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Reports this week suggest that the EU is seeking a so-called 'Farage Clause' in its Brexit reset negotiations with the UK. Under the proposal, Britain would be forced to hand over compensation to the EU if a future UK Government reneges on any deal struck now by Keir Starmer.

The news comes some eight months since the last UK-EU summit which unveiled the first details of this 'reset' in relations promised by the then new Labour Government.

Everything else announced at last May's summit was aspirational, including statements made about the other three areas highlighted by Labour during the election.

Two of these, mutual recognition of professional qualifications and new provisions for touring artists, were not prioritized by the summit. Only the third UK priority was among those given more prominence, a 'sanitary and phytosanitary' (SPS) agreement on food and agricultural trade. A Youth Mobility Scheme, initially resisted by the UK but desired by the EU, was also among the prominent possibilities.

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Since the summit, little progress has been made on realizing these aspirations. The only new agreement has been for the UK to join the Erasmus+ study exchange programme from 2027.

On the other hand, negotiations for the UK to participate in the EU's SAFE defence procurement scheme have ended in failure. Now, although there are several other issues under negotiation, most attention focuses on an SPS agreement and an agreement to link UK and EU emissions trading schemes (ETS).

The potential deals on SPS and ETS share a particular feature, which is that both would require the UK to agree to 'dynamic alignment' with EU regulations and, with that, some role for the European Courts of Justice (ECJ). Politically, this makes them anathema to Brexiters, and they have come on to the agenda because an ECJ role was the only one of the previous Conservative Government's Brexit 'red lines' which Labour have, very quietly, dropped.

Even so, for a long time Labour ministers tried to imply that these deals would be possible without dynamic alignment. But this was never realistic, and it has recently been reported that Starmer's Government is preparing legislation to enable such regulatory alignment in these two areas, and perhaps others. This suggests, although there has been no announcement of it, that agreement on SPS and ETS is imminent.

One issue which may still be under negotiation is what is being reported as the EU's requirement for a 'Farage clause'. This, it appears, would be a guarantee of compensation in the event of a future UK Government reneging on SPS, ETS, or other related agreements. It has a particular salience because both Nigel Farage and Kemi Badenoch have indicated that if they came to power then they would reverse agreements made with the EU by the Labour Government.

The 'Farage clause' reports are significant because this is perhaps the first time something widely discussed by commentators has been repeated by officials, albeit they are unnamed. It shows that domestic UK politics constitutes a real block on a substantive reset, something which applies even more strongly to more ambitious ideas about joining the EU, or the Single Market, or creating a UK-EU Customs Union. For, so long as there is no settled political consensus about closer post-Brexit relations with the EU, and every possibility that the next government will be ferociously opposed to closer relations, there are significant risks to the EU in reaching agreements with the present Government.

It often used to be remarked during th...