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Analysis

The scramble for London’s EU agencies

by Luke Lythgoe | 01.08.2017

A bidding frenzy is in full swing across Europe to host the EU’s medicines and banking regulators, both currently based in London. Twenty-one EU member states have placed official bids – 19 for the European Medicines Agency (EMA) and eight for the European Banking Authority (EBA), with six countries bidding for both – showing what a prize these agencies are considered to be, and what the UK stands to lose.

At the most fundamental level, it means just over 1,000 jobs moving from London – 897 EMA staff and 169 EBA staff, according to the most recent annual reports. The bulk of these will be highly-skilled EU nationals, who will be relocated with their families to new cities. But there are also more than 60 British staff working for the agencies. Their future is uncertain as many won’t have the right to another European nationality and there are strict rules around EU agencies employing non-EU staff.

These agencies also draw visiting talent to London. The EMA’s Canary Wharf headquarters hosts an estimated 36,000 scientists and national regulators each year. In 2015, the EBA hosted no fewer than 296 conferences and other events. The UK will lose the prestige and economic value – in hotel stays, restaurants, and the like – of these visitors in future.

The departure of the agencies will also damage the UK’s international standing in these sectors. In particular, the presence of the EMA – which is responsible for testing and approving all medicines used across the EU – has made the UK an attractive location for clinical trials. The EMA outsources a third of its drug approvals to the UK’s own Medicines and Healthcare Products Regulatory Agency, which in turn accounts for a third of that agency’s income. In 2016, the UK led 208 drug licensing committees and workshops – the highest number of any EU state and double that of France, which has put in a bid for the EMA to be relocated to Lille.

Theresa May’s government clearly understands the benefits of hosting these EU agencies. That was made clear earlier this year when Brexit secretary David Davis astonished EU officials by declaring that neither agency would have to relocate after Brexit. The European Commission has since put him straight, adding that the UK would also have “no say” in where the agencies end up.

It remains unclear whether the UK will even be allowed to participate in the work of these, or any other, EU agencies at all. An agreement allowing UK inclusion in aspects of European policy such as medicines regulation would be beneficial to both sides, but there are hurdles – such as UK contributions to specific agencies’ budgets and the role of the European Court of Justice – which would need to be overcome in the Brexit negotiations.

The cost of the relocations themselves could also become a negotiation flashpoint. The Commission has insisted that the UK “should fully cover the specific costs related to the withdrawal process, such as the relocation of the agencies”. There is also the issue of the EMA’s outstanding rent on its shiny Canary Wharf premises, after it recently signed a rental contract for 20 years worth €400m. These immediate challenges will be hard enough to fix, and establishing the UK’s future relationship with the EU’s agencies seems a long way over the horizon.

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    Edited by Bill Emmott

    One Response to “The scramble for London’s EU agencies”

    • So what does the UK government think about these first results of it’s Brexit policy? 1000 staff, 40,000 hotel nights in London hotels lost to the business’ concerned? And what have the ” patriotic ” Brexit press said about this?
      One more proof that Brexit means Brexit : the UK is either in the EU or not. There is no such thing as a hard Brexit or a soft Brexit.