GlaxoSmithKline plans to invest more than £500m in manufacturing projects in the UK after the Chancellor, George Osborne, backed the previous government's plans for a lower 10 per cent corporate tax rate on profits from newly commercialised patents.
The pharmaceuticals giant welcomed the Coalition's support for the so-called "patent box", which will be introduced from April 2013. The GSK chief executive, Andrew Witty, said the measure, which was first announced by Labour in its 2009 pre-Budget report, had "the potential to transform" the way Britain was viewed by investors.
"For too long, while great inventions and discoveries have been made in this country, downstream economic activity in development and manufacturing, and associated employment, have been attracted to other countries that had more favourable corporation tax regimes," he said.
"In one stroke, the introduction of the UK patent box will help to change this dynamic."
GSK said it would invest in manufacturing a newly developed respiratory device at Ware in Hertfordshire, and launch a £50m UK venture capital fund.
The successful implementation of the new tax regime will also see the construction of a new "green chemistry" facility at the University of Nottingham, ensure that the UK is the location for GSK's next biopharmaceuticals manufacturing plant, and secure further investment in continuous tablet manufacturing technology at Ware in Hertfordshire. Beyond that, the measure will see GSK put money towards a new creams and ointments manufacturing centre of excellence at Barnard Castle in County Durham.
The company estimates that its investment drive will lead to the creation of around 1,000 jobs over the lifetime of these projects.