Science and Technology Superpower (Science and Technology Committee Report)

Baroness Brown of Cambridge Excerpts

Wednesday 7th June 2023 Grand Committee

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[Baroness Brown of Cambridge]

That the Grand Committee takes note of the Report from the Science and Technology Committee “Science and technology superpower”: more than a slogan? (1st Report, HL Paper 47).

[Baroness Brown of Cambridge (CB)]

My Lords, I am delighted to introduce for debate this Science and Technology Committee report on the UK as a science and technology superpower. Before I start, I declare my interests as a non-executive director of two UK technology companies: Ceres Power and Frontier IP.

The Science and Technology Committee is highly engaged, and I thank everyone on the committee at the time for their significant contributions to the final report. As ever, huge credit is due to the committee’s staff, our former clerk George Webber, Thomas Hornigold and Cerise Burnett-Stuart, who did so much of the hard work in managing the consultation and the witnesses and in preparing the report.

The committee conducted a broad-ranging inquiry into the UK science and technology ecosystem, centred around the Government’s ambition to make the UK a science superpower by 2030. The inquiry considered: defining UK priorities as part of a science and technology strategy; international aspects of the strategy; the organisational structure of UK science, including the roles of UKRI, government departments, Cabinet sub-committees and the Civil Service; the target to boost R&D spending to 2.4% of GDP; and the role of government as an investor in technology companies.

The inquiry also motivated a shorter follow-up inquiry into the people and skills in STEM, concluding with a letter to Ministers, to which we may also refer in this debate. The inquiry ran from February to July 2022, taking evidence from a wide range of UK and international science policy experts, researchers, public research establishments, universities, private companies, start-ups and technology investors. We also heard from civil servants, chief scientific advisers—including Sir Patrick Vallance and Dame Angela McLean—the chief executive of UKRI, research council heads and Ministers.

I will summarise the key messages from our report. There is a strong consensus that science, technology and innovation have a key role to play in the delivery of economic growth, improved public services and strategic international advantage. It is clear that the UK still has a strong science and technology base to build on. When the report was written, some welcome steps had already been taken, such as setting the 2.4% target, increasing funding for UKRI in government departments and establishing new bodies like the National Science and Technology Council—NSTC—as a sub-committee of the Cabinet, and the Office for Science and Technology Strategy, the OSTS. My apologies in advance for the acronym soup that this speech will now turn into.

However, the report identified many key concerns about the implementation and delivery of a science strategy, many of them familiar—indeed, some we might even call perennial problems. The first that concerned us was that the “science superpower by 2030” slogan was vague and without specific outcomes. We did not know what being a science superpower was intended to feel like. How would it be different?

Although numerous sectoral strategies exist across government, they did not appear to fit into a clear, prioritised plan. The UK cannot be “world-beating” at everything. We urged clarity about which capabilities the UK wanted to develop domestically and where it would collaborate or access. These debates remain lively, with the announcement of £900 million for exascale computing and the debate over a sovereign AI model, for example. Linked to this was the lack of a joined-up international approach. We cannot be a science superpower in isolation—collaboration and scientific openness are fundamental—but the UK remained out of Horizon Europe, and other changes, such as the reduction in ODA support, high visa costs and complex processes, risk the UK’s reputation as a destination that welcomes top international science talent and as a desirable partner in international collaborations.

On increasing complexity and lack of clarity, the committee felt that bodies like the NSTC and OSTS would provide strategic direction, but their interactions with other key bodies like UKRI were unclear and risked adding to bureaucracy. There has been inconsistency and short-term thinking, which is anathema to R&D and developing new sectors of the economy. This is exemplified by the scrapping of the industrial strategy after just a few years.

There is an urgent need for scientists, technologists and engineers, both trained domestically and welcomed from abroad. There is the challenge of scale-up: although some commercialisation metrics, like numbers of start-ups, are improving, it remains challenging for companies to scale up here, especially for those requiring significant capital investment. The recent comment by Oxford PV’s chief technology officer that the UK was the “least attractive” place to build its new factory for perovskite solar cells is a stark reminder that we continue to see companies built on ground-breaking UK science listing overseas.

As regards engaging the private sector and increasing private sector investment in R&D, a range of areas for policy reform have been identified but details of how this will work—indeed, of how the impact will be different from previous approaches—have not been set out, and the Government’s own role as a direct investor in technologies was also unclear. Disappointingly, the private sector witnesses we heard from indicated that the sector did not feel that it had been engaged in the development of the UK’s science and technology strategy. As inflation worsened during the course of the inquiry, concerns were raised about the cost of conducting research and that R&D budgets may be an easy target for departments and Governments looking to make short-term savings at the expense of long-term prosperity.

Our report made a number of recommendations. We asked for further definition of the science and technology strategy, with specific outcomes in priority areas and, critically, with an implementation plan so that it was about not just targets but action. We wanted the science and technology superpower ambition to be defined with specific metrics and suggested an independent body to monitor progress. We wanted more Cabinet-level agreement and focus on science and technology policy with a Science Minister in Cabinet and more frequent meetings of the NSTC. We wanted to see the UK rebuild its reputation as an international partner, starting with association with Horizon Europe.

We asked for clarity on how the Government were going to use their range of policy levers to stimulate private investment in R&D and more detail how tax credits, pension fund rules and procurement would need to change to support private investment in R&D and especially in scale-up companies. We suggested that reforms could be driven by specific taskforces in each area, headed by clearly accountable individuals, providing a single point of contact for stakeholder engagement. Our people and skills letter focused on four key areas: the domestic skills gap; the precariousness of research careers; visa policy for scientists and STEM workers; and our ability to retain and recruit science teachers and educators.

A great deal has happened in the year or so since this report was published, some of which I am sure some of us would rather forget. However, more positively, this includes the establishment of the Department for Science, Innovation and Technology and the appointment of a Secretary of State for Science. This is a positive development in giving science and technology a strong voice in Cabinet, but cross-departmental co-ordination through NSTC will remain critical. We look forward to hearing more from the Minister at a future appearance before our committee about her role and responsibilities and how the new department will interact with the rest of the science landscape in government and further afield.

The Windsor framework has allowed Horizon Europe negotiations to resume, and the committee urges the Government to associate at the earliest possible opportunity. The Government have published Science and Technology Framework, which sets some key targets and outcomes across 10 different science and technology areas and, although not all of them are measurable metrics, substantially builds on and defines the science and technology superpower agenda, as we urged in our report. We are promised a

“clear action plan for each strand”

by summer 2023, so we look forward to seeing them soon. Given that delivery will be overseen by the NSTC, we also hope to hear that it is meeting more regularly.

Science and Technology Framework also sets out new, if broad, priority areas including quantum, AI, engineering, biology, semiconductors and future telecoms, alongside

“life sciences, space, and green technologies.”

That is a slightly odd mixture of specific technologies and whole industry sectors, but it is a start in defining priorities for the UK. The Government say that DSIT will oversee strategies in each area, with some, like the semiconductor White Paper and AI White Paper, recently published, and associated packages of funding for semiconductors and life sciences announced.

This goes some way towards addressing our concerns that the UK’s science and technology strategy was insufficiently specified, but concerns about the scale of investment remain. For example, the semiconductor strategy announced £1 billion in funding, compared to the US support under the CHIPS Act, which totals some $52 billion, and the EU equivalent, which will amount to about €43 billion. Cambridge-based Arm is still planning to float in the US, despite government efforts. On green technologies, the approximately $400 billion investment under the Inflation Reduction Act in the US and efforts by the EU are driving a step change, which the UK has not yet responded to. It is difficult to see how we can be world beating without at least world-class investment. One has to ask whether the UK may be spreading itself too thinly by trying to compete in all these areas of science and technology. In this context of renewed industrial strategies worldwide, Make UK’s recent criticism of the UK’s lack of a long-term industrial strategy, and hence lack of pull-through for commercialising technologies, echoes the concerns raised in our report.

A further development since our report has been the recalculation of R&D GDP statistics by the ONS. This has increased estimates of R&D spend from 1.7% to 2.4% of GDP. We welcome the Government’s acknowledgement that

“a stronger baseline does not change the underlying rationale for growing investment in R&D”

and urge them to adopt an appropriate new target. A science and technology superpower should spend more than the average OECD country. We welcomed the increase in funding for R&D at the time, and we are pleased to see that it was defended in subsequent Budgets, but double-digit inflation will absorb most of this increase, while high inflation and interest rates may deter business investment in R&D.

The overall landscape of science policy and publicly funded research in the UK is responding to some major recent reviews, including the Grant review into UKRI and the Nurse review into the research and development landscape. Many of the recommendations from the Nurse review echo our own. We look forward to seeing how DSIT, UKRI and the NSTC will drive forward the recommendations from these reviews. It is encouraging to see that some promises of reform of public procurement, regulation for innovation, tax credits and intellectual property are under way. Sir Patrick Vallance’s review of regulation for emerging technologies is a positive development, and we wait to see how its recommendations are implemented.

Overall, there are promising signs that the Government view science and technology policy as a crucial area to get right. We agree that the potential is there, but the scale of the challenge must not be underestimated. Some of the recent changes are encouraging, but there is much more to do across the whole of government. Ensuring that “science and technology superpower” does not become another forgotten Panglossian political slogan will need clear strategy, commitment and co-ordination across government, business engagement, internationally competitive levels of funding and an unrelenting focus on delivery.

I shall finish by asking the Minister three specific questions: first, what is now holding up our association to the Horizon programme and when is this likely to be resolved? Secondly, what has happened to the Office for Science and Technology Strategy in the process of forming the new Department for Science, Innovation and Technology? Thirdly, will the Government be developing a science superpower skills strategy? I beg to move.

--- Later in debate ---

[Baroness Brown of Cambridge (CB)]

My Lords, I thank all speakers in what has been a very interesting debate. I welcome and thank the noble Viscount, Lord Camrose, the relatively new Minister from a relatively new department, and agree that we celebrate the creation of DSIT. It does indeed address a number of the issues in our report—indeed, we rather hope that our report may have been a useful little prod to encourage the creation of the department. It was very good to hear the Minister say that we needed to challenge every part of government, and also good to hear that attracting overseas talent is so close to DSIT’s heart.

I hope that we are all impressed that the importance of this topic to Members of the House is indicated by how many people have been prepared to exchange a comfortable dinner and a chance to watch “Springwatch” for a four-minute speaking slot in the Moses Room. I hope that noble Lords get a comfortable dinner very shortly, after I have sat down.

The message that I hope the Minister will take back is that we are hearing of some good progress, but we must go further and faster—and we must go further and faster in terms of associating with Horizon. It was good to hear him recognise the damage that our lack of association has caused; the only fair and economically rationale conclusion—fair for UK researchers, fair for businesses and fair for taxpayers—is that we reassociate as quickly as possible.

We must go further and faster, too, in welcoming overseas talent. I hope that the meetings of the NSTC will be a forum in which Ministers from the new department and the Department for Education can bring home to their colleagues from the Home Office the importance of welcoming scientists and technologists from overseas. We heard from the Department for Education that they are looking at bringing in overseas teachers to cover our lack of teachers in areas such as physics and maths. They need to be supported by a Home Office that makes that an easy and welcoming process—which, we heard, is so clearly not the situation at the moment. I hope that the NSTC will be a forum where these issues can be debated, as the Minister has reminded us, in private. Perhaps some heads will be knocked together; we will be listening for the knocking.

We need to go further and faster in setting our targets for our spend on and investment in R&D. It is not good enough to chase the average level in the OECD: if we want to be a science superpower, we need to be at leading levels. We are seeing huge investments being made in the US, Europe and China, and we really need to up our game. We need to be doing more on stability and the long-term view.

As noble Lords have mentioned, we also need to go further and faster in thinking about how we improve diversity in STEM and see how that can help us with our STEM workforce shortage in many areas. I have to gently admonish my noble friend Lord Krebs for mentioning the outstanding work of Watson and Crick but failing to mention the outstanding work of Rosalind Franklin.

To conclude, it is a good start. We are pleased to see DSIT, which will have a have a big challenge. It will have the support of many people in this House in driving that challenge forward, but we need to go further and faster.

Motion agreed.