Newsletter No 17

Date: 31 October 2025

(This one is a few days late due to a technical hitch)

 

Critical minerals and the “just transition”

This month Critical Takes interviewed Suneeta Kaimal, who heads the Natural Resource Governance Institute (NRGI), about her part in the UN Secretary General’s expert panel on mining critical minerals for the energy transition away from fossil fuels.

The panel came out a year ago with a report calling for human rights to be at the centre of mining for critical minerals. I wanted to find out what had happened in the year since then. As Suneeta explains, the global context which the report is intended to influence is pretty difficult.

We also talked about the Publish What You Pay coalition changing its name to the Resource Justice Network and broadening its aims, as featured in last month’s newsletter.

I hope you enjoy the interview (there’s also a transcript.) For people who worry about AI taking all our jobs, I have to mention that in the part about Indonesian mineral exports, my audio software transcribed “nickel” as “Nicole”.

 

Big Pharma in the UK

If you see anything written by me on Critical Takes, other than this newsletter, it either means some other article has fallen through or that I’ve got a bee trapped in my bonnet.

This month the angrily buzzing bee was the superficial British media coverage of a political battle between Big Pharma and the UK’s government over the amount that our National Health Service spends on medicines, against a background of Trump’s tariffs.

To put it bluntly, Big Pharma has been trying to shake down the UK for more public money for its drugs. Our government is generally predisposed to give multinationals whatever they want but is also feeling the financial pinch, like governments everywhere, and for once appears to have fought back before ultimately giving in.

Various media outlets reported the claims of Big Pharma executives that the UK is a bad place to do business and will lose out on private investment as a result, claims which were clearly intended to pressurise the government, but nobody seems to have checked these companies’ UK accounts to try and assess how true these claims are.

So I studied the accounts of the US firm Eli Lilly, which makes the weight-loss drug Mounjaro. It seems likely to me that Eli Lilly actually makes quite a lot of profit from its UK sales but books this profit in Ireland, Switzerland and/or the Netherlands in order to pay less tax on it.

In other words, the claim that the UK is not a good place to do business should probably be taken with a pinch of salt. That pinch of salt should be applied by the business media as part of their reporting and it hasn't been, in my view.

Booking profits in tax havens is a common practice of Big Pharma (and I'm obliged to point out, not a criminal practice) and the solution requires a redesign of corporate taxation so that more profit is attributed to people’s labour rather than to intangible assets, which can be moved to wherever the tax rate is lowest.

Under such a redesign the likes of Ireland and Switzerland would still get a chunk of the profit to tax, because drugs are actually made in those countries, but more profit would be taxable in the countries where the consumers are, like the UK, and less (or possibly none) of the profit would end up in tax havens where the underlying intellectual property is kept, possibly Delaware in this case.

 

Business tax breaks are just opaque subsidies

It also turns out that the British pharmaceutical company GSK – another member of the grumbling Big Pharma chorus – has been collecting roughly a quarter of the value of the UK’s Patent Box tax break since it was created back in 2013 at the urging of, among others, GSK.

The Patent Box is a well-known boondoggle, a tool of tax competition with other European countries which is commonly dressed up as an incentive for “innovation”. It cost the UK nearly £2 billion in foregone tax revenue last year, of which GSK claimed £486 million.

The origin of this finding is that I looked into the Patent Box and discovered that, despite official statements implying that its tax benefits are widely spread across the private sector, a lot actually goes to a handful of companies. I guessed that GSK must be one of these because in its global accounts, GSK names the Patent Box as one of various tax breaks for intellectual property which it benefits from. 

I was going to use this information in a blog about tax breaks for Critical Takes, then I realised it might be quite significant for the UK and shared what I had with TaxWatch. They did a very comprehensive and expert investigation which came up with these huge figures and showed how flimsy the justification is letting GSK off all this tax.

This is all quite opaque: GSK is explicit in its global accounts that it is a major beneficiary of the Patent Box, (and now publishes a country-by-country report), but to find out the monetary value of that tax benefit you have to do what TaxWatch did and comb through the accounts of numerous subsidiaries, then apply some knowledge to the figures.

For context: the UK government was planning this year to cut the welfare benefits of disabled and vulnerable people, on the grounds that the state can’t afford the cost, and only abandoned the plan after an outraged rebellion by their own legislators. Whoever signed off on GSK’s UK tax returns must have known this, because it was all over the British media, yet still concluded that GSK and its shareholders are more deserving of £486 million in public subsidy than disabled people in the UK. Make of that what you will. Morally speaking, what I make of it is not printable.

Opaque and costly business tax breaks are a global problem and campaigners usually respond by calling for more rigorous cost-benefit analysis. I  don’t think this works with “policy” tax breaks – those which are designed to get companies to act in a particular way – because those companies have a strong incentive to say that they "need" the tax break in order to act in that way, even if they don't really. This is such a big unknown - what would the company have done if there had been no tax break? - that I don't see how cost-benefit analysis can get around it.

It would be better just to scrap policy tax breaks altogether. If a government chooses to subsidise private profits (and there might be cases where it needs to), then better to do it transparently through an open subsidy or a loan, rather than gaslighting the citizenry with a load of guff about “innovation” as the UK does with the Patent Box.

 

Interesting takes in other places:

There’s a chilling account here from Alberto Alemanno of a political campaign against NGOs in the European Union as the EU prepares to slash regulations on big business in the name of “competitiveness.”

And here is a very forthright statement from the secretariat of the WHO Framework Convention on Tobacco Control, warning that Big Tobacco is trying to derail its work. The list of industry tactics will be familiar to all of you …

 

Coming up on Critical Takes:

How the Big Four consulting firms deploy “strategic duplicity” to pose as the good guys to governments while advising the wealthy on how to avoid tax.

Next month there will be a short survey to find out what people find useful about Critical Takes and what they'd like to see more of on the platform. I hope you can spare a couple of minutes to take part, as it will help me decide the direction of Critical Takes next year.

Until next month, good luck with your work!

Diarmid