The Malthouse Compromise


Just when we thought there was no possible way forward in the Brexit arrangements a plan has emerged that may signal a solution. The plan which has drawn support from both remain and leave MPs is the so called Malthouse compromise, named after Conservative MP Kit Malthouse who brought the different factions together. It is a plan with two halves. The first, Plan A, is essentially very similar to the current withdrawal agreement save in two respects. Firstly the proposal is to extend the implementation period until December 2021. This would involve a payment of £10bn per annum. The second difference is that the backstop would be replaced with a free trade agreement with no tariffs. Plan B is a plan to exit after December 2021 on a no deal basis when we have had time to prepare for the withdrawal.

There would be a commitment on both sides that no hard border is to exist on the island of Ireland. Essentially the main point of the plan is to establish a tariff free, free trade agreement that can form the basis of the new relationship with the EU. Unlike the current withdrawal agreement there would be no customs union with the EU so Britain would be able to begin making its own deals with third countries. There would be a withdrawal from the customs union, single market and all EU rule making institutions. The DUP has suggested it may support the Malthouse compromise because it would mean that there was no difference in the way that Britain and Northern Ireland are treated.

This plan does seem to have captured widespread support from all sides of the argument. Some of the usual suspects such as Anna Soubry are against it, saying it will lead to a no deal Brexit. To have brought Nikki Morgan and Jacob Rees-Mogg together is quite an achievement. The biggest question that remains is whether the EU will find it an acceptable alternative to the withdrawal agreement. The authors of the compromise think that it should be a winner with the EU as it is largely based on the EU’s negotiating position. If it does bring enough of the House of Commons together and gain EU backing then the skies the limit for this compromise. It may even be something that Theresa May could support as it is based so heavily on her withdrawal agreement.

The power of the compromise is that it has caused a wide variety of parliamentarians to decide what it is they are for rather than merely what they are against. It has clearly kept to the idea that leaving the EU is a given and that means coming out of all EU institutions. Having said that, the compromise is also based on frictionless trade with the EU in the aftermath of Brexit. Working towards a genuine free trade agreement is a sensible use of energies. Given that we are so closely aligned with the EU it would seem easy to ensure that we have frictionless trade going forward.

The other strength of the compromise is that it gives everyone time to ensure that everything is done to maximise the beneficial relationship between Britain and the EU following Brexit. One thing that needs to be dome is that the compromise needs to be put before the House of Commons for a vote .As a genuine alternative to Theresa May’s deal it would be fascinating to see the extent of the support it could generate in the house. It may be that it is the real way through to a genuine Brexit that is achievable in a managed and reasonable order. It has the disadvantage of having to pay the divorce bill but that was always going to be part of any deal with the EU.

The light at the end of the tunnel is that clearly minds have been focused on finding a solution in regards to this compromise. It is good to see what can be achieved when MPs decide to work together to overcome their various disagreements. Clearly no deal will gain unanimous support across the whole house. What is interesting is whether this particular deal can garner enough support to make it workable. It has the feel of success about it, bringing level heads back to the fore in a dispute where agreement looked impossible. It may be that the Malthouse compromise is the best form of Brexit we can hope and aspire to.