This week the fantasy island finally gets its comeuppance. For two and a half years the UK has bubbled with delusions and dishonesty. About the country we are and the one we could be, about the glittering prizes our leaders will wrangle from Europe, or about how the entire train ride can be stopped. Since June 2016, we have gone from dreams of exporting “innovative jam”, to state-sponsored traffic jams on the A256 outside Manston. Now at last those fantasies collide with reality – and the result will be chaos.

The timetable is remorseless. This evening, Theresa May puts her Brexit deal to MPs and, on the one solitary piece of legislation that will define her premiership, she stands to be badly beaten. Jeremy Corbyn plans within hours to put down a motion of no confidence. And even if the opposition fails to topple the government, May then has until next Monday to magic up a plan B. If our much-buffeted prime minister needs solace, she may find it in the observation of that canny political strategist Lenin: “There are decades where nothing happens; and there are weeks where decades happen.”

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Amid the hysteria, one question will be asked as never before: What Does Jeremy Think? In normal times, any opposition chief counts for little more than the leader of a Greek chorus. But British politics does not ordinarily encompass a disintegrating minority government, a prime minister out of ideas and drained of authority, and a parliament making the single biggest foreign policy decision in decades. In this emergency, Corbyn has it within his power over the next few days to shape Brexit and alter the course of Britain’s future. What should he do?

I can already hear Corbyn’s critics. Oh, they huff, he’s been useless. Hopeless. Like any blood-red Bennite, he’s always distrusted the EU. Now, when he should be leading, he cowers behind a composite of fig leaves. This argument leaves out two big things. As opposition party leaders, Corbyn or Vince Cable or Caroline Lucas can heckle all they like, yet it means nothing – until May’s government is defeated. Second, the Labour coalition stretches from the former coalfields of south Wales to the yoga studios of South Kensington. A fissured and fragile thing, Brexit could easily break it apart. However unheroic he looks, in his hemming and hawing Corbyn has played a weak hand well.

But as of tonight, Labour’s self-styled “constructive ambiguity” ceases to be a constructive position. In the uproar that follows, it should first hang back. Let Jacob Rees-Mogg wave around his no deal: he doesn’t have the parliamentary numbers. Let Nick Boles and his allies put forward that Norway-style halfway house: their biggest roadblock is at No 10. May spent two years playing to her party’s hard right by decrying any attempt at a Brexit compromise as a betrayal – and the past six months flogging a compromise. The resulting furious disappointment is her own bitter harvest.

Apart from bagging herself a place as a cautionary chapter in any history of expectations management, May has also closed off any chance of a soft Brexit. She has defined Brexit as about keeping out migrants – a definition that cannot be met by any Norway-style deal. Imagine how David Davis, Esther McVey and the other headbangers on her backbenches and in the press will treat any agreement that leaves the UK paying a large fee to take its rules from Brussels. It did not need to be this way, but these are the people to whom May has regularly flung hunks of raw meat; she cannot starve them now.

Throughout this Tory implosion, Corbyn needs only to tut sadly and remind voters that they’ve had no effective government since June 2016. The harder question is what Labour does if a backbencher puts forward an amendment for a second referendum. The leadership expects such a proposal, and is still debating how to respond. At this point, it should surely come out in support.

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Such a move is far riskier than diehards for a people’s vote allow. To many who in 2016 supported Brexit, it will look as if their once in a lifetime democratic choice has been cancelled. There could be uproar, in parliament, in the press and on the streets. Only two people are guaranteed to get a boost from any second referendum: Nigel Farage and Tommy Robinson.

Of less concern, the Labour party could also split as a result. Senior insiders estimate that at least three members of the shadow cabinet would quit. It is by no means certain that MPs would back another referendum.

Yet what other options are there? Westminster is now paralysed by indecision, able only to veto suggestions but never to come to agreement. No Tory MP will blow up their career by agreeing to another snap election. Even pushing back the March deadline for leaving which, given the volume of outstanding parliamentary business must surely now be inevitable, doesn’t help. For two and a half years the UK has had next to no effective government. Fiscal policy is on autopilot, vast tranches of the civil service have been diverted to Brexit preparation, and still the UK circles the same question.

If there is a second referendum, Labour will back remain. How it campaigns will matter as never before. Remain’s chances will rest squarely on winning back Labour leave voters – making a case both for staying in the EU and for upending the status quo at home. That means Tory remainers somehow agreeing to let Corbyn get some of his policies on the statute books. And the beached whales of the remain campaign – the likes of Tony Blair – will need to be cleared away.

It will also mean Labour squarely making the case for the EU being better for working people than Brexit. Without the EU’s working time directive, they could say, British workers wouldn’t have the legal right to paid holidays. Indeed, Michael Gove and Boris Johnson have reportedly plotted to repeal such rights as soon as Britain leaves. Equal pay for women, protection for agency workers: such basics have come from the EU, often despite resistance from the British government.

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Some on the left will ask, but what about those EU state aid rules that get in the way of building a new economy? Yet research by two EU competition law experts found that of the 26 economic proposals in Labour’s 2017 manifesto, all but two would not require any state aid notification. And researchers concluded that Brussels would allow the other two to pass. Besides, under Labour’s current proposal for a customs union, the UK would still be subject to state-aid rules.

While I understand the sentiments of those who want a leftwing Brexit, many of their positions sound like flights of fantasy, by those who will never have to suffer the worst consequences. Against them, I’d weigh up the consequences that await low-paid migrant workers – and I know which side deserves the most support from the left.

• Aditya Chakrabortty is a Guardian columnist and senior economics commentator