Michael Howard has said the speed and degree of consensus behind his rise to Conservative Party leader has "astonished" him.
Howard: Hopes to cut taxes
Making his first public speech in the top job in Roehampton, south west London, Mr Howard said he felt "excited, if daunted" by his change in fortunes.
Outlining his plans for the future, the ex-home secretary said he hoped to be able to cut taxes if in power, but only if they could be afforded.
"Nor will we play ducks and drakes with Britain's precarious public finances," he said.
"Not for us the spend today, pay tomorrow approach into which Labour are now falling."
Speaking just hours after he was crowned unchallenged leader of the Conservatives, Mr Howard stressed that his party would be "responsible custodians of the public finances".
"The next Conservative Government will be a reforming administration," he said.
"Our priority will be to shape our public services to meet the legitimate expectations of the British people.
"Some will say: 'Why can you not do that and deliver tax cuts?'
"To them I say this: when the public services have been reformed, the money will certainly go further.
"And yes, we would like to cut taxes. I hope we can."
Mr Howard said his party would make the case for low taxes, but it would also "be responsible".
The task ahead for the Tories was "to be once again a credible and appealing alternative government".
He urged his colleagues "to look forward, not back" and to recognise that Britain had changed since the Tories first came to power in 1979.
"That means we have to be respectful of decisions people make about how to live their lives," he said.
The ex-home secretary won a one horse race
He argued that while public service workers strived for and often delivered "excellence", the system of "central control" in Whitehall needed changing.
"For too long politicians have preferred to offer false assurance and increased expenditure as a substitute for serious thought and action."
Mr Howard said he was sure Tony Blair and some of the people around him "now realise that things cannot go on as before".
"But he knows that the Labour Party will never accept the reforms needed to build first class public services."
In a joke about references to there being "something of the night" about him, Mr Howard quipped: "For too many of his MPs, words like 'choice' and 'competition' are as welcome as a clove of garlic to Dracula."
Mr Howard insisted the Tories were "different" and were "passionately" committed to the "transformation" of schools, hospitals, transport and policing".
The modern Conservative approach had to be to "trust people", but also to "promise less, deliver more". The party had to stand up for people's rights and freedoms.
"We aren't going to duck any of the problems that face Britain. No retreat into blandness - no turning the other way," he pledged.
Immigration had to be "strictly controlled", said Mr Howard. No-one could describe the "current muddle" as humane.
On a more personal note, Mr Howard said he had learned "quite a bit" from his time in politics. "I'm probably a bit more mellow than I was - although I'm not altogether sure that my wife would agree."
Shortly after his speech, Mr Howard named Margaret Thatcher's former political secretary Stephen Sherbourne CBE as his chief of staff, describing him as "a man of huge integrity" with "unparalleled experience and great ability".
Rachel Whetstone, Mr Howard's special advisor when he was home secretary, will become his political secretary.
Earlier, Mr Howard, who succeeds Iain Duncan Smith - ousted last week in a confidence vote - appealed to Tories to unite behind him.
The appointment was confirmed by Sir Michael Spicer, chairman of the backbench 1922 committee after no rivals came forward.
And it subsequently emerged the Board of the Conservative Party was not planning to have a vote of the entire membership to ratify Mr Howard's appointment.
Instead there will be an "informal consultation" of members over the weekend.
Mr Howard immediately thanked his Conservative colleagues for giving him the "immense privilege" of leading the party.
Mr Howard addressed Tory MPs in the Commons after his appointment was confirmed.
He urged them to unite after the splits which plagued Mr Duncan Smith's leadership, saying: "We must rediscover the habit of thinking the best of each other."