"When considering where our Party should go next, a good starting point for each of us is to ask ourselves why we entered politics in the first place.
"There are so many reasons why people choose to pursue political careers that generalisations are almost impossible. But if you asked my colleagues in the House - whether from the Left or the Right - why they do what they do, I suspect that the great majority would say that they went into politics to change things for the better. This might sound trite, but it is also, I think, generally true.
"While we Conservatives are thus ready to acknowledge the good intentions of our political opponents, the Left - in all its varieties - have never been willing to do so of us. Eternally self-righteous, they insist that those who are not prepared to sign up to the Left's methods cannot share with them the desire for a better life for their fellow men and women.
"Friedrich Hayek, as so often, went to the root of the fallacy. In The Road to Serfdom he writes:
'Outside the sphere of individual responsibility there is neither goodness nor badness, neither opportunity for moral merit nor the chance of proving one's conviction by sacrificing one's desires, to do what one thinks is right. Only where we are responsible for our own interests and are free to sacrifice them, has our decision moral value.'
"In other words, the one thing you can't nationalise is compassion.
"Unfortunately, the Left have often been better at spinning a line than we Conservatives have. And they never tire of trying to convince the public that the proof of a politician's compassionate credentials is how much he increases government spending.
"While this problem for the Right is acute at present, it is certainly not new. Believers in limited government have long been traduced by collectivists. Claude Frédéric Bastiat, the great market French economist once remarked: 'every time we object to a thing being done by government, the socialists conclude that we object to its being done at all'.
"Almost two centuries might have passed since Bastiat's observation, but things have changed little in the meantime. George W. Bush's "compassionate conservatism" - whose core principle was encouraging local and voluntary groups to do what the federal government couldn't, indeed shouldn't - was denounced by the Democrats as uncaring. Fortunately, of course, he prevailed. In the United States, there remains a stronger presumption against, and aversion to, government intervention than in Europe, and, sad to say, Britain.
"For instance, until very recently here, it was judged politically impossible -how much moral cowardice lies behind that phrase-to tell the unpleasant truth about the failures of the NHS. Pointing out the systemic failures of the Health Service as it is run today was regarded as tantamount to wanting worse, not better, health for the nation. We have had the courage to open up the debate. We must not squander the opportunity which having done so offers us.
"And we must not allow our opponents to portray criticisms of the institutional failures of the NHS as criticisms of dedicated NHS staff. It is quite the reverse as many of those who see most clearly the effects on their patients are afraid to speak out for fear of politically motivated retaliation.
"We believe strongly in the values of the NHS- of high quality health care available to all our fellow citizens irrespective of their ability to pay- but the NHS is further away than ever from realising this. Worst of all is the fact that many of the poorest people in Britain, who may have the greatest need for health care, often receive the worst deal.
"The root of the differences between Conservativism and socialism, and accordingly between their respective approaches to public services, comes down to a totally different view of choice. Like many others who cut their teeth in Conservative politics in the early 1980s, I regard the fundamental mission of the Conservative Party as being to liberate and empower the individual citizen. Indeed, it was our historic mission long before that and it is as relevant today as it has ever been.
"We have still to be vigilant about the inroads of state power upon individual liberty. That danger is rearing its ugly head once more in Britain. Under Tony Blair and so-called "New Labour", fundamental freedoms of the citizen are treated with scant regard. Taxation and public spending are rising, and rising fast. The net of welfare dependency, operating through tax credits, threatens to undermine responsibility and strangle initiative.
"All these trends are alarming in themselves. Even more disturbing is the fact that our public services, particularly the NHS, remain fundamentally unreformed. They are run on centralised lines. And, despite the sterling efforts of so many working in them, those services woefully fail those who depend on them.
"The wonder is that anyone should be surprised by such shortcomings.
"They are inevitable if you try to operate a system according to flawed principles. And the longer you persist with such a system, the worse those shortcomings get.
"Tony Blair would have us believe that he has ditched the collectivist approach. He insists that his guiding principle is pragmatism, or as the mantra runs, 'What Works'.
"But more and more people see through this disguise and realise that the Prime Minister is no different from his Labour predecessors. If he genuinely believed that he should opt for what works, this would oblige him to admit that the current system does not work, and never will, and - most importantly - to accept why. But if he cannot, indeed dare not, explain why, it falls to us to do so.
"The current system isn't just inefficient: it is arrogant and insensitive and, despite the best efforts of dedicated men and women, it becomes captured by the vested interests of a self-sustaining bureaucracy at the expense of consumers.
"Bureaucratic centralism isn't simply incompatible with personal choice. It is designed to be so. The preferences of politicians are deliberately put before the individual needs of patients in the NHS as it exists today.
"So we now see a system ever more obsessed with statistical targets where individual patients become less important than the bureaucratic process and where dedicated professionals find their clinical freedom haemorrhaging away.
"As a Conservative, I prefer a different approach. I prefer the unregimented, the flexible and the diverse in the provision of our services, building on and learning from the wide experience of others. And I believe, too, that there is nothing more important in peace-time politics than to empower individuals to make more choices for themselves.
"This is as much a moral as a material imperative. It is by making choices that we fulfil our destinies, that we grow as individuals, that we assert our existence. And the wonderful truth is - as liberal thinkers like Smith, Bastiat and Hayek proclaimed - that the more we are allowed to make our own choices, the more we contribute more towards the progress of society as a whole.
"My yearning for greater choice should not be mistaken for utopianism. Some limits on choice, over and above the obvious ones imposed on the law-abiding, might be required. But the onus must at every stage be on those who wish to constrain choice to prove why this is necessary. The presumption of Conservative reformers will always be that widening choice is the better for everyone.
"Aneurin Bevan conceived the NHS at a time when people believed that ill-health would be a finite problem, that after an initial burst of activity, the annual cost of the service would fall. Unfortunately we now know it didn't and it never will.
"So year by year we are forced to live with the consequences of demand outstripping supply.
"The fallacy of finite demand has been compounded by the prejudice in favour of centralised state provision which has restricted supply. Local, municipal and voluntary hospitals went. Although doctors slipped the net of becoming state employees, they too were brought under a tight regime of dependency and have stayed there. Bevan's guiding principle as he told the Cabinet was that 'we insist on the principle of public control accompanying public financing,' and he was as true to that as he could get away with.
"Everyone is said to have equal access to the NHS. No-one, it is claimed, pays. Unit costs are said to be low. In short, the Health Service is said to provide for every emergency from the cradle to the grave. Except, of course, it doesn't. Its original hopes have never fulfilled. And the real cost of this political failure lies in the human tragedy of British patients suffering from lower survival rates for many major illnesses than our neighbours in Europe.
"By focusing only on equality, we have neglected quality, so that now in the NHS what we increasingly have is equality of access to mediocrity. Defenders of the status quo regard those who provide for themselves as administering a blow to the system. Variety and diversity are seen as suspect. Alternative providers are viewed with suspicion. Any deviation from the centralised provision is instantly derided as elitist or two tier. Little or no thought is given to the implications that all this has on diversity and innovation.
"The left believe that it is morally unacceptable to allow people to buy better care for themselves or their families using their private income. But what is really morally unacceptable is that poor people should be forced to use their own savings to escape from a system to which they have contributed all their working lives. Yet that is what is increasingly happening in this country.
"Conservatives only have one incontrovertible principle: that no-one should be denied necessary medical treatment simply because he or she is not wealthy enough to afford it.
"The problem with today's NHS has been that the left has tacked on a number of other conditions which have nothing to do with improving patient care. They include financing the Health Service almost exclusively from the taxation; centralised decision-making, accompanied by inevitable politicisation; and near-monopoly provision by the state. Taken together, these features have given Britain an unacceptably poor standard of healthcare.
"There is no mystery about the NHS's failings. Because it is wholly financed from the Exchequer, it is subject to an inflexible Treasury control which has resulted in under-provision. Because it is centrally planned, its services are administratively rationed. Because everyone is meant to be able to receive the same healthcare wherever they live, debate is more often focused on equalising standards than on raising them. Because the NHS is monolithic, it is inflexible and discourages innovation. Because healthcare is politicised, the needs of individual patients are subordinated to the image of a government. Because the state is effectively a monopoly provider, healthcare in Britain is riddled with inefficiency.
"Let us just remind ourselves of what this actually means.
"The Department of Health admits that up to a fifth of the NHS budget is squandered through waste and fraud.
"Inputs aren't matched by outputs. As more money has gone into the NHS - a real-terms 30 per cent over three years - its activity has barely risen.
"Bureaucracy has burgeoned so far that for the first time in the history of the NHS the number of administrators is actually greater than the number of beds.
"Waiting lists are manipulated in a disgraceful and unethical fashion to meet government targets that override and distort clinical judgement.
"We have the lowest ratio of doctors per head of population in the developed world.
"Retention of NHS professionals is so bad that there are now more trained nurses not working as nurses at all than there are nurses working.
"Not surprisingly, health outcomes are significantly worse. Cancer victims in Europe and the United States are much more likely to survive five years than their counterparts in Britain. Indeed, it's been estimated that if Britain reached the European average for cancer survival rates, nearly 10,000 lives a year would be saved.
"If a private provider of any service were delivering such standards to its customers it would be impossible to quell the outraged demands for radical reform.
"There was a time when people were prepared to overlook such things. They were grateful for what they could get. But in our current, more consumerist society people expect better services and they rightly expect to be treated with dignity and respect. That is exactly what the Conservatives intend to deliver.
"Mr Blair hopes that as we travel in Europe we will gain a more favourable view of the Euro. The evidence suggests that he'll be disappointed. But even more uncomfortable for Labour what does impress us - and it's impressed me mightily: just how much better other countries' healthcare systems work than ours. The facts make gloomy reading for anyone who thinks we enjoy the best healthcare in the world - for we clearly don't.
"As someone who was educated and trained as an NHS doctor I was genuinely taken aback by the quality of the health care in the European countries I have visited. There is no longer any dispute that healthcare in Britain falls woefully short of what we should expect in the World's fourth largest economy. We must have the humility to learn from the success of others or British patients will continue to suffer unnecessarily.
"Almost all objective observers of healthcare in Britain now accept that we will continue to fall behind unless we are prepared to undertake genuine and far-reaching reform of the NHS.
"Of course, the Government has made it clear that it will not countenance any such reform. Gordon Brown has ruled out any change to the way the system is financed - even though healthcare systems throughout Europe which produce better clinical outcomes than we manage have diversified funding mechanisms. New Labour refuses to encourage private provision - even though such arrangements are the undisputed norm throughout Europe. And Ministers continue to regard buying in of private healthcare for the NHS as a temporary measure, to be implemented through gritted teeth - even though in other European systems, such provision is permanent and central.
"What is truly galling is the way Labour Ministers talk about the NHS being 'free'. It is not free. Every taxpayer contributes a large amount in tax and N.I. to the NHS every year. But unlike any other service we buy we have absolutely no say about what we get. We are not trusted as patients to make informed choices about our health provision and any suggestion that we could get better quality care without having to part with more of our money is mocked by the same Socialist politicians who put the model of delivery before the quality of the delivery.
"Instead, the Government's response is to pour in more money, raised by hiking National Insurance. And as I argued at Harrogate, this is doomed to fail.
"This picture is a salutary antidote to Tony Blair's rhetorical claim that Margaret Thatcher's economic reforms of the eighties are safe in his hands. Actually, they aren't: and as Britain steadily moves away from a low spending, low taxing, low regulation economy towards a corporatist European one, that will be come all too clear.
"Against that background, nobody should be fooled by the Prime Minister's claims that he wants to reform the NHS. Remember - it was Margaret Thatcher's Conservative Government which had first to enact the reforms that restored our economy; only then did Labour reluctantly accept them. So don't expect similarly real reforms of public services now from anyone but the Conservatives. Then - who knows - sometime in the future a Labour Opposition might accept that too.
"A pivotal element of the reforms we will outline over the coming months will be increased choice for patients.
"In today's NHS, patients have no meaningful choice over the treatment they receive. And the so-called "choice" which Alan Milburn plans to introduce over the next couple of years is little more than a sham.
"At present individual choice is effectively excluded from every stage of healthcare within the NHS. Patients have practically no choice of GP: they are just attached to a list. If they fall ill and have to be referred to a consultant, they can't choose who it will be, which hospital they attend or when they will be treated. And if they don't conform to the bureaucratic rules, their operation may be cancelled and like naughty children they're sent to the back of the queue.
"Choice can, of course, be exercised by those who go private - either because they have private medical insurance or, like an increasing number, because they decide to pay directly for treatment themselves. It is extraordinary that those who make this decision are so often criticised. They should in fact be congratulated. Not only do they pay their taxes to keep up the NHS: by going private they also relieve the NHS of the burden of their treatment, making way for someone else. In any sensible system, people would be encouraged to do this. Instead, financial incentives to take responsibility for their own care have deliberately been withheld. It's all part of socialism's age-old belief that public spending is somehow more moral than private spending. And that's plain wrong.
"But choice has to mean more than the ability to opt for care outside the NHS. All patients need to be given a greater say about what happens to them and their families within the NHS.
"Effective choice requires diversity. Henry Ford's famous offer of "any colour so long as it's black" wouldn't be much of a marketing ploy today. Patients should have a variety of options. And there can be no real diversity, and so no effective choice unless we can find a greater role for independently-run providers of secondary health care. Only this way can both patients and their clinicians increasingly able to make informed choices about the type of care provided.
"For empowering individuals to exercise choice isn't only relevant to those who consume healthcare, but also to the professionals who provide the care itself. Not so long ago the decision to become a doctor or nurse was widely referred to as a "vocation". It's a noble concept and one which still inspires many who work in the public services. But no-one with such a sense of calling will be happy to be a mere cog in an administrative wheel, deprived of intiative, endlessly scrutinised and second-guessed. Yet this is precisely how we now expect our doctors and nurses (and indeed teachers) to function. No wonder so many of our health professionals can't be persuaded to carry on. Power has to be genuinely devolved and government must give professionals the space to do their jobs if the nation's healthcare is to improve.
"Our reforms will make that choice and diversity a reality and bring an end to the over politicised, over bureaucratic and over centralised service.
"A modern NHS must cater for well-informed individual choice that is satisfied by well-run individual providers. In this kind of system, the pressures for efficiency, the requirements for accountability and the scrutiny of quality will turn out to be greater not less than in the present centralised system. And because standards will rise, the aim of ensuring that no-one is deprived of necessary healthcare because they cannot afford it will be more, attainable than it is now, not less. Only then can we begin to get close to the noble aspirations of the NHS, once proud but now sadly failing.
"It can be done if not overnight. The plain truth is that there are no insuperable obstacles to providing a first rate healthcare system for Britain in the twenty-first century - if we have the will to do so.
"All we need is the courage of our convictions that there is a better way to deliver the quality of care that we so desperately want to see for all the British people.
"It is the right thing to do - and what could give us greater heart than that?"