Archive for March, 2023

A polarised society: will political chaos push Israel’s tech ecosystem to the brink?

Posted on: March 28th, 2023 by Morgan Arnold

Israel has been facing its biggest protests in over a decade. Yesterday, a general strike was called, with schools and universities closed and Tel Aviv’s Ben-Gurion airport, its international gateway, forced to shut. Widespread civil action has been prompted by a highly controversial set of judicial reforms that would shift power away from the courts and strengthen its executive.

In what is an already polarised society, Netanyahu’s government has been under growing pressure both domestically and internationally to back down and change direction. Especially if the country’s longest-serving Prime Minister wants to keep an already fragile governing coalition intact. On Monday, a month-long delay to the reforms was announced to allow time for discussions.

Israel’s tech ecosystem has been a beacon of strength for the country over the last decade. Tel Aviv-headquartered firms rank third in terms of total VC investment in the EMEA region in 2022, after London and Paris and ahead of Berlin, a report from Dealroom said last week.

If start-ups haven’t faced enough of a battering with falling valuations, funding rounds drying up and the collapse of Silicon Valley Bank, this political turmoil is set to further dampen the outlook for the country’s most promising firms.

Cloud security firm Wiz said last week that it will not be transferring any of the proceeds from its latest $300m funding round to the country while the political uncertainty continued. There’s even talk of businesses relocating to alternative, bourgeoning tech hubs in Europe.

This is an unnerving time for the country’s entrepreneurs and tech community. Many will have been waiting to see if the civil action would force the government’s hand on a U-turn and for calm to return. But this saga risks scarring the reputation of the country’s tech credentials in the long term. Investors are likely to shy away from deploying further capital into Israeli start-ups and businesses may find it difficult to plan for their future success amid such instability.

Communicating effectively during turbulent political conditions

Businesses headquartered, or with a significant presence, in Israel will be watching the coming weeks unfold closely. Eynat Guez, the CEO and co-founder of Papaya Global, a payroll software unicorn, was the first to publicly criticise the reforms in January. But others, particularly international firms with large Israeli offices, will likely decide against any public declarations of support and remain neutral.

Regardless of whether or not to take a stand, from our experience working with firms around the world, we know that many will be keen to continue business-as-usual communications and marketing activity. However, they should be mindful of the external backdrop they are operating in and consider how stakeholders will view the appropriateness of messages at a time of political crisis.

With heightened feelings amongst audiences, businesses should also consider the potential for their communications to become unintentionally politicised and used as leverage by political forces, risking reputational damage for being seen to take sides.

Finally, but no less important, setting the right tone in internal communications is crucial. Employers should respect employees’ right to protest and show understanding towards the weight of feelings that will have taken hold amongst workers.

MHP Group launches new 30 To Watch Breakthrough Award in partnership with News UK

Posted on: March 28th, 2023 by Keith Gladdis

One of the founding principles of the MHP Group 30 To Watch Journalism Awards is that they should always be free to enter.

We recognise that working in the media is often poorly paid and that cost should be no barrier to celebrating great young talent.

Our approach has seen 30 To Watch grow over the last 12 years into an event that regularly has more than 400 entries from print, broadcast and digital journalists around the world.

And our winners like Sophy Ridge at Sky News, Harry Cole from the Sun and Ollie Shah at the Sunday Times have gone on to become some of the most influential journalists in the industry.

However it is becoming increasingly more difficult to make a career in journalism, especially for those from less well-off backgrounds.

In his keynote speech at last year’s event, John Ryley the Head of Sky News said: “Our newsrooms do not reflect the society on which they report.

“Our newsrooms tend to be too white, too middle class, and just too similar.”

That’s why MHP Group is proud to launch our new Breakthrough award in partnership with News UK.

The award is open to all 30 To Watch entrants who did not go to university. They might have entered the industry through an apprenticeship, a trainee scheme or through sheer bloody mindedness.

Many news organisations are already running schemes to encourage more social mobility in the news room.

The Breakthrough Award is designed to recognise the dedication and resilience of young journalists who have entered the industry through non-traditional routes.

Our panel of 20 judges, led by John Ryley, include senior journalists and editors from across the media industry.

Anne Alexander is Head of Politics at ITV Good Morning Britain and a 30 To Watch judge.

She said: “I’m delighted the Breakthrough Award has been added to the list of categories this year.

“It is so important that journalism is open to all, and we must recognise and encourage the range of routes into the profession which do not necessarily involve having a degree.

“There is so much untapped talent out there, and there has never been a more important time for us all to ensure journalism really reflects the society we serve.

John Stevens won a 30 To Watch award in 2016 when he was a young reporter at the Daily Mail. He is now Political Editor at the Daily Mirror and a 30 To Watch judge.

He said: “The 30 To Watch awards are a great way to recognise young and talented journalists who are already having a big impact and helping to reshape our industry.

“I’m particularly excited about the new Breakthrough award because it’s important to attract diverse talent into our newsrooms.”

30 To Watch judge Anthony France, Senior News Correspondent at  the Evening Standard said: “I’m delighted to be judging the new MHP Breakthrough Award. There are so many routes into journalism, including through local papers like I did, and it’s important that we celebrate the best talent from all backgrounds”

News organisations are already innovating when it comes to encouraging diverse talent into the newsroom and better reflecting their audience.

Former 30 To Watch winner Nadine White has become the UK’s first dedicated race correspondent at the Independent and a range of apprenticeships and trainee schemes are beginning to emerge.

We hope the 30 To Watch Breaththrough award will help celebrate more diversity in journalism and lead to more news organisations encouraging social mobility in the newsroom.

To enter 30 To Watch click here

A New Era: Humza Yousaf elected leader of the SNP

Posted on: March 27th, 2023 by Morgan Arnold

The establishment fights back

The self-styled continuity candidate, Yousaf was undoubtedly Nicola Sturgeon’s preferred successor. Popular with SNP members, his social and economic views stand in stark contrast with Kate Forbes who proposed a radical departure from the Sturgeon playbook. While she lost, it is important to note that a sizeable chunk of SNP members felt that her more socially and economically conservative approach was desirable – the nationalist claim that the SNP is somehow a beacon of progressive politics has taken a battering in this contest. However, with the party machinery behind him, it was Yousaf’s contest to lose.

One happy nationalist family?

Yousaf’s first task is to heal the SNP after a bruising contest. The carefully crafted coalition which constitutes the party, tended to assiduously by Alex Salmond, was fraying well before Sturgeon resigned and those divisions exploded for all to see. The party also lost its chief executive – Sturgeon’s husband – and its head of communications during an unseemly spat about the actual number of members it has, whilst there is an ongoing fraud investigation into the party’s finances. Does he have the skill – both political and personal – to patch it up? Plenty remain unconvinced.

Another challenge is keeping the Scottish Greens, the SNP’s erstwhile Holyrood coalition partners, on side. They have said they will step back from their agreement if Yousaf fails to challenge the UK Government on its recent decision to deny royal assent to controversial gender reforms. Meanwhile, in the background, the shadow of Alex Salmond looms large; he will revel in making life difficult for Sturgeon’s chosen pick.

A First Minister for all Scotland?

While popular with SNP members, Yousaf is decidedly more marmite amongst the broader Scottish population. Polling during the campaign – after the kerfuffle around Kate Forbes’ religious views – still found that voters preferred her to Yousaf; she had a favourability score of -8 with Yousaf on -20. One in five Scots view Yousaf positively which is less than half the favourability of Nicola Sturgeon.

Much of this is down to what can generously be described as a mixed record as a minister. Indeed, Yousaf seemed to spend most of the campaign apologising for things which have happened in the Scottish NHS under his watch. When Justice Secretary, his Hate Crime and Public Order Bill achieved the unique feat of uniting fans on both sides of Glasgow’s bitter football divide in condemnation and when he was Transport Minister, ScotRail was rapidly christened “ScotFail”. He has also had a hand in a ferry procurement fiasco which has seen hundreds of millions of public money spent on two rusting boats which are unlikely to sail anytime soon, depriving Scotland’s islands of a vital link to the mainland.

Alongside this, Yousaf can be gaffe prone; when Transport Minister, he was caught by police for driving a friend’s car without insurance and during the campaign, asked a group of female Ukrainian refugees “where all the men where”, with one having to point out that they were still at home, at the front.

A Labour revival?

During the campaign, one excited Labour source was quoted in The Times as saying “I hope Humza wins as he is f***ing s***e”. Conventional wisdom has it that SNP woe means Labour gains, and it is likely at the next General Election the SNP will lose some seats to Labour. However, Humza Yousaf will likely be more appealing to voters from the urban areas of Scotland than Kate Forbes could have possibly been. It would though be a mistake for Labour to think Sturgeon leaving the scene means victory in Scotland is inevitable; they need to start coming up with meaningful policies which distinguish them from the SNP on the economy and public services. However, the crucial battle in Scottish politics is now between Yousaf and his Labour counterpart Anas Sarwar, with both men educated at the same Glasgow private school.

What will business be thinking?

Promises of continuity from Bute House will likely chill the business community in Scotland given their poor relationship with Nicola Sturgeon. Yousaf has made vague promises around delivering a “wellbeing economy”, putting him at odds with Forbes who was more focused on driving growth. Yousaf – who is firmly from the activist wing of the SNP and with minimal corporate inclination or experience – gave mixed messages during the campaign; he scolded bigger businesses for their hesitance about the Scottish Government’s bottle deposit return scheme, yet said he would review proposed changes to alcohol advertising regulation. Yet, despite his victory, drams will not be getting poured in boardrooms of Edinburgh and Glasgow if he continues Sturgeon’s tendency to focus on the vibes rather than the actuality of economic policy. 

Independence on the table?

Yousaf has dropped Sturgeon’s plan to use the next general election as a de-facto referendum on independence. He has acknowledged there is no consistent, settled will in support for secession and in the short-term, seems unlikely to push the envelope on this.

Will Yousaf be able to be frank with the SNP membership that the promised land isn’t on the horizon anytime soon? Given Sturgeon failed to level with the membership, it is unlikely that Yousaf will either. The easiest way to shift the dial on independence would be to focus on the nuts and bolts of devolution and attempting to strike a cordial tone with the UK Government. The battle between pragmatism and populism in the SNP remains unresolved.

Top three takeaways from PharmaComms 2023

Posted on: March 27th, 2023 by Morgan Arnold

One of MHP Health’s Associate Directors Isabelle Scali spoke on the “Becoming better storytellers: how to innovate the comms mix for greater impact, engagement and cut through to key stakeholders” panel.  Below our team on the ground offer their top three takeaways from the day. 

The resolute power of storytelling in a digital world  

Even though the media world we live in has dramatically changed, the value of storytelling in ensuring campaigns and communications reach audiences in a meaningful way remains. Creating that emotional connection with audiences continues to be an essential lever to change minds, and beyond the data and expertise the pharmaceutical industry provides in abundance, storytelling continues to be where communicators really shine and add value.   

Where and how these stories are told is where innovation in communications can really happen. Today’s reality is that audiences, whether policy makers, healthcare professionals, patients or journalists, look for information and expert opinions about science and health online.  This is where content needs to live and pharma needs to have a voice.  Whether working with influencers that can help engage audiences around key issues and calls to action, to creating content that is agile and dynamic and suited to the selected channels, there continues to be many ways pharma and health communications can and should continue to be innovative. 

VPAS looms large 

Not so much an elephant in the room given how often it was referenced, but certainly a recurring theme, was the status of VPAS.  There have been intense – and tense – negotiations between the pharmaceutical industry and UK Government in recent months about how medicines reimbursement will work in the next phase of the agreement.  For comms professionals, navigating this tricky relationship and the uncertainty it is causing in the industry, whilst trying to do the day job of telling stories, engaging creatively with audiences and defining how companies present themselves externally, is a challenge.  But, as delegates were reminded, people working in pharma comms love a challenge, and those who are equipped with a good understanding of the policy environment will be best placed to meet it.  VPAS 2.0 is a ‘known unknown’ and, until that becomes a ‘known known’ the focus must be on ensuring that the comms function continues to present the huge value that campaigns bring to the access and innovation environments and how these meaningfully improve patient outcomes. 

Communicating with authenticity

Throughout the day, we heard reccurring themes of managing risks and opportunities related to sustainability, diversity and inclusion, and regulation – themes which delegates were reminded must be channelled into the day-to-day production of comms to communicate with authenticity.  

Speakers throughout the day explained that diverse representation in campaigns and communications helps to ensure that the needs and perspectives of different patient populations are rightly taken into account. Coupling this with demonstrating a commitment to sustainability, pharma companies can build trust with consumers and stakeholders through communications, leading to the development of more effective and inclusive healthcare campaigns. The companies that do take a proactive approach to managing environmental and social risks, and extend these into their communications campaigns, are almost always better positioned to avoid reputational damage, regulatory fines, and other potential negative impacts on their business. 

If you’re interested in finding out more about MHP Group’s comms offering, get in touch via our website. 

Necessity or marketing gimmick: should investment companies shun ISA season?

Posted on: March 24th, 2023 by Morgan Arnold

A fixture in the calendar for most personal finance journalists, PRs and marketing teams, from February to April announcements of new offers, discounted rates and sign-up bonuses hit consumers’ inboxes on almost a daily basis, alongside the well-worn warning to use your annual ISA allowance while you can.

But is it really an opportunity for investment firms to reach a rapt audience with their propositions? Or is it a waste of time, requiring huge resources to cut through in arguably the most competitive period each year for share of voice? Or is the truth somewhere in the middle?

Lies, damned lies, and statistics

Whether or not ISA season is a success for investment companies depends on how you look at the data, and how much you read into it. Last year, the Investment Association heralded ISA savers pouring a net £934m into retail funds in the 2022 season, against a backdrop of record outflows in Q1 in total. Positive on the face of it. Yet this was half the level seen in 2021. And in 2019 and 2020, net inflows in the period did not top £200m. And yet, even if the evidence suggests ISA season does produce a bounce, is that “new money”, or simply saving that is being pulled forward?

The theory behind ISA season is fairly straightforward. The deadline of the end of the tax year, combined with the limit investors can place in an ISA in a given tax year, presents a natural impetus for investor action – and an opportunity for awareness-building campaigns from firms looking to target investors when they are most likely to invest.

Whether that theory stands up in practice is again debatable. Perhaps for high-net-worth individuals.  But with ISA limits now standing at £20,000 a year and inflation taking its toll on disposable income, mass market savers are far less likely to be concerned about using their full allowance. And for investors, chucking in a large lump sum at the end of a tax year means they don’t benefit from pound cost averaging – a key way to navigate market volatility.

What does this mean for ISA season comms strategies?

From a media perspective, ISA season is again a dual-edged sword. On one hand, the concerted focus in personal finance sections and dedicated sections in nationals and consumer titles, supported by an advertising peak, means there are more opportunities to discuss your platform, trusts or funds in the run up to the tax deadline. But the competition is at its toughest.

You will have to work harder to cut through the noise, either through exceptionally creative campaigning and/or more investing heavily to grow your share of voice as others do the same. But if you have not built trust in your brand in the rest of the year, or consistently engaged with media to build positive relationships, you are already at a disadvantage, and your return on investment in the period will be lower.

So, is ISA season dead? Not quite. Should investment companies shun it? Possibly. It depends on the firm, the wealth of customer they are seeking to acquire, the resource it has at its disposal for the year ahead, and its broader marketing priorities. But one thing is clear: ISA season should not be the be-all and end-all of the annual marketing plan. As investment companies know all too well, it does not do to put all of your eggs in one basket.

Post Budget Analysis webinar round-up

Posted on: March 23rd, 2023 by Alexandra Stamp

The webinar was moderated by Tim Snowball – Head of Public Affairs at MHP Group, with panellists:

  • Paul Scully MP – Minister for Tech and Digital Economy & Minister for London at the Department for Science, Innovation and Technology
  • Lord Tom Watson – Former Deputy Leader of the Labour Party
  • Lucy Fisher – Chief Political Commentator of Times Radio
  • Steven Fine – Chief Executive of Peel Hunt

Proceedings began with polling provided by Emma Levin, Associate Director at MHP Group’s sister agency Savanta, who revealed that 49% of respondents supported the measures announced in the budget to some degree, with just 20% opposed.

The most popular measure was the extension of the Energy Bill support scheme, with 79% of respondents in support, followed by the freezing of the 5p-a-litre fuel duty cut (71%) and the 30 hours per week free childcare for one and two-year-olds (68%).

However, more than two-thirds of respondents (67%) stated that they did not believe the measures contained in the Spring Budget would be enough to help people with the rising cost of living.

Fisher began by referring to the Chancellor’s approach as “safety first”, and noted that though he wanted to frame this as a budget for growth, the growth outlook for 2025, 2026 & 2027 was worse than the Office for Budget Responsibility (OBR) forecast in the Autumn. The other theme identified was getting people back to work, reflected by announcements on childcare, pensions reform, and disability support and assessment reforms.

Fisher stated the “OBR had a very low level of certainty that these measures taken together collectively would actually work” and that in her conversations with Conservative MPs, many recognised that the budget could offer the platform for a more ambitious set of economic measures to be unveiled next autumn or spring preceding a general election. Of note, the Chancellor’s decision to maintain the income tax threshold freeze resulting in six million people placed in higher tax bands had led to a feeling of unease among the parliamentary party that moves which had led to a 70-year high tax burden are “unconservative”.

Lord Watson commended Jeremy Hunt’s performance as Chancellor, stating “he has all the right instincts” before adding he faced “an almost impossible task”. He praised the Government’s childcare offer whilst suggesting Labour’s Shadow Education Secretary, Bridget Phillipson, would not be downbeat as the plans had provided a funding benchmark from which she could advance Labour’s proposals. Lord Watson welcomed the investment in quantum computing, believing it could encourage export-led growth, adding that if he led the country, he would propose a national mission to compete with China and the US on investment in the quantum industry.

Fine welcomed the supply-side reforms and the long-term nature of the budget, asserting long-term planning was essential. He was encouraged by the OBR’s forecast that the UK would avoid recession and inflation would fall to 2.9% by the end of 2023. Furthermore, he welcomed the budget as providing a solid base for the UK to make the case in the future that it was a stable environment in which to invest and do business.

Scully referred to the budget as a reflection of the Government’s propensity for solving problems, highlighting recent wins on the Northern Ireland framework and small boats. He stressed the importance of the Government using the next year to set out a vision for Britain that would resonate with voters, noting that Chancellor and Prime Minister were building the credibility for that vision via the budget. On the topic of his portfolio, Scully underlined the Government’s focus on technological advancements that would provide a new revolution in the UK economy. On the semiconductor strategy, he said its delay was due to ensuring “it actually does something” and benefits key cornerstone industries within the UK.

On whether the raising of pensions allowances was a smart way to keep doctors in the workforce or simply a giveaway to the rich, Lord Watson stated, “it was a bit of both” and that if Labour won the next election, there would have to be some form of pension reform to retain those holding senior positions in the workforce.

On how people would feel by spring 2024, Fisher said it wasn’t likely people would feel better off by then; and that would create pressure for Jeremy Hunt to take action concerning tax cuts. Lord Watson suggested the next election would likely focus on the cost of living, and the challenge for both parties would centre around rebuilding the economy, stressing the election outcome was uncertain.

Responding to criticism over the decision to allow duty on all alcoholic products produced in the UK or imported to increase in line with inflation from August, Paul Scully reiterated the Government’s commitment to helping the hospitality industry, referencing the “Brexit Pubs Guarantee”, stating the limited fiscal headroom resulted in tough decisions. Though he expressed his support for action on business rates as part of a long-term plan.

The webinar concluded with a discussion of electoral strategy. Responding to the lack of attention given to the red wall during the budget, Paul Scully stated that nothing had changed in this regard, the Government remained focused on delivering for the UK population, including both the red wall and the blue wall.

Lord Watson added that he believed the Liberal Democrats could prove to be challengers across the South-West and return to Westminster with “30 or 40 MPs”. Labour would need to think about the arrangement required to advance progressive politics, and a new devolved arrangement to the Midlands and North of England could produce the biggest gain for political parties in the red wall.

What does the collapse of SVB mean for UK fintech

Posted on: March 21st, 2023 by Morgan Arnold

You may not have heard of Cali-based Silicon Valley Bank (SVB) until last week, so let’s explore why its downfall caused such a panic and consider what comes next for the sector that could be left behind in the sale of SVB’s UK operation to HSBC – UK fintech.

What actually happened? 

To understand how SVB met its demise, we have to go back to 2020. 

SVB had seen a significant increase in deposits from cash rich companies in the tech space who had benefited from very supportive funding conditions – bolstered, in part, by a low interest rate environment. But with interest rates low, the lender invested a large portion of the cash from these deposits into long-term US Government bonds, taking on greater duration risk in exchange for a higher return on more liquid assets.

Then came rising interest rates and the slowdown in the tech sector, which not only saw a number of companies go under and thousands lose their jobs, but also created a more challenging funding environment for those businesses looking to raise capital. The culmination of these factors led to depositors withdrawing funds at an alarming rate. The bank had invested short term deposits into long term bonds and SVB was left short on cash, apparently had not hedged its risk adequately, and was forced to sell the bonds it bought at such volume so recently. However, as a result of the Fed hiking interest rates in response to soaring inflation, the bonds had depreciated substantially in value.

The fallout: A bank run in the Networked Age

Late Wednesday 8th March, SVB’s parent company, SVB Financial Group, announced via a message to stakeholders that it was looking to raise close to $2bn in capital, to plug the hole in its balance sheet. This spooked depositors and within 48 hours enough money had been withdrawn by this bank run to cause the collapse of the bank.

In the Networked Age, information and misinformation have the potential to spread incredibly rapidly, compounding the effects of a sudden swing in market sentiment. And there’s no doubt that social media had an important role to play in the speed at which the bank run took form. Fear spread like wildfire through Twitter, Whatsapp and Reddit, causing viral panic. Michael Imerman, professor at the Paul Merage School of Business, told The Guardian that what happened to SVB was, “a bank sprint, not a bank run, and social media played a central role in that.” Even executives publicly weighed in on the developing news; Mark Tluszcz, CEO of Mangrove Capital tweeted, “If you are not advising your companies to get the cash out, then you are not doing your job as a board member or as a shareholder.” It was clear that SVB had completely lost control of the narrative.

Amid fears of contagion, quick and decisive action was taken over that weekend. Sunday 12th March saw the Fed, US Treasury, and FDIC announce steps to ensure deposits were secured in the US. Meanwhile, the Bank of England, in consultation with the UK Treasury, announced on Monday 13th March  that the UK arm had been bought for £1 by HSBC.

Effect on the UK fintech sector

It’s no great secret that the UK fintech space has endured a rocky few months following interest rate rises, with analysis by the UK Trade and Business Commission revealing that almost twice as many UK fintechs have made layoffs compared to their EU-headquartered counterparts.

In the UK, SVB was the self-proclaimed go-to banking partner for founders, entrepreneurs, and investors in the Innovation Economy. Although the bank supported an array of businesses across the technology and life sciences industries, many of whom will be amply supported by HSBC, the effects on UK fintechs and digital assets businesses are yet to be realised. 

There is some concern that HSBC’s “legacy bank” status could mean that innovation is left at the door, and it’s easy to see why when we consider the bank’s stance on crypto and digital assets. A source even told the Financial Times that crypto and digital assets businesses that have moved over as part of the SVB sale “will probably leave [HSBC], either of their own accord or being politely off-boarded,” as “life would be too hard as a customer of HSBC.”

More widely, we expect to see start-ups and scale-ups diversify their savings, and consider swinging back towards traditional banks, who will be able to tell a compelling story of stricter financing requirements and due diligence processes. In essence, the collapse of SVB has exacerbated an existing communications challenge for challenger banks: in the absence of a longstanding track record, how do they build trust with prospective customers? The need to demonstrate the robustness of their models and due diligence processes will undoubtedly be paramount to their success and perceived reliability in the future.

Only time will tell what the future has in store for HSBC’s relationship with SVB customers, but there are positives and lessons we can take from the episode. Not least among them is the speed at which the tech sector came together to campaign, and how quickly SVB was prioritised by the Bank of England, Government and ultimately HSBC – demonstrating a recognition of the value and importance of the sector to the UK economy. 

The UK Budget: a shot in the arm for the global ‘science superpower’ vision

Posted on: March 16th, 2023 by Morgan Arnold

Britain has always had key strengths in these areas. A global life sciences sector, some of the world’s leading universities and an open and highly skilled R&D workforce. The challenge has always been to meld those into something greater than the sum of their parts, and optimise policy behind that vision.

In his Autumn Statement last year, the then new Chancellor, Jeremy Hunt, marked life sciences as one of his key growth industries and tasked Chief Scientific Advisor, Sir Patrick Valance, with understanding how we should change regulation to improve the safe, swift introduction of new technologies. 

And in yesterday’s budget, to the broad approval of the sector, they started to deliver.

Alongside the tax incentives designed to nurture SMEs and retain big business, was an important development in the drug approval process aiming to continue the re-integration of the UK into a global network of regulatory partners.

The announcement focused on building new ‘recognition routes’ through the UK Medicines and Healthcare products Regulatory Agency (MHRA) and their counterparts in the US (FDA), Europe (EMA) and Japan (PMDA), building on pre-existing partnerships through Access Consortium and Project Orbis.  

Backed up by £10m in additional funding over the next two years which also looks to improve internal processes at the regulator, this new global ambition aims to fast track approvals of ‘best in class medical products’ already green-lit in partner countries from 2024.

The idea is of course nothing new and forms part of a decade old trend, but its centrality in yesterday’s Budget, and increasingly in British politics, is a reassuring signal that the UK is re-establishing itself as a global life sciences hub. This is also the first tangible dividend for industry from the decision to separate the MHRA from the European regulatory orbit. 

The sentiment has echoed around the sector as well with the likes of the ABPI and AMRC welcoming the global ambition and domestic reforms to boost competitiveness.

The proof, as ever, will be in the pudding, and we look forward to hearing more on how the UK government and its wealth of world-class health and sciences companies can work together to forge a global future for life sciences.    

Hunt’s Balancing Act Budget

Posted on: March 15th, 2023 by Morgan Arnold

From Carbon Capture to free childcare, Hunt banked plenty of political capital from announcements that won’t actually be paid for until after the next election. But a more favourable economic outlook has enabled him to deliver a far less austere programme than was expected just a matter of months ago and has potentially set him up for a pre-election giveaway at his next budget.

In our budget predictions note on Monday, MHP said that ‘there is a balance of ambition and risk to be struck’, this evening four MHP Group specialists offer their analysis on whether the Chancellor performed that balancing act successfully, and what his budget will mean for their sector.

Mario Creatura
Director, Public Affairs and former Conservative Party SpAd on the political impact of the budget for the Conservative Party.

Usually Government is a hive of activity. There’s always a strategy to announce, a policy to launch, a crisis to respond to. But at the tail-end of last year, Downing Street was unusually quiet. They chose, broadly, not to intervene, to publish, or to enact – at least not to the scale and volume we have been used to. They were, for all intents and purposes, in self-inflicted hibernation.

That was deliberate. The last few months of 2022 were a political write-off, everyone was desperate for a festive break, and nobody was prepared to have their minds changed about the parlous state of Government. So Prime Minister Sunak took his advisors to Chequers to plot and to plan for a relaunch in 2023.

We are now seeing very clearly seeing the intended fruits of that reset.

Early in the New Year Sunak set out his Five Promises, deliver on them and trust might begin to be restored in the Conservatives. Soon after, the Government wielded Section 35 to veto Nicola Sturgeon’s controversial Gender Recognition Act. Then came the surprisingly popular, ERG-quelling Windsor Framework. Days later, a diplomatic success with Macron to help tackle the small boats crisis followed swiftly with a China-facing multi-decade military partnership with Australia and the US.

These announcements have all be diligently planned by Ministers and Downing Street strategists, flexing their muscles after a bit of time to get their feet under the table.

With Amber De Botton and James Forsyth, formerly senior political journalists at ITV and The Spectator respectively, heading up No 10 communications and political strategy it’s no surprise that the government grid is being planned to within an inch of its life – and the ramp up to today’s Budget could not have been better for the Chancellor.

The General Election will be in 2024. That gives the Government a year to pull out of the polling nosedive that it currently finds itself in. To do that they needed big, retail policies that translate in easily shareable, pleasing front pages.

That’s exactly what Chancellor Hunt sought to deliver today with a massive investment and reform package on childcare, extending the Energy Price Guarantee at £2,500 for three months and freezing fuel duty for a thirteenth year, saving the average driver around £200 – and a £63 million fund to keep the nation’s swimming pools open.

The devil will as ever be in the detail, but you can bet the top story on tonight’s news bulletins won’t be the increase in Corporation Tax to 25 per cent: it’ll be childcare, fuel duty and the energy price guarantee.

There’s at most 18-months to a General Election – it’s clear from today’s Budget that Prime Minister is not going down without a fight. His retail policies, success at framing a narrative of competence and delivery, could yet seal an unprecedented 5th General Election win for the Conservatives.

For Rishi Sunak – the Great Reset has begun.

Yasmeen Sebbana
Account Director, Public Affairs and former Head of Office and Forward Planning to Sir Keir Starmer on Labour’s response to the budget.

This was Keir Starmer’s first response to a Jeremy Hunt Budget and the theme of his rebuttal was a critique of the Government’s approach to encouraging growth.

Starmer focussed on tying the current government to their record, building a narrative that the country’s economic troubles are not the result of global factors beyond our control but rather due to the chaos following Truss’ fiscal event and as a direct result of choices made by 13 years of consecutive conservative governments.

Starmer’s objective is to present his party as a safe pair of hands, capable of avoiding economic fumbles. However, he knows that while consistency may be enough for the Chancellor to avoid another scandal in this ship-steadying budget, Labour needs to go further in order to overturn the largest Conservative majority since 1987. Although current polling places Labour as being more trusted on the economy than the Conservatives, Starmer knows the polls will tighten between now and the next General Election and that shrewd management of the economy must be combined with strong ambition for the country.

This is where Labour’s own economic mission of securing the highest growth in the G7 allows them to accuse the government of lacking vision – by going beyond the government’s current plans for growth – and to present themselves as both competent and ambitious.

Starmer was also keen to show that the Labour Party didn’t need to wait until 2024 to start pushing policies to combat the cost of living crisis. He accused the government of copying Labour policy on the energy price guarantee, the windfall tax and extending the fuel duty cut. Labour are keen to emphasise these individual policy wins as they believe it presents them as a government-in-waiting and creates cover for criticism of lack of wider economic policy ahead of their manifesto being written.

Starmer’s repeated references to the government’s plans as ‘sticking plaster politics’ and Britain as the ‘sick man of Europe’ present the economy as an organism that needs long term preventative treatment to ensure it can grow healthily. Strategists around Starmer know that Labour is consistently more trusted than the Conservatives on the NHS and by linking the decline of the NHS under the Conservatives – through longer waiting lists and lack of medical school places – to the state of the economy, they believe they have found a way of increasing Labour’s credibility as stewards of the economy to the public.

Pete Lambie
Associate Director, Capital Markets on what the markets will make of today’s announcements.

Constrained by a tough fiscal backdrop and a vow to hold down spending to tame inflation, Hunt has worked to ameliorate the headline increase in corporation tax, with the c.£9bn Full Capital Expensing scheme likely to boost business investment in the short to medium term. Equally, the lifting of the lifetime pension allowance should provide additional flows into equity markets, while bolstering the wealth management sector.

Whisper it, but we might just have seen a normal Conservative Budget for the first time in three years. Against a backdrop of continued turmoil, with an accelerating market sell off out of the US and a weekend of fantasy banking M&A for the Chancellor, he seems to have successfully not poured fuel on the fire today. While last year’s mini-Budget was the equivalent of a fiscal suicide pill for his predecessor, Hunt’s four E’s are relatively easy pills to swallow.

There will be reams of analysis over the coming days, and no shortage of long-suffering PRs pumping out commentary on every aspect of this Budget (somebody spare a thought for the PRs!) but ultimately this was a budget for technocrats and not ideologues – and that is a good thing. All the major indices are in their fourth consecutive day of declines, with the FTSE 250 down 3% today, but refreshingly, it isn’t the Chancellor’s fault on this occasion.

Hunt is doing exactly the job he was put in post to do – provide some semblance of stability in one of the most volatile operating environments the markets and companies have seen in decades.

Peter Lineen
Director, Health on what the budget means for health.

For health, as with most of the big spending departments, the fiscal direction was broadly determined at the last Autumn Statement. This budget was largely used to tie up a few loose ends, the loosest of which were the changes to the pension arrangements of senior doctors. This has been a real issue in the NHS, very tangibly impacting swathes of our most experienced clinicians, but one that’s largely played out away from the national headlines. The chosen solution is expensive, controversial, and already causing a stir. A Chancellor less closely identified with NHS workforce issues might have ducked it, but Hunt is hoping it will at least stem the tide of senior clinicians choosing to sell their labour to an increasingly diverse range of non-NHS providers.

Beyond that, most of the wider NHS workforce measures were held back for another day. The Treasury have already agreed to a substantial uplift in funding for medical training as part of a wider programme of demand modelling, workforce development and reform. DHSC and HMT collectively chose to give that its own time in the sun, rather than being subsumed into the din of budget day. More prosaic changes to the drug licencing process will be welcomed by the pharmaceutical industry, the first tangible regulatory dividend after all the upheaval of separation from the European regulatory orbit.

Overall, this was not a budget that will substantially alter the course of NHS performance ahead of the next election. With so much of NHS policy and strategy now set by the NHS itself, today’s measures were largely in keeping with that more reduced role for political leadership. Yet with NHS performance an issue of such prominence, those politicians are hoping and praying that the work already set in train starts to bear fruit soon.

Spring Budget 2023

Posted on: March 15th, 2023 by Morgan Arnold

This was an explicitly growth-orientated budget, seeking to stimulate the economy through a combination of measures aimed at tackling labour shortages, tax incentives to invest in the UK, and regulatory change to support innovation. It reflects a growing confidence in the Sunak administration, but also a determination to reclaim economic competence after the dark days which followed the disastrous Kwarteng/Truss fiscal event just six months ago.

Headline announcements:

The key points to take from the Budget for include:

  • Labour market: The Government has introduced a raft of measures to tackle economic inactivity, including introducing a significant package of childcare support, as well as measures to increase the number of older people, disabled people and the long term sick to get back into work.
  • Investment incentives: The Government has introduced a number of incentives for businesses to invest in their own capital as well as R&D, including a new capital allowance to offset any capital expenditure against corporation tax – which will continue to rise next month.
  • Tackling inflation: The Prime Minister’s target to halve inflation will be met, with inflation expected to fall to 2.9% by the end of the year, compared with 10.7% at the end of 2022. However, the economy is expected to contract by 0.2% this year.

Budget 2023 – Summary

Economic outlook

  • Outlook: The OBR has forecast that the UK will now not enter a technical recession this year. The economy will contract by an estimated 0.2%, with 1.8% growth expected in 2024, 2.5% growth in 2025, 2.1% growth in 2026 and 1.9% growth in 2027. The IMF judge that the UK economy is on the right track.
  • Inflation: The OBR reports that inflation will fall from 10.7% in Q4 2022 to 2.9% by end of 2023. More than meeting the Government’s objective to half inflation. Reducing inflation remains a guiding principle in the Government’s approach to industrial disputes. Freezing fuel duty, the duty on beer, and keeping the energy cap at £2,500 in place for another three months will also help bring down inflation taking around 0.75 percentage points off consumer price growth.
  • CPI will be lowered by 3% through the measures freezing various tax and duties.

Public finances

  • Departmental spending: The OBR says there will be a Budget in the final two years of forecast. The day-to-day departmental spending will grow at 1% a year on average in real terms after 2024-25 until the end of the forecast period, and capital plans are maintained at the same level set at Autumn Statement.
  • Budget deficit: The deficit falls in every year of the Budget forecast. Deficit falls from 5.1% in 2023-24, to 1.7% in 2027-28. In the final years of the forecast, the UK will be in surplus, only borrowing for investment.
  • National debt: Debt will rise to 97.3% in 2024-25, before falling to 94.6% in 2027-28. Meeting the Government’s pledge to have debt falling by fifth year of forecast.
  • Devolved nations: The budget provides an additional £320m for the Scottish Government, £180m for the Welsh Government and £130m for the Northern Ireland Executive.

Promoting an “enterprise” economy

  • Corporation tax: The tax will continue to rise as expected from 19% to 25% in April for large businesses – although only 10% of firms are expected to pay the full rate. This remains the lowest headline rate of the G7.
  • Capital Allowance: This rise will be offset by a full expensing capital allowance replacing the super-duction. All investment in investment in IT equipment, plant or machinery will to be deductible from taxable profits for the next three years and is worth £9bn per year. The OBR says this will increase business investment by 3% every year.
  • R&D incentives: Enhanced R&D tax credit for life science and creative industry SMEs. Qualifying businesses spending over 40% of their total expenditure on R&D will be able to claim £27 of every £100 spent back. Tax reliefs for film, TV and video gaming are also being extended.

Spreading growth “everywhere”

  • Investment Zones: 12 new Canary Wharf style “investment zones” will be created across the UK, eight in England, with four more planned in Scotland, Wales and Northern Ireland. Initial areas include West Midlands, Greater Manchester, North East, West Yorkshire, East Yorkshire, Liverpool and Teesside.
  • Local Investment: £200 million has been announced for local regeneration projects across England. £161 million in Mayoral authorities and Greater London, £400 million for new levelling-up partnerships.
  • City Regions Sustainable Transport Settlement: A 2nd funding round was confirmed, which will allocate £8.8 billion over next five-year funding period.
  • Mayoral Zones: Multi-year single settlements for the West Midlands and the Greater Combined Manchester Authority at the next spending review.

Supporting an increase in “employment”

  • Childcare support: 30 hours of free childcare for all children over 9 months old will be provided, beginning from the moment maternity leave ends, to encourage young parents to return to the workplace. This will be in place by 2025.
  • Childminder support: The Government will pilot incentive payments of £600 for childminders who sign up to the profession, and £1,200 for those going through agencies.
  • Wrap around childcare: Schools and Local Authorities will be supported in providing wrap around care, with all schools to provide a full wrap around offer by September 2026, either on their own or in partnership with other schools.
  • Pensions: Increase the pension annual tax-free allowance by 50% from £40,000 to £60,000. The Lifetime Allowance will be abolished. This change would stop 80% of NHS doctors from receiving a tax change and incentivise experienced workers to stay in work for longer.
  • Disability: A white paper published on Disability Benefits Reform. Disabled benefit claimants will also be able to seek work without fear of losing financial support, which will abolish the Work Capability Assessment.
  • Universal Support: In England and Wales, will fund a new program – Universal Support, which is a new voluntary employment scheme for disabled people.
  • Older workers: The Education Secretary will introduce a new ‘returnships’ to help older workers re-join the labour market, while DWP’s ‘midlife MOTs’ will be expanded.
  • Benefits: Universal credit sanctions will be applied more rigorously in order to encourage more people to get back to work. Anyone working below 18 hours will receive more support to help them get back into work.

Tech investment

  • AI: The Government will launch an AI sandbox and work at pace with the Intellectual Property Office to provide clarity on IP rules so that generative AI companies can access the materials they need and work with Vallance’s successor to report before the summer on options around the growth duty for regulators. A £1million prize every year for next 10 years will also be presented to the person/team that does most ground-breaking AI research.
  • Computing: £900m to meet the recommendations of the Government’s Future of Compute Review.
  • Quantum: The Quantum Strategy will be published today and will set out Government’s vision to be world leading quantum enabled economy by 2033 with a research innovation programme £2.5 billion.

Life Sciences

  • Medical approval: The UK will leverage the MHRA’s global reputation to create the fastest route to market for innovative healthcare technologies. Medicines and technologies will be automatically approved by the UK where they have already been approved in the U.S., Europe or Japan. The MHRA will adopt a quicker regulatory approval process for new innovations over next two years to provide rapid market access and incentivise investment in the UK.

Green Energy

  • Carbon Capture Usage and Storage: Up to £20 billion funding for early deployment of Carbon Capture, Usage and Storage (CCUS). This could capture 20-30 million tonnes of CO2 a year by 2030.
  • Nuclear energy: Subject to consultation, nuclear power will be classed as “environmentally sustainable” in green taxonomy. Great British Nuclear will be launched to make sure 25% of the UK’s energy comes from nuclear by 2050, as well as bringing down consumer costs and providing opportunities for the nuclear supply chain.
  • Small Modular Reactors: The UK’s first competition for nuclear SMRs will be launched the end of the year, with view to future co-funding.

Other measures

  • Fuel Duty: Fuel Duty will not be uprated with inflation; Chancellor will maintain the 5p cut and freeze the duty. This will be maintained for 12 months. Saving the average driver £100 in the next year.
  • VED: The Government will uplift VED for cars, vans and motorcycles in line with RPI from 1 April 2023. VED on HGV’s will be frozen until 2023-24 to support the haulage sector.
  • Alcohol Duty: From 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential which will be maintained as part of a new Brexit pubs guarantee”, as Draught Relief is extended from 5% to 9.2%. One of the benefits of the Windsor Framework will mean that this will apply to Northern Ireland.
  • Defence spending: £5 billion additional funding for the Ministry of Defence, £11 billion to be added over the next five years and will rise to 2.25% of GDP by 2025. This will then rise to 2.5% of GDP “as soon as fiscal circumstances allow”. This is above the NATO target for countries.
  • Veterans Support: An additional £33 million over the next three years for the service provided to veterans, including support for those with serious physical injury resulting from their service and increasing the availability of veteran housing.
  • Education: There will be a £3.1bn annual investment increase for schools, rising to £5.2bn by 2024-25.
  • Charities: £100 million to support local charities and community organisations. £10 million will be given to the voluntary sector to tackle suicide.
  • Community Infrastructure: £63 million fund announced for public swimming pool providers
  • Potholes: £200 million investment in road improvements, including fixing 4 million potholes across England.
  • Energy price guarantee: Support will remain at £2,500 per household until the start of July 2023 (an extra three months). This will save the average family a further £160 on top of the energy measures already announced and get them through the remaining colder months.
  • Pre-Payment Meters: Government will bring pre-payment meter charges in line with comparable direct debit charges. This comes on top of OFGEM’s negotiation of a temporary suspension of the installation of prepayment meters, and will save consumers £45 per year.

What was missing?

  • “Next Silicon Valley” plans were largely deferred to the Autumn Statement, following the collapse of SVB. This strategy will include measures to unlock investment from defined contribution pension funds, make the London Stock Exchange more appealing to investors, and compete the UK’s competitive response to the U.S. Inflation Reduction Act.