Brussels is reportedly demanding guarantees that the UK will compensate the bloc if a future government reneges on the Brexit “reset” agreement being negotiated by Sir Keir Starmer. The termination clause is a reminder of the costly divorce, with the EU having set up a €5.4bn (£4.7bn) fund to help member states cope with disruption caused by the UK’s exit.
According to the Financial Times, a draft text of an agreement on agricultural trade, aimed at removing post-Brexit checks on farm produce, includes a provision that any party pulling out must cover the cost of reinstating border and infrastructure controls. Dubbed the “Farage clause” by EU diplomats, it is intended to ensure the bloc is not left out of pocket if Reform leader Nigel Farage wins a general election and cancels any sanitary and phytosanitary (SPS) agreement.
UK sources dismissed the idea as routine, stating the clause is a standard feature of international deals and works both ways, meaning the EU would also have to compensate the UK if it backed out. A Labour source said: “Exit provisions are a basic staple of any international trade agreement. Pretending these routine legal contingencies constitute a democratic outrage [is] frankly exhausting.”
Negotiations on the SPS deal have not yet begun but are due to start this month. They may take months to complete, as the topic is one of the most complicated in the reset package, which also includes a return to the Erasmus programme. A deal on carbon emissions from goods exported to the EU has also proved challenging, with hopes of an agreement before Christmas coming to nothing.
The “Farage clause” would require compensation for setting up “the infrastructure and equipment, initial recruitment and training, in order to set up the necessary border controls” – potentially running to billions of pounds. When pricing Brexit disruption in 2020, the EU allocated €920m to Ireland and more than €800m to the Netherlands for customs officers and veterinary controls, among other costs.
