British scientists are the latest victims of the Brexit standoff

Jeremy Warner
Wed, February 22, 2023 

rishi sunak

Four economic shocks in a row – first the financial crisis, then Brexit, the pandemic and the energy price surge caused by Putin's war in Ukraine – have left Britain in the most terrible mess.

The national debt is at its highest level since the immediate aftermath of the Second World War, inflation is again above 10pc, the current account deficit is the highest in the G7, economic and productivity growth has ground to a halt, business investment is in the doldrums, and the savings rate is one of the lowest in the OECD.

Meanwhile, the National Health Service is in a state of evident meltdown, and from policing to education, rail and social services, more or less everything seems to be broken beyond repair.


As in the 1970s, when the UK was labelled the "sick man of Europe", we seem once again to be slipping into the sea, with little prospect of salvation. In truth, it is not quite as dire as then, but it is quite bad enough.

It is our patriotic duty to be optimistic for Britain's future, but as things stand it is ever harder to comply. The mood music around the UK's long term prospects has rarely been as downbeat as it is now.

Not everything is gloom and doom, admittedly. One repository of hope is the UK's science base, which remains a world leader in many fields. Yet even here, Britain is in danger of losing the plot. These sectors too are dying of neglect.

In a recent article for the Financial Times, Kate Bingham, who to great effect headed the UK's vaccine task force during the pandemic, warned that short term pressures from the cost of living crisis were crowding out the long term measures needed to support innovation.

In life sciences, the titans of the industry are reining back under pressure from rising levels of business taxation and the penny-pinching ways of the NHS's pricing regime. New investment in factories and research is increasingly concentrated in overseas jurisdictions deemed more business friendly.

At the other end of the spectrum, the decision to cut R&D tax credits is having an equally pernicious effect on many small, innovative, high tech companies.

Just as worrying, British academia finds itself barred from the EU's €95.5bn Horizon research programme, preventing participation in pioneering collaborative European research on the causes of disease and much else besides.

Even hardline Brexiteers tend to accept that Horizon is one of the EU's more worthwhile initiatives, which is why a special carve out for the programme was sought in the Trade and Cooperation Agreement governing Britain's future relationship with the EU. Theoretically, this guarantees continued UK participation.

Horizon has always been one of those areas of the EU budget where the UK gets more out than it puts in, so it was eminently worth preserving. Of the nearly 7,000 principal recipients of European Research Council grants under the Horizon 2020 programme, around a fifth were to UK institutions.

All this is now in jeopardy. Participation in Horizon has become another unfortunate victim of Britain's standoff with Europe over the Irish Protocol. While the politicians busy themselves with highfalutin points of principle on ECJ jurisdiction and the like, Britain's leading role in European research is going down the pan.

Uncertainty over future funding has left key university research roles unfilled, with Britain increasingly seen as no longer an attractive destination for top scientific talent. Visa applications left stuck for months in the blackhole of Home Office bureaucracy have exacerbated the problem.

UK based researchers can still apply for Horizon Europe funding, but successful applicants are unable to access the money until UK participation in the Horizon Europe programme is formalised, and this Brussels is refusing to do until the impasse over the Northern Ireland Protocol is resolved.

Government ministers accuse the EU of "politicising scientific cooperation", and of inappropriately linking participation in Horizon to the Protocol. They are right to do so; the linkage Brussels applies is of questionable legal validity. But there is not a lot they can do about it. In the end, it's the EU's programme.

Downing Street had hoped to settle the matter this week, to coincide with the first anniversary of Putin's murderous invasion of Ukraine. The Russian threat has had a unifying effect on Europe, and thereby helped to defuse some of the bad feeling over Brexit. The prize in settling the Protocol is a more harmonious relationship with Brussels, an easing of trade tensions, and continued participation in Horizon and other mutually beneficial joint programmes.

But politically, the Prime Minister is toast if forced to fall back on Labour support in the face of intransigent opposition from the Democratic Unionist Party and his own hardline Tory MPs to any compromise over Northern Ireland.

There is of course a fall back position for Horizon if agreement cannot be reached and Brussels goes through with its threat to shut Britain out – a so-called "Plan B".

This essentially involves simply reallocating the roughly £17bn British share of funding for Horizon and other joint programmes to UK determined research grants. There would also be further support for alternative collaborative agreements in other parts of the world as part of the Government's wider, Global Britain, ambitions.

Yet the scientific community is widely sceptical that this would provide anywhere near the same degree of benefit. Britain would in any case lose its attractions as a magnet for European talent without necessarily gaining it elsewhere.

As it is, Britain's perilous economic state is already proving a turn-off for many, threatening an outflux of high earners similar to that seen in the 1970s. It's not just uncertainty over future funding; it's also an increasingly uncompetitive tax system.

Ruinous levels of public indebtedness have left the Chancellor, Jeremy Hunt, caught between a rock and a hard place. The always unsustainable attempt to combine European levels of public spending with American levels of tax is no longer an option for Britain. It must choose one or the other, but it is proving a politically extraordinarily destructive process.

The more pain he inflicts on higher earners, the greater the danger of a brain drain. If alternatively he loads the burden onto business, it further discourages vital corporate investment.

In a perfect world, he'd return to the simplicity of the Lawson contract in the 1980s – a 25pc basic rate of tax and a 40pc higher rate. That way you would square the circle between tax and spend. But what hope in today's equality obsessed world of raising the basic rate while lowering the higher rate?

If settling the Irish Protocol helps ease trade tensions with Europe and ensures continued participation in Horizon, it should provide a degree of help to our beleaguered economy. But righting the ship is going to require so much more.

METROPOLIS 1921