John Curtice: A drifting Government that has failed on public services and lied over the war, but few are turning to the Tories

Tony Blair's Labour government is now well and truly in the mid-term blues. The latest poll from YouGov puts Labour support on just 30 per cent while ICM gives it just 31 per cent. For the first time since becoming Labour leader in 1994, Mr Blair no longer looks like an election winner.

For those with an Old Labour mind, the party's slumped fortunes means the Government should revert to more traditional Labour policies, symbolised by the abandonment of foundation hospitals and top-up fees. But for Blairites this is the wrong moment for the Government to lose its nerve as it attempts to reform public services.

Neither side is right. Parties rarely lose votes because voters have fallen out of love with their ideology. New Labour's rise to power in 1997 did not rest primarily on its success in moving the party to the right. Labour already had a double digit lead when Tony Blair became leader - thanks to the reputation for incompetence visited on the Conservative party by the disaster of Black Wednesday. Labour has lost that double digit lead because it too is beginning to be thought incompetent.

MORI reports only 33 per cent think Government policy will improve public services, down from 54 per cent at Labour's re-election in 2001. Meanwhile ICM report half or more think that transport, health, and education - previously the Government's jewels in its crown - have worsened during Labour's tenure.

Perhaps even more worrying is Labour's loss of perceived economic competence, forged big over the Tories after Black Wednesday. YouGov reports the Tories are now reckoned as able as Labour to handle the economy. Similarly MORI reports fewer think the Government's policies will improve the economy than think they will not, in sharp contrast to the views held in the first term.

These numbers will have induced a loss of support from those on the right, left and centre ideologically. But to this impression of incompetence is another sense - a sense of drift. YouGov has found 64 per cent think the Government has "lost control and is at the mercy of events".

Here ideology matters. If Labour is to restore a sense of direction then it needs a story to tell the electorate about where it is going. It does not really matter what that story is Old Labour or New Labour - but it needs two vital ingredients.

The first is credibility. Rhetoric needs to match reality as perceived by voters on the ground, an absent quality for many voters from what they have heard from Mr Blair in recent months. They think the Government misled them over the war. The Prime Minister's rating on competence as measured by ICM has fallen from 68 per cent to 52 per cent since spring, but, on trust, his rating has fallen even more, from 51 per cent to just 30.

The second requirement is that it should be one that unites the party. One of New Labour's key advantages over the Tories in the 1990s was its iron discipline while the Tories argued among themselves. That discipline has gone as Labour MP argues with Labour MP in the TV studios and activist threatens to argue with activist in Bournemouth this week. Voters are not impressed by such division.

The Blairites' insistence there is no choice to the Government's current direction may be a mistake. Not a single vote may be gained by changing to more traditional Labour policies, but plenty may be lost from not taking on the concerns of Labour activists at all.

There is still one feature of the electoral landscape to hearten those gathered in Bournemouth. Whatever the Government's troubles there is no sign of a Tory revival. At 31 per cent in the latest ICM poll and 33 per cent in YouGov's, the chief opposition are still stuck where they were at the 2001 election. The Liberal Democrats on 30 to 31 per cent are profiting from Labour's misfortune.

Mr Blair may think he need not worry about a Tory victory, but the possibility of a hung parliament at the next election can no longer be ignored.

The writer is professor of politics, Strathclyde University