The European Union is reportedly insisting on a robust termination clause in its current negotiations with the UK, designed to shield the bloc from financial loss should a future British government tear up any new agreement. This move, seen by some as a direct response to the threat of a Reform UK election victory, underscores the lasting financial and administrative legacy of Brexit.
The 'Farage Clause': A Financial Safeguard
According to a draft text seen by the Financial Times, the EU is seeking a provision within a potential sanitary and phytosanitary (SPS) agreement that would force any party withdrawing from the deal to cover the costs of re-establishing border controls. EU diplomats have informally nicknamed this the "Farage clause", a reference to Reform UK leader Nigel Farage and his party's pledge to cancel any such UK-EU pact.
The clause explicitly states that compensation would include the expense of setting up necessary infrastructure, equipment, and the initial recruitment and training of staff for border controls—a bill that could potentially reach billions of pounds.
A Stark Reminder of Brexit's Colossal Cost
This demand acts as a powerful reminder of the immense cost of the UK's departure from the EU. In 2020, the bloc established a €5.4 billion (£4.7bn) Brexit adjustment reserve to help member states cope with the disruption. This fund financed the return of customs and regulatory checks not seen since before the single market's creation in 1993.
Ireland received €920m from this fund, while the Netherlands was allocated over €800m. France spent at least €200m deploying customs officers, border police, and inspectors in ports like Calais and Dunkirk, including €20m for special checks on racehorses via Eurotunnel. The Netherlands hired over 900 new customs officials and 145 veterinarians for Rotterdam, and Spain took on an additional 860 employees for border control.
Negotiations and Political Reactions
While the so-called "Farage clause" has captured headlines, UK sources have downplayed its significance. They argue it is a routine feature of international agreements designed to "work both ways", meaning the EU would also have to compensate the UK if it chose to exit the deal. A Labour source described the exit provisions as a basic staple of trade pacts, calling the framing of them as a "democratic outrage" to be "frankly exhausting".
Negotiations on the SPS deal, which aims to ease post-Brexit checks on farm produce, are due to begin this month but may take months to conclude. The broader "reset" package, which includes a return to the Erasmus student exchange scheme, remains complex. A separate deal on the carbon border adjustment mechanism (CBAM) has also proven difficult, with hopes of a pre-Christmas agreement failing to materialise.
Professor Anand Menon, director of the UK in a Changing Europe think tank, noted: "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 European Commission and UK government have been approached for comment on the ongoing negotiations.
