NB: I suspect that this is our area of greatest disagreement. If we were sticking to the narrow economic agenda, I broadly think we'd agree that continental Europe doesn't necessarily offer more answers than it does problems in terms of getting growth back into the economy. On the broader question of where the American state and policy should go, I suspect we disagree. I basically take a simple logical position. I believe in the NHS, I believe it is reformable, I think it is a good thing, I'm proud of it, I've relied on it. I've had cancer and it gave me care for free and frankly I was very glad I didn't have to think about who was paying for it. I think it can be made more efficient through some of the reforms we're proposing. I think therefore that it's absolutely a step forward that Obama has made healthcare reform his centrepiece. 

DH: Would you extend that reasoning to other policy areas? Should housing, for example, be broadly controlled by the state, allocated according to need and funded out of general taxation?

NB: No, I don't think that that is our system, and we as a coalition are dramatically reforming social housing. I just happen to think that on healthcare — and I have lived in Germany, France and the US as well as here — our system, given the particular nature of healthcare and where it ranks on all of our hierarchies of fear and need, is potentially the best combination of value and of cost-effectiveness. I think the American system is literally the worst. While it is very, very good for a very few people, for the rest their current system is literally the worst. 

DH: Whenever you discuss healthcare, you find that the political has become personal. So people will say, with great feeling, that the NHS must be wonderful because it looked after their Auntie Maud so beautifully. But, if you think about them, such arguments really have nothing to do with how we structure health funding. In a country as wealthy as ours, we should expect people to be treated successfully, and the NHS has plenty of incredibly kind and devoted employees. At the same time, if you look at measurable data, such as waiting times and survival rates from the moment of diagnosis, we lag well behind other developed countries. Nor is it true any more that the NHS is relatively cheap. Health spending here is now above the OECD average, but outcomes are well below. We could, in short, be doing a lot better. Still, of all the reforms that I've pushed, this is the one I least expect to be taken up, because public opinion in Britain is overwhelmingly in favour of the existing model. This is partly, I have to say, because a surprising number of even quite educated and informed British people have been convinced that free healthcare for the poor is a unique property of the NHS. As you know, Nick, having lived abroad, there isn't a country in the industrialised world where people are denied treatment for want of means. Still, we are a democracy, and most people plainly like the existing system. 

On the broader question of the direction of the US, I'd make the same argument in Britain as I do in America: don't become like Europe. Here's my starting point. In 1974, Western Europe — which I'll define for the sake of argument as the 15 member states of the EU as it stood prior to the admission of the former communist countries — accounted for 36 per cent of world GDP. Today, that figure is 26 per cent and in 2020 it'll be 15 per cent. Over the same period, the share of world GDP occupied by the US has held pretty steady at around 27 per cent. So something is plainly going wrong in the EU, and that something isn't hard to discern: over-regulation, excessive taxation, centralisation, uniformity. The free English-speaking nations should avoid going down that road.