Merck has pulled out of a planned £1bn London drug research centre in the latest blow to the government’s growth agenda.
The US pharma giant is to lay off 127 staff alongside abandoning the construction project, which had been set to open in King’s Cross in 2027. The firm warned the UK would lag behind the rest of Europe for spending on health research unless it made conditions more attractive to invest.
“Unless a change is made to the operating environment, the undervaluation is corrected, and the investment is put back in the right places, more and more companies will be making these sorts of decisions,” Merck said.
“Simply put, the UK is not internationally competitive.”
Industry losing patience with Labour
The move follows a similar decision by Cambridge-based drugmaker firm Astrazeneca earlier this year, after it walked away from a £450m plan to expand its vaccine production facilities in the UK.
Later in the year, Astrazeneca said it would invest $50bn in manufacturing and R&D in the US, adding that the decision “underpins our belief in America’s innovation in biopharmaceuticals.” The FTSE 100 constituent is also understood to have been considering moving its primary listing from London to New York, a move which would deal a further blow to the UK.
Merck, known as MSD, first unveiled plans for the new King’s Cross facility in 2017 as part of a new UK headquarters, with construction commencing in 2023. Dozens more scientists had been expected to be hired ahead of the centre’s opening.
Labour had vowed to make growth a central part of its mission after entering office last year, but has so far suffered waves of plant closures and thousands of layoffs across the country.
That includes the closure of a Trafigura-owned biodiesel plant in Lincolnshire in February, as well as a nearby bioethanol plant owned by ABF. A chemicals plant in Teesside closed, leading to hundreds of job losses, while the Lindsey oil refinery collapsed into insolvency.
Last week former Darktrace boss Poppy Gustafsson quit as the UK’s investment minister after just a year in the role, in signs the government’s efforts to attract inward investment were falling on deaf ears.