7 Lord Willetts debates involving the Department for Business, Energy and Industrial Strategy

Wed 17th Nov 2021
Mon 30th Jan 2017
Higher Education and Research Bill
Lords Chamber

Committee: 7th sitting (Hansard): House of Lords
Mon 30th Jan 2017
Higher Education and Research Bill
Lords Chamber

Committee: 7th sitting (Hansard - continued): House of Lords

Catapults (Science and Technology Committee Report)

Lord Willetts Excerpts
Thursday 19th May 2022

(2 years, 1 month ago)

Lords Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, I begin my intervention in this debate by declaring my interests as a member of the board of UKRI and as chair of the board of the UK Space Agency, which works closely with the Satellite Applications Catapult, but I am speaking very much in a personal capacity rather than on behalf of those bodies. I very much welcome this excellent report and congratulate the whole committee on it. It has been marvellous to hear the extremely constructive interventions from the noble Lords, Lord Mair and Lord Patel.

There have been a lot of reports about catapults. They began, of course, with that excellent report from Hermann Hauser, which was commissioned by the noble Lord, Lord Mandelson, towards the end of his time as Secretary of State. At the same time, my party, while in opposition, commissioned James Dyson to produce a report on this. It was a very happy coincidence that both Hermann Hauser and James Dyson proposed that Britain should have something modelled on the Fraunhofer institutes. As we often debate in this Chamber the frustrations and difficulties of getting cross-party consensus and long-term planning, I think the fact that this idea emerged from two parallel exercises from two different political parties has helped to make them a long-term feature of the environment. I occasionally used to tease my colleague and friend Sir Vince Cable that he represented the only party which had not advocated the creation of catapults in its manifesto.

We have had many reviews of catapults since. To be honest, I think we have had rather too many reviews, some of which have not been particularly constructive and have been a distraction. But this report—we have heard the emphasis already on the fact that it is not a review—stands out. It is well informed and crisp, and it has some practical, actionable proposals which it has put to the Government. Of course, we all look forward to the response from the Minister, but I think it is true to say that, already, in the period since the official government response to the committee’s report, there has been more activity that has led to the implementation of more of the proposals—especially because we now have the framework of the three-year comprehensive spending review and a longer-term and increasing budget for Innovate UK.

I would like to make a few quick reflections on the roles of catapults and how they can fulfil them. In many ways, they are to be seen as an intermediate body between universities and business. Of course, we all want to see universities and businesses dealing direct; that is excellent and needs to be promoted. However, at the same time, the analysis was that there are some kinds of TRLs—technology readiness levels—in the middle that are not the focus of attention for university research and are not yet suitable for full-blown commercial investment. That is where catapults have a really important role to play.

I still see them as torn between these two gravitational forces: on the one hand is the university academic agenda, and on the other are the requirements and needs of business. If I may draw on my new role as chair of the UK Space Agency, I hope they occupy a kind of Lagrangian point, happily balanced between these two different gravitational forces. If I were to hazard a guess, my assessment at the moment is that, if anything, the gravitational pull from business is proving rather stronger and the engagement from universities rather weaker. There are risks in that.

Catapults must find the best way of showing that they are delivering private spend by joining up with quite close-to-market projects that business is willing to finance and moving to that end of the technology readiness scale, while also thinking of more upstream activities and closer links to universities. I very much welcome the proposals in this report about getting catapults to work more closely with universities. They are not supposed to be simply recipients of contract funding for applied research which business wishes to see happen anyway; they are more at that midpoint, and we should always bear that in mind.

They went out of fashion for a few years—I never quite understood why—but they are certainly back and I think they are receiving strong support from the Government now, which I am sure is influenced partly by this excellent report. One thing that was striking during the period when they were out of favour was that an opportunity was missed to use catapults as a template whenever a new applied research institute was being created. One of the reasons for the catapult model was that too much time and effort was being expended on getting elaborate teams of lawyers to write tailor-made articles of association and deciding whether a new entity would be in the public or private sector and whether it would be a charitable body or a limited company with a public purpose. Instead, I saw the catapult model as an easily accessible template that made that whole process simpler. For example, I think the Faraday Institute, which is an excellent body, would have been up and running a year earlier if it had been simply a batteries catapult. I hope the Minister will agree that catapults are a useful template for getting on with something when we have clearly reached the stage where some mix of public and private funding is required to move a technology forward. It should be the standard template that is always available and used in those circumstances.

I very much welcome the stress the noble Lord, Lord Mair, placed on catapults as a kind of strategic opportunity. Again, in the past year we have seen the Government recognising them in that light. I had at the back of my mind the hope that, eventually, in a neat and tidy world—the world is not like that—all of the eight great technologies that we identified would have some kind of catapult support to help bring them forward. That applies now to the seven technology families identified in the Government’s innovation strategy. It is not a neat and tidy alignment, but it would be welcome if the Minister could say that, as the Government look to how they can implement their commitment in the strategy to those seven technology families, they will check to see whether, within each family, there are particular technologies or groups of technologies for which a catapult could really help deliver the Government’s ambitions.

Finally, I want to add an angle that I do not think has been touched on so far. As we look to how this country can deliver the ambitions for 2.4% of GDP being spent on R&D—let us hope it will go beyond that—there is one constraint which I fear will be the biggest single one, because I think there is now political will and a commitment to do it. The biggest single constraint is the skilled people needed to do it: the scientists and researchers, but also the technicians and technologists who will either ensure that kit works or, even better, help create new kit in that endless, exciting interaction between science and technology that brings both human progress and economic advance. Here, there is an opportunity for catapults to do far more than they do at the moment in technical training and to overtrain, training more people than may be needed for the specific operation of the catapult. If they are seen as a resource which can train more technicians to go out into industry or indeed other research institutes and universities, with proper expertise and vocational or university qualifications, that would be an extra useful role that is very relevant to the Government’s vocational and technical training agenda.

I very much welcome this excellent report, which provides a set of practical policy proposals that can be acted on, and I look forward to the Minister’s response.

Advanced Research and Invention Agency Bill

Lord Willetts Excerpts
Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
- Hansard - - - Excerpts

My Lords, in the absence of my noble friend Lord Stansgate, I should say a couple of words about his amendments. We tackled the issue of climate in some depth when we met last week; I thought that it was a useful discussion. On the name, I think that he was trying to get at why the change had been proposed. Perhaps the Minister, when he responds, can talk us through the Government’s thinking. I do not think that it amounts to a hill of beans, but it was something that my noble friend wanted to explore, to find out what was behind the change of thinking.

Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, I will be brief and will refer particularly to Amendment 26A. I repeat that I am a member of the board of UKRI and so have a particular interest in this. The more the Minister can say about ARIA alongside UKRI, the better—it would be very helpful. I do not mind if there is overlap; I am not a purist on this. Indeed, some overlap may be an inevitable result of having ARIA and UKRI. In fact, I would prefer overlap to the alternatives, which are either that UKRI is seen to be unable to do high-risk, high-reward research or that it is somehow seen as second best to ARIA. I hope that the Minister will assure us that UKRI will be able to carry on doing the wide range of activities that it does—including through Innovate UK, in particular—with the application and successful commercialisation of technologies. I see ARIA as supplementing that rather than displacing it, so anything that the Minister can say about that relationship here or in answer to subsequent amendments would be very helpful.

Lord Broers Portrait Lord Broers (CB)
- Hansard - - - Excerpts

My Lords, my hope for ARIA was that it would look a bit like ARPA. ARPA is not a blue-sky, high-risk research operation; it is a project agency that takes challenges and builds systems to meet them. I think that this is essentially very different. It is not an invention agency and that is the reason behind this consideration. Whether it matters what the name is, I am not sure. ARIA has a nice sort of ring to it. After all, to call it ARPA would mean that we are copying the Americans, which is probably insufferable.

Advanced Research and Invention Agency Bill

Lord Willetts Excerpts
Baroness Brown of Cambridge Portrait Baroness Brown of Cambridge (CB)
- Hansard - - - Excerpts

My Lords, I rise to support Amendment 1 and the amendments in this group that are about giving a purpose to ARIA associated with climate change and the environment. I declare my interests as a non-executive director of Frontier IP and the chair of BGF’s Clean Growth Advisory Board.

As the noble Lord, Lord Lansley, has indicated, ARIA’s success or failure will depend, crucially, on recruiting outstanding programme managers. These people will need to be interpreters and matchmakers well networked in industry and academia, with an excellent understanding of science and technology, strong lateral thinking skills—many of the things the noble Lord has already mentioned. They will also need to be tough risk-takers, but not gamblers. They will be hard to find, yet finding the right people is going to be critical to this success. Finding them will be the first constraint. Inevitably, they will have specific areas of expertise.

With a limited initial budget, focusing ARIA, at least initially, on the critical challenge of climate change and the environment will be a great way both to help address our greatest challenge and to support the UK economy. But it will also provide a valuable focus for the recruitment of these key individuals—the people who initially occupy these absolutely fundamental posts.

Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

I would like briefly to intervene on this important group of amendments and should declare an interest as a member of the board of UKRI, which is very relevant to the issues we are currently considering. I am not acting as a spokesman on behalf of UKRI, but drawing on the experience that we have had there.

I welcome any attempt to bring greater diversity and innovation to our funding landscape. We do not want a monolith; we want lots of different ways of getting funding and lots of different requirements. Anything that adds to the diversity of the funding landscape I welcome as a good thing. However, I have two or three questions on which I hope that the Minister will be able to give some assurance.

First, the task of ARIA is often described as high-risk, high-reward research. In a way, Clause 3, to which my noble friend Lord Lansley, has referred, is an attempt at setting out in legal prose “high risk, high return”. It is great that ARIA will have that as its objective, but my one concern when I hear this language is the implication that all other public funding for R&D could not be high risk and high return and that it is in some sort of boring bureaucratic pot where everything is safety first and low return. I would be grateful for the Minister’s assurance that it is also perfectly possible for the agencies of UKRI and indeed other sources of public funding for R&D also to engage in high-risk, high-return research. It would place too much weight on ARIA’s shoulders and eliminate diversity if we said that it is the only agency that can act in that way. Having that authoritative assurance from the Government would be of great value in ensuring that our whole research ecosystem carries on performing in an innovative way.

Secondly, I want to reflect on the lessons that can be learned from the Industrial Strategy Challenge Fund, to which my noble friend has also referred, and seek another assurance from the Minister. When Theresa May’s Government put substantial funding—over £2 billion—into the Industrial Strategy Challenge Fund, Innovate UK, the main agency for delivering that programme, travelled to America to look at what ARPA did. It said, “These programme directors at ARPA are fantastic—we should have the ARPA model of programme directors in order to deliver the Government’s Industrial Strategy Challenge Fund”.

I can remember the debate that took place. The Treasury said “Hang on, how much are these programme directors going to be paid? They can’t possibly be paid more than is set by our pay rules”—the pay limit was, I think, £100,000. The Treasury then also said, “We need a committee to scrutinise that the money is being well spent and, to ensure it is making progress, a monthly report would be about right”. Then BEIS, which I do not think completely trusted the Treasury and saw this as a BEIS operation, said, “BEIS also needs to have a committee that meets to scrutinise the success of this programme director; we have slightly different criteria from the Treasury, so our committee should meet once a month”. It averaged out—at the start; it may have got better—that every fortnight there was some supervisory committee or other checking that this programme director was delivering the objectives.

That is the slow, painful process of bureaucratic accretion. It is marvellous that ARIA is, we are assured, going to be free of all that. It would be quite good, however, if other parts of research funding could also be free of those constraints. Indeed, the Government have several reviews on at the moment that are relevant to this, including the Tickell review of bureaucracy and a new grant review of UKRI.

I also hope that the Minister can assure us that, wherever possible, especially if these proposals emerge from two reviews set up by the Government, freedoms being extended to ARIA will also be enjoyed by agencies working under UKRI or other departmental bodies. The problem of bureaucracy must be solved across the whole swathe of R&D funding, not just by creating one institution outside the constraints that everyone else has to work under. I would like an assurance that lessons are being learned, both for the functioning of ARIA and from these two reviews now under way.

Thirdly and finally, we can already sense—not least from the opening presentation from the noble Lord, Lord Ravensdale, on the purpose of ARIA—a fascinating debate about missions versus technologies. I have frequently had that debate with my friend Professor Mariana Mazzucato, who has brought the language of missions into public policy, which is excellent. However, I always say to her that the Kennedy moonshot did not arise because a bunch of PPE-ists—speaking as one myself—sat around saying, “Wouldn’t it be wonderful if we sent someone to the moon? That would really get the media’s attention; let’s do that, Mr President”, but because of prior investment in general-purpose technologies, including rockets. It was a deep understanding of what the technologies might be capable of that led to the formulation of the mission.

One can resolve this by wordplay, by making “backing technologies” one of the missions, but the point made earlier about preventing and creating technological surprise tells us that, really, DARPA was always envisaged as driving American leadership in technology. We have the opportunity to choose missions only because of prior investment in underlying science and technology, which turns those missions from empty fantasies into deliverable objectives.

I very much hope we will have an assurance from the Minister during the course of our scrutiny today that ARIA will strike a happy balance. It should be able to fund general-purpose technologies without knowing exactly how they will prove useful, while suspecting that something of that power and significance will have use. It may also wish to fund specific missions or challenges, but it would be a strategic mistake to put all its eggs in one basket. It is the interaction of technological investment capabilities with missions and challenges that really drives innovation. I very much hope that ARIA will pursue both approaches.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
- Hansard - - - Excerpts

My Lords, I apologise for not taking part at Second Reading; I was at the COP 26 climate talks, which are of obvious relevance to this group in particular.

I begin by reflecting on the model for ARIA—DARPA, which was of course military. We have talked a lot about risk-taking, which is usually interpreted as the risk of failure to achieve your objectives. When we think about the origins of this—the child very often showing some characteristics of its parent—we can also think about the risks attached to achieving your outcomes but causing unintended effects. With DARPA, there was Agent Orange in the Vietnam War and the drone warfare of the Gulf War, and it is now working on killer drones and robot warriors.

Looking at the model of DARPA, researcher Annie Jacobsen, author of The Pentagons Brain: An Uncensored History of DARPA, talked about how it very much became embedded in what has been described, including by US Presidents, as the military-industrial complex. Giving a mission is very important, in order to avoid institutional capture. That is one of the reasons why I speak in favour of Amendments 1, 21 and 26. We have not yet had the chance to hear from the noble Baroness, Lady Chapman, but I think her Amendment 21 is in a sense similar to Amendments 1 and 26, except that it provides a more regular review mechanism.

If we think about what ARIA is for and look at some of the proposals put forward, we see that the CBI described it as

“an international lynchpin for business investment”

that is to “ultimately deliver new products”. McKernan said that it was

“a public sector, new technology seed fund”

whereas, by contrast, the Russell Group described it as

“multidisciplinary research teams with the capacity to take a holistic approach”.

That brings us to the debate that the noble Lord, Lord Willetts, was just addressing, which was also raised by the noble Lord, Lord Lansley—and why I would express opposition to his Amendment 25. There is a danger in focusing on technology rather than on mission. We want to focus on mission and on the problems that we need to solve—and Amendment 1 very much focuses on the great problem that we need to solve. Discussion thus far has focused very much on the climate emergency, but it also talks about a “sustainable … society”.

Science Research Funding in Universities (Science and Technology Committee Report)

Lord Willetts Excerpts
Wednesday 9th September 2020

(3 years, 9 months ago)

Grand Committee
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, I am delighted to have the opportunity to contribute to this debate. I begin by declaring my interests, particularly as the chancellor of the University of Leicester, a visiting professor at King’s College, London, and a member of the board of UKRI. It really is an excellent report and I congratulate the noble Lord, Lord Patel, and the other members of the committee on it. Of course, this report appears already to have had an influence. When it was written, there was unhappiness that QR funding had not been increased; it has now been increased by almost £100 million. We have also had an excellent R&D road map, produced by my successor as Science Minister, Minister Solloway, which has been widely recognised as an important document identifying all the key issues facing our research system.

I would like to put three points to the Minister. First, there is an assumption in the widely used language of “top”, “leading” or “best” universities—the ones which tend to get the articles in the prestigious journals and score most highly on the REF—that they are the be-all and end-all of excellent research. We can be very proud of those universities, but if we are to get to 2.4% of GDP going on R&D and apply it, as several Members of the Committee have already said, we need a range of types of research and a range of types of institution. That includes the training of technicians—people who are expert in maintaining and innovating in the equipment that researchers use. It would therefore be a mistake to think that we can get anywhere near 2.4% if our research activities are concentrated in a small number of elite universities. The system as a whole needs to be healthy and well funded, with universities coming in many different shapes and sizes.

Secondly, I welcome the statements from the Government and No.10 about the importance of continuing to attract international talent. I fear that we have reached the point where the costs of our visas and, even more, the immigrant health surcharge will be a major barrier. Perhaps I can give just one example. A postdoc researcher with three dependants coming to work in the UK for three years would, given the proposed increase in the immigration health surcharge per person and their visa costs, over those three years face a total bill of approximately £9,900. A typical postdoc researcher might be earning £34,000, so 10% of his or her gross income would go on paying for visas and the NHS surcharge. This is therefore a barrier to the very job mobility and attraction of workers from overseas which the Government rightly call for.

Thirdly and finally, where do we go on our ODA spending? There is a lively debate about this but, even without any change to the 0.7% target, if GDP falls that 0.7% will be a percentage of a smaller sum. There must inevitably be a debate on priorities. One of my frustrations in my time was that the DfID culture was very much to focus on the poorest people in the poorest countries. That is admirable, but it cannot be the full story of ODA expenditure. I was very aware of the resentment among low to middle-income countries, such as South Africa and India, which no longer passed the DfID test as being the poorest countries and therefore faced the loss of any ODA funding. Along with the then Foreign Secretary, I was able to go to those countries and say, “You may no longer be getting DfID money, but we are now offering you a partnership in research and development”. I hope that offer will be retained and very much hope that the Minister will be able to acknowledge these points in his wind-up.

Industrial Strategy

Lord Willetts Excerpts
Monday 8th January 2018

(6 years, 5 months ago)

Lords Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, I declare the interests that appear in my entry in the register of this House. I refer particularly to my role on the board of UKRI, which allocates research and innovation funding.

It has been an excellent debate on industrial strategy, opened effectively by the Minister. One reason it has been such a good debate is that the White Paper we are debating is a substantial and comprehensive document which has had, broadly, a welcome from all sides of the House. Some omissions have been identified. The noble Baroness, Lady Coussins, made a good point about foreign languages and, more widely, education, a key British export service industry of the 21st century, is underplayed in the White Paper. Of course there are challenges to come, most notably delivering on the great ambitions in the White Paper. As we heard in several powerful interventions, that must involve genuinely cross-government working; it cannot simply be the responsibility of one department.

Perhaps I may briefly challenge some of the assumptions behind one of the most widely repeated assertions during this debate, coming from that fountainhead of constitutional knowledge, the noble Lord, Lord Hennessy, which is that we have had eight, nine or 10 industrial strategies. Behind that is a set of assumptions: we cannot do it in Britain, we are always chopping and changing, and nothing lasts. If we are to make the case for an industrial strategy, the assumption that since the war Britain has been incapable of pursuing an industrial strategy is really rather an important challenge. If eight or nine White Papers have come and gone without making any difference whatever, one is entitled to ask why it should be different this time. My view, however, is that the reference to eight, nine or 10 White Papers is not accurate. I do not know how many White Papers there have been on pensions policy or transport. Especially from the 1980s onwards, it seems pretty clear that in key industrial sectors Britain has had sustained industrial strategies that have delivered conspicuous results. I should like to give three or four examples.

The first example is that of the automotive industry. We saw the virtual collapse of the British automotive industry and, after years of trying to protect it, the disappearance of our indigenous, domestically owned automotive industry. In the early 1980s we embarked on a strategy to recreate an automotive industry in the UK. It involved a deliberate attempt to attract overseas investment, beginning with Japan and shifting to the US and then India. It involved exploiting the advantages provided by that great Thatcherite project, the single market, to promote manufacturing in the UK as part of Europe-wide supply chains. It involved the systematic use of financial incentives to attract overseas manufacturing facilities here. It also involved integrated skills training. All those assertions that we have no vocational or technical skills rest on another misunderstanding. We have a large amount of technical and vocational training, and a lot of it happens in universities. The Universities of Sunderland and Teesside are dedicated to training automotive engineers to work in the local Japanese car plants, just as not only Warwick University but also the Universities of Coventry and Hertfordshire are training automotive engineers to work in the Midlands engineering industry. As a result of that policy, sustained by successive Governments of different political persuasions, we have seen in 20 to 30 years Britain develop a very successful and large-scale automotive industry. This was the result of a sustained industrial strategy.

My second example is that of the life sciences. The UK has great strengths in the life sciences, although of course there are challenges. We have seen a combination of sustained funding from the Medical Research Council allied with enlightened policies from the leading medical charities. We have had smart policies specifically targeting investment in medical technologies where our American competitors are at a disadvantage. Because of the power of the evangelical Christian movement in the US, there are considerable constraints on public funding for research in cell therapies. Therefore we have put money particularly into cell therapies, where we have a comparative advantage as the result of a crass US regime. We were the leaders in discovering genetic sequencing technologies and we successfully ensured that the sequencing of the human genome became public property and is not something that can be commercialised exclusively by US entities. As a result we have two very large pharmaceutical companies and a dynamic life sciences sector. There certainly are problems in getting the NHS to adopt innovation and purchase from our innovative companies, but I would nevertheless regard UK medical research and life sciences as the second example of a successful industrial strategy.

My third example is mobile phones. The rise of Vodafone as Europe’s leading mobile phone operator would not have been possible without a smart, carefully considered industrial strategy, notably through the EU writing regulations for mobile phone telephony that favoured the UK company Vodafone, which was not obvious in the early 1980s. It required sustained engagement in international standard-setting bodies, and then using European standards to access a global market, combined with a very enlightened regime from Ofcom. When we look at what gives us a comparative advantage in our industrial strategy today, a trusted, effective and nimble regulator is one of the best advantages we have. Moreover, the UK is fortunate in having several such regulators, which is why the ambitions in the White Paper for the UK to play a leading role in 5G and the internet of things are not absurd if Ofcom is as skilled in writing the regulations for those technologies as it was in writing the regulations for mobile phones.

Finally, the most conspicuous example, though we may all now be ambivalent about it, is the sustained support for the financial services industry—a deliberate decision that this was an area where we had a comparative advantage that we would invest in, where the regulations would favour it and the standard setting in Europe would be influenced heavily by us so as to favour it. Even the physical infrastructure—the extension of the Jubilee line to Canary Wharf—was done to favour this key sector.

So we should not go around saying that Britain cannot do industrial strategy, that we have never done industrial strategy and that it is always chopping and changing. Those are four examples of sustained, successful industrial strategy. We can do it. We have done it partly because the strategies were sustained across Governments of different persuasions. We have had powerful interventions in this House from a Labour former Secretary of State and from a Conservative former Secretary of State—two people who undoubtedly drove industrial strategy. It was a privilege for me to work alongside a Liberal Democrat Secretary of State. These policies have been sustained and delivered. We should not beat up on the British political system as being incapable of doing this. It is perfectly capable of doing it, but you have to look behind the flow of White Papers to observe sustained, coherent understanding of what you need to promote a technology or a sector.

There are challenges for the future. Although we have this extraordinary achievement of raising the growth rate of a mature industrial economy between about 1980 and the financial crash—a 25 to 30-year project in which all three political parties played a role—we now have challenges at both the top and the bottom ends. At the top end we need to do more to extract value from our high-quality research base. Again, we have had several references to the quality of this research and the golden triangle of Oxford, Cambridge and London. The golden triangle is not some happy accident or some bit of historical chance we happen to have. We have a golden triangle that is rivalled only by the US west and east coasts because of sustained public policy: the way research assessment exercises have been conducted to drive improvements in research performance, the way our research councils allocate funding, and the planning regime. This is not an accident; this is partly the consequence of sustained policies on a cross-party basis.

However, we need to do more and better. We have too many small companies emerging from universities too soon, often either vulnerable and insufficiently funded to survive or sold far too early to the US. That is certainly a British problem. Some of it is to do with our public funding having tended to be for upstream research and there not having been sufficient funding for the application of this research in big general-purpose technologies. That is an area where the industrial strategy White Paper signals that there will be significantly more effort, but we have Innovate UK, previously the TSB—an entity created by the previous Labour Government—which has now functioned for more than a decade and is plugging that gap very successfully. Of course, in the White Paper, although I do not believe it has been much referred to, there is this extraordinary commitment to move to 2.4% of GDP going into R&D and, beyond that, 3%, which would be transformational. Very large amounts and very large increases in public funding are already being delivered.

That is the challenge of the top end. The challenge at the bottom end is the underperforming tail that several noble Lords have referred to. Too many of our businesses underperform. Again, there is increasing evidence of what the problem is: managers who are insufficiently trained and educated to run a business successfully; hereditary companies, where owner-managers from a second or third generation tend to be associated with very low levels of productivity; and a set of rules on infrastructure investment that rewards places that already have economic activity and do enormous damage to places that do not. So there is a model of cost-benefit analysis that says that if you already have it there will be high returns for more infrastructure investment. That is at last being changed with amendments to the Treasury rules, so that we can take a strategic view of places that need infrastructure investment, even if they currently have low levels of economic activity.

Of course there are challenges, which the White Paper tries to address, but it would be a mistake for us to think that these are challenges that will defeat us because they have defeated British Governments in the past. We should take rather more pride in our historic achievements over the past 30 years than has been in evidence so far in the debate.

Higher Education and Research Bill

Lord Willetts Excerpts
Baroness Brown of Cambridge Portrait Baroness Brown of Cambridge
- Hansard - - - Excerpts

I rise to speak to Amendments 490C and 490D, which are tabled in my name and that of my noble friend Lord Krebs, and Amendments 495A and 495B, which are tabled in my name and those of my noble friends Lord Mair and Lord Broers. These amendments concern the roles and responsibilities of the science and humanities research councils.

Amendments 490C and 490D would ensure that the science and humanities research councils are able to exercise the functions of UKRI in their fields without any additional constraint from UKRI, which is important for the autonomy of the research councils. Clause 89(1) currently restricts them exercising those functions of UKRI in such fields of activity “as UKRI may determine”. Amendment 490D simply removes the implied additional level of control by leaving out “as UKRI may determine”. This helps to strengthen the autonomy of the research councils in the new UKRI structure which noble Lords, including my noble friends Lady Finlay, Lord Patel, Lord Kakkar and Lord Rees, and the noble Lord, Lord Darzi, spoke so passionately about at Second Reading.

Amendment 495A echoes the concerns that we have just been hearing about and reflects the focus of a number of amendments in this group that I strongly support. The research councils in Clause 89 are very focused on contributing to economic growth and quality of life, both of which are clearly very important. However, as we have heard from the noble Lords, Lord Willis and Lord Judd, and my noble friend Lord Cameron, basic or pure research, whatever you like to call it, whether in sciences or humanities, is the pursuit of new knowledge for its own sake and as a contribution to scholarship, knowledge and understanding more widely without a current economic purpose. That is critical for a healthy research base.

Amendment 495B, which is tabled in my name and those of my noble friends Lord Mair and Lord Broers is to help ensure that Innovate UK’s business-facing function remains clear and distinct from those of the humanities research councils. In Clause 90, Innovate UK is specifically prohibited from doing the research councils’ role of carrying out research, which seems appropriate. This amendment would prevent the research councils duplicating Innovate UK’s functions so that those important functions remain clearly business-led.

Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, I shall briefly speak to some of these amendments. I think the Government, perhaps through infelicitous drafting, are creating unnecessary anxieties, given the way that these clauses are currently formulated. I particularly welcome two of the amendments. First, Amendment 484AB tackles a rather peculiar feature of Clause 87, which may well be due to the way in which the parliamentary drafting developed. The phrase,

“research into science, technology, humanities and new ideas”,

is not the way in which the science and research community would list its activities. It is regrettable that social science is not specially identified in that list. We are all familiar with the term “arts and humanities”. Many of us are lay people, but we nevertheless understand the distinction between life sciences and physical sciences. This is a rather peculiar way of formulating it. I suspect a parliamentary draftsman said, “Well, social sciences are a science, so they must be covered by ‘science’. We don’t need to say ‘social sciences’ as well”. I suspect that that is the conversation that happened. We have ended up with something that, for people in this community, looks a rather peculiar list. It would be better if it were closer to the way in which we think of the range of research activities carried out in the UK.

Secondly, Clause 89(4) currently lists,

“contributing to economic growth … and … improving quality of life”.

Again, that seems to promote unnecessary anxieties. It has not been my experience that any science Minister from any political party represented in this Chamber believes that there is no value in pure research. I do not think that people sit around saying, “All we’re interested in is the immediate consequences for economic growth”. There is a great story about Margaret Thatcher, when she was Prime Minister, receiving a brief advising her not to invest in the large hadron collider because it does not have any useful economic effect. She scribbled on the brief, “But it’s very interesting, isn’t it?”, and the public funding went ahead. That is the approach that I hope all of us take to science funding. I do not believe it will be any different under this new structure. However, it would tackle a concern if the Bill were explicit that, alongside the promotion of economic growth and the quality of life, we also believe in simply extending knowledge and research in this country.

There may be other areas. I listened with great interest to what the noble Baroness, Lady Brown, said, about what can also be improved on. These are unnecessarily narrow formulations that do not adequately capture what the Government intend with the new structure. As we have heard the Minister’s willingness to reflect, I hope that this is an area where he reflects with particular energy and concentration.

Lord Broers Portrait Lord Broers
- Hansard - - - Excerpts

My Lords, I support what the noble Lord, Lord Willetts, said. I have my name on Amendment 495B, to which my noble friend Lady Brown of Cambridge has spoken so excellently. In trying to distinguish what Innovate UK and the research councils do, Clause 90 states:

“arrangements may not be made under this section for the exercise by Innovate UK of UKRI’s function mentioned in section 87(1)(a)”.

When you look at Section 87(1)(a), you will find it states:

“carry out research into science, technology, humanities and new ideas”.

Innovate UK spends 20% or 30% of its resource, I believe, on research that underpins the product programmes it is supporting, which is only appropriate. In Amendments 484A and 484B, which are in this group, the noble and learned Lord, Lord Mackay, suggests adding “basic, applied and strategic” before “research”, which really steps into Innovate UK’s territory. There is no specific amendment on this—I just point out to the Minister that there is concern about the wording. It is misleading if you take it just as it reads.

Higher Education and Research Bill

Lord Willetts Excerpts
Lord Willetts Portrait Lord Willetts (Con)
- Hansard - -

My Lords, in commenting briefly on this clause I draw attention to the fact that I am currently trying to set up a venture capital fund. It does not yet exist, but it might do.

Several noble Lords have gone through the thought process to which my noble friend Lord Selborne has just referred. The decision that Innovate UK should be part of the overall UKRI, which is not clear in the original Nurse review, we now accept and recognise.

There are two points on which it would be helpful to hear more from the Minister. If this involves one of the letters for which this Committee has become famous, so be it. It would be helpful to know how many of the Secretary of State’s powers—which are, as the Minister rightly said, explicit in the Bill as part of the usual Treasury controls—will, in practice, be delegated to Innovate UK. Although it is clear that in theory there is a great deal that Innovate UK can do only with the consent of the Secretary of State, it was not my experience as a Minister that I or Sir Vince Cable were endlessly getting petitions to do specific things. Organisations operated within a range of delegated authorities so that they could get on with doing things. It would be helpful if the Minister could indicate the kind of flexibility that he envisages Innovate UK would have within the UKRI regime.

Secondly, in the Bill as currently drafted there is a hint of old-think pre-industrial strategy. I wonder what would have happened if the chronology had been the other way round and we had had last week’s excellent consultation document on industrial strategy and then the legislation. Some of these constraints are hard to reconcile with the ideas in the industrial strategy. Again, if the Minister can show how this model will enable Ministers to deliver what they are talking about in the industrial strategy, it would be very helpful.

Lord Mendelsohn Portrait Lord Mendelsohn
- Hansard - - - Excerpts

My Lords, I shall speak to our amendments. The noble Baroness, Lady Garden, has made a very good case. The long and the short of how we see this is that we do not think it was a very good idea in the first place and time has passed on. Many of the comments that have been made will find an echo in our thoughts.

It is worth returning to the original Nurse review. The report states:

“In relation to Innovate UK, as stated earlier, the current delivery landscape is too complex and there should be a smoother pathway to more applied research. Integrating Innovate UK into the Research UK structure alongside the Research Councils could help such issues to be addressed However, Innovate UK has a different customer base as well as differences in delivery mechanisms, which Government needs to bear in mind in considering such an approach and which this review, according to its remit, has not looked at in depth”.


The noble Baroness, Lady Garden, made exactly that point: what evaluations were made when it went in?

I would suggest that both its target audience and the mechanisms that Innovate UK uses are so dramatically different that it is unlikely to be able to perform such an effective function within the context of UKRI. I think that it would be a terrible misfortune if Innovate UK, which has proved itself over some years to be a very effective body doing great things, were to come into UKRI with its current framework. That would not just be restrictive but could possibly be quite damaging for an institution that is following a good path.

I also think that this is a policy that was designed for a pre-Brexit world. In a post-Brexit world—which we are not in at the moment—we know that we are going to have to rely on research an awful lot more, and a great deal will be required of it. I cannot imagine that in such a situation we would ever put one of our most significant levers into this sort of environment; we would leave it to work independently. With the industrial strategy having now been published, it is absolutely clear that there is a massive hole in the delivery of its research objectives that would have been filled by Innovate UK. That is a mistake that the Government would be wise to take note of.

By the way, it is important to understand that Nurse himself recommended:

“At the very least, the Chief Executives of HEFCE and Innovate UK should be represented, on the Executive Committee of Research UK”,


or UKRI. And that was probably a very measured judgment.

My final very brief point is in relation to what it is necessary to do to make the best of our university sector and to be able to commercialise at both ends of the spectrum via big company investments and tracking what research is being done as well as smaller companies emerging as the result of venture capital. An awful lot is going on in this area. Recently I spent time with some of the companies at Cambridge Enterprise Limited. Innovate UK is not the only solution that is required, and I think that it would be a colossal mistake to expect UKRI to perform that role and to forget the other things we may need to do. To restrict UKRI in that situation has the potential to do great harm to the long-term needs of our country, especially in an environment where we need an effective industrial strategy.

--- Later in debate ---
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab)
- Hansard - - - Excerpts

My Lords, this continues on the theme of uncertainties. I think that I can deal with the issue fairly quickly; at least that is my aspiration in moving the amendment. The starting point for this brief debate is Clause 86, which lists the seven current research councils and then adds Innovate UK and Research England. The intriguing statement is:

“The Secretary of State may by regulations amend”,


that list so as to,

“add or omit a Council, or … change the name of a Council … But the regulations may not omit, or change the name of, Innovate UK or Research England”.

Inevitably, the question that arises is: why is that? This is not in any sense an attempt to set in concrete the existing structures. These councils have come and gone and changed their names with dazzling frequency and I do not think that what we have before us, the seven currently dealing with the range of research that they do, will last for very long. But it is important to have an explanation from the Minister, perhaps by letter if he so chooses, of what consultation might be undertaken before the councils are changed—because there is a bit of a worry about the uncertainty.

Lord Willetts Portrait Lord Willetts
- Hansard - -

The noble Lord has just made an assertion which I do not think is quite correct. After the research councils were created in 1965 by the Wilson Government, if someone who had participated in those debates at the time were to look at this list of research councils, they would indeed observe changes. However, it is not the case that they change frequently: rather, they have changed very slowly over time. For example, the Economic and Social Research Council was created in the 1980s and the Science and Technology Facilities Council more recently. But the noble Lord should recognise that there is some quite deep continuity here, which is important if we want to ensure that they remain stable entities in the new dispensation.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
- Hansard - - - Excerpts

That is a very kind intervention because I no longer need to give the second half of my speech, in which I would have stated that the names of the councils are only one aspect; the worry is that the work might change. That was the point I was seeking to make. I beg to move.

--- Later in debate ---
Lord Willetts Portrait Lord Willetts
- Hansard - -

My Lords, I recall receiving the letter about the James Hutton Institute, but after so many Members of the House have spoken so eloquently about that case, I would like to make a wider point about the clause. There is a long-standing problem that the Minister will wrestle with of departmental R&D budgets being cut back and attempts always to put on to the science budget policies and budgetary responsibilities that should lie with individual departments. I am sure that that is the back-drop to this case. But with the new UKRI, there is an opportunity to look more widely at the kind of research institutes that are funded out of public money and on what terms.

We have heard examples this evening of the dual funding structure, on which we pride ourselves. However, the dual funding regime actually has some significant omissions, because it is research council funding for research institutes belonging to the councils and specific projects, and, secondly, a funding stream for universities. Those that miss out are research bodies that are not part of universities, and quite possibly not even part of the conventional public sector, that particularly need capital funding. Agencies such as the Welding Institute, now called TWI, or NIAB, the National Institute of Agricultural Botany, are charitable bodies that may get individual funding from a research council for a specific project, but they have not historically been able to receive significant capital support for growing their facilities. These are the kinds of issues that UKRI will wrestle with.

It would be helpful if the Minister could say that as UKRI is set up with its new scope, it will be within its power to look at these sorts of issues. It may find excellent research institutes for which, because of the size of its capital budget, UKRI can provide some kind of capital investment in a way that does not fall neatly in the dual funding arrangements that came before. That is a good example of what one might hope will be extra flexibility in the new arrangements, just as we have heard from the Bench opposite about the need for flexibility in another way.

Lord Prior of Brampton Portrait Lord Prior of Brampton
- Hansard - - - Excerpts

My Lords, I have to start with the confession that the James Hutton Institute is just a name to me. I confess my appalling ignorance on this subject. I need to research it. If I could, I will investigate the particular circumstance relating to the James Hutton Institute and then write to the noble Lord. I hope that that will be acceptable to him. I am sure it is a world-leading institution but, as I said, I have not visited and am not familiar with it.