The British pharmaceutical company AstraZeneca has hinted amidst stalled negotiations with the Labour government that it may move its planned vaccine plant in Merseyside to Philadelphia. The reason for the consideration is Chancellor Rachel Reeves' intention to drastically cut the originally promised government funding for the project.

According to people familiar with the matter, Reeves plans to reduce the pledged government support from around 90 million pounds to only 40 million pounds. The conservative predecessor government had originally committed funding of up to 70 million pounds for the development of the AstraZeneca facility in Speke, and an additional 20 million pounds for research and development by the UK Health Security Agency.

AstraZeneca has now signaled to British government officials that the company is considering moving the planned vaccine production to Philadelphia, where generous financial incentives for industrial projects are being offered. Alternatively, production could also take place in India, where AstraZeneca has previously manufactured vaccines.

In March, the Conservative government announced that AstraZeneca would invest £450 million in research, development, and production of new vaccines in Speke. At that time, the company was striving to secure up to £100 million in government support.

The potential cuts by the current government contrast with the generous incentives offered by US President Joe Biden as part of his industrial policy. Andrew Griffith, the Shadow Minister for Technology, described a reduction in funding as "a huge setback for the United Kingdom" and emphasized the importance of the country remaining at the center of AstraZeneca's research activities.

A person familiar with the negotiations stated that AstraZeneca felt it had received commitments from the previous government that might not be upheld now. This could result in the United Kingdom having to import vaccines in the future instead of exporting them, which could imply a loss of national sovereignty.

AstraZeneca had built its vaccine division after collaborating with the University of Oxford to develop a Covid-19 vaccine. The company ceased production of the vaccine in May as demand shifted towards other treatments that were more effective against new Covid variants.

AstraZeneca stated that it remains committed to advancing the project in Speke and is engaged in constructive discussions with the British government. There are currently no talks about relocating to the USA or India.