Let low taxes, choice and the free market fix Britain

Reformers need to take a look around and plan our institutions anew, not try to tweak existing systems

There are two ways of doing reform. The first is to understand where we are now; balance the claims of all the various interested parties; and move gently in the desired direction. This is favoured by most politicians and has much to be said for it. Except that it doesn’t work.

The other way is the “blank sheet of paper” approach. Work out what we believe will work best for the country, irrespective of prevailing wisdom and special interests, and figure out how best to do it. This is rarely attempted, but it can succeed. Remember Mrs Thatcher.

Let’s take as a given that free markets are a good thing, being largely responsible for the extraordinary growth in prosperity around the world whenever they are implemented.

Then take the NHS, often called, by its supporters, “the envy of the world”.

So envied that no other country has the same system where all but the rich have no choice and health providers have no reason to compete. So fantastic that we have lower survival rates for major diseases such as cancer than in most other developed economies. Reform doesn’t mean moving to an American system: many other countries provide far better, affordable healthcare for all. Look at Switzerland, Japan, Sweden, Austria, the Netherlands or Australia to see how private insurance and competition work better for all than the state monolith that is the NHS.

And if you still think that the NHS is our national treasure, speak to anyone with a pet. They will tell you how much quicker and better it is to see a (private) vet for a poorly animal than it is to make a doctor’s appointment for a sick child.

Then look at schools. Here we are lucky, for our schools are indeed the envy of the world. At least our public schools are. They now attract record numbers of pupils from overseas; many of them are busy setting up their own branches in the Far and Middle East. Once again, the combination of choice and competition provides a much better system than that offered by state schools. Yes, they cost more (average fees for top independent day schools are around £12,500 a year compared with average spending of about £6,300 a pupil for state secondary schools). But why not let the market work its magic by giving all parents a £6,300 voucher that they can use to pay school fees wherever they wish? Then schools will have a strong incentive to offer what parents want as opposed to what politicians and bureaucrats dictate.

Housing is an area where the free market is so trammelled that it barely works. All the vested interests – large developers, existing householders, pressure groups – have an interest in restricting new house building. So, here are a couple of ideas to free things up: first, scrap all the obstacles that make it difficult to convert shops into houses. A lot of people want to live in the city centre and all those dying high streets (dying because of the great success of internet shopping) would be quickly reinvigorated. And for those who want to live outside the city centre? Make it much easier to convert failing golf courses (membership of which has fallen from 850,000 to 650,00 in England over the past decade) into housing developments.

Then there is tax. The guiding principles should be that it is simple, fair, unavoidable and as low as possible. Instead of which it is complex (Britain’s tax code is about 17,000 pages long, compared with Hong Kong’s 300 pages); unfair (why do wealthy taxpayers get tax relief of £15 billion a year on their pension contributions?); avoidable (remember those taxdodging schemes used by celebrities?); and as, we all know, far too high.

In many other areas, our lives could be so greatly improved: whether it be in broadcasting (would you today, starting with a blank sheet of paper, really set up a state broadcaster such as the BBC?); or the railways (which have benefited hugely from competition in those few areas where it has been allowed).

The British Army has 12 principles of war. Principles one and two are: 1. Selection and maintenance of the Aim; 2. Concentration of force towards the Aim. The Aim should be clear: let free markets and competition do their work. We just need some politicians who will concentrate their force on meeting that Aim. Simple, really. at telegraph.co.uk/opinion