Rival Conservative factions have come together to propose a possible breakthrough to the Brexit impasse involving extending the transition period by nine months.
Senior Tory Brexit supporters including Jacob Rees-Mogg and Steve Baker hatched the plan with leading remainers including Nicky Morgan and Stephen Hammond.
The proposal involves paying the £39bn EU divorce bill, redrafting the backstop arrangements over the Irish border, and extending the implementation period until December 2021.
The extra time would be used try to agree a free-trade deal while citizens’ rights would be guaranteed. In that time there would be no customs checks on the Irish border.
Iain Duncan Smith, the Eurosceptic former Tory leader, told BBC Radio 4’s Today programme that the proposal represented the “the best hope that we’ve got” and urged the government to get behind it.
Morgan confirmed the proposal had been reached after days of discussion coordinated by the housing minister, Kit Malthouse.
She said: “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.”
Setting out the detail of what has become known as the “Malthouse compromise”, Morgan said: “The first part of it is to recast the backstop as a sort of free-trade-agreement-lite. That would involve a commitment by all sides to have no hard border on the island of Ireland, but allow trade to continue, while there is a slightly longer implementation period till December 2021.”
In return, Brexit supporters have agreed to drop their demand that the £39bn divorce settlement be withheld, Morgan said.
She characterised the proposals as “the withdrawal agreement we have got at the moment with changes to the backstop”.
Morgan said: “People like me want to avoid a no-deal outcome and we have to look for ways to do that and we are all prepared to compromise on that.”
Steve Baker, one of the leaders of the hard Brexit European Research Group, tweeted his backing for the proposals.
Steve Baker MP✔@SteveBakerHW
“The Malthouse Compromise” after @kitmalthouse, who brought us together
We need to get out of the EU on time and with a functioning government.
This is how. #BrexitAlex Wickham✔@alexwickham
NEW: Here is the new Nicky Morgan plan endorsed by Jacob Rees-Mogg and Steve Baker as well as Tory Remainers including Stephen Hammond and Robert Buckland. New backstop plus extension of transition period, or a no-deal ‘triple safety net’
Duncan Smith said: “It combines the two things: one, we will leave on the 29th whatever – but it also ensures that those who are worried about things like cliff edges that that departure will be a managed process.”
Asked about the climbdown on the divorce settlement, he said: “We all have to make a few compromises.”
Duncan Smith urged the government to embrace the proposal to “tell the European Union that now a majority of parliament have agreed that there are compromises to be made, that allow us to say categorically we have a plan”.
But the international trade secretary, Liam Fox, gave only muted backing to the idea. He told Today: “There are all sort of ideas being put out, but parliament can’t take a decision unless that is on the order paper, and it is not on the order paper today.
“The government is open to listening to all ideas. It is time that we actually made progress. Voters want parliament to make a decision.”
It is still unclear whether the prime minister is prepared to pursue the offer of compromise.
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