ECONOMY

Brexit is far from being ‘done’

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Good morning from Edinburgh. The prime minister has made a firm statement ruling out any “Swiss-style” deal with the EU as long as he remains in office. That shouldn’t surprise us: if he failed to do so, he wouldn’t be able to stay in office. More on that below.


Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb and please send gossip, thoughts and feedback to [email protected].


Not a done deal

Yesterday at the CBI conference, Rishi Sunak rebutted claims from some Conservative MPs that chancellor Jeremy Hunt — who had voted Remain in 2016 — was trying to soften Boris Johnson’s Brexit deal:

“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.”

In many ways, none of this is that deep. Sunak has long been a supporter of the UK’s exit from the EU and long believed that the ability to diverge from the EU’s rules are the biggest Brexit dividend. He also leads a party where, increasingly, hostility to any form of rules harmonisation is a precondition to leadership.

The European Research Group of hardline pro-Brexit Tory MPs is not the well-organised force it once was; Steve Baker has a junior ministerial role now, while Suella Braverman is in the Home Office, and the ERG was privately split over who to back in both leadership contests this year. But if the prime minister were to sound equivocal over Brexit, and fan the flames of rows within his party, the ERG would surely straighten up.

In many ways, Sunak’s words can best be understood as follows:

I am a Conservative prime minister in the year 2022, and I wish to remain so.

One problem for Sunak is that while he is not a Remainer, most of his supporters’ club in the party and the Conservative press are. A good bet is that, for however long his leadership lasts, there will be intermittent stories about one Sunak ally or another wanting a closer relationship with the EU on certain issues. (Peter Foster has written a good explainer about what exactly could be done to improve the EU-UK deal here.)

But I’m particularly struck by this quote to the FT from David Davis, former Brexit secretary and pro-Leave grandee:

“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.”

Never? I mean, I can think of any number of perfectly plausible ways the UK might end up in a “Swiss-style” agreement with the EU. Of course, “Swiss-style”’ could mean a few different things: an arrangement that literally duplicates the complicated thicket of agreements between the EU and Switzerland (sure, that’s not going to happen). If we mean “a return to the single market”, that is off the table for now, for reasons on both sides.

Sunak drew a clear boundary yesterday, excluding any alignment with EU rules. But if Labour wins the next election, then there will be a “Swiss-style” arrangement for phytosanitary rules, where the UK would follow some European food standards to reduce friction on agricultural exports. If Labour loses, then the Labour party is not going to get less pro-European under any of Sir Keir Starmer’s plausible replacements as leader than it is now.

That will be very difficult for whoever succeeds Sunak as Conservative party leader, as well as the leader of the opposition. Some of the party’s power brokers will want to accept that deal, but a majority of the party’s MPs and activists will want to reject it. One thing we can say for certain is that David Cameron’s aim of getting the party to “stop banging on about Europe” is further away than ever.

Shameless self promotion

My column this week is on what Rishi Sunak can learn from John Major — and the film director Akira Kurowasa.

Now try this

I went to see Eiko Ishibashi, a producer and singer-songwriter whose compositions include the score to the wonderful film Drive My Car, at the London Jazz Festival. It was a magical hour and I can’t recommend her music highly enough.

Top stories today

  • UK public borrowing | UK public sector borrowing rose by less than expected last month, despite the government’s measures to shield households and businesses from soaring energy prices.

  • ‘Red’ warning over purge | The UK’s flagship “Brexit freedoms” bill, intended to purge swaths of EU law from the British statute book, has been slammed by the government’s own experts. They warned that an impact assessment signed off by ministers was “not fit for purpose” and has not sufficiently considered the effects of the bill on small businesses.

  • Britain’s reliance on migrant workers | Sir Keir Starmer will today warn businesses that the days of “low pay and cheap labour” from overseas must end, as both main UK parties reject calls by companies for looser immigration rules.

  • Bringing home the bacon | One of Europe’s leading meat companies is to build a £100mn production facility in the UK as the country’s appetite for bacon surges. It comes in spite of the UK economy shrinking and “crazy” post-Brexit red tape, according to its chief executive.

  • Falling grades | Hundreds of schools in England have been downgraded by Ofsted after being reinspected for the first time in years, Sky News reports. Amanda Spielman, Ofsted’s chief, said it showed “removing a school from scrutiny does not make it better”.

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