Donald Macintyre: The Tory leadership battle is not a political sideshow

'The new leader will help to determine where the goalposts lie between now and the next election'

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Duncan Smith campaign 'in disarray' after another U-turn on Section 28

Of all the myths that have started to solidify since the Tory leadership campaign began – it seems an eternity but is, in fact, a mere six weeks ago – the most pervasive is also one of the wrongest; that it doesn't really matter.

The Tory party is doomed to be a mere irrelevance, so the argument runs, an obsolescent and ageing institution, so out of kilter with the zeitgeist that it can be safely ignored. Either of the two leadership candidates will split the party, with disastrous if not fatal consequences for its effectiveness as a fighting force. It's already a sideshow.

The mythmakers, as the Conservative Party faces up to its last full week of campaigning before the new leader is announced tomorrow week, are many and various. Some of them belong to what William Hague was pleased to call the liberal elite, for whom the wish is father to the thought. But they have also secured some unexpected allies; it was, after all, Francis Maude who warned that the Tories might find themselves reduced to the once unthinkable position of the third party in the country. And, of course, doom isn't impossible, at least for the foreseeable future.

But there are several reasons for thinking the obituaries are premature. Not least because what happens next will determine the fate of British Conservatism more decisively than anything in the campaign itself, parochial, inward-looking, unedifying and occasionally poisonous as it has been.

The outcome isn't yet certain, even if the issue has already been decided. Ask an upwardly mobile ex-minister in the Duncan Smith campaign, who normally eschews propagandising, and he will tell you that his hunch is that his man will win by two to one. Ask his almost exact equivalent in the Clarke campaign and he will tell you that a victory for either man would not surprise him, and that it is a lot more open than the veneer of confidence in Duncan Smith-land and a growing conventional wisdom elsewhere suggests. Others on the Clarke campaign insist their man is forging ahead.

But let's suppose, for the sake of argument, that the IDS man's guess is right. A number of questions arise, some (but not all) of them posed by the candidate's interesting interview with his friend and ex-colleague Gyles Brandreth in The Sunday Telegraph.

The first is why Mr Duncan Smith decided to sound a softer note on cannabis and the repeal of Section 28 than he had done hitherto, and certainly softer than one of his most loyal supporters, Julian Brazier, did when he skewered Michael Portillo on the subject, perhaps fatally, at that famous meeting of the 1922 committee. It's hard to escape the conclusion that he is opportunistically trying to win over some abstentionist Portillo supporters – some of whom have threatened to spoil their ballot papers at the eleventh hour. The IDS camp won't have this, arguing that Mr Duncan Smith is saying nothing "inconsistent" with what he has said before, even when he denounced Mr Portillo's "pashmina politics". I find this denial unconvincing but let it be recorded nonetheless.

Let's therefore turn to Europe, which Mr Duncan Smith acknowledged frankly was the "dominant issue" in British politics. This itself is a bit of a reversal since, at the end of June, Mr Duncan Smith was calling for the Tory party to talk less about Europe and more about "the big issues like health, education and welfare." Here, the Duncan Smith vision is distinctive. First, on the single currency he is a self-confessed "never" man which Mr Hague was not. On the face of it that will make it more, rather than less, difficult for him to carry out his promise to include a broad spectrum of European opinion in his Shadow Cabinet.

Secondly, he is in favour of an early referendum on the single currency. There is merit in this bold move, itself a break with the Hague line of trying to prevent one happening. First, it shows the courage of his eurosceptic convictions, which the Hague line did not. Second, it allows him to make the charge credibly that Tony Blair is fostering uncertainty on the issue. But it also creates a problem. Is Mr Duncan Smith saying that, as Prime Minister, he would take the risky gamble of calling a referendum if one had not yet been held, to settle the issue once and for all?

On the question of treaty renegotiation and the assumption of reserve powers, which could ensure that domestic law overrides European law, he appears to be four-square with Mr Hague. He, therefore, faces the same problem – that unless agreement can be reached on all this with the rest of the EU, he would have little sanction other than the threat of withdrawal. His supporters are adamant that he is not a withdrawer. Never mind that he has contemplated the possibility in the past or that he addressed the rather withdrawalist Campaign for an Independent Britain as recently as May 1997. You simply have to take on trust the doubtful proposition of the IDS supporters that, when it comes to the crunch, France and Germany would be prepared to create a dangerous – from their point of view – precedent of making an exception of the UK.

Finally, in his interview, Mr Duncan Smith was at his most robust in seeking a smaller state – taking around 35 per cent of national expenditure – and private insurance topping up of tax-funded health care. This is an approach Mr Hague was not prepared to take, specifically ruling it out in a pre-election interview in The Independent.

Two conclusions flow from all this, I think. That on most issues – the fashionable issues of cannabis and local authority legislation which inflames gays now excepted – Mr Duncan Smith is somewhat to the right of Mr Hague. But secondly that his careful calibration of his pitch – especially on the so-called "social agenda" - suggests that he is not yet quite as confident of winning as some of his supporters claim.

I still happen to think the Tories would be crazy not to opt for Kenneth Clarke, the Tory politician who has far the greatest appeal among the voters the party needs to win back if it is to look like an election winner again, and has the capacity to frighten Labour.

But, either way, let's have no more about the contest not mattering. Whoever wins, the party is still well over twice as big in Parliament as the Liberal Democrats, whom some romantically dream of supplanting the Tories as the main opposition party. Liberal Democrats certainly have their part to play in opposing a government that, like all governments and arguably more than most, given its extraordinary hegemony, needs to be opposed. But on Europe, and many other issues, the new Conservative leader, whoever he is, will help to determine where the ideological goalposts lie between now and the next election.

Don't be deceived by the relaxed and amused silence of Labour during the last four weeks. Tony Blair, more than most, knows very well how much this contest matters.

d.macintyre@independent.co.uk