Henry Newman is Director of Open Europe.

Theresa May’s Brexit strategy is in crisis. What’s the best path for the Government out of this new impasse? How can the next Brexit Secretary, Dominic Raab, use his role to improve the path of Brexit? And what will Europe make of it all?

To deliver Brexit, the Government needed (and still needs) to strike a compromise between pragmatic Remainers and Leavers in the Commons. They also need to find a position that is negotiable with the EU. Open Europe put forward one such compromise proposal, but as I warned previously there was a danger in going much further.

Open Europe’s plan was for broad alignment on goods rules, with divergence on services. The Government went further. We did not back UK-wide alignment on agri-food or Sanitary and Phytosanitary rules, and disliked the Government’s proposed new Customs Partnership (as well as its new incarnation, the Facilitated Customs Arrangement).

As I acknowledged over the weekend, it is welcome that the Government finally agreed a plan. Remarkably, it’s taken over two years to get one locked down. This isn’t a perfect plan – far from it. There’s plenty to quibble about, but to coin a phrase, perhaps a plan is better than no plan. Now, however, Cabinet unity is cracking, with a handful of key resignations, and the future of the Chequers proposal looks at risk.

Many in Government and beyond are rightly worried that the EU will see the UK’s concessions and simply ask for more. The UK must hold firm. With a generous offer of a partnership on the table, Brussels and the EU capitals should take the UK plan seriously and should recognise how much the UK side has shifted. As some of the German press is now acknowledging, it’s time for Brussels to move. Recent resignations ought to underscore how politically difficult it would be for the Prime Minister to concede further ground.

If Brussels doesn’t move – and it’s certainly strongly possible that they will remain intransigent – then the inevitable outcome must be a more distant relationship with the EU, based on a thinner FTA and greater regulatory divergence. Remain-backing Conservative MPs have acknowledged that if this compromise is ‘thrown back’ in the Prime Minister’s face, a different approach – i.e: a looser deal – would be needed.

Dominic Raab, the new Brexit Secretary, is a talented and able minister. Over-looked for a Cabinet-level job for too long, he is a welcome addition to the top table. But he faces a difficult role, not least because he will struggle to put his hands on the lever and actually control the direction of the negotiations themselves.

The Government’s overall Brexit position has been boxed in by a series of errors in the negotiations, and of course by the hung Parliament itself. As a source in the Brexit department put it to me some weeks ago, triggering Article 50 without a clear plan was probably the Government’s gravest mistake, closely followed by signing off on the backstop (without defining it in more advantageous terms), and agreeing to phase the talks to conclude money before discussing trade.

The Brexit Secretary’s role itself is also diminished. After the departure of Sir Ivan Rogers, Olly Robbins became the key official in the negotiations. Initially, he simultaneously served as the Prime Minister’s top adviser on Brexit, as well as the Permanent Secretary of the Brexit Department (DExEU). David Davis was reportedly – and understandably – irritated that Robbins was providing different advice to the Prime Minister and working directly to her, by-passing him as the responsible Cabinet Minister.

Then Robbins moved out of DExEU altogether, taking some key officials with him to the Cabinet Office and recruiting a parallel team there. Davis was progressively cut further and further out of the negotiations and the policy development. At one level, it was always inevitable that the prime figure in the Brexit negotiations would have to be the Prime Minister. Yet equally, Downing Street could have done more to use the Brexit department more effectively and avoid it being side-lined.

And it’s not just the Brexit Secretary who has been kept in the dark about key decisions. I’ve heard from civil servants in various departments who told me the they have been working on Brexit papers from which their ministers were excluded. Such behaviour is arguably unconstitutional and certainly unwise politically. If the Prime Minister is serious about proper Cabinet government, it’s not reasonable to bounce ministers into crucial decisions by presenting them with papers at the last minute.

When Davis resigned, some suggested that the best course would be to wind down DExEU – something that’s planned to happen anyway in coming years – and fold it into the Cabinet Office. Indeed, it’s questionable whether the department should ever have been created in the first place. Perhaps it would have been better to run the negotiations out of the European Secretariat in the Cabinet Office. Yet the decision was taken to replace Davis with his former Chief of Staff, Raab.

I also heard yesterday that plans were afoot to dismember the department, taking functions away from DExEU and leaving it responsible only really for domestic preparations for Brexit. These were due to be announced just before the Foreign Secretary’s resignation. They should be urgently reconsidered.

Making preparations for ‘no deal’ must be a crucial part of Raab’s role as Brexit Secretary. But he should also be allowed a chance to shape negotiations over the coming months, presenting the strategy to Cabinet. The withdrawal agreement will need to be agreed soon after the summer, but discussions on the terms of our future relationship won’t be settled until well after the UK technically leaves the EU.

It’s hard to judge which way Brexit policy will now turn, so it’s more important than ever for the Government really to step up preparations for all possible scenarios – for the UK leaving with no deal, for a thin free trade agreement, and for a deeper partnership. The next few weeks will be crucial for the direction of Brexit.