Governance of the Union (Constitution Committee Report)
Baroness Drake
That the Grand Committee takes note of the Report from the Constitution Committee The Governance of the Union: Consultation, Co-operation and Legislative Consent (1st Report, HL Paper 13).
Baroness Drake (Lab)
My Lords, the Constitution Committee has published a number of insightful reports on the governance of the union. Among the most significant was the 2022 publication Respect and Co-operation: Building a Stronger Union for the 21st Century. This report meticulously highlighted the worrying deterioration in relations between the UK Government and the devolved Administrations. It traced the erosion of trust and the growing sense of division that was largely attributed to a perceived lack of co-operation and respect in intergovernmental relations. Moreover, it pointed to insufficient commitment to the process of consultation and engagement between the Governments of the United Kingdom.
Continuing concerns about the state of relations between the UK Government and the devolved Administrations prompted the committee to conduct a follow-up inquiry, which brings us to the subject of today’s report, The Governance of the Union. This new report acknowledges that the union faced serious strains. It is undeniable that events such as Brexit, the challenges of Covid, the growing aspirations for independence in Scotland and the suspension of institutions in Northern Ireland presented major challenges, but these challenges, while very significant, do not entirely account for the difficulties in governance. These strains have in fact exposed deeper systemic deficiencies in the structures and processes of intergovernmental relations.
In an earlier report, the committee perceptively recommended the greater use of formal intergovernmental mechanisms, which are likely to become increasingly important when Governments of different political persuasions have to deal with each other and tensions inevitably arise. In 2018, Ministers agreed to review the existing intergovernmental structures and, in January 2022, the UK and devolved Governments jointly agreed to implement a new intergovernmental relations structure. The committee sought to determine whether the distinct pressures of recent years—Brexit, the pandemic, political tensions—remained present and whether the new structures are robust enough to weather future stresses. In doing so, it focused on: whether the intergovernmental relations structures introduced in 2022 are functioning effectively and whether they could be improved; observance of the Sewel convention; and the increasing use of primary legislation by the Government to empower UK Ministers to make secondary legislation and use Henry VIII powers in areas of devolved competence. Whatever the merits of a particular participant’s views, the evidence revealed a pervasive sense of lack of trust, respect and confidence in the system of intergovernmental relations.
The new intergovernmental structures introduced in 2022 represent a welcome initiative. They have the potential to address long-standing criticisms of the intergovernmental framework. Specifically, they aim to create a more regular, transparent and formal system of intergovernmental working and greater transparency, accountability and scrutiny from each Government’s respective legislatures. To realise these benefits, however, it is essential that the Government fully integrate these mechanisms into the day-to-day workings of government. The commitment to enhanced reporting made by all four Governments is a step in the right direction, but to fulfil this commitment all four must ensure that the reporting is timely, detailed and conducive to meaningful scrutiny by their respective legislators.
In this regard, the Government have made some positive moves. They have committed to renew opportunities for the Prime Minister and the heads of devolved Governments to collaborate with each other. They have acknowledged the importance of transparency and have asked the committee what additional information would be useful to see in their annual transparency report. They have committed to keeping the committee’s suggestions under review, including those for greater qualitative analysis for the state of intergovernmental relations, data on the legislative consent process, headline data on the number of meetings held at prime ministerial, Secretary of State or ministerial level, and links to the communiqués published after intergovernmental meetings. The effectiveness of these new structures will depend heavily on how they are operated in practice. Positive engagement and the sharing of information will be essential for success. Both the Government and the devolved Administrations must demonstrate a commitment to collaboration and transparency.
One important recommendation from the committee is the inclusion of a principle of positive engagement to be added to the existing principles in the 2022 review of intergovernmental relations. The Government have expressed agreement on the importance of attitudes and behaviours, pointing to their collaboration with the Scottish Government on the establishment of GB Energy as an example of positive engagement. However, it was disappointing that they did not accept the introduction of such a principle of positive engagement. Their argument was that updating intergovernmental relations principles is a shared responsibility across all four Governments. While I appreciate the point, it is crucial that the Government lead by example, particularly given their dominant position in the union. Can the Minister provide an update to the House on the qualitative progress of transparency and positive engagement in intergovernmental relations? How are these principles being embedded in practice?
Another key area explored by the committee is common frameworks. The report urges the Government to mobilise every effort to implement all 32 common frameworks agreed between the Government and the devolved Administrations. With the restoration of devolved institutions in Northern Ireland, these frameworks provide an important example of intergovernmental co-operation on important policy areas across the constituent nations of the union. I take the opportunity to acknowledge the dedicated efforts of my noble friend Lady Andrews, as chair of the Common Frameworks Scrutiny Committee, and her colleagues for their tireless work in supporting those frameworks. Can the Minister update us on progress towards implementing the common frameworks programme?
The committee’s report highlights the importance of the wider machinery of government in facilitating effective intergovernmental relations. The appointment of a Minister for Intergovernmental Relations, based in the Cabinet Office, is a welcome step. The Minister, along with the Minister for the Constitution and European Union Relations, must work closely together to ensure a shared understanding of the devolved settlement and to protect the integrity of intergovernmental relations in whatever new arrangements may be introduced.
Turning to the Sewel convention, the committee considered the extent to which it had been observed prior to and since Brexit. The convention that the UK Parliament should “not normally” legislate on devolved matters without consent was well observed from 1999 until it came under strain following Brexit. The departure from the EU and the return of powers to Westminster and the devolved Administrations led to a significant increase in policy areas where the boundary between reserved and devolved matters was less than clear and the need for legislative consent became contested. On occasions, the devolved Governments took a more expansive view than the UK Government on whether consent was required, leading to differences of opinion and a deterioration in relations.
Since Brexit, the UK Government legislated without the consent of one or more devolved legislatures on multiple occasions and, at times, in relation to Bills unrelated to Brexit. This may be the result, in part, of the devolved Governments taking a more expansive view, but the trend is a matter of concern and highlights the need for closer and timely engagement between the UK Government and the devolved Administrations, even where devolved Governments are opposed to the union.
Confidence in the observance of the Sewel convention has declined and the committee rightly calls for improvements in its observance. The committee rejected the idea of replacing the Sewel convention with an express legal duty, as this would introduce rigidity and potentially involve the courts in what is fundamentally a political matter.
The Government are the more powerful, however. They must demonstrate greater awareness of the potential impacts of their policies on the devolved nations and engage in constructive dialogue to resolve differences. But there is also a need for a reciprocal convention requiring devolved Administrations to notify the UK Government of devolved legislation that could impact on reserved matters. A new principle of notification and engagement could be a feature in the Government’s proposed new memorandum of understanding, outlining how the nations will work together for the common good.
The report also recommends a greater role for Parliament and the Lords in scrutinising legislation that engages the Sewel convention. It suggests that the Government should go beyond the current Explanatory Notes and submit a memorandum to the House explaining the devolution implications of Bills and engagement. If the Government consider that consent is not required, they should justify that decision at the outset of the Bill’s consideration.
The Government agreed that greater transparency around engagement on Bills and their devolution implications would be helpful and are committed to delivering a new memorandum of understanding on legislation, which they hope to publish later this year. Can the Minister update the House on the progress on this new memorandum of understanding and on the proposals for greater transparency in the engagement process?
Another critical area addressed by the committee is the disturbing rise in the Government’s use of secondary legislation and Henry VIII powers to empower Ministers to make secondary legislation in areas of devolved competence or to amend Acts of the devolved legislatures. While the Sewel convention does not apply to secondary legislation, the committee recommends that the use of such powers in devolved competence areas should be accompanied by a requirement to consult. Furthermore, the Government should publish clear criteria on when such powers should not normally be exercised without consent of the relevant devolved legislatures.
Where UK legislation empowers UK Ministers to alter Acts of the devolved legislatures, they should not normally be exercised without the explicit consent of the relevant legislatures. The committee observed that it would be “constitutionally questionable” for Parliament to circumvent Sewel by introducing Henry VIII powers in a way that foresees or intends changing devolved legislation in areas of devolved competence. The Government committed to considering these proposals in their work with devolved Governments on legislation. Could the Minister update the House on the Government’s considerations, including setting out the circumstances in which the UK Government ought “not normally” to exercise a delegated power without consent?
Finally, I express gratitude to all those who gave written or oral evidence to the inquiry, which was of great value. I thank my excellent committee members for their depth of engagement with the governance of the union. Indeed, the noble Baroness, Lady Finn, was a much-valued member of the committee when the report was prepared. I also thank the committee clerk Kate Wallis and policy adviser Alice Edmonston for so ably supporting the committee. I beg to move.
Baroness Coffey (Con)
My name is on the list, but I have withdrawn from the debate because I am moving an amendment in the Chamber—but I am very interested in the issue. That is why I am here.
Lord Thomas of Gresford (LD)
My Lords, it seems to be my turn. I was a member of the Constitution Committee under our excellent chair, the noble Baroness, Lady Drake. I thank her for the way in which she chaired this report, which I fully supported.
I was particularly concerned at the increasing disregard of the Sewel convention, beginning with Boris Johnson’s Government. Among the many strains caused by Brexit, to which the noble Baroness, Lady Drake, just referred, tensions with the devolved Administrations and Parliaments featured highly. Legislative consent was frequently sought at short notice and refusals by the devolved Parliaments to pass legislative consent Motions were ignored.
I have a quasi-proprietorial attachment to the Sewel convention, because I was present when it was announced by Lord Sewel on a late warm July evening in 1998. My great friend, Lord Mackay of Drumadoon, then Conservative spokesman on Scottish and constitutional affairs, introduced into the Scotland Bill what he described as “a small drafting amendment”, stating to the effect that, in any legislative conflict between the Westminster and the Scottish Parliaments, Westminster would prevail. He said that he was not looking to vote on it. My colleague and close friend Lord Mackie of Benshie intervened to say that the amendment went to the whole root of devolution. Lord Sewel then said, seemingly off the cuff:
“However, as happened in Northern Ireland earlier in the century, we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament”.
He continued:
“I cannot believe that it is beyond our wit to develop such a convention. That is much more suitable than through the business of legislative ping-pong or tennis … There should be mature political dialogue to resolve a difference, which is better than legislative tennis”.—[Official Report, 21/7/1998; col. 791.]
The convention was later given legislative recognition in Section 2 of the Scotland Act 2016 and of the Wales Act 2017.
On 26 March, in his letter to Lord Strathclyde, the current chairman of the committee, Pat McFadden said that, as set out in the 2024 manifesto, the Government will
“strengthen the Sewel Convention through setting out a new MoU with the devolved governments”.
Work, he said, was under way after initial discussions last year and he is hoping for a new memorandum of understanding to be agreed by the end of the year. I have studied the Labour manifesto. Nothing is said about the Sewel convention in any of its sections relating to Wales, Scotland or Northern Ireland, although it promises
“to end the chaos of sleaze and division, turn the page, and reset politics”.
In the Government’s response to our report, in which we had called for the Sewel convention to be respected, the Government said that they would
“establish a mutual baseline for engagement, and the importance of good policy outcomes, as the main objective of legislation UK-wide”.
I feel as an Athenian supplicant must have felt after sacrificing the odd goat or two at Delphi. What on earth is a “mutual baseline for engagement”? I think the time has come for some clarity.
In strengthening and revising the convention and the MoU, what opportunity will there be for representations from the devolved Administrations and Parliament, from political parties and other stakeholders? What guarantees are intended for the convention to be respected and followed? Do the Government intend to strengthen Westminster as against Cardiff, Belfast and Edinburgh? Or are the Government looking at a particular area of policy which may cross borders, such as national security? Will they pay attention to the call made just now by the noble Baroness, Lady Drake, for consideration to be given to a reciprocal convention in relation to the devolved Administrations? What indeed is the “mutual baseline for engagement” and how will it be applied to ensure that the nations of the United Kingdom work harmoniously together, whatever the political nature of their Administrations?
Lord Kerr of Kinlochard (CB)
I have never been a member of the Constitution Committee; I have asked regularly to become a member and have regularly been rejected. It is my youth and exuberance, I think, that are not there; I am working on both.
I can speak only of Scotland, but I think this is an excellent report. My experience is that what really matters—and the report says this—are not so much institutional frameworks but mutual respect. I was a unionist foot soldier in the 2014 army, and I was shocked that disdainful Achilles sulked in his No. 10 tent and played no part in the campaign. I was also shocked when his victory speech was about not reconciliation and binding up the wounds but English votes for English laws, rubbing salt in the wounds in Scotland.
Subsequently, I used to advise Mrs Sturgeon on EU issues and was astonished at how little she was told about referendum planning and Brexit negotiations. The 27 European Governments knew far more about the negotiations, because of Mr Barnier’s meticulous briefings, than our devolved Governments did. Of course, then came the open contempt and childish insults of the Johnson/Truss period. I am very glad that we seem to have turned that page and that the grown-ups seem to be back. The 2022 arrangements do not seem to have worked perfectly, but they are clearly a lot better than previous ostentatious ostracism.
Bringing intergovernmental relations back to the centre and to the Cabinet Office is a very wise move, but I repeat that what matters are not so much the frameworks as mutual respect. Of course, Scots are absolute experts at having grievances, but there is really no reason to give them a real one. We should seize the moment now, when the wind is not in the SNP’s sails, and reinforce the union by showing that the centre respects, listens to and takes account of the views of the devolved Governments. They are democratically elected, too.
I have two smaller points to make. First, for me, the most striking paragraph in the report is paragraph 303, where the then Secretary of State for Scotland and Wales in the previous Government asserted that
“the Sewel convention should not apply to secondary legislation”.
I am a member of the Secondary Legislation Scrutiny Committee, and this was news to me. Surely it is wrong. I hope that the present Government will honour Sewel in respect of primary legislation rather better than their predecessor did, but I also think that using delegated powers to do by ministerial fiat what Parliament said in the Scotland Act it would normally refrain from doing in primary law seems rather outrageous. I am very glad that, in its report, the committee disagreed with Mr Jack and Mr Davies.
I am not quite clear what the present Government think on that issue. The concluding paragraph of their response to the report is a little enigmatic. It states:
“The Government notes the Committee’s recommendations on developing criteria and publishing guidance on the use of delegated powers in devolved areas, and on engagement with the devolved governments on the use of these powers. The Government will consider this as part of its work on engagement with the devolved governments on legislation”.
Quiet, Sir Humphrey—I remember you well.
Finally, this is a small point but an important one. On cross-postings, positive engagement makes sense, but no such injunction will cut much ice in the public service without common understanding. There used to be many more cross-postings than there are now. When I worked in Brussels and Washington, I always had at least two Edinburgh-based civil servants on my staff. Others were seconded to the Treasury and to the Foreign Office, as well as to the Cabinet Office and No. 10. When I was at the top of the Foreign Office, I presided over two-way exchanges with St Andrew’s House in Edinburgh. I worry that devolution is eroding the concept of a united Civil Service. Of course there will always be problems when the political complexion of the devolved Government is different from that of the central government. That will always cause problems for civil servants, but if you cannot ride two horses you should not be in the circus.
It is very good that the silly jibes about Scotland, the Scottish Government and successive First Ministers have stopped and that we seem to be trying constructively to rebuild. Where is the memorandum of understanding promised by the Government? It is taking a while to cook. I look forward to seeing it.
Baroness Andrews (Lab)
My Lords, it is a real pleasure to follow the noble Lord, Lord Kerr of Kinlochard. I cannot understand why he has not been appointed to the Constitution Committee. I make my formal declaration: he will be nominated collectively by us as soon as possible. We need his forensic examination.
It is a pleasure to take part in this debate and to echo what has been said by the noble Lord, Lord Thomas of Gresford, about my noble friend Lady Drake’s chairmanship. She not only was forensic but made us realise that we have a unique responsibility in the Constitution Committee. Nobody else does that job, and we have to do it with scrupulous attention and vigilance.
That conviction was evident in the report as well, as well as the historical review of how relations between the devolved Administrations and Westminster had deteriorated. Goodness knows there was evidence from our committee and from the Common Frameworks Scrutiny Committee, which I had the privilege of chairing. It was particularly evident during the passage of the internal market Act and of the European retained law Act, and, of course, in the almost systematic disregard for the Sewel convention.
This report, with its emphasis on the union and how it could and should mean more and work better, is particularly timely given the change of Government. In the Government’s response, we see time and again the emphasis that they have reset relationships across the union and that there is more commitment to intergovernmental structures and more respect. We welcome that, and in particular the approach they are now taking to revising the Sewel convention. I will not repeat the magnificent description of it by the noble Lord, Lord Thomas of Gresford. I hope we can have some plain English for
“mutual baseline for engagement, and the importance of good policy outcomes”
as the policy objectives. However, I want to ask the Minister, in addition to translation, whether this is designed to replace or update the convention, or to reinforce the Government’s commitment to it in its present form. I look forward to an answer.
We also welcome the institutional innovations, such as the Council of the Nations and Regions and the specific Minister, but we asked for more transparency. It was all a bit random. We asked for assurances that council meetings would be held consistently and that agendas and attendance would be inclusive as a means of accountability. We had no response on that so, again, perhaps we can be updated on the publication of routine information and the annual report. These are reasonable questions.
In some respects, the responses have been of the “Move on, nothing to see here”, variety. For example, the Government have also rejected the sensible recommendation that the devolution guidance note should be updated to include proposals coming from Wales designed to strength communication across the UK. The Government say it is unnecessary because it is taken care of by the extensive Civil Service devolution capability programme, but we know that training programmes are all about process, not promoting the relationships that mean you know the nuance of devolution and appreciate the cultural diversity that is driving the differences.
Most disappointing, as my noble friend said, is the Government’s refusal to add a principle of positive engagement to those listed in the Review of Intergovernmental Relations. That would send the most powerful signal of all that, as the noble Lord, Lord Kerr, said, what counts is not institutions but the quality of engagement: the visible trust that exists between people who know each other well and can be honest with each other. The Government say that this principle is embedded across the DAs. So far, so familiar: Governments often say that they do not need to do something because everybody who takes an interest in it knows it is already being dealt with. Well, up to a point, but sometimes you need to make things explicit for them to really make a difference.
Let me end on a more positive note, on the future of common frameworks. I am pleased to see some previous members of the marvellous Common Frameworks Scrutiny Committee here. Its demise has left a real gap in access to information about and understanding of the role that common frameworks can and do play in fostering a stronger union. The gap that has been left has been recognised by the Constitution Committee, which is now taking on the task of keeping a watching brief on the operation of the outstanding frameworks, of which there are only three, but also on whether any new developments are coming forward that Parliament needs to know about.
The Government have gone even further and met two of our committee’s most consistent complaints. First, they recognised that common frameworks were originally envisioned as not just managing divergence but agreeing common policy processes—not technical processes. That is their sui generis promise, but it has not yet been realised. The Government have now reverted to their original and positive intention by making it clear that:
“It remains our ambition that Frameworks are used to help develop UK-wide policy where appropriate”.
Hooray for that. Secondly, oversight of the programme is reverting to the Cabinet Office, where it should always have been.
I look forward very much to the Government’s response to this debate on the report, which is important for this House and important for the union.
Lord Norton of Louth (Con)
My Lords, I, too, welcome this report from the Constitution Committee and the fact that it is one of several produced by the committee on the working of our devolved system of government. It has done a commendable job in analysing the process of inter-institutional relations within the UK and setting it within a clear framework of the value of the union.
I chaired the committee when it produced its first report on devolution, Devolution: Inter-Institutional Relations in the United Kingdom, in 2002. Our focus was on ensuring that the relationships worked well and that mechanisms for resolving disputes remained in good working order. At the time, with the same party in control in Westminster, Holyrood and Cardiff Bay, a great deal was done through personal contact. We recognised that one had to plan for a time when different parties were in control. Our foresight was not acted on; had it been, the relationships between the different Administrations may have been stronger than they have been. Indeed, I believe that the union would be stronger had successive Governments paid more heed to recommendations from the Constitution Committee.
I have criticised successive Governments for being in reactive mode in dealing with the devolved Administrations. There has been a tendency to concede powers in the belief that this will persuade people in the different parts of the United Kingdom to support remaining in the union. The reactive mode has a pervasive impact, in that, in day-to-day administration, the needs of the different nations tend to be dealt with as an afterthought and relations conducted on a grace-and-favour basis. The Constitution Committee has pressed consistently for a more proactive approach, putting the case for the union and emphasising the benefits that it delivers to all in the United Kingdom. It has highlighted ways for the relationships between the different Administrations to be strengthened. This report deserves to be given much more visibility than it has been, and is being, accorded.
I wish to focus on the issue of legislative consent and what is misleadingly called the Sewel convention. It was not a convention when it was first articulated, and it is not a convention now. It does not stipulate behaviour that is adhered to invariably. It is a statement of principle—of what can be described as best practice or the Government’s best endeavours. The understanding of its status was confused from the beginning and made worse by being embodied in the Scotland Act 2016 still under the rubric of a convention. I pointed out to the Government at the time that a convention in statute is a contradiction in terms. The Supreme Court in the Miller case recognised that it was no more than a political statement.
We need to get away from talking about the Sewel convention, in part because it is a constitutional nonsense, and because it invites a reaction from devolved Administrations when a measure is introduced. We need to focus on engagement at any early stage—as is delineated in this report—and build on what the Government variously claim is happening: engagement with devolved Administrations when legislation is being developed. As the report emphasises, that should be a two-way process: the devolved Governments should also engage with Whitehall when they are developing legislation. Alongside the noble Lord, Lord Kerr, I endorse the recommendation of the committee that consent should be sought where delegated legislation covers devolved areas.
The Government are working on a memorandum of understanding with the devolved Administrations, which, as we have heard, is expected to be published later this year. This is the only positive element in the Government’s response to the committee’s report; otherwise, the Government are basically satisfied with what is presently in place. The response does not do justice to the committee’s considered report. Given the track record of the Constitution Committee in making the case for the union, and the prescience of its recommendations, it is crucial that the Government adopt a more positive stance and act on those recommendations. I do not want us to debate this again in 20 years’ time and say, “I told you so”. I look forward to the Minister engaging more positively than Pat McFadden’s letter does with this very important report—it deserves better.
Baroness Humphreys (LD)
My Lords, I thank the noble Baroness, Lady Drake, the members of the Constitution Committee and the committee clerks for an excellent, comprehensive report, which I know will make essential reading for Ministers in this place and in the devolved legislatures. It will also be of particular interest to all of us who have to deal with, and sometimes grapple with, the Sewel convention.
This is a poignant occasion for those of us on these Benches. We know that our late noble friend Baroness Randerson would have relished the opportunity to contribute to this debate today. As a Welsh Office Minister in the coalition Government from 2012 to 2015, her dedication to devolution and her influence over its processes was immense. She was also a member of the Common Frameworks Scrutiny Committee, and I know how much pride she took in that role. She is sorely missed.
She and I had a conversation about the Sewel convention in the final months of the previous Conservative Government, when the convention had, once again, been breached. I mentioned how lucky she was to have been in office when things were easier. Her reply was characteristically clear, forthright and kind. She said, “It certainly wasn’t any easier. We worked hard, for long hours, sometimes late into the night, to make sure the Sewel convention wasn’t breached”.
For me, that summed up the difference between pre-2019 and the post-2019 reality we were then living in. Before the 2019 election, there was an understanding in Governments—including Conservative ones—of how precious our devolution settlements are to those of us who live in the devolved nations, and there was firm support of the convention. However, post 2019, Sewel almost seemed to become dispensable, sacrificed on the altar of UK nationalism and the then Conservative Government’s concept of binding the nation together.
The committee’s report confirms that the convention was breached 19 times in the four years after 2020 but had been breached only four times before 2020. This difference in attitudes to the convention, and to devolution itself, is highlighted in the report, with the committee calling for good will on the part of all four Governments of the UK. It emphasises the role of the UK Government, as the most powerful body, in recognising the impacts that their decisions may have on the other nations. Attitude and good will are of course impossible to legislate for, but I commend the committee on its recommendations for improving and strengthening the convention.
The committee calls for a culture of positive engagement to be added to the existing principles for intergovernmental relations. This would be a positive step forward that would make it possible for civil servants to remind Ministers in the UK Government, and in the devolved Governments, of the expectation that they should engage with one another.
The principle of early positive engagement is especially visible from this new UK Labour Government in relation to Wales, and I am grateful for that. With the exception of the Crown Estate Act—where, disappointingly, there was no prior consultation with the Welsh Government—legislative consent Motions from the Senedd now largely express satisfaction with discussions held with the UK Government. On some occasions, the Welsh Government may request the inclusion of their interests in a Bill.
However, I agree with the Senedd’s Legislation, Justice and Constitution Committee in its call for
“a clear engagement timetable … This would provide a more transparent process so that legislatures, governments and stakeholders know what deadlines are being worked to”.
It is frustrating that the Second Reading of a Bill in your Lordships’ House can sometimes take place before the date of publication of the relevant Senedd committee’s report on the LCM. Better joint timetabling could remedy this and should, I believe, be included in the updating of the devolution guidance notes that the committee recommends.
I support these and other committee recommendations. I have to accept the reality that the Sewel convention is perfectly imperfect—or is it imperfectly perfect? I am not too sure. The use of “normally” in the assertion that the UK Government would not normally act in devolved matters leaves it open to interpretation, but it does prevent the devolved legislatures operating in a quasi-federal manner. Federalism would be a welcome step forward for those of us on these Benches, but it is probably a step too far for others.
Lord Murphy of Torfaen (Lab)
Who knows what will happen in the future? They used to sell tickets for the Devolution Committee, which my noble and learned friend Lord Irvine chaired in 1998. They were wonderful affairs, setting up devolution right across the country—including, later, in Northern Ireland. The committee did a great job, but one thing it did not do very well was work out exactly how these devolved Administrations were going to work with each other or with the United Kingdom Government.
After nearly 26 years—I served as Welsh Secretary and as Northern Ireland Secretary in that period—I can say that it did not go very well. In fact, it went very badly at times. Relations were okay when it was the same political party, of course. For example, I could go to Cardiff on a Monday morning and talk to Rhodri Morgan to sort out the problems of the world—and I continued doing that—but it was not quite so easy in Scotland. When I later had to deal, in another capacity, with Alex Salmond, it was a very different picture altogether. As the noble Lord, Lord Norton, said, when there are different parties in Cardiff, Edinburgh and London—as well as in Belfast, of course—it presents a totally different picture.
Over the years, the attempts to bring people together were pretty awful. Prime Ministers did not want to go to the meetings and rarely did. Although we were trying to deal with best practice, it was often too bureaucratic. The meetings were too infrequent. Civil servants wanted to devolve and forget, and let the devolved Administrations get on with things, yet we could learn a great deal from each other—and, eventually, we did. However, there was no real structure for doing that; what there was was wholly inadequate. Any communiqué that came from an intergovernmental meeting was utterly and completely useless—waffle of the worst possible sort that meant absolutely nothing—so, over the years, things got worse and worse. I pay credit to the last Conservative Government because they successfully started to change the way in which the devolved Administrations and the United Kingdom Government worked. That was good, but there are a couple of things that we could look at; they have been partly highlighted by this excellent report from the noble Baroness, Lady Drake.
The first is the use of the territorial departments. There are a couple of paragraphs saying that it is a good thing to have them, but we need to look much more carefully at how they operate. It is a good idea that the Cabinet Office now takes responsibility for intergovernmental relations, but you can bet your bottom dollar that Pat McFadden and Nick Thomas-Symonds have a million other things to deal with. There must come a time when we have Ministers wholly dedicated to the question of devolution and relations between the Governments, and that has to work within the structure of the Secretaries of State for Northern Ireland, Wales and Scotland. How that operates I do not know, but those departments are entirely devoted to relations between those countries and the United Kingdom Government. Why do we not use them more? Why is that not seen as the way forward? There is not enough on that in the report and certainly not enough in the Government’s response, bearing in mind that those are three Cabinet Ministers dealing with the devolved areas and Administrations.
Next, as far as I can see, there is nothing in the structure we are dealing with today that addresses interparliamentary relations rather than Government-to-Government and Executive-to-Executive relations. But there is an organisation that does precisely that, which resulted from strand 3 of the Good Friday agreement, which I and my Irish counterpart chaired all those years ago. We set up a sophisticated mechanism by which the devolved Parliaments—the Scottish Parliament, the Welsh Senedd and the Northern Ireland Assembly—and the Irish Parliament and both Houses of this Parliament get together regularly, twice a year, with sub-committees. It is the only way that Parliaments compare notes and best practice. Why can we not look at that as a way to build on the best practice of the British-Irish Parliamentary Assembly?
Those are just a couple of suggestions. There is a lot of work to be done. This is extremely important. It has improved in the last couple of years, but there is a long way to go yet.
Lord McInnes of Kilwinning (Con)
My Lords, I was amused to hear from the noble Lord, Lord Kerr, about the lack of activity of the noble Lord, Lord Cameron, during the referendum. Unlike the noble Lord, I was involved in that campaign; my job was to be sent along, by my Labour and Liberal Democrat comrades in Better Together, to tell the noble Lord, Lord Cameron, to do less in the referendum rather than more.
As other noble Lords have, I congratulate the noble Baroness, Lady Drake, and her committee on an excellent, thoughtful and clear-eyed assessment of the governance of the union. I will focus my remarks on a couple of salient points.
I found a breath of fresh air the acknowledgment in the report of how much the governance of the union requires a constructive attitude and culture from all parties. The chemistry is just as important as the physics of the processes and structures that are put in place. It is a great testament to the union that it has been sustained in what have been very choppy political waters. That demonstrates to me that many of the structures and joint working arrangements are actually working pretty well. As we have read in the report, many of them were set up in 2022 with the joint agreement of the UK Government and the devolved Administrations. Perhaps things were not quite as bad after 2019 as some of us may remember.
However, the greatest threat to the union will always be if it is seen to fail to operate. If the governance of the United Kingdom is seen to be broken, why should that union not be clearly questioned? Her late Majesty the Queen famously said that the monarchy needed to be seen to be believed. In my view, this is just as important for the functioning of the governance and joint working of the structures of the union. I therefore welcome the establishment and optical importance of the Council of the Nations and Regions of the UK. However—this will not come as a surprise to the Minister, as I have asked her about it in your Lordships’ House—I believe that body is less important than the Prime Minister and Heads of Devolved Governments Council.
The Council of the Nations and Regions should not be in any way a replacement for regular meetings between the Prime Minister and First Ministers, who all, as Crown Ministers, have a wider responsibility than purely to their regions. I do not want to denigrate the roles of the mayors or indeed that of the Deputy Prime Minister, but there needs to be a very close and connected working relationship between the Prime Minister and the First Ministers—and, in the case of Northern Ireland, the Deputy First Minister as well. What does the Minister foresee as the timetable for prime ministerial and First Minister council meetings going forward? The report suggests that there were inevitably tensions between the UK Government centrally and the devolved Administrations during Covid, but that was actually the time when there was cause for regular contact between the Prime Minister and First Ministers, which can only have been a good thing.
My second point of emphasis, to echo the noble Lord, Lord Murphy, is to support the importance of the relevant territorial offices being engaged in all bilaterals between individual departments and devolved Administrations. The Civil Service landscape across departments varies in expertise when dealing with the devolved Administrations. I know that it is not common for the Treasury to be praised for joint working, but it had an excellent team when I was in government, which understood nuance and joint working with the devolved Administrations. However, in too many departments, to echo the noble Lord, Lord Kerr, including the Foreign Office, devolved Administrations were often not taken very seriously and continuity to ensure that good relations were built was not always there. Can the Minister suggest how the territorial offices’ role is going to be improved in these areas?
Since 2016, the union faced a difficult time as the implications of Brexit and Covid were wrestled with, just at the same time as there was an Administration in Holyrood prepared to do anything to fulfil their aspiration for the end of the union. I ask noble Lords to reflect that perhaps that was the reason why perhaps not everything could be shared with the devolved Administration in Edinburgh as it should perhaps have been. With this excellent report, I hope that the Government will continue to focus on strengthening structures while also encouraging a constructive culture of working for the people across the United Kingdom.
Lord Beith (LD)
My Lords, I pay tribute to the noble Baroness, Lady Drake, for her very clear presentation of the report and all the work that she did on this report and many others as chairman of the committee. She did an excellent job.
Devolution is about difference. It involves recognising that the nations and regions of the United Kingdom are different, with different needs, and that they are different in how they address those needs and in their political composition. Devolution acknowledges this and has mechanisms for coping with difference, particularly where it impacts on the UK as a whole, or other devolved Administrations, as the noble Lord, Lord Norton of Louth, clearly recognised in his very experienced contribution. This committee, in successive reports, has sought to ensure that the mechanisms are fit for purpose, are used and are used in a constructive way.
We occasionally lapsed into pessimism. There is a line in the summary of the report that says that
“the reality of different political parties holding power in different parts of the UK is that publicity engendered by high-profile public disputes will at times be more appealing than resolving issues through established governance structures”.
Sadly, I think that we can all recognise that as being true, and we can recognise certain periods when that was even truer than usual. Indeed, the noble Lord, Lord Murphy of Torfaen, threw light on some of the dark places in trying to make devolution work.
I turn to the Sewel convention, and I use the word “convention”—with the noble Lord, Lord Norton, looking at me—not in the constitutional law sense but with an admission that it is not the law but a political convention. That is how the committee describes it, not as a constitutional convention but as a political convention; it is a matter of terminology. The need to observe the conditions and principles that the convention embodies was well put forward by my noble friend Lord Thomas of Gresford and referred to by several other contributors.
The noble Baroness, Lady Andrews, spoke in the debate, and I pay tribute to her for the work that she did on common frameworks, which are there to ensure that we can have a single market and that there are not adverse effects from what happens in one part of the United Kingdom on other parts—or, if there are, they are recognised and prepared for. That is an integral part of the devolution procedure, yet the internal market Act, and the passing of it, was one of the most obvious cases in which the Sewel practice was not followed, disgracefully and repeatedly.
Much of what the report is about is the positive spirit in which we need to engage these processes; the noble Lord, Lord Kerr of Kinlochard, illustrated that when talking about the Civil Service. To start with, departmental Ministers need to understand devolution better—that applies not so much to the territorial departments but the other departments for which it is not central to their way of thinking. Civil servants in all departments need a better understanding of devolution and to avoid what one of our witnesses described as the unitary mindset, which is still present and needs to be dealt with.
As the noble Lord, Lord Murphy, indicated, the territorial department has a potential role, but there is a difficulty here in getting the right balance for where it should be in the constitutional structure. We saw stages, for example, when the Johnson Government became a rival Government of the respective countries. In relation to Scotland, they were trying visibly to compete on who would build the bridge: the UK Government or the devolved Government.
Somebody needs to speak in this debate about England, because not much has been said about England, as in the whole devolution story. Some of us are not entirely happy with the method that has been chosen to bring devolution to England, because it involves single individuals having a lot of concentrated power, which is a very confused and jumbled pattern, even for those who advocate it. However, a genuine attempt has been made to build on what is there as part of the overall devolution pattern.
We are to have the Council of the Nations and Regions. I agree with the noble Lord, Lord McInnes, that the meetings of the Prime Minister and the First Ministers will prove more important than that council. I am bound to inquire what the council will do. I have a real fear that it will become simply a bureaucratic process that everybody has to go through, but which is not a real contributor to the effective working of the constitution. There was the proposed appointment, which did not happen in the end, of Sue Gray—the noble Baroness, Lady Gray of Tottenham—as the Prime Minister’s envoy to the nations and regions. Nobody else, as far as I know, was appointed to that job when she was not appointed to it, which suggests that the whole thing is surrounded by a miasma of confusion and nobody is quite sure how it will work or whether it can be made to work.
In general, the Government’s response to the committee has been encouraging and constructive. However, one area where they have been particularly weak—as was referred to by the noble Lord, Lord Kerr, and others—is around delegated legislation and the application of the same principle that Sewel applied to primary legislation to delegated legislation. Statutory instruments are the means by which many of the detailed changes in people’s lives are made. Nowadays, they, rather than primary legislation, set out so much of the detail that determines what people can buy, what conditions they can educate their children in and so on. There is enormous potential for trespass on devolved powers and a lack of a working process for consultation—that has to be dealt with.
When the Government responded to us on that, all they said was that they noted the committee’s
“recommendations on developing criteria and publishing guidance on the use of delegated powers … The Government will consider this as part of its work on engagement with the devolved governments on legislation”.
That may be true, but it is pretty weak, feeble and unconvincing. These are important decisions, and they are a test case for making the machinery—through which devolution can operate when there are differences—that can be made to work. I therefore call on the Minister—when she comes to respond to the committee, not just today but later in the year in more detail—to address this problem before it gets too serious.
Baroness Finn (Con)
My Lords, there are moments in political life when structures matter and there are moments when tone matters. There are moments—rarer, but no less important—when what matters most is constitutional clarity: the discipline of understanding where authority lies, who is responsible and how the pieces of a great union fit together. This debate touches on all three, and it is a pleasure to speak in it, especially as I was a member of the committee at the time of the report’s publication.
The Constitution Committee’s report is serious and valuable, and I very much pay tribute to the brilliant clerks and the noble Baroness, Lady Drake, for her excellent and calm chairmanship. It is fair to say that we were not a committee of shrinking violets, and the noble Baroness displayed a degree of patience and diplomacy that would have made Metternich proud.
The Government’s response also recognises much of what must be done to strengthen the practical bonds between our Governments. But it is important to be aware of the potential risks that could corrode the foundations of our union even as we speak the language of strengthening it.
That is why the Conservatives have always worked to strengthen the union. Mutually respected working structures and processes for engagement are essential, as the noble Lord, Lord Murphy of Torfaen, highlighted. It was a Conservative Government that introduced the 2022 Review of Intergovernmental Relations—here I pay tribute to my noble friend Lord McInnes—to strengthen the structures, improve transparency and establish, for the first time, a properly formalised dispute resolution system. It was a Conservative Government that delivered the UK shared prosperity fund, the levelling up funds and direct UK investment into all parts of the country. And it was a Conservative Government that delivered more than £3 billion of levelling-up funding for Scotland, over £2.5 billion for Wales and over £1 billion for Northern Ireland—funding provided on top of the Barnett formula. That record matters, but it is also important to recognise and guard against the potential new risks that lie ahead.
One of the greatest risks lies in the Government’s plan to negotiate a new memorandum of understanding on the Sewel convention. The Sewel convention, as confirmed in the Miller 1 judgment—here I am afraid I agree with the noble Lord, Lord Beith, and not my noble friend Lord Norton of Louth—is primarily a political convention, not a legal obligation. It rests on trust: that Westminster will not normally legislate on devolved matters without consent but that it retains the sovereign right to do so. It is deliberately unenforceable in law, and that is its strength. Conventions survive through mutual respect, not judicial supervision. The committee was right to reject calls to codify Sewel. To invite the courts into political disputes would shatter the union’s foundations. Should any future proposals move in that direction, they must be firmly resisted.
Even without legislation, the Government’s approach carries risks. Embedding the Sewel convention in a formal memorandum of understanding, without parliamentary scrutiny, would hollow out the convention’s political character, turning it into a bureaucratic entitlement. It would replace political trust with procedural expectation and could turn Westminster’s sovereign discretion into the false appearance of obligation. The risk is not theoretical. We have already seen how sensitive and contested questions of legislative consent have become. These disputes reveal a deeper truth: determining whether a measure affects devolved competence is often a matter of political judgment. Embedding such judgments into a MoU risks giving them the false appearance of legal fact, inviting litigation where there should be political debate.
Can the Minister explain how the Government will safeguard the United Kingdom’s constitutional integrity if the memorandum of understanding creates procedural obligations that the courts may one day be asked to enforce? Have the Government prepared a legal issues memorandum assessing the risk that the MoU could create justiciable rights? If so, will they publish that memorandum or place it in the Library? In line with paragraphs 5 to 8 of the Attorney-General’s Legal Risk Guidance, have the Government formally assessed the likelihood that the memorandum could be subject to judicial review and the risk that any resulting obligations could be enforced by the courts? Will they publish a summary of that legal risk assessment?
These are important considerations. Administrative process cannot confer constitutional authority. An MoU which redefines a constitutional principle could tear constitutional authority from Parliament, turn legislative consent into a weapon and leave the union weaker in law and in spirit.
The committee also recommends a formal “principle of positive engagement”. This would codify a duty for Governments to work together on developing and implementing policies of common concern. The intention is understandable, but there are inherent risks. Formalising “positive engagement” must not risk shifting consultation into a form of co-decision, implying that devolved agreement is required not just on devolved matters but on areas properly reserved to Westminster. Over time, this would erode the constitutional boundary between consultation and consent. It would encourage a culture where every major policy risks becoming a four-nation negotiation, undermining clear executive responsibility. The union must remain a living political community, not drift toward a federation of mutual vetoes. Although we support positive engagement, it must always be within the constitutional framework that gives the union its enduring strength.
Beyond these major issues, there are other important issues on which we must reflect. It is only in the last six or seven years that identified structures and processes for regular engagement have emerged. It is therefore critical that they are monitored, and they require proper record-keeping and retention of institutional memory to have an established point of reference. Can the Minister confirm that this will happen?
The common frameworks process, despite understandable delays, remains a constructive example of the importance of intergovernmental co-operation. I pay tribute to the tremendous work of the noble Baroness, Lady Andrews.
The new Council of the Nations and Regions has made a strong start, but it must complement, not compete with, the direct and formal meetings between the Prime Minister and the heads of the devolved Governments, as several noble Lords have mentioned. Likewise, the territorial offices—the Scotland Office, the Wales Office and the Northern Ireland Office—remain critical in reinforcing the UK’s voice across government. Their role must be strengthened, not sidelined. How will these processes work together? How will the Government ensure that the council strengthens the union, rather than confusing or weakening it?
On secondary legislation and delegated powers, the Government should listen carefully to the committee’s warnings. The goal must be genuine engagement, without ceding the right of the UK Parliament to legislate for the United Kingdom as a whole.
Finally, I turn to the crucial issue of Civil Service impartiality within the devolved Administrations, which was raised by the noble Lord, Lord Kerr of Kinlochard. As the Government’s response acknowledges, the Devolution and You programme was launched in 2015, yet nearly a decade later, senior civil servants still struggle with basic devolution principles, as the noble Baroness, Lady Andrews, pointed out. Furthermore, the Constitution Committee’s 17th report of 2022-23, Permanent Secretaries: Their Appointment and Removal, recommended that civil servants in devolved Governments must work only within devolved competence and that the Cabinet Secretary should issue clear guidance to that effect. It found that senior civil servants in Scotland and Wales, although accountable to devolved Governments, remain part of a single United Kingdom Civil Service, and recommended that the Cabinet Secretary manage any challenges, issue guidance and require Permanent Secretaries to escalate concerns and seek written directions if necessary.
The then Government accepted these conclusions and said that they were considering how best to implement them, so I ask the Minister to confirm the following. Is it still the Government’s position that civil servants must work only within devolved competence? Has the promised guidance been issued? If not, will it be published, and when? These are serious constitutional commitments. Clear action is now needed. The Civil Service must remain a single and impartial institution, serving the Crown and the union it upholds.
To conclude, strengthening the union requires more than good process; it requires clarity of authority, discipline in constitutional thinking and respect for the enduring sovereignty of this Parliament. The union cannot be held together by promises alone; it takes action, trust, respect and the political will to defend what we have built together. In the end, the strength of the union will be measured not by what we say but by what we do.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I thank my noble friend Lady Drake for securing this excellent debate and the Constitution Committee for its report and the interest it continues to show in this area. As the spokesperson for the Cabinet Office as well as the Scotland, Wales, and Northern Ireland Offices, I recognise the importance of the issues raised today, so I thank all noble Lords for their thoughtful contributions. I should also put on record that, as someone who was born in Scotland—can noble Lords tell?—and who lives in England, I genuinely appreciate the importance of making government and governance work for all nations and regions in the UK.
Let me be clear: as the Prime Minister has said, to ensure that we are indeed a United Kingdom, it is crucial to give greater importance to respect and collaboration in the service of all people, across all parts of this country. This is essential for effective governance, to tackle our shared challenges and build a United Kingdom that works for everyone.
This Government were elected on the promise of change, renewal and reset. To do this, it is our duty to work in the service of the people to deliver on their priorities. That is why in our manifesto we committed to clean up politics and return it to the service of working people through resetting the UK Government’s relationship with the devolved Governments in Scotland, Wales and Northern Ireland—although, as noble Lords have highlighted, not least as the noble Lord, Lord McInnes, has stated, this is chemistry as much as it is physics, which is a line I think I am going to use repeatedly going forward. We are doing just that.
In response to the noble Lord, Lord Kerr, I assure your Lordships’ House that our reset and re-engagement has been based on a relationship of mutual respect. That is how we are seeking to re-engage with the Governments across the United Kingdom. This work began on day one of the new Government, with the Prime Minister speaking to the heads of the devolved Governments within hours of his appointment. He then visited Edinburgh, Cardiff and Belfast respectively to meet them in the following days.
To reassure the noble Lord, Lord Thomas, this Government genuinely believe in devolution, which is why we undertook this reset from day one. These early and proactive actions of the Prime Minister have led the way for the rest of our Government. The Prime Minister has been clear that rebuilding the country requires UK-wide delivery by working effectively with all levels of government. That is why, in our manifesto, we committed to ensuring the structures and institutions of intergovernmental working improve relationships and collaboration on policy.
With regard to the principle of positive engagement, in response to my noble friends Lady Andrews and Lady Drake, the principles for intergovernmental relations were jointly agreed between the UK Government and the devolved Governments as part of the 2022 Review of Intergovernmental Relations. There are no current plans to reopen this and add a new principle. Instead, we are focusing on how we embed the spirit of positive engagement in our work alongside the devolved Governments at all levels as we reset.
There is now frequent, proactive engagement between Ministers and their devolved counterparts on a range of issues. Noble Lords have rightly pointed out that this is not just about how often we speak but about the quality and calibre of what we are discussing, at the same time making sure that regular engagement is a theme. The structures set out in the 2022 Review of Intergovernmental Relations are functioning well and have withstood changes across all Governments. There have been 20 formal meetings of these structures since the general election. The top-tier meeting between the Prime Minister and the heads of the devolved Governments has taken place. To reassure the noble Lord, Lord McInnes, these meetings will happen twice a year.
The Interministerial Standing Committee and Finance: Interministerial Standing Committee have met. However, we really should have thought about the names of these groups when we had the meeting. The portfolio-level interministerial groups are up and running. These latter groups provide an important place for discussion of the impacts upon each other of policy changes across the different Governments and for shared learning and co-operation. As the noble Baroness, Lady Humphreys, raised, as did the noble Lord, Lord Beith, they are meeting as early as possible to discuss legislation before it comes in front of your Lordships’ House. For example, just last month the Minister for Energy attended the Interministerial Group for Net Zero, Energy and Climate Change alongside Ministers from the Scottish and Welsh Governments and the Northern Ireland Executive, where they discussed local energy initiatives and benefits to communities.
We are using the intergovernmental structures to ensure that there is collaboration with the devolved Governments. These structures help to ensure that the importance of devolution is reflected in policy-making and that effective outcomes are delivered across all parts of the United Kingdom.
In response to my noble friends Lady Drake and Lady Andrews, and the noble Baroness, Lady Finn, on the qualitative progress in transparency reporting and how our principles are being embedded in practice, in the first month of government we have been focusing on actions rather than reports. We are currently considering how we can supplement the impartial Intergovernmental Relations Secretariat’s annual report, the first of which is forthcoming, with our own reporting from a UK Government perspective. These principles matter not just to those formal structures set out in the intergovernmental relations review but apply more broadly. Overall accountability for the system of intergovernmental relations includes adherence to its principles collectively with the top-tier intergovernmental structure: the Prime Minister and the heads of the devolved Governments.
In addition to these structures, as many noble Lords have highlighted, we committed in our manifesto to establishing a new Council of the Nations and Regions. To reassure the noble Lord, Lord Beith, this is not a tick-box exercise or a talking shop. To reassure the noble Baroness, Lady Finn, we believe that the Council of the Nations and Regions is complementary, hence the timings of the meetings, with the top tier of the IGR meeting at the same time as CNR, with the CNR meeting following.
The council brings together the UK Government, the devolved Governments and the mayors of strategic authorities to determine actions for tackling some of the biggest and most cross-cutting challenges that the Government face. The first meeting, which was held in Edinburgh on 11 October last year, was delivered within the first 100 days of this Government. The Prime Minister has been clear that the purpose of the council is a genuine, meaningful and focused partnership to unlock the whole of the UK’s untapped potential to make everyone, everywhere, better off. The inaugural meeting discussed the broader growth picture and maximising inward investment opportunities ahead of the international investment summit. That summit then delivered a commitment of £63 billion of private investment into the UK, which will create close to 38,000 new jobs across the country.
However, these formal structures are not the sum total of engagement. Collaboration also happens on a day-to-day basis across government. This cross-government co-ordination and engagement with the devolved Governments is supported by Minister Alexander. As a Minister of State in the Cabinet Office, he covers the union and devolution policy across Scotland, Wales and Northern Ireland in addition to his existing responsibilities at the Department for Business and Trade.
What is really important is that we can come together when it matters. That is how this Government are delivering for the people of the United Kingdom, whether that is through the UK Government or national Governments coming together when their people need them. We saw this earlier in the year when Storm Éowyn made landfall. Ahead of the storm, the Cabinet Office, alongside the Scottish Government and the Northern Ireland Executive, issued an emergency alert to approximately 4.5 million people in Northern Ireland and the central belt of Scotland containing information on how to stay safe; this was the largest real-life use of the emergency alert to date. The Chancellor of the Duchy of Lancaster also chaired a ministerial COBRA meeting with Cabinet colleagues, the First Minister of Scotland and the First and Deputy First Ministers of Northern Ireland to discuss what support and mutual aid the UK Government could provide to Northern Ireland.
I must stress this: we are not done. We will continue to build on this. We will continue to collaborate with our colleagues in the devolved Governments. We want to continue to work in service of the people of the United Kingdom to deliver for the people of the United Kingdom.
In response to the noble Lord, Lord Thomas, and my noble friend Lady Andrews, as we set out in our manifesto, we are determined that the structures of intergovernmental working are used to improve collaboration on policy. In that spirit, we committed to strengthening the Sewel convention—this was specifically in our manifesto; I have a copy here if noble Lords would like one—which is something that I know this House and the Constitution Committee take very seriously. The convention is a vital part in ensuring all of the relevant democratic institutions have a say in the legislation that concerns matters within their competence. As such, we are taking the time to get the MoU right.
In the meantime, it is important to note that the Government have already been acting very much in the spirit of that commitment. I am sure that those with a keen interest will already know that 11 legislative consent Motions have been passed in this Session, with a further 14 positive memorandums recommending consent. Our ambition is that this trend continues.
I turn to noble Lords’ specific questions on the Sewel convention. The Government have set out their commitment to strengthening the convention by setting out the new MoU. We hope to move forward with the agreement and publication later this year. Discussions with the devolved Governments will continue in the coming months in order to finalise a draft. With regard to the specific question asked by the noble Baroness, Lady Finn, those will of course form part of our thinking, but it would not be appropriate for me to comment further at this point, given where we are in the negotiations.
On the question of secondary legislation and the Sewel convention—several noble Lords, in particular my noble friend Lady Drake and the noble Lord, Lord Beith, asked about this—although the Sewel convention does not apply to secondary legislation, UK Ministers have made commitments not to use SIs in devolved areas without the agreement of the devolved Governments.
My noble friends Lady Drake and Lady Andrews asked for an update on the programme on implementing common frameworks. I fear that my noble friend Lady Andrews will be much more informed about that than me. However, I can say that 28 common frameworks are provisionally operational, with one having been implemented fully and three at an earlier stage. At the Interministerial Standing Committee meeting in December, all four Governments agreed to finalise the remaining frameworks by the end of this year; we are making best efforts to facilitate this.
While these constitutional issues and discussions are important for the function of good governance, we have also been focusing on delivering across the UK on the issues that matter to people, working closely with the devolved Governments and local partners to do so. This is clearly demonstrated through our work to establish Great British Energy, a new publicly owned company which will own, manage and operate clean power projects up and down the country, generating cheap home-grown electricity. We are delivering on our first step in establishing GB Energy by providing £125 million to set up the new institution at its home in Aberdeen.
In addition, we have published Invest 2035, which sets out a modern industrial strategy that will help deliver growth across the whole of the UK. The industrial strategy is being designed and implemented in close collaboration with local, regional and devolved Governments, the details of which will be published in the coming months. Partnership with devolved Governments will make this a UK-wide effort and support the considerable sectoral strengths of Scotland, Wales and Northern Ireland.
I have a series of additional answers, but hopefully I will not detain noble Lords too long. The noble Baroness, Lady Humphreys, and the noble Lord, Lord Kerr, asked about the Civil Service. Cross-posting of civil servants can play a key role in the building of first-hand experience of working in another Government. We are keen to make long-term intergovernmental placement opportunities more readily available by working with colleagues in the devolved Governments to remove barriers to them. We are also piloting an intergovernmental shadowing scheme that will provide civil servants across the UK with a more informal but still practical experience of how government works. I will revert on the points raised by the noble Baroness, Lady Finn, about an update on Permanent Secretaries. On impartiality, she and the Committee will be aware that all civil servants are expected to follow the Civil Service Code and the impartiality requirements laid out in it.
Noble Lords will not be surprised to hear that I take very seriously the role of the territorial offices, given how much time I spend in them, and the roles of their Secretaries of State. It is the role of the Secretaries of State and the territorial officials in the Scotland Office, the Wales Office and the Northern Ireland Office to represent the interests of Scotland, Wales and Northern Ireland within the UK Government and to advocate for government policies in those nations. We see that working every day, whether that is the city deals being delivered in Northern Ireland, legacy, GB Energy or the additional funding delivered for coal-tip safety in Wales.
I say to the noble Lord, Lord Norton, that we could have had part of this debate last Friday, when we had a debate with the noble Baroness, Lady Finn, about the role of recommendations for public inquiries. He made a valid point both last week and today about how the Government should reflect constantly on recommendations and ensure that they are answered.
I thank the noble Baroness, Lady Humphreys, for reminding us of the dedicated work that her and many noble Lords’ friend, Baroness Randerson, did to make sure that devolution actually worked. I pay tribute to her for her work. If it is acceptable, I will revert to the noble Baroness on Senedd timing and the recommendations of the report.
As ever, I thank my noble friend Lord Murphy for highlighting the importance of making devolution work and how difficult it can be. I think we can all appreciate the challenges he had in his various roles in government. He mentioned Alex Salmond, but he also had to deal across parties in Northern Ireland to make devolution work at some challenging points. I also thank him for his work on the Good Friday agreement, which, as he said, laid out alternative options. I will consider and reflect on what he said about interparliamentary assemblies and how we can make sure that their roles are reflected going forward.
On that note, I thank all noble Lords once again for their participation in today’s debate, but particularly my noble friend Lady Drake and the noble Lords of the Constitution Committee for their report on the governance of the union. I know that noble Lords will continue to take a keen interest in this matter and, undoubtedly, ask me many questions both here and in the Chamber. I look forward to continuing the important discussion we have had today.
Baroness Drake (Lab)
My Lords, I will not keep you too long. I thank my noble friend Lady Anderson for her fulsome reply. It is much appreciated. I think my noble friend Lady Andrews and I feel that there is a certain timidity on the positive engagement principle: having drafted something in 2022 does not necessarily mean that it is set in stone, so there should still be an aspiration to stay with that principle. If you win that principle with all the other devolved Administrations it will definitely be indicative of progress.
On the annual transparency report, I am sure the committee will love to continue engaging with the Government. It is really a very important part of it; actually, if done correctly, it would be a clear statement of faith by the Government that they do want to change things.
I did not refer particularly to the impact of the Council of the Nations and Regions because it was so new, but the follow-up report, Executive Oversight and Responsibility for the UK Constitution, which is heading this way, starts to pick up some of the issues that people have articulated today.
I was delighted to hear my noble friend Lady Anderson say that she was upbeat and that the work of the Government was not done. That was very positive and welcome. The memorandum of understanding is certainly awaited with interest. I completely agree with her that it needs to be done correctly but, equally, it needs to be ambitious as well, we hope.
On secondary legislation, the Government’s use of such powers and Henry VIII powers, there is actually a bit of a precedent with the Fisheries Bill, in a sense that somebody put their toe in the water first, which starts to embrace some of the things. The committee has not and never has proposed a rewriting of the constitutional settlement, but the most important thing, which we heard from the noble Lords, Lord Thomas and Lord Kerr, the noble Baroness, Lady Humphreys, and many others, is that the danger for the Government is that if it is perceived that Ministers are empowered too easily with delegated and Henry VIII powers, with the intention of undermining the devolved legislatures, then that union cohesion comes under a lot of pressure. That is the issue that is being struggled with: that sense of faith, or otherwise, by the devolved Governments as to how the UK Government are behaving in that respect.
Finally, as ever, one of the most perceptive comments came from the noble Lord, Lord Norton of Louth—as an ex-chair of the Constitution Committee, I would not have expected anything less from him—when he said that the context of this report has to be understood. He is right: the Constitution Committee’s reports are predicated on a belief that the UK is a joint endeavour and shared asset for all the nations, regions and communities. That is our opening premise on which all of our analysis is made, and has been by Constitution Committees since they engaged with this issue. That is so important. That means that any Government not only have a responsibility to improve the relations of today—obviously, the current Government are seeking to do that—but have to build something that will weather future stresses. That is the bit that is still in play. Obviously, we will look to the Government to build something that has the capacity so that we do not see what we started to see with Brexit and other problems.
I thank everybody who participated today. It has been a great debate, and good luck to the committee taking this forward with the Government.
Engineering Biology (Science and Technology Committee Report)
(2 days, 1 hour ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Baroness Brown of Cambridge
That the Grand Committee takes note of the Report from the Science and Technology Committee Don’t fail to scale: seizing the opportunity of engineering biology (1st Report, HL Paper 55).
Baroness Brown of Cambridge (CB)
My Lords, I am delighted to introduce for debate the Science and Technology Committee report entitled Don’t Fail to Scale: Seizing the Opportunity of Engineering Biology. I am looking forward to hearing the contributions from others to the debate, and particularly to the response on behalf of DSIT from the Science Minister, the noble Lord, Lord Vallance, when I am hoping we will hear of some progress.
I thank all committee members past and present who participated in the report. This was my last report as chair of the committee, and I am pleased to note that my noble friend Lord Mair, the new chair, will speak later. As ever, much, if not the majority, of the preparation and the quality of this report is down to our excellent committee staff, the clerks John Turner and Matthew Manning, the policy analyst Thomas Hornigold and the committee operations officer, Sid Gurung. We were also very fortunate to be supported by a POST fellow, Benedict Smith.
The inquiry started in May 2020 and published its report in January 2025, with the government response following in March. The inquiry heard from approximately 30 witnesses in person and published 53 pieces of written evidence. Contributors included engineering biology academics, companies, international witnesses and the Government themselves.
What was our motivation for this inquiry? Engineering biology is a rapidly developing field involving the use of tools of synthetic biology to solve practical problems. We chose to conduct this inquiry for two reasons. The first was the promise of the technology. In recent years, our ability to sequence, edit, analyse and synthesise DNA has developed very rapidly thanks to CRISPR machine learning and handheld DNA sequencing. This unlocks applications for synthetic biology in areas such as energy, medicines, manufacturing, agriculture and materials. Biotechnologies could allow us to replace fossil fuels as the feedstock for the production of chemicals and plastics or enable better recycling of rare earth metals from electrical devices. Both could be very important steps in moving towards net zero and to a sustainable, more circular economy.
Everyone seems to be focused on cyber and AI these days, but we must not forget that most technological development requires at some point physical products or actual stuff as well as capabilities in cyberspace. Engineering biology provides us with tools to manipulate atoms in physical space, a critical capability to address many of our key global challenges in sustainability, climate and health.
Secondly, this is an area that the Government have already identified as a priority for the UK. Indeed, it is one of DSIT’s five critical technologies, and the UK has historically had strength in these areas thanks to our life sciences sector and early investments in synthetic biology. The committee agrees with the Minister, the noble Lord, Lord Vallance, and the Government that this is an area with huge growth potential for the UK. But our inquiry found that the rest of the world is catching up with us and, indeed, potentially overtaking us.
Our report proposed urgent actions that the Government needed to take to address this issue. The Government’s response, while positive in some areas, describing ongoing policies, deferred a lot of details to the spending review and the publication of the industrial strategy, but our overall message is one of urgency. Increasingly, it is one of some anxiety over how science funding will fare in a tough spending review ahead. The Minister himself highlighted that there is a small and closing window of opportunity to realise the benefits to our economy that these technologies can provide—otherwise, we will find ourselves using the products of engineering biology developed elsewhere.
Our report made recommendations around strategy, skills, regulation, infrastructure, investment, adoption, governance, safety and public acceptability. Noble Lords will be pleased to hear that I will address only some of those points now and leave others, particularly details around scaling up, where the committee has a new inquiry, to be covered by other Members.
On funding, as the Minister we ask the Government to recommit to the previous Government’s target of £2 billion over 10 years. That is not a vast sum in the context of an accelerating global race and the potential benefits of gaining a leading position in some key areas. Let us take biofoundries, for example. These are facilities that allow biotech researchers to prototype and test their ideas rapidly. In 2019, there were 16 facilities worldwide, five of them in the UK. Just five years later, there were 36 facilities worldwide, and still just five of them in the UK. UKRI told us in written evidence that it had funded approximately £700 million in synthetic biology research since 2007. We heard that, in Shenzhen in China, $750 million has been spent on a single biofoundry. We urgently need to see a serious commitment to funding engineering biology R&D, or falling behind will not just be a matter of risk; it will be a matter of fact. However, the Government’s response did not make this commitment, and we must wait until the spending review and DSIT’s ability to allocate its budget. We hear that the Minister is developing plans for long-term R&D spending, which we welcome. Inconsistency is one of the things that allows us to fall behind—but will he be able to commit today to this funding target, or at least let us know when we can expect more details?
On infrastructure, as a result of what one witness described as a “batteries not included” approach, the biofoundries are funded through cost recovery from the researchers who use them and subsidised by the universities that host them. We heard that, in many cases, this makes them too expensive for researchers and start-ups to use; with universities facing their own financial crisis, that is not a sustainable situation. The Government have a manifesto pledge to introduce 10-year funding for key research infrastructure, so can the Minister confirm sustained support for research infrastructure like biofoundries, and that that will be part of this pledge?
Will the Minister also commit to mapping and supporting the existing infrastructure across the university sector and the catapults, including the Centre for Process Innovation, or CPI, to help lower barriers to access? In due course, the sector will need scale-up infrastructure to compete with offers available in Europe and elsewhere. The UK Science and Technology framework said that the UK would have a
“long-term national plan for research and innovation infrastructure”.
Could we have a progress update on this? The Government Office for Science has produced some good research about the sector’s infrastructure needs. Will it be acted on, and can we expect announcements of new research infrastructure for the sector?
A strategy is clearly critical. The Government need a plan for engineering biology as part of their industrial strategy. The committee welcomes the intention to have an industrial strategy that identifies critical technologies that the UK should support. It will also need to mobilise significant investment, in challenging fiscal circumstances, really to move the dial on growth. However, the current consultation suggests that the strategy will focus on eight very broad sectors, of which engineering biology could fit into at least four—“life sciences”, “digital and technologies”, “advanced manufacturing” or “clean energy”—while DSIT’s investment in the area suggests that it could also fit into “defence”. We think it important that there is clarity on how critical foundational technologies such as engineering biology will be supported by the industrial strategy. We need reassurance that they will not get lost because every sector thinks that one of the others is picking it up.
In the light of its broad sectoral focus, can the Minister explain how engineering biology and, more generally, the work of DSIT on critical technologies fit into the industrial strategy approach? Will we see institutions such as the National Wealth Fund, the British Business Bank and British Patient Capital, which aim to support the objectives of the industrial strategy, be upskilled, empowered, enabled and eager to invest in early-stage and scaling companies using novel engineering biology technologies? Will we see a co-ordinated industrial strategy that does not just fund a few projects or sectors but aligns all of the levers—skills training, public and private investment, public procurement, regulation, infrastructure, mandates and incentives—to support engineering biology?
One approach that we think could help is a high-profile national champion for engineering biology. Our committee recommended that a “national sector champion” be appointed to help co-ordinate cross-government efforts. The Government’s response was somewhat coy. They said that sector champions can be useful and that they will “explore the feasibility of” this. Can the Minister make a firmer commitment on a sector champion?
The Minister will, I hope, bear with me now as I move on to what I would call a perennial topic for our committee: visas for scientists and engineers. This is an issue that engineering biology witnesses raised specifically, but so have just about every group of witnesses from whom we have heard in our recent committee inquiries. Here, the Government’s response was the most disappointing. We wrote a letter to the Home Office in January describing the UK’s visa policy towards scientists as an “act of national self-harm”; that may sound harsh, but it reflects what we felt.
By many comparable metrics, UK visa fees are among the highest in the world. We award only a few thousand global talent visas a year to the best and the brightest, but the Royal Society has found that the upfront costs for a global talent visa are in excess of £5,000 per person for the immigration health surcharge alone, rising to £20,000 for a family of four. For around £40 million a year—a rounding error on the NHS budget—we are putting up a huge barrier to exactly the young, talented researchers whom we need to help grow our economy. In some cases, these costs end up being borne by research institutions, eating into the funding available for research. Cancer Research UK wrote to us saying that it will spend £700,000 a year on covering increasing visa costs—that is £700,000 of money donated by the public that will not be spent on cancer research.
We recommend that the UK rethinks its immigration policy for skilled scientific and technical workers, expands the global talent visa and reduces the burden of upfront costs. These are not new ideas; we said the same things to a previous Home Secretary back in 2022 during our people and skills inquiry but, disappointingly, we have not seen any progress. I expect that the Minister agrees with me that this issue needs to be addressed. The Government were elected on a pledge to reduce overall immigration numbers, but does that really require putting up these barriers to people we recognise as global talent?
The recommendations are not new, but the global context is. Thousands of scientists, especially in the biomedical sciences, vaccines, clean energy and climate areas are seeing grants rescinded and positions terminated by the new US Administration. Surveys show that many may wish to relocate to Europe. Other countries have recognised this enormous opportunity: for example, the Spanish Government have boosted US-focused funding for their “Attract” programme to attract and retain science and innovation talent. We urgently need something similar. Will the Minister advocate strongly to his colleagues that our short-sighted approach must end, and we need specific measures in the immigration White Paper to attract the best and brightest scientists to the UK?
To conclude, spending on science and technology is not just a “nice to have”. The UK has had over a decade of slow productivity growth and fifteen years of stagnant wage growth. This is driving instability in our politics and stretching our public services. That is why the Government have a growth mission, and engineering biology can be a sector that drives growth.
Investment, especially in high-growth technology sectors, is the most obvious route out of this. A new report from PwC and GO-Science suggests that half of UK growth over the next decade will come from the advanced technologies of engineering biology and AI. The UK still has advantages in engineering biology, especially with its life sciences pedigree and the NHS, but we are ceding ground in science and technology to other countries. No, the UK is not the US or China—but we nevertheless still have a lot of advantages: an excellent science base with research that remains world-class, universities that attract global talent, significant research infrastructure to build on and a Government that we believe value science.
Above all, however, there is a growing consensus that something urgently needs to change to address this decline. I do not mean to suggest that this is easy. It requires us to prioritise; it requires a well-co-ordinated, long-term and committed strategy across government; it requires us to get the best out of the assets we have; and it requires us to build the capacity of the state and private sector to support science and technology from blue-skies research through to scaled-up industries. The Government’s response has shown some promising signs of policy development and commitment to this technology and wider measures to enable scaling up, but much bolder action is needed. It needs investment in research and development that is stable, focused, and sufficient; investment in people, both trained here and attracted here from overseas; investment in cutting-edge laboratories and facilities with low barriers to access; investment in the research infrastructure that makes discoveries and developments possible; investors, both in government procurement and in the private sector, who are skilled, experienced and empowered to assess the benefits of engineering biology; investment in our regulatory capacity, so it can lead, not follow developments; and investment from the public, pension funds and private sector in companies that scale up in the UK. We know that the Government recognise this opportunity and the areas where action is required: they must now move from recognition to decisive action.
Some will say that we cannot afford to invest in technologies of the future, such as engineering biology, right now. This would be to fall into the same trap the UK has for the last decade or more. The truth is, we cannot afford not to—otherwise, the benefits of engineering biology will be realised elsewhere. That narrow window of opportunity the Minister referred to is closing and we cannot afford to miss it. I beg to move.
Viscount Stansgate (Lab)
My Lords, it is a pleasure to follow my noble friend Lady Brown—on this committee I like to think we are all noble friends—and to thank her for the way she led us through an exceptionally interesting inquiry. I endorse all the comments that she made about our staff and advisers, some of whom are present today.
I thank all our witnesses—I think there were about 30—and am grateful for the evidence that we received; there were about 50 submissions. It is important for the science community outside this House to understand that we really appreciate the effort they make to provide evidence for us and the expertise they bring to bear. Their contributions enrich the House and enable us to have a better understanding of an area such as this which is fast-moving and full of enormous potential. I, for one, as a member, learned a great deal over the course of our inquiry.
It is interesting to me that this is a precursor debate for the debate we are going to have in due course when our current inquiry gets published and is eventually debated. The reason why we have embarked on our current inquiry is precisely because this country is often a leader in discovery. We are pretty good at spin-outs and start-ups, but we are failing at scale-ups, hence our subtitle.
It is a pleasure to see the Minister present for this debate, because I, for one, would like to feel that he thinks that a committee such as ours and reports such as the one that we have produced are designed to help him, as a Minister, to argue the case within the Government, and are seen as constructive. I might add that it would also be helpful to have a Treasury Minister here because in future we will need a change in the Treasury’s mindset if we are to make real progress in the crucial role of scaling up. I hope that, at the very least, the Minister will be able to confirm today the £2 billion of funding over 10 years promised by the previous Government, although, to be honest, even that will not be enough. We need co-ordinated and sustained work across government, and that is not easy.
Engineering biology is about growth. Make no mistake: it is as much a part of the Government’s growth agenda as anything else. I wish to convey to Members not on the committee, those reading this and—heaven knows—the few people watching our proceedings today the excitement of the new era being opened up by engineering biology. It is a fast-developing field of science. The applications are vast and diverse and could provide immense benefits to the UK from medicines and manufacturing to making new materials, more resilient crops and addressing climate change. We have a fantastic science base and real potential but, as the committee’s former chair just said, there is a real risk that we are falling behind because other countries are catching up. Urgent action is needed, or we run the risk of seeing science and technology developed here but exploited elsewhere.
Only last Thursday, we had a Question in the Chamber about the decarbonisation of transport. Of course, one of the thrilling things about engineering biology is that, in the future, it may be possible to use molecules to, in effect, grow sustainable aviation fuel. That is just one of the ways in which engineering biology can have a huge effect on the future. It is always the same with new technology; the same is true of this House’s current interest in space. We need to identify areas of engineering biology at which the UK excels and which it is well placed to exploit, because, sadly, we cannot do everything.
I hope that the Minister will use this debate to reassure the committee that engineering biology will feature strongly in the industrial White Paper when it is published. I hope that he will be able to say more about the Regulatory Innovation Office—I hope that the noble Lord, Lord Willetts, will also speak about that—because we are well placed to play a leading role in setting standards internationally. Of course, a crucial challenge is where to go for scale-up funding, and initiatives such as the National Wealth Fund and the British Business Bank may help, but there is still a lack of significant funding.
In the short time I have available, I would like to convey some of the views of organisations outside this House. With a report that includes engineering and biology in the title, I went to both the organisations responsible for those subject disciplines. The Royal Society of Biology welcomed the report, saying “the use of bioengineering in plants can unlock multiple benefits in this sector by enhancing disease resistance and increasing productivity and nutritional content, provided that this is proportionate, scientifically justified and consistent and the potential benefits and costs of action or lack of action as a result of precaution are considered”. That is quite carefully phrased but, nevertheless, it recognises its importance. I hope the Minister can reassure the scientific community that in taking this area forward, there will be consultation with all the relevant scientific bodies.
When I got in touch with the Royal Academy of Engineering, it was more explicit on the issues that it wanted to raise. “Now is the time”, it said, “to ensure the longevity of engineering biology and build on its success to accelerate translation, demonstrate commercial scale and secure the value from such activities in the UK”. I could not put it better myself.
My time is almost up, but I want to make a final point. First, I endorse everything that the former chair said about the visa policy. It is all the more important when you consider what is going now on in the United States. Last week, Sir John Bell told our committee that he had people on the phone all the time saying, “When can we come and work in the UK?” This adds urgency to everything that we do. Whether or not you like the rhyming title of our report, the fact is that this is an opportunity that we must not miss, and I, for one, hope that we do not.
Lord Willetts (Con)
My Lords, I congratulate the noble Baroness, Lady Brown, and all the members of the committee on an excellent report. I very much agree with its key theme of the scale-up challenge, which is one of the big obstacles to turning our great science and innovation into substantial, successful companies. I declare my interests as co-chair of SynBioVen, which invests in a set of synthetic biology companies, and as the newly appointed chair of the Regulatory Innovation Office. I will briefly explain the perspective of the Regulatory Innovation Office on this report, especially focusing on paragraphs 106 to 135, which touch on regulation.
Our job as the Regulatory Innovation Office, reporting to the Minister—who I see in front of me—is to try to ensure that the regulatory regime promotes innovation in new technologies and does not act as a barrier to their use, to try to come up with granular and practical advice, to think not just about regulations but, often, standard setting, which can be even more important in the early stages of a technology—one of the advantages of being so good at science and tech is that we should have a place at global standard-setting meetings—and to be very aware of the importance of public understanding, public engagement and attitudes to risk. The committee had some specific proposals on the regulatory regime, and I will touch briefly on three of them.
First, in paragraph 107 there is a discussion of what one can call only the obscurity and secrecy surrounding the Engineering Biology Regulators Network. There is a moment in the report where Angela McLean, the Chief Scientific Adviser, says that she does not know who is a member of this august network. In the past few months, led by the Minister for Science, that has all changed. We now have public information, which should of course be available, about the members of the Engineering Biology Regulators Network. That is not just a list of names, but a proper account of the 12 key regulators involved and a brief account of what each does in this area, with an email address and a contact address for each one. A start has been made to make the Engineering Biology Regulators Network more publicly accessible, although there is more to do. We do not yet have the coherent taxonomy of what all the different regulatory bodies do that the committee called for, but now that we have this group and it is functioning and publicly known, we can use it as a core network to spread understanding of the different roles of the regulators. There is more to do, but we are making good progress.
Secondly, in that part of the report there was a discussion of the sandbox model for finding exactly how a new technology could be implemented and how the different regulators could impact its development. One regulatory sandbox has now been launched, involving the Food Standards Agency. A sandbox is not a one-day session in a committee trying things out; this is a two-year programme costing £1.6 million focusing on the development of cell-cultured food, particularly meat. This is a real expert exercise engaging with the British start-ups active in this space, finding out exactly what regulatory issues they will face and tackling them as part of the sandbox process. We do not want sandbox reports after which nothing happens. RIO will be involved in this throughout, and there will shortly be an open call for the creation of a second sandbox in engineering biology, and we will see what applications there are. I very much look forward to supporting that.
Thirdly, there is a discussion in the report of regulatory capacity. In the few weeks I have been doing this job, I have already heard almost every regulator say to me, “Of course we would love to do more to promote new technologies, but we are understaffed and under-resourced. If only we had more money, we would be able to do it. Could you help us get more money, please?” We have to be very careful. It is not the job of RIO to go around with an open chequebook writing lots of cheques. We do not have the resource for that, and those are decisions for Ministers.
But there clearly have been specific occasions when we just needed to help build up capability. The Food Standards Agency, which is particularly covered in the report and has matching responsibilities to the EU post Brexit but with 1/10th of the capability, has recently been awarded £1.4 million from the regulatory innovation fund as a one-off payment to boost its capacity in some innovative technologies. So, I assure the committee that, from the specific perspective of the Regulatory Innovation Office, this excellent report is being taken into account and is already influencing the delivery of government policy.
Baroness Bowles of Berkhamsted (LD)
My Lords, I welcome the committee report. It is a case study in how it is not enough to lead in an area of technology—that is easily lost without a joined-up strategy and harnessing the role of procurement. This is elaborated in chapter 2, with quotes from Dame Angela McLean that
“a purchase is worth 10 times a grant”,
and from the noble Lord, Lord Willetts, that it is easier to sell products to overseas Governments than to the UK Government because of UK procurement rules. It is still very hard for smaller companies to be considered at procurement stage, despite the new rules. The system, including the resource demands, remains against them.
Worse than that are the extensive pre-procurement phases of innovation grants. Designed to draw in innovative companies, they then have the lifeblood sucked out of their intellectual property, removing their competitive edge for any procurement stage or commercial exploitation, forced to hand it to competitors or incumbents. I drew this to the attention of the House in the science and technology and economy debate on 31 October 2024, and I have to tell the Minister that, despite his endeavours, if anything, it has got worse.
The point and principle at issue is that many, if not most, pre-procurement phase terms of reference and/or contracts and full procurement contracts require the purchaser—that is the government department, quango, commercial catapult or Innovate sponsor—to be granted a free, worldwide, perpetual, irrevocable licence, with full sublicensing rights to anybody, to the intellectual property, including any necessary background technology. This is then made available to others at the procurement stage or later renewal of contracts.
Anyone who knows anything about intellectual property will understand this undermines the innovative company’s position, not just in later tendering to government but for wider commercial exploitation. Competitors have free licences without having invested in research, and it undermines the ability to attract investors and scale business. The Chartered Institute of Patent Attorneys is very concerned about this issue and has set up a committee to gather evidence. As the key relevant professional body, I suggest the committee looks to CIPA for expert evidence going forward.
Meanwhile, let me give a couple of examples. Recently, a department wrote a threatening letter to a growth company that had submitted a procurement bid in which it referenced its existing patents to illustrate its state of development. Among other things, the letter stated that, by having patents, it was behaving anti-competitively and demanded that the patents be surrendered—note the belief that patents are anti-competitive, despite all the rhetoric we have about innovation, growth and export. Even among key officials at the Cabinet Office, IP is not fully understood.
Another SME had signed up for an Innovate grant in collaboration with a catapult. During later due diligence for a large-scale licensing deal with a multinational company, it discovered problematic IP terms. These terms created a serious impediment to the deal being completed and favoured Innovate and the catapult. It took persistent follow-ups with the senior management of Innovate UK and the catapult organisation before they agreed, in writing, to remove the IP obligations. That SME was lucky. More stories, many around the MRC, end in refusal to change terms—but that bar should not be there in the first place.
It also highlights how young, unadvised companies do not see the danger, especially when hidden behind headline statements offering the grant declaring that you keep your own IP. Undermined IP has no value, even though you keep it. These clauses are also generic, whereas in law what is right for commissioned copyright is wrong for patentable inventions.
Technology cannot scale without intellectual property. Investors will not invest unless you can demonstrate competitive advantages, and our government-sponsored system of IP destruction must change dramatically to get growth, scale-up and value out of grants and the line of sight mentioned in paragraph 106 just referenced by the noble Lord, Lord Willetts.
Baroness Willis of Summertown (CB)
My Lords, I greatly appreciated taking part in this Science and Technology Select Committee investigation into engineering biology and extend my thanks to my noble friend Lady Brown for such excellent chairing of this report. The committee heard from many witnesses across industry and academia, and a number of clear themes emerged. I am going to focus my comments on one area that is close to my experience and expertise, and that is barriers from lack of opportunities for skills training.
Three areas of concern were raised by the witnesses. First, there is the training of the next generation of academics to lead the science. One of the problems with engineering biology is that, as a subject, it does not fit neatly within any undergraduate programme. Rather, it requires its researchers to have a knowledge of biology, biochemistry, chemistry, engineering, medicine, computer sciences and even earth sciences. As a result, we are relying almost entirely on PhD and master’s programmes to bring together those skills to then be able to apply them. Herein lies the problem.
There is currently really poor provision for engineering biology doctoral training programmes compared to other strategically important topics. In 2024, only two new doctoral training programmes were announced in engineering biology compared to 13 in AI. The situation is even worse than this because, if you drill down, as I did yesterday evening, the number of places advertised at Oxford on the engineering biology DTP for next year was six, while the number for AI—I am sorry, but the noble Lord next to me is probably leading one of them—is 38. We can immediately see what the issue is here. Essentially, we need greater provision for PhD places. Will the Minister tell us whether there are plans greatly to expand the training offers at doctoral level beyond that that has already been promised?
We also recommended that the Government should explore dedicated master’s courses in engineering biology. The Government’s response to our report said that they would explore options around this. Will the Minister say whether any progress has been made here?
The second issue we heard about from our witnesses was the urgent need for skills training opportunities for technicians in engineering biology. From the evidence we received, it is very unclear where training opportunities sit for technicians at present. If the industry expands, as we hope it will, this problem will only get worse. One route is via apprenticeships, and we heard a great anecdote from Professor Susan Rosser from the University of Edinburgh about how useful an apprenticeship can be for the university in its spin-out but also for the career development of the person involved. In essence, this individual came from working in a fast-food outlet—I think it was Kentucky Fried Chicken—to become a highly skilled automation biologist running and fixing robots and a huge bonus to their foundry as well. Key to creating more apprenticeships will be the role of Skills England, which we understand is still being set up. Can the Minister tell us what interactions DSIT has with Skills England to ensure that it is able to provide the critical training very focused on engineering biology?
Finally, we heard from a number of witnesses about the lack of skills needed for understanding the importance of engineering biology across government departments. Engineering biology currently sits under DSIT, but its outputs are highly relevant and important to Defra, the Department for Energy Security and Net Zero, the DHSC, the Department for Education and others. Funding via the Treasury also needs to be brought into this mix. There needs to be shared communication and ownership across these departments. Can the Minister therefore tell us whether there are plans to increase skills training relating to the potential of engineering biology for civil servants across these many departments, alongside the appointment of a national sector champion for engineering biology to co-ordinate, as the noble Baroness, Lady Brown, raised?
In summing up, although I welcome the progress thus far, I would appreciate it if the noble Lord, Lord Vallance, could respond to some of the more specific points I have made, which I feel are holding us back from our full potential in this area at present.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the committee and the noble Baroness, Lady Brown, for their careful, detailed work and informative introduction. I have two points to make, about the general approach and about risk. I am taking a different, rather more sceptical approach than we have heard from speakers thus far.
First, to start with a traditional metaphor—fitting for me as a carpenter’s daughter—if you only have a hammer then everything looks like a nail. I understand that the committee may not have considered this within the scope of its inquiry, but I note that it did not consider which problems and issues are appropriate for synthetic biology solutions, and which need different approaches. If we are to avoid silos and have joined-up, systematic government, we need government and Parliament to think about prioritisation, funding, and even rhetoric and policies, as well as about what problems and big crises our societies face and whether synthetic biology is the best way to tackle them. Human time, talents and money are all scarce resources. They need to be used well and not in dangerous directions or into dead ends.
I will revisit these issues with my fatal Motion on the gene-editing regulations next Tuesday but, to use an example to illustrate my point, ScienceAlert yesterday published an article titled:
“Scientists Engineer Bacteria to Make Soils and Crops ‘Glow’ Different Colours”.
It quoted an MIT researcher explaining that
“adding two different bacteria … could, in effect, make fields glow red when pollutants take hold and green when nutrients are high”
so that
“it might respond to metals or radiation or toxins in the soil, or nutrients in the soil”.
We are talking about messing with the genetic make-up of bacteria and letting them loose on the world to know whether a field is contaminated with heavy metals or whether you have applied too much fertiliser.
I posit that there are other approaches here. You could have land managed and cared for by a farmer or grower—informed by government-funded, expert agro-ecological research—who intimately understands every corner and is protected by a society that has adequate regulation to ensure she will not be pushed to spread sewage sludge contaminated with heavy metals on it or forced to use irrigation water loaded with pesticides and pharmaceuticals. We need to stop assuming that we can make a mess, destroy the immensely complex earth systems developed over 4 billion years, and just engineer something to fix it. That is solutionism, and operates only to magnify the damage and, for a while, allow it to continue.
There are problems—the need urgently to develop a vaccine against SARS-CoV-2, for example—for which synthetic biology is the right emergency response, but rather than assuming we can always scramble to that point, we need to think about how we stop the crises emerging in the first place. Synthetic biology cannot help us there. Ultimately, we need, as the Oxford geographer Jamie Lorimer explains, to work our way towards a probiotic: a healthy society and planet.
The final six pages of the report talk about risks, focused particularly, and with good cause, on the danger of inappropriate technology and materials falling into ill-intentioned and ill-prepared hands. This is an important issue, and I am pleased to see the focus here, but there is no real focus on the general systemic risks of messing around with an immensely complex biological system, about which we are, to compare with the education of a child, around early to middle primary in our understanding. We have just about mastered basic mental arithmetic, while life is operating at the level of the most sophisticated maths professor. Synthetic biology is mucking with systems that we just do not understand.
To illustrate that, I draw on another piece of just-emerging knowledge; it is an absolutely fascinating, paradigm-shifting discovery. I reference a Nature article published on 8 April and entitled:
“Cells are swapping their mitochondria. What does this mean for our health?”
That mitochondria can swap around cells is an entirely new discovery. It is massive. Most—nearly all, probably—of our synthetic biology does not take into effect how gene editing of cellular material might interact with that.
I have one final, extra thought here; it is an example of how we have inherited from the 20th century lots of ideas that we need to unlearn. Francis Crick’s central dogma was grounded in Crick’s reductionist belief in the possibility of explaining biological entities in terms of their physical and chemical components. He was absolutely wrong. Ultimately, I would urge, at the base, consideration of the phrase “engineering biology”. You can engineer machines, but life’s living organisms and ecosystems are nothing like machines. We need to acknowledge and examine carefully the long-running category error that we inherited from the 20th century.
Baroness Neuberger (CB)
My Lords, I, too, pay tribute to the noble Baroness, Lady Brown, and her superb chairing of the committee and this inquiry. I also pay tribute to our wonderful staff, without whom, I have to say, I would have found it very difficult to write this speech.
I ought to declare my interests. I chair both the University College London Hospitals NHS Foundation Trust and the Whittington Health NHS Trust. I am also a non-scientist member of the Science and Technology Committee, but I have a passionate belief in the need for the public at large to be engaged in the exciting—and enormously valuable to the UK—advances in scientific research, where this area of engineering biology plays such a strong role and where the UK has been a world leader for decades. However, we so often fail to tell the story.
We have done astonishingly well in the area of engineering biology, as well as in its predecessor disciplines of microbiology and biochemistry, but we are remarkably good at keeping quiet about it with the wider public. The committee was told that UKRI is funding some public engagement efforts and that DSIT has done a survey of the public’s knowledge and understanding of engineering biology, but that really is not enough. Public awareness is distressingly low. If the Government really foresee the bioeconomy taking off in consumer-facing sectors such as agriculture, we need to ask whether they are putting enough effort behind the regulators—the noble Lord, Lord Willetts, raised this—in terms of public engagement, resourcing such engagement and assessing their ability to communicate with the public about the implications of the products that they are creating.
The debate that took place on GMOs is an object lesson in how not to do it. We were and are remarkably successful in altering the DNA of plants and animals in ways to improve productivity or to resist disease. Our use of gene therapy, including using viruses as vectors for introducing genetic material into humans as a cure for diseases, is really exciting and life-saving, yet there is still a surprising amount of negativity. A quick Google search provides many examples of apparently reasoned objections. It seems that some sections of the public are far from convinced.
Although public perceptions of safety may be different from actual safety, we ignore those concerns at our peril. One big scandal could set research back significantly. For example, if there were the uncontrolled release into the environment of an organism that disrupted ecosystems—let alone a virus—or if there were a high-profile scientific scandal, public opinion could turn pretty quickly. We have not had that here yet, but they have had it in China, and it has had a damaging effect.
We need to think this through. We do not want ethical considerations blocking advances, but avoiding that requires keeping the public with us—explaining, educating and encouraging excitement and pride at what we can achieve. The Nuffield Council on Bioethics sensibly said that we have to be anticipatory here; that is missing. Of course, that is the exact opposite of what happened with the GMO debate. Indeed, we now hear that some of the hybrid plants that the UK is working on are easier to grow in the United States than here. This suggests greater public acceptance there—something that we could learn from—as well as an easier regulatory environment. We may or may not be sympathetic to that.
We are trying to negotiate a trade deal with the United States right now, so some of this matters. We have to get public perceptions and understanding in the UK up to speed. It is important for UK plc, as well as for our ability to cure and treat innumerable diseases, let alone many other benefits. What does the Minister plan to do in this area? We know that he wants limited priorities in a framework built around delivering four main outcomes, but we know nothing yet about how public engagement fits into all of that, which is a major component of the Government’s industrial strategy.
In our report, we argued that the Government should support public engagement for engineering biology and that regulators should explain the new technologies that they are regulating to the public and be resourced to do so. We said that UKRI should fund research into the public attitudes to engineering biology and, indeed, the ethical considerations as things come to market. The Government accepted our recommendations only in part. What is desperately lacking is a much broader public awareness and engagement campaign. Unless that happens, the ambitions for engineering biology will be hard to realise, public sympathy will be lacking, and we will risk more debate like that around GMOs, which has not gone away. The excitement and pride that we should have in our advances will be sorely lacking. I hope that the Minister can provide us with some comfort and tell us that public engagement is high on his list for regulators and government more widely.
Baroness Young of Old Scone (Lab)
My Lords, I too was pleased to have been a member of the committee that produced this report on an important issue that was so ably introduced by the noble Baroness, Lady Brown of Cambridge. I declare my environmental and higher education interests, as listed in the register.
I shall touch on two issues that may not have been touched on by others. First, our report emphasised the need to scale up, and scale up fast, if we are not to lose our place in world markets. There has been a range of estimates of what size of scale-up is possible, but it is not clear from many of them on what basis that has been calculated. One could say that visionary—but perhaps on occasions rather wild—claims are made about engineering biology replacing, for example, all fossil fuel-based materials, which would be a massive transformation.
We have not yet seen enough examination of what it is that is being engineered. What are the feedstocks? It is clear that our ability to depend on feedstocks grown or produced in this country is to some extent limited, particularly for those feedstocks that rely on production on the land. The Government have just finished consulting on a land use framework for England, which was needed to ensure that wiser choices are made about competing land uses. Engineering biology would be another competing pressure for land on a huge scale, if some of the visionary ways forward were made reality. That is land that is finite on this small island. Of course, major growth in engineering biology could potentially take up the whole harvestable land surface, which will be in competition with food security, timber supplies, biodiversity, housing, the view—practically any other land use that you care to mention, and I name but a few.
Importing feedstocks on a substantial scale would also pose challenges. It could leave us subject to external shocks, as we have seen already in recent years. Alternative sources of feedstocks lie in the materials that we already use being repurposed as part of the circular economy. That may, for some engineering biology activities, be a fairly secure and valuable part of our use of materials at the moment, but we need to see the circular economy strategy so we can judge whether it takes into account the potential of engineering biology and takes it forward as part of the circular economy scene.
Since the Government have not yet commissioned an analysis of feedstocks and their sourcing, I ask my noble friend the Minister whether they will now do so, taking account of those three sources: homegrown, imported and circular economy-based feedstocks. Otherwise, if securing those feedstocks is not part of what they are trying to do, it simply looks as though the Government are not serious about upscaling. Can the Minister tell us when we will see the circular economy strategy? Will it deal with the feedstock issue?
If substantial land-based feedstocks are envisaged, Natural England should be included in the regulatory arrangements to ensure that land use and biodiversity impacts are not forgotten, as they were in the GMO debate, during which I was proud to be on the opposite side of the noble Baroness, Lady Neuberger. I hope that the noble Lord, Lord Willetts, in his new regulatory role, is listening. Natural England is not currently a member of the Engineering Biology Regulators Network.
My last point, which I have 20 seconds to deal with, concerns the lack of a reliable process internationally for the screening of sequences of concern, and potential misuse of the technology. We have had guidance, but guidance is not enough. The Government said that they would consider putting screening on a statutory footing. What is the timescale of this consideration? What steps are we taking to develop international consensus on the need for screening for sequences of concern?
Lord Mair (CB)
My Lords, I speak as the new chair of the Science and Technology Committee, and pay tribute to my predecessor, my noble friend Lady Brown, for her splendid leadership of the committee over the past three years. I congratulate her and the committee on producing this important report on engineering biology, and on her excellent introductory speech to this debate.
The report has the significant title: Don’t Fail to Scale: Seizing the Opportunity of Engineering Biology. It is on the more general topic of scaling up UK science and technology companies that I wish to briefly speak. As already mentioned by the noble Viscount, Lord Stansgate, our committee has recently launched a new inquiry into financing and scaling UK science and technology. It is about that challenging pipeline, from the initial innovation, through the scale-up investment and culminating in the development of new industries in the UK that can so effectively benefit our economy and public services.
It has long been recognised that the UK struggles to translate a lot of its excellent research into the largest technology companies. This is now leading to a relative decline. In 2013, 118 UK companies were in the top 2,000 spenders on R&D globally. By 2023, that had declined to 63. China has more than quadrupled its share, while the US has maintained a leading position, with around a third of those companies. The UK has only two companies in the top 100, both pharmaceuticals. There is also a growing trend for the companies that do start up here looking overseas for investment, and increasingly being sold to buyers in the US. This is leading to what this House’s Communications and Digital Committee described as the UK becoming an “incubator economy”.
All this matters immensely for the UK. The Government are relying on economic growth to continue to fund public services, healthcare, measures to mitigate climate change, and, increasingly, defence. There can be no doubt about the potential for technology to enhance growth, tackling global and national problems, but if our science and technology companies continue to fail to scale—and engineering biology is a specific example of this—then the economic and social benefit from these technologies, and from the UK’s R&D spend, may well end up overseas.
It is clear that the majority of investment that UK science and technology companies will have to raise will come from the private sector, but this has been limited in recent years by the pull of the US market, which has a much deeper pool of available capital. It has also been limited by global trends, such as the rise of passive investment, which has led to fewer investors actively seeking out and investing in smaller UK science and technology companies.
The committee’s report recommended reforms in the very important pensions sector. These entail supporting consolidated pension funds to be less conservative and to invest in small, innovative UK tech companies, providing scale-up capital for them as part of their diversified portfolios. Australia, Canada and the Netherlands are examples of countries that have successfully implemented such practices. The Government are seeking to address this through the Mansion House reforms to encourage pension funds to combine and invest in UK science and tech companies, but one witness described this as a generational shift that could take a decade to implement fully. The reforms and their implementation need to be more ambitious and faster. Can the Minister set out how DSIT is engaged with this process of encouraging major pension fund investment in innovative UK tech companies?
Our inquiry into financing and scaling UK science and technology is just getting under way, but we have already heard a lot of important evidence. Our call for evidence is open until 9 May and sets out some of the areas we are interested in, including what we can learn from international comparisons. We are interested in how well current UK policies to support scaling up are working.
The problem of scaling is not new, but we are in a new context with a new Government, a shifting global order, changing priorities and a new technological landscape. The response from the Government to the engineering biology report left a lot to be announced in the forthcoming industrial strategy and after the spending review. There are some promising initiatives, but we are still waiting to see the overall strategic direction and whether the UK will seize the opportunities available or continue to fail to scale. We look forward to continuing our present inquiry and the Minister’s participation in it. Scaling our science and technology is a hugely important and pressing issue. We can all agree that we have to get it right.
Lord Borwick (Con)
My Lords, a long time ago I had the privilege of being responsible for an engineering company that made the London taxi, and I had 1,000 employees at the age of 31. Quite a few of those people were in our foundries business, making components for other companies in the days when electricity costs were so low that you could use electricity to melt alloys. Alas, all the foundries have shut down now, I am told.
Sometimes we had to plan a casting before the exact alloy had been specified, and the answer to the question, “What is this thing actually made of?”, was always unobtainium. This was a fictional alloy that never existed, and I was amused to discover that unobtainium was the valuable material in the science fiction film “Avatar” that could be mined only on that beautiful planet Pandora. There was another fictional alloy, unaffordium, but that was too expensive. The point of this story is that engineering biology can now truly create the biological equivalent of unobtainium. Rather than develop an organism and then find out what it does, we can specify what we want and develop the organism to do that. We will start with the need and end up with the answer to that need with a customer attached.
There are many stories, and some of them may even be true, of pharmaceutical developments whose markets proved to be different from those specified when the project was started—Viagra and penicillin spring to mind. Lots of basic research will get funding as it changes the question “I wonder what its properties are?” to “I wonder whether it actually does this?”
Engineering biology is one of the most interesting and exciting developments that I have ever heard of in engineering. This is an open goal for UK companies, which is why we wrote this report with the slightly cheap headline Don’t Fail to Scale. I feel that engineering biology will happen anyway, but it could happen earlier and with less risk if it has government support. Will it get full government support? Our regulators do not like new risks; that is in their nature. New risks mean new challenges, and possibly new things going wrong. This is not a party-political point; the identity of the Government does not matter, as all regulators behave similarly.
What is different between Governments is the urgency with which a problem is addressed. Let us compare this with the timing of a debate that took place three days ago. It was a two-hour debate on a report by the Economic Affairs Committee entitled National Debt: It’s Time for Tough Decisions, which was published last September. That is a really important subject, but our engineering biology report was published this January, and I am very pleased that it has such a level of importance that it is being debated in April.
I am pleased that the Government share my enthusiasm for this subject so palpably, but I would be hard put to justify why the delay has been halved while the urgency has doubled. If it means that the Government are indeed taking this subject seriously and urgently, then bravo to the Labour Party—at least in this respect. However, some recommendations have generated responses that are a straightforward fudge—for example, the recommendation in paragraph 57, which generated a response mentioned by the noble Baroness, Lady Brown. The recommendation is that the Government should appoint an engineering biology champion to push forward some action. The response was:
“The government will work internally and with the sector to explore the feasibility of a national EB champion”.
Can the Minister say whether they will actually do this or merely explore the possibility of doing it? If so, when?
In summary, this report is excellent, if too long; it could have been even better if it were half the length. However, the timing of this debate is the best evidence that the Government are taking the subject seriously, and that is wonderful. I only wish that the Treasury was taking the Economic Affairs Committee’s report on national debt as seriously as this report has been taken—then we could actually afford to do what is recommended rather than only “deeply consider” the proposals.
Lord Tarassenko (CB)
My Lords, I too congratulate the noble Baroness, Lady Brown of Cambridge, on her excellent report. I would not say that it is too long; rather, it is very comprehensive. However, I was surprised that the only research institute mentioned in it was the Sainsbury Laboratory in Norwich. At another institute not too far away, there is another example of world-leading research: the ground-breaking work in synthetic biology at the MRC Laboratory of Molecular Biology in Cambridge.
As we all know, all living things are built from proteins created from the same 20 amino acids. Work at the LMB has shown that, by reprogramming the genetic code, it is possible to incorporate non-natural amino acids into proteins, thereby enabling the creation of new classes of enzymes, drugs and biomaterials—for example, polymers that can be programmed to be biodegradable.
As has been pointed out several times in this debate, the UK was a world leader in synthetic biology 10 years ago, following major investment from UKRI since 2007. The report indicates that the UK’s position at the forefront of the field has slipped. One view is that the ratio of outputs to the level of funding for synthetic biology has been disappointing in the last decade compared to other areas of research excellence in the UK.
An alternative view, which is more my view, is that the field has expanded, and engineering biology, a description that started to be used only in the late 2010s—I hope not a Windscale-to-Sellafield moment—reflects the maturation of synthetic biology and its integration with other fields, such as machine learning and advanced manufacturing. As a result, the level of funding needed a substantial increase just to cope with the expansion of the field.
I believe that the rewards of a multidisciplinary approach to engineering biology will be great. To optimise the design of a new enzyme or protein, thousands of variants will need to be tested. Machine learning, which, as we all know, is a strength in the UK, can be used to predict which variants should be tried first, analyse experimental results in real time and suggest the next experiment, a process known as active learning. To reassure my noble friend on my right, a good proportion of the PhDs in the AI CDTs will be for the applications of machine learning, for example, developing active learning techniques for engineering biology.
As the report states, and my noble friend Lord Mair made the point very eloquently, engineering biology is an illustrative case study of wider issues across the UK economy. The Government’s willingness to set 10-year budgets for some R&D activities is welcome but should be accompanied by funding nimbleness. Excellence in generating valuable and novel outputs should indeed be rewarded with follow-on funding, but at the same time we should not be afraid to close down unproductive lines of inquiry. This balanced strategy happens much more readily in research institutes, which is why I mentioned them at the beginning.
Beyond academic research, the early stages of the translational pipeline are mostly working. The number of university spin-outs is growing year on year. Funding for series A and series B is generally available, but as a country we struggle with series C and beyond. This makes it very difficult for innovative British businesses to scale and remain in the UK.
Market access is a further issue in a global economy, and our US and Chinese competitors benefit from huge domestic markets. The creation of the National Wealth Fund and the launch of the British Growth Partnership are positive developments that will help UK companies to access the capital they need to scale, but it is fair to say that we are in a holding pattern as we await the publication of the final report of the pensions investment review, the unveiling of the industrial strategy and the outcome of the spending review, all in the next few weeks.
No doubt we will return, as has been promised by my noble friend Lord Mair, to the general issue of how to ensure that we do not fail to scale, if only in the debate on the recent report from the Communications and Digital Committee on the scaling up, this time, of AI and creative technologies. However, I am sure that I speak for everyone when I say that we hope that the path and means to scale up in the eight sectors of the Government’s industrial strategy will become clearer by the end of June.
Lord Drayson (Lab)
My Lords, I, too, was pleased to be a member of the Science and Technology Committee during this inquiry. I draw attention to my register of interests, particularly in my role as a science entrepreneur. My comments will focus on industrial strategy, given the emphasis that the Government placed on their forthcoming industrial strategy in their response to our report. In particular, I will focus on UK policy towards foreign ownership of key UK assets, an issue that has come into very sharp focus recently, given the dramatic shift in US government policy and the close relationship between the ownership and control of the major US technology companies and the Trump Administration.
Since the 1980s, the UK has pursued the most open policy in the world towards foreign ownership of sovereign assets. This policy, consistently followed by successive Governments, both Labour and Conservative, has conflated foreign investment with loss of control. Ministers have long lauded foreign investors for buying UK assets, such as infrastructure, businesses and, most recently, university scientific research, as a vote of confidence in the UK and a boost to economic growth, when the reality is that once ownership is lost, management decisions are taken abroad, wealth creation accrues overseas and the critical mass of UK-owned and UK-run businesses declines.
Scant attention has been paid to the corrosive effect this policy has on UK wealth creation, our national culture and our confidence in ourselves and our future to the point at the start of this year where less than 5% of UK pensions were invested in UK equities, the UK stock exchange had fallen to 21st place, level with Kazakhstan in world IPO rankings, and the talk in founder-entrepreneur circles was about how quickly they could move their companies to the US to escape the aversion to risk and lack of scale-up capital that exists in the UK.
However, the revolution in US policy that is taking place under President Trump presents a once-in-a-generation chance for the UK to adapt a new industrial strategy that encourages UK science innovators to stay here and to build here, for UK investors to back those entrepreneurs and for these UK-owned and managed businesses to go out into the world and generate trade and wealth, filling the void left by “America first” trade policies and tariffs that are destroying long-established supply chains and straining international partnerships.
There is now a clear and urgent need for the UK to respond by implementing an industrial strategy that places UK sovereignty at its centre and enables UK ownership of key technologies and companies through policies that encourage UK finance in UK science, smart regulation that accepts risk and prioritises growth and government procurement that creates critical mass in the UK market to enable UK-owned and managed technology businesses to win.
For example, in AI, the enabling technology of the 21st century that will have a profound effect on all sectors, in particular engineering biology, right now the UK has no sovereign capability in large language models. If you are a Brit wishing to use AI, you have a choice between US, Chinese or French models. It is urgent for the Government to address this lacuna. When are we going to wake up and realise that if we want our British way of life, our values, our openness and our diversity to endure, we had better have ownership and control of the technologies that our society will depend on and the algorithms that our children will be shaped by?
Our scientists and entrepreneurs have the talent and the drive; they just need an active industrial strategy from their Government that encourages and enables UK ownership and starts to build a critical mass of world-class businesses in engineering biology and in other growth sectors. I look forward to the Minister’s response.
Baroness Freeman of Steventon (CB)
My Lords, I join others in congratulating the committee on tackling this important and scientifically very exciting topic. However, as the noble Baroness, Lady Neuberger, pointed out, it is a topic that still stands under the shadow of the GM debates of around 25 years ago, debates held up in the world of science communication as a model to avoid.
There has been a lot of research on what went wrong then as well as on public opinions on genetic engineering, and the research all points in a similar direction. People generally see the potential benefits of most forms of genetic engineering, and they want to encourage it, but there are key concerns, and if these are not listened to and, more importantly, taken into account and acted on people rightly feel aggrieved. That is what happened 25 years ago, and we must avoid those mistakes being made again.
Underlying everything is the issue of trust and trustworthiness. People are sensitive to the possible motivations of others. If they feel that someone is trying to persuade them, they quite sensibly do not trust them to be even-handed with the evidence or to be acting in the public’s interest, rather than, say, industry’s. This is where I fear that the language used in general around engineering biology, including by this Government, tends to sound weighted in favour of emphasising benefits without enough emphasis on how people’s concerns about different risks are being considered and acted on.
I will briefly go through the top concerns that have emerged from 25 years’ worth of work in this subject area, and give the Minister the opportunity to make it clear how the Government are mitigating each. One concern is the risk to human health. Most people trust the FSA or the healthcare regulators on that, at least on the short-term risks. That wrongly became the main focus of the GM debates in the past, without enough attention paid to the other concerns, such as—and perhaps the Minister can discuss this—a lack of transparency about who is driving the area forward and how decisions will be made and by whom, with a particular concern about the test for public benefit.
There is a perception that financial gain will speak louder than public benefit and that scientists are not always best placed to put brakes on their own research. They might get carried away with the excitement of what is possible over what is really necessary or desirable. Who will apply a public benefit test to potential applications and how? How will that be made transparent?
In a related way, in the previous GM debates, a lot of the sentiment translated as against the technology or its use was actually concerned about the motivations and priorities of multinational businesses, the risk of inequity of benefits and the industrialisation of farming. How are the Government planning to mitigate against the same problem again by being upfront about identifying possible winners and losers?
I turn to the lack of information given to the public and consumers about the techniques and technologies involved, and the labelling of products. Labelling is absolutely crucial and comes up in every survey and study. People feel that they need to be empowered to choose. How do the Government propose to achieve this level of public knowledge and choice?
Concerns are always expressed about environmental consequences, and not just the potential effects on human health. There are huge possible outcomes here, if things such as gene drives are introduced into wild populations. Which bodies will be carrying out environmental risk assessments for engineering biology applications and how will an acceptable level of risk be determined? The Government’s current response to this report seems to focus only on the food and farming applications of the technologies.
Finally, there is the concern over the ethical and moral boundaries to synthetic or engineering biology. We must never forget that these are living things that we are bringing into existence to fulfil a function for our benefit. There is a lot of work on ethics in synthetic biology, and even work on public perceptions of the issues. The question is: how will this work be incorporated into the planning and regulation of engineering biology? Here I disagree slightly with the noble Baroness, Lady Neuberger, in that I believe that, sometimes, morals and ethics should stop progress in a particular direction.
There is an overall concern that the benefits might be felt before some of these risks manifest and that, by then, it will be too late to do much about them. Having a well-developed structure in place early to consider and deal with these issues is vital. “Pro-innovation regulation” is not a reassuring phrase on that front.
To conclude, all the fairly extensive research suggests that each application of engineering biology—medical, farming, fuel and so on—needs to be considered independently. However, most applications have public support, provided—importantly—that it is tightly regulated, that all the aspects that I have mentioned are considered and assessed, and the outcomes are monitored. Can the Minister put on record how each of these concerns is being dealt with, remembering that no one wants to be persuaded? They want to hear the truth and be reassured that the Government will listen to and act on their concerns.
Lord Berkeley (Lab)
My Lords, at the weekend I was reading a history of Dartmoor prison, which I live quite close to. In the last century, the prisoners were allocated candles to read by, but in fact they were so hungry that they had to eat them. We have not yet been allocated candles in this Room, but we could probably do with them to see by.
I congratulate the noble Baroness, Lady Brown, and the rest of the committee on this report. I am a bit of an ignoramus—I am just a civil engineer—so I listened with great interest to the witnesses, my colleagues on the committee and our special advisers. Like other noble Lords, I have learned a great deal.
I will concentrate on something I have been following for years: the fact that we need more scientists, as everyone has said. It is good that we got the Minister’s helpful responses so quickly. Some members of the committee gave those responses marks out of 10 based on whether they were helpful or not. That was probably very unfair on him, but he got very high marks most of the time—except for the immigration issue, which I assume came from the Home Office. In a subsequent letter to the Home Office, we described the UK visa policy towards scientists as
“an act of national self-harm”.
That is pretty strong for a letter from a committee, but it was justified. I hope that he does not take it personally, because it is not his fault—but let us hope that one or two others do.
I have been looking at how to get more scientists here. This is impossible to separate from our general problem with immigration, which gets very nasty in the press sometimes, and what we can do about it. Last week I came across a report, which my noble friend Lord Dubs gave me, from a marine pilot who has come up with a solution to the immigration problem across the channel. Many colleagues think that, if we stop immigration across the channel, all the problems will be solved—that is a load of rubbish. They will not be solved; they will be mitigated.
This eminent marine pilot came up with the solution that what is missing is a legal basis to take immigrants and their handlers to court if they come, and that we should reorganise search and rescue, the coastguard and everything else under one body so that they work together rather than separately. It is very simple, but it needs doing. He said:
“Prosecutions under existing laws, such as the Merchant Shipping Act 1995, are non-existent”.
If there are no prosecutions, nobody will be found guilty. I saw this paper only last week, so I shall send it to my noble friend the Minister. I suggest that he might like to pass it on to the Home Office and the Department for Transport. It is not his problem—he has said that he wants more scientists, and I believe him—but we have to find a way of getting them here; if we do not, we will be in serious trouble.
The question will come: who will pay for this? That retired captain has come up with a very sensible solution: it will be funded by the harbour dues payable by all the ships that go into harbours. I got involved in that about 10 or 20 years ago, in your Lordships’ House, when we found that ships going into British harbours were funding the maintenance of Irish lighthouses, which did not seem a good thing after 100 years of Ireland’s independence. That is one way of doing it—and it can be done without any government expenditure—so I shall pass it to my noble friend Minister. I congratulate all noble Lords on some really interesting speeches.
Lord Freyberg (CB)
My Lords, as the final speaker before the gap, I wholeheartedly congratulate the noble Baroness, Lady Brown of Cambridge, and the committee on their excellent report. I also put on record my thanks to Jenny Haigh and Dilys Williams from the University of the Arts London for their helpful briefing for today’s debate.
For reasons of brevity, I will focus on chapter 5 of the report, “Engineering Biology for Growth”, particularly the sections “Scaling Up Companies” and “Incentives and Mandates to Create a Market”. These sections shape my suggestions for the fashion and textiles industry—the focus of my speech.
The report warns that UK innovations risk being “exploited overseas” rather than scaled domestically, a particular concern for the fashions and textiles sector. The committee observes that:
“Without significant incentives or mandates to act as a ‘pull factor’ … companies are unlikely to move away from current practice”.
This speaks directly to the fashion industry’s reluctance to shift away from synthetic materials, with more than two-thirds of our clothing currently made from petroleum-derived fabrics, primarily polyester.
The stakes are significant. The UK fashion sector contributes £62 billion to our economy and supports 1.2 million jobs. Yet this vital industry’s environmental footprint is unsustainable, with clothing responsible for 10% of global greenhouse gas emissions, more than shipping and aviation combined. The need for sustainable alternatives is therefore urgent.
Engineering biology offers such alternatives. The committee highlights Colorifix, whose biological dyeing process cuts chemical pollution by 80% and saves vast quantities of water through fewer rinses. Recognised as a 2023 Earthshot Prize nominee, it aims to scale its process to 15% of the world’s clothes by 2030. Other innovators include Fibe, which is developing fibres from potato waste, Arda Biomaterials, which is turning spent grain into leather-like materials, and Oxford Biopigments which is creating plant-based dyes.
However, as the committee notes, these technologies face scaling challenges. To address these barriers, we could focus on three areas: first, bridging the “valley of death” between research and commercialisation with dedicated financial support for fashion applications; secondly, implementing a co-ordinated regulatory approach with sandboxes, as discussed by the noble Lord, Lord Willetts, and my noble friend Lady Freeman, for testing novel biomaterials, and streamlined approval processes; and, thirdly, securing our talent pipeline through expanded training programmes. As noted by the Centre for Sustainable Fashion, the need for technical skills will start taking on new forms as it welcomes exchanges with traditional skill sets. We must therefore create programmes that connect creative and scientific fields, as highlighted by the noble Baroness, Lady Willis, educating a new generation of designers who understand both aesthetics and biology.
I would be remiss not to acknowledge that individual innovations alone cannot transform the sector. The recommendations from the 2019 Fixing Fashion: Clothing Consumption and Sustainablity report remain relevant, such as tracing new raw materials to tackle supply chain abuses, reforming taxation to reward sustainable design, banning the incineration of usable stocks and shifting incentives towards reuse and repair.
Small UK businesses display remarkable sustainability innovation yet face significant competition from larger players. They need targeted financial support and capacity building to help level the playing field. The EU leads in regulating fashion sustainability, so if we fail to act, the UK risks losing both competitiveness and this vital industry. By implementing the committee’s recommendations, we can position the UK as a global leader in sustainable textiles, creating economic opportunity while addressing climate imperatives.
Lord Lucas (Con)
My Lords, I am grateful for the opportunity to speak in the gap and even more grateful for the leadership of the noble Baroness, Lady Brown of Cambridge, in what was a most fascinating report to be part of, and for our excellent staff.
If we want to move away from fossil feedstocks for products such as fuel, chemicals and packaging, we need a long-term plan from this Government. We need a road map so we can see what is going to happen when and industry can plan its development to coincide with that.
As part of that, as the noble Baroness, Lady Young of Old Scone, said, we need to know where our feedstocks are. We are looking at a world where concentrated carbon is going to be short, and in the ordinary course of events we need to take decisions which will make those feedstocks available. Things such as sewage, farm wastes and plastic, which at the moment we try to throw away in one way or another, we are going to need as our basic feedstocks. When we are building our infrastructure to handle those things, we need to recognise that, because it takes a good long while to build that infrastructure, and if we focus on “Let us burn it all, throw it away or spread it on the fields”, we are not going to have the infrastructure to make it available.
Another potential carbon waste stream is forestry. Most of our lowland British forests are in a sad state of decay, because the markets for their products have gone. If the Government want that to be available as a source of carbon, they need to start enabling industries to grow now. There is no easy solution to this. We cannot just say, “Oh, we will use some land”, as the noble Baroness, Lady Young, said, because we want that for other purposes—thank you very much. We need to be innovative in how we use the carbon that we have.
In recognising the shortage of carbon, we should recognise that we will probably need more carbon than we have. We will try to build industries in areas of carbon shortage, so the efforts of my noble friend Lord Willetts in setting standards will become extremely important, because that is the basis for enabling our businesses to flourish overseas.
Finally, I join those who said that we should sort out pensions. Some 40 years ago, I managed pension funds. We invested the majority of our funds in UK businesses, including—I am glad to say—that of my noble friend; now, it is down to 5%, as the noble Lord, Lord Drayson, said. We have done that as politicians in the pursuit of safety; without a thought for consequences or about how this works, we have merely generated a certainty of poverty. We need a Government—ideally this one, but, if not, a subsequent one—to take courage and make a radical change to where our money and pensions are used to support our country.
Baroness Northover (LD)
My Lords, I, too, thank the noble Baroness, Lady Brown, for steering our Select Committee so thoughtfully through this inquiry and for her introduction to this debate. I wonder whether the power outage in Spain and Portugal has extended to the Moses Room, but I can at least just about see what I have written in front me.
I, too, pay tribute to our excellent staff. Our brilliant policy analyst, Thomas Hornigold, who is present here today, seems to relish each new challenge that we give him. He not only becomes an expert on the subject; he is able to simplify it for those of us who are not experts and spot the key elements that we need to consider. Like the noble Viscount, Lord Stansgate, I, too, thank our impressive witnesses.
This is a case study of one area where the UK has been at the forefront in the past but where we seem to be missing the opportunity to scale up. This inquiry has led to our current, wider inquiry on what the UK must do if it is to scale up from innovation—particularly in our universities—to SMEs and, crucially, to large-scale businesses here in the UK. As the noble Lord, Lord Mair, said, we know that this has long been a concern, but it is always worth looking at how, in current circumstances, this can best be addressed. We have had some successes in the past: we fostered the pharmaceutical industry and we kept the automotive industry in earlier years. We have also faced different economic and global challenges, which means we must always analyse how best to steer through whatever our current challenges or opportunities might be.
The global position we now find ourselves in—suddenly needing to be far more resilient than we were before, as our major ally veers off course—means that this is even more important. It also presents a vital opportunity. Right now, US academia—which has, in the past, been so strong, so well-funded, so closely linked to venture capital and so well able to get ideas scaled up—is under bizarre threat from the new President. It is extraordinary to see Harvard needing to fight back against government overreach, and chilling to see the threats from the US Government that its research funding will be cut if it does not fall into line.
We must be at the forefront of attracting talent here. Can the noble Lord tell me if there is a cogent plan for this? I do not simply want to hear a list of what we already have. We know that this is totally inadequate for this, with our visa rules, health charges, salary requirements and so on. This is a time to welcome young scientists and technicians who see the US Government as a block in their path for at least the next few years—possibly a decade or more. The US in the past has benefited hugely from the inflow of such talent; we need to do the same.
Will we see the Home Office, even under such a sentient Minister as Yvette Cooper, pushing back now, simply to keep immigration numbers down? This would be the act of national self-harm to which the noble Baroness, Lady Brown, and the noble Lord, Lord Berkeley, referred. I hope that the Minister is engaging persuasively with the Home Office over the upcoming immigration White Paper.
We have here a leading-edge new technology with potentially wide application, one that the Government said that they prioritised, saying that it has huge growth potential for the UK. The noble Baronesses, Lady Willis and Lady Neuberger, the noble Lords, Lord Tarassenko, Lord Freyberg and Lord Lucas, and others all made this very clear. To semi-quote the noble Lord, Lord Borwick, maybe this one is an “obtainium”. The UK has historically had strengths in this area.
However, we also heard that the rest of the world is catching up and indeed overtaking us. As the noble Baroness, Lady Brown, noted, even the Minister identified to us that the window of opportunity is small and closing. It needs investment. We received a report today from Perspective Economics that underlines what we found. It identifies that the UK is
“at risk of losing out to better-resourced international markets”.
It finds that there is already a trend of innovative British firms moving their manufacturing operations to countries such as the Netherlands, Sweden and Portugal, where scale-up infrastructure and support are, it reports, more accessible.
The response the Government gave to our report has many instances of “wait and see”—in particular, wait for the industrial strategy. It is very welcome that the Government are about to publish an industrial strategy. It is astonishing to me that the previous Government so often prided themselves on not having such a strategy. We had one in the coalition, out of which the catapults came, for example, and investment in the Crick Institute and in areas where the UK had an advantage, even though the then Chancellor defined this as a period of austerity after the 2008 financial crash.
Some subsequent Conservative Business Secretaries, such as Greg Clark, did develop an industrial strategy—but most of his colleagues refused to do this. However, it is not so much about picking winners but trying to work out where the strengths and weaknesses of our economy are today, where we potentially have advantages, and how to move those areas forward, making plans and working out where we should best focus resources. It is also of course about addressing risks and benefits, as the noble Baronesses, Lady Bennett, Lady Neuberger, Lady Young and Lady Freeman, have mentioned.
When will this new industrial strategy be launched? We must hope that it is not all things to everyone. I heard one Minister last week apparently describing certain aspects of it—which I must say made my heart sink—like an election manifesto, with something for everybody. Yet in that same speech, there was absolutely no mention of visas for talented people to come here. Above all, where does the critical scale-up funding come from? Innovate UK can provide some early-stage, small-scale funding, as we saw, but this does not address the need for substantial long-term funding, which has been a feature of the United States, for example.
We noted that the decline in the UK’s capital markets does not help. We concluded that financial reforms, to which noble Lords have referred, including those announced in the Chancellor’s Mansion House speech, which aim to address the limited availability of scale-up funding in the UK, should be rapidly progressed, lest we see even more of an exodus of capital. The noble Lord, Lord Mair, pointed to the limits, though, even here. Clearly, there might be slightly less of that exodus, as Trump takes a scythe to the global economy. As the noble Lord, Lord Drayson, pointed out, this could also be a key opportunity.
I recall that we established the Green Investment Bank in the coalition days, only for it to be sold off later. What kind of strategic thinking was that? Then the wheel is reinvented. We concluded in our report that the National Wealth Fund and the British Business Bank ought to be helpful here, but that their mandates would need to be expanded, they would need specialist investors and they would need to move at speed and to take risks.
There are, of course, immediate political attacks when something seems not to be working. What should we collectively make of this? Just as reform in the health service is so often resisted, risks need to be taken here, and projects given time to develop—and some will not succeed.
We also felt that much more could be done through public procurement, a point clearly made by Angela McLean, which has been referred to this afternoon. We hope the Government will seriously address this.
Regulation was another area that came up in our study. I welcome the appointment of the noble Lord, Lord Willetts, in terms of speeding up regulation and what he has laid out today. However, I am, in turn, shocked by what my noble friend Lady Bowles said about IP. Perhaps the noble Lord, Lord Willetts, and the Minister, can take that away and act on it.
In conclusion, bioengineering has such potential. We need to move fast and effectively if the UK is to benefit from it, but there are clearly huge challenges. I therefore look forward to the Minister’s response to both our report and this debate.
Viscount Camrose (Con)
My Lords, I join other noble Lords in congratulating and thanking the noble Baroness, Lady Brown, and the other members of the committee, for a report that is not just fascinating and important but clearly urgent, and whose urgencies have been underlined by some fascinating speeches this afternoon. I fear that engineering biology is a subject that does not receive the public attention it deserves, so I am delighted that today we can go some small way towards rectifying that.
I hope that noble Lords will forgive me if I begin by pointing to some of the foundations laid by the previous Government. In 2023, the science and technology framework identified engineering biology as one of the five critical technologies vital to the United Kingdom’s prosperity and resilience. That commitment was deepened through the National Vision for Engineering Biology, published in December 2023, which pledged £2 billion over 10 years to develop the sector. The then Government moved to establish an Engineering Biology Steering Group, set up a £5 million sandbox fund to accelerate regulatory reform for innovative biology-derived products, and, following the pro-innovation review led by Professor Dame Angela McLean, created the Engineering Biology Regulators Network to make the UK’s regulatory landscape clearer, faster and more innovation friendly.
Importantly, the previous Government recognised that we had a once-in-a-generation opportunity, with a combination of emerging technology and science, comparative advantage and regulatory freedom. The ambition was clear: by 2030, the UK would have a system of regulation and standards that would be pro-innovation, easy to navigate and internationally competitive. Regulators would have a mandate to support innovation, with reduced testing costs to allow UK innovators to compete globally. We would move faster than international competitors in setting technical rules for critical technologies, strengthening the UK’s position as a global standard setter. That vision was and remains crucial if we are serious about leadership in sectors such as engineering biology.
In this excellent report, Don’t Fail to Scale, the message is equally clear. The UK retains outstanding research capability and a dynamic ecosystem of innovative companies. However, the committee rightly warns that, without consistent investment and strategic leadership, there is a real risk that these companies will scale up elsewhere and that the economic and strategic benefits will be lost to other economies. Many noble Lords spoke powerfully about this risk.
The committee makes a number of important and valuable recommendations. It calls for an industrial strategy that clearly places engineering biology at its heart, with a focused plan for scaling innovations domestically. It recommends the appointment of a national sector champion, a high-profile leader from industry or academia who can convene across government and drive delivery. It highlights the need for significantly increased investment in skills, including further doctoral training centres, as well as stronger use of public procurement to support emerging UK companies and technologies. Critically, it emphasises that the UK’s regulatory environment must continue to move quickly, with clear, innovation-friendly pathways that reduce time and cost to market for new products.
One test of the Government’s seriousness about engineering biology will be whether they reaffirm the full £2 billion funding commitment set out in the National Vision for Engineering Biology. The previous Government made that commitment because they recognised that this is not just a peripheral opportunity but central to the future of our food systems, health technologies, fuels and materials industries. It is an area where the UK continues to have a genuine comparative advantage—for now. As the report makes clear, it will retain that advantage only if engineering biology in the UK is backed by sustained investment and clear strategic intent.
On that basis, I close by asking the Minister to confirm three things, if possible: first, that the £2 billion commitment will be maintained in full; secondly, that the forthcoming industrial strategy will reflect engineering biology as a national priority; and thirdly, that they will ensure that regulatory reform—so crucial to first-mover advantage—remains a live and urgent priority. It was very good to hear from my noble friend Lord Willetts on that topic earlier. The opportunities in engineering biology are extraordinary. They are matched by the strength of the foundations already laid by our scientists, our entrepreneurs and the strategic choices made in recent years. What is now needed is the consistent and purposeful delivery of what we know is necessary.
The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)
My Lords, I start with three disadvantages: I cannot read in the dark; I am a doctor, so I cannot read my own handwriting; and I have had quoted back to me in various guises many of the things I have written over the past seven years, so I had better make sure that some of them happen.
I thank noble Lords for raising a number of important and extremely well-informed points today. Thanks must go to the noble Baroness, Lady Brown, for leading this inquiry and report and for starting us off with her insightful contribution and a few questions that I will answer as I go through. Several noble Lords have said in different ways that we cannot afford not to do this. That is a key and correct point. I thank all the members of the Science and Technology Committee for bringing Don’t Fail to Scale into the world. I reassure the noble Viscount, Lord Stansgate, and the noble Lord, Lord Mair, that reports are indeed useful. This is useful; it is exactly what we need at a time when we are thinking about allocation in a spending review.
The comparison made in the report—that, just as AI is rewriting the “software” of our world, engineering biology is rewriting the “hardware”—is a useful one but, of course, the ability to redesign the software code of life is one of the key advances that has unlocked the ability to engineer biology. As the noble Baronesses, Lady Neuberger, Lady Bennett and Lady Freeman, said, in order to do that, we must proceed appropriately and with public acceptance.
The 1,000 or so engineering biology companies that we have in the UK are showing how we can harness this power. They are perfecting the alternative proteins that will strengthen our food supply and help us reach net zero. They are converting factory waste into low-carbon fuel for cars, planes and even RAF unmanned aircraft, as C3 Biotech is doing in Manchester. They are designing lab-grown red blood cells that have been genetically manipulated to treat disorders steadily for 120 days at a time, rather than using a daily dose of pills. They are engineering cells to last for years by replacing missing proteins to correct genetic deficiencies in what, to all intents and purposes, look like cures—something that has not been possible with medicines in the past.
The UK remains a global leader in engineering biology. We rank fourth in the world for the impact of our research in the sector. Last year, UK biotech—it is perhaps a proxy for some parts of engineering biology—raised £3.7 billion, more than double the year before. The news that Professor Jason Chin—who, if anyone, will be the person to make the engineering equivalent of unobtainium—will head up a team of 300 world-class researchers at Oxford’s Generative Biology Institute is a vote of confidence in the UK’s prominence in this area.
However, if we are to hold on to this position, we must act—and urgently. We have heard many good points from across the Committee on why and how we should do this. I will respond to as many of them as I can—if I do not respond to any points, I will follow up afterwards—but let me first make a few points on how the Government are helping engineering biology companies to scale in the UK. We need to give the sector the strategic focus that it deserves and needs. I cannot say much about the outcomes of the industrial strategy or the spending review; however, in line with the timelines set by the Treasury, we will set out those plans, and noble Lords can expect to see the industrial strategy shortly.
What I can say is that this is the first time that a sector—the digital and technologies sector—will have its own dedicated, 10-year plan. This plan offers significant opportunities for growth across UK science and technology and will include engineering biology specifically; I assure the noble Baroness, Lady Brown, that there is a specific section and clear focus on engineering biology. The Secretary of State highlighted the critical role of engineering biology as a key technology for future growth in his speech at techUK on 10 March; this is important because techUK is often thought of an organisation for digital tech only, but it is not.
Supporting the engineering biology sector means having the right funding, regulatory framework, infrastructure, government procurement and skills. I will set out what we are doing on some of those. Before I do so, I should add that we have an engineering biology advisory board, with experts from academia and industry, which, just last month, actively discussed the role of a national champion, including what that might look like and how it could lead to coherence across the sector; indeed, it invited people from other sectors that have had national champions to discuss what that might turn into.
I assure the noble Lord, Lord Borwick, and the noble Baroness, Lady Willis, that there is join-up across government here. Part of the role of DSIT is a horizontal one across government. It is not a purely vertical department; as a horizontal department, it has to make sure that these things are joined up. One of those areas of join-up occurs around biomass strategy, on which there is an active piece of work going on at the moment; that is particularly for engineering biology and is linked to the Circular Economy Taskforce. I hope that the noble Lord, Lord Lucas, and the noble Baroness, Lady Young, are reassured that that is being looked at.
Last year, UKRI announced £100 million of funding for six engineering biology hubs across the country and 22 awards for two-year R&D projects. These hubs are working on priority applications from developing vaccines to preventing plastic pollution. ARIA has also announced more than £60 million of funding to develop the next generation of synthetic crops, which aim to remove CO2, improve food security and deliver medicines. New research programmes from ARIA are looking at engineering biology from pandemic preparedness right the way through to ocean biomanufacturing.
Short-termism, which has been raised by many speakers, has long held back R&D in sectors such as these where projects are likely to take many years to go live, let alone see outcomes. That is why the Government have committed to 10-year funding for key R&D activities where this certainty will make the most difference. Further details on this will come with the spending review. I am unable to give exact amounts—anyone in this Room will know that you cannot give exact amounts before a spending review—but I hope noble Lords hear my commitment to this area. I am sure that the noble Viscount, Lord Camrose, will understand that you do not pre-empt spending reviews by announcing the outcomes.
The report we are debating speaks clearly about the late-stage funding gap. The interesting thing about the valley of death is that it moves; this one has moved from the very beginning to somewhat later in the process. As several noble Lords, including the noble Lords, Lord Mair and Lord Drayson, have said, the funding for this needs to be sustainable, allow scaling and have a UK base. We cannot afford for these companies to move overseas.
We absolutely get the need for a joined-up pipeline across all the areas we have talked about to help companies scale. I will list some of the actions taken, but I recognise that much more needs to be done.
The National Wealth Fund has deep pockets of £27.8 billion. Its new strategic direction, steered by the Chancellor, allows it to invest in technologies such as engineering biology. That is important, because that was not initially the focus. In private financing, the Mansion House compact, which has been discussed, could see us unlock £80 billion from pension funds, but, as of 2024, Mansion House signatories held only around 0.36% of their assets in unlisted equities against a target of 5% agreed in 2023. This needs to be driven faster, which is why the Pensions Minister is reviewing pensions investment, the outcomes of which will be shared shortly. Many noble Lords have observed, and I agree, that there is an opportunity here that is about not just science and technology companies but better pension returns. We will continue to encourage the rapid implementation of the Mansion House compact, and I assure noble Lords that DSIT is very involved in those discussion.
Government is doing better at being a customer via the new Procurement Act,as well as a champion procuring from UK engineering biology companies. For example, the Ministry of Defence supported C3 Biotech to establish its pilot facility in Stockport to produce aviation fuels from industrial waste. The new defence innovation unit will have a percentage of its spend on procurement of UK technologies.
I want to deal with the important question of IP. I am very well aware of its importance, but I want to correct an impression that might have been given. It is not the case that grants from UKRI have their IP taken. It is the case that for a very small subset, which is departmental contracts, it has been necessary to put in a clause on IP that is to do with the Subsidy Control Act. I am actively looking at this to see what can be done, but it is a very small percentage. The vast majority of UKRI grants—all grants, actually—and Innovate grants do not have that IP claim.
We are making sure that the UK has the right skills in the sector by looking at both building homegrown skills and the right approach to attracting talent from overseas. We rightly had questions on training from the noble Baroness, Lady Willis, among others. Last year, the UK announced £10 million for a new centre for doctoral training for engineering biology; and, in January this year, UKRI opened a call for new doctoral focal award centres, worth £17 million. Indeed, it has put £16 million towards another important area that was raised—that of research technical professionals. These are the people who actually run the equipment and who have been ignored in the science system for a long period, much to the detriment of being able to run large bits of kit. There is more to be done, but having PhDs funded shows a very clear direction of travel. As the noble Lord, Lord Tarassenko, made clear, the overlap in other areas, including AI, is rather important.
We have four of the top 10 universities in the world. Being open to international talent is clearly a part of what makes our academic base, as well as our industrial base, so strong. Our funding offer is competitive, with prestigious fellowships and professorships from UKRI and the national academies, and we will do more. I assure noble Lords that they will shortly hear more about what we are doing specifically to try to make sure that we have an attractive inward route for people from around the world. This includes what the noble Baroness, Lady Northover, asked me about in her comments.
Our continued partnership with Horizon Europe provides a route for European researchers to work with us. It is very important that we are back in that system. Fast-track visas for global talent, high-potential individuals and skilled workers give scientists opportunities to pursue paths to engineering biology opportunities in the UK. The Chancellor has been clear that she wants easier routes for scientists and technicians to come to the UK, and I continue to advocate for that. In the words of my noble friend Lord Berkeley, we need more scientists. There is no doubt about that. We have never been and will never be self-sufficient in this area—and nor should we be, because this change of people from other countries is an important part of the scientific process.
Engineering biology needs a regulatory environment that can foster innovation and boost public confidence; without that, we cannot fully realise the benefits of what we have discussed. This issue was raised by a number of speakers. It is an urgent point to get right, which is why we established the Regulatory Innovation Office; I am very pleased that the noble Lord, Lord Willetts, is now leading it. We have a clear plan to push ahead fast with some changes. Noble Lords will have already seen some of the changes outlined by the noble Lord, including the sandbox for the Food Standards Agency, the work to have precision fermentation foods looked at by that agency, and new legislation on genetic technology for plants: the precision breeding Act, which is being discussed at the moment.
I turn to the point made by the noble Baroness, Lady Neuberger. We can unlock the benefits of engineering biology only if the public want to use it and accept it. This will come only by building trust. The Government have been gauging public opinion, with two reports from UKRI and Sciencewise on applications in health and food, and a DSIT survey on public understanding last year. A group funded by UKRI, the Cellular Agriculture Manufacturing Hub, is looking at that space specifically. I commend to noble Lords the report from the Government Office for Science published in only the past couple of weeks, which—the noble Lord, Lord Freyberg, will be extremely pleased to hear—speaks directly to engineering biology in fashion, among other areas. Using the insights that we are getting, we will consider how best to continue to structure public engagement for regulated technologies so that we build awareness and the potential is understood.
Engineering biology needs specialist infrastructure, such as biofoundries and large-scale fermentation facilities. We must maintain what we have and build new scale-up infrastructure for SMEs. We have funded the Cell and Gene Therapy Catapult to deliver a state-of-the-art manufacturing innovation centre for advanced therapies at Braintree, and the Centre for Process Innovation receives government funding to develop and retain engineering capabilities, including sustainable food production, in its novel foods facility. However—this is important—affordability is an issue. The CPI is now undertaking a study of 50:50 match funding in Greater Manchester in order to make it more accessible for engineering biology SMEs to access its facility. We know that affordable cost of access is a key requirement, which is why we are trialling this cost-sharing scheme. Incidentally, it is true that there are five biofoundries in the network that was referred to, but there are more than 11 in total across the UK. The variable access to them is an issue.
There is no one-size-fits-all approach. The wrong infrastructure solutions would come at a great cost to the taxpayer and would not be beneficial. There is no point in having facilities that lie idle or that are not at the cutting edge. We will continue to push to get them in the right place and get them accessible at the right cost.
Several of the speakers, particularly the noble Baronesses, Lady Freeman, Lady Young and Lady Bennett, asked about safety and responsible use. The Responsible Innovation Advisory Panel has been set up precisely to look at these issues. It has looked at gene synthesis and has issued guidance, and it will consider what else needs to be done there. It has looked at gain-of-function research, mirror life and gene drive, and will continue to do so. These issues are important, as are those of lab safety and security, which are being looked at by the Cabinet Office.
When it comes to the fundamental science and talent in engineering biology in this country, we are doing well. Our task now, as the report so clearly says, is to create a landscape of the right skills, infrastructure and interventions in finance, regulation and procurement, among other areas, and to partner across Whitehall to bring this science to life in applications that will affect pretty much every department.
The Government are taking the actions that will be required. We do not need more reviews now; we need action on what we have. This report has been an incredibly important part of that, so I again thank all the speakers today for their very insightful contributions.
Baroness Bowles of Berkhamsted (LD)
Before the Minister sits down, if an innovative company is looking to get some assistance in developing a product to market, it will go to the departments. The departments work with these small businesses on these pre-procurement issues. Innovate UK has these clauses in its contracts—I can show them to the Minister online, if we have to go to that extreme.
There is probably a difference from what universities have nowadays, which might offer pure research grants. However, as soon as a company gets anywhere near to seeking procurement—the thing that will open the door to being able to sell into the private sector and to build its reputation for export—the IP is undermined, including the background IP. I am sure that I can provide people who will sit with the Minister’s staff and show them the links.
Lord Vallance of Balham (Lab)
I want to be absolutely clear: that is not the case for grants, whether they are for companies or academics; this applies only for a subset of contract research. I am looking at that to see what can be done, but it is a very small minority. I would not like noble Lords to go away thinking that it applies to companies overall—it does not if it is a grant.
Viscount Stansgate (Lab)
My Lords, before the Minister sits down, could he say one word about the regional distribution of work in this area? I have had an interesting approach from the Tees Valley Combined Authority and the York and North Yorkshire Combined Authority, saying that they have ambitions to be a regional hub in the north-east. Does my noble friend agree that it is important to spread out this work around the country and not concentrate it in one particular part?
Lord Vallance of Balham (Lab)
I thank the noble Lord for that question. In fact, the biofoundries, the manufacturing side of this and the hubs are quite well spread out across the nations and, indeed, across the UK. I agree that it is important that we look at that as part of what we do, as we develop this as an important sector in the UK.
Baroness Brown of Cambridge (CB)
Let me start by thanking all noble Lords who have taken part in this debate. We have heard some fascinating speeches; I apologise that I will not mention them all by name, but the noble Baroness, Lady Northover, gave us an absolute masterclass in managing to integrate previous comments into a very interesting speech. I say well done to all noble Lords and hope they will feel that they have therefore been mentioned.
Like others, I am sure, I very much look forward to the Science and Technology Committee’s current inquiry reporting on the situation for scale-ups in the UK and what needs to be done. That will be fascinating, and I wish the committee the very best of luck with it.
I will mention the noble Lord, Lord Willetts, because it was great to hear that the Engineering Biology Regulators Network is not now one of the best-kept state secrets. I congratulate him. The second regulatory sandbox for engineering biology sounds like a very exciting process, and the start of building regulatory capacity in the area, with the funding to the Food Standards Agency, are all very much appreciated. It was very good to hear about them.
I turn briefly to the Minister’s response. There were about four things that I thought were hugely important. The first thing he said was that “we cannot afford not to do this”. He then said, “We must act—and urgently”. We will want to hold him to those remarks, but it is great that he shares our thinking. It was also very encouraging to hear that the CPI is looking to address the affordability of access issue with a 50:50 match-funding programme. It was good to hear that the digital and technology sector 10-year plan includes engineering biology, but including engineering biology in digital and technology simply strengthens my feeling that it needs a national champion, because it will not be the obvious place for some people to put it. It was good to hear that we are approaching a national champion—with small steps—but we are not quite there yet, so I hope that we will hear more about that.
It was also really encouraging to hear the Minister say that the Government and he get the need for a joined-up pipeline to help companies scale, reminding us that the National Wealth Fund can now invest in engineering biology. However, the key question is: does it have the capability to know where to invest in engineering biology? Will it have the confidence to make those decisions?
It was also very exciting to be told that we will hear more about attracting the very best scientists, engineers and technologists from overseas, and that the Chancellor is very committed to easier routes for scientists and technicians to come here. We look forward to hearing more about some of those exciting areas soon.
This is an area where we really need a national strategy. A strategy starts with prioritisation, and lots of noble Lords talked about the importance of that, but it should also cover things such as public engagement, skills, regulation, standards, screening of sequences and concerns and all the other key areas that noble Lords talked about today.
We leave with absolute recognition that the Minister is committed to this, and looking forward to hearing very soon about the industrial strategy and understanding how it will support these critical foundational technologies. Like the noble Lord, Lord Borwick, I hope that the timing of this debate is an indicator of how seriously the Government are taking this.