The Brexit crunch is here. Ministers from DExEU, the new Brexit department, trying to bite the promised cake find their teeth breaking on the concrete hard choices. Theresa May’s red lines, her adamantine insistence on total immigration control with no European court of justice oversight, makes the department’s job impossible on single market and customs union access. So James Chapman, the Daily Mail journalist who was previously David Davis’s chief of staff, told Radio 4 on Saturday. There are no cakes, only rocks and hard places. Sticking to her red lines really does mean losing free access for our trade, and the 60% of our exports that go either to the EU or to 45 other countries with EU trade deals. It means lorries paying tariffs backed up around the M25 to Watford.

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Those who created the Brexit delusion now confront the impossibility of their promises. Here’s the impasse: Chapman says if May doesn’t “show more flexibility, show more pragmatism”, she won’t get her line through parliament. It’s worse than that: there is no line acceptable to both irreconcilable hard-liners and to those Tories who think leaving the single market calamitous. Her lost majority stops any resolution in a party eternally riven on Europe: EU negotiators see that with alarm.

Recall what Brexiteers said during the referendum campaign. Daniel Hannan MEP said: “Absolutely nobody is talking about threatening our place in the single market.” Matthew Elliott, of the leave campaign, offered the Norwegian, EEA option that his Brexiteers now see as betrayal. Extremist Owen Paterson used to say: “Only a madman would actually leave the market.” Well, that’s what they are.

Labour is sitting pretty on the sidelines. Davis promised “the exact same benefits” we have from the single market and the customs union, so that’s what Labour demands. Of course they know that’s impossible: leaving those clubs can never leave us “the exact same”. But that’s not Labour’s problem – or at least not yet. The Tories caused this tragic fiasco, let them get out of it.

Watch May’s party fall apart spectacularly in the autumn as eight EU repeal bills stagger in parliament. Tory Euro-fever among both pros and antis is so rampant that on this – if on nothing else – both sides would bring down their government rather than concede.

And they are right. This is the most vital question since the war. It matters far beyond the survival of a lame duck government whose obstinate leader has an almost infallible instinct for making the wrong call on everything. She has wrecked goodwill with an inadequate offer to EU citizens living here. Why won’t she take students out of the migration figures, as universities fear for their income? Why not remove all who work in the NHS or social care from the numbers? Obdurately foolish on these simple and popular solutions, no wonder she strews mines in the path of all routes through the Brexit thickets.

The Sunday Telegraph reports a senior Downing Street briefer telling industry and City leaders to prepare for her to walk out of negotiations in September if the exit fee is too high. “We are looking to be hard-nosed and hard-headed” for “domestic consumption”. At the end of this road, brave choices will have to be faced: crash the economy or tell Brexit voters unpalatable truths about necessary compromise. She shows no sign of that courage.

Brave choices have to be faced: crash the economy or tell Brexit voters unpalatable truths about necessary compromise

Labour has its own wobbles, annoying but minor compared with the coming Tory thunderstorms. Chuka Umunna and the 48 Labour rebels who voted for a Queen’s speech amendment to stay in the single market are understandably impatient with Labour’s prevarication over this national car-crash. They insist, convincingly, this was no idle anti-Corbyn cabal: this is their only conflict with him. What’s more, they were secretly urged on by would-be future Tory rebels. They passionately believe Labour should stand unequivocally for the nation’s good. They are right to protest that no one made the passionate, principled case for Europe: not Blair, not Brown, not Cameron. That’s how the cause was lost, as prime ministers pandered to populist xenophobia, despite the EU’s political, social, cultural and economic importance. Remember Brown’s secret scuttle to sign the Lisbon treaty?

Behind the rebellion was concern that Corbyn and his people are at best indifferent, at worst hostile to the EU. Had he put the same magnificent campaigning energy into the referendum, he would have swung it. Oh Jeremy Corbyn, why doesn’t Brexit figure at Glastonbury and other rallies? Brexit lacks left/right ideological clarity, while alliances with Tories may appal his supporters. When Corbyn’s new chairman, Ian Lavery, says Labour is “too broad a church” and he wants deselections of the aberrant, alliances beyond Labour for tactical ambushes start to look problematic.

In politics, timing is all. Keir Starmer and most Labour MPs feel no less strongly than the rebels that Brexit, especially a hard Brexit, consigns Britain to a dark future, so they were irritated. Starmer has piloted a clever path.

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Close observers see a new Corbyn emerge from the election. The imminent prospect of No 10 is waking him to a wider world. European leaders are suddenly interested as they may be dealing with him soon – and he shows new keenness to meet them.

John McDonnell is newly alert to the risk of arriving in the Treasury amid a full-blown economic crisis, with Treasury receipts plummeting, as banks already plan moves to Dublin and Paris. Yesterday the car industry reported a slump in manufacturing investment: it’s likely to reach only a quarter the level of two years ago. The economy slides, with the lowest growth in the G7, pay falling behind Brexit-caused inflation, trade deficits worse and personal debt dangerously high. Labour arriving in power to end austerity needs a soft landing from Brexit – or to abandon it if economic woe shifts voters’ priorities.

But for now, Labour is right to hold its fire, Starmer waiting to see the whites of enemy eyes. The Lib Dems’ “remain” stand at the last election is a warning against getting ahead of the voters.

Labour is disputing tactics, but the Tories are locked in a mortal and possibly terminal civil war: they can agree no Brexit outcome. All they can try for is a transition stretching into the blue yonder – where Labour may take over and resolve this disaster.