AstraZeneca has scrapped its £450m investment plan to expand a vaccine manufacturing plant in Merseyside, citing a reduction in government support. The decision comes just two days after Chancellor Rachel Reeves outlined Labour’s strategy to accelerate economic growth.
The pharmaceutical giant stated that “protracted” negotiations led to the move, with factors including “the timing and reduction of the final offer compared to the previous government’s proposal.” A Treasury spokesperson responded, saying, “All government grant funding has to demonstrate value for the taxpayer, and despite extensive efforts, a solution was not possible.”
Despite canceling the expansion, AstraZeneca confirmed that its Speke facility would continue producing and supplying flu vaccines globally, with no impact on current jobs.
Political Fallout
Reeves had recently praised AstraZeneca as one of the UK’s “great companies” while promoting Labour’s economic vision. However, shadow business secretary Andrew Griffiths criticized the government, stating, “There’s no vaccine for incompetence.”
The expansion had been announced in the previous Conservative government’s 2023 Budget under Chancellor Jeremy Hunt. Following AstraZeneca’s withdrawal, Hunt called it an “absolute tragedy” and urged Reeves to reopen discussions with the company.
Economic Uncertainty
AstraZeneca’s decision comes amid rising concerns from businesses over increased costs, including National Insurance hikes, minimum wage rises, and reduced business rates relief. While Labour has prioritized economic growth, sluggish performance and strained investor confidence pose challenges for the government’s ambitions.
