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7 December 2021

Why the government’s planned sale of a vaccine centre is an act of national self-sabotage

With Omicron cases surging across the world, such shortsighted economising could prove costly.

By James Meadway

Three days after the World Health Organisation placed Omicron on its Covid “variants of concern” list, news slipped out that the UK government was planning to sell the publicly funded Vaccine Manufacturing and Innovation Centre (VMIC) in Oxford. While other countries have been scrambling to build vaccine capacity, Britain has chosen this precise moment to sell, to the highest bidder, what was to be its first strategic vaccine development and manufacturing centre.

Government excuses were classically shortsighted. Since the private sector has stepped up so marvellously during the pandemic, producing huge quantities of vaccines, a government source told the Financial Times, there was simply no need for the government to take part in making them itself.

Some might raise eyebrows at this. They might recall the international squabbles that erupted around the introduction of the first bout of Covid-19 vaccines, with the UK and EU at loggerheads over the delivery of vaccines produced in Belgium earlier in the year. This could suggest that flinging ourselves on the mercy of the market may not be the best emergency pandemic response available. UK-EU relations have, if anything, deteriorated since then. And vaccine distribution globally has been not only notoriously unequal, but disrupted by petty “vaccine nationalism”.

VMIC, when finished in 2023, is expected to be able to produce 70 million doses in six months. But rapid production is only one of the reasons to fund and build VMIC. The others include providing critical support to vaccine manufacturers at various stages in the process, from development through to taking a new vaccine into public use. This includes, for instance, manufacturing vaccines on a smaller scale for early-stage trials. As Helen Thomas has argued, these specialist functions are hard to develop, and depend on close, long-term relationships between producers and researchers of a kind that major commercial manufacturers will not necessarily have an incentive to support. There is a solid case for government at least maintaining a stake in the plant.

This is the strategic capacity VMIC was intended to provide. Letting it potentially slip away will set back the UK’s medical industry and its public health provision for the sake of a few hundred million pounds – peanuts, relative to the spending on Covid in the last year, or the costs of failing to provide this capacity in any future pandemic.

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If a Whitehall effort to save money today results in huge long-term costs, it’s usually not hard to find a culprit. But although the penny-pinching VMIC sale has sticky Treasury fingerprints all over it, Johnson’s government shares the blame.

Kwasi Kwarteng, shortly after his appointment as Business Secretary, ditched the 2017 Industrial Strategy in favour of a “Plan for Growth”. Gone were the detailed “mission-led” plans of the original strategy in favour of “nothing more than a list of existing policy commitments, many of which are hopelessly delayed”, in the words of Darren Jones, the Business Select Committee’s chair.

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Gone, too was, the Industrial Strategy Council, chaired by then-Bank of England chief economist Andy Haldane with members from across industry, established as recently as November 2018 to independently evaluate the government’s progress. Its last published report had provided a detailed overview of Britain’s vaccination response to Covid-19. The report lauds the effective direction and close cooperation of business, government and public research institutions. VMIC is heralded as a “cornerstone” of the “government’s strategy to secure the supply of vaccines in the long term”.

So much for the long term. It’s short-term thinking that has come to define this government, as it has so many times before. The disputes between No 10 and the Department for Business, and the Treasury, are well known: No 10 and Business want to spend; the Treasury does not. But for all the internecine squabbling here, all three departments seem institutionally incapable of lifting their sights a little. At the very moment the national economy most needs some longer-term planning, we have a government and institutions that appear close to incapable of it.

The results are becoming quickly apparent. While the $40bn sale of Cambridge-based semiconductor chip designer Arm Holdings to US chipmaker Nvidia is held up on national security grounds, the sale of Britain’s biggest semiconductor manufacturing plant, Newport Wafer Fab, in Wales, to Chinese-owned Nexperia is waved through. The opportunity to develop an independent semiconductor industry in the UK is being squandered.

In two critical industries of the future, the weakness of Britain’s institutions, right at the centre of government, is only too apparent. In a world economy increasingly falling under the sway of giant firms closely linked to their domestic governments – or, in the case of the EU, seeking close supranational relationships – the UK is going to fall short.

[See also: How the semiconductor crisis signals the end of neoliberalism]

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