All 4 Baroness Bloomfield of Hinton Waldrist contributions to the Advanced Research and Invention Agency Act 2022

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Tue 2nd Nov 2021
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Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts
Viscount Stansgate Portrait Viscount Stansgate (Lab)
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My Lords, it is a totally unexpected pleasure to follow the Minister as I am the first in the list. It is a great honour to take part in this debate, the first Second Reading in which I have taken part, when I consider the range of other speakers who we are going to hear from this evening, all of whom are so very distinguished. I am also mindful of the fact that the president of the Parliamentary and Scientific Committee is contributing to the debate. As his vice-president, I cannot remember a time when both officeholders were speaking together.

The relationship between the Government and science is subtle, complex and of critical importance to the future of the country. It goes without saying that we have a tremendous record on science in this country, to which I pay tribute, along with everybody else. Our record on Covid vaccine development and distribution is but the latest example. The UK is world class, but it is a competitive world out there and this Bill matters to our future if we are to be the science superpower we all want us to be.

The problem for successive Governments of all kinds is that they have to try to find a balance between giving researchers the freedom to follow their own instincts and curiosity, while at the same time guiding large sums of public money towards wider societal benefits, such as national prosperity and real improvements in the quality of life for their citizens. This balance is not easy to strike. ARIA represents an attempt to strike a new balance by introducing a new organisation with a relatively small staff and a relatively small amount of money with extreme freedom to decide what to do without the existing constraints that apply elsewhere. There is also a difficult and delicate balance to strike between parliamentary oversight and the intellectual freedom which will be necessary to enable ARIA to generate the creativity required to do things differently.

The Minister made it clear in his opening speech that what is being proposed is something very new because we are dealing with high risk and potentially high reward, as he acknowledged. Therefore, the heart of what the Bill is about is not so much an agency as an idea. We are discussing an experiment never before undertaken in the UK, and we are being invited to approve and establish a new participant in what is called the scientific landscape. If we were having a vote today, I would vote for the Bill because this is broadly a good idea and I support additional funding for science, but it raises lots of questions which is going to make the Committee stage very important, and I will return to that in a bit.

First, I hope the House will allow me a brief moment to consider the wider historical context of the proposals that the Government are inviting us to consider today. More than 100 years ago, I think in 1918, Lord Haldane chaired the committee that led to the establishment of the first research council. The Haldane principle that emerged was, in essence, that research should be decided by researchers and not the Government. This has stood the test of time not least because it is convenient for Ministers. It shields them from bearing the direct responsibility for making individual decisions on individual funding.

ARIA takes this a stage further. It will need to offer real scientific independence at programme level. With regard to peer review, standard processes may not always be appropriate for ARIA, as it aims to empower exceptional scientists to start and stop projects quickly. I do not particularly care for military analogies, but when I think about ARIA it makes me wonder whether in times past Barnes Wallis or Alan Turing might have been funded by ARIA. They were both individually brilliant.

Over the decades the structural organisation of science in government has been through endless changes. For about a quarter of a century science was put in with the Department for Education, to create the DES, and, frankly, that is where science languished. I regard the start of the modem era as being when the noble Lord, Lord Waldegrave, launched Realising our Potential in 1993, rearranged the research councils and set up the Office of Science and Technology. Even the current department, BEIS, has over the past 20 or more years been through many changes in emphasis and names from the DTI to the ungainly DIUS, if anybody remembers that, and there may be more name changes on the way. Then there are things such as the Technology Strategy Board, which became Innovate UK until its absorption into UKRI, and even UKRI itself, which was described at the time as the kind of reform that comes along only once in a generation, was formed only in 2018.

Some argue that there is no point in creating ARIA if it is going to be just another entity in the science landscape doing the same things as UKRI but with less money. There is no guaranteed method, and never has been, of successfully identifying commercially successful projects arising out of science research. Too often in this country, as noble Lords will know very well, we have suffered from what is called “the valley of death”—that is, we are good at discovering new things but bad at developing them and exploiting them for commercial success. However, it is hard to legislate for success.

The agency will not automatically succeed. On the contrary, one of its earliest proponents suggested that if ARIA is not failing then it is failing, which is an interesting point. Last weekend, I went to see the latest James Bond film—I recommend it—and it occurred to me that there is a link between those films and this Bill. If the Minister was promoting ARIA as a movie, I can see it now: “ARIA—Licence to Fail.” Whether it does or not is almost impossible to predict because we do not know when a transformational breakthrough will be made, so consistency of funding over the next 10 years will be crucial.

One thought that comes to mind at the start of the many questions I want to put is about the agency’s proposed name. We know that much of the inspiration for ARIA comes from America. When this idea was first mooted by the Government in March 2020, they called it ARPA. They have now chosen the letter “I” for “invention” rather than “P” for “projects”, and that is an interesting distinction worth exploring. “Invention” conveys more of an individual exercise, whereas “projects” suggests a more collaborative approach with many more people involved, so we may discuss in Committee whether we should reconsider the title.

I am grateful to all those organisations that have been in touch to offer advice on ARIA, and I am sure there will be a lot more as we go through Committee. They include the Royal Society of Biology, the Biochemical Society, the Physiological Society, the Campaign for Science and Engineering, the Royal Society of Chemistry and others.

My own list of questions is not exclusive; I am sure that other noble Lords tonight will have many more. But they include the following: what will the relationship be between ARIA and the existing parts of the research landscape, such as UKRI, in particular? What will it be with the new science and technology council, recently established by the Prime Minister, and the new Office for Science and Technology Strategy? What about its relationship with the Council for Science and Technology, currently co-chaired by the chief scientific adviser and the noble Lord, Lord Browne of Madingley?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I gently remind the noble Viscount that there is an advisory speaking time limit of seven minutes. If we go on from the first speech, we get rapidly out of control.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
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It is kind of the noble Baroness to mention it. If I had a pair of scissors, I should have to cut this speech in half, and noble Lords would no doubt be only too grateful. I will do so verbally.

One area where I think we will divide in Committee is that the Government are determined to exempt ARIA from freedom of information. Like other noble Lords, I received a briefing from the Information Commissioner’s Office, which strongly advocates that FoI requests should be allowed. The News Media Association has also taken the trouble to write to us on the same issue. I am sure that is something we will explore.

In drawing my remarks to a close, I will mention the famous questions that DARPA used to identify projects which were worth funding. First, what are you trying to do, and can you explain it in jargon-free language? Secondly, how is it done today, and what are the limits of current practice? Thirdly, what is new in your approach, and why do you think it will be successful? Fourthly, who cares? If you are successful, what difference will it make? Fifthly, what are the risks? Sixthly, how much will it cost? Seventhly, how long will it take?

Finally, the Bill proposes that the Government must wait 10 years before taking any action to close ARIA down, so I look forward to taking part in the Second Reading of the “ARIA (Continuation) (Amendment) (No. 2) Bill 2031”, when we will at least have the experience of 10 years to guide us in our debates.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts
Lord Fox Portrait Lord Fox (LD)
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My Lords, this has been an interesting debate. I fully associate myself with the words of my noble friend Lady Randerson. To put it plainly, we have heard around the Committee a strong feeling that the nations of the United Kingdom have to be fully engaged in this agency in some way, although, to echo the last speaker, the way in which that can be worked through is something we can all be flexible about. I think we all look forward to the debate on Amendments 37 and 40 to hear what the Government's thinking is about those.

On Amendment 9, having some eyes and ears around the regions as well as the nations is essential. Regarding most of the amendments from the noble Baroness, Lady Chapman, she is right to stress that inequality is a central issue and it should be a focus of what we do. However, I would point out that while a lot of people have mentioned London in the context of being rich and well funded, it is not just a matter of region because within a region there can be huge variation. I shall use the example of the London Borough of Tower Hamlets, which I declare I have a home in. There we have some of the richest people and some of the most deprived living a few yards apart.

The noble Lord, Lord Ravensdale, raised the issue of HQ locations. Some noble Lords may know that the European Medicines Agency was due to go into Tower Hamlets but now, for reasons they will all know, it is not. So I will mention that I am supporting the campaign by my colleague in Tower Hamlets, councillor Rabina Khan, to locate ARIA in Tower Hamlets and take the place of the European Medicines Agency. It would be a good development around there and something that I think would be very constructive.

Although I do not fully agree with the wording of the amendments from the noble Baroness, Lady Chapman, I think there is a sense in there that we need to get a hold of. How does this agency engage? How does it not become isolated in the golden triangle or somewhere else? That is the question to which we seek some response from the Minister. That is the issue we will take to Report, whether in amendments such as this or in a new version that seeks to make sure we have engagement across the whole country, national or regional.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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My Lords, I thank the noble Baroness, Lady Randerson, for her remarks on these amendments. Many points were raised that I agree with, including a number from the noble Baroness, Lady Chapman. I will address the different elements of this group in turn.

First, I should be clear that it is absolutely the Government’s intention that ARIA increases prosperity across England, Wales, Scotland and Northern Ireland. This is reflected in ARIA’s existing functions, which require it to have regard to contributing to economic growth or economic benefit in the UK or, for example, improving the quality of life. There is no need for specific additional powers to allow ARIA to operate regionally; the Bill as it stands already allows ARIA to do so. Addressing regional inequality is at the heart of our levelling-up agenda and innovation strategy, driving greater benefits from our R&D system to more places across the UK.

I will now address head-on the proposed location of ARIA, because there is none. No decision on the location of these offices has been taken. As a funder, the contribution the new agency makes will result from its project portfolio and funding decisions; it is not an infrastructure project. ARIA will have only a small physical presence at its headquarters, the location of which will probably not be agreed until the appointment of the chief executive officer. That may have some bearing on where it is to be located. I cannot make the commitment that it will not be based in the London-Cambridge-Oxford arc, but that is not our intention at this stage. We have a completely open mind as to its location.

Amendment 23 would impose a new duty and reporting obligations on ARIA in this regard. It is my view that these system-wide ambitions should not be the statutory responsibility of a small new agency that represents about 1% of UK R&D spending. As we have stated previously, UKRI is the public R&D funder with system-wide responsibilities. Tackling systemic issues, such as the overall regional distribution of R&D funding, falls firmly within the UKRI remit.

ARIA’s purpose is to pursue the most ambitious research and innovation projects, where the benefits are long-term and uncertain, wherever in the country they are located. ARIA should not be subject to the political priorities of the Government of the day, no matter how long-standing or important those priorities might be. I believe that seeking to quantify its economic impact in every region of the UK and submitting that for outside assessment, under the shadow of this statutory obligation, would incentivise exactly the same risk-intolerant approach that we are seeking to liberate ARIA from.

We are in danger of expecting ARIA to spread itself too thinly, against the recommendation of the Royal Society and the House of Commons Science and Technology Committee that it focus on a very limited number of programmes. ARIA cannot be expected to be active in all regions of the UK at once, so I suggest that Amendment 34 is not an appropriate obligation to place on the organisation.

We have spoken at length about the importance of providing ARIA with independence and equipping it to take risks and tolerate failure. A board appointed by the Secretary of State advising ARIA where to direct its funding represents an extraordinary level of political control over ARIA’s activities. It is completely inconsistent with the decisions on project-level spending being taken by technical experts based on a deep understanding of the relevant field and the scientific merits of the proposals.

In a similar vein, Amendment 4 looks to add a representative from each of the devolved Administrations to ARIA’s board. Ministers in Scotland, Wales and Northern Ireland are unanimous in their support for the important principle of ARIA’s independence. We have had close discussions with Ministers and officials at all levels in all three devolved Governments throughout the passage of the Bill.

We have agreed a mechanism for input with the devolved Governments which will be set out in an agreement between the four Administrations of the UK. The agreed text of this MoU will be shared before Report, but it is contingent on the government amendments we will come to discuss later. The final version signed by all parties will be published before Royal Assent. All four Administrations of the UK are committed to upholding the important principles of ARIA’s strategic autonomy, operational autonomy and minimal bureaucracy. Similarly, all are committed to facilitating ARIA’s seamless operation throughout the UK.

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Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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My Lords, these amendments relate to ARIA’s supplementary funding powers—its ability to borrow and form and participate in partnerships and joint ventures. I will begin by clarifying some of the controls and rules that would govern ARIA exercising these powers and I hope I can find enough reassurance for my noble friend Lady Noakes here. She always starts a debate with a great deal of knowledge, so we always pay attention.

ARIA could only ever make use of a financial mechanism, such as borrowing, for the purpose of exercising its functions—to conduct scientific research and exploit and advance scientific knowledge. Any such activity would also be subject to conditions attached to grant funding provided by the Secretary of State under Clause 4. Any borrowing would also meet the stringent requirements and controls of HMT’s Managing Public Money, which sets conditions to ensure value for money. It would be agreed with Her Majesty’s Treasury in advance. This is part of a suite of non-legislative controls that exist on borrowing.

I also highlight that UKRI has the power to borrow. Mirroring that approach, it is reasonable for ARIA to have this full financial toolkit, as it may be appropriate for it to use in certain future circumstances. For example, one possible scenario in which borrowing may be useful would be if ARIA were to own a controlling stake in a subsidiary, which while partially government owned, aims to act with autonomy. Such an entity may want to borrow if purchasing a large capital asset, in order to resolve cash flow issues if an upfront payment were required.

On ARIA’s power to participate in partnerships and joint ventures, using this power ARIA could take an equity stake in a company forming around a new technology. This could provide a clear benefit in cases where the company is creating assets of strategic importance to the UK. On this point, I reassure the noble Lord, Lord Fox, that the National Security and Investment Act does indeed apply to all ARIA’s activities.

In another scenario, ARIA’s taking an equity stake in a company may help to crowd-in private sector interest, bringing in greater funding totals, lowering financial exposure and creating a clear pathway for the commercialisation of a technology. It is fundamental to the design of ARIA that it is able to innovate with different methods of funding high-risk research.

As I have made clear, appropriate checks are in place to ensure the Government can agree the details of any future borrowing activity, and the ability to engage in joint ventures will be an integral feature of ARIA’s full financial toolkit. I therefore see no reason the mechanisms available to ARIA should be limited through the Bill and I ask the noble Baroness to withdraw her amendment.

Baroness Noakes Portrait Baroness Noakes (Con)
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My Lords, I thank all noble Lords who have taken part in the debate. I particularly thank the noble Baroness, Lady Chapman, not only for her kind words but for pointing out the reputational risk in addition to the financial risk. As an accountant, I tend to think of financial risk before anything else.

I should say to the noble Lord, Lord Fox, that I did not say that I was against joint ventures and partnerships; I said that they were fine and that it was just a question of the degree to which, through those mechanisms, additional liabilities could be taken on that would then end up on the public sector balance sheet. Often joint ventures and partnerships are structured in such a way that, through those vehicles, access to additional borrowing of various kinds, or quasi-borrowing, can then end up coming back. Those are the reasons why I was probing in relation to joint ventures and partnerships. I accept that in many types of arrangement they are a natural way to do business in this area.

I thank my noble friend the Minister for what she said. I think she said that conditions could be attached to grant funding—indeed, there is a sentence on that in the Explanatory Notes for whatever clause relates to grant funding, which I cannot remember at the moment—but no other details were provided on how that works. Is that prospective? Is it done every time that money is paid over? I do not understand how it will work. Once ARIA has got hold of the money and does not need any more grant funding at that point in time, what powers do the Government have over its further borrowing after that?

My noble friend also talked about managing public money. I do not have an encyclopaedic knowledge of that, but from memory I could not see how that related to the issue I was really raising—whether you can borrow money without Treasury consent, which is what is implied by the statute, with it ending up on the public balance sheet.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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Perhaps I could come back on that point. Any borrowing will be agreed with HMT in advance and will comply with the terms of managing public money, which requires that public sector organisations may borrow from the private sector only if the transaction delivers better value for money for the Exchequer as a whole.

Baroness Noakes Portrait Baroness Noakes (Con)
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I think I understand what my noble friend is saying. It is then about seeing how managing public money bites on ARIA, which has an unconstrained power to borrow. I would like to think about that further, and perhaps my noble friend could explain alongside that how conditions attaching to grant funding work in practice. Who says what to whom, and when? Perhaps then I can understand the mechanics of that. I am sure that, if the Government have thought this through, she will be able to give me a comprehensive answer on how we are not letting ARIA go out into the world and bust the public sector borrowing requirement—even more than it is already bust. I beg leave to withdraw the amendment.

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Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I turn to a series of amendments that relate to ARIA’s intellectual property arrangements. I am particularly grateful for the contribution of the noble Lord, Lord Broers. With all his wealth of experience, he has added much to the debate.

Turning first to Amendments 18 and 19 from my noble friend, I point out that in exercising its functions, there is already provision for ARIA to acquire and own physical property and intangible property, such as intellectual property. In compliance with its functions, ARIA can own property as it is a statutory corporation with its own legal personality. Paragraph 17(2) of Schedule 1 is not exhaustive, and therefore covers property and intellectual property as a subcategory of property. I hope that my noble friend will understand that I cannot accept this amendment, as it duplicates what is already provided in Clause 2.

Moving on to Amendment 22, I recognise the sentiment of this amendment, and I reassure my noble friend that ARIA will have the freedom to choose whether to retain or share its intellectual property rights. We recognise that ARIA’s intellectual property arrangements will need to be flexible, as they will vary depending on the research area, the amount of involvement of partnering institutions, such as business and academia, and the stage of technological development. ARIA will also have to agree bespoke intellectual property clauses tailored to the specifics of individual programmes and projects, given that commercial value is also likely to vary across ARIA’s portfolio. An amendment here is not necessary, as Clause 2(2)(c) already makes provision for ARIA to make available rights to, or license, its property, including intellectual property. I hope that I have managed to assuage my noble friend’s interest in the flexibility of ARIA’s intellectual property arrangements.

The noble Lord, Lord Fox, asked about the acquisition of pieces of research equipment. ARIA will have the ability to do its own research if needed, it will have scientists and experts working for it and it might sometimes be simpler for ARIA to conduct research directly if needed.

The noble Lord, Lord Browne, also expressed reservations about what ARIA could do. I should point out that ARIA is a statutory corporation. It will only ever act in compliance with its functions and powers and, as a consequence, the powers must, in general, be available.

Turning finally to Amendment 28, which relates to ARIA’s ability to retain income generated through the exploitation of intellectual property, I can assure my noble friend that I firmly agree on the intention behind this amendment. The ability for ARIA to retain income from its activities is subject to ongoing discussions with HM Treasury, and will be agreed to in compliance with the Government’s consolidated budgeting guidance. The detail of arrangements will be finalised as part of the funding delegation letter between BEIS and ARIA. It is therefore not appropriate for this to be placed in legislation. I hope that I have managed to assuage his concerns on those two important amendments, and ask him not to press them.

Lord Fox Portrait Lord Fox (LD)
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On Second Reading, the noble Lord, Lord Callanan, said that “It”—ie ARIA—

“can fund the purchase of a piece of research equipment, which ARIA then owns, and it can loan it out on the condition that it is then returned within a specific timeframe.”—[Official Report, 2/11/21; col.1204.]

So essentially, it becomes an equipment lending library. That is not exactly what the Minister has just said. Are the two things both true, is only one of them true, or what?

Lord Lansley Portrait Lord Lansley (Con)
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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.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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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—

Lord Lansley Portrait Lord Lansley (Con)
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Paragraph 17(1) allows anything.

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Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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We will take this point away and clarify it.

Lord Browne of Ladyton Portrait Lord Browne of Ladyton (Lab)
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I may have misinterpreted something earlier, but I do not think I have misinterpreted this. Paragraph 17(1) allows ARIA to do anything as long as it meets the test. It is judge and jury of its own testing. It allows it to do anything. What I do not understand is why there is a list below it because the list is just confusing. It misleads people into thinking that unless it is on the list ARIA cannot do it. It can do anything, almost, as long as it meets the test.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I think, given the concerns raised, we will take it back and discuss this in the department.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts
Viscount Stansgate Portrait Viscount Stansgate (Lab)
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I found the noble Baroness’s comments in our last session very helpful and I learned a great deal—and now I have learned some more.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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We discussed this with the Table and it was agreed that, because they are the noble Viscount’s amendments, we would allow him to speak. That is acceptable, according to our clerk—but perhaps briefly, if he would not mind.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
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I will be very brief. I take it that we are talking about the climate-change provision, on which I will say only this: on Thursday the House debated the impact of COP 26. The whole House knows that the future of planet earth is not unimportant, and I would have thought that, for a body such as ARIA, there is every reason to suggest, possibly in the Bill, that it should bear some serious regard to the Climate Change Act 2008, under which the Government of the time and succeeding Governments have been operating.

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Viscount Stansgate Portrait Viscount Stansgate (Lab)
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My Lords, I rise briefly to support my noble friends Lady Chapman and Lord Browne. Amendment 31A is in my name. The Government saw fit to put Clause 5 in the Bill for a reason and I am sure the Minister, when he comes to reply, will refer to the reason why it is so important. Similarly, some of us on this side of the Committee feel that it is particularly important that, when those powers are exercised by the Secretary of State, Parliament knows about it at the time—not just in an annual report produced later. Also, with others, I think that there may be further scope to consider whether in this legislation or the National Security and Investment Act, which has already been referred to, there could be ways of furthering the arguments of my noble friend Lord Browne, if the Government are prepared to consider constructive ways forward.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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My Lords, I thank the noble Lord, Lord Browne, for his comments on Amendment 30. I recognise that this is an issue that he cares deeply about, as do other noble Lords, including the noble Lord, Lord Broers. As we heard, the amendment relates to ARIA’s ability to attach conditions to grants to prevent the takeover of an asset or entity, but this Bill is not about the general conditions or, indeed, climate for takeovers of UK private business by US entities; rather, in tabling this amendment, the noble Lord has raised important questions about the benefits derived from public investment in R&D. I appreciate his sentiments about the UK retaining the benefits of ARIA’s funding and, as we discussed on Wednesday, Clause 2(6) gears ARIA towards considering the UK benefits of its activities.

The UK is a world-renowned destination for foreign investment and the UK economy has thrived as a result. We are open to foreign investment; the Government would be very concerned that placing further restrictions in the Bill could deter foreign investment in instances where it would be beneficial and, in some cases, might sit at odds with the wider principles held by the scientific community about the free exchange of ideas and the benefits of international collaboration in research and innovation. Although many noble Lords will share the concerns of the noble Lords, Lord Broers and Lord Fox, that we seek to incentivise the City to invest more funds in fledgling British businesses, as there is indeed considerably more private equity available in the US, that is not an issue that this Bill can solve.

However, I reassure the noble Lord, Lord Browne, that, as set out in the R&D road map published last year, and the innovation strategy published this year, one of the Government’s key ambitions is to become world class at securing the economic and social benefits from research and to safeguard intellectual property. We are pursuing a range of activity to achieve this, and the Government are concerned that adding legislative constraints will impact our position as a free trade champion. ARIA will be expected to collaborate closely within the UK R&D landscape—with Innovate UK, the Catapult Network or private equity partners—to find clear onward paths to take the benefits of its programmes to the next level. This is indeed the challenge rightly identified by the noble Lord, Lord Fox.

Furthermore, the patent box tax incentive will support the retention of intellectual property in the UK by allowing businesses to pay a reduced rate of tax on profits arising from exploiting patents and other qualifying products. Its aim is to encourage the commercialisation of inventions by companies in the UK. I hope that the noble Lord will recognise that we are taking action on this issue outside of legislation. It might just come down to the ideological difference between protectionism and free trade.

On occasions where it is necessary, the National Security and Investment Act 2021 will give the UK Government robust powers to scrutinise and intervene in relevant acquisitions, such as takeovers, to protect national security. This Act will sit alongside the Secretary of State’s power in Clause 5 to give directions where it is necessary or expedient in the interests of national security. I hope that this will answer some of my noble friend Lord Lansley’s remarks.

Regarding Amendment 31 in the name of the noble Baroness, Lady Chapman, the Government’s position is that ARIA must be able to operate with strategic autonomy. This includes making its own decisions on funding research, without influence from government. Clause 5 was designed to ensure that ARIA’s activities could be limited only if they posed a threat to the UK’s national security; for example, ceasing a particular contract or activities with parties from a particular jurisdiction, or ceasing activities on a specific technology. These powers are necessary to ensure that the Government can intervene to protect national security.

I assure the noble Baroness that it is not our intention to use these powers to require ARIA to spend any grants in the interests of national security concerns. Given the autonomy that ARIA will have from Ministers, it would be more appropriate to expect the Government to use other structures if any such need arose. I therefore hope that the noble Baroness will understand the intention behind this clause and that there is no need for this amendment.

Finally, regarding Amendment 31A specifically, given the nature and sensitivity of national security directions, the Secretary of State may be required to respond urgently and privately and it would not be appropriate to publish all directions made under this section. ARIA’s annual report, which this amendment seeks to add to, will align with HMT’s financial reporting manual and the normal standards of reporting. I believe this will ensure the right level of information is provided to allow appropriate parliamentary and public scrutiny of ARIA’s activities, and I am therefore unable to accept this amendment.

Advanced Research and Invention Agency Bill

Baroness Bloomfield of Hinton Waldrist Excerpts
Baroness Chapman of Darlington Portrait Baroness Chapman of Darlington (Lab)
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My Lords, we remain disappointed that the Government failed to accept the Delegated Powers and Regulatory Reform Committee’s recommendation to omit Clause 8, which provides a very broad power to be carried out with minimal parliamentary scrutiny. I am not surprised that the noble Lord, Lord Clement-Jones, has retabled the amendment, although I suspect that the Government will not change their approach this evening.

I am grateful to my noble friends Lord Davies of Brixton and Lord Stansgate for tabling their Amendments 10 and 11, which would ensure that there is better understanding of ARIA’s work as it progresses toward the magic 10-year mark. We agree with the thrust of both those amendments. On Amendment 10, it is important that lessons can be learned and any required changes enacted to ensure that ARIA’s funds are continually put to the best possible use. Amendment 11 would give Parliament a loose oversight role, which feels incredibly important, given its almost complete lack of involvement once the body has been established. I noted that when he was in his place earlier, the Minister described the arrangements that the Government are proposing as “robust”. I gently say that they are anything but.

We hope that the Government see some merit in these proposals. It is not clear that the provision needs to be statutory—I accept that—but can the Minister give a clear commitment about interim or periodic reviews beyond the publication of annual reports, which are the absolute minimum that we should expect, and opportunities for Members of this House and the other place to discuss and debate them?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I want to start by addressing the comments on the Delegated Powers and Regulatory Reform Committee’s report on this Bill. As noble Lords will know, the Government made significant changes to the Bill in Committee to respond to the DPRRC’s recommendations. We have taken its report extremely seriously and shown that we are willing to engage with, and act on, its recommendations.

Regarding the committee’s other recent report, on the delegation of power more generally, we would submit that the changes we have made to this Bill are a clear demonstration of the relationship between the legislature and the Executive operating as it should and of legislative proposals submitted and amended in response to scrutiny. Certainly, what we are proposing for ARIA is a world away from some legislation made in the context of Brexit or the pandemic, which is the focus of the committee’s concern in its report.

We have carefully considered the committee’s recommendation with regard to Clause 8. In our view, the power to dissolve ARIA through regulations made under this clause, which would be omitted by Amendment 9 in the name of noble Lord, Lord Fox, remains an important part of the Bill. We have decided not to accept the recommendation in this instance because there is both a strong policy rationale and a clear precedent for this delegation of power.

As was said in Committee, the power can be exercised only 10 years after the Bill receives Royal Assent, and it is therefore an indication of the Government’s long-term commitment to ARIA. I think there is broad agreement that this patience will be essential if ARIA is to pursue successfully the most ambitious research and innovation. It goes to the heart of what ARIA is about. It must have the opportunity to prove itself before it is judged, and this has been recognised by many R&D stakeholders.

In Committee, my noble friend Lord Callanan referred to the precedent for this delegation of power. Under powers contained in the Public Bodies Act, several bodies established in primary legislation have been dissolved by statutory instrument. Again, if noble Lords will permit me, I will refer to the Administrative Justice and Tribunals Council, which was created by the Tribunals, Courts and Enforcement Act 2007 and was abolished using powers from the Public Bodies Act in 2013. The Public Bodies Act gave Ministers broad delegated powers not just to abolish bodies but also to merge them and change their governance structure and functions. That goes far beyond the power in Clause 8. As we do not know the context in 10 or more years’ time, when this power might be exercised, it is right that it is applicable in a range of scenarios.

On consultation, there is a broad requirement for the Secretary of State to consult those they think appropriate. I suggest that Parliament and Select Committees will be included among these stakeholders, and that the Secretary of State will think it appropriate and necessary to consult them. We do not believe that there is no opportunity for parliamentarians to be involved in those discussions. I hope I have managed to convince noble Lords of the seriousness with which we take the DPPRC’s recommendations, the careful consideration we have given to its view of Clause 8 and the very good reasons I think there are for departing from its recommendation in this instance, and retaining it. I hope noble Lords are convinced and that the noble Lord, Lord Clement-Jones, feels able to withdraw his amendment.

The power in Clause 8 shares with Amendments 10 and 11 a recognition of the experimental nature of ARIA, which has been highlighted by many in the R&D community. These amendments speak to our desire to extract the greatest possible benefit from our £800 million investment in this new agency. We hope those will be both direct benefits from the research and innovation it funds and indirect benefits in terms of learning that can be applied to R&D funding in the UK more generally. I hope that learning will be a dynamic process, and while I sympathise completely with the intent behind these amendments, I hope I can reassure noble Lords that there are already more than adequate arrangements in place for public bodies such as ARIA to be formally reviewed. I do not think anything further is necessary.

Amendment 11 in the name of the noble Viscount, Lord Stansgate, introduces a review of various aspects of ARIA’s operations, including whether it has fulfilled its functions and achieved value for money. Both of these are core considerations of the National Audit Office. The regularity of ARIA’s spending—whether it is in line with its functions—will be part of the annual assessment and certification of ARIA’s accounts, and the NAO will be able to conduct value-for-money examinations of ARIA as per the National Audit Act in the usual way. I hope the noble Viscount will agree that a further review mechanism on these points is not needed.

I turn to the second two elements of this amendment, which deal with the geographical spread of grants and ARIA’s transparency arrangements. I stand by my noble friend’s earlier commitment that ARIA will proactively publish information on its regional funding annually and, in the interests of transparency, make information publicly available on all delivery partners, supported through the full range of its funding mechanisms. I hope this reassures the noble Viscount, Lord Stansgate, that there are already arrangements in place to cover all these important points he has raised and that he does not feel it necessary to press his amendment further.

Amendment 10 is very specific to ARIA. As I have said before, I do not think a one-off formal report is the right way to envisage these lessons being learned. It should be a dynamic process: some important points may become apparent relatively quickly while some advantages or disadvantages of the ARIA model may not emerge even within the six years outlined in this amendment. We have discussed the need for patience, and I believe that means we must resist, as far as possible, the temptation to poke and prod and investigate this new organisation. Clearly, there is a balance to strike here, but it is my contention that the default position must be to let it be and gather these learnings in the most light-touch way we can.

In his amendment, the noble Lord, Lord Davies of Brixton, has allowed an entire year for the review to be conducted and published. That indicates a significant intervention in ARIA’s activities and a degree of close scrutiny that I do not think is a natural companion to risk-taking and high ambition. I note that the noble Baroness, Lady Chapman, also expressed concern about 10 years being a long time without scrutiny. There are a number of avenues for scrutiny—as a public body, ARIA will be subject to tailored reviews of its governance and effectiveness. It will need to bid for new funding in coming years and evidence its effectiveness and impact at that point. I hope the noble Lord will accept my assurances that it is absolutely our intention to learn from ARIA to the benefit of the wider R&D system, and that he will not press his amendment, on the grounds that such a structured and formalised obligation may not be the most appropriate way to do so.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I thank the Minister for her reply, which, I am afraid, amounted to a very polite raspberry to the DPRRC. She used very polite phrases such as “carefully considered”, but the fact is that the Government are intent on ignoring one of the major recommendations of the committee—namely, that the powers in Clause 8 are inappropriate.

The Minister talked about a clear precedent, and I referred to the precedent that the Minister, the noble Lord, Lord Callanan, cited in Committee. But when the Administrative Justice and Tribunals Council was abolished, it was done by the super-affirmative procedure, and the Government have not even offered to use that in this case. This is rather different to that situation; this is effectively abolishing the whole substance of what the Bill is about: ARIA itself. I do not think there could be anything more radical than a Henry VIII power that does that.

I am afraid that I do not really regard what the Minister said as a full response to the DPRRC, and I am certainly not persuaded by the Government’s position. But this is part of a longer, long-running argument between the Executive and Parliament. Clearly, the DPRRC, which I support very strongly, wants much greater parliamentary involvement and oversight in decisions such as this. It believes that, where possible, primary legislation is the appropriate instrument, not secondary legislation. Does the Minister want me to give way?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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Before the noble Lord sits down, perhaps I could come back on the specific point he made about the Public Bodies Act. This Act was developed in the context of widespread public body reform. It was therefore appropriate that the super-affirmative procedure was applied. In the context of much broader powers, it was right that their use was subject to this higher level of parliamentary scrutiny. In contrast, the power in Clause 8 is much more narrowly defined, such that ARIA can only be dissolved—it cannot be merged, or have its functions or governance changed. That is a significant difference between the two.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, that is a significant difference between us. Merging is one thing, but total abolition is another. Perhaps the Minister could have offered the super-affirmative procedure in those circumstances. As I say, this is part of a long-running argument. The Executive are determined to hang on to their Henry VIII powers. I hope that Parliament will continue to press for fewer Henry VIII powers, much greater use of primary legislation, where appropriate, less use of skeleton Bills, and so on. This is a very broad landscape that we are debating. In the meantime, I beg leave to withdraw my amendment.

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Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I have signed and I support Amendments 12, 13 and 14. As someone immersed in issues relating to AI, machine learning and the application of algorithms to decision-making over the years, I, too, support Protect Pure Maths in its campaign to protect pure maths and advance the mathematical sciences in the UK—and these amendments, tabled by the noble and gallant Lord, Lord Craig, reflect that.

The campaign points out that pure maths has been a great British success story, with Alan Turing, Andrew Wiles and Roger Penrose, the Nobel Prize winner—and, of course, more recently Hannah Fry has popularised mathematics. Stephen Hawking was a great exemplar, too. However, despite its value to society, maths does not always receive the funding and support that it warrants. Giving new funding to AI, for instance, risks overlooking the fundamental importance of maths to technology.

As Protect Pure Maths says, the 2004 BEIS guidelines on research and development, updated in 2010, currently limit the definition of science and research and development for tax purposes to the systematic study of the nature and behaviour of the physical and material universe. We should ensure that the ARIA Bill does not make the same mistake, and that the focus and capacity of the Bill’s provisions also explicitly include the mathematical sciences, including pure maths. Maths needs to be explicitly included as a part of scientific knowledge and research, and I very much hope that the Government accept these amendments.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I thank the noble and gallant Lord, Lord Craig of Radley, and the noble Viscount, Lord Hanworth, for tabling Amendments 12 to 14, and those who contributed to the debate. We recognise the fundamental importance of pure and applied maths to other sciences, and as the focus of scientific inquiry in its own right. It is right that we take the opportunity to note that importance here.

The noble and gallant Lord gave a number of potent examples of the importance of mathematical contributions to scientific innovation. Much like, we hope, the projects and advances that will be supported by ARIA, breakthroughs in mathematics can lead to unexpected leaps of progress in separate fields or find application in solving intractable and seemingly unrelated problems in other areas of science. As we just heard from the noble Lord, Lord Clement-Jones, who rightly reminded us, the UK has been home to many outstanding mathematicians of global significance, from Isaac Newton to Andrew Wiles.

However, I emphasise to the noble and gallant Lord, Lord Craig of Radley, and the noble Viscount, Lord Hanworth, that the drafting of the clause that they have sought to amend follows existing powers in the Science and Technology Act 1965, and the Higher Education and Research Act 2017. It is important that it does so. Research into mathematics, including pure mathematics, has been funded in the UK using those powers for over five decades. Maths research is funded by the Engineering and Physical Sciences Research Council—one of the research councils that make up UKRI. The EPSRC spends more than £200 million on this theme, which includes research into maths in areas from number theory to topology and artificial intelligence. It is clear that maths is included in the definition of sciences as currently included in the Bill.

The 2004 guidance referenced by the noble Viscount, Lord Stansgate, predates the Higher Education and Research Act, which makes it clear that maths is included in the definition of science as drafted in the Bill. There is no need to particularise the interpretation through these amendments. Indeed, it would clearly be undesirable to seek to list exhaustively every possible field of scientific inquiry within the Bill. Departing from the existing embedded way these powers to fund research, including in mathematics, are drawn would be unhelpful.

ARIA’s programme managers will set ambitious programme-level goals. Although we do not often expect programme-level goals to lie within pure mathematics, it is right to highlight that ARIA might need to draw on pure and applied maths to achieve those goals, given their importance within the new fields noble Lords highlighted. It is right that ARIA may fund research in those areas.

We are confident that any activities of this nature that ARIA will seek to pursue are covered by its functions, and that the results of scientific research will encompass the results of mathematical inquiry that might be needed by ARIA. ARIA’s supplementary powers provide further reassurance. When exercising its functions, such as funding a programme with a specific scientific objective, ARIA’s supplementary powers allow it to do whatever is necessary in support of that. It is therefore the case that any mathematical endeavours that ARIA needed to draw on for a programme—for example, in support of a particular objective for machine learning—could be funded under its supplementary powers as well.

On that basis, although the noble and gallant Lord and the noble Viscount have raised important points, I hope they will be satisfied that there is no need for their amendments and feel able not to press them.

Lord Craig of Radley Portrait Lord Craig of Radley (CB)
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My Lords, I thank the Minister and all those who spoke to this. Quite clearly, there is a difference of view between the Government and those of us who have spoken to them about how we should treat mathematical sciences in the present age. It is a pity that it has not been possible for the Government to agree to the amendment, but, in view of the late hour, I shall withdraw it.