Gerry Hassan: Back off the ropes and scenting an unlikely victory

Labour has been through a lot these past few years: recession, a banking crisis, three attempted coups against the leader, "cash for honours", the expenses crisis – and that's without mentioning Iraq and Afghanistan. The party is short of members, resources and money, and yet it is still standing. Is Gordon Brown really the "Comeback Kid"?

This raises the question of what Labour stands for after all this. What is the essence of the party's soul? And what would happen if it managed against all the odds to win a historic fourth term?

Senior figures in the party still command the ability to order their depleted, exhausted forces to mount attacks and counter-attacks, and to strain every sinew to rise to the task of mounting one more challenge against the Tories.

It is an impressive feat when you consider that, in the past week and a bit, three former ministers have been caught selling their wares and Brown has admitted he misled people on defence spending, while there are two major transport strikes involving Unite and the RMT.

Labour feels it has an increasingly effective story to tell on the economy, public spending and services. The Budget showed this, with Brown, Alistair Darling and Lord Mandelson all effectively singing from the same hymn sheets, divisions between "investment vs cuts" and "the forces of hell" a thing of the past.

The Conservatives seem to have lost their ability to say anything convincing on the economy, beyond going on about the debt mountain and need for cuts. As the election looms and the polls narrow, they seem to have been caught out. They clearly thought they had done enough to change and that this, combined with dislike of Labour, would be enough to win it.

There has been complacency on the side of the Tories, evident in David Cameron's disastrously misjudged, amateurish interview with Gay Times this week, when he didn't seem to know anything about the subject. He gave the impression he had an intrinsic sense that people should be grateful he is a laid-back kind of cool guy and that Tories don't hate gays any more, and it blew up in his face. That interview is emblematic of the wider Tory problem. They are like a football team nursing a big lead in points towards the end of a league campaign, realising they must do nothing to jeopardise this lead, and growing increasingly nervous and aware of their vulnerabilities. Nobody forgives champions who throw their crowns away: remember Hearts in the Scottish Premier Division in 1986 or Newcastle United in the 1990s in England.

In Scotland, Labour, for all its problems, has already shown it has the capacity to fight back. After two by-election defeats, the party held off the SNP in Glenrothes and Glasgow North East. Labour organisers can make the claim that the UK-wide recovery began first in Scotland.

Despite the SNP being in office in Holyrood – and the recent Glasgow problems – Labour can be expected to hold most of its vote and seats in Scotland. Where the opinion polls diverge is on the size of the SNP and Tory vote.

The past few years have seen Labour and Brown the objects of much derision and even hatred. People such as Jeremy Clarkson have made gratuitous comments about Brown, while right-wing bloggers rage about the tyranny of "Zanu PFliebour" in a world far removed from sanity but filled with paranoia.

Even political commentators as astute and thoughtful as Daniel Finkelstein have regularly said in the past few months that a Tory landslide is there for the taking. This is mistaking your gut feelings and hopes for analysis. This is not 1997. There will be no Tory landslide. Labour has not given up the will to live in the way the Conservatives did that year, with the possible lone exception of John Major. Cameron, despite all his attempts, is not seen in the same way as "the young Lochinvar", Tony Blair.

This then leads us to the two "big" questions: what does Labour stand for, and what happens if it wins?

Labour has already won the battle of the election themes with "A Future Fair For All", but this is a pretty nebulous notion of fairness in a Britain scarred by inequality and struggling middle folk.

Instead, to use Eric Shaw of Stirling University's analysis in his book Losing Labour's Soul? – a carefully considered assessment of the party's first decade in office – what is the state of Labour's soul? Is it in fine health after a decade of social democratic investment and the return of red and blue battle lines? Or is it, like Dudley Moore in the 1960s film Bewitched, left adrift and in a vacuum after having sold its soul to the devil?

Shaw, being a veteran studier of Labour, would not go as far as the Bewitched analogy, and that's what makes his measured critique all the more powerful. For he concludes that Labour has, despite many social democratic measures, supped with the devil and diminished to the point of losing its sense of its soul.

This leaves us in a strange place where a party that has gone through huge convulsions, and seen much of what it preached during the long bubble reduced to rubble, finds itself fighting its way back into contention. There is an element of incredulity amongst many about this, denial in others, while, on another level, there is a part-Wagnerian magnificence.

Paradoxically, if Labour were to win, it could turn out to be the worst of all worlds for the party, our politics and country. A large number of voters don't like Labour or Brown; it is just they don't like the Tories either.

A Labour victory would postpone all sorts of discussions and possibilities for the country and the party. It would postpone any real day of reckoning about the Blair-Brown years, and any sense of collective inquiry into how the party allowed Stephen Byers, Patricia Hewitt and Geoff Hoon to sum up an age and politics with their "cabs for hire".

Despite everything, we are about to see the most exciting, gripping, unpredictable and angry election we have had since February 1974. Maybe, just maybe, it will do justice to the events of the last parliament and decade.