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What is needed is a coherent counter argument that is just as clear and exposes them for the thatcherites that they are.
But it also needs to address the racisty bits. That's the hard part.
Just a bit of wordy reflection:
What people seem to be pushing for is engaging with their concerns as legitimate and trying to assuage fears - perhaps even make promises that accept them as legitimate fears. This has been what Labour and the Tories have been doing ("British jobs for British workers"; referendum on Brexit). It has resulted in a shift to the right, and the normalization of people saying shit things and being horrible.
Maybe the left needs to cut its losses and accept that ignorant racists aren't welcome, instead of constantly agonizing over how to win them over/back.
Of course, as has been discussed in the Brexit thread a number of times, not all ignorant racists are really ignorant racists. But the ones that aren't really ignorant racists are surely more likely to see the error of their ways when their perspectives are dismissed for being the trash they are, rather than legitimizing their concerns and trying to bribe them back in.
Essentially, ignore those who've fled to the right (it's unlikely Labour will be able to out-Right Ukip anyway). Work to help everyone (even the racists) by fighting inequality.
(Which, ironically, may be what your point was to begin with, before I forced in the racist-clause).
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@dst2
Farage has quit, I was listening to one of the UKIP leadership contenders on radio 4 and I reckon they may hover up some of the traditional Labour support. All about social mobility and grammer schools and we're for the left behind. A clear and simple message that I think will play well. Not Farage like at all.
What is needed is a coherent counter argument that is just as clear and exposes them for the thatcherites that they are.