Morally correct and politically intelligent are directly opposed here.

They morally should put it back to the people as they've failed at it internally twice, but nobody seriously expects them to intentionally do it.

They could accidentally find themselves cornered into it if they can't pick a new leader

Historically in Westminster systems that hasn't actually been that unusual when the majority party has lost as much public trust as this one seems to have. At a certain point, presiding over an unpopular rump can be more damaging in the long term than letting go and regrouping.

That doesn't seem to be the way current conservative parties operate though.

Will they? No. But when the current government would surely lose an election is exactly when an election ought to be held, assuming the government is meant to reflect the will of the people.

Yep, looting the country for private gain as much as possible before they get kicked out seems a more logical course of action.

Some would suggest that has already happened and they would have got away with it if it wasnt for those pesky international financial markets trying to limit their exposure to the impacts.