Advanced Research and Invention Agency Bill

Kirsty Blackman Excerpts

Report stage & 3rd reading
Monday 7th June 2021 Commons Chamber

[Graham Stringer]

I generally agree with the comments of the hon. Member for North East Bedfordshire (Richard Fuller). Before I get on to the core of the Bill, I would like to pick up on two or three points from the debate.

The hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), with whom and under whose chairmanship I am happy to have served on the Science and Technology Committee, will not be surprised to hear me not quibble but disagree with his interpretation of the Haldane principle, which we have talked about many times. The Haldane principle does not—and never did, from when Haldane proposed it at the end of the first world war—prohibit politicians from saying that we should prioritise health over defence, defence over transport, or anything over anything else. It is to stop politicians interfering in the detailed technical decision of who the best person is to do that research. When we get on to the core mission of ARIA, I would want politicians to do some of that, but not all.

Unfortunately, the SNP representative, the hon. Member for Aberdeen South (Stephen Flynn), is no longer in his place, but it was absolutely extraordinary that he prayed the Barnett formula in aid of regional levelling up. I used to travel on the train from Manchester to London almost every week with Joel Barnett, who regretted the Barnett formula almost more than anything else he had done in his political career. Without getting into a debate, let me say that he understood that it meant people in Glasgow got more public subsidy or support than people in Manchester or Birmingham in very similar situations.

Finally, I would make a point about priorities. Hon. Members have talked about climate change being the top priority; politicians are notorious for having lots and lots of top priorities, but as far as I have noticed, the top priority over the past 15 months has been dealing with covid and the coronavirus. Incidentally, after 25 conferences of the parties, the only thing that has had any impact on the steady increase of carbon dioxide in the atmosphere has been covid: the response to covid has reduced carbon dioxide for the first time since people started talking about it, essentially.

Let me move on to the core issue of ARIA and the points that have been made about it. Now that new clause 4 has been taken off the agenda, the debate is much less controversial than it otherwise would have been, but that does not mean that it is not difficult. As the hon. Member for North East Bedfordshire said, we may not need a mission statement. I go some way along that path with him, having looked at the practical evidence from what happened with ARPA and DARPA in the United States. They were given—certainly at the start of the process when the Americans got frightened when the Sputnik satellite went up—almost complete freedom and a lot of money, and that led to the development of part of the internet. Some of the messenger RNA work that has led to the vaccines we have now came out of the ARPA process, as did drones and many other things. That was not because people were given a mission statement that said, “Develop messenger RNA”; it was because they were looking for problems to solve and to make the United States a more secure society, so they had the most general statements.

What UKRI has done is excellent in many ways, but it has lots of accountability systems. The person who put forward the original idea for doing work on quantum computers stated in evidence to the Committee that he would not get through the process now. Lots of questions are asked, some of them ridiculous. Several Science and Technology Committees ago, Professor Brian Cox came along and we talked about impact assessments whereby every research project has to state how much impact it will have on society. He said, “I have no idea how to answer that question and nor do my colleagues.” The normal metrics are about citations and numbers of papers. Even when I was a scientist, a long time ago, I used to see chemists churning out papers, sometimes on ridiculous things or with only slight variations just so that they could say, “We got our 10 papers this year.” That is not really a good way to do science. Compared with the complete freedom process, there is a rather bureaucratic system that is delivering good science—we win Nobel prizes in this country—but is not pushing back the frontiers of science as quickly as we might like. Having an organisation with a great deal of freedom is very important.

I differ slightly from the hon. Member for North East Bedfordshire on one point, as did the Science and Technology Committee in two recommendations in the report that we produced in February, both of which effectively said that there should be a client side to the organisation. The reason for having a client side is not to stifle innovation. Having a client is useful, not in telling scientists what to look for or stopping them looking for completely new things, but in situations where they develop something. One of the problems with all the different ARPAs in the United States is that they find it difficult to get product to market because they do not have a client, whereas DARPA, which has the Department of Defence as a client, can take many of the innovations and inventions and develop them straight away. So there is another side to the total freedom approach.

I suppose that most politicians want the best of all possible worlds, so the ARIA I would like would, as in my new clause 2, have the Department of Health as a client Department. It could be something else, but I think that what we have been through over the past 15 months means that health almost speaks for itself. It should also have freedom to find problems that nobody else has thought of—that nobody in this House has thought of and many scientists will not have thought of. When Dominic Cummings came to the Science and Technology Committee, in less controversial terms than his last visit to the Joint Committee session, we talked in detail about how the science develops and we heard something really interesting that I suspect is true. Finding somebody who can chair a body such as this is more difficult than finding Nobel prize winners or people who are likely to win Fields medals. That is what will make this organisation successful or not—somebody who is bright or clever enough to understand questions that have not been asked before. Will that lead to cronyism? When we asked the current chair of UKRI, she was clear that very few people in this world could do this job, and we could probably sit down and write their names. Am I worried about cronyism? No. I am worried about not getting the right person.

Does anybody ever think about what networking means? At the top of science, the best scientists, and the people who get the grants and funding, are basically the great and the good and the really well networked. If Einstein cannot get a job in science and works in a patent office, or whatever the 21st-century equivalent would be, they cannot get into cronyism because those elites in our top universities, which are excellent, swallow up all the funding, and in many cases exclude the young and the brightest scientists. I am not worried about cronyism; I am worried about this body not getting the freedom it should get.

Under schedule 2, the Secretary of State basically keeps control. What makes the Bill difficult is that all politicians who vote to raise taxes want to control public money. That is in our nature. It is right, part of the democratic process—no taxation without representation —and a fundamental issue in a democratic society. To say, “Go off with £800 million and do your own thing” is difficult, but evidence from the States suggests that that is the best way to push forward the frontiers of science. My worry about the Bill is that there is too much control, not too little, and it might stifle initiative.

Finally, on initiatives, when the vaccine taskforce was set up we invited it to the Science and Technology Committee. I was not impressed that somebody was appointed without proper process, but the woman did an extraordinarily good job and she is now getting honoured. Sometimes in an emergency risks were taken—it worked a lot less well with the test and trace system. Sometimes we have to take risks. If we understand the way that scientific advances have been pushed forward, freedom as opposed to bureaucracy tends to work.

[Kirsty Blackman (Aberdeen North) (SNP)]

I served on the Bill Committee, and I tabled various amendments at that stage, a number of which we have carried forward to Report. I was interested in a number of things that were said. On the supposed mission and purpose of ARIA, the Bill says only:

“In exercising its functions, ARIA must have regard to the desirability of doing so for the benefit of the United Kingdom, through…economic growth…scientific innovation...or improving the quality of life”,

and that it must

“have regard to the desirability of doing so for the benefit of the United Kingdom.”

It does not even have to do things for the benefit of the United Kingdom; that is not written in the Bill.

The former Chair of the Science and Technology Committee, the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), spoke about high risk and high reward. I understand where he is coming from, but I do not know what that reward means or looks like. The reward is not identified in any way. I am happy for there to be a high reward, but I would like some idea of what that is supposed to be, so that we can measure whether it is successful.

[Stephen Metcalfe]

If I am honest, I do not know the answer to that question. The reward might be the next internet, GPS or, as we heard from the hon. Member for Blackley and Broughton (Graham Stringer), mRNA technology; we do not know. But what we do know is that if we give scientists the ability to explore an area, to fail and to report back, some of those things will stick, and some of them could become massive new industries of the future. The challenge—I accept this—is to keep those industries and that technology here in the UK, spread all over the country, to the benefit of us all.

[Kirsty Blackman]

And what we are doing is just what the hon. Gentleman suggests: pointing scientists in a direction, saying, “Please could you do something about climate change? Please could you do something about our commitment and our journey to net zero?” and then letting them go. It is not about restricting them.

One of the things that has bothered me throughout is that most people seem to think that all this agency will do is invent widgets. Science is not all about making things. One of the biggest things that we need to do to tackle climate change is to convince every single person to change the way they live so that we can reach our targets. We will not be able to do that without scientific research into how people work and what changes they will make. That is not about creating widgets; it is about ensuring that we are on the right track and making the right changes for people to be able to do things in their lives in order that we can move towards net zero. I think that restricting ARIA to dealing with the most important challenge in our lifetimes is not too much of a restriction. It is a huge, wide thing.

One thing that really concerns me about progress to net zero is that an awful lot of folk are going to be left behind. An awful lot of these things that are made will be sold. Yes, great; that is going to make a lot of difference to the lives of people who already have money, but people who currently have nothing will find it even more difficult if we approach climate change with the stick method and require them to make changes or pay more for their energy when they already have very little money. Those are the challenges that I would like to see ARIA tackle, so that none of our constituents are left behind when we are moving to net zero.

I wrote to the Chancellor last week after a meeting with Aberdeen Climate Action about net zero organisations. Lib Dem new clause 3 suggests that ARIA should be net zero in every year. ARIA absolutely should be net zero in every year—that was one of the amendments we moved in Committee—because we should be saying that anything new should not add to our carbon emissions but reduce them or, at the very least, leave them neutral. The Government were not willing to accept that amendment in Committee. I am glad that the Lib Dems have put it forward again, because it is so important. If we are saying that we are going to be leaders and we are going to make a difference, new organisations such as ARIA should be net zero from the very beginning, and we should commit to that. If we are going to be net zero by 2050, everyone will have to make a contribution to that, and that includes ARIA.

On scrutiny, I am afraid that I disagreed with quite a lot of what the hon. Member for Blackley and Broughton (Graham Stringer) said. The point that my hon. Friend the Member for Aberdeen South (Stephen Flynn) was making about the Barnett formula was not that it is the best thing since sliced bread, but that we have the rules that we have. The rules mean that the Barnett formula does exist. We have been screwed over with regard to the Barnett formula a number of times in recent years, and we do not want that to happen in this case.

We would rather not have the Barnett formula—we would rather be an independent country—but if we are going to have those rules and the Government do not stick to them, there is a major element of unfairness. We are asking the Government to stick to their own rules in this regard. We have seen with legislative consent motions in recent times that they have completely ignored what the Scottish Parliament and the Welsh Parliament have said. They are not sticking to the rules, so we are just trying to get them to live up to the trust that they expect us to have in them.

On scrutiny, public procurement and FOI, I was really pleased that in Committee, the Minister confirmed that in the estimates process, ARIA will have a discrete line in the supply estimates, so we will at least be able to see how much money ARIA has in any given year. I do not disagree that ARIA should have the ability to fail —it is incredibly important that it does—but we need to be able to have scrutiny of the money that is being spent and that we as a House are agreeing to spend on it. I am very glad that the Minister confirmed that.

Finally, I am hugely concerned about the Einsteins—about the people who work in patent offices who have not been able to gain grants. I do not think that ARIA will fix that. There is still going to be the issue where if someone is networked—if they are a white man in research —they are much more likely to be able to get research grants than if they are a woman or a person of colour. Unfortunately, with the lack of ability that we have to FOI and to scrutinise some of ARIA, we cannot see what is going on with that. We cannot see whether ARIA is further entrenching the current inequality in science and technology and academia or doing a positive job towards breaking down those barriers and ensuring that people who live in the most deprived communities in Scotland are given the opportunity because they have the best possible ideas, rather than because they have the best possible friends. It is hugely important that we have more scrutiny. That is why we tabled the cronyism amendment and the amendments relating to us as Houses approving both the chair and the CEO, because those roles will be so important and because we are so excluded from the scrutiny process in relation to ARIA.

[Andy Slaughter (Hammersmith) (Lab)]

I wish to speak in support of amendments 14 and 8 in relation to bringing ARIA within the scope of the Freedom of Information Act. It seems extraordinary to me that there is an exclusion for a body of this kind, although, to be honest, I have a long-standing interest in freedom of information, and for Government Ministers—this is not exclusive to this Government—to look to exempt bodies from that piece of legislation for one spurious reason or another is not that unusual.

I have worked closely with the Campaign for Freedom of Information. Three years ago I introduced, unsuccessfully, a Bill to bring the third of public sector expenditure that is carried out by private contractors within the scope of the Act. That has gained some currency recently with, as we have heard in this debate, the upsurge of cronyism, the scandals over test and trace and the employment of huge numbers of consultants on inflated salaries. The Bill is equally subject to some of the same concerns and rings the same alarm bells.

We hear about high-risk, high-reward research and ARIA being allowed to fail, and there is nothing wrong with those as functions, but there has to be transparency, and, frankly, having that in the public eye, rather than hidden away, is more likely to lead to better decision making. The parallel body that we have heard about—DARPA in the USA—has had scandals and ethics violations that have been brought to light because it is subject to the equivalent Freedom of Information Act in that country. I believe that this is the right thing to do and in the interests of good research and the good use of public money.

The excuses that are given are the usual sorts of excuses that are pulled out at this stage—that this is a small, cutting-edge body on which it will be too burdensome to impose freedom of information. Leaving aside whether a body given £800 million of public money is indeed a small body, we have heard from my Front-Bench colleague, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), that parish councils are subject to freedom of information. So are dentists and internal drainage boards. I am not quite sure what an internal drainage board is—it sounds quite painful, actually—but I doubt that such bodies get £800 million of public money. I would take an intervention from anyone who wants to explain what an internal drainage board is, but I think it would take us off the subject.

This is just nonsense. The idea that ARIA will not have back-office functions and that its status at the cutting edge of a science superpower—I am not making those phrases up; the Minister has used them—will be hampered by making it subject to the Freedom of Information Act is fanciful. The Science and Technology Committee did indeed say that there was a danger of ARIA being stifled by bureaucracy, but it was referring not to freedom of information requests from the public and other interested parties, but to micromanagement by Government. That sounds far more likely and realistic.

The US body, DARPA, is subject to FOI. As one would expect, its budget is considerably larger, yet it gets about 50 FOIA requests a year. Comparisons have been made with UK Research and Innovation—a much larger organisation that brings together many different bodies in the sector. It gets about 20 FOIA requests per calendar month. There is no expectation that ARIA will be swamped by FOIA requests. Where they are appropriate, such requests are telling and essential, and they can bring important facts to light.

The Minister will correct me if I am wrong, but I cannot see how ARIA will not be subject to environmental information regulations, which are the parallel regime of discovery. It seems to me entirely anomalous that one should be in and one should be out, and it may be that we would be breaching our Aarhus convention obligations. Breaching international treaties from time to time does not seem to bother this Government—I am not sure what other explanation there could be.

It is in the public interest for freedom of information to be exercised where possible. In this instance it is certainly possible, and I hope I have given some reasons why it is entirely appropriate. It was a good action by the Labour Government at the time to bring the FOI Act into force. Since then, successive Governments and Ministers—not only Conservative Ministers—have railed against it, but there have been independent investigations. The Burns commission, which was widely perceived to be a case of the Conservative Government trying to do a hatchet job on the Act, found that the Act was working well. In its inquiry, the Justice Committee—a fine body of men and women—also found that the Act was working well. The Supreme Court has spoken very strongly in favour, saying that there is a strong public interest in the press and the general public having the right, subject to appropriate safeguards, to require public authorities to provide information about their activities. That is right, and it is particularly right that it applies to ARIA. I hope that, even at this late stage, the Government will think again about the rather misguided steps they are taking.

Advanced Research and Invention Agency Bill (Fifth sitting)

Kirsty Blackman Excerpts

Thursday 22nd April 2021 Public Bill Committees

[Chi Onwurah]

I recognise that, Mr Twigg, but let us be clear. When I say that we are the party of national security, it is also what the shadow Secretary of State for Defence and my party leader say. That is a statement, and I really do not think it was appropriate of the hon. Member for Broadland to try to undermine the unity on both sides of the House with regard to the importance of national security. I fear that that is what he was trying to do.

As I was saying, Labour is the party of national security and believes strongly in the importance of the Secretary of State’s ability to give directions informed by national security. However, I feel that the Minister has yet to set out how those directions will be scrutinised. That remains a significant concern for the Opposition if we are to be sure that those directions are really driven by our national security interests and if we are to give the scrutiny that ensures continuing public confidence. However, given the importance of national security, we will clearly not be opposing clause 5.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Information

[Kirsty Blackman (Aberdeen North) (SNP)]

I beg to move amendment 27, in clause 6, page 2, line 38, at end insert—

“(2) ARIA must provide relevant Select Committees of the House of Commons and the House of Lords with such information as the Select Committees may request.”

This amendment is intended to allow relevant parliamentary Select Committees to access information in order to scrutinise the value for money provided by ARIA.

I will not say a huge amount about the amendment, which pretty much speaks for itself. As ARIA is not subject to freedom of information, I think it incredibly important that there should be a commitment from the Minister that ARIA will provide information to Select Committees if they request it. If the Minister will stand up and say that ARIA will of course provide information to Select Committees, I will withdraw my amendment post haste.

[Amanda Solloway]

Amendment 27 would require ARIA to provide information requested by relevant Select Committees in both Houses. Sufficient measures are already in place to ensure that Select Committees have access to information that would allow them to scrutinise the work of Government Departments and public bodies.

I agree that Select Committees play an important role in examining the work of arm’s length bodies, and I am grateful for the interest and insight that the Science and Technology Committees in both Houses have had into ARIA so far. However, the Osmotherly rules provide guidance for how Government Departments and public bodies should interact with Select Committees. They are clear that the members of arm’s length bodies should be as helpful as possible in providing accurate, truthful and full information when giving evidence, taking care to ensure that no information is withheld that would not be exempted if a parallel request were made to the body under the Freedom of Information Act 2000. I believe that that is sufficient to ensure co-operation and a constructive relationship between ARIA and relevant Select Committees, as it is for other bodies such as UKRI.

On scrutiny of ARIA’s value for money, as was set out in discussions on schedule 1 the National Audit Office can conduct value-for-money assessment in the usual way. I wanted to address a comment made by the hon. Member for Newcastle upon Tyne Central on Tuesday about the role of the National Audit Office in scrutinising the work of ARIA. I do not agree that the safeguard is very limited; in fact, value-for-money assessments are rigorous and robust, and provide the basis for the Public Accounts Committee’s hearings and reports. I therefore believe that the right arrangements are in place for Select Committees to scrutinise the work of ARIA. That is in line with standard practice. I hope that the hon. Member for Aberdeen North will withdraw her amendment.

[Kirsty Blackman]

I thank the Minister for her statement. She has made it clear that she expects ARIA to comply and not withhold information necessary for Select Committees. I beg to ask leave to withdraw the amendment.

        Amendment, by leave, withdrawn.

        Question proposed, That the clause stand part of the Bill.

[Amanda Solloway]

Clause 6 focuses on the Secretary of State’s information rights with respect to ARIA. The Secretary of State may request information relating to his or her functions—for example, information required to determine the Government’s funding of ARIA, to make national security directions, or for the appointment or removal of board members. It is important that the Secretary of State has the information that he or she requires to perform relevant functions.

The information rights remain limited compared with the other arm’s length bodies of Government Departments. The Bill does not allow the Secretary of State to request ARIA’s strategy or delivery plan, for example, as the Higher Education and Research Act 2017 does with respect to UKRI. A limited set of information rights is an important feature of maintaining ARIA’s independence from Government, and it also helps the body to be an agile organisation that can focus on high-risk, high-reward research.

I remind the Committee that this is not the extent of the information provided by ARIA. As we have discussed with respect to schedule 1, for example, ARIA must also send a copy of its statement of accounts and annual report to the Secretary of State, to be laid before Parliament. It is also in the gift of the Secretary of State to oblige ARIA to make other types of information available—via the framework document, for example—as a condition of funding under clause 4. Clearly, it is important to strike a balance between transparency in the use of public moneys and not operationally overburdening a small organisation.

The clause also sets out stipulations regarding the handling of information. Disclosure of information by ARIA under the clause does not breach any obligation of confidence owed by ARIA, and does not, for example, require a disclosure of information should it contravene data protection legislation. I hope that hon. Members agree that the information rights set out in the clause are important to allow the Secretary of State to carry out their functions effectively.

--- Later in debate ---

[Amanda Solloway]

The schedule allows the Secretary of State to make one or more property or staff transfer schemes to ARIA. The permitted transferors are the Secretary of State or UKRI. The supplementary powers are standard and mirror those in, for example, the Higher Education and Research Act 2017. The principal purpose of clause 7 and schedule 2 is to ensure that important assets and personnel can be transferred from BEIS or, if required, UKRI, as ARIA is set up. For example, the chief executive officer and chair may be temporarily contracted to BEIS before ARIA becomes operational. It is administratively convenient to be able to use the power to transfer those staff to ARIA. Paragraph (4) provides that

“A staff transfer scheme may make provision which is the same as or similar to the TUPE regulations.”

That means that employers’ rights of transfer remain the same.

Alternatively, in the ARIA set-up phase, contracts may be entered into for an office lease or seed funding, which could be transferred to ARIA without contract novation. That means that the benefit and burden of the contract can be assigned to ARIA without having to obtain a third-party agreement. It is an important provision that may be needed to make ARIA operational.

Question put and agreed to.

Schedule 2 agreed to.

Clause 8

Power to dissolve ARIA

[Kirsty Blackman]

I beg to move amendment 38, in clause 8, page 3, line 21, at end insert—

“unless they are made under subsection (7)”.

This amendment ensures that ARIA cannot use its significant resources to fund weapon development.

[The Chair]

With this it will be convenient to discuss amendment 37, in clause 8, page 4, line 4, at end insert—

“(7) The Secretary of State must immediately dissolve ARIA if it uses any of its resources to support weapon development.”.

This amendment ensures that ARIA cannot use its significant resources to fund weapon development.

[Kirsty Blackman]

It is important to consider the amendments together as one is consequential on the other. They would ensure that ARIA cannot use its significant resources to fund weapon development, and would provide the mechanism of the Secretary of State immediately dissolving ARIA were it to use any of its resources to support weapon development as an addition to the clause on dissolving ARIA. It is no secret that we in the SNP are not particularly keen to continue to be part of either the UK or the UK Parliament, but while we are contributing to ARIA and while some of our tax money is going to ARIA—while this money is being spent in our name—we do not want it to be spent on weapons or the development of weapons.

We have been very clear that we will not have nuclear weapons in an independent Scotland. We stand in opposition to them. For that reason, like many people in my party, I am a long-time member of the Scottish Campaign for Nuclear Disarmament. The decisions the UK Government have taken on the renewal of those weapons and on spending money on nuclear weapons have been some of the very worst things that they have done in the name of the people of the UK. I do not want to sit on a Bill Committee that creates an organisation which has no set purpose, but which could entirely fund weapon development with the money that it is allocated. It could entirely fund research into technologies with which I fundamentally disagree.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I completely understand the hon. Lady’s principled position on this issue. Does she not accept that, if the amendments were to pass, they would hamper the ability of the Secretary of State to activate clause 5 and direct ARIA towards working in our national security in a time of crisis? I fully accept that it would not be a good idea for ARIA to set its sights on developing new weapons, but we should not take its ability to do that away when we as nation may need it.

[Kirsty Blackman]

I thank the hon. Member for his characteristically sensible intervention. However, I feel so strongly about this that I think it is important that ARIA is excluded from doing that. There are other means that the UK can use to fund weapon development. I do not think ARIA should be one of them.

We are particularly concerned because of the lack of transparency and the issues that there have been around the use of weapons and the use of UK resources on weapons. We have said that we want the UK to immediately halt all military support and arms sales to regimes that are guilty of violations of human rights and international humanitarian law. The UK Government have not done so. Our concerns are well founded, which is why we have tabled what is quite an extreme amendment in comparison with others we have seen.

This is a subject of much moral debate. We will not ever accept the use of lethal autonomous weapons. Our concern is that, as they are on the cutting edge of technology, ARIA may consider looking at those weapons. I do not want that to be done in the name of the people I represent; they certainly do not want it done in their name.

The Minister has told us about the memorandum of understanding that will be in place between BEIS and ARIA. We have already touched on the issues of ethical investments that ARIA may or may not make. If the Minister was willing to make a statement about the ethical nature of investments ARIA will make and the direction that may be put into that MOU—we do not have as much information as we would like on the MOU—that might give us some comfort on the direction that ARIA may take. The lack of a mission for ARIA means that it is open to the possibility that this situation could arise, and that is a big concern of ours.

[Amanda Solloway]

Amendments 37 and 38 challenge so-called dual-use research—research that is intended for benefit, but might be misapplied by a third party to do harm. The ways in which that could be done will not always be easy to predict, and given the possible benefits of the intended civilian application, it would not be right to close the door to any research that might fall into that category.

I assure the hon. Member that, alongside the Bill, my team is working hard to ensure that ARIA is set up with such risks at the front of people’s mind, including regarding how ARIA is equipped to perform due diligence on potential research partners to minimise risk. It would not be right to dissolve ARIA immediately if it had taken all necessary precautions to minimise the inappropriate use of its research, which would be the effect of the amendments.

Clause 5 will allow the Secretary of State to give directions to ARIA relating to the exercise of its functions when that is necessary or expedient in the interests of national security. That would apply, for example, if ARIA worked with a researcher in another jurisdiction on the development of a technology that could be used by another country for nefarious ends such as weapons development. In that event, the Secretary of State could direct ARIA to cease the contract or research. Under schedule 1, the Secretary of State is able to remove members from office on national security grounds.

I emphasise that while we have learned from DARPA in creating ARIA, ARIA differs from DARPA in several ways, principally because it is not set up with a focus on defence or weapons development. I urge the hon. Member to withdraw the amendment.

[Kirsty Blackman]

I thank the Minister for her statement. I listened to it closely, and it did give some comfort about the possible direction of ARIA. Given what she said, I do not intend to press the amendment to a Division, but we will keep a close eye on what happens. When we scrutinise ARIA, we will examine whether it uses significant portions, or indeed any, of its resources to fund weapons development, especially in countries where there is concern about use for nefarious purposes—not that weapons can generally be used for a particularly good purposes—and with regard to lethal autonomous weapons. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Amanda Solloway]

Clause 8 allows the Secretary of State to make provision by regulation for the dissolution of ARIA

“ten years after the date on which this Act is passed.”

Before making such regulations, the Secretary of State will be required to consult ARIA and other persons he or she considers appropriate, who could include the recipients of ARIA funding or other experts in the field. That will ensure that those leading ARIA at the time will have the opportunity to contribute to the decision. As is set out in clause 11, regulations under clause 8 are subject to the affirmative procedure in each House of Parliament.

We recognise that ARIA is a new body that will take time to get up to scale and demonstrate success. Its exclusive focus on high-risk, programme-led research requires patience, so it should not be evaluated on short -term outcomes. The Commons Science and Technology Committee and the R&D sector at large have welcomed the long-term, patient approach that has been set out for ARIA, and the dissolution grace period is designed to take account of that. There is no obligation to exercise the dissolution power after 10 years, and the Government are, of course, optimistic that clause 8 will not be needed. However, we recognise that ARIA represents a new way of funding research so, as a matter of good administration, we have provided for a power to dissolve ARIA in the event that it is not successful.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Consequential amendments

Question proposed, That the clause stand part of the Bill.

Advanced Research and Invention Agency Bill (Sixth sitting)

Kirsty Blackman Excerpts

Thursday 22nd April 2021 Public Bill Committees

For all these reasons, I believe that there is no need for ARIA to be subject to an FOI regime that will stifle creativity and create unnecessary bureaucracy.

[Kirsty Blackman (Aberdeen North) (SNP)]

I want to make a couple of comments. We have talked a lot about transparency and the need for it, but mostly in the context of the scrutiny that we as parliamentarians will levy on ARIA. It is really important that we have transparency so that the public and journalists can scrutinise it. We are not always fans of some of the journalism that happens, but I hope we are all agreed that journalism plays a hugely important role and that journalists have no other route to access the information that they should have on ARIA in order to bring things to the public’s attention.

We discussed also the tolerance for failure that exists in the UK, and how it might differ from tolerance for failure in the US. I suggest that having more public transparency about that and more openness about the processes in ARIA would ensure that the public are more on board with the organisation’s ability to fail. The organisation should have the ability to fail, but if we do not know that that is happening, because we have not been able to scrutinise it, and that suddenly comes out in the end-of-year annual report, it will be even more of a shock for the public than if they had heard about it along the way.

On the topic of scrutinising the Department for Business, Energy and Industrial Strategy, it is interesting to consider whether BEIS will provide us with responses if we send it written questions on the subject of ARIA. That would be helpful to know. If there is not a normal mechanism for us or journalists to scrutinise this through FOI, it would be helpful to have some comfort that written questions relating to ARIA will be answered, with as much detail as the Minister feels can be given at that time.

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure, Mr Hollobone, to serve with you in the Chair for the second time this week.

This has been a really interesting discussion, because it has demonstrated two very different views of how the world might operate. I am sorry to hear the Government’s view on this. When they are in Opposition, they might find that they are quite keen on freedom of information. All Governments, of course, are keen not to be subject to scrutiny in this way. There is a fundamental point about the modern world now, even more than 10 or 20 years ago. Perhaps it is because of the kind of constituency I represent, but I have a lot of people who are interested in what is going on and they expect, as citizens and taxpayers, to be able to ask questions, particularly where public money is being spent.

Let me give two very quick examples. Artificial intelligence is the kind of issue that may well be dealt with by ARIA. It is hugely controversial. Just a couple of years ago, many of my constituents, on the way home from King’s Cross, found that they had been subject to facial recognition technology. How did they find out about that? Ultimately, it was through freedom of information. It is always the case that the people who have the knowledge, the power and the control do not want to share it with others. That is not a good way of maintaining public trust. Just this morning, I found myself at the Dispatch Box challenging a Minister because expert advice on bee-killing pesticides had been revealed not through parliamentary questions or asking or writing letters, but through Friends of the Earth’s freedom of information requests. I understand why the Government do not want that information out there, but it should be out there, and ARIA should be in the same place. We should have confidence in the work being done, however close to the edge it is. Ultimately, it is about maintaining public trust. We are entering a hugely complicated world, in terms of science and technology. We will not keep the public with us by hiding and not acceding to freedom of information requests.

--- Later in debate ---

[The Chair]

The new clause is in the name of the SNP, and we go this time to Aberdeen North.

[Kirsty Blackman]

I beg to move, That the clause be read a Second time.

Aberdeen North is by far the best part of Aberdeen, Mr Hollobone.

I know that new clause 3 is the most exciting thing, and that the Committee has been waiting for it the whole time. It is the key moment in our discussions. I jest—but it is important. The past few years saw the advent of English votes for English laws in Parliament, and we were told during its development that even though Scottish MPs were being written out of having a say on England-only legislation, we would still have a say on Barnett consequentials, because we would be able to vote during the estimates process.

We have made our issues with that process clear. Despite good changes to the system and the way we scrutinise estimates, the process is still wholly inadequate. Part of that inadequacy is the fact that we have no certainty about what will or will not be a discrete line within the estimates. We have no certainty about whether we can get the costs for something. As the shadow Minister said, when she asked for costs for UKRI, in relation to freedom of information requests, for example, she did not get them. Even if ARIA is to be an arm’s length organisation in relation to BEIS, with a memorandum of understanding, but it will be spending public money, I would be keen to keep track of how much we are allocating to ARIA each year. Once again, it would be quite good if the Minister would make a commitment to a discrete line in the estimates. If she does that, I will be more than happy to say nothing else.

[Amanda Solloway]

New clause 3 is intended to ensure that ARIA is presented as a discrete item in the supply estimates. ARIA will be funded by BEIS and, like all other BEIS arm’s length bodies, will be separately identified in the BEIS supply estimates. ARIA statements of accounts, which will be laid before Parliament every year, will also include information on ARIA’s funding from BEIS. I therefore believe that the new clause would be an unnecessary addition to the Bill.

[Kirsty Blackman]

With that confirmation from the Minister, I am happy to say that I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 4

Ethical code for investment

‘(1) Within three months of the date of commencement of this Act, the Secretary of State must lay before Parliament a code for ethical investment developed and agreed by ARIA.

(2) The code of ethics developed by ARIA under subsection (1) must go beyond regulatory requirements and adopt a best practice approach.’ —(Stephen Flynn.)

This new clause is intended to ensure that ARIA develops a code for ethical investment that goes beyond regulatory requirements and adopts a best practice approach.

Brought up, and read the First time.

[Stephen Flynn]

I beg to move, That the clause be read a Second time.

Again, the new clause is very straightforward. It is intended to ensure that ARIA develops a code of ethical investment that goes beyond regulatory requirements, and adopts a best practice approach. What is not to like? That is something that we should all aspire to, particularly when it comes to such a significant amount of public money. We have talked at length today and on Second Reading about ARIA’s ability to dodge freedom of information requests, and the like. The new clause would provide the assurance that we need, given that the Government appear unwilling and unable to take forward our views on freedom of information. It perhaps provides a compromise position.

[Amanda Solloway]

I recognise the issue raised in the amendment. The most transformational scientific research, of the kind that will be pursued by ARIA, is likely to have a wide range of potential technological applications, across different areas. Such research may prompt new ethical debates, such as those that we are already having about AI and robotics. The Government welcome lively, open and democratic public and parliamentary debate on the roles that new technologies play in our lives, and I do not think that that is something we should shy away from. However, I assure the hon. Gentleman that ARIA will operate in line with the law that already governs issues of research ethics, such as the use of animals in research. ARIA will not be given special dispensation to fund research that is not considered appropriate elsewhere.

I draw attention to the fact that there is no specific legislative requirement placed on UKRI, a much larger-scale funder, with respect to issues of research ethics. For ARIA the Government would be able to intervene in exceptional circumstances through the national security provision in clause 4 of the Bill, as we have already discussed.

[Kirsty Blackman]

I understand what the Minister says about the fact that there is no such provision for UKRI. However, perhaps if was being set up now, we would suggest that there should be. For her information, the Scottish National Investment Bank has a clause almost identical to new clause 4, on ethical investment. We believe that if the Scottish National Investment Bank can operate on that basis, ARIA should have no problem doing so. I understand exactly what she says about the debates that are happening, but that is why it is even more important for ARIA to sign up to some kind of code of ethics that we can all scrutinise.

[Amanda Solloway]

To reiterate our viewpoint, the Government would be able to intervene in exceptional circumstances through the national security provision in clause 4, which we have already discussed, and by introducing powers on the grounds of conflict of interest and appointing a new chair or new non-executive directors. More broadly, in working with relevant Government institutions, special attention will be paid to ensuring that ethical questions generated by research are thoroughly explored and that we strike an appropriate balance between innovation and caution.

--- Later in debate ---

[Chi Onwurah]

On a point of order, Mr Hollobone. I thank you for the way in which you have chaired our deliberations, and for your guidance and that of the Chair of each sitting. I thank the Committee members, whose contributions have just about always been good-natured and constructive, and have often been humorous and enlightening at the same time. I offer my particular thanks to the Clerks of the Committee, to Hansard for taking down our words of wisdom—or whatever—so accurately and concisely, and to all the staff and Officers of the House who have furnished us with excellent briefings for the evidence sessions. We have benefited from their advice and guidance outside of the Committee Room as well.

[Kirsty Blackman]

Further to that point of order, Mr Hollobone. I echo the comments made by the shadow Minister. I have said thanks very much to the Clerks, but I also put on the record my thanks to Dr Jonathan Kiehlmann and Scott Taylor, our staff members who have been assisting us. I also put on the record my thanks to the Minister, who wrote to us with a response to questions that we asked on Tuesday. I thank her and her team for ensuring that happened.

[Amanda Solloway]

Further to that point of order, Mr Hollobone. I take this opportunity to place on the record my sincere thanks to the Chairs for their excellent chairship. We have finished proceedings early, and I thank the Whips on both sides for their efforts in the management of time. I thank the excellent witnesses we heard from last week, and I thank all members of the Committee for our constructive debates. I am so pleased that every member recognises ARIA’s potential to bolster the reach of R&D funding across the whole United Kingdom and to be at the global forefront of new discoveries.

I very much welcome the sentiment behind the amendments we have discussed, such as maintaining the independence of ARIA, diversity in science and the importance of combating climate change. I hope I have demonstrated that the Bill will create a leading independent research institution and, while it is not for this piece of legislation, that the Government are making significant progress on other areas of policy through our net zero commitments and our upcoming people and culture strategy and places strategy. I welcome the support in delivering those aims.

Finally, I offer my thanks to the Clerks, the Doorkeepers, Hansard, all the parliamentary staff who have supported the debate and all members of the Committee for ensuring smooth proceedings and the livestreaming of the discussions. I look forward with great anticipation to the next stages of proceedings on the Bill and the continued insight from my experienced colleagues across the House.

Advanced Research and Invention Agency Bill (Fourth sitting)

Kirsty Blackman Excerpts

Tuesday 20th April 2021 Public Bill Committees

The Minister says she is reluctant to place too strong constraints on the choice of the board, but it seems she is reluctant to place any constraints whatever, even given the need to include accountability, diversity and wide-ranging scientific experience and experience of the regions. We tabled the amendments because we see other examples of organisations in the public sector that lack the necessary regional, national or gender representation or have other diversity issues.

[Kirsty Blackman (Aberdeen North) (SNP)]

For the avoidance of doubt, we are happy to support the two amendments. On the issue of geographical experience, if we go with geographical knowledge as well, and perhaps get people who have specific expertise in, for example, energy-related technologies, such as we have around Aberdeen, and in technologies around AI, which we have in the area around Edinburgh, then we have geographic hubs as well as experience hubs. The amendment nicely allows for ARIA to make sure that it encapsulates all of that and not just, as the hon. Lady says, nanotechnology, which is brilliant but is not the only thing that we should focus on.

[Chi Onwurah]

I am in absolute agreement with the hon. Lady. She highlights an important issue. We want ARIA to be transformational. We heard the Minister underline that we want ARIA to transform real people’s lives, but how is ARIA to do that if its members do not have experience on the ground in the different regions and nations of our country and if they do not understand the way in which the supply chain works in Aberdeen, for example, for specific technologies and sectors? We do not want ARIA to have a narrow focus or a narrow background of expertise. On that basis, I wish to press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Chi Onwurah]

My hon. Friend makes an important point. It is important to understand that ARIA will be an independent agency, but it will be spending taxpayers’ money and it will therefore reflect the public and the national interest. If somebody is recruited who, at the time or later on, is found to have views that are abhorrent to society, or not fit to serve on the board for other reasons, by what process could or would such a person be removed from the board? If, for example, after appointment of a member to the board, it was found that they championed eugenic research or that they believed in anti-vaccination mythologies, for example, would there be any means by which they could be removed?

[Kirsty Blackman]

Does the shadow Minister find it bizarre, as I do, that we have a higher bar for taxi drivers, for example, who have to pass a “fit and proper person” test in order to become a taxi driver, than for these people, who will be spending millions of pounds of public money? I recognise that that is a sensible thing to do, but there is not the level of oversight that we have for people such as taxi drivers.

--- Later in debate ---

[Amanda Solloway]

To reiterate, and building on my previous comments, contracts are determined by the chair. The contracts that people will have are to be negotiated. Furthermore, in extremis, the Secretary of State may remove the chair and other non-executive members if he or she is particularly concerned by the quality of executive members recruited by the chair. It is for those reasons that the amendment is not necessary, and I hope the hon. Lady will not press it.

[Kirsty Blackman]

We have asked an awful lot of questions about the appointment of the CEO and chair. Does the Minister understand that her answers have not given us comfort? To say that the roles will be appointed by the chair and the chief executive does not help us a huge amount, because we are not very happy about the process of appointing those people, so for them to be able to appoint other people does not help us in any way, shape or form. Having more safeguards in place would give us comfort that those people will be fit to do the job.

[Chi Onwurah]

I echo the point made by the hon. Member for Aberdeen North. We recognise that a significant amount of power lies in the chief executive and the chair, and there is no oversight from Parliament or others of those appointments. To say that the chief executive and the chair will have the power according to contractual negotiations to remove members does not reassure us. The Minister said that the Secretary of State could, in extremis, remove the chair. Would she write to me to set out what the in extremis circumstances would be?

I am keen not to detain the Committee unnecessarily. We are raising important matters, but since the Minister is not happy to accept them, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

--- Later in debate ---

[Stephen Flynn]

I understand the point that the hon. Gentleman is making, although I would caution that, when speaking to an MP from Aberdeen, people do not tend to mention a Glasgow university—it doesn’t go down too well, that’s for sure.

I understand the purpose of the hon. Gentleman’s point, but he must understand our concerns about making sure that Scotland receives its fair share of funding and investment from the UK Government while we remain a part of the United Kingdom. That ties into the wider narrative from this UK Government since the 2019 election. The views and will of the people of Scotland have been completely disregarded.

What we are seeing from the UK Government are attempts to impose their will on Scotland. We saw that with clause 46 of the Internal Market Bill and with the levelling-up fund that bypasses devolution but does not deliver for the communities in Scotland that it is needed for. This fits into our wider concern about the direction of funding from the UK Government.

As I said earlier, £800 million is involved. While Scotland is still a part of the UK we will take an interest and argue Scotland’s case for getting that funding into Scotland. It should, of course, be at the Barnett level. I would welcome assurances from the Minister that we will see investment in Scotland—not necessarily in Glasgow or at the University of Strathclyde, but perhaps in Aberdeen: that would be much more beneficial. I hope that we will see that level of investment in Scotland and I hope that she will provide that commitment, in which case I will be able to withdraw my amendment.

[Kirsty Blackman]

Does my colleague agree that what we saw happening in relation to Northern Ireland—the money funnelled there and the fact that we did not get our Barnett amount of that cash—increases our worry about the fact that we might not see the Barnett amount for ARIA either?

[Stephen Flynn]

Absolutely; my colleague is spot on. As I said, this is not new, and the example she has provided is another clear indication of this UK Government’s failure to take cognisance of Scotland’s needs. If the Minister wishes to stand up and tell me that Scotland will get its fair share and we will get a Barnett sum spent in Scotland, I will be more than happy to withdraw my amendment; otherwise, I will push it to a vote to ensure that Scotland’s needs are met.

--- Later in debate ---

[Kirsty Blackman]

I beg to move amendment 29, in schedule 1, page 10, line 5, at end insert—

“(3) The report must include—

(a) statistics on the gender balance of—

(i) executive board members

(ii) non-executive board members

(iii) senior staff; and

(b) financial information on the gender pay gap among ARIA employees and appointees.”

This amendment is intended to ensure that this public body may be held accountable for its gender representation.

The Minister just made a helpful comment about the memorandum of understanding that will happen between BEIS and ARIA, but her comment was not quite strong enough for me. She said it was likely to include these things—perhaps very likely. Will the Minister tell us that it will include the geographical disbursement covered in the previous amendment, and the gender balance of the board members and senior staff and the gender pay gap, as covered in amendment 29? If we are asking companies to report on the gender pay gap in their annual reports, as we are and should be doing, it is not out of the question to ask ARIA to do the same.

The measure is particularly important because the Government are absolutely intent on excluding ARIA from freedom of information; if ARIA is excluded from FOI, we are not able to see that information. We will not have the level of scrutiny that we normally have over a public body. We have talked at some length— the shadow Minister spoke at some length—about the importance of gender balance, diversity and having women in senior roles. It is also important that we do not have a gender pay gap within ARIA. We know that the glass ceiling in areas such as engineering is very significant. We want to ensure that women are promoted to all levels within the organisation, that women are paid fairly within it and that we are able to scrutinise the information.

I would really appreciate it if the Minister stood up and said, “Yes, absolutely—we will be negotiating that as part of the MOU.” That would be massively appreciated because it is incredibly important.

[Chi Onwurah]

I rise briefly to speak in support of the amendment. As the Bill stands, ARIA will not be subject to freedom of information requests. If there is no requirement to report on gender balance and the gender pay gap, will we have any understanding of the way in which ARIA is reflecting the gender diversity that we hope to see in the organisation?

[Amanda Solloway]

Again, I draw hon. Members’ attention to the existing obligations under the public sector equality duty and the Equality Act 2010, to which ARIA will be subject. Under the public sector equality duty, ARIA must, in carrying out all its functions, have due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct; advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

This is a strong statutory duty that will apply to the recruitment and remuneration of ARIA staff. Should ARIA have 250 employees, there would also be a requirement to publish its gender pay gap information, based on the point at which the data becomes statistically significant and supports a good analysis.

I believe this specific duty is sufficient for ARIA, as indeed it is for all other employers. I do not think that any further provision in the Bill is required and I hope the hon. Member will withdraw the amendment.

[Kirsty Blackman]

I understand that there are public sector duties in relation to this issue, but ARIA could easily fulfil all those by employing only men—it could just pay them all at whatever level because they would all be men. It would fulfil its duties in that regard because there would be no gender pay gap, but it would be incredibly important for us to know that ARIA had only fulfilled its duties by taking that step, because it is public money that is being spent.

While Scotland is still part of the Union we want to be able to scrutinise how the money is spent. It is important that we have information on whether there is a gender pay gap in ARIA, whether or not it has 250 employees. Again, it is a public sector organisation spending public money but exempt from public procurement regulations and exempt from FOI. That means we are not able to adequately scrutinise the money spent, to ensure that there is diversity and fairness, making sure that women are not only in the lower roles in the organisations, but are starting at or being promoted to higher roles.

What the Minister said was not strong enough for me; I would like for her to have reassured us that the MOU will have that duty written into it. I would like to push the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Kirsty Blackman]

I just want to add a couple of things. The hon. Member for South Basildon and East Thurrock gave us what he thinks the mission for ARIA is. Unfortunately, everybody I have heard speak has a different idea of what the mission for ARIA is.

I thought the statement of policy intent was really useful in telling us the mechanics of how ARIA will work. It is really useful in saying why it is set up in a particular way, but it does not actually tell us what the point of it is. Reading through the Bill, I realised not just that ARIA does not have a mission, but that it does not have a direction. Is ARIA about funding scientific things that are not otherwise funded? Is it about increasing productivity, which is mentioned too? Is it about economic growth? Is it about improving the lives of people who live in the UK or elsewhere? Is it about solving scientific problems? I do not know which of those things it is about.

Even if the Government are unwilling to accept the amendments that we have tabled—they should accept them, because, as I have explained, £200 million a year on solving climate change is not a bad thing, even though I think we should be spending significantly more than that—they should be clear about the point of ARIA. How are we are measuring performance? How do we know whether it has succeeded? Do we know that it has succeeded if it has spent lots of money? Do we know that it has succeeded if it has funded lots of projects? Do we know that it has succeeded if it has made a difference to the level of productivity within science, research and development in the UK, or to productivity in the UK in general? Is it succeeding if it is coming up with technologies that will improve lives?

We do not know what we are measuring ARIA against, so the Government will presumably—as they do with most things, and as most Governments do—say that ARIA is a success, whatever happens. However, I want to know what criteria it is being measured against, so that we can actually judge it. If it is what the hon. Member for South Basildon and East Thurrock suggested—if ARIA is to fund scientific projects on the edge, regardless of whether that is of an ellipse or a circle—that is fine, because then we can judge it against that. However, I am not clear that that is the Government’s intention.

[Amanda Solloway]

We heard from some incredibly experienced witnesses last week, with much discussion focused on the question of prescribing ARIA a research focus. Inevitably, cases were made both for and against such an approach. The case made for the approach often referred to DARPA and DARPA-like agencies, but I remind the Committee that ARIA is not DARPA, ARPA-E or ARPA-H. Although we have learned some incredibly valuable things from those agencies, my primary consideration as we develop ARIA has been that it is the right approach for the UK’s R&D system.

Professor Dame Ottoline Leyser said to us last week—[Interruption.]

Advanced Research and Invention Agency Bill (Third sitting)

Kirsty Blackman Excerpts

Tuesday 20th April 2021 Public Bill Committees

Question put and negatived.

[Kirsty Blackman (Aberdeen North) (SNP)]

I beg to move amendment 28, in schedule 1, page 6, line 22, at end insert—

“(4) The Secretary of State must ensure that—

(a) at least 50% of the other members appointed under (3)(c) are women; and

(b) where the number of members under (a) would be an odd number, the calculation of 50% of other members should be made as if the board had one fewer non-executive member.”

This amendment is intended to ensure that the Secretary of State appoints a significant percentage of women as other non-executive members.

[The Chair]

With this it will be convenient to discuss amendment 9, in schedule 1, page 6, line 24, at end insert—

“(5) The Secretary of State must, in appointing the members of ARIA, have regard to the diversity of the members including the representation of those with protected characteristics.

(6) In this section, ‘protected characteristics’ has the meaning given by Part 2, Chapter 1 of the Equalities Act 2010.”

This amendment would require the Secretary of State to have regard to the diversity of ARIA’s board when using their powers of appointment.

[Kirsty Blackman]

It is a pleasure to be able to take part in this Bill Committee. Unfortunately, I had to come to London to do so, but it is nice to see some of the faces that I have not seen for a while, other than on little screens. I will start with a bit of fluff: I thank the Clerks for their huge amount of hard work in assisting us with the amendments that we tabled to the Bill. It was really helpful. I am sure they provided the same level of help to everybody else, but we very much appreciate it.

I will speak to amendment 28 and the Opposition’s amendment 9. Our amendment 28 relates to the number of women to be appointed to the board in non-executive positions. There is some lack of flexibility around the positions because two are taken by named individuals. There are also positions that are not appointed by the Secretary of State because they are executive positions. In relation to the non-executive members, it is incredibly important that a significant percentage of women is included among them.

The hon. Member for Broadland said that we should legislate only where we have to. I think in this case it is incredibly important to legislate. We know that only 12% of all engineers are women, and that 25% of 16 to 18-year-old girls would consider becoming an engineer as opposed to 51.9% of boys in that age group. There is an incredibly hard glass ceiling, particularly in science, technology, engineering, and mathematics, and in the kind of roles that will benefit from the funding that ARIA will receive.

We know that young women, and young men, are more likely to take up and aspire to positions if they can see people who look like them in those positions, see people who have succeeded, and know that there is an opportunity to climb the ladder rather than hit the glass ceiling, as people so often do in engineering. This would be a real opportunity for the Government to make it clear that it is incredibly important to have women in these roles. Maths is not just for boys; it is a subject for everybody. When I was doing my advanced higher maths, I was the only girl in the class. Not one other girl had chosen to take advanced higher maths. It was not a small class, it was a class of about 20, and it was because people felt that it was a boys’ subject and girls should not be taking it.

It is important that the Government agree to such an amendment. If the Minister is unwilling to, it would be helpful to hear how the Government plan to increase the gender balance on the board and ensure that women are appointed to these roles. For example, they have said to FTSE companies that they need to have a percentage of women on those boards, but they are not putting that into the legislation in this instance and it is important that they do so.

The Opposition’s amendment 9 in relation to diversity is an incredibly good amendment. In fact, I am quite upset I did not think of it. We have a similar problem with diversity in engineering. Mainly white men are in these positions, and people in school do not look at these positions and think, “I’m going to aspire to do this,” because they do not see people like them in those roles.

My hon. Friend the Member for Aberdeen South and I represent Aberdeen constituencies, where Robert Gordon University and Aberdeen University do a lot around engineering, oil and gas. We have thankfully seen a significant amount of immigration to our city because of the oil and gas. Outside London, the highest percentage of non-UK-born citizens is in Aberdeen. That means a significant number of people from ethnic minority groups are in the engineering profession, but again we have the same issue. It is very unusual to go into a room full of oil and gas executives and for any of them not to be white, and it is fairly unusual for any of them to be women, although we are seeing an increase in those numbers. These amendments would make clear the Government’s intentions and say to organisations such as the FTSE companies that are being asked to have gender balance on their boards, “We are doing this too; we are leading by example”.

[Aaron Bell]

It is really nice to see the hon. Member back in London. I know it is a burden for SNP Members to come all the way down to the United Kingdom Parliament, but it is lovely to see her in person.

I do not think the Government are doing so badly on diversity, particularly on women. I reassure the hon. Member and the Opposition that, in relation to their amendments, the panel will be selected by Sir Patrick Vallance and other independent advisers. The job that they have done during covid demonstrates how many women we have in positions of scientific importance. We have the women we mentioned earlier: Dame Jenny Harries, Dame Ottoline Leyser, who gave evidence to us, and the Science Minister herself. From the diversity perspective, I think the absolute hero of the press conferences has been Professor Jonathan Van-Tam, who has been a wonderful communicator to the whole country, so I gently say to the hon. Member that I do not think it is as bad as all that and that the amendments are therefore unnecessary.

[Kirsty Blackman]

I was hoping that I was not being too critical of the Government. I did not intend to say the UK Government are terrible in this regard. I think they have done some good things around gender balance on boards, for example. I would have gone further, but they were a good start. I am not hugely critical of where things are, but I think a kind of stamp on this Bill, to say, “This is the direction we would like to go to”, would be helpful.

This can be done. We have done it in Scotland with the Scottish National Investment Bank. Our amendment is very similar to the proposal in relation to the investment bank—we are doing a huge amount for our public bodies. The investment bank intends to have a significant number of women on it, and it is the same for gender representation on public boards in Scotland more generally. I would very much appreciate it if the Minister let us know whether the Government will take the actions that we have proposed in our amendment. If not, what do they intend to do to ensure that people from diverse backgrounds are included?

--- Later in debate ---

[Amanda Solloway]

I welcome the hon. Lady to her place.

This amendment concerns the appointment of ARIA’s non-executive members by the Secretary of State. I have been lucky enough to speak to many outstanding women during my time as science Minister: scientists; researchers; and those with other important perspectives who would bring great expertise and value to the ARIA board.

This is an issue that I am committed to more broadly, as the hon. Lady will know, through developing a people and culture strategy that will look to ensure that the UK has the people we need at all levels, working in a culture that gets the best out of everyone and which delivers the best outcomes for the country. That means looking to remove barriers and dismantle any inequalities in the system that limit the ambitions, inclusion and participation of people from any background. I recognise the objective of the amendment and its importance, but I also highlight the inadvertent dangers of placing legislative constraints on the recruitment and appointment of ARIA’s members.

However, I will emphasise for the hon. Lady the provision of the Equality Act 2010, as set out in schedule 3 of the Bill, which I am sure we will come on to discuss. ARIA will be subject to the public sector equality duty. This duty will also apply to appointments made to ARIA by the Secretary of State. That means seeking to advance equality of duty between those who share a protected characteristic and those who do not.

As the hon. Lady will be aware, protected characteristics include sex and gender reassignment, and I believe that this duty should place—as it was designed to do—important issues of gender equality on the appropriate legislative footing. Therefore, I hope that she recognises that there is no need to make any provision in the Bill, and will withdraw the amendment.

Amendment 9 also concerns the appointment of ARIA’s non-executive members by the Secretary of State. In considering it, I will return to the Equality Act 2010, to which ARIA will be subject, and the public sector equality duty. As I have said, I believe that this duty should place, as it is been designed to do, the important issue of inclusion and equality on an appropriate legislative footing. Appointments made by the Secretary of State will follow the governance code for public appointments. The code includes the following principle:

“Public appointments should reflect the diversity of the society in which we live and appointments should be made taking account of the need to appoint boards which include a balance of skills and backgrounds.”

I therefore hope that the hon. Lady recognises that there is no need to make any further provision in the Bill and will withdraw her amendment.

[Kirsty Blackman]

This has been quite an interesting debate and I particularly enjoyed the speech by the shadow Minister; I thought it was very good. However, I did not expect to be discussing women’s underwear during the course of this Bill Committee.

It is the case in relation to things being designed for men that such things happen. We see that if we consider the fact that endometriosis treatments, for example, are few and far between, because researchers and organisations do not put money into researching things that are “women-only problems”, because for some reason we matter less. It is therefore incredibly important that the Government take positive steps in this regard.

Engineering and innovation will be the future for us. I have already said that I represent Aberdeen. We are looking at having a just transition; we are looking at moving Aberdeen away from its focus on oil and gas to a focus on renewable energy and the energies of the future. We will not have those energies of the future or the design and innovation that we will need unless we have diversity in the research environment and unless we have a significant number of people from different backgrounds, all with different life experiences, considering how best to solve problems. For young people considering coming into these organisations, having women and people with other protected characteristics on boards such as that of ARIA would mean that they are more likely to be able to aspire to those roles.

[Stephen Metcalfe]

I agree that we need to hold people up as examples to encourage people from far more diverse backgrounds to come into engineering and all STEM subjects. However, the amendment would mandate the percentage of women sitting on the board of ARIA. The UKRI board, with 13 members, has six women, without that being mandated and using the Equality Act 2010. The Equality Act is delivering our aims. Let us talk about how we get more people from diverse backgrounds into engineering. In my view, this is not the way to do it.

[Kirsty Blackman]

I thank the hon. Member for his input. I was not trying to criticise the actions of the UK Government in this area—in lots of other areas, but not in this one. Positive steps have been made. In Scotland, we have a duty of gender diversity on boards and it has worked. We have proved that it has worked across public sector boards. It has made a positive difference. People can say that we might not need to legislate for it, but it is a safeguard. It ensures that we have that percentage of women on the board and that we have diversity in all appointments in relation to ARIA.

[Dawn Butler]

I thank the hon. Member for her informative contribution, which I have found fascinating. It is great that UKRI has that diversity on its board without it being mandated—I would suggest that that is another reason why ARIA and UKRI need to have a memorandum of understanding. Is it not important that there is some communication if that diversity is going to be taken into consideration? As the hon. Member says, if it is not mandated, we are just relying on good faith.

[Kirsty Blackman]

I absolutely agree. This measure should be included in the Bill as a safeguard or a fallback—a failsafe. I appreciate the public sector equality duty exists, but that is not strong enough to give me comfort.

When women do engineering degrees, they get better degrees than men. They get a better class of degree—the statistics prove it. If we want the highest possible quality of people, from diverse backgrounds, pushing innovation forward and trying to, for example, make the renewable energy technologies of the future, we need to ensure diversity on the board and more widely in the staff of ARIA.

[Chi Onwurah]

I echo the disappointment of the hon. Member for Aberdeen North in the Minister’s response, who takes this issue very seriously. The architect of ARIA and the debate around it have focused very much on great individual minds of science, generally men, and how they should be left on their own to go off and discover new and exciting things. These amendments would send a really important message to the science community that ARIA is an inclusive agency and that, regardless of what some may have said or envisaged, this is about the whole of the United Kingdom. I would emphasise that we still have far, far to go to reflect diversity in the science community.

UK Oil and Gas Industry

Kirsty Blackman Excerpts

Tuesday 25th February 2020 Westminster Hall

[John Howell]

In just a second, I will tackle an issue that I hope will help with the hon. Gentleman’s concerns.

The figures have already been quoted for the number of people employed in the oil and gas sector in the UK. Just over 30,000 are employed full time, but in the supply chain, which is the most important part and which I want to concentrate on, the number is close to 150,000. That is a phenomenal number of people to have to deal with.

I have been, and still am, the Prime Minister’s trade envoy to Nigeria. The link here is in the Aberdeen sector of the supply chain, which I have been involved with, to try to get people to go to Nigeria. Why should they be interested in Nigeria? The skills that we have in Aberdeen are just the sort required to set the Nigerian oil and gas sector on the right course. Historically, a huge amount of the income from that sector has not even reached the Ministry of Finance; it has got nowhere near—it has simply been diverted. When so much of the industry is essentially black market, it is difficult to get efficiency, but we have all the expertise in Aberdeen and other places throughout the UK to be able to bring that.

[Kirsty Blackman (Aberdeen North) (SNP)]

I have been told that Aberdeen has the highest percentage of Nigerians of any place in the world outside Africa, but we have a real problem in Aberdeen with the visa system. When people come over for university and things like that, actually staying afterwards is very difficult for them. I find the visa system incredibly obstructive for my Nigerian constituents. Does the hon. Gentleman think that the flow of information and expertise would work better if the visa system was a bit more flexible, allowing people to develop their expertise in Aberdeen before going back to Nigeria?

[John Howell]

I like to think that it is something to do with the activities I have been conducting on behalf of the Government that there are so many Nigerians in Aberdeen. I suspect I cannot claim full credit for that, although I have tried to encourage companies in Aberdeen to go out to Nigeria and encourage people to come back. Nigerians can learn a tremendous amount from companies in Aberdeen, and I think they recognise that. The commitment to the oil and gas sector shown by President Buhari is a good indication that he takes it seriously. I hope we will be able to do something with that—something much better than we have done in the past—in order to take things forward.

This is all about getting better control, including over the net zero target set in not only the UK but globally as well, and our ability to see that target gain traction through what we do and the investments that we make. For somewhere like Nigeria, the ability to get to a net zero approach in the oil and gas sector at the moment is quite low. Again, the expertise that we have here is crucial to getting to that. My hon. Friend the Member for West Aberdeenshire and Kincardine mentioned two elements of that—carbon capture and storage and hydrogen production. The relevance of this to my constituency, which may seem a long way from Aberdeen and the companies I am talking about, is that Invesco, in my constituency, has a great interest in helping to fund hydrogen production as part of the energy mix here.

The other link to my constituency is a former Member and Minister, Tim Eggar, the chairman of the Oil and Gas Authority. I draw the House’s attention to a recent speech in which he made important comments on how the industry could move towards a much better net zero target. This man knows the industry extremely well and has worked in it for much of his life, and I hold his comments in full.

If we keep in mind those remarks about how we are helping the oil and gas sector to stay profitable and to get out and sell its expertise around the world, that will keep us in good stead for the future.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) on securing this debate. I was shocked to hear we have not debated this subject since April 2018—quite some time ago. I was present at that debate, and I was one of the few people the hon. Gentleman did not mention—perhaps because I am a constant in these oil and gas debates. I am afraid I will make the same, or a pretty similar, speech to the one I made last time, but the Minister was not here then, so it will all be new to him.

Previous debates on this issue have generally come in the run-up to a Budget, to try to make clear the asks of the oil and gas sector in the Budget. We were particularly successful around transferable tax history where we all worked together to push the Government to ensure that it was put in place so that new players could come into the oil and gas fields. That was incredibly useful and a good opportunity for us to work together.

We do not agree on everything, but we all feel strongly—I think everybody in this room feels strongly—that we should move towards a sector deal. If the Minister cannot give us full details of the sector deal, it would be helpful if he could at least let us know the timeline for announcements on it. The issue has been hanging around for a long time, and the industry has been waiting quite some time to hear what will happen. The more certainty the industry has on the timeline, the better.

In the last debate on this issue, I mentioned Vision 2035, which has been followed by Roadmap 2035, both of which are about ensuring we move towards net zero while continuing to have a successful oil and gas sector in the UK for many years. We spoke about the importing of oil and gas to the UK to meet our energy needs, and that is a concern for a number of reasons. There is a carbon cost to importing oil and gas, because of the ships or however it gets here. There is also an additional carbon cost in its extraction. If we are moving to net zero extraction under Vision 2035 in the UK, we will ensure that as little carbon as possible is expended in the extraction process, but other countries that extract oil and gas may not be so far along that route, so there may be a differential in the carbon costs of extraction. If the Government intend to import more oil and gas in the future, I ask that they look closely at where we are getting it from and at the related carbon cost. We cannot say it is not our problem because it is being extracted somewhere else, so it is somebody else’s problem; that is not how this works. If we are using that oil and gas, we need to own up to the carbon created in its extraction. That is incredibly important.

Vision 2035 and Roadmap 2035 also focus on the supply chain. Our supply chain is phenomenal. It is recognised as the gold standard across the world in several areas, but particularly safety. On safety, the UK continental shelf is absolutely up there—it is tip-top. Everybody does everything they can to ensure the highest possible levels of safety. If our supply chain is going to continue exporting around the world, we need to export that safety culture too. That relates not only to any oil and gas we import, but to ensuring that we lead the way on improving safety around the world.

We can also export our capability to move towards net zero extraction to ensure that we level up places around the world that extract oil and gas, and reduce the amount of carbon they create during the extraction process. We can be real world leaders not only, as I mentioned last time, in working in a super-mature basin, which we already are, but in exporting our safety culture and net zero culture in the extraction process.

Carbon capture and storage has been spoken about a number of times. Like many others, I am still sore about the previous Government’s pulling of carbon capture and storage. While that was not done by this Government, there is a concern, and it is difficult for the Government to build trust in this place. I am pleased the Government have moved forward with commitments to carbon capture and storage. It is incredibly important that the UK Government support a number of carbon capture and storage clusters, as mentioned by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), and ensure they get off the ground as quickly as possible, with real projects that work, so that we can be world leaders in exporting our expertise in carbon capture and storage to the world and assisting the world by storing its carbon.

If we have surplus capacity in, for example, the Acorn system, once it is up and running, we should store carbon from countries around the world and charge them to do so. That is a great way for us to make additional revenue. I hope that we will do what we can, and the Government will do what they can, to ensure that CCS gets off the ground and gets working as quickly as possible, and that the Government make it unequivocally clear that they support CCS and will not pull the rug out from under it again. We cannot afford to do that; we cannot afford to look at a net zero future without carbon capture and storage. We must make those moves.

Moving away from oil and gas at some point in the future means that we will need a transition in place. It means we will have to utilise the expertise in our industry to better harness our renewable capability. Those who work in subsea technologies, mostly in the constituency of the hon. Member for West Aberdeenshire and Kincardine, have a massive amount of expertise that can be utilised for tidal, wave and offshore wind power. We must ensure that we utilise those skills and transfer them to these emerging industries, and that those industries are made viable in the UK. If it requires Government support to kick-start them, that is fine with me. We will get to the stage where are exporting that expertise as well—we are good at exporting things.

In Scotland, we have the capacity to have lots more floating offshore wind and lots more offshore wind in general, but also lots more onshore wind. Again, we can utilise the skills we have. I urge the Government to reconsider whether they will have contract for difference support rounds for onshore wind and solar. We strongly feel that we can do more in that space in Scotland. About 75% of our electricity in 2018 was generated from renewable sources. We want to do better than that, but we can only do better if the Government reconsider their position on CfD support. We will continue to push strongly on that.

As I mentioned, there is a significant issue with visas for my constituents. In Aberdeen, we have people from the UK. The next nationality is Polish. I understand that the next is Romanian, and the next one after that is Nigerian. We have a significant percentage of Nigerians living in Aberdeen, and it is incredibly difficult for them to get visas, whether that is to work, to come as contractors or just to get their mum to come over to see their graduation. The knock-back in visitor visa numbers is significant. When the Government look at their new visa system, I urge them to think carefully about ensuring that we can access the expertise we need and that Nigeria and other Commonwealth countries, in particular, can access the expertise they need by having a flow of people between the two countries.

Brexit is also an issue in relation to visas. A significant number of people in the oil and gas industry are from the EU, and we need to ensure they can continue to move freely between the EU and Scotland. For example, Total has a presence in Aberdeen, and many people move between there and France. That movement needs to continue.

Lastly, on a just transition and net zero, my hon. Friend the Member for Aberdeen South (Stephen Flynn) mentioned that we want to ring-fence oil and gas revenues to ensure that we are moving towards net zero. That is not about changing the tax regime, but about hypothecating that tax. During the Budget process, we do not have the opportunity to make amendments to say that that is what we want. During the estimates process, there is not the opportunity to make amendments to ask for hypothecation to happen. However, we can press strongly and say that that is what we want to happen. We want the money to be ring-fenced so that we can move towards net zero. We ask that 12% of the revenue is ring-fenced for places such as Aberdeen, Falkirk and Shetland, which rely heavily on oil and gas and will need assistance to make a just transition.

My constituency has one of the highest numbers of public sector workers of any constituency in the UK. There are two council headquarters, a major teaching hospital and a university in my constituency. For people working in the public sector, providing support in order that we have a successful oil and gas industry, issues such as housing costs have been significant. When we move towards the transition period and there is a reduction in oil and gas, I do not want the people who have not worked in that industry, and who have found it incredibly difficult to scrape by living in such an expensive city, to be hit again.

I want the entire city to be assisted in the transition process, and all the people in Aberdeen and Aberdeenshire, not just those who work in oil and gas, to be helped to access the services they need and housing they can afford. That goes for Moray, Banffshire and other places. The just transition needs to happen for people working in oil and gas, but also for our city and region as a whole.

--- Later in debate ---

[Kwasi Kwarteng]

With permission, Mr Robertson, I will address carbon capture later in my speech. There is plenty of food for thought and actual policy that I would like to address, but I want to talk about the transition. It is important, as the hon. Member for Southampton Test suggested, that we get the message out that we do not see the end of the oil and gas industry in this energy transition. Oil and gas has a crucial part to play in that transition, not least because of some of the carbon capture issues I want to address later.

Let us be clear where we are today. Currently, 70% of primary energy demand in the UK is met by oil or gas. Some 85% of houses—I suspect this includes the houses, apartments and dwellings of most people in this room—rely on gas central heating. The Committee on Climate Change has said that there will be a continued need for oil and gas as we make our transition to net zero emissions. That is extremely important, and on that basis I would like to talk about some of the announcements we have made, particularly in regard to carbon capture, usage and storage.

We made a public commitment in the Conservative manifesto to invest £800 million in carbon capture, usage and storage. It could not be clearer than that. I am very hopeful that we will be able to make a significant announcement along those lines in the Budget, to honour our manifesto commitment. It is important for my Department. However, Members will appreciate that I am not the Chancellor of the Exchequer, and that the Budget is a matter for him and the Treasury. In a former capacity, I served as the parliamentary private secretary to the Chancellor of the Exchequer for 18 months, which in the context of the political climate was a very long time.

[Kirsty Blackman]

I congratulate the Minister on his speech. A number of Ministers have had responsibility for this portfolio in recent times. Claire Perry was a very big supporter of CCUS and did what she could to push it forward. I know that the Minister cannot commit to money in the Budget, because that is not his role, but will he commit to personally championing CCUS and doing everything he can to retain the £800 million commitment or to increase it if possible?

[Kwasi Kwarteng]

I give the hon. Lady an absolute assurance that I have been totally committed to CCUS. In fact, one of the first conversations I had when appointed was with a leading industry figure, who called me to say, “I hope you will deliver on CCUS.” I was very pleased to say, “I will absolutely champion this. It is central to our strategy.” We have legislated for a net zero carbon emissions target by 2050. How we reach that without CCUS is a mystery to me. CCUS should be at the centre of any strategy to hit net zero carbon emissions by 2050. The Government are absolutely committed to that.

I assure the hon. Lady that I am as committed, if not more so, than my predecessor to landing the technology, because it is crucial. The net zero carbon legislation was passed in June 2019, and within three weeks I was the Energy Minister, so it has really shaped my entire experience of the portfolio. For most of my predecessor’s tenure, we still had the 80% reduction target. It is now a much more serious and pressing concern, and I hope that we will be able to deliver on that commitment. In our next debate on oil and gas, I hope we will be able to say that we have CCUS investment and potential clusters.

On the point made by the hon. Member for Kilmarnock and Loudoun (Alan Brown), it seems to me that if we are going to commit large amounts of capital to CCUS, there will be more than one cluster. There is a debate about where those clusters and that deployment of capital will take place, but my understanding is that if we are going to commit that capital, it will not be in just one area.

It is not just about CCUS. The net zero strategy encompasses a wide range of technologies. We committed in the manifesto to 40 GW of offshore wind capacity, which is a huge step from our previous 30 GW commitment. It is a very ambitious commitment, and there will be challenges in meeting it, but I am convinced that the industry, in co-operation with Government, will be able to do so. We have also committed to £9.2 billion to improve the energy efficiency of homes. We are particularly concerned about fuel poverty.

--- Later in debate ---

[Stephen Flynn]

rose—

[Kirsty Blackman]

rose—

[Kwasi Kwarteng]

I see a forest of hands. I give way to the hon. Lady.

[Kirsty Blackman]

I appreciate that the Minister just said “in the course of this Parliament”, but the next five years is not the best timeline. Could he be a little more specific? Will the deal come in the next year or in the next year and a half? Alternatively, perhaps he could let us know when he will be able to tell us when it will come. That would be really helpful.

[Kwasi Kwarteng]

I am not going to play the game of saying some arbitrary date. It is a serious, ongoing discussion. As I said, we will have a sector deal in the course of this Parliament. I will not be drawn any more on the timings.

Recall of Tumble Dryers

Kirsty Blackman Excerpts

Monday 17th June 2019 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

This matter does not seem to have been handled well, either by Whirlpool or by the UK Government, from start to finish. Surely our first priority should be, as the Minister said, to protect our constituents and ensure that they are not at risk from fire. If there are still 500,000 unmodified products out there, and if the risk of them going on fire is 1%, we are looking at a potential of 5,000 fires. If the risk is half that, we are still looking at 2,500 fires and the risk to life that comes with them. What assessment has been made of the risk from the modified tumble dryers? Concerns have been raised that modified dryers are also continuing to go on fire.

The other thing I am confused about is why the Government took so long to take action, given that this issue was first recognised by Whirlpool in 2015. If it takes the OPSS and the Government so long to undertake a review and put sanctions in place against a company, there is surely an issue with the system. Will the Government, as a result of the issues raised, look at the product recall system in general and ensure that a review is undertaken, so that we no longer have such incredibly lengthy waits when products are recalled, and so that the Government can take action more quickly than they have done in this case?

[Kelly Tolhurst]

As I outlined earlier, the review of Whirlpool was a review of the modification programme. It looked at the effectiveness of the technical modifications and the adequacy of the outreach programme. The review concluded that there was a low risk from unmodified machines, and an even lower risk from modified ones. The wider review was concerned with the actions that Whirlpool took to resolve any risk of lint fires in its machines. I believe that its findings were robust and proportionate. The info that was provided to us via Which? and “Watchdog” and the testing carried out by Which? were also featured and taken into account in the review. However, the review very much focused on the technical effectiveness of the modifications.

The reason that this has taken so long, as the hon. Lady suggests, is that we followed due process in carrying out a substantial review, making our assumptions and providing Whirlpool with laid-down notice to come back to us with what it would do to rectify the situation. I would just highlight that part of enforcing consumer and product safety involves ensuring that we carry out a review when we believe that manufacturers are not fulfilling their obligations under the regulations, and that we follow due process in doing so. We will continue to do that where there are concerns about any product that is placed on the market. We will ensure that organisations and large manufacturers comply with the law.

Exiting the European Union (Structural and Investment Funds)

Kirsty Blackman Excerpts

Tuesday 19th February 2019 Commons Chamber

[Brendan O'Hara]

The hon. Gentleman makes the important point that we are discussing the SI before Report stage of the Agriculture Bill. I will come back to that. I do not necessarily defend the way in which the CAP is administered—the way in which every pound is allocated—but it is important to recognise the amount of money and support that the CAP gives UK agriculture, particularly those less favoured area support scheme parts of my west of Scotland constituency.

[Kirsty Blackman (Aberdeen North) (SNP)]

My hon. Friend is making a great speech. On the lack of certainty beyond 2022, are not those in farming communities planning a long way ahead for what they intend to do with their land? Certainty beyond 2022 would help them in their long-term planning for their stewardship role as well as for trying to make money.

[Brendan O'Hara]

My hon. Friend is right that it is vital that our farmers have the ability to plan into the future. At the moment, we enjoy that ability to plan long term, and the fear is that that is being taken away.

The common fisheries policy is co-financed in Scotland through the European maritime and fisheries fund, and Scotland is allocated 44% of the total UK figure, with £42 million—over 80% of the Scottish allocation—already committed to projects. Competitive funds are awarded directly by the European Commission to organisations, and that includes significant research, innovation and education exchange programmes. Since 2014, Scottish organisations have secured €533 million of Horizon 2020 funding, €65 million of Erasmus+ funding and €58 million of European Territorial Cooperation funding. Even since 2016, the European Investment Bank group has signed loans worth €2 billion for projects in Scotland.

These EU-funded programmes represent a vital source of funding to communities right across Scotland, but as I said earlier, they are particularly important to peripheral communities, which are in greater need of support. That is why, when the question was asked in 2016 whether we wished to remain part of the European Union, every single part of Scotland, without exception, urban and rural, said yes to staying in the EU. Our communities knew—and still know—the benefits of being a member of the European Union and the significant difference that that has made to their lives, economically, socially and culturally.

[Brendan O'Hara]

It is absolutely remarkable that all 32 Scottish local authority areas—urban and rural, with the vast differences that exist between them—said with one voice that we as a nation wished to remain in the European Union. That cannot and should not be ignored. Its significance cannot be underplayed.

The loss of the funds I listed earlier could be absolutely devastating for our farming and fishing communities. As yet, there are no guarantees about the continuity of these funds beyond 2020. Here we are, a month from Brexit day, and there is still no certainty for our farming and fishing communities as they plan for the future.

[Kirsty Blackman]

My hon. Friend is making a great point about funding. Does he share my concern that these communities will be hit doubly, because there will also be changes to immigration, which may mean they do not have access to labour? Given that some of our areas are suffering from depopulation, which we have worked very hard to counter, does he feel this is a double whammy that rural communities cannot afford?

[Brendan O’Hara]

My hon. Friend may well have been looking over my shoulder, because I was about to come on to that very point.

My constituency of Argyll and Bute is suffering from massive depopulation. We are losing population at a rate that we cannot sustain. We need to get people to come and live, work, invest and raise families in Argyll and Bute, and much of our plan is predicated on EU nationals coming to Argyll and Bute to fulfil that function. We are being denied access not only to funding, but to people. Unless we can find a way of squaring that circle, which I do not think is possible, then I fear for the future. That is why independence, with an independent Scottish Government being represented as an equal partner in the European Union, is without doubt the only way that Scotland is going to prosper.

It has been reported just today that the Environment, Food and Rural Affairs Secretary has told the National Farmers Union, in relation to UK farmers, that

“there is no absolute guarantee that we would be able to continue to export…to the EU”

under a no-deal scenario. This is the chaos into which we have descended.

As has been said, the UK Government have of course promised to replace EU funds with a much-vaunted UK shared prosperity fund, but despite all the repeated promises, still no detail or definition has been given about how that new structure will operate. May I ask the Minister when we will find out the detail of this shared prosperity fund, and when will we know exactly what it will mean for people across the UK, including for people in my Argyll and Bute constituency?

Will the Minister tell me, post-2020, when the cycle of these current EU funds comes to an end, how the proposed new system will operate? What consent and control will the devolved Administrations have in relation to this future funding model? What consultation has been carried out to ensure that this new system will have the consent of and remain consistent with the devolution settlement? Will he explain why, as I said to the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), this statutory instrument has come to the Floor of the House before the Agriculture Bill and the Fisheries Bill have even reached their Report stages in this place?

Given that the President of the European Commission has promised to support Irish farmers financially in the event of a no-deal Brexit, why have the UK Government not offered similar support to Scottish farmers? Finally, does the Minister agree that so much of this worry, angst and trauma we are being put through and putting other people through could all be prevented if the Government simply took no deal off the table?

FTSE 100 Company Pay Ratios

Kirsty Blackman Excerpts

Wednesday 23rd January 2019 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to take part in this debate, Mrs Moon, and I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on having secured it. It is unfortunate that it is not as well subscribed as I had expected it to be; I had thought that this was a great debate to be involved in, on an issue that matters a huge amount to an awful lot of people who live in all the countries of the UK. I will highlight a few figures, some of which have already been mentioned by the hon. Lady; I will also talk about what we are doing about some of these issues in Scotland, and what we would like to do about them.

The remuneration of FTSE 100 CEOs between 2009-10 and 2017-18, over the course of this Conservative Government, has gone up by 66%, which is a significant increase. One of the interesting stats that I discovered when I was looking into this issue is that in 1980, median FTSE 100 CEO pay was 11 times that of the median worker. By 2010, that had risen to 116 times the pay of the median worker—an absolutely massive increase that surely does not reflect an increased workload of that level. I imagine that those CEOs are not doing 10 times the amount of work they were doing in 1980, and that the people who are working at the bottom of those companies are working just as hard as they were in 1980. An increase in the ratio to that extent cannot be justified.

In 2017, the mean pay of a FTSE 100 boss was £5.7 million. Compared with many people who live in my constituency or throughout these islands, I have a significantly large salary. I am very grateful for that, but even on my relatively large salary, £5.7 million is a number that I cannot even comprehend. It is a ridiculous amount of money for people to be earning.

I understand that the hon. Member for Mitcham and Morden was talking not about the particular salary that those individuals receive but about the ratio, and that is what I want to come on to. The important point about this debate is that it is about equality, and it goes much wider than FTSE 100 companies. We have massive inequality throughout the countries of the UK and much more can be done to improve the situation. When seeking to improve things, I tend to say that we can do so in Parliament, because we have the ability to lead the way as parliamentarians. We often fail, but we have that ability. We also have the ability to legislate to ensure that FTSE 100 companies can lead the way for all companies across the UK in removing the levels of inequality.

It is not only the person on the street or the person working at the bottom of these companies who is unhappy; there is also continuing shareholder dissent. It is important that shareholders are empowered and have the ability to make changes. They are unhappy and there is backlash from them about the massive bonuses and huge pay increases received by CEOs. If we empowered shareholders a bit more, they would have the ability to make those choices to help reduce inequality throughout the companies. Shareholders do not want to be associated with a company that has a CEO receiving a massive salary, massive bonuses and massive pay rises while the worker working on the basic wage is having their bonus scheme removed, for example. It is important that shareholders who have that moral compass can make that mark on the company.

It is important to look at corporate governance legislation and regulations. The changes on reporting the gender pay gap are helpful, but they do not go far enough. It is good that we have reporting on the gender pay gap, but there should be something—not so much a carrot, as a stick—to ensure that the gender pay gap improves. It would be unreasonable to ask companies with a massive gender pay gap to reduce it to nothing in one year, but it would be reasonable for the Government to mandate companies to show progress in reducing the gender pay gap. That should involve not just saying, “This is what we will do about it”, but, “This is the timeline on which we expect to make progress. We will reduce our gender pay gap by 5% in the next two years and reduce it further after that.”

A similar approach could be taken to wage ratios. Companies could be subject to a reporting requirement to submit details on how they will improve the ratio with set targets, and they could be subject to some kind of punishment if they do not meet those targets, rather than them just saying, “This is what we are doing”, but with no set outcomes. That is where a lot of people are on gender pay reporting and ratios.

In Scotland, the Scottish Government have put social justice at the heart of civil service pay policy. Public sector employees in Scotland are paid at least the Scottish living wage, and we have no age requirement for that. Under-25s who would receive a lower minimum wage under UK legislation are eligible to receive the Scottish living wage if they work in the Scottish public sector, no matter their age. We recognise that just because someone is 24, it does not mean they have fewer outgoings than someone who is 25. They could be in exactly the same set-up, renting a flat and with a small child, whether they are 24 or 25. The Government desperately need to tackle the fact that under-25s are being paid less. The Scottish National party has been vociferously making that case at every possible opportunity, including my hon. Friends the Members for Glasgow Central (Alison Thewliss) and for Glasgow East (David Linden) with a ten-minute rule Bill.

The UK Government are not taking the necessary action, so we are asking them to give Holyrood the power to legislate on maximum and minimum wages. That would address the lower end of the spectrum where people should be paid an actual living wage—one that they can really live on, not a pretendy living wage—and, at the other end, maximum wages and bonus payments. We want power over wage ratios. That is not to say that we have a set idea of exactly how we would legislate on high wage ratios, but if Holyrood had the power to do so we could at least have those conversations and consultations. We could come up with a policy that would work for employees, shareholders and the general public. We believe that we are more likely to take action than the UK Government, given their track record. They have not moved as far as we would to tackle inequality in Scotland.

In terms of SNP policy, in June 2018 we had a very good debate at SNP conference about wage ratios. We agreed as a party—our policy is made at party conference—that wage ratios would be one way to tackle inequality and that we would consider it and take it on. An independent Scotland would have a wage ratios consultation and discussion and, if possible, a policy. We would look at the best possible way to do that.

I want to talk a little about the real living wage and employment in Scotland. Employment law is reserved to Westminster, which we have argued against because the SNP and Scottish parliamentarians in general—this view is not reserved to the SNP—have much more respect for workers’ rights, so there is much more likelihood of them improving if we had the ability to legislate in our Parliament. Despite not having power over the issue, we have tried to make changes in our society and, to a limited extent, we have. A lower proportion of people in Scotland are on zero-hours contracts than in any other nation of the UK. The Scottish Government were the first Government in the UK to become a living wage employer, so we are putting our money where our mouth is. We are saying to people, “We are proving that we can do this. We are proving that we will put workers’ rights at the heart of what we do. That is why we believe that Holyrood should have power over that.”

Down here, we vociferously opposed the Trade Union Act 2016. We disagreed with a huge number of things in it. It is incredibly important that we have strong trade unions. If trade unions had the abilities that they previously had, their voice would be heard much more loudly. It would be amplified by the legislation, rather than quashed. Wage ratios would be tackled much more vociferously by the trade unions.

In this Parliament, we have also promoted a Bill to ban unpaid trial shifts, which would give rights to those workers who are forced to work for nothing while doing a trial shift. We promoted a Bill to give workers in precarious work the same rights as employees. It is incredibly important to ensure that they enjoy the same rights as people in more stable employment. In fact, it is even more important for someone in precarious work to have those rights than someone in work that is a bit more stable. That was a good Bill, promoted by the SNP.

Our most recent Bill was on employment rights. It would have stopped gig economy workers and small and medium-sized enterprises getting late payments, which is important for cash flow. Our Bill made clear the importance of someone working in the gig economy being paid on time.

Lastly, I want to talk about what the Scottish Government have done. In Scotland, we have the fairest income tax system in the UK. Some 55% of our taxpayers pay less than they would if they lived elsewhere in the UK. About half of English taxpayers pay more than they would if they lived in Scotland. It is the lowest-paid workers, not those at the top, who are paying more in England and less in Scotland. Next year, the top 1% will be asked to pay a little more on their income, and the remaining 99% will pay the same or less than at present. I therefore suggest that the Scottish Government’s policy on income tax is much better and fairer than that of the UK Government.

We are regularly attacked by the Scottish Tories for what we have done to improve fairness in income tax, but since we introduced the Scottish rate of income tax and varied the rates, our economy has grown faster than that of England, so the suggestions that all sorts of chaos would follow have not come to pass. There is a real difference between the actions of the Scottish Government and those of the UK Government. At every opportunity the Scottish Government have pursued fairness and attempted to reduce inequality, and the Bills that the SNP has promoted down here have attempted to reduce inequality in the whole of the UK because workers’ rights are currently a reserved matter.

Holyrood does not have the full range of powers over this matter. We want workers’ rights to be devolved to Scotland. However, given the chaos that is happening and the impact that Brexit will have on the lowest paid in particular, it is increasingly evident that Scottish independence is the only way forward. If Scotland had control over workers’ rights, we would make better decisions than the UK Government are currently making, and that makes the case for Scottish independence ever stronger.

[Laura Pidcock (North West Durham) (Lab)]

I thank my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for securing this important and timely debate. Such debates expose our politics and the difference between political parties. It is vital that we discuss not only pay ratios, but solutions to extortionate pay, such as an excessive pay levy, and improved collective bargaining for workers through strong trade unions as a way to uplift the pay of millions of workers. It is also crucial that we are able to place the extortionately high pay of FTSE 100 chief executives in the context of low pay and the crisis of work in this country, where millions struggle to make ends meet, and where work is certainly no longer the preventer of poverty, which is a reality for millions of people.

Despite this state of affairs, as was mentioned, by lunchtime on 4 January, the top chief executives in the UK had been paid more than their average employee is paid in an entire year—an extraordinary fact. Every single year, that date and time comes sooner in the year. Unless action is taken, it will be one minute past midnight on 1 January when those people will have been paid much more than their employees. Every year, the Government take no action on that extraordinary fact. Those at the top are increasing their wealth.

I agree with my hon. Friend: perhaps this place should relax a little, because “fat cats” is exactly the right title for those executives who now get 133 times more than the average worker, which means that the salary of the average FTSE chief executive is the same as that of 386 workers on the minimum wage. It is politically poignant to note that some people are not outraged by that statistic. They are quite comfortable with the inordinate, huge salaries of executives who are paid grossly more than those who work for them.

I am sure that nobody would argue—my hon. Friend touched on this—that a FTSE 100 chief executive works 133 times harder than a hospital porter, a cleaner or a caterer. I went on a solidarity protest yesterday with strikers at the Ministry of Justice and the Department for Business, Energy and Industrial Strategy. Let us think about the caterer on exactly £8 an hour fighting for the London living wage. That works out at about £1,280 a month if they work a 40-hour week every single week of the month. If we think of rent, transport, bills and food, that person has a tiny amount to live on every month. I am sure nobody would argue that a FTSE 100 chief executive works 133 times harder than a teacher or a nurse in our NHS, or that they somehow have a combined worth of 386 workers.

[Kirsty Blackman]

The hon. Lady is making an incredibly powerful point. Does it annoy her as much as it annoys me that the Tories talk about hard-working families, but they do not mean hospital porters? They mean people who are much higher up the tree. Hospital porters, cleaners, chefs and the people she talks about work incredibly hard every day just to make £8 an hour.

[Laura Pidcock]

And that work should be valued. It is no coincidence that those people who work really hard, but very often still cannot survive and do not have enough money to pay the bills, get into debt to pay for everyday items—not for luxury holidays, or any luxuries at all. Those people should be at the heart of our concerns in this place. I am mindful never to use the word “earn” when we talk about the pay of the very few at the top. What could they possibly do to earn such large amounts of money?

It is crucial to recognise the context in which FTSE 100 pay ratios are widening. In a stark contrast to the stockpiling of wealth by a few, years of austerity and wage stagnation mean that millions of workers across the country struggle to make ends meet, as I say. In-work poverty is rising and household debt is at its highest rate. Many people rely on borrowing, and one in five workers—more than 5 million people—are paid less than a living wage. That is a huge increase from 3.4 million in 2009. Insecure work has without a doubt become the norm, with nearly 4 million people—one in nine workers—facing uncertainty and worry. They are trapped. To illustrate the low-pay trap, one in four employees earning the minimum wage for five years has been unable to move out of that low-pay trap. Some people do two or three jobs to try to pay the bills, but it has not always been like that.

In 1980, as was mentioned, the median pay of directors in FTSE 100 companies was £63,000, and median pay across the country was £5,400. The ratio of executive pay to the average wage then, less than 40 years ago, was 11:1. In 2002, the pay of a FTSE 100 CEO had shot up to 79 times that of their average employee, and last year it had reached 150 times. This place is doing nothing to stop that runaway train of inequality. I seriously hope that those ratios are unacceptable and completely unjustifiable to anyone. It is particularly obscene that this escalation has come at a time when millions of people are struggling. There is a stark contrast between those two sets of people.

No doubt the Minister will refer to the Government’s reforms to tackle excessive pay in her speech shortly, but I want to make it absolutely clear that under this Government, not only has pay inequality continued to rise, but so has the speed at which it increases. I am proud that Opposition MPs are committed to taking action, because doing nothing is not good enough. When I have been out campaigning, loads of times I have heard people say, “The rich continue to get richer and the poor get poorer. There is nothing we can do about it,” but I fundamentally disagree. Yes, the rich are getting richer, but we can definitely do something about it.

In contrast to the Tories, a Labour Government would ensure pay ratios of no more than 20:1 in the public sector, for example, and we would introduce an excessive pay levy that would charge a 2.5% levy on earnings above £330,000 a year, which is a huge amount, and 5% on those above £500,000. It is estimated that that alone would raise £1.3 billion a year.

I am sure that the Minister will mention that from 1 July the Government will ensure that companies with more than 250 employees will be obliged to reveal and justify their pay ratios. However, there is no obligation on those companies to take any meaningful action beyond the act of publishing those facts. It is yet more empty rhetoric. How is it helpful just to have the injustice out there, without any action to remedy it?

We need practical, political solutions to curb undeserved excessive pay, and to create mechanisms for better income distribution. That is why we commissioned a report by Prem Sikka, published last year, suggesting a range of measures that would apply to the more than 7,000 companies in the UK that have more than 250 employees, accounting for more than 10 million workers. Needless to say, we are looking at the report’s recommendations closely, including proposals requiring executive remuneration packages of all large companies to be subject to a binding vote.

That is just one solution to excessive executive pay. Trade unions are the collective voice of workers, and they have to be central to the debate. They are a huge player in reducing inequality in the workplace, but, after years of anti-union policies, the vast majority of workers have absolutely no say over their pay, conditions or hours of work. Protections that existed before under collective bargaining agreements have been completely lost.

Workers deserve a lot more. Pay ratios are just one aspect of tacking pay inequality. That is why a Labour Government would set up a new Department to roll out sectoral collective bargaining—protecting the interests of workers, strengthening trade unions, and introducing new rights and freedoms so that every worker gets the support, security and pay at work that they deserve.

Surely it is time to end the excessive greed. People are feasting on the backs of workers who are struggling to make ends meet, and who have the gut-wrenching feeling that they cannot afford nappies for their children, even though they work more than 40 hours a week. Surely that cannot be right. The Government must act to end that injustice.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing today’s important debate. She has a strong, long-standing record of campaigning on behalf of low-paid workers in the economy. I highlight the constructive way in which she approaches working across the House on some of these issues; I know that she secured an Adjournment debate on whole-company pay policy last July.

Executive salaries and pay ratios are undeniably high. Currently, the ratio of the pay of the average FTSE 100 chief executive officer to that of the average UK employee is around 160:1, based on the mean. The median average is 145:1, but it is important to set current levels of pay in a longer-term context. The data shows that executive pay more than quadrupled from the late 1990s to the early 2010s. Pay ratios increased over that period from 47:1 in 1998 to 132:1 in 2010. However, that has stabilised in the last five to seven years, albeit with minor fluctuations from year to year.

The High Pay Centre, which campaigns against high levels of executive pay, acknowledged in its most recent report that UK executive median pay peaked at £4.2 million in 2013, and is around £3.9 million for the latest reported year. That puts the UK on a par with Germany and only slightly above other major EU countries on executive pay levels, despite our quoted companies generally being much larger. In the US, CEO pay is much higher. Median CEO pay for Standard & Poor’s 500 companies in 2017 was around £9.3 million, giving the US a pay ratio of 399:1.

That sets the context, but it is certainly not grounds for complacency. Shareholders and people in wider society have increasingly been questioning how such wide differentials can be justified, both in terms of individual performance and in relation to company pay policy as a whole. The Government share those concerns.

We do not believe that it is the job of the Government to set company pay levels or impose arbitrary caps. However, it is our position that there must be transparency and accountability in executive pay, and that shareholders must have the information and the powers to challenge unjustified pay in the boardroom. That is why we legislated in 2013 to require listed companies to secure binding shareholder approval for their executive remuneration policies at least once every three years, and to disclose every year the total single figure that each director is paid.

It is also why we are continuing to take steps to force companies to disclose and explain how executive pay is matched by performance, and how it relates to wider employee pay. In particular, we recently introduced a new requirement for companies to disclose and explain every year the ratio of their CEO pay to the average pay of their employees. I am pleased that the hon. Member for Mitcham and Morden welcomed the legislation, which came into effect at the beginning of this year, meaning that companies will have to report their ratios when they publish annual reports next year.

Pay ratio reporting will, for the first time, show systematically and clearly how pay at the top of quoted companies relates to pay across the rest of the company. Companies will have to report each year the ratio of the CEO’s pay to both the median and the quartile employee pay at the company. The hon. Lady expressed concerns that the pay ratio was being calculated only in relation to the median; in fact, we require pay ratios to be published for the first quartile, the median and the upper quartile. We thought hard about whether to use the median or the mean, and finally decided on the median as a more robust figure. In part, that was a response to the TUC, which argued strongly that we should use the median. In most cases, we use the median because the result is the bigger ratio.

Shareholders, employees and others will get a clear and consistent picture from year to year of how CEO pay relates to pay across the whole company. Companies will need to explain the reasons for any change from previous years, and any pay ratio trend over time. They will also need to explain whether any change is due to a change in the company’s employment model—for example, if the reason was the outsourcing or offshoring of low-paid workers. Critically, the company will have to explain whether, and if so why, it thinks that the ratio is consistent with the pay, reward and progression policies of the company’s UK employees as a whole.

Those pay ratio explanations will be watched closely by investors, who are strongly behind the new pay ratio reporting, as well as by employees and wider society. Any company that puts forward weak or misleading explanations can expect to face significant shareholder and public criticism. As the Financial Times wrote in 2017 when we announced the plans,

“a single-figure ratio will attract attention. And that will help investors curb companies’ attempts to inflate chief executive pay—and the pay gap”.

Pay ratio reporting is part of a wider package of reforms aimed at making a real change to the level of engagement between boardrooms and employees. That package includes an important new provision in the UK corporate governance code for remuneration committees to consider workforce pay alongside executive pay, and to engage with the workforce to explain how executive pay aligns with wider company policy. It is too early to tell what the impact of the new reforms will be. The Government expect companies to respond positively and creatively to the new requirements, recognising that no one size will fit all and that there will be a variety of approaches.

We are already seeing some encouraging progress, on a voluntary basis, this year. For example, Marks & Spencer has agreed that the chair of its business involvement group, which represents the interests of the company’s 81,000 staff, will be invited to attend two boardroom meetings and at least one remuneration committee meeting each year. We must also remember that pay ratios are determined by average pay in the workforce, as well as by pay at the top, so ratios will fall where average pay increases faster than executive pay. In that respect, the Government are taking steps to boost the wages of working people through our industrial strategy to deliver better-paid jobs across the country, our £37 billion productivity investment fund and our increase in R&D investment to 2.4% of GDP by 2027.

We have taken concrete action for low-paid workers by introducing the national living wage, which is on track to hit its target of 60% of median earnings by 2020. Its introduction marked a pay rise for more than a million workers across the UK and has helped to deliver the fastest wage growth for the lowest-paid in 20 years. In April, we will increase it again to £8.21 by an inflation-busting 4.9%—an increase in earnings of more than £690 a year for a full-time worker, and a total pay rise of more than £2,750 a year since we first brought it in. Up to 2.4 million workers are estimated to benefit.

Real progress is being made for hard-working people. As a working-class Conservative MP—as a Tory—when I speak about hard-working families and hard-working people, I find that I am accused of referring to higher earners. As somebody who undertook many of the jobs outlined in this debate before I came to Parliament, I actually find it offensive that when I talk about hard-working people, I am accused of not referring to hard-working people separated across our economy.

[Kirsty Blackman]

I appreciate the Minister’s honesty. The problem is that when the middle-rate income tax threshold goes up, there are Conservatives who make the case that it will improve life for hard-working families, but very few people in the jobs we are talking about are making £43,000 a year. Maybe the Minister needs to tackle the issue with some of her colleagues.

[Kelly Tolhurst]

I thank the hon. Lady for clarifying her point, but I have to say that it is this Government who have increased the threshold year on year. As a working-class Conservative MP, I am proud to say that I am standing up for hard-working people—and when I talk about hard-working people, I mean people who go out every day to earn a living, no matter what sector they are in or what job they are doing.

The Government have responded to the challenging world of work with plans for the biggest upgrade of workers’ rights in 20 years. In December we published the good work plan, which sets out how we will implement the recommendations of the Taylor review. The plan commits us to introducing a right to request a more predictable and stable contract for all workers and to bringing forward proposals for a single workers’ rights enforcement body in early 2019.

Oil and Gas Industry

Kirsty Blackman Excerpts

Tuesday 9th October 2018 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Falkirk (John Mc Nally) for obtaining the debate. The timing is good, as other Members have mentioned, given that we are in the run-up to the Budget.

I want to talk first about Brexit, which several colleagues from throughout the House have mentioned. The economic report put out by Oil & Gas UK makes the point that 7% of the offshore workforce are from EU countries and refers to the fact that before Bulgaria joined the EU it took four days for goods to come from there to Aberdeen to be used in the oil and gas industry, but that they were routinely held up for an additional week because of customs controls. If we do not have a customs union deal that allows for those goods to come through the border without being held up for a week, it will cause problems for our supply chain companies and for the wider industry. A fifth of people living in Aberdeen were not born in the UK. We have done immensely well at attracting immigration, which has been good for our industry. It is a huge concern that that might be less easy after Brexit, particularly if the immigration plans mentioned at the Conservative party conference go through and we end up in a situation where very few immigrants are allowed to come to the UK. That would cause a real problem for my city and for the oil and gas industry as a whole.

The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) set out particularly clearly the requirement for a stable taxation regime for the oil and gas industry. One of the points most often raised with me is that if there is a story in the Financial Times about the possibility of the Treasury increasing, or massively changing, tax in relation to oil and gas, that story alone causes a problem for the industry—it makes a dent. We need a clear commitment from the Chancellor in the Budget to stability and predictability in the taxation regime.

[Colin Clark]

We were both at the same meeting when the Exchequer Secretary to the Treasury came up. I think it was the myth being peddled that did the damage—he clarified it from the Treasury. Does the hon. Lady agree?

[Kirsty Blackman]

I do not disagree at all. I understood that that was a private meeting, so I did not want to talk about what that Minister said during it, but it would be good if the Chancellor could make a clear statement in the Budget. I agree that it was the myth, rather than any statement by the Treasury, that caused the problem. I am sorry; I thought I had been clear on that point.

There are other asks for the Budget. I have not heard anyone on the Opposition Benches being negative about transferable tax history. I apologise to the hon. Member for Gordon (Colin Clark), but I was calling for that in March 2016, which was more than a year before he was elected. We have consistently called for changes in the taxation regime for late-life assets. I have made the case for that on many occasions, and I am pleased that it may be coming through—we hope it will. It is a good example of the industry working together. Things have happened a bit more slowly than I would have liked, but the industry worked well with Government, and the conversation went well about trying to make the tax regime work from the point of view of both the Government and the industry.

The importance of transferable tax history is because of what happens when assets at the end of their life are transferred to another company. Something that belongs to a big company with many different onshore installations will probably not be its No. 1 priority, but if it belongs to a new entrant and is all that it is concentrating on, it will be a priority. That is why transferable tax history is so important for maximising economic recovery.

The point about end-use relief is a good one. My hon. Friend the Member for Falkirk and the hon. Member for Waveney (Peter Aldous) both mentioned it. Whatever happens, it is vital that the Government should speak to the industry about the best way to make the change work, if there is to be a change, and that as much notice as possible should be given of changes to end-use relief. We nearly had a big disaster in July, with the pulling of end-use relief. It is clear that that cannot happen. The industry and the Government need to continue to speak to each other to make it work better.

The final Budget matter I want to speak about is the sector deal. If the Chancellor could announce progress on that it would be phenomenal—excellent. I would be really pleased. If not, it would be good to know when a commitment is likely. My impression from speaking to those in the industry who worked on the deal is that they feel they worked together incredibly well on it. They feel that the proposal that has been put forward to the Government reflects the industry’s needs and requirements, so it would be positive if the Government brought it forward sooner rather than later.

I want to talk about “Vision 2035” and focus on the subject of the debate—the future of the oil and gas industry. I will not talk much about the industry downstream—I apologise to anyone involved in it—because I represent Aberdeen and because my hon. Friend the Member for Falkirk, who represents Grangemouth, and the hon. Member for Waveney have spoken about that important aspect of the industry. “Vision 2035” is the Oil & Gas Authority’s vision for securing the supply chain and the oil and gas industry in the north-east of Scotland to ensure that, in 2035, it still makes money for the Treasury, supports our local economy and provides jobs in the local area. That will happen only if the Government provide support now, including the stable fiscal regime that we spoke about earlier and support for the supply chain. They must talk positively about the industry, consider its asks, and make changes if need be.

The North sea field is a late-life asset—it is incredibly mature. It was one of the first fields in the world to reach that level of maturity, so our engineers who go out there are doing incredibly innovative things. They are working on enhanced oil recovery, bringing in tech in the supply chain, and using longer tiebacks so that small pools can be exploited. It is groundbreaking, world-leading stuff; this is the first time some of it has been done. If we get the technology right, we will be able to export it around the world even when there is no oil and gas in the North sea, but we must ensure that those companies stay anchored in the north-east of Scotland and the wider area.

The hon. Member for Gordon mentioned how many oil and gas companies he has in his constituency. I am sure he has more than I do, but I have the services that support those companies—two local authorities, the hospital and all the other vital things that the industry requires. As the hon. Member for West Aberdeenshire and Kincardine said, it is hon. Members from the north-east of Scotland and those who represent constituencies with oil and gas industries who come to speak in debates like this. I have taken part in many such debates in my time as a parliamentarian, and it is interesting that we and Conservative Members are largely asking for the same things: transferable tax history, the sector deal and support for the Oil & Gas Technology Centre, which is doing absolutely phenomenal work. Previously, we were asking for the Aberdeen city deal. We are calling for the same things because we all go out there and speak to people who work in the oil and gas industry, and the companies involved in it. We ask them what they need, and they say pretty consistently that the most important things are stability and predictability.

Support for exploration is also hugely important just now. Anything that can be done to encourage exploration and help big projects be signed off will be incredibly important. More big projects have been signed off in the past year than in the previous couple of years, which is hugely welcome news, but we need them to keep coming through the pipeline so that we can secure the future economic benefit.

Hon. Members in the Chamber largely speak with one voice and have the same asks for the oil and gas industry, but I sometimes feel like we do not make as much headway with Ministers in the Department for Business, Energy and Industrial Strategy and the Treasury as we could. I hope that the Minister hears everything we are asking for. We are all calling for the same things, because we are reflecting the voice of the industry. I would very much appreciate it if he would ask the Chancellor to make a clear commitment to a stable fiscal regime in the Budget.