Life Sciences Investment

Lindsay Hoyle Excerpts

Thursday 11th September 2025 Commons Chamber

[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.

[Mr Speaker]

Don’t count on it.

[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.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

rose—

[Mr Speaker]

Order. We cannot have points of order in the middle of the Minister’s response; they come at the end.

[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.

[Mr Speaker]

I call the Chair of the Select Committee.

[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.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[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?