AstraZeneca investment deal ‘didn’t add up for UK taxpayer’, says minister

A planned investment deal between the Government and AstraZeneca is not going ahead because it did not “add up for the UK taxpayer”, science minister Sir Chris Bryant said.

He told MPs the Government feels “regretful” about the plan being ditched and “would prefer to have got this over the line”.

The pharmaceutical company cancelled a £450 million investment in a vaccine manufacturing plant in Merseyside, saying Labour failed to match the previous government’s offer of support.

The decision reverses an announcement made by then-chancellor Jeremy Hunt at last year’s March budget that would have seen the pharmaceutical company expand its existing facility in Speke.

Responding to a question in the Commons from shadow science secretary Alan Mak, Sir Chris said AstraZeneca reduced its contribution and the deal “simply didn’t add up for the UK taxpayer”.

He told MPs: “Since the spring budget of 2024, AstraZeneca confirmed a significant change in the composition of their proposed investment, resulting in a smaller level of research and development (R&D) being conducted in the UK.

“As (Mr Mak) would expect, this 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.”

Sir Chris also accused the Tories of sitting on the “so-called deal” with AstraZeneca for four years as the investment decision was “contingent upon mutual agreement with the UK government and third parties”.

He added: “This was absolutely typical of the previous government, they thought that when they’d announced something that it had come to pass.

“But, actually, what you have to do is due diligence to make sure that you’re securing, for the British taxpayer, the best possible financial advantage.”

The minister went on to say the Government made a “significant offer” to AstraZeneca which came “remarkably close” to the £90 million offered by the previous administration.

Conservative former minister Kit Malthouse said the situation “is obviously a terrible failure of negotiation” from the Government.

He said: “This is a terrible blow, not just for Speke and for Liverpool, the city of my birth, but also for our vaccination development environment generally.

“The lack of this production facility means there won’t be a pull for vaccination development in the UK and the various technologies that come with it.

“My question to the minister is what’s he going to do to replace it?”

Sir Chris replied: “Of course, we feel regretful about this.

“We would prefer to have got this over the line, and it wasn’t possible in large measure because AstraZeneca decided that it didn’t add up in whatever particular way for them.”

Labour MP for Blackley and Middleton South Graham Stringer said “losing investment in Merseyside and the North West is not compensated for by investment in the Oxford Cambridge corridor”.

Sir Chris said that as the MP for Rhondda and Ogmore he understands that “investment in one part of the country is obviously great for that part of the country, but it doesn’t necessarily mean that every part of the country is rising with everybody else”.

He added: “AstraZeneca have complained about the length of time that all of this has taken, as I say it started in 2020 and it was only in 2024 that the first announcement was made, as I understand it, by a text message from the then-chancellor of the Exchequer (Jeremy Hunt) to the chief executive of AstraZeneca.

“We might need to learn better ways of informing our decisions about science.”

Chairwoman of the Science and Technology Committee Labour MP Chi Onwurah said the fallout of the deal is “like hearing that two people are madly in love with each other and the wedding is off”.

She said: “The UK Government is committed to growing the economy through increased R&D in advanced manufacturing, AstraZeneca tell us they are committed to investing in the UK, which is where they are headquartered, and where one of their largest customers, the NHS, is based.”

Sir Chris said he wanted to make it “absolutely clear that AstraZeneca is not leaving”.

He said: “There are not people losing their jobs because of this decision.

“There are still 10,000 people employed by AstraZeneca in the UK.”

Confirming the reversal on Friday, a spokesperson for AstraZeneca said: “Several factors have influenced this decision, including the timing and reduction of the final offer compared to the previous government’s proposal.”