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AstraZeneca has cancelled plans for a £450m vaccine manufacturing plant in Liverpool, blaming a cut in funding from government.

The investment, announced last year in the Tories’ spring budget, was dependent on a “mutual agreement” with the Treasury and third parties, it was said at the time.

It will no longer go ahead because Labour ministers have offered less funding than their predecessors, the pharmaceutical giant said.

An AstraZeneca spokesperson told Sky News: “Following discussions with the current government, we are no longer pursuing our planned investment at Speke.

“Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government’s proposal.”

The money would have expanded an existing site in Speke and was hailed at the time as a “vote of confidence” in Liverpool and the UK’s life science sector.

The AstraZeneca spokesperson said that the Speke site “will continue to produce and supply our flu vaccine, for patients in the UK and around the world”.

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A government spokesperson said a “change in the make-up of the investment” proposed by AstraZeneca had “led to a reduced government grant offer being put forward”.

The spokesperson added: “All government grant funding has to demonstrate value for the taxpayer and unfortunately, despite extensive work from government officials, it has not been possible to achieve a solution.

“AstraZeneca remains closely engaged with the government’s work to develop our new industrial strategy, and more broadly we continue to have a thriving life sciences sector, worth £108 billion to the economy and providing over 300,000 highly skilled jobs across the country.”

The decision is a blow to Rachel Reeves’s renewed attempts to deliver economic growth.

In a speech earlier this week which named AstraZeneca, the chancellor said life sciences would be key to boosting the economy.

She announced plans to deliver an Oxford-Cambridge growth corridor, which she claimed would add up to £78bn to the public coffers.

Jeremy Hunt speaks to the media during a visit to the AstraZeneca Speke Factory.
Pic: HM Treasury
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Jeremy Hunt speaks to the media during a visit to the AstraZeneca Speke Factory. Pic: HM Treasury

Andrew Griffith, the shadow business secretary, said: “There’s no vaccine for incompetence. In the same week they talked about growth, Labour seem to have fumbled a deal with AstraZeneca, one of the UK’s largest companies and central to the critical life sciences sector.”

The new plant at Speke was intended to enhance the UK’s pandemic preparedness.

Reports that it was under threat emerged shortly after Labour won the general election, when ministers warned of the need to make cuts to infrastructure projects to fill a £22bn “black hole” in the public finances.

The confirmation comes after former health secretary Matt Hancock said that the UK needed to improve its own vaccine manufacturing capability as a “critical” part of preparing for a future pandemic.

Mr Hancock told the COVID Inquiry earlier in January that Britain’s vaccine manufacturing capacity was “weak”.

He added: “Having that manufacture and fill and finish onshore, physically within the UK, is critical in the way that it simply isn’t in normal times.”

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Why Boris’s best mate is off to Reform

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Why Boris's best mate is off to Reform

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Former Conservative chairman and friend of Boris Johnson – Sir Jake Berry – is defecting to Reform UK, causing more problems for Tory leader Kemi Badenoch.

On today’s episode, Sky News’ Sam Coates and Politico’s Anne McElvoy discuss if his defection will divide parts of Reform policy.

Elsewhere, the Anglo-French summit gets under way, with Prime Minister Sir Keir Starmer hoping to announce a migration deal with French President Emmanuel Macron to deter small boat crossings.

Plus, chatter around Whitehall that No10 are considering a pre-summer reshuffle, but will it have any value?

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Australia to test CBDCs, stablecoins in next stage of crypto play

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Australia to test CBDCs, stablecoins in next stage of crypto play

Australia to test CBDCs, stablecoins in next stage of crypto play

The trial is part of Project Acacia, an initiative from the RBA exploring how digital money and tokenization could support financial markets in Australia.

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Starmer and Macron agree need for ‘new deterrent’ to stop small boat crossings

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Starmer and Macron agree need for 'new deterrent' to stop small boat crossings

Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.

The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.

High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.

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The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.

The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.

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However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.

A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.

“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.

“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”

It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.

“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.

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“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”

Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.

He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.

“But Starmer cancelled this before it had a chance to start.

“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.

“Starmer is weak and incompetent and he’s lost control of our borders.”

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