I refer to your letter of 15 December and would like to add the following observations to supplement the evidence which we submitted to the Committee back in May of last year.

  From our perspective there have been two main events which have had a positive impact, namely the Chancellor's pre-budget Report in November and the Competitiveness White Paper in December.

  Through the pre-budget Report and the Competitiveness White Paper, the Government has clearly stated its desire to improve the science base within the UK, the commercial exploitation of research and new ideas and the creation of a more entrepreneurial society. Whilst changing the culture will be difficult to achieve and undoubtedly will take time to bring about, the following initiatives are welcomed and should go some way to the end goal.

—  The DTI are providing £20 million of funds for the Reach Out Programme (HERO);

—  Eight Enterprise Centres to be set up at UK HEIs;

—  Development of a nation-wide network of Faraday partnerships;

—  The doubling of support from the DTI to the Teaching Company Scheme;

—  Provision of £10 million for collaborative projects under the Foresight—LINC awards;

—  Corporation tax relief for research and development for smaller companies;

—  Government and Welcome Trust funds of £1.4 billion to help modernise the UK SET base;

—  The NESTA £200 million endowment for creative individuals;

—  The development of an Enterprise Fund to include regional venture capital funds, together with the private sector to address the equity gap.

  I hope that you find the above of use and if you require further comment or information, please do not hesitate to contact me.

25 January 1999