My Lords, to say it is a privilege and an honour to open a debate of this kind is an understatement. I have been in the House for just three years, and this is the first time that we have had a general debate about the contribution of science and technology—including engineering, research and innovation—to the UK economy. I welcome everyone in the Chamber today. A very impressive range of expertise shines through the speakers’ list, which includes my noble friend the Minister, for whom this is his first debate as Minister. In fact, we will hear from several other distinguished former Ministers of Science, whose experience in some cases stretches back over 30 years.
I am sure that there will be a bipartisan spirit this afternoon, but I begin by paying tribute to the noble Lord, Lord Waldegrave of North Hill, whose 1993 White Paper, Realising Our Potential, was the first time that science policy emerged in the modern era, having been ignored by Governments for far too long. The title of that White Paper remains very relevant today.
I welcome the range of attendance in this debate, and I am sorry that noble Lords have only four minutes to speak. I will highlight the maiden speaker. I made my own maiden speech three years ago this month, and I know just how the noble Baroness, Lady Freeman of Steventon, feels right now. I thank her for choosing today in which to make her own maiden speech, to which we all look forward.
When we begin our speeches, we often make reference to our register of interests, and I am proud to be president of the Parliamentary and Scientific Committee, which is Parliament’s oldest all-party parliamentary group by a long way—85 years this year. That is not in any way a financial interest. I am very pleased that our former chair, Stephen Metcalfe, is with us in the Public Gallery watching the debate. In his own parliamentary career, he also chaired the Science, Innovation and Technology Committee in another place. Now that the Parliamentary and Scientific Committee has been reformed for the new Parliament, I very much hope that Members from all sides of the House will take advantage of the activity we undertake. For example, noble Lords should come to the STEM for BRITAIN event held in March and see the astonishing work of our early-career researchers who represent the future. If they cannot come, they can read about it in Science in Parliament, which is available in the post room and in their pigeonholes.
One of the great benefits of initiating the debate is that it has triggered a wealth of informed briefing from a wide range of scientific societies. Sadly, I cannot possibly make use of most of it in the time available, but it is important that Parliament understands what a formidable array of expertise exists in the country. My profound thanks go to the Royal Society of Biology, the Institute of Physics, the Royal Society of Chemistry, the Physiological Society, the Geological Society, Cancer Research UK, the Institute of Cancer Research, the University of Leeds, the Russell group of universities, the Microbiology Society, the Royal College of Pathologists, the Campaign for Science and Engineering, the Society for Experimental Biology, the Royal Astronomical Society, the Society of Chemical Industry and the Royal Society—not to mention, of course, POST and our own House of Lords Library. With the leave of the House, I intend to place a copy of all the briefings that I have received in the Library, so that it can be of use to Members.
My Lords, I thank the noble Viscount, Lord Stansgate, for securing this important debate. We on this side feel fortunate to have the Minister in his new role. His previous role in this area is very relevant and we welcome him to his first debate. We are delighted to have someone with such knowledge in his position.
I hope to conduct my speech in the constructive manner proposed by the noble Viscount. We all know and recognise the incredible impact that science and technology has in this country. The 4% that it is estimated to add to the economy is a massive boost. We can all point to massive scientific successes. One of the biggest illustrations of this is that, of the 10 Formula 1 teams, six are based in the UK. You cannot get more cutting-edge science and technology than Formula 1. We have those that noble Lords will know—great British names such as McLaren, Williams and Aston Martin—but also other well-known brands such as Mercedes, Renault and Red Bull. Yes, those foreign brands’ Formula 1 teams are located in the UK because they know that we are the best and most cutting-edge.
I will take the limited time available to talk about the area I know best from my former health role: life sciences. We have some fantastic examples in this field too. Google’s AlphaFold project will see many breakthroughs. The Government’s involvement in Covid and the Minister’s involvement in the Moderna deal that followed are a good example of putting long-term relationships in place.
But what I have seen all too often at first hand is what I call the UK disease: we are very good at innovation but pretty poor at the rollout. I saw this particularly in medtech. The joke I always heard is that the NHS has more pilots than British Airways. Those pilots were good in their innovation but so often fell down when it came to rolling out across the network. We would often see them lost to the US, which would come in with the funding and the rollout programme, and we would see a brain drain of our expertise.
My Lords, I too thank the noble Viscount, Lord Stansgate, for securing this debate and for opening it so comprehensively. I declare my higher education interests. The Minister has rightly been welcomed to his position, and he has a major strategic task. He will need to reach right across government if science and technology are indeed to be at the heart of the Government’s industrial strategy and plan for growth.
I was a Minister in the coalition Government, latterly in DfID. Vince Cable as Business Minister developed an industrial strategy, ably supported by David Willetts—now the noble Lord, Lord Willetts—and others, analysing the UK’s strengths and weaknesses. They established catapults in promising areas and committed funds, for example, to the globally significant Francis Crick Institute, despite the post-2008 financial constraints. Universities were supported. We brought the aid budget up to 0.7% of GNI, with a proportion for research relevant to developing countries.
Chris Whitty, then DfID’s chief scientific officer, took me to Oxford and Cambridge to hear about ODA-supported research. In Cambridge, I learned about work in Vietnam that sought to improve the productivity of small-scale pig farmers and at the same time to reduce the co-living of humans and animals, risky markets and the use of bat droppings for fertiliser. Pandemics that cross species were already worrying scientists, post the SARS and MERS outbreaks, anticipating “disease X”, which was to hit us a few years later with massive effects on our society and economy.
In Oxford, I visited the Jenner Institute and learned about its vaccine work, so relevant then to the west African Ebola outbreak. Sarah Gilbert and Catherine Green, in their superbly readable book Vaxxers, noted the contribution that ODA money made to their work which was the groundwork for their Covid vaccine. Then what happened? Aid was cut, DfID was in effect abolished with no consultation, Boris Johnson spoke of cashpoints in the sky. Was that joined-up government? I think not. That was compounded by the huge damage done to our scientific and university sectors by Brexit, the failure to remain in the Horizon scheme and the barriers to continental students and researchers coming to the UK, barriers which persist.
I congratulate the noble Viscount, Lord Stansgate, on drawing attention to this important issue. I declare an interest as CEO and founder of a small biotech company, Neuro-Bio Ltd, pioneering a novel approach to Alzheimer’s disease and spun out originally from Oxford University.
In the light of my experience over the past 10 years, I would like to focus on opportunities for the UK economy to benefit from its science and technology even more than is currently the case. For example, dementia is costing the UK £42 billion this year, rising to £90 billion in 2040, so the value of developing an effective therapeutic intervention would be enormous, and not only for the huge saving. Such a treatment developed in this country would provide an incalculable boost to our national pharma industry.
But there are unnecessary headwinds. SMEs are now losing out by some 50% compared to 2023 for R&D tax credits. If we factor in the significant amount of time required, new administrative rules and the risk of HMRC inquiry, smaller companies may abandon making a claim altogether. The recent changes, including those in subcontracting rules, may provide a negligible uplift in the tax revenue but come at a great cost.
R&D tax credits should be a UK co-investment, hand in hand with the company, into innovation happening on its shores, creating jobs and value immediately, followed by an incredible dividend when resulting in a globally competitive technology. These credits should be restored to at least previous levels. Big multinationals might then expand their footprints in the UK, rather than divesting as they do now.
Today, UK public investment in R&D of 0.44% GDP needs to be 50% higher just to reach the average OECD spend, let alone to be ahead of the competition. It could be argued that, pound for pound, we already outcompete most other countries, but the UK is heavily underinvesting in itself, banking on the high innovation input of our academia and industry—after all, it is an easy short-term win on the budget line.
My Lords, I thank the noble Viscount, Lord Stansgate, for bringing this important and timely debate. I look forward to the maiden speech of the noble Baroness, Lady Freeman, and welcome her to your Lordships’ House.
I want to focus my remarks on the north-east region’s rapidly growing science and tech sector as a huge asset to the UK economy, attracting skills and investment from across the world. At the heart of the sector in this region are its five distinguished universities: Durham, Newcastle, Northumbria, Sunderland and Teesside. This month they announced their new partnership, known as Universities for North East England, that will strengthen their collaboration, making a greater contribution to everyone who lives, works, and studies in the north-east and driving regional economic growth.
In his opening remarks, the noble Viscount alluded to the urgent need for cross-departmental work in government, as did the noble Lady, Baroness Northover, in her excellent speech. I think this point demonstrates that. Access to skilled workers is a vital component of a flourishing science and technology sector. With 67,000 people studying STEM subjects across these universities, the region has the highest proportion of STEM students in the country, resulting in a plethora of highly skilled and employable graduates. There is a clear partnership between the universities and businesses within the region, demonstrated by the increasing number of spinouts from universities. In 2023, spinouts from Newcastle University alone raised £40 million in investment.
One development that is demonstrating innovation in the region is the Newcastle Helix—a 24-acre site in the city centre bringing together industry leaders, businesses and top researchers in an internationally renowned innovation cluster. What makes this development stand out is not only its world-leading research but its integrated approach of growing fiscally while strengthening communities. The Helix is committed to creating growth for businesses and investors, but also to driving positive change through its purpose to help families in communities and cities around the world to live healthier, longer, smarter and easier lives.
My Lords, I thank my noble friend Lord Stansgate for introducing this debate. He is a whirlwind of knowledge and energy, as anyone who has attended one of his STEM events in Portcullis House will know.
I was a member, and subsequently chair, of two of our former EU sub-committees, on internal markets and services. Among other activities, we visited universities and catapults, and invited representatives of the UK’s space industry, just referred to by the right reverend Prelate, to give evidence to our committee. I notice that another member of that committee, the noble Lord, Lord Rees of Ludlow, is in his place, and I look forward to hearing what he has to say. Some of the issues raised will not surprise anyone here: skills gaps, the importance of attracting and retaining talent, international interdependency, the mobility of skilled labour and the need for long-term strategy. Incidentally, talking about catapults, the House of Commons Science and Technology Committee reported that SMEs that had worked with catapults grew 50% faster than those that had not, with an average of five times return on investment.
As a former university administrator of over 30 years, it pains me to see the dire straits to which our universities have been reduced. Their significance for research and development should not be understated. As the daughter of an aero-engineer who worked for Armstrong Siddeley, which became Bristol Siddeley and then Rolls-Royce, it was the space industry which captured my imagination —perhaps it was also listening to “Journey into Space” on the radio. In pride of place on my bookshelves, which I inherited from my father, are the complete works of HG Wells—but it is not just a romantic interest.
The Minister has already answered questions this week about medical research, defence research and the importance of curiosity-based research. These are all vital, but I want to draw his attention to the importance of the UK space industry, which employs 50,000 people. According to the World Economic Forum, the global space economy will be worth $1.8 trillion by 2035, up from $630 billion in 2023—almost twice the rate of global GDP growth. It will connect people and goods and play an increasingly crucial role in mitigating world challenges, ranging from disaster warning and climate monitoring to improved humanitarian responses. This will involve agriculture, construction, insurance and climate change mitigation.
My Lords, I too am grateful to the noble Viscount, Lord Stansgate, for introducing this important debate. Science and technology could not be more vital to the economy than at the present time. As an engineer, both in practice and at Cambridge University, I welcome the Government’s very recent Green Paper. Invest 2035: The UK’s Modern Industrial Strategy identifies eight key growth-driving sectors. Three of these are advanced manufacturing, clean energy and digital technologies. Engineering is at the heart of all three, driving innovation and economic growth. It also plays a key role in many aspects of other sectors, such as defence and the life sciences. Engineering is integral to achieving outcomes from science and technology. The resulting new products, services and enterprises generate jobs, boost the economy and benefit society.
Demands on engineers are greater than ever, with the world facing challenges and opportunities that depend on substantial engineering input. Chief among these are the climate emergency and the rapid progress in artificial intelligence and related digital technologies. At the heart of the Government’s agenda is making the UK a clean energy superpower, with zero-carbon electricity by 2030. This involves major investments in wind and solar power, carbon capture and storage, hydrogen and long-term energy storage. Nuclear power will also be essential, and small modular reactors—mentioned by the noble Viscount, Lord Stansgate—have considerable promise. To be successful, all these technologies will require increasing numbers of engineers and technicians.
However, the UK faces an acute engineering skills gap. The Royal Academy of Engineering’s National Engineering Policy Centre has laid out how to bridge this gap—by reversing the shortage of STEM teachers, increasing apprenticeships and promoting engineering as an attractive career choice in the application of science. We should take a leaf out of Germany’s book: 20% of its 25 year-olds have a higher technical qualification; in the UK, the present figure is only 4%. Further education colleges and their role in science and technology have been neglected for too long, so I welcome yesterday’s Budget announcement to increase the funding of further education by £300 million. The plans to reform the apprenticeship levy are also welcome. In addition to supporting our world-class universities, an enhanced future for apprentices, including degree apprenticeships, will be especially important if this country is truly to become a technological superpower.
My Lords, it is a great pleasure to follow one of our great civil engineers and to precede one of our distinguished science communicators, who I am sure will add greatly to the debates of this House. This is not just because he was nice about me, but surely—I address this to the Front Bench opposite—some way must be found, however we are selected for this House, for the noble Viscount, Lord Stansgate, to continue to give us his wisdom, because we need it.
Disraeli warned us against falling into anecdotage, but I will tell one story from my own time. When I left my role as Chief Secretary to the Treasury, I left a note for my successor, the much-lamented Alistair Darling, who was a great public servant and a very good Chief Secretary and Chancellor. The practice of leaving a note ended later, because somebody tried to make political capital out of it, which was silly. My note said that he had to support two things in particular that did not have votes in them: the intelligence services and science. You need them and you never know when you are going to need them—but, my goodness, when you have not got them, you know it.
It is a wonderful thing that cross-party support for science over recent years has developed as a result of some outstanding Ministers; I think of Lord Sainsbury of Turville and my noble friend Lord Willetts. The infrastructure of support in this Parliament and across the country for our scientific effort is a vital part of our science effort.
I congratulate the Minister on a very good first settlement in the Budget. Some of it is for one year, but that is better than it not being for one year. I congratulate him on getting the Horizon subscription properly funded, which is absolutely vital. But—and there is always a but—there is more for him to do, and we are lucky to have him. I genuinely think that he will be another of these Science Ministers who will be remembered.
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Today is an excellent time to have this debate because of yesterday’s Budget, which referred to our
“extraordinary strengths in science and innovation”.
It also follows the investment summit earlier this month. Both events stressed the Government’s aim to create the long-term stability that is needed to use science and technology to grow the economy. This is a Government who are openly committed to growth and the core message from today’s debate will undoubtedly be to emphasise just how much science and technology contribute to the UK economy. Science is a long-term enabler of opportunity. Scientific advances underpin all areas across our economy and are essential to the Government’s five missions.
I forget who coined the phrase “punching above our weight” to describe the UK’s record in science. The basic statistics are well known. For example, we have about 1% of the world’s population and yet produce 16% of the most highly rated scientific papers. Our scientific research is truly excellent. The Government spend over £20 billion a year on R&D. Oxford Economics has estimated that, in 2023, the life sciences sector alone contributed over £13 billion. DSIT estimated in 2022 that the value of the digital sector, which includes everything from information technology to digital content and media, was over £158 million. In March last year, DSIT also estimated that the value of the UK’s AI sector was already £3.7 billion and growing. In February, the Energy and Climate Intelligence Unit reported that the gross value added of the UK’s net-zero sector, which includes renewables, carbon capture manufacturing et cetera, was already £74 billion.
Also, there is no shortage of science sectors emphasising their own contribution. I will give a few examples. The Royal Astronomical Society says that the growing space sector is worth £19 billion a year. The Institute of Physics points out that the photonics industry, which is the technology of light, had an output of £15 billion in 2023, employing almost 80,000 people—as many as the automotive and aerospace industries combined. The Rolls-Royce small modular reactor programme is forecast to create 40,000 jobs and could generate an enormous export market of up to £250 billion by 2050. Meanwhile, the Royal Society of Chemistry points out that the chemical sciences sector generated £3.2 billion for the Exchequer. The Institute of Cancer Research says that its research has saved the NHS £68 million per year by updating clinical radiotherapy practice for cancer patients. Meanwhile, Cancer Research UK says that every £1 invested in cancer research in 2021 generated £2.80 of economic benefit, to the tune of nearly £1 billion.
In this Parliament and its successor, the life sciences sector holds enormous potential to drive economic growth and productivity, delivering goods, services, treatments, medicines and vaccines that are critical to the nation’s health and our resilience against—I hope not—any future pandemic. Overall, it is estimated that every £1 of public investment in R&D unlocks between £2 and £4 of private R&D investment in the longer term. I am pleased that the DSIT budget will increase from £12.5 billion for 2024-25 to £13.9 billion in 2025-26, which is real-terms increase of 8.5%.
So we have a lot going for us. We have world-class universities, not to mention places such as the Crick Institute, the Wellcome Foundation, the Catapult Network and so on. We have world-renowned public sector research establishments such as the National Physical Laboratory. I well remember a story told by a former Minister of Technology, to whom you might say I have a hereditary connection. He went to visit the NPL. When he was shown around, the director proudly said, “Here we can measure down to the smallest unit of measurement ever known, the POBA”. The Minister, being inquiring, asked, “What is a POBA?” He said, “Oh, Minister, it means point one of bugger all”. I hope that, when my noble friend the Minister next visits the NPL he will discover that it is still using the same unit of measurement today.
A word about the institutional landscape: the Government have been bequeathed a scientific landscape and institutional structure that can be made to work. Building on the science and technology framework published last year, the Government have just published an important industrial strategy Green Paper. This is central to the growth mission and its success will depend, crucially, on the application of science and technology. The Green Paper has identified eight sectors that drive growth: advanced manufacturing, clean energy, defence, creative industries, digital technologies, financial services, life sciences, and professional and business services.
We have UKRI. We have had the Nurse review. We have our world-class universities, a plan for a national data library and Project Gigabit. We also have ARIA, about which I hope we will hear more. We need to take advantage of the UK’s unique strengths to enable world-leading companies to grow and seize opportunities to lead in new and emerging industries. As yesterday’s Budget said,
“we are not doing enough to capitalise on these strengths”.
We must fund successful scale-up companies and not leave other countries to exploit our science to make millions for themselves.
I think our current structure will help. We now have a proper department in DSIT, with a Secretary of State at the Cabinet table for the first time in 30 years and distinguished Ministers in both Houses. We have a Cabinet committee chaired by the Prime Minister. Its job is to
“consider matters related to science and technology, to drive the United Kingdom’s economic growth and national security”.
Those are pretty much the same terms of reference as for this debate. We have a Chief Scientific Adviser and a network of advisers embedded in all departments, and we have a Science Innovation Network, which is embedded in all our embassies.
With a renewed commitment to an industrial strategy, we need to take advantage of the UK’s unique strengths to enable world-leading industries to grow and seize opportunities. If we match our undoubted research expertise with an industrial strategy that plays to our strengths, we can make an impact.
I will give the House an example. Your Lordships’ Science and Technology Committee, of which I am a member, is nearing the end of an inquiry into engineering biology, which is a very exciting new area of science. Put simply, in the future we will be able to make things by growing molecules and cells. Last week, the Government’s Chief Scientific Adviser, Dame Angela McLean, came to us and held up for the committee a handbag. It was not made of leather, nor of plastic; it was made of coconut oil that was processed by bacteria. The food industry is developing meat that is not real meat; it is grown in a laboratory. In the aircraft industry, there is real interest in producing synthetic jet fuel without using carbon or oil. All these new developments offer the additional benefit of recycling and helping us to reach our net-zero targets. That is why, incidentally, it is absolutely right for the Government to set up the regulatory innovation office to exploit these new areas.
What of the future? There are one or two things we must try to do. First, there is no doubt that we need to start with education. It is absolutely vital that we enthuse and inspire the next generation, and it must start in primary schools if not before, opening young hearts and minds to the wonders of science. We must make use of all the many scientific role models that exist, whether it is Maggie Aderin-Pocock on astronomy, Hannah Fry on maths or Hamza Yassin on wildlife photography. Brian Cox’s latest TV series on the solar system has been watched by millions. Of course, David Attenborough remains our national treasure, inspiring us with his documentaries: everything from “Life on Earth” to the new series, next weekend, which I think is entitled “Asia”. I think I am right in saying that my noble friend Lord Winston recently went to a school in Northamptonshire and the head teacher reported an upsurge of interest in science after his inspiring visit.
Secondly, we need to create and sustain a public and society that understand the importance of science and technology and are supportive of innovation. Whenever I meet someone who expresses great scepticism about science or, in recent years, vaccines, I say to them, “Well, just look at your mobile phone. There is not one iota”—perhaps I should say one POBA—“of a feature of a mobile phone that isn’t the result of science. It would not exist without science”.
Thirdly, another key to the future is to be as international as possible. The UK must maximise all available international co-operation. We should join and collaborate with as many international countries as we can, including countries in the Indo-Pacific. We have rejoined Horizon Europe—good—but now we need to prioritise an expanded role in its successor, Framework Programme 10. I have lost count of the number of times that I have been told that we need a visa system, with its costs, that attracts talent rather than deters it.
Fourthly, we must not take our universities for granted. On the contrary, the House is only too well aware of the signs of stress in the HE sector and the funding of our universities. There was a breakfast briefing for Peers on this subject last week.
Fifthly and finally, although I mean no disrespect to my noble friend the Minister, science and technology is too important to be left to DSIT alone. We need nothing less than a sustained cross-departmental science strategy to attract foreign direct investment and the global scientific talent that we need.
By the end of this Parliament, when we use the phrase “science superpower”, I for one want to feel that it is a reality and not a slogan. I beg to move.
One of the last things we tried to do was introduce what we called a medtech rules-based pathway, which tried to provide a pathway so that there was a way that exciting parts of medical technology could be rolled out through the NHS under a set of well-known rules. We were consulting on that around the time we left government. I would be pleased if the Minister could update me on the findings—it would be super to have that by letter if he does not have them to hand.
Another area was the data for R&D. As we all know, AI is only as good as the data that it comes from. We are fortunate in the medical space to have probably the best data in the world, as I have been told by many people, dating back to 1948—primary care, secondary care and biobank data. We were working on a project to bring this all together to create the possibility of a Silicon Valley of life sciences. I would be delighted to hear where we are in the progress of that project.
I end on a note of caution. A £1 investment achieving a £3 to £4 return is a case of modern-day alchemy, but it requires deep pockets, long-term investment and hard work to achieve those rewards. Anything that diminishes those rewards will be a threat. My concerns about the latest Budget, dare I say, are the moves on tax increases. The crowding out of private finance that the OBR is concerned about puts this at risk, so I hope that we are careful and make sure that we do not kill the golden goose that we have in this space.
The UK has certainly had an exceptional scientific and technological base, but that cannot simply be assumed to continue despite batterings. The new Government propose an industrial strategy again with science and technology at its heart, and that is very welcome. Science and technology have long underpinned economic development, such as in the Industrial Revolution, the chemical revolution which enabled Germany and the US to power ahead, and the green technology revolution which is right now powering China and needs to power us as well.
The noble Viscount, Lord Stansgate, effectively laid out the range of our strengths in science and technology, and we will hear more today about that promise but also that universities are under threat and that the UK’s growth depends on investment, skills, the removal of barriers and a willingness to take risks and to allow those risks to be taken plus assistance in scale-up, as the noble Lord, Lord Markham, said. Governments promise to be joined up. The Minister has a special responsibility to seek this in this Government. He will know how damaging it can be when one part of government fails to see the impact of its actions on another. I look forward to his response.
Why would we not see this as a brilliant reason to invest even more, rather than as an excuse to get away with less? True, there are government loans and schemes and grants, but the former places a stressful burden on repayment within a fixed period while the latter may entail a time-consuming amount of effort that is more than likely to be wasted. The latest Innovate UK competition saw a success rate of a mere 4.5%. As with claims for tax credits, many may feel that applying for a grant is just not worth the time that could otherwise be spent progressing the science itself.
Then there is the question of gender. Less than 2% of total VC funding goes to female founders. Earlier this year, a Women in Innovation grant offered some 50 awards for a very modest £75,000 per project. Less than 4% were funded. Programmes levelling the playing field for women should go a distance towards changing the present blatant inequality, not entrenching it further.
More generally, it is the baked-in and oftentimes biased decision-making that stifles the otherwise great economic impact of our entrepreneurs. It is safer to fund small, transitional technologies, at the cost of truly disruptive innovation, because there is very little in the way of incentives or protections if an investment does not work out. There is much willingness to charge capital gains on investments where success can be shared but no appetite for sharing the consequences of a failure—hence the mindset to back only cautious advances at a cost of truly transformative ways of thinking.
This lack of support often forces disruptive scientists into looking further afield for funding to grow. Once they enter, say, the US ecosystem, it is that economy which will ultimately benefit from the stimulus provided by innovation which the UK has fostered in its infancy. Too often this country is seen as a feeder ecosystem into the US, not giving full rein to its homegrown ingenuity.
STEM innovation is the crown jewel of our economy. It is high time we invest at least as much as others to show the world what the UK science and technology sector can achieve. But without an improved national strategy and support, R&D-stage companies such as mine will have no choice but to consider M&A overseas. It is high time we think of innovators and the Government as partners in building the economy of tomorrow, the foundations of which should be laid today.
Another advancement was this year’s announcement that Northumbria University would become home to the North East Space Skills and Technology Centre. Funded by investments from a US aerospace and defence firm and the UK Space Agency, the centre will transform the UK space economy through the research of world-leading space experts and by bringing together industry with academia. It is expected to create 350 jobs and to inject £260 million into the north-east’s economy, further demonstrating the growing recognition of what this region has to offer.
I welcome the emphasis that yesterday’s Budget placed on this sector through the record levels of research and development investment, as well as the greater regional powers granted through the North East Combined Authority and its mayor, which will unlock funding and powers to further the growth of science and technology in this region. I feel that we must now ensure its future success, and that the potential of this region is fully unlocked through continued recognition and investment.
The Minister will be aware of the previous Government’s policy paper Space Industrial Plan: From Ambition to Actionpublished in March this year. It was obviously too late in that Government’s election cycle to do much about it, but it stated:
“Global satellite services … underpin at least 18% of UK GDP (£370 billion), supporting everything from mapping to weather forecasting, to monitoring the power grid and enabling every single financial transaction”.
I ask my noble friend the Minister: do the Government recognise the potential importance to the UK economy of the space industry, and what action do they propose to take to ensure its growth and future potential?
Our world-class, research-intensive universities are undoubtedly national assets and are highly regarded globally. As well as their key roles in education, training and curiosity-driven research, their science and engineering departments are hugely important drivers of economic growth. But many universities are now in a precarious financial state. In the upcoming spending review, their R&D needs further investment and support from the Government so that they can continue to innovate, attract foreign investment and stimulate industries. “Invest, invest, invest” was the mantra of the Chancellor in her Budget speech. Enhanced support for science, technology and engineering in our universities and for university-business collaboration could not be a more important investment. It will be crucial for the successful delivery of the industrial strategy, for growth and for the economy.
There is, as other noble Lords have said, an emerging slow cascading crisis in our universities. The business model does not work anymore. We cannot subsidise research and lots of other things, through arguably overpriced foreign students. They may not continue to come, and they are beginning not to come. I think the Russell group estimates that there is a £5 billion funding gap in research, which is cross-subsidised at the moment and is vulnerable. This is beyond the remit of the department in which the Minister serves, but it is vital to his interests, and all our interests, that the Government turn their attention to this.
One more specific item I would like to raise is supercomputing power. The previous Government announced the project in Edinburgh. It was then stopped because it was said not to be properly funded and so on, and it is being reviewed. It is absolutely essential, particularly to the skills available in AI and others which we have in this country, that we have first grade supercomputing power available, but we do not have it. We are not in the top league.
Finally, I once went off as a junior Minister and sat at the feet of a great man at Caltech, a hero of mine, Murray Gell-Man. He said that there was too much rowing and stuff in Cambridge. There was some science, but the vital thing we had in England was long-term funding. Of course, we immediately threw that away. The Minister is doing his best, I believe, to try and bring it back with seven and 10-year rolling contracts. I give him all our support in attempting to do that.