(Bloomberg) — Rishi Sunak faces another delicate Brexit decision after he was asked by senior civil servants to delay a planned “bonfire” of legislation dating from the UK’s membership of the European Union.
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The request by officials to shift the current 2023 deadline to remove some 4,000 EU laws from the British statute books by three years is a headache for the prime minister, who said over the summer the legislation could be repealed or reviewed within 100 days.
If the premier gives in to the demands of his officials — who say the task simply can’t be done at such short order — he risks alienating the Brexiteers in the ruling Conservatives like Jacob Rees-Mogg, for whom shredding the legislation is a demand that’s attained totemic status.
For the prime minister, a Brexiteer who has an uneasy relationship with his party’s Leave-voting right-wing, it risks throwing more weight behind the argument most Tories don’t want to concede: that discernible benefits of Brexit seem hard to find.
Data this week show immigration reaching a record in the first year of Britain’s post-Brexit regime, despite the referendum promises that the EU divorce would allow Britain to regain control of its borders and get numbers down. The US trade deal once touted by former Prime Minister Boris Johnson as a great prize of Brexit is nowhere in sight, and Sunak last week didn’t even bother to bring it up in a meeting with President Joe Biden at the G-20 summit in Indonesia.
More Like Switzerland?
And Britain remains at odds with the EU over the implementation of the deal Johnson negotiated because of the extra burdens it imposes on trade between Northern Ireland and the rest of the UK.
With Brexit resulting in an increase in red tape for businesses that trade with the bloc, the Sunday Times reported that the government was seeking closer trading ties with the EU similar to the bloc’s relationship with Switzerland.
Both Sunak and Chancellor of the Exchequer Jeremy Hunt were forced to deny that, despite multiple senior government officials confirming to Bloomberg that Hunt had privately spoken along those lines.
There is little prospect of the UK government renegotiating Johnson’s Brexit deal before the next election due in two years, as it remains such a politically toxic issue. Rejoining the EU is off the cards for the foreseeable future, and even a Switzerland-style relationship crosses multiple red lines for the Brexiteers, including contributions to the EU budget, the need to follow some of its rules, and acceptance of free movement of labor .
The evidence of recent days casts doubt on whether Sunak’s government genuinely believes it can secure some of the supposed “freedoms” that Brexiteers said would become possible by leaving the EU.
Migration is a case in point. While Home Secretary Suella Braverman talks tough on people who cross the English Channel in small boats, the country’s new border controls allowed net migration to hit 504,000 in the year to June, the highest figure ever recorded, according to Office for National Statistics data on Thursday .
Sunak’s spokesperson, Max Blain, insisted the prime minister is “fully committed to bringing overall numbers down,” although given current labor shortages, it’s unclear how and when the government intends for that to happen.
Controlling migration was one of the key factors behind the Brexit vote, but Blain said the UK still does not “truly have control” of its borders while illegal migration across the English Channel persists, remarks that suggest the Leave campaign pledge had not been fulfilled six years after the referendum.
The Brexiteer vision of a low-tax UK and deregulated City of London has also been challenged by the Sunak government.
On Wednesday, the Treasury scrapped a plan to give politicians an intervention power over financial regulators. The plan for so-called “call-in” powers to be added to the legislation on the UK’s post-Brexit framework for banks, insurers and asset managers, had stirred controversy.
Proponents argued it would give British lawmakers added democratic oversight of regulators now that the UK has left the EU. But critics including the bosses of the prudential and consumer regulators said it threatened to undermine their independence and damage the UK’s reputation.
Hunt also said he’d asked the Treasury to look at how much money the government could raise by taxing wealthy foreigners who enjoy so-called non-dom status.
Meanwhile, the EU continued to chisel away at the pre-eminence of Britain’ financial markets with a requirement that derivatives traders use accounts at clearing houses in the bloc for some transactions. The proposed shake-up — first reported by the Financial Times — is aimed at reducing the EU’s reliance on the UK’s financial services sector after Brexit. The demands would apply to derivatives, and could include credit swaps and futures.
Asked to name benefits of Brexit this week, government spokespersons have responded by arguing that there is potential for the UK to innovate in areas such as gene-editing and life sciences.
Speaking in the House of Commons on Thursday, veteran Brexiteer and Conservative backbencher Peter Bone insisted he was delighted the free movement of people had ended and that the UK had sovereignty over its own laws. He called for a debate in Parliament with the title: “Brexit: a roaring success. No turning back.”
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