[Relevant Documents: First Report from the Science and Technology Committee, The science budget, HC 340, and the Government response, HC 729.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2016, for expenditure by the Department for Business, Innovation and Skills:
(1) the resources authorised for use for current purposes be reduced by £7,152,214,000 as set out in HC 747,
(2) further resources, not exceeding £195,006,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £72,412,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Margot James.)
We hold a position of great responsibility in the global scientific community; as a science powerhouse, not only do we set the bar for the quality of research, but we have a duty to take care that our spending and structural decisions do more than merely maintain the status quo. As we face down a century that is filled with infinitely complex societal challenges—ageing, chronic and complex illnesses and climate change—we have to acknowledge that we are in the hot seat. Our scientists and innovators in academia and industry will be at the forefront of the discoveries that will not only underpin the productivity of our economy, but ensure the sustainability of our way of life.
If we get our spending priorities, regulatory frameworks and immigration policy wrong, we will be on the wrong side of history. For that reason, the Science and Technology Committee chose spending on science and innovation as our first inquiry and ensured that we reported in time to make recommendations ahead of the spending review. It is also why we asked for this debate today, ahead of the Budget, to press on recommendations that have not yet been taken up, although we are grateful for the Government’s response.
Our findings received widespread support. The Times and the Financial Times published editorials endorsing our call to increase R and D investment. Sir Paul Nurse, president of the Royal Society, joined scientists up and down the country when he said that our report
“hits the nail squarely on the head.”
The evidence that we received was clear:
“We punch well above our weight”
in science and innovation.
My hon. Friend is absolutely right to be proud of the Culham Centre for Fusion Energy. I have visited it on more than one occasion. One of the fundamental proposals that we have made is to increase R and D investment in the UK. If he will listen a little further, he will hear exactly what we have proposed to ensure that the UK remains a world leader in that particular area of research.
With just 0.9% of the world’s population and 3.2% of the world’s R and D spending, we produce 16% of the world’s most cited papers and hold more than 10% of the world’s patents. We have produced 80 Nobel laureates. We have four of the world’s top six universities—I will, if I may, boast that one of them is in my constituency—and we attract more inward investment for research than any other part of Europe. However, it is not enough to be proud of the exceptional impact of our research base; we must also be mindful of the pivotal role that it plays in the goals that we have set ourselves as a nation.
As a Committee, we welcomed the Chancellor’s statement protecting the science budget in real terms, increasing the annual capital budget to £1.1 billion and maintaining the innovation budget at flat cash—albeit with £165 million becoming loans. We are also grateful to the Business Secretary, who gave evidence to the Committee in January, for reassuring us that not only would the ring fence for the science budget remain, but no additional organisations, programmes or spending lines could be added to that budget.
Although we welcomed that assurance, we would like to see those allocations for ourselves. The Business Secretary assured us that those allocations would be finalised in mid-February; it is now March and I am told that the negotiations are still ongoing. Will the Minister please tell the House what the hold-up is, and exactly when those allocations will be made public? We are concerned that as excellent as our research base is, commercialisation, though improving, remains sub-optimal. Crucially, despite the recent spending settlement, UK investment in R and D is internationally low at a time when our competitors are increasing R and D investment.
At 1.7% of GDP, the UK remains 12th among 28 member states for R and D investment; in 2013, Germany invested about 3%, China about 2%, and Israel and Korea about 4.2%. There is a reason why all our competitors are increasing their R and D while we lag behind. It is that R and D investment is proven to increase productivity and innovation growth. Science and innovation spending is not a subsidy, but a strategic investment that creates jobs, increases productivity and attracts inward investment.
Does my hon. Friend agree that research, pure research and discovering inventions often lead to some of the greatest creations? There were decades between the discovery of the electron and when we were able to use it, but it now runs every part of our lives today.
My hon. Friend is absolutely right. I often like to quote Lord Porter, who says that there are only two kinds of research: that which has been exploited and that which has yet to be exploited. That is why we must ensure that the entire pipeline from fundamental research all the way through to commercialisation is working at peak capacity.
We must be mindful of the fact that, between 2000 and 2008, 51% of productivity growth came from innovation. We know that Government investment in research crowds in private sector investment, because the latest BIS analysis tells us so. It shows that £1 of public investment will increase private funding by between £1.13 and £1.60. It shows that firms that persistently invest in R and D have 13% higher productivity than those that do not. It shows that every £1 of public investment in R and D raises private sector R and D productivity by 20p each year in perpetuity.
Our top recommendation to Government was to produce a long-term road map to increase public and private R and D investment up to the 3% EU target. That would sit well alongside the national innovation plan, which I understand the Business Secretary is proposing. We are not alone in calling for that increase; other Select Committees and institutions have done so before us. In fact, it was BIS’s own analysis in 2014 that called for the UK to increase R and D investment up to 2.9%, which is the average of our competitors, commenting that those competitors do not appear to get poor returns on their investments.
If the evidence is so compelling, what would such a road map look like? Based on international analysis, if the UK were to invest 3% of GDP in R and D, we would expect a third of that to come from public spending. Policies and the road map would need to be a combination of increasing Government R and D and stimulating private sector investment beyond the life of this Parliament. Although protecting the science budget proper and the ring fence in this Parliament is a good start, we also believe that the policies need to protect the departmental R and D and to make it more transparent and necessary. Departmental R and D has plummeted in some Departments in the past decades; reversing that trend can only lead to better government and will also create all the virtuous effects that we saw in the previous Parliament.
We also need to target private sector investments to scale-ups. The UK has become a country with lots of start-ups, but not enough companies make it through the so-called “mid-cap gap” to become £1 billion valuation quoted companies. Incentives for early-stage investors to build and stay in companies are needed. Options might include increasing the enterprise investment scheme threshold to cover £100 million companies.
There could also be incentives for investors to hold on to eligible research-intensive companies for longer and not to sell them. Those incentives could include reintroducing the capital gains tax taper relief to reward 10 to 15-year exits from investments in such companies. There could also be incentives for pension and institutional fund investors to invest in research-intensive companies, as they tend to have a longer term outlook. A programme such as a capital gains tax break on the dividend returns for funds in proportion to the percentage of the fund that is invested in a research-intensive company might be an option.
We could also look to our immigration policy for possible opportunities. Tier 1 investor visas require individuals to invest £2 million in the UK for the duration of their stay. The Migration Advisory Committee has recommended that those sums should be invested in the public good, such as in hospitals and schools. There is an opportunity here to assemble a portfolio of investment for research to meet that criterion so that our science, technology, engineering and maths ecosystem could benefit from that investment.
The immigration skills charge is a final option that we could propose. We urge the Minister to consider an exemption for the STEM PhD-level certificate of sponsorship from the immigration skills charge. That would boost the STEM PhD employers. Furthermore, PhD-level exemptions already exist in the visa system in recognition of the need to recruit for these posts from the best in the world.
Those ideas are just a starting point, but our message is clear: we believe that increasing UK R and D investment to a competitive level needs to be a matter of national priority, and a long-term road map is the right mechanism to achieve it. Getting the science spending right is about not just how much we spend, but how we spend it.
We also received worrying evidence that not all of our capital projects were operating at full capacity due to inadequate resource allocations. The ISIS neutron source worth £400 million at Harwell is operating for only about 128 days instead of an optimal 180 days due to insufficient operational costs. Similar problems were reported elsewhere, including in the Catapult network. Although we welcome the Government’s commitment to the Catapult network, which is working well, we urge them to consolidate and fully fund the existing network before expanding it. It is simply wasteful not to ensure that we are putting enough resource into the system so that we can realise the full value from all capital investments. That is why we called for a review of all capital and resource allocations to ensure that all future capital investments are allocated the resource necessary fully “to sweat our assets”.
The Business Secretary accepted that problem when he appeared before us, and he assured us that a review was under way to ensure that the situation did not happen again. He committed to send the Committee the results of that review, but we have not received them, so I hope that the Minister can update us on progress today.
The Business Secretary identified France and Finland as the inspiration for the introduction of innovation loans. The Committee would be interested to hear what metrics the Government used to conclude that loans were effective for stimulating innovation. We understand that the Government intend to pilot this scheme. As a Committee, we can only commend a scientific approach to measuring the impacts of different types of instruments before settling on a specific grants/loan mix, if that is the intention, but it would be helpful to hear from the Minister at the outset what hard evidence there already is on which financial instruments work best and what his plans are to build on that evidence before introducing such loans.
Finally, we were crystal clear that on no account must the Government’s proposals for reorganisation of the research councils and higher education undermine the dual funding system or the Haldane principle. In his evidence to the Committee, the Secretary of State said that there would be one response from Government covering Dowling, Nurse and the higher education Green Paper. He could not give us a timeline for that response, however. Given the far-reaching impact of these proposals and the current uncertainty surrounding the Government’s intentions, I hope the Minister can be a little more definitive today. Will he please not only say when the Government will publish their response, but clarify a number of points?
First, do the Government plan to adopt Nurse’s proposal for a ministerial committee and, if so, what form will it take? Will it be a single Minister meeting Research Councils UK, or will it involve Ministers from across key Departments? This will clearly have an important impact in terms of the politicisation of funding decisions. Secondly, can the Minister give us at least some sense of the major concerns raised in the Green Paper consultation process—in particular regarding merging the Higher Education Funding Council for England’s science budget allocation role with Research Councils UK? What specific measures are being proposed to ensure that the dual support system will be safeguarded if these changes go ahead? Finally, what additional costs does he anticipate the implementation of Dowling, Nurse and the Green Paper will incur and will those have to be found from within the existing science budget settlement?
Our goal in this Budget and Parliament should be to unleash the full potential of every local economy in Britain. In an increasingly knowledge-based economy, the pursuit of excellence in research and innovation is at the very heart of effective strategies for sustainable growth, increasing productivity and creating high value jobs. It is not enough just to aim for stability—for maintaining the status quo—especially if policies and spending decisions are based more closely on templates of the past than on analysis of future challenges.
Globalisation means that a single disruptive technology can create a worldwide market shift in what seems like an instant, and our STEM ecosystem needs to be the most agile and responsive in the world if we are to compete. However, we will achieve that agility only if we recognise that we are operating in a global market at home as well as abroad. Some 25% of university research income comes from overseas, largely the EU. Some 50% of business R and D in the UK is from firms headquartered overseas, and R and D from abroad has grown by 59% in recent years. A quarter of top researchers operating in the UK are not British nationals.
Investors and talent need to see the Government instil confidence in the research base, but with the Green Paper, the Nurse review and the upcoming pilots of innovation loan systems, we are sending signals of turbulence and uncertainty. It is time for the Government to step up and make it crystal clear that the UK’s science and innovation is built on a rock-solid foundation. It is time for the Government to end uncertainty over Nurse, Dowling and Green Paper reforms and set out their direction, and it is time for them to demonstrate commitment to creating stability and certainty for science, with a long-term road map for increasing public and private R and D to competitive levels. In that way, we would supercharge the proven, stabilising effects of the ring fence and capital commitment, capture large-scale inward investment and secure our status as a bona fide science superpower.
It is a genuine pleasure to follow the Chair of the Science and Technology Committee. The manner in which she is steering that Committee towards practical added-value recommendations is exemplary and superb, and the manner in which she steered the House through her recommendations this afternoon was astonishingly good, too. I am in the weird position of agreeing with every word she said, so I will not take too much of the House’s time.
The hon. Lady was particularly strong, if I may say so, when she spoke about what a pivotal role science plays in future economic and productivity growth, and given my Select Committee’s priorities, I was particularly interested in her point about start-ups. It is relatively easy to start a business in this country, but scaling that up so that we have very large, innovative and successful firms employing a large number of people is a major challenge for this Parliament. I hope that our two Select Committees can work together closely to provide the join-up that is needed.
The hon. Lady mentioned that science has never been more crucial to our status as a modern economic nation. I agree. We need innovative and successful firms creating wealth and employment on the back of science and research and development. We are here now, in the 21st century, on the cusp of the fourth industrial revolution: the first, in the 18th century, used water and steam power to mechanise production; the second, in the early 20th century, used electric power to create mass production; the third, in the late 20th century, used electronics and information technology to automate production, unleash digital and revolutionise the means of communication.
This fourth industrial revolution, moving at an exponential pace, is astonishing. The technologies that this revolution is unleashing, such as the internet of things, autonomous vehicles, materials science, nanotechnology, biotechnology, energy storage, artificial intelligence and quantum computing, will disrupt almost every industry in almost every country, and will disrupt society as a whole. Science and technology are the foundations of this revolution, and the choice in the future will be stark. Countries that embrace and invest in science will be the winning nations of the future; those that do not will fall behind in economic growth and living standards.
This is why, as the hon. Lady pointed out, it is a matter of concern that we have lagged behind spend by our competitors on science and research and development for much of the past 30 years. As she said, what we do spend, we seem to spend very efficiently and effectively. We punch well above our weight, but we need to think about the volume of that value, as well as what we are doing with it. We have spent just over 2% of GDP on R and D just once in the past 30 years. That was in 1986, and we have never again reached that level. Spend has declined steadily over that period to reach a long-term average of about 1.6% or 1.7% of our GDP. We are below the EU average for R and D spend as a proportion of our economy.
The Russell Group has pointed out that in terms of the level of R and D intensity of the top 22 countries listed by the OECD, the UK has the lowest level of investment. Our investment has declined, while our competitors such as Korea, Germany, the US and even Japan have increased the share of their economy spent on research and development. As is mentioned in the hon. Lady’s report, Imperial College London has said that our investment as a proportion of GDP is about 1.72%, but China increased its share of R and D investment from 1.3% in 2005 to 1.98%; France increased its share from 2.11% in 2005 to 2.26% in 2012; and Germany increased its share from 2.51% in 2005 to 2.92% in 2012. The US also increased its investment in the same period from 2.51% of GDP to 2.79%. Imperial College, giving evidence to the hon. Lady’s Select Committee, said that the choice was stark:
“Without increased investment in R&D, therefore, the UK risks losing its position at the forefront of research globally, particularly given the rapid rate of advance in scientific research and the intense levels of international competition.”
Is my hon. Friend concerned that where the Government attempt to support innovation and R and D, the resources are very unevenly distributed? For example, from the Catapult programme, 9% of resources have gone to the midlands region, but 46% have gone to London and 22% to the south-east. Surely that is not the way to get the best out of the country.
My hon. Friend makes an important point. If we are spending a pound of public money, what do we want to get out of that and where do we get most bang for our buck? If the Government are serious about rebalancing the economy and making sure that prosperity is not just in London and the south-east but spread across the country, projects such as the midlands engine and the northern powerhouse need to have that scientific base in order to boost investment, research and development, and ultimately wealth creation as well.
The Russell Group has stated:
“The UK punches above its weight when it comes to excellence in research and higher education but this situation is unsustainable in the long-run without continued investment…The UK lags behind its main competitors in its level of investment in R&D and cannot continue to sustain its position as a world-leader without sufficient support.”
The EU has stated that to maintain future competitiveness in the face of unprecedented global competition, member states should be working towards spending 3% of GDP on research and development by 2020. As the hon. Lady said, the UK is a long way from that target. Only Finland, Sweden and Denmark already exceed that 3% target, yet it is vital for future productivity gains.
The hon. Lady and her Committee thought that the science issue was so important that it should be the focus of their first inquiry. We in the Business, Innovation and Skills Committee thought that the Government’s productivity plan, published in July 2015, was so important—indeed, the productivity gap is the major economic challenge of this Parliament—that we made it the focus of our first inquiry. We looked at spending on research and development and found that publicly funded R and D creates a strong “multiplier effect” and “crowds-in” private sector, charitable and inward investment, stimulating around 30% more self-investment from industry. Throughout our inquiry we heard strong evidence about just how much the public spending on R and D can draw in that private spend, as opposed to crowding it out. That model is operated by our major competitors around the world. Our report stated:
“We fully agree with the Science and Technology Committee’s recommendations on maintaining good R&D investment in the UK and echo that, if the Government is serious about productivity and competitiveness, it needs to commit to a total level of public and private R&D investment in the United Kingdom of three per cent of Gross Domestic Product. We therefore recommend that the Government produces a ‘roadmap’ for increasing the total level of public and private R&D investment in the United Kingdom to three per cent of Gross Domestic Product.”
The hon. Lady also mentioned the move from grants to loans. I worry about that, because it is a major concern. Decisions on capital investment are global, often decided by people around boardroom tables that are not in the UK, and it can be transferred anywhere. Those multinational corporations will be looking at a different dashboard of metrics when deciding where to put their latest investment. They will be looking at the flexibility of the labour market, tax rates and the ease of doing business. They will also be looking at the collaboration and partnerships between public and private, particularly in terms of R and D.
Other countries provide help and support to land that investment, and for the past 15 years we have had a major strength in that. The level of foreign direct investment into the United Kingdom has been excellent, but I think that we will put that at risk by moving from grants to loans. For example, why would Rolls-Royce invest in a factory here when Singapore, where the company already has a presence, could be offering a whole lot more? It is a case of making sure that we do not compromise our true strengths when it comes to grants and loans. Therefore, echoing what the hon. Lady said, what is the rationale for that? Is the Minister not aware that there is a huge risk in moving from grants to loans? What metrics will he use to advance this? Can we pilot it before it is rolled out across the economy?
The second risk that I would like to talk about is the proposal to merge Innovate UK and Research UK. The Catapult centres are working well, but they are relatively new organisations and they need a period of stability and certainty to become embedded in the ecosystem of science research and innovation. The merger will cause disruption and uncertainty and it will affect our science base. Will the Minister therefore outline for the House what the roadmap is to ensure that Innovate UK and Research UK can come together in a safe way?
The Business, Innovation and Skills Committee fully agrees with the Government on the need to improve productivity; we want to focus on that throughout our inquiries in this Parliament. Part of that is being able to spend for the long term and prioritising capital spend. Under the coalition Government, BIS’s capital departmental expenditure limits rose by about 84%, but under the spending review announced by the Chancellor two or three months ago it will fall by about 60%. The spending review stated quite explicitly:
“The government has chosen to prioritise its day to day spending on national security and key public services while investing more for the long term in capital infrastructure.”
The Government’s capital investment over the lifetime of this Parliament actually increases by about £12 billion, but BIS’s capital spend is being cut by 60%. The Ministry of Defence’s capital spend will increase, as will the capital spend of the Department for Communities and Local Government—a comparably sized Department—because of housing. The Department for Transport’s capital spend will double to £12 billion.
In contrast, the science budget will bob around throughout this Parliament at about £1.1 billion a year. I do not see that as a huge success. Actually, I see it as a failure in negotiations by BIS during the spending review, especially given that, as the Chancellor has said, science is a major priority for this Government. Since 2010 we have lost around £330 million in capital spend on science. It will take an awful lot of investment and prioritising to catch up, given that our competitors are moving ever further away. Therefore, does the Minister think that that was a disappointing negotiation? Given the priority and the pivotal role that science plays, does he think that we should be spending more on science in order to boost that long-term value for the economy?
Given the central importance of science as perhaps the principal driver of future economic growth, increased competitiveness and improved living standards, the relative decline in our science spend, regardless of whether we spend it wisely, should be a cause of enormous concern, and there should be a determination at a national level to reverse it. That is why I am really pleased that the hon. Lady has brought forward this debate. I hope that the Minister will respond positively to ensure that science is at the heart of our economic revival, now and in the future.
This is a vital debate because it is about the future direction of our nation, and whether we will truly commit to the high-value, high-skills economy and invest in the areas that underpin that aspiration, such as core scientific research, or whether we will pay lip service to that aim while actually spending most of our energies maintaining the status quo. I suppose the reality will be a bit of both, but on this occasion I am pleased that the Government’s actions appear to be working towards backing up the aspiration. That is why I want to place on the record my thanks to the Chancellor and to the Minister for the announcement in the recent spending review of a real-terms increase in spending on science.
I was fortunate enough to be a member of the Science and Technology Committee in the previous Parliament. Indeed, I wanted to chair the Committee in this Parliament, but unfortunately that was not to be; my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) was successful, and I wish her and the Committee well in the coming years. Back in 2010 the Committee was very pleased that there was a flat cash settlement and a ring fence for the science budget. At the time, that seemed an excellent outcome, compared with the cuts being experienced by other Departments. Of course, the inflationary effect of that flat cash settlement was that by 2015 it had effectively dropped by 15%.
Therefore, the announcement of a real-terms, year-on-year increase in this Parliament was particularly welcome. As the Minister will recall stating:
“We are protecting science resource funding in real terms, at its current level £4.7 billion for the rest of the Parliament.”
That, along with the £6.9 billion science capital commitment, means a total investment of over £30 billion in science by 2020. That has to be welcomed by all. I believe that it sends a clear signal that science and innovation are at the heart of the Government’s long-term economic plans.
We know that Britain is a great place to do science. As we have heard from my hon. Friend, for every pound invested, we publish more papers and receive more citations than any other developed nation. We perform well above the average, producing 16% of top-quality published research findings, with just 3.2% of the world’s R and D expenditure.
How has that come to be the case, and how do we maintain it? There are a number of things that we have done in the past and that we are doing now. As a nation, we have a long and illustrious history of scientific endeavour, and we have made numerous significant scientific breakthroughs, as we heard from the Chair of the Science and Technology Committee. We have created a scientific landscape that fosters creativity and an ability to think the unconventional and then go out and explore it. While money is important, therefore, this is not all about the cash; it is more about how it is used and how we direct—or do not direct—the way in which it is spent.
This Government and previous Governments have built on the achievements of the past for the benefit of our collective future. In the recent Russell Group report “Engines of growth”, a sample of 240 projects from the group’s universities delivered at least £21 billion of economic benefit—a hundredfold return on investment. That proves that public investment in R and D supports economic growth. However, that investment must be free from political interference, as enshrined in the Haldane principle—the idea that decisions about what to spend research funds on should be made by researchers, rather than politicians. That must continue.
It is right for the Government to support science, but they must not become too prescriptive or they will kill the very creativity that allows us to punch well above our weight. At present, the Government are getting it about right. Investing in Catapult centres is an excellent example of how the Government can give researchers a steer, without direct interference, and I hope that that will continue. It is right that we put up the money, but it is also right that it is the scientists who decide how it is spent.
We have an excellent record of investment in science in this country, but I want to highlight one or two things. The relationship between Parliament and the science community is as good as it has ever been. Yesterday we saw an excellent event—Voice of the Future—at which the Minister spoke. As part of that collaboration between the Royal Society of Biology and the Science and Technology Committee, young and early-career scientists were invited into Parliament to quiz those responsible for directing how Parliament and science interact. Another example of that relationship will come next week, when I host SET for BRITAIN—the science, engineering and technology for Britain competition—where young and early-career scientists will have an opportunity to highlight their work at a poster competition, with the potential to receive significant recognition and prizes.
As I said, the landscape for science looks good in the UK, and the Government are showing genuine support, but I cannot let this opportunity pass without highlighting one or two areas that still need addressing. As was highlighted in both previous contributions, the amount we spend on science in the UK is well below what our international partners spend. We are the fifth largest economy in the world, but all the other major economies are spending considerably more than us. We can take a simple step towards rectifying that by aiming to spend 0.7% of our GDP on R and D by 2020, rather spending 0.5%. That is a figure we have committed to spend in other areas, and we could certainly commit to spend it on science. We know that that makes sense, and we have seen how we get a return on that investment. I would like the Government and the Minister to take that thought away.
My final point is about how we inspire the next generation of scientists. In a recent report, the Royal Society identified a skills gap, noting that we will need 1 million new engineers, scientists and tech professionals by 2020. The Government are doing something through their apprenticeship programme to help fill that gap, but we need to do more to inspire young people to see science as a career for them. One way we could do that is by getting the Government to facilitate greater working between schools, the learned societies, the professional bodies and STEM businesses, so that we can take real-life examples of how science works in society into our educational establishments and inspire young people about science at an earlier age.
The settlement goes a long way towards ensuring that we continue to be an economic and scientific powerhouse, and I commend the Government for their actions.
We meet for this debate at an auspicious moment. According to this morning’s Financial Times,
“Grey hairs, monobrows and poorly judged comb-overs could be consigned to history after research led by British scientists revealed how our genes affect hair growth on the human head and face.”
That, if evidence were needed, is a sign of the continuing health of British science. However, it takes funding for British basic science to produce publications that can, in time, lead to the wealth-creating, job-generating businesses of the future. I am, therefore, broadly supportive of the Government’s continuing commitment to the science budget, but there is much more we can do when it comes to Government support for science, for knowledge transfer and for greater private sector involvement in R and D.
First, however, let me set out some history. When the last Labour Government came to power in 1997—happy days—we found, as we always do, that the Conservative party had decimated the British science base. Laboratories were falling apart, basic funding was slashed, support for R and D was pathetic, and the space programme was in chaos—the usual. Over 13 years, primarily under the leadership of Science Minister Lord Sainsbury, and with the support of Chancellor Gordon Brown and investment from the Wellcome Trust, the Labour party rebuilt Britain’s science base.
The UK innovation investment fund was created to back technology entrepreneurs, the science research investment fund was created to tackle the backlog of under-investment in facilities, and the higher education innovation fund was created to incentivise universities to transfer their knowledge into industry. The result has been a golden age for British science, with great discoveries such as the Higgs boson; the Rosetta mission; an end to the brain drain; and world-class, well-resourced universities carrying out cutting-edge work.
My hon. Friend makes a really important point, and the work Lord Drayson did was absolutely instrumental in those achievements. Does my hon. Friend agree that that 10-year science plan gave all institutions and companies the time they needed to invest with certainty and confidence, because the ecosystem was steady for the entire decade?
My hon. Friend makes a powerful point. The Science and Technology Committee report makes a point about the innovation lag, and the investment my hon. Friend talks about yielded extraordinary results afterwards. So successful was the Labour party’s science policy that the pressure group Save British Science had to go into liquidation—its work was done.
When the coalition Government came to power, they ring-fenced a flat-cash science budget. They cut the capital budget by 40% and then reversed the cut. Those were not the long-term, sustainable decisions our science base needs. Today we have heard that the capital part of the science budget stands at £1.1 billion a year, and that will be protected in real terms until 2021. However, I share the Science and Technology Committee’s concern about the UK falling behind our competitors in R and D investment. I agree with the Committee’s plans for a road map to take us towards R and D investment of 3% of GDP and up to the Euro norm. I agree very much with the hon. Member for Oxford West and Abingdon (Nicola Blackwood) that spending on science is not a subsidy but an investment.
This limited debate offers us a broader opportunity to think about the role of the state in creating the wealth of tomorrow. A decent science policy should set out how a supportive, collaborative and inventive state can generate not only the basic science, but the knowledge transfer and institutions for innovation that are fundamental to a high-wage, high-skill economy. Wages for jobs in the knowledge economy are higher—in 2013, they were in fact 40% higher. If the knowledge economy made up one third of jobs in Britain, we would create an extra 2.4 million better-paid jobs.
While the Business Secretary is a market fundamentalist and a minimalist-state zealot—my hon. Friend the Member for Hartlepool (Mr Wright) spelled out brilliantly the failure of his negotiation strategies—and the Chancellor is eyeing up further spending cuts, I am very glad that the Science Minister has outed himself as a supporter of Mariana Mazzacato’s work on an entrepreneurial activist state. Publicly funded research and development has a strong multiplier effect in that it crowds in private sector, charitable and inward investment. We all know the stories of Stanford University and Xerox, and the National Science Foundation and Google. From hi-tech to bio-tech to nanotech to green-tech, we will succeed in these sectors only with a state committed to driving innovation, research and knowledge transfer.
Let me briefly lay out a few areas of concern. The first is how other Government Departments use their science budgets, where we have seen a real cut in terms of science expenditure. This money is not ring-fenced and there is very little strategic approach to how it is utilised. In the United States, departments use their money effectively for areas of strategic direction. We need a lot more of that across the UK Government.
Secondly, as my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) spelled out, the Government’s regional approach to science spending is a mess. I applaud the Chancellor’s investment in Manchester—a city that likes to think it was the birthplace of the industrial revolution, when we all know that Josiah Wedgwood pioneered that in Stoke-on-Trent, at Etruria. But beyond the Irwell, the level of investment in regional universities and laboratories, and indeed in the Catapult centres, is pathetic. In 2013, 52% of total UK R and D expenditure was in the south-east. The Government are pump-priming the silicon tech, silicon roundabout in Old Street, and the Olympic park in the east end, but it would do much more if it supported organisations such as the Lucideon research facility on ceramics in my constituency.
Thirdly, as the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) suggested, we need to work much harder on getting young people into science and technology subjects. I wish the Government would stop pretending that careers advice does not matter and get a grip on that area. We face a crisis in getting high-quality maths teachers into high-poverty areas in order to allow young people to pursue a career in science. As my hon. Friend the Member for Hartlepool suggested, we must also do something about supporting the growth and development of technicians.
Finally, while I do not wish to intrude on internal family disputations, it is clear that our place in Europe is absolutely fundamental for the continuing support of our science base. Only this week, 50 biotech and pharmaceutical chief executives reminded us of the importance of remaining inside the European Union if our life sciences sector is to continue to grow, saying:
“Not only would an exit from the EU negatively impact on the life sciences sector, but changing the current arrangement would lead to disruption, expense, and significant regulatory burdens.”
We have to make sure that we remain in a reformed European Union, but if we want to get more out of our investment into UK science, we also need much more concerted belief in, and support for, a truly entrepreneurial state.
It is a pleasure to speak in this debate, following the Committee’s report on the science budget.
Members will be aware that there has always been strong evidence for the link between spending on research and development and the productivity of our economy. The UK’s economic growth depends on its ability to innovate, and investing in innovation is essential in order to strengthen the UK’s competitive advantage and maintain and grow the UK’s share of the global market.
As my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) said, investment in science is also an effective way to invest public money to drive economic growth. Every £1 spent by the Government on R and D increases private sector productivity by 20p per year in perpetuity. As the Department for Business, Innovation and Skills highlights in its own report, Government R and D investment leverages in for that £1 investment an average £1.36 in private investment. Government investment also provides a productive environment for research generally. For example, although Cancer Research UK does not receive any Government funding for research, it depends on Government’s investment in UK science to create a supportive environment for that research. For these reasons and many others, we on the Committee recommended that the Government produce a long-term road map for increasing public and private R and D in the UK to 3% of GDP. Businesses need as much certainty as possible when making substantial commitments to long-term investment, and a robust road map will help to deliver that.
The spending review showed that the Government have listened to concerns from the science community, with the protection of science resource funding in real terms at its current level, to increase in line with inflation for the rest of this Parliament. Members will know that this is a better deal than the flat cash settlement in 2010, which, owing to inflation, caused the real value to fall. While inflation is very low—in fact, nearly zero—it may not seem as though this is a terribly dramatic commitment, but, again, it provides economic certainty. China is going through a period of economic turmoil and the European Union is still in the doldrums, so the Government are showing that the UK is a great place to invest.
However, despite moves to deliver on the £6.9 billion commitment in the Conservative manifesto, and the stability and confidence created by the new ring-fence, investment in the science base is still low compared with that in other leading scientific nations. Fortunately, the UK science industry is rightly recognised for the superb quality of its research. While representing only 0.9% of the world population, it produces 15.9% of the top-quality research findings. A productive research environment must have Government investment in science capital and resource. However, the work is far from over. We need to do more to reap the benefits of our research in order to convert the research findings into the commercial, both for products and services. This is not an easy task to accomplish. It requires more than a protection of budgets, as was highlighted in the Dowling report. We must reduce the complexity of support systems to provide clear advice on funding, as the Government recognised and supported in their response to the Committee.
Like many, I was pleased that following the spending review, the Government will take forward the recommendations of the Nurse review of research councils, which, subject to legislation, will introduce a new body—Research UK—that will work above and across the seven existing research councils. While welcoming the Nurse review, we need to be mindful that the Dowling report highlighted how complex a system can become and the need for simplification, or “hiding the wiring”. The integration of Innovate UK and the proposed Research UK has the potential to strengthen collaboration between the research and commercial sectors but, as with everything, there must be clarification of what decisions will be made at the research council level and what decisions are to be made by the new overarching body. Long-term and stable Government investment will help to foster partnerships between industry, research organisations, charities and international partners. These relationships need the confidence that this Government are bringing by delivering economic recovery and the good deal in the science budget.
Beyond the science budget, several Government Departments finance research and development with an un-ring-fenced budget. This highlights the importance of having a chief scientific adviser for every Government Department, or at least access to one. With devolution, we ought to take the opportunity to look at other models such as that in Germany to see whether its Government structure, though different from ours, offers any guidance. In Germany, individual states have scientific advisers. I look forward to seeing how devolution enables city regions such as Greater Manchester to take the best scientific advice and focus on supporting our fantastic universities, institutes and industries, perhaps with each city region having its own dedicated scientific adviser. There is increasing specialisation in the UK whereby every business and organisation focuses on what it does well. For example, as the UK pharmaceutical industry concentrates itself in the triangle linking Oxford, Cambridge and London, we need to recognise the importance of gaining critical mass for particular industries in other areas of the UK.
The Greater Manchester area has a fantastic history as a global player in the mass spectrometry industry, inspired by John Dalton’s work in Manchester on atomic theory in the late 18th and early 19th century. Coincidentally, that is also the industry to which I belonged before coming to this place. We are rightly proud that, in addition to our many other industries and organisations, the National Graphene Institute will make Manchester a leading centre of graphene research and commercialisation, and secure jobs for the future.
As our economy continues to strengthen, we need to ensure that our science base keeps pace with it. I am pleased that the spending review has been well received by UK scientists, but, without increased investment in R and D, the UK risks losing its position at the forefront of global research, particularly given the intense international competition. That is why I urge the Government to create a science road map that stretches beyond the electoral cycle. A commitment to that road map would give much valued certainty about investment, which it sometimes takes decades to deliver, and act as a mechanism for the whole R and D community to challenge political parties to commit to it in their manifestos.
At the outset, I congratulate the Chair of the Science and Technology Committee on her determination to publish its report on the science budget before the comprehensive spending review. That no doubt contributed to the Chancellor’s announcement that the science budget would be maintained for the duration of this Parliament.
Although the settlement was greeted with relief by many in the scientific community, that was only because they had feared much worse. Government investment in science is pitifully poor. Since 2010, the science budget has been frozen in cash terms, leading to a real-terms drop of 10% over the last Parliament. By 2012, UK Government investment in science had fallen to an embarrassing 0.44% of GDP—less than any G8 country has invested in R and D in the past 20 years.
Despite that fact, the UK remains one of the best places in the world to do science, but how can that position be maintained when countries such as Japan and South Korea are pumping money into their research establishments? They have created an environment that allows science to flourish, and it is no surprise that their economies are also booming. If we are not careful, we risk losing the lead in cutting-edge science. When the Universities UK spokesperson, Dr Dandridge, addressed the Science and Technology Committee, she said that long-term under-investment of publicly funded research in the UK is leading to an erosion of capacity.
The Scottish Government have already recognised that erosion and have sought to mitigate the impact—subject to the reserved nature of Research Councils UK and Government research and development spend—by increasing their expenditure on research and knowledge exchange by 11% in the year 2013-14, yielding a rise of 38% since 2007. I ask the UK Government to do likewise.
As a physicist, it was a pleasure to visit CERN with the Committee last week. It is a wonderful example of international collaboration. Many may wonder about the wider impact of the facility, which is known for its work on particle collisions, but, in order to promote and carry out such high-level experiments, technology has been developed and innovation has flourished. The facility gave birth to the world wide web. Particle acceleration and focusing technology have led to medical developments such as proton beam therapy for cancer. For me, however, one of the most exciting projects at CERN is the development of high-temperature superconducting materials, which will allow current to flow with zero resistance, and have major implications for global energy supply.
There are many physicists, engineers and technicians from the UK working at CERN, including Aidan Robson from the University of Glasgow, who was a member of the team that discovered the Higgs boson. However, when we were shown the total number of personnel, it was rather disappointing to see that there were only 900 from the UK, compared with 1,500 from Italy and 1,300 from Germany. When I asked why that was, I was told that Italy is more serious about science. A new type of particle accelerator is currently being developed at CERN, but it might be built in Japan because the Japanese Government are willing to contribute 50% of the costs. That is how a Government demonstrate that they are serious about science.
Recent work, most notably by Professor Stephen Watson at Glasgow University, has pointed to the significance of the infrastructure spend component of UK Government investment, but there is a huge mismatch between the spend for the so-called golden triangle and that for elsewhere in the UK. Infrastructure investment is known to play a key role in driving scientific discovery and, crucially, in attracting business investment. No one would deny the impressive nature of buildings such as the Crick Institute in London, and I look forward to seeing it up and running. However, such a facility means that private investment will flow into a narrow geographical area. The Government must, therefore, map out investment, both thematically and geographically—that has never been done before—to ensure that pockets of excellence are allowed to grow throughout these isles.
I appreciate the hon. Lady’s point about where we invest in, encourage and support science, but often the money and resources follow the expertise, so if there are great centres in a particular location, business and Government will, naturally, invest in them. The reason the Italians have a particular interest in CERN is that they have a great speciality in particle physics, which our country does not emphasise so much. We look at different areas.
There is no reason why the UK should not be a world leader in particle physics as well. Our infrastructure and environment must allow those skills and talents to be developed.
My final point relates to the proposal to give loans rather than grants to industry-based research, which has sent a chill through research-intensive industries such as the pharmaceutical sector. The UK is in a global competition to attract industries to carry out R and D here. The proposals could put the UK at a serious competitive disadvantage, and we run the very real risk that companies will move their R and D abroad.
In conclusion, I have several questions to pose to the Minister. First, does he agree that more, not less, investment in blue-sky scientific research is needed? Will the Government commit to increasing science spending to 3% of GDP, which is the EU target, as recommended in the Select Committee report? Secondly, will the Government commit to reviewing infrastructure spend on science to ensure that the talents of the scientific community in all parts of the United Kingdom are properly supported? Finally, will the Government abandon their hare-brained plan to replace research grants with loans?
I congratulate all members of the Science and Technology Committee on their excellent report. I especially congratulate the Chair of the Committee, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), who has led us through it so eloquently. The report has hit the nail on the head. As the Chair of the Committee has said, science is vital to securing Britain’s future prosperity, research and development. It not only underpins our economic position, but helps to secure our wellbeing and health, by contributing to potential medical breakthroughs in the treatment of cancer and heart disease and even in the eradication of grey hair, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) has mentioned. I was reminded of that at the event I attended yesterday, “Voice of the Future 2016”, which the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) has mentioned. That event was an opportunity for young scientists and engineers to questions parliamentarians, and the Minister knows all about it because we were both there for the question and answer sessions towards the end of the day. It was gratifying and inspiring to hear that there is such support for science among our young people.
If only the Government were equally supportive. Unfortunately for us all, the Department for Business, Innovation and Skills, where the levers of growth in the Government are found, suffered a further 17% cut in the November spending review. Much was made of the protection of the £4.7 billion science budget until the end of the Parliament in 2020, and Ministers seemed to be especially proud of protecting the science capital budget of £1.1 billion until 2021. I was pleased to be reminded by my hon. Friend the Member for Hartlepool (Mr Wright) that some other Departments did better. For example, the Ministry of Defence, the Department for Transport and the Department for Communities and Local Government—as far as housing was concerned—secured a more favourable capital spend. However, I would be the first to concede that many in science and industry breathed a sigh of relief at that settlement; after all, I think they were expecting much worse.
The situation could have been so much better. As we have just been reminded by the hon. Member for Glasgow North West (Carol Monaghan), flat cash settlements eroded the ring-fenced, non-capital science budget by £1 billion in real terms in the previous Parliament. If we discount the introduction of the global challenges fund, which is geared to overseas development and has many strings attached, we are dealing with another flat cash settlement that will create a serious real-terms decline in funding.
The fact remains that £4.7 billion is only 0.49% of GDP, which pales in comparison with our competitor nations. The UK Government’s spending on R and D is the lowest among the G8 countries. As the Minister knows, the Royal Society has called for investment in R and D to be increased to 0.67% of GDP, to match the OECD average. The CBI has called for it to be doubled to around 1% of GDP. That is because, as the former director general of the CBI remarked last year, we are falling ever further behind our international competitors, and we must take action to ensure that we lead from the front.
I agree that the output is good, but surely that makes the case for more investment in the science budget, not less.
As the Select Committee pointed out, the UK has fallen behind its competitors in total R and D investment. If that trend is not reversed, it will put UK competitiveness, productivity and high-value jobs at risk. The Committee recommended increasing public and private R and D investment to 3% of GDP. The current position is about 1.6% of GDP. We have heard about how much less we spend than our competitor nations, and we have a serious problem of underfunding.
My hon. Friend the Member for Hartlepool and the hon. Members for Oxford West and Abingdon and for Bolton West (Chris Green) have all cited compelling figures. As they have mentioned, there is much value in using public funding to leverage private money and increase productivity, so why not commit to more funding and lever more from private industry? We are not seeing the level of industry funding for R and D that we need. I welcome the comments by the hon. Member for Oxford West and Abingdon and my hon. Friend the Member for Hartlepool on scaling up investment, not just start-up investment.
In their response to the Committee’s report, the Government mention Innovate UK and the Catapult network, which aims to strengthen R and D capacity and encourage innovation. I commend them for that development. As we have heard, however, £165 million of UK grants to Innovate UK for turning scientific research into commercial applications have been axed and replaced by loans. That creates additional risks for researchers and is liable to damage innovation. Both the CBI and the Federation of Small Businesses have raised concerns. I repeat the call that has been made: on what evidence has this decision been based? Do the Government believe that turning grants into loans will benefit innovation and encourage companies to invest?
On the subject of the Catapult network, why does the north of England do so badly when it comes to Innovate UK funding? The north-west did not have a single Catapult project until late last year, while Yorkshire and the Humber gets about 5% of total funding. How can that be right when the south-east gets 52% of it? As several hon. Members have said, what we need from the Government is a proper road map to outline where are we are going with research and development. Let me add that any road needs to go to the north, not just stop at the M25. It is unclear what the Government are trying to achieve in the long run. What is their plan? Can they see the wisdom of increasing R and D funding as a proportion of GDP to something approaching that of our competitors? Nowhere in their response to the Committee’s report is that made clear.
As hon. Members have said, we have a lot to be proud of in this country. The UK is very good at research—we have heard many of the figures—and we in fact gain hugely in that regard from our membership of the EU, as my hon. Friend the Member for Stoke-on-Trent Central said so eloquently. Scientific development and innovation are critically dependent on collaborative ideas and contributions. The EU helps universities to pursue cutting-edge research. It also makes working across borders easier for UK and European researchers pooling their knowledge, infrastructure, data and resources. In fact, the UK does disproportionately well in securing EU funding. During the last period, we received €8.8 billion in direct EU funding.
We also need to ensure that the UK Government are fully behind the science research project. Flat cash settlements for R and D do not help; nor do Cabinet Office missives suggesting that scientists in receipt of Government grants should not try to influence policy. Whatever happened to the idea of evidence-based policy making? The muzzling of some of our finest minds will not help. Above all, we need a Government who have a sense of the future potential of science funding. That is why everyone has talked about the need for a road map, which is the most important missing element. Unless we have a sense of where we are going, we will fall further and further behind our competitors, instead of reaching for the stars like Major Tim Peake.
I thank my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) for her Select Committee’s important work. I will use the time available to address some of the concerns of the Science and Technology Committee and to respond to some of the points made by hon. Members.
First, it is right to remind ourselves of and to celebrate the landscape in which the Government’s plan for science and research lies. As hon. Members have mentioned, the UK’s global scientific impact far exceeds our size as a nation. With just 3.2% of the world’s R and D spend, the UK accounts for 16% of the most highly cited research articles—we have overtaken the US to rank first among comparable research nations for our field-weighted citations impact—of which we should all be extremely proud.
That is why science and research very much sit at the very heart of this Government’s economic plan. Last July, our productivity plan clearly set out how we will tackle the UK’s long-term productivity problem, with science and research being central to our proposed solutions. This autumn’s spending review settlement was an emphatic confirmation of that commitment: an extension of the ring fence around science and innovation until 2020 means a total investment of £30.4 billion during this Parliament.
The ring fence has been a powerful indication of the Government’s commitment to science, and we will continue to protect science resource funding in real terms for the rest of the Parliament. We are building on the safeguards put in place for the science budget in the last Parliament. That will mean a decade of protection and of sustained investment by the Government. All that of course comes in the context of significant savings in other areas of Government expenditure, which is a clear sign of the important place of science in our decision making.
The Science and Technology Committee has called for a road map towards a 3% R and D spend. As my hon. Friend the Member for Oxford West and Abingdon knows, decisions on increases in the science spend are taken in spending reviews, when it is weighed up against the other priorities for the nation. My hon. Friend the Chair of the Science and Technology Committee also asked about allocations. We have discussed indicative allocations with our partner organisations. They are very much aware of their likely settlements, and I assure her that we will publish the allocations imminently.
My hon. Friend asked about the next steps in the implementation of the Nurse review and our thinking about the proposals we outlined in the Green Paper. As I am sure she will have appreciated, we consulted very carefully on how best to proceed, with a proper 10-week consultation. Although I understand her impatience to know how we will take all the proposals forward, it is important that we do so in a deliberative fashion and get these important decisions absolutely right. The consultation period ended only on 15 January and we will come forward with our full response in the spring.
In the meantime, I hope that I can give my hon. Friend the assurance she seeks from the Government by saying that we will maintain the spirit of the dual support system, which is so important to our research sector, alongside the continuation of the important Haldane principle, which ensures that decisions about which research to fund are taken by scientists through competitive peer review processes. To deal with her concerns about the operation of the dual support system in a bit more detail, it is possible to ring-fence or hypothecate separate funding streams, even when they are delivered through a single body. That is a model that the Government can and do use effectively, and that could ensure the continuation of the dual support system in a reshaped landscape.
The Chair of the Business, Innovation and Skills Committee, the hon. Member for Hartlepool (Mr Wright) raised concerns about the move from grants to loans which were echoed by the Opposition spokesperson, the hon. Member for Makerfield (Yvonne Fovargue) and by the hon. Member for Glasgow North West (Carol Monaghan). We will market-test the proposed new financial products in the spring. We want to broaden the types of financial support that are available for innovation in this country. BIS and Innovate UK are studying the financial models that are operated by our international counterparts in respect of innovation. It is clear from our analysis of what is going on around the world that the most successful models are increasingly emphasising other financial products in their policy mix as a supplement to their grant funding, which will always have a place.
We want to ensure that the overall funding through Innovate UK evolves and that the spectrum of products diversifies to reflect the different needs of different companies at different stages in their lifecycle. Overall funding will increase from £311 million in 2009-10 to £471 million by 2019-20. That figure includes the new finance products.
My hon. Friend the Member for Bolton West (Chris Green) rightly echoed the Dowling report’s recommendation that we seek greater simplification of the innovation landscape and support system. We will certainly take that core recommendation into account as we develop the thinking on our national innovation plan.
I want to emphasise three commitments in the spending review and ensure that the House understands their importance. The first is our commitment to protect science resource funding at £4.7 billion. This is the lifeblood that powers our world-leading science and research base. It funds vital blue-skies research, fuels the Bunsen burners and afterburners, and funds labs up and down the country, the research councils and the national academies, thereby making sure that Britain stays at the leading edge of global science.
At the same time, we are delivering on our manifesto commitment and investing in new commitments on a record scale, with £6.9 billion for capital expenditure. That means new research institutes and laboratories across the UK. It has been one of the greatest privileges as Science Minister to break ground on new institutions such as the imaging centre of excellence at the Queen Elizabeth university hospital in Glasgow. To answer the hon. Member for Glasgow North West, I hope that that demonstrates the Government’s commitment to ensuring that we fund excellent science wherever it is found in the United Kingdom.
Through our science and innovation audit, we want to encourage areas that have not received much science funding relative to other areas to come forward with proposals that we can support when we feel that they have the potential to be excellent and to do great science. We want more such proposals.
The third matter that I want to consider is the global challenges research fund. We have committed an additional £1.5 billion to the fund by 2021. It will keep the UK at the forefront of global research, leading the way on major global challenges, such as Ebola, in which we have always played a significant role. The value of the GCRF is not just what the UK can do alone. We have some of the world’s most talented scientists, most prestigious universities and most advanced laboratories, but the most significant breakthroughs in science and research are bigger than just one country.
That brings me to the points that the hon. Member for Stoke-on-Trent Central (Tristram Hunt) made. I am glad to have his general support for all the spending review commitments that I have briefly summarised. They will give the science community the certainty that it needs for the years ahead. Like the hon. Gentleman, I recognise the important role that public sector investment in science plays in stimulating private sector investment. Other Members have already cited the crowding-in effect, which we estimate at about £1.36 for every £1 of public investment.
The hon. Member for Stoke-on-Trent Central is also clearly right about Europe. Science today is increasingly cross-border and collaborative. I have made my position clear, as have the Government: UK universities and our superb science base are key to our future as a knowledge economy, and we and they will be much stronger inside the EU. That is best for our research. Almost half of all UK research publications involve collaborations with other countries. Papers involving international collaboration have almost twice the citation impact of those produced by a single UK author, and EU countries are among our most crucial partners, representing nearly 50% of all our overseas collaborators.
Staying in the EU is best for our students. Our links with Europe are deep and long standing. Free movement of people makes it easier for our universities to attract the best talent, and for British students to spread their wings across the continent. Lastly, it is best for our funding. The excellence of our research base means that it is no surprise that the UK is one of the most successful players in EU research programmes.
Is not it the case that we collaborate a great deal with the United States of America, which is not a member of the European Union? Would not any British Government want freedom of movement of expert people to our universities, whether we were in or out of the EU?
My right hon. Friend is right—the partnerships are not exclusive, but why turn our back on great collaborations that benefit our science base tremendously?
The UK received €7 billion under the last framework programme, which ran from 2007 to 2013. That made us one of the largest beneficiaries of EU research funding. In this funding round, Horizon 2020, we have secured 15.4% of funds, behind only Germany on 16.5%, and with the second largest number of project participations.
As science becomes more international, we should nurture partnerships, not reject them. In the end, the British people will decide whether we are safer, stronger and better off as part of the EU, but, to thrive in a knowledge economy, there is no doubt that we need to build academic partnerships, not turn our backs on them.
The debate has been not only consensual but of high quality. The Chair of the Select Committee on Business, Innovation and Skills is right to say that we are in the middle of a fourth industrial revolution founded on science and technology and that the only sensible approach is to increase R and D investment. My hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), who has been such an outstanding champion for science in this place, is also right to say that, as a nation, we have a long and illustrious history of scientific endeavour and we would be foolish to take any steps that undermined the proven Haldane principle on which it is built.
Relief will have swept through the corridors of both Houses at the groundbreaking news brought to us by the hon. Member for Stoke-on-Trent Central (Tristram Hunt) that the days of the comb-over and the unibrow are numbered. My Committee colleague, my hon. Friend the Member for Bolton West (Chris Green) was right to highlight Dowling’s recommendations—they have yet to be responded to by the Government—on simplifying the achingly complex science and innovation support system. The hon. Member for Glasgow North West (Carol Monaghan) joined other Committee members when she said that we need a more strategic approach to geographic allocation of capital investment, and I thank the Minister and the shadow Minister for their responses.
On the necessary deliberation and response to the Green Paper, and the fact that the consultation period only ended in January, I gently remind the Minister that the Government have chosen to respond to Dowling, the Nurse review and the Green Paper as one. Those reports came through before Christmas, and there has been quite a long delay for the scientific community in waiting for them.
As the hon. Member for Stoke-on-Trent Central so eloquently said, we are in a golden age of British science. That is in no small part due to the championing of science by the Chancellor and successive Science Ministers, but there is no room for complacency. We must be mindful of the investment time lag, and acutely conscious that science and innovation will lie at the heart of our success as a nation. That is why I will simply restate that it is time for a step change in our investment in R and D. I call on the Government to ensure that our strategic capital investments are fully resourced so that we can sweat our assets, and I restate our key recommendation, which is the publication of a long-term road map to increase public and private R and D up to 3% of GDP. That strategic investment will create jobs, increase productivity, attract inward investment, and fund the groundbreaking discovery that is necessary to fund the great global challenges of our time.
Question deferred (Standing Order No. 54).