Beaten, marooned, demoralised – and yet still the right clings to Thatcher. I’ve seen them: they’re so lost | Polly Toynbee

I crept into the inaugural Westminster meeting of The Future of the Right, a Policy Exchange project from a bygone age of Tory ascendancy. I admit it: there’s a certain schadenfreude in observing the remnants of what was the “natural party of government” for most of my lifetime as it tries to adjust to its worst defeat in history . The programme from the group that still calls itself “ the UK’s leading thinktank ” will mark next year’s 50 ^th anniversary of Margaret Thatcher becoming party leader, and the 100 ^th anniversary of her birth. Are the Conservatives capable of grasping how profoundly they have lost any sense of the country they used to govern or why their eviction was the single, clear-as-a-bell voters’ imperative? Are they willing or able to do so? Not from what I heard.

This is a project of “the right”; its commissioners include Rupert Lowe , Great Yarmouth’s new Reform MP, sitting alongside new Tory MP Katie Lam, a former Goldman Sachs vice president and special adviser to Suella Braverman. Charles Moore is their august keeper of the Thatcherite flame. They are led by Paul Goodman, a Tory grandee, who writes a column that warns: “Unless the right changes course, Britain is dooming itself to perpetual Labour rule”. Their Tory-leaning pollsters include Rachel Wolf – founder of Public First, No 10 adviser and author of Boris Johnson’s 2019 manifesto – and James Kanagasooriam of FocalData, coiner of the phrase and idea of the “red wall”.

“We in the Conservative party absolutely deserved to get thrashed,” was an opening burst of reality from Wolf. She excoriated almost everything about the party. Without change, she said, “we deserve to be consigned to oblivion”. That began to sound hopeful, alongside Lam’s “We have no divine right to exist.” Pollster Kanagasooriam also laid out their dread state. With the Liberal Democrats winning Britain’s erstwhile most rightwing seat , Surrey Heath, he said, the Tories must decide if they are for economic conservatism or social conservatism, which has recently meant fighting anti-woke wars.

The room was full of old troupers, rightist thinktankers, ex-MPs and young besuited wannabes waiting for a someday right revival. But they offered scant daylight as the floor and platform echoed with the old sounds: small state, “freedom”, “let people keep more of their money” and “make their own choices”, and “deregulate” the nanny state.

MPs selecting their sixth leader in eight years revealed the depth of their dysfunction in their round one choice of the very essence of their unelectability. Robert Jenrick topped that poll. Who is he? A man whose outings in the public eye include fast-tracking a £1bn planning application by Richard Desmond, a party donor and former purveyor of top-shelf magazines, which could have deprived needy Tower Hamlets council of £45m of revenue had it gone ahead. As immigration minister he ordered staff at an asylum reception centre for children to strip illustrations of Mickey Mouse and Baloo from The Jungle Book from the walls, warning that this was “ not a welcome centre ”. He would leave the European convention on human rights, though most voters want to stay . He’s anti-net zero, defying the 77% of voters who are worried about climate change. He believes any protester shouting “Allahu Akbar” should be arrested. He would vote for Trump ( only 20% of British voters would do the same). As “best prime minister”, the public rate him 20% against 48% for Keir Starmer. (The other leadership contenders do scarcely better.) If his views are closest to those of the party members making the final choice, they are sunk.

Here, at the right’s ideasfest, the water is already flooding in. There are no signs of new thinking, quite the opposite. In this forum, Moore is an anchor, the original old fogey reprising the happy days of Thatcher’s arrival 50 years ago as he read from his noted biography extolling her values and convictions, and her wily politics. These days, among the post-Brexit Tory mayhem, he passes for their saner wing: at least he is not pro-Trump or Putin. Next to Lowe of the Trump-Farage party, Moore was enlightenment itself.

And yet Moore represents the core of the Tories’ problem. When he says of the Thatcher era that “it is time to stop squandering that inheritance”, he embodies the anti-state religion that makes his party unelectable. Until they think the unthinkable and escape the Thatcher fetish, until they understand that she has finally been proved wrong on almost everything, they will stay lost to modern Britain. Privatisations have collapsed into spectacular unpopularity – water, energy, rail, mail, social care, children’s homes and council homes. The “left behind” ruins of her de-industrialisations scar the social landscape. The inequality that soared under her leadership remains an economic as well as a social disaster. Deregulation’s crusade against red tape was tragically exposed in the Grenfell horror. And most people now know all this.

Thatcher used to say, “You will always spend the pound in your pocket better than the state will”, but most people would rather pay more tax than see the underfunded public realm buckle. Even if it means personally paying more tax, 40% of Britons want public services improved , compared with 27% who choose tax cuts. “The right needs a programme that will address the fundamental problems facing the country,” said one of the more sensibles. Yes indeed. But there is no sign of that on the horizon.

From the floor I asked the last question: none of those problems can be solved by less government, only by more, so how will they address them? (“AI” was the empty reply from one panellist.) Voters want more from the state, not less: better NHS, schools, environment, police and everything else. How does the Conservative party adapt to that?

The only coherent reply came from Wolf. “If Labour fails, then we can say that proves the state can’t do everything. The public will move to the right.” OK, but flip that coin: if Labour succeeds in steadily improving public services, then this party has nothing to say. Escape from Thatcher idolatry and Brexit fantasy looks unimaginable, but until someone dares to make that break, they are lost. The only comfort, said Kanagasooriam, is Labour’s victory on just 34% of the vote. And the electorate’s new volatility.

All governments fail in the end. Failure comes in infinite varieties, from events out of the blue, to loss of grip, losing touch, exhaustion of ideas and hubris. Labour is learning on the job that rational policies, such as taking the winter fuel allowance from better-off pensioners, are not necessarily good politics. (Expect a finessing mitigation soon, such as cheaper social energy tariffs for all on low incomes.)

The new volatility threatens the old duopoly from all sides. Plausible populists can spring up: never say never. But in the here and now, it is simply implausible that they could succeed on any platform resembling small-state Thatcherism. Until the budget, we don’t know how expansive Labour will be, but its greatest risk would be failing to set the public realm back on its feet after the austerity years.

Starmer removed that portrait of Margaret Thatcher from his No 10 study - and riled the right by doing so, but if ever a group needed to deradicalise itself from her, that group is the Tories. She looms, she haunts, she is ever-present. It is a debilitating deification they will have to address if they are ever to get near power again .

• Polly Toynbee is a Guardian columnist