Treasury Support for UK Science

Angela Smith Excerpts

Wednesday 4th November 2015 Westminster Hall

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I beg to move,

That this House has considered the role of the Treasury in supporting UK science.

First of all, let me say that it is a real pleasure to serve under your chairmanship, Mr McCabe.

I start my speech today with the simple assertion that science is a critical part of our everyday lives. It is important not only because it explains the world we live in—the world we see, hear and feel every day, which we all take for granted—but because it also makes the world of tomorrow. It shapes the future in a way that fascinates most people, and it does so with breathtaking speed. Who knows what will be possible in the future? Without science, our world would be a very different place and many of the things that we take for granted would not exist. We live longer, thanks to science; we live better lives, thanks to science; and we live broader and more expansive lives, thanks to science.

The UK, for its part, has always punched above its weight in science and innovation. Our laboratories, universities, research councils and innovation bodies are world-leading. To exemplify this point, I will refer to the startling statistic that although the UK’s population equates to just 0.9% of the global population, we account for 15.9% of the world’s most highly cited scientific research articles; since the start of the 20th century we have had 78 Nobel prize-winners, 12 of them since 2004.

We are first in the world for the impact of our science. We have built a strong record of converting science-driven discovery into economic gain, with the UK now ranked second in the world for innovation, and for every £1 invested in public research and development, there is a boost of between 20p and 30p per annum in perpetuity. The UK knowledge economy sustains a third of our businesses, with wage rates 40% higher than the average wage in the field. To be fair to previous Governments, investment in science and innovation has delivered impact in many of the areas identified as priorities, such as promoting innovation, growth and—very importantly—improvement in public services.

Maintaining our leading position in science is increasingly difficult, though, thanks to an increasingly competitive global marketplace. With countries such as India, China, and South Korea increasingly competing in the technology stakes, it is becoming clear that we need not only to maintain our research base, but to grow it. To do that, we need a commitment from Government to invest in science. It is time to take stock, to remind ourselves just how important science is to our economy, and to assess how seriously we may be damaged if we fail to support our scientific research base with adequate public funding. In my view, the most persuasive way of making the case for the importance of science to the economy is to seek a simple answer to a simple question—what has science ever done for us?

For a start, let us look at one of the major contributions made by my home city, Sheffield, which of course is where stainless steel was invented, just over a hundred years ago. Stainless steel is a technology that literally changed the world, to the extent that we do not even realise now how widely it is applied in the technologies that we all enjoy. Let not us forget either that Sheffield is also the home of Ronseal, which not only does what it says on the tin, but plays a leading role in developing environmentally friendly coatings for use in the home. Sheffield leads the way even now, with two fine research universities and its Advanced Manufacturing Research Centre, the original model for the country’s catapult initiatives. In joint ventures between Sheffield University and companies such as Rolls-Royce and Boeing, cutting-edge materials are being developed for the aerospace industry, such as the use of carbon fibre blades for the next generation of aerospace engines and lightweight aeroplane bodies.

In the chemicals field, the UK leads the way. Chemical and pharmaceutical products are our largest manufacturing export, with the chemicals sector alone enjoying an annual turnover of £60 billion. It sustains some half a million jobs throughout the country—well paid, for the most part—and finds solutions that make life better and more secure for all of us. Let us bear in mind that penicillin is a British discovery that has transformed medicine, saving countless lives. Today, the pharmaceutical industry employs 68,000 people in the UK, with 23,000 of them employed in highly skilled R and D roles.

The work goes on. British scientists from across the spectrum work on projects that impact on every aspect of our lives, helping us to meet the challenges of today—not just the obvious challenges, such as using agri-tech research to help to feed a growing world population or how to use modern science to develop the technologies we need if we are achieve a truly low-carbon economy, but other challenges that are none the less important. For instance, researchers at the University of Leicester have developed new technology that reveals previously undetectable fingerprints on metal objects; the method has been used in more than 100 criminal cases so far and is enabling the reopening of closed cold cases. Also, research into the structure of graphite is extending the lifetime of the UK’s nuclear reactors, resulting in an effective saving of £40 million to date and helping not only to keep the lights on but to reduce the country’s carbon footprint.

As we can see, science is all around us. It gives us hope for the future, for our health, for our security, for our living standards and for the sustainability of our living standards. We are good at science here in the UK—after all, we are the country where Newton discovered gravity and Faraday made early advances in harnessing the power of electricity, fundamental advances that revolutionised our understanding of the world.

Science has done a great deal for humanity and it is precisely because it fulfils such an important role in changing lives that it is also vital to our economy, particularly if we are to maintain and grow our economy and our knowledge base. A modern knowledge economy has to be underpinned by science. For example, my constituency is home to Tata’s Speciality Steels, which works at the top end of high-value steelmaking. Tata knows that it has to stay ahead of the game with its research if it is to survive the challenges presented by developing economies such as China. It almost goes without saying that if steel is one of our foundation industries—I think it is commonly accepted that it is—science is one of the vital foundations of steelmaking itself.

Our position on science has been strong. The UK has enjoyed a powerful public research base, creative innovation mechanisms and a supply of highly skilled workers, who help to drive up our productivity and further develop our knowledge economy. Our position on science has encouraged inward investment. The UK is the largest recipient in Europe of such funding, despite the squeeze on public investment and the long-term neglect of our science capability. However, this rather unbalanced approach to investment cannot continue without damaging both the UK’s reputation and our economy. Government investment in R and D acts as a powerful magnet for industry investment, both domestic and foreign, and the announcement in the comprehensive spending review of any more cuts would risk damaging our overall funding profile even more.

[Mr Andrew Smith (Oxford East) (Lab)]

I am sorry that I missed the very beginning of my hon. Friend’s excellent speech. On her last point, does she agree with me that it would be a great mistake if the tax credit grant element of research help to industry was converted into loans, which has been mooted in some quarters and which businesses that carry out a lot of R and D are very worried about?

[Angela Smith]

I agree entirely with my right hon. Friend that any fiscal levers designed to improve the research profile of UK science should be maintained.

It is worth mentioning that according to a study by the Department for Business, Innovation and Skills, every £1 of public investment secures an increase of between £1.13 and £1.60 in private funding. The importance of public funding for science is underlined by comparisons with our international competitors. The comparisons are not flattering—indeed, since the mid-1980s, our investment in science and innovation has fallen behind, leaving us sixth in the G7 for overall spending and last overall for public investment alone. South Korea enjoys public and private investment in science equivalent to 3.6% of GDP—no wonder it looks likely that South Korea, rather than Forgemasters in Sheffield, will be making the pressure vessels for our nuclear power stations—and in Germany and the USA, the figure is 2.8%. Here in the UK, the figure stands at just 1.7%.

We have punched above our weight, but it is clear that that cannot continue. Comparatively low levels of investment in research and development risk losing any competitive advantage we have over other innovation leaders who are investing more. As we all know, our economic productivity has already fallen by at least 15% from a pre-financial crisis position of steady growth. International studies demonstrate impressive and positive impacts on productivity from increased scientific research and development profiles, and it is clear that our 1.7% GDP investment rate is causing problems.

I acknowledge, of course, that the Government ring-fenced funding during the last Parliament and that that decision helped to keep safe £1.2 billion of private sector investment, but it is also true that the cash limit on research and development represented a real-terms cut of around £l billion. Although that decrease has been weathered in the short-term, if extended, it risks serious damage not just to our science base, but to the economy itself. If this Government and this Chancellor are serious about rebalancing the economy and closing the productivity gap—as a northern MP, I include the northern powerhouse in that—we need to see robust and secure funding plans for science put in place. How can we hope to become, as the Chancellor wants, the highly skilled, highly advanced economy with a healthy export profile and a healthy balance of payments if we allow our science base to slide further down the international league tables?

As we come to the all-important comprehensive spending review, we need to see the Chancellor’s warm words matched with a commitment in the review to tackling the underfunding of science in our economy.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I commend the hon. Lady on securing this debate and on making a powerful speech. She talks about the forthcoming spending review. Does she agree that we would like to see more than just words about one nation science? The Minister and his colleagues should liaise with the devolved legislatures across the UK, particularly on universities, so that one nation science becomes the reality, rather than just a soundbite.

[Angela Smith]

I thank the hon. Gentleman for that. I agree that wherever in the UK a university is, if it is demonstrating real expertise in a scientific discipline and it comes up with good, robust proposals that are approved by its peers in the scientific community, it should benefit from an equitable spread of funding for research and development.

I conclude by asking the Minister for assurances about future public funding for our science and research base. First, will he commit to maintaining the ring fence for Government science spending over the next period, and will the Treasury fund real-terms protection of the science budget? We need funding stability, and we need to encourage business confidence. We also need to maximise our capital investment. I know that the capital budget has been settled, but too many science facilities remain under-utilised, which is wasteful and damaging to our economic growth ambitions. We need to align capital and resource investment to maximise the return, but we also need to rebuild our science base, as I have already pointed out. Will the Minister therefore also commit to an ambition to increase spending on science when sustained economic growth returns to the economy? Such a commitment in the CSR will send out the right signals to investors and scientists everywhere and ensure confidence that the UK is determined to use its science base to build economic success.

The Minister might also like to comment on the need for a broad spectrum of public investment in scientific infrastructure, from lab bench through to mid and large facilities. Equally, it would be welcome if he commented on the principle of allocating scientific funding according to a gold standard, based on independent expert peer review of research. That was the point I was trying to make to the hon. Member for East Londonderry (Mr Campbell).

Finally, it would be reassuring to hear the Minister acknowledge the importance of curiosity-driven fundamental research. It is easy to understand the importance of applied scientific research, but some of our greatest achievements—scientific and economic—came from fundamental research. Laser technology is a good example of that and I am sure everyone can think of other examples. Although private investment is important to increasing our science research base, without adequate public support we will see that investment increasingly put at risk. Already we are falling behind our competitors, and in today’s world to stand still is to fall behind.

Today’s debate has been heavily supported by the royal societies and the universities, which I thank for their help and interest, and by numerous organisations spanning food and drink, pharmaceuticals and health. From the British Medical Association and Arthritis Research UK through to the Food and Drink Federation, the interest in the debate has been immense. That all emphatically underlines the sheer extent of the reach of science—I have tried to convey that in this debate—and thus its importance to the economy.

The debate, in title and in application, demanded a response from a Treasury Minister. The fact that the Chancellor’s ministerial team chose to bypass the opportunity to talk about science goes against the spirit of Westminster Hall debates and is deeply disappointing. No blame is apportioned to the Minister here now—we are glad to see him here—but where is the Treasury Minister? The Minister for Universities and Science can do more than repeat the speech—good as it was—that he gave in response to the excellent and well attended debate on this topic that was recently brought to the House by the hon. Member for Pudsey (Stuart Andrew). After all, it is official Government policy to support science. They have developed a science and innovation strategy, which states that

“capital investment alone is not sufficient to ensure our research infrastructure is able to continue to deliver world class outputs. We recognise that our science base requires adequate resource funding, and will give full consideration to these requirements when we take a decision at the Spending Review next year.”

On the basis of that statement, I call on the Minister not only to ensure that Treasury Ministers are made aware of today’s debate, but to commit to being an ambassador for science to the Treasury. He needs to go out there and make the case for science funding. I look forward to his response.

--- Later in debate ---

[Angela Smith]

I thank the shadow Minister and the Minister for their responses. I particularly thank the Minister for pronouncing my constituency properly, because few people do. I also welcome the debate we have had and the strong consensus on the issue throughout the House, across all political parties. We have had some excellent speeches.

I go back to my big point, which is about how deeply embedded science is in our society and our everyday lives. Some of our most important innovations have become such a part of our everyday lives that we take them for granted. Stainless steel, for example, forms not only our cutlery, saucepans, washing machine drums and microwave oven liners, but hot water tanks and equipment for such activities as catering, brewing, distilling, food processing, and water and sewage treatment. Every part of our lives is affected by technologies such as the one that produces stainless steel. The key question, therefore, is whether as a nation we want to continue to play a leading role globally in scientific innovations that will shape the world of tomorrow, in the same way as our innovations in the past have shaped the world of tomorrow.

The Minister’s response acknowledged the Government’s role in underpinning our science base. He also made it clear that a capital commitment is already in place. The Campaign for Science and Engineering has made the point that if the cash ring fence is maintained, the loss in real funding will rise to more than £3.1 billion by the 2020 election. That amount would pay for four research institutes equivalent to the £700 million Francis Crick Institute being built in London—one for the north of England and one for each of the devolved regions. That point is well made.

According to the Minister, the Treasury has funded the science base well in difficult times. I acknowledge that, but the commitment to revenue to match the capital commitment made by the Government is important. The £400 million ISIS neutron source at Harwell will run for only about 120 days this year, instead of an optimal 180 days, because of the lack of revenue funding. That underlines the fundamental point of the debate. We did not quite get the commitments that we were looking for, but the Minister acknowledged our case implicitly. He has told us that he is arguing and fighting hard for science funding. We thank him for that—

Motion lapsed (Standing Order No. 10(6)).