DAVID Cameron told the House of Commons today that the UK needs to be “hard headed” about encouraging foreign investment and guard against protectionism.
As the row over US pharmaceutical giant Pfizer’s proposed £63 billion bid to acquire UK-based AstraZeneca dominated Prime Minister’s Questions, he faced claims from Labour that he was a “cheerleader” for a takeover that could cost jobs. But Cameron insisted Pfizer provide assurances.
Cameron said the UK “benefits massively” from foreign investment, and warned that the row must not trigger a retreat to protectionism. However, he indicated that the American firm had yet to convince him that the purchase would be in the national interest.
The deal would be the largest foreign takeover of a British company and has raised fears that resulting cost cutting would see the loss of thousands of skilled jobs, undermining the UK’s science base. The Prime Minister said the commitments made so far – including retaining at least 20 per cent of the research and development workforce in the UK – were “encouraging”.
“Let me be absolutely clear, I’m not satisfied; I want more. But the way to get more is to engage, not to stand up and play party politics,” he said. “The more we can do to strengthen the assurances, the better.”
He said he stood by Lib Dem Business Secretary Vince Cable’s statement that a new national interest test should be introduced for such takeovers. But he refused to support Labour’s demands for changes to the 2002 Enterprise Act to ensure that any takeover of AstraZeneca is subjected to a public interest test. Ed Miliband offered the Prime Minister Labour’s support in putting the changes into effect.
Under the Act, the government can intervene on mergers or takeovers on the grounds of national security, media plurality or financial stability, but the Labour leader argued that this could be extended to include issues such as the UK’s scientific base or research and development capabilities.
Downing Street sources said that Pfizer had provided “specific, measurable commitments” in its letter to the Prime Minister last week on the percentage of research it would conduct in the UK and the location of the merged entity’s headquarters in Britain.
Pfizer today said the new combined company would bolster innovative science and speed the development of new treatments. It said the combined group would be able to expand its global research, speed up the development of treatments and broaden its footprint in emerging markets.
A combined Pfizer-AstraZeneca would be the world’s largest pharmaceuticals business and save Pfizer billions of dollars in taxes by shifting its domicile to Britain, although it would still be run out of New York.