The Conservatives' strategic choice is between Osborne's Plan or "The Plan" - and the former is the better option.

By Paul Goodman
Follow Paul on Twitter.

Andrew Cooper's polling was important in forcing U-turns on health and crime, but one must dig deeper for a full explanation.  The change of direction over both was evidence of an institutional tension - one that divides not just the Coalition but the Conservatives too.  Peter Oborne has described it as Google v Murdoch, setting a warm Steve Hilton, with his family links to the Google empire, against a cold (and since departed) Andy Coulson, mindful of his friends in the Murdoch one.  Steve Richards sees Hilton and Oliver Letwin as romantics, with yearnings to transform Britain's public services; it follows that those whose support for changed is tempered by the evidence of polling - such as Cooper - can be bracketed as realists.  The difference that Richards and Oborne are getting at is familiar: cavalier v roundhead, heart v head.

And liberal v Tory, too?  When Gilbert wrote that "every boy and every gal/That’s born into the world alive/Is either a little Liberal/Or else a little Conservative" (for which one should read "Tory") he was alluding to yet another conflict, one that is as easy to recognise is it is hard to describe.  That much of the Liberal Party has been absorbed into the Conservative Party since then makes the clash between these two ways of understanding the world even more compelling.  Within most Conservatives I know, there's both an inner Tory and an inner liberal struggling to get out.  There are so many shades of conservatism and liberalism as to make generalisations dangerous, but I will risk one.  Liberalism (classical or modern) has a strong rationalist streak.  It values the life of the mind and the role of reason.

And since it tends to argue from first principles, it often has about it the flavour of ideology.  Let me give a hard and fast example.  The Plan, co-written by Douglas Carswell and my old friend Daniel Hannan, is exactly that - an internally consistent package of reform, argued cooly and clearly.  It has a sense about it of a man designing a building.  (The cover of the edition I have in front of me as I write shows Britain supported by scaffolding and overhung by a crane.)  In tone and manner, it has a deeply liberal feel, with more than a smack of America in its proposals.  When I read it, my inner liberal agreed with many of the parts, but my inner Tory disagreed vehemently with their sum - a 30-step programme of legal acts which the authors write "could all be in force within 12 months".

They thus hold that a government could within a year persuade Parliament to pass laws abolishing the benefits system (which would be localised) and - to strike a topical note - ending the basis on which the NHS is funded.  I am not holding up my hands in horror at these proposals: indeed, I'm not concerned for the moment with their merits at all.  (And it's worth noting that other parts of Carswell/Hannan ("Cannon") prospectus have been taken up by Ministers.)  Rather, I am throwing back my head in laughter, simultaneously amused and appalled at the chutzpah of suggesting that the measures to enact them could be completed in less than twelve months.  For before these could pass, the government in question would be forced not so much into a U-turn as a V-turn by protests without and panic within.

Why?  Because no Government can take on every vested interest at once.  Margaret Thatcher, the most radical Prime Minister of the last quarter-century, grasped the point.  The privatisation programme only gathered speed in her second term.  Grant-maintained schools and fundholding doctors didn't happen until her last one.  Her struggle with the unions wasn't won until the defeat of the miner's strike in 1984, and laws to reform trade unions were still being introduced after she left Downing Street.  But the authors' belief that they can achieve in a single year some of the gains she failed to make in over ten is the product of neither hubris nor vanity.  It flows from the rationalistic design of The Plan which, like the socialism from which they recoil, approaches politics as a form of engineering.

Yes, every Government needs a plan.  And, yes, if we must have Plans - with a capital P - we could do a lot worse than Carswell and Hannan's.  (I'm broadly with them on localism: see here, here and here.)  But building or renovating a house isn't the best illustration of what government is like.  It's more like the hackneyed but unimprovable image of a ship navigating a sea.  It must try to reach its destination without having control of the medium across which it travels.  This is why Thatcher kept her aims simple in her first term, and steered for the port of economic recovery.  George Osborne believes that this Government should follow suit: that it must deliver on the Big Priorities - economy and immigration, plus schools and welfare reform - if David Cameron is to follow her in winning one election outright, let alone three.  Osborne is a social and economic liberal, but his fingertip sense of what's politically possible is deeply Tory. 

As far as I know, neither Carswell nor Hannan is a chum of Steve Hilton.  But I have written about them at length both because some of the Government's policies are drawn from The Plan (so it's right that their inventive, original thinking should be acknowledged), but also because they exemplify what he illustrates: namely, the conviction that the Government shouldn't shy away from taking on lots of lobbies at once - for example, over Andrew Lansley's original plans.   So we not only have cavalier v roundhead, Whig v Tory, head v heart and Cooper v Hilton, but we have another emblematic conflict, and one that runs very deep.  Osborne is Chancellor of the Exchequer.  Hannan isn't even a member of Parliament.  But Osborne v Hannan (or Carswell and Hannan, if your prefer) best illustrates the choice that the Government must make.

So will the Government act on a broad front or a narrower one?  Will we have local taxes or Treasury centralism?  Liberal optimism or Tory caution? Hannan or Osborne - The Plan or His Plan?  As I've written before, I believe that the Lansley reforms would work (though not fast enough to stave off an "NHS crisis").  It's true that the Health Secretary has had a raw deal from Downing Street, and Conservative MPs are sorely tempted to back his plans just to get one over on the "yellow bastards".  But the Chancellor is right: the Government is trying to take on major school, hospital, police, welfare and public sector pensions reform all at once.  This is too much, too fast.  The Government risks losing sight of the Big Priorities wood for a mass of trees.  It must dump some of its baggage if it's to find a way out and regain its perspective.

Most Tory MPs will have been delighted at the Government casting away Ken Clarke's original prison proposals.  They won't cheer at it doing the same to much of the health bill, but taking on the medical vested interests now (rather than gradually implementing Lansley's ideas bit by bit) would be uncomfortably like squaring up to the miners' vested interests in 1981 - the right battle at the wrong time.