William Hague is said to be "pretty fed up" with existing right-wing groups, such as the Centre for Policy Studies (CPS) and the Adam Smith Institute, which he feels have been slow to produce fresh policy ideas.
"The Tory party is intellectually dead," one senior party figure told The Independent. "There is little or no new thinking going on. Better presentation, new colours and logos are important, but the party's appeal must be based on substance, not style."
Senior Tories are understood to have held preliminary talks about setting up a think-tank, and discussed how such a body could be funded.
Supporters of the plan recall that groups such as the CPS, founded by Sir Keith Joseph and Margaret Thatcher in 1974, became the "engine room" of the Thatcher revolution by defining the free-market agenda she introduced after the 1979 election. Privately, some Tories believe the right-wing think-tanks have been outflanked by groups close to New Labour, such as the Demos organisation, which paved the way for the Government's "rebranding of Britain".
Mr Hague showed his determination to inject some fresh thinking into his party yesterday when he promised that outside experts would play a big role in a wholesale policy review to be carried out during the next nine months.
In his New Year message to Tory constituency chairmen, Mr Hague put the search for new policies at the top of his agenda, calling for 1999 to be a "year of ideas". He announced that he would soon be asking his Shadow Cabinet to set up new policy groups on a wide range of issues. Mr Hague warned his party that it could not rely on mistakes by Labour and the Liberal Democrats to propel it back to power. "We need to develop a fresh, positive and compassionate Conservative agenda for the next century. That means a thorough overhaul of all our policies."
He said: "Each time our great party has been in opposition, we have turned misfortune to our advantage and developed the new thinking that has taken a new generation of Conservatives back into government. Now it falls to us to begin that process again."
The MPs, Tory activists and independent experts who will serve on the policy groups will analyse the results of the "Listening to Britain" consultation exercise launched after the catastrophic 1997 election.
They will then identify problems, commission research and draw up policy papers, before the party publishes an "Agenda for Britain" document later this year. Last month Mr Hague strengthened the Tories' policy-making machinery by moving Daniel Finkelstein from his current post as director of the Conservative Research Department to head a new policy unit.
THINK-TANKS THAT HAVE NURTURED SOME OF THE CONSERVATIVE LEADERSHIP'S BEST - AND WORST - POLICIES
The Social Market Foundation
1989 by supporters of SDP's David Owen; with David Sainsbury's cash; Danny Finkelstein (above; now Tory policy chief), Baron Skidelsky head it.
Advocate the merits of a social market economy
Has influenced welfare and education debate. Lured David Willetts MP away from the Centre for Policy Studies
Tots up cost of demands for extra state cash for almost everything made by people on R4's Today.
The Adam Smith Institute
1977 by Dr Madsen Pirie (above) and Eamonn Butler, who still run it
To promote free-market thinking
Before it was fashionable, advocated privatisation. Influenced Thatcher and Major governments: has since praised Tony Blair.
So opposed to state interference it produced a guide to regulations for posing nude
Centre for Policy Studies
In 1974 by Margaret Thatcher (above) and Sir Keith Joseph
To convert the Conservative Party to free-market ideas
Ideas `engine room' that drove Thatcher from '79. Claims credit for privatisation, trade union reform. Ran out of steam.
Joseph, in CPS-crafted '74 speech, split Tories, saying jobless should go up to control inflation.
Social Affairs Unit
In 1980 by Dr Digby Anderson, as an offshoot of the Institute of Economic Affairs
To provide the social equivalent of its
parent's free-market thinking
Has kept close watch on development of a "nanny state"; forced Tony Blair to warn ministers not to create one
1996 guide for parents wanting to prevent their children getting a "trendy lefty" education
In 1995 by Dr Sheila Lawlor (above), previously deputy director of the Centre for Policy Studies
Strong right-wing moralist agenda; desire for a smaller state
Influenced Conservative education policy. Critics say it has made little impact, especially since 1997 election
Says state should fund education, but not bother with curriculum or pupil assessment
Institute of Economic Affairs
In 1957 by Arthur Seldon and Ralph Harris (above; now Lord Harris of High Cross)
To expound the ideas of free-market economics
Challenged conventional 60s, 70s economic ideas. Had profound influence on monetarist thinking in Thatcher governments.
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