AstraZeneca has halted its ambitious plan to invest £450 million in expanding a vaccine manufacturing plant in Merseyside, citing reduced government support as the primary reason. The pharmaceutical giant's decision comes shortly after Labour's Chancellor, Rachel Reeves, unveiled plans to bolster economic growth in the UK. The government had initially offered a grant to back the investment, but changes in the investment's nature led to a reduction in the grant.
The company's facility in Speke will continue its operations in producing and supplying flu vaccines, ensuring uninterrupted service for patients both in the UK and globally. This decision follows closely on the heels of the Labour government's commitment to enhancing UK economic growth, a priority aimed at improving living standards amidst sluggish economic conditions.
"Continue to produce and supply our flu vaccine, for patients in the UK and around the world" – AstraZeneca
The timing of AstraZeneca's announcement is notable, occurring just two days after Chancellor Reeves elaborated on Labour's vision for economic revitalization. The Labour government has been making concerted efforts to stimulate investment within the UK, aiming to attract companies and generate employment opportunities.
However, AstraZeneca's decision was influenced by changes in the government's offer. The reduction in support compared to previous commitments from the Conservative chancellor Jeremy Hunt, who had included the expansion in his Budget, played a crucial role.
"The timing and reduction of the final offer compared to the previous government's proposal" – AstraZeneca
The Treasury defended its position by emphasizing the need for government grant funding to demonstrate value for taxpayers. Despite extensive negotiations, a viable solution could not be reached.
"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" – A Treasury spokesperson
Labour has adjusted its tone regarding UK growth and investment prospects after facing criticism for negative perceptions about the country's finances. Chancellor Reeves remains optimistic about attracting investment.
"Determined to make Britain the best place in the world to invest" – Rachel Reeves
Further complicating the investment climate, changes to National Insurance thresholds and rates are set to take effect. Firms will face a lower threshold for National Insurance payments, along with an increase in employer rates starting in April.