The legal position over this bid is very clear. Labour legislated in 2002 to stop Ministers interfering in future bids and deals outside defence and the media. In 2004 they signed up to the European Mergers Regulation, which means that larger company bids involving businesses with activities in more than one member state of the EU are under the sole legal control of the EU Competition authorities. As I put to Dr Cable, and as he agreed, the Astra Zeneca potential bid falls to be determined by the EU and by the EU alone.
However, the actual position has become more ambiguous than the legal position, thanks to the behaviour of Pfizer and Dr Cable. Dr Cable has taken legal advice and constantly stresses that he is “neutral” about the bid. He has to be. However, he has also made clear that he is looking for a role in the debate over the future of Astra Zeneca, and has been aided in this by the actions of Pfizer. The bidding company has decided that it will co-operate with the UK government regardless of the legal realities.
Their decision to do this reflects the realities of power. Whilst Dr Cable cannot block their bid, Pfizer will need the co-operation of parts of the UK government if they are to increase their presence in the UK successully. The NHS is their largest customer. They may need planning permissions for new facilities. They may want government help with training and apprenticeships. The various ways in which a very large state apparatus impinges on a pharmaceutical company argues for a good relationship from the outset. If Dr Cable wants to discuss the future, then he will be able to. If Parliament wants to examine the issues, then Pfizer will have to put up executives to come and talk.
Pfizer may offer indications or promises on future jobs, the extent of their research commitment, and their future UK presence. These may be well meant, but it is difficult for them to be binding. Astra Zeneca may offer something similar. As the past shows, they like Pfizer have been reducing their workforce in the face of falling turnover.
The truth is which ever management gets the prize to manage these assets in the future, they will have to adjust their plans depending on their sales and profits. We will never know whether Astra or Pfizer will keep more jobs or generate better results, because only one will win and have the chance to show us what they can do.
It is bizarre that so many UK politicians have learnt so little that they think they can second guess this deal and reach the answer which will guarantee all those jobs and facilities for the foreseeable future. The buying habits of drug consumers, and changes made in other countries affecting their relative competitiveness, will determine whether we keep these jobs or not. The large pharmaceutical companies are having to cut costs one way or another, so redundancies cannot be ruled out whoever wins.