The European Union is reportedly demanding guarantees that the UK will compensate the bloc if a future government reneges on the Brexit 'reset' agreement currently being negotiated by Prime Minister Keir Starmer. The clause, nicknamed the 'Farage clause' by EU diplomats, would require any party pulling out of the agreement to cover the cost of reinstating border and infrastructure controls.
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 termination clause. This clause is seen as a means of ensuring the EU is not left out of pocket should Reform leader Nigel Farage win a general election and cancel any UK-EU sanitary and phytosanitary (SPS) agreement.
However, UK sources dismissed this notion, saying such a clause is routine in 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 started but are due to commence 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 dioxide emissions on goods exported to the EU has also proved complicated.
Anand Menon, director of UK in a Changing Europe, said: 'We shouldn't be surprised that the EU is playing hardball. After all, they have decided that we need these agreements more than they do. As such, they will extract every last concession.' The clause would cover costs of setting up infrastructure, equipment, recruitment and training for border controls, potentially running into billions of pounds.
