A round-up of the Conservative Party Conference
The question for the life sciences sector is what has this year’s Conservative Party Conference told us about the Government’s approach to the commercial environment, the NHS, and the overall attractiveness of the United Kingdom as a place to invest? The answer, in short, is not very much.
In these most uncertain times, it is understandable that industry looks for reassurance and certainty from Government. However, it is fair to say that Philip Hammond’s speech was notable not for the words that were spoken, but for the meaning behind them. The prime example of this being his comments surrounding preparations for the UK leaving the EU without a deal and maintaining “enough fiscal power to support our economy if that happens.” Although he insisted a deal was still possible on the terms outlined in the Chequers plan, which would result in a boost to growth and a “deal dividend,” you cannot help but think this month’s budget will be an overly cautious affair.
In his opening remarks, the Chancellor was at pains to stress that Labour’s policies would endanger the economy and that a Conservative government needs to answer their challenges with “solutions based on realism not populism, delivery not rhetoric.” All very encouraging however, ironically, his speech did not seem to make it past the rhetoric. The only concrete policy proposal was the Digital Services Tax – but not its immediate introduction, just the possibility of its introduction.
With Hammond confidently stating the “Conservative Party is and always will be the party of business,” it was disappointing for this not to be followed up by the Secretary of State for Business, Enterprise, and Industry Strategy, Greg Clark. Instead, of a speech to conference, the audience was given a live stream Q&A session of Clark wandering around a Coventry factory, talking to staff and discussing how it is a shining example of the government’s industrial strategy. Disappointingly, only at the very end did Clark touch on the life sciences sector, but this was only to reiterate the investment made by MSD linked to the Life Sciences Industry Strategy.
This, however, was not the sum total of Clark’s contribution to conference. In fact, the number of his appearances at fringe events has been one of the highest for any current government minister, speaking on a wide variety of issues. These have included companies use of customer data, car manufacturing, and business rates. Although enriching for the party faithful in attendance and hitting some pertinent policy areas, this has done very little to reassure industry that this Conservative government is doing enough to support the life sciences sector through these highly uncertain times.
Dominic Raab’s speech, admittedly, was much more impassioned and showed a willingness to see a deal done with Brussels, whilst making it abundantly clear that compromise is not without limit. This vision, however, was somewhat muddied by Theresa May’s indication that further compromises on Chequers might not be completely implausible. Of particular concern was his downplaying the ramifications of a no-deal scenario, in an effort to placate the party membership and maintain a bargaining chip with Brussels. In a relatively flippant remark, Raab linked concerns about medicines shortage with concerns of debris falling from the sky. Now, as anyone versed in the regulatory and commercial side of the life sciences sector knows, this choice of comparison shows an unhelpful attitude to the challenges facing the industry in a post-Brexit environment. It certainly does nothing to reassure companies that the government truly understands the gravity of current risks.
Unfortunately, not even the fresh-faced new Secretary of State for Health and Social Care, Matt Hancock, could do enough to buck the trend and convince onlookers that the last three days has been about anything other than damage limitation. Although his enthusiasm was palpable, his speech was nothing more than ‘safe.’
In line with his speech on taking over leadership of the Department back in July, Hancock’s delivery to conference hit his three priority areas: workforce, technology and prevention. But in all honesty, it is hard to go wrong by praising the dedication of frontline staff, picking out a few isolated examples of new technology and/or approaches to give the sense of a cutting-edge approach (particularly when underlining this with the comparison of the NHS’ dependence on fax machines), and focusing on prevention – a health agenda that is not universally understood and is regularly at the mercy of non-distinct political rhetoric.
The crescendo of his address was the announcement of a relatively small cash injection of £240 million for the social care system. The key intent of this additional funding is for local authorities to spend on short-term care packages to help transition patients out of hospital following care. Although supposedly new money not sourced from existing budgets, it is arguably nowhere near enough to cover the shortfall in social care funding facing councils overall.
On the face of it, it was encouraging to hear the Department acknowledge that reforms to the health and care system are needed, alongside this additional money, admitting that “reform of social care is long overdue.” However, the only definitive action on social care that could be committed to was publishing a green paper later this year. Having already committed to this in the March 2017 Budget and delaying progress on this multiple times since then, don’t hold your breath in expectation of it being put before Parliament this side of Christmas.
Did Theresa May do enough in her speech to reassure the life sciences sector that the United Kingdom is, and will remain, an attractive place in which to invest? Possibly. As is the case in nearly all walks of life, expectation management is just as important as achievement. In this regard, the Prime Minister needed only to walk on stage, deliver her address without reaching for the cough sweets, and have all eleven letters of the backdrop remain standing.
In her speech there was conspicuously no mention of “Chequers,” with May deferring to description of a “free trade deal that provides for frictionless trade in goods.” Encouraging reassurance for the industry, however, her proposal is by no means a done deal. For now, this speech will have reassured the party faithful as to her Brexit credentials and calmed the nerves of those fearing a cliff edge outcome. What this has not done is shift the conversation forward or provided any greater certainty. The only tangible benefit being more time for her to try to convince both sides the merits of her plan.
The Prime Minister’s headline commitment to healthcare was a pledge to create a new cancer strategy. (This shouldn’t be too problematic to deliver as there is already a ‘new’ cancer strategy being implemented following its publication in 2016.) It is not surprising that cancer was signalled out, as it is a priority area for the 10-year plan NHS England is drafting in return for its £20bn funding boost. But rather than addressing the needs in the system as a whole, cynically, politicians tend to revert to this non-controversial subject matter with which the public can easily identify and support.
What wasn’t addressed by either Matt Hancock or Theresa May was the five years it took to follow up the UK Strategy for Rare Diseases with an implementation plan, the significant downward pressure caused by the introduction of the budget impact test and new thresholds on incremental cost-effectiveness ratios, or the continued reluctance on the part of NHS England to commit a proportion of rebate payments under the current voluntary scheme to support the introduction of new innovation. The list goes on.
Theresa May’s assertion that “Britain, under [her] Conservative Government, is open for business…to drive innovation and improve lives…with the lowest Corporation Tax in the G20” is an encouraging sentiment, though it is perhaps not strongly reflected in how the current leadership at DHSC and more importantly, NHS England is engaging with the pharmaceutical industry. The conundrum, which is by no means new, is how to balance the tension between an industry that is vital for Her Majesty’s Treasury but, perversely, can pose significant challenges for the sustainability of the NHS. Unfortunately, based on this year’s performance, the Government still isn’t there just yet.
For further insights on how Conservative government policy affects the life sciences industry, please contact Tom Jaggs