Tony Blair is the one person who thinks the Tories might win the next election

The Prime Minister is right to worry. There's nothing fundamental or irreversible about the Tory plight
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The Prime Minister is "obsessed" with Michael Howard. Many of his advisers in Number 10 say they are surprised by his defensive and fearful posture towards the Leader of the Opposition. The Conservative leader will probably be the central character, even if he is not mentioned by name, in Tony Blair's summer musings about the coming year.

The Prime Minister is "obsessed" with Michael Howard. Many of his advisers in Number 10 say they are surprised by his defensive and fearful posture towards the Leader of the Opposition. The Conservative leader will probably be the central character, even if he is not mentioned by name, in Tony Blair's summer musings about the coming year.

Two years ago, according to Anthony Seldon's new book, Blair, these deckchair insights were typed up into a 24-page memo at the end of August. The challenge, Blair wrote, "will be to keep the centre ground; to force the Tories out to the right; and to persuade ourselves that radical reform is the answer, not the problem".

This year's memo, we can be sure, will repeat the same strategic thinking. Journalists, the public and most of the Conservative Party itself may have written off Howard's chances of winning the next election. There remains one person, however, who believes that the Tories present a real threat to this government. I doubt if even Howard believes in himself as much as Tony Blair does. Howard's realistic private ambition may be to cut Labour's majority sufficiently to render the Conservatives competitive in the election after next - while being aware that there is always a small chance unforeseen events might propel him into the top job. But Blair seems to think Howard really could beat him.

In that strategic posture, the Prime Minister has been consistent. In the run-up to the 1997 election, many Labour supporters distrusted the opinion polls, but he was more rigorous than any of his entourage in insisting that nothing should be done to offend the centre ground. Again, before 2001, when William Hague fought one of the most hopeless campaigns since the Black Knight, having lost both arms and legs, challenged King Arthur in Monty Python and the Holy Grail, Blair was virtually alone in his party in worrying about the Tory assault on asylum, crime and taxes.

Not that even Blair can seriously suppose that the Conservatives have much chance of winning an overall majority at the next election, the electoral system having become so biased against them. But imagine how wounded the Government would be if the Conservatives won a larger share of the vote and Labour still had a majority in the Commons. Also, a hung parliament, in which no single party has a majority, covers a wide range of arithmetical permutations.

Yet no one apart from the Prime Minister seems to take these possibilities seriously. Journalists are nearly unanimous that, with Labour a point or two ahead on average in the opinion polls, nine months from a May 2005 election, Blair is King-Arthur-like in his domination of his opponents. And the apparent lack of thinking among Conservatives about the terms of a possible deal with the Liberal Democrats suggests that they too do not seriously believe the need is likely to arise.

The conventional wisdom is that the next election is all over bar the counting and the ritual in which commentators and politicians flail themselves with ceremonial scourges for the record low turnout. We ought, however, to be suspicious about conventional wisdoms. It is at least worth asking whether Blair is engaged in mere positioning, a tactic designed to secure Labour government for "decades" as promised by the Home Office minister Hazel Blairs - sorry, Blears - or whether the Conservatives, despite being routinely portrayed as armless and legless, really could win.

An amnesiac would be entitled to be puzzled by the conventional wisdom. Why should a largely conservative electorate not vote for the Conservatives in large numbers? There are few policy differences between the two parties, so if people had to choose between a party that, broadly, preferred lower taxes, and one that believed in an activist state, why should they vote Labour? The standard answer is that Blair and Gordon Brown have "won" the argument for higher public spending on the NHS and schools. But to the amnesiac, Howard and Oliver Letwin, the Shadow Chancellor, have neutralised that advantage by promising to spend just as much in those areas for the first three years of a Tory government.

The squeals of pain from Tory shadow ministers asked to accept a spending squeeze in all other departments, including defence, have been cleverly exploited by Labour. But surely the criticism of Labour that counts is that it seems to be in favour of higher public spending on absolutely everything? Why not have higher public spending on things most people support and cut back on the rest so that taxes are lower than they otherwise would be?

Even the disarray among policy-makers above Starbucks in Victoria Street (now that Conservative Central Office is no longer in Smith Square) need not prevent the Tories being popular. Labour makes much, for example, of the £1.2bn annual cost of the Tory plan to subsidise private health treatment for people who would go private anyway. Now, I agree it would be an unfair perk for the relatively well-off. But there is no reason why it should not appeal to precisely the aspirant voter New Labour has made its own.

More generally, the Conservatives are better placed, ideologically, to push through the kind of market-style reforms that are needed to extract the greatest efficiency from higher public spending in health and education.

It was interesting that Howard's "authoritarian" promise earlier this month to build more prisons was similar to what Blair used to say in opposition: that imprisonment was not the purpose of policy, but the decisions of the courts should not be constrained by an arbitrary limit. Again, I personally think that prisons mostly make crime worse, especially if people are ever let out of them, but then I am not a target voter and there seems no good reason why most people should not prefer the Tories on law and order.

What holds the Tories back is that the electorate are not amnesiacs. They remember too much of the unhappy parts of the Tory record and do not think the Tories can be trusted to run public services well. Twelve years after the ERM débâcle, the Tory record on the economy is still somewhat unfairly tarnished. Those memories outweigh the albatross of Iraq around Blair's neck. But the Prime Minister is right to worry. There is nothing fundamental or irreversible about the Tory plight. After all, he himself has proved that a party's image can be transformed in opposition.

And that is the answer, surely, to Blair's growing army of critics getting ready for the Labour conference in Brighton next month. Why, they ask, does the Prime Minister not get out and make the case for redistribution, liberal immigration policy and civil liberties? Because they would be portrayed by the Tories as a lurch to the left, which would help them do what they have to do if they are to win over the centre ground, namely to shake off their image as extreme.

The writer is chief political commentator for 'The Independent on Sunday'