Advanced Research and Invention Agency Bill Commons Reason 11.07am
Motion A Moved by Lord Callanan That this House do not insist on
its Amendment 1, to which the Commons have disagreed for their
Reason 1A. 1A: Because it would make provision relating to the
administration of financial support provided out of public funds,
and the Commons do not offer any further Reason, trusting that this
Reason may be deemed sufficient. The Parliamentary...Request free trial
Advanced Research and Invention Agency Bill
Commons Reason
11.07am
Motion A
Moved by
That this House do not insist on its Amendment 1, to which the
Commons have disagreed for their Reason 1A.
1A: Because it would make provision relating to the
administration of financial support provided out of public funds,
and the Commons do not offer any further Reason, trusting that
this Reason may be deemed sufficient.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, before turning to the substance of the amendment, I
thought it would be a good time to address briefly the other
major milestone in the creation of ARIA that we have reached
since the Bill was last before this House. On 1 February, Dr
Peter Highnam was announced as ARIA’s first CEO. I know that
Peers had significant interest in this appointment during our
previous debate on the Bill, given the critical role the CEO will
play in leading the formation of the agency and directing its
initial funding.
I hope noble Lords are reassured by Dr Highnam’s wealth of
experience, as he joins from DARPA where he has served as deputy
director since February 2018. I hope noble Lords will agree that
he is uniquely capable of stepping into what will be a very
important role at such a critical stage of its development. He
will take up his post in May, starting discussions with
stakeholders in the UK R&D system across academia, business,
government and, of course, here in Parliament.
Amendment 1 deals with the conditions that ARIA may attach to its
financial support, in response to the considerable concerns that
have been so carefully and expertly championed by the noble Lord,
. In his concluding
remarks on Report, the noble Lord set out his desire, following
more informal discussions, to hear my colleague, the Minster for
Science, Research and Innovation, outline the Government’s
position on this issue in the House of Commons. I certainly hope
that, having heard the Minister’s remarks last Monday, he will
have been pleased to hear him go slightly further than I was able
to go when we last discussed the Bill in this House.
The Minister gave further assurances on two aspects, which I will
quickly repeat here. The first is the seriousness with which he
is taking the security of our academic and research communities,
and new activities to identify and address risks from overseas
collaborations while supporting institutional independence. He
confirmed that obligations would be placed on ARIA to work
closely with our national security apparatus, to maintain
internal expertise to advise ARIA’s board and programme managers,
and to work with the recipients of ARIA’s funding in universities
and businesses on research-specific security issues. This will
ensure that ARIA’s research and innovation is protected from
hostile actors, and, most importantly, connected to the
Government’s wider agenda on strategic technological
advantage.
Secondly, and more broadly, the Minister addressed the benefits
created by ARIA and our approach to maximising and retaining
them. Specific businesses, often in important and emerging areas
of technology, have been mentioned many times during our debate
on this amendment, and the lack of consistent guiding principles
behind the engagement and support that they have received from
government has been held up for particular criticism. On this, I
hope that noble Lords noted the Science Minister’s identification
of the serious new machinery of government coming together to
drive the agenda of strategic industrial advantage of UK science
and technology as a fundamental priority for the Government and
for him personally.
The office for science and technology strategy, the national
technology adviser and national science and technology council
together represent a new and significant architecture to support
a new strategic government approach. Clearly, some patience will
be needed while this beds in, but the ambition which the Science
Minister outlined behind this change should go at least some way
towards addressing the concerns that have been raised previously
by the noble Lord, Lord Browne.
Similarly, questions have been raised in both Houses about ARIA’s
obligations to create wider public benefit, and I should
reiterate that public investment in research and development,
including through ARIA, must drive long-term socioeconomic
benefit and deliver value to UK taxpayers. This obligation will
be felt by ARIA on several levels: first, through the Bill and
ARIA’s statutory duty in Clause 2(6) to consider economic growth
or economic benefit to the UK, among other considerations. This
is the right degree of specificity for primary legislation.
Secondly, mechanisms for assessing how effectively ARIA carries
out its functions, including this duty towards UK benefit, will
be detailed in ARIA’s framework document. This was the other set
of commitments which the Science Minister provided in the House
of Commons.
These mechanisms will enable the action that ARIA takes to
respond to its statutory duty towards UK benefit to be evaluated.
As the Minister set out, this will include obligations for ARIA
to put in place a programme evaluation framework, considering its
strategic objectives as well as detailing the contents of its
reporting, which the Government and Parliament will use to hold
ARIA to account for the value it provides in all the usual ways.
Again, it is right that these more specific obligations are
included in the framework document, as they must reflect the
structure of ARIA’s programmes and require greater flexibility.
These obligations will be set as ARIA’s overall governance and
evaluation framework is finalised over the coming months, but I
should like to echo the Science Minister’s comments that we will
take seriously the concerns raised in the context of this
amendment when doing so, as we share many of them.
The third and final aspect concerns the ways in which ARIA
implements the obligations imposed on it—the statutory duty in
the Bill and the obligations within the framework agreement that
will help to give effect to it. As I have stated previously, we
might expect ARIA to do so through its contracting and granting
arrangements by requiring financial support to be repaid if
recipients do not make an effort to exploit the outcomes within
the UK—or, in some cases, by taking equity or retaining IP rights
and seeking to maximise the value of these assets within the
public sector. The Bill enables ARIA to do these things, but it
is an arm’s-length body; we have placed a premium on its
operational independence, and government should not intervene in
its decision-making on these issues.
The questions for us here should be these. Does ARIA have all the
powers and tools it needs to choose independently from a full
suite of ways in which to deliver these obligations? I would
submit that it does. Have we got the balance right in the first
place with the obligations to produce and evidence benefit placed
on ARIA through the Bill and in the framework document, which we
then use to hold it to account? On the second point, I recognise
that noble Lords have been pressing for us to go further, and I
should reflect that in response to the questions posed in this
House, and by the noble Lord, Lord Browne, in particular, we have
now made concrete commitments to Parliament about the obligations
on ARIA and greatly refined our thinking on the work that it is
still to do.
I hope the Science Minister’s assurances were useful in
demonstrating the seriousness with which these concerns are being
taken and our commitment to reflecting a mindset focused on
public benefit in ARIA’s governance framework, as that document
is finalised. I therefore strongly hope that noble Lords will be
content with the progress that has been made on this issue and I
look forward to reaching further milestones in the creation of
this important new public body. I beg to move.
11.15am
(Lab)
My Lords, I thank the Minister for his opening remarks and his
comprehensive repetition of what , the Minister, said in the
other place. To a degree, I am reassured. My concern is how I
will know that the Government live up to the undertakings implied
in the words of the Minister. I will come back to him in a
moment. I intend to be brief.
I particularly thank the Minister for his generous remarks about
me, but they ought to be shared by a significant number of
Members in all parts of the House who contributed to the debate
we had on the amendment. That the House was minded to support the
amendment had more to do with Members’ combined advocacy than the
way in which I introduced it. I also thank the Minister and his
office for earlier this week drawing my attention to the
Government’s recent announcement that Dr Peter Highnam has been
appointed as ARIA’s first CEO. This man seems uniquely qualified
to do this job; I suppose DARPA is the only place that he could
have got the experience. He is also uniquely equipped to
negotiate the framework agreement with the Government, which will
be important to how ARIA works.
I accept that the Commons reason is not challengeable, and I do
not intend to debate that or to divide the House on the noble
Lord’s Motion. However, as the Minister and his office helpfully
reminded me a week ago, while speaking to my amendment on Report,
I set out my wish to hear the Science Minister address at the
Dispatch Box the issues that prompted the amendment in the first
place. At least I should address what he said, and I will do that
for a few minutes, with the leave of the House.
In the other place, acknowledged the importance
of ARIA having a duty to the taxpayer to ensure that the
intellectual property generated by its investment in R&D is
commercialised to the advantage of the UK economy primarily, and
to ensure that it is not
“haemorrhaging intellectual property of value to the
UK.”—[Official Report, Commons, 31/1/22; col. 86.]
That reflects what he said to a number of noble Lords who met him
before Report. To paraphrase another member of the Government, he
gets it and clearly seems to understand the issue. The question
is whether the Government have a plan to address this issue and
will be able to share the development of the plan with Parliament
properly. That is what I want to concentrate on now.
Turning to what the Science Minister said, he first referred to
the terms of the amendment and argued that, as drafted, it added
only examples of the conditions that ARIA may attach to financial
support and, as it already has a general power to do just that,
it represented a drafting change that cannot be accepted. There
is no merit in this argument. The fact is that the Bill, as
already drafted by the Government, already has examples of
conditions that ARIA may attach to financial support in Clause 2.
They are almost certainly there because the Government want to
highlight those powers, not because those examples need to be
there to give those powers to ARIA. Our amendment simply adds to
their existing list and has a similar motivation—to emphasise and
highlight the importance of this power.
On the specific issue of predatory overseas acquisition of IP
through foreign takeover of UK businesses where there has been
substantial public investment in R&D—there are many past
examples of this, to the detriment of the UK economy—the Minister
reassured the other place that the National Security and
Investment Act 2021, which fully commenced in January, already
provides a relevant and sufficient framework for the Government
to scrutinise acquisitions on national security grounds. The
Minister also referred to a broader strand of work that is under
way to enhance that statutory framework, including other
unspecified complementary measures designed to help the
Government strengthen our protections. Perhaps the Minister can
expand on that. He made some general references to it, but I am
not clear as to what work is going on. I think the House would
benefit if there was further specification. It may not be
appropriate to do it now, but maybe it could be spelled out more
clearly at some time in the future.
The Minister reassured the House that the Bill already provides
the Secretary of State with a broader power of direction over
ARIA on issues of national security, but the amendment was never
intended to intervene in the Secretary of State’s powers. This is
of limited comfort, as my honourable friend pointed out, national security in the relevant
legislation, the NSI 2021, is narrowly defined, and it does not
include economic security, despite attempts by Labour to expand
the definition in that Act so that it would include this. It
therefore does not address the issue of intellectual property and
its economic value.
The Minister then pointed out that the because of the terms of
Clause 2(6), ARIA must have regard to economic growth or economic
benefit in the UK, and the mechanism for scrutiny by government
and Parliament will be in what the Minister refers to as the
framework document. This is a weapon which the Government deploy
regularly to see off amendments to the Bill. On Report, the
Minister used the potential of the framework agreement, and what
it could include, five times in debates. The problem is that none
of us has seen the outline of the framework document, or even the
Government’s bid for the negotiations of what the framework
document will include. Until we see that, there is no way that
any of us can judge its merit as a mechanism for dealing with the
issues that we have raised.
Perhaps during the negotiations that can at least now commence
after May, when there is a CEO, the Government will undertake to
make regular statements, or at least one statement, to the House
about their negotiating position, so that we get some sense of
whether the many concerns about this Bill that the House has
shared with the Minister can be allayed by the framework
agreement or document. There is now a CEO and these negotiations
can begin.
Finally, in the debate that took place in the other place, at
col. 87, the Minister turned to the question of how ARIA responds
to the UK’s strategic interests in science and technology more
generally, where these may not fall under national security. I
think he played his ace there: drawing attention first to the
integrated review, which he did not expand on, and then to the
role of the new Office for Science and Technology Strategy and
the national science and technology council, and the Government’s
ambition to ensure that there is a serious, strategic machinery
of government showing a commitment to the strategic industrial
advantage of UK science and technology. The Government’s argument
is strong: we should be persuaded that this will deal with these
issues because the Government have a core to their infrastructure
that will drive these ambitions. There is a fundamental
difficulty with this, however: it is impossible to find, in any
government documents, any information about either the Office for
Science and Technology Strategy, or the national science and
technology council, which is a sub-committee of the Cabinet,
other than that they exist and a very broad outline of the first
organisation, which is designed to service the second one. I do
not know how we are supposed to evaluate the strategic machinery
of government, unless we know what they do.
There is something worrying happening to the accountability in
our Government at the moment. There is a proliferation of
sub-committees of the Cabinet. We have gone from having about six
to having 20 in a matter of months. Almost every area of
important public policy now has one or more such sub-committees
to deal with it. The pattern appears to be—it certainly is with
climate change—a strategic sub-committee and an implementation
sub-committee. You can find out nothing about what any of these
committees do.
So that we know what the relationship between Parliament and
these committees now is, I will quote for the benefit of the
House what , the COP president, said to
your Lordships’ Environment and Climate Change Committee in
answer to a very reasonable question, in a questionnaire sent by
the committee, about these two key pieces of machinery for
climate change. The committee asked him:
“Are the two relevant Cabinet Committees”—
that is, the strategy committee and the implementation committee,
which he chairs—
“expected to continue in the long-term, and what plans does the
Government have to increase transparency around their
proceedings?”
The answer to this is in a letter, which is on the committee’s
website. I will read it in short, because in the first part
gave the impression that they
are intended to continue, but he said:
“With respect to Committee frequency and transparency, it is a
long-established precedent that information about the discussions
that have taken place in Cabinet and its Committees, and how
often they have met, is not normally shared publicly”.
So that is it.
If that is to be it for this infrastructure, which sits at the
heart of the development of science and technology and ARIA, we
will not find out anything. I honestly have no way of knowing
whether I should be reassured by what the Minister said in the
other place, if that was his ace card. To paraphrase my
honourable friend in the other place, the Minister has set out that he
shares our concerns, but I am afraid that I cannot really assess
whether he has a plan to address them, because there is a whole
part of what he intends to do that I will never be allowed to
know.
(Con)
My Lords, I very much appreciate what my noble friend on the
Front Bench has said by way of response to the several debates
that we had on the Bill about the centrality of intellectual
property, and its protection and exploitation by ARIA. Often in
your Lordships’ House, we send amendments to the other place, and
occasionally—perhaps often—we find that they are not given the
weight of debate at the other end that we think they deserve. On
this occasion, it did, and I was much reassured by the Science
Minister’s response, and by the appointment of Dr Highnam to the
chief executive post.
I want to raise one question. In the midst of the many reassuring
things that were said, including that the powers exist for ARIA,
or through the NS&I Act, the framework document remains. I
raised one issue on that in an amendment, which was whether under
the framework document ARIA would be able to retain and reinvest
the exploitation of intellectual property arising from its
investments so as to create a growing activity in support of its
mission of disruptive innovation. I hope that will be
incorporated in the framework document. It was not referred to,
so I hope that my noble friend will take note of it and that the
Treasury will allow this to happen.
(Lab)
My Lords, I will not detain the House for long, not least because
many of the points I wanted to make have been ably made by my
noble friend Lord Browne. I welcome much of the Minister’s speech
and the appointment of the chief executive-designate. Considering
his background, I venture to suggest that by the time he leaves
the post he is about to fill, the name of the agency may have
changed from ARIA to DARIA. That would reflect his personal
background and possibly the way in which developments may
move.
I also welcome what was said in another place by the Minister for
Science, who the noble Lord, , referred to. I have a high
regard for the Minister for Science and thought that he addressed
seriously some of the concerns raised in our debates. However, to
echo my noble friend, I point out that the National Security and
Investment Act still provides too narrow a basis for protecting
what really matters about ARIA, which is the intellectual
property that it is going to generate. It is a strange position
to be in, but I think that the definition of national security,
which does not take into account the economic security of this
country and the intellectual property attached to that, would be
a mistake and possibly a loophole. I regret the fact that the
framework document to which the Minister referred has not yet
been seen by anybody, and I hope that in the months and years
ahead we will be able to debate that framework and the new
scientific architecture, which the Minister rightly referred to,
because we are moving into a new era.
It is not often that Governments anywhere launch a new agency
with so little idea about what it will do and how it will do it.
Nevertheless, I wish it well, and I hope that in the months and
years ahead when we come back to discuss ARIA and its development
we will be able to see the progress it has made, which I for one
hope it will.
11.30am
(LD)
My Lords, it came as no surprise that the Government used their
majority to negate the amendment of the noble Lord, Lord Browne.
The noble Lord has, in his tenacious way, set out why he regrets
that, and I agree with him. It is not to be—it will not go to a
vote—but I hope that the ARIA leadership will be more careful
when they write the contracts for the money that they will give
than perhaps the Government seem to be with enshrining this in
law.
I agree with the noble Lord, , that the Science Minister’s
comments were very helpful. They were more than we would usually
get in these games of ping-pong, and that is to his credit.
As the Minister set out, since we sent this Bill to the other
place, the name of the ARIA CEO has been announced. It is nice to
see the Minister looking so pleased about things. He often looks
quite downcast, so it is quite good for him to arrive with
something that he can be pleased about. We wish Dr Highnam all
speed and wish him well in what is a very important task.
Others have suggested that we look forward to the framework
document emerging. In answer to the previous speaker, I do not
think that the Minister has not shared with us something that he
is sitting on; the Minister has not seen the framework agreement
yet either, because it has not been written. However, we look
forward to seeing it as soon as it has.
The Government have also had some important things to say about
their focus for future research funding—I am talking here about
the UKRI numbers. In their levelling-up White Paper, they
announced the intention to increase the percentage of funding
from what is rather dismissively called the golden triangle to
other institutions, often but not exclusively further north. I
should remind your Lordships that I am an alumnus of Imperial
College.
Very briefly, I wanted to relate this to ARIA and, more
importantly, to the commercialisation of innovation. There is a
disparity between universities that are better at commercialising
their innovation and thereby having another income stream, and
those that are less good at that. I hope that ARIA is able to
lead some excellence in that and spread the effective
commercialisation of knowledge and innovation better. That would
contribute to the Government’s levelling-up agenda at the same
time.
I also recently met with the UK Innovation & Science Seed
Fund—known as UKI2S—which, as the Minister will know, acts as a
bridge between public sector research and private capital. I
would be interested to know from the Minister how this
organisation can fit with ARIA and improve our overall
commercialisation. I am sure the Minister will admit that the
UK’s record on commercialisation has been patchy in the past and
could definitely improve. I would suggest that UKI2S is one of
the models that ought to be taken into account. I hope that the
Minister might meet with me and that organisation to discuss this
and how it might play into this space with its track record in
order to deliver on the promise of ARIA. I think we all share the
Government’s desire to—in the Minister’s words—drive the agenda
for strategic, industrial advantage. With that, we hope that in
10 years’ time, ARIA will be seen to have played an important
part in achieving that objective.
of Darlington (Lab)
My Lords, we accept the reason given by the other place for
rejecting Amendment 1, but we continue to disagree on the
substance. I place on record my thanks to the noble Lord, , for his work on
this amendment. His sparkling curiosity and polymath tendencies,
combined with his government experience, make him ideally suited
to this issue. He has been incredibly generous with his time and
knowledge, and I am grateful to him for that.
The noble Lord, Lord Browne, suggested a sensible amendment to
protect benefits arising from the UK’s creativity and ingenuity
in ensuring that the taxpayer—the investor—retains the benefit of
it. The majority of noble Lords agreed with my noble friend when
we tested the will of the House. In the absence of any measures
enabling sufficient scrutiny of ARIA’s activities, we felt we
needed this amendment. We are clear that the benefits of ARIA’s
investments must be felt in the UK. Lords Amendment 1 would have
assisted in this; it would have given 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 have enabled ARIA to require consent during the 10
years following financial or resource support if the business
intended to transfer intellectual property abroad or transfer a
controlling interest to a business not resident in the UK. As my
honourable friend said in the other place, we have to acknowledge that
currently
“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.”—[Official Report, Commons, 31/2/21; col.
89.]
It is welcome that Ministers have said they agree with our
concerns. It is just unfortunate that the Government did not want
to take this opportunity to act on our shared concerns and seemed
to lack the resolve to do anything about it on this occasion.
Finally, I wish the new leadership of ARIA and the agency itself
well. We look forward to the innovations and inventions that it
is able to bring us.
(Con)
I thank the noble Lord, Lord Browne, in particular, and all noble
Lords who participated in this brief debate. I do not think there
is a huge disagreement between us on this. The noble Lord, Lord
Browne, wanted us to be more specific; our point is that ARIA
already has the power and ability to do all the things he
mentioned, but we want it to retain its operational independence
and flexibility.
I will address a number of the points the noble Lord raised. He
will have carefully noted, and from his ministerial experience
will know, that in the National Security and Investment Act we
deliberately did not define what national security is, following
the practice of all previous Governments, to give ourselves the
flexibility to adapt to changing circumstances.
The noble Lord also asked for further details on what the Science
Minister said in the other place. We have published guidance to
the sector on trusted research and supported it in publishing
that guidance. We have broadened the scope of the academic
technology access scheme and defined the rules on export controls
as they apply to research activity. The terms and conditions for
government research grants were also amended last September to
require due diligence and checks for any overseas
collaboration.
As expected, a number of noble Lords raised the framework
document. The noble Lord, , is right: I have not seen a
final version of the framework document precisely because it has
not been finished yet. It will be negotiated between BEIS and
ARIA’s leadership team, including the new chief executive and
chairman when he or she is appointed, for which we are currently
recruiting. I assure the House that as soon as it has been
agreed, we will share it with the House as soon as possible.
My noble friend asked a very good question
about the retention of any possible revenues within ARIA. He will
know from his government experience that the Treasury will wish
to negotiate these matters directly with the agency, so I will
not step on the Chancellor’s toes and get myself into trouble by
overcommitting him on that. I am sure that ARIA and the Treasury
will want to have a full and frank discussion on these
matters.
On the questions from the noble Lord, , I assure him that we expect ARIA
to work with all partners across the research and development
landscape, including on the commercialisation of products. He
asked for a meeting with me. I suggest that I am not the right
person to meet on that issue; it would be more appropriate for
him to meet the Science Minister, who has responsibility for
pursuing this support for the agency, and I will certainly put
that question to him.
The ARIA team has met UKRI and its sponsors. We are learning
lessons from this and other mindsets and models for how ARIA can
ensure the successful translation and commercialisation of its
technologies. I hope that that provides the appropriate
assurances for the noble Lord, .
I think I have dealt with all the questions that were asked. With
that, I beg to move.
Motion A agreed.
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