INDUSTRIAL RESEARCH AND DEVELOPMENT

HL Deb 05 February 1970 vol 307 cc767-804

4.7 p.m.

THE EARL OF BESSBOROUGH rose to ask Her Majesty's Government whether they consider that the creation of the kind of research and development corporation proposed in the Ministry of Technology's Green Paper Industrial Research and Development in Government Laboratories—A New Organisation for the Seventies (H.M.S.O. 1970) would be the best method of encouraging the development and exploitation of the results of research by industry itself. The noble Earl said: My Lords, the object of my Question at this stage is not to be over-critical of the Green Paper—I hope that will reassure the noble Lord, Lord Delacourt-Smith—but is entirely designed to elicit further information. It may be useful for your Lordships to have this preliminary discussion on the Green Paper on Industrial Research and Development, which has been issued by the Ministry of Technology—especially since the Ministry itself said that it would welcome debate on the proposals; and in particular, those relating to the formation of the proposed new British Research and Development Corporation. I agree that it is perhaps a little early to discuss this Paper since it has not been published very long, but when I heard that there was not very much Business on the Order Paper to-day and that there would be an opportunity of putting the Question down—with which the noble Lord, Lord Delacourt-Smith, agreed—I did so.

According to the Ministry's publication, the new Corporation, if it were decided to set it up, would employ between 4,000 and 5,000 professional staff and, I understand, some 18,000 people in all, and would spend some £70 million annually. I gather that the Corporation would take over not only the present National Research and Development Corporation but also ten Government establishments, including the famous National Physical Laboratory, the National Engineering Laboratory, the Warren Spring Laboratory, the Hydraulics Research Station and the Forest Products Research Laboratory, as well as the Atomic Energy establishments 'Harwell, Culham, Winfrith, Dounreay and Risley.

In the first place, I should like to ask the noble Lord what the Minister means in his Foreword to the Paper by saying that the N.R.D.C. would be"assimilated"into this new organisation. Does it mean that the N.R.D.C. will itself be dissolved and its functions taken over by the new British Research and Development Corporation, perhaps using the existing permanent staff at the N.R.D.C, or will the N.R.D.C. remain a separate unit, perhaps like the N.P.L. and the other Government stations, within the overall organisation? I am not quite clear what the Minister means by this statement.

Later on, in Section III, there is a reference to the integration—perhaps this goes further—of N.R.D.C. into the new Corporation, with a statement that the effect of this would be to provide the essential element in the new Corporation's management structure which would direct its attention to the need to secure a return on its work and investment. But, my Lords—and this is the burden of the Question which I am asking the Government—would it not be possible to involve industrial firms more directly in this research, not only in applied research and development but even in basic research, by assisting specific firms or universities to do this work, perhaps with help from the qualified scientists and engineers at present employed in the different laboratories mentioned in the Green Paper?

Moreover, what will the new B.R.D.C. be able to do which N.R.D.C, with their increased borrowing powers, cannot already do in developing and exploiting new inventions? We must all be glad to read, as we do on page 10 of the Paper, that N.R.D.C. broke even for the first time last year. Do the Government propose to let them carry on the good work? They are already in a good position to take up and if necessary develop and exploit any promising inventions which come to their notice in present research establishments. The Government laboratories are themselves doing an excellent job, and some of them are earning considerable revenue. I do not know why they should now necessarily have their status altered by being absorbed in this Corporation. For example, why should the Hydraulics Research Station, which I happen to know fairly well and which is consulted by Governments, port authorities and firms all over the world—it is a first-class organisation—be included necessarily under this overall umbrella? There may be a very good reason, but I should like the noble Lord to tell me what it is. What will be the advantage to the country? What advantage will the establishment itself get from it? They already have quite an acute commercial viewpoint, if I may put it like that, and are, as I say, earning considerable revenue.

Some observers cannot resist coming to the conclusion that the new Corporation is partly, if not mainly, designed to absorb those elements of the Atomic Energy Authority which have not been taken on by the two nuclear design and construction consortia or the new fuel company, which still, I think, is not formed. If that were the main reason for forming the new B.R.D.C.—to take up, perhaps, certain redundancies—then I do not think it would necessarily be good enough. I can see that qualified scientists and engineers in Atomic Energy Authority establishments might now be available to enter other Government laboratories which are to come within the sphere of the proposed B.R.D.C, and those who appear qualified and seem needed in research stations where there is a shortage of qualified staff will no doubt be most welcome there, but I hope that the existence of the B.R.D.C. will not mean that such qualified scientists and engineers are foisted (if I may use that word) on those laboratories regardless of whether or not the head of the laboratory or the director of the laboratory thinks they have a contribution to make. I shall be interested to hear what the noble Lord has to say about that matter. I feel certain he will be able to give a satisfactory answer. I hope he will.

I realise that it is not intended that the employees of the new Corporation should be civil servants. That is no doubt a good idea, and something which many of us have long advocated. But I hope that every effort will be made to arrange —and I am sure that, in these circumstances, this will be more possible—for transferable pension schemes as between the new Corporation and industry itself. I am sure that the whole intention is to steer research into more profitable fields. If, as I understand, that is the intention, all well and good. I understand that it is the Government's intention to involve industry more fully in such work; and I was very glad to read paragraph 25 of the Green Paper in which it is stated that experience in this country and abroad suggests that no Government Department can decide centrally what research programmes are best designed to serve the needs of industry. This is good; and I would judge that the Government must be inclining more and more to Conservative views in these matters, as they did in the reorganisation of the atomic energy industry.

I have often said in your Lordships' House that I think the formula in America, where the Atomic Energy Commission does no research of its own but puts out to contract with industry even basic research, is the kind of solution to which we should move in this country. I recognise that it may take time to gear industrial firms to take on all this work, but I think it would be no bad thing to state that this should be our aim, and I should be grateful to the noble Lord for his views on that argument. It must now be generally agreed on all sides of the House (except, perhaps, by the noble Lord who belongs to the Communist Party and who sometimes sits on the Cross-Benches) that the best place for industrial research and/or development is in industry itself. I think, too, that it is agreed that there are areas where Government should itself start research and/or development in industry—for example, where the Government are a major purchaser of products which incorporate the results of research and development; that is to say, in Defence research.

Secondly, Government support may be justified where companies in an industry of major importance in this country face competition with companies in other countries; and, thirdly, it may be justified where there is a need for a large-scale costly prototype of a product or process to demonstrate the advantages of a new technology, or indeed where the project is too large for the company or the group of companies to risk its own financial resources. Lastly, Government support may be justified where there is no existing industry to develop a new technology. But even in those cases this work should, in my view, if possible be done by the firms themselves or by universities with, if necessary, Government assistance.

The view is fairly widely held that certain research activities are exclusively appropriate to Government laboratories: for example, when there is no research association or other independent organisation which possesses the relevant expertise; where research is applicable to a wide range of industries in which the Government have legislative responsibility, such as standards, safety, basic design data, fire prevention, noise, pollution (which we were discussing yesterday) research in which national or local Government have an overall responsibility, as in Defence, roads, health and housing. There is also research on a scale adequate to develop expertise as a source of technical advice to the Government as a purchaser; that is to say, again, in Defence, in air traffic control and in the use of computers. Government establishments may also provide large-scale test facilities for common use by industry, thus avoiding duplication of expensive facilities—for example, ship-tanks, wind tunnels and iradiation facilites.

Appropriate as it may be thought that such research should be undertaken in Government laboratories, I none the less feel that even in all these areas careful consideration should be given to the alternative of setting up such facilities within industry itself, or the universities, before deciding to site them in a Government establishment. Wherever an industry or an individual firm are capable of doing the work, they should in my view be given every encouragement and assistance to do so. It is also argued by some that Government laboratories should only undertake sponsored research for industry if for some reason it is not possible for the work to be done in industry itself. But I must say that, personally, I think there may be few research fields in which an industrial firm or a university, if adequately supported by Government, could not make as important a contribution.

My Lords, I am glad to see that the noble Lord, Lord Todd. and the noble Lord, Lord Jackson of Burnley, propose to say something on the Green Paper this afternoon. Their preliminary views on it will be most interesting. I agree, as I say, that it may be a little early to have a full discussion on the Paper, but none the less it may be of use to your Lordships and to the Government to hear some preliminary reactions. I am glad, too, that the noble Earl, Lord Shannon, is also to speak. We should congratulate him on his appointment as Director of the new Conference of Research Associations. I used to be concerned with these Associations fairly closely as Parliamentary Secretary, and they are certainly interesting examples of co-operation between industry and Government. I shall be glad to hear what the noble Earl has to say about them to-day.

A great deal of money is spent by Government and by industry on research and development: and for some of us it is impossible to escape the conclusion that we should judge the effectiveness of such expenditure by the results achieved in selling new products successfully in world markets. The methods used by Government to encourage technological advance in industry should, in my view, be improved and made a good deal more efficient. I hope that if the proposed new Corporation is formed this will happen. But, frankly, I do not know; I am uncertain about this. I should be glad if the noble Lord, Lord Delacourt-Smith, could show us in a little greater detail than the Green Paper does how he thinks this will happen.

Many of your Lordships were impressed by the Government's decision, in the face of an adverse majority on the Select Committee on Science and Technology in another place, to break up the Atomic Energy Authority and promote the establishment of the two new design and construction consortia, who were encouraged to forge their own links with firms on the Continent. This was courageous action on the part of a Government which may otherwise have often appeared dedicated to doctrinaire nationalisation. It came as a surprise that in debating the matter in your Lordships' House the majority of speakers on all sides advocated the breaking up of that monopoly. I should like to see the Government again take courage and perhaps apply the same principle in other areas.

As I said earlier, the Ministry, MINTEC, in paragraph 25 of the Paper, seem to be moving our way. I hope that they will continue to do so. At the same time, I hope that the Government as a whole and—indeed both Houses of Parliament, and not only Mintec— will have a very hard look at these proposals. As I said at the beginning, the object of my Question is to elicit information, and I am glad that there are other speakers more qualified than I am to follow up this Question before the noble Lord gives us his Answer.

4.26 p.m.

LORD BALOGH

My Lords, the noble Earl is to be congratulated upon having raised this very important Question this afternoon. It is of vital importance to us and to our future as an industrial country to regain that lead which was lost by this country some eighty years ago and never reconstituted. 1 approach the Question from a very different provenance and a very different point of view from that of the noble Earl—who is to be congratulated, however, on the fact that, as a Conservative, he has given so many exceptions in which socialist action by the Government on industrial matters is needed that he has hardly omitted any. On that basis, one sees that if his views were taken by the Government they could indeed be accused of being Socialist doctrinaire nationalisers —a charge which I otherwise fail to see how even the noble Earl can bring.

THE EARL OF BESSBOROUGH

My Lords, I do not like to interrupt the noble Lord, but I did say—and I emphasised this twice—that in all these cases there should first be an examination of whether industry itself could not do the job just as well.

LORD BALOGH

My Lords, I take the noble Earl's correction and apologise.

Listening to the noble Earl, one would not realise that the Government are already doing an enormous amount for industrial research. Indeed, in this country industrial research and development expenditure has been far more supported than in the U.S.A.—by tax exemptions, by grants and by various other means— and it is interesting that industry did not seem to have responded to this stimulus in the way which the noble Earl's speech would have led one to anticipate. However, I do not wish to be controversial and therefore I want to congratulate the Government that when this very important Question was on the tapis they brought forth not a While Paper, in which they, so to speak, take a diktat, but a Green Paper which threw this question open to debate, and took Parliament and experts on both the industrial and the scientific side into their confidence.

As such, speaking as a firm supporter of the Government—so to speak, as a candid friend; but not in the George Canning sense of the candour of friendship—I believe that the problem which is before the Ministry (quite apart from those problems mentioned by the noble Earl in connection with the Atomic Energy Commission) is its own large size and the crushing burden of its responsibility. I understand from my friend William Armstrong that some 92 Undersecretaries exist within the Ministry of Technology, plus some seven Deputy Secretaries, and these are supposed to be controlled by one Permanent Secretary. But even a Permanent Secretary of the giant stature of Sir Otto is hardly capable of doing this.

Among these responsibilities are also the Research Establishments on a vast scale, and of huge variety, with the Atomic Energy Committee one of the most important. Therefore one can understand the animus behind this proposal on the part of the Civil Service. One wants to hive off as much as possible, because in this enormous wodge of responsibilities of various kinds obviously this is one which is especially difficult to perform. But is this the best way—to get all the establishments in the N.D.R.C. under one hat and make a new Corporation of it? I can understand that the Post Office was, so to speak, made into a Corporation because lettersorting, and even telephone ordering, is an activity which I should have thought lends itself to commercial viewpoints and supervision. And perhaps in such spheres one can get (though one has not so far seen very much of it) the sort of vivid activity which would be required, for instance, by the Giro in order to match the facilities given by the British banks. But to expatriate technology from the Ministry of Technology is a very odd way of proceeding. What remains of the Ministry without technology? The answer to that is very difficult. I must say that the Green Paper raises more questions than it answers; and for that we are very grateful, because it shows that obviously a great deal of discussion is still possible; that the scheme has not yet crystallised. I am eager to see initiated a series of discussions and meetings, in more intimate terms and not so public as those in this or the other House, because this is no problem which can be solved either without the scientists or even without the social scientists. The problem of control, of new research, raises questions of exceptional complexity in sociology and psychology, quite apart from economics. We do not know therefore how this new Corporation is to be constituted. We do not know very much about the methods of finance and the contemplated administrative structure. All these are questions which one ought to know about before one can make up one's mind, yes or no.

One of the most potent arguments— I am sure that on the other side of the House this is the most potent of all—is that this will ensure freedom from Civil Service supervision and control. But is that true? Has our experience with this sort of Corporation shown that we are free of Civil Service control? What it has shown rather is that, instead of young and vigorous civil servants, rather old and retired civil servants get into these Corporations, together with some people, a restricted number of notabilities who ever recur in the lists of these things— like the stage army in Verdi's opera Aïda, where, so to speak, millions rolled up out of a very restricted number.

The Green Paper says that this new departure is necessary because there was a low return from R. and D. But, my Lords, we have had very low returns from any investment in this country. Whilst one of the great problems is that our management has never been so science conscious, so cost conscious, as for instance German or American management; and to shift responsibility hither to fro, or even so far as the noble Earl, Lord Bessborough, mentioned, to industry itself, will not cure the evil. The problem is very much further-reaching, and I feel that on the whole it would be a mistake at this moment to set up this Corporation, and especially to put it under a non-responsible premium of the Corporation which has this sort of new power; power without responsibility, or with responsibility only to the Minister, in a very restricted sense of the word. I do not very much like it. I have always warned against what I call microcircuitry—that is to say, the chase after gadgets of the most modern kind. Our industry and our industrial future will be decided in the mass industries and not in these fanciful things. It is on the broad industrial front that we want to proceed.

My Lords, there is one particular point that I should like to stress, and to bring to the attention of the Minister and, through him, to the Secretary of State. The N.R.D.C. has proven itself. If the N.R.D.C.s combine in one Corporation with all these research institutions there will be a conflict of interest, or at least a putative conflict of interest. The conflict of interest will be between those people from outside the Government establishments who come in to help N.R.D.C. in the exploitation of their patents and the activities of the research institutions themselves: because, of course, the research institutions have an interest also in making certain discoveries themselves, rather than leaving other people to make the discoveries. So I think that some people who would now unhesitatingly go to N.R.D.C. will no longer do so, for fear that perhaps the other part of the new British Research Corporation might interfere or exploit or in some way purloin their inventions. This applies to both larger and smaller firms.

Before sitting down I would just say that I hope the Ministry will enable us to discuss this question much more thoroughly with much more information than—quite naturally—has been vouchsafed in this first effort in the White Paper. Science is much too important to be left to a board, or even to scientists, just as war is too awful to be left to the Generals.

4.39 p.m.

LORD TODD

My Lords, I am grateful to the noble Earl, Lord Bessborough, for giving us the opportunity, through his Question this afternoon, to make some observations, however preliminary, on the Green Paper that has been issued by the Ministry of Technology; for that Paper is concerned with a problem to which, in the national interest, we simply have to find a solution. To put it briefly, as I see it, it asks the question: How shall we organise and deploy Government research and development in the civil field to the maximum benefit of our economy; and, in particular, what are we going to do with the Government research establishments concerned with industrial work?

In 1967 we had in this House a debate dealing with this topic, again on a Motion by the noble Earl, Lord Bessborough. In that debate I set out at some length my views on various aspects of the problem, and in particular I called for some action by Government to deal with the situation which appeared to me to be getting steadily more difficult. To the extent that Government, as evidenced by this Green Paper, have somewhat belatedly come to the conclusion that action is desirable, I warmly welcome their decision, but unfortunately I fear that I cannot fully subscribe to the solution they propose. Perhaps I ought at this point to declare an interest in that I am a member of the Board of N.R.D.C. one of the organisations mentioned in the Green Paper, but let me make it quite clear that what I am saying to-day represents my personal views and I do not seek in any way to represent the N.R.D.C, a body which no doubt will make elsewhere its observations on these matters.

The aim of the Minister of Technology to apply the talents and facilities of the various establishments to industrial ends and his recognition that this cannot be done properly within an executive department are things with which I am in full agreement. One may see, looking at the general proposals, that this is a kind of development of what was proposed by the Trend Committee in 1963, a Committee of which I happened to be a member, when it put forward the idea of an industrial research and development authority. That idea was not accepted by Government; but I would point cut that while that looks rather like this B.R.D.C. idea, it would have covered a smaller number of research establishments and, looked at in financial terms, would have involved only between 10 and 15 per cent, of what is proposed to be involved now in the B.R.D.C. It was, in fact, a kind of pilot scheme. Indeed, I think it might have been useful for us to have followed that up at the time, because it was quite evident that in due course the atomic energy establishments would become a big problem to us, and a pilot scheme could have been useful. After all, in the chemical industry, with which I am reasonably familiar, if we wish to start out on a new process or new development we begin by setting up a pilot plant on a relatively small scale, and when we have ironed that out and found that the process works we then can put up a big plant.

This proposal, it seems to me, is going to institute the full scheme without ever going through a pilot plant, and it worries me. If we look at the solution proposed in the White Paper, what are we going to do? We are going to set up a vast Corporation which, if we omit for the moment N.R.D.C, will embrace right at the outset some 10 research establishments with a total of more than 4,500 professional staff and an annual budget of some £65 million. I do not know how one can expect to operate a monster like that, which would be, effectively, working on a contract basis for industry, the more so as it would be setting out with existing staff and facilities and looking for jobs they could do, rather than following the more logical course of deciding on the problems and then looking for staff and facilities to match them.

It would certainly mean a very considerable change in, and probably drastic scaling down of, some of these establishments. I believe that if this B.R.D.C. were set up, it would mean that research establishments would go on very much as they do now. If N.R.D.C. were included, as is suggested, I think that much of its effort would be diverted from its real task of promoting innovations throughout industry to the rather sterile task of finding jobs which could be undertaken by existing research stations. I think that, in all the circumstances, Harwell has done a magnificent job in its efforts to move into non-nuclear industrially oriented work; but when I look at the scale of its success after five years of effort—payments from industry of £.25 million per annum as against an annual expenditure of £16.4 million—I think it underlines the magnitude of the problem that would face the B.R.D.C. if it were set up.

I do not want to enlarge much further on what I regard as the difficulties in the Green Paper proposals. I do not wish to be negative and I know that destructive criticism is always rather easy. What I should like to do is to put forward a few alternative suggestions and ask the Government whether they have considered them or would perhaps consider them. Those noble Lords who were present at our debate in 1967 may recall that the basis of my argument was that if research is to be successful over a long period, it must either have definite and changing objectives, such as commonly obtain in industry, or it must have training functions, as in the universities, where research need not necessarily have an economic objective but where it is kept alive by a constant throughput of young and changing minds.

As I pointed out then, in many cases Government establishments, at least in the field of engineering and physical science, frankly lacked the spur of clear-cut economic objectives. They do not fall into either of the categories I have mentioned and therefore, in my view, they tend with the passage of time to become relatively ineffective. It would be nice to say,"Well, hand them over to industry ", but it is difficult to see any one of the stations mentioned in the Green Paper being suitable for absorption into a single firm, even if any one firm could afford it. But it might be possible to convert some of them into industrial research associations or bodies of that general nature, because I think that it would be generally admitted that the Research Associations, supported as they are jointly by industry and Government and therefore being virtually within the industrial sphere, have been much more successful than Government establishments in promoting industrial innovation and particularly in increasing the amount of research and development that is undertaken by individual industries. And, in the end, that is what we have to seek.

We have to seek a movement towards industry so that we find research and development being carried out in the main—indeed, almost exclusively—within industry itself. Therefore what I should like to ask is whether a solution may not be found by looking at the various establishments that the Government have and considering their potential, according to their individual character, from the point of view of training functions— that is, university associations—from the point of view of industrial research associations, and also perhaps from the point of view of organisations performing what I would call public service functions, such as those mentioned by the noble Earl, Lord Bessborough: fire and so on.

Believing, as I do, that a solution along these lines may be found, I am prepared to put forward a few specific suggestions —not to say that these are the only possible ones or that they should be followed, but just as an indication. First of all, as I have said on earlier occasions, we have in the National Engineering Laboratory an organisation which, almost by its nature, cannot have specific industrial functions, but which I believe could be of enormous help if it were put to work in helping on the training of the engineers that this country needs so badly. I ask again whether it might not be reasonable to associate that organisation directly with the University of Strathclyde or, for that matter, with the Scottish universities as a group. When I look at the Forest Products Research Laboratory, I wonder whether the way to deal with that might not be to move it into the research association area to cover the timber and allied trades. Also, suitably modified and stripped down a bit, why should not the reactor groups of the Atomic Energy Authority become a research association for the power industries in this country?

The Hydraulics Research Association, which my noble friend Lord Bessborough mentioned, is a body which at the present time is living mainly on contract work for Government, local authorities and foreign governments. It could well go on in that way, and might remain under Government control. I am sure it is doing a very good job and could continue. The National Physical Laboratory has a function in the maintenance of standards. Standard maintenance is really a function for Government in any country, and might well remain under Government control. It has other facilities, some of a very important type. When we hear so much about the problems of the pollution of environment, and we remember that it is unlikely that industry, as such, will treat these problems with the degree of urgency which some of them deserve, might we not keep together under Government the Warren Springs Laboratory —which is a general purpose laboratory —and the facilities of the National Physical Laboratory, and make them work on this specific problem? Give them an objective, and then perhaps they would meet my requirement for what stations should be—they would, in fact, be missions orientated.

I agree that Harwell is one of our big problems; in fact, it is the biggest problem. It is difficult, I confess, to see an immediate solution there, except that, apart from the possibility that somebody might say that you should break it up or hive off bits to individual companies, it might be possible, as my noble friend Lord Bowden has argued on many occasions, to use its facilities, or a large part of them, in the educational field. After all, it is already the case that Harwell has been developing some excellent postgraduate courses for universities. Might not its facilities be put into this educational sphere, either as a nucleus for a technological university or as the technological wing of an existing university somewhere within its area?

These are only a few suggestions. I would stress again my view that something on these lines would be very much more effective than the creation of a vast B.R.D.C, which I think simply would not work. I know it could be said that it would be very difficult to do these things; that there are many problems in implementing this idea. But I am certain that there will be just as many problems in implementing the proposals that are in the Green Paper—I do not think there is very much difference between them—and, with goodwill, the difficulties in implementation could be overcome. And if they were overcome, solutions something on the lines that I have mentioned would be beneficial not only for this country lout in the end for the people—and there are many good people —who are currently in the Government research establishments.

4.56 p.m.

LORD WYNNE-JONES

My Lords, I am in the somewhat unfortunate position of speaking after the noble Lord, Lord Todd, whose knowledge and experience in these matters is so wide, and of speaking before the noble Lord, Lord Jackson, whom everyone wants to hear. Therefore I will be extremely brief. This Green Paper is, as the noble Earl, Lord Bessborough, indicated at the start, one of importance, and it is one to which wo have to pay attention. The noble Lord, Lord Todd, would, I think, ask us to pay just enough attention to cast it into the wastepaper basket. Perhaps he is right. There are things in this Green Paper which, personally, I find surprising. In the middle of the Green Paper, on pages 10 and 11, we have outlined the reasons why the proposal is put forward for this British Research and Development Corporation. Among them is paragraph 25, to which the noble Earl, Lord Bessborough, called attention.

I would ask your Lordships to glance at it again: Experience in this country and abroad suggests that no Government Department can decide centrally what research programmes are best designed to serve the needs of industry. As a general rule, only the ' customer ' knows what he wants, and by his readiness to pay for it makes the ' supplier' aware of his requirements. This is a statement which bears no relation at all to research, because if the customer knows what is going to come out of research, he does not need it. It is only when he does not know that he needs research to be carried out. If one examines the history of the development of the jet engine, that was in no sense a requirement of the customer. It was something which in this country, at any rate, occurred to Whittle, and was developed not by a customer, but by, first, an original man, and secondly, by a supplier. The same has been true of the development of nuclear energy. Nuclear energy was not demanded by the electrical supply industry; it was not demanded by industry at all. It was something that was developed as a result of research, and the research was done without knowing what the consequences were going to be.

We are mixing up terminology a great deal when we talk about research which is really basic research and research that is merely trying to find the answer to a question which has been already formulated so exactly that one almost has the answer, and only a little more work is required to get it. Unfortunately, a great deal of the research which is done by industry in this country falls into that second category. That is one of the reasons why in this country our industry has been falling behind; it has been doing nothing like enough in the way of fundamental and basic research. Recently, as a result of matters which I need not mention, I spent three months in America. During that time I visited certain important American concerns. I went to see the biggest computer company there. They have a research laboratory which employs 2,000 trained scientists. They have in this laboratory groups of people working on even such a subject as organic chemistry, which seems very remote from computer work. I asked them why they did this, and they said: "Because we do not know what we shall be wanting to do in some years' time ". In other words, their research is not geared to the production of immediate answers, and that is why they can answer the questions of to-morrow.

If we devote all our time merely to trying to answer the immediate questions we shall get nowhere at all. I believe that the greatest criticism in general that can be made of British industry to-day is that most of it does extremely little real, forward-thinking research. Most of the research is far too short-term. There has grown up in the last few years an unfortunate tendency to believe that the Government should encourage this kind of thing, and that they should put all their efforts into encouraging the shortest-term research. This is fundamentally wrong. It is a mistaken point of view and will do no good to British industry. It is important that we should think in longer terms.

The noble Lord, Lord Todd, has quite correctly pointed out that the proposal here of bringing together a heterogeneous conglomeration of research institutions, and putting them under one body is not going to solve the problem of research and development so far as Government are concerned. It is not. All it is doing, in my opinion—I think that this is exactly what the noble Lord, Lord Todd, himself would feel—is passing it on from the Ministry of Technology, which feels that the problem is too complicated for it, to another body, and hoping that the other body will be able to solve what it cannot solve itself. This seems to me a wrong approach. I do not think that all our Government research institutions should be handed over to industry. On the contrary, there is much that the existing ones can do and that they have done very well. But I would agree with the noble Lord that the important thing is to have a defined objective for every one of these research institutions. There is no possible defined objective for the group that we have put forward in this Green Paper. It cannot have a single objective. It will be trying to do a large number of things. Who is going to direct it? It will be some kind of a board.

I do not know these matters anything like so intimately as the noble Lord, Lord Todd, does, but I know this much about it: when you have a research institution, and people are not certain what work it should be doing, then you have the most astonishing amount of lobbying among the various members of the research board and various interests from outside trying to persuade the board to do something with the research institution which it is probably quite ill-equipped to do. I am sure that this kind of thing will go on if one has an elaborate board of this type set up.

Government research institutions can continue to play an extremely important part, but they must have proper direction and each institution must be allowed to develop its own policy and not have some strange composite policy placed upon it by a central board. I would therefore ask the Minister whether he can reassure us that these proposals of the Government are simply an initial attempt to see how one may go about this problem of reorganisation, and that they are not meant to be final.

I would also plead with him one other point. In the last twenty years Governments have examined their research institutions much as the indifferent gardener digs up his seeds once a week to find out how they are growing. This has done an immense amount of damage to morale in research institutions. If they do not know that they are going to continue reasonably, doing for a period of more than three or four years at a time the kind of thing they are doing now, then they are unable effectively to carry out research. Research is not the same sort of thing as turning out a certain product on a production line. Research is something very different from that. It requires ability, but it also requires high devotion and extremely skilled direction.

5.5 p.m.

LORD JACKSON OF BURNLEY

My Lords, my remarks will be quite short and are intended to take the form of a number of questions. Unfortunately, most of these questions have already been asked, and I have been asking myself whether I should repeat some of them even though I may well do so in different terms. My old friend, the noble Lord, Lord Todd, has persuaded me that I ought to do so. I should like to begin by saying how much I endorse the principles which lie behind the proposals in the Green Paper. Since they have not been referred to specifically this afternoon, may I read them. They are the need to rationalise programmes in the Atomic Energy Authority and the Ministry of Technology industrial research establishments; secondly, the need to link the work of these establishments more closely with industry so that they can better understand, and more readily help to solve, some of its problems; and, thirdly, the need for this work to be undertaken increasingly on a contractual basis. I do not imagine that my noble friend Lord Todd or other speakers would disagree with those principles. What is concerning some of us, I think, is the practice which lies behind the attempt to achieve this kind of objective.

I also greatly welcome the aim to set up the new organisation outside the Civil Service, and the stated objective to achieve changes in the superannuation arrangements which would facilitate ready movement of staff between the Corporation and industry. On this point, may I say that I wish I could feel more confident that this would lead to a more significant movement of staff than has characterised the Government research and development establishments. In what I am saying I have particularly in mind the Atomic Energy Authority establishments. I do not find in the Report specific evidence of intention to reduce the scale of Government establishments when they have served the purpose for which they were set up, but rather to seek new work for them; the important consideration would seem to be the continued employment of the staff concerned within the establishment. This I regard as a matter of very serious concern. The point is in fact made perfectly on page 7 of the Report: If the firms capable of applying new inventions or processes develop them in their own laboratories early exploitation is obviously more likely; and the larger units which are a feature of those sectors of British industry which have been recently restructured are obviously better equipped to undertake the research and development they need and are more likely to appreciate its potentialities. That statement is incontrovertible, and in saying this I want to pay tribute to what the Ministry of Technology have done in recent years in stimulating in many cases the restructuring of industry, presumably with this as one of its main objectives.

If I may refer to my own industrial experience, it is that applied research and development on behalf of industry should be carried out as near to the point of intended exploitation as possible; and this is not to say that I want all this research to be short term. I also want the activity to be carried out, so far as practicable in the same organisation so that it is not only possible to have a ready communication of ideas and information, but also possible to have a ready movement of staff from research and development into design and production, with the job as well as with the ideas. This is a difficult enough objective to achieve even in a single large industrial organisation. How much more difficult, therefore, if the research and development are separated physically from the design and production, if the staff concerned are employed by different authorities, and if their terms of appointment are different to the extent, as we know by bitter experience, that they inhibit mobility.

I feel, therefore, that I should ask this question. On what ground do the Government feel that it is in the best national interest to expand the industrial-oriented work in establishments which otherwise seem broadly to be unchanged, even though the reorganisation may well make the aggregate effort more effective than it is at present? I do not find in the Green Paper sufficient specific evidence of the extent to which there may be a positive gain. I presume in the light of the Statement I read about large-scale industry that the aim therefore must be to help sectors of industry which have not yet organised themselves in such a way that they can do their own research and development, or which have not yet learned how to do it, or which may not even have reached the point where they know how to exploit research and development done elsewhere, without considerable outside help.

This is a situation which is well known to the industrial research associations, and I should like to know what is the intended relationship between the new organisation and the industrial research associations. May not the new organisation make the problems of the industrial research associations more difficult? In my experience, the research associations in varying degrees have had great difficulty in harnessing adequate financial support from the industries which they serve. Therefore may it not be difficult for this new organisation to get any-think like the financial support from industry which is implicit in the Report? As the noble Lord, Lord Todd, said, a quarter of a million pounds of industrial support for work in the Atomic Energy Authority gives me no confidence that this scale can be achieved, and I should like to ask the noble Lord, Lord Delacourt-Smith, where the confidence comes from within the mind of the Ministry of Technology.

Finally, may it not be in the best national interest, notwithstanding what the noble Lord, Lord Balogh, said about taxation relevant to research and development, to remove whatever impediments there may be to an adequate support of research and development within industry by itself, and make available, as the noble Earl, Lord Bessborough, said, finance to employ men at present employed in establishments and, as I fear under this proposal, likely to remain so.

These, my Lords, are my anxieties, and I do not like speaking in this way critically of men who have a difficult job to do and whom I should like to compliment on what they have achieved in recent years in the Ministry of Technology. I am worried, however, by the absence in this Report of a really positive contribution to a solution of the problem—how do we discontinue a major programme of work when it has ceased to be relevant and when it is of lower priority than other work which needs to be financed? I hope that the noble Lord will be able to tell us in what way the Ministry of Technology hopes to solve this problem, because I do not think it has solved it in this Report.

5.15 p.m.

THE EARL OF SHANNON

My Lords, I, too, should like to thank the noble Earl, Lord Bessborough, for giving us a chance this afternoon to discuss this Green Paper, and to ask the Government if they will more clearly define certain of the statements in it. I must also thank the noble Earl for the kind words he said about me. He practically made it unnecessary for me to declare an interest, but as the Director of the Committee of Directors of Research Associations and of the Conference of Industrial Research Associations, I think as a matter of form I should do so. I must say that neither of these organisations has yet been able to hold a meeting to discuss this Green Paper, so the views that I am putting forward to your Lordships are not in any way on behalf of those organisations, although you will naturally realise that my experience has been derived mainly from that field.

I am also in a most diffident state, speaking after such a number of highly expert speakers. Like many other noble Lords who have already spoken, I should like an answer to this particular question: what efforts have the Government made to decide what is the demand from industry for this facility? I am wondering whether the noble Lord, Lord Delacourt-Smith, will be able to give an answer to that question in considerable detail. If this demand has been overestimated, then of course the whole scheme falls to the ground. If there is a demand, we should like to know how it was assessed, and in what fields the demand is. While on the subject of demand, I think we must get straight in our minds that this Green Paper does not herald a new charter for these establishments to do contract work for industry. Some of them, if not all, have been doing this work for some years.

As proof of the pudding is in the eating, what figures should we have to show for each of those listed establishments as to their current contract income from work which they are at present doing on direct repayment for industry? As both the noble Lord, Lord Todd, and the noble Lord, Lord Jackson of Burnley, have said, from the figures that we can see it is not very encouraging. I suspect that it is pitifully low, even in comparison with what the research associations are able to get out of industry— although, as Lord Jackson has said, they experience a certain amount of difficulty. We all experience difficulty in getting money out of anybody.

I do not think that any speaker this afternoon has objected to the sentiments expressed in the Green Paper. I think I am right in saying that they were also expressed in a speech by the Minister yesterday; namely, that we do not want too great a preponderance of too far-out research, but that we should put more emphasis on putting to good use the technological discoveries that we have. Throughout the Green Paper we have descriptions of the most admirable aims and objects of this new organisation. At the risk of repeating a few that have already been referred to by noble Lords, I should like to refer to one or two specific passages in the Green Paper.

In paragraph 1 on page 5 we see the words: … to promote and organise scientific research with a view especially to its application to trade and industry. Then in paragraph 3 on the same page there is the phrase, the value of applied scientific research. On page 3, paragraph 2, we find reference to: measures that will most assist industry to improve its performance, and, further on: the exploitation of innovation by which the results of research are carried through to full-scale application. Paragraph 4 on the same page speaks of the Corporation's working on a contract basis, to ensure that its programme reflected the needs of its customers and that the industrial work was carried out in an appropriate environment. Further on, in paragraph 13, on page 7, we see reference to the Government's policies of directing research increasingly towards the needs of industry and of encouraging industry to exploit the results of such research", and to the need to direct scientific effort to the industrial purposes it has to serve. I would also draw attention to what we all know very well now, paragraph 25, although I am afraid that I draw a slightly different conclusion from that drawn by the noble Lord, Lord Wynne-Jones. This is the reference to the customer knowing what he wants.

In all, I think we should congratulate the Government on these sentiments: they are highly laudable and they describe an admirable state of affairs. Like the noble Lord, Lord Todd, and the noble Lord, Lord Jackson, I submit to your Lordships that this state of affairs and these admirable sentiments describe exactly the research associations that we already have. I know that I am partisan, but they do. They are a very accurate description of the research associations, which fulfil all these criteria that I have read out. Perhaps noble Lords are not fully aware of the details of these research associations. They are described on page 5. They are, if you like to put it this way, research clubs for an industry: they are controlled by the industry; their Council consists of eminent industrialists in the field which a particular research association serves.

Quite apart from a certain amount of general basic research which they do for the industry—and remember this cannot be far out; any director of a research association who goes off on some probably very interesting but probably most unrewarding line would be very soon brought to heel by his council—they give a scientific service to their industry. Under this is information, so that even the smallest member company has available an abstracting service which will cover all publications of which it may need to be made aware. In addition, the general scientific service they give covers quality control, testing and "troubleshooting" when members get into trouble and require help. Over and above that, all the research associations do for their members, and for non-members, contract work. All this is financed by a unique form of partnership, industry and Government. Although the Government are perhaps in every case the largest individual shareholder, it must be borne in mind that in all of them the Government are a minority shareholder. Industry subscribes more in each case than the Government.

Here I would challenge the word "substantial" when used in paragraph 17, on page 8, to describe the support the Government give. I know that everything is comparative, but is such an investment in these declared laudable objectives really so substantial? It is, has been and will be for next year, pegged at the sum of £4 million, which I believe is some 25 per cent. below the annual grant laid aside for the reclamation of waste land. Yet at this £4 million the Government have decided to peg their contribution towards making British industry more competitive. I know that the original idea of making a Government grant at all was originally called "pump priming" and that thereafter industry itself should do it. But where could the Treasury, for such a small investment, hope to reap such a large proportion of the dividends other than in the research associations?

With regard to the references which have been made to short-term or long-term research, in case it should be felt that the research associations in fact just do "trouble-shooting" and testing, and dealing with existing troubles, I would point out that all the research associations together are engaged on a programme of technological forecasting and longrange planning, to find out what is going to happen in the long range, and orientate their research accordingly. To revert for a moment to the Green Paper, we have here a programme to set up, as the noble Lord, Lord Todd remarked, a monster research association—that is really what it is—at a Government cost not of £4 million but of £70 million; and, unlike the research associations that we have, where is its guarantee of members; where are the members at all? Perhaps the noble Lord, when he replies, will be able to reassure us on this point because of the market research that has been done into the demand for this. That will show where the members lie.

It has also been remarked this afternoon that there is a great disadvantage in having research away from the point of application; that the closer you get to industry, the more rewarding will be your research. The logical conclusion of this is in-house research in companies; but here sometimes we have had examples of far too narrow a field—for instance, textile firms producing fabrics and putting them on the market with no thought of how they were going to be washed or cleaned. Had that been done through the research associations, or had the research association of that industry been kept informed, there is every chance, since the directors of these research associations collaborate with each other, that that point would have been raised.

Sometimes, too, in-house research is done purely as a status symbol, and as something to give an entry on the balance sheet to keep some of the shareholders quiet at the annual general meeting. I remember that on one occasion (it was some years ago, I must admit, and before I had anything to do with research associations) I went on a visit to a large factory where the managing director showed me with great pride their laboratory, in which' some very high-level scientist was working. I was very impressed, as I was meant to be, and so were all the other directors of the company. I then, of course, asked the silly question! "What is he doing?" Maybe the chairman knew—though I think he was out of the country, and had been for some time; but the managing director had not a clue, nor had the rest of the board. But they had this chap and he was working on some deep bit of research.

I mentioned that the research associations were in the market for contract research. Of course they are; and of course the immediate answer that most people give is, "Oh dear, the poor research associations are going to catch it in the neck now if there is going to be this large organisation which is going to start pinching their market". The research associations have made quite a bit of this market, they have an interest in it. They have helped to make it; they have helped to increase it. Here I think we should like a little more definition of the term "full costs", which is to be found in paragraph 29, on page 13: Work done by the new corporation will be charged at full, costs. I hope that we are not going to have some form of unfair trading here. I hope that the "full costs" will be the full commercial costs, including a proportion of the service charge on all the capital employed for all the equipment, not grossly subsidised. And I hope this will be done not on marginal costing but on full costing.

If that is the case, then, from what I understand, I think that the research associations are not in the slightest worried. In my personal opinion they will cut rings round this organisation. They have local knowledge of their industry. An industrialist coming to them with a problem for which he wants to place a contract for research knows that he does not have to brief them on his industry—many of them have a record of over half a century devoted to their industry; of course they know all about it—but if he goes to this Corporation he will probably have to brief them on all sorts of things which are common knowledge in his industry. I should also like to ask (I think this point has already been mentioned) what is in the wind for those other similar Government establishments that are not listed. We should like to know a little more about how N.R.D.C. fit into the picture. They have done a very good job in seeing that innovation is put right through to the point of application. Some of the research associations themselves use N.R.D.C. to exploit their discoveries.

Altogether, one gets the feeling that this Green Paper is about to duplicate, and in some cases triplicate, what is already being done by the Ministry of Technology, the N.R.D.C. and the research associations. My thoughts, like those of some other noble Lords, are that this appears to be finding a job for establishments. Many noble Lords will remember a wonderful vehicle known as the Sherman tank. It was a wonderful vehicle for the purpose for which it was designed, assisting in the liberation of North-West Europe, but it did not show up so well when it had its armour and its guns removed and it was found a job ploughing the East African jungle. If some of these research establishments have fulfilled their role, would it not be better to act in accordance with the real sentiments of this Green Paper, and to put any money and, above all, really qualified staff in a place where a small investment has already shown such good returns—that is to say, in the research associations—and also into industry itself?

5.33 p.m.

LORD THORNEYCROFT

My Lords, I entered your Lordships' House with the best intention, which was not to make a speech at all but to listen to the able and experienced noble Lords who have contributed to this fascinating debate. But may I, without putting many more questions to Lord Delacourt-Smith, who I think has already had enough, say just a word or two upon this subject. The Minister, in his introduction, wisely said that the implications of these proposals are considerable and that they raise important issues which merit wide public debate before decisions are taken by the Government. A fairly wide debate has taken place, and no doubt a much wider debate will take place resting largely on the arguments which have already been addressed to your Lordships' House.

In a sense, I speak as an industrialist. I suppose industrialists are associated in this matter in two ways. First, we use research; we are buyers of research. May I say to the noble Lord, Lord Delacourt-Smith, that we buy research anywhere we can find it. We have no dogmatic approach to the matter at all. If we have to do it ourselves, we do it. If we can get it by contract from someone else, we get it there. We are happy to take it from the universities. We are delighted to take it from the Government. There is no dogma at all as to where research is obtained.

In another way, too, apart from getting research, we provide it. We provide it to the Government. We are rather anxious to go on providing it to the Government. We should be sorry to see an enormous organisation so short of work that it was felt necessary, in order to keep it fully employed, not to employ anybody else. I do not mean by that that the Government should try to put all their research out to industry. Manifestly, they should not. But there is room for all of us to use one another with our special expertise. I speak as one who has worked a lot with Government research organisations, mostly, I admit, with some that are not referred to here; namely, the Royal Aircraft Establishment, the Royal Radar Establishment—the electronics side. My experience is shared, I think, by all noble Lords who have spoken. Magnificent work goes on here, and all our goodwill goes out to any scheme which is designed better to organise that work.

Just one word about what research is. Here, I speak with great diffidence before the noble Lord, Lord Todd, the noble Lord, Lord Wynne-Jones, and others. I thought that the noble Lord, Lord Wynne-Jones, gave what appeared to be an excellent but rather high-level and rarified definition of research. I think he went almost so far as to say that the moment we knew what we were making, the need for research had disappeared. I would suggest that that is carrying the argument a little too far. On the lower levels of life in industry we know quite often what it is we are trying to do. If you like, we seek to apply known disciplines, perhaps, but to a very special and more or less immediate problem; and perhaps crudely we still call it "research".

We are not alone in this. Even the universities are constantly keeping an eye on what is happening in the outside world. In some of the American universities they have gone to considerable lengths to link the research which is taking place in the university with the elements of production—the trial run, if you like—in some application of it out-side. Universities in this country are seeking to develop along the same lines. So that "research" is a term in regard to which the perimeters are fairly wide; and I think that the crude manufacturing industrial end must not altogether be forgotten. The industrial end does have some problems, and while I do not ask Lord Delacourt-Smith to elaborate on all those problems this evening, I think they need thinking about.

Research costs a great deal of money, and a firm which is putting a lot of money into an applied piece of research generally expects to earn some reward from the results at the end. That raises complexities, not necessarily insoluble, sometimes with putting the research outside and sometimes, and particularly, with putting it to public bodies who themselves would normally wish to spread fairly quickly the results of that research. It may not altogether and always coincide with the wishes or the purpose of the particular industry or firm doing that particular piece of industrial research.

My Lords, I wish to make only two points. First of all, if we are to face the problem of how industry is to use research bodies commercially, I think the question of what rights they have in the research has somehow to be thought out. I do not pretend that I altogether know what the answer ought to be; but it ought to be thought out and argued, and the difficulties portrayed in any final plan that is put forward. The second point I wish to make is that if one judges this Green Paper as something that was being looked at by a board of directors of a company, one realises that one would have some difficulty with the board. This may be a very unfair test, but if I were chairman of a board and it was the shareholders' money that we were discussing, having to determine whether the £70 million was being used to the best advantage, I think I should be a bit worried before we started. I should have an anxious conversation with the managing director and, above all, with the financial director as to just how we were to put the story over. I am sure the noble Lord, Lord Delacourt-Smith, will put it over very well, but he has, relatively speaking, got a very sympathetic lot of shareholders here. It would be a great problem, because normally any director worth his salt would say, "Well, what is it for? Where is the market research? Have they thought this really through? Are clients going to come along? Is it enough to say that this is just commercial, or it ought to be? It is right that it should be—that is a good test of whether it is worth while—but has it really been thought out?". I hope that in the final analysis some argument will be put forward on that basis.

There is another fundamental question that would be asked, and it is, "Is this the right way to do it anyway?". There are, after all, other ways of approaching this problem and other ways of using the immense resources which are spoken of here. The noble Lord, Lord Todd, outlined in a preliminary manner another kind of approach in which it should be done, not as a great conglomerate. It should be taken item by item, giving each bit its full worth, and you should say, "Here is a bit peculiarly related to the power industries. Would it not be right to have a link between the Government and the power industries, and try to use it there, or with the Atomic Energy Authority, or whatever it might be?". Any board looking at this would say, "Would you mind just having this alternative approach, which is very different? It is a more divided one. This is the conglomerate; the other is the specialised". They would say, "We don't know which is right, but we should like to see the other one argued, analysed, if necessary turned down on good argument, but at least put forward". If the noble Lord could help us a little on those lines, we should be grateful.

LORD BALOGH

My Lords, before the noble Lord sits down, may I ask him a question? Does he realise that British industry, whose point of view he so eloquently pleaded just now, has always been under-invested in research and development as against American industry, despite the fact that the taxation laws and other laws favoured it much more?

5.43 p.m.

THE MINISTER OF STATE, MINISTRY OF TECHNOLOGY (LORD DELACOURT-SMITH)

My Lords, I think we are all under a sense of obligation to the noble Earl, Lord Bessborough, for having initiated this debate. I think we are also under a sense of obligation to all noble Lords who have participated in it. It is taking place, as the noble Earl rightly said, within three weeks of the publication of the Green Paper, and perhaps I might suggest that it has demonstrated at least one thing; that is, the propriety of the Government's action in putting forward their views in this form.

I think no one would dissent, and I am sure nobody who has participated in the debate would dissent, from the view that the deployment of our research and development facilities, of our scientists and technologists, is of very great importance in our future as a nation; nor from the view that we need to re-assess, from time to time, the organisational forms of employment of substantial numbers of these skilled and qualified people to see whether in fact we are meeting new challenges, new opportunities, new circumstances, in the most effective way. Further, the debate has underlined the fact that it was proper for the Government not to come forward at this stage with some hard and fast definitive scheme, but to put their views forward in a Green Paper inviting, indeed hoping for, debate and discussion, Parliamentary and extra-Parliamentary, on the subject. I think this is the beginning of the Parliamentary discussion of this matter, the first occasion that it has been raised; the extra-Parliamentary debate has, to some extent, begun, and I think it is fair to say that, on the whole, these proposals have had a sympathetic, but properly critical and constructive, comment in the specialist Press.

I should therefore like to begin by assuring my noble friend Lord Wynne-Jones that what is now before your Lordships is not a hard and fast set of proposals to which the Government are indissolubly wedded, but a set of proposals put forward after a good deal of debate and discussion within Government circles; put forward to be the subject of much wider discussion so that decisions may be reached upon this important subject. We welcome the fact—far from regretting it—that this Question has been put down so soon after the Green Paper has been published. We want to find right solutions to the problems which it poses, but equally we want, at the earliest possible date and subject to that proper examination and discussion, to reach some conclusions which can be definitive so that people may know where they stand, so that a plan may go forward on some firmer basis.

The general intention is that in the next few months the Minister will be having—quite apart from the public debate on this subject, or indeed as part of it—meetings with representatives of the staff concerned and representatives of the organisations concerned. I can give your Lordships a most firm assurance that all the contributions that have been made this afternoon will be most carefully studied as a part of the public debate on this matter. The aim of the Government at present is to be in a position to give a clear indication of policy, determined in the light of public debate, by the early summer of the present year. It is consistent with what I have said so far, and consistent with the Green Paper itself, that any reply which I make should itself be regarded not as a firm defence of the proposals, but as a further contribution to that debate; an attempt to elucidate some of the issues which are before us.

The noble Earl's Question asked whether we were satisfied that the corporation proposed would be the best method of encouraging the development and exploitation of the results of research by industry itself. We must all recognise the value and importance of pure research, but, consistent with the recognition of the value of that, the Ministry of Technology has for some time been seeking ways to increase the proportion of its research and development effort which is of direct and speedy benefit to industry. I do not think that to seek to improve the proportion of the research effort which is used in that way is inconsistent with a recognition of the importance of pure research as well. I think that in what we are seeking to do we are not moving far away from some of the fundamental approaches of the Trend Committee, to which the noble Lord, Lord Todd, referred, although of course it reported some six or seven years ago in different circumstances, when there was no Ministry of Technology, and when a number of conditions which exist to-day and which played an important part in the framing of this Green Paper had not come into existence.

One of the main objectives of the Green Paper's proposals is to carry further this process of increasing the proportion of the research and development effort which is of direct and speedy benefit to industry, or to the solution of industrial and social problems. We want to carry this process further by relating the industrial establishments of the Ministry and of the Atomic Energy Authority more directly to the needs of industry and society, by increasing the proportion of work which is done on a repayment basis in response to direct needs—direct needs for which those who see the needs are prepared to pay. We think that this is a fairly good test.

But of course we are not thinking— and I would emphasise this point, because this has not emerged very strongly in this debate—of industry alone as the customer. Indeed, in a sense the main customer will still continue to be Government in one way or another, because inevitably, as has been pointed out, an important part—possibly a third —of the programme of the Research and Development Corporation must be financed on a grant-in-aid basis. Basic research, statutory work, advisory services—the whole range of work of that kind will have to be financed in this way.

But we would aim to place as much as possible of the other Government work with specific objectives on a contractual basis. This may well account for a second third of the work of the proposed Corporation; and Government Departments, including the Ministry of Technology itself, would place specific contracts with the new Corporation. They and the industrial customers, by this process of contract and by processes of joint ventures, would be playing a bigger and more direct part in determining the balance of the programme and in assessing its value.

Many in the research establishments will welcome this challenge and the new opportunity which it offers. Contract work is already an important element in some programmes. The Hydraulics Research Station has been mentioned, and it relies upon these contracts and this type of work for some 80 per cent. of its keep. The proposals that we are putting forward are based to some substantial extent upon the experience that we have already gained. It was suggested that perhaps we had not done enough by way of a pilot scheme. I think it is fair to say that we have accumulated in our research establishments a good deal of experience of this kind.

I cannot say exactly how much in each establishment is due to this type of contract work; how much of the keep is earned in each case; it varies a good deal. I was asked, I think by the noble Earl, Lord Shannon, to give this information. I can only say that it varies from establishment to establishment, but I will write to the noble Earl when I have made inquiries to obtain the information he wants. However, I think it is also worth mentioning that the various types of work—the basic work, the work which would necessarily be grant-aided, the work on Government contract and the industrial work—is found side by side in a number of establishments. One cannot divide up establishments neatly and conveniently into those which would absorb their activities in grant-aided work, those which would be on Government contracts and those which would be primarily on industrial work.

A number of comments have been made about the relationship of the N.R.D.C. The intention is that the N.R.D.C. should be absorbed in the new Corporation. We believe that in fact it would make important contributions to its work. It would assist the commercial exploitation of the work of the Corporation, and further continue the exploitation of the work performed in publicly financed research organisations, which for one reason or another would remain outside the new Corporation. It has, we believe, a commercial expertise and experience that can be a valuable element.

Naturally, we will take note of the comments which have been made by noble Lords; for example, the anxiety expressed by my noble friend Lord Balogh that the incorporation of the N.R.D.C. in the new Corporation might make some people, who in the past have gone to the N.R.D.C. for assistance in the exploitation of their work and discoveries, more reluctant to do so. This is one of the many points raised in this debate which must clearly be closely examined in the light of the arguments advanced. But certainly we would agree, in the words of my noble friend, that the N.R.D.C. has proved itself over the years, and I think that this is becoming increasingly the general view.

I must now say a word on the subject of research and development work already performed in industry or in the research associations. I think we would agree with those who have said that the greater the research and development effort that can be made, the better for the industrial future of this country. We are bound at the same time to recognise (I say this in response to the question put by a number of the noble Lords) that it is impossible to predict the extent to which industry will wish to employ the services of the proposed new Corporation. But I should not like it to be thought that the new Corporation has been brought into being in order to take up possible surpluses of staff. Of course, over recent years there has been a reduction in the staff concerned in the atomic energy field, and the extent to which the proposed new Corporation would over a period be able to maintain its size and staff would have to depend upon the extent to which it succeeded in gaining contracts from Government Departments or from industry.

The research associations themselves would of course continue in their present role. They would be quite separate from the proposed new Corporation. They are autonomous bodies owned by the industries which they serve. They are responsible to those industries and must remain so. It is quite true, as the noble Earl, Lord Shannon, said, that the Government make a grant which is being held at a figure of £4 million a year, and in so far as the research associations continue to grow that £4 million will become a diminishing proportion of the whole of their expenditure. I am bound to say that I did not think it was quite fair of the noble Earl to say that this £4 million represented the entire Government contribution to making industry more efficient. I think there are forms of Government expenditure in addition to the £4 million. Clearly, it is not our aim to make the work of the research associations more difficult, but at the same time, when there is the kind of development in which industry chooses where it will spend the money that it has available to spend on research work, and chooses possibly between alternative providers, that is in line with the philosophy underlying this strand of the Green Paper: that industry should increasingly determine and pay for the research that it wants. That, I think, touches on the point made by the noble Lord, Lord Jackson of Burnley.

On commercial cost, where the proposed corporation is doing commercial work it will operate on a commercial basis. This, in my view, would not necessarily preclude variations in prices where these were felt to be justified on a long-term estimate of commercial advantage— and if the Corporation made a habit of undertaking work at less than its full cost I should have thought that it would soon find that its prospects had become pretty poor.

The noble Lord, Lord Todd, who made a number of very original suggestions which will require careful study by the Government, suggested the possibility that some establishments might become, in effect, research associations of particular industries. Research associations, as we have already heard in this debate, have their own problems—sometimes that of securing adequate support for their continuance from the industries concerned. I think that relevant here, too, is the point that I made: that one cannot in the case of any institution, of any establishment, easily separate out the work done for industry, the work for Government Departments and the work of a more basic character.

I was asked about the position of establishments not covered by the Green Paper. This, of course, relates to some of the smaller civil laboratories. They may remain with the Ministry; they may be transferred to other Government Departments. They will require individual examination; and there is no final decision on them, or indeed any tentative decision, at the present time. Further, the noble Lord, Lord Todd, made the suggestion that a way might be found to associate some of the establishments much more closely with training and education; and this again is something which will be examined.

As I have said, this is not, in my view, an occasion when I can do more than try to contribute to this debate and try, by such comments as I can make, to elucidate some of the issues which noble Lords have raised. But I should not like to sit down without echoing what I think were the final words of the noble Lord, Lord Todd, when he spoke of the essential importance of the individuals who are in fact doing this work. The research and development establishments which we have been discussing this evening constitute a national asset of enormous value, not only because of the tangible capital assets which have been built up but even more because of the wealth of human skill and experience which is to be found in them. I agree with the noble Lord, Lord Thorneycroft, that nobody can have any association with these establishments without being immensely impressed by the richness and variety of the staff that they have and the value of the work that they do.

My last word therefore—and I am sure it will be echoed by noble Lords, and certainly I want to emphasise that it is very much indeed in the mind of the Ministry of Technology in examining this problem—is that while we are talking about authorities, establishments and corporations, we are concerned above all with the people, the extremely valuable people, who work within them. Our task—and we are grateful to noble Lords for assisting in carrying out that task —is to try to find the best organisational framework with the best operating rules to ensure that all the human skills and the material facilities of these establishments are deployed in the way that will make the greatest contribution to the national wellbeing in the long term.

House adjourned at five minutes past six o'clock.