AstraZeneca Scraps UK Vaccine Plant Expansion Amidst Government Support Dispute

Pharmaceutical giant AstraZeneca has announced its decision to abandon plans for a £450 million expansion of its vaccine manufacturing plant in Speke, Liverpool, citing a reduction in government support as a key factor. The move, which comes just days after Chancellor Rachel Reeves vowed to "kick-start economic growth," has drawn immediate criticism from the opposition and raised concerns about the UK's ability to attract and retain international investment.

The company had initially planned to invest £650 million across two sites in the UK, with £450 million earmarked for the Speke facility and £200 million for an expansion in Cambridge. However, AstraZeneca's spokesperson confirmed that the company is no longer pursuing the Speke investment due to the timing and reduction of the final offer compared to the previous government's proposal. The existing facility will continue to operate, and no jobs are at risk.

The dispute over government support for the project has been ongoing for months, with AstraZeneca reportedly threatening to relocate the planned vaccine operation to the US or India due to the reduced state aid. The Financial Times reported in August 2024 that the new chancellor, Rachel Reeves, wanted to cut the amount of government support for AstraZeneca's vaccine plant from around £90 million to £40 million.

The decision to scrap the Speke expansion has been met with criticism from the Conservative Party, who accused the Labour government of incompetence. Shadow Business Secretary Andrew Griffith stated, "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 cancellation of AstraZeneca's investment plans has significant implications for the UK's life sciences sector and its ability to attract and retain international investment. The sector is worth £108 billion to the economy and provides over 300,000 highly skilled jobs across the country. The loss of this investment, along with the potential for further disinvestment, could damage the UK's reputation as a prime destination for global investors and hinder its efforts to grow the economy.