The Labour Party in Blackpool: Labour faces period of tough questioning: At the end of John Smith's first conference as leader of the party, Nicholas Timmins assesses the size of the task awaiting him

LABOUR arrived in Blackpool last weekend wondering what was going to happen. It left yesterday in much the same state of mind.

Party managers at least were happy. A listless conference had produced none of the blood-letting and internecine warfare that only three weeks ago had been feared in the wake of a fourth election defeat.

Instead, the conference barely addressed its loss. 'It is as though we were sleepwalking,' one alarmed Shadow Cabinet member said, with so little mourning that it was as though some delegates had accepted that Labour really is only a party of opposition.

Events explain some of this. The Government's debacle over the pound had lifted spirits. It allowed John Smith, the party leader, to do one of the things he does best - perform last week in the Commons chamber - ending the questions about where he had been all summer.

And there is nothing like seeing the other lot in disarray to avoid facing awkward questions about your own position. Among some, the events of the last three weeks have encouraged the view that Labour needs not so much 'one more heave' as simply to sit and watch the Conservatives fall apart.

It is a view that alarms those for whom the lesson of 9 April was that Labour has deep structural problems to address - and who felt that Labour in Blackpool addressed none of them and appeared largely detached from the real world.

A government in deep trouble has faced three sorts of opposition this week - its own backbenchers, the Bundesbank and the official Opposition, of which the official Opposition has been by far the least important.

It has also been a week of conflicting signals. The splash of Bryan Gould's resignation turned rapidly into a ripple as his surrender of his Shadow Cabinet post was followed by the loss of his national executive base. The NEC elections, the outcome of ordinary party members being balloted, putting Tony Blair, Gordon Brown and Neil Kinnock on the party's ruling body, was seen as a vote from the grass roots for change.

The same conference that applauded Mr Smith's solid statement of his values also erupted into applause for Arthur Scargill before the miner's leader had even begun to speak - and then went on in the best traditions of yesteryear to turn the platform over by demanding a massive increase in pensions, huge defence cuts and voting for a resolution that implied little or no change in the union vote.

Apart from an almost unnatural good humour, not much seemed to have changed, and neither John Smith nor any other front-bencher told the party that it needed to. Mr Smith does want change. But his innate caution has led him to slow the process, not speed it up - although he remains determined that the party must sort out its internal affairs next year. He put off Mr Kinnock's decision to introduce one member one vote for MPs' selections from this year to next, to allow the union link to be looked at in the round. Retention of a union vote, probably through a form of associate membership, looks likely. And Mr Kinnock's plan for a national policy forum to become the main body for deciding policy, radically changing the often confrontational nature of the party conference, has been watered down - at least for now.

Instead, Mr Smith, through the new joint policy committee he will chair, will have a tight hold on policy-making. He will take his chances next year with conference largely in its present form.

The difference between Mr Kinnock and Mr Smith, one of the former leader's closest associates said this week, was that 'Neil thought he'd be 10 years in opposition but 10 years in power and had a project for complete reform of the party internally. That involved taking risks. John knows that if he loses he is only going to fight one election. He will make the changes he thinks are necessary to win, but only the ones he thinks are necessary'.

Labour is thus in a state of pregnant pause, waiting to see what Mr Smith does think is required. The coming year will require decisions on whether to back electoral reform, how far to change the union link, and how to start re-shaping tax and benefits policy as the first fruits, though not the final recommendations, emerge from the planned commission on social justice. Mr Smith, like Mr Major, has to navigate Maastricht, with Dennis Skinner yesterday warning that he, and no doubt others, will vote against, whatever the leadership decides. But Mr Gould's departure and the conference's support for pro-Europe resolutions may make Mr Smith's task easier.

He leaves Blackpool with his activists in far better heart than they believed they would be - but with all the hard decisions still to be faced. And it is questionable whether anything has happened in Blackpool to put the country in better heart with Labour.

(Photograph omitted)