Industrial policy in the next Labour Government: what are the implications for life sciences?

3 Apr 2024, 10:38

By Jamie Holyer, Senior Adviser - Healthcare

In a General Election year parties must signal their vision and provide a narrative on intended policies, but not go too far as to hand their opponents the kind of details that could later be used against them.

For the Labour Party in 2024, that is polling consistently above 45%, the balance is even more difficult. For the first time in decades, they are making the public an offer that was unimaginable until recently because of their chances of forming the next government. But they must continue to show restraint and not get too ahead of themselves.

So, what do we actually know at this point in the electoral cycle? What are the main themes for a future Labour Government? What might it mean for life science companies doing business in the UK and with the NHS?

Securonomics: Although usually the prerequisite for any government, market credibility and public trust in management of the economy is something the British people are desperately craving. Shadow Chancellor Rachel Reeves has committed to balancing the budget and ensuring any further public investment is met by revenue. With the squeeze on public finances likely to carry on well into the next Parliament, and VPAG agreed, any headroom for innovation in the NHS will have to rely on efficiencies found elsewhere in the system.

Digitalisation of the NHS: In such fiscally constrained circumstances, both Labour and the Conservatives agree that the only way to move the needle on NHS waiting lists is to drive efficiency through investment in digital services. Thus, digitalisation is perhaps the only area of healthcare where we can expect significant infrastructure investment in the next Parliamentary term.

Devolution and innovation: With health disparities growing and the economy slowing, Labour has emphasised the need for innovation to be nourished outside the ‘golden triangle’ of London, Oxford, and Cambridge. Expect tax breaks, regional cluster strategies, and further devolution of power to local leaders to expand healthcare innovation across the country.

Regulation and partnership: Labour has also made commitments to enhance Treasury engagement with the healthcare industry, establish a Regulatory Innovation Office, empower the Office for Life Sciences, and set long-term budgets for R&D institutions. While many in the industry will welcome Labour’s pledge to listen to healthcare experts, businesses should expect policy competition from other sectors to define priorities.