Science, Innovation and Technology Committee

Oral evidence: Work of the Secretary of State for the Department for Science, Innovation and Technology, HC 1543

Wednesday 3 December 2025

Ordered by the House of Commons to be published on 3 December 2025.

Watch the meeting

Members present: Dame Chi Onwurah (Chair); Emily Darlington; George Freeman; Dr Allison Gardner; Kit Malthouse; Samantha Niblett; Dr Lauren Sullivan; Adam Thompson; Martin Wrigley; Daniel Zeichner.

Questions 1 - 83

Witnesses

I: Rt Hon Liz Kendall MP, Secretary of State, Department for Science, Innovation and Technology; Emran Mian, Permanent Secretary, Department for Science, Innovation and Technology.

Examination of witnesses

Witnesses: Liz Kendall and Emran Mian.

Q1                Chair: Good morning and welcome to the Science, Innovation and Technology Committee. Today’s session is on the work of the Secretary of State for Science, Innovation and Technology and we have the opportunity for the first time to hear from both the Secretary of State, Liz Kendall, and the Permanent Secretary, Emran Mian.

Secretary of State, it is great to welcome you here and the Committee really appreciates you joining us. It is almost a year to the day since we heard from your predecessor, Peter Kyle, and you have been in position for around three months now. My first question to you is: what are your top three priorities for the Department?

Liz Kendall: Thanks and it is great to be here. My No. 1 priority is growth. My view is that there is no route to significantly better growth in this country and no answer to how we pay our way and compete with the rest of the world without science, technology and innovation absolutely leading at front and centre. That is my overwhelming focus. The Government also clearly want to make sure that that growth is felt in all parts of the country and benefits people from all walks of life.

My second priority is about transforming public services and indeed how Government themselves function. There is huge potential for digital technology and AI to make Government and public services fit around people rather than people having to fit into lots of different public services, to join up support and make it much more personalised. When Keir appointed me in this job, he was really clear that I have a background in public service reform and that is what he wanted me to bring to this role.

The third priority for me is that the only way we are really going to be able to seize the opportunities that technology and AI in particular can bring is if we do two things. The first is to keep kids safe online and the second is to make sure people have the skills they need as the workforce inevitably changes and AI becomes adopted more broadly.

A lot of people are worried about AI and what it means for them and their jobs. As a Government, we have a duty to say there are positive things coming in future but we are going to make sure you have the skills and opportunities to grasp that potential. As a Labour Government we want to make sure that it works for the people and places that most need the good jobs of the future. Those are my three broad priorities as Secretary of State.

Q2                Chair: I very much welcome the emphasis particularly on regional growth, as our inquiry into regional innovation and growth is concluding, and online safety, which we will be coming back to in more detail. Can you say where your visions—as you have just set out in your priorities—diverge from those of your predecessor?

Liz Kendall: They are completely in alignment. Peter was extremely passionate about using the potential of this Department to grow the economy and really drove forward the agenda on modernising public services.

I would say the one thing that I bring that is different is I am a woman and a feminist and I want to see more women in science, technology and innovation getting the same chances and opportunities as everybody else, which would be better for them, the economy and science and tech. That is why one of the first things I did was set up a Women’s Tech Taskforce to try to drive an increase in the number of women participating in this absolutely crucial sector.

Q3                Chair: This Committee has a number of women on it with backgrounds and experience in science and technology so your emphasis on that is certainly welcome and I am sure we will return to that.

Secretary of State, the Department published what it called a blueprint earlier this year. It was a blueprint that was lacking in detail and we were promised that it would be followed with a roadmap. The roadmap was promised in the summer but has been delayed and one reason given for the delay was to make sure that it aligned with your priorities. Have you been reforming or changing it in order to align with the priorities you set out? When will we finally get the roadmap that was promised in June?

Liz Kendall: I know it has been delayed since the summer. I would also say it is because there is a huge amount of really positive things in what we have achieved since we came into Government and setting out where we go next in future. It has been quite a busy time in politics over recent months, up to and after the Budget. Obviously, I want to get this report out because we have said we would get it out, but I also want to make sure it is done at a time when we might get an opportunity to look at some positive things that we have done and will do in future. I want to make sure we have a good slot to do that but I am really hoping it will be out as soon as possible, probably not before Christmas but certainly at the start of the new year.

Q4                Chair: Are we talking January then?

Liz Kendall: Yes. I want it out because it should be out but you will forgive me for wanting to get a good hearing for it because there is some really excellent work in there and some really exciting new things for the future.

Q5                Chair: Since your appointment, what have you seen that you would most like to change?

Liz Kendall: I have seen some brilliant things that I wish the rest of Government was like. I will say this first and then some things that I would like to change. I do not know if you have been to the Government Digital Centre as a Committee but I thought it was an incredibly positive, dynamic and outcomes-focused centre surrounded by what they are actually trying to achieve for the public with a real focus on users and it looked quite different. I loved Caxton House at the DWP but it looked a tad different from that.

The things that we need to do more on are even more relentless focus and priority on growth and bringing all the different parts of the Department to work together. I have discussed this with Emran already. Other Government Departments have headquarters outside London and have more of a regional presence, which is beneficial.

Chair: You can expect bids from every Committee member soon.

Liz Kendall: I will be careful what I wish for but that is something that is different. The third thing is just speaking more human. The reason that is important is that I believe you have to take the public with you and show the benefits of science, technology and innovation to people, because that is who we are here to serve and it is taxpayers’ money that we spend. There is more that we could do there.

Q6                Chair: Obviously you talked about public services and digital transformation, and a big driver for that is efficiencies, particularly at this time, and making savings. Your Department has committed to delivering efficiency gains of £32 million per year by 2028-29. I calculated that that is less than 0.5% of your budget. That does not really seem to be a big advert for the power of digital transformation when you are committed to only that level of savings. Can you tell us why that is and what your priorities are for those savings?

Liz Kendall: I do not know if Emran wants to take that one.

Emran Mian: I am very happy to come in on that. You are right to observe that we were very fortunate in the spending review and that overall the Department had a very positive settlement. I am sure we will talk about it later in the session, but the R&D budget is going up by a very significant amount.

Chair: We will talk more about that.

Emran Mian: Digital spend across Government is going up very significantly.

Q7                Chair: Can we talk about the savings specifically?

Emran Mian: I see two opportunities for savings in the Department. One is we are a classic merger organisation or an organisation that has come together from other organisations: a part of the former DCMS, a part of the former BEIS, colleagues who have come to us from the Cabinet Office, and of course we are now in the process of merging colleagues from Building Digital UK and the UK Space Agency into DSIT. As a consequence, there are certainly opportunities for efficiencies in how we are organised and in our corporate services. As you would expect, both Building Digital UK and UK Space Agency have many of their own corporate services in terms of HR, finance and communications.

Overall, you are right to observe that the challenge for us on efficiencies is perhaps less than that on other Departments. That perhaps reflects that we are not a big operational Department; the big operational part of the Department is the Government Digital Service, which is actually funded to grow over this spending review period because of how much more we want to deliver on Government Digital Services.

Q8                Chair: So will your savings as a Department be made from, if you like, merging rather than digital transformation?

Emran Mian: There are savings to be made from having more efficient corporate services across the merged organisation. We will also have savings that come from elsewhere. For example, at the moment, I have international work happening in several different parts of the Department, which is natural enough because the Department has come together from different organisations. We could probably organise that better so are looking at that. We will also make some savings from the better use of digital in the Department itself.

Q9                Chair: But you are not budgeting for that?

Emran Mian: We were the first Department in Government to have rolled out Microsoft Copilot to all staff. Other Departments have now done it but we were the first ones to do it. Already from the early work on that, we can see that that is saving the average colleague about half an hour a day of the work that they are doing. You need to aggregate that and think about entire workflows, but that will also give us opportunities for efficiencies over the spending review period.

Q10            Martin Wrigley: Thank you, Secretary of State, for outlining your priorities so clearly; I particularly like the people-centred approach that you are talking about. I wonder if you could outline for us what success looks like for you in this role and how you would measure it.

Liz Kendall: For me, success looks like our world-leading abilities in life sciences, AI and increasingly quantum, that we keep our lead in those areas and create more jobs. I am pleased that just in the last 11 months we have announced four AI growth zones—I myself have announced three in the north-east and north and south Wales—creating thousands of jobs with billions of pounds of investment. I want to see that spread across the country, but crucially, I want to make sure we hit the targets we have set ourselves for ensuring 7.5 million workers are upskilled in AI and tech so that they can actually seize those opportunities.

I see it as keeping the lead where we are strong, pushing forward where we can do more, having a stronger regional spread of growth, but also making sure the people who most need those skills to get the jobs of the future actually have them. I see it as that tiered approach in terms of global leadership, regional benefits and individuals who can actually get the opportunities we are creating.

Q11            Martin Wrigley: If I may, how would you measure global leadership?

Liz Kendall: You are probably aware of many different indices on where we stand globally in terms of life sciences. I am quite a fan of Tom Cruise, who said, “Follow the money,” or, “Show me the money.” So far this year, we have had more venture capital investment in our AI, tech and innovation in this country than France, Germany and Switzerland combined.

Where the money is going is important in terms of building future success. I want to see our world-leading researchers and universities holding their position but in particular those regional jobs and growth. There is real potential—particularly in AI—to ensure the parts of the country that led the Industrial Revolution now actually lead this. In the north-east and north and south Wales, we are actually building these growth zones, sometimes on the very land that was used in the first industrial revolution. It is a combination of measures.

Q12            Chair: The Committee would be interested to see more details on those measures. You have given some examples, but if there is a list of measures that you could share with us that would be great.

Liz Kendall: Yes.

Q13            George Freeman: Thank you for setting out such a bold programme of R&D-driven growth. Personally, I support it; I support the industrial strategy and it is great to see. I want to ask three questions, really, one about money, one about sectors and clusters, and one about delivery.

On money, we have had a nice letter from the Department setting out an £86 billion R&D package over the spending review period. I was proud to get total R&D funding to £20 billion a year. Could I just check: £20 billion a year over a traditional CSR is £60 million, over two CSRs is £120 million, and over 10 years—Minister Vallance wisely talked about trying to do things over 10 years—is a lot more. Permanent Secretary, could you just outline for us what the £86 billion number covers? I am particularly interested in how much of that is going through UKRI and how much is not and then we will get into delivery.

Emran Mian: The £86 billion figure is across the four years of the spending review. From that, £58.5 billion is the part that will go through DSIT’s budgets. As you would expect, the largest part of that goes through UKRI, which is £38.6 billion over the four years of the spending review period. In addition to the money that goes through UKRI, the next biggest budget is the money that goes towards our association to EU programmes—such as Horizon—which is about £8.7 billion. There is then £2.8 billion that goes to the UK Space Agency, £1.5 billion that goes to the Met Office and £1.2 billion that goes to the Advanced Research and Invention Agency. Those are some big budgets and together go to the £58.5 billion that is DSIT’s share of the overall R&D budget. The difference between that and the £86 billion is the biggest R&D budgets that are held by other Departments, namely MoD, DHSC, DESNZ and DBT.

Q14            George Freeman: The first point is that actually we are now on four-year spending reviews, not three, which is a step forward. So £58 billion goes through DSIT and £28 billion in other Government Departments. Minister Vallance set out the three buckets: blue sky, growth and sovereign missions. Again, I support that; it was a bucket category I tried to impose on UKRI and it bitterly fought back in defence of blue sky. He set out £14 billion for blue sky, £7 billion for growth and £8 billion for sovereign missions—that is £29 million—plus £7 billion for talent and infrastructure. Is the talent and infrastructure through UKRI or across Government?

Emran Mian: I expect the talent and infrastructure figure will also include the money that goes to the national academies and some infrastructure spend will be in the other lines, such as potentially the Met Office. We can break it down for you at the next level and write on that if that is helpful for the Committee.

Q15            George Freeman: It would be, thank you very much. The point for colleagues is that DSIT has a big chunk but there is also a big chunk across the rest of Government. I will come to the delivery question in a moment.

Chair: Just to confirm, that big chunk across the rest of the Government is not actually ring-fenced for science so we cannot say—

George Freeman: It is science, research, innovation and technology across Government.

Chair: But it is not ring-fenced in each Department.

George Freeman: Is that right?

Emran Mian: These allocations are published and are confirmed R&D budgets across Government. As you have just heard me say, we are accumulating those to construct an overall figure for R&D spend across Government. We have made a commitment to spending that amount of money on R&D across Government across the spending review period.

Q16            George Freeman: I am going to jump to my delivery question because this is exactly where this goes. In an attempt to try to bring some co-ordinated cross-Government delivery to this, we set up the Council for Science and Technology. I have to say it became a bit of a talking shop, to be honest, but it was an attempt to drive that cross-Government leadership. That is at Secretary of State Cabinet level.

I also set up a Minister of State delivery team across those key Departments: DSIT, DEFRA, DBT, DESNZ, Department of Health and now Defence. Can you just talk through what the delivery infrastructure is so that the public can see the £86 billion being deployed in support of cross-Government growth jobs and not just poured into an academic silo, which is sometimes what voters fear?

Emran Mian: I would characterise it as there are probably three levels of activity that we are engaged in to manage this across Government. The first level is the data itself. We work with all Government Departments to ensure we have really good spending data on R&D spend and consolidate all that data. You will have seen some when you were a Minister and we were in the early days of putting it together. It is what we call the R&D stack across Government. It starts with having that really clear data picture.

That data picture then allows us to engage in much more effective advocacy across Government and we do that in collaboration with the Government Chief Scientific Adviser and the Treasury. A really important moment for that was, for example, in the run-up to the spending review to ensure that there was real clarity about where Departments were putting in bids to the spending review that were R&D relevant and what that would do to the overall shape of R&D spend. So I would say our second role is advocacy.

The third role, which is once budgets have been allocated, is about managing that portfolio. Of course, Departments are responsible for their budgets via their accounting officers and Secretaries of State, but what we do is we have a portfolio management approach to cross-Government R&D where DSIT brings together—again, with the Government Chief Scientific Adviser and Chief Scientific Advisers of Departments—particular focus on the Departments that are big spenders of R&D and the senior official level budget holders. We do that with the Treasury to be able to look at R&D spending and to manage across the portfolio.

As you would expect, there will be lots of opportunities to join up programmes because if Departments deliver their programmes on their own, they might not spot the opportunities for collaboration, so we want to help to make that happen. We want to avoid situations where two Departments are essentially talking to the same research team about funding something very similar.

Q17            George Freeman: Governments have a cycle. You make a big announcement, set out the industrial strategy and so on, and then it is about delivery. What I am wondering is: where do the necessarily tough, internal delivery challenge questions come? Where is the conversation going to happen when the defence industry says, “Why is UKRI not properly backing defence tech?”? The industry has said to us, “You’re spending £9 billion across the three years on life science research but you’re not backing innovation into the system properly.” Where does that joined up conversation about delivery happen?

Emran Mian: I realise you are speaking more widely than UKRI, but just to cover the couple of examples that you gave, with the new leadership coming in—Sir Ian Chapman as chief executive—we have been trying to get to a sharper set of strategic objectives and measures for UKRI. Ian and his team have really worked with us very closely on this. We published those as part of the UKRI annual summit last week and what you will see from these is there is more to do. Some are quite processed in nature and are about doing a certain thing, but some start to get very firmly into the space of measuring for outcomes. For example, a key result that we will be assessing UKRI against is demonstrating that it is getting at least a 3:1 ratio in leveraged co-investment for some key programmes, including one in life science.

Q18            George Freeman: I strongly welcome that; that was one of the things I was pushing. Sir Ian Chapman is fantastic. UKRI’s strongest defenders would not suggest that it is the Formula 1 engine that we really need to put £24 billion-odd a year into the system. Secretary of State, I suppose I am thinking more about the ministerial leadership across Government. Where do you see and fit into that?

Liz Kendall: What is underlying your question is that it is taxpayers’ money. While it is absolutely right to protect the curiosity-led research, we need to make sure we are focused on delivering the outcomes that we set as a Government and get the best bang for our buck. When you were a Minister, you tried to pull the levers to get this working. We are doing that in the way that Emran described too. Is there more we can do? I am absolutely sure that there is.

If I look within our own pipeline, we have Innovate UK, then UKRI, then the British Business Bank, then the National Wealth Fund. How do we actually make sure that there is a proper pipeline there? How do we use the power of public and government procurement? It is right to set a strategic priority as a Government and make sure we are talking to each other. Certainly they are some conversations I am having with Cabinet colleagues because there is far more that we need to do together on this. But as you will know from your experience, you can set up a cross-Government committee and if it ends up just being a talking shop, that is not going to work.

Q19            George Freeman: I commend you on, “Follow the money,” because the best answer to the public is this £86 billion is going to unlock a lot of private investment. Do you have any plans to measure what that number is by sector, by Department, in total? It would be very powerful if we could have a moment where we say, “Look, that number used to be X. We’ve increased it by 20%. More money is coming in.” Do you have any plans to have that conversation across Government?

Liz Kendall: There are individual things that we are doing, for example—we may come on to this at some point later in the discussion—around advanced market commitments in AI hardware and the sovereign AI fund where we have public money that we want to put in to leverage in private money. We will need to make sure that we actually deliver that and have some outcomes and figures to show, but you are asking for that at the meta level and that is a point very well made.

Q20            George Freeman: My last question is just linking back to priorities. I heard you loud and clear: growth is great, and then digital modernisation of democracy in Government and online safety, so two digital out of three. I welcome the industrial strategy; it is pretty high level and covers the vast majority of the economy. We set out before eight great technologies, and I am just wondering where those clusters of robotics, advanced manufacturing, space, clean tech, materials, agri-tech and so on are around the country. It looks a bit as though DSIT has become the AI deep tech Department for a modern Government rather than the research Department.

Liz Kendall: I understand why you are saying that but I am crystal clear that our world-leading life sciences are integral to this Government’s strategy on growth. It is why we have the life sciences sector plan. In the R&D funding, we are actually doubling the amount of investment in critical technologies and that includes engineering biology as well as AI and quantum. It is broad.

The reason that I have this particular focus on reforming public services in digital tech is it is long overdue and the reason I focused on the safety and skills aspect is that these developments are happening so rapidly we have to give people confidence. If you look at what particularly Patrick Vallance has led on research and development, the life sciences sector plan, and indeed—maybe we will come on to it at some point—the pharma deal we have just done, we are world-leading in that and are determined to continue doing that. That is a non-negotiable for this Government.

Q21            Kit Malthouse: I draw attention to my entry in the register; I am chair of the all-party parliamentary group for life sciences and I just wanted to ask you some questions about that, Secretary of State. Before that, we had a very interesting session with ARIA when it came to see us, and its funding model seemed to be super casual and flexible. Has its allocation been agreed as part of the budget settlement and is the 800 million quid reliable upon or is it quietly being repurposed, given that you are under pressure?

Emran Mian: It has been allocated £1.2 billion over the spending review period, which has been published.

Q22            Kit Malthouse: Can it call that down whenever it feels like it?

Emran Mian: Not quite. It is over the four years of the spending review period but it has flexibilities to move that between years.

Q23            Kit Malthouse: I just wanted to also ask you about approvals within the Department. Something that raised a few eyebrows with us was that effectively what we were told was that ARIA can send you a note, “We’d like 100 million quid please,” and you just send it, no questions asked. Is that the case or does it have to make an investment case to you internally in the Department and you can say yes or no?

Emran Mian: As a consequence of the Act of Parliament that set it up, ARIA has a high level of independence and flexibility consistent with the mission that it is trying to carry out. Of course it is spending taxpayers’ money though. There is a set of disciplines that come from that and it needs to be able to explain and account for the impact that it is seeking to achieve and whether it is actually achieving it.

Q24            Kit Malthouse: Given that it is funding blue sky science, do you have the necessary skills internally to judge whether its investments are appropriate or not?

Emran Mian: We are not in the business of trying to second-guess the investments that our funding delivery organisations are making. This is true of UKRI as well. We want to be very clear that the role of the Department is to set the strategy to reflect the priorities that the Government and Ministers have set in terms of economic growth and the sectors of the economy that we want to ensure are growing. It is then for the funding delivery organisations—UKRI and ARIA—to reflect that in the plans that they make. We would get into a duplicative system and too slow of a system if we were continually trying to double guess them.

Q25            Kit Malthouse: That is what I am trying to avoid. So is it more ticking the boxes, everything seems in order rather than a, “We think this quantum material is worth investing in,” or not, decision at the Department level?

Emran Mian: I would put it as somewhere in between the two. It is not exactly ticking the boxes only. You would expect us to be going through with ARIA in detail—as you would as a Committee—what is it trying to achieve and is it being successful in achieving it? Does it have the right management structures and expertise available to it? Is it consulting widely enough as it formulates its plans? I am really confident that it is doing a great job on those things and everything we hear from across the community tells us that as well.

Q26            Kit Malthouse: Secretary of State, I just want to ask you a bit about life sciences. You will not remember, but at the last departmental questions I asked you if you would put in a specific and ambitious demand about life sciences to the Treasury in the runup to the Budget, which—as we have heard in this Committee—is struggling as an industry to justify further investment in the UK. What percentage of what you asked for did you get?

Liz Kendall: I know you do your due diligence and read through everything in the Budget. There was quite a lot in the Budget on backing entrepreneurs and start-ups to scaleups, which was the main focus of what we did in the Budget. Specifically, we have obviously had discussions with Treasury and the Department for Health, particularly around this really important pharma deal.

Kit Malthouse: Before we move on to that because I want to ask you about that, more specifically about the Budget—

Liz Kendall: You will know that the spending review was settled before the Budget. I am very proud of the important investment we got in R&D, which we have just discussed; it was the biggest investment in R&D by any Government ever over the spending review period. We have to ensure we get value for money for that; that is crucial.

Q27            Kit Malthouse: Secretary of State, you will know that a big problem that the industry has at the moment is the complexity and difficulties with R&D tax credits, for example. The rules for R&D tax credits have changed every 10 months over the last 10 years—which is as much the previous Government as this Government—and the rules were merged; they are now not particularly generous to start-ups, which are probably where they are most needed. Did you put in any kind of bid for a change in the R&D tax credit regime?

Liz Kendall: You would not expect me to discuss things that did not actually end up being in the Budget. Everything that we secured in the Budget is spelled out there.

Q28            Kit Malthouse: But do you recognise that there is a problem with the R&D tax credit regime?

Liz Kendall: There is always more that we can do to back this crucial sector and we want to, but we have done something significant and important with the pharma deal that we have just secured. If you were going to ask what the big focus and priority has been since publishing the life sciences sector plan, it has been to do this and that is an important step forward. Yesterday the ABPI said that is important; it wants to see it delivered and there is more to do. But providing that stability, making sure we deliver those innovative drugs to patients as quickly as possible and securing those 0% tax credits are unique priorities and that has been my priority since coming in.

Kit Malthouse: I am sorry to keep compressing, but we are restricted on time.

Liz Kendall: That is absolutely fine.

Q29            Kit Malthouse: Since you are talking about the deal, I just want to ask: Wes Streeting went on the radio this morning and said he is not paying for it, so who is?

Liz Kendall: It will be delivered within the spending review settlements.

Q30            Kit Malthouse: That was not my question. I understand it is going to be delivered but we are just keen to know from which Department it is going to come.

Liz Kendall: It will be delivered from within the existing spending review settlements.

Q31            Kit Malthouse: By you?

Liz Kendall: No, within the existing spending review settlements across Government. What I would say to you is this—

Q32            Kit Malthouse: I am sorry, Secretary of State, I do not mean to interrupt so forgive me but it would be useful for us to have a bit of clarity on where that money comes from. First, nobody seems to know how much it is. The King’s Fund is estimating £3 billion; the Secretary of State for Health said on the radio he thought it might be £1 billion. We are not quite sure where it is going to land.

Obviously it has a domino effect on the wider industry. European drug manufacturers are going to say, “Well, hold on. So the American drug manufacturers are getting more for their drugs. Why can’t we have more for our drugs?” While the headline of an achievement of zero tariff for exports into the US is great, there are lots of downstream impacts that none of us really understand and I guess we are looking for a bit of clarity.

Liz Kendall: Absolutely, you will want to push on that. I am sure there will be more information, but it is not just the 0% tariffs; this is about ensuring that for the first time in two decades, there is a change in the NICE thresholds. I remember when NICE was established by Frank Dobson back in the day. This is the first time in 20 years that that has changed. We are also capping the VPAG at 15% to give some stability there.

What our objective has been, and what I should say was Patrick Vallance’s objective and he has delivered, is making sure patients get quicker access to the most innovative new drugs and medicines. The pharmaceutical sector is exporting £6.6 billion of drugs to the US at 0% for the next three years. Of course there is more we can do and more information will come out, but you are right to press on that.

Q33            Kit Malthouse: We understand the headlines. At the moment, none of us knows how much it is going to cost, where the money is going to come from or indeed what the downstream effects of the deal are going to be. I am conscious you are giving us a lack of detail today and I am sorry about that, but hopefully you will be able to write to us as a Committee at some point in the future to give us that.

Liz Kendall: I will always provide as much detail as I can.

Q34            Kit Malthouse: There is potentially quite a lot of money that could come out of other budgets that would be doing other things. Just on the VPAG, while part of it is capping the VPAG at 15%, is that only for US manufacturers or will that apply across the board in life sciences?

Emran Mian: My understanding is that it applies across the board, but again we should probably follow up with the Committee.

Q35            Kit Malthouse: Has that been agreed more widely with the industry? Because we have also heard in this Committee that that is a key problem that the industry has at the moment, that the VPAG is out of control. If it is only exclusively for the Americans and is reducing, that is obviously another cost that needs to be borne somewhere and I would imagine Wesley Streeting is going to say it is not him either.

Liz Kendall: We were right to clarify that but my understanding is that it is across the board.

Q36            Kit Malthouse: It has obviously been agreed as part of the American deal. I guess it would be helpful to understand if it was agreed with the rest of the industry, which is European, international and UK-based.

Liz Kendall: Should we write with further follow-up on that and other questions you are rightly raising because you want to see more detail?

Kit Malthouse: That would be really great. Do I have time for one more, Chair?

Q37            Chair: Yes. Can I just confirm, Secretary of State, you will write to us with your understanding of—

Liz Kendall: I will write with as much detail as I have of the deal.

Chair—the deal and, as Kit has pointed out, its downstream implications for European and other manufacturers, but also for generic and biosimilar manufacturers or providers in this country.

The question that we all want answered is whether the funding for this great deal and innovative medicines is coming effectively from the day-to-day medicines that so many of our constituents rely on.

Liz Kendall: I understand that and what I will make sure is that it is a letter that comes to you from us; obviously it is a deal that has involved the Department for Health and the Treasury. I will try to provide as much information as I have as quickly as possible and I will get that to you before recess.

Q38            Kit Malthouse: Of course, a concern is that while the negotiation achieved the primary objective, there may be unintended consequences that are costly elsewhere.

Liz Kendall: You will forgive me for saying that to have changed the NICE QALY thresholds for the first time in 20 years, got drug spending as a proportion of the NHS’s budget back on an upward trajectory when you look at where it was compared to other European countries, and got a three-year no tariffs, most favoured nation deal with the United States, that is a really significant and important achievement that has been talked about for many, many years. Companies have raised this access to innovative medicines and the competitive environment. I do not want to downplay the importance while rightly acknowledging the other questions.

Q39            Kit Malthouse: Nobody is downplaying it; we are just asking about the detail—

Liz Kendall: As you should.

Kit Malthouse—which, as we have discovered, is unclear, so we would be grateful if you could write to us.

The final thing I just want to ask you about is something we hear not just in life sciences and we actually heard it yesterday when we had a very good session on quantum technologies. One of the issues we hear again and again is this lack of scaleup funding for UK businesses. We are very good at primary science and can argue about how the funding gets allocated and R&D tax credits, which are incredibly complicated and difficult, and all that kind of stuff. We hamper ourselves there. Where we are really struggling is the scaleup. Although there were one or two small promises for the future in the Budget—reviewing EIS funding levels and all that kind of stuff—it did not strike me, unless you can correct us, that there was anything transformational in the Budget around that issue, with which other Governments have struggled, to be fair. I just wondered whether you had any plans to examine the overall structure of that Series A and B funding environment and what we might expect from you in the months to come.

Liz Kendall: You are absolutely right to say we have to do more to help our brilliant start-ups scaleup. I do not think that we have an issue with the great ideas, innovation and initial spinouts; that is precisely the issue. There is always more to do but let me just say this. If you look at the week before the Budget and the Budget together, what we are doing—this is not just on life sciences—is we have the first ever advanced market commitment for AI for chip companies of £100 million. We have appointed the new chair of our Sovereign AI Unit, James Wise, with £500 million. That is about putting a commitment into promising scaleups.

In the Budget, we also doubled eligibility for the enterprise management incentive, giving employees a share in the tech future. We doubled investment limits in venture capital trusts and are changing Government procurement rules to allow big and small companies based in the UK to get a chance at getting those government contracts. We also have the British Business Bank and the National Wealth Fund.

I am sure that there is more we can do but the Chancellor was clear in the Budget that there was a strong package there to help companies go from start-up to scaleup. We want those companies in the UK and I actually believe in competition. There are these huge world leaders out there. I want more of our companies coming in with the competitive edge. Have we made a start? Yes. Is there more we could do? Yes, and I would love to hear the Committee’s views about that. But the scaleup challenge is real and we are determined to tackle it.

Chair: I am sure you will be hearing the Committee’s views on the start-up and scaleup as part of our ongoing inquiries.

Q40            Adam Thompson: Secretary of State, you started by highlighting your three priorities and very rightly picked number one as growth. Obviously the Government are spending a lot of time talking about growth, again rightly; I very much welcome that. You also talk about how the recent Budget saw the biggest R&D investment ever, but how are you going to take that R&D investment and translate it into growth?

Liz Kendall: I know you know this, but the reason we as a Government think it is so important is that our best evidence is that for every £1 of public money spent in R&D, you get £8 of benefit to the economy over the longer term. When we announced the allocations for UKRI, we published new research that showed that for companies that got R&D funding over a six-year period compared to companies that did not, their turnover grew by around 21% and their workforce grew by about 23% so they were more profitable and employed more people.

As George was talking about, for the first time ever we are trying to institute a greater focus on our key priorities as a Government—our eight sectors in the industrial strategy—so that the R&D is focused on the sectors that we already do well in and lead in or that we want to do even better in future and on backing innovative UK companies so that they can indeed grow. There is a bit of a false debate: either you are picking winners, which is wrong for Government, or are just allowing all curiosity-led. It is perfectly legitimate and right for the Government to be able to say, “This is taxpayers’ money. We want to put it into the growth sectors that we believe we have most potential in as a country.”

Q41            Adam Thompson: I guess the point I want to drill down on is: exactly how are we going to make sure that happens and how is it going to be measured?

Liz Kendall: There is more to come out from UKRI. We have done the broad allocations in what Patrick Vallance calls the buckets, then there will be a next stage that shows precisely how those are divvied up and the outcomes that we expect to see. There is also a lot of work going on in Innovate UK, again to look at how public money is spent to get the best bang for our buck. It is quite a change and we would be happy to come back again about precisely which outcomes we want to see once further details are published. I know the Committee will also want to quiz UKRI again about how that money will be spent as further details come out.

Q42            Adam Thompson: We would like to hear back about maybe some specific metrics on how you are going to measure that, but if you can get back to us afterward, that would be really positive.

I was a scientist prior to coming here and spent a lot of time working in the UKRI infrastructure myself. Something I talked a lot about was longer-term research funding settlements, and one of the most positive things that has come out of the Government is the 10-year funding settlement. I know you have recently announced a National Quantum Computing Centre 10-year funding settlement. I was wondering how many more of these 10-year settlements we can expect and what are the priority areas that you expect those to be used for?

Emran Mian: I can come in on this. We are trying to think about the areas in which a 10-year budget will deliver the most impact. There is a careful balance here because providing these 10-year funding settlements obviously provides great certainty to the organisation or team that gets one but reduces the flexibility across the wider funding settlement. A great research team that emerges within the 10 years may then find it is being squeezed out if we have done too many 10-year funding settlements.

We are trying to be quite careful in thinking about the criteria. Essentially, we are working with four criteria. One is that a 10-year funding settlement could be suitable where we are looking to build or sustain infrastructure that supports discovery. The second criterion is where we are looking to support the ability to form long-term partnerships with industry, and so where industry will look to want to work with an organisation that has certainty about its own future and funding in order to be able to make a similar commitment itself. The third criterion is where you want to create a place where you can build and develop skills and talent confidently because the people who join that organisation then have the confidence that they can build careers there. The fourth criterion is to be able to foster international collaborations, because again international partners that may themselves have long-term funding settlements are then able to invest with confidence with a body in the UK that also has a long-term funding settlement.

We have done two so far. One is the Laboratory of Molecular Biology, which as you will know is the home of Nobel prize winners and a great international collaborator. The second is the National Quantum Computing Centre. Those are the two places where we have already made 10-year funding commitments running into the 2030s. We do not have a fixed view on how many more of these to do but those are the criteria that we will use to make judgments about any future ones.

Q43            Adam Thompson: I appreciate that you cannot specify exactly how many we are talking about, but is it an order of magnitude of two, five, 10, 30?

Emran Mian: I am not taking a view on the number.

Q44            Adam Thompson: Have you taken a view on priority areas for scientific research within that?

Emran Mian: The criteria are designed in such a way that we could be working across a number of different scientific areas. You should probably expect that the kind of areas we would be most interested in are the areas that fit the wider Government priorities in relation to economic growth, the industrial strategy areas. Equally, we really want to be led by where a long-term funding commitment will deliver the most benefit.

Q45            Adam Thompson: The point that you highlighted a minute ago about the pros and cons of longer-term funding settlements is absolutely right. Those are the sort of things that we need to consider—particularly when we give longer-term funding settlements—to ensure that they are delivering properly. How are you measuring the success of these over time? Do you have any metrics that you are putting in place beyond what is there currently?

Emran Mian: No. That is a very good question. Again, this is why having a clear set of criteria will help us. Our success metric should flow from the criteria that we are using to choose which organisations or areas get 10-year funding commitments. It is a good challenge. We do not have really clear success criteria yet but you should expect them to follow the selection criteria.

Q46            Adam Thompson: Talking as a former scientist, how are the longer-term funding settlements really going to impact the day-to-day lives of scientists?

Emran Mian: This is already something that is significant with the next four years that are ahead of us. It has been some time since we have been able to provide that level of certainty about science and research funding. The fact that last week we were able to set out the high-level budgets for UKRI and the other key organisations for the next four years is really significant, and the feedback we have had on that from the wider science and research community has been really positive.

The next step will be to provide the next level of detail on those allocations, so going into the areas that will be funded. In addition to the areas that get 10-year funding commitments, of course there are many areas—including infrastructure—that will want certainty about what that looks like across the four years. So the big effort at the moment and over the next few weeks is to get those more detailed settlements underneath the UKRI settlement agreed and out, and then that provides people with certainty over the next four years. It is the classic thing: it allows people to make solid plans, plan their careers and what international collaborations they are going to do, and crucially also to be able to make industry collaborations confidently.

Liz Kendall: Adam, I just wanted to very briefly return to your previous question to me. It was remiss of me not to say one thing that I wanted to highlight to the Committee. We obviously know there has been a huge amount of debate about the OBR, its downgrade of productivity and all the implications of that in the Budget. It obviously downgraded productivity by 0.3% over the last 14 years, or whatever it was, but said that it believed the potential to improve productivity over the forecast period of AI was 0.2%, so almost but not quite reversing that. Others would say that is a very conservative estimate. The IMF says it believes AI could improve productivity by 1.5% a year.

You are asking about R&D and growth, and actually this is relevant because a significant increase in R&D funding we have looked at is in R&D around AI. There is potential here. We need to be sober as we look at this. There are all sorts of claims going on. It might sound a narrow point but it is an important point for the economy that if that part of it works, it can be part of contributing to improvements in productivity in the country. I for one would take that—even at a conservative level—as really important for growth. I wanted to mention that to the Committee; apologies I did not say that earlier.

Q47            Adam Thompson: That is okay, thanks, Secretary of State. Just pulling back to the conversation that Emran and I were just having, I am intrigued to your thoughts on this. Something that I encountered in my previous career was I was on six-month funding settlements, maybe a year in some cases. It was almost impossible to get a mortgage, very difficult to plan long-term, very hard to set up things like families and set down roots.

Liz Kendall: Life, you mean.

Adam Thompson: Do life, exactly, Secretary of State. How do you think that the 10-year funding settlements are going to materially impact scientists in those positions moving forward?

Liz Kendall: I hope that it will give everyone greater certainty. I want more people to think that that is an option for them because they can be a normal human being, have a family, be a researcher and all that. Our starting point is really about what we as a Government need to do to back some areas such as quantum, which we know is rapidly increasing and needs long-term support, but with a specific objective that is improving outcomes for the country. Within that, do I think it will help scientists live better lives? I hope so.

Q48            Adam Thompson: I guess the bottom line is, are we going to see longer contracts?

Liz Kendall: As we come to the next stage of the UKRI funding, we have already set some 10-year plans. There will obviously be more detail as UKRI comes out with its detail. It is important that for some particular areas—I am acutely aware of the potential of quantum—that we set these longer-term funding settlements and I hope that that translates through the system.

Q49            Adam Thompson: One final question for you both, if that is all right, Chair.

Chair: Very quickly.

Adam Thompson: Something that we have seen in the last decade or so is a proliferation of anti-science opinion and expansion of a conspiracy theory and things. I have tangibly experienced an erosion of public trust and confidence in science as a professional scientist. What role can you, Secretary of State, and DSIT play in restoring public trust in science?

Liz Kendall: We are not a Government who have ever said we have had enough of experts; that was somebody else. Actually, some evidence shows that public trust in sciences in this country in particular is still high. I am sure we will all pore over the results of the covid inquiry and the importance of listening to science and experts. But I have also long believed that scientists must themselves bring the public with them in the debates that we are having and there are many people who do that.

I always want to make policy on the basis of evidence. Sometimes you do not have all the evidence, and if you waited until you had perfect evidence you would probably never act. But personally, I always want to know the facts and the evidence, and the scientists and the experts that I have come across in my brief three months in this job have been second to none. There are brilliant public voices out there making the case for science, and as I said, I am in favour of experts.

Q50            Dr Sullivan: Thank you both for being here today. Just to follow on from that, we have 80 science education centres across the country and they are a fantastic facility for allowing members of the public, young people and children to go in and really get their hands on science. Do you agree that these science centres are a good way to encourage and restore public trust in science?

Liz Kendall: Forgive me for speaking for two seconds as a constituency MP. I do not know if it is included in this, but we have the National Space Centre in Leicester. It is an absolutely bloomin’ amazing, incredible place, inspiring kids and helping them to learn about science in a fun, exciting way. It is linked up to a big space park where we are actually creating the jobs of the future. I have done a lot of work with it locally and we have actually had takeover days where my schools go in and do everything from flying drones to computer-aided design. These kids would never know that there could be jobs for them in a place like this and they are all linked together. They are brilliant and I would like to see more kids from poor backgrounds have access to these fantastic facilities.

Q51            Dr Sullivan: I am pleased to hear how great you think they are. The problem that they have been facing is they were set up in the early 2000s and we are now 25 years on. They fall between the gap; they are not funded by DSIT, the Department for Education or the Department for Culture, Media and Sport. They cannot apply for money from the Wellcome Trust, The National Lottery Community Fund or anything like that. How do you think we can maybe look at a cross-Department funding of capital and revenue to keep these amazing facilities afloat?

Liz Kendall: I will hold my hands up and say I do not know enough about this to answer you. I do not know if Emran does, but I am more than happy to take that away.

Emran Mian: I would just say—your question gets at this—that it is quite a mixed picture, is it not? Some are doing incredibly well and are in very rude financial health and some are struggling. Some of that will be down to decisions that they need to make about what their offering is to the public. Equally, there may be questions about whether they are able to access the right forms of support. As the Secretary of State says, this is something for us to take away.

Q52            Dr Sullivan: Would you be able to write back to me?

Liz Kendall: Yes.

Chair: Just to add, we have had correspondence and parliamentary questions about this and there is a definite gap. In terms of the discovery centres, it is predominantly the impact of covid and not of decisions that they have made, if you like, that has left them in perilous financial situations. We have had great difficulty in getting a Department—either yourselves, the Department for Education or the Department for Culture, Media and Sport—to take some responsibility for these fantastic assets to many of our constituencies.

Q53            Emily Darlington: Space is something that captures all our imaginations, from young children to older people. It is also becoming an increasingly important space, both militarily and politically. With the absorption of the UK Space Agency into the Department, what discussions are you having with the MoD in terms of its priorities? What role is that sovereign capability playing in the funding decisions for the research, development, and tech it is supporting?

Liz Kendall: I will let Emran talk about the UK Space Agency coming into the Department, but our two big objectives on space are economic growth and national security. Over the spending review, we secured an 8% increase in the core civil space funding of £2.8 billion last week. Through and to the UK Space Agency we made a series of commitments to work with our European colleagues on some critical areas, including assured access to space and the launcher capability.

Partly because of my constituency involvement, I am aware of the real potential for growth and great jobs. We can do much more there but, for national security aspects, having our own assured access to space is critical and that is one thing we are focusing on. We are trying to do fewer things better in many areas; not spread the funding so thin and have clear priorities. I do not know if Emran wants to say more about the UK Space Agency coming into the Department.

Emran Mian: The UK Space Agency coming into the Department is one part of a two-step process for us. The first step is having clear alignment between what the Department and the UK Space Agency are doing. Having the UK Space Agency in the Department will ensure we are able to do that in a better way. We will have a clearer front door for people and scientists into the industry. That is only the first step.

The second step has to be, as you say, for space to become a whole of Government activity; it is for DSIT to co-ordinate as the Department that leads on this sector. That involves very close co-ordination with defence, the intelligence agencies, and other Departments as well. What we are seeing at the moment, for example, are promising ways of getting mobile connections to more rural or remote train lines through satellite links rather than other technologies. So the range of Departments interested in space as a sector that we need to join up with to ensure the Government are using their buying power most effectively is growing. That just underlines that bringing the UK Space Agency into the Department is one step for us.

The second step is getting this working much more effectively across Government. We have started to have strong conversations with the Ministry of Defence, and you will have seen from the Defence Industrial Strategy 2025 that there is much more of a focus going forward on the new technologies that our armed forces need to deploy in order to be able to support their capabilities. This is moving in the right direction but there is a lot of work for us to do over the next few years.

Q54            Emily Darlington: I am going to move on to online safety, but can I recommend that there is a cross-Government space strategy? As you said, it affects every Department. Whether we are talking about climate change, health, or near-space critical minerals, whatever it might be, it goes right the way through every Department and we have not seen a space strategy from Government of that form for—

Liz Kendall: The last one was in 2022 and we are having our new one next year.

Q55            Emily Darlington: I wanted to come on to online safety. The Committee did quite a big report around misinformation in relation to the riots that happened two summers ago in the UK that shocked us all. We had a very strong series of recommendations including the transparency around algorithms. We had a lovely response from the Department, full of lovely words, which rejected all our recommendations. The particular one for us is transparency of algorithms because it does not just link to misinformation, it links to every other issue that we talk about in terms of online safety. Now that you are in the role, can you take another look at it? What is your feeling, in your discussions with social media companies, around the transparency of algorithms?

Liz Kendall: It was an excellent report. The response from the Department came just after I was appointed. I have read the report and want to highlight some things that we are and will look at.

First, you rightly raised issues around generative AI and whether it is covered by the Online Safety Act. This is not around the misinformation piece, but I know there has been a lot of concern, for example, around AI chatbots. I know that is a slightly different issue from the report, but I just wanted to put that on the record not least because the Chair asked about it last month. I am looking in detail at generative AI.

Secondly, on the chatbots issue, I wanted to tell the Committee that I did task officials with looking at whether there were gaps; whether all AI chatbots were covered by the Act. My understanding from their work is that they are not. I am now looking at how we will cover them. If that requires legislation, then that is what we will do. I will also specifically ask Ofcom to set out what it expects and, for those chatbots covered by the Act, what action is expected to happen.

Thirdly, we are going to be hosting an event with the NSPCC in the new year to look at issues around AI and keeping children safe online to see what more we need to do. We will also be launching a public education campaign with parents in Yorkshire and the Midlands to talk to their kids about the risks online, including AI chatbots.

There are many more things in the report that you raised but I want to say that I am looking at all this. That is important. One of the specific issues you raised in the report was around misinformation in advertising. Companies have to take down stuff that is illegal and harmful to kids but misinformation, fake pictures, and AI is really worrying. I have this principle of follow the money and it is the advertising that actually pays and fuels it. So I am going to be speaking to DCMS, which has a new taskforce on online advertising, to see if there is anything we can do within that to look at these issues.

That does not cover everything that was raised in the report but I wanted to say that I take these issues seriously. If I need to go further, I will. I want to look at what more we might be able to do to help to tackle these issues. That is not comprehensive in detail but I hope it shows an indication of where I am coming from.

Q56            Emily Darlington: It does and you were saying some really interesting things about chatbots. I am sure the Committee would love to contribute to that work in terms of what we have been doing.

I want to bring you back to my question about the transparency around algorithms. The reason we have pushed so hard on it as a Committee is because it is the algorithms that are feeding our children material that is harmful. It is also feeding harmful misinformation or disinformation. We did a workshop at a secondary school on Friday about the difference between misinformation and disinformation. Misinformation is when you are passed information that is not true but not for harmful purposes. There are clearly people passing disinformation online and we suspect the algorithms, as they are currently tuned, feed that because it keeps you on longer and makes money for the platforms. On the transparency of algorithms, will you look again at what level of transparency of those algorithms we should require social media companies to give to academics and Ofcom in order to be able to properly understand their impact?

Liz Kendall: I understand that, under the Act, Ofcom can require information from service providers about anything that drives or leads to the things that the Act says; so illegal information and online content harmful to children. It already has the power within the Act to ask for information about that. That may not cover everything you have said but, if it believes that activities are driving things that are illegal or harmful to kids, it can request that information and I would expect it to do that.

Q57            Emily Darlington: This is where we get into this vicious circle, I am afraid, where everybody is passing the buck. Ofcom will say, “We can’t require them to give us the transparency on the algorithms, but should somebody make a complaint that the algorithm is feeding this, then we could investigate it.” The problem is, if you do not give access to academics, where is the proper evidence beyond anecdotal individual evidence that this is occurring? So you have this vicious circle where you cannot get the evidence because there is no transparency but without the evidence Ofcom will not investigate.

Liz Kendall: Do you want to say something on that, Emran? They can actually request that information. That is the truth of it.

Emily Darlington: They will not do it.

Emran Mian: That is my understanding too. Under the Act, services are—

Emily Darlington: Its answer is it will not do it without evidence and a complaint, so we are in a vicious circle. Either Ofcom is not using its powers correctly—

Liz Kendall: This is a really important point.

Kit Malthouse: We could test it. We could just put in a complaint as a Committee and see if it will do an investigation.

Liz Kendall: I have pursued this and had quite clear advice about that. I regularly meet Ofcom and will raise this again with it, but my understanding is that it is able to request information if it believes it is content that is harmful to children.

Chair: Kit’s idea is a good one. We will put in a complaint—

Liz Kendall: You will put a complaint in to Ofcom, or I will. I will whack one in.

Chair: We have asked for algorithms and we were not provided with them. We will put in a complaint to Ofcom, and in that complaint we will say that the Secretary of State has said that it has access to the algorithms and then we will see what happens. We are going to have to move on soon so last question from Emily.

Q58            Emily Darlington: I wanted to raise this idea: disinformation is the deliberate spreading of wrong information in order to create problems. We have seen it happen over and over again. It is being used by state and non-state actors to make money and affect our politics. One of the members of this Committee has been affected by it and Meta is refusing to take the fake AI down because the Act does not cover it. Do you think our democracy is safe in the current online environment?

Liz Kendall: There are many things that I abhor that are contributing to a discourse that is not healthy for the country or our democracy. There is then the Online Safety Act and what it does and does not cover. The debate over what is freedom of speech and what is illegal and harmful with the blurring and knock-on consequences is fraught with tension.

I would certainly like to see Ofcom use the powers that it does have. I would like the Act to be implemented quickly and I would like existing powers to be used. We are going around in circles on lots of this and it is deeply frustrating for people. We should look at one of the issues the report raised: the money that is driving this. As I said, I want to work with DCMS on that. I want to look at what generative AI is or is not covered by the Act, particularly in relation to children. I believe in freedom of speech but I want to see the Act’s powers used to the full, implemented as quickly as possible, and have greater clarity on what those powers mean.

Emily Darlington: A yes or no question.

Q59            Chair: Could you please write to us about the disinformation point? We have to move on now. 

Liz Kendall: Yes.

Q60            Dr Sullivan: To pick up on the children element, social media companies accepted that they caused harm with these algorithms; what should the consequence be? We know that the online world is the wild west for children, and the point Emily was making is that you have to make a complaint that the algorithm is feeding this. We need to get to a point where it is safe first and not repair later. Do you anticipate there being another Online Safety Act or something to mop up these big glaring issues?

Liz Kendall: This Act has not been fully implemented yet and will not be until autumn 2027. Parliament set deadlines for some aspects of the Act—illegal content and harmful to kids—but not the categorisation of services. We have to do that and use it.

There have been some improvements. We are seeing age verification happen: 6,000 services and 8 million checks are happening. That is good. I am especially worried about AI chatbots and will act to fill those gaps, and if that requires legislation, then that is what we will do. I am always going to look at the evidence of what is happening. That is why we are hosting this summit with the NSPCC to see what more we can do: I want kids to be safe online.

Q61            Dr Sullivan: What work has the Department done to examine the impact of social media platforms on children’s brains?

Liz Kendall: My predecessor commissioned research for the University of Cambridge to look into the impact on children’s mental health and wellbeing. We will publish this research in due course but I would like to see it alongside further research that might be required. The research looked at the existing evidence out there and gathering it together as well as planned research, but we may need new primary research.

If I am honest, we want to be driven by evidence and the fact. If we wait until we have a perfect randomised controlled trial, it will take over three years. That is a long time. I want to move quickly if I have to while also getting the best evidence. That is what I am weighing up at the minute.

Q62            Dr Sullivan: As the evidence that you have commissioned comes out, and while we wait for the rest of the Online Safety Act to be put in place, would you consider a smartphone ban for children?

Liz Kendall: A smartphone ban is not our policy.

Dr Sullivan: If the evidence comes back—

Liz Kendall: I will tell you where I am on this. I am pleased that most schools do not allow phones; I can really see how important that is for kids and parents. You have to balance that with kids getting to 16, never having had it, and the world is suddenly there for them. How are they going to deal with it?

There is a really important balance to be struck between enabling children to deal with the world online while making sure that they do not face harmful content. You will not know this, but when I was a member of this Committee back in 2018, it looked at the impact of social media and the online world on children and young people. In November 2018, I submitted my own evidence to the Committee from schools in Leicester West; I went to my secondaries and some primaries. It was a relief to look back at all that and see that my reviews have remained the same. Some children are incredibly savvy about what is happening at the same time as struggling with it. So I am not currently in favour of a ban on smartphones until 16. It is good they are not at school and there is more we have to do to help kids deal with it. I am worried about chatbots and I am worried about sleep. If you said, “Nothing until you are 16,” then how are they going to cope? That is how I am thinking about it.

Dr Sullivan: That is my childhood. It did not exist before I was 16. Interesting, thank you.

Liz Kendall: That is where I am coming from.

Q63            Chair: The Labour MP who proposed the smartphone ban, the MP for Whitehaven in Workington, is now a Minister in the Department for Education. That proposal had been dropped but perhaps you could talk to him about his reasons for it.

Liz Kendall: I have talked to him two or three times already.

Q64            Kit Malthouse: Commitments were made as part of his private Member’s Bill by the Government to create an evidence base. It would be helpful to know where that evidence is.

Liz Kendall: That is what I said: we commissioned initial research, a phase one, and alongside that it will come back with plans for further research if necessary. That is in train and we will publish the first stage in due course. We need longer-term research on the impact on and causal relationship with children’s mental health. The best quality evidence is RCTs but if it takes another two to three years then it is quite a long time.

Chair: We have two really big subjects and a number of smaller ones. Let us go to Danny on digital ID.

Q65            Daniel Zeichner: Thank you, Chair. Good morning to you both. I would like to ask about digital ID and digital transformation; we had a session with Minister Murray a couple of weeks ago on this. Digital ID was a very big announcement from the Government’s point of view. How was the decision made to split it between the Cabinet Office and your Department? Why was that done?

Liz Kendall: That was done quite soon after the announcement. I am really pleased that Darren Jones is leading on the policy, the legislation and the engagement around that. It is absolutely right that it is a cross-Government issue. It is one of the Prime Minister’s top priorities, and he is the Chief Secretary to the Prime Minister. We will obviously retain responsibility for the underlying build but it is the right approach. I am very pleased that he has agreed to do that.

Daniel Zeichner: I understand you have to say that.

Liz Kendall: No, it is worse than that, Daniel, I actually believe it.

Q66            Daniel Zeichner: As the digital Department wanting to be the Digital Centre of Government, would DSIT not rather have been running the whole show?

Liz Kendall: I am really pleased Darren has taken the lead. It is a fantastic idea and I am really pleased. You may not know me, but I do not say things if I do not actually think them.

Q67            Daniel Zeichner: You are now landed with having to deliver it. In terms of technical expertise, what assessment have you made of the capability of your Department to actually deliver it?

Liz Kendall: I will let Emran answer but we are not landed with it, Daniel. We have done loads of brilliant things in the Digital Centre of Government that are going to lead to this. The gov.uk wallet has been downloaded over 200,000 times and the digital veterans card has been downloaded 11,000 times. We have not been landed with it. We are extremely happy to be building the foundation of it as Darren leads forward on the policy and legislation.

Q68            Daniel Zeichner: Are you confident that you have the expertise in place to deliver this complicated project?

Emran Mian: As the Secretary of State has just indicated, we already have some component parts of what it would take to run a digital identity programme and we can build on those.

The OneLogin programme that we already run is a programme that allows a single way of logging into more and more Government services. We are already at a point where something like 13 million accounts have been set up under OneLogin. So, 13 million people are already using it to log into Government services in a simple way rather than having multiple usernames and passwords across different government services.

That gives us a lot to build from including very talented expert colleagues who built that system up. More recently, we launched the digital veterans card into the gov.uk wallet. Over 11,000 have already been issued. The next step will be taking the driving licence into a digital form, which will also be available to people in their gov.uk wallet. That is the next stage of the build. We want to be able to provide people with the ability to use these services within an app experience. We launched the gov.uk app earlier this year and, without any further publicity, it has already been downloaded over 250,000 times. Technically speaking it is still in beta, so it is still at a test stage, but we are going to look at expanding it out.

I have the technical foundations and lots of talented colleagues who can begin to build up the systems that we already have to deliver a more fully-fledged digital identity programme. At the same time, a digital identity programme—as has been the case for other countries that have implemented one—is a long journey. There are always real challenges about privacy and security. We will want to expand the expertise that we have and make sure that we surmount those challenges.

Q69            Daniel Zeichner: Do you have an estimate of how much it is going to cost and how much your Department will be contributing to the scheme?

Emran Mian: There will have to be quite a detailed consultation on the design choices about digital identity: what does the digital identity contain? How do citizens get access to it? What is the range of uses it can have? We will be consulting on all those matters. I expect, depending on those choices, that there may also be the need for primary legislation. Only once we have consulted will we be really clear on what it is that we have to build and in what order. It is only at that point that we will have a good estimate of what the cost is. I am conscious that the OBR used a figure of £1.8 billion in terms of cost. That figure must have been taken from a very early estimate of the cost: it is not a figure that we recognise in terms of the further work that we have been able to do. We have not pinned down a cost yet because all the key design choices will be made through the consultation process.

Q70            Daniel Zeichner: Basically, you are not able to say at this point how much it is likely to cost?

Emran Mian: We will go through the design process as part of the consultation package. We will then be in a much better place to be able to pin down what the costs are. Certainly we are clear, and the Government said this when digital identity was announced, that the costs in this spending review period will be met from within the existing SR settlement. That is not only DSIT’s settlement; it also includes settlements elsewhere in Government because, as the Secretary of State said, it is a cross-Government programme.

Q71            Daniel Zeichner: I am sure it will be an interesting discussion. Let me move on to the wider digital transformation questions. Earlier, you indicated delays in the AI and digital road map, perhaps you can tell us a little about your thinking on that? These are complicated programmes. What gives you confidence that you have the processes in place to make the ambitious changes that you are quite rightly seeking to achieve?

Liz Kendall: I suppose the proof of the pudding is in the eating. If you look at the gov.uk wallet and the digital veterans card, and if you look at how we are already spreading the use of AI out within Government and the work I did in my former job at DWP on getting a job centre in your pocket, then we are starting to see a ramping up of that right across Government.

When you look at the number of people who are using our services, that is the best indication of the demand for it and our ability to deliver. There is much more that we need to do and I hope to indicate next steps when we publish that road map. The sheer number of people interacting with us, and the way that the systems are standing up, is a positive sign so far.

Q72            Daniel Zeichner: How much do you interrogate other Government Departments as to where they are at on this digital transformation?

Liz Kendall: I am more positively supporting than interrogating.

Daniel Zeichner: I would strongly recommend interrogating, personally.

Liz Kendall: I would not interrogate other Cabinet Ministers; I would talk as a colleague about the important things they are doing.

We are working really closely with the Department of Health and Social Care it is doing some incredible things. Wes Streeting was talking today about the fact that there are now more people accessing their GPs online than in person. My own family have benefited from GPs using AI to write up doctors’ notes so that they spend more time looking at and being face-to-face with patients than on their computers. I believe we can use AI in schools to help free up teachers’ time from lesson planning and give poor kids specialist extra support with AI tutors.

I ask it about its plans but also ask what we can do as a Department to support it to really drive forward the next stage. To be honest, we have only had positive results with colleagues who want our support.

Q73            Daniel Zeichner: A final question from me on the major software vendors. At the last Committee meeting, we had the head of the Digital Centre Design at DSIT, Emily Middleton. She told us that we were not getting the value for money we should be. We know there is a lack of competition in some categories; Government Departments are very dependent on major suppliers like Microsoft. How on earth do you make sure that we get proper competition and value for money?

Liz Kendall: I want to say something about this and then Emran may want to come in. We spend over £20 billion on tech across the public sector as a whole; that is central and local government. We have to get the best possible value for money for that. In spring, we set up a Digital Commercial Centre of Excellence in the Government Digital Service which is joint with the Government commercial function.

For the first time, we are systematically looking at tech spend across central Government and public services. We have three priority areas. First, a digital sourcing strategy to look at how we buy tech and UK tech companies. Secondly, negotiate whole Government agreements. We are going to start with what they call end-use services, like laptops and cloud, to make sure we get the best value for money for that. We also want to look at driving much more engagement pre-market with SMEs, including in this country. So we are taking steps to make sure we get the best deal for taxpayers and the best tech for public services and Government centrally. I do not know if you want to add to that, Emran.

Emran Mian: Yes. We are moving on two fronts: one is to get the best possible value for money where we are buying from large vendors. The new deal that we have with Microsoft drove much lower prices across the range of Microsoft products. One thing that we noticed as a consequence is that customers across Government waited to renew their purchases from Microsoft until we had done the deal. As soon as the deal was done, they signed their new contracts with Microsoft because we had been able to negotiate a better deal with it. Where we are buying from big vendors, we need to improve the value for money that we get. We have done that with Microsoft, and recently completed a strategic agreement with Google on the buying of Google Cloud with the same objective.

As the Secretary of State said, where we have a wider range of suppliers available, we are diversifying the range of what we are buying. For example, we have been doing a lot of work with MHCLG on software to support planning. Lots of planning processes are still paper-based and very slow as a consequence. It requires colleagues in local government to do work that is often quite repetitive, while developers that are looking to get on and build are getting frustrated at the delays. It does not work for anyone. However, the number of software providers that can offer services to Planning Departments is very limited at the moment. One thing we have done with MHCLG is launch a new tender where we are specifically looking to smaller providers to come forward with solutions. We are doing it by running it much faster than usual procurements. We are asking small providers to create prototypes and we will then buy on the basis of a prototype. Wherever we can, we are looking to diversify.

Chair: We need to move on; this was due to finish at 11.30 am. Can I prevail upon the Secretary of State to stay an extra 10 minutes?

Liz Kendall: Yes.

Q74            Chair: You have been very complimentary, Secretary of State, about the skills and digital infrastructure that is the basis for the digital ID. I want you to tell me, what is your assessment of the standard of data management and data hygiene in your Department and across Government?

Liz Kendall: I have spoken to officials about what processes we have in place to make sure that it is as good as possible. I am keeping a running watch on this.

Q75            Chair: Sorry to interrupt, but in our exchanges between the Committee, the Cabinet Office and DSIT, it is absolutely apparent that the standard of data management, quality, and hygiene is low. In fact, the ICO said this as well. That is witness evidence that we have heard. Could I ask you to write to us with an assessment of how you are going to improve that in order to support digital ID?

Liz Kendall: This is on my agenda.

Chair: Fantastic, I appreciate that. I am now going to ask Samantha to take us into AI.

Q76            Samantha Niblett: I will rattle through this because I am mindful of time. Secretary of State, AI and copyright is probably pretty high up on your list of priorities. In recent weeks, we have seen the likes of Australia not making an exemption for text and data mining. We have seen the likes of Universal Music, Warner Music, agreeing a deal with Suno suggesting that we do not need any changes to copyright, we just need people to agree not to infringe on copyright. These agreements have often started as litigation on infringement and have resulted in a commercial agreement. When are you going to publish your response to the AI and copyright consultation?

Liz Kendall: There are two things my predecessor committed to do: one is to have a series of meetings bringing together the creative sector and AI, and then to meet with MPs and Members of the Lords. We have done that. We have also set up four technical working groups that I am happy to talk through in more detail. Three of them have met; we have one more to go. I will do an initial report back about progress so far before recess. We will then do a fuller response about where we go next, including the response to the consultation by 18 March.

I want to get a deal that works for our world-leading creative and AI sectors. Countries across the world are dealing with this issue; no-one has a perfect solution. We want to find something that works. We are having this reset moment that I am leading with Lisa Nandy and DCMS. There are two stages: we will report back to Parliament on the activities we have done so far by the end of this year, and then a fuller response and report, including on the consultation, by 18 March; I think that is what Peter committed to.

Q77            Samantha Niblett: That is great; we have such a unique opportunity to be world leaders in terms of being a safe country for AI. You mentioned the four technical working groups, how are you going to ensure that they deliver an outcome that works for everybody? Obviously, that is four groups. Are you going to publish the terms of reference and membership list for each group?

Liz Kendall: Let me just tell you what they are covering: control and technical standards, information and transparency, licensing, there is then one working group on wider protections for creators. I will check that they are happy and do not mind saying who is coming to which meetings. If they are all happy, we will publish the list of those involved. We do not have formal terms of reference for the working groups but I am more than happy to publish letters setting out what the working groups are doing.

There will never be something that everybody is happy with, but we are trying to find something that actually works because the creative sector contributes a huge amount to our economy, exports and national pride, and we have world-leading AI companies. I want to find a way, as does Lisa Nandy, to see how we can make this work together.

Q78            Samantha Niblett: With a couple of women at the helm, no pressure, I want you to be successful. Talking about women, very quickly, I was the founder of Labour: Women in Tech and am utterly delighted that you are creating a Women in Tech taskforce. I am just wondering if you can update us quickly on your plans to establish this diversity in tech taskforce.

Liz Kendall: I hope the first meeting of the taskforce will be this month. I want to see more women in tech and more tech that works for women. I think it is something like, at the current rate, it will be 283 years before women make up an equal share of the tech workforce. It is no secret that patience is not my greatest virtue. If you are a disadvantaged woman from a black or minority ethnic community, or a disabled woman, you are less likely to be in this vital sector so we want to look at the barriers.

I want to make a really important point: it is in the best interest of tech, too. If algorithms are only developed by a certain type of people, it will not work. It is an issue of wanting women to get these great jobs and believing that it is going to be good for the economy and make tech work better too.

Q79            Samantha Niblett: Quickly to finish, and it would be remiss of me not to mention this, but I was on Radio 4 talking about LinkedIn suppressing women’s voices. My incredibly brilliant friend, Emily, has been doing a huge amount of work on shadow banning, particularly when it comes to women’s health. I would be really interested to understand how we can put on your agenda not just algorithms doing bad things to children and women’s safety, but also the subtle continuation of biases that are affecting our health and job opportunities, if they are not already on it.

Liz Kendall: I know more about the health side, like heart attacks and strokes, which you end up perpetuating. It is not just because I believe in equality of opportunity; it is because it will be better for the technology and the economy.

I also want to look at women leaders of start-ups. We had a discussion about start-up to scale up here and some research suggested that if women-led start-ups scaled up at the same rate as men we would be adding £250 billion to the economy. So it is a win-win all around.

One thing we may well end up doing as well, more broadly with MPs from across Parliament, is saying, “If you can nominate great women in tech in your constituencies, we can come and celebrate this.” I want women in this sector to know their value but also to inspire the next generation, which is important.

Chair: Thank you. We will all follow up on that challenge. Now let me come to Allison, who has not spoken.

Q80            Dr Gardner: I will be quick. It is due to my lateness that I am asking you to extend your time, so I thank you for your indulgence.

You mentioned bias in AI. As well as many benefits, there are risks with AI so it is really important that we develop it, deploy it, and govern it correctly. Hence, we have the field of AI assurance. I know you published the third-party AI assurance road map in September but this is becoming a developing field with a lot of unregulated providers. I say unregulated but there is some regulation. What I would like to know is: do you agree that a stronger assurance market would deliver greater public trust in the use of AI and support DSIT’s wider digital transformation agenda? What is the plan to make sure that that new market is well-regulated to provide that assurance?

Liz Kendall: I do not know if Emran wants to talk about the fund and market and where we are at with that. It will help on adoption, which is really important. The countries that lead this technology and will get the benefits from it in the future, are the countries that adopt it most broadly and deeply. That is actually the lesson you learn from previous industrial revolutions. That is one aspect. There are much bigger things we need to do to get trust in AI, and that comes back to the kids online thing. Emran, do you want to say something about the assurance side?

Emran Mian: When we published the strategy on developing the market, we said that we would launch the fund in the spring of next year and we will do that. We are looking for a partner to work with to help us to deliver the fund as well; somebody who brings expertise and credibility with a community of people who do AI assurance work. That is on track.

As you will have seen in our strategy, our view is that when you look within companies that are looking to adopt AI and the consumers that they will be dealing with, knowing that AI has been adopted using good processes around governance, ethics and transparency gives the employees and the customers more confidence that this is going to do what it says it is going to do.

Dr Gardner: Thank you. I will leave it at that.

Q81            Chair: Will we have an AI Bill before we have the assurance, yes or no?

Liz Kendall: It is not just an AI Bill; there are measures we will need to take to make sure we get the most on growth and deal with regulatory issues. If there are measures we need to do to protect kids online, we will take those. I am thinking about it more in terms of specific areas where we may need to act rather than a big all-encompassing Bill.

Chair: That sounds like a no. Thank you very much. Martin has a question on AI sovereignty.

Q82            Martin Wrigley: A very quick final question but probably not a quick answer. We talked yesterday in the quantum meeting about sovereign capabilities and sovereign AI—it is a word that is used an awful lot. What does that mean to you? Does the UK have it and how would you measure it?

Liz Kendall: Answering that in three minutes!

Martin Wrigley: If you would like to do it in writing, that is fine.

Liz Kendall: We have to have enough of our own data centres so that we are not reliant on the rest of the world for critical things. We also want to make sure that we do a lot more to support British AI companies. I welcome external and inward investment but I want to see more British companies doing well. Not just because I want our economy to do well but because we need more competition in this sector. For me, it has a broader meaning.

Q83            Martin Wrigley: I would be grateful if you could follow up, as time is limited, with some idea of how we would determine whether something is a sovereign capability or not.

Liz Kendall: We would be happy to. Maybe I could do a sweeping-up letter of all the issues raised here.

Chair: We would welcome that. We are very grateful for the time you have spent with us. A number of issues have been raised, not all of which have been responded to. We will identify some issues for you to write to us with your impressions on, particularly the last very quick discussion we have had around AI sovereignty and the future legislative programme.

You can tell from the Committee’s engagement that your agenda and vision is something that the Committee is incredibly interested in. We take it very seriously. We share many of your ambitions as you have set out. We want to work with you to ensure that they succeed in the interests of the British public. We enjoy holding you to account, and we are grateful for the time that you spent with us this morning. Thank you very much.