Telling taxpayers how their money is spent at the time tax is demanded - which has long been the rule in local government - would make electors view taxation as an opportunity to provide the services they wanted, rather than a burden.
In a high-profile speech to Charter 88, the constitutional reform group, Mr Ashdown also called for the appointment of ministers from outside the 'closed shop' of MPs and peers.
The two reforms were needed because many people no longer believed that politicians were in touch with their lives and concerns, he said.
'They feel less and less control over those who abuse their power, while more and more of the real decisions are hived off to a new layer of quangos, full of party placemen.'
Mr Ashdown said that with their fascination for the Citizen's Charter, the Conservatives appeared to recognise a problem with the way the country was governed, but it was an alternative to democracy.
William Waldegrave, the minister responsible for the charter, had said the key point was not whether those who run our public services were elected, but whether they were 'producer-responsive or consumer-responsive. This is John Major's big idea - systematically to eliminate democratic rights and accountability and promote consumer accountability as a replacement.'
Mr Ashdown felt no compunction, however, about urging the appointment of non-elected ministers because, he said, 'the very people who are supposed to be holding the Government to account - the MPs - are either in government or have only one ambition in life, to get into government. The conflict of interests this creates is the source of the power of the Whips, which ought to be diminished.'
To guarantee accountability and limit the patronage of the prime minister, such appointments should be subject to a consent procedure in the Commons, Mr Ashdown said.
'Hypothecating' taxes - telling the public their destination - would make people feel they had more control over tax and spending decisions, Mr Ashdown said.
'Compare the unpopularity of Labour's high tax proposals at the last election and the popularity of the Liberal Democrats' hypothecated 1p for education. They make an interesting contrast.'
General acceptance of the notion of ministers without parliamentary seats raises interesting knock-on questions. It would, for instance, make it more difficult to argue against a 'list' system of selecting extra MPs in a proportional representation system aimed at reflecting parties' shares of the vote in Parliament.
There are only vague precedents for such a move, as when the unseated Patrick Gordon Walker was kept on by Harold Wilson as Foreign Secretary until he was able to fight a by- election. Before that, Sir Alec Douglas-Home became prime minister when he held no parliamentary seat.
The usual way of injecting 'talent' from outside the ranks of MPs is to create a life peerage, as Margaret Thatcher did to bring Lord Young into the government.
Leading article, page 19
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