Using language that flirted closely with protectionism, which he has so far avoided, Osborne attacked Labour’s free trade approach to foreign takeovers during its 13 years in office. When in power, Labour allowed Kraft’s takeover of Cadbury.
“We’ll take no lectures from the last government that virtually destroyed the British economy, and time after again, when there were takeovers, did nothing to protect Britain’s national economic interest,” he said.
It follows Labour’s criticism that Prime Minister David Cameron was acting as a “cheerleader” for Pfizer’s controversial takeover bid.
Business secretary Vince Cable yesterday insisted the government would remain neutral on the issue but added there could be scope to intervene after concerns Pfizer was pursuing Astrazeneca in a bid to lower its tax bill.
MPs from two influential select committees – business and technology – summoned bosses from both firms to explain the situation amid fears over UK jobs. Pfizer boss Ian Read and Astrazeneca chief Pascal Soriot are expected to appear before MPs this month.
But the Institute of Directors launched an attack on the growing protectionist tone in Westminster. A spokesman said: “We do not believe that there is any case for extending the existing public interest test for takeovers. Attempting to second guess the industrial logic of takeover decisions is not one of government’s strengths, as was demonstrated throughout the 1970s at British Leyland and elsewhere.”
He added: “Recent proposals from Lord Heseltine and Chuka Umunna to extend the public interest test would put at risk the UK’s hard won reputation as a compelling destination for inward investment from around the world.”
The row came as Astrazeneca launched a staunch defence plan centred around hopes that it could increase revenues by 75 per cent within a decade.
Soriot insisted the company was on track with its turnaround plan and said a takeover could throw it into jeopardy.
“A lot of people will sit behind a desk and write a spreadsheet but I have been in sufficient mergers to know that mergers have a disruptive impact. A company is not a machine it’s a group of people.”
Shares in the company fell 2.71 per cent to close at £46.77. The outcome of any deal could rest on the price Pfizer is willing to pay, with analysts putting a price tag as high as £56 a share on the deal. Read has previously tried to soothe concerns by promising to keep research and development jobs in the UK.