Theresa May is returning to Brussels to seek legal assurances on the Brexit backstop, amid signs she has persuaded key Tory eurosceptics to consider backing her Withdrawal Agreement.
Chancellor Philip Hammond indicated on Tuesday night that the Government has accepted the EU will not agree to replace the backstop arrangements for the Irish border with technological alternatives in time for the scheduled date of Brexit on March 29.
But he said he hopes the technological solution contained in the so-called Malthouse Compromise will form part of negotiations over the following 21 months on the UK’s future relationship with the EU.
After being briefed on developments in private talks with the PM, leading Brexiteers Jacob Rees-Mogg and Steve Baker appeared happy with this arrangement, declaring that the Malthouse proposals were “alive and kicking”.
Mr Baker said it was now possible that Tory eurosceptics in the influential European Research Group, of which he is deputy chairman, would back Mrs May’s Withdrawal Agreement, after helping to vote it down by a massive margin last month.
“I’m hopeful that as the conversation moves forward with the EU and with the UK that we might get to a position where we can vote for the Withdrawal Agreement,” said Mr Baker.
“It’s a very big journey from here to there. I’m very grateful that today we took a big step on that journey by the general acceptance that these arrangements could work.”
In a joint statement, Mr Baker and ERG chair Mr Rees-Mogg said: “We look forward to further precision about exactly what we will be asked to vote for.”
Mr Hammond told the MakeUK dinner in London that the proposals in the Malthouse plan – drawn up by MPs from the Leave and Remain wings of the party – represented a “valuable effort” at finding a way to keep the Irish border open after Brexit without a backstop.
But the Chancellor said: “However promising as an alternative arrangement to avoid entering a backstop in the future, it is clear that the EU will not consider replacing the backstop with such an alternative arrangement now in order to address our immediate challenge.
“The details of this initiative are still evolving and would require significant changes to EU legislation and customs practices that would need to be negotiated with the EU member states and others who will be affected by them.”
He added: “It should be a major ongoing strand of our work, continuing at pace during the Implementation Period – one in which I hope and expect the EU will take an active part.”
The developments came as Mrs May prepared for a crucial meeting with European Commission president Jean-Claude Juncker in Brussels.
Mr Juncker has said that he does not expect a “breakthrough” in talks at which Mrs May is expected to request legally-binding assurances that the backstop will not extend indefinitely.
She believes that this is the key to winning the support of the House of Commons for her deal, and seeing off efforts to extend the negotiation period in a series of votes expected on February 27.
“I have great respect for Theresa May, for her courage and her assertiveness,” Mr Juncker said during a visit to Germany. “We will have friendly talks tomorrow but I don’t expect a breakthrough.”
Mr Hammond said that legally-binding changes to ensure the backstop does not become permanent “would deliver the core of a majority for a deal in the House of Commons”.
He told the MakeUK dinner: “Our priority remains avoiding a No Deal outcome, and that will be my unwavering focus.
“It is clear that leaving the EU without a deal would deliver a damaging short-term shock and would undermine our future prosperity and security – and in my view that would represent a betrayal of the promises about Brexit that were made during the referendum campaign.
“So the solution lies in getting the PM’s deal through Parliament.”
A senior adviser to EU negotiator Michel Barnier said there was “zero appetite” in the capitals of the 27 remaining members to renegotiate the agreement reached with the UK last November.
“The ideas for reopening the Withdrawal Agreement are basically for changing the backstop and making it no longer a genuine backstop, because a backstop has to be there whatever the circumstances,” Stefaan de Rynck told the UK in a Changing Europe think tank in London.
“If you have a time limit or a unilateral exit clause, you no longer have a genuine backstop. So there is zero appetite in the EU27 to reopen that Withdrawal Agreement.”
The backstop arrangements would see the whole UK remain in a customs union with the EU and Northern Ireland following some single market rules until a wider trade deal is agreed, in order to prevent the need for checkpoints on the Irish border.
The Malthouse plan would replace these arrangements with technological methods for tracking cross-border movements, along with a free trade agreement-lite for Northern Ireland.
If this was not acceptable to Brussels, a Plan B would see the UK leave without a deal but with a transition period extended to the end of 2021 to allow time to prepare.
After talks on the Malthouse plan between Mr Barnier and Brexit Secretary Stephen Barclay on Monday, Mr Barclay’s Department for Exiting the EU said: “While the Commission engaged seriously with these proposals, it expressed concerns about their viability to resolve the backstop.
“We agreed to keep exploring the use of alternative arrangements – especially how they might be developed to ensure the absence of a hard border in Northern Ireland on a permanent footing, avoiding the need for the backstop to ever enter force.”