Select Committee on Science and Technology Minutes of Evidence


Examination of Witnesses (Questions 1-19)

THE RT HON PATRICIA HEWITT, LORD SAINSBURY OF TURVILLE AND DR JOHN TAYLOR

Wednesday 19 December 2001

Chairman

  1. Can I welcome our guests here today, the Secretary of State for Trade and Industry, the Minister for Science and Innovation and the Director General of Research Councils? Can I say how pleased we are to get you so early in the process? We are deliberating about the issues we feel are so important for the development of the British economy. We know that science and technology are a major feature and we know that you agree with us on that, so we are trying to help in the process of moving it all forward. We look forward to this session very much. We are in abundance here today, which shows how very determined we are to move things forward. Thank you very much. I think if the Minister wants to deflect a question to one of her colleagues that is fine, we are very happy to do that. We want to get the best out of everyone here today. Can I start off by saying that we are very pleased we had the memorandum from you and the implications for the OST of the DTI Review? In a written Parliamentary question on 9 July you said, Minister, "there is no separate Review being carried out at the Office of Science and Technology". Does this mean there is no separate review or does this mean that it took place and you concluded that everything was hunky dory in that division? Did you, in that Review, consider at all the OST being a freestanding partner or sending it back to its home in the Cabinet Office, where it once was?

  (Ms Hewitt) Thank you very much indeed, Chairman. What we looked at in the Review was really the organisation of the DTI. We, therefore, looked at the relationship between the DTI's work specifically and the work of the Office of Science and Technology, which, of course, is cross departmental. It was very clear to me as we went through that Review, and indeed to all of us, that the Office of Science and Technology is doing very important and actually rather successful work right across government. We have Dr Taylor's work as Director General of Research Councils and, of course, there has just been a quinquennial review of the Research Councils, we might want to come back to that, we certainly did not want to repeat that review. We also have the Chief Scientific Adviser reporting directly to the Prime Minister, to him and indeed to the Cabinet as a whole. I certainly did not think it was within the scope of the review of DTI and how we work to start going down the track of whether those arrangements might need changing, they certainly seemed to us to be working well. What I was primarily concerned about was how we match the work we have been doing to support Britain's outstanding science base with increased work to ensure that we are commercialising out of that science base, that we are transferring knowledge and technology into business and industry across the economy and, perhaps, most important of all, we are building an understanding of science and technology and a demand for the products of the science base within British business and industry. That, of course, is why we have concluded, as part of the reorganisation of the DTI, we need this new Science, Technology and Innovation Group. What I think we will have coming out of the review, I hope that was conveyed in the memorandum, is a much stronger and effective relationship between the Office of Science and Technology and the DTI's core work. We will not disrupt—indeed for other reasons we will be strengthening—the work that is being done in relation to the pure science base and, of course, the work of the Chief Scientific Adviser generally.

  2. Does that mean that the knowledge transfer schemes that are now with OST are going to transfer to the new unit or will they still stay where they are?
  (Ms Hewitt) We are looking at that at the moment. Dr John Taylor is acting as the Head at the moment of the new Science, Technology and Innovation Group, as well as continuing with his Research Councils' job, with a remit of designing and building a new group, which we want to have up and running along with the rest of Department's reorganisation in April of next year. We will go out in January for a public recruitment for the new permanent head of that new group.
  (Dr Taylor) I think the design of this new organisation is actually going quite well. The model I think that everyone is comfortable with is that the activities currently in the Science Budget to do with knowledge transfer basically should stay there but that the activities in the new STI Group will pull together at Director General level for the first time a whole set of activities in DTI to do with science, technology and innovation. We are going to set up a new tight management group which will co-manage the interface between what goes on in the science base on push and what should be going on in the industry side in pull. What you will see as this new group gets together is much more effective co-management of the way those two sets of things work together. I think it has been very interesting, not to say exciting, to see the results coming back from the studies we have done lately on the rate of innovation going on in the universities and out of the universities, dramatic increases over the last three or four years in the rate of start-ups, and so on. It is really shown very clearly that in research intensive universities, both the generation of new knowledge and the training of very skilled researchers, and the knowledge transfer activities are all going on in a very closely interlinked kind of way. To try and dissect part of that out from that would be a reversal of what everybody has been trying to do very hard. We are going to provide much clearer interface through the new RC-UK organisation into the activities that go on there.

  3. You do not think there is a danger you are creating another chief scientist in the DTI, do you? You will have chief scientists coming out of your ears soon! You already mentioned Professor King, we have the Minister with us here, is this going to be another chief scientist?
  (Lord Sainsbury of Turville) Professor King is, of course, the Chief Scientific Adviser for the Government as a whole. The new head of the Science Technology and Innovation Group will be, amongst other things, the Chief Scientist for the Department, just as, for instance, a new chief scientist has been appointed at DEFRA. There are chief scientists in various other parts of government. I think it is an important part of Professor King's role that he is the head, if you like, of that scientific expertise and profession right across government. It is not David King's role to be particularly the DTI's Chief Scientist any more than he is the Chief Scientist for any other department, he is the scientific adviser for the whole of the Government.

Dr Iddon

  4. Members of this Committee, Secretary of State, have been rather worried in the past about the lack research in some major departments of state. I cite just as an example, it is not the only example, the old MAFF where the scientists were not available at a critical moment in MAFF's history. Will the creation of this new post in your department and the creation of similar posts in the other departments strengthen the science base across all major departments of state, do you think?
  (Ms Hewitt) Yes, I believe that they will and I think it is essential that they do. I think your concern was widely shared, not least by Margaret Beckett, who has made the appointment of a new chief scientist within the new department within DEFRA. David King was involved as Chief Scientific Adviser in that appointment and I believe I am right in saying for the first time the R&D budget of DEFRA is now increasing in real terms. I think one of the roles that I can play as the Cabinet Minister responsible for science is particularly through the new Cabinet Sub Committee on Science to ensure that right across government colleagues are aware of what does need to be done to strengthen not just scientific expertise within government but the use of that expertise and its communication to the public at large.
  (Lord Sainsbury of Turville) I think there is a real need to have the Chief Scientific Adviser of government keeping what in industry we call a functional responsibility across government to make certain that science in all government departments is of the calibre that it should be and making certain that where necessary we bring people into those posts, so that we have people who have been doing scientific research in recent years rather than doing administrative tasks and, therefore, fully in contact with top scientists in that particular field. I think the appointment at DEFRA is a first example of this, which is very important in maintaining the standards of science across government.

Chairman

  5. You are also Minister for Women as well, I just wondered if we might see a woman scientist in this position, a woman businessman or a woman civil servant, how open is your thinking in all this?
  (Ms Hewitt) When appointing a woman you do not have to be very open in your thinking to want to ensure that you are recruiting from the whole of the talent pool, not only half of it. If you are talking about the appointment of the new head of the Science Technology and Innovation Group that will be an open recruitment, in other words we will invite applications from within the Civil Service but also from the entire community. The specification for the job and the individual who we are looking for is being drawn up at the moment but obviously we want somebody who has got a strong expertise in science and technology but who also has some real expertise in the transfer of knowledge and technology between the science base and industry itself. It will be surprising if this person had not worked pretty closely in or with industry. Yes, it would be wonderful to get a woman in that post, we will have to see what we can do.

  6. Keep your fingers crossed.
  (Dr Taylor) Can I just add to that? In the last twelve months we have appointed the first woman chief executive of a Research Council and the first woman chairman of a Research Council. In both cases they were entirely on merit.

  Chairman: Radical changes all round, great.

Mr Heath

  7. Secretary of State, that collegiate approach sounds fine, but where is the mechanism that ensures complementarity of disciplines you have in different departments? How do you make sure you have a reasonable spread of expertise across the Government which can advise government in the most effective way?
  (Lord Sainsbury of Turville) I know this is an issue and one of the issues we are addressing at the cross-cutting science review—the part of that which is dealing with other government departments, which David King is leading, as part of the Spending Review, looking at the science and innovation strategies of each government department. We now require each government department to have a science and innovation strategy. The Spending Review is a good opportunity to review those to make certain they are focused on what is necessary to help decision making in that department, and equally to ensure that there are not overlaps or gaps across government. For example in areas like energy research or drug abuse, a number of departments have an interest in these and we want to make certain in planning that research does not duplicate things and equally we do not have gaps. The only way to do that is part of a planning process.

  8. I think it is the gaps I am more worried about. Epidemiologists come to mind as not being always available when you want them.
  (Lord Sainsbury of Turville) I think this is an issue. If there are areas like that then this is the sort of point we want to follow up at this stage.

Chairman

  9. If I can follow on, the Biotechnology Directorate: how is that going to be organised? You have four pillars in your structure that cross all of them; how is that going to be dealt with under the new structures for science and technology? Will it cross the pillars?
  (Lord Sainsbury of Turville) As you will know in the Review there are the people who are dealing with business relationships and obviously they will deal with the relationships with the biotechnology industry. Where it is a question of designing new schemes or looking at how we diffuse new technology then clearly the Director General of the Science, Technology and Innovation Group will have a large part to play in that.

  10. I wonder if I can just lob the usual question to you about R&D in this country. We have just seen the figures and we are way behind, apart from the pharmaceutical industry. What plans have you got to stimulate percentages to creep up? What is the investment in the different sectors of industry?
  (Lord Sainsbury of Turville) I am sure you will also note that the food industry is also ahead of the game in national and international statistics. I think this is a big issue and that is why we are looking, as you know, in the Pre Budget Report at the whole question of an R&D tax credit for large companies as well as with small companies. We are looking at how we design that to give a real stimulus to R&D in big companies. There has been an encouraging trend upwards on the R&D figures and the important task now is to make certain that does not fall back during the period of low growth we are going into.

  11. We could argue how it compares with different countries, and so on, in percentages; in general there is a lot to do, would you agree?
  (Ms Hewitt) If I can come in on that. We are all quite clear that we need to see both public and private sector R&D increase significantly. Of course, as this Committee knows well, we have been very substantially increasing the investment in the science base over the last four years and that will continue to be the case. We are looking at the cross-cutting review of science going on at the moment as part of the 2002 Spending Review. The incentives to the private sector to increase its R&D are even more important than what we can contribute in the public sector. The outcome of the Chancellor's and my consultation on the design of R&D tax credit is very important.

Dr Turner

  12. Secretary of State, one might hope, it may be a highest hope, that the Government puts its money where its mouth is and increases government spending on research and development and that industry will follow their example. Do you see any evidence of this really happening because it is not immediately apparent at the moment?
  (Lord Sainsbury of Turville) It is frustrating and as your Chairman rightly said there are only a few sectors where private sector R&D spend is at or above world class levels, so we need to increase it. One of the things that I observed is that one of the main reasons why the United Kingdom has remained the number one location for foreign direct investment into Europe is the strength of our science base. We are getting more and more foreign companies investing in the United Kingdom in part because they want a partner with one or more university departments, they want to use the outstanding science and technology and engineering graduates that we are producing, they want to do leading edge research here. A recent example of that is the Boeing partnership with the metals department at Sheffield University and with the Welding Institute. What I think we need to do is not only to continue to attract inward investment and market our science base to those potential inward investors, we need to be much more active in building partnerships with British-based businesses, businesses who are already here, who have not thought about what the science and technology base could actually do for their business. We have made a start on that in a number of different sectors but there is much, much more we can do. That is going to be one of the chief missions of the new Science, Technology and Innovation Group.

  13. In the 2000 settlement from the previous Comprehensive Spending Review the science budget did quite well, with a 7 per cent year-on-year increase. Were that to be maintained it would be very good news for the future of British science. Is this your aspiration, to be able to maintain at least this level of growth?
  (Ms Hewitt) I am not going to pre-empt the outcome of the Spending Review, indeed I have not yet got my bids to the Spending Review, so I am not going commit to those bids either. We do have a cross-cutting review of science, which Lord Sainsbury is leading. We are very clear that the investment we have made so far in the science base and in the commercialisation of that science base is proving enormously successful. We are also clear, I think, despite the fact we have gone a considerable distance to make up the under-funding of the previous 10 years or so there is still an awful lot more to do, so I anticipate making a fairly ambitious bid to the Chancellor as a result of the cross-cutting review.
  (Lord Sainsbury of Turville) We will put in an ambitious bid. Obviously the circumstances are more difficult now than they were at the last Spending Review. I think there has been a very considerable period of under-spending, we have turned that round and we are now going in the right direction. There is still some way to go. It is a rather uncomfortable fact that if you look at the Forward Look statistics, in spite of a very substantial, real increase which will take place as part of this Spending Review, in total terms, real terms, we will be spending less across the whole of government than we were in 1988. I think there is a long way to go but we are heading now in the right direction and we will try and push that forward.

  14. You are confident of making a good case for science and technology in this cross-cutting review. Does the fact that it is a Treasury-led exercise give you any cause for concern?
  (Ms Hewitt) Not at all. I think the Chancellor and Treasury colleagues have demonstrated in the last four years their commitment to the United Kingdom science base. There has been a very, very substantial increase in funding and indeed the science budget in the current year is £1.7 billion. There is a very substantial investment being made there. We hold that budget, which is ring-fenced, in a sense, on behalf of government as a whole. As I say, its value is very well understood in the Treasury. The issue, of course, will simply be that there is already very substantial increases in public spending plans in the current Spending Review period and there are enormous demands within the public services, as all of us are aware, and so we will be competing for resources against a number of other very important priorities.
  (Lord Sainsbury of Turville) One of the encouraging things is that we can now point to the extraordinary change that is taking place in universities with spin-off companies, where we have gone from an average of about 70 a year to nearly 200 a year. We can point to the rate of patents going up very strongly, the proportion of university research which is funded by industry, and I think these are very clear indications which will be putting to the Treasury of how valuable this money now is in terms of our economic performance.
  (Ms Hewitt) There is a very nice figure which came out from the review we have just done of this commercialisation and knowledge transfer which will commend itself to the Treasury that our universities have managed to identify one spin-off firm for every £8.6 million of research expenditure, in Canada they get one spin-off firm for every £13.9 million of research expenditure and in America they need to invest £53 million to get one spin-off firm. We are getting very high value for money in our investment in the science-based fields.

  15. Do we know what the relative turnover of spin-off firms are?
  (Ms Hewitt) Not yet.

Chairman

  16. When will our bid be going in?
  (Ms Hewitt) It will all be going in in the early part of new year. We would expect to get the results of the Spending Review by the summer of next year

  17. Do you think a concerted back up campaign will help or do you feel that confident you do not need any—?
  (Ms Hewitt) I am sure that this Committee and others who understand the importance of the science base will be helping us make that case.

  18. So, it is Newsnight with Jeremy, is it?
  (Ms Hewitt) There will be discussions amongst colleagues as well. We do not have to do all of these things on television.

Dr Turner

  19. Could I ask a question to Dr Taylor? You are moonlighting at the moment, doing two jobs? Can you assure us that you will be able to keep your eye on the preparation for the Spending Review because it is so crucial?
  (Dr Taylor) Absolutely. As all of us do moonlighting several times over, we have-cross-cutting reviews, spending reviews, quinquennial reviews, and so on, and the preparation for the Spending Review is a pretty well organised process that we have been running right across the Research Councils since the beginning of this year. I think we have done a fairly thorough, systematic first cycle of the RC-UK approach to life in getting that going. I am very confident that my colleagues and my staff are well ahead on that. I am certainly keeping a very close eye on it, and on the relationships between the Spending Review proposals and the cross-cutting review, which raises a whole lot of wider issues about funding in universities, and so on.


 
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