John Redwood: He loves his party and wishes us a nice life. So who says he isn't emotional?

The Monday Interview: The former Tory leadership contender

Discussing the failings of Britain's transport system with John Redwood yesterday, I mentioned innocently that what he was saying was "logical". Before I had a chance to get to the "but..." he interjected plaintively: "It's emotional, too; I feel it. I feel rage in traffic jams."

Emotion, of course, is something of which Star Trek's Mr Spock – to whom Mr Redwood is still routinely (and unfairly) compared – was incapable. Logic was what he had in abundance.

But for all this famously brainy man may still feel he needs to fight off the tired old Vulcan comparison, he shouldn't be worrying too much at present. For events in the Tory party are suddenly going his way. After the latest outbreak of internecine warfare between the modernising Portillistas and the leadership, Iain Duncan Smith has clearly decided in favour of giving opposition to the Government a harder, more aggressively tax-cutting edge.

It is a step Mr Redwood has every reason to welcome, not least because he is part of the reason it is happening. For some time now John Redwood has been suggesting in pamphlets, speeches and a book that there is an answer to the Conservatives' central economic dilemma, which is to show that spending (and tax) can be cut while improving the quality of public services. And now Mr Duncan Smith is listening – reportedly to the point of wanting him back in the Shadow Cabinet.

Mr Redwood has always believed that the economic argument is more important than the endlessly dissected one between "modernisers" and "traditionalists" – which he anyway regards as a "bogus" distinction. "On issues of sexual politics, for example, I've always believed that you should have a free vote on them. I don't believe these issues make much difference to our electoral prospects in most constituencies. What matters in the target seats is schools and hospitals and how many pounds in the pay packet."

And what of the personality dispute – including that between Michael Portillo and Mr Duncan Smith – that underlies the mod-trad conflict? While carefully welcoming Mr Portillo's most recent remarks, "which told me that Michael himself wishes to calm everything down", he adds: "There have been personality clashes after five and a bit years of no particular success in opposition, and people have different views about what will bring that success. The party has to learn a bit of good humour and tolerance, because if we publicly dispute over how to get back in favour it won't make us very attractive."

But there's another reason for Mr Redwood to be cheerful. There had been a notion around, for understandable reasons, that Conservatives "should speak with a moderate tone of voice, and should find things in the Government they liked and show we don't have to oppose for opposition's sake". But now, he said, "the polling and the mood show it's time to be rather more robust. I welcome Iain's recent performance at the dispatch box because I think he's responding to that point of view."

So he didn't exactly warm to Theresa May's conference warning last October that the Tories were still seen as the nasty party.

"No, I didn't think it was a great speech. I read the words and understood what she was trying to do but unfortunately in politics it's not always what you say but how you are interpreted. And it was interpreted as being an attack on the party rank and file in the hall and I didn't think they deserved that. They have been with us through thick and thin, they are incredibly loyal, they are aching for victory and have strong Conservative views. The last thing one wants is any suggestion that they've let the side down. I know Theresa didn't mean that, but unfortunately that's what came across. So it was a pity. Many of us had to spend a good few hours chatting up party members saying, 'She didn't really mean that, we love you dearly'."

Back to the job in hand. Mr Redwood's first premiss is that you can achieve deep cuts in public spending without losing a single nurse, doctor, teacher, policeman or soldier (and perhaps gaining some). Well before the next election, he says, but after the Government has made clear what its tax spending plans are for 2005 and beyond, the Opposition should produce its own shadow Budget, costing both its planned expenditure and the savings it can make.

He freely admits he hasn't yet done all the work either. For a start, he would reduce the number of civil servants from 500,000 to 400,000 over a single parliament – through natural wastage and severance schemes rather than by sackings – by stemming the tide of regulation, allowing the courts rather than the bureaucracy to enact and enforce European directives, and eliminating inefficient administrative pockets, often duplicated by expensive consultants. He promises to take a scythe to quangoland, citing examples rather than detailed costings. Do we need a big DTI when most commercial regulation happens in Brussels? Couldn't many of the powers of the Environment Agency be transferred to local authorities? Shouldn't the Financial Services Authority go farther even than its chairman, Howard Davies, wants by leaving the regulation of transactions between professionals to enforcement by companies and individuals using the courts? And so on.

But his second premiss is that the timing is exactly right for challenging the orthodoxy that a solution to underfunding would of itself transform the public services. His examples come thick and fast. On transport, he would like to see new toll roads in which payments would be refunded if road managers fail to meet a guarantee that journeys are completed within a certain time. He wants to see an incoming Tory government – while acknowledging that it would not be achieved without difficulty – divest itself of the £14bn of liabilities it has now incurred by "renationalising" Railtrack instead of merely cancelling the dividend and replacing the board.

On health, he wants to see patients able to spend their money on a range of optional hotel services, from better meals and drinks for visitors to digital colour television. And he strongly backs the idea from the shadow Health Secretary, Liam Fox, for tax breaks for those with relatively modest means currently cancelling holidays or taking second mortgages to pay for private operations they have waited a year or more for in the NHS. He insists – controversially for those who believe that services for the poor end up by being poor services – that this would ease pressure on the NHS to the benefit of those dependent on it.

"It's extending choice to people. I want people to have a nice life. They don't tell me they have lousy holidays or that they have lousy choice in the supermarkets or they can't get a car they like. They tell me they can't find a road to drive on, they can't find a train to take them where and when they want to go. Some of them are not too happy about the education service, and a lot of them are not too happy about the health service. All the things that people are miserable about have this in common, that they are very influenced by and in some cases monopolised by the public sector."

On education, he would remit directly to schools the £1,000 a year per pupil that goes on LEA administrative costs, and end all restrictions on the expansion of the most successful schools.

"If the poor-performing schools knew that parents under my model had a better chance of getting their pupils into the high-performing schools and they were growing, then I think there would be earlier changes in the poorer performing schools."

Given Tony Blair's current travails with his party, he is unlikely to welcome praise, however barbed, from Mr Redwood. But, he says, the Prime Minister has shown some signs of seeing that reform is as urgent as expenditure. However, his "cats and dogs" fight with Gordon Brown – for example over foundation hospitals – is stalling progress. "I would say to Mr Blair – I'm not sure I will get through to Mr Brown – have the courage of your convictions, if you've got any. If you did open it up much more it would become much more normal, it would look much more like the treatment we get from all the other services."

On Europe, Mr Redwood's advice to Mr Duncan Smith, it's pretty clear, is to abandon the party's reticence on the subject. He is convinced that Mr Blair will not risk a euro referendum in this parliament. But he believes the Tories should campaign for a referendum on the outcome of the convention on the EU's future, which Mr Redwood is sure will be a fundamentally more integrationist blueprint than the Government will admit. "I'm not shy about Europe. We can't make sense of British politics if we ignore the elephant in the living room" (ie, the issue of the EU).

So what of his own future? He turned down shadowing the DTI after the election. What job would he take? The party chairmanship perhaps? "At the moment none of these jobs is available. I don't think there's an imminent reshuffle and I don't think it's very friendly to say I'd like colleague X's job. When Iain wants to change jobs around I'd be delighted to talk to him about it."