Higher Education and Research Bill

Debate between Lord Willetts and Lord Mendelsohn

Committee: 7th sitting (Hansard - continued): House of Lords
Monday 30th January 2017 Lords Chamber

[Lord Willetts (Con)]

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]

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.