by A £450 million plan to expand a site manufacturing the AstraZeneca vaccine in Merseyside has suffered a setback after it was announced that the Government plans to cut some of the funding for the project.
Chancellor Rachel Reeves is believed to be considering cutting the state aid allocated to the scheme by more than £20 million, after her predecessor Jeremy Hunt promised the pharmaceutical company £65 million.
The cuts are part of a comprehensive review of all investment decisions made by the previous government, the Financial Times reported.
Reeves wants to use spending cuts to plug a £22 billion black hole in public finances that she says was “covered up” by the Conservative government.
Almost half of this deficit, £9.4 billion, was due to their decision to fully fund the above-inflation pay recommendations for the public sector, ending years of pay declines and averting the threat of strikes.
Hunt originally announced in March that he would provide government support for the expansion of the Speke plant near Liverpool as part of his budget.
AstraZeneca already operates a facility there with 400 employees that focuses on childhood vaccinations.
The decision to cut funding by a third would be a blow to AstraZeneca, whose chief executive Pascal Soriot – the highest-paid boss in the FTSE 100 – announced last month that the programme was “absolutely ready to go” and hoped the investment could be completed quickly.
The FT reported that the government’s decision could even mean moving the project to France.
A Treasury spokesman said: “We want to make the UK one of the best places in the world to develop and manufacture new and innovative medicines. The Chancellor of the Exchequer will be regularly informed of this planned investment in Speke and we are in positive discussions with AstraZeneca to support its implementation.”
AstraZeneca has made greater inroads into the vaccine market in recent years after the company developed a Covid vaccine in collaboration with Oxford University, of which three billion doses have been administered worldwide.
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In May, it took the vaccine off the market because there was a “surplus of available updated vaccines” against new variants of the virus.
On Tuesday, its market value hit the £200 billion mark for the first time after shares rose 1 percent.
AstraZeneca declined to comment.
