Media: EU tells UK to pay £1 billion for deeper market access

Brussels has told British Prime Minister Keir Starmer that the United Kingdom would need to make annual payments into European budgets as part of efforts to deepen ties with the bloc, marking a significant shift in post-Brexit relations.

European negotiators have indicated that contributions—estimated at around £1 billion ($1.25 billion) annually—would be a condition for expanded access to the European Union single market. The proposal is expected to be raised at a summit between Starmer and EU leaders later this summer, before formal negotiations on closer integration begin, The Sunday Times reveals.

“If the UK wants further integration they must ‘pay to play’,” one European diplomat said. “That is not unusual.”

Starmer is set to meet European leaders on May 4 at the European Political Community summit in Armenia, where discussions on resetting UK-EU relations are expected to feature prominently.

During the talks, the British government is also expected to announce plans to begin negotiations with Brussels to join the EU’s €78 billion loan programme for Ukraine. Participation would allow UK defense companies to supply equipment to Kyiv in exchange for a financial contribution of up to £400 million.

However, EU officials are pressing for broader financial commitments following Starmer’s call for “deeper economic integration” and potential alignment with the single market in select sectors.

European leaders agreed in March that UK participation in the EU’s electricity market would require contributions to the European Structural and Investment Funds (ESIF), a mechanism aimed at reducing regional disparities across the bloc.

One senior European diplomat said Brussels would not allow the UK to “cherry pick” benefits of the single market and would instead push for a Swiss-style arrangement requiring ongoing budget contributions.

Under a recent agreement, Switzerland committed to paying €375 million annually to the EU’s social cohesion fund in exchange for privileged access to the single market. Officials noted that, given the UK economy is roughly four times larger, its contributions could reach around £1 billion depending on the final terms.

Such proposals are likely to face political resistance at home, with opposition parties, including the Conservatives and Reform UK, pledging to overturn any moves toward deeper economic integration with the EU.

By Sabina Mammadli