Research Establishments (Hansard, 6 November 1996)

10. Mr. Mc William
To ask the President of the Board of Trade if he will make a statement on the future of the public sector research establishments. [534]

§ Mr. Ian Taylor
The Government are determined to achieve the greatest possible benefit from the substantial resources devoted to the public sector research establishments. Discussions on the future of each establishment are taken on a case-by-case basis.

§ Mr. McWilliam
Will the Minister give an undertaking that the pensions cost of privatising those research establishments will not be borne by the research budget?

§ Mr. Taylor
In each of the cases of a prior options reviewed establishment that we are considering, pensions crystallisation will need to be taken into account. I am determined to maintain the strength of the science base, and obviously we would need to take into account the impact of not only pensions crystallisation but redundancies on the science budget or the public sector borrowing requirement. That would be a matter of negotiation with any party if a research establishment were to pass into the private sector.

§ Mr. Ingram
I think that the Minister is dodging the very question asked of him. Why does he not accept that this Gadarene rush to privatisation of those important research facilities not only demoralises the tens of thousands of scientists who work in those laboratories but has no support within many sectors of industry or the wider scientific community? According to the Royal Society, it could lead to a serious erosion of the United Kingdom research base. May I ask the Minister again whether he will give an unqualified assurance that the already overstretched science budget will not be further raided to pay for redundancies, pension transfer costs or generous sweeteners for the purchasers of the laboratories? A simple yes or no answer will do.

§ Mr. Taylor
The hon. Gentleman clearly does not understand the complexity of the research establishments and the fact that they differ one from another, or he would not ask such a naive question.
It is impossible to know what the impact of the liabilities of a pension scheme will be until we look at it in the context of each department. The liabilities for pensions exist currently; they are not suddenly plucked out of the air. They are only crystallised if they are transferred out of the pay-as-you-go system in the public sector to the funded system of the private sector. That would need to be taken into account if there were to be a transfer, but I draw the hon. Gentleman's attention to decisions that have already been made. In certain cases, a prior options reviewed establishment has gone into a Government agency; in other cases, it has gone into the 1232 private sector; and on other occasions, it has stayed in the public sector. There is no dogmatic precondition to the review process.
I challenge the hon. Gentleman's completely negative policy in his so-called manifesto, which states that Labour would not enter into prior options reviews. That is nonsense, when the civil research establishment's cost base accounts for 10 per cent. of total Government expenditure on research and development.