UK ready to discuss paying into EU funds for electricity market access

Britain is open to discussing payments towards infrastructure projects in poorer parts of the EU in exchange for access to the European electricity market, according to Hamish Falconer, the cabinet minister in charge of renegotiating the bilateral relationship. He told the Guardian he is sure the two sides will talk about it after this month's summit, as ministers push to deepen ties over the next few years. Five European leaders welcomed the UK's desire to join the electricity market this weekend, but said Britain would have to pay into a so-called cohesion fund to get in.

Falconer isn't signing up to that. Asked about the EU demand, he said: “We have not accepted that principle.” He acknowledged Brussels had asked for it and added: “Again, this is something no doubt we will discuss.” He also said he hopes the keenly anticipated EU-UK summit on 20 November “will go some real distance in undoing some of the harm that Brexit has done,” with negotiators aiming to sign deals on food and drink, carbon emissions and youth mobility.

The cohesion fund link is shaping up to be the flashpoint. The fund promotes economic development in the EU's poorer regions, and UK officials are wary of any deal that could send British taxpayers' money to infrastructure projects in central and eastern Europe. Prime minister Andy Burnham has said he wants a far closer relationship with the EU, even floating rejoining as a full member, while senior Brussels figures say they are keen to talk — provided the UK starts paying for the schemes it wants.

Defence is where the bruises are still fresh. Falconer is clear the UK wants into a future EU defence fund, having watched last year's talks on Britain's entry to the €150bn (£125bn) fund collapse in a fight over its contribution. The UK had sought a place in the first round of the EU's Security Action for Europe (Safe) fund, a low-interest loan scheme inside a Brussels push to grow defence spending by €800bn, but EU officials floated an entry fee of up to €6bn — far above the administrative fee London expected. “I think it's a real shame that the UK was not part of that scheme,” Falconer said, adding he hopes for a Safe2 the UK could join “on reasonable terms.”

On youth mobility, Falconer said he hopes negotiators land a scheme in time for the 20 November summit, though demands for home tuition fees for EU students at UK universities remain a sticking point. The Guardian reported last week that the UK was prepared to spend up to £450m a year on discounted tuition fees for EU students if Brussels let Britain into the Made in Europe industrial programme. Falconer said lower fees sit “outside of the common understanding” and would need different arrangements, but confirmed talks are under way. He was bullish on the UK's return next year to Erasmus+ — which it left under Boris Johnson's Brexit deal in 2020 — opening it up to schools and colleges as well as universities, and hopes applications open around the start of the summit. Nigel Farage's criticism of the scheme drew a jab: “I think honestly Nigel Farage is being a big old grinch about this.”