UK economy ‘bleeding out’ with brain drain in science and tech, peers warn

Sir Keir Starmer and Rachel Reeves must show “clearer leadership” to tackle a brain drain in the science and technology industry which is leading to Britain’s economy “bleeding out”, peers have warned.

In a damning report, the Lords Science and Technology Committee called for Government action – including easing visa costs for highly skilled professionals – to revive growth in the sector.

Ministers have laid out ambitions to make the UK “one of the top three places” to scale a business – where revenue grows much faster that costs – but the country is “sliding in the opposite direction”, the group warned.

“The UK has seen a procession of promising science and technology companies moving overseas rather than scaling here,” the committee said.

“The UK’s inability to retain the economic benefits of its R&D endeavour is a fatal flaw in any growth strategy.”

The committee said Britain still has chance to seize “enormous opportunities for technological and economic growth” with decisive action from Government to “staunch the bleeding”.

In its report on Wednesday, the cross-party group of peers reiterated its call for the “high upfront costs for… visas reserved for global talent” to be addressed in order to attract scientists and entrepreneurs to the UK.

Britain “should be rolling out the red carpet rather than red tape” when highly skilled professionals in the industry want to move to the country, the committee said.

The Government is reportedly examining plans to cut visa application fees for foreign academics and digital experts, and the committee said it is “critically important” it does not get “blocked by Home Office intransigence”.

The report said: “The UK has a unique opportunity to attract global talent, particularly from the US, yet the Home Office’s historic unwillingness to review the barriers for high-potential talent is an absurd act of national self-harm.”

Another key recommendation calls for “clearer leadership from the Prime Minister and Chancellor through a new high-level National Council for Science, Technology and Growth, modelled on the National Security Council”.

The council should meet regularly and include the Prime Minister, Chancellor, science minister, high-ranking officials from other departments, key scientific advisers and public investment bodies, peers said.

Its aim would be to “prioritise science and technology for growth, break down barriers to progress, and break the UK out of its doom loop”.

Even during the course of the committee’s inquiry, major companies including Oxford Ionics, Deliveroo and Wise have relocated or expanded, and life sciences stalwarts like AstraZeneca are also “eyeing the exit”, chairman Lord Mair warned.

He said: “If the UK is to arrest its decline, leadership and co-ordinated action is needed to rescue and strengthen its science and technology sector.

“While the issues facing the UK economy are grave, with decisive and speedy action from the Prime Minister and the Chancellor, our committee believes challenges can be overcome.

“The Government will need to use every lever it has to support UK-based science and technology companies and entrepreneurs, and to encourage private investors to do the same.

“By unlocking institutional investment, changing the culture around innovation, and organising its efforts in procurement, public investment bodies, and regulatory reform, the UK Government can still stop the bleeding and reap enormous rewards for the nation.”

A Government spokesperson said: “This Government recognises the huge role that UK science and technology play in growing our economy, which is why we are backing R&D to the tune of £86 billion in this spending review period alone.

“Our first-of-its-kind digital and technologies sector plan is targeting investment, increasing skills and pushing forward regulatory reform in sectors like AI and quantum where the UK is strongest and through our global talent routes we are attracting and retaining the high-skilled talent to bolster the UK’s status as a hub for emerging innovation.

“We already have a dedicated Council for Science and Technology, which reports to by the Prime Minister, to drive forward our science and tech aspirations across Government.”