As the UK and the European Union navigate the complex landscape of post-Brexit negotiations, a contentious issue has emerged – the so-called “Farage clause.” This provision, reportedly demanded by the EU, aims to ensure that Brussels is not left financially disadvantaged should a future UK government renege on the “reset” agreement currently being negotiated by Labour leader Keir Starmer.
The termination clause serves as a stark reminder of the painful and costly divorce between the UK and the EU. In 2020, the bloc set up a colossal €5.4bn (£4.7bn) fund to help its member states cope with the disruption caused by Britain’s exit. Now, the EU is seeking assurances that it will be compensated if the UK decides to pull out of any future agreements.
According to the Financial Times, a draft text of an agreement on agricultural trade, designed to remove post-Brexit checks on farm produce, stipulates that any party withdrawing from the deal would be responsible for covering the costs of reinstating border and infrastructure controls. Dubbed the “Farage clause” by EU diplomats, this provision is seen as a safeguard against the possibility of the Reform UK leader, Nigel Farage, winning a general election and making good on his threat to cancel any UK-EU sanitary and phytosanitary (SPS) agreement.
However, UK sources have dismissed this notion, arguing that such clauses are routine in international deals and are written “to work both ways.” They contend that the clause would also force the EU to compensate the UK if it were to back out of the agreement in the future.
A Labour source has echoed this sentiment, stating that “exit provisions are a basic staple of any international trade agreement” and that “pretending these routine legal contingencies constitute a democratic outrage is frankly exhausting.”
Negotiations on the SPS deal are yet to commence but are scheduled to begin this month. The process is expected to be lengthy and complex, as this topic is one of the most intricate elements of the reset package, which also includes a return to the Erasmus scheme, agreed upon before Christmas.
Anand Menon, the director of UK in a Changing Europe, has observed that the EU’s hardball tactics should not come as a surprise. “After all, they have decided that we need these agreements more than they do. As such, they will extract every last concession,” he said.
According to the Financial Times, the “Farage clause” stipulates that if either side withdraws from the agreement, the compensation would cover the costs of setting up “the infrastructure and equipment, initial recruitment and training, in order to set up the necessary border controls,” which could run into billions of pounds.
As the UK and the EU continue to navigate the post-Brexit landscape, the “Farage clause” stands as a testament to the EU’s determination to protect its interests and ensure that it is not left financially vulnerable should the political landscape in Britain shift in the future.
