Protection for Whistleblowing Bill [HL]

Lord Sharkey Excerpts

Friday 2nd December 2022 Lords Chamber

[Lord Sharkey (LD)]

My Lords, I congratulate my noble friend on securing this debate and welcome her Bill. I declare an interest as a vice-chair of the APPG for Whistleblowing.

The Bill addresses important defects in our current whistleblowing system, without being overly prescriptive. These defects are a cause of real damage and distress to individuals and harm to the public interest. They are also a barrier to proper oversight, control and remedial action in both our public and private sectors. Both these sectors contain extremely large, complex and well-funded organisations. This presents not only a striking inequality of arms when it comes to whistleblowing but a real difficulty for outsiders, including regulatory bodies, in spotting wrongdoing within these organisations, either at all or in a timely manner. Whistleblowing by insiders is a vital counter to malfeasance in these large and complex organisations. Unfortunately, however, the protections and incentives needed to make whistleblowing a realistic prospect are largely missing from our UK regime.

Things are very different in the US, as my noble friend Lady Kramer noted, where many states have their own whistleblower regimes, as do some of the main federal agencies. One of the biggest whistleblower programmes belongs to the SEC. The IRS Whistleblower Office’s annual report to Congress for the fiscal year 2022 makes the point:

“Enforcement actions brought using information from meritorious whistleblowers have resulted in orders for more than $6.3 billion in total monetary sanctions, including more than $4.0 billion in disgorgement of ill-gotten gains and interest, of which more than $1.5 billion has been, or is scheduled to be, returned to harmed investors.”


The importance of whistleblowers in the financial services industry was explicitly mentioned by the SEC chair, Gary Gensler, who said:

“The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”


We could not say the same in London, where the protections and awards for whistleblowers are trivial and ineffective by comparison. It is not uncommon, for example, for agreed settlements to be almost entirely eaten up by the whistleblower’s obligation to pay their own costs. The average tribunal award is around £28,000, less than the average UK annual wage and often less than the cost of bringing the action.

The United States typically operates with light regulation and very strict enforcement and penalties, using information from whistleblowers. It is an irony that the UK is about to embark on a lightening of regulations but with no corresponding increase in either incentives or protections for whistleblowers. The Bill provides the mechanism for putting that right in the office of the whistleblower. It does not, of course, contain a proposal for a reward mechanism, but it would allow the office of the whistleblower to create an appropriate regime if Parliament so directed.

So far, I have discussed whistleblowing in the context of the financial services industry, but I will now briefly illustrate examples from the manufacturing industry and public services. A whistleblower was a senior engineer in one of the largest sectors of what remains of our manufacturing industry, working for a major company and dealing with SME supply chains. They had been raising concerns since 2018 about a number of potentially catastrophic defects in safety mechanisms across a range of products produced by the supply chain. The whistleblower’s requests to escalate within the manufacturer the damning simulation test results evidencing catastrophic failure were turned down by senior management. The whistleblower was repeatedly warned not to open that can of worms. On investigation, it was found that the whistleblower’s concerns were valid, and remedial action for the supply chain was requested by the manufacturer. The supply chain SME reacted by threatening the whistleblower with violence and other abuse. Eventually, the manufacturer confirmed that, in dealing with the whistleblower, it had failed to uphold the standards set out in its own staff handbook, acknowledged detriment and proposed his exit from the business with a settlement agreement containing some confidentiality terms. The settlement was not financially generous, but it helped to settle the legal costs incurred. But the whistleblower was out of a job and had been through an extended and brutal period of uncertainty and unpleasantness, with effects on mental health. All of this happened due to the whistleblower reporting defects that, uncorrected, could well have cost lives. Neither the manufacturer nor the supply chain SME suffered any penalty or sanction.

As we have heard, there are also grounds for concern in the public sector. The NHS has had a well-documented series of problems. The noble Lord, Lord Browne, mentioned this, and it was made clear by the “Today” programme’s lead story this morning, which was on the maltreatment of whistleblowers by the University Hospitals Birmingham trust. One reason given by healthcare professionals for not blowing the whistle is fear of retaliation. The recent Ockenden report on the decades-long maternity scandal in Shrewsbury and Telford suggests that, even where the concerns are extremely serious, staff do not speak up for that very reason. As Sir Robert Francis concluded in his mid-Staffordshire public inquiry report nine years ago:

“A greater priority is instinctively given by managers to issues surrounding the behaviour of the complainant, rather than the implications for patient safety raised”.


This focus on the whistleblower and identifying him or her is clear from the recent witch hunt in the West Suffolk NHS Foundation Trust. Consultants were actually asked to provide fingerprints and handwriting specimens in an attempt to identify a whistleblower, which is all too reminiscent of Jes Staley’s outrageous attempt to identify a whistleblower when he was CEO of Barclays. That cost him at least $1 million in penalties, but such penalties are regrettably very rare in the UK. I believe that attempts to identify whistleblowers should be firmly on the list that the office of the whistleblower takes forward.

The office of the whistleblower, as proposed in the Bill, will put an end to these practices and will drive a cultural change that will not only prevent retaliation but incentivise these large organisations to act with integrity. I hope that the Minister will find himself in some sympathy with this timely and important Bill.

Office of the Whistleblower Bill [HL]

Lord Sharkey Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Lord Sharkey (LD)]

It is a pleasure to follow the noble Earl, and I congratulate my noble friend on securing this debate and on the compelling way she has presented her Bill. As she has demonstrated, there is a clear need to reform the way we deal with whistleblowing and I strongly support the reasonable and reasoned approach to reform proposed in this Bill.

As my noble friend Lady Kramer noted, two weeks ago, the Minister for BEIS, Paul Scully, acknowledged the need for review of the whistleblowing framework, but he qualified that by saying:

“we will do that once we have sufficient time to build the necessary evidence of the impact of the most recent reforms”.—[Official Report, Commons, 8/6/21; col. 846.]

The reforms he refers to took place in 2017 and were essentially confined to establishing the publication of annual incident reporting. That was four years ago—plenty of time to assess the impact of these relatively minor new requirements. I hope the Minister will not argue the need for more time or evidence. I hope he recognises both the need for rapid action and the merits of the approach proposed by the Bill.

Whistleblowers make a vital contribution to our national life, but they face enormous difficulties. Two of the most egregious cases are the attempt by Jes Staley, CEO of Barclays, to discover the identity of a whistleblower who made serious allegations against the bank; and the truly appalling treatment of Sally Masterton by Lloyds in connection with her exposure of criminal practices. The details of these cases make for grim reading about the shocking behaviour of very senior people in our banking sector. These and many other cases demonstrate the huge inequality of arms between the blowers and the blown upon. They demonstrate the fact of life-changing retaliation against whistleblowers, the feeble punishments meted out to transgressors or the ability of those responsible to avoid punishment altogether, and the moral and cultural failings of some of our largest institutions.

Abuse of whistleblowers is not confined to the financial sector. There are well-documented cases from within the NHS and the educational sector, for example. We all owe a debt to whistleblowers. They are crucial to uncovering malpractice and even sometimes saving people’s lives, as in the case of the NHS, and always help maintain the ethical standards, transparency, honesty and fair play that we require in all organisations, large and small.

But, as things stand, whistleblowers are horribly exposed. The legal protections available to them are wholly inadequate. There is no single source of help or advice. The Bill would remedy that by creating the office of the whistleblower as that source, with powers to review the whole framework. I hope the Minister will give a sympathetic and constructive response, as he usually does.

Higher Education and Research Bill

Lord Sharkey Excerpts

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

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

My Lords, this is the first Bill that I have brought through the House of Lords to this stage, it having been through Committee, and I have to say that it has been a good experience. Everyone who has contributed can take some credit for having improved it considerably. For me, it is a good example of the value this House can bring to a Bill of this kind. Therefore, I thank all noble Lords who have contributed to improving the Bill.

I should like to start with the governance structures of UKRI and its councils. The issue of co-operation with the charitable sector was debated widely in Committee. Following the compelling argument put forward by a number of noble Lords—including the chair of the Association of Medical Research Charities, the noble Lord, Lord Sharkey—I am pleased to have tabled Amendments 159 and 164, which are also kindly supported by the noble Lord, Lord Mendelsohn.

These amendments will require the Secretary of State also to consider experience of the charitable sector on the equivalent basis to those other criteria in Schedule 9 when making appointments to the UKRI board. In doing so, we are recognising the vital contributions of charities to research in the UK, and ensuring that UKRI will be fully equipped to work effectively with this important sector.

In Committee, the noble Lord, Lord Krebs, and the noble Baroness, Lady Brown, tabled an amendment calling for an executive committee for UKRI. On that occasion, I was able to offer my reassurance that such a committee would be established. Now going a step further, we have tabled Amendments 168 to 171, which will include that in the Bill. Amendment 168 will also further empower the executive committee by enabling it to establish sub-committees, should it deem it necessary.

Also in Committee, a number of noble Lords made the case for increasing the maximum number of ordinary members on each council; including the noble Baroness, Lady Neville-Jones, and the noble Lord, Lord Willis, who drew on their own experiences as research council board members. Having listened to their concerns, we have now tabled Amendment 165 which will increase the maximum number of ordinary council members from nine to 12, thereby allowing individual councils greater flexibility for managing their breadth of activity, while still being mindful of best practice guidance on governance structures and board effectiveness.

While discussing the councils, allow me to introduce Amendment 167. In Committee, the Secretary of State’s power to make one appointment to each of the councils was questioned. This is an important power; in particular, it provides the mechanism to appoint an innovation champion who will sit on both the UKRI board and Innovate UK council. However, it is right that such appointments should be made in consultation with UKRI. This amendment seeks to address concerns by requiring the Secretary of State to consult the UKRI chair before making such an appointment.

Amendments 179 to 181 seek to address the concern, raised in Committee by noble Lords, including the noble Lord, Lord Sharkey, that UKRI may steer away from the pursuit of knowledge for knowledge’s sake, with the Bill being too narrowly focused on economic growth. As I did in Committee, I reassure noble Lords that UKRI will fund the full range of basic and applied research and will create opportunities to make serendipitous discoveries. I have tabled these amendments to make this absolutely clear. Amendment 181 explicitly recognises that the advancement of knowledge is an objective of the research councils. Meanwhile, Amendments 179 and 180 clarify that when councils have regard for economic growth in the UK, this may result in both indirect as well as direct economic benefit.

[Lord Sharkey (LD)]

My Lords, I declare an interest as chair of the Association of Medical Research Charities. Government Amendments 159 and 164 mirror amendments that we put down in Committee. As the Minister said, they rectify the omission of the desirability of experience of the charitable sector in those appointed to UKRI. The charity sector plays a vital role in UK research. Medical charities alone spend £1.4 billion each year, 93% of which goes through our British universities. It is clear that UKRI needed to recognise the importance of engaging with and understanding the sector. Sir John Kingman and the Minister were quick to accept that. These amendments put that acceptance on the face of the Bill. We thank the Minister for that and enthusiastically support the amendments.

Amendment 165 responds to a Committee amendment from my noble friend Lord Willis and me. It increases the maximum number of members of research councils from nine to 12. In Committee, my noble friend Lord Willis confessed that in our proposal to increase membership we had chosen a completely arbitrary number. We simply wanted to tease out from the Minister the reasoning behind their proposal for what was then a truly radical reduction in the size of the councils to nine from an average today of around 15. I am not sure we really got an explanation then in Committee, and I am not sure we have had a rigorously defended explanation today of this new figure of 12. Perhaps it is simply an application of the Goldilocks principle. However, nine seems to us to be too few and much too radical a reduction. Twelve is better than nine and likely to cause less disruption to the working of the councils themselves, and we welcome the amendment.

Amendment 165A is in my name and those of my noble friend Lord Willis of Knaresborough and the noble Lord, Lord Mendelsohn, whose support I am grateful for. As in Committee, the amendment would preserve the position of lay members on the research councils. As I pointed out, at the moment the existing councils have between 10 and 17 members, with an average of 15, of whom four or five are lay members, depending on how one defines “lay”. I am sure the Minister would readily acknowledge the importance of having lay members on the council and the valuable contributions they make, not least in combating magic circle groupthink. Our amendment would simply include in the Bill the requirement that councils have lay members. At a time when the membership size and constitutional and governance arrangements of councils are all being rewritten, we believe it is important that the Bill preserve lay membership. I hope the Minister can confirm the Government’s commitment to lay membership of councils, preferably by accepting Amendment 165A, but I am sure there are other means of doing that.

Finally, we welcome Amendments 179, 180 and 181, which helpfully clarify the areas to which the councils must have regard when exercising their functions. Amendment 181 is particularly useful. Its inclusion avoids imposing on councils what may be seen as exclusively economic obligations.

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[Lord Mackay of Clashfern (Con)]

My Lords, I thank the Minister for Amendment 178. The point was drawn to my attention by the Prospect trade union. I am glad to say that it is also satisfied with this amendment.

[Lord Sharkey]

My Lords, I will speak to Amendments 177A and 178A. Amendment 177A in my name and that of my noble friend Lord Willis of Knaresborough returns to the subject of the ability of research councils to enter into funding partnerships. We discussed this extensively in Committee. We had two key questions. The first was, under UKRI, would there be any additional requirements above those already existing for research councils in forming these partnerships? The second question was, are there circumstances in which such partnerships would require explicit prior approval from UKRI?

The Minister addressed the partnership issue in his letter to us all of 8 February. He acknowledged that the councils currently engage in many partnerships, nationally and internationally, to significant effect. He quoted from a letter that Sir John Kingman had written to me in which he had said:

“The individual councils of UKRI will of course have delegated autonomy and authority to agree these arrangements within their areas of expertise”.


This was helpful but did not quite seem to answer our two questions explicitly.

I explored this further in a subsequent meeting with the Minister and his officials. The essence of our discussion was over the meaning in practice of “delegated autonomy and authority”. In particular, I was anxious to have an explicit answer to the two questions. I thought that it would be helpful for everyone involved, especially the councils, to have maximum clarity. What differences, if any, would the councils see under the new regime when it came to forming partnerships? Amendment 177A allows the Government to answer these questions and to put the matter beyond doubt.

Amendment 178A is in my name and that of my noble friend Lord Willis of Knaresborough, who regrets that he cannot be present today, having urgent family business to attend to. As with Amendment 177A, this amendment looks for clarity and confirmation from the Minister. The context is set out in the letter of 8 February that the noble Lord, Lord Prior, sent to us all. On the penultimate page, the Minister addresses the concerns of the noble and learned Lord, Lord Mackay of Clashfern, over the employment by UKRI of the “relevant specialist employees” to which Clause 9 refers. Government Amendment 178 deals with that matter.

However, in his letter to us, the Minister also referred to the research councils’ role in appointing some relevant specialist staff in line with the principles of autonomy. As he reminded us:

“A package of flexibilities for research council institutes was approved by Her Majesty’s Treasury at the 2015 Budget”.


There were five flexibilities. Two of them are of concern to my noble friend Lord Willis, who is a member of the NERC, and to the CEO of the NERC. These are the exemptions concerning pay and the rollover of commercial income.

The CEO of the NERC has pointed out that neither of these exemptions is in practice available to research councils. They do not form part of the councils’ agreed delegations and there is no mechanism within BEIS for their approval, so they do not happen. For example, to address the 20% pay gap that now exists between NERC institutes and the HEIs requires a multiyear strategy. NERC as an employer must have confidence that this can be adopted without being placed in annual jeopardy by being subject to annual BEIS approval. There is no real sense in which the councils have the freedom to manage payroll within existing budgets as agreed at the 2015 Budget. Neither does the rollover flexibility work. In practice, an offer is made to HMT to consider a rollover of commercial income in January. NERC did this but had received no reply by the second week in March. If no answer is received, the money will be lost. Accordingly, NERC has now committed the relevant expenditure in this year. That means that in reality the rollover flexibility does not work either.

Our amendment addresses this problem. It seeks to impose an obligation to have regard to the agreed package of flexibilities and it seeks to give the Minister an opportunity to explain if the freedoms granted to the research councils in the 2015 Budget will in fact be available after the introduction of UKRI and the reorganisation of the councils.

I acknowledge that we are raising these rather complex matters at a late stage. I apologise for that. I should entirely understand it if the Minister preferred to write to us in response.

[Lord Stevenson of Balmacara]

My Lords, it has been a good debate on a wide range of issues broadly around the work of the research councils. It includes the Government’s important and welcome commitment to uphold the Haldane principle—or Willetts principle—and indeed to enshrine it in the Bill and throughout the instructions that will be given to the various bodies that are to subscribe to it.

We are delighted to be able to sign up to a number of government amendments in this group. We are pleased to see the concession made to the point argued strongly in Committee by the noble and learned Lord, Lord Mackay, about including under specialist employees all technical staff where they are involved in research. That contrasts with the attitude taken in Committee and earlier stages of the Bill, when we attempted to broaden the representational elements relating to the Office for Students—or office for higher education, as it should be called. In particular, we raised the lack of engagement with students, which seems perverse given the Government’s willingness at this stage to include others involved in their discussions.

I shall speak briefly to Amendment 177—the one amendment to which no one has spoken—and seek the Government’s response. We all accept that the strength of our higher education and research institutions will be central to the health of our economy and vitality of our society. As we look towards a post-Brexit world, the role of research in driving innovation, investment and well-being will surely assume greater significance. The capacity of research institutions to act with autonomy and independence will be key to their success.

The Government’s amendments, as I have already said, rightly respond to concerns raised about the need to embed the principle of institutional autonomy more firmly within the Bill. Why, therefore, have the Government not accepted Amendment 177 or brought forward their own version of it?

The Government did respond to arguments about autonomy in relation to the OfS. We welcomed their amendments and signed up to them—they are now in the Bill—such as that on,

“the institutional autonomy of English higher education providers”.

Yet as it stands, UKRI has no such duty, despite the extensive influence and engagement—indirect and direct—that it will have with higher education providers under the new system. We accept that UKRI is not a regulator, but its role is instrumental. It is bound to be engaged in discussions with institutions and bodies that are in a different sector from the institutional autonomy provided by the Secretary of State and the OfS.

That is an asymmetry that I regret. Could the noble Lord, when he comes to respond, at least give us some solace by accepting that, although it may be too late to amend the Bill at this stage, the institutional autonomy issue percolates through to research, is important to the institutions that will be working with the research councils and UKRI post-implementation of the Bill, and is something which the Government should address at some point, whether through memorandums of understanding or by guidance?

Police Intellectual Property Crime Unit

Lord Sharkey Excerpts

Tuesday 28th February 2017 Lords Chamber

[Lord Prior of Brampton]

The noble Lord makes a good point. Of course, certainty is very important, but I draw the House’s attention to the fact that the US Chamber of Commerce rates our IP enforcement as number one in the world, as does the Taylor Wessing global IP index. We are doing a great job, so let us not beat ourselves up too much about this. We need to resolve this uncertainty about funding but we are doing an excellent job.

[Lord Sharkey (LD)]

My Lords, in the second quarter of 2016, 51 million pieces of film and TV content were accessed illegally according to the IPO. The Government have said that they believe that this illegal activity is covered by existing laws. If that is the case, why are there so few successful prosecutions for illegal access?

[Lord Prior of Brampton]

My Lords, I think this issue was debated during consideration of the Digital Economy Bill, and I understand that the noble Lord and others wanted to see it addressed in that Bill. Our feeling is that existing laws are sufficient and that, in any event, this matter could be addressed outside the Bill. I believe that we are putting out a call for evidence on it from users to absolutely nail this point, but I am a little hazy about this area, so I will write to the noble Lord, if I can, after today.

Higher Education and Research Bill

Lord Sharkey Excerpts

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

Moved by

[Lord Sharkey]

472: Schedule 9, page 100, line 32, leave out from “UKRI,” to “experience” in line 33 and insert “ensure that the members have (between them) significant direct”

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[Lord Sharkey (LD)]

My Lords, this amendment proposes a change to the wording of paragraph 2 of Schedule 9. Sub-paragraph (5) of paragraph 2 concerns itself with the experience of those appointed as members of UKRI. The intent of the sub-paragraph is clear: the Government want to make sure that the members of UKRI have experience in the various areas listed in the sub-paragraph. These are all important areas. However, a very important area is missed, which we will come to in the next group of amendments.

I think no one would disagree with the areas of expertise proposed. If UKRI is to do its job properly, it is vital that its members have between them the experience set out in the Bill. The problem is one of drafting. The Bill states:

“The Secretary of State must, in appointing the members of UKRI, have regard to the desirability of the members (between them) having experience of”,


and the Bill goes on to list the areas of experience. This is a very weak formulation and, in reality, imposes no real condition on the Secretary of State. It requires him to,

“have regard to the desirability”,

of UKRI members having the experience listed, but this is not equivalent to saying that they must have it. In fact, it allows for the possibility that a Secretary of State may conclude, no matter how perversely, that it is not desirable for UKRI members to have the listed set of experiences. Or it allows him to conclude that it is desirable that they have only some of these experiences between them. In any case, even if the Secretary of State were to conclude that it was desirable for UKRI members to have some or all of the listed experience, the Bill as drafted does not compel him to do anything about it.

Given the importance of UKRI and what I take to be the intent of paragraph 2(5) of Schedule 9, it would be much better and clearer to impose a duty on the Secretary of State, which my Amendment 472 sets out to do. It would revise paragraph 2(5) so that it read: “The Secretary of State must, in appointing the members of UKRI, ensure that the members have (between them) significant direct experience of … research into science, technology, humanities and new ideas … the development and exploitation of science, technology, new ideas and advancements in humanities, and … industrial, commercial and financial matters and the practice of any profession”.

UKRI’s membership is far too important to be left to the rather vague drafting that imposes no necessary structure on it. If we are to have a provision in the Bill to regulate membership of UKRI, it should have some practical force. Amendment 472 does this. I beg to move.

[Baroness Garden of Frognal]

My Lords, I added my name to my noble friend Lord Fox’s Amendment 473, which is remarkably similar to the one my noble friend Lord Sharkey has just spoken to. I therefore agree with my noble friend Lord Sharkey.

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[Lord Sharkey]

I am grateful to the Minister for that answer. However, if the intent of the description in sub-paragraph (5) is as the Minister described, I do not quite understand why it is not more rigorously written into the Bill. I do not see what possible harm it can do, given that that is in any case the intent, but I do see the benefit of including it, as it then becomes plain that it is a duty on the Secretary of State. Having said that, I beg leave to withdraw.

Amendment 472 withdrawn.

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[Lord Willis of Knaresborough (LD)]

My Lords, I shall also speak to Amendments 478 and 479 in the names of my noble friend Lord Sharkey and the noble Lord, Lord Stevenson of Balmacara, and to Amendment 475, to which the noble Lord, Lord Mendelsohn, has added his name. I also strongly support Amendments 486A and 491 in the names of the noble Lord, Lord Mendelsohn, and my noble friend Lord Sharkey respectively.

Having not had an opportunity to speak at Second Reading as I was attending NERC’s council meeting in Lancaster, I should for the record declare my interests. I am currently a council member for the Natural Environment Research Council, chairman of the NIHR Collaboration for Leadership in Applied Health Research and Care in Yorkshire and Humber, a member of the Court of Birmingham University, a council member of the Foundation for Science and Technology and a consultant for HEE. I am designing a new doctoral training centre for advanced nursing, and, until 2016, I was chair of the Association of Medical Research Charities—hence my interest in these amendments.

In proposing Amendment 474, I should say that I am strongly in favour of the Government’s direction of travel with regard to the establishment of UKRI. I believe that the current system certainly needs change. Frankly, the notion that royal charter status gives freedom and flexibility to the decision-making of the research councils is fanciful. In many cases, decisions are made not by the research councils but by BIS, as it was, and BEIS, as it now is, and more regularly by the Treasury. Even with the support of committed former Ministers such as the noble Lord, Lord Willetts, who is in his place, it has at times been painful for my research council to change the governance structure of our institutes to meet challenging demands or respond to commercial requirements. However, to realise the potential of UKRI and the new research councils to be one of the most innovative and exciting research organisations in the world requires a membership which is able to think and act entrepreneurially in the interests of science, the economy and society.

Few sectors have the pressure to succeed more than the charitable research sector, whose direct interface with its millions of contributors makes it a powerful ally in research but whose support is needed on a regular basis to stay in business. What is more, while much of discovery science requires taxpayers’ money, the charitable sector is a major net contributor. The Association of Medical Research Charities, which covers most of the investors in medical research, contributed an impressive £1.3 billion in 2013, the same amount in 2014 and, in 2015, £1.43 billion. Its contribution over the length of this Parliament will top £6.5 billion.

While the Wellcome Trust, CRUK and the British Heart Foundation are the principal contributors, this sector is unrivalled anywhere in the world in its contribution to medical research. That was emphasised in the Nurse review, when Sir Paul said:

“To facilitate such interactions and to ensure that proper knowledge and understanding of the entire UK research endeavour is maintained, I recommend particular care is paid to ensuring there are strong interactions between the charitable research sector and the Research Councils”.


These amendments simply attempt to put what Sir Paul said in his report into action. They try to deliver “strong interactions” exactly where they should be—not simply on the boards of the research councils but on the board of UKRI itself.

Amendment 474 seeks that experience of the charitable sector should be an equally desirable quantity as industrial, commercial or financial experience, so drawing from the rich experience of the community. Amendment 475 seeks as desirable experience of the,

“funding of research from the charitable sector”.

Given the enormous contributions made by this sector, that seems entirely appropriate. Amendment 478 goes one step further, stating that:

“The Secretary of State must”,


include one person with,

“relevant experience in the charitable research sector”.

Who knows, perhaps even Sir Mark Walport or Jeremy Farrar, the past and current chief executives of the Wellcome Trust, might be thought worthy, or perhaps Peter Gray, the joint managing partner of Wellcome investments, who successfully manages its £20 billion portfolio? Amendment 479 would insert,

“research involving the charitable sector”,

as relevant experience for contributing to UKRI. There will be no shortage of candidates to join UKRI, but the charitable research sector must not be ignored.

[Lord Sharkey]

My Lords, I will speak to Amendments 475 and 491 in this group. I declare an interest as the current chair of the Association of Medical Research Charities. The first four amendments in this group, including Amendment 475, all deal with a rather striking omission from this Bill. As far as I can tell, there is no mention at all in the Bill of the contribution of the charitable sector to UK research and no provision made for the representation of the sector anywhere. My noble friend Lord Willis has made the case forcefully and clearly for rectifying that omission.

My direct experience is with medical research charities. As my noble friend Lord Willis has just pointed out, last year these charities spent over £1.4 billion on medical research, 93% of which was through UK universities. That was a greater amount than was spent by either the MRC or the NIHR. Medical charity funding is vital to our standing and success in medical research. The UK is a world leader in this area, in part because of charitable funding. Medical charities also provide an unrivalled point of contact with patients, and I know the Government will agree that the patient voice should be represented in discussions about research funding and direction.

I acknowledge that the Government are aware of the importance of the charity research sector and have taken important steps to rectify its omission from the Bill. For example, as the Minister said, they have listed “charity research experience” among the desiderata in the recently published recruitment ad for UKRI members. That is a good thing, but it is not a substitute for having charitable research in its proper place in the Bill. That is what Amendment 475 does. It adds a further category—

“funding of research from the charitable sector”—

to the list of experience that, between them, the members of UKRI must have.

Amendment 491 in my name and that of my noble friend Lord Willis and the noble Lord, Lord Stevenson, deals with the research councils, rather than with UKRI. As things stand, research councils can enter into joint funding partnerships with other bodies, and they very frequently do this. For example, I believe that around 40% of current MRC expenditure on research is in such partnerships. I am sure the Minister will agree that such partnerships are not only to be encouraged but are a well-established and vital way of doing business for the research councils. Amendment 491 is, essentially, a probing amendment. Its purpose is to seek reassurance from the Government, on the record, that after UKRI is established, the subsidiary research councils will still be as free as they are now to form such partnerships. I raised this issue in a recent meeting with the chair of UKRI, Sir John Kingman. He kindly wrote to me after the meeting, saying, “Let me also be clear that whilst legal agreements will be with UKRI, I fully recognise the importance, for example, of MRC being able to continue the rich partnerships they enjoy with medical research charities. The individual councils of UKRI will of course have delegated autonomy and authority to agree these arrangements, within their areas of expertise”. Could the Minister specifically endorse Sir John’s view?

I would also be grateful if the Minister could clarify a few further points about partnerships. What changes will research councils and their partners experience in practice as a result of the new UKRI/research council structure? What different experiences would new partners experience? Under what circumstances would a research council’s plans for research partnerships need explicit approval from UKRI before they could be activated? Finally, on a more general level, what spending decisions, if any, would be reserved to UKRI?

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[Lord Sharkey]

Perhaps I might press the Minister for a little more clarity about how these partnerships will take place in future. Will there be any additional requirements in forming these partnerships above those that currently exist? I also asked whether there were any circumstances in which such proposed partnerships would need explicit approval from UKRI. The more general question which relates to that is: what spending decisions, if any, would be reserved to UKRI?

[Lord Prior of Brampton]

My Lords, I think I shall duck that to some extent and write to the noble Lord, if I may. Where money changes hands in these partnerships, there has always been some control from the Secretary of State. Is that not right for a new partnership or a joint venture? Rather than ad lib on this, I had better consult officials and write to the noble Lord.

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[Lord Broers]

My Lords, I have added my name to Amendments 479A and 481A. I understand the concern about the appointment of non-executive chairs because that would introduce an additional level of management, which is clearly undesirable. I feel that the disadvantages of not having a non-executive chair are quite serious, and they have been put extremely well by my noble friends Lady Brown and Lord Mair and by the noble Lord, Lord Willis.

However, one case has not been mentioned. A non-executive chair becomes absolutely critical when the members of a board feel that the CEO is not performing adequately. In that instance, under the current arrangement, presumably it will have to be the UKRI CEO, who would not have watched that person performing as the members of his or her council would have done. Although the UKRI CEO could consult with the members, the UKRI CEO will not be nearly as familiar with the situation as they are. That is, as I say, quite serious.

A possible solution, but perhaps not a satisfactory one, would be to appoint a senior council member in a somewhat similar way to the senior non-executive directors who have become fashionable on corporate boards. That senior member could act as an adviser to the CEO and perhaps chair meetings where there were concerns that the CEO had a serious conflict of interest.

[Lord Sharkey]

My Lords, I shall speak briefly to Amendments 480 and 481 in my name and that of my noble friend Lord Willis. The Bill proposes what is really quite a radical reduction in the size of the existing research councils, which are to have between six and 10 members. The existing councils have between 10 and 17 members, with an average of 15, of whom four or five are lay members. It would be good to hear from the Minister an explanation of the rationale for this reduction in the size of the research councils. In particular, could he point to evidence that their current size has led to inefficiencies or undesirable outcomes? If that is not possible, can he say what the evidence base is for suggesting how a reduction in the membership would actually improve their performance?

I note here in passing that the membership of UKRI itself is proposed to be at least 12 and at most 15. Why is it desirable that the membership of the research councils should be smaller than that of UKRI itself? I am not arguing that it is not, but I would just like to hear the reason the Government think it is.

Of course, it is not just the numbers that matter but the experience and the mix of the members. The practice of having lay members is an important part of our current councils. As I say, each of them has four or five lay members, except for the STFC which has three or four, depending on whether you count people as lay or not. We know from experience in other fields, especially financial services, how important it is to avoid groupthink and to have outsiders challenge established or entrenched views. Can the Minister set out what approach UKRI will take to the appointment of lay members to the research councils? Is it the intention that the present balance should continue?

[Lord Mendelsohn]

My Lords, I rise to speak to Amendments 500B, 507ZB and 507B, but first I will echo the support of these Benches for the amendments proposed. It is important to understand that they share the objective of trying to maximise the effectiveness of UKRI and the councils themselves. I hope that the Minister will be able to provide reasonable assurances on these matters.

The case made by the noble Lord, Lord Sharkey, about their size is very important. In all the evidence we have received there has been no suggestion that their size has been a disadvantage—quite the opposite: it has been a huge advantage. I will be interested to hear the justification for the reduction in number and whether there has been any assessment as to whether this diminishes capacity.

We strongly support the call for independent chairs. That case was extremely well made by the noble Baroness, Lady Brown of Cambridge. Not only do they have a good record of governance thus far, but it has been good governance. The noble Lord, Lord Broers, made the essential point that in any circumstances where there is a board, corporate governance has got to the position it has because a board needs a chair to deal with the issues incumbent on dealing with a chief executive. To eliminate that would be a strongly mistaken act.

It is imperative that councils remain the prestigious and capable institutions that they are. Their role should not be usurped or superseded. They require independence and authority. They should not be the plaything of Ministers. There should be a real, consistent quality to the recruitment of staff, the board and lay people. The Minister should accept that this should be a measure of whether they are still meeting that test. In ensuring that the councils can work effectively, especially in a new framework, they cannot have the notion that they will change quickly and rapidly from their original brief, because that would unsettle these arrangements.

There is real power to the weight of the arguments presented. I hope that the Minister will reflect on them. It reminds me of Confucius’s saying that there are three methods by which we may learn wisdom. The first is by reflection, which is the noblest. The second is by imitation, which is the easiest—I am sure that noble Lords would be more than happy if the Government were to imitate the amendments. But the third is by experience, which is the bitterest. I hope that the Minister will consider that, in this area, the weight of the arguments would help the Government to learn how they would have to rectify this from bitter experience. It is important that governance is absolutely right.

In Amendment 507B we suggest, because there is no real stated role for councils in UKRI, that the executive committee should have a role in the innovation strategy. We think that it is important that those who work on it are specifically defined as having that role.

The amendment that stands out slightly is the one that proposes that the royal charters should remain in existence but not in force. The crucial question is whether this would work or whether leaving them would create its own problems. There are two reasons for keeping them. First, in the circumstances that we are unable to establish that this system will work better, or that the mechanisms will reach a critical mass of working better, it is important that there is some useful architecture to revert to in this area, where we cannot afford to get things wrong. Our current method has not been shown to have any poor performance; it is just that we believe that there are better ways. Secondly, the system should accord a level of prestige.

There is not really a case for removal. The discussions that many noble Lords have had with the Privy Council suggested that the royal charters do not necessarily need to be eliminated. There is an argument to say that having the safety net of keeping them in place would mean that some might use it to undermine the current arrangements. This is not a reasonable concern, although it would be if we did not have such a great degree of unanimity about the importance of trying to move on and reach a new stage.

Motivation is more likely. If this is properly managed by Ministers and incentivised, there would be a quicker desire to remove the stabilisers. There may even be the opportunity for it to be a more liberating mechanism to ensure that other inventive, creative mechanisms are used. It is important that we do not throw everything out and that we do not eliminate things that we do not have to.

Finally, I would be grateful to clarify one element in this section that has not been fully covered: the position of government departments’ areas of research. Some government departments have their own research facilities, such as the Department of Health, the Ministry of Defence, Defra and others. Some would say that these are fiefdoms but I would say that they are just areas that fall under the government departments. How will they relate to the new arrangements? Of course, as we look at the Nurse review, there was consideration that these should be considered under the ambit of Research Councils UK. Indeed, the section that included Innovate UK and HEFCE—not that I wish to reopen the discussion we had earlier—also said that consideration should be given to the place of other government departments’ research within Research Councils UK. I would be very interested to hear how the Government view their interrelationship with this new set up.

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[Lord Broers]

My Lords, I support what the noble Lord, Lord Willetts, said. I have my name on Amendment 495B, to which my noble friend Lady Brown of Cambridge has spoken so excellently. In trying to distinguish what Innovate UK and the research councils do, Clause 90 states:

“arrangements may not be made under this section for the exercise by Innovate UK of UKRI’s function mentioned in section 87(1)(a)”.

When you look at Section 87(1)(a), you will find it states:

“carry out research into science, technology, humanities and new ideas”.

Innovate UK spends 20% or 30% of its resource, I believe, on research that underpins the product programmes it is supporting, which is only appropriate. In Amendments 484A and 484B, which are in this group, the noble and learned Lord, Lord Mackay, suggests adding “basic, applied and strategic” before “research”, which really steps into Innovate UK’s territory. There is no specific amendment on this—I just point out to the Minister that there is concern about the wording. It is misleading if you take it just as it reads.

[Lord Sharkey]

My Lords, I shall speak briefly in support of Amendment 495, which was tabled by my noble friend Lord Willis and to which I have added my name. It amends Clause 89(4). Clause 89 defines the fields of activity for each of the research councils. It goes on, in subsection (4), to say:

“Arrangements under this section must require the Council concerned, when exercising any function to which the arrangements relate, to have regard to the desirability of … contributing to economic growth in the United Kingdom, and … improving quality of life (whether in the United Kingdom or elsewhere)”.


The requirements are a little vague, and the obligation to “have regard to the desirability of” is very weak. But the intent seems to me to be clear, and the two desiderata seem to need a third to achieve any kind of balance. The priority for any research council should surely be to increase the UK’s science and knowledge base. Contributing to economic growth and improving the quality of life are good and desirable objectives, as are the others that we have discussed this afternoon, but they must be subordinate to the objective of improving the science and knowledge base. That must come first.

My noble friend’s amendment adds improving this base to the list of have-regards, so that it is explicitly clear that this is a desirable function of research councils. We need this additional requirement, or something very much like it, to avoid distorting the priorities of research councils and to make clear, in the Bill, what their primary purpose is.

[Lord Blunkett (Lab)]

This will probably be the shortest speech I have made, or ever will make, in the House of Lords. I have a registered interest as a fellow of the Academy of Social Sciences and would like to reinforce what the noble Lord, Lord Willetts, has indicated this afternoon. Given that the Minister is respected as someone who does not just listen and reflect but is actually prepared to give and to come back with solutions, I hope we will be able to reflect on the importance of avoiding doubt and—as the noble Lord, Lord Willetts, has said—misunderstandings simply by getting the wording right and reassuring people that we are approaching this with a comprehensive view for the well-being of our university research community and for the future well-being of the country.