Science and Research

Paul Blomfield Excerpts

Wednesday 24th June 2015 Westminster Hall

[Paul Blomfield (Sheffield Central) (Lab)]

I beg to move,

That this House has considered science and research in the UK and regional economies.

I am delighted to do so with you in the Chair, Mr Owen, and I take this opportunity to welcome the new Minister for Universities and Science to his job. I am looking forward to having many engagements with him on issues relating to higher education.

I move this motion as a Member representing a city whose wealth was built on innovation, from Benjamin Huntsman’s invention of crucible steel production in the 1740s to Harry Brearley’s invention of stainless steel in 1912 to the work today of Sheffield University’s Advanced Manufacturing Research Centre. Science, research and innovation have driven our city’s economy, just as they have for the country as a whole.

However, we face a challenge, because a generation ago the UK was one of the most research-intensive economies in the world and now we are one of the least. We have slipped from leading the OECD countries in research and development spend as a percentage of GDP in 1979 to our position now, where we trail behind all our competitors. The US invests 2.8% of its GDP in research; on average, OECD and EU countries invest 2.4% of their GDP in research, but the UK now spends only 1.7% of its GDP on research. That is less than half the 3.9% of its GDP that is invested by South Korea, which, as a result of that investment, remains a major manufacturing nation.

Where have research and innovation been lost? Most strikingly, they have been lost within the private sector. The old world of R and D was dominated by the big companies—the likes of GEC and ICI—and their loss took out big chunks of our innovative capacity. The obsession with short-term returns for shareholders, which distorts our equity markets, has changed the attitudes of investors. The dynamic of long-term investment for long-term reward that drove the industrial revolution and built our economic strength has gone. Today there are just two UK companies among the top 100 companies around the world for R and D investment.

For some time, the impact of the decline in private sector investment in R and D was masked by the continued public sector investment of successive Governments, but that changed under the coalition, despite the best efforts of David Willetts, who occupied the Minister’s job for most of the coalition’s time in office and was a real champion of science and universities. As the Campaign for Science and Engineering highlighted in its “Science is Vital” campaign last year, publicly funded research slipped to less than 0.5% of GDP in 2012.

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

I warmly congratulate my hon. Friend on securing this important debate. Does he agree that the situation is all the more perverse given that for the research investment that is made—particularly significantly through universities—we get more bang for our buck than other countries in citations and innovation, and therefore that if we put in more bucks we would get more bangs?

[Paul Blomfield]

I am grateful to my right hon. Friend for that intervention, and he makes a point that I will come back to and reflect on shortly.

The drop in our publicly funded research to 0.5% of GDP takes that research to its lowest point for more than 20 years. The latest figures, published by UNESCO in March, put the UK’s publicly funded research at 0.48% of GDP, which is well below the EU average of 0.67%, the OECD average of 0.71% and the G8 average of 0.77%.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on securing this important debate. He has dwelt a lot on the percentages and on where the UK stands in the league table, but is that situation solely down to investment and finance? What does he put it down to? What is the difficulty? He said that the UK now has only two companies that are ranked highly in the world for R and D. What is the fundamental problem?

[Paul Blomfield]

The fundamental problem in relation to private sector investment in R and D is the dominant culture of short-termism in investment. People are looking for quick gains, but what we need to rebalance our economy is the long-term investment that drove economic growth in this country in the first place.

Echoing the point that my right hon. Friend the Member for Oxford East (Mr Smith) made, according to a report produced by CaSE last year, “The Economic Significance of the UK Science Base”, private sector R and D output rises by 20p per year in perpetuity for every £1 spent by the Government on R and D, so there is a real return on public sector investment and it stimulates the private sector investment that the hon. Member for Upper Bann (David Simpson) referred to by raising the UK’s knowledge base.

That is the real challenge, but there are also real opportunities, because as a country we have enormous strengths, above all our universities, which are highly productive. To echo again the point that my right hon. Friend the Member for Oxford East made, despite representing only 4.1% of the global research community, UK researchers produced 15.9% of the world’s most highly cited papers in 2011, the last year for which I have figures available. That puts us at No. 1 in the world in the sector. Crucially—I make this point as a northern MP—at a time when we all share a concern about the regional imbalance of economic growth, universities are one of the few assets we have that are spread evenly across the country, and they are able to generate economic growth in all regions and all nations of the UK.

Clearly, universities draw their investment widely, from several sources, and not just from public funds. They have grown their own investment in R and D by 40% in the past decade and now generate more than £3.4 billion a year. However, public investment levers in other funding, and academics in receipt of research council grants have been shown to be more outward-facing and more engaged in the commercial application of their research.

The strength of that research in our universities attracts foreign investment to the UK, as well as international students. According to a British Council survey of 5,000 18 to 34-year-olds from China, India, Brazil, Germany and the US, the fact that the UK had world-leading academic research was the primary attraction for them to come here and study in our universities. Those international students bring more than £10 billion of economic benefit to the UK, including to our regional economies. I know that in Sheffield alone the net value of our international students, who are approaching 9,000 in number, is £120 million a year. Thousands of jobs depend on that money, and not just in the university sector.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a profound point about the impact that our first-class universities have on regional economic development. However, is he as concerned as I am that more than 90% of non-university research in the UK takes place within the golden triangle of Cambridge, Oxford and London, which means that, outside universities, the regions are starved of scientific investment?

[Paul Blomfield]

I am indeed, and my hon. Friend—a fellow northern MP, albeit on the wrong side of the Pennines—makes an important point.

[Graham Stringer]

I went to university on the other side.

[Paul Blomfield]

Indeed—I know that my hon. Friend is proud to be a graduate of Sheffield University. He makes an important point, and we need to be careful that even with the positive developments such as the Francis Crick Institute in London, public investment in research does not get sucked into the golden triangle that he referred to at the expense of universities around the country. As I said a moment ago, the great strength of our university network is its dispersal around the country. We need to ensure that funding for research is spread across the sector and across the country.

[Rachael Maskell (York Central) (Lab/Co-op)]

York has two excellent universities. The University of York is ranked in the 10 top universities for research, and five of its departments are in the “excellent” category, right at the top of their league. Yet the relationship between jobs and growth in our city and academic achievements in research and development is not being built. Should not the two come together for economic growth across our city?

[Paul Blomfield]

I was a student in York and am well aware of the strength of the two universities. My hon. Friend is right; linking research with its commercial application is critical. Some progress has been made with the impact approach taken in the sector, although there is more to be done. We considered that issue in the Select Committee on Business, Innovation and Skills during the last Parliament. Although there is more to be done, we should recognise that a huge amount is already being done to link research and its application. I shall mention a few examples from Sheffield.

We would be foolish to lose our advantage in world-leading research, but that could happen if we do not take care. “The Plan for Growth”, published by the Chancellor and the Minister’s predecessor in December 2014, acknowledged the challenge:

“If we fail to move quickly to secure our position in a globalised world, then it is highly likely that other countries....will do so ahead of us. We not only run the risk of missing out on new opportunities, but also of losing the position of strength that we have today”.

The Government acknowledge that we can and must do more.

Innovation policy now needs to focus on developing industrial and private sector research and development capacity, building on the UK’s strong and well connected science base. It will do that by working with universities. For example, to take up the point made by my hon. Friend the Member for York Central (Rachael Maskell), the University of Sheffield works closely with Rolls-Royce, Boeing and more than 100 supply chain companies. Also in my constituency, Sheffield Hallam University secured Toshiba as the first technology partner in the Advanced Wellbeing Research Centre, designing new products to help promote the integration of exercise into people’s daily lives and address common health issues. Hallam’s new National Centre of Excellence for Food Engineering is supported by more than 40 companies, including Mars and Nestlé UK, to support growth in the food industry through improved manufacturing technology and staff capability.

Across my city, and across the university sector, science and research are creating jobs, but we could do more.

[Liz McInnes (Heywood and Middleton) (Lab)]

My hon. Friend talks about research in universities, but it starts earlier than that. On Saturday, I was privileged to visit the excellent Hopwood Hall Further Education College in my constituency, including its excellent animal studies facility. Small amounts of research are being done there, which helps students on their path towards university. However, funding for FE colleges is being cut, and I wonder what impact that is having on the availability of fledgling research for those wanting to go to university.

[Paul Blomfield]

My hon. Friend makes an important point about acknowledging research taking place outside the university sector. I said earlier that foreign investment is driven significantly by countries with strong research capacity, but it is driven equally by countries that commit to the development of skills. The cuts in the adult skills budget that my hon. Friend mentions, and particularly in further education, will weaken our capacity and our potential for economic growth.

We could do much more than is being done in the examples I have given. We could build partnerships in developing infrastructure for low-carbon energy, which we could then export to the world. If we shrink away from such a challenge, China will pay for the new generation of power stations to be built and we will miss out on the opportunity to help shape our own future. We will have little leverage in insisting that some of the investment is spent on creating jobs in the UK, and we will pay for it through increased electricity bills for decades.

What should we do? I have three suggestions. First, let us stop making things worse. We should recognise the damage done to the UK by the structural shortcomings of our economy. Research and development is a national asset and we must not incentivise companies to do less of it, or make it harder for our universities to transform our economy.

Secondly, we must certainly not threaten the important stream of research funding that comes through our membership of the European Union, because as I am sure the Minister knows—I am sure he will endorse it—the UK does disproportionately well from European Union research funding. In 2013, for example, the last year for which data are available, we won €1.11 billion out of the €9.6 billion allocated under the seventh framework programme, FP7, which was the predecessor of Horizon 2020. Were we to exit the EU, that would clearly be at risk, at enormous cost to our universities and the communities in which they are driving economic growth. Similarly, we must not undermine the flow of talent into our country by the types of measure that we have already seen affecting students or by new restrictions on tier 2 visas. I am sure the Minister agrees with me on that point as well, although whether all his colleagues will is another question.

Thirdly, we should recognise and maintain our strengths. We should build on what we have that is positive and do more of it. The UK catapult centres, where universities and industry work together, are making an important start. At the Advanced Manufacturing Research Centre in the Sheffield city region, more than 100 companies partner with university research to win jobs and orders for the UK. Some of them are giant companies, such as Rolls-Royce, and others are the high-tech supply companies that support them.

It is not only the companies that benefit. Research demands skills, and more than 600 young people are now training as advanced apprentices at catapult centres. They are fully funded by companies, as recognised by Times Higher Education in its widening participation initiative of the year award. Those people are working in a research environment and have the opportunity to progress to degrees, even MBAs and PhDs, all within a research setting. How was the AMRC in Sheffield built? By universities and industry working together, and through European funding and regional funding under the old regional development areas.

We should invest in other areas too, with a sense of national purpose. Our ageing society will face huge human and social costs as incurable neurodegenerative diseases such as Alzheimer’s become even more common. Social, technical and medical innovations are urgently needed to deal with this, as the NHS struggles to deliver more with more limited resources. Places such as the Sheffield Institute for Translational Neuroscience will make that possible. We know that we need to decarbonise our energy supply, but the existing low-carbon alternatives are just too expensive. Research and innovation will change that.

We also need to build capacity. The Chancellor has talked about our economy needing an “extra gear”. That extra gear is research and innovation. We need more capacity in our industry, but that will not happen if we do not support the research strengths of our universities. Every industry—every city and region—needs transformational research to drive the growth and wealth that we all need. In the last Parliament I served on the Business, Innovation and Skills Committee, and we highlighted that challenge in our report on business-university collaboration, in which we recommended unanimously—in a cross-party Committee dominated by Government Members—that the Government aim for 3% of GDP to be spent on R and D by 2020. Above all, I would welcome the Minister’s response on our Committee’s challenge.

We are at a crossroads. The erosion of the UK’s capacity to innovate technologically was not inevitable; it was the unintended consequence of a series of choices made over decades. But we can reverse it. If we do not, we will be condemned to continue on our trajectory of low growth and poor trade performance and will ultimately lose power over our own economic destiny. I urge the Government to recognise the vital contribution of research innovation to the UK, to ensure that we can thrive in a globally competitive environment.

[Several hon. Members]

rose—

--- Later in debate ---

[Paul Blomfield]

The number of Members present and the quality of the debate reflects the importance the House places on this issue, as well as the need for the Government to get it right. My right hon. Friend the Member for Oxford East (Mr Smith) made a powerful case about the impact of research in Oxford. That is important, because while Oxford is often seen as one of the classic ivory towers, he demonstrated how such research works with business to develop economic growth. Oxford is utterly engaged in driving the local economy, just as other universities are around the country.

I appreciated working on migration with the right hon. Member for Cities of London and Westminster (Mark Field) in the previous Parliament and I recognise that he is not alone in his thinking on the Government Benches. Indeed, I think it was three or four years ago that the Minister wrote a powerful piece in the Financial Times that explained where the Government were getting their policy wrong on international students and I hope that he will continue to make that case within Government.

The hon. Members for Strangford (Jim Shannon), for East Antrim (Sammy Wilson) and for Kirkcaldy and Cowdenbeath (Roger Mullin) underlined the importance of research across the regions and nations of the UK.

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