UK Internal Market: White Paper

Lord Bilimoria Excerpts

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

My noble friend makes an excellent point, as he so often does. These proposals are designed to ensure that devolution can continue to work for everyone while ensuring that seamless trade in the United Kingdom can continue. From 2021, the devolved Administrations will have power over many more issues than they have ever had before as policy areas formerly managed by the EU flow back to them for the first time. Our proposals would do nothing to stop those Administrations introducing rules and regulations for their own businesses operating within their region, as long as those proposals were not applied discriminatorily.

[Lord Bilimoria (CB) [V]]

My Lords, businesses up and down the UK have worked with devolution for over 20 years. Will the Minister confirm that the proposed UK internal market Bill must continue to respect the devolution settlement while providing certainty to firms as powers are returned from the EU to the UK? Will the internal market work to ensure that costs or barriers to doing business between different parts of the UK are not increased, and, learning from the lessons of Covid, when collaboration has worked so well, will there be even greater collaboration between Westminster and the devolved Administrations? To build on what the noble Baroness, Lady Kramer, said, will we ensure a proportionate and independent approach to adjudication that is respected by all Administrations? Preserving the integrity of the internal single market is the economic glue binding our four nations together.

[Lord Callanan]

I agree with the noble Lord that the internal single market is indeed the economic glue that binds the four nations together. I can confirm that we will continue to respect the devolution settlement and indeed, as I said in response to earlier questions, the devolved Administrations are gaining many new powers as we leave the European Union. There is no power grab involved here—in fact, the opposite is the case—and we will continue to want to work as quickly as possible with the devolved nations and legislatures as much as we can.

Environmental Projects

Lord Bilimoria Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord Callanan]

That is an important issue. We keep things such as the building regulations under constant review, but we need to proceed at a pace that the building industry can cope with and that consumers will accept.

[Lord Bilimoria (CB) [V]]

My Lords, we welcome the Prime Minister’s emphasis on promoting a green recovery in his “Build, build, build” speech. Will the Minister inform us whether the formation of the Green Investment Bank, launched in 2012 with £3 billion, was key to backing the offshore wind industry? It was sold to Macquarie in 2017. Will the Government form a new green investment bank? What about collaborating with countries such as India, which has set a target of 100 gigawatts of solar power by 2022 to lead the world in solar power? Should we partner with countries such as India?

[Lord Callanan]

The role of green finance is particularly important; it is one we are working closely on. The former Governor of the Bank of England is leading our efforts on that. Of course, we must partner with many other countries around the world. This is a global challenge and has to be addressed on a global level. India will play a crucial role, as will many other countries.

Corporate Insolvency and Governance Bill

Lord Bilimoria Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the US has had chapter 11 for years. As Secretary of State Alok Sharma said, the Government now believe that

“the package of measures that the Bill introduces will give businesses the best opportunity to survive the effects of the covid-19 crisis and lay the foundations for a bounce-back in the UK economy.”—[Official Report, Commons, 3/6/20; col. 897.]

Paul Scully, the Small Business Minister, said:

“If a restructuring plan is not agreed, it is worth remembering that the company might enter an insolvency proceeding, which would almost certainly produce a worse outcome overall for all involved. The company might stop trading altogether, which would put all employees at risk of losing their jobs.”—[Official Report, Commons, 3/6/20; col. 952.]


As the noble Lord the Minister said, businesses and practitioners of insolvency law have largely welcomed the Bill. For example, Kate Nicholls, CEO of UKHospitality, said:

“This is a very important piece of legislation from the Government … The Bill should provide businesses with some very welcome respite from aggressive landlords and valuable breathing space to restructure their businesses.”


Jennifer Marshall, a partner at Allen & Overy, said that the Bill represents

“the most significant insolvency reforms in the UK for a generation”.

The Institute of Chartered Accounts, where I am proud to be a fellow, said:

“This is a pragmatic move and a useful addition to the government’s strategy to protect employment and … will definitely help some businesses survive, but we would encourage any directors with concerns about their company to seek professional advice at the earliest opportunity.”


The provisions of the Bill on company moratoriums, termination clauses, restructuring plans, the suspension of wrongful trading regulations, dealing with statutory demands and winding-up petitions, and flexibility around AGMs and filing requirements are all very welcome. As vice-president of the CBI, I can say that it supports the measures in the Bill, with our members widely welcoming the breathing space it will provide. The retrospective application of some of the measures is particularly important as firms continue to struggle with cash flow. Matthew Fell, one of our directors, said:

“The CBI welcomes these interventions at a critical time for business. The temporary suspension of wrongful trading provisions, along with other measures, will give much needed headroom for company directors to enable otherwise viable businesses to use the government’s support package and weather this crisis.”


With the Government’s support packages tapering off in the coming months, the timely passage of this Bill will be crucial to provide headroom for management teams across the UK. For firms to understand the extent of their liability, and the options for and likelihood of avoiding insolvency and securing a rescue package, the Bill will be pivotal. At a time when firms are grappling with huge demand shocks, constrained cash flow, and an uncertain picture on domestic and international consumer demand, government support is widely welcomed.

Following the comprehensive financial support package provided by the Treasury, for which business is very grateful, this Bill will help to underpin the Government’s requirements for the next stage of our economic recovery in the coming months. We encourage the Government to ensure that businesses, and especially SMEs, which have the least capacity—I hope that the Minister agrees—have as much support as possible to retain jobs and livelihoods in the coming months.

The Minister said that the Bill is about maximising the chances of survival. It certainly helps to do that, but does he agree that, before companies have to resort to its measures, we should support them as much as possible? For example, look at the government loan guarantee scheme. We have 100% bounce-back loan schemes. The original CBIL scheme, from 23 March—two and a half months ago—has seen a 50% approval rate, to 47,000 businesses, with almost £10 billion lent. But under the bounce-back schemes, with a 100% guarantee from the Government, in just over a month £24 billion has been lent, to almost 800,000 businesses. Should not the Government consider matching what Switzerland and Germany are doing, and increase the limit for the 100% loans up to £500,000? That would help businesses, especially as measures are tapered off.

Finally, if we can reduce social distancing from two metres to one metre, that will mean four times as many people in pubs and restaurants: at two metres, there is 30% capacity; at one metre, there is 70% capacity. This could be the difference between opening or not, and between survival or not. Cinemas, theatres—everyone would be helped. France, Denmark, China, Singapore, Lithuania and Hong Kong are doing it—why are we not doing it, in line with what the WHO says? We need to get the economy back up and working as soon as possible, and safely.

Covid-19: Businesses and the Private Sector

Lord Bilimoria Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Bilimoria (CB)]

In this crisis, what has worked is not the Government working on their own but collaboration between them and the private sector. The first Nightingale Hospital, which the noble Lord, Lord Dobbs, spoke about—4,000 beds put up in nine days—happened because the Army, the Gurkhas, the NHS, the University of East London and the private sector all worked to put it together. On vaccines, we have seen Oxford, other universities and industry working with the Government and all coming together. Testing was not working when it was just in the hands of PHE; now it is because there is a collaborative effort between laboratories, research institutes, the Cambridge Biomedical Campus and, for example, AstraZeneca and GSK, all working together.

The CBI, where I am a vice-president, has a business heroes campaign, which urges organisations to join a nationwide effort and share examples of best practice. The CBI is helping to co-ordinate the efforts of companies and stepping forward to provide assistance where possible, from providing computers for pupils to PPE for healthcare and care workers. At the University of Birmingham, where I am chancellor, academics from across the business school are working with business intermediaries, such as the CBI, to reskill people for future working needs on working health and well-being.

As business, we are very grateful for all the help the Chancellor and the Government have given us, but the hospitality sector, which my business is in, is suffering greatly. It has basically been shut for two months and will take a long time to recover, especially if social distancing measures are meant to be in place. Through the Government’s CBILS loans, launched two months ago, 40,000 businesses have been given just over £7 billion. I have been urging the Government to give 100% guaranteed loans for business, and they listened and have done that. In just over two weeks, the bounce-back loan scheme is up to £50,000, and 464,393 companies have received £14 billion. This has worked.

With all the challenges ahead in this recession—as spoken about by the noble Lord, Lord Dobbs—I request that the Government raise the limit for the 100% government-guaranteed loan scheme to £500,000, because business will need this support. We, as a nation, are historically renowned for our creativity, business skills and entrepreneurship. That is what will get us through this crisis.

Covid-19: Business

Lord Bilimoria Excerpts

Wednesday 13th May 2020 Lords Chamber

[The Deputy Speaker]

Lord Hendy. Lord Hendy? We do not have Lord Hendy, so I call Lord Bilimoria.

[Lord Bilimoria (CB)]

My Lords, we are grateful to the Government and the Chancellor for all the help for business, including the extension of the job retention scheme until October. However, the Statement on workplace guidance makes no mention of testing at all, and today it is almost two months since the director-general of the WHO said, “Test, test, test”, and the Prime Minister has said that there is now a target of reaching 200,000 tests a day by the end of this month. Will the Minister tell us whether companies and businesses have access to testing for their workforces so that employees can be tested when they go to work? They can then have the confidence if they have a negative test that they can work knowing that they are healthy, and their colleagues and consumers can also have that confidence. Is testing available widely to employers and businesses now?

[Lord Callanan]

The noble Lord makes a very valid point. Our priority remains that testing patients to inform their clinical diagnosis is extremely important. We are also offering tests to all essential workers, including NHS and social care workers with symptoms, anyone over 65 with symptoms, anyone with symptoms whose work cannot be done from home and anyone who has symptoms of coronavirus and lives with any of those identified above. Yes, testing is extremely important. The Prime Minister has addressed that we have a strategy that we are working towards.

Covid-19: British Business Bank

Lord Bilimoria Excerpts

Thursday 30th April 2020 Lords Chamber

[Lord Callanan]

I thank the noble Lord for his question; he makes a good point. We have received lots of helpful feedback from stakeholders on how the schemes have been working. He will be aware that, on Monday, the Chancellor announced further steps to ensure that lenders have the confidence they need to process these applications. We have removed the forward-looking viability test and the per-lender portfolio cap, to give lenders the full 80% guarantee across all CBILS lending. We keep the scheme under constant monitoring and are available for any future changes.

[Lord Bilimoria (CB)]

My Lords, although business is very grateful for the help that the Government are giving, including the new bounce-back loans, which are 100% guaranteed up to £50,000, the Minister said that just £4 billion has been given to 25,000 companies in the six weeks since the scheme launched. Will the Government consider guaranteeing up to £500,000 for 100% of the banks, as the Swiss and the Germans have? This will ensure that the money gets through to the companies that need the money now to survive this crisis and then the revival and restart. Will he also confirm that the portfolio guarantee limit of 60% per bank has been removed, and that it is 80% or 100% back to back?

[Lord Callanan]

The new bounce-back loan scheme that the noble Lord referred to will ensure that the smallest businesses can access loans from £2,000 to up to £50,000 in a matter of just days, capped at 25% of the firm’s turnover. On his second point, we have also removed the portfolio cap for loans under the CBIL scheme, meaning that lenders can access the full 80% guarantee for each loan.

Brexit: Consumer Protection (European Union Committee Report)

Lord Bilimoria Excerpts

Wednesday 16th January 2019 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the noble Baroness, Lady Kennedy, said that this is about standards and redress, about compensation and an enforcement system that is dependable, about consumer protection, and about four and a half decades of partnership and co-operation. I thank the noble Baroness and her committee for this report, Brexit: Will Consumers be Protected?. It starts right up front by highlighting the Government’s platitudes:

“This report highlights our concerns about the Government’s approach to the negotiation of the UK’s post-Brexit participation in the important areas of EU cooperation that help protect consumers’ rights. Beyond advocating a deep and special relationship with the EU post-Brexit, the Minister was unable to provide us with any detail as to how the Government might secure, post-Brexit, the UK’s access to a range of cross-border mechanisms and infrastructure that facilitate and encourage cooperation between the various national bodies responsible for protecting consumers”.


The withdrawal Bill is 600 pages long and covers three areas: the backstop; the £30 billion; and citizens’ rights. Then there are 26 pages of a wish list: the political declaration. The report says very clearly that over the last 40 years the,

“EU’s consumer protection acquis … has grown to encompass around 90 European Directives that apply across the Single Market. The rights enshrined in these Directives enable consumers to seek redress for any poor service they receive … at home or in another EU Member State”.

The withdrawal Bill tries to mirror everything but it cannot. EU law is not static. If we leave the European Union, it will change and then we will diverge. The Government need to reassure us very clearly about this. Chris Woolard, executive director of strategy and competition at the FCA, said that the landscape between the EU and its member states in this context is “complex and interconnected”.

References to consumer protection are scattered throughout the EU treaties. As a result of the interaction, the consumer protection acquis and other UK law is interwoven in this complex, interconnected fashion. Citizens’ legal protections are strengthened by a harmonised system of consumer protection. While the many items of EU law provide the basis for consumer protection in the UK, our national law quite often offers an even higher degree of protection. So we talk about EU bureaucracy, but we use the EU bureaucracy and we do more: we use the law for our benefit. The Government produced all these papers about consumer rights and protection after Brexit and said that if there is a no-deal situation:

“If you have a dispute with a business based in the EU after … 29 March 2019, it is less likely that you will be able to use the UK courts to try to put things right”.


So as a consumer you will be worse off. The European Parliament, in its advice, Consequences of Brexit in the Area of Consumer Protection, talks about the EEA model, saying:

“From the perspective of consumers in the EU28, an EEA membership of the UK is the most favourable Brexit scenario. It would ensure the application of the high European consumer protection standards for consumers in the EU27 and in the UK to a very large extent”.


But, as I have always said, the EEA is the least worst option. When it comes to the WTO, the EU says that it will be a disaster.

Which? magazine managing director Alex Neill said that a no-deal Brexit could mean,

“a bonfire of consumer rights and protections”,

be that for booking package tours or free roaming. When you come to return goods purchased from the EU, it will be more difficult. You will not be able to use the small claims court after a no-deal Brexit. The ECAA allows UK airlines to operate freely in Europe; if the UK drops out, consumers may face less choice and higher prices. You will no longer be able to insist that timeshare contracts be in English. A no-deal Brexit could see consumers hit with higher credit card surcharges and slower payments for European goods. Paying in euros might take longer. We may not be able to use online dispute resolution any more. I could go on.

Whichever way we look at it, these laws are intertwined—even the Bar Council has said it. It will be very difficult to protect the consumer if we break away from these laws. If we do not have the passporting rights, what about consumer lending? That is in jeopardy as well.

To conclude, this whole area of consumer protection shows once again how much we as a country have taken for granted as members of the European Union. By leaving, we will lose out. British consumers will lose out. It shows, once again, that in 2016 people voted to leave by a very narrow margin of 52% to 48%, with four months’ notice to learn about things so complicated that they covered 40 years of our membership of Europe. Three years later so much has transpired—let alone what happened yesterday. Now we know the facts. Now we know that, in an area such as consumer protection, once people know the reality—including what we have learned today—what they are going to lose out on and that no deal is not an option, the only fair, democratic way out of this deadlock, including for the 2 million youngsters, including two of my children, who were not old enough to vote in 2016 but who are now, is to go back to the people and give them a say as to whether they want to leave the European Union or remain in it.

Life Sciences Industrial Strategy (Science and Technology Committee Report)

Lord Bilimoria Excerpts

Tuesday 23rd October 2018 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, in December 2017 the Government announced:

“Government and life sciences sector agree transformative sector deal … Business Secretary Greg Clark and Health Secretary Jeremy Hunt announce a Sector Deal with the life sciences sector”.


What happened when the committee produced its report? I shall give one example of a story in the press:

“Lords slam government’s delivery of Life Sciences Strategy … The government’s delivery of its Life Sciences Industrial Strategy is ‘wholly inadequate’, overly complex and incoherent, conclude the House of Lords Science and Technology Committee in a damning report published yesterday”.


Life sciences—what a huge and important area. If you look up on the internet what life sciences cover, you will find the following: anatomy, biochemistry, botany, genetics, immunology, microbiology, neuroscience, biotechnology, fermentation technology—that is relevant to me in my industry, and I will come on to that—food science, genomics, immunotherapy and pharmacology, and I could go on. I have touched on just a few of the life sciences.

I shall give one example from my own world. The fermentation of beer and biochemistry are important because our consumers are demanding. We manufacture hundreds of millions of bottles of Cobra beer a year, but the consumer expects every bottle to taste exactly the same as the one before. You are using yeast, a natural ingredient, and the natural process of fermentation. The ingredients change with harvests over the years, yet the consumer expects it to be the same. Our master brewers are highly trained scientists, constantly trying to perfect and innovate, whether that means producing a double-fermented beer or a gluten-free beer that tastes as good as the normal one. That is really difficult from a life sciences point of view. So I know from my own world how important this issue is.

I thank the noble Lord, Lord Patel, and his committee for the report that they have produced. It is hard-hitting, and it is for the Government to respond to it today—not the official response that has been given that the noble Lord, Lord Hunt, referred to. The noble Lord also mentioned that Andy Haldane, the chief economist of the Bank of England, is now chairing the Industrial Strategy Council. He is a hugely talented individual, so that is very good news.

The noble Lord, Lord Patel, also referred to the letter today. It is serendipitous that just today we received this letter written by 29 Nobel Prize winners written to both Prime Minister May and President Juncker. I quote from the letter:

“Scientific research and innovation are crucial for tackling the many shared challenges we face … to meet these challenges for everyone's benefit, science needs to flourish and that requires the flow of people and ideas across borders”—


the noble Lord, Lord Mair, spoke about that—

“to allow the rapid exchange of ideas, expertise and technology.

Europe was the home of the Enlightenment and the birthplace of modern science, but partly as a result of two devastating internecine wars in Europe in the 20th century, it suffered a decline relative to the USA … this decline has been reversed in the last few decades as a result of the ease of collaboration nurtured by the EU through its many initiatives and programmes, which have greatly benefited European science. Creating new barriers to such ease of collaboration will inhibit progress, to the detriment of us all. Many of us in the science community therefore regret the UK’s decision to leave the European Union because it risks such barriers”.


There is regret.

“It is widely recognised that investing in research and innovation are increasingly crucial for shaping a better European future… We must not allow the UK or the EU to become more insular in our approach to each other.


By deciding to leave the EU, the UK has given up its right to participate in EU research and innovation programmes”.


Does the Minister agree with that?

“It must now step up its commitment to those programmes if it wants to remain involved … The challenges we face must be tackled in a manner that benefits everyone and those challenges are better faced together. Only a deal which allows the closest possible cooperation between the UK and the EU, now and in the future, will make that possible”.


That is it, my Lords: 29 Nobel Prize winners, including people I know, such as Professor Paul Nurse, who has been cited several times in the debate and is chancellor of the University of Birmingham. Professor Sir Venki Ramakrishnan is a friend of mine, president of the Royal Society, fellow of Trinity College, Cambridge and a Nobel Prize winner. Professor Sir John Gurdon is a fellow of Magdalene College, Cambridge and Nobel Prize winner. Sir John Walker is a fellow of Sydney Sussex College, where I am privileged to be an honorary fellow at Cambridge, a Nobel Prize winner. These are the experts—oh, sorry, we cannot listen to experts.

The committee’s report was so hard-hitting and positive, saying:

“The life sciences sector is the flagship for the Government’s Industrial Strategy”,


but, it says,

“So far, Government action has been wholly inadequate”.


However, it is optimistic. It says,

“all is not lost. Prompt and vigorous action by the Government can save the day”.

It talks about how we do so well in translating basic science into innovation, but that it has heard time and again that we are less successful in growing SMEs into larger companies.

“Sir John Bell sets the aim of four massive UK life sciences companies being created over the next 10 years”.


I will come back to that.

The noble Lord, Lord Patel, spoke about the size of the sector: £30 billion employing nearly 500,000 people. The committee heard evidence time and again about how the success of the sector would be measured. The noble Lord, Lord Patel, mentioned this, but I think it is important to restate it. Sir John Bell said:

“The … people I have interacted with … want to see the health service deal with [the uptake and spread of innovation]; … The problem is … it is not clear who is driving the bus … Whoever is driving the bus, the windscreen wipers do not work and the exhaust is falling off”.


That is not just in the committee’s report; Sir John Bell corroborates it in his report. He said that one of the reasons why the NHS struggles with adopting innovations is because it is struggling to do even the most simple of things. This is really serious. The noble Lord, Lord Fox, also spoke about this. The committee report states:

“Unless the NHS’s ability to adopt and spread innovations, it will not be able to play a full role in the implementation of the Life Sciences Industrial Strategy”.


As chancellor of the University of Birmingham, I know that we partner very closely with the Queen Elizabeth Hospital, the largest hospital in Europe. Our medical school is one of the top rated in the country. Dame Julie Moore, chief executive of University Hospitals Birmingham NHS Foundation Trust, told the committee that financial incentives, such as best practice tariffs for trusts that show rapid adoption of innovations, could be a way forward. Does the Minister agree?

Then we come to R&D and innovation. I have stated time after time, in debate after debate, that this country underinvests in R&D and innovation. We invest 1.7% of GDP. I am very happy to hear the Government say that they will have a target of 2.4% of GDP by 2027. If you look at the chart of expenditure across the world, we are at 1.7% and the OECD average is 2.4%, which is where the Government want to get to. The USA is at 2.8%. Israel, one of the most innovative countries in the world, spends approaching 4.5% of GDP. No wonder so many amazing tech innovations come out of Israel.

The noble Baroness, Lady Neville-Jones, spoke about the difficulty of growing companies, and the report agrees that,

“the UK’s historic poor performance in this area is a concern because real economic value comes not from funding start-ups but enabling scale-up”.

Scale-ups are the challenge of business. I know that having grown a business from scratch. Sir Paul Nurse, the report writes, said that the UK lacked individuals who understood both science and finance. That is normal. In many industries, you have experts, but they are not necessarily financial experts as well.

The tax system can be used to incentivise investment in particular areas of the economy. The BIA, cited in the report, said that the inherent flaw in the EIS scheme, which I have used in my business, and the venture capital trust scheme,

“is that investors cannot follow their money in future non-qualifying fundraises. This penalises early investors as they become dilutive as a company progresses.

The BIA suggested that continued tax relief for EIS and VCT investors when investing further in companies they have backed at an early stage and preferential access to further fundraises would,

“inventivise greater and longer-term investing”.

Does the Minister agree?

Professor Chris Lowe, director of the Cambridge Academy of Therapeutic Sciences at the University of Cambridge—where I chair the Judge Business School advisory board—emphasised the importance of entrepreneurship. We have a centre for entrepreneurship at the Judge Business School, now, I am proud to say, one of the highest-rated business schools in the world. Professor Chris Lowe said:

“if you are going to generate a lot of new ideas which will eventually feed through to a large multinational industry, you need the entrepreneurs to set that up and get it running. It is a matter of culture”.

Then there is the elephant in the room: the Brexit uncertainty. The noble Lord, Lord Mair, spoke so clearly about worry about freedom of movement: allowing people to reside and work freely. It has been such an advantage in the life sciences sector, but Brexit poses a potential barrier for us to access that talent from the EU. One member of the Cambridge Judge Business School advisory board is Dr Menelas Pangalos, who is executive vice-president of innovative medicines and early development at AstraZeneca, which is headquartered in Cambridge. The report quotes him as being,

“Worried about the impact of Brexit on our employees … the fact that we have no idea what is going to happen is a real problem. We are starting to see people turn us down now in the UK because they do not know what the outcome will be for future employment”.


This is AstraZeneca, one of the leading pharma companies in the world. Professor Sir Paul Nurse told us that the UK’s,

“image is suffering terribly at this moment”.

I keep saying this: we have not taken back control with Brexit; we are losing control and losing our standing in the world. I could go on. The life sciences sector requires,

“unencumbered access to high quality talent”,

said Sir Paul Nurse. The noble Lord, Lord Mair, mentioned the tier 2 visa. I do not want to repeat, but he said how ridiculous the system we have is. The report says clearly what is happening for tier 2 visas for non-European workers,

“including doctors and other healthcare staff, software developers and laboratory scientists. In December 2017, January 2018 and February 2018 the cap … was hit for an ‘unprecedented’ three months in a row”.

So we are just turning away talent that we need. This is absolute madness; we need to change it.

The Government response is tax incentives. They have said, “Oh well, we have increased the R&D rate of tax to 12%”. Does the Minister agree that that is adequate? If we really want tax incentives, we need to do much more.

Then there are unicorns. It was reported in the Daily Telegraph today that Britain is the home of 15 unicorns—companies worth at least $1 billion. We are much better than other European countries, outperforming France and Germany. Companies in the life sciences sector are among these unicorns. Cambridge is a great area which is a fertile ground for growing an economy, with start-ups, SMEs, scale-ups and global players such as AstraZeneca. The Cambridge life science anchor model works really well.

Birmingham Health Partners talks about collaboration, innovation and application and says:

“Finally it is now down to the UK, the EU and to Member States to ensure that the unique relationship between the UK and EU research is maintained for the benefit of medical research and ultimately of citizens across Europe. Neither the UK, nor Europe can afford a ‘Brexit’ for medical research”.


It says that, for medical research, a no deal would mean: loss of researchers from the UK; disruption to productive collaborations; reduced funding for UK medical research; barriers to clinical trials and research into rare disease. A no-deal Brexit is not an option.

I quote the Prime Minister, who said these beautiful words on 21 May:

“William Wordsworth described the statue of Sir Isaac Newton that stands in the chapel of Trinity College, Cambridge as being ‘the marble index of a mind forever voyaging through strange seas of thought, alone’. That romantic image belies the truth that the essence of scientific progress is not private contemplation, but collaboration. Nothing is achieved in isolation and it is only through co-operation that advances are made. Every great British scientist could only reach new frontiers of invention because they built on the work of others, exchanged ideas with their contemporaries and participated in an international community of discovery”.


What do we do? We Brexit.

An article in the Lancet said:

“It may be that if [the UK] have to have [their] own separate regulatory system, then manufacturers will choose to launch [their product] in Europe and the USA”.


The APG, the group of American pharmaceutical companies in the UK, including huge companies such as Pfizer and Lilly, said that,

“uncertainty over Brexit is affecting global decisions on future investments in life science and health industries”.

There are now six months to go. An article in Nature spoke to scientists about how it was affecting them. One said that:

“The uncertainty is already stunting science”.


Another said that:

“Research money is already flowing away from the United Kingdom”,


and another that:

“If it weren’t for Brexit, these people would have joined my lab”.


The head of Roche is quoted as saying that the UK is “less interesting” to pharma because of Brexit.

I could go on. These are the people at the coalface, who are running some of the biggest life science companies in the world. This country has 1% of the world’s population but produces 16% of its leading research papers. We have the best universities in the world. Oxford and Cambridge now rank first and second in a recent list; along with those in America they are the best universities in the world. Cambridge, not an American university, has won 100 Nobel Prizes—more than any other university in the world. Professor Sir Greg Winter, Master of Trinity College, has just won a Nobel Prize. Our whole life sciences sector is at stake. The only way to save it is not Brexit. A Norway-EEA model would allow the sector to carry on seamlessly, but the best way to save it would be to remain in the European Union.

Steel Industry

Lord Bilimoria Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, when the Government published their steel pipeline and new procurement guidance, my university contemporary, the Business and Energy Secretary Greg Clark, said that the Government were,

“absolutely clear that we want to do all we can to support our world-class steel industry … This strategy will ensure we make the right investments in science, research, skills and infrastructure so that British industry wins contracts by producing the best goods and services”.

The Minister at the Cabinet Office, Ben Gummer, said:

“By updating our procurement approach on these major infrastructure projects we are creating a level playing field for UK steel”.


I thank the noble Lord, Lord Mendelsohn, for initiating this important debate. The history is there: employment in the steel industry was at 320,000 in 1971 and has now plummeted to 31,000. We export £4.7 billion-worth of steel from the UK and import £5 billion-worth—so there is a small trade deficit there—and 52% of UK steel exports are to the EU, while 69% of UK steel imports are from the EU. So the implications of Brexit for the industry are enormous, and there is uncertainty over future trade relationships with the EU, which will be absolutely crucial.

The All-Party Parliamentary Group for the Steel and Metal Related Industries produced a report this year in which it talked about an “existential crisis”, as the noble Lord, Lord Bhattacharyya, said. The APPG recognised,

“the vital role that the UK steel industry plays in the UK defence, aerospace, automotive industries, and supporting key infrastructure investments in the UK economy”.

It referred to an industrial strategy for steel and said:

“Our economy is unbalanced, tipped in favour of financial services and London and the South East. Essential to building an economy of purpose and resilience will be a renaissance for manufacturing, and for that steel is a key foundation industry”.


In the UK Steel Manifesto in 2016, it was noted again that there was a reduction of almost 60% in the number of people employed in steel since 1995, a 10% drop in UK steel production compared with 2014, and yet an increase of almost 400% in Chinese steel exports compared to 2009. It said:

“The result of the EU Referendum was a blow to the steel industry”,


in the UK. The disparity in energy costs, as mentioned by the noble Lords, Lord Mendelsohn and Lord Bhattacharyya, between the UK and our competitors is shackling the steel industry and preventing it being competitive. The Government must eliminate that price differential in the short term if we are to have a future. They must ensure that major procurement projects use British steel as much as possible, giving the industry confidence, and bring business rates for capital-intensive firms in line with their competitors by removing plant and machinery from the calculation. Does the Minister agree with that? There are barriers to this industry growing—cap ex, new investment and skills. Do we have the necessary skills and R&D, which I will come to later?

The British Government have been accused of disgraceful behaviour for labelling certain industries, including the struggling steel sector, as low-priority before detailed talks about leaving the EU. Can the Minister confirm that? I am a proud manufacturer of Cobra beer, with my joint venture partners, Molson Coors. We are one of the largest brewers in the world. We manufacture in Burton upon Trent in the largest brewery in Britain. Yet the 10 pillars of the Government’s industrial strategy make no mention of manufacturing. Manufacturing was 30% of our GDP in the 1970s; today it is 10%. India has a target to increase manufacturing from 16% to 25% of GDP. We have no such target. Will the Minister say why we do not?

As to the nature of the challenge, according to the Government’s industrial strategy:

“The UK has grown strongly in recent years—by over 14 per cent since 2010, second only to the United States”,


and yet the Government admit that,

“the UK needs to address the productivity gap with other leading countries”.

The Government proudly announce that they are increasing R&D investment by £2 billion a year. We invest 1.75% of our GDP in R&D and innovation, yet the United States and Germany invest 2.7% and 2.8%. If we were to just catch up with them we would have to invest £20 billion a year, not £2 billion. Does the Minister agree? The industrial strategy talks about the impact of universities. Once again, we underinvest in our universities as a proportion of GDP, compared to the OECD and EU average—forget America, which is way ahead of us—yet our universities are the best in the world. Just imagine if we invested the same amount. The industrial strategy mentions encouraging trade, yet the last Budget made no mention of the word “export”.

We know that the steel industry has halved and that China has quadrupled its production since 2000. Yet, as the noble Lord, Lord Bhattacharyya, said, there is a global capacity that exceeds demand by 600 million tonnes per year. The noble Lord, Lord Bhattacharyya, mentioned Tata Steel. Britain should be grateful to Tata for its billions of pounds of investment in British steel over the years. It is one of the largest manufacturers in Europe and has strong links with universities. It has endowed a chair at the University of Cambridge. I declare my interest as chair of the advisory board of the Cambridge Judge Business School. Some 60% of Tata Steel’s sales are to UK manufacturers and 25% are to the EU. The most important thing about the company is that it tries to be innovative. It has said that you must continue to drive innovation, but it pleads for a level playing field on energy costs, anti-dumping and business rates. Does the Minister agree with that? Tata Steel says that the success and future of the steel industry depend on innovation and skills and that the Government need to support periods of transition when the steel industry goes through ups and downs. In the past, the Government have said they would support this industry, yet when the Prime Minister went to India in November she did not even meet anyone from Tata.

The University of Cambridge produced a paper entitled A Bright Future for UK Steel. Once again, this talked about innovation but it also mentioned that half the steel used in this country is in construction. This sector, which has a plan for building lots more homes, employs 250,000 people from the European Union. What are we to do when Brexit happens? I am delighted by the recent news that:

“The UK steel industry has welcomed anti-dumping duties announced by the European Commission on some Chinese products”.


Can the Minister expand on that?

In conclusion, an article in the Financial Times asked:

“Is UK steel really a strategic industry”?


It said that it is to a town such as Port Talbot, but asked how strategic it is when it represents a small proportion of our economic output. Paul Forrest, head of economic research at the West Midlands Economic Forum—I am chancellor of the University of Birmingham—said that 260,000 jobs in his region are part of the steel supply chain. Local sources of steel production are helpful to the UK’s manufacturing ambitions. Nissan’s factory in Sunderland, which is the largest car plant in the UK, buys 45% of its sheet steel from Port Talbot.

Professor Andy Neely, a fellow of Sidney Sussex College and head of the Institute for Manufacturing at the University of Cambridge, said:

“Steel is undoubtedly foundational for so many products—but so is cement or plastics. You can … make the case that steel is a strategic material”.


But what if you can get the supplies from elsewhere? The reality is that the steel for Trident nuclear submarines is supplied from France and the latest generation of Ajax armoured vehicles will use Swedish steel. According to Philip Dunne, the Defence Procurement Minister at the time, no UK steel manufacturer could meet the requirements. There are some implications for sectors such as automotive, which require just-in-time availability, and, where it is available, UK steel plays a role in equipping our Armed Forces. Our latest Queen Elizabeth-class aircraft carriers are built by Tata Steel.

John Louth of RUSI said:

“The quality of British steel has made a big difference to the UK defence industry”,


including for our aircraft carriers. Close to 60% of steel used in the UK is imported, while two-thirds of UK output in the past couple of years has been exported.

I conclude with the words of Professor Andy Neely of the Institute for Manufacturing in Cambridge, who said that while steel may no longer be a vital input, it is part of the strategic argument over the shape of the UK economy. He said:

“If the UK says it cannot compete on steel, where does that process stop? The danger is that you end up saying the same in other sectors and we end up with a hollowing out of the British economy”.

Higher Education and Research Bill

Lord Bilimoria Excerpts

Report: 4th sitting (Hansard): House of Lords
Wednesday 15th March 2017 Lords Chamber

[Lord Bhattacharyya (Lab)]

My Lords, I draw attention to my interests as declared in the register, and specifically to my chairmanship of WMG at the University of Warwick. I should also mention that I served as a member of Sir Paul Nurse’s review of the UK research and innovation landscape that put all this together.

As peace appears to be breaking out today, I hope that those who laboured for so long in the salt mines of Committee will allow me a few brief words on Amendments 166, 173 and 183. All three will help Innovate UK promote partnerships between business and academia. I can tell your Lordships that that can be a tough job. When I started WMG, we encountered a lot of opposition. Academics are protective of their independence from commerce. However, engineers like making an impact—the bigger, the better—so their curiosity won out in the end.

We know that academic traditions can obstruct business collaboration. For example, grant application writing is a highly prized skill in universities, for a very good reason: critical assessment of research proposals is vital to academic debate. Businesses see this rather differently, especially if they are expected to disclose commercially sensitive knowledge. The Technology Strategy Board was created to address this cultural gap. We debated it here for about four years before it was formed because there were arguments on whether government should intervene and pick winners and many other arguments at that time. But we won and the Technology Strategy Board was created. Of course, this body is now Innovate UK.

Change is constant, so Innovate UK needs leaders who understand the way business and science are changing, as well as the flexibility to create the right partnerships. Amendment 166 would ensure this. Today, every business is multidisciplinary. If you make cars, you need programmers, cryptographers and medical researchers, as well as metallurgists and engineers. Bringing Innovate UK and the research councils under the same roof makes both scientific and commercial sense. Amendments 173 and 183 will ensure both business and scientific knowledge in Innovate UK’s leadership, allowing it to build flexible partnerships with business.

Innovate UK’s role is to act as a catalyst for business collaboration and partnership with academia. However, although flexibility is needed, Innovate UK should not be a bank. It has neither the resources nor the skill set. Instead, it should use its commercial expertise to create incentives to encourage businesses to invest in innovation. Its role is that of a matchmaker, not a moneylender. Its role has to be to improve productivity in this country via scientific research. The amendments in this group will help Innovate UK deliver on that vital task. More generally, the amendments proposed elsewhere today will do the same for UKRI as a whole.

[Lord Bilimoria (CB)]

My Lords, in relation to Amendment 166, I want to emphasise again the importance of having individuals from a business background because, all too often with these initiatives, the Government have the best of intentions but there are people involved who do not have experience in business and have not run businesses, and it is when you run businesses that you realise that innovation and creativity are at the heart of it. I would go further and say that they must come from science-related business backgrounds. Any good business has to be innovative. In my industry—food and drink—you have to be innovative. But the key issue here is having people with business backgrounds at the top table.

[Lord Stevenson of Balmacara]

My Lords, I confirm that we are signed up to Amendment 166 and support the comments made by the noble Baroness, Lady Brown. It is important to get the balance right. There is probably another Goldilocks pun there but I am sure the Minister will pick it up and we will get a response to that.

We have also signed up to government Amendments 173 and 183, which are at the heart of the debate we had earlier. Again, this plays to the argument made by the Minister that there are ways of improving the Bill. We have been able to explore them in Committee and now on Report, and it is good to see that there are movements here that have support right round the House, which we are pleased to be part of.

We also feel that more constraints may emerge from the business consideration than have perhaps been allowed to emerge so far. As my noble friend Lord Bhattacharyya pointed out, given the genesis of all this through the Technology Strategy Board, and now through Innovate UK, it is important that institutions learn from their history and gain from their experience over time. The formation of UKRI and the involvement of Innovate UK in that was not recommended by Sir Paul Nurse, who just felt that the issue should be looked at. But the Government decided to move forward and it is therefore their responsibility to make sure that we get the most out of it.

My noble friend Lord Bhattacharyya was also at pains to point out that we are talking about the creation not of a bank here but of a ginger group. It is an opportunity to create incentives and a ginger group that moves forward with the support of industry will be much better than one which tries to do it on its own. I look forward to hearing what the Minister has to say about that.

--- Later in debate ---

[Lord Mackay of Clashfern]

My Lords, I have my name on this amendment. I am grateful to the noble Lord, Lord Smith of Finsbury, for moving it so fully and eloquently, and I entirely agree with everything that he said.

It seems extraordinary, and I thought this at Second Reading, that the research knowledge and capability is at UKRI but—so far as I know, and I will be corrected if I am wrong—there is no requirement of any sort that the Office for Students should have any particular knowledge or experience of research or, for that matter, research degree-awarding powers. Therefore, the decision is to be taken by people who profess no particular knowledge of the subject matter of research degree-awarding powers. That is to be left to a matter of advice. The difficulty with that, as the noble Lord, Lord Smith, has pointed out, is that when it comes to accountability all that the Office for Students can say is, “Well, we got this advice from UKRI. That’s our defence”. Surely, the people who should defend the advice that is the essence of the matter should be the people who give it. There is a difference between decision-makers and advisers, as we were authoritatively informed some years ago: Ministers decide, advisers advise. In this context, the decisions are to be taken by the Office for Students while UKRI, with all its expertise, is relegated to being an adviser.

I have interests in the University of Cambridge, in the sense that I am an honorary fellow of two of the Cambridge colleges and I am a member of the Council for the Defence of British Universities. However, my view, which I have expressed consistently since Second Reading, is that UKRI’s research capabilities mean that it should be involved in the decision-making process as a decision-maker, not merely an adviser. As the noble Lord, Lord Smith of Finsbury, said, we got a letter this morning, which was followed up by an invitation to telephone. Naturally, I accepted the invitation to telephone as soon as I was free to do so. We had a considerable discussion, and I was asked whether the second part of the amendment was as important as the first, the second part being about research students. I said, “Not for me”; I thought the essential part was the first part. I thought, “This sounds good”. Your Lordships will no doubt wait with bated breath to hear what the answer is to that. Anyway, I expressed the view that the second part was not so important. Therefore, if at some stage the amendment is subject to further consideration, I would be perfectly happy—I think this goes for its co-mover as well—to forget about that. The essential part is the decision-making. Surely the Government recognise that there is a difference between a decision-maker—a person with some responsibility for decisions—and an adviser. I strongly support the amendment and feel rather disappointed that the Government have not seen the logic of its position.

[Lord Bilimoria]

My Lords, I support what the noble Lord, Lord Smith, and the noble and learned Lord, Lord Mackay, have said.

I shall read out the mission statement for the University of Cambridge, which is very short:

“The mission of the University of Cambridge is to contribute to society through the pursuit of education, learning, and research at the highest international levels of excellence”.


That came home to me when I was a student there. We finished the last supervision of term in my favourite subject with a brilliant supervisor, and he said, “Have a good holiday. Now I can get on with my real work, which is research”. That is the importance of research to our top academics.

At the University of Birmingham, where I am chancellor, I chaired the annual meeting earlier this month. We announced that Birmingham had won three more Nobel prizes, taking our total to 11, because of our research.

The University of Cambridge Judge Business School, where I chair the advisory board, has in just over a quarter of a century become fifth in the world in the global FT MBA rankings. One of the main reasons for that is the absolute priority placed on research.

Anything we can do to make sure that we have robust support for our research—not just through advice but taking the expertise of UKRI along with that of the OfS, jointly—would be good for the future of research and the excellence of our universities.