Perhaps the most interesting thing about George Osborne’s speech was that he felt the need to make it. He didn’t claim the Conservatives were the inheritors of the New Right. He claimed they were progressives. In that very fact we should acknowledge New Labour’s success and the Conservatives’ failure. He knows the traditional appeal of his party is neither a prescription for electoral success nor policy solutions to the problems of the 21st century. His claim shows both that New Labour has shifted the terrain of political debate in a progressive direction and that it is our instincts rather than traditional Conservatism which chime most closely with the instincts of the British public.

But his assertion is destroyed by his own party’s policy positions and by the attack from Conservative MEP Daniel Hannan on the NHS as a ‘relic we are stuck with’ and a ‘60 year mistake.’ Progressive? This was not just someone saying the NHS needed reform or change. It was a leading Tory MEP attacking the whole basis of healthcare paid out of taxation and free at the point of use.

Hannan’s comments show there are two faces to the Conservative party – the one the leadership would like us to see and the unchanged rightwing underbelly, hostile to the NHS and much else besides.

This matters because substance matters more than positioning. In future years, we will have to pay down the extra borrowing incurred during the recession – any political party that does not acknowledge this will not get past the first base of electoral credibility – but how you do that, what you prioritise, who you protect and who you champion, these are going to be the critical choices to come.

The government has had to spend and borrow a lot of money to see the country through the recession. It was the right thing to do. Without it, more companies would have gone to the wall (fewer orders, more collapsed banks), more people would have lost their jobs and the human cost of the recession would have been much greater.

In his speech this week George Osborne was silent about his own position and that of his party on these choices. There was nothing in his speech about wanting to take £5 billion out of public spending now while the fiscal stimulus is in place.

Nothing in the speech either about his party’s plans to spend less than Labour in the years to come. What would the effect be on public services? What would it mean for the NHS, schools or the police?

And also, nothing in his speech about the Tories’ top priority on tax – a break for the richest 3,000 estates in the country. Not public services, help for struggling families or help for British industry. George Osborne’s priority is not to look out for the great majority – it is to look after his own.

When it comes to public service reform it is absurd for the Tories to claim the mantle of progressives. When they were in charge of public services, people waited two years or more for routine NHS operations, schools were underfunded with far poorer results than now, new mothers had just 18 weeks maternity pay and communities lacked the powers to fight back against the anti-social behaviour which can destroy quality of life in local areas.

Those things have now changed with the extra funding brought forward by Labour but opposed by the Tories every step of the way. So much for the past, but on today’s questions of reform, the Tories still fail the progressive test time and time again by siding with the producer rather than the public. Thus when it came to extending access to GPs, the Tories sided with the BMA rather than the patients. When it came to school testing they sided with the NUT rather than parents. And when it comes to public safety, they speak out against the CCTV that communities want to keep their streets safe. The bargain they offer is clear – they will take away the targets and the money.

All of this is because they haven’t made the transition from party of opposition – siding with whatever pressure group opposes government policy – to party of government, realising that, above all, we serve the public first.

So as well as setting out our priorities for public spending at a time when we will need to pay down debt, we must also set out how we will empower people further. Labour must not shirk that challenge of reform. When we look back on what we have done over the past 12 years through extending choice to NHS patients, cutting NHS waiting times and removing the effect of rationing through waiting for those who could not exercise the option of paying, introducing city academies to give hope to those children who had often been let down by what went before or putting power in the hands of local communities to fight back against quality of life destroying, anti-social behaviour, the lesson we should learn is that these reforms worked. They were worth the fight and we need to build on them.

We faced up to those issues but now we have to do more, to think again about how we empower people and move on to the next stage of reform. That is why when it comes to educational opportunity we want to extend the academy model, have more one-to-one tuition and refuse to allow the excuses that do nothing for children who need a good education as their path to opportunity.

We will do these things without fear, and by showing that the lesson we have learned from the reforms of the past 12 years is that our passion for change is renewed and undimmed, by showing in our actions that we want to go further, not to retreat.

The claim of Tory progressivism is blown apart by the reality of their policies and until they appreciate that change in substance is what is needed and not just positioning speeches then their claim to have changed as a party, let alone be progressives, is utterly without credibility.

A shorter version of this article appeared on the Guardian’s Comment is Free on Saturday August 15, 2009