Iain Duncan Smith yesterday took a huge gamble with his denunciation of much of the Tory yesteryear.

He will almost certainly have isolated sections of his party who he said are still "living in the past" - a clear reference to Norman Tebbit and Ken Clarke who have stalked this conference just as much as John Major, Edwina Currie and Jeffrey Archer.

But his hope is that the majority of party members will wake up and step out into the sunshine, rubbing their eyes after spending years in a darkened room.

Yet, as one senior figure confided in a Bournemouth hotel bar the other night: "The problem is we're still in denial - and up the creek!"

Indeed, the one policy of the 25 announced this week that got the biggest cheer was giving housing association tenants the right to buy. The reason it got a great cheer was that it reminded the faithful of the pomp and the heyday of Margaret Thatcher. The reality is, though, that Britain needs more, not less, council or housing association property for rural people and public service workers to live in. This policy will not cheer up the people the party now professes to care about.

Deliberately, yesterday Mr Duncan Smith rejected Mrs Thatcher's famous words that "there is no such thing as society", with the pointed line: "We believe in freedom, but we also believe in society."

It is as if the Tories are caught in two minds. This will become most evident as a general election nears and the manifesto boils down to a question of tax. Labour will be standing on a non-tax cutting ticket on the grounds that the public services still require money; will the Tories match those spending plans?

Shadow Home Secretary Oliver Letwin made a very interesting speech about law and order on Wednesday. In it, he advocated the police following Britain's 20,000 hard drug addicts and the minute they dabbled or dealt they would be thrown into rehabilitation. Mr Letwin advocated building another 10,500 rehab places at the cost of £462m a year. Great in theory, but where will the extra police come from to do the tailing; where will the extra nurses come from to do the rehabing; which communities are going to allow these centres to be built within them, and where is all the money coming from?

Nonetheless, it has been a reasonably good week for the Tories. When we arrived in Bournemouth last weekend, it looked as if they would be overwhelmed by the voices of the past. But chairman Teresa May launched a headline-grabbing tirade and the party took control of its own destiny.

Indeed, quite a lot of the right-wing press has greeted the week's events with warmth - even though among the delegates there are greater doubts than ever about Mr Duncan Smith's leadership.

His external problems are that he has never laid a punch on Tony Blair; his internal problems are that he was the choice of the right-wing but all his talk of public services and modernisation means his support comes now from the Portillistas. His leadership is built on sand which could shift at any moment.

Yesterday's speech pushed all the right buttons in the conference hall - but May's local elections will be the test of whether anyone in the wider country was listening, and, indeed, of whether the Tories under Mr Duncan Smith have any future.