AstraZeneca cancels its £450m investment in Speke, highlighting delays and disputes with the UK government

AstraZeneca’s decision to scrap its £450m vaccine plant investment in Speke, Liverpool, has raised serious questions about the UK’s ability to secure major investments in the life sciences sector. Initially hailed as a significant boost for the UK’s “pro-growth” agenda, the cancellation of the deal has left many questioning the government’s role in the debacle.

In March 2024, the announcement of the investment, which was to expand AstraZeneca’s vaccine-making capacity, was touted as a major win for the UK. At the time, AstraZeneca’s CEO, Sir Pascal Soriot, emphasized the company’s commitment to its British roots, while then-chancellor Jeremy Hunt hailed the deal as a “vote of confidence” in the UK’s future as a life sciences superpower. This was a much-needed boost to relations between the life sciences industry and the Tory government, which had been strained by concerns over R&D tax credits and clinical trials after the pandemic.

However, the situation has taken a dramatic turn. AstraZeneca has now pulled the plug on the investment, citing “several factors,” including the reduced offer from the new Labour government. The £90m cut in funding from the Tory government’s original £450m proposal has raised eyebrows, but the timing of the final offer appears to be the real issue. According to reports, AstraZeneca’s UK chair warned the incoming government shortly after the general election in July that the deal needed to be finalized urgently to meet business timelines, but delays in Whitehall decision-making seem to have played a key role in the deal falling apart.

While the Labour government has defended its stance, arguing that the terms didn’t meet its “value for money” criteria, it’s hard to ignore the optics of a £175bn company walking away from an investment in the very sector the UK government has been keen to champion. The fact that the government was warned about the risk of the deal slipping away makes the failure to act quickly all the more glaring.

From a global perspective, it’s hard to fathom that the UK’s largest company and a government that has consistently positioned itself as “unashamedly pro-growth” have failed to secure a major investment in a sector vital to the country’s future. This debacle sends the wrong message to investors and undermines the government’s commitment to revitalising the life sciences industry as a cornerstone of its modern industrial strategy.

The collapse of the Speke deal raises fundamental questions about the UK’s ability to compete in the global market for life sciences investment. Whether it’s the government’s delayed response or the murky world of corporate subsidies, the failure to finalize this deal will leave a lasting stain on the UK’s pro-growth ambitions.