What was 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 involved 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 involved 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 was suggested, a free trade agreement could be negotiated. This relied on a disputed interpretation of the World Trade Organisation’s rules.