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Ministers to launch UK's post-Brexit economy plan Pharma plans will create 1,850 jobs in Manchester and London
(about 3 hours later)
The government's plan to boost UK industry ahead of the country leaving the EU is due to be launched later. Two pharmaceutical firms have said they will invest more than £1bn in the UK, creating about 1,850 jobs.
The industrial strategy is aimed at lifting growth, which official forecasts suggest will slow due to the UK's poor productivity performance. MSD, known as Merck in North America, will support a new research centre in London creating around 950 new posts.
Business Secretary Greg Clark said the UK's decision to leave the EU meant the strategy was "even more important". Germany's Qiagen will develop a genomics and diagnostics campus in Manchester, creating up to 800 jobs.
A deal with US healthcare giant MSD to open a UK research centre has been announced as part of the strategy. The government said these biotech deals illustrated confidence it its industrial strategy, the details of which it is publishing later.
Will the government's economic medicine work? Business Secretary Greg Clark said the investments represented "a huge vote of confidence" in the government's plans.
The investment by MSD, known as Merck in the US, is worth up to £1bn and is expected to create 950 jobs. "People don't make the investments of this scale that are for the long term if they don't have the confidence that we are building in this country a very attractive base," he said.
The government said the announcement was "a huge vote of confidence" in its plans to boost the post-Brexit UK economy. He said the government's white paper on industrial strategy would set out how the UK's strengths in life sciences, financial services, advanced manufacturing and the creative industries would be maintained and enhanced.
The strategy comes just days after official forecasting body the Office for Budget Responsibility (OBR) announced an aggressive downgrade of its UK growth and productivity forecasts. The strategy comes just days after official forecasting body the Office for Budget Responsibility (OBR) announced an aggressive downgrade of its UK growth forecast.
The OBR concluded that a slowdown in the growth of productivity - or the value that each worker produces - since the financial crisis will persist for several more years.
The white paper will outline how "sector deals", such as within the pharmaceutical industry, will link government funding and policy to investment from private firms.
MSD's managing director in the UK and Ireland, Louise Houson, linked the company's investment to the government's approach to the economy: "This investment presents a major opportunity for us to work in collaboration with the UK government to build on the forward thinking and ambitious industrial strategy white paper being published."
The chief executive of Qiagen, Peer Schatz, said the involvement of the University of Manchester, the NHS Trust and the UK government were "essential" to the partnership they are investing in.
Mr Clark said the UK's decision to leave the EU meant the strategy was "even more important" and he said political commitments to limit immigration would not hamper the development of research related industries. He said the government would "make it easier for more scientists to come and work in the UK".
Political parties and business groups have said that the solution to creating stronger growth and higher wages is more investment.Political parties and business groups have said that the solution to creating stronger growth and higher wages is more investment.
The industrial strategy is expected to outline similar partnerships to the MSD one with other private sector firms in the construction, artificial intelligence and automotive sectors.The industrial strategy is expected to outline similar partnerships to the MSD one with other private sector firms in the construction, artificial intelligence and automotive sectors.
The deals will see the government pledge funding and policy collaboration in exchange for investment from private firms. The government said the deals would be "strategic and long-term partnerships".
Analysis by BBC business editor Simon Jack Analysis: Simon Jack, BBC business editor
Here's the idiot's guide to how it's supposed to work.Here's the idiot's guide to how it's supposed to work.
Pick an industry that the UK is already good at and needs investment.Pick an industry that the UK is already good at and needs investment.
Chuck in a bit of government money, cluster the right institutions around it, commit to provide the skills base and give them somewhere to try their new stuff.Chuck in a bit of government money, cluster the right institutions around it, commit to provide the skills base and give them somewhere to try their new stuff.
That could mean faster trials for drugs in the NHS or using public roads to test driverless cars.That could mean faster trials for drugs in the NHS or using public roads to test driverless cars.
Hey presto - private investment ensues.Hey presto - private investment ensues.
Some will see this as another example of government's dodgy track record in "picking winners" - the government insists it is backing excellence.Some will see this as another example of government's dodgy track record in "picking winners" - the government insists it is backing excellence.
Of course, all of these new initiatives are being born under the star sign of Brexit which makes them children of uncertainty.Of course, all of these new initiatives are being born under the star sign of Brexit which makes them children of uncertainty.
Read Simon's blog in full here Read Simon's blog in full
The government said the deals would be "strategic and long-term partnerships". Extra funding
It has already pledged to invest an additional £80bn in research and development over the next decade. The government has already pledged to invest an additional £80bn in research and development (R&D) over the next decade.
The additional funding is aimed at putting the UK's investment in this area on a par with other advanced nations. The additional funding is aimed at putting the UK's investment in R&D on a par with other advanced nations.
Currently the UK spends 1.7% of its gross domestic product on research and development, much lower than the 2.4% average of developed countries in the Organisation for Economic Co-operation and Development. Currently the UK spends 1.7% of its gross domestic product on R&D, much lower than the 2.4% average of developed countries in the Organisation for Economic Co-operation and Development.
As part of its industrial strategy, the government is also expected to outline the main global trends which it believes the UK needs to tackle to revive its flat-lining productivity.As part of its industrial strategy, the government is also expected to outline the main global trends which it believes the UK needs to tackle to revive its flat-lining productivity.
These are expected to include artificial intelligence, clean energy such as low carbon technologies, medical care for an ageing population and future mobility such as driverless cars and drone-delivered goods.These are expected to include artificial intelligence, clean energy such as low carbon technologies, medical care for an ageing population and future mobility such as driverless cars and drone-delivered goods.
"More decisions about our economic future will be in our own hands and it is vital that we take them," Mr Clark said."More decisions about our economic future will be in our own hands and it is vital that we take them," Mr Clark said.