Philip Hammond - secret Fabian?

Or, at least, the shadow Chief Secretary to the Treasury is a man who seems to be prepared to admit some uncomfortable truths for his own party.

The Financial Times seems to be the only paper to report his speech to the think-tank Reform yesterday - in which he warned his party that a Tory government would not be able to cut government spending, and could not try to do more than restrict its growth (while, in passing, signalling that they will not reverse a new top rate of tax either).

But I wonder how many Tories agree that reducing the size of the state would be 'gesture' politics.

As the FT reports:

Thatcherite MPs and activists would like the Tories to reverse some of Labour’s perceived profligacy, using a reduction in the size of the state to fund tax cuts.

But Mr Hammond suggested this “smaller state” argument failed to address the upwards pressures on spending. Speaking at a seminar convened by Reform, the think-tank, he said a cut to the overall spending level would be a “gesture” only, given trends such as the ageing population. He warned that it would also be “politically extremely difficult – I don’t think it’s ever been done for a sustained period”.

"I don't think its ever been done" is very interesting indeed. How rare it is to find anybody on the right who will face up to and engage with why neither Margaret Thatcher nor Ronald Reagan managed to cut government spending or rolled back the state: a cause which is no much less popular than the right thinks.

Challenging that foundational myth of the small state right could pave the way for the centre-right's genuine 'clause four' moment - returning the tribute paid by Bill Clinton in now acknowledging that 'the era of smaller government is over'.

The problem is that, in doing so, Hammond returns to accepting what Keith Joseph argued against - the "ratchet effect" through which 'status quo conservatism' would accept that the centre of political gravity would move, over time, to the left.

And yet it was this ability to retreat which was, to a large extent, the great secret of conservatism's 20th century survival and success: Conservatives argued against change as unnecessary but, crucially, it adapted and absorbed change once it happened, and could at once defend the new status quo. (Dispositional conservatives could always argue, in the final line of Oakeshott's famous inaugural lecture at the LSE in 1951 that "the world is the best of all possible worlds and everything in it is a necessary evil").

And that was a very successful electoral and political strategy. But, for Joseph, this meant that all Conservatives between 1951 and 1974 effectively were forced to govern as if moderate social democrats. (Margaret Thatcher's record on introducing comprehensive schools being just one example). Hence Joseph's famous statement in Reversing the Trend that:

"It was only in April 1974 that I was converted to Conservatism. (I had thought I was a Conservative but I now see that I was not really one at all.

"‘I was at that time a statist’, he confessed. ‘I went along with the then fashionable policies".

The Conservative dilemma today is that Keith Joseph and Margaret Thatcher seemed to provide tantalising proof that Conservatives could do more than adapt: the clock could be turned back (albeit less dramatically than they had hoped). And this enabled them to give the Conservative Party something rather new and dangerous: an ideology.

This is David Cameron's dilemma. He is in many ways a dispositional Conservative, recognisable from the era of Macmillan and Douglas-Home. I do not think he would have many problems accepting and adapting to the New Labour settlement if that is the price of power.

But he is also a post-Thatcherite Conservative. And he does not lead Macmillan's party but a post-Thatcherite party which does now believe in something more than gradual retreat. What it believes in above all is a smaller state. Some are aware that it is an ideology which has done the party more harm than good since 1990, but it remains what they believe.

It could be that some (but not all) in the leadership would like the party to believe in something else. But I don't think that they have yet worked out what that might be.