Stephan Shakespeare: By historical standards, Labour's opinion poll lead is quite modest

"To win outright, Cameron needs a miracle" - so said my YouGov colleague Peter Kellner yesterday. How different to just one year ago. In those over-confident times I had cabinet ministers willing to bet cash they'd achieve a majority in 2015, and even my Labour friends had given up and were strategising for the election after. I was surprised at just how settled the Conservative optimism (and Labour pessimism) then seemed.

It's important to remember that mood in October 2011 because it shows us how readily we exaggerate. There was no reason for confidence back then, and indeed in these pages I cautioned that it rested on three very unsure foundations: boundary changes that could easily fail to materialise; the continued dire performance of Ed Miliband; and the almost certainly wrong assumption that the LibDems would collapse. Furthermore, there's a firm trend, election by election, that the minor parties take a bigger share of the vote; if that continues, then winning outright will become harder for both sides.

But if Conservatives were over-confident last year, I suggest they're being over-gloomy today. The graphs at the top of this post show some significant deterioration, but given that we are one year further into a terrible economy, with significant pain and still no discernible signs of recovery, they could have been much worse. Miliband's rating as 'best Prime Minister' has improved from 15% behind Cameron to just 4% behind - but even in this unhappy midterm, Miliband is still behind. And, at the last time of asking, the prize of 'best party for the economy' was still the Conservatives, if only by a tiny squeak. Our poll for the Sunday Times last weekend showed the public still rates Cameron's government as more competent than Brown's (though behind Blair's). So Labour is still a way off restoring its reputation. And as Peter has pointed out, history shows that an opposition needs to have hit a polling lead of at least 20% to have a serious chance of ousting the governing party.

There are two paths ahead for the Conservatives. The first is to conclude that an overall majority is very difficult, and one should work to secure a second lease for the partnership with the LibDems, however painful it feels right now. If the economy recovers, as surely it will before 2015, both parties will seek, and gain, significant credit. And both parties will want to cash that in for another term in power. Can we seriously imagine the LibDems siding with Labour when the party of Gordon Brown is still taking the blame for the mess? I think it's perfectly possible that the coalition will one day appear to the public after to be something of success, and both sides will suddenly feel much better about each other.

The second path is the Montgomerie plan: forget the safety of coalition, go all-out for a bold, broad, adventurous Conservatism which takes significant risks to reach the greater goal of an outright majority. The recent YouGov poll for ConHome reminded us that across all age groups, across all regions, across all parties and both genders, the overwhelming problem for the Conservative Party is to be seen as the party of the rich. If Osborne rightly eschews empty, destructive gestures such as a 'Mansion Tax' as the answer to that, then Montgomerie's social justice vision of Conservatism offers a solution. There surely is no reason why both paths shouldn't be followed at the same time, they are not contradictory. Conservatives can be positive about Conservatism, and coalition, adjusting to the opportunities available at the time.

This article first appeared in the Tuesday edition of ConHome's Party Conference Daily.