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A year is a long time in politics. Twelve months ago, William Hague addressed the Tory spring conference in Harrogate and made a rather nasty, desperate attack on Labour, saying Britain could become a "foreign land" if Tony Blair won a second term.

Yesterday his successor, Iain Duncan Smith, spoke to the same conference in the Yorkshire spa town, but his speech could hardly have been more different. Instead of preaching to the Eurosceptic-converted or playing the race card, Mr Duncan Smith tried to rebrand his party as one that would stand up for the most vulnerable people and encourage more women and black parliamentary candidates.

Rejecting the lowest common denominator populism of his predecessor, Mr Duncan Smith said: "We need to be passionate and positive about the things and the people we are in favour of, not just the things we are against."

After six months as leader, Mr Duncan Smith has found his feet. Yesterday's speech was much more assured than his nervous debut in Blackpool last October.

At the weekend, the Tories did not feel like a party which had just suffered a second crushing election defeat. There was a spring in their step: they are enjoying the Government's disarray. Two opinion polls in the past week show Labour's lead down to nine and seven points respectively. The Tories, rather than the Liberal Democrats, appear to be benefiting from Labour's woes.

Baroness Thatcher's announcement last Friday that she will make no more public speeches did not overshadow the conference, as Conservative party managers had feared. Her spell on the party appears finally to be broken.

Mr Duncan Smith now poses a far more dangerous threat to Tony Blair than Labour realises. It is easy to write him off as a boring, grey bank manager. But his unspun image – plain man, not Superman – may prove popular with the voters if Mr Blair cannot stem the tide of public and party discontent he faces.

The Tory leader has been low-key, but has not wasted his first six months. Like Neil Kinnock, who changed Labour from the left in a way that Mr Blair could not have done in the 1980s, Mr Duncan Smith is in tune with the right-wing instincts of his party. Tory activists trust him to make the changes that they know they need to make, without selling the party's soul.

But now the narrowing opinion poll gap and the Government's problems mean the media and the public will start to subject the Tories to much greater scrutiny. The new regime has played some mood music about putting public services ahead of tax cuts, but there is little or no flesh on the party's policy bones.

Mr Duncan Smith's instincts will be radical rather than cautious. "We cannot go on using 1940s' solutions to tackle 21st century problems," he said yesterday. He will probably break the post-war consensus on the National Health Service by proposing a mixed public, private and voluntary system – a high-risk strategy.

There was some optimistic talk among senior Tories in Harrogate that the Government was about to "implode". But despite current events, they cannot rely on Labour self-destructing in the way the Tories did under John Major.

Mr Duncan Smith has made a solid start. His party is ready to join his "mission". Whether the public can be persuaded to do so is another matter.