This was another Clause IV moment in Labour's history

At the heart of Tony Blair's argument yesterday was the assertion that "poor public services and welfare are usually for the poorest". It was no mere glib soundbite but a conscious echo, resonant for almost every Labour intellectual over 45, of the aphorism coined by the late Richard Tittmus, LSE professor and high apostle of welfare state universalism, that poor public services end up being services for the poor.

It was also at the core of the most lucid and uncompromising challenge Mr Blair has issued to his party since he stunned it in the same hall nine years ago by announcing that he was going to replace Clause IV. Freer than ever of the electoral imperative to confine his pitch to middle Britain, Mr Blair had much more to say this year about redistribution and the disadvantaged 30 per cent of Britons. At the same time, he built on the Tittmus text to summon his hitherto half-reluctant party to a mission of public-service reform that no union or recalcitrant vested interest would be allowed to baulk.

Unless hospital and schools, he was saying, are good enough for the middle classes who can afford to flee to the private sector, they will never be good enough for those who can't afford to do so. That's why he stood on its head Margaret Thatcher's notorious 1987 explanation of her use of private treatment, saying every citizen should have the right, within the NHS, to seek treatment "at the time I want, with the doctor I want". And why, casually ignoring several still potent Labour orthodoxies, he insisted that parents in the "post-comprehensive age" should be allowed a rich diversity of choice, from City Academies to faith schools. In so far as this was another Clause IV moment, it turned the theoretical argument that ends matter and means don't into hard practicalities. From Alan Milburn's foundation hospitals to PFI, the watchword henceforth would be even bolder, even more New Labour. No means, private and voluntary, would be excluded in his new post-statist world.

He was able to do this and still win a genuinely enthusiastic reception because, not a moment before time, he had a rationale which spoke to the most cherished values of his audience. What did it matter, he invited them to ask with him, how services were provided if they were free at the point of delivery, and extended access and opportunity to those who most needed it?

A pregnant passage defining the euro as Britain's "destiny", and an unusual admission that, without it, Britain was not yet at the centre of Europe, left no doubt that he wants to join in this Parliament. And, on the Middle East, he was more unequivocal than before in calling for an agreement between Israel and the Palestinians based around 1967 borders. Even more significantly, he set a year-end timetable for final-status peace negotiations, showing he thinks that despite public US silence there is a building global momentum, key parts of Washington included, for such an initiative.

It was, finally, a real leader's speech. Both his best jokes – about George Bush and his father-in-law Tony Booth – were, in essence, wry and very warmly received comments about his relationship with the party: deep respect rather than a passionate love affair. But his message could hardly have been clearer: this is where I'm going: follow me, and we will achieve the goals you want. Stop me, and the alternative is a Tory one in which the era of free, universal services is over. It was an argument he showed every sign last night of winning.