How the UK still benefits from EU funds

A centrepiece of today's UK-EU summit is a new defence and security pact that paves the way for British defence manufacturers to bid for contracts from the €150 billion (£126 billion) Security Action for Europe fund.

As part of this "reset" with the EU, Keir Starmer is thought to have made "significant concessions" on European fishing rights in British waters, said The Times. Even so, not everyone was so keen to let the UK in, with France, in particular, "pressing hard" for a "Europe-first policy" on defence contracts, one diplomat told the newspaper. The debate over how much access British companies should have to EU funds is part of the delicate ongoing process of defining the UK's relationship to Europe in the aftermath of Brexit.

What EU funding does the UK still get?

Under the EU's current spending framework, which runs until 2027, the UK is eligible for three major EU-run scientific programmes: Euratom (the European Atomic Energy Community); the Copernicus space and Earth observation programme, and the Horizon Europe scientific research and innovation project. But the UK can only participate on "associated" or "third country" terms. This means we pay "an operational contribution" to each programme, based on the ratio of the UK's GDP to the EU's GDP.

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UK-based international NGOs are also still able to access some EU development funding streams – for humanitarian aid, for example – under "third country" rules and with some changes to eligibility.

The UK also participates in the Peace Plus investment programme: a €1.1 billion (£926 million) partnership between the UK, the EU, and the Northern Ireland Executive (which has its own post-Brexit arrangement with the EU), aimed at supporting peace and prosperity across Northern Ireland and the border region with Ireland.

How much money are we talking about?

British scientists received half a billion pounds in grants from the Horizon programme in 2024 – after being excluded for three years following "a bitter row over post-Brexit trade rules in Northern Ireland", said Politico.

After the UK negotiated re-entry to Horizon, it was "catapulted to the top of the league" of 19 non-EU participants, said The Guardian. According to EU data, the UK's 3,000 grants, worth €574.7 million (£500 million), are the most of any non-EU participant and the third highest by value. Overall, the UK was fifth biggest grant beneficiary, behind Germany, Spain, the Netherlands and France. British scientists are "over the moon" to be back in the programme.

What will happen after 2027, in the next EU funding cycle? Nobody knows. The bloc is "secretly" working on its strategy for future funding rounds.

Are we still paying the EU?

After leaving the customs union and single market, we negotiated a free-trade deal – the UK-EU Trade and Cooperation Agreement – with the bloc. That means no duties are levied on the import and export of goods but the "time-consuming and sometimes complicated new paperwork" businesses now have to fill out when exporting to or importing from the EU has had a significant "negative impact", said the BBC.

And we're still paying the "divorce bill" negotiated as part of our withdrawal agreement. There is no definitive cost to the settlement – that will depend on future exchange rates and EU budgets – but the latest Treasury estimate is that the net cost to the UK will be £30.2 billion, £23.8 billion of which had been paid, as of December 2023.

The withdrawal agreement also "covers obligations entered into while the UK was still a member state but for which final payment falls due after the end of 2020", said Ian Begg, a professor at the London School of Economics, on the LSE blog. The last payments, notably for pensions of former EU staff, may fall "decades hence".