If there was anything memorable about the recent "leaked Blair email" (self-evidently not written by Tony Blair, but presumably the work of a disciple), it was the anachronistic character of its argument. "The choice," it declared, in the geeky shorthand of the policy wonk, "is and was always between GB running as the change candidate or as continuity NL [new Labour]."

The idea that simply carrying on with new Labour à la Blair might ever have been an option is nonsense. To embrace "continuity NL" would be to embrace the past and the worn-out: those ideas have been a liability for years and the only power they still have is to damage Labour in the way that "continuity Thatcher" ravaged the Tory party. Wherever we see evidence of that "NL" approach now - 42-day detention is a case in point, being just the sort of shabby, outflanking manoeuvre that used to delight Blair - the results are miserable. Nobody buys it any more.

Change was the only possibility, and the pity is that there has not been enough of it. Gordon Brown stands condemned by voters, not for his radicalism, imagination and sense of mission, but for failing to demonstrate those things. He has been timid and allowed too much continuity.

As the Labour leadership reviews its options this summer, it must know that there is little to be lost now, and there may be much to be gained, by being bold. One benign effect of difficult economic times has been that they have focused the minds of voters on problems that should always be central to Labour's concerns but which were thought to offer little electoral advantage in the "NL" years: problems of poverty, inequality and social mobility.

The facts are familiar: the number of children officially deemed to be living in poverty is rising again after years of decline, and may soon touch three million; 2.5 million pensioners are officially in poverty, too, a tally that is also edging upwards. Overall, the poorest 20 per cent of the population actually saw their incomes fall last year, at a time when the economy was healthier than it is now. As energy and food prices rise, there must be increasing concern about how these people will cope.

Meanwhile, the richest 20 per cent get richer, now scooping up a remarkable 42.5 per cent of the national income. The gap between rich and poor is at its widest in 50 years, and is widening. Worse yet, our social mobility - that is, our ability to move between these groups - is (almost unbelievably) in decline, and is the lowest in the developed world.

Adherents of "continuity NL" would no doubt tell us what they have told us for years: that gross discrepancies of income do not matter, that the rich create wealth, that the politics of envy are counterproductive and that the middle classes, whose votes decide elections, will recoil from anything that smells of class politics. Let us allow that some of this may have been more true in times of assured economic growth than it is now. Perhaps, when most people could feel confident about their own prospects, they did not care much about either the excessive wealth or the excessive poverty of others. That mood, however, is changing fast.

The country is now looking for leadership that addresses the altered economic conditions, and this is an opportunity - a natural opportunity - for Labour. Daring measures to curtail the growth of extreme wealth and at the same time to give strong support to the poorest and neediest would constitute a virtuous double: it would be the right thing to do, and it would be popular.

The government is in a deep hole and getting out of it will require luck as well as courage. But a strategy of narrowing the wealth gap by putting pressure on both ends will address its most urgent need, which is to rebuild confidence in Labour in its heartlands. It will show that the government cares, and can do something.

It would be wrong to assume that the middle classes will dislike this approach. They are turning against excessive wealth, and are more concerned than they once were about poverty. With leadership, they could be convinced that this is what must be done.

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