(2 years, 6 months ago)
Lords ChamberMy Lords, I thank the Minister for his opening remarks and his comprehensive repetition of what George Freeman, the Minister, said in the other place. To a degree, I am reassured. My concern is how I will know that the Government live up to the undertakings implied in the words of the Minister. I will come back to him in a moment. I intend to be brief.
I particularly thank the Minister for his generous remarks about me, but they ought to be shared by a significant number of Members in all parts of the House who contributed to the debate we had on the amendment. That the House was minded to support the amendment had more to do with Members’ combined advocacy than the way in which I introduced it. I also thank the Minister and his office for earlier this week drawing my attention to the Government’s recent announcement that Dr Peter Highnam has been appointed as ARIA’s first CEO. This man seems uniquely qualified to do this job; I suppose DARPA is the only place that he could have got the experience. He is also uniquely equipped to negotiate the framework agreement with the Government, which will be important to how ARIA works.
I accept that the Commons reason is not challengeable, and I do not intend to debate that or to divide the House on the noble Lord’s Motion. However, as the Minister and his office helpfully reminded me a week ago, while speaking to my amendment on Report, I set out my wish to hear the Science Minister address at the Dispatch Box the issues that prompted the amendment in the first place. At least I should address what he said, and I will do that for a few minutes, with the leave of the House.
In the other place, George Freeman acknowledged the importance of ARIA having a duty to the taxpayer to ensure that the intellectual property generated by its investment in R&D is commercialised to the advantage of the UK economy primarily, and to ensure that it is not
“haemorrhaging intellectual property of value to the UK.”—[Official Report, Commons, 31/1/22; col. 86.]
That reflects what he said to a number of noble Lords who met him before Report. To paraphrase another member of the Government, he gets it and clearly seems to understand the issue. The question is whether the Government have a plan to address this issue and will be able to share the development of the plan with Parliament properly. That is what I want to concentrate on now.
Turning to what the Science Minister said, he first referred to the terms of the amendment and argued that, as drafted, it added only examples of the conditions that ARIA may attach to financial support and, as it already has a general power to do just that, it represented a drafting change that cannot be accepted. There is no merit in this argument. The fact is that the Bill, as already drafted by the Government, already has examples of conditions that ARIA may attach to financial support in Clause 2. They are almost certainly there because the Government want to highlight those powers, not because those examples need to be there to give those powers to ARIA. Our amendment simply adds to their existing list and has a similar motivation—to emphasise and highlight the importance of this power.
On the specific issue of predatory overseas acquisition of IP through foreign takeover of UK businesses where there has been substantial public investment in R&D—there are many past examples of this, to the detriment of the UK economy—the Minister reassured the other place that the National Security and Investment Act 2021, which fully commenced in January, already provides a relevant and sufficient framework for the Government to scrutinise acquisitions on national security grounds. The Minister also referred to a broader strand of work that is under way to enhance that statutory framework, including other unspecified complementary measures designed to help the Government strengthen our protections. Perhaps the Minister can expand on that. He made some general references to it, but I am not clear as to what work is going on. I think the House would benefit if there was further specification. It may not be appropriate to do it now, but maybe it could be spelled out more clearly at some time in the future.
The Minister reassured the House that the Bill already provides the Secretary of State with a broader power of direction over ARIA on issues of national security, but the amendment was never intended to intervene in the Secretary of State’s powers. This is of limited comfort, as my honourable friend Chi Onwurah pointed out, national security in the relevant legislation, the NSI 2021, is narrowly defined, and it does not include economic security, despite attempts by Labour to expand the definition in that Act so that it would include this. It therefore does not address the issue of intellectual property and its economic value.
The Minister then pointed out that the because of the terms of Clause 2(6), ARIA must have regard to economic growth or economic benefit in the UK, and the mechanism for scrutiny by government and Parliament will be in what the Minister refers to as the framework document. This is a weapon which the Government deploy regularly to see off amendments to the Bill. On Report, the Minister used the potential of the framework agreement, and what it could include, five times in debates. The problem is that none of us has seen the outline of the framework document, or even the Government’s bid for the negotiations of what the framework document will include. Until we see that, there is no way that any of us can judge its merit as a mechanism for dealing with the issues that we have raised.
Perhaps during the negotiations that can at least now commence after May, when there is a CEO, the Government will undertake to make regular statements, or at least one statement, to the House about their negotiating position, so that we get some sense of whether the many concerns about this Bill that the House has shared with the Minister can be allayed by the framework agreement or document. There is now a CEO and these negotiations can begin.
Finally, in the debate that took place in the other place, at col. 87, the Minister turned to the question of how ARIA responds to the UK’s strategic interests in science and technology more generally, where these may not fall under national security. I think he played his ace there: drawing attention first to the integrated review, which he did not expand on, and then to the role of the new Office for Science and Technology Strategy and the national science and technology council, and the Government’s ambition to ensure that there is a serious, strategic machinery of government showing a commitment to the strategic industrial advantage of UK science and technology. The Government’s argument is strong: we should be persuaded that this will deal with these issues because the Government have a core to their infrastructure that will drive these ambitions. There is a fundamental difficulty with this, however: it is impossible to find, in any government documents, any information about either the Office for Science and Technology Strategy, or the national science and technology council, which is a sub-committee of the Cabinet, other than that they exist and a very broad outline of the first organisation, which is designed to service the second one. I do not know how we are supposed to evaluate the strategic machinery of government, unless we know what they do.
There is something worrying happening to the accountability in our Government at the moment. There is a proliferation of sub-committees of the Cabinet. We have gone from having about six to having 20 in a matter of months. Almost every area of important public policy now has one or more such sub-committees to deal with it. The pattern appears to be—it certainly is with climate change—a strategic sub-committee and an implementation sub-committee. You can find out nothing about what any of these committees do.
So that we know what the relationship between Parliament and these committees now is, I will quote for the benefit of the House what Alok Sharma, the COP president, said to your Lordships’ Environment and Climate Change Committee in answer to a very reasonable question, in a questionnaire sent by the committee, about these two key pieces of machinery for climate change. The committee asked him:
“Are the two relevant Cabinet Committees”—
that is, the strategy committee and the implementation committee, which he chairs—
“expected to continue in the long-term, and what plans does the Government have to increase transparency around their proceedings?”
The answer to this is in a letter, which is on the committee’s website. I will read it in short, because in the first part Alok Sharma gave the impression that they are intended to continue, but he said:
“With respect to Committee frequency and transparency, it is a long-established precedent that information about the discussions that have taken place in Cabinet and its Committees, and how often they have met, is not normally shared publicly”.
So that is it.
If that is to be it for this infrastructure, which sits at the heart of the development of science and technology and ARIA, we will not find out anything. I honestly have no way of knowing whether I should be reassured by what the Minister said in the other place, if that was his ace card. To paraphrase my honourable friend Chi Onwurah in the other place, the Minister has set out that he shares our concerns, but I am afraid that I cannot really assess whether he has a plan to address them, because there is a whole part of what he intends to do that I will never be allowed to know.
My Lords, I very much appreciate what my noble friend on the Front Bench has said by way of response to the several debates that we had on the Bill about the centrality of intellectual property, and its protection and exploitation by ARIA. Often in your Lordships’ House, we send amendments to the other place, and occasionally—perhaps often—we find that they are not given the weight of debate at the other end that we think they deserve. On this occasion, it did, and I was much reassured by the Science Minister’s response, and by the appointment of Dr Highnam to the chief executive post.
I want to raise one question. In the midst of the many reassuring things that were said, including that the powers exist for ARIA, or through the NS&I Act, the framework document remains. I raised one issue on that in an amendment, which was whether under the framework document ARIA would be able to retain and reinvest the exploitation of intellectual property arising from its investments so as to create a growing activity in support of its mission of disruptive innovation. I hope that will be incorporated in the framework document. It was not referred to, so I hope that my noble friend will take note of it and that the Treasury will allow this to happen.
My Lords, I will not detain the House for long, not least because many of the points I wanted to make have been ably made by my noble friend Lord Browne. I welcome much of the Minister’s speech and the appointment of the chief executive-designate. Considering his background, I venture to suggest that by the time he leaves the post he is about to fill, the name of the agency may have changed from ARIA to DARIA. That would reflect his personal background and possibly the way in which developments may move.
I also welcome what was said in another place by the Minister for Science, who the noble Lord, Lord Lansley, referred to. I have a high regard for the Minister for Science and thought that he addressed seriously some of the concerns raised in our debates. However, to echo my noble friend, I point out that the National Security and Investment Act still provides too narrow a basis for protecting what really matters about ARIA, which is the intellectual property that it is going to generate. It is a strange position to be in, but I think that the definition of national security, which does not take into account the economic security of this country and the intellectual property attached to that, would be a mistake and possibly a loophole. I regret the fact that the framework document to which the Minister referred has not yet been seen by anybody, and I hope that in the months and years ahead we will be able to debate that framework and the new scientific architecture, which the Minister rightly referred to, because we are moving into a new era.
It is not often that Governments anywhere launch a new agency with so little idea about what it will do and how it will do it. Nevertheless, I wish it well, and I hope that in the months and years ahead when we come back to discuss ARIA and its development we will be able to see the progress it has made, which I for one hope it will.
(2 years, 6 months ago)
Grand CommitteeMy Lords, I am very pleased to follow the chair of our committee, the noble Baroness, Lady Hayter, and thank her for so ably presenting the issues that are raised by our report. As the International Agreements Committee, we have taken on new responsibilities. This is a first example of where we have reported on negotiating objectives and the House has an opportunity to debate them. This forms part of a process by which, in due course, when the Government, one hopes, successfully negotiate an agreement and presents it under CRaG, we will be able to look back and say that we were very clear about the nature of what was being sought by way of this agreement and to measure the extent to which the Government have been able to achieve their objectives.
That is an essential part of our scrutiny processes. In my personal view, we are not at this stage debating whether accession to the CPTPP is a good thing or a bad thing; our starting point was simply that it was the Government’s policy, and it was essentially a good thing. The issue at this stage is whether we can be clear about what the Government are seeking to achieve. The noble Baroness, Lady Hayter, quite rightly raised a number of the issues on which we want clarity. I shall raise a couple more, and I know that colleagues from the committee will have others.
I want to say a word about the big picture. I should register an interest, as recorded in the register, that I am the UK chair of the UK-Japan 21st Century Group. The big picture seems extremely positive. Not only is the CPTPP one of the leading plurilateral trade agreements, but it is an immensely ambitious proposal on the part of government to accede to it. There was a degree of misplaced comment about why we were trying to join a Pacific agreement. The point is that that is where trade happens; it is where our prospects for growth in trade perhaps lie; it is where, when one looks at the shape of international trade growth and economic activity in the decades ahead, we need to be. Given that on current evidence we shall not have another multilateral round in the WTO, the ability of countries such as us to enter into a major regional agreement and increase the scope of it geographically and otherwise is a central way in which we can promote free trade generally across the globe and encourage others to do the same—perhaps even encourage America to do the same at some point.
Our chair raised the question of the impact assessment. I am somewhat sceptical about the value at this stage of such impact assessments. They rest essentially on the assumptions underlying them. An agreement of this kind, with the scale of growth in digital economies and in the provision of digital services and digital trade that it provides for, enables the UK to escape from the otherwise simple fact that we are very long way away from these markets and trade tends to diminish with distance. That may not necessarily be true to the same extent and in the same way for digital trade in the future, and it certainly is not the same in respect of services trade. We are an economy increasingly built on services and digital trade, so, for us, the CPTPP seems to create really serious opportunities.
As a remainer in the Brexit context, I obviously take the view that we should never think of the CPTPP as being, in some sense, a counterpart to reduced trade with the European Union. I want us to have both, and I am sure that we can and should aim to.
We should never underestimate the leverage that the United Kingdom is able to bring to the negotiations ahead. We are major importers. Maybe we would like it a different way, but we are net importers of goods, particularly agricultural goods. The European Union has benefited from that overwhelmingly in the past; many other countries might examine it and have ambitions on that agricultural trade. That is leverage in the negotiations. As we will debate at a different stage in relation to Australia, we should not let the opportunity for others to sell more agricultural goods to the United Kingdom pass without taking our opportunity to ensure that we can sell services and some of our leading manufacturing activities to them, and to have digital trade with them.
I have two points on our report and the Government’s response where more clarity is required. First, the Government have expressed their objective on medicines as being that their cost should not be “on the table”. The trouble is that their cost is on the table; the question is how the Government will manage to take it off. We heard from the British Generic Manufacturers Association that Article 18.53 of the treaty has a process requiring mandatory notification to the patent holder of a marketing authorisation application being submitted for a generic or biosimilar medicine. This would give scope and time for a legal challenge on the use of that intellectual property. That can delay the introduction of a generic or biosimilar medicine; we do not need to speculate about that, because you can see it happening in America and some other jurisdictions. That is important to the National Health Service. We are probably the most successful major health system in substituting generics for branded medicines at an early stage. The reduction in price at the point at which they come off patent is generally something of the order of 80%, so potentially it is of immense importance that this process works smoothly. We do not want delay. We share the concern of the generic manufacturers, as the Scottish Government clearly did, too.
The Government’s response is essentially to say, “Don’t worry. We’ll negotiate our way out of this”, and the implication is that there will be a set of comprehensive side letters. We are reaching the point where the Government should be very clear that this is what we should look for by way of the subsequent negotiation. Frankly, this is one of the areas where our negotiating partners in the CPTPP should not be surprised. They should expect and accept it, and our negotiators would find it easier if we were very clear that this was an absolute requirement.
The second issue is about the investor-state dispute settlement. We essentially asked the Government to tell us their negotiating objective, as it is not in their strategic approach. The implication of their response was simply, “Trust us; whatever we sign up to will, by definition, be in Britain’s best interests and therefore it will be okay”. But we do not know what it is. As a committee, we did not take a view on what the negotiating objective should be. Strictly from a personal view I know from my conversations with colleagues in Japan, who are much governed by the decades of investment activity in this country, that they want investor-state dispute settlement to be incorporated into the agreement. In fact, they may even require it for the agreement to go ahead.
We have been major investors around the globe for generations. We still have major investments, including in a number of CPTPP countries. I am not clear what we are frightened of. We have a right to regulate; there are already very clear provisions in the treaty about the ability to regulate our environmental, health, social and labour laws. As long as those are clear in the treaty, we should go down the path of a dispute settlement process like those being devised under UNCITRAL.
Those are the two issues on which the Government ought to give us greater clarity. Difficult though the ISDS debate is, this is the moment—and the agreement—where the Government need to get off the fence and start telling people what our approach in free trade agreements is to investor-state dispute resolution.
Finally, colleagues in the committee sought clarity in our report from the Government about China and Taiwan. Others may say more about that. Personally—I may need to apologise to members of the committee— I think it would probably not be in the Government’s or British interests for us to say much about China and Taiwan. I think our best interest is to accede to the CPTPP and be on the inside making decisions about this—hoping to do so before the other CPTPP members have made any progress whatever in considering the potential for China or Taiwan to accede. I would rather we were in there talking to the others than outside pontificating about it before we have entered, potentially making difficulties before we have joined the agreement.
This is the first debate of this kind. I hope it will be an opportunity. I encourage my noble friend the Minister to use it not only to restate the Government’s response to our report but perhaps to clarify some of these issues, which we will have to look at in a more challenging way when we see the agreement. I hope that we can say then that the Government have secured their negotiating objectives and that we can commend them under the CRaG process.
(2 years, 7 months ago)
Grand CommitteeMy Lords, I am very glad to follow the noble Lord, Lord Foulkes of Cumnock, and, although I do not wish to lead him, I am sure my noble friend the Minister will be able to reassure him, as I can, that there is no basis for any suggestion that the British Government’s views on Russia, or their policies or attitudes towards Russia, are in any sense affected by donations to the Conservative Party. As a former director of Conservative Central Office, I know that 30 years or more ago we were very clear that donations to the Conservative Party do not buy influence over its policies.
I am very glad to contribute to this debate as a member of the International Agreements Committee and to say how much I appreciate how our chair, the noble Baroness, Lady Hayter, introduced it so admirably and set out the specifics of the report and how we went about our task. I want to say a bit about that. I am afraid I do not bring ministerial experience to match that of my noble friend Lord Astor of Hever. I thought he set out the policy context within which we want to set this debate very well, and that is something I want briefly to touch on.
On the process point, we report under CRaG, which gives us the opportunity to initiate a debate and for this House to look at the issues. We did so because the policy context within which the agreement had been reached, and is now to be ratified in due course, is fast developing and dynamic. Although the explanatory memorandum that accompanies the agreement set outs its content very fairly, neither it nor the agreement itself set out any of that policy context. It is my view, which I hope might also be the view of my colleagues on the committee and in the House, that although the Minister in the other place, Mike Freer, signed the explanatory memorandum, the Department for International Trade, as the lead department, should have recognised its responsibility to set out the policy context in it to enable the House and we as a committee to see what the Government’s intentions were.
It is not simply a commercial transaction, important as the potential business opportunities in the United Kingdom are, at Rosyth and elsewhere; it is even more important politically, diplomatically and geopolitically. It is not only important but welcome—I do not have any dispute with it; it is a very helpful step in the process of giving Ukraine access to all its sovereign rights, including enhancement of its naval capabilities, as the programme is intended to do. Frankly, we are not the only ones doing this—the United States is enabling it to buy US patrol boats, and Turkey is apparently building a corvette—and it is important to recognise that this naval component is an essential part of what Ukraine lacks in terms of its inherent right to self-defence. For example, there is a significant risk that without this kind of enhancement of its capability, it will lose effective access to the Sea of Azov and some of its coastal territory. That is not an acceptable position for it to be placed in as a sovereign country. It is therefore very important that we do it.
The noble Lord, Lord Foulkes, was correct to suggest that the essence of what President Putin in Russia is aiming to do is reassert a sphere of influence. That does necessarily mean that he wants further acquisition of territory, although we should never forget that there is not a status quo here; there is an illegal annexation of Crimea and separatist control of parts of the Donbass. That is not acceptable. We are in a position where de-escalation, valuable as it is, does not mean that we are able easily to move to what one would regard as an acceptable long-term situation; there is a question mark over what de-escalation really means. There is not a “normal” here, because the territorial integrity of Ukraine has been not only threatened but already fundamentally abridged.
We need to be clear that de-escalation does not mean backing down; it does not mean giving concessions to Russia as a process of trying to return to some kind of status quo. Far from it—what de-escalation means is requiring the de-escalation of Russian threats, because there would be no issue if no further Russian threats were being made. It is interesting in that context that Russia seems to think that the response to this is to make exaggerated demands. They will back down. There are good reasons to think that Russia will not invade Ukraine. The costs and consequences, including domestically inside Russia itself, would be dramatic and unacceptably damaging for President Putin. He may well not want to do it, but he may well want to demonstrate that he has secured concessions and victories as a consequence of it, but we should not give him any of that.
NATO has been very clear about its position. Ukraine has been an enhanced opportunities partner since 2020. The summit in June last year reiterated the Bucharest declaration about the long-term possibility that Ukraine will join NATO. I do not think there is a timetable or prospect of that, but we absolutely should not forgo Ukraine’s rights, or the position that NATO has already taken, in response to threats from Russia. It is very important for us to have a continuing account from Ministers of the Government’s approach, which this debate affords, and that there is no moment, I hope, when we say, “Oh well, Russia has backed down and the troops have moved off. It’s all right then”, because it is not all right: Ukraine does not have access to its own territory and does not have the possibility of asserting its sovereign rights throughout its territory. We should be alongside Ukraine in maintaining pressure to secure that, and this agreement enables us to be a partner to Ukraine in a significant area of its defence capability. I therefore welcome the agreement.
(2 years, 8 months ago)
Lords ChamberMy Lords, as the noble Lord, Lord Browne of Ladyton, said, there are six amendments in this group, five of which have my name. I am grateful to noble Lords who have also put their names to those amendments, including the noble Lords, Lord Browne, Lord Ravensdale and Lord Broers, and the noble Viscount, Lord Stansgate. I am particularly grateful to the noble Lord, Lord Broers, not least because of the impetus I derive from his contributions in our Committee debates—about the centrality of the acquisition, use and deployment of intellectual property to ARIA’s activities being central to its task. If I may be so presumptuous, I am looking forward to hearing some of the noble Lord’s arguments again, if he has the opportunity, because I am sure he will convey the arguments behind a number of my amendments better than I could. If it is not impertinent on my part, let me say that we will miss his counsel and advice when he retires from the House at the end of this week, and I am glad that we have the opportunity of hearing his advice today before that happens.
I draw noble Lords’ attention to one simple fact: at present, nothing at any place in the Bill refers to intellectual property. It refers to property and rights, and I suppose Ministers might say, entirely correctly, that they are within that thought. But intellectual property is the essence of what ARIA will be doing. As the noble Lord, Lord Browne of Ladyton, said, the Minister most helpfully sent us a letter explaining the centrality of intellectual property activities. Ministers wish for ARIA to devise its own strategy for the intellectual property it creates. For that to happen, as the noble Lord, Lord Browne, said, we want the Bill to make it clear to ARIA, in law, what its powers and responsibilities are. The powers it needs in relation to intellectual property need to be specified.
There are other ways in which Ministers have decided to say that ARIA can set conditions for its financial support, but it does not refer to the conditions relating to intellectual property. Ministers can attach conditions to the grants and funding they give to ARIA, but those do not refer to intellectual property; listed in the schedule are the supplementary powers that will be available to ARIA to do various things, including create partnerships and join ventures and companies, but they do not refer to intellectual property.
The purpose of five amendments in this group is to fill those gaps; Amendments 2 and 3 propose that when ARIA is providing financial support to its research projects, among the conditions it can apply are those relating to the acquisition, disposal, retention and assignment of intellectual property. It clearly ought to be able to do those things. Ministers may say that of course it can because it has the necessary powers. So why are other things specified but not this, since it is central to its activity?
When we look, for example, at the supplementary powers in the schedule given to ARIA, various things are mentioned. It can
“borrow money … acquire and dispose of land … accept gifts … form and participate in partnerships … and … form companies;”
but the schedule does not refer to the ability to acquire, retain, assign, license or dispose of intellectual property and related rights. Indeed, even where it refers to acquisition and disposal of land, as we discussed in Committee, it does not refer to land or other property. These, it seems to me, are all the ways we should better define, in legislation, what ARIA’s powers are.
I have left out one amendment. Amendment 8 relates to the Secretary of State providing grant funding to ARIA. Clause 4 says that this may be subject to conditions, and the only condition which is then referenced is the provision under which sums paid by the Secretary of State to ARIA may be repaid with or without payment of interest.
We have not been provided with, is the framework document that will establish the relationship between the Treasury and ARIA as a publicly funded body. That being the case, if we regard something as important enough, should we put it in the legislation so that it has to be addressed in the framework document? When ARIA, as a result of its funding, has rights relating to intellectual property, can it retain the revenue derived from that investment, or does it have to give that revenue back to the Secretary of State? The frame- work document will, I suspect, provide a reference to this; we know this is important.
In my former constituency, the Laboratory of Molecular Biology, which the Medical Research Council provided funding to, had major research projects, including with highly talented individuals who created immense value. They were enabled to participate in those projects and retain some rights in that intellectual property, and the LMB itself retained revenues which then, by way of negotiation, served to enhance and sometimes substitute for the grant funding received from the Government. If ARIA is to have a strategy for the funding it receives from the Government, it needs to know in advance whether it can retain revenue derived from investment. Can it retain it, or does it have to give it back to the Government? All Amendment 8 does, essentially, is require the Government, when they provide such grants, to set out under what circumstances that revenue can be retained by ARIA for further investment in additional projects to meet its functions or whether it has to pay it back to the Government.
That is where I want the most specific assurances from my noble friend that the Government will provide that opportunity to ARIA. In the absence of that, at a later stage, when we reach Clause 4, depending on the nature of the assurances I receive from my noble friend, I may wish to test the opinion of the House. But we will leave that for a later moment.
For the moment, I am very glad to express my support for what the noble Lord, Lord Browne, said. There is a wider issue, of course there is, but we do not really know the extent, for example, to which the National Security and Investment Act is enabling Ministers to intervene and to protect intellectual property in this country. In any case, that is in relation only to national security issues, and the intellectual property that we are concerned about here will inevitably go much wider.
(2 years, 8 months ago)
Lords ChamberAgain, the noble Lord is quite right to applaud the fishermen in the Maldives but, as I said, these things are governed by rules not always set by the WTO. We hope always to take a lead on this but, at present, our tariff rates on tuna do not differentiate between production methods of the same goods, such as different ways of catching tuna.
Does my noble friend not agree that the way forward is for us to enter a bilateral economic partnership agreement with the Maldives? I believe that the Government of the Republic of Maldives would be open to that possibility. Could we initiate such discussions?
My Lords, my noble friend makes another good point. The UK currently has a busy and ambitious FTA negotiation programme with a full pipeline of negotiations. Sadly, we therefore have limited capacity to consider new FTA or EPA negotiations in the immediate term. However, the Maldives is an important trading partner to the UK and officials are exploring pragmatic options to enhance bilateral trade relationships in areas of mutual interest. I am sure that noble Lords will applaud that.
(2 years, 9 months ago)
Grand CommitteeMy Lords, I thank the noble Lord, Lord Browne, for raising this very interesting issue. Without repeating verbatim what I said at Second Reading, one of the highlighted issues in delivering technology into the market in this country is not the invention phase but the scale-up—getting it beyond technology readiness level 7 and then getting it into the market and scaling up.
I discourage the noble Lord from using the phrase “predator” for venture capital. The money has to come from somewhere to deliver that scale-up, and I doubt that the Government will be the provider. The issue and challenge is that the VC industry in the United States is massive compared with what is available in UK-based funds, and thereby comes the lack of centricity about which the noble Baroness, Lady Noakes, spoke. We should very much consider looking for a way for businesses that have an invention to take it to market. To some extent, this amendment is looking at the other end of the problem; it stops stuff happening rather than allowing it to happen in a different way. I am not sure that it is the answer, but its spirit is very important.
There is another unintended consequence I would be concerned about. In the event that an entity could avoid a takeover, by taking money from ARIA it would in essence lock itself away from any commercial activity that could be beneficial to it as a company, the country and ARIA’s intentions. A one-size-fits-all approach—“We give you the money and you can’t do any commercial activity”—is not in the spirit of what this seeks to achieve. Looking at this again, we need to find a way to deliver that scale-up story. That is really the issue facing this country, not the invention bit that somehow this agency is focused on.
My Lords, I very much appreciate that the noble Lord, Lord Browne, has brought forward his Amendment 30 in particular. It is very helpful to our debate and rather complements the discussion we had about ARIA’s ability to exploit the intellectual property it gives rise to and to place the right kind of conditions. We will come back to that on Report; it is important that we do.
I hope the Government can, if not necessarily amend the Bill extensively, certainly make it clear that ARIA, in exercising its functions, should seek not only to promote economic growth and benefit in the United Kingdom but to make sure that—in so far as the public have subscribed through ARIA to the creation of intellectual property—the benefits of that will accrue to ARIA and, potentially, the Government. I would say that they should accrue to ARIA, with the ability to promote follow-on research activity as a result. I am sure the noble Lord is not planning to press his amendment and recognises the risk associated with its structure and the chilling effect it might have on the entities that might otherwise apply for grants, assets or activity.
I will just inject this thought. A number of noble Lords here in Grand Committee were contributors to our discussions on the National Security and Investment Act, and I hope my noble friend the Minister will be able to give us some specific assurances about how Ministers can use National Security and Investment Act powers to secure the protections that the noble Lord, Lord Browne of Ladyton, is looking for.
I worry that there may be gaps, because the National Security and Investment Act has its own criteria and thresholds, and this may relate to activities, projects and assets that do not fit within those criteria—but we none the less want the intellectual property created by ARIA to be protected in some way. So there may be a gap and we need to explore whether there is one and, if there is, how it might be secured: how ARIA, and Ministers through ARIA, can protect the value that might be derived from the intellectual property to which its projects give rise.
My Lords, I rise to give the amendment moved by the noble Lord, Lord Browne, the very strongest support. We have talked around the issue of how we can solve the problem of losing our brilliant companies, because it is stunningly serious—and it is not just Arm and Nvidia. I am very pleased because I wrote to the Government about six months to a year ago to plead that the competitive agency should look at that, and it is at least looking at it now. The company Solexa was taken over by Illumina, having pioneered the successful way to decode DNA, and Illumina’s revenue flowed into the many billions—after the key technology had come entirely from the UK. These things should not have happened.
I ask whether we can add to the requirements on ARIA that incentives should somehow be given to our City, which has an appalling record of missing opportunities to invest in UK industries—creative industries in particular. It is all very well to talk about the scale of American venture capital: that is a very good point, but we can be very selective. Then perhaps we would not need a very big scale to look after companies such as Arm and Solexa—there was Verata before them, and several others that have left here almost with the certainty of being successful, and yet somehow we could not find our own funds to support them.
My Lords, the Bill as introduced to the House added ARIA to the lists of reserved bodies within the three devolution Acts. That approach would have conferred on ARIA the same constitutional status as UKRI, which is the UK’s primary public R&D funder. More importantly, it would also have ensured ARIA’s independence by placing it outside the competence of the devolved legislatures.
Since then, my ministerial colleagues and officials have been in close discussions with all three devolved Administrations throughout the passage of the Bill, on the need for legislative consent Motions to be passed in the Scottish Parliament, the Senedd and the Northern Ireland Assembly. During those discussions, principled objections were raised to the creation of ARIA as a reserved body. As a result, we have worked—as I am sure the Committee would expect us to do—to develop an alternative way of guaranteeing ARIA’s independence, through something called the “agreement on the independence of ARIA”, which all four Administrations of the UK have said that they will abide by, and which will sit beneath the overarching memorandum of understanding on devolution.
I am delighted that the text of this document has now been agreed by all four Administrations of the UK and that we have been able to share it with noble Lords in advance of this discussion. I apologise for the fact that we were not able to provide the opportunity for noble Lords to consider this document at greater length before the Committee. However, I wanted to share it as soon as possible, albeit fairly shortly in advance, rather than not sharing it at all. I am confident that this agreement will allow ARIA’s important characteristics to be protected. On that basis, I am content to remove, through Amendments 37 and 40, the reservations that we originally placed in the Bill.
ARIA will remain a single UK-wide organisation able to find and fund the most exciting projects in all regions and nations of the UK. Through the agreement, all four Administrations of the UK have committed to upholding the important principles of ARIA’s strategic autonomy, operational autonomy and minimal bureaucracy.
My noble friend referred to the agreement having been shared with us, but I am not aware of having seen it or where it was shared with me.
My noble friend also sent a letter to me following last week’s Committee; that was shared only with the noble Lord, Lord Browne of Ladyton. My noble friend’s department has form on not sharing widely with those in Committee when things are circulated. Can he go back to his department to ensure that all active members of the Committee get access to all the information circulated in response to its deliberations?
It was my intention to contribute to this debate briefly. Since the Minister has referred to the agreement, I probably ought to read it and digest it before venturing any additional comments.
I just point out to the Minister that the timing of all this is very odd. As far as I could have seen, and as I understood it in preparing for this debate, as of 9 November the Scottish Minister was not in the position of thinking that there was any agreement with the Government. He wrote to the convener of the Scottish Parliament on 9 November, set out the sequence of events stretching back to March, said that the Scottish Government, like the Welsh Government, were not in a position to agree legislative consent and gave the reasons he would not do so.
These amendments went down on 12 November, I think, so somewhere between 9 and 12 November the Government decided to do this thing. During the course of last week, they must have immediately entered into discussions with the devolved Administrations on the basis that they would give legislative consent. They have made clear all the way through that if it was not reserved, they supported the principle of the Bill and would give legislative consent to it. Now we are presented with this agreement and the consequences.
My noble friend is absolutely right; there are consequences. We had a debate last Wednesday about the role of the Chief Scientific Adviser in relation to the board, and the devolved Administrations have been looking for their chief scientific advisers to have the same status as the United Kingdom Government’s Chief Scientific Adviser. I think that is not what they are looking for now; it clearly would be unhelpful were that to be the case. It would have been helpful to have told us about that in the course of that debate last Wednesday and to have prefigured the fact that we come on to this at a later stage.
At the end of the day, they get money. Unless I am missing something, if you shift something from a reserved matter to a devolved competence, Barnett consequentials flow from that. What are they? How is the budget to be divided? Is it to be divided or is it going to be added to by way of the Barnett consequentials? I think we should be told that. Will that therefore mean that we anticipate that the other devolved Administrations will make grants to ARIA? Does this agreement suggest that there will be a pooled budget with grants made by the Secretary of State but that because of the nature of ARIA’s independence the grants will be in a global sum with few, if any, conditions attached to them and the devolved Administrations are agreeing to that? It begs questions. At the moment, I for one cannot debate the consequences of this set of changes because we do not have the information on which to do it. Even if we maybe let it through on the grounds that it helps to get the legislative consents through, I think we may have to return to some of the consequentials on Report.
My Lords, I am pleased to follow the noble Lord, because he shares some of my concerns. I thank the Minister for communicating the information earlier today. Obviously I will read the actual agreement with great interest, but of course one accepts the noble Lord’s assurance that this agreement stands and will operate effectively.
The noble Lord, Lord Lansley, raises a good point about the previous objections of the devolved Administrations, which now appear to have been withdrawn. At what date can we expect legislative consent Motions to come forward from the devolved Administrations?
I also have a detailed question. In an earlier debate, my noble friend Lord Fox made the point that having a purpose is not at war with the concept of independence for an organisation. I was thinking of that point as I read the paragraph in the Minister’s communication that says the agreement
“allows for the UK Government Chief Scientific Advisor, and scientific advisors or equivalent representatives on behalf of Scotland, Wales and Northern Ireland to jointly communicate to ARIA the scientific challenges relevant to the policy priorities of their respective administrations. In keeping with ARIA’S autonomy, there will be no obligation for it to direct funding towards these issues.”
That worries me slightly. I am not arguing that ARIA should follow the separate views of the four nations, but if all four nations, via their scientific advisers, were to say to ARIA that one of the most important government priorities should be the road to zero carbon—I very much hope they would say that—would the Government really be happy for ARIA to invest in and champion a technology that increases CO2 emissions? There are serious, fundamental points, rather than points of detail, that we still need to take into account on ARIA’s purpose and it working with the grain of government policy—not dotting every “i” and crossing every “t” but working with the grain of public policy.
Finally, I underline the concerns and questions about Barnett consequentials. I will not repeat the point; it is absolutely clear that this will have implications. I look forward to the expressed views of the devolved Administrations and the detail of the agreement when it becomes public. Given the information we have been given today, I am sure it will be possible for us to scrutinise it before Report.
(2 years, 9 months ago)
Grand CommitteeMy Lords, I shall also speak to Amendment 26 in my name. I thank the noble Lords, Lord Fox and Lord Browne, for their support for these amendments. I declare my interest as a director of Peers for the Planet and as an engineer and project director for Atkins.
There was much discussion at Second Reading of DARPA, the agency that has inspired ARIA. DARPA succeeded in changing the world because it took enormous gambles, failing often but with a few projects that succeeded, more than justifying the payouts and creating trillions of dollars in value. This freedom to take risks and to fail is its most important characteristic. That is exemplified by the second project that DARPA funded, Project Orion: a proposal for a manned spacecraft propelled by nuclear explosions. The head of DARPA at the time astutely stated that one of the main challenges was doing that in such a way that the occupants were not killed. While that particular high-risk project did not succeed, for obvious reasons, many others did: the internet, stealth technology and Moderna’s Covid-19 vaccine, to name but a few.
ARIA certainly takes that lesson from DARPA to heart, as described in the Bill: getting bureaucracy out of the way and giving a high-calibre team based on programme managers the freedom to deliver high-risk, high-reward research. But there is another vital lesson to take from DARPA which I referred to on Second Reading: a clear purpose for the organisation. Everything that DARPA does is defined by its aim of ensuring the technological supremacy of the United States armed forces. In 1958, the USA fortuitously hit upon a combination of factors for a research organisation—a clear purpose, freedom to fail, programme-manager-led—that literally changed the world. The US has taken this purpose-oriented approach in all its DARPA derivatives since, including ARPA-E and HSARPA.
To have the longevity and political staying power that DARPA has demonstrated, ARIA needs to have a purpose, and that purpose needs to be closely coupled to the strategic goals of the nation. Foremost among those strategic goals are the UK’s net-zero and environmental goals. Giving ARIA a broad sustainable purpose will allow a flexible approach to research, while at the same time being aligned with the innovation strategy that highlights the need to direct innovation towards
“our top priority societal missions … like the climate and biodiversity crises”.
It will also ensure that projects and proposals that would be contrary to those strategic goals do not progress.
Attempting to reverse engineer DARPA is not a guaranteed route to success, but we need to take the benefit of real-world experience in learning the lessons of why DARPA succeeded and giving ARIA the best chance of success, which is what we all want.
We know how vital R&D is to achieving our net-zero and environmental targets. For example, the International Energy Agency has stated that almost half the emissions reductions required by 2050 are expected to rely on technologies that have not yet reached the market. In this area, what must be done—the key enabler to make net zero politically possible across the world—is to create green energy at a price point that is cheaper than fossil fuels. So, we need nothing less than revolution in net zero and environmental R&D to make our goals possible.
That brings me to the specifics of my Amendments 1 and 26. Amendment 1 is very simple. It states:
“ARIA’s purpose is to fund projects with high transformational potential in pursuit of a sustainable and resilient society, planet and economy.”
This amendment would give ARIA a broad sustainability purpose in line with the points I have made, and in that sense, I believe, would fulfil the need to orient ARIA towards alignment with the most important strategic goal of the nation, and indeed the world.
In crafting the amendment, I have listened carefully to feedback from the Minister during the progress of the Bill in the other place, in that the Government do not wish to unduly constrain ARIA. That is why the amendment is written around a broad sustainability purpose, not a specific net-zero objective or mission. My amendment is not about saying that other streams of research not specifically related to net zero or the environment cannot progress; just that any such streams must not be contrary to, and preferably support, the core strategic challenges. Having a broad purpose and key priorities in setting the direction of the organisation is what the amendment seeks to achieve, while still retaining the flexibility the Government want for ARIA.
My Amendment 26 would ensure that consideration for our climate and environmental goals is embedded within ARIA’s functions. It is modelled on similar government provisions in other legislation, including most recently in the Skills and Post-16 Education Bill. As noble Lords will be aware, the Committee on Climate Change, given the advice that there is a need for a coherent approach to achieving net zero, has made it a priority recommendation for 2021 to ensure that all government policy decisions are compatible with the Government’s climate commitments.
In this sense, the amendment would align this Bill with other amendments the Government have put forward across a range of recent legislation, such as the skills Bill, the Financial Services Act and the Pension Schemes Act. To meet our goals, we need carefully to consider the systems aspects of net zero and ensure that consideration of these goals is embedded into all government policy and legislation where it is practical to do so.
Given how critical R&D is to achieving our goals, I hope the Government will agree that such considerations really need to be present in this Bill in order to align it with their broader strategy. It is not about stopping projects that are not directly related net zero; rather, it is about ensuring that the impacts in the context of compatibility with our climate commitments have been properly considered and factored into decision-making. It is a question of consistency with other legislation.
In summary, consideration of sustainability goals and functions in the Bill has wide support across the academic community, including from Professor Richard Jones, the science policy expert who has been involved in much of the thinking around the formation of ARIA. The amendment provides an excellent opportunity for the Government to maximise the benefit from the £800 million of funding, to demonstrate to international partners at this critical point post COP a new model for climate and net-zero aligned R&D, and to develop the new technologies that we will need to help the UK and the rest of the world achieve our targets. Finally, it would ensure longevity and long-term political support for the organisation, irrespective of the Government of the day, something the whole of Parliament can get behind. I beg to move.
My Lords, I am very pleased to follow the noble Lord, Lord Ravensdale. Two of the amendments in this first group are in my name, Amendments 25 and 27, and I want to speak to Amendment 27 first. It is grouped with Amendment 1 because we start by debating, quite properly, the purposes of ARIA as an agency. What is it here to achieve?
As the noble Lord, Lord Ravensdale, said, we are not seeking to replicate DARPA but to learn from it. DARPA said that its sense of mission was part of the reason for its success. However, that mission in this context was originally
“to prevent and create technological surprise”.
That is an interesting concept—to prevent technological surprise happening to the American Government and, at the same time, to create technological surprise on its own part. One might say that you could substitute “create technological advantage” in the latter case. Interestingly, in more recent years, when DARPA staff were asked what they regarded as their mission, they said it was to be part of “shaping the future”. Indeed, I think that is where our starting point should be. We want ARIA as an agency to be part of shaping the future.
My problem with Amendment 1—actually, I do not have a problem with Amendment 1, because you could stretch the language of sustainability anywhere; that is its advantage but also its problem. I am not sure I understand what the board of ARIA, or its leading members, would interpret as being outside the scope of the sustainability criterion. Does it actually help them? I am not sure that it does. If anything, they might feel that it constrains them towards certain missions. The DARPA example we ought to learn from is that, in practice, it set out to define for itself a range of missions within the organisation.
I note that sitting next to the noble Lord, Lord Ravensdale, is the noble Lord, Lord Broers. I take from his Second Reading speech the thought that the programme managers are at the heart of this system, and the programme managers are chosen in relation to the programmes that DARPA is pursuing. I suspect the same will have to be true for ARIA—that it has to decide, “What are our programmes?” The programmes, in my view, might be mission-led—for example, related to adaptation to climate change—but at the same time they might be technology-led. For example, they might be to pursue AI and the data economy or to look at cell or gene therapy. There is a range of those possibilities. We need to give ARIA, as an organisation, the flexibility to decide the missions that it thinks fulfils its purposes. The missions will develop over time, but the legislation cannot change repeatedly over time, so the legislation should be sufficient to enable ARIA to select the missions it wants for the future.
My Amendment 27 is in this group. A report of July 2016 produced for DARPA about innovation in DARPA isolated four “sources of success”, as it put it, the first of which was the “limited tenure” of the leading executive members
“and the urgency it promotes”—
nobody was appointed for a period exceeding five years. The second was a “sense of mission”, which I was just talking about. The third was “Trust and autonomy”—both giving DARPA autonomy but also within the organisation trusting and giving autonomy to the programme managers in particular. The fourth was:
“Risk-taking and tolerance of failure”,
which of course we are setting out to incorporate into this legislation for ARIA. I add that DARPA interpreted this as meaning “Move fast and take risks”—do not spend a great deal of time trying to assess all the risks, because you could lose the opportunities in the process.
Amendment 27 seeks to replace the language of Clause 3, not because I have any objection to the purposes set out in Clause 3; my objection is to the drafting. It says:
“ARIA may give particular weight”—
I am afraid I do not understand what is meant by “particular weight” or how people who read it subsequently will know what that means in this context—
“to the potential for significant benefits”.
We are all agreed about “significant benefits” and we know what they are because they are in Clause 2(6) above. It then refers to
“research … that carries a high risk of failure.”
It is awfully close to being a piece of legislation that says that ARIA should look for projects that are quite likely to fail because those are likely to give the most significant benefits.
This is not the approach that legislation should take. Legislation should be more deliberate. I thought: what are Ministers actually looking to do in this clause? I agree with the noble Lord, Lord Ravensdale, in his Amendment 1. Ministers—and we—are looking for ARIA to seek to have transformational effects. I think we are agreed about that. That is why Amendment 27 refers to “transformational effects”. I have also included a reference to the possibility of technological advance through
“the development and exploitation of … research”.
I do not think that is mentioned elsewhere but I think it is helpful because, actually, many of the advances that have occurred, including in DARPA’s programmes, were not themselves the object of the mission but were the result of the process of discovery and curiosity and the exploitation of research.
My Lords, I am very glad to follow my noble friend Lady Noakes, who has typically managed to make some penetrating remarks about the prospective corporate governance of ARIA. All the amendments in this group, including mine, are probing amendments; that is the nature of debate at this stage. I hope the Government will take on board some of the things my noble friend has said, think about them carefully and perhaps bring forward their own amendments. What she had to say about the size of the board and the desirability of setting a limit on the number of executive members in order to keep the size of the board as whole under control makes perfect sense, as does the point about committees of the board.
My three amendments in this group also to try to establish how the Government are going to address the membership of ARIA. The first, as my noble friend said, is Amendment 3, which would remove the Chief Scientific Adviser from the board. By the way, this is no reflection on the Chief Scientific Adviser now, in the past or in the future. The point is that if we want ARIA to be independent and autonomy is an essential part of its role, does it make sense for the Chief Scientific Adviser, whoever she or he may be, to be sitting on that board trying to make decisions that are, almost by definition, different from the decisions being made by the rest of the research and innovation landscape? Indeed, the Chief Scientific Adviser is now the head of the new office for science and technology strategy.
If the CSA is leading the strategy for science and technology across the landscape, you might say that surely, they should be there, so that ARIA fits into that strategy. That is precisely the problem: ARIA should not be led in the same strategy as the other parts of the research and innovation landscape. Does it not create an inherent conflict of interest for the Chief Scientific Adviser to be setting the strategy on the one hand and departing from it on another, which is potentially what ARIA will be doing?
Amendments 5 and 7 in my name ask whether the appointment of a chair by the Secretary of State for Business, Energy and Industrial Strategy should be subject to some scrutiny. I have not gone to the step on this because I do not think the criteria are met for this to be an appointment that is subject to an agreement of or a recommendation from a committee of the House of Commons. However, given the existence of the Science and Technology Select Committee and the work it does in the Commons, it would be extremely helpful for it at least to have a hearing and to make some of its own remarks. That would help in the process of giving some democratic accountability to the initiation of the board itself. ARIA is going to autonomous, relatively independent and determined in large measure by its board. The appointments of the chair and the chief executive in the first instance are very significant in this regard.
Amendment 7 is precisely about the appointment of the first chief executive officer. I think the Government are currently searching for both chair and chief executive. The first chief executive officer appointment is not going to be made by the chair, so it is particularly important that there be a degree of objective scrutiny of that appointment. Subsequent appointments will be a matter for the chair and the non-executive members of the board.
I hope that the Government will at least recognise the potential merit of the Science and Technology Committee having a hearing in each case and offering its views.
My Lords, I strongly support what the noble Lord, Lord Lansley, has said regarding his Amendments 5 and 7. One of the amendments lost to the Committee was drafted very much along the same lines, although mine made it. This is a very important issue. The work of the Select Committee in the House of Commons is superb. The former Minister, the noble Lord, Lord Willetts, knows all about it.
This is a very important principle, especially as we are discussing something so new and there is so much about it that we do not yet know. It is essential for the Select Committee to explore these matters with the chair and chief executive designate. I would go further than the noble Lord and make the appointments subject to the agreement of the Select Committee. Indeed, I regard this as an important principle to apply in general across many appointments made by government, many of which could be made subject to the agreement of the appropriate Select Committee.
As to the amendment from the noble Baroness, Lady Noakes, I found myself wondering, especially in regard to Amendment 2, whether her remarks about the ideal size of a board apply to the membership of a Committee stage of a Bill. Are we too large a group of people around this table effectively to conduct our business? I have an open mind on that, and I look forward to hearing what the Minister says in reply.
This group of amendments relates to the balance that we need to strike between ARIA’s independence from and accountability to government, which is a difficult balance to draw. I shall begin with the amendments relating to the composition of ARIA’s board.
Amendment 2 from my noble friend Lady Noakes would limit the executives on ARIA’s board to just the CEO and the CFO. I appreciate the spirit of her amendments, trying to ensure that ARIA is an agile body with a streamlined board, but we have decided that the number of executives should be at least four. We have said that in the interests of representing the different executive functions within the organisations. Similarly, we have imposed a maximum number to try to keep it as efficient as possible.
As the majority of the board members need to be non-executives, in our view, that means that the minimum total number of board members will be nine, to ensure a majority of non-executives, and our expected maximum is 15. We believe that this is very much in line with standard practice. It is not usual for legislation to specify quoracy arrangements, and the Bill’s current provisions mirror some of the procedural arrangements that are in the Higher Education and Research Act. I am also happy to confirm that it is not our intention to offer non-executive members pensions or gratuities—I do not want to get into a definition of gratuities—but it is commonplace to ensure that the provision is available.
The drafting that we have used is also found in the Higher Education and Research Act 2017 for UKRI non-executives under paragraph 7(2) of Schedule 9, and indeed in the Energy Act 2013 for the Office for Nuclear Regulation’s non-executives under paragraph 11(3) of Schedule 7. I therefore do not see that Amendment 8 in the name of my noble friend Lady Noakes is necessary.
I turn to Amendment 3. In our view, the Government’s Chief Scientific Adviser will bring a somewhat unique perspective to the ARIA board in their independent advisory capacity, with awareness of science and technology across government. It is important to emphasise that he or she will be on the board in their capacity as an independent adviser, not in their science and technology strategy capacity. Indeed, it is perfectly possible for there to be two different people in those roles. It is also important to emphasise that they will not do so on a privileged basis. Other non-executives will have been appointed for their expertise, their wide experience and their special knowledge of different facets of the research and development system, and they will equally provide ARIA with independent advice in the best interests of the organisation and its objectives, as the Chief Scientific Adviser will.
Before my noble friend moves off this particular point, he will know, and the Committee will have observed, that in paragraph 18 of Schedule 1 the Government are proposing to take a power to substitute somebody else or some other office for the Chief Scientific Adviser. What my noble friend was just saying gave me the impression that this is something that might be contemplated in circumstances where the two roles that he refers to are held separately.
The noble Lord was chastising the Explanatory Notes earlier for not explaining. On this occasion, I think the Explanatory Notes explain that the purpose of paragraph 11 of Schedule 3 is to exclude ARIA from the application of the Public Contracts Regulations. It does not include them.
I apologise for wasting the Grand Committee’s time. I go back to the simple argument I made in relation to Amendment 16; in today’s global arena, setting an environmental, social and governance strategy is seen as an important benchmark of how a responsible organisation operates. This will be a responsible organisation, so it should therefore have that obligation. I do not understand why it should be excluded from passing that obligation on to people to whom it gives public money.
This group consists entirely of amendments in my name. Very helpfully, they have been grouped together so you do not have to hear from me too often. Helpfully, it also groups together amendments which, from my point of view, are about the way in which ARIA acquires, creates, disposes of, retains and shares intellectual property. That is what we are really on about in this group.
Amendment 18 is the simplest and least interesting of them. It bears on this same area of the Bill and the question of the supplementary powers. In Paragraph 17(2)(b), where the power is given to
“acquire and dispose of land”,
the amendment would add the words “and other property”. I may be told that it is unnecessary, but I am not quite sure that I understand why, and why land is referred to while other property is not. Very often in legislation, “land and other property” is referred to.
Amendment 19 is in the same part of the Bill. It adds a further provision, concerning the powers that ARIA would have in connection with the exercise of its functions, for it to be able to
“acquire and license intellectual property”.
Maybe it has the power to do that, but I am not quite sure why other things are referred to as being supplementary powers and why the acquisition and licensing of intellectual property should not be referenced here. The purpose of my amendments generally is to try to give ARIA as much flexibility as possible in the way in which it acquires and uses its intellectual property. This amendment would say that it has the power to acquire and license, so licensing would be a specific power that it was able to exercise.
Amendment 22 gets us back out of the schedule and on to page 2. This is the point at which, under Clause 2, ARIA may attach conditions to the financial support that it gives—so imagine the relationship between ARIA and researchers, institutes, bodies, companies or whoever. Some conditions are referenced in Clause 2(4) about financial support being repaid, property being restored or information being provided. In Amendment 22 I propose that we want to make it clear that intellectual property forms part of those conditions and that it may be held by ARIA itself under those conditions or shared with the beneficiaries of support, obviously in ways that it chooses. From my point of view, ARIA wants to be able to hold on to intellectual property in some circumstances; it definitely wants to be able to share it with the beneficiaries of support in others.
In this context, the beneficiaries of support could include researchers who themselves become part of ARIA for a time. As I mentioned at Second Reading, one of the most notable characteristics of the Laboratory of Molecular Biology, which used to be in my constituency, was that its researchers were able to generate, from very basic research, some applications that had substantial intellectual property value. For example, Greg Winter was at the Laboratory of Molecular Biology and made discoveries that led to monoclonal antibodies. If I remember correctly, he left LMB to form companies and exploit that, and then subsequently came back to LMB to do more research.
This is the kind of interchange that I suspect we want ARIA to be able to undertake. We want it to be able to bring people in and say, “We are going to share intellectual property with you. You will be able to exploit it and we will be able to exploit it. We can set up whatever arrangements are necessary in order to do this.” Amendment 22 would explicitly allow ARIA to enter into those sorts of arrangements with those who are the beneficiaries of its financial support and indeed those who are working directly for it as short-term researchers. The nature of the programme managers and researchers will generally be fixed term and quite short term.
Amendment 28 is in a slightly different part of the Bill—the part that the noble Lord, Lord Browne, was talking about earlier, concerning grants made by the Secretary of State to ARIA itself and the conditions that may be applied. I am suggesting that there should be conditions, but conditions that in this case allow the Secretary of State, having made grants to ARIA, to allow the agency, having acquired intellectual property and value out of that research, to retain and reinvest it. That is a potentially not insignificant provision. On some occasions, for example, the LMB was generating more by way of revenue back to the Medical Research Council than the Medical Research Council was giving it in grants. DARPA in America, if I understand correctly, was investing in messenger RNA for vaccine production from 2013 and that has led to Moderna, which has valuations in the tens of billions of dollars.
My Lords, may I ask the noble Lord a question, to be absolutely clear about his Amendment 22? Let us say that ARIA comes up with a fantastic invention. Would his amendment enable ARIA to vest the intellectual property of that invention, which might be worth millions, both in itself and in the researcher or researchers who were personally involved in discovering it?
The purpose of Amendment 22 —this is in the part of the Bill about what conditions ARIA might attach to its financial support—is to give ARIA the flexibility to attach whatever conditions it wishes. In some cases, it might give financial support and not seek to retain intellectual property, or it may enter into an arrangement which says that it retains all the intellectual property, or somewhere in between. However, that is for the circumstances of the individual project rather than something mandated in legislation.
My Lords, the more I look at this and listen to the wisdom of the noble Lord, Lord Lansley, and, previously, the noble Baroness, Lady Noakes, the more curious paragraph 17(2) of Schedule 1 becomes, because of both what is in it and what is not. I am prepared to accept the thesis of the noble Lord, Lord Lansley, that “and other property” would add some copper plating to it.
I hark back to the end of the response of the noble Lord, Lord Callanan, at Second Reading, where I popped up and asked a question about property. The Minister was clear that this would include ARIA purchasing pieces of research equipment. Research equipment can run to many tens, if not hundreds, of thousands of pounds—at least as much as property—yet, somehow, that does not appear to be on this list either. There is perhaps work to be done to understand the objective of this list. I am sure that the Minister will say that it is to afford ARIA the amount of freedom that it needs, but it seems to be quite a selective list, and I wonder what it was based on in the first place.
I turn to the other amendments before us and suggest that perhaps the most important is Amendment 28. It is a great shame that, because of a prior appointment, my noble friend Lord Clement-Jones was not able to be here for this section at least because, when it comes to intellectual property, most of us know that he has a strong expertise. I know that he will read very closely the Hansard report of this and, far from marking the homework of the noble Lord, Lord Lansley, I am sure that it will be the Minister’s homework that he will be marking. I hope that we can return to it.
Looking at Amendment 28, it seems eminently sensible to legislate for success, because we want this to succeed. If this succeeds, there should be a flow of revenue coming back into ARIA. We need to understand that this will not then become a cash cow for other parts of BEIS or indeed the Treasury. What this amendment therefore seeks to do—and, I think, would achieve—is to put that ring-fence in place; for that, the noble Lord, Lord Lansley, should be congratulated.
I am grateful to my noble friend, particularly because, as far as I can tell, we are all agreed that ARIA should have the flexibility to do these things. Where we not quite all in the same place yet is that it seems to me that the legislation can make that clear and it would be helpful if it did. Maybe we will come back to it and my noble friend will enlighten me. She seemed to say that in paragraph 17 of Schedule 1 the reference to property encompasses intangible and intellectual property but the word “property” is not there. That is my point. The word “property” needs to be there in order for intangible and intellectual property to be encompassed within it.
There are circumstances—for example, where the Secretary of State makes grants to ARIA and where ARIA provides financial support—where my noble friend seems to be saying that it will have the flexibility to enter into all these agreements, to share its intellectual property, to secure the benefits and retain them and reinvest them but that does not need to be in the Bill. Yet, we have these places where there are little lists of what the conditions might be like or what the provision might include. They may be non-exhaustive lists but the only things that seem to be listed are things that constrain ARIA, rather than making it clear that intellectual property, which is at the heart of its activity, is something where it should absolutely have this kind of flexibility.
I know the Treasury would hate to have it in the Bill that ARIA can retain intellectual property revenues and reinvest them for its purposes but that is exactly why we should put it in the Bill. I think we will return to this issue. I gladly give way to my noble friend.
I reassure my noble friend that paragraph 17 is not an exhaustive list. ARIA can develop and exploit scientific knowledge and this covers it getting a patent, under Clause 2(1)(b). The supplementary powers in paragraph 17(1) of Schedule 1 allow acquisition and disposal of property including intellectual property—
Can I ask my noble friend the Minister to ensure that when she comes back she explains the relationship between paragraph 17 in Schedule 1 and Clause 2, which sets up ARIA’s functions but seems to go beyond functions into things it can do? Paragraph 17 then comes and says again the things it can do. I find that confusing and that confusion may be shared by other noble Lords.
I am grateful to my noble friend. We are going to return to some of these issues and I beg leave to withdraw the amendment.
(2 years, 9 months ago)
Lords ChamberMy Lords, it is a pleasure to be back debating the Professional Qualifications Bill on Report. I thank noble Lords for continuing to meet my officials and me over the Summer Recess, and I think we shall see the fruits of those meetings as we progress through this stage of the Bill today.
May I also take this moment to wish many happy returns to the noble Lord, Lord Kennedy, who I understand is celebrating his birthday today? We all find our pleasures in different ways, but I can think of no better way to celebrate one’s birthday than on Report on this Bill.
I thank noble Lords for their careful consideration of this Bill and for the positive reception accorded to the previous iteration of this amendment in Committee. In particular, I thank my noble friend Lord Lansley for his careful and helpful consideration of the government amendment in Committee. I also thank him for his own amendment to Clause 1.
As I have said on a number of occasions, regulator autonomy is crucial to maintaining our world-class professional standards and high-quality services, and the public’s confidence in them. This includes, of course, making sure that regulators can take into account all relevant factors when considering applications for recognition. Since Committee, my officials and I have engaged extensively with regulators and have taken legal advice on how to best articulate this in Clause 1. There was consensus from Peers in Committee, and regulators throughout our engagement, that the amendment I previously proposed was helpful. However, there was recognition—and I am happy to acknowledge this—that we could make it yet clearer. I am therefore presenting a new amendment that provides three important clarifications.
First, the amendment would add to Clause 1 a new subsection (3A)(a) stating that other conditions, which could, for example, include regulatory criteria required to practise, can be specified in regulations under Clause 1(1). This is regardless of whether those criteria are connected to the specified UK qualifications or experience. These criteria must be satisfied before an individual is treated as if they had the specified UK qualification or experience.
Secondly, the amendment would add to Clause 1 new subsection (3A)(b). This changes how the conditions in Clauses 1(2) and 1(3) are interpreted. It provides legislative assurance that when regulators are obligated to put in place a process to assess individuals under Clause 1, they can assess applicants’ knowledge and skills on whatever basis they consider appropriate.
Thirdly, the new placement of the word “only” in new subsection (3A)(b)(i) makes it clear that a regulator can consider only overseas qualifications or experience, or—this is important—on any other basis it considers appropriate. This could, for example, include both overseas qualifications and experience, and the results of any test or assessment carried out in the UK. To avoid ambiguity in how this amendment is read, an illustrative example is also now included in brackets in proposed new subsection (3A)(b)(ii).
As I set out in Committee, regulators, including the General Medical Council and the Nursing and Midwifery Council, welcomed the previous clarificatory amendment to Clause 1 tabled in my name. I have continued these discussions in recent months and tested this revised amendment with them. They appreciated the clarifications that this amendment provides.
I have also carried out extensive engagement with other regulators. For example, I met with the Bar Council to discuss Clauses 1 and 2. I am happy to reiterate that the power in Clause 1, taken alongside the condition in Clause 2, does not act so as to remove powers from regulators where they already have them. I also met with representatives from the Education Workforce Council to discuss the Bill. I would like to reassure them that it is highly unlikely that the council would be specified in regulations under Clause 1. This is because, quite simply, as I understand it, they already have a global route in place to recognise overseas qualified teachers, underpinned by express legal powers in Welsh legislation, to help meet the demand for the services of their profession.
Clauses 1 and 2 are not intended to affect the existence or scope of any existing powers of a regulator in relation to recognition of overseas qualifications or experience. They are not intended to, and do not, constrain in any way a regulator’s ability to recognise overseas qualifications or experience derived from any other legal source.
Taken as a whole, this means that the amendment provides legislative assurance that the Bill will equip regulators with the tools that they need to make a thorough and rounded assessment and that, in so doing, the UK’s world-class professional standards will be maintained. I thank my noble friend Lord Lansley for his input, and I beg to move.
My Lords, I am most grateful to my noble friend for his introduction to his amendment and for speaking to this group, and for his very kind words about our very constructive discussions. I reciprocate by saying how much I have appreciated the discussions he and I have had and the support of the Bill team in bringing forward a number of amendments on Report which respond directly to the debates that we had in Committee. And government Amendment 1 is exactly such an amendment.
As my noble friend quite rightly said, we had general agreement that there was a need for the national authority, when making regulations under Clause 1, to do so in ways that enabled somebody with overseas qualifications and experience to be brought into the UK profession on the basis of those or other relevant qualifications or experience, or other factors.
The difficulty with the original Amendment 10, if colleagues can remember back to Committee, was the nature of the word “only” in that context, which ran the risk of being interpreted as meaning that it would either be on the basis of overseas qualifications and experience or on the basis of other relevant and appropriate factors. We did not want that to be the case; we wanted what my noble friend has put into Amendment 1, which says at proposed new subsections (3A)(b)(i) and (3A)(b)(ii) that it will be
“on the basis only of the overseas qualifications or overseas experience … or … on such other basis as the specified regulator considers appropriate”.
That is clarified with the words:
“(such as on the basis of the overseas qualifications or overseas experience… together with the results of any test or other assessment given by any person).”
To keep it simple, if, for example, a language requirement needed to be specified, it could be specified as an additional requirement by the regulator and then be combined with the overseas qualification or the overseas experience to give, in total, the appropriate basis on which to be admitted to the UK profession. For my part, I am very happy that the Government have brought forward the amendment in this form.
The purpose of my Amendment 2 is to make it clear that a UK regulator may have requirements for entry to a profession which extend beyond the relevant UK qualifications and experience. So while somebody from overseas might have something that is directly comparable to that qualification or experience, that is not the sum total of the professional requirements to be on many professional registers. Many regulators also examine people’s background, experience and suitability, and they look to fitness to practice requirements. We do not need to dwell on this at length, just to say that there is potentially a gap between qualifications and experience in a formal sense and fitness to practice in its total sense. If regulators need that gap to be filled, Amendment 2 says that they should be able to do so; the conditions should be specified in a way that enables that to happen.
Looking at it, I am content that, as long as the appropriate national authority consults the relevant professional regulators when making regulations, the power none the less exists in Clause 1 to make the condition one that extends beyond qualifications and experience into all the fitness to practice requirements that might be applied by a regulator in this country. That being the case—and we have the benefit of the consultation requirements that we are going to come on to later, which give us further assurance on this—I think we are in a position where the conditions in Clause 1 would be wide enough without the benefit of my Amendment 2.
In my own defence, I tabled Amendment 2 back in early July, so I am slightly defending Amendment 2 in the light of having not, at that point, seen all the amendments that are coming forward, not least from my noble friend. That being the case, I think we can be fairly confident that Clause 1 will be robust enough if need be, so I have no intention of pressing Amendment 2.
My Lords, I too support Amendment 1. I pay tribute to the noble Lord, Lord Lansley, who has urged and pushed, with perhaps a little more oomph than we could have done from this side. We are very grateful for what he has been able to do there.
I think the Minister will be thanked by quite a few people in the next couple of hours, though there may still be one or two people with a “please” in there for him. He knows that, right from the introduction of the Bill, we were worried about the ability of independent regulators to decide who is fit to practice. The words that the noble Lord, Lord Lansley, used are useful ones around being fit to practice and whether the ability of regulators to decide that could be undermined by a government diktat to set up a new system to recognise overseas practitioners wanting to come here, and therefore potentially lowering standards to meet a government view that there is a homegrown shortage in the relevant profession.
That was a concern not just to us but to the users of regulated service providers. Their confidence in professionals stems very much from the high standards and, indeed, from the enforcement that our independent regulators are able to give in the interests of consumers. But the Government have heard these concerns.
When most of us were away during the summer, the Minister spent a lot of time in meetings, and that is reflected in Amendment 1, which confirms that the regulators can apply their chosen standards as to who should practice in this country. The Minister has already referred to some regulators, and we know that the Nursing and Midwifery Council, for example, and others, have signified that they are content with the amendments. It clearly has to be for a regulator both to determine standards and to make a judgment on who has actually achieved those and therefore can be let loose on consumers or users in this country. So on this amendment, it is a “thank you” from me, and it does not require a further “please”.
My Lords, the noble Lord, Lord Foulkes, has drawn attention to the fact that I have not put my name to these amendments, although I have done so to Amendment 10. It was an accident; it was just that at the last moment we were trying to gather together who was to sign up to what. I fully support these amendments, just as I do Amendment 10. In some respects, the case for consultation is stronger in the case of these amendments because they are talking about regulations, not just advice, which is what Amendment 10 is talking about. It is particularly important when one is drafting regulations that complete information is obtained before regulations are finalised.
To pick up a point made by the noble Lord, Lord Bruce of Bennachie, I want to mention that Craighead lies north-east of Cumnock and is a convenient way to get to Bennachie, so we are all part of the same bit of geography.
The noble Lord made the point about Scots law being different from English law, which of course it is. There are two important aspects of Scots law that are very different from English law, apart from land law, and are much more frequently encountered: family law, which is entirely different, and criminal law, the procedures and much of the substance of which are very different too. That is just a reinforcement of the point that the noble Lord was making about appreciating and understanding the differences before the regulations are finalised.
I support entirely the points made by the noble Baroness, Lady McIntosh, in introducing this group. She mentioned a point that I want to pursue, which is the question of whether the Welsh and Scottish Administrations were willing to support a consent Motion. I am a member of the Constitution Committee, and one of the advantages that I have had of doing that—I am waiting for the Minister to listen to this because it is rather important—is that we took the opportunity to go to Wales to meet members of the equivalent committee in the Senedd and to Scotland to meet members of the committee in the Scottish Parliament. One point that came across in both meetings was grave disquiet about the way that the legislative consent process is being handled.
The worst example that was quoted frequently is what happened in the case of the United Kingdom Internal Market Act. I would be grateful if the Minister would say a bit more about the process with which he was involved in consulting with the Welsh and the Scots with a view to obtaining consent to this measure. Among the points made was that they were consulted too late, they were not given enough information to be able to form a view and, when changes were made to the Bill, they were not fully informed about what those changes were in time for them to rethink and reconsider.
I know I am pressing the Minister to a point that he may not be fully prepared for and, if so, perhaps he would be kind enough to write to me to explain what went on. I am speaking on behalf of the Constitution Committee when I say that we would be very interested to know from the perspective of the UK Government about how the process was handled. Did they give the Government enough reasons for not wanting to give consent? Was there enough of a dialogue to enable the disagreement to be flushed out and see whether it could be resolved? These are very important issues that extend well beyond this Bill, and any help that the Minister can give about how the process was handled would be extremely helpful.
My Lords, I hope noble Lords will forgive me, but I want to intervene briefly in the debate. I am Lord Lansley, of Orwell, which is nowhere on the route that has been mentioned; it is not even between the locations in Scotland and Boscobel. You could not even go via Orwell to get to Boscobel, which is where I hope we are going to end up.
I shall say just a couple of things. First, I was interested in what the noble and learned Lord was saying about the Constitution Committee and the legislative consent Motion process, but I have to say, in relation to this Bill, that we completed Committee stage at the end of June and I tabled my amendments in the early part of July. We are now in November. There has been no lack of opportunity for the devolved Administrations to see precisely what the Bill is intended to do, what the remaining issues of controversy might be and what the intended outcome looks like. Frankly, they have had every opportunity to consider a legislative consent Motion and to have passed one, so if they do not then I do not know why not.
Secondly, I am grateful to my noble friend Lady McIntosh. She was looking at why we are consulting with regulators over the powers to make regulations in Clauses 1, 3 and 4—that is in Amendment 13, which I support—but not other clauses. As it happens, I agree with my noble friend, or at least I hope I do, that Clauses 5 and 6, in so far as they are about tidying up the statute book, are not really appropriate for consultation processes; they are essentially just working out the legal statute-book consequences of the Bill.
However, I suddenly realised that there is a regulation-making power in Clause 10 that the Government are not intending to consult upon. I thought, “Hang on a minute, I thought I agreed with the Government because I tabled an amendment at the beginning of July to press the Government on the question of consultation with regulators”, so I looked back at it. Of course I subsequently withdrew it when the Minister tabled his own amendment, but when I looked at it I realised that what I said originally was, and I quote myself:
“Prior to making regulations under this Act, other than those made under sections 5, 6 and 18”—
that is, Clauses 5 and 6 relating to retained EU law and Clause 18 on commencement—
“the appropriate national authority must consult such regulators of regulated professions as appear to the authority to be likely to be affected by the regulations.”
So my amendment would have included consultation on the regulation-making power in Clause 10, which relates to the duty to make information available to overseas regulators. I freely confess that I had not noticed the difference and that gap. While I very much support what the Minister has tabled in Amendment 13—I very much endorse it because it largely achieves what I was hoping for in the amendment that I tabled way back in July—I ask him to explain the process of thinking by which Clause 10 has been left out.
My Lords, I support my noble friend Lord Bruce in his questions. As other noble Lords have indicated, this is an opportunity for the Minister to give a clear position on the situation regarding legislative consent Motions. If the Government are not able to provide an assurance that there will be LCMs during the passage of the Bill, we will be in the uncomfortable position of now having a number of Acts where there have been no LCMs and the Government will have considerable regulation-making power over devolved regulators if the Westminster Government believe that the devolved Government are not acting. This could create those sensitive areas where there are devolved regulators which will then be instructed under regulations to change their procedures for areas where the UK Government will have considered that there is unmet demand but the devolved Administration may not, and there is no vice versa equivalent. Therefore, if there is no LCM process, and the Government will be acting over the top of the devolved Administrations, this will be a potentially problematic area, not least in those professions that are not likely to be exempted under these areas. So transparency will be helpful, if the Minister could give that indication.
Regarding consultation, this will be a consistent theme that the House will return to time and time again. We did so on the Internal Market Bill, and here, and, until the common frameworks are in a state of readiness—and I understand that they are quite far away from such a state—we will have to press the Government on how operations will cover the whole of the UK. Could the Minister give clarity on that?
This group has two amendments, which do indeed relate to Clause 2, in my name and, for Amendment 6, that of the noble Baroness, Lady Hayter of Kentish Town. I am grateful for her support.
Noble Lords who were involved in Committee will recall that this clause, as my noble friend just explained, sets out the conditions under which the power to make regulations in Clause 1 might be used. To quote subsection (2):
“The condition is that it is necessary to make the regulations for the purpose of enabling the demand for the services of the profession … to be met without unreasonable delays or charges.”
Quite understandably, the central question is: what constitutes unmet demand? The discussion in Committee was around what we mean by “unreasonable delays or charges” in this context, and how people are to have sufficient clarity about the circumstances in which the national authorities concerned would deem it necessary to make regulations.
Noble Lords will recall that some of what the Government have outlined in the policy framework that we saw early on, and which has been amplified most recently in the fact sheets issued last week, sets out in some detail the process of thinking about what constitutes unmet demand for a profession. An illustrative scenario set out in the fact sheet enables those who want to explore this to see how it might work in practice. It includes consulting with regulators. The illustrative scenario includes talking to relevant professional bodies. It includes looking at costs and, interestingly, at value for money—the implication being that unreasonable charges are ones that do not constitute value for money. It includes vacancy rates, which are mentioned in Amendment 6, workforce statistics and modelling—again mentioned in Amendment 6—and whether an occupation is on the shortage occupation list.
I take comfort from the fact that the description the Government have given of the process by which a national authority would look at whether there was unmet demand corresponds with a set of factors that we set out in Amendment 6. I am comforted and glad that is the case, because they derive from the Government’s own explanations. It is just that I am afraid that I still do not think, even today, that Clause 2 in the form it is written tells people that that is the case. The guidance, the fact sheet and the policy framework tell people how it is to be done, but it is not all set out in the clause itself. What I set out to do in Amendments 5 and 6 is take out the offending words “unreasonable delays or charges” and incorporate all these factors into Amendment 6—which is, I take it, why the noble Baroness, Lady Hayter, signed it, because she felt that it served the purpose.
How do we proceed? Do we do so simply by taking the Government’s approach? It is not for me to make their argument; they might well say that we do not need to put all this in the Bill, because when people look at what constitutes unmet demand they will be able to look at the fact sheets and the guidance, and all these factors will be there. I am looking for the Government either to say that we do need to make a change, or to be sufficiently clear about the factors that will be brought into account, that they correspond directly to what we have set down in Amendment 6, and that we and other people can rely on them in future and look to what is said today as a basis for understanding how this process is to proceed.
In passing, let us just think for a moment about resting on the question of delays and charges alone. Charges in professional services are not necessarily always the product of the availability of professionals. Sometimes it is very much to do with the scarcity of specialisation within professions. So, trying to deduce that higher charges in a profession are necessarily the consequence of a lack of overseas practitioners is a difficult judgment to make. Many of the professions we are talking about are clinical professions, conducted, in the most part, in the National Health Service, where delays are the product, as we all know, of many factors, not just the availability of professionals, and where charges are very often irrelevant—they do not exist. I am afraid the idea that one can arrive at a conclusion about the necessity to bring overseas professionals into some of these clinical professions on the basis of delays and charges in the NHS is somewhat moonshine.
We need the other factors—workforce modelling, shortages in the occupational list, vacancy rates and all these other issues—to be there. We just need to make absolutely certain that they are there, and I hope that my noble friend on the Front Bench will be able to give us the assurance that we are looking for today to enable me to withdraw Amendment 5 in due course. I beg to move.
My Lords, as the noble Lord, Lord Lansley, said, I have added my name to the second of the amendments in this group. There are two parts to the Bill, as we know. One arises from the trade talks, where the Government may want regulators to talk to their opposite numbers in relevant third countries. The other, which is what we are looking at now, is about enabling—or maybe requesting—regulators to process overseas qualified people where there is deemed to be a shortage here. Unmet “needs” is the word used. That is where I and some of the regulators have some concerns.
In many sectors, such as nursing, it already happens. Structures are in place and there is no need for the Government to intervene. The powers are there, everything is fine at the moment. However, there are two serious questions that need answering. First, is there any danger that consumer interests are at risk if underqualified people practise here because the Government say, “We have not got enough of that particular profession”? I do not need to go into why that is a risk; it is fairly obvious.
Secondly, which the noble Lord, Lord Lansley, covered, is how the shortage is to be defined. He already referred to why high fees are not always an appropriate measure. Sometimes, there are high fees because there is an international shortage; the price is set on an international market and therefore bringing in more of that profession would not solve anything. Or will it be defined by users or consumers who need those services? Amendment 6 sets out some far more objective criteria, which is why I was happy to support it.
Since we are on this bit, I should raise the other concern of the Law Society, which was not raised earlier by the noble Baroness, Lady McIntosh of Pickering. It does not expect to be covered by Clauses 1 and 2, but were they to be applied to it, and should the SRA get involved in such discussions, the Law Society wonders whether this would jeopardise the perceived independence of the legal profession as seen abroad by foreign Bars. Clearly, the consultation is very important, but—I am not saying that it said this because it was high fees—I think it would have a concern if there appeared to be any interference by the Government that would in any way question the independence of the legal regulators, which I know is so important for our international reputation in the world of law. For the moment, the main issue is the definition of where there is unmet need and whether the assurances will cover what we have set out in Amendment 6.
I think, on immigration matters, the Home Office is the primary decision-maker.
I believe that including these factors in the guidance will improve the clarity of decision-making by appropriate national authorities that my noble friend’s amendment seeks to achieve. I am grateful for the considerable thought that he has put into this.
Finally, my noble friend has questioned whether it is appropriate for a national authority to consider whether delays and charges are unreasonable. After consideration over the summer, and I have thought about it a lot, I believe that this is a useful qualifier. Retaining “unreasonable delays or charges” in the unmet demand condition ensures that a national authority considers whether there is consumer detriment—this was a matter that the noble Baroness, Lady Hayter, was concerned about—as a result of the delays and charges to access a profession’s services. I hope that your Lordships can agree that while there is merit in the factors set out in the amendment, it is not desirable to fetter, in a statutory sense, appropriate national authorities’ discretion by enshrining these in the Bill. As I have said, these are sensible factors to take into account, but it is more appropriate to include them in guidance, and I commit to do this. As such, I ask for the amendment to be withdrawn.
My Lords, I am most grateful to my noble friend and to the noble Baroness, Lady Hayter, and other colleagues who participated in this short debate. We do not necessarily need to change the legislation for people to be able to look at our debates and what my noble friend has been able to say from the Dispatch Box by way of clarification and, in due course, to look at the guidance to understand the nature of decisions being made. I hope it will be clear to people in future that delays and charges are an important factor but not the only factor; other things may go to help construct it. If we were starting the drafting process again, we might draft it slightly differently but, given that we are where we are and with the assurances that my noble friend has been able to give, I certainly beg leave to withdraw the amendment.
(2 years, 9 months ago)
Lords ChamberMy Lords, there are three amendments in this group, characterised by the fact that they appear more or less in the same place in the Marshalled List. My Amendment 11, which leads the group, relates to the very specific point, to which we have referred on a number of occasions: whether secondary legislation, and regulations under the Act, should be able themselves to modify primary legislation. The amendment’s intention is of course to restrict that possibility and limit it to subordinate legislation and retained EU legislation. Of course, there is a separate power in relation to the very specific EU retained legislation relating to the recognition of overseas professional qualifications.
I will not make a long argument about this, because the time is late. Ministers will say that there is a lot of private legislation out there relating to these professions, but as it happens, we are amending the primary legislation relating to architects in the Bill. I am not sure to what extent, given all we know and have discovered about the processes of seeking to recognise professional qualifications from overseas, just how often they will need to amend primary legislation and whether it really is impossible to achieve it through a route that exposes the changes to primary legislation to the proper scrutiny of this House.
Because it is linked to this, I reiterate a point I made in Committee. Ministers will acquire a power under the Bill to implement international regulatory recognition agreements and these aspects of international trade agreements by secondary legislation. I hope that the Minister—I know it is his stated intention—would expect new significant trade agreements, wherever they impacted on our legislation, to be the subject of legislation brought forward for this purpose. I do not want us to find that the legislation we see in future relating to trade agreements leaves out the recognition of professional qualifications because it can be achieved through subordinate legislation and we are therefore not able to examine it in the same way as we can other issues relating to a trade agreement, through primary legislation.
I will not talk about the protection of regulator autonomy; that is very much for the noble Baroness, Lady Hayter, who raised these issues in detail in Committee, as did my noble friend Lady Noakes. I am rather grateful to my noble friend Lord Grimstone—as we are in many other respects—for bringing forward government Amendment 12, which would put a pretty cast-iron clause into the Bill to give the regulators the confidence about their future autonomy that they seek.
My Lords, like the noble Lord, Lord Lansley, I welcome Amendment 12, which the Minister will speak to shortly. As has been said, right from the start we worried about the independence of regulators and indeed, as I suggested earlier today, the Law Society still retains a slight frisson of concern there, although I note the Minister’s words. Regulators have been worried about their independent ability to decide who was fit to practise in this country and that that might be undermined by a government diktat to co-operate with another country to accept their professionals or to drop standards in order to meet a government trade objective. As the Minister mentioned earlier, given that I am now looking at trade deals, I think he realises that I will be able to keep a beady eye on that as we go forward, along with the noble Lord, Lord Lansley, who will be looking at that as well.
As I mentioned before, it was also of concern to the users of regulated services in case their trust in professionals, which stems from a regulator keeping to standards and high quality of enforcement, might be in any way in jeopardy. However, the Government have recognised these concerns and have come forward with the very welcome Amendment 12; it must be good because there is even a Lib Dem name attached to it, so we know that this government amendment is well received. Needless to say, of course I still prefer the wording of Amendment 15, which was short and to the point, but I am content not to press it in favour of the Government’s own amendment.
My Lords, I will speak first to the amendment in my name on regulator autonomy and then respond to my noble friend Lord Lansley’s amendment and that of the noble Baroness, Lady Hayter of Kentish Town.
As your Lordships know, I am a great advocate of the autonomy of our regulators. I have no doubt that regulators are best placed to determine who is fit to practise in their professions. The consequence is that to interfere with this could undermine public confidence in those who provide important services.
The Bill absolutely will not undercut regulators’ ability to make determinations about individuals with qualifications, experience or skills from overseas. I have previously given this assurance to your Lordships. However, picking up the point from the noble Lord, Lord Kennedy, I began to realise that the mood of the House was not to rely on assurances in this area. No matter how eloquently I argued the case for assurances, it would not cut the mustard. I absolutely recognise the continued strength of feeling on this issue. That is why I am proposing to make the protection of regulator autonomy clear in the Bill, and to do so specifically for Clauses 1, 3 and 4.
Protecting the autonomy of regulators is particularly relevant to these clauses, because this is where regulations made under the Bill will most directly intersect with regulators’ existing powers. This could be through empowering regulators to assess individuals with overseas qualifications, enabling them to enter into recognition agreements or placing substantive obligations on them.
These clauses also attracted particular interest from the DPRRC, and your Lordships rightly asked for more assurances. The amendment in my name places two conditions on regulations made under Clauses 1, 3 and 4. The first condition is that the regulations cannot remove regulators’ ability to prevent unfit individuals practising a profession. The second is that the regulations cannot have a material adverse effect on the knowledge, skills or experience of individuals practising a regulated profession. To put it simply, regulations cannot lower the required standards for an individual to practise a profession in the UK or, importantly, part of the UK. Taken together, these two conditions will make sure, enshrined in statute, that regulators will retain the final say over who practises in their profession and that the standards of individuals practising professions are maintained.
I also reassure your Lordships that this does not ask regulators to change expectations where they differ between different parts of the UK with good reason. In the case of devolved regulators, such as the General Teaching Council for Scotland, this would mean the requirements of a regulator for part of the UK.
As I said, in framing this amendment I have drawn inspiration from contributions made in this House and from discussions with regulators. Indeed, I am particularly pleased that it has been recognised by the noble Lord, Lord Fox, who has chosen to put his name to this amendment. I hope that this will be the first of many amendments that I bring forward at the Dispatch Box that the noble Lord, Lord Fox, will feels able to do that to going forward.
I turn now to Amendment 11. Of course, I recognise that my noble friend wants safeguards around how powers that could modify primary legislation are used. That is entirely reasonable. But I hope that my explanation of the regulator autonomy amendment in my name provides reassurance that the Government have listened to both noble Lords’ and the DPRRC’s concerns that regulations made under the Bill will be an appropriate use of the powers in Clauses 1, 3 and 4.
In particular, I know that some noble Lords have questioned how regulator autonomy will be safeguarded in trade deals. First, I repeat what I have said previously: in all negotiations, a key concern for the Government is ensuring the autonomy of UK regulators and protecting UK standards. Now, of course, the regulator autonomy amendment in my name ensures, in statute, that this concern is reflected in any regulations made under Clause 3.
I come to the point that my noble friend Lord Lansley made in asking for an assurance that primary legislation will be used to implement any consequences of free trade agreements that affect professional qualifications. I am not able to give that assurance because, by this Bill making it statutory that we cannot undercut the autonomy of UK regulators and diminish UK standards, it is appropriate that secondary legislation will be used to implement those aspects of future trade deals.
This new clause that I am putting forward means that Clause 3 cannot be used, for example, to require the automatic recognition of overseas qualifications—it would not be possible to do that. Before regulations are made, the Government will engage extensively with regulators on trade negotiations. Earlier today, I spoke about how I have formalised that in the new regulated professions advisory forum, which provides regulators with a mechanism to inform UK objectives for trade negotiations and the implementation of commitments that we make in them. If I have learned anything from the Bill, it is that regulators will not shy away from telling the Government when they have concerns about their autonomy.
Should any of your Lordships remain in doubt about whether powers in the Bill should be used to modify primary legislation, I remind the House that the relevant sector-specific legislation can be primary or subordinate legislation. Why we have these differences is lost in the mystery of time, but there is no consistency at all between professions in this matter. For example, the qualification and experience requirements to be a doctor or vet are set out in primary legislation. By contrast, the requirements for pharmacists or social workers are set out in subordinate legislation. That is why regulations made under the Bill may need to amend both primary and subordinate legislation in order to work for all regulated professions.
To give a further example, Clause 4 ensures that regulators can be authorised to enter into regulator recognition agreements with overseas counterparts. Many regulators already have this power; however, not all do. The Architects Registration Board and the General Dental Council are examples of regulators which do not have this power and may therefore benefit from Clause 4. But their powers are set out in primary legislation, so my noble friend’s amendment would prevent them being authorised to enter these agreements under Clause 4 if necessary. To give a further assurance, of course the Government envisage that regulations made under Clause 4 would be made at the request of the regulator. It would seem unfair to prevent them entering into recognition agreements simply because their powers are set out in one type of legislation rather than another. There frankly is no rationale or sensible reason for this difference. I hope that I have provided the House with the necessary reassurance that we have taken seriously the concerns about the use of delegated powers. For this reason, I ask for the amendment to be withdrawn.
I thank the noble Lord, Lord Kennedy, for speaking to Amendment 15, and the noble Baroness, Lady Hayter, for her contribution. My amendment addresses the same core concerns as Amendment 15. Both amendments —I understand that the noble Baroness’s amendment was very well intentioned—ensure that the Bill does not require regulators to allow those whom they determine to be unfit to practise and that the Bill cannot lower professional standards. Amendment 15, however, would further specify the protection of regulators’ autonomy regarding flexibility in assessment practice. The ability of regulators to make assessments as is most appropriate is already accommodated in the amendment in my name to Clause 1.
Finally, Amendment 15 also seeks to prevent anything in the Bill affecting a regulator’s ability to determine to make a regulator recognition agreement. This point is unnecessary. FTAs—such as the UK’s current deal with Canada—often contain frameworks for agreeing regulator recognition agreements. However, there is no obligation on regulators to enter into these agreements in any deal the UK has entered into. I am concerned that specifying this in legislation could unhelpfully suggest that the Government are unsupportive of such agreements. The Government are keen to support regulators agreeing them, where they wish to do so. In view of my own amendment, I formally ask the noble Baroness not to press her own.
My Lords, I thought that my noble friend gave an extremely helpful response to the debate and explanation of the relationship between the Government’s new clause in government Amendment 12 and Clauses 1, 3 and 4. Regulators in particular looking at this debate will, I hope, look at subsections (2) and (3) of the Government’s proposed new clause and share their view with us. If that holds, it provides a central piece of protection for regulators in future, in relation to all the substantive powers made available through the Bill. I am grateful for what the Minister has brought forward, and what he has said this evening. I beg leave to withdraw Amendment 11.
(2 years, 9 months ago)
Lords ChamberMy Lords, I am grateful to my noble friend for his introduction to the Bill. Like the noble Lord, Lord Davies of Brixton, I had a feeling that we were being handed the Dominic Cummings vanity project. When I listened to my noble friend on the Front Bench, I thought otherwise. It survives beyond him and very much has a life of its own. I look forward to us helping to define that life.
I also look forward to further contributions from the noble Viscount, Lord Stansgate. There was much that I think he was planning to say which I look forward to hearing in Committee.
As my noble friend Lord Bethell said, we need to define the essence of what we are dealing with and what we need to get into focus. We certainly need to inject a greater sense of purpose into the legislation. Its purpose is to be different from the rest of the research landscape. There is much we can do in the legislation to make that a little clearer so that it does not duplicate the work of UKRI. There are great projects which are the subject of challenges and missions by UKRI and the research councils. We do not want to see those duplicated.
What is distinctive about ARIA? First, as the noble Viscount, Lord Stansgate, mentioned, it is letting go of the Haldane principle—it is not that politicians should be determining the objectives of ARIA, but it should not be bound and controlled by a process of peer review and evaluation. These are missions to be pursued. The project teams may well want to do this in ways that would not necessarily engage the support of their peers. This is why it carries a high risk of failure in the minds of others. In the course of our debates, we need to focus on the legislation and the minds of those who come to run ARIA.
We also need to think about what we do well and where the gaps are in our research landscape. The noble Lord, Lord Patel, referred to the Laboratory of Molecular Biology. I declare an interest—I was the MP who represented LMB. It has done a remarkable job and continues to do so. In the area of molecular biology, it has a focus. It did not always necessarily have a specific research objective in mind, but it was clear about its ability to bring together the very best people with the very best ideas to examine the issues. As a consequence, there were some fantastic discoveries —on DNA sequencing, monoclonal antibodies and X-ray crystallography of proteins. It was the recipient of 12 Nobel prizes—more than any other single research institute anywhere in the world.
We must not say that we cannot do this. The question is where and in respect of what should we do it in future? The LMB also gives us a sense of some of the ways in which ARIA could do its job, by bringing together the very best people into project teams and giving them a direct stake in the benefits—including the economic and commercial benefits—derived from their discoveries. The LMB has done this to the point where people have left the laboratory, set up businesses and then come back into LMB in order to undertake further original research with the objective of doing the same thing all over again with some new discovery.
We want to examine and make sure that ARIA as an agency can be an active investor and participant, perhaps even the originating promoter of these enterprises. I believe that this is the Government’s intention. Potentially, the best researchers in the world—in a different area from the LMB, perhaps in artificial intelligence or an information society—would come here to work with ARIA because they knew they would benefit, and we would benefit as a consequence. We really need to focus on this and make sure that this potential lies within ARIA’s remit.
When we come to examine the Bill, we need to look at it very carefully. Clause 3 is distinctive in mentioning what constitutes “particular weight”. What constitutes transformational research, although it is not called that? What do we mean by a high risk of failure? Clearly, we do not mean a 100% risk. I suspect we do not mean 99% either. The noble Lord, Lord Davies of Brixton, had it right. We have to understand the risk-reward relationship. We are looking for projects where, if the chances of failure are relatively high, the rewards for success are transparently potentially even greater. This is why we are prepared to take the risk and to go down this path.
As we think about this, I hope that we do not slavishly copy the DARPA US business model. We should bear in mind the models that have been found to be successful in this country, including LMB. We should look, for example, at where we have deficiencies—such as in engineering and IT, where there are not sufficient opportunities. We should also look at the way in which Germany has used research institutes like LMB more widely in order to give that sense of continuing focus and objectives in a number of different areas of research. I look forward to our debates on the Bill.