The Tories have been purged, not of the past, but of their own silliness

There is nothing like a good cathartic scream. Last week the Conservatives screamed: "The country hates us! We hate each other!" They went away feeling a lot better for it, like delegates at a masochists' convention who had beaten each other back into life.

Have they finally purged themselves of their terrible mistakes in government? No, they have done something more significant than that. They have started to purge themselves of the terrible mistakes they have been making in opposition to New Labour. Since 1994, and certainly since Labour came to power in 1997, there has been a disjointed, almost surreal, pattern to British politics, one in which the ineptitude of the Conservatives has played a significant role.

The pattern has gone something like this: New Labour announces a policy with trumpets blazing, suggesting that this is an act of a daring radical administration, but one that is also in touch with the aspirations of all the people. The Conservatives respond with affectations of apoplectic horror and then announce an alternative policy much further to the right. A few months later Tony Blair pops up to admit that the original policy was rather cautious but now the Government has got to grips with the problem and is really moving on to radical territory. The Tories hit the roof again and move further to the mad extremes. After a while there is a sense that not a great deal has changed, but the economy is doing well and Mr Blair looks prime ministerial. Labour is miles ahead in the polls. The Tories look bonkers, screaming about the outrages of the Government in a way that makes New Labour seem more radical than it really is. There is then a perceived crisis for the right, even though the Government's original policy was on terrain previously occupied by the Conservatives.

Last week's Conservative conference suggests that the pattern might change. Much of the week was a tribute to Mr Blair in that he obsessed everyone there. He has replaced Baroness Thatcher as the leader who haunts Conservative conferences. In bars and over coffee the conversations were the same. "We need our Clause Four. Blair distanced himself from Labour's policies from 1970s and 1980s – we must distance ourselves from the 1990s. Blair wooed the right-wing newspapers – we must woo the liberal press rather than just the Mail and the Telegraph."

What a fluid situation. The architects of New Labour are still haunted by all those victories achieved by Margaret Thatcher in the 1980s and her "bold" style of leadership. The current Conservative leadership is obsessed with Tony Blair.

But there is a fresh challenge for him in all this flattery. The challenge was best represented in the performance of Oliver Letwin who managed to make David Blunkett seem like the one who was on the fringes of politics. Mr Letwin was calm and reflective on asylum and crime, but also on the thorny area of taxation. Several interviewers suggested to him that he had made a big mistake in suggesting that taxes might have to rise under a Conservative government. "No, not at all," Mr Letwin responded. "It might cost more to introduce the reforms, so initially it is possible that taxes will have to rise." No longer can the Government make its modest spending proposals seem boldly radical by comparing them to the Conservatives'.

Now, of course, much of this is to do with tone. The Conservatives' policies, as far as there was much detail in them, would out-Thatcher the Lady herself. Extending the "right to buy" would further reduce the chronic shortage of affordable housing. Paying part of a private school fee would still leave parents facing the rest of the bill, one that could not be met by those on low incomes. Encouraging the payment of private health insurance would boost the health-care opportunities for those with some spare cash, but not the poorest. There are still vast swathes of policy where the Conservatives make no sense at all. On the EU, for example, the logic of their hostile position is withdrawal, although they insist they want to remain a member. On Northern Ireland, grimly topical this weekend, they have declared their support for the peace process while opposing every move that makes that process possible.

Even so, the Conservatives now are more coherent compared to when they were in the final years of John Major and the era of William Hague's tax guarantee. That might not be saying very much, but it is saying something. At the very least the conference demands some reflection from Mr Blair and his ministers. They cannot just clap their hands and cry "Bingo" as they have been able to do after previous Conservative conferences.

Have the Prime Minister and the Home Secretary got it in them to stop pouring out populist initiatives on asylum and crime now they are faced with a more mature, reflective Mr Letwin? I am told that Mr Blunkett is under pressure from Downing Street to produce yet another Immigration Bill to show how "tough" the Government is being. Indeed a lot of Mr Blunkett's populist initiatives arise from near-daily phone calls from a panicky Downing Street where there are overblown fears of a right-wing backlash unless ministers seem busier than they really are.

Again, the Conservatives are partly playing games. Iain Duncan Smith manically told the Daily Mail earlier this year he would not accept a single asylum-seeker from the Sangatte camp in France. Now Mr Letwin calls for a mature debate. Still at least there is a little light there now, much more than there was when Mr Hague seemed to spend most of his time in Dover spreading fears of Britain becoming a foreign land.

Equally challenging is the way Mr Blair and his colleagues respond to the raft of policies that are not entirely dissimilar from their own. Has the Prime Minister got the guts to argue that the "right to buy" initiative has already gone more than far enough? Will he be able to make the case for local innovation in the context of public services being improved across the board?

The Conservatives have finally hit upon another clever device, which is to praise Mr Blair for moving on to their terrain rather than scream that he is some dangerous leftie. With PFIs, PPPs, a "post-comprehensive school era", and Foundation Hospitals, how will he choose to be distinct from them?

The Conservative conference posed some awkward questions, which is not bad for a gathering with a well-developed sense of its own nastiness. Something has changed. After eight years during which the Tories fell into every trap set for them life will never be quite as easy again for New Labour.