William Hague lost his nerve in the run-up to the general election by failing to campaign on the public services, one of his senior shadow cabinet members asserted yesterday.
Liam Fox, the shadow health secretary, said the party has been left powerless because it failed to listen to the concerns of ordinary voters, and became trapped on Labour territory by promising to match health spending.
Dr Fox said the party had prepared the policies on health to make massive political inroads, but added: "The electorate were denied the mature debate they deserved by a combination of Labour smear tactics and and Conservative failure of nerve".
Dr Fox said the party needed to look to continental socialist governments for solutions to health. He backed Iain Duncan Smith for the party leadership arguing that he had the maturity and calm to take the case to Labour.
In a speech that had Mr Duncan Smith's approval, Dr Fox said the only way to secure a first class NHS would be by finding a means of persuading more people to spend more of their income on private health.
His aides admitted that this had largely been the agenda on which Mr Fox had wanted to fight the election, but he had been prevented by Mr Hague's obsession on Europe and populist issues.
Dr Fox said the government would need to levy an extra 7p on income tax, or £77 a month, for the average taxpayer to raise British health spending to Euro-zone levels.
State spending levels on health were similar between Britain and the continent, but due to the higher private spending, total health spend in Holland was 8.7%, Italy 8.2%, Austria 8% and Britain 6%.
"The funding gap comes from Britain's inability to top up the state spending with private income," Dr Fox said.
"The challenge for the next Conservative leader will be to have the courage to say what an increasing number of voters know to be true. Honesty of analysis now will be rewarded when Labour fail, as they inevitably will. Over the past few years we have rebuilt our relations with health professionals which had been so badly damaged in office. Going to war with doctors and nurses is not what we require to improve our standards of health care".
He also called for less Whitehall interference in the NHS and an end to central diktat on clinical priorities. Dr Fox said huge political tension was developing between Alan Milburn, the health secretary, and Downing Street over the legitimate role of the private sector.
His aides claimed the only sign of honest thinking within New Labour circles came in a Guardian article by Chris Powell, chairman of the Institute for Public Policy Research and brother of Jonathan Powell, Downing Street chief of staff, calling for greater injection of cash in health through the private sector.
