Treasury faces £1bn blow from AstraZeneca exit as pharma giant's boss mulls New York move
The drug giant is estimated to bring in around £300million in stamp duty every year as well as hundreds of millions in tax from the £3.2billion in dividend payments annually, according to analysts at Peel Hunt.
If it moves its headquarters overseas, as boss Pascal Soriot is thought to be considering, its British workforce is expected to shrink, depriving the Government of payroll taxes and corporation tax on profits, which last year stood at £6.4billion.
The warnings came after reports said Soriot, who has led Astra since 2012, is thinking about shifting the £161billion firm's stock market listing from London to Wall Street due to frustration about UK rules on medicine approvals and drug prices.
It has fuelled criticism of the Government's plan to boost economic growth, with life sciences previously cited as a core part of its industrial strategy. 'The fact that our single largest company is contemplating leaving shows the Government's economic plan is in chaos,' said Conservative business spokesman Andrew Griffith.
'Businesses rightly sense this Government does not value wealth creators, and after 12 whole months they still haven't published a strategy for the critical life sciences sector.'
It also sparked alarm among City figures who believe the pharma giant's departure could spark a rush to the exit for other major London-listed businesses, leaving the UK as an economic backwater.
'It's death by a thousand cuts here. There's been this trend of UK companies getting large and then wanting to move their listing,' said April LaRusse, who is the head of investment specialists at Insight Investment.
'They can get access to much deeper capital markets, their share price tends to trade at a higher level if it's listed in the US – so there are reasons they want to do this.'
She added that about 700 companies had moved their listing to the US from the UK since 2015.
'You can understand why AstraZeneca might be thinking about this,' she said.
Soriot, 66, has criticised the UK and Europe for falling behind countries such as the US and China in developing medicines.
Astra is also one of several global pharma giants locked in a bitter row with the Government over a drug pricing scheme which requires them to repay at least 23 per cent of the money they make from medicine sales back to the NHS.
The industry has lobbied intensely for the rate to be reduced, warning it risks hitting funding to develop new drugs.
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