Science, Engineering and Technology

HC Deb 18 June 1993 vol 226 cc1101-70

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

Relevant document: The First Report from the Science and Technology Committee on the Policy and Organisation of the Office of Science and Technology, [HC 228 of Session 1992–93.]

9.37 am

The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave)

It is appropriate that the House is debating the White Paper together with the first report from the new Select Committee on Science and Technology, because, about a year ago, a process of national consultation was launched in the House. That led to the production of the White Paper, which has been broadly welcomed.

There has been genuine participation by many thousands of people all over the country—in the science and engineering communities, in the House, in another place and in the various institutions and associations representing scientists, engineers and science policy makers in this country and abroad. I say "abroad", because the issues in the White Paper have been discussed at some length with Science Ministers of the Group of Seven countries in the Carnegie meetings, which have now become a valuable feature of modern science policy making.

I think that I will be unchallenged when I say that the White Paper has been well received. Even the attempt by the hon. Member for Kirkcaldy (Dr. Moonie) to stir up some party-political fire was done slightly more for effect. He did not seem to have his heart in it, and his noble Friend in another place took a rather different view.

The beneficial effect of this national debate has been seen—if I may make one gentle party point—on the Opposition Benches, in that today we are to hear the first speech on science from the hon. Member for Redcar (Ms Mowlam), to which we look forward with great interest. Perhaps if we are allowed to offer any advice to the Labour Party, it should be that its science spokesman, the hon. Member for Kirkcaldy, should win his place in the shadow Cabinet. It seems odd that there is not one there already.

I shall set out the arguments in relation not only to the White Paper but to the broader themes of science policy, and to the valuable contribution of the Select Committee under four general headings, and shall discuss some of the comments made about those four general themes, which underlie the White Paper. I shall reflect with the House on some of the comments made by heavyweight commentators and contributors throughout the science and engineering community.

Mr. Patrick Thompson (Norwich, North)

My right hon. Friend has referred to science policy. I am sure that he will agree that there has been a particular welcome for the White Paper from the world of engineering. This week, the Engineering Council and the four major engineering institutions—electrical, mechanical, chemical and civil—have said that the White Paper puts science and technology at the top of the political agenda. Can my right hon. Friend assure us that it will stay there from now on?

Mr. Waldegrave

My hon. Friend gets directly to the heart of the matter. The first of my themes is indeed that the purpose of the White Paper has succeeded, and science and technology policy are at the heart of Government policy. More importantly, it has begun to correct—although only begun—the imbalance between the prestige of engineering and science and the importance that the engineers have felt they have had in policy-making matters. My hon. Friend rightly quotes the support that we have had from the engineering institutions. I would add to that the warm support that we have had from Sir William Barlow of the Royal Academy of Engineering, which echoes what my hon. Friend has said.

The determination and impetus of the White Paper is to make closer connections between our science and engineering base in the universities and research councils and in the private research laboratories—they have not been overlooked, as they are major contributors, particularly to technology transfer—and those in industry who have the prime responsibility for the creation of wealth.

I direct the attention of the House to an important article that appeared a couple of days ago in the Evening Standard, written by the chief economist of ICI, Mr. Richard Freeman. I quote this not because it is unusual, but because it stands for quite a wide range of comments made about the White Paper and the drive that lies behind it. He wrote: It is difficult to overstate the importance of the White Paper as the success or failure of the science and technology policy it contains will be a critical factor determining the competitiveness of the United Kingdom in the 1990s and beyond. It is, after all, the first realistic attempt by Government for more than 30 years to formulate a coherent and science and technology policy. He went on to welcome the policies specifically, quoting them in detail—the focus on wealth creation, the creation of the Technology Foresight process, the publication of an annual "Forward Look", the new mission set out for the research councils, bringing them closer to their user communities, and, as he put it: the long overdue change in science and technology policy in that it will be co-ordinated and monitored by one Department —the Office of Science and Technology. He quite rightly made the further point, which is legitimate, that, in that sector, where the expenditure of industry is greater than that of the Government—as it should be—success depends on industry playing its part as well. All the responses that we have had show that industry is willing to play that part.

I shall quote one other endorsement that we have had, and that my hon. Friends will have seen before coming to the debate. That is the parliamentary brief published by the CBI to assist hon. Members wishing to take part in the debate. A press release says: The CBI's technology and innovation committee welcomes many of the features of 'Realising our Potential' particularly the recognition that science and technology should he more strongly linked to the needs of industry in creating wealth. The committee considers that the White Paper offers a framework and building blocks to achieve that and welcomes the commitment of all Government Departments to the overall objective. It goes on to welcome specific aspects of the White Paper.

Let me remind the House of the building blocks that the CBI described. The first is the creation, for the first time since the late 1950s, of a proper senior council of science and technology, which I will chair and which will contain senior members from academia and industry.

The second is the creation of the foresight mechanism, which we have studied closely and which exists in many other countries. We are now in the process of carrying forward the work for the establishment of that. The third is the clarification of the mission of the research councils, and the fourth is the establishment of the new engineering and physical sciences research councils. Finally, there is a range of reforms on postgraduate training.

The White Paper has been broadly welcomed by one of the key constituencies at which it was aimed because one of its tasks is to bring the science base and the scientists and engineers in the research arms closer together with those who take industrial decisions. If we can achieve that, we shall have begun to spread more widely the success that we achieve in certain sectors in high technology industries.

The second theme is the reforms that we have proposed in relation to the organisation of the science base and its relationships with the Government, industry and the universities. I am happy to say that there has been a pretty united welcome for what we have done.

It is extremely important—I know that my hon. Friend the Member for Wantage (Mr. Jackson) is likely to remind me of this, as he did during the preparation of the White Paper—not to devalue the importance of good basic science. I think that he will confirm my understanding that, again and again during consultations, we had from big and small science-based companies a recommendation that the Government should not resile from their proper task of underpinning technology, engineering and the application of science by the provision of that which only they can provide—long-term support to a strong quality science base.

We decided to remove the uncertainty that had remained in relation to the dual funding system since the last higher education White Paper. We have reshaped the research councils, re-endorsing their structure in general and their efficacy. They are a good British invention. They bring peer group pressure to bear effectively and they have been increasingly well managed, although there are further reforms to be made to their management.

We have divided the Science and Engineering Research Council into two and have won general support for that on the grounds that it had become too big and was asked to make judgments that were so wide—between the most cosmological research at one end and the science and engineering underpinning industry at the other that those decisions on allocations should be taken through a process in which Ministers were involved, and by the new director-general whom we shall be establishing.

We have accepted the advice of the Royal Society and others, and of the Labour party on Tuesdays and Thursdays, although not on Wednesdays and Fridays, to bring the Advisory Board for the Research Councils within the Office of Science and Technology. We have won widespread support for that collection of evolutionary but sensible reforms of the management of the science and engineering base.

Sir Trevor Skeet (Bedfordshire, North)

The director-general is probably one of the most important personalities. Does my right hon. Friend have any idea who is likely to be appointed to that post and when he will be in place?

Mr. Waldegrave

My hon. Friend is right to say that his post will be a key to the success of the structure.

Ms Marjorie Mowlam (Redcar)

His or her.

Mr. Waldegrave

The post should be openly advertised —and the female hon. Member for Redcar is right to correct me, because the holder of that post could be a member of either gender. I will set out at the end of my speech our time scales for some of those matters. I have no idea who will be appointed, but I know—as does my hon. Friend—that a number of high-quality people have expressed interest in the task.

We have won support from some who, in the consultation process, were suspicious that we would get it wrong. Sir John Kingman, vice-chancellor of Bristol university in my constituency—a former chairman of SERC and a distinguished mathematician—upholds the view that the Government should not damage the underlying science base. He comments: The White Paper … is the first Government document that comes near to recognising the complexity of the science base, and its relationship to wealth creation, and it says many things about them that badly need to be Government policy. The practical steps outlined in the White Paper are all steps in the right direction. In particular, the changes to the Research Councils and their link with OST seem to me constructive and workable.… The White Paper has been rightly welcomed by the scientific community, and you and Bill"— the chief scientific adviser— deserve congratulation. I greatly value winning support for the reforms from that quarter, as I do the explicit and warm support that we received from Lord Flowers, Chairman of the House of Lords Select Committee.

In a letter, Lord Flowers congratulated us warmly on the White Paper's content and tone and welcomed the internalising of the ABRC within OST and the appointment of a Director General". The judgment of those most closely concerned with the management of the science and engineering base is that our reforms in the structure and organisation of British science were well made and will have the general support of the wider community.

The third theme came across in the consultation most clearly, understandably, from younger scientists and engineers at the bench—that this country has not been very good at managing and giving pastoral care to scientists and engineers in research laboratories. We have increased the numbers markedly over the past 10 or 15 years, but there has been a large increase in the number on short-term contracts. They are not always managed well by the institutions which are their employers—although often they are on contracts to organisations outside the institutions themselves.

After discussions with a wide range of representative institutions and with engineers and scientists at face-to-face meetings in laboratories throughout the country, we reached the conclusions that are set out in the White Paper, which have also been broadly welcomed.

A Government announcement made this week will be welcomed by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet). My right hon. Friend the Secretary of State for Education announced further support for specialist bursaries for high-quality engineers who want to undertake undergraduate work. That shows that we are beginning to generate much more coherent policy across Government.

Mr. Michael Connarty (Falkirk, East)

The criticism is regularly made that the average stipend for a postgraduate is £4,300 per annum, whereas a graduate can earn an average of £16,000. Neither the White Paper nor the Department of Education commented on that aspect. Is not that situation a fundamental flaw?

Mr. Waldegrave

The hon. Gentleman knows as well as I that there is no shortage of quality applicants. The counter-criticism is that, if anything, too many people apply for the available places.

The Wellcome Trust and other independent trusts reflect the view that those that we want to keep in the research base must have a sense of longer-term support, particularly when they are older. However, we must not resile from acknowledging that, if we are to do that, in a world in which it is extremely unlikely that there will be large increases in funds, fewer may have to be supported at a better level. The hon. Gentleman may have noticed the letter from Sir Hermann Bondi on that very point published in The Times Higher Education Supplement, saying that, if push came to shove, that would be a better way forward.

It is no use opting out and arguing that there must be more money for everything. The Labour party document rather grandly ticked off the science community for asking for more money, saying that it was impertinent of the community to go about its affairs in that way.

Dr. Lynne Jones (Birmingham, Selly Oak)

It is good to hear of the right hon. Gentleman's concern for scientists, but is it right to accept that the only way forward is to have fewer scientists when we are falling behind our competitors? The White Paper's solutions for dealing with those on short-term contracts involve paying more money, drawing on additional resources to tide people over, and extra fellowships. Is that the right approach when research councils are already unable to support all the alpha projects that seek funding?

Mr. Waldegrave

The Labour party must make up its mind, as must the country, whether the solution to this, as to all other problems, is to spend a great deal more money. We have markedly expanded the total number of post-doctorates aged between 28 and 34 on short-term contracts since the days when Labour was in power. However, there is an unrealistic expectation that they can all remain in the academic base. They cannot and will not —and most likely, they should not. The pyramid must be sharply defined at that stage, because those who are to spend a lifetime in research should be of the highest quality and exhibit the skills required.

The number of people in this free country who choose —no one will stop them—to enter the research base at that point will need greater help and advice to develop their careers. If it is possible—and it is possible—we should continue to direct universities and research councils to imitate the work done by Wellcome and the Royal Society, with Government money, in providing longer-term support for those whom we want to develop and keep in research careers.

It is no use, either, imagining that they can all be kept in the research base. The Association of British Science told me that it was extremely important to have such people in general management, Parliament and the media. They should be given more assistance and pastoral care in finding jobs.

Our proposal relating to the MSC, which was strongly welcomed by Cambridge university—to take one familiar to the hon. Member for Cambridge (Mrs. Campbell)—and by Peter Swinnerton-Dyer at Cambridge, identifies the MSC as the natural first part of a postgraduate career, which will enable us to ensure that the council has a slightly wider educational base in relation to management and the research process, so that those who find that they are not to stay for ever in the research base will be equipped with experience that will prove really useful to them in industry.

Mrs. Anne Campbell (Cambridge)

Much of the discussion about women in science has been sidelined to a working party, and no mention of that aspect is made in the report. What is the right hon. Gentleman's thinking on stopping women dropping out of science when they have children? Many studies have shown that women drop out then and do not return to the main stream of science, but later end up taking low-skilled, low-grade jobs, which is a great loss to the country.

Mr. Waldegrave

That is a problem. Over the years, evidence has shown that scientists—especially the purists, such as pure mathematicians—are at their most creative at child-bearing age, and it is not easy to reconcile two full-time careers. That is why I set up a committee of women scientists, some of whom—for instance, Dr. Nancy Lane—will be well known to the hon. Lady. I do not want to pre-empt the practical suggestions that the committee will make when it reports in the autumn, but I remain optimistic.

I am thinking back to 20 or 30 years ago, when exactly the same arguments were produced about the impossibility of women working in medicine. That has proved not to be impossible after all: although we have a long way to go before we achieve equality in senior appointments, about 50 per cent. of medical school entrants and doctors in training are women. I believe that the same can be achieved in science and engineering.

I am sure that the House will wish to congratulate Dai Rees, secretary of the Medical Research Council, on his well-deserved knighthood. He described our proposals on the reform of postgraduate education and the management of research staff in universities as sensible.

We are not without power to enforce those proposals: one of the criteria governing the direction of university funding via the higher education funding councils and the research councils will relate to the employment practices of the institutions concerned. The new committee over which the chief scientific adviser will preside is already beginning to meet; the funding councils will meet the research councils to discuss the broad issues of the management of the science base on a systematic basis.

The fourth great theme of the White Paper was the importance of public understanding of science, and of increased work to bridge the cultural divide that, after many years, still exists. Our proposals have been given an enthusiastic welcome by, for example, Sir Arnold Wolfendale, the Astronomer Royal, and COPUS—the Committee on the Public Understanding of Science of the Royal Society—the body which brings together many of the associations involved in the campaign for public understanding of science. COPUS said that it warmly welcomed the emphasis on, and recognition of, the importance of heightening public understanding and awareness of science and technology in the Government's White Paper on science. Sir Walter Bodmer, chairman of COPUS, strongly endorsed that view.

Another endorsement has come from someone very skilled—Neil Cossons, director of the science museum, whose name will be familiar to many hon. Members. He congratulated the Government on the White Paper, which he considers a significant step forward in the drive to increase the public understanding of science. He wanted to place on record his full support both for the general thrust of the White Paper and for our proposal for a series of mobile exhibitions, culminating in a national exhibition of science at the museum in the year 2001. We shall be asking for the museum's help with our campaign: its staff are internationally recognised as experts.

I have taken some trouble to identify the wide spectrum of support for the proposals in the White Paper. I believe that the Select Committee will find that many of the recommendations in its first report are reflected in our undertakings. I look forward with interest to the speech of my hon. Friend the Member for Pudsey (Sir G. Shaw), who chairs the Committee. We have paid close attention to its recommendations, especially those relating to the role of the OST and the chief scientific adviser. I believe that my hon. Friend the Member for Pudsey and the Committee welcomed the raising of the adviser's status; although we should not worry too much about hierarchical points, I considered it a rather odd signal that other scientific advisers in Whitehall should be senior to him. I should add that Bill Stewart himself would be the last person to lobby for such a change.

Although there has been a broad welcome for the theme of the White Paper, there has been criticism of two aspects. Understandably, some have said, "Lots more money would help." Of course it would; that applies to nearly every spending programme. However, the pressure on public expenditure—which all hon. Members know to be real [redoubles the importance of ensuring that the money that we have is spent properly, where it really matters. Britain is not a particularly low spender; we are in the middle of the pack. It is crucial that Government expenditure—which constitutes less than half the spending of the country as a whole—is undertaken in the closest and most productive conjunction with spending by industry.

According to the score board of the Department of Trade and Industry, British companies' spending increased by about £350 million in 1992. The DTI also points out that analysis of the figures reveals a higher percentage increase among the biggest companies—a rise of about 8 per cent., which is comparable with the rest of the world—and a much lower increase among small and medium-sized enterprises. That led the President of the Board of Trade, in his recent reformulation of the direction of his own innovation budget—which, incidentally, has increased by 15 per cent. this year—to concentrate on small and medium-sized enterprises. I am sure that that is a wise priority.

Dr. Lewis Moonie (Kirkcaldy)

Given that our leading companies have done so well, will the right hon. Gentleman tell us how many of them have improved their standing in the world rankings in the past year?

Mr. Waldegrave

The hon. Gentleman is right to ask that question. Our long-term task is to enable all our industry to achieve the best. I am sure the hon. Gentleman will agree that some of the industries with which he has been successfully associated in the past are doing very well. Perhaps we quote the views of the pharmaceutical industry too much, but I believe that the relationship between that industry and the scientific and engineering base are good, and should be duplicated elsewhere.

Mr. James Wallace (Orkney and Shetland)

Will the Secretary of State give way? [Interruption.]

Mr. Waldegrave

I will give way, despite the objections of the hon. Member for Jarrow (Mr. Dixon), the Opposition deputy Chief Whip.

Mr. Wallace

The right hon. Gentleman mentioned the increase in the DTI's innovation funding. No doubt he, like other right hon. and hon. Members, has seen the notes from the Save British Science campaign, which claims that the funds have been cut from £135 million last year to £125 million this year, and that that has been presented as an increase. I am somewhat confused by that figure; can the right hon. Gentleman shed any light on it?

Mr. Waldegrave

The innovation budget has increased by 15 per cent. this year. I do not know where the Save British Science campaign got that figure. The argument that calls for huge new expenditure is a cop-out; we must consider the proper management of the enormous sums that are now being spent.

The other criticism is, in a sense, not a criticism at all. Many people have rightly said that the White Paper is not the end of the story, but the beginning: what matters is how we use the new structures. It is essential that we press on quickly with the implementation. I have set out a clear programme for the establishment of the new arrangements, and the first report of the Technology Foresight programme will be produced by the end of 1994. "Forward Look" will be published each April, starting in 1994. The Director-General for the Research Councils—this meets the point that was made by my hon. Friend the Member for Bedfordshire, North—will be in place no later than 1 January 1994. The establishment of the six research councils will take effect from 1 April and the publication and dissemination of data on the stocks and flows of scientists and engineers will begin next year.

In one respect, I want to speed things up. I have decided, following discussions with Sir Robin Nicholson, that the next meeting of the Advisory Committee on Science and Technology should be its last and that we should establish the new Council for Science and Technology by the end of October. We should get on with that, as quickly as possible.

In the words of The Times Higher Education Supplement, The White Paper is the latest and probably the best attempt to address a key problem about British cultural and economic life, the intellectual distance, and the difference in approach, between our ingenious scientists and engineers and the people who run British companies and British governments. That is the challenge. We have set a framework, which has been very widely welcomed, and I commend the White Paper, backed, as I believe it is, by the helpful work of the Select Committee.

10.10 am

Ms Marjorie Mowlam (Redcar)

We welcome the chance to debate science and technology policy. Amazingly, the Chancellor finished with the comment that it is the latest and best attempt to discuss science and technology: in fact, it is the only attempt to discuss science and technology policy for many years. By default, it can certainly be the latest, and possibly the best, attempt.

I was surprised that the Chancellor did not cover an important piece of scientific information that has been in the public domain in the last month. It has been discussed in the national press and the Chancellor has written an article on it. A new scientific law has been invented, which the right hon. Gentleman defined as Waldegrave's law. I shall succinctly describe it for hon. Members who have not had the chance to read about it. There is an inverse relationship: the more important the political matter, the less parliamentary time it is given.

Waldegrave's law clearly holds in relation to science and technology policy, which we have not had an opportunity to debate in Government time in the past 14 years. The only debates in 1988, 1989 and 1991 were all as a result——

Mr. Waldegrave

What about 1992?

Ms Mowlam

If we go back a year and a day, the consultation was announced. The substantive debates were all in Labour time. The last debate, which, again, was on a Friday, was introduced by my hon. Friend the Member for Jarrow (Mr. Dixon).

The Minister said that this is the first realistic attempt at a coherent science policy for 30 years. I would expect him to criticise policy pre-1979. The right hon. Member for Mole Valley (Mr. Baker), who spoke in the previous debate, would not be happy with that comment.

Mr. Waldegrave

I am interested in the hon. Lady's first speech on science and technology. It is true that we have to go back nine years to find the last debate that Labour initiated on science and technology. This is the second debate within 12 months that the Government have introduced.

Ms Mowlam

The debate nine years ago was on a balloted motion, but the debates in 1988, 1989 and 1991 were held in Labour time. It is an important point, given the importance that is attached to the issue, but the Minister cannot get away with pretending that his Government have placed emphasis on science and technology in the past 14 years.

In view of the interest that is being shown in the House this morning in science and technology, I should like to deal with a number of points that the Minister made about the White Paper. I welcome some parts of the White Paper, but my worries are shared by much of industry and they concern not what the White Paper contains but what it patently does not contain. We were subjected to quotes for the first 15 minutes of the Minister's speech. Yes, industry welcomes the plus parts, but I can assure hon. Members that it is deeply worried that the White Paper is merely a structure without the meat to deliver.

Let us look at some of the ingredients that are Missing, but are necessary to secure the right infrastructure for science and technology. Labour would like to know that science and technology policy is central to the Government's thinking—that it is at the heart of what drives them forward when the economic situation is as bad as the Minister outlined. The timing of the publication of the White Paper showed the importance that the Government attach to science and technology. As everybody knows, it was published on the same day as the Green Paper on road pricing, taking the debate on science, which many hon. Members would have welcomed, out of the press and the media. That shows either incompetence by Government business managers, which is possible, the importance that Government attach to science policy or the Minister's inability to deliver the crucial centrality of science to Government policy.

The second matter lacking from the White Paper is a coherent strategy across Departments. As the Minister said this morning, coherence across different Departments is essential. Our concern is that the Office of Science and Technology is not strong enough to co-ordinate and lead that national strategy. The Minister has often said that we should debate the meat of his proposals, and we are willing to debate our genuine concern that it is not strong enough to play a co-ordinating and leading role.

Does the Office of Science and Technology have sufficient power to meet the objectives of the White Paper? We must accept that power still resides with many individual Departments. We cannot get away from the fact that 60 per cent. of Government spending on science and technology remains with the Departments. Therefore, can the OST perform that role?

Mr. Waldegrave

There is some lack of clarity in Labour policy here. Is the hon. Lady saying that all the science spend should be concentrated in one Department —that the 60 per cent. of the budget for research and development by, for example, the Ministry of Agriculture, Fisheries and Food and the Ministry of Defence should be concentrated in one central Department? [ Interruption.] The hon. Member for Kirkcaldy (Dr. Moonie) is briefing her. I do not think that she means that, but perhaps she would clarify it.

Ms Mowlam

My hon. Friend the Member for Kirkcaldy (Dr. Moonie) is whispering in my ear, but I can happily answer the Minister without that. I like my hon. Friend whispering in my ear; it is a very pleasant experience.

The answer to the Minister's question is that we want more co-ordination between Departments. There must be an overview, which is lacking at present. Let us take two Departments to prove my point.

Mr. Gyles Brandreth (City of Chester)

Is not the distinction that we have a Cabinet Minister to co-ordinate policy, whereas the shadow science spokesman is not in the shadow Cabinet?

Ms Mowlam

I am responsible for science and technology in the shadow Cabinet. I also shadow the Minister's responsibilities for the civil service, open government and a range of issues. I believe, although it is not often apparent in the Government, that we should delegate and work as a team. We have to ask, if the hon. Member for City of Chester (Mr. Brandreth) wants to get personal, why the hon. Member for Wantage (Mr. Jackson) left and why he wanted to spend more time on his German lessons than in the Department. We believe in delegation and working together. Yes, there is a voice in the shadow Cabinet on science and technology, but I believe in sharing duties with other Front-Bench colleagues.

A number of Conservative Members nodded in agreement with my point about the Office of Science and Technology. We believe that it should play a co-ordinating and leading role. I do not believe that the White Paper delivers that. The Ministry of Defence is a prime example. There is no mention of "Forward Look" in the White Paper's chapter on the Ministry of Defence. The Government have said that there will be a Government strategy for the better utilisation of defence research and development and for diverting resources from defence to increased civilian spend.

Where is that in the White Paper? Of the many Government documents I have read, the section dealing with the Ministry of Defence strikes me as a blatant example of the Ministry of Defence parachuting in the paragraphs that it wants. without the co-ordination and lead that we had hoped would be forthcoming from the Minister responsible for the OST.

The Minister said that he has ensured greater co-ordination between Departments. In that connection, the LINK programme is emphasised in the White Paper. Supposedly, it has increased the responsibility of the OST by being moved from the DTI. The OST should be undertaking such co-ordination, but, if we examine the detail of the White Paper, it becomes clear that the programme still reports jointly to the two Departments. That is another example of the OST not having the power or bottle. If the Minister doubts that, I refer him to a written question on Wednesday. The answer states: The Department of Trade and Industry, like other participating Departments, uses money from its overall research and development budget to support LINK programmes and projects where these provide a way of meeting departmental objectives."—[Official Report, 16 June 1993; Vol. 226, c. 583.] Clearly, the administration has come to the OST, but the meat of the project remains with the DTI. There are many bold statements in the White Paper, but none of the necessary mechanisms. In that sense, it is not really a - White Paper because it does not contain the necessary mechanisms to deliver the science and technology policy that we all want.

As the Minister is not happy with that argument, I cite another example to support my point. Let us consider Technology Foresight. As I said, we welcome many parts of the White Paper, and the Technology Foresight programme is one of them. We are pleased that the practices followed by our technologically advanced companies, which are already followed by our competitors, are to become part of our forward planning. We are also pleased that the Government have got out of the ideological cleft stick of believing that such a programme would be seen as picking winners. I am pleased that the Minister has managed to jump that hurdle and is satisfied that Technology Foresight will point the way forward for industry.

The Government's problem with Technology Foresight is that, although many reports will be circulated, having Technology Foresight will not in itself deliver the necessary changes. We need mechanisms to involve industry to ensure that new technologies will result, but they are lacking. Although, because of time constraints, I do not want to get involved in arguments about why the public sector borrowing requirement is so high or about the economic problems that the Government have created, I accept what the Minister said. We are not arguing that a great deal more money needs to be thrown at the problem, but unless we resource and fund development programmes, what is the point of having Technology Foresight? Without the necessary funding and the mechanisms to involve industry to ensure that the new technologies are delivered, Technology Foresight will do nothing more than circulate good ideas.

It may be apposite to remind the House that while the Chancellor was launching Technology Foresight on the country, the President of the Board of Trade was closing the advanced technology programmes that were supposed to develop the technologies of the future. Is that Technology Foresight in practice?

What new technologies does the aerospace industry think are required? It produced a report calling on the Government to support some joint technological ventures. The DTI response was to ignore and suppress the report. We welcome the general ideas, but we are worried that the OST lacks influence and that the mechanisms do not exist to develop those ideas.

I believe that the same problem applies to the section of the White Paper dealing with near-market research. Submission after submission to the Chancellor during the consultation period called for a change of heart on near-market research. I think that it was Sir John Fairclough, the architect of the policy, who eventually acknowledged that it had not been working all along.

What does the White Paper say about near-market research? Paragraph 2.20 states: the Government recognises that circumstances can arise where market forces do not work in a satisfactory manner". At least we have got that clear; the market alone cannot deliver. Paragraph 2.22 tells us that there is a general presumption that near-market work will continue to be funded by the private sector, but, where that approach breaks down, careful account must be taken of the circumstances of each individual case. I should have more faith in the Government's ability to make a commitment to near-market research if the Chancellor made it clear who or what would be funded. The White Paper presents no criteria.

We and industry need to know whether there will be any avenues of support from the Chancellor's office or from the DTI for near-market research and development other than existing schemes or, as with Technology Foresight, are we to have only window dressing rather than the concrete specifics that will make a difference to science and technology?

I deal now with the advisory bodies announced in the White Paper and which the Minister dealt with this morning, and especially the roles of the Advisory Council on Science and Technology and the Advisory Board for the Research Councils. He said that ACOST is to be replaced by a Council for Science and Technology chaired by the Chancellor, and ABRC is to be wound up and subsumed into the OST. Before the Chancellor says, as he tried to do earlier, that that is what the Labour party wants, let me make it clear to him what changes we believe would have been workable and, in view of the Minister's "open government", would have been more successful in informing the scientific community and others.

ACOST often criticised the Government because it recognised the limits that the Government put on the future of science in this country. What was the Government's response? They internalised the committee and put the Minister in the chair. Ministers disliked the ABRC because it criticised the level of spending on the science base, and the Chancellor's predecessors suppressed some of its reports because they did not like the tone. What happened to the two committees? The ABRC is to be replaced by a Director-General of Research Councils and his expert group of external advisers. The Minister has gone from accountability to anonymity in one leap.

We want a solution offering a bit of both worlds. We happily acknowledge that the A BRC needs to be abolished because resource allocation should be carried out internally, but the role of the Council for Science and Technology should be to make recommendations on the science budget to the OST and to hold the Chancellor and the director-general accountable for their actions. That cannot be done by a council to be chaired by the Chancellor himself. It is the lack of openness which worries us. If some hon. Members want to check, I refer them to Wednesday's edition of Hansard. In column 608 of the written answers, it is made clear that the Minister will not encourage the necessary openness.

The part of the document dealing with international subscriptions was also welcomed by the sections of industry listed by the Minister. However, the White Paper must be read carefully at this stage. We are told that the Particle Physics and Astronomy Research Council will not have to cope entirely within its own grant-in-aid with short term variations in international subscriptions. We welcome that, because short-term variations and currency fluctuations are a problem. It becomes clear from a closer reading of the document, however, that that will apply not just to one committee but to the entire set-up. In future, therefore, when the Government's economic policy goes awry, the whole scientific community—rather than just one committee, as in the past—will be angry. Many in the scientific community will not welcome that development.

The Opposition have long regarded the attitude to European Community funding as scandalous. This is another respect in which the Minister and the OST are not strong enough to deliver the kind of future that we seek for science and technology. The dead hand of the Treasury is very much in evidence in the relevant part of the White Paper: The system of attributing the cost of Community expenditure to Departments has given Departments a clear incentive to seek value for money from Community programmes. We are interested in getting value for money from different programmes, but the practice of attribution has been universally condemned because it has removed much of the added value that could be gained from the finance from European programmes. The White Paper's reference to attribution will clearly please those who are worried about what the Chief Secretary to the Treasury will do, but if we are seeking value for money from the available financial resources for scientific programmes for the good of the future of science and the nation, this is not the way to achieve it.

I shall not go into the question of PhDs and MSCs in view of the time and the number of hon. Members wishing to speak. I am sure that others will touch on that subject.

The Minister referred to the importance of university education. In addition to 18 to 24-year-olds, however, we must consider those who are still at school. As part of the changes in the national curriculum announced by the Secretary of State for Education recently, it is proposed to remove technology from the list of foundation subjects that are subject to testing—simply because the quality of technology tests has been criticised and because they have been likened to what happens on "Blue Peter" with toilet rolls, egg cartons and the like.

Dr. Robert Spink (Castle Point)

The hon. Lady is denigrating engineering.

Ms Mowlam

I am certainly not denigrating engineering. I am questioning the Government's ability to develop an education and testing programme for technology. The Opposition support such testing at age 14, although we do not wish the results to be made public. The Government have been sharply criticised for their lack of ability to deliver decent educational standards for the benefit of our country's children. If we are to prosper in 10, 20 or 30 years' time, our schools must provide the kind of training that will excite children, while giving them a scientific base. In his decision, the Secretary of State for Education has acknowledged the Government's inability to deliver on that.

I shall not refer in detail to privatisation and market testing, except to say that there will be problems if the Minister continues market testing of the kind that has been used so far in research departments in the civil service without stopping to think what the outcome will be. We have asked for a moratorium on market testing for the simple reason that it is driven by the desire to produce results rather by an interest in the future quality of scientific research. I hope that the Minister will have the intelligence to say, "Let us stop and evaluate what has happened. Don't let us go hell for leather." If he does not, he will ultimately destroy much of our scientific base.

The Labour party is fortunate enough to be represented in this place by a number of women and I am sure that, if they catch your eye, Mr. Deputy Speaker, my hon. Friends will seek to speak about women in science.

I am happy to welcome the positive aspects of the White Paper, but, as I hope I have shown today, a detailed examination of the document reveals a number of faults and weaknesses, which result, first, from a lack of power and cohesion in the OST and from the Minister's inability to co-ordinate across the Departments and, secondly, from the fact that the Treasury vetoes actions that would improve the position of science and technology. It is a combination of those factors which makes parts of the White Paper weak.

There can be no clearer illustration of the problem than the recently announced closure of the Warren Spring environmental technology laboratory. We have talked about "Forward Look" and about Technology Foresight. Will the Government's forward look really reveal that we need less research into the environment? Will technology forecasts say that environmental technology will not be a growth area in Britain in future? We must look not only at what the Government are saying but at what they are doing. The reality is that the DTI budget has been squeezed so far that it now has no choice but to destroy its own science and technology infrastructure—and there is nothing that the Minister or the OST can do to stop that.

The White Paper makes great play of the words "realising our potential". We should remember that the verb "to realise" has two meanings: it means "to understand" and it means "to achieve". After the long consultation period and the production of the White Paper, our understanding may be greater, which I welcome, but, for the reasons that I have given this morning, I fear that there will be a failure to achieve. That will be bad for the future development of Britain.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

There are three hours 55 minutes available for the rest of the debate and no fewer than 21 hon. Members are hoping to catch my eye. I hope that those who are called early in the debate will bear that in mind.

10.36 am

Sir Giles Shaw (Pudsey)

I am grateful for this opportunity to take part in the debate as Chairman of the Select Committee on Science and Technology, and I thank my right hon. Friend the Leader of the House for agreeing to arrange the debate early, and before too much time has elapsed following the publication of the White Paper.

Let me express my appreciation to my colleagues on the Select Committee on Science and Technology for allowing me to chair that Committee and for allowing us to produce a report in record time—as we did last autumn—to add to the discussion about the White Paper on science and technology. Sadly, I speak as a non-scientist—a matter of great regret to the members of my Committee, I understand. I have spent about 19 years in manufacturing industry, however, and can therefore claim that there will be some connection between my remarks and relevant experience. When the Committee prepared the report, we were dealing with proposals relating to the White Paper that we are now debating. We offer our approval to my right hon. Friend the Chancellor of the Duchy of Lancaster for much of what he has done, but on other matters we remain critical and unconvinced.

I am delighted to follow the hon. Member for Redcar (Ms Mowlam). The hon. Gentleman—

Ms Mowlam

Lady.

Sir Giles Shaw

What a terrible thing my lack of science is, Mr. Deputy Speaker. The hon. Lady was being a little hard when she said that the publication of the White Paper could be taken as proof positive of the actions that would follow. She and I know that new policy directions outlined in White Papers are in practice never embarked on without further changes and further pressures. I assure the hon. Lady that, on many of the issues that we are discussing today, the Select Committee will act as a careful and critical observer of what happens and will push and shove to try to ensure that some of the developments that the hon. Lady rightly seeks come to pass. I am sure that that is what my right hon. Friend the Chancellor of the Duchy of Lancaster would expect.

Changes to the advisory bodies—the Advisory Committee on Science and Technology and the Advisory Board for the Research Councils—have been recommended by many organisations, including my Committee. We welcome the proposals in the White Paper setting up the Council for Science and Technology. I do not share the anxiety expressed by the hon. Member for Redcar about the fact that it will be chaired by the Chancellor of the Duchy of Lancaster. I regard my right hon. Friend's position in the Department as central if the Government are committed to raising the profile of science in the Government. That will strengthen the position of the policies that flow from the Government. We will be looking with great interest, as will outsiders, at the membership of the council and how that membership will be distributed between the various parties that must be positioned within it.

With regard to the reorganisation of the research councils, there is a general feeling among many organisations that the structure and Mission of the councils need changing. My Committee recommended that the concept of a Mission-oriented research council should be more fully debated, that Missions should be more fully worked out and the cost-benefit studies carried through.

Frankly, it does not surprise me that there has been no opportunity for as rigorous an investigation as we might have hoped for during the preparation of the White Paper. However, I welcome the changes and I strongly hope that, when they are speedily established—my right hon. Friend the Chancellor of the Duchy of Lancaster announced that they would be established very speedily—there will be a period of stability for the new system to allow it to take root and to flourish effectively.

I believe that Technology Foresight is probably one of the most important initiatives—albeit belatedly in relation to the United Kingdom—for the Government to undertake. Many people believe that the Government's efforts to support winners in science and technology are not always the best ideas. That is clear from projects such as Comet and TSR2. However, a co-ordinated programme of research foresight technology to select future generic technologies to make them applicable across a number of scientific disciplines is surely a very welcome step and one which many of our main competitors, particularly America and Germany, have used extensively for many years.

Research foresight activity on its own is not enough. Using findings in industry to make new and better products ahead of the competition is surely the key to wealth creation. I suspect that my Select Committee will want to monitor those developments extremely carefully to relate them to the actuality of the technology produced and, one hopes, see real improvements in competitiveness in our economy.

I want now to consider the "Forward Look". The preparation by the Office of Science and Technology of an annual "Forward Look", which greatly extends the scope of the current annual review of Government funded R and D, will provide more openness and will allow us to judge the OST and the policy that it pursues. Any Select Committee would welcome that degree of commitment by the Department that it is technically monitoring on behalf of the House. I believe that that will be one of the key changes that the Select Committee will want to expand and explore in the years to come.

Whether the policy will be implemented effectively will, of course, depend on the Department's willingness to comply. In that regard, I believe that one of the key points that I share with the hon. Gentleman, the hon. Member for Redcar—[Interruption.] I am sorry, the hon. Lady. I suppose that I score zero in the attainment test: eight for creative expression and zero for technical experience.

The important point is whether the policy to which I referred will be implemented effectively. The willingness to comply will be the crucial factor. There is anxiety because the way in which the Government's research is departmentalised at the moment will continue uninfluenced. However, I set considerable store by the co-ordinated regime set in place under the chief scientific officer, whose upgrading the Committee recommended and whose appointment I am pleased to welcome. In addition, I place considerable emphasis on the way in which, when these isues are debated, there will be genuine priorities that will be genuinely agreed and which will stick.

If that happens, I believe, unlike the hon. Member for Redcar, that that will lead to genuine prioritisation within the Office of Science and Technology. As my right hon. Friend the Chancellor of the Duchy of Lancaster is aware, my Committee was clearly of the opinion that ultimately there should be a Ministry for Science which would develop and produce policy and outline and implement policy for the scientific and technological development of this country.

Education is obviously a huge theme in any discussion of science and technology. The White Paper's recognition of the critical importance of education and training is greatly welcomed. In my Committee's interview recently with expert witnesses, education and training of young people below university standard was revealed to be the area which gives major cause for concern. It affects the ability of companies to accommodate changes in work practice to take into account new technologies with the same speed and flexibility as their overseas competitors. A very close eye must be kept on the way in which education in science and technology delivers the goods, and I am sure that my Committee will do that.

I suspect that defence R and D is the biggest problem with which my right hon. Friend the Chancellor has to deal, and I know that he is a man of considerable patience. It is clear from the White Paper that although the words may be useful and amiable in their way, they do not betoken a significant shift of defence R and D to civil expenditure. Defence R and D is the greatest recipient of Government research funding at the moment and we have suffered, along with America and France, in relation to the amount of civil funding compared with that in Japan and Germany, which have negligible defence R and D.

On a global scale, the ending of the cold war must be the biggest influence on the way in which the structure and organisation of science and technology investment can now be changed. The demand for defence-specific R and D in the west is certain to fall and the United Kingdom will be no exception. That reduction should not be seen as an opportunity to reduce total Government spending. Instead, the funding must be transferred to civil R and D.

Furthermore, defence R and D should, unless there are cogent reasons against it, be designed with spin-off and spin-in measures with civil activity as a key purpose. I hope that the OST will look closely at that. Sadly, although the White Paper recognises that aim, it does not provide the OST with any control in that respect and it relies heavily on the co-operation of the Ministry of Defence. I expect that my Committee will look at that aspect very keenly in the years to come.

Innovation is surely the key to wealth creation in this country; it has been the subject of a House of Lords Select Committee on Science and Technology and it is a key component of my Committee's investigations. Without effective innovation, no amount of research foresight activity, international collaboration or other activities described in the White Paper will lead to the creation of wealth, which is absolutely essential to our future.

Japan has few basic research achievements if one considers the number of Nobel prizes that Japan has won.

However, Japan has been inordinately successful in exploiting technology and creating wealth. As my right hon. Friend will know, my Committee is currently investigating the way in which the science base may be translated into competitive and innovative technology and we will be visiting Japan later in the year. Information to date leads to the view that there is an endemic problem in our education, training and culture which must be addressed.

The Committee recommended that it would be appropriate for the OST to have an overview of schemes intended to encourage innovation in industry to ensure that Departments worked to common policies and that all schemes were part of a coherent framework for providing industry support. I urge the importance of that activity and hope that there will be close co-operation between all the Departments concerned. We recommended that the OST and the Department of Trade and Industry should work to ensure that the near-market policy on research funding is re-examined. Reference has already been made to that and we welcome the signs that that policy will be relaxed. We welcome even more the evidence that it has been relaxed.

In respect of R and D funding, few would argue with the basic proposition that investment in science ultimately creates wealth. It is, therefore, becoming more apparent that wealth is often a precondition for that investment. The oft-lamented view that the United Kingdom does not invest enough in R and D is not just a problem for consideration by the Government alone; it should also be considered by industry. Of estimated United Kingdom civil research funding in 1990 of £9.4 billion, just under 60 per cent. was funded by industry and 28 per cent. by the Government. That figure for industry compares with 60 per cent. in Germany, 70 per cent. in Japan—the highest of any nation—and 40 per cent. in France.

While we have our current public sector borrowing requirement problems, it is unlikely that significant additional Government funding of civil research will be forthcoming. However, we must ensure that savings in defence R and D are transferred to the civil side. At the same time, industry must be encouraged to increase its expenditure and the City and shareholders must be pressed to face up to the importance of such expenditure to companies and, thus, to the country. Sadly, no action is proposed on that in the White Paper. What is needed now is a follow-up to the White Paper which considers industry and sources of finance and the investigations that my Committee might undertake to ensure that there are proper routes by which long-term funding can be directed towards industrial development in R and D.

On the international side, the extent to which the same new or generic technologies are reflected in each country's list of priorities is remarkable. Together with the significant levels of investment often required in setting up research facilities, that means that collaborative research is increasingly taking place, and I welcome that. That may involve the setting up of common facilities like CERN or the European bio-information institute which we are pleased to see will be located here, or it may just involve collaboration between organisations in different countries, as happens in the framework programme.

Whatever the situation, the OST must ensure that the interests of the United Kingdom are fully reflected in such collaborative projects, that United Kingdom organisations are aware of and fully participate in such projects, whether or not the United Kingdom is directly involved. We must take every opportunity to host international scientific facilities when they are germane to United Kingdom interests. Although the Economic Community is a prime region for collaboration, we should not neglect opportunities with other countries.

We are pleased that the dual funding policy is to continue. We consider it important, as do our colleagues on the House of Lords Select Committee, that universities continue to be regarded as whole institutions.

Let me refer to one or two broader themes. It is widely recognised that the United Kingdom's science base is competitive and internationally respected; indeed, our clutch of Nobel prizes are strong, but it is a fact that the tendons of technology are less well developed for a major industrial economy such as ours. I respect the view that manufacturing industry itself must be the lead influence for turning science into innovative technology. Customer pull, in the jargon of marketing, must be the preferred route.

There is no denying that for long periods there has been industrial decline in this country. The 19th century smoke-stack industries became obsolete, or failed to generate funds for investment, or failed in the free competition that faced them, or failed when imperial markets disappeared, or failed in countless recessions or economic difficulties, or failed when those who owned or managed them had not the talent so to do—a whole range of reasons, a whole range of excuses. That has passed. But with the demise, our industrial culture also departed. To revive our industrial culture must be our first priority. It starts with education. How we welcome the development, albeit belatedly again, of a proper design and technology and science and technology base for all children passing through our education stream.

The emphasis must shift back towards the importance of industry in general and the making of things in particular. The link between the creation of new materials and products on the one hand and the creation of wealth on the other hand must also be re-established. We must lift, too, the status of our engineers and our producers, as they do in Germany. The belief that "profit" is a dirty word must give way to the recognition that risk should be rewarded and that commercial success in the marketplace has to he applauded.

I am glad that non-vocational qualifications and the various derivatives therefrom are being rapidly developed to stand alongside other academic qualifications. Let us never forget that small or medium-sized enterprises will be looking to schools rather than to universities to provide the skills that they need to make things happen in the marketplace.

If we are serious, too, about regaining the jobs that were so tragically lost by recession in recent years, the creation of new small businesses is much more likely to help than the expansion of larger ones when it comes to a decision on increasing jobs. New investment in new technology in large companies is frequently based on a reduction in manning levels. The preferable basis for a decision to invest in new manufacturing technology is to add values to the product and to improve quality for the consumer. Ultimately, science and technology must be judged as ingredients—important. but ingredients only—in improving consumer satisfaction. It is the consumer in the marketplace who ultimately determines all commercial success. Any restoration of our industrial culture arid any improvement in our technology must be matched, too, by an improvement in our capacity to market products effectively.

The White Paper is forward looking. I trust that it will be a catalyst for change to help to secure Britain's place in the intensely competitive and challenging environment in which our future lies.

10.53 am

Mr. Gordon Oakes (Halton)

I warmly welcome what the hon. Member for Pudsey (Sir G. Shaw) has said. I agree with almost every word, and I applaud the way in which he delivered his sentiments. Whether or not the hon. Gentleman has scientific qualifications, the Select Committee on Science and Technology is in very safe hands if speeches of that calibre emanate from its Chairman.

As the hon. Gentleman said, this subject is absolutely vital to the future of our nation. Look at Britain—we are a small, fairly overcrowded island, and we have few, if any, natural resources. However, we have the skill and inventiveness of our people. The White Paper might further enhance and co-ordinate the inventiveness of our people.

If this matter is the Government's top priority—the Secretary of State indicated that it was—why, oh why, have this debate on a Friday? Friday is the only working day of the week when hon. Members can have contact with their constituencies. They need to be either in their constituencies or on their way to them on Fridays. Twenty-one hon. Members are present on a Friday—probably the highest attendance ever on a Friday for non-Maastricht business—in order to contribute to the debate. I should have thought that we could have had prime time for such an important subject.

Like my hon. Friend the Member for Redcar (Ms Mowlam), I agree with much of what is in the White Paper, but I am worried about its implementation. The White Paper says all the right things—some of them new, some of them pious—with which few people could disagree, but how will it be implemented? As my hon. Friend asked, where is the co-ordination between Departments?

What happens when there are breakthroughs in science and engineering, particularly engineering? We are a nation of inventors—look at the number of Nobel prizes that this small country wins, and, in particular, at the pharmaceutical industry and the number of lives that have been saved because of inventions in this country. How often are British inventions developed abroad? The White Paper does not address that problem. The Secretary of State might say that that is a problem for the Department of Trade and Industry—indeed it is—but I want co-ordination.

The fault lies not with our scientific research, our inventors or even our company managements, but largely with the banks. The banks cannot see further than their noses or further than a week's profit. When something is invented or a breakthrough occurs, the company and inventor concerned want to develop it in this country, but they cannot do so because of a lack of funding from our banks. No country—certainly not the United States, Japan or most of our European competitors—would allow brilliant inventions and breakthroughs to be developed in other countries. The list is endless, as all hon. Members know.

Did the Secretary of State have discussions with, or make representations to, his right hon. Friend the Secretary of State for Health when the limited list was considered? There is no doubt that if the limited list is accepted in the form in which it was proposed, it will kill stone dead research in the pharmaceutical industry, one of our most profitable industries.

When the limited list was introduced in such a rough-handed way, in every sphere in which it applied, research and development were stopped in the relevant branch of medicine. The Association of British Pharmaceutical Industry spells that out in detail in an advertisement in The House magazine.

I am not saying that cuts do not have to be made in drug expenditure—they do. However, there are other ways to tackle it. I hope that the Chancellor of the Duchy of Lancanster, who has special responsibility for science and technology, will have a word with the Secretary of State for Health and say, "Look what you will do to research in the pharmaceutical industry if you proceed in that way."

My hon. Friend the Member for Redcar mentioned the fact that no extra money will emanate from the White Paper, especially with regard to defence. Of course, defence expenditure will decrease. Thank God it will. It was bound to decrease, because our biggest defence threat is rapidly disappearing. We still need forces, but we do not need the same amount of research that we had at one time because of the sophisticated equipment that our potential enemies might have had. Where has the money gone? There will be a net loss to research and development when the defence budget is reduced.

I quote from a briefing document from the Save British Science campaign that puts the matter excellently and more succinctly than I could: The MoD is the government's biggest spender on R and D, a massive £2.6 billion p.a. But it has clearly kept a considerable distance from the White Paper and has contributed nothing of significance to the overall approach. There are no plans, similar to those for example in the USA, to employ MoD facilities to assist industry of the S and EB. None of the past reduction of defence R and D expenditure, now about £0.6 billion less p.a., has been transferred of civil R and D. That is a glaring omission from the White Paper—it has not been properly tackled. The funding that has hitherto gone to research and development will be lost for ever.

I have another concern—it is a niggling point because, obviously, my base is on the chemistry side of research and development. There is considerable concern in the Chemical Industries Association and the Royal Society of Chemistry about the way in which some of the funds and research councils are being set up, which could act to the detriment of chemistry as a subject.

I quote from an excellent document produced by Mr. Stephen Benn of the Royal Society of Chemistry: For example, take the case of biological organic chemistry which is crucial to the new developments in the pharmaceutical industry. The Society is concerned that funding for this important and exciting new area will fall between two stools. Why? Because (a) the Chemistry Committee (or equivalent) of the new EPSRC will not fund such research on the grounds that it seems like biology; (b) The new BBSRC will also not fund this work because they will give preference (naturally enough) to more obvious biological research. In summary: while biologists have three RCs to approach for funding … and physicists have two RCs … chemistry is in danger of not having one single obvious RC to call 'home'. That is a real problem. I hope that the Royal Society of Chemistry will be one of the organisations that sit on the advisory bodies as it can give invaluable independent advice to central Government.

Environmental research will probably replace defence research at the top of our agenda. Environmental research is a new frontier science, because, if we are to advance as a nation with the standard of comfort to which we are accustomed, the only sphere of activity that can clean up the planet are those who have polluted it. The only salvation for this country—or, indeed, the world—lies in what our chemical industry can do to redress the imbalance of the past and ensure that it does not happen again.

I am proud of ICI in my constituency and its research and development. I am proud of the fact that it developed an ozone-friendly substance called KLEA which does not contain chlorofluorocarbons. The company has had nothing but coals heaped on its head after spending £100 million and making a breakthrough that led the world. Greenpeace still attacks it, and says that the substance is not the answer. I do not know what Greenpeace wants instead of KLEA.

That is an example of a company spending a vast amount of resources, making the breakthrough and producing the substance in my constituency across the river at Runcorn but getting nothing but abuse for its activities. We must stop behaving in that silly way towards our industries and criticising them.

I have so much that I want to say, but many hon. Members on both sides of the House wish to speak. I do not want to be accused of abusing my position as a Privy Councillor by giving a long speech or being called early in the debate. I agree with what the White Paper says about the importance of science education at an early age: it is an age-old problem. In those far-off days before 1979 when we had a Labour Government, I was the Minister of State responsible for higher education and science. At that time, the problem had been there for 20 or 30 years and it is still there now. It is not a party-political problem.

The problem is the lack of attention that is given to science as it is pushed lower down the curriculum in our schools and the preference that many of us and the media have for the arts. People will look at a cathedral, say that it is a wonderful structure and ask: "How could the mind of man devise this?" They never look at a machine in that way, yet it is just as important as far as the practical lives of people are concerned.

We should face the fact that science is more difficult at examination level. Science subjects are more difficult than the arts and that deters some people. Science costs more. Certainly, the higher one goes up the scale, the more a science degree costs, compared to an arts degree. That may be a deterrent to hard-pressed local authorities, hard-pressed opt-out schools, and so on. They will clip the money available for science, because it is expensive.

The real problem does not lie with science teaching, or lack of it. It lies with another subject—mathematics. We cannot have an innumerate scientist, whether it is archaeology, astronomy or zoology and right through the gamut of the sciences. If a youngster does not have a mathematical base, he can never become a scientist or an engineer. It is important that although the White Paper stresses science, it does not stress mathematics sufficiently. People who want to become scientists but do not have that mathematical foundation are doomed to failure, because they cannot advance in their subject.

Mrs. Anne Campbell

Does my right hon. Friend agree that the new system of university funding, which effectively downgrades mathematics compared with other practical science subjects, is damaging the provision of mathematicians and, ultimately, our science base?

Mr. Oakes

I entirely agree with my hon. Friend. It was bad enough before—as my hon. Friend rightly said, it is now going in the wrong direction altogether.

This subject is not a party-political one—it is too important. As I said at the outset, it is vital to the whole future of this nation. It is essential if we are to create jobs. But it is more than that. If we are to keep the jobs we have at present, there must be a co-ordinated foundation of research in science and engineering.

When the Minister sets up the research councils and undertakes his future activities in Cabinet, I beg him to fight his ministerial colleagues for science and research development and not let them blindly damage the structure of research and development, whether it is the Ministry of Defence, the Department of Health or any other Government Department. I urge him to fight for the future foundations of science in this country.

11.9 am

Mr. Robert Jackson (Wantage)

For me it is a welcome coincidence that this debate comes so soon after I left the Department dealing with the issues that we are discussing today. Ex-Ministers retain some relevant inside knowledge of their former Department for perhaps a month after leaving it, so I am still just within my sell-by date. I assure my right hon. and hon. Friends that I do not intend to follow recent precedent and turn what I have to say into any sort of personal statement. [HON. MEMBERS: "Hear, hear."]

I congratulate my hon. Friend the Member for Boothferry (Mr. Davis), who has taken over from me as Parliamentary Secretary to the Office of Public Service and Science. I hope that he enjoys, in his first departmental office, what Macaulay described as that closely watched slavery that is mocked by the name of Power. I was pleased to have had the opportunity to take part in the discussion within the Government that led up to the publication last month of the White Paper on science and technology. I shall always remember with special pleasure and real affection the officials and leading scientists with whom I was privileged to work.

I want to speak essentially about the Government's role in general support for science and technology, especially through the research councils. Another large topic concerns the role of Departments as customers for research, upon which I hope that the House will be allowed to have a debate in good time for the conclusion of the further review that is announced in the White Paper. Many constituencies will be affected, and hon. Members should have an opportunity to consider the issues.

The White Paper embodies a carefully constructed balance between what are perceived to be two distinct concerns: the concern that Government support for science should be directed to the most intellectually significant work; and the concern that the public funds devoted to science should show demonstably useful returns for the people of the country, especially in terms of wealth creation.

The House will notice that I say that those two concerns are "perceived" to be distinct. That is certainly, I am afraid, the case within Whitehall. In my experience, however—my right hon. Friend reported this in his opening speech—the more informed and far-sighted industrialists recognise that the best way for the Government to support wealth creation is for them to nourish the science base and the ideas and highly trained people that it produces.

The main message that I want to leave with the House is that it is critical that, in the implementation of the White Paper policies, a proper balance should be maintained between those two concerns.

It is important that Government spending on science and technology should have a clear, easily recognised and explained rationale. Otherwise, matters that should be treated on a long-term basis will be overwhelmed by the whims of Whitehall fashion, or lost to sight in the all-too-brief half-life of the passing parade of Ministers.

It is also important to recognise that, while the role of Government in support of science is of critical importance, it is, inevitably and necessarily, a limited role. Putting on one side, for another occasion I hope, the question of how Departments should manage the direct procurement of science for their departmental purposes, the central role of Government in supporting science and technology, as the White Paper clearly argued in chapter 3, is to remedy what economic analysis identifies as a "market failure" in research and development.

Fundamental, speculative science and strategic generic science and technology are necessary for the progress of any science-based economy. As the White Paper clearly says, because of the speculative nature of that work, the long lead time involved and the inescapable openness of most research involving academics, market-orientated operators cannot be expected to fund that kind of work in any comprehensive or reliable manner. The essential role of the Government in supporting science is to fill that gap.

It must not, however, be the role of the Government to second-guess business in respect of the application of R and D to commercial ventures. Paragraph 2.20 of the White Paper makes the point clearly that the Government are not equipped to make commercial decisions. More fundamentally, the effect of too much Government involvement in business decisions about R and D is to diminish the sense of responsibility for R and D within business.

One of the most hopeful achievements of the 1980s, making for greater competitiveness in British business, was the growing recognition in our boardrooms that such matters as R and D and training are too important to be left to the Government. I hope that we will do nothing in the 1990s to undermind that dawning enlightenment.

One of the reasons, above all, why the Government must limit their aspirations in the matter of supporting R and D for business is, quite simply, that the resources that the Government have available for general support for science and technology are, regrettably, extremely limited. The scale of investment required for R and D for business in a science-based economy quite simply dwarfs the resources that are allocated in general support for science by the Government.

Moreover, it is a simple fact that, in an economy whose leading companies are more and more global in their scale and aspirations, the name of the game in R and D has long ceased to be to exploit the intellectual resources of only one country.

If it is true that the Government's investment in general support for science is simply too small to have much leverage upon R and D for business, it is also true, however, that those limited funds are already more than overstretched in fulfilling what I have described as the central role for the Government in this matter—support for fundamental and strategic science.

The bottom line, as they say, is that any significant shift of Government R and D funding to support what are taken to be business objectives will, in the first place, never be enough to make much difference to business and, secondly, could have potentially catastrophic effects upon the availability of resources for basic and strategic science.

To be more concrete, let me give some figures to illustrate what I mean. Twenty per cent. of the annual research councils' budget amounts to some £240 million. That sum equates to no more than 4 per cent. of the estimated annual spend by British industry on R and D. Yet that £240 million covers just about the whole of the cost of the Medical Research Council, on which we spend currently £257 million, or it equates to the cost of supporting all the work done in astronomy and particle physics, at a cost of £190 million, together with the whole of the sum devoted to the Economic and Social Research Council—£53 million.

I have spoken of the White Paper as embodying a carefully calculated balance between the concern for good science and the concern for wealth creation. I hope that what I have said so far explains why that balance is important. Now let me say something about some of the critical points on which the maintenance of that balance will depend and concerning which I believe that the House would be right to exercise great vigilance. I hope and believe that the Select Committee on Science and Technology will play a leading role in that.

First of all, and perhaps most fundamental, there is the question of the balance between OPSS-funded activities and those funded by other Departments, notably by the Department of Trade and Industry. I regret that the White Paper was unable to furnish evidence of a conclusive understanding on that point.

I hope that my right hon. Friend will pay close attention to decisions taken by other Departments that might create pressures for compensating activity on his part. I hope that neither he nor the research councils will feel it necessary to divert their efforts to make good gaps that may be created by decisions, especially the unilateral decisions, of other Departments.

Next, there is the question of the general direction of the research councils, which has already been mentioned today, and on which I received a reassuring answer from my right hon. Friend at Question Time recently. My right hon. Friend recognises that he assumed a great responsibility when he persuaded the Prime Minister to create a Ministry for science. That major step towards centralisation has had the inevitable consequence of the end of the Advisory Board for the Research Councils—the ABRC—as a quasi-executive body, at arm's length from the Government, operating as a buffer between them and the research councils.

The role played by the ABRC is now to be played within OPSS by the Director-General for Research Councils. It is critical that the person filling that position should understand the world of fundamental science, and that he or she should have an understanding of the role that reflects the rationale for research council funding and the balances that are set forth in the research White Paper.

Each individual research council has a new Mission statement, promulgated, no doubt constitutionally, in the White Paper. Those Mission statements are carefully balanced, along the lines that I have described. It is critical that the new chairmen of the research councils, drawn as they all will be from business, should honour that balance, together with their council and chief executives. I hope that they will never be allowed to forget that they are independent organisations operating under royal charters, not Departments or dependencies of the Government. Their accountability is essentially for how they spend the money allocated to them, not for what they spend it on within the terms of their charters.

One of the White Paper's welcome features is the creation of the new Particle Physics and Astronomy Research Council, which should help to sustain support for the important fundamental sciencies by reducing the extent of direct competition for their funding with other research council activities. However, it is essential that the words of the White Paper and the new Mission statements about the continuing responsibility for basic science of all the research councils should be respected. The PPARC must not be allowed to become an alibi for a general retreat from fundamental science.

Another key point of balance relates to universities. The White Paper proposes to retain the dual support system. I am glad about that, because, within reason, decentralisation and pluralism and the multiplicity of decision centres are necessary for success in supporting speculative science. But it is important to emphasise two implications of retaining the dual support system which are not sufficiently recognised in the White Paper.

First, because they constitute only one side of the dual support system, the research councils cannot develop new funding policies without reference to the universities. The university research economy depends on inputs from the research councils and, because of the limited funds available for those purposes, even a quite small redirection of research council funding could have serious effects on research in universities. That is another point of balance which will need careful watching.

There is a second and wider issue relating to the dual support system, which involves the new machinery for co-ordinating research councils and higher education funding councils described in the White Paper. Just as the balance in the White Paper between concern for scientific excellence and concern for science and technology in support of business must be carefully honoured and respected, so the same balance must be reflected in the working of the university side of the dual support system.

While it is a vulgar category mistake to suppose that applied research and development cannot embody excellent science, there should be no departing in university or research councils from the principle that the limited funds provided by the Government for research must be applied only in support of scientifically significant and valuable work.

Critical mass in research is important. It has been recognised, at least since the ABRC study in 1987, that the research money provided to universities has been dispersed too much and insufficiently concentrated on centres of excellence. Current HEFC research policy is producing a desirable shift to the best research departments in the leading research universities. It would be a matter of great concern if that policy were to be reversed in the name of relevance to wealth creation.

I have given merely an outline of a few of the difficult balances that my right hon. Friend and my hon. Friend the Parliamentary Secretary, and those who work with them, will have to keep in mind as they implement the White Paper. I am sure of their good will for science in the task, and hopeful of their success—and that of their successors —in it. However, I do not think that all parts of the Government have either understood or accepted the rationale for Government support for science and technology which I have described and which I believe is embodied in the White Paper.

Ultimately, we all have to recognise that the Whitehall machine is a pretty crude operation, and there is always the danger that the nuanced and subtle elegancies of policy balance in a White Paper will in practice be boiled down into simple and potentially destructive operational conclusions. I know that my right hon. Friend will want to ensure that that does not happen.

On this, perhaps rather minatory, note, let me briefly add a few concluding words about one of the great gaps in the White Paper—that relating to defence, on which I share the perceptions of my right hon. Friend the Member for Pudsey, the Chairman of the Select Committee. I do not want to sound like the Irishman who, when asked for directions, answered that he would not start from where his interlocutor found himself. I well understand the Government's dilemma in relation to defence research. Defence industries are already under great strain, and the motto "Let's not make the situation even more difficult" has consequently been the order of the day.

However, the true starting point for the debate must be the recognition that, as one of the big three after the war, aspiring still to sit at the top table, Britain has now for four decades taxed herself for military purposes beyond the strength of her economy.

One of the most serious aspects of that overtaxing is the absorption of scarce scientific and technological talent in defence-related work, with little or no civilian benefit and with high opportunity costs from the diversion of efforts from civilian purposes. The result is that far too many of Britain's leading industrial concerns are defencedependent—an effect reinforced by generations of industrial strategists in high places investing in the existing and politically influential, and confusing success in subsidised exporting with the achievement of real and positive economic returns.

I shall suggest an alternative industrial strategy for those who are so rightly anxious to promote competitiveness and innovation in British industry. The cold war has ended, the requirement for sophisticated weapons is collapsing and, after the Iran debacle, international arms registers are the order of the day. The military bias of British and American industry in the post-war period no longer makes political sense—just as Japanese competition has long shown that it does not make economic or industrial sense.

What is needed is an industrial strategy designed to facilitate the most rapid shift of resources freed from a contracting defence industry to be used in competitive industries serving civilian markets. I make no judgment about how it would be best to do that, except to say that market mechanisms will work most effectively.

The hon. Member for Redcar (Ms Mowlam) has been showing approval for some of my remarks so far, but I have to say that I am deeply sceptical about Labour's idea of a defence conversion agency. Whatever way is chosen, I have no doubt that it is in that sphere that the present generation of Ministers has the best hope of improving long-term British industrial competitiveness.

If that effort were to be undertaken, not the least important of the resources to be freed would be the huge resources of scientific and technological brainpower that are still tied up in our defence industries. It is a pity that the Government have Missed the opportunity to address that topic in all its depth and scale in the first major science and technological statement for 20 years, which comes at a time when the end of the cold war has so self-evidently created an occasion for a fundamental rethink on the subject.

A dangerous fallacy is still lurking in the air—that some way can be found to erect a strategy securing British industrial competitiveness on the basis of the Government's support for science and technology. I hope that I have shown why that idea is both misconceived and deeply threatening to one of Britain's remaining areas of undoubted world-class excellence—its excellence in fundamental science.

The Government's White Paper provides a basis from which that fallacy can be combated. Buy my last word today is that the influence of that fallacy will be successfully resisted only if my right hon. Friend and my hon. Friend, and those who work with them, stand by the settlement embodied in the White Paper and hold fast to the rationale for their work which it sets forth.

11.28 am

Mr. James Wallace (Orkney and Shetland)

I am sure that the House is indebted to the hon. Member for Wantage (Mr. Jackson) for his contribution. He may not be a member of the Front-Bench team now, but the insights that he gave in his analysis of military research and development and its consequences, and the importance of the science base, are valuable. I am sure that he will continue to make such contributions from the Back Benches.

Although the hon. Gentleman said that his speech was not a personal statement, it contained echoes of other personal statements when the hon. Gentleman slightly lifted the veil on what has been going on within and between Departments. That confirmed many of our suspicions.

In order to catch the last plane to my constituency this evening I shall have to leave before the end of the debate. I have written to Madam Speaker about that and told the Front-Bench spokesmen. I shall read the report of the debate in Hansard.

The Chancellor of the Duchy of Lancaster, who has explicit responsibility for science and engineering technology, is not just any Cabinet Minister but one who, by his performance today and in the past, shows clear enthusiasm and commitment. Contrary to what we have heard from the Opposition, this is the second such debate that we have had in Government time in 53 weeks. The White Paper heralds the biggest shake-up in the approach to science for two decades.

In view of all those ingredients, we should be excited at the prospect of a serious attempt to come to grips with a hitherto neglected and undervalued area of our national life. However, I fear that all too soon the excitement will disappear and we shall be left with the feeling that we have missed yet another opportunity for British science. The extent to which the Chancellor of the Duchy used quotes to try to buoy his case suggests that he also appreciates that.

As some hon. Members have already said, problems will be produced not so much by what is in the White Paper as what is not. However, it would be wrong to be wholly critical because the document contains positive proposals. The Technology Foresight exercise offers the prospect of a more purposeful sense of direction. Its embodiment of the annual "Forward Look" and the emphasis on a more open approach are welcome developments. I hope that there will be a more open approach and that we shall not see narrow objectives and straitjackets. The document is an opportunity to bring science and technology, Government and industry into a much more constructive partnership.

The Chancellor of the Duchy identified one of the criticisms of the White Paper, although he would claim that it is misplaced. It is the White Paper's failure to address funding. That is not a matter for another time and another place, because the issue is crucial. We take the view that the White Paper fails adequately to address industry's poor record on innovation and what can be done about it. I welcome the comments by the hon. Member for Pudsey (Sir G. Shaw), who is the Chairman of the Select Committee on Science and Technology, about the current investigation into innovation. We look forward to the conclusions. Both those failures point to an underlying failure by Government Departments to get their act together. The speech by the hon. Member for Wantage confirms that.

Almost every hon. Member who has spoken so far has mentioned the Ministry of Defence. The White Paper contains no strategy for conversion from military to civilian research and development. Jobs are at stake the length and breadth of Britain from central Scotland to —dare I mention it?—Siemens Plessey Systems in Christchurch. If there is no strategy, many talented people will take their talents abroad, and that will be a great loss to the nation.

It is important to acknowledge past achievements, not least in basic science research. That has been generously funded over many years, but, although the Government may claim that during their 14 years in office there has been an increase, the application of a proper deflator to increases in salaries and in the cost of equipment shows that there has been a real reduction in resources for science over the past 14 years. During that period of reduction in our country, most of our competitors, recognising the importance of science in supporting modern industry, have been increasing their commitment to academic research.

There is a need to inject more resources and to make sure that we offer attractive careers to our young scientists. That means tackling low academic salaries and providing a career structure. I regret that, in response to an intervention, the Minister seemed to take a complacent attitude to that, reflecting the White Paper's attitude of passing the buck to the universities to let them sort out the problem. Anyone who knows about the difficulties faced by universities over their funding knows that it is a forlorn hope to expect them to undertake that from within their own resources.

It is disappointing that there is inadequate support from other Departments, especially the Department of Trade and Industry. When the President of the Board of Trade was stalking the country in his Back-Bench days, he made many speeches about reversing the trend of the decline in science funding. When he took up his present post we had great expectations of his doing something positive and imaginative. Instead, on the day of the White Paper's launch, the DTI announced its withdrawal from a range of new technology initiatives.

In the past week, the closure of the Warren Spring Laboratory was announced. That was mentioned by the hon. Member for Redcar (Ms Mowlam). As the right hon. Member for Halton (Mr. Oakes) said, many people identify the importance of the environmental challenge as the new frontier for science and research and development. There is a need to devise new, clean technologies, and Warren Spring could have been said to be at the cutting edge of that new environmental technology. Now it will be lumped together with the Atomic Energy Authority research station at Harwell.

Many of us recall how the dead hand of Harwell stopped Dr. Salter proceeding at Edinburgh university with his innovative ideas for wave power. Although Harwell is no longer dominated and obsessed by the amount of money spent on nuclear research, it has held back at least one project that could have led to an important development in renewable energy technology.

The attitude of the DTI is to limit support to the exploitation of proven rather than new and uncertain technologies. If that attitude prevails, short-termism, which has bedevilled British industry, preventing it from trying to innovate and establish a link between academic science and industry, will be made worse.

I should like to quote from a letter to my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) from Dr. John Isaacs of the department of pathology at Cambridge university. My hon. Friend wrote to him after he read an article about an important developoment, CAM PATH-1H, in the treatment of rheumatoid arthritis. My hon. Friend sought more information and in his letter Dr. Isaacs stated: Progress is slow primarily as a result of financial constraints. The nature of our research makes it extremely expensive, and whilst Government agencies such as the Medical Research Council do their best, they cannot provide all of the necessary finances. Sadly, science does not carry a high political profile in the UK and there seems little prospect of increasing central funding to the Medical Research Council for work such as ours. Indeed, the current Government has put clinical science funding squarely into the court of Industry. Not surprisingly, however, Industry is primarily interested in products which are close to major clinical applications. Thus we have been developing CAMPATH-I H and related compounds for more than 13 years, but an Industrial sponsor has only recently been found. Furthermore, such funding may remove one's 'scientific licence' during product development or block further novel developments for purely corporate reasons, and is therefore far from ideal … I apologise for venting our frustrations upon you in this way but we all feel very let down by the recent Science White Paper which does not tackle the fundamental problems of research funding. That letter is from a person who has been very much involved in an important development in medical science. It is not the view of a politician but of someone in the field. I hope that, collectively, we will take his criticisms to heart as we address these issues.

It is clear that academic science cannot be translated into new products and processes without expenditure by industry. It is sometimes tempting to lay the blame at the door of Governments, but the problem is so endemic that the problem could be laid at the door of this Government or that of the last Labour Government or even the last Liberal Government. It has been a problem for at least a century.

Our poor showing in adapting expertise and brilliance at the basic scientific level and putting that into product development is a measure of industry's failure to pick up and exploit the creativity of British science. The Government blame the scientists and say that they are not coming up with the right kind of research, and use their usual panacea of putting business men in charge of the research councils. In other words, those who have failed British science—I direct this not against individuals but against the generality—are being put in charge of research and could infect it with the same short-termism that has bedevilled British industry for some time.

It is important to recognise that there is a cultural problem. The very fact that many hon. Members have spoken of the need to raise the status of scientists, engineers and technologists is indicative of the lack of proper status from which they have suffered for so long. It is also important to concentrate on education and training. The national curriculum addresses the need for pupils up to the age of 16 in England to be provided with basic teaching in science and technology, and that is welcome. However, a curriculum commitment is worthless unless there are the teachers and the equipment to make it a reality. With too few teachers of maths, physics and technology, it is clear that we shall need a crash programme to train teachers in those subjects and secure adequate provision of text books and equipment.

Beyond the age of 16, A-level specialisation, particularly in England, means that many bright pupils do not study maths or science. While I could not be held up as a good example, having been allowed by my school to give up all science except maths—I am pleased to learn from the right hon. Member for Halton that that redeems me—at the secondary 2 level, there is still an opportunity to pursue at least one or two sciences to a much later stage within the Scottish system.

We must also recognise the value of scientists and engineers and encourage the employment of graduate scientists and engineers. For some time, my party has been advocating a scheme that was pioneered in West Germany in the 1970s, whereby small and medium-sized firms were paid 50 per cent. of the salary of graduates on a sliding scale over five years to encourage them to take on science and engineering graduates. That scheme was wound up in West Germany in the 1980s, because it had achieved its objectives, but has recently been reintroduced in east Germany to try to bring on that development there. We should consider that here.

We must recognise, as the right hon. Member for Halton said, that there are also problems with the financial institutions, with the reluctance of the City to take a sufficiently long-term view, and its insistence on having an arm's-length relationship between financiers and industry. We should be promoting longer-term relationships and using non-executive directors in a continental-style supervisory board so that they have a much more supportive relationship with the company in which they have invested. Within those institutional ideas, there are examples of imaginative measures that should have been included in the White Paper if it was to address some of the fundamental issues.

I do not blame the Chancellor of the Duchy, who is clearly committed to his subject, but he is obviously not getting the necessary support from other parts of government. When he asked in his review why the United Kingdom seemed to be less successful than its competitors in translating inventions to the marketplace, his thoughts were in the right direction and his ambitions were high. His failure to deliver suggests that his hands have been tied by the Treasury, the Department of Trade and Industry and the Ministry of Defence. Therefore, he has had to concentrate on what he can do in his own empire and has rearranged some chairs in the research councils. That is not necessarily bad in itself, but when more glittering prizes were at stake, that remains a Missed opportunity.

11.43 am

Sir Trevor Skeet (Bedfordshire, North)

My right hon. Friend the Chancellor of the Duchy of Lancaster has an horrendous task before him. I have seen a DTI report, published in 1993, containing a list of international rankings of companies by expenditure on research and development. One of our leading companies—perhaps the most leading —is ICI, which comes out at No. 47. The list is roughly as follows: in the first 50 companies there are 20 United States companies, 11 Japanese, six German, four Swiss, three French and a number of other European companies.

It is interesting to look at the participants in Germany. They include Daimler-Benz, Siemens, Bayer, Hoechst and BASF and Volkswagen. Before the war, IG Farben was broken into three parts—Bayer, Hoechst and BASF. They have all now grown larger than ICI and are spending much more money on research, so it is not at all surprising that they score so high in the international list. I mention that because that is the problem which my right hon. Friend the Chancellor of the Duchy of Lancaster faces and the one with which he will have to deal.

The White Paper has some extremely useful recommendations, but one point stands out clearly: there has been a complete dispersal of funding. The Office of Science and Technology has no responsibility for research and development in the Ministry of Defence, the Department of Trade and Industry or the Department of Health. A large part of it is beyond the responsibility of the Chancellor. I make a plea for a more fully integrated science policy. When the Director-General of Research Councils, mentioned on page 32, assumes his responsibilities, he will allocate a much smaller sum of money than he should have received.

Civil responsibilities are important. Hon. Members have said that the defence budget will be cut. If Yeltsin falls in the former Soviet Union, I cannot imagine that there will be any such diminution, and I hope that the defence budget will continue as it is, but there must also be an increase in the amount of money for science.

There, is a need for change in the public attitude to the profession of engineers, but engineers themselves also have a responsibility. They are fragmented and must get together in a more centralised unit. We must recognise the important contribution that engineers can make to wealth creation. I think that they can do it, but the attitude of the Government towards industry in general is important. Britain must take a leaf out of the French book and help our companies abroad. Commercial facilities of United Kingdom embassies throughout the world should be directed towards helping United Kingdom manufacturing companies that are seeking local market intelligence. If we support companies, not merely in the United Kingdom but abroad, we can rehabilitate a situation that has caused us great problems.

The crux of the report comes in pages 16 to 23 on Technology Foresight. That programme has been launched by the Technology Foresight steering group and will contribute to the thinking of the Council for Science and Technology, which will in turn influence Her Majesty's Government. That is a critical body and, if my hon. Friend the Under-Secretary can tell us, I should like to know what its composition will be. Will it be broad enough in its base to do its task? It is crucial that the right people are appointed to it and I hope that there will not be a reshuffling of the old pack.

Let me refer to one or two changes that have occurred. The Council for Science and Technology was called ACOST—the Advisory Council on Science and Technology—from 1987. Prior to that, there was the Advisory Council for Applied Research and Development. All moved on, one after the other. They did much the same thing—advised Governments on the course and picked the winners, and ensured that taxpayers' money was not wasted but put to good use.

In an intervention, I asked my right hon. Friend the Chancellor of the Duchy to nominate who is to be the Director-General of Research Councils, because he will be vital and the arch-piece of the whole system. Sir David Phillips will have some responsibility, because he will deal with the science "boundary commission", which will allocate the boundaries between the six research councils. The chemical industry and biotechnology industry must also be satisfied about their placings.

The work of the Director-General of Research Councils was formerly done by the Advisory Board for the Research Councils, which succeeded the Council for Scientific Policy in 1972. Most of those groups were heralded with all the pipes that could be put behind them and were told that they could fulfil the future of United Kingdom scientific policy, but some petered out over the years.

The crux of the White Paper, which I support, is to determine at governmental level, through all the agencies available—including the Royal Society and people inside government—who will be the future winners. I believe that it is for industry to provide the answer, but the Government may take some of the responsibility because they will provide some of the cash. It is important that we do not appoint to those councils people who will not be able to discharge the highest responsibilities of state. We must not repeat past mistakes.

I feel obliged to pass over defence because that has been adequately covered—although it could be the subject of a full day's debate. About £2.6 billion per annum is spent on research in defence, and lengthy consideration should be given to whether a bigger allocation should be made to civil research.

As to executive agencies, I support the approach taken by my right hon. Friend the Chancellor of the Duchy of Lancaster, although the hon. Member for Redcar (Ms Mowlam) does not. It has been indicated that Warren Spring Laboratory is to be closed. In my judgment, it will not, but will be merged with the AEA Technology at Harwell. A merger means not necessarily a closure, but the transference of one set of servants to another facility that will remain a government institution. As Harwell is a DTI institution, for the time being it will be a case of one function being added to another.

If it is possible to farm out such responsibilities to other bodies, which can probably undertake them much better, why not do the same in respect of the National Physical Laboratory, the Laboratory of the Government Chemist and the National Weights and Measures Laboratory—all of which are at Teddington and part of the DTI? The same question could be asked of the National Engineering Laboratory in Glasgow. Are they being lined up for launching at a future date? Could not their work be done adequately in the private sector? The House would be interested to know.

Several years ago, the annual subscription to CERN was about £55 million, which was large. Today, we find that the responsibility for international subscriptions will be borne by the science budget as a whole. However, as the Science and Engineering Research Council is to be split in two, we may find ourselves in great difficulties. The part that deals with heavy science may find its expenditure reducing over the years. Why should the whole of the science budget take it? Why not follow the practice in Italy, where funds provided through the Foreign Office become a charge on the state, particularly for foreign subscriptions?

As to research council boundaries, I understand the advantage of dividing one council into a number of departments, because, without referring to the House or anyone else, it will be possible to move a subject from one box into another very quietly—but when the councils are granted their royal charters and their boundaries are defined, they will each vigorously argue their case.

Chemists engaged in the development of proteins, genes, DNA and so on and in the application of biotechnology must depend more on chemists and on chemical engineers than on biologists. Biotechnology is fitted into three research councils. The Biotechnology and Biological Sciences Research Council will absorb the Agricultural and Food Research Council. The Medical Research Council will embrace health care, biotechnology and the food industries. The Natural Environment Research Council will be involved in the environmental area.

Biotechnology has been separated from the mainstream of chemistry funding located in the Engineering and Physical Sciences Research Council. The Institution of Chemical Engineers complains: 'biotechnology should, in the new Biotechnology and Biological Sciences Research Council, be separated from process engineering, which is logically placed in the new Engineering and Physical Sciences Research Council. The institution feels that biochemical engineering is a vital aspect of biotechnology. Either the groupings should be modified or some way should be found of funding biochemical engineering as a section of process engineering.

I believe that chemistry has been misplaced and that anything affiliated with chemistry and biotechnology should have its frontiers re-examined, to ensure that those particular industries—which are most valuable to the United Kingdom—are not disturbed. Much work will have to be done on the six research councils to avoid fragmenting associated industries.

Over some years, I have seen the rundown of manufacturing industry in the United Kingdom, and since the war the virtual disappearance of our domestic motor cycle, bicycle, shipbuilding, machine tool, cutlery, glassware, electronic equipment and, to a certain extent, motor vehicle industries.

Mr. Ken Purchase (Wolverhampton, North-East)

Is there anything left?

Sir Trevor Skeet

I assure the hon. Gentleman that it can be vouchsafed that many good industries remain in the United Kingdom. No one country in the world can have all the blessings and all the stars. I have been examining the allocation of employees in the United Kingdom. It appears that more than 70 per cent. are employed in the service industries, and between 20 and 25 per cent. in manufacturing industry. Our scientific base is too small. A figure approaching half the United Kingdom's budget is spent on welfare and health. The welfare of the nation, in its truest sense, lies in manufacturing industry, which has to support everything else; I feel that more should be contributed to it. I hope that we can debate this subject again soon, because it is vitally important. The 'White Paper has great potential as a framework, but I should like to know more of the details relating to, for instance, the selection of the experts.

I congratulate my right hon. Friend the Chancellor of the Duchy of Lancaster, but I shall be very critical if the proposals are not implemented as I should like them to be.

12 noon

Dr. Jeremy Bray (Motherwell, South)

The hon. Member for Bedfordshire, North (Sir T. Skeet), who is a veteran of science debates, has made another valuable contribution, and the hon. Members for Pudsey (Sir G. Shaw) and for Wantage (Mr. Jackson) have also made thoughtful, well-informed and constructive speeches.

The Chancellor of the Duchy of Lancaster says that there is little real difference between the parties on science policy. Before discussing that agreeable proposition, let me explore one or two areas in which I see substantial differences—not so much between Government and Opposition policy as between the Government's views and those of working engineers and scientists. The question of resources for science follows from the economic gain from technological competitiveness; technological competitiveness, in turn, follows from research and development and a command of the science base.

There is nothing wrong with the British economy that could not be put right by 2 per cent. per annum faster growth in the export of manufactures than is represented by our share of world trade and our relative prices. That means £2 billion more next year, another £2 billion on top of that the year after, and so on. What could be simpler? However, it needs an awful lot of doing.

It needs much more than technology transfer and research and development. It needs investors; it needs capacity to increase investment; it needs training; it needs intelligent corporate strategies; it needs whole-hearted participation in global development, with both inward and outward investment. However, we also need new and competitive technology. That means learning from others and working at the frontiers of development.

There is a wide misapprehension—not only in the Government—of the time lags involved in the profitable application of research and development. The heaviest development costs come near the point of production and pay-off; given an expenditure weighting, it is reasonable to look for the pay-off from research and development within three to eight years. We are talking about a complex interaction between research and technological development, rather than a sequential process from discovery to application. A vigorous growth in scientific and technological activity is an important factor in the achievement of economic growth within the current decade.

The Chancellor of the Duchy of Lancaster should have started his argument with the Treasury and the DTI by contributing to their success, or at least reducing the extent of their failure. The grimmer the prospects for the economy, the greater the emphasis needed on technological competitiveness. There is no sign that the right hon. Gentleman was able, or even tried, to get the Treasury and the DTI to understand the plight in which we find ourselves without a more technologically competitive industrial base.

Tactically—no doubt with the prodding of the hon. Member for Wantage—the right hon. Gentleman won the support of the Thatcherite Chief Secretary to the Treasury, against the barbarian President of the Board of Trade, who wanted to shut down basic science altogether and stuff the loot into helicopters for the Iraqs of the future. Tactically, however, he did not get the Treasury to understand the latest evidence from the United States on the effectiveness of intervention in industrial technology and research and development fiscal incentives, such as Bronwyn Hall's recent NBER paper; not did he clear up the muddle-headedness of the President of the Board of Trade, who spurns support for near-market research while demanding that Government-supported research be near the market.

As for defence research, although the Ministry of Defence acknowledges the "spin-in" to defence from civilian micro-electronic and information technology, the Chancellor did get the Ministry to understand that defence research is gravely weakened generally by not being thoroughly integrated with civil research and development.

I am no enthusiastic supporter of the security services. However, I cannot for the life of me see how MI5 and M16, let alone peacekeeping to guard against communal strife, terrorism and industrial sabotage, crop, animal and human disease and natural and man-made environmental disasters—the security threats of today and tomorrow—can be adequately safeguarded by a 1940s-stye defence research and development establishment. Even those who deal with the things that go bang—the things that move fast and unerringly—have more to learn from integration with civil science and technology than from claustrophobic, exclusively defence-orientated work.

The Chancellor can influence departmental research activity by helping Departments to understand how, by using science better, they can achieve greater success in their main task. Directors of departmental laboratories have considerable insight in that regard; but what are they to make of an Office of Science and Technology that asks not, "How can we help your Department to understand how it can make better use of your science in this laboratory?" but, "Is what you are doing really necessary? Could someone else do it more cheaply? How will you subject your work to market testing?"

No wonder the Chancellor of the Duchy and his minions are sent packing with fleas in their ears by other Departments. Does that help the right hon. Gentleman to establish the authority he needs when he must deploy the full weight of scientific opinion with his colleagues—for example, to correct the mistaken belief of the Secretary of State for Health that the threat of an AIDS epidemic from heterosexual activity is diminishing?

As I have said, the grimmer the prospects for the economy, the greater is the country's need for competitive technology and research and development. That is what the Chancellor has failed to get across. He has all the arguments to hand: he can deploy them with the research councils and, in particular, with the Economic and Social Research Council. All he has managed to do, however, is secure a cut in the planned science budget, and in Government research and development generally.

When it comes to matters on which the right hon. Gentleman might claim to have achieved more agreement within the scientific community, I wonder whether he realises quite what he has taken on. I consider the restructuring of the research councils sensible: I am glad that biology is being strengthened so that it can build on the incredible advances that it has made.

The Chancellor, however, has now taken responsibility for such matters as deciding how much should go into the various research councils, and into "big science" in particular. It is no good his wringing his hands and saying how much more sensible if would be if American particle physicists scrapped their plans for a super-conducting super-collider, and put their money into CERN's more intelligent and cost-effective large hadron collider.

My view and, I believe, that of many scientists is that there is scope for fascinating and fast advance in particle physics theory, but it is by no means clear, however, that, starting in 50 years' time, physicists would still want to build large particle accelerators. Conceptually, there are ways in which high concentrations of energy might be created in the laboratory—by what the Chancellor might describe as wind surfing on laser beams in ways that they will explain to him at Culham.

The big science today, with the big, diverse, understandable and fascinating pay-off, is astronomy. Particle physics can get only so much science support worldwide, and if the super-conducting super-collider goes ahead, the large hadron collider does not. No science council and no Government-appointed or independent body will ever give the Chancellor that kind of advice. The Chancellor will have to do better than he has so far if he is to justify such a tough decision in the minds of most scientists and successfully divert the money to other sciences instead of losing it to science as a whole.

Mr. Spink

Does the hon. Gentleman agree that we should support the joint European torus project because it may give an engineering solution to fusion physics?

Dr. Bray

I understand what the hon. Gentleman is saying. The joint European torus is a different matter; it has nothing to do with high-energy particle physics. It is to do with methods of electricity generation in the future. I believe that it should be financed by a research levy on the generating authorities, but the Government have effectively closed research into electricity generation.

The Chancellor has started many hares: securing genuine career development for scientists; giving engineering the right kind of research; getting the research councils sufficiently to support overlapping; underpinning disciplines such as chemistry; making the Technology Foresight programme more fertile than a mule, a cross-breed between an academic science policy research unit and a Neddy talking shop. I hope desperately, for the sake of the country, that he can chase them all.

I shall not embarass the right hon. Gentleman by enumerating all those policies that he has lifted from Labour policy—from which, indeed, his office was hatched —but one that I shall mention, as a contribution to the vital public understanding and enjoyment of science, is a national exposition of contemporary science. Although that will culminate in 2001, the build-up needs to start now. If science is so fascinating because it helps us to understand the world—even the funny job that we try to do in this place—it is a fascination and understanding which must be shared with the community as a whole.

12.12 pm

Mr. Spencer Batiste (Elmet)

The White Paper, with its emphasis on the linkage between science and technology and wealth creation, comes after 150 years in which that linkage has been progressively weakened. It has been weakened not by deliberate intent or malice but by the lack of strategic overview of the impact of disparate policies and social trends throughout the period. That is the focus of what I want to deal with today, because we have evolved, as many people have observed, into an industrial society with an anti-industrial culture, which is at the core of the problem that we must now address.

In the 19th century, the heirs of the giants of the industrial revolution became country landowners. In his book, "Audit of War", Corelli Barnett described with frightening clarity how in the post-war period our manufacturing industry was unable to produce the products that our scientists had designed. In the post-war period, the low esteem and rewards for engineers have bedevilled recruitment of the very best people. Death duties and high taxation have inhibited the growth of family companies, which in Germany have been one of the triggers for long-term investment in research and development. Family companies in Germany have passed knowledge and wealth on from generation to generation through retained profits.

We effectively destroyed our domestic motor industry by using it as an economic regulator, subjecting it to repeated changes with which it could not cope, while the Japanese used their car industry as the launch pad of their industrial endeavour in the post-war world.

The irony is that there is no shortage of innovative ideas or world-class science and technology in Britain. But by the late 1970s, we had a real lack of world-class ability to manufacture the fruits of that science and technology base.

Dr. Spink

Will my hon. Friend acknowledge that there has been an increase in research and development in motor vehicle industries of 65 per cent. in the last decade? Does not he welcome that?

Mr. Batiste

I am coming on to that point.

I was talking about the position in the late 1970s. We had poor industrial relations and little management training. We had poor technology transfer from academic institutions. We had a lack of large personal discretionary wealth, which has been the main feature of innovative entrepreneurial investment in the United States. We had over-institutionalised financial structures and a growing lack of skills at foreman and technician level in industry.

As my hon. Friend the Member for Castle Point (Dr. Spink) pointed out, quite a lot changed in the 1980s. Taxation on companies has been reduced and industrial relations transformed. The privatisation process has put large chunks of our industry outside the constraint's of the public sector borrowing requirement. The single market process is developing a marketplace for Europe of a size that will enable our companies to compete more effectively with Japan and the United States. Our universities have become more focused on the need to relate to industry.

The pharmaceutical industry has shown that it can draw money out of the stock markets for high-quality investment in a research and development based industry, which has enabled it to become a world leader. We have received massive inward investment from Japan and the United States, which has reborn our motor industry and has triggered world-class manufacturing practices in the component supply industry, which means that not only can we supply our own domestic needs, but, increasingly, we will be able to find new markets in Europe and elsewhere.

The reality is that things have improved in the United Kingdom in the 1980s, but they have improved everywhere else, too. The rest of the world has not stood still. The pace of change is increasing all the time. Our science and technology base is one of our greatest assets. We must face up to the challenge of drawing out the wealth-creating opportunities of that science base while maintaining its creative impetus and independence.

To achieve that, it is vital that the same tune is sung throughout government. The creation of the Office of Science and Technology and the appointment of my right hon. Friend the Chancellor was, I believe, an essential first step in creating the vehicle within government for focusing policy on science and technology. The White Paper is the second step in the right direction and has rightly received a positive and justified welcome.

Many colleagues have highlighted many of the features of the White Paper and I shall not repeat those points, save to summarise what I see as the most important—the recognition of the core role of science and technology in wealth creation, the identification of the United Kingdom's science and technology needs, the restatement of the need for dual funding of universities, the important strengthening of the role of the chief scientific adviser so that he can make a more decisive impact in the councils of government and the acceptance of Government involvement in all stages of the innovatory process, including near-market research.

It must be said that our history is littered with examples of our having carried forward the R and D programme to the point where it is about to achieve commercial success, but we have then withdrawn Government support and the programme has failed. A classic example of particular relevance today is that of communication satellites. We developed a world lead, withdrew resources just as the product approached the marketplace and allowed the United States to overtake us and to reach a position of dominance.

The development of the Government's role in Technology Foresight and the development of technology transfer are crucial, as is the restructuring of the research councils with Mission-oriented focus. The identification of training needs in industry at large and the education of the public are also part of the process of making us a culture which is friendly to industry and research and development rather than one that is hostile to wealth creation.

The one aspect of the White Paper with which I had some difficulty is the rejection of the concept of Faraday centres. The Select Committee on Science and Technology recently visited Germany where we saw the excellent work of the Max Planck Society and the Fraunhofer and Steinbeis institutes. On reflection, I think that my right hon. Friend was right. Without wishing to diminish the considerable contribution that those institutes make in Germany, I felt that they diminished what went into the universities and, therefore, what could come out of the universities. I believe that the creation of the Smith Institute for Mathematics at Cambridge and Oxford was a better model for us than the German model which no doubt works extremely well there.

Mr. Andrew Miller (Ellesmere Port and Neston)

I also went on that Select Committee trip. Does not the hon. Gentleman agree that institutes such as the Stuttgart Institute for Micro-Electronics are an excellent example of partnership between the state and private sector? Should not the Chancellor consider carefully such institutes which help to cultivate small and medium-sized enterprises?

Mr. Batiste

I entirely endorse what the hon. Gentleman says. Clearly, we saw mechanisms in Germany that provide funding to bring research ideas out of the universities, develop them that little bit further and push them into industry. It is important that we study and learn from those mechanisms, but my point was that in Britain it could be better done within the university structure rather than in institutions that drew strength away from the universities, as I felt was the case in Germany.

We must now consider whether the promise of the White Paper will be fulfilled and whether the powers of the Office of Science and Technology are adequate for the tasks it has set itself. There will always be an overlap between the responsibilities of different Departments of State. That is inevitable, but we are rapidly approaching a time when we need to carry out a radical reappraisal of the structure of government. We have not had such a reappraisal for a very long time. The nature of our society and the challenges we face are changing. It is inevitable that some of the structures of government would have to change along with them.

How, for example, can the Department of Health effectively be the sponsor of the pharmaceutical industry while being its largest customer? It is a conflict of interest which means that one side is not given adequate weight in Government debates. How can the Ministry of Defence, which is charged with the security of the nation and trying to achieve value for money, be responsible for promoting the civilian spin-offs of the technology that it develops? What does the Department of Employment do which cannot be divided more efficiently among other Departments?

Clearly, we need to introduce into government the same sense of Mission orientation that we have introduced into the research councils. There needs to be a clear distinction between the roles of customer, supplier, regulator and provider. When we have a clear Mission orientation within government, each of those roles can be performed more effectively.

If the needs of our science base and of the wealth creation process that arises from that science base are to be fulfilled, the OST must have a decisive voice in many of the decisions of government, even those with consequences far outside the strict confines of science and technology debates.

It is clear from the debate today that there is a wide welcome in the House and in the country as a whole for the White Paper and for the strategic direction it sets out. The House wishes the Chancellor well in the battles to come. Members of the Select Committee share that wish and we shall do our bit to promote his functions in government. We shall monitor his progress carefully and with the keenest possible interest because, as we approach the turn of the century, there can be nothing more important to the success of our country in the next century than that he should succeed in his job now.

12.25 pm

Mr. Ken Purchase (Wolverhampton, North-East)

In order to compete in the world economy, Britain must improve the performance of its manufacturing industry. As has already been said many times, the key is investment in research and development.

Where investment in research and development has been high, as in chemicals and pharmaceutical, we lead the world, although even in that instance our position is threatened following the first assault by the Department of Health on the list of drugs which may be prescribed on the national health service. Evidence already shows that fewer patents are being registered by British pharmaceutical companies since the assault. The Government may claim that their action has reduced the level of year-on-year increases in the drugs bill with, as yet, they claim, no discernible effect on patients treated with generic equivalents. The question is, what effect will the loss of sales of proprietary brands in the home market have on companies' ability to invest in research and ultimately to maintain the lead which creates the demand for new and developed products?

Let us be clear about the importance of exports, especially of high added value goods. Manufacturing accounts for four fifths of our exports. By comparison, manufacturing accounts for only one fifth of our gross domestic product, whereas in the 1970s, it accounted for almost one third. No wonder our balance of trade is in such dire straits.

As our industry has shrunk, the budgets available, company by company, for research and development and for training have withered. That is especially true in the small and medium-sized companies, where the first casualties of recession and cuts are inevitably training, R and D, marketing and all the activities that are not regarded as essential for survival. Now we are sucking in imports at enormous cost to substitute for what, just 15 years ago, we had both the technology and the capacity to make for ourselves.

As mainline R and D budgets have shrunk, so Britain has lost the value of simultaneously developed complementary technology. In the early 1960s, I worked on experimental parts for Concorde and TSR 2—hydraulic flight control and landing systems. A whole new body of knowledge was developed in respect of metal cutting and measurement control. Titanium has excellent weight-tostrength properties, ideal for the purposes of aerospace components, but it is an alloy whose use is limited because of the very high friction created during the cutting process, which created measurement control problems.

That led to a demand for new cutting techniques and to the consequent further development of cobalt and ceramic tools and new resins and abrasives. Those demands necessarily involved numbers of companies not directly contracting in to the Concorde project. In that way, all the knowledge gained and the techniques developed became the common currency of engineering technology. Unfortunately, these days every company that I visit relies on imports to bring continuous improvements to those processes.

The brilliant world-leading machine tool sector around Coventry, Birmingham and Wolverhampton—and a small group of high-tech companies in the south-east —has virtually gone. One is led to ask, "Is there anything left?" Fortunately, there is a little left, and it is working very hard. In the late 1980s, Ministers were declaring that the import of machine tools was a sign that our manufacturers were gearing up for recovery. To my mind, however, what was presented as good news sadly confirmed that our own machine tool sector was as good as dead.

Times move on and science will not be thwarted. Now the same company that I worked for has developed new smart fly-by-light control systems, using fibre optics to replace the typical mechanical systems currently used in most aircraft. The first flight using the system was on 13 February this year and the system was validated from flight data by the Civil Aviation Authority. However, some doubt—I hope only temporary —has been cast on continuing Government support. On 6 May, the Select Committee on Trade and Industry learned from the Minister of State at the Department that support for the civil aircraft research and demonstration programme is to be reduced by 20 per cent. per year over the next three years. I am not sure how fly-by-light will be affected, but the uncertainty created at all levels within participating companies is profound.

Just when reduced demand worldwide is resulting in major United Kingdom aerospace companies stepping back programmes and just when we have the even greater problem of companies in the far east that are determined to go into aerospace in a big way—Indonesia is a case in point—the British Government choose to shed doubt on their support for world-beating technology being developed in this country.

Hon. Members must ask how the prospect of stepping back from research and development can possibly be compatible with the claims in the White Paper that the science base is to be protected from cuts. If the Department of Trade and Industry can contemplate cuts in near-Market research, what chance does blue skies research have? In any event, the White Paper contains no plans for vital increases in science-based funding over the next few years, without which there will be a negative effect on the confidence of scientists and engineers throughout the country.

The Government seem to think that their emphasis on shifting resources towards projects with the greatest industrial relevance will be greeted with acclamation—it may not be unqualified. The best United Kingdom companies have always realised the value of original research, without which the industrial vibrancy created by a successful programme of research to market innovation is lost.

The White Paper fails to tackle the need for long-term financial support for research. Its authors are confined to a market philosophy and necessarily take only a short-term view. That short-termism is especially a characteristic of pension fund managers' attitudes. They are under constant pressure to arrange their portfolios so that they can consistently out-perform the average return. As pension funds and other insurance interests hold roughly 50 per cent. of all shares in companies, they are in a powerful position to demand a return when, judging by company profits, none should really be available.

It is a feature of R and D investment that it is overwhelmingly funded by retained profits which diminish as shareholders demand a better-than-average dividend from cutting-edge companies that are desperate to invest in winning, long-term projects. That is a major problem for Britain which our rivals do not suffer. It is fuelled by the lack of loyalty felt towards our industry by fund managers and it contrasts with the very much greater level of individual and non-corporate ownership common in America, Japan, Germany and France, to which reference was made earlier.

That ownership yields a fierce pride towards the companies in which people have invested and that is lacking in Great Britain. Not too long ago, I recall a lord of the realm—Sir Jeffrey Sterling—saying, in relation to shipping and registration, that his first duty was to his shareholders and not to Britain. Such a statement is indicative of the lack of loyalty felt towards our indigenous companies and industries that seems to be common throughout the country.

The White Paper is silent on such matters, no doubt warned off by competing departmental interests. However, it is not so silent when it enthuses about new committee structures for the research councils. Some might say that that is simply an exercise in deck-chair management while no one is captain of the ship. Someone must be put in charge soon.

A genuine partnership between education, industry, finance and the Government is urgently required. However, only the Government can provide the catalyst for that to happen. Economic modelling suggests that significant national benefits are available if, as a result of real partnership, improved manufacturing performance can be achieved. Modelling also shows, despite some inefficiencies resulting from badly managed Government intervention such as the overly-bureaucratic procedures required to obtain finance, that a balance of advantage will remain and will result in improved industrial performance at a new higher equilibrium position.

We have some remarkable inherent strengths and advantages in many of our best companies. However, genuine understanding by the Government is necessary to ensure that support is available to encourage invention and innovation. Doing nothing except reorganising the research councils is not an option. Full European co-operation is too far away to prevent further deterioration in our global competitive position. Hoping for inward investment from Japanese companies enthusiastic to take advantage of British inventiveness is foolish in the extreme.

The way forward is to invest heavily in supply-side changes that favour the whole process of education, research and the manufacturing sector. Only in that way will the natural ability and potential of our people be realised and released. We must demonstrate our confidence in British-owned companies based in this country. That means that they must be allowed to develop with the use of a healthy level of retained profits and free from financial speculators and greedy takeover moves. In such an environment, our companies can grow at similar rates to those of our international competitors.

For the whole period of Conservative Governments, the emphasis has been on the acquisition, stripping out and selling of companies that have been the backbone of British manufacturing. Now, when manufacturing represents such a small part—one fifth, as I said earlier —of gross domestic product, far too many City fleas are getting a free ride and a free meal on the over-burdened, over-stretched body of British industry.

I regret that the White Paper fails to argue strongly for a cultural change which would value the scientists and engineers on whom the country is so dependent for sustaining our well-being. I regret also that it fails to recognise the opportunity to put the real added value of applied science and technology at the top of the agenda.

Because of that failure, the White Paper can be only partly welcomed. Perhaps in future it will be seen as an occasion when once again, the Government did not Miss an opportunity to Miss an opportunity.

12.39 pm

Mr. Tim Rathbone (Lewes)

Contrary to the innuendo of the hon. Member for Wolverhampton, North-East (Mr. Purchase), I warmly welcome the White Paper. I hope that the hon. Gentleman's criticisms and those of other hon. Members, in particular the pointed but intelligent comments of my hon. Friends the Members for Pudsey (Sir G. Shaw) and for Wantage (Mr. Jackson), will be taken to heart when the Government consider future action.

I also welcome the White Paper because I am honoured to be chairman of the all-party engineering development group of this House and of the other place. The White Paper is a further illustration of the Government's commitment to pushing manufacturing, engineering, technology and science up to the top of the political agenda. That would not have happened without the support and commitment of my right hon. Friend the Prime Minister, who was responsible for setting up the Office of Public Service and Science, for which my right hon. Friend the Chancellor of the Duchy of Lancaster and my hon. Friend the newly appointed Parliamentary Secretary, Office of Public Service and Science are responsible.

The White Paper is also a significant indication of the determination to improve the competitiveness of British industry, and that determination was highlighted in the House only a week ago. It is an indication of closer contact and interaction between industry, academia and the Government. Training and enterprise councils are an illustration of that, as are company training schemes, both of which are mentioned in the White Paper. Only the other day, I had the privilege of opening the university of Brighton's teaching company centre—just outside my constituency but, of course, embracing it. We in Sussex are proud that it is already the largest teaching company centre in the country.

I welcome the creation of the Engineering and Physical Sciences Research Council, and I voice the same hope that has been voiced by some of my hon. Friends—that practising engineers from industry will be strongly represented on the council.

The White Paper is also a welcome reminder of the importance of setting high standards, particularly in engineering. Standard setting in Europe is now very influential worldwide, in contrast with years gone by, when most standard setting emanated from the United States. The United Kingdom, within Europe, is a world leader, and we should praise the British Standards Institution's job in that sphere.

From the engineering standpoint, the White Paper underlines the importance of engineering to the United Kingdom. That point cannot be overstated. It has been stated by Ministers time and again, yet somehow it does not sink into everybody's mind. In engineering, we have annual sales of £100,000 million, including £50,000 million of exports, output accounting for 42 per cent. of our manufacturers' gross domestic product, and the employment of about 2 million people. That also emphasises the importance of the White Paper to manufacturing and engineering within manufacturing in this country.

Like others before me, I wish to ask one or two questions. Will Government funding be adequate to the task that the White Paper identifies? For instance, are the Government pledged to protect the science vote as an investment in our country's future from any imminent Budget cuts? My right hon. Friend cannot commit himself on that point, but he can commit himself to the battle for it.

What additional help can be expected from the Treasury to encourage the financing and introduction of industrial innovation, especially through the Technology Foresight exercise? I and other hon. Members wonder whether the Treasury is close enough to industry to understand its real needs.

We must question whether more industrially relevant research can be undertaken without a serious reduction in support from the research councils for basic research, which is already Mission-oriented. That research accounts for 20 per cent. of the research councils' expenditure. What can be done to encourage and help industrial managers to grasp the opportunities offered by British research and innovation, and to make the long-term investment that is needed to profit from it?

The central issue relates to how we regain Britain's position as a world-class manufacturer. That is not thoroughly addressed in the White Paper. The reason may be traced to a point made by hon. Members on both sides of the House about Government policy coherence through all Departments to ensure that science, engineering and technology are developed.

While I welcome the added emphasis on masters' degrees, I share the worries expressed by my hon. Friend the Member for Pudsey and the right hon. Member for Halton (Mr. Oakes) about basic education in terms of the teaching of mathematics and arithmetic in the national curriculum. Do we need to consider broadening the sixth form curriculum and giving students greater encouragement to continue their education and vocational training until 18, or even after?

The Department of Trade and Industry has been mentioned in that context. Should it be given the main responsibility for science, engineering and technology development? Having raised that question, I must say that the Department has cut its annual expenditure on research and development, and does not seem to be committed to the maintenance of support for innovation.

The future role of the Ministry of Defence was mentioned by my hon. Friends the Members for Pudsey and for Wantage. What Government help will be given to assist market forces in the switch from military to civil research and development? I suppose that it all comes back to a recommitment to developing engineering, science, technology and our manufacturing potential.

An anti-industrial culture still too often prevails. In all Government Departments, there is room for encouragement to change. The Royal Academy of Engineering and other institutions and federations in the engineering world will do their bit to help the Government bring about the necessary change. The contrast between our commitment to national excellence in science, engineering and technology and our relative weakness in exploiting it to economic advantage still remains. The White Paper represents a most welcome beginning to a process of change. Equally, that process must continue to develop.

12.48 pm

Mrs. Anne Campbell (Cambridge)

I enjoyed the speech of the hon. Member for Lewes (Mr. Rathbone) who made some valid points to which I shall return.

One statement in the White Paper, with which I entirely agree, states: Women are the country's biggest single most undervalued and therefore under-used human resource. It is perhaps no great surprise, but nevertheless a great disappointment, to find that just nine lines of that 74-page document were devoted to the subject of attracting more women into science and engineering.

The Chancellor of the Duchy of Lancaster has chosen to opt out by deferring any further discussion on that matter until the report of the working group and committee of inquiry into women in science and technology has been published. That inquiry was not established until March, nine months into the debate on the White Paper, and it is not due to report until September. I do not know whether that is a means of sidelining the problems faced by women scientists; if so, the opportunity to tackle those problems will be lost for a long time.

It says a great deal about the Government's commitment to science and technology that, only a few days after publication of the White Paper, they announced the closure of Warren Spring Laboratory, Britain's premier research institute for environmental technology. On the day that the White Paper was released, however,

the Chancellor of the Duchy said: On Warren Spring, my right hon. Friend the President of the Board of Trade has not taken any final decision."— [Official Report. 26 May 1993; Vol. 225, c. 932.] I find that answer a little disingenuous. The Government have reneged on the agreement reached last year to relocate Warren Spring at a site in Welwyn Garden City, bought for that purpose. The environmental problems facing this country are not diminishing, but increasing. This is not the time to cut the investment on environmental technology or to disband research teams with internationally renowned expertise.

Some of the White Paper proposals are sound, including the Technology Foresight programme and the annual "Forward Look". Many in the scientific community and in the Labour party have long argued for a national strategy for science. The progress in that direction is welcome. In general, however, the White Paper is a damp squib, which promised much and delivered little. In addition, I fear that some of what it has delivered is wrongheaded.

Paragraph 1.13 of the White Paper acknowledges the widely perceived contrast between our excellence in science and technology and our relative weakness in exploiting them to economic advantage. Having acknowledged that analysis, however, the White Paper fails to comprehend the significance of it.

Many of the reforms to the administration of the science budget and research councils proposed in the White Paper imply that the problem lies not in exploitation of the science base for economic advantage, but with the science base itself. I strongly object to that analysis. The White Paper has tackled that problem by streamlining the research councils so that they will be staffed with fewer members overall and with more people from industry.

The research councils are being instructed to give greater emphasis to applied research. The implication is that the councils are currently allocating funds for the wrong sort of research, yet that misses the point entirely. I fear that the reforms, if applied literally, may stifle creative research in Britain. The applications of basic research cannot be anticipated, which is true almost by definition. The difficulty of picking winners is well established. It is not true that our scientists are failing to produce scientific innovations, which could be taken up by industry. Many of their innovations are taken up by industry, but the problem is that they are not taken up by British industry.

An excellent letter from Professor Roger Needham, who is professor of computing at Cambridge university and one of my constituents, was sent to the Select Committee on Science and Technology. He set out succinctly that the two things he creates are skilled people and ideas. He described, with some feeling, the difficulty he encounters in getting United Kingdom companies to realise that they should try to persuade good graduates to work for them He described further difficulties that he has had in getting companies to accept good ideas. He wrote: When it comes to the exploitation of results, the situation is not much better. An extreme but nevertheless genuine case, is as follows. A research student came to see us after working for GEC for ten years. In the course of his PhD work he took out a patent on an invention and he talked to British Telecom and GEC about it. They were polite but uninterested although the subject matter was very relevant to their businesses. He published a paper in an international journal, sold his patent to a Californian start-up and is now with them as a respected engineer. Other advanced industrial economies are keen to exploit the fruits of the labours of British scientists, but I fear that we will not realise the potential of British science until the British Government, British industry and British financial institutions realise the error of their ways. The White Paper contains nothing to encourage that process.

Page 15 of the White Paper states: the Government recognises that circumstances can arise where market forces do not work in a satisfactory manner and investments in commercial research and development which offer a good economic return to the nation … will not go ahead without some sort of public support. The statement that market forces do not always work is a refreshing admission from the Government.

I shall describe a situation in which market forces are clearly not working. The United Kingdom research and development score board was published last week. It has already been mentioned by several hon. Members, including the hon. Member for Bedfordshire, North (Sir T. Skeet) who quoted from it at length. It showed that the 336 British companies surveyed spent on average 1.6 per cent. of their income on research and development last year compared with an average of 4.6 per cent.—almost three times as much—for the world's 200 top spending companies. Even the 11 British companies ranked among the top 200 for research and development spending on average spent just 2.5 per cent. of their income on research and development, compared with between 4 or 6 per cent. for the other companies. To cap it all, the average British company spends twice as much on dividends to shareholders as on research and development. That compares with the world's top 200 companies which spend two and a half times as much on research and development as they do on dividends—they have their priorities right; we have our priorities wrong.

Even the President of the Board of Trade described the figures as sobering. In a debate in the House earlier this year, the Chancellor of the Duchy of Lancaster described the result of a similar survey as sobering. Perhaps the entire Cabinet find the figures sobering—it will no doubt find the results of next year's survey equally sobering. But the question is—what is the Cabinet going to do about it?

Once again, the Government have failed to take the opportunity to introduce additional tax incentives for firms spending on research and development. In rejecting tax incentives, the White Paper states that the Government's aim remains the avoidance of special tax subsidies which distort commercial investment decisions. That dogma rings hollow. Against all the evidence, the Government remained mesmerised by their faith in market forces.

The United Kingdom, Turkey and New Zealand share the dubious distinction of being the only countries out of the 24 members of the Organisation for Economic Co-operation and Development that spent a smaller proportion of their national wealth on research and development in 1990 than they did in 1981. In Britain, responsibility for the decline lies squarely with the Tory Government. The proportion of gross domestic product invested by the Government in civil research and development fell from 0.72 per cent. in 1981 to 0.5 per cent. in 1990. Those figures come from the Save British Science society. That meant that the Government spent £1.2 billion less on civil research and development in 1990 than they would have done if they had maintained spending at the 1981 level as a proportion of GDP.

Much of the fall can be attributed to the rigid application of the near-market rule—another foolish element of Tory dogma. The White Paper refers to the relaxation of the rule, but it is a timid reference. It would be interesting if the Chancellor of the Duchy of Lancaster could underline and strengthen the commitment to spending more money on near-market research.

The White Paper's failure to address the issue of resources and set targets for increasing the proportion of national investment in research and development is one of its greatest omissions. We read that Government spending on defence-related research and development will be reduced in real terms by one third by the end of the decade. There is no discussion of the possibility that, as a result, more resources will be diverted into civil research and development. There is no statement about how scientific expertise built up in the defence industry might be preserved for the nation. The diversification of the defence industry is not even discussed. It is a simple story of cuts. That is a great Missed opportunity, well illustrated by my hon. Friend the Member for Motherwell, South (Dr. Bray), to divert resources into the areas that threaten the security of the western world.

Hon. Members have spoken about careers in science and technology. The chapter in the White Paper dealing with that subject is deeply disappointing. Worse than that, many scientists will find parts of it highly insulting. There is a consensus that a postgraduate setting out on a career in scientific research should have more formal training at the outset. In that sense, the proposal that postgraduates should normally undertake a year's tuition for a master's degree before embarking on a PhD course is welcome. However, I am deeply concerned—that concern is shared by many scientists—about the manner in which the change in the pattern of postgraduate training is to be achieved. There will be no new resources, which means that more people taking master's degrees will mean fewer people taking PhDs. Throughout the long debate leading to the publication of the White Paper, I have not heard anyone suggest that this country suffers from a surfeit of people with a PhD. We need more scientists trained to the highest degree if our economy is to thrive in the long term.

The White Paper makes little reference to the poor financial rewards of scientists compared with highly qualified people in other professions. I presume that that is because the Government are not willing to admit to a problem that they are unwilling to solve. When job insecurity is added to poor financial reward, it is a wonder that anyone chooses to pursue a career in scientific research in this country. I have been married to a research scientist for the past 30 years and therefore speak with feeling and some interest in the subject.

Far too many of our brightest scientists live a hand-to-mouth existence on short-term contracts. In that respect, the proposal that the research councils should fund more longer-term fellowships and that the universities should allocate funds to support some research staff between contracts is welcome. However, the White Paper is unapologetic about the plight of the majority of research workers who will still have to move from one short-term contract to the next and from one institution or project to another, always worried about where the next pay cheque will come from.

The White Paper is worse than unapologetic because it contains the appalling assertion that scientists themselves are to blame for being condemned to a series of short-term contracts. That is in paragraph 7.28 which says that they have unreasonable ambitions to pursue careers in academia when what they need is more career guidance to disabuse them of the idea that they can pursue the career of their choosing. That is complete rubbish. Short-term contracts are not the choice of the scientist; they are the choice of the employer and, effectively, the choice of the Government.

It is the lack of a career structure and of basic conditions such as maternity leave and child care that lead to many women moving out when they reach childbearing age. I shall not pursue that as I raised it in an intervention. According to Department of Employment statistics, although 56 per cent. of laboratory technicians are women, only 20 per cent. of chemists and less than 10 per cent. of engineers are women. Women are poorly represented in the research councils. The Advisory Board for the Research Councils has only one woman on its 24-member council and among the permanent staff there are no women at grade 4 and only one woman out of 23 at grade 5. That pattern is reflected in the research councils.

Gender discrimination is rife. A Royal Society of Chemistry survey showed that 29 per cent. of women encountered discrimination. Worse still, when the Institute of Physics conducted a similar survey, it found that 49 per cent. of women had experienced discrimination when applying for jobs.

In the introduction to the White Paper, the Government have the gall to quote the president of the Royal Society, Sir Michael Atiyah, another of my constituents. He said: Too much stress on organisational structures may obscure the basic fact that progress in science depends on the ideas, inspiration and dedication of individual scientists, not the machinations of councils, committees and Departments. The problem is that the Government have not the wit to understand the meaning of those words. Far too much of the White Paper is about the machinations of councils, committees and Departments and far too little is about fostering the talents of our scientists. The White Paper is a failure because it fails to address even the chronic under-investment by British industry in research and development and innovation.

In advance of the debate, I consulted another constituent of mine, Dr. Matthew Freeman, who works at the Medical Research Council's laboratory of molecular biology in Cambridge, and who is also on the executive committee of Save British Science. He said: There is nothing inspiring in the White Paper. Scientists in Britain are demoralised and uncertain and were looking for some hope. Apart from some stirring sentiments there is nothing to relieve the gloom. If you ask scientists at the bench what would help, none would say that an internal shake-up in the committee structure in Whitehall would be a high priority. As an ex-chairman of British Scientists Abroad, I am sure that there will not be a single scientist who will decide to return to Britain on the basis of this White Paper. That says it all.

1.5 pm

Mr. Nigel Forman (Carshalton and Wallington)

I have listened to all the speeches in the debate so far and found them interesting and, on the whole, rather constructive. However, I am sorry to have to say that the speech of the hon. Member for Cambridge (Mrs. Campbell) was unnecessarily and unjustifiably sour in its terms. It took insufficient account of the fact that when my right hon. Friend the Chancellor of the Duchy launched this exercise one year ago, he made it clear that it would be principally concerned with the machinery of science policy and the way in which those matters were approached and co-ordinated within Whitehall, and would not focus principally on resources, for the good and practical reason that, however powerful he may be, it is not within his gift to deliver great pots of money extra to the considerable sums already put into civilian science.

The speech of my hon. Friend the Member for Elmet (Mr. Batiste), using a positively Missionary approach, was excellent and will repay close reading, not least because it demonstrated the way in which at least some opinion among those on the Labour Benches—if not that of the hon. Member for Cambridge—has shifted over the past 10 to 15 years under the influence of the hammer of Thatcherism acting on the anvil of new market and global realities. That is the world in which the scientific and technological community has now to operate.

In the spirit of bipartisanship, I noticed that the hon. Member for Kirkcaldy (Dr. Moonie) was agreeing strongly with my hon. Friend the Member for Elmet when he made a pointed comment, with which I also agree, about the Department of Health being in the ludicrous position of both sponsor and regulator of the pharmaceutical industry. Given that this is one of the few shining examples in the private sector of an industry that has done consistently well, without many handouts from the taxpayer, it is important that the Government should play their part by improving the bureaucratic arrangements. I hope that my right hon. Friend will take note of that.

The right hon. Member for Halton (Mr. Oakes) made a serious point about the insufficiency of people with a good grounding in mathematics and a good mathematical turn of mind, not only in the House but, more broadly, in the communities on which we depend for wealth creation. I draw to the attention of the House the work of Adult Literacy and Basic Skills Unit, which recently published a report, at the Government's behest, that contained some tragic and frightening figures. One in five of the large representative sample were, at 21 years of age, effectively innumerate and one in seven were effectively illiterate—excluding those with dyslexia and mental disabilities. We must address that problem in our schools and in the national cirriculum more urgently than we are.

The hon. Member for Orkney and Shetland (Mr. Wallace), who has had to leave, spoke of cultural and attitudinal problems. He was right, for those matters are well documented back to the time of Prince Albert, who held well-developed views on them.

As a social scientist rather than a pure scientist, I believe that the essence of the problem is that British scientists are invariably held in respect, even in awe, by the non-scientific community. The difficulty has been and remains at the technical and technician level. Schools and further education institutions must do more to capture the imagination of a wide raft of young people and not just the most academically talented.

I apologise for diverging in that way, because I know that it is uncharacteristic these days to indulge in debate in the House, but I wanted to pick up on points that particularly struck me.

The White Paper is an excellent contribution to the progress that urgently needs to be made. It clearly recognises the vital importance of preserving and enhancing our science base, particularly via higher education institutions—which have an enormous contri-bution to make—and research centres, which are often in the private sector.

It must be acknowledged, however, that we in the United Kingdom cannot do everything here. We must not fall for the fallacies that everything must be invented here, or that everything must be done in this country. We must set priorities and ask who are the right people to take difficult priority decisions.

I believe that my right hon. Friend the Chancellor of the Duchy and others of my right hon. and hon. Friends on the Front Bench share the view that such decisions should not principally be taken by Ministers and civil servants.

That is largely because they do not have an adequate training and background, but also because they tend to be dazzled by the men in white coats. This country's scientific history in the post-war period shows the way in which nuclear boffins, for example, dazzled successive science and technology, education and industry Ministers over the years, because those Ministers did not start on anything like even terms with their advisers. That is a serious psychological point.

I welcome the concept of pluralism and diversity in decision making, because big mistakes are less likely to occur with a pluralistic approach. I welcomed the announcment made by my right hon. Friend some time ago of the decision to maintain the dual support system, which is important for institutional autonomy. That is the most important decision in the White Paper contributing to the maintenance and improvement of our science base.

Several references have been made to resources, including by the hon. Member for Cambridge. I put a more positive gloss than the hon. Lady on paragraph 1.17 of the White Paper: The Government will continue to allocate public resources to science and engineering on the scale necessary to finance the policies in this White Paper. Although that statement is clear, I know that Opposition Members are cynical. I take the statement to mean that my right hon. Friend the Chancellor of the Duchy, with the full backing of my right hon. Friend the Prime Minister, will make every effort to ensure this policy is carried through.

Dr. Bray

How can the Government possibly continue to do something that they have not been doing?

Mr. Forman

The hon. Gentleman is falling into the trap of being a little too sour and pessimistic. The scientific community may not have received all the public resources that it would like recently, but let me say in the presence of my right hon. Friend—and my hon. Friend the Parliamentary Secretary, Office of Public Service and Science whom I welcome to his new post—that I believe that the scientific and technological community has firm champions. I know that they will do their level best.

Basic science, as I understand it, is nearly always a voyage of discovery with many blind alleys: that is the nature of the beast. We must protect the work of bright researchers who are not project-funded by research councils. A good example of what can be derived from the "blue skies" approach is the valuable work on genetic fingerprinting that Alec Jeffreys and his team have done at Leicester university; another is the basic research into ceramics that has been done abroad, leading to many of the significant breakthroughs in super-conductivity that were made a few years ago in Switzerland. I hope that the Government will continue to support such aspects of the science base and the "blue skies" approach.

British industry and commerce must learn to apply the scientific and technological skills that we develop to existing products and processes, as well as to new frontier products and processes. Perhaps the most telling example can be found in the motor vehicle industry: much was learnt in the 1980s—largely as a result of Japanese influence, as was pointed out by my hon. Friend the Member for Castle Point (Dr. Spink). There has also been a dramatic turnaround in our woollen textile industry, largely owing to the application of the most appropriate and advanced technology to existing processes to make them more cost effective and more attractive to the market.

We also need to achieve a better balance between what is loosely called a big science—for instance, particle physics and astronomy—and small science—for instance, product and process control. I was interested to read the evidence submitted by ICI's spokesman about the value of small science, and the number of small projects that are particularly useful to the advance of the whole. Science in this country has been dogged by two problems, both cuckoos in the nest. Nuclear power has tended to edge out a good deal of hard science, and subscriptions to international bodies have taken too large a share of the resources available at any one time.

Paragraph 1.16 of the White Paper is right to talk of breaking down the barriers between all those involved in the broad scientific community. That naturally includes private companies, research laboratories and industry generally. I am delighted to read of the encouragement of networking between bodies, both public and private. That must be right; we must share best practice as far as possible.

I am particularly attached to the idea of teaching companies—which were mentioned by my hon. Friend the Member for Lewes (Mr. Rathbone)—and case awards for young scholars. Much good work is going on. I recently paid a fascinating visit to the university of Brighton, to which my hon. Friend referred—the university, that is, not the fascinating visit. I was told that the university now has eight research degrees financed in that way, and that there are practical as well as theoretical benefits. An example given to me by Professor David Watson is the new control system for hardboard mills, which is making a significant contribution to the success of the industry.

I welcome the way in which paragraph 1.18 flags the Government's determination to develop more taught courses for science graduates. I believe that MSc training for postgraduate scientists and engineers is the way forward. That is the approach adopted by many of our competitors, notably the United States and Germany; I think that it is pedagogically right, and that it brings us more into line with current best practice internationally.

Some of those studying for a MSc will go on to the PhD stage—fewer than before, but that is not necessarily a bad thing—with a more appropriate grounding and a broader basis. I hope that they will go on with the benefit of better and closer academic supervision than is sometimes the case with PhDs.

There is one aspect of the White Paper about which I have doubts and concerns—the decision not to create a humanities research council, which perhaps includes the realm of the Economic and Social Research Council, on which I briefly served a few years ago. That decision leaves the sponsorship, regulation and funding of research in that area largely with our old friend the British Academy. I am not sure that this was a wise decision and I invite my right hon. Friend the Chancellor of the Duchy of Lancaster to find an opportunity later to consider it again.

The British Academy does not have a glorious record in the realm of research and it has the conflicting roles of both learned society and funding council, which sit rather uneasily in one slightly amateur body. I have particular concerns about its record on studentships and on post-doctoral fellowships. I hope that the decision can be reconsidered.

As my right hon. Friend will know, there is a great need for more money for library facilities and for sabbaticals for research in the humanities. Now that, in a sense, my right hon. Friend's Department has a greater interest than it had formerly in such matters, because of his supervision of the research councils, I hope that the matter will be reconsidered. It is a great pity that the recommendations made by Sir Brian Follett were not pursued—a view that is also held by the Committee of Vice-Chancellors and Principals.

I do not want to end on a negative or sour note, having criticised others for showing a touch of sourness. In general, the White Paper is a sensible and responsive document which has done a great deal to meet the most important needs of our scientific, technological and engineering community. I congratulate my right hon. Friend and my hon. Friend the Member for Wantage (Mr. Jackson), who played a considerable part in the document, on their work and on the spirit in which they approached it. I want Ministers to know that many Conservative Members will support them strongly when they do battle, as they will have to, for the interests of the scientific and technological community.

1.22 pm

Mr. Alan W. Williams (Carmarthen)

I thank you, Mr. Deputy Speaker, for giving me the opportunity to take part in the debate.

I congratulate the Chancellor on the White Paper, which has stimulated much interest among the scientific community—well over 100 submissions were made—and in the Select Committee on Science and Technology.

I detected in the Chancellor's speech this morning and in earlier contributions the fact that he has been cautious in his handling of this massive subject. Perhaps he was a little too deferential to the abilities of the scientists involved. As a result, the White Paper is perhaps a little too complacent. I note that about 12 of the Select Committee's 31 recommendations have been accepted. The others were not accepted or were pigeon-holed.

The White Paper is a rather modest reform document. I strongly welcome the "Forward Look", which involves other Departments, and the Technology Foresight programme, which is extremely important. Last Monday, speaking to the Parliamentary and Scientific Committee, the Chancellor spoke of visiting top laboratories in this country, looking at the visitors' list and finding that the person above him always seemed to be from Japan. We need to return the compliment, and the same goes for Germany and the United States. The Technology Foresight programme will help to keep abreast of where we need to invest in the future.

We accept the winding up of the research councils, although we want greater openness. The advice of learned bodies to the OST should be published. The Science and Engineering Research Council was too large and had to be restructured. I especially welcome the Engineering and Physical Science Research Council and echo the concern expressed by the hon. Member for Bedfordshire, North (Sir T. Skeet) about how chemistry will fit into the new pattern. I am also worried about the Particle Physics and Astromony Research Council because it deals with pure science and there is a danger that, being packaged as such, it may be vulnerable to possible cuts or a squeeze in research funding.

I welcome the Council for Science and Technology. It may have leading scientists and industrialists as members, but I echo the view expressed by the Select Committee: we want women to be on the council and the interests of the environment and the consumer to be represented. We welcome the fact that dual funding is to continue. I have reservations about the switch from PhD to MSc, but, if the budget is limited, I accept that perhaps the bias should be towards the MSc. However, I can accept cuts in PhDs only if the total budget is safeguarded and is used to produce more MSc qualifications.

I notice that the White Paper's response to Faraday centres is tame. I wish that it had expressed greater enthusiasm. During our visit to Germany, members of the Select Committee visited the Fraunhofer and Steinbeis institutes. This country needs to develop a broader infrastructure, something between universities and industry, or a middle tier fed by universities and polytechnics and drawn from by industry.

I agree with earlier remarks about the public understanding of science and overspecialisation in schools. All pupils should be required to take mathematics and science to the age of 18. Science has a rather negative image, which I can well understand, having done research in chemistry. Unfortunately, in the minds of young people science can be associated with nuclear problems and pollution and, in general, the image of the scientist is negative. Environmental research will help to refresh that image, but it is sad that the closure of the Warren Spring laboratory sends a negative signal to young people who may be thinking of embarking on a scientific career.

The White Paper is especially disappointing in respect of the Chancellor's scant influence on other Departments, such as the Ministries of Defence and of Agriculture, Fisheries and Food and the Departments of Health and of Trade and Industry. He will have very little influence on the research budget of those Departments but they will take part in the "Forward Look", which is a positive step. I also welcome the transfer of administration of the LINK scheme, but, as £6 billion of Government money is going into science research, it is sad that the OST will control less than a quarter of it and will not have a great deal of influence over the remaining three quarters.

On defence, I agree with the hon. Member for Wantage (Mr. Jackson), in particular, and with the hon. Member for Pudsey (Sir G. Shaw). For decades, our economy has been overtaxed by our high defence budget. We need to trim it in line with other European members of NATO. As the peace dividend now allows us to cut our budget and the R and D component of it, it is important that the funding is retained in total in the science base.

I again echo the comments by the hon. Member for Pudsey: the safeguarding of that £2.6 billion might be the subject of a future Select Committee inquiry. I understand that that figure is destined to be cut by £1 billion by the end of the decade. But that billion pounds' worth of research is very much needed by Britain and the country's manufacturing industry. Much more thought needs to be given to the question of how the able scientists involved in defence research and development can be redeployed and their skills harnessed for our manufacturing industry.

I shall comment briefly on industrial research and development, which is one of the great problems in terms of the competitiveness of British industry. We have heard comments today about the Department of Trade and Industry scoreboard and how poorly we come out of it. But that is ignored by the White Paper. Tax incentives, which are part of Labour party policy and have been urged on the Government by the Lords Select Committee, are necessary to boost industrial investment in research and development.

When statistics are cited to the Minister about Britain's investment in research and development, he says that we are about the middle of the pack and that our investment is about the average worldwide level. That is simply not true. This country devotes about 2.2 per cent. of its GDP to defence, civil, industrial and Government research and development. For most of our competitor countries—including Germany, Japan and the United States—the figure is 2.8 per cent. In civil research and development, we are about 1 per cent. of GDP behind those countries.

Another £6 billion a year should be spent on research and development. If, at some stage, we want long-term industrial success and a growth strategy, we must find those resources so that research in this country can back up the great skills of scientists in our universities.

1.32 pm

Mr. Nigel Waterson (Eastbourne)

I join other hon. Members in welcoming both the debate and the White Paper and I congratulate my right hon. and hon. Friends on the Front Bench on securing the debate in the first place. I congratulate my hon. Friend the Member for Boothferry (Mr. Davis) on exchanging the heat and smoke of the Maastricht battle for possibly the more quiet and cerebral atmosphere of his new Department. I wish him well in his new post.

The White Paper is good news because it clearly recognises the importance of scientific and technological innovation and the successful exploitation of such innovation to the benefit of our nation's prosperity and position in the world. There are various ways of measuring scientific output, and we have heard most of them referred to during the debate. The number of scientific papers published and cited by others in Britain in the period 1981 to 1990 was second only to the number of those published in the United States. That serves to underline the point made by hon. Members on both sides of the House—we are not short of new ideas but we often fall down on their implementation and fail to profit fully from them.

I particularly welcome the idea of Technology Foresight. The Government have examined carefully the experience of some of our major competitors, such as Germany, the United States and Japan, and have concluded that one of the best ways of realising our objectives is through the introduction and the application of Technology Foresight—a system which will not only provide early notice of the key emerging technologies but will help to forge a new working partnership between the bench scientist and working industrialists. A key element of success is frequent, productive and informal contacts between scientists and firms. We should be in the business of breaking down artificial barriers to that process. I commend the idea of an annual "Forward Look" prepared by the Office of Science and Technology which will provide a long-term assessment of the portfolio of publicly funded work and other important aspects of science and technology.

The proposed Council for Science and Technology, which will take the place of the Advisory Committee on Science and Technology, will be given the main responsibility of advising Ministers on the key science and technology issues facing this country and on the balance and direction of Government-funded science and technology.

Rightly, the White Paper places great emphasis on wealth creation. I entirely endorse a sentence from the CBI's brief on today's debate which states: The country cannot afford to develop elegant science and technology entirely for its own sake. That is a very perceptive view of which full account is taken in the White Paper.

It is essential that we consider the implementation of the new ideas of our scientists in industry and commerce and ensure that this country is the prime beneficiary of those new ideas. It is noteworthy that university income from industry grew substantially through the 1980s from £27 million in 1982–83 to £114 million in 1990–91. The number of university-based science parks grew from two to about 40 over a similar period. Like other hon. Members, I welcome the fact that the Government have decided to maintain the dual-funding system of support for research in our universities.

Hon. Members on both sides of the House and those who drafted the White Paper recognise that we have a deep-seated cultural problem with science and technology. I speak from the substantial background of my indifferent science 0-levels. In retrospect, it strikes me as quite bizarre that, when moving to the third form at my grammar school, I was forced to choose between ancient Greek, German and biology and make a rather crucial career decision as to how I was to proceed to A-levels and beyond —[interruption.] Opposition Members seem to think that I took the wrong career path, but that is a matter for them.

We now have imaginative proposals, not to encourage science and technology just as a dry, academic set of subjects divorced from reality, but to stress the importance of wealth creation. That is an important theme in the White Paper.

I recently had the pleasure of visiting in my constituency Cavendish school, Bishop Bell school, the sixth form college and Eastbourne college of arts and technology. I was immeasurably impressed by the imaginative and fresh way in which science and technology subjects are now being taught in all those institutions. That freshness and imagination are amply repaid by the enthusiasm and achievement of the students involved.

The Government's education and training reforms across the board are addressing some of the deep-rooted problems. My hon. Friend the Member for Pudsey (Sir G. Shaw) dwelt on the important question of national vocational qualifications. Despite other controversies, which may not be of concern to this debate, I am sure that the introduction of the national curriculum will, over several years, focus people's attention on the necessary issues set out in the White Paper under the heading of science and technology.

Although I cannot dwell on the matter in detail, I am delighted to commend the various education-related issues and ideas set out in the White Paper. Education is the basis for developing science in this country. It is interesting to note that, in 1990, more than 1 million people were employed in science and engineering occupations in the United Kingdom. The number of people employed in those occupations has grown sharply, with an increase of more than 50 per cent. between 1971 and 1990. Just over a quarter of all degrees and equivalent qualifications that were awarded in 1990–91 were in the natural sciences, mathematics and engineering. Again, I have no time to dwell in detail on this point, but the proposals to encourage and improve PhD courses have been touched on by various colleagues, including my hon. Friend the Member for Carshalton and Wallington (Mr. Forman). That is an excellent part of the White Paper.

In Eastbourne, we have a number of high-tech companies. Indeed, in Sussex there is talk of developing an academic corridor. I have a dream that one day Eastbourne will have its very own science park. We have had silicon valley and we have had silicon glen, why not silicon beach? We are fortunate enough to have the northern European headquarters of Rhone-Poulenc Rouen, one of the great pharmaceutical companies and a great example of British inventiveness. It is also, incidentally, the largest private employer in my constituency.

Another leading high-tech company is Edwards High Vacuum, which has been in Eastbourne for many years and has a state-of-the-art factory which I visited again only the other week. That company exports vacuum equipment world wide and competes even with the Japanese on at least equal terms. Also, a company called Computing Devices is at the leading edge of surveillance and computing equipment. It played a significant role in the Gulf war, particularly in providing equipment for our Tornado aircraft. That company has a tremendous and impressive commitment to research and development.

Government policy on science and technology matters to those and other enterprises in Eastbourne and throughout the country. It matters to those who work in those companies, and it matters for the economic future and the educational sector of our country. In short, it matters for all of us.

1.41 pm

Dr. Lynne Jones (Birmingham, Selly Oak)

Hon. Members have welcomed some aspects of the White Paper and the strategy in it, but I sense a deep unease on both sides of the House about whether that strategy will live up to, or be able to face up to, the challenges that the White Paper set itself in its initial consultation. We should recognise the needs of industry in terms of the science base, but I am deeply concerned that if our inadequately funded base is not to be improved and our budget is not to be increased, something will give, and that will be basic research, only a small proportion—about 20 per cent.—of the research councils' funding. In the long term, that would be very damaging.

My contribution to science and to our knowledge of intracellular communications was most marked in two aspects of my work as a scientist. One was when I got completely the opposite result to that which I expected and the other was when I discovered that, although a particular cellular component was being increasingly synthesised—the rate of synthesis was increasing—there was a net reduction in the content of that chemical. That demonstrates that one cannot predict the outcome of scientific research. It is important that we maintain an element of basic research. We have a good record in that direction, and it would be a great pity if, as a result of the strategy, it was undermined.

The emphasis in the White Paper on the privatisation of Government research laboratories and the needs of industry will undermine the long-term view. There is already criticism of short-termism in Government research laboratories. I do not see how privatisation will help to deal with that problem.

I shall focus most of my speech on the career prospects of research scientists, especially in our universities and research institutes. The White Paper rightly talks about problems in that area and mentions the fact that there has been a massive increase in the number of scientists on short-term contracts—the number has increased from 8,000 in 1980 to 16,500 in 1990.

Like my hon. Friend the Member for Cambridge (Mrs. Campbell), I am not sure whether the White Paper addresses the problem. It suggests that something should be done about the continuation of funding—building up contingency funding in universities—and the need to address the level of research studentships, which varies tremendously. For example, the Science and Engineering Research Council pays something like £5,000 a year to one of its postgraduate students. The level is slightly higher for the Medical Research Council. Cancer charities and others have recognised the importance of paying researchers a resonable rate for the important work that they do. They are paid about double what the research councils pay. In our universities, people who are undertaking different aspects of similar work in the same laboratory can receive completely different levels of remuneration which are not related to performance. That problem has not been addressed. Until it is, there will continue to be concern about the attractiveness of a science career to our young people.

I completely disagree with the Chancellor of the Duchy of Lancaster when he says that there is no shortage of good-quality young people going into research. If he talks to people in our universities and research institutes, they will tell him that the best graduates are leaving science.

That was highlighted in a recent editorial in Nature, which referred to the large number of young scientists leaving the field.

Like my hon. Friend the Member for Cambridge, I have a base in science and my partner is a scientist. If I were advising my children about a career, I would emphasise the importance of taking up a career that they will enjoy. However, if I were interested in financial rewards, I would say that they only need to compare our level of income—I am not especially complaining—with that of our friends who have gone into law, accounting or local government to see the difference. As a councillor, I saw the level of salaries for people working in different areas and compared them with the pay of my former colleagues in the universities. They do not compare well.

In our universities, lecturers with a number of years of research under their belts are being paid less than the salary of a police sergeant. Over the past 10 years or so, the relative pay of scientists has reduced remarkably—something like 20 per cent.—in comparison with other groups. It is not surprising, therefore, that our culture does not recognise the importance of science. That can be contrasted with our competitors.

When the Select Committee was in Germany, we were all struck by the fact that science was given much greater status and many of the people whom we met from science and other industries—for example, banking, the public sector and accounting—were scientifically trained. It is not true to say that we have an abundance of well-trained scientists—we do not. That is an area on which the White Paper sadly falls down.

A report published today by the Association of University Teachers and the National Association of Teachers in Further and Higher Education estimates that in five years' time more than 50 per cent. of our university teachers and researchers will be over the age of 50. It highlights the real problem in attracting the most able young people into science and our universities.

Another deep-seated problem that the White Paper failed to address is the failure of British industry to innovate. It is all very well to say that the science base must take to heart the needs of industry, but all the evidence given to me and my colleagues on the Science and Technology Select Committee points to the failure of British industry to take advantage of innovative science projects. That failure must be addressed, rather than expecting the industrial and business sectors to take some of the responsibilities currently held by the Government, for example, for the payment of research studentships. The Government must address the failure of British industry to meet its own responsibilities.

If our industry invested at the level of that of our competitors, an additional £6 billion would be devoted to R and D. The failure to address that issue of investment is a fundamental flaw in the White Paper.

The simple message is that our research and technology base needs more cash from the Government and from industry. The future of our science base should be dictated by long-term rather than short-term considerations. When the Select Committee visited Germany, we were told that, in times of recession, industry realises that it must increase its investment in R and D. The approach taken by our industry, however, is to do the opposite.

We must take a decision on which of two routes we want to follow. Do we want to be a successful economy based on a well-trained work force and a technologically highly developed industry or do we want to be a low-wage, low-tech, third-world economy? I believe that it is clear from the White Paper that the Chancellor of the Duchy wants to point us towards the first route. He should contemplate the reality, however, and decide whether the Government are taking the country down the route of our successful competitors or that followed by low-wage, low-tech economies.

1.52 pm

Dr. Robert Spink (Castle Point)

The hon. Member for Birmingham, Selly Oak (Dr. Jones) called for more cash and criticised the White Paper. In response, I shall put two hypotheses to the House. First, the key to success in science engineering and technology is cultural, not cash based, and, secondly, the White Paper contains much to welcome.

It is important to establish a philosophical foundation on which to build and I trust that it will command the support of the House and the nation. Our economy depends for its success on a significant, vibrant and wealth-creating manufacturing sector. Without the hard backbone of that sector, the softer service sectors could not thrive. That manufcturing sector relies on the science base.

We need to improve the status of engineers, technologists and scientists to attract the best brains to those disciplines and to improve the public understanding and appreciation of the importance of science. We need to sharpen up our act and translate fundamental research into saleable products and processes. The sale of such items to foreign companies, against international competition, would sustain and create jobs, wealth and influence for our people.

The White Paper was long awaited and digested with relish by the key players—industry, academia, the professional institutions and the fair-minded majority of the House. I shall adduce a sample of the evidence to support that conclusion for each of those key player groups.

As we have heard, the chemical and pharmaceutical industry is one of the most vigorous and international, and is an important sector of our economy. Last year, it generated a £3. billion trading surplus for this country. In welcoming the White Paper, the Chemical Industries Association said: At the heart of the white paper are two concepts that are welcomed and shared by the chemical industry: The importance of science and technology for improving our quality of life through economic success and wealth creation.

The role of partnership between and within government departments and the academic and business communities." Both of those concepts are culturally and organisationally based rather than cash-based concepts.

I do not have much time, so to illustrate academia's response I shall merely mention that the Select Committee on Education, of which I am a member, visited De Montford university two weeks ago and discussed the White Paper. The university was fulsome in its welcome of the White Paper and strenuously promoted the need for more near-market research and to improve the status of engineering and engineers. I do not have time to give more detail today.

To illustrate the response given by professional institutions, I shall quote the largest—the Institution of Electrical Engineers which, with its memorandum of understanding with the IMechE, can rightly claim to represent 200,000 professional engineers throughout the world. My choice of example pains me as I am a mechanical engineer, but the comments of the electrical engineering industry are important and, as one would expect, well structured and coherent. The profession's formal response to the White Paper states: The White Paper is welcome because it; —sets out a clear policy for engineering and science which addresses the UK's needs —commits the Government to develop engineering and science in the UK and recognises the need for urgent action —recognises the importance of engineering (and science) to wealth creation —accepts the need for the Government involvement at all stages of the innovatory process (applied as well as basic/strategic research) —develops the role of Government in identifying and promoting important and valuable technologies through:

• Technology Transfer
• Technology Foresight"

I believe that both sides of the House will welcome those initiatives. The response also states that the White Paper creates the Engineering and Physical Sciences Research Council with its specific commitment to —response to the needs of users —support basic, strategic and applied research"— the word "applied" is in bold to make it stand out— —develop training related to industrial competitiveness". My final example of the welcome given to the White Paper is from the House. For proof of evidence I need look no further than the Secretary of State's statement on the White Paper on 26 May. Some 18 Back Benchers were called to comment on the statement—sadly, I was not one of them. Six of them welcomed it unreservedly, two welcomed it in part and two rejected it. The eight others were noncommittal and simply posed questions; of those, five were Opposition Members and three were Conservatives, so we cannot read anything into that. Excluding the noncommittal Members, the statistics show that it can be argued that 80 per cent. welcomed, in part, the White Paper, and only 20 per cent. rejected it. Sadly, I cannot add any confidence levels to that statistical analysis as a scientist. I thank all hon. Members for their positive attitude and I hope that we can put aside petty party political point scoring and genuinely seek to move forward together for the sake of science and the nation.

Much of the evidence that I have adduced supports the hypothesis that culture counts more than cash, and adds to the evidence given by the Secretary of State today to demonstrate the wide welcome that the White Paper has received.

I should like to make three key points, giving the facts on our research and development funding record, reinforcing the pivotal position of near-market research and presenting the case for improving the status of the engineer and the scientist. Over the decade 1981–91, United Kingdom research and development expenditure on industry rose by 74 per cent. in chemicals; remained constant for electronics; fell by 17 per cent. in aerospace, for reasons that we all understand; and increased by 65 per cent. in our new and vibrant motor vehicle industry. The aggregate increase was 7 per cent. in real terms for all manufacturing. Those figures speak for themselves. The world is moving ever faster forward and we must continue to increase our spending in real terms on our science base.

My second point is the need to promote near-market research. I shall be brief because last year I spoke al length on that issue and my speech is recorded in the Official Report of 15 December 1992, columns 137–41. The nation does not take maximum advantage of its excellent science base which too often seems to benefit the economies of our international competitors rather than our own. That is a component of the British disease.

The phenomenon is clearly illustrated by the comparison between the United Kingdom and Japan. In this century, Britain has won 61 Nobel prizes and registered 50,000 patents. Japan has won only four Nobel prizes but has registered seven times that number of patents—350,000. That is a consequence of our neglect of near-market research. No one body is to blame arid even the City bears a share of the responsibility for that.

It has been pointed out that applied research receives only one tenth of the funding received by basic research. Consultations on the White Paper show that industrialists do not want us altogether to abandon good basic research. There must be a proper and more even balance between basic and applied research.

My third key point is about the need to improve the status of the engineer and the scientist. A national framework of objectives is required to promote engineering and science and make them more desirable. I have advocated the use of differential student grants, a redistribution from the soft arts to the hard sciences—from wealth absorption to wealth creation. That would attract more of the best students to engineering and away from professions such as the law. Perhaps that is a dangerous example in this place and I shall need to watch my back and my front.

I am bewildered by the fact that eminent scientists, engineers and professional managers who have achieved doctorates and often two other degrees as well are refused their correct title of doctor by no less an institution than the Financial Times. That can only be part of the British disease because it would not happen in Germany. I respectfully ask the Financial Times to rethink its editorial policy as part of a campaign to change the anti-science and anti-engineering culture of this country.

The Government should look again at the Finniston report, which contained excellent aims and, like the White Paper, often hit the target splendidly. These issues are cultural rather than cash based. That is because in essence, the problem is about attitude, perception and tradition. Time prevents me from adducing all the evidence in support of my hypotheses. However, I have given enough evidence to confirm that the two hypotheses can be sustained, that success in science, engineering and technology is more a function of culture than of cash and that the White Paper is a most welcome initiative.

2.4 pm

Dr. Lewis Moonie (Kirkcaldy)

As usual, I have the wonderful task of trying to condense a 40-minute speech, prepared in case there was a shortage of speakers, into the 10 minutes that I have left because of the superfluity of them. I am sorry that my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) and the hon. Member for City of Chester (Mr. Brandreth) have been unable to take part in the debate. That happens sometimes, and I am sure that they will catch your eye favourably, Mr. Deputy Speaker, in our next debate on science, which I trust will be soon, and not in 10 years' time.

The Chancellor of the Duchy of Lancaster has twice referred to an item in the Labour party paper published just before the White Paper, on which I feel that I must correct him, for the record. He has described us as condemning scientists for just demanding more money. That was not what we said. We said that it was a disappointment, when the right hon. Gentleman was addressing so many issues, that some people had chosen to address only the need for resources. That is a quite different point and a different emphasis. I suspect that if he had read as many different documents as I have, he might not have made that error.

We start our debate against the background not only of the White Paper but of our economic and industrial failings. Without casting any blame, although no doubt that will be done on many other occasions, generally in the direction of the Government, I must point out that spending by the Government has fallen in real terms, from a high point in 1985–86 of £6,093 million to £5,117.3 million. Those figures are not mine; they came in a written answer from the Office of Public Service and Science.

That is the background to our debate—spending has fallen, and spending on civil research has fallen faster than that on defence. We must accept that reality. I believe that Ministers have accepted it. The President of the Board of Trade, in his introduction to the research and development scoreboard publication this week, said: It is also sobering to see that the top international companies spend some 4.6 per cent. of their sale figures on R and D where UK companies spend 1.6 per cent. There is much else in the background to which I could refer—our slow recovery from recession and the slight fall in real cash terms in the science budget, ignoring the transfer from the education budget to the science budget, which was money that was to be spent anyway over the next two years. That fall is disappointing. It is a larger fall in comparison with the rate at which we expect GDP to grow over that time and, therefore, worrying.

I could speak about many of those matters, but have not the time to do so. The White Paper appears at a time of great concern for anyone who wishes to see us live in a thriving and prosperous country; therefore, we must judge it not on its main objectives, but on what it has left out. Had the Chancellor said that that had happened, and that we might have to return to the subject and develop it, we might have accepted the support from some Conservative Members for his position. However, he did not. In effect, he said, "This is what you are getting and that's tough. Consensus means that you must agree with it." That is not so.

Hon. Members on both sides of the House have shown today that consensus means that the Chancellor must also be prepared to move his position and listen to constructive criticism. I accept that criticism must be constructive. He must accept the need for change and development in some of his proposals. We whole-heartedly welcome some of the proposals in the White Paper and we welcome it as a step, but only a step, towards a rational basis for a scientific and technological development.

Had I time, I would refer in detail to submissions that I have received from the Institution of Professionals, Managers and Specialists. As right hon. and hon. Members will appreciate, that is not a body of "Trots," but a much respected organisation whose comments the Chancellor of the Duchy of Lancaster will, I am sure, read with great interest and concern. The same is true of the comments of Save British Science, which represents scientists, working in many different disciplines.

Although we welcome the Government's objectives, they will not of themselves guarantee manufacturing success. We emphasise the need for new resources. I am not arguing, as the Chancellor of the Duchy of Lancaster might suggest, that new resources will solve all the problems, because they will not. However, some new money, properly spent, is essential. I am certain that the right hon. Gentleman, in his heart and in his head, recognises that. Whether he can convince his colleagues in the Treasury, in particular, of that is another matter, but I am sure that he will fight that battle on behalf of our science base.

Although more money needs to be spent on near-market research, that should not be done at the expense of our science base. The two are separate and—sadly, in this context—conflicting priorities. Money must continue to be spent on our science base, and this country's scientific knowledge must continue to advance. They can be complementary.

The Economic and Social Research Council is the least hard science-orientated of the research councils, but over the past year it has produced far and away the best material for anyone seeking a better understanding of our failure to implement technology and to innovate. The best contributions to that debate are made by ESRC documents such as "Innovation Agenda" by David Smith and that which I received today, "Regenerating British Industry—An Agenda for Management." Both are worth studying, for they have much in them that could be developed.

An attempt must be made to reverse the fall in total Government spending on research and development. One recognises the economic difficulties—I am prepared to go that far, given a public spending deficit of £50 billion. However, money spent in that direction will have a multiplier effect and generate future wealth, so it should not be considered in the same category as spending that offers a lower return.

Tax credits have been shown to work in the United States as a cost-effective way of ensuring that additional research and only additional research—there is no dead weight cost—is undertaken by British companies that are eligible for tax credits. It is disgraceful that, in a recession, British companies cut back on research and development but borrow to maintain dividends. That is not the way to ensure long-term success. There could also be better support for small to medium-sized enterprises through a technological infrastructure and the provision of more effective resourcing.

As to human resources, the Chancellor of the Duchy of Lancaster should ask those of his colleagues responsible for education, particularly in Scotland, why more children in Scotland achieve science qualifications to enable them to enter into university than do children in England. In a state school in Fife, my sons are taught in science classes of 15 pupils, whereas their counterparts in England are taught in classes of 30 to 35. The same is true of all the other schools in Fife at least.

That kind of attention allows children to develop an understanding and a liking for science, which encourages them to continue with the subject further into their curriculum—particularly in Scotland, which has a wider-based curriculum than England and Wales, which stick to three A-level subjects. Perhaps that is another point for future discussion.

I hope that the number of PhDs will not be reduced as a means of increasing the number of MSCs. Although MSCs are a good first step, which I have recommended in the past, we cannot reduce the number of PhDs until figures are produced showing that we can afford to do so. We must base our decisions on information, when it is available.

We need to take three kinds of technological action. First, we should act on an international level. We should take account of the fourth framework programme, and consider what we can contribute and what we can take out of it. At national level, we must look at key technologies such as telecommunications, information and environmental management. We should expand such technologies, rather than reducing and rationalising them. We must introduce the necessary mechanisms—for instance, a limited number of new research institutes. Those mechanisms must be cross-disciplinary—not tied to a single institution, but large enough to take the best from all of them. That is one reason why Faraday centres are so important: they are not tied to one university department, but can draw from a cluster of six, seven or eight. Consequently, they can contribute much more to the regions in which they are sited.

I welcome the Minister unreservedly to his new post. I hope that the Chancellor of the Duchy of Lancaster has listened to what I have said; it was intended to be as constructive as all the other speeches, and I hope that it will be accepted in that spirit.

2.16 pm

The Parliamentary Secretary, Office of Public Service and Science (Mr. David Davis)

I thank the hon. Member for Kirkcaldy (Dr. Moonie) for his welcome. I should have liked to compliment the hon. Member for Redcar (Ms Mowlam) on her maiden speech on science, but I know that she had to leave. If we have achieved nothing else, we seem to have stirred the Oppositon Front Bench to a response. I am sorry that the hon. Member for Linlithgow (Mr. Dalyell) is unavoidably absent; he wrote a gracious letter explaining that he could not be with us today. We Miss the benefit of his wisdom, which, no doubt, we shall have on a future occasion.

Although I am not entirely new to science, I am a new boy in terms of ministerial office. I am delighted to be able to speak so early on an almost equally new White Paper, although all the credit for its contents must go to others. One thing that science training provides is a sense of humility in those dealing with complex subjects. [Interruption.] It is clear that one of my colleagues has not observed that sense of humility before. I am still listening and learning, as we all are: our approach to science, engineering and technology has not changed just because we have published a White Paper.

I was impressed by the number and quality of speeches, which was unusual for a Friday. I shall refer to as many as possible; I hope that hon. Members whom I do not mention will forgive me. If they have specific questions, I shall try to write to them. First, let me pay tribute to my hon. Friend the Member for Wantage (Mr. Jackson), who spoke eloquently; if I had known that he was going to speak, I would have formulated an equally eloquent compliment, as I believe that much of the potential success of our policies is thanks to him.

In a famous exchange, Newton was asked the reason for his success in scientific achievement. He replied—I speak from memory—"If it falls to me to see further than others, it is because I stand on the shoulders of giants." I feel the same.

My hon. Friend the Member for Wantage argued eloquently in favour of a strategy of maximum effective use of finite resources without an undermining of our basic capacity. I believe that we all agree with that.

My hon. Friend the Member for Pudsey (Sir G. Shaw), the Chairman of the Select Committee, made an eminent and witty speech. I hope that he will forgive me for saying that, given his problems with the gender of the Opposition spokesman, we shall not propose him as a candidate for chairman of any of the biological research committees. He made a strong and eminent speech on many broad-ranging matters, which the Select Committee had considered before, and, like many others, concentrated on two rather significant areas. The first was the importance of science and technology in wealth creation, which is a fundamental part of the White Paper and, in some senses, is one of its most important thrusts, and the second was the importance of engineering. I remind the House that only this week the Secretary of State for Education announced an engineering bursary scheme to try to attract the best A-level students into science degrees. My only regret is that it is one year too late for my daughter, but it is an important and symbolic gesture which shows how seriously we treat the matter.

My hon. Friend also dealt with defence research and development and with what will happen as pressures mount on the defence R and D budget. One or two hon. Members made the mistake of suggesting that the White Paper does not consider that point. Chapter 4, which is devoted to this important subject, contains commitments to increase the civil spin-offs and states that the Defence Research Agency is an excellent structure to achieve that.

It has been suggested that the Office of Science and Technology will not have the clout in Whitehall to carry this through. I have always been told that it is a good idea to be underestimated at the start of one's job, so I thank the hon. Members who made that point. Our chief scientist, Bill Stewart, has equal status to the MOD's chief scientist and will play a full role in discussions.

Mr. Miller

The MOD has the tanks!

Mr. Davis

We shall see.

The DRA will publish in its annual report its progress in transferring its expertise and technology to industry and in generating income from sources outside government. That is an important and fundamental point.

A number of points were made by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), but, if I am to be fair to other hon. Members, I cannot deal with all of them now. He asked about the composition of the Technology Foresight group. Like him, I view Technology Foresight as one of the jewels in the crown of the White Paper. It is the central technique which will help us to deal with many of the criticisms that have been rightly raised today. That foresight steering group will be drawn mainly from the industrial, scientific and engineering communities, and also from research charities and, of course, from Government Departments. I know that my hon. Friend is knowledgeable of the engineering community and we will bear that in mind when we select the group members. I will also bear in mind his other comments.

My hon. Friend the Member for Bedfordshire, North asked about the possible transfer of Government-funded laboratories to the private sector. That is covered specifically and explicitly in the White Paper. The Government believe that many of the services currently provided by research establishments could be carried out by the private sector. He will forgive me if I do not go into detail; I do not want to pre-empt decisions that are to be made later. The Government are keen on the idea of private-sector funding and certainly do not believe, as I think the hon. Member for Cambridge (Mrs. Campbell) suggested, that it would lead to short-termism. On the contrary, the customer-client relationship leads not to short-termism but to explicit understanding of what we are trying to achieve.

My hon. Friend the Member for Bedfordshire North also asked whether the Council for Science and Technology was broad enough for the task. Yes; it will bring together customers of publicly funded research, industrialists, academics and the Government Departments that are most directly involved.

Two of the most penetrating speeches this morning were made by my hon. Friends the Members for Elmet (Mr. Batiste) and for Carshalton and Wallington (Mr. Forman). I listened carefully to both of them. I took the comments of my hon. Friend the Member for Elmet on the Mission statement for the Government. I shall be drawing mine up when I return to my Department.

The hon. Member for Motherwell, South (Dr. Bray), as always, made a broad-ranging and impressive speech. I have followed many of his speeches carefully in the past because of my interest in the subject. He held out the wonderfully disingenuous option of 2 per cent. additional growth which we should all like to achieve and for which we struggle. I thought that his presenting the President of the Board of Trade as a barbarian—despite his nickname as Tarzan—was going a little far, but I understand the point he was making. [Laughter.] I thought that that would get attention.

The hon. Gentleman was trying to assert that the Chancellor had failed to persuade the DTI of the importance of technological competitiveness for the growth of the economy. I remind him that we are talking about a Government White Paper—it has Government support, Cabinet support, collective support, and it sets out the way in which the Government believe the country should proceed. We will fight that corner in the coming years. I say that with deliberate emphasis on the plural. [Interruption.] I gather there is another optimist on the Opposition Front Bench.

My hon. Friend the Member for Lewes (Mr. Rathbone) picked up the point about funding, which was made by several Opposition Members. I shall also deal now with the question of an incremental tax system. He said that it was important for a commitment to be made to funding, but, under our system, White Papers do not make such commitments. However, we got as close as it is possible to get. Paragraph 1.17 states: The Government will continue to allocate public resources to science and engineering on the scale necessary to continue the policies in this White Paper. We have watched the incremental tax scheme in America. At the moment, we have a 100 per cent. tax allowance scheme, but the incremental scheme is the notion that, on a marginal basis, one adds 25 per cent. or a higher figure. The difficulty is the classification of R and D and the behaviour of companies under such a scheme. I do not wish to spend my remaining four minutes setting out a doctoral thesis on the subject, but I will say that it is extremely difficult to design a watertight system. If that were not the case, the scheme would be a much better runner. We are watching, but the American experience so far is ambivalent, and we should find it very difficult to make it work.

The hon. Member for Carmarthen (Mr. Williams) questioned the absence of Faraday centres. I do not have time for my story about Faraday—I have already told my story about Newton—but I remind the House of the Faraday principles. They are a two-way flow of industrial technology and skilled people between science and engineering-based industry, partnerships between industrial-oriented research organisations in the science and engineering base, core research underpinning product and process development, and industrially relevant postgraduate training.

This is a Faraday White Paper. Faraday centres are not incorporated in it because small and medium-sized enterprises, which would gain most from the concept, did not show any enthusiasm for the system so we are trying to achieve the Faraday principles by other mechanisms. If one wants to remember the White Paper by one set of criteria, let it be the Faraday criteria.

The hon. Member for Birmingham, Selly Oak (Dr. Jones) who, sadly, is no longer here, mentioned career structures and said that the best graduates were leaving science. That is not the case. There is a net inflow of academic staff from other employment. Like the concept of the brain drain, her suggestion is plumb wrong. I shall not read out the figures, but, if the hon. Lady wishes, I shall write to her. I remind the House again of our action on the engineering bursary and our decision to examine the quality of students.

The key points in the White Paper are, first, the "Forward Look" which sets objectives over a five-to-10-year period. It will deliver a long-term national strategy for Government science, engineering and technology which should be welcomed by everyone and, as the Chancellor said, has been welcomed by virtually everyone.

The Technology Foresight programme is the jewel in the crown of the White Paper. We will use that method to deal with the issue of foreign countries exploiting technology more fully than we have historically done in Britain. We have good technologists and scientists, but we have not translated that fact into the wealth creation that the White Paper attempts to address.

The new Council for Science and Technology—the forum of independent members from industry, business, academia and Government—is to be chaired by my right hon. Friend. The explicit political clout that the council is to be given demonstrates the political commitment to raising the profile of science and engineering technology.

Many points relating to chemistry were raised with reference to our debate on the changes to research councils. That matter is under review, of course, but all the research councils have been told explicitly that they must study the underlying science as well as the individual areas that they address.

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.