AstraZeneca has cancelled plans for a £450m expansion of its manufacturing plant in Speke, Merseyside, blaming a cut in the funding on offer from the government.
Only two days after Rachel Reeves highlighted life sciences as a key UK strength, in a speech setting out her plans to kickstart economic growth, the company said it had decided to pull its investment.
A spokesperson for AstraZeneca said: “Following discussions with the current government, we are no longer pursuing our planned investment at Speke.
“Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government’s proposal.”
AstraZeneca’s chief executive, Pascal Soriot – the highest-paid boss in the FTSE 100, with a pay package of £18.7m – had previously suggested the investment was, “absolutely ready to go”.
The pharmaceutical company stressed that the existing facility at Speke, which employs 400 people, would continue to manufacture its flu vaccine.
Reeves’s predecessor as chancellor, Jeremy Hunt, announced plans to provide government support to expand the Speke facility, near Liverpool, as part of his budget last March.
However, the project has been under threat since the Labour government decided to review taxpayer funding for inward investment projects, seeking to get better value for money, given what Reeves has claimed was a £22bn “black hole” in the public finances.
In her speech in Oxfordshire on Wednesday, the chancellor said that as part of the government’s industrial strategy, it had already “provided funding to unlock investment in sectors like aerospace, automotives and life sciences”.
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The announcement will be a blow to the government’s hopes of continuing to attract high-profile investment projects, and underlines the difficulties of reconciling its push to woo businesses with Reeves’s determination to balance the books.
The Department for Business and Trade has been approached for comment.
Article by:Source: Heather Stewart and Julia Kollewe
