After the disaster of Crewe, the time is ripe for a different philosophical narrative, one that moves away from atavistic class-based rhetoric, and one which reaches well beyond Labour’s traditional core vote. ‘Things can only get better’ needs to be reclaimed by the party that once made it their mantra.

This is set against a background of growing rapprochement between the Tories and Lib Dems. Recent polls suggest a landslide to the Conservatives rather than a hung parliament if a general election were called tomorrow. But should Labour regain over the coming two years any of the territory we have lost we will need to confront the very real possibility of a coalition between these two parties. Philip Collins hints in this month’s Prospect at the two parties’ overlapping conceptions of liberalism. A recent article by the Lib Dem think tank Centre Forum argued that Liberals should be thinking about coalition not only for strategic reasons, but also because in many areas of ideology and policy the Lib Dems and ‘New Tories’ are singing from the same hymn sheet.

Labour’s conception of liberalism has the potential to be far more substantial, and far more sustainable, than the competing visions of its rivals. A good place to start would be for Labour to reaffirm its support for the enabling state, to contest the Tory assumption that giving increased prominence to non-governmental bodies such as charities will make up for a welfare system denuded of investment.

The Labour movement has a long history of engagement with liberalism. Collins discusses the importance of liberals to early British socialism; since then the directions of both movements have regularly overlapped. This has often resulted in tension. Witness the continuing hostility of many in the party to the idea of a Lib-Lab pact.

But Labour’s relationship with liberalism has also been positive. We can see it today in the traces of Keynesianism among the technocrats that Collins takes to task. And we see it in the current backbench disquiet over civil liberties issues. Nowadays, the most widely held nostrums on the left of the party are liberal as well as socialist.

So this has always been a broad parliamentary coalition. But our task today will only be made harder by basing it around a false dichotomy between statists and liberals. Sunder Katwala of the Fabian Society last week defended his organisation against Collins’ charge that Fabian trust in central government had ‘poisoned the well’ of Labour thinking. Since many people have dual political personalities that favour individual success even as they oppose inequality, both these sides will have something to add. A constructive debate will bring out Labour’s unique ability to protect and extend citizens’ social, economic and political liberties. A constructive debate will allow us to challenge our rivals to a battle of ideas that will give confused voters a new sense of what New Labour is about.

This should be a struggle for the soul of British liberalism, not over ownership of the Labour party. And it should be a struggle based in values as much as in policy. Our aim must always be both to enlarge the freedom of the individual and to enact progressive structural reform. Such an approach will allow Labour to underline the achievements of its eleven years in power. It will allow the government to sing the praises of civil partnerships; devolution in Wales, Scotland and Northern Ireland; the move towards House of Lords reform; and Gordon Brown’s constitutional reform package. These were all standard liberal demands, even if in each of these policy areas, Labour didn’t quite go far enough.

In the economic and social sphere Labour can point to the minimum wage, working family tax credits and a vast investment in education and health as some examples of how the last eleven years have enabled millions of people to be free from want, and sickness, and unemployment. But social mobility is atrophying, the gap between rich and poor still increasing, and the NHS has a very long way to go. So reform must continue.

The party also needs to regain the ground it has lost. ‘New localism’ was once a New Labour watchword, so why is it that the Tories and Lib Dems now make the strongest case for decentralisation? The concept does not belong to any one party; as Philip Collins’ article demonstrates, devolving political power fits snugly with Labour’s ‘federalist’ tradition. And the public is suspicious of the government’s authoritarian tendencies, deriving largely from its unwavering stance on ID cards and detention without charge

Gordon Brown knows that big ideas are what matter in politics, and that studying the history of political ideas does much to illuminate the present. His doctoral dissertation was on the Scottish socialist James Maxton, although his own political trajectory has arguably taken him from socialism to free-market liberalism. A glance at the Labour party’s twentieth-century history reveals a gentler strand of liberalism waiting to be reclaimed. The prime minister and his government would be wise to take advantage of a narrative that is rightfully theirs, while they still enjoy the liberty to do so.