David Cameron has warned that Britain must not “pull up the drawbridge” against foreign investors as the prime minister signalled his reluctance to intervene in Pfizer’s proposed £63 billion takeover of AstraZeneca.

Downing Street is facing pressure from the opposition Labour Party to subject any deal to a “public interest test” – a move that would require a strengthening of government powers to scrutinise foreign takeovers.

But Mr Cameron said the UK benefited “massively” from its economic openness and insisted the government was making “very good progress” in seeking job assurances from Pfizer without the need for extra powers.

Massive foreign deal
His comments came as Ian Read, chairman and chief executive of the US drug company, prepared to fly to London to be quizzed by lawmakers tomorrow about his plans for what would be the biggest foreign takeover in UK history.

Chuka Umunna, shadow business secretary, wrote to Vince Cable, business secretary, over the weekend urging him to expand government powers to allow a public interest to be applied to deals involving the UK science base.

“We would support you in adding this category and want to work with you in a cross-party way to make this happen,” said Mr Umunna.

Both Mr Cable and Mr Cameron acknowledged last week it would be possible to expand the criteria for intervening under existing laws, but Downing Street has made clear its desire to avoid such a step.

Ed Miliband, Labour leader, has accused Mr Cameron of acting as a “cheerleader” for Pfizer’s bid by holding talks with the US company about the deal even though AstraZeneca has so far resisted the advances of its rival.

Speaking on the BBC's Andrew Marr Show, the prime minister said the government was engaging with both companies to defend the national interest, while his opponent was scoring political points from the sidelines.

Meanwhile, Nick Clegg, deputy prime minister, told Sky News the government wanted “exacting, binding commitments” from Pfizer about its plans for Britain’s second-biggest drug company. AstraZeneca employs about 7,000 people in the UK and accounts for over 2 per cent of exports.

Pfizer has already pledged to keep 20 per cent of the two companies’ combined research and development workforce for at least five years after a merger, and says this commitment is legally binding under UK takeover rules. The US company says it cannot make further promises without talking to AstraZeneca about how a deal would work.– (Copyright The Financial Times Limited 2014)