Blow to AstraZeneca vaccine project, Reeves plans cuts

A £450m plan to expand a manufacturing site for the AstraZeneca vaccine in Merseyside has suffered a setback after it emerged the government plans to cut some of the funding for the scheme.

Finance Minister Rachel Reeves is reportedly considering cutting state support for the programme by more than £20 million, after her predecessor, Jeremy Hunt, promised the drug company £65 million.

The cut is part of a major review of all investment decisions made by the previous government, the Financial Times reports.

Reeves wants to cut government spending to plug a £22 billion black hole in the public finances that she says has been “covered up” by the Conservative government.

Almost half of the deficit, £9.4bn, was the result of her decision to fully fund above-inflation public sector pay recommendations, ending years of falling wages and averting the threat of strikes.

Hunt initially announced plans in his Budget in March to provide government support for the expansion of the Speke facility, near Liverpool.

AstraZeneca already has a facility at the site that employs 400 people and focuses on childhood vaccinations.

The decision to cut funding by a third would be a blow to AstraZeneca, whose CEO Pascal Soriot – the highest-paid boss in the FTSE 100 – said last month it was “absolutely ready to go ahead” with the plan and hoped the investment could be completed quickly.

According to the FT, the government’s decision could even lead to the project being moved to France.

A Treasury 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. The Chancellor is receiving regular updates on this planned investment in Speke and we are in positive discussions with AstraZeneca to support its delivery.”

AstraZeneca has made a bigger push into the vaccine market in recent years after developing a Covid vaccine in collaboration with Oxford University. 3 billion doses have been administered worldwide.

In May, the vaccine was withdrawn from the market due to a “surplus of available, updated vaccines” targeting new variants of the virus.

On Tuesday, the stock market value topped £200 billion for the first time as shares rose 1%.

AstraZeneca declined to comment.