Research and Development Funding and Horizon Europe

Paul Scully Excerpts

Tuesday 18th April 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate on research and development funding, and indeed Horizon Europe. It is a hugely important and timely debate, and I thank the hon. Gentleman for the opportunity to speak to Members today.

As we have heard today, despite our relative size, Britain outperforms our closest competitors. We are a main challenger nation to the US and China in so many areas, with four of the world’s top universities and a technology sector worth more than $1 trillion. Just eight of our university towns are home to more billion-dollar unicorn start-ups than the whole of France and Germany combined. However, when others, including France and Germany, are moving further and faster to invest in science and technology, we have to do the same.

In February, the Prime Minister announced the creation of the Department for Science, Innovation and Technology to ensure that the UK is at the forefront of global scientific and technology advancement and to ensure that the brightest scientists, most brilliant innovators and most ambitious entrepreneurs can turn their ideas into companies, products and services here in the UK that will change lives and drive growth. We are focused on optimising public R&D investment to support our strengths and increase levels of private R&D to make our economy the most innovative in the world.

We are already making swift progress. We have launched the Government’s plan to cement the UK’s place as a science and technology superpower by 2030, challenging every part of Government to put the UK at the forefront of global science and technology through 10 key actions, creating that co-ordinated cross-Government approach. Those key actions include identifying critical technologies; investing in R&D and talent and skills; financing innovative science and technology companies; creating international opportunities; providing access to physical and digital infrastructure; and improving regulation and standards. That delivery starts now. Although the Secretary of State may pause in a week or so for her own delivery, the Department’s work will not pause. We have a raft of projects initially worth around £500 million in new and existing funding that will help to ensure the UK has the skills, talent and infrastructure to take a global lead in game-changing technologies and groundbreaking science.

In line with our focus on delivering long-term economic growth, we remain committed to increasing publicly funded and economy-wide R&D spending. As set out in the 2023 Budget, the Government are turning their vision for UK enterprise into a reality by supporting growth in the sectors of the future. There are huge opportunities to do that by capturing a share of growing global markets in green industries, digital technologies, life sciences, creative industries and advanced manufacturing.

The Government have recommitted to increasing public expenditure on R&D to £20 billion per annum by 2024-25, representing a cash increase of around one third—the largest ever increase in public R&D spending over a spending review period. We have provided UKRI, our national funding body, with a multi-year settlement across all parts of its budget, which will be vital to support our science superpower ambitions. The total UKRI allocation is £25.1 billion for 2022-25, and will reach more than £8.8 billion in the year 2024-25—its highest ever level.

On 25 January, we launched the Advanced Research and Invention Agency—ARIA—a new independent research body custom built to fund high-risk, high-reward scientific research. The Government have committed £800 million to ARIA out to 2025-26. ARIA will help maintain the UK’s position as a science superpower, helping to attract top talent to the UK, grow our economy, boost prosperity and, crucially, invest in break-through technologies with a potential to profoundly change the world for the better.

Clearly, we are also fully committed—we have heard the request—to science and research collaboration, including internationally and with our European counterparts. That is why we are discussing association to Horizon Europe with the EU, and we very much hope that our negotiations will be successful. I know people have been asking for guarantees. Clearly, it is not within our gift unilaterally so we have to negotiate, but Horizon Europe is our preference.

Association needs to be on the basis of a good deal for the UK’s researchers, businesses and taxpayers. We welcome the EU’s recent openness to discussions on UK association to EU programmes following two years of delays. We have always wanted to do this, and the hon. Member for Wirral West (Margaret Greenwood) talked about the Windsor framework and the Northern Ireland protocol. They have helped unlock our move to have these productive conversations now. At the partnership council on 24 March, the UK and the EU agreed to take forward discussions on UK association in the coming weeks. Indeed, the Secretary of State travelled to Brussels on 4 April for an introductory meeting with the EU’s research and innovation commissioner Mariya Gabriel to discuss research collaboration, including the UK’s expectations around association to Horizon Europe.

Our discussions will need to reflect the lasting impact of two years of delay to the UK’s association, which means, as we have heard, researchers and businesses across the UK have missed out on over two years of a seven-year programme. In all scenarios, we will continue to put the interests of researchers, innovators and entrepreneurs across the UK first, so that they can take forward groundbreaking research and drive forward innovation with their international partners. With that in mind, if we are not able to secure association to Horizon Europe on fair and appropriate terms, and I highlight again that that is very much our preference, we will implement Pioneer.

Pioneer is the Government’s bold, ambitious alternative to Horizon Europe, should we be unable to reach that agreement with the EU on association. On 6 April, as we have heard, the Government published their prospectus on Pioneer. That has been developed with input from researchers and businesses across the UK, and it sets out the proposals that would inform the scheme. By publishing the prospectus now, we are giving the research community and industry a further opportunity to provide feedback to shape these proposed plans. Our plans provide clear reassurance that the Government are fully prepared to launch an ambitious alternative scheme should we be unable to associate to Horizon Europe. We look forward to engaging with and seeking further input from researchers and businesses as we develop these proposals over the coming weeks and months.

Pioneer would deliver four interconnected programmes covering offers for talent, global, innovation and R&D infrastructure to boost the UK’s R&D system. These programmes would be supported by the Horizon Europe guarantee, and a transitions package would ensure there is no gap in investment flowing to the sector. Pioneer would receive at least the same amount of funding as the UK would have paid to associate to Horizon had we associated from 2021-27, which means the UK would invest around £14.6 billion in Pioneer to the end of 2027-28, including the support we are already providing to the sector, such as via the Horizon guarantee. I will answer the maths question from the hon. Member for Cardiff South and Penarth (Stephen Doughty) because he mentioned some of the figures. Pioneer funding includes £2 billion for talent, £3.5 billion for innovation, £3.8 billion for global and £1.7 billion for infrastructure. Add the funding we are already providing for the sector, including the Horizon guarantee—a further £3.6 billion—and that adds up to the £14.6 billion.

Regardless of whether we reach an agreement with the EU on association or we launch Pioneer—that proposed alternative—the Government will ensure that UK researchers and businesses continue to benefit from world-leading collaboration opportunities with colleagues from Europe and beyond. The Government have already committed investment for UK researchers to engage in and benefit from global collaboration through the international science partnerships fund. That was designed to deepen scientific collaboration between the UK and international R&D powers on strategically important science themes. In December last year, £119 million for ISPF phase 1 was announced. That allows UK researchers and innovators to collaborate with international partners on multidisciplinary projects. It will help the UK and its partners to deliver bigger, better science than one country can alone.

Global collaboration under the ISPF will give researchers access to global talent, large-scale facilities, research ecosystems and markets to swiftly move forward ideas to greater maturity, applicability and commercialisation. It is being delivered through trusted and established partners, including UK Research and Innovation, the UK national academies and selected public research establishments, such as the Met Office, UK Atomic Energy Authority and the National Physical Laboratory. Should we not be able to associate to Horizon Europe, this fund would be expanded to tackle global challenges and develop future technologies, positioning UK researchers at the heart of global solutions.

I would like to thank my right hon. Friend the Member for Ludlow (Philip Dunne) and the hon. Members for Wirral West, for Cardiff South and Penarth, for Hammersmith (Andy Slaughter), for York Central (Rachael Maskell), and for Midlothian (Owen Thompson) for their contributions. There is a network of universities and innovators in many of the constituencies of hon. Members, across the UK in all nations. We must ensure we keep that collaboration going and build on those strengths. We are committed to being at the centre of what the Department for Science, Innovation and Technology can deliver. That will cement the UK’s place as a science and technology superpower by 2030, increase publicly funded and economy-wide R&D spending, optimise public R&D investment to support areas of relative UK strength and increase the level of private R&D to make our economy the most innovative in the world.

As I have set out, we are discussing association to Horizon Europe with the EU, and we hope our negotiations will be successful. However, if we are not able to secure association on fair and appropriate terms, we will pioneer a long-term, bold and ambitious programme to support research and innovation in the UK. I can assure hon. Members that we are and we will continue to negotiate in good faith with the EU, because international collaboration with our closest partners is at the heart of what we are trying to do.