Sunak desperately needs a growth narrative, now that he has doled out unremitting gloom in the tax rises and spending cuts needed to stabilise the public finances. He and Jeremy Hunt seem to realise that this can’t happen without a better Brexit deal than Boris Johnson’s, which made a fetish of divergence from the EU single market and has led to a large and escalating loss of trade and national income. This explains the briefing last weekend of their support for a “Swiss style deal”, which would keep Britain’s regulatory system close to the EU’s in return for greater access to the single market and fewer administrative obstacles.
They may also have thought that the prospect of such a deal might make it easier to manage the immediate crisis on the Northern Ireland Protocol, whose whole raison d’être was the need to reconcile a hard Brexit with free movement of goods and services across the north/south border within Ireland.
Even in conception, this Swiss cheese is full of holes. The protocol crisis needs to be resolved immediately, long before any comprehensive “new deal” with the EU is possible. The Swiss-EU “deal” is bespoke and fearsomely complex, having evolved over five decades as an unsatisfactory (to both sides) alternative to EU membership. Britain will not be able to replicate it, as the EU is currently seeking to curb the benefits even for Switzerland. Anyway, the deal requires Switzerland to join the freedom of movement provisions of the single market, which is the precise red line that Sunak, Hunt and Tory “moderates” have vowed not to cross.
Let’s leave aside the specific provisions of a “Swiss deal”. Within hours of a kite being flown in the Sunday Times, the reaction from hardline Brexiters and the ERG faction was so ferocious that the very idea of any Swiss cheese was rapidly swept from the table. Sunak told the CBI conference on Monday that he wouldn’t agree to anything which involved requirements for further “alignment” with the single market, or any return to freedom of movement.
Whether he took fright at the ERG reaction, or thinks he is playing a longer game, Sunak’s political strategy is as full of holes as the policy content if he wants to revisit Boris’s disastrous Brexit deal. For he only has 18 months or so until an election, and the loss of EU trade is worsening by the month, so there isn’t a long game available. And the only possible way of getting a pre-election “new deal” of any kind with the EU would be to provoke—and win—an immediate argument with the ERG right of the Tory party over reforming the wider terms of Brexit and resolving the Northern Ireland Protocol. And this he has now ruled out.
For a brief moment, before the CBI retreat, it looked just possible that Sunak might be taking on the ERG, who can’t conceivably get rid of him to install yet another leader after the events of this summer and autumn. After all, this is what he did on tax, telling the ERG that massive tax cuts financed by borrowing was a “fairytale”. He and Hunt moved far more boldly than most observers thought they would on tax increases, after the Truss and Kwarteng fiasco. Maybe he would do the same on Brexit.
But no. The problem, I suspect, is that whereas Sunak always believed in “sound money”, and so engaged in the tax argument from conviction, he also started out as a Brexiter, and still won’t accept, even to himself, that Brexit without significant alignment with the EU single market is flawed as an economic project.
For Brexit itself is the largest of all Swiss cheeses, full of holes. And until these are acknowledged, there is little prospect of mustering the political will to reverse even its worst failings.
This article is from Andrew Adonis’s weekly newsletter for Prospect—The Insider. Get The Insider straight to your inbox every week by signing up here
