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Sunak tries to pacify Brexiters but keeps door open to closer EU ties Sunak tries to pacify Brexiters but keeps door open to closer EU ties
(about 7 hours later)
Prime minister stresses ‘enormous benefits and opportunities’ of Brexit before business leadersPrime minister stresses ‘enormous benefits and opportunities’ of Brexit before business leaders
Rishi Sunak has kept open the door to closer ties with the European Union but tried to pacify angry Brexiters in his own party by laying down a red line that the UK must remain free to set its own standards and regulation. Rishi Sunak has laid down a red line for any new attempts to improve post-Brexit trade with the EU and managed to quell a rebellion among furious Tories – but kept open the possibility of closer ties with Brussels.
The UK prime minister tried to dampen down speculation that senior government figures were considering a “Swiss-style” deal with Brussels, which would require alignment, at least temporarily, on food and agriculture standards. The prime minister dismissed suggestions the UK could pursue a Swiss-style relationship with the bloc, while a senior business leader called the row a “sideshow” and No 10 sources pointed the finger of blame at the chancellor, Jeremy Hunt.
Reports of such a move riled senior members of the European Research Group of Conservative Brexiters and the health secretary, Steve Barclay, leading to an official denial being issued by Downing Street on Sunday afternoon. Addressing the clamour for the first time, Sunak stressed his pro-Brexit credentials as someone who supported leave in the 2016 referendum, and talked up the need to unleash the “enormous benefits and opportunities” of being outside the EU.
Addressing the clamour for the first time, Sunak sought to stress his credentials as someone who campaigned for leave in the 2016 referendum, and talked up the need to unleash the “enormous benefits and opportunities” of Brexit. “Under my leadership, the UK will not assume any relationship with Europe that relies on alignment with EU law,” he pledged at a speech to the Confederation of British Industry (CBI) in Birmingham on Monday.
He told business leaders at the annual Confederation of British Industry conference in Birmingham: “Under my leadership, the United Kingdom will not assume any relationship with Europe that relies on alignment with EU law … Sunak said that having “regulatory freedom” to diverge on EU standards was a key advantage and insisted it would not be sacrificed in any future talks to try to break down trade barriers with Brussels.
“We need regulatory regimes that are fit for the future, that ensure that this country can be leaders in those industries that are going to create the jobs and the growth of that future. And having the regulatory freedom to do that is an important opportunity of Brexit.” He did not dispute suggestions made previously by Hunt that the UK should “remove the vast majority of the trade barriers that exist between us and the EU” while remaining outside the single market.
Sunak did still leave open the possibility of trying to reduce trade barriers with the EU, a major problem for businesses who face increased and costly bureaucracy as well as a shortage of workers after the end of freedom of movement. He did not deny the UK was seeking a closer relationship with Brussels to solve those issues. No 10 later said the pair were “absolutely” in agreement on Brexit policy, and confirmed that ending freedom of movement and “unnecessary payments” to the EU, as well as retaining the UK’s ability to strike trade deals, were also red lines.
Though he would not be drawn on whether the government would be prepared to grant more visas for skilled workers to fix labour shortages, Sunak said he wanted to stem the number of people being smuggled across the Channel. In a sign of Sunak’s success in quelling the rebellion that had mounted over the weekend, the UK’s former Brexit negotiator, David Frost, said it was a “welcome and reassuring” response.
He suggested it was vital to “rebuild public consent” before turning to the problems with “legal migration”, and he promised to reduce the number of people arriving on small boats, but did not say by how much or by when. But an ERG member warned “there can be no backsliding” and a senior Foreign Office source said the government was “not interested in Swiss style, dynamic alignment, Chequers II or any other arrangement that doesn’t respect parliamentary sovereignty in fact and law”.
“If we’re doing that then I do believe that we can … win the global race for talent. And I’m unapologetic about wanting to deliver an immigration system which is highly competitive, for the best and the brightest. And that’s what we’ll deliver.” Downing Street insiders pointed the finger at the chancellor for setting hares running. One said: “Everyone is blaming Hunt for speaking to the Sunday Times. But we can’t really do anything about it, other than keep a close eye on him.”
Earlier, the CBI boss, Tony Danker, urged Sunak to solve the deadlock over the Northern Ireland protocol and resist retaining “anti-growth” barriers. Andy Street, the Tory West Midlands mayor, said his region had one of the highest incomes from exports. “Although we are doing what was said – growing our exports to non-EU countries – there is no question that we need the easiest way possible of exporting to what was clearly our biggest market,” he told the Guardian.
Trade experts said there were only limited improvements to the flow of goods and services between the UK and EU possible given Sunak’s statement.
Prof Anand Menon, of the UK in a Changing Europe thinktank, said: “We’re edging towards an explicit realisiation that this is harming the economy, but there’s nothing we can do to address that without appearing to betray ‘take back control’.”
Switzerland’s relationship with the EU is complicated and the result of many overlapping sectoral deals, so Brussels “wouldn’t want to go around emulating it”, Menon said.
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Danker said: “People are arguing against immigration, but it’s the only thing that’s increased our growth potential since March.” He added: “Let’s be honest, we don’t have the people we need, nor do we have the productivity.” He added that while a breakthrough on the Northern Ireland protocol would be significant, any tweaks to the UK’s existing trade deal with Brussels would “make very little difference in terms of macroeconomics”.
Lord Price, a former Tory trade minister who served immediately before and after the 2016 referendum, said that around that time he went to Switzerland “to try and understand how the Swiss over 30 years had built a relationship with the EU where they were in the single market but they still had sovereignty over their own law-making”. Jill Rutter, a senior fellow at the Institute for Government, said the UK could try to get the EU streamline customs processes or deal with the “asymmetry” of border controls but warned Brussels would push back against any perceived “cherrypicking”.
He told BBC Radio 4: “I’ve always felt that if we weren’t going to rejoin the EU or become a member of the EEA, which means that we would have to adopt again all EU legislation, the Swiss model was the right way for us to go forward.” Sunak was urged by the head of the CBI to focus instead on resolving the row over the Northern Ireland protocol.
Price said Switzerland had 120 bilateral agreements with the EU, built over 30 years, but he added: “To get to that you’ve got to start with a good relationship with the EU. We’ve got to stop being a noisy neighbour and we’ve got to start being a cooperative neighbour.” “I think the Swiss thing is a complete sideshow,” its director general, Tony Dankin, said. “It took them 40 years for Switzerland to have this relationship. We haven’t implemented Boris’s Brexit.”
Asked what he made of the progress so far, Dankin said: “I don’t think we’re getting anywhere on much. We need to resolve Northern Ireland.
“I think that the Europeans, from my conversations, those I speak to say once there’s intent to resolve the Northern Ireland protocol and there’s good will from both sides on that, then everything else comes into play.”
Despite Dankin’s call for Sunak to be “pragmatic” about the help a boost of foreign workers could provide, the prime minister said he wanted to focus first on rebuilding public trust in the immigration system given the number of people being smuggled across the Channel.