Schedule 1 - The Advanced Research and Invention Agency

Advanced Research and Invention Agency Bill – in a Public Bill Committee at 2:00 pm on 20th April 2021.

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Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport) 2:00 pm, 20th April 2021

I beg to move amendment 7, in schedule 1, page 6, line 24, at end insert—

“(5) The Secretary of State must, in appointing the members of ARIA, have regard to the desirability of the members (between them) having relevant experience.”

This amendment would require the Secretary of State to have regard to the (collective) relevant experience of ARIA’s members when using their power of appointment.

Photo of Judith Cummins Judith Cummins Labour, Bradford South

With this it will be convenient to discuss amendment 8, in schedule 1, page 6, line 24, at end insert—

“(5) The Secretary of State must, in appointing the members of ARIA, have regard to the desirability of the members including at least one person with relevant experience in relation to each of Wales, Scotland and Northern Ireland.

(6) In this section, ‘relevant experience’ means experience of one or more of the following—

(a) the conduct of scientific research; and

(b) the development or exploitation of scientific knowledge.”

This amendment would require the Secretary of State to have regard to the (collective) relevant experience of ARIA’s members in the devolved nations when using their power of appointment.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

It is a pleasure, to serve under your chairmanship, Mrs Cummins, and to return to our deliberations on the Advanced Research and Invention Agency Bill.

Both amendments concern the diversity and characteristics of the members of the board of the Advanced Research and Invention Agency. We have heard repeatedly in our deliberations that the board has a significant amount of power and autonomy. In our view, it suffers from lack of oversight, which the amendments are designed to address.

Amendment 7 would require the Secretary of State to have regard to the collective experience of ARIA’s members in the devolved nations when using the power of appointment. The Labour party believes that science can be an engine of progress for society, and that it needs to be by and for everyone, not a private cashpoint for the few. It is essential that everyone in each region of the UK benefits from the creation of ARIA.

The Government have made many levelling-up promises over the past 18 months, just as they have made many promises to support science, but it is reported that they are now on track to miss the R&D target spend of 2.4% of GDP, following the cuts to international science spend, which were debated in the Chamber this morning, and the failure to provide support to medical research charities during the pandemic, forcing them to make sweeping cuts. The Royal Society has said that the Government’s actions, such as the cuts to overseas development aid and science, and the lack of clarity until the last moment about Horizon European science funding are undermining the ambition for the UK to be a science power. We do not want the people of this country to be short-changed by the Bill, when it comes to the levelling-up agenda.

Levelling up is not possible without utilising the skills and experience of all those who have extensive knowledge of scientific research and knowledge in each nation of the United Kingdom. Each of the devolved nations possesses subtle and significant differences in their research landscapes. Our amendment would require the Secretary of State to have regard to the relevant experience of ARIA members when making appointments. We cannot expect ARIA to function effectively for every area of the Union, if its key decision makers and knowledge base are restricted to one narrow region of England. I am sure the Minister agrees.

Labour recognises that, as does UK Research and Innovation. In November 2020, UKRI chairman Sir John Kingman told the Select Committee on Science and Technology:

“We have structures that involve regular consultation with the devolved Administrations and the funding agencies in the devolved Administrations.”

He also told the Committee that this good working relationship was in contradiction to the decision not to have board-level regional representation. He said:

“It was decided at the time that there should not be representatives of the devolved countries on the board. In practice, I would say that there are two members of the current board.”

As we see, UKRI has had to struggle against the lack of representation on its board, so let us make it official and clear from the beginning that ARIA is a national body. Research and development is a vital driver of growth, and we must utilise ARIA in each region and nation to unlock new markets and create jobs. We all want significant improvement in the way in which the benefits of research and development are shared across our nation, and we want those who contribute to it to come from all areas of our nation. I therefore hope the Minister welcomes amendment 7, which would ensure that.

In the evidence sessions, we heard about the importance of public service in attracting good people to the ARIA board. Tabitha Goldstaub, the co-founder of CognitionX and the chair of the AI Council, said:

“The most important thing is that I just kept hearing time and again from the community I spoke to, similarly to what the gentleman from DARPA said, that this is a time to serve. People really want to find a place to do research that saves people’s lives, especially in the AI eco-system.”––[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 52, Q50.]

That desire to serve should be reflected by ensuring that we have people from across our nation serving. That is why we are proposing amendment 7.

Amendment 8 would require the Secretary of State to have regard to the diversity of the board members, including the representation of those with protected characteristics. The points that we are raising here were discussed in a previous debate on the SNP amendment grouped with one of our amendments, so I will not reiterate them, but I expect it to be recognised that science has a diversity problem. We want ARIA not to exacerbate that but to send a clear message against it. We are not looking to set specific quotas for ARIA, but we want to send a clear message to the scientific community and ARIA’s chief executive and chair, whoever they may be, that diversity is essential to successful scientific research. High-risk, high-reward research should not exclude women or representatives from across our nations and regions.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Amendment 7 concerns the Secretary of State’s appointment of ARIA’s non-executive members. I have spoken to many experts, scientists and researchers about the creation of ARIA over the past six months, and one thing that has been made crystal clear to me is how important finding the right people will be to ARIA’s success. That point was reiterated to this Committee in the evidence session last Wednesday. The importance of finding the right people extends to ARIA’s non-executive members, and Professor Bond offered a valuable perspective on that. He was clear that we need a balance on the board and that it should include radical thinkers and those with different backgrounds in academia and industry. I was struck by his advice that we should have a board that was,, in his words “small” and “slightly unusual”. That is an important point.

We are looking to foster a culture that takes big bets and pursues transformational ideas. We have heard over and again how rare are the people who can do that. The difficulty in finding the mix of people to best support that activity means that we should impose as few constraints as possible and cast the net as widely as we can. That is a strong argument against placing inflexible legislative constraints on the background and experience of the limited number of people we are looking for before we have been begun that process.

We will conduct robust appointment processes that will follow the governance code for public appointments. That code includes principles of fairness, merit, diversity and integrity, which speak to the intention of the amendment.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I can confirm that we are looking for incredible people; I have made that clear.

There is another area where we are in danger of over-engineering ARIA: in governance arrangements. Although I share the belief of the hon. Member for Newcastle upon Tyne Central that a well-balanced board will be important for ARIA, I also believe that there are sufficient incentives and processes to support that without any further legislative constraint. For that reason, I encourage the hon. Lady to withdraw the amendment.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for her response. Will she say whether there are any factors that the Secretary of State should consider when making these appointments? For example, schedule 9 to the Higher Education and Research Act 2017 establishes that the Secretary of State must consider the collective experience of the UKRI board when making appointments. Are there no factors that should be considered in the case of ARIA?

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

As I said, we will have a really robust appointment process. All those things will be taken into account to get that incredibly special person that we need to lead ARIA.

Amendment 8 also concerns the appointment by the Secretary of State of ARIA’s non-executive members. As I have said, I strongly believe that we should impose as few constraints as possible and cast the net as widely as we can in finding ARIA’s members. There is a real risk that placing inflexible legislative constraints on the background and experience of that limited number of people we are looking for will hamper our ability to find the right person.

I do, however, recognise that it is important for ARIA to be fully connected to the outstanding R&D activity in Scotland, Wales and Northern Ireland. That will require ARIA to build strong partnerships with institutions and businesses in all four nations. I echo comments from elsewhere about the fundamental importance of relationship building to this activity, but it is not necessarily possible to legislate for that. In the recruitment for the CEO and chair, we will work with the devolved Administrations and stakeholders across the United Kingdom to broaden the search for potential candidates, to encourage geographic diversity from the outset of these discussions. That approach, seeking as far as possible to ensure that the pool of people considered for positions in ARIA is representative of the geographic diversity of the UK, is the right one. ARIA would ultimately not be served by extensive and specific requirements that limit the options. I therefore cannot accept the amendment.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for her response. We are hearing again that ARIA is not to be subject to regulation or oversight, regardless of what form that takes. The flexibility of which the Minister speaks can be seen by others as cronyism or the opportunity to ensure cronyism. The public are sick of mates being appointed without oversight. As I said in my intervention, other boards, such as the UKRI board, are required to consider the experience of the board before making further appointments. Would the Minister consider it acceptable if the entire board came from, say, Cornwall, which is not very representative, or had expertise only in nanotechnology? Cornwall is a very nice place and nanotechnology is an excellent scientific subject, but we heard from witnesses about the importance of having diversity of thought, background and experiences.

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy) 2:15 pm, 20th April 2021

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

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

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

Question put, That the amendment be made.

Division number 5 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 5 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 5, Noes 9.

Question accordingly negatived.

Amendment proposed: 8, in schedule 1, page 6, line 24, at end insert—

“(5) The Secretary of State must, in appointing the members of ARIA, have regard to the desirability of the members including at least one person with relevant experience in relation to each of Wales, Scotland and Northern Ireland.

(6) In this section, ‘relevant experience’ means experience of one or more of the following—

(a) the conduct of scientific research; and

(b) the development or exploitation of scientific knowledge.”—

This amendment would require the Secretary of State to have regard to the (collective) relevant experience of ARIA’s members in the devolved nations when using their power of appointment.

Question put, That the amendment be made.

Division number 6 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 6 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 9.

Question accordingly negatived.

Amendment proposed: 10, in schedule 1, page 6, line 26, at end insert

“with the consent of the Science and Technology Select Committee of the House of Commons.”—(Chi Onwurah.)

This amendment would require that the Secretary of State seeks and obtains the consent of the Science and Technology Committee of the House of Commons for the appointment of ARIA’s first Chief Executive Officer.

Question put, That the amendment be made.

Division number 7 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 6 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 9.

Question accordingly negatived.

Amendment proposed: 33, in schedule 1, page 6, line 26, at end insert—

“(1A) The Secretary of State may not appoint a person as Chief Executive Officer unless the appointment of the person has been approved by resolution of each House of Parliament.

(1B) ARIA may not exercise any functions under this or any other Act, nor may the Secretary of State make any grants to ARIA under section 4 of this Act, until its first Chief Executive Officer has been appointed.”—

This amendment requires both Houses of Parliament, under the affirmative resolution procedure, to approve the name of the proposed Chief Executive Officer. ARIA may not exercise any functions, nor may the Secretary of State make any grants to ARIA until its first Chief Executive Officer has been appointed.

Question put, That the amendment be made.

Division number 8 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 6 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 9.

Question accordingly negatived.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I beg to move amendment 11, in schedule 1, page 6, line 31, leave out sub-paragraph 4 and insert—

“(4) The Secretary of State may refuse consent under sub-paragraph (3) only where the Secretary of State considers—

(a) it necessary or expedient in the interests of national security, or

(b) the person is unable or unfit to carry out the functions of the office.”

This amendment would allow the Secretary of State to refuse consent to the appointment of an executive member of ARIA on the basis of their unfitness or inability to carry out the functions of the office.

Photo of Judith Cummins Judith Cummins Labour, Bradford South

With this it will be convenient to discuss amendment 12, in schedule 1, page 7, line 11, leave out sub-paragraph 2 and insert—

“(2) The Secretary of State may remove a person from office as an executive member if the Secretary of State considers—

(a) it necessary or expedient in the interests of national security, or

(b) the person is unable or unfit to carry out the functions of the office.”

This amendment would allow the Secretary of State to remove an executive member of ARIA on the basis of their unfitness or inability to carry out the functions of the office.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I am not daunted by the 6:9 defeat that we have just experienced. We will continue in the hope of winning over Government Members to the improvements that we wish to see in the Bill. The amendments, which stand in my name and those of my hon. Friends, are just such constructive amendments to improve the Bill and, more specifically, to actually give the Secretary of State greater powers than he, perhaps in his modesty, has set out in the Bill.

Amendment 11 would allow the Secretary of State to refuse consent to the appointment of an executive member of ARIA on the basis of their unfitness or inability to carry out the functions of the office. Amendment 12 would allow the Secretary of State to remove an executive member of ARIA on the basis of their unfitness or inability to carry out the functions of the office. The amendments are necessary because greater oversight and responsibility are needed to avoid even the suggestion of the taint of sleaze being attached to science.

This morning, in response to amendment 10, through which we intended the Science and Technology Committee to review the appointment of the chief executive, I think the Minister said that we needed a different model of trust. The public need the existing models of trust to be upheld by our Parliament, our Ministers, our Executive, and the executives of agencies such as ARIA. It should also be clear that the Government are taking responsibility for who is on ARIA’s board and has control of £800 million of public money and, more important, control of our scientific—and therefore economic—future.

The Bill places huge responsibility and power in the hands of ARIA’s CEO with little ongoing accountability. The Secretary of State is responsible for appointing the chair, other non-executive members of the board, and the first CEO. All subsequent CEOs and all other executive board members will be appointed by the chair after consultation with the other non-executive members, as set out in paragraph 3(2) of schedule 1. Such appointments cannot be made without the consent of the Secretary of State, but as the Bill stands, the Secretary of State can refuse consent only on national security grounds. Why are national security grounds the only grounds on which somebody might not be fit or suitable to serve on the board of ARIA?

Photo of Dawn Butler Dawn Butler Labour, Brent Central

Should other grounds, such as wanting to pursue eugenics in great depth, not be considered reasons not to appoint somebody to a board?

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

My hon. Friend raises an important point. As we heard in earlier discussions, there are concerns about the areas of science, such as eugenics, that might be championed or accepted by potential board members. I would hope that belief in eugenics was sufficient to consider someone unfit for the board, but, as it stands, the Secretary of State would currently have no power to refuse consent for an appointment on that basis. I find it interesting to consider the workings of the Secretary of State’s mind here. National security is clearly a critical issue, and it is the first duty of any Government to protect their citizens, but are there no other reasons why somebody might not be suitable?

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs) 2:30 pm, 20th April 2021

This is an opportunity; we can help spare the Government future embarrassment. Quite frankly, if we have this set of out-there people running the organisation and they then choose to appoint someone highly controversial, it could be extremely embarrassing. I remember occasions when Labour Secretaries of State had difficulties with scientific advisers. These are controversial areas, and I can foresee an extremely difficult situation. Without an ability to intervene, where does it lead?

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy)

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

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

The hon. Lady makes a very good point on the comparison with a “fit and proper person” test for taxi drivers. That underlines the point I was going on to make. In the Bill, there is no statutory requirement for members of ARIA to possess scientific expertise or experience, whether individually or collectively. There is no floor—there is no minimum requirement—for their expertise. We have heard a lot about how wonderful and amazing and visionary they must be, but we have not heard about any floor for that expertise and, as I said earlier, there are no “have regard to” factors that the Secretary of State must consider when making appointments. Schedule 9 to the Higher Education and Research Act 2017, for example, establishes that the Secretary of State must consider the collective relevant experience of the UKRI board when making appointments. In this Bill, there is no floor. That is a huge concern for the Committee.

In the evidence session, Professor Philip Bond said:

“What you are doing in creating this kind of model is handing trust to people. You want people with high integrity who are brilliant, and then you let them get on with it, and you trust that they will do something that reflects their character.”––[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 25, Q20.]

With the examples that we have seen of Tory cronyism, do the Committee really think that we can just rely on trust when it comes to public interest and the public purse?

Photo of Duncan Baker Duncan Baker Conservative, North Norfolk

One of the fundamental roles of a director is to exercise reasonable care, skill and diligence. As that is part of the fundamental concept of a board, I would suggest it is the collective responsibility of the chief executive and the entire board, not the responsibility of the Secretary of State.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

The hon. Member makes an interesting point, and it would be excellent if we understood better how the board would collectively exercise responsibility. When we talk about a board exercising collective responsibility, that is absolutely true. That is right, and it is what happens in the private sector. I would be interested to know whether the reporting requirements on private sector boards will apply in this case, but this is public money. It is £800 million of public money—taxpayers’ money. Particularly as we come out of a pandemic and recession, there are many worthy recipients of that money. Is the hon. Member truly saying that it should be spent and directed by people who have no accountability and cannot be removed? The Secretary of State is responsible for their getting the money, but will have no ability to remove them, no matter how unfit they prove themselves to be. On the basis that the amendments offer the Secretary of State further powers to ensure the fitness of the board, I hope that the Minister will accept them.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Amendment 11 would extend the right of the Secretary of State to refuse an executive member appointment to include refusal of consent where a person is

“unable or unfit to carry out the functions of the office.”

It is important that the Secretary of State’s refusal rights are limited to where it is necessary and expedient on national security grounds. The freedom for the chair to hire the executive leadership team is a key feature of ARIA’s independence from Government. The Secretary of State will hire a top-quality non-executive team who have the experience and expertise to oversee ARIA. We should trust their judgment to hire an exemplary set of executive members. I remind the hon. Member for Newcastle upon Tyne Central that the Secretary of State will appoint the inaugural chief executive officer and will set the tone for the quality of the future executive member hired by the chair, and I hope she will withdraw her amendment on that basis.

I will now move to amendment 12, building on my comments with respect to amendment 11. Once appointed, the terms of employment for executive members’ contracts are determined by the chair, with the consent of the Secretary of State, and only after consulting other non-executive members. They are expected to include standard provisions that would allow the chair to remove an executive member from office if that person is deemed unfit or unable to carry out the functions of the office.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for her earlier comments. Can she clarify what she means when she says, “They are expected to include standard provisions”? Is she saying that they will include the explicit provision for the CEO and the chair to remove members, and under what criteria or circumstances?

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy)

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

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

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

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

Amendment, by leave, withdrawn.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I beg to move amendment 13, in schedule 1, page 9, line 11, leave out paragraph 11 and insert—

“11 The Secretary of State must by regulations make provision establishing the procedures to be adopted for dealing with conflicts of interest of members of ARIA, members of a committee or sub-committee or ARIA’s employees

The amendment seeks constructively to improve the Bill by providing greater transparency and oversight, and thus avoid potential scandals of sleaze that are currently overwhelming various aspects of this Government. The amendment would require that the Secretary of State make regulations to establish the procedures to deal with conflicts of interest involving ARIA’s members and staff. We recognise that ARIA should have close links with the private sector. ARIA will not be able to achieve its transformational goal without working closely with the private sector.

As was stated in the evidence sessions, part of the UK’s particular challenge is the commercialisation of existing fantastic ideas, so working closely with the private section is important. However, the Committee must be aware that we have seen time and again, particularly now, that the revolving door between the private and public sectors can be open to abuse, especially—I say reluctantly—under this Government. Only last weekend, writing in The Observer—other newspapers are available; I mentioned The Daily Telegraph earlier, so I am trying to be fair—the senior Conservative MP and Chair of the Liaison Committee, the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) said:

“The line between public service and private gain is shamefully blurred”.

He went on to say:

“In the meantime, the government can establish not so much new rules but new processes and education, which encourage more of the proper conversations about values, integrity, ethics and how to behave when there might be potential, or even just perceived, conflicts of interest.”

He went on to recommend training in conflicts of interest. Again, we are constructively giving the Government —obviously the Bill was drafted before some of the scandals that they are embroiled in came to light—the opportunity to follow his advice.

It is a standard approach internationally. The Defence Advanced Research Projects Agency, which is the inspiration for ARIA, has clear conflict of interest rules. In the evidence sessions, we heard from a number of witnesses whose evidence supports the amendment. Dr Peter Highnam, deputy director of DARPA in the US, made an excellent contribution. When discussing the ways in which ARIA might be able to invest in ideas, programmes, companies and so on, he said:

“Of those that you listed, the only one that we do not do is take investment positions in companies. That is not what we do. You can make a proposal to us for research. You may offer a cost-share, depending on whether it is a major company and very systems-oriented work, all the way to a standard research grant to a university or small business, or a combination of those things.”––[Official Report, Advanced Research and Invention Public Bill Committee, 14 April 2021; c. 47, Q41.]

He also said:

“I can speak only to how DARPA operates. We have very rigorous review processes—technical, financial and others. We have conflict of interest rules and so on that we all follow. There are robust processes and independent looks at those processes. Again, we could not operate any other way.”––[Official Report, Advanced Research and Invention Public Bill Committee, 14 April 2021; c. 38, Q29.]

I highlight the fact that DARPA does not allow for the taking of equity interests in companies, yet still has much more rigorous conflict of interest rules—we have none—and a process of accountability that the Bill neglects. When I pressed Dr Highnam on whether programme directors, when they go back to the private sector, are allowed, for example, to direct finance at the companies to which they return, his response was quite clear and critical: “No.” We do not see any of those checks and balances in the Bill.

Photo of Aaron Bell Aaron Bell Conservative, Newcastle-under-Lyme

I thank the hon. Lady for the other Newcastle for giving way. She draws a comparison with DARPA, but is the more obvious comparison not with UKRI? Like ARIA, UKRI is bound by the code of conduct for board members of public bodies, which includes. for example. the obligation to declare publicly any private financial or non-financial interests that may, or may be perceived to, conflict with one’s public duty. That speaks to the point that my hon. Friend the Member for North Norfolk made: we would not expect the kind of people we will appoint to the board to act in the ways that she seems to think they will.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the hon. Member for the second Newcastle for that contribution. I will make a couple of points in response. Let me gently say that Government members of the Committee are trying somewhat to have it both ways, in saying that ARIA will be like UKRI while not putting in place any of the measures, systems or processes of accountability to require it to be like UKRI, building on the fact that ARIA is, as I understand it, meant to fill a gap in our research landscape.

On whether ARIA will follow all the rules that UKRI follows, I am pretty sure that the answer to that is no, because as I understand it, it is not going to follow freedom of information or procurement rules. We have seen over the past few months with the scandal over Greensill—this is what the comments from the Chair of the Liaison Committee were about—that the existing rules and regulations are not sufficient. Finally, for the hon. Member for Newcastle-under-Lyme to say that we can expect these people to behave better because they are going to be better than that—really? Many scandals have been founded on expectations like that and again, we do not want the touch or hint of scandal near our fantastic science base.

Photo of Jerome Mayhew Jerome Mayhew Conservative, Broadland

Can I have some clarity from the hon. Lady? The point made by my hon. Friend the Member for Newcastle-under-Lyme—the other Newcastle—was that there is already a written requirement for members of these kinds of bodies to make full disclosure. If they are going to ignore that, why does the hon. Lady think that they would not ignore a regulation from the Secretary of State saying exactly the same thing?

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the hon. Member for his contribution, which I think was made in a constructive sense.

I think the Chair of the Liaison Committee is making a point about that guidance. Clearly, it was not sufficient for David Cameron and it is clearly not proving to be sufficient in other cases. I hope that, as this amendment sets out, it is not simply about declaring. This is a critical part and I am grateful to the hon. Gentleman for allowing me to emphasise it. The amendment does not say they should declare conflicts of interest; it states that the Secretary of States makes regulations—detailed, I would say—establishing the procedures to deal with conflicts of interest. That is the key thing. This stems from the need to have a close working relationship with the private sector, which will give rise to conflicts of interest that may be quite complex, especially with new and evolving technologies, which may go on to complex and potentially international supply chains. Those conflicts of interest may be complex, involving equity stakes and so on. We need procedures to deal with them that are more detailed than the current general ones and which are specifically targeted at ARIA’s unique role.

Dr Regina Dugan, the chief executive officer of Wellcome Leap, effectively supported that proposal:

“The particular way that we work is through contracts; we do not actually do grants. I also think that this position of not taking equity is important, because the non-profit element of it is part of the differentiation, and we have an entire commercial sector that is good at assessing value and figuring out return on investment.”—[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 48, Q43.]

What is different with ARIA is that it is, potentially, going to be taking equity, which can raise more complex conflicts of interest.

Professor Pierre Azoulay of the Massachusetts Institute of Technology said that

“the programme managers at DARPA and also at ARPA-E—the Advanced Research Projects Agency-Energy—have a fixed expiration date, which means they will need to go back to academia or to the venture capital firm or large firm that they left, and generally they want to do so with their head held high and their reputation intact. I think that that has created over time a norm of correct behaviour, if you will, and the absence of cronyism.”—[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 38, Q30.]

We want to see that norm of correct behaviour established through supporting processes and procedures. I asked Dr Highnam,

“What should we be looking for in the directors and programme managers as the key positive part of the culture that ARIA should seek to build?”

He answered:

“Honour in public service is top of the list.”––[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 39, Q32.]

I should say that I have not heard any Government witness or Minister emphasise the importance of honour as a key characteristic of board members. I think it is really important that procedures to deal with conflicts of interest are established. That view is shared by the Chair of the Liaison Committee, who has said

“After the dust settles over the Greensill affair, I suspect that we will find that the lack of judgment over David Cameron’s approaches to ministers is less important than the general failure to address what has become a casual approach to conflicts of interests amongst many in government and in politics…All can see now the general inability of the various codes and systems”— to the points made—

“of oversight, such as the toothless advisory committee on business appointments, to provide sufficient transparency and accountability, which is why even its chair, Lord Pickles, wants reform.”

When the Chair of Liaison Committee, who is much respected on the Government Benches, says that, and when we are mired in scandals as a consequence of a lack of appropriate conduct and clear processes and procedures, I urge the Minister to accept the need at the very least for greater detail when it comes to avoidance of conflicts of interest. I urge her to accept the amendment to establish processes and procedures to avoid conflicts of interest in this new body, which is critical to our future economic and scientific prosperity.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

It is a pleasure to be part of a Committee that you are chairing, Mrs Cummins. I fully endorse what my hon. Friend has said about the amendment. In fact, she has pretty much said it all, but there are one or two points that I want to add.

We are considering a profound set of issues. The evidence sessions showed some fundamental differences in culture between our country and the Americans, and it is their example on which we are largely modelling our initiative. To some extent it goes to the problem that we are facing as a country at the moment. For a long time, we rather considered ourselves not to be prey to such conflicts; we had a British way of doing it. Procedures were not necessarily written down, but there were understandings and people behaved properly. The sad truth is that over the past 20 to 30 years, somewhere that changed. That is the truth, and that is why we are in the current situation.

In the evidence session with the Americans, I was very struck at one point when we were pressing them on how they avoided conflicts of interest. Their response was a kind of American swelling of patriotic pride, as they said that they would not do that because it would somehow harm the American dream. [Interruption.] Exactly. People in Britain are different; it is not that we are not proud of our country or patriotic, but I would say that our patriotism is different from theirs.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

My hon. Friend makes an important point. Perhaps the fact that DARPA is part of the US defence establishment, with all the military honour and commitment to the defence of the nation, is one of the reasons why honour was held so high by the Americans. Does he agree that the absence of any mission and any departmental ownership of ARIA means that will not be the case in the UK?

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

My hon. Friend has touched on a very important point. It was something that I tried to draw out in some of the evidence sessions. I would point Members to an excellent book written a few years ago by Lord Sainsbury, an esteemed former science Minister. He talked about the differences in culture between Europe, America and the UK, and warned against just trying to transpose one system to another, unless one really understood the cultural context. We have not mentioned it so far today, as it has very much been about natural sciences and perhaps, mea culpa, engineering at the beginning, but the social sciences may be biggest challenge of all. That was touched on at one point in the evidence sessions when one of the witnesses said it is not just a matter of the technologies, but public acceptance and understanding of them. It will require some really innovative work from social scientists to understand how that will work.

Taking the system that works in America as an example, it was originally rooted in the defence establishment—exactly as my hon. Friend says—which gave it very strong principles and values. Again, there was a moment in the evidence session when we could feel people smiling, because in the current context the idea that honour and public duty will protect us against the dangers of conflicts of interest seems slightly fanciful, frankly. Government Members are understandably rallying to their side’s cause in the Bill as drafted, but in the current public context, surely we should want to include more safeguards, to make it clearer to everyone what is expected and to give more opportunities to protect ourselves against future problems.

As the shadow Minister and others have said, we know that this is a very delicate and complicated set of relationships between people working in the public sector and in private companies. I represent Cambridge, where we have deliberately sought to put public bodies such as the Laboratory of Molecular Biology adjacent to AstraZeneca, because we know that there is a constant interchange of ideas. That is how innovation works: people meeting each other. We then have to be really careful, however, otherwise we will end up with the charge—rightly made in some cases—that huge amounts of public money go into developing research, and then, lo and behold, the public pay again when they have to buy those products back from the private sector, which has used that public sector-based research to make the product.

I fully and absolutely understand why money is needed to go into research, but there is a real risk that in future we will lose public support, which is why it is so important that we get these things right. I would just caution that, in a few years’ time, the Government—not necessarily this Government; hopefully, my Government—might find themselves wanting to deal with dodgy advisers, and I want us to ensure that we have the mechanisms to deal with that. This Government are leaving themselves open to some real risks, because they are putting themselves in a position where they do not have the tools to hold to account people who sometimes may not quite be what they first seemed.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 3:00 pm, 20th April 2021

On amendment 13, the framework document to be agreed between the Department for Business, Energy and Industrial Strategy and ARIA, which will complement the Bill, will commit ARIA to the code of conduct for board members of public bodies, which sets out the personal and professional standards expected from board members, and forms part of individual members’ terms and conditions of appointment.

The code of conduct includes, for example, the obligation to declare publicly any private financial or non-financial interests that may, or may be perceived to, conflict with one’s public duty. I believe that that principle-led, non-legislative approach is appropriate. Indeed, it is the standard approach taken by many other arm’s length Government bodies, including UKRI. That approach allows ARIA to manage conflict of interest risks in a flexible way that is best suited to its operations.

I agree wholeheartedly with what Dr Peter Highnam said last week about what we should be looking for in the CEO to build the right ARIA culture:

“Honour in public service is top of the list.”––[Official Report, Advanced Research and Invention Agency Public Bill Committee, 14 April 2021; c. 39, Q32.]

We will instil that sentiment in ARIA from the outset, starting with the recruitment of the chair and the CEO. We also have an additional assurance, in that the Bill includes a reserved power to introduce additional procedure, in law, should that be necessary once ARIA is operational. I believe that the hon. Member for Newcastle upon Tyne Central should take great comfort in the reserved power set out in paragraph 11, and I ask her to withdraw the amendment.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for her response. I take most comfort from her unequivocal statement that honour in public service is a key characteristic that will be looked for in the chief executive officer of ARIA, because I had not heard such a strong statement about the need for honour, or even for public service, in ARIA’s mission. I take more comfort from that than from the confirmation that ARIA board members will be subject to existing rules about conflicts of interest. As we have heard, those rules are not sufficient. For example, in one of the recent scandals it was found that the Secretary of State for Health and Social Care owned shares in a company that had received a significant contract from his Department, and there were questions about whether the requirements for declarations of public interest had been met.

We in the Opposition have said a number of times that ARIA is an organisation that will necessarily give rise to important conflicts of interest, so it needs more detailed procedures and processes. I do not want to detain the Committee, however, and I hope that the Minister will look at the issue in the future. I will not push the matter to a vote, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I beg to move amendment 14, in schedule 1, page 10, line 5, at end insert—

“(3) The report shall contain information regarding—

(a) the proportion of ARIA’s funding in the relevant financial year which has financed activities taking place (in whole or in part) outside the United Kingdom, and

(b) the national and regional distribution of activities in the United Kingdom supported by ARIA’s funding in the relevant financial year.”

This amendment would require ARIA’s annual report to contain details of the geographical distribution of activities funded by ARIA.

Photo of Judith Cummins Judith Cummins Labour, Bradford South

With this it will be convenient to discuss the following:

Amendment 30, in schedule 1, page 10, line 5, at end insert—

“(3) This report must include statistics regarding the percentage of its funding disbursed in each region of the UK.”

This amendment is intended to provide greater transparency about the destination of ARIA’s funding disbursements within the UK.

Amendment 16, in clause 2, page 2, line 10, leave out “in” and insert “across”.

This amendment would require ARIA to have regard for the benefits of its activities across the nations and regions of the UK in exercising its functions.

Amendment 17, in clause 2, page 2, line 12, leave out “in” and insert “across”.

See the explanatory statement for Amendment 16.

Amendment 18, in clause 2, page 2, line 14, leave out the first “in” and insert “across”.

See the explanatory statement for Amendment 16.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

These amendments are all concerned with ensuring that the benefits of ARIA are spread across our country and contribute to a more equal and prosperous country. Amendment 14 would insert a new sub-paragraph requiring ARIA’s annual report, for which there is provision elsewhere, to contain details of the geographical distribution of activities funded by ARIA, while amendments 16, 17 and 18, which relate to clause 2, would require ARIA to have regard for the benefits of its activities across the nations and regions of the UK in exercising its functions.

We tabled these amendments in a constructive spirit, to improve the Bill in line with the Government’s own aims, as we understand them. During and since the general election, there has been significant discussion about the importance of ensuring that our whole country benefits from economic prosperity and from the transformational impact of ARIA.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

I accept what the hon. Lady says about geographical spread and making sure that we are treating the country fairly and levelling up, but we have to accept that while £800 million over a four-year period is a lot, £200 million a year is not a huge amount. We know that we are focusing ARIA on a small number of projects. The danger is that we dilute the impact that ARIA could have using that money by trying to demonstrate that we are spreading it equally across the country. The danger with that is that we do not achieve what we set out to achieve in the first place.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

There are two challenges here. ARIA’s funding is between 1% and 2% of the UK’s science spend, depending on whether the aims of the current Government are actually met, so in some respects it is considered too small to be subject to reporting requirements. Yet we also hear of how it is expected—indeed, required—to have a transformational impact on all our lives. If that impact is going to be transformational, surely it is critical that it should be as equitable as possible.

We have tried very hard to reflect those slightly conflicting aims. Amendment 14 is a reporting requirement; amendments 16, 17 and 18 are to “have regard to”. We have not set targets. We have not said that it has to be a certain proportion, but particularly with regard to amendment 14 there can surely be no objection to reporting how the funding has been spent. That is a basic requirement of transparency.

The hon. Member is right to infer that people may draw conclusions from that reporting, but I tend to feel that information is empowering, regardless of what the conclusions are, so the amendment takes a reasonable line between requiring that the spend be in some respects regionally distributed, which it does not do, and ensuring that the information is there to assess the extent to which ARIA is living up to its overriding goal—again, we do not have a mission, so let us say goal—of transforming our society.

The Opposition believe that that goal is possible. We believe that science and research, as I have said, can be the engines of progress for our society, but it needs to be for and by everyone, not simply for the few. It is essential, as I have said, that each region of the UK benefits from the creation of ARIA. The Secretary of State told the Science and Technology Committee that the Government wanted ARIA

“to reflect the wide talent and geographical spread of the United Kingdom”, but there is nothing in the Bill to measure the extent to which it does that. As we have seen, the Bill fails to mention the devolved nations and does not outline any reflection of the geographical realities of the United Kingdom.

Amendment 14 is simply about requiring reporting so that the Government—whichever Government we have—can measure the impact that ARIA is having on the very important desire to reduce the regional inequalities in our country. It does not tie the hands of ARIA’s leadership; it just imposes reporting requirements. That is really important when we reflect that the Campaign for Science and Engineering found that for every £1 invested by the Government on research and development we receive 20p to 30p back each and every year. Surely we have a right to know where that money is going geographically, as well as which areas it is going to.

As a northern MP, I know that the north receives less than half of the life sciences investment per head that the south of England does, despite having great teaching hospitals and significant health inequalities that truly need to be transformed. We heard an important contribution from Tabitha Goldstaub of CognitionX, who said that

“ARIA has to be independent, but it also needs to ensure that it works really closely with central Government and with regional and local government. Local government spends about £1 billion on procurement, and cities are key investors in infrastructure, so finding a good link with local government, as well as with central Government, is important…Regional strengths deliver benefits to actual localities.”––[Official Report, Advanced Research and Invention Public Bill Committee, 14 April 2021; c. 56, Q54.]

We also heard from John Kingman, the chair of UKRI, that its structures involve regular consultation with the devolved Administrations. It is important that we see how well ARIA is able to benefit also from that engagement, whether indirectly through the UKRI or through its competitions and other means of funding.

I will comment briefly on amendments 16, 17 and 18, which would require ARIA to have regard for the benefits of activities across the nations and regions. ARIA presents an opportunity to drive innovation across the country, and this is about ensuring that it does not deploy a business-as-usual approach, which would risk undermining the shared benefit that it should provide. Research and development is a vital driver of growth, both nationally and at regional level. In its current form the Bill requires ARIA to promote scientific innovation and invention “in” the United Kingdom. The amendments suggest simply changing that word to “across”, so that the benefits accrue to all constituencies, towns and villages. As I have said previously, the Government have made many promises over the past 18 months to level up all of the UK’s regions. We would like to see those promises translated into institutional reality, and that is what these three amendments seek to achieve.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs) 3:15 pm, 20th April 2021

I feel passionately about this issue because I represent a part of the country that often comes in for criticism, in the sense that some people, even some of my colleagues, say to me, “You’ve already got everything—you shouldn’t be getting any more.” This is a complex argument. If some areas have a long tradition of doing well and competing internationally, we can hardly deny them the resources to carry on with their work. However, we are painfully aware that there is a danger of overheating in some parts of the country.

I chair the all-party parliamentary group for the UK’s innovation corridor, which is, essentially, London-Stanstead-Cambridge, and there is much discussion at the moment about the Cambridge-Milton Keynes-Oxford arc—the so-called golden triangle. The discussion seems to have been going on for years and years—certainly for as long as I have been in this place, and long before that. There is this hope that through the clustering effects we can do much better than we already do, and we look to examples in other parts of the world to see how it is done.

The reason I support this amendment is that this is not simple or easy. There have been many attempts to spread the Cambridge cluster effect. In fact, ironically, it often seems to cluster more and more in particular bits of Cambridge. It is very hard to get people to go to other places, but that is what we want to try to encourage. One of the ways in which we will do that is by having the data and the information. This is a great opportunity for ARIA to be mindful of that in its report. It is not a difficult thing to do. It should tell people what is going on and where it is putting its resources. If it is not working in the first few years, that would give us the opportunity to intervene and make a change.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

Once again, my hon. Friend has reminded me in his excellent contribution of an important point that I should have made, which was that the regional development agencies, abolished by the Conservative coalition in 2010, did report on regional innovation and science spend. Whenever I speak to the North East England chamber of commerce, I am told that one of the difficulties in making the knowledge exchange framework accessible or understandable is the lack of data on regional science spend. Part of the point of this amendment is to help restore some of that data.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

That is absolutely right. One of the many tragedies of the last 10 or 15 years has been the fact that strong attempts by the last Labour Government to have a positive regional policy were swept away. Vince Cable, I think, described the destruction of the regional structures in 2010 as positively Maoist. Astonishingly, Lord Heseltine later came to Cambridge to bang the drum for regionalism outside the very offices that had been shut by his own Government a few months earlier.

We do not have a good record on regional policy in this country. We need to do better in future, for everybody’s benefit. Frankly, my city can do without the overheated house prices and the problems that come with everything being clustered in one place. It would be good for us, but also for everybody else, to get more balanced economic growth across the country.

We could do one small thing today—and I really do not see how it would be difficult for the Government to concede. I do not know how many Bill Committees I have been on—I have never yet had any success, although I live in hope. I make this plea, however, because I really do not see how the concession could be that painful.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I rise, obviously, to speak in favour of SNP amendment 30, which almost ties in with what is proposed by the shadow Minister. It is about providing greater transparency on the destination of ARIA’s funding disbursements within the UK.

I just want to pick up on a couple of things that have been said already. The shadow Minister reflected on the fact that the Bill makes no mention of the devolved nations. She almost seemed surprised, but that took me a bit aback because I am not surprised at that in any way, shape or form. I do not think anyone even on the Government Benches is over-surprised that they forgot to mention Scotland, Wales and Northern Ireland.

The hon. Member for South Basildon and East Thurrock mentioned his concerns about drawing conclusions. Yeah, I will be drawing conclusions about where that money goes and I am sure that every single person in Scotland will.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

If we were discussing how the Government aim to spend our £22 billion a year on science and research, there would be a much better argument for the amendment. But we are talking about high-risk, high-reward science, where a focus on a particular technology has the transformational effect that we are after. That might be the University of Strathclyde and its quantum technology research—I have no objection to that being the area of funding. But if the area happens to be Cornwall, Cambridge, London or somewhere else, I do not think we should hamper ourselves on this particular aspect of a new agency by trying to set targets. We know that if we set a target, someone tries to meet it.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

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

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

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

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy)

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

Photo of Stephen Flynn Stephen Flynn Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

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

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I shall turn first to amendments 14 and 30. The objective behind them is really important; we have spoken extensively about the need for ARIA’s funding to reach beyond the usual suspects. In my view, that applies to where that funding goes as much as to the formality of the research setting. That also reflects the wider Government priority. The R&D places strategy, due to be published this summer, represents a key part of our ambitions for R&D and innovation. It builds on the approach set out in the R&D roadmap.

The purpose of the places strategy is to ensure that R&D benefits the economy and society in the nations, regions and local areas across the United Kingdom, contributing to the Government’s wider levelling-up ambitions. I would like to make one key point about ARIA: as discussed previously, many of the details of ARIA’s operation will be set out more fully in a future framework document. I suggest that that document is the appropriate place for stipulations on the content of ARIA’s annual report.

It is extremely likely that ARIA will be required to provide in that report the type of geographical information sought in the amendments, but it would be beneficial to consider that in the round, alongside the other information that we might require ARIA to include in the report. The most appropriate and helpful information for ARIA, or Government bodies generally, to provide may also change in the future. To include specifics on the face of the Bill is impractical in that respect, as that would be inflexible.

On amendments 16, 17 and 18, ARIA will seek transformative scientific and technological breakthroughs, the outputs of which will have benefits across the United Kingdom. For example, a leap forward to driverless technology could create economic benefit to improve the quality of life across the UK. The attraction of the ARPA model is that its funding is laser-focused on achieving transformative outcomes. While £800 million up to 2024-25 is a meaningful amount of funding, it is a small proportion of the R&D spend. For those reasons, I urge the hon. Member for Newcastle upon Tyne Central to withdraw her amendment.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I thank the Minister for her response. I am pleased to hear that she believes that the information requested in amendment 14 is likely to be included in the reporting requirements of ARIA. On that basis, I am—well, “happy” is not the right word, but I will withdraw amendment 14. I do so also on the basis that she understands its importance.

I feel, however, that in her response to amendments 16, 17 and 18, the Minister has had it both ways: she is saying that the benefits will be felt across the nation but that a requirement to have regard for the benefits across the nations and regions of the UK is too much. Its borders may move, but the geographical reality of our United Kingdom as a country of nations and regions will, I hope, remain, and so a requirement to have regard to the benefit across the nations and regions seems eminently sensible—indeed, it is a minimal requirement. I would like to press amendment 16 to a vote later, but I beg to ask leave to withdraw amendment 14.

Amendment, by leave, withdrawn.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy) 3:30 pm, 20th April 2021

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

“(3) The report must include—

(a) statistics on the gender balance of—

(i) executive board members

(ii) non-executive board members

(iii) senior staff; and

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

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

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

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

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

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

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

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

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

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

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

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy)

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

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

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

Question put, That the amendment be made.

Division number 9 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 6 MPs

No: 8 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.

Amendment proposed: 30, in schedule 1, page 10, line 5, at end insert—

“(3) This report must include statistics regarding the percentage of its funding disbursed in each region of the UK.”—

This amendment is intended to provide greater transparency about the destination of ARIA’s funding disbursements within the UK.

Question put, That the amendment be made.

Division number 10 Advanced Research and Invention Agency Bill — Schedule 1 - The Advanced Research and Invention Agency

Aye: 6 MPs

No: 8 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.

Question proposed, That the schedule be the First schedule to the Bill.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I welcome the detailed discussion that schedule 1 has attracted. It is to be expected since the schedule sets out ARIA’s governance arrangements, including the make-up of the board and how members and staff are appointed and removed. There are elements of schedule 1 that are standard to most statutory corporations and that mirror the measures on UKRI in the Higher Education and Research Act 2017. Those include the paragraphs about ARIA determining its own procedures, the delegation of functions by ARIA, and the preparation and laying before Parliament of audited accounts and annual reports.

I reiterate that ARIA will be subject to parliamentary scrutiny in the same way as other statutory corporations, both by Select Committees, including the Science and Technology Committee—I am sure that my hon. Friend the Member for Newcastle-under-Lyme and the hon. Member for Brent Central will contribute to that fully—and by the National Audit Office, which is expected to report in detail on ARIA for discussion at the Public Accounts Committee. With reference to this morning’s discussion, it is therefore clearly the case that ARIA will be held to account.

As with the rest of the Bill, in schedule 1 I have been very mindful of the need to strike a balance between providing ARIA with the independence to operate freely and ensuring sufficient Government and parliamentary oversight to protect the use of public funds. I also emphasise that the creation of ARIA has been welcomed by the UK research and innovation community, and I again point to the integrity of that community.

I will explain the rationale behind the key paragraphs that are specific to ARIA and that have not yet been discussed in relation to the amendments proposed to schedule 1, starting with those on membership. Paragraph 2 sets out ARIA’s membership. Its executive members must include the chief executive officer and chief financial officer, and between two and five other members. As we heard from Professor Philip Bond last week, that number reflects the need for ARIA to be a nimble agency, with agile decision-making structures.

ARIA’s non-executive members must include the chair, the Government chief scientific adviser and other members appointed by the Secretary of State. The Government chief scientific adviser will provide technical expertise and a helpful and effective link between ARIA’s activities and those of Government, while limiting any direct interference from Ministers. Non-executive members must comprise the majority of ARIA’s board, which is a matter of good governance.

Paragraph 3 sets out that the first chief executive officer will be appointed by the Secretary of State, ensuring that the initial leadership sets the right foundation for ARIA. Thereafter, executive appointments will be made by the chair, such that ARIA can maintain its independence from Government.

Paragraph 4 sets out that the chief executive officer must be appointed for a fixed term for a maximum of five years, and that a person cannot be appointed as CEO more than twice. That approach will ensure strong leadership, energy and renewal at CEO level, and we have seen that successful approach produce results for DARPA.

As is standard for statutory corporations, paragraph 14 states that ARIA must prepare annual accounts that must be sent to the Secretary of State and the Comptroller and Auditor General. The CAG must examine, certify and report on statements of accounts and send a copy of the report and certified statement to the Secretary of State, who in turn must lay copies before Parliament. As the Committee will be aware, the NAO is also able to conduct value-for-money examinations of ARIA, as per the National Audit Act 1983. The laying of annual accounts and reports before Parliament, combined with the NAO examination represent an opportunity to scrutinise ARIA’s activity and its use of public funds, as is standard for public bodies.

I would like to take this opportunity to address a point raised by the Secretary of State on Second Reading which left some ambiguity. He said that there was a commitment in the Bill to audit ARIA’s procurement activities. Any procurement spending will of course be included in ARIA’s accounts and be subject to audit in the normal way, according to paragraph 14, but we have made a further non-legislative commitment to explore how ARIA’s procurement activities specifically might be audited and reported on as a counterbalance to the exemption that the Bill gives ARIA from obligations on a “contracting authority” under the public contracts regulations. That is not within the Bill, as the Secretary of State’s comment could be taken to imply, but will none the less be an additional commitment to transparency and good governance for ARIA.

Schedule 1 contains provisions where necessary for ARIA to be able to operate as a statutory corporation and it is therefore essential that it remains part of the Bill.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport) 3:45 pm, 20th April 2021

I thank the Minister for her comments on schedule 1. While I necessarily disagree with her assessment that the schedule contains all the checks and balances, accountability and oversight that are required, I will not oppose it.

The National Audit Office audit to which the Minister referred is a very limited safeguard against some aspects of conflict of interest and the misuse of public money, and the wider concerns that we have. It is limited to providing a true and fair opinion about whether the public body’s financial statement is free from material misstatement, whether caused by fraud or error, and therefore does not address our concerns about accountability. The National Audit Office conducts 400 such audits annually and it would not necessarily prevent the mismanagement of public funds in ARIA or other bodies. I hope that the Minister will reflect on the importance of improving accountability as the Bill proceeds.

Question put and agreed to.

Schedule 1 accordingly agreed to.