The elimination of an entire Whitehall department is rarely considered good news for the firms that depend on it. Yet the response of the business world to Andy Burnham’s decision to abolish the Department of Science, Innovation and Technology is remarkably divided: disappointment at the loss of a respected science minister, relief at the return of a familiar face to the business literature.
Lord Vallance of Balham has stepped down as science minister, and the department’s responsibilities have been folded into an expanded Department of Business and Trade. In his place, Jonathan Reynolds returns as business secretary, ten months after being reassigned to the role.
For thousands of small firms clustered in Britain’s growth sectors, from life science start-ups to advanced manufacturers, the restructuring raises one immediate question: who in government is now championing science?
Vallance, who was president of research and development at GSK and the government’s chief scientific adviser between 2018 and 2023, was awarded for that. “After almost ten years in the government, I am stepping down as a minister, for my own reasons,” he said.
His exit comes at a critical time. The life sciences sector, weighed down by the type of high-growth SMEs the industrial strategy aims to boost, has spent two years worried about Britain’s slippage in global health science investment rankings.
One major investor expressed this concern clearly: “It is a shame that we have lost a competent and efficient minister…
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, said Vallance had been “hugely instrumental in starting to change international sentiment in the UK as a life sciences destination”, adding that he “leaves big shoes to fill”. Vallance is also credited with helping launch the Health Data Research Service, a long-promised effort to open up NHS data to medical researchers.
The industry’s biggest concern now is continuity. Firms are pushing the new government to honor a deal to double spending on new drugs over the next decade to waive a three-year tax on US drug exports, a deal seen as key to attracting foreign investment. “Any backsliding would send a very bad signal to the rest of the world, just as sentiment is turning, and people are talking positively about the UK,” one source warned.
Chris Hollowood, chief executive of life sciences investor Syncona, expressed concern about being placed in the senior department. Its support “could be useful”, he said, “but if we are just diluted among other important things it will be about”. Significantly, the move to close the science department has already withdrawn the technology sector.
If the life sciences are nervous, the broader business lobby is excited, mostly because of who’s in charge now. Reynolds oversaw the creation of an industrial strategy widely supported by manufacturers, and his return is being read as a signal of intent.
Louise Hellem, chief economist at CBI, said she “brings a clear understanding of the challenges facing the business and will be able to hit the ground running, especially when it comes to delivering the industrial strategy introduced during her previous tenure”.
Stephen Phipson, chief executive of Make UK, set the bar for small manufacturers: “Success will be measured by manufacturers seeing lower costs, fewer trade barriers and a more competitive environment to invest, manufacture and export with confidence.”
Ben Fletcher of Logistics UK called the year “a real missed opportunity” and Reynolds’ recall “a fantastic move”.
For SMEs, the message is mixed but clear enough. A business signal from above is welcome. What will be looked at by small firms in science and technology is whether their sector still has a voice if the name of the department has declined.
