PARLIAMENTARY DEBATE
Life Sciences Investment - 11 September 2025 (Commons/Commons Chamber)

I start by welcoming the hon. Member to her new role. I wanted to do that yesterday, but time ran away from us during questions. I am answering this question on behalf of the Secretary of State.

As a significant life sciences company that employs more than 1,600 people and plays a leading role in delivering new treatments for diseases such as cancer, Merck—known as MSD in the UK—is a valued partner to this Government, and a key player in the life sciences ecosystem. MSD’s decision to not progress its investment in King’s Cross—a commercial decision for MSD—is therefore deeply disappointing.

King’s Cross is a shining example of the strengths of UK life sciences clusters. It is one of the biggest in Europe, employing more than 60,000 people in the area. It has had investment from major life sciences companies, including Novo Nordisk, GlaxoSmithKline and AstraZeneca. It houses world-leading institutions, such as the Francis Crick Institute and the Wellcome Trust, as well as some of the country’s leading biomedical research centres. University College London hospital, Great Ormond Street hospital and Moorfields eye hospital are also based there.

We are proud of this industry; it has delivered great things for our country in the past, does so today and will continue to do so in the future. That is why life sciences is one of the eight priority sectors in the industrial strategy, and is backed by £2 billion of public investment to enable it to grow, lead the world and make great discoveries, such as personalised cancer vaccines and the new test for Alzheimer’s disease. MSD’s investment in the area would have enhanced the sector’s status further, and the fundamentals of the UK market are actually more advantageous today than when it made the decision to invest in this project. What has changed are the US and international fundamentals.

The UK has become the most attractive place to invest in the world, but of course, there is still a lot more for this Government to do. The academic environment in the UK continues to produce innovative ideas, and the talent to run with those ideas, which attracts foreign investment. The environment for research is outstanding; we have great academics; and the NHS provides a research platform that is second to none.

The decision is in part due to a broader effort by MSD to ensure that the company is optimising its investment and focusing its resources on its key drivers of growth. As such, it is not continuing its job discovery operations in the UK. The company has recently announced in its quarterly report that it is to cut $3 billion a year from its operating costs, resulting in a significant impact on its share price. That is compounded by an ever more challenging and uncertain global economic situation as regards trade and tariffs.

The problem with NHS medicines goes back 15 years— I wonder who was in charge over that period. Spending on NHS medicines has fallen from 15% to 9% in that time, and the last joint agreement on medicine prices by the sector and the previous Government was in 2023. We are living with the consequences of under-investment by the previous Government, who took their eye off the ball when it comes to NHS medicine investment. My right hon. Friend the Health and Social Care Secretary made a £1 billion offer to the sector in the summer. However, the Government also recognise that we need to do more to support and grow our life sciences sector. We have already started delivering on the work of investing £600 million in the health data research service alongside the Wellcome Trust, and are committing up to £520 million for life sciences innovation and manufacturing, unlocking billions of pounds. We continue to work closely with the sector to unlock growth and ensure life-changing treatments and technologies for this innovative sector.

MSD will continue to be a key investor in the UK. I welcome its continued investment in clinical trials, and its significant partnerships with our institutions, such as Our Future Health. MSD will continue to employ 1,600 people. We remain closely engaged with MSD as we take forward the life sciences sector plan and the 10-year NHS plan.

Thank you for your advice, Mr Speaker. I am on my last sentence. We will continue to explore opportunities to partner with MSD further and build on our long-standing relationship.

I am grateful to the shadow Secretary of State for bringing the urgent question to the Chamber, as this is an incredibly important issue. Let me answer some of the questions—I think there were some questions in there.

The shadow Secretary of State asked what message America has given to the Government, but the message was from Merck in its quarterly report just a few months ago, when it had to cut $3 billion a year from its operations. That is a significant amount of money, and the company’s share price reflected the significance of that announcement. There is no doubt that MSD makes the world’s most profitable and popular cancer drug, which goes out of patent in 2028. It said in the quarterly report that that is causing some pressure with its share- holders. The US trade deal, which the shadow Secretary of State mentioned, said that we would use best endeavours to improve the conditions for US pharmaceutical companies in the UK, and the tariff for pharmaceutical companies to the US remains at 0%. The EU has a 15% blanket tariff.

In terms of NHS medicines, it is a common theme that shadow Secretaries of State come to this Chamber and bemoan the state of the economy and what has happened in the NHS. Waiting lists are falling from the record levels they were at. Satisfaction with the NHS when we left government in 2010 was at its highest level ever. It is now at its lowest—

There is no doubt that spending on NHS medicines has fallen from 15% to 9%, which is part of the problems in the pharmaceutical industry. My right hon. Friend the Secretary of State for Health and Social Care made a £1 billion offer to the pharmaceutical industry over the summer, but it chose not to vote on that, so he withdrew from negotiations.

We are trying to clear up the mess that has been left after 14 years of Conservative government. The shadow Secretary of State should realise that that mess is deep and wide, and it will cause problems in the sector, but as the Health Secretary has stated a number of times, including when he made that £1 billion offer, he is trying to resolve some of these underlying issues.

I thank the Chair of the Select Committee for that constructive approach, and I look forward to the session on Tuesday to examine this really important issue. She mentioned the life sciences sector plan, which is really important. It comes with significant investment in research and development, improving clinical trial performance, and moving money and support from other key sectors into the sectors that are in the industrial strategy. Life sciences benefit from that. There is £2.5 billion a year going into life sciences from this Government, and that contributes to the £9 billion that the private sector invests every year.

As the Chair of the Select Committee will know, the Chancellor gave the most generous settlement for research and development ever in the spending review last year, with £86 billion over the spending review period. That is to support the industrial strategy, of which life sciences is a key sector. I know from companies in my constituency that the sector is growing and needs more support, and we are determined to deliver that.

I am grateful to the hon. Gentleman for raising those points. It is important to lay out to the public and to the House that MSD will continue to employ 1,600 people and be a key part of the life sciences sector. There are many companies that are investing in this country—Moderna, BioNTech, Isomorphic Labs—and in my own constituency, Roslin CT is expanding at such a great pace that it cannot keep up with the amount of space and the wet lab facilities it requires. Those are all the challenges that we have to try and deal with.

I gently say to the hon. Gentleman: the second sentence of his contribution was about the national insurance increases for employers and the fourth was about spending more money on R&D and life sciences. They cannot both be true. If we want to spend money on our priorities—political parties will have different priorities—we have to raise that money. We cannot have it both ways. The message to the industry is: this is the best place in the world to invest. Bring your investment here and this Government back you through an industrial strategy and a life sciences sector plan.

I pay tribute to my hon. Friend for his work with the university in his constituency in a whole number of areas. All who represent university towns— I do as well—know that there is significant investment going into research and development and the life sciences, because that is the future for this country.

This country is committed to growth, and I assure my hon. Friend that I will do everything I can in this role to ensure that we invest in that. I gently remind the House again that the spending review saw the largest ever settlement for research and development in this country at £86 billion. That says to the industry: we are open for business; come and invest here and put life sciences at the top of that investment.

I say to the right hon. Gentleman, for whom I have the utmost respect, that in the first part of his question he quite rightly promotes the wonderful work that is going on in his constituency at the Discovery Park and then says that everything is doom and gloom. That is not the case. This Government are investing in research and development to the tune of £86 billion, we are investing in the life sciences—it is one of the eight key sectors in the industrial strategy—and I hope that the business park in his constituency benefits fundamentally from that. I merely repeat that MSD is not leaving the UK. It will still employ 1,600 people here and be the cornerstone of research in this country.

I pay tribute to my hon. Friend for her work, unpaid, at the research institute. It will be good to hear from her about what she sees from inside the sector. She raises, I think, the most important point in any debate about science, research and development and life sciences in particular in this country: we have world-class institutions and companies and they are made so by the world-class scientists and academics that work within them. We should cherish that, we should grow it and we should have more

The right hon. Gentleman was a Treasury Minister, so he understands some of the issues involved here. I would merely point him to the report MSD released to its shareholders for the first quarter, in which it said that it had to divest from $3 billion a year in operating costs—that is a huge part of its operating agenda. It is a geopolitical issue as well as a commercial decision.

At this stage, I am not aware that there will be any downside to the entirety of the ecosystem that revolves around the King’s Cross area of London. This decision has obviously come very late to the Government, and we will work with MSD on the future. However, as we have heard from my hon. Friend the Member for Gravesham (Dr Sullivan), there is a very bright future for this particular cluster, and for all the other clusters we have heard about from other Members across the Chamber this morning.

I am grateful to my hon. Friend and would be happy to take him up on that meeting to hear about his experience directly. He raises the big issue around the legacy left by the previous Government after 15 years of underinvestment in medical pricing. The Health Secretary made a £1 billion offer to the pharmaceutical industry over the summer, which the pharmaceutical industry decided not to vote on, so it was withdrawn, which was disappointing. The last deal was done in 2023 under the previous Government. This is a long-term issue that must be resolved.

Very simply, the life sciences sector plan has been set out to give the industry certainty over the longer term that this Government are serious about the investment that both we and the industry will make in the sector, with £2.5 billion a year from this Government and, at £86 billion, the largest settlement for R&D ever in the spending review. I hope that gives reassurance to my hon. Friend’s constituents and to the life sciences companies in her constituency and around the region that this Government are serious about backing them.

I visited RoslinCT in my own constituency last Friday. The life sciences sector in Scotland is indeed buoyant and flourishing. There are lots of opportunities for it to expand. It is probably a dividend of the Union.

I am very happy to do so. I think that is my third invite already this morning. The question and the invite to Newcastle-under-Lyme demonstrate the thriving life sciences sector all across the country. I can give my hon. Friend an assurance that we intend to back the life sciences sector. Although the decision from MSD in relation to their new building at King’s Cross was incredibly disappointing, the sector is a thriving one, and many companies are investing and growing very quickly.

The hon. Member talks about yet more spending but with no idea of how the revenue would be increased. This Government had to make some incredibly difficult decisions in order to balance the books to give that stability in the economy so that we could invest in R&D, including in the life sciences. The NHS 10-year plan is moving from treatment to prevention, which require medicines; moving from hospital to community, which will require medicines; and moving from analogue to digital, which will enhance and better target medicines for patients. That is just one example of what we are doing in the NHS to improve our life sciences sector. It is a key part of the industrial strategy—one of the eight key sectors—and we intend to back it through the strategy.

In the interests of time: yes.

I have just been working with the Department of Health and Social Care to try to bring that forward. I do not know the exact answer to the right hon. Lady’s question. If I knew the answer, I would give it. I do not, so I will write to her.

I am tempted to say no, just to see what reaction that gets! But of course I will meet any hon. or right hon. Member across the House to discuss the life sciences sector. Whether we are talking about the north, south, east or west, including in my own constituency, the life sciences play a key role and will continue to do so.

I congratulate the hon. Gentleman’s wife on what she does in the sector—she is the only one in the family with a real job. That shows the depth and breadth of the sector across the country; everyone will know someone who works in it. We have £86 billion from the spending review going into research and development, and £2.5 billion backing the life sciences sector plan. Economic and geopolitical issues are of course affecting the pharmaceutical industry at the moment. As I said in my opening remarks, MSD’s quarterly report said that it had to take $3 billion out of operating costs over the next few years; unfortunately and regrettably, this decision is part of that plan.

I would say to life sciences students in the fledgling part of their career that it is a career they should be in for the long term. Life sciences is the future, which is why it is one of the eight key sectors in our industrial strategy. The news the Government have had today on MSD’s commercial decision is incredibly disappointing, but lots of wonderful stuff is going on in the sector, so we should not talk it down. Moderna is investing more, BioNTech is investing more, Isomorphic Labs is investing more, and RoslinCT in my constituency is investing more. Right across the Chamber today we have heard about the companies that are investing more in life sciences. It is a growing industry, so I say to fledgling academics and people who want to get involved in the industry: get in there.

Our workforce are the very best in the world, and our world-class institutions are made world class because of that world-class workforce. This is the best place in the world to invest at the moment. We are in discussions with the US in respect of the pharmaceutical industry and the tariffs in the EU-US economic deal. Lots of positive stuff is going on in the industry, and if we are to send out one message to the industry from the House today, it is that the industry is thriving. It is one of the eight key sectors in our industrial strategy and this Government back it. We are backing it with money, with our strategy, and as a whole Government.