On 22 November, the Autumn Budget was laid out by the Chancellor, Philip Hammond, but what does it mean for life sciences? Take a look at some of the highlights.
Backing for Cambridge Oxford Expressway
The Chancellor has backed the £7bn expressway scheme, recommended by the National Infrastructure Commission which would see a new road built between Cambridge and Oxford, saying the deal would “capitalise on the international reputation” of the UK’s two most prestigious universities.
New towns will be constructed along the route to cater for the one million new homes which will be constructed by 2050, and it is estimated the project could be worth £160bn a year to the region’s economy. They have also committed £5m to speed up the delivery of a Cambridge South station, which will serve the community, region and visitors through connections into London King’s Cross, Liverpool Street, Stansted, Cambridge and King’s Lynn stations with subsequent links planned with East West Rail.
This is great news for the Cambridge Biomedical Campus as they currently have 26,500 visits to the campus every day, including patients, academics, scientists, and visitors, and the 17,250 staff who are working there. This could be game-changing for the scientists and researchers in the Campus, which is set to hold AstraZeneca, Papworth Hospital NHS Foundation Trust and Abcam over the next two years.
Cambridge and Oxford are critical contributors to the UK economy. Connectivity through improved infrastructure will enable collaboration and commercialisation to flourish, thereby securing continued economic growth across the golden triangle and beyond.
Supporting the government’s ambition of increasing R&D investment in the economy to 2.4% of GDP by 2027, the Budget confirmed that the £4.7 billion NPIF investment in science and innovation announced at Autumn Statement 2016 will grow by a further £2.3 billion of additional spending in 2021-22, taking total direct R&D spending to £12.5 billion per annum by 2021-22. This will ensure that our scientists and entrepreneurs continue to push the boundaries of innovation and underpin the UK’s competitiveness and economic growth.
The Industrial Strategy White Paper provided further detail on what this funding will support, including:
- Support for our creative and digital industries by developing pioneering immersive technology for creative content, and launch of a new AI and machine-learning programme targeted at the services sector
- £170mn for innovation to transform productivity in the construction sector
- New support to grow the next generation of research talent and ensure that the UK is able to attract and retain the best academic leaders globally
The government will also increase the rate of the R&D expenditure credit from 11% to 12% with effect from 1 January 2018 and a new Advanced Clearance Service for R&D expenditure credit claims, to provide businesses with the confidence to make R&D investment decisions.
The Government also said it will encourage the best and the brightest international scientific and research talent to work in the UK, by changing immigration rules to enable world-leading scientists and researchers endorsed under the Tier 1 (Exceptional Talent) route to apply for settlement after three years; make it quicker for highly-skilled students to apply to work in the UK after finishing their degrees; and reduce red tape in hiring international researchers and members of established research teams, by relaxing the labour market test and allowing the UK’s research councils and other select organisations to sponsor researchers.
Access to finance
The Budget announced an action plan to unlock over £20bn of patient capital investment to finance growth in innovative firms over 10 years by:
- Establishing a new £2.5 billion Investment Fund incubated in the British Business Bank with the intention to float or sell once it has established a track record. By co-investing with the private sector, a total of £7.5 billion of investment will be unlocked
- Doubling the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme, and introducing a new test to reduce the scope for and redirect low-risk investment, together unlocking over £7 billion of growth investment
- Investing in a series of private sector fund of funds of scale. The British Business Bank will seed the first wave of investment with up to £500 million, unlocking double its investment in private capital. Up to three waves will be launched, supporting a total of up to £4 billion investment
- Backing new and emerging fund managers through the British Business Bank’s established Enterprise Capital Fund programme, unlocking at least £1.5 billion of new investment
- Backing overseas investment in UK venture capital through the Department for International Trade, expected to unlock £1 billion of investment.
The Government will give pension funds confidence to invest in assets supporting innovative firms as part of a diverse portfolio and the Pensions Regulator will clarify guidance on investments with long-term investment horizons. With over £2 trillion in UK pension funds, small changes in investment have the potential to transform the supply of capital to innovative firms.
There will be a change to the qualifying rules in Entrepreneurs’ Relief to remove the disincentive to accept external investment and consulting on the detailed implementation of that change. The British Business Bank will also support development of clusters of business angels outside London through a new commercial investment programme.
Much of what we need to deliver a world-class scientific ecosystem is already in place in the UK. We have world-class universities, innovative medical research, cutting-edge businesses and a talented workforce. This ramping up of spending ensures we don’t get left behind in the global race to deliver new treatments and products in areas such as genomics, cell and gene therapy, and robotics. We have an opportunity to futureproof our industry with the new industrial strategy and it’s a real boost to see the UK’s strength in science being championed by the Government.