Could Chris Grayling be the ultimate Tory moderniser?

It doesn’t, of course. There are few more glaring examples of state failure than our prison system. We lock up more people than anywhere else in Europe, yet even as giant new jails open to accommodate them, crime seems to be rising again. The same people – all too often mentally ill, alcoholics or drug addicts – return through the revolving door, some prisons seeing more than seven out of 10 inmates back behind bars again.

It is a shocking waste of money, especially at a time of austerity. We are spending £4bn a year on prison and probation, the 86,500 inmates each costing more than pupils at Eton. Yet the knee-jerk reaction on the right, so quick to seek value for money in other areas of state spending, is to demand always tougher laws, tougher jails, tougher sentencing.

So Mr Grayling genuflects to the forces of darkness, giving an interview to The Sun pledging to “rebuild faith” in the justice system. Just like Labour, which put one new offence on the statute book for every day of the 13 years spent in office, the Coalition seeks to quench the paper’s ferocious thirst for vengeance, even though the tabloid’s campaigning edge on crime might seem rather blunted by recent events.

Mr Grayling refused to target a cut in prison places, despite all the data proving that cheaper alternatives of community punishments cut re-offending by low-level law-breakers more effectively. Prison numbers in England and Wales have doubled in two decades, yet people here suffer twice as many incidents of crime per capita as elsewhere in Europe. As The Independent has highlighted this week, women are being jailed in absurd numbers, wrecking the life chances of their children.

Compare this with Norway, which locks up less than half the number of people per head as Britain and has recidivism rates nearly two-thirds lower. Or Finland, which discovered that imprisoning fewer people made no difference to crime rates but allowed higher spending on the social problems behind crime. Or the Netherlands, which abandoned our tough approach eight years ago and now rents jails to Belgium, having cut crime and prison numbers.

Mr Clarke courageously sought to challenge the failed dogma that dictated British criminal justice policy over the past two decades. He pledged to stem soaring prison numbers and to introduce an enlightened and affordable justice system. Thus he became the first minister to agree substantial spending cuts after the Coalition was formed, a deliberate attempt to bind in his “rehabilitation revolution”.

Instead, he has been ousted, a sacrificial victim of the Prime Minister’s need to appease the right after the Coalition’s catastrophes of recent months. In truth, Mr Clarke’s insouciance to the norms of government infuriated even those who sympathised with him. And he failed in his avowed aim: prison numbers remain stubbornly high.

At first glance, his replacement is deeply depressing – not least since in his previous job Mr Grayling must share responsibility for propagating myths about disabled benefit “scroungers” that fuelled a rise in hate crime. This week’s pathetic posturing as a hard man underscores fears of a sharp right turn. But might he turn out to be a sheep in wolf’s clothing?

In the United States, the crime debate is being detoxified after right-wing republicans realised it is wrong to waste taxpayers’ money locking up the same people again and again. Newt Gingrich pointed out that the biggest falls in crime came in states that were cutting prison populations. “We know there are more humane, effective alternatives,” he said. “The criminal justice system is broken and conservatives must lead the way fixing it.”

It is a Nixon in China moment – and Mr Grayling could be the man to do the same here. He has form, after all. As shadow Home Secretary, he described criminal justice as part of “a broader tapestry” of social issues needing addressing. “We are much too inclined to put prisoners into a cell for 18 hours or more a day,” he said in 2009. “And to do much too little to deal with root problems in their lives like addiction, lack of education or mental health problems.”

Amid Mr Grayling’s crude headline-grabbing last week, the new Justice Secretary was quizzed in Parliament. His priority, he said, was the same as three years ago: to tackle the challenge of rehabilitation and reduce recidivism. And for all the surface froth and fury, the Coalition is quietly pushing progressive reforms with the abandonment of indeterminate sentencing, the introduction of payment by results, and the launch of new community-based punishments – although they are being impeded by deep cuts to probation and other support services.

In the 28 months since taking office, David Cameron is yet to give a major speech on crime. With the cover provided by a right-wing Justice Secretary, is it too much to hope that the Coalition can finally find its voice, turning back the tide of defeatism that sees prison as the solution for damaging social problems?

Then Mr Grayling, the man whose support for the right of hoteliers to bar gay guests so undermined his party’s new image on the eve of the general election, might even emerge as the ultimate Conservative moderniser.