Inside the vaccine factory tug of war: UK puts up millions, EU says 'non' to exports

The letter from the University of Oxford was meant as a clear warning to Europe. Back our vaccine factory, the British scientists said, or face the consequences.

"In order to avoid major delays, production capacity must now be increased," the Oxford team told Mark Rutte, the Dutch prime minister, last April.

Nearly a year later, the Halix factory in Leiden, the Netherlands, is caught in a cross-Channel tug of war.

Stung by a 200 million shortfall in its own contracted AstraZeneca deliveries, the European Union has vowed to block the export of every single dose made in the 6,700 square metre Halix factory to the UK.

Yet it can now be revealed that the UK taxpayer spent millions of pounds to build up capacity at the state-of-the-art plant before the Oxford vaccine had been proven to work.

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Moreover, the Dutch government was offered the chance to join forces with the UK and secure millions of doses for that country – and the EU – but failed to contribute a single euro.

On Thursday night, an EU official told The Telegraph: "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."

Downing Street believes the UK's initial investment into the Halix factory entitles it to a share of the five million doses the plant can now produce every month. On top of the crucial cash injection, British engineers travelled to Halix over Christmas to improve production at the plant.

The EU, however, sees things differently. Thierry Breton, the bloc's internal market commissioner, said "zero" AstraZeneca jabs made on the continent would be shipped across the Channel until the company fulfilled its commitments to Europe. "There is no negotiation," he added.

Downing Street took the gamble on the Halix factory in early April, at the height of the first wave. According to the Dutch media, the promised investment was in the region of 25 million euros – around £21 million – although a Department of Health source said the precise reported figure was "incorrect".

The University of Oxford had argued that the Dutch facility – brand new and nearly empty – was well suited to pumping out millions of doses of a new vaccine should it be proven effective. It was feared that the UK did not have enough domestic capacity to meet demand, so Downing Street agreed to come up with the cash and a contract with Halix was quickly signed.

Oxford needed more money, however. The UK investment was enough to build giant barrels capable of brewing 200 litres of raw vaccine at a time, but Oxford wanted barrels five times as large.

Downing Street was unwilling to invest even more money in a facility outside the UK and decided to focus efforts on two factories in Oxfordshire and Staffordshire. So on April 28, a member of the Oxford team approached a Dutch MP, Pieter Omtzigt, with a letter asking for 10 million euros in government investment.

"There will probably be a huge demand for vaccines if they successfully pass the tests," the letter said, according to an extract leaked to the Dutch broadcaster NOS, which revealed the extent of the UK investment. "Most likely, the quantities of available vaccines will be limited for several months. To avoid major delays, production capacity must be increased now."

Mr Omtzigt, a popular campaigning MP, brought the letter to Mr Rutte's office and the pair discussed its contents on April 28. The letter was sent directly to the prime minister's office the following day.

On April 30, Oxford announced its partnership with the pharmaceutical giant AstraZeneca to produce its vaccine. The Dutch government did try to sign a deal with Halix, and the ministry of health spoke with the firm that day. Further talks were held on May 4.

Halix eventually told the Dutch that their extra 10 million euros was "no longer an issue" because of the money flowing in from AstraZeneca. However, sources told NOS that the Dutch failed to contact the Oxford researchers who sent the letter. Had they done so, their investment would have been likely to have been accepted.

If Mr Rutte had signed up alongside the UK, the Dutch may have been able to reserve extra doses for themselves and later for the EU once the bloc's joint vaccination strategy was set up in August, sources suggested.

Hugo de Jonge, the Dutch health minister, insisted this week that the Netherlands had "really rolled out the red carpet" when the Halix plant asked for investment. Mr de Jonge admitted in a debate in the Dutch parliament that "there was no longer a need" for the investment once AstraZeneca had pledged the cash.

The Netherlands coronavirus tsar said it was "nonsensical" to suggest that the country had missed out on vaccines because the government dawdled over making a decision.

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

UK-EU negotiations over the Halix supplies are expected to continue next week, but an immediate breakthrough seems unlikely even if the immediate threat of a general vaccine export ban appears to be averted.

The European Medicines Agency cleared Halix to supply the EU last Friday. The UK regulator is yet to grant it approval, although a million doses were exported from Halix to the EU for clearance between December and last month.

An 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."

A UK Government official said: "We continue to discuss what more we can do to ensure a reciprocally beneficial relationship between the UK and EU on Covid-19.

"As the Prime Minister said in previous statements, including one co-signed by other world leaders, no single country can face this health emergency alone, and we need to address this challenge through solidarity and cooperation."

Halix refused to comment.

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