As Andrew Neil was pronouncing the last rites on Brexit in The Daily Mail at the end of last week, journalists at The Sunday Times were putting the finishing touches to an explosive story that seem to confirm Neil’s analysis. What are described as “senior government figures” were apparently plotting to put Britain on the path towards a “Swiss-style relationship with the EU”.
The story quoted one unnamed government figure:
“It’s obviously something the EU would never offer us upfront because they would say you are trying to have your cake and eat it but the reason I think we will get it is because it is overwhelmingly in the businesses interests on both sides.”
Several pro-Brexit accounts on Twitter suffered an immediate meltdown. The extreme right-wing think tank The Bruge Group accused the government of betrayal while Simon Clarke, Tory MP for Middlesbrough South and a Truss supporter, said in a now-deleted tweet that Brexit had been “settled definitively” in 2019 and he hoped the reports were not true.
The government quickly denied the story although one of the journalists, Caroline Wheeler, tweeted: “The Sunday Times does not publish important stories like this unless they are impeccably sourced. As you know, the government response is often influenced by a need to manage the warring tribes of the Conservative Party.”
Someone had apparently been flying a kite.
Hunt wants ‘unfettered trade’ with the EU
These anonymous sources were saying privately that pursuing unfettered trade with the EU, which Jeremy Hunt had suggested was his aim during a Friday morning interview with the BBC, requires moving towards a Swiss-style relationship over the next decade. They insisted however, it would not extend to a return to freedom of movement.
Hunt had told the BBC: “I think having unfettered trade with our neighbours and countries all over the world is very beneficial to growth. I have great confidence that over the years ahead we will find, outside the Single Market, we are able to remove the vast majority of the trade barriers that exist between us and the EU.”
What the chancellor didn’t explain was how he would do it.
What is a ‘Swiss-style’ deal?
Remainers were jubilant at the news, but would do well to read a summary of the troubled relationship between the EU and Switzerland by the think tank UK in a Changing Europe published in June last year. As someone succinctly put it – “even the Swiss couldn’t get a Swiss-style deal today”.
These bilateral agreements have been drawn up over decades in a piecemeal fashion and the EU has been trying to persuade Switzerland to renegotiate a single ‘over-arching’ Institutional Framework Agreement (IFA). Switzerland already follows much of EU law, is a party to the Schengen agreement and pays into the EU budget.
The IFA would have meant Switzerland accepting jurisdiction of the European Court of Justice (ECJ) on all matters related to the interpretation of EU law and signing up to a level playing field as well as common provisions on dispute settlement. The Swiss have so far refused.
Talks were abandoned in May 2021, although some progress has been made recently and an agreement reached to embark on another series of bilateral treaties. It looks like an interim solution might be found but with big differences remaining unresolved, particularly on the over-arching framework.
Do we really need a separate deal anyway?
As well as sparking a mix of hope and horror between the pro and anti-Brexit sides, there was also some disagreement among the experts about what The Sunday Times report meant. Most are of the opinion that a ‘Swiss-style deal’ was perhaps clumsy shorthand for a closer relationship. Others suggest the existing trade and cooperation agreement already contains provisions which would allow improved access to the single market if the UK relaxed its own red lines.
Sunak rejects closer alignment unequivocally
The prime minister yesterday delivered a speech to the CBI annual conference in Birmingham which failed to show any new ideas for economic growth. During questions, he told assembled business leaders: “On trade, let me be unequivocal about this: under my leadership, the United Kingdom will not pursue any relationship with Europe that relies on alignment with EU laws.”
It seems an unambiguous ruling out of a Swiss-style deal.
CBI director-general Tony Danker, in his own speech, called for more fixed-term visas for overseas workers in shortage occupations and urged leaders, presumably including Sunak, to “be honest with people” over the country’s “vast” labour shortages, adding “we don’t have the people we need nor do we have the productivity”.
He also called for trading regulations to be reformed, saying politicians could no longer blame EU rules, telling his audience: “The biggest regulatory barriers facing businesses today are based on British laws, created by a British Parliament, and administered by British regulators.” The ball was put squarely into Sunak’s court.
Government still in denial about Brexit
The truth is that a Swiss-style deal is not available and the government is not planning to ask for one anyway. And even if it was, it would be unacceptable to Tory MPs in the ERG and party members more widely.
What Hunt and Sunak really want is a deal with all the advantages that Switzerland enjoys, without aligning our laws or paying large sums to Brussels. In short, the deal that David Davis, Michael Gove, Boris Johnson and others thought the UK would be offered in 2016 because it was “overwhelmingly in the businesses interests on both sides”. We all remember those German car makers.
They want what they have always wanted: frictionless access to the single market with none of the obligations.
The blogger and creator of “This Week in Brexitland”, Nick Tyrone, captured it perfectly:
“Rishi Sunak is open to reducing trade barriers with Europe and having a closer relationship with the EU, just so long as it doesn’t involve reducing trade barriers with Europe and having a closer relationship with the EU.”
The Conservative Party is back in a 2017 cloud cuckoo land, still trapped in a never-ending loop somewhere between reality and fantasy unable to make Brexit work or admit that it has all been a terrible mistake.