Madam Deputy Speaker (Dame Rosie Winterton) I must draw the House’s
attention to the fact that financial privilege is engaged by Lords
amendments 1, 12 and 14. If the House agrees to any of these Lords
amendments, I shall ensure that the appropriate entry is made in
the Journal. Clause 2 ARIA’s functions 7.10pm The Parliamentary
Under-Secretary of State for Business, Energy and Industrial
Strategy (George Freeman) I beg to move, That this House
disagrees...Request free trial
Madam Deputy Speaker ( )
I must draw the House’s attention to the fact that financial
privilege is engaged by Lords amendments 1, 12 and 14. If the
House agrees to any of these Lords amendments, I shall ensure
that the appropriate entry is made in the Journal.
Clause 2
ARIA’s functions
7.10pm
The Parliamentary Under-Secretary of State for Business, Energy
and Industrial Strategy ()
I beg to move, That this House disagrees with Lords amendment
1.
Madam Deputy Speaker
With this it will be convenient to consider Lords amendments 2 to
15.
I am delighted that the Bill to create this exciting new agency
has returned to this House and that I am able to speak to it for
the first time in my role as Minister for Science, Research and
Innovation. I pay tribute to my ministerial colleague for his work on the Bill in
the other place. Not for the first time in matters scientific,
their lordships have kept our Minister very busy on the Front
Bench. I also pay tribute to my hon. Friend the Member for Derby
North (), who so capably led the
Bill when it was first before the House.
There are 15 amendments for our consideration tonight. Fourteen
of those were tabled or supported by the Government. I will
summarise them quickly. Amendments 2 to 8 relate to changes the
Government made in response to the Delegated Powers and
Regulatory Reform Committee’s report on the Bill. In doing so, we
demonstrated the seriousness with which we take the DPRRC’s
recommendations and the Government’s commitment to acting upon
them. The effect of those amendments is to omit clause 10, which
contained a broader power to make consequential provision, and to
replace it with a narrower, more specific power in clause 8. The
new power can be used only in consequence of regulations
dissolving ARIA. Other amendments are needed to tidy up the rest
of the Bill and reflect that change. I hope that the changes are,
in general, welcome.
Amendments 9 and 10 remove a power for ARIA to pay pensions and
gratuities determined by the Secretary of State to non-executive
members. We have tested that thoroughly and are content that in
ARIA’s specific case, that power is not needed. Again, the two
amendments reflect the usual process of improving the Bill in
response to scrutiny and the expertise that colleagues here—and
in particular in the other place—have brought to bear.
Amendments 11 and 13 remove the amendments previously included in
the Bill that had the effect of reserving ARIA. I have had
productive discussions on this with my ministerial colleagues in
Wales, Scotland and Northern Ireland, to reiterate the importance
of ARIA and our broader science policy to help strengthen the
Union. I am delighted that they share my vision and ambition for
ARIA and that we have reached an agreement on the independence of
ARIA—a memorandum of understanding that is a shared commitment to
safeguard the organisation’s most important characteristics, and
which means the reservations are not needed. I am delighted to be
able to report that legislative consent motions have been passed
in all three devolved legislatures on the basis of that
agreement, and I similarly commend it to the House.
Government amendments 12, 14 and 15 apply some relevant
obligations to ARIA that would normally apply automatically to
public authorities listed in the Freedom of Information Act 2000.
The amendments provide for ARIA to be treated as a public
authority for the purposes of the Data Protection Act 2018, the
Income Tax (Earnings and Pensions) Act 2003, the Enterprise Act
2016 and the Small Business, Enterprise and Employment Act 2015.
They also amend various regulations and the UK GDPR to reflect
that. That ensures that ARIA is treated in the same way as a
public organisation normally would be treated in those important
areas.
(Cambridge) (Lab)
The Minister will know from previous discussions that the
question of freedom of information has come up before. Would it
not be much simpler just to make ARIA subject to the Freedom of
Information Act? In the current climate, would that not reassure
the public?
It may reassure the public, but we also have to take into
consideration the fact that to succeed, world-class scientists
have been recruited to ARIA to lead in cutting-edge science. That
very small staff need to be sure that they will not be tied up
answering 101—often spurious—freedom of information requests from
the media, who are keen on running stories. We want to make sure
the agency is accountable properly but not bogged down in what
can be hugely onerous freedom of information requests.
(Wokingham) (Con)
In that connection, could the Minister give the House some brief
guidance on what he, as the accountable Minister, would expect by
way of discussion and influence over corporate plans and budgets
and onward reporting to the House?
I am grateful to my right hon. Friend for that question, and he
will not be surprised to know that it is one I have also been
asking since coming to this role. The point of ARIA is to be a
new agency for doing new science in new ways, and it has been
structured specifically to avoid meddling Ministers, even those
with a good idea, and meddling officials, even those with good
intent, and to create an agency that is free.
My right hon. Friend asks an important question. As we appoint
the chief executive officer and the chair, the framework
agreement will set out, a bit like a subscription agreement, the
agency’s operating parameters, which will be published in due
course. Each year ARIA will have to report on its stated plans.
Crucially, as is so often not the case in scientific endeavour,
ARIA will report where happy failure has occurred so that we do
not continue to pour more money into scientific programmes that
have not succeeded, which I know will reassure him. We want ARIA
to be free to be honest about that, and not embarrassed. ARIA
will be annually accountable through the framework agreement.
Finally, Lords amendment 1 deals with the conditions that ARIA
may attach to its financial support. This arises from a series of
important discussions in the other place relating to ARIA’s duty
to commercialise intellectual property that may be generated,
which I am keen to address properly. However, the amendment, as
drafted, does not actually prevent ARIA from doing anything; it
adds examples of conditions that ARIA may attach to financial
support, but ARIA already has the general power to do just that.
Legally, the amendment simply represents a drafting change. As
such, we cannot accept it, but we understand and acknowledge the
importance of the point that the noble Lord Browne had in
mind.
It is our firm belief that, although it is not appropriate at
this stage to specify ARIA’s contracting and granting
arrangements in legislation, we recognise the substance of the
concerns underlying the amendment: namely, that ARIA should have
a duty to the taxpayer to ensure it is not haemorrhaging
intellectual property of value to the UK. I will outline our
position on that.
The amendment focuses principally on overseas acquisition of IP
relating to the principles on which the Government intervene in
foreign takeovers of UK businesses, particularly where those
businesses have benefited from public investment in research and
development activities. The National Security and Investment Act
2021, which fully commenced earlier this month, provides just
such a framework, and it marks the biggest upgrade of investment
screening in the UK for 20 years.
The NSI Act covers relevant sectors, such as quantum technologies
and synthetic biology, that have benefited from significant
public investment, and it permits the Government to scrutinise
acquisitions on national security grounds. This new investment
screening regime supports the UK’s world-leading reputation as an
attractive place to invest, and it has been debated extensively
in both Houses very recently. We do not believe that revisiting
those debates today would be productive.
Although the NSI Act provides a statutory framework, a much
broader strand of work is under way. As Science Minister, I take
very seriously the security of our academic and research
community. A number of measures have been taken in the past few
months and years to strengthen our protections. We are working
closely with the sector to help it identify and address risks
from overseas collaborations, while supporting academic freedom
of thought and institutional independence.
Members do not need me to tell them that intellectual property is
incredibly valuable and we increasingly face both sovereign and
industrial espionage. It is important that we are able to support
our universities to be aware of those risks and to avoid them.
The Bill already provides the Secretary of State with a broad
power of direction over ARIA on issues of national security,
which provides a strong mechanism to intervene in its activities
in the unlikely event it is necessary to do so.
(Aberdeen South) (SNP)
I welcome the Minister to the Dispatch Box for the first time on
this Bill. He is saying that ARIA can already do this, so the
Government do not need to legislate in this regard, but that the
Government would, none the less, be keen to see ARIA do it. There
seems to be a discrepancy in that thought process.
There is no discrepancy. I will explain why but, essentially, the
Bill already sets out ARIA’s statutory responsibility to generate
economic return for the UK, and the hon. Gentleman will know, as
I do from my career negotiating intellectual property agreements,
that at this stage it would be wholly inappropriate to mandate in
statute the form that these intellectual property agreements will
take. To be blunt, we do not yet know what programmes the chair
and chief executive will put in place. It is only when we know
the sort of science that ARIA is doing that we will possibly be
in a position, through the framework agreement, to set out the
appropriate ways to ensure that value is maximised.
Security issues will also be a core consideration in ARIA’s
governance arrangements in the framework agreement to ensure its
effective functioning as an organisation. I confirm to colleagues
that the framework document, which deals with those issues, will
include obligations on ARIA to work closely with our national
security apparatus. That is prudent to ensure that ARIA’s
research is protected from hostile states and actors and to stay
connected to the Government’s wider agenda on strategic
technological advantage.
The Government’s chief scientist, who will be on the ARIA board,
will bring intelligence and expertise across security issues
within Government, supported by the new Office for Science and
Technology Strategy and the National Science and Technology
Council. ARIA will of course have internal expertise to advise
its board and programme managers, while also working with
recipients of its funding in universities and businesses on
research-specific security issues. That will be vital for ARIA to
stay at the forefront of responding to the challenging nature of
the UK’s interests in this area.
There is also the question of how ARIA responds to the UK’s
strategic interests in science and technology more generally
where they may not quite fall under the national security
umbrella. The integrated review, the creation of the new OSTS and
the National Science and Technology Council, on which I sit,
outline our ambition to ensure that there is a serious, strategic
machinery of government commitment to the strategic industrial
advantage of UK science and technology. That is a fundamental
priority for me and the Government more broadly.
ARIA is nestled within that structure and is required to be aware
of all those priorities, but we must keep its role in
perspective. It will be only a small part of a landscape that we
are explicitly seeking to make independent of Government and free
to explore new funding approaches. The whole point of ARIA is to
be a new agency and to do new science in new ways.
(Blackley and Broughton)
(Lab)
The Minister is being admirably blunt about keeping interfering
Ministers and officials from controlling or influencing ARIA, but
there is also influence from the scientific establishment, which
has its own programmes and would like the sums of money in ARIA
to go to them. Given the structure of the board, is he satisfied
that ARIA will maintain its independence not just from the civil
service and Ministers, but from the scientific establishment?
The hon. Member raises a very important point. Yes, I am
satisfied, and for this reason: the way in which the agency has
been established through the Bill and our plans to appoint the
CEO and the chair on the basis that they will set out a very bold
vision for ARIA to be the agency for new science in new ways. All
the support that we are providing is specifically designed to
allow them to operate in an environment where they can draw on
the very best of UK science infrastructure and expertise, but not
find themselves bound by either the short-term grant application
process that dominates or the often substantial interests seeking
investment in their own field. We will be able to attract the
people we intend to attract because of that freedom. For that
reason, I am confident—as that will be set out in the framework
agreement and held to account by the board of ARIA and the
scientific advisory board—that we will be able to ensure that
that is the case.
Although ARIA will operate independently, it will be guided by
key obligations regarding economic and UK benefit. ARIA must, in
all its activity, have regard to the economic growth or economic
benefit in the UK, alongside other considerations. That statutory
obligation is set out clearly in clause 2(6), and it is right
that that is in the Bill. Public investment in R&D must drive
long-term socioeconomic benefit and deliver value to UK
taxpayers. ARIA will be scrutinised by Government and Parliament
on how effectively it fulfils its functions, including that
one.
I can confirm that mechanisms for that scrutiny will be in the
framework agreement. This includes requiring an internal
evaluation framework for ARIA programmes—that deals with the
point made by my right hon. Friend the Member for Wokingham
()—and looking at, for example,
their expected benefits and alignment with the organisation’s
strategic objectives. It also includes setting the terms on which
ARIA produces annual accounts and reporting, through which ARIA’s
CEO will be accountable to Parliament for how the resources
allocated to it are used. The National Audit Office will be able
to examine the value for money of ARIA’s activities, and we in
the Government must be assured of that value, on which ARIA’s
future funding will depend. Everyone involved is clear about
that.
There are many ways in which the obligations that I have set out
might be felt in respect of how ARIA operates. For example, ARIA
may employ contracting arrangements that require funding
recipients either to seek to exploit the outputs in the UK or
forfeit the funding, as other funders routinely do. In some
cases, ARIA may retain IP rights—it has that freedom—and will be
able to draw on specialist support from the new Government office
for technology transfer. That will help ARIA to extract the
greatest possible value from its knowledge assets.
In general, we expect ARIA programmes to produce long-term, deep
scientific benefits that are felt over the long term, and to
support the highest-risk research where there is a clear role for
public funding. It would be premature to seek to legislate in
statute at this point, before the appointment of the CEO and the
chair or the establishment of the funding programme plan. In
addition to that being premature, given that its very freedoms
will be a major attraction for people to come from around the
world to work at the agency, we are concerned that to be seen to
shackle those freedoms in statute may well disincentivise the
most innovative scientists and researchers from coming to join
programmes.
Finally, this issue encompasses the entirety of our R&D
system and approach to investment in UK science and technology
and we are extremely focused on it, but changes to ARIA alone
cannot alter the wider environment. We must ensure that funding
from ARIA is not subject to more stringent conditions than other
public R&D funders, because that would undermine the
independence and agility that are the defining characteristics of
this exciting initiative for UK science.
(Newcastle upon Tyne Central) (Lab)
I welcome the Minister to his place in leading on this important
Bill and echo his thanks to the former Minister, the hon. Member
for Derby North (). I also thank colleagues
in the other place who have worked so hard to improve the Bill.
In particular, I thank my noble Friend Lord Browne for his
successful and much-needed amendment to protect Britain’s
intellectual property.
The UK has a proud tradition in science and innovation. We are
renowned around the world for the scientific breakthroughs and
discoveries that have pushed humanity forwards. From the
discovery of penicillin to the invention of Stephenson’s
Rocket—in Newcastle—UK science has again and again pushed the
boundaries of humanity’s knowledge.
UK science is not only inspiring but key to our health and that
of our economy, as the pandemic has shown. Our university
research base alone contributes £95 billion to the economy,
supporting nearly 1 million jobs in science institutes, charities
and businesses of all sizes. We have many innovative start-ups
throughout the country that require only the right support to
contribute to the innovation nation that our history, economy,
security and future prosperity all demand. That is why it is so
important that we get the Advanced Research and Invention Agency
right.
ARIA, originally the brainchild of very-much-former adviser
, is positioned as a
high-risk, high-reward research agency, based on the Defence
Advanced Research Projects Agency in the US. Labour welcomed ARIA
and continues to support it—it has great potential to fill a gap
in the UK’s research and development landscape and help deliver
fantastic inventions—but we are clear that the benefits of ARIA’s
investments must be felt in the UK. We are equally clear that
without Lords amendment 1, that may not be the case.
Lords amendment 1 would give ARIA the option to treat its
financial support to a business as convertible into an equity
interest in the business and thus to benefit from intellectual
property created with ARIA’s support. It would also enable ARIA
to require consent during the 10 years following financial or
resource support, if the business intended to transfer
intellectual property abroad or to transfer a controlling
interest to a business not resident in the UK.
7.30pm
We have to start by acknowledging that the UK does not provide a
sufficiently supportive environment for innovation start-ups to
thrive. That is why we have already lost so many of them. Too
often, tech start-ups face a choice between relocating outside
the UK and being bought out by a larger multinational, and the UK
loses out. In 2014, Britain had probably the most important and
groundbreaking artificial intelligence company in the world,
DeepMind, but instead of capitalising on this cutting-edge
technology and instead of introducing an effective support system
for start-ups, the Government allowed it to be sold to Google for
£400 million, with no investigation or action. In 2020, early
investor Humayun Sheikh estimated that DeepMind would be worth
$30 billion now. That is a huge reward on the investment, but not
one that has gone to UK taxpayers or UK citizens, and the UK is
now in effect losing out on billions in economic benefits.
In the Labour party, we want to support our start-ups. The
Government—and, indeed, the Minister in his comments—have tried
to claim that Lords amendment 1 is not needed because they
believe that the National Security and Investment Act already
gives sufficient powers to scrutinise and intervene in takeover
bids. However, the Minister must acknowledge that, despite our
attempts to include economic security in the NSI Bill, the
Government insisted on a much narrower definition of national
security. While it is progress that the Government are reflecting
national security in takeovers and mergers policy, for which we
have been calling for a long time, the NSI Act does not address
the issue of intellectual property and its economic value.
The Government have also argued that the amendment will
discourage companies from participating in ARIA because it is
important for them to own their intellectual property, but what
innovative start-ups really need is support so that they do not
have to relocate to scale up. PsiQuantum, a world-leading quantum
computing company credited with building the world’s first useful
quantum company, started in Bristol, but had to relocate to
Silicon valley to access greater support. With this amendment,
companies can benefit from ARIA’s support and the UK can benefit
from the innovation, instead of seeing it move abroad.
The Minister has set out that he shares our concerns, but I am
afraid that he does not really seem to have a plan to address
them. He hints that the framework agreement setting out ARIA’s
functions will do so under some kind of general requirement to
work with Government, but without any detail. In many ways, ARIA
is emblematic of the Government’s science strategy—big promises
followed by a lack of detail, a lack of transparency and a
surfeit of confusion. Conservative peer made the point:
“If ARIA is to have a strategy for the funding it receives from
the Government, it needs to know in advance whether it can retain
revenue derived from investment… That is where I want the most
specific assurances from my noble friend that the Government will
provide that opportunity to ARIA.”—[Official Report, House of
Lords, 14 December 2021; Vol. 817, c. 82, 83.]
I agree with him.
We only want what is truly in the interests of our nation. We are
not wedded to a particular form of words and we are willing to
discuss an alternative that protects IP, but we need assurances
that inventions generated by ARIA support, financial or
otherwise, will benefit the UK, and I am afraid to say that the
Minister just really has not given such assurances.
To assist the hon. Lady before she decides whether to divide the
House, I just wanted to make it very clear that there is a
statutory obligation on ARIA, set out clearly in clause 2(6),
that it must have regard to
“economic growth, or an economic benefit, in the United
Kingdom”
as a core part of its statutory duties. We simply want to make
sure that the leadership team, through the framework agreement,
have the freedom to set out what the right mechanism is, rather
than to mandate it now.
I thank the Minister for that intervention, which demonstrates
that he is with us in spirit but he just does not want to be with
us in actual legislation. There is something of a confusion of
thought there. I am very familiar with the clauses that require
ARIA to have regard to economic benefit, but if he thinks this is
something ARIA should be doing and should look to do—again, as we
have said, this amendment is enabling and not prescriptive—surely
he should be happy to make that clear. If he thinks it is too
constraining for ARIA to do this, he ought to make that clear. He
is the Minister and this Bill should reflect what the intent is,
and the intent should be to ensure that the benefits from
intellectual property generated, created and invented in the UK
should be felt in the UK.
Lords amendments 2 to 8 limit ministerial powers to dissolve
ARIA, in response to the delegated powers in the Regulatory
Reform Committee’s report on the Bill, and we will not oppose
those amendments. They prohibit the Minister from making
consequential amendments to primary legislation and from
dissolving ARIA in the first 10 years. Lords amendments 9 and 10
remove the Minister’s powers to determine a pension or gratuity
for non-executive ARIA members. It should be noted that the
Minister appoints non-executive members to ARIA’s board, and it
is refreshing to see a Conservative Government taking steps to
limit cronyism in advance of major losses to the public purse.
Lords amendments 11 and 13 mean that ARIA will no longer be
treated a reserved matter in relation to Scotland, Wales and
Northern Ireland, and we also do not oppose this. Labour is clear
that devolved voices must be heard and that scientific
opportunities must be spread across the UK, so the consent of
devolved Administrations is crucial.
Lords amendments 12, 14 and 15 provide for ARIA to be treated as
a public body under the Income Tax (Earnings and Pensions) Act
2003, the Small Business, Enterprise and Employment Act 2015, the
Enterprise Act 2016 and the Data Protection Act 2018. My
colleague in the other place, of Darlington, pointed
out, as did my hon. Friend the Member for Cambridge (), that this would not be
necessary if ARIA was subject to freedom of information requests,
something that Labour has repeatedly called for. The Government
were so busy trying to ensure that ARIA would not be treated as a
public body for the purposes of FOI that they had to tack on
these amendments. That these amendments were tabled only at the
Committee stage in the Lords points to Government negligence. We
have here a Government too busy trying to avoid accountability to
do their job properly— why does that sound so familiar?
Does my hon. Friend agree that, during the covid epidemic we have
been through, some of the mistakes that have been made came about
because the Government were not as open as they could have been
with the scientific advice, and that FOI and openness are of
value to the scientific method itself? To exclude this body from
FOI potentially detracts from the science. We saw another example
of this 11 years ago, with the “climategate” emails at the
University of East Anglia, when people did not operate openly and
it caused scientific problems.
My hon. Friend makes two very important points. First, many of
this Government’s mistakes have been due to lack of transparency,
not only in the original policy of giving contracts to friends
but in the follow-up of explaining those actions. Transparency is
always a very good thing. Secondly, the scientific method is
about openness. That is how ideas, inventions and progress are
made in science. Critically, DARPA, on which ARIA is supposedly
based, is subject to the freedom of information process and finds
that that helps it in its work.
To conclude, Labour welcomes ARIA. Science and research can be
the engine of progress for our society, and we welcome investment
in our sciences. That investment, however, must benefit the
people who pay for it: the British public. Without Lords
amendment 1, we have no assurances that that will happen. If the
Government want Britain to be a science superpower, why will they
not protect British science and tech IP?
In the greatest traditions of this House, I intend to be brief,
which I am sure will be to everyone’s pleasure.
The biggest issue before us is, of course, Lords amendment 1. I
listened closely to what the Minister had to say, but I remain to
be convinced. He has paid deference to the clause, which says, if
I recall correctly, that ARIA “must have regard to”, while the
amendment simply seeks to ensure that ARIA “must”. That is a
strong difference to which the Minister should give cognisance,
particularly given that, in effect, we could be talking about the
crown jewels. We are all hopeful that ARIA will be an impressive
institution that will reap rewards for all of us right across the
four nations of this United Kingdom—while we remain within it, of
course. I find it a little contemptuous that the Government do
not want to be on that side of the argument.
The topic of equity has been raised. There are some very famous
examples. For instance, though this is slightly different, the US
Government provided a significant amount of money in a loan to
Tesla. That money was subsequently paid back a number of years
ago, prior to Tesla becoming one of the world’s wealthiest
companies and, indeed, to Elon Musk becoming one of the world’s
wealthiest men. There should be a lesson in that for the
Government, and it is one that they should heed.
From what I have heard, the Minister seems to be in broad
agreement. He thinks that what is in place will allow this to
happen in any case. I hope that over the course of the remaining
debate, to which I am sure there will be an extensive number of
contributions, he may be swayed to agree to Lords amendment
1.
(Richmond Park) (LD)
I, too, will keep my comments brief. The Liberal Democrats have
been supportive of this Bill from the start, since its Second
Reading. We very much welcome the opportunity and, indeed, the
new vehicle to get funding into science and technology in this
country.
I join the hon. Members for Aberdeen South () and for Newcastle upon Tyne
Central (), however, in saying that the absolute priority must
be to ensure that that investment stays in this country and
benefits the people, including the investors, those who may
benefit from employment and, indeed, every single one of us who
seeks to benefit from the new innovation for which this money may
well pay. A couple of weeks ago I visited my former employers at
the National Physical Laboratory in Teddington, where I saw for
myself the incredible work that is taking place on battery
technology and hydrogen technology. There is so much potential
for the future, but this country has traditionally been really
bad at converting that incredible R&D skill into
entrepreneurism and innovation and at building sustainable
businesses. That is why I think it is so important that we
support the Lords amendment, and it is certainly why we will vote
against the Government’s motion.
Question put, That this House disagrees with Lords amendment
1.
[Division 178
The House divided:
Ayes
304
Noes
208
Question accordingly agreed to.
Held on 31 January 2022 at
7.44pm](/Commons/2022-01-31/division/2CB69BD9-4CBF-47DA-9611-820AABAE4E6D/CommonsChamber?outputType=Names)
Lords amendment 1 disagreed to.
Lords amendments 2 to 15 agreed to, with Commons financial
privileges waived in respect of Lords amendments 12 and 14.
Motion made, and Question put forthwith (Standing Order No. 83H),
That a Committee be appointed to draw up a Reason to be assigned
to the Lords for disagreeing to their amendment 1;
That , , , , , and be members of the
Committee;
That be the Chair of the
Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(.)
Question agreed to.
Committee to withdraw immediately; reason to be reported and
communicated to the Lords.
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