In an unexpected development late last night, reports began to leak out of a secret compromise hammered out between Brexiteers including Jacob Rees-Mogg and Steve Baker and Remainers including Nicky Morgan and Stephen Hammond. Even Remain-leaning Government ministers Robert Buckland and Kit Malthouse are on board, with Baker crediting Malthouse for bringing the warring factions together as he confirmed the reports which somehow managed to remain secret until last night. Remarkable given the range of people involved…

According to the messages sent to Tory MPs by Nicky Morgan last night, The ‘Malthouse Compromise’ would’:

• Replace the backstop with the alternative protocol from the ‘Better Deal’ report launched last month, which would be “acceptable indefinitely”.
• Extend the transition period for up to a year until the end of 2021 to give time for a smooth transition to a new relationship (Plan A).
• Include a “triple safety net” around exiting with no Withdrawal Agreement:
  • Continue to offer ‘Plan A’
  • Agree a standstill transition period with the UK paying its financial commitments
  • Offer a “GATT 24 WTO-compliant standstill on trade with no tariffs, no quantitative restrictions and no new barriers for execution” to come into force at the end of 2021 if the future relationship has not been agreed by then

Morgan says that “this would allow time for both parties to prepare properly for WTO terms, but also provide a period in which the parties could obviate this outcome by negotiating a mutually beneficial future relationship”. EU citizens’ rights would be guaranteed in all circumstances.

The big question is how this plan relates to today’s Parliamentary action. There are no amendments specifically related to it for MPs or even the Government to get behind, but the broad coalition of support behind it makes it impossible to ignore. Guido understands that Downing Street is interested in the proposals but has concerns about technical aspects around SPS checks…

Brexiteers remain divided over whether to support Sir Graham Brady’s amendment on renegotiating the Irish backstop, despite Theresa May giving it her official backing last night. Liam Fox confirmed on Today that the Government would be seeking to reopen the legal text of the deal if the amendment passed, potentially reassuring Brexiteers that it is not simply going to be ‘Operation Figleaf Mk II’. Guido cannot see any good reason for Brexiteers not to support Brady’s amendment, it is compatible with the ‘Malthouse Compromise’ and the best chance of changing the worst aspect of May’s deal…