Life Sciences Innovative Manufacturing Fund

Julia Lopez Excerpts

Wednesday 22nd October 2025 Commons Chamber

[Julia Lopez (Hornchurch and Upminster) (Con)]

I thank the Minister for his statement—or perhaps I should call him October’s cover star for The House magazine.

The Conservatives back today’s motion on the life sciences innovative manufacturing fund. It is a no-brainer, because the fund was established by us in government when my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) made £520 million available for life sciences manufacturing over five years—from 2025 to 2030. Funnily enough, it is the exact same amount that is being reheated today.

That fund built on a series of smaller, highly successful interventions that managed to attract £850 million of private investment for the £64 million of taxpayers’ money that we deployed. The Association of the British Pharmaceutical Industry called the fund a step change in ambition and something that would strengthen our manufacturing base, addressing the weaknesses we saw during the pandemic in our supply chains. It was good for jobs, for health security, for our life sciences and for Britain. So yes, we support this fund because we designed it.

Let us be clear about what is happening here. The Minister is simply uprating for inflation the threshold at which payments must be approved by Parliament. That is fine and all very sensible, but what it is not is anything new. It is not new money. It is not Labour innovation or a sign that this Government are suddenly getting really serious about growth, and it is not the route to dealing with the crisis facing life sciences right now. It is what we were doing but in different wrapping paper. They have plonked a bow on it and called it a new strategy.

Let me tell you what I reckon has happened here, Madam Deputy Speaker. An edict has gone bouncing around Whitehall from the Treasury and No. 10 as the November Budget disaster looms, saying: “We need some growth announcements. Departments, please feed the comms grid. We need to give the markets and the OBR some confidence that we are serious about growth.” It is worth reminding the House what happened yesterday. UK Government borrowing figures in September hit the highest level for the month in five years. This is truly terrifying stuff.

I think the Secretary of State has gone and asked her officials, “What have we got in the cupboard to announce?”, and they have said, “Minister, we have a statutory instrument to table at some point. Do you want us to shove a bit of lipstick on it?” We have the spectacle of Ministers coming to the Chamber to tell us that a humble statutory instrument to uprate for inflation something already in the pipeline is a grand plan. In no way at all does it shift the dial on life sciences, because it is already baked in.

This is not a Government who are serious about growth. Let us look at what happened to the life sciences manufacturing fund when Labour took office. In early 2024 we used it to negotiate a £450 million vaccine manufacturing investment by AstraZeneca in Speke, Liverpool. That meant real jobs, real regional investment and greater resilience for our country. After that, AstraZeneca announced another £200 million investment in Cambridge, which meant 1,000 jobs. To drive that investment and growth, we also delivered one of the most competitive business tax regimes through policies such as full expensing.

Then the general election happened and our new Chancellor, in her infinite wisdom, put a pause on that investment—supposedly to get better value for money and fill the fantasy £22 billion black hole in the public finances. We all know what happened next. AstraZeneca pulled the £450 million investment, despite issuing private warnings to the Government that it needed certainty for business planning. But do not just take my word for it. When announcing Speke’s culling, AstraZeneca said that

“the timing and reduction of the final offer compared to the previous Government’s proposal”

was critical to losing that £450 million investment.

What else has happened since Labour took office? AstraZeneca paused the £200 million Cambridge investment. We lost Merck’s £1 billion King’s Cross R&D hub, which was cancelled after eight years in development. That is £1 billion, and the Secretary of State had nothing to say about it—diddly squat. Eli Lilly has put its £279 million research incubator in London on hold. Sanofi has said that it will not consider “any substantial investment” in UK R&D under current conditions. In fact, industry has warned that the UK is becoming uninvestable for the life sciences.

Does the Minister know how many meetings the Secretary of State has had with life sciences companies in the past month? As I understand it, the answer is very few. What has she been doing to rally colleagues across Government and make clear to the Chancellor, the Health Secretary and Prime Minister the scale of the peril? I have been looking at her statements, and it is not at all clear to me that she has been doing anything.

The fund, which we support, is a capital manufacturing fund. It helps de-risk certain projects and reduces borrowing for companies, but it does not fix the fundamental problem of the commercial environment for medicines in the UK. We all know that Labour has made the commercial environment worse in many ways, such as through national insurance rises and other tax increases, and that has also made successful people not want to base themselves here.

There are also long-standing issues that need fixing here, including drug pricing and the voluntary scheme for branded medicines pricing, access and growth—VPAG—rebate, which risks becoming a tax on innovation. But the Labour Government have screwed the public finances so badly that they have nowhere to go on these issues, not least because the NHS has had to spend a large chunk of the money that the Government have taken from our constituents. They took a lot of money from our constituents and told us that it would make this big difference to the NHS, but the money went on wage deals in the NHS and national insurance rises. [Interruption.] Labour likes to talk about the tough choices it has made to the NHS, but I would ask Government Members to ask their constituents whether they are really seeing a tangible difference in the NHS. The Government have taken a hell of a lot of money from everybody and it is not working.

Normally I would be glad for the ability of the NHS to use its collective bargaining power to keep drug prices low, but there is now a real risk that life sciences companies will not be bringing new medicines to market in our country. That means my constituents and your constituents not getting cutting-edge treatments. It means pain, heartache and ill health, and it means that the life sciences industry that has served us so well is ebbing away and taking the high-quality, high-value jobs with them. This is a crisis. I must ask the Minister: can this fund succeed when the wider tax environment stands as is?

The issue of medicine pricing is fast coming to a head as President Trump plays hardball on drug costs. The US Administration have alighted on the UK’s low drug prices and are using them as a bargaining tool against the threat of tariffs. This Government have boasted of their special relationship with the US, and we have had endless excruciating shots of the Prime Minister prostrating himself before the President. Can the Minister tell us how that relationship is benefiting the life sciences, because I cannot see it for myself?

Can the Minister tell us whether the Secretary of State is aware that it looks as though His Majesty’s Revenue and Customs has decided that companies providing medicines for clinical trials or compassionate use under the early access to medicines scheme should now be billed for VAT? That is a tax on medicines that are being provided for free. Apparently, one company has already received a bill and more are on their way for others. This could affect trials and people’s access to medicine. Will the Minister please commit to looking into that urgently as Labour scrabbles around for more revenue? Will he also ask HMRC to publish guidance confirming that in fact the early access to medicines scheme falls outside the VAT deemed supply rules?

Will the Minister tell us how much of the £520 million has been spent to date? What is the current investment pipeline? How does it compare to the one he inherited? Will he update the House on the current state of negotiations between industry and Government on the VPAG scheme and medicine pricing, and with the US on tariffs? What conversations—if the Minister knows—has the Secretary of State had personally with the Health Secretary and the Chancellor on these issues? This is an extremely perilous situation for our life sciences firms and for patients’ access to new drugs.

Britain’s life sciences sector is worth over £100 billion to our economy and supports about 300,000 jobs. It is massive. It is one of our defining national strengths: a source of innovation, prosperity and national pride. Of course, it is also the key to better health for our constituents and people across the world. The life sciences innovative manufacturing fund remains a Conservative achievement, but unless the Government act swiftly to restore competitiveness and rebuild investor confidence, we risk losing our place at the forefront of global life sciences. I am afraid that no amount of rebadging, repackaging or recycled announcements will change that.

[Several hon. Members rose—]