CEO Update | 12 December 2022

The Chancellor of the Exchequer, Jeremy Hunt MP, unveiled a broad package of measures on financial services last Friday with much that has relevance to the scale up agenda. 

A lot of different measures were announced that combined, I hope, will unlock new streams of significant investment into UK life science companies. This is a long-term agenda the BIA has been working on behind the scenes for months and years.

Key parts of the announcement for our sector include:

• The launch of an Investment Research Review: an independent review of investment research and its contribution to UK capital markets competitiveness. The review is part of the government’s wider commitment to enhance the UK’s ability to attract companies to list and grow.
   
• The Government will consult on requiring Local Government Pension Scheme (LGPS) funds to ensure they are considering investment opportunities in illiquid assets such as venture and growth capital, as part of a diversified investment strategy.
   
• The Government wants to accelerate the pace of consolidation so that no pension savers are left in poorly governed and underperforming schemes. This consolidation will enable UK pension funds to act more like their Australian and Canadian counterparts which have broader exposure to life sciences and Venture Capital (VC).  
   
• The Government will lay regulations early in the New Year to remove well-designed performance fees from the pensions regulatory charge cap to provide clarity for industry and ensure pension savers can benefit from investing in UK innovation.
   
• In addition, an overhaul of the prospectus regime will enable the Government to implement recommendations from Lord Hill’s UK Listing Review, helping to widen participation in the ownership of public companies, simplify the capital raising process for companies on UK markets, and make the UK a more attractive destination for Initial Public Offerings (IPOs).
   
• To ensure a regulatory focus on growth and competitiveness the Government has issued new remit letters to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) which will set clear, targeted recommendations for how the regulators should have regard to the Government’s economic policy. In essence, the Government is telling the financial regulators to back the scale up agenda: 'the FCA should therefore have regard to supporting the government’s ambition to encourage economic growth in the interests of consumers and businesses including, the Government’s desire to facilitate investment in productive assets, particularly venture and growth capital to support UK scale up companies that face a particular finance gap'.

Together I believe these moves lay the groundwork for new forms of capital to actively support UK life science companies to scale – enabling risk and time return profiling for pension assets to more easily support the types of companies our sector is successfully growing.

Labour’ Party Business Conference

The Labour Party published Lord O'Neill's Start Up Review Report at its Business Conference in Canary Wharf last Thursday.

It is a thoughtful and considered analysis of the challenges faced by UK innovative scale ups and includes a series of positive recommendations. The BIA contributed ideas to the review and I hope the recommendations are adopted. It is good to see the official opposition taking the time and effort to engage with and listen to entrepreneurs driving the growth of the UK economy. This provides an excellent backdrop for further engagement in the New Year.

R&D tax credit campaign continues

Thank you to members for their continued engagement on the implications of R&D tax credit changes for our sector as a result of the Finance Bill. As a result of this engagement, I’ve had a number of productive discussions and I think a fuller understanding of the implications of the proposed changes  is emerging across Whitehall and Westminster. I hope to update you on this before the end of the year.

JP Morgan webinar

Like many of you, I will be using the next couple of weeks to finalise planning ahead of the JP Morgan Health Care conference happening in San Francisco early in January. I’m looking forward to sharing perspectives on this year's event and providing tips for newcomers and old stagers at our webinar this Friday. Do join us.

Charity of the year

It was great to round out our partnership year with Kidney Research UK at a fabulous Women in Biotech event last Thursday hosted at Bird & Bird. See the environmentally friendly photo shoot for the final number – but the event had far more than that with a great panel on the London life sciences ecosystem and extended networking.

The last Newscast and CEO blog of the year will be next Monday where I’ll review some of the highlights of the BIA year.

 

 

Steve Bates OBE
CEO, BioIndustry Association

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