Iain Macwhirter: The road to Brexit is paved with blackmail, hooliganism and punishment

The German Chancellor, Angela Merkel, and the French President, François Hollande, said May's gambit would not alter the EU's determination to have the the broad outline of the divorce settlement agreed before there could be any discussions on trade. The Council President Donald Tusk elegantly closed the issue down on Friday by insisting that Theresa May was surely “too wise and decent to use terrorism as a bargaining chip”, when of course she wasn’t and she did.

Last week was a reality check for the Brexiters in the UK Cabinet, who seem to believe that Britain can leave the European Union and retain all the benefits of being part of it. It is, after all, Brussels that controls the Article 50 agenda now that the Brexit clock is ticking. They've been given no reason to make concessions to the Brits, so they’re to go by the book.

The EU Council's draft guidelines on Friday make clear there will be no discussions on trade until the 27 remaining states are satisfied there is “progress” on the key issues of EU citizens' rights, a settlement of Britain's financial obligations and a solution to the Irish border problem. Brussels seems to care more about the Irish peace process than Britain. And of crucial importance, no trade agreement can actually be signed until after Britain has left the EU and become a “third country”. Oh, and during any transition period, the UK will still have to pay a contribution to Brussels and observe the rulings of the European Court of Justice.

In reality, the financial issues are relatively minor, despite the prominence given to the £60bn Brexit "divorce bill” by UK politicians and the press. Britain is signed up to a number of programmes in the seven-year EU budgetary round and everyone accepts that these contributions will have to continue because they are legally binding. It doesn't mean that Britain will be paying billions in maintenance payments to the EU for decades to come – though one of the more bizarre episodes in this barely-believable week was the Tory Work and Pensions Secretary, Damian Green, on BBC's Newsnight refusing to rule out the possibility that Britain might continue to pay Brussels at current levels. Again the determination to focus on crude cash instead of prioritising the welfare of families caught up in the Brexit upheaval betrays the irresponsible attitude with which the UK is approaching Article 50.

As the former Tory Party chairman, Chris Patten, put it, Britain’s diplomatic posture has all the subtlety of Millwall Football hooligans singing, “nobody likes us, everybody hates us – but we don't care”. For seasoned British civil servants, who've been used to rules-based international diplomacy, it must have been gut-wrenching to find themselves doing business this way. The Donald Trump approach to international relations seems to be catching on – perhaps Theresa May should start sending out early morning tweets.

Apart from being anything else, this confrontational approach is counter-productive. The UK has not only vacated the moral high ground, it has revealed its hand in advance – precisely what Theresa May said she wouldn’t do when MPs in Westminster asked her to state her negotiating objectives. Even countries in Eastern Europe, who might well have been Britain’s allies in A50 talks, were alienated. Countries like Estonia and Poland don't care about a few billion in contributions to the EU budget. What they do care about is the security of their thousands of citizens living and working in the UK.

They also see security and co-operation over terrorism as matters of life and death, not something to be tossed around a negotiating table like the tariffs on white goods. What was Theresa May thinking of when she juxtaposed these issues with trade talks? She implied that Britain would cease to co-operate on intelligence gathering. Yet this would surely put the safety of British citizens at risk by making it easier for terrorists such as Islamic State to plan attacks like the one on Westminster a fortnight ago. It was like the cowboy in Blazing Saddles holding a gun to his head and saying: “Stop or I'll shoot."

This has not been a good week for British diplomacy. Indeed, in one sense, negotiations over access to the single market have already opened and closed. Clause 19 of the EU Council Guidelines, unveiled by Donald Tusk on Friday, says that any future free trade deal with Europe “must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through fiscal, social and environmental dumping”. In other words, if Britain wants to gain access to the single market it is going to have to join the single market all over again.

The scenario promoted by Brexiters like Boris Johnson, in which the feeble Eurocrats roll over in order to sell BMWs to Britain, was always fanciful. Brussels could not allow Britain free access to the ESM without abandoning its hallowed four freedoms of goods, services, capital and labour. But if Britain wants to continue in the single market it is going to have to accept EU regulations. This isn't going to happen. The European Court of Justice adjudicates on the rules of the single market and Britain has announced in the Great Repeal Bill (GRB) that it will no longer accept its jurisdiction. The GRB will cut and paste all the thousands of EU regulations and directives into British law just at the moment they cease to be any use.

The Bill made clear that all these repatriated EU laws will go to Westminster first and only then will Theresa May – using her autocratic “Henry VIII” powers – decide what is going to be distributed, like Maundy Money, to the grateful people of Scotland, Wales and Northern Ireland. At least that's now clear. Constitutional lawyers can stop writing articles about how, under the 1998 Scotland Act, everything that is not specifically reserved to Westminster, like defence and foreign affairs, goes automatically to the Scottish Parliament. That just ain't gonna happen.

The first priority will be to create a UK internal market to replace the EU single market we’ve just left, and that will need regulatory coherence across the whole of the UK. Trading standards have to be harmonised so that Scottish goods can be sold in England. Scotland will not have powers to set up its own arrangements, still less negotiate trade treaties with other countries. Just as the rules of the European single market were set by Brussels and the European Court of Justice, so the rules for UK single market will be set by Number 10 and the UK Supreme Court.

The Scottish Parliament will not get control of the £500 million or so in EU subsidies that comes to Scotland under farm support payments, except in the short term. Theresa May may grant some new powers to Holyrood over environmental matters, or workers' rights, but the cash will inevitably be controlled by Westminster and any new powers will only come, not as of right, but at the discretion of the UK Government. The United Kingdom intends to supplant the European Union as the fount of legitimacy for acts of the Scottish Parliament. The days when Holyrood served two masters, one in Westminster, the other in Brussels, are over.

Relations between Scotland and the rest of the UK will change radically now that the EU is out of the picture. Last week, Nicola Sturgeon, knees up on her sofa, politely requested that the Scottish Parliament's call for a referendum under Section 30 should be respected. Answer was there none. The UK intends to treat the Scottish Government with all the grace and flexibility it has shown so far in Brussels talks. The Welsh Government is furious, and so is Northern Ireland even though the Government there has collapsed. Britain is crashing out of Europe and into a diplomatic and trading limbo with the devolved governments in a state of open revolt. As Donald Tusk said: “There is no reason to punish Britain. Brexit is punishment enough.”