By GB News (World News) | Created at 2025-01-31 17:06:08 | Updated at 2025-01-31 20:53:57
3 hours ago
AstraZeneca has abandoned its £450m plans to expand a vaccine manufacturing plant in Merseyside, dealing a significant blow to Labour's economic agenda.
The pharmaceutical giant announced the decision just two days after Chancellor Rachel Reeves had lauded the company whilst outlining Labour's growth strategy.
The company cited reduced government support compared to the previous Conservative administration's proposal as a key factor in their withdrawal.
AstraZeneca revealed that "protracted" negotiations and the "timing and reduction of the final offer" influenced their decision to withdraw.
The pharmaceutical giant announced the decision just two days after Chancellor Rachel Reeves had lauded the company
PA/Getty
The Treasury defended its position, stating that changes to the "make-up of the investment" necessitated a reduction in government grant funding.
"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 explained.
The company confirmed its Speke site would continue producing flu vaccines for UK and global patients.
The political fallout was swift, with shadow business secretary Andrew Griffiths declaring: "There's no vaccine for incompetence."
"In the same week they talked about growth, Labour seem to have fumbled a deal with AstraZeneca, one of the UK's largest companies and central to the critical life sciences sector," Griffiths added.
The announcement proved particularly embarrassing as Reeves had just days earlier named AstraZeneca as one of Britain's "great companies", whilst promising to make the UK "the best place in the world to invest".
The investment plans had originally been set out by former Conservative chancellor Jeremy Hunt in his March Budget last year.
Reports indicate that discussions between Labour and AstraZeneca had encountered delays since the change in government.
The decision comes as businesses prepare for April tax increases, including higher National Insurance rates for employers and a lower payment threshold.
Companies have warned that rising costs, including minimum wage increases and reduced business rates relief, could impact their ability to invest and hire.
While AstraZeneca confirmed no current jobs at the Speke site would be affected, the cancellation raises questions about Britain's investment climate.
The chancellor has recently attempted to shift her tone regarding UK growth prospects, following criticism that she and Prime Minister Sir Keir Starmer were overly negative about the country's finances.
However, this high-profile investment withdrawal may undermine Labour's efforts to present Britain as an attractive destination for major corporate investment.
