Research and Development Funding

Peter Dowd Excerpts

Wednesday 17th March 2021 Westminster Hall

[Peter Dowd (in the Chair)]

I remind hon. Members that there have been some changes to normal practice, in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be a suspension between each debate. I remind Members participating physically and virtually that they must arrive for the start of the debate and they are expected to remain for the entire debate. I must also remind Members participating virtually that they are visible at all times, both to each other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and before they leave the room. There are no Members in the Public Gallery.

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move,

That this House has considered the future of research and development funding.

It is a pleasure to speak with you in the Chair, Mr Dowd, and to have the opportunity to discuss this vital question, which is extremely timely. Has there ever been a time when the public were so interested and indebted to the work of our researchers? Quite simply life-saving and life-changing, with huge social and economic consequences, the vaccine development is not the subject for today. The research and development, the research institutions and universities that support them are a cause for global celebration and thanks.

That opening sentence makes it clear that this a huge and complicated area. I suspect that in 90 minutes we will not be able to do full justice to it, not least the complicated and important relationship between public and private funding, which I suspect others will touch on. I will concentrate on some of the key, immediate questions facing particularly public funding and its future. The debate is also timely for different and, frankly, much more political reasons.

I will concentrate on public funding issues relating to Horizon, the impact of official development assistance cuts, and the curious case of the new kid on the block, the Advanced Research and Invention Agency, which I know was discussed earlier today at the Select Committee on Science and Technology, chaired by the right hon. Member for Tunbridge Wells (Greg Clark). I am sure he will have more to say about that later.

Although for obvious reasons the debate is about money, money is only part of the challenge. The vital resource is people. Throughout the difficult debates of the past few years, I have spoken to many people in the research and development and science sectors, and that is a point they come back to every time: it is about people, relationships between people and scientific collaborations. Science is global and research is global. Those relationships matter.

I am delighted to see my neighbour, the hon. Member for South Cambridgeshire (Anthony Browne), who shares some of Cambridge with me. My constituency is in an area that is about research and development to its core. It boasts countless institutions working on a dazzling range of areas. To cover it geographically, from north to south and east to west, we see a huge array of start-ups at the innovation centre to the north, very close to the science park, which hosts UK success stories such as Owlstone, now the Bradfield Centre.

Nearby Darktrace, the world-class laboratory of molecular biology, whose iconic building is a gateway to the south of the city, has been conducting research for decades to understand biology at a molecular level, and whose work has produced no fewer than 12 Nobel prizes. That is now located, by no accident, very close to the new AstraZeneca building, to allow collaboration to thrive, as it does right across that area of the biomedical campus.

Green aerospace design work will be found at the Whipple to the east, a project that is well known to the Minister and is very topical. That is not far from the British Antarctic Survey, while the huge international success story that is Arm is to the west. Marshall Aerospace is also in the private sector, providing world-leading aerospace development as well as materials development.

Go further to see the Cleantech works being done at Allia, and go past the railway station to see the Sainsbury Laboratory of plant science. Step forward to find Anglia Ruskin University, with its hugely important research into climate and environmental change. We then find our famous colleges, which host such relevant thinkers as Professor Dasgupta, whose recent review of economics and nature must be transformative. There is huge expertise among our social scientists, helping our understanding of our past as well as our future, our legal frameworks and our relationships with other countries.

I could speak for 90 minutes just listing all the amazing things going on in and around Cambridge. I will not do that, but I can hardly fail to mention the National Institute of Agricultural Botany and the surrounding science parks, Babraham and the amazing DNA sequencing at the Wellcome Sanger Institute. I will have missed others and I apologise to them. In all of them, people are the key. The money counts too.

For a considerable time, the importance of research and development work and the funding for it has been recognised on a cross-party basis. There is widespread agreement that UK spending on R&D has historically been too low. Although R&D investment in the UK has risen over the past 30 years, the amount we actually spend on it as a proportion of GDP has been flatlining, hovering at between 1.5% and 1.7% of GDP over the past two decades. It is behind the European average of 2% and the OECD average of 2.4%.

Our key neighbours and allies have been successful in investing far more. We often claim that we punch above our weight and get more for our money, but how much better we could be if we were matching that. The Government acknowledge this and have pledged to catch us up with the rest of the developed world, with a target of raising investment to 2.4% by 2027 and to increase public investment in R&D to £22 billion a year by 2024-25. This is welcome, although we know it will be a challenge.

This week we have seen studies showing that such targets are often set but have historically been difficult to reach, despite good intentions. It is important that we have this as an ambition and set a clear pathway. There are growing concerns in the R&D sector about how that figure is to be achieved and whether, beyond the rhetoric, the Government really still have that commitment to meet that ambition.

I will turn to the immediate problems, the first of which is Horizon. For many of us, there was little to welcome in what I would call the slapdash, desperate, last-minute trade and co-operation agreement that the Prime Minister salvaged with the European Union, but one glimmer in it was the framework for the UK’s continued association with the EU’s newest and biggest research funding programme, Horizon Europe. With a budget of €100 billion, it is the world’s largest and most competitive research funding programme.

We know that membership of the EU’s 2014-2020 Horizon research programme has been extremely beneficial to UK research. The UK has been one of the largest beneficiaries of the nearly €60 billion of funding that has been allocated over the past six years, receiving more than €7 billion. The vast majority of that has gone to our excellent UK universities, with academic research in the social sciences, arts and humanities particularly dependent on this stream of income from the EU.

The harsh reality of leaving the EU means that we are undoubtedly in a worse position this time around. While the rules for our participation have yet to be completely settled, it is clear that we will now be participating as an associated country, meaning that although we can lead and participate in collaborative research projects, we will have no formal decision-making power over the programmes and we will not be involved in discussions about which areas should receive priority for funding.

Taking back control turns out to mean not being in the room when decisions are being taken and, incredibly, having to beg others to make the case on our behalf. It does not matter how it is dressed up, our influence is reduced. In another blow this week, we have learned that we could also be excluded from major quantum and space research projects.

Whatever one thinks about all that, one of the biggest question marks is about how the Government will be funding the UK’s association with Horizon Europe, which is expected to cost about £2 billion a year, and who in Whitehall will be managing this. Post Brexit, we know the Horizon Europe bill will be paid in isolation rather than as part of overall EU membership, and that there is no existing budget provision for it. It was notable, despite many calls from the sector, that plans for where the funding would be sourced were conspicuously absent from the Budget earlier this month. There are significant and growing concerns among scientists and research funders that it could now be taken from the UK’s existing science budget. That would pit different elements of UK R&D against each other and would see a collective diminishing of the overall pot. It could set us back in our progress towards 2.4%.

Universities UK has warned—I am sure that the Minister will be aware of its letter to the Prime Minister this week—that if the Department for Business, Energy and Industrial Strategy is required to fund the costs of participation out of the existing budget, it will amount to an effective cut of something in excess of £1 billion, roughly equivalent to the cost of funding the entire Medical Research Council and the Science and Technology Facilities Council combined. Reduced domestic funding would also damage our ability to compete for Horizon Europe funding, risking a double loss. Universities UK estimates that a £1 billion reduction in funding would be equivalent to cutting more than 18,000 full-time academic research posts, distributed across all parts and all four nations of the UK, and could potentially lead to a further reduction of up to £1.6 billion in private R&D investment that would have been stimulated by public investment.

The Campaign for Science and Engineering—I am, as ever, indebted to Professor Sarah Main for her advice—warns that sourcing the Horizon bill from the current science budget in the way I referred to would effectively negate two years of Government increases in UK R&D funding, so it is a serious issue. I am sure that the Minister is well aware of it, and I hope that she will be able to confirm that the Government are on the case. Ideally she would confirm that the cost of association to Horizon Europe will not be taken out of the existing UK Research and Innovation budget.

I am afraid that what I have been describing is only one of the pressing problems. The Government’s recent decision to cut £4 billion from the aid budget prompted fury in Cambridge, where we take those things very seriously, not least because it broke a manifesto promise by the governing party to maintain spending of 0.7% of gross national income on aid. However, it is becoming increasingly clear this week that as a consequence the plug will now have to be pulled on hundreds of international collaborative research projects funded with UK aid. In passing, I want to pay tribute to Chris Parr and his colleagues at Research Professional News, who uncovered much of the detail. UKRI, left with a £120 million shortfall, has had to announce this week, with just four months’ notice, that most of its aid-funded research projects are now unlikely to be funded beyond 31 July, regardless of the stage that the research is at.

Those projects are aimed at tackling some of the world’s major problems, such as climate change, antimicrobial resistance and poor health and nutrition across the world. Projects that were previously funded through the global challenges research fund and the Newton fund, which usually receive official development assistance, have seen UK universities take centre stage in efforts to address plastic waste management, develop renewable energy and clean water technology, improve worldwide labour laws and roll out 5G networks in lower and middle-income countries. In the past year alone, lessons learned from ODA-funded projects have enabled UK universities to support the national effort against covid-19 through enhanced virus detection technology and online rehab services to help those suffering the long-term effects of the disease. I am grateful to Universities UK for its advice. As I said, the Minister will have seen its letter this week, which I thought was an unusually strong warning and intervention.

In Cambridge I am already hearing that there could be an impact on internationally important scientific programmes, such as those run from the UN Environment Programme world conservation monitoring centre, which is based in the city, as well as on many university projects that are currently focused on international development. Once again, I could read a long list of projects. I will not, but I will say that a consistent message is coming from all those people about the soft power delivered for us by those projects, which are of course good in their own right, but are also how we still have influence in the world. Those people all tell me that that is based on trust, and that if we break that trust it is hard to get it back again. There is much more than a financial cost.

That response is not only coming from Cambridge. My hon. Friend the Member for Ealing, Southall (Mr Sharma) just missed the deadline for speaking today, but he asked me to mention that the all-party parliamentary group on global tuberculosis recently conducted an inquiry into the UK’s investment in global health research. It found that the sustainability of the UK’s funding across the full product development pipeline is essential to getting life-saving new tools from UK labs to patients around the world. Cutting that funding will have enormous implications for the lives of the most vulnerable, collective global health security, the UK’s research infrastructure and our standing on the international stage. He urges the Government to think again.

It is shocking that the Government are punching a hole in such important research, particularly in a year when we are recovering from a global pandemic and, of course, hosting the G7 leaders summit and the crucial COP26 climate summit. Frankly, in terms of diplomacy, how inept does it get?

Universities have rightly warned that the cuts will harm our international standing, curtail successful programmes that have been a key vehicle for UK science diplomacy for many years, and lose international science and research partnerships that have taken a long time to establish. Stopping funding mid-cycle frankly shows blatant disregard and disrespect for our international partners. It is hardly surprising that six academics from a key research council advisory group for international research resigned this week in protest. The publication Research Professional News put it well yesterday when it noted:

“Anyone who has held a grant from the Global Challenges Research Fund will know that the UK goes out of its way to carry out rigorous due diligence on international organisations to ensure that they are reliable partners. It turns out that Her Majesty’s government was the party that everyone should have been keeping an eye on.”

All this is taking us in a worrying direction, when looking at that 2.4%. It seems to be flying in the face of the Chancellor’s stated aim of making the UK a scientific superpower, which was reiterated only yesterday by the Prime Minister. Universities UK has estimated that on top of the cost of Horizon association, the cut to ODA research funding could lead to a £1 billion reduction of the overall R&D budget. I suspect that, in the end, these are Treasury decisions. The Minister may well agree with the rising number of voices speaking out against many of the cuts. I urge her to do all she can to ensure that they are reversed and the vital projects that the funding supports are maintained.

Given all those pressures, it is perhaps surprising that the Government are considering diverting funding into a new, untested idea—the Advanced Research and Invention Agency. I will try not to duplicate this morning’s discussion. I will also try not to let my view of its leading proponent prejudice my thoughts, but I cannot help reflecting on the delicious irony of the name transition. DARPA—the Defence Advanced Research Projects Agency—sounded like a rather crude 1960s American missile system. ARIA is much more, dare I say it, European. Names aside, it raises a whole series of questions about how it fits into a delicately balanced landscape.

The Haldane principle, dual funding, mechanisms to safeguard blue-sky research—people have been wrestling with these issues for years. The raison d’être of the Cambridge college system is to preserve space for imaginative and creative thinking. I do not say that there is no scope for change or improvement, but please identify the real problem. As David Sainsbury has so sensibly warned in the past, we should not just try to import something from another culture or another system; it is much better to nurture and encourage what we are good at. We should maybe look at the real problem: the much-talked-of valley of death—getting our great innovations developed. If we want to borrow from America, we should perhaps look more closely at the Small Business Research Initiative and the role of public procurement.

Where is the overall plan? I have to say that there was not much that the Opposition welcomed from the previous Conservative Government, but an industrial strategy—now apparently sadly discarded—was a step forward. A huge amount of work was done across many sectors, although I fear there is only limited public awareness of it. The Opposition would certainly have preferred the mission-oriented approach championed by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), but at least we had a structure.

Let me conclude on two further issues. These sources of public funding are vitally important for R&D, but given that public funding made up only 26% of total R&D funding in 2018 and the majority of funding currently comes from the private sector, we know that much more needs to be done to encourage private sector investment. According to Government estimates from 2019, we will need an additional £12 billion per year of private investment to meet the 2.4% target. That is significant.

Currently, British businesses invest less in R&D than those of similar nations. Investment is concentrated in major players in just a few sectors, with the life sciences sector consistently the largest R&D investor in the UK, but my understanding is that this, too, has been flatlining in recent years. There are concerns over the long-term certainty of key schemes which have been supporting early stage innovation in the UK life sciences sector. I chair the all-party parliamentary group for life sciences, and colleagues tell me that despite being recognised by the Government as a highly effective scheme for driving business investment in R&D, the biomedical catalyst scheme still has no confirmed budget for the 2021 competition. I could say more, but time presses.

I will touch briefly on workforce issues. Back in 2019, the previous Science Minister, the right hon. Member for Kingswood (Chris Skidmore), highlighted that, as well as private investment, one of the key challenges we may face in meeting a 2.4% target will be the workforce, with an estimated 260,000 additional researchers working in R&D across universities, business and industry likely to be required. He was right. We should be concerned, because there are a number of known workforce issues facing those in R&D.

As the Royal Society has helpfully set out, the UK immigration system is still one of the most expensive in the world, which is a particular deterrent to international researchers and entrepreneurs considering making the UK their research home. Careers in R&D are not as attractive as they should be, with relatively low salaries, short-term funding, unclear career development and difficulties facing researchers and technicians looking to shift between academia and industry at various times during their careers.

Diversity is also an issue, with only about 7% of managers, directors and senior officials in academic and non-academic higher education positions being black, Asian and minority ethnic. Despite many excellent initiatives, such as Athena Swan, still too often there are too few women.

All of this must be challenged in order to create a welcoming working culture in R&D. I recognise the good work that the Minister has done, and is doing, to tackle this. I am glad that the Government have made at least some moves in the Budget to undo the damage inflicted by their predecessors, by looking again at visa restrictions, with a view to attracting global talent, and that they have recognised the need to tackle these wider issues in their recent research and development road map. I look forward to seeing the detail of the people and culture strategy that has been promised.

Unfortunately, as the trade union Prospect notes, public sector research establishments have found themselves constrained by public sector pay freezes by successive Conservative Governments, and unable to match the competitiveness of pay offered by universities and elsewhere in the private sector. Another former Science Minister, David Willetts, admitted in 2020 that it was only when George Osborne visited Cambridge’s Medical Research Council laboratory of molecular biology and saw the impediments to performance caused by public sector rules that the then Chancellor was convinced to grant it and similar bodies greater freedoms. I am told by Prospect that those freedoms have once again been removed. If that is the case, they should be restored.

In conclusion, we all recognise the importance of this sector to the future of the UK. I suspect that the Minister is fighting her corner, and all power to her. If she needs an aria, she should look no further than Puccini, “I will win—vincerò!” “Nessun Dorma” did once capture the public mood, and we need to show that our victory against the virus, if it is secured, will have come on the back of UK researchers and our great universities. We should celebrate them, but that means securing the funding. Minister, please sort out how Horizon is to be funded, restore the ODA cuts, and start to undo the damage that I fear has already been done to our international reputation.

[Peter Dowd (in the Chair)]

I ask Members to speak for no more than five minutes.

Budget Resolutions

Peter Dowd Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

As the Chancellor gave his Budget speech last week, there was a collective groan across the country not just at the bad jokes, but at the content of the most uneventful Budget speech of recent times. There was no game-changing investment announcement and no lasting solutions for the growing difficulties facing our country. The Chancellor’s speech personified this Government: out of touch, inconsistent and directionless.

The Cabinet is morbidly and irrevocably split on Brexit and, rather than focusing on their individual briefs, Ministers now spend their days attempting to steal each others’. The International Trade Secretary wants to run Britain’s foreign policy. The Environment Secretary is learning all about hypothecation, apparently fancying himself as Chancellor, and The Times reported that he is busy researching the difference between a J curve and a J-cloth. Meanwhile, the Foreign Secretary continues to scheme for the top job. He is the first to praise the Prime Minister, while constantly plotting to undermine her—Iago on steroids. Ironically, the only person who does not want to be in No. 10 is its current occupant. She remains, as in the Monty Python parrot sketch, nailed to the perch and “off the twig”. The Prime Minister’s metabolic processes are, politically speaking, history.

The most important announcements made last week were not the Chancellor’s recycled policies, but those from the Office for Budget Responsibility. The OBR lowered UK growth forecasts, business investment, productivity rates and wage growth for the next five years, blowing a hole in the Government’s economic credibility. As for balancing the books, under the Government’s current projection, the UK budget will not be in surplus until 2030 at the earliest—a full 15 years after the former Chancellor said that the deficit would be eradicated. Workers who have already endured a decade of stagnant wages and lost earnings will not see their pay return to pre-crisis levels until 2025. And there is more. UK households face the biggest squeeze in disposable income since records began. The message from the OBR is clear: Britain under the Tories is now facing a record 17-year downturn in pay.

The Budget did nothing to eradicate the impact of austerity on women, who have disproportionately borne the brunt of it. The abolition of stamp duty for first-time buyers is of course welcome, but the OBR rightly points out that the move will increase house prices. Many Government Back-Benchers called for action to help the next generation, but the best the Chancellor could muster was a millennial railcard that young people cannot even use to commute to work and that will not even cover the cost of the 3.6% rail fare increase next year.

On universal credit, the Government finally listened to Labour and scrapped the seven-day waiting time, but they have done nothing about the roll-out.

The Government once again ensured that the NHS and its staff will remain underfunded and underpaid, and the extra money announced in the Budget does not even meet NHS England’s call for extra funding. Far from being dead and buried, the public sector pay cap remains alive and well. Public sector pay is now set to fall to its lowest level by comparison with the private sector, and the Chancellor is trying to divide public sector workers.

As I have said so many times at this Dispatch Box, the UK’s economic growth wholly depends on our ability to raise productivity rates, and there was nothing of any substance whatsoever in the Budget to help that. The Government continue to fail in delivering the infrastructure and investment that the regions so desperately need. Like so many of this Government’s policies, their industrial strategy White Paper released yesterday is thin on details and thinner on ideas—another damp squib. It is about time that this Government went. They should pack their bags, get the Prime Minister out of No. 10 and hand things over to the Labour party to do the job properly and get growth back for this country.