Labour is faced with the need to hold firm to two insights. The first is that politics matters: the outcomes of political contests change the lives of millions of people. The second is that there is nothing inevitable about politics: the efforts and insights of individual people can and do change political results.

Many pessimistic or cynical pundits, and others, promote differing views. They recycle the old saw that ‘there’s no real difference between Tory and Labour’. They argue that Labour has now reached the natural end of its period in power. They suggest that politics will be helped by one term of the Tories in office, after which Labour will return, refreshed.

I believe that these gloomy views are very wrong but that Labour has to do far more to prove them wrong and to build a strong and confident progressive government founded on its focus on the future.

I begin with an overview of political change since 1951. Essentially there have been four basic cycles of political power. The first, 1951-1964, saw13 years of Conservative government, with four prime ministers, characterised by an acceptance of many of the inherited Attlee achievements. The second, 1964-1979, had 15 years of relatively unsuccessful Labour dominance, with two Labour prime ministers and the 1970-4 Ted Heath interregnum, and in 1974-9 a paralysing hung parliament. Labour chucked away its chance to establish a long-term reforming government. The third,1979-1997, contained 18 years of generally effective (though mostly wrong) Conservative government, with two prime ministers and a working parliamentary majority until the final years. The fourth, 1997 – present, has seen at least 12 years of successful Labour government, with two prime ministers, characterised by a good parliamentary majority and acceptance of many of the Thatcher changes.

Each of these four cycles began with energy, enthusiasm and direction. But they all ended when three ingredients came together: the government seemed lethargic and unfocused (1961-4, 1977-79, 1994-97); the opposition offered a genuinely fresh and different programme for change; and the individual leaders (Wilson, Thatcher and Blair) were new and could be trusted. One or other of these three conditions were missing earlier – for example in 1959 or 1992.

On this basis if Labour gets it all wrong (and the Conservatives get it all right) the next general election (I expect it in May 2010) will become the next major turning point, leading to more than a decade of Tory power. But if Labour gets it right it could easily win well again and even lay the basis of a more long-term, Scandinavian-style ‘progressive century’, where our approach and values become strongly entrenched. So the stakes for the country are high.

I draw three lessons for today from this short historical survey. First, 12 to13 years is a relatively short period in office and Labour should be absolutely determined to seek a fourth term and then be ruthless in winning it. There is absolutely no reason to surrender to the inevitability of defeat, as too many seem now to be doing.

Second, the Conservative opposition is still far from showing that it can be trusted with power. That is why David Cameron is attempting to lead ‘from the centre’, while travelling light with policy. His difficulties on, for example, grammar schools and EU cooperation, indicate how far his party still has to go. Labour must constantly press on their policy intentions. Third, Labour has to demonstrate clarity, decisiveness and a lucid sense of direction and purpose – culminating at the next election in a clear offer to the country, which shows Labour’s capacity to address the challenges of the future. It will not be enough simply to defend past achievements, however substantial. That tactic didn’t work for Jim Callaghan or John Major in 1997. It won’t work for Gordon Brown.

In this political contest there is everything to play for. But there is no time for delay. At the moment both the polls and the general state of opinion suggest that most people in the country believe that Labour has a long way to go to establish both clarity of purpose and the confidence that we are genuinely looking to the future and not backwards.

That means that we have to change our relationship with the past. We have to understand that Tony Blair, though an outstanding Labour prime minister who massively changed Britain for the better, has departed the British political scene and neither he nor his policy prescriptions have any future significance. His victory in 1997 and then the first two terms of office, to 2005, were a radical transformation of the country for the better, reversing the decay and decline of the introverted Thatcher-Major years.

But that important achievement is not enough to win a mandate for the future. In May 2005 we reached the turning point in the post-1997 political cycle, and Labour, and in particular Tony Blair as leader, should have made that the time to shift from implementing the 1997 mandate to setting out our store for the future.

In those first two terms to 2005, many hard decisions were put off or avoided and many of the reforms which were set in motion were not completed. The reasons were varied, and often understandable, but the list of subjects where change is incomplete, or has not even been broached, is lengthy. It includes: establishing green and sustainable practice (for example in transport, energy and construction); public sector reform (local government, trust schools, foundation hospitals, ‘copayment’, and public sector pay); housing; welfare reform (housing benefit, women’s pensions, care in old age, disability); constitutional change (Lords reform, Scotland and the UK); EU engagement (constitution, euro); conduct of politics (party funding and the media); prisons and probation; immigration and identity.

This catalogue remains potent because it is about enabling Britain to face the future in the changing world as it is and as it will be and not as it was. These issues transform the lives of everyone in the country; and in many areas the Tories continue to offer only oppositionism and reaction.

Since Blair’s pre-announced retirement in October 2004, inner-party politics has dominated attention and consequently Labour has wasted much of the first half of this parliament. With some exceptions, our action to make the necessary changes has been insufficient. And now it seems to me that Labour still remains very unclear about our approach, both in this parliament and the next.

By now people are entitled to expect Labour to know what works, and not to need short-term reviews and pilots. Now, above all, we need clarity in each policy area. The current uncertainties are widespread, debilitating and give ammunition to our opponents.

Everyone will have their own priorities. My personal list is environmental sustainability, modern and effective public services, and our relationship with the EU and the wider world.

But whatever the specifics, we must all understand that rhetoric about past Conservative failures and past Labour success will not disguise a failure to face the future effectively.

Both now and at the next general election, Labour in government needs to show its commitment to change in practice, and its readiness to promote discussion of the best ways to achieve that.