What is the ‘Malthouse Compromise’?

The Malthouse Compromise was a plan created between members of the Conservative Parliamentary Party, and was sold as an attempt to bridge the Brexit divide within the party. It had two main stages: Plan A and Plan B.

Plan A involves the renegotiation of the Northern Ireland backstop arrangements with the use of alternative solutions, along with a new three-year transition period to replace the 19-month transition (plus a possible two-year extension) that existed in Theresa May’s negotiated agreement.

Plan B involves the UK negotiating a ‘managed no deal’ – continuing to pay annual payments for its financial settlement with the EU, in exchange for a three-year transition period where, it is suggested, a free trade agreement could be negotiated. This relies on a disputed interpretation of the World Trade Organisation’s rules.

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