AstraZeneca has canceled plans to invest £450 million in expanding its vaccine manufacturing plant in Speke, Merseyside, citing reduced government support.

The decision follows a series of talks with the UK government, where AstraZeneca indicated that the final government offer was less favorable than that proposed by the previous administration.

The Treasury confirmed that changes in the investment's structure led to a decrease in the grant, adding that all government funding must demonstrate value for taxpayers.

Despite scrapping the expansion, AstraZeneca emphasized that the site will continue to produce flu vaccines for both the UK and global markets, with no impact on current jobs.

This decision comes shortly after Labour's Chancellor Rachel Reeves outlined her plans to stimulate economic growth, naming AstraZeneca as one of the UK's key companies.

Shadow Business Secretary Andrew Griffiths criticized the government's handling of the situation, accusing them of mishandling an important deal in the life sciences sector.

AstraZeneca's expansion had originally been proposed in last year's Budget under Conservative Chancellor Jeremy Hunt, but reports of delays in talks with the new Labour government have emerged.

Hunt expressed disappointment over the cancellation, urging Chancellor Reeves to engage directly with AstraZeneca's CEO, Sir Pascal Soriot.

The incident comes as businesses face upcoming tax increases and other financial challenges that may impact investment and hiring decisions.

Despite Labour's focus on boosting the UK economy, growth remains sluggish, and companies have raised concerns about the potential effects of increased costs, including National Insurance hikes and changes to business rates relief.