Advanced Research and Invention Agency Bill

(Limited Text - Ministerial Extracts only)

Committee stage
Wednesday 17th November 2021 Grand Committee

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

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 (Con)]

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 (Con)]

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 (Con)]

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 (LD)]

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 (Con)]

I will write to the noble Lord with the legal details he requires.

[Baroness Noakes (Con)]

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 (CB)]

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 (Con)]

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.