The news from Honda that it will be closing its Swindon factory in 2022 with the loss of 3,500 jobs follows a warning by Airbus that it could slash investment in the UK, and an announcement by Nissan that it is abandoning its commitment to make the X-Trail SUV in Sunderland. We all have to wake up to what’s happening in our country. Britain is losing billions every week because of the uncertainty surrounding the future of UK trade, investment is being shelved and businesses are shifting from Britain to the EU’s single market. Around £800bn of financial assets are being moved from the country ahead of Brexit.

Honda's Swindon plant closure could lead to 7,000 job losses Read more

This economic drain will continue until investors and businesses know categorically what future relationship Britain will have with Europe. Theresa May’s deal does not set this out. The same is true for trade secretary Liam Fox’s abortive negotiating efforts: other countries won’t strike substantive trade deals until they know where Britain is going to end up with regard to Europe’s giant market. This is at the core of Britain’s current languishing state.

A resolution of the uncertainty is urgently needed. But May is wrong in arguing that this can be achieved by agreeing to her deal because it purposely obscures the conditions under which businesses and investors will be operating in post-Brexit Britain.

If we leave the EU at the end of March on her terms, the exact same argument will simply begin all over again on 1 April: whether we are going to be close to or distant from the EU, aligned or not with single market rules, in a customs union or not, assuming control of our policies or becoming an EU regulatory satellite, and whether we are going to have an independent trade policy or not. These issues go to the heart of the chasm that divides the Conservative party. But they are also the direct responsibility of Labour MPs.

Clear answers to these questions – which are unaddressed in May’s deal – are essential for anyone doing business with or in the UK.

This clarity will not be achieved by simply taking no deal off the table. Understandably, MPs are pursuing legislation, promoted by Labour’s Yvette Cooper and others, that would remove the option of crashing out of the EU because (even allowing for hyperbole) there is no doubt that market confidence would reel, the pound would fall further and every reach of the economy would face disruption. But avoiding no deal does not, in itself, offer answers to the fundamental Brexit questions. These have to be addressed before we leave, when we will lose what remains of our negotiating leverage.

Nor will we be any further forward by adding words to the infamous Irish border backstop to make it less unpalatable to Tory MPs. May already knows that what the EU is offering will fall short of the Brextremists’ demands. She wants to bounce them at the last minute.

What is blocking Tory unity is not in fact the backstop, but the realisation that the condition for both avoiding the hard border in Ireland and making good on the government’s promised free circulation of goods in Europe is to enter a customs union with the EU. This is the basis of the private guarantees that the government has given to Japanese and other international manufacturers and which these corporations no longer believe.

The May “Chequers plan”, or anything like it, is only viable if Britain is within the EU’s existing trade policy structure, rather than some imagined version of it.

Play Video 1:32 Irish deputy PM: British backstop proposals are ‘wishful thinking’ – video

As someone who negotiated within this structure, I know the EU is not going to rewrite its rulebook for Britain or create a fresh new bureaucracy to supervise May’s unicorn plan. It is also not going to allow Britain to have the benefits of access while allowing us to compete as we like. Instead, if we want frictionless trade in goods and maintenance of our supply chains, we will have to accept EU rules governing this trade, lock, stock and barrel. It will secure a large bulk of our trade but will be the opposite of taking back control.

This is the crux of the choice investors are waiting for Britain to make – to operate within or outside the EU’s regulatory perimeter – and no amount of words, can-kicking and general pretence can disguise it.

Unless it is resolved while MPs have the whip hand, we know that Brexiters in the cabinet will engineer the hardest of departures when parliament no longer has any power to affect the outcome. Michael Gove made this clear when, on the Today programme last month, the Brexiter environment secretary talked of the “stage one” exit door – afterwards, he said, “we can determine our future” and “organise our trade as we choose”.

MPs, caught between their sense of obligation to honour the referendum and desire not to wreck the economy, face a dilemma. Personally, I would put the economy first, postpone exit and insist on a resolution of the choices before leaving. Otherwise, these choices are simply going to be handed over to a Brexiter-dominated Tory cabinet without any parliamentary constraint operating on them. Is this what Labour MPs really want?

A compromise, after parliament has decided, would be for the British people to vote to give their final, informed consent. This would give legitimacy to the outcome and then the country could unite to make the best of the decision, whatever it is.

Democracy did not end with the Brexit vote on 23 June 2016. And now millions of jobs and livelihoods depend on bringing real closure to an argument that is currently costing us the earth.

• Peter Mandelson is a Labour party politician