AstraZeneca said to be wavering on £450m UK vaccine plant
Rachel Reeves appointed as Chancellor of the Exchequer by Keir Starmer, 5th July 2024
AstraZeneca's plan to invest £450 million ($578 million) in a vaccines manufacturing plant in the UK has been thrown into doubt, claims a report in the Financial Times.
The Treasury, under new Chancellor of the Exchequer Rachel Reeves, is said to be seeking a reduction to the state aid package made available to support the project, which was held up as a vote of confidence in the UK's life sciences sector when it was first reported earlier this year.
At the time, there were reports that the previous government was offering up to £100 million in subsidies for the investment programme at AZ's site at Speke in Liverpool, earmarked for the construction of a new plant that would be powered by renewable energy and upgraded facilities for the research, development, and manufacturing of vaccines.
According to the FT article, which cites government insiders as its source, the figure was actually closer to £65 million, but the new Chancellor wants to reduce it by "more than £20 million." It suggests that position is raising fears that AZ could abandon its UK plan and possibly move it to France.
After Reeves came into office she carried out an audit of public spending, claiming that she had inherited a £22 billion “black hole” in the government finances from the prior Conservative government in the "worst set of circumstances since the Second World War," and would have to find ways to plug the gap.
In a statement, the Treasury said it is "committed to making the UK one of the best places in the world to develop and manufacture new and innovative medicines," adding: "The Chancellor receives regular updates on this planned investment in Speke, and we are in positive discussions with AstraZeneca to support its delivery."
At the moment, the Speke plant employs around 400 people and is dedicated primarily to the production of AZ's FluMist vaccine for influenza. When the plan was first announced, chief executive Pascal Soriot said the investment would "enhance the UK’s pandemic preparedness and demonstrate...ongoing confidence in UK life sciences."
The drugmaker – which last year opted to build a new $360 million facility in Ireland, rather than the UK – has declined to comment on the FT's report. Soriot had previously voiced his concern about factors inhibiting investment in the UK, including a high level of corporate tax rates in the UK compared to Ireland.
Alongside the £450 million for the Speke project, AZ also announced £200 million in spending on expanding its flagship Discovery Centre (DISC) R&D facility in Cambridge.
