UK pharmaceutical giant AstraZeneca PLC on Friday said that it was abandoning plans to build a ￡450 million (US$557.5 million) vaccine plant, a major blow to the Labour Party government’s plans to revive a sluggish economy.
“Following protracted discussions with the government, we are no longer pursuing our planned investment” for Speke in Liverpool, northwest England, a company spokesperson said.
The company cited “timing” issues and a “reduction” in the public subsidies offered by the Labour government compared with its Conservative predecessor.
Photo: REUTERS
A source close to the issue said that British Prime Minister Keir Starmer’s government, elected in July last year, was proposing ￡40 million in subsidies compared with the ￡90 million offered previously.
A government spokesperson said that “a change in the make-up of the investment originally proposed by AstraZeneca led to a reduced government grant offer being put forward.”
“All government grant funding has to demonstrate value for the taxpayer and unfortunately, despite extensive work from government officials, it has not been possible to achieve a solution,” the spokesperson added.
The group already has a factory on the site, which would not be affected by the decision and would continue to produce flu vaccines.
The UK government did not immediately respond when asked for comment.
However, media reports called it a snub to British Chancellor of the Exchequer Rachel Reeves, who has tried in recent weeks to reassure companies worried about tax rises on employers announced at the end of October last year.
Reeves, who has said for months that growth is her priority, on Wednesday outlined a recovery plan whose flagship measure was the government’s approval of a third runway at Heathrow, the largest airport in the UK and Europe.
She also announced relaxations of planning rules and deregulation measures to boost investment, as well as backing several investment projects to make the Oxford-Cambridge axis a “European Silicon Valley.”
Having already stalled in the third quarter and then fallen in October, the UK’s GDP rebounded by a less-than-expected 0.1 percent in November last year. However, the IMF mid last month revised upward its growth forecast for the country this year to 1.6 percent.
The Society of Chemical Industry called AstraZeneca’s decision a “real concern for industry,” because it sent “out the wrong message at a time government is shaping its new industrial strategy.”
“If life sciences are going to be a major pillar of the UK’s new industrial strategy, then the UK needs to make some bold steps forward to ensure it is competitive for life sciences investments,” said the society’s chief executive, Sharon Todd.
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