Information Technology: The Alvey Report

HL Deb 18 January 1984 vol 446 cc1119-44

7.58 p.m.

The Earl of Bessborough rose to ask Her Majesty's Government what progress has been made in implementing the recommendations of the report of the Alvey Committee, A Programme for Advanced Information Technology.

The noble Earl said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. First of all, I should like to congratulate Mr. John Alvey and his strong team on their report, and also the Government, and especially Mr. Brian Oakley, the director of the programme, for beginning to implement the report with reasonable speed. I am glad, too, to see that my noble friend Lord Lyell is answering for the Government, since his father was one of my close friends and contemporaries in the house of a famous housemaster at what I must claim to be the most famous public school in Britain, even if the present Government, admirable as it is, does not contain so many of its old boys, except perhaps in your Lordships' House. My noble friend's father was, as your Lordships know, a very gallant noble Lord who won the Victoria Cross and I know how pleased he would be that his son is playing such an active part on the Government Front Bench of your Lordships' House; indeed, in the political front line.

The main reason I put down this question was that it seemed to me that our future economic development in many industrial sectors will depend on the success of the so-called sunrise industries. Having visited Japan and, indeed, Silicon Valley in California, I am sure that the Government are on the right lines in implementing this highly interesting programme. Already a number of firms involved in information technology—which for brevity I will call IT—are doing remarkably well in this country. Some are, indeed, booming. To mention only two out of a number of success stories, I see that Acorn Computers, built in Britain, has increased its sales by 200 per cent. in three months and that Sinclair is now selling in 30 countries.

Although I agree very much with Her Majesty the Queen in her Christmas message that computers themselves cannot generate compassion, the people behind them-their programers—are human beings and can or should have compassion. I am glad to read in The Times today that in so far as computers and word processors are concerned the Palace is determined to stay up with high technology. Clearly Britain cannot afford not to compete in these advanced technologies. We must keep in the forefront of this science otherwise the brain drain from this country will continue.

According to the Economist Intelligence Unit the Japanese Government are investing the equivalent of $500 million in their fifth generation computer program. In the United States, President Reagan's 1981 economic legislation provided incentives which are expected to encourage an additional $3 billion spend in corporate research and development over the present five-year period. Amidst this competition Europe, especially the United Kingdom, can I believe be confident of its ability to establish a leading position, given the appropriate infrastructure and the right targets to focus on. The alternatives are wide in a market worth perhaps $237 billion worldwide in 1980 and possibly three times as much in 1990.

Another reason for tabling this Question was because during the debate last July on engineering research and development, opened by the noble Lord, Lord Gregson, my noble friend Lord Cockfield told us that the Alvey programme had now been agreed and would be an important—indeed, I might say, unique—form of collaboration between the Department of Trade and Industry, the Ministry of Defence, the universities, the research councils, and industry. Yet another reason is because the noble Lord, Lord Shackleton, who much regrets not being with us this evening, suggested that I do so. He was of course chairman of your Lordships' sub-committee on remote sensing and digital mapping, whose fascinating report will soon appear. Indeed, there will be a reference to Alvey in it.

I also tabled the Question because I have been struck by the fact that many noble Lords on all sides of the House—some considerably younger than myself!—do not seem to have come to terms with the new technology, the new language and acronyms which it involves. That may not apply so much this evening as I see many noble Lords present who are quite familiar with this technology. However, in speaking in the Lobby I have found that some noble Lords are quite alarmed at the prospect of this particular industrial revolution. If we are to compete in the new world, the world beyond 1984, we must inform ourselves. Certainly, my eight-year-old grandson, who is the owner of a home computer is doing so.

As your Lordships know, the Alvey report explores how Britain can maintain its competitive position in this challenging new area. The launching of Japan's fifth generation computer programme marked a new epoch in IT. The Alvey programme aims to apply the technology in areas where existing systems have proved inadequate and to produce substantial increases in efficiency and productivity in information-dependent industries. The Alvey report recommends the first five-year programme to mobilise Britain's technical strength in IT through the kind of Government backed collaborative effort mentioned by my noble friend Lord Cockfield in July.

Perhaps the most important Alvey recommendation concerns funding and how the £350 million proposed expenditure should be allocated as between Government and industry itself. As my right honourable friend, Mr. Patrick Jenkin, the then Secretary of State for Industry, said last April, the Government considered that the recommendation that some projects should attract 90 per cent. Government funding did not secure a sufficient industrial commitment and could lead to the programme becoming isolated from industry's needs. The Government therefore decided that all industrial work should not be more than 50 per cent. Government funded.

But it was also made abundantly clear that the Government stood ready to meet its share of the cost of the programme at around £200 million—the money being provided by the Departments of Trade and Industry, Education and Science (through the Science and Engineering Research Council, of which Mr. Oakley was of course, the secretary) and—I underline the word "and"—the Ministry of Defence. I ask my noble friend on the Front Bench whether the Government are still happy with the funding arrangements, which of course are somewhat similar in principle to those of the co-operative industrial research associations, with whose work the noble Earl, Lord Shannon, who I am glad to see is speaking this evening, and I have been concerned. I shall be interested to hear the noble Earl's comments on the funding and also whether the research associations are to play any part in the programme.

Progress has clearly been made, as can be seen from the press notices issued by the Department of Industry on 7th November and the 5th December last. Your Lordships may have noted the projects mentioned in those notices. The first concerns the provision of a more efficient service to members of the public in their contact with the complexities of the legislative system—this being the aim of International Computers Limited—ICL—in partnership with the Department of Health and Social Security. I note that other partners in the study phase will include Logica UK Limited, which is another firm for which I have great admiration. Secondly, I note that Design to Product is the title of the system proposed by the factory automation division of GEC Electrical Projects, working with the artificial intelligence department of Edinburgh University and the National Engineering Laboratory at East Kilbride, and that this system will ultimately allow design concepts to be put in at one end and the product, including maintenance data, to come out at the other—human intervention being kept to a minimum. I am interested to see that this would do automatically most of the detailed design work, process planning, machining of parts and assembly. I am very glad to see that my noble friend Lord Nelson of Stafford, former chairman of GEC, is to speak. It will be interesting to hear from him how he thinks this project is progressing.

Thirdly, I note that the target of Racal Research is the provision of mobile information terminals which could bring a number of new facilities to road users and businessmen, and that these terminals will use all the enabling technologies established in the Alvey Report. I see that other consortium members for the study will be SPL, British Leyland, the Human Sciences and Advanced Technology Research Group at Lough borough University, as well as the Transport and Road Research Laboratory. The fourth project foresees the replacement of man under water for the inspection and maintenance of installations in offshore gas and oil fields. This is the project proposed by Marconi Avionics in association with Offshore Engineering Ltd.

These four projects were announced in November, and two further definition studies on 5th December; the first by Scicon Ltd., which is, of course, BP's computer systems subsidiary. I see that BP's Sunbury Research Centre is also to play its part and that it is hoped that this work will lead to a "thinking" computer—what the press described as a "super brain". The study will determine the technical and commercial feasibility of developing an intelligent computer-based alarm system, and that initial applications of intelligence systems are likely to be in the process industries; in oil recovery, in defence and in medical applications where speed and accuracy of response are vital. I was particularly interested to see that this system would present the information in an easy-to-understand form, which I am sure your Lordships will appreciate.

Sixthly, I see from the December press notice that word processors driven entirely by the human voice—which has been the ultimate aim in office automation for a number of years—will be the concern of the Plessey Company. They believe that the advances which the Alvey programme will bring in speech understanding and very large scale integration, in software engineering and intelligent knowledge based systems (known as IKBS) will enable them to make such a word processor at realistic price levels. I am glad to learn that smaller firms will also have roles to play in these projects in subcontracting to larger concerns. I hope there will be a market for all these applications and that potential users have been fully consulted. I believe the noble Lord, Lord Flowers, may have something to say on this, as I hope he will also have something to say on education and training, which is certainly a major problem.

On pages 27 and 28 of the Alvey Report is a list of recommended activities in the software engineering programme, both for immediate exploration and to be initiated early for medium-term benefit. Who knows? as Mr. Brian Oakley has I think said, the United Kingdom could become the software factory of the world.

Then on pages 35 to 38 is a considerable list under the heading of, "Build-up of the Infrastructure and the Research Community-, of suggested research programmes as well as demonstrator projects. I was also glad to hear recently that Britain hoped to play its full part in the European Strategic Programme on Research and Development in Information Technology, known as ESPRIT, and that this programme would be complementary to that proposed by Alvey.

I read over the weekend an article on ESPRIT in the American edition of the magazine of the European Community for January/February 1984, which described the pilot phase of the two five-year main phases costing the equivalent of about 1.3 billion dollars due to start this year. I have no time this evening to summarise this article but I have given a copy of it to my noble friend in case he might be interested and in case he has any comments to make on it. I hope that, despite EC budgetary problems, this programme will go ahead, for I believe a great deal of this work can effectively be done on an international basis. I would ask my noble friend the Government's general views on the programme, and not only how the announced projects as well as the ESPRIT programme are progressing, but how the two dovetail in with one another; and also whether any further schemes listed in the Alvey Report are now in the pipeline.

Finally, before I came into the Chamber I was told by the Librarian in your Lordships' House that for three months from next week there will be in the Library free access for noble Lords to a British information retrieval system called Texline which noble Lords are invited to use themselves. At the same time, I may say, the Librarian and his staff will be happy to instruct noble Lords. I beg to ask the Question standing in my name.

8.18 p.m.

Lord Flowers

My Lords, we are all grateful to the noble Earl, Lord Bess borough, for the way he has drawn public attention to important developments in technology. I am delighted to follow him today and not only because I agree with what he said. There could be few more important matters for us to debate now than the Alvey Report and its implementation. Information technology is a vital ingredient of many activities in industry and throughout society generally. There is no doubt that in Britain we have the talents to make a rich contribution in this field. We have done so from the earliest days of computing, from Babbage onwards, and we are doing so today. The efforts of the right honourable Gentleman Mr. Kenneth Baker and his colleagues—ably led by Mr. Brian Oakley—in the Department of Trade and Industry are greatly to be welcomed. It is one of the few really bright spots in an otherwise dismal economy.

As a scientist myself I have to say that it also provides one of the most exciting developments in science, making possible many things which would otherwise be simply unthinkable. Indeed, scientific research has itself provided a powerful stimulus to information technology through space research and through high energy physics at CERN, for example, both of which require the structured processing of huge amounts of data as well as through computing science itself and its applications to software engineering and robotics.

So your Lordships may take it that I am an enthusiast for the Alvey programme: but I am not an unqualified enthusiast. Perhaps the most useful thing I can contribute today is to suggest a few ways in which I think Alvey might he improved upon without any great increase in expenditure.

The Alvey programme was concerned with generation of the four enabling technologies so-called; those that are fundamental to all other developments: software engineering, about which I addressed your Lordships passionately and at length (you were very indulgent) in July 1981; very large-scale intergration of vast numbers of electronic circuits on the surfaces of very small chips; intelligent knowledge-based systems; and the man-machine interface.

The last is vitally important if a computer program is to be intelligible to anyone but the expert who wrote it—and perhaps even to him. I have with me a small program that I recently wrote myself. I shall not inflict it on your Lordships. It took eight pages to print it out. Only two pages contain the calculation that I wished to do; the remaining six are concerned with organisation and presentation so that it can be understood by the user. It is a fairly typical ratio of effort; and that perhaps illustrates the importance of the man-machine interface. As for intelligent knowledge-based systems, that is what is required to turn a word processor into a thought processor, if I may put it rather facetiously. It is the next big step in data processing.

Of course, there are other important areas apart from these four, and though one readily accepts that there must be a strong element of selectivity—for we cannot do everything—there is a danger of a certain rigidity of response by the funding agencies, especially by the Alvey directorate itself if it takes itself too seriously, to activities outside the gang of four, if I may coin a phrase.

Computer science does not divide itself in that manner. Certain topics cut across the boundaries, and others are not covered at all. I particularly regret the absence of any real mention of data-base management, which is fundamental, and in which there is need to stimulate much more effort in this country. I mean the ability to organise a large, complex data bank in such a way that the user can later address to it questions that were not in his mind when it was set up.

I also regret the absence of any emphasis on the use of declarative languages in the program for software engineering. These are languages which reflect the nature of human thought, rather than the mathematics of machine architecture. The Alvey proposals were a direct response to the Japanese plans for fifth generation computing systems. The Japanese include intelligent knowledge-based systems, which Alvey has taken up; but they also include the use of declarative languages, which it has not, except in the narrow context of IKBS.

Ironically, in Britain we are ahead of the Japanese in this field for the time being. There are some strong university groups. and I was pleased to see in The Times of 10th January that a useful step has been taken by Micro data Information Services of Hemel Hempstead. But our lead in the development of declarative languages will not be maintained for long unless the Alvey directorate lends its support. I hope that when he replies the Minister will assure us that the directorate stands ready to include data-base management and declarative languages in its programme.

The greatest deficiency, however, is to my mind that the programme is technology push, as the jargon has it, rather than application pull. Paragraph 1.7 of the report states: There are other matters to which attention should be given … with which we have not dealt … We believe it is particularly important to improve the capability of the users of information technology". Now, it is true that the Alvey directorate has given some attention to the need to stimulate user demand. It has under way—it was announced on 7th November last—its large-scale demonstrator projects, jointly with industry. These are intended to demonstrate, in real-life applications, the advances as they are made in the Alvey programme. Of course I greatly welcome that.

But more will be needed than mere demonstration if enterprises of all sizes and shapes are to be encouraged to invest in the products of the information technology industry, with all the consequences for the methods and organisation of the workforce that that implies. The recent boom in sales of video recorders and personal computers is encouraging, but one should not bank too much on it; they do not require any great user investment.

Your Lordships' Select Committee on Science and Technology is concerned about the same point in the related field of remote sensing, to which the noble Earl referred. The Select Committee's report is not yet published, but one of the conclusions is that it is not enough to emphasise the development of data handling technology; equal emphasis will have to be placed on user requirements, so that technology and applications go hand in hand.

It is often said these days that there is plenty of venture capital available for imaginative developments in new technologies. So there is; but usually the venture capitalist requires a quick return—four years or so. It seems to me that longer-term risks are involved if we are to see the rapid adoption of the products of Alvey throughout the economy. I therefore wonder whether it would not be possible to create a public fund that could be drawn upon by venture capitalists to back selected longer-term developments in the application of information technology—in the user sector—on condition that they double any money they draw from the fund out of their own resources. That would be a sharing of the risks in a familiar manner, entirely consistent, as I understand it, with the funding of the Alvey programme itself, and it would, I think, contribute greatly to the encouragement of applications, and therefore to the stimulation of user demand. I shall be very interested if the Minister can react to this proposal, about which I have warned him.

However, it is not enough to think exclusively of the home market. Here, the philosophy appears to be that the British user market should determine the programme of research and development. But the biggest market is undoubtedly to be found outside the United Kingdom, in the United States of America and elsewhere, and we should be addressing these markets if we really wish to challenge Japan and the United States of America. It is in this connection that I particularly regret recent lack of progress on the European ESPRIT proposals. We must hope that that will soon be put right.

Optical communications technology is an example of good indigenous research, where the demands of British Telecom have driven United Kingdom companies to invest in optical systems manufacture. Yet, foreign sales have been minimal, despite the large home market on which industry can recoup its development costs. A recent survey showed that this country has the biggest installed base of operational optical fibre systems per capita, with the United States of America second, and Japan third. Production capacity is in the reverse order—a clear indication that Japan has an eye to world markets.

Again it seems that the Government could help by generating more venture capital for long-term growth. The Government could also give more support to industry to sell abroad, in the form of guarantees and insurance cover on major projects. It might be said, I suppose, that the absence of such support was the main reason for STC's inability to cover a 10-year guarantee on the transatlantic optical cable in competition with the mighty Bell Telephones.

The British electronics industry has been dominated for years by defence requirements, and this can distort the pattern of research and development. An example perhaps is the £50 million Plessey investment in analogue gallium arsenide devices for defence radar, compared with about four times that investment by Japan in digital gallium arsenide for the commercial VLSI market. Of course there is a vast technical expertise available from the Ministry of Defence. But the dominance of defence personnel in the administration of the Alvey programme on VLSI suggests that with the best will in the world we may simply misjudge commercial market requirements. I hope the Minister will assure us that this will be watched.

My final point concerns manpower. For some years there have not been many opportunities for industrial employment in the fields of software engineering and, more particularly, of electronic engineering. Many of the best graduates in these fields have therefore sought their fortune outside the United Kingdom, especially in the United States, and the universities have been contracting for this and other well-known reasons.

Now there is a shortage and we need to expand again. We should really be aiming to educate and to employ at least twice as many graduates over the next five years if Alvey is to bear fruit within a decade. This was the reason for the Government making available to higher education under the Alvey programme new posts for young lecturers in information technology and some additional student places.

The first allocation of posts has mostly been filled by now and we are preparing ourselves for the second tranche. The quality of the applicants for staff posts, although respectable, has not been of the highest compared with other fields, partly because the good people tend to be abroad and partly because university salaries in this field are not competitive with industry, faced, as it is, with a shortage. Somehow we have to overcome this problem. I was glad to hear only today of the success of the University of Warwick which, with a new chair, endowed by Lucas Industries, has succeeded in attracting back from California Mr. Graham Nudd, a leading industrial authority on VLSI. Partnership with industry is vital if we are to see more of that.

University research in information technology is also suffering at a time when it should be flourishing as never before. Industry desperately needs more advanced IT research, to provide trained graduates and to keep the staff up to date with a rapidly advancing technology. In spite of rapid growth, the information engineering committee of the Science and Engineering Research Council, which is our main source of funds outside the Alvey programme, is badly under-funded in this area with many alpha quality applications having to be turned down. I hope that the Government will continue to bear in mind the role of higher education in advancing information technology and will heed the advice of the Advisory Board for the Research Councils and of the Science and Engineering Research Council itself.

The Alvey report, in paragraph 2.20, says: Also vital is a substantial programme to generate more human resources to develop IT products and to apply them in all areas of industry. The supply of skilled manpower in this respect is totally inadequate for current and future needs". I was interested in this respect to see a letter of 3rd November last from the Director General of the CBI to Mr. Kenneth Baker which suggested setting up a committee similar to the Alvey Committee to examine the problems of manpower supply for the IT industry, both manufacturers and users, following implementation of the Alvey and ESPRIT programmes. I regret to say that Mr. Baker's reply was not very encouraging. With or without that particular move, unless there is an adequate supply of trained manpower at all levels, Alvey will be yet another brave venture that failed through lack of resources.

8.34 p.m.

The Earl of Shannon

My Lords, it is particularly timely that the noble Earl, Lord Bess borough, should draw our attention to the subject of the report of the Alvey Committee and to inquire of the Government how they are getting on with implementing the recommendations. Although I speak from an entirely industrial rather than scientific point of view, I echo the remarks of the noble Lord, Lord Flowers, in welcoming this short debate, first because of the supreme importance of the subject. It far transcends almost all the other topics currently occupying so much Government and public attention. Secondly, and arising from the first, please, what is being done? How is it progressing? I am sure that your Lordships will take the greatest interest in the response from the noble Lord, Lord Lyell.

I shall start, if I may, with just a few comments on the report itself. The importance of the subject was very self-evident and well expressed in the report. If we are to consider previous revolutions in industry, they may perhaps be divided into three groups—energy, materials, and control. First, man was dependent upon his own muscle, then the harnessing of animals, then through steam and internal combustion progressed to fission and probably, in the not too distant future, fusion. Marching alongside came the developments in materials—stone, bronze, iron and steel—first in minute quantities and then in massive amounts with the introduction of blast furnaces and continuous casting, as well as the commercial process, at the end of the last century, for producing aluminium economically from its ore.

Each development produced a complete change in world economic power and favoured those nations which were in there fighting at the forefront of the new technology and relegating to the backwaters of history those which were not.

Revolutions in control tended perhaps to come later but with no less an impact. At first, man relied upon himself, watching and reacting, and still does in many cases, as we see technicians sitting at consoles, watching dials and reacting with switches accordingly. When, some centuries ago, we had an atmospheric engine running at one or two strokes a minute it was perfectly possible to operate the valves by hand. The development of making the machine open and close its own valves now meant that engines could run at speeds in excess of man's ability to operate the valves. But, throughout all this, man had to rely on the one thing on which there had been little or no advancement since the invention of the printed word, namely, his own intelligence and store of information usually gained from experience. Now, suddenly, we are faced with a revolution of quite astounding magnitude in the control sector. It has been rightly said that in the industrial revolution which we are currently experiencing information will be as important as was steel to the previous revolution.

The chip provides man with a knowledge and information bank at his fingertips, affecting his ability to control industrial processes. This transcends anything he could have dreamed of only a decade ago. It also presents a technology jump just as great as informing the operator of the atmospheric engine, to which I have referred, who operated valves once or twice a minute, that he would be required to speed this up to 5,000 times a minute, as does an ordinary motor-car engine today.

I have said all this to emphasise in the simplest possible terms why it is critical for British industry to be in the battle and fighting and why the research organisations with which I am associated welcome the report of the Alvey Committee for recognising this most important fact and making constructive recommendations. I do, however, have one small criticism to which I shall refer later. I should like now to refer to the operation of the schemes suggested in the report. As the noble Earl who has asked the Question has invited me to make comments on the proposed funding arrangements, I must do my best to cover this matter, too.

How refreshing it is to find in this report recommendations for concerted collaborative action and also a realisation that this is no good unless done with a view to making profitable use of the results in industry; and, above all, as to the need to appoint one highly capable person, not a nebulous transient group, and to give him the necessary facilities and to hold him responsible to see that the job is done. The Japanese are past masters of the maxim of the concentration of force. We have many examples of this. For instance, they decided that motor cycles were "for them", and they went out and they took the market right out from underneath the noses of ourselves and the Italians. There are many other similar examples of this concentration of force to one defined end of which I am sure your Lordships are only too well aware.

I turn to the question of funding. There has to be a carrot to get the donkey to move at all, and, clearly, in the national interest Government must provide some cash incentive. I am not qualified to comment on the appropriateness of the £350 million proposed, as there are so many other factors involved apart from the vital necessity of encouraging Britain to be in the ring and fighting with the best support that we can afford. As regards the public contribution of two-thirds and the proposed programme contained in Table 6, I have no substantive quarrel, but I do not envy the poor director his responsibility for the evaluation of proposed projects. On a personal note, I can only think that they have chosen the best possible chap to do it, but I still do not envy him his job. Of course he will have, as is suggested in the report, the help of the Electronics and Avionics Requirements Board, possibly reconstructed, and SERC committees, which I sincerely hope have been reconstructed for this purpose.

Arising from the report of the noble Lord, Lord Rothschild—Cmnd. No. 4814, debated quite a few years ago in your Lordships'House—and the adoption of the customer/contractor principle, the Department of Industry evolved what I think is the best system, through the requirements boards, for what is a totally inexact science; namely, evaluation. The Commission of the European Communities discovered this at their recent large seminar last autumn when, in spite of the learned papers presented and all the academic and pseudo-academic pontification, no really clear criteria for pre-evaluation of proposed projects emerged, any more than anyone can have an exact science guaranteed to forecast the winner of the 3.30.

The requirements boards' system of using the informed hunches of those actually concerned with the sharp end of the struggle—namely, the industrialists—is clearly the best system so far devised and, additionally, encourages the provision of matching finance from industry. It is a very retrogressive and much to be deplored step by the Department of Industry to downgrade requirements boards from their original executive function to a purely advisory one, and I hope that the same fate will never befall the director of the Alvey directorate.

I mentioned the restructuring of the SERC committees, which is also strongly advocated in the report. Here I would observe that one must consider what one regards to be the philosophy of SERC. If, as I (admittedly from an industrial point of view) most cynically believe, those committees appear mainly as groups of academics handing out to their colleagues interest and curiosity money without any form of monitoring, and if that is what is wanted, all well and good; so be it. But if you want SERC-funded work to have industrial relevance, then these committees must have very strong industrial representation and not just a few token members, as is, I think, unfortunately the case so often.

If I may, I will conclude with my one criticism of the scope of the report and attempt to make some helpful suggestions. When your Lordships heard of the publication of this report, and more especially when the noble Earl put down his Question, what did your Lordships do? Your Lordships went to the Printed Paper Office to ask for and receive this little blue booklet. Pause for a moment and consider. Your Lordships were seeking information, and you received it through the traditional and well-established system which has existed for centuries and is still the major communicator today—the printed word.

Is it not surprising that in the whole of the report there is only one reference which I can find to printing, that being on page 30? Yet it is the existing established system with which the report admits the new system will have to co-exist. Furthermore, I can find no reference to the printing and publishing industry having been asked to contribute to or advise the committee.

The report advocates a step by step change in advanced information technology, yet apart from paragraph 4.3.3 no mention is made of co-existence with the existing system. Surely it is vital that there should be harmonisation between those industry sectors which supply the "enabling technologies'' and the user sectors of such advanced information technology? Without a proper understanding of user needs, coupled with a dialogue between the user industries and the generators of the enabling technology, I have great concern that the Alvey initiative will be lost and will fail to produce a real change in the United Kingdom manufacturing and service industries.

As I have said, one of the most relevant user sectors of AIT is that which embraces printing and also packaging and publishing. There are between some 6,000 and 8,000 firms in this country engaged in printing and publishing, employing some 250,000 to 300,000 people. Printing and publishing impacts on every aspect of life for us. Its services are required by such diverse organisations as supermarkets and that recording the very words spoken in your Lordships' House.

These British industries are among the largest in Europe and are in the world leadership class. Yet I wonder whether your Lordships realise how much of the United Kingdom requirement for book production is carried out abroad. Highly respected British publishers, working with talented British authors, are having to look to Singapore, Hong Kong, Spain, Italy and the Comecon countries. The average consumer here probably thinks, quite wrongly, that his book is set, printed and bound in Britain.

The existing technologies are freely available and are currently installed in cheap or subsidised areas around the globe. A real breakthrough in the application of advanced information technology in this sector would allow this country to regain, for the right reasons, work for a significant part of our manufacturing industry. However, should we be lazy and allow special interest groups to obstruct, or fail to make this quantum jump in the application of new technology, we must resign ourselves to the further contraction of not only this but other basic and important industries, to the benefit of others.

Although the report is concerned with information technology, it seems to me that there has been a serious breakdown in communication, not only by the authors of this report, but also by those of that other excellent Cabinet Office report, Making a Business of Information. This breakdown has been with the major communications sector in this country—namely, printing and publishing. This is a pity and one which I hope can be repaired by contact with one of the organisations with which I am associated. This is PIRA, the research association for the printing and publishing industry in the United Kingdom, which is perhaps well known to many of your Lordships. As the Minister knows well, it like all the other research associations, is dedicated to the advancement of British industry by the introduction of new technology. It is well supported by the progressive companies in its industries, and at its instigation and resulting from a meeting held a few years ago in a committee room of your Lordships' House, the International Electronic Publishing Research Centre was born. This represents a very significant international community of advanced information technology users, years ahead of Alvey, and I am surprised that it was overlooked.

May I urge Her Majesty's Government and the Alvey directorate to open a dialogue with these organisations with a view to establishing a demonstrator project in the United Kingdom related to print, alternative media and the application of advanced information technology in these sectors.

I understand that there is already an embryonic proposal available for such a demonstrator project to create a totally automated printing and multi-media production plant, and I know that strong financial support from the progressive firms in the industry has been intimated to match any public finance. Such a demonstration project would give a sense of direction to the AIT manufacturing sector in this country and produce the necessary harmonisation between the user and manufacturing sectors.

I have trespassed for far too long on your Lordships' time. The subject is critical to the very survival of all our industry and yet I have only been able to deal with just that one sector. This proposal could be paralleled in many other industries. The research organisations with which I am associated applaud the initiatives of the Alvey Committee and look forward to playing their part in their ultimate achievement. Like the rest of your Lordships, I am full of expectancy as regards the response of the noble Lord, Lord Lyell, to the Question put by the noble Earl.

8.55 p.m.

Lord Nelson of Stafford

My Lords, I am extremely glad that my noble friend Lord Bess borough has raised this Question tonight, because I agree with him that this is an extremely important programme, and I should like to congratulate him on the very clear way in which he summarised it for us this evening. It is important to remind ourselves that it is still very early days in this programme. It has been in being for only a few months; it is only just beginning to get under way and it is to be hoped that it has five years to run. However, that does not detract from my welcome for the opportunity to review progress; and I think it is very appropriate that it should be done at this stage.

I suppose that I should declare my own interest as my firm is a participant in this programme, but the noble Earl has already referred to that and has suggested that I might comment on progress in that particular sector of the work. That I shall do in a few moments. However, I should first like to emphasise to your Lordships how much I welcome the work of the Alvey Committee and, of course, its recommendations. I should like to congratulate the Government on accepting these recommendations in the way in which they have, and particularly—and I emphasise this—on accepting the recommendation to establish a directorate to supervise the work. I am sure that this has made a significant contribution to the progress which is already being made, and my noble friend, Lord Lyell, will be telling us about that very shortly. I am sure that this directorate has played a very important part in getting the programme under way and will play its part in keeping it under way.

From observations I have heard from the people involved, they have already expressed surprise and are expressing surprise at the speed with which decisions are being taken, and that arises from the decision to adopt this recommendation of a directorate. As a participant in the programme, I should also say right from the start that in my opinion the programme has made a very good start and progress to date is very encouraging.

I listened with great interest, as I am sure your Lordships did, to the observations made by the noble Lord, Lord Flowers, to his suggestions for improvements in the programme and also to his encouragement of private venture capital and his emphasis on the need to ensure an adequate flow of trained personnel to see the programme through. I agree with all these suggestions wholeheartedly.

I turn to the project which my noble friend Lord Bess borough mentioned in which my own company is involved, which carries the rather inappropriate title of "Design to Product". First, may I explain that this is a system which takes a specific product project right through from the early design stages to manufacture and exploitation. It involves all the latest technologies of computer-aided design, integrated computer-aided manufacturing and flexible manufacturing systems, all of which are part of this new technology and all are involved in this programme. I believe that this will be an extremely important part of the Alvey programme because it is the only project which is directly involved in applying these new IT technologies to manufacturing and I think that the application of these technologies to manufacturing industry will play a very important part in improving our competitiveness in world markets. I welcome this particularly. It will be an interesting programme. It is only at this stage in the project formation study phase: the gathering together of the various participants. It will include a number of different firms, as well as my own, and also four different university teams and the National Engineering Laboratory, which my noble friend Lord Bessborough already mentioned.

When the project phase is complete, which should be very shortly now, the team will have been assembled. The Alvey directorate will then decide whether the programme should proceed (I hope it will). It will then proceed in two phases: the first 2½ years would be devoted to a pilot project, and a project has already been identified, not in GEC but another company; and in the second 2½ years there will be the development of a demonstration project. Over this period arising from the implementation of the programme a large number of different technologies will emerge which will be applicable to many different manufacturing industries throughout the country. I can only say that those who are already involved in the programme are extremely encouraged and enthusiastic about it.

Apart from commenting on progress in this part of the programme, I should like to make three observations related to the advantages already coming from the Alvey programme.

First, the co-operation envisaged between the DTI, and the Ministry of Defence, research councils and industrial firms is already taking place. The getting together of these groups is extremely important and is being fostered and developed by the Alvey programme. I would add that the financing arrangement whereby it is 50 per cent. funded from industry and 50 per cent. funded from Government is good because it ensures that everybody is an interested party in achieving success out of the programme.

The second point I should like to make to your Lordships is that this programme involves collaborative research arrangements between competitive firms within the same industry. A number of people have been talking about such collaboration for several years, but it is difficult to bring about because of the competitive nature. If we are to foster our resources in this country, particularly in research, we cannot afford to squander it in too many different places doing the same thing. Co-operative research is, in the opinion of many researchers, the right answer. This has now been demonstrated by the Alvey programme. We are getting co-operative research established with teams from competitive industries working together in the pre-competitive research phase. It is already working and I hope we shall see it developing in many other fields other than information technology.

I also emphasise that arising out of that co-operation people in these different competitive firms are getting to know each other. As a result of getting to know one another they find they are not really such bad chaps as they thought they were and they find there is mutual advantage in exchanging experiences and even technology. This advantage will I believe progress further—not only in the pre-competitive phase. With people knowing each other and a knowledge of what each has to contribute, we may well find that co-operation may develop even in the product development phase which could greatly help us to compete in the world market in this highly competitive field.

The third point was touched on by my noble friend Lord Bess borough; that is the European ESPRIT programme. This is an important adjunct to the Alvey programme covering the whole of Europe. As a result of having the Alvey programme in being and as a result of the collaborative research, we in this country are now in a very much better position to collaborate in the ESPRIT programme in Europe, but not only to collaborate but receive maximum advantage out of it. That is a further advantage which has been demonstrated by the progress made to date.

There is only one further point I should like to make as the hour is getting late. That relates to the report which the Science and Technology Sub-Committee of your Lordships' House recently issued on research and development in the engineering industry. I had the pleasure of serving on that Committee under the chairmanship of the noble Lord, Lord Gregson. It made a recommendation which in the opinion of the Committee was particularly important. That was that in certain sectors of British industry which are of particular importance to the economy of the country a national strategy should be established related to world market opportunities for that industry. Industry and Government should be involved together in determining that strategy, in which all the resources of industry, of Government establishments, public purchasing, the Ministry of Defence and the universities, could be harnessed to achieve success in that important area of British competitive industry. Many of those people are not in touch with the marketplace. They do not know what the opportunities are, but given the opportunity to see a strategy or an objective they could participate to the full in its achievement. This is just what the Alvey programme has done for information technology.

I was most interested that the noble Earl, Lord Shannon, emphasised the importance of the co-operative approach, the gathering together of resources that are needed for a given objective. This is what Alvey is doing in information technology and it is the sort of approach which your Lordships' Science and Technology Sub-Committee had in mind for other spheres of British industry important to our economic future.

I conclude, therefore by suggesting to my noble friend Lord Lyell that the Science and Technology Sub-Committee recommendation could be met by the equivalent of a number of other Alvey reports which could relate to other sectors of industry and perhaps achieve the same sort of results as have been achieved to date and will be achieved in information technology under the Alvey programme. I strongly urge that Her Majesty's Government should give this serious consideration.

9.8 p.m.

Lord McIntosh of Haringey

My Lords, I join with other noble Lords in paying tribute to the noble Earl, Lord Bess borough, for his foresight in raising this Unstarred Question before your Lordships' House. I congratulate him, too, for he must feel very satisfied that he has attracted so many distinguished scientists and industrialists to participate in the debate. I am sorry that it has to come down to me. I feel particularly inadequate, as a former employee of the General Electric Company, that it has been my fate twice in the last three days to participate in debates in the presence of my most senior employers of past years.

The consensus of what I have heard tonight, what I have read and my understanding of the issue is that there is going to be very little disagreement about the virtues of the Alvey Report and, indeed, many of the actions the Government have taken to implement it. Indeed, I would say that there are many ways in which the Alvey Report has broken new ground not just in advanced information technology but also in ways of dealing with the relationship between Government, science and industry. For a non-interventionist Government, I think that this Government have to be congratulated on the extent to which intervention in business has arisen from the Alvey Report. The degree of recognition of these enabling technologies, and the part they will play in future profit-making business—profit not just for the country but also for the businesses concerned—is very welcome indeed.

It has also been possible, as a result of the report, and of the Government's recognition of it, to break new ground in the way in which the Civil Service is dealing with the outside world. I think that the Prime Minister in her closing address to the Information Technology Year in December 1982 hit the nail on the head very precisely. She said that what we wanted was the small teams of really expert people joining with the generalists in the Civil Service to produce practical results. That certainly has been the experience of the Alvey Directorate, and that certainly seems to be producing the kind of results which she anticipated.

I also think it is valuable that the Government have accepted the idea which Alvey put forward of a five-year programme. Indeed, in some of the technologies it is longer than a five-year programme. Those of us who have dealt with Government over the years have constantly found the difficulty of getting departments to commit themselves beyond one year. There was always the person from the Treasury sitting in the corner of the room whenever you negotiated, who was going to say that it was impossible for a spending department to commit itself beyond a single year. But there seems here to be a genuine commitment to a five-year programme of research expenditure which is extremely welcome. The final unalloyed pleasure which I have in welcoming the report is the recognition in the report of the need for technological education at all levels—in universities, in polytechnics, and indeed in adult education as well. I could wish that that recognition of educational needs were as well applied in other technical areas as it is here.

Now, as the noble Lord, Lord Lyell, would expect, I then come on to all the qualifications to my admiration for what has happened. First of all, the Alvey Committee did not recommend the broadly 50–50 or 60–40 funding which has been adopted by the Government. It recommended, at any rate at the earlier stages, that there should be a very much higher level of funding by Government and that industry should be required to put in very much less. This is not a matter of political theory or interventionism or collectivism against individualism at all. This is a matter of the kind of research project that you are going to get out of a programme of this kind.

Inevitably, if in industry the companies of the noble Lord, Lord Nelson, and others are going to contribute 50 per cent. of the initial research costs they will want to see that their own particular interests are represented in the research programme. And this is not going to be what Alvey anticipated. Alvey was talking about something comparable to the Japanese fifth generation computer programme, which was a directed programme of research in which the director of the programme went out and said: "These are the things which we believe should be the first priority for research"—rather than waiting for the General Electric Company or Logica or others in industry to come forward with their own propositions and then trying to reconcile them and putting them into some sort of coherent programme. So it does really matter what you do with the funding of the earlier programmes, although inevitably as the years go by it will be right and proper for industry to contribute more and more to the funding of programmes.—

Lord Nelson of Stafford

My Lords, I wonder whether I might intervene to make one point on that aspect because I think it is rather important. The programme which is handled by a particular company—such as my own for instance—involvesa large number of other firms. It is not just one company and one programme: each of those companies will be contributing towards the 50 per cent. so there will be a wide spread of interest in industrial involvement as well as the Government involvement.

Lord McIntosh of Haringey

My Lords, I entirely accept what the noble Lord has said, and indeed I was going to refer with admiration to what he had said about co-operation between industrial firms. It is certrainly true that there is a wider spread of funding than would be the case if only a single industrial firm were concerned. However, that still does not meet my basic point, which is that the Japanese and Alvey anticipated that there would be a single origin of a sense of priorities about the early programmes. It is still the case that programmes are being put up by industry, either individually or collectively, rather than being demanded and directed by the people in charge of the programme.

Then it is fair to qualify one's admiration by saying that. although Alvey does anticipate a considerable development of technological education, these developments are taking place at a time of very severe cuts in higher education generally, including technological education. There is a conflict here which the Government are going to have to explain. If one moves aside from university education and adult education, which is involved in the retraining of people in information technology from the skills they have acquired in earlier life, that is only one per cent. of the education budget and has been deliberately kept down by this Government and deliberately starved of resources by this Government. There is a conflict between Government policy in other areas and their acceptance of the Alvey recommendations.

There are also some questions, which are simply naive questions, which I should like to put to the noble Lord, Lord Lyell. We are, after all, in the tenth month of the first year of the Alvey programme and it is fair to ask: has the funding anticipated for this year actually arrived? I understand that some of the participants—and we are talking now about the Ministry of Defence, the SERC and the Department of Trade and Industry—have put their money up front and there has been no problem about it. But is it true that all the funding which was expected has yet arrived?

The noble Earl, Lord Bess borough, gave us the opportunity to understand more fully the nature of the contracts that have been let. But I am bound to ask: how many contracts in total have been let, as compared with what was anticipated for this first year? Also, what was the value of those contracts in relation to the total funding which Alvey proposed for the first year? Are we expecting to have the full expenditure which was envisaged by Alvey at the end of this first year of the programme?

The noble Earl, Lord Bessborough, referred to some of us as being "alarmed by the future"—I think that was his early phrase. I am not alarmed by the future or by the prospect of this development in advanced information technology. I believe that unless we take this with the seriousness which Alvey and his committee gave to it, we are very rapidly going to lose out in industry and employment for our people.

May I give one example of the recent experience of Logica in the town of Swindon? Logica has started up there an information technology-based industry in the premises of a former children's clothing factory which closed down in 1979—my noble friend Lord Stoddart will correct me if I have this wrong. That factory originally employed approximately 200 people and had an annual output of some £3 million. There are now about 200 people employed in the same premises working in the information technology area, and their monthly output is £3 million, 20 per cent. of which is going for export. There are opportunities for employment in advanced information technology, there are opportunities for exporting; and there are opportunities which will eventually—though not entirely—play some part in the fight which we have to make to come back to a full employment society, which is the only decent society in which any of us would really like to live.

At the same time, what advanced information technology is doing is changing the nature of people's work. That is very well recognised in several of the initiatives proposed by Alvey. For example, the man-machine interface programme is very much concerned with that and, unless we take that with the seriousness with which Alvey has imbued it, we shall not be ready to recognise those changes in the future of work.

So the general reaction that I wish to make in repeating my thanks to the noble Earl, and my appreciation of the contribution of other noble Lords, is that we are certainly moving in the right direction. But, please, can the Government assure us that future activity of the Alvey directorate will be a directed programme, rather than a programme responding to the particular needs of those who are putting forward projects?

9.22 p.m.

Lord Lyell

My Lords, I think your Lordships will agree that we have had a fascinating and most illuminating debate this evening. Indeed, all of us are most grateful to my noble friend Lord Bess borough for asking this Question. I personally am very grateful to him for his very flattering comments at the start of his remarks, but also I have to add a great deal of humility. I commend the fortitude of the noble Lord, Lord McIntosh, in finishing his remarks. We shall see which of us is king of the croaks. Certainly I must be one of your Lordships with the most humble scientific qualifications, since at the age of 15 I was deemed too foolish to do science, even for 'O'level, at the famous college which was referred to by my noble friends, and was streamed towards the languages area as being more fitting for my talents.

The Government welcome this debate this evening and the very great interest which your Lordships have shown in the Alvey programme. I am sure that the high quality of the debate this evening is a very great reflection of the considerable experience and expertise in this area which is endemic in your Lordships' House. Alvey is an important initiative which will affect a key area of our industrial future, as was so succinctly put by the noble Earl, Lord Shannon. In launching the programme, the Government indicated the very high priority which they attach to information technology. I would briefly remind your Lordships of the main features of the Alvey programme, which was announced to your Lordships last April by my noble friend Lord Trefgarne.

The programme will support collaborative research, which was referred to by my noble friend Lord Nelson. This is in four main enabling technologies, each of them key areas of research for advanced IT. The four areas are software engineering, the fascinating VLSI—which was totally foreign to me before this evening and which I understand is very large-scale integration—man-machine interfaces, about which I shall have one or two words to say later, and IKBS, the intelligent knowledge based systems.

Your Lordships have raised the issue of funding and at the outset I would stress that the Government are ready to commit up to £200 million towards this programme over a five-year period. Industry's contribution, for which the Government are most grateful and which they regard as most important, will be around £150 million. Research which is carried out in the industry will receive 50 per cent. Government support. Research by academic institutions will be 100 per cent. supported.

The objective of the programme is to mobilise the United Kingdom's substantial research skills in a combined effort between industry, academic institutions, Government and other research establishments. This concept of a collaborative effort is a new departure for the United Kingdom, at least on a scale as large as Alvey, though it has been practised successfully overseas by our competitors—particularly, as we heard from your Lordships earlier this evening, in Japan. There is a corresponding European programme, ESPRIT, which is under discussion in Brussels. There are a number of collaborative ventures in the United States of America. In establishing the programme in this country the Government have accepted a responsibility for providing a framework for collaboration in the area of pre-competitive research, where it is of the utmost importance that we should harness as effectively as possible all our available expertise. This is fully consistent with open competition when it comes to exploiting research in the market place. Firms which take part in the Alvey programme will be completely free to compete when exploiting the research.

However, we have deliberately avoided setting up a large bureaucratic organisation full of civil servants and those who are remote from industry. Instead there is a small team working closely with industry which is making full use of existing machinery. I was particularly grateful for the comments and kind words of my noble friend Lord Nelson of Stafford. A small directorate has been set up to manage and co-ordinate the programme under Mr. Brian Oakley. This directorate is staffed by personnel from the Department of Trade and Industry, the Ministry of Defence, the Science and Engineering Research Council and—I regard this as particularly significant—from industry. The fact that industry is providing staff, and paying for them. reflects the fact that Alvey is a partnership between all those concerned. The Government are grateful to those firms who have provided staff for the Alvey directorate. I view the close co-operation between the different Government departments in this area as a very important feature of this programme.

The Government have also established a small steering committee to oversee the development of the Alvey programme. This will take decisions on the balance of effort between different parts of the programme. It will also ensure that it remains on course. This committee is chaired by Sir Robert Telford, the chairman of Marconi, and contains senior industrialists. The committee combines wide experience of the information technology industry with an understanding of some of the most important areas of current research. The Government are very grateful to Sir Robert and his committee for their important contribution to the programme.

As all noble Lords who have taken part in this debate will be aware, Mr. Brian Oakley took up his post on 1st June and began recruiting staff at once. The directorate got fully under way last autumn. The first task was the important one of formulating the strategies for the individual technologies. The need for a strategy arises from the fact that Alvey, unlike most other Government programmes of industrial support, is a directed programme aimed at achieving specific technical objectives. The process of specifying these objectives and designing a route to achieve them is no simple task but one which has to be gone through, given the large amount of money at stake from both Government and industry and the even larger commercial opportunities which the Alvey programme stands to open up. The directorate, and the steering committe, have therefore rightly concentrated their initial effort on getting the strategy right. I am convinced that this has been the right course.

I am very pleased to be able to announce that the strategy for the programme has now been completed. Strategy documents for three of the four main areas of technology have been drawn up and have been published. These are available from the directorate in the Department of Trade and Industry. The directorate's general approach to formulating the strategy has been to work closely with industry in order to reflect industry's own priorities and to tap all the relevant expertise in Government and academic institutions. The aim has been to reach as wide a consensus as possible on the technical goals of the programme. In general, this has been achieved. But, of course, the experts can and do frequently disagree, particularly in an area subject to such rapid development as IT. But where necessary the directorate has not flinched from making what were very difficult choices.

The strategy is intended to provide a framework and a direction for the programme. It will serve to identify the specific projects which need to he tackled, but it must not be a straitjacket. IT is probably the most dynamic industrial sector of the 1980s. This was stressed very forcibly and amusingly by the noble Earl, Lord Shannon. We believe that the Alvey programme must reflect this; the strategy will therefore be kept under regular review and will be updated as and when we feel it is necessary.

There are many Members of your Lordships' House who are considerable experts in specific and general areas of information technology—but, as I stressed to your Lordships, I am not among them. But I believe that both expert and layman alike recognise the tremendous potential of information technology both as an area of enormous industrial opportunity and as a field with far reaching social implications. The Alvey programme can assist the United Kingdom to realise this potential.

It has been suggested that the Alvey programme has been dominated by technical matters and that the programme—or, for that matter, the original report of the Alvey Committee which we have before us tonight—has only considered technical rather than market objectives. We can understand that point of view but do not believe it is a fair one. We have to remember that the programme is concerned with support for enabling technologies and not for specific products.

The immediate consumers of those enabling technologies—of the chips and of the software tools that will emerge—are not the men in the street but the United Kingdom companies which will use them as components for their products. I do not think it is unreasonable to believe that the strategies, which have been prepared in full consultation with industry, reflect very closely what those United Kingdom companies see as their own demand for products. This will certainly be so when it comes to paying their share of the programme's costs.

On top of this, we have instituted a specific area of the programme which is concerned to demonstrate the applications of the technologies. We envisage that around half a dozen demonstrator projects will be mounted. These projects, which will run for the whole five years of the Alvey programme, will be used to set specific market-related research goals in the different technologies. By pulling together different strands of research and by applying it to real market needs, they will demonstrate its commercial potential. Before the demonstrators are finally launched, the directorate will evaluate various candidate projects with industry. This process has already started and six studies have been commissioned to report back in March of this year. I stress to your Lordships that more are under consideration.

Among the projects now being examined are a wholly automated factory; the use of intelligent systems in the administration of the social services; the application of advanced information technology in the offshore oil and gas industry; and a word processing system driven entirely by dictation rather than by a keyboard. The noble Lord, Lord McIntosh of Haringey, had my sympathy this evening; I was thinking that both of us trying to run one of these MMI systems in our current vocal state could produce some interesting problems even for advanced information technology.

An important facet of the programme is to ensure easy communication between the various organisations taking part. Unlike some other countries, we have decided against concentrating research in a single central institute. We believe it makes more sense to use existing facilities—and to leave industrial researchers in their firms—rather than create what we can see as becoming a remote institute. There must be close contact between the various sites and modern communications technology allows this. As recommended in the Alvey Report, there will be an advanced network linking participants. The directorate has completed the network plan and is now putting in hand the setting up of this high speed network. The first step will be an electronic mail system to provide a mail box for every participant in the programme, and a consortium of firms has been set up to provide this service, which will be run from the National Physical Laboratory.

I am able to tell your Lordships that considerable progress has also been made in establishing the ground rules for dealing with intellectual property rights arising from the programme, and to provide for collaboration between the various participants. These are complex and potentially contentious subjects, but I am pleased to report that the Government industry working party which has been tackling them has produced a framework which commands general support as providing a balance between the need to share information within the United Kingdom industry as widely as possible and the commercial interests of the individual companies. The consensus which has been reached will clearly assist the formation of collaborative groupings to tackle specific projects.

Now that the general strategy and the framework for the Alvey programme have been established individual research projects can begin and the directorate is currently working closely with industry to formulate the co-operative projects. We have also announced a number of specific areas where they would like to commission research. We have had over 130 separate applications in this field, and although the main priorities are already established the directorate welcomes approaches from any organisations which may have suggestions for projects or wish to participate in some way in the programme. Of course, small firms in particular are urged to come forward. We are keen to involve these small firms and I am pleased to say that many of them are well represented in the applications we are considering.

The question of ESPRIT was raised briefly. As your Lordships are aware, this is a Community programme in IT which has several features in common with Alvey. The Commission have proposed a substantial main programme to follow the pilot programme now under way, and this could involve a commitment of 750 million ECU of Community funds, which in sterling at the moment is roughly £420 million. My right honourable friend the Prime Minister made it clear in another place on 7th December last year that the Government recognise that the ESPRIT programme has considerable merit. We welcome the active participation of the United Kingdom organisations in the pilot programme and the interest they are showing in the main programme.

The Community cannot approve large multi-annual commitments for which no money is available. Unfortunately the Athens summit did not come to grips with the Community's future budgetary arrangements and the future of ESPRIT must be contingent on a solution to this problem. We, of course, are not alone in taking this line; it is shared by the West Germans. Of course, the relationship between ESPRIT and Alvey is also relevant, because information technology covers an extremely wide spectrum and there is ample scope for the two programmes to complement each other. Certainly the Government have no intention of duplicating or repeating work already carried out, and I cannot imagine the British firms would want such duplication. The Alvey programme is being managed taking full account of ESPRIT.

Perhaps I could try to cover some of the points raised in your Lordships' fascinating debate this evening. I shall try to answer the questions. If I miss any I hope your Lordships will forgive me. I promise that we shall read very carefully what has been said. Some of your Lordships have been kind enough to give me advance notice, and I hope that I can give reasonable answers.

My noble friend Lord Bessborough raised many interesting points. Perhaps I could thank him very much for the article he gave me. I was very interested, but I hope he will forgive me, and that your Lordships will forgive me, for not commenting on it this evening.

I was fascinated with my noble friend's comment about the retrieval system in the Library. I listened very carefully, and I think it was on the lines of British Information Retrieval Data System, which to me spelled out BIRDS; but I do not know whether my noble friend had that entirely in mind, whether flying, running or other forms of birds. Nevertheless, my noble friend raised many points, and we are grateful to him. If I missed anything I shall certainly write to him.

The noble Lord, Lord Flowers, raised several points, of which he was kind enough to warn me, one of which concerned the Alvey directorate. Another concerned venture capital. The noble Lord will be aware that the Alvey programme will provide industry with matching funds from the Government for longer term research—and I think that is what concerned the noble Lord—in advanced IT. I am sure that he will agree, as will all your Lordships, that this is in line with the DTI's approach of providing selective assistance to innovative industrial products directly, rather than indirectly through venture capitalists. Outside the area of Alvey research, over the past five years the DTI has provided £83 million-worth of selective assistance to the information technology industry which we hope will bring forward new products.

The noble Lord, Lord Flowers, also asked about the dominance of the Ministry of Defence in the VLSI programme. He wondered whether sufficient weight would be given to civilian or, indeed, commercial needs. I am sure he will agree that the Ministry of Defence involvement is a particularly important feature of the programme since the department can make a very important contribution, not least through its own research establishments. The strategy in VLSI has been drawn up closely with industry, and it is strongly supported by industry as being in line with commercial needs. Moreover, I am advised that the underlying technology in VLSI is becoming increasingly common to both defence and civil requirements. I believe that we ought to bear in mind that the market for defence systems, both at home and overseas, is important for British industry and it is vital for us to maintain it.

I must apologise as I see that I should have covered one point raised by my noble friend Lord Bess borough, and this will save my writing to him at a later stage. My noble friend asked two specific questions about the funding of the programme. I should like to re-emphasise the Government commitment to Alvey and, indeed, to the provision of the funds necessary for the programme. My right honourable friend the Secretary' of State for Trade and Industry announced last April in another place that the Government would provide £200 million for this purpose and that the funds would come from three departments—the Department of Trade and Industry, the Ministry of Defence and the Science and Engineering Research Council. The remaining £150 million is to be provided by industry itself. I am pleased to say that co-operation between these departments is working particularly well, and it extends to the funding arrangements.

My noble friend also asked about the role of the research associations in Alvey. I very much hope that they will play a full part in the programme. I know that the Alvey directorate would welcome co-operative applications involving the research associations.

The noble Earl, Lord Shannon, made a fascinating speech. I was rather apprehensive when he started by mentioning what I think I would class as ferrous metals, since it was only in July last year that the noble Earl gave me a brief but well remembered lesson on special steels and their carbon content—or not, as the case might be. The noble Earl went on to mention motor-cycles, which I found most interesting. Indeed, I remember reading a report by, I think, the Boston Consultancy Group in 1975 about the dominance of the Japanese motor-cycle industry, and how it had taken over or achieved a particularly dominant position in the United Kingdom motor-cycle market.

I think the noble Earl will agree with me that in Italy one sees there is a particularly strong indigenous motor-cycle industry, especially in small to medium sized motor-cycles. I recall one especially successful West German firm in the luxury' end of the motorcycle market in Europe, and I believe all over the world. We do take note of the thrust of the noble Lord's argument about how a nation such as Japan can achieve dominance in one particular section of the industry.

My noble friend Lord Nelson raised many very interesting points and I thank him for his welcome of the report; indeed, he stressed that it was early days yet. I thank him for his comments and compliments on the directorate and. indeed, for his explanation of various projects from the point of view of a professional. We are particularly grateful that he has been able to come and help us this evening, as indeed he has helped me over a considerable number of years in the past, not least in the battles we fought seven years ago so far as intellectual property was concerned (struggles on the Patents Bill) when the positions were reversed and I happened to be on the Benches where the noble Lord, Lord McIntosh, sits. We are particularly grateful to my noble friend.

I do praise the noble Lord, Lord McIntosh; he completed his speech. He has made, as he points out, two major speeches in the presence of his former employers, and tonight shows courage of a mental as well as a physical form. He raised one point with me about the funding and whether it derived from the Ministry of Defence, from the DPNI and the SERC. I understand that the funding is indeed on schedule. This covers a fairly wide stratum. If I am wrong in any detail, of course I shall communicate with him; but from the query that he put to me tonight, I understand that the funding is on schedule.

The noble Lord raised one other point about contracts. I have already told your Lordships of the number of applications which have been received by the directorate. Many of these, particularly those from the academic institutions, have been approved, and I assure the noble Lord, Lord McIntosh, that all three departments involved in the Alvey programme have incurred expenditure on the Alvey projects.

Obviously, the amount of funds expended by Government must depend on how quickly the claims are made by industry; and, indeed, by academics. I assure the noble Lord and your Lordships that there is no question of any of the departments not making available the funds which the Government have committed to the programme or, indeed, to these contracts.

I hope that I have covered all the questions which have been raised in the fascinating debate this evening. If I may conclude, the Alvey Programme has, we believe, made a particularly encouraging start. Industry's response has been very heartening. The Government believe that it is vital that the United Kingdom harnesses all its available skills to take a leading position in IT. Of course, Alvey forms an important part in the encouragement which we are providing for that technology. The programme reflects the high priority which we attach to the new industries and enterprises which will form the basis of Britain's industrial future.