“There will be more political shocks,” Nigel Farage said after his pal Donald Trump won power. But the latest earthquake to shake the political system is not quite what Farage had in mind.

The Liberal Democrats’ spectacular victory in the Richmond Park by-election offers a precious ray of hope for centre-left parties that our fluid new politics might sometimes work to their advantage. Why should the right have all the fun?

Sarah Olney, the victorious Lib Dem candidate, claimed: “It does look now as if we can have a vote in Parliament that might override the referendum.” I doubt that. Richmond won’t stop Brexit. But it might stop the hard Brexit favoured by Tory Europhobes and Farage. According to the Lib Dems, a third of Tory supporters who voted Leave in Richmond in June backed the Lib Dems on Thursday. Theresa May would be wise to take note; the public appetite for hard Brexit may be limited.

Olney’s victory over Zac Goldsmith, the former Conservative MP turned independent who had Ukip’s backing, also marks the moment when Labour supporters held their nose and (just about) forgave the Lib Dems for hopping into their Coalition bed with the Tories.

Lib Dem beats Zac Goldsmith in Richmond Park by-election shock

Jeremy Corbyn should now follow suit. Labour’s high command blocked moves by some local members in Richmond to stand aside for the Lib Dems. The result was a humiliating 1,515 votes for Labour and a lost deposit. Despite Labour’s absence, there was a mini progressive alliance: the Greens did not run, and rallied behind the Lib Dems. Just as well, as the Greens won 6 per cent of the votes (3,548) at last year’s general election.

Some Labour members secretly helped the Lib Dems on polling day. And a grassroots campaign for an anti-Tory alliance, to be launched formally in the New Year, probably made a difference on the ground. “The Tories, Ukip and the candidate they supported lost because progressive parties and people worked together. If it can happen in Richmond it can happen everywhere,” said Neal Lawson, the chair of Compass, the pressure group behind the progressive alliance.

The Richmond result will encourage stirrings already happening on the ground. South West Surrey Constituency Labour Party has voted for a progressive alliance, while the Lib Dems and Greens are backing the Labour candidate in a council by-election in Tonbridge and Malling this month.

The Labour leadership might frown on such cooperation, but in Richmond voters took matters into their own hands. Labour will fear being squeezed if Brexit becomes the new dividing line, and leaves it sitting on the fence while the Tories and Lib Dems are on either side. Corbyn will not want the Lib Dems to emerge as the main challenger to the Tories in the south. But that is the reality now that Tim Farron’s party is back in business. It raises the grim prospect of Labour being squeezed in both the South and North, where Ukip threatens to eat into Labour’s traditional working class vote and form an unofficial regressive alliance with the Tories. Labour has already lost Scotland and will not recover there anytime soon.

All this should persuade Labour to allow local pacts with the Lib Dems and Greens, perhaps through local primaries to choose the candidate, or local deals on seats rather than a carve-up imposed by national HQs. Although he advocates a new politics, Corbyn is not persuaded, or ready to forgive and forget. “The Lib Dems are collaborators who gave us Tory austerity,” one ally told me.

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Yet opinion among Labour MPs and party members is changing, slowly. There is growing support for proportional representation. But that won’t happen under Tory rule and so Labour needs to get into power under first-past-the-post. Why not let the Lib Dems take revenge on the Tories in the South West, where many Tory majorities over the Lib Dems last year were smaller than the Labour vote?

Clive Lewis, the shadow Business Secretary and a Corbyn loyalist, told a debate at Nuffield College, Oxford, last month that the Tories were “the masters of gaming” the voting system and the left now had to do the same. “We have to start thinking how the centre, progressive parties of this country can form enough of an electoral working pact to be able keep the Tories out… and form, if necessary, a Labour-led coalition government.”

Despite Ed Miliband’s battering at last year’s election over a possible deal with the SNP, Lewis said the party should potentially be part of the alliance. He said: “We have got to be pragmatic and realistic. If we don’t, then I think we are looking potentially at decades of Tory rule. The 21st century will be the century of the Tories.”