Oral Answers to Questions

Debate between Jim Shannon and Anthony Browne

Thursday 14th December 2023 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

5. When he plans to publish further information on the UK sustainable aviation fuel mandate.

[The Parliamentary Under-Secretary of State for Transport (Anthony Browne)]

After four years in Parliament, this is my maiden voyage at the Dispatch Box. [Interruption.] Indeed, it is Christmas come early, and it is a gift that the first question I am asked comes from the hon. Member for Strangford (Jim Shannon).

The UK sustainable aviation fuel mandate is on track to start on 1 January 2025, with preparatory work on secondary legislation progressing well. We recognise that final decisions on the parameters of the mandate must be taken in a timely way to provide certainty for investment decisions, and we will publish those as soon as possible.

[Jim Shannon]

I welcome the Minister to his place and wish him well in his endeavours. It is always a pleasure to see some of the 2019 intake elevated to the Front Bench, so very well done. I thank him for his answer, as the issue of sustainable aviation fuel is important for my constituents. To ensure that we do not overshoot climate targets on the road to jet zero or net zero, will the Government consider introducing the SAF mandate under a greenhouse gas intensity scheme? That is quite a technical question, but I know it is one that the Minister is well up to answering.

[Anthony Browne]

I thank the hon. Gentleman for that question. I more normally get asked concerns about whether we are going to undershoot the target, rather than overshoot it, but it is a valid question. It is important for us that we are introducing the SAF mandate, and we must give certainty to the industry so that investment comes in. We have funded 13 different companies to set up SAF plants or do development, but we are looking at all the different options and nothing is off the table. We will consider all the different proposals and publish our response to the second consultation as soon as possible.

Finance Bill

Debate between Jim Shannon and Anthony Browne

2nd reading
Monday 28th November 2022 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

It is a pleasure to speak at the back end of the debate following so many fascinating contributions from the Government and Opposition Benches. I particularly enjoyed the comments from the shadow Minister, the hon. Member for Ealing North (James Murray), positioning Labour as the party of small business. I have long believed that that is true—the best way to create small businesses is to start with a big business and then elect a Labour Government.

I support the Government overall and this well-crafted autumn statement. It balances the books in a way that bears down on inflation without harming growth, and it has been done in a fair way, as many hon. Members have said, helping households who are struggling. The energy price guarantee and the retention of the pensions triple lock are particularly welcome. I also welcome the extra money for health and education. Like my fellow Conservatives, I do not like the fact that taxes are going up to the highest level for 70 years, but I accept that that is necessary and that we must accept sound money before tax cuts.

The main focus of my comments will be on an issue raised by several hon. Members: research and development. I very much welcome the fact that the Government are committing to £20 billion a year of public money for research and development, but my concern is about the changes to the R&D tax relief system. The Government have made major changes, with the system becoming more generous to big firms to make them more internationally competitive, but the rate of relief for small and medium-sized businesses effectively being cut in half, from 33% to 18.6%. It is a bit more complex than that, but that is the gist. Why are the Government doing that? As the Chancellor said in his autumn statement, it is to tackle fraud. Indeed, fraud is a problem—I have looked into that as chair of the Conservative Back-Bench Treasury committee —and we do need to tackle it. However, the trouble with this way of tackling research and development fraud is that it punishes legitimate research companies as much as fraudsters and chancers, lumping them all in together. There are better ways of doing that.

I am talking about this because it is a particularly big issue in my constituency. South Cambridgeshire is the life sciences capital of Europe. I have literally hundreds of life science companies, from the global headquarters of AstraZeneca down to the newest start-ups. Almost every village has a science park packed full of life science companies. Those small start-ups are at the cutting edge of research and development in life sciences. More research and development in life sciences is now done in small businesses than by the big pharma companies. Without them, innovation would be very slow and the UK would lose its position as a life science superpower. We talk about becoming a life science superpower, but we are one already, and most of the rest of the world recognises that.

It is in the nature of those small companies that they are research-heavy, but clinical trials mean that it could take 10 to 15 years to bring a product to market before they make any revenues. They are funded not by revenues from global sales of blockbuster drugs, like big pharma companies, but by investors who fund research for a decade or more before they have any chance of a return. Their financial models depend on the research and development tax credit regime, which is fundamental to them in leveraging funds from investors from around the world. It has been successful in making the UK an attractive place to do research.

[Jim Shannon (Strangford) (DUP)]

It is important to have research and development. It is also important that those companies can do their research on Parkinson’s, diabetes and heart disease, and all those things must have research and development investment. Does the hon. Member feel that the Government need to enhance that to their betterment and find cures for Parkinson’s, pancreatic cancer, diabetes and heart disease?

[Anthony Browne]

Absolutely. Many companies in my constituency and publicly funded institutes are doing research on those diseases. That is critical to people living healthy lives as well as to the economy, and the Government are absolutely right to support it.

The sudden cutting in half of research and development tax relief is a major challenge to the life science companies in my constituency, which are shocked at what is proposed —seemingly out of the blue. Many, if not most of them, are suddenly having to rethink their research plans. They are in shock particularly because it was proposed at such short notice—it will come into effect next year—and without consultation. They are having to go to their investors now and say that they will no longer have the money they thought they would and that they will have to cut back research and jobs.

Let me give the House a few examples of real companies in my constituency that I have been working with. PhoreMost combines artificial intelligence with drug research. I went to the opening of its laboratories in the village of Sawston. Neil Torbett, the chief executive officer, said:

“The current R&D tax system has been instrumental in our growth as a Cambridge-based Biotech, which has grown to over 50 highly skilled staff, raised £45 million in investment and entered into multiple pharmaceutical industry partnerships. Receipts from R&D tax credits form a critical part of our funding equation, and the proposed SME R&D tax relief cut will materially adversely affect our future growth plans within the UK.”

I opened the offices of bit.bio, another company in my constituency, which does the most amazing genetics research—I have mentioned it before. Mark Kotter, the chief executive officer, said:

“The assistance at the current level is a cornerstone of our financial projections, which also help us to attract equity funding, and any reduction in the claimable amount will have a significant impact on our ability to invest and grow at the desired rate.

As part of our forecast, we will be looking to increase our current headcount of 175 by approximately 30% in the next year, but quite simply this will not be possible if the tax relief changes announced in the Autumn Statement become reality.”

I could give countless other examples. This is dramatically changing the prospects of life science research in Cambridge.

I know that the Government want to champion life sciences as part of their ambition to ensure that we are a life sciences superpower. I have worked with the Government on that. Indeed, I welcomed the life sciences Minister—the Minister of State, Department of Health and Social Care, my hon. Friend the Member for Colchester (Will Quince)—to my constituency just last week. I know that they want to tackle fraud in the R&D tax credits regime. As a taxpayer, I very much want us to do that; it is a duty of Government to ensure that the taxpayers’ money is well spent. We share those dual objectives, but there are better ways to tackle fraud without harming research. We can throw out the dirty bathwater without throwing out the baby.

Here are some suggestions. We can ban contingent fee—no-win, no-fee—tax agents. A whole industry of people are trying to make money out of encouraging other people to put in fraudulent tax credit claims. We could ban that. We should resource HMRC so that it can scrutinise the claims. Most claims are automated and there is no scrutiny of what is put in. That encourages and gives an easy ride to fraudsters.

We can also limit claims for soft innovation—that is, technical maintenance and updates that would have been made anyway and which people would not normally think of as research and development. They should not be getting research and development tax relief in the first place. Lastly, to distinguish between the life science companies that we all want to encourage and the fraudsters and chancers, the Government could create an R&D tax regime for knowledge-intensive companies, which are already recognised in the tax codes; there would be no definitional issue, because those companies are already in the tax code. I am talking about companies with under 500 employees carrying out work to create intellectual property and expecting the majority of their business to come from that work within 10 years, or companies where more than 20% of employees are doing research roles requiring a master’s degree, a PhD or beyond.

If the Government take those steps, they can promote research while tackling fraud. I urge them, on behalf of all the businesses in my constituency—dozens of which have been in contact—to delay the implementation of the change, consult the industry on it and to look at more specific ways to tackle fraud, so that we can distinguish between genuine research that we want to encourage and the fraudsters and chancers. Will the Financial Secretary or the Exchequer Secretary—I am not sure whether this applies to him or her—meet me and industry representatives urgently to talk about the impact of the changes in the regime on life sciences research in the UK? With that caveat—I realise that it is a big one for my constituency members—and assuming a positive answer, I support the Bill overall, and I commend it to the House.

Research and Development Funding

Debate between Jim Shannon and Anthony Browne

Wednesday 17th March 2021 Westminster Hall

[Anthony Browne (South Cambridgeshire) (Con)]

I thank the hon. Member for Cambridge (Daniel Zeichner)— a fellow Cambridge city MP. I have the south of the city. It is fantastic to have this debate on this issue, which is really important for all the reasons he highlighted. It is enormously important for the country but also for my constituency.

Research and development is clearly absolutely vital for economic growth. We are a largely knowledge-based economy. It is a growing sector globally. It is growing far faster than general economic growth. It is absolutely right that we position ourselves as a science superpower. I fully welcome the Government’s target of R&D being 2.4% of GDP by 2027.

One thing that the pandemic has shown, and that we have always known in South Cambridgeshire and Cambridge, is that we are already a life sciences superpower. We do more testing per capita than any G20 country. The AstraZeneca vaccine, which the hon. Gentleman talked about, has been rolled out not just in the UK, but around the world, despite some wobbles in Europe at the moment, which I am sure they will get over. In my constituency, the Wellcome Sanger Institute does more genome sequencing of the covid virus than the rest of the world put together—that is a huge achievement.

The life sciences are the largest R&D sector in the whole economy. In 2019, it brought in £2.8 billion of investment, up tenfold since 2012. Although there are great amounts of private investment there, there is a huge role for Government support. The reason for that is that in the life sciences, there are often very long lead times. After the research and development stage, many years can pass before getting any revenues. There is also a lot of fundamental blue-skies research that is not necessarily directly related to commercial opportunity.

I want to mention bit.bio, a start-up company in my constituency that I happened to meet virtually yesterday. It has the technology to use the DNA from a human hair to create every type of cell in the human body in a functioning way. It has created functioning human muscles from a human hair cell in a laboratory, not for Frankenstein reasons, but because those human cells can be used to treat a lot of diseases. The company is at least two years away from any commercial application, however.

[Jim Shannon]

Could they use my hair?

[Anthony Browne]

They might be able to use the hon. Gentleman’s hair—he has some left and they could use the DNA.

The Government support the life sciences industry, through the biomedical catalyst, with £30 million a year— that is a very welcome and successful scheme. An Ipsos MORI report last year showed that for every £1 of Government money put in, it leveraged £5 of private sector investment. The 150 companies that won grants from the scheme have raised £710 million. That is a 5:1 ratio compared with a 2:1 ratio across Government funding for R&D in general, so it is a far better sector in which to leverage private sector investment. Six firms in my constituency have won grants from the biomedical catalyst in recent years, and I thank the Government for that.

One sign of success is that the quality of applicants has increased dramatically. Five years ago, one third of projects of sufficiently good quality got funding, but now only one in 25 does, because there are so many high-quality applicants. That means that there is a lot more opportunity to fund, and if the Government wanted to maximise the leverage of private sector investment across R&D in all sectors, they should increase the budget of the biomedical catalyst from £30 million to, say, £100 million. There are definitely enough projects there.

I have some good news and some bad news about what is happening at the moment—the Minister and I have exchanged letters on this. The biomedical catalyst has had a competition this year, and has decided the winners, three of which are in my constituency. They are poised to make the announcement about their great funding so that they can go out to investors and get more private sector investment in, showing what a triumph both the Government programme and their technology are. The bad news is that the winners cannot be announced because the biomedical catalyst has no budget as we speak. The money is there in BEIS overall, but there are Departmental negotiations going on. In the industry as a whole, that has led to a fear that no news is bad news, and that the rug is going to be pulled from under the whole scheme. The industry is finding the silence rather ominous.

My plea to the Minister is to prove the worriers wrong. Will she announce the budget commitment to the biomedical catalyst, unlock the investment in the companies in my constituency and across the UK, and help Britain and South Cambridgeshire retain their position as life sciences superpowers of the world?

Climate Protests in Cambridge: Police Response

Debate between Jim Shannon and Anthony Browne

Tuesday 3rd March 2020 Commons Chamber

[Anthony Browne]

My hon. Friend makes a good point. I shall come later to the issue of the advice from the College of Policing.

On 18 February, the protesters, armed with spades, dug up the lawn at Trinity College. They then proceeded to load soil into wheelbarrows and dump it in the foyer of Barclays bank—my branch of Barclays. Throughout this episode, Cambridgeshire police stood by and watched. They did not intervene to stop the criminal acts and no arrests were made at the time. The police said that they did not stop the criminal acts because they were concerned that to do so would be an infringement of the activists’ human rights. During the week, there were various acts of vandalism by activists, including at the iconic Schlumberger building and at a Shell petrol station. Subsequently, following public outrage and complaints from Trinity College, myself and Ministers, the police have arrested a total of nine activists.

The lack of police action against law-breaking protesters caused public fury across social media, the airwaves, the letters pages and my inbox. Virtually no one has argued that the police were right not to act. That public anger is very understandable. We rely on the police to uphold the rule of law, and not to let mob rule unfold. When those tasked with law enforcement appear to be unwilling or unable to intervene in flagrant criminal conduct, the public start to feel threatened. The public are also annoyed by the perceived double standard. Many said to me, “If I had blockaded the road or committed criminal damage, I’d be arrested on the spot. Why aren’t the protesters?” I want to put on record that I strongly support the ultimate objective of Extinction Rebellion in combating climate change, but I do not support its means.

[Jim Shannon (Strangford) (DUP)]

Taking into consideration the fact that a number of my constituents attend Cambridge and study there at this time, I am sure that the hon. Member will share my concern that, at what should have been a peaceful expression of opinion, tensions were heightened deliberately by a few. Does he agree that now is the time for calm heads and cool words, and that that must be the first line of defence when dealing with passionate young people?

[Anthony Browne]

I agree with the hon. Gentleman. As I have said, my aim is not to inflame things, but to ensure that the police have clarity on their powers to act. I also strongly support the police, who I recognise are caught between a rock and a hard place. I know that fundamentally they want to uphold the law, but the guidance and interpretation can be confusing.

There are two questions that need answering: first, why did the police stand by as crimes were committed; and secondly, what can be done to ensure that they will uphold the law in future? I have met the police and crime commissioner and the chief constable of Cambridgeshire, who are now conducting a review of the lessons learned. It is not clear that the police would do anything differently if it happened again. They are sharing the learnings with other police forces across the country that are developing their own plans in case of similar protests. Cambridgeshire police have welcomed this Adjournment debate, as they hope it will help generate agreement on how they should respond in future. I know that, following the Extinction Rebellion protests in London, the Metropolitan police is also considering these issues with Home Office officials.

Having considered the arguments carefully and examined the relevant legislation and court judgments, I believe that none of the reasons for police inaction stands up to scrutiny. I contend that the police did have legal grounds to act even under existing legislation.