EXPLAINED: What is the Malthouse Plan for Brexit everyone in Westminster is talking about?

Posted On: 
29th January 2019

Pro-EU and anti-EU figures have joined forces to pen a Brexit plan they hope could win support from the House of Commons. But what does it actually involve, and could it offer a solution to the deadlock?

Ex-Cabinet minister Nicky Morgan is a key proponent of the plan
Credit: 
Louise Haywood-Schiefer

SO WHAT IS IT?

The central premise of the so-called Malthouse Plan is to extend the transition period for a year - even in the event of a no-deal Brexit - to buy more time to agree a future trade relationship. It also proposes an alternative backstop proposal to solve the Northern Ireland issue, which both Leavers and Remainers could live with in case it does end up becoming a permanent solution.

The authors have split the plan into two sections. Part A, which includes the proposed deal containing the backstop provision, and Part B, which looks suspiciously like a ‘managed no-deal departure’. Both include the extended transition period.


PLAN A

Plan A would be the Withdrawal Agreement the PM brought to the Commons but with a different backstop to keep the Northern Irish border open. The PM’s plan involved keeping the UK in a customs union with the EU, while Northern Ireland would still be subject to elements of the single market. Critics argue the proposal would leave the UK tied to EU rules indefinitely with no say over their operation, and would draw a regulatory border down the Irish sea which could lead to the breakup of the Union.

The Malthouse Plan however suggests a new backstop which it argues would be “capable of securing wide consent”. It is based on the proposal championed by the European Research Group of backbench Tory MPs that technology can be used to carry out customs checks away from the Irish border. Remember the so-called ‘Max Fac’ plan that used technology that does not exist yet? It appears to have risen again. According to the plan, it would ensure no need for infrastructure at the Northern Ireland border.

Elsewhere, the plan would continue to secure rights for EU citizens and commit to paying the £39bn divorce bill, as well as extra cash to keep the transition period going until 2021. It would also seek to ensure the UK could enjoy control over its fisheries as soon as possible. Supporters of the plan are dubbing it a "free trade agreement lite".

But if the tweaked Withdrawal Agreement cannot be agreed, we move to...


PLAN B

Plan B looks something like the ‘managed no-deal’ that pro-Brexit figures like Andrea Leadsom have mentioned in the past. It would also involve an extended transition period to December 2021 that would allow more time to either put the Withdrawal Agreement back on track or prepare for a World Trade Organisation departure.

But the WTO terms proposed in the plan would involve a so-called “standstill”, meaning no tariffs, no quotas and no new barriers to trading with the bloc, in exchange for an annual payment. It would also demand control over UK fishing waters and guarantee the rights of EU citizens living in Britain.

Crucially, it would seek to reduce the £39bn divorce bill to the smallest amount possible, as a negotiating card to bump the EU into agreeing the revised backstop plan.


WHO IS BEHIND THE IDEA?

The plan was drawn up by Tories from across the Brexit divide - and, significantly, now has the backing of the DUP, who the PM relies on for her Commons majority.

Conservative big hitters backing it include former Remain campaigners ex-Cabinet minister Nicky Morgan and current minister Stephen Hammond, and top Brexiteers Steve Baker and Jacob Rees-Mogg. It has won support from a wealth of Tories including Boris Johnson, Iain Duncan Smith, Therese Coffey, Marcus Fysh and others, according to the Telegraph.

In a boost for the plan, DUP leader Arlene Foster has said: "We believe it can unify a number of strands in the Brexit debate including the views of remainers and leavers. It also gives a feasible alternative to the backstop proposed by the European Union."

It is called the Malthouse Plan because Housing Minister Kit Malthouse is said to have brought the factions together to hammer out the Plan C compromise proposal.



BUT CAN IT HAPPEN?

Right now it is looking unlikely - but things move fast in the Brexit game. It was brought forward too late to be included in the pool of amendments that could face Commons votes tonight, and Downing Street has so far refused to back it. According to the Telegraph, Chancellor Philip Hammond is against it because the EU has refused to renegotiate the backstop. International Trade Secretary Liam Fox meanwhile issued a thinly-veiled swipe when he told TalkRadio it “sounds like an awful lot of different ideas all rolled into one” and noted that it was “time to vote on something deliverable”.

One ray of potential light for the plan: Theresa May last night urged MPs to back the amendment championed by Graham Brady that demands the current backstop proposal be replaced with “alternative arrangements”. Since nobody knows what those alternative arrangements are, at least the Malthouse Plan gives the PM something to show the EU.

The big question is would the EU bite on it? Deputy EU Brexit negotiator Sabine Weyand said yesterday that the technology solution proposal simply would not fly. "We looked at every border on this earth, every border the EU has with a third country,” she explained. "There’s simply no way you can do away with checks and controls." That does not bode well for the Malthouse Plan.