In one of his greatest speeches – The Struggle for the Soul of the 21st Century – Bill Clinton described the world unfolding right now as a “world without walls”. And this summer we saw the evidence that he was right: China’s extraordinary coming-out ceremony; Obama’s battle with McCain on global security and free trade in the US; here at home, a credit crunch that started abroad, and inflation stoked by a new global competition for resources.

The world feels so much bigger – and yet we have never been so intimately linked. British people feel this is a new world. And we know we make our living in it. But our comfort level with change is going to decide whether we get help to shape the new forces at loose – or try to shut ourselves off. I don’t think we believe we should raise the drawbridge, but we are struggling with a crucial question: in this “world without walls”, how can Britain still feel like home?

As I spent four months going round Britain last year talking to hundreds of people about immigration reform, the overwhelming thing that struck me was that we’re not a nation of Alf Garnetts. We’re fine with diversity. We like it. We think it makes life more interesting. But we do want people to sign up to basic rules of the road.

That’s why we’re going to change the law so that newcomers have to show they have signed up to some basic things – speaking English, paying tax, obeying the law and making an effort to integrate – before they can access the privileges of citizenship, including benefits.

This goes far beyond immigration reform, because not one but lots of different forces are combining to reshape a Britain that’s more diverse. The way we work is different. Our families look different. We move around faster and faster – in the real world and online. All of us have got far more freedom to live a life that’s unique.

Which is why we’ve got to strengthen what we have in common. Unless we act to strengthen shared standards in British life, we run the risk of our national life breaking up into a sort of cultural archipelago of ever smaller islands further and further apart from each other.

Every fraternal society has its code of conduct. Every happy family has good ground rules. Shared standards are the glue that keeps diverse societies together. We need to dust them off and, with a new vigour and self-confidence and imagination, celebrate them. Make them part again of everyday life.

There are lots of chances on the way. The Olympics will be a big stage on which to tell our national story. Renewed investment in the landmarks, monuments and battlefields that mark our shared heritage give us a way of enticing tourists, and a focus for local interest and pride. The Bill of British Rights and Duties is a big opportunity to set out a picture of the contract that binds us together. We must add to this list.

I’ve explored a national day to celebrate what we like best about our country. In my discussions, people suggested 27 different ways they would like to see Britain celebrated in earnest once a year. All of the ideas were quintessentially British – evidence that identity is not the same as uniformity.

An aggressive cross-party defence of the union must be part of the package. Overwhelmingly, people in Britain see no conflict between diversity and the United Kingdom. They are right. If we can sustain a unity in every community in the land – rich and poor; black and white; Christian and Muslim; English, Irish, Polish, Pakistani, Chinese – I frankly regard it as a nonsense that we can’t sustain the union.

Today, parties connect people with the “hard power” of elections. That’s not enough. Parties need a “soft power” strategy that connects with those who can take our investment in 3m new homes and our huge new school, hospital and health-centre building programme and renew a vibrant civic fabric.

David Cameron’s advisers are telling him to tap into anxieties over diversity with a caricature narrative about the “broken society”. It’s a different story from Margaret Thatcher. She wanted to rejuvenate the market by rolling back the state. Cameron says we have a “broken society”. The answer? Roll back the state. Different story. Same ending.

New Labour’s great insight was that individuals do better in strong communities. That truth has not changed. But we need, alongside new measures to empower individuals, measures to strengthen what ties individuals together. If we get this right we can help make sure that the forces at loose in the world don’t deepen the divisions of the past – between rich and poor, young and old, new and traditional – but that we forge from a diverse country a more united kingdom. In a world without walls, this is the best way to make Britain feel like home.

Liam Byrne’s A More United Kingdom is published by Demos tomorrow