LONDON — AstraZeneca has announced the cancellation of its plan to invest £450 million (approximately $560 million) in a vaccine production facility in northwest England. The pharmaceutical giant attributed its decision to the newly elected Labour government, citing a reduction in the financial incentives that had been promised by the former Conservative administration.

This announcement comes as a setback for Treasury chief Rachel Reeves, who has been promoting government initiatives aimed at strengthening the British economy and enhancing its appeal to global investors. AstraZeneca’s withdrawal from expanding its site in Speke, located near Liverpool, marks a significant shift in planned investment.

A spokesperson for AstraZeneca indicated that “various elements played a role in this decision, including the timing and the decrease in the final offer compared to the previous administration’s proposition.” Despite the cancellation, the current operations at the existing facility will remain intact, and job security has not been compromised.

The government clarified that the modifications in the nature of the investment proposed by AstraZeneca led to its re-evaluation of the possible grant. However, specific details surrounding the changes have not been disclosed.

The prior government had suggested that this investment would have provided a considerable boost to the U.K. life sciences sector, enhancing public health safeguards and improving readiness for future pandemics.

AstraZeneca gained significant recognition during the COVID-19 pandemic, having collaborated with Oxford University to develop one of the vaccines that played a pivotal role in combating the virus.