Chancellor Jeremy Hunt said he was disappointed the UK ‘lost out this time’ on a new £320m AstraZeneca factory after the drugs giant chose the Republic of Ireland instead .
The group had wanted to build a factory close to its existing sites near Macclesfield, Cheshire, but the “discouraging” tax rate prompted a move to Dublin, AstraZeneca chief executive Sir Pascal Soriot has reportedly said.
Mr Hunt said he agreed with the company’s “fundamental” argument on taxes.
He failed to mention their favorable position as a hub of the European Union.
Speaking to broadcasters at a science facility in central London on Friday, the Chancellor said: ‘We are disappointed to have lost this time and we agree with the fundamental point they are making, which is that we we need our corporate taxation to be more competitive and we want to reduce corporate taxes.
“But the only tax cuts we won’t consider are those that are financed by debt because it’s not a real tax cut. They just pass the bill on to future generations.
Corporate tax rate
The corporate tax rate is set to rise from 19% to 25% in April, while a business tax relief scheme is set to end and support for energy will begin to taper.
AstraZeneca has warned the UK for some time not to take its life sciences sector for granted and that it is losing investment to more competitive countries.
Dr Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI), called on the government to act to provide a “level playing field”.
“More stories about lost investment”
He told BBC Radio 4’s Today programme: ‘There are more stories of loss of investment, like the one we saw with AstraZeneca, than positive noise stories, and we really need to change that.”
He continued: “I think there is a fundamental point that the economy is not growing fast enough right now to pay for the public services that we all need, so we have a choice.
“We can either go so far down the path of fiscal conservatism that it would undermine potential growth industries, or we can act responsibly but try to make sure we are competitive with other countries going through similar challenges. “
Concerns within AstraZeneca and the wider industry have centered on the sales tax on NHS branded drugs, which has soared due to rising demand since the pandemic.
Mr Torbett said: “The deal we have with the NHS, which has gotten to the point where companies are now paying over a quarter of their income – not profit but revenue – back to the government.
“It’s vastly above anything the industry is paying anywhere else in the world and we need to get to the point where the UK is able to compete for investment on an equal footing, and we’re not there yet. not there yet.”
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