Draft Farage clause' would ensure EU not out of pocket if Reform UK wins election

"The EU is reportedly demanding guarantees the UK will compensate the bloc if a future government reneges on the Brexit reset agreement Keir Starmer is currently negotiating. The termination clause is a stark reminder of the painful and costly divorce in which the EU set up a colossal 5.4bn (4.7bn) fund to help its own member states cope with the disruption caused by the UK's exit in 2020."

"However, UK sources dismissed this notion, saying the clause was routine in any international deals and was written to work both ways and would therefore also force the EU to compensate the UK if it backed out of the deal in future. A Labour source said the exit provisions were a basic staple of any international trade agreement and pretending these routine legal contingencies constitute a democratic outrage [was] frankly exhausting."

The EU is seeking contractual guarantees that the UK will pay to reinstate border and infrastructure controls if a future UK government withdraws from the Brexit reset agreements. A draft agricultural trade text aims to remove post-Brexit checks on farm produce and includes an exit clause requiring a withdrawing party to cover reinstatement costs. Some diplomats nickname the clause the 'Farage clause' and view it as protection against political shifts; UK sources counter that such exit provisions are routine, reciprocal and would obligate the EU to compensate the UK if it withdrew. Negotiations on the SPS deal and related carbon border measures remain complex and unresolved.

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