The battle over Brexit is so much bigger than the question of Britain’s membership of the European Union. And it’s certainly become bigger than the 40-years-long internal battle within the Conservative Party.

What’s become painfully obvious since the referendum, if not before, is that this is a battle over what sort of country we want to be – and arguably what sort of world we want to shape.

It’s partly an old battle over the economic model: real-life concerns over income and wealth distribution interspersed with increasing distrust of big money and corporates.

But it’s much more. It is about identity and culture. Polls now show many people willing to make economic sacrifices, if they can find a greater sense of control of their lives and communities.

Alarmingly, this national populism has gone global – as these trends infecting the UK are felt far and wide, from Trump to Brazil’s Bolsonaro, from Hungary’s Orban to Italy’s Salvini. Such political shifts can’t be dismissed as temporary blips.

For liberals – whether you’re a Liberal Democrat or just liberally minded – this battle is particularly challenging. It could easily turn out to be an existential threat to the world we had thought was being painstakingly built. And pointing to offsetting liberal victories – like the electoral success of President Macron or Justin Trudeau – no longer feels so comforting.

The question is: how to respond?

The right have predictably responded by embracing the shift – whether it’s Brexit, anti-immigration or the pretence that the UK can return to some glorious past. While the liberal and commercial traditions in modern Conservatism are increasingly uncomfortable, few have had the self-confidence to resist their party’s new populist nationalism.

The left’s answer is equally confused and unconvincing. Options range from a full-throated embrace of state socialism to a re-heating of a social democracy that’s failed to work in the rest of Europe against this populist onslaught. Perhaps a Tom Watson-led breakaway may turn out more convincing than the Independent Group have to date, but so far the Labour Party has struggled even more than the Tories to respond.

Not that Liberals have fared any better. While the Liberal Democrats have called the “big issues” of the last 15 years right – from Iraq to Brexit – we’ve gone backwards in popular support. Weakened electorally, Liberal Democrats and liberals internationally have yet to develop a convincing strategy.

But one is surely possible. Liberalism has been the most enduring political philosophy of the modern era, and it ain’t going away.

To get back in the game, we’ve got to recognise that the divisions exposed by Brexit and the rise of national populism have been there for decades. Education divisions, where far too many children don’t get an equal chance in life. Economic divisions, where grinding poverty leaves families feeling forgotten and left behind. Political divisions, where the London powerful don’t seem to care about the rest of the country.

And we have to have the honesty to admit our part in the failure to address such longstanding divisions. On immigration, for example, we have to recognise that by failing to address illegal immigration, governments have undermined the willingness of some people to accept legal immigration.

Finally, we need to recognise the challenge of political dialogue in the age of Twitter, Facebook and fake news. Reasoned debate is no longer fashionable. Evidence and experts are dirty words. Co-operation and compromise are seen as weak. In other words, Liberalism’s traditional weapons have been blunted.

Yet paradoxically, my sense is that only liberalism remains capable of pushing back this illiberal tide.

If we can marshal our instinctive optimism and hope in ways that answers people’s fears, then we can successfully defend progress – and take it to another level.

Opportunity has to be at the heart – with education and training. Yet this age-old liberal offer has to come with huge resources and an unstinting focus on the children, young people and adults who currently get the worst deal. And above all, we need education that engages young people, that’s shaped to their hopes and aspirations, not to the prejudices of the Daily Telegraph and Michael Gove.

And liberals have to embrace the emotions of voters. Why did Remain fight the referendum just on reason, when it was obvious Leave had no such intention? Why didn’t Remain even try to make an argument based on stopping wars? When we allow the populists to appear to have the monopoly over caring, we lose.

Above all, we have to describe a different economic and political model – where people know they are valued and listened to.

Liberal thought overflows with practical options – and many political leaders around the world are experimenting. From enabling mutual models to operate in our utility sectors, from energy to railways, to helping local people get involved in decision-making power between elections, not just at them. From taxing land not income, to electoral reform and rebuilding local democracy.

And I think an environmental agenda should not be dismissed as a middle class obsession, given its relevance to the health and jobs agendas.

From air pollution to sustainable, quality food, a full blown green health agenda could be very popular.

Liberal Democrats can already point to thousands of jobs created through our policies on renewable power – not least Britain’s global leadership in offshore wind and new factories in places like Hull and Grimsby.

The prize now is to accelerate action on climate change – by reforming the City of London and Britain’s whole financial sector. If we force them by law to factor in climate risk, we can mobilise levels of job-rich green investment across Britain’s regions at an unprecedented scale.

If liberal ideas can once again reach out to all parts of our country – if they can offer solutions to divisions and hope to the disillusioned – we can become an open, tolerant and united country again.

Ed Davey is Liberal Democrat home affairs spokesperson and MP for Kingston and Surbiton.