Class V, Vote 2

Part of Estimates Day – in the House of Commons at 8:34 pm on 14 July 1998.

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Photo of Phil Willis Phil Willis Shadow Spokesperson (Education) 8:34, 14 July 1998

First, I apologise for the fact that my hon. Friend the Member for Cheltenham (Mr. Jones), who is a member of the Select Committee, is not in the House tonight. As the Liberal Democrat spokesman on higher education, I speak on behalf of my party.

First, I congratulate the hon. Member for Rayleigh (Dr. Clark) and his Committee on an extremely good report. I also congratulate the Government on their positive response. That set the tone for the comprehensive spending review. The announcements of the past two days reflect the quality of the work that went in, not simply from the Dearing committee but from the hon. Gentleman and his Committee. It is worth putting that on the record.

There is no doubt that knowledge-based industries will provide the key to competitiveness in the next century. Those industries depend on a world-class science base which not only provides the information and ideas which fuel new developments but, just as critically, the technicians and scientists who man their laboratories. Britain publishes about 5 per cent. of the world's scientific academic papers—a rough measure of scientific output—yet to be able to understand and use the other 95 per cent., industry has to have in-house scientists who are trained in state-of-the-art ideas and techniques.

The benefits from investment in science are well illustrated by the pharmaceutical industry—Britain's major industrial success story of the last 25 years. Here, close relationships between academic science and industry, with substantial investment in basic research by the public sector, matched by high levels of investment in research and development by the industry itself, have helped to make British firms such as Glaxo Wellcome, Zeneca and SmithKline Beecham leaders in the global marketplace.

Those firms have created a magnet attracting top-class international firms, and top-class international institutions, such as the European Medicines Evaluation Agency, to the United Kingdom. The research laboratories of those firms, located in Britain, bring well-paid jobs and prosperity to their local communities. They are just the sort of jobs that we want to create in Britain in the next century, but we will attract them only if we have the infrastructure and the trained labour force that they need. If the Government do not make the necessary investment—they have made a start over the past two days—we shall lose them. That is why the Government's response is as welcome as it is important.

Like so much else, scientific research is yet another example of the way in which, in some ways, we have squandered our heritage during the past two decades. Both in absolute and in percentage terms, the British Government are spending less than any other advanced industrialised country on supporting research in the higher education sector—a mere £61 per head of population, compared with countries such as Switzerland, Sweden and the Netherlands, where spending is upwards of £150 per head.

Among Organisation for Economic Co-operation and Development partners in Europe, only Spain and Ireland spend less than we do, and both are fast catching up. However, that is before the Government's announcement, which clearly means that the calculations must be revised. Britain is also distinguished by the slowest rate of growth of such expenditures—a mere 1 per cent. per annum since 1984—of any OECD country. That is a record of near-criminal proportions, because it has left the future prosperity of the British economy exposed and vulnerable.

Even at those low levels of expenditure, Britain punches above its weight, and our research institutions and universities are a tremendous success story. A recent paper written by the Government's scientific adviser, Sir Robert May, shows that, in relation to population, we are still publishing more top-class academic papers, at lower cost, than any other country.

The Treasury must be well pleased. It has squeezed the pips out of the university sector, and, to be fair, it has worked. Productivity has increased, and costs have gone down. But, as Sir Robert himself warns in his paper, the only reason costs are so low is because academic salaries in the UK are grossly uncompetitive.

In the past, the cream of our graduates chose a research career, but if, as is the case now, at the age of 26, with three years of a bachelor's degree and four years of a doctorate behind them, we are able to offer those high fliers only short-term contracts on salaries of £16,000 to £17,000, it is no wonder that they are opting with their feet and choosing jobs in the City which offer them twice those salaries, and the prospect of Christmas bonuses running into hundreds of thousands of pounds.

It is not just our research fellows who are being undervalued. Like every other sector, the university sector has been living off past capital and failing to renew it. The Dearing report highlighted the cost of making good the backlog of equipment renewal to bring universities up to modern laboratory standards, which are not only necessary to undertake state-of-the-art research but are demanded by the Health and Safety Executive. That cost is now estimated to be more than £1 billion.

The cost of bringing UK Government expenditure on research in higher education up to average levels of OECD countries is a further £1 billion. Britain cannot afford to ignore such investment. The Dearing report and the report by the Science and Technology Select Committee made that clear, and the Government have responded positively.

The story of the pharmaceutical industry should not be neglected. The investment in molecular biology research was funded over many years, with no obvious return except intellectual excitement and Nobel prizes. Today, it supports a multi-billion-pound industry, in which Britain has become a leading player. There are many other potential success stories if we are prepared to make the investment, which is why the Select Committee report was so welcome. It unambiguously says: there is an overwhelming case for a substantial real terms increase in Government funding for the science base as an investment in the nation's future". Yet the Government's response prior to yesterday's announcement was relatively meek. They seek full credit for the half-hearted measure that they introduced last year—the joint research equipment initiative—which, as the Committee pointed out, was mainly a reorganisation of existing research council budgets, and brought only a minimal amount of new money onto the scene.

The £600 million injection of resources jointly by the Government and the Wellcome Foundation has gone a long way to redressing the balance, but it still falls short of the £1 billion needed to re-equip aging laboratories and replace obsolete equipment. It is also a one-off injection of resources.

When the Minister winds up, he must make a commitment to increasing investment in the research infrastructure on an annual basis. Both the Dearing committee and the Select Committee have identified the need for full reimbursement of the indirect costs of libraries, computing, and research support services, but, unless the indirect costs attached to research projects are funded in full, universities will continue to struggle.