Large Solar Farms
George Freeman Excerpts(2 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
Do feel free to remind me at two minutes to 3, Sir Charles.
George Freeman
It is a pleasure to serve under your chairmanship. May I start by congratulating my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith)? The scale of attendance and the passion with which colleagues have spoken speaks to the importance of his advocacy and the issue.
I am standing in today for my right hon. Friend the Minister for Energy, Clean Growth and Climate Change, but I am absolutely delighted to be doing so, for a number of reasons. First, I come from a rural, agricultural constituency that is itself facing the introduction of substantial, industrial-scale infrastructure connected to offshore wind energy. The industrialisation of rural constituencies in pursuit of the noble aims of net zero is a local issue. It is very important and we have to get that planning process right. I have seen that for myself. I also drive through the Cambridgeshire-Suffolk border on my way to my constituency and see the Sunnica proposal, the signs in every field around the area and the concern locally.
As the former Minister for agritech, I am passionate about the importance of this country leading the world in net zero farming and showing how we can pioneer the technologies for and approaches to net zero agriculture. Nobody in this Chamber needs to be reminded that agriculture is the next dirty industry on the block. We are cleaning the energy system, but we will then have to decarbonise agriculture and transport globally. That is a big opportunity for this country.
As the Minister for Science, Research and Innovation, including for fusion, I see it as fundamental to my role to ensure that we turbocharge our drive towards the technological solutions that will allow the planet to grow and develop sustainably in the longer term. I am also committed to the science of the data metrics of sustainable development, by which I mean both agrimetrics, so that when consumers pick up a pint of milk or a piece of British food they are clear about its environmental footprint—that is the best way to reward advanced, progressive farming—and carbon metrics, so that consumers can be harnessed on the journey to net zero, confident that they are making enlightened choices. That requires good science, which a number of colleagues have touched on.
Alicia Kearns
I know that my hon. Friend the Minister is a strong advocate of human rights. He mentions enlightened consumers wanting to know what they are purchasing and what is in their community. Does he agree that we should not install solar panels when we know for a fact that they are being produced in genocidal camps where people are being exterminated? I am talking about the Uyghur in China.
George Freeman
My hon. Friend makes her point powerfully. I absolutely agree that we should not be supplying to consumers and citizens goods whose production involves torture and illegal practices. I am not the consumer affairs Minister, but I will raise that point with those who have that responsibility.
In the time available, I will set out the Government’s policy on solar, acknowledge the 16 very important points made today by colleagues from across the House, summarise the process in terms of disapplication and more broadly, and then make what I hope will be some important and helpful undertakings.
It is striking that, for all the concerns raised today, there is unanimity in the Chamber about the urgency of tackling the climate emergency. I think that everyone present supports the commitment, as enshrined at COP26, to reduce global temperature increase to 1.5°. There is good science behind that, and I think that many comments were made in that spirit. That is why the Government have adopted carbon budget 6, which is the world’s most ambitious climate change goal, to reduce emissions by 77% by 2035—that might sound a long way away, but it is rapidly drawing near—compared with 1990 levels. With limited time until that date, the UK’s electricity supply is in urgent need of decarbonisation. That is why, in the net zero strategy that was published in 2021, the Government committed that all UK electricity will be from low-carbon sources by 2035, subject to security of supply. At the end of my comments, I will come back to some of the changes relating to the global markets, the Ukraine emergency and the Prime Minister’s announcement of a review of energy policy.
I want to touch on the benefits of solar, which merit highlighting. It is a very flexible technology. As my right hon. Friend the Member for West Suffolk (Matt Hancock) has pointed out, we can be proud that we have deployed 99% of solar at huge scale, quite small scale and high scale across the country. Solar generates large amounts of electricity even on cloudy days, and from indirect sunlight. Solar also works at cooler temperatures, so its carbon footprint is normally much lower than that of coal or gas. Most solar panel components can be recycled.
Solar can complement other variable generation sources, such as wind, to balance the grid on summer days when wind speeds tend to be lower. We see solar as key to the Government’s strategy for low-cost energy and decarbonisation, and large-scale solar is one of the UK’s cheapest renewable generation technologies; I will come in my closing comments to where the externalities of cost may lie. That is why in the net zero strategy, the Government committed to a sustained increase in deploying solar in the 2020s and beyond, embedded through the contract for difference scheme.
I want to pick up the points that several colleagues have made, because those points are hugely important and need to be acknowledged seriously. The first was about the scale of what is being proposed. As the equivalent of 4,000 football pitches, this is not a small-scale development or even, by most people’s standards, a medium-scale one. This is huge, industrial-scale development in the countryside. There were fears about a wild west and a solar rush, and about precedent in the planning system—if one of these developments gets approved, it may be a signal that we are locked into precedent. There were concerns, which I share, about the use of good agricultural land and, particularly in the light of the Ukraine situation, about food security.
Concerns were raised about the solar supply chain—both the human rights point that my hon. Friend the Member for Rutland and Melton (Alicia Kearns) made, and the carbon footprint point. There were concerns about the lack of metrics of sustainability, and about taking into account the full externalities of the carbon footprint of developments. There were concerns about the abuse of the local planning system. I have been very struck in my constituency by the fact that because this is critical national infrastructure, the views of local people and local MPs—frankly, anybody locally—are very downgraded. The planning advice states that those local views are important, so I think that there is a real issue there.
There were specific concerns about Rutland and habitat impact, and calls for a clearer national policy on tackling these policy tensions. Points were made about the impact of the Ukraine emergency on food supplies, food security and food prices. Points were also made about the link to surreptitious approvals of, effectively, battery farms in inappropriate locations, about fire risk, about the impact on rural tourism and about the need for better co-location of generation, where possible, with use. My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) made a point about beauty, identity and character, which is not just a magnificent ethereal concept; it also underpins tourism in the countryside. Some very important points have been made, and they deserve to be repeated and acknowledged. Forgive me; I am not going to list everybody, but Hansard will report what has been set out.
Matt Hancock
I am grateful to the Minister for giving way, because I have made several interventions. On the point about fire safety, will he take on board, and comment on, the need for transparency about past fires? I should also have mentioned in my speech that the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), cannot speak because she is a member of the Government, but she wholeheartedly endorses my views and is a great campaigner for her constituency when it comes to the Sunnica plant—and more broadly.
George Freeman
I will happily pick that point up. My right hon. Friend invites me—wisely, perhaps, given the time—to clarify that at the end of this debate, I will raise all the points that have been made today with the relevant Ministers, including, perhaps, the Minister for fire safety. When such a number of colleagues meet in the Chamber, their points deserve to be heard and passed through.
I want to pick up on the planning point. Colleagues will be aware, but those listening may not be, that planning applications for projects below 50 MW are determined by the local planning system. Many hundreds of them around the country have been approved satisfactorily. Projects up to 350 MW in Wales are devolved, with decisions made either by local authorities or the Welsh Government. Planning in Scotland and Northern Ireland is fully devolved. For projects over 50 MW in England and over 350 MW in Wales, planning decisions are made by the Secretary of State for Business, Energy and Industrial Strategy.
Kevin Hollinrake (Thirsk and Malton) (Con)
Local authorities’ declaration of a climate emergency seems to be overriding the requirement to avoid developments on best and most versatile land. Should there not be an absolute prohibition of solar farm developments on BMVL?
George Freeman
My hon. Friend makes his point well. Let me come to the point I was going to make about planning, which tries to deal with that.
In 2021, the Government set up a national infrastructure planning reform programme, bringing several Government Departments together with the aim of refreshing how the nationally significant infrastructure project regime works to make it faster, better and greener. The Government will shortly consult on reform proposals—we will do so later this year. As a part of that, the Government are reviewing the national policy statements for energy. It seems to me that quite a lot of what has been said today is a call for a clearer national policy statement, and colleagues might want to raise that with the Minister for Energy and the Planning Minister. The draft revised national policy statement for renewables includes a new section on solar projects, providing clear and specific guidance to decision makers on the impact on, for example, local amenities, biodiversity, landscape, wildlife and land use, which must be considered when assessing planning applications. The Government plan to publish a response to the consultation on the revised national policy statement shortly.
Under both local and NSIP planning systems, developers must complete proper community engagement as part of the application process. Communities should and must be able to participate in the formal examination process run by the Planning Inspectorate. All large solar developers under the NSIP must complete an environmental statement for any application, to consider all potential impacts. Planning guidance is also clear that the effective use of land should be prioritised by focusing large-scale solar farms on previously developed and non-greenfield land. It seeks to minimise the impact on the best and most versatile agricultural land. It requires developers to justify using any such land and to design their projects to avoid, mitigate and, where necessary, compensate for impacts.
I am conscious of the time—I think I have one minute left—but I want to highlight that in relation to the planning process colleagues will understand that I cannot comment on the specifics of this individual case, because I do not want to prejudice it in any way. However, we anticipate that once an application is submitted to the planning inspector, it will be 15 to 18 months before it comes back to the Secretary of State after all the various consultations. Interestingly, in terms of precedent —all-important in planning—only one large-scale solar application has been approved, in Kent. One in Wales, Strawberry Hill—devolved, of course—was turned down on the agricultural land use point. I understand that one in Scunthorpe is imminent, and that Sunnica and one or two others are in the pipeline. The point about precedent is important: we all know that when a big decision is made it can trigger a wave of subsequent applications.
Let me close by congratulating and thanking colleagues for coming today. They have raised important points that I will undertake to pass on to Ministers who have responsibility for energy, planning, farming, tourism and fire safety. Colleagues have made a very important case for a stronger and clearer national policy statement, reflecting the situation in Ukraine and the Prime Minister’s emphasis on food and energy security. I will undertake to make sure that the points raised today are picked up by all the relevant Ministers.
Oral Answers to Questions
George Freeman Excerpts(2 years, 1 month ago)
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Robin Millar (Aberconwy) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
As part of our step-change increase in investment in science research an innovation—an increase of 30% over the next three years to £20 billion a year—we are putting levelling up at the heart of our investment through clusters around the country. That is why we are putting £200 million into the strength in places fund for 12 projects across the UK; making the groundbreaking pledge that 55% of BEIS funding will go outside the greater south-east; launching three innovation accelerators in Glasgow, Manchester and the west midlands; and extending eight freeports, with two in Scotland.
Aaron Bell
I thank the Minister for his answer. In Newcastle-under-Lyme, Keele University plays a substantial role in levelling up north Staffordshire through its work with local authorities and its Keele deals addressing economy, health, culture and social inclusion. There is also the enterprise zone, including the science and innovation park, which provides a home and support mechanism for more than 50 companies, with more to come. Will the Minister confirm that universities’ role in such work will be supported as part of our levelling-up agenda, as we get more money spent outside the south-east?
George Freeman
My hon. Friend makes an excellent point. I pay tribute to his work and that of Keele. The enterprise zone is first class—similarly, the work of Keele University. I confirm that we are taking into account the very important role of universities in innovation and levelling up. He will see that reflected in the allocation of £40 billion to UK Research and Innovation and Innovate UK in the next three years.
Nick Fletcher
The advanced manufacturing research centre at Sheffield University would like to open an innovation facility at Doncaster Sheffield airport, which may bring the likes of Boeing and hybrid air vehicles to Doncaster. It needs just £24 million to do that. I have met the Minister on the subject before. Will he come to Doncaster and meet all the stakeholders to see if we can get the project moving forward and let the real levelling up begin?
George Freeman
I pay tribute to my hon. Friend, because this is the third time that he has raised this matter with me. He makes in important point. The Boeing interest in Doncaster Sheffield airport is part of our plan to grow an aerospace cluster around the whole of the UK. I very much welcome the opportunity to visit him and meet Boeing and local stakeholders.
Robin Millar
Last September, Llandudno in Aberconwy was identified as having the fastest economic recovery in the UK and, last week, an analysis of Companies House filings identified it as the start-up capital of the UK. I pay tribute to the entrepreneurs and businesses for making that happen. Will my hon. Friend the Minister join me in Llandudno with some of those entrepreneurs to see how we can nurture those green shoots, secure the growth and turn Llandudno into a growth and enterprise hub for north Wales?
George Freeman
With pleasure. My hon. Friend makes an important point: the Welsh dragon is roaring not just on the rugby pitch and in tourism, where Llandudno is the queen of Welsh resorts, but in the science, research and innovation economy. With the north Wales energy corridor, the south Wales life sciences cluster and plant health at Aberystwyth, Wales is a science and innovation engine that we intend to support. I pay tribute to his work in the area and look forward to visiting the Llandudno cluster as part of our work on supporting clusters around the UK.
Tim Farron (Westmorland and Lonsdale) (LD)
The Minister may be aware that many rural parts of the north feel that levelling up does not really apply to them, but of course it must and it should. The Minister may be aware of Cumbria’s energy coast. We are a country with plenty of wind, plenty of water and plenty of coast. We should bear in mind that, after Canada, the UK has the second largest tidal range on planet earth and we are making use of nearly none of it. Will he commit to making sure there is a tidal, marine and hydro-energy hub in Cumbria, based in Kendal where Gilkes is so wonderfully based?
George Freeman
I absolutely agree. As a rural MP, I do not need to take any lectures from the Liberal Democrats on the importance of rural innovation. I will address the specific point about tidal power: we have just put £30 million into it. It would be good hear the hon. Gentleman—and his party—applaud the nuclear industry, which is an important part of that region.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers. With reference to university places for those from low-income backgrounds, will he consider greater financial aid for STEM subjects—science, technology, engineering and maths—for students from any part of the United Kingdom of Great Britain and Northern Ireland to find their passion and long-term career?
George Freeman
The hon. Member makes a really important point that is at the heart of our £100 million innovation accelerator pilot programme. We have chosen the locations—Glasgow, Manchester and the west midlands—for the initial tranche, because we want to invest in places where there is strong world-class research and development and innovation cheek by jowl with lamentable deprivation. I very much hope that over the next few years we can extend it out to areas, including parts of Northern Ireland, where that similar pattern of excellence alongside deprivation is sadly still present.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Levelling up, really? The Campaign for Science and Engineering has shown that the proposals in the White Paper simply freeze the current proportion of regional science spend, with the golden triangle of Oxford, Cambridge and London continuing to receive the majority of public sector science spend. When it comes to private sector science spend, London’s share has actually doubled under Conservative Governments, because they will not give our towns and cities the powers and investment they need to build strong science economies. Will the Minister say whether the proportion of public science spend going to the regions will actually increase as a consequence of the levelling-up White Paper, or is this just more broken promises from the department for funny numbers?
George Freeman
I suggest the hon. Lady reads the levelling-up White Paper. If she reads it, she will see that it is a very substantial document that deals with precisely the points she has just made. [Interruption.] I will deal with the specific question she asked about devolution and extending investment around the country. That is why we have made a pledge—a pledge that the Labour party never made, by the way—to increase R&D spending outside the greater south-east. Our Department, the Department for Business, Energy and Industrial Strategy, which is responsible for 75% of R&D, will move to being 55% outside the south-east. The point she misses is that we do not level up this country by destroying the golden triangle; we level up by building the clusters, moving from a discovery economy to a development economy. As a Member for the north-east, I thought she would be applauding the phenomenal growth in the north-east as a result of our policies.
Jake Berry (Rossendale and Darwen) (Con)
Obviously, I welcome the targets to increase investment through levelling up in our regions, but the thing that really matters is not what the Government say in White Papers, but how the money gets to those businesses, particularly in Rossendale, Darwen and east Lancashire more widely. Will the Minister commit to publishing an easy guide for local businesses to work out how, through their innovation and their own R&D, they can access some of that new funding? Trash-talking levelling up by those on the Opposition Benches does not go down well in east Lancashire or anywhere in the north, because we believe in this programme.
George Freeman
My right hon. Friend makes a really important point. It was surprising to hear the Opposition not mention the phenomenal investment that is pouring in. In the end, levelling up will be achieved by the businesses of this country investing in partnership with us. I welcome the Bentley £2.5 billion investment and the Aston Martin investment in Wales. That is happening right now. My right hon. Friend’s point is well made. As part of our significant increase in Innovate UK funding, we are looking at how we can ensure small businesses find it easier to access grant funding. We are dramatically increasing Innovate UK funding. The key test will be whether small businesses around the country can access it.
Liz Twist (Blaydon) (Lab)
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I am grateful for the hon. Gentleman’s question on the importance of research into neurodegeneration and Parkinson’s, a cause I was proud to champion as Minister for life sciences. We are investing £20 million a year, including £14.8 million through UK Research and Innovation and another £6 million through the National Institute for Health Research. We continue to fund the UK Dementia Research Institute, and in the autumn we announced another £375 million for neurodegenerative diseases over the next three years.
Mr Sharma
More than 150,000 people in the UK will have Parkinson’s by 2030. Parkinson’s UK is clear that, to accelerate the search for a cure, research must be supported by improved infrastructure, including the use of digital technology and better clinical trial design. Will the Minister meet me and Parkinson’s UK to discuss how its proposal for a challenge fund could help to defeat Parkinson’s?
George Freeman
Yes, I would be delighted to meet the hon. Gentleman. He makes an important point. The truth is that the next frontier in neurodegenerative science will be a mixture of neural pathways, neural mapping, digital science and deep-tissue phenomic and genomic science, which is why I was recently in Switzerland at the institute of neuroscience in Lucerne to see whether we can establish a collaboration.
Ian Levy (Blyth Valley) (Con)
Peter Dowd (Bootle) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I will happily talk to the hon. Member offline about the extensive vaccine pipeline that we are in the process of procuring. It includes next-generation mRNA vaccines for both flu and the next phase of covid. We are ahead of the curve on the next phase, as we were during the pandemic.
Aaron Bell (Newcastle-under-Lyme) (Con)
Mr John Whittingdale (Maldon) (Con)
George Freeman
My right hon. Friend makes an important point, which I would be keen to talk to him about. Although that is a Department for Digital, Culture, Media and Sport lead, we are tightening up on the intellectual property provisions, and we are minded to proceed with that legislation.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Unscrupulous employers have used the pandemic to slash their loyal workforce’s terms and conditions and threaten them with the sack. Court cases have been lost by Uber and more recently by Tesco, yet all we have from this Government are platitudes. They have done absolutely nothing to stop brutal fire and rehire practices. Will the Government’s much-fabled Employment Bill finally ban them once and for all?
Mrs Sheryll Murray (South East Cornwall) (Con)
George Freeman
My hon. Friend is an outspoken advocate for the Cornish cluster, which is growing fast. In addition to our groundbreaking pledge to increase investment in R&D outside the golden triangle to 55%, we are specifically investing in the South West Centre of Excellence in Satellite Applications, the Newquay Spaceport and work with the University of Exeter and Virgin Orbit. This is an exciting time for the Cornish economy.
Andy McDonald (Middlesbrough) (Lab)
Yesterday, the Prime Minister said that workers in the UK should learn from Germany, where workers do not have a habit of going into work when not well. Will the Minister learn from the German Government and bring in statutory sick pay that covers 100% of workers’ salaries instead of the measly 90% that is covered in the UK, which leaves so many workers in the terrible position of having to do the responsible thing of isolating while being sick and not being able to put food on the table? On that point, will the Minister take this opportunity—
Advanced Research and Invention Agency Bill
George Freeman ExcerptsMonday 31st January 2022
(2 years, 2 months ago)
Commons ChamberRead Full debate Advanced Research and Invention Agency Act 2022 View all Advanced Research and Invention Agency Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 31 January 2022 - (31 Jan 2022)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I beg to move, That this House disagrees with Lords amendment 1.
Madam Deputy Speaker
With this it will be convenient to consider Lords amendments 2 to 15.
George Freeman
I am delighted that the Bill to create this exciting new agency has returned to this House and that I am able to speak to it for the first time in my role as Minister for Science, Research and Innovation. I pay tribute to my ministerial colleague Lord Callanan for his work on the Bill in the other place. Not for the first time in matters scientific, their lordships have kept our Minister very busy on the Front Bench. I also pay tribute to my hon. Friend the Member for Derby North (Amanda Solloway), who so capably led the Bill when it was first before the House.
There are 15 amendments for our consideration tonight. Fourteen of those were tabled or supported by the Government. I will summarise them quickly. Amendments 2 to 8 relate to changes the Government made in response to the Delegated Powers and Regulatory Reform Committee’s report on the Bill. In doing so, we demonstrated the seriousness with which we take the DPRRC’s recommendations and the Government’s commitment to acting upon them. The effect of those amendments is to omit clause 10, which contained a broader power to make consequential provision, and to replace it with a narrower, more specific power in clause 8. The new power can be used only in consequence of regulations dissolving ARIA. Other amendments are needed to tidy up the rest of the Bill and reflect that change. I hope that the changes are, in general, welcome.
Amendments 9 and 10 remove a power for ARIA to pay pensions and gratuities determined by the Secretary of State to non-executive members. We have tested that thoroughly and are content that in ARIA’s specific case, that power is not needed. Again, the two amendments reflect the usual process of improving the Bill in response to scrutiny and the expertise that colleagues here—and in particular in the other place—have brought to bear.
Amendments 11 and 13 remove the amendments previously included in the Bill that had the effect of reserving ARIA. I have had productive discussions on this with my ministerial colleagues in Wales, Scotland and Northern Ireland, to reiterate the importance of ARIA and our broader science policy to help strengthen the Union. I am delighted that they share my vision and ambition for ARIA and that we have reached an agreement on the independence of ARIA—a memorandum of understanding that is a shared commitment to safeguard the organisation’s most important characteristics, and which means the reservations are not needed. I am delighted to be able to report that legislative consent motions have been passed in all three devolved legislatures on the basis of that agreement, and I similarly commend it to the House.
Government amendments 12, 14 and 15 apply some relevant obligations to ARIA that would normally apply automatically to public authorities listed in the Freedom of Information Act 2000. The amendments provide for ARIA to be treated as a public authority for the purposes of the Data Protection Act 2018, the Income Tax (Earnings and Pensions) Act 2003, the Enterprise Act 2016 and the Small Business, Enterprise and Employment Act 2015. They also amend various regulations and the UK GDPR to reflect that. That ensures that ARIA is treated in the same way as a public organisation normally would be treated in those important areas.
Daniel Zeichner (Cambridge) (Lab)
The Minister will know from previous discussions that the question of freedom of information has come up before. Would it not be much simpler just to make ARIA subject to the Freedom of Information Act? In the current climate, would that not reassure the public?
George Freeman
It may reassure the public, but we also have to take into consideration the fact that to succeed, world-class scientists have been recruited to ARIA to lead in cutting-edge science. That very small staff need to be sure that they will not be tied up answering 101—often spurious—freedom of information requests from the media, who are keen on running stories. We want to make sure the agency is accountable properly but not bogged down in what can be hugely onerous freedom of information requests.
John Redwood (Wokingham) (Con)
In that connection, could the Minister give the House some brief guidance on what he, as the accountable Minister, would expect by way of discussion and influence over corporate plans and budgets and onward reporting to the House?
George Freeman
I am grateful to my right hon. Friend for that question, and he will not be surprised to know that it is one I have also been asking since coming to this role. The point of ARIA is to be a new agency for doing new science in new ways, and it has been structured specifically to avoid meddling Ministers, even those with a good idea, and meddling officials, even those with good intent, and to create an agency that is free.
My right hon. Friend asks an important question. As we appoint the chief executive officer and the chair, the framework agreement will set out, a bit like a subscription agreement, the agency’s operating parameters, which will be published in due course. Each year ARIA will have to report on its stated plans. Crucially, as is so often not the case in scientific endeavour, ARIA will report where happy failure has occurred so that we do not continue to pour more money into scientific programmes that have not succeeded, which I know will reassure him. We want ARIA to be free to be honest about that, and not embarrassed. ARIA will be annually accountable through the framework agreement.
Finally, Lords amendment 1 deals with the conditions that ARIA may attach to its financial support. This arises from a series of important discussions in the other place relating to ARIA’s duty to commercialise intellectual property that may be generated, which I am keen to address properly. However, the amendment, as drafted, does not actually prevent ARIA from doing anything; it adds examples of conditions that ARIA may attach to financial support, but ARIA already has the general power to do just that. Legally, the amendment simply represents a drafting change. As such, we cannot accept it, but we understand and acknowledge the importance of the point that the noble Lord Browne had in mind.
It is our firm belief that, although it is not appropriate at this stage to specify ARIA’s contracting and granting arrangements in legislation, we recognise the substance of the concerns underlying the amendment: namely, that ARIA should have a duty to the taxpayer to ensure it is not haemorrhaging intellectual property of value to the UK. I will outline our position on that.
The amendment focuses principally on overseas acquisition of IP relating to the principles on which the Government intervene in foreign takeovers of UK businesses, particularly where those businesses have benefited from public investment in research and development activities. The National Security and Investment Act 2021, which fully commenced earlier this month, provides just such a framework, and it marks the biggest upgrade of investment screening in the UK for 20 years.
The NSI Act covers relevant sectors, such as quantum technologies and synthetic biology, that have benefited from significant public investment, and it permits the Government to scrutinise acquisitions on national security grounds. This new investment screening regime supports the UK’s world-leading reputation as an attractive place to invest, and it has been debated extensively in both Houses very recently. We do not believe that revisiting those debates today would be productive.
Although the NSI Act provides a statutory framework, a much broader strand of work is under way. As Science Minister, I take very seriously the security of our academic and research community. A number of measures have been taken in the past few months and years to strengthen our protections. We are working closely with the sector to help it identify and address risks from overseas collaborations, while supporting academic freedom of thought and institutional independence.
Members do not need me to tell them that intellectual property is incredibly valuable and we increasingly face both sovereign and industrial espionage. It is important that we are able to support our universities to be aware of those risks and to avoid them. The Bill already provides the Secretary of State with a broad power of direction over ARIA on issues of national security, which provides a strong mechanism to intervene in its activities in the unlikely event it is necessary to do so.
Stephen Flynn (Aberdeen South) (SNP)
I welcome the Minister to the Dispatch Box for the first time on this Bill. He is saying that ARIA can already do this, so the Government do not need to legislate in this regard, but that the Government would, none the less, be keen to see ARIA do it. There seems to be a discrepancy in that thought process.
George Freeman
There is no discrepancy. I will explain why but, essentially, the Bill already sets out ARIA’s statutory responsibility to generate economic return for the UK, and the hon. Gentleman will know, as I do from my career negotiating intellectual property agreements, that at this stage it would be wholly inappropriate to mandate in statute the form that these intellectual property agreements will take. To be blunt, we do not yet know what programmes the chair and chief executive will put in place. It is only when we know the sort of science that ARIA is doing that we will possibly be in a position, through the framework agreement, to set out the appropriate ways to ensure that value is maximised.
Security issues will also be a core consideration in ARIA’s governance arrangements in the framework agreement to ensure its effective functioning as an organisation. I confirm to colleagues that the framework document, which deals with those issues, will include obligations on ARIA to work closely with our national security apparatus. That is prudent to ensure that ARIA’s research is protected from hostile states and actors and to stay connected to the Government’s wider agenda on strategic technological advantage.
The Government’s chief scientist, who will be on the ARIA board, will bring intelligence and expertise across security issues within Government, supported by the new Office for Science and Technology Strategy and the National Science and Technology Council. ARIA will of course have internal expertise to advise its board and programme managers, while also working with recipients of its funding in universities and businesses on research-specific security issues. That will be vital for ARIA to stay at the forefront of responding to the challenging nature of the UK’s interests in this area.
There is also the question of how ARIA responds to the UK’s strategic interests in science and technology more generally where they may not quite fall under the national security umbrella. The integrated review, the creation of the new OSTS and the National Science and Technology Council, on which I sit, outline our ambition to ensure that there is a serious, strategic machinery of government commitment to the strategic industrial advantage of UK science and technology. That is a fundamental priority for me and the Government more broadly.
ARIA is nestled within that structure and is required to be aware of all those priorities, but we must keep its role in perspective. It will be only a small part of a landscape that we are explicitly seeking to make independent of Government and free to explore new funding approaches. The whole point of ARIA is to be a new agency and to do new science in new ways.
Graham Stringer (Blackley and Broughton) (Lab)
The Minister is being admirably blunt about keeping interfering Ministers and officials from controlling or influencing ARIA, but there is also influence from the scientific establishment, which has its own programmes and would like the sums of money in ARIA to go to them. Given the structure of the board, is he satisfied that ARIA will maintain its independence not just from the civil service and Ministers, but from the scientific establishment?
George Freeman
The hon. Member raises a very important point. Yes, I am satisfied, and for this reason: the way in which the agency has been established through the Bill and our plans to appoint the CEO and the chair on the basis that they will set out a very bold vision for ARIA to be the agency for new science in new ways. All the support that we are providing is specifically designed to allow them to operate in an environment where they can draw on the very best of UK science infrastructure and expertise, but not find themselves bound by either the short-term grant application process that dominates or the often substantial interests seeking investment in their own field. We will be able to attract the people we intend to attract because of that freedom. For that reason, I am confident—as that will be set out in the framework agreement and held to account by the board of ARIA and the scientific advisory board—that we will be able to ensure that that is the case.
Although ARIA will operate independently, it will be guided by key obligations regarding economic and UK benefit. ARIA must, in all its activity, have regard to the economic growth or economic benefit in the UK, alongside other considerations. That statutory obligation is set out clearly in clause 2(6), and it is right that that is in the Bill. Public investment in R&D must drive long-term socioeconomic benefit and deliver value to UK taxpayers. ARIA will be scrutinised by Government and Parliament on how effectively it fulfils its functions, including that one.
I can confirm that mechanisms for that scrutiny will be in the framework agreement. This includes requiring an internal evaluation framework for ARIA programmes—that deals with the point made by my right hon. Friend the Member for Wokingham (John Redwood)—and looking at, for example, their expected benefits and alignment with the organisation’s strategic objectives. It also includes setting the terms on which ARIA produces annual accounts and reporting, through which ARIA’s CEO will be accountable to Parliament for how the resources allocated to it are used. The National Audit Office will be able to examine the value for money of ARIA’s activities, and we in the Government must be assured of that value, on which ARIA’s future funding will depend. Everyone involved is clear about that.
There are many ways in which the obligations that I have set out might be felt in respect of how ARIA operates. For example, ARIA may employ contracting arrangements that require funding recipients either to seek to exploit the outputs in the UK or forfeit the funding, as other funders routinely do. In some cases, ARIA may retain IP rights—it has that freedom—and will be able to draw on specialist support from the new Government office for technology transfer. That will help ARIA to extract the greatest possible value from its knowledge assets.
In general, we expect ARIA programmes to produce long-term, deep scientific benefits that are felt over the long term, and to support the highest-risk research where there is a clear role for public funding. It would be premature to seek to legislate in statute at this point, before the appointment of the CEO and the chair or the establishment of the funding programme plan. In addition to that being premature, given that its very freedoms will be a major attraction for people to come from around the world to work at the agency, we are concerned that to be seen to shackle those freedoms in statute may well disincentivise the most innovative scientists and researchers from coming to join programmes.
Finally, this issue encompasses the entirety of our R&D system and approach to investment in UK science and technology and we are extremely focused on it, but changes to ARIA alone cannot alter the wider environment. We must ensure that funding from ARIA is not subject to more stringent conditions than other public R&D funders, because that would undermine the independence and agility that are the defining characteristics of this exciting initiative for UK science.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome the Minister to his place in leading on this important Bill and echo his thanks to the former Minister, the hon. Member for Derby North (Amanda Solloway). I also thank colleagues in the other place who have worked so hard to improve the Bill. In particular, I thank my noble Friend Lord Browne for his successful and much-needed amendment to protect Britain’s intellectual property.
The UK has a proud tradition in science and innovation. We are renowned around the world for the scientific breakthroughs and discoveries that have pushed humanity forwards. From the discovery of penicillin to the invention of Stephenson’s Rocket—in Newcastle—UK science has again and again pushed the boundaries of humanity’s knowledge.
UK science is not only inspiring but key to our health and that of our economy, as the pandemic has shown. Our university research base alone contributes £95 billion to the economy, supporting nearly 1 million jobs in science institutes, charities and businesses of all sizes. We have many innovative start-ups throughout the country that require only the right support to contribute to the innovation nation that our history, economy, security and future prosperity all demand. That is why it is so important that we get the Advanced Research and Invention Agency right.
ARIA, originally the brainchild of very-much-former adviser Dominic Cummings, is positioned as a high-risk, high-reward research agency, based on the Defence Advanced Research Projects Agency in the US. Labour welcomed ARIA and continues to support it—it has great potential to fill a gap in the UK’s research and development landscape and help deliver fantastic inventions—but we are clear that the benefits of ARIA’s investments must be felt in the UK. We are equally clear that without Lords amendment 1, that may not be the case.
Lords amendment 1 would give ARIA the option to treat its financial support to a business as convertible into an equity interest in the business and thus to benefit from intellectual property created with ARIA’s support. It would also enable ARIA to require consent during the 10 years following financial or resource support, if the business intended to transfer intellectual property abroad or to transfer a controlling interest to a business not resident in the UK.
George Freeman
To assist the hon. Lady before she decides whether to divide the House, I just wanted to make it very clear that there is a statutory obligation on ARIA, set out clearly in clause 2(6), that it must have regard to
“economic growth, or an economic benefit, in the United Kingdom”
as a core part of its statutory duties. We simply want to make sure that the leadership team, through the framework agreement, have the freedom to set out what the right mechanism is, rather than to mandate it now.
Chi Onwurah
I thank the Minister for that intervention, which demonstrates that he is with us in spirit but he just does not want to be with us in actual legislation. There is something of a confusion of thought there. I am very familiar with the clauses that require ARIA to have regard to economic benefit, but if he thinks this is something ARIA should be doing and should look to do—again, as we have said, this amendment is enabling and not prescriptive—surely he should be happy to make that clear. If he thinks it is too constraining for ARIA to do this, he ought to make that clear. He is the Minister and this Bill should reflect what the intent is, and the intent should be to ensure that the benefits from intellectual property generated, created and invented in the UK should be felt in the UK.
Lords amendments 2 to 8 limit ministerial powers to dissolve ARIA, in response to the delegated powers in the Regulatory Reform Committee’s report on the Bill, and we will not oppose those amendments. They prohibit the Minister from making consequential amendments to primary legislation and from dissolving ARIA in the first 10 years. Lords amendments 9 and 10 remove the Minister’s powers to determine a pension or gratuity for non-executive ARIA members. It should be noted that the Minister appoints non-executive members to ARIA’s board, and it is refreshing to see a Conservative Government taking steps to limit cronyism in advance of major losses to the public purse. Lords amendments 11 and 13 mean that ARIA will no longer be treated a reserved matter in relation to Scotland, Wales and Northern Ireland, and we also do not oppose this. Labour is clear that devolved voices must be heard and that scientific opportunities must be spread across the UK, so the consent of devolved Administrations is crucial.
Lords amendments 12, 14 and 15 provide for ARIA to be treated as a public body under the Income Tax (Earnings and Pensions) Act 2003, the Small Business, Enterprise and Employment Act 2015, the Enterprise Act 2016 and the Data Protection Act 2018. My colleague in the other place, Baroness Chapman of Darlington, pointed out, as did my hon. Friend the Member for Cambridge (Daniel Zeichner), that this would not be necessary if ARIA was subject to freedom of information requests, something that Labour has repeatedly called for. The Government were so busy trying to ensure that ARIA would not be treated as a public body for the purposes of FOI that they had to tack on these amendments. That these amendments were tabled only at the Committee stage in the Lords points to Government negligence. We have here a Government too busy trying to avoid accountability to do their job properly— why does that sound so familiar?
Oral Answers to Questions
George Freeman Excerpts(2 years, 3 months ago)
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Karl MᶜCartney (Lincoln) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
UK leadership in science, technology and innovation is already driving huge investment in new sectors, companies and clusters throughout the UK, from the Newquay spaceport to the Shetlands, and from Northern Ireland to Teesside, Aberdeen and other life science clusters around the country. However, we intend to go further, and following our innovation nation strategy, we are committed to supporting those clusters. I am engaged in talks with my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities, and details will be provided in the forthcoming levelling up White Paper.
Karl MᶜCartney
My hon. Friend may know that a leading example of science and innovation as a key tool in achieving levelling up is the Lincoln Science and Innovation Park in my city constituency of Lincoln, which has been headed by the excellent Tom Blount for a number of years. The aptly named Boole Technology Centre, of calculus infamy, has been a great success to date and continues to expand even further, recently attracting notable international tenants and job providers. What financial support can our Government offer, so that organisations such as the Lincoln Science and Innovation Park can continue to grow and nurture companies such as KryptoKloud, and similar new ones can be created?
George Freeman
I congratulate my hon. Friend, who has been a tireless advocate for the Lincoln cluster. He asked about funding. In the comprehensive spending review, we set out the biggest increase in investment in science and innovation for a generation. Specifically, 34 projects in the cluster are funded by UK Research and Innovation. I look forward to discussing this with my hon. Friend, who has made a powerful pitch for that centre to be recognised as a cluster, and I look forward to visiting it.
Dan Jarvis (Barnsley Central) (Lab)
The University of Sheffield’s new gene therapy innovation and manufacturing centre shows that South Yorkshire can lead the world when it comes to research, but nearly half of all R&D spending goes into the golden triangle. What is the Minister doing to ensure that the north gets its fair share?
George Freeman
That was a great question. The hon. Gentleman is right. In fact, there are several clusters in the Yorkshire area, and in a previous career I myself worked in the Sheffield university cluster, which is very powerful.
Our strategy is that if we wish to be both a global science superpower to attract investment internationally and an innovation nation, we will not achieve that by moving the golden triangle north. What we must do is increase spending in the north, which we are already doing, and grow the supply chains in, for instance, advanced manufacturing. We are not just an invention economy; we are also a manufacturing and innovation economy, and Yorkshire, and Sheffield specifically, have a big part to play in that.
James Gray (North Wiltshire) (Con)
That truly iconic British-built scientific research vessel RRS Sir David Attenborough—built by Cammell Laird of Birkenhead—came up the Thames just before Christmas, at the time of COP26. Does the Minister agree that she is the epitome of all that is best about British science, and that the British Antarctic Survey, through its work in both the Antarctic and the Arctic, leads the world in research on climate change in particular, and in so many other areas of science?
George Freeman
My hon. Friend is right, and he is also a powerful envoy for the Government in terms of our polar science. The royal research ship Sir David Attenborough is something of which all of us in the House can be proud. It is an incredible platform, and it embodies the very best of British leadership in science and innovation, with international scientists working on global challenges.
Valerie Vaz (Walsall South) (Lab)
Will the Minister publish details of the business innovation forum, and how it will hold the Government to account on the distribution of the shared prosperity fund throughout the UK?
George Freeman
Yes. We are in the process of establishing the forum, and I want to ensure that we are talking not just to the same old people whom the Government always talk to but to the companies on the frontline—the leaders of the sectors of tomorrow. In the innovation strategy we set out seven high-growth sectors, and I will publish details of that in due course.
Peter Gibson (Darlington) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
As a result of this Government’s long-term life science strategy, now a 10-year strategy, I am delighted to be able to share with the House that the life science sector has grown, in terms of private investment, by 1,000% in the last 10 years and is creating jobs all around the UK—in Northern Ireland, Scotland, Wales. At the heart of our strategy for the innovation nation, in our life science vision last summer we set out a plan, with £5 billion in the comprehensive spending review of funding for life science research, and we intend to support those clusters all around the UK.
Simon Fell
I welcome the effort that my hon. Friend has given to developing this important policy and his characteristic kindness in engaging with me on it. Clusters will be crucial to improving UK resilience and building our manufacturing capacity. In Ulverston we have an established base with GSK, but I want to see that grow, with new entrants like Lakes BioScience coming in, building high-skilled jobs and the supply chain. With that in mind, may I ask how the strategy will apply to south Cumbria? May I also invite him to the sunlit uplands of Ulverston to visit and see for himself?
George Freeman
I thank my hon. Friend and pay tribute to his tireless campaigning for Barrow and Furness and on this issue. I understand well the concerns following GSK’s movement from the Ulverston site. I would just make this point: quite often such moves of pharma from one site to another create an opportunity. As the Minister for Life Sciences, I launched the life science opportunity zones and we created thriving clusters at Alderley Park and Sandwich; it would be my ambition to do the same up at Ulverston. I very much look forward to coming up and visiting, and my officials are working closely on that as we speak.
Peter Gibson
Central Park in my constituency is furthering Darlington’s ingenious spirit as it drives forward UK life sciences, with firms on our golden mile creating and developing the medicines of the future, as the Secretary of State knows from his recent visit. Will my hon. Friend outline what steps his Department is taking to ensure that firms in Darlington use local talent in the pursuit of further scientific breakthroughs?
George Freeman
My hon. Friend makes an important point about talent and is right that a powerful cluster is taking shape in the north-east. Following my return to the Government two months ago, my first visit was to the north-east. From Darlington to North of Tyne, an incredible cluster is taking shape, with the National Biologics Manufacturing Centre, the Centre for Process Innovation and the National Horizons Centre all in that golden mile in Darlington. It is an incredibly exciting time and I look forward to going back up to see my hon. Friend’s constituency and how we can develop a skills plan so that the sector can grow in the next five to 10 years.
Mr Gregory Campbell (East Londonderry) (DUP)
In his earlier answer, the Minister alluded to co-operation among the various parts of the United Kingdom; will he ensure that there is maximum co-operation so that sites such as the centre for drug discovery, which is linked to the life sciences faculty at the Coleraine campus in my constituency, can maximise their opportunities?
George Freeman
I am grateful to the hon. Gentleman for raising that issue. With Queen’s University Belfast and the Randox cluster, Northern Ireland is a powerhouse in life sciences and both the Secretary of State and I have been to visit. I am delighted that the hon. Gentleman has made that point and will make sure that the Northern Ireland cluster is powerfully at the heart of our innovation strategy.
Rachael Maskell (York Central) (Lab/Co-op)
In York, we want to maintain momentum around the BioYorkshire project—York’s green new deal—so will the Minister set out when the project can apply for funding under the Biotechnology and Biological Sciences Research Council funding regime?
George Freeman
I have had meetings with the hon. Member since she raised this issue previously. We are in the process of allocating—I repeat—the biggest ever increase in science and innovation funding for a generation. Once that process has been completed, we will begin to allocate the money throughout the country. The hon. Member has made a powerful intervention on behalf of that cluster, which I am going to come up to see. There is an exciting cluster of companies in the York, Harrogate and east of Yorkshire area.
Richard Fuller (North East Bedfordshire) (Con)
The Minister is absolutely right about the overall success of the Government’s life sciences strategy, but he will be aware of the chilling effect on UK manufacturers, including one in my constituency, of the outcomes of the coronavirus test device approval process. I know the Minister is a believer in agile regulation, so will he conduct a review, with the UK Health Security Agency, to understand what lessons can be learned to assist UK manufacturers in future?
George Freeman
As per usual, my hon. Friend makes an important point. I am not the Minister responsible for the vaccine taskforce, but I am already reaching out to my colleagues at the Department of Health and Social Care on that very point to make sure that in the light of this pandemic we boost our manufacturing centre as well as our research.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
British life scientists led the world in the battle against covid, and we need them to lead the fight against another great health challenge: dementia, which destroys so many lives and imposes huge private and public health and social care costs. This month, research published in The Lancet found that by 2050 worldwide dementia cases will treble and cases will go up by 75% in the UK. That is why Labour is promising to double research and development spend on dementia—a commitment that was also in the 2019 Conservative manifesto. Will the Minister confirm that dementia R&D spend has gone down since his Government took office?
George Freeman
I agree with the hon. Lady that that the dementia research and treatment sector is incredibly important, which is why, when then Prime Minister Cameron set up the G20 summit, I was incredibly proud, as Minister for Life Sciences, to launch the UK Dementia Research Institute. In the CSR, we announced another £340 million for motor neurone disease research. As I say, I am in the process of allocating the biggest ever R&D increase and we will look to make sure—[Interruption.] The hon. Lady is heckling me from a sedentary position; perhaps she will listen. We are in the process of allocating that money to make sure that dementia gets the recognition that it needs.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
To ensure that our fantastic life science sector continues to prosper and lead the world, we need to inspire the next generation of life scientists. What more can the Minister’s Department do to show that there is a place for everyone in the sector, regardless of race, background or gender, and that their future efforts could change lives both at home and abroad and tackle some of the great challenges that we know exist.
George Freeman
Not surprisingly, my hon. Friend, who is an expert in this field, makes an important point. In the people and culture strategy that we set out this summer, we make that very point: we need to build a diverse eco-system. I have already reached out to the Royal Society and picked up and commended its work on science, technology, engineering and maths and diversity in the sciences. The truth is that our science sector is creating opportunities all around the country, and we are absolutely committed in the innovation strategy to make sure that every community in this country has access to those jobs and opportunities.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
Post Office Historical Shortfall Scheme
George Freeman Excerpts(2 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I am grateful, Dame Angela, for the chance to serve under your chairmanship. I congratulate hon. Members for their contributions today and the right hon. Member for Orkney and Shetland (Mr Carmichael) for raising the matter. I am here with apologies from the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), who has been called into the House on primary legislation elsewhere. However, I relish the chance to respond on behalf of the Department for Business, Energy and Industrial Strategy, having experienced in my constituency the appalling injustice that the sub-postmasters suffered.
In one village in my constituency, Gressenhall, I saw the misery, the family disruption and the hell, as referred to by hon. Members, that the sub-postmasters were put through in a frankly disgraceful episode of institutional contempt for the little guy—if I can put it like that—at the bottom of the system. I am pleased today that, as hon. Members have remarked, we are announcing through a written ministerial statement—there will be an oral statement, subject to the Speaker’s permission, tomorrow—the Government’s commitment to fully fund the historical shortfall scheme and the losses for those who have not yet been compensated.
Kevin Hollinrake
The Minister makes a fair point, but so does the right hon. Member for North Durham (Mr Jones). The scheme excludes those who took part in the group litigation. That is entirely unfair and unjust. Lee Castleton, who is not one of my constituents but somebody I have tried to help through a third party, got £28,000 in compensation but he lost more than £400,000. That is simply unfair and that route for compensation cannot persist.
George Freeman
I thank my hon. Friend for that intervention. My hon. Friend the Member for Sutton and Cheam is the lead Minister on this matter and I will raise that with him. For the record, I want to make clear what has happened. Those who settled have a settlement. Today, we are tackling the issue of those who were not subject to a settlement. Nevertheless, my hon. Friend makes an important point. This must be fair and it must be seen to be fair.
I want to begin by echoing the Government’s support for the point about culture. It is vital that the painful and difficult lessons from this disgraceful saga are properly learned. Let the message go forth from this Dispatch Box that we expect the Post Office to tackle that culture change properly. I am delighted that there is a culture change programme and two new non-executive directors. However, this is not a tick-box exercise; it is a serious commitment that an organisation wholly owned by the taxpayer delivers properly and learns the lessons from this disgraceful saga. I dealt with the issue when I was a Minister in the Department in the coalition Government in 2015. I saw what seemed to me to be institutional obfuscation and institutional defence of injustice. All those who conspired in that should hang their heads in shame.
The right hon. Member for Orkney and Shetland mentions a law firm. I signal that some lawyers have stepped up to the mark on this and in particular Patrick Green QC at Henderson Chambers, who worked pro bono to help many of the sub-postmasters; Neil Hudgell at Hudgell Solicitors; and Freeths, who did tremendous work speaking up for those who did not have a voice. It is only because of the bravery of those sub-postmasters and their lawyers that we are where we are today.
It is good news that we have announced that funding, but I do not want to focus on that today. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam, has campaigned hard on it and he will speak to the House tomorrow. However, I want to set the record straight on where we are today for those watching or reading this debate. As everyone in the Chamber will be aware, the Post Office introduced the Horizon scheme in early 2000 and subsequently recorded shortfalls in cash at post office branches, which the Post Office then blamed on sub-postmasters—completely unfairly, it subsequently turned out. That resulted in horrific suffering, not just in losses for the small businesses being run by the sub-postmasters, but family losses, divorces, depression, mental health problems and anxiety, not to mention the loss of a facility in many rural areas that is crucial to the community. Many people were sent to prison. That is an absolute disgrace. It is important that the lessons are learned properly and that the culture that conspired to allow that to happen is seriously changed.
In 2017, a group litigation order was brought against the Post Office by the 555 postmasters. The postmasters won two landmark trials in 2019 and reached a settlement with the Post Office for £57.75 million. Those court cases and subsequent cases in the Court of Appeal have demonstrated just how wrong the Post Office was to behave in the way it did. It has apologised, and is now working to overhaul its culture to address the findings of Mr Justice Fraser.
Mr Kevan Jones
The postmasters had to settle because they ran out of money. My constituent Tom Brown got £20,000 in compensation; he paid £86,000 back to the Post Office. Can the Minister tell me where that £86,000 is, and why Tom is not entitled to get it back?
George Freeman
The right hon. Member makes a really important point. I will raise that specifically with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam, and perhaps he can address it in his statement tomorrow. On behalf of the Government, I express our deep sympathies to those sub-postmasters mentioned today—to Tom and to those in Scotland, York and around the country. This is an injustice that must urgently be tackled.
Mr Carmichael
The best way to demonstrate a change of culture and good faith would be for the Post Office to start the whole process again from the beginning, instead of insisting that people who have made applications under a flawed process will have to see them through to the end and get less than they are entitled to as a consequence.
George Freeman
I understand the point that the right hon. Member is making. Let me include, for the record, the history of how we got to this situation. As part of the 2019 settlement, the Post Office committed to putting in place a scheme for those postmasters who were not part of that settlement and did not have criminal convictions related to the Horizon scheme. The historical shortfall scheme was set up to meet that commitment, and it is an important step. It opened in May 2020 and closed to applications later that year.
To be fair, the Post Office made significant efforts—quite rightly—to reach out to all postmasters, sending 7,000 individual letters to current postmasters and a further 20,000 to former postmasters. It is fair to say that the Post Office was quite surprised—I do not think that any of us in this room will have been—by the response. The scheme received over 2,300 eligible applications. I hear the points that the right hon. Member for Orkney and Shetland made about the nature of that form. Because I am not the lead Minister on this, I have not looked at it, but he makes an important point, which I will raise with the Minister. The form needs to make clear to people what they are entitled to and needs not to discourage them from understanding their rights, the enforcement of which is long overdue.
The response to the HSS meant that the cost of the scheme went beyond what the Post Office could afford, and it turned to the Government as its 100% shareholder. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam, has set out that the Government will provide sufficient financial support to the Post Office to ensure that the historical shortfall scheme can proceed properly and that those people are fully compensated. I understand that that raises a question about the fairness for those who settled out of court, which is a point that the Minister will no doubt want to address. The Post Office is contributing from its own funds.
Kevin Hollinrake
If the estimate is £300 million and there are 2,300 applications, that is £130,000 each. Lee Castleton got £28,000. The constituent of the right hon. Member for North Durham (Mr Jones) got £20,000. That just cannot be right.
George Freeman
My hon. Friend makes a powerful point, which I am sure that the Minister will want to address. I want to mention the question of speed. When the Government step up and say, “We will fully fund this,” it is incumbent on the Post Office to pull its finger out and get on with processing claims more quickly. I understand that the intention is that the vast majority of applications will be claimed within months, by the spring, and all of them will be claimed within the year —and that is long overdue.
I will close by picking up on a couple of the points that hon. Members have made. I will ask the Minister to write to the right hon. Member for Orkney and Shetland about the board. The hon. Member for Strangford (Jim Shannon) made the same points about his constituents. With the right hon. Member for North Durham (Mr Jones), I share the Government’s apologies to Tom Brown and others in his constituency, and I take the point about lessons for Ministers and for the Department for Business, Energy and Industrial Strategy. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made a very good point; we cannot have unaccountable quangos marking their own homework, and there are really important lessons about accountability.
It is good news that the Government are making a commitment to fully fund the HSS, but there are other issues that still need to be sorted so that this never happens again and that the injustices are properly resolved.
Question put and agreed to.
Copyright (Rights and Remuneration of Musicians, etc.) Bill
George Freeman Excerpts(2 years, 4 months ago)
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Pete Wishart
I was waiting patiently for my colleague, the third member of MP4, to get to his feet today. In response to a question about whether Ringo Starr was the best drummer in the world, John Lennon is reported to have replied, “He’s not even the best drummer in The Beatles, ” but let me say to the right hon. Gentleman that he is the best drummer in MP4. He is absolutely right that the Bill really needs to get to Committee so that we can ensure that it is properly debated, because the model is not working—the model is broken.
Let me say to my hon. Friend the Member for Cardiff West that the equitable remuneration model is the very least we should be doing. It is a start in terms of addressing some of the inequities and musicians getting a just share for the music they produce. What I do not understand is the resistance to what is a very modest proposal to address this issue. I cannot think of any other way that we could address it. The Select Committee spent hours and hours and months and months looking at this issue, trying to find another solution and another way forward, but none was forthcoming.
The music industry did not give us any suggestions or ideas when it was asked about this. It did not even give us the data required—I think that DCMS had to pay for the data from the BPI in order to get it. The industry has not engaged with us; it has not come up with solutions. The only solution on the table is the modest proposal from my hon. the Member for Cardiff West for an ER distribution regime that could apply to streaming.
What I do not understand is why the Government have not taken it on board enthusiastically so that we can get the Bill into Committee. Let us get all the partners together. It is not good enough for the BPI and the labels to stand aside and not look at this issue properly. I am confounded and bewildered by the objections from the Association of Independent Music. I thoroughly do not understand them, and I will have to speak to the association, because it has to try to make it clear to me how independent music providers, producers and record labels are being disadvantaged. I just do not see it, and I am bewildered as to their objection to this proposal.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
On what basis, I am keen to ask, does the hon. Gentleman think the Government are resisting the proposal, seeing as I have not spoken yet?
Pete Wishart
I am perhaps getting ahead of myself. I am really grateful for that intervention from the Minister, because it is extremely helpful. I know he is a fair-minded and consensual Minister—one who tries to build consensus across the House. This is a great opportunity to do that, because I think he will hear from hon. Members today that there is a lot of enthusiasm for the proposal. It is a means to fix a problem that needs resolving. I am grateful to him, and I will listen very carefully to his remarks.
Let me finish by saying that this issue needs to be sorted. I have waited 20 years for a Bill like this. I have been in the music industry and seen exactly what it is like. It is a field of dreams: if someone makes it big, they can escape and evade their background and go on to huge success and riches. It is an amazing industry and great to be part of. As a musician, I woke up every day thrilled about what I was doing: walking on to a stage with people cheering—not like in the Chamber, with everybody baying and aggressively intervening. Those were different days indeed.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
It is a great pleasure to be here today. Is not this a wonderful example of what Fridays are for—a proper cross-party debate that tackles a serious issue? I pay tribute to the hon. Member for Cardiff West (Kevin Brennan) and the Select Committee for their substantial report in the summer; I assure them that I and officials in DCMS and the Department for Business, Energy and Industrial Strategy have read it carefully. Indeed, it is because of that report that we are having this debate today.
I pay tribute to all colleagues who have spoken so far. I know that more want to speak, but I wanted to take this opportunity to set out the headlines of the Government’s response for Opposition Members before they decide to respond. I cannot pay tribute to everyone who has spoken, but I particularly want to mention: my right hon. Friend the Member for Maldon (Mr Whittingdale), who is a former DCMS Secretary and was a distinguished Chair of the DCMS Select Committee, whose comments were important and well noted; and my hon. Friend the Member for Warrington South (Andy Carter), who demonstrated his experience in the industry. I also thank a whole range of voices to which I have been listening carefully. The tone of the debate has been extremely welcome, and I pay tribute to the hon. Member for Cardiff West for bringing the debate to the House in that way, with this level of cross-party engagement. It is all to the good and this is what the public expect us to do on a Friday in private Members’ business: come together and tackle key issues.
I am responding on behalf of the Government as Minister for Innovation at the Department for Business, Energy and Industrial Strategy, and Minister for copyright and intellectual property, which is what the Bill before us actually amends in law. I am here as a member of a Government who are taking this issue seriously, especially through my Department working closely with DCMS.
One of my primary responsibilities is for innovation across Government, so I want to put this issue in the context of the broader opportunity for digital innovation in the economy, including through the deep digital technologies of AI, quantum and such technologies, which I am looking to support through our science and innovation budget. We should also look at this issue with reference to the role of important digital clusters—the gaming community and others—that are driving innovation in medical technologies and a whole range of other parts of our digital economy. Indeed, earlier this summer, I took the Big Tent Foundation to Coventry, where we were joined by the Secretary of State for BEIS, to celebrate the work of the often unseen digital entrepreneurs in the gaming cluster, who are not often seen in the newspapers, but who are driving huge investment, innovation, and opportunity for people to engage in the digital economy.
It was for that reason that yesterday at the levelling-up Cabinet committee, we had a long conversation about the importance of the digital creative sector in supporting opportunities around the economy. Many of our now most celebrated digital and technology clusters started with strong cultural, artistic and musical elements. In fact, silicon valley started in the ’60s as a home for non-conformist, free-thinking, fresh-thinking entrepreneurs, before the term was really widely understood. It was the lifestyle, the surfing and the music that laid the foundations for what is now the world’s greatest technology cluster. Similarly, in Cornwall we are seeing the merger of lifestyle and recreation tech entrepreneurs linked to surfing and music. Music is not just in a silo.
I am also here in a personal capacity. My family has substantial interests in the industry, although I am not declaring commercial interests, as I have none myself. My brother works in the film industry, where people are better paid. It is a bit feast or famine. When there is a film, people tend to get paid pretty well, and between films it is a bit famine-ish—but they are paid well in general. My wife is a theatre director. People in theatre are paid rather less well than in film, although many of them sometimes work in films, if they are lucky.
In our house, we have a lodger who is a family friend. He is a nocturnal entrepreneur —I see him only at the beginning and end of the day—and I asked him the other day, “What are you doing upstairs?”. He is a digital music entrepreneur, making music at night. I asked him how the streaming sector is working. His response was very interesting and I want to share it with the House, as he said: “If it wasn’t for Spotify, no one would know me. I’m using the streaming platform to get noticed. I don’t make any money out of it, but what happens is that people then pick me up on TikTok, they pick me up on Instagram, they then reach out and message me.” He said, “I’m now selling cassettes”, at which point I looked at him! I am old enough to have had a collection of cassettes—indeed, when I bought my last car but one I was worried that there was not a cassette player and what I was going to do with my old cassettes. Then I had the same problem with my CDs. I looked at my lodger and said, “Cassettes?” and he said yes. As colleagues around the House more knowledgeable than me have highlighted, there is now a huge market in cassettes, as indeed there is in the renaissance of vinyl.
My lodger has used the streaming sector to create a footprint for himself, but of course what he really wants to be able to do is fill venues. When I asked, “Could you fill a venue here in London?” he said, “I could half-fill one in London, but I could fill 10 venues in Los Angeles.” I think that speaks volumes about the level of global digital entrepreneurial activity going on in this country—of course, the pandemic has robbed many of our musical artists of those venue-related, event-related incomes—and highlights a lot of the issues that the Select Committee has rightly brought to the fore about the impact of the level of digitalisation in the music industry.
My headline message is that we in Government want to view this area as a creative industries ecosystem, and make sure that Britain is the best place in the world for musicians to practise, innovate and create, recognising that we are in an incredibly competitive global environment; nobody wants to pass a well-intended law that inadvertently undermines the UK’s position as a leading centre. In this debate, we need to think about the artists—in this case, the musicians—and the labels and the platforms, as well as the relationships among those three in creating a functioning, vibrant, innovative and, indeed, profitable ecosystem in which revenues are distributed fairly and in a way that leads to UK leadership.
My commitment, on behalf of the Government, is that we will take this moment, with the report and this very well presented Bill, to do what many in the House have urged us to do, which is to look quickly—not to delay, but to look quickly—at all of the issues and the impacts, and make sure that we frame a Government response that does not just deal with the immediate issue today, but means that our successors in this House in 10 or 20 years’ time say that this Parliament got it right and tackled it in the right way.
That is really about, yes, fairness. Fairness is an important word, and I think an important value that most people listening to this debate, who may not understand the complexities—and, boy, there are many—of the modern digital music streaming ecosystem, understand. People understand that fairness does not mean everybody being paid the same amount every day, which tends to lead to a communist society in which very little is to be distributed. Fairness means that people are rewarded properly and appropriately for their part in an ecosystem, reflecting the role of others and of competition. It is also about making sure that the UK remains a powerhouse in the global digital ecosystem, and in particular that our musicians, on which this Bill focuses, are properly rewarded.
I want to highlight that “musician” is one word but covers a multitude of different people—singers, bands, DJs, instrumentalists, non-featured artists, session musicians, backing singers, lyricists and composers. There is a huge range of people, and before we legislate we just need to be cognisant that we will be legislating to shape their lifestyles and their livelihoods. It is part of my responsibility as a Minister to make sure that we listen to all of them, even those who are not so noisy, and make sure that, before we change the law, we are cognisant of any unintended side effects. We need to make sure that all musicians are benefiting from the UK legal framework, and not just be pushed by one group without being cognisant of the effects on others.
I also want to highlight—indeed, I did not know this before preparing in the last two or three weeks for this debate—how musicians actually make their money. If we look at the data, we see that, at 31%, live performance is the main revenue stream. That has of course been hit very hard by the pandemic, which is what has brought this issue to the fore. Then there is teaching of music at 9%, audio streaming royalties at 6%, physical sales at 5%, digital sales at 5%, sessional orchestral work at 5%, broadcasts at 5%, public performances at 4%, commissions for stage at 3%, merchandise at 3%, video streaming royalties at 3%, and a whole raft of others. The truth is that there are multiple revenue streams for most musicians, and some of course only receive some of those, but we need to be cognisant of the broader musician revenue stream, and indeed of how complex it is, before we legislate.
When a song is streamed on a service such as Spotify, revenue from that stream flows through a streaming value chain that has taken shape in the past few years. At the start, the streaming service takes its cut, which is typically around 30%, although there is no industry standard, and the rest is split among all the other parties back down the supply chain. People’s ability to negotiate depends, of course, on their strength in the market. I dare say that if I produced a piece of music, my negotiating power in the market would be very weak, whereas the band led by colleagues here in the House have established that they have an audience and a market. I pay tribute to their work in not only using those revenues to support charities but in highlighting issues in the House.
It is and should be a competitive market. I think we would all accept, as people who make their living on their feet, speaking to issues, that if we went to Hyde Park corner, some of us would attract bigger audiences than others. I do not think we would pass a Bill that compelled the public to listen to us all for the same amount of time with the same level of interest. We cannot legislate for that and we all know that. We do, though, want to make sure that successful artists who generate quality music are rewarded properly.
We accept that there is a problem and we accept the fundamental case made by the Select Committee. We have already started by launching the Competition and Markets Authority. The industry is very vertical, if I can put it that way, and we want to make sure that the revenues flow fairly and there is no anti-competitive practice. We are also looking, through the Intellectual Property Office, at how other countries have done it: there have been a number of reforms around the world and we want to be sure that we have collected the data on any reforms that have worked positively for musicians across the board and on those that have had negative effects.
In the past two weeks, I have had extensive meetings with the hon. Member for Cardiff West, in a positive spirit, and with colleagues on the Government Benches, including my right hon. Friend the Member for Tatton (Esther McVey), and around 40 or 50 other colleagues who have taken interest. I have also taken the time to meet people in the industry.
Before colleagues decide how they wish to proceed, they should know that views are very mixed. I have had 50 submissions this week that I was reading late last night. The Association of Independent Music accepts the Select Committee’s case that there is a problem, but does not accept that
“the solutions this Bill proposes will lead to the outcomes its supporters hope for—and the Bill risks damaging independent music”
by making
“the UK a less attractive place to invest and record”.
The British Phonographic Industry said:
“The Bill is premature in rushing to a legislative solution before the market impact…has been properly explored”.
We have had submissions from a huge range of hugely creatively and entrepreneurial UK labels. I will not even begin to read out the whole list, but I have here a letter with at least 20 logos on it. In November, a group of them wrote to the Prime Minister: “We are writing as a group of British independent record labels concerned about the unintended impact”—I do not think anybody has any doubt about the intent behind the Bill or, indeed, the Select Committee’s work behind it—“on our industry of the copyright Bill that is due to be debated in the House”. They urged us not to accept the Bill quickly as it is written but to take it as a spur, as the hon. Member for Cardiff West himself urged, to do the necessary research.
Jeepster Recordings, which is based in Hackney, wrote to the right hon. Member for Hackney North and Stoke Newington (Ms Abbott) to say:
“I am writing to you from Jeepster Recordings in Stoke Newington. We are an independent record company based in your constituency. We began in 1996 and have a very small creatively successful back catalogue which includes the early Belle and Sebastian and Snow Patrol albums…We have deep concerns about the impact of this Bill on the future of our business and feel that there are parts of it that, if approved, will destroy a business we have managed to keep going for 26 years…As with a lot of small labels, we invested a large amount of money in our artists and struggled as a company at a financial loss for several years whilst promoting them in a market skewed in favour of the major labels”,
which is the point that the Bill seeks to tackle.
We are keen to make sure that we get this right and pass a piece of legislation, if that is what it takes, or work with the Competition and Markets Authority to put in place the right measures to make sure that the industry—the labels—respond in the right way. Ultimately, before the long and slow process of legislation, we would like to find an industry solution, if we can, which is why we have brought together a series of working groups with industry to start to put feet to the fire and ask some hard questions about what they are doing to make sure that we properly remunerate artists.
Graham Stuart
There is huge interest and real concern across the House about getting this right. Often the House comes together like this on an issue, but then somehow in the Government it goes into the sidings. Can the Minister reassure all colleagues across the House who want to see action that he and the Government are committed to taking it forward energetically?
George Freeman
I am grateful to my hon. Friend, a distinguished Back Bencher and former Minister, for raising that point. I myself have had private Members’ Bills, including ten-minute rule Bills, adopted by the Government; I have withdrawn them on the basis of an undertaking from the Minister. I have spoken to the hon. Member for Cardiff West, and obviously I understand that he wants to make his point, but I ask politely at the Dispatch Box, for the record, whether he might be prepared to withdraw the Bill today, work with me on tackling the measures in it, and bring it back in due course if he feels that the measures that I have put in place are inappropriate.
Kevin Brennan
I thank the Minister for the approach that he is taking. We have discussed the matter before, but I think that it is important for the Bill to have at least a chance to proceed into Committee. This is a long process, as he says, and the Government control the timetable, so my view is that the Bill is a bus that he could reupholster along the road to make it fit for purpose so we can all agree on it, and that the House should have the opportunity to express its opinion. I know that he understands that.
George Freeman
I totally understand that the House will want to have a chance to express its opinion. The hon. Gentleman knows well that the private Member’s Bill process is not an ideal process for us to do the work we need to do in government. We have launched the Competition and Markets Authority work and we have a series of workstreams that I will describe in a moment. I would like to think that over the next few months—
Mr Perkins
I appreciate the positive narrative that the Minister is giving to the Bill, but I am very concerned about what he said about Spotify and by the sense that Spotify offering exposure to musicians ought to be enough so that they can go and make their money elsewhere. Surely there should be a real commitment that there will be a fair relationship and these major, powerful organisations will offer more than just exposure.
George Freeman
As I think the record will show, I was not actually suggesting that that in itself is always enough; I was just making the point that Spotify and other streaming services have provided a platform for many artists who would not otherwise have had a chance to acquire any following. The hon. Gentleman is right that we need to ensure that revenues are flowing fairly, which is why we have launched the Competition and Markets Authority work. The Intellectual Property Office in my Department is looking at other countries and we have set up a number of taskforces, which I will describe.
Before the House decides whether to force the question whether the Bill will proceed, I want to answer the point about our commitment.
Mr Whittingdale
Concern has been expressed on both sides of the House about the value gap issue, which relates particularly to YouTube versus some other streaming services. In its response to the Select Committee, the CMA said that while it recognises that issue, at the moment it does not think that it should fall within the measures that it takes through the digital markets unit. Will the Government’s examination take into account concerns about the value gap and the proportion that is being taken by the platforms?
George Freeman
I am delighted to give that undertaking. My right hon. Friend makes an excellent point. We will be looking not only at the CMA’s specific remit on competition, markets and anti-competitive practices, but more broadly at the value chain. We need to make sure that there is a proper ecosystem; not everyone will be able to get equal remuneration, but we want to make sure that the market is working and is fair. Yes, we will be looking at that.
Sir Greg Knight
The Minister has indicated that he is not very happy with the Bill as a vehicle for taking action, but he also says that he accepts that there is a problem. Could he be more specific about his timeframe for action?
George Freeman
Yes, I was just coming to that. We have already started work through the CMA, the Intellectual Property Office and the taskforces that I will describe in more detail in a moment. The Secretary of State for Digital, Culture, Media and Sport and the Department for Business, Energy and Industrial Strategy have agreed that we want to get information back within a matter of months and come back to set out the Government’s proposals within a matter of months. We aim to come back with a substantive response in the summer—certainly no later than September. It slightly depends on what we hear, but if we can avoid legislation and solve the problem in some other way, that will be our first instinct. Indeed, I want to make it clear that if we conclude that legislative change is the only way to achieve what the House is looking for, that is very much open to us. However, our instinct is not to rush to introduce a private Member’s Bill to solve the problem, however well intended the measure, but to do the work and come back quickly to the House with a set of proposals. If that suggests that we need to make legislative changes, we are open to doing that.
I shall begin to set out the specifics of that work and what we are doing, and make it clear that the point about fairness that has been made by colleagues across the House sits at the heart of that. We want a fair streaming environment in which the UK music industry can thrive and artists are properly rewarded. Fairness is a broad concept, and one to which we can all sign up, but it has many different aspects in this complicated industry. The Bill proposes a number of specific measures aimed at making the streaming environment fair, which we think is a laudable aim, but it is simply not yet clear that the impact of all those measures has been fully assessed or whether there are others that do not require legislation but which might have a similar impact. We have not ruled out legislation to introduce any of the measures in the Bill or indeed others, should our work suggest them, but we are concerned that interventions such as this made at pace could have—and, indeed, we think would have—significant consequences across the industry, as the correspondence that I have flagged has indicated. We do not want to cause a crisis of confidence in the UK digital music sector, and cause a disinvestment, creating a bigger problem by moving too hastily without taking the chance to listen to all those who have a stake.
We have to get this right in a complex ecosystem and supply chain. The first step is to gather proper evidence from all of those who have concerns before deciding what Government action we will take. If the hon. Member for Cardiff West, a distinguished former Minister, was in my shoes he would be saying something very similar. To that end, we have commissioned research, as I say, into a number of measures from the Competition and Markets Authority and the Intellectual Property Office, and we are liaising with industry stakeholders. We want to work closely with industry and, as it is watching this debate closely, I wish to make it clear that we think that there is a problem. We want to make sure that we get it right, and we want to work with it to get the right measures in place. We would prefer that not to be legislative, but if we cannot find a solution with the industry we hold open that opportunity. We are not saying today that we will not legislate—we will if that is the right thing to do.
In spring this year, we will consider all the evidence that we receive and will think through how we need to respond. That will include consideration of measures on all the elements in the Bill: equitable remuneration, contract adjustment and the right to recapture works, as well as other possible market interventions. I want to make it clear that I am working closely with the Minister for Media, Data and Digital Infrastructure and, indeed, the Secretary of State for Digital, Culture, Media and Sport, who is a distinguished author and has a strong understanding of the issues of royalties, as well as the Secretary of State for Business, Energy and Industrial Strategy. Our aim is simply to ensure that the UK is the best place in the world for musicians to come and practise and find audiences globally, and to harness the benefits of digitalisation, because we have created an ecosystem that is fair, innovative and competitive, both for individual artists and for the UK. To do that, we think that it is right to consider these issues sensibly and properly, as one would expect a Government to do.
This week, I have spoken to about 40 colleagues, and I have probably heard another 40 today. It is great to hear from colleagues from all parts of the House. Even the Scottish nationalists have paid tribute to the Government’s listening on this, which is a nice thing to hear. I attended the Government’s music stakeholder contact group on Wednesday, and heard the views of 11 stakeholders. I am grateful to them and to others who have contacted us this week with their thoughts. I have had a constructive meeting with the hon. Member for Cardiff West, who—I want to pay tribute to him again—is a passionate advocate. We would not be having this debate if it were not for him and colleagues on the Select Committee.
Interestingly, today is the birthday of Ozzy Osbourne, the former lead singer of Black Sabbath, who, through the power of music, overcame learning disabilities and a difficult upbringing to become one of rock’s elder statesmen. That speaks to the power of music, not just to give us all joy but to create opportunities for people who might otherwise struggle. Today is also the anniversary of the release in 1984 of Band Aid’s “Do they know it’s Christmas?”. It is a day that I will never forget, because I played football for 24 hours, listening to that one track. It is ingrained in the very DNA of my subconscious as a result.
This is a good day. I also reflect that this is not the first time that the House has considered the issue. I am old enough to recall Tim, now Lord, Clement-Jones’s Live Music Bill in another place, testing parliamentary support on more than one occasion before the then Government were evidentially satisfied that they could support a version of the Bill becoming the landmark Live Music Act 2012. It is worth recognising that we are not the first group of parliamentarians to consider this issue, but the pandemic has revealed the urgency of our dealing with it. That is why I have given the response that I have. Let me be clear that the Government do not rule out legislation; we are just not prepared to rush to adopt a private Member’s Bill without working with all stakeholders, including the hon. Member for Cardiff West. He may want to force a vote, but I hope that he hears my commitment in good faith to work downstream.
The key is evidence-based policy making—and, Mr Deputy Speaker, you would not expect me, as a science Minister, to believe in anything else. These are far-reaching measures for which the Government must build the evidence base so that we are satisfied that what we propose is right. It is also so that, in terms of transparency, people around the country can see that we have listened to all the stakeholders and taken a balanced view. To intervene now without first doing that would be rash.
The UK music industry is, as many colleagues have said, at the heart of our arts and culture sectors and, from the Beatles to the Rolling Stones and from Ed Sheeran to Stormzy, it is the envy of the world. There are also a whole lot of names who I had not even heard of but who have huge digital followings around the world. It is hard to overestimate the value of the sector.
I will share some statistics that are worth thinking about. In 2018-19—pre-covid—the UK music industry contributed £5.8 billion to the UK economy, up 11% from 2018. That suggests that the industry is in pretty rude health: it is growing and expanding. In 2019, pre-pandemic —this is quite interesting—the median reported income for musicians currently signed to major record companies was £51,000, for musicians signed to independent record labels it was £20,000, and for self-releasing artists it was £13,000.
The challenge that we all face is how we ensure that we create an ecosystem in which those hitherto unknown, often young—but not always young—independent breakthrough artists get the benefits of digitalisation and streaming to help them generate revenue in myriad ways. Sadly, the “Music creators’ earnings in the digital era” report found no evidence that there was ever a time when recorded music was the basis of substantial income for most musicians, even in the 1990s when revenues in the music industry were higher. It is difficult to compare the number of musicians who can earn a living from recorded music in the streaming era with the download or CD eras—let alone the tape era—because of the difficulties in assessing data.
One commitment I want to make to the House today is that we are looking to collect data both in the UK and internationally so that we can make policy on the basis of actual fact about the impact of reforms around the world. Of course, the Americans made reforms recently, and there have been others in other parts of the world. A key part of this dynamic sector is independent labels such as Rough Trade, Domino and Beggars Banquet—there are so many that I could not list them all, and I do not intend to. We want to continue to support them, and when they write to say that they are worried that the Bill—well intended though it is—will undermine them, we are concerned. [Interruption.] I thought that an hon. Member wanted to intervene.
Let me turn to the level of Government support for the sector.
George Freeman
I am conscious that time is short, and I know that there are colleagues who still want to speak. Let me just spin through the key points that I have not yet made.
First, let me highlight the level of the Government’s support for the creative industries sector, and particularly our musicians. We have set out the creative industries sector deal, the creative sector tax reliefs, the film and television production restart scheme and the culture recovery fund, and the Chancellor’s plan for growth sets out a major long-term commitment to the sector, which we calculate contributes approximately £116 billion to the UK economy. At the recent Budget the Government announced £42 million to support our creative industries, and we include in that the small and medium-sized enterprises at the heart of film, music and video games—that broader nexus of digital entrepreneurship.
I want to touch on the impact of the pandemic, which as the Select Committee highlighted has really brought the issue of the very vertical nature of digital revenues to the fore, because musicians have not been able to have the venue events they would have had before. I make the wider point that the urgency of getting through this pandemic and defeating it is key to no one more than to our musicians. It is a joy to get back to listening to some live music, and long may that continue.
Looking at the impact of covid, for the most part, the recorded music industry stood up reasonably well during 2020. The BPI reported revenues from streaming growing to almost £737 million in 2020, which is a 15% increase during the pandemic, with smartphones, smart speakers and music streaming services providing unprecedented choice for consumers. I will not list all the music that I ended up listening to throughout the pandemic—the House has got better things to do than listen to my music tastes. However, when I listen to Bob Dylan on Spotify, it says, “If you like that, you’ll like this”, and I found myself discovering—I have pretty predictable music tastes—a whole range of artists I had never heard of, and listening to them. That highlights to me the role of digital streaming platforms, notwithstanding the need for equitable distribution, in highlighting artists who I would certainly never have heard of.
The Government are providing a whole series of support for the benefit of musicians: employment schemes, grants, loans, a reduction in VAT to 5%, business rates relief, and the extension of the moratorium on commercial evictions for business tenants, but before the hon. Member for Cardiff West makes it for me, I accept the point that many musicians at the bottom of the supply chain are not earning enough to qualify for tax in the first place.
Sector-specific relief included the culture recovery fund. That was the biggest arts funding package in our history, and the Chancellor made available £2 billion at speed, with awards to more than 800 music-based organisations. That helped to stop more than 130 of our most loved and enduring grassroots music venues having to close their doors. We also put in place the £800 million reinsurance scheme and I am delighted, as I am sure all Members are, that we can get back to live music venues, and indeed to live theatre and pub theatre. One-man and one-woman shows, or shows with a small cast, that are totally covid compliant have been a joy, and one of the unintended consequences of the ghastly pandemic.
I want to touch quickly on copyright law, to which the Bill makes a series of important reforms that are potentially impactful on everybody affected. We in the UK are proud of our copyright law, and no one more than the Minister responsible for copyright. Our 1709 Statute of Anne was the first copyright Act in the world, and today the UK is a world leader in copyright law and intellectual property enforcement. We are determined to continue to explore and modernise that, and I welcome the new chair and chief executive of the Intellectual Property Office, with whom I am working closely to ensure that we keep up with the pace of digitalisation.
In the time available I want to touch on the importance of ensuring that copyright enforcement is properly tackled. We recognise that we are a leader in that at the moment, but the rise of music streaming is a good example of how attractive new services, together with a strong focus on enforcement and education, can transform an industry that has been beset by copyright piracy. We are determined to tackle the problem of piracy, and not just those of us who remember recording “Top of the Pops” on a cassette in the 1970s, which is a low form of that—I would not say it is harmless, but as the former Chair of the Select Committee made clear, probably all of us old enough to do so did it, and it was wrong.
However, the level of industrial piracy going on is far more serious, stealing revenues from our artists. That is why the Government continue to invest in our dedicated Police Intellectual Property Crime Unit—PIPCU—which is the first of its kind in the world. It exists to protect creators and brand owners, and the unit, run by the City of London police, is dedicated to tackling serious and organised online piracy and counterfeiting that affects digital and physical goods. The Government’s upcoming infringement strategy will set out a new framework, allowing us to react more quickly and effectively to today’s challenges.
I want quickly to touch on the rise of streaming, and some of its implications. From the early 2000s, record companies saw a 15-year period of global revenue decline. Recorded music revenues were decimated due to digital piracy, and subscription streaming services such as Spotify—others are available—entered the market in 2008. By 2015, they had played a major part in halting that decline, as consumers began to adopt subscription services and paying for the right to listen to music. In 2015, there were on average 2.1 billion streams a month. By 2020, that figure had grown to 10 billion. As the Select Committee highlighted, the issue is to ensure that the revenues from that flow down. Crucially, however, we are a leader and we are growing in that sector.
The rise of streaming has been a game changer for the business models of many artists. Live performance has become the predominant source of income for many, but not all, artists while recorded music is now often viewed as a key secondary income source. Covid has brought huge challenges, as I have discussed, and the Government have moved fast to support the industry.
I will touch on the taskforces that we have set up to deal with the points in the Bill. We have put the concept of fairness at the heart of our response and we have set up the taskforces to look at three specific issues that the Bill sets out. First, the right of revocation or recapture exists in the United States and means that after 35 years, creators can recover rights that they have contractually licensed to other parties. The argument is that that increases their negotiating leverage.
Secondly, other countries, such as Germany and the Netherlands, have a contract adjustment mechanism. Thirdly, we want to look carefully at the recent European Union directive, which does not apply here, to see whether that works and benefits musicians at the grassroots. Evidence from the Netherlands suggests that contract adjustment law may have very little impact in practice. We want to make sure that we are looking at what works and more research is needed to get that right.
Dean Russell
My hon. Friend has listed many areas that we will look at in future. Can he assure me and artists in Watford and around the UK that the goals of the Bill to protect artists in the UK, protect the industry around the world and ensure that innovation can continue will be at the heart of the measures that he will put forward in the next few months?
George Freeman
I am delighted to give that assurance. I take the opportunity to thank my hon. Friend as a stalwart advocate of the Watford cluster and as someone who has been at the heart of music and online creativity. He is a tireless advocate for it in his constituency and in this House. The answer is absolutely yes.
I promised to give the House some details on the taskforces. We have commissioned multiple research pieces, including on equitable remuneration, rights reversion and the contract adjustment mechanism. We have established a music industry contact group, which I met this week. In addition, two industry working groups are being convened. One will look at a voluntary code of practice on contract transparency and the other will seek solutions to the data issues that the industry faces. The Government will assess the progress of those two groups.
I know that other hon. Members want to speak, so I will be brief. On the CMA market study, one of the first things I did as Minister was to write to the chief executive of the CMA. In that letter, I outlined my support for the Select Committee’s recommendation and asked the CMA to conduct a market study on streaming, which is under way. I am sure the House will appreciate that I cannot jeopardise its independence by saying here what conclusions it has reached. We will come back and report in due course.
We have also launched a market study into how other markets around the world are working and the lessons from those. In particular, we are looking at the independent advice from academics at the universities of Leeds, Middlesex and Ulster commissioned by the Intellectual Property Office, “Music Creators’ Earnings in the Digital Era”, which deals with a number of the issues that the Bill tackles.
Furthermore, in response to the Select Committee, we have asked the Intellectual Property Office to start gathering information on the potential impact of an equitable remuneration right. We have also commissioned a piece of work from the IPO on copyright reversion and a piece of research on the potential impact of introducing a contract adjustment mechanism, as proposed in the Bill.
I highlight that the EU directive on copyright in the digital single market, which we are not party to, having left the EU, will provide an interesting insight into whether and which measures are effective. Brexit gives us the freedom to learn from others and put in place the world’s best framework in the way that works best for our industry. I think I have made the point that we are deeply committed to stakeholder engagement, but I emphasise that over the coming weeks and months my officials and I want to move quickly, talking to everyone with an interest. I am determined to make that clear, and I ask anyone who is listening to the debate, or reading it, to contact me, and officials, if they have views that they want to be taken up.
We think that the Bill is well intentioned and speaks to a problem whose existence we recognise. Our instincts are to try to solve the problem through an industry-led package of measures that artists and musicians support, and we will be moving quickly to receive evidence and put proposals to the House, but I must make it clear that if we conclude that legislation is required, we will not hesitate to act.
I thank all Members who have spoken today. The debate has been a powerful demonstration of the level of interest across the House, across all parties and in all parts of the country.
Seema Malhotra
I thank the Minister for spending so much time outlining what the Government will do. He mentioned an industry-led solution. What does he consider to be within the scope of the term “industry-led”, and how much of that package would be musician-led and artist-led?
George Freeman
By “industry” I meant the whole industry, including the musicians who are key to it. The hon. Lady can rest assured that we will not just be talking to the record labels or the streaming companies; we will be listening to artists and musicians as well. We are keen to hear from people who have profited from the existing system, and from those who have not. We recognise what my right hon. Friend the Member for Maldon (Mr Whittingdale) referred to as the value gap. We want to hear from everyone who is affected by this issue, across the music spectrum, not just the bands that we have heard about but singers, session musicians, and all the other individuals who are affected.
I know that others want to speak—
Angela Crawley (Lanark and Hamilton East) (SNP)
On a point of order, Mr Deputy Speaker. It is clear that the Government are intent on talking out all the remaining Bills, which is a great shame. My Miscarriage Leave Bill has led to more than 20,000 signatures to a petition calling on the Government to introduce three days’ paid miscarriage leave. It is with all those campaigners and all those affected by miscarriage and pregnancy loss in mind that I wish the Government would listen closely to what I have to say. On behalf of the campaigners and the many other voices across the country, and given the support for the Bill on both sides of the House, I ask the Government to allow it to be considered in more detail at a future date.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Lady for her point of order. As she can see, a number of people wish to speak. This is an important debate, but many of the other Bills on the Order Paper are important as well. As we have seen, there are ways of ensuring that if time is not made available for Bills, progress is sometimes made through discussion between Members and the Government. However, the hon. Lady has certainly made her views known, and they are on the record.
I call the Minister.
George Freeman
It is not for me to respond to the point, Mr Deputy Speaker, although it is an important issue. I am here today to deal with this important issue, which is that of music rights.
Let me end by thanking the Ivors Academy group, who have been key to the support for the hon. Member for Cardiff West. The voice of musicians is vital. The Government are listening, and we are determined to act. We need to act in the right way, and we will do so in the coming weeks and months.
Space Sector: Leicester Space Park
George Freeman Excerpts(2 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
It is a great pleasure to serve under your chairmanship, Ms Bardell, and to join two very esteemed colleagues from the other side of the House and support the eloquent advocacy of the hon. Member for Leicester West (Liz Kendall) for this key sector.
It is my great pleasure to be back in Government, now as Minister for Science, Research and Innovation at the Department for Business, Energy and Industrial Strategy. It is my mission to deliver the Prime Minister’s vision of the UK as a science superpower and, crucially, as an innovation nation—both themes that go to the heart of Members’ contributions.
To frame that mission, it is worth making clear that we are already a global powerhouse in science. What does “superpower” mean? I am defining it as the UK using our science for global good, to help to prevent the melting of the ice caps and understand the oceans, space and the new frontiers; being a global science nation, open to people from all around the world to come to do science, which is fundamentally collaborative; and ensuring that we attract more global research and development into the UK. It is great that we are going from £15 billion a year to £20 billion, and on to £22 billion on the journey to 2.4%. To get there, we will have to attract hundreds of billions of pounds over the next 10 or 20 years. I relish that prospect, and I think we can do it, because supply chains are global.
Fourthly, we must use our leadership in science to support the values of this country’s liberal democracy, and to make sure that cyber, artificial intelligence, space and all those other sectors are not dominated by one or two forces who may not be our best friends, but that we build clubs—commonwealths, one might say—of international collaborators who share our values. The innovation nation piece is about making sure that everyone in this country can benefit, as the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross (Jamie Stone) have already said. To be an innovation nation—this is a passion of mine—we have to move from being a service economy that is really good at science in some silos and does a bit of innovation to being a nation in which every person can feel, see, touch and experience the excitement of science, as well as the opportunities it presents for careers in innovation. I have said this in every speech, but let me say it again. That includes the windy outreaches of Scotland, Northern Ireland, Wales and, dare I say it, Norfolk, as well as coastal towns, left-behind towns and places that may not necessarily feel that they are at the heart of the Cambridge cluster. The good news is that the pace of technology and innovation means that we can create clusters all around the country, and that is my mission in this role.
I congratulate my good friend the hon. Member for Leicester West on securing this debate and raising this issue, as well as her tireless advocacy for the Leicester cluster. Leicester is indeed a vital location in the UK space ecosystem, and I pay tribute to the University of Leicester for its leadership and for being the home of the National Space Centre, which would not be there if it were not for the university’s leadership. That university has been hugely helpful in building the space engineering apprenticeship trailblazer group. As the hon. Lady has eloquently said, not only is the National Space Centre in Leicester drawing people into science and driving a new generation to take an interest in the potential of space to create jobs and opportunities, but it is key to levelling up and creating opportunities in that cluster.
The hon. Lady has described her local cluster eloquently and powerfully, so let me explain the national cluster that we are on the road to developing. As she has said, part of my mission is to make sure that people see the space economy as more than just some American billionaires going into space in rockets. This is about highlighting that space technology is fundamental to our everyday lives. It is key to our telephones, our weather forecasting, most of our banking and our digital transactions, and, crucially, understanding earth observation data, climate change and net zero. It is fundamental to the sustainability of our economy, our society and our planet. It is key to stress that, so that people understand that this is not a vanity project for one or two countries, but is fundamental to a modern, dynamic economy. The truth is that space innovations are already being realised in sectors ranging from autonomous vehicles to wearable technology and health and life science. When I met Tim Peake, he was conducting 32 experiments in space, including experiments on bone density and eye and retinal damage, both of which repair when astronauts come back, giving us a real insight into those diseases and how we might prevent them.
Space technology is so much more than the rockets and the big launches that a generation of us grew up watching on our televisions; it is integrated into the economy. However, that is not to say that those two things are not linked. Part of our strategy is to be the first European country to do domestic launch. After all, we are the Department for industrial strategy, and in order for our downstream skills to grow and for us to support and attract investment, we need to have an ecosystem.
Jamie Stone
Further to the Minister’s point about being the first country to achieve launch in Europe, I am sure he would agree that there is a great prize to be won here in terms of the British economy and what we can sell to the world.
George Freeman
The hon. Member makes an excellent point, with which I completely agree. As he will know, we are very ambitious to make sure that we use that first launch into polar orbit from both Scotland and Cornwall. We are in a magnificent position globally to lead in that sector, and by launching, we also build the ecosystem for serving satellites, supply, and all those supporting industries that the UK is phenomenally good at. We are also using satellite technology to support a whole range of innovations across the economy. The NHS will shortly be starting to pilot drones for medicines delivery, particularly into remote areas, and the Rosalind Franklin rover that has been built in the UK will blast off and land on the surface of Mars, so we are a genuine space economy powerhouse.
The Government profoundly recognise the importance of the space economy. It was my great privilege, on day three as Minister, to launch the UK space strategy. I felt a little bit guilty because it was the culmination—the summit—of years of hard work that I was simply lucky enough to be able to read out, but it has landed internationally and sent a strong signal.
For the first time, the space strategy integrates the defence and civil sectors. I have already met my counterpart at the Ministry of Defence to map out where the MOD is investing. It was allocated significant space funding in the latest comprehensive spending review, some of which was, quite rightly, driven by primary security issues, but some of it can be used to support the wider ecosystem. In the middle of the Venn diagram, there is an area where the Department for Business, Energy and Industrial Strategy and MOD are working together, and then some of the strategy delivery lies principally with BEIS, as the industrial strategy Department. This is an exciting time, and we are now turning the space strategy into a space plan, which will set out where we are going to invest and in what in the next few years.
The space sector already employs 45,000 people in the UK, over 75% of whom hold at least a first degree, so this is very highly skilled sector, which is key to the Prime Minister’s vision of creating a high-skill economy and moving away from being overly dependent on low-wage service labour.
Space employees deliver 2.6 times the UK average in terms of productivity, so for the Treasury this is a sector that is at the vanguard of driving UK economic growth. That is why we are completely committed to supporting it and to supporting a diverse workforce, as the hon. Member for Leicester West rightly highlighted. We are using the benchmarks created by the 2020 space census to measure that progress.
The sector already directly contributes more than £6.5 billion to UK GDP and underpins a further £360 billion in the wider economy, so this is not a small sector. It is already a substantial sector, in which we see substantial growth opportunity. That is why we have set out the level of leadership and governance that we have done. We have established a new National Space Council, led by the Prime Minister, to co-ordinate space policy. We have also created the National Science and Technology Council—the science Cabinet Committee on which I sit with the Secretary of State—which is designed specifically to lead a cross-Government integrated approach to key technologies and sectors, such as space, so that we integrate defence, civil, the industrial strategy and the global security issues around cybersecurity and data security. We are putting in place the mechanism of government to ensure that this is a cross-Government plan.
On 27 September, as the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross both highlighted, I announced the space strategy. Its ambition is very clear—to make the UK one of the most attractive and innovative space economies in the world. We are in a competitive environment. Russia, China and India all have substantial sovereign programmes, but there are a number of nations—Japan, Spain, Australia, Canada, France, Italy and others—who are looking to be part of a global space technology economy, and who clearly see the UK as fundamental to that. We want to build a domestic space and satellite cluster on that opportunity.
We launched the national space innovation programme pilot in 2020. That was the UK’s first ever dedicated fund for advancing space technology, innovation, products and services, and we have just announced follow-up funding of £7 million to help fund 11 projects in the scheme. We will be setting out the next phase in our forthcoming science space plan.
We have set out our ambition to be the first country to launch small satellites from Europe, and we have kick-started that work with grants worth £40 million to support the work required to deliver that ambition. As the hon. Member for Caithness, Sutherland and Easter Ross made clear, we are on track for the first launch from the UK next year, whether it is in quarter 3 or quarter 4. We see a huge opportunity, particularly for Scotland and Cornwall, to be at the heart of that launch economy and to drive that supply chain.
As the hon. Members for Leicester West and for Caithness, Sutherland and Easter Ross have highlighted, this sector, properly harnessed, is key to supporting the sustainable jobs and opportunities for the regions of this country—not all of this is in the golden triangle—and that is partly why we are so supportive of the sector’s potential. The sector also underpins modern public services.
Turning to the points that the hon. Member for Leicester West made earlier, Space Park Leicester is absolutely integral. It is an excellent example of a locally led regional technology hub and I encourage other regions to look at it. Space Park Leicester’s plans align hugely with our own ambition to promote sector growth and I am delighted that the first two phases of Space Park Leicester are complete, having been delivered through a partnership between the university and the local enterprise partnership, through the growth deal and Research England.
Both hon. Members made some really important points that I want to refer to. The hon. Member for Leicester West spoke about skills and inclusive growth. As the former co-chair of the all-party parliamentary group on inclusive growth—I have had to stand down—I know that she is absolutely right that if we are going to create an economy in which a new generation can see new opportunities, we need new sectors that will create opportunities in new places.
The high-level vocational qualification piece is key. I have already met the Minister for Further and Higher Education, my right hon. Friend the Member for Chippenham (Michelle Donelan), and the Secretary of State for Education to highlight that skills are one of the key barriers to cluster growth but also one of the key opportunities for the Government. We will pursue that agenda and look to address that career path.
The hon. Member for Leicester West made an important point about the power of the space economy to attract a new generation of girls and boys into science, technology, engineering and mathematics. For many people, the excitement of space is a gateway to discovering the opportunities in the broader science and innovation economy.
A key focus of my mission at BEIS is on clusters. I am pushing the Department, Innovate UK and UK Research and Innovation hard to think about regions—not simply to allocate funding on the basis that a bit of it goes to each of the Government regions, but to think about the clusters that will really drive growth and investment. I encourage the hon. Member for Leicester West to continue to make the case, as she has done powerfully today, that Leicester is at the heart of a cluster, and to follow up with me on that. I think she is right about Leicester in that regard, and I will talk to Innovate UK and UKRI about how we support such clusters over the next few years. That will be about infrastructure, connectivity, skills, data and planning. I would be delighted to come and visit Leicester.
The hon. Member for Caithness, Sutherland and Easter Ross highlighted similar points, and I pay tribute to his passion and commitment to using this area to promote opportunity for a new generation. The highland clearances were a long time ago, but the fact that they are still a sore point speaks volumes, and we need to do more to create opportunities, as he has highlighted. As he said, my hon. Friend the Member for Moray (Douglas Ross) is hugely supportive of creating such opportunities, and it is nice to see a flourishing of cross-party working for the good of Scotland. The Orbex opportunity is huge, and I join the hon. Member in paying tribute to local leaders, because for national strategies to work we need local leaders to deliver.
Space is a huge opportunity, and—from Goonhilly in Cornwall to satellite manufacturing hubs in Surrey and Glasgow, the Leicester cluster and up in Scotland—we have the opportunity in the next few years to do something really significant for the UK economy, for global science innovation and, just as crucially, for a new generation of people in left-behind areas, who need to see that they have an opportunity in the economy of tomorrow.
Question put and agreed to.
Horizon Europe
George Freeman Excerpts(2 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
The Government are announcing today a guarantee to provide a financial safety net for successful UK applicants to Horizon Europe, while we push to formalise our association as soon as possible.
We agreed terms for association under the EU-UK Trade and Co-operation Agreement. When the TCA was agreed in December 2020, the UK and EU signed a joint declaration on participation in union programmes and access to programme services. This sets out the parties’ shared commitment for the UK to associate to Horizon Europe alongside Euratom R&T, Fusion for Energy and Copernicus at the earliest opportunity. The Government remain committed to securing this outcome so that research collaboration can continue, and we stand ready to formalise our association, but disappointingly there have been persistent delays from the EU, which has led to uncertainty for the UK sector and their European partners.
UK and EU researchers and businesses have a long history of successful collaboration. As Europe’s leading R&D and science centre with world-class universities, scientists and innovators, the UK will bring a significant amount to the programme. Further delays will benefit neither the EU nor the UK.
The Government’s priority remains association to Horizon Europe. UK researchers, businesses and innovators have been able to apply to calls as “Associated Candidates” since early 2021. So to provide reassurance to UK-based applicants, the Government have decided to guarantee funding for the first wave of eligible, successful applicants to Horizon Europe who have been unable to sign grant agreements with the EU.
The guarantee is a short-term measure intended to address the continued delays from the EU to formalise the UK’s association to Horizon Europe. The funding will be delivered through UK Research and Innovation, which will publish details on how the guarantee will work including eligibility, scope and how to apply in the coming weeks.
The Government have always been clear that our priority is to support the UK’s research and development sector and we will continue to do this in all future scenarios. As announced in the 2021 spending review, in the event that the UK is unable to associate to Horizon Europe, the funding allocated to Horizon association will go to UK Government R&D programmes, including those to support international partnerships.
The Government looked at the practicalities of handling such a situation in 2020 and developed a detailed set of alternatives plans, which included continued support for international research, innovation collaboration and domestic research support. This work is being refreshed and we remain ready to implement these plans should they become necessary. I have written an open letter to the sector to set out my early thinking on the policy priorities should we be unable to associate, and will be inviting their views over the coming weeks.
[HCWS431]
BioYorkshire and the Bio-Economy
George Freeman Excerpts(2 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
It is genuinely a great pleasure, on this late Monday night, to respond to the hon. Member for York Central (Rachael Maskell), to pay tribute to her advocacy of the project and the wider cause that it embodies, and to take the opportunity to set out my personal support for the project’s aims. She would not expect me to say tonight that the cheque is in the post or to commit agencies that I cannot and should not commit.
In paying tribute to the hon. Lady’s advocacy, I will set out what the Government are trying to do overall in the area that she has highlighted. I will highlight some of the powerful elements of the bid and where they may fit into the emerging Government landscape. I would be delighted to visit as part of a programme of visits that I am doing around the country.
In the time available, I will try to set the scene. It is a great pleasure to be here as the newly appointed Minister for Science, Research and Innovation with a mission to implement the Prime Minister’s vision of a science superpower and an innovation nation. That means that the UK, in an increasingly competitive global world, has to continue to punch above its weight in science with world-class science and science for the global good that helps to prevent climate change, feed 9 billion hungry mouths and solve global challenges, as the hon. Lady has been talking about.
The innovation nation piece is about not just being good at science but building an ecosystem in the UK and making the UK a testbed or cluster globally for developing the new technologies that will help us to harness the renewable power of the sun and waves and the extraordinary power of bioscience, which is an area of particular interest and expertise of mine. Importantly, on the hon. Lady’s point, it is about ensuring that, as a nation, not only do we have world-class science in the golden triangle, but that we use our procurement and regulatory power to create clusters of new technologies around the country to create jobs and opportunities and a more resilient and fair economy, which is what the Government’s levelling-up mission is ultimately all about.
I suggest that the project speaks to all those challenges in a positive and helpful way. I pay tribute to the hon. Lady’s advocacy. She raised the issue with the Prime Minister last Monday, she spoke in the bio-economy debate, she spoke in the north of England: economic support debate, and she has spoken to me personally, so nobody could be doing more to promote it.
At the recent comprehensive spending review, the Chancellor set out a historic package of support for science and innovation. The country has spent more on science in the last 10 years than it has for decades. We have decided to increase that again in the next three years by 30%, from £15 billion to £20 billion a year, and we have recommitted to move to £22 billion a year by ’27 on the journey to spending 2.4% of GDP. The Government are making important strategic long-term commitments.
Within the Department for Business, Energy and Industrial Strategy, post CSR, the Secretary of State and I are looking at where best to deploy those funds for maximum impact in terms of being a science superpower and an innovation nation. Fundamental to the innovation nation piece, we will be looking to support clusters around the country. That will not be about trying to move world-class laboratories in Cambridge or Oxford to the north, which would not be sensible; the MRC Laboratory of Molecular Biology is one of our top laboratories partly because of where it is. It means ensuring that we support the clusters that are taking shape around the country, including the Yorkshire cluster that the hon. Lady talked about.
The hon. Lady knows my personal commitment to the bio-economy. Six years ago, when I was Minister for Life Sciences, I pushed the argument that life sciences should be a broader package of science of life, including the bio-economy and the appliance of bioscience across food, medicine and energy, and should look at how our understanding of biological systems can help to tackle global challenges. We have to feed 9 billion mouths and double world food production with the same land area and half as much water and energy, which is a big challenge. Which country in the world is best equipped to deal with that? This country, because of our agricultural science tradition. If we put together our digital expertise, our agri-tech and our bioscience, and start to invest in those multidisciplinary sciences, I would suggest that we have a huge opportunity to make a big global impact around the world.
Given a background in agriculture and agri-tech, having worked in the seeds industry and having the Norwich research park on my doorstep, I look at Fera, the leadership the hon. Lady has outlined powerfully in precision farming and in agri-tech, the University of York and the agriculture college. This is genuinely a cluster of excellence in its field. The bid it has put together around fuel, chemicals, materials, net zero, food and feed, and land use is a powerful one, and there is very little in it not to be supportive of.
This fits with what we set out in our innovation strategy earlier this summer. The hon. Lady will know that we have identified seven technologies of tomorrow that we want to support strategically. Two of them go right to the heart of this cluster: one in bio-engineering and synthetic biology, and one in genomics, including agricultural genomics for drought-resistant crops, disease-resistant crops and low-carbon farming. I also highlight that we are investing in the HEMP-30 project already through Innovate UK.
In the first half of this year, before returning to Government, I led a big piece of work for the Prime Minister looking at how we could use our regulatory freedoms on departure from the EU to support innovation. This was the taskforce on innovation, growth and regulatory reform report—or, Madam Deputy Speaker, the TIGRR report, if that trips off the tongue more easily—in which we identified 10 sectors where with very little regulatory leadership, and no need of primary legislation, we could unlock billions of investment.
Three of those sectors go to the heart of this bid. There is the agri-environment sector, and the importance of better science and the UK leading in the science of sustainability—the metrics of sustainable farming—so we can begin to label food so that consumers can see that this apple, potato or pint of milk has a low- carbon footprint, or a low-plastic, low-water footprint. It is that labelling that will drive empowered and enlightened consumers.
We also set out a series of recommendations about cannabinoid medicines, CBD and industrial hemp as a net-zero crop with huge potential, and the broader application of agri-genetics for both net zero agriculture and nutriceuticals, functional foods and the interaction of food and agricultural medicines.
There is very good landscape precedent, if I can put it that way, for the space in which this bid is being developed. It is for that reason as well that I am delighted to confirm that I would genuinely want to come up. I am organising a series of regional visits to support clusters, and I would hugely value coming up for a whole day and doing a series of visits around that cluster to help to support its development.
The hon. Lady will understand that we have a process internally now for allocating the CSR funds. There is a huge amount of work going on in my Department and others to set out a framework for that and make sure that it is criteria-led. She will understand that having an Adjournment debate is not a sufficient criterion as and of itself for making that decision, but she has made the case very powerfully.
I am pleased to see that the overall sum has come down from what was a very big number, which makes it harder to approve. I think that these things typically start small and grow and finding a good entry level is key to this project. I would also encourage her, as we discussed earlier, to make sure that the BBSRC supports this. I am sure it would. I cannot commit it, but I cannot think why it would not fit well in its overall structure—and, similarly, Innovate UK and UKRI. On that basis, I think this would stand a very good chance, which is actually—just to correct the record—what the Prime Minister said. I do not think that he actually committed to fund this. What he said was, as I have done, that it is a very strong case and one that it is quite difficult not to see a lot of merit in.
I would close by saying that, if we are going to create an innovation nation, yes, that is about strategic investment by Government in technologies, in institutes and in buildings, but in the end it is about creating clusters. I suggest to the House, which I regret to say is not packed, that the best definition of a cluster is perhaps something that the hon. Lady, I and the representative on the Government Benches tonight, my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns), can take away and share. For all the academic work on clusters, I suggest that the best definition of a cluster is a low-risk place to move one’s family to pursue a career in a high-risk sector. The conversation is, “Let’s move to Cambridge, Oxford, London, or Yorkshire because, darling, if this business does not work, there are plenty of others. The schools are good, the landscape is good and the quality of life is good—there is a cluster there.” In the end, the cluster normally comes to a mixture of public and private institutions, with entrepreneurship, innovation, support, and a shared vision, and that is what the bid sets out.
If we are to change the life chances of people around the country, it will be done through creating a different identity and a different sense of what this place is about. When we consider the institutions in that area, North Yorkshire is traditionally associated with the most beautiful countryside, wonderful tourism, great heritage and wonderful produce—who wouldn’t want to go on holiday to Yorkshire? However, not everyone can make a living in tourism, and the bid speaks to a bigger, bolder, more global, international higher-value economy for that part of the world, which I for one would be keen to support.
I am sorry that I cannot announce anything tonight—that is not my place at this point—but I am delighted to share with the hon. Lady that I would be delighted to come to visit and to continue to work with her and the partners on what looks like a very exciting bid for that part of the world.
Question put and agreed to.
Nuclear Energy (Financing) Bill
George Freeman ExcerptsWednesday 3rd November 2021
(2 years, 5 months ago)
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Alan Brown (Kilmarnock and Loudoun) (SNP)
Not for the first time I think I am going to express a minority view in the Chamber, but I am sure everyone will listen carefully and, once I present my arguments, change their minds and agree with our point of view.
The real debate is whether we need new nuclear or not. I intend to spell out why we do not need new nuclear and, therefore, why we do not need the Bill. Before doing so, I want to highlight the UK Government market failures that have led to the Government scrambling to bring forward the Bill.
We know that Hinkley Point C is currently under construction, but it is under construction as the most expensive power station in the world. There are several reasons for that and how it came about. First, successive Governments seem to have developed a groupthink, following lobbying from the nuclear industry, that somehow nuclear is a prerequisite for our future. Then came the rationale that building a suite of new large-scale nuclear power stations would lead to competition and cheaper costs. However, that philosophy was flawed in that there were not enough competitors to start with and then a piecemeal approach was taken by nominally awarding sites to different preferred bidders. For Hinkley Point C, that meant EDF was the only game in town, so there was no competition when negotiating the contract. EDF had already been beset with problems with its EPR prototypes in Finland and France, so it had to be more cautious in its pricing. It is little wonder then that the UK Government ended up with such a bad deal. They have since tried to tell us that the eye-watering strike rate of £92.20 per megawatt hour for a 35-year contract, while the cost of offshore wind dropped to £40 per megawatt hour for just a 15-year concession, meant that the nuclear deal was a good deal.
In a letter last week, the Minister of State, Department for Business, Energy and Industrial Strategy, the right hon. Member for Chelsea and Fulham (Greg Hands), was effectively saying, “By the way, the Hinkley Point C deal was actually rubbish and poor value for taxpayers, so now we have an alternative funding model and we’re bringing that forward.” Interestingly, it was stated in the letter that the new funding model could potentially save the taxpayer £30 billion to £80 billion. How much money do the Government estimate has been wasted on Hinkley? How many billions of pounds are the Government willing to commit bill payers to if they say they can save up to £80 billion? Logic says that hundreds of billions of pounds would have to be spent to be able to argue that there could be a saving of £80 billion. I will happily give way to the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Mid Norfolk (George Freeman), if he can tell me how much money that £80 billion saving is estimated on? The right hon. Member for Chelsea and Fulham would not give way, but I am happy to give way if the hon. Gentleman can tell me how much the Government estimate—[Interruption.] I take it that he will not give us a figure. The Minister will not come forward and give a figure. That does not add confidence. The Government are saying the saving could be between £30 billion and £80 billion. That is a huge range and that does not give confidence to the estimating proposals either.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
Just to correct the record, it does not at all mean I am not going to answer the hon. Gentleman’s question. It means that I will do it in the usual way, when I wind up at the end of the debate.
Alan Brown
I was so hopeful that I was getting an answer there on the hundreds of billions of pounds that are being committed.
Returning to Hinkley Point C, we hear how advanced the project is and how well it is going, but the reality in terms of cost is that it is £4.5 billion over the initial estimates, which is 25% over budget. On progress, the commissioning date for unit one has now been put back to June 2026, instead of the anticipated 2025, but they also admit there is a programme risk of up to 15 months on top of that. That means that it could be September 2027 before unit 1 of Hinkley is operational and unit 2 will then follow a further year behind. So it is realistic to say that Hinkley Point C will not be fully operational until 2027-28, which is 10 years after we were initially told that Hinkley Point C was required to stop the lights going out. Given that the lights have not gone out, that undermines the original case for Hinkley.
We have to bear in mind that the EPR system has still not been shown to be successful. Flamanville in France is expected to start generating to the grid in 2024, 12 years late. Finland’s project has been delayed yet again, until next year, and it is 13 years late. Both have been crippled with spiralling cost increases.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
It is a pleasure to follow the hon. Member for Greenwich and Woolwich (Matthew Pennycook), and I want to thank him and all hon. Members who have spoken in this important debate. We have had more than 15 speeches and a number of important interventions. I also want to thank the right hon. Member for Doncaster North (Edward Miliband) for his constructive approach to this important piece of legislation.
In the seven minutes available to me to wrap up the debate, I want to try to deal with as many of the points that have been made as possible. First, I would like to remind the House of what the Bill really signifies and what it does. The net zero strategy, published earlier this month, sets out our vision for a decarbonised economy by 2050. This will see the power sector fully decarbonised by 2035, with nuclear power playing a key role alongside renewables. As the Prime Minister set out from the Dispatch Box earlier today, he and the Cabinet are putting every effort at COP into delivering that international leadership to that end.
This Bill creates a new funding model for future nuclear projects that will support our transition to a secure, resilient and affordable low-carbon electricity system. The measures in the Bill are critical to ensuring that we have the option to bring forward further nuclear capacity, delivering a system that is lower in cost for consumers than if we relied on intermittent power sources alone. While consumers will contribute to the cost of new nuclear projects during their construction, analysis shows that lowering the cost of financing new nuclear will save roughly £30 billion over the life of this refinancing, compared with relying on existing mechanisms.
It is good to hear that the Opposition will, sensibly, not vote against the Bill tonight. I would be surprised if any Member decided to vote against it—
George Freeman
No, I will not give way. I am under time pressure and I need to deal with all the points that have been raised—[Interruption.] I have at least half an hour of questions to answer, not least from the hon. Member himself.
The Bill will make it easier to attract, and reduce the cost of, capital. However, a number of points have been raised by hon. Members. I pay tribute to my right hon. Friend the Member for Kingswood (Chris Skidmore), who raised the urgency of tackling the downscaling and ending of the existing nuclear fleet, the urgency of getting this new financing in place and the role of nuclear in levelling up in Somerset and elsewhere in the country. My hon. Friend the Member for Gloucester (Richard Graham) powerfully set out the importance of tidal. My hon. Friend the Member for Morecambe and Lunesdale (David Morris) set out the importance of the nuclear cluster in his constituency and the importance of the 24/7 supply of nuclear for reliability, resilience and baseload.
My hon. Friend the Member for Bolton West (Chris Green) highlighted the role of nuclear in developing apprenticeships and skills, and the role of this model in funding fusion. My right hon. Friend the Member for Beckenham (Bob Stewart) and my hon. Friend the Member for Workington (Mark Jenkinson) raised the question of security. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) made a very powerful speech on the failures of the environmental movement, which has put such irrational fear in the way of the nuclear industry, setting us back two decades.
My right hon. Friend the Member for Vale of Glamorgan (Alun Cairns), the former Secretary of State for Wales, powerfully made the case that Wales stands to benefit substantially but we need to get the cost and the risk assessment right. He also highlighted the role of small modular reactors. My right hon. Friend the Member for Clwyd West (Mr Jones) highlighted the role of the Welsh cluster, and my hon. Friend the Member for Waveney (Peter Aldous) highlighted the role of Lowestoft in this industry in tackling coastal regeneration. I should also like to thank my hon. Friend the Member for Ynys Môn (Virginia Crosbie), who has been a formidable campaigner for energy in her constituency and the whole of north Wales, and my hon. Friend the Member for Bury North (James Daly).
Given the extraordinary benefits of this extraordinary sector—60,000 people employed in the UK, with 90% of those jobs not in London and the south-east but across the country; each worker in the nuclear sector contributing an average of £96,000 gross value added to the economy, 73% higher than the rest; and a median salary of approximately £45,000—it is extraordinary why anyone would oppose it, particularly hon. Members from Scotland, which has huge potential. The local economic impacts are huge: look at Hinkley Point and its well over 10,000 job opportunities and more than 3,600 British companies in its supply chain. Overall, the project is on course to create 25,000 jobs.
It is even more extraordinary to hear Scottish nationalist party Members when it is not just Conservatives, not just the nuclear industry and not just Her Majesty’s Opposition who favour it. Sir David Attenborough himself said:
“I do not question the use of nuclear energy as a way of solving our energy problems in the short term”
until we can solve
“the problems of storage and transmission of power.”
The UN Economic Commission for Europe said:
“International climate objectives will not be met if nuclear power is excluded.”
If that is not good enough for SNP and Liberal Democrat Members, Zion Lights, former Extinction Rebellion activist and founder of Nuclear for Net Zero, said:
“renewables alone would require unfeasibly massive amounts of storage”—
which we do not have—
“to keep the lights on… we are in a climate emergency and need all the clean energy we can build right now”.
That includes nuclear.
The GMB, Unite and Prospect trade unions are all strongly in favour. I could not put it better than Charlotte Childs, the GMB national officer:
“Our environment, our economy and our communities need Ministers and MPs to back new nuclear.”
I hope all will tonight. Even a member of the Green party, Josh Stringfellow of the Kingston Green party, said:
“As Greens we trust the science on climate change. As Greens we should also trust the science on nuclear”.
Across the board, there is recognition that we will not hit net zero unless we accelerate our investment in new nuclear. This Bill provides the framework for reducing the cost of capital and increasing our options for private investment, which makes it all the more extraordinary that we have had the opposition we have. The hon. Member for Southampton, Test (Dr Whitehead), in a thoughtful speech, mentioned a decade of dither and delay. I assume he means from 1997 to 2007, when the then Labour Government completely turned their back on the nuclear industry.
Interestingly, the Scottish nationalists like to have their cake and eat it. The hon. Member for Kilmarnock and Loudoun (Alan Brown) is opposed to nuclear power but, of course, Scottish consumers will benefit from being on the grid. They will benefit from the baseload, resilience and security it gives us. I hear loud and clear his call, and the call of others including my hon. Friend the Member for Gloucester, for more investment in tidal. I reassure the House that we are looking at making sure contracts for difference provide strong support for that sector.
The hon. Member for Richmond Park (Sarah Olney), in a thoughtful speech, set out the importance of supporting net zero, which makes it all the more strange that the Liberal Democrats seemingly have an almost religious objection to nuclear energy. I was a Parliamentary Private Secretary in the Department of Energy and Climate Change when both the right hon. Member for Kingston and Surbiton (Ed Davey) and Chris Huhne were Secretary of State, and it was they who put in place the contracts for difference funding mechanism for nuclear, which did not work and which we are now having to sort out. It is easy to oppose with the benefit of hindsight, but the truth is that this is urgent and the Bill provides the basis for it.
The hon. Member for Richmond Park is right that household insulation is important, which is why we provided an additional £1.75 billion in the Budget to upgrade the homes of those on low incomes through the social housing decarbonisation fund and the home upgrade grant. The Government are consulting right now on raising the standards for home insulation in new houses that are built.
A number of Members mentioned wave and tidal, and I am delighted to confirm that not only is this Department funding great science and research in tidal, wave and other renewables but that at the global investment summit last week I visited wind and tidal technologies and we secured nearly £9 billion of private investment in the international renewables sector. We are actively considering whether we should ringfence tidal technologies in the next round of CfD, and it will be eligible under pot 2.
The hon. Member for Kilmarnock and Loudoun challenged the £30 billion cost saving. The full analysis and methodology is set out in the impact assessment accompanying this Bill, and I confirm the current contract ensures that consumers will not pay for any overruns at Hinkley Point C.
The hon. Member for Edinburgh North and Leith (Deidre Brock) mentioned radioactive waste, and the truth is that we have been producing and managing radioactive waste perfectly successfully, without accident or danger to health and safety, for decades. Some 94% of the waste is very low level, and the Government, like previous Governments, have a strong plan for a geological disposal facility.
A number of colleagues raised the issue of national security. I want to make it clear that the Bill is not concerned with making it difficult for any particular country or company to apply. The quality of the bids will be considered in due course by the Secretary of State, with full accountability to Parliament. The Bill does not determine any future nuclear project’s ownership structure; it simply creates a new financing model that broadens our options for new nuclear.
As a package, the legislation before Members will help to end our reliance on overseas developers for finance, which has led to the cancellation of nuclear projects in the UK. Instead, the Bill ensures that our new nuclear power plants can be financed by British pension funds and institutional investors. However, this is not about shutting out individual companies or countries, and the Government have already taken significant powers through the National Security and Investment Act 2021.
A number of colleagues have raised the issue of the scrutiny of risk assessment, and I want to reassure Members that the Secretary of State will be required to act transparently and with full disclosure to the House. I close by thanking Members from across the House for their contributions, highlighting that I hope very much that the Scottish nationalists will not divide the House tonight on something that Scottish voters will benefit from. I strongly believe that this new funding model acts in the interests of the whole of this country, and I commend this Bill to the House.
Question put, That the Bill be now read a Second time.