When Labour politicians used to say in the past decade ‘you can’t trust the polls’, it was to dampen down expectations that Labour winning was a forgone conclusion, memories of 1992 reverberating like a bad dream in their skulls. Now, the claim is more likely to reflect a hope that the economic crisis has left people feeling so topsy-turvy that their support for any party is volatile. However, as the seemingly inevitable leadership speculation, flying accusations and vicious denials raise their ugly heads, it’s obvious that the widening gap between Labour and the Tories is taking its toll, giving Labour politicians and activists the jitters.

But apart from the poll shift, it is quite difficult to point to something definitive that Labour has messed up since October. Ostensibly the Conservatives’ economic plans are all over the place. Driven by pure opportunism, they are arriving at some very odd positions indeed. Exhorting the government to directly break contract law in relation to bank bonuses may look populist now, but would set awful precedents for the future. Simply because the state has a share in banks, does not mean that it can act above the law. But sadly, fine analysis of the Conservatives’ flip-flopping matters little to the public who were always going to blame the government as job losses hit home and a deep recession looked likely.

Labour’s reaction has been a plethora of initiatives to wrest back control of the media cycle. The lesson of the past decade is surely, however, that simply announcing good new policies without a broader narrative to pull all the disparate pieces together means that the best of intentions fall on deaf ears. Sun Tzu’s famous dictum ‘tactics without strategy is the noise before defeat’ is pertinent here. So Peter Mandelson is right to argue that Labour must rise above the ‘frenzy’ and make the right long-term decisions for the future of the country, and therein lies the possible answer to Labour’s political future as well.

The first part of that equation is what a recent Progress group looking at fiscal policy has tried to work out. If public confidence remains key to kick-starting the bits of the economy which are not completely driven by the global downturn, we have argued that 2009 must be delineated as the floor of the recession. So we suggest that the budget should put forward a series of time-limited measures to encourage consumer and commercial spending, including suspending all stamp duty tax on residential properties under £1m to tempt buyers back into the market; halving the small companies’ rate of corporation tax to provide relief for hard hit traders; doubling the amount of healthy start vouchers which go to all families with children under 5 on child tax credits; and uprating jobseekers’ allowance immediately by £10 which is not only likely to go straight back into the economy, but is also socially just given Britain’s low out-of-work benefit rates.

Alongside developing plans to turn the economy round, Labour sorely needs to tell a story about how we got here and, crucially, what we would do differently once the horizon begins to clear. It’s as if we are so worried about minimising the damage the storm is wreaking on our house that we have forgotten the need to give hope to people inside that we have the wherewithal to rebuild it once the clouds begin to recede. This shouldn’t be a sackcloth and ashes apology for presiding over what was, after all, the longest period of stable growth since records began, but a sensible analysis of the role of over-inflated house prices, under-regulation of the financial sector and a culture which failed to adequately encourage saving.

Equally important, if not more so, is for Labour to spell out its vision for a fourth term. The longer we leave it, the more likely the Tories will steal our clothes as their recent announcement on devolving powers to local communities attests. New Labour has a strong base to build the next decade on, but too many of its flagship ideas risk falling into abeyance. We must reassert our claim to be the party of excellence in education, pushing further with giving independence to schools, providing aspiration for the most disadvantaged and promotion for the most talented teachers, alongside smaller schools with money following pupils’ needs, not middle-class voice.

We must reject the idea that all the work we can do to improve the NHS has been done and continue to push for independent budgets, use of technology to improve the patient experience and give people further control over decisions about their healthcare. And we must reclaim the idea that power should be seized from Whitehall and given to government and people at a local level through city mayors, more say over budgets and a new language of civic responsibility.

The Conservatives in no way deserve to win the next election, but if we continue to fail to make our case for government, it will be hard to convince the public that Labour deserves a fourth term too.