All 8 contributions to the Advanced Research and Invention Agency Act 2022 (Ministerial Extracts Only)

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Advanced Research and Invention Agency Bill
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Consideration of Commons amendments

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

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2nd reading
Tuesday 23rd March 2021

(1 year, 4 months ago)

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This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Kwasi Kwarteng Portrait The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
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I beg to move, That the Bill be now read a Second time.

I should like to start my remarks by drawing attention to the much-celebrated work of Edward Jenner. I am sure that many of us appreciate his work. He is often referred to as the father of immunology; he was a British physician who created the world’s first vaccine. As I am sure all hon. Members know, he was an apprentice to a surgeon in Chipping Sodbury in the constituency of my hon. Friend the Member for Thornbury and Yate (Luke Hall). Mr Jenner essentially discovered immunisation. When we consider the coronavirus that has devasted our country and the world this year and last year, Jenner’s work takes on a particular resonance.

Thanks to the UK’s historic funding for research and the groundbreaking action of scientists at Oxford University, a British vaccine is once again helping us to return to a more normal life. It has shown us all the incredible benefits that breakthrough science and technology can provide. Building on our country’s proud history of wonderful inventions, I was particularly pleased to announce the creation of the Advanced Research and Invention Agency last month. I am sure that it will play a unique and exciting role in the UK’s research and development system.

The new agency will be characterised by a sole focus on funding high-risk, high-reward research. It will have strategic and cultural autonomy. It will invest in the judgment of able people, and it will also enjoy flexibility and a wide degree of operational freedom. I have spoken with many of our leading scientists, researchers and innovators and their message has been absolutely clear. I am convinced that these features will make ARIA succeed.

The creation of ARIA is part of a concerted action by this Government to cement the UK’s position as a science superpower. With £800 million committed to ARIA by 2024-25, the new agency will contribute extremely effectively to our R&D ecosystem. As set out in our policy statement published only last week, we have to give ARIA significant powers and freedoms and a mandate to be bold. To deliver that, we have introduced the ARIA Bill.

The Bill recognises that funding transformational long-term science requires patience and a high risk appetite. The Bill explicitly states that ARIA may give weight to the potential of significant benefits when funding research that carries a high risk of failure. This freedom to fail is fundamental to ARIA’s model, and the provision will empower its leaders to make ambitious research and funding decisions. When we look back in history, to the 1950s and 1960s, we see that with this approach a US agency called the Advanced Research Projects Agency developed GPS as well as the precursor to the internet.

The Bill will also signal a 10-year grace period before the power to dissolve the agency can be exercised. The agency will be focused exclusively, as I have said, on high-risk research. It requires patience and a laser-like focus as necessary conditions for success.

Aaron Bell Portrait Aaron Bell (Newcastle-under-Lyme) (Con)
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My right hon. Friend is making a strong case and refers to the work of the Vaccine Taskforce. In the past year, we have seen astonishing science conducted at breakneck speed because we have been in a crisis. Does he agree that for ARIA to work we need somehow to harness that sense of crisis and continue to use it in a normal period to get this sort of high-risk and high-reward research out and developed in Britain?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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The circumstances in which we have developed the Vaccine Taskforce have been really unfortunate, with this terrible pandemic, but the very thin silver lining around the cloud has been this remarkable vaccine rollout. My hon. Friend is right that ARIA needs to learn from what we have learned collectively from the vaccine rollout.

Our objective is for ARIA to fund research in new and innovative ways. The Bill provides the agency with significant powers that are necessary for it to perform its function.

Daniel Zeichner Portrait Daniel Zeichner (Cambridge) (Lab)
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The right hon. Gentleman says that the agency is modelled on the American example, but the American example very clearly has a client. Which is the client Department for this Bill?

Kwasi Kwarteng Portrait Kwasi Kwarteng
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Forgive me, I did not say that it was modelled on that example. I said that it was inspired, and I referred allusively, in my usual way, to historical precedent. I never said that it was modelled exactly on the American example. I am sure that the hon. Gentleman will make a fuller contribution to the debate.

Let me make some progress. Different funding methods obviously suit different projects. ARIA may seek to use seed grants. It will have inducement prizes. It may make its own investments in companies. All of these different approaches will drive innovation, and that will allow ARIA to target, for example, a Scottish university or a semiconductor start-up in Wales and to ensure that researchers across the UK can contribute to developing the key technologies for tomorrow.

ARIA will also have strategic independence. It will, as I have said, have the freedom to fail; it will have the freedom to take a long-term view and to experiment with new ways of funding the most ambitious research, which experience tells us is a necessary ingredient for some of the best results. A key part of this freedom will be trusting the leadership of ARIA to identify and decide on areas of research with perhaps the greatest potential. The Bill limits the ability for Ministers, as it should do, to intervene in ARIA’s day-to-day operations or to direct funding decisions. Instead, ARIA will have a highly skilled team of leadership programme managers who, supported by the board, will ensure strong strategic oversight over the portfolio of programmes. As the Bill makes clear, ARIA must have regard to the benefits of that research to the UK—to the people of this country—in terms of not only economic growth but trying to ensure that innovation can improve the quality of life of all our fellow subjects.

Our response to coronavirus as a nation has shown that agility is crucial in funding research in this fast-moving world. All of this work builds on action already taken by the Government and by UK Research and Innovation to reduce unnecessary bureaucracy in the wider ecosystem. We have learned from agencies such as DARPA in the US—the hon. Member for Cambridge (Daniel Zeichner) will be pleased to learn that—which has shown that we need to go several steps further in creating a culture that is primarily focused on pursuing high-risk research. There is a cultural need in such an organisation for autonomy and a measure of dynamism, which can be achieved through exceptional leadership and, perhaps most importantly, through a flat, streamlined structure.

ARIA will benefit from being a small and nimble agency. It will create a unique environment for its programme managers to be completely focused on their particular research proposal. The Bill therefore provides ARIA with some additional but proportionate freedoms, which are not generally found in the rest of our system. For example, it exempts ARIA from public contracting rules. That will allow ARIA to procure R&D services and equipment relating to its research goals in a similar way to a private sector organisation. To ensure that that process is transparent, it sits alongside a commitment in the Bill to audit ARIA’s procurement activities.

In order to further this research-intensive culture, ARIA has been given extensive freedoms. However, we will ensure, as the Bill does, that the organisation submits a statement of accounts and an annual report on its activities, which will be laid directly before Parliament. Those commitments to transparency will sit alongside the customary and necessary scrutiny by the National Audit Office.

It is clear that ARIA will be a unique and extremely valuable addition in our research landscape. It will create a more diverse, more dynamic and creative funding system, which will ensure that transformative ideas, wherever they may come from, can change people’s lives for the better.

I am very conscious that there is a huge amount of interest in this debate on the Back Benches on both sides of the House. I have committed myself not to go on for two hours or whatever the customary length of time might be. Having been a Back Bencher myself, I know that it is often frustrating to hear Front Benchers trench on parliamentary time. As a consequence, I hope that hon. and right hon. Members will agree that, as we build back better, we can have a full debate today about the merits of ARIA and its necessary existence. I hope that the Bill will show the Government’s strong commitment to building on a wonderful research base. On that basis, I commend the Bill to the House.

Eleanor Laing Portrait Madam Deputy Speaker (Dame Eleanor Laing)
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This is an opportune moment for me to give notice to people who are hoping to speak in the debate—those here in the Chamber, but particularly those at home who perhaps might not pick up the atmosphere and be tempted to do the opposite of what the Secretary of State has just said by taking rather longer than they ought to take. I am going to try to run this Second Reading debate without a formal time limit, in the hope that Members will act reasonably and unselfishly towards their colleagues, and keep their speeches to about five to six minutes, or less. I say this particularly to people who are at home, because I cannot nod to them or grimace at them to let them know when they have spoken for too long. Five minutes would be just about right for everyone who wishes to speak to have the opportunity to do so.

Edward Miliband Portrait Edward Miliband (Doncaster North) (Lab)
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Let me start by saying that across the House we share the admiration for British science. It is one of our most brilliant national assets, employing nearly 1 million people directly and generating extraordinary value for our country. As the Secretary of State eloquently said, the work on vaccines has been truly remarkable. We commend our scientists and everyone involved for their work. Indeed, I hope the Secretary of State will not mind my saying that it is a successful example of an industrial strategy; the right hon. Member for Tunbridge Wells (Greg Clark) probably shares my view.

I turn to the details of the Bill. I should say from the beginning that we support the Bill; we have some issues with it, but we certainly support its aims. I just want to say something about the wider context, because I found it slightly remarkable that the Secretary of State did not mention the fact that we are two weeks from the start of the next financial year but the scientific community does not know its budget, and the Government appear to be contemplating significant cuts to its programmes.

The Secretary of State said last week to the Science and Technology Committee, which is chaired by the right hon. Member for Tunbridge Wells, that the Government

“are talking the talk of a science superpower…but…we also have to walk the walk.”

Quite. We support the intent of the Advanced Research and Invention Agency, but hon. and right hon. Members across the House should be aware that while the ARIA budget is £800 million over this Parliament, UK Research and Innovation’s annual budget is £9 billion. Last week, UKRI published a letter confirming that the BEIS official development assistance allocation will lead to a £120 million gap between its allocation and the commitments that it has already made. It warned of cuts coming on that scale, and the House should be aware of where those cuts are going to be. Potential areas include climate change, antimicrobial resistance, pandemics, renewable energy and water sanitation. Those are the kinds of things that that funding addresses. Mr Cummings was also at the Select Committee meeting—I will return to him shortly—saying that ARIA would solve the problems of civilisation. That is all very well, but I fear that these cuts seem to be coming right here, right now; and we cannot launch a successful moonshot if we cut off the power supply to the space station.

The other fear that we have is that the threat of cuts does not end there, because there is no clarity on how to cover the huge cost of the UK’s ongoing participation in Horizon Europe programme. To be clear, this programme used to be funded not from the science budget, but from our EU contributions. I say to the Secretary of State that it surely cannot be right to take money from the science budget to fund our participation. He will know that there is real fear in the scientific community about that.

I will give the Secretary of State the chance to intervene: does he not agree that cutting the science budget to fund Horizon would be exactly talking the talk but not walking the walk? I will happily give way to him if he wants to tell us. Maybe he can tell us when we will get clarity—when will the scientific community get clarity on how the Horizon money will be funded? He does not want to intervene, but the science community deserves clarity. We support ARIA but it deserves clarity. These are people’s jobs. This is incredibly important work and I hope he is fighting with his friends in the Treasury as hard as he can to give people that clarity and avoid the cuts.

Edward Miliband Portrait Edward Miliband
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Maybe he is going to tell us the news.

Kwasi Kwarteng Portrait Kwasi Kwarteng
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The right hon. Gentleman will know from his years in government—appreciably, many years ago now—that these conversations with the Treasury are ongoing, and we hope to get a satisfactory result.

Edward Miliband Portrait Edward Miliband
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We shall look forward to the Secretary of State getting a satisfactory result. I am not sure that I always got a satisfactory result with the Treasury, although I was in the Treasury at one point, at least as an adviser. This is very important and, as I say, people’s jobs and livelihoods and the scientific base of this country, of which we are all so proud, depend on it.

Let me come to the Bill, which we support. The Bill is important—the Secretary of State said this—because there is incredible work going on in the scientific community, but there is consensus that there is a lack of a mechanism to identify, build and fund truly ambitious, high-risk, high-reward programmes. We recognise the case for an independent agency that operates outside the established research funding mechanisms, but we feel that the Bill requires improvement.

I guess our concerns cohere into a different view about the role of Government and the lessons of DARPA, which my hon. Friend the Member for Cambridge (Daniel Zeichner) talked about, on which in some broad sense—maybe not in the Secretary of State’s mind, but in others’ minds—ARIA is modelled. It is impossible to ignore what we might call the spectre of Dom in this debate. He was at the Science and Technology Committee—chaired by the right hon. Member for Tunbridge Wells—and he does rather hang over this Bill. He is its sort of governmental godfather. In his telling, DARPA’s success—I think this is important—is simply because the Government got out of the way and let a bunch of buccaneering individuals do what they liked. It is definitely true, as I understand it, that DARPA has important lessons about the need for the culture that I talked about, including higher reward and, of necessity, a higher chance of failure, but it is simply not true that DARPA was somehow totally detached from Government. DARPA had an obvious client—the Department of Defense—a clear mandate around defence-related research, a clear synergy in its work with the procurement power of the US DOD and, incidentally, abided by laws on freedom of information.

I want to suggest that there are two different views about ARIA: one is that we should let the organisation simply do what it wants, relying on the wisdom of a genius chair and chief executive; and the other subtler and, in our view, more sensible approach—one more consistent with the lessons of DARPA—is that Government should set a clear mandate and framework for ARIA and then get out of the way and not interfere with its day-to-day decision-making. I also believe there is a democratic case, because the priority goals for the spending of £800 million over this Parliament should be driven by democratic choices; not about the specific items that it funds, but about the goals and mission.

That takes me to the three points that I want to make: first, about the mandate for ARIA; secondly, about its position in the wider R&D system; and thirdly, about accountability. I will try to emulate the Secretary of State’s brevity—perhaps not exactly his brevity, but as much as I can.

The deputy director of DARPA says about its success that

“having national security as the mission frames everything.”

The Secretary of State said to the right hon. Member for Tunbridge Wells at the Science and Technology Committee:

“If I were in your position, I would be asking what the core missions of ARIA are.”

I think the point that Dominic Cummings made, or I am sure would have made, is that this will be a job for the people we hire who are running the organisation. The Secretary of State went on:

“It will be up to the head of ARIA to decide whether he or she thinks the organisation should adopt what the innovation strategy suggests…or reject it.”

I really understand the wish to give freedom to ARIA, but surely it is for Government to shape and not shirk the setting of priorities, and it is not just DARPA where we can learn that lesson. Moonshot R&D—the Japanese agency established in 2019 to fund challenging R&D—has seven specific moonshot goals set by the Japanese Government, and my understanding from the evidence taken by the Science and Technology Committee is that the UK scientific community agrees with that idea.

I notice the hon. Member for North East Bedfordshire (Richard Fuller) putting his head in his hands. He has done that before when I speak, but let me just make this point in seriousness: £800 million is not in the scheme of things a huge amount of money, certainly when compared with UKRI’s budget. The concern is that unless, as the Select Committee said, ARIA focuses on a single or a small number of missions, it will dilute its impact.

Take the net zero challenge. I believe it is a challenge of political will and imagination, but it is also a technological challenge. If it is the No. 1 international challenge, as the PM said last week, and if it is the No. 1 domestic challenge, as I think it is, why would it not be the right mandate for ARIA for at least its first five years? Indeed, Professor Richard Jones and Professor Mariana Mazzucato, who perhaps have even greater claims than Dom to being godfather and godmother of this idea, said that climate change would be an ideal challenge on which an agency such as ARIA would focus. To be clear, providing a mandate does not mean micro-managing decisions, and it would be grossly simplistic to suggest otherwise.

--- Later in debate ---
Amanda Solloway Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
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I, too, want to go, “Yay!”, because this has been an absolute pleasure. As the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said, we have seen the House at its best, and it is a great pleasure to take part in the debate. I listened to the fantastic contributions, and I thank all hon. Members for their thought-provoking input. Without exception, the debate indicates how essential and central science is to our economy and society. That has been recognised across the House, so I shall expand on how ARIA will build on the strengths of our R&D system.

The proposal to create the Advanced Research and Invention Agency—ARIA—has been welcomed by leading scientists, institutions, businesses and colleagues today. We have listened to agencies around the world, and consulted the research community at home. The hon. Member for Richmond Park (Sarah Olney) asked about that. We have, of course, considered carefully the recommendations of the Science and Technology Committee, brilliantly chaired by my right hon. Friend the Member for Tunbridge Wells (Greg Clark). I am confident that this is a bold, brave and positive step towards our ambition to cement the UK’s position as a science superpower. One of the things that we must be clear about is the way in which ARIA fits into the wider landscape and what it will achieve. My right hon. Friend and the hon. Member for Newcastle upon Tyne Central asked how we would define ARIA’s purpose, so let me set that out.

ARIA will fund high-risk, high-reward research in a different way from UKRI and the rest of the system. As my hon. Friend the Member for North East Bedfordshire (Richard Fuller) highlighted in his excellent contribution, ARIA will give us something genuinely different, drawing on the UK’s existing R&D strengths. In that way, it will reach fantastic people with brilliant ideas who are not currently funded.

There have been several questions about funding, but I think that the Secretary of State made the position clear. The right hon. Member for Doncaster North (Edward Miliband), my right hon. Friend the Member for Tunbridge Wells, my hon. Friend the Member for Havant (Alan Mak), and the hon. Member for Glasgow North West (Carol Monaghan) raised ARIA’s mission and what it should focus on. That is an important issue, and I have listened to the different views with great interest. Climate change has been suggested. The Government continue to invest in net zero, including through the £1 billion net-zero innovation portfolio fund announced as part of the Prime Minister’s 10-point plan. I should make it clear that ARIA’s programme will be motivated by a single clear ambition set by the programme manager. However, those decisions will be made by ARIA, and ARIA’s leaders will be responsible for strategic oversight of their programme portfolio. They will be able to speak to researchers, other funders and Government Departments to help to inform their judgment. There are UK funding programmes for which Ministers set the strategic direction, and ARIA has been set up specifically without those constraints.

The hon. Member for Cambridge (Daniel Zeichner) and my hon. Friend the Member for Rugby (Mark Pawsey) asked about the need for ARIA to have a specific customer. ARIA’s groundbreaking work will absolutely draw partners for its projects and programmes, but we want to leave the door open for it to be able to forge those relationships across a range of sectors.

The hon. Member for Aberdeen South (Stephen Flynn), the hon. Member for Richmond Park and my hon. Friend the Member for Rugby asked about recruitment and ARIA’s culture. I recognise how crucial that that will be for ARIA, which is why we will recruit a CEO to provide the creative, inspiring leadership that the organisation needs—someone uniquely able to build a team of high-performing people. That will not be on a whim. We will conduct a genuinely open and fair recruitment process for a CEO and chair.

The hon. Members for Aberdeen South and for Glasgow North West asked about the oversight that Government will have. The hon. Member for Midlothian (Owen Thompson) queried the way in which we will hold ARIA to account. They are absolutely right that ARIA will be at a greater distance from central Government than we are used to. That is a deliberate move based on international experience. The evidence suggests that freedom and autonomy is what makes this kind of agency work. I am mindful of the effective governance of ARIA, which is incredibly important, but it must be tailored to ARIA’s objectives if we are to get the balance right—and it is about balance. There are powers in the Bill for the Secretary of State to intervene on issues of national security and to introduce additional procedures to measure conflicts of interest. They sit alongside powers to make non-executive appointments to the board, which will of course include the Government chief scientific adviser in an ex officio role. The arrangements are robust.

The right hon. Member for Doncaster North and the hon. Member for Airdrie and Shotts (Neil Gray)—whose final speech was commendable; I wish him the very best—raised the Freedom of Information Act. ARIA will have a very small number of staff, and because of the load that FOI requests would place on the organisation we do not think they are the right way to provide scrutiny. I remind Members that the Departments and public authorities that work with ARIA will of course be subject to FOI requests. There will be other statutory commitments to transparency. The Bill makes it clear that ARIA will be required to produce an annual report on what it does, which will be laid before Parliament alongside its accounts.

The hon. Members for Aberdeen South and for Airdrie and Shotts also spoke about procurement. The Bill exempts ARIA from the obligations on a contracting authority in the public contract regulations, but procurement decisions will be taken by ARIA, not by Ministers. It is because it is one step removed from Government that the exemption will empower ARIA’s talented programme managers and directors. Again, the freedom to act quickly will be balanced by the requirement for ARIA to audit its procurement activities, as set out with the Department in the framework document.

The hon. Members for Cambridge and for Airdrie and Shotts, my hon. Friends the Members for Bolton North East (Mark Logan) and for Bolton West (Chris Green), and many other Members made representations on ARIA’s location. I recognise that they care passionately about the scientific excellence found in all parts of Bolton, Cambridge, Airdrie and, of course, right across the UK, but ARIA will be run by a small number of people and will have a small physical presence, and the potential candidates to be its CEO and chair will have a strong interest in the location of the headquarters. I cannot commit to a specific location at this stage, but if ARIA is to deliver UK-wide economic benefits, it should, like UKRI, function and deliver on a UK-wide basis. Stakeholders in the devolved nations—such as Universities Scotland—have been clear in their support for that approach.

Let me finish by thanking Members from all parties for their rich and considered contributions. My door is always open and I invite any Members who wish to discuss the Bill with me further to do so. We must remember that the United Kingdom is a hotbed of brilliant invention and innovation. The Secretary of State spoke about our proud history of scientific excellence, which I am confident the creation of ARIA will help to safeguard far into the future.

In the previous century, the US ARPA funded the ambitious research that underpins the internet and GPS—technologies that have transformed our lives, opened countless avenues of inquiry and created extraordinary value. Such successes do not happen overnight or by accident; they all start with a wild ambition that is nurtured into reality against all the odds. It is this ambition that will course through the veins of ARIA’s staff and the talented researchers they fund. As Science Minister I have listened to many inspiring scientists and inventors, and it is now my ambition to give their brilliant ideas the best possible chance to profoundly change lives and the lives of our grandchildren—and of my granddaughter—for the very better. I wait with excited anticipation for the remaining stages of the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Advanced Research and Invention Agency Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Advanced Research and Invention Agency Bill:

Committal

(1) Public Bill Committee shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 27 April 2021.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Third Reading No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(David Rutley.)

Question agreed to.

Advanced Research and Invention Agency Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Advanced Research and Invention Agency Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Secretary of State.—(David Rutley.)

Question agreed to.

Advanced Research and Invention Agency Bill (Carry-over)

Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),

That if, at the conclusion of this Session of Parliament, proceedings on the Advanced Research and Invention Agency Bill have not been completed, they shall be resumed in the next Session.—(David Rutley.)

Question agreed to.

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Report stage & 3rd reading
Monday 7th June 2021

(1 year, 2 months ago)

Commons Chamber
Report stage Page Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 7 June 2021 - (7 Jun 2021)

This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Amanda Solloway Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
- Parliament Live - Hansard - - - Excerpts

It is a pleasure to be here on this special occasion, and not just because, as my hon. Friend the Member for Guildford (Angela Richardson) pointed out, it was a very special birthday yesterday—40. [Laughter.]

I thank all right hon. and hon. Members who have tabled amendments and new clauses, and who have contributed today.

The UK has a world-class science system, and a proud history of research and invention. Today, in our continuing fight against coronavirus, the importance of those skills has never been more apparent. What is it that makes ARIA so special? It is the fact that we are strengthening our science system, enhancing our capabilities and finding a new level of ambition. That means that it will be a small, agile organisation with autonomy from Government and unique powers that equip it to support groundbreaking ideas, with the potential to profoundly change all our lives for the better.

The Bill brings forward a bold and ambitious policy that seeks to deliver the transformational benefits of high-risk R&D for our economy and society. I have spoken to many colleagues who share my genuine excitement about the possibilities that ARIA could bring. We have heard on the Floor of the House and in every previous debate that all parties support the principle of ARIA and what it will try to achieve. I am glad that today we are able to give ARIA the focus that it deserves.

A focus of today’s debate that has been raised by the hon. Members for Newcastle upon Tyne Central (Chi Onwurah), for Cambridge (Daniel Zeichner) and for Aberdeen North (Kirsty Blackman), among others, has been giving ARIA a primary research topic, through new clauses 2 and 3, and amendments 1 and 12. Given the challenges that we face today, those amendments understandably focus on climate change and health. Nobody in the House should have any concerns about the Government’s credentials on tackling climate change. We are proud to be the greenest Government ever. The Prime Minister’s 10-point plan and our COP26 presidency, to which the hon. Member for Aberdeen South (Stephen Flynn) referred, are demonstrating that at home and abroad, the UK is leading efforts to accelerate action on climate change.

Without doubt, the covid pandemic has clearly illustrated the critical role that R&D plays in the health and wellbeing of our population. Our vaccine roll-out is the envy of the world. The Government already invest around £2 billion annually in health and care research in the UK. It is therefore right that such priorities are taken forward by Government Departments and agencies, with clear direction and involvement from Ministers. That includes the important role that UKRI plays in delivering Government priorities for R&D. We do not want to duplicate those responsibilities.

Instead, as many colleagues have put it much better than I could, ARIA must make its own distinct contribution to be effective. That means being an organisation led by brilliant people with strategic autonomy—not directed by Ministers. The continued chopping and changing of ARIA’s mission set out in amendment 12 would hamper ARIA’s ability to commit to long-term programmes.

New clause 3 also seeks to impose obligations on ARIA regarding the transition to net zero. ARIA is covered by the Government’s existing net zero commitments and will be required to make information available through the Environmental Information Regulations 2004, which were mentioned by the hon. Member for Hammersmith (Andy Slaughter).

I turn to the contribution of the hon. Member for Oxford West and Abingdon (Layla Moran) on the role of Parliament. Amendments 3 to 6 would require the proposed chair and CEO of ARIA to be approved by both Houses of Parliament. Amendment 11 would require the Commons Science and Technology Committee to approve appointments by the Secretary of State and the remuneration of the appointees. I am extremely pleased that the recruitment campaign for the CEO was launched on 1 June and that we will launch the campaign for the chair on 5 July. All applications will be reviewed by an outstanding expert panel, which will include the Government’s chief scientific adviser, Sir Patrick Vallance. The Government’s guidance sets out that the ultimate responsibility for appointments rests with Ministers who are accountable to Parliament, as is the case with UKRI. There is no precedent for requiring the approval of both Houses for appointments.

I am grateful for the contribution that the Science and Technology Committee, chaired by my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has made on this issue. However, I guarantee that this is an open, fair and robust recruitment process, and it is completely appropriate to find the right people to make ARIA a success. Amendment 9 would require ARIA to provide the Science and Technology Committee with the information it requests. The Osmotherly rules provide guidance on how Government bodies should interact with Select Committees, and they are clear that such bodies should be as helpful as possible in providing accurate, truthful and full information when giving evidence. I believe that that is sufficient to ensure a co-operative and constructive relationship between ARIA and the relevant Committees.

Amendment 10 would require the Secretary of State to consult the Committee before dissolving ARIA. Clause 8 already sets out the broad requirement on the Secretary of State to consult any persons they consider appropriate, and I am sure they will always consider it appropriate to consult the Science and Technology Committee about changes to the R&D landscape. The Secretary of State’s power to dissolve ARIA is subject to the draft affirmative procedure, which will ensure that Parliament has the opportunity to debate that decision.

Amendments 7 and 8 tabled by the hon. Member for Aberdeen South and amendment 14 tabled by the hon. Member for Newcastle upon Tyne Central seek to remove the exemption from the public contracts regulations and to subject ARIA to the Freedom of Information Act 2000. We have covered procurement extensively before, and I will reiterate why the exemption is so important. There are three key points.

First, ARIA is expected to commission and contract others to conduct research in pursuit of its ambitious goals. Often, ARIA will procure research services. That commissioning and contracting is a fundamentally different way of funding R&D to traditional grant making, and procurement rules do not apply. Secondly, this way of funding research is core to DARPA’s approach—the successful US model from which we learned when designing ARIA. As we heard in Committee, DARPA benefits from what is described as “other transaction authority”, which offers flexibility outside standard US Government contracting standards. By taking that innovative new funding approach that is so fundamental to its objectives, ARIA will benefit from similar flexibilities.

Let me turn to amendments 8 and 14. ARIA is about creating a certain culture of funding and groundbreaking research, as I heard time and again throughout my engagement with the R&D community. As my hon. Friend the Member for North East Bedfordshire (Richard Fuller) put it so eloquently, that kind of culture is difficult to achieve within all the rules that would usually apply to public bodies. We have thought carefully about alternative ways to ensure that high standards of conduct are upheld within this unique context.

The Bill requires ARIA to submit an annual report and statement of accounts, which will be laid before Parliament. ARIA will be audited by the National Audit Office and will be subject to value-for-money assessments. ARIA will interact with Select Committees in the usual way, and it will draw up a framework document detailing its relationship with BEIS. There will be further reporting requirements, such as the details of what is published in the annual report. Together, those provisions will ensure that the public are informed of ARIA’s activities and where it spends its money. Although the Freedom of Information Act 2000 allows for exemptions in certain circumstances, the request must still be processed, and that administration runs contrary to the lean and agile operation of ARIA.

I turn to amendment 2 on conflicts of interest. Schedule 1 allows the Secretary of State to make regulations

“about the procedures to be adopted for dealing with conflicts of interest”.

The framework document between BEIS and ARIA will commit ARIA to the code of conduct for board members of public bodies, which includes the obligation to publicly declare any private financial or non-financial interests that may or may not be perceived to conflict with one’s public duty. This principle-led, non-legislative approach is appropriate. It is the standard approach taken by many other arm’s length bodies, including UKRI, and I have no reason to believe that it is inadequate here. In addition, we have the existing reserve power in schedule 1, should it ever prove necessary.

On the issue of human rights, I recognise the intent behind new clause 1. Human rights are already protected in law in the UK through the Human Rights Act 1998, and ARIA will be subject to public authority obligations under that Act. I therefore reassure the hon. Member for Aberdeen South that ARIA will operate in a way that is compatible with the convention on human rights. It would be unlawful for it not to do so under existing legislation.

Amendment 13 would require details of ARIA’s geographical impact to be included in its annual report. I believe that it is incredibly important that ARIA’s funding benefits those who are not always reached by the current system. That is the Government’s policy and priority, as well as a priority for me personally. The R&D place strategy, due to be published this summer, will set out how R&D will contribute to our levelling-up ambitions. Details of ARIA’s operation will be set out more fully in a future framework document, and that is the appropriate place to stipulate the contents of ARIA’s annual report, including geographical information, rather than legislation.

Jim Shannon Portrait Jim Shannon
- Parliament Live - Hansard - - - Excerpts

The Minister is being generous with her time tonight. In my contribution, I was very keen, as were others, to ensure that all the levelling-up that the Minister refers to will happen in the regions as well—in other words, that Northern Ireland will get its share. It is important, as part of the United Kingdom of Great Britain and Northern Ireland, that we all benefit. May I seek her assurance that that will be the case?

Amanda Solloway Portrait Amanda Solloway
- Parliament Live - Hansard - - - Excerpts

Of course, I give my assurance that we will issue the place strategy shortly, which will indicate all of this.

I am very grateful for the contributions that right hon. and hon. Members have made today. The interest in the passage of the Bill in the House and in the R&D community is testament to the important role that ARIA will play in our future R&D landscape, creating a space in the system that is free to fund groundbreaking science in innovative ways, independent from ongoing Government intervention.

This is an incredibly significant moment, because the opportunity that ARIA affords us is truly limitless. By unlocking a new level of ambition, and by enabling truly bold and adventurous ideas to flourish, ARIA will allow us to take a huge leap into the future. Yes, this will mean embracing the unknowns that come from ARIA being free from Government control, but we should make that leap confidently, knowing that the brilliant people that ARIA will fund will change the world in ways that none of us in this Chamber would dare to imagine today. This is therefore a truly exciting time for all of us here in the Chamber—for ourselves, for our children and for our grandchildren—and I feel particularly excited for my young granddaughter, who will feel the benefits of the major breakthroughs that we will unlock through this Bill. I am sure that this opportunity is recognised by all hon. Members.

I hope that I have demonstrated the reasons that I cannot accept the new clauses and amendments that have been tabled, and I hope that Members will agree not to press them.

Stephen Flynn Portrait Stephen Flynn
- Hansard - - - Excerpts

Madam Deputy Speaker, you will be glad to know that my final remarks will be brief, particularly because although we were expecting a rebellion tonight, I did not expect it in any way, shape or form to relate to any of the amendments that I proposed, which is disappointing. Maybe next time—we can only live in hope.

There are two clear and fundamental issues to do with the Bill on which we disagree with Government Members: where they are passionately and vehemently against public scrutiny, and where they are passionately and vehemently against ARIA having a mission. I believe the lack of a mission is a missed opportunity, and I am deeply concerned to hear that public scrutiny in the shape of an FOI request is regarded as an impediment to a public organisation. That should strike fear into all of us about what public money is to be spent on, not just now but in the future.

With your indulgence, Madam Deputy Speaker, I beg to ask leave to withdraw the motion on new clause 1, but I wish to press amendment 1, which stands in my name and that of my hon. Friend the Member for Aberdeen North (Kirsty Blackman), to a vote.

Motion, by leave, withdrawn.

Amendment proposed: 1, in clause 2, page 1, line 7, at end insert—

“(A1) ARIA’s primary mission will be to support the development of technologies and research that support the UK’s transition to net zero carbon emissions or reduce the harmful effects of climate change.”—(Stephen Flynn.)

This amendment sets the primary mission for ARIA to support the development of technologies and research that support the UK’s transition to net zero carbon emissions or reduce the harmful effects of climate change.

Question put, that the amendment be made.

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20:30

Division 19

Ayes: 263


Labour: 197
Scottish National Party: 42
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alba Party: 2
Alliance: 1
Green Party: 1

Noes: 364


Conservative: 356
Democratic Unionist Party: 7

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
20:40

Division 20

Ayes: 263


Labour: 195
Scottish National Party: 45
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alba Party: 2
Alliance: 1
Green Party: 1

Noes: 364


Conservative: 354
Democratic Unionist Party: 7

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
20:49

Division 21

Ayes: 263


Labour: 197
Scottish National Party: 45
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alba Party: 2
Alliance: 1
Green Party: 1

Noes: 364


Conservative: 354
Democratic Unionist Party: 7

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
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Kwasi Kwarteng Portrait The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
- Parliament Live - Hansard - - - Excerpts

I beg to move, That the Bill be now read the Third time.

When it comes to the future of the United Kingdom, this Government are unapologetically ambitious, and one of our greatest ambitions is to secure the UK’s position as a science superpower. Through this Bill to create ARIA, a new agency to support the most ambitious research, we are really focusing on delivering on that agenda.

The Bill provides ARIA with broad functions and powers to take an innovative approach to funding high-risk R&D so that each programme manager can provide effective funding to their talented research team. Critically, the Bill allows a balance between oversight of ARIA’s activities and the independence and autonomy that the evidence tells us is so important for its success.

The Bill creates an agency with a unique role to play and the capabilities it needs to do so. ARIA will sit alongside UKRI and other funders in our R&D landscape. It will provide something additional and complementary, and I believe that its offer will indeed significantly improve the UK’s research and development offer in the long term.

I am grateful that today’s debate has focused on making the most of this ambitious new agency. I would like to recognise the efforts of those across the House and in my Department who have got us to this point. I thank the Science, Research and Innovation Minister, my hon. Friend the Member for Derby North (Amanda Solloway). I know that she celebrated her 30th birthday yesterday, and I congratulate her on having achieved this signal success and that significant milestone. I am delighted that she should be such a focused colleague and have delivered what is a really important piece of legislation. I also thank the Bill team for their work at each stage of the proceedings, and parliamentary counsel for drafting such an admirably concise and, dare I say, elegant Bill.

As we continue our progress towards a more normal way of working in this place, I would like to thank everybody who, in the meantime, has ensured that our proceedings have been able to continue with minimal disruption despite these exceptional circumstances. I would like to place on record that you, Madam Deputy Speaker, and all the House staff and your colleagues have done a remarkable job in keeping the lights on—so to speak—and making sure that we progressed in a very expeditious and calm way through these proceedings and through previous stages of the Bill. Everything has been to order, Madam Deputy Speaker.

I also thank the members of the Public Bill Committee from across the House for their extremely constructive and welcome approach to scrutinising the Bill. I particularly thank the Chairs of those Committees: the hon. Member for Bradford South (Judith Cummins) and my right hon. Friend the Member for Tatton (Esther McVey), as well as my hon. Friend the Member for Kettering (Mr Hollobone) and the Member for Halton (Derek Twigg).

I also thank a number of speakers on the Government Benches. I am referring only to the speeches that I saw myself . My hon. Friend the Member for Ynys Môn (Virginia Crosbie) gave a very positive account of why this Bill is so important to her constituents. My hon. Friends the Members for Guildford (Angela Richardson), for North Norfolk (Duncan Baker), who is not in his place, for Newcastle-under-Lyme (Aaron Bell) and others did a remarkable job in presenting the case for ARIA and in ensuring that the Bill proceeded smoothly.

I would also like to thank a number of Opposition Front-Bench speakers. When I saw her speak, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) gave a customary expert and well-considered view. We have our differences and disagreements, but no one, I think, can doubt her sincerity. I thank the SNP spokesman, the hon. Member for Aberdeen South (Stephen Flynn). I am sorry that the rebellion that he anticipated was not as dynamic as he would have liked, but there you go.

Everybody really has supported the principle of this legislation and the creation of ARIA. While we do not agree on all the details, I think that everybody has brought to the debate a spirit of constructive inquiry and scrutiny, and we have greatly appreciated that.

I am confident, Madam Deputy Speaker, that, as the Bill continues its passage, our parallel progress to realise ARIA and to make it happen will elicit further debate and further questions. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Derby North, said on Second Reading, and as we have heard again today, the UK is home to brilliant invention and innovation, and we should be able to shape ARIA in a way that can deliver on that promise. The creation of ARIA will, I firmly believe, make our outstanding UK R&D system even stronger and more dynamic, more diverse, and it will help us to innovate and level up across the country. On that very firm basis, Madam Deputy Speaker, I am delighted to commend the Bill to the House.

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

Read Full debate

This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That the Bill be read a second time.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, the Advanced Research and Invention Agency Bill creates a new funding agency, ARIA. ARIA will support ambitious programmes of research and innovation, seeking the scientific and technological breakthroughs that transform the lives of people across the UK and around the world. It will further diversify and strengthen our UK funding landscape, which is appropriate at a time when public investment in R&D is increasing to £20 billion in 2024-25 and concerted action is being taken across Government to reinforce the position of the UK as a science superpower.

Our science system already benefits from a variety of funding streams: government spending through UKRI programmes such as the Strategic Priorities Fund, investment from businesses small and large, and charitable sources such as the new Wellcome Leap. That plurality is a strength that we are seeking to build on with ARIA. I therefore emphasise at the start that the motivation for ARIA’s creation is to innovate how research is funded, rather than any specific topics or areas which need investment. It is about enabling a new programme-led approach to public R&D funding, optimised for high-risk research—new for the UK, that is, as we have learned from the tremendous successes of this funding model around the world, mostly from the United States, which many noble Lords will of course be familiar with.

I emphasise the two core features of this approach: first, the expectation that the full benefits will be felt only over the long term, which therefore requires patience; and secondly, that for every programme that produces transformational benefits many will not, which requires a fairly unique attitude towards failure. The research community has been clear, in providing evidence and through engagement, that it wants to see these realities of the research process reflected in the new funding body. I hope that these issues similarly resonate with many noble Lords who are concerned with research and its funding. These features are central to the approach that we are seeking to take with ARIA.

Before expanding further on the role that ARIA will play, I must emphasise the existing excellence of the UK’s R&D system. Although the Government have engaged with and sought to learn from similar agencies in other countries, ARIA must be designed sensitively to the UK’s unique context. That means not copying wholesale from elsewhere, or blindly replicating features that might in some places be successful, without carefully considering the fit with the UK system. It also means remaining conscious of the scale of this new agency. ARIA’s £800 million budget is significantly less than 2% of overall UK R&D spending.

Looking at that total spending, ARIA represents a small addition at the high-risk end of the spectrum and is equipped to take a unique approach to supporting that type of research and development. Viewed through that lens, one important point should be clear: ARIA will complement rather than compete with the system-wide responsibilities of UKRI—the steward of our overall research landscape. Indeed, those responsibilities remaining firmly outside of ARIA’s remit goes hand in hand with the autonomy and freedom that we expect it to have.

ARIA is not an institution for responding to the day-to-day priorities of government, whether specific strategic challenges, or the Government’s desired balance of research, development and commercialisation activities. ARIA’s clear remit will be to pursue programmes of research focused on realising specific objectives that have the potential to produce transformative, long-term benefits. These objectives must be set by programme managers with deep technical expertise and brilliant ideas, who are empowered to pursue those objectives with a variety of tools and a single-minded focus and to fund research and innovation projects through contracting and granting in businesses, universities and elsewhere, drawing those contributors and their outputs together to realise their objectives. They must be free to do so, in the expectation that a small proportion of projects will in time lead to things that are truly extraordinary.

Taking this approach requires trust in the good that comes from investment in this type of R&D—the high-risk, long-term and difficult to measure, which we have clearly and repeatedly heard could be better provided for. But it is not only a matter of trust; the evidence for this R&D investment and its spillover benefits is compelling. Research suggests that while the annual private rate of return from R&D and innovation averages 20% to 30%, the social returns are two to three times higher.

Although ARIA will be specialised and—by taking a new approach—something of an experiment in how we fund UK R&D, it should be one that the whole system learns from. Aspects of ARIA’s unique approach might successfully be applied to other UK R&D funders, and I expect the potential benefits of that to act as an incentive for close integration with the wider research system, which will be so advantageous both for ARIA and other actors.

This Bill—and the creation of ARIA—aligns us with many other countries using the funding model that I have outlined. From the US to Japan and Germany, this programmatic approach to supporting the most ambitious research goals has been deployed, in some cases with extraordinary success, and it is entirely appropriate that at this point we seek to apply it through ARIA to benefit UK science, research and innovation.

I will now move on to the specific provisions of the Bill and set out how the key clauses relate to the ambition and approach that I have just described. I will first address ARIA’s functions, as detailed in Clause 2. ARIA is expected to primarily operate as a funder of others, which is reflected in its functions to

“do, or commission or support others to do”.

It is not restricted to operate at a particular point on the technology readiness level spectrum; indeed, individual programmes may require a mixture of projects that seek to solve fundamental science challenges alongside work to develop and apply existing knowledge in new contexts. This is reflected in Clause 2(1), which places development and exploitation alongside the conducting of scientific research. The range of financial support that ARIA can provide is expressly broad. This equips programme managers to tailor the funding that they provide so that it is appropriate to the specific recipient and project. This is essential in supporting a broad—even unexpected—coalition of researchers and organisations, and ensuring the diverse input that is known to be so beneficial in solving difficult scientific problems. The unexpected collaborations and high degree of interdisciplinary work that we expect this to support is one of the most compelling features of the programme-led ARIA model.

Clause 3 gets to the very heart of ARIA’s approach. Implicit in pursuing high-risk research and ambitious programme goals must be recognition that many projects and programmes will not fulfil their stated aims. The risk of failure is high, and that must be accepted from the outset if ARIA is truly to be equipped to tackle the most difficult challenges, with ground-breaking implications. Clause 3 states that ARIA may give particular weight to those ground-breaking benefits when supporting R&D activities which, almost by definition, carry a high risk of failure.

This is a valuable approach for two reasons: first, because of the transformational benefits of success in this arena—the scale of impact of technologies such as the internet, GPS or mRNA vaccines, all supported by the US DARPA, is difficult to overstate; and secondly, because of the spillover benefits that can accrue even from unsuccessful projects, such as collaborations and approaches that would not otherwise have existed, or progress that later proves vital for fields or problems unrelated to the original programme.

I turn now to the role of the Secretary of State, which is addressed in Clauses 4 and 5 and in Schedule 1. It is also notable by the provisions that the Bill does not contain. I have already spoken about ARIA’s need for autonomy, and on that basis, the role for the Government in its ongoing affairs must be limited. The provisions in Clauses 4 and 5 of the Bill represent a baseline to ensure ARIA’s operation, allowing funding to be provided and issues of national security to be addressed. The public money provided to ARIA requires an appropriate level of oversight and, accordingly, there are provisions to ensure core tenets of good governance in Schedule 1. This includes the Secretary of State’s power to appoint non-executive directors and the reserve power to introduce conflict of interest procedures should it prove necessary in future. However, there is no power for the Secretary of State to require a strategy, no specific power of direction over ARIA’s allocation of expenditure, and the Secretary of State’s information rights are deliberately limited to the exercise of their functions with respect to ARIA.

In these matters we have sought to strike a balance between protecting ARIA’s strategic and operational autonomy, which is essential to its remit, and providing sufficient assurances for the important role with which it is to be entrusted. This difficult-to-strike balance has been a theme of much debate on the Bill so far, and I have no doubt that that will continue to be the case in our House.

Continuing this theme, I will speak briefly on the exemptions the Bill affords ARIA from standard public sector obligations around procurement and freedom of information. There are practical and operational reasons for both. Exempting ARIA from the Public Contracts Regulations’ contracting authority obligations is a result of its fundamentally different way of operating compared to our other core public R&D funders. We expect ARIA not only to give grants but to commission and contract others to carry out research. The exemption ensures that ARIA can procure services, goods and works related to its research goals at speed in a similar way to a private sector organisation. This mirrors the successful approach taken by DARPA, which benefits from other transactions authority, giving it the flexibility to operate outside US government contracting standards.

On FoI, the pertinent question to me is where we want ARIA’s staff to direct their focus. Earlier, I spoke about people with deep technical expertise and brilliant ideas who are empowered to pursue their objectives. I believe that of course that should apply to all ARIA staff and that this ambition is the last thing we should move away from if we want this organisation to succeed. In this unique case, I do not think those people should be employed to administrate FoI requests. This approach should be viewed in the light of ARIA’s other statutory commitments to transparency through its reporting and accounts, subject to scrutiny by the NAO, and with the natural incentives towards openness of having an identity to build and collaborators to attract.

Returning finally to the purpose of the Bill before us, it is right that we recognise the existing excellence of our R&D system and that we add to it only in a considered way. However, I believe we should also allow ourselves to consider the possibilities in doing so and challenge ourselves on whether we could do more, or better, in the ways we support UK science and innovation. The creation of ARIA, through this Bill, is an exciting addition to our research landscape, but it is also a judicious one, rooted in historic successes, drawing on international best practice and responding to the current needs of UK researchers. I beg to move.

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Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

I thank all noble Lords who contributed for their engaging and, I thought, in general, very constructive contributions to the debate today. Many noble Lords made excellent points, and I will attempt to answer as many of their questions as possible.

Today’s debate, on a tripartite basis, demonstrates a shared passion to foster the UK’s world-class research base. Ensuring that the UK is the best place in the world for scientists, researchers and entrepreneurs to live and work is at the heart of the R&D road map. Despite the small criticisms raised by the Opposition Front Bench, there was generally commitment from all three main parties and from the Cross Benches to those objectives. It is central to the Government’s plan to build back better, and an integral commitment which last week’s spending review and Budget showed.

It is thanks to our dynamic research landscape that we have responded so robustly to the Covid pandemic, as my noble friend Lord Bethell so helpfully reminded us. The challenges that we have faced show just how important it is that we always remain on the front foot of research and development. And, as set out in the UK Innovation Strategy this summer, this can only be achieved through a rich and diverse research and innovation ecosystem.

I now turn to the specific points raised by noble Lords in some of their very good speeches. My noble friend Lord Bethell, and the noble Lord, Lord Ravensdale, asked good questions about why the Government will not be setting a research focus for ARIA’s activities. At her appearance during this Bill’s Committee stage in the other place, the chief executive officer of UKRI, Professor Dame Ottoline Leyser, spoke about how

“the priorities that the Government and Ministers set to solve particular challenges for the nation … fall very much within the UKRI remit”.—[Official Report, Commons, Advanced Research and Invention Agency Bill, 14/4/21; col. 8]

The Government’s innovation strategy also set out our commitment to establish a new missions programme to tackle some of the most pressing challenges confronting the UK in the coming years. These will be decided by the National Science and Technology Council, chaired by the Prime Minister, in due course. Through these new mechanisms, this Government are taking a revised, strategic approach to assessing and funding our national scientific priorities. It would clearly be inappropriate to create another new body to do essentially the same thing. To reach new, brilliant people and ideas, we must diversify our ways of funding research, and I welcome the support of my noble friend Lady Neville-Rolfe on this point. Clause 2 sets out how ARIA could achieve this, offering a broad range of support to R&D and—in response to my noble friend Lord Borwick—we do not expect it to offer prizes as understood in a common sense. What “prizes” refers to in this context is better termed as research competition, where multiple teams of scientists attempt to solve essentially the same problem.

The noble Lords, Lord Patel and Lord Davies of Brixton, asked about ARIA’s scope and objective. The noble Lords, Lord Clement-Jones and Lord Ravensdale, also asked about the technologies which ARIA would fund. The Bill sets out ARIA’s functions, and in the policy statement we have also set out its design principles. But to uphold the autonomy which is at the heart of this new agency, only ARIA’s leadership itself can be responsible for specifically setting out its strategy and its funding priorities. It is not a blank cheque, as the noble Lord, Lord Fox, has suggested.

The noble Lord, Lord Rees of Ludlow, in his contribution asked whether what we are trying to achieve through ARIA could be delivered through UKRI. I reassure the noble Lord that, in designing ARIA, we carefully considered all delivery options to optimise its chances of success. The noble Lords, Lord Clement-Jones, Lord Kakkar and Lord Broers, also asked about how we make sure that ARIA will work hand in hand with UKRI and the wider research landscape. Of course, while we are diversifying our system, it will only work if it is cohesive. It is not always necessary to legislate for these sorts of relationships. Communication, openness and trust are things which ARIA’s leaders will need to have not just with UKRI but with other stakeholders across the entire ecosystem. We have been looking for exactly these qualities in our recruitment of ARIA’s CEO. I pay tribute to the creation of UKRI and the bringing together of the research councils and Innovate UK under one umbrella, a point that was noted by the noble Viscount, Lord Stansgate. His was an excellent contribution, and I hope we can look forward to further from him on this subject.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
- Hansard - - - Excerpts

My Lords, I thank the Minister, and would like to invite him and the Government Whips to approach Hansard and ask them to publish in italics the half of my speech which had to be cut.

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Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I am sure it was equally as good as the first half of his speech and that the Whip has taken careful note. It is a principle of our Committees that we try not to have the same speeches we got at Second Reading made again—a point most Members tend to ignore—so the noble Lord is well positioned to make a new contribution in Committee. Most other Members could perhaps take note of the excellent example that he will be setting them.

I also recognise the sentiment of the noble Lord, Lord Rees of Ludlow, that the setting up of UKRI was not that long ago in the grand scheme of things. With an £8 billion budget, UKRI has system-wide responsibilities and with this comes a certain operating model. I refer the noble Lord, Lord Fox, to Professor Leyser’s other comments, where she said at her select committee appearance that UKRI’s responsibility to make the whole system work sometimes makes it harder to do the wild experimental things.

In contrast, as enabled by Clause 3 of the Bill, which has been the focus of a number of contributions from noble Lords, it is ARIA’s mandate to do the experimental things and push the frontiers of science. To achieve this, it must have a streamlined structure and minimal bureaucracy. In response to the noble Lord, Lord Rees, this goes beyond what is possible or desirable under the legislative framework and governance arrangements in place for UKRI as the system’s core funding agency.

In reply to the question put by the noble Lord, Lord Fox, as part of any Parliament it is usual to review our partner organisations to ensure that they are successfully fulfilling objectives on the Government’s behalf. The independent review of UKRI to which the noble Lord referred began yesterday under the leadership of Sir David Grant, and it will be reporting to Ministers in due course.

The noble Lord, Lord Rees, also mentioned a very important point about how ARIA’s success will be measured without constraining creativity. There are is a key point I would like to put to the noble Lord here. One of the key features of the ARIA model is its hands-on approach to project management, with projects constantly being re-evaluated and reassessed. ARIA’s agility means that programmes can not only start quickly, but they can also be halted quickly too. ARIA should not be judged on projects that fail in the short term because that is the nature of high-risk research.

The noble Lord, Lord Kakkar, in one of his typically excellent contributions, asked about how ARIA can truly be risk taking as a government arm’s-length body. We will have both legislative and non-legislative mechanisms to enable ARIA to operate boldly and autonomously. Clause 3 in the Bill equips ARIA to give particular weight to the potential benefits of high-risk research in carrying out its functions—not just what research it funds, but how it funds it. We will also set out in a future framework document and other agreements, a unique and specific set of financial and non-financial arrangements to cut unnecessary bureaucracy and ministerial control from ARIA’s operations. I hope that will also allay the concerns raised by the noble Lords, Lord Patel and Lord Broers, on protecting ARIA from day-to-day political pressure. The independent review of research bureaucracy being led by Professor Adam Tickell will also consider bureaucracy from a system-wide perspective. Interim findings will be produced this autumn, and we are expecting a final report to follow in early 2022.

In terms of governance, the noble Lord, Lord Patel, asked who the senior Minister with responsibility for ARIA will be. As my noble friend Lord Patten helpfully reminded us, as a manifesto commitment ARIA is a priority for the Prime Minister and the Cabinet. The Bill provides a specific role for the Secretary of State and any delegation of ministerial responsibility would be at the Secretary of State’s discretion.

I move on to the decision to exempt ARIA from freedom of information requests, which was raised by a number of noble Lords: the noble Lords, Lord Clement-Jones, Lord Davies of Brixton and Lord Fox, and the noble Viscount, Lord Stansgate. I reassure the House that the decision to omit ARIA from the FoI Act has not been taken lightly. To create the extraordinarily lean operating system that I have spoken about, we have had to consider what the most appropriate mechanisms to assure transparency and accountability are within ARIA. I thank my noble friend Lady Noakes for her support on this. Together, robust arrangements are in place that will provide a clear picture to Parliament and taxpayers about how ARIA’s activities are funded and where it spends its money. So I politely refute the views of the noble Lord, Lord Fox, on this.

First, the Bill requires ARIA to submit an annual report and a statement of accounts, which will be laid before Parliament. Secondly, ARIA will be audited by the National Audit Office and will be the subject of value-for-money assessments. Thirdly, ARIA will interact with Select Committees of this House and the other place in the normal way. Finally, we will draw up a framework document, detailing ARIA’s relationship with BEIS and further reporting requirements, such as details of what is published in the annual report. It is also an important fact that other bodies subject to the FoI Act, such as universities and government departments —including my own, BEIS—will still process requests about their activities with ARIA in the usual way.

The noble Lord, Lord Clement-Jones, made a comparison to the number of FoI requests in DARPA. It is an interesting fact that, when making an FoI request in the US, requesters are required to consider paying applicable fees of up to $25—I think that that is an excellent idea. If requests are expected to exceed this cost, the requester is notified to agree additional payment. While fee waivers or reductions can be granted in certain circumstances, there is not a like-for-like comparison to the FoI process in the UK, where, as I am sure the noble Lord will be aware, we get hundreds of what I call “sweeping requests” from people fishing for information when they are not really sure what they want but think that there might be something there, so they pour in FoI requests. Therefore, it is not right to assume that ARIA will receive a similar amount of FoI requests to DARPA.

The noble Lords, Lord Clement-Jones and Lord Fox, and my noble friend Lord Borwick asked about whether the Government will publish the framework document during the passage of the Bill. I should be clear that the framework document will not set a vision or strategy for ARIA—as I have said, that is for the organisation itself. It is a governance document that will follow the Treasury’s standard template and set out the role of BEIS as ARIA’s sponsoring department, its accountability, decision-making and financial management. Given the nature of its content, the framework document must be agreed with ARIA’s senior leadership, for which we are still recruiting. We are therefore not able to publish a draft framework document at this stage, but I would like to reassure the House that I will do so as soon as I am able to.

I thank the noble Baroness, Lady Chapman, for her general support, from the Opposition’s point of view, for the Bill. She rightly asked about the provisions in the Bill to exempt ARIA from public contract regulations and how we assure the appropriate propriety. We have provided a non-legislative commitment for an independent internal auditor to report on ARIA’s procurement activities, demonstrating transparency and good governance. ARIA’s framework document, which I just referred to, will also set out the expectations for conflict-of-interest procedures, in line with practice across government. I thank my noble friend Lord Borwick for his thoughtful comments on this. However, as a further safeguard, Schedule 1 provides the Secretary of State with the power to set out a procedure in legislation should it be required in the future. We will bring forward draft regulations for this power, for illustrative purposes, as the Bill goes through the House.

The noble Lord, Lord Davies of Brixton, and my noble friends Lady Noakes and Lord Patten asked about how we attract these high-risk ideas and the exceptional people who will pursue them, or, as the noble Viscount, Lord Stansgate, eloquently put it: today’s Alan Turing or Barnes Wallis. The recruitment campaign for the CEO launched on 1 June and will aim to conclude in the coming weeks. We are looking for the ability to provide inspiring leadership to high-performing teams.

In response to my noble friend Lord Borwick, we will soon be launching campaigns for the chairman and other non-executive members through an open and fair ministerial appointments process so that we are able to recruit the right talent to work alongside the CEO as a complementary leadership team. We recognise the need to ensure a competitive salary for this position and are in discussions with the Treasury. I will update the House as appropriate.

I welcome the considered contributions from my noble friend Lord Lansley, the noble Lord, Lord Kakkar, and the noble Viscount, Lord Stansgate, on the Haldane principle and ARIA’s use of peer review. It is right that at its core this is about scientists judging ideas on their merits, and that is at the heart of ARIA’s approach. However, the concept that funding proposals should be assessed by peer review is embedded within the Haldane principle, and I agree that that will not always be appropriate for ARIA, which will have an innovative approach to funding and will seek to empower exceptional scientists to start—and stop—projects quickly.

The noble Lord, Lord Patel, asked about research cost sharing, by which I assume he means with universities. We are considering the appropriate arrangements for funding research projects in universities to ensure both that they are properly costed and that those costs are met to enable transformative scientific research. Details on expectations for ARIA in that regard will be set out at a later date.

My noble friend Lord Borwick queried the definition of “property” in Clause 2. The Bill uses the definition “that which a person owns”. In exercising its functions, ARIA may acquire and own both physical property and intangible property, such as intellectual property. “Restoration” means “to return”, so ARIA can own a piece of research equipment that it can loan out on the condition that it is returned to ARIA within a specific timeframe. I hope this clarifies the issue for my noble friend and that he agrees that an amendment is therefore unnecessary.

Lord Fox Portrait Lord Fox (LD)
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I do not wish to labour the property point, but if ARIA is not doing research then I do not understand why it would own research equipment. Sorry, I am confused.

Lord Callanan Portrait Lord Callanan (Con)
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It can fund the purchase of a piece of research equipment, which ARIA then owns, and it can loan it out on the condition that it is then returned within a specific timeframe. I am not quite sure why the noble Lord is confused but perhaps we can return to this issue in Committee.

I have tried my best to address most if not all of the points that have been made today. I am sorry to detain the House at such a late hour but I am deeply encouraged by its general support, albeit with some reservations, for the dedicated funding of high-risk research. I look forward to continued engagement with all sides as we progress the Bill through the House. I therefore commend the Bill to the House and beg to move.

Bill read a second time and committed to a Grand Committee.

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

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Committee stage
Wednesday 17th November 2021

(8 months, 3 weeks ago)

Grand Committee
Committee stage Page Read Hansard Text Amendment Paper: HL Bill 24-I Marshalled list for Grand Committee - (15 Nov 2021)

This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

I thank the noble Viscount, Lord Stansgate, for his intervention. When he was unable to complete his remarks at Second Reading, he said that he would come back in Committee and add to what he had said—which makes a change from what normally happens, with people coming back to repeat their Second Reading speeches. It is good to hear from the noble Viscount.

I am also delighted to hear the unequivocal support from the Opposition Benches for that great neo-conservative, Donald Rumsfeld—quoted by both Cross-Benchers and the Liberal Democrats. A great man indeed.

Amendments 1, 21, 25 and 26 create requirements that seek to narrow, or to have the Government direct, ARIA’s funding. Amendment 1 would require ARIA to pursue projects that contribute to a sustainable and resilient society, planet and economy. Amendment 25 seeks to specify a relationship with UKRI. Amendments 21 and 26 would set ARIA’s core mission as to support achieving the target established in Section 1 of the Climate Change Act. Once achieved, ARIA’s mission would then be set every five years by government by an affirmative SI. Of course, I thank noble Lords for tabling these timely and topical amendments, particularly given the partial success at COP 26 last week.

Starting with Amendment 1 from the noble Lord, Lord Ravensdale, let me point him to Clause 2(6), where, in exercising its functions, ARIA must have regard to contributing to economic growth, promoting scientific innovation and invention, or improving the quality of life. These considerations ensure that ARIA’s activities are geared towards beneficial outcomes, which will of course include sustainability and resilience. Of course, this broad characterisation of the benefits of ARIA’s activities does not represent the limits of ambition for individual ARIA programmes, or substitute for ARIA’s unique tolerance to failure as set out in Clause 3.

That brings me on to Amendment 27 from my noble friend Lord Lansley. I have heard consistently from the scientific community that ARIA must have high risk tolerance to succeed, and indeed that gets to the heart of what ARIA is all about. It is therefore important, in my view, that we express that idea precisely. My noble friend’s alternative articulation of risk tolerance, for which I thank him, does not specify the particular weight that ARIA may give to this type of activity, and I think that is crucial, particularly for the NAO’s assessment of whether ARIA’s activities are in line with its stated functions.

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Lord Callanan Portrait Lord Callanan (Con)
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This group of amendments relates to the balance that we need to strike between ARIA’s independence from and accountability to government, which is a difficult balance to draw. I shall begin with the amendments relating to the composition of ARIA’s board.

Amendment 2 from my noble friend Lady Noakes would limit the executives on ARIA’s board to just the CEO and the CFO. I appreciate the spirit of her amendments, trying to ensure that ARIA is an agile body with a streamlined board, but we have decided that the number of executives should be at least four. We have said that in the interests of representing the different executive functions within the organisations. Similarly, we have imposed a maximum number to try to keep it as efficient as possible.

As the majority of the board members need to be non-executives, in our view, that means that the minimum total number of board members will be nine, to ensure a majority of non-executives, and our expected maximum is 15. We believe that this is very much in line with standard practice. It is not usual for legislation to specify quoracy arrangements, and the Bill’s current provisions mirror some of the procedural arrangements that are in the Higher Education and Research Act. I am also happy to confirm that it is not our intention to offer non-executive members pensions or gratuities—I do not want to get into a definition of gratuities—but it is commonplace to ensure that the provision is available.

The drafting that we have used is also found in the Higher Education and Research Act 2017 for UKRI non-executives under paragraph 7(2) of Schedule 9, and indeed in the Energy Act 2013 for the Office for Nuclear Regulation’s non-executives under paragraph 11(3) of Schedule 7. I therefore do not see that Amendment 8 in the name of my noble friend Lady Noakes is necessary.

I turn to Amendment 3. In our view, the Government’s Chief Scientific Adviser will bring a somewhat unique perspective to the ARIA board in their independent advisory capacity, with awareness of science and technology across government. It is important to emphasise that he or she will be on the board in their capacity as an independent adviser, not in their science and technology strategy capacity. Indeed, it is perfectly possible for there to be two different people in those roles. It is also important to emphasise that they will not do so on a privileged basis. Other non-executives will have been appointed for their expertise, their wide experience and their special knowledge of different facets of the research and development system, and they will equally provide ARIA with independent advice in the best interests of the organisation and its objectives, as the Chief Scientific Adviser will.

Lord Lansley Portrait Lord Lansley (Con)
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Before my noble friend moves off this particular point, he will know, and the Committee will have observed, that in paragraph 18 of Schedule 1 the Government are proposing to take a power to substitute somebody else or some other office for the Chief Scientific Adviser. What my noble friend was just saying gave me the impression that this is something that might be contemplated in circumstances where the two roles that he refers to are held separately.

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Lord Callanan Portrait Lord Callanan (Con)
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That is the exact point. At the moment they are occupied by the same person, but at some point in the future there might be other arrangements. It is just to ensure that the Secretary of State has the maximum flexibility.

I turn to the recruitment and appointment of ARIA’s board members. I am happy to confirm to the noble Lord, Lord Davies, that we will of course follow the normal and usual procedures for the appointment of directors and non-executive directors of public bodies. Amendment 6 seeks to disqualify a non-executive member if the individual has been a Minister of the Crown or a person employed by a government department. While I understand that the likely intention of this amendment—which will perhaps make my noble friend Lady Noakes and some of the contributors on this grouping unpopular—is to ensure that we have the highest calibre of individuals represented on ARIA’s board, I believe it could have the opposite effect. It would undermine the Secretary of State’s ability to run an open and fair recruitment process, as it would narrow the search field on a somewhat arbitrary basis. It could also prevent the appointment of an individual with demonstrable scientific or technical experience—some of whom may well be in this Room today—just because that individual had served in public office or as a civil servant. That seems very unfair to me, and I see no obvious logical reason for depriving ARIA of such expertise.

Amendments 5 and 7 would require the Secretary of State to inform the Commons Science and Technology Committee before appointing ARIA’s first CEO and chair, and to make arrangements should the committee wish to call them for evidence. As noble Lords are aware, we are currently recruiting for the CEO role. We will launch the chairman recruitment following the conclusion of that process, so that we are able to recruit the right person to work alongside the CEO as a complementary leadership team. I can confirm that we will of course write to the committee on the announcement of both positions; it may then choose to invite the appointee to give evidence to it on their vision and functions in ARIA. I strongly submit that it is not for the Government or Parliament to specify in legislation what a Select Committee should or should not do. It is perfectly capable of deciding for itself whether it wishes to summon individuals to give evidence—or not, as the case may be. Given the robust appointment process and the committee’s standing powers to invite witnesses to give evidence, I really believe that a special provision in legislation for a pre-appointment hearing is not necessary.

I acknowledge that the balance between giving ARIA the autonomy that I think everybody here is agreed it should have and ensuring a certain amount of accountability to government, the National Audit Office, et cetera, is an issue on which noble Lords will hold different views. It is a difficult balance to strike, but I hope that I have been able to convey to the Committee why we believe we have the correct balance as it stands. On that basis, I hope noble Lords will not press their amendments.

Lord Fox Portrait Lord Fox (LD)
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I asked some specific questions about the future legal structure of ARIA and the nature of who its members are. I do not think the Minister had time to answer.

Lord Callanan Portrait Lord Callanan (Con)
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I will write to the noble Lord with the legal details he requires.

Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I can probably help the noble Lord, Lord Fox. In the case of public corporations created by statute, it is quite common that they are the members. It is not usually drafted as if the board is a separate legal entity.

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Lord Broers Portrait Lord Broers (CB)
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I have just a word of disagreement on some of this. Short-termism has been our problem; we must keep the timescales long enough. If you keep pulling the plant up and looking at the roots, it will not grow. On the other hand, one thing that we should practise from the beginning is what is in Amendment 16 from the noble Lord, Lord Ravensdale. The one thing that technologists have made a mistake on in the last decade or two is not to bring social scientists in early, to really look at the implications of what their technology will do. I strongly support that amendment, but I have severe reservations about the others.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank noble Lords who have contributed. These amendments relate to ARIA’s annual report and to other information to be provided to Parliament. As set out in Schedule 1, ARIA’s accounts must be prepared annually, alongside an annual report, which it will send to the Secretary of State, who must lay the report in Parliament.

Addressing Amendment 11 first, I am happy to assure the noble Baroness that ARIA will be audited by the National Audit Office—and I reassure the noble Viscount, Lord Stansgate, on that as well. The point was also well made by my noble friend Lady Noakes that the National Audit Office will be able to conduct value-for-money examinations of ARIA; the National Audit Office never shows any reticence to do precisely that. Indeed, it is able to do that as per the National Audit Act 1983 in the usual way, and the same controls apply to many other public organisations. As some of my spending schemes, within my responsibility, have been subject to National Audit Office examinations, I can assure noble Lords that it is extremely rigorous, as indeed it should be.

Other amendments relate to the specific contents of ARIA’s annual report. I agree on the importance of robust transparency and reporting arrangements in this regard. That is why ARIA’s annual report will align with the Government Financial Reporting Manual, which, for example, could require ARIA to publish information on its aims and achievements, performance, organisational structure, corporate governance and accountability.

On the list of projects that was asked for in Amendment 12 by the noble Baroness, Lady Chapman, publishing a list of delivery partners is not one, in my view, for primary legislation. The details of the annual report will be part of the framework document and, of course, the annual accounts will provide details of exactly where ARIA spends its money.

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Report stage
Tuesday 14th December 2021

(7 months, 4 weeks ago)

Lords Chamber
Report stage Page Read Hansard Text Amendment Paper: HL Bill 69-I Marshalled list for Report - (10 Dec 2021)

This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
- Hansard - - - Excerpts

My Lords, I find myself listening to some excellent speeches and frantically scratching sections from my own contribution as I do not see the point in repeating the points that have already been made. I put on record my thanks to my noble friend Lord Browne, in particular, for his generosity with his expertise and time in working so collaboratively on this issue, which has support on all sides. The principle is very simple: the state is taking a big risk by granting funds to speculative research projects. In cases where that risk pays off—we hope that is not an infrequent event, but we understand that this is about high-risk ventures—ARIA should have the ability to protect the potentially significant benefits that will arise from initial taxpayer support. It seems equally appropriate that ARIA has a say in potential takeovers or transfers of intellectual property. We know that there is a big market for speculative purchases of new technology. While ARIA may decide that there is no public interest in preventing certain events from taking place, there might be other investments that should be safeguarded.

It is clear from the debates that we have had in Committee and this evening that there is a shared desire on all sides—including, to be fair, from the Minister—to deal with this issue. He has correctly observed previously that the problem we are trying to fix is not limited to ARIA; that is understood and agreed with. However, while the amendment by the noble Lord, Lord Browne, does not fix everything, that does not mean we should not try to fix the thing that is in front of us now. It moves us in the right direction and is appropriate given the specific activity of ARIA; the Opposition are solidly in support of Amendment 1.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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I thank noble Lords for what has been an excellent and very well thought-through debate. While the noble Baroness, Lady Chapman, was lucky enough to be scratching bits from her contribution, I found that I was adding lots more to mine to take account of some of the excellent contributions. The debate showed the House at its finest, even if I do not necessarily agree with all the points raised, as I will outline.

Amendment 1, introduced by the noble Lord, Lord Browne, imposes a number of conditions on ARIA’s financial support. He made his case well, raising a number of important issues regarding the UK’s approach to capturing value from public investment in R&D, the role of public IP retention within that, the Government’s powers to intervene in acquisitions and our approach in so doing. I have listened carefully to all the contributions made by noble Lords on this matter, and I think that there is some measure of common agreement. We are all agreed that public investment in R&D should indeed drive long-term socioeconomic benefit and ultimately drive value to UK taxpayers who are funding it. We are clear across this House that exploitation of IP will play an integral role in creating these benefits, and that our paramount concern should therefore be generating the maximum public value from that exploitation; I will return to that specific issue shortly.

The debate that we have had today on the benefits derived from public investment in R&D speaks to a much wider issue, which extends beyond intellectual property, ARIA and this piece of legislation. I respectfully say that I do not think that Report on the Bill is the most effective forum for setting precedents to this very expansive and wide-ranging area of government policy. While I will do my best to address the range of points raised this evening, the Government’s approach to foreign investment and how IP rights are treated within the public funding disbursed across the entirety of our considerable R&D system are indeed extensive areas of policy.

I recognise that there is some common ground, as the noble Lord, Lord Browne, has set out—although perhaps not as much as he might have indicated. As he said, I offered to facilitate a meeting with the Minister for Science, Research and Innovation, who came along to our all-Peers meetings to discuss these issues in the round. I still believe that this is the correct forum to discuss this issue in sufficient breadth—something that I do not think could be provided through this amendment to the proposed arrangements for ARIA alone. I suspect that the noble Lord will not be satisfied with my offer but nevertheless I repeat it here.

I have welcomed the insightful contributions of noble Lords in the scrutiny of the Bill so far, and I recognise the importance of Amendment 1 in providing a vehicle for this debate, but I hope that the noble Lord, Lord Browne, will recognise that this represents an unusual and strong restriction and we would have serious concerns as to its proposed workability.

To respond directly to the noble Lord’s amendment, let me set out the Government’s current position. The UK is a premier destination for foreign direct investment. I recognise the concerns the noble Lord has expressed about the current context and the issue of leveraged loans highlighted by the Bank of England, but, in general, I think we all have to recognise that this investment brings tangible economic benefits and the Government are rightly cautious about introducing wider powers to act on the grounds of public or economic interest, as such an approach could destabilise investment into the UK, reduce economic growth and ultimately, therefore, risk jobs and prosperity.

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18:48

Division 1

Ayes: 166


Labour: 77
Liberal Democrat: 56
Crossbench: 25
Independent: 6
Green Party: 2

Noes: 153


Conservative: 144
Democratic Unionist Party: 5
Independent: 3
Crossbench: 1

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Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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My Lords, I am grateful to the noble Lord, Lord Ravensdale, for bringing back his amendment on these important issues. It has been a real pleasure working with him and hearing from him throughout the debates on this Bill. In Grand Committee, Labour proposed making addressing climate change a core purpose for the first two years of ARIA’s existence. It is, after all, one of the greatest challenges, if not the greatest, that we face, and it is science and technology that we look to for new tools and solutions. We were disappointed by the Minister’s response to that suggestion and to the proposals put forward by other noble Lords. We feel this is of critical importance, so we would be prepared to support Amendment 4—depending, of course, on what the Minister has to say.

The noble Baroness, Lady Bennett of Manor Castle, has tabled Amendment 5, which seeks to promote three of the UN sustainable development goals, which Labour supports. My noble friend Lord Collins of Highbury looks for any opportunity to press the Government to secure progress on them, domestically and overseas. Without wanting to soften the Minister’s cough—as I think we say where we are both from—I am sure he will say that the Bill is not the correct vehicle. However, whether or not there is a vote, the Government should understand that amendments such as this, which embed climate as a golden thread in legislation, will be put forward by noble Lords and Members in the other place at every opportunity.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I thank the noble Lord, Lord Ravensdale, for his productive engagement on the amendments in his name, as well as others for contributing to this important debate. Clearly, this issue matters to us all. I will start by exploring the intention behind the amendment. If it is to signal the importance of climate action, of course there is no disagreement between us on that. It is clearly an issue of the utmost strategic importance to this country, and that is reflected in the Climate Change Act, which marks the UK as the first major economy to pass laws to end our contribution to global warming by 2050. Our statutory obligations and ambition on this issue could not be clearer, and they do not need to be marked elsewhere. I do not believe that we should add to this legislation to signal our general intent. It is not appropriate for any provision to be added to a Bill unless it has an actual effect.

The alternative is a statutory duty that seeks to influence—and therefore constrain—ARIA’s activity in some way and, as drafted, the amendment would do so in a very sharp sense. I am grateful to the noble Lord, Lord Ravensdale, for his willingness to engage with the concerns that I put to him and explore alternative ways to achieve his objectives. I have raised these points with him directly, so for the benefit of others I will outline my position—with apologies to the noble Lord, who has heard all this before.

There are well-rehearsed arguments that I have put forward against a defined climate mission. I remind noble Lords that UKRI, through which the overwhelming majority of our public R&D funding is delivered, funds a full portfolio of projects focused on tackling climate change. Where there are specific research and innovation needs to support the Government’s strategic priorities in this area, UKRI delivers across: adaptation and resilience; clean energy; and sustainable industry, agriculture and transport. I think we are all aligned behind the idea that ARIA should complement, not duplicate, our existing capabilities. That is why this amendment is rightly presented now as a more general obligation. The excitement and support that ARIA has generated within the research community has been based on its different model of funding, with agility and risk appetite absolutely central to all the recommendations of how and why ARIA should be created.

ARIA should not be focusing on the scale-up and exploitation of known technologies, for climate change or indeed any other government priorities; noble Lords with expertise in this area will know well that the extent of its funding, at £800 million over five years, makes it completely unsuitable to play such a role. ARIA will contribute by focusing its programmes on the most ambitious objectives, and funding high-risk research and innovation to achieve them. When ARIA finds solutions to these hard problems or gathers learnings along the way, they will be adapted and applied to other fields in different contexts: that is where the benefits to our climate ambitions are likely to be felt.

Breakthroughs in materials science led to huge progress in what is possible in terms of battery storage or fusion. Those technologies are now critical to the energy transition, but much of the original research was not done with that goal in mind. Being prescriptive limits the scope to take completely novel approaches, as we hope and expect ARIA will do. Placing this obligation on ARIA requires us to answer the question: who will assess whether the radical breakthrough targeted by an ARIA programme might—in future, in some way—contribute to our climate goals?

The National Audit Office will assess the regularity of ARIA’s spending each year, which would include this addition to its funding. Is it well placed to make this assessment? That is not intended as any slight at all on the NAO—I am sure the noble Lord, Lord Morse, will be glad to hear that. However, I submit that even the researchers and innovators steeped in a technology cannot predict how it might evolve or be applied in the years to come. That is the nature of innovation and high-risk research. Essentially, it is unknowable. Adding this provision to the Bill asks us to make that essential assessment not only knowable but justiciable. Whoever performed the assessment of whether ARIA’s activities fell within the scope of this obligation would have their judgment subject to judicial review.

I strongly suggest that the actual effect of this amendment would be to push ARIA towards objectives where the assessment would be clear cut. It would disincentivise risk-taking, new approaches or exploring the application of technologies in unusual or unprecedented contexts. I submit that it would work against the grain of everything we are seeking to achieve with this organisation—

Lord Lea of Crondall Portrait Lord Lea of Crondall (Non-Afl)
- Hansard - - - Excerpts

Is it not a fact that, although the Minister believes that we cannot make concrete commitments on method, we now have some very concrete commitments on outcomes? Glasgow is the best example of medium-term commitments. Unless we monitor those against the metric—the Minister will know that he used that word some months ago—how do we get around the following dilemma? We have concrete commitments on outcomes in a lot of areas but are now putting quite serious dilemmas—I am not saying it is nit-picking—before ourselves as to how we can make sure that we are on track to go where we are trying to get to.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank the noble Lord for his contribution. I am not 100% sure of the point that he is making. I agree with him that we have concrete commitments, but we have a well-defined track of a number of strategies heading towards those commitments. In the Bill we are talking about funnelling one small part of our R&D funding into a separate agency, while seeking to take novel, innovative approaches to research and development.

I have cautioned against placing this obligation in the Bill but that does not mean that it is unimportant for ARIA to have an awareness of these issues, as the noble Lord, Lord Ravensdale, articulated so forcefully. I am pleased that many noble Lords attended the briefing we held where my colleague George Freeman, the Minister for Science, Research and Innovation, discussed this. It is not plausible that any appropriate CEO candidate for ARIA would be ignorant of the opportunities connected to net zero within research and innovation. There is a similar situation with regard to Amendment 5 and the sustainable development goals, raised by the noble Baroness, Lady Bennett of Manor Castle.

As a result of the ongoing discussions that we have had on this issue during the passage of the Bill, I am able to commit now that, as an alternative, ARIA will evaluate itself against the pillar of the 2021-25 greening government commitments most relevant to this amendment on mitigating climate change by working towards achieving our net-zero environmental goal. This would be included within the framework document; ARIA would therefore be required to consider this objective from its very first cycle of reporting and evaluation.

I also agree that it is through its projects, and its funding, that ARIA’s greatest contribution to our net-zero objectives will be made. I can therefore also commit that ARIA would have regard to its projects contributing to our climate change targets and environmental goals. This is distinct from the sustainability reporting framework and should sit alongside it as a broader obligation, rather than being part of that evaluation process. That consideration would again be included in ARIA’s framework document. In my view, that is the appropriate place for such requirements, which relate to the effective governance of the organisation and its alignment to wider public sector objectives, as it can be more readily updated to reflect changing circumstances or priorities.

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Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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I apologise; the procedure is a little different and more complicated because I put down an amendment to an amendment. It is not my intention to respond substantively to the Minister’s response to Amendment 4. The noble Lord, Lord Ravensdale, has consistently championed Amendment 4 and variations of it, so it is most appropriate that he responds on that one. I should just say that I failed to declare earlier that I am a member of the committee for Peers for the Planet. On Amendment 5 and my side of this, I do not think the Minister responded to my question about defining quality of life. I realise this may be a legally complicated matter, so will he commit to write to me about this and lay a copy of the correspondence in the Library?

Lord Callanan Portrait Lord Callanan (Con)
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Regarding the noble Baroness’s question on the definition of the quality of life—we are getting into a very esoteric debate for this time of night—I do not think there is a technical definition specific to her suggestions that I can point towards. It is not in such common usage but, if I can find an appropriate definition, I will of course send it to her.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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I thank the Minister for his answer. I want to make one other point very quickly. He talked a lot about the hard sciences. It is interesting that, when we had a private discussion with a number of his colleagues, there was also a lot of focus on what might be described as the softer biological sciences and issues such as plant health and the human microbiome. I hope those will be considered within ARIA’s remit. I beg leave to withdraw my amendment.

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We remain concerned about the issues with the Public Contracts Regulations. The Minister knows we are not happy about his approach to that, but our priority on this group is the issue of FoI, and we will support that amendment if it is put to a vote.
Lord Callanan Portrait Lord Callanan (Con)
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I thank noble Lords who have contributed on this group of amendments. Turning to Amendment 6 in the names of the noble Lords, Lord Clement-Jones and Lord Fox, the noble Baroness, Lady Chapman, and the noble Viscount, Lord Stansgate, I start by thanking my noble friends Lady Noakes and Lord Patten for their supportive statements in general as the Bill has progressed through this House.

ARIA will be a lean, streamlined agency which we expect to employ people in the tens. It will recruit a small team of exceptional individuals with both technical expertise and scientific vision. I contend that it is appropriate that we consider how their time, focus and energy is best applied.

We have designed this new, unique agency to operate and behave in a way we do not usually see in the public sector—with leanness, agility and efficiency being core to its function. We have also tasked it with embracing risk and failure. As noted by my noble friend Lady Noakes during consideration in Grand Committee and again this evening, these exceptional scientists should not be fearful of or driven to risk-aversion by the prospect of FoI disclosures, nor should they be distracted or bogged down by the bureaucracy of fulfilling such requests.

The issue of the volume of FoI requests we expect ARIA to be subject to has been raised throughout the passage of this Bill, and comparisons have been drawn between the number of requests received by smaller public bodies such as parish councils, and other research organisations such as UKRI. Pursuing this exemption reflects our expectation that, given ARIA’s profile, its focus on high-risk research and the speculation on its activity so far, it would indeed be subject to a disproportionately high number of FoI requests. It is not accurate to suggest that ARIA would get the same number as a single UKRI research council or other small organisations. It is already clear that its activities will generate a much higher degree of interest and, therefore, corresponding requests.

The noble Lord, Lord Clement-Jones, made a comparison to the number of FoI requests to DARPA. Let me remind the noble Lord that when making an FoI request in the US, requesters are required to consider paying applicable fees up to $25. If requests are expected to exceed this cost, the requester is notified to agree additional payment. While fee waivers or reductions can be granted in certain circumstances, it is not a like-for-like comparison to the FoI process in the UK. Therefore, in my view it is not right to assume that ARIA will receive a similar number of FoI requests to DARPA.

I also reassure noble Lords that our reasons for placing ARIA outside FoI legislation are specific and do not extend to other new public bodies, which will not have the same requirement for flexibility and agility and therefore will not require the same exemption.

However, to suggest that the agency will therefore be operating under a veil of secrecy is, in my view, not accurate. We expect ARIA to be an outward-facing and transparent body, which will proactively provide information about its activities to encourage collaboration around its programme goals, increase public understanding of its work and build public trust. Alongside this, it will be held to account by robust transparency arrangements. Let me remind noble Lords about them. It will publish its annual report and a statement of accounts, which will be laid before Parliament. It will be subject to annual audits by the National Audit Office. It will appear before and be accountable to Parliament through its chief executive officer and it will remain, of course, an arm’s-length body of my department in BEIS.

That said, I have also taken into account the opinions of noble Lords on this matter. To reflect the considered debate in Grand Committee on the balance of ARIA’s transparency and accountability arrangements with this unique freedom, I am happy to provide further assurances to noble Lords on ARIA’s reporting requirements. Annually, ARIA will proactively publish information on its regional funding and will make information publicly available on all delivery partners supported through the full range of its funding mechanisms. Taken alongside and together with ARIA’s annual report and accounts, these are significant and robust transparency arrangements which will ensure Parliament and the general public are informed of ARIA’s activities, the projects it funds and where it funds them.

I hope that, given these reassurances, noble Lords are satisfied that the FoI exemption serves an important function for ARIA and that we have struck the right balance here. I thank them for their input.

Lord Browne of Ladyton Portrait Lord Browne of Ladyton (Lab)
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Before the Minister moves on to the next amendment and off the FoI amendment, has he read the Department of Defense information handout? That makes it clear that the vast majority of those who request information from DARPA would not have to pay any fee at all. Can the Minister share—either now or at some point—with noble Lords the genesis of his belief, which he has now repeated a number of times, that everyone who asks for information from DARPA has to pay a fee in the United States? If that is not true, then the comparison that we all make is a relevant comparison and is the only data; the only other thing we have is the Minister’s animus against freedom of information requests. And is he aware of the provisions of Section 19 of the Freedom of Information Act?

Lord Callanan Portrait Lord Callanan (Con)
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I think the noble Lord will find, if he looks at my remarks, that I did not say that every applicant will pay fees but that there is a general expectation that a fee of $25 will be charged, or even more in some cases if more information is required. However, there are exemptions to that, which can be exercised. If the noble Lord looks back at Hansard, he will see that I did not say that everyone would be charged a fee. In most cases, a fee would be applicable, but there are certain exemptions.

I turn to Amendment 7, in the names of the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Baroness, Lady Chapman, which relates to procurement regulations. I note that the noble Lords did not address this, but it is worth while setting out the Government’s position on that amendment. I believe there are clear reasons why this exemption is beneficial to ARIA and why it will be integral to the agency’s effective operation. First, unlike other R&D funders, ARIA will be commissioning and contracting others to do research for it in pursuit of its own technological visions or research goals. The process of contracting and commissioning means ARIA will be operating in fundamentally different ways from traditional R&D grant making, where procurement rules already do not apply. Placing ARIA outside the existing public procurement rules will mean that the agency can freely procure expert investment and consultancy advice, which will be important given the highly varied and technical nature of the agency’s work.

While we imagine that the bulk of ARIA’s research activities will be carried out by its partners and funders, it remains possible that ARIA may wish to procure and own a piece of research equipment to crowd-in interest from other research partners, or to accelerate the progress of a project. Freedom from traditional procurement rules will facilitate ARIA making those investments quickly and with ease. In my view, it is appropriate for ARIA to have greater flexibility than the R&D exemption would afford it so that it can design and tailor its contractual arrangements to precisely suit its research endeavour.

Secondly, in designing ARIA, we have put a premium on the agency investing and acting quickly. In our view, this agility would be incompatible with the public tendering process mandated in the Public Contracts Regulations 2015, which can require contracting authorities to put contracts out to open tender for up to two to three months. Such a delay could prevent critical investments being made with sufficient speed or, indeed, at all. In choosing to exempt ARIA from standard procurement rules, we have learnt from the successful approach taken by DARPA, which benefits from “other transactions” authority, giving the agency the flexibility to operate outside traditional US government contracting standards. It is our belief that ARIA should benefit from similar flexibilities.

I also dispute the notion that taking ARIA outside traditional procurement rules will leave the agency vulnerable to cronyism. I think this was a point made by the noble Baroness, Lady Chapman, in Committee. This exemption will ensure ARIA’s leadership and programme managers—who have been recruited for their technical expertise and scientific vision—can take decisions on ARIA’s procurement with autonomy, as they will have the freedom to procure at arm’s length from government and Ministers.

As I have already detailed, ARIA has clear lines of accountability, transparency and scrutiny in the preparation of its an annual report, scrutiny by the NAO and an annual independent audit to report on its procurement activities. As I have already alluded to, to reflect the constructive and considered debate in Grand Committee, ARIA will publish information on its delivery partners, and this expectation will be detailed in ARIA’s framework document. I thank the noble Baroness, Lady Chapman of Darlington, for tabling an amendment to that effect previously. I hope she and other noble Lords welcome this principled commitment to transparency, which would extend to delivery partners supported through the full range of ARIA’s funding mechanism.

In conclusion, I hope noble Lords have been assured that exempting ARIA from traditional procurement rules will be integral to the agency’s effective operation. The package of accountability, conflict of interest procedures and governance provisions that sit within this Bill are an appropriate counterbalance to that. Taken in the round, this represents an essential, proportionate and balanced freedom, placed in the hands of ARIA’s incoming leadership and programme managers. Taken together, I hope that the assurances and explanations I have been able to provide for noble Lords will allow the noble Lord to withdraw his amendment.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I thank the Minister for his response and thank noble Lords who have taken part in this debate. There is clearly an argument to be had on our Amendment 7 and the whole procurement regime. The one argument that the Minister has is that DARPA is not subject to procurement rules.

However, the position is quite other on Amendment 6, as the noble Baroness, Lady Chapman, has said. This is a matter of principle. The Minister keeps coming up with some quite colourful phrases. This evening he said that scientists should not have to be fearful at the prospect of FoI disclosure. That is quite an interesting phrase—those scientists quivering in their labs, waiting for freedom of information disclosure. I must say it is quite a colourful way of looking at the situation, but, clearly, we have a matter of principle to decide on here, and I would like to test the opinion of the House.

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19:59

Division 2

Ayes: 126


Labour: 64
Liberal Democrat: 48
Crossbench: 8
Independent: 3
Green Party: 2
Ulster Unionist Party: 1

Noes: 134


Conservative: 115
Crossbench: 11
Democratic Unionist Party: 5
Independent: 3

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Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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My Lords, I recognise the expertise of noble Baroness, Lady Noakes, on issues of corporate governance and, like my noble friend Lord Browne, I have enjoyed listening to her in Committee and again today. I will be interested to hear what assurances the Minister is able to give as a consequence of her amendments. I have learned a lot from her through this process and I look forward to learning more in the future.

I welcome Amendment 17 from the noble Lord, Lord Morse, whose case is no doubt bolstered by his experience over many years. It is a real joy to me that we have come to this House at more or less the same time. This is our first Bill together, and I am very pleased to add my name to his amendment.

There have long been concerns about “revolving doors” in politics—it is not something that started with this Government—but my noble friend Lord Browne was correct to observe that concern about issues such as those dealt with by Amendment 17 is growing, and frankly the Government have brought it on themselves. There is deep concern in the public mind about these issues and we shall see on Thursday what the people of North Shropshire make of it all.

I am struck by the fact that the Minister has taken the amendment from the noble Lord, Lord Morse—a very good amendment which we support—and has directed us to look at paragraph 11 of Schedule 1, which states:

“The Secretary of State may by regulations make provision about the procedures to be adopted for dealing with conflicts of interest.”


They may, but “may” is doing a lot of lifting there, and obviously they may not as well, so there is nothing to give us any assurance that the danger of which the noble Lord, Lord Morse, is correct to warn us could be averted by that provision. We are just not buying it. Although the Minister has, for illustrative purposes, provided a suggestion of how the regulations might look, that does not provide us any assurance whatever.

Given the Minister’s reluctance to accept any of the suggestions that we have made—none of the suggestions, from FoI to reporting, have been taken up by the Government—he is somewhat leaving ARIA exposed, in the way that the noble Lord, Lord Morse, explained so well. We want this organisation to succeed, but because of the Government’s rigidity on these issues, the fear is that we are setting it up with a weakness: this lack of transparency and ability to challenge.

The Minister is kidding himself if he thinks that these issues will not be scrutinised and that some of the problems that may emerge will not somehow get out. I am sure that the Public Accounts Committee will enjoy crawling all over this when it gets the opportunity to do so. We want this to work, but I am afraid that the Government’s approach is not doing ARIA any favours.

I want to hear what the Minister has to say and whether something can be done to provide us with the assurance we are looking for that ARIA will not be characterised—or mischaracterised, I hope—as some sort of secret agency. That would only cause this fascination and determination to probe into its activities to grow.

Lord Callanan Portrait Lord Callanan (Con)
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Before I start, I will deal directly with the comments of the noble Baroness, Lady Chapman, which I thought were a little unfair. We have responded to a number of the points she has made, and we have adopted some of her suggestions on transparency, delivery partners and regional funding. We obviously have not gone as far as she would like in some respects, but it is slightly unfair to say that we have not listened at all to many of the reasonable suggestions that have been put forward from all sides. I will come on to another suggestion that we will adopt shortly.

I start by responding to the amendments put forward my noble friend Lady Noakes. I thank her once again for her considered contributions, which, together, aim to ensure that ARIA is a well-governed and effective agency. I certainly echo the comments of the noble Baroness, Lady Chapman, about her great knowledge of corporate governance. My noble friend’s Amendment 16 would remove the Secretary of State’s power to determine a pension or gratuity for non-executive members. As I said in Committee, it is in fact not our intention to offer these for ARIA’s non-executive members. In consequence of the helpful suggestions and debates we had on that occasion, I have reflected further on the functions of ARIA and the duties and responsibilities we expect of its non-executive members, and I am pleased to be able to confirm to my noble friend that we do not see circumstances in which this power will be required. I am therefore able to say that the Government will support this amendment, and I thank my noble friend again for bringing it forward.

I turn to Amendment 15, also tabled by my noble friend Lady Noakes, who spoke about reducing the maximum possible number of executive members from five to four. The chair of the agency will have responsibility for appointing ARIA’s executive members. Following government guidance for corporate governance, we will set out the responsibilities for ARIA’s chair to review the performance of ARIA’s board and its members in the framework document. This will include evaluating the composition of the board and considering its size, diversity and balance of experience and skills. We expect that, in the initial phases of ARIA, this will tend towards a small board structure. However, I believe that it is important to retain at least some flexibility in the legislation to account for ARIA’s future needs as appropriate, and to allow for a slightly larger board if necessary.

As ARIA will be working across the public and private sectors, using a range of funding mechanisms and funding research at various stages of technological development, I do not think we should rule out a slightly larger arrangement so that ARIA can bring knowledge from a range of backgrounds and ensure that this is represented at board level. I thank my noble friend for her thoughtful remarks on groupthink; it is this diversity of thought and experience that would be the best antidote to such an outcome.

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Lord Callanan Portrait Lord Callanan (Con)
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Once again, I thank my noble friend Lady Noakes for her thoughtful and constructive contributions throughout the progress of the Bill so far. However, she will be disappointed to know, I am sure, that on the substance of her Amendment 20, I am not convinced that adding a legislative requirement for the Secretary of State to approve how these supplementary powers are exercised would be beneficial to ARIA’s effective function or enhance its accountability measures that are already in place.

On ARIA’s ability to borrow money, I recognise that this has been consistently raised throughout the passage of the Bill by my noble friend. I thank her for her previous probing amendments on this matter, which prompted an important conversation on the balance between ARIA’s activities and the appropriate government oversight. As I outlined in correspondence with my noble friend, any borrowing would be contingent on ARIA complying with the rules of Managing Public Money and subject to approval by Her Majesty’s Treasury.

ARIA’s allocation and delegation letters, which the CEO of ARIA will be duty-bound to adhere to, will confirm that ARIA will be subject to, and comply with, all Managing Public Money rules that relate to borrowing. Managing Public Money sets robust conditions on borrowing, and states:

“Public sector organisations may borrow from private sector sources only if the transaction delivers better value for money for the Exchequer as a whole.”


Ensuring that ARIA’s expenditure is made in accordance with Managing Public Money guidance, except for in certain agreed circumstances, will be a condition of the budget ARIA receives from BEIS in its allocation and delegation letters from the BEIS Permanent Secretary to ARIA’s CEO.

There is an expectation of a level of faith between the Government and their arm’s-length bodies. This understanding of trust, and all of ARIA’s freedoms and powers, will be balanced with a number of core accountability principles. The CEO will be ARIA’s delegated accounting officer and will be personally accountable to Parliament for the stewardship of ARIA’s resources, decision-making and financial management. This includes the Public Accounts Select Committee, which will, I am sure, take an interest in such matters. The BEIS Permanent Secretary, as principal accounting officer, will retain an important oversight role, and has the power to make arrangements to ensure they are satisfied that ARIA’s systems are adequate and its finances soundly managed. The Permanent Secretary may intervene if ARIA is significantly off track, and in the unlikely scenario that serious concerns are raised, or there is financial mismanagement, the CEO’s delegated accounting officer authority can be revoked. I hope my noble friend is reassured that the mechanisms here are well established and robust and that they will be enforced.

Moving on to ARIA’s ability to form partnerships, I believe that adding a Secretary of State approval to ARIA’s activities in this area would significantly hinder its effective operations. In designing ARIA, we have put emphasis on the agency operating with significant autonomy from government, and with freedom from standard bureaucracy. Forming partnerships, such as providing grant funding to a project with a university or a business, will be an essential part of ARIA’s daily operations. We expect the agency to contract with, commission and collaborate with a range of different actors for each of its research projects—indeed, that will be one of its core functions.

We have designed this agency to be led and run by experts with technological vision. It is vital that these individuals are free from arduous processes so that they can act quickly, decisively, with autonomy and with clear authority. We should trust ARIA to have discretion over how it forms those partnerships, and I believe that requiring it to engage in a central government approval process for each partnership sits squarely contrary to its aims and purpose.

Moving to ARIA’s ability to form companies and to form and participate in joint ventures, my department is currently in negotiations with Her Majesty’s Treasury about the exact clearance processes ARIA will undertake for each of these transactions. The detail will be set out in ARIA’s allocation and delegation letters, the conditions of which the CEO, as accounting officer, will be duty-bound to comply with. However, I assure my noble friend that all iterations of this delegation letter will include sufficient assurances that ARIA’s internal assessment processes and capability are sufficiently robust. Given that these arrangements may need to evolve in the future, it would not be appropriate for this to be mandated at this stage in the Bill.

On ARIA’s ability to accept gifts, there are already stringent conditions on this in Her Majesty’s Treasury’s Managing Public Money that ARIA would need to comply with. ARIA would consult BEIS about gifts, and HMT’s approval is explicitly required for any gift over £300,000. Gifts made would be recorded in ARIA’s accounts and gifts received would be recorded in a register. These rules will also be confirmed in ARIA’s allocations and delegations letter from the BEIS Permanent Secretary.

ARIA’s power to acquire and sell land would be exercised only in compliance with the Managing Public Money guidance, which sets controls on the below-market sale of land, will compel ARIA to take professional advice when disposing of land and property assets, and will mandate ARIA to include land in its asset register.

Furthermore, introducing a blanket statutory requirement for Secretary of State approval would leave ARIA with less freedom than comparable arm’s-length bodies such as UKRI, which is able to exercise supplementary powers related to accepting gifts and the buying and selling of land without a legislated approval from the Secretary of State.

I appreciate that my noble friend has significant expertise and interest in the areas of financial management and propriety, and we welcome that. However, adding a statutory requirement here would not add value or challenge beyond what is already well established and enforced through Managing Public Money. Furthermore, as I have set out, adding the requirement to the forming of partnerships would, I believe, be genuinely detrimental to ARIA’s agile, autonomous operations, which I know my noble friend is keen not to prejudice.

Before I conclude on this final group of amendments, I once again thank all noble Lords who have taken an interest in this Bill for their excellent and constructive contributions throughout our scrutiny. ARIA provides us with enormous opportunities. I have been delighted to take the Bill through this House and engage with colleagues on all sides, who have focused on the task of providing appropriate scrutiny with enthusiasm, ability and great skill.

Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I start by thanking again the noble Baroness, Lady Chapman of Darlington, for her support for my amendment. What the Minister has said in setting out in more detail how the various mechanisms work in the public sector to achieve de facto control over public bodies has been very useful. I hope he is right that this will work well in practice, and I completely accept his point that there has to be an element of trust and faith between BEIS and its public sector bodies. At the end of the day, this is a risk management decision on whether the balance has been set in the right place, given the particular circumstances of the public body.

I say to the Minister that I hope I shall never have to say, “I told you so”—I warn him that I have an elephantine memory. With that, it is late and time to withdraw my amendment.

Advanced Research and Invention Agency Bill

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This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

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Moved by
1: Schedule 1, page 7, line 40, leave out from beginning to “not” and insert “Sub-paragraph (1) does”
Member’s explanatory statement
This amendment removes a reference to a paragraph that was removed at Report.
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, Amendment 1 is minor and technical and is consequential to the amendment made on Report in the name of my noble friend Lady Noakes.

My noble friend’s amendment removed the power for the Secretary of State to determine a pension or gratuity for non-executive members. This government amendment is needed to remove a reference to that power, which no longer exists, in paragraph 7(4) of Schedule 1. This paragraph disapplies the power for the Secretary of State to determine a pension or gratuity for the Government Chief Scientific Adviser, who will sit as a non-executive member on ARIA’s board ex officio. The power is of course not relevant in this case due to the Chief Scientific Adviser’s existing employment and pension entitlement as a civil servant. As the original power no longer exists, I am sure that noble Lords will agree that this reference needs to be removed to tidy up the Bill before it returns to the Commons for consideration of the amendments made in this House.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
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My Lords, is it in order to congratulate the noble Baroness, Lady Noakes, on her success in moving her amendment in Committee? I watched as it went through and I thought how pleasing it must be for anyone to get an amendment accepted by the Government.

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Moved by
Lord Callanan Portrait Lord Callanan
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That the Bill do now pass.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, it is my great pleasure to thank all those who have supported the progress of this Bill. I first thank my Whip, my noble friend Lady Bloomfield, who is currently demonstrating just how good she is at multi-tasking because she is in Grand Committee supervising another piece of legislation going through. It is always a joy to work alongside her with her support, capability and good humour.

As we have debated this Bill, I am of course grateful to have witnessed the shared ambition across the House for our nation to cement its role as a science superpower and for recognition of the important role that additional funding for high-risk research can play within that, through the ARIA model. While this is a relatively short Bill, the debate has none the less been thorough, as is right and proper in this House—from the role of ARIA in the R&D landscape to the definition of gratuities. It has demonstrated once again the important function of this House.

To that end, I join the noble Viscount, Lord Stansgate, in thanking my noble friend Lady Noakes for her efforts in sharpening the governance arrangements set out in the Bill, and my other noble friends Lord Willetts, Lord Lansley and Lady Neville-Rolfe, among others, for contributing their considerable experience.

I thank, on the part of the Opposition, the noble Baroness, Lady Chapman, for her constructive challenge on many parts of the Bill. I think we worked well together, and I look forward to continuing to work with her on future Bills. I also pay tribute to the noble Lords, Lord Ravensdale, Lord Fox and Lord Clement-Jones, the noble Viscount, Lord Stansgate, and members of the Science and Technology Committee for their very thoughtful contributions. I particularly welcome the thoughtful debate we have had on, for instance, intellectual property and the importance of retaining its benefits. I thank all noble Lords who spoke on these important issues. I am sure that the noble Lord, Lord Browne of Ladyton, especially, will closely follow the words of the Science Minister as the Bill returns to the other place.

It would be remiss of me not to also thank, once again, the excellent team of officials who have been behind me on this Bill. As always, I am just the front guy, as it were. Their support has been invaluable and a tribute once again to the finest traditions of the Civil Service. I particularly single out my private secretary, Hannah Cowie, for her support; the Bill manager, Andrew Crawford, and his deputy, Salisa Kaur; and Katie Reardon, Alex Prior, Robert Magowan and Charles Norris for their work over the last 18 months—a considerable time—to take this Bill forward and, hopefully in the near future, get it on the statute book. I also thank the broader ARIA team and colleagues across government who are undertaking the programme of work to make it a brilliant and realistic success.

Finally, let me recognise the exemplary work of the parliamentary counsel in both drafting this Bill and supporting its progress at so many points during its passage so far, and, of course, the House authorities, parliamentary staff, clerks and doorkeepers. As I mentioned, this is a relatively short Bill, but I really do believe its potential impact is profound. I know I am not alone in this House in looking forward in anticipation to all that will come out of ARIA and the benefits it will create for the research community, businesses and the everyday lives of people across this country.

Lord Fox Portrait Lord Fox (LD)
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My Lords, first I should apologise for not being here to participate in the Report stage of this Bill. My disappointment was alleviated by the knowledge that my colleague and noble friend Lord Clement-Jones would more than compensate for my absence. I thank him for that and for his assistance throughout consideration of the Bill, and my noble friends Lady Randerson and Lord Oates for their work. I also thank the Minister, the noble Baroness, Lady Bloomfield, and the departmental team that has seen this Bill through; and the noble Baroness, Lady Chapman, the Labour Party and their team for working with us and the Cross-Benchers in a collegiate way. This was an example of good scrutiny coming to the fore. Finally, a big thank you to Sarah Pughe in our office for her support.

We still do not really know what ARIA is. Until it is decided who is leading ARIA, we will not know what its purpose is or how it will interact with the rest of the research environment. During the debate the Minister undertook to keep us informed—while enshrining secrecy in the Bill, of course, at the same time. So, I hope he will be able to keep us well informed as this effort unfolds —indeed, perhaps in advance of things happening. Without wishing to rain on the parade, we should keep a sense of proportion about what this is. This primary legislation has put in place a research effort worth about £200 million to 300 million per year. Meanwhile, the UK’s participation in Horizon Europe has more or less evaporated. During the debate, there were many discussions about the effectiveness of UKRI. In accepting this Bill and moving forward with ARIA, we would be grateful if the Minister also addressed these two elephants in the room: the continued participation of the United Kingdom in Horizon Europe and making sure that UKRI is as effective as it really can be, in order to make a big difference to the research effort in this country.

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This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Rosie Winterton Portrait Madam Deputy Speaker
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With this it will be convenient to consider Lords amendments 2 to 15.

George Freeman Portrait George Freeman
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I am delighted that the Bill to create this exciting new agency has returned to this House and that I am able to speak to it for the first time in my role as Minister for Science, Research and Innovation. I pay tribute to my ministerial colleague Lord Callanan for his work on the Bill in the other place. Not for the first time in matters scientific, their lordships have kept our Minister very busy on the Front Bench. I also pay tribute to my hon. Friend the Member for Derby North (Amanda Solloway), who so capably led the Bill when it was first before the House.

There are 15 amendments for our consideration tonight. Fourteen of those were tabled or supported by the Government. I will summarise them quickly. Amendments 2 to 8 relate to changes the Government made in response to the Delegated Powers and Regulatory Reform Committee’s report on the Bill. In doing so, we demonstrated the seriousness with which we take the DPRRC’s recommendations and the Government’s commitment to acting upon them. The effect of those amendments is to omit clause 10, which contained a broader power to make consequential provision, and to replace it with a narrower, more specific power in clause 8. The new power can be used only in consequence of regulations dissolving ARIA. Other amendments are needed to tidy up the rest of the Bill and reflect that change. I hope that the changes are, in general, welcome.

Amendments 9 and 10 remove a power for ARIA to pay pensions and gratuities determined by the Secretary of State to non-executive members. We have tested that thoroughly and are content that in ARIA’s specific case, that power is not needed. Again, the two amendments reflect the usual process of improving the Bill in response to scrutiny and the expertise that colleagues here—and in particular in the other place—have brought to bear.

Amendments 11 and 13 remove the amendments previously included in the Bill that had the effect of reserving ARIA. I have had productive discussions on this with my ministerial colleagues in Wales, Scotland and Northern Ireland, to reiterate the importance of ARIA and our broader science policy to help strengthen the Union. I am delighted that they share my vision and ambition for ARIA and that we have reached an agreement on the independence of ARIA—a memorandum of understanding that is a shared commitment to safeguard the organisation’s most important characteristics, and which means the reservations are not needed. I am delighted to be able to report that legislative consent motions have been passed in all three devolved legislatures on the basis of that agreement, and I similarly commend it to the House.

Government amendments 12, 14 and 15 apply some relevant obligations to ARIA that would normally apply automatically to public authorities listed in the Freedom of Information Act 2000. The amendments provide for ARIA to be treated as a public authority for the purposes of the Data Protection Act 2018, the Income Tax (Earnings and Pensions) Act 2003, the Enterprise Act 2016 and the Small Business, Enterprise and Employment Act 2015. They also amend various regulations and the UK GDPR to reflect that. That ensures that ARIA is treated in the same way as a public organisation normally would be treated in those important areas.

Daniel Zeichner Portrait Daniel Zeichner (Cambridge) (Lab)
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The Minister will know from previous discussions that the question of freedom of information has come up before. Would it not be much simpler just to make ARIA subject to the Freedom of Information Act? In the current climate, would that not reassure the public?

George Freeman Portrait George Freeman
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It may reassure the public, but we also have to take into consideration the fact that to succeed, world-class scientists have been recruited to ARIA to lead in cutting-edge science. That very small staff need to be sure that they will not be tied up answering 101—often spurious—freedom of information requests from the media, who are keen on running stories. We want to make sure the agency is accountable properly but not bogged down in what can be hugely onerous freedom of information requests.

John Redwood Portrait John Redwood (Wokingham) (Con)
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In that connection, could the Minister give the House some brief guidance on what he, as the accountable Minister, would expect by way of discussion and influence over corporate plans and budgets and onward reporting to the House?

George Freeman Portrait George Freeman
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I am grateful to my right hon. Friend for that question, and he will not be surprised to know that it is one I have also been asking since coming to this role. The point of ARIA is to be a new agency for doing new science in new ways, and it has been structured specifically to avoid meddling Ministers, even those with a good idea, and meddling officials, even those with good intent, and to create an agency that is free.

My right hon. Friend asks an important question. As we appoint the chief executive officer and the chair, the framework agreement will set out, a bit like a subscription agreement, the agency’s operating parameters, which will be published in due course. Each year ARIA will have to report on its stated plans. Crucially, as is so often not the case in scientific endeavour, ARIA will report where happy failure has occurred so that we do not continue to pour more money into scientific programmes that have not succeeded, which I know will reassure him. We want ARIA to be free to be honest about that, and not embarrassed. ARIA will be annually accountable through the framework agreement.

Finally, Lords amendment 1 deals with the conditions that ARIA may attach to its financial support. This arises from a series of important discussions in the other place relating to ARIA’s duty to commercialise intellectual property that may be generated, which I am keen to address properly. However, the amendment, as drafted, does not actually prevent ARIA from doing anything; it adds examples of conditions that ARIA may attach to financial support, but ARIA already has the general power to do just that. Legally, the amendment simply represents a drafting change. As such, we cannot accept it, but we understand and acknowledge the importance of the point that the noble Lord Browne had in mind.

It is our firm belief that, although it is not appropriate at this stage to specify ARIA’s contracting and granting arrangements in legislation, we recognise the substance of the concerns underlying the amendment: namely, that ARIA should have a duty to the taxpayer to ensure it is not haemorrhaging intellectual property of value to the UK. I will outline our position on that.

The amendment focuses principally on overseas acquisition of IP relating to the principles on which the Government intervene in foreign takeovers of UK businesses, particularly where those businesses have benefited from public investment in research and development activities. The National Security and Investment Act 2021, which fully commenced earlier this month, provides just such a framework, and it marks the biggest upgrade of investment screening in the UK for 20 years.

The NSI Act covers relevant sectors, such as quantum technologies and synthetic biology, that have benefited from significant public investment, and it permits the Government to scrutinise acquisitions on national security grounds. This new investment screening regime supports the UK’s world-leading reputation as an attractive place to invest, and it has been debated extensively in both Houses very recently. We do not believe that revisiting those debates today would be productive.

Although the NSI Act provides a statutory framework, a much broader strand of work is under way. As Science Minister, I take very seriously the security of our academic and research community. A number of measures have been taken in the past few months and years to strengthen our protections. We are working closely with the sector to help it identify and address risks from overseas collaborations, while supporting academic freedom of thought and institutional independence.

Members do not need me to tell them that intellectual property is incredibly valuable and we increasingly face both sovereign and industrial espionage. It is important that we are able to support our universities to be aware of those risks and to avoid them. The Bill already provides the Secretary of State with a broad power of direction over ARIA on issues of national security, which provides a strong mechanism to intervene in its activities in the unlikely event it is necessary to do so.

Stephen Flynn Portrait Stephen Flynn (Aberdeen South) (SNP)
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I welcome the Minister to the Dispatch Box for the first time on this Bill. He is saying that ARIA can already do this, so the Government do not need to legislate in this regard, but that the Government would, none the less, be keen to see ARIA do it. There seems to be a discrepancy in that thought process.

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George Freeman Portrait George Freeman
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There is no discrepancy. I will explain why but, essentially, the Bill already sets out ARIA’s statutory responsibility to generate economic return for the UK, and the hon. Gentleman will know, as I do from my career negotiating intellectual property agreements, that at this stage it would be wholly inappropriate to mandate in statute the form that these intellectual property agreements will take. To be blunt, we do not yet know what programmes the chair and chief executive will put in place. It is only when we know the sort of science that ARIA is doing that we will possibly be in a position, through the framework agreement, to set out the appropriate ways to ensure that value is maximised.

Security issues will also be a core consideration in ARIA’s governance arrangements in the framework agreement to ensure its effective functioning as an organisation. I confirm to colleagues that the framework document, which deals with those issues, will include obligations on ARIA to work closely with our national security apparatus. That is prudent to ensure that ARIA’s research is protected from hostile states and actors and to stay connected to the Government’s wider agenda on strategic technological advantage.

The Government’s chief scientist, who will be on the ARIA board, will bring intelligence and expertise across security issues within Government, supported by the new Office for Science and Technology Strategy and the National Science and Technology Council. ARIA will of course have internal expertise to advise its board and programme managers, while also working with recipients of its funding in universities and businesses on research-specific security issues. That will be vital for ARIA to stay at the forefront of responding to the challenging nature of the UK’s interests in this area.

There is also the question of how ARIA responds to the UK’s strategic interests in science and technology more generally where they may not quite fall under the national security umbrella. The integrated review, the creation of the new OSTS and the National Science and Technology Council, on which I sit, outline our ambition to ensure that there is a serious, strategic machinery of government commitment to the strategic industrial advantage of UK science and technology. That is a fundamental priority for me and the Government more broadly.

ARIA is nestled within that structure and is required to be aware of all those priorities, but we must keep its role in perspective. It will be only a small part of a landscape that we are explicitly seeking to make independent of Government and free to explore new funding approaches. The whole point of ARIA is to be a new agency and to do new science in new ways.

Graham Stringer Portrait Graham Stringer (Blackley and Broughton) (Lab)
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The Minister is being admirably blunt about keeping interfering Ministers and officials from controlling or influencing ARIA, but there is also influence from the scientific establishment, which has its own programmes and would like the sums of money in ARIA to go to them. Given the structure of the board, is he satisfied that ARIA will maintain its independence not just from the civil service and Ministers, but from the scientific establishment?

George Freeman Portrait George Freeman
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The hon. Member raises a very important point. Yes, I am satisfied, and for this reason: the way in which the agency has been established through the Bill and our plans to appoint the CEO and the chair on the basis that they will set out a very bold vision for ARIA to be the agency for new science in new ways. All the support that we are providing is specifically designed to allow them to operate in an environment where they can draw on the very best of UK science infrastructure and expertise, but not find themselves bound by either the short-term grant application process that dominates or the often substantial interests seeking investment in their own field. We will be able to attract the people we intend to attract because of that freedom. For that reason, I am confident—as that will be set out in the framework agreement and held to account by the board of ARIA and the scientific advisory board—that we will be able to ensure that that is the case.

Although ARIA will operate independently, it will be guided by key obligations regarding economic and UK benefit. ARIA must, in all its activity, have regard to the economic growth or economic benefit in the UK, alongside other considerations. That statutory obligation is set out clearly in clause 2(6), and it is right that that is in the Bill. Public investment in R&D must drive long-term socioeconomic benefit and deliver value to UK taxpayers. ARIA will be scrutinised by Government and Parliament on how effectively it fulfils its functions, including that one.

I can confirm that mechanisms for that scrutiny will be in the framework agreement. This includes requiring an internal evaluation framework for ARIA programmes—that deals with the point made by my right hon. Friend the Member for Wokingham (John Redwood)—and looking at, for example, their expected benefits and alignment with the organisation’s strategic objectives. It also includes setting the terms on which ARIA produces annual accounts and reporting, through which ARIA’s CEO will be accountable to Parliament for how the resources allocated to it are used. The National Audit Office will be able to examine the value for money of ARIA’s activities, and we in the Government must be assured of that value, on which ARIA’s future funding will depend. Everyone involved is clear about that.

There are many ways in which the obligations that I have set out might be felt in respect of how ARIA operates. For example, ARIA may employ contracting arrangements that require funding recipients either to seek to exploit the outputs in the UK or forfeit the funding, as other funders routinely do. In some cases, ARIA may retain IP rights—it has that freedom—and will be able to draw on specialist support from the new Government office for technology transfer. That will help ARIA to extract the greatest possible value from its knowledge assets.

In general, we expect ARIA programmes to produce long-term, deep scientific benefits that are felt over the long term, and to support the highest-risk research where there is a clear role for public funding. It would be premature to seek to legislate in statute at this point, before the appointment of the CEO and the chair or the establishment of the funding programme plan. In addition to that being premature, given that its very freedoms will be a major attraction for people to come from around the world to work at the agency, we are concerned that to be seen to shackle those freedoms in statute may well disincentivise the most innovative scientists and researchers from coming to join programmes.

Finally, this issue encompasses the entirety of our R&D system and approach to investment in UK science and technology and we are extremely focused on it, but changes to ARIA alone cannot alter the wider environment. We must ensure that funding from ARIA is not subject to more stringent conditions than other public R&D funders, because that would undermine the independence and agility that are the defining characteristics of this exciting initiative for UK science.

Chi Onwurah Portrait Chi Onwurah (Newcastle upon Tyne Central) (Lab)
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I welcome the Minister to his place in leading on this important Bill and echo his thanks to the former Minister, the hon. Member for Derby North (Amanda Solloway). I also thank colleagues in the other place who have worked so hard to improve the Bill. In particular, I thank my noble Friend Lord Browne for his successful and much-needed amendment to protect Britain’s intellectual property.

The UK has a proud tradition in science and innovation. We are renowned around the world for the scientific breakthroughs and discoveries that have pushed humanity forwards. From the discovery of penicillin to the invention of Stephenson’s Rocket—in Newcastle—UK science has again and again pushed the boundaries of humanity’s knowledge.

UK science is not only inspiring but key to our health and that of our economy, as the pandemic has shown. Our university research base alone contributes £95 billion to the economy, supporting nearly 1 million jobs in science institutes, charities and businesses of all sizes. We have many innovative start-ups throughout the country that require only the right support to contribute to the innovation nation that our history, economy, security and future prosperity all demand. That is why it is so important that we get the Advanced Research and Invention Agency right.

ARIA, originally the brainchild of very-much-former adviser Dominic Cummings, is positioned as a high-risk, high-reward research agency, based on the Defence Advanced Research Projects Agency in the US. Labour welcomed ARIA and continues to support it—it has great potential to fill a gap in the UK’s research and development landscape and help deliver fantastic inventions—but we are clear that the benefits of ARIA’s investments must be felt in the UK. We are equally clear that without Lords amendment 1, that may not be the case.

Lords amendment 1 would give ARIA the option to treat its financial support to a business as convertible into an equity interest in the business and thus to benefit from intellectual property created with ARIA’s support. It would also enable ARIA to require consent during the 10 years following financial or resource support, if the business intended to transfer intellectual property abroad or to transfer a controlling interest to a business not resident in the UK.

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We only want what is truly in the interests of our nation. We are not wedded to a particular form of words and we are willing to discuss an alternative that protects IP, but we need assurances that inventions generated by ARIA support, financial or otherwise, will benefit the UK, and I am afraid to say that the Minister just really has not given such assurances.
George Freeman Portrait George Freeman
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To assist the hon. Lady before she decides whether to divide the House, I just wanted to make it very clear that there is a statutory obligation on ARIA, set out clearly in clause 2(6), that it must have regard to

“economic growth, or an economic benefit, in the United Kingdom”

as a core part of its statutory duties. We simply want to make sure that the leadership team, through the framework agreement, have the freedom to set out what the right mechanism is, rather than to mandate it now.

Chi Onwurah Portrait Chi Onwurah
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I thank the Minister for that intervention, which demonstrates that he is with us in spirit but he just does not want to be with us in actual legislation. There is something of a confusion of thought there. I am very familiar with the clauses that require ARIA to have regard to economic benefit, but if he thinks this is something ARIA should be doing and should look to do—again, as we have said, this amendment is enabling and not prescriptive—surely he should be happy to make that clear. If he thinks it is too constraining for ARIA to do this, he ought to make that clear. He is the Minister and this Bill should reflect what the intent is, and the intent should be to ensure that the benefits from intellectual property generated, created and invented in the UK should be felt in the UK.

Lords amendments 2 to 8 limit ministerial powers to dissolve ARIA, in response to the delegated powers in the Regulatory Reform Committee’s report on the Bill, and we will not oppose those amendments. They prohibit the Minister from making consequential amendments to primary legislation and from dissolving ARIA in the first 10 years. Lords amendments 9 and 10 remove the Minister’s powers to determine a pension or gratuity for non-executive ARIA members. It should be noted that the Minister appoints non-executive members to ARIA’s board, and it is refreshing to see a Conservative Government taking steps to limit cronyism in advance of major losses to the public purse. Lords amendments 11 and 13 mean that ARIA will no longer be treated a reserved matter in relation to Scotland, Wales and Northern Ireland, and we also do not oppose this. Labour is clear that devolved voices must be heard and that scientific opportunities must be spread across the UK, so the consent of devolved Administrations is crucial.

Lords amendments 12, 14 and 15 provide for ARIA to be treated as a public body under the Income Tax (Earnings and Pensions) Act 2003, the Small Business, Enterprise and Employment Act 2015, the Enterprise Act 2016 and the Data Protection Act 2018. My colleague in the other place, Baroness Chapman of Darlington, pointed out, as did my hon. Friend the Member for Cambridge (Daniel Zeichner), that this would not be necessary if ARIA was subject to freedom of information requests, something that Labour has repeatedly called for. The Government were so busy trying to ensure that ARIA would not be treated as a public body for the purposes of FOI that they had to tack on these amendments. That these amendments were tabled only at the Committee stage in the Lords points to Government negligence. We have here a Government too busy trying to avoid accountability to do their job properly— why does that sound so familiar?

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19:44

Division 178

Ayes: 304

Noes: 208

Lords amendment 1 disagreed to.

Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

Read Full debate

This text is a record of ministerial contributions to a debate held as part of the Advanced Research and Invention Agency Act 2022 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Callanan Portrait Lord Callanan
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That this House do not insist on its Amendment 1, to which the Commons have disagreed for their Reason 1A.

1A: Because it would make provision relating to the administration of financial support provided out of public funds, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, before turning to the substance of the amendment, I thought it would be a good time to address briefly the other major milestone in the creation of ARIA that we have reached since the Bill was last before this House. On 1 February, Dr Peter Highnam was announced as ARIA’s first CEO. I know that Peers had significant interest in this appointment during our previous debate on the Bill, given the critical role the CEO will play in leading the formation of the agency and directing its initial funding.

I hope noble Lords are reassured by Dr Highnam’s wealth of experience, as he joins from DARPA where he has served as deputy director since February 2018. I hope noble Lords will agree that he is uniquely capable of stepping into what will be a very important role at such a critical stage of its development. He will take up his post in May, starting discussions with stakeholders in the UK R&D system across academia, business, government and, of course, here in Parliament.

Amendment 1 deals with the conditions that ARIA may attach to its financial support, in response to the considerable concerns that have been so carefully and expertly championed by the noble Lord, Lord Browne of Ladyton. In his concluding remarks on Report, the noble Lord set out his desire, following more informal discussions, to hear my colleague, the Minster for Science, Research and Innovation, outline the Government’s position on this issue in the House of Commons. I certainly hope that, having heard the Minister’s remarks last Monday, he will have been pleased to hear him go slightly further than I was able to go when we last discussed the Bill in this House.

The Minister gave further assurances on two aspects, which I will quickly repeat here. The first is the seriousness with which he is taking the security of our academic and research communities, and new activities to identify and address risks from overseas collaborations while supporting institutional independence. He confirmed that obligations would be placed on ARIA to work closely with our national security apparatus, to maintain internal expertise to advise ARIA’s board and programme managers, and to work with the recipients of ARIA’s funding in universities and businesses on research-specific security issues. This will ensure that ARIA’s research and innovation is protected from hostile actors, and, most importantly, connected to the Government’s wider agenda on strategic technological advantage.

Secondly, and more broadly, the Minister addressed the benefits created by ARIA and our approach to maximising and retaining them. Specific businesses, often in important and emerging areas of technology, have been mentioned many times during our debate on this amendment, and the lack of consistent guiding principles behind the engagement and support that they have received from government has been held up for particular criticism. On this, I hope that noble Lords noted the Science Minister’s identification of the serious new machinery of government coming together to drive the agenda of strategic industrial advantage of UK science and technology as a fundamental priority for the Government and for him personally.

The office for science and technology strategy, the national technology adviser and national science and technology council together represent a new and significant architecture to support a new strategic government approach. Clearly, some patience will be needed while this beds in, but the ambition which the Science Minister outlined behind this change should go at least some way towards addressing the concerns that have been raised previously by the noble Lord, Lord Browne.

Similarly, questions have been raised in both Houses about ARIA’s obligations to create wider public benefit, and I should reiterate that public investment in research and development, including through ARIA, must drive long-term socioeconomic benefit and deliver value to UK taxpayers. This obligation will be felt by ARIA on several levels: first, through the Bill and ARIA’s statutory duty in Clause 2(6) to consider economic growth or economic benefit to the UK, among other considerations. This is the right degree of specificity for primary legislation. Secondly, mechanisms for assessing how effectively ARIA carries out its functions, including this duty towards UK benefit, will be detailed in ARIA’s framework document. This was the other set of commitments which the Science Minister provided in the House of Commons.

These mechanisms will enable the action that ARIA takes to respond to its statutory duty towards UK benefit to be evaluated. As the Minister set out, this will include obligations for ARIA to put in place a programme evaluation framework, considering its strategic objectives as well as detailing the contents of its reporting, which the Government and Parliament will use to hold ARIA to account for the value it provides in all the usual ways. Again, it is right that these more specific obligations are included in the framework document, as they must reflect the structure of ARIA’s programmes and require greater flexibility. These obligations will be set as ARIA’s overall governance and evaluation framework is finalised over the coming months, but I should like to echo the Science Minister’s comments that we will take seriously the concerns raised in the context of this amendment when doing so, as we share many of them.

The third and final aspect concerns the ways in which ARIA implements the obligations imposed on it—the statutory duty in the Bill and the obligations within the framework agreement that will help to give effect to it. As I have stated previously, we might expect ARIA to do so through its contracting and granting arrangements by requiring financial support to be repaid if recipients do not make an effort to exploit the outcomes within the UK—or, in some cases, by taking equity or retaining IP rights and seeking to maximise the value of these assets within the public sector. The Bill enables ARIA to do these things, but it is an arm’s-length body; we have placed a premium on its operational independence, and government should not intervene in its decision-making on these issues.

The questions for us here should be these. Does ARIA have all the powers and tools it needs to choose independently from a full suite of ways in which to deliver these obligations? I would submit that it does. Have we got the balance right in the first place with the obligations to produce and evidence benefit placed on ARIA through the Bill and in the framework document, which we then use to hold it to account? On the second point, I recognise that noble Lords have been pressing for us to go further, and I should reflect that in response to the questions posed in this House, and by the noble Lord, Lord Browne, in particular, we have now made concrete commitments to Parliament about the obligations on ARIA and greatly refined our thinking on the work that it is still to do.

I hope the Science Minister’s assurances were useful in demonstrating the seriousness with which these concerns are being taken and our commitment to reflecting a mindset focused on public benefit in ARIA’s governance framework, as that document is finalised. I therefore strongly hope that noble Lords will be content with the progress that has been made on this issue and I look forward to reaching further milestones in the creation of this important new public body. I beg to move.

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Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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My Lords, we accept the reason given by the other place for rejecting Amendment 1, but we continue to disagree on the substance. I place on record my thanks to the noble Lord, Lord Browne of Ladyton, for his work on this amendment. His sparkling curiosity and polymath tendencies, combined with his government experience, make him ideally suited to this issue. He has been incredibly generous with his time and knowledge, and I am grateful to him for that.

The noble Lord, Lord Browne, suggested a sensible amendment to protect benefits arising from the UK’s creativity and ingenuity in ensuring that the taxpayer—the investor—retains the benefit of it. The majority of noble Lords agreed with my noble friend when we tested the will of the House. In the absence of any measures enabling sufficient scrutiny of ARIA’s activities, we felt we needed this amendment. We are clear that the benefits of ARIA’s investments must be felt in the UK. Lords Amendment 1 would have assisted in this; it would have given ARIA the option to treat its financial support to a business as convertible into an equity interest in the business, and thus to benefit from intellectual property created with ARIA’s support.

It would also have enabled ARIA to require consent during the 10 years following financial or resource support if the business intended to transfer intellectual property abroad or transfer a controlling interest to a business not resident in the UK. As my honourable friend Chi Onwurah said in the other place, we have to acknowledge that currently

“the UK does not provide a sufficiently supportive environment for innovation start-ups to thrive. That is why we have already lost so many of them.”—[Official Report, Commons, 31/2/21; col. 89.]

It is welcome that Ministers have said they agree with our concerns. It is just unfortunate that the Government did not want to take this opportunity to act on our shared concerns and seemed to lack the resolve to do anything about it on this occasion. Finally, I wish the new leadership of ARIA and the agency itself well. We look forward to the innovations and inventions that it is able to bring us.

Lord Callanan Portrait Lord Callanan (Con)
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I thank the noble Lord, Lord Browne, in particular, and all noble Lords who participated in this brief debate. I do not think there is a huge disagreement between us on this. The noble Lord, Lord Browne, wanted us to be more specific; our point is that ARIA already has the power and ability to do all the things he mentioned, but we want it to retain its operational independence and flexibility.

I will address a number of the points the noble Lord raised. He will have carefully noted, and from his ministerial experience will know, that in the National Security and Investment Act we deliberately did not define what national security is, following the practice of all previous Governments, to give ourselves the flexibility to adapt to changing circumstances.

The noble Lord also asked for further details on what the Science Minister said in the other place. We have published guidance to the sector on trusted research and supported it in publishing that guidance. We have broadened the scope of the academic technology access scheme and defined the rules on export controls as they apply to research activity. The terms and conditions for government research grants were also amended last September to require due diligence and checks for any overseas collaboration.

As expected, a number of noble Lords raised the framework document. The noble Lord, Lord Fox, is right: I have not seen a final version of the framework document precisely because it has not been finished yet. It will be negotiated between BEIS and ARIA’s leadership team, including the new chief executive and chairman when he or she is appointed, for which we are currently recruiting. I assure the House that as soon as it has been agreed, we will share it with the House as soon as possible.

My noble friend Lord Lansley asked a very good question about the retention of any possible revenues within ARIA. He will know from his government experience that the Treasury will wish to negotiate these matters directly with the agency, so I will not step on the Chancellor’s toes and get myself into trouble by overcommitting him on that. I am sure that ARIA and the Treasury will want to have a full and frank discussion on these matters.

On the questions from the noble Lord, Lord Fox, I assure him that we expect ARIA to work with all partners across the research and development landscape, including on the commercialisation of products. He asked for a meeting with me. I suggest that I am not the right person to meet on that issue; it would be more appropriate for him to meet the Science Minister, who has responsibility for pursuing this support for the agency, and I will certainly put that question to him.

The ARIA team has met UKRI and its sponsors. We are learning lessons from this and other mindsets and models for how ARIA can ensure the successful translation and commercialisation of its technologies. I hope that that provides the appropriate assurances for the noble Lord, Lord Fox.

I think I have dealt with all the questions that were asked. With that, I beg to move.

Motion A agreed.