New Labour has begun to regain a sense of purpose, but problems still remain

Last week was a good one for the Government, with billions handed out to ease congestion on the roads and in hospitals, and ending with a light bounce in the opinion polls. Just as well, considering the din of dark mutterings about when the leaks and spin would be supplanted by substance. Truth to tell, the Government's standing was never quite as bad as some in it seemed to think, but things were looking increasingly grim for a time.

Last week was a good one for the Government, with billions handed out to ease congestion on the roads and in hospitals, and ending with a light bounce in the opinion polls. Just as well, considering the din of dark mutterings about when the leaks and spin would be supplanted by substance. Truth to tell, the Government's standing was never quite as bad as some in it seemed to think, but things were looking increasingly grim for a time.

From the Comprehensive Spending Review to the Government's proposals on transport and the national plan for the NHS, ministers have shown a return to the better side of New Labour - a pragmatic and non-dogmatic approach leading to practical, realistic ideas. It is not, quite, "delivery", but it is a lot nearer to it than double-counting meaningless billions and the gumph of overexcited spinning. It also reminds us that, for all its frailties, this is, indeed, a Labour government with different priorities from the Conservatives.

Equally, the Conservative revival has shown signs of stuttering. Mr Hague, still impressive in the Commons, is growing into his job, even if "Prime Minister Hague" retains its faraway quality. Far more disappointing has been the performance of shadow Chancellor, Michael Portillo.

He has been virtually invisible at a time when spending has been the focus of political debate; indeed, he attracts less coverage than when he was supposedly "in the wilderness". And when he does pop up, his numbers don't add up. He may have wriggled out of the ludicrous tax guarantee, but it is hard to see how he can justify his attack on Labour's spending without identifying where he will swing his axe. Mr Portillo will have to be careful he does not become the third shadow Gordon Brown sees off.

There are more potent dangers to this government than the official Opposition. Prime among these is that there is so little time before polling day for voters to witness change "on the ground". New Labour has a slogan for that - "a lot done, a lot still to do", but the electorate is entitled to ask what "a lot done" amounts to the next time they visit their GP, catch a train, or wait for a 999 call to be answered.

Of course, New Labour's greatest achievement has been a negative one - the avoidance of a financial crisis that the critics and history said was inevitable. More than that, Mr Brown has delivered a degree of fiscal stability impressive by any standards. The Chancellor should be given generous credit for his work, and also for much of this week's recovery.

But problems remain. The friction about the euro, if it turns out be about more than mere tactics, threatens New Labour's place in history. All the solid domestic achievements could be overshadowed by a failure to secure future prosperity by joining the euro. Official hesitancy is contributing to dwindling support for entry.

This speaks, sadly, to a larger truth; the Prime Minister's attitude to public opinion, or at least that version of it served up by Philip Gould. For a politician whose formative years were the 1980s, when Labour held the voters in contempt (a feeling reciprocated) it is an understandable instinct. But it is one that can tip into obsession, even paranoia, as seen in Mr Blair's dreadfully revealing "Touchstone Issues" leaked memo. But the job of leaders is to shift the argument. The worry about Mr Blair is his seemingly extreme distaste for conviction politics. On issues like asylum and gay rights, as well as the euro, he seems to have forgotten that public opinion is not immutable. To try to persuade voters is not to offer them contempt but leadership.

The polls say that the public still rate Mr Blair. He should return the compliment.