15/03/2017 House of Lords

House of Commons. We will now go over live to the House of Lords. You

can watch coverage after the daily politics later tonight.

My book -- we have to attain a nonexecutive chair and that person

be a person appointed to that role and a souvenir figure from business.

Most funding goes to companies, not to universities or research

institutes and this funding is used to support innovative and product

and process -- progress. Innovate UK's support has economic benefits

and will be all the more critical as we exit the EU with a changing

relationship to the industry focused programmes. It needs to retain its

strong business voice both in size UK and critically also outside. That

voice is something that will be amplified if it is chaired by

leaving -- leading industrial figures and the majority of business

numbers on the board. This is the purpose of amendment 160 six. The

Government amendments 173 and 183 are welcomed. Recognising the need

for Innovate to develop a wide range of support to new companies which

could include investing in forming companies as well as giving grants

and loans. Also enforcing Innovate's role. At the moment, I beg to move

amendment 160 six. Sun-macro page 105, line 16, insert the words.

It is simply that on the face of it, it appears that provision and a

supplementary powers 16, three subsection B, prevents the research

councils from doing a number of things which are important to their

fundamental function and clearly which they should be able to

continue to do. I hope the Minister will be able to explain to us this

amendment is unnecessary because of provisions that have not been

spotted in the bill or to accept this is something that needs to be

changed. I think although the wording of the amendment does not

see it, this applies to it innovate UK. Innovate UK has in its function

very often as to collaborate with industry and so it would seem

unnecessary to forbid it from setting up joint ventures.

You are as supportive as 166. I would like to make apologies that I

have not been present for this item when it was dealt with the committee

stage because I was abroad, but I have read carefully of the

discussion that happened at that point. I also am a member of the

science and technology committee which looked at this issue recently.

I share the concern that was raised that the science and technology

committee by a number of witnesses, concerned that the In a big UK would

be hijacked by the research Council and become the commercialization and

innovation of the research councils and that would usurp the current

hugely valuable role that Innovate UK has in their being business

facing, in supporting innovation, small businesses especially and at

the very early stages, where an entrepreneur has got a bright idea,

but no backers and no proof of concept. So I share the concerns the

noble Baroness, Lady Brown of Cambridge, that the membership of

the committee and chairmanship of the committee for Innovate UK needs

to be very much business focused and to have a predominance of business

focused people on it. I recognise that the Government has gone to some

weight in Amendment 183 and very much welcome that. I very much

welcomed the meetings that I've had with ministers, with Sir John

Kingman, and with the Minister of State for universities and science,

open web and is not here today, although he regularly is. But it is

probably my conversations with Joe that Johnson have made me most

alarmed, I'm afraid, and that, although he gives assurances

throughout about the business facing role of Innovate UK, every time I've

ever heard him describe it unprompted, he immediately describes

it in terms of it being the innovation and research arm of the

research councils. So I would hope that the Minister would recognise

that the role of Innovate UK needs further strengthening and to give it

a business -based chairman and a predominance of business based

members on the committee would strengthen that very much. I welcome

the Government Amendment 183, which addresses the issue that the noble

Baroness has just referred to, and I can confirm as the chairman that we

were indeed concerned at the original proposals, some months back

now, that Innovate UK should be put together with the research England

into research Council because it was clearly absolutely essential that

the business community should have confidence that they had Innovate UK

very much at their disposal, their organisation and it wasn't somehow

going to be subsumed by the research Council, and I think I accept that

the concerns expressed by the noble Baroness Lady Brown and Lady Young

have validity, but I do recognise that the Amendment Government has

put forward, particularly a and B of this Amendment, in 183, requiring

arrangements to have regard to personal engage business activities

and the need of priority, to have on the face of the bill goes a very

long way from where we were a few months ago, so I am content to

accept this as meeting most of the concerns that I at least had

originally. My Lords, I draw my attention to my interest as a

declared registered specifically to my chairmanship of WMT. I should

also mention that I served as a member of the review of the UK

research and innovation scheme that put it all together. As piece

appears to be breaking out today, I hope those who labored for so long

and the salt mines of the committee stage will allow a few brief words

on Amendment 16 six, 173 and one 83. All three will help innovate

Innovate UK promote partnership between business and academia. I can

tell you that can be a tough job. When I started WMT, we encountered a

lot of opposition, academics are protective of their independence

from commerce, however engineers do like making an impact, the bigger

the better, so their curiosity won out in the end. We know academic can

obstruct business collaboration. For example, grant application rating is

a prized skill in universities and for a very good reason. Critical

assessment of research proposals is vital to academic debate. Business

sees this rather different. Especially if they are expected to

disclose commercially sensitive knowledge. The technology strategy

Board was created and must address this, was critic here. We debated

here for about four years before this was formed, because there was

an argument, should Government intervene, should we pick winners?

And all the other arguments at that time. But we won and the technology

strategy Board was created. The body is now of course Innovate UK. Change

is constant, my Lord. So innovate UK needs leaders who understand the way

of business and science are changing and the flexibility to create the

right partnerships. Amendment 16 is which of this. Today, every business

is multidisciplinary will stop if you make cars coming need

programmers, the photographers, medical researchers as well as

engineers. Bringing Innovate UK's and the research Council under the

same roof makes scientific and commercial sense. I'm 173 and 183

would ensure business and scientific knowledge in its leadership,

allowing it to build flexible partnerships. Innovate UK's role is

to act as a catalyst. However, my Lords, while flexibility is needed,

Innovate UK should not be a bank. It has neither the resources. They

should use their commercial expertise to create incentives, to

encourage businesses to invest in innovation. It is a matchmaker, not

a moneymaker. Their role has to be to improve productivity in this

country from scientific research. The amendments in this will help

them deliver on that task. More generally, the amendments being

proposed elsewhere today will do the same for out right as a whole. I

just want to emphasise how much to speak to Amendment one 66. Just

emphasise again the importance of having individuals from a business

background. All too often these initiatives, I have seen that the

Government has the best of intentions, but there are people

involved to do not have experience in business, who have not run

businesses, and is when you run businesses you realise innovation

and creativity is at the heart of it. I would've thought go further

than this and say they must come from science related business

backgrounds. Any good business have to be innovative, food and junk you

have to be innovative, but is the key issue that you have to have

business backers of the top table. -- food and drink. I just wanted to

confirm that we are signed up to Amendment 166 in support, it is

important to get the balance right, it is probably another Goldilocks on

coming up but I'm sure the Minister will pick it up and hope we will get

some responses on that. We have also signed up to Government amendments

173 and 183, at the heart of the debate. Again, the argument made by

the local Lord Mr, there are ways to improve the spell. We have been able

to explore them in committee. There are support around the House of your

pleased to be apart of. We feel are constraints which may emerge more

from the business consideration then perhaps so far, and the noble friend

has pointed out the genesis of all this through technology strategy

Board through to Innovate UK, I think it is important that we learn

from our history and Dave for the experience they've had over this

period of time, the formation of UK our eye, the involvement of Innovate

UK in that was not recommended, they felt the issue should be looked at.

The Government decided to move forward and I think it is a

Government's is possibility that we get the most out of that therefore.

We're not talking that the question of a bank we're talking about an

opportunity to create incentives, a group that moves forward with the

support of industry movement, much better than one that tries it would

on its own and I look forward to hearing what the noble lord and Mr

has to say about that. Dillon my Lords, I think I find myself in

really a complete agreement with the noble lady, Lady Brown. -- my Lords.

I think all the sentiments are the same. They pick up on a phrase from

the noble lord about the purpose of Innovate UK. To sum it up in three

words, which he did, it was productivity from research. An

earlier we were discussing the first Amendment, and a Lord talked about

the sometimes serendipitous spurt that can spring from blue sky a sick

research. I think the point of Innovate UK's to ensure that more of

those fruits take root in the UK, rather than ending up in Israel or

the valleys that are more innovative than we are. The whole point of

Innovate UK, the whole purpose of this to bring Innovate UK with the

research Council is to create more for tile soil for some the great

ideas and research that comes out of our universities. In creating

Innovate you are right, we are creating something new. We are not

nearly bolted together nine separate bodies. To make this work, the

Government structures need to change. Weird introducing an

overarching board in UK are I, a high profile chair and executive. It

is appropriate that the governance of the councils change as well to

reflect this. We've been listening to this debate for some time now,

particular contributions from the noble Baroness Lee lady Brown.

Landlord Brewers. -- Lord. However, introducing a nonexecutive chair for

the councils into these new lines of accountability would risk confusing

accountability with UK are I and undermined the strategic role. --

UKRI. I can of course see the attraction of having a well-known

leading industrialist as nonexecutive chair of Innovate UK,

but it would not sit well with the governance structure of UKRI, and I

think would fatally undermine the whole concept of UKRI. However, we

acknowledge there are valuable roles back and play outside of direct

lines of accountability. For example, given support to the chief

executive, as a route to the high-level communication. We averted

discuss my noble lord's suggestion that we give each member of the

Council the role of the senior independent member and given

assurances that this will be done. We hope this is adequate to address

the concerns. Lord Mandelson gave a very good description of the

importance role that independent member can play in the circumstances

without undermining the integrity of UKRI. This Amendment, 166, also

seeks to determine the background of Innovate UK's councilmembers. As has

been discussed in respect to UKRI board members in an earlier

grouping, prescribing the background of councils in legislation would

encroach on the freedom of UKRI and its Council to manage their own

affairs and could be unhelpful in achieving the best possible mix of

individuals at any one time. However, we agree with the

sentiments express. In the case of innovate UK, the Government would

have a strong expectation set the guidance that a substantial report

of member should have a science related business background.

Innovate UK's current board never should speaks for itself with most

of the councilmembers having signed the technology business related

background. In addition to this, the board contains much complement three

experience of universities, finance, consulting and Government. Turning

to Amendment 173, my Lords, many of you have asked to see stronger

language on the face of the bill to protect Innovate UK's business

facing role. At Lords committee, the Government undertook to reflect on

how this could be done and we have tabled an Amendment that achieves

this in two ways. Firstly, in introduces stronger language to

describe UK's role, Innovate UK's role, in supporting the business

community. And record the need of support is more direct than the

previous tax. Secondly, introduces a new requirement to have regard to

need to promote innovation by persons carrying on business in the

UK. Finally, it maintains the overarching mission to increase

economic growth in the existing duty to have her guard to desirability of

improving quality. It has been said productivity is not everything, it

is nearly everything and if there is one word that should be on Innovate

UK's, in its DNA, it is the word productivity.

It couldn't be clearer to support innovation and it is distinct from

the other councils of UK R I E. Lady Brown and the Lord Mayor raised

concerns in the committee that it Innovate UK freedoms appear overly

restrictive. There will be no diminishing of the current freedoms

ins the move. It is based on conditions that apply to all

Government departments and public bodies and is approved by their

Treasury. It is intended to make it clear that it can enter into joint

ventures subject to safeguards and the broad parameters will be set out

clearly in advance and can be reiterated at Innovate UK's

portfolio as it develops. I hope these amendments reassure noble

Lords over the positive intent. These reforms come in the context of

the historically large Autumn Statement settlement of innovation

funding as part of the industrial strategy. Turning to amendment 173

a, I hope this meets the point raised by the noble Lord. Let me

reassure the noble Lords that it is not the intention of this bill to

disrupt commitments and obligations within the current councils. The

Government will not require UKRI to seek permission to continue with

joint ventures as part of the legal process to set out UKRI. In new

ventures, the Government will not subject councils to any oversight

from the Secretary of State that the councils do not already undergo. It

is our ambition is that they will be subject to less process and

concentrate more on their functions. Noble Lords may not be aware that a

great deal of work is currently underway in the councils and their

parent departments to ensure a smooth transfer of personnel

activities from the current organisations to OFS and UKRI. Joint

ventures alongside many other forms of corporate arrangements are in

scope of this work. The bill provides tools in schedule ten to

transfer these assets from the councils to UKRI through proper

transfer schemes. If more intervention is required, wet bed

joint-venture is not a range, the joint ventures will be individually

addressed. I hope this reassures noble Lords of two things. We do not

intend to inflict any due process, any undue process on UK -- UKRI.

They will continue to have delegated autonomy over matters pertaining to

their subject areas. Addressing Innovate UK and UKRI's freedoms, I

request the noble Baroness Lady Brown to withdraw her amendment. I

thank the noble Lords that have contributed to this debate. I

recognise from what he says that we have a very strongly shared joint

objective of pertaining the -- retaining the different roles and I

think in the light of the Government amendments which go a long way to

doing that and indeed his earlier and positive assurances on an

important role the senior independent members of the council

's, I beg leave to withdraw the amendment. Sun-macro is it your

pleasure that it should be withdrawn?

The question is amendments 167 to 173 be agreed. Amendment 1703A. Not

moved. Amendments 173 and 174. The question is 174 and 175 be agreed

also. In clause 88, amendment 176. I beg to move amendment 170 six. I

express my gratitude to Lady Brown who worked constructively with me

and my colleagues over the last few weeks and months. I am indebted to

my noble friend Lord Willis who has written and will continue to be a

beacon for ministers setting out in detail this important principle and

its practical applications. The Government has been clear in stating

the spirit of the principal through various provisions is already, in

the words of Lord Mandelson, hard-wired into the bill. I am

grateful to all the noble Lords who spoke on this point. A second

reading and committee. Many refer to the principle itself. I offered to

reflect on this and I'm delighted to move amendment 100 91. I hope noble

Lords will be delighted to accept it. We define the principle is the

principle that decisions on individual research proposals are

best taken following an evaluation of the quality and likely impact of

the proposals such as the peer review process. This amendment is

both hugely symbolic and an important protection for UK

research, putting reference to the principal and legislation for the

first time. There was a duty on the Secretary of State to consult

formally before laying regulations to alter the names, number of fields

of activity of the research councils. I'm grateful to the noble

Lord Lord Stevenson who asked the clarity on the point of prior

consultation at committee stage. I hope these amendments to live my

promise to address the noble Lord's question. Why this Government

committed to consult before altering the Council, these amendments would

bind future governments to this commitment also. This Government has

been consistent in its pledge to allocate separate budgets to each

council of UK -- of UKRI. I listened to the greater protections for the

noble Lords and the noble Baroness Lady Brown. I have reflected on

their speeches and the Government is tabling amendment 188 which will

require the Secretary of State on making grants to ten to publish the

whole amount in a separate allocation which will go to each

council. It will give transparency on all funding allocations to UKRI

and research councils, Innovate UK and research England. My global and

learned friend spoke about the definition of specialist employees

in clause 90 one. This proportion is intended to ensure research councils

may continue to recruit certain specialist staff that are employed

in relation to a council's field of activity. He raised concerns that

the current definition could lead to ambiguity for relevant staff but may

not be considered by some to be researchers or scientists. I have

reflected carefully and the case that he put forward and I am happy

to table amendment 170 82 addresses points. This amendment draws on the

language my noble friend employed in his own amendment at committee,

expanding the definition to include any person with knowledge,

experience or specialist skills relevant to the council's field of

activity who is employed by UKRI to work in a field of activity. I hope

this amendment alleviates the concerns of my noble and learned

friend. I look forward to hearing noble Lord speak on other matters

and will respond after they and other noble Lords have had a chance

to speak to these amendments. Amendment proposed, Claude -- clause

80 eight. At the end insert the words on the martial's paper. I rise

to debate two brief points. I hope I will be forgiven for taking the

opportunity to pay the warmest and pay tribute to my admiration to my

own friend 's Lord Stevenson and Lord Watson for the sterling work

they put in on behalf of this side of the bill. My Lords, there is a

great deal of feeling in the research about the points covered by

these amendments. I think there is a recognition and a tremendous amount

of work has gone in to try and find an acceptable formula of words that

I think it should be put on record that many of those who are involved

in the most outstanding research in our universities remain mystified as

to why such a process should be appearing in brackets when it should

be in capital letters because the review is essential to the process.

Also there is something that the word, excellent, should not have

disappeared. Quality is important but what matters ultimately in the

research record of our universities and in the contribution to Britain's

noble standing in the world about the quality of our research is its

emphasis on excellence. I do therefore put on record that this

goes forward, it will be essential to keep those two important concerns

of the research community in mind. I am involved in three universities

and I have been a governor for very many years and am now a governor. I

rise briefly to thank the noble minister for his introduction of

these amendments and I want to refer briefly to amendment 180 nine, 190

and 191 and say how delighted I am that the principle is on the face of

the bill. We have heard Joe in discussions during the passage of

this bill, many different views on what the principle is. Whether it

should be called something else. One of the key references is the paper

by the nobleman Lord Will it. It really is about peer review and

deciding which individual projects are funded within broader areas. It

is reasonable for ministers to have priority is just as when the noble

Lord was Minister, P describe the... The peer review system, the

practitioners and others close to the action should be the ones who

decide which projects are funded. Although the wording says quality,

I'm sure if I was on a committee, I would interpret quality as including

excellence echoing the point the noble Lord May. I support this

amendment.