David Cameron: The Iron Toff?

Britons can't say they weren't warned. Much of David Cameron's drastic reform program was outlined months ago in his party's election manifesto, well before he was chosen as prime minister. No one paid much attention, though: long experience has taught the country's voters to regard campaign pledges as vague aspirations, not as commitments to immediate action. Besides, Cameron seemed like such a nice young man. He had remade the Tories' image from a heartless pack of Thatcherite free—market ideologues to something gentler and more humane. He had visited the Arctic Circle to witness the effects of global warming. He had voted to recognize civil partnerships for gay and lesbian couples. Out went the flaming torch as the party's official emblem; in came the scribbly oak tree in ecofriendly green and blue.

But a different David Cameron has emerged, and his vision for Britain is every bit as radical in its way as the Iron Lady's. In some respects he's actually outdoing her: it wasn't until Margaret Thatcher's second term as prime minister (1983–87) that she began her nation-transforming moves in earnest, from selling off state industries to smashing the power of the unions. For his part, Cameron is wasting no time. Barely four months after moving into 10 Downing Street, he's already constructing his promised Big Society. He's decentralizing the health-care and education systems, overhauling the welfare system, and declaring war on government spending. As soon as he took office, Cameron got Parliament to enact $9 billion in emergency cuts from the current budget, amounting to nearly 1 percent of the roughly $995 billion total.

That was only for starters. Even the hardest-core Tea Partier would admire the ambition of Cameron's chancellor of the Exchequer, George Osborne, to effectively eliminate Britain's deficit by 2015. When the results of a top-to-bottom review of government spending are issued next month, all departments except health care and foreign aid are expected to face cuts of at least 25 percent over the next four years. By the end of this first term, Cameron and Osborne's plans would reduce spending to 39 percent of national income—down from 47 percent when they took office, and two points lower than the figure Thatcher had achieved when she left office in 1991. As many as 600,000 public-sector employees could lose their jobs in the process.

Like Thatcher before him, Cameron is heading for a bare-knuckle fight. The country's labor unions have already begun squaring up for a showdown, with threats of a coordinated wave of strikes and civil disobedience. At last week's annual conference of the Trades Union Congress, speaker after speaker stood up to denounce Cameron's budget plans. "Cut services, put jobs in peril, and increase inequality—that is the way to make Britain a darker, brutish, more frightening place," warned Brendan Barber, the TUC's general secretary. Even the nation's police, usually strong Conservative backers, are voicing qualms about the civil and industrial unrest Cameron's cuts might -inspire—-especially since as many as 40,000 frontline law enforcers may be laid off. (Politicians are also making sacrifices, of sorts: government ministers have had to give up their automatic right to official cars and chauffeurs, and beer prices have soared at House of Commons bars after a slashing of subsidies.)

Those worries don't seem to bother Cameron. "We're going to have to change the culture of government and stand up to some powerful vested interests," he wrote in The Observer last week. "But the fact is that this country wants and needs this power shift—so, I promise you, we will see this through." The recent fiscal disasters in Greece and elsewhere have frightened many Britons into accepting the need for austerity, presenting Cameron with a rare opportunity to reshape British society. "It is vital…to set out and commit to a clear and credible plan for reducing the deficit," declared Bank of England head Mervyn King last week. "Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro zone earlier this year."

Besides covering a bloated public pay-roll that employs more than 20 percent of the country's labor force, British taxpayers are asked to support a hugely intricate social-welfare complex that has metastasized beyond all logic. Although the unemployed can expect a basic dole of barely $100 a week, the system as a whole now devours almost 30 percent of all public spending, with all sorts of benefits that are handed out regardless of income. Most citizens over 60 are entitled to a special "winter fuel allowance" of up to $600 and free bus travel, and even the richest parents receive a "child benefit" of up to $30 a week per youngster. Almost 4 million of Britain's 20 million households have no one who earns a wage. "There is a growing realization that we have been spending too much and the state has been doing too much," says Natalie Evans of the conservative think tank Policy Exchange.

The question is whether the public will stick with Cameron when his cuts start to bite. The latest poll results say 53 percent of voters think the government is handling the economy well, and the Conservatives' popularity has held steady since June at 39 percent. But more than three fourths of voters say they don't like the speed and scale of Cameron's spending cuts, and the number expecting the economy to fare badly over the coming months has jumped 13 points to 65 percent. Trimming the budget will mean tough decisions on which battles to fight and which to concede. Cameron's government has already been forced to give up a proposal to eliminate distribution of free milk to preschoolers. (Yet another echo of Thatcher: as education minister in 1971 she decreed a similar cut in primary schools, earning her the sobriquet Milk Snatcher.)

Expert opinion is sharply divided on the wisdom of Cameron's cuts. Many worry that big deficit-reduction moves right now could plunge Britain back into deep recession. "It would be completely disastrous, the greatest macroeconomic mistake in a century," says Dartmouth professor David Blanchflower, a former member of the Bank of England's monetary--policy committee. Others say the worries are overblown. "Cuts of 25 percent look extreme from where we are now, but I think [Cameron and Osborne] have approached this in a reasonable way," says York University economist Peter Spencer. "The really tough measures won't actually come until later on, when hopefully the economy will be in better shape to stand them." Still, the International Monetary Fund's director general, Dominique Strauss-Kahn, sounded a cautionary note at a speech in Oslo last week, urging all recession-hit governments to focus on job creation rather than budget balancing until the world economy stabilizes: "We must not ex-pect that growth alone will automatically create the jobs we need."

At present, though, Cameron appears to have the final say. Although the Conservatives' power-sharing partners, the Liberal Democrats, stand to the left of the "Cameroons" on many issues, their seven-page coalition agreement has proved to be a blueprint for action rather than a check on either party's ambitions. The Tories have given ground on electoral reform, promising a referendum next year on a new voting system that would let voters nominate a second preference in case their favored candidate fails to win a full majority. And in return, the Lib Dems have endorsed the call for urgent budget cuts. The public joshing between Cameron and Liberal Democrat leader Nick Clegg, his near match in age (43) and upper-crust background, looks like sincere friendship. People are calling their partnership "The Brokeback Coalition."

Cameron has something Thatcher lacked: a political persona that's not abrasive. His assured style, in fact, has made a particularly welcome change from the awkward public persona of his Labour Party predecessor, Gordon Brown. There are no more tales of tantrums at Downing Street or loopy late-night calls to cabinet ministers. Insider accounts speak of a boss who likes to keep regular office hours and sometimes take his kids to school. But the biggest plus is how at ease he looks in his role. "He doesn't come across as ideological or as a polarizing figure even while he's considering measures that will have far-reaching consequences," says Rick Nye, former head of the Conservative Research Department, who's now a director of the Populus polling organization.

And ironically, his ambitions may be even greater than Thatcher's. Cameron wants to do more than pinch pennies: he wants to reform the very relationship between Britons and their government. As he sees it, the dominance of the state has sapped Britain's sense of personal responsibility, and he wants individuals and neighborhoods to take back control of their own lives. "We believe that when people are given the freedom to take responsibility, they start achieving things on their own and they're possessed with a new dynamism," he says. In practice that means a multitude of changes to decentralize power, and a bigger role for the private sector in fields like drug rehab, with payment based on results. Not to mention a possible end to government coddling, like the $5,000-a-year cap on tuition for university students in England.

It always comes back to money, and the calculation is a simple one: any meaningful cuts are sure to bring unpopularity—so why not go for the ones that can yield lasting change? The sooner the most painful parts are done, the more time there is for the public to forget its suffering before the next election. By then the foundations will have been laid for the Big Society. Thatcher would undoubtedly agree.