Pfizer must do more - Cameron

Wednesday 07 May 2014

David Cameron has insisted US pharmaceutical giant Pfizer must provide more assurances about its commitment to Britain amid concerns over its takeover bid for AstraZeneca. The Prime Minister said the UK "benefits massively" from foreign investment, and warned that the row must not trigger a retreat to protectionism.

But he indicated that the American firm had yet to convince him that the purchase would be in the national interest. Answering questions in the Commons, Mr Cameron said the commitments made so far - including retaining at least 20% 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."

AstraZeneca has so far resisted approaches from its rival, but executives have not given up hope of completing a £60 billion-plus deal - potentially the biggest ever foreign takeover of a British company.

Fears have been raised that resulting cost-cutting could cause the loss of thousands of highly-skilled jobs and undermine the UK's science base.

Mr Cameron dismissed suggestions from Labour leader Ed Miliband that he was "cheerleading" for the deal by tasking the Cabinet Secretary and ministers to discuss the situation with both companies.

He said he agreed with the position taken by Liberal Democrat Business Secretary Vince Cable, who refused yesterday to rule out intervening to block a formal bid.

"The most important intervention we can make is to back British jobs, British science, British R&D, British medicines and British technology," Mr Cameron said.

"We know what happens when you do not engage...

"We are fighting for British science and I just think it is a pity that he is trying to play politics rather than backing the British national interest.

"I will judge all these things about does it expand British jobs, British investment, British science?"

The Prime Minister said the country must not close its doors to foreign investors.

"Britain benefits massively from being open to investment. Nissan is now producing more cars than the whole of Italy," he said.

"Jaguar Land Rover, under Indian ownership, has created 9,000 jobs in the West Midlands since I became Prime Minister.

"Vodafone and indeed AstraZeneca have benefited from the backing of an open country to go out and build and buy businesses around the world.

"There is more inward investment into Britain today than the rest of the European Union combined. Don't let's put that at risk."

Labour is pressing for changes to the 2002 Enterprise Act to ensure that any takeover of AstraZeneca is subjected to a public interest test. Mr Miliband offered the Prime Minister Labour's support in putting the changes into effect.

Under the Act, the Government can currently intervene on mergers or takeovers on the grounds of national security, media plurality or financial stability, but Mr Miliband argued that this could be extended to include issues such as the UK's scientific base or research and development capabilities.

A senior Labour source said: "We are saying to the Government that there are powers under the Act to widen the grounds on which you could carry out a public interest test.

"It doesn't require primary legislation. It could be done under a parliamentary order. If they were prepared to consider this, we would support them on it."

A public interest assessment could be conducted by an independent body such as the Competition and Markets Authority and would have to be "rigorous, thorough and independent", said the source.

Speaking in the Commons, Mr Miliband told the PM: "There needs to be a proper assessment of this bid and yesterday... the Business Secretary said he was open to doing this.

"This could be done straight away, through this House, and we on this side would support making that happen. Will you agree to do it?"

The Prime Minister replied: "The assessment I want is from the Business Department on this deal or, indeed, because there isn't now an actual offer on the table, any subsequent offer.

"I will judge all these things about does it expand British jobs, British investment, British science?"

Downing Street sources said that Pfizer had provided "specific, measurable commitments in its letter to the Prime Minister last week on the percentage of R&D work it would conduct in the UK and the location of the merged entity's HQ in Britain.

Asked what further commitments the PM was looking for, a source said: "We are taking a long, hard look at what we can do to strengthen assurances."

Bosses from Pfizer and AstraZeneca will face grillings on the impact of a potential deal by two House of Commons committees on successive days next week.

Pfizer chairman and chief executive Ian Read and AstraZeneca chief executive Pascal Soriot will be questioned by the Business, Innovation and Skills Committee on Tuesday morning, then return to the Commons on Wednesday to be quizzed by MPs on the Science and Technology Committee.

The science committee will also question Science Minister David Willetts about the Government's position.

Science and Technology Committee chairman Andrew Miller said: "AstraZeneca is one of the bastions of the UK's world-leading pharmaceutical sector. It supports around 30,000 jobs, many of them highly skilled, and is an important component of our scientific landscape.

"Next week's hearing will be an opportunity for us to scrutinise the pledges on research and development being made as part of this potential takeover and pose questions about how the Government will ensure that these commitments are met."