People queued in the street to buy copies of Sir William Beveridge's weighty tome on establishing the welfare state when it was published in 1942; the BBC broadcast its recommendations to Europe in 22 languages. The fanfare greeting the Liberal Democrats' nine-page policy document, Moving Ahead, was a little more muted despite what party health spokesman Simon Hughes describes as its grand ambition of 're-inventing Beveridge'. But half a century after the foundations of Britain's health and social care system were laid, no self-respecting policy document dares present itself without claiming to provide a blueprint for recasting the entire welfare superstructure for the new millennium.

Such a posture might seem a little presumptuous, coming from what is still the third party in British politics. But anyone tempted to dismiss these proposals should remember another novel idea contained in only one party's 1987 election manifesto - that of the Lib Dems' previous incarnation, the Liberal/SDP Alliance: it was the NHS internal market. Enough said, perhaps.

The Big Idea of Moving Ahead is the merger of health and social services, a plan which Bevan toyed with 50 years ago and which has been periodically revived ever since. New Labour remains wary of it and unwilling to go beyond pooled budgets.

For the Lib Dems the beauty of the idea lies in giving local authorities a say in delivering health policy and the right to raise revenue to tailor health services to local circumstances. In effect, local politicians would become responsible for rationing.

In contrast to the current dishonourable buck-passing and fudging, the Lib Dems' proposals exemplify admirable and attractive clarity. Their inspiration is the Dutch government's Dunning committee, which defined core services to be provided by the state. This approach balanced collective solidarity with individual rights, as the Lib Dems would attempt to balance national and local rights and responsibilities.

This would offer a way out of today's rationing impasse, but would substitute one set of problems for another. At a time when much effort is being devoted to chasing uniform standards throughout the NHS, the Lib Dems would abandon any pretence at providing a truly national service. Rationing by postcode would be formalised. And local politicians - no more popular than national politicians - would decide who had access to which health services.

The Dunning committee's proposals led to widespread demonstrations by both staff and public. Mr Hughes, beware.