Engineering Biology (Science and Technology Committee Report)

Lord Drayson Excerpts

Monday 28th April 2025 Grand Committee

[Lord Drayson (Lab)]

My Lords, I, too, was pleased to be a member of the Science and Technology Committee during this inquiry. I draw attention to my register of interests, particularly in my role as a science entrepreneur. My comments will focus on industrial strategy, given the emphasis that the Government placed on their forthcoming industrial strategy in their response to our report. In particular, I will focus on UK policy towards foreign ownership of key UK assets, an issue that has come into very sharp focus recently, given the dramatic shift in US government policy and the close relationship between the ownership and control of the major US technology companies and the Trump Administration.

Since the 1980s, the UK has pursued the most open policy in the world towards foreign ownership of sovereign assets. This policy, consistently followed by successive Governments, both Labour and Conservative, has conflated foreign investment with loss of control. Ministers have long lauded foreign investors for buying UK assets, such as infrastructure, businesses and, most recently, university scientific research, as a vote of confidence in the UK and a boost to economic growth, when the reality is that once ownership is lost, management decisions are taken abroad, wealth creation accrues overseas and the critical mass of UK-owned and UK-run businesses declines.

Scant attention has been paid to the corrosive effect this policy has on UK wealth creation, our national culture and our confidence in ourselves and our future to the point at the start of this year where less than 5% of UK pensions were invested in UK equities, the UK stock exchange had fallen to 21st place, level with Kazakhstan in world IPO rankings, and the talk in founder-entrepreneur circles was about how quickly they could move their companies to the US to escape the aversion to risk and lack of scale-up capital that exists in the UK.

However, the revolution in US policy that is taking place under President Trump presents a once-in-a-generation chance for the UK to adapt a new industrial strategy that encourages UK science innovators to stay here and to build here, for UK investors to back those entrepreneurs and for these UK-owned and managed businesses to go out into the world and generate trade and wealth, filling the void left by “America first” trade policies and tariffs that are destroying long-established supply chains and straining international partnerships.

There is now a clear and urgent need for the UK to respond by implementing an industrial strategy that places UK sovereignty at its centre and enables UK ownership of key technologies and companies through policies that encourage UK finance in UK science, smart regulation that accepts risk and prioritises growth and government procurement that creates critical mass in the UK market to enable UK-owned and managed technology businesses to win.

For example, in AI, the enabling technology of the 21st century that will have a profound effect on all sectors, in particular engineering biology, right now the UK has no sovereign capability in large language models. If you are a Brit wishing to use AI, you have a choice between US, Chinese or French models. It is urgent for the Government to address this lacuna. When are we going to wake up and realise that if we want our British way of life, our values, our openness and our diversity to endure, we had better have ownership and control of the technologies that our society will depend on and the algorithms that our children will be shaped by?

Our scientists and entrepreneurs have the talent and the drive; they just need an active industrial strategy from their Government that encourages and enables UK ownership and starts to build a critical mass of world-class businesses in engineering biology and in other growth sectors. I look forward to the Minister’s response.