Labour's tax rises could damage economy, says UK pharma

The UK pharma industry has welcomed the Labour party's pledge to retain close links with the European Medicines Agency after Brexit - but says manifesto plans to decision to raise money through higher corporation tax would be damaging.

The Association of the British Pharmaceutical Industry (ABPI) is providing a commentary on all the major parties' manifestos in a bid to get them to develop pharma-friendly policies, and welcomed a commitment to increase financial support for the NHS and funding for new medicines.

We will give #OurNHS an extra £37 billion, including £10 billion to ensure buildings and IT systems are fit for the modern day. #ForTheMany pic.twitter.com/g8RxpY6Wgp

— Jeremy Corbyn (@jeremycorbyn) May 15, 2017

At the moment a Labour government after 8 June looks virtually impossible, however: the latest ICM poll shows the Conservatives have a 20-point lead with 48% of voters.

Labour has 28% of the vote, and the Lib Dems have 10%, according to the poll.

Jeremy Corbyn hopes to climb this electoral mountain with a distinctive manifesto with left-wing policies such as renationalisation of rail companies, and a transition to a publicly owned energy system.

In the manifesto there is also a pledge invest £37 billion in the NHS and a pledge to end "rationing" of new medicines - an issue with which the ABPI has become increasingly frustrated.

But the manifesto also promises tax increases, including corporation tax, to fund a public sector spending programme, a policy which the ABPI opposes.

“The pharmaceutical industry is concerned that Labour's headline pledges on taxation – such as increasing corporation tax – may have unintended consequences that could undermine the UK's global competitiveness.”

While the manifesto accepts the referendum result, Corbyn has pledged to try and strike a deal with Europe over Brexit, instead of the “hard Brexit” approach taken by Theresa May and the Conservatives.

Health secretary Jeremy Hunt has already indicated that the Conservatives want to quit the European Medicines Agency entirely to avoid being subject to European Court of Justice decisions, although the UK regulator could still recognise decisions taken by the EMA.

But the wording of Labour's manifesto suggests that membership of the EMA could still be possible despite Brexit.

The party “will seek to maintain membership of (or equivalent relationships with) European organisations which offer benefits to the UK such as Euratom and the European Medicines Agency.”

It also promises to try and retain funding from EU projects such as Horizon 2020 – a science fund which the UK has benefited from on over the last few years.

An ABPI spokesperson said: “The pharmaceutical industry welcomes the Labour Party's commitment to ensuring patients get fast access to new medicines through a NHS boosted by increased levels of funding.”

"The ABPI welcomes the Labour Party's intent to negotiate an ongoing co-operative relationship between the UK and the European Medicines Agency," the spokesperson added.

The Conservative party are expected to unveil their election manifesto shortly, and Theresa May has hinted that it could include pledges to increase NHS funding. However the party is unlikely to suggest tax rises, without which any new funding for the health service is likely to be much lower than the £37 billion pledged by Labour.