Medicines Manufacturing Industry

Lord Hunt of Kings Heath Excerpts

Monday 27th February 2023 Lords Chamber

Asked by

[Lord Hunt of Kings Heath]

To ask His Majesty’s Government what steps they intend to take in response to the report by the Medicines Manufacturing Industry Partnership Fulfilling the potential identified in the Government’s Life Sciences Vision, published on 23 January, which found that medicines manufacturing and employment has declined in the United Kingdom over the last 25 years.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, the Government recognise the valuable role that medicines manufacturing plays in the UK economy. This enables us to capitalise on our world-class research and development, creates jobs, and contributes significantly to growth. Life sciences pharmaceutical manufacturing was responsible for more than £20 billion of exports in 2021. Our Life Sciences Vision set out the Government’s ambition to create a globally competitive environment for manufacturing investment. Last March, we launched the £60 million life sciences innovative manufacturing fund to encourage manufacturing investment in the UK and will announce the fund’s winners later this year.

[Lord Hunt of Kings Heath (Lab)]

My Lords, the Minister is absolutely right to stress the importance of this sector to our economy and the value of our exports, but since 2010, the volume produced has reduced by 29% and in the league table of countries with trade balances relating to pharmaceuticals, we have gone from fourth place to 98th place. Now the sector, like others, is having to face up to increasing corporation tax and, remarkably and peremptorily, the Treasury decided to reduce SME R&D tax credits for life science companies. This will, in effect, reduce by half the value for loss-making SMEs. Given that SMEs are at the heart of the life science industry, will the Government reconsider that decision?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the UK is a prime location to research, develop and manufacture pharmaceutical products, particularly complex medicines. The Life Sciences Vision acknowledges that there has been a long-term decline in medicines manufacturing in the UK over the past quarter of a century, as the noble Lord highlighted in his Question, but official statistics from the Office for Life Sciences show that employment in core biopharmaceutical manufacturing has increased by 5% in the two years from 2019. The UK holds the number one spot for life science investment in Europe, and globally is second only to the US, so there are reasons for optimism as well.