1: After Clause 1, insert the following new Clause—
“ARIA’s purpose
ARIA’s purpose is to fund projects with high transformational potential in pursuit of a sustainable and resilient society, planet and economy.”Member’s explanatory statement
The purpose of this amendment is to provide a broad sustainability purpose for ARIA which will ensure that it funds projects which align with core strategic challenges such as decarbonisation and which are sustainable.
My Lords, I shall also speak to Amendment 26 in my name. I thank the noble Lords, Lord Fox and Lord Browne, for their support for these amendments. I declare my interest as a director of Peers for the Planet and as an engineer and project director for Atkins.
There was much discussion at Second Reading of DARPA, the agency that has inspired ARIA. DARPA succeeded in changing the world because it took enormous gambles, failing often but with a few projects that succeeded, more than justifying the payouts and creating trillions of dollars in value. This freedom to take risks and to fail is its most important characteristic. That is exemplified by the second project that DARPA funded, Project Orion: a proposal for a manned spacecraft propelled by nuclear explosions. The head of DARPA at the time astutely stated that one of the main challenges was doing that in such a way that the occupants were not killed. While that particular high-risk project did not succeed, for obvious reasons, many others did: the internet, stealth technology and Moderna’s Covid-19 vaccine, to name but a few.
ARIA certainly takes that lesson from DARPA to heart, as described in the Bill: getting bureaucracy out of the way and giving a high-calibre team based on programme managers the freedom to deliver high-risk, high-reward research. But there is another vital lesson to take from DARPA which I referred to on Second Reading: a clear purpose for the organisation. Everything that DARPA does is defined by its aim of ensuring the technological supremacy of the United States armed forces. In 1958, the USA fortuitously hit upon a combination of factors for a research organisation—a clear purpose, freedom to fail, programme-manager-led—that literally changed the world. The US has taken this purpose-oriented approach in all its DARPA derivatives since, including ARPA-E and HSARPA.
To have the longevity and political staying power that DARPA has demonstrated, ARIA needs to have a purpose, and that purpose needs to be closely coupled to the strategic goals of the nation. Foremost among those strategic goals are the UK’s net-zero and environmental goals. Giving ARIA a broad sustainable purpose will allow a flexible approach to research, while at the same time being aligned with the innovation strategy that highlights the need to direct innovation towards
My Lords, I am very pleased to follow the noble Lord, Lord Ravensdale. Two of the amendments in this first group are in my name, Amendments 25 and 27, and I want to speak to Amendment 27 first. It is grouped with Amendment 1 because we start by debating, quite properly, the purposes of ARIA as an agency. What is it here to achieve?
As the noble Lord, Lord Ravensdale, said, we are not seeking to replicate DARPA but to learn from it. DARPA said that its sense of mission was part of the reason for its success. However, that mission in this context was originally
“to prevent and create technological surprise”.
That is an interesting concept—to prevent technological surprise happening to the American Government and, at the same time, to create technological surprise on its own part. One might say that you could substitute “create technological advantage” in the latter case. Interestingly, in more recent years, when DARPA staff were asked what they regarded as their mission, they said it was to be part of “shaping the future”. Indeed, I think that is where our starting point should be. We want ARIA as an agency to be part of shaping the future.
My problem with Amendment 1—actually, I do not have a problem with Amendment 1, because you could stretch the language of sustainability anywhere; that is its advantage but also its problem. I am not sure I understand what the board of ARIA, or its leading members, would interpret as being outside the scope of the sustainability criterion. Does it actually help them? I am not sure that it does. If anything, they might feel that it constrains them towards certain missions. The DARPA example we ought to learn from is that, in practice, it set out to define for itself a range of missions within the organisation.
I note that sitting next to the noble Lord, Lord Ravensdale, is the noble Lord, Lord Broers. I take from his Second Reading speech the thought that the programme managers are at the heart of this system, and the programme managers are chosen in relation to the programmes that DARPA is pursuing. I suspect the same will have to be true for ARIA—that it has to decide, “What are our programmes?” The programmes, in my view, might be mission-led—for example, related to adaptation to climate change—but at the same time they might be technology-led. For example, they might be to pursue AI and the data economy or to look at cell or gene therapy. There is a range of those possibilities. We need to give ARIA, as an organisation, the flexibility to decide the missions that it thinks fulfils its purposes. The missions will develop over time, but the legislation cannot change repeatedly over time, so the legislation should be sufficient to enable ARIA to select the missions it wants for the future.
4:30 pm
Turning to the question of benefits, where the realisation of benefits is uncertain but is expected to be significant and “significantly to exceed costs”—although that may not be necessary—ARIA must accept, under Amendment 27,
“that the projects it supports may entail a high risk of failure.”
It is a very simple proposition whose language is plainer than the original drafting. ARIA must look for significant benefits, transformational effects and understand the potential for technological advance through the exploitation of research, but accept that where significant benefits can be achieved, there may be a high risk of failure.
This drafting is longer, but by being so it is also a bit more sequential regarding the way in which ARIA would be asked to do its job. However, it is not trying to tell ARIA which technologies to use, which missions to undertake and what precisely it should set out to do. If we want to do that, we have a shedload of it in UK Research and Innovation. There are institutes with specific objectives and challenge funds with specific objectives. There is the Industrial Strategy Challenge Fund, and “challenges” for the ageing society, clean growth, AI and the data economy. There are many ways in which we can set out using our research and innovation resources to try to deliver specific objectives. In my view, ARIA is not about that; it is about trying to achieve transformational effects by thinking outside that framework. I do not want us, through this Bill, to put into legislation a framework that inhibits ARIA’s ability to think laterally, horizontally, outside the box: to think about technology in ways that are different from the rest of the UK Research and Innovation landscape.
Finally, Amendment 25 is a probing amendment for precisely that purpose: what is the point of ARIA if it duplicates what UK Research and Innovation is doing? We should therefore make it clear to ARIA that it should at any given time take into account the strategy of UKRI. If it does not, the risk of duplication is high. ARIA, by its nature, should be seeking to do something which UKRI is not.
I hope that my noble friend the Minister will see some merit in both these amendments, even if we might disagree at this stage about the drafting.
My Lords, I rise to support Amendment 1 and the amendments in this group that are about giving a purpose to ARIA associated with climate change and the environment. I declare my interests as a non-executive director of Frontier IP and the chair of BGF’s Clean Growth Advisory Board.
As the noble Lord, Lord Lansley, has indicated, ARIA’s success or failure will depend, crucially, on recruiting outstanding programme managers. These people will need to be interpreters and matchmakers well networked in industry and academia, with an excellent understanding of science and technology, strong lateral thinking skills—many of the things the noble Lord has already mentioned. They will also need to be tough risk-takers, but not gamblers. They will be hard to find, yet finding the right people is going to be critical to this success. Finding them will be the first constraint. Inevitably, they will have specific areas of expertise.
With a limited initial budget, focusing ARIA, at least initially, on the critical challenge of climate change and the environment will be a great way both to help address our greatest challenge and to support the UK economy. But it will also provide a valuable focus for the recruitment of these key individuals—the people who initially occupy these absolutely fundamental posts.
I would like briefly to intervene on this important group of amendments and should declare an interest as a member of the board of UKRI, which is very relevant to the issues we are currently considering. I am not acting as a spokesman on behalf of UKRI, but drawing on the experience that we have had there.
I welcome any attempt to bring greater diversity and innovation to our funding landscape. We do not want a monolith; we want lots of different ways of getting funding and lots of different requirements. Anything that adds to the diversity of the funding landscape I welcome as a good thing. However, I have two or three questions on which I hope that the Minister will be able to give some assurance.
First, the task of ARIA is often described as high-risk, high-reward research. In a way, Clause 3, to which my noble friend Lord Lansley, has referred, is an attempt at setting out in legal prose “high risk, high return”. It is great that ARIA will have that as its objective, but my one concern when I hear this language is the implication that all other public funding for R&D could not be high risk and high return and that it is in some sort of boring bureaucratic pot where everything is safety first and low return. I would be grateful for the Minister’s assurance that it is also perfectly possible for the agencies of UKRI and indeed other sources of public funding for R&D also to engage in high-risk, high-return research. It would place too much weight on ARIA’s shoulders and eliminate diversity if we said that it is the only agency that can act in that way. Having that authoritative assurance from the Government would be of great value in ensuring that our whole research ecosystem carries on performing in an innovative way.
Secondly, I want to reflect on the lessons that can be learned from the Industrial Strategy Challenge Fund, to which my noble friend has also referred, and seek another assurance from the Minister. When Theresa May’s Government put substantial funding—over £2 billion—into the Industrial Strategy Challenge Fund, Innovate UK, the main agency for delivering that programme, travelled to America to look at what ARPA did. It said, “These programme directors at ARPA are fantastic—we should have the ARPA model of programme directors in order to deliver the Government’s Industrial Strategy Challenge Fund”.
My Lords, I apologise for not taking part at Second Reading; I was at the COP 26 climate talks, which are of obvious relevance to this group in particular.
I begin by reflecting on the model for ARIA—DARPA, which was of course military. We have talked a lot about risk-taking, which is usually interpreted as the risk of failure to achieve your objectives. When we think about the origins of this—the child very often showing some characteristics of its parent—we can also think about the risks attached to achieving your outcomes but causing unintended effects. With DARPA, there was Agent Orange in the Vietnam War and the drone warfare of the Gulf War, and it is now working on killer drones and robot warriors.
Looking at the model of DARPA, researcher Annie Jacobsen, author of The Pentagon’s Brain: An Uncensored History of DARPA, talked about how it very much became embedded in what has been described, including by US Presidents, as the military-industrial complex. Giving a mission is very important, in order to avoid institutional capture. That is one of the reasons why I speak in favour of Amendments 1, 21 and 26. We have not yet had the chance to hear from the noble Baroness, Lady Chapman, but I think her Amendment 21 is in a sense similar to Amendments 1 and 26, except that it provides a more regular review mechanism.
If we think about what ARIA is for and look at some of the proposals put forward, we see that the CBI described it as
“an international lynchpin for business investment”
that is to “ultimately deliver new products”. McKernan said that it was
“a public sector, new technology seed fund”
whereas, by contrast, the Russell Group described it as
20 of 209 shown
“our top priority societal missions … like the climate and biodiversity crises”.
It will also ensure that projects and proposals that would be contrary to those strategic goals do not progress.
Attempting to reverse engineer DARPA is not a guaranteed route to success, but we need to take the benefit of real-world experience in learning the lessons of why DARPA succeeded and giving ARIA the best chance of success, which is what we all want.
We know how vital R&D is to achieving our net-zero and environmental targets. For example, the International Energy Agency has stated that almost half the emissions reductions required by 2050 are expected to rely on technologies that have not yet reached the market. In this area, what must be done—the key enabler to make net zero politically possible across the world—is to create green energy at a price point that is cheaper than fossil fuels. So, we need nothing less than revolution in net zero and environmental R&D to make our goals possible.
That brings me to the specifics of my Amendments 1 and 26. Amendment 1 is very simple. It states:
“ARIA’s purpose is to fund projects with high transformational potential in pursuit of a sustainable and resilient society, planet and economy.”
This amendment would give ARIA a broad sustainability purpose in line with the points I have made, and in that sense, I believe, would fulfil the need to orient ARIA towards alignment with the most important strategic goal of the nation, and indeed the world.
In crafting the amendment, I have listened carefully to feedback from the Minister during the progress of the Bill in the other place, in that the Government do not wish to unduly constrain ARIA. That is why the amendment is written around a broad sustainability purpose, not a specific net-zero objective or mission. My amendment is not about saying that other streams of research not specifically related to net zero or the environment cannot progress; just that any such streams must not be contrary to, and preferably support, the core strategic challenges. Having a broad purpose and key priorities in setting the direction of the organisation is what the amendment seeks to achieve, while still retaining the flexibility the Government want for ARIA.
My Amendment 26 would ensure that consideration for our climate and environmental goals is embedded within ARIA’s functions. It is modelled on similar government provisions in other legislation, including most recently in the Skills and Post-16 Education Bill. As noble Lords will be aware, the Committee on Climate Change, given the advice that there is a need for a coherent approach to achieving net zero, has made it a priority recommendation for 2021 to ensure that all government policy decisions are compatible with the Government’s climate commitments.
In this sense, the amendment would align this Bill with other amendments the Government have put forward across a range of recent legislation, such as the skills Bill, the Financial Services Act and the Pension Schemes Act. To meet our goals, we need carefully to consider the systems aspects of net zero and ensure that consideration of these goals is embedded into all government policy and legislation where it is practical to do so.
Given how critical R&D is to achieving our goals, I hope the Government will agree that such considerations really need to be present in this Bill in order to align it with their broader strategy. It is not about stopping projects that are not directly related net zero; rather, it is about ensuring that the impacts in the context of compatibility with our climate commitments have been properly considered and factored into decision-making. It is a question of consistency with other legislation.
In summary, consideration of sustainability goals and functions in the Bill has wide support across the academic community, including from Professor Richard Jones, the science policy expert who has been involved in much of the thinking around the formation of ARIA. The amendment provides an excellent opportunity for the Government to maximise the benefit from the £800 million of funding, to demonstrate to international partners at this critical point post COP a new model for climate and net-zero aligned R&D, and to develop the new technologies that we will need to help the UK and the rest of the world achieve our targets. Finally, it would ensure longevity and long-term political support for the organisation, irrespective of the Government of the day, something the whole of Parliament can get behind. I beg to move.
My Amendment 27 is in this group. A report of July 2016 produced for DARPA about innovation in DARPA isolated four “sources of success”, as it put it, the first of which was the “limited tenure” of the leading executive members
“and the urgency it promotes”—
nobody was appointed for a period exceeding five years. The second was a “sense of mission”, which I was just talking about. The third was “Trust and autonomy”—both giving DARPA autonomy but also within the organisation trusting and giving autonomy to the programme managers in particular. The fourth was:
“Risk-taking and tolerance of failure”,
which of course we are setting out to incorporate into this legislation for ARIA. I add that DARPA interpreted this as meaning “Move fast and take risks”—do not spend a great deal of time trying to assess all the risks, because you could lose the opportunities in the process.
Amendment 27 seeks to replace the language of Clause 3, not because I have any objection to the purposes set out in Clause 3; my objection is to the drafting. It says:
“ARIA may give particular weight”—
I am afraid I do not understand what is meant by “particular weight” or how people who read it subsequently will know what that means in this context—
“to the potential for significant benefits”.
We are all agreed about “significant benefits” and we know what they are because they are in Clause 2(6) above. It then refers to
“research … that carries a high risk of failure.”
It is awfully close to being a piece of legislation that says that ARIA should look for projects that are quite likely to fail because those are likely to give the most significant benefits.
This is not the approach that legislation should take. Legislation should be more deliberate. I thought: what are Ministers actually looking to do in this clause? I agree with the noble Lord, Lord Ravensdale, in his Amendment 1. Ministers—and we—are looking for ARIA to seek to have transformational effects. I think we are agreed about that. That is why Amendment 27 refers to “transformational effects”. I have also included a reference to the possibility of technological advance through
“the development and exploitation of … research”.
I do not think that is mentioned elsewhere but I think it is helpful because, actually, many of the advances that have occurred, including in DARPA’s programmes, were not themselves the object of the mission but were the result of the process of discovery and curiosity and the exploitation of research.
I can remember the debate that took place. The Treasury said “Hang on, how much are these programme directors going to be paid? They can’t possibly be paid more than is set by our pay rules”—the pay limit was, I think, £100,000. The Treasury then also said, “We need a committee to scrutinise that the money is being well spent and, to ensure it is making progress, a monthly report would be about right”. Then BEIS, which I do not think completely trusted the Treasury and saw this as a BEIS operation, said, “BEIS also needs to have a committee that meets to scrutinise the success of this programme director; we have slightly different criteria from the Treasury, so our committee should meet once a month”. It averaged out—at the start; it may have got better—that every fortnight there was some supervisory committee or other checking that this programme director was delivering the objectives.
That is the slow, painful process of bureaucratic accretion. It is marvellous that ARIA is, we are assured, going to be free of all that. It would be quite good, however, if other parts of research funding could also be free of those constraints. Indeed, the Government have several reviews on at the moment that are relevant to this, including the Tickell review of bureaucracy and a new grant review of UKRI.
I also hope that the Minister can assure us that, wherever possible, especially if these proposals emerge from two reviews set up by the Government, freedoms being extended to ARIA will also be enjoyed by agencies working under UKRI or other departmental bodies. The problem of bureaucracy must be solved across the whole swathe of R&D funding, not just by creating one institution outside the constraints that everyone else has to work under. I would like an assurance that lessons are being learned, both for the functioning of ARIA and from these two reviews now under way.
Thirdly and finally, we can already sense—not least from the opening presentation from the noble Lord, Lord Ravensdale, on the purpose of ARIA—a fascinating debate about missions versus technologies. I have frequently had that debate with my friend Professor Mariana Mazzucato, who has brought the language of missions into public policy, which is excellent. However, I always say to her that the Kennedy moonshot did not arise because a bunch of PPE-ists—speaking as one myself—sat around saying, “Wouldn’t it be wonderful if we sent someone to the moon? That would really get the media’s attention; let’s do that, Mr President”, but because of prior investment in general-purpose technologies, including rockets. It was a deep understanding of what the technologies might be capable of that led to the formulation of the mission.
One can resolve this by wordplay, by making “backing technologies” one of the missions, but the point made earlier about preventing and creating technological surprise tells us that, really, DARPA was always envisaged as driving American leadership in technology. We have the opportunity to choose missions only because of prior investment in underlying science and technology, which turns those missions from empty fantasies into deliverable objectives.
I very much hope we will have an assurance from the Minister during the course of our scrutiny today that ARIA will strike a happy balance. It should be able to fund general-purpose technologies without knowing exactly how they will prove useful, while suspecting that something of that power and significance will have use. It may also wish to fund specific missions or challenges, but it would be a strategic mistake to put all its eggs in one basket. It is the interaction of technological investment capabilities with missions and challenges that really drives innovation. I very much hope that ARIA will pursue both approaches.
“multidisciplinary research teams with the capacity to take a holistic approach”.
That brings us to the debate that the noble Lord, Lord Willetts, was just addressing, which was also raised by the noble Lord, Lord Lansley—and why I would express opposition to his Amendment 25. There is a danger in focusing on technology rather than on mission. We want to focus on mission and on the problems that we need to solve—and Amendment 1 very much focuses on the great problem that we need to solve. Discussion thus far has focused very much on the climate emergency, but it also talks about a “sustainable … society”.