Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Julia Lopez (Hornchurch and Upminster) (Con)
(Urgent Question): To ask the Secretary of State for Science, Innovation and Technology if she will make a statement on the cancellation of life sciences investment.
The Minister of State, Department for Science, Innovation and Technology (Ian Murray)
I start by welcoming the hon. Member to her new role. I wanted to do that yesterday, but time ran away from us during questions. I am answering this question on behalf of the Secretary of State.
As a significant life sciences company that employs more than 1,600 people and plays a leading role in delivering new treatments for diseases such as cancer, Merck—known as MSD in the UK—is a valued partner to this Government, and a key player in the life sciences ecosystem. MSD’s decision to not progress its investment in King’s Cross—a commercial decision for MSD—is therefore deeply disappointing.
King’s Cross is a shining example of the strengths of UK life sciences clusters. It is one of the biggest in Europe, employing more than 60,000 people in the area. It has had investment from major life sciences companies, including Novo Nordisk, GlaxoSmithKline and AstraZeneca. It houses world-leading institutions, such as the Francis Crick Institute and the Wellcome Trust, as well as some of the country’s leading biomedical research centres. University College London hospital, Great Ormond Street hospital and Moorfields eye hospital are also based there.
We are proud of this industry; it has delivered great things for our country in the past, does so today and will continue to do so in the future. That is why life sciences is one of the eight priority sectors in the industrial strategy, and is backed by £2 billion of public investment to enable it to grow, lead the world and make great discoveries, such as personalised cancer vaccines and the new test for Alzheimer’s disease. MSD’s investment in the area would have enhanced the sector’s status further, and the fundamentals of the UK market are actually more advantageous today than when it made the decision to invest in this project. What has changed are the US and international fundamentals.
The UK has become the most attractive place to invest in the world, but of course, there is still a lot more for this Government to do. The academic environment in the UK continues to produce innovative ideas, and the talent to run with those ideas, which attracts foreign investment. The environment for research is outstanding; we have great academics; and the NHS provides a research platform that is second to none.
The decision is in part due to a broader effort by MSD to ensure that the company is optimising its investment and focusing its resources on its key drivers of growth. As such, it is not continuing its job discovery operations in the UK. The company has recently announced in its quarterly report that it is to cut $3 billion a year from its operating costs, resulting in a significant impact on its share price. That is compounded by an ever more challenging and uncertain global economic situation as regards trade and tariffs.
The problem with NHS medicines goes back 15 years— I wonder who was in charge over that period. Spending on NHS medicines has fallen from 15% to 9% in that time, and the last joint agreement on medicine prices by the sector and the previous Government was in 2023. We are living with the consequences of under-investment by the previous Government, who took their eye off the ball when it comes to NHS medicine investment. My right hon. Friend the Health and Social Care Secretary made a £1 billion offer to the sector in the summer. However, the Government also recognise that we need to do more to support and grow our life sciences sector. We have already started delivering on the work of investing £600 million in the health data research service alongside the Wellcome Trust, and are committing up to £520 million for life sciences innovation and manufacturing, unlocking billions of pounds. We continue to work closely with the sector to unlock growth and ensure life-changing treatments and technologies for this innovative sector.
MSD will continue to be a key investor in the UK. I welcome its continued investment in clinical trials, and its significant partnerships with our institutions, such as Our Future Health. MSD will continue to employ 1,600 people. We remain closely engaged with MSD as we take forward the life sciences sector plan and the 10-year NHS plan.
Mr Speaker
Order. I say this gently, as Ministers are in new positions, but you are only allowed three minutes in an urgent question, not the five minutes you get for a statement. I am sure that you are coming to the end now, Minister.
Ian Murray
Thank you for your advice, Mr Speaker. I am on my last sentence. We will continue to explore opportunities to partner with MSD further and build on our long-standing relationship.
Julia Lopez
I hope you will give me the same flexibility if I go a little over my time, Mr Speaker.
Julia Lopez
Last night, US pharmaceutical giant Merck cancelled the construction of a £1 billion drug research centre in the Prime Minister’s constituency. Eight hundred jobs that were going to be provided have now evaporated; 125 scientists were to be employed—no longer. The message from Merck executives was unsparing: simply put, the UK is not internationally competitive. The Government must wake up now.
If AstraZeneca’s announcement on investment was the canary in the mine for UK life sciences, last night’s announcement should be a klaxon sounding across Whitehall. Will the Minister assure us that he is arranging urgent meetings with Health, Business and Treasury Ministers today?
The facility was going to specialise in diseases like Alzheimer’s, Parkinson’s and multiple sclerosis. It was going to feed into the work of a cluster of life sciences bodies, such as the Francis Crick Institute. Did the Government engage with Merck before its decision? What damage will this cause to research and medicine access for our constituents who are affected by those conditions?
The Government told UK taxpayers that their devastating national insurance hike would boost the NHS, but NHS leaders admit that the money has gone on national insurance, wage deals and drug price inflation, not better services, and there is no money left for negotiations with life sciences companies. In fact, life sciences have faced a £1.6 billion tax bill and a real-terms cut to research and development. What are Ministers in the Department for Science, Innovation and Technology doing to push the Health Secretary for progress on health data, advanced therapies, price negotiations and regulatory reform of the kind that will improve our life sciences offer?
For the last year, Labour has dined out on deals secured by the last Conservative Government. We were promised that a US-UK trade deal would open doors for business. Instead, American firms are cancelling projects, and our ambassador, who should have been batting for Britain, was battling for survival. Now that Lord Mandelson has slinked away—again—who is speaking to the Americans about this collapsed deal? What will the Prime Minister be doing ahead of President Trump’s state visit to help UK life sciences?
I welcome the Minister to his place, but where is the Secretary of State? In her very first week, she has overseen a £1 billion investment collapse. If she does not understand that this is the most important thing in her brief right now, and if the Government do not change course, it will not be the last deal to collapse.
Ian Murray
I am grateful to the shadow Secretary of State for bringing the urgent question to the Chamber, as this is an incredibly important issue. Let me answer some of the questions—I think there were some questions in there.
The shadow Secretary of State asked what message America has given to the Government, but the message was from Merck in its quarterly report just a few months ago, when it had to cut $3 billion a year from its operations. That is a significant amount of money, and the company’s share price reflected the significance of that announcement. There is no doubt that MSD makes the world’s most profitable and popular cancer drug, which goes out of patent in 2028. It said in the quarterly report that that is causing some pressure with its share- holders. The US trade deal, which the shadow Secretary of State mentioned, said that we would use best endeavours to improve the conditions for US pharmaceutical companies in the UK, and the tariff for pharmaceutical companies to the US remains at 0%. The EU has a 15% blanket tariff.
In terms of NHS medicines, it is a common theme that shadow Secretaries of State come to this Chamber and bemoan the state of the economy and what has happened in the NHS. Waiting lists are falling from the record levels they were at. Satisfaction with the NHS when we left government in 2010 was at its highest level ever. It is now at its lowest—
Ian Murray
There is no doubt that spending on NHS medicines has fallen from 15% to 9%, which is part of the problems in the pharmaceutical industry. My right hon. Friend the Secretary of State for Health and Social Care made a £1 billion offer to the pharmaceutical industry over the summer, but it chose not to vote on that, so he withdrew from negotiations.
We are trying to clear up the mess that has been left after 14 years of Conservative government. The shadow Secretary of State should realise that that mess is deep and wide, and it will cause problems in the sector, but as the Health Secretary has stated a number of times, including when he made that £1 billion offer, he is trying to resolve some of these underlying issues.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I welcome the Minister to his place, but I wish it was under better circumstances. The loss of Merck’s investment, following the loss of AstraZeneca’s investment in January, will certainly be perceived as a blow to the UK’s life sciences sector, though we must not forget the amazing work that businesses, start-ups and researchers do in constituencies across the country, including my own. We also must not forget the importance of value for money in NHS spending.
The Select Committee will hold an urgent session on Tuesday to examine the issues in the life sciences sector, including tariffs, investment incentives from the US, access to capital and the relationship with NHS pricing. In the meantime, it is clear that the life sciences sector plan, published in July, does not reflect market conditions. Could the Minister update us on how, and how quickly, he plans to revise that plan?
Ian Murray
I thank the Chair of the Select Committee for that constructive approach, and I look forward to the session on Tuesday to examine this really important issue. She mentioned the life sciences sector plan, which is really important. It comes with significant investment in research and development, improving clinical trial performance, and moving money and support from other key sectors into the sectors that are in the industrial strategy. Life sciences benefit from that. There is £2.5 billion a year going into life sciences from this Government, and that contributes to the £9 billion that the private sector invests every year.
As the Chair of the Select Committee will know, the Chancellor gave the most generous settlement for research and development ever in the spending review last year, with £86 billion over the spending review period. That is to support the industrial strategy, of which life sciences is a key sector. I know from companies in my constituency that the sector is growing and needs more support, and we are determined to deliver that.
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
I welcome the Minister to his place. It is incredibly disappointing that MSD has pulled out of this billion-pound investment in the UK, including the loss of more than 100 jobs in important life sciences infrastructure. However, this has been on the cards for some time, and the warnings to Government have fallen on deaf ears. Earlier this year, AstraZeneca also cancelled planned upgrades to its production, and Novartis has described the UK as “largely uninvestable”. One pharmaceutical company reducing its UK operations is a problem, but there is a worrying trend that threatens a crisis in the sector.
The UK is becoming less and less attractive to the life sciences industry, and with good reason. First, the Budget saw huge rises in costs to all businesses, including through Labour’s jobs tax. Secondly, there has been a notable lack of investment across the life sciences sector, including in job creation, critical skills and creating a commercial environment that can compete internationally. The Lib Dems continue to call for the Government to make research and development investment 3.5% of GDP, and the life sciences would be a key focus. That would be coupled with extra support for academic institutions to commercialise research. How do the Government plan to restore confidence among pharmaceutical companies that the UK is a competitive place for research and development and manufacturing?
Ian Murray
I am grateful to the hon. Gentleman for raising those points. It is important to lay out to the public and to the House that MSD will continue to employ 1,600 people and be a key part of the life sciences sector. There are many companies that are investing in this country—Moderna, BioNTech, Isomorphic Labs—and in my own constituency, Roslin CT is expanding at such a great pace that it cannot keep up with the amount of space and the wet lab facilities it requires. Those are all the challenges that we have to try and deal with.
I gently say to the hon. Gentleman: the second sentence of his contribution was about the national insurance increases for employers and the fourth was about spending more money on R&D and life sciences. They cannot both be true. If we want to spend money on our priorities—political parties will have different priorities—we have to raise that money. We cannot have it both ways. The message to the industry is: this is the best place in the world to invest. Bring your investment here and this Government back you through an industrial strategy and a life sciences sector plan.
Steve Race (Exeter) (Lab)
I welcome the Minister to his place. Exeter has a very strong life sciences and R&D sector and just recently the University of Exeter was awarded £10.5 million from UK Research and Innovation to set up the metamaterials hub—that is real cutting-edge science—which also leveraged extra private sector investment of another £10 million. Does the Minister agree that that sort of investment and commitment to research and development will enable cities such as Exeter to thrive and grow in future?
Ian Murray
I pay tribute to my hon. Friend for his work with the university in his constituency in a whole number of areas. All who represent university towns— I do as well—know that there is significant investment going into research and development and the life sciences, because that is the future for this country.
This country is committed to growth, and I assure my hon. Friend that I will do everything I can in this role to ensure that we invest in that. I gently remind the House again that the spending review saw the largest ever settlement for research and development in this country at £86 billion. That says to the industry: we are open for business; come and invest here and put life sciences at the top of that investment.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
Discovery Park in my constituency at Sandwich is the phoenix that rose from the ashes of Pfizer. It is now a cluster of over 100 enterprising and successful small companies in the life sciences field. The loss of cornerstones such as AstraZeneca and MSD could have a devastating effect upon the architecture of the pharmaceutical industry in this country. What are the Government going to do, practically, to reverse the decline in confidence in that industry?
Ian Murray
I say to the right hon. Gentleman, for whom I have the utmost respect, that in the first part of his question he quite rightly promotes the wonderful work that is going on in his constituency at the Discovery Park and then says that everything is doom and gloom. That is not the case. This Government are investing in research and development to the tune of £86 billion, we are investing in the life sciences—it is one of the eight key sectors in the industrial strategy—and I hope that the business park in his constituency benefits fundamentally from that. I merely repeat that MSD is not leaving the UK. It will still employ 1,600 people here and be the cornerstone of research in this country.
Dr Lauren Sullivan (Gravesham) (Lab)
I welcome the Minister to his place. This is devastating news for the research scientists and the fantastic work they do on neuroscience, inflammation and immunology. Some of that is being carried out at the Francis Crick Institute, where I declare I am unpaid visiting research scientist. Does the Minister agree that the UK has so much expertise to offer and that he needs to look at the whole life science ecosystem, from bench discovery to dispensing at the bedside? Will he join us at the Science, Innovation and Technology Committee on Tuesday afternoon when we can go into those issues in depth?
Ian Murray
I pay tribute to my hon. Friend for her work, unpaid, at the research institute. It will be good to hear from her about what she sees from inside the sector. She raises, I think, the most important point in any debate about science, research and development and life sciences in particular in this country: we have world-class institutions and companies and they are made so by the world-class scientists and academics that work within them. We should cherish that, we should grow it and we should have more
John Glen (Salisbury) (Con)
At Porton Down in my constituency, there is a hub of life science businesses. I have listened carefully to what the right hon. Gentleman has said, and I recognise the difficult dilemmas that all Governments have in where to focus investment. However, the Minister must surely recognise that the additional cost of employing people, with the additional rights and burdens that that puts on employers—particularly small employers—plus 11 weeks of speculation about further tax increases will not make any sector feel more comfortable about where to invest in this country.
Ian Murray
The right hon. Gentleman was a Treasury Minister, so he understands some of the issues involved here. I would merely point him to the report MSD released to its shareholders for the first quarter, in which it said that it had to divest from $3 billion a year in operating costs—that is a huge part of its operating agenda. It is a geopolitical issue as well as a commercial decision.
Bob Blackman (Harrow East) (Con)
The Minister will know that the part of London where MSD was going to invest has received significant investment for medical research, particularly research of brain-related diseases. This decision casts doubt on the future of the greater King’s Cross area. What are the implications of the decision to disinvest on that particular proposal, which has cross-party support?
Ian Murray
At this stage, I am not aware that there will be any downside to the entirety of the ecosystem that revolves around the King’s Cross area of London. This decision has obviously come very late to the Government, and we will work with MSD on the future. However, as we have heard from my hon. Friend the Member for Gravesham (Dr Sullivan), there is a very bright future for this particular cluster, and for all the other clusters we have heard about from other Members across the Chamber this morning.
Danny Beales (Uxbridge and South Ruislip) (Lab)
For transparency, I should declare that I was the director of the Knowledge Quarter partnership in King’s Cross and cabinet member responsible for negotiating the MSD headquarters deal. It is disappointing news today. Turning to my current constituency, I hear from a number of life sciences and pharmaceutical companies that they have concerns about the previous Government’s levy under VPAG—the voluntary scheme for branded medicines pricing, access and growth—and how it is working in practice, in particular that it is focused on revenue, not profit, and does not take into account the differential level of R&D needed. Celltrion, a South Korean company in my constituency, highlights that biosimilar medications require a lot more investment than other forms of pharmaceuticals. Will the Minister or his counterpart meet me and Celltrion to discuss the biosimilar sector and how we can support it to grow?
Ian Murray
I am grateful to my hon. Friend and would be happy to take him up on that meeting to hear about his experience directly. He raises the big issue around the legacy left by the previous Government after 15 years of underinvestment in medical pricing. The Health Secretary made a £1 billion offer to the pharmaceutical industry over the summer, which the pharmaceutical industry decided not to vote on, so it was withdrawn, which was disappointing. The last deal was done in 2023 under the previous Government. This is a long-term issue that must be resolved.
Kim Johnson (Liverpool Riverside) (Lab)
Life sciences play a significant role in the economy and public health initiatives across the Liverpool city region. It was a blow earlier this year when AstraZeneca pulled out of the £450 million deal to expand its plant in Speke. How is the Department supporting the Liverpool City Mayor and the life sciences investment zone to build confidence and secure greater investment for the sector?
Ian Murray
Very simply, the life sciences sector plan has been set out to give the industry certainty over the longer term that this Government are serious about the investment that both we and the industry will make in the sector, with £2.5 billion a year from this Government and, at £86 billion, the largest settlement for R&D ever in the spending review. I hope that gives reassurance to my hon. Friend’s constituents and to the life sciences companies in her constituency and around the region that this Government are serious about backing them.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
I welcome the right hon. Member to his new role, although admittedly I am surprised that Labour have adopted the fire and rehire strategy. Scotland has one of the highest concentrations of life sciences hubs, and in the past five years has created six innovation centres directly aligned to life sciences. What assessment has the Minister made of the impact of this announcement on Scotland’s research and development sector, and what support does he plan to put in place?
Ian Murray
I visited RoslinCT in my own constituency last Friday. The life sciences sector in Scotland is indeed buoyant and flourishing. There are lots of opportunities for it to expand. It is probably a dividend of the Union.
Adam Jogee (Newcastle-under-Lyme) (Lab)
I am very pleased that the Minister has confirmed and reiterated that the life sciences remain a priority in the industrial strategy. Keele University in Newcastle-under-Lyme is at the heart of our life sciences sector, which is particularly important for jobs and opportunities in the industrial heartlands in communities like mine, so will the Minister find time to meet me to talk about how we can support the work at Keele—or, even better, will he get on the train to come and see us?
Ian Murray
I am very happy to do so. I think that is my third invite already this morning. The question and the invite to Newcastle-under-Lyme demonstrate the thriving life sciences sector all across the country. I can give my hon. Friend an assurance that we intend to back the life sciences sector. Although the decision from MSD in relation to their new building at King’s Cross was incredibly disappointing, the sector is a thriving one, and many companies are investing and growing very quickly.
Tom Gordon (Harrogate and Knaresborough) (LD)
This is just the latest in a series of blows to UK life sciences. Companies have been pulled towards the US with incentives and tariffs, while we have no detailed industrial strategy, an uncompetitive tax regime from the Treasury, and a Department of Health and Social Care that undervalues drug access. When the Government announced their life sciences plan, it fell short of what the industry and the sector expected, so will the Government commit to an updated cross-party refresh and give businesses the stability they need to invest in Britain?
Ian Murray
The hon. Member talks about yet more spending but with no idea of how the revenue would be increased. This Government had to make some incredibly difficult decisions in order to balance the books to give that stability in the economy so that we could invest in R&D, including in the life sciences. The NHS 10-year plan is moving from treatment to prevention, which require medicines; moving from hospital to community, which will require medicines; and moving from analogue to digital, which will enhance and better target medicines for patients. That is just one example of what we are doing in the NHS to improve our life sciences sector. It is a key part of the industrial strategy—one of the eight key sectors—and we intend to back it through the strategy.
Peter Swallow (Bracknell) (Lab)
I welcome my right hon. Friend to his place. I also welcome my hon. Friend the Member for Glasgow South West (Dr Ahmed) to his place as life sciences Minister in the Department of Health and Social Care.
I am incredibly ambitious for the life sciences in my constituency of Bracknell and across Berkshire; it is a key industry for us. Will my right hon. Friend share my ambition and agree to meet me, or set up a meeting with the life sciences Minister, to discuss what more we can do to support the sector in Bracknell?
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Medical isotopes are critical for the treatment of cancer, for diagnoses and for other medical applications, yet there have long been concerns about security of supply. Through Project ARTHUR—advanced radioisotope technology for health utility reactor—the Welsh Government are working with the nuclear-licensed site at Trawsfynydd in my constituency to develop the means of producing medical isotopes for security of supply here in the UK. What is the Minister’s Department doing to work with the Department of Health and Social Care to find a way of bringing that forward?
Ian Murray
I have just been working with the Department of Health and Social Care to try to bring that forward. I do not know the exact answer to the right hon. Lady’s question. If I knew the answer, I would give it. I do not, so I will write to her.
Laurence Turner (Birmingham Northfield) (Lab)
I welcome the Minister to his place.
The life sciences sector is helping to regenerate parts of south Birmingham’s economy, from the new Waters pharmaceutical factory on the old Longbridge MG Rover site in my constituency to the University of Birmingham’s life science incubator. The Minister has been extremely generous in agreeing to meet Members today, so continuing in that spirit, would he be willing to meet south Birmingham MPs to discuss what more can be done to support this very important part of our local economy?
Ian Murray
I am tempted to say no, just to see what reaction that gets! But of course I will meet any hon. or right hon. Member across the House to discuss the life sciences sector. Whether we are talking about the north, south, east or west, including in my own constituency, the life sciences play a key role and will continue to do so.
Gregory Stafford (Farnham and Bordon) (Con)
I must declare that my wife works in the pharmaceutical and life sciences industry. The Minister and the Chancellor claim to want to boost growth, yet investment is fleeing the very sectors that he claims are a priority. Is it not the case that the vague aspirations of the Government do not meet the real-world test and that the people who are going to suffer from this are his constituents and, unfortunately, mine?
Ian Murray
I congratulate the hon. Gentleman’s wife on what she does in the sector—she is the only one in the family with a real job. That shows the depth and breadth of the sector across the country; everyone will know someone who works in it. We have £86 billion from the spending review going into research and development, and £2.5 billion backing the life sciences sector plan. Economic and geopolitical issues are of course affecting the pharmaceutical industry at the moment. As I said in my opening remarks, MSD’s quarterly report said that it had to take $3 billion out of operating costs over the next few years; unfortunately and regrettably, this decision is part of that plan.
Richard Foord (Honiton and Sidmouth) (LD)
I represent people who work at the excellent Living Systems Institute at the University of Exeter. The purpose-built institute was launched in 2017 to bring together physicists, mathematicians, biologists and biomedical scientists, with the expectation that the life sciences sector was going to enjoy substantial foreign direct investment in the years to come. What effect do the Government anticipate the withdrawal of private investment for life sciences will have on research students, including those at Exeter?
Ian Murray
I would say to life sciences students in the fledgling part of their career that it is a career they should be in for the long term. Life sciences is the future, which is why it is one of the eight key sectors in our industrial strategy. The news the Government have had today on MSD’s commercial decision is incredibly disappointing, but lots of wonderful stuff is going on in the sector, so we should not talk it down. Moderna is investing more, BioNTech is investing more, Isomorphic Labs is investing more, and RoslinCT in my constituency is investing more. Right across the Chamber today we have heard about the companies that are investing more in life sciences. It is a growing industry, so I say to fledgling academics and people who want to get involved in the industry: get in there.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers. I think we are all seeking reassurance in relation to the sector. The news that MSD has withdrawn its plan for a research centre in the United Kingdom, with the loss of 125 potential jobs and staff, is devastating for our science plans. It shows a lack of faith in long-term planning by the investors we are so reliant on. How will the Minister seek to reassure global partners that science investment is a priority for this Government? Will we see a swift return of investment to the United Kingdom of Great Britain and Northern Ireland?
Ian Murray
Our workforce are the very best in the world, and our world-class institutions are made world class because of that world-class workforce. This is the best place in the world to invest at the moment. We are in discussions with the US in respect of the pharmaceutical industry and the tariffs in the EU-US economic deal. Lots of positive stuff is going on in the industry, and if we are to send out one message to the industry from the House today, it is that the industry is thriving. It is one of the eight key sectors in our industrial strategy and this Government back it. We are backing it with money, with our strategy, and as a whole Government.