Senior government figures are looking at ways to secure closer economic ties with the European Union, the Sunday Times reports today.
Chancellor Jeremy Hunt, who backed Remain in 2016, has indicated the Rishi Sunak administration may break ties with the approach adopted by Boris Johnson and remove the vast majority of trade barriers with the bloc.
The Office for Budget Responsibility (OBR) says Brexit has contributed to reducing trade volumes and business relationships between UK and EU firms.
They forecast the UK’s trade intensity will be 15 per cent lower in the long run than if the UK had remained in the EU.
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.