ConservativeHome has received an official explainer of the Malthouse Compromise, and offers it without comment for the interest of our readers.
The Malthouse Compromise
Parliament may shortly face a binary choice over leaving the European Union with an agreed Withdrawal Agreement (WA) or without one.
Many MPs find the WA in its current form unacceptable. Indeed the Commons have rejected it by a large majority. Others find the possible economic and logistical disruption of an exit without any WA equally troubling.
For too long the Brexit debate and negotiations have been stymied by a collective gamble over this choice. Each side of a naturally binary debate – Leave/Remain – was manoeuvering around this fallback arrangement in the event of the WA’s failing, to the extent that the WA itself was being neglected and consensus could not emerge about what it should and should not contain.
Our intention therefore was to create a degree of optionality to mitigate the binary quality of that choice – and to do so in a way in which those on both sides could accept a package as a whole that sought to address their concerns. The idea is that each side will find in the package proposals that they might not consider ideal but will find acceptable.
In this way we hope a consensus will emerge across the House and that we can have an eminently reasonable set of options to present to our EU partners which could command a majority – something the EU have quite rightly been asking to see for some time.
The structure of the compromise is to offer the EU a choice of two plans: Plan A is predicated on achieving agreement on a WA that addresses the principal weakness of the current version, the perpetual character of the Irish backstop, and its consequences for the Future Relationship between the UK and the EU. Plan B assumes that agreement on a WA is not possible and that both sides accept a responsibility to act so as to minimize as far as possible the disruption that might arise to people and businesses in the EU and the UK.
Both Plan A and Plan B involve the UK’s ceasing to be a Member State of the EU according to the timetable set by Article 50 of the treaties, that is on 29th March 2019.
In order therefore –
Plan A – “The Deal”:
Essentially we would offer the existing WA with two changes:
First we would extend the implementation period until no later than December 2021. This would involve more money, but also provide a longer period to agree the Future Relationship (FR), with an immovable deadline to act as an incentive for talks.
Second, to address the backstop, we recognize the legitimate concern on both sides of the border on the island of Ireland about the effects of Brexit on the settled border arrangements, and the profound commitment of all parties to the Belfast Agreement. However, it is clear that the current formulation of the backstop is not acceptable to the Commons, and some of the suggested solutions to this problem essentially mean the backstop isn’t a backstop at all. We therefore propose a different basis for the backstop that is capable of being permanent. In essence the nature of the new backstop is a basic free trade agreement and a brief is attached at Appendix 1. It is important to note that the NI border arrangement requires no new technology and relies on existing administrative processes.
All else in the WA remains the same, including, very importantly a guarantee of EU and British citizens’ rights.
If this is not acceptable to the EU, or they require more time to consider it, we would propose our Plan B –
Plan B essentially creates a transitional standstill period, at the end of which the UK would overnight become a third country in practice but during which we would have time to avoid disruption in a number of ways:
This transitional period would last until the end of December 2021, during which time we would pay our net EU budget contribution, and cover our other liabilities subject to arbitration (pensions etc), and we would “stand still” on everything else – so we would remain a member of the customs union and single market, and the various other arrangements to do with security, aviation and so on. Again very importantly we would unilaterally guarantee EU citizens’ rights.
In essence this structure throws a safety net around “No Deal” diffusing the drama and mitigating the possible damage on both sides, with plenty of time allowed to agree a future relationship, which is the desired outcome for everyone. It also allows other non-EU countries to see that the UK has proposed something eminently reasonable which protects our supply chains.
If this structure of two deals is offered to the EU, we would expect it to receive serious consideration by those concerned to achieve a resolution that works for both the UK and EU. Plan A is reasonable and workable and addresses the legitimate concerns about the Irish border. Plan B provides a transitional period in which we can settle remaining differences without unnecessary economic damage or logistical difficulties, retaining optionality for all sides. In both cases there is no prejudging of the form of the FR. Maintenance of the Common Travel Area on the island of Ireland is also an important part of both plans.
The only other option is slamming the door, which would seem irrational and unfair given that the EU have pledged to use best endeavours to agree a smooth and civilized exit. On this basis, given the widespread support for this compromise, and the demonstrated majority for it, we would welcome the opportunity to develop it further with the Prime Minister such that it could be offered to our EU allies as a profoundly reasonable solution.
Appendix 1: The New Backstop
The main changes to Withdrawal Agreement
1. No “single customs territory” between the UK and the EU, allowing the UK to regain control over its tariffs and regulations which are required to carry out negotiations for trade agreements with other countries. This makes the UK a credible trade partner for third countries after 29th March 2019.
2. A new backstop to replace the Northern Ireland Protocol which is based on what the permanent solution to the Irish border should be. This maintains the territorial integrity of the UK and allows the UK to regain control over its tariffs and regulation. Crucially to address the concerns of the Republic of Ireland, this arrangement is capable of being permanent – a frontstop – It includes:
This will allow us to use a range of proven solutions for our customs procedures, while reducing the burden of formalities on traders and avoiding congestion at ports, and include the principle that any necessary formalities and inspections are carried out with the minimum of delay and, to the maximum extent possible, away from the border. This will employ:
3. We would propose an extenstion of the Implementation Period to 31 December 2021, but no further.