On 30th January, Labour announced its plan for the life sciences sector. CaSE welcomes the proposals and encourages Labour to extend their commitments to the whole science and innovation sector.

At the heart of the plan is the recognition that businesses are vital to achieving Labour’s ambitions for economic growth. As CaSE have highlighted recently, in a globally competitive climate, the UK must provide an attractive offer if it wants to entice and support R&D-intensive businesses and investment. The plan sets out proposals to enable an environment that incentivises life sciences businesses to locate, start, and grow R&D activity in the UK. Below we take a look at some of the details.

Providing long-term certainty and stability for R&D and innovation

It is good to see a focus on providing stability and certainty in the funding and business environment to support long term planning and investment in innovation. This is crucial for all R&D-intensive companies and particularly important for deep-tech companies, whose timeframes for commercialisation can be especially long.

CaSE welcomes Labour’s proposal to set long-term, 10-year public spending budgets for key research institutions such as the National Institute for Health Research and UK Research and Innovation. Labour also re-emphasises its commitment to its Industrial Strategy to offer certainty to businesses and investors. The Industrial Strategy will be underpinned by a new statutory Industrial Strategy Council to hold government to account and provide greater continuity across the political cycle.

These proposals will serve to give businesses the confidence to keep on investing in R&D. CaSE calls on Labour to widen the remit of these commitments to include all sectors of science and engineering; stable and predictable plans, supported by sustained investment, are vital to help all sectors of research and innovation thrive in a way that drives economic growth and prosperity across the UK.

Policy levers to support the business environment for life sciences

Labour’s plan sets out a series of commitments across a range of policy levers to support the research and innovation pipeline and business environment in the life sciences.

Funding and finance

The plan highlights that life sciences businesses face barriers in accessing finance. In particular, it recognises that scale up support is an important challenge, with fewer options for companies to access later-stage capital compared to other countries. The plan also recognises that businesses have lacked a stable environment, with frequent changes to R&D tax credits.

We at CaSE were pleased to see Labour’s intention to maintain the current structure for R&D tax credits and protect the Enterprise Investment Scheme and Venture Capital Trusts, offering some much-needed stability to the sector. The further proposal to evaluate the impact of the R&D tax credit scheme across each sector, starting with the Life Sciences industry, is a welcome one and we encourage this broader approach to supporting science and innovation.

Regulation

The plan emphasises the importance of an agile and responsive regulatory regime that keeps pace with technological change. To address this, Labour has already announced that it will create a Regulatory Innovation Office, bringing together the Regulation Executive and the secretariat for the Regulatory Horizons Council. It will serve to hold regulators accountable for driving innovation where appropriate and for delays that are holding back innovation. Encouragingly, the plan also outlines aims to build regulatory capacity to support this goal, through prioritising secondments into life sciences regulators to close any expertise gaps in the UK’s specific priority areas. Regulatory capacity is an issue that requires significant attention, and CaSE encourages Labour to broaden this approach to boost regulatory capacity across all scientific sectors.

Planning reforms

Labour’s plan recognises that the availability of commercial life sciences facilities cannot keep pace with the fast-growing industry. The plan therefore proposes reforming UK planning policy to prioritise new laboratory space. This includes bringing laboratory clusters under the Nationally Significant Infrastructure Regime in England and creating new National Development Management Policies, both of which will direct local planning policy to favour approving applications for lap space. The reforms also intend to address the issue of housing shortages in these areas, thus making a more appealing offer for skilled workers to relocate to innovation centres.

CaSE welcomes these reforms as availability of lab space, in particular for businesses looking to scale up, is an issue that requires urgent attention. In addition, much needed planning reforms will help to make it easier for R&D infrastructure to be built across the UK.

Skills

The plan also highlighted the importance of boosting local skills needs and upskilling the existing workforce to help address skills shortages in the life sciences, something which CaSE has drawn attention to in its report on unlocking skills for a more research intensive UK. Labour proposes that the Local Skills Improvement Fund be made available to support provision of higher technical qualifications in response to local and employer skills needs. To enable upskilling, the plan proposes repurposing the existing Apprenticeships Levy into a ‘Growth and Skills Levy’, increasing the range of training courses it covers and allowing 50% to be spent on non-apprenticeship training, with the remaining half reserved for apprenticeships. These changes would help to provide increased flexibility for employers to provide a range of training opportunities in the workplace, something which CaSE has called for.

While CaSE welcomes Labour’s proposals to support the life sciences, we strongly recommend that the same approach be extended to cover the whole of the R&D sector. Many of the challenges faced by the life sciences are shared by other science and innovation sectors, which warrant equivalent levels of consideration, investment, and policy reform.