For the Tories too, this sorry affair is proving a diversion from real politics

The insufferable complacency which was widespread in Labour ranks a fortnight ago has now diminished

It is an irony that David Blunkett should be involved in a paternity dispute. Until the 19th century, Home Secretaries had a role in the most important paternity cases of all. In 1688-89, Protestants searching for an excuse to repudiate their allegiance to a Roman Catholic monarch alleged that James II's supposed heir had been smuggled into the Palace in a warming-pan. Thereafter, the Home Secretary was required to be present at a Royal birth, to certify that there had been no skulduggery.

It is an irony that David Blunkett should be involved in a paternity dispute. Until the 19th century, Home Secretaries had a role in the most important paternity cases of all. In 1688-89, Protestants searching for an excuse to repudiate their allegiance to a Roman Catholic monarch alleged that James II's supposed heir had been smuggled into the Palace in a warming-pan. Thereafter, the Home Secretary was required to be present at a Royal birth, to certify that there had been no skulduggery.

Until 50 years ago, Home Secretaries were also required to decide whether condemned criminals should be reprieved or executed. That burden may have been lifted, but the Home Secretaryship is still a great Office of State, with quasi-judicial responsibilities. To discharge this, Home Secretaries require personal authority. David Blunkett no longer possesses it.

Misappropriated rail tickets, dubious usage of official cars, sending round policemen to deal with a mistress' anxieties: last week I was too quick to dismiss these as mere trivial offences. If any senior policeman had committed them, he would be out of a job and likely to suffer a grievous diminution in pension rights. Over the rail tickets, there might even be a criminal prosecution. The Home Secretary is in charge of all the police. The same standards must apply to him as to them.

Then there is the nanny's visa. It has been suggested that the Home Secretary is trying to persuade Sir Alan Budd that any impropriety was committed by over-zealous officials. Anyone who cares about David Blunkett's reputation must hope that this is untrue. Any Minister trying to shelter behind Civil Servants in that way would be guilty of contemptible cowardice. It would be almost equally feeble of the officials concerned to allow themselves to be used as stooges. Have they no self-respect?

It is also hard to believe that Alan Budd would buy such a load of horse-feathers. Though Sir Alan is a gentle and kindly man, he is not naive. If he were to fall for the zealous officials' line, the ghost of Henry II would be regretting that he had not been available to conduct the inquiry into Thomas a Becket's death, in order to save the King from having to do penance.

Finally, if Alan Budd were to exonerate Mr Blunkett, no one would believe him and the affair would drag on. There may well be fresh revelations to come and a baby has yet to be born. Neurosis, obsession, cuckoldry, recrimination, revenge: there is more than enough to keep the story alive until well into next year - perhaps until the general election campaign itself. I wonder if Mr Blair still thinks that he was wise to stand by Mr Blunkett, and whether the same decision would have been taken in Alastair Campbell's day.

At least one of David Blunkett's senior colleagues is fed up with the whole business. The Prime Minister used the Queen's Speech as a first draft of his election manifesto. The Chancellor intended to use the pre-Budget report as the first draft of his manifesto for the Labour leadership election. But he was driven from the headlines. As he was talking about the need to support mothers and families, attention was focused on one mother and one family.

While it is unusual for Gordon Brown to be unable to command as much limelight as he desires, the Tories have accustomed themselves to the public-attention deficiency syndrome. Last week, Oliver Letwin launched a powerful counter-attack: his best performance as shadow Chancellor. Mr Letwin believes that he did more than demonstrate his ability to stand up to Mr Brown in the Commons. He thinks that there is still time to influence the election result. He insists that the intellectual battle is going his way.

Until the early Nineties, the British electorate usually believed that it had a choice: lower taxes and lower government spending under the Tories, higher taxes and better public services under Labour (voters opted for lower taxes far more often than they were prepared to admit to the pollsters). Then there was a dramatic swing, in Labour's favour. Mr Blair was able to convince many voters that they could enjoy better services without paying more in income tax. That helped him to win two large majorities, but it may no longer work.

In 2001, William Hague tried to persuade the voters that higher spending had not produced better services: "You've paid the tax. Where are the nurses/teachers/policemen?" It was too early. The public were still ready to give Tony Blair the benefit of the doubt. Now, things are different.

The voters have realised that, though income tax rates may not have risen, just about every other form of tax has increased. Though the average family may not realise that its tax bill has gone up by £5,000 a year, it is aware that it is paying a lot more - and for what?

After several years of hyper-expenditure by the government for very limited returns, the voters may now be open to the argument that higher public expenditure does not automatically guarantee better public services. Mr Letwin also hopes to persuade them that lower public expenditure need not mean worse public services. He will set out to curb the spending increases which Gordon Brown is proposing in order to avoid the tax increases which a re-elected Labour government would have to impose. But by cutting waste - the £20bn identified by the government's own Gershon Report and the £10bn plus which David James has uncovered for the Tories - Mr Letwin will make it possible to have cleaner hospitals, more discipline in schools, more policemen on the beat and tighter control of immigration and asylum. He will also be able to finance some modest tax cuts.

Mr Letwin also believes that the quickest way to get his point across is to produce common sense examples. Recently, the Ministry of Defence purchased new chairs for senior officials. They cost £1,000 each. They are indeed elegant; the original design can be seen in the Museum of Modern Art, in New York. Mr Letwin does not believe that MoD civil servants require state-of-the-art chairs, at a price which would buy three flak jackets for soldiers in Iraq. He suspects that the public would agree with him.

Family taxation has increased by £5,000 a year, while 5,000 people are dying every year from infections picked up in hospitals. Mr Letwin thinks that it should be easy to juxtapose those two points, in order to persuade people that Labour is wasting a great deal of their money.

Every school day, a headmaster has to fill in 12 pages of forms. That is 12 pages of time and effort which distracts him from his real job: educating children. In this case, Oliver Letwin will argue that Labour's increased expenditure on educational bureaucrats is worse than useless, in that it actually prevents teachers from teaching.

Time is pressing. It will not be easy for the Tories to put forward many complex arguments between now and the next election. Even so, the insufferable complacency which was widespread in Labour ranks a fortnight ago has now diminished. The expense of spirit and the waste of shame in the Blunkett/Fortier/Quinn household has had a lowering effect on Labour's morale. This may yet be reinforced by Oliver Letwin's arguments on expense and waste.