The Malthouse Compromise: a possible solution to the Brexit deadlock?

10 Feb 2019

 

The Conservative Party has been riven by ideological divides on Europe for over three decades. David Cameron envisioned a pivotal opportunity to put the matter to bed in 2016, but when that backfired, these divides only widened in the years that followed. The in-fighting since the result culminated in the biggest ever House of Commons defeat for a sitting Prime Minister on January 15th. 

 

With the Government continually asserting the only options are “this deal, no deal or no Brexit”, and faced with an intractable EU that insists no further renegotiation is possible, it was clear that eventually, a middle way through would be required. The first, and at the time of writing, only attempt to do so that has gained any ground, is what has come to be known as the Malthouse Compromise

 

What is most interesting about this proposal, and where it appears to differ from all others before it, is that it specifically adopts a two-pronged approach. In what it calls ‘Plan A’, the aim is to amend the existing Withdrawal Agreement to remove its most contentious element: the much-reviled ‘backstop’ for Northern Ireland. Instead, this would be replaced by a Free Trade Agreement in goods combined with regulatory equivalence recognition and bilateral ‘level playing field’ provisions. All other provisions within the existing Withdrawal Agreement seem to be maintained, while the Implementation Period is to be extended until the end of 2021 to allow for more time to negotiate a future relationship, along with continuing payments. 

 

If the EU will not agree to this, then ‘Plan B’ is the proposed alternative. This, too, involves an Implementation Period running until the end of 2021 at the latest, while invoking General Agreement on Tariffs and Trade (GATT) Article 24 to provide for a temporary zero-tariffs trade arrangement, allowing both sides to either consider a negotiated future relationship, or prepare adequately for parting on WTO terms. 

 

In contrast to previous approaches, this compromise presents the EU with a genuine choice by demonstrating that there are not one, but two practical approaches that the House of Commons would be far more likely to accept. It almost gives cause to wonder whether, in hindsight, this might have been a better approach to take to the negotiations – although that would of course fly in the face of the long-established precedent that it is a matter for the incumbent Government to negotiate and ratify agreements with foreign powers. 

 

Kit Malthouse, the man credited with bringing the various factions within the Conservative Party together, appears to be somewhat of a rising star within the Tory ranks. Having only been an MP since the 2015 election, he was appointed Housing Minister last year, and has now shown that he has the necessary shrewdness and gumption to be able to bring together several different schools of thought – some of which had been implacably opposed – thereby uniting a party in crisis. This might well have been a source of considerable embarrassment to the rest of the Government front bench, had the Prime Minister not already indicated her willingness to consult with others from across the House on how to proceed. 

 

Malthouse will no doubt be an interesting figure to follow in the coming years. He has succeeded in doing something that many would have decried as impossible little more than a month ago. Nonetheless, however impressive an achievement that may be within the Conservative Party, it is ultimately of no great succour to the woes of Brexiteers unless the EU can be persuaded to go along with either of the plans it proposes. While there is at least now the potential for the Tories to stop arguing with one another, the issue of Brussels’ obdurate refusal to enter into any further negotiations around the Withdrawal Agreement remains. 

 

On that topic – and given that politics has been called the Art of the Possible – it is interesting to note the use of language in this affair. From the very beginning, the European Union has been keen to stress just what was ‘possible’ or otherwise. It was ‘impossible’, the EU said – taking the same tone as one explaining why 2 plus 2 cannot be 5 – to negotiate separate access to different aspects of the Single Market, despite this being a hallmark feature of the Deep and Comprehensive Free Trade Agreement it has negotiated with Ukraine. 

 

Fast forward, and now the line is that renegotiating aspects of the Withdrawal Agreement will not be ‘possible’. The translation, of course, is: ‘we would rather not do this’. Plainer speaking on all sides might, perhaps, be of some use if we are to conclude this matter amicably with our European friends. 

 

Indeed, the Malthouse Compromise is merely a further demonstration of the reality that, in politics, what is deemed ‘possible’ or ‘impossible’ is always subject to change. In fact, all of these decisions are made by human beings, and can be unmade and remade if necessary. Now that both the Conservative Party and its negotiating team have been reminded of this, we can only await a similar realisation from across the water. 

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