UK committee raises alarm over science business exodus

Failure to retain promising companies and attract global talent has thrown the UK’s science and technology sector into a crisis, a UK Parliament committee has warned.

In a scathing report released Nov. 5, the House of Lords Science and Technology Committee urges the government to reform investment and visa policies and reap the benefits of the UK’s R&D efforts before the economy “bleeds to death.”

The UK has four of the top 10 global universities, according to the report, and a healthy scene of start-ups and university spinouts. But it faces a troubling pattern of companies moving overseas to scale up, it warns.

Almost half of the UK’s science-based small and medium-size companies look elsewhere to grow because of better access to capital, tax incentives, and skilled employees, says Sharon Todd, the CEO of the global chemical industry organization SCI, which gave evidence to the committee. There is “huge potential” in the UK, Todd says, but “if the government is committed to driving economic growth in science, it must urgently create an environment where the businesses of today and tomorrow can flourish and grow.”

The US in particular lures businesses with opportunities to receive investment while the UK is caught in what the report calls a “doom loop” of shallow capital pools and risk-averse institutional investors.

“Even during our inquiry, several significant companies . . . have relocated or expanded abroad,” says committee chair Robert Mair. In the summer, Maryland-based IonQ bought British quantum computing innovator Oxford Ionics, and transplantation tech company OrganOx, an Oxford University spinout, sold to the Japanese medical technology company Terumo. The companies have kept their bases in the UK.

Now, “life sciences stalwarts like AstraZeneca are eyeing the exit,” Mair says. AstraZeneca is one of only three UK-based companies in the top 100 industrial R&D spenders globally. The drug maker stoked fears of a UK exit when it announced plans in September to list shares on the New York Stock Exchange.

The report goes on to slam costly visas for global talent as “an absurd act of national self-harm.” Last year, the UK government hiked the earnings requirements for work visas to $32,000, which is above what early-career researchers are likely to earn. Scientists taking an alternative route to come to the UK—the Global Talent visa—can expect to pay up to $26,000 to bring a family of four to the UK for 5 years; 17 times as much as it costs in comparable countries, the report says.

“It is vital that the UK remains an attractive destination for global talent, and that we continue to strengthen our research base,” a Universities UK spokesperson said in an email. “The UK’s economic growth . . . will depend on more high-level skills in the years ahead, alongside world-class R&D.”

The committee wants the UK to “roll out the red carpet” for global talent by reforming visa policies. It calls on the government to establish a national council for science, technology, and growth with the power to address funding problems, ensure universities offer pay packages that can compete with business, and encourage UK pension funds to invest in domestic companies.

Meanwhile, the higher education funding crisis, which has led to widespread layoffs and departmental closures, must be tackled “before it is too late,” the committee says, lamenting the government’s “counter-productive” plan to impose a levy on international students. “The levy would impact university funds significantly, potentially causing further disruption and restructuring,” says Jason Love, head of the School of Chemistry at the University of Edinburgh.

The House of Lords is the unelected second chamber of the UK parliament. Its committees are independent and have a role scrutinizing government policy.

While the recommendations of House committees are not legally binding, the UK government is obligated to issue a response in writing. This response —which can be published as a government paper, a written ministerial statement, or a memorandum sent to the committee—is typically issued within 2 months.