Britain Won’t Pursue Any Trade Deal That Relies on Alignment with EU Laws: Sunak

“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,” Sunak said, responding to a question by a reporter about Britain’s trade and migration relationship with Europe, Reuters reported.

Sunak is under pressure to ease economic tensions with the European Union and let more skilled workers into Britain to address the country’s economic problems. 

Tony Danker, director-general of the Confederation of British Industry (CBI), earlier urged Sunak to settle a dispute with the EU over trade between Britain and Northern Ireland to unlock more opportunities for trade and to ease immigration restrictions which are adding to the cost-of-living crisis.

“We have an immigration system that is far too nervous about bringing in the skills we need,” Danker said in an interview with Bloomberg.

He argued that the shortage of workers is adding to the “stagflation” pressures in Britain’s economy. 

No. 10 denied a report in The Sunday Times that Britain is considering pushing for a Swiss-style relationship with the EU, an idea that had angered Brexit hardliners. 

Former Cabinet minister Simon Clarke said on Twitter that he hoped that was not under consideration, and former UK Independence Party leader Nigel Farage said “this level of betrayal will never be forgiven”.

Danker said that the government should avoid opening up the broader debate over Brexit and focus on potential benefits from the existing deal, such as partnerships in science and mutual recognition of professional qualifications. Those initiatives are being held up by the dispute over Northern Ireland.

“Forget about the Swiss deal,” Danker said. “We just want the Boris Johnson Brexit deal to be implemented and that is not happening right now because of the Northern Ireland Protocol.”

Switzerland is a member of the European Free Trade Association, which, thanks to about 120 bilateral accords, participates in the single market for most goods.

But it also has to accept free movement of labor, EU market regulations and makes annual payments to the bloc’s budget – all of which are red lines to hardline Brexiteers on the right of Sunak’s Conservative Party.

The pushback shows the bind Sunak is in as he and Jeremy Hunt seek to boost Britain’s economy, which the Chancellor of the Exchequer said last week is already in a recession that is predicted to last through 2023.

Hunt last Thursday unveiled a £55 billion (S$90 billion) package of tax rises and spending cuts as he sought to restore the confidence of markets in the economy two months after former prime minister Liz Truss’ disastrous plan for £45 billion of unfunded tax cuts.

The government’s fiscal watchdog, the Office for Budget Responsibility, estimates Brexit will lower Britain’s trade intensity by 15 percent over the longer term.

This is despite the promises of those who campaigned for the divorce that it would allow the country to become a more agile trading nation.

Instead, British businesses trading with Europe have faced extra red tape.

Meanwhile Britain is still in a stand-off with the bloc over trading arrangements between Northern Ireland – which still follows EU rules – and Britain. While a Swiss-style deal would ease those tensions, the British government issued a statement on Sunday calling the Times report “categorically untrue”.

“This government is focused on using our Brexit freedoms to create opportunities that drive growth and strengthen our economy,” according to the statement. 

Health and Social Care Secretary Steve Barclay, a former Brexit secretary, told BBC TV on Sunday that a Swiss-style deal is not on the cards “and I certainly don’t recognize that story”.

Nevertheless, there are signs Sunak’s administration is trying to repair the fractious relationship with the EU that prevailed under Johnson, who negotiated the Brexit deal, and his short-lived successor Truss, who promoted legislation to unilaterally break with the so-called Northern Ireland Protocol governing the region’s trade. 

The European Commission told members last week that relations with London have improved under Sunak, though that has not yet translated into concrete changes in British positions on Northern Ireland.

“Having unfettered trade with our neighbors and countries all over the world is very beneficial to growth,” Hunt told BBC Radio last Friday, adding that in the years ahead, Britain will be “able to remove the vast majority of the trade barriers that exist between us and the EU” while remaining outside the single market.