Theresa May has been forced to admit Corbyn was right – and that she might not be around for much longer

One May ally told me this week: ‘Where a domestic narrative should have been, there was nothing. It’s not enough to say you’re just ‘getting on with the job’ of delivering Brexit’

Theresa May’s closing speech to the Conservative conference was better and bolder than her internal party critics had expected, a reminder that they underestimate her resilience when her back is to the wall.

In stark contrast to her nightmare speech a year ago, a confident prime minister answered head on the criticism she has no domestic agenda by trumpeting “the end of austerity” and promised more money would be pumped into public services.

The size of the cake will be announced by Philip Hammond in his Budget on 29 October; it will be shared between government departments in next year’s government-wide spending review. As a taster, May announced a big push for early diagnosis of cancer and, in a welcome and long overdue move, will allow councils to build more homes by borrowing against their housing assets.

May’s significant move on austerity is a tacit acceptance that Labour has won the argument, that the Tories’ spending straitjacket has been worn for too long. Labour will see it as an attempt to steal its clothes. Her promise to “fix” broken markets and make them work for ordinary people was her riposte to Labour’s successful pitch last week to the disenchanted “left behind”. Warning that Labour’s solutions would only hurt such people by wrecking the economy, she positioned the Tories in the mainstream centre-ground, with “the Jeremy Corbyn party" way out on the left wing.

However, there is a flaw in May’s strategy for getting the Tories back in the domestic game: where will the money for a public spending boost be found if the economy takes the hit from Brexit that many, including the Treasury, expect? Especially in the event of a no-deal exit, which May declined to rule out. Taxes and borrowing could play a part, but Brexit could impose severe limits. It might not feel like the end of austerity if public spending merely stands still, given the pressures on the NHS and social care caused by the demographic time bomb.

While May sketched out her “after Brexit” agenda, she could not escape her immediate problems on the EU, and they are mounting. It was noticeable that the word “Chequers” did not pass her lips, surely a recognition that she will have to amend her Brexit blueprint.

“Chequers” was a hate word at the Birmingham conference; it will have to be re-badged if it is to be “sold” to her party, even if some elements remain. Cabinet Brexiteers will next week try to push May towards a Canada-style free trade agreement with the EU, but her fresh ideas on customs would be more like a move towards a Norway-type arrangement. The DUP is rattling her cage again, and cannot be ignored. The EU will demand a new UK plan before its next summit in two weeks.

May sought to allay the fears of cabinet ministers worried that she is sleepwalking towards an accidental no-deal Brexit next March, conceding it “would be a bad outcome for the UK and the EU”. But she refused to rule it out if the EU offered an agreement that did not honour the 2016 referendum or forced the break up of the UK by carving off Northern Ireland.

Pleading with her fractious party to “come together”, she warned Eurosceptics that “if we all go off in different directions in pursuit of our own visions of the perfect Brexit, we risk ending up with no Brexit at all.” In other words, if parliament votes down her deal and blocks no-deal, Brexit might be scuppered by a referendum or general election. It is a message that Tory MPs will hear a thousand times from ministers and whips over the next few months.

On entering Downing Street, May told her aides she did not want to be “defined by Brexit”. But she, and the government machine, never found the capacity, energy or time to flesh out a domestic policy agenda to make good her 2016 pledge to tackle “burning injustice”. Her diagnosis of what caused the vote to leave the EU was right, but there was no cure as the government was consumed by Brexit. As one May ally told me this week: “Where a domestic narrative should have been, there was nothing. It’s not enough to say you’re just ‘getting on with the job of delivering Brexit.’”

Today’s speech was a belated attempt to catch up after more than two wasted years on the domestic front. It might not be too late for her party if it really ditches austerity. But it might be too late for May herself. At one point, she almost conceded the point. Reprising her 2016 pledges on becoming prime minister for an economy “with nowhere left behind” and “a country that works for everyone”, she added that this was “the future this party will deliver”. Not necessarily herself.

Despite the resilience May displayed today, some allies believe that, whatever the final act in Brexit drama, her party will force her to depart the stage next summer, before she can enjoy the fruits of ending austerity. Perhaps May’s political epitaph was always destined to be set in Brexit stone.