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Brexit

The EU should pay for its own agencies

BY Joseph Hackett   /  18 August 2017

It is no secret the EU, facing a serious budget shortfall without Britain’s contributions, wants to squeeze as much money as possible out of the British taxpayer before Brexit day. Brussels has demanded Britain agree to pay a huge ‘Brexit Bill’ for various EU spending commitments as a precondition for entering trade talks, demonstrating just how keen it is to get its hands on even more of our money – if possible, even after Brexit.

But what, exactly, does the EU want us to foot the bill for?

One of their more unreasonable requests, separate to the notorious ‘Brexit Bill’, is their demand Britain pay for the EU to move two major agencies to the Continent which are currently headquartered over here – the European Medicines Agency and the European Banking Authority. Competition among the 27 remaining Member States to host these agencies after Brexit is intense, with virtually all countries in the running.

Presumably due in part to this fierce competition, the EU is adamant these agencies must be moved out of Britain when we leave. Bizarrely, however, it insists we should pay for these relocations which they, not the British Government, want.

Scandalously, the cost of moving the European Medicines Agency alone will be £521 million. This is because EU officials failed to insert a break clause into the rental contract for the EMA’s current premises, which runs until 2039. The EU is, therefore, on the hook for around 20 years’ worth of rent for offices in Canary Wharf – hence the vast bill – and the UK should not be financially responsible for the EU’s lawyers not putting break clauses in their leases. They are, of course, welcome to run this agency from Britain – it’s up to them if they really want to move, but not up to us to pay for them after Brexit.

Moving the European Banking Authority will at least be considerably cheaper if this is what they want. The EU would only have to pay around £2.9 million in penalty fees, since the rental contract for the EBA headquarters has a break clause which can be invoked in 2020 – so at least the EU’s lawyers were more efficient in this case, if they finally decide they want to move.

This whole bill is entirely of the EU’s making – and nothing to do with the UK.

They are the ones who want to move the agencies, and they are the ones responsible for the screw-up which would make the move so expensive. Of all the EU’s demands, the idea we, not they, should pay for this bill must surely be among the most absurd.

The mutually-beneficial solution would, of course, be for the agencies to remain in London, at least for the time being. The EBA, as EU officials have pointed out, would only have to remain here until 2020 before it could invoke its break clause and move to the continent without any penalty fees. As for the EMA, the longer it stays here, the cheaper it gets to move. The agencies’ 1,000 workers would also broadly like to stay in London – including 75% of the EMA’s employees.

Unfortunately, due to its rigid nationalism, the EU is determined to avoid this easy option. It seems the EU is keen to punish the UK by not allowing itself to employ British workers after Brexit. This means, despite this being a result of the EU’s own rules, Brussels wants to force Britain to pay the £10 million bill for severance payments for British employees at these agencies. Bizarrely, no such payment is on offer for non-British employees who would rather not swap London for Luxembourg or Ljubljana.

The only fair alternative is for the EU to pay these costs. The EU are the ones insisting on a move for these agencies – even if it comes at such vast expense. The EU are the ones saying these agencies cannot hire non-EU employees. Britain is not demanding either of those things. The EU – not Britain – should therefore pay the costs.

If the EU is unwilling to meet these costs from its central budget, perhaps it might like to insist the costs be covered by the Member States which win the rights to host these agencies after Brexit. Perhaps this would thin the competition out a little bit.

As we Get Britain Out of the EU, it is important we challenge Brussels on every single bill it demands we pay. This is just one particularly egregious case of the EU insisting we pay for something which is totally their responsibility. But on all fronts, our negotiators must ensure we are not left paying bills which are the EU’s own responsibility. The EU has treated us as a cash cow for far too long – and Brexit must finally put a stop to this.

Joseph Hackett is a Research Executive at Get Britain Out