Tory conference: Matthew Hancock: The future Conservative leader who's ahead by a V-neck

The Skills minister may have had to abandon his trademark jumper to moths, but there are no holes in his determination to modernise

Hancock was chief of staff to Osborne in opposition, moving to the Tories from the Bank of England in 2005 (Justin Sutcliffe)

"Disaster," wrote Matthew Hancock on Twitter last week. "A moth has eaten a hole in my favourite jumper. What am I going to wear now?" The Skills minister, a close ally of George Osborne, is routinely teased by his fellow Conservative MPs for his habit of wearing a maroon V-neck pullover over a shirt and tie and under a suit jacket. He's only 34, yet his fogeyish uniform is more Rotary Club secretary feeling the cold on a spring day than thrustingly ambitious MP. On a particularly freezing morning in the Commons earlier this year, one Tory, shouting at him across the cloisters, asked whether he was wearing two jumpers.

Shortly after becoming a minister a year ago, Hancock likened himself, rather arrogantly, to Churchill, Pitt and Disraeli – attracting more ridicule. But, one year on, he appears to have developed a sense of self-deprecation. After he took to Twitter about his jumper, he was inundated with suggestions, including becoming a Lib Dem (a party that might better tolerate holey jumpers), and darning the beloved item. So what did he do? "I'm a pragmatist and so I wore it and put a jacket on the top and nobody could see the holes." A perfect metaphor, perhaps, for coalition policy on the economy: when times are austere, make do and mend rather than splurge on a new pullover.

And, despite signs of uplift in the economy, that is the message from David Cameron and his ministers at the Tory conference in Manchester. Sure, the Chancellor, when he makes his platform speech tomorrow, will unveil a populist policy or two funded by extra taxpayers' cash – most likely setting out the exact details of the married couples' tax allowance, part of a deal with the Lib Dems, who want to spend £600m on free school meals for children aged four to seven. The UK is "on the right track", as Hancock tells us over and over again, but now is not the time to give up on deficit reduction and spending restraint.

Yet Hancock is a Conservative moderniser. He was chief of staff to Osborne in opposition, moving to the Tories from the Bank of England in 2005, coinciding with Cameron's takeover of the party, when sunshine and optimism ruled the day. Two years ago, Hancock wrote a book with fellow Conservative MP Nadhim Zahawi called Masters of Nothing, which explained the global financial crisis through human behaviour and called for bankers to be given prison sentences. It was part of a rash of "bad versus good capitalism" books and essays from the centre-right which predated Ed Miliband's "producers versus predators" speech at the 2011 Labour conference.

So what has happened to the Tory modernisation project? Now that the economy is recovering, isn't it time to offer voters a little bit of sunshine? Life "remains tough" for families, with the "living standards crisis" still with us, he says, but adds: "The project to modernise the Conservative Party exists and is strong in a way that reflects the modern world." There are concrete examples, he says, in government now: his own reform of vocational qualifications by "making sure that they are for everybody", exempting the low-paid from a public sector pay freeze, and equal marriage.

"The modern Conservative Party is about this central task that I've talked about, which is making sure that everybody has the chance to reach their potential."

Hancock describes as "rubbish" claims by Miliband that the Tories are on the side of the bankers and describes the plan to freeze energy prices of the Big Six as a "top-down impractical gimmick". When the Tories were in opposition, Hancock says, there was a continual argument about promising unfunded, upfront tax cuts which, like the Labour energy bills plan, went "off the charts" in focus groups but undermined the party's credibility. "The wider consequences are that you are not believed."

The MP for West Suffolk is also disdainful of the Labour leader's plan to confiscate land from developers who refuse to build homes, suggesting it would undermine the Magna Carta: "Our concept of property rights goes back 798 years, broadly speaking."

Hancock worked on housing policy when he was at the Bank of England, between 2000 and 2005. On his first day at Threadneedle Street, he encountered another bright Oxford graduate who was also starting at the bank – Rachel Reeves. They became friends. Does Hancock see Reeves as a future Labour leader? "I don't want to put the black spot on her." What about his own ambitions – can he picture himself across the Dispatch Box from her? "If she becomes shadow Skills minister then I look forward to it."

Come on, what about at PMQs? "I think David Cameron does it very well," Hancock says, continuing to dance around the question of his own leadership ambitions. What about you? "No, no, no, no, no, no, no." That's seven times. One day? He feigns absent-mindedness: "Hmm?" before adding: "I think in the Labour Party there is clearly a dearth of talent at the top so there is an opportunity for people of the 2010 intake." That includes Reeves? "Yes, she is among the best."

Presumably bruised by the coverage of his self-comparisons with Churchill and Disraeli, Hancock seems cautious, apparently self-censoring in answers to questions about his own ambitions.

On policy, he is more forthright – HS2 will definitely be built, despite the "risible" attempt by Ed Balls to voice doubts about the cross-party consensus: "Big infrastructure projects always have opponents. Opponents are vocal, supporters are diffuse. That always happens and you have got to rise above that."

Hancock has three young children with his wife, Martha, an osteopath. When his third child arrived this year unexpectedly early, he was unable to take two weeks paternity leave straight away, but then took a "flexible period of a couple of months" – sometimes working from home, sometimes arriving at 9.30am after dealing with the elder two children. His department will oversee the introduction of shared parental leave in 2015.

Last year, for charity, Hancock trained as a jockey and won a race at Newmarket (against other fundraising amateurs, it should be said). So is horse racing like politics? "It's not for the faint-hearted. Winning a horse race is about timing, and a lot of politics is about timing, too."