It is incredible that a US company can quite openly flaunt a major British strategic company as a bargaining chip to reduce its internal US tax liabilities. But that is exactly Pfizer’s position in trying to take over AstraZeneca, Britain’s second biggest pharmaceutical company which alone provides 2.3% of UK exports, £2.8bn of UK R&D, and 7,000 jobs. Pfizer has a notorious record in buying up rivals – Warner-Lambert in the US, Pharmacia in Sweden, and Wyeth also in the US – and then scrapping jobs and shutting down research facilities wholesale, most relevantly for the UK its closing down its big research unit at Sandwich in Kent with the loss of 2,400 jobs.
For the last 30 years under the rules (or rather the free-for-all) of neoliberal capitalism, the going ideology has been ‘Leave it all to the market to decide, and government get out of the way’. The effect of this Thatcherite scorched earth strategy has been the loss to Britain of some of its key strategic assets. That includes large parts of the UK’s steel, electricity and water companies, as well as Pilkingtons, Rover, Smiths Electronics, P&O, BAA, O2 and Cadbury’s, to name just some of the bigger companies. The loss to Britain in terms of jobs, R&D benefits, profit repatriation, reduced investment, and subordination to foreign interests has been immense. This haemorrhaging must stop at AstraZeneca.
Although both Cameron and Osborne would clearly both be content to see AZ thrown into the international melting pot, Vince Cable is it seems the one member of the Cabinet who is prepared to put the British interest first. He can do so by exercising powers under the Enterprise Act to act where the British public interest is threatened in terms of ‘national security’. It should be possible to mount a convincing argument that the swallowing up Britain’s second largest pharmaceutical company by a US predator to cut its US tax liabilities is indeed a significant threat to the UK economy and to the future of the country.
The only snag is that this argument would have to pass muster with the EU Commission. That exposes a crucial weakness in the UK legislation which needs to be addressed by adding the criterion of threat to national strategic assets to the existing three criteria in the Act, namely national security, media plurality and financial stability. It requires skill to draw up a general rule for statute which lets through ‘good’ takeovers which benefit the British national interest, but excludes ‘bad’ ones that damage it. Perfectly possible, and it needs to be done – urgently.
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