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Pharmaceutical Sector

Volume 476: debated on Thursday 22 May 2008

The UK is one of the world’s leading locations for pharmaceutical research and development, and the Government are committed to maintaining and strengthening that position.

I thank that Minister for his reply, as employment in the pharmaceutical sector remains a very important part of the business base in my constituency of Basingstoke. However, one of those employers, the Shire Pharmaceuticals Group, has decided to move its tax base from the UK to Ireland. Does he think that that decision was influenced by the fact that corporate tax in Ireland is less than half what the company has to pay in the UK? Does he share the CBI’s concern that the UK’s uncompetitive corporate tax system is spoiling this country’s attractiveness as a place to do business? As the company says, other firms that are internationally mobile—

I am slightly surprised that the hon. Lady did not note in her question that Shire has said that its UK employees will not face job losses or relocation. I recognise the concerns that she says Shire has about its tax position, but the UK has one of the lowest rates of corporation tax in the EU. She will know that the Chancellor has set up a group that will continue to look at tax competitiveness. There is a representative of the pharmaceutical industry in that group.

The Minister said that the UK is a world leader in pharmaceuticals, but my constituency of Slough is a national leader in biopharmaceuticals. However, if residents of Slough are to benefit from jobs in the knowledge economy, we need to have the appropriate skills in the local community. Will the Minister discuss with his colleagues in the Department for Innovation, Universities and Skills how we can prepare young people better for such high-value jobs?

My hon. Friend is absolutely right. One of the reasons the pharmaceutical industry continues to see the UK as such a good place to be based is the quality of talent available to work in the sector. As she rightly acknowledges, we cannot afford to be complacent about that skills base, and we do need to put in place a series of further steps. That is one of the reasons, for example, that modern apprenticeships are being brought back. I am of course very happy to ensure that further discussions take place across government—not just with DIUS, but with the Department for Children, Schools and Families—to look at what else we can do in future to ensure that we have the skills that the pharmaceutical industry and other manufacturing industries need to continue to thrive.

Will the Minister accept that it is self-evident that a thriving pharmaceutical sector manufacturing drugs is reliant on a vigorous and successful retail sector? As a result, will he have input into the Department of Health’s current review of pharmacy services, to ensure that the unfair practice whereby supermarkets can force out small, family run pharmacies is put to an end immediately?

The hon. Gentleman will know that the Competition Commission published a report on the retail sector. The Government are considering our response to it, which we hope to publish before the summer.