The Brady Amendment and the Malthouse Compromise

Posted on 07 February 2019

The Brady Amendment and the Malthouse Compromise

As 2019 continues the old Brexit terms, such as four freedoms, customs union, free movement, Withdrawal Agreement and backstop, are increasingly being sidelined as the media grapples with two conciliatory methods proposed by Conservative members of parliament: the “Malthouse Compromise” and “Brady Amendment”. Let’s take a look and unpick these.

The Brady Amendment, proposed by influential Conservative backbencher and Chair of the 1922 Committee, Sir Graham Brady MP, requires that the backstop be replaced with an alternative arrangement. Now in order to understand that, we need to remind ourselves of what the backstop is.

The backstop is contained within the Irish Protocol in the Withdrawal Agreement. It only comes into effect in the event of failure by the EU and the UK to agree to a long term trade agreement which makes it unnecessary to have a hard border between Northern Ireland and the Republic of Ireland. The backstop keeps the UK in a Customs Union with the EU and makes sure that regulation in Northern Ireland remains compatible with EU regulation so that goods can flow across the Irish border without the need for controls. It preserves a soft border and the Good Friday Agreement until a longer term solution can be worked out during the transition period. The EU position to the UK is: come up with a compromise, fast.

It implies that Northern Ireland might have regulations that are identical to those in the Republic and the EU, but different to those in the rest of the UK. To Unionists in Northern Ireland that begins to feel a lot like a gradual separation from the UK and incorporation into the Republic, in other words, the reunification of Ireland. The Unionists in Northern Ireland and many Conservatives in the UK are very opposed to this.

The EU says that the backstop was a compromise designed and proposed by the British, so that the divorce negotiations could eventually be concluded and talks on the future trading relationship could start. They insist that they didn’t like it but were prepared to go along, rather than being enthusiastic advocates for it. Its primary purpose was to safeguard the Good Friday Agreement by ensuring there would be no hard border between the two parts of Ireland. Both the EU and the UK agreed that it could not be unilaterally terminated.

So, back to the Brady Amendment, which seeks to find alternative arrangements to the backstop. It was passed on 29 January by 317 votes to 301 with the backing of Prime Minister Theresa May and, theoretically, shows that the Withdrawal Agreement can pass, but only without the backstop in it.

Next, the Malthouse Compromise proposed by Housing Minister Kit Malthouse MP, is an attempt to find technological and bureaucratic solutions that allow frictionless and zero tariff trade of goods and agricultural products between the UK and Ireland and the rest of the EU. Its proponents are a mix of Conservative Party MPs, some of whom advocate for a hard Brexit and other for soft (or softer).

The EU says there is no technological quick fix that exists anywhere in the world, and that there needs to be ways to ensure that there will be no smuggling of products into the EU via the Northern Ireland/Ireland border where tariffs are due, or that are not produced according to EU product safety and environmental standards. To the EU, the border between the two Irelands represents a 310 mile hole in its Single Market, regulatory space and Customs Union. Digital registration and electronic checks work for law-abiding traders who will pre-register their products, but what about criminals, terrorists and para-military organizations that may exploit the opportunity to make money by smuggling contraband materials?

Prime Minister May is back in Brussels today to try to secure concessions to the backstop. She is ruling out an extension of the Article 50 process, and has endorsed the Malthouse Compromise. Others view a short extension as inevitable. Some are hoping that Member States will soften and push for a time limit on the backstop, but Ireland is not at the moment prepared to go along with that.

Meanwhile, the planning for no deal on both sides is accelerating, which in and of itself potentially changes the likelihood of there being no deal: once people start committing serious resources to preparing for a scenario, that scenario may become more likely to happen.

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