Keir Starmer's pursuit of 'closer EU relationship' could cost taxpayers a scorching £3 BILLION

Oliver Partridge
Sat, 04 Apr 2026 20:28:24 +0000

Sir Keir Starmer's pursuit of a closer trading relationship with the European Union could burden British taxpayers with annual payments of near £3 billion, according to emerging details of Brussels' demands.

The Prime Minister has signalled his intention to secure an "ambitious" new agreement with the bloc, refusing to rule out eventual re-entry to the single market.

EU officials have now instructed negotiators to establish what they describe as "a permanent mechanism for an appropriate financial contribution" from the UK in exchange for reduced trade barriers.

The funds would be directed towards development programmes in less prosperous EU member states.

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A summit to advance these plans is anticipated around June 23, coinciding with the tenth anniversary of the Brexit referendum.

Shadow Chancellor Sir Mel Stride has accused the Labour government of committing Britain to substantial payments without proper oversight.

"Keir Starmer and Rachel Reeves are quietly signing Britain up to send billions back to Brussels with no say, no vote, and no scrutiny," he said.

Sir Mel pointed to existing expenditure as evidence of a pattern, noting the government has already allocated approximately half a billion pounds to rejoin the Erasmus student exchange programme, and a similar sum to France for efforts to curb Channel crossings.

He added: "When hardworking families are tightening their belts just to get by and businesses are being taxed to within an inch of their life, the country deserves transparency, not another blank cheque".

The Shadow Chancellor demanded Labour reveal the full financial implications for taxpayers - expected to be some £2.9 billion.

The European Union has made clear that any enhanced market access must be accompanied by contributions to its "cohesion policy", which aims to reduce economic disparities across member regions.

Norway provides a precedent for such arrangements, paying £390 million annually for single market participation, despite not being an EU member.

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However, Brussels has indicated that Britain's contribution would reflect its considerably larger economy, which is more than seven times the size of Norway's.

Initial discussions are expected to focus on British participation in the EU's internal electricity market, with payments increasing as further access is negotiated.

The Council of the European Union stated that any financial contribution should "appropriately reflect the relative size of the UK's economy and the proportion of the internal market in which the UK aims to participate".

Government sources maintain that while the EU has outlined its position, formal negotiations have not yet commenced, and no financial contributions have been agreed or paid.

A Downing Street spokesman said: “They agreed to keep in close contact as this important work progresses in the lead-up to the next UK-EU Summit".

The Express reported that insiders emphasise Britain will only accept arrangements deemed to be in the national interest, and offering genuine value for money, with the objective of stimulating economic growth and reducing costs for businesses and consumers.

The spokesperson confirmed with GB News that the £3 billion costs are based on a hypothetical scenario, and that the economy is set to benefit by at least £9 billion a year by 2040 from the food and energy deals.

No10 detailed other benefits, such as increasing agricultural exports to the EU by 16 percent, and ensuring lorries spend less time in queues at the border - which could reduce pressure on food prices for consumers.

They claimed additional deals on carbon pricing also avoids the risk of UK businesses paying taxes to the EU on £7 billion worth of trade.

"This is all part of a new, pragmatic relationship with Europe, markedly different from what came before," they said, "We will have a decision-making role for EU rules. We will negotiate a list of carve-outs that are in our national interest".

"This is demonstrated by the 30 per cent discount on Erasmus+ membership we secured, which will benefit thousands of people across the UK - balancing the benefits that it will bring with value for money for the taxpayer".

"All of this is a clear benefit of our work to reset our relationship with the EU, as this agreement demonstrates clear momentum to our talks with the EU heading into 2026".

Despite this, critics warn that deeper single market integration would leave the UK bound by regulations it has no role in shaping.

Sir Simon Clarke, former Conservative cabinet minister and director of the Onward think tank, cautioned: "Less than two years into Government, and they are taking us back into large parts of the Single Market, this time entirely as a rule-taker".