Economy: Productivity

Debate between Lord Bilimoria and Lord Prior of Brampton

Wednesday 8th February 2017 Lords Chamber

[Lord Prior of Brampton]

The noble Lord raises an interesting point. Since, I think, 2010, our economy has grown by 12%, which is the highest in the G7, yet our productivity growth over that period has been low, as the noble Lord said. The reasons for that are broad and manifold, but he puts his finger on it when he says that, in part, it is to do with a lack of investment in key infrastructure and technical skills. Both those things are absolutely centre stage in our new industrial strategy.

[Lord Bilimoria (CB)]

My Lords, will the Minister acknowledge that one of the best ways of increasing productivity is to invest in higher education and research and development innovation? Would he also agree that we underinvest as a percentage of GDP in our higher education, compared with the OECD EU average, and way under America, and yet have the best universities in the world? When it comes to R&D innovation, we invest 1.7% of GDP compared with 2.8% in the United States and Germany. We would have to invest an extra £20 billion a year just to catch up with them.

[Lord Prior of Brampton]

The noble Lord makes a good point. The fact is that the productivity of our investment in research in British universities is incredibly high and the output of our top universities is fantastically high by any world standards. He will know as well as I do that we are now committed to raising an extra £2 billion a year in research by 2021, which is a very significant increase. He is also right that even after that increase we are still not investing as much on a per capita basis or on a percentage of GDP basis as some of our biggest competitors—Germany and the US, for example. So we are making good progress but the job is not yet done.

Higher Education and Research Bill

Debate between Lord Bilimoria and Lord Prior of Brampton

Committee: 7th sitting (Hansard): House of Lords
Monday 30th January 2017 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, I declare my interest as chancellor of the University of Birmingham and chair of the advisory board of the University of Cambridge Judge Business School. On that note, if I may boast, today the FT global rankings for the MBA came out and the Judge Business School rose from number 10 to number five in the world. This is a business school that has been around for only 26 years, compared with the Harvard Business School, which is over 100 years old. One of the reasons for that success is the excellence of research at a university like Cambridge.

The problem that is overlooked completely by the Bill is that we in this country carry out excellent research despite underfunding it compared with competitor countries. We spend 1.7% of GDP, compared with 2.8% in the USA and Germany. Our research councils, which are world-class and respected around the world, have been doing a great job as autonomous units. One of the main worries about the Bill in universities and research councils is the removal of the autonomy of these institutions. They function well thanks to that autonomy.

I support Amendment 490D from the noble Baroness, Lady Brown, and the noble Lord, Lord Krebs, which would leave out the words “as UKRI may determine”. Under Clause 89, headed, “Exercise of functions by science and humanities Councils”, UKRI would have the right to determine what they do. This is absolutely wrong. Whatever the reasons the Government have given for having a layer like UKRI, many people—the noble Lord, Lord Rees, has argued well against it—have said it is completely not necessary and could be damaging to the whole sector. The analogy made was setting up a body to represent all the world-class museums in London, which are the best museums in the world. That would be completely unnecessary as they are doing a great job on their own. We have to ensure that the autonomy of the research councils is protected, whatever happens, even with the existence of this body called UKRI.

[Lord Prior of Brampton]

My Lords, my noble and learned friend Lord Mackay kindly referred to my usual clarity. I fear, in so far as I ever had any clarity, it is rapidly dissipating as time goes on. Still, I will try to respond to many of the issues that have been raised in this very interesting debate.

I shall start with the governance relationship between research councils and UKRI. I will resist the temptation to address the broader issue raised by the noble Lord, Lord Bilimoria, but I recognise that the UK still underfunds research compared with many of our competitor countries. Nevertheless, the £2 billion increase coming into UK research in 2020 is a significant change. One has to ask oneself whether that would have come about without UKRI being about to become our key co-ordinating research body.

Through Clause 89 the research councils retain their right to make decisions within their respective discipline areas. I assure noble Lords that UKRI must arrange for the seven research councils to carry out their roles and functions within their areas of activity. UKRI cannot prevent any of the research councils carrying out their functions in their respective areas.

I thank my noble and learned friend Lord Mackay for pointing out that references to “humanities” are in fact defined in the Bill, in Clause 105. It makes it very clear that they are defined as including the arts, and references to “sciences” include social sciences.

In discussions in the other place, the Government were clear that funding allocations would be made to each of the councils by the Government in the UKRI grant letter. Delegated authority limits will be set for the research councils to operate independently but additional approvals may be needed, including from the UKRI board, in line with current government best practice.

It is an important part of these reforms that UKRI will empower the councils to work together. The amendments would not prevent UKRI operating in this manner, but would obscure our intent for UKRI to take strategic decisions and facilitate development of the overall direction.

To address the point made by the noble Lord, Lord Mendelsohn, this reform is about far more than efficiency savings or a reduction in bureaucracy. We must deliver these where we have the opportunity to, but not at the expense of the strengths of the current system. However, the removal of the current duplication of back-office functions across multiple bodies will ultimately drive efficiency savings and reduce the administrative burdens placed on research and innovation leaders, freeing them up to focus on strategic decision-making. It will also help to deliver simplified systems and processes for funding recipients.

On Amendments 485C and 195A, I welcome the opportunity to assure noble Lords that UKRI’s core purpose is to seek to improve the UK’s science and knowledge base, and it will seek to improve knowledge and understanding through research. Advancing knowledge is a critical role of the whole of the UK research base, including UKRI and the research councils, and we will look carefully at this matter before we return to the House on Report. I share the aspiration of the noble Lords, Lord Willis and Lord Cameron, for UKRI to support research programmes that can help to shape government policy, ensure resilience and respond to key challenges facing the UK.

On social inclusion, community cohesion and social and cultural well-being, I am certain that the current duty on councils to consider the desirability of improving quality of life is sufficient to cover these.

Higher Education and Research Bill

Debate between Lord Bilimoria and Lord Prior of Brampton

Committee: 7th sitting (Hansard - continued): House of Lords
Monday 30th January 2017 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, last year I shared a platform with the chief executive of Innovate UK at the International Festival for Business in Liverpool. We have heard from my noble friend Lord Mair about the great work it is doing and how important it is for our economy to encourage innovation and the translation of research from universities to business. Is it not ironic that here we have this Bill about which our greatest worry is its threat to autonomy—the autonomy of our universities, of our research institutions and, now, of Innovate UK? We cannot in any way stifle Innovate UK’s work or its ability to partner with or have joint ventures with organisations or to be innovative in itself. We cannot spoil Innovate UK being innovative. I urge the Government to listen to the amendment in the name of my noble friends Lady Brown, Lord Mair and Lord Broers and enable Innovate UK to be innovative itself.

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

My Lords, I will begin by saying that I agree 100% with the principles behind many of the amendments in this group. It is absolutely right that Innovate UK should have as much autonomy as possible over all matters related to its remit and mission. We are fully agreed on that. However, I disagree with my noble friend Lady Neville-Jones. I fundamentally believe that Innovate UK will be better off within UKRI and that bringing together into one organisation research and the translation of research will create a much stronger one. I also feel that, when it comes to negotiating budgets with the Treasury and the like, again Innovate UK will be much better off within UKRI than if it were a separate body.

--- Later in debate ---

[Lord Bilimoria]

My Lords, today I hosted a group of education leaders from India and in our discussion, they asked: “What are your worries about Brexit when it comes to the UK education sector?”. In listing my worries, a list which is too long to talk about now, I stated that one of my biggest concerned research. It is all very well for the Government to say, “We’ll keep giving you the funding for research that we get from the European Union, even if we leave”, but it is much more important than that. That is why I support Amendment 488 in the name of the noble Lord, Lord Hannay.

The key to research is collaboration. Already, we are seeing EU-funded research universities in Europe not partnering with UK universities because they are worried that we will be leaving the European Union. If I may illustrate the power of collaborative research, while I was in India in November, at the same time as the Prime Minister and the Universities Minister, Jo Johnson, the University of Birmingham held a workshop with the Panjab University. There we showed the power of collaborative research: when the University of Birmingham conducts research, our field-weighted citation impact is 1.87. The Panjab University figure is 1.37. Yet when we carry out collaborative research, the impact is 5.64, or three times the Birmingham figure. When we do research with Harvard University—I am an alumnus of the Harvard Business School—while Birmingham’s impact is 1.87 and Harvard’s is 2.4, our combined impact is 5.69. This is serious. We must encourage collaborative research with the European Union and this amendment should be in the Bill.

[Lord Prior of Brampton]

My Lords, I think we are all pretty much in violent agreement about the critical importance of collaboration across countries, but also about being able to attract the best and brightest to the UK. There is no question about that. When one hears the story from the noble Lord, Lord Mendelsohn, about individuals who have decided not to come here for various reasons because of Brexit, it is depressing. On the other hand, only today Novo Nordisk, the big Danish pharmaceutical company and diabetes specialist, announced that it is investing £100 million at Oxford. AstraZeneca is also building its global research facilities at Cambridge. The truth is that anecdotes can be misleading and that the jury is out.

We have to demonstrate to the international community that we are open for business, and persuade it that that is the case. Other countries have similar issues at the moment. I imagine that many scientists in the USA are thinking, “Should we stay in the US or move?”. Scientists in other parts of Europe will be thinking similar things. We have to demonstrate to this increasingly internationally mobile part of the community that Britain is the place to be. I was struck that at the Crick institute, some 34% of all its principal investigators are EU nationals, which illustrates that it is essential that we reassure them of their welcome here.

That is what the Prime Minister has been doing. She said in her Lancaster House speech on 17 January that we will,

“welcome agreement to continue to collaborate with our European partners on major science, research, and technology initiatives”.

She went on to describe her vision of,

“a secure, prosperous, tolerant country—a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead”.

There should be no doubt that the Government are fully apprised of this issue and that we are determined to be, as the Prime Minister said, a magnet for international talent. I do not suppose that the country is going to be glued to reading Hansard tomorrow, but it worth making that point on any opportunities that we get.

Health and Social Care

Debate between Lord Bilimoria and Lord Prior of Brampton

Thursday 24th November 2016 Lords Chamber

[Lord Prior of Brampton]

We have voted to leave the European Union. We now have to make the most of it. We can make the most of it and we can make a success of it. We can use Brexit as a catalyst for change. Even though most people, like me, wanted to stay in the EU, none of us felt that the EU was perfect. Most of us felt that it was a deeply flawed institution. Now that we will be outside the European Union there are huge opportunities that we can take.

The third theme is immigration. Immigration has been hugely beneficial for our country, not least for the NHS but for our country as a whole, and we should celebrate that. But that does not mean to say that uncontrolled, high levels of immigration cannot do damage to our country. The tone of the debate, both in the US around the election and here around Brexit, was often deeply shocking, deeply unhelpful and, as many others have mentioned, deeply deplored.

However, let us not pretend for one minute that all the difficulties around immigration in this country stem from those two debates. No one can say that the “Black Lives Matter” campaign in the US suddenly started when Donald Trump became President-elect. No one can say that the problems which people from BME backgrounds have with the criminal justice system, or have in the NHS, suddenly stemmed from Brexit. Many of these issues are much more profound, much deeper and much more fundamental than that. Controlled levels of immigration can undoubtedly enrich this country materially and culturally, but uncontrolled immigration runs the risk of damaging both those things. Those were the three big issues that ran through this debate.

I turn to the scale of the issue that confronts us. There are 57,000 colleagues from EU member states working in the NHS and about 90,000 working in the social care system. As we heard from my noble friend Lord Colwyn, there are 7,000 dentists from the EU. We know that the proportion of overseas and EU staff is much higher in some parts of the country, especially London. We also know that there is a huge impact on our life sciences industry—I took note in particular of the comments of the noble Lord, Lord Bilimoria, on this—from EU nationals and people from other parts of the world. The collaborative work we do across the EU in life sciences is extremely important. Cancer Research UK says that between 30% and 40% of all its research is done in collaboration with EU nationals. As we put together our strategy for the life sciences, as part of the industrial strategy, I assure the noble Lord that access to the world’s best talent will be absolutely centre-stage and critical.

There should be absolutely no doubt that the UK benefits from immigration, but reducing net migration is compatible with continuing to attract hard-working and skilled people who come here to study and to work. The immigration system will always have a role to play in supporting growth and meeting the needs of UK businesses. People from overseas fill vital gaps in our labour market in social care, nursing, medicine and science.

The Prime Minister has been absolutely clear that she wants to protect the status of EU nationals already living here—incidentally, this was also the view of her predecessor, David Cameron—and that the only circumstances in which it would not be possible is if British citizens’ rights in European member states were not protected in return. Some degree of reciprocity does not seem unreasonable. Personally, I regard the chances of that happening as being so remote as to be almost inconceivable. My right honourable colleague the Secretary of State for Exiting the EU, David Davis, also made this clear when he said:

“We will always welcome those with the skills, the drive and the expertise to make our nation better still. If we are to win in the global marketplace, we must win the global battle for talent. Britain has always been one of the most tolerant and welcoming places on the face of the earth. It must and it will remain so”.

[Lord Bilimoria]

Can the Minister explain this one fact? We have had uncontrolled immigration from the European Union, and we have heard from all quarters in this debate that the NHS and the care sector are highly dependent on those people. We have more than 3 million people from the EU living and working here, yet we have the lowest level of unemployment and the highest level of employment in living memory. How would we have managed without these people? If people voted to leave because of the burden of immigrants on the public sector, we have just proved in this debate that without those immigrants they would not have the public sector.

[Lord Prior of Brampton]

I repeat what I said earlier: the contribution made by people coming into this country from the EU and elsewhere has been enormous. It was clear in the Statement yesterday that one of the great fundamental problems we face in this country is low levels of productivity. If we are to afford the kind of social care system and health system that we want, we have got to increase levels of productivity. It has been too easy for us in this country to rely upon people coming from overseas rather than training our own people.

I strongly believe that that is why we must focus on areas such as life sciences, for example, where we have huge strength in research and high levels of productivity. That is the only way that we are going to be able to afford to have the kind of health and social care system that we need. I agree with David Davis. The Conservative Party is unashamedly internationalist, outward-looking and global in its outlook. There is no place for jingoistic, xenophobic or little England views in our party. On the contrary, we look out to the world, a world that includes Europe, but is not defined by Europe. Noble Lords deplored the xenophobia that appears to have increased since Brexit, and I entirely share their views. There can never be any excuse for that kind of attitude.

We recognise that we cannot continue to rely on people from overseas to maintain the level of staff that is required within our health and care system, nor is it right to do so. If we are honest with ourselves, we knew this before Brexit. We must become more self-sufficient. Indeed, this is consistent with our commitment to the World Health Organization’s priorities on human resources for health. It cannot be morally right for a rich country such as the UK to recruit skilled doctors, nurses and other workers from countries whose need is so much greater than ours, so we will take a range of actions to increase the supply of domestically trained staff and to increase efficiency through better use of technology and skill-mix solutions.

In respect of the NHS, we have already increased the number of key professional groups being trained. For example, since 2013 the number of nurse training commissions has increased year on year by some 15%, and we expect to have 40,000 more nurses by 2020 than we had in 2015. We are committed to ensuring that there will be 5,000 more doctors working in general practice by 2020. From September 2018, the Government will fund up to 1,500 additional undergraduate student places through medical schools in England each year. This is in addition to the 6,000 medical school places currently available in England. That is a very significant increase. It is 1,500 places each year on a five-year course, so that is an extra 7,500 doctors coming through the system. The recent reforms to the funding of training for nurses and allied health professionals will further increase supply by removing restrictions on the number of training places, so that universities are enabled to deliver up to 10,000 additional nursing, midwifery and allied health training places over the course of this Parliament.

Nevertheless, it is important to recognise that it takes time to train skilled health and care professionals, and therefore we have introduced initiatives to improve retention and to encourage trained staff to return to practice. We are also working to increase the efficiency with which we use our existing staff and to improve productivity by changing the skill mix through the introduction of new roles, such as physician associates and nursing associates. This will ensure that highly trained professional staff are properly supported and more productive. We will also see over the next five years a huge increase in the use of digital technology to enable more people to be looked after outside hospital settings.

We all recognise that social care is a vital service for many older and disabled people. The Department of Health is working with Skills for Care, employers and Health Education England to support activity to recruit and, importantly, retain our caring and skilled workers who work in social care. In many ways, these people are the unsung heroes of the health and social care system, delivering very personal care to very vulnerable people at very low salary levels. Since 2010, we have seen more than 340,000 new apprentices into the workplace in the care sector, which is more than any other sector. So we are taking action to increase our home-trained workforce in medicine, nursing and social care.

I do not want anyone in this House to think for one minute that we underestimate the challenges that Brexit presents to the health and social care system, but I think it also presents huge opportunities. It behoves us in this House just occasionally to look on the slightly more optimistic side, and not to be quite as depressing as we sometimes are.