The UK will be told to pay a hugely contentious bill of more than £500million for two EU regulators to leave London after Brexit, documents have shown.
The extraordinary cost of relocating the medicine and banking agencies emerged yesterday as it was also revealed that the vast majority of staff do not want to leave.
Brussels has insisted that British taxpayers should foot the bill to close down the sprawling headquarters in one of London’s most expensive areas.
The UK will be asked to pay up to £400million to cover rent at the sprawling Canary Wharf base of the European Medicines Agency (EMA) because of an administrative gaffe
However leaked documents have revealed that the vast majority of the estimated £526million British bill could go towards renting an empty skyscraper for the next 20 years.
The UK will be asked to pay up to £400million to cover rent at the sprawling Canary Wharf base of the European Medicines Agency (EMA) because of an administrative gaffe.
Officials from the body, which regulates medicines, failed to insert a break clause when taking over the nine-storey portion of a skyscraper meaning it must be rented until the lease ends in 2039.
The huge cost of relocating both the EMA and the European Banking Authority (EBA) will raise questions about the aggressive EU approach after British ministers said they wanted them to stay.
Revelations about the huge costs of the relocation came as 23 EU cities launched slick campaign bids to be chosen as the their new home of the bodies, which employ 1,000 people.
While senior EU officials have insisted that the regulators must relocate as a consequence of Brexit, yesterday it emerged that huge numbers of staff are considering staying in the UK.
The European Banking Authority (EBA) will also be moved, raising questions about the aggressive EU approach after British ministers said they wanted them to stay
The considerable discontent amongst staff was revealed by officials from the EMA during a closed-door meeting with MEPs in July.
An official present at the meeting said the medicines regulator outlined how a survey revealed that 75 per cent of its 890 members of staff did not want to move to a new location.
The discontent will spark calls for British authorities to lure huge numbers of its EU-employed experts to work for its replacement regulator following Brexit.
Around 60 per cent of staff who work for the body, which approves drugs for use across the EU, are from the UK while more than half also have children.
In documents seen by the Mail that were presented to the European Parliament’s budget committee, the regulator said Brexit is ‘the biggest challenge for [the] EMA since its establishment’.
While the body can technically sublet the building or transfer the rent during before the 2039 lease is up, insiders have said demand similar commercial properties in London is currently low.
UKIP MEP Ray Finch slammed the EMA’s ‘financial incompetence’
The contracts also stipulates that the building’s owner can also veto any agreement and imposes numerous stringent conditions about involving third parties.
Previous estimations had suggested the huge rental bill would be as much as £100million cheaoer.
Costs that could be met by the UK also include an estimated £37.6million to relocate EMA staff and move to the new site, with a further £82.5million spent preparing the new headquarters.
UKIP MEP Ray Finch said: ‘What spectacular financial incompetence on display here by this EU agency.
‘Just imagine the stupidity of signing a 25-year lease without an escape clause – it beggars belief.’
The costs associated with leaving the EBA, likely to form part of the controversial Brexit divorce bill, are much lower because officials secured a ‘break clause’ when they took the lease on its premises.
Documents outlining the possible charges, show that the UK could be asked to pay at least £5.2million if the EBA is moved before Brexit day in 2019.
This contractual stipulations means the 12-year lease on the property can be terminated in 2020, vastly reducing the size of the bill.
But British taxpayers could also be billed to pay relocation fees for the body’s estimated 190 staff and their families.
Announcing Frankfurt’s bid to host the financial regulator yesterday Germany’s finance minister appeared to goad the UK yesterday by calling all British-based financial institutions to move.
In an indirect barb at the UK, Wolfgang Schauble urged banks to relocate to the German financial hub – seen as the frontrunner to land the EBA – for its ‘positive and stable economic conditions’.
He said: ‘A decision in favour of Frankfurt would ensure the continued success of the EBA’s work.
In an indirect barb at the UK, German Finance Minister Wolfgang Schauble urged banks to relocate to the German financial hub
‘This would be true not just for the EBA but for all financial institutions based in the United Kingdom, which would all be welcome to make Germany their home.’
European cities are desperate to be chosen as the home of the agencies because they also generate millions in local revenue, such as hotel fees for visiting officials.
Despite establishing a complicated voting procedure to choose the new hosts, EU insiders fear the decision could break into a diplomatic row with accusations of favouritism already being aired.
EU leaders will discuss the relocations in October before a vote, likened to the Eurovision song contest, is held in November.
Amsterdam, Barcelona and Lille are favourites to be chosen as the new EMA base after officials consider criteria such as work opportunities for employee spouses and schools for their children.