January 30, 2019 / 4:44 PM / 6 months ago

Factbox - The Brexit compromise that helped send May back to Brussels

LONDON (Reuters) - British Prime Minister Theresa May has won the backing of parliament to seek changes to her Brexit deal, thanks in large part to a peace accord between both eurosceptic and pro-EU factions within her divided Conservative Party.

An anti-Brexit protester demonstrates outside the Houses of Parliament, in Westminster, London, Britain January 29, 2019. REUTERS/Hannah Mckay

The strategy, which emerged this week, has been dubbed the Malthouse Compromise after one of its proponents, lawmaker Kit Malthouse.

It courts Brexiteers with a promise to ditch an unpopular Irish border policy in favour of an alternative and appeals to pro-EU Conservatives by pledging safeguards against the risk of disruption if no exit deal can be agreed with Brussels.


Although the plan takes its name from low-key junior housing minister Malthouse, its political weight come from the senior figures who helped draft it. These include former education minister Nicky Morgan, a prominent campaigner for close ties with the European Union, and Jacob Rees-Mogg, leader of a powerful Conservative eurosceptic faction.


To get any Brexit deal ratified May needs to secure parliament’s approval. But her party is divided over the best way to leave the EU, and earlier this month comprehensively rejected an exit deal she negotiated with Brussels. Without an exit deal, Britain could face significant economic disruption.

The key point of disagreement in Britain is the Irish backstop - an insurance policy designed to prevent the revival of border controls between the British province of Northern Ireland and EU member Ireland.

Many pro-Brexit MPs, including the Northern Irish party which props up May’s government, fear Britain could end up tied to EU rules indefinitely or that the backstop could drive a wedge between Northern Ireland and the rest of the UK.


The Malthouse plan has not been set out in a formal document. But based on reports of leaked communications and statements by its backers, it can be broken into two parts: a modified set of negotiating aims and a fallback option in case that fails.


The group backs an alternative withdrawal agreement, which is closely modelled on the existing agreement, but includes a different backstop arrangement.

The new backstop would be based around a zero-tariff free trade agreement rather than its current basis of a shared customs area between Britain and the EU. It relies on technological solutions to move checks on goods away from the border. This proposal was first announced in December.


If negotiations with Brussels fail, the government should seek a basic transition agreement involving an offer to keep paying into the EU and guaranteeing the rights of EU citizens living in Britain.

In return, Britain wants to extend current trading terms beyond the end of the ‘implementation’ period - utilising a clause in international trade law - if a permanent trade arrangement has not been agreed by then. May’s rejected divorce deal envisages a transition, or implementation, period till the end of 2020 during which trade would continue on current terms.


May has not fully endorsed the plan, but it is one of three options she is considering as she prepares to return to Brussels. They are:

1. A right for Britain to unilaterally decide it will leave the backstop.

2. A time limit on the backstop.

3. Alternative backstop arrangements, along the lines of those put forward by Malthouse.


Tuesday’s vote in parliament allows May to present a united front in the hope of persuading Brussels to reopen the deal, but it is not specific about what she must change. This raises the risk that the peace deal in the party is only temporary.

A chorus of EU voices has dismissed the prospect of renegotiating the legal text governing Britain’s withdrawal, which was signed off by all 27 other EU countries last year.

If whatever May is able to secure from the EU falls short of her party’s expectations, she could face a repeat of the heavy defeat her original deal suffered in parliament. May has promised to report back to parliament by Feb. 13 at the latest.

Reporting by William James; Editing by Gareth Jones

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