Brussels – Nigel Farage continues to cast a long shadow over EU-UK relations. Ten years after the traumatic – at least for a vast part of European public opinion – Brexit referendum, the former UKIP leader who pushed the UK out of the EU is now leading the polls at the head of Reform UK, a right-wing and decidedly Eurosceptic party, in a way that risks jeopardising the so-called “reset” negotiations between Brussels and London.
The EU’s doubts as to whether future UK governments would abide by the terms of any “reset” agreement are reflected in the so-called ‘Farage clause’. First reported by The Guardian, this clause is intended to require financial compensation in the event that the UK reneges on its commitments – a scenario already anticipated by the leader of Reform UK.
“I understand the instinct to ask for such a clause, but I think it is a completely pointless idea,” explains Ian Bond, Deputy Director of the Centre for European Reform (CER), speaking to The New Union Post for a balanced analysis of the latest behind-the-scenes developments in what would be a difficult fresh start after five years of an awkward post-Brexit stalemate. By definition, were Farage to enter government and be confronted with a demand for compensation, “he simply will not pay.”
The more the EU’s approach comes to resemble what were described during the Brexit negotiations as “punishment beatings,” the more likely it is that a future British government will adopt a hostile stance towards the EU. As such an outcome would benefit none of the parties concerned, the CER’s Deputy Director argues that the EU should be “reasonably generous” in its approach to trade and other areas of cooperation if it wishes future UK governments to see closer alignment as being in their own interest.
The leverage lies in the same “paradoxical situation” that the UK is currently experiencing. Although Reform UK could become the largest single party in Parliament after the next general election – a political force that claims nothing better has ever happened to the UK than Brexit – the majority of the public recognise Brexit as a mistake and would like to return to the former relationship with the EU. A shift in tone from Brussels could indirectly strengthen the position of the Labour government led by Keir Starmer – and even detonate a staunch anti-EU revival in the country.
The EU-UK “reset”
Over the past year and a half, Brussels and London have sought to advance the so-called “reset” in their relationship. A significant milestone was reached at the 2025 EU-UK Summit with the signing of a new strategic partnership aimed at deepening cooperation beyond the existing Brexit framework. This includes future agreements on security and defence, fisheries, energy cooperation, a new Youth Mobility Scheme, sanitary and phytosanitary measures, and the Emissions Trading Systems (ETS).
In December 2025, the parties agreed that the UK would rejoin the Erasmus+ programme from 2027. However, for most of the areas set out in the Common Understanding, “we are only at the very earliest stages of negotiation,” Bond cautions. While a mandate for integrating the electricity market has just been agreed, the British government hopes that new sanitary and phytosanitary rules, along with alignment between the EU and UK emissions trading schemes, will come into force “in 2027.”
Progress is expected before the next EU-UK Summit – not yet scheduled – but the CER’s Deputy Director highlights two areas that illustrate some of the biggest problems still present between the parties.
First, the potential reintegration of the UK into the EU electricity market. Despite being mutually beneficial, the European Commission is expected to negotiate UK payments into EU cohesion funds. From Brussels’ perspective, this would follow the model applied to countries such as Norway and Switzerland, which make financial contributions in exchange for access to the Internal market. From the UK’s standpoint, however, this risks being perceived as the EU not only benefiting from a more resilient electricity market but also seeking additional funding from British taxpayers. As Bond warns, this would be “politically a poison pill for any British government to swallow, even one that is relatively pro-European.”
Second, the Youth Mobility Scheme. On the one hand, EU students would be expected to pay the same fees as UK students, despite the loss of revenue for British universities. On the other hand, the EU is seeking to limit the use of the youth experience visa to a single member state, restricting the level of mobility that existed during the UK’s EU membership – for example, working in a ski resort in France during the winter season and then moving to Italy to work in a beach club during the summer. While London is being asked to make “quite difficult and potentially expensive compromises,” Brussels is unwilling to offer concessions that “do not actually cost the EU anything.”
According to the former British diplomat, “this is still the legacy of the bad feeling that grew up over Brexit,” with a tendency on the EU side to believe that, because the UK walked away from the relationship, it deserves to be punished for doing so. “This is an understandable human response, but it is not a very helpful way of trying to build a constructive relationship for the future,” particularly at a time when both sides are under pressure from external challenges – Trump among them.
Looking ahead
A number of strategic areas in which clear mutual interests exist could be prioritised in order to inject momentum into the ‘reset’ negotiations, “if they were prepared to work together more closely,” Bond argues. In particular, closer cooperation in the fields of law enforcement and justice could be achieved “relatively quickly,” provided the UK takes steps to address provisions relating to criminal and civil judicial cooperation contained in the post-Brexit Trade and Cooperation Agreement.
Another area of shared interest lies in the development of new generations of secure communications satellites, potentially involving common contractors and interoperable equipment, although “it may be technically more difficult or take more time.”
On the people-to-people dimension, the British government is seeking to ease mobility for touring artists and musicians. However, “it does not seem that there is much willingness” on the EU side for exploring the kind of “creative solutions” that such an initiative would require.
Considerable attention has also been put to cooperation on security and defence, although momentum has stalled following the breakdown of discussions on UK participation in the SAFE Instrument. The EU requested an upfront payment of €6.7 billion – representing around 10% of the UK’s defence budget – without any guarantee of securing contracts in return. “It seemed to me that it was an entirely unrealistic ask,” Bond observes. He adds that Brussels should “actually think again about the approach that it took,” suggesting that a “more reasonable approach” would be to follow the model applied to Canada, under which payments are made in proportion to the contracts awarded.
