Social Security Secretary

In 1992, John Major made Lilley the secretary of state at the Department of Social Security at a time when the number of claimants of sickness benefits was growing rapidly. Shortly after his appointment, Lilley entertained the Conservative Party's annual conference by outlining his plan to "close down the something for nothing society", delivered in the form of a pastiche of the Lord High Executioner's "little list" song from The Mikado by Gilbert and Sullivan:^[8]

I've got a little list / Of benefit offenders who I'll soon be rooting out / And who never would be missed / They never would be missed. /

There's those who make up bogus claims / In half a dozen names / And councillors who draw the dole / To run left-wing campaigns / They never would be missed / They never would be missed. /

There's young ladies who get pregnant just to jump the housing queue / And dads who won't support the kids / of ladies they have ... kissed / And I haven't even mentioned all those sponging socialists / I've got them on my list / And they’ll none of them be missed / They’ll none of them be missed.

The speech was well received by party members and tabloid newspapers but some commentators "saw his performance as symbolic of a party out of touch with some of society's most vulnerable people". Spitting Image depicted him as a commandant at a Nazi concentration camp and commentator Mark Lawson of The Independent said that if Lilley stayed as Secretary of State for Social Security, it would be "equivalent to Mary Whitehouse becoming madam of a brothel".^[9]

In 1995, Lilley introduced Incapacity Benefit in the hope of checking the rise in sickness benefit claims. Unlike its predecessor, Invalidity Benefit, this new welfare payment came with a medical test that gauged claimants' ability to work. Nevertheless, the number of claimants and the cost to the taxpayer continued to rise.^[10]

Lilley was among the front bench Conservative ministers who threatened to join the Maastricht Rebels in voting against his government over the signing of the Maastricht Treaty. When asked why Lilley and two of his colleagues had not been sacked from their front bench positions, Major replied "We don't want another three more of the bastards out there"^[11]

Conference song

Lilley reprised his lampooning of some people drawing benefits from the National Insurance scheme – the overall number of which had grown rapidly on his watch – by singing to the Conservative Party's annual conference after it had lost the general election in 1997. He changed the words of "Land of Hope and Glory" to create a song "Land of Chattering Classes", in condemnation of the purported abandonment of British values and history by Tony Blair's New Labour. Lilley joked that a Labour version of Land and Hope and Glory had been "leaked" to him. He said, "They call it 'Land of Pseudo Tories' and it goes like this:

"Land of chattering classes, no more pageantry / Darlings, raise your glasses, to brave modernity / Who needs Nelson or Churchill? The past is so passé / Britain's now about Britpop and the River Café / God, this place is so frumpy, let's be more like LA!"

After cheers from the conference, he continued: "Not to be outdone, [Chancellor] Gordon Brown has tried to trump his neighbour [Mr Blair] with a new version of Rule Britannia":"

"Cool Britannia, where saving costs you more / Unless, like Geoffrey Robinson, your Trust's offshore!"

In opposition

He contested the 1997 Conservative Party leadership election, placing fourth in a field of five. In opposition, he held the post of Shadow Chancellor from 1997 to 1998 and was Deputy Leader of the Conservative Party from 1998 to 1999.^[12] Lilley was sacked by Conservative Party leader William Hague in June 1999 as part of a Shadow Cabinet reshuffle. The cause was Lilley's Rab Butler Memorial lecture, in which he suggested the party distance itself from Thatcher's free market ideology.^[13]

Lilley is known for being an advocate of marijuana legalisation.^[14] In 2001, Lilley provoked some controversy in his party and Britain more widely by calling for cannabis to be legalised in a Social Market Foundation pamphlet.^[15]

Lilley produced a report for the Bow Group in 2005 that was highly critical of Government plans to introduce national identity cards.^[16]

When David Cameron was elected leader of the Conservatives in December 2005, Lilley was appointed Chairman of the Globalisation and Global Poverty policy group, part of Cameron's extensive 18-month policy review.

Climate change

In November 2012, it was reported^[17] that Lilley had been selected by the Conservative Party to join the House of Commons Select Committee on Climate Change. Lilley was at that time vice chairman and senior independent non-executive director of Tethys Petroleum and had received options to buy over $400,000 of shares at a price above their then market value. He resigned from the board in 2014 without exercising those options. He was seen by some as being unsuitable for the position because of this role and a perceived conflict of interest.^[18] He was one of only five MPs to oppose the Climate Change Act 2008.^[19] Further scrutiny came from the highlighting by Private Eye that Lilley had previously lobbied then climate change minister Ed Miliband with letters requesting the 'cost of global warming'.^[17]

Queen's Speech amendment

On 19 May 2016, Lilley, backed by other Eurosceptic Tory MPs as well as the other parties proposed a rebel amendment to the Queen's Speech, over fears that the US-EU pact would lead to the privatisation of the NHS by paving the way for American health providers in the UK.^[20] Lilley said that the Investor state dispute settlement provision in TTIP would grant American multinationals the right to sue the British government over any regulations which affected their profits, and questioned why the British government had not tried to exclude the NHS from TTIP.

The UK government ultimately agreed to amend the Queen's Speech to commit to explicitly protecting the NHS from the terms of the future trade deal.^[21]

Lilley had earlier committed to supporting withdrawal from the EU during the referendum campaign.^[22]

Common Sense Group

Following an interim report on the connections between colonialism and properties now in the care of the National Trust, including links with historic slavery, Lilley was among the signatories of a letter to The Telegraph in November 2020 from the "Common Sense Group" of Conservative Parliamentarians. The letter accused the National Trust of being "coloured by cultural Marxist dogma, colloquially known as the 'woke agenda'".^[23]