Back from the Brink: The Inside Story of the Tory Resurrection. Peter Snowdon
deputy, tried in vain to draw a line in the sand under the party’s Thatcherite inheritance. This exposed a real taboo within the party about acknowledging the limits of the Thatcher revolution while understanding how the political landscape had changed since her fall. The conservative commentator Andrew Sullivan adeptly summed up the tension when he wrote that the Tories were ‘as culturally inept as they were economically successful. They created the substance of the new country but they couldn’t articulate it.’39
Lilley had been associated with the Thatcherite wing of the party. His notorious rendition of ‘I’ve got a little list’ from Gilbert and Sullivan’s The Mikado at the 1992 party conference included a jibe at ‘young ladies who get pregnant just to jump the housing queue’. It was a performance that would be played over and over again on the airwaves, much to his embarrassment. However, he was also one of the party’s clearest thinkers, alongside Willetts, and his attempts as Major’s Social Security Secretary to reform the welfare system in the 1990s had earned him respect throughout Whitehall. Hague asked him to conduct a review of policy in June 1998, when he relieved him of his role as Shadow Chancellor while promoting him to the deputy leadership.
Lilley embarked on a consultation exercise called ‘Listening to Britain’, in which shadow ministers would meet nurses, teachers and other members of the public and ask what mattered to them. He was not encouraged by his colleagues: ‘They all wanted to stand up and give a speech. I said, why start off giving a speech if you are there to listen?’40 What Lilley could distil from his review helped to inform the R.A. Butler Memorial Lecture which he delivered at the Carlton Club, the social hub for Tory grandees, on Tuesday, 20 April 1999. By coincidence, on the same evening over a thousand Conservatives would descend on the Hilton Hotel in Park Lane for a dinner to celebrate the twentieth anniversary of Mrs Thatcher’s first election victory. Both the timing and the substance of Lilley’s lecture set the stage for a damaging row inside the Shadow Cabinet. ‘Once he gave it all hell let loose,’ recalls Willetts. ‘No one realised that it was lighting the blue touchpaper.’41
Lilley argued that the party had settled the economic and industrial questions of the 1980s on its terms, and now the debate had moved on to the state of the public services. This chimed with Cooper’s analysis. In characteristically logical fashion, Lilley sought to underline the point. ‘We were associated in the public mind, rightly or wrongly, with hostility to the public sector,’ he recalls. ‘As far as the NHS was concerned there was a feeling that we wanted to flog it off to our friends in the City and make people pay at the point of care. They were absurdly false caricatures, because we had never done any of those things whilst in power.’42 Only if the party succeeded in ‘slaying the myths’ about privatising the NHS through the back door would the public begin to listen to what it had to say about reforming the public services. ‘It was a way of getting onto gentler territory for the electorate, but those messages were a little too early in the life of a badly dented and uncertain party,’ says Coe.43
Various drafts of Lilley’s speech had been circulated to Hague and the Shadow Cabinet, but much as with the discussion over the ‘Kitchen Table’ document, there was surprisingly little debate before it was given. ‘We let it go through without enough attention because we were thinking about other things,’ claims Hague.44 It is more likely, however, that no one bothered to read it properly. Lilley’s speeches were not known for creating much press coverage, and in view of the clash with the Thatcher anniversary dinner, it was decided that key sections of the speech would be briefed to the papers as a major statement about the direction of party policy. The press had a field day over the timing. Headlines such as ‘Tories: We Won’t Privatise Hospitals’ on Monday would be succeeded on Tuesday by ‘Tories: We’re Abandoning Thatcherism’.
Lilley believed that lobby journalists, particularly those from The Times, had their own agenda: to destabilise Hague’s position before local elections in May. But some of those inside Central Office were incredibly angry. They believed that the speech gave the impression that the party would no longer contemplate private-sector involvement in the public services, which even Blair’s government was considering. For the party’s Membership Director, Michael Simmonds, it was a point of political principle. He decided to leak an earlier version of the speech to The Times, and was promptly dismissed after an internal inquest. ‘It showed us at our worst, because we had a serious contribution to the philosophical debate, and we had an opportunity to have a good debate,’ laments Ann Widdecombe. ‘Instead we had the press in full cry saying it was a departure from Thatcherism, which is not what Peter had said, and a situation where the boys in Central Office were playing a game of personality politics. All it did was portray us as unfit for government.’45
But there was more to the row than game-playing. Lilley’s speech touched on a raw nerve, which stemmed from the bitterness over Mrs Thatcher’s downfall. ‘It was a sizeable moment,’ recalls Coe. ‘I was with William the morning after the speech, on our way to Liverpool, and although he was always calm under fire, his serenity was at full stretch. The way the media dealt with it, added to the strident voices in the party, meant that this was serious. It was fairly bleak.’46 When the Shadow Cabinet met later that week, several senior figures expressed their indignation. Francis Maude, Lilley’s replacement as Shadow Chancellor, was angry that the ground had not been better prepared. ‘I think you should calm down, Francis,’ Hague told him. ‘No, sometimes you shouldn’t be calm,’ Maude retorted. ‘This is a time for panic!’ Michael Howard, the Shadow Foreign Secretary, was even more scathing: ‘This is the most dangerous and damaging speech I have ever read in my entire career.’ Some of those present were struck by the ferocity of Howard’s reaction. ‘It chimed in perfectly with the criticism that Labour had always made of the Thatcher government, which we had always resisted. I didn’t hold back,’ Howard recalls.47
Regardless of the fact that it had not been Lilley’s intention to repudiate Mrs Thatcher’s achievement, the row revealed a real reluctance among influential senior figures to accept that the world had moved on since her day. Lilley believes he could have done things differently: ‘I was responsible for it, and there was an unexpected response, so I don’t blame anyone else. I would still have said it, but I would have done some different preparation to calm down the loonies.’48 For others, the speech was a turning point. ‘The Lilley episode was a terrible warning,’ says Willetts. ‘It raised the “no entry” sign over various party taboos, and it made it much harder to make changes to policy.’49
The row was the last thing the party needed before the local elections. ‘It genuinely did rock Hague’s leadership, because it brought to a head the fact that we were doing badly,’ Finkelstein recalls.50 It revealed ineptitude and division at the top of the party, while the Tory press, disillusioned with the state of the opposition, scented blood. More fundamentally, the leadership had reached a fork in the road: either Hague could develop the arguments that Cooper and Lilley had advanced, or he could side with the majority opinion inside his Shadow Cabinet, and not question the party’s Thatcherite inheritance. One way would involve more soul-searching with no demonstrable short-term gain, while the other would mean playing familiar tunes to keep the press and the party faithful onside. Hague and his team chose the latter, and in doing so they lost any chance they had to address the causes of the party’s unpopularity.
To Blair and his aides in Number 10, it was a defining moment. ‘When Peter Lilley attempted to catapult the Tory party forward and was rebuffed, we all thought, “Great – we’ve got quite a long time left in office,”’ recalls one senior