Part of Advanced Research and Invention Agency Bill - Report – in the House of Lords at 9:15 pm on 14 December 2021.
Baroness Noakes
Conservative
9:15,
14 December 2021
My Lords, we will all be relieved that we are on the final Amendment of this Report stage.
Amendment 20 would have the effect of requiring the consent of the Secretary of State if ARIA seeks to use the powers in paragraph 17(2) of Schedule 1. These powers allow ARIA to borrow money, to acquire and dispose of land, to accept gifts, to form and participate in partnerships and joint ventures, and to form companies. I have no problem with these powers existing; they are useful techniques which are commonly used in research and development activities and scale-ups. I am, however, against public bodies taking on liabilities which are counted as public sector liabilities and which will end up being footed by taxpayers if they go wrong, without any controls. I am also wary of private sector counterparties, who may well be queuing up for a free ride on the public sector’s credit lines, knowing that they will be rewarded for success and may not have to pick up the tab for failure.
My noble friend the Minister replied to my amendment in Committee, saying that conditions would be attached to grant funding given under Clause 4 of the Bill, and that borrowing would have to meet stringent requirements set out in Managing Public Money. The Minister also said that any borrowing would have to be agreed with HM Treasury in advance. I accept that it is possible that this will work perfectly well, with ARIA agreeing to abide completely by whatever the Treasury and BEIS say. It is certainly likely to toe the line all the time that it is dependent on grant funding from BEIS.
My question to the Minister is based on a different scenario. Let us assume that BEIS has handed over the £500 million committed for this Parliament and that the Chancellor has said that there is no more money. We know that the power to wind up ARIA will kick in only after 10 years, so what does the Minister think will happen in the years between, say, 2024 and 2032, with no more grant money arriving? My guess is that borrowing money would become irresistible. Moreover, the value-for-money test in Managing Public Money will be very easy to satisfy, because the counterfactual of using public money will not exist. Complex structures that look like partnerships or joint ventures could actually be borrowing by another name—I have seen that all before.
That is why I believe it would be safer if this Bill embedded a consent requirement. A consent requirement might look rather heavy-handed at first sight, but it could easily be tempered by delegation arrangements which did not require all transactions to have to be sent to the Secretary of State for approval.
I look forward to hearing how the Government think they can keep control of an organisation which has unconstrained statutory powers once the Government have lost the lever of grant payments. If they are not certain that they can deal with all eventualities, I respectfully suggest to my noble friend that an amendment such as this one, or something similar, is needed. I beg to move.
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As a bill passes through Parliament, MPs and peers may suggest amendments - or changes - which they believe will improve the quality of the legislation.
Many hundreds of amendments are proposed by members to major bills as they pass through committee stage, report stage and third reading in both Houses of Parliament.
In the end only a handful of amendments will be incorporated into any bill.
The Speaker - or the chairman in the case of standing committees - has the power to select which amendments should be debated.
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