Merseyside plant had been offered £65mn for redevelopment but Reeves review looks to reduce figure to £40mn
AstraZeneca’s planned £450mn investment in a vaccine-manufacturing site on Merseyside has been cast into doubt, after the Treasury sought to cut the amount of state aid available for the project. Government insiders say Rachel Reeves’s department is looking to reduce the state aid on offer by more than £20mn, raising fears that the UK-listed pharma group could pull the plug — possibly relocating the project to France instead. Jeremy Hunt, former Tory chancellor, is understood to have verbally offered the company at least £65mn to help develop the facility in Speke, according to two people briefed on the stand-off. But they said the Treasury was now offering around £40mn, after Reeves ordered a review of all decisions taken by the previous administration. “There is a sizeable gap that would certainly threaten the investment,” said one person briefed on the haggling between the company and the Treasury. Asked about potential cuts to the funding and the possibility of the investment not going ahead as planned, or moving elsewhere, AstraZeneca declined to comment. Speaking at the company’s second-quarter results last month, chief executive Pascal Soriot said of the plans: “We are absolutely ready to go. The contract is going through the process. Hopefully, we can conclude this quickly and get on with the investment itself.” The company established its vaccines unit after partnering with the University of Oxford to develop a Covid-19 vaccine. It withdrew that in May this year, saying demand had fallen in favour of other vaccines able to deal with new variants of the disease. The existing Speke site, to the south-east of the city centre, is used to manufacture a nasal flu vaccine called FluMist, designed using an egg-based manufacturing process. In March, the Tory government announced that AstraZeneca intended to invest £450mn on researching, developing and manufacturing new vaccines in Speke, at a facility that would operate at net zero with power supplied from renewable energy sources. In January, the Financial Times reported that AstraZeneca could ask for as much as £100mn in support and that any request for taxpayer backing for the plant would be “looked on favourably”. The Treasury confirmed on Tuesday that talks with AstraZeneca were ongoing and did not deny it was looking to cut the potential bill for state aid. “The chancellor receives regular updates on this planned investment in Speke, and we are in positive discussions with AstraZeneca to support its delivery,” a spokesman said. “We are committed to making the UK one of the best places in the world to develop and manufacture new and innovative medicines.
