Rishi Sunak’s real Brexit problem

Are we headed for a return to Brexit wars? It's been the them of the week so far after the Sunday Times splashed on a report that senior government figures plan to put Britain on the path towards a Swiss-style relationship with the European Union. A backlash quickly ensued with Tory MPs privately sounded alarm while former leader of the Brexit Party Nigel Farage has threatened a political comeback if it proved true. Little wonder then that since the weekend, there has been a concerted effort in No. 10 to pour cold water on the reports. Sunak's PPS Craig Williams has been busy trying to assure MPs that the story does not reflect the government's intentions. On Monday, Rishi Sunak publicly ruled out such an arrangement: '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.'

So, what exactly is going on? It's not gone unnoticed in the parliamentary party that Jeremy Hunt's return to No. 11 means that the Chancellor – unlike his past three predecessors – backed Remain in the EU referendum. It means that despite the fact Sunak is a Brexiteer, members of the European Research Group are more twitchy when it comes to any claims of a softening of Brexit. However, what's clear from the response so far is that Sunak himself has all but ruled it, the EU would be disinclined to offer such a thing and even if the first two factors changed, Sunak wouldn't have the political space to do it when it comes to his own parliamentary party.

Does this amount to a storm in a tea cup? The very fact the story is being so widely discussed is bad news for No. 10. Ultimately, Sunak's approach to the EU could see some compromises on issues parts of the party won't like. That could be an agreement on the Northern Ireland protocol where Sunak as Chancellor warned against any action that could spark a trade war and thereby worsen the cost of living crisis or increasing the number of highly skilled migrants eligible for visas.

Sunak is also less likely than his two most recent predecessors Boris Johnson and Liz Truss to spark a war of words with Brussels given he prefers the diplomatic approach. While MPs are well aware that Sunak did back Brexit, his government is already seen to be far more establishment than what came before. Downing Street has already suggested that his leadership pledge to scrap unwanted EU laws within his first 100 days has been put on ice. Sunak's problem is the more suspicion there is over his government's real agenda, the more each move will be examined and scrutinised. As one minister puts it: 'We need to do a much better job of promoting the benefits of Brexit.'