George Freeman: The industrial strategy reforms I led helped to deliver Britain’s vaccine success. Now for the next phase.

1 Feb

George Freeman is a former Minister for Life Science and Chair of the Prime Minister’s Policy Board (2016-18). He is co-author and editor of the 2020 Conservatives book Britain Beyond Brexit.

The combination of Covid-19 and the Crash of 2008 have left this country facing the most serious crisis in our public finances since 1776. Unless we make the post-Brexit, post-Covid recovery a transformational renaissance of enterprise & innovation on a par with that unlocked by Thatcher Governments of the 1980s, we risk a decade of high debts, rising interest rates and slow growth.

We have a truly unique opportunity before us. As a science and innovation superpower, with the City of London now outside the EU’s rules for the first time in nearly fifty years, we can unlock a New Elizabethan era of growth – with Britain a world-leader in global commercialisation of science, technology and innovation. It is what our entrepreneurs have been crying out for. Now is the moment to make it happen.

That’s why I’m delighted to have been asked by the Prime Minister to help set up the new Taskforce for Innovation and Growth through Regulatory Reform (TIGRR) with Iain Duncan Smith and Theresa Villiers.

Reporting directly to the Prime Minister & the Chancellor’s Cabinet Committee on deregulation, and supported by a secretariat in the Cabinet Office, the Taskforce will consider and recommend “quick wins” to use our new regulatory sovereignty to unlock high growth sectors of the economy to drive post-Brexit post-Covid recovery.

Rest assured: there will also be no big report or a thousand pages of footnotes to wade through. We will be crowd-sourcing the best ideas from the business community and the entrepreneurs and innovators who are the engine of our economy.

The Prime Minister has asked me to bring my career experience in business starting & financing high growth bioscience technology companies as well as my experience as Minister in Health, BEIS and Transport leading our groundbreaking Industrial Strategy for Life Science which has paid such dividends this year.

The reforms I led in our Industrial Strategy – launching Genomics England, the Early Access to Medicines Scheme, MHRA and NICE reform, Accelerated Access procurement have been fundamental to our ability to lead the world in developing a Covid vaccine.

We now need to make Brexit & Covid the catalyst for bold reforms to unlock big UK opportunities for recovery & GlobalBritain across a range of high-growth sectors such as those I have worked on extensively as both entrepreneur and Minister:?

  • LifeScience: harnessing the potential of the NHS as a research engine for new medicines, unlocking digital health & innovative approaches to Accelerated Access, clinical trials & value-based pricing.
  • Nutraceuticals: health-promoting “superfoods”, cannabis medicines.
  • AgriTech: smart clean green twenty-first farming technology like the blight resistant potato banned by the EU.
  • CleanTech: new biofuels, Carbon Capture & Storage & digital “smart grids” to reward households & businesses for generating more and using less.
  • BioSecurity: harnessing the potential of Porton Down and UK vaccine science for plant, animal & human biosecurity.
  • Digital: removing barriers to UK digital leadership outside the EU GDPR framework.
  • Hydrogen: using the full power of Gov to lead in this key sector as we did in genomics.
  • Mobility: making the UK a global test-bed for new mobility technologies,

Before being elected to Parliament, I spent 15 years working in life sciences around the Cambridge cluster, financing innovation. I saw time and time again how the best British entrepreneurs and their companies struggled to build business to scale here in the UK.

So often we have invented the technologies of the future and failed to commercialise them effectively.

After several years working as the Government Life Science Adviser, I published my report for the Fresh Start Group on The EU impact on Life Sciences: Avoiding the Global Slow Lane.

Three years before Brexit, the report was the first to highlight the growing hostility of the EU to ‘biotech’ and the increasing tide of ‘anti- biotech’ legislation – driven by a combination of the German Green Party, Catholic anti-science and lowest commons denominator regulation by the “precautionary principle” which was having a damaging effect on the Bioscience Economy and risked condemning the EU – and by extension the UK – to the global slow lane in biotechnology.

The report set out how the genomic revolution was beginning to offer untold opportunities across medicine and agriculture to help generate huge economic, social and political dividends for mankind. Billions of people were being liberated from the scourge of insufficient food, medicine and energy. The main threat to that? The EU’s hostile regulatory framework.

This was seen clearly in numerous case studies. At the time, the EU’s hostility to GM led German-based BASF and major U.S firm Monsanto to announce their withdrawal from Europe in agricultural research and development. My report argued that unless something was done soon, other companies would follow suit, with dire consequences for the UK Life Science sector.

The report recommended a shift away from the increasingly widely used risk-based ‘precautionary Principle’ and greater freedoms around data protection, using public healthcare systems to help accelerate early access to medical innovations, and for the UK to be able to ‘go it alone’ in designing appropriate regulatory frameworks for GM crops.

The UK’s departure from the laws and requirements of the EU provides us with a once-in-a-generation chance to redesign and improve our approach.

This new Taskforce, therefore, is emphatically not another long-term Whitehall de-regulation ‘initiative’. Neither is this is about cutting workers’ or environmental rights that we rightly guaranteed in the 2019 election manifesto.

It is of vital importance that the UK maintains the high regulatory standards that we have consistently championed. In some of the fastest growing new sectors like Digital Health, Nutraceuticals and Autonomous Vehicle Tech, clear global regulatory standards are key to investment confidence. By setting the new global standards here in the UK we can play a key role in leading whole new sectors.

But we must think innovatively about supporting businesses to start and grow, and make the most of the cutting-edge technologies and sectors we nurture in our universities for global impact. For example, why don’t we use our freedom to pioneer new disease and drought- resistant crops, and use our aid budget and variable tariffs to help create new global markets for UK Technology Transfer?

We won’t unlock a new era of the UK as an Innovation Nation generating the technologies and companies of tomorrow with technocratic tinkering. We need bold leadership, clear commercial vision and reforms to support innovation and enterprise. The two go hand in hand. We won’t unlock an innovation economy without an enterprise society. So we will need to look at tax and regulatory incentives for high risk start/ups like the “New Deal for New Businesses” I proposed back in 2010 to drive recovery after the Crash.

This is a once-in-a-generation moment. Together we must seize it.

Daniel Hamilton: So we have a new CDU Chairman. Will a CDU-Green coalition follow after Germany’s federal election?

18 Jan

Daniel Hamilton works in international business consultancy and was a Conservative candidate at the 2017 General Election.

In September, Angela Merkel will step down as German Chancellor after sixteen years in office. Regardless of how one may judge her record, Merkel’s influence over the substance of European governance has been immense; from stamping her mark on EU fiscal rules to her open-doors policy during the migrant crisis to her final ascent for the UK’s post-Brexit deal.

The cast of names that have come and gone during her term in office – Tony Blair, David Cameron, Theresa May, Jacques Chirac, Francois Hollande, Nicolas Sarkozy, George W.Bush, Barack Obama and Donald Trump– is without modern compare.

Partly because of constitutional constraints and partly due to post-war caution and conservatism, stability is a feature of German politics.  Since 1982, Germany has had only three Chancellors.  In the same period, the UK has had seven Prime Ministers.  Italy has had twenty-two.

The Große Koalition between the Christian Democrat Union (CDU) and Social Democrats (SPD) has now largely served in office since 2005.  This has effectively resulted in the two main parties adopting a similar, centrist persona, with disagreements tending to focus on tweaks and cadences of policies rather than fundamentals.

This has arguably hurt the SPD most, whose traditional platform, once grounded in patriotic labour unions and cosy accommodations with big businesses, has fractured as Germany has become more ethnically diverse, more start-up friendly and more ecologist in its views.  The party won 41 per cent of the vote in 1998, yet polls around 15 per cent today.

The CDU has its own problems.  Distinct from what “voting Merkel” meant – centrism, no surprises and the social market, with a strong nod to environmentalism – the CDU’s platform has a rather hollow feel.  It is accepted, for sure, that the party stands for the defence of Germany’s social market economy and a punchy approach to German influence at an EU level, yet its pro-immigration stances and seeming intransigence on tax cuts and deregulation have separately irked working class voters and entrepreneurs.

With the CDU and SPD unable to define their appeal effectively, an opportunity exists for other parties to gain ground.

While the hard-left Die Linke and market-liberal Free Democrats (FDP) are polling well enough to have a respectable presence in the next convocation of the Budestag, it would be wise to follow the public remarks of Die Grünen, Germany’s Green Party.

Overseas perceptions of the Greens are somewhat outdated and tend to revolve around images of the “68ers” – a radical student movement founded on ending the military draft, opposition to the Vietnam war and the modernisation of a stodgy political system still inhabited by the wartime generation.

Their march to the mainstream has, though, been a long one.

The decision in 1998 of Joschka Fischer, a veteran 68er and the country’s Foreign Minister during the Green coalition with the SPD, to advocate NATO airstrikes on Yugoslavia over the Kosovo crisis upended the party’s pacifism-at-all-costs agenda, and led Germany into an overseas conflict for the first time since World War Two.  A Green Minister-President, Winfried Kretschmann, has governed the manufacturing-dominated state of Baden-Württemberg in coalition with the CDU for more than a decade; implementing a pro-business, R&D-friendly agenda that feels more modern than the SPD’s staider rhetoric.

The issue of immigration is as polarising or more so an issue in Germany as in other European countries, yet polling suggests that recent-naturalised Germans and the descendents of the Gastarbeiter generation which moved to the country from Turkey and Yugoslavia in the 60s and 70s lean strongly towards the Greens.  This offers the party another electoral advantage over the SPD.

There is much to dislike – or even, given the party’s more extreme factions, fear – in the Green Party’s platform, but the fact remains that the party appears to be on the verge of stitching together arguably the most electorally-appealing platform in German politics today.

With the CDU on course to win roughly a third of the vote when September’s elections come, the Greens on upward or around 20 per cent of the vote and all other blocks trailing far behind, the prospect of a CDU-Green, Schwarz-Grüne coalition is a distinct possibility.

The election of Armin Laschet as the new Chairman of the CDU on Saturday morning would, on the face of it, appear to represent a “safe” choice for the party.  Coverage of his victory has focussed on his jolly nature, centrist political brand and stewardship of North Rhine-Westphalia, one of Germany’s most important manufacturing hubs.

A debate will take place in Germany during the coming months as to whether Laschet will be the party candidate for Chancellor (he faces a potential contest including the guttural Bavarian Governor, Markus Söder, and the liberal Health Minister, Jens Spahn), yet this is a battle he is likely to win.  The fact he was able to see off the socially-conservative, immigration-sceptic Friedrich Merz and media-friendly Norbert Röttgen to win the top job suggests the party is looking for stability, not revolution.

There is little debate about whether the CDU and its Bavarian affiliate, the Christian Social Union, will win the plurality of votes in September.  With Laschet as their candidate, a Große Koalition with either the rump remainder of the SPD or resurgent Greens would appear to be both mathematically and politically possible.

CDU/CSU voters have proven to be a loyal block, yet their combined 45 per cent vote share in 2013 is a distant memory.  They now poll 35 per cent.  The price of such a fall in support is that no clear path exists for Laschet to pursue a coalition with the CDU’s traditional partners, the liberal FDP.  His only options are on the left.

Given the recent momentum of the Greens, it is not beyond the realms of possibility they could further erode support from the SPD and Die Linke, leading to an electoral percentage showing in the high twenties.  In this scenario, the pressure from both Green insiders and those on the left, battered by sixteen years of losses, for a leftist GroKo may be insatiable.  The price of such a coalition, particularly for Die Linke, would likely be the shelving of Green moderation in favour of a distinctively leftist agenda.

The implications of such a centre-left coalition would be profound – for both the UK and EU.

Notwithstanding recent Coronavirus-related speeding, a coalition of this kind would see the abandonment of the ‘Schwarze Null’ fiscal policy that mandates a balanced budget domestically and higher taxes on personal incomes and business.

For a post-Brexit UK, seeking to steer a path as a low-tax, regulation-light economy, a malcontent leftist coalition in Germany would likely serve as a Trojan Horse in the European Council for policies designed to disadvantage and undermine UK interests.

For all the criticisms of Laschet’s unambitious centrism and the gap that exists between British conservatism and the CDU’s social market economy orthodoxies, the preferred outcome for the UK is clear.