24 Jun 2015 : Column 257WH

24 Jun 2015 : Column 257WH

Westminster Hall

Wednesday 24 June 2015

[Albert Owen in the Chair]

Science and Research

9.30 am

Paul Blomfield (Sheffield Central) (Lab): I beg to move,

That this House has considered science and research in the UK and regional economies.

I am delighted to do so with you in the Chair, Mr Owen, and I take this opportunity to welcome the new Minister for Universities and Science to his job. I am looking forward to having many engagements with him on issues relating to higher education.

I move this motion as a Member representing a city whose wealth was built on innovation, from Benjamin Huntsman’s invention of crucible steel production in the 1740s to Harry Brearley’s invention of stainless steel in 1912 to the work today of Sheffield University’s Advanced Manufacturing Research Centre. Science, research and innovation have driven our city’s economy, just as they have for the country as a whole.

However, we face a challenge, because a generation ago the UK was one of the most research-intensive economies in the world and now we are one of the least. We have slipped from leading the OECD countries in research and development spend as a percentage of GDP in 1979 to our position now, where we trail behind all our competitors. The US invests 2.8% of its GDP in research; on average, OECD and EU countries invest 2.4% of their GDP in research, but the UK now spends only 1.7% of its GDP on research. That is less than half the 3.9% of its GDP that is invested by South Korea, which, as a result of that investment, remains a major manufacturing nation.

Where have research and innovation been lost? Most strikingly, they have been lost within the private sector. The old world of R and D was dominated by the big companies—the likes of GEC and ICI—and their loss took out big chunks of our innovative capacity. The obsession with short-term returns for shareholders, which distorts our equity markets, has changed the attitudes of investors. The dynamic of long-term investment for long-term reward that drove the industrial revolution and built our economic strength has gone. Today there are just two UK companies among the top 100 companies around the world for R and D investment.

For some time, the impact of the decline in private sector investment in R and D was masked by the continued public sector investment of successive Governments, but that changed under the coalition, despite the best efforts of David Willetts, who occupied the Minister’s job for most of the coalition’s time in office and was a real champion of science and universities. As the Campaign for Science and Engineering highlighted in its “Science is Vital” campaign last year, publicly funded research slipped to less than 0.5% of GDP in 2012.

24 Jun 2015 : Column 258WH

Mr Andrew Smith (Oxford East) (Lab): I warmly congratulate my hon. Friend on securing this important debate. Does he agree that the situation is all the more perverse given that for the research investment that is made—particularly significantly through universities—we get more bang for our buck than other countries in citations and innovation, and therefore that if we put in more bucks we would get more bangs?

Paul Blomfield: I am grateful to my right hon. Friend for that intervention, and he makes a point that I will come back to and reflect on shortly.

The drop in our publicly funded research to 0.5% of GDP takes that research to its lowest point for more than 20 years. The latest figures, published by UNESCO in March, put the UK’s publicly funded research at 0.48% of GDP, which is well below the EU average of 0.67%, the OECD average of 0.71% and the G8 average of 0.77%.

David Simpson (Upper Bann) (DUP): I congratulate the hon. Gentleman on securing this important debate. He has dwelt a lot on the percentages and on where the UK stands in the league table, but is that situation solely down to investment and finance? What does he put it down to? What is the difficulty? He said that the UK now has only two companies that are ranked highly in the world for R and D. What is the fundamental problem?

Paul Blomfield: The fundamental problem in relation to private sector investment in R and D is the dominant culture of short-termism in investment. People are looking for quick gains, but what we need to rebalance our economy is the long-term investment that drove economic growth in this country in the first place.

Echoing the point that my right hon. Friend the Member for Oxford East (Mr Smith) made, according to a report produced by CaSE last year, “The Economic Significance of the UK Science Base”, private sector R and D output rises by 20p per year in perpetuity for every £1 spent by the Government on R and D, so there is a real return on public sector investment and it stimulates the private sector investment that the hon. Member for Upper Bann (David Simpson) referred to by raising the UK’s knowledge base.

That is the real challenge, but there are also real opportunities, because as a country we have enormous strengths, above all our universities, which are highly productive. To echo again the point that my right hon. Friend the Member for Oxford East made, despite representing only 4.1% of the global research community, UK researchers produced 15.9% of the world’s most highly cited papers in 2011, the last year for which I have figures available. That puts us at No. 1 in the world in the sector. Crucially—I make this point as a northern MP—at a time when we all share a concern about the regional imbalance of economic growth, universities are one of the few assets we have that are spread evenly across the country, and they are able to generate economic growth in all regions and all nations of the UK.

Clearly, universities draw their investment widely, from several sources, and not just from public funds. They have grown their own investment in R and D by 40% in the past decade and now generate more than £3.4 billion a year. However, public investment levers in

24 Jun 2015 : Column 259WH

other funding, and academics in receipt of research council grants have been shown to be more outward-facing and more engaged in the commercial application of their research.

The strength of that research in our universities attracts foreign investment to the UK, as well as international students. According to a British Council survey of 5,000 18 to 34-year-olds from China, India, Brazil, Germany and the US, the fact that the UK had world-leading academic research was the primary attraction for them to come here and study in our universities. Those international students bring more than £10 billion of economic benefit to the UK, including to our regional economies. I know that in Sheffield alone the net value of our international students, who are approaching 9,000 in number, is £120 million a year. Thousands of jobs depend on that money, and not just in the university sector.

Graham Stringer (Blackley and Broughton) (Lab): My hon. Friend is making a profound point about the impact that our first-class universities have on regional economic development. However, is he as concerned as I am that more than 90% of non-university research in the UK takes place within the golden triangle of Cambridge, Oxford and London, which means that, outside universities, the regions are starved of scientific investment?

Paul Blomfield: I am indeed, and my hon. Friend—a fellow northern MP, albeit on the wrong side of the Pennines—makes an important point.

Graham Stringer: I went to university on the other side.

Paul Blomfield: Indeed—I know that my hon. Friend is proud to be a graduate of Sheffield University. He makes an important point, and we need to be careful that even with the positive developments such as the Francis Crick Institute in London, public investment in research does not get sucked into the golden triangle that he referred to at the expense of universities around the country. As I said a moment ago, the great strength of our university network is its dispersal around the country. We need to ensure that funding for research is spread across the sector and across the country.

Rachael Maskell (York Central) (Lab/Co-op): York has two excellent universities. The University of York is ranked in the 10 top universities for research, and five of its departments are in the “excellent” category, right at the top of their league. Yet the relationship between jobs and growth in our city and academic achievements in research and development is not being built. Should not the two come together for economic growth across our city?

Paul Blomfield: I was a student in York and am well aware of the strength of the two universities. My hon. Friend is right; linking research with its commercial application is critical. Some progress has been made with the impact approach taken in the sector, although there is more to be done. We considered that issue in the Select Committee on Business, Innovation and Skills during the last Parliament. Although there is more to be

24 Jun 2015 : Column 260WH

done, we should recognise that a huge amount is already being done to link research and its application. I shall mention a few examples from Sheffield.

We would be foolish to lose our advantage in world-leading research, but that could happen if we do not take care. “The Plan for Growth”, published by the Chancellor and the Minister’s predecessor in December 2014, acknowledged the challenge:

“If we fail to move quickly to secure our position in a globalised world, then it is highly likely that other countries....will do so ahead of us. We not only run the risk of missing out on new opportunities, but also of losing the position of strength that we have today”.

The Government acknowledge that we can and must do more.

Innovation policy now needs to focus on developing industrial and private sector research and development capacity, building on the UK’s strong and well connected science base. It will do that by working with universities. For example, to take up the point made by my hon. Friend the Member for York Central (Rachael Maskell), the University of Sheffield works closely with Rolls-Royce, Boeing and more than 100 supply chain companies. Also in my constituency, Sheffield Hallam University secured Toshiba as the first technology partner in the Advanced Wellbeing Research Centre, designing new products to help promote the integration of exercise into people’s daily lives and address common health issues. Hallam’s new National Centre of Excellence for Food Engineering is supported by more than 40 companies, including Mars and Nestlé UK, to support growth in the food industry through improved manufacturing technology and staff capability.

Across my city, and across the university sector, science and research are creating jobs, but we could do more.

Liz McInnes (Heywood and Middleton) (Lab): My hon. Friend talks about research in universities, but it starts earlier than that. On Saturday, I was privileged to visit the excellent Hopwood Hall Further Education College in my constituency, including its excellent animal studies facility. Small amounts of research are being done there, which helps students on their path towards university. However, funding for FE colleges is being cut, and I wonder what impact that is having on the availability of fledgling research for those wanting to go to university.

Paul Blomfield: My hon. Friend makes an important point about acknowledging research taking place outside the university sector. I said earlier that foreign investment is driven significantly by countries with strong research capacity, but it is driven equally by countries that commit to the development of skills. The cuts in the adult skills budget that my hon. Friend mentions, and particularly in further education, will weaken our capacity and our potential for economic growth.

We could do much more than is being done in the examples I have given. We could build partnerships in developing infrastructure for low-carbon energy, which we could then export to the world. If we shrink away from such a challenge, China will pay for the new generation of power stations to be built and we will miss out on the opportunity to help shape our own future. We will have little leverage in insisting that some

24 Jun 2015 : Column 261WH

of the investment is spent on creating jobs in the UK, and we will pay for it through increased electricity bills for decades.

What should we do? I have three suggestions. First, let us stop making things worse. We should recognise the damage done to the UK by the structural shortcomings of our economy. Research and development is a national asset and we must not incentivise companies to do less of it, or make it harder for our universities to transform our economy.

Secondly, we must certainly not threaten the important stream of research funding that comes through our membership of the European Union, because as I am sure the Minister knows—I am sure he will endorse it—the UK does disproportionately well from European Union research funding. In 2013, for example, the last year for which data are available, we won €1.11 billion out of the €9.6 billion allocated under the seventh framework programme, FP7, which was the predecessor of Horizon 2020. Were we to exit the EU, that would clearly be at risk, at enormous cost to our universities and the communities in which they are driving economic growth. Similarly, we must not undermine the flow of talent into our country by the types of measure that we have already seen affecting students or by new restrictions on tier 2 visas. I am sure the Minister agrees with me on that point as well, although whether all his colleagues will is another question.

Thirdly, we should recognise and maintain our strengths. We should build on what we have that is positive and do more of it. The UK catapult centres, where universities and industry work together, are making an important start. At the Advanced Manufacturing Research Centre in the Sheffield city region, more than 100 companies partner with university research to win jobs and orders for the UK. Some of them are giant companies, such as Rolls-Royce, and others are the high-tech supply companies that support them.

It is not only the companies that benefit. Research demands skills, and more than 600 young people are now training as advanced apprentices at catapult centres. They are fully funded by companies, as recognised by Times Higher Education in its widening participation initiative of the year award. Those people are working in a research environment and have the opportunity to progress to degrees, even MBAs and PhDs, all within a research setting. How was the AMRC in Sheffield built? By universities and industry working together, and through European funding and regional funding under the old regional development areas.

We should invest in other areas too, with a sense of national purpose. Our ageing society will face huge human and social costs as incurable neurodegenerative diseases such as Alzheimer’s become even more common. Social, technical and medical innovations are urgently needed to deal with this, as the NHS struggles to deliver more with more limited resources. Places such as the Sheffield Institute for Translational Neuroscience will make that possible. We know that we need to decarbonise our energy supply, but the existing low-carbon alternatives are just too expensive. Research and innovation will change that.

We also need to build capacity. The Chancellor has talked about our economy needing an “extra gear”. That extra gear is research and innovation. We need more capacity in our industry, but that will not happen

24 Jun 2015 : Column 262WH

if we do not support the research strengths of our universities. Every industry—every city and region—needs transformational research to drive the growth and wealth that we all need. In the last Parliament I served on the Business, Innovation and Skills Committee, and we highlighted that challenge in our report on business-university collaboration, in which we recommended unanimously—in a cross-party Committee dominated by Government Members—that the Government aim for 3% of GDP to be spent on R and D by 2020. Above all, I would welcome the Minister’s response on our Committee’s challenge.

We are at a crossroads. The erosion of the UK’s capacity to innovate technologically was not inevitable; it was the unintended consequence of a series of choices made over decades. But we can reverse it. If we do not, we will be condemned to continue on our trajectory of low growth and poor trade performance and will ultimately lose power over our own economic destiny. I urge the Government to recognise the vital contribution of research innovation to the UK, to ensure that we can thrive in a globally competitive environment.

Several hon. Members rose

Albert Owen (in the Chair): Order. A number of Members wish to speak, but I will call the Front Benchers, including the Scottish National party spokesperson, from 10.30 am. I will also allow a few minutes for Mr Blomfield to wind up. Mr Byrne had indicated to me that he would be late, and I will allow him to respond from the Front Bench.

9.50 am

Mark Field (Cities of London and Westminster) (Con): I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing the debate; we have worked together on a number of university and immigration issues. He made slightly disparaging comments about some Government Members’ views on immigration, but I suspect that he was not including me among them. We have worked together in particular on the importance of being an outward-looking nation and attracting the brightest and best people. That applies not only to our universities, but to many other areas that are important to research in the corporate world.

The Government correctly aspire to make the UK the best place in the world to run an innovative business or service. Instinctively, we know that to achieve that requires a strong financial sector, a plentiful supply of highly skilled people from across the globe—ideally, of course, with significant numbers of the indigenous population being trained—and progress in creating intellectual property and a thriving science and research community. All those ingredients can be found in London, the part of the country that I represent in the House. The capital’s universities have put themselves at the heart of innovation and of the drive to bring finance and business together to commercialise that innovation.

My constituency is home to three of the capital’s—indeed, the world’s—top universities: Imperial College, King’s College London and the London School of Economics. Their relentless rise in the university league tables coincides with our city’s seemingly unstoppable growth as a premier destination for global talent, capital and ideas. Just as the metropolis has married financiers

24 Jun 2015 : Column 263WH

with start-ups to create a booming tech sector, our universities have become adept at collaborating with the city’s business, philanthropic, government and research communities, and that is beginning to reap huge dividends. I am not suggesting that we should in any way be complacent; I take on board the statistical concerns expressed by the hon. Member for Sheffield Central, who made valid points.

The hon. Member for Blackley and Broughton (Graham Stringer) pointed out that there is a golden triangle, which is sadly some way south of the Pennines. The London-Oxford-Cambridge golden triangle has more science and tech workers and faster industry growth than California. In 2007, Imperial College integrated its medical faculty with St Mary’s and Hammersmith hospitals. Only eight years on, Imperial College Healthcare NHS Trust is a globally respected centre for medical research, with patients benefiting from cutting-edge care and academics able to trial state-of-the-art treatments on London’s uniquely diverse population.

Imperial is similarly collaborating with Aviva Investors on a new White City campus, Imperial West, to support science start-ups and ensure that the UK benefits commercially from breakthroughs made in its university labs. A problem going back to Victorian times is that we have cutting-edge research, but do not glean the commercial benefits once the research makes its way into general products. We clearly have to get that right. I am not suggesting that there are easy solutions, as this problem goes back 120 years. The Minister might have some bright ideas, but I would not blame him if he felt that this is a work in progress.

The plan for Imperial is that the university will soon be virtually independent of public funding. One of the spin-outs based on the campus, DNA Electronics, is already transforming academic discoveries into serious commercial propositions, offering affordable chip devices that can test for genetic diseases and drug intolerances within minutes.

Amid healthy rivalry between London’s top institutions, there are significant partnerships that we should applaud and relish. Imperial, King’s College and University College London, for example, have joined forces with the Government and others to build the groundbreaking Francis Crick Institute for biomedical research in King’s Cross. Once open, it will complement the arrival of Central Saint Martins in nearby Granary Square.

Mr Gregory Campbell (East Londonderry) (DUP): The right hon. Gentleman refers to the friendly rivalry between universities in his constituency. We need to encourage such rivalry right across the United Kingdom, so that organisations such as Innovate UK can develop and progress. Does he agree that it is in all our interests for the progress he sees in London to be replicated across the entire nation.

Mark Field: I very much agree. Perhaps understandably, there was a certain amount of cynicism when the Chancellor of the Exchequer first talked about the northern powerhouse two years ago—he represents a northern seat, albeit in leafy Cheshire—but it is none the less important. I have battled with a number of colleagues in London on both sides of the divide on the issue. I think that we should

24 Jun 2015 : Column 264WH

be investing money in High Speed 3 well before we even consider putting money into High Speed 2. There is a strong case for building high-speed rail—indeed, high-speed transport—connections between our regional centres.

We could debate the broader issue of London’s dominance. I understand why there is a lot of hostility towards that dominance, but this country has a single global city of 8 million people and a cluster of cities with populations of about 1 million. In an ideal world, we would build another city from scratch with a population of about 3 million to be a global player, to try to counter London’s dominance within the UK.

A huge amount of the investment that comes into London, however, would not come to the UK if it did not come to London. It is not a zero-sum game between London and the rest of the UK. More importantly, a huge amount of the construction and contracting work that comes in for London-related projects often goes out to the regions, not only to the Oxfords and Cambridges of this world but to Derbyshire, Nottinghamshire and many of the country’s second-tier cities—I do not mean that disparagingly—where huge amounts of work can be done.

Graham Stringer: I am grateful to the right hon. Gentleman for being generous with his time. London is my capital city, and he is absolutely right that it has technology and transport attractions that nowhere else in the United Kingdom has. However, London and the golden triangle get a disproportionate amount of scientific funding—not the universities—that could just as easily go to the regions and probably have a greater benefit. The Diamond Light Source was moved from Daresbury in the north-west to Oxford. The Francis Crick Institute, which the right hon. Gentleman mentioned, could just as easily have been placed in Manchester, Sheffield or Newcastle.

Mark Field: The hon. Gentleman makes a point that I am not sure I can necessarily answer. Given his criticisms of Oxford, he might get a kick from directly to his right, from the right hon. Member for Oxford East (Mr Smith).

Amid the great strides in technology and science, London is also an important centre for leading global research in the social sciences sphere, with the London School of Economics at the forefront. The sheer quality of research undertaken by the LSE is regularly attested by peers to be world leading. In the recent research excellence framework, the LSE was ranked as the top institution in the UK for its proportion of four-star, world-leading research. All that means that the LSE and the nation have extensive global reach, in particular within the public policy and governance sphere, to institutions such as the United Nations, the World Bank, the OECD and World Health Organisation. In the social sciences, however, it is harder to commercialise that work. Without mainly public funding, the LSE could not undertake the high-quality research that underpins its impact and provides the UK with considerable soft power globally.

In the aftermath of the 2008 financial crash, there was much feverish gossip about the pressing need to rebalance the economy away from an over-reliance on banking and finance. That task has been successfully undertaken here in the capital city, with the creative, tech, research and education sectors drawn together in

24 Jun 2015 : Column 265WH

what I regard as a virtuous circle, which in some cases has helped to spur physical regeneration. I touched on King’s Cross, a classic example of that—the Olympic site will be another. That has served only to entrench the dominance of the capital in the wider UK economy and has not addressed that rather more elusive rebalancing act: boosting the regions and other nations of the UK. As a London MP, I recognise that that is important—not least because of the ever-louder klaxon call of hostility towards London, something worrying for the rest of the UK.

The real challenge is how the rest of the UK’s universities, innovators and start-ups compete with the London and Oxbridge research powerhouse, and I look forward to hearing the views of other Members on that. One fifth of Government research funding is now claimed by our top three universities—that golden triangle—and the capital city has more than 100,000 square metres of new research facilities in the pipeline. Furthermore, the south-east and east of England and London account for some 52% of the research and development carried out in the UK.

If the Chancellor’s northern powerhouse and the broader devolution agenda are to work, he should examine how London’s universities have not just integrated academic excellence into the heart of this global city but provided a compelling educational offering to the world through the relentless building of links with the worlds of industry, commerce, Government and finance.

Several hon. Members rose

Albert Owen (in the Chair): Order. I remind Members that I will be calling the Front-Bench spokespeople at 10.30 am, and six Members have indicated that they want to speak.

10.1 am

Lilian Greenwood (Nottingham South) (Lab): It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate and on setting out so eloquently the vital role that science plays in his city, across the north of England and in the wider UK economy.

My hon. Friend demonstrated clearly the need for policy that supports an environment in which research can flourish. His concerns are clearly shared by colleagues across the UK, including in Nottingham and the wider east midlands, where they are felt not just by people working in our universities but by businesses large and small, and our local enterprise partnership, D2N2. Everyone recognises the key role that science—the life sciences, in particular—has to play in the future success of our region.

Our local authorities are also keen to promote regeneration and the creation of good jobs, and have identified the potential for science and technology to be leading sectors driving growth in our economy. But local and regional success requires national support, and the UK cannot meet the economic, health, security and environmental challenges facing our society without a Government who champion science and research.

My hon. Friend has already set out how Government investment in science and research creates a virtuous circle, leveraging investment from industry, raising

24 Jun 2015 : Column 266WH

productivity and creating more high-value jobs. Quite simply, if we want to grow the economy and make the UK globally competitive, investing in science and research is an effective use of public money. Indeed, a failure to commit to future investment will not only break that beneficial cycle, but undermine the UK’s competitive advantage and damage our economic outlook. Any Government who were serious about long-term economic planning would not be cutting the science budget, yet, unfortunately, over the past five years that is exactly what has happened.

As my hon. Friend said, the “Science is Vital” campaign has highlighted the fact that freezing the science budget disbursed annually to universities and research institutes in cash terms means that its real value has fallen by around 15% since 2010—a decline that puts the UK firmly at the bottom of the G8 on Government support for science. In the UK, university research makes up a higher proportion of total R and D compared with our competitors. Far from crowding out other investment, that Government support attracts outside funding in; as my hon. Friend said, UK universities themselves have grown their own R and D investment by 40% in the past decade. We also have a very efficient research base, producing a much higher proportion of highly cited publications than might be expected. We punch above our weight.

A 2014 analysis paper by the Department for Business, Innovation and Skills recognised, however, that the UK’s long-term pattern of under-investment in public and private research and development was holding the UK economy back, and concluded that

“a level of R&D spend consistent with securing future economic success is likely to be closer to the 2.9% average of our comparators. Public sector expenditure may need to rise more sharply in the short-to-medium term, partly to develop the necessary talent and partly to catalyse private sector investment.”

Last December, the Business, Innovation and Skills Committee reached a similar conclusion, recommending that the Government aim for a target of 3% of GDP to be spent on R and D by 2020. My first question is, how will the Minister ensure that the UK does not fall further behind or miss out on new opportunities, thereby risking the strengths that we have?

This is not simply an issue of the UK’s place in a global race; it is also a local issue—one that matters directly to my own constituency. Nottingham’s strength, particularly in life sciences, is long standing and well recognised. We have two world class universities, in the University of Nottingham and Nottingham Trent University, and one of the largest teaching hospitals in Europe. We are proud that BioCity, the largest bio-incubator in the UK, was established there in 2002, as a unique collaboration between our universities and the East Midlands Development Agency. It now sustains more than 650 employees working for around 70 companies on its main site, undertaking innovation and turning science into economic propositions.

Those more recent developments build on our heritage. Nottingham has been home to Boots for more than 150 years. Its Lenton headquarters and manufacturing and logistics centres make it one of the largest private sector employers in the city. The development of the Nottingham enterprise zone, which includes the Boots site, provides huge opportunities for future growth, and MediCity, a collaboration between Boots and BioCity

24 Jun 2015 : Column 267WH

designed to support innovators in consumer healthcare, medical technology, diagnostics and beauty products, is already home to 40 start-up companies. Just last week, the D2N2 local enterprise partnership approved a £6.5 million grant of local growth fund towards a new state-of-the-art life sciences complex being built by Nottingham City Council to expand BioCity and create hundreds of new jobs in the city.

I welcome that and other Government-backed investment in capital infrastructure, but although high-profile announcements sound good and the strategic commitment to new facilities and equipment over the period 2016 to 2021 is welcome, without sufficient resource funding such new facilities will not meet their potential. Nottingham has all the building blocks in place, but adequate Government support for research remains critical. As has already been said, it is a question not only of the total value of research support, but of its regional distribution; my hon. Friend the Member for Blackley and Broughton (Graham Stringer) made that point forcefully.

Glenn Crocker, chief executive officer of BioCity, has also highlighted the fact that London and the south and east of England continue to receive a disproportionate share of investment, both public and private. If the Government are serious about economic rebalancing—that is about not just a northern powerhouse, but the midlands—that needs to change. I hope that the Minister will set out how he intends to address the distortion and ensure that Nottingham, which certainly has the people, facilities and strong and viable business propositions, also gets the financial support it requires to build the thriving technology sector to which we aspire.

As an MP without a background in science, I have been fortunate enough to participate in the Royal Society’s pairing scheme, and the opportunity to build links with practitioners has been very valuable. I approached my former pairs for their views before today’s debate, and one thing that they expressed was that concern about resource funding. As physics professor Philip Moriarty succinctly put it:

“There’s no point funding bright shiny new pieces of kit if there aren’t researchers there to use it”.

I would like to say more about the Medical Research Council Institute of Hearing Research at the University of Nottingham, which I visited last week, its huge contributions and how it operates in a multidisciplinary environment, which is one of the most important aspects of our universities and can be a catalyst for new thinking. People may remember the story that appeared in the press about a 10th-century potion for treating eye infections, which was discovered by an Anglo-Saxon expert from our school of English. It was tested by bio-medics and found to be successful in tackling MRSA, which scientists have been trying to do for some time. The ability to work in a cross-disciplinary way is important.

The importance of blue-skies research should not be forgotten. Peter Mansfield is famous in Nottingham for building the first magnetic resonance imaging scanner, but he started with a physics experiment on solid-liquid interactions and did not anticipate the impact of his

24 Jun 2015 : Column 268WH

work. Often the impact of work is difficult to predict or quantify, and we must not lose blue-skies research in the drive for value for money.

I have three things to say to the Minister in concluding: first, what commitment is he making to knowledge transfer partnerships? They are among the most important long-running Government growth and innovation initiatives. They celebrate 40 years this year and are valued in my city. Secondly, is he willing to discuss with the Home Office the effect of immigration rules—particularly those on post-study work visas, which my hon. Friend the Member for Sheffield Central mentioned? At a time when we are particularly conscious of women’s role in science and research, and when it has been in the press spotlight—yesterday was National Women in Engineering Day—what do the Government intend to do to ensure that we celebrate the talents of everyone who would like to be involved in science research? There is a persistent gender imbalance.

Finally, I invite the Minister to visit both the universities in my constituency, if he comes to Nottingham. Alternatively, if he and his colleagues find themselves in Ningbo in China or Kuala Lumpur in Malaysia, I invite them to visit the extraordinary campuses of the University of Nottingham. More than 11,000 students are studying there for British degrees, and carrying out cutting-edge research, creating a bridge between the UK and Asia.

Several hon. Members rose

Albert Owen (in the Chair): Order. I am not putting time limits on speeches, but, as I said, I will be calling the Front-Bench speakers at 10.30, so hon. Members can do the maths. There are four hon. Members wanting to speak, including Mr Shannon.

10.11 am

Jim Shannon (Strangford) (DUP): I will certainly keep within the time limits. I thank the hon. Member for Sheffield Central (Paul Blomfield) for bringing this topic to the House. My hon. Friend the Member for East Londonderry (Mr Campbell) has left the Chamber, but at one stage my party had the second largest number of Members present, and that shows how important the subject is to us in Northern Ireland.

I want to talk about research on health technologies, and disease prevention and cure. The UK is renowned for its research capabilities. The importance of science and research has been recognised by successive Governments who have sought to protect the science budget from significant cuts. That speaks volumes, but many people in the science and research community have said that our spending is mediocre by international standards. That is a fact of life, so how can we work better with private partnerships to make things happen? The impact of science and research is tangible across the regional economies. In Northern Ireland we are lucky enough to be home to fantastic research universities, which are trailblazers for scientific research across the board.

Queen’s University Belfast is a pioneer and has made breakthroughs in medical treatments and disease. Its work on improving patient care in the treatment of bowel cancer is one example. It uses the latest state-of-the- art techniques to define the genetic make-up of bowel cancer cells and that will no doubt bring significant advances in diagnosis rates and treatment. There is also

24 Jun 2015 : Column 269WH

a company in Portadown, in the constituency of my hon. Friend the Member for Upper Bann (David Simpson), that has projects to develop better diagnostic texts for prostate, ovarian and breast cancer. Yesterday’s ovarian cancer figures showed that Northern Ireland has the worst recovery rate and life expectancy rate in the UK; 70% of those who get it die within five years. Advances are needed, and they are happening at Queen’s University.

Terumo BCT—a blood technology company—has made great contributions domestically and globally to the detection and treatment of disease. Terumo is based in Larne, and 280 skilled people are employed there. In my constituency, TG Eakin manufactures high-quality medical supplies and has made significant contributions to the science, health and research community. In 2005 it launched its own research and development department, and is now successful beyond Comber in my constituency. Its 280 employees are in Comber, Cardiff and the constituency of the hon. Member for Nottingham South (Lilian Greenwood). Those companies make real-life contributions for the long term, to people’s lives, wellbeing and health.

I want quickly to talk about schools and the post-16 group, and about the focus on careers advice. What discussions has the Minister had with other Ministers to ensure that such advice encourages young people to look towards science? We need to focus on the science skills necessary to improve the core of a modern British and global economy. Science and research play a significant part in the creation of wealth and jobs, and we need to help prepare young people to exploit the opportunities in the market and to get well paid skilled jobs. That will require us to take into account the role of the secondary sciences, as the Science Council urges us, and not to consider only what are conventionally thought of as the science sectors.

10.15 am

Mr Andrew Smith (Oxford East) (Lab): I will try to speak more quickly than the hon. Member for Strangford (Jim Shannon). I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on obtaining the debate, which gives me the opportunity to praise the stellar success of science in Oxford, and the enormous benefits it brings to our city, our region and the country. The gross value added of the Oxfordshire local enterprise partnership is the highest in the country outside London. The University of Oxford and Oxford Brookes University are crucial to its success, providing many of the projects for the local growth fund, as well as driving Oxfordshire’s strategic economic plan, which is entirely innovation-based.

The best thing about science, research and the economy in Oxford, however, is the sheer excitement and ambition of so much of the work being done. I want to give a couple of examples: with the pulling together of big data and advances in molecular biology, and with the work of the Precision Cancer Medicine Institute and the collaboration of 200 interdisciplinary teams from across Oxford University feeding in to that, there is a real chance that Oxford will be in the lead globally in work to personalise cancer treatment properly, and to increase the rate of cure—not just treating cancer, but curing it.

Secondly, the Higher Education Innovation Fund set up the Sustainable Vehicle Engineering Centre at Oxford Brookes. That has been used by BMW and all the major

24 Jun 2015 : Column 270WH

automotive companies in the development of electric vehicles. The university has just launched an innovative new undergraduate degree in business and automotive management, in partnership with BMW. That is university innovation in the lead in a crucial national industry.

That quality and potential in the field of innovation and breakthrough is replicated across the universities, centres and science parks that we are fortunate to have in Oxfordshire. At the annual SET for Britain poster presentations locally and here in Parliament, it is a privilege for me to see that there are always so many stunning and prize-winning entries from young Oxford scientists. Research in Oxford is sustaining thousands of jobs, and is spinning out companies, having been an early pioneer of university spin-outs with Oxford Instruments. That was set up in 1959 and is now a global leader. Many others are treading the same path, and more could do so.

There are three key ways in which Oxford’s potential is being held back by the state, which should be helping us. First, shortage of housing supply is driving the price to earnings ratio and rents to the highest in the country outside London. That risks damaging the ability of the science community locally to recruit the brightest and the best, as well as making life hard for all the technicians and others whose teamwork supports the innovators and entrepreneurs. Please will the Government allow us to relax the green belt in a measured way to let Oxford and its science grow.

Secondly, I make a plea, as others have done, to the Government to change their rhetoric and practice on immigration. Many young scientists, in particular, are not on high earnings, and face a hand-to-mouth existence climbing up the research ladder. There is a danger that the earnings thresholds on settlement will discourage talented young scientists and their partners from coming here. Yet the forefront of scientific research is a global labour market and the Government should remember that. An all-party group on migration report earlier this year on UK post-study work opportunities for international students showed good evidence that the abolition of the old post-study work visa has damaged the access of students from many countries—notably India, Pakistan and Saudi Arabia—to higher education in the UK. When they do not come here to do science courses, domestic students lose when the courses are closed down. The Government need to change their stance.

The third point is that, as others have said, we need to get the Government to commit to increasing research funding as a proportion of GDP. The previous Government ring-fenced research funding, recognising it as a powerful catalyst for economic competitiveness and recovery. Compared with our global competitors, the UK under-invests in R and D, and we must remember that a much higher proportion is undertaken in universities here than in competing countries. I therefore ask the Government to commit to increasing research funding in general, and in particular in those universities, such as ours in Oxford, that have shown that they can deliver the outcomes that the country needs.

I echo the call from my hon. Friend the Member for Sheffield Central to the Chancellor of the Exchequer to seize the opportunity of the forthcoming Budget to commit to increasing research funding and thereby stimulate economic growth.

24 Jun 2015 : Column 271WH

10.20 am

Dr Alan Whitehead (Southampton, Test) (Lab): I will attempt to speak even faster, Mr Owen.

In the Marx Brothers film “Go West”, the brothers realise that the train that they are embarked on simply does not have enough fuel on board and they spend quite a long time running through the train and smashing up the carriages to get wood to burn in order to get the train to the station. The train gets to the station, but unfortunately it is not a train any more. That is where we are with research and development, particularly higher education R and D, in this country. We are smashing up our own resource to keep the show on the road. It is a very good show. For example, we have 12% of global citations for 1% of the world population. We are home to 29 of the world’s top 200 universities. We are first in the G8 for scientific papers. That is a very good story to tell, but how long will it continue if we continue to invest less than 0.5% of GDP in public R and D, as we have heard is happening? What does the future hold? Will the train get into the station in a clearly recognisable form and be able to get out of the station for future journeys, especially as other countries are stepping up their efforts? China is aiming for 2.5% for public R and D by 2020. Sweden is developing substantially its R and D spending as a percentage of GDP. In South Korea, the amount for R and D was 2.3 trillion won in 2012. Many countries are going in precisely the opposite direction from us.

This is not a debate about the future in abstract terms. Let me take as an example my university, the University of Southampton, which is one of two universities in the city. Southampton University is not only among the top universities in the country, but makes, as was recently enumerated, an enormous contribution to gross value added not just nationally—we are talking about £2 billion gross value added and 26,000 jobs—but regionally and locally. Its research has clear outcomes. For example, the fibre-optic research that Southampton did over years has spawned a photonics industry in the UK—it is worth £10 billion and has 70,000 employees—and a substantial photonics cluster in Southampton.

Southampton’s SETsquared initiative brings together a number of universities to incubate businesses and spin-offs from the research done at universities. That is now regarded as the prime business incubator involving the university sector in Europe. In the science park, there are 86 companies; 29 are start-ups or spin-offs.

The research and development funding that the university obtains has a real impact in the local community, in the region and nationally. The question is what will happen if that funding tap is turned off in the future. I am not saying that there have not been substantial capital innovations recently. The £200 million centre for advanced materials research, which we have talked about, represents a substantial capital improvement. It is the business of just keeping the whole thing going that we are falling down on in this country.

Daniel Zeichner (Cambridge) (Lab): On those threats, does my hon. Friend agree that a further danger is any threat to our position within the European Union? In my university, the University of Cambridge, 12% of the research budget comes from the European Union, but

24 Jun 2015 : Column 272WH

even more important are the collaborative networks with other EU countries, which people tell me are vital. Is that a further threat?

Dr Whitehead: It is a substantial further threat. Indeed, if we shut ourselves away from Europe, we will throw away the advantage that we have in this country from our membership of the EU in terms of our future R and D. My hon. Friend is absolutely right.

This is something that we perhaps do not notice happening. It is easy to miss it, and there are not catastrophic consequences from disinvesting in R and D as far as universities and research centres are concerned, but it is potentially catastrophic for the future competitiveness of this country and the future of the sort of arrangements that I have explained exist in Southampton and have an impact in the area, the region and the country as a whole. I urge the Minister to take careful note of this debate and ensure that the investment that should be there for the future is put in place and that commitments are made to ensure that that carries on coming in to support our universities and our research activities, which are so valuable and such a source of potential fuel for this country’s ambitions across the world.

Albert Owen (in the Chair): I call the fast-talking Sammy Wilson.

10.27 am

Sammy Wilson (East Antrim) (DUP): I thank the hon. Members who cut their speeches short, because like me, they probably had a lot to say. I do not want to go through all the benefits of research and development, because those have been well outlined in previous speeches. All I want to say is that the two universities in Northern Ireland—Queen’s University and the University of Ulster—have an excellent record on research. Indeed, Queen’s is ranked eighth in the United Kingdom for research intensity. That research benefits not only the Northern Ireland economy, but almost every individual in the country.

We can look at an example of the benefits here in London. I am talking about the buses, which are cleaner, quieter and more efficient as a result of work that started in the 1990s at Queen’s University and was then transferred to Wrightbus in Ballymena. It has now resulted in new buses running around the streets of London. That has helped Wrightbus become one of the leading technology and engineering companies in Northern Ireland.

Another example concerns food safety. Queen’s University took the lead in that regard. Indeed, Professor Chris Elliott of Queen’s University was asked to set up the taskforce to deal with food safety after the horsemeat scandal, and much of the research that was done at Queen’s now enables laboratories around the world to detect multiple contaminants in food. I could talk about all that extensively.

However, there are challenges that need to be faced. The first has been mentioned already. The Government need to give a commitment on the amount of money available for research and development. I recognise that the previous Government ring-fenced research and development spending, but a commitment to spending

24 Jun 2015 : Column 273WH

3% of GDP on research and development, even in times of austerity, would help productivity and growth and have long-term consequences, even though the lead-in period is sometimes quite long, as Queen’s University research has shown.

It has been identified that although a lot of research goes on, the link between research in universities and small and medium-sized enterprises in particular has been weak. Some larger companies see the value of devoting resources to research, but some smaller companies do not. That is a big challenge, whether we seek to address it through tax incentives or by encouraging the universities to be more proactive, because productivity and product range need to be increased the most in small and medium-sized enterprises.

Another challenge is EU funding. There are huge opportunities on which we are not capitalising. What can the Government do?

Skills shortages are another issue. Universities are already identifying skills shortages, especially in the teaching of science, technology, engineering, maths and languages, which means that we need to start from primary school and continue through secondary school, and also that we need teacher training. We need to encourage universities to get a cohort with those skills.

The last challenge, which has been mentioned, is immigration. Much of the research at the University of Ulster is undertaken by students from overseas, and some schools would not be viable if we did not have that influx of overseas students. The Government need to think about that when they consider their immigration policy.

Albert Owen (in the Chair): I call Mr Roger Mullin to wind up on behalf of the Scottish National party. I welcome him to Parliament.

10.31 am

Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP): It is a great pleasure to serve under your chairmanship, Mr Owen, and it is a particular pleasure to respond to this debate, secured by the hon. Member for Sheffield Central (Paul Blomfield). I have heard much about his inspiring leadership in the higher education sector.

I start by making a declaration of interest. I am still an honorary professor at the University of Stirling, and in recent times I have undertaken a number of ethical reviews of research proposals on matters such as tobacco. One great strength of UK universities that has not been mentioned in this debate is their approach to ethical research, of which universities throughout the UK can be tremendously proud. Our universities’ strength of ambition to conduct high-quality, leading ethical research is increasingly becoming a selling point. In a few days’ time I will give advice at the request of the University of Dundee and the University of St Andrews, for which I will be paid the princely sum of nothing—I think that is a fair reflection of the quality of my comments to come.

In another context—it is not exactly a declaration of interest—I wanted to say this at some stage in my parliamentary career and now is an appropriate time: my late brother, Jim, who died not all that long ago, graduated from Glasgow University before emigrating to Canada, where he became a leading scientist and,

24 Jun 2015 : Column 274WH

after a number of years, was chairman of the OECD science and technology committee. I hope he would be pleased that I am speaking in this debate.

Scotland has a remarkable tradition in higher education and research. Even today, 77% of all research by Scottish universities submitted to the research excellence framework is classified as “world-leading” or “internationally excellent,” which is ahead of the UK average. Some 86% of Scottish research is judged as being “outstanding” or having “very considerable” impact, which compares with the UK average of 83.9%. The hon. Member for East Antrim (Sammy Wilson) talked about impact brilliantly in his three minutes and 57 seconds.

Scottish universities also excel, and have a great tradition, in science. Hon. Members gave many examples from their constituencies, but I will give just one example not from my constituency but from Glasgow University, which ties in to the importance of considering these matters not merely in the context of a constituency, of Scotland or of the UK, but internationally, too. South Glasgow University Hospital, as well as catering for more than 1,000 patients, hosts a campus of Glasgow University and its world-leading Stratified Medicine Scotland innovation centre, a state-of-the-art clinical research facility for clinical trials. The hospital will also be the site of the university’s Europe-leading imaging centre of excellence. A number of hon. Members have pointed out the fundamental importance of European connections to our universities. I would say that it goes beyond Europe: our global connections in the UK, and in Scotland, are of fundamental importance and are to be treasured.

Scotland’s universities are proud of their Scottish roots, but they are equally proud of being outward-looking and highly collaborative within the UK, within Europe and internationally. What might be described as the best of our universities are in a worldwide research ecosystem. Such interchange is important to everyone. Engagement is important to Scottish universities, and they also have something to offer when they engage with others.

In practical terms, we want to see the continuation of the dual support system for research funding in the UK. We want to see more UK-wide and Europe-wide collaboration that underpins excellence in research. Some hon. Members talked about the value of localised competition in small places such as London, but, looking more widely, I am pretty sure that many London universities benefit from how they relate with universities in, for example, California, South Africa, Germany and many other parts of the world. The same is true for Scotland and every constituency with a university.

I am slightly surprised that nobody has made significant mention of the Nurse review of UK research councils. The consultation phase closed in April, and Sir Paul Nurse is considering the evidence. I am pleased to say that the Scottish Government have already arranged to have further consultations with Sir Paul in the coming weeks, as has Universities Scotland. From that review we hope to develop more imaginative approaches to research funding that recognise, for example, the connection to innovation, which others have talked about so eloquently in this debate.

On European research partnerships, the hon. Member for Sheffield Central mentioned the importance of the seventh framework programme for research. It indicates the

24 Jun 2015 : Column 275WH

importance of that European connection to Scottish universities that, by the time the programme ended in 2013, Scotland had been awarded €636 million in funding. Scotland has received 11.2% of the UK’s European Research Council funding, which is well above our population share. For Scottish universities it is fundamentally important that we have strong and continuing links with the European Union, as well as with others across the globe.

I will conclude with a couple of questions for the Minister, one of which I have not mentioned thus far. The immigration policy pursued by this Government is a barrier to attracting leading research talent from across the world, as some Opposition Members have already mentioned. That is critical. We are particularly concerned in Scotland, and we call for the return of the post-study work visa to enable people who are here to study for higher research-end degrees to continue contributing. It is completely and utterly insane that the Government are discriminating against such people when they have so much to contribute to this country. We ask the Government, in the coming Budget, to address the fears of some of our universities about what may occur. They fear that there will be a squeeze on research funding at a time when, as many Opposition Members have said, we need increased investment in R and D for the benefit of productivity and innovation.

10.39 am

Liam Byrne (Birmingham, Hodge Hill) (Lab): It is a privilege to serve under your chairmanship, Mr Owen. I apologise for missing the beginning of the debate. I add my congratulations to the Minister; it is good to see him in his place. I am obviously sad that I am not sitting there. None the less, if there has to be a Conservative Minister, I am glad that it is him. He is a fully signed up member of the thinking classes, despite what his father has to say, and I am sure he will distinguish himself in his new office.

I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield). It is good to see him back with such an increased majority, which is testament to his extraordinary work in his constituency and in the House over the last Parliament. It is with characteristic speed that he has secured this debate.

We have managed to achieve a degree of consensus on science policy over the past 20 years that has served this country well. We need to preserve and enhance that consensus during this Parliament. However, now is the time to begin making progress on a number of substantial policy issues. In this morning’s debate, some of those issues have become clear. As we set about that task, it is important that we keep our eyes on the prize that is there for the taking with science policy over the next decade or two.

Last year was a bumper year for British science, with extraordinary achievements from landing probes on comets to advances in medical science, but, as Sir Paul Nurse said—it is important that we pay tribute to Sir Paul’s leadership of the Royal Society—the progress last year represented the fruits of years and years of patient chipping away at the coalface. As my hon. Friend the Member for Nottingham South (Lilian

24 Jun 2015 : Column 276WH

Greenwood) and others have said this morning, we are in jeopardy of destroying the foundations of the progress that we saw last year unless important policy changes are made.

Over the next 10 years, we could seize the fruits of the very different world taking shape around us. The majority of the world’s people now live in cities; the majority will soon be interconnected with the cloud, and the internet of things will bring new networks to bear. We are now able to work together in a completely different way, and of course there is a new premium on us as a world making the right decisions. The decisions that are made over the next five to 10 years will have a critical bearing on whether we succeed in keeping global temperature rises below 2° C. As my right hon. Friend the Member for Oxford East (Mr Smith) and my hon. Friend the Member for Nottingham South spelled out, there is the potential for great progress in medical science and beyond if we make the right decisions over the next few years.

We in this country have a parochial interest in some of those decisions being taken in a correct way, not least because of the impact of science and innovation policy on our lamentable productivity performance. I am glad the Chancellor has now woken up to the crisis in British productivity growth, which is worse today than it was at the end of the 1970s when we used to call it the British disease. What the rest of the G7 now finishes making on a Thursday night takes us until the end of Friday to get done. We will not raise living standards in our country unless we close that yawning 20% productivity gap with the rest of the G7.

Mark Field: Will the right hon. Gentleman give way?

Liam Byrne: I will in a minute.

We have heard three clear policy priorities that I hope the Minister will attend to. The first relates to money. As we have heard this morning, Britain is seeing not growth but substantial decline in its science budget, yet we are at a crossover moment in global science spending. China will probably spend more on science this year than the EU28 put together. By 2019, China will spend more on science than the United States of America. Four of the 10 biggest tech firms in the world are now Asian. Shanghai’s results in the programme for international student assessment are well in advance of our PISA results here in the UK. We are now at a crossover point that we perhaps last saw in 1455, when the good jobs in the world were created in the east and the cheap labour jobs were created here in the west. If we are to guard against that, we must make more progress on funding.

The Business, Innovation and Skills Committee was absolutely right to say that the right target for science spending in this country is 3% of GDP. There is a cross-party consensus about that figure in Germany, Korea has already exceeded it and it is the norm in parts of Scandinavia. What we need to see in the Budget in a couple of weeks’ time is the launch of a consultation by the Chancellor on the measures that would most effectively bring in private sector money. Some of those measures would be national policy, but, as we have heard from my hon. Friends the Members for Southampton, Test (Dr Whitehead) and for Nottingham South, some would ensure that science began to regenerate our cities and towns. This is about not just crowding global spending into the UK, but making sure that we unlock the

24 Jun 2015 : Column 277WH

regenerative power in science throughout the country. I hope that one of the ideas put on the table as part of the consultation will be a radical expansion of university enterprise zones, which are a good idea that is confined to only four towns and cities in the UK. We should use university enterprise zones far more radically in the years to come.

Secondly, we need a new consensus on technical education. The Minister’s colleague, the Minister for Skills, has said that he is interested in agreeing high-level principles that would guide a technical education system for the future. We go through this crisis decade in, decade out in this country, and we have got to begin making progress. I suggest that the right place to start is by putting a serious submission to the Treasury that calls for the Chancellor to save our further education system. We will not be able to build a world-class technical education system if we kick out its spine, and as Alison Wolf made very clear this morning, that is precisely what is coming. We cannot build a world-class technical education system if we are shutting down further education colleges all over England and closing down adult education. That is a good place to start rebooting our technical education system for the 21st century.

Thirdly, we need changes to our immigration system, which we have heard a lot about this morning. We in Parliament should be calling for the free movement of scientists and students. That is the only way we will be able to make sure that this country is connected to the best brainpower, wherever it happens to be born. I was the author of the first post-study work visa when I was the Minister responsible for immigration. It was not perfect, but it was a lot better than the system that we have today. If we are to ensure that we train and educate the best students for the years to come, we have to look again at how we put in place a much better post-study work visa, and I would be happy to work with the Minister on getting that right.

Finally, I underline the call that my hon. Friend the Member for Sheffield Central made for a new consensus in Parliament. Some 350 years ago, two groups of men from different sides of the political spectrum came together at Gresham College, on the site where Tower 42 now stands, in the constituency of the right hon. Member for Cities of London and Westminster (Mark Field). On one side of the divide were the royalists and on the other side were the parliamentarians. At that moment in November 1660 they decided to put aside historic divisions and work together in the interests of science. The Royal Society was born on that afternoon after an astronomy lecture delivered by Sir Christopher Wren. We need such consensus again. If the royalists and parliamentarians could do it in 1660, the Labour party, Conservative party, Scottish National party and others could perhaps make the same move. I hope the Minister will work with us constructively and creatively, and I hope he will take to heart the points that he has heard this morning. Over the days and weeks to come, in the run-up to the Budget, he would do well to read again the excellent opening speech made by my hon. Friend the Member for Sheffield Central.

Albert Owen (in the Chair): I welcome the Minister to his role. I remind him that the hon. Member for Sheffield Central has two minutes to wind up.

24 Jun 2015 : Column 278WH

10.48 am

The Minister for Universities and Science (Joseph Johnson): It is a pleasure to serve under your chairmanship, Mr Owen, on this important subject. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on prompting discussion on a key aspect of Government policy.

The UK regions are at the heart of the Government’s economic strategy. The Government are mindful to ensure that investment should not get sucked into hyper-concentrated areas, such as the golden triangle, at the expense of the excellence that can be found in many other parts of the country. That is a matter to which I have been paying close attention in my first few weeks in my role.

We believe that science and research has a central role in the regions and the Government want the national economic recovery, which has been under way for a number of years, to continue to benefit all parts of our country. Investment in research based in the regions is an absolutely key part to that. The extra gear our economy needs is to be found in R and D capabilities in the universities in our regions as well as in the golden triangle.

UK science is an international success story and a major driver of growth and attractor of inward investment, as hon. Members have mentioned. It is not always recognised that it can make a huge contribution to local and regional economies and to rebalancing the economy, a goal to which the Government are strongly committed.

By way of illustration, I will take a quick regional tour of the investments we have made in recent months, starting from Land’s End and going all the way up to John O’Groats, many of which will contribute to our goal of rebalancing the economy. In the south-west, synthetic biology has been assisted by a £14 million investment in a centre for synthetic biology in Bristol. I will detour via London, which, as Members have already mentioned, has well-known strengths and new investments in institutions such as the Francis Crick Institute and the Alan Turing Institute. Just north of London, we have recently invested £12 million in a centre for agricultural informatics and sustainability metrics near Harpenden and work will start there this summer on modelling more efficient food systems.

Further east, we have just invested £44 million in Babraham and £26 million in Norwich in research agri-tech. In the west midlands, not far from the constituency of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), we have an example of what will help our ambition to make the midlands an engine of growth. As part of the Government’s £270 million investment in new quantum technologies, Birmingham University has just secured £35 million towards developing an internationally leading centre of excellence and a quantum technology hub. That is in addition to plans for a new national college for high-speed rail, which the right hon. Gentleman described as a

“once in a generation opportunity to transform our local economy.”

The manifesto we published before the general election had a strong commitment to building the northern powerhouse. That is becoming a reality and our investments in centres such as the Hartree Centre and the square kilometre array, the largest scientific experiment in the world, will support that objective. I could add to that

24 Jun 2015 : Column 279WH

list our various investments in graphene such as those at the National Graphene Institute and the Graphene Engineering Innovation Centre.

The hon. Member for Sheffield Central will be impatient for me to cross the Pennines. He will know that, in the Sheffield city region, £10 million has just been invested in a new facility for aerospace and other sectors at the Advanced Manufacturing Research Centre. In York, we have invested £27 million in a quantum communications hub as part of our national programme.

As we head further north to Scotland, we continue to support Scotland’s fine scientific tradition. Just last year, the Chancellor announced a £16 million contribution to a new stratified medicine imaging centre of excellence in Glasgow, which will unite world-leading clinical academic expertise in stroke, cardiovascular disease and brain imaging to aid our understanding and treatment of a range of human diseases. Other examples in Scotland include Edinburgh University’s national computing centre, which has benefited from funding for ARCHER, the UK’s top supercomputer, which is now being used by 1,000 academics and people in industry.

I turn to issues raised by Members, and by the right hon. Member for Birmingham, Hodge Hill in particular. I thank him for his generous welcome; it is a pleasure to be in this relationship to him. I have always enjoyed talking with him and I hope that we can have a productive and cordial relationship in the months ahead.

There is strong cross-party agreement about the role that investment in science and research can play in solving our productivity challenge and the right hon. Gentleman knows that the Government are truly committed to that. Our manifesto is evidence of it: investment in science and research runs through it like words through a stick of rock and it is a personal passion of the Chancellor. Science and research therefore is front and centre of our solution to the productivity puzzle and such investment in our regions will be one of the key ways in which we will try to plug the productivity gap that holds us back.

The right hon. Gentleman mentioned the 3% target, which has been an ongoing question in public policy debate for some time. As he will know, previous Governments attempted to introduce R and D-related targets without success. An isolated target does not lead to behavioural change in and of itself; it needs to be complemented by additional policy measures. It is not clear that 3% is the optimal target and there is no evidence that it would lead to optimal investment for the UK. Evidence suggests that the UK under-invests compared with other major research economies and that there would be economic benefits from increased investment, but the aim of achieving 3% GDP spend on R and D is set out at EU level and is not a UK target. The investments we make as a country are recognised as being particularly fruitful. We are recognised as being an excellent place in which to innovate and get very high returns on scientific R and D investment.

Mark Field: Without pre-empting the battles that the Minister will no doubt have with the Home Office, the immigration question is close to our hearts. He will appreciate fully that if the brightest and best from across the world come here, they will go back to their

24 Jun 2015 : Column 280WH

countries as ambassadors for this country for the rest of their lives and often build up businesses with links to us. We lose that at our peril: such links will then go to Canada, the USA and Australia, and the point has been made that, without significant numbers of overseas students, leading postgraduate courses will simply close down, which will be to the detriment of our own indigenous population.

Albert Owen (in the Chair): Minister, you have one minute.

Joseph Johnson: That is an important area, and indeed my first speech as Minister was on that subject at the Going Global conference a few weeks ago. I was clear about the positive contribution that international students make. Our postgraduate study options aim to attract the brightest and best, and we welcome any student who can secure a gradate-level job with a graduate salary. We need to clear up misconceptions that have arisen in important countries—India in particular—about our openness; we offer a warm welcome to international students. I note my right hon. Friend’s important points.

May I quickly turn to a couple of other points made by Members?

Albert Owen (in the Chair): Very quickly.

Joseph Johnson: The hon. Member for Nottingham South (Lilian Greenwood) kindly invited me to go to the various universities in Nottingham and I look forward to doing so. I note her points about women in engineering and yesterday I had the great pleasure of being at the Parliamentary Links Day, where I was delighted to see a packed room with so much consensus behind the need for greater diversity. In support of Government investment in Nottingham, I point to recent investment in the synthetic biology research centre. I am sorry that I do not have time to come to other Members’ contributions.

Albert Owen (in the Chair): Order. Time waits for no man, not even a Minister.

10.58 am

Paul Blomfield: The number of Members present and the quality of the debate reflects the importance the House places on this issue, as well as the need for the Government to get it right. My right hon. Friend the Member for Oxford East (Mr Smith) made a powerful case about the impact of research in Oxford. That is important, because while Oxford is often seen as one of the classic ivory towers, he demonstrated how such research works with business to develop economic growth. Oxford is utterly engaged in driving the local economy, just as other universities are around the country.

I appreciated working on migration with the right hon. Member for Cities of London and Westminster (Mark Field) in the previous Parliament and I recognise that he is not alone in his thinking on the Government Benches. Indeed, I think it was three or four years ago that the Minister wrote a powerful piece in the Financial Times that explained where the Government were getting their policy wrong on international students and I hope that he will continue to make that case within Government.

The hon. Members for Strangford (Jim Shannon), for East Antrim (Sammy Wilson) and for Kirkcaldy and Cowdenbeath (Roger Mullin) underlined the importance of research across the regions and nations of the UK.

Motion lapsed (Standing Order No. 10(6)).

24 Jun 2015 : Column 281WH

Leaseholders and Housing Association Ballots

11 am

Jim Fitzpatrick (Poplar and Limehouse) (Lab): I beg to move,

That this House has considered leaseholders and housing association ballots.

It is a pleasure to see you presiding over this debate, Mr Owen, and to see the Minister in his place. I and others have had an ongoing, constructive dialogue with him on these matters—on some of them, at least—as will become clear in due course. The title of the debate may be slightly misleading, as I intend to cover leasehold reform as a separate but connected matter to housing association ballots. I have advised the Minister’s office of that, and I am sure the Minister has been forewarned about the shape that my contribution will take.

I raised these matters on 6 March, in the dying days of the previous Parliament, and I welcome the opportunity to put them on the ministerial radar early in this Parliament, although I know the Minister is already aware of them—of the leaseholder issues, in particular. I and others are grateful to the Minister and his officials for arranging a meeting on 8 June about leaseholder matters with the hon. Member for Worthing West (Sir Peter Bottomley), me and representatives of the Leasehold Knowledge Partnership. The hon. Gentleman has led on these issues for some time, and I am pleased to be assisting his significant efforts. Mr Martin Boyd and Mr Sebastian O’Kelly, campaigning as the LKP, have made much progress in engaging with the Government, securing charitable status and ensuring that millions of leaseholders have a voice and access to an organisation dedicated to advising and assisting them.

I do not want to labour this point, as I know the Minister’s officials are examining many of the anomalies and weaknesses that we have identified in the existing legislation on leaseholders, but the matters that concern us include the problems with retirement homes and the issues of commonhold versus leasehold and property ownership. Tribunal procedures are supposed to be relatively informal, but can become expensive if the defending freeholder brings high-powered barristers against local residents who are trying to get redress against problems they have identified.

There is also the issue of unscrupulous freeholders and predatory property management companies. The sector is doing a lot to improve its image and the professionalism of property management services, but there are some predatory organisations that prey on vulnerable people and take a lot of money unfairly. There is the issue of forfeiture, which we have discussed in depth with the Minister. There are also recognition issues. Leaseholders often find it difficult to get their association recognised by their property management company or freeholder because of difficulties in securing numbers, identifying the owners of properties and the like.

We have also talked to the Minister about the different roles and responsibilities of the Department for Communities and Local Government and the Ministry of Justice. This policy area has implications for both Departments, so we must look at how well those arrangements are working. I know the Minister is well aware of all those issues, as they were reinforced in our

24 Jun 2015 : Column 282WH

previous meeting. I acknowledge that he has tasked his officials to examine them and to report back. We look forward to continuing our discussions on those issues in due course. If, however, the Minister has anything new he wishes to add, his comments would be welcomed by all who take an interest in leaseholding. I fully accept that his officials have done a lot of work on this matter, and, given that we have had a recent meeting, there is probably not a lot to report back.

The hon. Member for Worthing West, ably assisted by Ms Katherine O’Riordan, has organised another roundtable discussion on leasehold reform on 9 July, to which the Minister and his officials have been invited. They will be very welcome. Such successful forums, which have been taking place in recent years, allow people to share information and experience on these issues.

On the issue of housing association ballots, the Minister may be less informed about the concerns I raised on 6 March; the Deputy Leader of the House responded to that debate, although I am sure he reported back to the Minister. The Minister’s officials will have read Hansard and will be aware of the questions I was asking.

As the Minister knows, hundreds of thousands of tenants in recent decades voted in stock transfer ballots to leave local authority control—i.e. to move the management of their properties from the council to a housing association. Thousands—probably tens of thousands—of my constituents are among those who agreed to do that. The driver was that housing associations are able to modernise and refurbish run-down council properties and raise them above the decency threshold for homes because they can raise the finance, while the rules prevent councils and council housing organisations from doing the same. New kitchens, bathrooms, windows, central heating and security measures were installed. Many of the schemes, including a number in my constituency, were very successful, although not all were.

A number of issues arose. Some are ongoing, such as the quality of work and the materials used, the fact that some people have been overcharged for the work, and transparency. There were recently two contradictory reports on the schemes: the Evening Standard reported on bribery and corruption at a housing association in Hackney, while Inside Housing reported on a positive contract in Brighton that created hundreds of apprenticeships and new jobs. There are different experiences of schemes in different parts of the country. A number of other issues were raised, including the costs and service charges and the appeals procedures. Many tenants were able to resolve such issues with the assistance of their registered social landlord. The Government changed the regulations to level the playing field, in terms of transparency, accounting and information, but not all the concerns were addressed.

In a few cases, the offer promised by some housing associations to entice council tenants to vote for the stock transfer were never fulfilled. In such cases, tenants were powerless to have their complaints resolved. After they have voted to hand over their property to the new landlords, there was and is no mechanism to vote to sack the housing association for poor performance.

Such a sanction exists for the regulators—the Homes and Communities Agency and the housing ombudsman, following complaints of failures, can order mergers and takeovers of failing housing associations, but residents

24 Jun 2015 : Column 283WH

are powerless. Incidentally, leaseholders who exercised their right to buy their council property are powerless and voiceless, as they have no vote when the estates in which they live are transferred unless the local housing associations included them in the consultations, as good registered social landlords did. The Government have introduced a welcome cap on charges, which is a positive change.

My main question to the Minister is about the rights of housing association tenants and whether they should be empowered to sack poorly performing housing associations. Leaseholders in the private sector, despite the anomalies in the recognition procedure, are entitled to a ballot if their property management company lets them down, and they can vote to award their contract to a new company. If it is good enough for the private sector, why cannot it work in the public sector? It is an essential element of consumer protection that customers who are disappointed with a purchase are able to ask for redress, return the goods, seek compensation or purchase alternative products elsewhere, but those who live in housing association properties cannot. I was going to say “social housing”, but of course council tenants can switch initially by stock transfer ballot, which I mentioned. They have an initial choice, but then are locked in; having transferred, they have no further rights.

Obviously, the Minister will publish his housing Bill in this Session; I am not sure when, but he might be able to indicate the timing, even generally. Just as an aside, but an important aside for many of us, I should say that there are real concerns, which have been expressed publicly, about aspects of the Bill, such as the sale of housing association properties under the Government proposals and the economics of whether there will be like-for-like replacement. That issue has been raised by a number of people.

The second anomaly, for me and others in Tower Hamlets, is that of requiring higher-value council properties to be sold. Both those elements will have a huge negative impact on Tower Hamlets; as an inner London borough, all our property is very expensive. However, the three, four and five-bedroom properties, which are absolutely essential for the kind of community we have, are particularly expensive properties. If they go from the social housing stock, that will create major difficulties for local people.

In conclusion, and to go back to my main question about tenants getting control of their estates, may I ask the Minister whether he would be prepared to consider an amendment to his Bill to allow housing association tenants, with all the appropriate safeguards that would be required, to vote to transfer the management of their properties from one housing association to another, or to return to arm’s-length management organisation or council housing control?

This is a big issue for many thousands of my constituents. As I say, I have raised it before and it has got quite a bit of interest, because it would be a brand new right for housing association tenants. Clearly, the Government have housing associations in their sight for reforms, and I am eager to hear whether the Minister is interested in this one. I am very grateful for the opportunity to raise these matters and I look forward to the Minister’s response.

24 Jun 2015 : Column 284WH

Albert Owen (in the Chair): I call the Minister to reply, and I welcome him back to his place.

11.12 am

The Minister for Housing and Planning (Brandon Lewis): Thank you, Mr Owen, for calling me to speak. It is a pleasure to serve under your chairmanship for my first appearance in Westminster Hall in this Parliament. I appreciate your comments.

I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing this debate. Both he and my hon. Friend the Member for Worthing West (Sir Peter Bottomley) work very hard to raise issues for leaseholders and tenants generally; the hon. Gentleman’s particular interest is issues that affect the residents of Tower Hamlets. It is to the credit of them both that they continue to represent their constituents’ and the wider interests of people across the leaseholder sector. I am keen for us to find some common ground and a way forward, and I appreciated the chance to meet them both a couple of weeks ago; the hon. Gentleman referred to that meeting.

I know that the hon. Gentleman in particular has looked to explore the possibility of creating a new power that, as he outlined, would allow tenants of an underperforming housing association effectively to sack their association. I will express my specific views on that matter in a few moments, but I will say now that we would like to find a solution to the concerns that have been raised within the current framework of powers. That is achievable.

It is, of course, important that tenants are protected and sufficient safeguards are in place. The Localism Act 2011 gave tenants and their representatives the power to hold landlords to account. It enabled recognised tenant panels to play an important role in resolving complaints at a local level, and that was an important development. As the hon. Gentleman outlined, some of the changes have recently led to a big step forward, and we feel that that is right.

Landlord and tenant issues are often local issues. Clearly, the range and seriousness of those issues can vary, and it is right—absolutely right—that tenants are offered a level of protection at the national level as well. However, I am firmly of the view that, where possible, the issues themselves should be sorted out locally using the framework that we have put in place.

If it is clear that complaints cannot be resolved locally, obviously they can be referred by tenants to the housing ombudsman. When the ombudsman finds in favour of a complainant, they can order the landlord to pay compensation or take other steps to provide redress. Furthermore, it is open to the ombudsman or tenants to raise concerns directly with the regulator.

We would not want tenants to jump directly to the ombudsman; as I said, our view is that the vast majority of these issues can and should be resolved locally. The Homes and Communities Agency has a regulatory function, but it does not have the responsibility or power to mediate in or resolve individual cases. However, it will investigate where there is evidence of a breach of regulatory standards, and—in relation to landlord and tenant issues—serious harm. In extreme cases, it has far-reaching powers to intervene where there is evidence of serious mismanagement.

24 Jun 2015 : Column 285WH

It may be helpful to give the House examples and outline the kinds of approaches that the regulator takes when issues are raised that it judges to be serious. I provide them to demonstrate how seriously the regulator takes its role. In February this year, it was found that a provider broke consumer standards owing to the poor quality of emergency repairs for many tenants over a very long period. A regulatory notice was published, representing the first time that such a finding had been made for widespread service failure. In April, the case took a further step forward when it was found that the underlying cause of the emergency repairs issues was a failure of corporate governance. As a result, the provider in question is now focusing on addressing the issues, and rightly so.

If non-compliance is not addressed, the regulator has statutory duties to intervene formally, which could lead to interventions in the management structure of a particular provider. It is right that the powers available to the regulator should be used only as a last resort. I provide that information to reassure the hon. Gentleman, and others who may read the debate in Hansard, that where issues are serious the regulator can and will take appropriate action.

Having outlined the current approach and the potential impact on housing associations, I want to spend a moment outlining some of the wider options available to housing association tenants themselves. Although it would not be legally possible for tenants to be given the right to sack their housing association, they have other routes to explore that would hand them a much greater degree of control.

Housing association leaseholders in blocks of flats have the right to manage. That enables a group of leaseholders to take over the management functions of their properties. The hon. Gentleman may draw a parallel with his proposals for tenants to have the power to sack their association. One area on which we might slightly disagree is my view that the power of right to manage is enough. The substantial, important difference between the approaches is that under right to manage the properties would still be owned by the housing association, which is different from the ability to manage them and ensure that repairs are done properly. I do not think it possible to draw a complete comparison in the way he outlined today and in previous debates. Leaseholders can also buy the freehold of their blocks of flats—known as enfranchisement—subject to certain criteria. Doing so would give them even greater financial and legal interest.

We have set out a clear policy ambition, which the hon. Gentleman outlined, to give housing association tenants the right to buy their homes to match the social housing opportunities in council housing at the moment and to ensure that everyone in social housing has the same right to buy. Tempting as his invitation to outline the details of the Bill this morning is, he will appreciate that I must ask him to bear with me until we publish the Bill and outline the details behind it in due course. I am hopeful that after the Bill receives Royal Assent, housing association tenants will be able to take the opportunity to move into home ownership.

I will touch on a couple of other points that the hon. Gentleman raised. He asked how the policy would be implemented, as did other hon. Members in an Opposition day debate in the main Chamber a couple of weeks ago. I will be very clear: as we have said all along, there must

24 Jun 2015 : Column 286WH

be one-for-one replacement. I am pleased that the reinvigorated scheme has one-for-one replacement; I am sure that the hon. Gentleman will excuse me for highlighting that we have seen the numbers move from one in 170 under the previous Labour Government to one for one under the reinvigorated scheme. Councils have three years to provide the replacement. If they have not done so by the end of those three years—although the indications at the moment make me confident that they will—the money, with interest, comes back to the HCA, which will provide the homes. It will be one for one.

I must stress our view that a new power to allow tenants of an underperforming housing association to sack their housing association is, with the framework already in place plus what we are looking at with the housing Bill, unnecessary and unworkable. A solution to the concerns raised must be achieved within the current framework. The hon. Gentleman has tempted me to accept an early amendment to a Bill that we have not yet published; I am sure we will discuss his idea later in the year when the Bill is introduced. My officials and I will happily liaise with him on that, but as tempting as his pitch was—and it is probably the first I have had so far—I suspect that we are on a slightly different page.

I hope that the outline I have given has been useful. I again congratulate the hon. Gentleman on bringing this issue to the attention of the House so early in the Parliament; he has made sure that the concerns and thoughts of leaseholders have been aired. I am keen to ensure that tenants know how to resolve their local concerns and that they fully understand and appreciate the powers and opportunities they have. I have to make it clear—the hon. Gentleman will already know this—that I cannot intervene in such matters personally, but I recommend that hon. Members and residents involved in such situations write directly to the regulator if they feel that any regulatory standards are, unfortunately, not being met.

Albert Owen (in the Chair): I am grateful to the Minister. Under the new procedures in Westminster Hall, the Member who brought the debate has a right to reply, should he wish to.

11.21 am

Jim Fitzpatrick: I thank the Minister for the information he has given, which I am sure we will look at very closely. I know that my local authority, Tower Hamlets Council, is closely engaged in this process. I am not sure whether local councils have a role to play, but because the affected tenants are residents in the borough the council has a moral, if not legal, obligation to engage, and I know it is looking to speak directly to certain housing associations.

I note what the Minister had to say about the Bill. We will look at tabling an amendment in due course and would be grateful if he would consider it at the appropriate time. As he said, we are having ongoing discussions, which will continue, and I look forward to future meetings in due course.

Question put and agreed to.

11.22 am

Sitting suspended.

24 Jun 2015 : Column 287WH

Superfast Broadband

[Mark Pritchard in the Chair]

[Relevant documents: Sixth Report from the Environment, Food and Rural Affairs Committee, Session 2013-14, Rural Communities, HC 602, and the Government response, HC 764; Seventh Report from the Environment, Food and Rural Affairs Committee, Session 2014-15, Rural broadband and digital-only services, HC 834, and the Government response, HC 1149.]

2.30 pm

Matt Warman (Boston and Skegness) (Con): I beg to move,

That this House has considered superfast broadband roll-out.

Members who had the pleasure of being at Prime Minister’s questions earlier today will no doubt think that we have already considered superfast broadband roll-out, because it was by far the most popular subject for Members to ask the Prime Minister questions about.

What we are discussing today is by far the most important infrastructure programme that we will consider in our lifetime. There has been much discussion of new train lines. In fact, during the past five years the progress we have made on superfast broadband roll-out has been immense, and I will begin by covering some of the progress that we have made in the last few years.

I intentionally asked for this House to consider superfast broadband roll-out rather than simply the rural broadband programme, because we must acknowledge that there are serious problems in cities as well as in rural areas. Geographically, the rural broadband programme remains an enormous task, because it covers about 40% of the country, but I ask that we also consider today the huge numbers of people in cities who often have very slow connections.

Back in 2010, shortly after the formation of the coalition Government, the then Culture Secretary announced that we would have the best broadband in Europe by 2015. As a journalist covering that, I remember being convinced that, if we were to have that, we would have it only by fiddling the figures. In fact, it turns out that, measured against comparable nations such as Germany and France, Britain has indeed made incredible progress. More to the point, we have by far the most competitive marketplace in broadband, so our constituents pay a good price for the service that they get receive.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): As the hon. Gentleman will know, the Public Accounts Committee has looked at this issue in detail, and I warn the Minister that we will no doubt look at it again. The hon. Gentleman talked about there being good competition, but does he agree that there are technology companies based in my constituency and around the country that would like to break into this market but find that there are barriers, partly because of how the rural broadband programme was rolled out? Does he also agree that the Minister needs to look seriously at the issue again?

Matt Warman: I am delighted to hear that the PAC is interested in considering the issue again; I know that the Minister will agree with me on that. Of course, it is

24 Jun 2015 : Column 288WH

important that we are genuinely technology-neutral when it comes to establishing the best way of getting from 90% coverage to 95% and 100%.

That brings me to my second point, which is about where we are now and where we will be within the next five years or so, so that we can get from 95% coverage to 99%, and then perhaps up to 100%. I should begin by saying that in my own county of Lincolnshire, BT’s roll-out is not only ahead of schedule but £7 million under budget. I may not be the only person who expresses a view on BT in this debate, but I should say that there are some examples of areas where it has delivered the programme that it was asked to deliver. However, I suggest that where we have a challenge is when it comes to delivering the next stage of that roll-out.

Mr Andrew Turner (Isle of Wight) (Con): I am grateful to my hon. Friend for raising this issue, but I am concerned that what we are talking about is “up to 95%” and not “past 95%”. In other words, we are asking for something that will possibly be delivered, but it will probably not be delivered in quite a lot of constituencies.

Matt Warman: I agree, and it is interesting to note that the target that we will have in Lincolnshire is 86%, which is obviously some way below 95%. In Herefordshire, I believe that the target that people will end up with is about 40% superfast coverage, so various rural counties have big issues.

Victoria Atkins (Louth and Horncastle) (Con): My hon. Friend and I have the pleasure of representing the east of Lincolnshire, which stretches from the sweeping coastline across to the rich agricultural fens and the rolling hills of the wolds. The only cloud in the sky is the fact that BT tells me—with some pride, it seems—that overall coverage in Louth and Horncastle is 22%. Can we please remember that when we talk about 95% coverage, that figure is very much an aspiration in Louth and Horncastle?

Matt Warman: I am delighted that my hon. Friend reminds me of the variation in BT’s performance even within Lincolnshire, and it is crucial that we discuss that variation today.

The next point to consider is that when we are talking about moving from 95% coverage to 99%, BT is by no means the only game in town. In other parts of the country, contracts have already been signed with companies such as Gigaclear, and I hope that Members who ask themselves how their own counties can get the best out of BT will look at those other contractors, which have been able to remind BT that there are other options available, because their existence sometimes seems to produce a marked improvement in BT’s performance.

The other issue affecting our move from 95% to 99% coverage remains the provision of 4G and subsequently 5G; I think that is the first time that they have been mentioned in this debate. Many Members have applied to speak in the debate, and the two questions that I would like them to ask themselves are, “How do we get the best out of the contracts that we have already?” and “How do we apply maximum pressure to best fund the roll-out, which will be expensive but more than worth while, to go from 95% to 99%?” I contend that a big part of that movement from 95% coverage to 99% should be not only fibre broadband but 4G and 5G, and there is also a place for satellite broadband.

24 Jun 2015 : Column 289WH

I have a final point to make, which is that BT’s relationship with BT Openreach is currently being considered. I know that there is a range of views in the House about BT and Openreach. I urge only that the competition authorities seriously consider whether the best interests of the consumer are being served by BT’s current relationship with Openreach. I look forward to other people expressing different views during the debate.

I will close by saying that when we talk endlessly about the vital importance of infrastructure, it is often roads and railways that we emphasise, but when I talk to constituents it is almost always broadband that comes up as the most important infrastructure project for them, and they would like to see faster speeds, including in their own houses.

Stephen Phillips (Sleaford and North Hykeham) (Con): At the risk of turning this into a Lincolnshire-only debate—important and desirable as that would be—I must say that my hon. Friend is making a great case for the fact that, as we all know and as is shown by the number of attendees in this debate, broadband is now absolutely essential. At a parish council meeting last night, a parish councillor who is a constituent of mine told one of my district councillors that her children want to move from Wilsford to Sleaford, because there is better broadband in Sleaford. They have to link to the school computer for their homework, and they cannot get that link.

Does my hon. Friend agree that this issue is so important now because we simply cannot conduct our lives, and everything that we have to do to interact with Government and everybody else, without access to good broadband? That is why it is so important, not only in urban constituencies but in rural constituencies; indeed, it is particularly important for rural Britain.

Matt Warman: My hon. and learned Friend pre-empts my final point. Superfast broadband is important not simply because it allows our constituents to watch all the stuff that is associated with broadband—all the entertainment from the BBC and all the gaming that we hear so much about—but because it allows the business of government to become so much more efficient, whether telehealth or rural farm payments.

Sir Paul Beresford (Mole Valley) (Con): I should like to fire a non-Lincolnshire shot. My hon. Friend has talked about the infrastructure. As one gets to London and Surrey, where there have been enormous efforts, it is other infrastructure—railways, roads and so on—that causes the difficulty. Has he noted that the BT contracts seem to be selective or blind-eyed, so that when it becomes difficult the company works around such infrastructure and we are left with islands and pockets, which should have been prevented in the contracts?

Matt Warman: My hon. Friend raises an excellent point. We must, when we consider how state aid works, go to the areas that need the help, rather than subsidise a commercial roll-out that would take place none the less. The construction of such contracts is crucial, as is councils having the expertise to ensure that they get the best out of those contracts. I know that a number of colleagues want to mention that.

24 Jun 2015 : Column 290WH

Richard Burden (Birmingham, Northfield) (Lab): I congratulate the hon. Gentleman on securing the debate. I should like to press him on urban “not spots”. Often, the most isolated areas have good broadband coverage where the commercial contracts have worked, but little bits are left, often in residential areas, and we cannot even get the commercial firms to be transparent about where those areas are, let alone do what is necessary. Does he agree that a lot more transparency and co-ordination is needed between operators, and often with local authorities?

Matt Warman: I agree. I hope that the House will look forward a couple of months, when more detailed maps of phase 2 roll-outs will allow us to look into phase 3. That will give constituents some clarity, which we so urgently need, so that we can say to people, “We know that superfast broadband is finally coming to your area, but it won’t be here for another two or three years,” or however long. That will at least allow some communities to make up their own minds about whether they would like to put their own money into helping to jump the queue, or whether they are content with the wait.

The lack of clarity has been damaging. Our postbags are full because people often tell us that an update on a website saying, for example, “Your cabinet will be upgraded within the next three months,” has remained the same for the past six months or longer. That is deeply unhelpful to us, to councils that are trying to oversee the process and to BT itself. We should acknowledge that sometimes the companies have been their own worst enemies.

Chris Bryant (Rhondda) (Lab): I, too, congratulate the hon. Gentleman on securing the debate. It is always interesting when a journalist comes into the House and speaks with authority on a subject, which does not always happen.

The hon. Gentleman mentioned state aid, and there is an important point to be made in that regard. A big concern expressed by many of BT’s competitors is that, given that every contract was won by one player, there is no clear, transparent evidence that state aid was not used to advance BT’s original intentions rather than meet the real needs of the country.

Matt Warman: The hon. Gentleman makes a powerful case for transparency, which is a key point. Many hon. Members have questioned, outside this debate, whether the process that we undertook with Broadband Delivery UK would necessarily be the way we went if we ran it again, or indeed if it is the way we should go when we think about further phases. That is also an important part of the debate, but the most important factor is that we should not allow our foot to be taken off the gas. We should not allow anyone to think for a moment that we are not all committed, on a cross-party basis, to getting Britain from 95% coverage to 99% and beyond, in the best possible way for both the taxpayer and our constituents.

Finally, before I allow many other hon. Members to speak, I add that what we have achieved over the past five years is remarkable. The risk is that in looking at the final 5% we will not only fail to close the gap between 95% and 99% but leave tiny “not spots” that will effectively be ruled out of serious coverage forever because they

24 Jun 2015 : Column 291WH

are not part of a co-ordinated, serious national programme. I hope that a serious case is made in this debate for acknowledging all that BT has done in trying to make its best practice standard practice across the country, and for its continued ongoing investment in the programme. I also hope that a serious case is made for no community being left behind.

Several hon. Members rose

Mark Pritchard (in the Chair): Order. Before I call the next Member to speak, I have some guidance. There are 26 Members who have put in to speak today and just over 70 minutes to allocate to them. I know that Members will be mindful of each other, given that three Front-Bench spokesmen will speak later, in the final 30 minutes.

In addition, interventions should be short. Be mindful of the fact that, if you intervene more than once, you may slip down the list. I am not sure, but you may. I thank Mr Phillips, who has withdrawn his name having made an intervention, allowing other Members a little more time—notwithstanding his Lincolnshire roots.

2.46 pm

Albert Owen (Ynys Môn) (Lab): It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Boston and Skegness (Matt Warman). He talked about rural issues not being the main issue, and I accept that. However, there is a double whammy for people on the periphery of a rural area. It is a great place to live, but businesses complain that it is not a great place to do business. I speak on behalf of businesses, including tourism, and on behalf of many others.

We are not a semi-detached area. I believe Ynys Môn is the heart of the British Isles. It is very close to Ireland and to England, and south of Scotland, so it is the centre of the British Isles. Business is in many ways London-centric, and Cardiff-centric in Wales, so we do feel left out.

I welcome the Government’s making progress, which has been mentioned, but I am afraid it is not sufficient in areas on the periphery of the United Kingdom.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman mentioned peripheral areas. The Faroe Islands, between Scotland and Iceland, are a peripheral area in Europe. Each and every house in the Faroe Islands has wired broadband: that is a choice their Government made and it has happened. I suggest to the hon. Gentleman that if we made such choices, we too could achieve that. In the meantime, 4G surely has a huge part to play in the inevitable “not spots” continuing to exist in the UK, although not in the Faroe Islands.

Albert Owen: The hon. Gentleman makes the case well. The Faroe Islands is a great example. I have learnt something today. Where there is the political will, there is a way. In the 21st century, this should be a necessity for rural areas, not a luxury.

The Minister highlighted some good working practices in previous debates. The Welsh Assembly has a good working relationship with the UK Government and the European Union in delivering superfast broadband in Wales. That has been working well, to an extent.

24 Jun 2015 : Column 292WH

Guto Bebb (Aberconwy) (Con): Will the hon. Gentleman give way?

Albert Owen: I will give way for the last time, because so many hon. Members want to speak.

Guto Bebb: Given how the relationship between the Welsh Government and BT has worked in Wales, is the hon. Gentleman proud that Wales has nine of the 20 worst performing constituencies in the country? Those constituencies have no broadband connectivity whatever, despite the fact that the Welsh Government levered in more than 50% of additional funding from Europe.

Albert Owen: If I have the opportunity, I will come to some of the figures comparing the nations and areas within Wales, but the hon. Gentleman is absolutely right—there are some poor performing areas in Wales, as there are in the rest of the United Kingdom. He is a close neighbour of mine and there are issues with the roll-out in his constituency, but I want to concentrate on the second-class service in peripheral areas, not only in broadband, but in mobile connectivity.

Broadband connectivity is essential for competition, enterprise and accessing public services. Limited and slow access to broadband in peripheral areas is against the Government’s policy of increasing online public service resources. They say we need that, but farmers in my area are always complaining that they have difficulty submitting their tax returns online, for example. The Government are encouraging them to do their tax online, but there are connectivity problems and I am sure that people are getting fined as a consequence of being late.

We have a great example. We heard about the Faroe Islands, but in the 20th century throughout the United Kingdom, in the whole of Great Britain and Ireland, the Post Office was able to deliver the same quality of phone line to every house, regardless of its location. The Minister will be pleased to hear that I am not advocating full renationalisation of all telecoms systems, but I am boldly making the point—[Interruption.] I know that the Minister is laughing at the first part of that, but he should not laugh at this: the market is letting areas of the United Kingdom down. That is why the debate is so important. We want to see the one nation that we all hear about—we are all agreed on it and we all use that terminology—but the United Kingdom is becoming two nations when it comes to telecommunications. The market is not working for parts of Britain.

The Minister has been in his post for some time, and I welcome him back to it, so he has heard the arguments, but I want to hear something different in his reply—I want to hear some answers. I do not want to hear him blame the devolved Administrations or local authority partnerships. I want to hear what the Government will do to close down black spots, which are not “not spots”; they are black spots, because they have little or no fast mobile or broadband coverage. Let us remember that peripheral areas pay more for their petrol, diesel, utilities, gas and electricity. They pay more for goods in many ways, and the wages are often lower than in other parts of the United Kingdom.

I was on the Select Committee on Energy and Climate Change and, when talking about smart meters, I questioned the companies that have been delivering them on behalf

24 Jun 2015 : Column 293WH

of the Government. We have been discussing 95% coverage and, similarly, I can guess where the 5% of “not spots” will be from day one; they will be in peripheral areas. Smart meters are not in the Minister’s brief, but generally we should be starting pilot schemes in some of the rural and peripheral areas, then rolling out from there, rather than doing what the companies want and basing schemes on the number of people living in an area.

These are not left-wing or liberal views; they are the views of many ordinary constituents of mine, as well as of the Countryside Alliance, which has lobbied me, the National Farmers Union and the Farmers Union of Wales. The Minister should take note of not only what we are saying here on behalf of our constituents, but what such groups are saying collectively. They are making the case to improve commerce in their area.

The previous Secretary of State, the right hon. Member for Bromsgrove (Sajid Javid), talked tough with the mobile and broadband companies but failed to deliver. To be frank, he let them off the hook in the previous Parliament, and I do not see much improvement in speed and access. Goalposts are being moved by the Government. The former Economic Secretary was good at giving us updates in the House, but all he did was delay and push 2015 back to 2016 and then 2017. The mobile phone companies in particular are now repeating that mantra.

I realise that we are short of time, but slow speeds need to be improved quickly. To help the hon. Member for Aberconwy (Guto Bebb) with some of the figures, parts of Wales are behind, with an average of 60% superfast broadband, including the large conurbations. Northern Ireland does exceptionally well, with 94% superfast broadband, so it can be delivered to peripheral areas where there is political will, and the Northern Ireland Assembly has proved that. England has 80% superfast broadband and Scotland has some 64%. We need to ensure superfast broadband throughout the UK quickly. I want to see BT and the Welsh Government working with the UK Government and the European Union to ensure that we have the funds to make that happen.

Many of the cabinets and exchanges in my constituency have the facility and the infrastructure, but we are talking about the last mile—although when it comes to rural areas, it is not one mile but many, and that is the problem. Many commercial companies do not see the value in rolling out from the cabinets and exchanges to households and businesses in my constituency. I speak for many people in peripheral and rural areas when I say that we need superfast broadband as a matter of urgency. We want the 21st-century access to goods that everyone else in the large towns and cities of the United Kingdom has.

Mark Pritchard (in the Chair): I cannot comment on the content of the speech, but I can observe that it was nine minutes long, which I hope can be avoided in the next speech.

2.56 pm

Neil Parish (Tiverton and Honiton) (Con): It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my hon. Friend the Member for Boston and Skegness (Matt Warman) for securing the debate.

24 Jun 2015 : Column 294WH

Lincolnshire is a hilly part of the world, but it is probably not quite as hilly as Devon. In the Blackdown hills, which are part of my constituency, we have huge problems in getting broadband. We talk about 95% broadband being delivered to the country, but we are bordering on 50% in my constituency and most of the Blackdown hills are not getting any broadband at all, with many villages being left out.

There is also a lack of transparency. The confidentiality clause in the last contract let by Devon and Somerset has led to huge problems. In the new contract that Devon and Somerset are being asked to sign, BT is asking for an extra £35 million and three more years to deliver the broadband, most of which should have been delivered by 2016. What sort of deal is that, I ask the Minister? It is no sort of deal whatever. We are being held to ransom for the simple reason that the waiving of the state aid rules lasts only to the end of this month, in a few days’ time. BT is holding a gun to the head of Devon and Somerset and saying, “If you don’t sign, you’ll be outside the state aid rules. What will happen then?” That is wrong.

BT is a very good company, but it is dominant in the marketplace. It is delivering good broadband in many parts of the country, but in others it is simply not delivering. What are we doing as a Government—what is the Minister doing—to stop that happening? I have every confidence in the Minister, who I have had many meetings with, but I want action—not warm words—to ensure that BT delivers.

All our constituents are being put at a disadvantage, and many farms and businesses will probably not get broadband until 2020 or beyond. In the 2020 election campaign, do hon. Members from any party in the House want to go around the villages that do not have any broadband and face the consequences? That is the reality, because all the time BT is rolling the programme further back—not further forward—and that is the real issue. I want a clear indication from the Minister that, if we are to have a dominant BT in the marketplace, which I have no problem with, I expect the Government and Ministers to ensure that a deal that can be signed is brought to Devon and Somerset.

The other issue for the Government is that Devon and Somerset have had some £100 million of taxpayers’ money from council and Government taxes for this; if BT does not deliver, the Government cannot deliver the 95% target by 2020, because of the size of the scheme—it is as simple as that. If Devon and Somerset are prepared to sign another contract with BT, I ask again that BT honour its commitments, deliver the broadband it has already said it will and put in the contributions it said it would make—we have yet to see the colour of BT’s money, which does not bode well.

My final point is that Dartmoor and Exmoor have a new arrangement with a company that is delivering the scheme by wi-fi; that seems to be getting under way very quickly. BT has said it has looked at new technologies, but is still rolling out fibre-optic cables and cabinets. If a place is a long way from the cabinet, broadband costs a fortune and may not even be put in. Why is BT not using new technologies? I would like the Minister to answer that.

24 Jun 2015 : Column 295WH

3 pm

John Woodcock (Barrow and Furness) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Pritchard. I, too, congratulate the hon. Member for Boston and Skegness (Matt Warman) on securing this debate.

I will be brief, as the main themes have been well aired already. I want to raise specifically with the Minister the issue of two areas in my constituency that are being appallingly served by BT, Askham and Kirkby-in-Furness. I have been deluged by complaints from constituents who have just about managed to get internet access to email me in advance of the debate, because they knew I intended to speak today.

The situation in Askham concerns a particular cabinet. It is the sort of case that will be familiar to many hon. Members present—indeed, the hon. Member for Boston and Skegness gave a good account of how BT seems to shift the goalposts. People in Askham were promised a cabinet. They were then given the excuse that the road around the cabinet site was eroded; if the Minister wants to come and look at the cabinet—I am sure that will be high up on his to-do list at the start of the new Parliament—he will see that that excuse is a nonsense. They were then given a second excuse, namely that there was no land on which the new cabinet could be sited that was not private. But anyone looking at the site would see that those excuses do not hold water. Hundreds of people in Askham are tearing their hair out.

The situation is similar in Kirkby. The service is going significantly backwards and BT has not given a date by which it will be fixed. I do not like having to name and shame a company for poor service, but I am afraid that is what we have to do in Parliament, given BT’s intransigence on this.

Mr MacNeil: Might it be a solution to have a specific fund for cabinets? Once the network is laid out, the problem will be getting cabinets that can be spurs off the network to local communities.

John Woodcock: The hon. Gentleman makes an interesting suggestion and one that the Minister may want to consider, but as far as I am concerned—and as far as my constituents are concerned—a promise was made by Government to deliver superfast broadband and another was made by BT to facilitate that, and we should hold both to account, whether or not a separate fund for cabinets is created.

I do not like having to raise this issue in Parliament, but we are going to keep banging on about this to BT until it fixes the issue. I hope the Minister will be able to give us some reassurance that the Government will intervene, if necessary, to sort the problem out.

3.4 pm

Mark Field (Cities of London and Westminster) (Con): I congratulate my hon. Friend the Member for Boston and Skegness (Matt Warman) on securing the debate. I suspect he will not speak to such a full Chamber for much of his first term in Parliament. The attendance today reflects the importance attached to this issue by all hon. Members.

It may not have escaped my hon. Friend’s notice that I do not have the most rural of constituencies, but there are also significant issues with superfast broadband in

24 Jun 2015 : Column 296WH

urban areas. The hon. Member for Hackney South and Shoreditch (Meg Hillier) is well aware of that, as it is something we addressed in the last Parliament.

Emily Thornberry (Islington South and Finsbury) (Lab): I believe that I know what the right hon. Gentleman is going to say. In advance of his speech, may I say that, despite the fact that he sits on the Government side of the Chamber, I am likely to agree with everything he says on behalf of my constituents in Islington South and, in particular, Tech City?

Mark Pritchard (in the Chair): Order. Before the right hon. Gentleman continues, I will just remind the hon. Lady that she has only just arrived in the Chamber, so did not hear my earlier comments about the number of interventions and their brevity. I hope next time she will arrive a little earlier in order to hear the Chair’s remarks.

Emily Thornberry: I hope that my intervention was short enough, Mr Pritchard.

Mark Field: London councils will have a chance to have their say as well. I thank the hon. Lady for her kind words. She tempts me to start a different speech—there are various things I should love to say today if she is going to be agreeing with every word.

One of the most significant delays in connecting a business or resident to broadband infrastructure, even in the heart of London, is the time taken to negotiate the legal permissions that are needed to allow that infrastructure to cross the public highway or to take it into a building. That is particularly the case in built-up areas. It can take some 18 months for the parties to conclude those negotiations; the usual period is about eight months. During that time, of course, a broadband provider will not be able to supply the building.

To speed up the process, the City of London corporation is leading a group of central London boroughs—including Islington and Hackney—known as Central London Forward in a project to produce a standardised agreement for permission to install broadband infrastructure. I am pleased to say that Westminster City Council, my other local authority, is also a main leader on the project. The City and Westminster councils have invited all the key players to participate, from broadband providers through the great estates in the west end to major developers across London.

The product of all that activity will be a standardised agreement known as a wayleave, which all parties will be able to use as a template for their negotiations. I have no doubt that such a standardised agreement will speed up connections to broadband infrastructure, because parties will not have to start their negotiations from scratch. The Minister has played a leading role in the process, and I thank him for helping to contact the key parties and for championing activities to improve broadband connectivity.

Although the Minister can happily say that Greater London compares favourably with other world cities, with 88% coverage, that figure is not reflected in what is the economic heart of the capital, and indeed the country. It is not just my constituents who are missing out but the entire UK economy, and he will appreciate just how important it is that digital infrastructure in central London does not fall behind that of rival global cities.

24 Jun 2015 : Column 297WH

Locally, BT’s approach seems to be based on a belief that there is insufficient demand to invest further. I share some of the concerns that have already been raised about that. As well as the more distant rural parts of this United Kingdom, large swathes of urban areas—with important small and medium-sized enterprises—are poorly served, and are restricted to woefully outdated copper broadband. In addition, as my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said, the European Commission is preventing the Government from subsidising the roll-out of superfast broadband in inner cities and beyond. Perversely, that means that remote villages sometimes have better broadband connections than those available in my constituency, which contains the political, business, cultural and technological heart of the UK.

There has been a significant market failure. I may not express this quite as robustly as it was put earlier, but I will be interested to learn what the Minister is doing to address the problem. I accept that it requires co-operation with internet service providers, Ofcom and the European Commission, but it is time we stepped up to the plate. Although I hope we will not have such a well-attended debate in future, simply because I hope many of the problems will have been solved, I look forward to hearing the contributions of hon. Members from both sides of the House today. It is beholden on the Minister to recognise that this is a very real problem, not just for outlying rural areas but for the heart of our cities.