Tony Blair says he wants to "recast" the Welfare State for the 21st century - retaining the values of the model created by Labour in 1945 but, as he puts it, reshaping it for the modern world. He talks of an end to the monolithic public sector in which people take what they are given, replacing it with an environment in which citizens are helped to help themselves.
 Howard: Labour's 'phoney choice' |
"People", he says "want a different relationship with the state today. It is about equity and excellence". "Equity and excellence" is one of a range of new buzz-phrases from Downing Street designed to highlight the differences between Labour's vision for public service provision and the plans of the Conservatives.
Mr Blair says he wants to create a reformed, well-funded welfare state which provides such high quality services that people do not need to go privately.
"I don't want the middle class to opt out as they become affluent. I want a coalition of the middle class and lower income groups."
He claims that the consequence of investment and reform means the change to the quality of public services can become "transformational".
Savings
By 2008, for example, he says the NHS will be unrecognisable from the service Labour inherited in 1997.
The "excellence" comes from high-quality public services, the "equity" from expanding those services and making them free at the point of use - "levelling up not levelling down" as the Prime Minister puts it.
 |  The Tories are subsidising people to go out of the public sector . We are offering maximum choice within the welfare state  |
The NHS is becoming the key battleground between the two major political parties - both claiming to be offering the public "the right to choose".
The Conservatives plan to abolish all the central targets which the government has introduced in the NHS - and, they say, the bureaucrats that go with them.
The savings will be pumped back into frontline care and patients will be able to choose whichever hospital they want to go to based on published performance criteria.
So, they argue, competition in local provision rather than centrally controlled targets will be the driver for higher quality services.
Labour too says it wants fewer targets but the prime minister insists they still have their place.
'Phoney choice'
"You cannot let the system do whatever it wants" he says.
However he believes the structures are now in place to allow "more local control without abolishing minimum standards or accountability".
The Tories draw a distinction between what they call the "phoney choice" offered to patients by Labour - five hospitals selected by health officials - and their promise that patients can opt to go to any hospital within the NHS.
In addition, people may be able to choose the private sector - subsidised by the state.
 The Tories want independent hospitals to be able to do NHS work |
If the cost of private treatment is the same or less than its cost to the NHS, the government will pick up the whole bill. If the cost is greater, then the government will pay 50% of the NHS cost. Labour argues that this is unfair to those who cannot afford private care.
Poor patients, they say, will effectively be subsidising the rich.
"The Tories are subsidising people to go out of the public sector," says Mr Blair. "We are offering maximum choice within the welfare state".
The government defines the distinction as "the right to choose rather than the right to charge".
The Conservatives concede that their scheme would mean patients who had always intended to go private, benefit from a state subsidy.
The total cost could be up to �1.2bn, they admit. But they argue that at the moment the system takes no account of the fact that those people who don't use the NHS are still contributing towards it through their taxes.
The battle lines over public services are being drawn.
One-Minute World News 
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