What does the General Election mean for UK Health and Life sciences

Prime Minister Rishi Sunak wrong-footed political commentators and analysts yesterday by calling a General Election on the 4th of July. The decision looks to have been driven by better economic indicators and hope among Conservative electoral strategists that this timing enables them to establish the economic recovery as the key issue.

But whilst recent economic performance has come alongside a slight 3-point contraction in the polls , Labour maintains a substantial 20-point lead overall. The end of 14-years of Conservative government therefore appears likely, although a Labour majority will still require a historic 12.7% swing.

Political leaders will now switch fully to campaign mode and the coming weeks will see a focus on retail policies that address voters’ key concerns. For example, Sir Keir Starmer has already committed to deliver 40,000 more NHS appointments every week and similar pledges are expected from the Conservatives as party manifestos are finalised.

As ever, the NHS will remain a key voting issue, with polling indicating that improving the health service is the number one priority that the public want a future government to address during their first 6 months in power .

Meanwhile, officials, including Civil Servants, NHSE and regulators, will be operating under pre-election guidance and will therefore limit public engagements or new policy announcements in the coming weeks.

The next few weeks will be exciting, but it is important to remember that once a new government is in power, the same challenges will remain.

Healthcare spending is still rising unsustainably, NHS performance and productivity is falling, and health outcomes are declining, leading to growing public dissatisfaction . And, with 2.8m people out of the labour market due to long-term ill health, economic growth and fiscal headroom will remain extremely challenging .

As such, policy priorities and programs are expected to remain broadly consistent, even with a change in government. If Labour were to win, we can expect the following:

1. Even with an expected NHS funding commitment during the campaign, it’s unlikely that there will be any immediate ‘turning on of the funding taps’. Indeed, Labour have broadly committed to existing government spending plans and have ruled out major tax rises or borrowing to fuel public spending. Instead, they are betting big on growth to create fiscal headroom for future spending in public service reform, while investigating the potential of a new PFI-type arrangement to bring more capital into the system.
2. Productivity will remain critical. Labour is likely to uphold the £3.4bn commitment in the March Budget for productivity-enhancing innovation from 2025 onwards . However, they will shape how this money is spent to align with their own policy priorities.
3. The UK Life Sciences Vision is also expected to remain. Labour’s own Prescription for Growth sits neatly underneath it, and key commitments like increasing R&D spending to 3% of GDP are positive. Finally, Labour have demonstrated a supportive stance on Industrial Strategy and state intervention, as evident in Rachel Reeves’ Securonomics , and we may therefore see more incentives and subsidies in due course.

At Newmarket, we will be keeping a close eye on the General Election as campaigning continues, and we will continue to support our clients to effectively navigate the ever-changing UK health and life sciences landscape.

Co-authored by:

• Paul Blakeley (Strategic Government Affairs Director, Newmarket Strategy)
• Janie Mullaney (Strategic Government Affairs Consultant, Newmarket Strategy)

[1] https://www.telegraph.co.uk/politics/2024/05/20/labour-poll-lead-falls-tories-general-election/
[2] https://www.standard.co.uk/news/politics/nhs-crisis-labour-keir-starmer-prime-minister-fix-priority-b1159128.html
[3] https://www.nuffieldtrust.org.uk/news-item/public-satisfaction-with-the-nhs-what-do-the-findings-from-the-2023-british-social-attitudes-survey-tell-us#:~:text=Fewer%20than%20one%20in%20four,groups%20and%20across%20all%20services.
[4]https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/januarytomarch2024#:~:text=2.,to%20have%20increased%20by%200.2%25.
[5] https://www.kingsfund.org.uk/insight-and-analysis/blogs/spring-budget-2024-health-care-services#:~:text=One%20of%20the%20early%20results,NHS%20technology%20and%20digital%20transformation.
[6] https://www.bioindustry.org/static/6d6bb7a2-d7e5-4abc-bad4ee8fc02c1c17/Labours-plan-for-the-life-science-sector.pdf
[7] https://labour.org.uk/updates/press-releases/rachel-reeves-securonomics/

Photo source: Schools Week