The European Union is pushing for a compensation clause in ongoing Brexit “reset” negotiations with the UK, aimed at protecting the bloc if a future British government withdraws from the agreement being negotiated by Prime Minister Keir Starmer.
The proposed provision would require the party exiting the deal to cover the costs of reinstating border checks and related infrastructure. EU officials argue the clause is necessary given the financial and logistical disruption caused by the UK’s departure from the bloc in 2020, which forced EU members to spend billions on new customs and regulatory systems.
Dubbed the “Farage clause” by EU diplomats, the measure is viewed by some as insurance against the possibility of a future UK government abandoning a proposed agreement on food and agricultural standards. Such a move could trigger the reintroduction of extensive border controls and compliance checks.
UK officials have downplayed the controversy, saying exit and compensation clauses are standard features of international agreements and would apply equally to both sides. Labour sources have stressed that the provision is a routine legal safeguard rather than a political concession.
Negotiations on the agriculture and food standards agreement, which aims to ease post-Brexit trade frictions, are expected to begin soon but are likely to be complex and lengthy. Talks on other elements of the reset package, including emissions-related trade rules, have also faced difficulties.
European analysts note that the EU believes the UK needs these agreements more urgently and is therefore pressing for stronger guarantees. The compensation clause could potentially involve costs running into billions, reflecting the scale of border infrastructure and staffing required if current arrangements were dismantled.