According to multiple reports, EU negotiators have said the UK must pay around £1bn a year as a condition for a reset in relations and greater single market access. A European diplomat told the Daily Mail that if the UK wants further integration, it must contribute financially, saying such payments are typical. The Independent reported that UK ministers disagree with the demand, viewing it as an opening negotiating position.
Shadow Foreign Secretary Priti Patel accused Prime Minister Sir Keir Starmer of reversing Brexit and planning the payment, which she called an undemocratic attack on taxpayers. Starmer has called for deeper economic integration and alignment with the single market where mutually beneficial. Starmer's office confirmed he attended the European Political Community summit in Armenia for talks on a new EU relationship.
The government announced that Starmer launched a bid to join the EU's €90bn loan scheme for Ukraine. Starmer said joining the scheme would be 'very good' for UK-EU ties and job creation. According to Downing Street, the PM is due to attend a summit with European leaders this summer ahead of detailed negotiations.
In March, the European Council stated that the UK would have to contribute to EU funds to join the single market for electricity. The European Council has called for a permanent mechanism for an appropriate financial contribution for further single market access. Switzerland provides a precedent, paying €375m a year to the EU's social cohesion fund for privileged single market access, according to official EU figures.
Starmer wrote in The Observer that Brexit has damaged the economy and that Britain must be at the heart of a stronger Europe on defence, security, energy, and the economy. According to his spokesman, Starmer earlier rejected rejoining a customs union, despite support from Health Secretary Wes Streeting. Starmer said that trade deals with the US and India made a customs union unworkable, as too much water had passed under the bridge.
The exact amount the UK will be asked to pay annually has not been confirmed, and it remains unclear whether the government will ultimately agree to the payment demand. The specifics of the concessions the UK would receive in return, including which areas of the single market access would be expanded, are also not yet determined. The timeline for the negotiations beyond the summer summit remains uncertain.