Tories fight back with plans to reduce state role

Iain Duncan Smith shrugged off criticism of his stewardship of the Tory party yesterday by unveiling a range of policies aimed at completing "the unfinished Thatcher revolution".

Despite falling ratings in the opinion pollsand talk of a leadership challenge, the Conservative leader arrived in Bournemouth for his party's annual conference armed with 25 new policies to roll back the state from people's lives.

Among the ideas to be announced this week are giving all NHS hospitals the right to free themselves from Whitehall control, Borstal-style units to cut youth crime, state scholarships to allow parents of pupils at failing schools to pay for private education, fines for patients who miss GP appointments, longer sentences for juvenile offenders and a new "lifelong savings account" to encourage financial independence in old age.

But Mr Duncan Smith later betrayed his anger over the damage to the party caused by the exposure of John Major's four-year affair with Edwina Currie. Speaking to Tory agents in Bournemouth, he said the publicity had "led to seven days of pretty negative coverage''.

He added: "Voices from the past came back and ruined all the good work we have done.''

Mr Duncan Smith, a fierce critic of Mr Major during his Premiership, said news of the affair had "reminded people why they kicked us out in 1997''.

The Tory leader also faced criticism from his defeated leadership rival Kenneth Clarke, who told The Independent that the Tories should not wander off into some "right-wing wilderness" in a "ridiculous" attempt to outflank Labour on public services.

He was also challenged by supporters of his former director of strategy, Dominic Cummings, who claimed their man resigned because the leader had blocked the radical change that was necessary to make the party re-electable.

Tory modernisers have complained that the public remains in the dark about Mr Duncan Smith's direction, but strategists were adamant that this week will prove how much work has been done in the leader's first year in office. Senior party sources stressed that the new policies were aimed at carrying on the unfinished business of the Thatcher years.

The policies are bound to trigger accusations that the party is lurching to the right, but Mr Duncan Smith will emphasise a more inclusive tone, stressing the plight of the poor and vulnerable.

Senior Tory backbenchers, and some within the Shadow Cabinet, are understood to be so unimpressed with Mr Duncan Smith's performance that they are considering calling on Kenneth Clarke to replace him.

Opinion polls yesterday added to the pressure, with one putting the Tories on 28 per cent and another putting them neck-and-neck with the Liberal Democrats for the first time on 24 per cent.

However, the Tory leader was defiant, vowing to remain in his post until the next election.