Engineering Biology (Science and Technology Committee Report)

Lord Mair Excerpts

Monday 28th April 2025 Grand Committee

[Lord Mair (CB)]

My Lords, I speak as the new chair of the Science and Technology Committee, and pay tribute to my predecessor, my noble friend Lady Brown, for her splendid leadership of the committee over the past three years. I congratulate her and the committee on producing this important report on engineering biology, and on her excellent introductory speech to this debate.

The report has the significant title: Don’t Fail to Scale: Seizing the Opportunity of Engineering Biology. It is on the more general topic of scaling up UK science and technology companies that I wish to briefly speak. As already mentioned by the noble Viscount, Lord Stansgate, our committee has recently launched a new inquiry into financing and scaling UK science and technology. It is about that challenging pipeline, from the initial innovation, through the scale-up investment and culminating in the development of new industries in the UK that can so effectively benefit our economy and public services.

It has long been recognised that the UK struggles to translate a lot of its excellent research into the largest technology companies. This is now leading to a relative decline. In 2013, 118 UK companies were in the top 2,000 spenders on R&D globally. By 2023, that had declined to 63. China has more than quadrupled its share, while the US has maintained a leading position, with around a third of those companies. The UK has only two companies in the top 100, both pharmaceuticals. There is also a growing trend for the companies that do start up here looking overseas for investment, and increasingly being sold to buyers in the US. This is leading to what this House’s Communications and Digital Committee described as the UK becoming an “incubator economy”.

All this matters immensely for the UK. The Government are relying on economic growth to continue to fund public services, healthcare, measures to mitigate climate change, and, increasingly, defence. There can be no doubt about the potential for technology to enhance growth, tackling global and national problems, but if our science and technology companies continue to fail to scale—and engineering biology is a specific example of this—then the economic and social benefit from these technologies, and from the UK’s R&D spend, may well end up overseas.

It is clear that the majority of investment that UK science and technology companies will have to raise will come from the private sector, but this has been limited in recent years by the pull of the US market, which has a much deeper pool of available capital. It has also been limited by global trends, such as the rise of passive investment, which has led to fewer investors actively seeking out and investing in smaller UK science and technology companies.

The committee’s report recommended reforms in the very important pensions sector. These entail supporting consolidated pension funds to be less conservative and to invest in small, innovative UK tech companies, providing scale-up capital for them as part of their diversified portfolios. Australia, Canada and the Netherlands are examples of countries that have successfully implemented such practices. The Government are seeking to address this through the Mansion House reforms to encourage pension funds to combine and invest in UK science and tech companies, but one witness described this as a generational shift that could take a decade to implement fully. The reforms and their implementation need to be more ambitious and faster. Can the Minister set out how DSIT is engaged with this process of encouraging major pension fund investment in innovative UK tech companies?

Our inquiry into financing and scaling UK science and technology is just getting under way, but we have already heard a lot of important evidence. Our call for evidence is open until 9 May and sets out some of the areas we are interested in, including what we can learn from international comparisons. We are interested in how well current UK policies to support scaling up are working.

The problem of scaling is not new, but we are in a new context with a new Government, a shifting global order, changing priorities and a new technological landscape. The response from the Government to the engineering biology report left a lot to be announced in the forthcoming industrial strategy and after the spending review. There are some promising initiatives, but we are still waiting to see the overall strategic direction and whether the UK will seize the opportunities available or continue to fail to scale. We look forward to continuing our present inquiry and the Minister’s participation in it. Scaling our science and technology is a hugely important and pressing issue. We can all agree that we have to get it right.

Science and Technology: Economy

Lord Mair Excerpts

Thursday 31st October 2024 Lords Chamber

[Lord Mair (CB)]

My Lords, I too am grateful to the noble Viscount, Lord Stansgate, for introducing this important debate. Science and technology could not be more vital to the economy than at the present time. As an engineer, both in practice and at Cambridge University, I welcome the Government’s very recent Green Paper. Invest 2035: The UK’s Modern Industrial Strategy identifies eight key growth-driving sectors. Three of these are advanced manufacturing, clean energy and digital technologies. Engineering is at the heart of all three, driving innovation and economic growth. It also plays a key role in many aspects of other sectors, such as defence and the life sciences. Engineering is integral to achieving outcomes from science and technology. The resulting new products, services and enterprises generate jobs, boost the economy and benefit society.

Demands on engineers are greater than ever, with the world facing challenges and opportunities that depend on substantial engineering input. Chief among these are the climate emergency and the rapid progress in artificial intelligence and related digital technologies. At the heart of the Government’s agenda is making the UK a clean energy superpower, with zero-carbon electricity by 2030. This involves major investments in wind and solar power, carbon capture and storage, hydrogen and long-term energy storage. Nuclear power will also be essential, and small modular reactors—mentioned by the noble Viscount, Lord Stansgate—have considerable promise. To be successful, all these technologies will require increasing numbers of engineers and technicians.

However, the UK faces an acute engineering skills gap. The Royal Academy of Engineering’s National Engineering Policy Centre has laid out how to bridge this gap—by reversing the shortage of STEM teachers, increasing apprenticeships and promoting engineering as an attractive career choice in the application of science. We should take a leaf out of Germany’s book: 20% of its 25 year-olds have a higher technical qualification; in the UK, the present figure is only 4%. Further education colleges and their role in science and technology have been neglected for too long, so I welcome yesterday’s Budget announcement to increase the funding of further education by £300 million. The plans to reform the apprenticeship levy are also welcome. In addition to supporting our world-class universities, an enhanced future for apprentices, including degree apprenticeships, will be especially important if this country is truly to become a technological superpower.

Our world-class, research-intensive universities are undoubtedly national assets and are highly regarded globally. As well as their key roles in education, training and curiosity-driven research, their science and engineering departments are hugely important drivers of economic growth. But many universities are now in a precarious financial state. In the upcoming spending review, their R&D needs further investment and support from the Government so that they can continue to innovate, attract foreign investment and stimulate industries. “Invest, invest, invest” was the mantra of the Chancellor in her Budget speech. Enhanced support for science, technology and engineering in our universities and for university-business collaboration could not be a more important investment. It will be crucial for the successful delivery of the industrial strategy, for growth and for the economy.

King’s Speech (4th Day)

Lord Mair Excerpts

Monday 22nd July 2024 Lords Chamber

[Lord Mair (CB)]

My Lords, I join other noble Lords in congratulating the noble Lords, Lord Livermore and Lord Vallance of Balham, on their appointments as Ministers. I also congratulate the noble Lord, Lord Vallance, on his excellent and important maiden speech—and the noble Lord, Lord Petitgas, on his maiden speech. The noble Lord, Lord Vallance, is especially welcome as Minister for Science. His very considerable expertise in science and technology is warmly welcomed in this House. The vital importance of science and technology was emphasised in His Majesty’s gracious Speech in relation to the Government’s plans for sustainable economic growth.

The absence of an industrial strategy in recent years has undoubtedly been problematic for this country. The new industrial strategy to be introduced by the Government is therefore very welcome, as is the proposed industrial strategy council, to be established on a statutory footing. It is to be hoped that this will result in a stable pipeline to enable industry and the UK’s world-renowned science and engineering research base to deliver innovations and provide confidence for businesses to thrive.

It is also to be hoped that the proposed new industrial strategy has real meaning. Much has been said about industrial strategies over many decades. In 2018, during a debate in this House, the noble Lord, Lord Hennessy, noted that the then formal industrial strategy set out in 2017 had been at least the eighth government industrial strategy to be published since the Second World War. A few years later, that industrial strategy too was abandoned, and from 2021 the previous Government instead pursued various other plans for growth. The establishment by this new Government of an industrial strategy council on a statutory footing should ensure continuity of an industrial strategy. It is continuity above all that is needed.

This country has an outstanding science and technology research base. To harness it most effectively the UK requires a robust and consistent strategy for industry and for universities, scrapping short-term funding and aiming for long-term stability. This is what is crucially needed to ensure economic growth.

My final point relates to employment and skills. There is a huge need for engineering skills to deliver the green and digital economies, adapting to the new, fast-moving technologies. These include the all-important AI, as so well articulated by the noble Lord, Lord Vallance, in his excellent maiden speech. At the heart of the Government’s agenda is making Britain a clean energy superpower, with zero-carbon electricity by 2030. The Government’s clean power mission plans major investments in wind and solar power, carbon capture and storage, hydrogen and marine energy, decarbonising the electricity system and long-term energy storage. Nuclear power will also be essential. All these important and welcome technologies will be vital for economic growth. All the associated innovations and required new infrastructure—the driving forces for the industrial strategy—will require many more engineers and technicians to be employed.

Employers are constantly referring to the acute national shortage of engineering skills; this is limiting the success of an industrial strategy or of an infrastructure strategy. There is a substantial untapped resource of future engineers and engineering apprentices in our schools. We need to address this urgently and plug the skills gap. Only then can the much-needed economic growth be realised.

Further education colleges have been neglected for far too long. I welcome the Government’s plan to transform FE colleges into specialist technical excellence colleges, as well as reforming the rather unsatisfactory apprenticeship levy, ideally as soon as possible. In addition to supporting our world-class universities, an enhanced future for apprentices, including degree apprenticeships, will be especially important if this country is to become truly a technological superpower.

Overall, I am optimistic for the future. I wish the new Government every success in their plans to enhance the UK’s position as a leading industrial nation, these plans being vitally underpinned by science and engineering.

Science and Technology Superpower (Science and Technology Committee Report)

Lord Mair Excerpts

Wednesday 7th June 2023 Grand Committee

[Lord Mair (CB)]

My Lords, I declare my interests in the register and congratulate the noble Baroness, Lady Brown of Cambridge, and her committee on producing this important and comprehensive report. It rightly emphasises the need for government to have a clear and consistent science and technology policy, with a laser focus on implementation to prevent “science and tech superpower” simply being an empty slogan.

I will make just two points. The first relates to the vital role of industry engagement, and the second concerns the crucial importance of association with Horizon Europe. On the role of industry, the Government’s R&D spend of 2.4% of GDP requires significant private sector investment, which is expected to be around twice the public sector spending. The apparent increase to 2.4% is, of course, welcome, but it represents a significant increase in industry funding. As the Select Committee report notes,

“industry does not yet feel engaged with the strategy process”

of the Government.

A vital ingredient of the pathway to the UK becoming a science and tech superpower will be effective translation of research for application and exploitation by industry. The recent Nurse review, published in March, addressed the importance of translational research organisations, rightly emphasising the need to bridge

“the gap between discovery research and the translation of that research into real-world uses”.

The review highlights the important role of catapults in achieving this. They are independent, not-for-profit technology and innovation centres first established by the Government in 2011. They are intended to foster collaboration between research organisations in the public and private sectors, and their main purpose is to assist industry with turning innovative research ideas into commercial products via connections and networks. The Royal Academy of Engineering emphasises the importance of connections and networks, as exemplified by catapults, in its recent position paper, Strategic Advantage through Science and Technology: the Engineering View, which was published in April.

This House’s Science and Technology Select Committee considered catapults in detail in its report, Catapults: Bridging the Gap Between Research and Industry, published in February 2021. I was privileged to have been a member of that committee under the excellent chairmanship of the noble Lord, Lord Patel. We made a number of recommendations regarding catapults, and our report was debated in the House last year.

In particular, we highlighted the crucial question of the future role and long-term continuity of the catapults. We recommended that the Government prioritise scaling up the Catapult Network, promoting it as the UK’s national innovation asset. In the light of the ambition for the UK to become a science and technology superpower, can the Minister provide an update on the Government’s strategy regarding catapults and their role in promoting substantially greater industry R&D investment?

My second and final point relates to Horizon Europe. The noble Baroness, Lady Brown of Cambridge, referred to this critical post-Brexit issue in her excellent introductory speech, as did other noble Lords speaking in this debate. The Select Committee rightly highlights the damage already caused to the UK’s reputation and scientific capability by the ongoing lack of association with Horizon Europe. UK universities have built high-impact science, technology and innovation networks over many decades of collaboration within EU framework programmes. These are now in jeopardy.

The UK must be seen by all international research communities as a reliable partner, and the Government must recognise that their plan B in the event of non-association with Horizon Europe is in danger of being a poor second best. The Nurse review concludes that it is essential that the UK associate with Horizon Europe. If it does not do so, the UK is in real danger of losing its prestigious position in the global R&D hierarchy, becoming less attractive as a research partner and for foreign investment and less likely to become a science and technology superpower.