The Conservatives will seek to reduce taxes, shrink the state and allow the nation to achieve the "British dream", Michael Howard has said.

Signalling that any future Tory administration will examine radical reform of the public sector, Howard said the belief that spending more would deliver better services had been "blown out of the water".

"The current government has spent a huge amount more of people’s taxes on the NHS: they have set hundreds of targets and bench marks. But we still lag behind many of our neighbours," he told the Policy Exchange in a heavily billed speech.

Setting out the origins of his personal philosophy, Howard went on to pledge a smaller state, where individuals are free to create wealth and pursue the "British dream".

Lives worse

"I genuinely believe that politicians – almost all of us - start out with the best of intentions. We all think we’re helping when we pass that new law, impose that new regulation, levy that new charge, fee or tax," he said.

"But these good intentions often make people’s lives worse because they take power away from families and individuals. So it’s the consequences, not the intentions, that really matter."

Looking back to his Welsh childhood, the former Cabinet minister praised the "big people" who seek to create wealth for their families and communities.

"I grew up in Llanelli, a small town in South Wales. Neither of my parents had been born in this country. They started with no advantages except the abilities they were born with and a readiness to work hard and make the most of those abilities," he said.

"They ran a small clothes shop. They started it from nothing. Too often, people talk about the economy in abstract terms. But in reality, it’s nothing more complicated than the collective efforts of individual people.

"Businesses are run by people like my parents. They start them, grow them and nurture them for many different reasons. To make a living, of course. But also for the satisfaction of creating something, of leaving a mark, of making a difference."

Anger

Looking back to the 1950s, Howard admitted he was an "angry young man" as he headed to Cambridge University.

"I saw Britain as a country too stratified, too hidebound, where people tended to be judged on their background, not on their worth," he said.

"I saw a country teeming with the most energetic, talented, compassionate and decent people; and it seemed to me that too few of them were able to make the best of their lives."

Whilst Howard said the UK had been "transformed" since his youth he claimed many of the constraints still remain.

"Too many are disenchanted with politics and government. Too many are cheated of the decent education that is essential for people to make the best of their lives. Too many are cheated of the first class healthcare that they deserve," he said.

"We have a state that does too much, that interferes too much, that is too unaccountable. A state that has grown so much that it diminishes the people it is meant to serve."

And whilst he said that the family "remains the most immediate and important group within which people share responsibility for one another’s well-being" he admitted that society was changing.

Same sex support

"Not all conform to the traditional pattern. I continue to believe that the conventional marriage and family is the best environment within which to bring up children," he said. 

"But many couples now choose not to marry. And more and more same sex couples want to take on the shared responsibilities of a committed relationship.

"It is in all our interests to encourage the voluntary acceptance of such shared responsibilities – but in some instances the state actively discourages it. That should change, and I will support the government’s Civil Partnerships Bill that makes some important reforms."

Fair play

Howard said his politics rested upon a "fundamental belief in fair play".

"No one should be over-powerful. Not trade unions. Not corporations. Not the government. Not the European Union. Wherever I see bullying by the over-mighty, I will oppose it, and stand up for people's rights and freedoms," he said.

"Britain’s history shows that when you give people the opportunity to succeed few of them choose to pursue a ruthlessly selfish path."

And he dismissed those who saw his attempt to reduce the burden of the state as an "academic exercise".

"Only when the state is small will people be big. It is a means to an end, and that end is opportunity, giving people power to control and run their lives as they see fit," added Howard.

"British dream"

And after a rocky period following the publication of the Hutton review, the new Tory leader vowed to fight for "the British dream".

"In Britain it actually does happen. There are countless examples of people from humble beginnings who make it to the top: who live the British dream," he said.

"So we should talk about it. We should embrace it. We should celebrate it. I want everyone to live the British dream

"My family and I owe a huge debt to this country. I owe this country everything I have and everything I am.

"I have now been given a great responsibility by my party. I shall do my utmost to discharge it to the very best of my ability."