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Alec Shelbrooke (Elmet and Rothwell) (Con): My right hon. Friend is right to focus on the humanitarian crisis in Greece, but does she agree that the wider region is important? For those who criticise the international aid budget, does she agree that not investing the 0.7% in countries such as Turkey, Lebanon and Jordan, which have taken in millions of refugees, would mean a far bigger reduction in our growth prospects? This is not just morally the right thing to do, but is the sensible thing to do.

Justine Greening: I agree very strongly with my hon. Friend. By pursuing the UK aid strategy of doing the right thing by some of the poorest and most vulnerable people in the world, we also do the right thing by ourselves. Perhaps the worst long-term challenge of the many facing Syria is that many of its best and brightest are leaving the region. The more we can help people to stay close to home and close to their families, the more we prepare for Syria to have the people it needs to help it get back on its feet. As it stands that prospect seems a long way off, but that does not mean we should not try to do our best to achieve it.

Keith Vaz (Leicester East) (Lab): The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) and I were told last Thursday by Europol that 90% of the migrants who enter the EU do so because they are supported by organised criminal gangs. When will we get a statement from Ministers to tell us that there is success against the organised criminal gangs that are doing so much damage to the people of Europe? When is Turkey going to get the €3 billion we promised it to help it to deal with this crisis?

Justine Greening: The right hon. Gentleman will see that on the Treasury Bench with me is the Minister for Immigration, my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), who I am sure will respond to his point on progress in tackling organised criminal gangs. Our National Crime Agency works very closely with Europol. He will be aware that we also played our role in saving lives in the Mediterranean with Royal Navy and Border Force cutters. The €3 billion has now been agreed. In fact, we managed to agree it in time for the London conference, which again was a step forward. The key is making sure that it is delivered and that the strategy behind how it is invested is strong. That needs to involve not just the day-to-day support for refugees who Turkey is very generously hosting—we should remember that Turkey has taken in 2 million refugees—but getting children back into school and progress on effective border control. The package now in place needs to be very carefully delivered not only by the EU, but by Turkey itself in terms of how it uses that investment.

John Howell (Henley) (Con): I congratulate my right hon. Friend on the position she has taken in this crisis. I urge her to continue to put the emphasis on the refugee camps, which will have a big destabilisation effect in places such as Jordan. I wonder, given the expertise of her Department, whether she can say a little more about the technical assistance she is providing to Greece.

Justine Greening: It is in several different areas. Part of it is more Home Office-related assistance on border management, and part of it is humanitarian, working

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through UNHCR and, latterly, assisting UNICEF on child protection. Although we often focus on the amounts of aid we are giving, the most effective aid is often technical assistance, which is very cost-effective and highly effective in terms of outcomes.

Mr Alistair Carmichael (Orkney and Shetland) (LD): The Secretary of State is absolutely right. Solving this crisis will require a co-ordinated approach across Europe. Surely, however, it is now apparent that to get that co-ordinated approach, we have to have some acts of political leadership? Last year, 90,000 unaccompanied children registered and applied for asylum in Europe. Does that not demonstrate the modesty of the call for this country to take 3,000? Surely this is a time when the Government should say yes to that very modest call for political leadership.

Justine Greening: We have shown political leadership, not just in terms of the scale and the shaping of the humanitarian response in the region but in how we have responded to it closer to home. As I have said, Britain has done more than any country to provide support to refugees more broadly. As I set out to my hon. Friend the Member for South Cambridgeshire (Heidi Allen), we have done a huge amount of work to support unaccompanied children. Many Parliaments across Europe will be debating this issue, but few will be able to be as proud as the UK, given the work across government and the support being provided by so many British people to refugees in the region and to those arriving in Europe. I can reassure him, as I did my hon. Friend, that we are working very hard on the issue of unaccompanied children. We are absolutely playing our role.

Dr Andrew Murrison (South West Wiltshire) (Con): I am really proud of the fact that this country is the biggest financial contributor in Europe to dealing with this crisis—a point that is too easily dismissed by Opposition parties. However, the Independent Commission for Aid Impact is far less sanguine about the contribution of the European Union. What can my right hon. Friend do to put pressure on her interlocutors to ensure that some of the money that the EU gives to loony projects is diverted to assist in this crisis within our own European borders?

Justine Greening: As my hon. Friend probably knows, I am what I would call an aid disciplinarian. That probably comes from my innate chartered accountant perspective, which means I always need to see effective projects that are well run and deliver value for money. That is absolutely what we have been pressing for and working with the European Union to do. Our push has essentially been to see the EU mirror the UK strategy on doing more effective work in the affected regions and see it step up to the plate on managing this crisis closer to home, which is what today’s announcement seems to be about. It is good to see the EU starting to move in the right direction. Of course, we took further steps at the London conference a few weeks ago, which we also welcomed.

Ms Karen Buck (Westminster North) (Lab): It is hard to overstate the national and regional dangers from Greece becoming a giant refugee camp. That is all the more the case because the refugee crisis cannot be

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disentangled from the crisis in the Greek economy and infrastructure. When I visited a refugee camp on one of the islands, I found that the island had already lost its healthcare service, as have so many other islands. In addition to the humanitarian assistance, which is very welcome, what discussions are the British Government having within the EU to discuss the state of the Greek economy, which is very heavily dependent on tourism? There is a risk that the Greek economy will implode under the pressure of a growing refugee crisis this year.

Justine Greening: At the ministerial meetings I attend as a Development Minister, we discuss the challenges that we face much closer to home. We should learn from what has happened in Jordan and Lebanon—that we should not expect countries to be able to cope on their own when they suddenly see huge numbers of people flowing in that they were not expecting. It is not simply a matter of financial pressures because pressures are placed on local communities. That is why the UK has done a lot and why I welcome the announcement that we think is coming from the EU today. This is the right thing to do for the refugees that are arriving. As has been said, it has taken some time for the penny to drop across Europe about what needs to be done closer to home, but I am proud of the work that the UK has done in trying to make sure that the levels of support that people need are now being put in place.

David T. C. Davies (Monmouth) (Con): Does my right hon. Friend agree that the British public want to help and welcome it being provided for genuine refugees, particularly the women and children from minority groups? However, many are concerned at the arrival of large numbers of fit and able young men who have left their families behind, often claiming to be younger than they are, often having cultural attitudes towards women and gays that are unacceptable in Europe and often coming here for economic reasons. Do we not also need to send out a message that those people should not be able to come here in large numbers?

Justine Greening: I think there are two elements here. One part is responding to the humanitarian crisis itself. As my hon. Friend says, a number of genuine refugees caught up in the Syrian crisis are coming over, but there is also the crisis in Iraq, particularly with the impact of Daesh in northern Iraq, which has also led to refugees coming over. As he points out, another part of the problem is economic migrants. That is why it is so important to have strong processes in place to deal with refugees and asylum cases, but also with migration. As a London MP, I often deal with immigration casework, so I am perhaps as familiar with it as any other MP in this Parliament. Having strong processes in place to work through those different cases is vital. That is why, despite the emotional pressures, we are right to stick to that plan and stick to our strategy—that Britain should have the ability to set its own rules on migration, which is why we are not in the Schengen area.

Alex Salmond (Gordon) (SNP): Apart perhaps from a couple of contributions from Tory Members, the Secretary of State will have heard a cross-party consensus today that we are dealing with a humanitarian and a refugee crisis. There is a great deal of cross-party support for a friendly reception for the efforts made in region by the Government. Will the right hon. Lady therefore

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respond by accepting that the scale of the issue we now face requires a re-examination of the scale of the bilateral support to Greece? Secondly, without a meaningful contribution to the resettlement—and I mean a meaningful contribution—will it not be more difficult to get the solidarity across Europe that will be required to deal with this issue properly?

Justine Greening: As ever, we will continue to make sure that the support we give to all the countries affected by the crisis is at a level that we think is sensible. As I have set out, Britain has, frankly, done as much as any in helping refugees who are arriving in Europe. That is why a significant proportion of what we provide has been given to countries such as Greece where the refugees have arrived. I do not agree with the right hon. Gentleman’s second point about our approach to relocation. I think our approach is the sensible approach, one that is increasingly recognised across Europe as sensible and pragmatic.

My final point to the right hon. Gentleman is that the people we are able to relocate are the most vulnerable people from the region, those identified by agencies like the UNHCR as needing to be removed from the region in order to get back on with their lives and receive the support they need to do so. I think we are right to focus on the most vulnerable people affected by this crisis; that will continue to be our approach.

Henry Smith (Crawley) (Con): I thank the Secretary of State and the Government for the leadership they have shown in making us the biggest donor of humanitarian support in region, after the United States. Does my right hon. Friend agree that the refugees from the middle east are the victims of terrorists and traffickers, so taking into the United Kingdom the refugees who have already reached the safety of Europe is simply playing into the hands of those evil traffickers who are exploiting people so appallingly?

Justine Greening: I think my hon. Friend is right. In the end, there is no getting away from the fact that overwhelmingly people want to stay in the region where they had their home and grew up—the area with which they are most familiar and where their closest family is likely to be based. I think the failure of the international community to do enough is what has led to the sorts of flows that we are now seeing. That is why the London conference a month ago was so important. It is also why we need to see more countries doing more in the region. We should not lose sight of the need for more international leadership, matching that of Britain, in the region so that refugees can be supported in countries such as Jordan and Lebanon. They have been generous, but they are saying that this is an extremely difficult situation for them to cope with. Let us not lose sight of that.

Derek Twigg (Halton) (Lab): Greece is, of course, a great country and an important and long-standing ally of ours. The people of Greece, however, are still suffering badly from the financial crisis, and the refugee and humanitarian crisis is pushing them to the brink. Help from the EU has so far been slow and inadequate. Despite what has been said today, does the Secretary of State truly believe that the EU strategy to give Greece the proper help that is needed is in place? Does she not agree that a lot more needs to be done?

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Justine Greening: As ever, it is all about today’s announcement, which we understand to be about €700 million for the next three years, and about making sure that that money is invested sensibly. It is important that Greece itself is willing and able to work with NGOs on the ground and with the UNHCR so that the best work can be done. One of the biggest changes affecting Jordan and Lebanon that has enabled us to help to create more jobs was the important decision of those countries to allow refugees to have work permits. That enabled us to do more to help them get the jobs so that they were able to support themselves. It is important that we are able to work effectively with the Greek authorities to make the most of the additional resourcing and investment so that we can help people as much as we possibly can.

Mr Stewart Jackson (Peterborough) (Con): I fear that Members on both sides of the House are failing to acknowledge two pertinent facts. Not only has the European Union visited penury and misery on the people of Greece because of its cruel monetary policy, but that has been compounded by the fact that its largest member has completely disregarded, in a high-handed and arrogant way, the Dublin protocols that my right hon. Friend mentioned earlier.

May I ask what efforts the Government are making to distinguish between economic migrants and refugees, and—returning to an undertaking that the Prime Minister gave me before Christmas—what special efforts are being made to target our resources at the persecuted minorities in the middle east, particularly Christians?

Justine Greening: My hon. Friend has, in fact, raised three issues. First, we are working with the International Organisation for Migration to secure better data and evidence relating to the flows of migrants and refugees. Secondly, we are not in the Schengen area, which means that we can more readily make decisions on how to deal with the various people who seek to come to Britain, depending on whether they are claiming asylum, seeking refugee status or, indeed, just wanting to come here to work as migrants.

Thirdly, my hon. Friend is absolutely right to highlight the issue of certain minorities. I had a chance to go to Irbil, where I met, among others, Christian minorities who had been persecuted and caught up in the Iraqi crisis and the territorial gains that Daesh was making in Iraq at the time. I can reassure my hon. Friend that we are very conscious of the need not to lose sight of the groups who have been most affected by the crisis. We often talk of its impact on children, but, as he rightly points out, whole communities have been targeted in some areas.

Sammy Wilson (East Antrim) (DUP): There should be concern about the impact on Greece’s social structure of the double blow that it has experienced: first the effect of membership of the euro on its economy, and now the chaotic immigration policy that is being pursued by the EU.

Many Syrian leaders who are looking to the future are saying that people should be kept as close to Syria as possible, in well-organised camps, and not thrown into the hands of the traffickers who wish to smuggle them into Europe. What discussions has the Secretary of State had with the Governments of Jordan, Lebanon

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and Turkey about the resources that they need in order to sustain that number of people in their own countries, and what hope has she of persuading her EU partners to join the United Kingdom in stumping up some money to support those efforts?

Justine Greening: We have had many discussions with the countries that have experienced the biggest flows of refugees over recent years, particularly the ones that the hon. Gentleman has mentioned.

I think the London conference on Syria was especially important when it came to persuading other countries to step up to the plate alongside Britain, and to do more to help provide the resources that are needed by countries such as Lebanon, Jordan and Turkey. As the hon. Gentleman will know, at the end of last year the United Nations appeal was just over 50% funded, but following the London conference, only five weeks into this year, some 70% to 80% of this year’s needs have already been resourced. Nevertheless, we still need other countries to do more. The crisis will be ongoing for some time, and unfortunately, while I was delighted by the success of the Syria conference—the largest ever amount was pledged in a single day—it should be seen as the beginning, not the end, of the international community’s better response.

Mr David Burrowes (Enfield, Southgate) (Con): Riot police, tear gas and rubber bullets are increasing the risks to lone children, and, sadly, also increasing their price tag for trafficking purposes. I saw that for myself in Calais on Monday, and the situation is the same in Greece. There is no effective identification and processing of lone children, especially those with connections to the United Kingdom. Can the Secretary of State assure me that the welcome 28 January commitment to increase the safety of lone children in Europe, as well as in conflict zones, will help the desperately vulnerable children who have no hope of access to the safe legal routes to which she has referred, and prevent them from getting into the hands of traffickers?

Justine Greening: I hope I can provide that reassurance, which is, in a sense, twofold. First, it is about enabling vulnerable children in the region to be relocated when that is necessary, working with UN agencies. Secondly, it is about the £10 million fund that we established to make better and stronger identification possible so that we can get children into the system. We are providing funds to ensure that children receive the kind of specialist protection that they need, can be helped to understand how to deal with the situation in which they have found themselves, and can be given trauma counselling. Even when we have reached an “end point” in our work to help unaccompanied children, they will often need further support in order to be able to get on with their lives effectively because of the experiences that they have been through, and the United Kingdom is ensuring that, whenever possible, we can provide that as well.

Mrs Madeleine Moon (Bridgend) (Lab): The people traffickers are benefiting from a clear Russian policy: to weaken resolve in Syria, to create a crisis in Europe and weaken our humanitarian values, and to weaken neighbouring states such as Jordan, Lebanon, Greece and Turkey. Last week, Saudi Arabia told the Defence Committee that it had offered visas to Syrian families, allowing them to move in with their own family members.

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It has offered them work permits, and opportunities for education, employment and healthcare. Why can we not do the same for Syrian refugees who have clear links with the United Kingdom?

Justine Greening: We have a relocation scheme, and the Dublin convention provides routes enabling people with clear links to the UK to come here. Ultimately, however, we need a co-ordinated and managed approach to migration. We are not in the Schengen area—for all the right reasons, as we can see—and it is right for Britain to have the controls and rules that enable us to manage the flows of people coming into the UK.

The hon. Lady mentioned people smugglers and the impact of bombing. Although we obviously hope that the ceasefire holds, it is important for us not to take steps that would simply play into the hands of the criminals who are gaining from the crisis, and that is why we have taken the approach that we have.

Craig Whittaker (Calder Valley) (Con): I, too, am proud of the leading role in the provision of aid for refugees that the United Kingdom has played, not just over the last few months but for many years. What requests has Greece made directly to the UK for help? I know that the UK has been seeking a comprehensive EU response for months, but what more can we do to put pressure on the rest of the EU to help with the daily basic needs of the refugees in Greece, and at least try to alleviate some of the burden?

Justine Greening: We have humanitarian advisers in Greece who have been helping to ensure that the Greek strategy, including the way in which camps are being set up, is as effective as possible. We have also worked with the United Nations High Commissioner for Refugees. More recently, we have helped to provide child protection officers. The situation on the ground is complex, but I think we should recognise that the UK has helped to provide not only life-saving and core humanitarian support, but the technical assistance that can help the Greek authorities to do a more effective job themselves. I agree that it is welcome that the European Union is now responding with additional resources to mirror the kind of work that the UK has been doing, because that support has been badly needed.

Gavin Newlands (Paisley and Renfrewshire North) (SNP): Does the Secretary of State agree that the very last thing that families fleeing beheadings, bombs and barbarism need is to face barbed wire, tear gas and rubber bullets on their arrival in the EU? Will she please, as a matter of urgency, urge her Government to take a much more constructive role within Europe and to help to implement the EU action plan on migration?

Justine Greening: We are taking a constructive, proactive approach within the European Union. We are not part

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of the Schengen area, but that does not prevent us from clearly setting out our views on a more effective way of dealing with this crisis. Speaking in my capacity as Secretary of State for International Development, I think that one of the most important elements to that response has been to tackle the root cause of what is making people feel that they have no alternative to putting their lives in the hands of the people smugglers. That involves doing a better job of supporting those people in the region, closer to home and closer to their families.

Peter Grant (Glenrothes) (SNP): We certainly welcome the financial commitments that the UK Government have announced and are already providing. I echo the calls for the rest of the international community to match those commitments, but the fact is that no amount of money will ever provide enough schools, hospitals and homes to enable the 4 million-plus refugees to settle permanently in the small number of countries that the hon. Member for East Antrim (Sammy Wilson) mentioned earlier, given that those countries are already looking after millions of refugees.

Information from Eurostat shows that, relative to the population of each country, Greece receives twice as many asylum applications as the United Kingdom, while Italy receives two and half times the number and the EU as a whole receives five times the number. Some countries, such as Hungary and Sweden, received 30 times as many asylum applications as the United Kingdom does. Does the Secretary of State agree that those figures destroy once and for all the myth that the refugee camps are full of people whose chosen destination is the United Kingdom?

Justine Greening: On the hon. Gentleman’s first point, we have an ambition to get every Syrian child who is missing school because of this crisis back into school by the end of the forthcoming academic year. One of the key outcomes of the London conference on Syria was to get the funding for those plans. We know that we can achieve this because we have already helped half the children to get back into school. We now need to finish the job. More broadly, he talked about the intentions of refugees arriving in the EU. The reality is that there are large Syrian diasporas in Germany and Sweden, and many of the people arriving on the shores of Greece might want to join their families in those countries. In the end, however, we need a more co-ordinated approach that recognises that countries such as the UK are not in the Schengen area and that we want to take our own decisions. There is no getting away from the fact that as a last resort people are putting themselves in the hands of people smugglers, but their first choice is almost always to stay in the region. Following the Syria conference in London, we need more action taken internationally to deliver on that.

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Points of Order

2.12 pm

Tom Brake (Carshalton and Wallington) (LD): On a point of order, Mr Speaker. You will recall that on 2 December last year, the Prime Minister came to the House and sought permission to extend into Syria the RAF airstrikes that were taking place in Iraq. In the motion, he undertook to provide quarterly progress reports to set out the impact of the strikes on Daesh’s finances, its fighters and its weapons. The basis on which the support of the House was given was that we would receive those regular updates, which would also tell us whether there had been any UK involvement in civilian casualties. A quarter has now elapsed since 2 December, and I seek your guidance as to whether the Prime Minister has sought to provide such a progress report to the House and, if not, what action I could take to ensure that he does.

Mr Speaker: A very brief, and I hope accurate, mental calculation suggests to me that there have been 101 days since the date to which the right hon. Gentleman refers. It is perfectly possible that the Government are contemplating such a statement, and if they are not doing so, it is possible that they might do so as soon as the news of his point of order wings its way towards the relevant departmental Minister, or even to the Prime Minister himself. If that transpires not to be the case, the right hon. Gentleman is a very experienced Member and a former Deputy Leader of the House and he will be well aware that he could pursue the matter at business questions, for example, or through the use, on other days beyond today, of the device that can help to secure a ministerial presence. Knowing him as I do, I know that he will utilise all the weapons at his disposal.

Alec Shelbrooke (Elmet and Rothwell) (Con) rose—

Mr Speaker: The day would not be complete without hearing a point of order from the hon. Member for Elmet and Rothwell (Alec Shelbrooke).

Alec Shelbrooke: On a point of order, Mr Speaker. I seek your support and advice. You will know that last week we had an important urgent question about mental health, and you will recall that when I asked a question on that occasion, I commented on the fact that the writers of “Coronation Street” had done a great service to those with mental health issues by addressing the stigma and other relevant issues. It will not have escaped your notice that the creator and original writer of “Coronation Street”, Mr Tony Warren, has sadly passed away at the age of 79. Is there any way in which it could be noted, through you in the Chair, that the contribution to society as well as to entertainment of great pioneers such as Tony Warren has led to a great improvement in British culture and a greater understanding of our country?

Mr Speaker: My feeling is that the hon. Gentleman has found his own salvation. He has achieved his mission. Moreover, he knows that he has done so. No real contribution from me is required, other than to acknowledge that he has paid fulsome and gracious tribute to someone who proved to be a change-maker. I am sorry to learn of that gentleman’s passing, but he has been honoured by the hon. Member for Elmet and Rothwell today.

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Employment Status (Review)

Motion for leave to bring in a Bill (Standing Order No. 23)

2.16 pm

Mr Jim Cunningham (Coventry South) (Lab): I beg to move,

That leave be given to bring in a Bill to make provision about the establishment by the Secretary of State of an independent review of the operation of the Employment Rights Act 1996 in relation to the determination of employment status and dispute resolution mechanisms for employers and employees relating thereto; and for connected purposes.

My Bill calls for something that is long overdue: a full, independent review into the law surrounding self-employed workers and their rights. The need for this was demonstrated by the collapse of City Link in my constituency and those of other Members. The delivery firm went into administration just over a year ago, with employees being informed on Christmas day 2014. Roughly 2,700 people, along with 1,000 contractors, lost their jobs. Those contractors, and the situation that was forced upon them, form the inspiration for this Bill.

A number of concerns were expressed about City Link’s collapse and about how it might have been handled better. It provoked a joint report from the Business, Innovation and Skills Committee and the Scottish Affairs Committee—a report on the impact on employment of the closure of City Link was published in March 2015. City Link viewed its drivers as self-employed. The drivers provided their own vans, but were required to wear the company’s livery and were not permitted to work for anyone else. Those drivers were employees in all but name.

The Business, Innovation and Skills Committee stated:

“Contractors and sub-contractors providing drivers for City Link have been hit particularly hard by its closure.”

That is because they were unsecured creditors and were unlikely to receive the vast majority of the wages they were owed. The administrators’ statement of proposals found that they could expect to receive less than 2p in the pound. The Select Committee further noted that the financial difficulties of the contractors were worsened by the fact that they had been encouraged to take on additional staff and vehicles and to work longer hours in the lead-up to Christmas, despite the doubts over the company’s future. Gordon Martin, of the RMT, told the Committee that, due to assurances from City Link:

“People, through the business, went out and bought additional vans to put on the road. This is a human tragedy across the piece. People are thousands of pounds in debt. Who knows how they are going to pay?”

That context is important in outlining the vulnerable position subcontractors can be in when a company goes into administration. The underlying issue here that I wish to raise is bogus “self-employment”. The RMT told the Committee that the self-employed drivers were

“tied to the company; they have to wear the uniform and they have to use the company livery on the vehicles…That is the way the market is, unfortunately, but they are employees by any definition, other than the fact that they have an arrangement in place where they seem to be divorced from the company but are employed by it.”

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Crucially, the Select Committee accepted the RMT’s analysis that this was direct employment in everything but name.

Why does this matter? All rights under employment law are contingent on employment status, be it as an employee, worker or someone self-employed. The self-employed have few rights. They are not entitled to receive sick pay, holiday pay or the national minimum wage, and are responsible for their own taxation. Workers have a number of basic rights, including the right to the minimum wage and annual leave. Employees have the same rights as workers, plus additional rights, including the right not to be unfairly dismissed and the right to redundancy pay. An employee is an individual who works under a contract of employment, which means that employment rights turn on whether or not the contract under which a person works is a contract of employment.

Self-employed persons are instead regarded in law as providing a service for a customer or client. The distinction is often described as the difference between a “contract of service” and a “contract for services”. The question that needs addressing is how to make sure that people are on the type of contract that accurately reflects their work. I am not in any way opposed to people being self-employed—I am sure that in many situations it is extremely useful. What I object to is people being denied the right type of contract for their work and therefore not getting the employment rights to which they should be entitled. The difficulty is: how does someone know whether they are on the right type of contract? The Select Committee found that these drivers were employees in all but name, but that is no consolation to those affected. It should not be so difficult to determine whether a contract is an employment contract or not, or for someone to find out whether they are on the appropriate contract for their work.

Bogus self-employment is when an individual is treated by a company as being self-employed but their relationship with the company exhibits the features of an employment relationship. If the company says the individual is self-employed and the individual says he is actually an employee, there is only one way to settle the issue and that is by going to court. A contractor who wishes to challenge their employment status has to go to court, which is both arduous and expensive. Furthermore, the question of employment status is one of the issue most widely litigated on in employment law.

The House of Commons Library has kindly supported me in understanding the legal tests developed by courts and tribunals. Substantial criteria are involved, each of which is subject to volumes of case law, and this level of complexity in the law worsens the problem. An individual might suspect that he is an employee but would be unlikely to know whether or not he is, because the law is

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so complex. That means that some companies may be wrongly categorising employees as self-employed persons, depriving them of employment rights.

At the time of the City Link collapse I met the then Business Secretary, who, to his credit, was aware of this difficulty. Let me quote at length what he told the Select Committee:

“Before the City Link issue came up, I had initiated a thorough investigation of employment status, which we are now undertaking…there is what appears to be a growing number of people who are not genuinely self-employed but have, in some sense, fallen through the cracks. We are trying at the moment to get a handle on…how, at least through legislation, we might address that problem. We certainly acknowledge that it exists. It is a part of this wider debate…I would hope my successor, whoever it is, takes this seriously, because there is a gap.”

He then announced the review in October 2014. It appears that this review is internal, and we still do not know the outcome. In March 2015, in answer to a question from my hon. Friend the Member for Streatham (Mr Umunna), the then Minister responded by saying that

“a number of teams from across the Department for Business, Innovation and Skills have been feeding into the employment status review.”

Yet, in answer to a parliamentary question asked by my right hon. Friend the Member for East Ham (Stephen Timms) only this month, the Financial Secretary to the Treasury said that

“officials from HM Treasury, HM Revenue and Customs, the Department for Work and Pensions, and the Department for Business, Innovation and Skills will form a Cross Government Working Group for Employment Status early this year.”

I can only ask this: what have they been doing for the past year?

It is time for a proper review, led by experts in employment law, and I suggest that a leading employment lawyer is appointed to chair the review. We need greater clarity as to the criteria for “self-employment”. We need a forum where individuals can query or challenge their employment status without having to go to court, and I suggest that an ombudsman or a Government agency might be appropriate. We need penalties for companies that intentionally use bogus self-employment contracts, and we need to give full consideration to whether the rights and support we provide to the self-employed are adequate in today’s world.

Question put and agreed to.

Ordered,

That Mr Jim Cunningham, Chris Stephens, Colleen Fletcher, Mr Geoffrey Robinson, Mr Dennis Skinner and Steve McCabe present the Bill.

Mr Jim Cunningham accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 11 March, and to be printed (Bill 146).

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Estimates Day

[2nd Allotted Day]

Estimates 2015-16

Department for Business, Innovation and Skills

The Science Budget

[Relevant Documents:First Report from the Science and Technology Committee, The science budget, HC 340, and the Government response, HC 729.]

Motion made, and Question proposed,

That, for the year ending with 31 March 2016, for expenditure by the Department for Business, Innovation and Skills:

(1) the resources authorised for use for current purposes be reduced by £7,152,214,000 as set out in HC 747,

(2) further resources, not exceeding £195,006,000 be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £72,412,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Margot James.)

2.28 pm

Nicola Blackwood (Oxford West and Abingdon) (Con): We hold a position of great responsibility in the global scientific community; as a science powerhouse, not only do we set the bar for the quality of research, but we have a duty to take care that our spending and structural decisions do more than merely maintain the status quo. As we face down a century that is filled with infinitely complex societal challenges—ageing, chronic and complex illnesses and climate change—we have to acknowledge that we are in the hot seat. Our scientists and innovators in academia and industry will be at the forefront of the discoveries that will not only underpin the productivity of our economy, but ensure the sustainability of our way of life.

If we get our spending priorities, regulatory frameworks and immigration policy wrong, we will be on the wrong side of history. For that reason, the Science and Technology Committee chose spending on science and innovation as our first inquiry and ensured that we reported in time to make recommendations ahead of the spending review. It is also why we asked for this debate today, ahead of the Budget, to press on recommendations that have not yet been taken up, although we are grateful for the Government’s response.

Our findings received widespread support. The Times and the Financial Times published editorials endorsing our call to increase R and D investment. Sir Paul Nurse, president of the Royal Society,joined scientists up and down the country when he said that our report

“hits the nail squarely on the head.”

The evidence that we received was clear:

“We punch well above our weight”

in science and innovation.

John Howell (Henley) (Con): As my hon. Friend knows, my constituency houses one of the centres for fusion technology. In the context of her remarks, I wonder what she has recommended in relation to taking that forward and helping to develop it.

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Nicola Blackwood: My hon. Friend is absolutely right to be proud of the Culham Centre for Fusion Energy. I have visited it on more than one occasion. One of the fundamental proposals that we have made is to increase R and D investment in the UK. If he will listen a little further, he will hear exactly what we have proposed to ensure that the UK remains a world leader in that particular area of research.

With just 0.9% of the world’s population and 3.2% of the world’s R and D spending, we produce 16% of the world’s most cited papers and hold more than 10% of the world’s patents. We have produced 80 Nobel laureates. We have four of the world’s top six universities—I will, if I may, boast that one of them is in my constituency—and we attract more inward investment for research than any other part of Europe. However, it is not enough to be proud of the exceptional impact of our research base; we must also be mindful of the pivotal role that it plays in the goals that we have set ourselves as a nation.

As a Committee, we welcomed the Chancellor’s statement protecting the science budget in real terms, increasing the annual capital budget to £1.1 billion and maintaining the innovation budget at flat cash—albeit with £165 million becoming loans. We are also grateful to the Business Secretary, who gave evidence to the Committee in January, for reassuring us that not only would the ring fence for the science budget remain, but no additional organisations, programmes or spending lines could be added to that budget.

Although we welcomed that assurance, we would like to see those allocations for ourselves. The Business Secretary assured us that those allocations would be finalised in mid-February; it is now March and I am told that the negotiations are still ongoing. Will the Minister please tell the House what the hold-up is, and exactly when those allocations will be made public? We are concerned that as excellent as our research base is, commercialisation, though improving, remains sub-optimal. Crucially, despite the recent spending settlement, UK investment in R and D is internationally low at a time when our competitors are increasing R and D investment.

At 1.7% of GDP, the UK remains 12th among 28 member states for R and D investment; in 2013, Germany invested about 3%, China about 2%, and Israel and Korea about 4.2%. There is a reason why all our competitors are increasing their R and D while we lag behind. It is that R and D investment is proven to increase productivity and innovation growth. Science and innovation spending is not a subsidy, but a strategic investment that creates jobs, increases productivity and attracts inward investment.

Alec Shelbrooke (Elmet and Rothwell) (Con): Does my hon. Friend agree that research, pure research and discovering inventions often lead to some of the greatest creations? There were decades between the discovery of the electron and when we were able to use it, but it now runs every part of our lives today.

Nicola Blackwood: My hon. Friend is absolutely right. I often like to quote Lord Porter, who says that there are only two kinds of research: that which has been exploited and that which has yet to be exploited. That is why we must ensure that the entire pipeline from fundamental research all the way through to commercialisation is working at peak capacity.

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We must be mindful of the fact that, between 2000 and 2008, 51% of productivity growth came from innovation. We know that Government investment in research crowds in private sector investment, because the latest BIS analysis tells us so. It shows that £1 of public investment will increase private funding by between £1.13 and £1.60. It shows that firms that persistently invest in R and D have 13% higher productivity than those that do not. It shows that every £1 of public investment in R and D raises private sector R and D productivity by 20p each year in perpetuity.

Our top recommendation to Government was to produce a long-term road map to increase public and private R and D investment up to the 3% EU target. That would sit well alongside the national innovation plan, which I understand the Business Secretary is proposing. We are not alone in calling for that increase; other Select Committees and institutions have done so before us. In fact, it was BIS’s own analysis in 2014 that called for the UK to increase R and D investment up to 2.9%, which is the average of our competitors, commenting that those competitors do not appear to get poor returns on their investments.

If the evidence is so compelling, what would such a road map look like? Based on international analysis, if the UK were to invest 3% of GDP in R and D, we would expect a third of that to come from public spending. Policies and the road map would need to be a combination of increasing Government R and D and stimulating private sector investment beyond the life of this Parliament. Although protecting the science budget proper and the ring fence in this Parliament is a good start, we also believe that the policies need to protect the departmental R and D and to make it more transparent and necessary. Departmental R and D has plummeted in some Departments in the past decades; reversing that trend can only lead to better government and will also create all the virtuous effects that we saw in the previous Parliament.

We also need to target private sector investments to scale-ups. The UK has become a country with lots of start-ups, but not enough companies make it through the so-called “mid-cap gap” to become £1 billion valuation quoted companies. Incentives for early-stage investors to build and stay in companies are needed. Options might include increasing the enterprise investment scheme threshold to cover £100 million companies.

There could also be incentives for investors to hold on to eligible research-intensive companies for longer and not to sell them. Those incentives could include reintroducing the capital gains tax taper relief to reward 10 to 15-year exits from investments in such companies. There could also be incentives for pension and institutional fund investors to invest in research-intensive companies, as they tend to have a longer term outlook. A programme such as a capital gains tax break on the dividend returns for funds in proportion to the percentage of the fund that is invested in a research-intensive company might be an option.

We could also look to our immigration policy for possible opportunities. Tier 1 investor visas require individuals to invest £2 million in the UK for the duration of their stay. The Migration Advisory Committee has recommended that those sums should be invested in the public good, such as in hospitals and schools. There is an opportunity here to assemble a portfolio of investment

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for research to meet that criterion so that our science, technology, engineering and maths ecosystem could benefit from that investment.

The immigration skills charge is a final option that we could propose. We urge the Minister to consider an exemption for the STEM PhD-level certificate of sponsorship from the immigration skills charge. That would boost the STEM PhD employers. Furthermore, PhD-level exemptions already exist in the visa system in recognition of the need to recruit for these posts from the best in the world.

Those ideas are just a starting point, but our message is clear: we believe that increasing UK R and D investment to a competitive level needs to be a matter of national priority, and a long-term road map is the right mechanism to achieve it. Getting the science spending right is about not just how much we spend, but how we spend it.

We also received worrying evidence that not all of our capital projects were operating at full capacity due to inadequate resource allocations. The ISIS neutron source worth £400 million at Harwell is operating for only about 128 days instead of an optimal 180 days due to insufficient operational costs. Similar problems were reported elsewhere, including in the Catapult network. Although we welcome the Government’s commitment to the Catapult network, which is working well, we urge them to consolidate and fully fund the existing network before expanding it. It is simply wasteful not to ensure that we are putting enough resource into the system so that we can realise the full value from all capital investments. That is why we called for a review of all capital and resource allocations to ensure that all future capital investments are allocated the resource necessary fully “to sweat our assets”.

The Business Secretary accepted that problem when he appeared before us, and he assured us that a review was under way to ensure that the situation did not happen again. He committed to send the Committee the results of that review, but we have not received them, so I hope that the Minister can update us on progress today.

The Business Secretary identified France and Finland as the inspiration for the introduction of innovation loans. The Committee would be interested to hear what metrics the Government used to conclude that loans were effective for stimulating innovation. We understand that the Government intend to pilot this scheme. As a Committee, we can only commend a scientific approach to measuring the impacts of different types of instruments before settling on a specific grants/loan mix, if that is the intention, but it would be helpful to hear from the Minister at the outset what hard evidence there already is on which financial instruments work best and what his plans are to build on that evidence before introducing such loans.

Finally, we were crystal clear that on no account must the Government’s proposals for reorganisation of the research councils and higher education undermine the dual funding system or the Haldane principle. In his evidence to the Committee, the Secretary of State said that there would be one response from Government covering Dowling, Nurse and the higher education Green Paper. He could not give us a timeline for that response, however. Given the far-reaching impact of these proposals and the current uncertainty surrounding the Government’s intentions, I hope the Minister can be a little more

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definitive today. Will he please not only say when the Government will publish their response, but clarify a number of points?

First, do the Government plan to adopt Nurse’s proposal for a ministerial committee and, if so, what form will it take? Will it be a single Minister meeting Research Councils UK, or will it involve Ministers from across key Departments? This will clearly have an important impact in terms of the politicisation of funding decisions. Secondly, can the Minister give us at least some sense of the major concerns raised in the Green Paper consultation process—in particular regarding merging the Higher Education Funding Council for England’s science budget allocation role with Research Councils UK? What specific measures are being proposed to ensure that the dual support system will be safeguarded if these changes go ahead? Finally, what additional costs does he anticipate the implementation of Dowling, Nurse and the Green Paper will incur and will those have to be found from within the existing science budget settlement?

Our goal in this Budget and Parliament should be to unleash the full potential of every local economy in Britain. In an increasingly knowledge-based economy, the pursuit of excellence in research and innovation is at the very heart of effective strategies for sustainable growth, increasing productivity and creating high value jobs. It is not enough just to aim for stability—for maintaining the status quo—especially if policies and spending decisions are based more closely on templates of the past than on analysis of future challenges.

Globalisation means that a single disruptive technology can create a worldwide market shift in what seems like an instant, and our STEM ecosystem needs to be the most agile and responsive in the world if we are to compete. However, we will achieve that agility only if we recognise that we are operating in a global market at home as well as abroad. Some 25% of university research income comes from overseas, largely the EU. Some 50% of business R and D in the UK is from firms headquartered overseas, and R and D from abroad has grown by 59% in recent years. A quarter of top researchers operating in the UK are not British nationals.

Investors and talent need to see the Government instil confidence in the research base, but with the Green Paper, the Nurse review and the upcoming pilots of innovation loan systems, we are sending signals of turbulence and uncertainty. It is time for the Government to step up and make it crystal clear that the UK’s science and innovation is built on a rock-solid foundation. It is time for the Government to end uncertainty over Nurse, Dowling and Green Paper reforms and set out their direction, and it is time for them to demonstrate commitment to creating stability and certainty for science, with a long-term road map for increasing public and private R and D to competitive levels. In that way, we would supercharge the proven, stabilising effects of the ring fence and capital commitment, capture large-scale inward investment and secure our status as a bona fide science superpower.

2.43 pm

Mr Iain Wright (Hartlepool) (Lab): It is a genuine pleasure to follow the Chair of the Science and Technology Committee. The manner in which she is steering that

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Committee towards practical added-value recommendations is exemplary and superb, and the manner in which she steered the House through her recommendations this afternoon was astonishingly good, too. I am in the weird position of agreeing with every word she said, so I will not take too much of the House’s time.

The hon. Lady was particularly strong, if I may say so, when she spoke about what a pivotal role science plays in future economic and productivity growth, and given my Select Committee’s priorities, I was particularly interested in her point about start-ups. It is relatively easy to start a business in this country, but scaling that up so that we have very large, innovative and successful firms employing a large number of people is a major challenge for this Parliament. I hope that our two Select Committees can work together closely to provide the join-up that is needed.

The hon. Lady mentioned that science has never been more crucial to our status as a modern economic nation. I agree. We need innovative and successful firms creating wealth and employment on the back of science and research and development. We are here now, in the 21st century, on the cusp of the fourth industrial revolution: the first, in the 18th century, used water and steam power to mechanise production; the second, in the early 20th century, used electric power to create mass production; the third, in the late 20th century, used electronics and information technology to automate production, unleash digital and revolutionise the means of communication.

This fourth industrial revolution, moving at an exponential pace, is astonishing. The technologies that this revolution is unleashing, such as the internet of things, autonomous vehicles, materials science, nanotechnology, biotechnology, energy storage, artificial intelligence and quantum computing, will disrupt almost every industry in almost every country, and will disrupt society as a whole. Science and technology are the foundations of this revolution, and the choice in the future will be stark. Countries that embrace and invest in science will be the winning nations of the future; those that do not will fall behind in economic growth and living standards.

This is why, as the hon. Lady pointed out, it is a matter of concern that we have lagged behind spend by our competitors on science and research and development for much of the past 30 years. As she said, what we do spend, we seem to spend very efficiently and effectively. We punch well above our weight, but we need to think about the volume of that value, as well as what we are doing with it. We have spent just over 2% of GDP on R and D just once in the past 30 years. That was in 1986, and we have never again reached that level. Spend has declined steadily over that period to reach a long-term average of about 1.6% or 1.7% of our GDP. We are below the EU average for R and D spend as a proportion of our economy.

The Russell Group has pointed out that in terms of the level of R and D intensity of the top 22 countries listed by the OECD, the UK has the lowest level of investment. Our investment has declined, while our competitors such as Korea, Germany, the US and even Japan have increased the share of their economy spent on research and development. As is mentioned in the hon. Lady’s report, Imperial College London has said that our investment as a proportion of GDP is about 1.72%, but China increased its share of R and D investment from 1.3% in 2005 to 1.98%; France increased

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its share from 2.11% in 2005 to 2.26% in 2012; and Germany increased its share from 2.51% in 2005 to 2.92% in 2012. The US also increased its investment in the same period from 2.51% of GDP to 2.79%. Imperial College, giving evidence to the hon. Lady’s Select Committee, said that the choice was stark:

“Without increased investment in R&D, therefore, the UK risks losing its position at the forefront of research globally, particularly given the rapid rate of advance in scientific research and the intense levels of international competition.”

Steve McCabe (Birmingham, Selly Oak) (Lab): Is my hon. Friend concerned that where the Government attempt to support innovation and R and D, the resources are very unevenly distributed? For example, from the catapult programme, 9% of resources have gone to the midlands region, but 46% have gone to London and 22% to the south-east. Surely that is not the way to get the best out of the country.

Mr Wright: My hon. Friend makes an important point. If we are spending a pound of public money, what do we want to get out of that and where do we get most bang for our buck? If the Government are serious about rebalancing the economy and making sure that prosperity is not just in London and the south-east but spread across the country, projects such as the midlands engine and the northern powerhouse need to have that scientific base in order to boost investment, research and development, and ultimately wealth creation as well.

The Russell Group has stated:

“The UK punches above its weight when it comes to excellence in research and higher education but this situation is unsustainable in the long-run without continued investment…The UK lags behind its main competitors in its level of investment in R&D and cannot continue to sustain its position as a world-leader without sufficient support.”

The EU has stated that to maintain future competitiveness in the face of unprecedented global competition, member states should be working towards spending 3% of GDP on research and development by 2020. As the hon. Lady said, the UK is a long way from that target. Only Finland, Sweden and Denmark already exceed that 3% target, yet it is vital for future productivity gains.

The hon. Lady and her Committee thought that the science issue was so important that it should be the focus of their first inquiry. We in the Business, Innovation and Skills Committee thought that the Government’s productivity plan, published in July 2015, was so important—indeed, the productivity gap is the major economic challenge of this Parliament—that we made it the focus of our first inquiry. We looked at spending on research and development and found that publicly funded R and D creates a strong “multiplier effect” and “crowds-in” private sector, charitable and inward investment, stimulating around 30% more self-investment from industry. Throughout our inquiry we heard strong evidence about just how much the public spending on R and D can draw in that private spend, as opposed to crowding it out. That model is operated by our major competitors around the world. Our report stated:

“We fully agree with the Science and Technology Committee’s recommendations on maintaining good R&D investment in the UK and echo that, if the Government is serious about productivity and competitiveness, it needs to commit to a total level of public and private R&D investment in the United Kingdom of three per cent of Gross Domestic Product. We therefore recommend that

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the Government produces a ‘roadmap’ for increasing the total level of public and private R&D investment in the United Kingdom to three per cent of Gross Domestic Product.”

The hon. Lady also mentioned the move from grants to loans. I worry about that, because it is a major concern. Decisions on capital investment are global, often decided by people around boardroom tables that are not in the UK, and it can be transferred anywhere. Those multinational corporations will be looking at a different dashboard of metrics when deciding where to put their latest investment. They will be looking at the flexibility of the labour market, tax rates and the ease of doing business. They will also be looking at the collaboration and partnerships between public and private, particularly in terms of R and D.

Other countries provide help and support to land that investment, and for the past 15 years we have had a major strength in that. The level of foreign direct investment into the United Kingdom has been excellent, but I think that we will put that at risk by moving from grants to loans. For example, why would Rolls-Royce invest in a factory here when Singapore, where the company already has a presence, could be offering a whole lot more? It is a case of making sure that we do not compromise our true strengths when it comes to grants and loans. Therefore, echoing what the hon. Lady said, what is the rationale for that? Is the Minister not aware that there is a huge risk in moving from grants to loans? What metrics will he use to advance this? Can we pilot it before it is rolled out across the economy?

The second risk that I would like to talk about is the proposal to merge Innovate UK and Research UK. The catapult centres are working well, but they are relatively new organisations and they need a period of stability and certainty to become embedded in the ecosystem of science research and innovation. The merger will cause disruption and uncertainty and it will affect our science base. Will the Minister therefore outline for the House what the roadmap is to ensure that Innovate UK and Research UK can come together in a safe way?

The Business, Innovation and Skills Committee fully agrees with the Government on the need to improve productivity; we want to focus on that throughout our inquiries in this Parliament. Part of that is being able to spend for the long term and prioritising capital spend. Under the coalition Government, BIS’s capital departmental expenditure limits rose by about 84%, but under the spending review announced by the Chancellor two or three months ago it will fall by about 60%. The spending review stated quite explicitly:

“The government has chosen to prioritise its day to day spending on national security and key public services while investing more for the long term in capital infrastructure.”

The Government’s capital investment over the lifetime of this Parliament actually increases by about £12 billion, but BIS’s capital spend is being cut by 60%. The Ministry of Defence’s capital spend will increase, as will the capital spend of the Department for Communities and Local Government—a comparably sized Department—because of housing. The Department for Transport’s capital spend will double to £12 billion.

In contrast, the science budget will bob around throughout this Parliament at about £1.1 billion a year. I do not see that as a huge success. Actually, I see it as a failure in negotiations by BIS during the spending review, especially given that, as the Chancellor has said, science is a major priority for this Government. Since 2010 we

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have lost around £330 million in capital spend on science. It will take an awful lot of investment and prioritising to catch up, given that our competitors are moving ever further away. Therefore, does the Minister think that that was a disappointing negotiation? Given the priority and the pivotal role that science plays, does he think that we should be spending more on science in order to boost that long-term value for the economy?

Given the central importance of science as perhaps the principal driver of future economic growth, increased competitiveness and improved living standards, the relative decline in our science spend, regardless of whether we spend it wisely, should be a cause of enormous concern, and there should be a determination at a national level to reverse it. That is why I am really pleased that the hon. Lady has brought forward this debate. I hope that the Minister will respond positively to ensure that science is at the heart of our economic revival, now and in the future.

2.57 pm

Stephen Metcalfe (South Basildon and East Thurrock) (Con): This is a vital debate because it is about the future direction of our nation, and whether we will truly commit to the high-value, high-skills economy and invest in the areas that underpin that aspiration, such as core scientific research, or whether we will pay lip service to that aim while actually spending most of our energies maintaining the status quo. I suppose the reality will be a bit of both, but on this occasion I am pleased that the Government’s actions appear to be working towards backing up the aspiration. That is why I want to place on the record my thanks to the Chancellor and to the Minister for the announcement in the recent spending review of a real-terms increase in spending on science.

I was fortunate enough to be a member of the Science and Technology Committee in the previous Parliament. Indeed, I wanted to chair the Committee in this Parliament, but unfortunately that was not to be; my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) was successful, and I wish her and the Committee well in the coming years. Back in 2010 the Committee was very pleased that there was a flat cash settlement and a ring fence for the science budget. At the time, that seemed an excellent outcome, compared with the cuts being experienced by other Departments. Of course, the inflationary effect of that flat cash settlement was that by 2015 it had effectively dropped by 15%.

Therefore, the announcement of a real-terms, year-on-year increase in this Parliament was particularly welcome. As the Minister will recall stating:

“We are protecting science resource funding in real terms, at its current level £4.7 billion for the rest of the Parliament.”

That, along with the £6.9 billion science capital commitment, means a total investment of over £30 billion in science by 2020. That has to be welcomed by all. I believe that it sends a clear signal that science and innovation are at the heart of the Government’s long-term economic plans.

We know that Britain is a great place to do science. As we have heard from my hon. Friend, for every pound invested, we publish more papers and receive more citations than any other developed nation. We perform

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well above the average, producing 16% of top-quality published research findings, with just 3.2% of the world’s R and D expenditure.

How has that come to be the case, and how do we maintain it? There are a number of things that we have done in the past and that we are doing now. As a nation, we have a long and illustrious history of scientific endeavour, and we have made numerous significant scientific breakthroughs, as we heard from the Chair of the Science and Technology Committee. We have created a scientific landscape that fosters creativity and an ability to think the unconventional and then go out and explore it. While money is important, therefore, this is not all about the cash; it is more about how it is used and how we direct—or do not direct—the way in which it is spent.

This Government and previous Governments have built on the achievements of the past for the benefit of our collective future. In the recent Russell Group report “Engines of growth”, a sample of 240 projects from the group’s universities delivered at least £21 billion of economic benefit—a hundredfold return on investment. That proves that public investment in R and D supports economic growth. However, that investment must be free from political interference, as enshrined in the Haldane principle—the idea that decisions about what to spend research funds on should be made by researchers, rather than politicians. That must continue.

It is right for the Government to support science, but they must not become too prescriptive, or they will kill the very creativity that allows us to punch well above our weight. At present, the Government are getting it about right. Investing in catapult centres is an excellent example of how the Government can give researchers a steer, without direct interference, and I hope that that will continue. It is right that we put up the money, but it is also right that it is the scientists who decide how it is spent.

We have an excellent record of investment in science in this country, but I want to highlight one or two things. The relationship between Parliament and the science community is as good as it has ever been. Yesterday we saw an excellent event—Voice of the Future—at which the Minister spoke. As part of that collaboration between the Royal Society of Biology and the Science and Technology Committee, young and early-career scientists were invited into Parliament to quiz those responsible for directing how Parliament and science interact. Another example of that relationship will come next week, when I host SET for BRITAIN—the science, engineering and technology for Britain competition—where young and early-career scientists will have an opportunity to highlight their work at a poster competition, with the potential to receive significant recognition and prizes.

As I said, the landscape for science looks good in the UK, and the Government are showing genuine support, but I cannot let this opportunity pass without highlighting one or two areas that still need addressing. As was highlighted in both previous contributions, the amount we spend on science in the UK is well below what our international partners spend. We are the fifth largest economy in the world, but all the other major economies are spending considerably more than us. We can take a simple step towards rectifying that by aiming to spend 0.7% of our GDP on R and D by 2020, rather spending 0.5%. That is a figure we have committed to spend in

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other areas, and we could certainly commit to spend it on science. We know that that makes sense, and we have seen how we get a return on that investment. I would like the Government and the Minister to take that thought away.

My final point is about how we inspire the next generation of scientists. In a recent report, the Royal Society identified a skills gap, noting that we will need 1 million new engineers, scientists and tech professionals by 2020. The Government are doing something through their apprenticeship programme to help fill that gap, but we need to do more to inspire young people to see science as a career for them. One way we could do that is by getting the Government to facilitate greater working between schools, the learned societies, the professional bodies and STEM businesses, so that we can take real-life examples of how science works in society into our educational establishments and inspire young people about science at an earlier age.

The settlement goes a long way towards ensuring that we continue to be an economic and scientific powerhouse, and I commend the Government on their actions.

3.5 pm

Tristram Hunt (Stoke-on-Trent Central) (Lab): We meet for this debate at an auspicious moment. According to this morning’s Financial Times,

“Grey hairs, monobrows and poorly judged comb-overs could be consigned to history after research led by British scientists revealed how our genes affect hair growth on the human head and face.”

That, if evidence were needed, is a sign of the continuing health of British science. However, it takes funding for British basic science to produce publications that can, in time, lead to the wealth-creating, job-generating businesses of the future. I am, therefore, broadly supportive of the Government’s continuing commitment to the science budget, but there is much more we can do when it comes to Government support for science, for knowledge transfer and for greater private sector involvement in R and D.

First, however, let me set out some history. When the last Labour Government came to power in 1997—happy days—we found, as we always do, that the Conservative party had decimated the British science base. Laboratories were falling apart, basic funding was slashed, support for R and D was pathetic, and the space programme was in chaos—the usual. Over 13 years, primarily under the leadership of Science Minister Lord Sainsbury, and with the support of Chancellor Gordon Brown and investment from the Wellcome Trust, the Labour party rebuilt Britain’s science base.

The UK innovation investment fund was created to back technology entrepreneurs, the science research investment fund was created to tackle the backlog of under-investment in facilities, and the higher education innovation fund was created to incentivise universities to transfer their knowledge into industry. The result has been a golden age for British science, with great discoveries such as the Higgs boson; the Rosetta mission; an end to the brain drain; and world-class, well-resourced universities carrying out cutting-edge work.

Mr Iain Wright: My hon. Friend makes a really important point, and the work Lord Drayson did was absolutely instrumental in those achievements. Does my hon. Friend agree that that 10-year science plan gave

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all institutions and companies the time they needed to invest with certainty and confidence, because the ecosystem was steady for the entire decade?

Tristram Hunt: My hon. Friend makes a powerful point. The Science and Technology Committee report makes a point about the innovation lag, and the investment my hon. Friend talks about yielded extraordinary results afterwards. So successful was the Labour party’s science policy that the pressure group Save British Science had to go into liquidation—its work was done.

When the coalition Government came to power, they ring-fenced a flat-cash science budget. They cut the capital budget by 40% and then reversed the cut. Those were not the long-term, sustainable decisions our science base needs. Today we have heard that the capital part of the science budget stands at £1.1 billion a year, and that will be protected in real terms until 2021. However, I share the Science and Technology Committee’s concern about the UK falling behind our competitors in R and D investment. I agree with the Committee’s plans for a road map to take us towards R and D investment of 3% of GDP and up to the Euro norm. I agree very much with the hon. Member for Oxford West and Abingdon (Nicola Blackwood) that spending on science is not a subsidy but an investment.

This limited debate offers us a broader opportunity to think about the role of the state in creating the wealth of tomorrow. A decent science policy should set out how a supportive, collaborative and inventive state can generate not only the basic science, but the knowledge transfer and institutions for innovation that are fundamental to a high-wage, high-skill economy. Wages for jobs in the knowledge economy are higher—in 2013, they were in fact 40% higher. If the knowledge economy made up one third of jobs in Britain, we would create an extra 2.4 million better-paid jobs.

While the Business Secretary is a market fundamentalist and a minimalist-state zealot—my hon. Friend the Member for Hartlepool (Mr Wright) spelled out brilliantly the failure of his negotiation strategies—and the Chancellor is eyeing up further spending cuts, I am very glad that the Science Minister has outed himself as a supporter of Mariana Mazzacato’s work on an entrepreneurial activist state. Publicly funded research and development has a strong multiplier effect in that it crowds in private sector, charitable and inward investment. We all know the stories of Stanford University and Xerox, and the National Science Foundation and Google. From hi-tech to bio-tech to nanotech to green-tech, we will succeed in these sectors only with a state committed to driving innovation, research and knowledge transfer.

Let me briefly lay out a few areas of concern. The first is how other Government Departments use their science budgets, where we have seen a real cut in terms of science expenditure. This money is not ring-fenced and there is very little strategic approach to how it is utilised. In the United States, departments use their money effectively for areas of strategic direction. We need a lot more of that across the UK Government.

Secondly, as my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) spelled out, the Government’s regional approach to science spending is a mess. I applaud the Chancellor’s investment in Manchester—a city that likes to think it was the birthplace of the industrial revolution, when we all know that

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Josiah Wedgwood pioneered that in Stoke-on-Trent, at Etruria. But beyond the Irwell, the level of investment in regional universities and laboratories, and indeed in the catapult centres, is pathetic. In 2013, 52% of total UK R and D expenditure was in the south-east. The Government are pump-priming the silicon tech, silicon roundabout in Old Street, and the Olympic park in the east end, but it would do much more if it supported organisations such as the Lucideon research facility on ceramics in my constituency.

Thirdly, as the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) suggested, we need to work much harder on getting young people into science and technology subjects. I wish the Government would stop pretending that careers advice does not matter and get a grip of that area. We face a crisis in terms of getting high-quality maths teachers into high-poverty areas in order to allow young people to pursue a career in science. As my hon. Friend the Member for Hartlepool suggested, we must also do something about supporting the growth and development of technicians.

Finally, while I do not wish to intrude on internal family disputations, it is clear that our place in Europe is absolutely fundamental for the continuing support of our science base. Only this week, 50 biotech and pharmaceutical chief executives reminded us of the importance of remaining inside the European Union if our life sciences sector is to continue to grow, saying:

“Not only would an exit from the EU negatively impact on the life sciences sector, but changing the current arrangement would lead to disruption, expense, and significant regulatory burdens.”

We have to make sure that we remain in a reformed European Union, but if we want to get more out of our investment into UK science, we also need much more concerted belief in, and support for, a truly entrepreneurial state.

3.13 pm

Chris Green (Bolton West) (Con): It is a pleasure to speak in this debate, following the Committee’s report on the science budget.

Members will be aware that there has always been strong evidence for the link between spending on research and development and the productivity of our economy. The UK’s economic growth depends on its ability to innovate, and investing in innovation is essential in order to strengthen the UK’s competitive advantage and maintain and grow the UK’s share of the global market.

As my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) said, investment in science is also an effective way to invest public money to drive economic growth. Every £1 spent by the Government on R and D increases private sector productivity by 20p per year in perpetuity. As the Department for Business, Innovation and Skills highlights in its own report, Government R and D investment leverages in for that £1 investment an average £1.36 in private investment. Government investment also provides a productive environment for research generally. For example, although Cancer Research UK does not receive any Government funding for research, it depends on Government’s investment in UK science to create a supportive environment for that research. For these reasons and many others, we

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on the Committee recommended that the Government produce a long-term road map for increasing public and private R and D in the UK to 3% of GDP. Businesses need as much certainty as possible when making substantial commitments to long-term investment, and a robust road map will help to deliver that.

The spending review showed that the Government have listened to concerns from the science community, with the protection of science resource funding in real terms at its current level, to increase in line with inflation for the rest of this Parliament. Members will know that this is a better deal than the flat cash settlement in 2010, which, owing to inflation, caused the real value to fall. While inflation is very low—in fact, nearly zero—it may not seem as though this is a terribly dramatic commitment, but again, it provides economic certainty. China is going through a period of economic turmoil and the European Union is still in the doldrums, so the Government are showing that the UK is a great place to invest.

However, despite moves to deliver on the £6.9 billion commitment in the Conservative manifesto, and the stability and confidence created by the new ring-fence, investment in the science base is still low compared with that in other leading scientific nations. Fortunately, the UK science industry is rightly recognised for the superb quality of its research. While representing only 0.9% of the world population, it produces 15.9% of the top-quality research findings. A productive research environment must have Government investment in science capital and resource. However, the work is far from over. We need to do more to reap the benefits of our research in order to convert the research findings into the commercial, both for products and services. This is not an easy task to accomplish. It requires more than a protection of budgets, as was highlighted in the Dowling report. We must reduce the complexity of support systems to provide clear advice on funding, as the Government recognised and supported in their response to the Committee.

Like many, I was pleased that following the spending review, the Government will take forward the recommendations of the Nurse review of research councils, which, subject to legislation, will introduce a new body—Research UK—that will work above and across the seven existing research councils. While welcoming the Nurse review, we need to be mindful that the Dowling report highlighted how complex a system can become and the need for simplification, or “hiding the wiring”. The integration of Innovate UK and the proposed Research UK has the potential to strengthen collaboration between the research and commercial sectors but, as with everything, there must be clarification of what decisions will be made at the research council level and what decisions are to be made by the new overarching body. Long-term and stable Government investment will help to foster partnerships between industry, research organisations, charities and international partners. These relationships need the confidence that this Government are bringing by delivering economic recovery and the good deal in the science budget.

Beyond the science budget, several Government Departments finance research and development with an un-ring-fenced budget. This highlights the importance of having a chief scientific adviser for every Government Department, or at least access to one. With devolution, we ought to take the opportunity to look at other models such as that in Germany to see whether its Government structure, though different to ours, offers

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any guidance. In Germany, individual states have scientific advisers. I look forward to seeing how devolution enables city regions such as Greater Manchester to take the best scientific advice and focus on supporting our fantastic universities, institutes and industries, perhaps with each city region having its own dedicated scientific adviser. There is increasing specialisation in the UK whereby every business and organisation focuses on what it does well. For example, as the UK pharmaceutical industry concentrates itself in the triangle linking Oxford, Cambridge and London, we need to recognise the importance of gaining critical mass for particular industries in other areas of the UK.

The Greater Manchester area has a fantastic history as a global player in the mass spectrometry industry, inspired by John Dalton’s work in Manchester on atomic theory in the late 18th and early 19^th century. Coincidentally, that is also the industry to which I belonged before coming to this place. We are rightly proud that, in addition to our many other industries and organisations, the National Graphene Institute will make Manchester a leading centre of graphene research and commercialisation, and secure jobs for the future.

As our economy continues to strengthen, we need to ensure that our science base keeps pace with it. I am pleased that the spending review has been well received by UK scientists, but, without increased investment in R and D, the UK risks losing its position at the forefront of global research, particularly given the intense international competition. That is why I urge the Government to create a science road map that stretches beyond the electoral cycle. A commitment to that road map would give much valued certainty about investment, which it sometimes takes decades to deliver, and act as a mechanism for the whole R and D community to challenge political parties to commit to it in their manifestos.

3.21 pm

Carol Monaghan (Glasgow North West) (SNP): At the outset, I congratulate the Chair of the Science and Technology Committee on her determination to publish its report on the science budget before the comprehensive spending review. That no doubt contributed to the Chancellor’s announcement that the science budget would be maintained for the duration of this Parliament.

Although the settlement was greeted with relief by many in the scientific community, that was only because they had feared much worse. Government investment in science is pitifully poor. Since 2010, the science budget has been frozen in cash terms, leading to a real-terms drop of 10% over the last Parliament. By 2012, UK Government investment in science had fallen to an embarrassing 0.44% of GDP—less than any G8 country has invested in R and D in the past 20 years.

Despite that fact, the UK remains one of the best places in the world to do science, but how can that position be maintained when countries such as Japan and South Korea are pumping money into their research establishments? They have created an environment that allows science to flourish, and it is no surprise that their economies are also booming. If we are not careful, we risk losing the lead in cutting-edge science. When the Universities UK spokesperson, Dr Dandridge, addressed the Science and Technology Committee, she said that long-term under-investment of publicly funded research in the UK is leading to an erosion of capacity.

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The Scottish Government have already recognised that erosion and have sought to mitigate the impact—subject to the reserved nature of Research Councils UK and Government research and development spend—by increasing their expenditure on research and knowledge exchange by 11% in the year 2013-14, yielding a rise of 38% since 2007. I ask the UK Government to do likewise.

As a physicist, it was a pleasure to visit CERN with the Committee last week. It is a wonderful example of international collaboration. Many may wonder about the wider impact of the facility, which is known for its work on particle collisions, but, in order to promote and carry out such high-level experiments, technology has been developed and innovation has flourished. The facility gave birth to the world wide web. Particle acceleration and focusing technology have led to medical developments such as proton beam therapy for cancer. For me, however, one of the most exciting projects at CERN is the development of high-temperature superconducting materials, which will allow current to flow with zero resistance, and have major implications for global energy supply.

There are many physicists, engineers and technicians from the UK working at CERN, including Aidan Robson from the University of Glasgow, who was a member of the team that discovered the Higgs boson. However, when we were shown the total number of personnel, it was rather disappointing to see that there were only 900 from the UK, compared with 1,500 from Italy and 1,300 from Germany. When I asked why that was, I was told that Italy is more serious about science. A new type of particle accelerator is currently being developed at CERN, but it might be built in Japan because the Japanese Government are willing to contribute 50% of the costs. That is how a Government demonstrate that they are serious about science.

Recent work, most notably by Professor Stephen Watson at Glasgow University, has pointed to the significance of the infrastructure spend component of UK Government investment, but there is a huge mismatch between the spend for the so-called golden triangle and that for elsewhere in the UK. Infrastructure investment is known to play a key role in driving scientific discovery and, crucially, in attracting business investment. No one would deny the impressive nature of buildings such as the Crick Institute in London, and I look forward to seeing it up and running. However, such a facility means that private investment will flow into a narrow geographical area. The Government must, therefore, map out investment, both thematically and geographically—that has never been done before—to ensure that pockets of excellence are allowed to grow throughout these isles.

Chris Green: I appreciate the hon. Lady’s point about where we invest in, encourage and support science, but often the money and resources follow the expertise, so if there are great centres in a particular location, business and Government will, naturally, invest in them. The reason the Italians have a particular interest in CERN is that they have a great speciality in particle physics, which our country does not emphasise so much. We look at different areas.

Carol Monaghan: There is no reason why the UK should not be a world leader in particle physics as well. Our infrastructure and environment must allow those skills and talents to be developed.

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My final point relates to the proposal to give loans rather than grants to industry-based research, which has sent a chill through research-intensive industries such as the pharmaceutical sector. The UK is in a global competition to attract industries to carry out R and D here. The proposals could put the UK at a serious competitive disadvantage, and we run the very real risk that companies will move their R and D abroad.

In conclusion, I have several questions to pose to the Minister. First, does he agree that more, not less, investment in blue-sky scientific research is needed? Will the Government commit to increasing science spending to 3% of GDP, which is the EU target, as recommended in the Select Committee report? Secondly, will the Government commit to reviewing infrastructure spend on science to ensure that the talents of the scientific community in all parts of the United Kingdom are properly supported? Finally, will the Government abandon their hare-brained plan to replace research grants with loans?

3.29 pm

Yvonne Fovargue (Makerfield) (Lab): I congratulate all members of the Science and Technology Committee on their excellent report. I especially congratulate the Chair of the Committee, the hon. Member for Oxford West and Abingdon (Nicola Blackwood), who has led us through it so eloquently. The report has hit the nail on the head. As the Chair of the Committee has said, science is vital to securing Britain’s future prosperity, research and development. It not only underpins our economic position, but helps to secure our wellbeing and health, by contributing to potential medical breakthroughs in the treatment of cancer and heart disease and even in the eradication of grey hair, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) has mentioned. I was reminded of that at the event I attended yesterday, “Voice of the Future 2016”, which the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) has mentioned. That event was an opportunity for young scientists and engineers to questions parliamentarians, and the Minister knows all about it because we were both there for the question and answer sessions towards the end of the day. It was gratifying and inspiring to hear that there is such support for science among our young people.

If only the Government were equally supportive. Unfortunately for us all, the Department for Business, Innovation and Skills, where the levers of growth in the Government are found, suffered a further 17% cut in the November spending review. Much was made of the protection of the £4.7 billion science budget until the end of the Parliament in 2020, and Ministers seemed to be especially proud of protecting the science capital budget of £1.1 billion until 2021. I was pleased to be reminded by my hon. Friend the Member for Hartlepool (Mr Wright) that some other Departments did better. For example, the Ministry of Defence, the Department for Transport and the Department for Communities and Local Government—as far as housing was concerned—secured a more favourable capital spend. However, I would be the first to concede that many in science and industry breathed a sigh of relief at that settlement; after all, I think they were expecting much worse.

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The situation could have been so much better. As we have just been reminded by the hon. Member for Glasgow North West (Carol Monaghan), flat cash settlements eroded the ring-fenced, non-capital science budget by £1 billion in real terms in the previous Parliament. If we discount the introduction of the global challenges fund, which is geared to overseas development and has many strings attached, we are dealing with another flat cash settlement that will create a serious real-terms decline in funding.

The fact remains that £4.7 billion is only 0.49% of GDP, which pales in comparison with our competitor nations. The UK Government’s spending on R and D is the lowest among the G8 countries. As the Minister knows, the Royal Society has called for investment in R and D to be increased to 0.67% of GDP, to match the OECD average. The CBI has called for it to be doubled to around 1% of GDP. That is because, as the former director general of the CBI remarked last year, we are falling ever further behind our international competitors, and we must take action to ensure that we lead from the front.

Matt Warman (Boston and Skegness) (Con): I am a member of the Science and Technology Committee. Does the hon. Lady acknowledge that although those numbers, as she presents them, may not sound good, the output that we get for that funding is better than ever?

Yvonne Fovargue: I agree that the output is good, but surely that makes the case for more investment in the science budget, not less.

As the Select Committee pointed out, the UK has fallen behind its competitors in total R and D investment. If that trend is not reversed, it will put UK competitiveness, productivity and high-value jobs at risk. The Committee recommended increasing public and private R and D investment to 3% of GDP. The current position is about 1.6% of GDP. We have heard about how much less we spend than our competitor nations, and we have a serious problem of underfunding.

My hon. Friend the Member for Hartlepool and the hon. Members for Oxford West and Abingdon and for Bolton West (Chris Green) have all cited compelling figures. As they have mentioned, there is much value in using public funding to leverage private money and increase productivity, so why not commit to more funding and lever more from private industry? We are not seeing the level of industry funding for R and D that we need. I welcome the comments by the hon. Member for Oxford West and Abingdon and my hon. Friend the Member for Hartlepool on scaling up investment, not just start-up investment.

In their response to the Committee’s report, the Government mention Innovate UK and the catapult network, which aims to strengthen R and D capacity and encourage innovation. I commend them for that development. As we have heard, however, £165 million of UK grants to Innovate UK for turning scientific research into commercial applications have been axed and replaced by loans. That creates additional risks for researchers and is liable to damage innovation. Both the CBI and the Federation of Small Businesses have raised concerns. I repeat the call that has been made: on what evidence has this decision been based? Do the Government believe that turning grants into loans will benefit innovation and encourage companies to invest?

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On the subject of the catapult network, why does the north of England do so badly when it comes to Innovate UK funding? The north-west did not have a single catapult project until late last year, while Yorkshire and the Humber gets about 5% of total funding. How can that be right when the south-east gets 52% of it? As several hon. Members have said, what we need from the Government is a proper road map to outline where are we are going with research and development. Let me add that any road needs to go to the north, not just stop at the M25. It is unclear what the Government are trying to achieve in the long run. What is their plan? Can they see the wisdom of increasing R and D funding as a proportion of GDP to something approaching that of our competitors? Nowhere in their response to the Committee’s report is that made clear.

As hon. Members have said, we have a lot to be proud of in this country. The UK is very good at research—we have heard many of the figures—and we in fact gain hugely in that regard from our membership of the EU, as my hon. Friend the Member for Stoke-on-Trent Central said so eloquently. Scientific development and innovation are critically dependent on collaborative ideas and contributions. The EU helps universities to pursue cutting-edge research. It also makes working across borders easier for UK and European researchers pooling their knowledge, infrastructure, data and resources. In fact, the UK does disproportionately well in securing EU funding. During the last period, we received €8.8 billion in direct EU funding.

We also need to ensure that the UK Government are fully behind the science research project. Flat cash settlements for R and D do not help; nor do Cabinet Office missives suggesting that scientists in receipt of Government grants should not try to influence policy. Whatever happened to the idea of evidence-based policy making? The muzzling of some of our finest minds will not help. Above all, we need a Government who have a sense of the future potential of science funding. That is why everyone has talked about the need for a road map, which is the most important missing element. Unless we have a sense of where we are going, we will fall further and further behind our competitors, instead of reaching for the stars like Major Tim Peake.

3.37 pm

The Minister for Universities and Science (Joseph Johnson): I thank my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) for her Select Committee’s important work. I will use the time available to address some of the concerns of the Science and Technology Committee and to respond to some of the points made by hon. Members.

First, it is right to remind ourselves of and to celebrate the landscape in which the Government’s plan for science and research lies. As hon. Members have mentioned, the UK’s global scientific impact far exceeds our size as a nation. With just 3.2% of the world’s R and D spend, the UK accounts for 16% of the most highly cited research articles—we have overtaken the US to rank first among comparable research nations for our field-weighted citations impact—of which we should all be extremely proud.

That is why science and research very much sit at the very heart of this Government’s economic plan. Last July, our productivity plan clearly set out how we will

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tackle the UK’s long-term productivity problem, with science and research being central to our proposed solutions. This autumn’s spending review settlement was an emphatic confirmation of that commitment: an extension of the ring fence around science and innovation until 2020 means a total investment of £30.4 billion during this Parliament.

The ring fence has been a powerful indication of the Government’s commitment to science, and we will continue to protect science resource funding in real terms for the rest of the Parliament. We are building on the safeguards put in place for the science budget in the last Parliament. That will mean a decade of protection and of sustained investment by the Government. All that of course comes in the context of significant savings in other areas of Government expenditure, which is a clear sign of the important place of science in our decision making.

The Science and Technology Committee has called for a road map towards a 3% R and D spend. As my hon. Friend the Member for Oxford West and Abingdon knows, decisions on increases in the science spend are taken in spending reviews, when it is weighed up against the other priorities for the nation. My hon. Friend the Chair of the Science and Technology Committee also asked about allocations. We have discussed indicative allocations with our partner organisations. They are very much aware of their likely settlements, and I assure her that we will publish the allocations imminently.

My hon. Friend asked about the next steps in the implementation of the Nurse review and our thinking about the proposals we outlined in the Green Paper. As I am sure she will have appreciated, we consulted very carefully on how best to proceed, with a proper 10-week consultation. Although I understand her impatience to know how we will take all the proposals forward, it is important that we do so in a deliberative fashion and get these important decisions absolutely right. The consultation period only ended on 15 January and we will come forward with our full response in the spring.

In the meantime, I hope that I can give my hon. Friend the assurance she seeks from the Government by saying that we will maintain the spirit of the dual support system, which is so important to our research sector, alongside the continuation of the important Haldane principle, which ensures that decisions about which research to fund are taken by scientists through competitive peer review processes. To deal with her concerns about the operation of the dual support system in a bit more detail, it is possible to ring-fence or hypothecate separate funding streams, even when they are delivered through a single body. That is a model that the Government can and do use effectively, and that could ensure the continuation of the dual support system in a reshaped landscape.

The Chair of the Business, Innovation and Skills Committee, the hon. Member for Hartlepool (Mr Wright) raised concerns about the move from grants to loans which were echoed by the Opposition spokesperson, the hon. Member for Makerfield (Yvonne Fovargue) and by the hon. Member for Glasgow North West (Carol Monaghan). We will market-test the proposed new financial products in the spring. We want to broaden the types of financial support that are available for innovation in this country. BIS and Innovate UK are studying the financial models that are operated by our international counterparts in respect of innovation. It is clear from

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our analysis of what is going on around the world that the most successful models are increasingly emphasising other financial products in their policy mix as a supplement to their grant funding, which will always have a place.

We want to ensure that the overall funding through Innovate UK evolves and that the spectrum of products diversifies to reflect the different needs of different companies at different stages in their lifecycle. Overall funding will increase from £311 million in 2009-10 to £471 million by 2019-20. That figure includes the new finance products.

My hon. Friend the Member for Bolton West (Chris Green) rightly echoed the Dowling report’s recommendation that we seek greater simplification of the innovation landscape and support system. We will certainly take that core recommendation into account as we develop the thinking on our national innovation plan.

I want to emphasise three commitments in the spending review and ensure that the House understands their importance. The first is our commitment to protect science resource funding at £4.7 billion. This is the lifeblood that powers our world-leading science and research base. It funds vital blue-skies research, fuels the Bunsen burners and afterburners, and funds labs up and down the country, the research councils and the national academies, thereby making sure that Britain stays at the leading edge of global science.

At the same time, we are delivering on our manifesto commitment and investing in new commitments on a record scale, with £6.9 billion for capital expenditure. That means new research institutes and laboratories across the UK. It has been one of the greatest privileges as Science Minister to break ground on new institutions such as the imaging centre of excellence at the Queen Elizabeth university hospital in Glasgow. To answer the hon. Member for Glasgow North West, I hope that that demonstrates the Government’s commitment to ensuring that we fund excellent science wherever it is found in the United Kingdom.

Through our science and innovation audit, we want to encourage areas that have not received much science funding relative to other areas to come forward with proposals that we can support when we feel that they have the potential to be excellent and to do great science. We want more such proposals.

The third matter that I want to consider is the global challenges research fund. We have committed an additional £1.5 billion to the fund by 2021. It will keep the UK at the forefront of global research, leading the way on major global challenges, such as Ebola, in which we have always played a significant role. The value of the GCRF is not just what the UK can do alone. We have some of the world’s most talented scientists, most prestigious universities and most advanced laboratories, but the most significant breakthroughs in science and research are bigger than just one country.

That brings me to the points that the hon. Member for Stoke-on-Trent Central (Tristram Hunt) made. I am glad to have his general support for all the spending review commitments that I have briefly summarised. They will give the science community the certainty that it needs for the years ahead. Like the hon. Gentleman, I recognise the important role that public sector investment

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in science plays in stimulating private sector investment. Other Members have already cited the crowding-in effect, which we estimate at about £1.36 for every £1 of public investment.

The hon. Member for Stoke-on-Trent Central is also clearly right about Europe. Science today is increasingly cross-border and collaborative. I have made my position clear, as have the Government: UK universities and our superb science base are key to our future as a knowledge economy, and we and they will be much stronger inside the EU. That is best for our research. Almost half of all UK research publications involve collaborations with other countries. Papers involving international collaboration have almost twice the citation impact of those produced by a single UK author, and EU countries are among our most crucial partners, representing nearly 50% of all our overseas collaborators.

Staying in the EU is best for our students. Our links with Europe are deep and long standing. Free movement of people makes it easier for our universities to attract the best talent, and for British students to spread their wings across the continent. Lastly, it is best for our funding. The excellence of our research base means that it is no surprise that the UK is one of the most successful players in EU research programmes.

John Redwood (Wokingham) (Con): Is not it the case that we collaborate a great deal with the United States of America, which is not a member of the European Union? Would not any British Government want freedom of movement of expert people to our universities, whether we were in or out of the EU?

Joseph Johnson: My right hon. Friend is right—the partnerships are not exclusive, but why turn our back on great collaborations that benefit our science base tremendously?

The UK received €7 billion under the last framework programme, which ran from 2007 to 2013. That made us one of the largest beneficiaries of EU research funding. In this funding round, Horizon 2020, we have secured 15.4% of funds, behind only Germany on 16.5%, and with the second largest number of project participations.

As science becomes more international, we should nurture partnerships, not reject them. In the end, the British people will decide whether we are safer, stronger and better off as part of the EU, but, to thrive in a knowledge economy, there is no doubt that we need to build academic partnerships, not turn our backs on them.

3.48 pm

Nicola Blackwood: The debate has been not only consensual but of high quality. The Chair of the Select Committee on Business, Innovation and Skills is right to say that we are in the middle of a fourth industrial revolution founded on science and technology and that the only sensible approach is to increase R and D investment. My hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), who has been such an outstanding champion for science in this place, is also right to say that, as a nation, we have a long and illustrious history of scientific endeavour and we would be foolish to take any steps that undermined the proven Haldane principle on which it is built.

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Relief will have swept through the corridors of both Houses at the groundbreaking news brought to us by the hon. Member for Stoke-on-Trent Central (Tristram Hunt) that the days of the comb-over and the unibrow are numbered. My Committee colleague, my hon. Friend the Member for Bolton West (Chris Green) was right to highlight Dowling’s recommendations—they have yet to be responded to by the Government—on simplifying the achingly complex science and innovation support system. The hon. Member for Glasgow North West (Carol Monaghan) joined other Committee members when she said that we need a more strategic approach to geographic allocation of capital investment, and I thank the Minister and the shadow Minister for their responses.

On the necessary deliberation and response to the Green Paper, and the fact that the consultation period only ended in January, I gently remind the Minister that the Government have chosen to respond to Dowling, the Nurse review and the Green Paper as one. Those reports came through before Christmas, and there has been quite a long delay for the scientific community in waiting for them.

As the hon. Member for Stoke-on-Trent Central so eloquently said, we are in a golden age of British science. That is in no small part due to the championing of science by the Chancellor and successive Science Ministers, but there is no room for complacency. We must be mindful of the investment time lag, and acutely conscious that science and innovation will lie at the heart of our success as a nation. That is why I will simply restate that it is time for a step change in our investment in R and D. I call on the Government to ensure that our strategic capital investments are fully resourced so that we can sweat our assets, and I restate our key recommendation, which is the publication of a long-term road map to increase public and private R and D up to 3% of GDP. That strategic investment will create jobs, increase productivity, attract inward investment, and fund the groundbreaking discovery that is necessary to fund the great global challenges of our time.

Question deferred (Standing Order No. 54).

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DEPARTMENT OF HEALTH

End of Life Care

[Relevant Documents: Fifth Report from the Health Committee, Session 2014-15, End of Life Care, HC 805, and theGovernment response, Cm 9143; First Report from the Public Administration and Constitutional Affairs Committee, follow-up to the PHSO report: Dying without dignity, HC 432, and the Government response, HC 770; Sixth Report from the Public Administration Committee, Session 2014-15, Investigating clinical incidentsin the NHS, HC 886, and the Government response, Cm 9113.]

Motion made, and Question proposed,

That, for the year ending with 31 March 2016, for expenditure by the Department of Health:

(1) further resources, not exceeding £25,869,317,000 be authorised for use for current purposes as set out in HC 747,

(2) the resources authorised for use for capital purposes be reduced by £945,313,000 as so set out, and

(3) a further sum, not exceeding £252,304,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Julian Smith.)

3.52 pm

Dr Sarah Wollaston (Totnes) (Con): The care that people receive at the end of their lives has a profound impact, not only on them but on their families and carers. All Members of the House want people to be able to access the highest quality care, irrespective of their age, diagnosis, where they live or the setting in which they are treated. We know how to deliver world-class care—indeed, we know how to deliver globally inspiring care. To start on a positive note, I should say that The Economist ranks Britain as the best in the world, from among 80 nations, for delivering end-of-life care, and we should be proud of that. The disadvantage is that that care is not available everywhere to everyone, and that is the challenge we face today.

In the 2015 report “Dying without dignity”, the Parliamentary and Health Service Ombudsman set out some starkly worrying cases of poor care that highlighted a theme, and she was clear that it is a recurring and consistent theme in her casework. For that reason, the Minister must look carefully at the themes in that report, and also at other reports that have been produced.

At the end of the previous Parliament, the Health Committee produced a report on end-of-life care, and I thank all members of that Committee, the Committee staff and our Committee specialist advisors for their valuable input, as well as the very many people and organisations from around the country who contributed.

Mark Tami (Alyn and Deeside) (Lab): Does the hon. Lady agree that we must also consider the families of those children who unfortunately have very short lives? We need support for them as well, and it should be available across the country.

Dr Wollaston: I agree entirely with the hon. Gentleman that this care should apply irrespective of someone’s age or the setting in which they are treated. Social care will be integral to that, and I will expand further on that issue later on.

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Another report the Minister will be aware of—it was commissioned by the previous Government from the Choice in End of Life Care Programme board—is “What’s Important to Me. A Review of Choice in End of Life Care”. It is now exactly a year since that report was launched. When can we see a timetable and a response to that long-awaited report?

I know other Members want to speak, so I will just touch on four key themes today: variation, communication, choice and control, and funding—including funding for social care. On variation, dying does not make equals of us. People with cancer are currently accessing about 75% of specialist palliative care. We are making great progress in that regard, but we need to make such palliative care available to people with other diagnoses. Our report touched on poor access for elderly people, particularly those with a diagnosis of dementia. The Minister will be aware of the “National Care of the Dying Audit for Hospitals,” which showed that 21% of hospital trusts are meeting National Institute for Health and Care Excellence guidance for providing seven-day-a-week, face-to-face specialist palliative care between the hours of nine and five. In fact, only 2% of trusts are making that care available around the clock, seven days a week. We have a long way to go.

Tackling variation means understanding where the gaps exist. The VOICES survey, which collects the views of informal carers and evaluates the services available to them, has been invaluable in setting out the issues important to those who have been bereaved and the experience of their loved ones after a bereavement. A point that has been made to me very forcefully is that we could do so much better in addressing the gaps in provision if the VOICES survey was expanded. Currently, it does not have enough power to be able to identify where there is variation around the country. Will the Minister address that point when he sums up?

John Redwood (Wokingham) (Con): I wonder whether my hon. Friend could give me some guidance. Ideally, when should end-of-life care begin? What sort of time period are we talking about and how much uncertainty is there over the diagnosis? There are all sorts of complications: we cannot be sure whether someone is terminally ill and is going to die within a limited number of days.

Dr Wollaston: My right hon. Friend raises a very important point. It should start as soon as possible—as soon as someone receives a life-limiting diagnosis. We need to start those conversations much earlier on. We need to get better at identifying, towards the very end of life, when people are in the final stages of an illness. I will touch on that point in greater depth in a minute.

We should recognise some successes and welcome the changes made by the Care Quality Commission, in one of its thematic reviews, to prioritise end-of-life care. Does the Minister have any plans to roll out that rather successful approach in prioritising end-of-life care to out-of-hospital settings? The CQC has highlighted successfully the critical importance of leadership in improving end-of-life care, examining how having a named individual—not as a tick in a box—translates into their leading change within the hospital and identifying

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other individuals there who can improve the quality of care at the end of life. Recognising it as a thematic review would be very helpful in other fields.

The critical importance of training has been raised by all those who have commented. We need to provide adequate training for medical, nursing and caring staff across the board. Has the Minister had any conversations with Health Education England about what progress can be made in rolling out further training?

On communication, which my right hon. Friend the Member for Wokingham (John Redwood) touched on, early identification will be crucial to rolling out end-of-life care to other groups beyond the traditional groups who access specialist end-of-life care. That means health professionals having the confidence and training to raise these issues at a much earlier stage and to start those difficult conversations that are too often put off.

We know that having an end-of-life care plan enables people to exercise much greater choice and control. We could go further in looking at explaining to people the differences between, for example, advance statements of wishes and advance decisions to refuse treatment. We could help people to put in place lasting powers of attorney, and nowhere is that more important than when people have been diagnosed with dementia. These conversations need, critically, to start at a much earlier point.

The sharing of communication between professionals is another issue. I know that the Minister has taken an interest in electronic care planning. When people have a life-limiting diagnosis, how can we ensure that at whatever point in the system they access care, they will not have to keep repeating their story? People’s wishes need to be understood at the earliest possible stage. We know that electronic care planning can help to reduce unnecessary hospital admissions. It is crucial for ambulance staff, for example, to have access to people’s records—with the patients’ consent, of course—so that they can be shared widely. Will the Minister update us in his summing up on what progress he has made with respect to electronic care planning and recording people’s wishes?

We can also improve communication by putting in place care co-ordinators. This point has been made to me repeatedly by people who are suffering from life-limiting illnesses. The system can sometimes appear to be terribly confusing, so allowing families to have a single point of contact to advocate on their behalf at a time when they are in distress can make a huge difference, as can having a named clinician who is taking overall responsibility for the care.

On care for people at the very end of life, the Minister will know that over the years we have much debated the Liverpool care pathway and its success. Other Members may wish to talk in greater detail about that, but emergency care treatment plans are important so that people can clearly document their wishes well in advance—not as a tick-box exercise, but as a considered exercise of having discussions with individuals and their loved ones about what their wishes are and then ensuring that they are respected. Will the Minister tell us where we are now with emergency care treatment planning?

At a time when people so often feel that they are losing control towards the end of their lives, it is vital to give people more choice and more control. That was the key theme of the so-called “Choice” review, on which I

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hope the Minister will update us. Where are we now with all who need it having a “national choice offer”, as it was termed? We know that about a half of the 470,000 people who died in 2014 died in hospital, yet we know from the VOICES survey that of those who expressed a preference, only 3% wanted to be in hospital. We are a long way from allowing people the kind of choice and control they want about where to be at the end of their lives. Most people would prefer to be at home, surrounded by their loved ones. We can do far better.

Many practical issues need to be addressed. One that I have seen first hand in my clinical experience is where families are exhausted and overwhelmed by caring responsibilities. Sometimes the individual at the heart of this will opt to go into hospital because they feel bad about the burden they feel, often wrongly, they are placing on their families. One key theme of our Health Committee report was that nobody should have to end their life in hospital for want of a social care package. That will mean being much more generous about providing free social care at the end of life, or much more rapid access to the assessments needed to allow people to continue in care, as they are sometimes very delayed. I hope the Minister will update us on that, too.

The Minister will be familiar with the work of the Nuffield Trust. Its report on the use of Marie Curie nurses, for example, pointed out that the service could save total care costs of £500 per patient and also allow many more people to be where they wanted to be at the end of their lives. Not only is the service good value for the overall health and care system, but it provides the choice and control that people desperately need and deserve at the end of their lives.

Funding lies at the heart of this issue, and it is not just a question of social care packages. I know the whole House agrees that we owe an enormous debt of gratitude to the hospice movement. Hospices play a pivotal role in outreach, providing specialist support not just for hospitals but, critically, throughout the community. Rowcroft hospice, in my constituency, is hugely valued in the community. It provides extraordinary levels of care and supplies many specialist services to the NHS to deal with—cases of lymphoedema, for instance. This week, however, it informed me that it faces a funding shortfall of £1 million next year. While about a third of its funding comes from the NHS, about 60% comes from charitable giving.

Hospices do not want to lose their link with the voluntary sector, because it is deeply embedded in the way in which they work in communities. However, it makes them rather vulnerable, because the level of charitable giving and legacies can vary greatly. What they need is a higher percentage of stable core funding to allow them to expand the important work that they do. The Minister will probably want to comment on the so-called currencies that are being developed to replace funding for palliative care. The feedback that I am receiving suggests that there is a risk that that will become a rather bureaucratic process, and there is also a worry that its implementation by clinical commissioning groups will not be compulsory. An update from the Minister would be helpful.

Will the Minister also assure us that, if the Government intend to implement all the recommendations of the “Choice” review—which I hope they do—he is satisfied

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that, across NHS England, the business plans that have been established will allow sufficient funding for a full implementation?

I know that other Members wish to speak. There are many other issues that I could raise, including bereavement support and research, but let me end by asking the Minister to be truly ambitious. I think that we can achieve seven-day, 24-hour access to specialist palliative care in all settings, and that we can address variation and give people choice and control at the end of their lives. It would be an extraordinary achievement for the Government to go further. We should not rest on our laurels because we are leading the world; we should say that we lead the world not just for some people, but for everyone.

4.8 pm

Julie Cooper (Burnley) (Lab): I am grateful for the opportunity to speak about such an important issue. Let me begin where the hon. Member for Totnes (Dr Wollaston) left off. I have been very impressed by what I have read. When end of life and palliative care in this country is at its very best, it is indeed the best in the world, which makes me proud to be British. However, it saddens me that that is not the case more widely. All the recent reports have demonstrated that access to the very best care varies tremendously, and is very patchy. It is for that reason that end of life care has been the subject of recent studies and reports, not least those of the Health Committee.

I understand that a very thorough piece of work was done before I became a member of the Committee last year, and that concerns were raised about this very issue. The “Choice” review body looked into it as well, and came up with various recommendations. I want to focus on one of those recommendations in particular. The review recommended that 24/7 care should be made available for people in a community setting. The point has already been made that it is hard to define the end of life and the timescale involved. Indeed, the British Medical Association makes the point that more funds are needed to train staff to a level at which they can better identify these things. The end of life can be a lengthy process, and people need support at this most important time of their life.

Most people who responded to questionnaires on this subject have said that they would prefer to die in the comfort of their own home, surrounded by their family. In order for that to happen with the maximum dignity and the highest standards, investment is needed in social care above all else. The recent cuts in social care budgets have been a matter of concern for most of us. Lancashire County Council is further reducing its spending on social care, and the elderly and disabled in my constituency and their families are already worried about the impact that this could have on them. However, we still aspire to have the highest possible standards for end of life care, and the two concepts simply do not add up.

I wonder why the Government are delaying their response to the “Choice” review. We desperately need to hear what their plans are, to determine whether they are really listening. The “Choice” review also recommended additional funding of £130 million, because the £8 billion that was allocated for spending in the NHS has already been well and truly spent many times over. County councils’ adult social care budgets are feeling the pinch.

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Last year, in the run-up to the introduction of the private Member’s Bill tabled by my hon. Friend the Member for Wolverhampton South West (Rob Marris)—the Assisted Dying (No. 2) Bill—people in my constituency told me of their concerns about dignity at the end of life. Many of them asked me to vote to support the Bill because they were worried that a level of care that afforded them the dignity they wanted would not be available. They were worried about whether they might suffer and what the experience would be like for their families.

This issue is rightly at the top of the agenda, because this is the very least that we can do for the elderly and the sick. We do not like to talk about it, but everyone’s life is going to end and we need to think about this. The fact that we cannot do this better in 21st-century Britain makes me ashamed. We know that we could do it better, so I urge the Minister to read the recommendations put forward last year by the Health Committee and by the “Choice” review. In fact, I am sure that he has already done so. Almost 12 months have gone by, and this is a matter of urgency. It is quite shocking that we have not dealt with it before. I urge the Minister to look at the recommendations and to ensure that those who choose to die in their own homes in the community get the excellent care and support that they rightly deserve.

4.13 pm

Mr Robert Syms (Poole) (Con): This is a timely debate. We do not discuss this matter regularly, and I pay tribute to the Health Committee for producing its report. Having looked at the Official Report, I understand that the last debate on the subject took place in 2011. That debate concentrated on Great Yarmouth and Waveney. The subject deserves a lot more discussion because it affects many of our constituents and their families. If things go wrong at the end of life, it can leave the surviving partner and the family with a great sense of guilt. All of us have had people come into our surgeries who cannot get over the way in which a relative has been treated in these circumstances. It is absolutely vital for the wellbeing of the families that the Government get this policy right, so that they can move on and recover from the experience. Over the years, I have observed fantastic fundraisers for hospices in the community, and this is one area where the charity sector comes into its own, with rugby matches, cricket matches and jamborees. These things do get public support but it is sometimes a hard ask to keep raising the sort of money that they do. I therefore welcome the fact that the Government have increased the funding, although I think it is right and proper that they do not overdo it, because sometimes Government money can drive out money raised by the private sector.

Julian Knight (Solihull) (Con): My hon. Friend is making a powerful contribution. Will he reflect on the importance of not only the care of the patient, but the care of the patient’s family at this most difficult time? The new state-of-the-art Marie Curie hospice in Solihull provides not only very good patient care, but a real home from home for relatives and patients at this most acute time.