The fallout continues from last week’s significant Autumn Budget, with prime minister Sir Keir Starmer this week defending his chancellor and talking up the significance of trade in the UK’s plans for economic growth.
He will be hopeful that a new deal with the US on pharmaceuticals trade will contribute to this, but he will no doubt be braced for accusations that the agreement to pay more for US drugs will be viewed in some quarters as a significant concession.
Also today in trade, we bring you news of a firm that’s agreed to pay a compound settlement of well over £600,000 for breaching UK licensing rules, as well as fresh reports about the health of the UK economy.
US pharma deal
The UK and US have announced a “landmark” pharmaceuticals deal that will “safeguard medicines access and drive vital investment for UK patients and businesses,” according to a statement from the British government.
The agreement, which will form part of the UK-US Economic Prosperity Deal that was signed earlier this year, will see the UK become the only nation in the world that has a zero-tariff rate on pharma exports to the US. Britain has also secured preferential rates for med-tech goods.
However, in return, the UK will invest an additional 25% in US drugs – the first major increase in over two decades. This includes slashing the cost-effectiveness threshold that the National Institute for Health and Care Excellence (NICE) can reclaim from drugmakers to 15%.
“This vital deal will ensure UK patients get the cutting-edge medicines they need sooner, and our world-leading UK firms keep developing the treatments that can change lives,” said science and technology minister Liz Kendall.
US Commerce Secretary Howard Lutnick called the deal a “major win” for his country, Politico reports.
“Patients stuck on crammed hospital corridors, or unable to get an ambulance, won’t forget it,” said Helen Morgan, the health spokesperson for Britain’s Liberal Democrats party.
“The British people didn’t vote for this. The government must put this agreement to a vote in parliament.”
Firm pays major settlement for licence breach
The UK government has announced that a business has paid HMRC a compound settlement worth £620,515.04 for exporting unlicensed military goods.
Under the Export Control Order 2008, firms can be fined and banned from exporting if found to breach UK licensing rules.
“This settlement reiterates the need for firms to ensure compliance with export controls and sanctions,” said Daniela Turickki, the lead of the Chartered Institute’s Export Controls Advisory Practice.
“This follows a recent trend of the UK government being quite public about how it is enforcing controls regulations. Businesses should be under no illusions – they need to be careful to follow the rules.”
Trade ‘vital for productivity’, says Starmer
Prime minister Starmer yesterday called trade “vital for productivity, essential for growth, crucial for growth”.
In a speech that also defended last week’s Autumn Budget, he said:
“Let me be crystal clear – there is no credible economic vision for Britain that does not position us as an open trading economy. So, we must all now confront the reality that the Brexit deal we have significantly hurt our economy.
“And so, for economic renewal, we have to keep reducing frictions. We have to keep moving towards a closer relationship with the EU. And we have to be grown up about that, to accept that this will require trade-offs.”
He also criticised “wild promises” made by opposition parties in the run-up to Brexit, the Mirror reports.
One example of the UK moving closer towards Europe could be an imminent deal for the country to rejoin Erasmus, according to the Guardian. The government is hoping to reach agreement with the EU on the student mobility programme in January.
New OECD growth forecasts
New OECD forecasts suggest UK growth in 2026 will be lower than previously expected, with GDP to increase by 1.2% “due to the continued effect of budgetary tightening on consumption and to the drag from global uncertainty”.
However, the multilateral body also says growth should rise in 2027 to 1.3%, “supported by business investment and exports as financial conditions and global trade improve”.
A financial stability report from the Bank of England, also published today, said that global risks to the UK economy remain “elevated” due to “geopolitical tensions, fragmentation of trade and financial markets, and pressures on sovereign debt markets”.
Also today in trade
· Sir Keir Starmer has urged British firms to boost trade with China, the FT reports, despite ongoing security concerns
· Documents seen by Politico suggest the EU is planning to cut trade with countries that refuse to take back nationals deported from the bloc
· Energy giant BP is withdrawing from plans for hydrogen development at a site in Teesside, which could pave the way for a massive data centre to be built there instead, according to Teesside Live
Yesterday in trade
· Chartered Institute members were invited to a webinar on trade remedies, featuring the Trade Remedies Authority, that’s taking place tomorrow (Wednesday 3 December)
· Industry experts analysed the UK government’s new critical minerals strategy
· We opened the first door of this year’s Commodity Code Advent Calendar
You can read all of yesterday’s trade news here.
