BIA reaction to the Queen's Speech
The Government has used the Queen’s Speech to highlight its ambition to lead the world in life sciences as part of its plans for economic recovery from the COVID-19 pandemic on the back of the successful vaccination programme. Improving health, creating jobs and levelling up were other key themes set out as the foundations for the Government’s policy agenda.
Setting out the business for the new Parliamentary session, the Queen announced key pieces of legislation for our sector, including: a health and care bill; subsidy control; and continuing legislation establishing a new R&D funding agency and the national security and investment regime.
Health and care
More support for the NHS was committed to and the much-trailed Health and Care Bill was confirmed, with the promise that the new legislation will “empower the NHS to innovate and embrace technology”. A White Paper preceding the Bill was leaked and subsequently published in February, which provides more of the detail on the planned Bill. In essence, this new legislation would roll back many of the changes brought in by the Health and Social Care Act 2012, with a focus on removing much of the competition-based elements of the 2012 Act, replacing them with an explicit duty to collaborate. Other key proposed changes include:
- The Secretary of State for Health and Social Care will be given much broader powers to intervene in the running of the NHS – such as directing NHS England in relation to ‘relevant functions’ (which is likely to mean anything set out in the Mandate at present), transferring functions to and from arms-length bodies (ALBs) and intervening in service reconfigurations. This is a significant restoration of the Secretary of State’s powers to pre-2012 levels and opens to the way for greater political discussion and intervention in areas which for the last eight years have been solely in the gift of NHS England and may include medicines pricing and commercial agreements.
- Clinical commissioning groups (CCGs) will be abolished and Integrated Care Services (ICSs) put on a statutory footing as their successors – these bodies will then lead much of the commissioning of services and care in the NHS.
- NHS England and Improvement will be formally merged (at the moment its status is a rather messy legal fiction) and given powers to delegate the commissioning of specialised services to ICSs or to jointly commission these services with ICSs. Therapy areas may include some rare diseases and cancers – although specialised commissioning policy would remain centralised.
- The Medicines and Healthcare products Regulatory Agency (MHRA) will be given powers to set up national medicines registries, to support data collection on the use and uptake of medicines in the NHS.
Following the UK’s departure from the EU, Britain is no longer bound by EU State Aid rules that impose restrictions on key forms of support (subsidies) for the life sciences sector, such as R&D tax credits and Innovate UK grants. A public consultation in the first quarter of the year sought views on the design of a new UK subsidy control regime. You can read the BIA’s submission here. A particular issue we highlighted is that the EU’s Undertakings in Difficulty rule has prevented or hindered biotech companies’ access to grant funding, so we now have the opportunity to put in place a more appropriate test to distinguish between genuinely unviable businesses and those that are just incurring heavy losses because of R&D investment. The legislation announced in the Queen’s Speech will soon answer if this opportunity will be seized by the Government.
Advanced Research and Invention Agency (ARIA)
Though previously introduced in the last Parliament, the Government reiterated its commitment to the Advanced Research and Innovation Agency (ARIA), which will fund high-risk, high-reward research. The Queen’s Speech also reminded us that the Government is delivering the “fastest ever increase in public funding for research”. The ARIA Bill will complete its Parliamentary passage in the upcoming session and become law. This new agency could support new, pioneering research into our sector to deliver transformative innovations for the UK and beyond. Further investment into the UK life sciences sector, like this agency could provide, would further bolster the UK’s world-leading life sciences ecosystem and position as a science superpower. The BIA has commented on ARIA here.
National security and investment
The National Security and Investment Act, introduced and passed in the last Parliament, established a new mechanism for the Government to screen investments into sensitive sectors of the economy which may pose a risk to national security. The next Parliamentary session will see regulation (secondary legislation) associated with the new regime introduced and passed, outlining and defining the 17 sensitive sectors of the economy to which the regime principally applies. With Synthetic Biology and Artificial Intelligence identified as sensitive sectors, this new regime is likely to capture some investments into the UK life sciences sector. The BIA has produced an overview of the regime and what it could mean for our sector here.
Upskilling the workforce is a cornerstone of the Government’s recovery and levelling up agenda. Among the reforms are plans to give employers a statutory role in planning publicly-funded training programmes with education providers, through a “Skills Accelerator” programme. A Skills for jobs white paper was issued in January and sets out lots of activity about industry leading on curriculum design Skills and Post-16 Education Bill will be introduced on 18 May. The BIA is working to ensure we have a skilled workforce for the future through developing specialised apprenticeships in areas such as advanced therapies, growing leadership talent across all levels and sizes of organisation, progressing commercial and entrepreneurial skills to launch and sustain innovation, and ensuring companies have access to sufficient talent with advanced digital, data analytics and informatic skills. For information on the BIA’s skills workstream, see here.
The Government also confirmed that a trio of Bills will also be brought forward to “ensure the UK has, and promotes, the highest standards of animal welfare”. This will include a ban on the export of live animals for fattening and slaughter, which we understand will not include ban on the export of animals for research purposes. Such transport is vital to facilitate international collaboration in research to understand disease and develop new treatments.
One of the three Bills,the Animal Welfare (Sentience) Bill, will deliver on the Government’s commitment to recognise animal sentience in law. The Government tried this in 2018 via the Animal Welfare Bill, but following a wide consultation process, the sentience part of the Bill was ultimately removed as sentience is difficult to define and prove. The BIA will monitor the Animal Welfare (Sentience) Bill once it is introduced to Parliament, as it needs to recognise that the UK already has very strict legislation that covers the use of animals in research which is based on the notion of sentience.
Finally, the Finance Bill is also being carried over into the new parliamentary session, which crucially contains the provisions for the PAYE cap on SME R&D tax credits, which the BIA has ensured will largely not impact genuine biotech companies - you can read more about that here. Despite not yet being law, the cap will apply for accounting periods beginning after 1 April 2021.
What happens now?
Parliamentarians will now debate the Queen’s Speech over the next few days, and the legislation itself will be published in the coming months. The BIA will engage with the Government, Parliamentarians and policy makers to inform the development of legislation and its debate as it progresses through parliament.
Much of this work will be wrapped up in a new life sciences strategy this summer, which was described as a “sector vision” in Our Plan for Growth, published by the Government on 3 March.
The full speech and details of all the legislation announced can be found here.