The Opposition: Right-wing team aims for the centre

It is a sign of how far the once-mighty Conservative Party has fallen that, as the year ends, its leaders can take comfort from the fact that the Opposition has been largely invisible in recent months.

At least, the argument at Conservative Central Office runs, we have stopped being obsessed with Europe and being a "nasty party" that wants to crack down on asylum-seekers, gays and other assorted enemies of the state. Instead, the focus of Iain Duncan Smith since he became Tory leader in September has been firmly on the issue that matters to voters – public services.

Some Tories argue that Mr Duncan Smith has been unlucky to see his first 100 days as party leader overshadowed by the war on terrorism. In fact, it may not have made that much difference; the Tories have slipped off the radar screen and become largely irrelevant to the public.

However, Mr Duncan Smith is determined to learn the lessons of one of the worst general election campaigns in living memory. Under William Hague, the Tories offered tax cuts when people were more worried about public services, and tried to turn the election into a referendum on the single currency when Tony Blair had already promised one. The result was that the Tories managed a pitiful gain of one parliamentary seat over 1997.

After the election, Mr Hague had the grace and good sense to stand down immediately from a job for which he thought he was not really ready in 1997. As leader, he displayed a remarkable resilience in public, against all the odds. In private, he was insecure and haunted by demons, such as the threat from Michael Portillo, that were exaggerated by his inner circle.

Mr Duncan Smith, the right-wing candidate, fought a faultless leadership campaign, though he was ably assisted by the mistakes of his rivals, Mr Portillo and Kenneth Clarke. The new leader's language was inclusive, yet his first frontbench appointments were most certainly not, rewarding right-wing soulmates and arch Eurosceptics such as Bill Cash.

Some have proved better than they looked: a rejuvenated Michael Howard, the only Shadow Cabinet member to have served in a real Cabinet, is making an impact as shadow Chancellor, saying that health, education and transport must have priority over tax cuts. Oliver Letwin, a risky choice for the Home Office brief, has found the more reasonable tone the party as a whole must strike.

Yet the question remains: will a right-dominated team deliver the centre-ground, inclusive policies the Tories need to get back in the game? So far, the Tories have focused on getting rid of their negatives (as Mr Blair did on becoming Labour leader in 1994). It will be a while, perhaps two years, before we see any flesh on the bones of policies. Winning back voter trust on public services will take a lot more than a few speeches and interviews. The danger for the Tories is that, on the core issue of the NHS, Labour will portray them as the party under which patients have to pay, while treatment will remain free under Labour.

The new Tory leader was right to back the Government in the war on terrorism and, with his military background, he looks relaxed and confident on such issues. He has been less comfortable in the Commons, haunted by what Westminster wags have dubbed "Freddie the Frog", who lives in Mr Duncan Smith's throat. To be fair, his last two performances before Christmas were much better: perhaps Freddie is hibernating. It was Mr Duncan Smith who invited us to judge his leadership after "three or four months" and suggested that Mr Hague never really recovered from early mistakes, such as the infamous baseball cap. So far, the scorecard for Mr Duncan Smith looks remarkably blank, but at least some of the negatives have been rubbed out, and he now has a platform.

With the Tories in the doldrums, the Liberal Democrats see an opportunity. Although Labour won a new mandate in June, there was little enthusiasm from the voters. Disenchantment over public services could harm the Blair Government when the political spotlight turns to domestic issues in the new year.

With no sign of voters returning to the Tory fold, Charles Kennedy's party will try to be all things to all men. After the 1997 election, the Liberal Democrats slipped back sharply in the polls, but this year some surveys showed them holding 20 per cent of the vote – enough to worry both the Tories and Labour.