AstraZeneca scraps £450m vaccine plant in Liverpool after Labour funding cut

AstraZeneca has cancelled plans for a £450m vaccine manufacturing plant in Liverpool, blaming a cut in funding from government. The investment, announced last year in the Tories' spring budget, was dependent on a "mutual agreement" with the Treasury and third parties, it was said at the time.

It will no longer go ahead because Labour ministers have offered less funding than their predecessors, the pharmaceutical giant said. An AstraZeneca spokesperson told Sky News: "Following discussions with the current government, we are no longer pursuing our planned investment at Speke. "Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government's proposal."

The money would have expanded an existing site in Speke and was hailed at the time as a "vote of confidence" in Liverpool and the UK's life science sector. The AstraZeneca spokesperson said that the Speke site "will continue to produce and supply our flu vaccine, for patients in the UK and around the world".

A government spokesperson said a "change in the make-up of the investment" proposed by AstraZeneca had "led to a reduced government grant offer being put forward". The spokesperson added: "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.

"AstraZeneca remains closely engaged with the government's work to develop our new industrial strategy, and more broadly we continue to have a thriving life sciences sector, worth £108 billion to the economy and providing over 300,000 highly skilled jobs across the country." The decision is a blow to Rachel Reeves's renewed attempts to deliver economic growth. In a speech earlier this week which named AstraZeneca, the chancellor said life sciences would be key to boosting the economy. She announced plans to deliver an Oxford-Cambridge growth corridor, which she claimed would add up to £78bn to the public coffers.

Image: Jeremy Hunt speaks to the media during a visit to the AstraZeneca Speke Factory. Pic: HM Treasury

Andrew Griffith, the shadow business secretary, said: "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." The new plant at Speke was intended to enhance the UK's pandemic preparedness. Reports that it was under threat emerged shortly after Labour won the general election, when ministers warned of the need to make cuts to infrastructure projects to fill a £22bn "black hole" in the public finances. The confirmation comes after former health secretary Matt Hancock said that the UK needed to improve its own vaccine manufacturing capability as a "critical" part of preparing for a future pandemic. Mr Hancock told the COVID Inquiry earlier in January that Britain's vaccine manufacturing capacity was "weak".

He added: "Having that manufacture and fill and finish onshore, physically within the UK, is critical in the way that it simply isn't in normal times."

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