To call attention to the contribution of science, technology and engineering to the United Kingdom; and to move for Papers.

My Lords, it is very appropriate that we should have this debate on a European election day, because science, technology and engineering are becoming more political and more central to our lives and are part of our membership of the European Union.

I say this for two reasons. First, we look to science, technology and engineering to solve our problems, such as coping with climate change, looking after an ageing population, feeding a growing population, finding new sources of energy, lifting billions out of poverty, competing in today’s globalised knowledge economy and even fighting terrorism. The list is endless.

The second reason why we are going to hear a lot more about science and engineering is that of balance. Although an economy leaning heavily towards financial services served us well for a number of years, it has turned out to be unreliable. The economy emerging from this crisis needs to be more evenly balanced and spread. This is Prudence in her latest guise. Much of the burden of achieving this will fall on science, technology and engineering, which must take the strain. I believe that they can because we have all the ingredients—some good and some not so good—to create a balanced economy. What we must find is the will and the skills to marshal them effectively.

These elements are not just science, technology and engineering taken in isolation; there are social and cultural factors, too. A society that accepts and does not demonise technological progress is important. A balanced economy requires a culture that accepts new knowledge and technological progress as well as the institutions that seek it. It requires us to create and nurture businesses and companies that use science, technology and engineering to bring about economic and commercial progress. I think that we have such companies to a much greater degree than is normally accepted. Amazingly, we also have a number of charities devoted to developing science, technology and engineering, and I pay tribute to those who set them up.

But having these individual ingredients is not enough. They have to be brought together in order to be marshalled effectively. We have institutions such as the Technology Strategy Board to do that, as well as the knowledge transfer networks that bring a new and different focus on innovation. We also have to bring different cultures together. Science, technology and engineering need the social sciences to help us to solve our problems. How can we persuade people to change their ways so that we are able to cope with climate change?

Like Martin Luther King, I have a dream. My dream is that all these elements and centres of excellence will come together. The result will be a balanced economy. Let us take a closer look at each of these elements and see whether I have reason to be confident. Mine is an overview, because other noble Lords know an awful lot more about each of the individual elements. However, science, technology and engineering are changing our society whether we like it or not. You only have to use the phrase “Digital Britain” to demonstrate how accepting of new technologies we now are. Technology has changed our lives in ways that we find useful and acceptable, but that has not happened purely by accident. We used to think that, in order to persuade people to accept science, all that we had to do was explain it—the noble Lord, Lord Jenkin, chaired a committee that produced an important paper on this. But that view was too simple and too condescending. We now know that science must understand the concerns of society. Indeed, many institutions in this country are dedicated to doing this: universities, charities, museums, science learning centres and media centres. Also, National Science and Engineering Week engages thousands of people from the bottom up.

All this is dedicated to building mutual trust. In fact, mutual trust helps scientists and the public to make more informed choices. Trust also enriches the culture of science, which is especially valuable when the public have to choose between opposing views on issues such as MMR. Instead of making decisions based on prejudice, people make judgments based on the values of those making the case. As long as we do not underestimate the public, we will progress towards making science, technology and engineering socially acceptable. Much of this has been brought about by the great institutions that have become part of our culture, such as the Royal Society, the Royal Institution, the Royal Academy of Engineering and the medical colleges. All are proudly dedicated to continuing education and knowledge and to raising standards among people working in their specialties.

Central to the role of science, technology and engineering in our culture, society and a balanced economy are our universities and colleges. Others can elaborate better than I can, but our universities and colleges perform pretty well in terms of papers and citations. Writing in Science magazine, Tony Blair said that,

“the science base is the absolute bedrock of our economic performance”.

So it is disappointing that, in the recent Budget, the science research budget is to be cut by £106 million, even though this money is to be reinvested in key areas of economic potential. I hope that the Minister can put our minds at rest on this.

Science education does not start at university. It starts at school. In my time, science and technology were for the dumber students like me. Fortunately, this has changed, partly thanks to the popularisation of science. The current obsession for forensic science, stimulated by television and news programmes, teaches students a lot about science without them realising it. Thanks to organisations such as STEM, with over 18,000 ambassadors—yes, 18,000 and rising—to schools and colleges, young people are having their feel for science, technology and engineering turned into something more real. Science, technology and engineering are not second class any more. The ambassadors also do valuable work with young people’s concerns about the environment. We have to persuade them that science, technology and engineering need not be dirty and polluting. These ambassadors do valuable work in that area.

The last few years have seen science, technology and engineering become embedded in our political life and in the Civil Service. The Office of Science and Technology was created in 1993 by a Conservative Government carrying out a promise made in a Labour Party manifesto. Is science transcending politics? I hope so. We have a Chief Scientific Adviser who reports directly to the Prime Minister and a scientist in most government departments. Scientists are central to the green agenda, and even the security services have recently appointed a scientific adviser. However, we are still waiting for the Treasury to appoint one. We are well served by our own Parliamentary Office of Science and Technology, and we must not forget the work of the parliamentary Select Committees. No other nation in the world has a structure like that. The new American Administration are moving towards it; when appointing several scientists to senior posts, President Obama said that “promoting science” is,

“about ensuring that facts and evidence are never twisted or obscured by politics or ideology”.

I say amen to that. It seems to me that socially, culturally, academically and politically we have the ingredients to fulfil my dream of a balanced economy.

What about business and industry? Do we have sufficient commercial strength? Over the past 25 years, we have relied on consumer spending and financial services to expand our economy. As a result, industry has declined from about 30 per cent of our GDP to 17 per cent. It is this that we have to reverse at a time when private spending will be far more restrained.

There is some good news. Our ability to attract inward investment demonstrates that Britain is a good place to do business. Things are changing. We are breaking down the artificial difference between manufacturing and services. We are breaking down the barriers between pure and applied science. Moreover, the financial sector will also have to reform its priorities. Balance means thinking in industrial terms as much as financial. This means moderating demands for the short-term results looked for by many financial institutions, which conflict with the longer-term needs of scientific and technological development. Surely this is a prime example of the need to moderate sectional interests in line with the national interest.

But our industrial base is small. We cannot do everything; we need to choose. There is a great deal of talk about the future being in low carbon. The recent Budget earmarked nearly half the strategic fund for this purpose. But this is a risky business, because low-carbon energy is likely to remain more expensive than the traditional sources.

There are many other economic opportunities, however. An illustration is the 11 potential sites for nuclear power stations that have been identified: 40 per cent of the cost is in their building but 60 per cent is in the equipment that goes into them. John Rose of Rolls-Royce recently listed this work: high value-added manufacturing, robotics, electro-mechanical engineering, materials science, complex software and control systems, and, the Minister will be pleased to hear, all this on the back of a privately financed project.

Is this not a good focus for the strategic fund announced in the Budget? Is this not an opportunity to bring our businesses up to date in these new technologies so that we can compete internationally? Is this not an opportunity for businesses large and small to commercialise new techniques? I hope that the Minister will say something about this fund.

A key ingredient of a balanced economy, of course, is innovation. Not only does innovation find new and better ways of doing and making things, but it is also required to deal with society’s problems. How do we design hospital fabrics and furniture so that they look good, perform well and help to get rid of MRSA? These interfaces are where a lot of innovation happens nowadays and make it less risky.

There used to be a wide range of organisations aiming to improve the technology and innovation capability of British business. The task of joining them up and marshalling them was given to the Technology Strategy Board. To this has been added the task of responding to the challenges that society makes on business and industry for things such as low-carbon vehicles, intelligent transport systems, low-impact buildings and assisted living. We seem to be achieving some focus thanks to the various innovation platforms that have been prepared by the TSB.

Some of this work takes place through the knowledge transfer networks. I declare an interest as honorary president of perhaps the largest one, Materials UK. Again, these networks help to make innovation happen rather than just leaving it to chance. This work is important because business will not automatically do these things on its own. This kind of joined-up working is better developed here than in most other countries. Even so, it can be and must be done better because the TSB and its networks are an important part of our balanced economy.

In the short term, we all know that the urgent problem is to ensure that business and industry have the credit available to survive the current crisis and to hold on to their staff and to their skills. But I think that later there is a good chance of my dream becoming a reality. Recessions stimulate and accelerate change; new and different business models and markets emerge. Yes, we have all the ingredients to achieve a balanced economy. All we need in this changing landscape is the skill, the imagination and the will to make it all work in the way that we want. I hope that the Minister agrees. I look forward to hearing the remarks of other noble Lords. I beg to move.

My Lords, it is a real pleasure to follow the noble Lord, Lord Haskel. I congratulate him not only on selecting this topic for debate but on his excellent and wide-ranging speech. I do not always agree with what he argues in your Lordships’ Chamber but on this occasion I agree 100 per cent with what he said.

I declare some interests in the subject. I am the honorary chairman of Cambridge University’s technology transfer office, Cambridge Enterprise Ltd, and I have a financial interest in about a dozen high-technology companies either as a director or an investor. I should therefore like to concentrate on one specific aspect of the challenge facing the United Kingdom in developing and encouraging science, technology and engineering activity, at the start-up end. It involves pre-revenue high-technology companies which rely largely on seed funding not only from the Government but from universities. This is the seed corn for the future in terms of developing the quality of science, technology and engineering in this country.

I agree with the noble Lord, Lord Haskel, that the great resources in this country, for which we are world famous, will solve our practical problems. The previous debate might lift the spirit but this debate deals with the urgent practical problems and challenges facing this country.

It is a pleasure to see the Minister, the noble Lord, Lord Drayson, in his place. He was a great loss to the Ministry of Defence but I am delighted that he is back in government as Minister for Science and Innovation. This debate and his concluding remarks will be followed with great interest by the royal academies and by many universities interested in this subject.

The United Kingdom, if not pre-eminent, leads the world in innovation in this field. Perhaps I may compare our great universities with those in the United States. We develop and register more innovations but perhaps exploit fewer of them commercially and financially. However, we have a proud record to defend and nurture. The problem which I am identifying occurs at a very early stage in the development of technology: financing the development and proving of the technology before it is exploited commercially.

Many initiatives and programmes are available in this country. Perhaps I may single out, within the public sector, Partnerships UK. I pay tribute to what it has done, but it is very small in comparison with the resources needed; its total capitalisation, I think, is of the order of £45 million. There are also great foundations—in part led largely by the noble Lord, Lord Sainsbury, and a very generous benefaction to many universities in the development of science and technology—individual business angels; some venture capital companies; Capital for Enterprise, sponsored by the Department for Business, Enterprise and Regulatory Reform; and corporate venture capital funds. The great problem is that this traditional source of financing is beginning to dry up, presenting a real crisis in the development of technology in this country. Once the tap has been turned off, we will pay, five or 10 years down the road, in the lack of innovation that has been commercially exploited.

Before I follow the noble Lord, Lord Haskel, in turning to the Government’s latest proposals I ought to acknowledge some present sources of alleviation. So far as the European Union is concerned, the Commission has just announced a doubling of the funding for future and emerging technologies, from about £88 million this year to double that by 2015. That is warmly welcomed, although sometimes bidding for these funds presents a serious challenge in terms of both energy and the detail required. However, it is certainly welcome.

The public procurement pull-through, which the noble Lord, Lord Drayson, has talked about in the past—in other words, the public sector providing financial resources in order to pull technologies through before they are either developed further in the public sector or commercialised in the private sector—has an important role to play. Again, I pay tribute to the All-Party Group on Small Business , which is specifically focusing on how to improve public sector procurement at the moment. One must also congratulate the British Library’s Business and IP Centre; it is spending a relatively small sum but it is an excellent resource for young technologists and small business men seeking information about patents, intellectual property and comparable technologies around the world. I congratulate the British Library on what it has already achieved.

The Department for Business, Enterprise and Regulatory Reform has shown focus in producing an excellent pamphlet called Solutions for Business. It is the first occasion when all the various sources of financial advice have been drawn together.

In terms of what is currently available, I single out Scottish Enterprise as quite a sensible model for the regional development agencies or whatever succeeds them. Scottish Enterprise takes the lead in providing matching funds for small high-technology start-ups, particularly those being spun out of the Scottish universities. It has been bold and brave in backing a number of companies, and it has already had its successes.

I turn to the kernel of my argument: all this activity, expenditure and support is not enough. In the Budget, the Chancellor talked about a £750 million strategic investment fund to take over from and provide much the same services as the old Industrial and Commercial Finance Corporation and 3i, until 3i decided to pull out of its traditional role of nurturing new technology. Then, on 20 April, the Prime Minister made a promise at Loughborough University; the idea was to set up a state-backed bank to address the funding gap for start-up ventures, so this was a specific proposal derived from the bigger innovation, the strategic investment fund. Now we read today in the newspapers of the appointment of Mr Christopher Rowlands, formerly of 3i, who is going to lead an official review of how a state-backed bank should be set up, reporting to the noble Lord, Lord Mandelson. It would be helpful if the Minister could confirm that that is indeed the case, along with the terms of reference and a timescale for the review.

We should be grateful to the National Endowment for Science, Technology and the Arts—NESTA—and the British Venture Capital Association for supporting the idea of a state-provided but privately run or privately managed fund for high-tech start-up businesses. Richard Lambert, the director-general of the CBI, deserves specific credit for helping to derive that suggestion.

In conclusion, the three principles that should govern this new initiative on spending public money to support high-technology, early start-up enterprises are: first, that we need an allocation of funds, and the £250 million that has been talked about by the Government in your Lordships’ House is of the right order of magnitude; secondly, that we must embrace the private sector to help to manage and exploit the assets available, because I do not think it should be run entirely by the public sector; and, lastly, that we ought to be picking winners, backing technology that has already had proof of concept in our universities or research institutes and technology that is either proven or capable of being proven. We do not want to spread the available money too thinly across many projects all over the country.

The time to act is now, and the Minister’s support is vital to the success of the project.

My Lords, I congratulate the noble Lord, Lord Haskel, on drawing attention to this timely topic. As a research neuroscientist at Oxford University and director of the Royal Institution of Great Britain, I endorse, and shall try to amplify, some of the noble Lord’s comments. A good first step could be to identify some of the bottlenecks in scientific culture that are preventing UK plc from making the most of the current opportunities.

First, there is the relationship of science with the media. By definition, it is the print and broadcast media that outreach with greatest impact to all aspects of our society. While the recent coverage of swine flu was comprehensive and, for the most part, accurate, many scientists would feel that there is still a long way to go before we can with complete confidence consign to the past the all too familiar demonisation of science and scientists, the sensationalist, oversimplified reportage of facts and the wariness and aversion many scientists have of talking to the press.

At a basic level, I see the difficulty lying in a conflict of different cultures between scientists, journalists and, indeed, politicians. The ensuing clash is one of very different agendas and timescales. In order to be an effective politician, one has to have some kind of platform and power, and the normal timescale of operations is, say, a couple of years. High on the agenda is sensitivity to public opinion. Meanwhile, a scientist has not traditionally needed to communicate directly with the general public, but top of their list is the need for large amounts of money to fund experiments that are increasingly dependent on expensive high-tech equipment and escalating running costs. Without significant grant money, scientists cannot even begin to ply their trade, and even then they have to do so in a zig-zag progress that can constitute a whole career, spanning decades.

Compare the mindset that will most likely subsequently result with that of the journalist, with deadlines of hours at most, and the defining goal—enabling them to do their job—of attracting and retaining large numbers of readers, listeners or viewers. It is easy to see how there may be some bafflement and lack of understanding on all respective sides, as a long-term, and always provisional, discovery of a truth seems to be sacrificed in favour of a dramatic and usually scary conclusion which, above all, makes for an immediate soundbite. Alternatively, it is easy to imagine how a genuine inquiry by a journalist for covering a scientific news item might be met with, at best, an incomprehensible, circumlocutory response or, at worst, prevarication and frank hostility from the scientist.

Ways forward for building bridges between such otherwise disparate sectors are starting to make their mark. For example, Sense About Science, an initiative started by the noble Lord, Lord Taverne, and the Science Media Centre at the Royal Institution have done much over the past few decades to create a common forum where different agendas and timescales can be reconciled. Yet such initiatives are still not supported by all scientists as part of their mainstream activity, and some journalists can still be prone to exaggerate, oversimplify and scaremonger.

We will see a truly effective outcome of this culture clash when we have not only laudable initiatives but a buy-in from all sectors; when every rank and file scientist sees it as part of their job to help—yes, actively help—the media; and when every news journalist taking a scientific angle sees their job as really helping to empower their readers and viewers with knowledge, rather than giving them a quick frisson of second-hand horror. Prizes and acclaim should be given to journalists who can turn this culture around, while more weight should be given in the scientific research assessment exercise and in giving research grants to scientists conspicuously working hard to democratise science.

A second bottleneck also arises from another culture clash, this time between scientists and the private sector. Although the landscape has been transformed over the past few decades in the collaboration of universities with industry, there is still a residual mindset endemic within the technology transfer units of some universities, and indeed in the attitudes of the scientists themselves, that prevents realisation of the opportunities for commercialising on basic research. The respect of the business community for apparently highly paid management, the need to submit patent applications before publication and seemingly rigid milestones are as unpalatable for scientists as a high burn rate, jargon-ridden incomprehensible technology and a lack of obvious exit strategies are to disenchanted potential investors in biotechnology.

Moreover, basic research should not be unattractive just because relatively little money is required, and hence little return possible, for seemingly blue-sky research. The Weizmann Institute in Israel, for example, a research centre dedicated to basic non-applied research, none the less has one of the highest numbers of patents and one of the most stellar commercialisation track records in the world. Surely there are lessons for us to learn here.

A third bottleneck is the frequent disempowerment of up to 50 per cent of the potential scientific workforce. When I headed up a report for the Government in 2002 on recruitment and retention of women in science, we found that much needed to be done. Today, still only 7.5 per cent science, engineering and technology professors in UK universities are female.

Aside from the need to persuade schoolgirls to look beyond sexist stereotypes, and the importance of giving women of professorial level the confidence and support to apply for glass-ceiling positions, another problem between these two stages became apparent that can be solved, not by a slippery cultural shift, but by simple resources. Money could be ring-fenced for those, including men, who had taken significant time off at a formative stage in their career, to look after a baby. Indeed, the retention rate of female science, engineering and technology graduates is merely 25 per cent compared with the male retention rate of 40 per cent. In a study conducted by the Royal Society of Chemistry in conjunction with the UK Resource Centre for Women in Science, Engineering and Technology, this so-called “leaky pipeline” was attributed to the uncertainty of the short-term contracts available and the inconsistency with raising a family.

Building on the aforementioned study, here is a solution that, while not being easy to implement in the current economic climate, is at least simple to conceptualise. It is to put aside a realistic level of funds so that those not in established posts and returning from childcare—probably mainly women—could compete for fellowships for re-establishing their research, not with the same probability, or lack of it, of winning the lottery, but with a chance that ensured the scheme worked to bring back effective and significant numbers of talented young scientists into the research workforce. With the advent of an estimated 2.9 million new science jobs in the UK by 2017, it is vital to ensure that both sexes receive an equal opportunity in benefiting from this growth.

The fourth bottleneck is perhaps the most pervasive and relevant to this debate: scientific literacy. There may be ever fewer individuals who are like one old lady who apparently said she would never eat tomatoes with genes in them, but if we are to make the most of the 21st century, then science, engineering and technology are still not where they need to be—at the heart of society, and in the hearts and minds of the next generation.

Cultural shifts cannot be realised overnight, but a scheme that could well give such a nebulous idea some substance comes from bringing together three very different, seemingly unrelated facts. First, the general public like attending science-based events where they can interact and challenge scientists speaking in general lectures, debates or panels. At the Royal Institution we have an audience of 200-strong on average up to three times a week throughout the year. Secondly, on most weekends and many weekday evenings, the lecture theatres of most universities lie empty and unused. Thirdly, many academic scientists who are mid-career in lectureships often feel that they are on a treadmill of recycling the same old courses, the endless audits and—even more endless and demoralising—the writing of grant applications, with a success rate of about 10 per cent to 15 per cent. How can they become reinvigorated to persist with cutting-edge research? How can they act as role models for their students? And how might they widen their general skills?

The answer could lie in drawing together these three disparate strands. Imagine a scenario where every weekend and perhaps during the week, your local university opened its doors to science events for the public. The science faculty who spent time running these events would gain new and exciting experiences, new skills and insights, while being paid in teaching remission or, indeed, overtime. In turn, the funds could come from a socially-sensitive box office fee—after all, it should be and could be the equivalent of a good night out at the cinema—plus subsidy from the appropriate government departments. I gather that a beacon scheme that is being developed might meet some of these needs.

Everyone would win: the rank and file science academic would gain skills for talking to the media and, indeed, for gaining more of a “wood” rather than “trees” perspective of their subject. The universities would gain by having more motivated staff and the buy-in and support of their local community. The general public would gain by having an immediate and interactive route to scientific literacy. The Government would gain by having a society eager and informed enough to make the most of what science, engineering and technology have to offer.

While a “change in culture” is an easy and frequently used phrase, it is hard to define operationally, let alone realise. But what is certain is that such changes are harder still without resources. Surely relatively modest sums of money invested in, for example, initiatives for women scientists and the democratisation of science for the public within their local communities, would give disproportionately valuable returns for making the most of science, engineering and technology in the 21st century.

My Lords, I pay tribute to my noble friend Lord Haskel for leading this debate with the knowledge and precision that is his hallmark. I entirely agree with the noble Lord, Lord Freeman, about funding start-ups.

I begin by declaring an interest: as director of Warwick Manufacturing Group at the University of Warwick, I have long believed that science and technology are central to almost every issue we face as a nation. Over the past decade, science and technology issues have become frontline news, and academic research has increased in prestige. At the same time, the increase in higher education funding has meant expansion, a growth visible in the new buildings we see on every university campus.

Of course, issues remain, and are high profile. It is usually difficulties, not successes, which command immediate attention. Despite this, I think most of us will agree that the past decade has been, if not a golden age, then at least an era of significant silver.

This increased funding, as well as our growing understanding of the world, means there is hardly any aspect of our national life where scientific research is not making a vital contribution. I noticed that many noble Lords chose to speak in the debate on creative industries earlier today. It occurs to me that without the contribution of science and technology, British creative industry would be very limited indeed. From the printing press to wireless technology, from cinema to videogames, from television to broadband, the framework of scientific and technological progress has shaped the growth of creativity industries. Indeed, the Digital Britain report compares the creation of broadband infrastructure with electrification in the Edwardian age in its power to transform. This manifests itself in many ways. Last week, Scottish scientists announced that they have been able to recreate digitally, then build, a lost musical instrument, the lituus.

So new digital technology means a seismic shift in many industries, from internet radio to classical music. In the same way, scientific research is reshaping many of our most pressing social problems. After all, without the pioneering work of Crick, Watson and Sir Alec Jeffreys, the current debate over DNA fingerprinting would not be possible.

Science is also the key to climate change. A fortnight ago, the new American energy secretary, Steven Chu, suggested we paint our roofs white to reflect sunlight and reduce demand for air-conditioning. He proposed this because research by the Lawrence Berkeley National Laboratory suggests that changing the colour of 100 square metres of roof could offset 100 tonnes of carbon dioxide emissions a year. Yet some argue that focusing on adaptive technologies will distract people from the need to reduce their carbon footprint. This highlights one of the problems with our attitude to science: a lack of cultural belief in the power of technology to transform lives.

As the Times said on Tuesday, this year is the 50th anniversary of CP Snow's famous “Two Cultures” lecture. Today we have a choice between “two attitudes” to science. The first holds that science and technology can somehow be reserved for a caste of qualified researchers, whose ideas emerge as bolts from the blue for the rest of society. This attitude isolates hard science from economics, and scientific research from the real world. It can be a comfortable arrangement. Scientists receive a small tithe of public expenditure, stability, and a certain status. In return, they are expected to produce research their peers regard as useful, while the wider population waits hopefully for scientific solutions. I believe that this attitude creates two castes—those who do science and those who have science done to them. This might explain why, despite outstanding research being done in our universities, only 1 per cent of British businesses say that universities are of high importance to them as a source of innovation.

Of course, companies which fully engage in research and development can gain great success. My noble friend the Minister is certainly aware of the enormous value that innovative research can give to a business—after all, he has proven its importance himself. The Government have made great efforts in this direction, establishing the Technology Strategy Board and publishing the innovation White Paper. The research councils, especially the Engineering and Physical Sciences Research Council, now include the economic impact of research when evaluating projects. Despite this progress, the sharing of innovation and success between academia and industry is too often the exception when it needs to be the rule. To change this, we must embrace a new attitude of constant engagement between science and society, as the noble Lord, Lord Haskel, mentioned. We must encourage scientists to focus on our shared challenges and translate their research into reality.

At the same time, we must give independent researchers the freedom to innovate, challenge and experiment. In other words, we choose where the goal posts are placed, but free up the path to goal. If you ask a dozen scientists to reduce carbon emissions, you will get a dozen research proposals. Perhaps half of them will work. The trouble is, as John Wanamaker famously said about advertising, you do not know which half. The same is true of spin-off companies. Not all innovators will succeed; there can be no guarantee of success. Risk is at the very core of innovative research. Innovation always involves venturing into the unknown. We must develop an attitude of embracing risk by supporting innovation anywhere it can be found—in businesses, universities, corporate research laboratories or the work of a young entrepreneur.

The innovation White Paper set out some useful steps for achieving this. As it suggests, we should offer an “innovation lottery”, so that it is easier for companies to get funding for small-scale research with academic partners. We also need a cultural change, so that knowledge transfer is central to academic life. We must bring manufacturers, researchers and customers together, so that they can share ideas to improve products, from batteries to plastic electronics.

Next, we should remove the hurdles, the bureaucracy and the form-filling that can blight new research projects. The noble Lord, Lord May, who is not with us today, addressed this recently in his role as president-elect of the British Science Association. The noble Lord pointed out that the last Research Assessment Exercise would have prevented Crick and Watson getting shared credit for their research. This type of box-ticking, while well intentioned, is anathema to innovation. One of the issues with the RAE is that the evaluation between economic impact and perceived research excellence is tilted towards the latter and not balanced. This is right for “blue sky” research subjects, but in applied sciences, gaining substantial economic benefit is a key to success and we need to be much bolder. These barriers to innovation typify much of the Research Assessment Exercise. That must change.

However, we must go further than lotteries or replacing the RAE. We need a transformation of our attitude to science and society. We should double, treble or even quadruple the money available to fund applied science projects such as technology demonstrators, incubators and low-carbon research. The Technology Strategy Board has a budget of £1 billion for the next three years for all applied research. To make a real contribution, we should invest at least £1 billion each year.

Naturally, business must play its part in bringing science to the heart of society. Let me be blunt: if British companies do not invest in exciting new technologies and products, companies in other countries will. Sir James Black’s work on Beta blockers made a major contribution to both our physical and economic health because we had both a strong pharmaceutical industry and, in the NHS, a ready market for its products.

Yet the equally innovative work of George Gray and Cyril Hilsum, the pioneers of liquid crystal displays, found a market not in Britain but in the companies of the Far East that saw the market value of their work. I can speak from personal experience. When I served as a young apprentice at Lucas Industries, the company was a global leader. Yet a lack of investment in innovation meant Lucas was very quickly overtaken by emerging companies from Germany and Japan. They are now global giants, while Lucas no longer exists.

The Government have increased the research budget enormously, yet we have not seen British competitiveness improve as a result. That is why we must not let research breakthroughs from British universities be transferred from the laboratory to the wider world by others. We must help innovative companies and researchers develop scientific and economic goals together and back their efforts to take their successes to the marketplace.

The challenge that our society faces, from climate change to healthcare, are too great to be ignored by scientists, while the progress that scientists are making, from low-carbon cars to virtual surgery, is too useful to be ignored by society. To meet our social challenges and help our economy grow, we must bring science and society together.

My Lords, I join other noble Lords in thanking the noble Lord, Lord Haskel, for his thoughtful and comprehensive review and introduction to this subject. It is a pleasure to follow the noble Lord, Lord Bhattacharyya, who speaks with great authority about the Midlands, an area which was, is and will remain of major manufacturing importance.

Most of my remarks will be Cambridge-oriented, and I declare many prejudices in that respect. Sixty years ago, I was coming to the end of my first year as an undergraduate in the engineering faculty at Cambridge. I had always wished to be an engineer, but very quickly realised that I was not competent enough, as did my first employer. However, it was the most marvellous discipline in which to be educated and an invaluable training for life, for which I remain eternally grateful. Indeed, it stood me in good stead when, many years later, in a very long business career—mostly overseas—I became for eight years a non-executive director of a group of engineering companies. Later still, I had the honour to succeed the noble Baroness, Lady Platt of Writtle, as honorary president of the Cambridge University Engineering Association. In this respect, my noble friend Lady Greenfield can take some comfort, as the next director of the engineering faculty in Cambridge is no less than a distinguished scientific lady.

My links with Cambridge continue, as my daughter’s eldest son has just completed his second year as an undergraduate in the engineering faculty. I therefore remain very closely connected and can see how radically things are changing since my days there. And of course in this debate, we shall listen with great pleasure to my noble friend Lord Rees of Ludlow, a most distinguished scientist and, I am glad to say, master of my former college.

The UK’s track record is one of having been very good at inventions such as TV, radar and jet propulsion—the list is endless—but less good at exploitation and commercialisation of these developments. However, this has now changed, and Cambridge University, among others, has devised an excellent system for it. Among many incredible developments—many during the time that my noble friend Lord Broers was at Cambridge—there has been, for instance, the Institute of Manufacturing within the engineering faculty. I am reliably informed that there are no fewer than 1,800 small industries within 10 miles of the centre of Cambridge. That is major progress and demonstrates what can happen as a result of scientific and engineering developments.

What are the obvious areas of opportunity that will assist with our national economic recovery? There are many, but I shall mention just a few. They include civil infrastructure—in which we are world-leading consultants—energy efficiency, as has been mentioned already in this debate, security and materials. This last item will be crucial in the evolution of nuclear fusion. In that case, the science has been solved at Culham, but is now being developed further at the large international experimental plant, ITER, in southern France. The problem has moved from a scientific one to an engineering one—in other words, to find new materials that will withstand the very high temperatures within the combustion chamber and in the electromagnets that are necessary. It is not an easy task, but it is essential to get it right and find the solution if we are to solve our energy problems in the long-term future.

It is clear that science and engineering are taken quite seriously in this Parliament, particularly within the various all-party groups on this subject, such as the Parliamentary and Scientific Committee, which has been ably chaired to date by Doug Naysmith in another place and has now been taken over by Ian Taylor. All those initiatives, like the college of science committee and the chemistry society committee, are extremely valuable. It is also extremely encouraging that the debate will be answered by the noble Lord, Lord Drayson, who is, I am glad to say, a nuclear fusion supporter and the only engineer in the Government. I have always thought that government would be improved with more engineers trained to produce solutions that work, which is their motivation, and fewer economists, but that is a prejudice which I shall no doubt continue to hold as things develop in future. I am glad that I am now to be followed by my friend—although not my noble friend—the noble Lord, Lord Howie of Troon, with whom I have discussed engineering on many occasions.

My Lords, I am very grateful for those kind words. The noble Viscount, Lord Montgomery, and I have debated for many years on a variety of subjects but this, I believe, is the first time we have ever been on the same side. I am very glad of it; it might happen again—who can tell?

I am pleased that my noble friend Lord Haskel raised this subject, because engineering has been my life and is not really debated in this House or the other place nearly often enough. It is interesting to note that the earlier debate today on the contribution of the creative industries drew a full house in this Chamber, whereas the discussion of engineering is listened to by only a select few. That is the norm, and it is what I am going to talk about. First, I declare my interest as a fellow of the Institution of Civil Engineers and an honorary fellow of a variety of other institutions of the same kind. I spent more than 20 years in consulting engineering as an engineering designer, followed by 25 or so years as an engineering journalist—something in which I still dabble in a small way. I believe that my monthly column in the Highways magazine has four readers, one of whom is the editor. I do not know who the other three are.

I want to talk not just about the contribution that science and engineering make to the United Kingdom, which has been well rehearsed by other noble Lords, but about whether that contribution is properly recognised and, if not, what, if anything, can be done to remedy that. We know that generally speaking, with the construction industry rather than engineering as a whole, when a notable building such as the Millennium Dome is discussed in the press, its design is attributed to the architect—in this case, my noble friend Lord Rogers. There is a sense in which the architect is entitled to some recognition for the Dome, which is not a dome at all, of course. Why it has been called a dome, I do not know, as it actually looks like a saucer turned upside down. It is really a big top, such as Bertram Mills used to have, or a tent or marquee. However, let us call it a dome, as that is what the press likes to call it, although engineers prefer to describe it differently. The real designers of the Dome were not the architects, however much they put into it, but Buro Happold. It is a complete engineering structure.

There are many more such examples. The lead designer of the Millennium Bridge, which wobbles, was not the noble Lord, Lord Foster, but Arup. I noticed that the noble Lord, Lord Foster, came forward with a certain amount of verve on the opening day, raising his arms as he does, but that when it started to wobble he ran for his life and said that this was really a matter for Arup—which was true. There is also the Pompidou Centre, which was really designed by Ted Happold and Peter Rice, again of Arup, which again invited Richard Rogers and Piano to come in as architects to help to complete the building. Just down the road is Waterloo Bridge, which, in every guidebook, is described as having been designed by that very eminent architect Sir Giles Gilbert Scott, who was actually employed by the engineers Rendel, Palmer and Tritton, with which I spent 13 happy years when I was younger, although not under Waterloo Bridge. It is interesting that people think of Waterloo Bridge as a kind of arch structure when it consists of two horizontal reinforced concrete box girders, screened by a kind of façade, which is presumably the architect’s work. During the war a temporary handrail was put on the bridge and the official history of Rendel, Palmer and Tritton says:

“The elegance of the free flowing clean design was preserved when it was decided to leave in place the simple tubular handrail, erected as a temporary wartime economy, in place of the ornate railing of the original design and also to omit the arches over the approaches as earlier proposed by Sir Giles”.

The architect was in that case luckily unable to carry out his plans.

What could be done to improve recognition in the press, the media as a whole and in this Parliament? There is a remedy at hand: in 1988, Parliament passed the Copyright, Designs and Patents Act 1988, which brought into our law a continental notion called the moral right—that is, to be recognised as the designer or author of a piece of work. In the case of a book, it is quite simple: the author puts a paragraph in the flyleaf saying that he asserts the right to be regarded as the author of the book.

When the Bill came before this House in 1987, the moral right was extended beyond books, musical composition and so on to include architecture and structural design. The Bill said that the architect had the right to assert his moral right to be regarded as the designer. Efforts were made in the House to change that part of the Bill so that it said “architect or engineer”. While the idea was welcomed on the government side, it somehow seemed inappropriate to put the word “engineer” into the Bill. So, instead, Whitehall in its wisdom deleted the word “architect” and inserted the word “author”. In later debates during the passage of the Bill, “author” was defined as being either the architect or the engineer, although that never got on to the face of the Bill; had it done, a great deal of confusion would have been avoided.

It is up to engineers to assert their moral right under the Copyright, Designs and Patents Act 1988. They have to do this apparently in writing. That is where it becomes a little difficult again because it is hard to know who to write to. Obviously you write to the owner of the building, whoever that happens to be. You may, like Martin Luther, nail a letter to the door of some place or another and assert your right there, or put a letter around a lamp post the way that planning authorities do, and assert your right in that way. I would like the Minister to explain the mechanics by which that should be done.

I have one last word. Some years ago, I was at an event in the Great Hall of the British Museum, which is ascribed to Norman Foster once again. His bit is very good, but the bit of the Great Hall that is of real interest is the roof, which is a very complicated structure, designed once again by Buro Happold of Bath. I noticed that the names of Foster and Spencer De Grey, one of his partners who did the principal design of that building, were then inscribed on the wall of the Great Hall. I suggested to the director that it would be a good idea if the name of Buro Happold were added. He agreed that this was a very good idea and then retired the following day.

I then spent some considerable effort, with the agreement of Buro Happold, Norman Foster and Spencer De Grey, to get that name added to the inscription on the wall. Unfortunately, the members of staff of the British Museum kept retiring. I am happy to say that last year the name of Buro Happold was added to the Great Hall, as it should have been originally. It only took seven years to get it done. I sincerely hope that future engineers can achieve such events more rapidly than I was able to do.

My Lords, other noble Lords have declared interests of various degrees of science and engineering distinction. My only declaration is that I happen to be the president of the Parliamentary and Scientific Committee, to which reference has very kindly been made, and chairman of the Foundation for Science and Technology. As I did no science at school or university at all, I have to describe these offices as wholly ornamental.

I have listened to the debate with enormous interest and agree with a great deal of what has been said. Indeed, I agreed with my noble friend Lord Freeman when he said that he could not find anything in the speech of the noble Lord, Lord Haskel, with which he disagreed. I shall want to read it very carefully, but my impression was much the same, and we are much indebted to him for launching the debate.

The noble Baroness, Lady Greenfield, who made a very interesting speech, referred to the Science Media Centre. As I shall have something to say about the question of communication, I should like to pay tribute to her for her initiative in getting that immensely valuable organisation set up and for appointing Fiona Fox to run it. It really has been hugely successful.

I do not want to repeat what other speakers have said at this stage of the debate. However, I should like to refer to a very interesting event that took place just before the Recess, namely a seminar organised by the Lord Speaker on 12 May. This was the second in a series of seminars launched by the noble Baroness intended to bring together noble Lords and outside commentators, entitled “Science, Policy and Ethics: Potential Future Flashpoints”. Three of our most distinguished scientists, the noble Lords, Lord Krebs and Lord May, and the noble Baroness, Lady Greenfield, addressed us at the outset, and their speeches were very interesting and informative. That was followed by a discussion. In my 10 minutes I cannot hope to cover all the subjects that were discussed. For me, the really interesting outcome of that seminar was the reaction of the 11 invited senior science journalists. I am familiar with the expertise of my noble colleagues, but this was a very interesting exposure of what has been referred to by other noble Lords as an interaction between science, politics and the media.

In passing, I might say that one of the very early points that arose was how in an all-elected House of Lords you are going to keep these distinguished scientists available. I hope without embarrassing the noble Baroness, I would like to say that she dealt with that extremely robustly. The result was that no other journalist raised the matter during the course of the discussion. Her view was that there are alternative methods of accountability to elections and that, as an expert House with a different role from another place, this House must be able to secure the expertise that gives us our distinctive role in our constitution.

I turn to the issues that are relevant to the debate. I was struck once again by the journalists’ insistence on the need for good communication. That point came back repeatedly. It has been a subject close to my own heart ever since the House issued our Select Committee report, Science and Society, to which the noble Lord, Lord Haskel, referred; an inquiry which I had the honour to chair. If, indeed, science and technology are essential—I believe that they are—to meeting the challenges with which we as a world are faced, particularly in this nation, those engaged in promoting this must secure and retain the trust of the public. This was a key point in that report and is widely accepted. Scientists and engineers practise with an implicit consent of the public. If that is forfeited, the damage that could be done is huge.

Much has been achieved. Almost all major professional organisations in this field now have their “science in society” committees and activities, not least the Royal Society; it is good to know that I shall be followed by the noble Lord, Lord Rees of Ludlow. In passing, I particularly commend the work of the Royal Society of Chemistry, which really has made a notable contribution to this whole business of explaining the importance of science—not just chemical science, but all science—and to solving the many problems with which we are faced. It has put this aspect at the centre of its activities, and deserves praise for that.

At the Lord Speaker’s seminar, it was emphasised again and again that,

“scientists had an important responsibility to engage the public in debate about their research”.

Is the Minister, who I am pleased to see in his place, satisfied that this is now sufficiently recognised in universities? In particular, is the research assessment exercise, even after its review, still an obstacle to recognising the credit that should be given to scientists who successfully engage with the public? This point was raised with us 10 years ago in the science and society inquiry. I am not convinced that there has been sufficient change.

There was much talk at the seminar about important challenges such as climate change, food security, energy security and so on. Indeed, the noble Baroness, Lady Greenfield, gave us a disturbing account of the effect of the small screen on children’s minds and attitudes. However, something was also said about the often malign influence of the green lobby, which seems to oppose so many of the solutions to these problems, like nuclear energy, GM technology and so on. Noble Lords asked why the media seem to give these voices such prominence in their coverage. One explanation that was offered, which I suppose one has been aware of in a sense but it was stated very clearly, was that these bodies operated,

“almost like multinational companies, deploying large and sophisticated marketing and public relations departments”.

One sometimes gets the impression from reading the media about their activities that the media still think that they are tree-huggers in sandals. They are not. They are extremely well organised and their motives need to be ruthlessly exposed. They are often very damaging to the solutions to the problems that we all face.

Another explanation was that the scientists too often seem to focus,

“on ‘what is not known’ rather than on ‘what is known’”,

inevitably raising public fears that these scientists themselves do not understand what they are doing. A huge amount of science is known. It must be part of the scientific community’s role constantly to reassure people that this is known and certain science. We are on the way to solving the problem of nuclear waste, but it has been a long, hard battle. That is just one example; there are many others.

I applaud the Minister for what he said at the Cheltenham Science Festival yesterday. I have here the Times headline, to which I was much attracted:

“Making everyone feel guilty ‘is not the way to combat climate change’”.

I am sure that that is right. There is a streak of opinion in this country that the world will be a better place only if we all put on hair shirts. It simply does not work like that. I was present at a foundation seminar last night on science in the cities, where much the same point was made by the Mayor of London, Boris Johnson, talking about better homes and building insulation: if you want to secure your objectives, the public must know that it will pay them to do it. This is regarded in some circles as somehow immoral, which is not right. That is the way you achieve your objectives and that is the way you get the attitude change.

One of the points that came through at the seminar and last night is the importance of the social sciences in this. They have much to offer and they need to be listened to and consulted more frequently on how to get these changes. Of course, if we are to meet the many challenges that confront the world we must support, applaud and reward the scientists and engineers who are doing this work. Like others, I am not always satisfied that that is done. Recognition is hugely important, as the noble Lord, Lord Howie, said. I warmly support the Motion and thank the noble Lord, Lord Haskel, for introducing it.

My Lords, we should be grateful to the noble Lord, Lord Haskel, for initiating this debate and for his speech. In the current febrile political atmosphere, it would be especially ungracious not to acclaim the Government’s sustained support for science and to acknowledge the dynamism and commitment of the noble Lord, Lord Drayson, who fought hard for the ring-fencing of the science budget.

In science, engineering and medicine, the pay-off for R&D sometimes takes decades. The tap cannot be turned off and then back on. It would be tragic if we lost the momentum developed during the past 12 years. Indeed, to retain our international competitiveness, we must raise our game. That is because the Obama Administration have given America’s scientific community a massive boost in morale and in substance. The new President has eased the ban on stem cell research and has appointed a “dream team” of science advisers. Moreover, his economic stimulus package includes new, one-off investments in federal R&D worth more than $13 billion for the NSF and NIH, and a much larger sum for R&D in energy. Our success in attracting and retaining mobile talent will be at risk unless we respond.

As a scientific nation, the UK is, by many indicators, second only to the US. It is important to recognise why this is so. It is largely because of our strong research universities. We are the only country outside the US to have several in the premier league. I should at this stage declare an interest as a Cambridge professor and as president of the Royal Society, and I want to speak from these perspectives. The Royal Society aims to promote excellence in science and technology for its own sake and for enhancing human welfare. One of my predecessors, Lord Porter of Luddenham, averred that there are two kinds of science: applied and not yet applied.

The most readily measurable economic benefit of academic research is direct knowledge transfer from university labs to industry. But that is only a small part of the total. Research universities fulfil other key roles that are harder to quantify. They are networked with the whole world’s research. Their graduates spread expertise throughout the private and public sectors. That is more important than direct knowledge transfer.

There is a strong correlation between the research quality of a university and the strength of the commercial cluster that is attracted around it. Talent attracts talent and big companies, too. Success breeds success and, just as important, failure is accepted as a step towards later success. In places such as Cambridge, a dynamic and interactive high-tech community has developed that offers, in the words of a Financial Times article, a,

“low risk place to do high risk things”.

Academics are often derided as living self-indulgently in ivory towers but I strongly contest that. Excellent universities are of immense social and economic value. The global challenges that confront us cannot be effectively tackled without the expertise in them.

I am fortunate to know most of the leading UK scientists—those who have won Nobel prizes or the equivalent. They are all individualists, but there is one thing that they would all agree on: they would highlight the long-term nature of their work, the unpredictability of its outcome and the need for a supportive environment. To ensure that our universities stay internationally competitive, it is crucial that they continue to offer this environment, relative autonomy and the prospect, without undue hassle, of gaining “responsive mode” funding for the research to which they are prepared to dedicate their lives. That is a fair expectation if you are at Harvard, Stanford or Berkeley; it must be so here if we are to compete for mobile talent at the highest academic level. In research, it is the top quality that counts; there is no virtue in coming second.

It is in this context that there have been concerns about some signals sent by research councils. For instance, applicants are required to state what the impact of their research will be. This cannot be more than a guess. Even the wizards of venture capital find it hard to assess the viability of a commercial proposal involving research that has already been done, so it would seem very implausible to expect applicants, or a research council official, to make such judgments before the research is done.

Another concern is a possibly undue focus on so-called priority areas. Again, that might stifle the most original or cross-disciplinary work—the biggest breakthroughs are the least predictable. Indeed, it seems topsy-turvy that a Government who are rightly reluctant to pick winners in industrial policy should aspire to do that upstream, as it were, in the field of research.

It is surely in our own interests to support real excellence across the board. That is affordable, even in these straitened times; I refer to funds inside the so-called ring-fence for academic research. Funds administered by the research councils and the HEFCE QE funds are the main source. When we confront more costly developments, funded outside the ring-fence, of course the UK needs to focus. Strategic criteria should certainly become priorities then, as they did in Obama’s stimulus package.

We should plainly do all that we can to sustain and exploit our excellence in biotechnology. The pharmaceutical industry’s success has been grounded in the UK’s strong research base in biomedical science, which is strong because governmental support for biomedical sciences has been massively supplemented by the Wellcome Trust, the major cancer charities and, of course, the heavy R&D spend of the industry itself.

But what about other sectors? A broad constituency in academia and business is now urging the need for sustained public support for the physical sciences—mathematics, all of physics, material science, chemistry and engineering—and perhaps even for a slight rebalancing of public funding to allow a catch-up by those subjects after the prioritising of medical research in recent years. The advocates for breadth in basic science include biomedical researchers themselves. Sir Paul Nurse had a fine letter to the Times urging that point, and the heads of the MRC and Wellcome Trust have spoken in similar vein. Cross-disciplinary expertise, spanning physical and biological sciences, is now at a premium. Peter Mansfield’s Nobel prize-winning work on MRI was done in Nottingham’s physics department. The exciting new field of synthetic biology involves physics and engineering, and computer science now pervades all of biology. The physical sciences in our universities are vulnerable because they cannot draw on supplementary sources of private funding that parallel the Wellcome Trust and the medical charities, or on industrial support to match that of the pharmaceutical industry.

The earlier ministerial stint of the noble Lord, Lord Drayson, at the MoD, where he oversaw procurement of high-tech equipment, will have convinced him that our manufacturing sector in physics-based industry is patchy. There is a paucity of major high-tech manufacturing companies in the UK. Indeed, as the noble Lord, Lord Bhattacharyya, reminded us, the weakness of our electronics industry stems from short-sighted policies and lost opportunities in the 1970s and 1980s, from which lessons can surely be learnt. At a time when we need to rebalance our economy away from finance and towards high-tech manufacturing and services, we should invest in efforts to recover our strength in the industries based on the physical sciences. R&D on energy in particular is, worldwide, at far too low a level to meet the global challenge—anomalously low compared to the scale of medical and health R&D. Moreover, that is a strategic area where we could align with the expanding US effort to mutual benefit. Although I have just mentioned the US, we must also engage with Europe. When Europe acts together, as it does in pure science at CERN, or in the aircraft or space industry, it can match the US. There is a need for more co-operation in other areas, particularly energy and its infrastructure.

Finally, I would like to engage in a bit of positive thinking, taking my cue from the noble Lord, Lord Bragg, in the previous debate. Britain has a great scientific tradition and great scientific strength today; we must build on it and aspire to be the best place in the world to do science. If we can, benign positive feedbacks come into play; the law of increasing returns applies; talent attracts talent. We do not know what will be the 21st-century counterparts of quantum theory, the double helix and the computer, or where the great innovators of the future will get their formative training and inspiration. However, one thing seems a near certainty: unless we in this country get smarter, we will get poorer. The UK’s relative standing will sink unless we keep our competitive edge as discoverers and innovators and unless some of the key creative ideas of the 21st century germinate and, even more importantly, are exploited here in the UK.

My Lords, it gives me great pleasure to take part in this debate and, like others, I thank my noble friend Lord Haskel for creating this opportunity. Before I move on to my contribution, I should say how impressed I was by the interesting speech made by the noble Baroness, Lady Greenfield, whom I had not previously heard. Her commitment was evident in the enthusiasm with which she spoke. I wish, having heard the noble Lord, Lord Jenkin of Roding, that I had cleared my diary to go to the event that he went to. He recalled—again, with excitement—what happened that evening. I am sure that I could have learnt a lot, too.

I want briefly to mention how science and engineering support the wider manufacturing sector—many noble Lords talked about it—before looking to the future and at how science and engineering will continue to have a positive impact on all our lives and every sector in the UK economy.

This Government have proved themselves to be committed to manufacturing and have supported it well. The recent publication of the manufacturing strategy, New Industry, New Jobs, gives us all a chance to boost and boast about manufacturing in the UK. The document describes the importance of industrial activism in safeguarding the UK’s global position in manufacturing, which is on everyone’s agenda. All of us, no matter what our background or politics, have been influenced by these industries. We owe much of this country’s historical influence and current global position to their contribution.

Science and engineering companies provide the invention and innovation to drive the manufacturing process, as well as producing the manufactured goods. These companies do not just create new products; almost daily, they revolutionise the tools and processes by which they are produced. By combining the blue-skies thinking of pure research with the practical solutions of applied research, the science and engineering sectors enable manufacturing as a whole to provide the goods and services that we all need. They provide the scientific know-how and engineering solutions to enable manufacturing to make its goods, to transport these goods around the world, to service products and to communicate with their customers.

As for science, the pharmaceutical industry, to which other noble Lords have referred, is a wonderful example of how companies bring together pure science and mass manufacturing. In developing medicines, vaccines, and treatments that are ever more effective, pharmaceutical companies begin the process with the purest of scientific research. After, in some cases, years of applied research into efficacy, a great idea becomes a mass-produced product, manufactured to the very highest specifications that we require. By working beyond scientific boundaries into manufacturing processes, pharmaceutical companies demonstrate how modern industry is not constrained by arbitrary sectoral definitions; instead, it brings together all the skills and processes necessary for success.

Science and engineering companies can provide the excitement to attract and engage young people with learning. We all need that to happen. The young person sufficiently excited by the latest Formula 1 car to keep studying science and mathematics will find a whole world of careers open across the manufacturing sector and beyond. However, we can be confident that the future of these key industries is safe only when young people are convinced that these skills and subjects are what they aspire to. We need to do more to build understanding by young people of the links between these important industries and how science, engineering and manufacturing coexist in the modern economy.

To understand this modern situation, it is worth looking back at how science and engineering have been the cornerstone of British economic success for many years, although I could not do that with half the humour that my noble friend Lord Howie used when he described some of the major constructions around this wonderful city and others. However, there can be no doubt that the engineering sector is embedded in the British landscape, both physically and psychologically. It provided the powerhouse of the Industrial Revolution, which in turn laid the foundations for the UK’s continuing place in global innovation. We might say that the entire history of the UK over the past 200 years has been coloured by industrial reform, invention and mass production. The seismic changes in British society can be linked to the earliest technology and the breakthroughs that ensued.

I now turn to the contribution that science and engineering have made to the country as a whole. They have already given the UK a standard of living that surely surpasses the dreams of those early pioneers and inventors. Mass transportation gives individuals the freedom to explore the world as never before. Modern communications technology has brought businesses and people closer together. There are daily scientific breakthroughs in the fight against diseases that limit life expectancy and the quality of life. The worlds of music, entertainment and film—a subject covered in the debate introduced by the noble Lord, Lord Bragg—have been revolutionised in the past 100 years through science and engineering. We should all be proud of the contributions that these industries have made to the quality and richness of life—many of us enjoy them as part of our daily experience.

Many of your Lordships will know that the value of skills in science and engineering to British industry is incredibly high. People with these skills not only work for companies in the science and engineering sectors but are much in demand across all sectors. A report from the ETB last year found that, of the engineering and technology graduates who entered employment, a quarter joined companies that did not have engineering and technology as their primary activity, but only 11 per cent of all engineering and technology graduates were employed in non-engineering and technology jobs. This means that non-technology companies are employing many engineering graduates in engineering roles. Engineering and technology occupations permeate all sectors, and the skills of these people help to make companies successful across the economy.

Companies in all sectors want to employ science, engineering and technology specialists and they want to employ them right across the piece in their organisations. For England, we hope that the new diplomas in engineering, manufacturing, product design and science will help young people to experience the excitement of these subjects at a very much earlier age. With these diplomas, which are designed to help students to progress into employment, higher education and work-based learning, we have a real opportunity to boost the volume and quality of these skills in the workforce.

Of course, science and engineering contribute a great deal to the economic wealth and well-being of the UK, as many speakers have said. I ask myself and all noble Lords, including the Minister: what of the future for science and engineering? If we succeed in raising performance and competitiveness, what will the science and engineering sectors be able to contribute in the future? I suggest that, in addition to a direct contribution to the economy through the sale of goods and services, these sectors can improve all our lives in ways that we can only begin to imagine. As the UK faces challenges such as disease control, the ongoing fight against terrorism, and an ageing population, science and engineering can provide the tools and skills to ensure that we face the future with more confidence. Many other noble Lords have referred to that issue.

I received a helpful briefing for this debate from the Royal Society of Chemistry, to which the noble Lord, Lord Jenkin, referred. It is very encouraging to see the work that it is doing to identify opportunities where in the future chemistry, and science generally, can make a crucial contribution towards tackling the major challenges of our time—issues such as climate change, food security, energy, water and health—and help to build a strong UK economy. I hope that my noble friend Lord Drayson will agree with the RSC that UK science will be crucial in enabling us to emerge from this recession.

The legacy from the Olympics in 2012 will be not just in sport but in the construction, engineering and scientific breakthroughs that hosting such a prestigious and ambitious event in the UK will bring for us all. In addition, the Government’s recent announcement of ongoing support for a low-carbon economy will draw on all the energy expertise that science and engineering can provide. We have a real opportunity to use what we already know to ensure that we gain the knowledge that we will need to meet the changes and challenges of the future. We must ensure that Britain can capitalise on these opportunities and continue to build on its scientific and engineering capability.

In conclusion, we must ensure that every employee can develop their full potential, as we need a highly skilled and adaptable workforce, particularly to support advanced manufacturing, life sciences and green and emerging technologies. We can give ourselves the best possible future by keeping our focus on the importance of science and engineering skills across the workforce.

My Lords, although I suspect that a debate with this title would be important at any time, I congratulate the noble Lord, Lord Haskel, on his timing, because there is, as many noble Lords have said, a great sense of urgency about the subject. Part of the reason for that is the point which he himself made about this being a time of recession. Those who succeed in such times are those who can look beyond the recession and identify what is needed, innovate and be ready for it. In many cases that will be the scientists and technologists.

As many noble Lords also said, there is also the crisis of climate change, where again we need technological innovations. We have some major issues to address on how to fund and implement those innovations. However, I want to talk about medical science, and I shall focus on putting research into practice and actually ensuring that things happen for patients and for the health of the population. We have a great and illustrious history in this area. Many great scientists and clinical scientists have enhanced not only the health of the UK but our position in the world.

Perhaps I may mention just one individual: the late Professor Philip Poole-Wilson of the National Heart and Lung Institute, whose memorial service is being held as we speak, where I would have been now were I not here. Philip exemplified three things that are important to us in this debate. He was a great cardiologist, but he was also a great clinician, great researcher and great teacher. In this field, we often need those three sets of qualities together. We have an excellent environment in which we can bring together the clinical, the research and the teaching: the National Health Service—in which I declare my interest as a former chief executive—which is an excellent environment for learning and research. The noble Lord, Lord Drayson, has recognised that and, as I understand it, one of the issues in his current work is to ensure that we draw sufficient research and scientific development from our extraordinary integrated health service to enable us to put it into practice and understand it in practice.

I pay tribute to the recent developments in the Department of Health and the NHS in making sure that research is much better co-ordinated. Under the leadership of Dame Sally Davies, we have the Office for Strategic Co-ordination of Health Research, which is making sure that there is more effective translation of health research into health and economic benefits for the UK. It is very important work that could be taken much further. I was interested to hear that, from his new Office of Life Sciences, the noble Lord, Lord Drayson, will be producing a life sciences blueprint in July. It will be interesting to hear how he wants to take that further forward.

We know that health research has an economic benefit for the country. An interesting study was done a year or so ago, entitled What’s it Worth?, which estimated the economic benefits of medical research in the UK. It made some broad estimates in a number of areas, but in the one that it considered in some detail, cardiovascular disease, it estimated that there was a 9 per cent rate of return annually on the research. That is a significant rate of return and one that it is important that we understand when talking about the importance of medical research.

I want to draw attention to three points. One comes directly from that area of research. Anyone who has read that study—I have, and I had better declare another interest as a trustee of RAND Europe, which was one of the authors of the study—can see how difficult it was to evaluate the impact of medical research, because there are so many confounding factors and so many ways of measuring. I hope that in the new Office of Life Sciences, attention will be paid to how we effectively evaluate the impact of medical research—not just the quality of the medical research itself but its impact on real life. That will be an important way to help inform policy for the future. I ask the Minister to comment on that.

The second point on which I ask the Minister to comment, and to tell us whether the life sciences blueprint will refer to it, concerns the spread of practice once research has demonstrated what works. We often talk about getting things from the laboratory to the bedside. The study to which I just referred stated that in cardiovascular disease it took 17 years on average to get things from research to the bedside. I am interested in the time that it takes not just to get things from the laboratory to the bedside but from one bedside to every bedside, making sure that it is normal practice everywhere. I suspect that we do not pay very much attention to that. Part of that is about how we spread best practice, and part of it is knowledge transfer. That may be a particular issue for medical sciences, but I suspect that it is true elsewhere. There was a famous article in the Lancet that said that if we applied all the knowledge that we have today, we would have more impact than any medical breakthrough that we may be likely to have in the next 10 years. I suspect that that may be true elsewhere and that we may not pay enough attention to that latter bit—getting it from one bedside to every bedside.

It is not just about spreading good practice. The noble Lord, Lord Jenkin, made a point about the social sciences and natural sciences interface. We know that there is resistance to the findings of science among the population in all kinds of ways. The noble Lord, Lord Haskel, made the point—his words were very interesting—that in the great MMR controversy, people were judging us on our values and the reasons for which we were making the change. They were making judgments about the people who were saying, “You should have this vaccine”, and not making a scientific judgment. That is true in all kinds of different areas of medicine.

We know that about 30 per cent of drugs do not get taken by the patients for whom they are prescribed. That seems to be universal in developed countries. The social sciences can help us to understand how to get the products of natural sciences into action so that we can get better evaluation and results for the population.

My second question for the noble Lord, Lord Drayson, is how he sees the interaction between the natural and the social sciences. How important does he see that in the life sciences, particularly the question of how to spread practice from one bedside to every bedside?

My third point is again health-related but may have other relevance. Anyone who has had responsibility for managing health services will know that there is an ultimate tension between prevention and treatment. We often get dragged down to the far end of treatment when we want to be spending a bit more resource on prevention. There are issues here for the direction of science in medical research. I think particularly of the pharmaceutical industry. To what extent are we expending great effort on developing drugs for the latter stages of treatment and less attention to the biological markers of diagnosis? For example, we know that if we can catch cancer early and treat it early, we have a much better chance of the patient surviving and that it is a much cheaper option, whereas if you catch it later it is much more expensive and the patient has much less chance. We should of course try to prevent cancer, but there is also an argument for improving the way in which we handle diagnosis. Does the Minister feel that there is room for greater emphasis on what Sir Bill Castell described as early health as opposed to the treatment of late disease? Should that be where we should be thinking about going in medical research? More emphasis on that would not, of course, prevent the emphasis on late disease.

My Lords, I join other noble Lords in thanking the noble Lord, Lord Haskel, for introducing this interesting and timely debate. It is timely because in the current recession we are looking at ways in which we may emerge from it, and we all agree that we need to look at rebalancing the economy and shifting towards industries and services that have a considerable science and technology content and could play a bigger role. I think that the creative arts and heritage industries will also play a substantial part in our recovery, but that does not mean that science and technology do not play a part in those industries. If one looks at computer games and animation one recognises that digital technology, which did not exist 20 years ago, and the creative and media industries have come together there.

An area in which I have a particular interest because I chaired a sub-committee of the Select Committee on Science and Technology is science and heritage. Looking at how we can engage people in the role of science and technology, I was fascinated by the degree to which the general public are fascinated by, for example, how the Madonna of the Pinks in the National Gallery was identified as the original by chemistry that identified the paints that were used at the time. When galleries expose conservation techniques to the general public, they find that the general public are interested in them. It is a means of breaking down barriers and the clash of cultures to which the noble Baroness, Lady Greenfield, referred.

On the whole, we in Britain feel that we punch above our weight in science and technology, which a number of speakers mentioned. We say time and time again that we have an extraordinarily good science base, although we have some reservations about how far we manage to translate it into technology. The Government must be congratulated on the degree to which they have given priority to science and technology over the past 12 years. If we look at it in terms of how much money has gone into the research base, it has increased in real terms from £2.4 billion to £5.9 billion; that is, it has more than doubled over the past 12 years. However, the other part of public sector R&D, spending on government departments, has remained more or less static. While business R&D has increased from £11.7 billion to £13.4 billion, as a proportion of GDP overall it has gone down from 1.25 per cent of GDP to 1.08 per cent of GDP. The UK as a whole has set its target at 2.5 per cent.

The noble Lord, Lord Bhattacharyya, mentioned the role of business R&D, which is real and worrying. He said that when he started as an apprentice with Lucas there were two German firms allied to the work he was doing and that the two German firms have gone on to become multinationals, whereas Lucas has disappeared from the scene. That is too often the story in relation to British companies. One of the features of business R&D in the UK is the real role that foreign companies play. In terms of R&D as a whole, it is very disappointing that, having set the target of 2.5 per cent, in 2006 we were down to 1.78 per cent of GDP. In Japan, it was 3.4 per cent; in the US, it was 2.66 per cent; and in Germany, it was 2.54 per cent. As a number of noble Lords have mentioned, President Obama has pledged a doubling of public investment in R&D with an injection of $21 billion, which is a huge amount of money. In business, we have no room for complacency. It is vital that we still move forward.

It is worth mentioning that, although we have 4 per cent of the population of the world, we have 8 per cent of scientific publications and 12 per cent of highly cited publications. In that sense, we produce good science. But we have an ageing population of scientists and very real worries about the number of young people coming forward to study science in our universities. In the past five years, 80 university science departments, mainly in physics and chemistry, have closed. These statistics are very worrying.

What are the current proposals? The Government have pledged to continue their investment in science and technology to 2014, carrying through their 10-year investment plan. The Budget promised a further allocation of £750 million into a strategic investment plan to support advanced industrial projects in growth areas. The research councils have been asked to reallocate £106 million of their funding into those same growth areas.

Two interesting strands of thought are developing. In February, the Secretary of State, Mr Denham, at the Royal Academy of Engineering, said that,

“of course, any research base which does not include a substantial element of fundamental, curiosity-driven research conducted by researchers who simply want to know, will not be relevant economically in anything but the shortest of terms. Many defining moments in science are the fruits of research started and funded years ago—research which proceeded unevenly and serendipitously over time. So stop such work and we kill the goose that lays the golden egg. (We would kill a lot of other geese who would not lay … at all of course, but knowledge for knowledge’s sake is also … worth having). While the driver of fundamental research is curiosity, we shouldn’t, though, lose interest in its links with economic value. A recent MRC and Wellcome Trust report suggests that the average return on investment from the exploitation of fundamental research is 39p annually for every pound invested from the outset”.

That is a very high rate of return, which certainly is worth pursuing.

I am somewhat disturbed by the degree to which the noble Lord, Lord Drayson, has suggested that we should now perhaps concentrate on areas where the UK is likely to be number one or number two in 20 years’ time and that there should be a concentration of resources into a number of growth areas. That has been linked with the new industrial strategy that is emerging from the Department for Business, Enterprise and Regulatory Reform. The strategy talks about ensuring that British science and technology are at the heart of the revolutions in industrial production that we defined in the 20th century, but looking to the future, the strategy identifies the need to pay particular attention to those technological changes that are shaping industries and highlight several sectors, such as low-carbon technologies, digital media, life sciences and advanced manufacturing.

What does all this mean? There is talk of a greater concentration of resources. Are we seeking to pick the winner? The Minister indicates that no, we are not. This takes me back to the 1970s and 1980s when I worked in the National Economic Development Office. We firmly denied that we were picking the winners but were scenario-planning and looking at other forms of moving forward. I look back also to the 1990s and the work I did with the Science Policy Research Unit on the UK Foresight programme. How much is the noble Lord, Lord Drayson, using the Foresight unit in his department and the Horizon Scanning Centre to look at areas where there is growth potential? We have established these Foresight facilities and they are very important.

I end on a note of warning about trying to identify where we are going to be in 20 years’ time. In the early 1970s, the late Lord Rothschild, who led the job of looking at funding for science and technology, considered the Laboratory of Molecular Biology in Cambridge. In those days it had a budget of around £20 million. He asked why all that money was being spent on advanced molecular biological research and where it would take us. But it was the eve of the revolution in biotechnology and all that has stemmed from it. It is extremely dangerous not to invest in a broad science base from which will come a high rate of return and to identify too narrowly from where the benefits may come.

My Lords, it has been a privilege to listen to and learn from noble Lords who have spoken today. I thank the noble Lord, Lord Haskel, for giving us the opportunity to hold this debate, and I agree with the noble Lord, Lord Crisp, and the noble Baroness, Lady Sharp, that his timing is excellent. There is no argument about the important role that science, technology and engineering increasingly will play in the future of our country. These subjects have a central role in promoting innovation and are the key catalysts for productivity growth and competitiveness. New ideas drive enterprise, create new products and markets, and improve efficiency. They deliver benefits to businesses, their customers and society as a whole. Scientific and technological advances also drive improvements in quality of life, particularly through services such as healthcare and security, through environmental protection and energy saving, as well as many other areas already mentioned by noble Lords.

Several noble Lords, including the noble Lord, Lord Haskel, have spoken about the creation of a culture in our wider society that is more receptive to science and engineering. My noble friend Lord Jenkin and the noble Baroness, Lady Greenfield, spoke in particular about the importance of public communication. A moment ago, I mentioned productivity and competitiveness in the same breath because we cannot have the latter without the former. Redesign of the nuts and bolts of an industry or organisation can be as important as innovation. Blue-sky thinking and research need to go hand in hand with improved efficiency of processes.

Despite the importance of science, technology and engineering, we face a number of deficiencies, notably in the realms of education. The noble Lord, Lord Haskel, rightly said that education is where it all starts. For example, there is a lack of skilled teachers which the Campaign for Science and Engineering in the UK has described as “severe”. In 2006, 26 per cent of state secondary schools had no physics specialist and 12 per cent no chemistry specialist. Furthermore, the Government’s science and innovation investment framework 2004-2014 claims that they would continually improve the number of pupils gaining an A*- C grade in at least two science GSCEs. Yet only yesterday it was reported that there are whole areas of England where not a single child has the opportunity to sit separate science GSCEs.

Pupils in some of the poorest areas, who might in better circumstances be capable, are being denied access to top careers in engineering and medical research while, on the other hand, our brightest 16 year-olds are not being stretched. Without a good understanding of science subjects at 16, it is almost impossible for pupils to get top marks in these subjects at A-level and therefore progress to a science degree at a top university. There is a worrying deficiency in the numbers of science, technology, engineering and maths students. Alarmingly, in the United Kingdom only 8 per cent of graduates are engineering graduates compared, for example, to more than 30 per cent in China.

The Government proposed to reform education, training and apprenticeships for young people and adults and to provide new powers to strengthen children’s trusts, improve standards in schools and increase confidence in qualifications. We have had no trouble in supporting such ambitions. The noble Baroness, Lady Wall of New Barnet, among others, spoke of the need to enthuse young people. It is important, too, that the Government have identified that investment needs to be made to encourage the development of skills.

However, as feed-back from all sides of the House confirmed on Tuesday at its Second Reading, the Apprenticeships, Skills, Children and Learning Bill has all the hallmarks of a wasted opportunity. In particular, the statutory entitlement to an apprenticeship proposed in the Bill is meaningless without the mechanisms and the funds to implement it. We will propose a number of key amendments to try to improve the Bill substantially.

On investment more generally, the strategic investment fund of £750 million announced in the Budget, intended to support valuable industrial projects of strategic importance, is, despite disappointment following rumours that it was to have involved a larger sum, welcome. However, there has been considerable vagueness about the details and the real availability of funds, prompting fears that it is a political slush fund for the run up to the general election, to be allocated to perceived winners in fashionable areas of industry and in key marginal seats. We look to the Minister to show why such fears are unfounded. While on the subject of funding, perhaps he could also update us on indications that the Science and Technology Facilities Council is to suffer cuts and delays.

An effective system of intellectual property laws is a key requirement to underpin the knowledge economy and our creative industries. The 2006 Gowers review of the UK’s IP regime identified a number of areas where improvements were needed. So far, as I understand it, only about half of its recommendations have been implemented. I would be grateful if the Minister will tell the House when the rest will. On the subject of IP, I join my noble friend Lord Freeman in congratulating and thanking the British Library on what it is doing in this area.

As my noble friend Lady Thatcher once put it,

“Science and the pursuit of knowledge are given high priority by successful countries, not because they are a luxury … but because experience has taught us that knowledge and its effective use are vital to national prosperity”.

A chemist herself, she of course understood the vital importance of science.

From 1999 to 2006, I jointly owned and ran a technology business. Indeed, I am still a substantial shareholder in the technology company to which we sold it. Such businesses need highly qualified people and so I have a keen appreciation of the importance of STEM skills to our future economy. In Britain, we are lucky indeed—the noble Lord, Lord Haskel, and my noble friend Lord Freeman referred to this—to have so many scientific institutions of international standing, several of which have been represented today by your Lordships, notably the noble Baroness, Lady Greenfield, and the noble Lord, Lord Rees of Ludlow. We on these Benches much appreciate the value of the advice of your Lordships and of those institutions.

Indeed, I particularly welcome ideas as to how, for example, we can improve the retention in this country for commercial development, with the resultant jobs and tax revenues, of more of the, frankly, brilliant ideas which come out of our research, particularly from our great universities. My noble friend Lord Freeman focused on this and gave some helpful ideas. As he said, the issues go wider than finance. As the noble Lord, Lord Bhattacharyya, said, these ideas and innovations are of high quality yet, currently, too often go overseas for commercial development. The noble Viscount, Lord Montgomery, also spoke of this.

If we are to respond successfully to the challenges we face, an approach based on sound science is vital. In subjects such as genetics, nanotechnology and synthetic biology, where research is moving fast, opportunities are opening up for us. Some of these, of course, come with ethical issues, but these need to be addressed with sound evidence.

I referred earlier to the credentials of my noble friend Lady Thatcher. Conservatives have a long history in science. That is why it is so important to us that those in public office are scientifically literate—the noble Baroness, Lady Greenfield, referred to this—and indeed why I, like my noble friend Lord Jenkin and other noble Lords, am pleased that the Government have available the services of people like the Minister. The future prosperity of our country will depend upon our intellectual capital, so it is vital that we continue to invest in research.

I am afraid, though, that all is not well. Our country has been driven to the brink of bankruptcy by a Government who encouraged an over-reliance on financial services and on debt. We should not be surprised that the edifice has collapsed, but, as the noble Lord, Lord Rees of Ludlow, has said, through both private and public investment in research, technology and engineering, we have an opportunity to rebalance our lopsided economy. The noble Lord, Lord Haskel, also emphasised the need for this rebalancing, as did the noble Baroness, Lady Sharp.

Our universities, science parks and hi-tech and creative businesses provide solid foundations on which we can rebuild. Indeed, our creative industries, to which the noble Lord, Lord Bhattacharyya, referred and which, as the noble Lord, Lord Howie, said, have already had an outing in this Chamber today, are now worth over 7 per cent of GDP. Britain really has got talent, particularly in areas such as design and digital media, which offer great potential for growth.

We must acknowledge, though, as several noble Lords have, that there are always limits to the funds, especially the public funds, that are available. The noble Lord, Lord Bhattacharyya, and the noble Baroness, Lady Sharp, among others, rightly spoke of the importance of private sector investment. Taxpayers’ money must be allocated and controlled effectively. Future funding plans must be credible. We must clearly identify—the noble Lord, Lord Crisp, among others, touched on this—where the money is to come from so that research continues while the economy is stabilised.

We must also look seriously at the burden of regulation that can depress productivity. There is a strong danger that cries to increase regulation, aimed in reality at our financial sector, will drown those for a reduction in red tape in our honest-to-goodness engineering and manufacturing sectors, the sectors of which the noble Baroness, Lady Wall of New Barnet, spoke.

As a nation, we must be clear about our research spending priorities. We must maintain a robust science base, with a stable funding system. It is imperative that we look back on this dire period in our economy not as another lurching step on our downward path but as a new beginning. It is axiomatic that science and engineering are now more important than ever to our future national prosperity.

My Lords, I thank my noble friend Lord Haskel, for securing this important and timely debate. In fact, as the noble Lord, Lord Crisp, said, this is an urgent debate. I thank all noble Lords who have spoken today; their contributions reflect the true expertise in this House on these matters and reflect well on its expert role.

Science, technology and engineering represent a public good, in the best and strictest sense, growing in value as they are used and shared and yielding tangible benefits for our society, our democracy and our economy. Indeed, our only hope in dealing with the major challenges facing the United Kingdom and the rest of the world—clean energy, disease, sufficient food and water—is to address them through science, technology and engineering. For our economy to achieve sustainable growth, it requires a constant stream of top-quality research to generate new ideas, products and processes so that we can compete in the next-generation industries in the modern world. However, as my noble friend Lord Howie said, it also requires us to ensure proper recognition of our scientists, our engineers and our science entrepreneurs. This Government, I believe, have done that and are doing it. This Government have treated science as one of their highest priorities for public investment and they will continue to do so.

As my noble friend Lord Haskel argued, post-credit crunch, there is an urgent need to rebalance our economy. We need to ensure that those areas where the United Kingdom has the potential to generate future growth are ones in which we continue to invest. Science is key to building Britain’s future. We see approximately 2.7 million new jobs over the next 10 years based around science and engineering. I could not put it more clearly than my noble friend Lady Wall did when she spoke about science being key to getting out of this recession.

When I speak here of science, I mean not only the physical or medical sciences but the social sciences. I trust that noble Lords will allow me to employ the word “science” in its broadest sense. Let me be clear: I believe that we should fund science even if it produces no measurable economic benefits. Building a greater understanding of our universe is worthy of investment in itself. But I believe that in practice there is no such dichotomy in terms of science spending. There are no hard and fast lines between pure and applied science but, rather, a range of potential benefits when scientists tackle interesting questions.

History has shown us repeatedly that, when world-class scientists are given the resources to ask new questions and introduce fresh perspectives to older ones, they generate insights that ultimately drive the economy, improve the quality of our lives and achieve more besides. After a lifetime in science, I am optimistic about the capacity of this country’s research base to rise to the challenges of the 21st century. In the past six months, in my role as Minister for Science Innovation, everything that I have seen has increased that optimism. I have seen the talent at work in this country.

It is no accident, as we have heard from a number of noble Lords, that the UK is ranked No. 1 or 2 in the world in almost every area of science, or that our researchers are more productive per pound spent than those of any other major nation. They are twice as productive, for instance, as their counterparts in the United States. There is something very special in the water, so to speak, in the United Kingdom when it comes to what we do in science.

This world-class performance is also as a result of a dramatic and sustained increase in public investment over the past 12 years. More than £1 billion has been spent on developing our research infrastructure, reversing years of crippling underinvestment under the previous Government. It is the result of, for example, ring-fencing science funding, which has created stability and enabled long-term planning, and of the freedom provided through quality-related research funding for our universities. It is also the result of preserving the independence of the research councils, which make decisions that are in the best interests of their own specialist areas.

The impact of this investment and the effectiveness of the systems through which it is channelled are clear. We can see from the results that it is working. Universities’ external income rose to £2.6 billion in 2006-07—a 50 per cent increase in real terms since 2001. Early indications show another real-terms increase in 2007-08. Even in this very difficult global economic environment, university spin-outs raised more than £1 billion of outside investment last year. UKTI reports that the strength of our research base attracted 251 R&D investments to the UK during 2007-08 alone.

As the noble Viscount, Lord Montgomery, recognised, we have always known that we have been brilliant at invention, but there has been a transformation over the past 10 or so years. We are also now brilliant at commercialisation. I saw for myself the changes that took place in Oxford University through the late 1990s into the early years of the 21st century. From the perspective of scientific breakthroughs, our research base has really delivered.

However, despite all this success, I agree with the noble Lord, Lord Rees, that we still need to raise our game. Competitors are becoming more numerous and many more countries are focusing on these areas of science. Recent investment made under the new Administration in the United States has shown the way to go.

What is the role of modern government? It is certainly not to tell scientists how to do their jobs, what experiments to do and which hypotheses to explore. We rightly separate ourselves from those decisions in accordance with the well established Haldane principle, but the Government can, and must, look at the big picture and towards the long term, so that this country is in a position to address the inevitable challenges of the future such as coping with climate change or the effects of an ageing population. It is entirely appropriate for government to direct the attention of scientists and engineers to these issues, not telling them how to tackle them, but asking them to find solutions none the less. That is precisely what we have done by creating cross-council programmes in areas such as global security. The research councils are already exploring how to tackle this and other issues in a co-ordinated way. I am very keen for this culture to become more firmly embedded across the science community.

The noble Lord, Lord Freeman, rightly highlighted the fact that, despite our significant investment in our science base over the past 12 years, there is as a result of the global credit crunch a dire shortage of venture capital to enable the spin-off businesses from our universities to grow. I am happy to confirm that the Government are working on programmes to identify actions that they can take. I am happy to clarify that the discussions relating to a state-backed bank recognise that two separate problems need to be addressed: first, the lack of venture capital for those companies that are typically pre-profit and how capital can be generated during this market failure to ensure that the money is available to take them through to profitability; and, secondly, the provision of development capital, as the noble Lord said, post the transition of 3i into larger, more highly geared private equity deals. There is also a lack of development capital for companies that are already profitable to take them to future growth. We are looking at both those areas.

My department, DIUS, working with other government departments such as BERR, is at the forefront of making sure that science and innovation can fulfil their potential, identify problems and come up with solutions. I note the points made by the noble Baroness, Lady Sharp, based on her extensive experience in this area. While we need to need to learn the lessons of the past and from the failures of this type of industrial policy, we still need to recognise that intelligent choices need to be made.

We have had successes. For example, we recently secured agreement on the European Space Agency’s first investment in a facility in the United Kingdom, at Harwell. That is excellent news, which raises the profile of another thriving UK industry, the domestic space industry, and will increase the involvement of our scientists in international programmes.

I am delighted to have the opportunity in response to the noble Lord, Lord Crisp, to highlight the work of the Office for Life Sciences, which has been set up to drive change across government departments in support of what is now, post the credit crunch, our single most important industrial sector. I am happy to confirm the themes that he highlighted: the promulgation of best practice across the NHS and the recognition that in the NHS we enjoy a competitive advantage that no other country has. We need to exploit that advantage properly, particularly the patient database going back to 1948.

Many noble Lords have mentioned the importance in all this of science communication and the engagement of science with the wider community, which is why the Prime Minister and I earlier this year launched the “Science: So What? So Everything” campaign, not to target the science community but to address the sense, as mentioned by several noble Lords, that science is seen too much as the preserve of the elite and not as something affecting everyone’s lives. The campaign has been very successful and we will maintain it, using the media and celebrity ambassadors to convey the relevance of science in every part of our lives.

As the noble Baroness, Lady Greenfield, highlighted, we need to recognise the cultural clashes that exist between the timescales in different parts of our society. I pay tribute to the work of the Science Media Centre, which noble Lords have mentioned, but we need to take this further if we are to make the UK a continued leader in science.

Our ability to exploit our science base to deliver economic growth is in part to do with making better use of the Government’s massive procurement budget to support and drive innovation. That is why we are putting effort into our small business research initiative, which supports the high-technology SMEs at a critical stage of their development. In particular, we are developing the Technology Strategy Board, which I am grateful to a number of noble Lords for highlighting, particularly my noble friend Lord Bhattacharyya. It has been a success, which is why we have put more investment into it—an additional £50 million, allocated to the board through the strategic investment fund. The noble Lord opposite described it as a slush fund, but it is anything but that; it is a strategic investment fund, going into those areas of growth where the United Kingdom has real competitive advantage, such as life sciences, clean tech, new energy and renewables, digital and IT. It reflects the continuing importance of investing in technology and innovation for the sake of our long-term competitiveness.

At the same time, we must continue to extract maximum value from the public investment in science. Maintaining our investment under the 10-year science framework gives a clear sense of our commitment to do that. Of course, the global recession makes increased efficiency a universal virtue and increases demands for accountability. The Government must make efficiency savings in all areas, science included, but I reassure my noble friend Lord Haskel that there has been absolutely no cut in the science and research budget. The ring-fence remains intact despite the spending pressures. The science community is in the unusual position of having a commitment that all efficiency savings that can be generated—through the lower rate of inflation, for example—can be invested directly back into scientific research. The research councils have announced that projects related to such areas as life sciences and the green economy would benefit from this. However, I stress that it is the science community that decides what the areas are and where the research investment should go.

Whether we are experiencing a downturn or enjoying economic growth, people have every right to know that their taxes are going to best use. They have every right to expect that scientists with support from the Government are looking at every opportunity to derive benefits from the excellent research that they undertake. That requires the science community to look hard at the knowledge that it generates; irrespective of whether that knowledge emerged from a project that is pure or applied, it should consider the potential impact. The research councils now ask all grant applicants to do this, and I believe that that is right.

Also, it is the fundamental responsibility of scientists funded by the taxpayer to engage with the public and to explain the value of the work that they do. We need scientists to talk not just to one another but to people in business, public services and the Government through the media. The best way in which to encourage them to do this is through the way in which the research is assessed. As the noble Lord, Lord Jenkin, highlighted, they should have the opportunity to stress what is known as well as what is not known. Therefore, the Government have asked the Higher Education Funding Council to make sure that the new research excellence framework reflects the quality of researchers’ contribution to policymaking and public engagement and makes it easier for researchers to move between academia and the private sector.

Let me say a few words about focus. The recession poses a far greater challenge for us than just the need for efficiency. We need to reshape our economy to be competitive in the industries of the future. As the noble Baroness, Lady Sharp, said, I offered three criteria that I asked the research community to consider, so that it, business leaders and the Government could decide together where science investment may be best focused to help to rebalance the economy. I stressed areas where the growth opportunities over the next two decades will be significant, where the UK has a realistic prospect of being No. 1 or 2 in the world and where we have a clear competitive advantage.

The research councils have reported back to me on how the science community can best support this, and the Government will say more about this through sector-specific policies in the months ahead. This is how, for example, we will be employing the £750 million strategic investment fund. It is an example of why a full £250 million of the fund will be targeted at low-carbon projects.

For all my emphasis on efficiency and focus, I want to conclude by reiterating the quality of UK science and by stressing the Government’s continued commitment to science. That has to be right for our long-term success, which depends on our having faith in the ability of our researchers to make the profound discoveries that have defined this country’s scientific legacy to date and which will meet the challenges of the future. I again thank my noble friend Lord Haskel and other noble Lords for this fascinating and informed debate. A number of points have been made that have given me constructive ideas, particularly those made by the noble Baroness, Lady Greenfield, which I will take forward. Any points that I have not answered I will write to noble Lords on.

My Lords, I thank all noble Lords for speaking in the debate and for their kind words. Sadly, there is not enough time for me to reply to every noble Lord. I have learnt an awful lot. There has been a lot of agreement about the value of science, technology and engineering, and the urgent need for communication and engagement. Over the years, many people have asked me what the value and purpose are of the debates that we have in your Lordships’ House. Surely, I am told, our job is just to legislate, to hold the Government to account, to hear from the Government and to hear from the Opposition. It is not. The response is that, in debating these issues, we provide a valuable opportunity for those with no organised voice to be heard and to hear the voices that need to be heard. Today we have heard those voices. I hope that the Government and society are listening. I beg leave to withdraw the Motion.