The two impulses of modern Conservatism are on vivid display in Piccadilly Circus, London. The neon signs above flash out the message that the market is open for business. Down below, the Angel of Christian Charity, more commonly known as the statue of Eros, commemorates the Tory philanthropy of the Earl of Shaftesbury.

These are the components of what George Osborne and David Cameron have called “progressive conservatism”. In his conference speech in Manchester this month, Mr Cameron made the intriguing claim that, in the very act of reducing the size of the State, a future Conservative government would improve the condition of the poor. When the State withdraws, he argued, the wounds of society heal over. The main problem of the poor, by this argument, is not that they have too little money but that they have too much government.

Well, it’s a view. We will all somehow make ourselves better. The naivety would be touching if it wasn’t so irritating. The Conservative conference was full of earnest young people pointing out that they had just discovered something called “the poor” that the Labour Government had shamefully failed.

For the record, inequality has never risen faster than during the Thatcher years. John Major reduced inequality through the genius expedient of arranging a recession. Over the past decade the salaries of the educated have risen quicker than the wages of the uneducated. The upshot of government action — the minimum wage and tax credits — has almost, but not quite, offset the growing income inequality.

Mr Cameron will have to undergo an extraordinary policy conversion if he is serious about meeting his pledge. It has to be said that he has made a rotten start. We know that the Tories are keen to lift the threshold for inheritance tax. They propose to abolish the Government’s job guarantee for young people. They want to move incapacity claimants on to unemployment assistance and offer a handout to married couples for the virtue of marriage. Whatever else can be said for these policies, every one will have a detrimental effect on equality. It’s harder than it looks, being a socialist.

With that off my chest, it’s important to pour scorn on the argument, not the motive. The point is not that Mr Cameron and Mr Osborne are insincere. It’s that they don’t know their own history. Culture change doesn’t spring fully formed out of the ether. As a matter of historical record, pretty much every time that a Conservative Government has left a progressive legacy it has done so by adding to the functions of government rather than by subtracting from them.

In the 19th century the Tories were, quite rightly, keen for the State to regulate factory work. Lord Liverpool’s Cotton Mills and Factories Act, 1819, prohibited the employment of children under 9 years of age. Shaftesbury’s Factory Acts in the 1840s reduced working time for women and children and introduced the idea of state responsibility for health and safety. Disraeli’s Factory Act of 1874 made education compulsory for children up to the age of 10. In 1901 Lord Salisbury raised the minimum working age to 12.

The Victorian Conservative Party also had a developed sense of the public realm and regulated without compunction. The Public Health Act of 1875 forced councils to clear refuse and sewage and to provide an adequate water supply. The same year the Artisans’ Dwelling Act began the clearing of urban slums.

Since the turn of the 20th century, progressive conservatism has taken a bit of a breather. Once the great infrastructure projects had been completed, once the basic amenities had been catered for and egregious injustices countered, it all got very tricky. George Osborne claims Stanley Baldwin’s extension of state pensions and R. A. Butler’s Education Act for the progressive Tory side. They can be granted, with the observation that they, too, were acts of benign big government.

And it would be only accurate to note that the postwar welfare state gained very little from progressive conservatism, that Roy Jenkins, as a liberal Home Secretary, could rely on Tory opposition and that Mr Cameron has rather belatedly found that he did believe in Sure Start, the minimum wage and civil partnerships all along. There is little doubt that, in the progressive ledger, the Conservative Party is historically in deficit.

None of that means that a Tory Government is fated to fail the test that Mr Cameron has repeatedly set it — to make the country fairer and more equal. But there is a serious doubt as to whether his right-wing means are up to his left-wing ends. Decentralising power and responsibility and strengthening society are very good things — who wants the opposite — but they are not enough.

You can’t simply move big government out and big voluntary sector in. A third of total voluntary sector funding now comes from the public purse and cuts are unavoidable. Unwinding the stealthy nationalisation of the third sector will cause howls of pain from people the Tories have embraced as their new best friends. Not that the embrace will last long anyway. Many schemes get worse as they get bigger. The great people in the voluntary sector cannot be cloned and the unreliable ones can be a proper nuisance.

The Tories will soon find out why decentralisation is the demand of opposition that governments forget. In the first phase of Sure Start, the scheme to help poor children, the title was no more than a badge. Under its banner, local activists did their own thing. Evaluations showed that most of it had no beneficial impact on children at all. Most of the things the voluntary sector was doing, with its fabled knowledge, turned out to be rubbish. A minority of schemes were excellent. So, what do you do? Spend more public money on things you know can’t work, in the name of the small state? Or impose some conditions from the centre?

The sane answer is that sometimes — literacy and numeracy policy is another example — command and control works. Not often, but sometimes. Ruling it out because “big government” is always the problem is barely serious.

There is certainly a noble Conservative tradition of social reform. But that history is not the tale of the market making the muck and charity spreading it around evenly. In Piccadilly Circus, between the neon and the nude archer, there is something missing. The avowed enemy, big government, is missing.

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