WEDNESDAY 7 MARCH 2001
                               _________
  
                           Members present:
              Dr Michael Clark, in the Chair
              Dr Ian Gibson
              Dr Brian Iddon
              Dr Ashok Kumar
              Mr Ian Taylor
              Dr Desmond Turner
  
                               _________
                                   
                 THE RT HON STEPHEN BYERS, a Member of the House, Secretary of State for
           Trade and Industry, was examined.
  
                               Chairman
        1.    Secretary of State, welcome to the Science and Technology Select
  Committee.  Thank you for finding time in your very busy diary to be with us,
  I know how difficult it was to find a mutually convenient date.  We are
  delighted to have you here with us now.  You have been before this Committee
  twice before, the first time you came to see us was to help us with our
  inquiry into innovation and the physical sciences; the second time you came
  to see us we tried to help you on the Synchrotron.  I am sure we confused you
  rather than helped you, it was a very difficult decision for you to make at
  that time.  Now we would like to talk to you in the context of a report we are
  doing, which we have entitled, "Are We Realising Our Potential?", going back
  to the report that was presented by the Minister, who is now Lord Waldegrave,
  entitled, "Realising Our Potential". We would also like to talk about the
  science policy in general. I suppose at this time for Parliament it is also
  a little bit of a round up of what has happened in the last four years and
  what is likely to happen with science policy in the future.  I wonder, if I
  may, just start by asking you how you have found your role in relation to
  science and technology and what it means to be the Cabinet Minister with the
  responsibility for science? Not only do you have the Chief Scientific Adviser,
  an OST, within your department but you do have a scientific responsibility
  across all government departments.  How do you handle that?  What impact has
  that had on science by having a co-ordinating Secretary of State or a
  minister?
        (Mr Byers)  Can I say, first of all, I welcome the opportunity of
  appearing before your Committee again. It is not many Secretary of States for
  Trade and Industry in the recent past who have had the opportunity of
  appearing three times before your Committee - largely because they did not
  occupy the post for very long - but I am pleased to be in front of you today. 
  Can I say in relation to the Synchrotron, it was a very difficult decision but
  I did find both the giving of evidence and the advice from the Committee very
  helpful on what was a very difficult decision.  First of all, it is very
  important for science in the United Kingdom that there is a Cabinet member
  with responsibility for science.  I think that is very important because it
  does mean there is a voice at the Cabinet table on behalf of science and the
  science community.  That is particularly important at times like the
  Comprehensive Review, when the case has to be made for science.  If there was
  not a Cabinet member with specific responsibility then I think the case could
  go by default.  There is a very strong case to be made for science in the
  United Kingdom.  I would like to think that the last two spending rounds have
  demonstrated that having science as the responsibility of the Secretary of
  State for Trade and Industry has actually worked in the interests of the
  sciences and the science community in terms of the funding which we have been
  able to achieve in the last two spending rounds. It has been a significant
  increase and it is partially due, at least, I think, to the fact that there
  is a Cabinet Minister with specific responsibility. In terms of the
  co-ordinating role across Government, the Chief Scientific Adviser advises
  both myself and also has direct access to the Prime Minister. I think that is
  very important.  Most members of the Committee will know that in 1995 when the
  decision was taken to move the Office of Science and Technology out of the
  Cabinet Office and into the Department of Trade and Industry there was an
  issue about it being downgraded potentially in some respects.  I would like
  to think that the way in which we have been able to operate may have allayed
  some of the concerns that people had about the importance and the priority
  that we attach to science.  As you know Lord Sainsbury is the Minister with
  day-to-day responsibility for science and innovation.  I, as the Cabinet
  Member responsible for science, deal with the strategic overview of the
  direction in which science policy should be going.  As you are aware from the
  White Papers that we have published, in particular, I am personally committed
  to supporting science, but also ensuring that we can use the excellence that
  we have in science here in the United Kingdom, perhaps, in a broader way than
  it has been used in the past. Making the links between academic research in
  science with commercial exploitation and development and innovation is very
  important.  We have given a new impetus to developments in those particular
  areas.  I hope I do not sound complacent, Chairman, we have structures in
  place which I think are working well, and I think the results of that have
  been shown in the budget outcome, which I think has been good for science and,
  hopefully, in the way in which the science community itself recognises that
  it is valued and has a very important part to play.  There are at least a
  couple of announcements in the budget this afternoon which I think
  demonstrate, yet again, the importance that we attach to science.
        2.    I was going to ask you later on, but since you have opened up the
  subject I will ask you now, you refer to the important role that science plays
  in our society in general for the quality of life, wealth creation, and so on. 
  You alluded to the fact that science can add to wealth creation, which is
  something that all governments should want for their population.  Do you
  recognise, Secretary of State, that one should not just see science as a
  wealth creator, although it is pleasing that you do, and if in so doing we
  should not take our eye off fundamental research, which is the seed-corn for
  wealth creation at a later time?
        (Mr Byers)  I absolutely agree with that point. I think it would be a
  terrible mistake if we were simply to see science and, indeed, fund science
  in terms of applied science and science that can be exploited commercially.
  The reality is, as you have just said, that we only get to that stage if we
  have the grounding in pure science.  I think the trick that we need to play
  really is to recognise that the two are not mutually exclusive but actually
  one compliments the other. We have to have a strong science foundation in
  order to be able to have the opportunities to exploit the ideas that come out
  of that pure research, if you like.
        3.    It is almost a circle.  Wealth creation finds the funds for
  research and development, and research and development provides the knowledge
  for wealth and creation.
        (Mr Byers)  That says it very well.
        4.    During the course of a week or a month do you get personally
  involved in discussing scientific matters or is that all left to the Chief 
  Scientific Adviser and the Minister for Science?  If you do get involved what
  sort of time do you spend, an hour a week or an hour a month?
        (Mr Byers)  Certainly more than an hour a week.  I hate thinking along
  these terms because it makes me think how many hours a week I actually work
  - I am sure it would be the same for most members. I have regular meetings
  with the Chief Scientific Adviser on a bilateral basis, he will brief me on
  issues that are relevant, probably every month we have a session together.
  There are many submissions that come up effecting science which, obviously,
  I consider along with Lord Sainsbury.  It is difficult to put a time on it.
  When there is a big strategic decision like the Synchrotron there would be
  many hours in a week.
        5.    Let me put it another way, do you think there are many weeks go
  by without you discussing a science matter at some time?
        (Mr Byers)  No, no.
        6.    OST is within your department, could an argument be made, do you
  think, for having OST as an independent office? If the argument could be made
  that way, what would the pros be for that argument and what would the cons be
  against it?
        (Mr Byers)  I am sure there are arguments that could be made to support
  a freestanding OST.  I think what we have been able to achieve is that it has
  the support of a strong department, which is good in terms of cross-government
  discussions and debates about priorities, particularly spending priorities.
  It has meant that we have been able to make links between science innovation
  and the university sector.  I think we have been able to achieve that without
  in any way downgrading the pure research that needs to go on as far as science
  is concerned.  One of the things that I am particularly proud of is that
  through the collaboration and the joint partnership with the Wellcome Trust
  and the money we have been able to put through the Joint Infrastructure Fund
  we have been able to put in about 1 billion in the last three years into
  basic infrastructure in our universities, which is not applied in any way,
  which is not exploited commercially but it is the foundation stone from which
  we are unable to put in other forms of funding to develop and exploit
  commercially. We have been able to do that because it has been part of the
  Department of Trade and Industry.  I know there is a view that to have an area
  with the Department on its own means that greater priority and attention is
  given to it.  I think there is also a danger that it can actually weaken in
  terms of the discussions and the debates around Whitehall, where to have a
  strong department can be useful.  I think, Chairman, it is probably for others
  to judge whether being part of the Department of Trade and Industry since 1995
  has been of benefit or a detriment.  My own view, from my own experience now
  of two and a half years  as Secretary of State, is that we have been able to
  add to what the OST has been able to achieve.
  
                               Mr Taylor
        7.    I am fascinated, because the language you have just used was the
  language I was using when I was Minister for justification. What, in your
  view, is the counter-argument about the Cabinet Office, from which my
  government moved the OST and, of course, earlier the Department of Education
  and Science? Are you satisfied with your experience now that the DTI is a
  better repository of the OST than either of those other two departments?
        (Mr Byers)  I believe so.  I am not someone who says that has to be a
  given.  I think a lot of it depends on having a commitment to support science,
  and we have that.  Wherever the OST is there has to be a clear commitment to
  support science, otherwise it is going to be very vulnerable. What we have
  been able to achieve is making very important links within the DTI. With the
  very good working relationship we have with the Department of Education and
  Employment we are then able to bridge the link with the university sector as
  well.  We have been able to ensure that the OST is not isolated and we have
  been able to support it and we have been able to make some very important
  links with other bodies.  Having said that, I can understand there will be
  arguments that there is somewhere else within Whitehall where it would be
  better placed, I cannot, as we sit here this evening, think where that might
  be.  I think the idea of having a freestanding OST would put it in a
  vulnerable position.
        8.    Would you agree that raising uncertainty about where the OST
  should be keeps opening up the problem of whether it is being taken seriously. 
  In sense I now reverse the question, would you make a determined, personal
  commitment that the OST is now well bedded down in the DTI and ought to stay
  there and gain strength from that department?
        (Mr Byers)  I would like to think that from the results people would
  recognise that it has been successful, that is the best way of judging it. If
  one looks back at what we have been able to achieve over the last three or
  four years or so, once it was bedded into the department - I understand you
  may know better than I do, there may have been teething troubles and
  difficulties, as there always is when there is a structural change in the
  government - I would like to think, certainly in my time, in two and a half
  years we have been able to move forward and there have not been those
  difficulties.  Certainly talking to the two Chief Scientific Advisers I have
  known they have been very supportive of where OST is and actually welcome the
  fact that they have regular meetings with myself and also have access to the
  Prime Minister if there is something which is particularly pressing.
  
                               Mr Kumar
        9.    Secretary of State, you have been a very strong advocate of a
  knowledge driven economy, especially if we are to compete globally. I have
  heard you say many, many times this is a road we must go down. Do you think
  that as a country we spend sufficiently enough on research and development
  compared to other countries in the world?
        (Mr Byers)  The figures are interesting, and it was one of the issues the
  Chancellor touched on in the budget statement earlier today.  I have looked
  at some figures in terms of R&D spend by the business sector. It is quite
  interesting to note that the United Kingdom business sector spends 1.2 per
  cent of GDP on R&D, where as the business sector in the Japan spends 2.2 per
  cent; in the United States 1.9 per cent; in Germany 1.6 per cent and in France
  1.4 per cent.  Certainly in terms of business spend on R&D we need to do more
  and we need to encourage that.  The announcement we have had of the R&D tax
  credit being extended to larger companies and the consultation that will take
  place around that is going to be very good news. There is also the issue about
  R&D spend by government itself.  I think through the Spending Review we have
  now got to a situation whereas there had been a decline we have now managed
  to stop that happening. In a number of major departments we will see
  Government spending on R&D increase over the next three years.  We have
  stabilised the position but there is clearly more that needs to be done.
        10.      Do you have an ideal figure or a percentage that you would like
  to tell us where you think our spending should be considered adequate or
  sufficient for R&D? I am trying to get a figure from you, if you have one in
  mind.
        (Mr Byers)  There is a danger of coming up with a precise percentage of
  GDP. We should not be trailing other industrialised countries, and the figures
  that I have just run through show that we are.  I think if we could up the
  level to be closer to our major competitors, whether it is Japan, the United
  States, Germany or France that would make a significant difference.  I would
  like to think, looking at the figures it is quite interesting, we have seen
  improvements in the R&D spend in the last two years.  We need to encourage
  that.  The tax credit that we have given to SMEs has been of help in doing
  that. If we can extend that to larger companies then that will make a very
  real difference.  The thing that worries me is what we are seeing at the
  moment, because we are in global competition for R&D, is some major companies
  who traditionally have had a high level of R&D spend in the United Kingdom
  looking at other countries.  Rolls Royce is an example, they are considering
  moving some of their R&D from the West Midlands over to Canada, because the
  Canadian Government has a very attractive regime as far as R&D spend is
  concerned. We must be vigilant. We are in a global competition here and we
  have to make sure that we have the framework in place and the tax regime in
  place which is very supportive of R&D spend.
  
                               Mr Turner
        11.      Does the Prime Ministers's recent speech, promising a green
  industrial revolution in the United Kingdom - certainly press reports stated
  100m input - have any strong implications for Government spend in R&D in areas
  of green technology?
        (Mr Byers)  Potentially it does.  I think when we have a chance to look
  at the details of the Chancellor's speech today he indicated there that there
  would be support for R&D in green technologies.  That is part of the
  consultation which has now begun as a result of the budget statement. There
  is huge potential here.  We have done a lot of work in the department now
  looking at new technology, and the green industrial revolution which the Prime
  Minister referred to yesterday. There is no doubt that if one looks at the
  overall spend globally on environmental technology it is worth in value about
  the same as the spend on pharmaceuticals worldwide. It is already a huge
  industry. We do not actually have much of it here in the United Kingdom but
  we do need to look at ways in which we can support it. The statement made by
  the Prime Minister yesterday and the announcement from the Chancellor today
  in the budget potentially will have a big impact as far as R&D spend is
  concerned in this particular area.
        12.      You would wish to be proactive in that?
        (Mr Byers)  I think we are. We have been very positive from the
  Department of Trade and Industry's side with the OST and with the new Chief
  Scientific Adviser, who has great personal interest in this area. There will
  be many opportunities in the months and years ahead.
  
                               Mr Kumar
        13.      Secretary of State, in the last Spending Review there was an
  announcement of increases in the science budget, and that was very welcome by
  the community out there.  Will you be seeking to strengthen the Government's
  investment in science engineering in the future and what level of funding do
  you have in mind for that?
        (Mr Byers)  I agree. The settlement we managed to achieve was one which
  was widely welcomed by the science community. It was a good settlement.
  Building on the first Spending Review we saw roundabout 1 billion extra going
  into science over three years.  We have managed to secure a similar level of
  funding in partnership with the Wellcome Trust, so about 1 billion of new
  money for science over the next three years. It is a seven per cent increase
  in real terms for each of those three years, so there are significant
  improvements there. There is no doubt when the next Spending Review comes
  round, and they come round remarkably quickly, we need to be in a strong
  position to argue for further funding for science.  We have to be able to
  demonstrate that to be in a strong position, a point the Chairman made, we
  benefit enormously from spending on science. It is plainly one of our great
  strengths in the United Kingdom in the first place, because we are hugely
  strong so far as science is concerned.  I was looking at some figures
  yesterday evening, one per cent of the world's population are in the United
  Kingdom; we fund 4.5 per cent of the world's science; we have 8.0 per cent of
  the world's published scientific papers; we have 9.0 per cent of citations and
  we have 10 per cent of internationally recognised science prizes. That is a
  position of strength.  What we then need to do on the basis of that position
  of strength is to find ways in which we can, through funding, make sure that
  we secure that position and that we get the benefits from it in terms of
  wealth creation, and so on. There is then the potential to get the virtuous
  circle, which the Chairman referred to, having a strong science base,
  commercial exploitation, wealth being created, more money, which we can then
  use to underpin the science base further. What I am acutely aware of is when
  one goes to the Chancellor arguing for more money, being a very prudent
  Chancellor the first thing he says is, "What are we going to get for it and
  what are the results going to be?"  This is one of those areas where after the
  first three years Spending Review we are beginning to be able to show good
  results coming through and I am confident that in a year or two years' time
  when the Secretary of state for Trade and Industry goes to the Chancellor for
  more funding he or she will have to be able to show the beneficial results of
  the funding that we have put in so far.
        14.      Picking you up on the effectiveness of the funding, do you
  actually show him specific examples, where you say, "This has been a
  successful idea, and this has been the outcome". Do you take real life
  examples? How do you decide that?  How do you convince him?
        (Mr Byers)  With the Treasury we do have public service agreements, which
  are targets we have to achieve. In some specific programmes, like University
  Challenge, then there are requirements to try and get a number of  companies
  spinning out from the universities. There are some specific requirements there
  as well. It is almost a contract, if you like, between the department, the OST
  and the Treasury.
        15.      How much of the pressure that you bring about on the Chancellor
  is your own belief in science and the advancement of science and the sciences
  budget, and how much of it, do you think, is pressure from the grass roots
  emerging from the scientific and technological community? I am just trying to
  asses whether if there was another Secretary of State they would passionately
  believe as strongly as you do, or whether it is the pressure from outside that
  is created for you to fight in the budget?
        (Mr Byers)  I am not a scientist by trade or profession but what I do
  know is how important science has been actually to our economy here in the
  United Kingdom, going back to the days of the Industrial Revolution, and it
  is going to be increasingly important as we move into this knowledge economy.
  Science has a huge role to play.  I remember the first time I spoke at the
  Lord Mayor's Trade and Industry banquet in 1999 I identified four areas which
  were priorities for me as the Secretary of State, one of them was science and
  the  importance of science, which I think surprised a number of people there.
  What struck me afterwards was the number of captains of industry who came up
  to me and said, "It was wonderful to hear a Secretary of State for Trade and
  Industry having science as one of his top four priorities". There is a case
  that has to be made. Essentially the position is that the science community,
  because they are in a position of strength, provide me with the bullets and
  it is for me to fire them to the best effect, and hopefully I am on target.
  That is a good relationship to have.
  
                               Mr Taylor
        16.       I am just passing a remark, it is quite interesting that William
  Waldegrave, now Lord Waldegrave, who was an excellent Science Minister, I was
  his PPS at the time before I then became the Minister, and he was quite a good
  chief Secretary of Treasury subsequently, I remember the spending round, where
  I was trying to remind him of his enthusiasm in science, I think you went the
  other way round.  I will also put on record that no doubt this Government has
  achieved many of the things we failed to achieve before 1997, there are much
  better settlements for science and also the Treasury is much more proactive
  in supporting it, again today.  Why is it in your references earlier to
  industry that industry itself, even if they like your speeches, do not
  necessarily follow through in devoting more money to the R&D? It is same
  sectors each year that are the jewels in the Crown.  A lot of other industries
  are still lagging well behind the international competition in terms of the
  amount put aside for R&D, what is it that has failed to help us change the
  culture, despite all of the initiatives we have been taking for ten years?
        (Mr Byers)  I think it goes back to the short-term approach that too much
  of British industry still has.  We see that across the piece as far as
  investment is concerned. Business investment is improving, but there are areas
  where we do not have businesses planning for the long-term.  R&D is seen very
  much as a long-term investment, that is part of the problem. It is a cultural
  thing. It is also the fact that we place requirements in terms of company law
  on directors to deliver for their shareholders in the short-term. We have a
  financial regime, financial support, which is very often short-term. We have
  not had until recently a tax regime which offers incentives as far as R&D is
  concerned. If we begin to change the climate, if business has the confidence
  that we have economic stability, we have inflation below target, at target,
  and we have interest rates at their lowest level for many years then that
  should give them the security to be able to invest knowing they are not going
  to be suddenly hit by a big increase in inflation or interests rates going up
  dramatically. That could begin to change the climate or environment within
  which business takes those decisions and decisions about spending on R&D. If
  we can combine the economic stability with a tax regime which is supportive
  of R&D spend we may begin to improve the relative performance of industry in
  the United Kingdom.
        17.      As you said earlier, we are in a knowledge-based society but,
  again, industry does not seem necessarily to value those intangible assets -
  the ability internally to produce R&D. You are stimulating them:  there was
  an announcement today which you may want to comment on later on intellectual
  property which I think is very welcome, R&D tax credits being for larger
  companies who work to help drug companies even more.   It is the rest of
  industry, however, particularly certain areas of manufacturing industry, which
  is simply not doing this.   Do you sense that these challenges that we set
  them - the University Challenge, the Foresight Challenge, the Faraday
  Partnerships - have penetrated sufficiently into those areas?
        (Mr Byers)    I think they have not, to be frank, and we need to do more. 
   We can do more in a couple of ways, one of which is a specific announcement
  in the Budget today which I think most members will not have picked up on
  because it is buried deep in the Red Book and I will briefly refer to it, but
  firstly we need to simplify some of the initiatives that we have.   There is
  a great danger that we, as Secretaries of State, have bright - or we think
  they are bright anyway - ideas and suddenly  there is a new initiative, a new
  challenge launched and a new programme is announced.  That can be confusing,
  particularly for people running businesses who say, "Well, you have a Faraday,
  you have a University Challenge, a Science Enterprise Challenge, what are all
  these balls up in the air?".   We need to be more focused and I have been
  trying through the Higher Education Innovation Fund to pull together some of
  these streams of funding to have a substantial amount of money which is going
  through the university sector but with a requirement that universities look
  outward and - hopefully - engage the sorts of companies you have referred to. 
   I think the idea of having almost a third stream of funding going into
  universities - not just for teaching and for research but for innovation -
  will be a very important development.   We now have  140 million in the
  spending review going into that third stream of funding, part of which will
  be used to go out and advocate the importance of innovation, but secondly we
  do need almost to do an audit of what the requirements are as far as business
  is concerned, which is why we announced this afternoon as part of the Budget
  statement that Sir Gareth Roberts, who is Master of Wilson College, Oxford,
  is  going to lead an independent study into the supply of skilled scientists
  and engineers in the United Kingdom, and the aim of this will be to see
  whether there are adequate mechanisms in place both for businesses to identify
  their needs for scientific and technical skills and to communicate them back
  to the higher education sector and vice versa, and we have asked Sir Gareth
  to report by the end of February 2002.   I think this is a very important
  piece of work; we are delighted that Sir Gareth has agreed to chair this
  independent study, and it will go some way towards identifying the sorts of
  problems you have just referred to.
  
                               Dr Turner
        18.      As you have already mentioned, the Budget has made several
  provisions today to try and encourage R&D and extend, in particular, tax
  credits to large industries as well as to SMEs.   There is still, nonetheless,
  a certain amount of, I suppose, cynicism as to whether British industry -
  particularly the engineering sector - will respond because they have shown no
  great sign of responding to challenges in the past and I wonder whether it is
  necessary to consider any other fiscal devices to try and stimulate this, for
  example, setting a minimum level of R&D as a percentage of  turnover in order
  to qualify for tax credits so if it is, say, less than 2 - no tax credits; 2.1
  - they get 2.1 per cent's worth of tax credits; and other devices like that
  perhaps to kick start them into action.   Have you considered that?
        (Mr Byers)    One of the reasons we are consulting extending the R&D tax
  credit to larger companies is to look at precisely those sorts of variations
  that might be possible.   There is an issue about whether it should just apply
  to additional spend over and above that which is presently being committed,
  or across the board; whether it should be incremental in the sense that you
  have just referred to.  These are all going to be issues we will need to
  consult on because the devil is going to be in the detail and we need to have
  a package of R&D tax credits which will achieve its objective - namely, to
  stimulate further investment in R&D but also to encourage those companies -
  of which there are too many in the United Kingdom - who at the moment do not
  invest in R&D to provide incentives for them to commit resources for the first
  time.   It is going to be our challenge to come up with a package that will
  achieve precisely that, and I think the idea that  you have referred to is
  going to be one of those issues we will need to address in the consultation
  exercise.
        19.      It is a sad commentary that you have to think in these terms
  because if their culture was in favour of R&D, as it is in other countries,
  this would not be an issue?
        (Mr Byers)    I know, but we are where we are and it is always surprising
  to me how a little financial incentive suddenly changes people's attitudes
  towards these matters!
  
                               Dr Gibson
        20.      It was a bit like a hurricane in there this afternoon with
  billions and billions floating about and we noted intellectual property was
  mentioned.   Would you say why you think that has to be addressed?   What do
  you see is the problem and why in the Budget was that taken up as a fairly
  major issue this afternoon?  What is the role of academia and how do they use
  intellectual property in the States?   What are the lessons that the
  government has picked up and addressed this afternoon in terms of intellectual
  property?
        (Mr Byers)   This is really at the heart of the knowledge economy; it is
  one of the building blocks.   If we are encouraging people to invest and 
  commit resources, then they have to know that the investment they are making
  is going to be secure. That means, when we look at intellectual property
  rights, people need to know that there will be legal protection for the
  investment they have made in the intellectual property they then have in a
  product or a mechanism.  What we can do and what we thought we should do is
  look at how the tax system could be used to provide further incentives in that
  particular direction so it very much complements the R&D tax credits that we
  have just been talking about because it is targeted in a specific way,
  recognising that knowledge and the application of knowledge and the protection
  of that is going to be very important.  If we can put in place a tax regime
  which, once again, provides support as far as developing intellectual property
  is concerned, then that will pay benefits in the medium and long term.
        21.      Do you think that academic life views intellectual property as
  just generating income for the library or sports centre or whatever and not
  as in America, where it is servicing public and life outside the university? 
  It tends to see it simply as an income generator?
        (Mr Byers)    I think you will probably  know better than me about the
  way these things are seen in the academic community but I do think the point
  is well made that all too often in some of our universities the potential of
  exploiting ideas beyond the campus is not always identified and that is partly
  cultural because of the nature of our university sector.  I do think it is
  changing and has changed quite dramatically over the last few years but there
  are still examples of where that is not the case and through the various
  initiatives we have launched, through the Science Enterprise Challenge, the
  University Challenge and now the Higher Education Innovation Fund, we are
  helping to build those bridges.   Within that context, however, I think IPR
  is a very good example of people perhaps just seeing it for funding within the
  university and not seeing it having wider implications beyond that.
        22.      Could I carry on and ask you about careers?  It is almost as if
  there is a general election pending with some of us are going around campuses
  talking about science, and it really is wonderful because it is so positive
  in terms of what the government has done, but one issue that keeps coming up
  time and time again is the career  structure.   Most of the science is done
  by young people and they feel they are under-valued.   They are not
  avaricious, millionaire types, but they just feel there is no career
  structure, only one-year contracts and so on, and a lot of the young people
  become lawyers because there is more money there; they do not want to but they
  feel it is not a real career job now, and that is a big issue.   Many people
  have identified this point and certainly I feel very sensitive when questioned
  about it.  We will have to do better, do you not agree, in terms of our young
  people seeing it as a career and paying them accordingly?
        (Mr Byers)   I was pleased that we were able to announce in the Science
  and Innovation White Paper an increase in the PhD stipend going up to  9,000,
  and that is getting in at the right level.   Clearly there is more that we
  might be able to do.   I know David Blunkett as Secretary of State for
  Education and Employment is looking very closely at what he might do within
  the higher education sector to support research and fund research students. 
   There is also a wider issue about the career structure - this issue about
  whether we have valued enough scientists and engineers in the UK.  I think we
  all know that in some quarters it is seen as being not the first choice of
  many parents or, indeed, students and that will take time, but if we are
  investing, and we are now, if we promote science and take a good deal more
  pride in science than perhaps we have done and if we can celebrate the success
  we do have, then all well and good.  This is why I think mapping the human
  genome has huge potential to engage people in what we are doing in the UK.  
  Having talked to young people as well, there are a number of people who got
  engaged by science and engineering in the late 50s/early 60s because of space
  and exploration - who knows?  We discuss science an awful lot.  If you look
  at what is happening, sometimes it is very controversial - whether it is GM,
  whether it is what is happening now with foot and mouth, BSE or the human
  genome - these are all areas where scientists are to the fore, and it may well
  be ironically that we will see a lot more interest from young people in
  science as a career because it is now commented on on a daily basis.
        23.      Are you aware that within universities you can have two or three
  tiers of post-graduate students in that Wellcome will always pay more?
        (Mr Byers)    I know, and will still pay more than our 9,000 stipend.
        24.      Yes, so they are driving it.   Do you not think it is time to
  have discussions with them and get one uniform structure rather than have
  these charity bodies - Cancer Research campaign and others - who pay more and
  give the department 5,000 or  6,000 for consumables.   So you have two tiers
  of students which does lead to a lot of problems within the department.
        (Mr Byers)   I think we need to get to a situation where we are providing
  adequate rewards, yes.
        Dr Turner:  I do not think we can emphasise enough the importance of not
  just encouraging PhD students but the really productive period of the years
  after completing your PhD.   Of course, most research fellows do not survive
  that: they go and do something else - get a teaching job or whatever.   They
  are really the richest seam of talent ---
  
                               Dr Gibson
        25.      They become MPs!
        (Mr Byers)    I was going to say, looking at the number of PhDs around
  this table ---
  
                               Dr Turner
        26.      It used to be quite absurd, when I was in that position people
  used to say  "Well, when are you going to get a proper job?"
        (Mr Byers)   They say the same to me now!
        27.      I think it could be suggested that what would make a great
  contribution towards the quality and productivity of British science would be
  the establishment of career research posts in universities which are like
  lectureships but predominantly research-based, and this could be a joint
  enterprise between DFEE and DTI.   I think it would go a long way towards
  raising the game of British science.
        (Mr Byers)    I think that is an interesting concept and we will have a
  good look at it.
  
                               Dr Kumar
        28.      Like Dr Turner, I was a research fellow for three years and
  another two years, which created a whole lot of uncertainty in trying to map
  out one's life and career and caused a great deal of concern, because you want
  support to buy a house and so forth, and because you do not have a career
  structure, you will not get the support.   Perhaps we could look at a big leap
  in this direction for post-graduate, post-doctorate fellows.  Just as it has
  been demonstrated by a government that science is very important, those 
  people who are going to make a future contribution to science, the small
  changes, though they are helpful, need a big shake-up, a big increase to
  demonstrate the government's commitment, and that will send a very powerful
  signal to the scientific research community in our universities.
        (Mr Byers)    But would we do this with the business community as well in
  a joint way, or would this be solely government-funded?
        Dr Kumar:   I certainly think that the government could play a very
  powerful role, sending a signal saying its commitment is strong to those
  fellows saying yes, government does care that they do not abandon their
  research after a few years and go on to something else.   Some people finish
  up in the city and make lots of money - a wise move.
  
                               Dr Iddon
        29.      I suppose I had better declare an interest from a reader in
  chemistry at university to MP with an increase in salary of  10,000 in 1997
  so that must speak as something for academics!  Secretary of State, we have
  talked to a number of organisations privately as members of this Committee and
  recently have been talking to quite a few and representatives of industry have
  identified a drastic shortage of good quality, and  I underline that, science
  teachers in schools. Recently we talked to the Chemical Industries
  Association, for example, who felt we ought to try and promote science
  teaching more in primary schools.   Now, there is some very good science
  teaching going on in primary schools but not across the board unfortunately. 
   Of course, science has moved from the DfEE from the Cabinet Office to your
  department, so what can the DTI do to promote good teaching?   Do you think
  you can do anything to get industry more involved than they are at the moment 
  -- some are very much involved but not all industry is involved -- and could
  you tell us something about your joint strategies with the DfEE.
        (Mr Byers)    We have been talking to the Department for Education and
  Employment about is how we can raise the profile of science in schools
  generally.   As a result of that there is going to be a science year in our
  schools which we will use as an opportunity to raise the profile of science.
  You will be aware I think that the Secretary of State for Education and
  Employment has put in place now a number of measures to attract scientists
  into teaching by providing them with a lump sum if they enter the teaching
  profession by ensuring that, in  those shortage areas which very often are the
  science subjects, additional support is given.  That is beginning to have an
  impact already and I think, if one looks at the applications for
  teacher-training posts in science subjects, what has been a decline over many
  years has now seen an upturn which I think is helpful and if we do get trained
  scientists who are teaching in our schools, then they will be able to enthuse
  young people. Part of the difficulty we have at the moment - and these are
  figures that I have not seen recently but when I was minister for schools I
  saw them - is that we have a very large number of secondary school teachers
  teaching science who have no qualifications in science and I think those
  people would be in an almost impossible position to enthuse young people, but
  with science training they will be in a far stronger position.   I think we
  need to recruit scientists to teach science.   Measures are being put in place
  by David Blunkett to do that and I think that will help in terms of enthusing
  young people about the importance of science.
        30.      Also we have talked to the biotechnology industry which is a sexy
  area for scientists to work in so it does not have a problem  attracting good
  quality scientists, but what it does have trouble with is managing the
  industry.   There is a great lack of skilled managerial entrepreneurs in this
  country to manage the industry - in other words, converting the ideas into
  products is the problem.   I know your department is doing something about
  encouraging entrepreneurs to come to the United Kingdom or to become existent
  in the United Kingdom internally or from outside.   What do you think we ought
  to do to overcome this problem that has been identified by the biotechnology
  industry?
        (Mr Byers)   In terms of the biotechnology industry there are a number of
  things we need to do - one is learn from the success of some other countries
  and if we look at the position in Bavaria in Germany, for example, they have
  seen a huge growth in the biotec sector because of the infrastructure they
  have put in place and because of the very beneficial tax regime which they
  have been able to establish through the Laender rather than through the
  Federal Government, and there are lessons we can learn there.   Also they have
  married together people who may not be scientists but who have entrepreneurial
  skills working alongside the scientists to develop the companies which are
  developing as far as the  biotec sector is concerned.   Whether it is the
  government almost acting as a marriage broker bringing together people with
  enterprise skills and entrepreneurial skills with scientists so they can work
  together in a productive way, we have certainly been looking very closely at
  that.   We have also been looking, as you mentioned, at the idea of
  encouraging people who could be elsewhere in the world but who have these
  skills to come to the United Kingdom and set up businesses here and looking
  at ways in which we can support a lot of financial incentives for that to
  happen.   So there is a package we can pull together.   It is not reinventing
  the wheel but there are good examples of what does work well elsewhere in the
  world, and we can develop a lot of that here in the United Kingdom.
  
                               Mr Taylor
        31.      I think you and I ought to be quite careful about saying that non
  scientists cannot enthuse people about science because you and I have both
  been trying to do that and we are not scientists, but you made a very
  important point about schools.   Are you keeping a watch on the curriculum
  because there could be thought to be a tendency to go for the softer side of
  science  curriculum which is not what we want to see when making sure our best
  people get the right training and then go on.   I remember talking to Lord
  Oxburgh at Imperial who has to spend virtually months now taking even double
  A maths 'A' level students and putting them through a learning course which
  used to be done in schools as part of the 'A' level.  In a sense, therefore,
  our best universities are having to train 'A' level students even if they are,
  by the category of marks they get, the best students of all.   I am worried
  about whether the curriculum is demanding and stretching enough.
        (Mr Byers)    Also I think the issue is the quality of 'A' levels as
  well.   I know there is a lot of work that is going on to make sure they are
  not being devalued in terms of the expertise that a young person sitting those
  exams needs to achieve if they are going to be successful.   It is true to say
  that, for understandable reasons, there has been a broadening of the
  curriculum and that may well lead to some of the problems you have identified
  but I am aware that David Blunkett certainly, as Secretary of State, who
  obviously has responsibility here, keeps the curriculum under review and would
  be the first person to take action if he felt in any  way that it was getting
  softer or the curriculum was not being useful.
        32.      The point of my question is that I also think it is your interest
  - ie, that when we look for the top academic results in university and then
  on to research we obviously want to bring in people from schools.   So it is
  on the one hand enthusing people about science who may not then become
  scientists, but at the same time making sure that those who are going to
  become scientists are stretched in schools and are prepared to go on to
  university and meet international standards.
        (Mr Byers)    I will certainly discuss that with David Blunkett.   Having
  worked under David when I was minister for schools, we still talk about these
  issues as it happens so I will take it up with him.
  
                               Dr Gibson
        33.      The Council for Science and Technology is probably the top level
  advisory body in this country but it does have a very low profile.   Could you
  tell the Committee if there is anything it has really contributed to the big
  scientific debates that you illustrated earlier - stem cells, GMOs and so on. 
   Do they report to the Cabinet?    Does the Prime Minister say, "What is  the
  position of this Committee on this issue, or that?", or does it come from
  other angles?
        (Mr Byers)    No, it does not. I occasionally will go along and sit in on
  their deliberations and they have done some very excellent work and they do
  report directly to the Prime Minister.   They are appointed by the Prime
  Minister and it is a classic dilemma really but I think they find they could
  get lots of easy publicity but not have much impact on government policy.  
  I think the view they take is that they are more effective if their reports
  are going directly to the Prime Minister and myself without a great fanfare,
  allowing us then to consider the issues they have raised, which then informs
  the development of government policy.   Looking here at the reports they have
  done recently, they have reported on science teachers developing the
  profession of science teaching in primary and secondary schools; the whole
  question of the exploitation of science and technology by United Kingdom
  business; and a review of the whole of science and technology activity across
  government departments - so they have been looking at those sorts of issues,
  and there are a number of other  areas which they are looking at in some
  detail.
        34.      But as a political animal do you think they do a good service by
  behaving in this subterranean way?  They may do good reports but nobody sees
  them other than the Prime Minister. Would it be better if they had a bit of
  a wider presence in the scientific community?  They are very eminent people.
        (Mr Byers)    I see the reports as well and I find them very helpful, and
  they do inform in the way in which they develop policy, and they do operate
  almost as a sounding board for the science community.   Of course, there is
  the chief scientific officer who probably advises on the more contentious
  issues - whether it be BSE or GM - and, of course, the chief scientific
  officer adviser is there on a daily basis and can give immediate advice.
        35.      He once told us he only reported to Peter Mandelson and not to
  the Prime Minister directly.   Is there a direct link to the Prime Minister
  now on scientific matters as in the States where the adviser speaks directly
  to the minister?
        (Mr Byers)    Yes. 
  
                               Chairman
        36.      I think it might be best if we understood that as he said he only
  reported to the Secretary of State, just in case there is any misunderstanding
  on that particular point!
        (Mr Byers)    Yes.   The Prime Minister has a great personal interest in
  science as well and enjoys the conversation and the discussions on science
  matters that he has with the chief scientific adviser.
  
                               Dr Turner
        37.      What is your view of the impact of the Foresight programme?
        (Mr Byers)    I think it has huge potential, and I have tried to raise
  its profile slightly.   We had a Foresight festival in December where we tried
  to get all the Foresight panel reports coming out at round about the same time
  in a ten-day period.  The Foresight panels involve people who are very
  enthusiastic and some leading thinkers in their own areas.   I have to say,
  we have given Foresight a lot more freedom in terms of the areas they can look
  at and I felt, looking at the reports in December, that they were rather
  variable in their quality.   Some were quite good; others I did not rate very
  highly at all. That is why I have asked Lord Sainsbury to do  a review of
  Foresight and the chief scientific adviser is carrying that through on a
  day-to-day basis.   Foresight can be a great force for good and we need to
  make sure we focus it.   We are providing extra money now and there is 15
  million going into develop some of the ideas coming out Foresight.   We have
  to make sure that is money well spent. I think we can prove Foresight; there
  have been good initiatives coming out of it, but I think we can do better.
        38.      How do you see it in relation to other programmes like the
  European Eureka programme and so on?
        (Mr Byers)    I think it is complementary but the great attraction of
  Foresight is it has a freedom and we have deliberately given people a freedom
  to think wild thoughts if that is the direction they want to go in.   It is
  quite difficult because some of the ideas coming out of some of the Foresight
  panels are potentially quite embarrassing, and I was slightly worried that
  they seem to be government-approved because some of them I certainly would not
  want to sign up to on behalf of the government, but I think they are regarded
  as independent bodies, which is good.
  
                               Dr Gibson
        39.      Are you prepared to give any examples?
        (Mr Byers)   No.   We will all have our own, I think! Perhaps after the
  Committee I might draw your attention to one or two ideas but I think that is
  one of the great strengths of Foresight - that they have that facility.   Some
  of them have done some very practical, very valuable work.   If you look at
  the manufacturing panel, for example, the 20/20 vision of manufacturing is
  very significant, and also links in the way in which manufacturing can feed
  into the science base in the United Kingdom, supporting innovation and so on.
  
                               Dr Turner
        40.      But you do not have a formal programme to measure the cost
  effectiveness and the success of Foresight programmes?
        (Mr Byers)    We obviously monitor the way in which Foresight operates
  but there are some ideas that we do not pick up and run with, so they might
  be seen to be a cost for no advantage but I do think, looking at it in the
  round, it is a programme which is worth supporting financially because the
  benefits we get outweigh those areas where perhaps we do not decide to support
  a particular recommendation or proposal.
  
                               Mr Taylor
        41.      For many years we have tried to increase the public understanding
  of science, or even the public appreciation of science to frustratingly little
  effect and it is now beginning to have a negative impact on government
  policy-making.   We have seen what I call the Melchett effect where the courts
  came to a ludicrous decision on Lord melchet's outrageous behaviour, and we
  have seen the public susceptibility to looking at non peer-reviewed science
  as if it was definitive earlier in the whole GM foods saga and, increasingly,
  the public's understanding of risk. All of this means that we ought to
  increase public understanding of science but we have failed to do so despite
  a lot of hard work and goodwill.   Is it something we should really spend a
  lot more money on and really get a grip of?
        (Mr Byers)    I think this is one of those areas where we all have a
  heavy responsibility. I am going to be making a speech on 20 March about how
  we can almost rebuild public confidence in science and the steps we need to
  take to do that but I think we have to be realistic ourselves that, because
  of these high profile incidents, whether over GM or BSE, the fact you then get
  a jury verdict  as we did in the Greenpeace case is a sign that we are behind
  the game at the moment, and there is a huge task for government but also for
  those people who have a wider recognition ----
        42.      Just interrupting, there is another area which is directly in
  your field of responsibility which is that of mobile telephone masts and
  understanding of that, because on the one hand with the 3G licences there need
  to be a lot more masts covering the country to provide an integrated network
  and, on the other hand, we are - or government is - thinking about planning
  permission even for masts up to 15 feet and certainly there is a lot of public
  concern because they do not want to hear all the science which is that there
  is no appreciable risk, which our committee reported on?
        (Mr Byers)    But we need to start off by acknowledging that there is a
  perception that there is a risk and we have to engage people in the arguments,
  and we should not just take it for granted that people are going to accept
  these things and that is the issue.   I would guess most of us in our own
  constituencies have had people coming to us worried about masts going up and,
  very often in a rather insensitive way, they have discovered there  is going
  to be a mast not very far from where they live, and there is responsibility
  on the Telecoms companies to engage people in discussions and dialogue.  
  Already there are a number of areas where people are concerned.  We are
  becoming more risk averse as a society and there is a danger that we are
  getting into this compensation and blame culture where the first resort is to
  go to law to stop something happening.   If we do that, then we are going to
  deny a whole range of opportunities to our country, and we do have to explain
  to people why change is necessary and why, in the end, we can all benefit from
  change, and it should not be seen as a threat.   That is a bigger argument but
  I think science and the public understanding of science is very important in
  that debate.   What does worry me is that we are increasingly moving to a
  situation which is not helped by the media, who are inclined to stoke up fears
  and manipulate people's views on what are sensitive matters in a way which is
  not really based on a well thought out or logical position but is often based
  on prejudice.   So there is a wider debate here that has to be held and I am
  very keen, as the Cabinet minister with responsibility for science, to put on
  record the  steps we need to take to restore public confidence because I do
  believe that, when we get behind the vocal minority and the true facts of the
  position, the vast majority of British people are prepared to recognise the
  importance of science and of progress, because that is part of our history
  going back generations.   We can achieve that but we start off from the
  position of recognising that we have ground to make up and, if we are honest
  enough with ourselves to say, "We are behind at the moment and the public are
  concerned", then we can put steps in place to reassure them and restore the
  public confidence in science and the importance which science has given those
  objectives.
        43.      Given that positive statement and the size of the task, my
  earlier question was should this not have a fundamental review about the
  resources which are allocated to it by government, even if it is then devolved
  to excellent organisations like the British Association or Royal Society to
  carry through the projects?
        (Mr Byers)    I am not sure it is a funding issue, to be honest.   I
  think it is an issue which in a sense, in terms of making the case, does not
  cost very much.   I think we just need to engage in  the debate.
  
                               Dr Turner
        44.      The public perception of science is, of course, of enormous
  concern.   If, for instance, the animal rights lobby cannot be contained we
  could lose our entire pharmaceutical industry as far as R&D is concerned in
  this country now that people who work with animals are coming under so much
  attack.  It would then be possible, for instance, to exploit the fruits of the
  human genome working, to name but one.   So it clearly is not money, I would
  agree with that, but it needs a very clear political impetus at Cabinet level,
  would you not agree, to get the message across? Would you agree that it needs
  somebody to take responsibility for it in Cabinet to drive not so much
  understanding but perception?
        (Mr Byers)    I accept that and I think that is something that I
  certainly intend to do and have been doing and why I want to make this speech
  on 20 March.  It is a wider responsibility, however, and we all know the
  example recently of Huntingdon Life Sciences where it was their bankers who
  basically decided they were no longer going to be involved.   We all have a
  responsibility here and, if the financial community walks away, then they 
  have to recognise they have a responsibility as well so government can lead
  and Huntingdon Life Sciences - Lord Sainsbury in particular - played a very
  valuable role in making sure in the end there was a funding package in place
  but I have to say I think those people involved in the bank concerned will not
  be able to look back with pride at the role that they played because they
  basically gave into a bunch of terrorists - it is as simple as that - and we
  all know that, when you start doing that, it is a very slippery slope for all
  of us.
  
                               Dr Gibson
        45.      Let me just ask you about devolution and the problems that might
  arise from that ---
        (Mr Byers)    Challenges, not problems!
        46.      You call them that; I think they are problems.   How do you
  foresee any problems or challenges with devolution?  Do you see groups having
  their own science programmes in Scotland and Wales?    How do we keep it all
  together?  How do we have a United Kingdom strategy for science in the case
  of devolution?
        (Mr Byers)   I have not seen any demand for that. I think there is a
  sense of coherence that comes from a United Kingdom wide approach to science
  and  science policy and having a science strategy.   My own view is that,
  providing we give a strong lead from Westminster and have a strategy that
  people can buy into and that means discussing with the devolved
  administrations what we are trying to do and achieve, then I cannot see the
  pressure developing for a separate approach in Scotland and Wales.
        47.      It has not happened yet but the Royal Society of Edinburgh, for
  example, has tried to evolve committees and structures and so on on an English
  model, if you like, and there is a little feeling there that Scottish science
  is the best. Have you heard that said before?
        (Mr Byers)    I have heard it said before  --
        48.      But you have never believed it?
        (Mr Byers)    I believe it plays a very vital part in ensuring the
  success of science in the United Kingdom, and I think we should play to our
  strengths - the strengths in Scotland, England, Wales or Northern Ireland.  
  I think we can achieve far more together if we have a United Kingdom wide
  science strategy than we would if we had a separate strategy for Wales,
  Scotland, Northern Ireland and England.
        Dr Gibson:  I think we agree.
  
                               Chairman
        49.      That is a good note to finish on.   It is not very often that the
  Secretary of State for Trade and Industry comes before this Committee three
  times in a Parliament; I hope it reflects our desire to see you as well as
  your longevity in the job.  We do thank you very much indeed for coming along;
  we had difficulty fixing this date and then, would you believe, the Budget
  comes along and we have to postpone the hour, but we have been very pleased
  to see you.   I think this afternoon's session has been a model of friendly
  and constructive dialogue:  we have not held back on the questions but I hope
  we have asked them in a civilised and courteous manner and you have been
  forthright in your answers but have given answers that have been truthful,
  honest and very helpful. In conclusion, therefore, may I thank you for coming,
  thank you for your help, and we are sure that together we will continue to
  look after the interests of science.
        (Mr Byers)    Thank you very much.