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Programme for Research: EUC Report

rose to move, That this House takes note of the report of the European Union Committee on the Seventh Framework Programme for Research (33rd Report, HL Paper 182). The noble Lord said: My Lords, first, I express the thanks of the sub-committee to our then Clerk, Anna Murphy, and our then committee specialist, Oriel Petry, for the excellent assistance that they both gave us in conducting the short inquiry that formedthe basis of our report. I also express my warm appreciation to all the members of Sub-Committee B for their diligent work on this inquiry and in producing the report. Our inquiry into the Seventh Framework Programme for Research was short, because of the pressure of other internal market issues before us at the time. We concentrated therefore on a small number of matters but recognise that there are many other important facets of research, development and innovation in Europe that we were unable to address. Today's debate may provide an opportunity for your Lordships to touch on some of these wider matters. I look forward in particular to the contributions of the noble Baroness, Lady Sharp of Guildford, and the noble Lord, Lord Giddens, who both bring enormous experience to debate on research issues. Member states of the European Union agree that strengthening the research base and increasing research and development as a proportion of gross domestic product is an important part of the Lisbon agenda aimed at ensuring that Europe can take on the challenges of an increasingly competitive global economy. The European Council and Commission aspire to increasing research and development in Europe from 1.9 per cent to 3 per cent of GDP by 2010, but in oral evidence, the Minister told us that the Commission has now lowered its expectations to an increase of just 2.6 per cent. In the United Kingdom, our figure is around the European average at 1.9 per cent, and two-thirds of that is done by companies. Research in universities and our research institutes makes a further valuable contribution, supported by public funding programmes and by the private sector. The latest research and development scoreboard published by the DTI recently analysed the top 1,250 global companies by research and development spend and the top 800 UK companies. Eighty-two per cent of global research and development is in companies based in just five countries—the USA, Japan, Germany, France and the United Kingdom—with Taiwan and South Korea growing significantly and China beginning to grow quickly from a verylow base. Sixty-one per cent of all that globalresearch and development is undertaken by the top 100 companies; and 70 per cent of all research and development is just in five sectors—technology hardware, pharmaceuticals, automotive, electronics and software—while aerospace and defence companies are growing research and development fastest. In this country, we are particularly strong in pharmaceuticals and aerospace with research and development in software and financial services companies growing in importance. Remarkably, of the top 800 research and development spending companies in this country, 119 are software businesses. Private sector investment is of course influenced by the general business and taxation environment—including taxation incentives—but also by the research and skills base of a country. It is important that the research skills base is maintained and grown. Our universities have an important part to play in that. At the European level, the main programmes to support research have been what are called the framework programmes. It has been said to me already today that that is not the most meaningful phrase to use to communicate with the general population, but that is the name given to the programmes. The sixth programme, covering five years, ends on 31 December. The seventh programme, which will cover seven years, comes into full operation on 1 January next year. The budget for the seventh programme over seven years is some €54 billion—about €7.7 billion per annum. That compares with around €5 billion a year in the sixth programme, a significant increase reflecting the importance attached to it by the Council of Ministers. Chapter 1 of our report summarises the research and development programmes. There are four broad objectives. The first is to support co-operation between industry, universities, research centres and public bodies to gain leadership in key scientific and technological areas. This is allocated 60 to 65 per cent of the budget. The second is to promote and fund basic frontier research. This will be the responsibility of a new European Research Council, which I shall say more about later. This will take 15 to 20 per cent of the budget. The third is to train and to provide mobility and careers development for researchers through a range of schemes, known generally as the Marie Curie schemes, and will take 10 per cent of the budget. The fourth is to strengthen research and innovation capacity throughout Europe. This will take the final 10 per cent of the budget. Funding is expected to support nine priority themes, which are set out in paragraph 12 on page 8 of our report. In addition, the seventh framework programme covers the Euratom research framework programme, although the committee did not consider that in its inquiry. We invited and received written evidence from the CBI and Research Councils UK and took oral evidence from the noble Lord, Lord Sainsbury, the Minister responsible for this policy area. In our discussion with the Minister, we covered seven issues, set out in paragraph 18 of our report. Your Lordships will be aware that we took his oral evidence in February this year. That is a long time ago now, and things will have moved on in several areas. No doubt the Minister today will bring us up to date. On the overall budget, we sought to clarify the likely outcome of the then gap between the Commission’s initial budget proposal for some€76 billion and the likelihood that this would be reduced significantly. The final outcome, as we now know, is a budget of some €54 billion over seven years. This is still a significant increase, which we welcome. In its written evidence to us, the CBI told us that there was little evidence that the research framework programmes have given Europe a widespread economic advantage, and still less evidence of directly attributable competitive gains for UK businesses. In his oral evidence to us, the Minister took a more positive view of the impact and importance of these research programmes, but acknowledged that, although industry still participated in the European programme, he was concerned that participation by industry in the UK and across the EU had reduced in the last five-year programme. Will the Minister reassure the CBI today by giving practical examples of where past research programmes have borne practical results in innovation and products in the market place? It is always dangerous to expect results too quickly, but we are now on the seventh programme and we should be able to convince industry that this really does pay off. The Minister agreed with the CBI that the largest part of the new programme should concentrate on research aimed at more direct applications andshould be industry-driven. He told us that these objectives would be met by placing industry at the heart of European technology platforms chargedwith identifying large-scale industrial research and development challenges and with developing a strategy—the so-called strategic research agendas—to deal with them. Crucially, the Minister strongly supported the proposal that the most important of those strategic agendas should be taken forward by joint technology initiatives—long-term private-public partnerships. We discuss these very important matters on page 12 of our report. The joint technology initiatives are a major change in the identification and delivery of improved research that is of more immediate value to industry. We welcome this new approach. It will be criticalto improving the participation of industry in a European research agenda, and to the success or failure of the seventh framework programme, so far as industry is concerned. Difficult though it is, more effort should be made to set clearer target outcomes and timelines on investments through the joint technology initiatives. When we met the Minister, he was unsure what monitoring and reporting systems would be in place for the initiatives. Will he tell your Lordships today whether there has been any progress in this area? He also conceded that businesses believe that the framework programmes are too complex and bureaucratic and that changes must be made. The Government’s response to our report gives more detail on how, in their view, the Commission is seeking to tackle this problem. Is he optimistic that good words will turn into good deeds? The second broad objective of the framework programme is to promote and fund basic frontier research. To this end, the European Research Council has been established and a scientific council appointed as an academic body to determine the council’s strategic strategy and to ensure that it operates on the basis of scientific excellence. As many of your Lordships will be aware, the scientific council will be chaired by the noble Lord, Lord Patten of Barnes, and two of the 22 members of the council—the noble Lord, Lord May of Oxford, and Professor Wendy Hall of Southampton University—are from the UK. We welcome the establishment of the European Research Council, and the strength of its scientific council is greatly encouraging. It can make a real difference to developing a coherent and productive programme of European frontier research. It is vital that its independence is strongly upheld in the years ahead, and that its decisions will always be based on excellence and merit. My committee was less persuaded by the Commission’s proposal for the establishment of a European institute of technology. When the proposal was initially floated, it appeared to be modelled on the Massachusetts Institute of Technology. There had been considerable doubts about the idea of creating a top-down academic institution. In his oral evidence, at question 68 on page 11 of the minutes of oral evidence, the Minister told us: "““I think the idea of a European Institute of Technology is quite unhelpful, frankly. We remain very sceptical about it””." Many commentators emphasised the need to strengthen existing universities and research institutes across Europe in order to ensure that more of them are world class and to strengthen further those that are already world class. Since we reported, the European Council invited the Commission to bring forward a formal proposal, which was published on 18 October. It aims to have a European institute of technology in place by 2009. In October, the president of the vice-chancellor’s organisation of Universities UK commented that although the proposal is now better defined, they still have some serious reservations. First, will funding of the European institute of technology impact onthe European Research Council’s budget and its priorities? Secondly, what problems will there be if the institute of technology seeks to award its own degrees? Thirdly, will it really add value or will it threaten some of the many collaborations which already exist between universities and industry? What is the present view of the Government on the proposal and what answers would the Minister give Universities UK on its continuing concerns? The third objective of the framework is to strengthen training, mobility and careers development for researchers within the context of promoting excellence in European research. This will continue to be delivered through Marie Curie schemes in order to develop research skills and training capacity, which we warmly welcome. The UK research councils told us that these programmes have been strongly beneficial to the United Kingdom and have added value at the European level. They had some concerns about the topping up of national programmes and how that is affected by the European scheme. What progress has been made in meeting the concerns of the UK research councils? The final area of interest to our committee was the relationship between the EU competitiveness and innovation programme, EU industrial policies, structural funds and these research programmes. Each of these is of great importance, but they offer the potential for overlap, confusion, and complexity. The Minister told us that the Government shared our concern. In September, the Commission publisheda European Union innovation strategy—Putting knowledge into practice: A broad-based innovation strategy for the EU. My committee awaits legislative proposals in this area and will look carefully at these matters as well as at the positive benefits that a vigorous and well constructed innovation strategycan bring. Research and development lie at the heart of competitiveness, improving standards of living and the quality of lives. The framework programmes are just part of responding to the challenges and just part of the solution, but they are an important initiative at the European level and demonstrate the value of strengthening our diverse but large internal market in ideas and research communities. I look forward enormously to the debate. I beg to move. Moved, That this House takes note of the report of the European Union Committee on the Seventh Framework Programme for Research (33rd Report, HL Paper 182).—(Lord Woolmer of Leeds.)