Malthouse compromise: What is the Brexit plan which could unite warring Tories?

The prime minister has invited Conservative MPs from both sides of the Brexit divide for talks at the Cabinet Office this week to try to break the present political impasse, after her deal with the EU was resoundingly rejected by parliament in January.

Leading Brexiteers including Steve Baker and Owen Paterson have joined forces with pro-EU types such as Nicky Morgan and Damian Green to form the “Alternative Arrangements Working Group”, which will bunker down for three days of brainstorming to deliver on a Brexit “plan C”.

Westminster was caught unawares when the unexpected compromise plan emerged last week, which seeks to remove the unpopular Irish backstop from the current deal and replace it with alternative arrangements.

Dubbed the “Malthouse compromise” after housing minister Kit Malthouse, who united the warring groups, the plan is now being seriously considered at the top of government.

The Malthouse plan has two strands. The first part would be to extend the post-Brexit transition period by an extra year to December 2021, to give the UK more time to agree a trade deal with the EU.

The second element is much more tricky. It involves replacing the existing “backstop” arrangement – which acts as an insurance policy against a hard border on the island of Ireland – with a free trade agreement and unspecified technology that will make it possible to avoid endless checks on goods crossing the border.

In the background, the attorney general Geoffrey Cox will separately look at legal changes to the backstop such as the possibility of a time limit.

Tory MPs appeared to unite behind the plan, as the backstop is the key stumbling block for many Brexiteers.

Indeed, the proposals are regarded as a key factor in the European Research Group’s decision to back an amendment last Tuesday tabled by Tory backbench organiser Sir Graham Brady, which instructs the prime minister to reopen the deal she sealed with Brussels

But the EU has given that idea a pretty frosty reception. Within minutes of the Brady amendment result being announced, senior European politicians completely ruled out any renegotiation, in a major snub to Ms May.

Critics have accused the prime minister of “wasting valuable time” by arranging these Whitehall meetings to consider a plan which the EU has already dismissed.

But Downing Street will be banking on the fact that getting MPs to coalesce behind a new plan could give the PM some leverage when she goes back to Brussels later this week to try to persuade the EU to budge.

Certainly some in Westminster argue that the EU will shift at the eleventh hour. But there is no evidence of any movement so far, and the language in Brussels remains strongly opposed to any changes to the withdrawal agreement.

Ms May has promised to come back to parliament next week and set out whether she has made any progress. But with only two months left until exit day, she is running out of time and options.

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