WEDNESDAY 18 APRIL 2007

MALCOLM WICKS MP, AND DR DAVID WILLIAMS

  Q680  Chairman: Minister, one of the issues that has been constantly put to us is that we are actually living on past investment in this area. You do not agree with that?

  Malcolm Wicks: No, I do not agree with it but I am not complacent. Clearly, commercial interests will come to a Select Committee, they will come to a Minister, and—surprise, surprise—they will call for more taxpayers' money to fund their exploits. We all understand that. Appropriate investment in the future will be made.

  Q681  Graham Stringer: What we are really asking is why has the investment from the DTI gone down?

  Dr Williams: This is the national spend from the DTI. That has gone down. The DTI used to have the money that is in NERC and some of the money in what is now STFC. When that split was made some of the money went out and there has been a reduction. That was, I think, as we all know, why in the current CSR we have a bid in for a national technology programme. That will redress a lot of that balance, depending on how much we manage or manage not to get from the process.

  Q682  Chairman: I was particularly struck by a comment that the UK Space Academic Network made, which was this: "that the declining resources in the past decade for the national programme means that we are living on past investment in a situation exacerbated by the lack of a coherent national space strategy". That, really, is at the heart of what we have been trying to discuss. Do you agree with that comment?

  Malcolm Wicks: I do not agree with that, by the way, because—you say it is the academic group?

  Q683  Chairman: Yes, it is the UK Space Academic Network.

  Malcolm Wicks: I am often puzzled by the way people talk about DTI expenditure. It just so happens that we fund all the research councils, the DTI, on behalf of the taxpayer. PPARC's expenditure (we will look at the real figures for you) has gone up since 2001 from £42 million to £76 million, and the National Environmental Research Council from £10 million on space to £53, almost £54 million. It is actually DTI money, perfectly properly, spent at arm's length through the research councils. The academic community, I am sure, recognise that.

  Q684  Adam Afriyie: So you are comfortable and you are confident today that a UK share of investment, or market share in space industries, will continue at the current level or, if not, improve with the current government policy?

  Malcolm Wicks: What I feel confident about is that, by and large, we are in a good place, at the moment, across the piece, both in terms of commercial exploitation, the interests of a number of significant government departments, and feel very confident also about the academic and scientific base. Really, I am not complacent at all. This is a growing market, it is going to be measured in trillions in the future, and it is absolutely important that we make wise judgments, as it were, together to make sure that we maintain and improve our position. I am sure there is more that is needed and there will be a need for more public investment, and certainly that will come through the science budget, and there is going to be a need for more innovation, so we make sure that entrepreneurially we are in a very good place.

  Q685  Adam Afriyie: So if our percentage share of the world market goes down over the next two or three years you would be stunned and amazed because you believe the current policy is about right?

  Dr Williams: I cannot answer that question. On the investment side, we are making decisions at the commercial end of the market and we recently agreed, through the Minister and through the DTI, to find money for a programme, Alphasat in ESA, which is a telecoms programme aimed at the commercial market. So we have moved from a blanket subscription to a mode on the commercial side of looking at the case, and we are making decisions. We made that decision four or five weeks ago. The national programme is a different debate and that is where we have made a conscious effort in the CSR to address that issue, and I await the outcome of the CSR.

  Malcolm Wicks: We think, at the moment, that the overall contribution to the UK GDP is about £7 billion. The estimate is that—I need to read this out so that we can record it properly—the compound average annual growth rate between 1999 and 2005 was some 10.2%. So that is why I am confident we are not in a bad place at the moment.

  Q686  Mr Newmark: It all depends from what base. You cannot use a compound annual growth rate statistically if you start off from a very low base. It is an interesting figure you use but you can only use it in the context of where you started from. Anyway, the question I would like—

  Malcolm Wicks: Turnover is about 4.8 billion at the moment in the UK. Yes, it is not the biggest industry in Britain but it is moving ahead in the right direction, and we should not talk it down.

  Q687  Chairman: Minister, can I say that nobody on this Committee is talking it down at all. We actually feel, in terms of our inquiry, that the space industry is one of the most exciting, most virile and most entrepreneurial industries that, certainly, I have met since I have been on this Committee. What we are trying to argue is that the Government also recognises that and recognises that for every pound that is put in it gets a phenomenal return of money to the taxpayer. That is a comment.

  Malcolm Wicks: Which we do, I think.

  Q688  Mr Newmark: During this period of time, has there been a significant amount of private sector investment from venture capitalists, and so on, going into this to make up, perhaps, for the difference that some people have seen—ie yes, the Government has been putting money into this but, actually, has the private sector also been putting a lot of money into this to help the industry?

  Dr Williams: There are two aspects. One, on the ESA side, the programmes are now 50/50 funded on what we call the telecoms area—the commercial end of the work—so, yes, that is stabilised. The two programmes recently, the HYLAS programme, which Avanti Systems are running, they have raised significant private capital to build satellites based on a subscription by government to an ESA programme which was matched by the supply industry, Astrium. They have raised money to launch a satellite for telecoms, and the bid I was talking about, the Alphasat programme, if Inmarsat win that bid and everything goes to plan they will be investing seven to eight times the investment of government in sustaining that programme.

  Q689  Mr Newmark: Which has to be a good thing.

  Dr Williams: That is the model we are looking for (this is the user benefit); that we encourage the market to put some of the money in, and we take the areas of risk out.

  Mr Newmark: The businesses can continue growing, we can have a good market share but it does not necessarily always need to come from government, is the point I am trying to make. My questions are on education and skills.

  Q690  Chairman: Before you do that, can I just clarify one point with you, David. You have talked about the national space technology programme to us—you are going to establish that—is that where all the funding for space will come through or will there be other programmes alongside it?

  Dr Williams: What I am trying to do, with the partners, is establish a single programme of activity in terms of content and direction and then find each of the partners who can contribute to it to fund part of it. So it is not all the money. I expect all the partners—because all the partners are doing things at a national level already, so it is to bring it into a single, coherent, technical programme.

  Q691  Chairman: When will that be? When will we hear an announcement?

  Dr Williams: We are hoping to establish that by the autumn of this year, so that it can kick off in the new financial year, at a lower level while we build it up.

  Q692  Mr Newmark: Minister, David Williams told us previously that he had (I am quoting him) "no direct interaction with DfES", yet DfES is a BNSC partner. Does the lack of interaction between BNSC and one of its partners concern you?

  Malcolm Wicks: I have a lot of interaction at ministerial level, obviously, on the teaching of science, technology, engineering and mathematics (the STEM subjects). I have had at least two sets of meetings with Bill Rammell in the DfES about these matters. As part of those discussions we have talked about the importance of space as a way of energising and developing the interest of children in these kinds of scientific studies. So, at that level, there is contact. I was pleased when, during Science Week, I visited one school in Cardiff where space was very much part of the curriculum as a way of interesting children in experimentation and science.

  Q693  Mr Newmark: David, do you feel that response deals with your concern?

  Dr Williams: What I said previously was yes, I felt that BNSC as an organisation, historically, had little contact with education. I said I was going to try and rectify that. I know the Minister is very keen on this area for lots of reasons, and I think, as we move forward, we are really going to make efforts. I saw a report from Leicester University on teaching in schools; I only glanced through it as a first cut but it looked like over a period of about six to nine months, on a fairly large sample of several hundred, the average grading of schoolchildren increased when space was in the curriculum. That may be because they chose schools where the children are excited and interested—we have got to look at the sample structure—but there is an indication coming through from a formal study that space does have an impact on kids' ability to learn science, and we are going to try and build on that with our efforts in Yorkshire Forward, with DfES and with the Leicester Space Centre.

  Q694  Mr Newmark: That brings me to the next question: why has the drive to establish a space education office in the UK come from a Regional Development Agency, Yorkshire Forward, rather than from BNSC or DfES?

  Malcolm Wicks: I am not apologising for the fact that the RDA have done good work there.

  Q695  Mr Newmark: I know that, but why has this come from a Regional Development office rather than nationally? It is a national project, so why has it come from an RDA?

  Malcolm Wicks: I am sure we need to do more, all right? I will talk again with DfES ministers about this. I think the Chairman and I, having both served on the Education Select Committee, are always slightly wary about saying to schools that they are the way to crack this problem. Every week people take a subject and say schools should be doing more, but I think this will benefit schools, and many of the best schools are doing this already as a way, as I say, of bringing science and mathematics—

  Q696  Mr Newmark: I agree, I was just curious as to why the leadership has come from the regional level rather than a national level.

  Malcolm Wicks: There are two things which we could exploit, actually: one is a scheme of science and engineering ambassadors that we have (some of you may know about this) whereby—they are not all young but some are often quite young—scientists and engineers working in private sector companies or the public sector actually go out to schools to tell children, as ambassadors, about the importance of science and engineering. We just need to check, David, whether some of the companies involved in space exploration, as it were, have their fair share of ambassadors. The other thing I would mention is that we have recently launched, my department and DfES (we are so close, you see), a scheme of science clubs in schools. We are hoping that that will develop. No doubt in science clubs it will be up to the children, I suspect, significantly, what they want to do, but you can well imagine that space would be one thing that would excite them.

  Dr Williams: If I can answer the point about the RDA, Yorkshire Forward have a remit to promote science in schools, and the good news about what has happened is how quickly we have locked on to working together with them to do things because it has not been sat in isolation—

  Q697  Mr Newmark: I think it is fantastic that Yorkshire Forward is doing this. My point was why has the initiative come from a regional level rather than a national level.

  Dr Williams: Because, in the way of the structure of the RDAs, each RDA has special remits and they do have one in promoting science.

  Q698  Mr Newmark: We have been told by LogicaCMG that recruiting graduates with the right skills is quite a struggle. What are you doing to ensure a skills crisis does not develop in this sector?

  Malcolm Wicks: Again, I think we have to relate that to the more generic issue about how we get more of our children studying science, particularly mathematics and particularly physics. There are problems, at the moment. From memory, the number of A level students for physics is in decline, although some of the other sciences are moving in the right direction. So we are not complacent about that but physics is, obviously, crucial and it is more the territory of DfES than DTI. However, a good deal of work is going in to trying to improve our physics capacity in ways which I could talk about but not as knowledgeably as a DfES minister might be able to.

  Q699  Mr Newmark: We have heard from Avanti, more specifically, that 70 to 80% of our highly qualified satellite engineers, which is an area of excellence within the UK, have come from China or India in the last two years. Is a global market solution acceptable to a shortage of skilled satellite engineers in the UK?

  Malcolm Wicks: Was your figure 7 or 8%?