When he travelled back from Labour's conference in Bournemouth last month, Tony Blair had good grounds to be cheerful. Given the events of the past 12 months, the conference was always going to focus on his leadership. He used the occasion to assert his authority and strengthen his position.
But now, as parliament returns, big political questions have to be answered: about the direction in which he intends to take the party and how he will tackle some deep-seated problems.
Blair would be making a profound mistake if he viewed the past year as a period of transitional troubles that will some-how disappear once Lord Hutton has reported and the lights start to stay on all night in Baghdad.
The government's problems run deeper than that. Concern about political direction, pace of change and style of government predate the conflict in Iraq. For many, there is a sense of drift and a feeling that the government has lost its way.
Under such pressure, the government can choose to play safe and maintain a steady-as-you-go approach, or it can try to regain momentum through renewal in office. I have no doubt that the latter has to be the way forward.
Some will resist, and urge caution. Some will cry betrayal. But renewal in office doesn't mean that the government has to reject what has gone before or ignore what it has already achieved.
Renewal is essential because we need to address new priorities. Indeed, it would be an indication of failure if the issues of concern in 2005, after eight years of a Labour government, remained the same as those in 1997, after 18 years of Tory rule. Failure to reflect change makes a government appear dogmatic and out of touch with people's needs and aspirations.
This is not the time to be timid. We need a government that does not just respond to the demands of the modern world, but is prepared to be proactive, controlling the process of change in order to achieve progressive ends. It has to alter the political landscape, as the Attlee and Thatcher administrations did. These governments changed things so fundamentally - in Attlee's case by establishing the principles that underpin the welfare state, and, in Thatcher's, by pressing on with privatisation and a reformed trade union movement - that our country could never be the same again.
If Blair's government is going to be one that changes the political terrain, as those governments did, it needs to move decisively away from the defensiveness which has been the hallmark of recent times. It needs to recognise that a constant stream of useful but relatively minor initiatives are no substitute for a well-thought- out programme that is deeply rooted in Labour's values and principles. It needs an approach that has the objective of transforming society as opposed to simply being a competent administration.
To achieve this, we need to be clear about the overall political direction and position of the government. The Liberal Democrat leader, Charles Kennedy, may argue that the notion of a left and a right in British politics is now out of date. Unfortunately for him, most people do still identify with such labels. And increasingly, the electorate sees Labour as being on the right. The task now must be to move it leftwards.
This would not be a betrayal of new Labour, which was always a vehicle for achieving those traditional Labour goals of social justice, fairness and opportunity for all, based on the belief that we can achieve more when we work together than we can on our own.
But we do need a new strategic approach. We can no longer define ourselves by what we are against - that is the politics of opposition. Instead, we should articulate a clear vision of what we believe a Labour government should be for.
This task has been made easier by the Tory party's decision to bring forward some detailed policies that highlight clear dividing lines between the parties.
Take health. The Tories propose patients' passports. This would allow patients to take money out of the NHS to help pay towards the cost of private operations. Patients would pay up to 40 per cent from their own savings. This is a classic example of the Tories providing for the few at the expense of the majority. It is all about giving the small number who can afford it a subsidised escape route from the NHS, as opposed to the more difficult task of securing the necessary investment and then implementing a reform programme which will raise standards and improve quality to such an extent that people won't feel the need to go private.
The Tories' policies for education follow the same prescription. Parents will be able to take out of the state system an amount equivalent to the cost of their child's education and use it to buy places at schools in the private sector.
This is the moment for Labour to make the positive case for universal, high-quality services funded from general taxation and available on the basis of need and not ability to pay. We do not want to win the next election by default because the opposition is dysfunctional and the electorate so disengaged that turnout falls below 50 per cent. We need a Labour government that doesn't stand to one side but actively takes the side of the vulnerable and of those who work hard and play by the rules.
Time is short. New Labour needs to set the political agenda again.
Stephen Byers is MP for North Tyneside and a former cabinet minister