Britain; a little of that, because it is of advantage to France; and none of that, because no one has a particular vested interest in it."

I think that that is precisely what Europe has been trying to get away from. Moreover, I do not believe that the Government are providing a solution to the problem of the programmes' present form. On the contrary, I think that they are offering a trawl back to narrow nationalism, which is certainly what the hon. Member for Northfield was advocating. We should be democratising the whole process, opening up decision-making on what programmes to pursue and ensuring that those who make the decisions are held accountable for them. The best way to do that is to make Europe itself more democratic, and to give power to those who are democratically elected to represent the European interest—that is, MEPs.

My second criticism relates to the narrow nationalism that I mentioned earlier. I do not believe that anything lies behind the Government's actions other than their steadfast rejection of the principle of research being undertaken at European level. Everything that the Minister said tonight suggested that.

My third point is this. One good reason—in a sense—for the Minister to object to the spending increases is that he intends to take the money directly out of our own research and development programme. Whatever he may have said tonight, I think that the underlying reason for his objection is his belief that he will have to come back and start cutting into British programmes. That would be a valid objection if it were not open to the Minister to invest more in research and development—which he ought to be doing, rather than attempting to block what is happening in Europe. He should tell the Treasury that not enough money is going into research and development in Britain—and in Europe—and that we should not only be embarking on this programme but expanding our R and D activities elsewhere.

That is all the more true when we consider the balance between our civil and our defence research and development. The best of our competitors—Germany and Japan—are concentrating on commercially oriented R and D and ensuring that it is put to commercial use, whereas our own research is overwhelmingly in the defence sector. Indeed, because much of the research is classified as secret: it never gets out or, if it does get out, it is too late to provide a competitive advantage.

Turning to the specific examples that we see in the papers, it is worth my making one point about the programmes outlined. Again, the hon. Member for Northfield referred to the energy programme and complained that there was insufficient detail. I found that there was more than sufficient detail to make one important criticism of the plans. As a whole, the research and development plans outlined turn more towards the environmental and green agenda than did the predecessor framework programme. However, on energy, where there is no intention of increasing the spend, we find a divison of resources, which go overwhelmingly into the nuclear sector. Fossil and renewable fuels and the use of energy are all lumped together with only 10 per cent. to 15 per cent. of the envelope spend. In my view, that is an extraordinary balance of priorities. It lumps together three areas between which Europe could take a lead far more significantly than could be the case in respect of anything that it is likely to do in the nuclear area and where we could be far more certain of success.

I find it particularly extraordinary that more investment is not directed towards energy conservation which, ultimately, must be the greenest of the approaches. Indeed, from most independent studies, it is also the area that would show the greatest financial return. I hope that if the Minister is to go into the detail of every programme and to argue out the rights and wrongs of every pound or ecu spent, he will at least take on board the fact that our Government are moving away from the nuclear option. Perhaps he should argue the same when he is in Europe.

Nevertheless, my overall view is that we would do far better to seek to encourage the research and development plans that are outlined and to take advantage of the opportunity to increase our research and development spend in order to increase our competitiveness and to live up to the realities of the world as it develops into the 1990s. When Ministers have valid criticisms about accountability and decision by committee, we should take advantage of the opportunity to seek to democratise these processes and to hand Europe to the people of Europe and away from the bureaucrats. We should not seek to grab the power back for the Ministers around the table who are all too inclined to bargain among themselves rather than to stand up for the interests of the Community as a whole.

1.22 am
Mr. Jim Cousins (Newcastle upon Tyne, Central)

Two things are to be welcomed about the European framework document. The first is that it is less vulnerable to the criticism that has been made by the hon. Member for Birmingham, Northfield (Mr. King) than either it or our own national research programmes have been in the past. There is much less focus on single large blockbuster projects. Indeed, far less of that appears in this framework programme than appeared in the previous one or in our national research programmes.

I have some sympathy with continuing the one large blockbuster commitment that survives, nuclear fusion, expenditure on which has given rise to the criticisms made by the hon. Member for Truro (Mr. Taylor). It is clear that if nuclear fusion is to be pushed forward to the point where it becomes a workable energy system, that energy expenditure and those commitments cannot be made by single countries. Indeed, the results of such research should not be the property of any single country. Therefore, although I do no like large blockbuster projects, and nor am I a particular enthusiast for nuclear power, there is something to be commended in Europewide research into nuclear fusion. The participation and influence of our advisers and researchers into the quality of the programme are to be welcomed.

Others have drawn attention to the vast improvement in quality between the first document, drafted by Mr. Pandolfi, and the second, which appears as annex B in the Government's report. That improvement is substantially due to the involvement of British researchers, co-ordinated in Brussels. If I thought that British scientific research was as well co-ordinated in London as it appears to have been in Brussels, I should be a lot happier about the future of British research. Our influence on the document has clearly been systematic, highly intelligent, well coordinated, extremely well crafted and effective. In all respects, it is unlike our national efforts.

The Government's stance seems much less than adequate in regard to money. I am not talking simply about the quantity of money or the old arguments about additionality and the impact of the European spending programme on our domestic spending. I agree with what other hon. Members have said about that. The relationship between domestic and European spending, as described in paragraph 21 of the Government's supplementary report, is worrying. Spending is to be conducted at the level of individual Departments. That is a recipe for disorder. If the Minister's suggestion of 20 lines of research rather than six were accepted, that would be a recipe for still greater disorder. It is not possible to tell from the documents that the Government have presented to us how the research is to be organised. It is not possible to tell which Department is responsible for which line, and how it is to conduct itself. If Departments adjust their expenditure programmes randomly, as expenditure is incurred in Europe, we shall have disorder in our national expenditure programmes.

This is one matter on which the Government must clarify the issues if we are not to find ourselves in an appalling muddle. Our researchers will not know, if they go to Europe, whether they are disrupting their companies', colleagues' or institutions' efforts to get domestic research spending for similar projects. We must be clear about the organisational relationship between domestic and European spending.

The Government's insistence on the distinction between near-market research and other forms simply will not hold up. The excellent contribution made by British scientists to the revisions of the framework programme show clearly the falsity of that distinction. The spirit that dominates the framework programme in annexe B is looking for standards which will be the basis of performance and regulation, and which will enable the efforts of researchers, users and producers to be combined. They will lay the basis for future European performance and technological progress, standards, which in pharmaceuticals, telecommunications and materials technology, do not permit of any clear distinction between near-market and non-near market.

For that reason I have great sympathy with the hon. Member for Northfield who asked, "Why not simply throw the research programme open to the companies and let them apply for the money?" That is entirely within the spirit of seeking a research programme that will develop and hone new standards of performance and regulation. But that approach stands in contradiction to the Government's approach. Far from throwing open research programmes to companies, the Government seek to put up a completely false Chinese wall between the market and research. That distinction will not hold up.

There is much in this framework programme that should commend itself to us. Perhaps the single most important aspect is the way in which the framework programme does not allow this false distinction between markets and research to exist. In its search for comprehensive standards which can be the basis for technical performance and environmental protection, it is a model for how we should conduct research in the United Kingdom.

1.31 am
Dr. Lewis Moonie (Kirkcaldy)

The House will be grateful to know that I do not intend to fill up the remaining time with my concluding comments.

It has been an interesting debate. Perhaps the sparse attendance is a reflection of the hour rather than hon. Members' interest in this important subject. The framework proposal for Community research undoubtedly represents the single most important programme in the EEC for the next five years. It comes at a time of major political and economic change in Europe. On the one hand, there is the move towards the single market in 1992 with all the opportunities and dangers for British industry that that represents. On the other, there is the prospect of enormous upheaval in eastern Europe, the welcome return to democracy there and the challenge for the EEC that it represents in providing the economic underpinning which that democratic process will require and a largelly untapped market for our goods and services which will develop in consequence.

We broadly welcome the proposal. It covers all the most important areas of applied research which we need to extend and develop if we are to compete successfully with the United States and Japan in the 1990s and beyond. If carried through to the market, these efforts will undoubtedly be repaid with a new generation of products for making Europe a dominant force in the new technologies under development.

To summarise the proposals briefly, the six areas are information and communication technologies, industrial and material technologies, the management of natural resources, covering environment, applied sciences and energy and, equally important, the management of intellectual resources, human capital and mobility. Each of those is a key area in the future development of our industry.

Unlike the Minister, I believe that the EEC has probably got the number of programmes about right. It leaves enough flexibility within these to direct money towards the projects that are likely to show the most promise over the next few years. In particular, in information technology it is clear that much research needs to be supra-national. In life science and technology, which unfortunately is not given much of a mention in the background documents although it is a major area, recent reviews in The Economist and other perhaps more appropriate professional journals have suggested that single markets in products which are coming through towards testing in human beings may be worth upwards of £1 billion each a year in total world markets. Clearly, that is an area where we require to spend a great deal of money.

I agree with some of the comments of the Select Committee on European Legislation: some issues remain to be clarified. The Committee agreed with the Government that the information provided with the proposal was insufficient for a proper appraisal of the programme. It mentioned the need for global environmental research into the problems that will be caused by future ocean levels. That is an important issue on which we would welcome some clarification. The Committee endorses the Government's concern that there should be appraisal of proposals and evaluation of results. That may be significant in the light of the comments of the hon. Member for Birmingham, Northfield (Mr. King). Many of the major projects of the past to which he referred suffered from a lack of ongoing appraisal. If they had been subject to that, they might have been modified, or even abandoned, at an earlier stage.

How does the programme fit into our own research efforts? It is generally agreed that the current predominance of military research in the United Kingdom has had an adverse effect on the civil research programme. Happily, the reduction in spending on arms in Europe, which is an inevitable consequence of the changes, always assuming that they persist, will free more resources for efforts elsewhere, especially in basic research where we have long held a commanding position in Europe. Perhaps that factor is less well covered in the proposals than it might be.

I say in passing that we could consider fruitfully European co-operation on military research and development, with Britain perhaps taking a lesser share of the burden than it has in the past.

Our contribution to EEC-wide research must not be seen as a substitute for our own efforts. Instead, it must be seen as an adjunct to them. It would not be acceptable for us merely to deduct the moneys from limited resources within the United Kingdom.

All these fine proposals will come to nothing if we fail to act to take advantage of them. Two serious matters must be addressed. First, there is an increased need for British companies to invest in their own research and development, especially in what the Government call near-market research. That is essential in a competitive market. Secondly, we must not lose sight of the fact that we face a critical shortage of skills in all the areas that we have been discussing, especially in the biological sciences, engineering and information technology.

It is said that the Government, with their hands-off approach, have not yet grasped the serious implications for our future in the deficiencies to which I have referred. Either we compete effectively and provide the skills needed, or Britain in the 1990s will face a sombre future. The Labour party welcomes the proposals for the next five years, but it recognises that they cannot be a final solution to our problems.

1.38 am
Mr. Douglas Hogg

I have the feeling that most of the criticisms that have been made of the Government's attitude were written and crafted before I made my speech. The hon. Member for Motherwell, South (Dr. Bray) was somewhat less than generous. He might recall that the United States Government's expenditure on civil research and development is 0.4 per cent. of gross domestic product, which is significantly less than our own. He will recall—no doubt the hon. Member for Kirkcaldy (Dr. Moonie) will remind him if he does not remember himself—that industry's investment in civil R and D over the past four years has increased by 30 per cent. in real terms. That is an extremely encouraging development and reflects in part industry's satisfaction with the increasing prosperity that it is achieving as a result of Government policy.

On the hon. Gentleman's second point, I should make it plain—to be fair to myself, I have already made it plain—that we are enthusiastic supporters of the framework programme. We are also determined to ensure that we get value for money, and that the ordinary criteria for European programmes, such as subsidiarity, are respected. He would expect us to do that, and we shall ensure that we do.

I have some sympathy with the points made by my hon. Friend the Member for Birmingham, Northfield (Mr. King). In particular, he focused on the clean car, and the presence of the clean car in the technical annex. I agree with much that he said. We are not in the business of product development or, for that matter, of near-market activity. It is not for the Commission to fund the manufacture of a clean car. However, it is for the framework programme to establish some common standards by pre-competitive research that enables manufacturers in general to make a product to common standards.

The hon. Member for Truro (Mr. Taylor) accused me of narrow nationalism. I do not understand that criticism. I suspect that he crafted it—although to use the word craft in the context of his speech is, I am afraid, to flatter those remarks—before he heard my speech. I say again that there is great merit in a framework programme. We support the concept of it, and its contents, but we are determined to get value for money and to ensure that the ordinary criteria are satisfied.

As to the impact on domestic funds of spending on European programmes, the funds come out of a common source of United Kingdom expenditure. It is right that increasing expenditure on the European programme should have an effect on domestic programmes. Clearly, if there be a reduction in baselines for domestic programmes it is possible for an attempt to be made to reinstate programmes, but the fear expressed by the hon. Gentleman—that existing domestic programmes would be cut as a consequence of an expansion in European spending—is not a legitimate concern.

Dr. Bray

International comparisons are important in a proper assessment of the European programme and its effect on different national economies. The Minister has to compare like with like. On civil research and development, I made a comparison with other European countries, and he made one with the United States of America. The sources used by the Select Committee show the United States of America spending 1.28 per cent. of total research and development, including defence, and the United Kingdom spending 1.13 per cent. If the Minister had had as much benefit from the United States of America's research programmes as I have had in the office of naval research, which supports fundamental research in mathematics and other subjects right across the spectrum, he would realise that one cannot compare United States of America defence research '.vith British defence research and say that they are the same thing. The former covers a great deal of fundamental research that in Britain would be counted as civil.

Mr. Hogg

The hon. Gentleman protests too much. He was careful, in his analysis, to focus on civil research and development, and I did him the courtesy of following him down that road. If we consider Government expenditure on civil research and development as a proportion of GDP, which is what he urged me to do, we have the consequence that I outlined. He wriggles too much.

Mr. Matthew Taylor

The Minister is not very convincing. Further to the point that has already been made by the hon. Member for Motherwell, South (Dr. Bray), much of the American defence research and development would not be classified as civil research and development in this country. Moreover, the Americans make much better use of their defence research and development in the civil area, whereas in this country our defence research and development tends to remain classified and not brought to the market.

Mr. Hogg

Both the hon. Member for Truro and the hon. Member for Motherwell, South are trying to have it both ways. First, they try to pin me down to civil research and development. When I give them a figure that is based on that assumption which they do not like, they tell me that I should take into account the military research and development budget. However, when they consider the overall spending on British research and development, they accuse the Government of spending too much on military research and development. They cannot have it both ways. They do themselves less than justice by trying to have it both ways.

The rather bizarre and foolish suggestion that the European Parliament should determine the content of the scientific and technical annex was based on two premises: first, that there would be no horse trading in that august body and, secondly, that the European Parliament knows better about the scientific programme. There is no place that does more horse trading than the European Parliament. The idea of a gaggle of European parliamentarians setting out the details of the European framework programme in a technical annex is sheer folly.

The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) made an interesting speech. However, it is worth remembering that most of the work that is being done within the framework programme is carried out by companies. It is not done by a central organisation.

The Government are an enthusiastic supporter of the framework programme. We believe that we should get value for money. It is a valuable adjunct to our scientific programme, especially our research and development. We hope to reach agreement on Friday. We shall do our best, but we must obtain value for money and protect this country's interests.

Question put and agreed to.

Resolved, That this House takes note of European Community Document No. 8375/89 and COR 1 and the Supplementary Explanatory Memorandum submitted by the Department of Trade and Industry on 22 November 1989 relating to the Framework Programme of Community research and development activities 1990 to 1994; and supports the Government's view that the Commission's proposals for expenditure need to be more clearly justified before the Programme can be agreed.