Investing in the Future
23 October 2024
How Fiscal Stability and Targeted Investment Can Transform the Health and Life Sciences Sector
At the recent Investment Summit, the Chancellor Rachel Reeves outlined the Government’s vision for the UK’s investment landscape, whilst reminding us that restoring fiscal stability would be the foundation of her first Budget on October 30.
Reeves stressed that a partnership between the government and business is essential for building a resilient economy. She stated, “When we said we would end instability, make growth our national mission and enter a true partnership with business we meant it.” This collaboration holds significant potential for sectors like health and life sciences, which are poised to drive innovation and create high-skilled jobs across the UK, as highlighted in a recent letter published by 5654 & others, advocating for leveraging these sectors to spur economic growth.
Channelling pension fund money into growth capital
The Government is actively promoting the strategic investment of pension fund capital into high-growth sectors such as health and life sciences. By leveraging the substantial capital within pension schemes, this initiative aims to boost advancements in healthcare technology, pharmaceuticals, and biotechnology. By directing these investments into high-potential projects, hopes to spur innovation, create jobs, and strengthen the UK's leadership in life sciences. This initiative not only aims to deliver robust financial returns for pension holders but also to ensure that the benefits of medical advancements are accessible to all, contributing to a healthier population and a more resilient economy.
British Growth Partnership
The Government also announced the British Growth Partnership. Managed by the British Business Bank, this initiative will channel funds into venture capital and innovative companies, supported by a cornerstone Government investment. As part of the Mansion House Compact, this new fund will allow smaller pension funds, or those opting not to create their own UK-focused Defined Contribution investment vehicles, to pool their capital. The goal is to raise hundreds of millions of pounds, with deployment expected by the second half of 2025. The health and life sciences sector is well-positioned to benefit from these funds, as it could drive economic growth, create jobs, and support investment in cutting-edge medical innovations that can be scaled into commercial success and deliver tangible benefits for patients and communities.
The Launch of the National Wealth Fund
The third key element of the Chancellor's speech was the announcement that the UK Infrastructure Bank will now operate as the National Wealth Fund (NWF). This strategic move marks a new chapter for long-term investment in the UK. The NWF is designed to channel investments into projects that will foster innovation in advanced industries and infrastructure development. For the health and life sciences sector, this will support the wider eco-system and UK wide initiatives to build science parks and related infrastructure that can provide the foundations to advance the world leading science and technologies being developed here.
Conclusion
Taken together the Mansion House Compact, British Growth Partnerships and NWF, are all positive drivers for the health and life sciences sector in the UK. However, these investments should only be seen as a starting point. Unlocking the full potential of the sector will require a stable economic environment, including a pro-growth tax system, to ensure that both domestic and international investors feel confident in committing their capital to the UK, and not elsewhere. This perspective is further underscored in a recent letter referenced above, advocating for strategic leveraging of the UK’s healthcare and life sciences sector to drive economic growth, which can be found here.