Pfizer Takeover Threat Highlights Miliband/Cameron Ideological Split

There could hardly be a more pointed example of the ideological gulf between Ed Miliband and David Cameron than the escalating row over the proposed takeover of the UK's AstraZeneca by US giant Pfizer.

The prime minister's spokesman has insisted any deal must ultimately be a matter for AstraZeneca shareholders and there is deep, ideological resistance towards any government interference from the Tory prime minister.

The furthest Cameron is prepared to go is to promise the government's continuing "active engagement" with the proposal and business secretary Vince Cable's statement of maintaining "even-handed neutrality".

Miliband, on the other hand, has based much of his recent policy, from the energy companies to the banks, on direct intervention and he has now stepped into the Pfizer controversy, accusing Cameron of acting as a "cheerleader" for the American company.

He has demanded an urgent inquiry into the proposed takeover, which would be the biggest ever by a foreign company and could have an impact on AZ's 7,000 staff, to determine whether it would be in the public interest, as allowed under regulations.

Fears that Pfizer intends to asset strip AZ, not denied by its boss Ian Read, have been echoed across Westminster and on this one, it appears the political momentum may well be with Miliband.

London mayor Boris Johnson has become the most senior Conservative to express concerns.

"I don't think politicians can be entirely aloof from this," he said. "I'm not taking a position against the deal necessarily but it would be very important to establish that Pfizer is genuinely committed to R&D in this country."

Two parliamentary committees have announced investigations into the proposal and will call bosses from both companies to give evidence over coming days amid concerns over Pfizer's intentions and whether it is based on Britain's attractive tax regime.

Chancellor George Osborne has attempted to reassure critics.

"Our sole interest here is in securing good jobs in Britain, good manufacturing jobs, good science jobs," he said.

"That's what I'm interested in and we'll support any arrangement that delivers that for Britain and we make no apologies for fighting for Britain's national economic interest."

And, in an emergency Commons statement, Cable said he was "open-minded" about invoking the government's public interest test, but stressed that would be a serious step which he had no plans to take.

He said the government would adopt "even-handed neutrality" and accepted that the decision was ultimately one for shareholders and he had legal constraints to consider.

Labour's Chuka Umunna, however, claimed Pfizer's record elsewhere meant any assurances given about jobs and R&D from the company, in a letter to the prime minister, were "not worth the paper they are written on".

The problem for the government is that, not only is there deep resistance to state interference from most current Tory MPs, but the proposal can also be seen as a vote of confidence in the UK economy and Osborne's handling of it.

But this is not something ministers can boast about in the face of what many will view as the sort of "predatory capitalism" Miliband once warned about and which seems to have struck a chord with voters.

They will remember the takeover of Cadbury by the US giant Kraft with undertakings about securing jobs which were broken immediately after the deal, with the closure of the company's factory near Bristol.

And, even if ministers wanted to intervene "in Britain's economic interest" as Osborne has said, it is hard to see exactly what they could do under current rules, laid down by the last Labour government.

And, while intervention would infuriate free market backbenchers, might have little or no effect, and could even have legal implications, "even-handed neutrality" risks allegations of doing nothing while jobs and industries are under threat.

So the Pfizer proposal comes at exactly the time Miliband has succeeded in putting the role of state interference and the sort of capitalism the UK is comfortable with at the heart of the political debate.