Now, more than ever, the Prime Minister needs Alastair Campbell

He is absolutely right, of course. We have never had it so good. More people are in work than ever before, earning more than ever before. The poor are sharing in rising prosperity to an extent not seen for a generation. No one under 30 can remember what a recession is like. And public services are getting better - not by much, perhaps, depending on where you stand, but they are plainly moving in the right direction.

He is absolutely right, of course. We have never had it so good. More people are in work than ever before, earning more than ever before. The poor are sharing in rising prosperity to an extent not seen for a generation. No one under 30 can remember what a recession is like. And public services are getting better - not by much, perhaps, depending on where you stand, but they are plainly moving in the right direction.

Geoff Mulgan, the Prime Minister's director of policy and strategy, has taken stock of where the country stands, in relation to other countries and to our own history. He concludes that the nation has turned a corner over the past 10 to 20 years and is now in a more positive position than at any time since the end of empire.

So why isn't Tony Blair more popular? Well, the short answer is the Iraq war. But there is a longer and more complicated answer, which Mulgan set out in a personal farewell speech delivered at the London School of Economics last week. He is leaving Downing Street this summer, having come for four years and stayed for seven.

And his conclusion, having laboured in the engine room of policy-making since Blair's election, is that the systematic dishonesty of parts of the press makes it harder than ever for governments to maintain the public trust needed to do their job. "The net result of the way parts of the media work is that the public are left with a systematically incorrect perspective on the world around them, as research now repeatedly shows on issues ranging from Europe and migrants to public services," he said.

Some of the media have "no commitment to the truth", he went on. This is not simply a matter of what used to be called tabloid distortion but which in deference to our compact sister newspaper ought now to be called mass-market sensationalism. It is also the maxim, famously endorsed by Jeremy Paxman, that journalists should always ask themselves "why is this lying bastard lying to me?". As Mulgan commented, this extreme scepticism "can simply lead to cynicism and undermine any sort of truth".

The trouble is that it sounds like the traditional lament of the unpopular politician, that journalists treat them unfairly. Those of us who are old enough to remember what a recession is like will also remember Tony Benn's complaints against the capitalist media, Harold Wilson's paranoia and Margaret Thatcher's battles with the BBC.

But Mulgan is right; Blair does have a problem. The right-wing press hates him; the left-wing press is anti-war and the BBC, if it did not have an anti-war bias before the David Kelly affair, is hardly well disposed towards the war leader now.

Who can blame Blair for trying to rescue something from the wreckage, hoping the promise of a referendum on the European constitution will secure The Sun's endorsement in the general election next year? Well, nearly everyone, actually, but you get the point.

Mulgan hints at the demoralising effect of being on the receiving end of journalistic spin. It was reported last month, for example, that he advocated a "fat tax" on unhealthy foods, which was untrue or, as he put it, a "creative interpretation" of a policy paper. Hence the personal note in his speech in which he said this media environment "can corrode the self-confidence of those working in government", since "trust may fall even when government is competent, accountable and ethical".

The danger of such complaints is that they sound too much like Alastair Campbell's counter-productive outbursts against the BBC over Iraq, or his more recent bitterness towards Paul Dacre, the editor of the Daily Mail. The similarity speaks volumes for Blair's own thinking.

Yet there is a real problem here. The Government's domestic record is much better than reported. When Sir Nigel Crisp, the chief executive of the NHS, said "something big" is happening in the health service, he was predictably rubbished in the right-wing press. But the news that waiting lists and waiting times are coming down was more insidiously undermined by the BBC, which felt it had to "balance" its reporting with the comments of "critics" who complain that there are too many bureaucrats in the NHS.

Or, to take another example, there were the Office for National Statistics figures completely unreported last week showing a sharp shift towards a more equal distribution of incomes, taking taxes and benefits into account. Of course, they are just one year's figures, for household incomes in 2002-03, but they could be the start of a really big story of social justice.

Just imagine the fuss if the figures had shown the opposite. So there is media bias. Mulgan is right about that, although it is utterly pointless for him to say so. Because there are two sides to the politico-media complex, and at least half the problem is a failure on the Labour Government's part. There are many people in Downing Street and in adjoining offices who are palpably frustrated by the fact that a government that has so patently given the people what they voted for should not be perceived as having done so. There was a note of indignation in Mulgan's speech as he protested: "We have the very odd position where the majority of the British public believed in 2001 that the Labour Government had failed to deliver on its five main pledges in 1997 - even though it had." And that was before the poison of Iraq was let out of the bottle.

The explanation for this cannot merely be a systemic failure of the media. It must also be a failure on Labour's part to get its message across. And there are many different explanations for that. The Government's remarkable success in alleviating poverty goes largely unnoticed because Tony Blair and Gordon Brown have always been ambivalent about selling it, wary of being seen as on the side of feckless scroungers.

But the failure to communicate what is in historical and international perspective, as Mulgan points out, a good news story on health and education cannot be explained by such diffidence.

Unfashionable though this view may be, the truth is that this Labour Government has been very bad at media manipulation and is getting worse. What Labour needs is better spin doctors, not fewer of them. Alastair Campbell had his flaws as head of the government information service, which will no doubt be explored when he gives evidence to MPs on Tuesday. But at least his was an organising intelligence that tried to bring some discipline to the communication of simple political messages. His great gift to Blair was to give people the impression that he was in control of events, so allowing him to tell a story on his own terms, even if that opportunity was not always well used.

When Campbell gives evidence to the Public Administration Committee, its Labour members should plead with him: "Come back Alastair, your country needs you. Let us get back to some good old-fashioned short-termist media manipulation that enables Blair to get across a good, true story about how we've never had it so good."