Britain mulls Swiss-style ties with Brussels

Senior government figures are planning to put Britain on the path towards a Swiss-style relationship with the European Union.

The move, intended to forge closer economic ties, is likely to infuriate hardline Conservative Brexiteers.

Caroline Wheeler, Harry Yorke, Tim Shipman

Jeremy Hunt, the chancellor, last week signalled that Rishi Sunak’s administration intends to break from the approach adopted by Boris Johnson and remove the vast majority of trade barriers with the bloc.

In private, senior government sources have suggested that pursuing frictionless trade requires moving towards a Swiss-style relationship over the next decade. However, they insist this would not extend to a return to freedom of movement.

“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,” one said.

Switzerland has access to the European single market through a series of bilateral agreements.

However, the model also involves more liberal EU migration, and payments to the EU budget, with the bloc in recent years also pushing for the European Court of Justice to have greater oversight in the relationship. The Swiss have frequently debated restricting free movement from the bloc, but in the most recent referendum opted to keep it.

These are all red lines for members of the rebellious European Research Group.

It was also an approach that Johnson and Lord Frost, his chief Brexit negotiator, ruled out when they drew up the UK’s negotiating mandate in 2020.

Ministers are confident that the EU’s approach to relations with the UK is thawing as the continent faces the challenges caused by soaring inflation and the conflict in Ukraine.

“I think we will be doing everything we can proactively within our power to make changes to improve things when it comes to the EU,” one source said.

“The bigger picture on this is the EU seeing something which they weren’t expecting, which is massive support for European security from the UK with respect to Ukraine and they can see we are serious about being sensible grownups with the biggest military in Europe doing our bit.

“I think there is a very good way through this with more trust that we were ever going to have with either Boris Johnson or Liz Truss.”

The Tory Brexiteers are fiercely opposed to any move that risks returning the UK closer to the EU’s regulatory orbit.

Last night Frost said: “Any approach requiring the UK to align with EU rules to get trade benefits, whether as part of a Swiss-style approach or any other, would be quite unacceptable. Boris Johnson and I fought very hard to avoid any such requirements in 2020 and ensure the UK could set its own laws, and we should not contemplate giving this away in future.”

Speaking on Radio 4’s Today programme earlier this week, Hunt rejected the prospect of rejoining the single market but backed working to strengthen Britain’s relationship with Brussels.

He said: “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.”

One rebel said they feared “unfettered trade” sounded eerily similar to the ill-fated Chequers deal drawn up by Theresa May in 2018.

The Labour Party, while ruling out rejoining the single market and customs union, have stated there are elements of Johnson’s Brexit deal that can be “fixed.” This includes a veterinary agreement with Brussels – helping to smooth issues with the Northern Ireland Protocol – and a deal which would see both sides recognise one another’s professional qualifications.

There are also mounting concerns in the ERG that the government is preparing to give ground to Brussels to resolve the disagreement over the Northern Ireland protocol.

Insiders have said a deal could see the EU drop most of its checks on goods passing between Great Britain and Northern Ireland if the UK takes a less ideological position on the role of the European Court of Justice in Northern Ireland.

But doing so would lead the group to try to “bring down the government”, warned one senior member.

The Brexiteers Chris Heaton-Harris and Steve Baker are ministers in the Northern Ireland Office and are working on a deal with Brussels.

But it is understood that warnings have been sent to Downing Street that it is the EU, not the UK, which must give ground on the ECJ. Similar warnings have been passed to the German embassy.

“Just because people like Mark Francois have not been going on about the ECJ does not mean that they have changed their view,” said an informed source. “They would rather bring down the government than accept the supremacy of a foreign court over any territory of the UK.”

A Downing Street source said Sunak was “taking the fight” to the EU but was also hopeful that a more constructive approach on both sides could bear fruit.

“Rishi wants to get this sorted as quickly as possible; there’s definitely a deal to be done,” a No 10 source said. “It’s our team’s sense that there is much more of a landing zone, in terms of what we would be happy with, than there has ever been.”

But they added: “He’s taking the fight to them. He’s not going to be giving up stuff that he and the party would not be happy with him giving up.”