30 MARCH 2002, Page 9

lain Duncan Smith's speech was the most important by a Tory leader since Margaret Thatcher

PETER OBORNE

There is no word yet on whether Tony Blair intends to mark the fifth anniversary of his arrival in Downing Street on 2 May 1997. Doubtless his advisers will counsel against anything in the way of an ostentatious celebration. This seems a pity. Judged by all known criteria, the Prime Minister has been prodigiously successful, The economy seems reasonably strong, while unemployment has halved since Labour entered office. Britain is held in greater respect abroad. At home, even at the end of a bumpy three months, Tony Blair retains the trust and respect of the majority of the British people — unknown for a modern prime minister after five years in power. Politically, his achievement is staggering. Tony Blair has done what all his predecessors have sought to do and none has managed: has turned Labour into the natural party of government.

In the circumstances, one would have expected the Prime Minister to feel moderately chipper. But this is not the case. Visitors to Downing Street report a mood of 'bemusement' among the Prime Minister and the diminishing group with whom he willingly associates. Criticism is taken as betrayal, and in Downing Street these days they see betrayal everywhere. There is a central paradox about the Blair operation. Politically it is about building a 'big tent' and offering a comfortable berth to as many interest-groups and sectors of society as possible — business and the unions, proEuropeans and the Murdoch press, foxhunters and sabs. But within Downing Street itself there is a brooding, bunker mentality, partly fostered by the fierce, angry presence of Alastair Campbell, the government's director of communications. Downing Street is dominated by a deep and irrational belief that it is surrounded by enemies. If the Blair 'project' ultimately fails, an outcome which is not yet inevitable, it will do so because the Prime Minister trusts too few, and not too many, people.

This is what the current pseudo-crisis at Westminster is all about. It is about a lack not so much of conviction — there is still plenty of shrill conviction in No. 10 — but of trust. Not long before he died, the political journalist Tony Bevins wrote a long, admiring, thoughtful essay in the Daily Express arguing that, contrary to all appearances, Tony Blair really does possess clear objectives. Bevins, who fully shared New Labour's sense of isolation and its suspicion of outsiders, explained that the Prime Minister could never come clean about these objectives, because this would cause them to be defeated. Instead, New Labour, like an army operating inside hostile territory, was obliged to make progress by stealth and feint, It was an arresting thesis from a man who knew the mind of Tony Blair better than most, and I think largely true.

In recent months this strategy has begun to work against No. 10. At best it has baffled the Prime Minister's supporters; at worst made Tony Blair look cowardly, deceitful and untrustworthy. A case in point is fox-hunting. Nobody can understand why the Prime Minister voted for a ban, while expending as much of his political capital as he dare on pressing behind the scenes for a middle-way solution. The weird, convoluted logic probably makes perfect sense in No. 10, but nowhere else.

Exactly the same point applies to Mr Blair's agitation for reform of the public services. Here he has advanced so stealthily that nobody — least of all the unions — knows what the proposals that are causing all the fuss really are. The Prime Minister has been shuffling in a guilty, hole-in-the-corner way between business and the unions and back again, making obscure and, from the look of things, incompatible assurances to both.

Peter Mandelson, an incomparable analyst of other people's problems, was exactly right when he told On the Record at the weekend that Tony Blair ought to go out and sell his message much more courageously and clearly, without the subterfuge and spin. This point applies above all, of course, to the looming war with Iraq: it is on this great issue more than anything else that the Prime Minister must be straight with the rest of us. If he can be brought to grasp this need for candour and directness, there is every chance that he could use the present difficulty to reforge New Labour and his own premiership.

This is a task which has become slightly more urgent for Mr Blair after last weekend's Conservative party conference in Flarrogate. lain Duncan Smith's speech was the most important by any Conservative leader since Margaret Thatcher ceased to lead the party 12 years ago. It set out a basis for doing business with the British people that could not differ more sharply from current practice in Downing Street. While New Labour is about agglomerating power at the centre, Duncan Smith spoke of returning it to local communities. While Downing Street keeps things close, Duncan Smith's catchphrase is 'trust the people'. In recent years the idea of dismantling the hierarchical 20th-century British state has been associated with left-wing pressuregroups like Charter 88, and emphatically not the Tories. But lain Duncan Smith's notion of trusting ordinary people to take control of their lives, allied to faith in small institutions which mediate between the individual and the distant, impersonal state, can he traced straight back to Edmund Burke and his 'little platoons'.

The central theme of Duncan Smith's speech — decentralisation -is not an easy slogan, but it has the overwhelming merit of making Conservative policy coherent and capable of winning the great intellectual battles of the day for the first time in a generation. William Hague, by the end, had plenty of policies, but they were a rag-bag, and made no sense as a whole. Some of the policy implications of Duncan Smith's speech — local taxation, locally accountable police forces — are very far-reaching indeed. But the central idea gives the Tories the ability to bring a fresh and cogent analysis of why Tony' Blair has failed to reform British public services in the way he promised five years ago.

It remains to be seen whether Duncan Smith and his still beleaguered Tories have the confidence to be as radical as Harrogate promised. But if they do, and Mr Blair chooses to remain trapped in his Downing Street bunker, then last week could indeed be the end of the beginning for lain Duncan Smith, and the beginning of the end for Tony Blair,