6 February 2019

The Malthouse compromise can unite the Conservative Party. But it won’t fly with the EU

It’s the same old problem: the Conservative party can’t unify around a set of proposals that flies with member states.

The Tories are buzzing with talk of the so-called Malthouse compromise. The surprise proposal was unveiled last week by senior Leavers including Jacob Rees-Mogg and Steve Baker, and Remainers Nicky Morgan and Damian Green. It involves extending the transition period by a year to December 2021, and asking the EU to replace the backstop with a basic free trade agreement. If the EU says no, the MPs want the government to ask for the extension anyway, and use it to prepare for no deal.

But there’s a problem with the compromise: the EU won’t countenance it. There will be no transition period without a withdrawal agreement. Yet if MPs involved in the compromise are to be believed, a dozen civil servants are participating in daily two-hour discussions about how it could be made to work. So why is the prime minister entertaining the proposal? To keep her party happy. One member of the ERG warns that they won’t vote for her backstop even if it’s time-limited, because they view the entire thing as “structurally wrong.”

Meanwhile, the Malthouse plan looks poised to unite the Tories. One MP who voted against May’s deal says that “from a purely party management perspective, it’s the only game in town to avoid a deep and very nasty split in the coming weeks. My sense is the vast majority of the party would get round Malthouse—almost everyone apart from the odd person at either extreme of the debate.” Moderates could be swung by an extension to the transition period until the end of 2021—the biggest obstacle to which, in any other circumstances, would have been the ERG. It would give MPs the time to push their own preferred outcomes, as they can be sure that a lot can change in two and a half years.

But this is all deeply theoretical. The EU won’t grant a transition that only leads to a no-deal Brexit. If some form of the Malthouse compromise gets through the Commons, it will be roundly rejected by the EU, and the country may find itself where the ERG was happy to go in the first place: crashing out on 29 March.