Asked by
To ask His Majesty’s Government what further steps they intend to
take to support life sciences businesses starting up and scaling
up in the United Kingdom.
The Minister of State, Department for Business and Trade () (Con)
The life sciences sector is among the UK’s most globally
competitive, with a turnover of more than £108 billion in 2022
and employing over 300,000 people. Supporting the sector is a
priority for this Government, as demonstrated through a range of
initiatives. These include a £520 million fund supporting life
science manufacturing, reforms to the UK’s pension market to
boost funding for companies, grants for early-stage companies via
Innovate UK, export support and initiatives to accelerate the NHS
adopting innovation.
(Lab)
I thank the Minister for that reply. We all understand the
importance of the life sciences sector to our economy and to the
health of our nation. Can he explain why, under this Government,
the UK’s share of global exports in this sector was down from 9%
to 4%, and our share of global R&D fell from 7.2% to 3.2%,
between 2012 and 2020? Does that not represent a complete failure
by this Government to create the stability and certainty in which
life science innovators can flourish?
(Con)
I am always grateful for challenge from any Peer in this House,
but I have very different figures. If I look at the turnover of
the life sciences sector, I find that, in 2022 alone, it was up
by 13%, and it is up by 40% since 2015. There is a whole lot more
that we can do, but I am proud of our record when it comes to
garnering investment—FDI, which is particularly my function—into
the UK life sciences sector. Over a three-year average, we are
third in the world, behind only the United States and Germany.
That is rather a significant tribute to the people in this sector
and the Government’s support of it.
(CB)
My Lords, it is well known that there is a chronic shortage of
purpose-built life sciences wet lab space. Can the Minister
elaborate on what measures are being taken to build more science
parks and innovation hubs?
(Con)
The noble Lord is absolutely right to raise this as a core issue.
I am quite frustrated myself at some of our planning points,
which certainly delay the building of these essential facilities.
I am glad that life sciences wet lab space has been coming on
stream in significant quantities, not least recently in Canary
Wharf, which I hope he will join me in celebrating. However,
there is more to be done; I totally agree with the noble
Lord.
(LD)
My Lords, the Office for Life Sciences reports to the DHSC and
the DSIT. The Office for Investment is a joint No. 10 and
Department for Business and Trade unit. I spoke to a major
biotech investor in this country, which said that the lack of
communication between these two organisations is hampering its
progress in building new biotech capacity in this country. Does
the Minister agree that these two organisations ought to work
closely together? There ought to be an explicit link, so that
when companies are trying to scale up and invest in this country
there is a proper joined-up approach.
(Con)
I sometimes feel that the noble Lord, , asks the perfect question,
though we have not collaborated. Tomorrow, I have just such a
trilateral meeting, between DSIT and the Department of Health,
the Office for Life Sciences and the Department for Business and
Trade. I totally agree with the comments made by businesses about
the siloing of government, which I am afraid is an issue we all
face. This working group will have enormous power in trying to
drive change and there are a number of things I want it to do.
First, I want it to try to identify key companies around the
world that we want to bring to the UK. Secondly, it should look
at how we scale up the existing opportunities we have. The noble
Lord is absolutely right, and I am delighted that tomorrow will
mark the first event of which he has spoken.
(CB)
My Lords, the Minister referred to the position of the US as
being in advance of the UK in life science innovations. Our
universities increasingly recognise the critical need to put
innovations and discoveries of patient benefit through start-ups
and scaling. However, costs and complexity are driving start-ups
to pursue regulatory approvals via the US FDA, rather than here.
This means that patients get biotech and medtech advances far
later than those across the Atlantic, even from UK spin-outs.
What are the Government doing to remove the redundancy and
repetition to incentivise UK companies to pursue NHS deployment
in this very competitive global market?
(Con)
I am grateful to the noble Baroness for her prompting. The
Government have put more money into the MHRA, specifically for
clinical trials, to assist all of our agencies to license more
effectively and faster. As Minister for better regulation, it is
part of my specific project to drive innovation. Clearly, this is
not without risk, but, if we are to own the IP and lead the
world, it is essential that we must go faster. That applies not
just to the regulators but to government departments. We are
working hard on this, but I appreciate the challenge.
(Con)
My Lords, I refer to my interests, as set out in the register.
When I was in the Department of Health, I had a meeting with a
number of start-ups from the life sciences sector. They told me
what wonderful products and services they had, but that they
could not convince investors to invest in them. We looked at
whether we could bring investors together with start-ups and
scale-ups, so that they better understood each other—the
companies could understand what the investors were asking for in
returns and investors could understand the potential of these
businesses. What progress has been made in bridging the gap
between investors seeking to understand investing in the life
sciences industries and those start-ups seeking to attract
investment?
(Con)
I am grateful to my noble friend for that point. This is very
much the work of the Office for Life Sciences, the Department for
Business and Trade, and the Office for Investment. We do a huge
amount of work liaising with companies and investors. One of our
missions is to get more life sciences funds established in the
UK, so that we can, I hope, benefit from the home buyer. I was
particularly pleased a few months ago to celebrate the opening of
the Flagship Pioneering office in London, which is precisely that
sort of life sciences fund. It was part of the incredible
investment in companies such as Moderna. We want them here and
they want to come to the UK. If we can encourage them to do this,
it will have a huge advantage in bridging the gaps my noble
friend mentioned.
(CB)
My Lords, I wonder whether the atmosphere is too pessimistic. The
University of Oxford has propelled itself to the forefront of the
world in its life sciences and science parks, notably one by
Magdalen College that has more than 100 start-ups and is
expanding. Does this not mean that the Government should support
universities, their freedom and their ability to do science? It
is from that that the great success of these life sciences
start-ups has come.
(Con)
I totally agree with the noble Baroness. I would go further and
say that one policy motor that has been successful so far is
these life science investment zones, particularly in Liverpool. I
had the privilege to meet with today and the metro mayors,
who have been leading across the board and in Yorkshire, to find
an essence of focus for the investment into these new
technologies. We are doing a huge amount of work on university
spin-offs as well—organisations such as Northern Gritstone and
Midlands Mindforge are the absolute core of the work I am doing
to get money internationally into these pools of capital.
(Lab)
My Lords, my question arises out of the one just asked. Can the
Minister elaborate on what the Government are doing to spread the
excellent work of the life sciences in this country more evenly
around the UK?
(Con)
I hope I have answered this to some extent. There is no limit to
the amount of work that we can do to get more investment into
this sector. It starts from the smallest opportunities at
universities, where we can put more money into life science
spin-out funds, trying to help the organisations that pool that
capital, as I say. It is about trying to establish bases in
London for the key life sciences funds from abroad, and working
with sovereign wealth funds, the biggest pension funds and the UK
pension fund industry to put money into the industry. That is an
important start.
(LD)
My Lords, will the Minister attend the conference on life
sciences in Aberdeen on 20 March, which is designed precisely to
focus on this and is being promoted not just by the Aberdeen
chamber of commerce but by the Times and the industry? Will the
Government attend?
(Con)
I am grateful to the noble Lord for raising this. It was not in
my diary, but this is an area of great passion for me and, if I
can attend, I certainly will. I am sure some of my officials will
be heavily engaged. Earlier in the year, we attended the key life
sciences summit in San Francisco, which I had the privilege of
attending the year before. We have to be out there flying the
flag, so I totally agree with that prompt and I will look into
it.
(Con)
My Lords, I declare my interest as chair of Oxford University
Innovation. Following the excellent question from the noble
Baroness, Lady Deech, I am pleased to report that university
innovation is going from strength to strength. At the University
of Oxford, we spun out an average of four to five companies in
2015, but there was an average of 20 in 2021. Investments in
Oxford spin-outs went from £125 million a year from 2011 to 2015
to over £1 billion a year now; that is more than 45% of the
country. The question is not how we get the innovation
started—that is easy. The question is how we scale those
companies and keep them in the UK. What are the Government doing
to attract that growth capital and keep those companies here?
(Con)
I am extremely grateful to my noble friend for that question, and
I congratulate her on the astonishing amount of work that she has
done to promote the sector. I am happy to have further
discussions on the technical focus of the spending and getting
the right level of capital into the scale-ups. As I say, it runs
from a range of university spin-outs through to the development
and commercialisation of those ideas. We then have to locate
funds in the UK, and, at the highest level, we need more
liquidity in our stock market for the very large venture
opportunities. That circles back to the Mansion House compact and
the Edinburgh reforms, which the Chancellor has been absolutely
right to focus on. I hope the Government will announce in the
near future the result of the LIFTS competition, which is a £250
million fund specifically designed to kick-start investment from
defined contribution pension savers into this industry, which
will have an important impact.
