Autumn Budget 2024

Baroness Bowles of Berkhamsted Excerpts

Monday 11th November 2024 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, the Government are hoping to launch innovative companies into exports, growth and wealth creation. Unfortunately, that will not happen without fair procurement and ending the unfair way in which departments are encouraged to get intellectual property on the cheap. Help may come following the Procurement Act, but if the Government are serious they should revoke the Cabinet Office’s Intellectual Property Rights Guidance Note dated June 2023—although I know that some of it has been going on rather longer.

In the recent science and technology debate, I explained how feasibility studies and early-stage commercialisation contracts require the recipients of grants to give government and its partners free, perpetual, irrevocable and royalty-free licences, together with the right for them to grant sublicences to anyone to use all the information, data, results and conclusions arising from the project. The intention is that all the IP is given to competitors. This appears in contracts for as little as £30,000—for slave labour rates, a grab at IP rights that could be worth a million and a company’s future if they were not expropriated by the Government to give to competitors. Such treatment destroys opportunity to scale and creation of home-grown technology unicorns and decacorns.

On page 14 of the guidance note—which is about procurement, not grants—it encourages departments to retain IP rights and

“gain some future financial benefit from its exploitation”.

That is expropriation for financial gain.

On the same page, the prime directive—if I can call it that—is:

“First and foremost in your thinking should be the needs of the department”.


That is not the public interest, scale-up in the economy or fair dealing, but the department. It does note that:

“The greater the restriction over the IP for the supplier, the higher the cost of the contract will likely be”.


I can think of lots of abuses for that. Who is valuing the IP? How can small companies negotiate? Will the fact that IP is existential to them be taken into account, or are they just quashed because they have no leverage? IP does not neatly divide into background and foreground, so the use and the reach go deep.

Contracts with large organisations press IP requirements into the supply chain. It is becoming obvious why we are unproductive, as we are not commercialising promising R&D. Outside military use, the big excuse is that expropriation of IP is a useful way to avoid subsidy control issues. That is simplistic, and I am very sceptical.

It levels things down in the UK. It undermines innovation and small companies, based on assumptions that cumulative experience, experiments and trials have no value, and everything can be given away to copycat scroungers or insider incumbents who do not carry those costs and can underbid and be fed the IP ripped out of those who have invested in R&D. We need to think harder. What other countries give IP away like this? Do foreign companies have similar terms imposed in their UK contracts? Or is this just Brits on Brits and why contracts go overseas?

What is the NAO analysis of the valuations and additional cost of contracts due to the presence of these clauses? What of investors in innovative companies? At the innovation summit, were foreign investors told to kiss goodbye to any IP, or do they get better treatment? With this IP grab, how can companies be invested in if the route to market needs to be via procurement? Now I understand why the country is failing and why our technology growth companies leave. It is rip-off Britain.