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6 May 2014updated 24 Jun 2021 1:00pm

Cable hits out at Osborne for seeking to turn UK into a “tax haven”

Business Secretary issues coded criticisim as Pfizer eyes UK tax advantages over AstraZeneca takeover. 

By George Eaton

Vince Cable has just used his Commons statement on Pfizer’s bid for AstraZeneca to take a characteristically unsubtle swipe at George Osborne. He told MPs: “We see the future of the UK as a knowledge economy, not a tax haven.” One of the key attractions for the American Pfizer of taking over the British AstraZeneca is that, owing to Osborne, the UK’s corporation tax rate is now just 21 per cent (and will to fall to 20 per cent in 2015), compared to 35 per cent in the US. A merger would allow the new company to be domiciled in the UK for tax purposes, while retaining its corporate HQ in the US. 

Cable also said that he was “open-minded” about the new public interest test proposed by Ed Miliband but warned that it would face significant EU hurdles. He said: 

The opposition calls for changes to the law, but we are operating within the framework that they introduced in 2002. They removed ministers from making decisions about mergers apart from in a few specified public interest areas. I notice that they chose not to reform the regime in response to the Cadbury’s/Kraft merger.

One of our options as the government would be to consider using our public interest test powers – or even expanding them. This would be a serious step and not one that should be taken lightly. I am open-minded about it, but should stress that we are operating within serious European legal constraints.

Throughout his statement, Cable used the plural “we”, but the fact that Andrew Lansley was the only senior Tory on the frontbench, with not one Conservative business minister present, only encouraged the impression that the coalition is divided over the deal. One shadow cabinet minister told me yesterday: “He’s been sidelined on it by the Treasury and No. 10”. 

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