In a distinctively Conservative context, Michael Heseltine has posed an important question for all those who reject the doctrinaire extremes. The most important liberal Tory of the Thatcher era asked this week whether the national interest of preventing or softening Brexit should override any partisan anxiety about what a Jeremy Corbyn government might mean. You do not have to be a pro-European Conservative like Heseltine to see that the answer to that question is now yes.

Heseltine’s dilemma is an academic one at present. Corbyn may have said recently that he expects Labour to be in power by the end of 2018. Yet that seems unlikely. The problem is not that Labour might not win a general election in 2018. If there is one, Labour’s chances of winning it are reasonably high. The problem is that there is an obstacle: the Fixed-term Parliaments Act.

This 2011 law says that in order for there to be an election, the government has to lose a confidence vote or the prime minister has to persuade two-thirds of MPs to vote for one. Both are possible in theory in 2018, but not likely. Not even Heseltine has advocated bringing the government down, while few Tory MPs would vote for an early poll after 2017’s election disaster. A third option, the formation of a Labour minority government without an election, is a fascinating possibility but still improbable.

For the moment, therefore, the question facing Labour is not what it will do in government, but what it will do in another year in opposition. Some will say the answer is straightforward. Corbyn simply needs to do more of what he has done so well in 2017: offer a positive alternative economic message, remain constructively ambiguous about Brexit, wait for the Conservatives to hit the rocks and prepare to win on a tide of public anger.

Quick Guide What are Brexit options now? Four scenarios Show Staying in the single market and customs union The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election. The Norway model Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules. The Canada deal A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far. No deal Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organization rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consequences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.

That is not an approach that can be dismissed. It has got Corbyn and Labour to a place at the end of 2017 that very few, even among the committed, would have predicted back at the end of 2016. Twelve months ago, Labour was polling in the upper 20s. Now, in line with the June election result, Labour polls consistently in the low 40s. For Labour, 2016 was a year of internal divisions. Yet 2017 has seen a ceasefire.

Is this standoff merely a hiatus or is it perhaps the shape of things to come? The latter is the better option. There are certainly some in Momentum who want to transform Labour into a party for radical socialists alone. The Daily Mail and the Tory party are licking their lips at the prospect. But not all Momentum members are machine-obsessed sectarians. What is most striking about Labour at the end of 2017 is that, so far, there is little evidence of a systematic attempt to purge the centrists and social democrats.

‘Michael Heseltine has posed an important question for all those who reject the doctrinaire extremes.’ Photograph: AFP/Getty Images

This is not to downplay or be naive about the instances where existing leaders and candidates have been ousted in favour of new and mainly more leftwing alternatives. But at this early stage the evidence that it is happening is patchy and rarely black-and-white. Individual cases, such as the Haringey council battle, or the shortlisting in Watford, get a lot of publicity, but they are too easily caricatured and exaggerated and they are not typical of the whole country.

That may change. There are some ruthless operators on the left – as on the right. But it is worth making three points. First, nothing is yet happening that is remotely on a par with the deselections of the 1980s, which Labour survived. There was a lot of rotten wood on the Labour benches and some of it richly deserved the chop.

Second, there is less rotten wood now than in the past. Labour MPs may be less working class, but this reflects the long-term decline of industrial labour generally. There is no move to form a new SDP, as happened in the 1980s. I hazard the guess that every Labour MP accepts the essential propositions of Corbynism: that inequality, deregulation and cuts have been pushed far beyond the limit. The quality of the Labour benches is strikingly high, not least in the recent intakes. The case for deselections is harder to justify than in the 1980s.

Finally, Corbyn is no longer an insurgent. He has to tread more carefully on internal party questions. His leadership may grate on the backbenches but his authority is undisputed. He does not need to throw it away or jeopardise his saintly cult figure status among his supporters by igniting a process of sectarian machine politics, and trying to get rid of people like Yvette Cooper and Hilary Benn. Corbyn is not so unworldly that he does not realise the damage this could wreak on Labour’s standing.

Fanaticism is fatal for Labour, whether it is fanaticism of the right, the centre or the left

Labour is at a critical point where its different traditions have to decide whether to recognise the others’ legitimacy within the party. Labour has always been an often loose coalition of socialist and labour, liberal and conservative, revolutionary and reformist, left and right, and much else.

This has become increasingly irresistible in post-industrial politics. If one tradition tries to deny legitimacy to the others, as some in New Labour foolishly attempted, and some in Corbyn Labour might like, the resulting party will always be weakened. Fanaticism is fatal for Labour, whether it is fanaticism of the right, the centre or the left.

The important questions in British politics in 2018 are all about Brexit. Will Brexit happen? And if it does, on what terms? But in the years beyond 2018 there is a different question that needs addressing now too. Assuming that the Tory government eventually falls over in the aftermath of Brexit (though it may not), what kind of Labour or Labour-led government comes next?

The issue here is not whether Corbyn should or will create a Labour party that Lord Heseltine, if he had a vote, could vote for. Part of the issue, nevertheless, is whether Corbyn’s Labour is one that can win 2017 Tory voters in marginal seats. That is one reason why Labour must continue to liberalise its position on Brexit. There will be no Labour government and thus no respite from Theresa May’s economically brutal Brexit if that does not happen. Labour’s different traditions would be wise to maintain the current armistice. If they spend their time trying to exterminate one another it will not happen. The choice is Corbyn’s.

• Martin Kettle is a Guardian columnist