When Liz Truss scheduled her mini-Budget for the Friday before Labour conference, there was concern in Keir Starmer’s office. After months of meticulous planning, Starmer’s team feared the new Tory government would use their event to upstage his and distract from the party’s annual gathering in Liverpool. They were right to think that Kwasi Kwarteng’s statement would dominate the headlines; what they didn’t realise was that this would work entirely to their advantage.

The market chaos provided the perfect backdrop to Labour conference: it reinforced a belief that, after 12 years in the cold, Labour is finally on the cusp of power. They can now present the Tories as the dangerous, slightly mad radicals and pitch themselves as the sensible option. This week, YouGov reported that Labour had opened up a historic 17-point lead over the Tories. If this converts into votes in an election, it would mean a three-figure majority. ‘We’re so close,’ says a senior Labour politician. ‘We know we are nearly back in because Peter Mandelson came to conference,’ jokes another. The number of business attendees who flocked to Liverpool is a sign that Labour is being taken seriously. ‘They know which way the wind is blowing,’ says a party figure.

Starmer is now running as the strong-and-stable candidate. In his conference speech, he made a pitch to middle England: ‘God Save the King’ was played, a points-based immigration system was pledged (not more freedom-of-movement), and continuing support offered for Ukraine against Russia.

Crucially, his party is playing ball. The decision to kick off conference with the national anthem went off without a hitch (a lyrics sheet was supplied for the uninitiated). It’s a far cry from the scenes of civil war under Jeremy Corbyn. ‘There is peace and harmony in the Labour party. Who would have thought it?’ asks one party aide. At various drinks parties, aides were animated and optimistic. ‘It’s the first time in ten years that we have stopped fighting,’ says a Starmer adviser.

The process to stabilise the party seems to be working. At last year’s Labour conference, rules were pushed through which strengthened the hands of the moderates and reduced the power of the far left, who are now back on the fringes. The joke at conference is that the grassroots pro-Corbyn group Momentum ought to be hauled up under the trade descriptions act and renamed Inertia.

Rachel Reeves, the shadow chancellor, has been busy making overtures to business in recent months, but the market reaction to Trussonomics means there is now a chance to step that up a gear. ‘We’ve already done a lot, but now business really doesn’t have a home with the Tories,’ says a party figure. In the coming months, Labour will try to contrast Reeves’s credentials as an economist who is committed to financial institutions against her new opposite number Kwarteng, whom they wish to label as lazy and chaotic.

Yet there is still some unease in the party. Shadow cabinet members privately complain that Starmer is too dull, lacks a clear vision and can be too cautious. His plan to renationalise railways is giving his MPs hope that this could be changing. With his new poll lead, there is increasing debate as to whether this means Starmer ought to play it safe – or go all out and promise his own brand of radicalism. Andy Burnham, the Manchester mayor, has called on Starmer to show more fight.

For all the excitement, then, there are plenty of nerves. This Labour party has faced so much disappointment in recent years that nobody wants to get their hopes up. ‘We were ten points ahead with Ed [Miliband] but it didn’t happen,’ says one seasoned adviser. ‘There’s always a worry history could repeat itself.’ ‘We’ve detoxified and we’re ahead, and the Tories are in a complete mess right now, but what happens if that changes?’ asks one aide. The concern is that the polls reflect the response to the government’s failings more than to Starmer’s vision. But if the Conservatives remain chaotic, Labour believe they will be back in power after over a decade in the wilderness – and with a majority. What they will inherit is another matter altogether.