The debate about Brexit has entered a new and potentially chaotic phase. Britain has already suffered an economic and reputational hit from the Brexit saga. Investments are on hold, jobs are being moved, the pound has lost value. Britain has come to be seen as a political risk rather than a force for stability. If our leaders continue to peddle illusions about the real choices, they risk turning damage into carnage.

Jeremy Corbyn told supporting Brexit could cost Labour seats Read more

The first illusion is that the fundamental problem with Brexit is the faulty negotiating tactics of the government. This is said by both the Brexiters and the Labour leadership. Boris Johnson says Britain should have shown “more willpower”. Dominic Raab says we should have threatened to withhold agreed payments. Owen Paterson says we should embrace no deal to frighten the EU into concessions.

The Labour leadership is not much better. Jeremy Corbyn’s Guardian interview has rightly caused a furore. He makes clear that his difference with the government lies in tactics not goals, personnel not principles. The assertion – it does not deserve to be called an argument – seems to be that a better atmosphere would get a better deal. But this is a confusion at best and a fantasy at worst.

There is no doubt that the government has botched the negotiations, with everything from the red lines over the customs union and single market to the premature triggering of article 50 (with, it must be remembered, Corbyn’s support) and the partisan approach adopted by the prime minister.

But this is a flawed starting point. The problems of the Brexit negotiations are structural and not primarily the result of the government’s incompetence. The contortions of Brexit are integral to it rather than incidental. The promises of Brexit can never be squared with each other or with reality. There is no future state where frictionless trade and the commitments of the Good Friday agreement (to avoid a hard border between Northern Ireland and the Republic) are compatible with departure from the customs union and single market. The debate about the backstop is a symptom of the problem, not the core problem. If you leave the club, then you cannot enjoy the benefits.

A second illusion is also vitally important. This is the idea that if Theresa May’s plan, or the Labour version of it, is passed, then we could be done with Brexit and get on with improving the country. The reality is that if the May plan is voted through, the contortions that have bent it out of shape will continue. They will reappear, many times, when the negotiations about the future relationships between the UK and EU finally get into detail and expose the trade-offs that were fudged in the 26-page political declaration appended to the withdrawal agreement.

There are three rule-makers in the 21st century: the EU, America and China. Opt out of the EU, and we are rule-takers

The desire to get shot of Brexit from the headlines, to free up political and economic ability to get on with addressing the growing problems facing the country, is understandable. But the only way to create space for the country to move beyond Brexit is to give it the chance to decide whether to proceed with Brexit. There is no realistic future where we continue to negotiate with the EU and have the bandwidth to mobilise national willpower for the big challenges ahead.

The government published more than 100 papers on sectors of the economy affected by no deal. All of these would need detailed arrangements to be agreed on for the future. It took Canada seven years to effectively negotiate a trade agreement with the EU. That agreement does not come close to the deal that the UK currently has with the EU, not least because 80% of our economy is services based. As Sir Ivan Rogers, who was the leading UK diplomat in Brussels until two years ago, recently said in a lecture at the University of Liverpool: “The free trade agreement talks will be tougher than anything we have seen to date.”

There is one final illusion: the notion that the world beyond Europe is waiting to offer juicy trade deals to Britain. The EU has trade deals with more than 70 countries already, as well as facilitating trade with the likes of US and China through a series of side agreements that in the case of the US number no less than 147 to supplement the WTO minimum standards.

All of these other “third countries” have interests of their own. It is a fantasy to think that they are going to do anything other than confront Britain with very unpalatable choices – literally, in the case of America’s chlorinated chicken. There are three rule-makers in the 21st century: the EU, the US and China. Opt out of the EU, and we are rule-takers.

The prevalence of these illusions has become tiresome for our European neighbours, compounded by the attempt to blame them for the mess. I was told by someone who was there that after this month’s European council meeting, they “just want this issue to go away”. But my European friend added: “I have no words to express my sadness about all this.”

The paradox of our current situation is that our European neighbours are becoming hacked off just as the UK debate brings the possibility of a referendum closer than it has been before. A people’s vote is not an admission of defeat or a poke in the eye to those who voted leave. “Better safe than sorry” is the right approach when buying a house, and so makes sense when making a momentous national decision.

What Labour can learn about Brexit from California: think twice | David Adler Read more

The alternative to a bad deal – the May plan – is not no deal. It is reported that five cabinet members can now see their way to supporting a people’s vote. They need to insist that preparations begin now. Gordon Brown has made a good point that a referendum needs to be carefully prepared if it is to begin the healing process. The evidence from Ireland’s citizen’s assembly, is that referendums do not need to be divisive – even on issues that go to the core of national character – if citizens are involved in drawing up the question and participating in the debate. That takes time, but it is time well spent. That needs to be urgently negotiated.

We know Vladimir Putin and Donald Trump want Britain out of the EU. But their interests are not our interests. We have no time to lose in getting to grips with reality, sloughing off the illusions that have held sway on right and left, and embracing a vision of Britain’s future that is positive, empowered, progressive – and European.

• David Miliband is president and CEO of International Rescue Committee and former UK foreign secretary