Rt Hon Lord Lilley

    This article was written for Conservative Home.


    King Canute gets an unfairly bad press. And so perhaps does Theresa May.


    Poor Canute is often represented enthroned on a beach, vainly commanding the tide to go out as the sea washes around his ankles. In fact, he was a wise monarch showing his nobles that the power of earthly kings is trivial compared to that of God. They should not demand of him the impossible.


    Maybe the Prime Minister has been doing something similar. Deliberately or instinctively, she has shown both the EU and our Parliament the limits of what is achievable.


    Various modern-day nobles tried to convince her that she could “by our mere motion” (as Royal proclamations put it) abate the level of opposition to whatever they wanted. The CBI barons believed she could roll back the tide of Brexit to keep Britain in the Customs Union and the Single Market. The civil service knights claimed she could even reverse the tide of opposition the other side of the channel to cherry picking bits of the Single Market. Her courtiers in the European Research Group wanted her to defy the swirling waters in Parliament, and go straight for a Canada or WTO option. Michel Barnier urged her to make the Irish Sea a moat between Northern Ireland and Great Britain. And her loyal Opposition now, pointing to the incoming possibility of ‘no deal’, suggest we reverse the EU referendum result entirely.


    In effect, like King Canute, she has progressively shown each of them the limits of what she can achieve. And by eliminating the impossible, she has revealed what is possible.


    The Chequers plan went a long way towards remaining in the EU Single Market for goods and creating a sort of customs union, with the UK continuing to levy the EU’s external tariff on goods destined for Europe. Her advisers probably hoped that if the Cabinet swallowed this they would subsequently accept a full customs union.


    But as a result she lost three key ministers. Others stayed only to prevent further concessions. So she had demonstrated to the EU and her civil servants that the British cabinet could go no further in that direction.


    She then offered the Chequers proposals to the EU leaders at Salzburg. But the arrogant rebuff she received demonstrated to Remain-supporting MPs that there was no hope of some hybrid solution keeping us half in and half out of the EU.


    The European Research Group had – prematurely – pressed her to go straight for a free trade agreement on World Trade Organisation terms. She took the view that Parliament would not wear those options unless and until more ambitious forms of relationship with the EU had been explored. Some close parliamentary votes on a customs union suggests she was right. By first showing what is not possible, the Prime Minister let the tide of support for that solution ebb away.


    The other reason for her Chequers plan was the EU’s insistence that a conventional free trade deal would apply only to Great Britain which would mean creating a customs border down the Irish Sea. The Prime Minister firmly rejected that. But Barnier believed she could be pressured to change her mind. So she adopted a back-bench amendment to the Customs Bill which ruled out any customs border in the Irish Sea. It was passed unanimously. So she has demonstrated to the EU that the whole British parliament rejects that proposal.


    As a result, Barnier suggested that the proposed border between Great Britain and Ireland could be made invisible, using technical and administrative procedures to avoid checks at ports. He thereby re-opened the question: why not use these procedures to create an invisible border between Northern Ireland and the Republic? If so, the option of a Canada-style deal for the whole UK comes back on the table.


    Failing that, the only option is trading with the EU on World Trade Organisation terms, as we already do with the rest of the world. Die-hard Remainers portrayed ‘no deal’ as a catastrophe in the hope of reversing the referendum. The Prime Minister calmly responded by publishing notes on how government, industry and the electorate could prepare for it. Suddenly it all sounds less frightening. There won’t be shortages of medicines or delays for anything entering the UK. The most recent batch of notices scarcely made headlines. Nothing comparable to the £40 billion we would save!


    In short, Queen Canute arrives at her Party conference having patiently shown what is impossible, and let opposition to the remaining possibilities ebb away. She has demonstrated: that the cabinet would not roll back Brexit beyond Chequers; that the EU leaders rejected Chequers without proposing an alternative; that Parliament will not accept a border down the Irish Sea; that the EU believes invisible borders are possible; that a Canada-style deal can therefore now come back on the table; failing which, WTO terms are less frightening and we save £40 billion.