Chris Gent: We do not need to tolerate poor public services

The Conservative Party is having an interesting conference. On Friday it was a tax cutting party; by Sunday it was a party that would spend billions more on pensions. Yesterday it was a party that boldly introduced market principles into health and schools policy. Today, it would seem, it will scrap any vestige of market reform in higher education. The Conservative Party seems uncertain whether to embrace reform or to regress, and in turn voters are uncertain what the party stands for.

Politics in Britain is at a turning point. In 1997, Britain chose Labour because it wanted better public services and economic growth. As Labour's election ads put it just before polling day, there were 24 hours to save the NHS. But after six years, it is quite evident that the NHS is not providing the quality of healthcare people routinely get in other countries. The NHS hasn't been saved. Our schools are not better and our transport system has got worse.

Back in 1997, the electorate took the view that more money was the answer. A Labour government would supply more of it than the Conservatives. The public had first to see for themselves whether tax and spend would work before they would consider radical alternatives to the present system of government run monopolies.

That moment has now arrived. And the sense that the current approach is failing is reflected by the Prime Minister.

"We thought change was a matter of will. Have the right programme, spend the right money and the job is done. But," as Tony Blair told the Labour Conference last week, "experience has taught us: the job is never done." However, voters will not tolerate the prospect of perpetual failure. They rightly expect the job to be done.

Poor public services are not part of Britain's genetic make-up. British-based international companies learn and apply best practice from around the world. Such openness to new ideas is long overdue in the political establishment. Socialist Sweden has school vouchers. Half of Germany's hospitals are non-state owned. France has no hospital waiting lists. Politicians in those countries don't think of these things in terms of Left or Right. They ask: 'How can we run these services better and how can we optimise consumer choice?'

Why should public services be a natural monopoly? For a long time politicians insisted the same thing about telecommunications. No-one seriously makes that argument now. The result of liberalisation was an explosion of choice, innovation, investment and a better deal for the public. Companies have to be ever-mindful of the consumer's interest. They compete intensely to look after and keep their customers, who have the choice to leave if the service is not up to scratch. Public services are not poor because of market failure: we have not allowed markets to work in them for 60 years. They do not work because of government failure under successive parties.

Voters do not want an approach to public services trapped by an out-dated ideology that denies them choice over some of the most important aspects of their lives. To an increasingly consumerist society, with rising expectations, it risks returning Labour to the wrong side of the fence. The Prime Minister knows it. At Bournemouth he claimed that choice was a Labour principle. But his Chancellor and, it seems, much of his own party, disagree. Earlier this year, Gordon Brown argued that, while the consumer was sovereign when it came to the weekly shopping basket, this was not the case in healthcare. If the customer is not king, who is?

We are told that engaging the private sector in the delivery of services is immoral. But if morality is the test, it is those who are inflicting the current systems on people who have the case to answer. It is a national disgrace that the poorest in society often suffer the worst healthcare, the weakest schools and the highest levels of crime. Far from threatening a mythical equality of service provision, reform could guarantee the most vulnerable in society access to high-quality services for the first time, by putting real spending power in their hands.

The Government is locked in stalemate over how to deliver better public services because its two most powerful personalities fundamentally disagree with each other. Charles Kennedy has made an interesting commitment to smaller national government, and in his conference speech he spoke of more choice and "harnessing the power of the market to do good." But the Liberal Democrats are likely to be tempted simply to move power from one layer of government to another rather than to individuals, to whom it should belong. That presents a powerful opportunity for the Conservative Party, for which choice, competition, markets and personal responsibility should be natural territory.

The Conservatives will only make the breakthrough they need to when they no longer are trapped by the status quo. The one virtue of being in opposition is that you aren't cast into defending the existing system. The blame for poor performance is not ministers, or managers or employees, but the system. Only politicians can change the system.

Small, incremental changes are never going to be enough. Voters have become cynical because they've heard it all before. They sense that the system is broken. An opposition party has to explain why the system delivers the poor results we see all around us; to establish the need for reform. Then it should tell us what its aims of a new system would be. In healthcare, that should be choice, value for money and ensuring that everyone, whatever their financial means, has access to quality healthcare when they need it. Those aims should be put in the shop window, because those are the benefits that patients would get. Every country with first-class healthcare has a proper system based on insurance. It is time to contrast the deal which our NHS patients receive compared with their fellow citizens in Europe.

Real reform cannot be achieved piecemeal or by stealth, because it means fundamentally changing the rules of the game: breaking state monopoly; allowing new providers to compete for services; transferring the state's spending power from producers to consumers, empowering them to make choices in the system.

This is no longer an argument about how much Britain needs to spend on public services. We are spending record amounts, at or approaching the EU average, on education and healthcare. The dividing line in tomorrow's politics will not be between spenders and cutters. It will be between reformers and those who cannot detach themselves from a system designed in the 1940s.

The latest research shows that only a tiny portion of the electorate now strongly support a party. Half of Britain's voters no longer identify themselves with a party at all. Winning office means being able to appeal to at least some of this disillusioned group of voters. They know tax and spend isn't working. Now they want to hear a strong, credible and positive alternative. If there are reforming politicians around, with the courage to set out an entirely new approach to the delivery of public services, the future could be theirs.

Sir Christopher Gent is Chairman of the Advisory Board of Reform (www.reformbritain.com) a Conservative think tank