British Prime Minister Rishi Sunak has ruled out a Swiss-style alignment with EU laws to secure a trade deal with the bloc, instead pledging that existing Brexit arrangements could “bring huge benefits to the country”.
Speaking at the CBI annual conference in Birmingham on Monday, Sunak came under pressure to address two key business demands to open up trade with the EU and allow more immigration to address labor shortages.
Downing Street was forced over the weekend to downplay reports that Britain was considering a Swiss-style trade relationship with the EU.
Sunak said: “Let me be clear. Under my leadership, the UK will not seek a relationship with Europe based on alignment with EU rules. I voted for Brexit. I believe in Brexit. Brexit can offer the country enormous benefits and opportunities.”
He pointed to migration as one of the areas where the UK has benefited from Brexit, saying: “We have reasonable control over our borders. . . we are in control.”
Business regulation would also improve after leaving the EU, he said. “We need sustainable regulatory regimes that ensure this country can lead in the industries that will create the jobs and growth of the future. And the regulatory freedom to do so is an important opportunity of Brexit.”
Sunak said Britain could now strike trade deals elsewhere, citing talks to sign the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), which could open up duty-free trade with countries in the Indo-Pacific.
While the opposition Labor Party is on a charm offensive to win over British industry, Sunak pledged that the Conservatives would remain the party of business: “It’s the economy that creates wealth and jobs that the country needs. There’s a lot more [the government] can do.”
Speaking before the prime minister, CBI chief Tony Danker urged Sunak to focus on the country’s economic needs across political “barriers,” including allowing more immigration to alleviate labor shortages and improving trade with the EU.
Danker told ministers they should also introduce tax incentives to support investment in the UK to offset the rise in corporation tax to 25 per cent.
As chancellor, Sunak had discussed a replacement scheme for the super deduction allowance, which allows for tax breaks for investments that expire in April.
But on Monday the prime minister ducked questions over whether he would consider a new investment stimulus next year to replace the special deduction allowance, pointing instead to existing schemes such as the annual investment allowance.
Sunak pledged to fire up the UK’s “innovation engine” and pledged support for innovative companies and entrepreneurs.
Chancellor Jeremy Hunt last week announced a new government industrial focus on five key industries: digital technology, life sciences, green industries, financial services and advanced manufacturing.
Hunt also pledged to maintain levels of government spending on research and development, but shocked the start-up community by cutting widespread small business tax breaks that have helped boost innovation in the UK.
Technology founders and science chiefs have attacked the plans – which have been touted as an attempt to curb abuse of the system – as a step backwards if Britain is serious about developing businesses in key sectors.
On Monday, Sunak said the UK will have “the world’s most attractive visa regime” for entrepreneurs and skilled technicians.
He also pledged to draw up plans to support energy-intensive companies, whose state support is due to end in March next year. But he said aid would be targeted at those who need support the most.
Sunak said he knew how “tough” it had been for energy-intensive companies. But he added that it is “right and responsible to adjust how this support works. It will be more targeted to the companies that need our help.”
He added: “We recognize a particular issue with a group of industries that are very dependent on energy, for which we need to make sure we have a plan and you can expect the Chancellor to address that.”