The Tories also intend to fight the next general election on a pledge to introduce a "market" in education, with teachers forming "group practices" like GPs and being allowed to open, run and partly own schools.
In his keynote speech to the Tories' annual conference in Bournemouth, Mr Hague pledged they would become "the true party of public services". Outlining his main theme that Tory values were "the British Way", he insisted this did not mean central control of public services: "The British Way is about the creativity that comes from independence, it is about the diversity that comes from freedom, it is about the efficiency that comes from choice."
While promising the Tories would stand for "generous funding" of the NHS, he called for the "Berlin Wall" between the public and private health sectors to be torn down.
Tory sources said that tax relief could be given to encourage people to take out health insurance, but said it was unlikely to be extended to parents whose children are educated at private schools. That would be expensive and controversial.
On education, Mr Hague promised policies to "set all our teachers free" and to slim down drastically the national curriculum. He would scrap the rule under which popular schools cannot expand while there are surplus places at unpopular ones nearby.
Mr Hague made clear his determination to devise a new set of Tory policies to combat the appeal of New Labour and a modern philosophy to trump Mr Blair's Third Way.
However, Mr Hague acknowledged that the task facing his party was a difficult one, and stressed the need for it to listen to the British people.
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