In the UK General Election on 4 July, the Labour Party won 412 of the 650 seats, giving it a comfortable majority. Its leader, Sir Keir Starmer, became Prime Minister, meaning a change of government from Conversative to Labour for the first time in 14 years.
In its campaign, Labour focused on the need to deliver economic growth and innovation in critical industry sectors. It also placed considerable emphasis on addressing the problems facing the National Health Service (NHS), such as long waiting lists for treatment, old equipment and an increasingly ageing population.
The government's economic priorities were further set out in the first major speech delivered by the new Chancellor of the Exchequer Rachel Reeves on 8 July, in which she said that growth "is now our national mission". The Health Secretary Wes Streeting also noted his intention of making the Department of Health and Social Care a department for economic growth. While each of these are statements of intent and not binding on the new government, they provide valuable insight into what industry can expect over the next 5 years. We set out below some of the most relevant initiatives that could impact the industry.
Life sciences priorities
The Labour Party's programme for change is set out in its manifesto. Life sciences is highlighted as one of the industries that the party has worked closely with in opposition and that will be a priority for the new government.
Within the policy to rebuild the NHS, the manifesto includes a section on "the revolution taking place in data and life sciences", building on the government-industry-academia partnerships developed during the COVID-19 pandemic. It states:
"As part of Labour's life sciences plan, we will develop an NHS innovation and adoption strategy in England. This will include a plan for procurement, giving a clearer route to get products into the NHS, coupled with reformed incentive structures to drive innovation and faster regulatory approval for new technology and medicines."
In addition, the new government plans to leverage the strengths of the NHS to make clinical trials "more efficient and accessible" by speeding up recruitment and enabling participation through the NHS app, highlighting treatment for dementia in this area.
Much more detail is set out in Labour's plan for the life sciences sector, "A Prescription for Growth", which was published in January 2024. This identifies the NHS's biggest asset as its staff, followed by "the pool of knowledge gained through data from our entire population".
The headline actions in the plan cover:
- Industrial strategy – bolstering the Life Sciences Council, strengthening the Office for Life Sciences and placing responsibility for life sciences and innovation under the Health Secretary instead of the Secretary for Science, Innovation and Technology.
- Long-term approach to R&D funding – including 10-year budgets for key R&D institutions, cutting red tape and promoting university spin-outs.
- Harnessing data – continuing to deliver Secure Data Environments, a single access point for researchers to use data, seizing the opportunity offered by the NHS data platform, driving interoperability between digital systems in the NHS and in care and ensuring a senior official within the Health Department is accountable for delivery across organisations.
- Modernising and unblocking the regulatory regime – including the creation of a Regulatory Innovation Office (RIO) to set and monitor targets for regulatory approval, and provide strategic input on priorities.
- Increasing access to finance – enabling greater consolidation across all pension and retirement saving schemes, empowering the British Business Bank with a more ambitious remit and establishing a British version of the French 'Tibi' investment scheme to encourage investment in the sector.
- Improving the business environment – maintaining the current structure and at least the current rates of R&D tax credits, evaluating the impact of the R&D tax credit scheme, maintaining the patent box regime and protecting the Enterprise Investment Scheme and Venture Capital Trusts.
- Improving health outcomes – harnessing innovation to improve outcomes, leading the world in clinical trials, speeding up recruitment for trials and increasing participation and diversity.
- IP/trade – covering trade strategy, IP protection and using "bilateral and multilateral negotiations as an opportunity to remove redundant or duplicative requirements UK medicines face when accessing markets overseas, and maximise opportunities presented by our high regulatory standards to minimise regulatory trade barriers".
One of the most striking policies the government has committed to is the creation of the RIO. This will bring together the Regulation Executive and the secretariat for the Regulatory Horizons Council to set and monitor targets for regulatory approval timelines, provide strategic input on which activities regulators should be prioritising and support a strengthened Regulatory Horizons Council. Among other things, the government believes this will help to increase the number of industry sponsored clinical trials being conducted in the UK, which has been well-publicised as an area of concern for the industry and where there has been a significant drop in the speed of approvals by the MHRA.
Welcome proposals
Overall, the new government's plans for the life sciences sector are ambitious and indicate a willingness to listen to and engage with industry. While we do not expect significant changes in legislation in the short term, the focus on industrial strategy, the promotion of data and facilitation of clinical trials should lead to benefits to the industry in the longer term.
The government's focus on regulatory reform and facilitating clinical trials will be particularly welcomed by the life science industry, and by businesses with R&D facilities in the UK. However, there is always a risk that efforts to reduce regulation end up increasing complexity and uncertainty; hopefully this will be avoided. Furthermore, it remains unclear whether the new government will tackle other issues of concern to industry, beyond product development, including patient access to new medicines.
All the indications are that life sciences will be one of the sectors that the new government will focus on. The industry will therefore be watching with interest for further announcements, including possible new legislation, and more information on the particular initiatives that will be prioritised.
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