Speeches

Three years ago shortly after the formation of the coalition I called for an electoral pact between the Conservative Party and Liberal Democrats at the next election.

I now see that this was misguided.

By 2010 I had spent more than 10 years campaigning for the Conservative Party to become socially and economically more liberal.  I had hoped that we would win a majority as a modern, compassionate Conservative Party.  But when we didn’t, I saw the coalition and an electoral pact in 2015 as our best chance of achieving the broad, open and generous party of my dreams.

In my book Which Way’s Up? I described the coalition’s five foundation stones as a belief in personal freedom, a determination to offer greater opportunity to those born in disadvantage, a sense of responsibility for the health of the natural world, an understanding that Britain must constantly rethink how it is going to earn its way in the world, and a commitment to strong and independent local communities.  I believed that if we could get the Liberal Democrats to yoke themselves to us for a full two terms in government, we would in time be able to persuade most of them to merge their party into a truly liberal Conservative Party.

This was misguided for two reasons.

I had misjudged the Liberal Democrats.  Although there are some true believers in freedom in the party – and they appeared to make the running in the first year of the coalition – the heart of the Liberal Democrats beats on the left and the party’s instincts are statist.  In recent months we have seen their leader twist and turn in a desperate attempt to position himself for coalition with a deeply illiberal Labour Party after the next election – and render himself a principle-free zone in the process.

I had also miscalculated how our party would react to coalition and how we would be perceived.  I thought that our willingness to compromise with the Liberal Democrats in the national interest would help persuade the British public that we had moderated our ideological fixations, would show that we really had changed.  I did not realise that our coalition partners would do everything in their power to paint us as heartless extremists.  And I underestimated the readiness of some in the Conservative Party, and the press, to play up to the caricature and thereby fall squarely into their trap.

Three years on, I am no less convinced that entering into coalition in 2010 was the right thing to do. The national interest demanded it – and we must see it through to the end.

But I now have a very different view about the right approach for our party.  To put it simply, we must be our own liberals; we cannot rely on anyone else to do it for us.

Trying to outsource liberalism from another party not only does not work; it risks reversing the fragile gains of modernisation.  Instead we must assert our credentials as the most consistent champions of freedom under the rule of law. And we must make liberalism a more explicit and distinct part of our political brand.  For the truth about our party is this: we have never been more successful or more true to ourselves than when led by lions in the cause of advancing freedom.

Whether by Winston Churchill in freeing the world from fascism.  Or by Margaret Thatcher in liberating Britain from union militancy and Eastern Europe from communism.

In most parts of the world the suggestion that someone might be both conservative and liberal would be viewed as absurd.

In countries with no tradition of freedom, like Russia and China, conservatives want to prevent the introduction of liberal ideas like free speech and democracy. So liberalism is the enemy.

But in Britain and other Anglo Saxon democracies there is no innate contradiction between the two. The essential purpose of Conservatism is the preservation of the traditions, customs and institutions that we have inherited.

In the UK there is no finer tradition, no more established custom and no stronger institution than that of freedom under the law.

To be a liberal in Russia is to oppose the entire established order and to want to overturn the country’s legacy from history.

To be a liberal in the UK is to believe that the established order and the democratic institutions that we have inherited from our ancestors need to be defended, and their reach extended.

That’s why in Anglo-Saxon countries conservatism is freedom’s doughtiest defender and why the advance of freedom gives conservatism its moral purpose.  It is no coincidence that in Australia the main conservative party – which just won a stunning election victory – is called the Liberal Party.

Although there are some proper liberals in its upper echelons – Jeremy Browne, David Laws – in the last year the Liberal Democrat Party has shown that it is not a liberal party but a statist party of the soft left.

It believes the state should determine who can be hired to teach in schools not head teachers.

It believes that the state should stop the private sector from playing a bigger part in the provision of free NHS services, even though they have a record of delivering better quality at a lower cost to the taxpayer.

It believes that the authority of the European state should not be questioned by a referendum in which the British people are invited for the first time in 40 years to affirm or withhold their consent for our continued membership of the European Union.

In these fundamental areas affecting British society and our national interest, the Liberal Democrats do not support freedom but state regulation and control.  We need to confront reality.  After their merger the old Liberal Party lost and the Social Democrats won. And having been pushed out of its ancestral halls, liberalism is now wandering the streets of British politics looking for a new home.

While the Liberal Democrats have revealed themselves to be liberal in name only, the frustrations of coalition have at times led the Conservative Party to sound apologetic about its commitment to the expansion of freedom.

It is a Conservative Prime Minister who gave gay men and women the freedom to share in one of our greatest and most cherished institutions: marriage.

It is a Conservative chancellor that has fulfilled Maurice Saatchi’s dream and liberated millions of low paid workers from the burden of income tax.

It is a Conservative education secretary who has given parents and teachers the possibility of setting up free schools. Who has offered all state schools the freedom to employ the people they want on the terms they want, and to teach the subjects they want in the way they want subject to complete transparency about results and rigorous inspection of their performance.

And it is a Conservative communities secretary – my boss, Eric Pickles – who has given local councils much greater power to shape the future of the communities they represent.

In the last three years David Cameron’s Conservative Party has held the torch of freedom up high and shone its penetrating light into new areas of our national life.

Now I am not going to pretend that liberalism is the only strand of thought in modern conservatism.

My own liberalism is tempered by an understanding that freedom is only worth anything if it is underpinned by security.  I believe that we must sometimes compromise individuals’ civil liberties in order to defend our free society, that we must protect children from the evils of violent and exploitative pornography, that we cannot maintain a decent system of social security or free healthcare if we allow unlimited numbers of migrants to move here from around the world.

Others in our big Conservative family would give greater priority to other strands of conservative thinking:

The traditional values of family, faith and flag.

The interests of business and Britain’s wealth creators.

The preservation of our heritage and glorious countryside.

The restoration of respect to our classrooms and civility to our streets.

I believe these are all essential parts in the song a modern Conservative Party should be singing.

But I wonder if we allow sufficient space for these different voices in the Conservative harmony to sound distinctly and be clearly heard.

Modern Britain is a place in which people prize their individuality and define themselves by their interests and pastimes, likes and dislikes. Yet when they look at the Conservative Party they see an old fashioned monolith.

Big retailers and consumer brands have found that they cannot rely on a single brand with one undifferentiated message to attract and hold the attention of all the customers they need.  They have turned themselves into loose but coordinated collections of brands and product ranges, all operating from a common platform but free to express themselves individually and craft a more targeted appeal to particular consumer niches.

There is no group in society to which a monolithic approach is less likely to appeal than the generation of men and women under 25.  And recent polling by Ipsos Mori and research by the Social Attitudes Survey have revealed this age group to be markedly more liberal – on both social and economic issues – than their older brothers and sisters, parents and grandparents.  This new group of voters represents a fantastic opportunity for our party.  But we have no hope of securing their support if we approach them with the same proposition that we use to woo our stalwart supporters.

The Conservative Party will only rebuild itself as a national party which can win majorities on its own if it understands that it cannot do so by making a single undifferentiated pitch to every age group and in every part of the country.  If we are to avoid being pushed back into rural and suburban redoubt in the south of England, we need to redefine ourselves as an alliance of distinctive political forces which work together to produce a common election platform and programme of government.

There would be no better place to start this strategy of differentiation than in our appeal to the rising generation of economic and social liberals.

Since 1927, the Co-Operative Party has been a sister party of the Labour Party. It does not put up candidates for election separately from the Labour Party but offers Co-Operative Party endorsement to a proportion of Labour councillors, candidates, MPs and peers. 32 Labour MPs currently also represent the Co-Operative Party. Their number includes some of the left’s most interesting new talents like Stella Creasy, Luciana Berger and John Woodcock.

In 1947 the National Liberal Party (previously the Liberal National faction of the gradually disintegrating Liberal Party) merged at constituency level with the Conservative Party.  Until 1968 it continued to maintain a distinct political profile and national brand.  Candidates who were associated with this new affiliate stood under a variety of labels: ‘National Liberal, National Liberal and Conservative, Liberal and Conservative’.  Michael Heseltine stood as a National Liberal in Gower in 1959.  And John Nott began his parliamentary career in 1966 when he was elected as National Liberal MP for St Ives.

My question is this.  Is it impossible for us to contemplate reviving the National Liberal Party, or something like it, as a an affiliate of the Conservative Party, which only puts up candidates for election jointly with the Conservative Party?  Existing MPs, councillors, candidates and party members of liberal views would be encouraged to join. And we could use it to recruit new supporters who might initially balk at the idea of calling themselves Conservative.  In three-way marginals and the key target seats that we have to take off the Liberal Democrats, an explicit National Liberal pitch might make the difference between victory and defeat.

In speaking today I know that I have posed more questions than I have answered. It is not for me to decide whether the solution I have proposed is workable – although I hope that people will not rush to judgment.  But I am sure of one thing. The Conservative Party will only win office on its own when it has established beyond doubt its commitment to the advance of freedom. And found the courage to stake its claim as the party that all liberals should vote for.

Nick Boles MP is Minister for Planning

Can I start today with a mea culpa.

I used to be an economist. Worse, for a while I was an economic forecaster.

My only defense is that I was young and naive. I think the main thing I learned as an economist is to know just how little we know.

And while my past attempts to forecast the economy might make us laugh, there is another aspect of the economists’ trade that makes me cringe, and it’s about what we we’re here to talk about today.

I want to make an argument about why low pay matters, and what we can do about it.

My central argument is this:

First, that tackling low pay is both a moral and an economic imperative.

Second, that the modern Conservative Party are, must be, and must be seen to be, the Party of the low paid.

And third, that the policies of the centre right are the best to get us there.

Taking each in turn. First, that increasing low pay is both a moral and economic mission.

There are some on the right who argue, rightly, that Britain needs to be more competitive, but then argue, wrongly, that lower unit labour costs are the route to get there.

But that fundamentally misunderstands that these so-called unit labour costs are not a means to an end. For one person’s unit labour costs are another’s wages. Low labour costs mean low pay. And pay is prosperity and is a goal in itself. Higher pay does not make a country less competitive: it makes a country more prosperous.

Now there are those on the left who accept the importance of higher pay, but reject competitiveness as a route to it. They argue that higher taxes or borrowing are the route to higher pay. But this ignores the crucial question of where the pay – the prosperity comes from. We have no God-given right to pay and prosperity higher than most of the rest of the world. We have to earn it, not borrow it from our children.

So increasing low pay is morally and economically right.

Second, it’s vital the modern Conservative Party is and is seen to be the party of the low paid.

That’s what it means to be a modern Conservative.

Of course, a modern Conservative Party needs to be comfortable with modern Britain. We must constantly reassert our strong and heartfelt commitment to public services, like passionate support of the NHS free at the point of delivery, and raising standards in education for all.

And of course we recognise Britain’s social and cultural changes.

Now, today, the Tories are the energetic, forward looking party, excited by new technology, optimistic about the future: where once we’d campaigned against phone masts, now we were pushing for superfast broadband.

But being comfortable with modern Britain isn’t enough.  We must be on the side of the low paid.  I am delighted that this is one of the main themes emerging from Bright Blue’s forthcoming book, Tory modernisation 2.0.

This means being fair in the deficit reduction: that we are all in this together. The biggest burden rightly falls on those most able to bear it – the top ten per cent bear the greatest burden, so inequality actually fell sharply in 2010/11 to a level last seen under the last Conservative Government.

It’s why raising the tax threshold is such an important policy: so if you’re on the minimum wage your income tax bill has been cut in half.

And where we directly control pay, in Government, the public sector pay freeze excluded those earning less than £21,000. Our public sector pension reforms benefitted the lowest paid, and the highest paid took the greatest hit.

But it’s also about tackling low pay across the economy – outside areas directly under Government control.

That’s the third point: that it’s the policies of the centre right that are best placed to deliver for the low paid. What you could call conservative means for progressive ends.

Being a modern conservative party means ruthlessly supporting each and every person to reach their personal best. And here the modern, inclusive, social policies and economic policies are intertwined.

Britain cannot compete unless every person reaches their potential. And the best way to do that is by radical education reform.

Britain cannot deal with our deficit without tackling the social injustice of youth unemployment. That means radical welfare reform, supporting those who work hard and want to get on in life.

Measures like Traineeships announced today, and high quality Apprenticeships to give all young people the skills they need to get a job, and then a better paid job.

The only way to compete in the global race is to tackle low pay by tackling low productivity, to ensure globalisation is a race to the top, not a race to the bottom. That’s not just an economic challenge but a vitally important social challenge too.

Supporting the low paid in this way means tackling immigration. While challenging for some businesses, is right for the low paid whose wages were undercut.

It means building housing by reforming planning, so people can afford to buy a home.

It means passionately supporting the minimum wage, and indeed strengthening it, as we did when we introduced the Apprenticeship minimum wage.

This is a vital economic mission, but it’s a social mission too.

My argument has always been that capitalism is stronger when the link between effort and reward is stronger, at every level of the income scale. That’s why in the past I’ve railed against rewards for failure for the highest paid.

Now we must deliver rewards for success for the lowest paid.

Tories are in touch with modern Britain. Supporting those who want to work hard and get on in life: that is modern Conservatism in action.

Matthew Hancock MP is Minister for Skills

Some of the most resonant phrases which encapsulate deep truths come from obvious sources: the Bible, Shakespeare or the great novelists. Others come from less elevated sources. I have always admired the anonymous advertising copywriter who devised the phrase “Traditional Values in a Modern Setting” for one phase of the Daily Telegraph’s Evolution.

Conservatism is about preserving the best traditional values: love of country, family and place. The desire to enable each individual to make the best of his or her talents, while giving that individual space. The nurturing of neighbourly feelings to create genuine communities. The building of a state which is effective but not intrusive. The release of the economic energy of the private sector. A positive engagement with the rest of the world.

The Conservative Party, when it is successful, is about finding ways of making these values relevant and popular in a modern setting. Modern Conservatism is not an oxymoron. It is the ideal to which the Conservative Party should always aspire.

Clearly modern Conservatism changes with the times. From Disraeli to Thatcher great Conservative Prime Ministers have been modernisers, but their battles have been fought and (mostly) won, and we have moved on to new terrain. Indeed even in the seven years of David Cameron’s leadership, modern Conservatism has evolved significantly.

In the early years it was necessarily about showing that Conservatives were not just hard-hearted economists, but also cared about communities, public services and the environment. We still do, and we always should do. Since 2008 though we have also had to show how our values work in a bleak economic climate. There is a time to be cuddly and a time to be gritty. These are gritty times.

In the post-Olympic euphoria I pointed out that the Conservative Party needs to pass the Danny Boyle test of showing that we are at home in modern Britain. I was taken to task by one pundit for fighting old battles which have now been won. I disagree with him because although the form of modernisation changes over time, as I have said, the battle to keep the Conservative Party modern is a continual struggle.

That is the background to the exam question I have set myself. “What will Modern Conservatism mean in 2015?” This is, it is important to realise, not the same question as what will it take to win the General Election in that year, although the two are obviously related. But I am not saying that these propositions will be the central battleground at the Election. We all suspect that it will be, as ever, the economy, stupid.

I would put forward five propositions which will make up contemporary modern Conservatism in 2015.

The first is that it needs to spread out beyond the comfort zone of the South East of England. There are natural Conservatives all over the UK, as has been shown by the recovery of the party in Wales over the past decade. The 2010 Election spread Conservative electoral success to places where it had not been seen for many years, and I believe that the instincts and insights of MPs from these non-heartland seats is particularly valuable. The fact that in the recent elections for Police and Crime Commissioners, in mid-term and with Independent candidates banging hard the anti-politics drum, Conservative candidates won in Humberside and Cumbria shows that the caricature of a Party uncomfortable beyond the Home Counties is as unfair now as it ever has been.

The second is that it needs to be influential beyond the comfortable middle class. In many ways the most potentially exciting of the new groups being formed inside the party is Blue Collar Conservatism. Without much fanfare it immediately attracted supporters from all ideological wings of the party. The group itself makes the point that in 2010 the strongest swings to the Conservatives came from skilled and semi-skilled manual workers. Taking low- paid workers out of tax by increasing personal allowances is a very Tory idea, and if my Liberal Democrat colleagues support it as well that’s a bonus. But it is still centrally a Tory idea.

Inevitably in the current age promoting the universality of Conservative ideas will involve pointing out the incredibly wide background of current Conservative MPs—in flat contradiction to conventional wisdom. As someone born in a terraced house in a small town in South Wales I am entitled to feel that the tired accusation that I, or anyone, only becomes a Tory because of a privileged background is a substitute for reasoned argument. This variety of background of its members has been true of the Conservative Party for most of its history. It is certainly true today.

The third proposition is that the party must not just be for those who have already achieved, but for those who are trying to make their way at any socio- economic level. Strivers is the current word of choice for people we all want to encourage, and it is a good description in tough economic times. The Government ‘s Welfare Reform measures are designed precisely to help those

who are keeping themselves afloat, and not assuming an entitlement to a way of life which in the past could be better on welfare than in work.

But this proposition is not only relevant in the area of welfare reform. As Liz Truss has pointed out, one set of potential strivers who are being failed by the system are mothers who want to work. Since the 1980s one of the strengths of the British labour market was that it made it easier for women to work. In the 80s and 90s mothers in the UK were more likely to work than their counterparts in Germany or the Netherlands. This position has now been reversed, and we now have a lower percentage of working mothers than Germany or Holland, and even France. The reason is not a change in desire to work. Half of those non-working mothers surveyed wanted to work, but a key reason preventing them was the cost of childcare. This is therefore another key policy area where helping those who want to help themselves to get on, that key Tory principle for centuries, is directly relevant today.

The fourth proposition is that we need a balanced portfolio of policy interests to show that Conservatives are not one-dimensional. There is no contradiction in doing some things that our political opponents see as desirable, and therefore surprising for a Tory-led Government, and some things that they find typical. We should only care that what we do fits with our values and beliefs. Therefore I am proud to be a member of a Government that is meeting its targets on overseas aid, and equally proud to be a member of a Government that is cutting immigration numbers. The first is a policy that shows we care about the most unfortunate people in the world, in line with the principle of engaging positively with the world beyond our shores. The second is a policy that promotes social cohesion, in line with the principle of supporting genuine communities. As it happens, cutting unskilled immigration in particular helps those who are striving at the lower end of the jobs market, so these propositions reinforce each other at crucial points. Only Tories, rather than Liberal Democrats, will recognise that these policies are mutually reinforcing.

The fifth proposition is that our long-term economic interests must remain at the heart of Conservative policy. This sounds obvious but it is not a platitude as it impinges hugely on the debate both party and country are going to have about Europe in the next few years. The central point which needs to be stated calmly and clearly is that we are better off in.

It is true that the old pro-European arguments, which bought into a vision of inexorable progress towards a United States of Europe, no longer hold any appeal for Conservatives. There is though a hard-headed pragmatic economic argument that our membership is to the advantage of the British economy, and therefore the British people, and that this remains the case even with the enormous current problems faced by the Eurozone.

One of the key growth levers the Chancellor is pulling is to rebalance the economy so that it is no longer over-reliant on financial services. This rebalancing is helped hugely by global manufacturing companies coming here to sell into the European market. The British car industry is probably the biggest visible symbol of how inward investment, enormously helped by our membership of a wider single market, can create long-term prosperity and jobs for tens of thousands of British workers. Taking a risk with that prosperity by saying we cannot negotiate a more comfortable way of remaining in the European Union would be folly.

What has been true for the car industry is true of other industries, whether in services or manufacturing. Major companies invest in the UK because they want access to the Single Market. The problem with the Single Market is that it does not go far enough, and removing the remaining barriers, particularly in the digital sphere, would be an enormous benefit to entrepreneurial companies of the type which abound in Britain.

There is a fantastic vision of an EU which remains a single market, including the UK, but which in all other respects allows the UK to be outside. This is a fantastic vision precisely because it is a fantasy. What is in this for those on the other side of the negotiation? Ask yourself the simple question. Would we be more or less likely to negotiate a good deal for UK-based companies wishing to trade with Europe if we had pulled out of the EU? And ask yourself another simple question. If you were a company in China or India wishing to set up a base in Europe, would you be more or less likely to choose Britain if we had withdrawn?

The EU is imperfect, irritating, and needs to change badly. There are a number of areas where this Government is fighting to achieve this change. Staying in and fighting is the best way to meet our economic needs.

These five propositions show that Modern Conservatism is not only flourishing but is capable of addressing the latest problems that face the country. Everyone is aware of the great steps we have taken in modernising our schools and our welfare system, and similar radical reforms are taking place in our policing, and in other parts of the public sector. Even in a Coalition Government we can achieve significant progress in a direction with which Conservatives can be comfortable. I believe that relentlessly pursuing an agenda which applies our permanent values to new challenges, and which recognises how fast those new challenges arise, gives us a Modern Conservatism of which we can be proud, and which incidentally is the right route towards a majority Conservative Government after the next Election. I am sure that Bright Blue will play a significant role in helping us towards that goal.

Damian Green MP is Minister of State for Policing and Criminal Justice

It is evidence of true political dedication to be gathering on a weekend in July to discuss Conservative modernisation. You might be wondering whether the exercise is worthwhile when you could be watching the Olympic cycling road race or the swimming heats. But let me assure you that it matters: we only have a Conservative party today because of previous generations of modernisers. I tried to show this in a pamphlet, After the Landslide. It was written after our landslide defeat in 1997 to show how we could learn from our successful recovery after 1945 and should avoid the terrible mistakes after the heavy defeat of 1906. I was using historical evidence to make a contemporary point – just as in Soviet Russia if you wanted to say something about Stalin you wrote about Ivan the Terrible. My main argument was that to regain power after a landslide defeat our Party ended up having to change far more radically than it was at first willing to accept. We had done this before and could do it again. One of the strengths of the Conservative tradition is that ultimately we understand we are rooted in the British people as they are, not as some theory says they should be. There is a strand of Conservative utopianism which is uncomfortable with this – though for us as Conservatives our utopia tends to be in the past. But there never was a golden age to which we can return. The Party may have started its years in opposition with a strong element of bring-backery, but that had to be abandoned as instead the party engages with the country as it is not as it imagines it to be.

Bold thinking about what the party stood for was also crucial to recovery during the years of Opposition. But then after we get back the business of Government and the sheer busyness of being in government can make it hard to reflect on the underlying beliefs which should make sense of what you are doing. You end up with laundry lists of achievements or accounts of Conservative beliefs which are banal and unreflective. This conference today is an excellent opportunity to avoid these perils. Instead we can deliver mid flight refuelling and go to the really big issue of what modern Conservatism is. This is particularly important now we are in Coalition and need to remind ourselves what Conservatism is all about. So let me jump straight in. For me there are two principles at the heart of Conservatism.

First is personal freedom and responsibility. Nothing beats the sheer excitement of freedom, mobility, enterprise. Our party above all has a robust belief in personal initiative and personal responsibility. This is if you like the classical liberal tradition – and one reason why we should not be uncomfortable about being in Coalition with the heirs to the old Liberal Party who still have John Stuart Mill and William Gladstone as their heroes.

But that principle on its own is not the whole story. Secondly there is the need to belong, to be rooted in a community and to see oneself as part of a tradition, a contract between the generations of which we are just one small part. That second principle is harder to pin down in one word: you could call it belonging or perhaps more obviously, responsibility. Conservatives denounce fiscal imprudence or constitutional vandalism as one-generation thinking that did not value the future nor respect the past. Conservatives understand the meaning that comes from commitments to things greater than oneself. It is why the Conservative party never settled for pure classical liberalism which was described as “very nearly true”. We are not libertarian loners. There is more to life than the pursuit of personal freedom and independence. At the Olympics we are going to see some extraordinary personal achievements but we will also be celebrating team sports too. And then skill in passing to a team-mate can matter as much as pure personal prowess.

If the first principle is about wings the second is about roots. A lot of my writing about Conservatism over the years has been wrestling with the tension between these two principles. Many smart critics on the left have denounced the free market as a threat to community. There is sometimes an undercurrent of anti-Americanism here. Our native communitarian traditions are seen as the innocent red squirrels with nasty rapacious grey squirrels driving them out to distant rural fastnesses. Another rather different line of criticism is that with these two principles Conservatism can justify just about anything. But I believe that these two principles can be held in a creative tension, neither in fundamental conflict nor just bland and empty. One reason why I have come to believe these two principles are at the heart of Conservatism is that they do indeed explain our party’s extraordinary flexibility and longevity – we can change our stance to match the needs of the age.

The creative tension between these two principles is one of our great strengths. It gives Conservatism its humanity because it is a real tension in ourselves. Each of us in our own lives has to decide whether to change job or move house or perhaps in some cases even split with a partner when new opportunities conflict with old commitments. And we can change the balance as we go through life. Perhaps when you are young and rootless, coming to a new town to get your first job, it is individualism and personal freedom which matter above all. You barely use public services but feel the cost of the taxes you pay. For you it is the libertarian strand that is most exciting. Indeed it is what brings many of us to Modern Conservatism when we are young. I was tearing the envelopes off the latest IEA pamphlets, boldly applying the free market to corporatist monstrosities which had been protected from market analysis and market forces for decades. For younger people in particular it is the Party’s appeal to openness and opportunity which resonates. Then as you get older you put down roots and are perhaps not so attracted by the strenuous disruptive power of the market. You can be more keen on keeping what you have got – the balance shifts from the excitement of the market to the solid rights of property. This indeed is one of the pressures we face within the party – the balance between the claims and approaches of different generations. It is the balance between opportunity and possession. In my book, The Pinch, I argue that this conflict of claims between the generations is being played out throughout our society: it applies within our own party too.

There are other ways in which these two great principles are connected, not just through the pattern of the life cycle. One of the most distinctive features of British Conservatism is a respect for institutions – from our great national institutions which are a great source of national pride to our local ones and of course the family too. They matter for many reasons. But in particular they connect the two strands of Conservatism – these institutions protect our freedoms but also give a sense of belonging. They emerge and flourish in a free society but they offer a meaning to our lives which free markets on their own cannot deliver. Indeed they provide the moral capital of trust cooperation and honesty on which a market economy depends. It becomes hard to distinguish between the individual and the social. As well as individual sporting excellence and team events there are also individual sporting achievements, such as Bradley Wiggins winning the Tour de France, which depend on a team effort. We love our country for its institutions: it is not blood and soil nationalism. So our two Conservative principles emerge from our own national experience. They are distilled from our own country’s history. David Cameron’s powerful statement that we believe in society but it is not the same as the state puts him at the heart of this tradition.

Modernising the Conservative Party in the 1970s meant opening it up to the sheer dynamism of the free market revolution that was being sparked in the think tanks and their lively and productive research programme. By the 1990s modernisation meant rediscovering the value of the civic institutions that were not just part of a market but shaped it and had a far greater personal significance for us than market transactions. I set out these arguments in Civic Conservatism in 1994, tackling the critique of Conservatives that we did not understanding life beyond laissez-faire. It was a deliberate corrective to a picture of bare-earth Conservatism in which there was supposed to be “no such thing as society” – a completely misleading picture of Margaret Thatcher’s own beliefs by the way. It is easy to talk about community and society but what is distinctive about Conservatives and makes our account more valuable is we recognise the role of real functioning institutions in giving communities shape. Our task in Government is to strengthen these institutions. With my ministerial responsibilities I am fortunate to be able to work with universities and research institutes which are respected across the world and my job is not just to challenge them but to serve them too.

When the political environment is above all shaped by public spending cuts it is as important as ever to remind people of these Conservative beliefs which go beyond pure economics. So this agenda still matters. And I believe the intellectual foundations for Civic Conservatism are far stronger now than twenty years ago because of two particularly exciting developments. We can do more to incorporate these latest intellectual and technological advances into our Conservatism – it really is Conservative Modernisation 2.0.

First is the extraordinarily exciting convergence of evolutionary biology, game theory and neuro-science. Some Conservatives have been suspicious of such intellectual disciplines but often these researches confirm Conservative insights. Most weeks now there is a new book applying ideas from these disciplines to explain how societies function and how co-operative behaviour emerges and is sustained. We understand far more about reciprocity, trust and cooperation. I drew on this literature in Chapter V of The Pinch to try to offer a Conservative account of the Social Contract. Elinor Ostrom who sadly died last month was a crucial figure who got the Nobel Prize in economics for her work on understanding how co-operative institutions could emerge. She did not just bemoan the so-called tragedy of the commons in which collective action breaks down when personal incentives are too strong. Instead she showed how legitimate personal incentives could be harnessed to create co-operative behaviour through local institutions which sustained agreements on for example how many of your domestic animals would graze on common land. With insights like hers we understand the forces sustaining civic institutions much better now than we did twenty years ago. The most important lesson from this rich and burgeoning literature is that institutions matter. They provide environments in which we inter-act repeatedly and so generate reciprocal altruism which becomes cooperation.

There has been a second development over the past twenty years too: technological advance has transformed social connections. A smart mathematician improving the Facebook algorithms to enable you to find contacts closer to you might do more for social cohesion than many Government White Papers. I pay tribute to Steve Hilton and Rohan Silva for understanding very early on the significance of the rise of the social media for a truly modern Conservatism. They saw sooner than most of us the optimistic possibility of new forms of community harnessed by social media. That powerful image of hundreds of volunteers, their brooms held aloft, coming together the day after the riots to clear things up, shows how the social media can be a force for good.

Margaret Thatcher understood these two principles of freedom and responsibility. All too often the views I hear attributed to her today by her enemies and sometimes even her followers are a caricature of the person I worked for in No 10 during the mid-1980s. Two conversations with her make the point. I remember talking with her about whether the BBC could be financed by advertising. She was against it for a very practical reason – the advertisements would interrupt the flow of the programmes. I remember another conversation with her Margaret Thatcher when I said to her how I believed in laissez-faire. She corrected me and said, “No. It is ordered liberty.” I think she was making an important philosophical point though perhaps she was just objecting to my using French.

“Ordered liberty” is an expression from the Scottish Enlightenment of the eighteenth century. Adam Smith, David Hume and Adam Ferguson were the first great thinkers about the modern market economy and what kind of society it would be. Their only rivals, another great school of political economy, is the twentieth century Austrian school who understood that order could be spontaneous: it need not be planned any more than the rain forests of Brazil or the distribution of native American tribes was planned. One of their texts which most influenced me as a young student was Hayek’s great essay, The use of knowledge in Society. It is about dispersed knowledge. That essay emerged from the debate about whether a centrally planned economy was possible – the so-called socialist calculation debate. The Austrian argument was that it was impossible for all the information dispersed around a market economy to be brought into one single computer however powerful because some of the information was tacit and only captured in a real market transaction.

Such arguments are still very topical today as they reminds us, like Nicholas Taleb, of the sheer complexity and uncertainty of the real world. Dispersed systems are more responsive and resilient. Hence we need not centralisation but decentralisation – a principle this Coalition is applying. We are the true decentralisers; there may be a small and distinguished group on the Left like Maurice Glasman who believe in that rare thing, socialism in one county, but they are very much a minority. And for this decentralisation of power to be real it has to be decentralisation and transparency of information.

We can see the importance of this if we look at the biggest single transformation in economic structures in the history of the world – The Industrial Revolution.

Understanding that great event, and why it happened in Great Britain helps us to understand sources of growth today. The Industrial Revolution used to be explained by the historians in very materialistic terms – we had the iron ore close to the coal. But nowadays we look at it much more deeply as depending on economic and social structures. Joel Mokyr’s account of the Industrial Revolution, The Gifts of Athena, focuses on the vigour of Britain’s network of publications and learned societies which enabled efficient information exchange so technical advances could spread and different ones brought together in new ways. Recognising the importance of this free flow of information has helped shape our approach to open access to publicly funded research today.

Now let me turn to three biggest challenges facing Coalition. It is easy to forget the terrible circumstances when we came to office. We faced not just an economic challenge but also a social challenge and a political challenge. The Coalition is an extraordinary opportunity to tackle all three.

First must come the tough economic challenges. The whole Coalition recognised that we had to take strong decisive action to get a grip on the deficit. If George Osborne had not acted there would have been a fatal loss of confidence in the ability of the new Government to sort out the fiscal mess we inherited from Labour. But we absolutely understand that our growth strategy has to be more than tough fiscal measures and monetary activism. That is why the Coalition is developing nothing less than a new industrial strategy what is really an enterprise and innovation strategy. We recognise that Government has a positive role here. We have our convening power displayed in the leadership councils which Vince Cable or I chair that bring together publicly funded researchers and business leaders. When they see that we are investing it encourages them to invest alongside. And whilst no one can know for sure what will be the key technologies of the future we can scan the horizon to see what is likely to be coming up. One reason I am a long term optimist is that Britain has a strong presence in many of these technologies – such as software for high performance computing, nanotechnologies like graphene, synthetic biology, innovative space vehicles and the agri-science that will feed the world. We are still a country where much of the world’s cutting edge research is conducted. With the strong support of George Osborne, we are determined to keep our leading position. That will generate the prosperity and the jobs of the future.

Sometimes this is denounced as Governments picking winners which can all too easily become losers picking Government programmes. But we can learn from the extraordinary rise of British sport since the humiliation of the Atlanta Olympics when we won just one gold medal and were 36th in the medal table. We had to raise our game and we did. John Major’s lottery funding helped as did sustained support from every Government since. This included rigorously targeting our efforts on sports like rowing, sailing and cycling where we were thought to have the best medal hopes. At Beijing we won 19 gold medals and came fourth in the medal table. Who knows what Team GB will accomplish in London. But what has happened already is an illuminating and optimistic story. Ultimately it depends on individual talent and determination. But we cannot just leave sportsmen and women on their own. They have to be trained and they need the right facilities. Our universities have made a big contribution – not least with the research on techniques and equipment that can make all the difference. Indeed innovation is driven by competitive sport – light weight carbon fibre was first used in sporting equipment for example.

All this tells me that whilst Governments can’t do everything we can do something. We can scan the horizon for the future technologies where we have a scientific lead and a business opportunity. We are not going to get it right always but we should not allow fear of mistakes to stop us trying. We can encourage business to invest by showing what we are doing alongside them. I know that when we invest in high performance computing power for our scientists that feeds through into more software skills which attracts more business investment as well. I know that our commitment to medical research in the life sciences strategy has helped keep internationally mobile life sciences firms here in Britain.

I sometimes read right wing critics describing Government as a necessary evil. Burke, Disraeli, Salisbury, Baldwin, Churchill even Margaret Thatcher would have thought it bonkers to assume that Government is evil. We must limit Government and recognise its failings and inadequacies. Sometimes we can best raise the growth rate by getting Government out of the way – we must never relent in our battle against red tape. But Government has an essential role in a modern advanced economy too, not least as a national pool to share risk and then harness it creatively. We are doing everything possible to harness the creative power of Government to get the economy growing.

The social challenge is quite simply that the gaps between the members of our society have been getting wider. We used to think modern societies delivered ever more social mobility almost automatically. The publication in 2005 of evidence that social mobility was going backwards shook this confidence. My book The Pinch is about the new generation gap. We used to assume that our kids were bound to have the same opportunities we had, but now people are not so sure. It is why it is so important to offer a fair deal to younger people by spreading opportunity. Conservatives must never be just the party of possession: we have to be a party that believes in spreading opportunity. This is a belief we share with the Lib Dems and I pay tribute to Nick Clegg’s personal commitment to this agenda.

University is the first stage of education process where people perform better. That is why it is important to offer true meritocratic access to university without sacrificing standards or imposing quotas. The case for our higher education reforms is quite simply that they will lead universities to focus far more intensively than ever before on the quality of the teaching experience because they will be competing for students who bring their funding with them.

These economic and social challenges were compounded by a political challenge. There had been a catastrophic loss of confidence in politicians after the expenses scandal. The Coalition was an arithmetic necessity given the outcome of the Election but seeing two different political parties working together for the good of the country helps restore people’s confidence in politics. And as well as a loss of confidence in politicians there had been a loss of confidence in the capabilities and competence of Government. I certainly believe Government has sometimes in the past tried to do too much and has ended up doing it badly. But that does not mean we should head to the mountains of Montana, denouncing Government as always bound to fail.

The Coalition is working effectively. It means policy has to be evidence-based because you cannot just assume unthinking tribal loyalty amongst your colleagues to back what you are doing. And I have to say that it has displayed the exceptional civility and effectiveness of David Cameron and Nick Clegg working together.

Conservative modernisation is not something peripheral. It is not a job you do once and then stop. It is a continuous process of ensuring that we do not lose touch with the nation we represent. It is mainstream Conservatism. It is at the heart of what we are doing in this Coalition. And when we face the electorate again in 2015 we will be able to look back on our achievements with pride.

The Rt Hon David Willets MP is Minister of State for Universities and Science