Income Tax (Charge)

George Freeman Excerpts

Thursday 28th October 2021 Commons Chamber

[Kwasi Kwarteng]

We are not ignoring anything. We are in active conversations, as we always are, on dealing with the situation. [Interruption.] Absolutely, we are completely as one on this, and we feel that, as my right hon. Friend the Chancellor said, we cannot simply bail out every single company—but we can provide a general context in which risks are mitigated.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

We are not going to nationalise anything.

[Kwasi Kwarteng]

We are not going to nationalise anything; that is very true.

Animal Testing

George Freeman Excerpts

Monday 25th October 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

It is a great pleasure to serve under your chairmanship in my fifth week in office, Ms Elliott. I am hugely grateful to the hon. Member for Linlithgow and East Falkirk (Martyn Day) and other colleagues for raising these important issues today, not least in the week in which the comprehensive spending review will be settled. I will then have a chance to look at the overall allocation of funding within the ecosystem for which I am responsible as Minister for Science, Research and Innovation.

I reassure colleagues, and those in the Public Gallery and elsewhere, that I take this issue very seriously, and I will explain my background in the sector.

I echo the comments made by a number of Opposition colleagues: if we are to provide a legacy for Sir David Amess, we ought to come together on this issue. I welcome the tone of everybody’s contributions, in particular that of the shadow Minister, the hon. Member for Newport West (Ruth Jones), which highlights the lack of partisan politics in this matter and the need to seek cross-party consensus. I welcome her reference to this Government’s 2015 ban on cosmetics tested on animals and the 1997 Labour Government’s ban. This country has taken and will continue to take the matter seriously, and we should be proud of that.

I was asked about 36 questions, which I will try to cover, but I want to flag in particular the important opening points made by the hon. Member for Linlithgow and East Falkirk, who spoke about the moral and legal considerations at the heart of the issue—he is right: this is not just a utilitarian argument, but a moral and legal issue about the values that we hold as a country—and about the importance of recognising that sentience confers an additional responsibility, which is enshrined in legislation but merits saying. Our obligations to mammals, for example, are much greater than our obligations to insects. That might be controversial in some places in this country, but I think that in this Chamber, people will understand the difference. I think that was an important and well-made point.

The number of signatories to the petitions indicates the strength of the public view on the matter. I sincerely thank all hon. Members for the quality of their contributions. I suspect the reason that there are not more colleagues on the Government Benches is that the main Chamber is currently debating the Second Reading of the Animal Welfare (Kept Animals) Bill, and while hon. Members have been speaking in this debate, I have been watching Conservative Members speaking in that one. It is fair to say that there is strong cross-party support for getting the framework for animal research right.

I thank and pay particular tribute to those who have spoken, including the hon. Member for Putney (Fleur Anderson), who raised the issue of values and the important role of companies such as the Body Shop and campaigns such as PETA—I echo those considerations. Transparency for consumers when purchasing goods is quite an important factor in driving the culture change that we need to see, and I support her on that point. She, like other Members, mentioned the importance of technology and the human-on-a-chip and organ-on-a-chip technologies that may hold the opportunity for us to completely liberate ourselves from reliance on animals.

The hon. Member for Stockport (Navendu Mishra) raised the important issue of force-feeding and factory farming. I think the whole House would like to move away from any reliance on factory farming, but while there is such a reliance, it is important that that activity is carried out to the highest standards and that public trust is supported by sufficient accountability.

The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) raised an interesting point about why no applications are turned down, which I will come to. The hon. Member for Slough (Mr Dhesi) mentioned the importance of complex cell models and highlighted the need for us to review the workings of the legislation. The hon. Member for Easington (Grahame Morris) highlighted quite powerfully the big difference between the amount of money—around £3 billion—spent on broader life science and medical-related research compared with the £100 million, or £10 million a year, spent on this issue. He made an important point about ensuring that the matter gets enough attention.

[Grahame Morris]

The Minister is being very thorough on some of those points. We are not, as he alluded to in his opening remarks and again just now, arguing for the outcome of the comprehensive spending review to be huge additional resource. It is about skewing the huge sums of money that are available towards this particular area. That would be more efficacious and beneficial for everyone concerned.

[George Freeman]

The hon. Gentleman makes a good point. I was about to say that the National Institute for Health Research—for which I was responsible in my previous ministerial role but one, as Minister for life sciences—puts about £1 billion a year into research on the practice of health. I will happily raise the issue with the relevant Minister at the Department for Health and Social Care, because quite important part of the NIHR’s remit is to build confidence in health research.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) raised the important issue of accountability on the rate of progress, and the opportunities arising from the UK’s departure from the EU. I will try to come to all those issues in due course, and if for any reason I miss any, I will happily write to Members with the answer that I would have given had I had time.

I am personally passionate about this agenda for a whole raft of reasons, not just because I have a much beloved cat and dog as pets. Like everyone in the Chamber, and I think most people in this House, I feel very strongly that we have a duty of care as human beings to the animals around us. Also, having had a career in medical research before coming to Parliament in 2010, I have seen for myself the importance both of using every piece of technology to try to remove dependence on animals in the development of medicines and of carrying public trust in the research process with us.

As hon. Members have set out, in the life science sector a quiet revolution is going on, in which the traditional model of drug discovery—which typically takes 15 years and $2 billion, and has an 80% failure rate—is being quietly transformed by revolutions in genomics and informatics, allowing us to move from a paradigm in which the industry would typically try to develop one drug that suits all through a long and complex cycle of theoretical drug discovery targeting, in silico chemistry, then through into in vitro models, animal trials, human trials, and marketing and National Institute for Health and Care Excellence approval.

The revolution in genomics and informatics allows us to begin to target patient groups, develop drugs around particular blood types, genotypes and phenotypes, and cut out a lot of the long, traditional drug discovery process. It is a revolution that I am passionate about, not just because it will in due course reduce, and possibly even eradicate, the need for us to rely on often unreliable animal models. Members will have heard me talk in other places about the need to move away from necessary but imperfect models of human disease.

[Mr Dhesi]

The Minister is being generous with his time. I take on board his points about the quiet revolution in genomics and medical science more generally, but while that is taking place, millions of animals are being terrorised and killed. It is not benefiting us or them, so when will we set some deadlines and targets for the elimination of animal testing?

[George Freeman]

I understand the hon. Member’s point and I will come to it. I could not quite agree that our reliance at the moment on animal testing is of no use at all; it is of important use in defining certain elements of toxicity and safety. It is not perfect, but to say that it has no use is not fair. I will come to his point about how quickly we need to make progress.

Part of my passion for this is that I tried to found a company developing toxicology artificial intelligence—predictive software that would predict the toxicology of compounds so that we do not have to rely on animal models. I care sufficiently about it that I took the trouble to do that. Let me share with colleagues one thing that I discovered in that process, which speaks to the delicacy sometimes around transparency. Passions in this sector understandably run very high. I know that colleagues will be shocked to discover that, in the course of putting together a company to develop toxicology software, one needs to be able to understand the experiments that are currently being done in order to model them better using software. That meant that on the board of the company we had somebody from Huntingdon Life Sciences so that we could understand the processes that we were having to replace.

The presence of that person on the board was alone sufficient to attract huge and violent attacks from Stop Huntingdon Animal Cruelty. Of course, who on the board did they pick on? Was it any of the eight men, of whom I was one? No. They picked on the company secretary—the member of the board least responsible for the company. She lived alone in a cottage in the fens, and woke in the middle of the night to find 20 people in balaclavas daubing her house with red paint, calling her a bunny killer. I flag that story because it speaks to the passions and the need for a balanced approach, in the way that colleagues have raised the issue today.

If we are to be transparent and accountable, we need to ensure that that transparency and accountability can be shared, and that we are not putting particular people at risk. However, I share the point that we need to do everything we can to ensure that the quiet revolution accelerates, and that we reduce the reliance on animals for research as fast as we possibly can and to as great an extent as we can.

Allow me to describe briefly the framework that we have in place. Why is the use of animals in scientific research justified at all? It is justified because, at the moment, it is vital for identifying benefits to humans, animals and the environment. We have to try to balance that dependence with our commitment to the highest animal welfare standards. That is the basis on which the current law is drafted. The balance between those two elements is reflected in the fact that we have a dedicated Act to make sure that animal welfare and animal research are properly integrated. The responsibility for managing that Act lies with the Home Office and the Home Secretary, not with me, but I will raise the issues mentioned today with the Home Office.

The Act specifies that animals can be used in science only for specific limited purposes where there are no alternatives—a crucial point—and provides protection for those animals through the requirement for application of the three Rs: replacement, reduction and refinement. Today’s debate raised three related but separate issues that contribute to the Government's overall strategic direction and policy: first, the benefits derived from the use of animals in science where there are, as yet, no alternatives; secondly, the regulatory regime that facilitates such use; and thirdly, our support and commitment to the funding of the three Rs in order to accelerate progress away from reliance.

Let me take each in turn. At the moment, animal testing research plays a vital role in understanding how biological systems work in health and disease. It is crucial to our understanding of new medicines and cutting-edge medical technologies for both humans and animal health, and it supports the safety and sustainability of our environment by helping to reduce dependency on chemicals. Animal research has helped us to make life-changing discoveries for new vaccines and medicines, transplant procedures, anaesthetics and blood transfusions —not least the development of the covid-19 vaccine, which was made possible because of animal research.

While I accept that we need to try to move away as quickly as possible, one must remember that we are using animals only because it is the way we have evolved towards minimising exposure of human beings to dangerous drugs. I assure hon. Members that if we were to completely remove all animal use from medicines research, we would expose our own kith and kin to much higher risks. That would quickly be seen as irresponsible.

We need to find a way of substituting those pre-human tests as quickly as possible. Although much research can be done into non-animal models, there are still purposes for which, sadly, it is essential to use live animals, as the complexity of whole biological mammalian systems cannot always be replicated using validated non-animal methodologies. That is especially the case where human medicines are developed.

[Grahame Morris]

The Minister is being generous, and he will want to make progress. An example of a drug that went through extensive animal testing through the established processes is thalidomide. Animal testing is not infallible. We have discovered subsequently that some drugs that have been through established animal testing can be repurposed. We have now discovered that it is an extremely effective drug against leprosy and other conditions. There is rightfully scepticism about statements that animal testing will ensure that drugs are completely safe, because that is not the case.

--- Later in debate ---

[George Freeman]

The hon. Gentleman makes an important point. I am not suggesting that the current system is 100% perfect at all. In fact, I made it clear in my earlier comments that, often, animal models are not perfect predictors—he is right to say that. But it is equally the case that, without the animal models, an awful lot of drugs would be taken forward into humans with hugely damaging side effects and no benefits. The point is not that once something has been through animal testing it is a perfect drug. Going through animal testing prevents exposing humans to potential drugs that are simply unsafe. It is not perfect, but that is the situation. He is right to point out that animal testing itself is not a guarantor of efficacy.

The truth, sadly, is that without testing of medicines using animals at the moment, we would not know whether medicines are safe or effective for use in humans or animals, and that would limit the availability of medicines to treat disease and of chemicals that could be used for a wide range of purposes in many industries. There is a human health and safety part to this. In order to protect workers in the chemical and agricultural industries, we need to ensure that we understand any toxicity of those chemicals before they are used. Without the testing of chemicals on animals, where no alternative methodologies are available, we would not know what hazards they present. Many products that are not safe in humans or the environment are detected through animal testing, thus avoiding harm downstream.

[Ruth Jones]

Will the Minister give way?

[George Freeman]

Yes, but I do have to make some progress.

[Ruth Jones]

I thank the Minister for giving way. None of us would disagree that we want to keep humans safe, but a lot of people have concerns about the repetition of unnecessary tests, and about Constant, ongoing testing for chemicals, cosmetics and such. It would be great if the Minister could address that issue.

[George Freeman]

The hon. Lady makes an interesting point, which I will come on to. Animal testing is required by all global medicines regulators. I want to be clear that this is not a UK phenomenon, but it does include the UK’s Medicines and Healthcare Products Regulatory Agency, which is widely held to be setting the global benchmark, not least in vaccine discovery. Animal testing of chemicals is sometimes required under UK law, often relating to the quantity manufactured to protect the safety of workers exposed to those materials in large amounts and the environment when chemicals may find their way into the waterways, soil or atmosphere. All testing of chemicals on animals under REACH, the EU regulation on the registration, evaluation, authorisation and restriction of chemicals, is subject to the “last resort” principle, which means the manufacturer must always—it is a legal duty—consider alternative approaches first and, in some cases, secure the agreement of the regulator before proceeding.

In order to obtain these benefits that accrue, it is necessary to exempt such animals from the Animal Welfare Act 2006 and put in place specific protections for them in a dedicated Act. A number of colleagues raised the question of why this is not covered by the 2006 Act. It is actually the other way round. We have specifically put the use of animals in research into their own legal framework under the dedicated Animals (Scientific Procedures) Act 1986, known as ASPA, which, as I say, is the responsibility of the Home Office. The underpinning principle of ASPA is to protect animals which are sentient, in terms of their capacity to experience pain, suffering and distress. Therefore, protection of animals on the basis of their sentience is the very principle established in the legal framework.

ASPA protects animals in a number of ways. It requires a three-tier system of licensing for individuals conducting procedures on animals, the programme of work that will use animals and the place where animals will be used. Licence holders are required to undergo training and a competency assessment, and to have legal responsibilities to have systems in place to protect animals, in compliance with ASPA. Licences are granted only if the scientific purpose is permissible under the law and the research is conducted in line with the three Rs. That means work can be conducted in animals only if there are no alternatives, the minimum number of animals are to be used to meet the scientific objectives, and the level of harm caused must be limited to the minimum needed to achieve the approved scientific outcome. Thus, it is illegal in the UK to use an animal in science if the scientific objective can be practicably met using a validated non-animal alternative.

ASPA requires that all animals need to be housed and cared for in accordance with the code of practice published for this purpose. The regulator enforcing the Act operates a system to assure compliance of licence holders with the Act and the conditions of their licence, including inspection, audit, review of reports and managing cases of potential non-compliance. Under ASPA any testing required by another UK regulator is permissible. The requirement for such testing is set by the relevant expert regulator, such as the MHRA or the Health and Safety Executive.

With regard to testing of cosmetics, animal testing has been banned in the UK since 1998, and it is illegal to test cosmetic products or their ingredients on animals to meet the requirements of the 2009 regulations for cosmetics. However, ingredients used in cosmetics may require animal testing under other legislation, including REACH, for example to assess the safety of workers in manufacturing plants. Such testing can be lawful in the UK and is not in conflict with the bans under the cosmetics regulations. Under UK regulations to protect the environment and workers from the risks of chemicals, animal testing can be permitted under REACH where required by UK regulators. Again, however, such testing can be conducted only where there are no non-animal alternatives.

That brings me to the importance of the development of those alternatives, which, as the Minister for Science, Research and Innovation, I am also committed to, because it is a huge sector for this country to lead in. In the report on post-Brexit opportunities that I wrote for the Prime Minister earlier this year, I argued that the UK should use our freedoms from the EU regulatory bloc to reach for the top and to regulate in these emerging areas of technology in order to build consumer and investor confidence. This is one of the areas where we could set the gold standard—we could set the benchmark for international groups to follow. That is why the Government actively support and fund the development and dissemination of the three Rs—replacement, reduction and refinement—programme. This is achieved primarily through funding for the National Centre for the Replacement, Refinement and Reduction of Animals in Research—NC3Rs—which works nationally and internationally to drive the uptake of technologies and to ensure that advances are reflected in policy, practice and regulations on animal research.

It is fair to say that the NC3Rs is viewed as being world-leading. Since its launch in 2004, we have committed £100 million through its research, innovation and early career awards in order to provide new three-R approaches for scientists in academia and industry. I am delighted to say that the relevant research council has increased funding by another 8% in the last year. That includes almost £28 million in contracts through its CRACK IT Challenges innovation scheme to UK and EU-based institutions, mainly focusing on new approaches for the safety assessment of pharmaceuticals and chemicals.

I checked earlier today, and it is not fair to say that nothing has come of that work. There is a whole raft of very important incremental improvements, including the development of in silico models of cardiotoxicity with Professor Rodriguez and in vivo models of liver tox and kidney tox, as well as the development of virtual dog modelling as part of the £2.5 million programme for the digital dog, to substantially reduce dependence on dogs in research.

The NC3Rs and the MHRA work to bring together stakeholders in academia, industry, Government and animal welfare organisations in order to facilitate the exchange of information and ideas and the translation of research for the benefit of both animals and science. That has led to changes in international regulations, and the NC3Rs has just recently launched a new £2.6 million call for the development of the virtual dog, to draw together technologies across the country. Building on the work of the NC3Rs, UK Research and Innovation is also funding a portfolio of research involving humans, animal models and non-animal technologies.

As hon. Members have highlighted, breakthroughs in stem cell research, cell culture systems, lab-on-a-chip, organ-on-a-chip, new computer modelling and imaging technologies, and the place of AI all provide a powerful nexus for technological approaches that will reduce, and in due course eliminate, the need for us to rely on animal models, but we have to move at a pace at which we can guarantee human safety in the development of new drugs. In 2015, the non-animal technologies road map for the UK was published by Innovate UK and the NC3Rs, in partnership with the research councils and the UK’s Defence Science and Technology Laboratory. The NC3Rs and Innovate UK are currently reviewing the impacts of the investments that were made—a review in which I will be taking a keen and close interest.

In the time available, let me try to respond to some of the specific questions that were raised. The hon. Member for Easington raised the statistics on the number of experiments, but the number of experiments is not the same thing as the number of animals. One of the metrics that we are driving is to reduce the number of animals used—I just wanted to flag the difference between those two.

Animal sentience is already enshrined in law. It is a very important principle, which is precisely why we have a separate legal framework.

Various Members asked why we are not doing more to promote alternatives. I want to highlight that the existing law prevents the testing of animals, if there are alternatives. I am keen to make that very clear and to ensure that the whole industry understands that obligation.

The hon. Member for Easington raised the issue of the failure of medicines in humans, which I have tried to address. Nobody is suggesting that the use of animals is a guarantor of efficacy and safety in humans, but it is an important barrier to the unnecessary exposure of humans to unsafe medicines. I agree with him that we need to move as quickly as possible to find alternative ways to do that.

A number of colleagues mentioned the statistic that 90% of animal experiments fail. That is the same point, really. If “failing” means that those experiments do not perfectly predict efficacy and safety in humans, that is true, but the point is the other way around: those experiments are done to make sure that those things we know will not work in humans are prevented from going near humans. They are not the definitive and final test. The hon. Member for Putney mentioned that work is being done to improve the predictive quality of animal tests, which is a really important point, and we need to continue to manage that work. International bodies such as the OECD and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use are working on that issue, but following this debate I will be asking for reports on what progress has been made. I will be happy to share that information with colleagues who are here today.

Colleagues asked whether the funding for human-based research has been increased. The £100 million figure is over 10 years. The Biotechnology and Biological Sciences Research Council has increased that figure by 8% for this year, and I assure Members that, following the comprehensive spending review, I will be looking to make sure that number is not reduced and, if possible, is increased. That is important, primarily for animal welfare and trust in research, but also because moving away from unnecessary and avoidable animal experiments and towards more accurate models as quickly as possible is good for UK life science, research and drug discovery. The hon. Member for Putney raised the issue of the balance between animal and non-animal testing, and I reiterate that using animals is allowed only where there are no non-animal alternatives.

Colleagues raised the issue of animal testing establishments breaking the law. There is a very robust system of licensing and inspection of such establishments, and any non-compliance is appropriately dealt with through a range of remedies, which start with advice, letters of reprimand and retraining, but ultimately lead to fines and prosecutions. I reassure Members that, from my point of view, any evidence of malpractice needs to be treated with the very highest degree of urgency, because public trust in this system is absolutely key.

The hon. Member for North Ayrshire and Arran raised the issue of botulinum. To reassure the public, that was only the case for botulinum as a registered medicine being tested before it goes into humans. The issue of force feeding—which is a controversial term—was raised. I have checked the reason for that, and it is about making sure that the correct dose is administered, but again, the point is well made: we need to make sure that is being done in the most humane and sentient-friendly way. The hon. Lady also raised a question about the tightening of regulations. Those regulations are always being reviewed. This year the Home Office commenced a regulatory reform programme to ensure that leading regulatory practice is followed, and again, following this debate, I will be asking for an update about what improvements have been made. Finally, the hon. Lady raised the issue of tightening of regulations for cosmetics post-EU exit. We are now in the same position as the EU: testing on animals for cosmetic marketing is allowed only if no non-animal alternatives exist. The controversial case of Symrise is currently with the European Court of Justice.

In conclusion, some excellent points have been raised today. I will not repeat them all; I think I have set them out. I will be raising them with the Home Secretary and the Home Office, and while I do not believe we are yet at the point where we can completely move away from reliance on animals, I make it very clear that we need to move faster. We need to reiterate to the public that that is our intent, and that we have a duty of care and a commitment to better drug discovery. I believe deeply that genomics, phenotypics and data are key to that, and I hope all Opposition Members will join me in making the case for better use of data in the NHS to support drug discovery, because that is a key argument that is often not made. I am very happy to accept the challenge of providing a personal guarantee to the hon. Member for Newport West that, as Minister for Science, Research and Innovation, I will make every effort to avoid all unnecessary suffering.

Artificial Intelligence

George Freeman Excerpts

Wednesday 20th October 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

It is a great pleasure to serve under your chairmanship, Mr Davies; to be back on the Front Bench to make the case for science and technology in this country; and to respond to my hon. Friend the Member for Don Valley (Nick Fletcher), who has done his constituency and constituents a service by raising these important issues, and in exactly the spirit of our late and lamented colleague, Sir David Amess. We need in this place constituency MPs who speak for the fears, worries, anxieties and concerns of their constituencies, as my hon. Friend eloquently has. I hope to address some, if not all, of the points he made. I reassure him that they were well made and well heard and are important to the Government as we set out our plans for the UK to be an AI powerhouse.

I am framing my new role as Minister for Science, Research and Innovation around two key projects. First is the mission to be a science superpower. In many ways we already are, but we need to maintain that to be able to grow a modern, innovative, prosperous and high-skilled economy. Secondly, crucially, is to ensure that, off the back of the pandemic, the opportunities created by Brexit and debt challenges owing to the global financial crisis and the pandemic itself, we build a much more innovative, productive, high-skilled and competitive economy by harnessing technology and innovation, to make the UK an innovation nation.

Fundamental to my mission is to make sure that the benefits currently enjoyed—not only, but heavily—in the golden triangle are spread so that we can build clusters of new sectors, new jobs, new companies and new technologies all around this country. That means not only in Scotland, Northern Ireland and Wales, strengthening the Union, but in constituencies such as mine, which is not 40 miles from Cambridge but feels 100 years away, and like my hon. Friend’s, which hear of this technology revolution but do not see the opportunities on their own doorstep. I am grateful to my hon. Friend for so fluently raising these issues.

Of course, we already use AI across whole rafts of our society and economy to huge public benefit. I have seen, through my own career and as the former Minister for Life Sciences, the incredible power of AI software in looking at genomic and phenotypic records and very quickly—in a way that no number of scientists on their own could—identifying opportunities for new drug discovery or targeting drugs at the right patients, which has huge benefits for patient safety. In cyber-security, AI is right on the frontline of our ability to counter some quite mischievous and dark forces, in terms of both national security and economic fraud. AI already plays a crucial role for the environment. For example, in agritech, using AI with satellite data helps to identify where to apply chemicals in isolated parts of a field; rather than spraying a whole crop or field, AI identifies, by field patterns and visual optics, where chemicals need to be applied. In fact, the use of AI in plant genomics allows us to develop a whole raft of drought and disease- resistant crops, helping sustainable development.

In air traffic control, thankfully, huge computing power is applied to ensure that planes never bump into each other; it is important to have pilots when there is an emergency, but actually the AI at the heart of our electronic air traffic control system is keeping us all safe. AI is also used in other ways, including in the gaming sector, which is a huge driver of innovation and opportunities in this country, often rather below the horizon. I dare say that there is probably a cluster of games entrepreneurs in Don Valley. The gaming industry in this country is huge and drives a lot of innovation in AI that then has applications in healthcare and broader industry.

My hon. Friend raises an important point about public trust and confidence. I am positive about the importance of this technology for creating opportunities and jobs but, crucially, the public must be with us, and they must have confidence in our regulatory framework. I am glad that he referred to the report of the taskforce on innovation, growth and regulatory reform, which I led with my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). In that report, we argue that leaving the EU presents an opportunity for the UK not to race to the bottom but actually to race to the top: to set values-based regulation for innovation that reflects the values of the people of this country.

In a whole raft of new technology sectors, the world is grappling with how to regulate: AI, autonomous vehicles, nutraceuticals, functional foods, clinical trials and digital health. We are respected internationally as a setter of standards. As my hon. Friend made clear, standards must be embedded in the values that go with the Union Jack around the world. If we can regulate with values in a way that supports innovation, I am very confident that his constituents will benefit.

That goes right to the heart of the Prime Minister and the Chancellor’s historic commitment—it is the first time in my life that I have heard such a strong commitment from Conservative leaders—to end the low-wage economy that is reliant on overseas labour. The only way to do that is by harnessing innovation to create a more productive, more competitive economy. That is the way to raise the living standards of all of our constituents—my hon. Friend’s and mine. Having heard the Chancellor and the Prime Minister announce that groundbreaking commitment at party conference, I am not sure that it has yet sunk in: that the Conservative party is absolutely determined to raise the living standards of people around the country, to raise wages and to move on from a 40 or 50-year cycle of economic boom based on very cheap labour. That is good news for my hon. Friend’s constituents as well as mine.

The computing revolution led to huge fears that we would see the automation of everything and mass redundancy, but in fact the UK has become a huge global software and computing power, creating hundreds of thousands of jobs. I am confident that, if we deal with the issues that my hon. Friend raised and get the regulation and skills environment right, we will similarly become a powerhouse for new AI industries.

I will deal with the important points that my hon. Friend raised on skills, public trust, levelling up and ensuring that these technologies create jobs all around the country, values and security. In fact, I will go this afternoon to the Pacific Future Forum in Portsmouth to join leaders from the economies of the Association of Southeast Asian Nations. There I will highlight the UK’s commitment, through our global science superpower mission, to an international framework for the safe use of AI and to using our collective liberal democratic economic heft and values to ensure that the west is developing these technologies without inadvertently leaving ourselves open to dark forces.

I will summarise where we stand and why this is such an opportunity. At the moment, the UK ranks—believe it or not—third in the world in terms of the development and deployment of AI technologies, behind only the USA and China. That is an extraordinary global advantage. AI is going to be as transformational as computing, and we are currently in bronze position in the Olympic medal table. We have a huge lead. It is important that we do not drop that lead, and that we build on it to create a prosperous economy. A third of Europe’s AI companies are here in the UK, which is twice as many as any other European country. We are also third in the world for AI investment, behind only the US and China, attracting twice as much venture capital investment into AI companies as France or Germany. We are in a very strong place in the global race to harness AI.

I turn to the points my hon. Friend made on skills, because they are very important and the Government take them seriously. Since the AI sector deal that we launched in 2018, we have been making concerted efforts to improve the skills pipeline, not just to ensure that those vital high-technology skills are there for industry but to ensure that all—his constituents and mine—have an opportunity to participate in this economy. That is why we have increasingly focused on reskilling and upskilling: so that, where there is a level of displacement, there is redeployment rather than unemployment.

That is why, through the Office for Artificial Intelligence and the Office for Students, we have funded 2,500 more postgraduate conversion courses. Those include courses particularly for students with a background not in science, technology, engineering or maths and students with a near-STEM background. There are also 1,000 scholarships for people from under-represented backgrounds, particularly women, black and disabled students. Those courses are available across the UK and, as my hon. Friend referenced, Sheffield Hallam University within the Sheffield city region is leading in this, and is one of the universities delivering those courses, which are hugely popular with students. I see that no Opposition Members are present, but Government Members will be pleased to remember that at the recent Conservative party conference the Chancellor announced that the programme will be doubled, creating 2,000 more scholarships.

South Yorkshire is quite a powerhouse in AI, with Sheffield University. There are 16 sectors for doctoral training in AI across the country, of which Sheffield is one, training 1,000 more PhDs. There is the Sheffield centre specialising in speech and language technologies—an area where the university has long pre-eminence. Like so much of the UK, South Yorkshire is in the process of reinventing itself and its economy, and I have every confidence that it will do it as well as everywhere else, not least because of Sheffield Robotics, a leading company and employer in that region.

Sheffield’s advanced manufacturing research centre currently offers more than 300 apprenticeship places to local jobseekers in the AI sector, so there is a lot to be proud of and confident of in the region. We are also seeing applications of AI at the Centre for Child Health Technology in Sheffield as part of the Olympic Legacy Park, where AI is being put to use to assist clinicians in identifying tumours via scanning. In the national AI strategy, the Government committed to supporting the National Centre for Computing Education to ensure that there is a wider reach and access to AI courses for people all around the country.

My hon. Friend mentioned the importance of the Government gripping this matter strategically, and I want to reassure him on that. The Council for Science and Technology wrote to the then Prime Minister in 2013 to advise on what it called the coming age of algorithms and the need for new research to look into these matters. The Government created the Alan Turing Institute, which is now the national hub of expertise on AI and data science. Following the independent AI review in 2017, we created the Office for AI and now the independent AI Council.

We also announced at the time the Centre for Data Ethics and Innovation, which is really important and goes to the heart of some of my hon. Friend’s concerns. If we are to lead in harnessing these new technologies we need to lead in regulation based on values and ethics, and reflect them as he did in his speech. I am very pleased that the Centre for Data Ethics and Innovation was a recommendation from the Royal Society and the British Academy in their separate data governance report. Earlier this year, to improve public discourse on AI the CDEI engaged widely with the public and published its findings in June. We are committed to trying to grow that conversation. It recommended that the Government develop a standard for transparency on algorithms in the public sector, which I am delighted to say is work now close to completion. We have to lead this through the public sector as well as the private. That, again, speaks to the importance of values.

The international dimension is vital. I reassure my hon. Friend that in my first four weeks I have already chaired meetings with other western democracies on the importance of research security, because AI can be used for industrial espionage and intellectual property theft. It is an issue that we take very seriously, and I am jointly responsible with the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South (Chris Philp), for the Office for AI, which develops a cross-Government approach. As my hon. Friend the Member for Don Valley referenced, the national AI strategy sets all that out.

We have required regulators such as the Information Commissioner’s Office, the Competition and Markets Authority, the Financial Conduct Authority and Ofcom to specifically consider the risks and benefits of AI within their sectors. Earlier this year, through the CDEI and the Office for Artificial Intelligence we set out with other regulators a project to remedy skills gaps in terms of knowledge of AI in the regulatory landscape. Every regulator will need to think about how it uses AI, and the risks of AI in its sector. Internationally, we have set up the Global Partnership on AI, the first multi-lateral forum, and we co-chair the data working group. The UK is playing a leading role in international discussions on AI ethics and potential regulations, including at the Council of Europe, UNESCO and the OECD, which is partly why I am going to the Pacific Future Forum this afternoon.

Time is against me, but I hope that I have addressed some of my hon. Friend’s points, and reassured him that we take them very seriously. We will harness the benefits of the technology to create those hundreds of thousands of jobs only if we bring the public with us, which we are committed to doing.

Question put and agreed to.

Oral Answers to Questions

George Freeman Excerpts

Tuesday 21st September 2021 Commons Chamber

[Ben Bradley (Mansfield) (Con)]

2. What steps his Department is taking to increase private sector investment in innovation.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

It is very good to be back as the newly appointed Minister for Science, Research and Innovation. I thank my hon. Friend the Member for Mansfield (Ben Bradley) for his tireless work on levelling up and the importance of innovation in supporting left-behind communities. Science and innovation are not the same thing. We are committed to being both a science superpower and an innovation nation, and that is why I am looking hard at what we can do, through the business innovation forum, the Advanced Research and Invention Agency, Innovate UK and UKRI, to drive levelling up.

[Ben Bradley]

I thank my hon. Friend for that answer and welcome him back to his new position—congratulations. There is an oven-ready package available in the east midlands, with key projects set to boost private investment in the region. The Government’s backing for those projects this autumn is vital. Can my hon. Friend confirm that the Government are supportive of our plans for an east midlands freeport, our development corporation and the importance of Toton in the integrated rail plan? Does he agree that this is a huge opportunity to attract private investment into a region that traditionally is at the bottom of the table for attracting that kind of money?

[George Freeman]

In a word, yes. My hon. Friend makes a powerful case. Freeports and regeneration corporations are vital to our innovation strategy. Not only are we determined that there will be funding for the golden triangle, but we want to harness science and regeneration to drive growth around the country.

[Ian Lavery (Wansbeck) (Lab)]

3. What steps he is taking to help ensure that businesses do not use fire and rehire practices.

--- Later in debate ---

[Andrew Jones (Harrogate and Knaresborough) (Con)]

4. What steps his Department is taking to establish the UK’s position as a world leader in science, research and innovation.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

I thank my hon. Friend, who has been a distinguished Minister in the Treasury and the Department for Transport and a champion of innovation. As the Prime Minister has made clear, the Government are completely committed to unlocking this country’s global reach as a science superpower and an innovation nation. That is why we are committed to spending £14.9 billion this year on research and development, and to increasing the total R&D budget to £22 billion and 2.5% of GDP.

[Andrew Jones]

I thank my hon. Friend for that answer, and congratulate him. It is good to see him back at the Dispatch Box.

One of the largest employers in my constituency is Labcorp, a business that is at the heart of new medicine development both in the UK and across Europe and has played a role in the life science industry response to covid. It is considering UK expansion over the next five years at a number of sites across the UK. Will my hon. Friend meet me to discuss that opportunity, and also some of the obstacles that may get in the way of it, with a view to securing expansion in the UK as a whole but in Harrogate in particular?

[George Freeman]

I should be delighted to meet my hon. Friend soon to discuss that. Labcorp is a major global corporation whose investment in the new clinical pharmacology site is vital. It is in such companies that we need to be investing to drive private investment in research and development.

[Rachael Maskell (York Central) (Lab/Co-op)]

Time and again I have raised with the Government the opportunity to invest in BioYorkshire, which will create 4,000 jobs for my constituents, upskill 25,000 people, and deliver £5 billion in gross value added to the Government. Will the Minister meet me to discuss it? COP26 is just six weeks away, and not pursuing projects like this is holding back the improvements that we can make to our environment.

[George Freeman]

As I have said, I am wholly committed to ensuring that science innovation drives levelling up and regeneration, and I should be delighted to meet the hon. Lady. I shall be on my way to County Durham on Thursday, so perhaps I can meet her next week or the week after.

[Alun Cairns (Vale of Glamorgan) (Con)]

6. What recent progress he has made on the Government’s proposals to support automotive battery manufacturers.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T6. The space sector presents us with huge opportunities for the future prosperity of this country. What plans is my right hon. Friend developing with regard to the implementation, ownership, governance and funding of key elements of the national space strategy?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

I pay tribute to my hon. Friend, who has been a phenomenal champion of science and technology in space. I am delighted to say that the Government are very shortly to publish our national space strategy, into which we put a huge amount of work. In addition to the £1.4 billion that we spend on defence space activities in our innovation strategy, we are looking to make sure that we boost the wider science and technology applications of our £16.4 billion space sector.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

T5. I was privileged to meet the international legend Doddie Weir before leading a debate on the petition he created on motor neurone disease in support of the targeted £50 million expenditure. I have certainly been convinced by his arguments, and we have heard cross-party support here today. Will the Secretary of State now commit to support this spending review bid?

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

I welcome the Minister back re-energised to his place in the Department, and as today is Gloucestershire Day, can I ask him to look very closely at the bid made by Gloucestershire to support the development of a vital new technology—nuclear fusion?

[George Freeman]

On Gloucestershire Day, it is a great pleasure to take that question from my hon. Friend, and the answer is yes.

[Jim Shannon (Strangford) (DUP)]

Renewables are very important everywhere across the United Kingdom, but one of the problems for renewables is getting access to the grid. The Electric Storage Company in Northern Ireland has told me that if that was improved, energy could be stored for access to the grid. Can the Secretary of State tell us what he could do to make that happen?

Help to Grow: Digital

George Freeman Excerpts

Monday 20th September 2021 General Committees

[The Chair]

Before we begin, I encourage Members to wear masks when they are not speaking. This is in line with current Government guidance and that of the House of Commons Commission. Please also give each other and members of staff space when seated and when entering and leaving the room. Members should send speaking notes to [e-mail]. Similarly, any officials in the Gallery should communicate electronically with the Minister.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

I beg to move,

That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, compensation to digital technology product vendors in respect of a proportion of the costs of providing digital technology product to SMEs as part of the Help to Grow: Digital programme up to a limit of £296 million over three years.

It is a pleasure to serve under your chairmanship today, Sir George, and to be back as Minister for Science, Research and Innovation.

The UK has a long-standing productivity challenge. We are home to some of the world’s most innovative firms, but we also have a long tail of less-productive firms compared with other G7 countries. In 2019, the Department for Business, Energy and Industrial Strategy/Her Majesty’s Treasury business productivity review found that a key reason for the UK’s level productivity gap is the low adoption of basic digital technologies and weak digital leadership and management practices. While we excel at innovation, being eighth in the world, we are only 31st for ICT adoption. Our small business sectors are lagging in adopting digital technologies, and our tech adoption rates are far behind leading competitor countries.

That trend has been identified widely, including by the CBI, Be The Business and the Bank of England, and in developed economies 55% of productivity gains, according to McKinsey, could come from closing the gap between low and hight productivity firms through the adoption of existing best practice. We know from research commissioned for the European Research Council that adoption of tried-and-tested technologies can have a big impact on business productivity of between 7% and 18% as a minimum. Such technologies are not groundbreaking and include customer relationship management tools, online accounting and e-commerce products.

To turn the trend around as part of our plan for growth, the Chancellor announced at Budget 2021 two new Help to Grow schemes. The first, “Help to Grow: Management”, is supporting 30,000 UK small business leaders to undertake practical management training at our world-class business schools. The second, “Help to Grow: Digital”, is a new UK-wide digital adoption programme for our small and medium-sized businesses.

Our small businesses have been hit particularly hard during the pandemic, but they have also grasped new opportunities, particularly digital technologies, to survive and thrive. We want to build on that momentum. The new scheme will launch in autumn 2021, and we aim to support 100,000 small and medium-sized businesses across the UK over the next three years to adopt technology and to boost productivity and international competitiveness.

The scheme will consist of a new online platform through which businesses can access learning and advice on software to help them save time and money, and the platform will provide guidance on selecting software and how to embed them into their business successfully. The scheme will also provide an up to 50% discount on the costs of buying new software for the first year up to a value of £5,000. SMEs that have been registered in the UK for more than 12 months and have between five and 249 employees will be eligible for funding.

In the first wave, we will focus on e-commerce, accounting and customer relationship management software. We want to ensure that SMEs are accessing high-quality software products, which is why vendors will need to apply for them and their products to be accepted on to the scheme. Applications will be assessed for meeting functionality and quality standards. Vendor applications closed on 8 September with a strong field, and we will be reviewing them to ensure that we have a strong offering to present to small businesses at launch.

SME engagement is key, and we recognise the challenge of reaching 100,000 small businesses over three years. I am pleased to have the support of many business organisations, including the CBI, the Federation of Small Businesses, Be The Business and others. My officials have engaged extensively with organisations representing the software market, as well as with individual vendors, to design eligibility criteria that will ensure SMEs have access to high-quality products from reputable companies. Engagement with the wider business community is being conducted across numerous channels, with a view to raising awareness of the scheme even, and especially, among those SMEs that are hardest to reach, namely those that have not previously taken up Government support or introduced digital technologies into their operations.

“Help to Grow: Digital” is an ambitious programme—100,000 businesses over three years—but we are confident that it will provide significant benefits to small and medium-sized businesses, helping them to seize every opportunity to grow. The initiative is an important part of the Government’s wider plan for jobs, promoting opportunity, boosting employment and helping level up the economy as businesses recover from the impacts of the pandemic. I commend the motion to the Committee.

--- Later in debate ---

[George Freeman]

I thank hon. Members for some very intelligent questions. I thank the hon. Member for Newcastle upon Tyne Central for making it clear that the Opposition will support the motion, which speaks volumes about the sense of this initiative. Notwithstanding her pessimism about the UK economy, we are the fastest growing economy in the G7, and it is quite clear to most people up and down the country that the Government’s response during the pandemic to support businesses, and to make sure that the damage of the pandemic is minimised, has been widely recognised.

[Chi Onwurah]

I thank the Minister for giving way. I did not express any pessimism about our fantastic businesses and economic opportunities. I was talking about some of the figures for business start-ups in the last few years, which I hope he recognises.

[George Freeman]

Having a run a few myself, as colleagues here have, I am all for them. I simply make the point that we are the fastest growing economy in the G7, so we must be doing something right. The hon. Lady is right to highlight, as this measure does, the importance of SMEs.

This is a targeted measure. We are not trying to boil the ocean; we are trying to target specific funding at businesses for which all the evidence shows that the uptake of digital technologies such as those I have described will have maximum impact in terms of productivity and competitiveness. A number of us have started companies. Very often in the first three, six, nine or 12 months we find that digital technology is not necessarily the biggest barrier to getting going. It is important, but we are doing here is focusing where all the evidence from the business community suggests that support for digital uptake will have the biggest.

I will take the questions in turn. First, this is designed specifically for businesses, so charities are not eligible, but I am delighted to say that all social enterprises—businesses that recycle their profits back into good causes—are eligible, which sends an important message.

[Martin Docherty-Hughes]

Will a social enterprise that is also a registered charity be eligible, because most social enterprises, at least in my constituency, are registered charities?

[George Freeman]

Many social enterprises are not charities, but the hon. Gentleman makes a good point, because many charities also have an operating arm as a company. I will come back to him on that point.

Secondly, on take-up, I am happy to say that there have been a series of meetings, roundtables and engagement projects over the spring and summer. I do not have the exact figures, but hundreds of companies have already registered to take up when this opens shortly.

Thirdly, the hon. Lady mentioned the importance of this being across the whole UK, and I could not agree more. This project is not just for the golden triangle, golden and important though it is; it is absolutely about reaching companies across the Union, in Scotland, Northern Ireland, Wales and all the regions of this country. On her point about monitoring, one of the key assessments will be to ensure that we are reaching all across the country, so take-up will be monitored in that way.

Fourthly, the hon. Lady asked about procurement. I can assure her that Her Majesty’s Treasury, which is not quick to hand out taxpayers’ money, has been through this with a fine-toothed comb and is satisfied that the procurement process has been done properly. She asked about marketing, and I am delighted to confirm that the marketing budget for this is currently £7.5 million, which is a substantial sum, with £1.5 million in the first year to ensure that we are reaching out and raising awareness among those companies. With Her Majesty’s Opposition onboard, perhaps I can take this opportunity to encourage her and others to highlight the link on the gov.uk website, and to encourage businesses and social enterprises to apply.

Fifthly, on value for money, the Treasury and the business sector calculate that this £260-odd million, if we can get it out to these companies over the next three years, can produce a £7 billion boost to productivity. I think that speaks to the importance of digital productivity and competitiveness in our small business sector. Yes, I am incredibly proud that we are ranked eighth in the world for innovation, but we are 31st on digitalisation in the small business sector, and the level of digitalisation in that particular segment of companies is where Denmark was 10 years ago. That gives a sense of how important this is. I am sure that many of us know businesses in our constituencies that are very successful and doing well, with five to 50 or 100 employees, but that still use paper invoices and some very basic management systems. This is a very targeted scheme that is designed to help those businesses adopt digital technology.

Finally, turning to the very sensible point made by the hon. Member for West Dunbartonshire, from north of the border, I completely agree that this is, as he called it, “a state issue”, which is why we are absolutely determined to ensure that it goes across the whole UK, in Scotland, Northern Ireland, Wales and England. His point about cyber-security was well made. It was one of the issues considered in the assessment of how the scheme would work, and the system for making sure that only authorised procurers are part of the scheme. However, I will raise his point with the National Security Council, because one of the ways that cyber-security can be threatened is by getting into the software in small businesses at the bottom of the supply chain. It is a very good point, but I am delighted to know that the project also has support north of the border.

Question put and agreed to.