Duncan Smith: 'We often look as if we are from another planet'

With 39 votes in the first round, Iain Duncan Smith is staying cool despite speculation that he could overtake Michael Portillo

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Iain Duncan Smith is the man of the moment in the Tory leadership race. He may be little known outside Westminster, but he is being taken very seriously indeed by his fellow MPs after coming a strong second behind Michael Portillo in Tuesday's first round of voting.

As some Tories speculated that he could even overtake Mr Portillo in the MPs' ballot, the shadow Defence Secretary and Member of Parliament for Chingford and Woodford Green remained typically cool yesterday. "It's a start," he says during an interview in his fifth-floor office at the House of Commons. "I am not over-egging it. I am hopeful rather than confident."

His team deliberately under-egged his support before Tuesday's ballot at 29 votes, so that when he won 39 he appeared to have the crucial momentum needed in any election.

Mr Duncan Smith, a former Scots Guards captain with four children, and the son of a much-decorated Second World War pilot, has impeccable credentials in Tory circles. Yet his opponents believe it would be a gamble to send such an unknown figure, the only one of the five candidates who has never been a minister, into battle against Tony Blair. Critics snipe that he looks like an older version of William Hague.

But at 47 he is the youngest of the candidates and, he points out, "a year younger than Blair". He adds: "I don't think that hairlines matter that much. It certainly wasn't the reason why we lost the election." He then makes a quip at Mr Portillo's expense, saying that "tolerance" should extend to the 50 per cent of men with thinning hairlines.

Mr Duncan Smith moves quickly on to the serious stuff: his vision of a modern new "welfare society" that puts the people first rather than the state's role as the provider. He is convinced that successive governments, Tory and Labour, have looked at welfare through the wrong end of the telescope, and he now wants the biggest shake-up since the 1970s.

The term "third way" is out of bounds but Mr Duncan Smith wants a " middle way" involving radical, sometimes tough, policies expressed in softer language than the Tories have often used in the past. This would also mean relying less on state provision on education, health and social services, without resorting to privatisation, by boosting the role of the non-profit-making private and voluntary sectors. For example, there would be more church schools and more respite care for people looking after sick or elderly relatives.

His vision of a self-help welfare state stems from personal experience: when his mother nursed his dying father, the "inflexible" system was more help than hindrance.

"You have to reinforce the welfare society and find ways to deliver to people what they need, not penalise them for doing it," he says. "People looking after their families is fantastically cost-effective – in brutal terms.

"No government could afford to do what they are doing. They couldn't do it as well. The love and caring that takes place would beat any professional nursing care."

Mr Duncan Smith says: "We need a positive view of welfare provision. So often when we talk about welfare in the Conservative Party we tend to take the negative route, which upsets people."

The cornerstone of his new welfare policy is the family, a traditional Tory theme. But his Thatcherite principles must be updated for today's world. So he will not tell mothers to stay at home rather than return to work. "It is not for me to say what is best for them; they must make that choice," he says. "I think it's best that they decide what's best for their kids. Some women have a career, can earn a lot of money and may take the view that they can deliver best for their children by doing that. Others have to work because there is not enough income."

Mr Duncan Smith's traditionalist instincts mean he does not share Mr Portillo's view that the Tories should consider dropping their support for Section 28, which bans councils from promoting homosexuality. As with calls for cannabis to be legalised, he is happy for the issues to be debated but insists that such matters are of more interest to "the political world rather than the real world".

He says: "The problem for us [the Conservative Party] is that we have tended to look as though we are from another planet because all we ever talk about are issues that are not the main issues for them.

"We need to be talking to people out there about things that really worry them in their lives – the big issues like health, education and welfare. That is our priority."

Although he made his name as a backbencher who rebelled over the Maastricht Treaty, Mr Duncan Smith wants to broaden his appeal to convince his colleagues he is more than a single-issue politician. After all, the Tories were humiliated on 7 June when they fought what was widely seen as a single issue campaign on Europe.

He remains firmly opposed to the single currency in principle, saying that Britain would "cease to be a self-governing nation" if it joined. But he insists: "I am not obsessed about Europe – far from it."

As he works the Commons tearooms ahead of tonight's vote, the appeal of this rather unknown ex-soldier is "what you see is what you get". As he puts it: "I am saying to people: this is who I am. You are better off with strong leadership that's clear, doesn't fudge and does not offer out to the highest bidder. I believe I am pretty much in the mainstream of opinion in Britain; winning the next election is all about that."