Accept approvals from trusted overseas regulators unless the UK objects

## Summary The UK would let certain new products and technologies already approved by a trusted overseas regulator go on sale in Great Britain within 60 days, unless the UK regulator objected with reasons. Faster access should raise business investment in, and adoption of, productivity-enhancing technology, and make the UK a more attractive early market for innovators. ## Objective Duplicative UK approval of products already cleared by comparable regulators delays market entry, raises compliance costs and deters firms, especially smaller ones, from launching in a market of the UK's size. The main channel would be **productivity**, through faster diffusion of medical technology, drones, robotics and autonomous systems. A secondary channel would be **investment**, as earlier and more certain market access raised returns on UK deployment. A smaller **trade** channel would come from lower barriers to imports of capital goods. ## Measures 1. **Deemed recognition route.** A product approved by a listed trusted regulator could be placed on the market in Great Britain 60 calendar days after notification to the relevant UK regulator, unless that regulator objected in writing with published reasons. An objection would trigger a full UK assessment. Firms could seek internal review and then appeal to the First-tier Tribunal. 2. **Trusted regulators.** An initial schedule would list: - **US:** FDA, FAA - **EU:** EASA, and EU notified bodies for conformity - **Japan:** PMDA, JCAB - **Canada:** Health Canada, Transport Canada - **Australia:** TGA, CASA The Secretary of State could amend the schedule by statutory instrument, after advice from the Regulatory Innovation Office. 3. **Scope.** The route would cover: - medical devices and in-vitro diagnostics (MHRA) - drones and uncrewed aircraft systems (CAA) - industrial robots and machinery (OPSS and HSE) - automated and autonomous systems, including vehicles (DfT and the Vehicle Certification Agency) - novel materials (HSE) - other emerging technologies designated by order It would exclude medicines, which already have the MHRA International Recognition Procedure. It would also exclude any goods covered by a UK-EU alignment agreement, such as sanitary and phytosanitary goods. 4. **Territory.** Great Britain only. Northern Ireland would remain under Windsor Framework arrangements. 5. **Post-market powers.** UK regulators would keep full responsibility for post-market surveillance, and could suspend or withdraw a recognised approval at any time. They would also have automatic suspension powers if the overseas approval were withdrawn. 6. **Fees.** Notification fees would be set at cost recovery and would not exceed existing UK assessment fees. ## Timing and phasing - **2027-28:** Bill introduced in the 2027 session, with Royal Assent assumed by February 2028. Regulators would build notification systems and guidance, and £35m of set-up spending would fall in this year. - **2028-29:** The route would open on 1 April 2028 for all sectors in scope. £15m of set-up spending would fall in this year. Assumed uptake would be about 150 notifications. - **2029-30:** Assumed uptake of about 300 notifications, plus a first statutory review of the trusted-regulator list. - **2030-31 to 2032-33:** Steady state of about 400 notifications a year. A full evaluation would be published in 2031-32. ## Cost and financing Gross cost on top of the March 2025 baseline, in £bn, cash terms: | Year | 2027-28 | 2028-29 | 2029-30 | 2030-31 | 2031-32 | 2032-33 | |---|---|---|---|---|---|---| | Set-up | 0.035 | 0.015 | 0.000 | 0.000 | 0.000 | 0.000 | | Ongoing | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | The one-off £50m set-up cost would be additional departmental spending, assumed to be financed by borrowing. Ongoing operating costs would be absorbed within existing regulator budgets as stated in the idea. This would be a reprioritisation with no change to total spending, partly offset by fees and by fewer full domestic assessments. ## Delivery **Legislation.** A short primary Bill, the Regulatory Recognition Bill, would create the deemed-recognition duty, the objection and appeal process, and the power to amend the schedule. Sector detail would follow in secondary legislation under: - the Product Regulation and Metrology Act 2025 - the Medicines and Medical Devices Act 2021 - the Air Navigation Order - the Automated Vehicles Act 2024 **Responsibility.** DSIT would lead through the Regulatory Innovation Office. MHRA, CAA, OPSS, HSE and the Vehicle Certification Agency would administer the route in their sectors. **Main risks:** - Regulators lacking capacity to review notifications within 60 days, leading to defensive blanket objections. - A safety incident undermining public confidence. - Legal challenge to objections. - Friction with UK-EU alignment commitments where the boundary of "covered goods" is unclear. - Overseas approval standards diverging over time, for example after changes at US agencies. - Weaker incentives to seek UK-first approvals. ## Relation to the baseline The March 2025 forecast includes no specific growth effect from regulatory recognition or wider regulatory reform. Its baseline already reflects the following: - the MHRA International Recognition Procedure for medicines - continued recognition of CE marking for many goods in Great Britain, including medical devices under transitional arrangements - existing CAA and HSE practice of accepting some overseas certification The Regulatory Innovation Office and current MHRA plans for international reliance for devices are not costed in the baseline. The analyst should treat only the additional effect as new, namely: - the 60-day deemed-approval default - the extension to drones, robotics, autonomous systems and novel materials - the £50m set-up spending Any UK-EU alignment agreement agreed after March 2025 is outside the baseline. Its goods are excluded from this policy, so there would be no overlap.

The proposal would let medical devices, diagnostics, drones, robots, automated systems and novel materials already approved by a listed overseas regulator go on sale in Great Britain 60 days after notification, unless the UK regulator objected. The route would open on 1 April 2028, with £50m of set-up spending in 2027-28 and 2028-29. The March 2025 baseline already includes CE-mark recognition and the medicines International Recognition Procedure. It does not include the MHRA's planned international reliance route for devices, so the full time saved on devices approved by the FDA, PMDA, TGA or Health Canada counts as new. The listed regulators mainly approve medical products and aircraft, so the new effect is concentrated in medical technology and drones. It is modelled as three levers: a small rise in nominal government consumption (CGGPS) for set-up, a supply-side shift in trend output (TRGDP) and GDP (GDPM) building to ≈0.025% by 2032, and a modest pull-forward of investment through total fixed investment (IF) into business investment (IBUS).

### Interpretation The proposal would create a deemed-recognition route for products already cleared by a listed overseas regulator. From 1 April 2028, a qualifying product could be placed on the market in Great Britain 60 days after notification unless the relevant UK regulator objected in writing. Qualifying products would be medical devices, in-vitro diagnostics, drones, industrial robots, automated systems or novel materials approved by, for example, the US FDA or FAA, EASA or an EU notified body, Japan's PMDA, or Australia's TGA. The March 2025 baseline already contains three relevant arrangements: the MHRA International Recognition Procedure for medicines, continued recognition of CE marking for many goods (machinery included and, under transitional arrangements, medical devices), and some existing CAA and HSE acceptance of overseas certification. Only three things would therefore be new: - the 60-day deemed-approval default; - the extension to drones, robotics, autonomous systems and novel materials; - £50m of set-up spending (£35m in 2027-28 and £15m in 2028-29). Spending would begin in 2027-28 and market-access effects in spring 2028. The OBR model contains no regulatory variable, so the policy is mapped onto three exogenous levers: - The set-up money is added to nominal general government final consumption (CGGPS) and its public-finance counterpart. - The productivity channel is a common percentage shift in trend output (TRGDP) and in GDP at market prices (GDPM). The March 2025 model sets GDPM exogenously under its indirect T2 fix. Total hours worked (HWA) are held unchanged, so output per hour (PRODH) rises by up to ≈0.025% by 2032. - A small pull-forward of equipment purchases is added to total gross fixed capital formation (IF), which lifts business investment (IBUS) through the investment identity. The key scope judgement is that the listed regulators mostly approve medical products and aircraft. They issue few or no pre-market approvals for road vehicles or novel materials. The only listed route for industrial robots is EU CE marking, which Great Britain already accepts. The new effect therefore comes mainly from medical technology and drones. For medical devices, the MHRA's planned international reliance route is not costed in the March 2025 baseline. The full time saved relative to today's routes (CE-mark recognition or a full UK conformity assessment) therefore counts as new. That makes the medical-device impulse roughly two to three times larger than it would be against a counterfactual that already included the reliance route. ### How it works through the OBR model 1. **The set-up money gives a tiny and temporary demand impulse.** CGGPS would rise by ≈£8.75m a quarter from 2027Q2 to 2028Q1 and by ≈£3.75m a quarter through 2028-29. Real government consumption (CGG) follows through its estimated equation, which passes through about 0.37 of a nominal change on impact. The outlay is less than 0.002% of quarterly GDP, and with a multiplier of about 0.6 it adds well under 0.001% to output. Building notification portals and writing guidance is simply too small an outlay to register in aggregate demand. 2. **Faster market access raises productivity, entered as a supply-side level shift.** Uptake is assumed to be 150, then 300, then 400 notifications a year, with ≈85% clearing without objection. On that basis the gain is built up from four pieces: - ≈£0.1bn a year of avoided duplicate testing and certification; - ≈£0.35bn from products arriving earlier (≈6-9 months for devices that lack a CE mark, relative to a full UK conformity assessment, and 6-9 months for drones); - ≈£0.35bn from products that would otherwise not have launched in Great Britain at all, cumulating as cohorts build; - ≈£0.15bn from wider diffusion and competition. That totals ≈£0.95bn a year by 2032, or ≈0.025% of GDP. TRGDP and GDPM are therefore raised together, by ≈0.002% in 2028 rising to 0.025% in 2032. The intuition is that hospitals, laboratories, surveyors and infrastructure inspectors get better kit sooner and can do more with the same staff, while firms stop paying for testing that duplicates work already done abroad. 3. **More market-sector output raises the desired capital stock one-for-one.** Market-sector gross value added (MSGVA) carries almost all of the gain, ≈+0.028% by 2032. In the investment block the desired capital stock (KSTAR) is given by KSTAR = exp(log(MSGVA) − 0.4·log(COC) + 2.43). Desired capital therefore rises in proportion to market output. The 0.4 elasticity on the user cost of capital (COC) does no work, because no tax or financing term changes. Business investment closes the resulting capital gap (KGAP) only gradually, through the investment equation's response to lagged output growth and its 0.042-a-quarter pull towards the desired stock. On top of this, the costing adds a direct pull-forward of ≈£33m a quarter (chain-volume) by 2032, as private hospitals, drone operators and manufacturers buy newly available equipment earlier. IBUS therefore ends ≈0.05% above baseline. Firms invest more because a more productive economy needs a larger capital stock, and because earlier, more certain access raises the return on deploying new equipment in the UK. 4. **Wages catch up with productivity, with a lag that briefly trims unit labour costs.** The private-sector average earnings index (PSAVEI) responds to productivity with a coefficient of 0.264 on impact. An error-correction term of 0.043 a quarter eventually passes the full gain into real product wages. Meanwhile, market-sector unit labour costs (ULCMS), which divide employee compensation by MSGVA, dip by a few thousandths of a percent each time the productivity level steps up. Employers share productivity gains with staff, but pay settlements adjust over several years rather than instantly. 5. **Lower costs pass through to consumer prices, but only marginally.** ULCMS carries a weight of ≈70% in the services cost index (SCOST). SCOST in turn carries ≈60% of the retail cost index (RPCOST), which drives CPI excluding rents (CPIX), the CPI and hence the consumer expenditure deflator (PCE). Avoided compliance costs and slightly sharper competition from imported devices and drones add a little more. PCE ends ≈0.007% below baseline by 2032. The usual Phillips channel, in which a tighter labour market pushes up wages and prices, plays no part because unemployment does not change. A productivity gain this small lowers the cost of a typical basket of goods by a fraction of a penny per hundred pounds. 6. **Real incomes and consumer spending rise slowly.** Higher wages and marginally lower prices lift real household disposable income (RHHDI) by ≈0.02% by 2032. Equity prices, which track nominal GDP, nudge up household net financial wealth (NFWPE). Household consumption (CONS) responds through a consumption function with a short-run income elasticity of only 0.10, closing 12.5% of the gap to its long-run relationship each quarter. That long-run relationship puts weights of 0.44 on income and 0.22 on net financial wealth. Consumption therefore ends ≈0.015% higher. Households see the gradual rise in income as permanent, but spend it out over several years. 7. **The labour market barely moves because output and potential rise together.** GDPM and TRGDP shift by the same amount, so the output gap (GAP) is unchanged. Total hours (HWA) and average weekly hours (AVH) stay on the baseline path, so LFS employment (ETLFS = HWA/AVH) and the unemployment rate (LFSUR) are also unchanged. The rule of thumb linking spare capacity to unemployment, the Okun relationship, therefore gives no change. Jobs lost at UK testing and certification bodies would be offset by jobs in drone services and medtech distribution. A pure productivity gain lets the economy produce more with the same workers rather than hiring more. 8. **More imported kit partly offsets the domestic gain.** Most of the products concerned are made overseas. The model's import content of investment is 0.234 (import-weighted investment, MIF) and of consumption 0.257 (MC). A share of the extra spending therefore leaks abroad, and some domestic suppliers lose sales to faster-arriving foreign products. The GDPM shift is judged net of this leakage. There is no material export channel, and the policy would slightly weaken the incentive for innovators to seek UK-first approval. 9. **Gilt yields and Bank Rate are unaffected.** The 20-year gilt yield (RL) and Bank Rate (R) are exogenous and held on the baseline path. Inflation is only ≈0.007% lower, the output gap does not change and debt is ≈£0.7bn lower by 2032. Any market move would be far below 0.1 basis point, and the Monetary Policy Committee would have no reason to respond. ### Key assumptions - **Mapping of the productivity channel:** a common percentage shift in TRGDP and GDPM, with HWA and AVH unchanged, so the gain appears as higher output per hour; this is the standard way to represent a supply-side shock in the T2-fix configuration of the model. - **Size of the productivity gain:** ≈£0.95bn a year by 2032 (≈0.025% of GDP), built bottom-up from avoided compliance costs (≈£0.1bn), earlier adoption (≈£0.35bn), products that would not otherwise launch in Great Britain (≈£0.35bn, cumulating) and wider diffusion and competition (≈£0.15bn); plausible range 0.005% to 0.04%. - **Uptake and objection rate:** 150, 300 and then 400 notifications a year as in the proposal, with ≈15% drawing an objection and a full UK assessment; ≈65% are medical devices and diagnostics, ≈25% drones and uncrewed aircraft, ≈10% other. - **Time saved and additionality:** ≈6-9 months for medical devices without a CE mark, relative to a full UK conformity assessment (the MHRA's planned international reliance route for devices is not in the baseline), and 6-9 months for drones and eVTOL aircraft; ≈25% of notified products assumed not to have launched in Great Britain at all without the route. - **Baseline overlap:** machinery and industrial robots already enter Great Britain on CE marks, medicines are excluded, and the listed regulators issue few pre-market approvals for road vehicles or novel materials, so those parts of the scope add almost nothing. - **Investment pull-forward:** £33m a quarter (chain-volume) in IF by 2032, ≈0.05% of IBUS, ramping with notifications; KSTAR moves one-for-one with MSGVA and COC is unchanged. - **Cost-of-capital elasticity:** −0.4 as coded in the KSTAR equation; it plays no direct role because no tax or financing term changes. - **Wage and price pass-through:** in-model PSAVEI coefficients (0.264 on impact, 0.043 error correction a quarter), so wages catch up with productivity over ≈3-5 years and the PCE effect stays below 0.01%. - **Set-up spending:** £35m in 2027-28 and £15m in 2028-29, spread evenly across quarters, treated as resource spending financed by borrowing, demand multiplier ≈0.6. - **Ongoing costs and fees:** ongoing costs absorbed within regulator budgets and fees set at cost recovery, so no net ongoing spending. - **Delivery profile:** Royal Assent in February 2028 and the route open from 1 April 2028; no effect in 2027 and only ≈0.002% in 2028; a short wait-and-see dip in UK applications before opening is judged too small to model. - **Monetary-policy reaction:** Bank Rate (R) and the 20-year gilt yield (RL) held on the baseline path; effects below 0.1bp. - **Tax content of extra output:** ≈37% of the nominal GDP gain returns as receipts, with a one-to-two-quarter collection lag. - **Baseline roll-forward:** March 2025 EFO carried to 2032 at ≈1.7% real growth and ≈2% CPI; nominal GDP ≈£3.4tn in 2030, ≈£3.6tn in 2031 and ≈£3.8tn in 2032; public sector net debt ≈£3.6tn (≈95% of GDP) at end-2032. The in-model coefficients are comparatively firm, and on their own they generate only modest second-round effects. These are the unit elasticity of desired capital on market output, the wage and price pass-through in the PSAVEI and cost-index equations, and the consumption function. Almost all of the uncertainty sits in the external judgements that size the shock: - how much productivity a faster approval route buys; - how many notifications regulators actually let through; - how much time is genuinely saved, given a baseline that already includes CE-mark recognition for many devices; - how many products would otherwise never have reached Great Britain. The result hinges most on the productivity judgement. Each 0.01 percentage point of GDP by 2032 is worth ≈£0.3bn of cumulative borrowing, so the plausible range of 0.005% to 0.04% spans a net borrowing change from roughly −£0.1bn to −£1.1bn. If regulators lacked capacity and objected defensively to half of notifications, the gain would fall to ≈0.015%. If the productivity effect were nil, as the OBR would assume without firm evidence, the policy would simply add £50m to borrowing. The counterfactual matters too. If the MHRA's planned device-reliance route, which is not in the baseline, were introduced anyway, much of the medical-device effect would be pre-empted and the gain could fall towards ≈0.015%. If a UK-EU agreement brought more goods under alignment, the scope would shrink. The monetary-policy assumption is immaterial given the tiny price effect. The 37% tax content is a standard average; it would overstate the receipts feedback if much of the gain accrued as untaxed consumer surplus or to overseas manufacturers. ### Headline results Output (GDPM) would be unchanged in 2027, when only set-up money is spent. It would then build steadily, from ≈0.002% above baseline in 2028 to ≈0.025% in 2032 (≈£0.95bn a year in 2032 prices). The rise reflects successive cohorts of notified products entering use and a growing stock of products that would not otherwise have launched in Great Britain. The profile is back-loaded for three reasons: the route only opens in April 2028, notifications take two years to reach their steady state, and the benefit of each earlier arrival depends on how widely the product is adopted. Because this is a supply-side gain, trend output rises alongside actual output. The gain would persist after 2032, and could grow a little. Business investment (IBUS) moves most in proportional terms, reaching ≈0.05% above baseline by 2032. Firms buy newly available equipment sooner, and the desired capital stock rises with market-sector output. Consumption (CONS) follows real incomes with a lag and ends ≈0.015% higher by 2032. The consumer expenditure deflator (PCE) edges ≈0.007% lower as productivity runs slightly ahead of wages. The unemployment rate (LFSUR) is unchanged because the output gap does not move, and the 20-year gilt yield (RL) is unaffected. All of these effects are very small relative to the economy. The policy is a targeted regulatory reform touching perhaps 1,500 products over the horizon, mainly in medical technology and drones. On these central judgements, its effect on the level of GDP would be about an eighth of the 0.2% that the OBR attributed to the government's planning reforms by 2029-30 in March 2025.

### Costing the policy - **Gross static cost (mechanical spending increase):** +£0.05bn to borrowing over the horizon. This is the £35m in 2027-28 and £15m in 2028-29 for notification systems, guidance and set-up at the Regulatory Innovation Office and the sector regulators. It is added to nominal general government final consumption (CGGPS) and is the only certain line in the table. - **Demand feedback (receipts on set-up spending):** −£0.01bn. A multiplier of ≈0.6 turns the £50m into ≈£30m of extra nominal activity, of which ≈37% returns as income tax, National Insurance and VAT. - **Supply-side receipts feedback (higher productivity):** −£0.69bn. The productivity gain adds ≈£2.2bn to nominal GDP cumulatively over 2028-2032, ≈£0.8bn in 2032 alone, matching the 0.025% rise in GDP at market prices (GDPM). Taxed at roughly the economy-wide average of ≈37%, with a short collection lag, it yields this recovery. - **Debt-interest saving (lower debt):** −£0.03bn. Debt is marginally higher in 2027-2028 but falls below baseline from 2029 and is ≈£0.7bn lower by 2032. At an effective interest rate of ≈4%, this saves a small amount of debt interest. - **Net cumulative PSNB change:** −£0.68bn. Public sector net borrowing (PSNB) is ≈£0.02bn higher in 2027, broadly unchanged in 2028 and then lower each year, by ≈£0.3bn in 2032. The up-front cost is recovered by 2029, but the whole saving rests on the judged productivity effect. On a cost-only basis, which is how the OBR would likely score it without firm evidence, the policy would add £0.05bn to borrowing. ### Debt path Public sector net debt (PSND) tracks cumulative borrowing against a baseline of ≈£3.6tn (≈95% of GDP) at end-2032: - ≈£0.02bn higher at end-2027 and ≈£0.03bn higher at end-2028; - ≈£0.03bn lower at end-2029; - ≈£0.17bn lower in 2030 and ≈£0.38bn lower in 2031; - ≈£0.68bn lower at end-2032. On nominal GDP of ≈£3.8tn in 2032, the lower numerator alone would cut the debt ratio by ≈0.018 percentage points. Nominal GDP is also ≈0.022% above baseline, the 0.025% real gain less a slightly lower GDP deflator. At a 95% baseline ratio, that larger denominator removes a further ≈0.021 points, so PSND/GDP ends ≈0.039 points lower. For a policy that raised debt, a higher nominal GDP denominator would partially offset the higher numerator. Here both move in the favourable direction, because the policy raises output while lowering debt. On the OBR's standard assumptions, the policy would be self-financing within the horizon if the productivity gain materialised. It would leave a small structural improvement of ≈£0.3bn a year (≈0.008% of GDP) by 2032. The fiscal stakes are tiny either way: the downside is the £50m set-up cost plus any unfunded pressure on regulators' budgets, and the upside is a few hundred million pounds a year at most.

### Overall pattern Once fully in effect in 2032, the policy would generate a productivity and compliance-cost gain of ≈£0.95bn a year. Households in aggregate would be ≈£0.5bn a year better off, ≈£17 per household or ≈0.03% of income. Of the rest, ≈£0.3bn would go to the Exchequer in tax, and the remainder would accrue to overseas owners of the firms involved or be retained in companies. Businesses capture the first-round gain. Overseas manufacturers and their UK distributors would avoid duplicate testing, and UK hospitals, drone operators and manufacturers would get new kit sooner. That gain passes to households through wages over time and through profits to shareholders and pension funds. UK approval and testing bodies would lose some business. The pattern is broadly neutral. Cash gains rise with income because earnings and shareholdings do, from ≈£5 a year in the poorest tenth to ≈£43 in the richest, but the gain is ≈0.03% of income in every decile. The largest tangible effect is not cash at all: earlier access to new medical devices and diagnostics for an estimated ≈300,000 patients a year. Because borrowing would also be slightly lower, the average household would be a small net gainer once the public finances are counted, and no household group would be a net loser. ### Who gains - **Gross household income above £100,000:** ≈£43 a year, ≈0.03% of income. These ≈3 million households have the highest earnings and hold most directly owned shares and the largest pension pots. They therefore receive the biggest cash share of higher profits and wages, though the amount is trivial relative to their income. - **Households with someone in work:** ≈£17 a year, ≈0.03% of income. Over several years, wages rise in line with the small productivity gain, giving ≈19 million working households under £20 each after tax and National Insurance. - **Patients getting new devices or diagnostics sooner:** not valued in cash. An estimated ≈300,000 people a year would be treated or tested several months earlier with a device or diagnostic already approved by a trusted overseas regulator. The health benefit is real but largely sits outside measured GDP. ### Who loses - **No direct household losers, and lower borrowing overall:** No household group would pay more or lose income directly. The £50m set-up cost would be borrowed up front but recovered through higher receipts by around 2029, after which borrowing would be lower (≈£0.3bn a year by 2032). The direct losers would be businesses. Around ten UK Approved Bodies and other testing firms would lose some duplicate assessment work, and UK innovators who relied on a UK-first approval would face faster foreign competition. There is also a non-cash safety risk if a deemed approval let through a product that a UK assessment would have rejected. ### Paying for it and bond markets - **Future taxpayers:** ≈£10 a household a year, gain. Borrowing would be ≈£0.3bn a year lower in 2032. Divided by ≈29 million households, that is ≈£10 a household a year. This is an ongoing annual amount rather than a one-off. Its stock counterpart is that public sector net debt (PSND) would be ≈£0.68bn lower by the end of 2032, ≈£23 a household that future taxpayers would not have to service or repay. This is the same saving measured cumulatively, not an extra gain. - **Mortgage borrowers:** £0 a year, neutral. The 20-year gilt yield (RL) moves by less than 0.1 basis point. That is far too little to reach new or refixed mortgage rates, which move by ≈£1,400 a year per percentage point on an average ≈£140,000 mortgage. Under the fiscal rules, any change in borrowing must eventually be matched by tax or spending, or banked. Here the change is a small saving rather than a cost. If it were used to cut broad-based taxes, higher-income households would gain most in pounds. If the productivity gain did not materialise, the £50m set-up cost (≈£2 a household) would be a small net loss to future taxpayers. ### Across the income distribution The decile figures rise from ≈£5 a year in the poorest tenth to ≈£43 in the richest. As a share of income they are flat at ≈0.03% throughout, with a slight bump to ≈0.04% in the eighth decile, where earnings make up the largest share of income. Lower deciles gain less in cash for two reasons: more of their income comes from pensions and benefits, which are uprated with prices rather than productivity, and they hold few shares. The top decile gains more because it receives most dividend and pension-fund income and the highest wages. The averages hide the people who matter most for this policy. One group is patients who would get a newer device or test sooner; they are concentrated among older people and so in the lower-middle deciles. Another is workers in the affected sectors, such as drone operators, medtech distributors and staff at UK testing bodies, who could see larger gains or losses than the decile averages suggest. ### Caveats These figures are a judgement-based overlay, not model output. They assume that the productivity gain splits roughly 55:45 between labour and capital, that about a third of the after-tax capital share accrues to overseas owners or is retained in companies, and that labour's share reaches wages over several years. They are first-round effects that exclude the very small second-round effects on jobs, prices and interest rates shown in the macro table. They also leave out the health benefit of earlier access and the uncertain risk of unsafe products. They lean on ONS Effects of Taxes and Benefits on Household Income data for the distribution of earnings and investment income, and on Family Resources Survey household counts.