What is the ‘Malthouse Compromise’?

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Rebel MPs from both sides of the Conservative Party’s Leave/Remain divide are meeting in Whitehall to develop ideas for “alternative arrangements” to replace the controversial backstop to keep the Irish border open.

Here’s a look at the so-called “Malthouse Compromise” being touted as a way forward.

– How did the plan come about?

Housing minister Kit Malthouse brought Remain and Leave-supporting Tories together in a bid to break the Brexit impasse – concocting the plan which now bears his name. Unlikely bedfellows including Nicky Morgan, Jacob Rees-Mogg and Steve Baker, as well as frontbenchers Stephen Hammond and Robert Buckland, held secret talks for “some days” – and brokered the plan over a chocolate orange.

Nicky Morgan
Nicky Morgan (Stefan Rousseau/PA)

The plan contains two choices to be offered to the EU: one for how the UK will leave with a deal, and one for how it will leave without. Plan A is similar to the current Withdrawal Agreement, but with changes to the Irish backstop and the implementation period. Plan B assumes that agreement on the Withdrawal Agreement is not possible and creates a “transitional standstill period”.

– How is plan A different to the current deal on offer?

The bare bones of the Withdrawal Agreement remain the same, but the implementation period would be extended until no later than December 2021. The aim of this is to provide a longer period to agree the future relationship, but it could also involve paying more money to the EU. The second major difference is to the controversial backstop, which would be changed to become a “basic free trade agreement”. It would not require new technology and relies on existing administrative processes.

Jacob Rees-Mogg
Jacob Rees-Mogg (Rebecca Black/PA)

Yes – as Britain would remain in a transition period even if a Withdrawal Agreement had not been signed. The UK would become a third country, in practice, but would offer to pay the EU in exchange for retaining the implementation period until no later than December 2021. Plan A would remain on offer as long as the EU was willing to consider it.

– How much would the UK have to pay?

Under plan B, Britain would offer around £10 billion per year in exchange for the implementation period to continue.

– When would Britain leave the EU under the plan?

Brexit would still occur on March 29 under both plans, but the major difference is that the UK could stay in a transition period until December 2021 under both.

Theresa May offered an olive branch to the rebel Tories by inviting MPs including Steve Baker, Marcus Fysh, Owen Paterson, Damian Green and Nicky Morgan into the Cabinet Office on Monday afternoon. The hardline Eurosceptics in the European Research Group and Remain-supporting former ministers will form the Alternative Arrangements Working Group (AAWG), which Downing Street said would meet “regularly” with Brexit Secretary Stephen Barclay and senior officials.

– What happens next?

The AAWG is expected to meet at least twice more this week, but it is unclear whether Brussels will accept the proposals. Deputy Brexit negotiator Sabine Weyand has said technology would not solve the border issue “in the next few years”.

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