AstraZeneca

Alan Mak Excerpts

Monday 3rd February 2025 Commons Chamber

[Alan Mak (Havant) (Con)]

(Urgent Question):To ask the Secretary of State for Science, Innovation and Technology if he will make a statement on AstraZeneca.

[The Minister for Data Protection and Telecoms (Chris Bryant)]

As the largest company listed on the London Stock Exchange, employing more than 10,000 people and investing about £2.5 billion every year in the UK, AstraZeneca is a close and valued partner to this Government and is critical to the UK’s thriving life sciences sector. We saw that in the covid-19 pandemic, when AstraZeneca partnered with the University of Oxford to create a safe and effective vaccine that was manufactured and distributed around the world, saving millions of lives.

This type of partnership for the prevention of illness is critical to achieving the Government’s ambition of reducing the burden on the NHS. AstraZeneca’s decision not to invest in Speke, Liverpool is therefore deeply disappointing and follows intensive work and collaboration between the Government and the company. This collaboration on Speke dates back to 2020 and led to an announcement at the spring Budget 2024 when AstraZeneca set out its intention to invest £450 million into its flu vaccine manufacturing facility. To secure that investment, the previous Chancellor provided assurance of His Majesty’s Government support, valued at around £90 million, subject to successful completion of due diligence. That support was based on His Majesty’s Government’s initial assessment of figures provided by the company.

Both the previous Government and this Government have always made clear that full due diligence would be required before a final Government offer could be confirmed. Since the spring Budget, AstraZeneca confirmed a significant change in the composition of its proposed investment, resulting in a smaller level of research and development being conducted in the UK. As the shadow Minister would expect, that change in AstraZeneca’s UK investment resulted in a corresponding change in Government support.

Our revised Government offer sought to ensure value for money for the taxpayer and followed due diligence of the investment put forward by AstraZeneca. We remain closely engaged with AstraZeneca as we develop our new industrial strategy, build a health system fit for the future and drive up economic growth. In the spring, the Government will release our industrial strategy, containing a comprehensive plan for growing the life sciences sector. That will build on the significant momentum generated by the plan for growth, including delivery of the Oxford-Cambridge growth corridor, as well as the Budget announcement of the life sciences innovative manufacturing fund, the suite of inward investment announced at the international investment summit and the strategic partnerships announced with Oxford Nanopore and Eli Lilly.

[Alan Mak]

Thank you, Mr Speaker, for granting this urgent question.

Just five days ago, in another speech about growth designed to divert attention from the total lack of growth caused by Labour’s high taxes and anti-business approach, the Chancellor specifically praised AstraZeneca: she knew that the last Conservative Government had successfully negotiated a deal for Britain’s biggest public company to invest £450 million into Britain’s economy.

Under the Conservative deal, AstraZeneca would have expanded its flu vaccine factory on Merseyside, creating new jobs, improving the UK’s pandemic preparedness and sending a clear message to the world that Britain’s life sciences sector is open for business. Instead, Labour has cut the funding that we agreed and has imposed a national insurance jobs tax. That has destroyed the business case for expanding the factory and the deal is now off. Will the Minister explain why the Secretary of State for Science, Innovation and Technology failed to stand up to the Chancellor when she cut his funding, destroying the deal and handing high-quality jobs and investment to our competitors?

In the past 12 months, AstraZeneca has committed to investing more than £1 billion in Singapore, nearly £3 billion in the US and more than £450 million in Canada. It could have invested £450 million in our country, too, so what are the Government doing to bring back the jobs and investment that they have just turned away?

By last July, all that was required was for Labour to confirm that it would proceed with our deal. AstraZeneca wrote to the Chancellor and the Science Secretary on 9 July, but received no reply. It wrote to the Secretary of State for Business and Trade in early July too, but he fobbed it off. The company did not receive its answer until last October. By then, it was too late to deliver the project and now the deal is dead. Will the Minister and the Science Secretary write to the Chair of the Science, Innovation and Technology Committee, the hon. Member for Newcastle upon Tyne Central and West (Chi Onwurah), offering to appear before her Committee to explain what went wrong and how such failures can be avoided in the future?

Delivering this deal secured by the Conservatives was a big test of Labour’s economic credibility, and it has failed. In the same week that it talked about growth, it has botched a deal that was vital to our economy. Labour promised growth, but delivered failure and let Britain down again.

[Chris Bryant]

What utter nonsense. We endured 14 years of growth that even the shadow Minister’s own Back Benchers used to describe as anaemic and feeble. Average growth under Tory Governments is 1.2%; average growth under Labour Governments is 2.4%. We are far more likely to secure growth in the British economy under a Labour Government.

The shadow Minister simply did not listen to what I had to say. The Conservatives sat on this so-called deal with AstraZeneca for four years. The process started in 2020, and it is interesting what was announced to the House and what was actually announced in the paperwork. In the House, the then Chancellor said that AstraZeneca had announced plans to invest to

“fund the building of a vaccine manufacturing hub in Speke in Liverpool.”—[Official Report, 6 March 2024; Vol. 746, c. 845.]

He did not make any mention in the Chamber of the money that was needed from his Department to be able to pay for it. The paperwork that attended that announcement stated:

“AstraZeneca’s investment decision is contingent upon mutual agreement with the UK Government and third parties, and successful completion of regulatory processes.”

That was absolutely typical of the previous Government: they thought that when they had announced something it had come to pass, but due diligence is needed to ensure the best possible financial advantage for the British taxpayer.

We have seen clearly that AstraZeneca’s original intention last year was to deliver £150 million-worth of R&D, but then it decided to cut that to something like £90 million-worth. That was its decision, based on its own investment decisions, and we as a Government had to assess whether £90 million from the UK—as supposedly promised by the previous Chancellor—was the right amount of money to put into the pot, or whether it was better to offer slightly less. Unfortunately, at the end of that process AstraZeneca decided that it would not proceed.

Let me make it absolutely clear to the hon. Member that this is the best country in the world in which to invest in the private sector. Some £63 billion of investment was secured at the growth summit last year, and £14 billion—[Interruption.]