Question proposed, That the clause stand part of the Bill.

I thought that it might be useful at this early stage, given that the clause creates the arts and humanities research council, to tease out some issues related to the running of the council and, in particular, its future relationship with the rest of Whitehall. Members of the Committee may recall that the Secretary of State referred to the creation of the council in his speech on Second Reading. He said:

''The Bill will create an arts and humanities research council—the first new research council since 1994 and a major step forward for the arts and humanities community, giving those disciplines their proper status.''

Making what I thought was rather a good joke, he continued:

''Some might call that measure the revenge of the medieval historians.''—[Official Report, 27 January 2004; Vol. 417, c. 167.]

I want to find out from the Minister exactly how the arts and humanities research council will operate in Whitehall after its creation.

Paragraph 64 of the explanatory notes state:

''It is intended that the Arts and Humanities Research Council should receive its funding from the Office of Science and Technology as part of the same budget as the existing research councils, and take part in discussions about funding in exactly the same way.''

The funding of the existing Arts and Humanities Research Board through the Education Departments is discussed, and it is then stated that

''from 2005-06 this funding will transfer from the existing funding departments to the DTI.''

That is the point that I wanted to tease out.

It is worth noting what the Department of Trade and Industry says about the role of the Office of Science and Technology, which will, as a result of the provisions in the Bill, become the new home for arts and humanities research. The Office of Science and Technology website quotes the Prime Minister as saying that

''the science base is the absolute bedrock of our economic performance.''

It then sets out the objectives of the Office of Science and Technology, of which the first is

''To sustain and improve the science and engineering base.''

It describes the existing research councils, all of which, perhaps not surprisingly, have a very heavy scientific basis. The list includes the Biotechnology and Biological Sciences Research Council, the Council for the Central Laboratory of the Research Councils, the Engineering and Physical Sciences Research Council, the Economic and Social Research Council, which is arguably slightly closer to arts and humanities than the others, the Natural Environment Research Council, and the Particle Physics and Astronomy Research Council.

I understand that it is expected that, within the Office of Science and Technology, the arts and humanities research council will come under the director general of research councils. He was appointed to the post with effect from 1 January 2004—a full year after the Government set out in the higher education White Paper their intention to create an arts and humanities research council and to place it in the Office of Science and Technology. However, the person who has been appointed to be director general of research councils is Professor Sir Keith O'Nions. He has an extremely distinguished academic and public service record, but it is heavily and, some might argue, exclusively scientific. He has been professor of the physics and chemistry of minerals and head of the department of earth sciences at the university of Oxford. He was a demonstrator and then lecturer in geochemistry at the university of Oxford and he was professor of geology at Columbia university. I will not read out his full curriculum vitae, but the point is that he has an immensely distinguished, but wholly scientific background.

It is not simply that the arts and humanities will be located within the Office of Science and Technology, but that the Department that bats for them, argues for their funding with the Treasury and sponsors their work will be the DTI rather than the Department for Education and Skills. The Secretary of State who has responsibility to Parliament for accounting for the public moneys that are provided to them will be from the DTI rather than the DFES. It will be within your recollection, Mr. Gale, that there was a time when the DFES was the Department of Education and Science and so all those things were located within the one Department.

The decision has been taken—I do not query that this morning—that science logically fits with the DTI. One of the reasons for that—the Government are quite explicit about this—is that they wish to encourage further growth of business sponsorship, business relationships and the development and practical application of scientific and technological breakthroughs to boost the competitiveness of UK industry. Those are entirely desirable objectives, but the reason I am seeking to tease out from the Minister his thinking on these matters is that it is not entirely obvious that arts and humanities have the same business spin-off, technological impact and scientific grounding.

The Government refer in their explanatory notes, quite rightly and understandably, to the value of interdisciplinary research and the greater

opportunities that are created by looking at matters across the arts and science spectrum. Of course, it is true to say that there a large number of areas where scientific and arts and humanities research will overlap. Sometimes it has to do with the use of technology such as carbon dating for looking into the past. Sometimes it has to do with the use of computer technology in analysing whether a lost text was the work of Shakespeare.

It would also be true to say that many specialists in the arts and humanities would not naturally assume that their work or their expertise is the same as that of specialists in the physical sciences. I have no doubt that the Minister will be able to cite a large of number of people in the field of arts and humanities who have supported the creation of the arts and humanities research council. I wish to place on record that I do not say that it is an inappropriate step for the Government to take. In fact, in principle, the Opposition are in favour of it. However, it matters significantly whether the research council will have an opportunity to thrive within what will be quite a different environment. Arts and humanities have not hitherto been part of the DTI.

A further subject for some concern, but about which the Minister may be able to reassure us, again comes from the explanatory notes to the Bill. Referring to future funding for arts and humanities research, they state:

''Provision for 2005-06 is estimated as £78m.''

In the overall scope of public spending that is not a huge sum, but within the field of arts and humanities research I suspect that it is regarded as extremely important and no doubt enables quite a bit of work to be done that otherwise would not proceed either at all or on the same scale. However, the explanatory notes continue:

''Annual expenditure on direct funding related to arts and humanities research will vary from year to year, and a projected annual figure is therefore not available.''

Again, in principle, few would object to the fact that the Government perhaps could not be expected to set out the detail many years ahead, although the Chancellor is usually at great pains to explain that one of his great innovations is the construction of the comprehensive spending review and the fact that it has given most areas of public funding a greater degree of predictability over a three-year time scale rather a one-year time scale as applied in the past. However, the explanatory notes go on to say that replacement of the Arts and Humanities Research Board with a fully fledged research council creates potential labour savings for the new AHRC as its systems are aligned with other research councils. That could mean something or nothing, but it is possible that one of the reasons for creating the new research council is to save a bit of money in respect of those who work for the AHRB. That is not necessarily a bad thing; there is considerable scope for efficiency savings in many areas of public life, and the Government may have successfully and appropriately identified one of them.

However, a pattern begins to emerge. As far as arts and humanities research is concerned, the Government are giving the community something that I suspect the vast majority will welcome: the status that goes with being a proper research council, and the recognition that the work of arts and humanities deserves parity of esteem with scientific research. A statement has been made from a very high level, by the Secretary of State—I expect that the Minister will make it, too—of the Government's commitment to, and recognition of, the importance of arts and humanities research alongside other academic research.

As framed in the explanatory notes, funding is predicted only for the first financial year after the transfer in 2005-06, and thereafter it is explicitly flagged up that it will vary from year to year—the wording does not say ''varying while continuing to increase'', it says ''vary''. That leaves open the opportunity for it to reduce, especially if responsibility is transferred to the Department of Trade and Industry. That Department has many strengths, but part of its core mission in life is not to promote arts and humanities research, because it has many other schemes, projects, mission statements and objectives that it would wish to pursue. There is a danger, not necessarily in the first or even the second year of the transfer, but down the line, that the DTI might take the view that it had inherited the strange, esoteric field of arts and humanities research, very little of which had much to do with promoting economic competitiveness, exports or the growth of UK industry. In a tough public spending round negotiation with the Treasury it might take the view that arts and humanities research could offer a relatively painless range of savings. I should be grateful for reassurance from the Minister on that matter.

What discussions have the Minister's officials had with those from the DTI about the attitude of the new Department responsible for arts and humanities research to the proposed research council after it has been set up? Were his officials, who at present deal with the AHRB, consulted before the appointment of the director general of research councils, Professor Sir Keith O'Nions? Have they received assurances that in the future arts and humanities work of Research Councils UK will be given a higher priority? The Government's website states that the chief executive of the AHRB already attends meetings of Research Councils UK as an observer. That may cause slight concern in the arts and humanities community, as the main tasks of Research Councils UK are listed as developing the strategy for investing the science budget, investing in world-class facilities such as the new, high-performance computing capability and the new synchrotron radiation source, and ensuring that investment in science and technology benefit the UK's economy.

Under the present structure of Research Councils UK, even though the director general knows that it is highly likely that the arts and humanities research council will join and that the chief executive of the

AHRB already attends its meetings, there is no reference to anything non-scientific in the objectives or the mission statements of Research Councils UK. Has the Minister secured an undertaking from the Department of Trade and Industry that the changes will be reflected in the mission statements and objectives of the Office of Science and Technology at large and of Research Councils UK specifically? In short, the arts and humanities community, which widely welcomes the creation of a research council, would further welcome anything that the Minister can say to reassure us that, even after the transfer of responsibility for these matters to a Department that is not innately assumed to have a huge grasp of the importance of arts and humanities, proper importance will continue to be given to that work, which the Government will continue to make a priority.

I should make it plain that there is an inevitable inter-relationship between clauses in a Bill as complex as this. Hon. Members will find that some amendments that apply to later clauses have been grouped with earlier clauses. It is immediately apparent, for example, that the debate on clause 1 is already touching on matters relating to clause 3. I have no problem with that, providing that members of the Committee understand that we shall debate the issues once, not twice.

Many of us from all parties will lament the absence of the former hon. Member for the Cities of London and Westminster, now Lord Brooke of Sutton Mandeville, whom my hon. Friend the Member for Hertsmere (Mr. Clappison) and I much enjoyed when we led for our party. In his final years in this place, he would come in to Committees as a Back Bencher and delight them either with cricket stories—on which I did not feel as strongly as him—or with classical references, with which I cannot claim to match him but in which I shared an interest.

Germane to our consideration of the arts and humanities research council is the analogy between the ranks of Government Back Benchers attending the Committee and the formation of a Greek hoplite army; tightly grouped, working in a narrow phalanx and, above all, ensuring that nobody steps out of line. With the greatest respect to Ministers and Government Members, the difficulty is that that is a somewhat inflexible procedure. Some may be aware of the analogy of Apamanondus, who was the first Theban general to defeat the Spartans for 400 years. He caused them great distress, and a kind of psychological breakdown, at the battle of Lutra in 371 BC when he manoeuvred by concentrating his forces on the left and broke in to the hoplite formation, which fell down completely. That is the only Brookeism to which I shall treat the Committee this morning.

I hope that the Minister will not feel upset if I say that I agree with the clause; I indicated that on Second Reading and I do so again, as it is the right thing to do. I shall say a little about the reservations of my hon. Friend the Member for Westmorland and Lonsdale, which I share, but the basic decision is right. It is right

to give the arts and humanities community a pukka research council, both as a matter of status and because it will enable it fully to access resources within the research council net.

I have a number of interests in the area. First, I am a humanities person through and through myself. Secondly—somewhat to my surprise, but it is amazing how training transfers—I sat for two years on a science research council in the late 1980s. Thirdly, I was Higher Education Minister when some of these ideas were beginning to be developed. The arts and humanities community's interest then, as now—judging from the briefing that I have seen—was in favour of a full research council. We should not stand in its way.

I have been reflecting—although I have not had time to access and check through all the files—on the arguments that were deployed in my time as a Minister for not creating a council. In a sense, the arguments are behind the reservations that my hon. Friend the Member for Westmorland and Lonsdale has already mentioned, and they are still matters on which Ministers need to reflect. Ministers need to be sensitive in dealing with the humanities in establishing the council.

Essentially, the problem is one of scale, and we should consider the characteristics and management of the higher education sector. For example, if we compare the proportion of vice-chancellors who come from a big science background, where they are used to managing substantial research teams and resources, with the proportion that come from an arts or humanities background, we see that there is a strong preponderance in favour of science.

Universities clearly require substantial resources to carry out their work—that point may also come up in later debates—and that does not exclude the humanities, which need library facilities, IT support and so forth. However, in a way that is not universally feasible in science, it is possible for a lone scholar to sit in a garret and puzzle a problem of philosophy, ancient history or logic and argue it through with a pen, paper and their own brain. That is the cultural and scale difference between the humanities and the sciences.

My hon. Friend the Member for Westmorland and Lonsdale has already referred to the second reservation. It concerns the transfer that effectively farms the council off to the Department of Trade and Industry, of which I was not fully aware until I read the small print. If we are going to establish a research council, it would be inappropriate to leave it uniquely under the control of his Department. I notice that the Minister is nodding. The council has to transfer, as it cannot be half one and half the other.

There are some important sensitivities, to which the Minister could helpfully respond, about his Department's continuing relations with and interest in the arts and humanities. Indeed, he might want to say something about his relations with the sciences, and I shall return to that later. There are also particular interests among the arts and humanities world from other organisations and bodies that will remain at least under the general sponsorship and encouragement of

the Department. I am thinking of, for example, the British Academy and the British archaeological schools in Athens and Rome. These are matters in which the Minister and his successors will be taking an interest. We must also consider what is taught in schools, and progression issues. As we are slightly more at leisure this morning, it would be helpful if the Minister commented on those points.

The other area that featured in the theology of our decision about 10 years ago when I was Minister not to move to a full-blown research council concerned the future of the dual support funding. As the Minister will know, the funding is divided between the research councils' contracts or grant arrangements for service and the Higher Education Funding Council for England money, which is tied to the research assessment exercise and pays for blue-skies research. Ministers are rightly anxious to defend and maintain that distinction.

We must take note, although perhaps in a different context from this morning, that Lord May—a former chief scientist whom I greatly respect—said cheerfully that we could allocate all funding through the research councils, simplify the system and not bother with the HEFCE research funding. That would not be appropriate, but the Minister might want to comment on it.

I have several points that I should like to list solely to get them out of the way so that I do not need to intervene on later amendments. First, will the Minister confirm that the charter of the proposed council will provide for an ability to receive and deploy external funds? I remember from my time on a research council that although the prime funding—about 90 per cent.—was through the Government department that became the OST in due course, there was a significant amount of private sector funding. I imagine that the Minister will not want to discourage external funding, whether it is through endowment, commercial contracts, intellectual property or whatever.

The second point, which relates to external activities, is probably covered sufficiently by clause 8. I am sure that the Minister will endorse my view that there are important academic linkages. The academic world is not confined to the UK or even parts of the UK, important as some of us think they are; I have a Welsh wife, so I have an interest in those clauses, too. Most academics, particularly in the world of the internet, converse academically, and collaborate and associate themselves with a wide range of scholars and researchers throughout the world. We all want such practices to happen and we do not want them to be in any way inhibited.

Clause 8 states that nothing should restrict the activities of the arts and humanities research council to the UK or to any constituent part of the UK. That is a fairly simple and unequivocal statement, but perhaps the Minister can say whether it extends equally to the activities of scholars and researchers who are supported by the council and whether there are inhibitions on that.

I shall simply flag up the third point, because it is the subject of a later amendment. It concerns the need to ensure that any legal undertakings that have been concluded by the AHRB, and in particular its obligations to staff, are fully recognised and transferred.

When in government, we faced a situation in which the sector wanted a change and there was pressure for an arts and humanities research council. However, 10 years ago, we did not feel that the time was right. Indeed, I have emphasised some of the points that are more than purely theological or organisational. There are points of substance, on which my hon. Friend rightly questioned the Minister and which at least give rise to reservations about rushing into this process. As Sir Humphrey knew, Rome was not built in a day, and it has taken 10 years to get from the laying of the foundations, which I modestly hope I laid, to the fruition of the proposal today.

I am conscious that I could have made a cynical response at the time when I laid the foundations. I could have said, ''This is the way to block the proposal off, so that it might never be implemented'', but in fact I am quite happy that it has evolved through the way in which the Arts and Humanities Research Board has communicated with interested persons, developed authority and led the sector, and that the time is right to make this change. I pay tribute to the successive professors who have led the board; Laver, Eastwood and Crossick. I hope that I have not omitted one. There has been good leadership that has operated in a modest but effective way. The time has now come to move on, but we should not neglect the sensitivities. It is particularly important when there is such consensus on moving to this proposal that we do not pretend that there are no problems. We should simply deal with them in a grown-up way.

We all need to emphasise the importance of the arts and humanities in their own right. They are not irrelevant to the economic strength of the country. We are strong in many of those fields, and many of us would think it proper that we should be even if there were no economic worth to that. We must ensure that what the Minister is proposing, with an aura of good will on both sides of the Committee and a good deal of pressure to do so, delivers the result that we all want.

The points raised are perfectly valid. I am pleased that we have had the debate because we may, as you suggested Mr. Gale, be able to cover future debates on the clause more quickly.

I shall provide an outline for why we believe the proposal to be such an important step forward and, in doing so, pick up on the points raised by Opposition Members. I believe that this aspect of the Bill has unanimous support; in my seven months in the job, I have not heard a single argument against it. The measure brings to fruition a tremendous amount of work, and I applaud the hon. Member for Daventry on setting aspects of the initiative in motion 10 years ago. However, we must remember that establishing an arts

and humanities research council was a specific recommendation of the Dearing inquiry into higher education.

The Arts and Humanities Research Board completely supports the proposal, including placing the council under the responsibility of the Department of Trade and Industry. The hon. Gentleman mentioned the important reasons for doing that; if one research council remained in the DFES while the other seven were in the DTI, it would not have the same status. The AHRB has done a lot of work, as have the Office of Science and Technology, the DTI and the Government. A review of arts and humanities research—carried out internally but involving the devolved administrations and building on the Dearing and other recommendations—found that a fully fledged research council should be established. We believe that such a council gives proper recognition to the arts and humanities, which are important not only to the social fabric of the country, but to the economy and the interface with scientific research.

Part of the argument of the hon. Member for Westmorland and Lonsdale was about the business spin-offs from the council and its placement in the DTI. There are enormous business spin-offs. The creative industries, which accounted for 7.9 per cent. of our GDP in 2000, are growing at a rate of 9 per cent. a year. Tourism, which will be a major aspect of the research council, contributed £10.9 billion to export earnings in 2001 with the support of culture and heritage research. More than a third of overseas visitors cite the heritage sector as a prime reason for their visit.

The Minister is right on that point, but he will recognise that responsibility for tourism promotion lies not with the DTI but with the Department for Culture, Media and Sport. Have officials in that Department been consulted and involved in the process?

Yes, they have. The DCMS might use the research council's resources for the reasons that the hon. Gentleman suggests. The central thrust of the hon. Gentleman's point was the priorities that he quoted. I reassure him that after the change, those priorities and everything associated with them from the OST will reflect the existence of the arts and humanities research council.

Research in the humanities makes an important contribution to the development of public policy. That is a link with the scientific community, which was another point raised by the hon. Gentleman. Embryology, surrogacy, human genetics and cloning, as ethical aspects of the research council, will have an important link with the rest of the research council's work.

In support of the Minister's argument, I point out that Ruth Deech, who will be the first student complaints adjudicator, comes with a distinguished background in the humanities and with service on the Human Fertilisation and Embryology Authority. She is exactly the kind of person who stands with the humanities tradition in dealing with

important matters, which in her previous activity were germane to the conduct of scientific research and the development of medical techniques.

The hon. Gentleman makes an important point. I am glad that he read that in to the record.

Before I turn to the meat of clause 1, I should bring one other issue to your attention, Mr. Gale. As Committee members will know, the arts and humanities research council, like existing research councils, will operate throughout the UK and the primary legislation involves the UK Parliament legislating on a matter previously devolved to Scotland. By convention, there will be a Sewel motion in the Scottish Parliament. I understand that that is likely to be formally moved without debate in the Scottish Parliament on Thursday. We will know by the subsequent sitting whether that process has been completed. Our consideration of the clauses on the arts and humanities research council in so far as they relate to Scotland is framed by the Government's commitment to seek the consent of the Scottish Parliament when it plans to legislate on a devolved area at Westminster.

Clause 1 defines the AHRC as a body to be set up by royal charter. We are not establishing the body here. I think that we have distributed copies of the charter to Committee members. The charter provides, in broad terms, for the governance of the AHRC, its accountability to the taxpayer and the appointment of its senior officials, including the chief executive. I am advised that the chief executive was appointed by open competition in the normal way against the advertised job specification, and a splendid choice he is. Without clause 1, the AHRC would not be established and everyone agrees that that would be of great detriment to the research community.

The hon. Member for Westmorland and Lonsdale raised an important point when he spoke about the social sciences. The Economic and Social Research Council most closely equates to the arts and humanities research council. I remind him that when the idea emerged of putting social sciences under a research council under the Department of Trade and Industry, similar concerns were rightly expressed. However, with the passage of time it has proved to be successful and no one would argue that the council ought to be anywhere other than under the DTI.

I cannot remember who quoted the figure of £78 million that will transfer across. No significant savings are to be found in turning the board in to a research council. I can give the hon. Member for Daventry the assurance that he sought; we will debate the terms and conditions of the staff and they will be fully protected. There are some synergies but no significant savings. Resource transfers will make the change neutral in terms of funding for arts and humanities research. In the recent spending review, research funding increased and that increased research funding will transfer over to the research council.

We accept that staff will be protected and that the resources will be transferred over, so there is no reason to question the Minister on that. We are concerned about the redistribution of resources in the future. The resources will all come through one Department, the DTI. Will the Department be able to give 90 per cent. of the total cake to science and technology, for instance, and squeeze arts and humanities research significantly? How will measures be put in place that ensure an equitable distribution of resources to the various research councils?

We have a specific amendment that relates precisely to that example, including the terms 90 per cent. and 10 per cent. Of course, unlike the funding councils, who allocate money on a much more methodological system, the research councils allocate money by peer review in response to specific applications and specific projects. That is an important definition. There is no question of the arts and humanities research council being any different from the other eight research councils in being able to respond to applications.

Like me, the hon. Member for Harrogate and Knaresborough is perhaps feeling for some sense that Ministers at the DFES will continue to take an interest in the allocation of the money. Of course, it would be unreasonable to ask them to do the OST's job or that of the DTI, but I hope that they will at least undertake to make friendly representations if they feel that an imbalance has developed in the treatment the arts and humanities, the social sciences or, conceivably, the natural sciences.

I shall deal with that now. Let me clarify the situation as regards the OST consultation on dual support and the consultation on the research assessment exercise, which is due to be announced today. The Committee that deals with those issues includes myself, Lord Sainsbury and all the major players, and will ultimately decide how the research council's funding works. Therefore, DFES input is definitely part of the process.

The hon. Member for Daventry raised the important issue of Apamanondus and the hoplite formation, but enough has been said about that. The issue has dominated the tabloids for weeks, and we need not dwell on it further. He also asked for reassurance as regards dual support, but he knows that that has already been given in the White Paper and in the letter that Lord Sainsbury and I recently sent to all the research councils. We believe that dual support is essential, and the vast majority of those in the research and higher education communities are with us on that. Even Lord May, whom I admire as much the hon. Member for Daventry does, has said that he is not calling for the end of dual support and that he is talking about something else; I am not exactly sure what, but that is what he claims. So I think there is unanimity on the issue and we certainly believe that dual support should continue.

The Minister raises an important issue. We should not dismiss Lord May as a crank; he is an eminent researcher, and his views reflect what the Secretary of State said at the time of the White Paper. The Government's view was that there would be research-only and teaching-only universities. There is surely logic in what Lord May said, because if we go down the proposed road, the division between research and teaching will demand a different form of funding for research universities.

I fully accept that, and I hope that none of my comments suggested that Lord May was anything other than an eminent and valuable contributor to the debate. I agree completely with the hon. Gentleman's comments.

The hon. Member for Daventry asked for a reassurance as regards international links. I will give him that, although I should point out that a later Opposition amendment would damage those links. However, we shall debate that in due course. With those comments, however, I ask the Committee to agree that the clause should stand part of the Bill.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.