US drug giant Eli Lilly halts plans for new London base as it slams Britain’s ‘stifling’ regulations and punitive tax regime
A US drugs giant has suspended plans to build a new base in London, warning that the UK is “stifling” innovation with its punitive taxes and regulations.
Eli Lilly’s decision comes amid growing fears among business leaders that Britain’s competitiveness is being undermined by onerous rules and the high cost of doing business.
Indianapolis-based Eli Lilly is one of the world’s largest pharmaceutical companies and has appointed real estate agent CBRE to research potential sites for a 65,000 square foot hub in London designed to help start-ups bring new medical products.
But yesterday he said he might look elsewhere in Europe if the environment does not improve.
Pending: US drug giant Eli Lilly had been scouting potential sites for a London hub designed to help start-ups bring new products to market
He said: “While we believe in the potential of UK biotech talent and share the country’s ambition to be a life sciences superpower, the stifling business environment does not invite foreign investment. For now.”
“The UK must do more to reward scientific discovery with access to innovative medicines to speed up clinical research and regulatory processes.”
The comments followed those of Eli Lilly’s associate vice-chairman, Stephen Van Soelen, who said the UK’s treatment of companies was prompting “companies like ours to really question investing in the ‘innovation there’, and that there were ‘other places in Europe to go’.
“When you bring a product to market, you are not rewarded for your innovation.
“As the old saying goes, unless something changes, nothing will change. The environment must change,” added Van Soelen.
Eli Lilly has a UK headquarters in Basingstoke, Hampshire and a research center in Bracknell, Berkshire.
But suspending its plans in London is a blow to the government, which aims to make the UK a “scientific superpower”.
His criticism comes after statements in February by Pascal Soriot, boss of pharmaceutical company AstraZeneca, who said a ‘discouraging’ tax system was behind the decision to build a £330million factory in Ireland rather than in the UK.
She had planned a factory in the North West of England but turned to Dublin. Astra employs around 83,100 people worldwide, including over 8,000 in the UK.
Other senior City officials have sounded the alarm. Legal & General boss Sir Nigel Wilson said while entrepreneurship in UK universities was ‘out of scale’ the country was no longer in competition to support businesses and risked ‘falling behind’ on his rivals.
The oil and gas sector has also spoken out against the government’s tax plans, with Sir Jim Ratcliffe, one of Britain’s richest men and the founder of chemicals group Ineos, warning of the windfall levy of United Kingdom, which imposes an effective tax rate of 75% on profits. made from the North Sea, risked compressing the sector “to death”.
And in the tech sector, Cambridge Arm computer chipmaker snubbed a London Stock Exchange listing in favor of a New York float.
The chorus left the government scrambling to improve the country’s prospects, with plans being drawn up to ease rules on stock market listings.
Chancellor Jeremy Hunt is also believed to be planning to force pension funds to invest some of their vast reserves in UK projects and start-ups.
