Research and Development Funding

Steve McCabe Excerpts

Wednesday 17th March 2021 Westminster Hall

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

Let me begin by congratulating my hon. Friend the Member for Cambridge (Daniel Zeichner) on securing the debate and by welcoming the proposals for ARIA, which I believe is about to begin its legislative journey. It is good to hear that ARIA will have a guaranteed life of at least 10 years and that the chair will be responsible for its mission. It would also be good to hear that industry will be represented on the board. There is widespread recognition that innovation funding is just too short term in this country. The Catapult programme, for example, which has been a significant success, is funded in five-year blocks. The Select Committee on Science and Technology recently called for long-term funding for Catapult.

We need that long-term funding and support for research that might fail. Otherwise, we will be in the game of trying to spot and back winners. That is not the way to lead research in this country. We have a 10-point plan for the green industrial revolution. We have set out the grand challenges in the industrial strategy. Surely we now have to develop an R&D strategy that supports those measures and is aimed at finding jobs for the future.

Let me pick two areas. We have committed to phasing out petrol and diesel cars by 2030. When we take into account the rules of origin requirements guaranteeing free entry to the single market, that probably means 2027. Batteries account for 60% of the value of an electric car. The UK Battery Industrialisation Centre is helping with the developments, but in Europe, CATL, Samsung, LG Chem and SK Innovation are already building gigafactories close to European car manufacturing centres. Unless there is more support and subsidy, as is happening on a massive scale across Europe, we will be the losers.

With all due respect to my hon. Friend the Member for Cambridge, we need a strategy to support those areas with high industrial R&D investment but poor access to public money. The alternative is simply to reinforce the golden triangle, which already benefits from the lion’s share of UKRI and the industrial strategy challenge fund. In south Birmingham, we are building the health innovation campus, dedicated to translational health and life sciences research. The first phase of the partnership, involving the University of Birmingham and the University Hospitals Birmingham Women’s and Children’s NHS Trust, will include space for small and medium-sized enterprises and scale-ups, working in med-tech, precision medicine, diagnostics and digital health care, the very areas we need to develop.

The campus was approved as a life sciences opportunity zone last February, the first outside the south-east. Now the Government need to demonstrate what benefits attach to being an opportunity zone. As Professor Richard Jones points out in his paper, “The Missing £4 Billion”, the east midlands, west midlands and north-east benefit from business-led investment at or above the UK average, but suffer from low levels of public investment.

There is a concentration of UK R&D activity in the three areas of London, the south-east and the east of England. Over the past 10 years, 72% of R&D jobs in the 10 most R&D intensive industries were in the sub-regions covering London, Oxford and Cambridge. If the Government’s proposed uplift in R&D investment were targeted on projects outside the golden triangle, it could mean a further £9 billion for regions where there is real industrial potential.

Now is surely the time to maximise the benefits of combining public funds and business investment, to take risks on research, to ensure that resources are distributed fairly in a way that supports new jobs and new industries.