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Carl Court\/Getty Images<\/p>\nBrussels has told Sir Keir Starmer that Britain will have to make annual payments into European budgets for the first time since Brexit, as part of the prime minister\u2019s reset with the bloc.<\/p>\n
European negotiators have made it clear that paying the cash, expected to amount to about \u00a31 billion a year, is a condition of further access to the EU\u2019s single market.<\/p>\n
They want Starmer to make the concession in principle at a summit between the prime minister and European leaders this summer before detailed negotiations on more integration.<\/p>\n
Carl Court\/Getty Images<\/p>\n
\u201cIf the UK wants further integration they must \u2018pay to play\u2019,\u201d one European diplomat said. \u201cThat is not unusual.\u201d<\/p>\n
Starmer will hold talks with EU leaders on Monday at the European Political Community summit in Armenia, where he is expected to discuss plans for the reset. <\/p>\n
He will also announce that the UK will begin negotiations with Brussels to participate in the EU\u2019s \u00a378\u00a0billion loan scheme for Ukraine. <\/p>\n
British defence firms would be able to provide equipment for Kyiv<\/a> under the scheme in return for a financial contribution of up to \u00a3400 million from Britain.<\/p>\n But the EU expects Starmer to go further in contributing to the bloc\u2019s budgets after his call this year for \u201cdeeper economic integration\u201d and his plans to align the UK with the single market in areas \u201cwhere that would work for both sides\u201d.<\/p>\n European leaders agreed in March that the UK would have to pay into European Structural and Investment Funds (ESIF) for the first time since Brexit if it wanted to participate in the EU\u2019s single market for electricity.<\/p>\n Politics newsletter<\/p>\n Get our daily insider\u2019s guide to Westminster, plus a rundown of PMQs every Wednesday.<\/p>\n \t\t\t\t\tSign up with one click<\/p>\n The European Council has also called for a \u201cpermanent mechanism\u201d for an \u201cappropriate financial contribution\u201d from the UK for any further access to the single market.<\/p>\n It said this financial contribution should \u201cappropriately reflect the relative size of the UK\u2019s economy and the proportion of the internal market in which the UK aims to participate\u201d.<\/p>\n Ministers are carrying out an audit of which sectors could most benefit from further integration. Chemicals, pharmaceuticals and cars are seen as a priority.<\/p>\n In particular, businesses want mutual recognition of product standards so exporters do not have to pay for the costly retesting of products already approved in one market.<\/p>\n One senior European diplomat said that Brussels would not allow the UK to \u201ccherry pick\u201d and would insist on a Swiss-style deal that would tie it into contributing to annual EU budgets to reduce economic, social and territorial disparities across the bloc.<\/p>\n As part of a deal struck with Switzerland last year, Bern agreed to pay \u20ac375 million a year to the EU\u2019s social cohesion fund in return for privileged access to the EU single market. <\/p>\n The payments were calculated on the basis of Swiss GDP. Given the UK economy is about four times larger than Switzerland\u2019s, sources in Brussels suggested that the UK could be asked to pay in the region of \u00a31 billion depending on the deal that was struck.<\/p>\n Such a move would be politically contentious with both the Tories and Reform pledging to rip up Starmer\u2019s plans for further economic integration.<\/p>\n
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Dame Priti Patel spoke out against the payments to the EU, saying there was no democratic mandate for making themJames Glossop for The Times<\/p>\n