Regional Innovation and Growth
Debate between Tom Gordon and Chi Onwurah
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I am grateful to the Backbench Business Committee for allocating time for this statement. On behalf of the Science, Innovation and Technology Committee, I put on the record our thanks to the Committee Clerks and specialists who supported this inquiry.
We are told on a daily, if not hourly, basis that the source of all our political, public service and economic woes is the lack of economic growth. The Labour Government were elected on a platform of delivering economic growth across the country through their “unashamedly place-based” modern industrial strategy. Across the UK, we have world-class scientific research institutions and universities, two of which are in my constituency: Newcastle University and Northumbria University. Indeed, the importance of the innovation ecosystem is reflected in the Government’s pledge to spend £86 billion of public money on R&D by 2030, and to leverage at least £3 of private investment for every £1 of public investment.
The Committee launched its inquiry in December 2024 to assess the role of our innovation ecosystem in achieving this Government’s wider economic growth mission across the UK. Our call for evidence assessed the role of structural factors in influencing the success of start-ups, spin-outs and other innovation-focused enterprises; these included the tax system, regulatory requirements and standards. Across six sessions, we heard from innovators, investors, local and regional leaders, universities, Ministers, UK Research and Innovation, and Innovate UK. I place on the record my thanks to those who gave evidence. By doing so, they helped us to shape our report, and we are very grateful.
Our report, entitled “Flying Blind: Innovation, Growth and the Regions”, was published in March. Profound policy mistakes have led to a multi-decade failure to foster even economic growth geographically. From a productivity and GDP per head perspective, we are two nations: Greater London and the south-east, and everywhere else. Last year, GDP per head in the UK averaged just over £39,000. Every region in the country is below that figure, apart from the south-east, at £41,000, and London, at a whopping £69,000. My Committee’s report found that if the £86 billion of public funds is accompanied by unlocking private investment across the country to commercialise innovation, it could deliver regional economic growth and therefore better living standards and quality of life for all our constituents. Although we welcome the Government’s commitments, including a £500 million fund for regional innovation clusters, that is less than 1% of our public research spend.
The work of our Committee member and former Minister, the hon. Member for Mid Norfolk (George Freeman), rightly emphasised the power of clusters. Our report found that there is still untapped potential for innovation-driven activity across the regions, with an increase in the number of innovation-led clusters. Regional inequalities continue to persist in R&D funding. The golden triangle between Oxford, Cambridge and London receives significant public R&D funding and private investment, absorbing 46% of non-business R&D despite having only 36% of the population. The Minister for Science has asserted that cutting-edge research is best carried out in centres of excellence, and we found such centres in Cardiff, Durham, Edinburgh, Leeds, Manchester, Milton Keynes and Newcastle, among many others.
Geographic clusters can drive productivity, foster concentrated networks of expertise, infrastructure and collaboration, and support regional growth. Their success relies on sustained investment, established infrastructure and skills concentration. We have said that the Government should establish a national framework for cluster development that embeds regional key performance indicators. We have said that the Government should take a data-driven approach and comprehensively monitor, map and support the growth of innovation-led clusters across the regions. We have also said that the Government should publish annual data covering the performance and impact of innovation clusters. The data should set out any gaps in infrastructure, skills, and commercialisation outcomes, and detail how public investment is being used across different parts of the country.
Throughout our inquiry, we heard of major shortfalls in gathering and sharing data relating to innovation policy, meaning that there is currently no clear way to track the pipeline from R&D research to capital investment, company growth and wider economic benefit. There is no system that brings together the data on all research and innovation spending across the public sector. The Public Accounts Committee noted in July last year that UKRI aimed to link up all such data across Government but had not given a target date, and that “significant limitations” in its data systems make it hard to manage its budget strategically.
We concluded that the UK is flying blind when it comes to public and private R&D spending, and it is unacceptable that we cannot measure and map R&D spending and private sector investment. The Secretary of State rightly told us of her desire to leverage public funds to unlock private investment in innovation- led activity across the country, but without clear and transparent measures of what is being done and its impact, it is impossible to assess existing policies or identify improvements.
I thank the Government for their response, which was published on Tuesday. There is much to welcome in it, particularly the Government’s joined-up contribution from the Department for Science, Innovation and Technology, the Ministry of Housing, Communities and Local Government, the Department for Business and Trade, the Department for Education, the Treasury and the Cabinet Office.
I welcome the Government’s agreement with the key thematic areas highlighted in our report, and their acceptance of the need for better data. More specifically, the promise of
“a more robust and joined-up approach to monitoring the development of innovation clusters over time”
is a step in the right direction. The Government also committed to doing more to help innovators access public funding and, crucially, to prioritise the procurement of innovation, which is the best way for the Government to support the development of sovereign UK alternatives to global technology providers. I note and welcome the Chancellor’s recent directions to Ministers on this topic.
However, I am disappointed by the Government’s rejection of our call to establish a framework for monitoring cluster development, and by the fact that they will not designate a Minister responsible for championing innovation in each region of the UK. That leaves us with only a Minister with responsibility for Cambridge and Oxford innovation—the Minister for Science. The Government have argued that they should not be supporting the establishment of a Midlands Mindforge or a Northern Gritstone, and they have not accepted our recommendation to establish regional branches of the British Business Bank. By failing to accept these recommendations, the Government are depending too heavily on an industrial strategy that does not have appropriate regional data.
We chose to call our report “Flying Blind” because that was the best summary of the approach of successive Governments to innovation policy. Regional growth and development can transform a region and rebalance our nation’s economy, helping to address the inequalities that drive division. Greater Manchester is an example. Under Mayor Andy Burnham’s leadership, we have seen 3.1% annual growth sustained over 10 years, which is faster than London and twice that in the UK as a whole. That shows the power of regional leadership and investment.
The current Government deserve credit for backing our national research and development ecosystem, but without a clearer picture of what works for different regions and a greater engagement with local leaders on what support their local innovation ecosystems need, we will continue to be flying blind.
Tom Gordon (Harrogate and Knaresborough) (LD)
I welcome the report and thank the Chair of the Select Committee for her diligent work on it. In Yorkshire, we receive less funding per head across the board for transport, schools and, importantly, health research. We know that Yorkshire receives a quarter of the funding per head that London receives, despite worse cancer incidence and worse cancer outcomes, which are key health aspects. Does the hon. Lady agree with me that, given that regional imbalance, tackling health inequalities means making sure that research funding is better allocated across our regions?
Dame Chi Onwurah
First, I thank the hon. Member for his contribution to the Select Committee while he served on it. He is absolutely right to trace the link between research funding and key issues such as health inequalities, from which we also suffer in the north-east of England. He is right to identify the need to address the differences in health research funding, but without the appropriate data and information, it is hard to do so. He is also right to look for that to be addressed by the Government, and we shall be looking at the actions of both DSIT and the Department of Health and Social Care in this area.
Social Media: Misinformation and Algorithms
Debate between Tom Gordon and Chi Onwurah
Dame Chi Onwurah
I thank my hon. Friend and constituency neighbour for highlighting this incredibly important issue and for the work that she does in this area. She is absolutely right to say that. The Committee heard very moving and distressing evidence that suicide and self-harm content can be and has been amplified by social media algorithms and that that can play a role in suicide and self-harm, including by young people. Promoting suicide is illegal, and the Online Safety Act introduced an offence of promoting self-harm, but it does not do enough to tackle legal content that promotes suicide or self-harm, as with the rest of legal but harmful content, such as misinformation. The Committee’s recommendations that platforms should be held accountable for the algorithmic amplification of misinformation would address part of what my hon. Friend is concerned about. We hope that in implementing those recommendations, the Government would set out how they would fully address her concerns.
Tom Gordon (Harrogate and Knaresborough) (LD)
I am a member of the Select Committee over which the hon. Lady presides as Chair, and I thank her and all the staff who helped with this report and inquiry. I know that many of us in this place wear not one, but multiple hats; I also sit on the Joint Committee on Human Rights, and we are doing an inquiry into AI and human rights. Some of the work from this report will be helpful and inform us in looking at some of the key issues, so, with another hat on, I thank her for that.
One of the evidence sessions that has stuck with me from working on the report is when we had social media company bosses in front of us. They talked about how they removed most of the content within 10 minutes in 90% of cases, but they did not accept responsibility for the proliferation of that data, information and content outside their own spheres. What worries me is that, at a time when we have advancing technologies and a great pace of change and we need to maintain regulation at a breakneck pace, companies—particularly social media companies—are unravelling and unpicking their content notes, their monitoring and how they look for and remove information that might be harmful. Does the Chair of the Science, Innovation and Technology Committee agree that we need to do more in regulating current approaches and ensure that the companies do not backslide on their obligations?
Dame Chi Onwurah
I thank the hon. Gentleman, my fellow Committee member, for that question, as well as for his contribution to this report and the work of the Committee, which has been exceedingly valuable. He has raised a really important point; we heard evidence from Meta about Facebook content checking, and how outside the UK and the US it was moving from fact-checking to community notes, which X has also done. The Committee has recommended adopting the principle that platforms are held accountable, which must go hand in hand with those platforms setting out how they can demonstrate that accountability. The report also recommends that the Government undertake research into what effective fact-checking looks like and how misinformation is spread, because one of the things that the Committee—which is a scientific Committee—observed was the lack of real evidence in thar area. That is partly because the algorithms and platforms are so opaque and secretive about how they operate.