Insecurity is fuel for the far right's hate

English Defence League members demonstrated in Bolton's Victoria Square at a
Unite Against Fascism rally in 2010. Photograph: Christopher Furlong/Getty Images

Britain has resisted the far right but studies suggest cuts will harden attitudes. All parties need to rethink

A century of democratic politics teaches that economics and identity are the two most compelling calls to action. Their interplay can produce a dangerous brew. As Britain contemplates a parliament of austerity, we need to understand what makes for the politics of division, and fight it.

Compared to some other European countries, we in the UK can consider ourselves relatively lucky in our experience of extremist politics. There have been hard-fought battles. But serious extremist parties have not got a grip. However, research published...on behalf of the Searchlight Educational Trust shows how people can become lured towards more aggressive forms of identity politics. It shows we can't complacently assume we are exceptional in the European context. We are not.

Searchlight has been at the forefront of beating back the National Front and the BNP since the 1970s. But if the emotional extremism of the far right we have so far seen blends into something more calculating and more credible, then this run of marginalised extremism may become more difficult to sustain.

Groups like the BNP, the English Defence League and Islam4UK are only ever likely to appeal to a small minority: their violent rhetoric, aggression and warped politics provide the source of their downfall. But we should not understate their impact locally in creating a climate of division, fear and hatred. We have seen this in Leicester, Bradford, Barking and Dagenham, and Luton; areas where the pride and security of the industrial age has been replaced by a casualised economics of the rapidly shifting global age, and which have had high levels of immigration. That is why we need to build the resilience of local communities to reject the politics of hatred. A common life forged between different cultures with the same anxieties, hopes and pride is the most effective backstop against extremism.

We need a demanding pluralism with a common core of shared values. And what's more, people believe that such local community building is an effective bulwark against discord.

The Searchlight research has broken down attitudes to race, identity, immigration and nation into six groups. On the left are "confident multiculturals" and "mainstream liberals", comprising 24% of the population. On the far right sit "latent hostiles" and "active enmity" (totalling 23%), who share antagonistic attitudes to others and differ only in the degree of their antipathy and tolerance of extremism.

The centre of British politics are the "identity ambivalents" and "cultural integrationists". Cultural integrationists accept diversity as long as there is an integrated national culture, the rule of law, and respect for authority. This is the group to which David Cameron's call for a "muscular liberalism" is targeted. They are a quarter of the population. But the real swing voters are identity ambivalents (28%): economically insecure, worried about their local community, feeling threatened but open-minded and accepting of diversity – as long as their security is not threatened. So they feel more wage and job pressure from immigration, are anxious about their family's financial future, but are, for example, much less likely to think "Muslims create problems in the UK" than cultural integrationists.

Labour's vote is more weighted towards this group than any other. More black and ethnic minority voters are to be found here, and almost half of people who don't identify with a party are also identity ambivalent. And this is why the economics of austerity and fiscal consolidation is so dangerous. A long period of low wages, casualisation of work, unemployment, higher prices, fiscal cuts (many are receiving tax credits), and VAT and fuel duty increases will refract into greater identity anxiety.

Cameron's "muscular liberalism" has little to offer in giving identity ambivalents the greater sense of security they crave. The risk is that significant numbers in this group leapfrog to latent hostility or active enmity.

If Conservative rhetoric and coalition economics are an insufficient response, then what of Labour? This group is vital territory for Labour. Identity and economics are bound tightly together. A convincing economic response is necessary but not sufficient. An authentic sense of identity is just as important. Labour's politics must be suffused with both cultural understanding and meaning and a pragmatic economic mission.

Otherwise, the as yet unformed and unidentified party of English or British nationalism could begin to fill the space. The political mainstream needs more convincing responses – and fast.

David Miliband at Comment is free