What is the Malthouse Compromise and Brexit Plan C?

Drawn up in meetings co-ordinated by housing minister Kit Malthouse – the MP who brought the parties together – here's what you need to know about Brexit Plan C.

What is the Malthouse Compromise?

Late on Monday evening it emerged a new Brexit plan had been put forward, backed by members of both the Remain and Leave camps of the Conservative party.

The plan – called the The Malthouse Compromise after Kit Malthouse – would lead to Britain leaving the EU "on time and with a functioning government", former Brexit minster Steve Baker said.

Said to be drawn up by Nicky Morgan and supported by others, the plan reportedly "provides for exit from the EU on time with a new backstop, which would be acceptable indefinitely, but which incentivises us all to reach a new future relationship".

It would extend the transition period – the period where the UK would continue to follow EU rules and pay into its budget – from the end of 2020 and into December 2021.

This would "allow both parties to prepare properly for World Trade Organisation terms, but also provide a period in which the parties could obviate this outcome by negotiating a mutually beneficial future relationship".

The compromise recasts the backstop as a "free trade agreement-lite", with a commitment on all sides there should be no hard border.

DUP leader Arlene Foster – whose 10 MPs prop up the minority Conservative administration in the Commons – said it provided a "feasible" alternative to the backstop.

Mrs Foster said: "If the Prime Minister is seeking to find a united front, both between elements in her own party and the DUP, in the negotiations which she will enter with the European Union, then this is a proposition which she should not turn her back on."

What has Theresa May said about Brexit Plan C?

Mrs May's spokesman said the PM "welcomes the fact that MPs are working together to come up with solutions", but declined to pass judgment on the Malthouse compromise.

Remain-backing former minister Nicky Morgan said discussions had been taking place for "some days" between herself, health minister Stephen Hammond and Solicitor General Robert Buckland on one side and Jacob Rees-Mogg and Steve Baker from the ERG on the other.

"The Prime Minister has been aware of the discussions. At some point there has to be compromise on all sides in order to get a deal over the line.

"That is what most of us want to see – a negotiated settlement with the EU," she said.

May has urged MPs to give her "the clearest possible mandate" to go back to Brussels and reopen Brexit negotiations with the aim of replacing the controversial backstop.

Opening a crucial day of debate in the House of Commons, Mrs May said MPs had made clear what they did not want when they rejected her Withdrawal Agreement by a 230-vote margin earlier this month, but now it was time for them to tell Brussels what they do want.

She called for them to send an "emphatic message" to the EU by backing an amendment tabled by Tory grandee Sir Graham Brady which would require her to replace the backstop with "alternative arrangements" to avoid a hard border in Ireland.

And she told them: "If you want Brexit, you have to vote for Brexit."

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