It's none of my business since I'm not British but I have to say this seems sensible to me, coming as it does from a party with a strong Remainer constituency. (I am guessing it will be widely mocked though.)
You surely can't remain in the EU without a referendum & there needs to be a sensible leave choice on the ballot. No deal is a very bad leave option for the UK that no responsible politician should advocate.
It'd even be bad for Leavers since it'd completely discredit their cause if it actually happened....thus making it more likely that the UK would eventually rejoin. If the UK even survived.
And revoking without a referendum, or revoking after a referendum that had been rigged by not including a sensible leave option, isn't something that Remainers should want either since it would keep the Leave cause alive and angry.
So you need a no-no-deal leave option, and in the actually existing real world that inevitably means the Withdrawal Agreement (or something almost identical to it) and the same or a new Political Declaration. Enough with the fairy tales already. People deserve better than that.
And a new PD could be agreed very quickly so long as the EU didn't have to worry about unfair competition arising from the UK undercutting its labour and environmental standards, etc. So no problems there.
So long as Labour didn't go mad (I realize that may be an over-optimistic assumption), arguing for a say over EU trade policy and the like, it could be done in a few weeks.
So long as Parliament approved the deal you could have the referendum -- which is what Remainers say they want -- quite quickly, within a year anyway. But from a Leaver perspective there is no reason why Leave shouldn't win again.
In that case the UK would leave but in an orderly manner that saved jobs and preserved the Union. And there would hopefully be closure.

Or maybe Remain would win with a sufficiently large majority that there might be closure that way also.
(A narrow Remain victory might be a different matter I have to admit.)
The process by which Labour has gotten to this position may have been pusillanimous in the extreme, but as Adam Smith might have said 'tis not from the benevolence of the politician etc. etc.
Finally, am happy to admit that as an outsider I may have this all wrong!
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