Research and Development Funding — [Peter Dowd in the Chair]

– in Westminster Hall at 11:29 am on 17th March 2021.

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[Peter Dowd in the Chair]

Photo of Peter Dowd Peter Dowd Labour, Bootle 2:30 pm, 17th March 2021

I remind hon. Members that there have been some changes to normal practice, in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be a suspension between each debate. I remind Members participating physically and virtually that they must arrive for the start of the debate and they are expected to remain for the entire debate. I must also remind Members participating virtually that they are visible at all times, both to each other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and before they leave the room. There are no Members in the Public Gallery.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs) 2:31 pm, 17th March 2021

I beg to move,

That this House
has considered the future of research and development funding.

It is a pleasure to speak with you in the Chair, Mr Dowd, and to have the opportunity to discuss this vital question, which is extremely timely. Has there ever been a time when the public were so interested and indebted to the work of our researchers? Quite simply life-saving and life-changing, with huge social and economic consequences, the vaccine development is not the subject for today. The research and development, the research institutions and universities that support them are a cause for global celebration and thanks.

That opening sentence makes it clear that this a huge and complicated area. I suspect that in 90 minutes we will not be able to do full justice to it, not least the complicated and important relationship between public and private funding, which I suspect others will touch on. I will concentrate on some of the key, immediate questions facing particularly public funding and its future. The debate is also timely for different and, frankly, much more political reasons.

I will concentrate on public funding issues relating to Horizon, the impact of official development assistance cuts, and the curious case of the new kid on the block, the Advanced Research and Invention Agency, which I know was discussed earlier today at the Select Committee on Science and Technology, chaired by Greg Clark. I am sure he will have more to say about that later.

Although for obvious reasons the debate is about money, money is only part of the challenge. The vital resource is people. Throughout the difficult debates of the past few years, I have spoken to many people in the research and development and science sectors, and that is a point they come back to every time: it is about people, relationships between people and scientific collaborations. Science is global and research is global. Those relationships matter.

I am delighted to see my neighbour, Anthony Browne, who shares some of Cambridge with me. My constituency is in an area that is about research and development to its core. It boasts countless institutions working on a dazzling range of areas. To cover it geographically, from north to south and east to west, we see a huge array of start-ups at the innovation centre to the north, very close to the science park, which hosts UK success stories such as Owlstone, now the Bradfield Centre.

Nearby Darktrace, the world-class laboratory of molecular biology, whose iconic building is a gateway to the south of the city, has been conducting research for decades to understand biology at a molecular level, and whose work has produced no fewer than 12 Nobel prizes. That is now located, by no accident, very close to the new AstraZeneca building, to allow collaboration to thrive, as it does right across that area of the biomedical campus.

Green aerospace design work will be found at the Whipple to the east, a project that is well known to the Minister and is very topical. That is not far from the British Antarctic Survey, while the huge international success story that is Arm is to the west. Marshall Aerospace is also in the private sector, providing world-leading aerospace development as well as materials development.

Go further to see the Cleantech works being done at Allia, and go past the railway station to see the Sainsbury Laboratory of plant science. Step forward to find Anglia Ruskin University, with its hugely important research into climate and environmental change. We then find our famous colleges, which host such relevant thinkers as Professor Dasgupta, whose recent review of economics and nature must be transformative. There is huge expertise among our social scientists, helping our understanding of our past as well as our future, our legal frameworks and our relationships with other countries.

I could speak for 90 minutes just listing all the amazing things going on in and around Cambridge. I will not do that, but I can hardly fail to mention the National Institute of Agricultural Botany and the surrounding science parks, Babraham and the amazing DNA sequencing at the Wellcome Sanger Institute. I will have missed others and I apologise to them. In all of them, people are the key. The money counts too.

For a considerable time, the importance of research and development work and the funding for it has been recognised on a cross-party basis. There is widespread agreement that UK spending on R&D has historically been too low. Although R&D investment in the UK has risen over the past 30 years, the amount we actually spend on it as a proportion of GDP has been flatlining, hovering at between 1.5% and 1.7% of GDP over the past two decades. It is behind the European average of 2% and the OECD average of 2.4%.

Our key neighbours and allies have been successful in investing far more. We often claim that we punch above our weight and get more for our money, but how much better we could be if we were matching that. The Government acknowledge this and have pledged to catch us up with the rest of the developed world, with a target of raising investment to 2.4% by 2027 and to increase public investment in R&D to £22 billion a year by 2024-25. This is welcome, although we know it will be a challenge.

This week we have seen studies showing that such targets are often set but have historically been difficult to reach, despite good intentions. It is important that we have this as an ambition and set a clear pathway. There are growing concerns in the R&D sector about how that figure is to be achieved and whether, beyond the rhetoric, the Government really still have that commitment to meet that ambition.

I will turn to the immediate problems, the first of which is Horizon. For many of us, there was little to welcome in what I would call the slapdash, desperate, last-minute trade and co-operation agreement that the Prime Minister salvaged with the European Union, but one glimmer in it was the framework for the UK’s continued association with the EU’s newest and biggest research funding programme, Horizon Europe. With a budget of €100 billion, it is the world’s largest and most competitive research funding programme.

We know that membership of the EU’s 2014-2020 Horizon research programme has been extremely beneficial to UK research. The UK has been one of the largest beneficiaries of the nearly €60 billion of funding that has been allocated over the past six years, receiving more than €7 billion. The vast majority of that has gone to our excellent UK universities, with academic research in the social sciences, arts and humanities particularly dependent on this stream of income from the EU.

The harsh reality of leaving the EU means that we are undoubtedly in a worse position this time around. While the rules for our participation have yet to be completely settled, it is clear that we will now be participating as an associated country, meaning that although we can lead and participate in collaborative research projects, we will have no formal decision-making power over the programmes and we will not be involved in discussions about which areas should receive priority for funding.

Taking back control turns out to mean not being in the room when decisions are being taken and, incredibly, having to beg others to make the case on our behalf. It does not matter how it is dressed up, our influence is reduced. In another blow this week, we have learned that we could also be excluded from major quantum and space research projects.

Whatever one thinks about all that, one of the biggest question marks is about how the Government will be funding the UK’s association with Horizon Europe, which is expected to cost about £2 billion a year, and who in Whitehall will be managing this. Post Brexit, we know the Horizon Europe bill will be paid in isolation rather than as part of overall EU membership, and that there is no existing budget provision for it. It was notable, despite many calls from the sector, that plans for where the funding would be sourced were conspicuously absent from the Budget earlier this month. There are significant and growing concerns among scientists and research funders that it could now be taken from the UK’s existing science budget. That would pit different elements of UK R&D against each other and would see a collective diminishing of the overall pot. It could set us back in our progress towards 2.4%.

Universities UK has warned—I am sure that the Minister will be aware of its letter to the Prime Minister this week—that if the Department for Business, Energy and Industrial Strategy is required to fund the costs of participation out of the existing budget, it will amount to an effective cut of something in excess of £1 billion, roughly equivalent to the cost of funding the entire Medical Research Council and the Science and Technology Facilities Council combined. Reduced domestic funding would also damage our ability to compete for Horizon Europe funding, risking a double loss. Universities UK estimates that a £1 billion reduction in funding would be equivalent to cutting more than 18,000 full-time academic research posts, distributed across all parts and all four nations of the UK, and could potentially lead to a further reduction of up to £1.6 billion in private R&D investment that would have been stimulated by public investment.

The Campaign for Science and Engineering—I am, as ever, indebted to Professor Sarah Main for her advice—warns that sourcing the Horizon bill from the current science budget in the way I referred to would effectively negate two years of Government increases in UK R&D funding, so it is a serious issue. I am sure that the Minister is well aware of it, and I hope that she will be able to confirm that the Government are on the case. Ideally she would confirm that the cost of association to Horizon Europe will not be taken out of the existing UK Research and Innovation budget.

I am afraid that what I have been describing is only one of the pressing problems. The Government’s recent decision to cut £4 billion from the aid budget prompted fury in Cambridge, where we take those things very seriously, not least because it broke a manifesto promise by the governing party to maintain spending of 0.7% of gross national income on aid. However, it is becoming increasingly clear this week that as a consequence the plug will now have to be pulled on hundreds of international collaborative research projects funded with UK aid. In passing, I want to pay tribute to Chris Parr and his colleagues at Research Professional News, who uncovered much of the detail. UKRI, left with a £120 million shortfall, has had to announce this week, with just four months’ notice, that most of its aid-funded research projects are now unlikely to be funded beyond 31 July, regardless of the stage that the research is at.

Those projects are aimed at tackling some of the world’s major problems, such as climate change, antimicrobial resistance and poor health and nutrition across the world. Projects that were previously funded through the global challenges research fund and the Newton fund, which usually receive official development assistance, have seen UK universities take centre stage in efforts to address plastic waste management, develop renewable energy and clean water technology, improve worldwide labour laws and roll out 5G networks in lower and middle-income countries. In the past year alone, lessons learned from ODA-funded projects have enabled UK universities to support the national effort against covid-19 through enhanced virus detection technology and online rehab services to help those suffering the long-term effects of the disease. I am grateful to Universities UK for its advice. As I said, the Minister will have seen its letter this week, which I thought was an unusually strong warning and intervention.

In Cambridge I am already hearing that there could be an impact on internationally important scientific programmes, such as those run from the UN Environment Programme world conservation monitoring centre, which is based in the city, as well as on many university projects that are currently focused on international development. Once again, I could read a long list of projects. I will not, but I will say that a consistent message is coming from all those people about the soft power delivered for us by those projects, which are of course good in their own right, but are also how we still have influence in the world. Those people all tell me that that is based on trust, and that if we break that trust it is hard to get it back again. There is much more than a financial cost.

That response is not only coming from Cambridge. My hon. Friend Mr Sharma just missed the deadline for speaking today, but he asked me to mention that the all-party parliamentary group on global tuberculosis recently conducted an inquiry into the UK’s investment in global health research. It found that the sustainability of the UK’s funding across the full product development pipeline is essential to getting life-saving new tools from UK labs to patients around the world. Cutting that funding will have enormous implications for the lives of the most vulnerable, collective global health security, the UK’s research infrastructure and our standing on the international stage. He urges the Government to think again.

It is shocking that the Government are punching a hole in such important research, particularly in a year when we are recovering from a global pandemic and, of course, hosting the G7 leaders summit and the crucial COP26 climate summit. Frankly, in terms of diplomacy, how inept does it get?

Universities have rightly warned that the cuts will harm our international standing, curtail successful programmes that have been a key vehicle for UK science diplomacy for many years, and lose international science and research partnerships that have taken a long time to establish. Stopping funding mid-cycle frankly shows blatant disregard and disrespect for our international partners. It is hardly surprising that six academics from a key research council advisory group for international research resigned this week in protest. The publication Research Professional News put it well yesterday when it noted:

“Anyone who has held a grant from the Global Challenges Research Fund will know that the UK goes out of its way to carry out rigorous due diligence on international organisations to ensure that they are reliable partners. It turns out that Her Majesty’s government was the party that everyone should have been keeping an eye on.”

All this is taking us in a worrying direction, when looking at that 2.4%. It seems to be flying in the face of the Chancellor’s stated aim of making the UK a scientific superpower, which was reiterated only yesterday by the Prime Minister. Universities UK has estimated that on top of the cost of Horizon association, the cut to ODA research funding could lead to a £1 billion reduction of the overall R&D budget. I suspect that, in the end, these are Treasury decisions. The Minister may well agree with the rising number of voices speaking out against many of the cuts. I urge her to do all she can to ensure that they are reversed and the vital projects that the funding supports are maintained.

Given all those pressures, it is perhaps surprising that the Government are considering diverting funding into a new, untested idea—the Advanced Research and Invention Agency. I will try not to duplicate this morning’s discussion. I will also try not to let my view of its leading proponent prejudice my thoughts, but I cannot help reflecting on the delicious irony of the name transition. DARPA—the Defence Advanced Research Projects Agency—sounded like a rather crude 1960s American missile system. ARIA is much more, dare I say it, European. Names aside, it raises a whole series of questions about how it fits into a delicately balanced landscape.

The Haldane principle, dual funding, mechanisms to safeguard blue-sky research—people have been wrestling with these issues for years. The raison d’être of the Cambridge college system is to preserve space for imaginative and creative thinking. I do not say that there is no scope for change or improvement, but please identify the real problem. As David Sainsbury has so sensibly warned in the past, we should not just try to import something from another culture or another system; it is much better to nurture and encourage what we are good at. We should maybe look at the real problem: the much-talked-of valley of death—getting our great innovations developed. If we want to borrow from America, we should perhaps look more closely at the Small Business Research Initiative and the role of public procurement.

Where is the overall plan? I have to say that there was not much that the Opposition welcomed from the previous Conservative Government, but an industrial strategy—now apparently sadly discarded—was a step forward. A huge amount of work was done across many sectors, although I fear there is only limited public awareness of it. The Opposition would certainly have preferred the mission-oriented approach championed by my hon. Friend Chi Onwurah, but at least we had a structure.

Let me conclude on two further issues. These sources of public funding are vitally important for R&D, but given that public funding made up only 26% of total R&D funding in 2018 and the majority of funding currently comes from the private sector, we know that much more needs to be done to encourage private sector investment. According to Government estimates from 2019, we will need an additional £12 billion per year of private investment to meet the 2.4% target. That is significant.

Currently, British businesses invest less in R&D than those of similar nations. Investment is concentrated in major players in just a few sectors, with the life sciences sector consistently the largest R&D investor in the UK, but my understanding is that this, too, has been flatlining in recent years. There are concerns over the long-term certainty of key schemes which have been supporting early stage innovation in the UK life sciences sector. I chair the all-party parliamentary group for life sciences, and colleagues tell me that despite being recognised by the Government as a highly effective scheme for driving business investment in R&D, the biomedical catalyst scheme still has no confirmed budget for the 2021 competition. I could say more, but time presses.

I will touch briefly on workforce issues. Back in 2019, the previous Science Minister, Chris Skidmore, highlighted that, as well as private investment, one of the key challenges we may face in meeting a 2.4% target will be the workforce, with an estimated 260,000 additional researchers working in R&D across universities, business and industry likely to be required. He was right. We should be concerned, because there are a number of known workforce issues facing those in R&D.

As the Royal Society has helpfully set out, the UK immigration system is still one of the most expensive in the world, which is a particular deterrent to international researchers and entrepreneurs considering making the UK their research home. Careers in R&D are not as attractive as they should be, with relatively low salaries, short-term funding, unclear career development and difficulties facing researchers and technicians looking to shift between academia and industry at various times during their careers.

Diversity is also an issue, with only about 7% of managers, directors and senior officials in academic and non-academic higher education positions being black, Asian and minority ethnic. Despite many excellent initiatives, such as Athena Swan, still too often there are too few women.

All of this must be challenged in order to create a welcoming working culture in R&D. I recognise the good work that the Minister has done, and is doing, to tackle this. I am glad that the Government have made at least some moves in the Budget to undo the damage inflicted by their predecessors, by looking again at visa restrictions, with a view to attracting global talent, and that they have recognised the need to tackle these wider issues in their recent research and development road map. I look forward to seeing the detail of the people and culture strategy that has been promised.

Unfortunately, as the trade union Prospect notes, public sector research establishments have found themselves constrained by public sector pay freezes by successive Conservative Governments, and unable to match the competitiveness of pay offered by universities and elsewhere in the private sector. Another former Science Minister, David Willetts, admitted in 2020 that it was only when George Osborne visited Cambridge’s Medical Research Council laboratory of molecular biology and saw the impediments to performance caused by public sector rules that the then Chancellor was convinced to grant it and similar bodies greater freedoms. I am told by Prospect that those freedoms have once again been removed. If that is the case, they should be restored.

In conclusion, we all recognise the importance of this sector to the future of the UK. I suspect that the Minister is fighting her corner, and all power to her. If she needs an aria, she should look no further than Puccini, “I will win—vincerò!” “Nessun Dorma” did once capture the public mood, and we need to show that our victory against the virus, if it is secured, will have come on the back of UK researchers and our great universities. We should celebrate them, but that means securing the funding. Minister, please sort out how Horizon is to be funded, restore the ODA cuts, and start to undo the damage that I fear has already been done to our international reputation.

Photo of Peter Dowd Peter Dowd Labour, Bootle

I ask Members to speak for no more than five minutes.

Photo of Greg Clark Greg Clark Chair, Science and Technology Committee (Commons), Chair, Science and Technology Committee (Commons) 2:53 pm, 17th March 2021

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate Daniel Zeichner on securing this debate. I am a little disappointed that he did not burst into song at the finale of his speech, but I recognise the important points made.

The hon. Gentleman is absolutely right that this is a time in which the profile of, and gratitude for, UK and international science has never been higher across the country and the world. The excellence of British science has been particularly prominent, whether in the city that he and my hon. Friend Anthony Browne represent, or in other great cities and towns across the country that host some of the best scientists in the world, working in collaboration with others across the world. It is no coincidence that the first pillar of our global strategy—in the integrated review of security, defence, development and foreign policy published yesterday—is science and technology, specifically to grow the UK’s science and technology power in pursuit of strategic advantage. That is right and it represents an exciting prospect in the light of what we have discovered about the possibility of science moving quicker than we ever thought possible to save lives across the world. We are also seeing, in other aspects of the response to the pandemic, a real acceleration in the deployment of technologies, even if they are far removed from medical sciences.

The new Secretary of State for Business, Energy and Industrial Strategy confirmed this morning that it remains the Government’s intention and commitment to invest 2.4% of GDP in science by 2027, and to achieve a public R&D budget of £22 billion of investment in science, so this should be a boom time for science and research. With the confidence of the public and the unprecedented commitment that the Government have made to doubling the science budget, we should be able to do more things to change more lives. Just at this moment, however, for some of the reasons mentioned by the hon. Member for Cambridge, science faces the prospect of having to retreat.

First, two weeks before the beginning of the next financial year, our principal science research body, UKRI, does not yet know what its budget will be for the year ahead. As we know, especially for science projects, long-term funding is crucial to contracts and investigations that take many years and months.

Secondly, there is uncertainty, as the hon. Gentleman said, about whether the UK’s contribution to Horizon Europe will be deducted from the science budget. In the past, what we got out of Horizon 2020, as it was known, was separate from the science budget. It has been suggested that our contribution to that project will be £2 billion a year, which would amount to as much as a quarter of the UKRI budget, meaning that at a time of intended advance, programmes such as the Faraday Institution’s research into batteries might have to be cut. In evidence to my Committee this morning, Dominic Cummings made it clear that the Prime Minister’s intention in the Brexit negotiations was always that that subscription should not be settled by cutting the science budget.

Thirdly, the temporary reduction in ODA spending that the hon. Gentleman mentioned is already causing UKRI to have to terminate some existing grants and leaving it unable to initiate any new awards. Sir Jeremy Farrar of the Wellcome Trust has said that the National Institute for Health Research could see a cut in global health funding of 28% just at the time when covid has established the importance of that international work. There is also the importance of restoring the fundraising proceeds that charities have lost.

We know that the Minister and the Secretary of State are committed to getting the budget we need. Now is the time to fight for that. The Minister enjoys the support of my Committee and, I am sure, of the whole House, in fighting those battles to give clarity to UK science.

Photo of Hywel Williams Hywel Williams Chair, Speaker's Advisory Committee on Works of Art, Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Defence), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade), Shadow PC Spokesperson (Foreign Affairs), Shadow PC Chief Whip 2:58 pm, 17th March 2021

It is a pleasure to serve under your chairmanship for the first time, Mr Dowd. I thank Daniel Zeichner for his interesting and comprehensive speech, and for arranging a debate on this important issue.

Research and development underpins our economic resilience, our global competitiveness and our progress towards a sustainable and climate-friendly future. The UK has always been a centre for research excellence, and Wales has played a foundational role in driving innovation across the UK. Wales is home to eight universities, including Bangor University in my own constituency of Arfon, and—as you would expect me to say, Mr Dowd—Bangor is a leading centre of excellence across the disciplines, in fields as diverse as social science, forestry and psychology. Wales has long driven innovation, from producing the historic first hydrogen fuel cell in 1842, to innovations reflected in the work of leading Welsh companies such as Riversimple. I hope that the Minister can confirm today the protection of funding for Bangor University’s research into agricultural microplastics and the consequences for food security and sustainable development in developing countries.

Welsh research has global implications, with Welsh-based researchers active in many countries, not least in the developing world. Perhaps the only really welcome aspect of yesterday’s grandiose integrated review was the commitment to return spending on overseas development to 0.7% of the UK’s national income. That, of course, was qualified, but I assure the House that I will do what I can to encourage the Government to return to their commitment, as set out in law by a previous Conservative Government. I hope you will allow me to say, Mr Dowd, that I was dismayed by that particular cut in the midst of a global pandemic. It is a cut in aid to those in conflict zones such as Yemen, where British-made weapons and systems are causing and compounding untold suffering. More positively, overseas development assistance also supports research by universities across the UK to advance our global progress towards achieving the UN’s sustainable development goals. As I said, I hope that the Government can confirm that funding for Bangor is protected.

From supporting sustainable development to ensuring our global competitiveness, research and development funding is pivotal to sustainability and productivity in our economy. That is why Plaid Cymru welcomed the UK Government’s commitment to raise R&D spending to 2.4% of GDP by 2024, yet the same regional inequalities that split our economy, favouring London and the south-east, are reflected in how the UK Government support research and development. In 2018, while R&D spending was £587 per head in England, it plummeted to just £250 in Wales—in other words, the level of research on R&D in Wales was just 42% of that in England. I have no doubt that this is linked, to a degree, to the low level of investment and ambition by the Labour Welsh Government, but it also reflects the huge concentration of public spending in the golden triangle of London, Oxford, and—with due respect to the local Member—Cambridge. For instance, in 2018 London and the south-east received 49% of total R&D spending from the UK Government and UK Research and Innovation.

Such inequalities have also extended to the UK Government’s fiscal interventions, which of course have profound implications for research. Between 2015 and 2018, only 210 businesses in Wales benefited from the enterprise investment scheme. That is why I urge the UK Government to acknowledge that, if the rhetoric of levelling up is to have any substance, they should immediately commit to equitable funding, not least in research and development, for otherwise marginalised economies such as we have in Wales. Anything else would prove that, in yet another respect, the UK just does not work for Wales.

Photo of Chris Skidmore Chris Skidmore Conservative, Kingswood 3:04 pm, 17th March 2021

I begin by putting on record my thanks to Daniel Zeichner for having secured today’s important debate. I am also delighted that it comes a day after the Prime Minister announced in the integrated review the Government’s renewed commitment to spend 2.4% of GDP on R&D by 2027. It is a familiar figure, which I know the R&D policy community has spent a long time debating.

I was a Science Minister for two years and set out my own road map to 2.4%. I made a series of four speeches that looked at the importance of investing in people, in international partnerships, in private R&D investment and in emerging technologies in order to meet the target. The broad theme of those speeches—the hon. Gentleman rightly referred to this—was the importance of doubling not only public but private investment and seeking an entire change in the culture of how we do R&D in this country in order to hit 2.4%, given that other countries are now racing ahead of us. Germany is near 3%, South Korea is at 4.5% and Israel is at 4.9%. We will fall behind in the global race unless we raise our ambitions higher still.

I stand by the words of those speeches that I made in 2019, but what has changed since then is time: we have too few years to achieve 2.4%. As the hon. Gentleman stated, we are standing still at 1.8% of GDP being spent on R&D. There are just 2,115 days until 2027. We have only 302 weeks—or just a little over 50,000 hours—to go, if we are to reach that target.

Reaching the target is not just about investment, important though that is—I will talk about that in a moment. It is also about providing certainty for the future; and with certainty comes the need for advance planning in order to allow for the lead-in times, which are lengthy for R&D investment. That is why, when we were preparing to leave the European Union, the Government announced the underwrite in August 2016 and then the underwrite extension—the guarantee—so that in-flight applications to Horizon 2020 and projects already taking place in Horizon 2020, would still receive money for the duration of the projects. Communication is absolutely vital when it comes to demonstrating long-term certainty for the R&D community.

On certainty and commitment, there were big-ticket items that I needed to fight for as the Science Minister, one of those was association into Horizon Europe in order to ensure that British science stayed on the road. That was why I also worked hard to commit to an increase in the UK contribution to the European Space Agency, increasing the subscription to a record level in 2019, and also to secure the first real-terms increase in QR—quality-related research funding—for more than a decade. Those were essential big-ticket items that we needed in order to enhance stability for the sector.

When it came to Horizon, many people told me that that simply would not be possible to do. I think that sometimes the R&D policy community can see things in a bit of a glass-half-empty way, mourning for yesteryear, when what we really need is to work together towards a positive vision for the future.

The manifesto commitment made by the Government saw R&D investment publicly increase from £9 billion to £19 billion. That was a huge amount—one of the most significant increases in a generation. Since then, the Chancellor’s Budget last year increased the investment to £22 billion, so my assumption was that the Horizon subscription would come from that increase of £3 billion—the difference in what was being spent as a result of the Budget.

I recognise that we have difficulties over the current ODA R&D money that needs to be secured. Although we need certainty, it is right that we now look afresh at new structures and new funds in order to ensure that we can enhance our international research capabilities. I think that sometimes the global challenges research fund and the Newton fund were a square peg to fit a round hole when it came to justifying ODA spend—not necessarily when it came to actually fighting for what is right when it comes to R&D spend. I would look at the agility fund and the discovery fund set out in the Smith and Reid review for answers here.

On funding in general, however, we need to move away from the diverse plethora of pots—there are too many people competing for too small budgets—and replace them with the UK equivalent of Horizon Europe. A multi-annual framework for the R&D budget would help us to reach 2.4% by 2027.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak 3:09 pm, 17th March 2021

Let me begin by congratulating my hon. Friend Daniel Zeichner on securing the debate and by welcoming the proposals for ARIA, which I believe is about to begin its legislative journey. It is good to hear that ARIA will have a guaranteed life of at least 10 years and that the chair will be responsible for its mission. It would also be good to hear that industry will be represented on the board. There is widespread recognition that innovation funding is just too short term in this country. The Catapult programme, for example, which has been a significant success, is funded in five-year blocks. The Select Committee on Science and Technology recently called for long-term funding for Catapult.

We need that long-term funding and support for research that might fail. Otherwise, we will be in the game of trying to spot and back winners. That is not the way to lead research in this country. We have a 10-point plan for the green industrial revolution. We have set out the grand challenges in the industrial strategy. Surely we now have to develop an R&D strategy that supports those measures and is aimed at finding jobs for the future.

Let me pick two areas. We have committed to phasing out petrol and diesel cars by 2030. When we take into account the rules of origin requirements guaranteeing free entry to the single market, that probably means 2027. Batteries account for 60% of the value of an electric car. The UK Battery Industrialisation Centre is helping with the developments, but in Europe, CATL, Samsung, LG Chem and SK Innovation are already building gigafactories close to European car manufacturing centres. Unless there is more support and subsidy, as is happening on a massive scale across Europe, we will be the losers.

With all due respect to my hon. Friend the Member for Cambridge, we need a strategy to support those areas with high industrial R&D investment but poor access to public money. The alternative is simply to reinforce the golden triangle, which already benefits from the lion’s share of UKRI and the industrial strategy challenge fund. In south Birmingham, we are building the health innovation campus, dedicated to translational health and life sciences research. The first phase of the partnership, involving the University of Birmingham and the University Hospitals Birmingham Women’s and Children’s NHS Trust, will include space for small and medium-sized enterprises and scale-ups, working in med-tech, precision medicine, diagnostics and digital health care, the very areas we need to develop.

The campus was approved as a life sciences opportunity zone last February, the first outside the south-east. Now the Government need to demonstrate what benefits attach to being an opportunity zone. As Professor Richard Jones points out in his paper, “The Missing £4 Billion”, the east midlands, west midlands and north-east benefit from business-led investment at or above the UK average, but suffer from low levels of public investment.

There is a concentration of UK R&D activity in the three areas of London, the south-east and the east of England. Over the past 10 years, 72% of R&D jobs in the 10 most R&D intensive industries were in the sub-regions covering London, Oxford and Cambridge. If the Government’s proposed uplift in R&D investment were targeted on projects outside the golden triangle, it could mean a further £9 billion for regions where there is real industrial potential.

Now is surely the time to maximise the benefits of combining public funds and business investment, to take risks on research, to ensure that resources are distributed fairly in a way that supports new jobs and new industries.

Photo of Derek Thomas Derek Thomas Conservative, St Ives 3:14 pm, 17th March 2021

I congratulate Daniel Zeichner on securing this essential and timely debate. He rightly referred to the renewed awareness of how critical properly funded research and development is, and how it saves lives.

There is a need to provide adequate public research funding for brain tumours. We have developed the covid vaccine through proper funding and a reduction in logistics and bulky infrastructure. Brain tumours predate covid and their lethal threat will remain when the vaccine has reduced covid mortality rates.

I am grateful for the opportunity to explain why research and development of brain tumour treatment and diagnosis is so critical. I chair the APPG on brain tumours and we mark the month of March each year by raising awareness and finance for brain tumours and their treatment. In fact, more than 100,000 people have signed a brain tumour research petition calling on the Government to level up research and development funding for brain tumours to similar levels as that for other devastating cancers.

Public funding for research is critical if we are to offer hope to brain tumour sufferers. Brain tumour research supports discovery science and early-stage translational research. The major output from discovery science—also known as basic research—is new knowledge. Few organisations are willing to take on such early-stage, high-risk research. Therefore charities such as Brain Tumour Research play a critical role at the early discovery stage. As well as the governmental support offered by the NIHR, the UK Government can also support discovery science through UK Research and Innovation and the Medical Research Council.

However, only 14% of UK spend on brain tumour research is from the Government. The remaining 86% is from the charity sector. Without new discovery science, the outlook for patients with brain tumours is very bleak. While it is high risk, when discovery science is successful it can lead to significant progress, new ways of thinking and new treatment strategies. It is this investment in discovery science that can, in time, deliver huge improvements in patient survival.

The 2016 House of Commons Petitions Committee report “Funding for research into brain tumours” declared that successive Governments have failed brain tumour patients and their families for decades. Somewhere between the NIHR, UKRI and the MRC lies a funding solution for brain tumour research, but responsibility must not be shuffled and passed on between those departments. If it is, we will continue to fail those diagnosed with this devastating condition.

It is worth pointing out that if early-stage research is not funded, there will be nothing coming out at the other end of the pipeline, and currently we are not allocating available money effectively. Just 25% of the NIHR £40 million, which was announced following the sad passing of Dame Tessa Jowell, has so far been committed to brain tumour research. Brain tumour sufferers just do not have the luxury of time. Even after significant attention has been given to the brain tumour and brain cancer space, it is still the case that brain tumours kill more children and people under 40 than any other cancers.

The potential for significant improvement to survival rates is very real. New methods of treating brain tumours are being developed, but it is a very difficult and tricky pathway. Proper Government focus and targeted funding into brain tumour research will accelerate the discovery of effective treatment. Not only would that give thousands of families real hope and reduce mortality rates, but it will also support UK plc as a world leader in this, as will the other areas of research and development raised during the debate.

It is critical in this month of March and as we go forward to make sure that adequate funding is going into research so that we can find the correct way to treat and cure those who have a brain tumour diagnosis.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 3:19 pm, 17th March 2021

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate Daniel Zeichner on setting the scene so very well, and other hon. Members on their contributions. I very much look forward to the Minister’s response. It is a pleasure to speak for the first time in a Westminster Hall debate that she will respond to.

One of the many lessons that can learned from coronavirus is that for the brightest scientific minds in the world—I say this unashamedly, because we all believe it and evidential base for it is very clear—the special ingredient is governmental support. That has made it happen. The Government deserve credit for the way the coronavirus vaccine has been found, and for the initiative, power and strength that they put in to make sure that happened. The roll-out of the vaccine is proof of the brilliance and expertise of our scientists. We should put that on the record and thank them. I am not a scientist—I never could be, as I would not have the brains for it— but many are. Thank the Lord that we have them and that they have been able to find the antidote for covid.

We need the right people with the right training and the right equipment to make the groundbreaking discoveries that we are capable of and to achieve what we need with Government backing. This debate is about ensuring we have that. That is what we are trying to achieve. We all know that we are in difficult financial times, and my party and I have backed the Government’s Budget and plans. However, there are a few issues. We need to invest in healthcare and in research and development. Those are the two issues that I want to speak about very quickly.

The UK Government have committed to investing £22 billion in UK R&D by 2024-25 as part of the target of 2.4% of GDP by 2027 and 3% in the long term. The Government have always been committed to R&D, but I want to pose a few questions. I do it gently and constructively, by the way. I always try to do that. That is the way I try to work with my contributions.

I read the briefing by the Royal Society, which outlined what it felt must be committed to enable our research and development to continue to provide the breakthroughs that coronavirus has shown we are capable of achieving. There are many reports of mutant strains, and we need to ensure that we have the people in place to respond to whatever the future may bring, in the way that we have in the past. I personally believe that we will have to live with covid-19. I think it will be like getting our flu injections, which I do every year. I have had my vaccine, and one hon. Gentleman said that his is coming. It is good to have that in place.

The Royal Society has said that further raids on the UK research and development budget will create a funding gap that undermines the Government’s commitment to increasing UK investment in R&D to 2.4% of GDP by 2027. We realise the potential of that to improve lives. It is good to have the research, but it is also good for jobs, the economy and the wages that go with it. Since then, the Government have confirmed the UK’s association with Horizon Europe—a valuable commitment to international scientific collaboration—but they have not given an assurance that the money to pay for it will be additional to the funds already committed to the research and development budget, so we seek a response to that. The Government previously recognised that and committed to addressing the funding gap that would open up if the UK did not associate with Horizon Europe. The payment for association is now taken from the existing research and development budget, so the Government are creating a new funding gap.

I want to speak about health, but I just want to give a quick plug to the battery initiatives. In my constituency—back home in Strangford—we are going to have a couple of those coming through, and I believe there is the potential for us to drive that. I want to take the opportunity to get clarity—we are not robbing Peter to pay Paul here, I presume. It is not enough to say that we are sewing it in, but the money for this year is for little more than a membership pack.

Will the Minister also confirm that there will be collaboration between universities and companies? Queen’s University in Belfast has been one of the great exponents of how businesses and universities can work in partnership to improve health. We have cancer care in Queen’s University. We had the Prime Minister in Northern Ireland just last week, and he was saying that very thing. The Prime Minister recognises that, and we as a Parliament should recognise it and try to push on it. I want to ensure that Queen’s University has the continued funding to continue to deliver its research on cancer and many other issues.

I look to the Minister to clarify and underline what the precise delivery of the Government commitment looks like for the future of R&D. We need that, and the Minister and the Government need to deliver it.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire 3:24 pm, 17th March 2021

I thank Daniel Zeichner— a fellow Cambridge city MP. I have the south of the city. It is fantastic to have this debate on this issue, which is really important for all the reasons he highlighted. It is enormously important for the country but also for my constituency.

Research and development is clearly absolutely vital for economic growth. We are a largely knowledge-based economy. It is a growing sector globally. It is growing far faster than general economic growth. It is absolutely right that we position ourselves as a science superpower. I fully welcome the Government’s target of R&D being 2.4% of GDP by 2027.

One thing that the pandemic has shown, and that we have always known in South Cambridgeshire and Cambridge, is that we are already a life sciences superpower. We do more testing per capita than any G20 country. The AstraZeneca vaccine, which the hon. Gentleman talked about, has been rolled out not just in the UK, but around the world, despite some wobbles in Europe at the moment, which I am sure they will get over. In my constituency, the Wellcome Sanger Institute does more genome sequencing of the covid virus than the rest of the world put together—that is a huge achievement.

The life sciences are the largest R&D sector in the whole economy. In 2019, it brought in £2.8 billion of investment, up tenfold since 2012. Although there are great amounts of private investment there, there is a huge role for Government support. The reason for that is that in the life sciences, there are often very long lead times. After the research and development stage, many years can pass before getting any revenues. There is also a lot of fundamental blue-skies research that is not necessarily directly related to commercial opportunity.

I want to mention bit.bio, a start-up company in my constituency that I happened to meet virtually yesterday. It has the technology to use the DNA from a human hair to create every type of cell in the human body in a functioning way. It has created functioning human muscles from a human hair cell in a laboratory, not for Frankenstein reasons, but because those human cells can be used to treat a lot of diseases. The company is at least two years away from any commercial application, however.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire

They might be able to use the hon. Gentleman’s hair—he has some left and they could use the DNA.

The Government support the life sciences industry, through the biomedical catalyst, with £30 million a year— that is a very welcome and successful scheme. An Ipsos MORI report last year showed that for every £1 of Government money put in, it leveraged £5 of private sector investment. The 150 companies that won grants from the scheme have raised £710 million. That is a 5:1 ratio compared with a 2:1 ratio across Government funding for R&D in general, so it is a far better sector in which to leverage private sector investment. Six firms in my constituency have won grants from the biomedical catalyst in recent years, and I thank the Government for that.

One sign of success is that the quality of applicants has increased dramatically. Five years ago, one third of projects of sufficiently good quality got funding, but now only one in 25 does, because there are so many high-quality applicants. That means that there is a lot more opportunity to fund, and if the Government wanted to maximise the leverage of private sector investment across R&D in all sectors, they should increase the budget of the biomedical catalyst from £30 million to, say, £100 million. There are definitely enough projects there.

I have some good news and some bad news about what is happening at the moment—the Minister and I have exchanged letters on this. The biomedical catalyst has had a competition this year, and has decided the winners, three of which are in my constituency. They are poised to make the announcement about their great funding so that they can go out to investors and get more private sector investment in, showing what a triumph both the Government programme and their technology are. The bad news is that the winners cannot be announced because the biomedical catalyst has no budget as we speak. The money is there in BEIS overall, but there are Departmental negotiations going on. In the industry as a whole, that has led to a fear that no news is bad news, and that the rug is going to be pulled from under the whole scheme. The industry is finding the silence rather ominous.

My plea to the Minister is to prove the worriers wrong. Will she announce the budget commitment to the biomedical catalyst, unlock the investment in the companies in my constituency and across the UK, and help Britain and South Cambridgeshire retain their position as life sciences superpowers of the world?

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education) 3:29 pm, 17th March 2021

I thank everybody who has contributed to this really interesting debate. The public have never been more aware of the global importance of science, nor have they ever been more supportive of spending in that area. I congratulate Daniel Zeichner on securing the debate. He rightly highlighted the superb work taking place in his constituency.

I will not attempt to detail all the groups working across Glasgow, specialising in areas as diverse as quantum optics and space, and doing all sorts of incredible work striving towards eliminating global poverty. This diversity is important, and as we see cuts in ODA, we have to ask what exactly the purpose of research funding is. As Greg Clark said, today in the Science and Technology Committee we discussed both ARIA and UKRI funding, and if we throw in the impact of Brexit and the role of Horizon Europe, we have a lively mix of factors contributing to funding in the UK.

The ambition to increase research funding to 2.4% of GDP is widely welcomed, but there needs to be clarity on what this means. The UK’s status as a science superpower is underpinned by international research collaboration, and we need to make sure that that is protected. It is concerning that UKRI has announced a shortfall of £120 million between its ODA allocation, which has been reduced to £125 million, and its commitment to grant holders. That will affect projects funded both through the global challenges research fund and the Newton fund. A UKRI spokesperson has said that it is too early to detail the final impact on grants funded by ODA funds but that

“we expect to be making some very difficult decisions—including issuing grant termination notices”.

I have been contacted by my constituent Professor Alison Phipps, who is the UNESCO chair at the University of Glasgow. She says:

“This is profoundly concerning and will set back our ground-breaking work on racial justice at the University of Glasgow…Far more important is the welfare and safeguarding of the communities we work with in the world’s poorest countries, and where the staff we have just employed across 24 ODA countries will be destitute if we terminate their contracts upon termination of grants”.

Universities Scotland has said:

“The decision will have a whole-systems impact on our connections and collaborations internationally. Our research and innovation communities have worked intensively to establish high quality global partnerships targeted around the UN Sustainable Development Goals.”

It says that the impact will be permanent reputational damage to both Scottish and UK researchers and that it will impact a whole pile of poverty-associated challenges, including the impact of climate change and the response to the covid-19 pandemic. Investing only in domestic scientific research will not solve the problems we face as a planet. In the year when Glasgow will host COP26, and the UK is meant to be showing global climate leadership, this cut is just unacceptable.

Many Members this afternoon have asked about Horizon Europe contributions. Will this be new money, or will UKRI see its budget squeezed? We need answers to that. It is of further concern that, in the latest draft of the Horizon Europe work programme, text has appeared that would exclude participation in all quantum and space programmes by organisations in associated countries. I urge the Minister to look at that, and if groups do indeed find themselves locked out of funding as a result, I urge the Government to ensure that that funding is replaced. On ARIA, of course, any additional funding or spending is welcome, but there has to be clarity over whether this is new money or simply reprofiling.

This morning, Dominic Cummings talked about the bureaucracy of current funding as one of the reasons for the new body, but if bureaucracy is causing problems, we would surely be better off tackling that than creating a new body. He also talked about extreme freedom for researchers, so could the Minister detail how we enable extreme freedom while retaining oversight of public spending?

Hywel Williams raised the issue of national inequality of research spending, and the National Audit Office report into the industrial strategy challenge fund noted:

“The Fund is unevenly spread across the UK with the majority being provided to the West Midlands, South East and London”.

I would therefore like to hear something about how the Government will ensure that ARIA is fully representative of the devolved nations.

I have found myself in the strange situation in the last few days of agreeing with Tories when they have commented about balancing the books on the backs of the world’s poor. A global Britain—or a Britain that purports to be global—that continues to do that is not one that any of us should be proud of.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport) 3:35 pm, 17th March 2021

It is a real pleasure to serve under your chairship for the first time, Mr Dowd. I congratulate my hon. Friend Daniel Zeichner, who called today’s important debate. He is a passionate champion of science and his constituency’s science strengths. In his excellent opening remarks, he set out today’s R&D landscape, and where the Government must do better. Indeed, there has been cross-party agreement in the debate about the importance of research funding. It is unfortunate that the Government do not build on that consensus.

From the gravitational constant to the structure of DNA, and from jet engines to the worldwide web, the UK has a proud tradition of science, innovation, research and development that is renowned across the world. Our university research base contributes £95 billion to the economy, supporting nearly 1 million jobs in science institutes, charities and businesses of all sizes across the country. Twenty per cent. of the UK workforce is employed in a science or research role, and those are good, high-wage, high-skilled jobs that are helping to solve key challenges facing our country and planet—climate change, disease and productivity—and helping to ensure that the UK stays globally competitive.

As Anthony Browne emphasised, the pandemic has highlighted the importance of the UK’s science research base and shown the world what we can do, particularly through vaccine research and development. However, our world-leading science sector does not have the world-leading Government that it deserves. As we have heard, the Government’s warm words on science have not been backed by action. Industrial strategy seems to have been archived, with decisions on science made piecemeal rather than strategically.

The Chair of the Science and Technology Committee, Greg Clark, mentioned the importance of science to yesterday’s integrated review, but the Wellcome Trust has commented:

“There’s a growing gulf between rhetoric and reality in the government support for science. The Integrated Review is full of fantastic and achievable ambitions, but the words are meaningless if they’re not backed up with funding.”

Funding our R&D sector makes economic sense. The Campaign for Science and Engineering found that, for every £1 of public investment in R&D, between 20p and 30p was returned every year. As my hon. Friend Steve McCabe and Jim Shannon emphasised, R&D is a key driver in building the economy of tomorrow, creating new jobs as others are overtaken by automation, and positioning the UK as a leader on the world stage.

I am sure the Minister will agree when I speak about the importance of R&D, but let us look at the Government’s actions. Reports in the Financial Times today indicate that the Government are likely to miss their 2.4% of GDP R&D spending target following the cuts to overseas development. Labour has called for a 3% target. To fail on 2.4% would be truly shocking and, as has been said, it would be on the backs of the poorest countries in the world. Imperial College London, where I studied electrical engineering decades ago, is one of the many bodies that have written to me emphasising the need for international collaboration to be a priority. Yet, as Hywel Williams highlighted, the Government are cutting overseas development research. Why?

The Government promised to double R&D spending to £22 billion by 2024—a move supported by key stakeholders. However, as with many a prime ministerial promise, we do not have the detail. I have tabled many written questions on that, but the Minister has successively hidden behind the spending review, the Budget and, now, departmental budget reviews. As the Chair of the Science and Technology Committee mentioned, just this morning the Business Secretary admitted that UKRI’s 2021-22 budget had not yet been agreed. When Labour calls for a long-term funding plan for science, our ambition is orders of magnitude greater than three weeks.

During the Brexit negotiations, the Government sowed uncertainty and anxiety among researchers as they refused to commit to Horizon alignment. I am pleased that the eventual deal did make that commitment, but, as my hon. Friend the Member for Cambridge pointed out, the Government continue to be evasive over the funding details. The Wellcome Trust says:

“Researchers in the UK welcomed the decision to continue the UK’s”

Horizon commitments, but

“they will be immensely frustrated, and with good reason, if it’s going to be paid for by cuts to other research. We urgently need reassurance on this.”

Can the Minister tell me whether the UK’s estimated £2 billion of Horizon contributions will be taken from the promised £22 billion science spend, as Chris Skidmore implied? Will funding received back from the Horizon programmes be counted as part of that £22 billion, and which departmental budgets will pay the Horizon contributions? Science spend increases are a positive break from the decade of austerity inflicted on our economy, but as my hon. Friend the Member for Cambridge explained, we need direction, not a destination-less road map, in the absence of a clear strategy.

The Government have failed to protect our research sector from the impact of the pandemic. Derek Thomas highlighted the importance of charity medical research, which invests £1 billion into university research and development but has been consistently ignored when it comes to pandemic support. Modelling by the Institute for Public Policy Research predicts that lost charity income could mean that medical research charities invest £4 billion less in health R&D between now and 2027, with a knock-on effect on private investment of up to £1 billion. The British Heart Foundation and Cancer Research UK have announced thousands of lost research jobs and cut hundreds of millions from R&D budgets as the Government have turned a blind eye. Why have the Government been prepared to risk those jobs and that investment?

The failure of the Government to respond to the pandemic is costing jobs and risks creating a lost generation of researchers. There are 17,000 early-career researchers whose long-term future in research is in jeopardy. In January, researchers from the Northern Ireland and north-east doctoral training partnership, representing universities across the UK, wrote to the Government calling for them to provide security for PhD students. The Government have merely shifted the cliff edge six months back, and only for some. Will the Minister tell us what the Government are doing to support early-career researchers and the next generation of science researchers?

My hon. Friend the Member for Cambridge and others have highlighted concerns about the new high-risk, high-reward research body ARIA. Although we welcome it in principle, today’s Select Committee hearing reflected our concerns that, without a clear mission beyond the ideological eyesight of Dominic Cummings, ARIA could become a vanity project vulnerable to cronyism.

If R&D is to drive our recovery and provide high-skill, high-paying jobs, it must do so for all regions. In 2018, 72% of R&D expenditure was in the south-east and south-west, with the north-east receiving the lowest per-head funding in England—just a quarter of that of the east of England. Recent decisions may make things worse. Chris Day, the vice-chancellor of Newcastle University, has written to the Chief Secretary to the Treasury to say:

“The decision to reduce the budget for international development projects is deeply concerning. If funds are cut such that the Hubs contracts are terminated this will lead to immediate redundancies in North East England.”

What is the Minister doing to ensure that R&D investment is shared fairly across the regions of the UK? The Labour party would champion R&D as an engine of regional progress, strengthening regional economies by rebalancing R&D investment.

Finally, we will never unlock the full potential of our research sector if we do not use the talents of everyone. There are real issues with diversity in the UK’s science and research sectors. Diversity is an economic imperative, especially as we face a shortfall of science, technology, engineering and maths workers, so what is the Minister doing to increase diversity, and how is that reflected in the Government’s funding model? Labour would build on the UK’s science successes and ensure that we continue to be an innovation nation that draws on the talents of all.

The Royal Society said that the Government’s actions are undermining their ambition for the UK to be a science superpower. Government indecision and inaction have made the impact of the pandemic worse for our critical research sector. They must now provide the long-term funding needed for the recovery.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 3:45 pm, 17th March 2021

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate Daniel Zeichner on securing the debate and raising important issues for the future of research development funding. I thank all hon. Members for the quality of their contributions. There have been many enthusiastic observations, indicating the passion felt by many Members. I fully echo that sentiment, and I am pleased to have the opportunity to reiterate that R&D is absolutely central to the Government’s ambitions of unleashing innovation and continuing to cement the UK as a science superpower.

The hon. Member for Cambridge spoke of the importance of research and development, highlighting the benefit that it brings, as well as the issue of Horizon Europe. I am delighted that the United Kingdom has an agreement to take part in the Horizon Europe programme. He also rightly pointed out that R&D is about relationships as well as investments, which is why the association to Horizon has been welcomed by businesses and the research community and will bring huge benefits to the United Kingdom. The decision to associate to Horizon Europe came after the spending review, so we continue to work through where its costs will fall. We will set out our plans for R&D spend in 2021-22, including funding for Horizon Europe, in due course. I reiterate the comments made by the Secretary of State for Business, Energy and Industrial Strategy earlier today that we continue to robustly defend the research budget. We are working hard to confirm R&D budgets as soon as possible.

A number of hon. Members, including the hon. Members for Cambridge, for Newcastle upon Tyne Central (Chi Onwurah) and for Glasgow North West (Carol Monaghan), raised official development assistance. I recognise the depth of feeling across the research sector regarding ongoing funding for international development research. The impact of the pandemic on the UK economy forced the Government take some difficult decisions, including temporarily reducing the overall amount spent on aid. This has inevitably meant less funding for BEIS R&D development programmes, as it has for all areas of ODA spending. My officials are working with our delivery partners to best manage the impact of those reductions and to protect the strongest research programmes. I should add that both the Chancellor and the Foreign Secretary have reiterated the Government’s commitment to international development and our intention to return to the 0.7% GNI target when the fiscal situation allows.

The hon. Member for Cambridge mentioned our commitment to the R&D road map and to developing an R&D people and culture strategy that will set out the direction and actions that Government, funders, employers and individuals can take to ensure that the R&D sector has the people it needs, working in a culture that gets the best out of everyone. I am committed to ensuring that the UK attracts, develops and retains talented individuals and strong teams to support our science superpower ambitions.

The hon. Members for Arfon (Hywel Williams) and for Birmingham, Selly Oak (Steve McCabe) raised the important question of levelling up. The Government are due to publish the UK R&D places strategy in the summer. We will ensure that R&D and innovation benefits the economy and society in nations, regions and local areas across the United Kingdom, contributing to the Government’s wider levelling-up ambitions. This is about not only how much money we spend in each place, but outcomes, so our focus must be on the impact that our R&D system can have in different places across the country.

R&D is incredibly important in so many ways. It advances the boundaries of human knowledge and discovery and is a key driver of economic growth and productivity. It also enables society to solve the challenges of the future in areas of fundamental importance, such as health and climate change. As several hon. Members have noted, the UK gets significant value from its investment in R&D. Each £1 of public investment in R&D ultimately leverages around £2 of additional private sector investment and creates, on average, around £7 of net present social value.

Hon. Members will know that we published our R&D road map last July. It sets out our vision and ambition to ensure that the UK is the very best place in the world for scientists, researchers, innovators and entrepreneurs to live and work. Although we recognise the challenging economic and fiscal climate, the Government committed through the spending review in November to invest £14.6 billion in R&D in 2021-22, with BEIS, as the custodian of the R&D system, being allocated £11 billion for R&D in 2021-22. That commitment re-emphasises the importance of science, research and innovation towards our future prosperity, as well as our ambition to move towards the UK investing 2.4% of GDP in research and development by 2027.

The UK has a world-leading research base and global expertise across a wide range of disciplines. With less than 1% of the world’s population, the UK accounts for 14% of the world’s most highly cited academic publications. Our strong core research system is integral to that success, as recognised by the Chancellor in the spending review. He confirmed an ambitious multi-year settlement for UK Research and Innovation and the national academies core research budget. By 2023-24, the Government will be investing £1.4 billion more per annum in core funding for our world-leading research base compared with 2020-21.

My hon. Friend Anthony Browne spoke about funding for life sciences, and I am grateful to Jim Shannon for his passionate and constructive contribution. My hon. Friend Derek Thomas also spoke passionately about the importance of funding for devastating conditions such as brain tumours and cancers, and I recognise the importance of such research. That is why we are committed to supporting the health and life sciences sector, where we are fortunate to boast a vibrant ecosystem that brings together researchers in some of the world’s top universities to work collaboratively with their counterparts in leading pharmaceutical companies, clinical researchers in the NHS and others. This has never been more important than in the response to covid-19, and we recognise that years of blue-sky research, enabled by the strength of the UK’s core research system, was vital to our success in developing effective vaccines so quickly. The Government continue to support that response, with commitments including £128 million to support vaccine research and manufacturing.

The rapid response to covid-19 has also led to a cultural shift around funding and decision making, with a desire to move towards a leaner and more agile system. The new Advanced Research and Invention Agency will be an independent research body that funds high-risk, high-reward scientific research, and it will complement the work of UK Research and Innovation and other research funders. ARIA will be led by a prominent world-leading scientist, who will be given the freedom to identify and fund transformational science and technology at speed. It is based on successful models that are built on giving researchers significant autonomy and freedom from bureaucracy.

Looking forward, we want to go further and build on our truly excellent UK R&D achievements, which is why we are committed to increasing UK investment in R&D to 2.4% of GDP by 2027. My right hon. Friend Chris Skidmore spoke about this, and about the importance of public and private investment in reaching that target. Public investment in R&D is increasing, but we must also leverage further private sector investment. UK businesses provided almost £26 billion of R&D in 2019—an increase of 3.3% compared with 2018—as part of a long-term trend of positive annual growth.

Earlier this month we published “Building Back Better: our plan for growth”, in which we announced plans to publish a new innovation strategy in the summer to inspire, facilitate and unleash innovation, supporting and harnessing the tremendous capability of UK innovators to boost future prosperity, both locally and nationwide. The Budget also announced £375 million to introduce Future Fund: Breakthrough, a new and direct co-investment product to support the scaling up of R&D-intensive businesses, and Her Majesty’s Treasury has announced that it will review R&D tax relief to ensure it remains up to date, competitive and well targeted.

In conclusion, research and development are integral to our objective of unleashing innovation. R&D will help us drive the Government’s long-term plan to build on the UK’s world-class credentials in research and development, and deliver economic growth and societal benefits across the UK for decades to come.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs) 3:54 pm, 17th March 2021

I thank all hon. Members for the high quality of their contributions, as one would expect given that we had former Science Ministers and former Secretaries of State involved. It was an excellent discussion. I am particularly grateful to Greg Clark for mentioning the medical research charities; others picked that up, including Derek Thomas. I probably should have alluded to them in my introduction. They have been very hard hit and they do vital work.

I note, as I had expected, that my hon. Friend Steve McCabe and others suggested that the golden triangle is in a privileged position. We are and we do get the lion’s share of research, but I gently suggest that when talking about levelling up we should always be aware that there is a danger of dragging down. We are world leaders, but that does not happen by accident. I have always said that future success cannot be taken for granted, and we have to make sure that we continue to support what we do very well in this country. Some of that is in the golden triangle, and we should not be ashamed to say that.

In conclusion, I say to the Minister that I am a little disappointed. I had hoped to hear a little more than that the budget would be resolved in due course and the cuts would be managed to minimise the impact. I hope that she will be fighting our corner, because this is so important, and not just for the future of this sector or for particular parts of the country. This is what we do so well. If there is a future for Britain in the world, this is it, but it cannot be done by making short-term cuts because the budget cannot be sorted out for a few months for bureaucratic reasons. I hope that the message will go back to Government loud and clear that we are looking for better.

Question put and agreed to.

Resolved,

That this House
has considered the future of research and development funding.

Sitting suspended.