Big pharma can boost Britain: Labour must not let our flagship firms drift away, says RUTH SUNDERLAND
One area where the UK still performs well on an international stage is pharmaceuticals, led by AstraZeneca and GSK, both of which reported their first-quarter results yesterday.The Labour government recognises this, or at least pays lip service: life sciences are one of the high-growth sectors in its industrial strategy.However, at the same time, socialist politicians also managed to create a belief among pharma bosses that the UK is a poor place to develop innovative drugs, and that they were viewed by senior Labour figures as rip-off merchants profiteering from patients.This perception was allowed to take root and despite moves by the Government to stop an exodus of investment, it will not rapidly be reversed.There were damaging rows over NHS pricing, which the industry argued has led to too many new treatments being rejected as too expensive.Anger fomented about an increase in the percentage of revenues companies were forced to reimburse the NHS if its spending on their drugs went above a cap. Breakthrough drugs: There have been damaging rows over NHS pricing, which UK pharmaceutical firms argue has led to many new treatments being rejected as too expensiveBoth issues have been tackled as part of a deal with the US last year, which also involves zero tariffs on pharma exports from the UK to the States for at least three years.Some projects on ice, such as Astra’s £200million expansion in Cambridge, have been taken out of the freezer. Others, including a £450million plant on Merseyside, were scrapped and have gone elsewhere.Astra and GSK see the US and China as attractive markets to invest.The UK is small fry by comparison and it is inevitable that drug company bosses will look beyond this island for growth, but their treatment at the hands of the Government has not helped.The NHS and Big Pharma should be able to work together for all our benefit, in collaborations such as the research by GSK into whether its shingles vaccine also reduces the risk of dementia. If Britain’s pharma flagships drift away, it will be a tragedy.Wealth of woeLloyds Banking Group’s handsome profits haul, largely attributable to higher interest rates, unfortunately does not reflect a robust outlook for the British families and businesses who make up its customer base.The bank is worried about stagflation and has cut its macro-economic forecasts due to the conflict in the Middle East.These fears are echoed at Santander UK, the British arm of the Spanish giant, which is taking over TSB.Other data point to mounting distress. The Asda income tracker shows the lowest-earning households have a shortfall of £74 a week between their income and essential spending.Insolvency specialists point to tens of thousands of firms on the brink of going under, many pushed in that direction by Rachel Reeves’ hikes in employment taxes, high energy bills and business rates.Lloyds boss Charlie Nunn’s strategy is to expand its wealth management side to cut reliance on volatile interest rate income.Is it too flippant to remark that the success of this does rather depend on Britons having much wealth left to manage?Art of financeThe Financial Times wonders out loud whether art galleries need economists.The question is a propos of academic Mariana Mazzucato’s appointment as economist-in-residence at the Whitechapel gallery in London.She will not just be thinking about how to balance the books, but about the role of art in the economy and society.The creative arts are underestimated as a strength of the UK economy and as a lever for regeneration. On Teesside, the Middlesbrough Institute of Modern Art hosts the Turner Prize this year and a derelict property is being regenerated and turned into flats for artists.It’s easy to scoff at these endeavours in a working class town but creativity can flourish anywhere: look at what Tracey Emin has done in Margate.At a deeper level, artists and writers have always produced commentary on money and morality – from Hogarth’s unsparing depictions of 18th century London to Damien Hirst’s sinister diamond skull, unveiled on the eve of the 2008 financial crisis.A better question than whether art galleries need economists is: do economists need art? To which the answer, emphatically, is: ‘Yes!’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
