In brief
- In the 2026 Autumn Budget, the Chancellor announced over £1 billion of new Life Sciences public-private investments, backed by Government support, across three deals.
- The Chancellor emphasised the Government's commitment to supporting innovation and the steps being taken to make the UK an attractive space for new business.
Investment in Life Sciences
The Chancellor stated that the biggest barrier to UK innovation is investment. To tackle this, he led by example, announcing three investment deals in the Life Sciences space, backed by almost £70 million in grant funding, with:
- Convatec: investing over £500 million over the next decade in a new global R&D hub in Manchester
- Vertex Pharmaceuticals: investing over £300 million in a new facility in Oxford
- Kindeva: investing £200 million in Loughborough
These commitments are a welcome change. The UK has historically excelled at generating ideas, but many businesses have found a lack of investor appetite, particularly for complex, innovative Life Sciences products. An additional £20.4 billion for the National Wealth Fund has also been announced. The Chancellor did not go into detail on how private capital would be unlocked. However, greater involvement from the Government in the Life Sciences sector, coupled with any encouragement for private capital such as pension funds to invest in new areas, may help to persuade more private capital to engage with the sector.
Attracting and keeping talent
The Chancellor also highlighted the need for Government to help retain key talent. The High Potential Individual visa will be extended to graduates from the world's top 150 institutions, and non-compete clauses will not prevent start-ups and scaling firms from hiring. Talent retention and acquisition is particularly important in the Life Sciences sector, where often only a handful of people have the required knowledge or skills. The extension of graduate visas may be especially relevant in the case of a university spin-out.
Support for founders
For founders, the most significant developments centre on two new schemes and a tripling of the trading allowance:
- Trading allowance: individuals can now earn up to £3,000 tax free from a new venture, up from £1,000.
- Founders relief: founders of particularly successful businesses will benefit from a new 10% rate of Capital Gains Tax on lifetime gains up to a maximum of £10 million. Details of who qualifies are yet to be released but are likely to require a link to the UK.
- Female founders: a new Government-led scale-up programme, and the British Business Bank is to double its commitment to funds supporting women-led businesses to £200 million.
- Young entrepreneurs' allowance: a new allowance (criteria to follow) will cover an individual's living costs for a year. This will allow entrepreneurs to concentrate on growing their business and free up much-needed capital in that first year.
Our view
These measures speak to the Government's intention of making the UK an attractive location for new business. Of particular interest is the Chancellor's recognition that investment remains a key bottleneck for UK Life Sciences businesses. It will be interesting to see what steps are taken to encourage greater access to initial funding and private capital, as access to early-stage funding can often be a crucial factor in determining where a company launches its products or services.
How Mishcon de Reya can help
Mishcon de Reya's specialist Innovation and Life Sciences teams advise founders, investors and high-growth businesses on funding, protecting and scaling innovation. If you would like to discuss how the Budget measures may affect your business, please contact Patrick Farrant or Kate Pearson.
This article is provided for general information only and does not constitute legal or other professional advice.