British taxpayers funded EU factory at heart of vaccine row

British taxpayers have invested millions of pounds into a Dutch vaccine factory at the centre of a threatened blockade by the European Commission, The Telegraph can disclose.

The Halix factory in Leiden was equipped to produce doses of the Oxford/AstraZeneca vaccine after Matt Hancock, the Health Secretary, approved a major investment last April.

The money – reported to be in the region of £21 million – was meant to secure vital shipments to the UK. But Brussels has threatened to ban exports and on Thursday vowed there would be "no negotiation" with Downing Street, insisting that the doses should be diverted to European nations.

A leaked letter revealed that Oxford scientists urged a major EU nation to invest in the Halix factory alongside the UK last April, but the deal was never signed.

The European Union would have been likely to have secured millions of AstraZeneca doses had the Dutch government acted more decisively, sources suggested. An EU official admitted the bloc had yet to contribute a single euro towards the Halix plant.

MPs suggested on Thursday night that Downing Street should ask for its money back. Steve Baker, the deputy chairman of the Covid Recovery Group, said: "We invested in this plant. We have contractual entitlements to vaccines. If the EU disagrees with those entitlements, they have the option of going to court.

"Even in my worst Eurosceptic moments, I would never have dreamt the EU would behave like this."

The news that Britain funded the very vaccine factory now at the centre of the EU blockade comes as a major shortfall in AstraZeneca supplies threatens to disrupt the successful UK rollout.

GPs have been told to stop administering first doses this month and focus their vaccine resources primarily on those awaiting their second jabs. Downing Street says the UK remains on target to vaccinate all adults by July.

The Government has entered into negotiations with the EU over the doses produced at the Halix plant, which gained approval from the European regulator last week. Sources said the factory was ready to produce five million doses of raw vaccine every month.

But Thierry Breton, the EU's internal market commissioner, warned that "zero" jabs would be sent to the UK until AstraZeneca had fulfilled its commitments to Brussels, even after Germany suspended routine use of the AstraZeneca vaccine for people aged below 60 because of fears of rare blood clots.

"If [AstraZeneca] does more, we don't have any issue, but as long as it doesn't deliver its commitment to us, the doses stay in Europe," Mr Breton said. "There is no negotiation."

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Whitehall sources, however, pointed out that the UK guaranteed millions of pounds to the Halix factory in April last year – before the Oxford vaccine had been proven effective.

The University of Oxford signed a deal with the Dutch firm after identifying the brand new Halix plant as suitable for building up capacity for millions of doses. Scientists from the university then approached Mark Rutte, the Dutch prime minister, with a request for 10 million euros to build barrels capable of holding 1,000 litres of raw vaccine.

"There will probably be a huge demand for vaccines if they successfully pass the tests," the scientists wrote in a letter leaked to the Dutch broadcaster NOS. "Most likely, the quantities of available vaccines will be limited for several months. To avoid major delays, production capacity must be increased now."

But the Dutch failed to sign the deal despite entering initial talks with Halix. The failure to invest meant the EU missed the chance to secure millions of doses for itself, sources suggested.

According to the Dutch media, the promised UK investment was in the region of 25 million Euros, around £21m, although a Department of Health source said the precise reported figure was "incorrect".

On Thursday night, an EU official admitted the bloc had yet to contribute any cash to the Halix factory, saying: "We have checked for any EU funding possibly given to Halix under EU financial instruments but could not identify any support. This does not prejudge any national funding given by member states."

Sir John Bell, Regius professor at the University of Oxford and a leading figure in the development of the AstraZeneca jab, said dealing with the EU had been like "pulling teeth".

"It has just been a nightmare, for AstraZeneca especially," he said. "And then they turn round and say the jab isn't safe. I would say it is time for the EU to make its mind up."

The stand-off over the Halix factory is further complicated by Brussels' demand for vaccines from the two AstraZeneca factories in the UK, which manufacture the vast majority of the AstraZeneca jabs used by Britain.

The commission wants Boris Johnson to release AstraZeneca from its UK contract, which gives Britain first refusal on jabs. It argues that the EU contract with AstraZeneca counts the two British plants as part of the bloc's supply chain.

Brussels has demanded "reciprocity" from the UK and believes Britain is dependent on EU supplies of vaccines for the completion of its vaccination campaign. Twenty million Pfizer jabs have been exported to the UK since December, leading some sources to claim that the British success was "made in the EU".

UK-EU negotiations over the Halix supplies are expected to continue next week. The UK regulator is yet to grant it approval, although a million doses were exported from Halix to the UK for clearance between December and last month.

Last week, Ursula von der Leyen, the president of the European Commission, introduced tougher export rules allowing Brussels to target countries with higher vaccination rates than the EU and low exports to the EU, like Britain.

EU leaders, wary that the UK could block the export of raw vaccine materials to the EU, stopped short of explicitly backing her plans at a summit but insisted AstraZeneca would have to fulfil its contract before being allowed to export.

A spokesman for AstraZeneca refused to comment. But the company said on Tuesday that "the EU supply chain is overwhelmingly for the EU".

A University of Oxford spokesman said: "We are not aware of any formal letter sent by Oxford University to the Dutch government. However, the vaccine team did approach a wide range of potential funding partners in early 2020 before the partnership was struck with AstraZeneca."

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