Advanced Research and Invention Agency Bill

Baroness Neville-Rolfe Excerpts

2nd reading
Tuesday 2nd November 2021 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is a great honour to follow the noble Lord, Lord Rees of Ludlow, one of our most distinguished scientists. I agree with him about the modern excess of performance indicators and the valuable contribution the private sector can make. I am very grateful to my noble friend the Minister for his clear exposition of the purpose of the Bill, and I declare my interest as a director of Health Data Research UK—which is largely funded by the Medical Research Council—and of Capita plc.

I am not a scientist. Indeed, perhaps because I went to an all-girls school in less progressive times, I have never had a physics or chemistry lesson in my life. I have, however, always been a huge proponent of scientific innovation and invention and everything that encourages them, from academic excellence to fostering a culture of enterprise. As a former Minister for Intellectual Property, I also regard a sound framework for the protection of IP as a vital necessity.

The context of these proposals is important. I congratulate the Chancellor on an assured Budget performance in very difficult circumstances. There was a cheering ending for those like me—watching from the Gallery—who believe that high taxes hurt the economy, and enterprise and innovation. I would single out his welcome extension of R&D tax credits to cloud computing and data costs, the shift to focusing tax relief on domestic rather than overseas research, and the increase in the UK R&D budget to £22 billion by 2026-27, which is 2.4% of GDP and a cash increase of 50% by the end of the Parliament.

I did, however, find one moment chilling: the growth forecast of 6% in 2022, 2.1% in 2023 and a miserable 1.3% in 2024. This is, of course, not the Chancellor’s fault. It is an OBR forecast, and we need to do all we can to prove it wrong. I want to see growth overshooting substantially. That brings us to innovation and its companion, productivity. We need major change to bring about a new dynamism in our economy so that growth takes off and is sustained. We can build on the success of the Covid vaccine and the legacy of our multiple Nobel Prize winners.

The proposal for ARIA is the most radical I have seen in my time in this House. It sets aside all the most cherished Whitehall controls which envelop all other agencies. It would create a significant, truly blue-sky research base not subject to normal constraints other than, of course, the financial limit. My view—which I think is widely shared if the discussion in another place is to be believed—is that it is both welcome and timely, given the country’s needs.

Given the greater freedom that the new agency will have, the choice of the right people to lead it will be vital, as my noble friend Lord Borwick said. That poses two questions: who will these be, and who will decide on them? I will be interested to hear from the Minister how that vital but difficult task will be managed.

On one illustrative point, we should certainly not specify how the new body should go about its work, as some parliamentarians have already tried to do. That would be absurd. Neither this House nor the other one, nor indeed Her Majesty’s Government, is likely to be the best authority on the development of science over the coming years.

Perhaps not for the first time, I am in a different place from my noble friend Lord Bethell. Societal challenges and fashions move on, as we saw with the pandemic itself. I believe we need independent thinking and that the agency should decide its own programme.

Normally in our debates I press at this point for the provision of a cost-benefit analysis of the proposal. Today I will not do so—I cannot see how such an analysis could be done before the new body is established—but we will need checks and reporting by the agency. I suggest that we need annual reports, while recognising that judgments of success will not be possible for several years and that patience and tolerance of failure are needed, as the Minister has said. However, eventually it will be possible to assess both successes and missteps, and we should not hesitate to do that. As one example, we should have a requirement in the Bill for the agency to make a full assessment of its work ahead of the 10-year dissolution power in Clause 8 so that we can determine objectively whether the experiment should be continued.

In all this, I am influenced by what I have learned of success elsewhere—for example, about the Manhattan Project. I was lucky enough to visit New Mexico before Covid and to learn from its museums, and those who have spent careers in the nuclear industry, of the importance of the people you put in charge of such a project, and of giving them responsibility and space. Those are the two concerns that I have already alluded to. In New Mexico the team was literally hundreds of miles away from any stakeholders.

As some of you will know from my Zoom backdrop, I am an enthusiastic student of the 18th-century Staffordshire potters. Stoke was the Silicon Valley of its day and mushroomed in a way not unlike the pop music business 200 years later. The entrepreneurs pioneered brilliant new chemical techniques and competed in a vibrant and growing consumer market right around the globe. Focus, competition and the stealing of each other’s ideas and master craftsmen were everyday occurrences.

Look at the rise of Japanese, Korean and Taiwanese manufacturing in the 20th century. They copied a lot but that was a skill that drove growth, and there developed in Japan a vital intellectual attitude—“lean thinking”, pioneered by Toyota—which has been an inspiration to successful businesses right round the world. Unfortunately, it has yet to be fully established in the public service or the NHS—but I threaten to digress.

This is a worthwhile initiative. I support the Bill’s Second Reading and look forward to its progress through the House.

Advanced Research and Invention Agency Bill

Baroness Neville-Rolfe Excerpts

Report stage
Tuesday 14th December 2021 Lords Chamber

[Lord Morse (CB)]

I too will speak to support the amendment advanced by the noble Lord, Lord Browne, who has explained it very clearly. It is worth getting back to basics on it—if I may use that expression—for a second. The ARIA scheme is about driving our national research frontiers forward by publicly funded risk taking, if I can summarise it as simply as that. It is a good idea that is widely supported.

But this is the reverse of what will happen if foreign-owned companies are allowed to acquire companies that own intellectual property derived from ARIA or to take that intellectual property offshore. If this happens, the reverse of the objective of the scheme will be achieved. This possibility is not far-fetched. I spent 10 years as Comptroller and Auditor-General at the National Audit Office, and, during that time, I saw cases relating to a series of companies where exchange of control provisions in the hands of government were not exercised properly or the scheme was administered rather feebly. As a result, these things became faits accomplis and the property went offshore. Sometimes, you would be told, “Well, we believe in the market operations, so we really don’t like to interfere with this sort of thing”.

Actually, we need strong, clear decision-making about this now. We need to make it clear in this amendment that we are not prepared to see intellectual property that has been paid for by British taxpayers go offshore. It makes mugs of British taxpayers.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to cast some doubt on Amendment 1. It is very well intentioned, but I fear that it may be mistaken. The background to my concern is my regret that ARIA is modest: some £200 million a year is being provided, which is a pinprick compared with the vast sums spent on other things, such as Covid and bailing out the banks.

The Bill is meant to set up an agency that can take risks free from bureaucracy and the day-to-day constraint of politics—a latter-day Manhattan Project, if you like. Bureaucratic and other constraints are being applied to the R&D budgets of many billions in the hands of UKRI. That is fine, but I do not think that they have a place in ARIA, which should be run leanly and efficiently and not encumbered by expensive experts—on IP, for example—and large legal departments. It should be able to think and act outside the box.

So I object to the provision in paragraph (bb)(ii) in Amendment 1, and I am slightly surprised that the noble Lord, Lord Clement-Jones, has signed the amendment, because we generally agree on these IP issues. However, I agree with my noble friend Lord Lansley that we need to know whether ARIA can keep the income that it receives from IP and rights. To answer his question, I see IP and rights as being in the same box—but no doubt the Minister will clarify that when he speaks.

--- Later in debate ---

Personally, I would have liked that to have been ARIA’s explicit purpose; nonetheless, I am heartened by indications that the Government might be prepared to move on this issue. I am very pleased to support this amendment because I think it would represent important advances to some degree on this issue. I very much commend the noble Lord, Lord Ravensdale, for—hopefully—his persuasive powers in getting the Government to the right place. I will listen carefully to what the Minister has to say, but I still suspect that future generations will look back with a degree of surprise that at this time, and in the knowledge of the climate and ecological threat we face, our advanced research agency was not more clearly harnessed to this, the gravest and most important task at hand.

[Baroness Neville-Rolfe (Con)]

My Lords, it is a great delight to hear from the noble Lord, Lord Ravensdale, who brings his business acumen and passion for both innovation and climate change to the feast. We have discussed these together often in Peers for the Planet.

We have the climate change Acts, and a huge amount of attention is paid to climate change in every part of government life and in their multi-billion-pound R&D budget. ARIA is a small, independent body and should be left to decide what is most important to our future and to the inventive opportunities that it is set up to create. That might include climate change, health, poverty or the quality of life. Technology, for example, improves our lives, but it also brings risks. ARIA should be left to decide what is most important. It should be able to think completely outside the box and make its own choices, and not be bound by precedent. I am afraid that I am therefore sceptical about these amendments.

[Lord Clement-Jones (LD)]

My Lords, the noble Lord, Lord Ravensdale, the noble Baroness, Lady Bennett, and my noble friend have made a compelling case for supporting this amendment, based on the climate and ecological emergency that we face. Tackling those challenges will require massive innovation and ingenuity and the development of practical applications from that. If ARIA has the bold, independent, innovative culture that the Minister emphasised throughout Committee, then it must be the ideal vehicle for this research, and we should spell it out. We should make ARIA an essential component of the net-zero strategy.