Alan Duncan: 'We haven't understood the country that we aspire to govern. We have to change'

The Monday Interview: Conservative frontbencher

The phone lines are not going in yet, but it is only a matter of time before Alan Duncan's house with the blue door and the big brass knocker off Smith Square in Westminster becomes the centre of the Tory leadership contest.

The phone lines are not going in yet, but it is only a matter of time before Alan Duncan's house with the blue door and the big brass knocker off Smith Square in Westminster becomes the centre of the Tory leadership contest.

Mr Duncan's home in Gayfere Street, a 200-year-old terrace of former ferrymen's cottages, should have its own blue plaque to mark its historic role in leadership elections. It was used as the headquarters for John Major's and William Hague's campaigns in 1990 and 1997.

Whether Mr Duncan runs for the leadership will depend on whether friends on the modernising wing of the party will agree on a single candidate. Michael Portillo said Mr Duncan is "the most coherent advocate of change", in effect handing him the baton Mr Portillo once held, which could carry significant weight with the party.

There have been feverish phone calls all weekend between the supporters of the modernisers, including Damian Green, Francis Maude, Tim Yeo, Andrew Lansley, about the options. They are all agreed on the need to match the appeal of the Liberal Democrats to become electable again.

The Liberal Democrat "young turks" including David Laws, Nick Clegg and Ed Davey, vilified by some in their own party for producing the "Orange Book" proposing market-based solutions, are just Mr Duncan's sort of people. "The Orange Book liberals should feel happy in my sort of Conservative Party," he said. "What is more, we would then all have a future. There is a tradition in Liberalism which overlaps significantly with Conservatism, someone like Menzies Campbell, for example; it's liberal economics, non-statist and one that enjoys and respects diversity. That is my sort of politics. Apart from high tax, some of their thinking is very cogent, a bit trite but cogent."

Mr Duncan's grandfather was a close friend of Sir Archibald Sinclair, the Scottish Liberal leader, and his father was a close friend of his son, joining the RAF with him at the same time in 1945. "At prep school in 1970 I was the Liberal candidate," he said, laughing. "That is what made me a Conservative. I got trounced."

At this stage, Mr Duncan is limiting his leadership ambitions to making sure the party takes seriously the need for radical change and admits he does not command a majority of MPs in the ballot. All the signs are that he will throw his hat in the ring, if he can gain the support of other key players.

He has never been far from power in the Conservative party. Early rapid advancement was aided by his friendship with William Hague who appointed him a vice chairman of the party in 1997. So what he says about the need for the party to modernise should carry added weight with the Conservative grandees.

He agreed with Lord Saatchi, the joint chairman of the Conservative Party, who said at the weekend that the party's campaign lacked optimism. That was a back-handed swipe at Lynton Crosby, the Australian brought in to sharpen the party's campaign. Mr Duncan does not share Lord Saatchi's view about Mr Crosby, describing him as "a good guy", but does believe Tories needed to offer more cogent reasons for voting Conservative.

He also agrees with those who have applauded Michael Howard's efforts as leader but criticise his decision to announce he is quitting now. Mr Duncan says it is vital for the Tories to have at least a year to carry out a thorough post mortem of their failure to raise the share of their vote above 33 per cent.

"The reduction in Blair's majority must not delude us into thinking we don't still have a hill to climb. We are credible, the Parliamentary chemistry is going to be dramatically different but we have got to examine ourselves harshly. We must recognise we have had patchy success in winning seats, our share of the vote has not increased, we are facing a growing Lib Dem threat. And if you look behind the headline figure of our support, some of our socio-economic groups, A and B, have peeled off to the Lib Dems. That is the challenge.

"One more heave won't answer. We have to reconnect with a country which we have stopped understanding. For the past 10 or 15 years, we haven't properly understood the country we aspire to govern. As Thatcher says, she made Blair electable. We didn't realise Labour had changed, and the country socially had dramatically had changed. We are still catching up with all that.

"If you talk about the language of the family, it used to be all about single mothers and marriage. Now it's all about, 'Can the mother go out to work?; does she face a tax disadvantage for that"; what happens if she is caring for granny"; and how does the tax stack up for that?

"That is what the family should mean to a modern Conservative as much as the values we have always spoken of in the past. That's why the only way forward is something which is socially and economically liberal. It must not be judgementally authoritarian. That just alienates people and just drives them away. If we appear to hate some sections of society, they will reward us by hating us."

Mr Duncan is the living embodiment of that social change. He is the first Conservative front bencher to come out as gay. He says his proudest moment in Parliament was helping to secure a majority for the Government's civil partnerships Bill allowing gay couples to have a civil "marriage" in the face of resistance in the Lords by traditional Tory peers led by Lord Tebbit. Whether Britain is ready for its first openly gay Prime Minister could be a radical choice the Tory Party will have to make later.

In shirt sleeves and jeans, Mr Duncan, looks the essence of a youngish, smart Conservative the new Tory Party needs to attract. But he is also a product of the Tories' traditional past: he made a fortune as an oil trader. The blue Range Rover that sits outside his £500,000 townhouse takes him up to his country seat in Rutland, where he has another large house with gardens on which he has lavished care.

But he is adamant that the party needs to widen its appeal. "Most people under 35 have looked at the Conservative Party and not been attracted to it. The reasons for this need proper analysis. We have to change the way we are perceived. We have appealed predominantly to people who are elderly male and rural; that's fine as far as it goes but we need to appeal to the young, female and urban. If we could do that, we would be unstoppable."

Stephen Dorrell and Francis Maude were calling over the weekend for the Tories to make green issues their own. "They are right," said Mr Duncan, the overseas development spokes-man who helped reverse years of Tory suspicions of the UN and commit his party to raising Britain's contribution to the UN to 0.7 per cent of our GDP. "Look at global poverty. There should be no no-go areas."

Animal welfare, should also be a Tory issue, he says. By that, he means plugging into the concern that Jamie Oliver, the TV chef, has tapped by raising awareness about our food, and the way it is produced. By itself, this does not sound radical, but it raises the risk of upsetting businessmen on whom the Tories used to depend. He is famous - almost infamous - for writing Saturn's Children in which he advocated stripping down of the role of the state to its bare essentials and the minimisation of taxes. He also called for legalisation of drugs though that section of his book was excised in paperback after he joined the Tory frontbench as a health spokesman in 1998.

He stands by the libertarian theories in the book, but on drugs says he is one of the few MPs who can say he not only never inhaled, he never even lit up. "I have never smoked a cigarette in my life," he said. "I get high on my own verbosity. I don't take any drugs, including pain-killers." A crash in a rugby scrum at Merchant Taylor's when he was 17 left him with painful shoulders. He has been taking acupuncture every month for 30 years and swears by it.

So where does he believe the Conservatives are now on their road to recovery? Have they reached the same stage as Labour after the disastrous 1983 election defeat? "We are worse than 1983 in terms of seats but better in terms of fortunes."

Could the Tories be compared to Labour in 1992? He resists that comparison too. "There is no historical equivalent because the Lib Dems have got more seats. We are in 2005 and there ain't been nothing like 2005 before. That is why we need fresh thinking, so we can work out how we can be in 2009. It's do-able, absolutely do-able. New Labour is crumbling and we can pull the rug from under the Lib Dems in a trice if we get this right."

And if they get it wrong? He will not contemplate that. "This is the opportunity of a lifetime which we mustn't flunk."

The CV

* Born: 31 March 1957 * Education: Merchant Taylors' School, north London; St John's College, Oxford, and Harvard University

* 1979 Joins Shell International Petroleum as trainee

* 1988 Becomes oil trader and adviser on oil supply, shipping and refining

* 1992 Conservative MP for Rutland and Melton

* 1993-97 Parliamentary Private Secretary (PPS) to Brian Mawhinney

* 1997-98 PPS to William Hague, leader of the Conservative Party

* 1998-99 shadow Health Secretary

* 1999-2001 shadow Trade and Industry Secretary

* 2001-2003 shadow Foreign Oddice minister

* 2003-05 shadow Secretary of State for Constitutional Affairs