Yes, the UK-EU relationship is going to change – but not in the way you might think

As the row over reports of a Swiss-style agreement with the EU shows, Tory Eurosceptics would bring Sunak down to prevent closer links if they had to

First the good news: the UK-EU relationship is going to change and become closer, but not in the way you might think. And now the bad: Rishi Sunak and Jeremy Hunt won’t have the political space or time to improve Boris Johnson’s threadbare trade deal, even though they know that reducing barriers would create some much-needed growth.

What Liz Truss called “the anti-growth coalition” is much closer to home than the Conservatives admit; it’s alive and kicking on their own backbenches. There is growing pressure from business to reduce the self-harming trade friction with the EU, and a growing public recognition that Brexit isn’t working. According to YouGov, 56 per cent of people (including one in five 2016 Leavers) think the UK was wrong to leave the EU, while only 32 per cent disagree.

Yet, as the row over reports of a Swiss-style agreement with the EU shows, Tory Eurosceptics would bring Sunak down to prevent closer links if they had to. When the Swiss idea surfaced, Tory WhatsApp groups lit up with predictable cries of “betrayal”. These rebels, unable to muster enough troops to defeat last week’s £20bn of tax rises, have returned to their old cause.

They blamed the speculation on Hunt, a 2016 Remainer who briefly advocated a second referendum on the withdrawal agreement after the vote to leave. Although Sunak backed Leave, he has little credit in the bank with hardline Brexiteers, who regard Boris Johnson and Truss (a 2016 Remainer) as truer believers than the prime minister.

Sunak knows the threat to depose him is not an empty one; the hardliners ousted Theresa May, and Eurosceptics were quick to liken a Swiss-type arrangement to her ill-fated Chequers deal. That’s why Sunak told the CBI conference his government would “not pursue any relationship with Europe that relies on alignment with EU laws”.

Some Brexiteers suspect the Swiss option was put up so it could be knocked down, in the hope the government’s forthcoming concessions to the EU on the Northern Ireland protocol would not look so bad in comparison. In any case, EU sources tell me they are not in the market for a Swiss-type agreement, as it’s a messy patchwork of 120 bilateral deals. In Brussels, officials welcome the warmer mood music from the Sunak government and think it’s for real. But they won’t be convinced unless the PM reaches a deal on the protocol, a necessary pre-condition for improved relations.

With a general election two years away, Sunak wants to prioritise the economy, the small boats crisis and the NHS rather than restart a civil war on Europe. So for closer links with the EU, we will probably have to wait for the Labour government the party’s 20-point lead in the opinion polls points to.

Keir Starmer has promised to “make Brexit work” but is under pressure from some pro-EU colleagues to give a stronger lead on the issue. They argue he has the space after neutralising Tory attacks on Labour weaknesses such as immigration, tax, economic competence and patriotism.

But an increasingly confident Starmer is in no mood to hand Tories any pre-election ammunition. If the first rule of politics is to do the opposite of what your opponents want, the Labour leader will stick to it: why risk Tory claims that Labour wants to reverse Brexit, and throw Sunak a lifeline in the red wall?

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It’s not true, of course, but that wouldn’t stop the Tories and their newspaper cheerleaders screaming it. In fact, Starmer would seek a “bespoke deal” covering areas including foreign affairs and defence; a veterinary agreement; the Horizon science programme; mutual recognition of professional qualifications and visas for people in the creative industries such as touring musicians. In other words, the sensible things the Tories should be doing now.

After winning power, Labour would probably go further. One shadow minister told me: “We would take decisions on a daily basis with a view to improving EU relations to benefit business and people, and after five years we would see where public opinion is.” More years of sluggish UK growth and declining trade with our neighbours would bolster the case of Labour pro-Europeans, who hope that rejoining the single market, but not the EU, might be on Labour’s agenda after a five-year term.

In practice, it would be a hard slog. There will be a chance to reconfigure the EU relationship when Johnson’s trade deal comes up for review in 2025. A significant change would require a lot of negotiations and a recognition in Brussels as well as London it would be worth it. Although it would take time, I suspect a Starmer government would get there eventually, securing a closer relationship for hard economic rather than starry-eyed political reasons. Ironically, after the Tories’ failure, it will fall to alleged members of the anti-growth coalition to deliver the growth the country desperately needs.