John Kampfner: Steve Hilton is the PM's head of strategy, but has he gone too far?

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The Independent Online

Brilliant blue skies? Or bonkers? Steve Hilton, the Prime Minister's thinker-in-chief is a bit of both. He is, or would like us to think he is, your quintessential modern man, the guy who wanders around No 10 in his bare feet when he is not holding seminars on the latest idea fresh out of Davos, Silicon Valley or a modish American campus.

No prizes, therefore, for guessing at the source of the story in yesterday's Financial Times in which Hilton's latest cerebral contortions are laid bare. No attempt was made to conceal the fingerprints of disdainful mandarins.

Perhaps the UK could ignore EU regulations on temporary workers, suggested the T-shirt-clad head of strategy? Not if you don't want your Prime Minister to go to jail, came the reply from No 10's top mandarin (not averse himself, it seems, to hyperbole). How about abolishing all Government press officers and replacing them with a single blogger per department? Abolish all consumer rights? Close all Job Centres?

Then the most toxic: abolish maternity leave in order to encourage employers to take on more women (follow the logic?). And, finally everyone's favourite: use technology to separate the clouds and bring in more sunshine. Who could argue with that?

Behind the mix of fury and mockery (Twitter had a field day with dozens of suggestions, such as privatising Tuesdays) is a serious dilemma for anyone involved in government. How do you make a difference?

The Tories have long seen Whitehall as protecting bloated special interests. Labour believed it was the last bastion of the posh Establishment. Tony Blair famously wailed about the scars on his back as he became bogged down trying to reform public services. Margaret Thatcher complained incessantly about the civil service as the enemy within. Gordon Brown simply threw mobile phones at people. They, and the people working for them, became frustrated at their apparent inability to bring about change.

Hilton's predecessors under Labour, such as Geoff Mulgan and Matthew Taylor, also came up with ideas that had little political traction. With everybody else immersed in the day-to-day, pushing the boundaries was part of their brief – although their ideas were not remotely as wacky as these.

David Cameron enjoys one major advantage over his predecessors. He can cite empty state coffers in order to engineer a reduction in the size of the state – which to more ideological Conservatives is political nirvana.

He also faces one major impediment, the fact of the Coalition or, more precisely, Coalition Mark II.

In the first year, such was Nick Clegg's determination to "co-own" every policy, he played down the differences. Once he saw Cameron's ability to double-cross him during the referendum on voting reform, he realised the need to change tack.

Now each day brings evidence of the yawning gap between the Tories' and Liberal Democrats' approach to state, society and the economy. Vince Cable's weekend denunciation of the Republican "nutters" in charge of the US Congress was one of the more colourful examples.

Hilton's politics represents the more flamboyant end of a new generation of Conservatism. It is a mix of US-style scepticism or hostility towards the state and its ability to provide all but the most essential services efficiently; a belief in bottom-up "empowerment" and activism (no surprise that he was chief architect of the Big Society); and a geek-led informality of style that is the preserve of social media and internet gurus (his wife, Rachel Whetstone is one of the head honchos at Google).

These young men and women in a hurry look around and see a contrast between entrepreneurs (fast lane) and public sector employees (slow lane). The former are prepared to risk everything for a great idea. The latter follow convention. The former insist on helping themselves. The latter believe in entitlements. Behind every generalisation there tends to be a kernel of truth. Even if one does not agree with Hilton's world view – and nobody seriously imagines he was doing more than trying to provoke discussion with his bizarre declarations – one can understand his frustrations.

Yet there is one gaping flaw in the Government's understanding of the new wave of tech-based entrepreneurialism. Facebook and Twitter embrace not just this new mood but also a more pronounced sense of equity. And it is this that is so lacking in Cameron's approach to economic austerity. The supine bail-out of the bankers and the servility towards the Murdochs proved that we are not all in it together. The pain has been shared out, in varying degrees, among the mainstream population, but not among the very wealthy and the obscenely wealthy.

The reason Hilton's reported remarks about abolishing maternity leave strikes such a nerve is that it reinforces a view that the wealthy can dictate the terms and that de-regulation is designed solely for this purpose.

Here, the Liberal Democrats, and Cable in particular, have a serious role to play. This is, or at least should be, a deal breaker. Belt-tightening for all is in a different universe from belt-tightening for most.

The young generation may be less wedded to a Whitehall-knows-best approach; suspicion of private enterprise may have been overcome in the 1980s. But the financial crash has not turned us into manic deregulators. Rather the reverse. It has revived a traditional notion of fairness, one that politicians – and their advisers – play with at their peril.