AstraZeneca has withdrawn its plan to invest £450 million in expanding its vaccine manufacturing plant in Speke, Merseyside. The decision comes despite a "significant offer" of support from the Labour government which was ultimately insufficient to secure the investment. This development follows protracted negotiations between the company and the government, which faced delays leading to the cancellation of the project.
The initial announcement of the investment was made by former Conservative Chancellor Jeremy Hunt during last March's Budget. AstraZeneca's decision to cancel the expansion, just two days after the Labour government outlined its economic growth strategy, marks a significant setback for the government's ambitions to accelerate economic progress.
The Labour government's plan, aimed at boosting economic growth by going "further and faster," failed to retain AstraZeneca's commitment. The talks with AstraZeneca were reportedly lengthy and encountered numerous delays. Science Minister Sir Chris Bryant described AstraZeneca's decision as "deeply disappointing," but defended the government's efforts, stating that they had made a substantial offer.
"AstraZeneca aren't leaving. People aren't losing their jobs over this… there are still 10,000 people employed by AstraZeneca in the UK." – Sir Chris Bryant
AstraZeneca remains a major contributor to the UK economy, employing 10,000 people and investing over £2.5 billion annually. Despite this, the company's decision to withdraw its planned investment underscores challenges in securing large-scale corporate commitments amidst governmental transitions.
Alan Mak, Shadow Science Minister, criticized the government's handling of the negotiations, suggesting that it cost the UK potential jobs and damaged Labour's economic credibility.
"Securing this deal was a big test of Labour's economic credibility, and they have failed." – Alan Mak
AstraZeneca cited "the timing and reduction of the final offer compared to the previous government's proposal" as factors influencing their decision. This highlights differences in the negotiation strategies between successive governments and raises questions about the Labour government's approach to retaining foreign investment.
Defending the decision not to provide additional funding, Sir Chris Bryant emphasized that further financial support "simply didn't add up for the taxpayer." This justification indicates a prioritization of prudent fiscal management over immediate economic gains.