We live in extraordinary times. The latest YouGov opinion poll shows Labour a full 8% ahead of the Tories, when only a couple of months ago Jeremy Corbyn trailed Theresa May by 20%. The Labour leader has become a media sensation, following his Glastonbury outing, and taken to touring the country on a “permanent election campaign”, rather as Nicola Sturgeon did after the independence referendum – remember her packing the Glasgow Hydro faster than Beyonce.

Of course, this kind of popularity can be transient, as the First Minister has discovered. Nevertheless, there's clearly something going on in the undergrowth of British politics, and it is more than just about Theresa May's inability to connect with voters, following her wheat field revelations. The explosion in support for Labour – party membership has doubled - signifies a generational change in British politics, one that may have been prefigured in the success of the Yes Scotland campaign in 2014.

The neo-liberal, pro-market certainties of the last forty years are being questioned, in much the same way that the Keynesian, post-war consensus was challenged after Margaret Thatcher was elected in 1979, following the industrial unrest of the Winter of Discontent. Brexit has been a similar catalyst for change. The chaotic negotiations over Britain's departure from the European Union have exposed the weakness of the UK economy - the longest productivity and wages down-turn in over a century. Grenfell Tower is a charred monument to the folly of Conservative deregulation, and the neglect of social housing since Margaret Thatcher started selling off the council housing stock at scandalous discounts.

Younger voters in particular are turning to Labour in large numbers as they discover that voting in elections can actually make a difference. Since the June election deprived Theresa May of her Commons majority, they've noted the change in tone of senior Tory cabinet ministers like Damian Green, who's called for a national debate on university tuition fees. “If young people feel the world is not giving them an even break”, he said recently, in a rare bout of clarity, “they look for radical change”. In other words: the Tories had better start doing something about the “lost” generation or they might see Jeremy Corbyn in Number Ten.

It is a tribute to the foresight of the former SNP leader, Alex Salmond, who understood the significance of the abandonment of free higher education in England. “Rocks will melt in the sun” he said in 2011, before any SNP government reintroduced tuition fees. Now, students in England are in revolt as they graduate with life-altering debts of £50,000, which, from September, will start rising by up to 6.1% a year. Meanwhile, home ownership has become a remote dream for those who lack any housing equity, and insecurity has become the defining feature of the British employment market.

But this isn't just an issue of inter-generational inequality; it is the final nail in the coffin of an essentially Conservative, free market mindset that has dominated politics, Labour and Tory, for decades. The idea that the management of the economy can be compared to household budgeting, “living within our means”, was always misconceived. If governments really did “balance the books” the economy would seize up completely.

Now the talk is all about how to create growth in the economy, and even Theresa May has accepted the role of the state in addressing “burning injustice” in society. Mind you the ideological conversion of the Conservative leader to the active state is probably less to do with intellectual conviction and more to do with electoral reality. Put simply, voters are demanding a better deal, and they're prepared to support Jeremy Corbyn, for all the tabloid scare stories about him, in order to get it.

Of course, the Tories are still in power in Westminster, and Theresa May is still paying lip service to the dogmas of austerity economics. But the illusion of certainty has gone. Tory ministers, like the Health Secretary, Jeremy Hunt and the Education Secretary, Christine Greening, have been calling openly for spending constraints to be eased. Potential leadership contenders, like Boris Johnson and Michael Gove, sensing the way the wind is blowing, have been calling for the public sector pay cap to be lifted. Theresa May seems to believe her “magic money tree” is only to be used for buying the votes of the Democratic Ulster Unionists, but voters are clear that they want some of the fruit too.

This dramatic change in the political landscape in the UK has also altered the political terms of trade in Scotland. The days when the SNP could comfortably assume the mantle of social democratic radicalism simply by pointing to the excesses of Blairism in the Labour Party are gone. New Labour is suddenly Old Labour. Corbyn has demonstrated that left wing policies like nationalisation and higher taxation, which most Labour MPs thought were electorally unsaleable, are actually rather popular.

The latest opinion polls hold a warning to the Scottish National Party. The Scottish subsamples of a number of recent polls show the SNP in second place to Labour. These are not full scale opinion polls and are subject to large margins of error, but they suggest that the drift back to Labour in Scotland, evident in the June election, is continuing.

The SNP are understandably miffed that Kezia Dugdale, who was no supporter of Jeremy Corbyn's leadership, is benefitting from the Corbyn effect. Nicola Sturgeon rightly says that she has been arguing against austerity for years, and that the SNP has shown its social democratic credentials by abolishing prescription charges, tuition fees and privatisation in the NHS. But politics never stands still. The First Minister's miscalculation over support for indyref 2 has put her administration firmly on the back foot. Now Labour in Scotland has proposed a radical industrial strategy including £20bn for a Scottish investment bank, investment in renewables and a £10 minimum wage.

The Scottish government says, with some justification, that these costly policies are easy to propose, harder to implement, given Holyrood's borrowing constraints. They also point out that Labour actually opposed the devolution of the minimum wage as recently as 2016. But the pressure will only increase on the Scottish government to devise a more radical agenda on welfare and industrial development now that it has acquired powers to vary income tax at all levels.

Nicola Sturgeon is caught in a vice of her own making: she accepted the terms of the 2016 Scotland Act, giving Holyrood increased responsibility for social welfare without the means to finance it, since most taxes like National Insurance and wealth taxes have not been devolved. Labour will say she should use whatever tax powers are at her disposal, even if that means increasing income tax.

The Scottish government has been congratulating itself this week for its sound economic management, following the discovery that the Scottish economy is doing less bad than most of the rest of the UK. But it needs to be careful here because we keep being told that the Scottish government does not have any real control over the economic levers. The SNP can't have it both ways: taking credit for good news and blaming Westminster for bad. Nicola Sturgeon needs to get on top of events, stop reacting, and rediscover her radicalism. Now that ScotRef is shelved, the FM faces a hard task: explaining what the SNP is for when independence is off the ageda.