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FEARS that US drug giant Pfizer’s designs on British pharmaceutical firm AstraZeneca would be bad news for workers ring all too true.
The US company has hardly troubled to hide its main motive for the takeover bid — stating last week that it would combine the firms in a “UK incorporated holding company” in order to take advantage of the Con-Dem coalition’s irresponsibly low corporation tax rates.
That hardly amounts to the commitment to jobs, manufacturing and research and development (R&D) in this country which government ministers claim to sense in Pfizer’s fat-cat executives.
CEO Ian Read has been forced to deny that his company is in trouble after announcing a 15 per cent drop in profits two days ago.
And the assurances he has given are — as Labour’s Chuka Umunna pointed out in Parliament yesterday — “not worth the paper they’re written on.”
These consist of a promise to keep 20 per cent of any combined firm’s R&D workforce in Britain for five years.
It’s not legally binding. Even so the canny Read was careful to give himself a get-out clause saying Pfizer can “adjust these obligations should circumstances significantly change.”
He’s also stated that AstraZeneca, if acquired, would be split into three separate divisions along the lines of Pfizer itself.
Asked if these could then be sold off, a man who always carries a company coin with the slogan “straight talk” responded in typical market gibberish: “We will conserve that optionality.”
Yes, in other words. And Pfizer’s record abroad of hostile takeovers, intellectual asset-stripping and massively reducing investment in R&D speaks for itself.
No wonder Unite and GMB are calling for urgent talks with Business Secretary Vince Cable on protecting highly skilled jobs.
The unions’ offer to give evidence to Parliament’s business, innovation and skills committee to explore the idea of “a legally binding agreement on jobs and the future of AstraZeneca in the UK” should be welcomed.
Their concern for the future of Britain’s science base is equally important. As the TUC and academics’ union UCU in particular have repeatedly warned, Britain is falling behind other countries in R&D.
The TUC’s Way of the Dragon report, released last month, highlighted the way Far Eastern countries are increasingly dominating scientific research.
China has increased investment in R&D by between 12 and 20 per cent every year for 20 years.
By contrast, the coalition has cut R&D spending in Britain to its lowest point for a decade.
Allowing our second-largest pharma firm to fall to a hostile takeover bid by a company that threw 1,500 R&D workers on the scrapheap when it closed its facility in Sandwich just two years ago can only make things worse.
Everyone, from the trade unions and the Labour Party to Tory grandees including Boris Johnson and Michael Heseltine, is warning David Cameron to stop “cheerleading” for Pfizer and be more careful.
In Parliament Cable pleads that his hands are tied. It’s a matter for the shareholders. He adds that AstraZeneca has laid off workers on a similar scale to Pfizer.
In so doing he sums up the problem. His hands are tied by legislation saying the government cannot interfere in takeover bids, except in a handful of “strategic” areas.
So change the law. Better still, end the farce where shareholders can determine the future of Britain’s scientific industry and turf our scientists onto the dole on the basis of short-term profit.
Take over AstraZeneca — and run it in the public sector.
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