The event, organised by gay equality organisation Stonewall, was standing room only as more than 100 delegates turned up to hear Margot James, the Tory candidate for the Stourbridge parliamentary constituency and Nick Herbert, Shadow Secretary of State for Justice.
Ms James claimed that gay taxpayers should have “more angst than anyone else” at the present government’s handling of the economy, as “they tend not to have young families.”
“There is so much going wrong that gay people have a duty to vote Conservative,” she joked.
Ms James admitted “lots of Tory MPs do not have a good record” on gay rights but insisted the party is changing and described Conservative leader David Cameron as “a great convert to our cause.”
She pointed out that several target seats for the party had picked openly gay candidates such as herself and that many of the other candidates have “progressive views” on gay rights.
The competing demands of the faith community and the gay community could prove a point of conflict in any future Tory administration, she said.
The meeting was chaired by Jean Eaglesham, the chief political correspondent for the Financial Times.
She challenged Ms James over the percetion that the Conservative party’s change of position on gay rights is cosmetic, a “rhetorical positioning” by David Cameron that does not reflect the views of the party at large.
“You can’t rewrite history, but you underestimate what David Cameron has done,” Ms James replied.
“If it was all just superficial you would not get gay candidates selected.”
Ms James claimed that change over the last decade was driven by a small group of people in the Labour party, and that not all party members are so committed to the gay rights agenda.
She revealed that after she was selected for Stourbridge, she was the target of a “systematic letter writing campaign” in the local newspaper.
Some letters questioned her suitability for the seat.
“One person said ‘how can she as a lesbian be on board with David Cameron;s family agenda’ and that really made me angry, because I am so family conscious,” she said.
“I have no doubt that has come from my local Labour party, I am putting that to you as evidence that the blatant homophobia that still exists in the political life of this country is not confined to the Conservative party.”
Mr Herbert said the Tories had made “enormous strides” in the past three years, and that accpetance of gay, lesbian and bisexual people “permeates” the membership and the party’s MPs.
He cited homophobic bullying in schools, homophobia in sport and the international situation for gay people as on the agenda for any future Conservative government.
“We do need to do more to demonstrate that sexuality is not an issue in the Conservative party,” he said, adding that as a “modern, outward-looking” party they will continue to work with Stonewall.
On the issue of religious rights versus gay rights, Mr Herbert warned “let us ourselves be aware of intolerance,” but admitted that faith schools that are funded by the state may prove a challenge to acceptance of gay people.
Mr Herbert said that a first he was reluctant to be a “gay MP” but realised over time that it matters to other gay people, especially those who want to become candidates or work for the party.
“I think in ten year’s time we will not be talking about this stuff,” he added.
Ben Summerskill, the chief executive of Stonewall, spoke to the fringe meeting about the benefits of the upcoming Equality Bill and the success of the Stonewall Diversity Champions scheme.
One in seven workers in Britain is now employed by a company that is a member of the scheme.
In July the British Army became the 400th member of the programme.
It promotes best practice and gives organisations guidance and advice on how to create equality in the workplace.
The Royal Navy and Royal Air Force are already members, alongside companies such as Barclays and IBM and many public sector bodies.
PinkNews.co.uk Editor Tony Grew is in Birmingham for the Conservative Party Conference