RESEARCH AND DEVELOPMENT

HL Deb 02 March 1977 vol 380 cc644-700

3.41 p.m.

Debate resumed.

Viscount THURSO

My Lords, we now return to the rather more rarefied atmosphere of the laboratory. The Rothschild Report was indeed a major report on research and development and your Lordships' House must be grateful to the noble Lord, Lord Rennet, for reminding us that this is a good moment to take a look at how this report is affecting our research and development and also the progress of our science and science-based industries.

I certainly welcome this opportunity to review research and development, as it is working in the country at this moment. Like the noble Lords, Lord Kennet and Lord Strathcona, I feel that I must ask a number of questions. In fact, I may very well confine myself to asking questions, because I feel that we need to look at the operation of the new system under the Rothschild Report. There is so much to find out about how it is working and how we should organise things from now on. Perhaps we might even ask whether it is working as it was intended to work.

Not even the most optimistic jingoist in this country would pretend that all is well with our industry, with our balance of payments, or with the strength of our currency and so on. We must therefore ask ourselves whether our research and development is helping our industry as it should, and whether it is helping our position in the commercial and competitive world. Indeed, there are many similarities between now, in 1977, and then, in 1964, when this whole concept was reviewed. But in those days there was a feeling of disillusionment which perhaps could be summed up by the word "frustration". Nowadays I think that the feeling of disillusionment has reached the stage when it could be described by the word "resentment", because there is indeed a difficulty in motivating people to do anything for the community. There is a very real difficulty in motivating people to take risks and in motivating industry to take advantage of the opportunities which are coming out of our laboratories.

Research and development is the hope for the future in industry: it is on that hope that we must place a great deal of reliance in this country, and it must be given the highest priority and the best of opportunities in the revitalising of our industry and our position in the industrial world. If we cannot motivate industry to accept and use new ideas, we are bound to be falling behind our competitors in the rest of the world, and we are losing a position which we should be able to maintain.

The whole nub of the Rothschild Report was how to get the best out of research and development. The recommendation of the report was that research and development should be placed upon a contractual basis. I think that is now accepted by most people to have been a good idea, in spite of the cries of woe and dismay which appeared in letters to The Times from the medical world at the time of the publication of the report. In other words, what is really being asked is that people who are involved in research and development should come down from any ivory towers in which they may be hiding themselves and justify their research so that we cut back waste, duplication, and so on, and economise on the effort we are putting into research by focusing all our efforts upon right objectives.

However, as the noble Lord, Lord Kennet, has said, we must look at the situation now in midterm and ask ourselves whether we are in fact achieving this through the new contractor basis. For example, let us take the Agricultural Research Council. The Council should be approached, say, by the Department of Agriculture, Fisheries and Food, and suggestions should be made to the Council as to where the money available for research should go. At the moment I am not at all sure that that is happening, and I am not at all sure that we have evidence that the right questions are being asked at the right levels, or, indeed, that the system is being monitored as it should be.

The position of our research and development people seems to be that they are still having to search for objectives. I am slightly worried, because I have a feeling that the effort which is going into "shopping around" for objectives could be better spent in carrying out research. There is a danger that too much effort could be put by laboratories and research councils into looking for objectives and into finding sponsors for schemes which they feel should be investigated. In the end, they may take on too many small schemes and not enough big ones. I believe it was the noble Lord, Lord Kennet, who reminded us that there is less success with many customers than with a few large customers. I think we should carefully examine this aspect of the working of the new scheme, and on this side we should like to have assurances that in fact we are not proliferating small schemes at the expense of good big ones.

It seems to me that one of the most important things to do, if we are to be satisfied that the new way of controlling research and development is going to work well, is to monitor its working. Rothschild suggested there should be a chief scientist and a controller of research and development, and I wonder how far this principle has penetrated Government Departments. Is it, indeed, working in every Government Department where research and development should be used, and is being used? Are we, in fact, applying the principle as it was meant to be applied?

At the time, this dual leadership produced in the minds of many the prospect that there might be an impasse owing to disagreement between the two heads of the scientific Departments of the Government, or of a Government Department, and that there might be a need for an arbitrator. My own view is that there is probably more need for a monitor, to see whether they are getting on with the job, than there is to see whether they are frustrating each other in getting on with the schemes which each of them is sponsoring. Perhaps this monitoring of the success of the new approach to research and development could be done through the little "Neddys", giving them perhaps more powers.

There was an article in the Financial Times of 24th November 1975, which suggested that the successful EDCs are those which have identified and diagnosed a specific industrial problem, and have mobilised the necessary resources and enthusiasm inside and outside industry to do something about it. Perhaps if these little "Neddys" were given a more precise role, if they were given clearer responsibilities in this field, they could provide the kind of monitoring which would be helpful. They might even be asked for monthly statements on what they are doing here, and could provide us with the kind of information which we might want to have on how things are going.

Nevertheless, although this country invests just over 2 per cent. of the gross national product in research and development—and in this proportion of investment we are exceeded only by the United States of America—why is it that we are seemingly getting such a low return for our effort? Japan, which has already been referred to in this debate, invests half of the equivalent percentage of GNP in research and development and, apparently, her industry gets a more effective return than we do. Perhaps the real question here is one of motivation——

Lord KENNET

My Lords, would the noble Viscount not agree that this is connected with the fact that Japan has a very low defence research budget, and we have a very high one? And if you take the civilian research budget alone, we are behind Germany and France.

Viscount THURSO

My Lords, that may be true. I merely ask the question because these are the figures which I have. I do not have the answer to this one, and I have not been able to split up our investment in research and development precisely enough to be able to see whether the answer which the noble Lord suggests is, in fact, true. I feel, however, that it is worth asking the question and if that is the answer perhaps——

Lord KENNET

My Lords, it is in Tables 314 and 315 of the General Digest of Statistics 1976.

Viscount THURSO

My Lords, the noble Lord has at his fingertips information which I do not possess. There was a report which came out in 1976 by Arthur D. Little, The New Technology-based Firms in the United Kingdom and the Federal Republic of Germany: A Comparison. This revealed a possible reason why our return from research and development in this country is lower than that in Germany. If an inventor or an entrepreneur decides to market an invention or a new system, after doing some research and development on it, he has to contend with these figures. If he was operating in Germany, given that his total gross income was £236,450, his total income after tax would be £157,683. If he was operating in the United Kingdom, given that his total gross income was the same, he would receive £78,710; in other words, just less than £80,000 difference in return. It is that kind of taxation system on ventures which are dependent upon risk expenditure, which are dependent upon research and development, which are dependent upon casting your bread upon the waters, which not only affects the pocket of an entrepreneur but affects his whole attitude as to whether or not he is willing to take on the struggle. Why should he pour money into something and take a risk, no matter how laudable the project, if when he markets it at the end he finds that all return for his effort is disappearing in tax?

The prime concern when we deal with research and development is: how do we motivate good ideas into marketable and successful products which will be of benefit to our society? The end of this report to which I have referred states: A tax system which motivates investors and entrepreneurs will mobilise much more technological entrepreneurship than any programme of direct Government assistance. This is certainly one of the kernels of the problem, one of the problems of how we use the research and development which we get out of our various research councils and research bodies. But I would add to that that we must make certain that we are not losing too much in the effort in which research councils are involved, in looking for sponsors. We must also be careful of not drawing too sharp a line between pure and applied research, because in certain areas the presence of pure research alongside applied research must have value in the fact that the pure scientists and the applied scientists are sharing the same facilities and are exchanging ideas, and there is a contact between the pure side of their sciences and the applied side.

So at this stage I thank the noble Lord, Lord Kennet, for the opportunity which he has given us all to join in examining the working of our research and development since the Rothschild Report, and, like him, I shall await with interest the answers to various questions.

3.58 p.m.

Lord BAKER

My Lords, I rise to address your Lordships' House for the first time, with true diffidence. I ask for your indulgence and not only for today. I have realised with something of a shock, and only in the last fortnight since being introduced into your Lordships' House, that I have absolutely no experience in debate, and this in spite of many years of my working life spent in speaking. Many of them, of course, have been in a lecture theatre with a piece of chalk in my hand and a comforting blackboard behind me on which I could draw if words failed me, but there have also been numberless committees and, very often, appearances before the Cambridge Senate House discussion, perhaps the most intimidating and unresponsive audience that one could have. But none of this has been real debate. My fear is that your Lordships' patience will be strained, because I may not be young enough to acquire the new technique quickly.

I have an additional anxiety today. It arises from studying the guide to procedure, which advises that a maiden speech should be short and unprovocative. Brevity is no difficulty, but I have always found it difficult to be constructive and unprovocative, particularly when discussing a subject which has been so much a part of my life: the important subject of the organisation of research and development which the noble Lord, Lord Kennet, has introduced. I am grateful to him, even if he has tempted me to address your Lordships' House at almost an indecently early stage in my apprenticeship.

The safest contribution that I feel I can make to the debate is the very simple one of going to what may be thought of as the lower regions of this problem to find out what research workers feel about the present state of research and development. I have taken the opportunity in recent weeks to consult friends and research workers in universities of various ages and kinds. Perhaps this is the only contribution that I can make, because I must confess that I retired from my university post years before the Rothschild Report appeared. However, I have to declare another interest. I am fortunate enough to be an active member of a research and development team in industry.

When I inquired about the position in Cambridge the first impression was that the introduction of the Rothschild arrangement had made very little change to the physical sciences, and I will confine my remarks to them—mainly to engineering and physics. The new arrangement in no way distorted the overall programme. Physics has remained entirely untouched. The bulk of the contracts coming to Cambridge from Government Departments are in engineering, metallurgy and materials science, and this may not be surprising. They represent about 10 per cent. of the university's outside support for research and there has probably been a marginal improvement in the availability of funds.

When I discussed the problem with the individual research workers I found that the position was perhaps not so rosy. There was a distinct feeling that work arising from the Rothschild arrangement meant much unnecessary, irksome bureaucratic interference. The British civil servant appears to demand that the academic should adopt the Civil Service house rules. This may seem trivial, but there were real complaints about what seemed to be unnecessary delays in publication. In fact, the impression I gathered was that the university laboratories felt that they were looked upon as somewhat inferior auxiliaries of the Government Department labs. and that the share of the work that they had been given was almost window-dressing. It was distressing to me to find that these workers preferred to serve American agencies because these minor irritations did not exist there.

Another complaint in engineering was not so much of the Rothschild arrangement but of the effect that it had on the Science Research Council grants, or the procedure for obtaining the grants. There was a strong feeling that since Rothschild a dual standard had arisen as between physics projects and engineering projects. The physics projects were judged solely on their scientific quality. The engineering projects additionally had to satisfy the test: will it be useful? In my opinion, no research should be done in a university engineering department, or any other department for that matter, which is not going to lead to useful results. However, to decide whether a piece of work is going to be useful in industry, particularly if any long-term development is involved, requires a particular skill and an acute judgment which the research workers felt was not always available to the research committee. To me, this seems to be a question of customer quality and judgment, something that I will possibly refer to later.

The engineering department of the University of Warwick was, I found, enthusiastic about what are called CASE awards—Co-operative Awards Science and Engineering. The engineering department thought they were so satisfying that they should supersede all others. But of course there were other science departments which did not agree. These awards are given for collaborative work between an industrial firm and a university. Again, success clearly depends upon getting a good marriage, and certainly upon customer quality.

Another interesting contribution from Warwick shows the handicap of success. This was on the computing side. Computing science is a very prospering, growing branch of science and, as we all know, it has been taken up very vigorously in the outside world. The result is that the salaries to the young available in industry are high. This is delightful to hear. On the other hand, it makes it virtually impossible for the universities to recruit research workers in computing science. The grant-giving bodies might take note of this, otherwise the excellent work which the universities have done may not continue so rapidly.

Durham was troubled mainly about research expenditure and the difficulty of obtaining money. I mention this point because it introduces an optimistic note. The economies that Durham have had to apply in the last four or five years have meant that the number of posts they have been able to offer has been smaller than usual. However, the quality of appointments has been extremely high. In the end, therefore, the amount of quality research may not drop. Universities with a more engineering bias, including Salford, were all in a very cheerful mood, and I must admit that from what I was told I gathered that in the last nine years there had been remarkable developments in the liaison between the universities and industry.

My short survey, if one can call it that, has emphasised quality. Your Lordships may think that I did not need to carry out such a survey to emphasise the fact that in the engineering field at least it is quality that we need. The customer/contractor relationship seems to me to be a satisfactory one. It is a natural one for engineers. It must be wonderful to have a wise, sympathetic customer. Looking back on my own past, in both war and peace, I find that many of my customers were fairly unimaginative, to say the least. I hope I am not being provocative in making that statement. We need now a body of outstanding customers, leading engineers and industrialists who are sufficiently detached to take a broad, long view so that they can advise the Science Research Council and other Government Departments about what needs to be done, how to build up teams in universities and industry and how to link them together. If we are to have real innovation, research and development cannot be parted.

4.10 p.m.

Lord RITCHIE-CALDER

My Lords, it is a great pleasure and privilege to follow the noble Lord, Lord Baker, in his maiden speech. I have known of him for many years and we have a definite acquisition in his Lordship. I hope we shall hear from him on many occasions and that he will assist in bailing out those of us who are struggling to get the attention that science and engineering deserve.

I shall take the opportunity on this occasion to go rather beneath, above and beyond the actual terms of the Motion. As my noble friend Lord Kennet said, this is a pretext rather than an attempt to survey or scrutinise, or analyse in detail what has happened since the Rothschild Report. I believe what we are looking at now, as at the time of the Rothschild Report, is the crisis—or apparent crisis, because I do not accept it as a crisis—of the British situation, in the sense that we seem—and I repeat "seem"—to be losing out in many fields in which we once had precedence and priority. To me this is not true. I agree that the situation looks very serious, but we are in fact subject to comparison—and these comparisons, if I may say so to the noble Viscount, Lord Thurso, are always invidious. I can take your Lordships right through any number of scientific policy statements by any countries, or analyses of the equivalents of research and development, and always we find we can use them in whatever way we like.

The fact is that we know there is a malaise. It is not a crisis, it is a malaise. Something is wrong in the present British situation, and I think we all acknowledge that if is wrong. I am going to look hard at the nature of this malaise more basically than simply by reference to the Rothschild Report. Alfred North Whitehead said that the greatest invention of the 19th century was the invention of the method of invention. I suppose we should now call that R and D—science-based technology. He was saying that the age of the lone inventor was over and that was true even of that archetype of inventors, Thomas Edison, with over 1,000 patents to his name, because he had the hunches, but he also had behind him the mathematicians, physicists and technologists at Menlo Park to make those hunches real. This was the flowering of the age of group research.

Innovation—which we are desperately needing to exploit—depends on the man, the method and the moment. The man may have the intuition, the insight and the shrewd observation; to turn that to practical account he must also have the scientific method to test his hunches and his observations. But the moment is just as important: the coincidence of events, of other discoveries, of new materials and of a felt need. The history of success is that those who seize these opportunities with sound scientific backing and the technical capacity to make them real, steal a march on their competitors and have commercial advantages until the imitators catch up. But basically it depends upon science. That is why I always react—and I am glad that the noble Viscount, Lord Thurso, also reacts—to the insistence (if it is an insistence) on the separation (if it is a separation) of science from technology. There is a spectrum: pure or academic science; basic science, which the French call oriented science and the industrialists call speculative science; applied science which is programmed science, and technology which is the transfer of laboratory discoveries to the factory floor. The pure and basic scientists are (if I may use the definition) the "makers-possible"; the applied scientists are the "makers to happen", and the technologists are the "makers to work". But it is a two-way traffic; it is a spectrum from and towards each end.

New possibilities come out of pure research like nuclear energy from the academic pursuit of knowledge of the nature of the atom, or out of basic research. I recall a simple but spectacular example, namely polythene, which was not being sought as a product but which happened as a result of the study of organic reactions at high pressure—purely basic research and an exercise in curiosity. Or it can come back from commerce or industry, as specific demands for a new process or a new product. Where they meet is what, in this context, we are calling today R and D, and if the traffic lines are blocked through the failure of the scientists to communicate new possibilities, or the failure of industry to recognise the essential role of the scientist, or the failure of the qualified scientists and engineers—the QSE which is continually referred to in various publications—then profitable opportunities are missed and are lost to competitors who know how to read scientific papers and have the capacity to date that knowledge and to conduct the R and D. That is not true of a great many people in industry, certainly in British industry. We have our ideas—and I am not speaking about patented ideas; we have the intrinsic ideas being developed elsewhere because we ourselves have not had the insight or the foresight to take advantage of them.

We can contrive all kinds of ways of trying to institutionalise those possibilities, whether it is Rothschild or Dainton or the Advisory Council on Applied Research and Development of my noble friend the Leader of the House. We can have all these, and we can think of any number of them; and the more we think of them the more complicated our lives become. My noble friend Lord Kennet, who is conducting the study of Europe plus Thirty, would agree with me when I said, when I was working on global science policy, that it is demonstrably true that in terms of something called science policy the world becomes worse off the more complicated and the more diversified it becomes. In fact we are not talking about science policy in the sense that we are looking to what is possibly ahead; we are reorganising or indemnifying or rejigging what already exists.

I do not want to start another Rothschild, but I think that here we have a situation in which, from the Government standpoint we can sometimes succeed in looking through these various institutions to something which is an artefact of a system which is trying to do the job; but, I say very firmly, we shall be driven back all the time to the question of education, the mainspring of it all.

I do not believe that the British have lost that originality which made us preeminent in science when Rutherford could produce 14 Nobel Prize winners from the Cavendish Laboratory; nor the scientific insight which made Fleming, a superb laboratory scientist, recognise the significance of the spore of penicillium on his laboratory culture plate; nor indeed the persistence of Frank Whittle in giving us jet power; nor the initiative we took in disentangling the genetic code in DNA and the molecular biology which accompanied it.

I go about among world scientists who now, as always, recognise our scientific work. We are underestimating it, not they. I certainly do not believe that we lack ingenious and innovative technologists who are conspicuous in areas where they are fully appreciated. That is demonstrable in this country in the chemical industry. No one in the chemical industry gripes about the low standards of their technology. But we hear with a persistence which we cannot ignore that there is by and large an unleavened mass of scientists and engineers in the industrial world, the grey men of science and engineering. Still we know of the unclaimed places in science and engineering faculties of our institutions of higher education. We are told that the reason is lack of financial incentive, that industry does not pay or cannot pay or is not in a position to pay attractive salaries. My Lords, I must say—and I think many of my contemporaries will sympathise—that I find this profoundly ironical because most of my life I have heard how Government research could not compete with the high salaries and glittering prizes offered by industry. I accept the fact that it is so at the moment, but it is a freakish situation. We always looked with envy, when we were looking for the social implications of science, at the industrial laboratories which could buy people who could not be afforded by Governments or indeed the academic world.

I want to ask where is the yeast that is needed for this unleavened mass, this grey world we hear about among these dredged-up people. The people I meet when I go around seem to be relatively intelligent, and yet every report we hear, every criticism and complaint from industry is about these inferior scientific products. How are we going to leaven that mass? Where is the inspiration which triggers off originality? There are two factors we are looking for. One is the essential of science, which is curiosity, and the other is the essential of technology and of science, which is originality.

Where are the job satisfactions which once compensated for the not too generous treatment of qualified scientists and engineers? Where did they derive their satisfaction from? First, they stood much higher in the opinion of the people around them than scientists do today. Maybe they had an exaggerated respect, but at least they had a respect and a regard and a justification for self-pride which I do not think at this moment we are according. In the old days, when I had a lot to do with the Association of Scientific Workers, of course there was a gripe about inadequate pay, and we had progressive success in improving salaries. But research people in those days, even if they felt themselves almost Dickensian in terms of their incomes and their treatment, got a tremendous satisfaction out of what they were doing. It was the fun of finding out. Chesterton said something very profound: The world will never be short of wonders, but it may be bereft of wonder". The moment we lose that sense of wonder, the sense of the fun of finding out what it is all about, we have lost a great deal of the inbuilt compensation of science.

Lord DAVIES of LEEK

My Lords, if my noble friend will allow me to intervene for one moment, I am fascinated by and interested in his point about keeping alive this sense of wonder. Those of us who have spent much of our lives in all branches of teaching know that that is one of the things of which some of us today feel bereft. We are surrounded by such wonderful artefacts—television, lasers, et cetera—and we take it all for granted. We need to recapture in our basic education this sense of wonder which the noble Lord has emphasised.

Lord RITCHIE-CALDER

My Lords, I am always grateful to my noble friend for underscoring something I am saying and which I shall go on to develop. One point I did notice—and I am sure this is the experience of all my friends in the scientific world—was that the great scientists such as Rutherford and Gowland Hopkins were boyish in their enthusiasms even in their seventies. They got all the kick they wanted out of what they were doing. The reason was probably that they did not have to attend committees in those days. Indeed when I hear of all the committees and all the organisations we are setting up, including my noble friend's advisory Committee, I think "Who on earth is staying at home and minding the store? Who on earth is doing the research?" We are demanding so much of the creative people that we are now getting to this point.

I think we must go deeper. All great scientists I have known have acknowledged some teacher, some inspirational factor somewhere in their lives, who had applied the flint to the tinder of the young imagination and fired them with enthusiasm, stirred their natural curiosity and encouraged them—not drafted them, like a careers master—to go into science. This seems to me critical, and it is obviously more critical when you get this lack of inspiration in the schools themselves, because that is where it starts. You do not have to tell people where they are going; you fire their imagination, so that they find their own way there and they will be the more secure when they go their own way.

Something which depresses me, and has done so for a number of years, is the fact that in the old days the professors, the famous, eminent scientists, who were the big names on the academic marquee, always made their first charge, their first responsibility, their first-year students. There was the tinder to which they could apply the flint. That was where scientific curiosity was formed. I shall risk a generality, but from considerable observation I would say that nowadays the more eminent the professor of science is, the more time he gives to his final-year and his post-graduate students and the less time he gives to the firing of that imagination which a man of his authority and experience can give to the younger people. At that stage, by the time he gets to them in their final year and post-graduate years, the students have already been single-tracked into over-specialisation, about which we now hear endless complaints. By and large we thought that we were producing the specialists which industry was looking for, custom-made for their requirements.

The explanation of the shortfall of qualified scientists and engineers is less a question of prospective earnings, people looking beyond their university to their careers, much less the question of future earnings, than the disenchantment of the young with science and technology itself. It is a sad and desperate situation we are in. They say that science—that is the Bomb to them—has produced the unacceptable risks of our society, and technology is destroying the environment. In the debate on the Rothschild Report itself some of us pointed out that it did not help when it placarded that customer/contractor concept which confirmed the feeling among students drifting away from science that science and technology was just big business, whether it was in Government or elsewhere. The true vocation of science, the fun of finding out, became tarnished.

I deplore, and I hope we all do, the retreat from or the denial of science. As I have told student bodies over and over again, if we think that science and technology are being misused, we must be educated in it in order to do something about it. We cannot form judgments about things that we cannot understand. I do not want to glamorise science. I am simply trying to redeem the whole debate on this issue from its structuralisation, and give it some sense of depth. To glamorise science can be counter-productive, even when students, however original and brilliant, find that a great deal of research is drudgery and that the findings are often trivial. My son, when at Cambridge University, said that he discovered that it was no good going on with nuclear physics when he could not date a girl by saying that he was at the Cavendish Laboratory. We have these vogues, but the fact is that a great deal of the work is drudgery.

None of us can or should suggest that the world owes the scientist a living. I spent a great deal of time trying to bring scientists out of their ivory towers—and I do not want to build ivory towers with moats again. They must earn their keep and contribute to the general well-being and prosperity of the community. If scientists are to fulfil any of the hopes as expressed in the Rothschild Report or any other report and if we are to obtain the quality that we so badly need, we must regenerate a sense of purpose which is more than an exhortation about our present economic paralysis—because that one has to spell out quite differently. We must regenerate a sense of purpose which is more than the pay packet, however essential that may be, and put inspiration back into the schools and universities where the students are taught. I shall not deal with any aspects of the report, but I assure my noble friend the Leader of the House that, if the Government want any ideas about what to do with the advisory committee in future most of us could offer them a shopping list which would keep them very busy indeed.

4.32 p.m.

Viscount SIDMOUTH

My Lords, on the first occasion I venture to address this House I stand in need of the customary indulgence, all the more so because I also have to apologise for not having been in my place when the debate started as my car broke down on a particularly busy part of the Embankment. I have been a member of the Agricultural Research Council and am actively engaged in horticulture. Therefore, my remarks will refer specifically to agricultural research as such, although perhaps they may also have some relevance to other types of research. The effect of the Rothschild Report and of the subsequent White Paper has been to direct more attention and more resources towards the applied end of the spectrum. Certainly a high proportion of work commissioned by the sponsoring bodies has come into this area and I believe that that is a good thing. It is possible to be confused by semantics about "basic", "strategic", "applied" and so on, but the real point is that research today, is a continuous and integrated process.

I should like to cite one successful example from my own sphere of interest. Twenty years ago the target of anyone growing tomatoes in heated glass houses was to produce 50 tons to the acre. This was not an easy target to attain even if one had an excellent nursery and first-rate staff. Today the corresponding figure is 100 tons to the acre and it is still increasing. That has been brought about by successfully drawing together—this was done mostly at Ministry experimental stations—the work of a number of different disciplines. For example, plant geneticists contributed hybrids which were capable of setting fruit under low light conditions and which also had two or even three-gene resistance to a number of very damaging diseases. On the other hand, we have the biologists, chemists and physiologists who have greatly refined our knowledge of the optimum environment needed by plants in order to produce the best results. Finally, we have some very helpful engineers who have produced controls which enable us to monitor and apply in a very precise and effective manner the various ingedients needed. I am talking of water, heat, nutrients, CO₂ and a number of other things. I could cite another example by Agricultural Research Council scientists where there has been a very successful development of biological control of glass-house pests, again by an integrated programme.

I believe that research of the kind in which I am interested is not so much Fleming and penicillin but is more of a Manhattan project. I cited this example deliberately, although it is grossly out of proportion, because it is generally conceded that the United States of America is rather ahead of us in development work. It is true that it needs a rather different approach—more the approach of the entrepreneur—and therefore the kind of development I have in mind lies more on the side of industry than the laboratory. However, the hard fact is that it needs very great resources, often far more resources than that needed by the original basic research.

In our present condition our resources are extremely limited. For that reason I welcome greater concentration on development work, even if it means in the last resort some reduction in the resources devoted to basic research. Great effort should be made to enlist the co-operation of the industry itself—and here I refer to farmers and growers—particularly in extending the excellent work of the experimental stations. Some countries—and in this context Holland and Israel come to mind—have not been at all inhibited in augmenting their own research by reference to that which is taking place elsewhere. At top level, science is already a highly international affair and I often feel that eminent scientists are much more truly members of the jet set than those who are referred to in the Press as belonging to that body. I am not sure that this extends as far as it should.

I have in mind in particular workers engaged in development and advisory work. For them the Ministry's Vote seems to be particularly meagre. I urge that it might be increased with great advantage, bearing in mind that at a practical level the process of cross-fertilisation, as it is sometimes referred to, can be particularly fruitful. We have been rather insular in this respect in the past but we should not allow this to inhibit us in the future. I recall visiting Israel some years ago and being impressed by the number of countries that had been visited by the many excellent advisory officers one met in the field. Many had been to Britain because, they said, the British were particularly generous in passing on information.

On the administrative side, I believe that the effect of the Rothschild recommendations has been beneficial, particularly in putting the relationship between the Ministry and the Research Council on a much better footing. A considerable contributory cause of this has been the creation of the Chief Scientist's Department of the Ministry, and what I and many people in the industry feel has been the excellent appointment of the first holder of that post.

In addition, there has been set up a rather elaborate structure known as the Joint Consultative Organisation; and many able people have been involved, and much good work has been done in this context. But I believe it is fair to say that on the whole the net result has been up to now disappointingly meagre. Perhaps one of the reasons for this is that we have been concerned—I speak as a member of one of the boards—up to now with what had been called identifying problems, but at this level (I am talking of the practical level) I believe that problems have an uncomfortable way of identifying themselves. There is great difficulty in deciding priorities as between one project and another, and I do not think that this organisation, as such, is really in any position to carry out that function. I think that this is the crux of the whole matter. The resolving of priorities is not really even now on a proper basis.

Sometimes reference is made in a rather crude manner to the value at the farm gate of the product of a particular sector of the industry, but this is, after all, an historical comparison and not one which relates to the future. It also needs refining in that what we are really after is a contribution to the net national product, and therefore the farm gate value of, say, the livestock industry, great though it is, really needs to be adjusted by deducting the very substantial inputs of imported foodstuffs that go to produce that result.

Many scientists, and indeed farmers and growers, tend to fight shy of the dismal science—and I am probably among them—but I believe that in this case there is a pressing need for the setting up of an economic unit which will have the task of assessing the potential of the various projects as they come forward. I am not suggesting at all that it should be the body that decides these questions—as was rightly said earlier on by a noble Lord, this is ultimately decided on the scientific side—but I believe that their advice would be of value to those people who have to decide. This is a difficult subject, but it has been done in other countries and I believe that it can be done here.

4.45 p.m.

Lord WYNNE-JONES

My Lords, we have been extremely fortunate this afternoon in having two maiden speeches which have revealed to us what excellent new recruits we have to your Lordships' House. I was particularly interested in listening to the noble Viscount, Lord Sidmouth. I know nothing about agriculture. Unfortunately, I am not a horticulturist—my garden is always neglected. But listening to him was fascinating, because he gave us exactly the information which those of us who were critical of the Rothschild recommendations required. I personally much favoured the Dainton recommendations rather than the Rothschild recommendations. We were worried because, taking the Agricultural Research Council, I believe I am right in saying that the recommendation of Rothschild was that whereas they had previously been spending a sum of the order of £17 million a year, they were only to be allowed to spend £4 million, and the rest of it was to be spent by the Ministry on the basis of this wonderful principle laid down involving a contractor on the one hand and the consumer on the other. But the noble Lord has at least given me a considerable degree of reassurance. He has not made a provocative speech at all. He has made a reassuring speech, and given us valuable information.

The noble Lord, Lord Baker, who fascinated me, as he always does, was extremely provocative, not because he was putting out ideas which demanded an immediate reply, but because they nearly made me break the Rules of the House by getting to my feet and interrupting him to ask a question. The noble Lord has this great facility, which I am sure he will continue to use in your Lordships' House, of stimulating, without at the same time being in the least degree abrasive. We look forward to speeches from both noble Lords in the future.

The subject matter, "Research and development since the Rothschild Report" is a fascinating one, but I could not help feeling, as I listened to the debate, that there are still many people who imagine that research and development are a magic cure for the ills of industry. No one who has taken any part in research and development would for a moment make such a rash and bold claim. That is not the purpose of research and development. In fact, the matter was summed up rather well in the report of the Select Committee on Science and Technology in another place, where they said that research and development cannot be regarded as the engine driving industry. Indeed, research and development are not always necessary to industry. It is perfectly possible to carry on an industry with a minimum of research and development.

I remember years ago I was asked by the old DSIR to be a visitor to the Coal Tar Research Association which had just been set up. The director of that Association told me that when he was appointed he went round to have a look at the various places in the country where coal tar was being distilled. He found a little coal tar distillery, I think in County Durham, and it did every conceivable thing wrong. It had no by-product recovery; its distillation was atrocious. Every single thing that it did seemed to be wrong. He came back and thought: "Now I shall be able to write a really good report explaining how they ought to do the job, and make this little firm realise that they will gain enormously through the Research Association". When he looked into it he found that the distillery sold nothing except the pitch residue, which they sold to the county council for the roads. They were such a short distance from the main road that the county council liked to pick it up because they got it for next to nothing. That little distillery made a large profit without any scientific research, and one can be almost certain that scientific research would have ruined it.

It is wrong to imagine that the future our our industry as a whole is linked with research and development; there is no one-to-one correspondence between national prosperity and the percentage of income spent on research and development, and it is stupid to look for one. However, that does not mean that research and development are not highly significant for the development of industry. Nor does it mean that there are not whole industries which could not survive without it. One cannot imagine a pharmaceutical industry which based itself merely on selling Beecham's pills. One cannot imagine running a successful chemical industry without doing research into all the polymers and various products which are used. But when it comes to something like fabricating a boat, one may use modern materials and bonded plastics without having to set up a research laboratory; one can benefit from the research of others and concentrate on building boats. It would be foolish to do otherwise.

Sometimes firms have been forced into research activity. Just after the war, the CBI wrote to firms advising them to do research, and I remember being told by the appointments secretary at the University of Newcastle that there came to him one day a little man—little in the sense that he ran a small business—saying that he wanted a physicist. The secretary of the appointments board asked him why and he replied, "I am told that the physicist is the best scientist". Being a physicist himself, the secretary said that he would accept that and asked, "But why do you want him?", to which the little man replied, "I am not sure what we want him to do, but the CBI has written to say that we should take on research people and I want to employ a physicist".

That sort of thing is idiocy in terms of research. It has no sense at all. What makes sense is when one is doing research into fields which are new and where, without research, one will not get anywhere; we would not get nuclear energy or modern aircraft if we refused to spend money on research and development. We could continue to build what Wilbur Wright built, but we could not build a modern aeroplane without doing the necessary research. Nor will we get new fuels without doing the necessary research.

The whole question we are discussing after Rothschild is bound up with considering what we are doing right, what we are doing wrong and what we should be doing better. I do not claim to have the answers, but I would say, as my noble friend Lord Ritchie-Calder said, that we must spend money on education. We will get nowhere unless we do that first. I was therefore glad to find several of the 20-odd recommendations in the Report of the Select Committee from another place on Science and Technology approaching matters in this way. For example, one says: The training of engineers and applied scientists suitable for employment in productive industry should be given much higher priority in the Government's educational policy. Another says: The proposals of the Science Research Council for improvements in the training of post-graduates should be pursued with vigour and sufficient earmarked funds should be allocated at the expense, if necessary, of less pressing demands on the higher education sector. Yet another says: Serious consideration should now be given to the introduction of higher maintenance grants for undergraduate and post-graduate students in the applied sciences and engineering. Those are all important, but I suggest that it is perhaps even more important for the Government not to take the step which they have said they intend to take; that is, to more than treble, I think quadruple, the fees of post-graduate students. If we wish to encourage post-graduate work and training, the worst thing we could do is to multiply by four the fees of post-graduate students. It may be said that they will get them back from somewhere, but they will not get them through the ordinary grants system; they will get them only if they are specifically given a grant for research, otherwise they have to pay the fees themselves.

If I were still capable of running a university department, and if I were running one and I got a research grant from, say, industry, and I employed on that grant post-graduate students, I should have to find out of that research grant this quadrupled fee for those students. That is absolutely counter-productive, and for the Government to raise the fees of postgraduate students in such a way is an outrage. If we are discussing what to do in the post-Rothschild period, I would say that for goodness sake let us realise that while research is not a magic cure—it will not do anything in the way of producing overnight a successful industry where one does not exist at present—without putting effort into research the future of this country is bleak.

I hope, therefore, that my noble friend will carry the message to the Cabinet that we in this House consider research to be important; that we consider the Rothschild proposals on the whole to have worked well—I did not think they would but I think that, generally speaking, they have worked well—but that we are alarmed when the Government do not pay enough attention to those factors which make possible the recruitment and proper training of post-graduates.

Baroness GAITSKELL

My Lords, while I sympathise with my noble friend's plea on behalf of students, may I ask him to be more specific about the kind of research we need at this time of economic stringency?

Lord WYNNE-JONES

My Lords, the kind of research we always need is well-conceived research; research that is thought out properly and carried through effectively. That is all I can say. I cannot say what we should research into; if I knew that I would not even have to do the research

5 p.m.

The Earl of SELBORNE

My Lords, I join with others today in congratulating our two maiden speakers. When, after many years of distinguished service, the noble Viscount, Lord Sidmouth, retired from the Agricultural Research Council, I was fortunate enough to be appointed in his place. As a horticulturist—albeit from a different branch of horticulture from the noble Viscount's—I listened with very great interest and sympathy to every word he had to say. We look forward to both noble Lords participating frequently in our debates.

In 1972, when Rothschild was debated and was the subject of considerable correspondence in The Times, as has already been mentioned, the great recurring fear of research workers was that the advent of the customer/contractor principle would lead to a disruption of research programmes. This was particularly so in agriculture, where a very large part of the national research projects was being conducted within the agricultural research service; that is, under the Agricultural Research Council. Probably it was to take the heat out of the situation and to assure the institutes that there was no danger of lack of continuity that a promise was made that, for three years, the transferred funds—that is, funds that would previously have been voted to the Department of Education and Science and which were now to be handed over to the Ministry of Agriculture as the customer in the contractor/customer relationship—would in turn be committed back to the ARC. This certainly helped to take the heat out of the situation. I might add that the second very important measure that was taken very quickly was a particularly wise appointment of a Chief Scientist.

Therefore, it is probably very right, as the noble Lord, Lord Kennet, said, to look now in mid-term or even early on in the Rothschild era at what exactly have been the effects. The three-year period is over so far as the transfer of funds is concerned and the contractor now pays for work done in the Agricultural Research Council. Some 55 per cent. of the work is now sponsored by the Ministry of Agriculture. This is indeed a very much higher percentage than is the case in other research councils. Potentially this change from working on funds voted as a grant-in-aid to working on a commission and being paid on work done should, and no doubt will, have far-reaching effects. I imagine that it concentrates the mind wonderfully at the research bench to know that one will have to put in a bill at the end and that one will have to show what one has done in order to be paid.

In practice, looking at it from the other end of the spectrum—that is, from the point of view of myself as a farmer or perhaps a food manufacturer who is, after all, the ultimate customer—the farmer will not see, after three years, very many signs of the post-Rothschild era. He will, it is true, have an opportunity, through the Joint Consultative Organisation, at least to influence the choice of priorities. I believe that the noble Viscount, Lord Sidmouth, was correctly rather disparaging about some of the abilities of the decision-making process of the Joint Consultative Organisation. Nevertheless, I should say that this has been an opportunity that has been very much welcomed by industry as a whole—and by that I really mean the farmers and growers—to make its points of view known about what it feels are research priorities, and to know that the various committees will in turn be able to give advice to the sponsors—that is, the two departments of Agriculture and the Agricultural Research Council—is certainly something that has been much appreciated.

To give an example, I belong to the West Sussex Fruit Group and we meet once a year and make quite sure that we tot up a list of things that we think we particularly need on our farms in West Sussex and Hampshire. Although there are many committees through which this information and advice will go, one feels gratified to know that a machinery is available, post-Rothschild, for this to be considered by the sponsors.

The Joint Consultative Organisation has a plethora of expertise within its ranks—farmers, research workers, advisory staff, economists, food manufacturers and administrators. It was given the initial task of reviewing work in progress—national research in agriculture Of course, this was an enormous task and it is not surprising that from these very long deliberations some rather disjointed recommendations came forward. After all, it seems only reasonable to say that the more boards and committees are appointed, the more recommendations are likely to be received. I think that this can fairly be said to have happened with the Joint Consultative Organisation. However, the value, which I think should not be underestimated, is that we have now had—I believe for the first time—a thorough review of the work-in-progress, not just in research institutes but also in the Development Service. This is certainly very useful—indeed, I believe one could fairly describe it as a fundamental use to the sponsors when they come to determine priorities in the future.

I imagine that the Joint Consultative Organisation will now pedal back a bit and will be asked by the sponsors to look at the specific areas in which they feel that a change of events, such as, for instance, a fuel crisis or increased progress in mechanisation, requires different priorities. Certainly, I cannot imagine that we on the Joint Consultative Organisation will be asked periodically to review the entire gamut of research.

I feel that there is one irony in the Joint Consultative Organisation and the committees to which one must draw attention. It is that there are so many of them—and very time-consuming they have been for administrative purposes, though this appears to be exactly what Lord Rothschild was seeking to avoid. I believe that in paragraph 24 of the report he refers critically and in his normal strident terms to the committees, groups and boards which the Agricultural Research Council and the other research councils spawn.

The second aspect which the farmer/grower will have noticed and will have welcomed and found most exciting is the increasing use of the multi-disciplinary approach to solving a problem. After all, if a contractor is told, "This is the problem and this is the research project. You put your people in to solve this problem or to work on it", he will have a very clear idea of exactly what he is asked to do. Whereas in the past, one might have had somebody working away in the ivory tower which has been referred to and not having the key to unlock the problem in question, if he is put together with someone from a different discipline or, indeed, someone from the Development Service, most exciting things may happen as idea after idea comes out.

To give an example in a rather wider field in agriculture, very remarkable progress has been made in the last two or three years in the application of minimal cultivations and, likewise, in the use of forage maize. It is probably apparent to your Lordships that the face of southern England is changing rapidly as a result of the use of forage maize. The noble Viscount, Lord Sidmouth, referred to integrated biological control.

All these are projects that have benefited very much from having a project team given a specific brief and having a number of people working round it from different angles. I stress that the development service, as so often, has a very important role to play in this and it is very closely tied up with the research content of the work. So, to sum up on the credit side of the work which has emerged since Rothschild, I feel sure that there has been, or there can be now, a coherent national research programme emerging. We now have the information available as to what is in hand and it is being fed into the same computer. Admittedly, like all computers, it does not appear to lend itself very easily to both research and development and I gather that there are still problems in getting all the required information on to the one computer, but it seems to me to be an advantage to have this national research programme available in this form.

Expertise also is now available to research and development. Whether it will be able to help I believe now depends very much on the role that the sponsors allot to the Joint Consultative Organisation. I also think that an important bonus of the post-Rothschild era is that the research worker has an opportunity to feel justified in believing that his work is relevant. After all, if he has been asked and given a brief under the customer/contractor principle for the work, he can be quite sure in his own mind that his work is of relevance to industry. I think that one should also add that those people who find that they have not been commissioned should in no way feel that their work is less important. It simply means that their work is less appropriate for sponsorship from the funds transferred to the Ministry of Agriculture.

Perhaps I may now refer to the disadvantages, as I see them, from the farmer's point of view. I think that one must, however, go into the paper work. I do not think that it is so much the research worker on the bench who is aggrieved and aggravated by the amount of work, although I accept that he must have more administrative work than previously; I am quite sure that it is the director of the institute who finds himself getting more and more submerged by administrative burdens. It is not just the customer/contractor relationship which has loaded the administrative content of his work recently; legislation has helped. But no doubt the preparation of commissions, sub-commissions, and now the reviews that are taking place is very time consuming indeed.

It must also be recognised as a disadvantage that this customer/contractor relationship does not easily fit the development service in agriculture. It may fit well to the research, but, as so often, development finds itself coming along behind research and being required to conform to a role that better suits research. After all, in agriculture development is almost always conducted by the Agricultural Development and Advisory Service, and, as that name suggests, the same officer is responsible for statutory controls, development work and advisory work. He comes on to a farm, and he could not tell one at the end of the day necessarily whether he had been giving one advice or helping with the development if, after all, one has a demonstration plot or a trial going on on one's farm.

There are no sharp boundaries here and sometimes the artificial restraint of trying to feed this development work into a project number for the sake of conformity with research is totally artificial and can possibly be most frustrating. But the test for the customer/contractor relationship will be in the future. We obviously do not expect a growth, as we had in the 1950s, in the research service again, but many years, one will assume, of a no growth situation. With regard to implementing the recommendations that are coming forward, I would say to the noble Viscount, Lord Thurso, that I certainly cannot agree that they are scratching around for advice on what is to be commissioned because I think that the danger is that there are far too many recommendations, which are far too expensive to implement.

Nevertheless, if one is to have an opportunity to switch into new research priorities, this must be done as other research priorities terminate. With fewer new people coming into research because of the lack of growth, it means retraining. Bearing in mind that the agricultural research service, which expanded so greatly during the 1950s, has a heavy imbalance in the 40 and 50 year old age group, this is going to be a very great problem in agriculture. I suspect, although J do not know, it might well be a problem in other research councils. To retrain somebody in his 40s and 50s into possibly a different discipline, and certainly a different aspect of his discipline, will be a very serious problem.

The further problem which faces the agricultural industry is not so much of development, but more of promotion. The agricultural industry—it is a sad fact—is simply not exploiting effectively existing research and development findings. In horticulture the experimental stations run by the Ministry of Agriculture consistently show that they can in many cases get potential yields which are double the national average, and this covers quite a wide range of crops. The National Institute for Research in Dairying would say that if the work on mastitis control, which they have pretty well completed, were to be implemented effectively on the national farm it would go a very long way to paying for the entire research and development budget for agriculture.

So there is a problem here not so much of development but of promotion. How does one get this across? What is stopping farmers from using this very great expertise which is available? It may be lack of capital; it may be lack of confidence; it probably is both. But there are very many other reasons, and it must now be a high priority to identity just what are these restraints and to see how this matter can be dealt with. I hope that it will not be thought that the heavy work that has devolved on boards and committees as a result of Rothschild, to which I have drawn attention, in any way detracts from the value that people are putting in to helping the sponsors identify research. I feel very strongly, as indeed I feel is the concensus today, that the customer/contractor relationship has worked, but if, in the words of the noble Lord, Lord Kennet, this is half time, I think there will be a really hard fought second half.

5.15 p.m.

Lord TEDDER

My Lords, in congratulating the noble Lord, Lord Baker, I should add that I, too, miss my blackboard and chalk behind me. I should like particularly to confirm or re-echo all that he had to say about the impact of the Green Paper on physical science at university. I should also like to assure the noble Lord, Lord Ritchie-Calder, that in Scotland anyway I still think it is the general tradition that the professor gives the first year lectures. I also wish to support all that the noble Lord, Lord Wynne-Jones, had to say about fees for post-graduates.

In thanking the noble Lord, Lord Kennet, for the opportunity to look back over the five years since those two long afternoons that we spent in this Chamber, I should say that it seems a long time ago. But how interesting it is to read the report of that debate again. However, looking through the vast number of papers that I collected for that debate I find nothing that I said on that occasion which I would wish to retract now. I remain convinced that the customer/contract principle should be applied only to very precise and narrow short-term projects. I also remain convinced that our greatest need is to encourage what Dainton called "strategic" research. I do not however think it is worthwhile to argue again the pros and cons of the Green Paper. A great deal has happened since then, and so many new problems now beset the scientific community that we must not waste our energy on semantics of what is "applied research" and what is "strategic research".

We all realise that the research councils cannot hope completely to escape the cuts in Government spending which the present Government, or indeed any Government, will find necessary to make. We therefore have to make sure that the more limited resources available to support scientific research are spent in the best way possible. It is little more than two weeks ago since we were debating in your Lordships' House a Motion put down by the noble Lord, Lord Rochester, concerning the low esteem in which industry was held by many of our students graduating from university. In that debate I made a plea for increased participation by members of industry in the teaching and research carried out at universities. I argued then that it would help to improve the students' view of industry. I argue now that the same course of action would also help to promote good strategic research.

To a large extent research workers develop their ideas through discussion with their colleagues. If the academic world remains divorced from the world of industry, it is hardly surprising that some research products should become rather esoteric and divorced from any immediate practical application. In the debate five years ago I was at pains to emphasise how seldom any of the major advances in applied science originally grew out of any specific pieces of research of the customer/contract type. The big advances so often come from one research worker hearing of the problems of another in a quite different field and realising that the work he is doing may find application in, or possibly even provide a solution to, the problems of his colleagues.

With your Lordships' permission I should like to tell a story told me by my father. During the war the Ministry of Health sent out to North Africa a professor of anatomy—I think that he was only a reader in anatomy at the time—to study the casualties caused by bombing. The professor of anatomy was of course medically qualified, but he had earned his scientific distinction by studying the social behaviour of primates. This biological study had involved him in the extensive use of statistical methods. In order to tackle his problem he sought proper statistical data on the effects of bombing. However he found that the Air Ministry experts on bombing were not in fact using the most appropriate statistical techniques. The studies that my noble friend Lord Zuckerman was able to carry out on the bombing of Pantellerea, and subsequently on the bombing of the transportation system in Italy, had an enormous, and one could perhaps say a decisive effect on the way that Allied airpower was used prior to the Normandy landings in 1944.

Now the point of this parable is to emphasise that the really gifted scientist does not have to be an expert in a particular field to make a vital contribution, and even a quite unexceptional scientist can often throw new light on the problems of his colleagues. I want to emphasise again how much can be gained by encouraging better contacts between scientists from industry and scientists from the universities. I am sure that the way to do this is by having industrial scientists as part-time teachers and research workers in universities, and university teachers seconded for short periods into industry. Thus, my first point is that if we are to use the more limited funds now available for research to the maximum profit, we should do all we can to encourage the maximum possible collaboration between university laboratories and industry. The so-called case awards, already referred to by the noble Lord, Lord Baker, developed by the Science Research Council, are one way of developing such collaboration. I am sure we must do all we can to find other ways.

The second point I wish to make, my Lords, is the great danger of laying down principles like the customer contract principle. It is inevitable that the civil servants—who, as noble Lords have already commented, are usually not scientists—who have to administer will regard these principles as fundamental truths which are to be applied across the board. If I may tell a current but cautionary tale which I hope will not be regarded as telling tales out of school, though I shall probably get into trouble for it none the less, just over a year ago the Science Research Council published a report by a Working Party which discussed the future policy of the SRC. The working party made a number of proposals, one of which was that there should be a greater amount of taught course work included in the normal Ph.D course. Indeed, the Working Party went so far as to suggest that the whole of the first year of a three-year research degree should be given over to course work.

At the Royal Institute of Chemistry, a meeting of all the heads of university chemistry departments in the United Kingdom discussed this report and, as requested, sent to the SRC their comments on the working party's proposals. The heads of chemistry departments welcomed many of the working party's proposals, but they did not view the introduction of extensive amounts of taught course work as suitable for research students in chemistry. All research students in chemistry get some course work, and indeed a Royal Society report of eight years ago showed that heads of chemistry departments felt that some course work was essential. However, except in certain circumstances where specialist training is required in order to carry out the research, the heads of chemistry departments were unanimous in opposing extensive further introduction of taught class work. Your Lordships can imagine our surprise when, a couple of weeks ago, we received from the secretariat of the chemistry committee of the SRC a letter informing us that, as well as depending on the research productivity of the department, the allocation of quota research awards—and may I explain to noble Lords that that is what we depend on to keep our research going—would also depend on the extent to which the department included taught course work in its Ph.D training.

We subsequently heard that the Science Research Council itself have endorsed the Working Party's proposals, but I am quite sure that such a responsible body would not attempt to dictate to universities a uniform type of training which, though suitable for some branches of science, is totally unsuitable to others. In fact, investigation showed that the chemistry committee, who are primarily responsible for the allocation of research awards in chemistry, have not yet even discussed the matter. In other words, a major change in policy, contrary to the most authoritative advice available, was being implemented, not as the result of decisions made by the appropriate committee but by deductions made by the administrative officials based on principles enunciated by the council itself. I do not wish to appear critical of the officials concerned: what I want to do is to point out the dangers of enunciating principles or of laying down hard and fast guidelines. Different branches of science require different treatment, and at every stage flexibility should be our aim.

I think that many of us scientists reacted adversely, and perhaps over-reacted, to the report of the noble Lord, Lord Rothschild, partly because the then Government had announced in advance that they endorsed the customer/contract principle and we were afraid that we would see its blind application in areas of research where it was totally inappropriate. I think events have proved that, though to some extent our fears were justified, certainly our worst fears were unfounded. We talk about scientific research as though it was one complete whole which could be treated in the same manner in all its fields. In practice, what we need is flexibility, and what is suitable for research in astronomy may be quite inappropriate for research in biochemistry. If I may paraphrase my noble friend and monitor, the noble Lord, Lord Todd, speaking in that debate five years ago: What we all want to see and what we all should be trying to get is a real partnership between Government Departments and research councils—a partnership that would be extended to the universities and to industry. My Lords, let us have no more fundamental principles, but let us realise that each branch of science needs to be treated in its own way; and let us have as little direction but as much collaboration as possible—collaboration among the Government, the Departments and the research councils, and, above all, between industry and the universities.

5.26 p.m.

The Earl of SHANNON

My Lords, it is exactly five years, almost to the day, since we last debated this subject. As your Lordships have been reminded, we spent two days on the debate then, and the fact that we are spending only one day today does not mean, I am sure, any diminution in the importance of this subject. We are today indebted to Lord Kennet for this opportunity, and for the opportunity to listen to the two excellent maiden speeches which his Motion has produced. Like the noble Lord who has just sat down, I looked back at that debate and I found that on that occasion I said most of what I would wish to say today. I therefore wish to make only an extremely short intervention this afternoon, and that will be concerned, I admit, with only one narrow and industrially related field.

The principles popularly attributed to Lord Rothschild are not new. For instance, the reasearch associations with which I am connected, and which are, if I may point out, the specialist laboratories called for by Lord Kennet (although I must admit to a certain personal grief, as a member of the British Horological Institute, that there is not a watch research association), have operated on what we now popularly call the Rothschild principle for many decades—I think even before the noble Lord, Lord Rothschild, had evinced any interest in science at all. But these principles were eagerly adopted by the then Conservative Government, and fortunately this support was continued by their successors in office. Many of us expressed concern at the time that arrangements in line with these newly-adopted principles were being pushed through with quite undue and unseemly haste. In fact, the House of Commons Select Committee on Science and Technology was at the time constrained to observe …the excessive reliance which seems to be being placed on the so far totally untried requirements boards". These requirements boards, of course, were the means by which it was intended to give implementation to the customer/contractor principle in industrial development.

At the time, Departments, under questioning, admitted that their hope was that each requirements board would gradually evolve its own character. I am afraid that at the time I regarded this as a polite way of saying that nobody as yet had defined in detail the objects of the boards, their terms of reference or their mode of operation. Whether or not this may have been an inauspicious start, there is absolutely no doubt that the result has been a roaring success, certainly in so far as the Department of Industry is concerned. Having said that, I must now embarrassingly declare an interest as being a member of one of those boards.

Particularly appropriate to our present economic situation is the transfer of technology into industry; and it is highly sensible that those bodies which apportion public funds for this purpose should, at least, be partially manned by representatives of the receiving end in order to define the most potentially beneficial areas where the public interest exists and where and how the public contribution, if any, should be made. I should like at this point, quite unreservedly, to pay tribute to those civil servants who organise, service and participate in these boards. Not only, poor chaps, have they to overcome their horror at what must for them be the most heinous of crimes, the spending of public money by outsiders—and from their own Department's budget to boot!—but they have done everything to ensure that the whole concept is the success that it is. If the roaring of this success is muted—and it is—it is due to the dampening effect of the comparatively pitiful sums allocated for the purpose. Of course, at the present time of financial stringency the last thing one should do is to plead for more. That is why I have been very careful to use the word "comparable". I will not bore your Lordships with long lists of statistics, but would invite you to consider in general the relative merits of such an area of direct wealth-producing potential against many other areas of interesting, perhaps in some cases satisfying, but all too often non-productive areas of public spending.

The noble Lord, Lord Kennet, in his speech moving this debate mentioned the importance of international implications. In this respect it is interesting to note the outcome of a symposium held in Milan last May which was called at the instigation of Directorate-General XII of the Commission of the European Communities. The outcome was to the effect that the Commission should involve itself very much more closely with innovation in industry throughout the countries of the Nine. The result of this has been the recent decision (and one of the first decisions) of the new Commissioners, Mr. Commissioner Guido Brunner should be what one might call the supremo in this area which had previously been fragmented among Directorates-General III, V, XII and Directorate-General XIII which the noble Lord, Lord Kennet, especially mentioned. I think that Lord Kennet will be very pleased to find that Directorate-General XIII in all probability will be spearheading this activity most effectively.

My Lords, if I might now attempt to offer a small answer to the question of the noble Viscount, Lord Thurso, and, in a large way, agreeing with what the noble Lord, Lord Wynne-Jones, has said, it is very interesting to note that those countries which have shown the greatest economic growth in the past few decades have been those who did not indulge in large programmes of pure, basic or speculative research—call it what you like—at great expense, but have put their resources into the development and intelligent application of known results into their industries. And the only way in which this can be effectively carried out is to make absolutely certain that there will be a reasonable and worthwhile return not only to the inventor but also to the industrialist who carries out that innovation.

At this point I should like to make reference to, and, I think, applaud, the work of the Science Research Council in that they have recently had far more of an eye to the industrial relevance of the work which they fund. I know that this has not received universal approbation, but it certainly does so from me. One only hopes that this attitude will continue and, if possible, involve industry even more closely in the assessment and the use of the work which the Science Research Council funds. I am not suggesting that pure research should be put into a strait-jacket but only into perspective. I have recently heard it said that pure research must be like a variable wind, pursuing an indefinite course which cannot be predetermined or directed. What can and should be done, however, is to monitor this variable progress and observe into what profitable directions it may be leading.

My Lords, if I may conclude with a recommendation or two for the future, may I suggest that a close link be formed between the research and development community—and, most especially, the development community and the National Economic Development Office. Industrial strategy is the latter's business and they ought to be informed of what is already, or what is imminently, technologically possible. Likewise, if the development community is aware of the direction in which industry is desiring to go, it can bend its efforts most appropriately towards that end.

5.37 p.m.

Lord BOWDEN

My Lords, may I begin by thanking the noble Lord, Lord Kennet, for making it possible for us to discuss this subject this afternoon, and may I with all due diffidence add mine to the many congratulations extended to our two maiden speakers. I have sat at the feet of the noble Lord, Lord Baker, these 25 or 30 years and I find it extraordinary that I should on this occasion be congratulating him on his making the kind of speech that I have heard him make so often before. I hope he will often attend this House and give us from time to time a steer in the right direction. I am sure that his counsel will be extraordinarily valuable to us.

My Lords, so much has been said this afternoon that it is difficult for me to know where best to begin. I vividly remember the passions aroused by the original proposals of the Rothschild reforms, and when I was preparing for this debate I went around to talk to several people much concerned with the organisation of research in and out of universities and in and out of industry, and I asked what in their opinion was the effect that the Rothschild proposals had had. To my astonishment, I found that nobody could think of anything significant. Many people asked, "What were the reforms?" They all went on to make the same points: that the real problems of research today are produced by the inflation of money, by the shortage of resources and by the financial difficulties in which universities and industry find themselves.

These are dominating people's thoughts, and I doubt very much whether the Rothschild proposals have had any effect commensurate with the anxiety that they provoked at the time. I am sure that the fears that I myself voiced have not been realised; nor, do I think, have the achievements so confidently hoped for by the proponents of the reforms. I think that Rothschild has had far less effect than was hoped for or feared. Rothschild was trying to devise a technique which would improve the way in which this country applied and used its research; and it is to the ideas which were current at the time that we should return.

The reforms which have taken place in the Science Research Council had already been initiated before the Rothschild Report. We have established an Engineering Research Council. This had been proposed before Rothschild. Furthermore, they had already introduced civil servants into the various committees of the Science Research Council in order to provide for that body the kind of advice which Rothschild in due course proposed. The system was already working very well. For that reason, the Science Research Council hardly noticed the effect of Rothschild.

The NERC, which has been fairly dramatically affected by Rothschild, has been affected not because of the short-comings of the Committee, but because there has never been anywhere in Government any body capable of giving it reasonable advice or of demanding from it particular solutions to particular problems. The NERC has been embarrassed—and "embarrassed" is the only word to use—by the fact that half a dozen Government Departments, each independently, have made requests of it and between them they are unable to produce any reasonable priority list.

We are still struggling, as we have always struggled, with the problem of making sure that industry progresses and develops along the way which will make the country more prosperous. We still have the same problems that we have always had. Research for production should be done in industrial firms if it is at all possible. It is wrong to expect either a university or a Government research institution of any kind to undertake research work which is going to result in a vendable product on a substantial scale. They cannot do it. Enormous organisations such as ICI have found that it pays to split down research work among relatively small groups and to associate a particular group of research workers with a particular factory where the product is being made. They do this in order to make certain that the work is done efficiently. Our national policy has, in large measure, destroyed the efforts that might otherwise have been made to carry out industrial research on a substantial scale.

I should like to refer to what I regard as the palmier days of academic industrial research, in Manchester in my institution some 40 or 50 years ago. The most distinguished engineer, a designer of rotating machinery in England, was Miles Walker. He was a professor in my institution and at the same time was chief designer for Metropolitan Vickers who made and sold the machines. The research work he did involved his students who learned what research was like, in the same way as the medical student, once qualified, learns what medicine is like, by practising it. There is no other way a person can turn himself from a college graduate into a professional. Miles Walker dominated the design of electrical machinery for years. The consequence was that his department was by far the best and most productive in this country. Unfortunately, after he died the tradition could not be sustained. Even more unfortunately, the research department in Metropolitan Vickers, which had 900 people in it at one time, now has only 45, and most of them are curators of a museum of antiquities, a museum of what was once a great research establishment.

It is impossible to describe in detail the financial crises which have befallen what was once the proudest factory in Europe; but it is true to say that the number of employees has dropped from 27,000 to 7,000 in the past 10 years and the whole of its research programme has effectively been scrapped. Opportunities for collaboration between the university and what was at Trafford Park have totally disappeared. This contains a far more serious lesson for us than anything we can learn by contemplating the minor changes in the direction of academic research in so far as it is funded by the various research councils.

We have to make sure that what one can almost call the seamless robe which extends all the way from the original ideas in the minds of the scientist to the development of a product, is never destroyed. The research which led to the invention of Terylene by Doctor Whinfield, cost a few pounds. On the other hand, before ICI were able to make it and sell it, they probably had to spend £20 million on developing it. That is probably an extreme case, but it at least indicates that the development processes are enormously more complicated than research and most of the work must be done in industry.

Our great weakness has been that, by building up the great national research laboratories, we have deprived industry of the opportunity of doing work for itself which it could do much more efficiently and productively. Furthermore, we have never implemented what to me is a much more important document than the Rothschild Report. May I remind your Lordships that in 1965 Sir Gordon Sutherland studied the interaction between the universities and the Government research establishments. He recommended that we in England should associate the teaching process with the actual operations of Government research on the largest possible scale, as they have long done in America.

As a result of that report, we were able to appoint the Astronomer Royal in Hurstmonceux, a professor in the University of Sussex. There has been collaboration between Southampton and Farnborough; there has also been collaboration on a small scale between Malvern and Birmingham. In no single case has the collaboration been as intensive as it should be, nor has it been followed through into the industrial world where vendable commodities have to be produced and sold.

We must not allow ourselves to be dominated by the niceties, the almost theological niceties, of the effects of the Rothschild Report. We must concern ourselves far more with the basic problem that British industry is often unable to fund the research that it should carry out. It is often obliged therefore to get research done in a Government establishment. There, in my opinion, except in rare circumstances, it is never done as efficiently or with the same urgent regard to time, which is so important, as it could have been done in industry.

If we can take a particular case, the difference between our atomic energy programme and that of the Canadians is very striking. The Canadians have a small group of people who have produced far more efficient nuclear power stations than we have done. The enormous installation at Pickering near Toronto is still the largest in the world. It is the only example of a nuclear power station which came on stream on schedule, within estimates, and which has worked reliably since it was first switched on.

The reason is basically that the same people who started the research went right through the manufacture and installation, and they have been associated with the project throughout. We in England separate totally the original research, carried out perhaps at Harwell, the development, carried out at Risley, and the manufacture which might be carried out anywhere in the country. The failure of the process of handover has been largely responsible for the relative inefficiency, the delays, the extravagance and the growing disappointment in our atomic energy programme.

This is a far more fundamental example of what we might call the customer/contractor principle. If a man knows when he starts on his research that, ten years later, he is going to be responsible for a power station that does not work, this gives him a far greater incentive to efficiency, a far greater idea of the importance of his work, than he would ever get merely by being given a contract to undertake a piece of work on schedule for somebody else who cannot precisely specify it.

For many years we have been carrying out some fundamental research of great significance, but we have never realised that the great wealth of America came before the war to a country which boasted that it relied on Europe for its pure research, bought it from Europe and applied it. It was only after Vannevar Bush wrote a report for President Roosevelt pointing out that in his opinion Europe could never again undertake pure research because it had been devastated by war, that America started to undertake pure research on a large scale. There is no doubt, in my opinion, that the achievements of America in developing ideas should be a lesson to us, and should make us realise that we cannot hope to become wealthy by spending, as we are doing, more research on military operations and on defence, as we have been doing for 20 years or more, than any other country in Europe, and, at the same time, spending less on commercial research than most of them—less on roads, on telephones, on hospitals or on houses. Research into military hardware is no way to make us prosperous. There is no possibility that the Rothschild Report, or any other report, can change the nature of the organisation which produces this devastating and inefficient result.

5.51 p.m.

The Earl of HALSBURY

My Lords, before I come to the subject of the Motion, I should like to join with other noble Lords in thanking the noble Lord, Lord Kennet, for giving us the opportunity to debate this matter this afternoon, and to add my congratulations to my noble friends Lord Sidmouth and Lord Baker. I, like the noble Lord, Lord Bowden, have also sat at their feet in years gone by, and I am sure that we all look forward to seeing them on many occasions in the future and listening to their wise counsel and advice.

The last time I addressed your Lordships' House on this subject, my views were rather like those which have been expressed this afternoon by the noble Lord, Lord Strathcona. I felt that the Rothschild concepts had ceased from mental strife, his sword had gone to sleep in his hand and he was going home to hang it up on the wall with four-fifths of the job unfinished, and with a non-novel concept launched at the Science Research Councils. That does not mean that I disagree in any way with my noble friend Lord Shannon. I am so glad it has been a success in the context of the Industrial Research Associations. It is exactly what I should have expected.

I also noted with some little nostalgia that this was my swan song on the subject, as I should have completed 20 years' service with the Department of Scientific and Industrial Research as a member of its Council and later the Science Research Council; and that I should be put out to grass at the end of the academic year. However, man proposes but God disposes, and when I found myself a free man the Medical Research Council, in the words of the Godfather, "made me an offer I could not refuse". So in the post-Rothschild era I found myself once more swept up into research council affairs.

I do not know what happened to other branches of Government science when the curse of Rothschild descended on them, but in the words of Thomas Ingoldsby, so far as the MRC is concerned: Never was heard such a terrible curse!! But what gave rise To no little surprise, Nobody seemed one penny the worse! or a penny the better, either, my Lords! The main sufferers were those senior civil servants who got the equivalent of honourable ulcers in shifting the furniture around at the top level. Here I must say a word about the effect on our loyal civil servants of asking them to dismantle their bicycle into its component parts and then reassemble it after exchanging the back and front wheels. It is not a useful use of their time to ask them to be the architects of something which represents a distinction without a difference.

The reason why it made so little difference was that part of our quondam residues were handed over to the DHSS by the Treasury, who handed them back to us and said: "Carry on, sergeant-major. You have always done what we wanted: just go on doing it." That was not because the DHSS had no ideas for research, but because the ideas they had were already being implemented. Before the change-over, relations between the Medical Research Council and the DHSS or its predecessors were friendly, informal and elastic. They are still friendly, but are now more formalised and have therefore lost a little of their elasticity. The DHSS are now beginning to generate policies of their own, and that may be a good thing. But the rigidity introduced into the system is simply the price paid for that good thing, if you think it good. All design is a compromise: if you want more of something you have to pay for it with less of something else.

Let me explain what I mean by the element of rigidity and how one manages the finances of a research council. It is rather like banking. Today at 2 o'clock, yesterday's call money was repaid, together with last week's seven-day money, last month's 30-day money and last quarter's 90-day money; and the bank has become more liquid to that extent. It can now re-lend that money, though not necessarily in the pattern which prevailed at the time of its original lendings, and by varying that pattern in terms of its liquidity, the bank helps to manipulate and manage the money market. On the terminal anniversary of any given grant, whether it be a grant of one, two, three, four or five years, the sum of money belonging to this year's vote falls free for redeployment, and the task of the research councils is to manage that situation rather as a bank manages its liquidity, so that it is not cut short at a time when the Government, like the solar sun-spot cycle, is going through one of their periodic phases of economy and retrenchment.

You do not want to get caught short of redeployable money at that stage. If you do, then you become subject to a device beloved of economists called "the multiplier". The effect is that with a very large amount of fixed expenditure and the modern habit of giving tenure to comparatively young people, it makes them almost unredeployable. I am not at all sure that it is a wise thing to do, but the Government have agreed to do it and that represents a very large fixed charge for our own internal employed people on the Medical Research Council. In fact, only about 35 per cent. of our annual revenues are available for grant, and the effect of that is that if we have, say, a 10 per cent. cut imposed on our overall expenditure, it will be a 30 per cent. cut (with the three-fold multiplier) on the freely redeployable money to keep new projects going. Of course, it is always the new and the exciting that gets nipped in the bud whenever there is a Government economy wave. The hungry sheep look up, and are not fed ", to quote Milton. The hungry sheep are the professoriate, who rely on the research councils for the selected component of their research budgets.

Under the old dispensation, we went primarily for a balanced research programme with a high degree of elasticity, so that on a request from a body like the DHSS to change course somewhat, you could do that by a supplementary grant here and a bit of attention to something else there, and the work got done without any very major commitments. But now that we are beginning to get a certain amount of research policy coming through from the DHSS, some of the elasticity goes out of it because they want to be able to see what we are doing for them and, in particular, they come under different pressures from the Department of Education and Science. For example, the current expenditure cut applied by the DES on the Medical Research Council is 0.1 per cent., but on the proportion which comes through the DHSS, it is a cut of 10 per cent.; and that is quite a serious factor. That is because the pressures in the DHSS are different from those in the DES, and ministerial zeal can, of course, have its embarrassments. For instance, we may be asked to put up a permanent establishment to research into something or other that happens to be the temporary enthusiasm of somebody or other, and then we are stranded with a fixed commitment for a long time to come.

"You pays your penny and you takes your choice", and we are masters of our own affairs; and, as I have said, all design is a compromise. But if I were asked to sum up the four years' experience of the post-Rothschild era on the Medical Research Council, I think I would say: "The mountain groaned and gave birth to a mouse". In the Latin original, it groaned and gave birth to a "ridiculous mouse ", but I am not going to take things quite that far. I do not think the present situation is ridiculous. It was not one which I particularly wanted to achieve, but we have learned to live with it.

All I can say is that if I had a free choice between the system as it was and the system as it now is, I think I should have preferred to stick with the system as it was, because in relation to the system man can occupy three statuses. He can be its master, its slave or its saboteur. I shall not now deal with the saboteurs, and I shall not deal with the slaves. But if you really know the system, and if you can master it as a skilled rider masters his horse, you can ride it where you want in any direction that you want it to go, because you are the master and the horse is your servant. It is a great mistake to think that if something is not working ideally you have got to shove the furniture around and reorganise everything at the top. The point is to get the people to master the system, and make it go where you want it to go.

6.1 p.m.

Lord PEART

My Lords, may I say to the noble Earl, Lord Halsbury, that I listened attentively not only to his humour, but to his wise words. After all, he said, it is not really so bad as it seems. I know that he spoke about a mountain producing a mouse, but I think he exhibited a realistic attitude to what we are debating today. After all, we are debating policy in relation to Rothschild, and we must concentrate our minds on that. This has been a fascinating and, for me, at least, an educative experience. It has been an example of the House of Lords at its best, bringing its all too often unacknowledged expertise to bear on a subject which, although vital to this country's future prosperity, is far too infrequently discussed. I know that we have previously had two days of debate, but I am glad that my noble friend Lord Kennet took the initiative here and I think he made a stimulating speech. He asked me a rather long list of questions, which I could not possibly answer in a debate of this kind. I will answer only one. He asked me about my responsibilities in relation to maritime research, and wanted to know whether my new position enabled me to fill the gaps. I would say, Yes, and I hope that in time we shall see the fruits of that. But that is another matter.

We have had excellent contributions from noble Lords with a vast range of experience; from esteemed academic scientists and professors—and, my goodness! I feel very humble, as a former young undergraduate, when I see the array of talent behind me and in front of me; I really shudder—and also, which is more important, from industrialists with a knack for achieving practical results. I am glad that we had contributions from those connected with that great and most efficient industry of ours—agriculture—and there were also two maiden speeches to which I will refer. I was very proud to hear some of the remarks made about agricultural research and the part that it plays in that industry. That is not to forget the speeches from those who may not be specialists. I think of the noble Lord, Lord Ritchie-Calder, and I remember years ago—if he will forgive my saying that it was years ago—his great series of articles, and how he tried to educate the British public to the importance of science and its application; and not only the public, but politicians and others, and sometimes even scientists who can get too wrapped up in their own little cocoon, or their ivory tower, pursuing academic interests. So we have had a tremendous debate.

I could go on picking out speeches, but I am happy to add my congratulations to those already given to the noble Viscount, Lord Sidmouth, and the noble Lord, Lord Baker, on their most interesting maiden speeches. As we all know, the noble Lord, Lord Baker, was a distinguished professor in mechanical sciences and head of the department of engineering at Cambridge University. What a delight his maiden speech was!—he need not apologise for it—and we shall look forward to hearing him in other debates in this House, not just those on science. I was also glad to hear the noble Viscount, Lord Sidmouth, who succeeded his father. I pay tribute to him. He is interested in science, in agricultural research, but he is also a practical farmer. I am glad that he served on the Agricultural Research Council. It is the best organisation that came out of the Ministry of Agriculture, and I am glad to say that I was the Minister responsible. But I am being rather modest! So I am happy to congratulate both of them on excellent maiden speeches, and I am sure that I echo the views of the whole House.

A number of criticisms have been made of the arrangements for research and development policies, so may I say straight away that the Government remain committed to the customer/contractor principle. Perhaps it would be helpful if I explained the reasoning which led the Government to take this decision, following the Rothschild Report in 1972. The Rothschild Report is sometimes construed—and, indeed, was so construed by many in the debate in this House five years ago—as representing a conflict between the Haldane principle and the customer/contractor principle. I think that this was unfortunate and is, in any case, misconceived.

At the time of the Haldane Committee's Report—and we are now going back a long time—some 50 years ago, scientists were relatively few in number. The Government machine was not well adapted to handle the kinds of advice which scientists and technologists can give; nor was it well equipped to influence the direction of their work. The need to which Haldane addressed himself was the need to get science mobilised and to give it adequate resources so that it might, at some time in the future, play a full part in national affairs. The Haldane principle achieved that aim splendidly. We now have a scientific capability of which we can be proud, and which is, indeed, the envy of many other countries. Let us not be too pessimistic in our comparisons with other countries, in Europe and elsewhere. We have great achievements, although of course we need to improve.

The need, to which Lord Rothschild addressed himself, is the need to ensure that this scientific capability is deployed in a way and on a timescale such that the nation can derive maximum benefit. That may seem trite. The customer/contractor principle is a device for ensuring, on the one hand, that the science community knows what the Government want to be done, and, on the other hand, that the scientists can tell the Government what is technically possible. What Lord Rothschild wanted to do was to encourage a dialogue between governmental customers and scientific contractors to the mutual benefit of both Government and science. The Government considered this aim both timely and ambitious, and consequently announced that they would adopt the customer/contractor principle. However, the Government stressed that they did not necessarily endorse all of Lord Rothschild's recommendations concerning implementation of the customer/contractor principle.

There has been, in fact, a considerable degree of flexibility in the way specific Departments have responded. Some Departments (such as the Ministry of Defence) were operating the customer/contractor principle well before 1971; others have had more difficulty in establishing appropriate mechanisms. It is perhaps too early to judge how effective some of these are. In debates on this topic, I think we should distinguish clearly between the principle—to which the Government remain firmly committed—and the implementation of that principle where we still have much to learn. I think it would be unfortunate to stimulate a major re-examination or reorganisation of R and D at the moment. Pulling up a plant to have a look at its roots at frequent intervals is not the best way of monitoring its health. A period of stability was promised, and that period should extend for a few years yet.

If I may turn to the research councils, in 1972 much concern was expressed over the consequences of reorganisation on the research councils and their staffs and, in particular, over the result of transferring part of their funds to Departments. In practice, the good judgment and good sense of the customers (departmental chief scientists) and the contractors (the research councils) has meant that the reorganisation has gone relatively smoothly. Where, as in the case of the Agricultural Research Council and the Ministry of Agriculture, Fisheries and Food there has been a 1:1 relationship, things have been easiest. Perhaps that is why they have been successful; I do not know. There has been a suggestion that the problem has been quite different from that of other research councils. Elsewhere, however, when a number of Departments are involved as customers, things have been much more difficult.

It is certainly true that there has been an increase in the number of committees, research liaison groups, research requirements boards and so on, and an increase in the amount of paper work. In so far as this has led to a greater understanding on the part of both the customer and contractor of each other's needs and problems, then the benefit has outweighed the cost. Nevertheless, the research councils are concerned at the cost, estimated at about £500,000 a year, which is an unwelcome addition to their commitment at a time of severe pressure on the science budget. Efforts need therefore to be made to keep the cost to a minimum. There is also a loss of scientific activity because scientists have to devote considerable time to justifying their programmes, arranging commissions and holding discussions with the customer Departments. This is necessary work but it can be reduced if progress can be made towards fewer, larger and more long-term commissions.

At the level of the research institute, sudden cuts in spending impose stresses which are sharply increased by the restrictions set by commissioned projects. These seriously reduce the ability of directors to adjust and to manage reduced programmes. Where these involve both departmental and Science Vote funds—for example, the Department of Education and Science—there is a danger that the only available field for economies is in the longer-term, and more basic, work which is not the subject of specific commissions. All research councils have been affected in this way in the past year and there is a continuing need, which the Government accept, to ensure that we do not, in the short term, make cuts which affect the long-term viability of the support for basic, curiosity-orientated science provided by the research councils.

The planning machinery set up by the Advisory Board for the research councils, although placed under great strain in this past year, has coped very well with this situation and I should like to pay tribute to their skill and understanding. Lord Rothschild, in his report, laid great stress on the need for discussion and on the fact that creative ideas are at least as likely to originate within the contractor's organisation as among the customers. The debates were given an added edge by the unfortunate necessity to cut public expenditure. I know that several noble Lords have referred to that point—among them the noble Lord, Lord Wynne-Jones, who thought how wrong it was to cut back public expenditure. I am glad, though, that the noble Lord stressed the importance of education, a point which was also taken up by other noble Lords.

We should not forget that during the past four years successive cuts in expenditure have influenced the conduct of research and development more than the administrative changes adopted as a result of Cmnd. 5046, and it would be a grave mistake to ascribe all the difficulties of these years to Lord Rothschild and his principle. Indeed, without these organisational changes things might well have been worse.

It is interesting that a recent French study of the effects of the Rothschild reorganisation, which was by no means uncritical, concluded: The customer-contractor principle works and the co-operation between the scientific bodies, in particular between Ministries and Research Councils, has been improved". The report also points out that biomedical research in particular has benefited from the greater degree of planning and from the switch, in the distribution of the Science Vote, from big science (which means high energy physics and astronomy) to little science (which seems to refer to everything else).

We should also remember that, in any case, the real test of Government intervention in this area, as was pointed out by the noble Lord, Lord Zuckerman, in the House of Lords' debate in 1972, is not, the way our Government scientists are managed but the choice of the major projects on which they are engaged". Scientists should become, as Lord Zuckerman suggested, an effective part of the policy-making machinery". I know that there are strong criticisms of the customer/contractor concept but, judged against this latter criterion, I think the establishment of effective Chief Scientists, and their staffs, in Departments represents a significant advance. It could be argued, however, that this by itself is hardly sufficient to meet Lord Zuckerman's point. Indeed one criticism of the way in which Cmnd. 5046 implemented the Rothschild proposals was that it left a "gap in the centre".

Experience has shown that there is some force in this criticism. In a memorandum to the Science Sub-Committee of the Select Committee on Science and Technology my predecessor, my noble friend Lord Shepherd, announced further organisational changes designed, in part, to meet the criticism. One important development was the establishment of a new committee, comprising Departmental Chief Scientists and Permanent Secretaries, under the chairmanship of the Secretary to the Cabinet, Sir John Hunt. The net effect of this is to make the Chief Scientists an even more effective part of the policy-making machinery. In addition, the creation of a Chief Scientist's post in the Central Policy Review Staff has been a further attempt to reinforce the centre. I refer to the appointment of Professor Ashworth.

A second major criticism of the Rothschild proposals has been that they were too much concerned with research and did not take sufficient account of development. Although Government support for basic science is, of course, qualitatively all-important in quantitative terms, it represents only some 15 to 20 per cent, of the total support given by Government to science and technology. It will probably never be possible, in view of the many other factors involved, to tell whether the adoption of the customer/contractor principle has helped in the Government's reaction to this state of affairs.

Since 1972 we have become more conscious of the complexity of the innovation process, which involves far more than research and development. We are also more aware of the manifold ways in which Government actions affect it. Most importantly, we are very conscious of the over-riding need to harness the work of Government research establishments to industrial innovation. The operation of the Research Requirements Boards of the Department of Industry and the increase in the commercial use of the facilities, not only at Harwell but also at the National Engineering Laboratory and other Government establishments, represent part of the Government's response to this overriding need.

More recently—and this is a further part of the organisational changes announced by my predecessor—we have set up, under my chairmanship, the new Advisory Council for Applied Research and Development. A number of distinguished and knowledgeable industrialists and others, from outside the Government service, have agreed to serve on this council. I am confident that they will enable us to derive greater benefit from the wealth of scientific and technological expertise which resides not only in the industrial and other research establishments of Government but also in the universities and research associations. Of course, if this expertise is to be fully effective it must be concentrated and selective. The work of the new council must form part of the developing industrial strategy of the country as a whole. Consequently, the work of ACARD, if I may call it that, will be linked closely with the parallel studies being undertaken by the sector Working Parties of the National Economic Development Council. I look forward to a close and fruitful collaboration between these two organisations, the one working, as it were, horizontally, looking at the R and D effort across the whole industrial scene, the other vertically at all aspects of particular sectors.

There is, I think, general agreement that the advisory board for the research councils has played a valuable and helpful role in co-ordinating the efforts of Government Departments, universities and the research councils in support of fundamental science. I hope that ACARD will play a similar role in support of the applied sciences and technology. I know that my noble friend Lord Kennet mentioned the European Economic Community. ACARD will also consider the question of our increasing involvement in the EEC. At present, as he probably will know, there is a unit, the Europe Industry and Technology Division in the Department of Trade which co-ordinates the interests of Government Departments in Brussels. The research councils, have, of course, their own channels to Brussels in addition to those provided by Government. I refer, for example, to the European Science Foundation, the Royal Society and other professional bodies such as the Federation of European Biochemical Societies. At official level this all works very well, but, as with anything new, it takes some time for all to get used to the arrangements.

I would not accept the criticism that we do not get our fair share of the EEC R and D budget but, equally, I would accept that we might do more to assist some sections in the United Kingdom community to be more aware of what is going on in Brussels. As I have said, this is one of those broad matters which falls within the terms of reference of ACARD.

It is thus clear that the Government are aware of the continuing need to keep the workings of the Rothschild proposals under review and of the necessity of ensuring that their implementation does not lead to excessive and unnecessary bureaucratic delays and expense. But I think it is also necessary to point out that research and development is inevitably subjected to many stresses and strains. We must resist the temptation to use the customer/contractor principle as a scapegoat.

My Lords, it is already clear that the benefits of the adoption of the principle already outweigh the costs in most areas. As the system becomes better known, and as the dialogue that Rothschild was anxious to foster becomes more established, these benefits will grow and the costs diminish. Even now there is a lot of good work that has happened that would not have happened had it not been for these changes. I will just quote one beneficial example of the working of the customer/contractor principle, namely, the geological work on the United Kingdom Continental Shelf undertaken by the National Environment Research Council.

Here the current programme undertaken by the Research Council's Institute of Geological Sciences is largely funded by the Department of Energy and it is running at an annual amount of over £2 million. The Department supplements this, when necessary, to enable extra surveys and boreholes to be undertaken and data to be purchased. This year the additional injection of money has been over £1 million. The work has been directed so that it has a close relevance to the problems of hydro-carbon exploration and exploitation, and particularly to the requirements of Government in this field.

This has led to increasingly close collaboration with Government and also with industry which provides valuable raw data, as well as a commercial approach, to the research work to the benefit of all parties. An additional benefit is that the expertise within the Institute of Geological Sciences is, as a consequence, being continually built up in, for example, the fields of seismic interpretation and micro-paleantology; and the other research activities of the Institute have benefited greatly from this aspect of the commissioned programme.

So, to conclude, I will not get myself involved in any controversy over what has been argued about today. I should like just to reiterate what my predecessor said to the Select Committee on Science and Technology last July. He spoke about the need for the Government to keep the working of these arrangements under close review. But we should remember that, although it is nearly five years since the White Paper was published, it is much less than that since the arrangements have been operating. I believe we have had an extremely constructive and stimulating debate. If I have missed the contributions of any noble Lords I shall certainly, where necessary, write to them on any particular point. In my view this has been a very good debate.

6.25 p.m.

Lord KENNET

My Lords, I am sure the House will be extremely grateful to my noble friend the Leader of the House for winding up the debate in so full and helpful a manner. He was right to remind us of the appointment of Professor Ash-worth to the Central Policy Review Staff, who in a sense fills the hole in the middle of the doughnut, consisting of a ring of scientific advisers in all Ministries standing in a circle but with a gap in the middle. I hope that between them they will fill it.

As to the French article which came, unlike this House and unlike my noble friend, to the conclusion after only three years that the customer contractor principle works, this was, I believe, an article in the House organ of the DGRST—the Délégation Générale de la Recherche Scientifique et Technologique. Ever since the days when I myself used to follow courses at the Ecole Polytechnique in a borrowed uniform, I have been aware of the oscillation between what Arthur Koestler called "French 'flu" or the Anglo-French love affair, and the opposite—the Anglo-French hatred affair—and it seems to me that at the moment we are heading swiftly towards the phase of the Anglo-French love affair, at least as regards the administration of research and development. I should like just once again to warn against it.

I hardly need to add my own voice to those which have been raised in praise and thanks to the maiden speakers, both practical and both bringing to this House experience from the field we are discussing, than which no sort of speech can be more valuable. This is not the kind of debate where the introducer has to say anything particular in winding up. Therefore, I should like to thank all noble Lords who have taken part in the debate, and I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.