Advanced Research and Invention Agency Bill

Greg Clark Excerpts

Report stage & 3rd reading
Monday 7th June 2021 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

It is a pleasure to follow the right hon. Member for Doncaster North (Edward Miliband). It is a particular pleasure as Chair of the Science and Technology Committee to warmly congratulate the ministerial team for bringing this important Bill to such a happy conclusion in this place. I pay tribute to the Secretary of State, the team of officials in the Department and the Clerks in the House, and to the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Derby North (Amanda Solloway), whose enthusiasm and charm contributed in no small part to the sense of consensus, good feeling and good will that there is about the Bill. The fact that its House of Commons stages culminate after the weekend of her birthday is absolutely fitting, and I congratulate her on that.

As Members know, the Select Committee took extensive evidence on the Bill and published a report. We had some fascinating sessions, including a rather less high-octane performance from Dominic Cummings when he came to talk about science policy, as opposed to covid. I think it is a fair reflection to say that the suggestion of this agency, and indeed the important role that science played in the manifesto on which Conservative colleagues were elected, was an important contribution, whatever disagreements and disputes there may be on other aspects.

We can agree on several things. First, it is desirable and appropriate, when we are a science superpower, that we have agencies that do things differently from others. Diversity is a strength, and it is a good thing that we are having a very new agency doing things in a very different way. I think that that has been evident in the contributions we have had.

We took the view on the Committee that it is important that ARIA does not spread itself too thinly. Although £800 million is a lot of money, when it comes to substantial, world-changing projects of inquiry, it can soon go. It seemed for a time today that the budget would be rising not to £800 million but to perhaps £4 billion a year, in which case the advice of the Committee to—in the words of the book by the right hon. Member for Doncaster North—go big on a smaller number of projects may have been redundant, and we may have been able to do everything. However, it seems that that is not going to be the budget for ARIA, and the advice that the Committee has given the incoming chair and chief executive does stand: we should make sure that we do a few things well, rather than many things superficially.

On the subject of the chair and chief executive, leadership is crucial. The hon. Member for Blackley and Broughton (Graham Stringer) emphasised the difficulty and the importance of choosing them, comparing it to electing a Nobel prize winner. That is quite a high bar, but I hope we will find people equal to the task, and they should be encouraged. I hope that those people, when they are appointed, will come before our Select Committee, not because we want to tie them down in any way and to constrain them with bureaucracy, but quite the reverse: our Committee champions science—we are enthusiasts for science—and we want to understand the ambitions and the motivation of the new team.

Achieving stability for a long-term agency such as ARIA is of great importance. In a Parliament that is limited to five years, and when Governments change from time to time, finding mechanisms to entrench institutions and policies that are there for the long term can prove challenging. David Cameron thought that passing a law to require 0.7% of GDP for aid spending was a solution to precisely that, but we found that there are circumstances in which it is not possible to achieve that. In office, I set up the Industrial Strategy Council to inject a bit of stability, but that is not continuing. So these things are challenging. I know that the intention of Ministers and the whole House is to achieve longevity. I think how this very desirable objective can be implanted will require a bit of thought.

The reforms that are embodied in this legislation—low bureaucracy, risk taking and the ability even to fail—are important to encapsulate in ARIA, but that is not to say that the rest of the research landscape could not benefit from those reforms. I hope that the Minister’s appetite, demonstrated through the passage of the Bill, to reform science funding and find ways to do things better and vigorously will not be completely satisfied with the passage of this Bill, but that, with the Secretary of State’s enthusiastic support, she will apply herself to the funding landscape more generally in order to have that same principle of vigour there.

The proposal for this new research agency was included in our party’s 2019 election manifesto and then the Queen’s Speech at that time. Two years on, we are at the point of recruiting the chief executive and the chair, and sending the Bill to the other place to make further progress. I hope that the Lords will give it their customary scrutiny with rigour and enthusiasm, but that they will not detain for too long because this is an important institution, which we want to see up and running and strengthening further our great attributes in British science as soon as practically possible.

10-point Plan: Six Months On

Greg Clark Excerpts

Tuesday 18th May 2021 Commons Chamber

[Kwasi Kwarteng]

The right hon. Gentleman raised a number of points. The heat and buildings strategy was always due in 2021; I know that because I commissioned it when I was the Energy Minister. I hope it will be published shortly. We also have a hydrogen strategy. He mentioned that our £240 million hydrogen fund was little compared to other countries, but private sector investment has been very successful in the deployment of offshore wind. The reason we have a commanding position—the No. 1 position—in offshore wind deployment is not because of the Government writing cheques; it is because the Government created incentives for the private sector to invest. That will be exactly the way in which we will scale up the hydrogen economy.

The right hon. Gentleman mentioned offshore wind and the UK content of the supply chain. We are absolutely focused on that; we potentially have an auction round 4 at the end of this year, and I am committed to increasing—in fact, we have policies to increase—the level of UK content in offshore wind. The GE Renewable Energy announcement in Teesside only a couple of months ago, in which it committed £142 million, is exactly the kind of investment and commitment to the UK supply chain that we want to see.

[Greg Clark (Tunbridge Wells) (Con)]

Point 4 of the 10-point plan refers to the need for large-scale battery factories for electric vehicles—sometimes called gigafactories. They need to be up and running within five years, so will the Secretary of State update the House as to where we are in securing them? Will he also comment on the state of discussions about the future of Vauxhall at Ellesmere Port, with its ambitions to build electric vehicles there?

[Kwasi Kwarteng]

I am pleased that my right hon. Friend mentions gigafactories and the opportunities that they represent. There are conversations as we speak between people who are making batteries and the car makers; clearly, the dynamic between the auto manufacturers and the people who will be making the batteries is an important one. I hope to make a positive announcement about that soon. In relation to Ellesmere Port, there are very positive discussions with Stellantis. I am very much engaged with this matter, and we are particularly hopeful that we can make some movement in the summer on this too.

Advanced Research and Invention Agency Bill

Greg Clark Excerpts

2nd reading
Tuesday 23rd March 2021 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

It is an honour to speak in this debate and to follow the right hon. Member for Doncaster North (Edward Miliband), and to warmly welcome the introduction of this important Bill. This is an extraordinary time for science, as the Secretary of State and his shadow have made clear. The interest in and standing of science in this country and around the world have never been higher during my lifetime. In a year, we have gone from discovering a lethal new virus to having not just one but multiple effective vaccines against it. That has never been done in the history of science, even going back to Jenner. This is a fantastic time for the House to be backing, as it evidently is, further investment in and progress of science in the UK. For all the horrors of the last year, some of the lessons that can be learned already—for example, the testing of new scientific procedures in parallel rather than in sequence—may, in not too many years’ time, save more lives than have been lost during the last year. We need to reinforce this.

British science is not just exceptional in the life sciences. Whether it is in space and satellites, with 40% of the small satellites in orbit above the Earth today being made in Britain, or the fact that the next generation of batteries are being researched by the Faraday Institution in Oxford, we have in this country so many of the pieces of science and technology that are transforming the world. This is at a time when the Government have made a historic commitment to invest in science. When I occupied the Secretary of State’s position, I was pretty pleased to negotiate out of the Treasury an increase in science funding from £9 billion to £12 billion a year—the biggest increase that had ever been achieved—but this Government have committed to an extraordinary increase to £22 billion a year by the end of this Parliament. That is the important context of the Bill.

For our inquiry, the Science and Technology Committee took evidence from people all around the world, including current and former staff of DARPA, and in our report of 12 February, we welcomed strongly the £800 million being committed to this new institution. Like the Secretary of State and the shadow Secretary of State, we recognise the important contribution that a new body outside the main research and development system could make, benefiting from a different culture. We saw the benefits to be had from transformational research that may be riskier than is commonly funded. The House should expect that quite a lot of the projects undertaken by this agency will fail, and we should not be quick to criticise that, because transformational breakthroughs are usually accompanied by failure on the way, and we need to be used to that.

Our report asked questions that I hope will be clarified as the Bill moves through this House and the other place. The question of what the agency’s focus will be is a legitimate one, if only for the fact that it is easy to dissipate £800 million in so many projects that we do not get the transformation that is in prospect. With that budget, and based on the evidence we took, our Committee recommended that the organisation should have no more than two focal points. The question of whether it should be about blue-sky research and brand-new thinking, without particular regard to the application, or whether it is looking to turn already nascent good ideas into practical applications, should also be clarified.

The role of Ministers and the chief executive, and the choice of the chief executive, will be important. Our Committee found that it is very important that, in pursuing our ambitions for ARIA, which is ultimately 1% of our annual research funding, we do not forget the other 99%, given some of the criticisms of bureaucracy and micromanagement that have been advanced by friends and to which ARIA is the answer. In fact, the founding chief executive of UKRI, Sir Mark Walport, thought that this was a good moment to refresh some of the procedures that it operates under.

Finally, it is important to state that we welcome ARIA because it is in the context of rising science funding. But it is paradoxical that, just at the point that we have the biggest increase by far in science funding and the whole scientific community is rejoicing at this country embarking on a golden age of scientific research, we should unexpectedly have the prospect of cuts to the science budget for the next year or two. To put it into context, the £2 billion subscription to Horizon, which has never been part of the science budget before, would amount to about a 25% cut in UKRI’s budget, and the official development assistance reduction would mean £125 million of cancelled projects.

This Bill reinforces the commitment that the Government and, I hope, the House make to building on the successes of UK and international science. The Secretary of State is a serious and committed advocated of this agenda. He was clear and candid when he appeared before the Select Committee. The decisions are not all in his hands, but I hope that he will continue to battle and, indeed, persuade his colleagues in the Treasury and the Prime Minister so that he can, I hope, have a long and flourishing tenure in his post, presiding over a period for UK science that we will look back on as a decisive acceleration of its potential.

Research and Development Funding

Greg Clark Excerpts

Wednesday 17th March 2021 Westminster Hall

[Greg Clark (Tunbridge Wells) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing this debate. I am a little disappointed that he did not burst into song at the finale of his speech, but I recognise the important points made.

The hon. Gentleman is absolutely right that this is a time in which the profile of, and gratitude for, UK and international science has never been higher across the country and the world. The excellence of British science has been particularly prominent, whether in the city that he and my hon. Friend the Member for South Cambridgeshire (Anthony Browne) represent, or in other great cities and towns across the country that host some of the best scientists in the world, working in collaboration with others across the world. It is no coincidence that the first pillar of our global strategy—in the integrated review of security, defence, development and foreign policy published yesterday—is science and technology, specifically to grow the UK’s science and technology power in pursuit of strategic advantage. That is right and it represents an exciting prospect in the light of what we have discovered about the possibility of science moving quicker than we ever thought possible to save lives across the world. We are also seeing, in other aspects of the response to the pandemic, a real acceleration in the deployment of technologies, even if they are far removed from medical sciences.

The new Secretary of State for Business, Energy and Industrial Strategy confirmed this morning that it remains the Government’s intention and commitment to invest 2.4% of GDP in science by 2027, and to achieve a public R&D budget of £22 billion of investment in science, so this should be a boom time for science and research. With the confidence of the public and the unprecedented commitment that the Government have made to doubling the science budget, we should be able to do more things to change more lives. Just at this moment, however, for some of the reasons mentioned by the hon. Member for Cambridge, science faces the prospect of having to retreat.

First, two weeks before the beginning of the next financial year, our principal science research body, UKRI, does not yet know what its budget will be for the year ahead. As we know, especially for science projects, long-term funding is crucial to contracts and investigations that take many years and months.

Secondly, there is uncertainty, as the hon. Gentleman said, about whether the UK’s contribution to Horizon Europe will be deducted from the science budget. In the past, what we got out of Horizon 2020, as it was known, was separate from the science budget. It has been suggested that our contribution to that project will be £2 billion a year, which would amount to as much as a quarter of the UKRI budget, meaning that at a time of intended advance, programmes such as the Faraday Institution’s research into batteries might have to be cut. In evidence to my Committee this morning, Dominic Cummings made it clear that the Prime Minister’s intention in the Brexit negotiations was always that that subscription should not be settled by cutting the science budget.

Thirdly, the temporary reduction in ODA spending that the hon. Gentleman mentioned is already causing UKRI to have to terminate some existing grants and leaving it unable to initiate any new awards. Sir Jeremy Farrar of the Wellcome Trust has said that the National Institute for Health Research could see a cut in global health funding of 28% just at the time when covid has established the importance of that international work. There is also the importance of restoring the fundraising proceeds that charities have lost.

We know that the Minister and the Secretary of State are committed to getting the budget we need. Now is the time to fight for that. The Minister enjoys the support of my Committee and, I am sure, of the whole House, in fighting those battles to give clarity to UK science.

Budget Resolutions and Economic Situation

Greg Clark Excerpts

Tuesday 9th March 2021 Commons Chamber

[Kwasi Kwarteng]

I have not come here to defend or rebut any of the wonderful measures that we took under my right hon. Friend’s leadership. I am very conscious of the fact that many people want to take part in this debate, and I am afraid that I have to press on.

The researchers and manufacturers have done an extremely good job, as my right hon. Friend says, in shoring up our response to the crisis. The Budget provides an additional £65 billion of measures in response to covid, designed to support the economy this year. It covers an extension of the furlough scheme, which has already supported 1.3 million employers and more than 11 million jobs, providing vital funds to households and communities throughout our country. It has added to the near £20 billion of support that the Treasury has paid out to support 2.7 million self-employed people.

The Budget presents a dynamic and generous plan to help businesses to get up to speed. We are providing restart grants of up to £18,000 to more than 680,000 business premises. We are also providing further support for hospitality and retail businesses who may be more affected by restrictions when they reopen. While our plan for jobs has been given a £126 million boost supporting 40,000 more traineeships and doubling the cash incentive for firms taking on new apprentices, the Budget ensures that more people are able to access secure, skilled work.

Of course, there can be no denial that the jobs market has changed profoundly over the past year.

[Greg Clark (Tunbridge Wells) (Con)]

Will my right hon. Friend give way?

[Kwasi Kwarteng]

I am very conscious, as I am sure my right hon. Friend I, that many, many Back Benchers want to take part in the debate. I understand that he is on the call list, so I am afraid I am going to have to make more progress.

It is no secret that over the years, and even in years of strong growth, prosperity has not been spread fairly between the regions and nations that make up our United Kingdom. That is an imbalance that this Budget seeks to correct, with the Department for Business, Energy and Industrial Strategy leading the charge. Where regions have been left behind by the decline of old industries, we will create new industries and support sectors as they transition to a low-carbon, sustainable and competitive future.

[Greg Clark]

Will my right hon. Friend give way on that point?

[Kwasi Kwarteng]

I must press on. Lots of Back Benchers want to speak. However eminent and distinguished my right hon. Friend is, there are lots of other people who want to speak.

We are backing the development of hydrogen hubs in the Tees Valley and Holyhead, to breathe new life into coastal and post-industrial communities while we drive a new clean energy transition. We are establishing four carbon capture and storage clusters across the next two decades, and we hope that they will play their part in decarbonising our industrial processes. We are investing tens of millions of pounds in the Aberdeen energy transition zone and the global underwater hub.

We are providing a support package of more than £2 billion to Britain’s incredible auto industry, with £500 million going towards the growth of our electric vehicle supply chain. That package will help to support and safeguard nearly 170,000 jobs in the UK auto sector, including in the north of England, the west midlands and Wales. We intend fully to deliver a boost to the ambition to build at least one UK gigafactory before the end of this Parliament, and we hope to secure investment for others in the longer term.

[Greg Clark]

I am grateful to my right hon. Friend and successor for giving way. Will he acknowledge that the battery manufacturing innovation centre and the Faraday challenge, which galvanised the move to providing batteries for electric vehicles, were part of the industrial strategy, as was vaccine manufacturing? Can he explain why it is thought appropriate to abolish that strategy? Is it not better to have a plan, rather than no plan?

[Kwasi Kwarteng]

I hear my right hon. Friend’s passionate defence of his own work, and I commend a lot of his work. I have read the industrial strategy comprehensively, and it was a pudding without a theme, in my view. I feel very strongly that the conditions of 2017 do not apply to 2021, and I am very pleased to announce to the House that we are morphing and changing the industrial strategy into the plan for growth. I am happy to take further interventions on that, should they arise.

What we have announced in these packages is levelling up in action. There will be new investment in new industries, creating new jobs and driving real change in communities across the UK. With these examples, we are talking about a vision for the future of the kind of country we want to be: a country that hosts good-quality, high-skilled, long-term jobs in every community and that takes its commitment to net zero extremely seriously. I would like to commend the work of my right hon. Friends the Members for Maidenhead (Mrs May) and for Tunbridge Wells (Greg Clark) in passing the net zero legislation in 2019. That was a signal piece of legislation for which I commend them heartily. As Secretary of State for Business, Energy and Industrial Strategy—which is still the name of the Department—I am very pleased that we are committed to net zero in the way that we are.

Because of all the profound changes that we have seen over the last three or four years, as well as our departure from the EU, our legislation to end our contribution to climate change by 2050 and the unprecedented impact of the coronavirus, I believe that we must take a fresh look at our plans for industrial policy and long-term economic growth. As a consequence of all this, alongside the Budget, we have published “Build Back Better: our plan for growth”. Our cross-government plan for growth signals a departure from the industrial strategy brand and details a renewed focus on infrastructure, skills and innovation. It reflects new opportunities available to us following our exit from the European Union, which was successfully achieved as a consequence of the deal that we struck at the end of last year. This opens up new ways to drive growth, build on our competitive advantage and support a vision for a truly global Britain. We will draw on the valuable lessons we have learnt from the 2017 industrial strategy as we transition to this new, more focused and more ambitious plan for growth.

I want to reassure the House that the energy of my Department is entirely focused on building back better after the coronavirus pandemic. It is leading the Government’s work on supporting British industry and priority sectors, and I am happy to acknowledge that we are building on the incredibly dynamic and good work that was pursued by my right hon. Friend the Member for Tunbridge Wells. We will publish our innovation strategy in the summer. We will set out details of our approach to supporting sectors, places and technologies in the innovation strategy. Those will give a clear indication and sense of purpose as we seek to shape the UK’s future. My Department is already leading on strategies with respect to net zero, hydrogen and, of course, innovation itself, as well as the space strategy. We are engaging on a comprehensive programme of work to protect and create jobs as we transition to net zero.

The principle underlying all this effort is, of course, the green recovery. We fully intend to end, and we will end, our contribution to climate change by 2050, and we will do so through investments and innovations such as the ones I have just mentioned. Last week’s Budget builds on the framework set out by the Prime Minister’s 10-point plan, as well as on the support announced at the spending review and in the national infrastructure strategy.

I am delighted that my right hon. Friend the Chancellor spoke fulsomely about the UK infrastructure bank. The bank will target investment in green projects, which will help us meet our net zero targets in the public and private sectors throughout the country. It will provide a global centre of excellence and advisory support for net zero projects across the country.

We have committed an initial £12 billion of capital and £10 billion of guarantees. By crowding in— attracting—private investment, we fully expect the bank to support at least £40 billion of investment in our precious infrastructure. This investment will help us to amplify success in decreasing emissions, which we have already reduced by 44% against 1990 levels. That is by far the best performance in the G7.

With our strengths in many sectors, from offshore wind to hydrogen, carbon capture technologies and zero-emission vehicles, we are well placed to seize the opportunity of the green transition and lead a global green industrial revolution. The 10-point plan, which the Budget expands on, puts us in a very good position to achieve that goal.

Backed by £12 billion of public investment, the 10-point plan will reinvigorate our industrial heartlands in the north-east, the north-west, Yorkshire, the Humber, the midlands, Scotland, Wales and elsewhere. It will support the creation of hundreds of thousands of green jobs across the UK by 2030. It represents a really exciting and dynamic vision for the development of economic opportunity throughout this country.

This is a Budget that is timely in its interventions, entirely realistic in its ambitions and, above all, remorselessly and unapologetically optimistic about the future of the United Kingdom. It outlines an investment-led recovery, with a targeted, laser-like approach to levelling up every nation and region.

Thanks to the actions of the Government, we will emerge from this virus sooner and stronger than many would have anticipated. Thanks to the Budget, we have the means and the tools necessary to continue our trajectory towards recovery in the next year. We will be embracing innovation, we will be creating green jobs and we will be rejuvenating our industrial heartlands and spreading opportunities. We look forward to building back better throughout the entirety of the United Kingdom.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Greg Clark Excerpts

Monday 1st March 2021 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the future of car manufacturing by Vauxhall at Ellesmere Port and the Government’s strategy for battery manufacturing.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I pay tribute to my right hon. Friend for the great work he did as Secretary of State. He was the first Secretary of State for Business, Energy and Industrial Strategy, and I think that we can all say that we appreciate the outstanding work he did at that time.

The Government are absolutely committed to ensuring the future of manufacturing at Ellesmere Port and to secure the jobs and livelihoods of the workers at the plant. Since I was appointed Business Secretary last month, I have held a number of meetings with both Vauxhall and its new parent company, Stellantis, to support the company to make a positive investment decision. Only last week, I also held a constructive meeting with the general secretary of Unite, Mr Len McCluskey. Over the coming days and weeks, I, fellow Ministers and officials at BEIS will continue this intensive dialogue with the company.

More widely, the Government are continuing their long-standing programme of support to keep the British automotive sector at the forefront of technology and maintain its competitiveness, building on the work that my right hon. Friend did through the automotive sector deal.

It is my priority as Business Secretary to ensure that the UK continues to enjoy the benefits from our transition to ultra low and zero emission vehicles by continuing to build an agile, innovative and cost-competitive supply chain, which we need to secure vital international investment. With that in mind, we remain dedicated and absolutely committed to securing UK battery manufacturing. As part of the Prime Minister’s 10-point plan, we have already announced £500 million to support the electrification of vehicles and their supply chains, and other strategically important technologies, through the automotive transformation fund over the next four years. We continue to work with investors through the automotive transformation fund, and to progress plans for manufacturing the batteries that we will need for the next generation of electric vehicles here in the UK.

The Government and industry have jointly committed almost £1.5 billion through the Advanced Propulsion Centre and Faraday battery challenge to support the research, development and manufacture of zero and low emission technologies. Between 2013 and 2020, the Advanced Propulsion Centre has funded 67 collaborative R&D projects, creating and safeguarding nearly 47,000 jobs, with projected CO₂ savings of 244 million tonnes.

I repeat: we are 100% committed to making sure that the UK continues to be one of the best locations in the world for automotive manufacturing, and we are doing all we can to protect and create jobs while securing a competitive future for the sector here in the UK in particular, including at Ellesmere Port.

--- Later in debate ---

[Greg Clark]

I bring it to the House’s attention that I am a vice-chair of the all-party parliamentary motor group and the chemical industry all-party parliamentary group.

I am grateful to the Secretary of State for his response to my urgent question and for his kind words. The industrial strategy made a number of commitments. One was to make Britain a home for vaccine development and to build vaccine manufacturing capability. Another was to make Britain a leading manufacturer of electric vehicles, including the batteries that power them. I mention them both not to claim special prescience, but rather the opposite; both are obviously required if our industrial strengths are to continue in the future.

In the case of electric vehicles, there are three important facts. First, we have one of the most important, diverse and efficient car industries in the world, employing over 800,000 people in all parts of Britain. Secondly, by 2030 no new car will be sold in Britain with simply a petrol or a diesel engine. Thirdly, unless the batteries for vehicles made in the UK are manufactured in Britain within five years, the cars that they power will no longer be able to be exported tariff-free to the EU. We therefore urgently need to install the manufacturing capacity in the UK. That means not just one gigafactory, but many. It all needs to be planned, built and operating at scale within five years.

In the case of Vauxhall at Ellesmere Port, as the Secretary of State says, a decision is imminent as to whether a new electric model will be built there. The same is true of Jaguar Land Rover in the west midlands and supply chain companies such as GKN. A laissez-faire approach will not do it, and neither will just general encouragement. It requires sleeves-rolled-up concrete action to be taken now between Government and industry, just as was the case with vaccines. Will the Secretary of State, for whom I have a high regard, make this commitment today and do whatever it takes urgently to ensure that Britain is a global force in manufacturing electric vehicles long into the future?

[Kwasi Kwarteng]

My right hon. Friend is quite right. The issues raised by his question are of critical strategic importance, and I fully appreciate the work that he did on driving the industrial strategy. As he pointed out, the industrial strategy set the foundation for vaccines and the success of the vaccine roll-out. He is quite right to point out that we need the same rigour and focus in ensuring that the United Kingdom continues to be an attractive place in which to invest for the manufacture of electric vehicles, in order to meet the Prime Minister’s 10-point plan. Electric vehicles were a key part of that 10-point plan.

UK Space Industry

Greg Clark Excerpts

Thursday 4th February 2021 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

The morning after I was appointed

the science Minister, and two years later Business Secretary, my very first engagement was to meet all the representatives of the UK’s space sector at the Farnborough airshow. I did so because I was convinced right from the outset that this was an industry where we could forge a very strong future for the UK. It was an opportunity—technologically, in engineering terms, economically, regionally and scientifically—from which we could prosper.

One thing we know, looking ahead to the future, is that the whole world is going to be using more satellites and more satellite technology, whether for monitoring crops or helping to navigate autonomous vehicles around our streets. Because our skills in all the related disciplines, from precision engineering to the analysis of big data, are so well developed and so profound, this is a huge opportunity for us. When we launched the industrial strategy, we reserved a very big place within it for space and satellites for that reason. Two of the major components of that industrial strategy were the national satellite test facility that my hon. Friend the Member for Wantage (David Johnston) referred to and the competition to have satellite launch facilities. As we have heard in this debate, if we are going to build the technology, how much better it is to be able to launch satellites as well.

The Space Industry Act went through the House at that time, through the industrial strategy. It was an exciting time for an exciting sector, but I have to say in all candour that I am concerned that, in recent months and years, the Government seem to have been a bit more ambivalent about industrial strategy than I think is appropriate given the opportunities. In the 2017 industrial strategy, we thought that we should have capacity for vaccines manufacture so we established a vaccines manufacturing and innovation centre. We thought that we should have capability in battery manufacturing; we established a Faraday challenge. We established the initiatives that we have today.

I hope that, in the months ahead, the Government might reflect that, although not everything about that strategy was right, to have a forward plan—bringing industry, academia and places all together to work together to put the whole weight of the country behind that—is a recipe for success. It is not too late to do that, but other countries are looking at the same possibilities that we have. So I hope the Minister and the new Secretary of State will take up with enthusiasm the potential of industrial strategy once again.

Energy White Paper

Greg Clark Excerpts

Monday 14th December 2020 Commons Chamber

[Alok Sharma]

I thank the right hon. Gentleman for his comments. Let me just say to him: we are all revolutionaries now. We believe in the green industrial revolution, as he does himself. I note the points that he has made, but I will tell him what some in the energy sector have been saying about the White Paper. The chief executive of Energy UK has said:

“Today’s White Paper reveals the scale and opportunity of the energy transition”.

The chief economist of the CBI has said:

“The Energy White Paper is an important next step in our plans to reach our net-zero emissions target…Business stands ready to deliver the investment and innovation needed to turn ambition into reality”.

The chief executive of RenewableUK said:

“Today’s white paper provides greater clarity to the companies investing across the UK to deliver our net zero emissions target.”

The acting chief executive of Citizens’ Advice said:

“There’s a lot to welcome in today’s announcement.”

I could go on. [Hon. Members: “Go on!”] No; I know that other colleagues want to ask questions.

This Government have shown a great deal of ambition when it comes to the green industrial revolution. The right hon. Gentleman has seen the road map that is being laid out. We have, of course, had the Prime Minister’s 10-point plan with the £12 billion investment, leveraging in three times as much from the private sector, creating and supporting 250,000 jobs by 2030; he has seen the nationally determined contribution that was published, which was universally welcomed; and he will now have seen that the energy White Paper has been published, building on the 10-point plan. He talked about the fact that this White Paper has now appeared. When I spoke about this last week with the Chair of the Select Committee and said that I would get it out by Christmas, he asked me, “Which Christmas?”. I was keen to point out that it was Christmas this year.

Let me address some of the points that the right hon. Gentleman has raised. First, he talked about the CCC, which has made a recommendation regarding the NDC of a reduction of at least 68%. We have adopted that recommendation, and that puts us on the pathway to net zero by 2050. The right hon. Gentleman also talked about tidal. He will know that we have had a call for evidence on that subject. There will be an opportunity through the contracts for difference auction process next year to bring forward projects in that area. On offshore wind, let me be clear that we are talking about the 60% UK supply chain. He will know that in the last few days we have launched the ports infrastructure competition, which will be an opportunity for ports to bid for Government funding. This will ultimately allow us to build products relating to offshore wind in the UK and to create jobs in our country.

The right hon. Gentleman talked about financing for nuclear. As I said, we are at the start of that process of discussions with EDF, the developer at Sizewell C. There is a whole range of financing models that we need to work our way through. On hydrogen, he will know that the Minister for Business, Energy and Clean Growth, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), has been doing a brilliant job, working with the sector and academics. He leads the Hydrogen Council. I will be setting out our strategy at the start of next year and, of course, it is also about unlocking private sector investment.

The shadow Secretary of State talks about fairness for consumers. I am pleased that he welcomes that, and, as he will have seen, the acting chief executive of Citizens Advice has also welcomed the White Paper. In conclusion, of course we need to go further, but the Government are putting their best foot forward in delivering on a green industrial revolution.

[Greg Clark (Tunbridge Wells) (Con)]

Without wishing to disinter policies buried under the “Ed Stone”, the policy of the right hon. Member for Doncaster North (Edward Miliband) was a price freeze rather than a price cap, which would have led to higher bills for consumers as prices fell.

I welcome the White Paper that the Secretary of State has published today. Does he agree that we are on the verge of a real transformation in technology, in which energy can go from something that was expensive, dirty and needed to be suppressed and eked out to something that can be clean, cheap and abundant? To drive that revolution forward, will he make sure that he invests in energy research and technology and that he changes regulation, so that the incumbents cannot frustrate the roll-out of those technologies nor deny to consumers the benefits that they bring about?

[Alok Sharma]

Of course, my right hon. Friend led on all this work when he was Secretary of State in the Department and I thank him for that. The White Paper is a product of some of the excellent reforms that he undertook in Government, including the energy price cap. I agree with him: of course we want to invest in energy research. He will have seen the settlement that we got at the spending review. We will power ahead in research and development and be a leading country when it comes to R&D.

National Security and Investment Bill

Greg Clark Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

It is a pleasure to follow the thoughtful speech of the hon. Member for Dundee East (Stewart Hosie). May I join my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) in paying tribute to the Front-Bench team for their courtesy in being open about the development of the Bill and for their communication with all parties in the House?

This is an important Bill at an important time. In recent years, we have seen a tendency on the part of some countries to move towards national measures that seek to protect their domestic economics from the open conditions of international trade, not only in goods and services but in ownership and intellectual property, and we of all nations should be a voice against that. Few nations have prospered through pursuing a policy of national self-sufficiency. Over time, they have become deprived of innovation, competition and investment, although the exposure and experience of international trade and investment can be disruptive and uncomfortable. In the end, workers become less productive than in other countries, consumers pay more and those countries use technology that is behind what other more open economies allow. In other words, they become less prosperous.

The importance of this Bill pivots on its title. Is it exclusively about national security, or is “and Investment” a doorway to a more restrictive view of overseas investment more generally? I am pleased that my right hon. Friend the Secretary of State made it absolutely clear that the Government have decided that it is the former, rather than the latter, although there are some dangers that I want to touch on.

Do we need a statutory framework to ensure our national security when it comes to commercial investments? Yes, of course we do. There are commercial activities conducted in this country that are essential to our national security—defence contractors are an obvious example. Public policy has always recognised that, whether through the use of export controls on their products or, in the case of ownership, through golden shares and the intervention powers of the Enterprise Act 2002 for national security, which have been referred to.

Does the framework need to be kept up to date? Yes, of course it does. As the Secretary of State made clear, technologies that are now pivotal to our national security had not been dreamed of 18 years ago when the Enterprise Act passed through this House. The nature of some of those technologies is such that their financial value may not be reflected in the ownership of the company concerned, so they may be pivotal but not trigger the turnover test. The turnover and the value of the transaction may not be a dependable guide to their importance to national security. The control of those technologies may not be confined any more to takeover bids for public companies; it may include ownership outside the stock market of intellectual property or other assets.

Most nations on earth have a framework for overseeing the national security consequences of investments. It is important that we have one and that ours is up to date. The Government are right not to expand the Bill beyond national security or to introduce, as the right hon. Member for Doncaster North (Edward Miliband) said, a wider public interest or industrial strategy test. I say that as the author of our current industrial strategy, of which an essential pillar is our business environment. That strategy says that we need to continue to be

“an open, liberal free-trading economy in which new businesses can be created easily”

and

“existing businesses can attract investment”.

It is obvious that if a British company has succeeded and has made an international impact, we want it to continue to succeed and prosper in this country, and to do so with its headquarters and operations here. That goes without saying. The most important thing is that the company is founded and prospers in the UK in the first place, as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) said. Especially in fields such as the tech sector, if we tell the founders of new businesses that, should they succeed, they will be excluded from the possibility that they can receive overseas investment, or at the very least that it will be heavily questioned if they should cede control of the business, and that the more their business succeeds, the more draconian the restrictions are likely to be—although Silicon Valley continues to be a major source of international capital investment—the consequence, no doubt unintended, may be that those firms will not be founded here in the first place but will go to places where there is no risk of there being stranded assets.

[Bob Seely]

My right hon. Friend is making an important point, and there is clearly friction on this side over what we see as the crux, but does he accept that the United States and Australia—two free-market nations—will have significantly tighter restrictions after this Bill than we will, and does that concern him?

[Greg Clark]

Of course we should look at the example of other countries; I am sure we will do so during the course of the Bill. However, I would say to my hon. Friend that those two countries are very different in their markets and the size of their economies. The pool of capital that is available to start-up companies in the US is vastly greater than it is in the UK at the moment, although I hope that will change, for reasons that I will go on to discuss. Australia, conversely, is a much smaller economy, which does not have the network of policy regulatory innovation that we have.

We have been a leader; that is our international reputation, and one reason that transactions are conducted in this country is the confidence in our rule of law. We should emphasise and champion that, rather than feeling compelled to follow what other countries are doing in their entirety. Our policy—our industrial strategy—must be to make Britain an even more attractive place for innovative companies to be founded and to stay—not because they are compelled to do so, but because the environment that we provide, in terms of scientific research, educated and trained people, the availability of capital at every stage in their development and the public policy environment make it an attractive place for them to want to be.

Neither must our regime establish, in my view, a list of countries that cannot invest at all in the UK. The test must genuinely be about national security. That is very appropriate. China has been mentioned already in these discussions, and of course it is right and proper that the national security concerns that the House has about China should be reflected through this regime, and these powers are important for that. However, when I was sitting in my right hon. Friend the Secretary of State’s place, I fought hard to save, for example, British Steel in Scunthorpe, Skinningrove and Teesside. The Chinese steelmaker that bought the company, Jingye Group, is essential to the employment of many tens of thousands of people across the north and the east of England, and more in the supply chain. From my recollection, there was no intellectual property vulnerability in terms of its operations. Indeed, the retention of that substantial steelmaking capacity has enhanced our economic resilience, whereas losing it would have seen us relying on imports. I might say the same for Geely, the owner of the London Electric Vehicle Company, which my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), being a west midlands MP, will be familiar with, and which gives valuable jobs to many people.

[Richard Graham]

My right hon. Friend is making a very good case for why it is important to look at each investment in its own right. Geely, which bought the London Taxi Company, produced electric vehicles and now exports them to the Netherlands and France while continuing to manufacture in Coventry, is a good example of why that is so important. Does he agree that it is simply not good enough for this country to say, “China is Communist and we will not accept Communist investment, and therefore we will not accept Chinese investment.”? We must be a great deal more sophisticated and open than that.

[Greg Clark]

I would say to my hon. Friend that the Bill’s focus on national security is absolutely right. We should have a beady eye on national security, with substantial powers, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, to enforce that. I think the Bill has it right in its focus on national security.

The Committee that examines the Bill will need to consider in detail some of the provisions of the Bill as it is presented on Second Reading. It is essential to provide investors and UK firms with a sense of predictability and confidence, but that can be undermined if the law has administrative consequences that are unintended and not provided for. For example, there are strong reasons to think that there may be a deluge of notifications, as the hon. Member for Dundee East said, when the new unit in the Department is set up, and it must be geared up to handle that right from the outset.

The prospect of five years’ imprisonment for directors and fines of 5% of turnover, as my right hon. Friend the Secretary of State commends, for failure to notify under a mandatory regime within sectors defined as broadly as communications and transport is, in my view, likely to lead to many small transactions being notified under the voluntary regime for peace of mind regarding those very strong sanctions against an inadvertent breach. It is an enormous challenge for the Department to set up a new unit, especially since the current regime—or the previous one, since the powers are live—has dealt with a very small number of transactions each year.

As Secretary of State, I reduced the turnover threshold for review from £70 million to £1 million only two years ago. This Bill contains no de minimis threshold, and I will be interested to see during the passage of the Bill evidence of why a zero de minimis threshold is necessary, especially when the definition of technology assets extends to “ideas, information or techniques”, which is very broad. This could result in a very large number of very small transactions being notified defensively.

Even if businesses are confident that they will not be covered by the mandatory notification requirement, the advantages of voluntary notification and clearance, with its exemption from the five-year look-back, may prove to be very attractive and very important in baking in the approval of a transaction against reversal more than five years in the future. It is clearly the ambition of the right hon. Member for Doncaster North to add further public interest tests. As we approach the general election, it may well be attractive, as a defence against the action of future Governments, for companies to notify even when they do not have to. It is very important that the Department is geared up for that.

Much of the Science and Technology Committee’s work in recent months has been concerned with the nation’s response to the coronavirus. If we can learn one lesson from that—for example, from problems with the test and trace system—it is that, to have public confidence, we need to properly anticipate demand and to set up to meet it from the outset. If that demand is not supplied, public confidence, which is crucial for investment, will be undermined.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Does not the coronavirus provide us with another lesson, which is that Government historically have not been terribly good at assessing risk and modelling the response to it? I say that as a former Minister, like my right hon. Friend. I was always surprised, in all the Departments I served in, at how little time is spent on modelling outcomes of the kind we are now enduring.

[Greg Clark]

My right hon. Friend is right. To look ahead, we need to develop the capabilities to do that, and for a unit in the Department that previously did not have that responsibility—it was with the CMA, advised by others—that is a steep learning curve.

The foundational feature of the UK’s commercial reputation in the world is a place where people and businesses all around the world can be confident in investing. That derives in no small part from a public policy regime that is rational, stable and rigorously and efficiently administered. We should continue to aspire to take a global position of leadership in this area, so I welcome the focus of the Bill and its ambition to bring our arrangements up to date. I look forward to helping ensure that we can be proud of the Bill and see it as a contribution to our continued reputation for having the highest standards of corporate government and investment security in the world.

--- Later in debate ---

[Sir John Hayes]

The right hon. Gentleman made that point in his contribution earlier and it seems to me to be a profound one. In establishing the new processes and the new governance associated with this legislation, it is vital that the interaction with the intelligence services, and all the skills available to the Government to assess risk, is built in to their considerations but also to the process. I am not absolutely convinced that the Bill does that. It may be that there is sufficient flexibility, to take up a point raised in an earlier intervention, to allow the Government to do so, but I hope the Minister, when he sums up the debate, will provide reassurance that the connection between intelligence and risk assessment is as sure as it needs to be. I am grateful to the right hon. Member for North Durham (Mr Jones) for making that point.

[Greg Clark]

When the decision maker is a Minister in the Government, they benefit from the advice of the security services, including the National Security Adviser. That was certainly my experience as Secretary of State. All these decisions draw extensively on the advice of the national security apparatus. I do not think—my hon. Friend the Minister will clarify it when he winds up—there is any intended change to that.

Business and Planning Bill

Greg Clark Excerpts

2nd reading & 2nd reading: House of Commons
Monday 29th June 2020 Commons Chamber

[Alok Sharma]

Of course we want to make sure that businesses open up, and we want local authorities to help local businesses do that, which is precisely the reason for these measures. We will publish guidance alongside the measures in the Bill, and I would ask local authorities to adhere to it. If my hon. Friend has any specific suggestions, I would be very happy to hear from him, as would my right hon. Friend the Secretary of State for Housing, Communities and Local Government, who will wind up this debate.

[Greg Clark (Tunbridge Wells) (Con)]

My right hon. Friend is making a compelling case for giving a boost to many sectors of the economy, but will he reflect on the fact that some sectors will not be able to reopen because of the necessary rules? I am thinking of theatres, concert venues and other music venues. Given the need to adhere to the rules, will he make special provision for those that cannot trade their way out of difficulty?

On the point that my hon. Friend the Member for Bexhill and Battle (Huw Merriman) made, it would be very unfortunate if any of these venues, theatres or concert halls fell into insolvency, and we hope to avoid that, but in doing so we should guard against granting planning permissions that take them immediately out of those very valued uses. Will my right hon. Friend reflect on both during the passage of this Bill?

[Alok Sharma]

My right hon. Friend, who has previously served as Business Secretary with great distinction, raises a number of important points. On insolvency, he will know that with the support of both Houses, we passed the Corporate Insolvency and Governance Act 2020, which came into effect on 25 June. When it comes to providing support to businesses, I think the best thing we can possibly do is to open them up, and I know that that is a sentiment that he will appreciate as a former Business Secretary. I would love to be able to have the whole economy operating and opening up, but we all understand why we are taking a phased and cautious approach: we want to continue to meet our five tests, and we want to ensure that the R value stays below one. In the tourism sector and the theatre sector, which he mentioned, ministerial colleagues are working closely on these issues.

I turn first to the temporary measures in the Bill to step up the recovery of our hospitality sector. Our 127,000 pubs, restaurants and cafés, which employ around 2 million people, are the lifeblood of our high streets and town centres. Social distancing guidelines significantly affect their capacity to accommodate customers, and food and beverage service activity has fallen by nearly 90% in the last quarter. The Bill introduces a temporary fast-track process for pubs, cafés and restaurants to obtain local council permission to place tables and chairs on the pavement outside their premises.