A bad week for the Government? Only if Mr Blair loses his nerve

It has been a bad week for the Government, apparently. Labour has slumped in the opinion polls. Dagenham is to shed 1,500 jobs as Ford ends car production there. Union bosses have flexed their muscles. Another former colony has had to be evacuated. All this in the week after the Labour candidate came third in the contest for London mayor and the party lost 600 seats in local council elections.

If this is as bad as it gets for Tony Blair, however, he should be grateful. The other side of the picture is that Labour is still 16 percentage points in the lead in the polls. Rover has been reprieved, and other car plants all over the country are expanding, as our business editor reported yesterday. And last week, the Tories lost one of their safest parliamentary seats in a by-election.

Of course, things could get worse for the Government between now and next May. The economy could easily turn sour. Britain could find itself sucked into an unwinnable war in Sierra Leone. Financial scandals could damage ministerial reputations. But that is beginning to get into the category of Pointless Speculation. All governments are at the mercy of events. In terms of popularity ratings, some are helpful, such as prime ministerial births, and some are unhelpful, such as decisions by German car manufacturers to sell large factories in areas with a lot of marginal seats. By a political version of Sod's law, there are usually more unhelpful than helpful events, and the magic of 1997 is bound to be eroded over time.

However, that erosion hardly looks likely to threaten Mr Blair's hopes of becoming the first Labour prime minister to win a full second term next year. Unfortunately for the vitality of our democracy, William Hague's team does not yet look like a credible alternative government.

Why, then, do this Government's nerves seem shot? The Prime Minister has always had his nervous and defensive side, and although he has grown in office he has not grown much in confidence. Of course, his majority of 179 MPs overstates the mandate he received at the last election, and all politicians should be properly deferential towards the people whom they represent. But there is a difference between humility and eagerness to please.

Lighten up, Mr Blair.

This week's continued craven appeasement of xenophobia, for example, with plans to herd asylum-seekers into camps under armed guard, has been as unnecessary as it was unpleasant.

One of the Prime Minister's central problems has been perceptively identified by a sympathetic friend, Neal Lawson, in the current issue of Renewal, the Labour modernisers' journal. It is the lack of a story to tell that makes the Government seem like less than the sum of its parts. "The lack of narrative means that we repeat the contents page at an ever-increasing rate but never get to hear the story," says Mr Lawson.

If the Prime Minister has genuine principles, we understand them to be reasonably (albeit insufficiently) liberal, mildly egalitarian and cautiously European. Those are good enough principles to fight for, and we suspect there would be a grateful and positive response from the voters if Mr Blair were to do so, with a bit of brio.