Budget Resolutions and Economic Situation

Luke Evans Excerpts

Monday 20th March 2023 Commons Chamber

[Michelle Donelan]

We are talking today about investing in the technologies that can progress our healthcare system and about our use of green technology so we can get to work in a cleaner, greener way. Our technologies can progress our society in so many different ways. I am happy to meet the hon. Member to discuss that in detail, but it might be more of a question for the Department of Health and Social Care.

That is why the Government’s commitment to AI goes much further than just warm words. Over five years ago, we identified AI as one of the four grand challenges in the industrial strategy, investing £1 billion in the AI sector deal in 2019. In 2021, we set out our ambitions in the national AI strategy—ambitions which the AI action plan shows we are determined to deliver. In the last decade, we have also invested over £2.5 billion in AI.

[Dr Luke Evans (Bosworth) (Con)]

On the Secretary of State’s new role in the new Department, one key thing we need to look at is keeping regulation updated with advancements. Already, things such as ChatGPT mean that people can get their homework done, generate images and make apps using a computer. Can we take the example of the Medicines and Healthcare Products Regulatory Agency, which learnt, through the vaccine, to do the research and put the regulation in place, so we do not find ourselves, with the Online Harms Bill, where we found 10 years ago when the internet was brought through? Is there an opportunity for her to put regulation in place to ensure we move it along as the technology develops?

[Michelle Donelan]

I absolutely agree. That is exactly why the Prime Minister announced, just days ago, the establishment of a large language model taskforce to look at that and to ensure we can gain sovereignty in this particular area. Over the coming weeks, we will also publish the AI White Paper.

Earlier this month, I announced £110 million for AI technology missions. That funding, which we anticipate will be matched by equal private investment, will support the science behind some of the most important AI technologies of the future. We will also realise some of AI’s transformative applications, from reducing greenhouse gas emissions to increasing productivity in sectors such as agriculture, construction and transport.

Success in AI requires the UK to be a hub of the best and brightest AI minds in the world. We have already backed AI with £8 million to bring top talent into the UK. That is coming on top of £117 million in existing funding to create hundreds of new PhDs in AI research. In the Budget, the Chancellor took a further step forward with the announcement of the Manchester prize, which will back those harnessing the immense power of AI to break new ground.

The Chancellor also announced a staggering £900 million in funding for an exascale super-computer and a dedicated AI research resource, making the UK one of only a handful of countries in the world to have such a powerful computing facility. We are creating thousands of high-quality jobs and ensuring that the UK is going to be the home of the Al technologies that will directly help to address the priorities of the British public. These are not just jobs that will power our future; every single job will create these exciting fields—opportunities that will release the potential of thousands of talented people up and down the country.

--- Later in debate ---

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to open the debate on science and technology, as one of the few Members in this place probably with a science degree. You might be aware, Madam Deputy Speaker, that I studied chemistry at Somerville, like another well-known female politician very popular on the Government Benches. I hope that is where the similarities end, although we both have a reputation for, how shall I put it, getting our own way.

Science, technology and innovation are close to my heart. I welcome the new focus—not before time—on these issues, which I will come to. Even with the new Department and a few mentions in the Budget, we are still miles behind where we need to be in exploiting the potential of the UK as a science and tech superpower.

First, let me address the Budget overall. Having had a few days to digest and analyse, the verdict on the Budget is in. It is not a

“sustainable plan for long-term economic expansion”.

Those are not my words but those of The Daily Telegraph. The Federation of Small Businesses was no more complimentary, saying that its members would feel “short-changed” by the “meagre” Budget. The Institute for Fiscal Studies labelled Britain a high-tax economy, with households feeling “continuing pain”.

The public view is that it is a Budget not for them, but for a tiny few—a growing theme after 13 years in office. No wonder most now trust Labour over the Conservatives when it comes to the economy. That is the verdict, because this is a Budget divorced from most people’s reality—or as we have just heard, from anybody’s reality. There was no mention in the Chancellor’s speech that this Parliament is set to see the biggest fall in living standards ever recorded—the biggest fall by a country mile, according to the Resolution Foundation. That means families worse off and prices going through the roof, as wages fall through the floor.

New research for the BBC, out today, shows that the average British worker is now £11,000 a year worse off than they should be, after 13 years of a Conservative Government. That is the reality for most people. The reason for that cannot be passed off as global forces, as it is relative too—middle-income Britons are now 10% worse off than the French and 20% worse off than their German equivalents. When holidaying Brits return to the continent in force this summer, they will feel like the poor man of Europe once again. That is the record of this Government; no wonder they hardly mentioned it.

It was a Budget divorced from the realities of most businesses, too. Nothing for them on their unaffordable, rising costs; nothing on business rate reform; and very little to boost their immediate workforce challenges either. Small businesses were offered thin gruel. Perhaps that was what the former Prime Minister meant when he said something quite unparliamentary about business.

It was a Budget utterly divorced from the realities facing our public services too, with hardly even a mention of the NHS or care. Yet we have 7 million patients stuck on waiting lists, A&E waiting times at an all-time high, social care in crisis, putting extra pressure our hospitals, and a chronic workforce emergency.

[Dr Luke Evans]

Does the hon. Lady welcome the statement by the British Medical Association about the changes to pensions, which will get senior doctors back to work? The chair of the BMA pensions committee said in the media that the changes had the immediate effect of getting people back to work, which means the NHS workforce will be strengthened.

[Lucy Powell]

I will come on to say something about that, but as my husband is an A&E consultant I am all too familiar with these issues. As the IFS said, it was a golden

“sledgehammer to crack a very small nut”.

The realities facing our public services are not addressed in this Budget.

It is another Tory Budget so divorced from reality that it exposes, once again, who the party in government is really for—tax cuts for the wealthiest, tax hikes for the rest. The last Tory Budget had a cut to the 45p top rate of tax; this Budget has a pension tax cut for the top 1%. Government Members might groan and wail, but that is the reality.

Wealth managers already see the Budget as a bonanza, and not only a huge tax break for the super-wealthy but an inheritance tax wheeze for the super-rich too, with one wealth adviser describing it as

“a great opportunity for tax-free growth.”

[Lucy Powell]

I will not apologise for those figures, and in the next part of my speech I will explain that the figures are perhaps worse than previously thought. There are issues for doctors, but only 16% of those who will benefit from this massive boon are doctors, and that is before all the speculators dive into this new wheeze. That is the political choice that this Chancellor and this Government have made—trickle-down economics, and tax perks for the tiny few. That is the record that they just will not be able to dodge.

[Dr Luke Evans]

On that point, will the hon. Lady give way?

[Lucy Powell]

I will not give way again. Government Members have plenty of time to give speeches.

It is a Budget divorced from the reality of who caused this economic crisis. It was the Conservative party that crashed the economy, sending markets into freefall and interest rates sky high, resulting in a Tory mortgage penalty for millions of homeowners. The Government want to blame others, but their record is falling living standards, a stagnant economy, falling house prices and the worst growth forecast in the G7—all stats the Chancellor failed to mention.

--- Later in debate ---

[Carol Monaghan (Glasgow North West) (SNP)]

I cannot remember ever speaking in a Budget debate dedicated entirely to science, so it is a real pleasure. Like the hon. Member for Manchester Central (Lucy Powell), I have a science degree, although mine is of a different flavour, being in physics. It is nice to speak in this debate as the SNP spokesperson.

A flourishing research and development landscape will produce major economic benefits, so the focus on science should be a positive. The problem is that this Government are not creating an environment conducive to flourishing research and development. First and foremost, they have to convince those working in the sector that they are valued. They have to consider the push and pull factors for a career in science. The Secretary of State talked about financially stable families, but she has to recognise that the wages and job insecurity mean that many cannot afford to stay in the sector, so they leave for other occupations.

I will now digress a little. A number of years ago, I visited a hydroelectric museum in the Alps. It is more than 150 years since we started developing hydroelectric as a means of generating electricity. The museum had an interesting display that said hydroelectric power would have been developed to a far greater extent if not for the discovery of oil. We saw oil stifling innovation, particularly in renewable sources, 150 years ago, and now we have the nuclear revival.

Rather than investing properly in renewable technologies, this Government are happy to throw billions at what they consider to be an easy source of energy. Proper action on decarbonisation would mean revising grid connection charges that see Scottish renewable producers paying, on average, £7.36 per megawatt-hour to access the grid, whereas producers in England pay, on average, 49p per megawatt-hour. Worse still, producers in Germany, the Netherlands and Luxembourg pay absolutely nothing. The Budget was an opportunity to address this inequality, to encourage greater energy innovation and, ultimately, to lower energy bills for my constituents and for constituents across the UK. Instead, we are repeating the mistakes of the past by taking the easy but expensive and environmentally unfriendly route.

Nuclear is environmentally unfriendly. The mining of uranium is a dirty process, as a lot of acid is used to extract it from rocks. There is then the storage of used fuel rods. For the Government to classify nuclear power as environmentally sustainable, with the same investment incentives as renewable energy, is a sinister attempt to pull the wool over the public’s eyes, and it shows a lack of real commitment to renewables.

As chair of the all-party parliamentary group on photonics and quantum, I am pleased to see a continued focus on quantum technologies. The creation of the quantum hubs in 2014, to which the Secretary of State referred, enabled the UK to place itself at the centre of this technology, and a number of Scottish universities—notably, Glasgow, Strathclyde, Edinburgh and Heriot-Watt—played a key role. But the sector requires sustained support and proper vision.

I was recently made aware of an ambitious proposal made by a group at Glasgow University, in collaboration with universities across the UK, to secure commercial leadership in the manufacturing of quantum hardware, which is crucial for its penetration into volume applications. A national institute for quantum integration would deliver nano-fabrication facilities for the integration of this hardware. The Secretary of State said, in her statement two weeks ago on the science and technology framework, that she will have

“a ruthlessly outcome-focused approach to this new Department.”—[Official Report, 7 March 2023; Vol. 729, c. 182.]

I would love to hear her thoughts on a national institute for quantum integration absolutely focused on outcomes.

With quantum, as with other technologies that are critical to national security, the issue is rarely starting up; it is almost always scaling up. There does not seem to be much commitment at all to supporting the scaling up of small and medium-sized enterprises. To scale up, some companies will potentially need to move out, which means that some are looking to other places around the world in order to develop their technologies. Of course, we are still waiting for the semiconductor strategy, something that would support the development of quantum, photonics and the wider technology sectors. Perhaps the Secretary of State will prioritise that.

It was disappointing to hear, yet again, that investment in carbon capture and storage is not coming to the Scottish Acorn project. We need such clusters across the UK, in every part of it. The Acorn project is perfectly situated and the proposals are mature enough to merit Government funding; this should not be a phase 2, with something in the future, perhaps, if we are lucky.

[Dr Evans]

It was announced in the Budget that £20 billion would go towards carbon capture. Is that not substantial enough?

[Carol Monaghan]

That would be substantial if it were coming to Scotland, so when will we see action on the Scottish cluster?

The Chancellor also made a song and dance last week about R&D tax credits. That system has been grossly mismanaged and therefore abused in the past. I would like more detail on how the new system will provide more value for money for both taxpayers and genuine researchers. How will it be managed? What checks and balances will be taking place? We need to make sure, once again, that the mistakes of the past are not repeated.

The ambitions of the Secretary of State, and indeed the Prime Minister, in science are laudable. However, they fail to mention the key issue: the people. That issue cannot be solved by cash alone. Supposed commitments to science clash entirely with this Government’s hostile environment on immigration, and the lack of progress on association to Horizon is having a huge impact. While the Secretary of State dithers about whether association represents value for money, researchers are leaving the UK for better opportunities abroad, where they can develop rich collaborations and enjoy freedom of movement.

In response to last week’s Budget, Sir Adrian Smith, president of the Royal Society, said:

“After a prolonged period of uncertainty, the Government urgently needs to deliver on its pledge to associate to Horizon Europe, and set out a longer-term, cross-party plan for science. This is vital to restore confidence among global research talent and investors that they should build their futures in the UK.”

Stephen Phipson, the head of Make UK, said that Horizon had

“always been one of those areas of the EU budget where the UK gets more out than it puts in”.

A number of other notable organisations in the UK —including the CBI, the British Heart Foundation, the Russell Group, the University Alliance and Cancer Research UK—and in EU R&D sectors have signed a joint statement to the UK Government, urging rapid progress on association to EU programmes, including Horizon Europe, Copernicus and Euratom.

However, there were worrying reports last week that the Prime Minister is unconvinced on Horizon, with the Financial Times reporting that “senior colleagues” said the Prime Minister was “sceptical” about the value of Horizon Europe and the cost of participation. Researchers need to know where the UK is headed. Is the dithering on Horizon a deliberate attempt to kick the can down the road? More than anything, Horizon is about people; there is no monetary replacement for this. So will this Government keep blaming the EU while projects and collaborations are lost?

However, there are areas where money is important and where I would have wanted to see action in the Budget. We heard from the Secretary of State about financially stable families. Let us assume that I am a quantum researcher from somewhere in the EU, I am at the top of my field and I have an invitation to join a team at one of the UK quantum hubs. I will, first, have to apply for my global talent visa, at a cost of £623, and that will also cost me £623 for my spouse and for each of my children. I have two children under 18, so my costs are now £2,492. I have to pay the annual health surcharge for myself, my spouse and my children, so that is £624 for myself and my spouse. There is great news, as children get a discount and so it is only £470 for each of them. We are now at £4,680 for me to come here under the global talent scheme, although that assumes that I have only two children—I know the Government like to pretend that people do not have any more than two children, but many of us do.

As an EU researcher, I have many options, so why would I put myself through the hassle of such an immigration regime? That is hardly how we attract the brightest and best. If the Government are serious about science, those fees have to be dropped. It would not be costly and it would have great benefits.