Last November, the Financial Times reported that the UK was putting up for sale the Vaccine Manufacturing and Innovation Centre. On its creation in 2018, the publicly owned centre was touted by the business secretary at the time as a ‘major commercial opportunity’ and ‘a new front line in the nation’s defence against global pandemic threats’.
The proposed privatisation exposes the hollowness of the stated vision of Global Britain. Putting the centre into private hands is likely to undermine global resilience to future pandemics. It will also limit opportunities to use the UK’s successful life-sciences industry as a force for good in the world. The decision to sell is symptomatic of an approach to economic policy that continues to prioritise short-term fiscal targets over addressing the long-term social and economic challenges faced in the UK and globally.
Undermining resilience to future pandemics
The purported justification for the privatisation of the vaccine centre is that the private sector is better placed to quickly upscale vaccine manufacture. The Financial Times reports a source stating that ‘the worry was there would be a surge in vaccine manufacturing requirements [during the pandemic], and we’d need surge capacity, and that reason is gone’. Whether the UK needs its own, publicly owned, large-scale domestic vaccine manufacturing capacities, or whether it is more cost-effective to rely on private facilities is open to debate, and partly rests on how likely one imagines a future pandemic to be. The rise of mRNA vaccines may also make it much easier for the private sector to quickly upscale production in the future.
However, as a justification for the sale it misrepresents the rationale for building the centre in the first place. When first conceived, the centre was primarily intended to advance innovation in vaccine manufacturing processes, not serve as a surge manufacturing facility. It was only in May 2020, at the height of the pandemic, that capacity was stepped up (and substantially: a 20-fold increase). Producing vaccines is a complex undertaking: certain Covid-19 vaccines have involved as many as ‘50,000 discrete production steps’. The pandemic has highlighted the enormous benefits of innovation in manufacturing processes. The potential benefits to public health and society of reducing the time taken between the identification of new pathogens and widespread vaccine manufacture are enormous.
The privatisation will especially undermine efforts to increase the accessibility and relevance of innovations in vaccine technologies in lower-income contexts. The Covid-19 pandemic has reinforced what we already know about the economics of innovation. Intellectual property regimes and the consequent potential for monopoly profits incentivise the creation of new ideas (think the development of new mRNA vaccines). However, this same profit incentive also contributes to the under-supply of resulting innovations. This is a particular problem in lower-income settings. There is less incentive to invest in innovation targeted directly at poorer countries (for instance, manufacturing technologies that do not rely on sophisticated cold-chain storage systems). Lower-income countries can also be priced out of innovations that benefit rich and poor countries alike (such as Covid-19 vaccines based on mRNA technologies).
A distinctive strength of the UK’s vaccine innovation ecosystem has been its historical research into pathogens prevalent in lower-income countries. A publicly steered manufacturing innovation centre has the potential to accelerate vaccine development well-suited to supply chains in lower-income contexts. A world where such innovations are under-invested in is a world that is much less safe for all.
Working against the UK’s long-term economic interests
Aside from the risks to health security, the privatisation also undermines the UK’s longer-term economic interests. The initial investment in the centre was born out of the Department for Business, Energy and Industrial Strategy’s 2017 white paper on UK industrial policy, which sought to address the long-term stagnation in UK productivity growth. Funding for the centre came from an industrial strategy challenge fund targeted at supporting UK business to deliver ‘leading-edge healthcare’. Public investment and ownership of vaccine manufacturing innovation can have positive spill-over effects for the life-sciences industry. For instance, the platform used for the AstraZeneca vaccine emerged from the Jenner Institute’s research on pathogens such as the Lassa fever virus.
Internationally, a publicly owned vaccine centre could also serve as a valuable tool of economic diplomacy as the UK seeks to build new economic partnerships in the wake of Brexit. Foreign Secretary Liz Truss has argued for the need to use the UK’s scientific assets to ‘win the battle for economic influence’ with ‘our friends across the free world’. Winning such a battle requires that the UK not only acts in its own interests, but also finds areas for cooperation that meet the interests of its partners. This will require that the UK shares assets and cooperates in ways that bring clear value to potential allies: emphasising the ‘greatness’ of Great Britain will not be enough.
A publicly owned vaccine manufacturing and innovation centre with a mission to share its know-how could be an enormous asset in this regard. The Association of Southeast Asia Nations (ASEAN) is pushing to build vaccine development capacity and has formed a Vaccine Security and Self-Reliance platform. The African Union and African Centres for Disease Control and Prevention have launched a partnership for vaccine manufacturing, seeking to move beyond a reliance on unreliable donations. Private sector organisations do not share the same incentives to see vaccine manufacturing technologies more widely and rapidly diffused.
Exposing the holes in ‘Global Britain’
The decision to try and recoup investment in the vaccine centre rather than retain the asset is ultimately indicative of the UK government’s economic policy priorities. It highlights that the Treasury, which has historically prioritised short-term fiscal management over long-term economic management, has regained ascendancy in economic policy-making. The centre is being sold alongside the shelving of the Department for Business’ industrial strategy and the independent council set up to oversee its implementation. In its place there is a new Treasury-led ‘plan for growth’, which has distanced itself from efforts to promote particular strategic economic sectors.
The UK has form when it comes to a lack of long-term vision and consistency in strategic economic policy-making. A review last year of the UK’s industrial policy concluded that ‘since the 1970s [UK industrial policy] has been characterised by frequent policy reversals and announcements, driven by political cycles, while multiple uncoordinated public bodies, departments and levels of government are responsible for delivery’.
Prioritising short-term fiscal targets over longer-term economic transformation is not just a domestic economic challenge. It also exposes larger holes in the stated vision of the UK as a leader on the world stage helping to tackle major global challenges. No more was this apparent than in the run-up to COP26, where ambitious UK policy statements were undermined by contradictory fiscal measures. The government pointed to ambitious emissions reductions targets, while cutting duties for domestic flying. It tried to encourage other countries to raise their international climate finance targets even while the UK’s overall aid budget was slashed.
A publicly owned vaccine innovation centre with a mission to build global resilience and share new vaccine technologies could be an exemplar of the UK’s aspirations to demonstrate global leadership while meeting national interests. But this requires a consistent vision across government of the outward orientation of the UK’s major policy priorities. The sell-off is the latest example that this is clearly not the case. Until that is resolved, the gap between the rhetoric and reality of ‘Global Britain’ will only grow.