From my understanding Labour would need the SNP to form a government. Middle England might be willing to vote for a Liberal Labour government alone but they don’t want SNP to hold the country to randsome by the SNP. That in turn pushes them back to The Tories.
Labour also seems to have lost who they actually represent. It used to be literally the labour classes. During New Labour they really moved away from this while to a large degree and they never really came back. Thatcher claimed The Conservatives had truely won when Labour adopted Tory policies.
The problem is what are Labour offering that The Tories aren’t to the working and middle classes. Even Corbyn’s proposals the only policy that directly affected working people was an increase in the minimum wage.
The key argument going forward for them in my view is reducing the taxation of lower income groups while increasing the taxation on multinationals and billionaires.