Prime minister Rishi Sunak has ruled out any Swiss-style deal to remove trade barriers with the EU, as Eurosceptic Tory MPs claimed that chancellor Jeremy Hunt was trying to soften Boris Johnson’s Brexit deal.
Sunak insisted at the CBI conference in Birmingham that Johnson’s “bare bones” Brexit deal — the Trade and Cooperation Agreement — could “deliver enormous benefits for the country”.
But some Conservative MPs believe that Hunt, who backed Remain in the 2016 Brexit referendum and wants to remove the “vast majority” of trade barriers between the UK and EU, is pushing for a softer form of Brexit.
Downing Street said on Monday that Sunak would not countenance a “Swiss-style deal” with the EU, excluding any alignment with EU rules and rejecting free movement of people, the jurisdiction of the European Court of Justice and any “unnecessary payments” to Brussels.
The TCA removes quotas and tariffs from most trade but leaves in place major regulatory hurdles, because of Britain’s exclusion from the single market. The independent Office for Budget Responsibility said last week that Brexit had caused a “significant adverse effect on trade”.
Hunt told the BBC last week that “unfettered trade” with neighbours was “very beneficial to growth”, but declined to say how the government might tear down such barriers when it is outside the single market.
“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,” he said.
Downing Street refused to echo Hunt’s call for the “vast majority” of barriers to UK/EU trade to be removed, acknowledging that the EU had made it clear that Britain would pay a price for the “hard” Brexit negotiated by Johnson.
Downing Street rejected a Sunday Times report that the UK was considering a Swiss-style trade relationship with the EU, saying instead that regulatory freedom was a significant opportunity of Brexit.
Sunak said: “Let me be unequivocal. Under my leadership, the UK will not pursue any relationship with Europe that relies on alignment with EU rules. I voted for Brexit. I believe in Brexit. Brexit can deliver enormous benefits and opportunities for the country.”
Pro-Brexit MPs were partially reassured by Downing Street’s insistence that it would not pursue a Swiss-style deal, but many suspect that Hunt will try to push government policy towards a softer Brexit.
One former cabinet minister said: “Rishi was a Leave supporter, which gives him a lot of credibility. But there is less confidence about Jeremy’s Brexit credentials. His instincts are seemingly always towards a closer alignment with the EU.”
David Davis, former Brexit secretary, said: “The general direction of travel will be towards a relaxation of relations between the UK and EU which is long overdue given recent tensions. But the UK will never be in a Swiss-style agreement with the EU.”
A senior Tory backbencher said: “There is concern among Brexiteers that the establishment has now taken back control. I and many others have never regarded Rishi as a true Brexiteer. The fact that our chancellor is a Remainer is also a cause for concern.”
Another leading member of the Eurosceptic European Research Group said: “The chancellor and Sunak clearly have differing views of the EU and Brexit but it looks like the PM is asserting himself on the issue.”
Allies of Hunt say the chancellor is committed to exploiting opportunities afforded by Johnson’s Brexit deal — not seeking a new model — while both Treasury and Number 10 denied any difference of approach on the issue.