My Lords, I would like to focus my remarks on the life sciences and the effect of Brexit on medical research. The UK life sciences ecosystem is currently a global leader in scientific research, and commercialisation is improving. I for one would like to keep it that way. The UK is home to four of the world’s top six universities for research in, and study of, clinical, pre-clinical and health topics. It also benefits from a sophisticated regulatory system, which plays a key role in shaping EU legislation and regulatory activities. Thanks to these factors, a quarter of the world’s top 100 prescription medicines were discovered and developed in the UK. We have the largest biotech pipeline in Europe, with more than 580 products in development in 2015. Leaving the EU will have a significant impact on UK life sciences, particularly around the funding of scientific research and research collaborations. One of the top priorities for the Government in their negotiations must be to ensure that measures are in place post-Brexit to prevent any weakening of our position as a leader in life sciences research and innovation.
The contribution of life sciences to our economy is significant. They contribute more than £60 billion a year to UK GDP, with annual exports of £29.5 billion. Pharmaceuticals generated nearly four times more gross added value per head of those employed than the automotive industries. Therefore, the Government need to pay even more attention to life sciences than to companies such as Nissan. A majority of firms in the sector are SMEs, historically the main engine of UK economic growth. Collectively, these employ 220,000 people. Two-thirds of these jobs are based outside London and the south-east, stimulating regional growth, so it cannot be said that the industry is south-east biased.
It is vital that this contribution survives Brexit, but there are severe dangers. Historically, the UK has been a net recipient of €6.9 billion of R&D funds. The UK is currently part of the EU Horizon 2020 framework. Although HM Treasury’s commitment is welcome, I join other noble Lords in asking what happens to UK access to this funding beyond Horizon 2020. Lack of ERC funding might discourage top scientists from conducting their research at UK institutions, while the removal of grants to translate research into usable products may reduce the number of UK start-ups, which are important for economic growth. We heard about this phenomenon from the noble Lord, Lord Mair; the same thing applies to life sciences. Even if the UK retains access to Horizon 2020 funding, other funding sources, such as the European structural and investment funds, which brought €1.9 billion for R&D into the UK between 2007 and 2013, will be lost following Brexit. Will the Government therefore renew their dialogue with the pharmaceutical industry to ensure that it is a key plank in the renewed UK industrial strategy?
Collaboration on publications is also at risk, as we have heard. Currently, around 60% of internationally co-authored papers produced by the UK come from collaborations with EU partners. Uncertainty over funding arrangements has already jeopardised some collaboration, as we have heard from other noble Lords, and could affect many more.
Our life sciences SMEs currently enjoy access to the most developed funding pipeline in Europe, with both a thriving venture capital environment and one of the world’s most vibrant locations for initial public offerings. Many VC funds receive up to 40% of their funding from the European Investment Fund. Loss of access to European Investment Bank and EIF funding could result in reduced venture capital funding for UK SMEs and ultimately fewer UK start-ups, and of course some of them might relocate to the EU or the US.
Finally, on the role of the NHS as an engine for innovation, the UK has an opportunity to capitalise on the unique potential of the NHS to act as a “single site” for clinical trials. As a closed healthcare system for a large and diverse population, with access to data across the entire patient journey, the NHS is a unique selling point for conducting clinical trials in the UK. The improved co-ordination and integration of patient records is especially valuable here. We heard some specific examples of this from the noble Baroness, Lady Blackstone.
Therefore, research and translational funding, collaboration, jobs and SMEs, and the NHS—all are at risk. UK life sciences could be heading for disaster. The Government, led by the three Brexiteers, like a bunch of lemmings jumping over a cliff, are planning to take the universities and scientific research with them. Does the Minister have a parachute?