Iain Duncan Smith has given a private indication that he supports the idea of a radically slimmed down National Health Service and compulsory health insurance.

According to today's Times, the Conservative leader has given his approval to a scheme that would see every family paying up to five per cent of their income for annual healthcare costs and insuring themselves against costs above that amount.

Under the proposals, set out in a pamphlet by the centre-right think tank Reform, individuals would, as they do with cars, pay for their own minor repairs.

The authors of the pamphlet were invited by Duncan Smith to address the shadow cabinet last week.