The next three years will be the high point for the Blues

There are only two realistic outcomes to Labour’s leadership election. The first, and by far the more likely, is that Jeremy Corbyn wins, either outright or on transfers. The other is that either Andy Burnham or Yvette Cooper wins by a relatively narrow margin having come from a long way behind on the first count to win on second- and third-choice transfers, at the same time as no small number of Corbyn supporters are excluded. Neither option seems likely to produce a strong or stable opposition.

Which is not the end of Labour’s problems; in fact, in many ways it’s the start. A resurgent left wing, whether in control of the leadership or not, will inevitably set the terms of the policy debate. Indeed, it already is doing so; the centre seems bereft of ideas and the right is out of fashion. Or more than out of fashion: those who prefer a centrist approach, from pragmatic electoral reasons or from personal beliefs, are finding their wing on the end of some rather nasty abuse. Given that the Lib Dems have moved left under Farron, there has to be a question as to whether voters – if not yet activists – will find the Yellows a more congenial home. Nor is that necessarily the end of Labour’s troubles with the SNP and UKIP having already snaffled parts of Labour’s former coalition. The SNP have maxed out their gains but UKIP has the potential to take more.

All of which leaves David Cameron and the Conservatives in a far stronger position than their tiny nominal majority would suggest. In fact, with so much of the political field clear, the PM holds a position more commanding than any since pre-Iraq Blair. The question is how he’ll use it, and there there are two options.

The first is to do as Blair did and seek to utterly dominate the landscape; sit in the centre ground, deny the Lib Dems the chance to recover (or at least, to recover at the Blues’ expense), watch Labour disintegrate and aim for the support of the 43% that appeared as an implicit target on his leadership campaign logo back in 2005.

Alternatively, he can put the lack of a meaningful alternative government to political use and take the chance to implement more radical reforms, reasonably safe in the knowledge that even if they’re not popular in themselves, they’ll still be more popular than the idea of Jeremy Corbyn as PM. There’ll be plenty of members of the party, of parliament and even of cabinet with pet projects for the NHS, for welfare, for the BBC or whatever more than ready to give Corbyn something to indignantly oppose with might and main.

And yet. Cameron already has a lot on his plate simply with the EU referendum; a challenge that’s not looking particularly easy at the moment given the other distractions the EU currently has and so the low priority any British demands will be given. And the expectation of having everything go their own way smacks of the kind of hubris that allowed Thatcher to introduce the Poll Tax and Blair to join in the invasion of Iraq. Much could go wrong.

Quite apart from the potential for internal division over Europe and other matters, there’s the risk of another recession at some point in the next five years (China?), before the damage done by the last one has been anything like repaired; or of something wholly unforeseen engulfing the government – think expenses from the last decade, or sleaze from the one before. And just because Corbyn is unelectable – and he is – it doesn’t necessarily mean that he’d be Labour leader come 2020 even if he wins next month. And if he is, and if the Conservatives do win, that doesn’t mean that serious failures will be forgiven or forgotten; I’ve long been of the view that one factor that played to Blair’s advantage in 1997 was residual resentment of the 1987-92 Conservative administration which couldn’t be expressed at the time but was bottled up for a time when it could.

On the other hand, 2015-18 may be the Conservatives’ best chance to remodel the country during their time in government. Life always gets harder the longer you go on, as past policies become harder to change, as public disillusionment sets in and as opposition hunger for power reasserts itself – and the last two years of a parliament are about consolidation and preparation for the election rather than reform.

The chaos of Labour’s leadership election, and the likely consequences of it, have delivered into Cameron’s hands an unexpected but huge opportunity. How will he use it: conservative or radical; to play to the country or to the party; to consolidate for a third – then fourth? – Conservative-led government or to spend capital to change the game: Macmillan or Thatcher?

Instinct would suggest the former, although Cameron’s personal caution has at times cloaked the more radical actions of some ministers. Whichever, what is increasingly obvious is the extraordinary state of flux there’s been in British politics in the year since the Scottish referendum; enough for a capable and bold leader fashion a new settlement out of. And on that note, despite all the evidence, David Cameron remains surprisingly under-rated.

David Herdson