Sir Keir Starmer’s ambition to lead a Brexit reset could be scuppered after the European Union issued an ultimatum over university tuition fees.
The bloc has made the demand as part of any agreement that would allow young people to live and work across borders.
Brussels has insisted European students receive reduced fees as part of any deal allowing young people to live and work across different countries, a condition that has brought discussions to a near standstill.
The impasse comes with approximately three months remaining before a summit scheduled for late June or early July.
During these talks, the Prime Minister had hoped to announce agreements on trade and travel to demonstrate the benefits of closer EU ties.
However, the row over tuition fees could derail the plans.
“It is true that talks have stalled and that this is now the main issue on which both sides cannot agree,” an insider told The Guardian.
British officials say they were caught off guard by the demand for tuition fees, which they insist was not included in the framework agreement signed last year between the Labour leader and European Commission President Ursula von der Leyen.
Sir Keir Starmer’s Brexit reset could be sunk after the European Union issued an ultimatum over university tuition fees
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GETTYEU negotiators argue European students should pay domestic fees of roughly £9,500 annually rather than international rates, which can exceed £60,000 at some institutions.
Since the UK’s departure from the bloc in 2020, the proportion of European students at UK universities has plummeted from 27 per cent to just 5 per cent, according to sources in the bloc.
Brussels contend the European middle-class has effectively been priced out of British higher education.
The European Commission wants reduced fees to apply to all EU students, not merely those participating in any capped youth mobility arrangement.
Brussels has insisted EU students receive reduced fees as part of any deal allowing young people to live and work across borders
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Some central and eastern European member states have argued it would be inequitable for only a limited number of their students to benefit from discounted rates.
Despite previously dismissing fee reductions outright, Downing Street is now examining potential compromise arrangements.
A British government spokesman stated: “Any final scheme must be time-limited, capped and will be based on our existing youth mobility schemes, which do not include access to home tuition fee status.”
One British source was more blunt, describing any reduction in tuition fees as a “non-starter”.
‘It is true that talks have stalled and that this is now the main issue on which both sides cannot agree,’ an insider said
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However, the Treasury and the Department for Education are said to be conducting financial analyses of the cost of accepting such a proposal.
Officials have suggested that Britain would consider lowering fees for EU students only as part of a “very big offer” from Brussels.
“It would be expensive, and it was a red line from the summit last year. If we were to move on it, we would need something very big in return,” one told The Financial Times.
Brussels has signalled flexibility, indicating this is not a “binary” matter and that a reduction short of full equalisation with domestic fees could be acceptable.
A possible middle ground would see European students charged somewhere between the domestic cap of £9,535 and the international rate of £38,000.