Tony Blair in Brighton yesterday gave the best speech Baroness Thatcher never made. Gone was the waffle of Opposition. Control of audience and occasion was complete. So, too, was the deference paid to the -ism that still hovers over British politics, the -ism that dare not speak its name.

Mr Blair is emerging as the political son Margaret Thatcher never had. He is repackaging and relaunching the great enterprise. Yesterday's speech, stripped of its clutter, was a call to a second crusade, a continuation of the modernisation of Britain begun in the 1980s and as yet unfinished. Mr Blair announced another era of "hard choices". Nobody, not the unions, not the workshy, not students, not Europe, certainly not the Labour Party, can be allowed to stand in its way. New Labour was an election-winning gimmick. New Labour is really New Thatcher. There is not, and never was, any alternative.

The question asked of the country by Mr Blair last May was simple. Would it like him to do to Britain what he had done to the Labour Party? He had brushed away its cobwebs and installed clear and sensible lines of accountability. The public's reply was (I say it again) half-hearted. The crazy arithmetic of the House of Commons should blind nobody to the fact that Labour's popular vote, true indicator of public feeling, was little different from John Major's in 1992. (It was the Tory vote that collapsed.) Mr Blair is not, as he claimed yesterday, a majoritarian Prime Minister. His much-lauded mandate rests on less than 50 per cent electoral support.

The more reason, he might have argued, for playing safe. After 18 years in Opposition, the Labour Cabinet could well have rested. Mr Blair's ministers could jog round the field, get used to their boots and learn the name of the coach. In Opposition, his interest in policy seemed limited. His speeches were so empty as to make even Paddy Ashdown's a model of precision. Asked to tell of socialism's "language of priorities", Mr Blair replied that those in Kenneth Clarke's last Budget seemed good enough for him. The electorate was offered a pig in a poke. Having bought the poke, it could have been told by Mr Blair that the pig would stay hidden for a year or two.

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Speaking on French TV, Tony Blair sang the praises of the EU and sketched his agenda for its future, all in fluent French

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Yesterday there was no such complacency. The Government made two early decisions of great significance. The first was to note and avoid the initial mistakes made by the most recent "revolutionary" administrations, those of Harold Wilson in 1964 and Margaret Thatcher in 1979. The last period of Labour rule ended with James Callaghan pathetically lecturing his party that governments could not get out of trouble by cutting taxes and increasing spending. "I tell you in all candour that this option no longer exists," he cried. He was right, but too late.

Mrs Thatcher preached the same message, yet promptly ignored it. In 1979 she cut taxes and increased spending, buying off her old allies among farmers, the police, the Armed Forces and even the civil servants. Public spending soared and the Thatcher Cabinet tore itself apart for half a decade, struggling to bring expenditure under control.

Mr Blair's decision to stick within the Tory spending targets was far more than a device of convenient discipline. He made it seem unavoidable, and then named his closest colleague and potential rival, Gordon Brown, as custodian of this (Tory) discipline. By crudely freezing spending the Cabinet saved itself a year of internecine strife. But the Chancellor must soon join battle over the next public spending review, with loyalty to the targets wearing thin. He, rather than Mr Blair, must then be their defender.

Mr Brown's speech on Monday was extraordinary, not just for his merciless teasing of spending colleagues. He went back over the painful lessons of the 1970s. He told the party that "irresponsible" pay demands were out of the question. "You cannot build a new Jerusalem on a mountain of debt," he said. Mr Brown has bought lock, stock and barrel the old monetarist theorem, that central bankers cause inflation and unions cause unemployment. For the first time in memory a Chancellor has pinned not one but both these maxims firmly on their subjects. If Labour wants full employment, he chided his audience, only the unions stand in the way. This is 18-certificate politics.

Mr Blair, I noted, did not mention Mr Brown yesterday, despite accolades to John Prescott, Mo Mowlem and David Blunkett. A shrewd leader always distances himself from his Chancellor. If Mr Blair is to be President, someone else has to be skinflint Prime Minister. Someone has to smash hopes, shred morale, spill blood and hack compromise. Mr Blair may preach neo-Thatcherism. He may sell the "hard choices" crusade like a New Age religion. But he is the salesman. Mr Brown is the one who must practise in the corridors what Mr Blair preaches in the pulpit. And if the crusade founders...dear Gordon, a nice man, such a pity.

So far, so Machiavellian. But what was also clear yesterday is that Mr Blair has no intention of putting his Government's reputation for radicalism in hock to the Treasury. The two substantive reforms on which he has embarked, to the constitution and to the welfare state, are now irrevocable. I doubt if anyone in government has an inkling of what it may have unleashed in Scotland or Wales, let alone when elected mayors are the norm in every city in the land. This is not just the reversing of a decade of Tory centralism. Britain is to get a dose of constitutional innovation that could mean widespread political opposition to any government in London. For a new administration, this shows confidence and courage.

More courageous must be the decisions soon to emerge from Labour's review of the welfare state. Britain must have pinched itself hearing some of Mr Blair's loaded asides yesterday. He ridiculed housing benefit as "designed for fraud". He dismissed criticism of his plan for students' fees. His phrase, "rights come with responsibilities", is familiar right-wing code. It means workfare in some shape or form. As for the emphasis on teaching stan dards, the criticism of hooliganism, the attack on Brussels bureaucracy, this was vintage Thatcher. I was jolted from my seat when Mr Blair suddenly began talking about "Labour values". What was the Labour Party doing here? The modernisation of Britain, like Lenin's electrification of the Soviet Union, was surely above party.

The modernisation crusade has now been firmly allied to "hard choices". Like Lady Thatcher, Mr Blair knows he must win battles that will become harder with each passing month. He, too, must confront his Arthur Scargill and his Orgreave pickets. They may come in the form of battling students, single mothers and the urban unemployed. The prospect for any Labour Government is terrible. Mr Blair will need all the popularity he can muster. President Clinton's overwhelming mandate was of little use when he tried to tamper with health reform.

The present Government has made few errors as yet. There has been arrogance in the handling of MPs, but they can take it. Mr Blair's first Honours List was faintly malodorous, but who cares? The rubbishing of Clare Short and Frank Field was not nice, but nor is any school of hard knocks. Last Thursday's Treasury leak on the single currency was a disaster. Bigger rumblings can be heard over the horizon, from Europe, from Northern Ireland and from the public sector unions. Who knows what the gods of circumstance may soon visit on those who at present seem to play as happy as Gray's schoolboys. "No sense have they of ills to come/ Nor care beyond today " ?

Yet of all this, Mr Blair seems aware. In his speech he allowed himself one wistful remark. He claimed that May 1 was a defeat not just for Toryism but for cynicism. This was a time for the "enlightened patriot". Britain had a chance to set the world an example of economic and political modernisation - a modernisation, he failed to point out, that began more than a decade ago. But setting examples is painful. They require a Government ready to draw deep on its stock of political consent. Mr Blair has that consent at present, but it will not last. He is impressively conscious of this fragility. He has seen the flood tide in his Government's affairs. We should be encouraged that he wants so urgently to exploit it.

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