Encourage moderate Tory about heroin (4)
I believe the answer is:
whet
'encourage' is the definition.
(as in whetting someone's appetite)
'moderate tory about heroin' is the wordplay.
'moderate tory' becomes 'wet' (political term used by Margaret Thatcher).
'about' means one lot of letters goes inside another.
'heroin' becomes 'H' (synonyms).
'wet' placed around 'h' is 'WHET'.
(Other definitions for whet that I've seen before include "Sharpen, appetite or razor" , "Sharpen the blade of (a tool/weapon)" , "Hone" , "Excite" , "grind" .)