Trade and Investment

Lord Kakkar Excerpts

Monday 15th June 2015 Lords Chamber

[Lord Kakkar (CB)]

My Lords, from these Benches I join in welcoming the noble Lord, Lord Maude of Horsham, to his new ministerial position, and congratulate him on a marvellous maiden speech. In so doing, I declare my own interest as one of the UK’s business ambassadors for healthcare and life sciences and as chairman of University College London Partners Academic Health Science Partnership.

I shall confine my remarks to the sectors of healthcare and life sciences. The provision of effective healthcare plays a vital role in our economy, because a healthy workforce can potentially deliver much more in terms of efficiency and productivity to the economy. Since the National Health Service’s inception, it has played an increasingly vital role in social cohesion in our country, and has stimulated the creation of a remarkable ecosystem around itself. Some four out of the top 10 biomedical universities in the world are here in the UK, as are two of the top 10 leading pharmaceutical companies in the world. We have some 3,500 small and medium-sized enterprises in the med-tech and biotech sectors, 500 of which are actively exporting.

The contribution to exports by the pharmaceutical industry is some £21 billion a year. Over the past 15 years that sector has consistently contributed surpluses to our balance of trade position, with some £1.1 billion contributed by the pharmaceutical industry in the last year for which records are available. It is an important sector in terms of the employment that it provides, with some 150,000 people employed in 100 countries around the world, and the contribution that it makes to research and development—some 25% of all R&D expenditure provided by the private sector is in the fields of healthcare and life sciences.

With regard to the med-tech and biotech industries, in the period between 2009 and 2014, when economic growth was difficult in our country, on an annual basis the med-tech sector saw a 5.8% increase in revenue growth and the biotechnology sector some 4% increase in revenue growth. In terms of employment, some 300,000 people are employed in the science and technology sector, which consistently since the turn of the century has seen a 3.7% increase in employment, frequently in very high-skilled and high-technology jobs.

It is important as we look to the future to recognise that healthcare expenditure globally is set to increase by some 5.6% per annum between 2014 and 2027. Some of the most important markets that we have strong trading relationships with will see even greater rates of growth in healthcare expenditure: for instance, in India some 15% per annum is expected over that period, China some 12% and the Middle East some 8%, so there is a huge opportunity for our nation, and for the healthcare and life sciences sectors, to contribute to meeting those important demands across the world.

The opportunities have been addressed to some extent through the work of government agencies. I declare a further interest in my role as a UK business ambassador, sitting on the board of Healthcare UK. Healthcare UK was set targets in the last financial year to achieve business wins of some half a billion pounds a year, principally focusing on those important markets of India, China and the Middle East, but was able to surpass that assistance to industry in that area, achieving business wins of £749 million in that year.

The All-Party Parliamentary Group on Global Health, of which I am treasurer, is about to publish a report that looks at the global footprint for healthcare for our country. That is an important point, because it demonstrates opportunities for the standing of our nation beyond the straightforward question of trade and investment. For instance, if one looks at contribution through overseas aid, the United Kingdom is the second-largest contributor to bilateral investment in, or contribution to, development in health around the world. If we look at our charities, there are some 6,500 charities in the healthcare, life sciences and medical research sectors, which invest some £7 billion abroad in projects, driving improvement of health but also promoting important research programmes and projects.

Then we have our university and academic sectors. As I mentioned, four of the top 10 biomedical universities in the world are based here in our country, and some 46,000 overseas students study medicine and dentistry in our 33 medical and dental schools, contributing substantially to the economy and providing opportunities for future growth as those institutions start to look abroad to deliver training and education in other countries. I declare a further interest as professor of surgery at University College London, which is actively involved in that kind of activity.

On research, in biomedical research our nation represents 1% of the world’s population, but we are responsible for 12% of all cited outputs in biomedical research around the world, and 62% of the top publications from UK institutions and authors are done in collaboration with institutions and colleagues abroad. That demonstrates the very global nature of our contribution to biomedical research and how our nation sits at the heart of many important medical research programmes and projects in healthcare around the world.

As regards the future, one of the important opportunities that might be explored is the potential for further trade and investment with regard to healthcare and life sciences with Commonwealth nations. One-third of the world’s population live in Commonwealth countries, and a recent report published by the trade policy division of the Commonwealth Secretariat has looked at the broader question of trade within the Commonwealth. It has identified that trade among Commonwealth nations at the moment accounts for some $680 billion a year, but by 2020 that will have grown to $1 trillion. There must be substantial opportunities to focus on trade with regard to healthcare and life sciences. That same analysis has demonstrated that the cost of doing trade if both partners are from Commonwealth nations is 19% less than it otherwise would have been if parties were not Commonwealth members, based on the fact that we have many common legal systems, share a language and frequently have a similar way of doing business.

All that has been achieved through the support of successive Governments; the last Government had a number of important initiatives. The Treasury report The Plan for Growth in 2011 identified healthcare and life sciences as a sector that could benefit from a more streamlined approach to regulation to open up opportunities for potential trade and investment. The Department for Business, Innovation and Skills report into life sciences, its Strategy for UK Life Sciences, and the support through the announcement by the Prime Minister in December 2011 of a joined-up life sciences strategy for our country, identified that the areas of healthcare and life sciences were particularly attractive for future investment and future government attention, because they generate very frequently high-tech, highly skilled jobs and disproportionately were in a position to contribute to growth in the economy.

Then we have the Innovation, Health and Wealth report from NHS England and the subsequent NHS Five Year Forward View, which have identified partnership between universities, the NHS and pharmaceutical, med-tech and life sciences sectors in driving growth opportunities more broadly for our economy, while ensuring that our country remains the most favoured nation in the world for inward investment in healthcare and life sciences, and bringing innovation rapidly to our population and potentially improving outcomes in the NHS.

What approach will this Government take towards the many different strands of activity and initiatives that have now been initiated by government to bring them to a single, co-ordinated place so that the real benefits that could be achieved through effective targeting of investment by Her Majesty’s Government to promote trade and investment in healthcare and life sciences can be achieved during the lifetime of this Parliament? What view do Her Majesty’s Government have on focusing, particularly in the Commonwealth, on opportunities in trade and investment in healthcare and life sciences?