As a foot soldier in the Labour Party, Peter Chowney is a veteran of the doorstop pitch. But he often had to bite his tongue when the party, founded in 1900 to represent Britain’s industrial working classes, rebranded itself as New Labour and embraced global capitalism under Tony Blair, a thrice-elected prime minister.

Come election time, Mr. Chowney, a district councilor, canvasses for Labour in this seaside town. This year, it was his turn to stand as the candidate for Parliament. And this time he was pounding the pavement not to defend capitalist inequities but to denounce them as Labour vowed to hike taxes on the wealthy to fund public services, end university tuition fees, and nationalize private utilities, a repudiation of the center-left Blair consensus.

Chowney, an old-school leftist, was delighted. “This was the first time I actually got out with a Labour manifesto that I fully supported. Every other time it was a compromise,” he says.

He came within a whisker of taking this seat from the ruling Conservative Party on June 8. Elsewhere it was a night of humiliation for Prime Minister Theresa May, who had called a snap election in hope of building an unassailable majority ahead of crucial Brexit negotiations. Instead, she limped back into office in coalition with a Northern Ireland party, while Labour, which ran second, all but erupted in a victory dance.

Curiously, the party that actually won – Ms. May’s Conservatives – felt like it had lost, and vice versa.

Kevin Coombs/Reuters Labour supporters Wendy May and Councillor Nigel Sinden collect electoral registration numbers outside a polling station in Hastings, Britain June 8, 2017.

That Labour is now seen as a government-in-waiting is a vindication for Jeremy Corbyn, its leader. A soft-spoken socialist whose politics are steeped in cold war-era anti-Americanism, Mr. Corbyn has become wildly popular among young voters hungry for a left-wing alternative to Conservative cutbacks, market reforms, and deregulation.

Not long ago, Corbyn’s calls for economic redistribution were seen by many within his own party as a liability, a socialist fantasy for the few. But the political volatility unleashed by recession and austerity, declining party loyalties and class-based voting, and two polarizing referenda in Scotland and Britain have scrambled the electoral compass to the point where a decisive shift to the left seems possible, even probable, in a bastion of Anglo-Saxon capitalism.

“Corbyn has shown that running on a more left-wing program doesn’t mean being annihilated,” says Patrick Diamond, a former policy adviser to Mr. Blair and Gordon Brown, his successor. “The big change that has taken place [since the recession] is that people no longer accept that the market economy is functioning as it should do.”

Yet that same volatility also makes it hard to judge what voters actually want, says Neal Lawson, who runs Compass, a left-wing advocacy group. He points to the rise and fall of the anti-Europe UK Independence Party (UKIP), which tapped populist frustrations on the left and right.

Voters “are like swallows,” he says. “People are looking for answers and they’ll keep looking for answers. When something like UKIP or Jeremy Corbyn comes along they’ll jump on it for a while. But then they’ll jump off.”

A divided party

Corbyn’s unlikely ascent parallels that of US Sen. Bernie Sanders, another elder voice on the leftist fringe whose plainspoken authenticity and distance from party power centers enraptured younger voters. Like Senator Sanders, Corbyn is a longtime lawmaker who seems to mark progress less by the laws he helps pass than by the principled causes he supports. That combination of Corbyn-the-outsider and a pledge to cut student debt proved potent in towns and cities popular with young people.

But the party’s platform was less persuasive in some traditional Labour seats in the North and Midlands, where industrial employment has been hollowed out by free trade and technology. Older voters also remember Labour’s tumultuous rule in the late 1970s, when Britain’s economy seemed to shudder to a halt amid ruinous labor strikes.

Without a strong turnout next time in these communities, Labour’s chance of taking back power start to recede. “It needs to get older working-class men who are not impressed by [ending] tuition fees and Jeremy Corbyn,” says Steven Fielding, a politics professor at Nottingham University who studies the Labour Party.

Working-class Labour supporters are also leery of Corbyn’s pacifism and sympathies for groups like Hamas. These voters consider themselves patriots and likely backed Brexit, as much out of frustration with inequality in Britain as any deep-seated Euroskepticism, says Mr. Denham, who directs the Center for English Identity and Politics at the University of Winchester.

“They say Labour used to stand for people like me. This is the great challenge for the party,” he says.

Analysts caution against drawing firm conclusions from a short, intense election campaign marked by repeated Conservative missteps and two major terrorist attacks. A vote for Labour was a protest against the Conservatives who nearly all polls predicted would win an outright majority, as much as an endorsement of Corbyn’s left-wing agenda, they note.

“I think we need to see another election before we can talk about [pro-Labour] realignment,” says Professor Fielding.

A changing seaside

Since 1997, Hastings and Rye has been an election bellwether, siding each time with the winning party (it also voted for Brexit). Its MP is Amber Rudd, the Home Secretary; had she lost in June she would have been Labour’s most important scalp.

Hastings is the site of the Norman conquest of Britain in 1066. The ruins of the castle built by the invaders on the rocky headland still stands. Small fishing boats launch daily from a pebbled beach, land that was granted in perpetuity to the fishermen and their descendants by Elizabeth I, apparently for help in restocking ships fighting the Spanish Armada.

Luke MacGregor/Reuters/file People walk on the newly re-opened pier at Hastings in southeast England May 9, 2016.

Furious about EU fishing quotas and the Dutch and Spanish trawlers that ply these shores, the fishermen are vocal Brexit supporters. Some are former Labour voters who switched to UKIP. For them, the pledges of Labour’s manifesto are nothing without an end to EU quotas.

“I want a fishery out here that will be here for my grandchildren when I’m gone. That’s what we all want,” says Dean Adams, a boat-owner who voted Conservative because he wanted a so-called “hard Brexit.”

The town still has pockets of intergenerational poverty, drug addiction, and petty crime; it is considered the most deprived town in southeast England, the richest region of Britain. In Chowney’s ward, his main challenge at election time is apathy and alienation among likely Labour voters.

But Hastings also shows the emerging strength of progressive politics. In the last decade, the town of 92,000 has been reshaped by transplants from London, 90 minutes away by train. Many newcomers are young middle-class families priced out of London’s real estate and drawn by Hastings’ bohemia and bonhomie, the chance to telecommute and dabble in creative industries.

Three weeks after the vote, Corbyn staged a noisy rally on the seafront, drawing thousands of fans, as part of a summer-long roadshow of vulnerable Conservative-held seats.

Post-election surveys found that Labour’s support surged not just among college-aged voters, who were wooed by tuition-fee cuts, but also among those aged 25 to 44, particularly those who attended university. Votes came from party switching as well as first-time or lapsed voters, after a low turnout by pro-European youth in the 2016 Brexit referendum.

That this generation, which has lived through a major recession and is less likely than their parents to be homeowners, is receptive to redistributive policies isn’t surprising, says Mr. Lawson. “If capitalism isn’t delivering what it’s supposed to deliver for people in the form of consumer goodies ... then people are going to start to look around for answers.”

An annual survey of British voters shows support for this shift. Nearly half of respondents, the highest level in more than a decade, said taxes should be raised in order to spend more on health, education, and welfare. The survey, which was conducted in late 2016 and released in June, also found higher support for redistributing income to the needy: 42 percent said the government should redistribute to the needy, up from 34 percent in 2006.

A better way to tackle inequality

Mel Elliott moved here with her family from London five years ago. An artist and illustrator, she sells her products and those of other artists online and in her shop-cum-studio called “I Love Mel” that she opened last year.

Until last year, she considered herself an independent. She voted Labour or Liberal Democrat, but wasn’t passionate about politics. That changed with Brexit. Like many who favored staying in Europe, she hadn’t imagined that Britain would vote to leave the world’s largest trading bloc. “I didn’t take it too seriously because I thought that we were going to win,” she says.

The charged Brexit debate – Ms. Elliott says she no longer speaks to her father, a Brexit supporter – led her to rethink her assumptions. She began listening to Corbyn and his attacks on austerity and proposals to tackle economic inequality. “It just kind of happened. I got passionate.”

By the time this year’s election came around, Elliott was ready. She began printing large format posters by fellow artists, mostly anti-Conservative – “Open Your Eyes To The Tory Lies” around a black-and-white eye – and pro-Corbyn messages, and handing them out from her store. The posters began appearing in windows all over town, so Elliott cranked out more.

“For the first time in a long time we found someone who seems genuine. When he’s being questioned, [Corbyn] answers without a script,” she says. As an entrepreneur, she says higher taxes and minimum wages would be a fair way to tackle inequality. “I don’t have a problem with that.”

Mr. Diamond argues that Labour has two possible paths to victory. He calls the first the “Bernie Sanders” approach: doubling down on Corbyn’s pitch to middle-class progressives, idealistic cash-strapped youth, and the poor in seats like Hastings.

The other, he writes in a coauthored report for the Policy Network, a Labour-aligned think tank, is to refine the party’s platform to reach out to working-class households that feel pinched by stagnant wages and blame globalization and immigration. This requires firm stances on crime and immigration – a flashpoint for Brexit campaigners – as well as economic justice.

Just as the US Democratic Party has struggled to hold onto working-class votes in the Rustbelt as its urban progressive base grows ever larger, Labour needs to work harder to bridge these groups, says Diamond. “Labour is a very broad coalition,” he says.

But he admits that overly cautious electoral calculations could backfire in a populist climate where authenticity trumps triangulation. Even if voters don’t agree with everything that Corbyn says, he is often credited for saying what he believes.

'We can win next time'

On election night in Hastings, the vote was so close that Chowney asked for a recount. Rudd, the incumbent, was defending a majority in 2015 of nearly 5,000 votes. Both main parties had increased their vote. But Labour saw the biggest gain, up 41 percent, as youth turnout surged.

Finally, the council official in charge of the vote called the candidates into a back room. The recount was over, she told them: Rudd had 25,668 votes, 346 more than Chowney.

Also in the room was Nicholas Wilson, an anticorruption campaigner who stood as an independent, mostly to attack Rudd publicly over what he called improper dealings with bankers.

Chowney looked at Mr. Wilson, whom he knew as a longtime Labour activist in Hastings. Wilson looked at the vote tally. He had got 412 votes, just enough to elect Chowney. Then, says Chowney, Wilson turned and ran from the room before the votes could be announced in public.

“Nobody has seen him since,” he says, laughing at the memory.

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(Via Twitter, Wilson has rejected that he cost Labour the seat, arguing that his priority is fighting corruption.)

Two days after the election, Elliott registered as a Labour member. She wants to get more involved in campaigns and making sure that voters stay engaged. “I thought, you know what? We can win next time. And we need to win it.”