Keir Starmer’s attempt to reset relations with the EU have suffered a major blow, after negotiations for the UK to join the EU’s flagship €150bn (£131bn) defence fund collapsed.
The UK had been pushing to join the EU’s Security Action for Europe (Safe) fund, a low-interest loan scheme that is part of the EU’s drive to boost defence spending by €800bn and rearm the continent, in response to the growing threat from Russia and cooling relations between Donald Trump’s US and the EU.
Entrance to the scheme would have enabled the British government to secure a bigger role for its defence firms. In September, France proposed a ceiling on the value of UK-produced military components in the fund.
The UK and EU had been expected to sign a technical agreement on Safe after establishing an administrative fee from London. But after months of wrangling, and only days before the 30 November deadline for an agreement, sources said the two sides remained “far apart” on the financial contribution Britain would make, Bloomberg reported.
EU officials have suggested an entry fee of up to €6bn, far higher than the administrative fee the government had envisaged paying. Peter Ricketts, the veteran former diplomat who chairs the European affairs committee in the House of Lords, described a rumoured €6.5bn fee as “so off the scale that it suggests some EU members don’t want the UK in the scheme”.
The minister for EU relations, Nick Thomas-Symonds, said it was “disappointing” that talks had fallen through but insisted that the UK defence industry would still be able to participate in projects through Safe on third-country terms.
“While it is disappointing that we have not been able to conclude discussions on UK participation in the first round of Safe, the UK defence industry will still be able to participate in projects through Safe on third-country terms.
“Negotiations were carried out in good faith, but our position was always clear: we will only sign agreements that are in the national interest and provide value for money.”
The door to greater UK participation appeared to have been pushed open in May when Starmer and the European Commission president, Ursula von der Leyen, signed an EU-UK security and defence partnership. Without this pact, the UK could never supply more than 35% of the value of components of any Safe-funded project.
As recently as last week, the prime minister had expressed a belief that quiet diplomacy would result in agreement, telling reporters travelling with him to the G20 summit in South Africa: “Negotiations are going on in the usual way and they will continue.”
He added: “I hope we can find an acceptable solution, but my strong view is that these things are better done quietly through diplomacy than exchanging views through the media.”
But soon after, the talks appeared to be on rocky ground after the defence secretary, John Healey, said the UK was willing to quit, telling the i newspaper the UK was not willing to sign up for “any price”.
Thomas-Symonds sought to downplay the significance of the collapse of negotiations on Friday, stating: “From leading the Coalition of the Willing for Ukraine to strengthening our relationships with allies, the UK is stepping up on European security in the face of rising threats and remains committed to collaborating with our allies and partners. In the last year alone, we have struck defence agreements across Europe and we will continue this close cooperation.”
He added that the UK and EU were continuing to “make strong progress on the historic UK-EU May agreement that supports jobs, bills and borders”.
