Brexit: Impact on Universities and Scientific Research - Motion to Take Note

– in the House of Lords at 11:37 am on 3rd November 2016.

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Moved by Lord Soley

That this House takes note of the potential impact of the United Kingdom’s withdrawal from the European Union on funding for universities and scientific research.

Photo of Lord Soley Lord Soley Labour

My Lords, in moving this Motion let me say that I fully respect the decision of the court today and the Government’s position. I know that it is not a matter for debate today but some of the things that I will say will indicate that Parliament can have a helpful role in the difficult negotiations and discussions to follow. Whether the Government decide to appeal is a matter for them. I say simply that Parliament has a duty to hold the Government to account, but also to offer its help, advice and guidance on some of the very complex issues that will appear during these discussions. Let me say straightaway that the issues affecting universities, and scientific research and development, are a very good example of that.

Not only has there been enormous interest in this Motion from Members of this House, many of whom will speak today with far more knowledge and experience than I have, particularly of the university world, it is also true that the number of organisations outside—throughout the United Kingdom—that have contacted me about this debate is quite remarkable. I have had letters, emails and contact from all over the country expressing concern. I already indicated in my first Question today that my concern is that the United Kingdom and the European Union need a good and productive relationship in the future. It is of no benefit to the EU or to the UK if we simply see this as a game of winners and losers. There has to be a new relationship between the United Kingdom and the European Union, and scientific research and development will be a critical part of that.

I do not need to tell this House, particularly with the number of scientists in it, that science and technology and universities are critical to the development and success of any modern economy. Indeed, higher education in Britain and our scientific research are big success stories for the United Kingdom and must continue. There is now genuine concern in scientific research and universities about what will happen during the process of Brexit and if we withdraw, which seems almost certain. Somehow or other, we must have a structure that makes sure that this country does not slip back in its significant achievements in research and higher education.

Two core issues have troubled people who have contacted me. They boil down to, first, acute concern about the movement of students and staff inside in scientific research. Scientific research is now international, and within the European Union it is transnational. We have to recognise that. It is not focused in just one country. It is very much interdependent. Some of that work, which I hope to indicate in a moment, is profoundly important to everyone, everywhere. It is not just a matter for scientists and researchers in universities. It will affect everybody’s life in every way.

The second issue causing acute concern is funding. It is not just whether funding will continue at the current level or, as we hope, increase; it is also about predictability during the negotiation process. It is no help to anyone if people who are making bids for research money to European institutions, most notably the Horizon 2020 programme and the European Research Council, cannot be sure what will happen to their application in the coming months and years.

To put those concerns in context, I shall quote the Russell group of universities, which sums up the concern quite clearly. I think the Government have to focus on what it says. It wants the Government to ensure that:

“UK universities can continue to recruit and retain talented staff and students from across the EU and more widely without bureaucratic visa burdens”.

That is important, and I shall come back to it later. Its second point is about:

“Ensuring the UK can continue to have full access to and influence over Horizon 2020 and further EU research and innovation programmes and infrastructures”.

I would include the European Research Council in that. Its third point is about:

“Ensuring the UK can continue to participate in the Erasmus+ programme”.

All three of those issues have been reflected by many other organisations and individuals who have contacted me.

It may help if I give some examples of the sort of research that matters to everyone in this country. I turn first to astrophysics, space science and geophysics. They are by nature international operations involving countries all around the globe, but they are also profoundly important within the European Union, and there is funding within the European Union. Something that perhaps puts meat on the bones of this sort of research and shows people inside and outside this House how important it is the FLARECAST programme. As its name implies, it tries to forecast solar flares. Solar flares are increasingly important because as we rely more and more on high technology, a serious outbreak of solar flares can massively disrupt electronic communications and the power distribution network. That affects everyone in this country, in the European Union and around the world. That work is currently funded massively by the Horizon 2020 programme. That is one of my first examples of how important it is that we manage to keep the Horizon 2020 programme going and that we are fully part of it.

Another example of that the Tyndall Centre for Climate Change Research in East Anglia, which has an international reputation and is virtually entirely funded by the European Union. This is where Parliament can be very helpful to the Government, as we need to keep bringing issues of this type up, not in order to score points but simply to say we cannot allow a situation to develop where such organisations lose their funding and it is not replaced in some way. I will come back to this, but ideally we would have a situation where the funding continues more or less as it is. If we do not achieve that in the negotiations, then the British Government will have to find the money for that sort of work.

Immunology is profoundly important to the health and disease problems that we face—again throughout the world, as obviously they are not unique to the United Kingdom. Some €8.8 billion has been paid in the six years between 2007 and 2013 by the European Union. That is a very large sum of money, and either we find a way of that continuing or we have to replace it in some way. The amount of money we get in research grants for immunology from the European Union is second only to that achieved by Germany. Both Britain and Germany are leaders in that work and, again, the issue is of course international and not just transnational—it is certainly not just about the UK.

The European Investment Bank only a few months ago gave a loan of £280 million to University College London, and a few months prior to that gave £200 million to Edinburgh University. The funds were designed to enable those two universities to develop infrastructure projects, which have an immensely important spin-off into the development, creation and progress of small creative businesses. I cannot stress that enough, as we tend to understate what we do in manufacturing in this county. Some of our manufacturing is very advanced and very lightweight, and our exports depend on it massively. This is not a plug for Heathrow Airport, but every plane that goes out is stuffed full of exports of very high-tech equipment. It is worth remembering at this time that there is hardly a satellite whizzing round the world that does not have British technology in it. That is profoundly important. I would like to know how the Government think those investment programmes will continue. Ideally, we will solve this in the negotiating process, but if not we need to find a way of funding them.

Oxford University gets 12% of its total research budget from the European Union. There are six pan-European infrastructure projects located in the United Kingdom, and two of them—one at Harwell run by Oxford University on laser energy and the other on biology at Oxford University—are profoundly important. Can the Minister look at how we will continue to develop them if we are no longer part of the European Union? They are part of this pan-European project. As I say, there are six of them in this country, and they would need to continue as well if we want to maintain our scientific lead.

It would be quite useful again to have the Minister’s views on one way of addressing this, which would be to recognise that coming out of the European Union does not necessarily mean that we have to leave the European Economic Area. The European Economic Area may, or could, to some extent mitigate the funding crisis that will hit some of these organisations if we are not careful. It is not a complete answer by any means but it would mean, as I understand it, that we could continue to have access to funds from both Horizon 2020 and the European Research Council. I am sure the Minister is aware that it is possible to have associate relationships with these organisations, in the way that Israel and Switzerland do. There are other possibilities here, but there is no doubt in my mind that the first priority should be that the funding continues more or less as it is, not least because of the predictability of it. That predictability is profoundly important.

The Prime Minister says that we are a full member of the European Union until such time as we leave, and therefore such things should not change. I understand that, and legally it is correct, but in reality, people in other European Union countries are looking at the relationship they have with Britain in scientific research and universities and asking how Brexit will affect it.

I am told—again, I should like to know whether the Minister is aware of this and can tell us any more about it—is that people are already reluctant to place Britain as a lead programme developer when applying for funds, because they cannot be sure that they will not lose out if Brexit goes badly wrong and we end up coming out of the European Union without a proper agreement on the continuation of science and technology research.

Many people in this Chamber have far more knowledge of universities than I do, and I do not doubt that they will speak about them both individually and in terms of funding of students and student exchanges. I just flag up that I regard that as particularly important, and look forward to hearing from some of my more knowledgeable and expert friends on it.

We must be aware that this is not just a funding issue. The other group whose evidence impressed me was the Association of the British Pharmaceutical Industry. It wants predictability on regulation. Obviously, drug production requires regulation across the European Union; again, it is transnational. It is no good our having a different set of regulations from Germany, France, Italy or elsewhere, so somehow we have to agree a system of regulating standards so we do not get bogged down in additional bureaucratic discussion on each individual drug that is produced. My memory is that 25% of the world’s leading prescription drugs were discovered and developed in the United Kingdom. That is immensely important. It would not be good to get bogged down in regulatory discussion.

The House of Lords Library points out that we have received £5.6 billion per annum from the European Union for recent scientific research and development, and that 2.5% of UK university income came from the EU in 2014-15.

I finish on this point because I want to leave as much time for others as possible. I say to the Minister that Parliament can be helpful on this. We need to make sure that universities, higher education and research and development are carried forward successfully, but we rely an awful lot on what happens in the negotiations. To go right back to what I said at the beginning, that means that we need a good relationship with the European Union where both sides recognise that predictability in funding and the ability of staff and students to move around internationally and transnationally are vital. I beg to move.

Photo of Lord Willetts Lord Willetts Conservative 11:53 am, 3rd November 2016

I congratulate the noble Lord, Lord Soley, on bringing this debate to the House and posing the crucial questions he has. I draw the House’s attention to my entries in the register of interests, particularly my post as a visiting professor at King’s College London and serving on the board of the Crick Institute.

I shall keep my remarks short because so many Members of this House wish to speak. In many ways, that is my central point: there is a range of concerns in the university and science community about Brexit, and we need some structure or framework in which they can be considered explicitly by the Government, the different arguments can be weighted and we can have an indication of how they could be addressed as part of the negotiations on Brexit. There is a range of exercises in learned societies, in individual universities and their representative groups, but I press on the Minister the need for some kind of framework and explicit consultation by the Government.

The Government have already made some very welcome announcements. I welcome in particular that the Minister for Universities and Science has announced a continuation of funding for schemes that have already been successful in the EU and the extension of continuing funding of students from the EU at British universities. But the Government need to go further.

A crucial issue that needs to be addressed is what kind of relationship we might have in future with Horizon 2020. I rather regret that the way that the debate went in the referendum focused so much on funding and not very much on networks, which are as important as the funding, if not more so. Maintaining those networks is crucial and there are several ways in which it could be done. We could continue to participate in Horizon 2020; other countries do so that are not members of the European Union, so that would be one option. I think I have picked up some concerns among Ministers that Horizon 2020 is cumbersome and has high overhead costs. On the other hand, those costs may arise simply because it is creating partnerships between institutions in more than one country, which is an inherently more complicated activity. Those pros and cons should be explicitly identified.

Another option would be for Britain to set up a parallel fund to enable universities and research institutes in our country to be funded by the UK Government if they wanted to align themselves with the Horizon 2020 programme. Another option, which I know is being considered in some places, is for universities and research institutes in the UK to set up a new operation within the EU which would be—they hope—still eligible to receive EU funding. The relative pros and cons of those options and the frameworks for them are exactly the kind of thing on which a consultation exercise led by the Government could provide very useful guidance and advice.

The noble Lord, Lord Soley, also referred quite rightly to student mobility. Of course, that means attracting students—and young people in general—into Britain. There is an ingenious visa regime for young people aged under 31 from certain, specified countries to come and work in Britain for up to two years. We currently apply it to nationals from Australia and New Zealand, for example. Could we make that offer to nationals from many EU countries as a very powerful signal—and a practical offer on visas—that showed that they would still be welcome here? Equally important is that we continue to make it possible for British students to go and study abroad. In fact, we would gain if more British students had the opportunity to study abroad. Another idea to consider, therefore, would be that fee loans—currently available only for study at a British university—could be made available to cover the costs of studying abroad at universities in specified countries, which could of course include member states of the European Union. These kinds of ideas need to be properly investigated and I hope that the Government will do so.

There are of course enormous challenges for universities and research institutions from Brexit; there are also opportunities. Many universities that I have visited, and it is also the experience of the Crick Institute, would love to have a commercialisation unit alongside their research lab, but have been told that if they did so the VAT exemption on the building of their new facility would be lost and the whole facility would pay VAT at 20%. The ad hoc rule of thumb is that they should therefore have only 5% of commercial activity. It would a powerful boost to the sector at a time of such anxiety if the Treasury signalled that this is exactly the kind of tax rule that could change if we left the EU and that, in future, there would not be a VAT liability if our publicly funded institutes and universities created places for commercialisation on a much larger scale.

There are widespread concerns and I am sure that they will expressed in the course of our debate today. I very much hope that, in a systematic and considered way, the Government will set up a framework in which they can be addressed.

Photo of Baroness Blackstone Baroness Blackstone Labour 11:59 am, 3rd November 2016

My Lords, I declare an interest as I chair the board of Great Ormond Street Hospital, which undertakes a great deal of research.

One of the strengths of the UK is its universities. We have a world-class system of higher education which is admired around the world. The high status of our system is something we must preserve. The decision to leave the EU is a potential threat to this. There may be some opportunities, as the noble Lord, Lord Willetts, has just said, but there are many threats as well. One of the benefits of our membership is the opportunity to attract students from the European Union. There are currently 185,000 studying here. This has been possible for them through access to fee loans. Will the same guarantee of access given to students coming here from Europe in 2017-18 be given to those coming here in 2018-19? Will the Minister tell the House what will happen after that? The loss of these students would damage the rich and diverse population in UK universities.

European Union nationals account for about 16% of the academic workforce here. Incidentally, the figure is much higher in some important subjects—for example, mathematics and economics. What reassurances will be given to them? Will they continue to come if there are complex bureaucratic hurdles to contend with? They are at present attracted by the values of openness to the wider world and the quality of research in our universities, to which many of them make an enormous contribution. What assurances can the Minister give that academic mobility—not just student mobility—from Europe will not be impeded after our exit?

Almost half of UK academic papers are written in collaboration with at least one international partner, many from the European Union, and international co-authorship is associated with 41% more impact. The UK is easily the largest beneficiary of EU Research Council funding, obtaining 22% of its grants. This underlines our success in research. As Jo Johnson, the Minister responsible for this area, said earlier this year:

“Britain’s success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world”.

He was right; it does. Therefore, will the Minister tell us not just that the Government will work to protect the UK’s position for the duration of Horizon 2020? Universities are desperately concerned about the longer-term future beyond Horizon 2020. They expect a response, and they should get one. Given how much money comes into the UK for research, it deserves high priority in any exit negotiations, which need to consider how we can go on having high-level strategic influence as well as funding.

As regards medical research, issues of scope and scale are particularly important. High-quality medical research is vital to innovation in the treatment of patients, in both discovering cures and making sure that their symptoms are alleviated so that they have a better quality of life. Limiting the scope of this research would damage patients, so access to EU funding in this area is not just about money, but about the facilitation of networks, as I think the noble Lord, Lord Willetts, also mentioned, and access to pan-European populations. This is especially true with rare diseases, 75% of which affect children, and 30% of children with a rare disease will die before their fifth birthday. To save the lives of these children it is vital to have collaborative projects which expand the population size from which patients can be drawn across Europe for the clinical trials which are needed. At Great Ormond Street Hospital and the Institute of Child Health of University College London, where, incidentally, 25% of the medical staff are from the European Union, there are currently 44 EU-funded research trials. What do the Government plan to do in the longer term—I stress the longer term—to ensure that these cross-European trials can continue?

With more time I could cite many examples where this research is now benefiting children with rare complex conditions. Surely we owe it to them to ensure that this continues.

Photo of Baroness Smith of Newnham Baroness Smith of Newnham Liberal Democrat 12:04 pm, 3rd November 2016

My Lords, funding is clearly crucial for higher education institutions. I am grateful to the noble Lord, Lord Soley, for bringing this debate this afternoon. Like many other speakers, I declare an interest, or even interests. I had noted two, and then the noble Lord, Lord Willetts, caused me to think of a third one.

My interests on this occasion are directly relevant to what I will talk about in the few minutes available. The first is that I am employed by the University of Cambridge, which benefits significantly from membership of the European Union and access to funding from Horizon 2020 and associated programmes. Secondly, while my own Department of Politics and International Studies does not apply to so many programmes, the European centre that I direct has had funding from the European Union to create collaborative networks. I am now the third speaker to talk about networks, and a hugely important theme is that we are talking not just about funding—networks are important, people are important, collaboration is important—so, if we look merely at the financial aspects of research funding, we miss an important part of what Her Majesty’s Government need to think about in negotiating the UK’s withdrawal from the European Union. My third interest is as a member of the advisory board of the Institute for European Studies at the Free University in Brussels, the ULB. I mention that because, when I was asked to be on that advisory board, I stopped to think, “Do I have time to do it?” and “Do I want to do it?”, but I did not think, “Will it be difficult for me to get to Brussels? Will I have to fill in bits of paper and get visas to travel?”. I can see the noble Viscount, Lord Ridley, shaking his head, but there are key issues to think about that go beyond funding, which relate back to how the United Kingdom will play out its role in collaborative research in the future.

Funding is part of that, and the Government have already been clear that they are willing to support funding that would be lost under Horizon 2020 and replace it up to 2020. However, as the noble Baroness, Lady Blackstone, already suggested, “up to 2020” does not give much certainty at all. Applications are going in now where, anecdotally, we are told again and again that British people or people who are based in UK universities are being discouraged from being the lead applicants for EU funding. That needs to be thought about. Will the United Kingdom seek to be part of the European research area, and ideally part of Erasmus, once we leave the European Union? Can the Government commit to saving the best opportunities and closest co-operation for the United Kingdom by being part of the European research area post Brexit?

At the moment, the United Kingdom benefits from having significant numbers of EEA nationals as students and academic staff. At the moment, 20% of Cambridge’s post-doctoral fellows come from other EU and EEA countries. But there is no certainty for these people. At present, we have no idea what the Government propose on visas and free movement. If the Government do not propose to be part of the European Economic Area or something similar, can the Minister indicate what sort of arrangements they are looking for that will enable EU nationals to have confidence about coming to take up jobs in the United Kingdom? The link back to funding is that, at present, the United Kingdom receives more funding from the EU than any other member state, and a significant number of the ERC grants go to EU nationals resident in the United Kingdom. If the United Kingdom is outside of those networks, the pull factor for leading European scientists disappears. Those people need certainty. If the United Kingdom is to remain world-leading, it needs to demonstrate that it is open for business. Maybe the plan is to have a visa-free regime for free movement of academics or maybe the plan is to expand tier 2 visas, but at present we have no idea.

While I understand that the Minister is not going to give a running commentary, can he at least give some assurance that the Government are thinking about these questions and that the UK is open for global business, including in higher education and research?

Photo of Lord Kakkar Lord Kakkar Crossbench 12:10 pm, 3rd November 2016

My Lords, I too join in congratulating the noble Lord, Lord Soley, on having secured this important debate. I declare my interests as professor of surgery at University College London, director of the Thrombosis Research Institute in London and chairman of UCL Partners.

World-class science research and innovation is a global success story for our country. With 1% of the global population and 3% of expenditure in research and development, we are able to deliver 15% of the most highly cited publications globally. This is vitally important not only for the health and wealth of society but for investment in research and innovation, which is a remarkably effective lever in driving economic growth and opportunity for our population.

As we have heard in this debate, there is no doubt that there is concern about the implications of our country leaving the European Union. In terms of research funding, we have heard about the disproportionate success that our universities have had to date in securing funding—some 10% of research funding at our universities comes from the European Union. However, we have a unique ecosystem in our country beyond the funding from the EU, and at this time it is therefore important for the national debate to focus on what we need to do to secure those remarkable achievements in science, research and innovation well into the future.

One thing that we have heard about is the development of an industrial strategy. I should like to ask Her Majesty’s Government what approach has been taken in terms of development of a strategy for the future funding of our science base at universities for innovation and research. There is no doubt that the opportunities alluded to for research funding from the European Union need to be considered carefully. They represent an important part of the ability of our universities to remain globally competitive. Therefore, Her Majesty’s Government will need to consider carefully how that research funding is replaced not only in terms of the quantum of funding available but, as we have heard, by ensuring that the funding, when it becomes available at a national level, is directed to allow our great institutions and successful research community to interact with the kind of collaborative networks globally with which they are currently able to interact through participation in European schemes.

In that regard, have Her Majesty’s Government given thought to the development of new funding streams that might target particularly the ability of our institutions and home collaborative networks to continue to collaborate in the European Union? As we have heard, those will be vitally important, particularly in areas of medical research such as rare diseases, as well as in opening up the opportunity for us to collaborate beyond Europe with networks in the United States, Asia and among other Commonwealth countries, where there will be the opportunity for enhanced research collaboration. This does not take away from the need for us to remain active participants in European networks and, in certain circumstances, in the funding streams that will provide great opportunity to our universities.

There is also an important opportunity at this stage to consider the overall funding available for research and innovation in our country. Although in the austerity years—with the support of European Union funding—our universities were able to remain competitive on a global scale, the reality is that in terms of OECD member investment in research and innovation we are at the bottom of the league. That is an unsatisfactory situation for a nation that prides itself on being a knowledge economy and committing itself to a future in which innovation will drive social advancement, improvement in the lives of our citizens and opportunities for our economy. As part of the industrial strategy, have Her Majesty’s Government considered increasing the overall funding available for science and research in our country to bring it at least to the average level of OECD member country investment in this area? Clearly, we would still not be investing as much as some of our competitors, such as Germany and the United States, but we would strengthen the overall base and send a very powerful message to the rest of the world that science and innovation remain at the heart of the purpose of our country.

In that regard, what attempts have Her Majesty’s Government made to work with our learned societies and national academies to see how they might contribute to this process, inform this discussion and ensure that the very best environment is created in the future to secure the science and research base in our country?

Photo of The Bishop of Portsmouth The Bishop of Portsmouth Bishop 12:15 pm, 3rd November 2016

My Lords, the range of risks faced by the HE sector covers student recruitment, staff recruitment, research funding and course portfolios, as we have already heard. The potential impact—positive from some perspectives, albeit limited and very provisional at this stage, and the range of likely negative impacts—varies between universities.

My background covers different sorts of universities: Hertfordshire and Portsmouth, Oxford and Cambridge, and Durham and Manchester. I studied in three, taught economics in two, was a chaplain in another and have been a governor in two. I draw your Lordships’ attention to my entries in the register of interests.

In such very varied universities, the present excruciating uncertainty following the Brexit vote is having a significant impact in a range of areas. The risks around recruiting future staff are hard accurately to gauge but it must be expected that it will become more difficult to recruit EU staff. Across the sector, 10.7% of academic staff are EU nationals, with a focus on research staff. They are much more likely to be on fixed-term rather than permanent contracts, so there will be an ongoing need for recruitment in what are now very uncertain, and likely to be changed, circumstances. It would be enormously helpful if the Minister and the Government could be more precise about the freedom of movement for all categories of workers that will be available post-Brexit.

A different problem will arise if, as is sometimes rumoured, the UK Government make recruiting all international staff more difficult. This issue is immediate and particularly pressing because, although no changes to EU staff recruitment can, as I understand it, be made until the UK leaves the EU, changes to UK visa rules can be made with immediate effect. Can the Minister say what is intended?

Our universities are attractive for many reasons. The sector has a high world reputation—we might call it a golden reputation—and I fear that the intention of ranking UK universities as meeting gold, silver or bronze standard in the future risks diluting the prized brand in a period when our international reputation is inevitably under scrutiny. I hope that the Minister and the Government can consider ways to enhance the position of the sector rather than use language and terms that might diminish our international reputation.

As I acknowledge the strength of the various financial risks already identified, I draw the House’s attention to the importance to this nation and society of the openness of our hearts and minds to what is new, different and challenging. The world of learning depends not only on accessibility to ideas and thinking but, as we have already heard, on the people of the world meeting each other, learning together, and sharing their exploration and their understanding. It is that which we must ensure we continue. Insularity in our approach, perceived or actual, will relegate us in the perspective of the world and risk not only the financial stability of our outstanding universities but their educational standards too, to the detriment of the nation.

At Portsmouth, where I am presently a governor, of those who teach or research in the Institute of Cosmology and Gravitation, which is research intensive, one-third are British and two-thirds are non-British, of whom 45% are from the EU. Is it intended that cutting-edge research such as this will be imperilled? Only yesterday, the astronaut Major Tim Peake, who studied flight dynamics and evaluation at the university, visited for a conference of schoolchildren, widening the scope of those children’s thinking. The risks are clear: uncertainty is debilitating. Economically, educationally, culturally and ethically, universities are pivotal.

Photo of Lord Giddens Lord Giddens Labour 12:20 pm, 3rd November 2016

My Lords, I congratulate my noble friend Lord Soley on securing this debate and introducing it so ably. I cannot measure up to the list of interests that the right reverend Prelate declared, but I declare an interest as former director of the London School of Economics and formerly a professor in Cambridge for quite a few years.

The issues facing universities are extraordinarily complex. They show in one particular institutional setting the scale of the task the country has taken on following the referendum. So far there is no Brexit, simply a decision to leave the European Union. If the Government have a plan, only they know what it is. The wider economic implications at this point are, therefore, to my mind imponderable.

My first main point is that those responsible for running our universities must engage in scenario thinking that runs well beyond higher education. For better or worse—and in my eyes it is certainly worse—this Government have decided to turn universities into commercial organisations, driven by consumer choice. They will be as vulnerable to a downturn in the economy as any other form of business enterprise.

Moreover, from this juncture onwards there will not be a stable external environment against which universities will operate within the wider framework of the EU. The other member states, and those who run their universities, will be taking reactive decisions well before any concrete deal is reached between Britain and the rest of the European Union. This includes students and potential students, researchers and other staff, as well as those actually in charge of higher education institutions. The Government can try to give guarantees and smooth out anxieties, but everyone can see that those guarantees will be vulnerable should there be a wider deterioration in the UK’s economic situation. What appears to be the Government’s position—that nothing will change up to the point at which the UK actually leaves the EU—seems to me naive in the extreme.

All of this will take place against the backdrop of the higher education Bill, due to come before the Lords shortly. It loads up universities with a tangle of new bureaucratic rules, supposedly in the interests of improving teaching standards, and introduces a further set of uncertainties to join the much more wide-ranging ones created by Brexit. This clumsy Bill is the last thing universities need at the moment and, when the time comes, I hope that other noble Lords will join me in opposing large chunks of it.

The Government can and are seeking to introduce at least some guarantees that existing structures will remain in place for the time being. However, they cannot control what overseas Governments and institutions think, and they will be proactive. Research reported by Times Higher Education indicates that there are already visible consequences. Researchers spoken to indicated that applications to Horizon 2020 for funding had already been thrown into doubt, as continental colleagues worried about the impact of including British researchers in their project applications.

The response that it will be business as usual until the UK actually leaves the EU will not do, for the reasons I have already stressed. Both the Government and university leaders will have to think more imaginatively to blunt the reputational effects of impending Brexit, as well as the real losses in student recruitment and research capacity likely to take place. Of course, there is always the banal response that the UK will open itself up to the wider world as it turns away from the rest of the EU. But proximity is often important in research collaboration; and so is an established and regularly funded way of stimulating and backing research projects.

At this point, we just do not know what kind of deal the UK will be able to do with the 27 other EU nations. There is a huge difference between staying in the single market, which is surely impossible if EU migration is to be curtailed, and opting for a limited trade deal. In the second case, the UK will definitely be an outsider in Europe, peering in. Universities may have become like businesses, but they cannot react with the speed that orthodox companies do to changing economic fortunes. Beyond limited financial guarantees, how will the Government help universities to plan ahead?

I agree very much with what the noble Lord, Lord Willetts, said. Some structure must be in place—not a temporary consultation, but an enduring structure linking government with universities to plan ahead in a macro context, not just the context of the university system itself.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench 12:26 pm, 3rd November 2016

My Lords, our debate today covers two sectors of our national life that are critical for our future success, competitivity and prosperity as a nation. Our universities, second only in the world to those in the US in their international outreach, are one of the country’s top invisible exporters. At the same time, they are an important source of our soft power. Our scientific research, despite the fact that it is less well funded from the public purse than is the case for most of our competitors around the world, has, by the disproportionately high wins of EU research funding, shown that it is in rude health. One might think that the potential negative impact of Brexit on these sectors would be of deep concern to the Government. There is not much sign of that, however. The CEO of Nissan can get in to see the Prime Minister and emerge with so-far unmentionable assurances, but the presidents of the Royal Society, the British Academy and Universities UK are not being so treated in spite of their very serious concerns, so all the more credit to the noble Lord, Lord Soley, for having initiated this debate.

What are those negative implications? First and foremost are ones that come from the talk of imposing new immigration controls. These could adversely affect the recruitment by universities of both undergraduates and postgraduates and of the 15% or so of their academic staff who come from other EU countries. If the controls were reciprocal, that could affect British students and academics moving in the opposite direction. This House has frequently debated the aberrant nature of the Government’s policy of treating students as economic migrants for public policy purposes. That has zero support in this House from any side. It will emerge yet again now in the context of this new threat from Brexit, and it is surely time to rid ourselves of this incubus, which is already resulting in a loss of market share for British universities when compared with their main competitors. We need the Government to say here and now that any new immigration controls they may contemplate will not prevent those with offers of an undergraduate or postgraduate place, or of an academic post, taking up those offers. If they cannot say that now, the haemorrhage of students and academics who have to think in terms of longer time horizons—and it has clearly started—will only accelerate, depriving our universities of material and human resources of the greatest importance to their future well-being.

Then there is the question of the impact of Brexit on the resources available for scientific research both at our universities and more widely. Our position as a substantial net beneficiary of EU spending means that this risk is acute. It is not just a question of the quantum of resources, which may or may not be replaced by a pretty cash-strapped Treasury, it is also about the value of the networks of co-operation across Europe that are provided by EU funding and which bring with them quantifiably greater benefits than the simple amount of the subsidy. All this will be at risk if we pull out of the single market or we regard any payment into EU funding as a red line we will not cross. Surely we need to remain in the Horizon 2020 programme and the programmes that will follow it if we are not to damage our own capacity for scientific research and innovation.

The House is fairly inured to getting no meaningful response from the Government in reply to debates and questions about Brexit, and I fear that today’s experience may not differ very much. It is a little like posting messages to Father Christmas up the chimney. Fortunately, on this occasion and in respect of these two cases, we shall have the opportunity to return to the issues being raised in today’s debate when the Government’s Higher Education and Research Bill reaches this House shortly. That will provide both the opportunity and the need for the Government to respond in substance to them, and it will also provide the opportunity for those of us who are deeply concerned by this situation to consider moving amendments.

Photo of Viscount Ridley Viscount Ridley Conservative 12:31 pm, 3rd November 2016

My Lords, the nearest I have to declare as an interest is that my wife is a professor of neuroscience at Newcastle University and in receipt of EU funding, but the views expressed today are my own. I think that I am the first member of the Lords Science and Technology Select Committee to speak in the debate so far. I commend the report into these matters produced under the able chairmanship of my noble friend Lord Selborne. It contains a huge amount of interesting detail.

In his opening remarks the noble Lord, Lord Soley, said that we must not slip back in terms of being a scientific superstar. Indeed, we must go further than that and leap forward. This has to be an opportunity as well as a risk. He said that the UK is a leading scientific nation and he is quite right. In per capita terms we have twice as many universities in the world top 200 as the US and Germany. We were awarded five Nobel prizes this year, more than anyone else. Admittedly all of the winners are living in America, but that rather makes the point that science is a global activity and not a regional one. If you go into a science lab today, you are likely to find a group of people as diverse as in the changing room of a Premier League team, and probably more so.

I want to concentrate my remarks on three issues: the questions of talent, of finance and of regulation. It is vital that universities should be able to attract talent from around the world. In this respect it is key that the Government should recognise and say explicitly that there is a very big difference between public opinion about skilled migration and unskilled migration. At the moment I do not think that they have made that distinction clear enough. The polling evidence is very clear. The public actually approve of scientists, engineers, entrepreneurs and doctors and so on coming into the country just as strongly as they disapprove of less skilled migration. At this quite early stage there is nothing to stop the Government from publishing plans about what kind of expedited talent visas they would make available to people all around the world to come here. The noble Baroness, Lady Smith of Newnham, made this point, as did the noble Lord, Lord Hannay of Chiswick, and I agree with them.

South Africa, for example, has a critical skills programme which automatically fast-tracks people who come from the 500 top institutions in the world. I do not know whether that is the right way of doing it, but it is at least the kind of thing we need to be talking about, because this is a golden opportunity to relax high-skilled migration barriers and to discriminate on the basis of talent rather than nationality, which is surely what we should be doing.

On finance, Horizon 2020 has been mentioned on a number of occasions. I would correct something that the noble Lord, Lord Soley, said: we do not have to be in the EEA to be a member of Horizon 2020. Fifteen countries are members of Horizon 2020 that are not in the European Union. Two of them, Tunisia and Israel, are not even in Europe. There are others if you count the Caucasus; I do not know whether that counts as the continent of Europe. The point is, although they are so-called associate members, the press release that announces their joining this programme says that they will be on exactly the same terms as members of the European Union. Indeed, the country with the most project co-ordinators per capita leading projects in Horizon 2020 is not an EU country—it is Iceland. There should be no bar to us participating fully in Horizon 2020, as long as we contribute. Universities need to do a better job reassuring their employees about this.

On regulation, as the noble Lord, Lord Kakkar, said, we are underfunding science and research in this country, but that is largely because private, rather than public, funding is lower in this country. In that respect, the degree to which European regulation, such as the clinical trials directive, which the noble Baroness, Lady Blackstone, mentioned, has held back sectors such as biotechnology in particular is really quite striking. The regius professor of medicine at Oxford, Sir John Bell, has gone on record making this very clear. There has been application of the precautionary principle in the Commission and the Parliament of the European Union that goes much further than elsewhere in the world, which has meant that we have, in effect, held innovation to a higher standard than existing technologies. Indeed, we have emphasised the risks of innovation more than the benefits.

There are huge technological opportunities for universities and research in the world, in particular online with international campuses and things like that. We must grasp opportunities to explore these possibilities in a post-Brexit world.

Photo of Lord Liddle Lord Liddle Labour 12:37 pm, 3rd November 2016

My Lords, I declare my interest as pro-chancellor of Lancaster University. I am very proud of Lancaster, which is in the top 10 of the league tables. I am proud of its success in having a very high proportion of students from state schools, despite being a very strong, research-intensive institution, and of the contribution it makes to the north of England economically. We all accept we have a real regional problem in Britain. We have to have rebalancing. The universities in the north are one of the really positive things about the economy of the north at present.

The first consequence of Brexit for my institution is that we were expecting to get a grant of £12 million this summer to contribute to a health innovation campus we are building next to the university. The first phase is worth £40 million. We were told that this application would be delayed because of Brexit. We now have to put in the application at the end of the year. There is a possibility of a decision some time next year. The fact is that there is already delay and uncertainty. The Treasury sounds, in the way it is asking questions about these projects, as though it really sees the structural funds as a source of economy in the future, which would hit universities in the north very hard. Will the Minister tell us something about that? What is the Government’s commitment on structural funds and universities?

On student recruitment, we have expanded as a result of rapid internationalisation. Our proportion of EU students has gone up from 7% to 10% in the past five years, and of non-EU undergraduates from 11% to 20% of the total student body. The early indications are that the number of international applications is falling this year as a result of Brexit. This is in part an income question. EU students represent an income of some £10 million a year. What is the Government’s position on continued access for EU students to the student loan scheme? For how long will it continue? More than that, it is about immigration and the Government’s attitude to it, about which the noble Viscount, Lord Ridley, spoke.

When the question of overseas students was debated in the last Parliament, there were voices in the Government, not least those of the noble Lord, Lord Willetts, the Chancellor of the Exchequer and Vince Cable, which were strong in backing overseas student immigration. Of course, we had Theresa May, now the Prime Minister, on the other side. What now is the Government’s position on this? When the Home Secretary suggested that the “tens of thousands” goal might no longer be applicable, she was slapped down. When someone else suggested that figures for overseas students might be taken out of the total, No. 10 said, “No, that is not going to happen”. So what is the Government’s immigration goal in the light of Brexit? Is it to cut immigration to the tens of thousands? If so, how will universities cope with it? All I see on the part of the Government is a pretence that everything can be the best of all possible worlds and a lot of dithering, when they have to face up to hard decisions about the post-Brexit world. If they are not clear on this, they will ruin one of the greatest success stories in modern Britain.

Internationalisation is not just about economics; it is about our vision of higher education. Do we want to be part of a global community of ideas and scholarship, which I believe is the best way of encouraging scientific advance and cultural understanding? Already at Lancaster, two senior jobs have not been taken up because of Brexit. There is a lot of concern among our international staff about their future status and about visas for their families; there is a fear of xenophobia and about whether they will be welcome in Britain any longer. We have to ask ourselves whether this is the kind of country we want to be; or will the Government say clearly that they want to support British universities in continuing to be at the front rank in the world?

Photo of Lord Trees Lord Trees Crossbench 12:43 pm, 3rd November 2016

My Lords, I welcome this debate and join others in thanking the noble Lord, Lord Soley, for securing it. First, I must declare my interest as chairman of the Moredun Research Institute, an animal health research institute in Edinburgh.

We have entered a phase of great uncertainty. Indeed, there appear to be only two certainties at present: first, that Brexit means Brexit—although many of us are uncertain about what that means—and, secondly, that none of us can be sure of the long-term consequences of our withdrawal from the EU. I voted remain but, like many, I accept the decision of the people and now seek to look at how we can move forward. The key issues for universities, as have been mentioned by other noble Lords, involve undergraduate students, postgraduate students, research funding and workforce issues. Time prevents me dealing with undergraduate students—others will deal and, indeed, have dealt with that—and I shall refer briefly to postgraduate students when I talk about workforce issues.

With regard to research funding, although in overall terms the UK is a net contributor of funds to the EU, in science research we have been a net beneficiary. Between 2007 and 2013 our indicative contribution for science research to the EU was some €5.4 billion while in return our scientists procured €8.8 billion to fund their research. In fact, UK scientists won 15.5% of all research funding from the FP7 round of research funding in that period. I confess an interest and, indeed, must declare my gratitude to the EU for research funding when I was a member of staff at the University of Liverpool, in my own modestly sized research group. We received substantial funds, some £1.6 million of EU funding, for animal infectious disease research.

I want to highlight three particular reasons EU funding has been very important to me and my colleagues and continues to be important for many research scientists throughout the UK. First, the growth in EU support has, to some extent, compensated for the reduction in funding from UK sources over the past 20 or 30 years—for example, in my area of animal disease research, funding from Defra has declined substantially in that period.

Secondly, EU funding has often been directed to relatively applied research, filling the gap between basic research funded by our UK research councils and downstream product development and research funded by industry. Plugging that gap has been very important in disease research, where we are frequently seeking tools to aid diagnosis and control of current disease problems.

Thirdly, as many noble Lords have said, EU research has facilitated, and indeed often required, collaboration and mobility between scientists, between member states and between member states and third countries. That is hugely beneficial. Of course, as has been said, notably by the noble Viscount, Lord Ridley, leaving the EU does not necessarily mean we cannot participate in EU research schemes—countries outside the EU do so—but will the Government make it a priority in our negotiations to achieve arrangements that will enable that? I fear that there is some uncertainty there and it is not clear under what conditions we might be able to participate.

Crucial to our research effort has been the contribution of EU nationals, which brings me to the workforce issues. In our universities today 16% of all academic staff are from other EU countries and in my own area, in the veterinary schools in the United Kingdom, 22% of academic staff are non-UK EU nationals. As other noble Lords have said, the involvement of such international scientists is crucial to a productive and dynamic research climate.

Looking beyond the EU, we should use our admirable commitment to spend 0.7% of GDP on overseas aid to increase research collaboration with, and to provide more postgraduate studentships for, developing countries, enabling their young scientists and research personnel to come and study in our institutions. Such support has a triple benefit: it benefits the recipients and their countries; it benefits our institutions; and it creates a lasting cadre of overseas leaders in emerging countries who will, throughout their life, look to the UK as their alma mater. Will Her Majesty’s Government think creatively in this respect?

Finally, economic growth depends on two main things: population growth and scientific innovation. I fear that Brexit will limit the former but, if there is an economic dividend from Brexit, can we ensure that we invest it in the scientific and technical innovation that will produce enduring economic benefit in post-Brexit Britain?

Photo of Lord Bragg Lord Bragg Labour 12:49 pm, 3rd November 2016

My Lords, I thank the noble Lord, Lord Soley, for securing this very important debate and for his excellent speech. I declare an interest: I have been chancellor of the University of Leeds for the past 16 years. During that time I have seen it transformed, along with so many other British universities. It has become part of the outstanding global success of our universities, as outlined so graphically by the noble Lord, Lord Hannay, which punch way above their weight and lead the world—this is not a “Rule, Britannia!” cliché—in many areas of research.

I will quote the Minister of State for Universities, Science, Research and Innovation from evidence he gave to the House of Lords Science and Technology Committee in its report published in April this year. My noble friend Lady Blackstone has already quoted the first sentence. I think we would like to hear the rest. Mr Johnson said:

“Britain’s success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world. This report is further evidence that the UK’s influential position would be diminished if we cut ourselves off from the rich sources of EU funding, the access to valuable shared research facilities and the flow of talented researchers that provide so many opportunities to our world-leading institutions”.

He was right. We would all be grateful if the Minister passed this on to the current Prime Minister. The result of the referendum has ruptured that. There are widespread fears that the dire predicted consequences are already beginning to roll in.

I will confine most of my remarks to what is happening at the University of Leeds. Like my noble friend Lord Liddle, I will give a close-up of a particular university. Leeds is part of the Russell Group, it is a very important research university and it is not given to hyperbole. European funding accounted for 15% of Leeds’s research income in 2014-15. Leeds is ranked 11th in the UK for involvement in the Horizon 2020 project for research and innovation funding. The university does particularly well in the generous Marie Curie individual fellowships and European Research Council grants. These are based on researcher mobility, which is essential to a world university. Tougher laws on immigration will compromise or even remove these schemes. In the weeks immediately after the referendum, there were six known cases of the university being removed from Horizon 2020 applications with a combined value of about €8 million, for reasons that have already been expressed.

Under the Erasmus scheme, for every EU student coming to the UK, a UK student can go and experience career-changing development and opportunities abroad. The university receives €1.7 million a year to facilitate this. This could be lost, which would be a great blow to Leeds’s ambition to be internationally engaged, with a workforce of international reputation. The university currently has 286 partnerships in Europe through Erasmus. They would be under threat.

Leeds currently employs around 700 staff from the EU. It urges the UK Government to guarantee that those currently working at UK universities can continue to do so in the long term. There are already considerable worries about the potential impact of immigration status on its ability to attract further academic talent from Europe. First-class science is based on talent and resources. Talent comes where resources exist. Already the university has experienced a couple of cases where senior academics have withdrawn their interest in working at the university due to the uncertainty and/or climate caused by the Brexit vote and the challenge to resources on that account. These numbers may seem modest but they are only the beginning, and from only one university. Perhaps noble Lords see it merely as a trickle, but it could more clearly be seen as a worrying early warning that in the not too distant future the dam will burst.

Leeds has around 1,200 EU students on degree programmes, 250 research students and 400 students on exchange programmes. At the moment there is absolutely no long-term certainty for any of them. The income from EU students alone in 2015-16 was over £8 million. This is to say nothing of the great advantages that we at Leeds have from, for example, the many Chinese students who come to Leeds and go back to China with firm loyalties and friendships. This is just the beginning of what could be a sad slide into a decline in one of our greatest present and potential assets. As the British Academy said:

“A long-term commitment to the UK’s research base is crucial in stabilising the UK research environment and its global competitiveness”.

Those 16 million of us who voted to remain are rather fed up with being dismissed and even derided as if we are bad sports. Democracy should respect minorities and we are a large minority. Part of that minority is the world of universities, which over the past few decades has seen a quite wonderful growth in reach and excellence, to the benefit of all UK citizens. We live in an age of accelerating, increasingly specialised knowledge. The world will go with those who have most of that and can retail it and add to it most accurately. I ask the Minister to outline a future strategy for British universities.

Photo of Lord Fox Lord Fox Liberal Democrat 12:54 pm, 3rd November 2016

My Lords, like my predecessors I am grateful to the noble Lord, Lord Soley, for bringing this issue to the attention of the House. I should quickly declare my interest in GKN, which participates in Horizon 2020 research. We have already heard many wise voices on this subject, with more to follow. To date, much of the talk has been on naming and delineating the problems, and perhaps suggesting a few mechanisms for solutions. I thought I would try something slightly different by focusing my efforts on suggesting a simple test that could act as red lines for the Minister during the negotiations, and which we could use to judge his success and the effect Brexit might have on research and science in this country. Unfortunately, it will look a bit like one of the Santa lists mentioned by the noble Lord, Lord Hannay, and I apologise for that.

First, we should probably acknowledge where we are. From everything we have heard today, most of us agree that research and science in this country is in a good place. I had the pleasure this year of attending the Royal Society’s annual science exhibition. There was room after elegant room of exhilarating science and most of those projects had similar characteristics. They had diverse institutional collaboration, important elements of European Union funding and myriad accents explaining the research. It was not just the best science but the cream of scientists from Europe and the rest of the world. This exhibition has been a feature of London life since 1778, so it would be foolish of me or anybody else to suggest that UK science will somehow be swept away on our leaving the European Union. However, it was hard not to feel that over the past few years we really have been enjoying something of a golden age. It would be very sad if this golden age were tarnished by Brexit; more than that, it would be deeply unfortunate.

We have heard many different numbers but we should highlight the importance of the European Union. Almost one-fifth of all the EU funding that comes to the UK is spent in research and development, so it really is an important part of our relationship with the rest of the European Union. During Questions earlier, I was interested to hear the noble Lord, Lord Bridges, highlighting research and development as one of his five or six possible areas for special attention. That starts to look like carve-out territory. The noble Lord, Lord Trees, highlighted the number of academics involved in his department and the noble Lord, Lord Bragg, pointed out the real importance of the Erasmus programme to our students. The European Union has a big influence on everything we do.

Following the exit vote, how did the Government react and what should we think of that reaction? On mobility, which noble Lords have all brought up, assurance was given quite quickly by the Prime Minister and others about the EU nationals who are here now. But it was a very narrow assurance and many here have pointed out that a unilateral recognition of the rights of European workers in this country would do much more to assuage their and their families’ anxiety. In August, the Treasury said that it would underwrite the current UK Horizon 2020 funding round, but what happens beyond that? It is easy to see why a feeling of uncertainty engulfs the sector: when it looks over the precipice of Brexit, it sees no clarity at all.

Looking forward, the Science Minister from the other place sought to reassure the Science and Technology Committee. He said that,

“regardless of the relationship we end up having with”,

the European Union’s,

“funding streams … we will continue to be an attractive country to partner with in science”.

It cannot be right to disregard that relationship. All expert opinion agrees that the level of funding the UK receives from Europe must at least be maintained. We need to know how that will happen. Perhaps the Minister can assure us that he shares that view.

So, to the test. We need a way of helping the Minister and the negotiating team to make the right decisions. The noble Lord, Lord Willetts, proposed a quite sophisticated structure and framework. I think I am coming up with something a bit simpler that offers yes/no answers. When we look at the situation as we think it will be post-Brexit—I am not asking for a running commentary, but that the Government use these tests—does the new situation preserve funding levels? Does it protect collaboration? Does it ensure free movement of researchers and students? Does it maintain access to EU-funded research facilities? Does it secure Erasmus? There are undoubted opportunities, which the noble Viscount, Lord Ridley, the noble Lord, Lord Willetts, and other noble Lords set out, but before we are in a position to take them we need to know that the Government are doing no harm.

These are the red lines. If the answer to all these questions is yes, well done. We will be in exactly the same position we are in now, minus a great deal of instability and anxiety down the road to get there; but if there are noes, then Brexit is actively harming our science and research and tarnishing the current situation. Can the Minister confirm that these are the right tests and if they are not, will he suggest what they should be?

Photo of Lord Broers Lord Broers Crossbench 1:01 pm, 3rd November 2016

My Lords, I, too, congratulate the noble Lord, Lord Soley, on obtaining this debate. I have a number of interests. I chair the international visiting committee of the Department of Engineering at the University of Cambridge and the trustees of the China executive leadership programme at the Cambridge Judge Business School. I am on the court of the University of Lincoln, I am a long-term trustee of the American University of Sharjah and I hold a professorship at Monash University. I am a fellow of the Royal Society and a past president of the Royal Academy of Engineering.

Like many Members of this House, it has taken me some time to adjust to Brexit, to stop being consumed by regret and to start looking for the opportunities of even a hard Brexit. I think there are possibilities in the support and funding of innovation and science. What I shall say assumes the worst: that we are no longer going to be able to participate as a full member of EU programmes.

When I returned from the USA 30 years ago, I relied on EEC funding for my research and worked with the Interuniversity Microelectronics Center in Leuven. This is an amazingly successful organisation, founded as a collaboration between Flemish universities and the Flemish Government, that has become perhaps the leading research and innovation laboratory in the world of microelectronics with 2,500 employees and an annual revenue of €415 million. It is a notable example of what has been achieved with the aid of European funding and shows that it is possible to live with the huge bureaucracy that inevitably surrounds a programme open to more than 20 countries. However, there are problems with the bureaucracy, especially for small organisations, and this is where there should be opportunities for the UK, should the most unfortunate circumstances arise and we are no longer able to remain within the EU programme. It should be possible more efficiently to focus our funding, especially on innovation, which is what I want to concentrate on in this short speech.

I want to talk about how we should handle the money that we have in effect been spending on Horizon 2020 and the SME instrument, where 20 UK SMEs have been successful in the latest round. I have not been able to find out how much we have been receiving specifically through these programmes but it is certainly significant. Overall in the seventh European framework programme, the UK came second only to Germany in terms of grants and held 15% and, in total budget share, 17%, equating to €7 billion.

In the official words of the EU framework programme for research and development, Horizon 2020,

“promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market”.

Horizon 2020 is therefore not a curiosity-driven research programme; it is a programme designed to take ideas from the lab to the market, and this is where it particularly resonates with the needs of the UK. I do not need to repeat that, while we have a world-leading science base, we are not leading in taking of our great ideas to market. There are, of course, notable exceptions, but overall we have fallen behind our competitors and are still exploring the most effective ways to link our university research with the needs of the commercial world. Some of the catapults are doing this effectively, as are other initiatives, but we are still learning.

Innovation, or in oldspeak “product development”, is a quite different activity from curiosity-driven research. It is driven by schedule, cost and an understanding of potential markets—in other words, by the impact it has in the commercial world. Such criteria are destructive when applied to curiosity-driven or, as some refer to it, pure research. Pure research is devoted to gaining a better understanding of the world around us and is driven by curiosity and the desire to explore. Constraints arising from the need to meet schedules and cost targets are in general destructive to the pursuit of pure research. The two activities require separate strategies and funding mechanisms, and this is why I do not think the proposal to move Innovate UK into the same organisation as the research councils is a good idea. However, we will have this discussion when considering the Higher Education and Research Bill, and in any case I understand that every effort will be made to provide independence to Innovate UK. It is here that I have a proposal.

My proposal, should we have to leave the EU programmes, is to ring-fence the money that we are at the moment in effect contributing to Horizon 2020 and the SME instrument and allocate it to Innovate UK, which would distribute it to industry and the universities through programmes optimised for the UK. Innovate UK programmes, such as the catapults, of course include university researchers but are driven by the need to take ideas from the science base to the market, which is where I started. Will the Minister reassure us that whatever happens as we proceed with Brexit, adequate emphasis will be placed on taking our great ideas from the lab to the market as well as on supporting our science base?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

My Lords, we are beginning to experience some serious time slippage in the debate. I invite the co-operation of noble Lords in remembering the time slot of five minutes for Back-Benchers. We are at the mid-point for Back-Benchers. It would be helpful if when the clock shows four minutes, noble Lords consider their final questions and frame their remarks for the Minister, otherwise we will impact on the ability of remaining speakers to contribute to this debate. I apologise to the noble Lord, Lord Smith.

Photo of Lord Smith of Finsbury Lord Smith of Finsbury Non-affiliated 1:08 pm, 3rd November 2016

My Lords, there are not many things that you can say our country does so well that we genuinely beat the world at it. Our leading universities are among them.

I declare my interest as master of Pembroke College, Cambridge. I shall focus on what the impact of the referendum result has been and continues to be in the college. There are five issues I shall highlight briefly. The first is the impact on the staff. Many of the staff who make the college work day by day come from the EU. They have given years of loyal service. They are settled here; they have homes and families here. On 24 June, they were utterly distraught. Their position here must be assured, yet at the moment their position is being used as a bargaining chip by the Government to try to secure the genuine rights of British citizens in EU countries. Surely it would be so much better if the Government would give a free and open commitment to ensure that those EU citizens already settled and working here can remain. In addition, if our academic staff, especially those at post-PhD level, have to seek visas in future under tier 2 provisions, it will be cumbersome, uncertain and expensive. It is essential that if that is to happen, the cap on tier 2 is either raised or, better still, removed altogether.

Secondly, there is the impact on our students. The Government have helpfully guaranteed the position of those students who will be starting their studies in 2017. That is welcome, but what about the uncertainty beyond that, for both undergraduates and postgraduates? Already this year we have seen a drop of 14% in undergraduate applications to Cambridge from EU candidates. Even more alarmingly, the Government are now talking about including all foreign students within overall immigration limits. I urge them as strongly as I can to think again on that. The impact on our universities, financially and academically, would be terrible.

Thirdly, there is access to research funding, about which much has already been said in this excellent debate. UK universities have received 16% of all European research funds in recent years, way beyond what a statistically equivalent proportion would yield. Among all the European universities, Cambridge has received the highest number of European Research Council grants, while Oxford is second. It is also important to remember this is not just about science research but about humanities and social science research. Can the Government guarantee that they will replace all the research funds that flow at present from the EU?

Fourthly, much has also been said in this debate about research collaboration. Increasingly, research at the highest level is conducted not in a single university but as a collaboration across several. Freedom of movement for academic researchers has been crucial to that, and common access to research grants is also crucial. There is already evidence that UK-based academics are being left out of research collaborations because of Brexit uncertainty.

There is one other, final thing to add. Since the referendum, we have witnessed a hugely disturbing rise in the level of hate crime, abuse, name calling, xenophobia and even assaults. In Cambridge, some of our most senior academics from EU backgrounds have directly experienced this. Our country and our intellectual life have been severely diminished as a result. It is almost as if licence has been given to denigrate and to hate. Where, oh where, is that tolerant, internationalist, welcoming, quirky, slightly grumpy, outward-looking, gentle, civilised country that I thought we were living in? I want it back

Photo of Lord Haskel Lord Haskel Deputy Chairman of Committees, Deputy Speaker (Lords) 1:13 pm, 3rd November 2016

My Lords, it is the task of POST—the Parliamentary Office of Science and Technology—to keep parliamentarians, their researchers, their committees and parliamentary staff informed about all matters relating to science. On 10 November it is going to bring all these people together with the research councils to consider how Brexit will affect key policy areas relating to science. The session relating to funding of science research had 75 applicants to speak.

I declare an interest as a member of the board of POST. As a result, I was able to gain access to the issues that these people wished to explore. Overwhelmingly, they made the point that the great advantage of ERC funding is its encouragement of international collaboration. It is well known, they said, that this type of research is of higher quality than national research. Another issue is that EU funding, over the decades, has allowed our scientists to participate in EU and transnational knowledge communities and groups, thus creating centres of excellence—centres that take decades to build up.

The applicants were also concerned about the free flow of scientists. The current PhD funding allocation system does not discriminate between UK and non-UK EU applicants. This helps to recruit the best of the EU. It is the mobility of these highly skilled young scientists that is the key to the UK’s competitiveness and standing in global projects. They were also concerned that our strong voice in European debates around science policy would be lost, making us followers rather than leaders—an impression that will be very difficult to heal.

Those were some of the points raised in anticipation of the POST seminar, which strongly echo the views of other noble Lords here today speaking in this excellent debate moved by my noble friend. But POST will have another session at its seminar, looking at those decisions on Brexit that will require scientific expertise. That expertise is currently found at those European centres of excellence that the applicants spoke of, and we may now have to provide it from our own science budget. Take agriculture, for instance, and the use of herbicides. It is our scientists, and not the European scientists, who may well have to interpret the precautionary principle in relation to the way GE technologies and pesticides are authorised here in the UK. It is the same with fisheries. Defra will require a lot of scientific expertise to set up its own technical fisheries regulations and standards. We should also remember that coastal issues are devolved, so Scotland and Wales could also call on more of our science budget.

Going it alone on the environment requires a lot more work from our biodiversity and natural environment research base that has previously been funded through EU programmes. There are some 500 environmental directives, each of which will require a science review. Another big call on our science budget will be maintaining the Schengen information system for law enforcement and policing, and other big data systems that we depend on for trade and security.

All these issues are tackled much more effectively, and at lower cost, at a European centre of excellence—more effectively and cheaply than we could do it alone. If Brexit is going to call more heavily on our own science budget, surely this must be the wrong time to introduce a Higher Education and Research Bill designed to change the very structures that fund our science. If this is a listening Government, surely after hearing the well-reasoned and authoritative arguments in today’s debate, one thing they could do immediately is to put that Bill on hold.

Photo of Baroness Wolf of Dulwich Baroness Wolf of Dulwich Crossbench 1:19 pm, 3rd November 2016

I too congratulate the noble Lord, Lord Soley, on securing this debate and, like many other noble Lords, declare an interest. I am a full-time academic at King’s College London and professor of public sector management; I run a postgraduate degree and also a research centre on international higher education policy.

Many noble Lords have spoken eloquently about the immediate concerns of the higher education sector and the worries that everyone has in the aftermath of the referendum. I would like to mention a couple of more general issues and give the discussion a little more historical context. It is important to remember this although we are indeed in something of a golden age for higher education in this country, it is very recent. Twenty years ago, this country’s higher education sector looked very different and in imminent danger of near collapse, not of becoming, as we have heard, one of what are clearly the two leading systems in the world.

The noble Viscount, Lord Ridley, noted the five British Nobel prize winners currently in the United States. Of course, they did not leave because of Brexit or for any reasons to do with the EU; they left when, not long ago, we had a massive exodus from British science because the conditions were so poor. The past 15 years have been very good for British higher education for a number of reasons, which include greatly increased support in many—not all—areas of research from the Government and the arrival of both fees for home students and growing numbers of overseas students.

It is important to recognise that the general context, particularly the economic context, has a huge impact on what happens to higher education and that, whatever happens with EU programmes, we are in for a very uncomfortable couple of decades because everything will be so uncertain. Our US staff have just taken a 20% pay cut, which will obviously have an impact.

It is also important to realise that although we seem to have been in a glorious period, a number of things in higher education have not been going so wonderfully. Now that everything is up for grabs, I hope that the Government will take note of where a number of things that we have been able to do have papered over cracks within our system and the education system of our country. The noble Baroness, Lady Blackstone, referred to this. Many of our departments, particularly those which require quantitative skills, are recruiting overseas and EU staff not only because they want to be open to all the talents, but because it is extremely difficult to find any British candidates. You can see the impact of that in departments of mathematics or in any of the quantitative social sciences.

I urge the Government, in considering both immigration and higher education policy, to take note of the fact that there are major problems with the education system of this country which mean that we are not nurturing the talent we need for the next generation of higher education researchers and academics. That should be a priority for the next few years.

Perhaps most importantly, I want to refer to the new political environment. Several noble Lords, including the noble Lords, Lord Giddens and Lord Haskel, referred to the Higher Education and Research Bill. We are now in a very strange political environment. We have a higher education Bill coming through which proclaims the glories of the market and of open entry for new institutions while in fact increasing enormously the level of micromanagement and regulation of the whole sector.

My fear is that we have a train crash advancing, because we have that on the one side and on the other a Home Office determined to reduce immigration and also—in many ways rightly—concerned about low-quality providers. That is not the Home Office’s job, but in its defence, it has a record of detecting and closing fraudulent language schools. The terror now is that it seems to feel that it can identify high-quality and low-quality institutions and fine-tune immigration in those terms. That is a dreadful prospect. Good university systems are those that have autonomous institutions. Whatever other parts of government may be telling it, there is no way that it can take a simple metric to decide whether an institution is good or bad and tie immigration facilities to that measure.

I ask the Minister to assure us that the Government are indeed aware that they do not have a valid, tested metric for judging the quality of an institution and that any measures relying on such a metric are bound not only to fail in their objectives but to do enormous damage to the quality of the higher education sector.

Photo of Baroness Eccles of Moulton Baroness Eccles of Moulton Conservative 1:24 pm, 3rd November 2016

My Lords, I too congratulate the noble Lord, Lord Soley, on introducing this most timely and important debate. It is daunting to stand here following so many powerful and well-informed speeches—and there will be more to come.

The interest I can declare is a long time ago. In 1982, I joined Durham University’s council and for the next 20 years played a part in its administration. During that time and more recently, changes in funding have caused some uncertainty, but nothing compared with what we are facing today. For instance, the introduction of tuition fees was a departure from the formula previously used by the Higher Education Funding Council. Also, there were quotas for student numbers, with financial penalties if the quotas were not achieved or were exceeded. In the case of funding for research, the application of the research rating is adjusted every six years and measures the output of the academic staff and their publications. The next research excellence framework is due in 2020. The funding from the EU comes via the eligibility criteria. It varies year by year, but remains a reliable source of funding. That is a little bit of scene-setting of how it was before we woke up on 24 June, when the landscape had already changed dramatically.

One of the first reactions was: what about freedom of movement and the right to stay? This concerned everyone working in the university sector who came from the EU, both students and academic staff. There has been some reassurance from the Government, but until negotiations have taken place, it is inevitably short term. This, in a sector where planning is long term, especially for research contracts, introduces a degree of uncertainty never known before.

To state the obvious, universities carry out research on disciplines other than those within the scientific definition. Although these disciplines attract far less funding for research, they must not be disregarded. There is an interdependence between the student body and the academic body; one could not exist without the other in our public universities. The funding of one affects the funding of the other. It must also be remembered, as was mentioned by a previous speaker—I think it was the noble Baroness, Lady Blackstone—that in the field of medicine, teaching hospitals have links to universities, so scientific research impacts on our health service, too.

The next subject I want to mention has been mentioned by more than half the speakers so far: Horizon 2020. The Government have been reassuring about continuing participation in it. The body describes itself as having the biggest research and innovation programme in the EU, with nearly €80 billion of funding available for seven years, starting in 2014. The Government say that they will work with the Commission to ensure payment when funds are awarded. The important message at this stage is that UK participants can bid for competitive EU research funding while we remain a member of the EU. The Treasury will underwrite the payment of such awards, even when specific projects continue beyond the UK’s departure from the EU. It is also important that funding for scientific research is maintained so that we hold our position as global leaders in international research.

The universities themselves do not appear to be looking for change. Therefore, we need the negotiations to protect and preserve all that is good in our universities and research activities. This will allow them to prosper and develop into the future.

Photo of Baroness Crawley Baroness Crawley Labour 1:30 pm, 3rd November 2016

My Lords, I too am extremely grateful to my noble friend Lord Soley for initiating this important debate and getting us off to such an excellent start—the debate could not be more timely. Those of us who voted to remain in the European Union see the future uncertainty in the area of funding for universities and scientific research as one more reason to fear for the gains that this country has made over the last 20 years in becoming a global leader in research and development. Our status as a leader in research and development, as many noble Lords have said, did not come despite our membership of the EU but, in many aspects, because of it. Many of us in this House are privileged to have received honorary doctorates from universities and indeed many noble Lords are chancellors of our wonderful universities. We all know at first hand of the pressures on those universities even before 23 June—as the noble Baroness, Lady Eccles, the noble Lord, Lord Fox, and many others have said—and we are aware now of so much post-Brexit anxiety among them.

Universities across this country have a proud history of welcoming students and researchers from the EU and the rest of the world, which enhances the diversity and intellectual quality of our university courses and our research departments. It also brings much-needed economic stability and predictability to our colleges and centres of excellence. Yet the Government, in bending the crooked knee to a hard Brexit, are insisting on including foreign students among their immigration count. Do the Government not understand that, in order for the work of universities in this country to progress, foreign students and researchers are vital?

One university with which I have a close relationship is the excellent Plymouth University. Its groundbreaking work on dementia research, for instance, has been instrumental in enabling dementia-friendly communities to be set up throughout the south-west. Yet we hear this week from the Alzheimer’s Society that our role as a leading country in dementia research could well be in jeopardy as we exit the European Union. There are 850,000 people living with dementia in the UK and their number is set to rise well above 1 million by 2021. It is vital that active treatments are developed for this disease and that a cure is one day possible.

The UK has been at the forefront of the fight against dementia. David Cameron’s Challenge on Dementia 2020 stated that Britain should become,

“the best place in the world to undertake research into dementia and other neurodegenerative diseases”.

I have been personally associated with the former Prime Minister’s rural dementia groups and I know first-hand about the important work that they have undertaken. But Brexit has brought many uncertainties in this area. I ask the Minister: have the Government yet looked at the impact of the UK’s withdrawal from the EU on funding for UK dementia research? In the historically underfunded field of dementia research, EU investment is particularly critical. EU funding has become a vital source of support for that research and the loss of access to EU funding programmes could have a significant impact on major and pilot projects as well as grants for equipment for dementia researchers. What will the Government do in the long term—as noble Lords have asked—about the projects launched and funded by the EU Commission’s Horizon 2020 research and innovation programmes, many of which address the issue of dementia, once we have left the European Union?

Our universities are centres of learning but also economic hubs for their towns, cities and regions. They have always been inclusive and collaborative in their ethos, with an outward-looking view of the world and its opportunities. Will the Government ensure that Brexit will not mean the end to all that?

Photo of Lord Mair Lord Mair Crossbench 1:35 pm, 3rd November 2016

My Lords, I join other noble Lords in congratulating the noble Lord, Lord Soley, on initiating this important debate. I begin by declaring an interest as a fellow of both the Royal Society and the Royal Academy of Engineering. I am also a professor of civil engineering at the University of Cambridge where I lead a large research group, which includes many non-UK EU nationals. I will make two points: the first relates to EU funding for research and innovation and the second—closely related to funding—is about collaboration and retention of international talent. In both cases there is considerable uncertainty following the referendum.

Dealing first with EU funding, the UK receives a significantly greater amount of research funding than it contributes, a point made by the noble Lord, Lord Trees. If the UK loses access to EU funding for scientific research, will the Government pledge at the very least to make up for this funding gap? This question was also asked by the noble Lord, Lord Smith of Finsbury.

My second point is about the crucial role of collaboration and the all-important retention of international talent. UK science and technology is world-leading. The Royal Society reports that 60% of the UK’s internationally co-authored research papers are with EU partners. Losing this ability to collaborate freely would be very damaging. In my own department of engineering at Cambridge, in addition to our academic staff—many of whom are EU nationals—we have several hundred post-doctoral researchers. This community of post-doctoral researchers is the engine room for the research that underpins the university’s world-leading reputation. One-third are EU nationals—the picture is similar across the whole of Cambridge University, and for other leading UK science and technology universities.

Free movement is vital in attracting top academics and students for the benefit of UK science and technology, and for the benefit of the UK economy. The Government need to act now to ensure that academic staff, researchers and students from EU countries have certainty about the future. Otherwise, they will be deterred from working in British universities and will simply go elsewhere. Well-funded science and engineering research is vital for the economic growth of the country. Engineering contributes at least 20% of gross value added for the UK economy, and accounts for 50% of the UK’s exports. Innovation is critical to the economy; it underpins the research that has real impact on business and enterprise, as the noble Lord, Lord Broers, said.

Start-up companies play a key role in driving innovation. EU nationals are often highly influential scientists and engineers in many start-ups, generally having very close links with university research groups. Cambridge alone has more than 1,000 technology companies in or near the city, many of them spin-out companies from the university’s research groups and many of them receiving EU funding. According to the Royal Academy of Engineering, 25% of UK start-ups were founded by EU nationals, and 45% of UK start-up employees are EU nationals. A clear message is urgently needed from the Government if these vital start-ups are to remain and thrive in the UK. It is of course also crucial that these start-ups do not relocate. Other countries in the EU have been quick to seize the initiative in this period of uncertainty, encouraging UK-based start-ups to go elsewhere. The Royal Academy of Engineering draws attention to Berlin being especially proactive. The Berlin Senator for Economics, Technology and Research has been writing directly to such companies to persuade them to relocate to Berlin. Proactive government action is needed quickly to prevent this.

There is a vital need to remove the uncertainty that is already so damaging to universities and their researchers. The Prime Minister has stated that the Government are committed to ensuring a positive outcome for UK science as the UK withdraws from the EU. If this to be achieved, the major funding gap for scientific research caused by leaving the EU must be filled, one way or another, by the Government. Most importantly, the UK must remain a magnet for international talent. Without outstanding EU researchers, our science and engineering research base will suffer badly. This will be damaging for universities and innovation, and for the UK’s economy. We ignore these risks at our peril.

Photo of Lord Lipsey Lord Lipsey Labour 1:41 pm, 3rd November 2016

My Lords, I chair the Trinity Laban Conservatoire of Music and Dance in Greenwich. It is the nicest job I have ever had in my life. It is a very successful institution and recently received HEFCE’s seal of approval as a world-class teaching institution. We also recently achieved degree-awarding powers after a minute examination by the Privy Council. We are a very international place, because music is a very international discipline, with music teachers and students from around the world coming together to achieve the very best. Some 16% of our undergraduates come from the EU—to their benefit, ours and, most importantly, Britain’s. However, Brexit threatens us with a triple whammy. The first whammy is visa policy. Will this Government, desperate as they are to cut the headline numbers of immigrants to this country, impose restrictions on EU students? Universities have, of course, tried to get undergraduates excluded from immigration numbers and the public agree: only 25% consider undergraduates to be immigrants. However, there seems to be resistance, particularly from the Prime Minister. There is a danger, to put it no higher, that Ministers will think that cutting visas to end student immigration is a very easy way to obtain their immigration targets.

The second whammy is loans to students. EU students are eligible for loans from the Student Loans Company essentially on the same terms as British students. We are very grateful to the Government for extending this scheme for next year, 2017-18, but that is simply a breathing space. We need to guarantee that those loans will continue to be available in the future, as they have been in the past.

The third whammy is fees. An EU student pays the same as a domestic student at about £9,000 a year. International students pay the full cost of their courses: at an institution like mine, where there is a lot of one-to-one teaching, that is £15,000 to £20,000 a year. If EU students had to pay £15,000 or £20,000 a year rather than £9,000, would they still come? We do not know the elasticity of demand, so we cannot be sure, but I have a pretty clear instinct on this. They can go to similar institutions in other European countries—none of which is as good as mine, of course—at much lower cost, sometimes perhaps even nil cost. The idea that they will pay £15,000 or £20,000 a year, amounting to possibly more than £50,000 for a three-year course, especially when loans are not available to meet that sum, seems jolly unlikely. My real fear is that, if this development occurs, our entry from the EU will fall off a cliff.

It is by no means certain that any of this will happen. I know that Brexit means Brexit—whatever that sentence may mean—but it does not mean it is necessarily going to happen, given that the unexpected lurks in all sorts of corners of our national life. We hear today that the Government will have to come back to Parliament before invoking Article 50. If the British public turn against the previous decision, I am quite sure that, faced with the prospect of Mr Corbyn coming to power on a wave of pro-EU sentiment, the Government will change their mind about a second referendum. That is one possibility, although I do not rely on it. However, I hope to rely on the fact that the Government are entering a negotiation in which they have to take the predicament of the British university sector seriously, and not treat it, as I hear many Ministers are doing, as if it will all come right on the day or as if we do not need foreign students—a sort of xenophobic or one-island view of what higher education can do in the modern world. It is important, however, that decisions be taken soon before a generation of students in Europe decide that Britain will not welcome them and go elsewhere. That would impose devastating costs on my institution, other universities and the country we love.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat Lords Spokesperson (Health) 1:47 pm, 3rd November 2016

My Lords, I would like to focus my remarks on the life sciences and the effect of Brexit on medical research. The UK life sciences ecosystem is currently a global leader in scientific research, and commercialisation is improving. I for one would like to keep it that way. The UK is home to four of the world’s top six universities for research in, and study of, clinical, pre-clinical and health topics. It also benefits from a sophisticated regulatory system, which plays a key role in shaping EU legislation and regulatory activities. Thanks to these factors, a quarter of the world’s top 100 prescription medicines were discovered and developed in the UK. We have the largest biotech pipeline in Europe, with more than 580 products in development in 2015. Leaving the EU will have a significant impact on UK life sciences, particularly around the funding of scientific research and research collaborations. One of the top priorities for the Government in their negotiations must be to ensure that measures are in place post-Brexit to prevent any weakening of our position as a leader in life sciences research and innovation.

The contribution of life sciences to our economy is significant. They contribute more than £60 billion a year to UK GDP, with annual exports of £29.5 billion. Pharmaceuticals generated nearly four times more gross added value per head of those employed than the automotive industries. Therefore, the Government need to pay even more attention to life sciences than to companies such as Nissan. A majority of firms in the sector are SMEs, historically the main engine of UK economic growth. Collectively, these employ 220,000 people. Two-thirds of these jobs are based outside London and the south-east, stimulating regional growth, so it cannot be said that the industry is south-east biased.

It is vital that this contribution survives Brexit, but there are severe dangers. Historically, the UK has been a net recipient of €6.9 billion of R&D funds. The UK is currently part of the EU Horizon 2020 framework. Although HM Treasury’s commitment is welcome, I join other noble Lords in asking what happens to UK access to this funding beyond Horizon 2020. Lack of ERC funding might discourage top scientists from conducting their research at UK institutions, while the removal of grants to translate research into usable products may reduce the number of UK start-ups, which are important for economic growth. We heard about this phenomenon from the noble Lord, Lord Mair; the same thing applies to life sciences. Even if the UK retains access to Horizon 2020 funding, other funding sources, such as the European structural and investment funds, which brought €1.9 billion for R&D into the UK between 2007 and 2013, will be lost following Brexit. Will the Government therefore renew their dialogue with the pharmaceutical industry to ensure that it is a key plank in the renewed UK industrial strategy?

Collaboration on publications is also at risk, as we have heard. Currently, around 60% of internationally co-authored papers produced by the UK come from collaborations with EU partners. Uncertainty over funding arrangements has already jeopardised some collaboration, as we have heard from other noble Lords, and could affect many more.

Our life sciences SMEs currently enjoy access to the most developed funding pipeline in Europe, with both a thriving venture capital environment and one of the world’s most vibrant locations for initial public offerings. Many VC funds receive up to 40% of their funding from the European Investment Fund. Loss of access to European Investment Bank and EIF funding could result in reduced venture capital funding for UK SMEs and ultimately fewer UK start-ups, and of course some of them might relocate to the EU or the US.

Finally, on the role of the NHS as an engine for innovation, the UK has an opportunity to capitalise on the unique potential of the NHS to act as a “single site” for clinical trials. As a closed healthcare system for a large and diverse population, with access to data across the entire patient journey, the NHS is a unique selling point for conducting clinical trials in the UK. The improved co-ordination and integration of patient records is especially valuable here. We heard some specific examples of this from the noble Baroness, Lady Blackstone.

Therefore, research and translational funding, collaboration, jobs and SMEs, and the NHS—all are at risk. UK life sciences could be heading for disaster. The Government, led by the three Brexiteers, like a bunch of lemmings jumping over a cliff, are planning to take the universities and scientific research with them. Does the Minister have a parachute?

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour 1:53 pm, 3rd November 2016

My Lords, I congratulate my noble friend Lord Soley on this debate. I declare my interest as a professor in various universities and as an applied scientist.

This is yet another profoundly depressing debate that deals with the mainly negative consequences of government policies following the referendum result in June for the UK to leave the EU. These policies affect UK science, research and universities and, as the noble Lord, Lord Smith, movingly said, the many thousands of individual British, European and non-European workers in universities. How, one wonders, is the House of Lords responding? The Government Benches are remaining rather cheerful, while the other Benches are not so cheerful. However, university common rooms, which are usually cheerful places, have become extremely gloomy about the consequences.

Essentially, the Brexit policies will, after a few years, lead to significant reductions of UK involvement in research projects funded by EC programmes and, most likely, a significantly reduced involvement of EU scientists working and living in the UK. The Royal Society—and the noble Viscount, Lord Ridley, in his remarks—is more optimistic about future funds for UK involvement in these programmes. However, as other noble Lords have said, so far as we can gather they are finite, having a cut-off point, and most academics are quite pessimistic about this long-term commitment.

The UK’s international reputation is also important, and colleagues from all over the world have heard with incredulity about the likely withdrawal of significant UK research associated with EU collaboration. This is indeed extraordinary, since the total amount of the UK’s research, although of a high standard, is appreciably less than that of other leading countries—a point made by the noble Lord, Lord Kakkar. There has been no suggestion or explanation that this important gap will be closed, which is of course reflected in and is a consequence of the low industrial productivity in the UK.

Nevertheless, I will make a few constructive remarks. The visa process for researchers to come to the UK should be expedited. Many researchers work in research institutions and companies, and some of them want to become British citizens as a result of these changes. However, the trouble is that this process in the Home Office takes such a long time that some of these people will say, “I can’t wait that long”, and will leave. For example, this delay is leading one small high-tech company, with mostly non-British staff, to set up a branch office in Germany with the possibility of relocating—a possibility the noble Lord, Lord Mair, just described. Will the Minister tell us whether foreign visiting scientists will be able to travel across Europe? If not, they will restrict their visits solely to the Schengen EU countries. Again, one is already seeing that some scientists from Asia, for example, will choose to avoid the UK when planning to come to Europe simply to have one visa for all these countries.

My second point is that we should use UK research funds to enable UK researchers to continue to participate in European-wide networks, as many noble Lords mentioned, including the noble Lord, Lord Willetts. For example, I was involved in setting up such a network involving aerospace, automobile and other companies in the late 1980s, which has been extremely successful. This continues to be supported in various ways by EC grants. With the UK leaving the EU, it will still be possible for the UK to contribute and benefit because these are open organisations, but they may not have the benefit of funding. For example, this particular network, ERCOFTAC, has led to open European collaboration in technologies. The openness of Airbus has enabled European researchers to contribute in a way that, for example, US researchers cannot, being unable to collaborate with Boeing, which is a very secretive organisation.

EC civil servants have made clear that the EC will continue to be a global hub for researchers all over the world, which will include the UK, although clearly we will not be in a leading position. However, it is important for the Government to encourage the UK to participate; I hear from conversations that Whitehall civil servants recognise this. Europe has pioneered international research and its applications, not only through EC collaboration but through the intergovernmental satellite scientific organisations; other noble Lords commented on this, and my noble friend Lord Soley referred to space. I cannot speak more about this—I have spoken for my five minutes.

Photo of Lord Rees of Ludlow Lord Rees of Ludlow Crossbench 1:58 pm, 3rd November 2016

My Lords, I declare an interest as a member of Cambridge University, an institution that is global in its staffing, its students and its mission. I am one of the 93% of scientists who opined in a poll that the net effects of Brexit would be negative for science and technology. Not only big projects such as aerospace benefit from pan-European collaboration. Even small sciences and high-tech start-ups require a critical mass of internationally mobile people. The EU has been a critical catalyst across the whole range of Wissenschaft.

In my Cambridge college, there is an especially strong cohort of EU students, many from Hungary, Poland, the Czech Republic and other nations with a strong academic tradition. We are surely right to welcome them—in their own interests and those of Europe. They see themselves as Europeans, with a shared culture. They hope our continent can be a progressive political force in a turbulent and multipolar world, where the challenges cannot be tackled at national level. Indeed, the science and university-based arguments against Brexit, compelling though they are, are trumped for many of us by these broader European aspirations.

It is sometimes argued that it is not the EU but the rest of the world with which we should engage, as though there is a conflict between these goals, but the opposite is the case. We will be less attractive to mobile talent and collaborators from the US or India if we cannot offer open links to European networks. Indeed, the worry is that even if the funding streams were sustained for participation in the ERC, Horizon 2020 and the Erasmus exchanges, Brexit would still weaken us. Skilled people from overseas already feel less welcome, their families less secure. The Chancellor has assured international bankers of special treatment but there has been no comfort for any other sector.

We can learn lessons from the past. This year’s Nobel Prize in Physics was shared between three Brits for work carried out mainly in the UK around 1980. All three defected to the US during the Thatcher years, when university budgets here were heavily squeezed. Fortunately, our situation has brightened since then, substantially due to the strengthening of mainland Europe’s science and the EU. Indeed, we have had genuine “brain gains”. Among them are the current Royal Society president and the discoverers of the wonder material graphene, who came here from Russia, via a stay in Holland. Would they choose Britain today? Post-Brexit, such gains will be at risk. The prospects of new collaborations may be jeopardised. Outstanding foreigners will not want to work here as much. Many who are already here will feel that they will be better off abroad. Ambitious young people considering science as a career will wonder whether they can do their best work in this country.

That is why, incidentally, the contentious Higher Education and Research Bill is proving so unfortunately timed. Universities and researchers need to focus on damage limitation. What they do not need is a major and distracting reorganisation. As the noble Lord, Lord Haskel, said, the Bill should surely be shelved.

However, these issues are not just a matter for academia. The whole country suffers if our hard-won expertise in science and our universities spiral into decline. The maxim, “If we don’t get smarter, we’ll get poorer”, will apply even more powerfully if we have to contend with the fallout from Brexit.

Photo of Lord Judd Lord Judd Labour 2:03 pm, 3rd November 2016

My Lords, I declare an interest as an emeritus governor of the LSE, and I am glad to be a life member of court at both Lancaster and Newcastle Universities. In relation to those universities, I emphasise the importance of what my noble friend Lord Liddle said. Universities in the north are vital to the regeneration and future well-being of a largely deprived community. If we allow this situation to deteriorate, we shall never be forgiven. This is a grave and serious matter on which we need urgent reassurances.

I have sat as a lay man listening to this debate and have a sense of rapidly advancing disaster ahead. I do not say “disaster” lightly. Universities and higher education are fundamentally important, to not just the survival but the well-being of the United Kingdom. They need to be cherished, encouraged and supported in every way. If I were to say nothing else about the messages that I have heard today, what worries me is that the effectiveness of universities, their spirit and the quality of their work are related to their morale. It is upsetting to hear the accumulated evidence of plummeting morale in universities as uncertainty prevails.

We are discussing this issue in the context of not just Brexit but the higher education Bill, which is rapidly coming towards us. We will all need to keep going back to the fundamental point of asking: what are universities for? They are of course there to provide the resources of knowledge, expertise and the rest that are essential to the running of any community. However, they are about not just that but originality, challenging and the ability to put forward vision, as the noble Lord, Lord Smith, said so well. How much I should like to have back the Britain that he wants to get back to in terms of values and attitudes.

It is impossible to have a relevant university in the modern world—which is, above all, highly interdependent—if it is not by definition an international community. It is not just about the different experiences that people bring in their own academic work; it is the social and psychological reality of students and staff approaching their work and lives together in the context of feeling every day that they belong to a global community. It is there in their university. Unless that is preserved as a high priority, our universities will quickly wither and become irrelevant.

The important point, above all, is vision. In some ways we are facing, in the context of this debate, the consequences of a trend that has been developing too fast—a tendency to see universities simply in their utilitarian contribution to the well-being of society. Our past strength and future is and has been related to people being prepared to challenge and think outside the established routine, and to look ahead. How on earth is that to happen if we do not have the richness of international community in our midst? This is an urgent debate and we need evidence—I do not see any—that the Government are giving it the priority it deserves.

Photo of Lord Paul Lord Paul Non-affiliated 2:08 pm, 3rd November 2016

My Lords, I thank the noble Lord, Lord Soley, for introducing this timely debate and declare an interest as the chancellor of the University of Wolverhampton.

The outcome of the EU referendum was not the result that most in the higher education sector wanted, wished for or indeed expected. However, a decision has been made, and we must all accept the result and work constructively with the Government to support the best possible outcome for the UK during the negotiations and beyond.

Universities have a key role to play. They are a national asset that has played and will continue to play an essential part in promoting and driving economic growth, as well as ensuring that we offer and deliver a fairer society. I am certain that our British universities can thrive and prosper post exit but they must receive the right support from our Government. There is too much to lose.

The UK university sector is innovative, entrepreneurial and responsive. That is thanks largely to the autonomy of the sector—something we hope this House will seek to preserve and retain when the Higher Education and Research Bill is considered soon. We have seen positive signs of intent from the Government recently and I am very pleased to note the extension to the government guarantee for funding European Structural and Investment Funds projects. This complements similar guarantees regarding Horizon 2020 research funding.

So there are some good signs but much more needs to be done. We all understand that the Brexit negotiations will be complex, tricky and time consuming, but we must not allow our universities to be unnecessarily and unhelpfully constrained. Our approach should enable them to enhance and promote international research collaboration, with partners both in Europe and across the world; to gain access to increased levels of investment in research and innovation; and to develop workable policies to promote the UK as an attractive destination for all international students and staff, including considerate and pragmatic immigration policy reforms. Collectively, we have some 125,000 EU students and 43,000 EU staff at our universities—all adding value to our economy. We should also enable universities to foster and grow global opportunities for UK students and staff by enhancing mobility programmes, as well as create an environment that facilitates the recruitment and retention of the best available talent.

The UK university system is well respected around the world and we must not jeopardise this good standing. To do so would be detrimental on a number of levels. The figures do not lie. Last year the total value of knowledge exchange interaction between UK universities and their partners across the economy increased to £4.2 billion, and the higher education sector generates nearly £11 billion per annum in export earnings. We lead the world in return on investment from the commercialisation of research, and we match the US in our level of engagement with industry.

Universities help to create new jobs and new businesses in communities. Last year alone, more than 4,100 new start-ups were founded by UK graduates, a great many nurtured by our universities. The University of Wolverhampton has recently created the Caparo Management Suite as a forum space in which business leaders, academics and students can all come together to exchange ideas and promote new business opportunities and development. It is essential that we keep our education system international. Our universities do much for our foreign students but the UK benefits significantly in return.

At Wolverhampton, we pride ourselves on being the university of opportunity. We openly welcome foreign staff and students, who in turn contribute an awful lot in terms of talent, ability and commitment. They add value to the system and we must continue to attract and retain that talent.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour 2:13 pm, 3rd November 2016

My Lords, although it is repetitive, I too thank my noble friend Lord Soley for achieving this very interesting debate. I declare my interest as a member of Nottingham University Council. There will probably be Members in the Chamber today who attended one of the 45 events that Nottingham University organised in Parliament last Tuesday.

That touches on the point made by my noble friend Lord Judd a few moments ago—how important universities are to their local communities. Nottingham has a proud record in that regard, as it does with international students coming to Nottingham and our students going abroad, particularly to the campuses the university has had for a number of years in China and Malaysia.

Last Tuesday was a clear example of just how entrepreneurial universities are in our community today. Those 45 events were organised by the university but were supported by more than 100 companies in the area, as well as by all the MPs in and around Nottingham. It was a very successful event, demonstrating clearly the important role of the university in the community.

There may be those who say that today’s debate is a case of special interest pleading because it is about universities and funding. I do not take that view. It is about us as a nation. Universities are not separate from or outside our nation; they are an integral part of it and of what we are in many respects. As we have heard today—I will not repeat the details; I have had to throw to one side all the facts that I had as they have all been given—our universities’ success depends on attracting talent and research funding. It is about getting out more than we put in in Europe, and it is about two-way collaboration—and not just with the EU and, separately, internationally. We have good international research because we also have good, successful European research. That is assisted by the 16% of academics from within Europe and the 12% of international academics from outside Europe. Together, all those issues determine success or failure. It is like a small jigsaw puzzle: they all live together; they are all interrelated; and they all contribute to the huge success of our university sector. They are all interdependent.

I think that the Chancellor of the Exchequer was trying to be helpful when he said, “Don’t worry. The research funding you lose, we will meet”. However, it is not just a matter of money; it is about culture and expanding the boundaries of the talent that we can bring together to work in the best interests not just of Britain but of the globe—it is something from which we all benefit.

This debate goes to the heart of what the United Kingdom will be after Brexit. Do we stumble into it, as one might read from this debate? Will we have self-inflicted wounds—or what some might call “vandalism”—if we do not, as a nation, deal with this issue? We are looking desperately to the Government to show leadership and to guide us. We are not looking to them to say, “We’re not going to discuss every line of our negotiations”, or, “We’re thinking about it and will come back to you”. That is not good enough. The point made about Nissan was exactly what many of us feel. My background is in industry. Although none of us knows the details, I was delighted to hear about Nissan last week. However, with all due respect to Nissan and its importance to this country, what it contributes is only a small proportion of that contributed by our university sector to the nation’s economy and sense of well-being. Some 180 countries send students to the United Kingdom. For a little island like ours, that is a huge success. It is no good repeating the mantra, “Business will help”. Business in the UK does not generate even the average amount of research funding in Europe. In that respect, our universities are second only to those in Germany. So we cannot rely on business because it is not successful in bringing in research money.

Universities are right to ask these questions. The Government have a responsibility not to keep pushing it away but to give an answer—a whole, rounded answer—to the question: what is our position on universities for the future?

Photo of Lord Bilimoria Lord Bilimoria Crossbench 2:19 pm, 3rd November 2016

My Lords, when I visited CERN in Geneva, I realised that the experiments that led to the famous Higgs boson discovery, ATLAS and CMS, were both headed by British scientists: Professor Dave Charlton from the University of Birmingham, and Professor Sir Tejinder Virdee from Imperial College. And of course it was Sir Tim Berners-Lee who actually created the world wide web at CERN. Then, this year, we had the gravitational waves proving Einstein’s theory of relativity, 100 years later, with 1.3 billion light years being measured. Who were two of the principal scientists behind that? Professor Alberto Vecchio and Professor Andreas Frieze—EU scientists at the University of Birmingham. What makes this country great—this 1% of the world’s population, as my noble friend Lord Kakkar said—is not our natural resources but our talent. The jewel in our crown is our universities, which are the best in the world, along with those in the United States of America.

I declare my various interests, including being the proud chancellor of the University of Birmingham, chair of the advisory board of the Cambridge Judge Business School and the president of the UK Council for International Student Affairs, representing the 450,000 international students in this country, of whom 180,000 are from the EU.

I say that we achieve all this excellence in spite of underspending on HE. We spend way below the EU and OECD average, and we are well behind the United States of America. When it comes to our research and development spending as a proportion of GDP, South Korea spends double the percentage that we do and we are way below the EU average, let alone that of the United States. What is scary is that the proportion of GDP spent on R&D, 1.6%, has been falling from 1985 to 2013. Will the Minister acknowledge this?

We heard from my noble friends Lord Rees and Lord Smith and others that at the University of Cambridge, around 16.5% of university staff are EEA nationals. When it comes to PhD students, that figure is 27%, and for MPhils, it is 21%. Look at the awards: UK institutions have won more ERC awards than any other country—989 compared with France’s 577.

On the implications and opportunities of leaving the EU on science and research, the University of Cambridge’s response is that,

“it will create significant challenges for Universities. We recognise that there is a great deal of uncertainty”.

Everyone has said that today. But the university also said that the political instability raises significant questions in the following areas. It refers to,

“our recruitment and retention of the brightest and best staff and students regardless of nationality … the future of our substantial European research funding”,

and the point that many noble Lords have touched on,

“the extensive global network of the University’s collaborations”.

Sixty percent of the UK’s internationally co-authored papers are with EU partners. The mobility of our scientists is phenomenal—I have given you just one illustration. Professor Alice Gast of Imperial College, one of the top 10 universities in the world, said:

“Foreigners improve the creativity and productivity of home-grown talent, too”.

They enrich our universities, both academics and students.

Cambridge was the highest recipient of EU funding allocated under Horizon 2020, about which lots of Peers have spoken. I want to ask the Minister about intellectual property. In the event of Brexit—which may not happen, by the way—the value of any EU-based research for exploitation may be limited. Does the Minister agree with that? The UK has played a key role in shaping the design and implementation of the EU’s research programmes to ensure that the funding has been allocated on excellence. That has not been mentioned so far. Legislating for the ERA could have potential negative impacts on our current world-class systems.

People talk about the drop in the number of EU applicants, which is real—will the Minister confirm that? But the other aspect is that as the Royal Society said, the scientific community often works beyond national boundaries on problems of common interest and so is well placed to support diplomatic efforts that require non-traditional alliances of nations, sectors and non-governmental organisations. This is known as science diplomacy.

I conclude by saying that what worries and saddens me about this whole situation is that here we are talking about excellence and Britain being the best in the world, and yet my noble friend Lord Smith spoke about hate crime. I have lived in this country since I came here from India as a 19 year-old student in the early 80s. In 35 years I have never experienced any hate crime except for this year—and this year I have received it in abundance. Whether it is tweets, emails or letters, I cannot even repeat what people have been saying to me. It has saddened me. And yet this is the country that Liam Fox talks about opening up to the world. The world is laughing at us. They see us as closing up to the world, inward looking and insular, not open, not diverse, not plural, not tolerant and not brilliant. The headline of an Indian newspaper would read: Lord Bilimoria—this is not the Britain that I know and this is not the Britain that I love.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees 2:25 pm, 3rd November 2016

My Lords, I too add my thanks to the noble Lord, Lord Soley, for introducing this vitally important debate. The only interest I can possibly declare is that I was once educated at and by Oxford, but I assure my old university that my mistakes are all my own.

At this, the tail-end of the debate, we have heard so many distinguished and expert speakers that it is a challenge for those of us speaking at this stage to produce any new evidence. However, I would like to add my voice in support of much that has been said. It is always a pleasure to follow the noble Lord, Lord Bilimoria, who brings such energy and enthusiasm in his support for universities.

In all the publicity and dialogue during the referendum campaign, too little notice was taken of the impact on our universities of severing links with the European Union, which have been so productive and valuable over many years, as we have heard from all around the House today. In fairness, not only did the Leave campaign not highlight the impact on universities, the Remain campaign did not speak up loudly enough either. It was apparent that university communities understood, as they tended to vote in large numbers to remain. They appreciated the value of all the many connections that the EU offers, for scholarship, research, cultural and economic reasons. We must remember that scientific research is one of the UK’s strongest assets.

That is one reason why my party is arguing for clarity over the Brexit negotiations and for Parliament and the people to decide, when the options are much clearer, whether the new deal is the one that the country really wants and needs. After all, the battle bus promise of £350 million to the NHS if we left the EU is not looking as though it will be a promise kept in the near future. So it is just possible that the Brexiteers’ sunny uplands may turn out to be not so sunny, nor indeed so up.

In an insightful article in the Guardian this week, Peter Scott from the Institute of Education set out some of the threats to universities, which we have heard again today. First, as this debate highlights, is the threat to the UK’s participation in European research programmes, access to funding and to student exchange schemes such as Erasmus. The Government have done nothing to reassure EU nationals, staff and students of their continuing welcome here. Yet, we know that teachers and researchers from the EU play a key role in maintaining the UK’s enviable position in global league tables. In a number of important disciplines, we need European students to fill deficits in domestic demand, particularly in science, engineering and medicine, as the noble Baroness, Lady Wolf, and my noble friend Lady Walmsley and others have set out. I repeat the question: what assurances can the Minister give of continued working rights for current EU staff and their dependants at UK universities and for those who take up positions during the transition period before the UK has left the EU? In the longer term, will universities be sure that they can continue to recruit the talented staff they need from all over the world without overly burdensome visa requirements?

We have heard from the noble Baroness, Lady Blackstone, about the importance of academic mobility, and the noble Lord, Lord Soley, mentioned the burdensome visa requirements that may well be a hindrance to some of those we really want to attract to our country. We can all be cynical about league tables, which we know can distort, mislead and be totally unreliable, but it is nevertheless gratifying to find that Oxford heads the global table of universities, with Cambridge and Imperial close behind. These positions are held by virtue of attracting talent from around the world, and notably from within the EU.

A further threat which Peter Scott described in his article, and which has been set out by the noble Lords, Lord Smith, and Lord Bilimoria, is that the UK has established itself as a nasty country. Why should the brightest and best scholars and students choose to come to a country which is loath to welcome those in real distress and puts up barriers for genuine students, insisting that they be classified as immigrants and therefore included in the numbers that the Government are intent on reducing? We heard this from the noble Viscount, Lord Ridley, from the noble Lords, Lord Hannay, Lord Liddle, Lord Smith and others around the House. How can it be encouraging to know that the UK is reluctant to accept you because it wants to accept as few foreigners, including foreign students, as possible in order to meet an imagined ideal number? We urge the Minister to have students removed from immigration figures. That is logical. They are, after all, not here to say. The vast majority return home at the end of their studies. It is right and it makes economic sense.

We need to do much more to recapture our reputation as an open, friendly and welcoming country, which will be much more difficult once we have shut the door on partnership with our closest geographical friends and neighbours. I too support the importance of networks, which the noble Lord, Lord Willetts, my noble friend Lady Smith and the noble Baroness, Lady Dean, all referred to. The networks are as important as the funding. Other countries are not being slow in extending the hand of welcome to students who might well have chosen to come and study here.

Our withdrawal from the EU makes it even more important to increase and improve our ability to communicate with the world in languages other than English. Over the years, we have lost influence within the EU because not enough of our brightest and best opted to work in Brussels, and when they did they were frequently hindered by not having mastery of at least one and preferably more foreign languages. Without the umbrella of the EU, we are now on our own, negotiating collaboration, including on academic, trade and security matters, with countries where English is not the preferred language. What plans do the Government have for improving our language proficiency in preparation for our withdrawal from the EU?

Funding to keep us at the forefront of research in science, technology and engineering is of fundamental importance, but so too is funding for the ability to communicate internationally. Our universities deserve every encouragement and support in their promotion of modern languages. Networking is all the more effective when there is respect and fluency in people’s native languages. Within that context, I add my voice to others around the House on continued support for Erasmus and other programmes that encourage understanding, not only of other languages but of other cultures. There is immense value to our students of having the opportunity to live and study abroad. Exchanges promote international relations and understanding, and they in turn promote peace and security.

We heard from the noble Lords, Lord Hannay, Lord Rees, Lord Haskel and Lord Giddens, the noble Baroness, Lady Wolf, and others that we will shortly be receiving in this House the Higher Education and Research Bill. Sufficient unto the day—there will be time enough to scrutinise this controversial Bill in the coming months, but it is worth raising within this debate the fact that the Government appear intent on adding to the sector’s challenges by wishing to impose some astonishing and unprecedented changes on this, our most highly regarded of sectors. We shall hear more than enough about that Bill in good time, so I simply note that universities facing Brexit probably should be spared home-made challenges from an intrusive and unhelpful Government. I also note the comments of the right reverend Prelate the Bishop of Portsmouth on the dangers of seeking to rank universities’ teaching in gold, silver and bronze. The Girl Guides and the Boy Scouts have some good ideas, but this is possibly not a good one to apply to universities. As the noble Baroness, Lady Wolf, reminded us, the metrics for teaching excellence are extremely dodgy—I do not think that she used that word because it may be unparliamentary, but that is a fact.

The noble Lords, Lord Kakkar, Lord Mair, Lord Hannay and Lord Broers, referred to the learned bodies—the Royal Society, the British Academy and the Royal Academy of Engineering. We have in our country these amazingly highly regarded institutions and the Government would do very well to pay attention and to seek advice from the people they represent.

Our world-renowned universities are facing uncertain and difficult times and in this House we shall do what we can to encourage the Government to work with them to consult, support and not compound their difficulties—indeed, to meet the tests of the noble Lord, Lord Fox. This debate has enabled us to air some of the concerns and solutions, to ensure that our universities flourish into the future. I hope that our universities have heard the support that they have had from all around the House for their future well-being and our concerns for the difficulties that they currently face. I look forward to the Minister’s reply.

Photo of Lord Mendelsohn Lord Mendelsohn Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (International Trade) 2:34 pm, 3rd November 2016

My Lords, I thank my noble friend Lord Soley for introducing this debate. It has been substantial, with a high degree of consensus across the House. We have heard many distinguished contributions from leaders in the fields of academia and research and in the administration of universities.

I have two interests to declare. The first is that I have a daughter at Leeds University and three other children yet to apply to universities because of their age. I have to confess that my eldest son, who is about to go through this process, recently needed and still needs some persuading to choose a UK-based institution, given the nature of where we are. That is not a situation that I thought I would be in, but to me that is quite alarming in showing how he sees the future of Britain, its connection with other people and as an open home.

The second—this speaks more to where I am—is that I am an investor in our science and research base. I believe very strongly in the strength that we have in this country, and I have put money to work in the great genius of people developing great businesses out of great scientific insights. I recently enjoyed visiting some of these facilities, particularly Harwell in Oxford. Harwell is a leading science and innovation campus in Europe. Some 5,000 people work there in more than 200 organisations on what is a 710-acre site. Organisations currently based there include: the Science and Technology Facilities Council, with £1 billion-worth of infrastructure; the Diamond Light Source’s synchrotron; the ISIS neutron and muon investigations facility; the Central Laser Facility; computer data storage; RAL Space; and the European Space Agency.

Located fairly close by is the Oxford Business Park—one of our largest business parks—and many businesses have been spun out of that tremendous facility. I remember going to see one business there with a group of others who were looking at investing in that business. We went into a very small but classic business park building. An American investor who was with us said that, in the United States of America, there would have been a three-hour journey into the middle of the desert for such a huge facility, with lights, for the very same thing. We much undervalue that which we have. In my area of interest, I share not just the concern expressed by the noble Lords, Lord Mair and Lord Paul, about how we energise our start-ups, but about how we effectively commercialise all the ideas and businesses that we have and make them world-leading. That has become a greater concern.

Since our Brexit decision, these issues have been thrown into sharper focus, especially the people dimension. As you walk across Harwell, you are met by people from many nations and nationalities—many different people who are researchers, technicians, engineers and people starting businesses. Some of those people, who hitherto saw their futures there in working on healthcare, medical devices, space, detector systems, security facilities and satellite enterprises, do not necessarily see themselves staying in our country any more. It is very important that we get the people dimension absolutely right.

As was pointed out early on in the debate, by the noble Lord, Lord Willetts, my noble friend Lady Blackstone and the noble Baroness, Lady Smith of Newnham, networks and internationalism are absolutely crucial to modern academic and scientific research. Since the 1980s, research has become rapidly international. In the UK, 15% of papers were co-authored in 1981; that figure is now over 50%. Of the UK’s international collaborations, 80% include an EU national. The European Union’s commitment to the development of science and technology, to become the greatest hub of excellence in the world, is an intentional policy for dealing with the consequences of having to change: to meet the needs and requirements of agriculture; to have a different ability in manufacturing; to spur innovation; and to trigger, in modern industrial economies, the right sort of economy. We have been in the driving seat of this process and that has been of great benefit to us, and therefore we have to face up to the tremendous challenges that Brexit brings.

I also agree with the point about government funding of science and technology, which has been stagnating. In many ways, we have piggybacked on the EU, and we have moved to around 0.5% of GDP, as has been raised. I share the concerns expressed by the noble Lord, Lord Kakkar, who first highlighted this issue, and those of my noble friend Lord Hunt, who agreed with him. I agree with the noble Viscount, Lord Ridley, that the private sector does not play its part in this, but I disagree that it is about EU regulation. Although that is an important consideration, it is not the fundamental issue. The noble Lord, Lord Bilimoria, put it well when he talked about our general R&D spend and HE spend compared with our peers. These have always been areas where the genius and great achievements that we have had have made us punch above our weight. We ought to be concerned, in a situation where we are facing difficulties, that we do not over-rely on those assets that we have been able to depend on hitherto.

Increasingly, we are hearing concerns expressed about the consequences of leaving. My noble friend Lord Liddle mentioned the problems faced by Lancaster University in continuing to participate, and there have been many similar reports. A famous one concerns the Department of Physics and Astronomy at the University of Sheffield, which was thrown out of an EU research consortium after the referendum. There are many of these stories that reflect the problem which we have to address.

The negotiations will be very important. We can be involved in a variety of projects. Withdrawal does not mean that we will have no form of activity, but in my view—to meet the test set by the noble Viscount, Lord Ridley—to leap ahead requires us to be more than inventive and more than just associated with these programmes, and indeed to do a lot more. The noble Baroness, Lady Garden, made a good point about the European projects that we have to remain involved in; that is tremendously important. Let us consider the sobering story of what has happened in Switzerland, which after its referendum faced a situation where was there a drop in students under the Erasmus programme, funding was withdrawn and access to initiatives was closed. Now, the Swiss pharmaceutical industry is losing its place because it is no longer able to participate in the EU’s Innovative Medicines Initiative. We have to make sure that we retain our place in these areas.

We welcome the Government’s extension of student funding for current research projects, but it is insufficient. Sticking your finger in the dam is not a long-term strategy. We have to think about what will need to be done in the future—a point made by many noble Lords. We also have to consider the European development funds which provide support for science parks, science-based initiatives and innovative businesses. Some €3.6 billion has been allocated to the UK for the period 2014 to 2020, of which very little has been spent thus far.

I welcome the decision of the High Court this morning to reaffirm the sovereignty of Parliament, and I hope that the Government think about this wisely and do not appeal it. I do not think that it is about blocking; it is about making sure that we deal with these challenges in the right way. As the noble Lord, Lord Paul, said, we need to be constructive. I hope, as many other speakers have said, that we make sure that we can see a detailed approach by the Government; they need to say more rather than less.

The huge degree of consensus and concern across this House on this merits the Minister setting out why there cannot or should not be—I hope that he will announce that there will be—a permanent or long-established framework for consultation and collaboration with those affected, as suggested by the noble Lord, Lord Willetts. We also need an approach to addressing the future of students, researchers and others. They are the people we need in our country, we want them to work here and we want students in our institutions in order to make sure that they are properly financed.

We need a clear statement of commitment to the ambition for universities and for research. That plays not just to the question of our ambition for those areas; it is also, as my noble friend Lord Liddle said, about what sort of country we want to be. My noble friend Lord Judd highlighted that it is about what sort of country we want to be not only in the south, but also in the north. That also accounts for the concern of the noble Lord, Lord Smith of Finsbury, about racism and xenophobia. The noble Lord, Lord Bilimoria, made an important point about how outward-looking we are and how others see us—what we say is not what they see, because what we have done is not the act of those who look outwards.

The Government should be very concerned about the Higher Education and Research Bill. We have heard many speakers, including the noble Lord, Lord Rees of Ludlow, my noble friends Lord Giddens and Lord Haskel, and the noble Baronesses, Lady Wolf and Lady Garden, comment that the Government ought to withdraw it and think about it again. I agree with the noble Lord, Lord Broers, when he talked about the problems around putting Innovate UK into the research councils, while the right reverend Prelate made a good case for how to deal with the issue. The Government are running the risk of the Bill receiving a great deal of scrutiny and a desire for the use of the instrument of a Select Committee—used previously but only rarely—to make sure that we get the detail right.

Finally, I should like to stress the point about making sure that these matters are adequately covered in the Autumn Statement and in the industrial strategy, and how these things are linked. I turn also to the question put by the noble Lord, Lord Hannay. If the CEO of Nissan can get a meeting, why cannot the heads of our tremendously important and economically significant institutions get the same sort of access and the same sort of assurances?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education) 2:45 pm, 3rd November 2016

My Lords, I am grateful to the noble Lord, Lord Soley, for securing this debate on the potential impact of the UK’s withdrawal from the European Union on funding for universities and scientific research. This is an important topic which is of great interest to the House, as reflected by the number of distinguished Peers contributing today. I shall start by addressing the important and sobering point raised by the noble Lords, Lord Smith, Lord Bilimoria and Lord Mendelsohn, about hate crime. We have been working closely with the police at both the national and the regional level to monitor hate crime since the referendum result. Local forces have the necessary assistance and guidance to respond. On 26 July we published a comprehensive cross-government hate crime action plan which includes education plans. Ministers and officials have met the ambassadors and high commissioners of EU states to offer reassurance.

As many noble Lords have commented, we are right to be proud of the strength of our research and innovation base and the quality of our universities. Research, innovation and knowledge are the drivers of our global competitiveness and a key source of economic advantage. Indeed, in one of her first major speeches as Prime Minister, Theresa May said that she wanted the United Kingdom to formulate a new industrial strategy. British science is one of our truly outstanding national assets, which along with our other areas of comparative advantage will surely be one of the main building blocks. I thank my noble friend Lord Ridley for mentioning that we should use the current changes as an important way of taking a leap forward and see them as an opportunity, although by no means being complacent about the issues we have to face.

We have continued to recognise that the result of the EU referendum has brought with it some uncertainty for our universities and researchers, and I am mindful of today’s news. I will go on to talk about the important steps that the Government have already taken to address those concerns, but it may be helpful to start by reflecting on the UK’s research and innovation landscape. I appreciated the historical perspective highlighted by the noble Baroness, Lady Wolf, and how the climate was somewhat different 20 years ago.

In the global league tables today, the UK has four universities in the world’s top 10 and 18 in the top 100. UK universities are home to both world-class teaching and innovative research. At this point I should like to address some of the concerns raised about the Higher Education and Research Bill, notably those expressed by the noble Lords, Lord Haskel, Lord Giddens and Lord Rees, and the noble Baroness, Lady Garden. We believe that the current higher education regulatory system is sub-optimal and was designed for an era of grant funding. It needs to be brought up to date. The reforms in the Bill will drive innovation, diversity, quality and capacity, ensuring that we remain attractive internationally. It will provide stability, putting in place the robust regulatory framework that is needed. It joins up the regulation of the market, which is essential to ensure that students are protected and that both they and the taxpayer receive good value for money from the system. The right reverend Prelate the Bishop of Portsmouth, the noble Baroness, Lady Garden, and the noble Lord, Lord Mendelsohn, raised the issue of the teaching excellence framework and the rating system. The TEF has the potential to enhance the reputation of UK higher education. Students will have a better idea of what to expect from their studies compared with anywhere else in the world, while providers with high scores in the teaching excellence framework will be able to market themselves even more effectively.

The noble Lord, Lord Broers, made a point along the same lines about why we are aiming to bring Innovate UK into UKRI. We believe this will bring benefits to business, researchers and the UK as a whole. It will help businesses identify partners and it will mean research outputs are better aligned with their needs. Researchers will benefit from greater exposure to business and commercialisation expertise. I look forward to addressing the details of the Bill when I help to take it through the House quite soon.

The UK science sector is one of the very best in the world, as many Peers have highlighted. It is highly efficient, competitive and internationally successful. The noble Lord, Lord Soley, highlighted the strong, essential interconnections that are so important with other countries. Within the G7 we have the most productive science base in terms of papers and citations per unit of GDP. As the noble Lords, Lord Kakkar, Lord Fox and Lord Mendelsohn, said, we punch well above our weight. With only 0.9% of the global population and 3.2% of R&D expenditure, we produce 15.9% of the most highly cited research articles, which provides a measure of the quality and impact of UK research. We have a long-established system that supports, and therefore attracts, the brightest minds at all stages of their careers. We will continue to fund excellent science wherever it originates and, importantly, ensure there is academic freedom to tackle important scientific questions.

As I have previously said, we appreciate that the result of the referendum has raised understandable concerns, given the multiple interactions between UK and EU institutions and structures that impact on UK researchers and universities. We have acted quickly to provide important reassurances. Just after the referendum result the Prime Minister wrote to Sir Paul Nurse, the Nobel prize-winning scientist and chief executive and director of the Francis Crick Institute, to reassure him of,

“the government’s commitment to ensuring a positive outcome for UK science as we exit the European Union”.

I reassure the noble Lord, Lord Trees, that this is a priority. I note his points about the importance of science and animal research.

As my noble friend Lady Eccles mentioned, in August this year the Chancellor committed that the Treasury will guarantee all competitively bid-for EU research funding that is applied for before our departure from the EU and is successful. The Government have communicated this announcement widely through our embassies, and we are grateful for the efforts of UK stakeholders who have been reinforcing this message through their networks. It is very positive for the sector that the nearly 4,000 UK participants currently working on Horizon 2020-funded projects can be reassured that they can continue to collaborate on excellent research and innovation.

This is not just about academic research; our innovative businesses are also doing well in securing Horizon 2020 funding—€411 million since 2014, putting us in second place in the programme. This August’s announcement should encourage businesses to continue to participate in applications for EU funding.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour

For how long will this continue? Will it just be to the end of the existing programme in 2020? That is the question nobody knows the answer to.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

It is a question that has been raised in the debate. I cannot give any further reassurances on that, but I and other Ministers have laid out exactly where we are at the moment. Clearly, discussions are under way. I am sure all will become clear.

I listened carefully to the speech of the noble Lord, Lord Broers, about innovation. He is right to distinguish between curiosity, or pure research, and research-linked productivity and industry. We will discuss these important matters when we discuss the Higher Education and Research Bill.

The Chancellor also confirmed that structural and investment fund projects signed before the UK departs the EU will also be guaranteed by the Treasury after we leave. Funding for structural and investment projects will be honoured by the Treasury, so long as they meet the value-for-money criteria and are in line with domestic strategic priorities.

To reassure EU students planning to come to study in the UK, we have announced that the rules regarding the student loans that EU nationals receive from the Student Loans Company are unchanged and remain in force. Therefore, current EU students and those starting courses in the 2016-17 and 2017-18 academic years who are eligible for student support will continue to be able to access this support for the duration of their course, even if this continues after we have left the EU. Student Finance England will assess these applications against existing eligibility criteria, and will provide support in the normal way.

Photo of Baroness Blackstone Baroness Blackstone Labour

My Lords, a number of contributors to the debate asked whether the Minister could say what will happen in 2018-19, which is likely to be before the UK exits the European Union, and after that. The Minister has given no answer to either of those questions.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

That is true. I am unable to give an answer; I can be candid about that. However, I reassure the noble Baroness that this is a very important point and that these matters are being discussed and will continue to be discussed as we move forward in this particularly challenging process.

We are also grateful to the European Commission for the swift reassurances it has provided. Commissioner Moedas said in July this year:

“As long as the UK is a member of the European Union, EU law continues to apply and the UK retains all rights and obligations of a member state”.

This means that we still have the same terms of access to European research funding, such as Horizon 2020, for as long as we are still a member of the EU.

Photo of Lord Liddle Lord Liddle Labour

Following on from my noble friend’s question, I point out that we will not have left the EU by the start of term in September 2018. Does the fact that EU obligations continue to apply mean that EU students will be eligible for British loans to come to our universities in autumn 2018? Will the Minister give us that assurance?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

I have laid out exactly what our guarantees can be, but I can only say again that I am unable to comment beyond those guarantees. I hope I have reassured the House that this is a very important matter.

Photo of Lord Liddle Lord Liddle Labour

Would the Minister write to me about this point?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Department for Education) (Higher Education)

I can certainly write to the noble Lord and copy other noble Lords into a letter about this matter, but I fear I am not able to go further than other Ministers have gone. I understand the point that the noble Lord makes.

To continue on Horizon 2020, I acknowledge the enormous contribution my noble friend Lord Willetts made to the strength of the research base while he was Minister for Universities and Science. I understand that he played an important role in discussions that led to Horizon 2020 being a well-funded part of the EU budget and simpler for researchers to navigate. I am also grateful to my noble friend for his suggestions on how we can continue to collaborate with the EU on Horizon 2020. He raised one or two points, including the possibility of parallel funding. I can assure him that this will be part of those discussions.

Commissioner Moedas has also made it very clear that UK participants are not to be discriminated against when they apply for Horizon 2020 grants. He said:

“Horizon 2020 projects will continue to be evaluated based on merit and not on nationality. So I urge the European scientific community to continue to choose their project partners on the basis of excellence”.

The Minister for Universities, Science, Research and Innovation, Jo Johnson, continues to be in close contact with Commissioner Moedas. BEIS, the new department, working closely with all relevant departments such as the DfE, remains vigilant and open to any evidence of problems. As a reassurance, we have a dedicated inbox for people to send in details of any concerns. I know that the noble Lords, Lord Liddle and Lord Bragg, cited specific examples of where there may be problems. The noble Lord, Lord Bragg, also mentioned Leeds; my son graduated there this year. I noted with concern also the news from Cambridge about the 14% reduction in applications from EU students.

Although we have had some anecdotal evidence of people being asked to stand down from consortia or project-lead positions, there are no clear-cut examples specifying projects or consortia that have turned down UK participants. These anecdotes show that there has been some adverse reaction following the vote, but we also have anecdotal stories of UK researchers who were initially told that they were no longer welcome in consortia, but then later the position change—possibly connected to the funding announcement. We are engaging with the people who emailed us to check whether any new or other issues are being experienced, because this is an important matter. The announcement on underwriting Horizon 2020 funding has led to a slow-down in people contacting us and we want to make sure they keep sharing their information with us.

I want to reference comments on Horizon 2020 made recently to the Higher Education and Research Bill Committee by Sir Leszek Borysiewicz of the University of Cambridge. He said:

“We are quite confident that we can deal with the assurances that the Government have given in the short term … We have not experienced what many institutions have experienced, with people not being asked to continue on grants”.

Looking to the future, we will work with all stakeholders to ensure that our universities and researchers are protected as the UK establishes its new position in the world. So how can we be sure that the UK continues to excel?

First, I say in response to the noble Lords, Lord Fox and Lord Lipsey, that EU nationals who have lived continuously and lawfully in the UK for at least five years have an automatic and permanent right to reside under EU law. EU nationals who have lived continuously and lawfully in the UK for at least six years are also eligible to apply for British citizenship if they would like to do so.

As mentioned earlier, what happens after Brexit is up for negotiation. We are clear that we need to understand the impact of any changes we make to the UK’s immigration system on the different sectors of the economy and the labour market, including in terms of the highly skilled staff, both academics and technicians, who underpin university departments and businesses. I know that the noble Baroness, Lady Blackstone, raised this issue and I hope that this gives her some reassurance that we are taking this matter extremely seriously.

Let me clear that we recognise that EU researchers have contributed greatly to the diversity and talent base of the UK’s workforce. We hugely value the contribution of EU and international staff. This has been emphasised in recent statements by the Secretary of State for Exiting the European Union, where he has said:

“If we are to win in the global marketplace, we must win the global battle for talent. Britain has always been one of the most tolerant and welcoming places on the face of the earth. It must and it will remain so”.

Secondly, we must ensure that excellent collaboration in cutting-edge research can continue with European and international partners—this important point was raised by my noble friend Lord Willetts and others. We are now more ambitious than ever to build global research partnerships that not only put the UK at the forefront of international research on emerging global challenges but support the economic development and social welfare of developing countries around the world. We should remember that academic and research co-operation in Europe predates the EU by centuries, and the community of European academic institutions has always been much wider than the EU.

The noble Lord, Lord Giddens, and my noble friend Lord Willetts asked what type of consultation the Government were engaging in on post-Brexit research funding. I can reassure the House that the Government have been talking extensively to stakeholders. Jo Johnson announced during last week’s Select Committee inquiry into similar issues that he would invite a number of senior representatives of UK research and innovation to a high-level consultative forum to discuss the opportunities and issues arising from the UK’s exit from the European Union.

Thirdly, we must ensure that UK researchers continue to have access to, and leadership of, world-class research facilities. We have access to major research infrastructures across the world, such as the Large Hadron Collider, in which the UK plays a leading role. We are a major partner in building new infrastructure such as the Square Kilometre Array, whose global headquarters will be based at Jodrell Bank—I think the noble Lord, Lord Bilimoria, raised that point.

Finally, we need to ensure a supportive funding and regulatory landscape. As a Government, we recognise the contribution that our world-class research base makes to our economy and well-being. This is why we have committed to protect the science budget in real terms. The reforms that we are introducing through the Higher Education and Research Bill will give us a best-in-class regulatory system for higher education, and UKRI will be a strong voice for UK research and innovation on the global stage.

I am a little short of time; I will address as many questions as I can in the time available. Otherwise, as the House would expect, I will write to noble Lords.

My noble friend Lord Willetts and the noble Lords, Lord Broers and Lord Kakkar, spoke of the concerns for science and innovation in relation to the new industrial strategy. It was mentioned that VAT changes might be made; for example, charges on buildings cohabited by business and universities. I can reassure the House that the Prime Minister, the Chancellor and the Business, Energy and Industrial Strategy Secretary are clear that building a productive, open and competitive business environment is vital. Key to this Government’s aims will be delivering a comprehensive industrial strategy that gets the whole economy firing. The objective of the industrial strategy is to deliver the Prime Minister’s vision of an economy that works for all. There are three key themes. First, we can look again at the regulatory environment. We have to work hard to make sure that the European framework covers excellent research and innovation—data protection is an example of that. Secondly, we can look afresh at how we optimise international collaborations, mentioned in debate today. Thirdly, we have an opportunity through the industrial strategy to put research and innovation at the heart of what we do.

I shall stop there. As I said, I will write to noble Lords addressing the good number of questions that were raised in this long debate.

Photo of Lord Soley Lord Soley Labour 3:06 pm, 3rd November 2016

I think we all look forward to that letter, which I hope is a very full one. I thank profoundly just about every Member of this House for the thoughtful, insightful comments that have been made across the field. There is no doubt in my mind that scientific research and development are critical and they are one reason why this country has had such a leading role going back to the Industrial Revolution, when we were the first country to do that. We are continuing that process.

I do not want to delay the House, but I simply say to the Minister that he must have heard the concern in this Chamber and outside it about the uncertainty over funding and the ability of staff and students to move and keep up those transnational links that are so important to this area of society. Will he take back to Ministers, and particularly to the Prime Minister, how important that is? He might like to consider the need for a bespoke agreement covering science, research and development. There is no reason to think that the European Union wants a deal with the United Kingdom that is not also beneficial to it. It may be possible to reach a bespoke agreement at least on research and scientific development—the university aspects might be a little more difficult—but the Government need to move on this urgently if we are to maintain our position.

I am grateful to everyone, including to the Minister for his answers. I look forward to his letter.

Motion agreed.