The election of David Cameron as the new Conservative leader in 2005 signalled the emergence of what can be termed the ‘progressive’ neo-liberal Conservative approach to the welfare state. John Major’s defeat in the 1997 General Election at the hands of New Labour under the charismatic leadership of Tony Blair led to 13 years of opposition for the Conservative Party. During this period, the Conservatives began to take a greater interest in social issues. The first part of this chapter traces the compassionate turn in Conservative thinking under the leadership of William Hague, Iain Duncan Smith and, to a lesser extent, Michael Howard in the period from 1997 to 2005.

The compassionate turn? Neo-liberal Conservatism and the welfare state, 1997-2005

John Major's decision to resign as leader on 2 May 1997, the day after his party's crushing defeat in the 1997 General Election (in which seven Cabinet ministers lost their seats), meant that those Conservatives returning to the opposition benches were faced with the immediate prospect of a leadership contest. Ken Clarke, Peter Lilley, William Hague, Michael Howard and John Redwood all threw their hats into the ring. After the elimination of Lilley, Howard and Redwood in early rounds of voting, Hague, Thatcher's preferred candidate, defeated Clarke by 92 votes to 70 in the final run-off, thereby confirming ‘that being anything other than a Eurosceptic was an insurmountable bar to leading the party’ at the time (Snowden, 2010, p 45).

The Hague era (19 June 1997 to 13 September 2001)

William Hague faced the unenviable task of trying to re-energise public support for the Conservatives in the face of a ‘New Labour’ government that was proving hard to oppose, given its success in laying claim to the ‘common’ ground of British politics. By renouncing socialism, embracing the neo-liberal economic agenda and substituting a commitment to social justice for the pursuit of equality, New Labour had left the Conservatives floundering.