On 23 November, Philip Hammond MP will stand up at the dispatch box to deliver his first Autumn Statement as Chancellor of the Exchequer. Coming five months to the day after the UK voted to leave the EU, all eyes will be on him to deliver a plan to strengthen the UK economy and provide confidence to UK businesses and international investors.
The BIA has presented a range of policies to the Treasury that can help achieve this. As the UK prepares to leave the EU, delivery of an internationally-competitive industrial environment is more important than ever. By adopting the BIA’s proposals, the Government can not only send a strong signal to the international life sciences community that it remains committed to this vital sector, but also demonstrate to all global decision makers that the UK is open for business and a primary destination for starting and growing an innovative business.
The BIA’s submission comes shortly after the Chancellor announced that he will refill the Biomedical Catalyst to make £100 million available for research projects in UK companies over the next four years. Having led a concerted campaign calling for it to be refilled to address a critical shortage of early-stage funding for biotech, we were delighted with the announcement. Our new proposals will complement the Catalyst by addressing other stages of the medical innovation pathway and will also benefit other knowledge-intensive sectors.
The proposals are a mix of improvements to existing schemes and new ideas for cost-neutral ways the Government can drive more investment into knowledge-intensive SMEs which are the lifeblood of the UK economy.
Maintenance and expansion of the R&D Tax Credits
Drawing on our Finance and Tax Advisory Committee, we have identified a range of R&D activities that aren’t currently covered by the R&D Tax Credits scheme but justifiably should be. These include the purchase of R&D equipment and health data sets (such as those provided by Genomics England) and investment in process innovation to increase manufacturing productivity in the UK. We’ve recommended the Treasury conducts a review to ensure the scheme covers the valid costs of R&D undertaken by UK businesses.
A funded Early Access to Medicines Scheme
We have also once again pressed the Government to fund the Early Access Scheme so that participating companies can be reimbursed for the medicines they are supplying. Our members tell us this is a major impediment to taking part in the scheme and that the UK is losing out to countries with funded schemes. Reimbursement was promised in the 2011 Strategy for UK Life Sciences but not delivered, the imminent Accelerated Access Review is an opportunity to address this.
New investment funds
The BIA has long campaigned for innovative new ways the Government can incentivise more private investment into biotech. This year’s Autumn Statement submission renews calls for a tax-incentivised Citizen’s Innovation Fund that could open up opportunities for the general public to invest in innovative UK businesses. Theresa May’s ambition to create an economy that works for everyone gives new relevance to this original BIA policy. We have also introduced a new policy proposal for 2016 to ensure that those using the Tier 1 investor visa route are supporting innovative UK businesses. Currently, people are able to obtain this visa by investing £2 million into UK-based stocks and shares with few specifications. The BIA proposes that 10% of the investment should be made in “knowledge-intensive businesses” (as defined in tax legislation) to ensure the investor visa is targeted at economy-enhancing ventures.
These proposals, along with other suggested refinements to tax and fiscal incentives, were submitted to the Treasury on Friday. The BIA will also be meeting with the Financial Secretary to the Treasury, Jane Ellison MP, in the coming weeks to discuss them in more detail as well as meeting with other ministers and MPs.
You can read our full submission on the BIA website. Follow the BIA on Twitter for announcements on the day of the Autumn Statement (23 November) and keep an eye on our blog for a roundup of the Chancellor’s speech, key announcements and reaction from the life sciences sector.