NATIONAL HEALTH SERVICE CONTRIBUTIONS BILL

HC Deb 05 March 1958 vol 583 cc1183-295

Order for Second Reading read.

4.6 p.m.

The Minister of Health (Mr. Derek Walker-Smith)

I beg to move, That the Bill be now read a Second time.

This is not a complex Bill and, therefore, my exposition will be not so much of its contents, which were described by my hon. and learned Friend the Financial Secretary to the Treasury last week, as of its principles and of the considerations which affect and give rise to the Bill. These considerations include many of the basic social and economic factors in the National Health Service.

I said last week that on Second Reading I would seek to deal with some of the general issues of the economics of the National Health Service, in which a good deal of interest is taken in the country as a whole. I appreciate that this involves rather wide and diverse matters—for example, the amount, composition and trend of the total cost of the Service, the value received and the ratio of value to cost, the question whether by economies, it is—or, at least, should be—possible to maintain the value of the Service for less total cost and, of course, the pattern of cost and its appropriate division among the various contributory elements.

If I may start with the total cost of the Service, this has gone from £452 million in the first complete year—1949–50—to £740 million, an increase of £288 million. Perhaps the first question we should ask is: how much of this increase is an increase in real value? We get that answer by converting the £740 million of present costs into the purchasing value of 1949–50 as measured by the estimated change in the Consumer Price Index. Adjusting £740 million to 1949–50 prices, we arrive at a figure of £530 million. In other words, there has been an increase in real terms in the total cost of the National Health Service during those years of £80 million. The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) referred to this point last week but was using last year's figures to show what is really the same point.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

It is valuable to have these figures. I hope that the Minister agrees that they should be given just as much publicity as the other figures given in our last debate. Can he also give the further rectification of the figures that would come from an understanding of the increased volume of call upon the Health Service of old people and of accidents?

Mr. Walker-Smith

Yes, Sir. I shall certainly try to deal with that. The population of Great Britain has risen between April, 1951, and June, 1957—the latest figure I have—from 48.9 million to 50 million. There would be some increase in cost on account of the rise in total population, although not a proportionate rise because, for example, the hospital services would have been fully extended in any event.

Regarding old people, the Guillebaud Committee calculated that changes in the age structure would by themselves increase costs by 3½ per cent. in the 20-year period between 1951–52 and 1971–72. In the nature of things that is not a precise calculation, but I think it puts the matter in a fair perspective. We are not yet half way through the 20-year period, so the percentage increase due to the impact of old age would only be a little over 1 per cent.

Perhaps it would be convenient, while dealing with these points, also to refer to the question, which figured in our debate last week, of the percentage of the gross national product devoted to the Health Service. I have had a look at that. The percentage started dropping towards the end of the period of the Labour Government and continued to drop until 1954, since when it has risen slightly.

I do not think that the House ought to attach so much importance to the question of that percentage as some hon. Members appeared to do in our debate last week. It would certainly be quite wrong to regard it in any way as a ready reckoner of the well-being and progress of the Health Service. We should aim to expand the gross national product as much as possible and to spend on the Service the highest common factor of what we need and what we can afford.

The ideal position would obviously be to get a sustained and rapid increase in the gross national product, coupled with a sustained and steady fall in calls on the Health Service due to the reduction of illness and disease. That would be the ideal position, but it follows that the attainment of that position would result in a declining percentage of the gross national product devoted to the Service.

If that percentage were taken as a ready reckoner, the result would be taken as showing an unsatisfactory position for expenditure on the Health Service. [Interruption.] I am glad that I carry the hon. Member for Edge Hill (Mr. A. J. Irvine) with me. I think that that clearly demonstrates the invalidity of arguments based on the percentage as an automatic index.

Mr. A. J. Irvine (Liverpool, Edge Hill)

Any gesture of mine was a mark of admiration rather than of consent.

Mr. Walker-Smith

I am obliged to the hon. Member. No doubt in time the one will follow the other.

Conversely, if the gross national product fell, the percentage of money, even though the amount was static, which was expended on the Health Service would automatically rise. That would mean not that the Health Service was doing better, but merely that the country was doing worse.

Mr. Blenkinsop

Is not that what we are doing now?

Mr. Walker-Smith

No. I have already pointed out that since 1954 the percentage has, in fact, risen, and as the hon. Member will know, the gross national product is increasing year by year. The inescapable fact is that, in the context of the total cost of the Health Service, there has been an increase of £288 million, of which £80 million is an increase in terms of real value, so we are left with the position that, with some marginal adjustment for the increase in population, the old people and other factors, about £200 million is the measure of the inflationary increase.

It is quite true that the bulk of this inflationary increase is not due to the Health Service itself. It is not the prodigal habits of the Service which are forcing the inflationary pace. The increase is primarily the reflection within the Service of the inflationary tendencies which we all know to have been at work in the economy as a whole. In saying that, I do not mean that we can disregard the effect of inflation on the Health Service. Of course not. We cannot look at the Service in the isolated context of an assumed, but unreal, stability. We cannot stop the individual steps of an inflationary escalator. We have to stop it altogether, or not at all.

Although it is interesting and important to analyse the cost factor in the Health Service, the cold, hard fact remains that the cost, whatever its cause and composition, has to be met. That is the sharp and solid rock on which founder all the attractive arguments we hear, that the social value of the Service means that one cannot properly assess its cost merely in normal economic terms. We cannot escape our financial liability by pleading the extenuating circumstances of a social evaluation.

Of course, the services rendered for this money are immensely worth while and it is annoying that a great deal of the increased cost arises from general factors outwith the Service, but that is the common experience of businessmen. Market factors, changes in taste and fashion, economic and political policies in foreign countries may all operate to the disadvantage of the trader, even if he is improving the quality and production of his goods.

I will not say that a businessman does not complain about that. I had two years at the Board of Trade and the Treasury. I know it would not be quite true to say that they do not complain, but they know that those circumstances cannot affect their economic liabilities. So it is with the Health Service; at the end of the road we must pay for what we have and our cheque must be drawn in currency harder than mere good will or enthusiasm.

I said last week that the contributor to the Health Service gets good value for his money. I think that he does, by any test that can apply. We can measure it in real money terms or in terms of services rendered, but by either test he gets very good value. In real money terms, he gets a service increased in value by £80 million in total and by £35 million of Exchequer money. Time, of course, forbids an exhaustive or even a representative catalogue of the services rendered to substantiate my claim that the contributor gets good value. However, only a very few figures are needed to show in the main fields the nature of the progress achieved in return for the extra cost and by reason of increased efficiency in the Service.

Take hospitals as an example. There has been a steady and gratifying increase in the number of new hospitals and extensions to existing hospitals. It is a good thing that, in spite of our economic difficulties, the graph of the money we are able to make available for capital works on hospitals is still steadily increasing. Progress can be measured also by the increase in the average of bed occupancy and in the number of outpatient attendances. Bed occupancy has increased from 453,000 in 1950 to 478,000 in 1956. Out-patient attendances have increased from 31 million in 1950 to just over 35 million in 1956.

Or we can take our test in the sphere of general practice by reference to the number of doctors. In 1951, for example, there were just under 20,500 general practitioners in practice. In 1956, there were just under 22,500. If we examine the figures about which an hon. Member was asking at Question Time the other day, the number of patients per doctor has fallen from about 2,500 in 1951 to 2,272 in 1956.

The same applies if we examine dentistry. The number of treatments increased from just under 9½ million in 1953 to 12 million in 1956. For sight tests, the 1951 figure of 4½ million was up to nearly 5½ million in 1956. One final example, in the sphere of home services which are so vitally important. Visits by home nurses have increased from 22,600,000 in 1951 to no fewer than 27,600,000 in 1956. On that evidence, taking the normal criteria of any business undertaking, we can say that the case for increased efficiency and production and increased value to the consumer in the Health Service is clearly proved.

I do not for a moment suggest that these facts of themselves dispose of the question whether unhurtful economies can be found in the Service. The increased productivity and value of the Service in general is not of itself necessarily inconsistent with the possibility of economies being found without detriment to the patient. It is clearly right that the search for such economies—as I said last week—should be unceasing and untiring. The question really is: can the £200 million of inflationary increase, or, indeed, any substantial part of it, be saved by individual economies in the Service, apart from the general arrest of the inflation in the economy as a whole?

To answer this question we must look first at the pattern of expenditure. Taking the main elements in the cost of the Service we find these figures and proportions, based on the 1958–59 Estimates. Hospital running costs amount to £399 million, which is just under 54 per cent. of the total cost; hospital capital expenditure is £23 million, which is just over 3 per cent. of the total cost; general medical services, £72 million, just under 10 per cent. of the whole pharmaceutical services, £74 million, 10 per cent. of the whole; dental services, £51 million, just under 7 per cent. of the whole; local authority services, £65 million, just under 9 per cent. of the whole.

Right hon. and hon. Members will see straight away that more than half the total cost is the hospital running costs. Those are mainly composed of wages and the cost of commercial commodities, which means that the inflationary element in the rise in costs is mainly a reflection of the general inflationary tendency. Of course, there must always be considered the possibility of economies in administration and of improved organisation and methods, and that we are doing.

One method of making the maximum number of economies without detriment to the patient is by ensuring the greatest possible efficiency in administration, and to that end we have instituted the technique of organisation and methods in hospitals in the hospital service. It was started in September, 1954, with an experimental hospital organisation and methods unit recruited from the Treasury and the Ministry. By September last this unit had completed 78 assignments covering a large number of aspects of hospital work at individual hospitals. It had also undertaken, and has nearly completed, eight comparative studies involving the examination of important common procedures or services at a large number of hospitals.

Mr. J. T. Price (Westhoughton)

While the right hon. and learned Gentleman is breaking down these figures, will he say whether the investigation has covered the widespread use of private motor cars by hospital personnel on mileage allowances? If not, will he deal with that?

Mr. Walker-Smith

That is a subject which is kept under careful scrutiny, but it has not as yet, so far as I know, been the subject of any organisation and methods studies, with which I am more particularly dealing at present.

The subjects included under these comparative studies were methods of analysing expenditure, arrangements for compiling and maintaining inventories, methods of stores accounting and arrangements for out-patient departments and other such matters of common and substantial interest. The experience of these three years has shown that the application of the various techniques used by organisation and methods investigation in business, industry and public administration can produce valuable results in the hospital field. The value of this work has been recently recognised by the Estimates Committee and I am now considering the best way to establish organisation and methods procedure as a permanent and integral part of the hospital service. I am keenly conscious of the importance of this approach, and I hope to press forward in this field.

One other possibility of economy with which I think the House would like me to deal, because it figured largely in the discussion last week and is present in the public mind, is the drug bill. I realise that the discussion we have had about this reflects some measure of doubt, perhaps even of disquiet, in the country. It is, therefore, right that I should attempt a short assessment of the present position. First, its size. For 1958–59 the estimated cost of the drug bill is £74 million; in other words, 10 per cent. of the total cost of the Service. That is more than twice the cost in the initial year of the Service and the drug bill has steadily increased from the beginning. Obviously, therefore, it is right that it should be kept under very close scrutiny.

Dr. Donald Johnson (Carlisle)

In this the drug bill in general practice or does it include hospital items, or are the hospital items separated and included in the hospital services?

Mr. Walker-Smith

This is the total pharmaceutical drug bill split as to 60 per cent. to manufacturers and wholesalers, and as to 40 per cent. to chemists for their services.

Mr. James Griffiths (Llanelly)

What about drugs in general practice and hospitals?

Mr. Walker-Smith

I will give the right hon. Gentleman that figure in just a moment, if I may, but, first, I should like to indicate the pattern of the rise.

There are, I think, two causes for the rise in the amount of the drug bill. The first is the general rise in costs, and the second is the introduction of new drugs, such as the antibiotics and cortisone. The prices of these new drugs reflect not only a higher level of general cost but, of course, the research and development costs which must go into them before they can be manufactured on a commercial scale—

Dr. Edith Summerskill (Warrington)

I am sorry to interrupt the right hon. and learned Gentleman, and I hope not to do so again, but could he tell us the average cost of the prescription today?

Mr. Walker-Smith

Just off the cuff, no, but I will be glad to tell the right hon. Lady at a more convenient time; or at Question Time, if she would be good enough to put a Question down.

I should like to add that the new drugs have made a great contribution not only in the social sense, but also to the national economy in mitigating the effects of those once dreaded diseases like tuberculosis, pneumonia, and acute rheumatism. Keeping the drug bill under scrutiny, we have taken various measures to try to confine it to its lowest reasonable cost, and those measures fall into two categories. First, there are those taken to influence the prescribing habits of doctors; and, secondly, those taken to restrain the prices of manufacturers.

As to prescriptions, we start from the point that doctors have a statutory right to prescribe the drugs that they think are necessary for their patients, but we give them guidance in discharging their duty economically by the issue of such things as the National Formulary, price lists showing comparative costs of standard and proprietary drugs, the Prescribers' Notes, which are regularly issued, lists of proprietary preparations that are classified as being not of proved therapeutic value, and lists of those preparations that are advertised to the public and have been recommended as not normally to be prescribed.

Passing from this category to that in which we seek to restrain manufacturers' prices, the facts, shortly, are these. A special inquiry in 1955 into the price of standard drugs revealed no evidence of excessive prices. The majority of proprietary drugs are covered by the 1957 agreement for a trial period of three years from June last. The scheme is still on trial, and its operation will be carefully studied over the trial period to see whether we are on the right lines, or whether anything further is required.

I should like to assure the House that the Government are not in the least complacent about the cost of drugs. For that reason, the Hinchliffe Committee was set up last summer to investigate the factors contributing to the cost of prescriptions in the Health Service, and to make recommendations. That Committee is progressing in its work, and I have asked its chairman to make interim recommendations, if he can usefully do so. A similar Committee, the Douglas Committee, is sitting in Scotland.

I was asked about the cost of hospital drugs by my hon. Friend the Member for Carlisle (Dr. D. Johnson), and by the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths). A further £12 million or £13 million is involved in the hospital drug bill, beyond the pharmaceutical total of £74 million of which I was speaking. Answering the right hon. Lady, the average cost of a prescription today is 6s.

I hope that I have said enough to justify my claim that the search for economies that can be achieved without detriment to the patient and the Service is unceasing and untiring, but I must say that the analysis shows that the scope for economy without such detriment is not nearly so large as some people appear to think. For example, there is a widespread, if, perhaps, rather nebulous, feeling that in so large a Service big, unhurtful economies must be possible somewhere. Indeed, people often come to the conclusion that much could be done, for example, by the correction of abuse of the Health Service by foreigners, but this, I think, results more from an emotional than from a cerebral approach. I am very grateful to hon. Members who put down Questions about this matter, and so enable it to be seen by the country as a whole in its proper perspective.

Coming to the pattern of payment, we have this position. In spite of all practical economies, short of cutting the Service or injuring the patient, the total cost of the Health Service has increased, and we cannot, in fact, guarantee a stabilisation at the present figure. This increase contains both an inflationary and a real element, the latter being reflected in improved services and efficiency. However, the present pattern of payment has necessarily brought in its wake a mounting liability upon the Exchequer—

Mr. Douglas Houghton (Sowerby)

In these calculations, has the right hon. and learned Gentleman taken into account more pay for the doctors?

Mr. Walker-Smith

Clearly, not in the estimate that has been made, because, at the moment, there is no question of increased remuneration for the doctors, as the matter is sub judice before the Royal Commission now sitting under the chairmanship of Sir Harry Pilkington. The hon. Gentleman may make what prognostications he likes in that direction, but it is certainly not for me to indulge in the delights of prophecy on such a question.

I believe that the most important deductions from the facts that I have sought to analyse are these. First, as the main element in this steady, and hitherto apparently uncontrollable, rise in the cost of the Health Service is a reflection of the general inflationary tendency in the economy, the Health Service clearly has a prime interest in countering and reversing inflation, because only so can it hope to achieve its own economic stability and salvation. I would suggest that the second deduction is that the principle of unlimited Exchequer liability—that is to say, the principle that every increase in total cost should automatically be put on the taxpayer—is clearly inconsistent with a disinflationary policy.

It is in the context of these principles that this modest adjustment in the pattern of payment contained in this Bill must be judged, and it is from them that it derives its logic and its justification. We can, after all, argue individual cases indefinitely, in rather the same manner as that of the medieval schoolmen, interminably discussing how many angels could stand on the point of a pin, but no argument can be either coherent or convincing which does not take into account these broad general principles, governing, as they do, the basic position and future of our economy on which the fortunes of everybody, whatever their earnings, ineluctably depend. Instead of meeting us on this broad ground of principle, the Opposition have chosen—at least, they did last week—to seek to engage us in a narrow field of controversy on the allegedly regressive effect of this modest but necessary and useful Measure. On that, I would just make the following points.

It is true, of course, that Income Tax is more progressive than contributions in its incidence, though there is less difference than there used to be because of the change made by the 1957 Act in removing contributions from the ambit of Income Tax relief. But, of course, not all tax is Income Tax. After all, the national revenue is drawn from two main sources. Inland Revenue and Customs and Excise. It is not a question of a main stream and a tributary, but of two equal streams joining forces and feeding the Exchequer. Each of these streams contributes over £2,000 million a year to the Exchequer. There is certainly nothing particularly progressive, or, at any rate, nothing scientifically progressive, about the incidence of Customs and Excise, and if one looks at one or two of the main items I think that the point becomes clear.

Taking the Budget Estimates for 1957–58, Purchase Tax represented £462 million—there is some element of progressiveness in Purchase Tax, but it is by no means universal or scientific. Tobacco represented £698 million—no progressive element in that at all. Beer represented £260 million. Nobody would suggest that there was a progressive element in that. So it is really an over-simplification of the argument to say that when these things are put on to the taxpayer it is progressive and when put on to the contributor it is regressive.

The next point I want to make is this. A typical low-paid family worker, for example, a farmworker, was paying a larger percentage of his income in contributions to the Health Service than the average worker in the days of the Labour Government, both at the start of the scheme in 1948 and following the Budget of 1951, just as he is under our own scheme which we are now proposing.

Mr. Houghton

I suggest to the right hon. and learned Gentleman that his argument against relating the cost of the Health Service to the national income probably applies equally to the parallel he is now drawing of the cost of the Service to the worker and his total income. There is room for expansion in both standards of life, if I may say so.

Mr. Walker-Smith

We shall certainly not differ in the desire for expansion in the standard of life.

The point I am now making is that the principle of adverse differentiation to the lower-paid worker applied in those days as in these. I am reminded by the intervention of the hon. Gentleman, who is such an expert on tax matters, that many of those for whom the Opposition claim to speak and feel would hardly have thanked them for their zeal in trying to put the total burden on to taxation in the days when they were in power, because, at that time, these same people were taxpayers and have only ceased to be direct taxpayers because of exemptions made in Conservative Budgets.

The next point I want to make is that which I made last week, and, therefore, I will do no more than indicate it today. It is that, when related to total income, these increases of 6d. and 4d. are tiny percentages, as, indeed, is the whole incidence of the Health Service contribution. I would say that even with the increase provided for in this Bill, the contributor is still getting a wonderful bargain here compared, for example, with other countries, some of them richer than ourselves.

In no country is the scale of service equal to that of the Health Service. In most countries, it is done mainly on the basis of health insurance rather than on the basis of a national scheme, and in few countries does even health insurance cover all. Often, even in enlightened and progressive countries like the Netherlands, France and Western Germany, the Government contribute nothing to the insurance scheme.

I believe that the Opposition are wrong to oppose this modest and necessary adjustment. I believe that it is inconsistent of them to do so, as the patentees of the National Health Service ceiling which, indeed, cannot be explained, as the hon. Lady the Member for Lanarkshire, North (Miss Herbison) sought to explain it last week, by reference to the Korean War. The original patentee was Sir Stafford Cripps in April, 1950. The Korean War did not start till June, 1950, and, clearly, the ceiling preceded the Korean War. I fear that the Opposition must confess either to having a bad record in office or a bad case now. Alternatively, of course, it may be that they have both, which, no doubt, is the most probable answer.

Mr. R. J. Mellish (Bermondsey)

At least, the right hon. and learned Gentleman has a sense of humour.

Mr. Walker-Smith

In seeking to assess the public reaction to this Measure, I looked carefully at the newspapers following the statement of my right hon. Friend the Chancellor of the Exchequer about these increases. I propose to make a very brief reference to them, quoting only from those which do not normally support the Government. I have not got among these cuttings one from the Daily Herald, because I assumed at the time that it would automatically follow the official Labour Party Line. I know better now, and I am still hopeful that it may yet repeat its deviationism, this time in a better cause and for better reasons. Taking, first, the Manchester Guardian of 19th February, it said: Perhaps there is something to be said for shifting more of the cost of social services away from general taxation and on to the insurance stamp. It may do a little to persuade the users of the services that they have to be paid for by the public and are not financed out of some mysterious national pool.

Mr. Blenkinsop

If the right hon. and learned Gentleman is quoting the Manchester Guardian, he must go on and quote its further comment to the effect that it would prove a hardship to the lower-paid worker.

Mr. Walker-Smith

The Manchester Guardian was certainly not all praise; I concede that, but I should not expect that newspaper to be wholly on one side or the other.

The Star of 19th February said: But action to make the many pay for the few and to keep the balance sheet as solvent as possible by increased contributions—this keeps the principle.

And, finally—

Mr. Mellish

That is all very well. Is not one of the main arguments that the right hon. and learned Gentleman is increasing the contribution, on the one hand, and cutting back the money required even to cover the existing service on the forecast of figures for the coming year, so that it has been, on the one hand, an increase and, on the other, a reduction? What happens to the profit that is made? Where does that go?

Mr. Walker-Smith

The hon. Gentleman was not here during the earlier part of my speech, when I sought to make a rather full analysis of all these economic matters. I might be in trouble with Mr. Deputy-Speaker if I went over the ground again.

Let me give my final quotation from the News Chronicle, which said: The Government has taken the correct but unpopular course over an increase in National Health contributions. … Even with the proposed new contributions in force the contributor will still have to find only the same proportion as the Labour Government proposed when bringing in the scheme. This makes the Opposition protests sound rather hollow. Of course, the leader writer of the News Chronicle was gifted with prophetic insight, because he was writing before our debate of last week and, no doubt, felt justified when he heard or read the speeches of the Opposition on that occasion.

I believe this Measure to be a right one in the context of present circumstances, but not as an end in itself. For ten years, the efforts to control expenditure on the Health Service have had a rather makeshift and piecemeal appearance. We have been working our way rather as in a tunnel, with our eyes fixed not much further forward than our feet. It has been a case of I do not ask to see The distant scene; one step enough for me. In taking this step, we should ask to see a little more of the distant—and, I hope, not too distant—scene. We can see some light at the end of the tunnel and a sounder financial future for the National Health Service than many people are now inclined to prophesy, provided always that two objectives can be attained.

In mentioning the first of those objectives, I should explain what to many is a paradox in the economics of the Health Service. I have sought this afternoon to show that by ordinary business standards and leaving out of account for a moment its reflection of the general inflationary position, the Health Service has improved in efficiency, productivity and output.

The question then immediately suggests itself: why does this not result in lower cost? Why is it not reflected in a diminution of disease and, consequentially, a diminution of treatment and cost? The answer to that is twofold. First, many of the new drugs and treatments are necessarily expensive and the immediate impact is, therefore, to increase costs. Secondly, because of the war and the consequent arrears, the first impact of increased productivity up to now has necessarily been the overtaking of the arrears of treatment, the reduction of waiting lists, the acceleration of treatment, and so on, rather than a reduction in the totality of the cost of the Service.

Something of what can be done in this context has, however, been shown by the dramatic reduction in the calls on the hospital service—for example, in the case of tuberculosis. I hope that we may in future see this pattern reflected in other cases. In this way, we can hope to reduce the calls particularly on hospitals, which account for so large a proportion of the total cost.

There is also this to be remembered. If we can succeed in due time in keeping in the community, with proper home and clinical care, more of the old people and of the mentally ill, surely we have a great opportunity both of increasing their prospects of human happiness and of reducing the burden on our hospitals and showing a real saving in money and resources. Surely, along these lines lies one objective that is necessary for the progress and satisfactory economic outcome of the Health Service.

The second objective is the one to which much of my earlier argument today has related. The National Health Service can have a sound financial basis only if we get rid of its inflationary elements. As these reflect the general position, we can succeed only by ridding the whole economy of its inflationary virus.

It is not only the financial basis of the Health Service which depends upon this for success. Its whole future depends upon a sound economy, because inflation and the social services cannot co-exist in the long run. The social services are strong in themselves, but they cannot be stronger than sterling. Although the National Health Service is the object of much international admiration and even of envy, the world does not owe us its continuance. We can guarantee its continuance only if we earn it for ourselves on the basis of a sound economy.

For that reason, if it is necessary to take any step in this sphere with a dis-inflationary object, we take it, if not with glad hearts, at least with firm purpose and calm resolve, because we know that in doing so we are serving the interests not only of the national economy as a whole, but of the National Health Service itself. It is in that conviction, and for that reason, that I commend this Measure to the House today.

4.56 p.m.

Dr. Edith Summerskill (Warrington)

We have listened to a speech from a Minister of Health who is fairly new to the House. In the first place, however, I should like to say how pleased I am to see his predecessor, the right hon. Member for Runcorn (Mr. Vosper), back with us again. Another of his predecessors, the right hon. Member for Thirsk and Malton (Mr. Turton), is also present.

The Bill is of a very limited character. The contributions are designed to yield an additional £32 million. The Minister might well have come to the House with the intention of devoting himself simply to the financial aspect, which I was afraid he would do, but he has wisely discussed certain aspects of the Service which are related to finance.

Nevertheless—and I never try to make party capital out of a health debate—I must say that the right hon. and learned Gentleman's survey was superficial. I cannot blame him, because successive Ministers of Health—we have three present this afternoon—have been quite incapable during their short period of office of grasping the ramifications and the problems of the National Health Service which, we are told, is this year to cost the nation £740 million. Indeed, what the Minister's speech this afternoon has done is to focus attention on the real need to examine the financial and administrative problems of the Service.

I believe I shall carry with me this afternoon some hon. Members opposite who have attended successive health debates. Let me remind them of what has happened during the last two years. In December, 1956, a prescription charge of Is. was made on every item prescribed in order to provide £5 million. In May, 1957, another Minister of Health, whose ill health we all regretted at the time, introduced a Bill containing provisions which came into operation last October, to provide a further £40 million. This involved an increase of 8d. in contributions for the employed man. I was very glad that the Minister at the time said that he realised that for some people an extra 8d. a week was not easy to find. That was rather different from the present Minister's approach this afternoon.

Today we have yet another Minister of Health who, in order to provide £32 million, is prepared to find the money by raising yet again the contributions from the poorest in the country. I propose to show how, apart from the burden that the Government are placing on the shoulders of the lowest wage earners, this ad hoc policy of casting about every few months to provide a comparatively small sum in relation to the total shows—I say this with careful consideration—an administrative ineptitude which should be clear to hon. Members opposite who have sat here on all these occasions when successive Ministers of Health have come to the House and asked for further grants of comparatively small sums in relation to the total.

Last week, we heard Beveridge called in aid, and, of course, the past was discussed as a justification for today's approach. Today has been no exception. The Minister sought to defend the new increases by reference to past decisions which have little relevance to the present situation. In the last ten minutes of his speech he recalled what the Labour Party had done. I assure him that I do not propose to oppose the provision of a further sum. He tried to defend the provision of £32 million. I shall not oppose it. I recognise that it is almost certainly necessary, but I strongly oppose the method it is intended to adopt in order to obtain the extra £32 million.

In the course of the debate last week, when the proposal was considered in Committee, the Beveridge Report was frequently quoted. As one who gave evidence before the Beveridge Committee, on another aspect of the inquiry, I was impressed that the Committee was very anxious to do its best, in the light of circumstances then prevailing. Does the Minister really believe that Lord Beveridge today would consent to a woman who is earning £5, £6 or a week being asked to pay 8s. a week as her share of the National Insurance scheme, as she will be called upon to do if the Bill becomes law? As I was sitting here, one of my hon. Friends came to me and asked me whether I was aware that many apprentices earning £5 a week would be called upon to pay 9s 11d. Of course, that all depends upon their ages but—

Sir Keith Joseph (Leeds, North-East)

The right hon. Lady is being scrupulously fair. She should not import National Insurance elements into her comments at this stage.

Dr. Summerskill

No, I cannot agree with the hon. Member for Leeds, North-East (Sir K. Joseph). He must realise that when men have to pay contributions of 9s. 11d. and women have to pay 8s. per week, they do not analyse them and consider how much of it is for health. What the Government are now doing is to increase what the ordinary people believe is their contribution to a scheme which will cover all the insurance services, including health, Although, from the actuarial point of view, it might be comforting to imagine that an employee would think as the hon. Gentleman suggests, that does not happen in practice.

Mr. Walker-Smith

At least I hope that the right hon. Lady will lend her assistance in bringing home to the public the true facts of what the proportion is for the National Health Service contribution.

Dr. Summerskill

If the right hon. and learned Gentleman will read all the speeches I have made on the Service since its inception, he will find that I am always scrupulously fair. I am not attacking him. I have some sympathy with him. I am attacking the Conservative administration, as I shall show. I cannot expect him to understand this highly complicated Department which he has been called upon to operate within a few weeks.

The Minister recalled the past, as I say, and I wish to draw his attention to paragraph 287 of the Beveridge Report in which it was said that it could be argued that … persons with low wages … should be relieved at the cost of the taxpayer or the employer". If that was the opinion in those days, I should have thought that the opinion has been strengthened by the present Government's proposal to increase the contribution of an adult male from 5s. 1d. to 9s. 11d. a week, an increase of 95 per cent. As I say, I am not surprised that the cost of the National Health Service is increasing. The main structure of the Service has to be maintained unimpaired, while expenses of maintenance, salaries, wages, food and equipment have risen, as the right hon. and learned Gentleman himself said. Indeed, it would even cost more if the facilities of the Service were just to stand still. Yet, if we are to judge from the Questions which are put down to the right hon. and learned Gentleman every Monday, there is great need for expansion. We need more hospitals and more institutions. We need all kinds of facilities which modern medicine demands. I should think it will be very difficult to reduce the cost of the National Health Service in the future, and there is every probability that it will be increased.

We must regard the National Health Service as an essential part of our national life and plan accordingly. There is no need for the right hon. and learned Gentleman to come to the House and speak in an apologetic manner. We are proud of the Service, but we are anxious that it should be run efficiently and that all waste is avoided. People who have always ignored the tremendous benefits of the National Health Service which the Minister mentioned—the diminution of suffering and the prolongation of life—are obsessed by the overall cost; but, as he said, the proportionate cost of the Service related to the national income is falling and not rising. This is not disputed.

Mr. Walker-Smith

Prior to 1954, but it has risen since.

Dr. Summerskill

I am sure that the right hon. and learned Gentleman will agree that the proportion has not varied greatly. There is no spectacular change, let us say. That is right, I am sure.

It is quite indefensible, therefore, to increase the contribution by a method which is equivalent, in its effect, to a tax on rich and poor alike for meeting the cost of the country's sickness. I regard this as a great social service, and I find it difficult to understand why there should be a discrimination in this way.

Last week, the Financial Secretary to the Treasury said that, unless the Government were to take this increased load on the Exchequer, that is to say, the increased cost of the Service, there were three courses open to them. First, they could cut costs by reducing the Service; secondly, they could further extend the system of charges; and, thirdly, they could raise the contributions. That was a rather naïve statement, for the hon. and learned Gentleman omitted the most important first step. An efficient Minister should, in the first place, satisfy himself that the heavy spending services of his Department are using the money to the best advantage, before being panicked by the Treasury into demanding further sums from the poorest in the country.

This is a panic measure. I have been a Minister and I know precisely what happens behind the scenes. I feel that the Minister should have asked for more time in order to examine the Service closely in detail. He told us today what he had done, but, of course, he did not touch upon the machinery or explain how it worked, how co-ordination was improved, or what could be done, until the last minute of his speech, when, almost as a postscript, he touched on something which is absolutely fundamental if we are to reduce the cost of the Service.

It is the time-honoured practice of the House to satisfy itself about how money is spent before granting further supplies, and I propose to follow it. The Minister said last week that he was persevering in his search for new economies, and he indicated today that he was trying to do something about it. I wish to direct his attention to those aspects of the Service where, perhaps, it is necessary to make a fundamental change. He mentioned the pharmaceutical service. I know that, after I have referred to it, some hon. Gentlemen opposite will follow me and, after declaring their interest, will dissent from everything I say.

Last week in Committee of Ways and Means an hon. Member opposite, having declared an interest, sought to protect the drug houses. I must say that on a previous occasion the right hon. Member for Thirsk and Malton had said that I was justified in criticising the colossal niagara of medicine. At the end of November, 1956, in a debate on prescription charges, I raised the question of what I considered was the unnecessary over-prescription of certain proprietary drugs. The only report which hon. Members have before them is the report of the Ministry of Health for 1956. It is most unfortunate that these reports take a long time to prepare, so I must quote from some of those figures and amend them from what the right hon. and learned Gentleman has told me today.

I attacked the drug houses because I felt there was an appalling abuse of the Service, and in return I was attacked by hon. Members opposite. Since that debate we have had the report of the Ministry, of Health. During that year the cost of the prescriptions has risen—and I anticipated that it would rise—from 4s. 7d. in January to 5s. 1d. in November, and to 5s. 6d. in December. When I asked the Minister this afternoon what was the average cost of prescriptions, he told me that it had risen to 6s. This is a colossal amount for an average prescription, and I presume it is still rising.

The total drug bill when I spoke last was £61 million. The Minister tells us today—I appreciate that this is apart from the hospital practices—that the pharmaceutical bill is going to be £74 million a year. The cost of the pharmaceutical service has more than doubled since 1949.

Not for one moment do I underestimate the value of the antibiotics and the new drugs on the market in the cure of disease, but I say again that there is a high-powered salesmanship in this country which induces doctors to prescribe and patients to ask for expensive proprietary drugs for which there is a much cheaper equivalent. I have repeated my charges on other occasions, giving the names of the firms concerned and illustrating my case by giving details of experiments carried out by experts in this field to prove that there is a cheap equivalent for some of these drugs.

I only say to hon. Members opposite who have dissented from what I have said that during that time I have not heard one representative from any drug house attempt to disprove what I have said. I am very careful, when speaking from the Dispatch Box, in criticising people outside who are unable to reply in this House for themselves. Therefore, before I made this statement I had verified every point. I think that the proof of my statement about there being an equivalent for some of these proprietary drugs is that I have not had one letter from any of the drug houses charging me with being irresponsible.

Therefore, I say that the position is becoming deplorable when we have an average prescription of 6s. and an annual pharmaceutical drug bill of £74 million. I have seen a report that the position is not improving. It states that 43 per cent. of the drugs and preparations dispensed are proprietary drugs. That is in the latest report. It may be—the Minister knows; I do not; everything we say on these benches is related to information that we can obtain chiefly from outside industry—that this year the figure will be even higher. Apparently some action has been taken to the extent of sending letters to some doctors drawing attention to their higher prescription costs.

The profits made by the private drug houses were discussed by the Guillebaud Committee, I hoped that the Guillebaud Committee, which was set up to examine the expense of the National Health Service, would be able to say what was happening, but all it said was: On the basis of our evidence we have no means of forming a judgment on the level of profits now being earned as a result of the sales to the National Health Service. Evidence was given on behalf of some of the drug houses. Yet, despite the questioning by the Guillebaud Committee, the profits were not revealed. Indeed, the investigation into the cost of the pharmaceutical products was the most unsatisfactory part of the Report.

Now I come to another point, and this deals with what I would call the postcript to the Minister's speech when he spoke for over an hour.

Hon. Members

No.

Mr. Walker-Smith

It may have seemed like it.

Dr. Summerskill

I was waiting for some information to emerge for an hour and it did not come. Perhaps that is the explanation. I should like to know if the Minister will reconsider the whole field of hospital expenditure. The gross maintenance cost of the hospital service for 1956 was £305 million, and the right hon. and learned Gentleman states that for this year it is £399 million. However, I will relate my remarks to the information available in the latest report.

The national average cost of maintaining in-patients in hospitals administered by regional hospital boards—of course, it is more in voluntary hospitals—was £l7 15s. a week for acute cases, £11 18s. 6d. for mainly long-stay cases, and for chronic cases £7 18s. 7d. Is the Minister satisfied that in-patient and outpatient services are used in the least wasteful manner? I was astonished to hear him in such a naïve manner counting up the number of prescriptions and the number of patients and then saying, "This is how we have served the country." That is not the criterion of a good health service. It would have been better if he had said that not so many people came to the out-patients departments, instead of telling the House that an increased number came. I am not blaming him personally, but I am putting a point of view which I think is absolutely valid. My only object is to try to make the National Health Service as efficient as possible.

In these days of increasing specialisation, should we not encourage group practices more? I should like to see health centres all over the country, but I realise what they would cost. I realise that it would be unrealistic for me to go to the Minister on party grounds and say, "Put a health centre in," but I do say that the group practice today is more efficient, because in group practice we often find men and women who tend perhaps to have their own little specialities, and that in itself would reduce the number of people going to out-patient departments.

The right hon. and learned Gentleman did not mention this matter, and yet this is almost fundamental to the hospital problem. Is he satisfied that many of the long-stay and chronic patients could not be nursed at home if the facilities were available? In his postscript to which I referred, he said: "We look forward to the time when more old people and more people suffering from some mental disability will be treated by local authorities." But he has got to pursue that line. I would be interested to discover—perhaps he might give me the information in a letter—how the number of long-stay and chronic hospital patients in an area well served with home help and home nursing facilities compares to those in an area with a shortage of both those facilities.

The Minister told us this afternoon how many visits home nurses have made. The question I want to ask—I did ask it, but I did not get an answer—is how many visits district nurses and home helps have had to refuse. How does the district nursing and home help service relate to the demand? That is what the House wants to know.

Mr. Walker-Smith

I am sorry to interrupt the right hon. Lady, but she keeps on saying that I referred to this important aspect of the question of home help and community care and so on at the end of my speech. Surely she appreciates that the reason for that is that we had a full and interesting debate on this precise subject in November, and I do not think we had the advantage, for personal reasons—which I regret—of the right hon. Lady's presence. I spoke of all these matters. There is no need for me to write to the right hon. Lady about them. She can look up the speeches in HANSARD.

Dr. Summerskill

It is quite unnecessary for the Minister to get hot under the collar. Certainly let him be on the defensive; but that debate was entirely different. This is a valid point. Hon. Gentlemen need not criticise me as though I am making party points. I am not. I am trying to suggest a way of reducing the colossal health bill.

We all agree that home helps are necessary. I want to develop my point and to show the Minister how he should examine the machinery so that the hospital service and the home help service is more co-ordinated. The Minister gave those figures and the number of visits, but I want to know how the district nurses and the home helps meet the demand of the country. That is most important. Unfortunately, in most parts there is a shortage of one or the other.

I want hon. Gentlemen who have listened to the figures given for the National Health Service to consider the pay which is given to these women. I observed that hon. Members nodded when I emphasised the importance of the service. A State Registered home nurse with district training gets £467 non-resident. One nurse may make fifty or sixty visits to patients every week. I want hon. Gentlemen to bear in mind the cost of keeping a chronic patient in hospital, which is between £7 and £11 a week. There is a shortage of home helps all over the country. The home help is paid 3s. 3½d. an hour for hard and heavy domestic work, while she can get 3s. 6d. an hour for lighter work in a private house. Of course, there is a shortage.

Mr. Brian Harrison (Maldon)

Do I take it that the right hon. Lady is suggesting we should put another 6d. or so on to the contribution in order to increase this service?

Dr. Summerskill

I really cannot descend to the hon. Gentleman's level of intelligence.

It is not, therefore, surprising that friends and relatives of old people, seeing their relations well looked after in hospital, are reluctant to have them home and press the doctors, matrons and nurses to keep them as long as possible because this home help service is not available. I have always felt very strongly on this aspect of the medical service, because nearly two-thirds of the money spent on the National Health Service is attributable to the cost of the hospital service. If, therefore, we reorganise and look at the machinery to ensure that we have an adequate home service, we might well, perhaps, relieve the hospitals.

I was very glad to see that the Royal College of Physicians, in its Memorandum to the Guillebaud Committee, emphasises this point. It said: The most costly form of medical care is that given in hospitals, and money would be saved if some of the cases now investigated and treated in hospital were investigated and treated by the general practitioner. In the technical revolution of medicine general practice has lagged behind. With the rise of specialism, the scope of the work undertaken by the average practitioner has steadily narrowed, and the public has come to believe that all but the most trivial ailments need the attention of a specialist. Since 1948, when consultations with the practitioner became free, the number of patients going to him has risen and he has often responded by sending more of them to hospital. Finally, it said: Better general practice, closer contact between practitioner and specialist, and the greater use of the district nurse and the health visitors and home helps supplied by local authorities, would reduce total costs by preventing many patients from going to hospital and by allowing others to be discharged sooner to their homes. I hope that the hon. Member for Maldon (Mr. B. Harrison), who interrupted me, did not think I was making a party point. This service makes a most important practical contribution to the National Health Service.

My third and final point is this. As hon. Members will appreciate, in a debate of this kind one needs a long time. Perhaps the Minister could answer these points when replying to the debate, when I hope his approach will be the same as mine—constructive. He will realise that what I am saying is not by way of criticism of the Ministry but an endeavour to improve the National Health Service. I am glad to see the Minister here today. I am not criticising him. He is much better at law than we are, but technical knowledge is important.

I want the Minister to look at the cost of part-time consultant appointments as opposed to full-time appointments. I strongly believe that too many part-time consultants are employed and that it would be more economical to have fewer. When it is considered that these consultants are paid on a sessional basis, which includes travelling time plus payment of domiciliary visits at the rate of four guineas a visit up to a maximum of 800 guineas, and then supplement their income by private work, it seems that there is room for investigation.

My opinion is that we have had an increasing volume of criticism by people who have needed an urgent operation. An alderman sent me a letter this morning complaining that a relation of his wanted an immediate operation on an eye. They had been told at the local eye hospital that there would be a wait of three months. They were also told that if the woman was prepared to pay £60 she could have it done in a fortnight. The family are collecting this sum. This alderman has been associated with the services of the local authority, and rightly he is very incensed. It is human nature for doctors if they have spare time to see private patients and to do as much private work as possible.

I want to ask the Minister this question, both from the financial and practical aspects: Is it wise to have so many part-time consultants? I only hope that in reply the Chancellor of the Duchy of Lancaster will not quote the Guillebaud Report too much, because he must remember that the Guillebaud Report was presented in January, 1956, but that the committee of inquiry was appointed in May, 1953, which is five years ago. Since that date expenses have soared. There have been changes in therapeutic practices and changes in the morbidity rate of various diseases, all of which calls for a rethinking and reviewing of the Service.

This is what is called for, not a Bill hurriedly presented, designed to see the Government over a difficult period. By so doing, they have to cast around to find from where they can get the money as easily and quickly as possible. The result is that they have done something which is grossly inequitable. They have gone to the very poorest and to the people in the lower wage groups to ask for this increased contribution, when only five months ago they did precisely the same. They showed a callous indifference to the needs of these people and asked for a further contribution. I say very strongly that this shows an ineptitude on the part of the Conservative administration.

5.30 p.m.

Mr. R. H. Turton (Thirsk and Malton)

It is clear that the speech just made by the right hon. Lady the Member for Warrington (Dr. Summerskill) could be divided into two parts. I am glad to say that the first part, commenting on the future of the Service and upon its financial structure, was wise. The second part was, unfortunately, of a different nature. It was designed to exaggerate differences and to describe this Measure in very thoughtless terms.

The right hon. Lady attacked the Administration as being guilty of administrative ineptitude. She became delightfully ingenuous when she said "This is a panic Measure. I have been a Minister and, therefore, I know what happens behind the scenes." I hope that I can prove to the right hon. Lady that this is not a panic Measure and that any unfortunate experiences which she may have had in the last Socialist Government have not recurred either in my right hon. Friend's Department or in the present Cabinet.

This is no change of financial structure. I remember that last week hon. Members went back to Beveridge in their speeches, but that does not seem to be the right distance to go back. Let us go back to the White Paper which accompanied the National Health Service Act, 1946—the Measure which set up the financial structure of the Service.

All of us, on all sides of the House, take pride in the Health Service, though we may well feel at times that it requires improvement. There is no party difference about the establishment of the Service, nor indeed very much difference about this part of the structure. Paragraph 100 of Command 6761 stated that The new service is to be financed mainly from the exchequer, assisted by a payment of some £32 million transferred from the National Insurance Fund, and partly from local rates with the help of exchequer grant. Paragraph 5 of the White Paper said: A proportion of their contributions"— that is, of those paying National Insurance— will be used to help to finance the health services under the present Bill … What was that proportion?

The proportion in 1948, when the Act was introduced, was 10 per cent. of the contribution. It was 10d. out of the existing total contribution of 8s. 5d. That was decided by the Socialist Government. Before this Bill was introduced, the proportion of insurance to the total contribution had dropped to 9½ per cent. Now the Bill is to raise it to 12¾ per cent. Therefore, in that context no one would say that this is a major change.

It may well be that a major change ought to come, but this is not a major change from the structure in the 1946 Act. When one considers the tripartite structure, the only possibility of a major change having been made by the present Government is not in this Bill but in the Local Government Bill, whereby, by moving from a percentage grant to a general grant, it is left to a local authority to decide whether it wishes to reduce or increase the proportion of its expenditure upon its local health services.

One of the difficulties with which we have been faced ever since we began the Health Service is that a very large part of the expenditure comes out of the central Government. Figures issued by the International Labour Office show that, taking social security as a whole, 58 per cent. of our social security expenditure comes from the central Government, whereas in other countries in Europe, such as Germany and Holland, the proportion is under one-third, and in France it is a little over one-eighth.

This seems to me to be a weakness in our social security schemes. I believe that it is one of the reasons why we have some long-term drawbacks in the Health Service and in other branches of social security. It may be said that a good deal of this difficulty flows from the decision which we originally took to establish a Health Service. I remember the right hon. Member for Ebbw Vale (Mr. Bevan) saying on 30th April, 1956, that the scheme was necessary because it has been the firm conclusion of all parties that money ought not to be permitted to stand in the way of obtaining an efficient health service."—[OFFICIAL REPORT, 30th April, 1946; Vol. 422, c. 43.] It was for that reason that the right hon. Gentleman decided that the financing of the scheme should be placed in the hands of the Chancellor of the Exchequer.

I do not believe that the financing of a hospital building programme is easily done under a system of annual accounting, which is the normal requirement of Exchequer financing. I believe that this system of financing by the Chancellor of the Exchequer tends to make both the user of the service and its administrators less conscious of the price factor than I should like to see them. There is no way, under this system of central financing, of keeping on reminding those who are using or administering the service of the factor of price.

Nor, indeed, does this system achieve the right hon. Gentleman's object of seeing that money does not stand in the way of an efficient development of the Health Service. The House will remember that, only eighteen months after the Service came into operation, the right hon. Gentleman had to have his Health Service subjected to a ceiling and that in May, 1950, he had to take part in imposing that ceiling by giving a pledge.

In a speech on 5th May he said: I have given a pledge that for the year 1950–51 there will be no exceeding the financial ceiling laid down in the Estimates. It seems true, therefore, that this system of central financing hampers the development of the Health Service. I am afraid that it is especially true when capital expenditure in the Service is considered.

I remind the House of the words used in the Guillebaud Report and the figures published in paragraphs 62 to 64, which show that capital expenditure during the first six years of the Service stayed at a level which was about two-thirds below the level which ruled before the war.

That, I believe, is the most astonishing result of the creation of the Health Service. If we look at the surrounding circumstances, at the great amount of bomb damage, the great need for the construction of hospitals, how many hospitals had to be housed in temporary buildings, we must be surprised when we realise that, when the war was over, we in this country took no steps to renew the capital expenditure on hospitals. Before the war, the relationship of capital expenditure to current expenditure on hospitals was 19.6 per cent. After the war, it dropped to 4 per cent., and from the figures given by my right hon. and learned Friend in his very clear speech today, it now appears to be 6 per cent.

If I may again quote a Guillebaud Report figure to give the comparative position outside this country, I gather that in the United States, which is not necessarily a model for this comparison, the relationship of capital expenditure to current expenditure on hospitals is 23 per cent. I believe that there is a great lesson in these figures.

Mr. Blenkinsop

The right hon. Gentleman is raising a very important and valid point. I had hoped that, for the sake of giving a perfectly fair picture, he might have added, so far as hospitals are concerned, that during the war quite a number—I do not want to exaggerate—of valuable buildings were put up, unlike the provision made in other fields, such as housing. These wartime hospitals proved to be of very great value, and that fact did bear on the problem of capital expenditure in the years immediately after the war. I quite accept the right hon. Gentleman's general argument.

Mr. Turton

The hon. Gentleman, no doubt, knows his own hospitals in his own constituency. I have seen hospitals all over the country, and have seen the damage done by the bombing, and the amount of damage which has not been repaired. There was no acceleration of the hospital building programme in the first six years of the Health Service, and the Guillebaud Report recommended that at least we should get back to an increase of 200 per cent. to bring us up to the prewar position. [Interruption.] I kept very quiet while the right hon. Lady the Member for Warrington was speaking. It may be surprising that she agrees with me, but to make that observation is not very courteous or very helpful to the conduct of the debate.

Dr. Summerskill

The observation was, of course, that we all agree with the right hon. Gentleman.

Mr. Turton

I did not interrupt the right hon. Lady. I know how difficult it is for her to keep quiet. That sort of thing is not very helpful.

Dr. Summerskill

Very well, I will look at the right hon. Gentleman.

Mr. Turton

That will be very agreeable.

The Guillebaud Committee recommended a 200 per cent. increase. What has happened today is that, instead of an increase of 200 per cent., there has been one of 130 per cent. I wish to bring the attention of my right hon. and learned Friend to this position. It means that we have built houses and schools and have tried to repair defects which occurred because of the war in these directions, but we have not yet really tackled the problem of the hospitals.

This is the only country in the civilised world that has not completed a new hospital in the last twenty years. If one has been completed recently—and I know that a number of buildings have been begun—I stand corrected. I find as I go round some countries in Europe, as I found when I was in North Africa, in Tunisia, last year, new hospitals which had just been completed. When I see these things, I always feel that we ought to have done the same in our own country.

If we had not had the take-over by the State of the hospitals, let us try to think of what would have been done. As a memorial to the miracles of surgery and of nursing that were performed during the war, and as a tribute to those who had sacrificed their lives, I am quite certain that this country, both local authorities and private hospitals, would have set out upon a great rebuilding programme. [Interruption.] I gather that the right hon. Lady does not agree with me there, but I am certain of that. As it was, all the endowments of the hospitals were taken away from them and that did not help. It put a stop to the rebuilding.

I challenge right hon. and hon. Gentlemen opposite to deny that, if we had been in that position there would have been a great demand from the people to have these hospitals rebuilt, but that has not happened yet. I am not arguing that we should put the clock back. I do not suggest that, but I am suggesting that we should now realise that, in fact, one of the reasons for the increasing expenditure on health is the fact that we—and both sides of the House are guilty of this—have starved the hospital boards, and also the local health authorities, of capital expenditure.

This is one of the occasions on which I believe that by spending more we can save money. Let me give two illustrations of this; and I know that one of them comes very close to what the right hon. Lady said, so I feel sure that she will want to interject again. First, let us take the problem of the mental hospitals. All over the country we have these large barracks of mental hospitals, built more than a hundred years ago and isolated from the rest of the community; their very nature tends to retard the recovery of the patient and they are very difficult to staff. If we could pull these places down and build psychiatric wings in the hospitals and after care local authority hostels, as recommended in Chapter 10 of the Percy Commission's Report, it would mean a tremendous saving on current expenditure.

Equally so, if my right hon. and learned Friend could spend £1½ million on chiropody to keep old people mobile, and if flats, bungalows and small hostels could be built to house the old people, I believe that that should come before the right hon. Lady's suggestion about an increase in the domiciliary services, although I attach equal importance to them. I believe that we must build suitable accommodation for these old people, and that, if we could do that, there would undoubtedly be a very great increase in capital expenditure, but there would also be a very great saving in current expenditure in later years.

Although my right hon. and learned Friend divided the £280 million into one part which was inflationary and that which represented an improvement in the services, I hope he will bear in mind that, if we could accommodate the old people or some section of the present mental patients in the community, there would be savings of expenditure in not only the improvement part but also the inflationary element in that increase which my right hon. and learned Friend talked about. That is why I stress the need to reconsider this part of our programme.

In my view, the £740 million which has been mentioned today is the irreducible minimum so long as 72 per cent. of the expenditure is borne by the Exchequer, because there is not sufficient price consciousness in the Service and the present method of Exchequer financing makes it impossible to get sufficient insistence on extra capital expenditure rather than on current expenditure.

The right hon. Lady has said that the proposed contribution will be too heavy. Only last week my right hon. Friend answered a question of mine. He said that the new total insurance contribution will be 3.9 per cent. of average weekly earnings for the employed and 3.2 per cent. for the employer. In West Germany, it is 12.2 per cent. for the employed person and 14.9 per cent. for the employer. In France, it is 6 per cent. for the employed person and 30.2 per cent. for the employer. It is clear from those comparisons that the burden of this contribution here is much lighter than it is in France and in Western Germany.

Dr. Summerskill

Are the benefits comparable?

Mr. Turton

I am coming to that.

It is true that in Western Germany the contribution does not provide for all the benefits provided by our 3.9 per cent. In fact, the German worker himself has to pay more for his hospital treatment, which is provided by the Lander and the church. This means that in his local taxation he has to pay extra for hospital treatment and he also has to contribute to his hospital treatment through the church and religious societies.

It is equally true in France that the worker has to pay an extra amount when he goes to his doctor of 20 per cent. of the cost of medical treatment. Therefore, on that comparison, also, the worker in France and Germany is more heavily burdened than is the worker here. I believe that this insurance system has the benefit that it generates price consciousness and avoids the system of annual accounting.

We must look ahead. Clearly, on a flat-rate contribution there is a limit to which the insurance contributions can rise. There have been articles in both The Times and the Manchester Guardian on the question of a social security tax. I invite Her Majesty's Government, therefore, to look at the question of financing social security on a broad basis. I believe the time has come for a Royal Commission to examine the question. I believe it would be impossible to run both a pay-as-you-earn scheme and a social security tax. If we had a social security tax, it would have to be merged into pay-as-you-earn, whether on the Chambers plan or the Lady Rhys Williams' plan or otherwise. Also, if there is to be a graded insurance contribution, I believe that this also should be merged with the pay-as-you-earn scheme. The time is coming when that matter should be considered because, as in the case of the Beveridge Plan, we want to remove this service from party politics. It is a question of how best to finance social security.

Meanwhile, we are retaining the original structure of the 1946 Act without any great amendment. That is why, as a temporary measure, I am sure that this Bill is to be commended and is right. I have only two regrets. The first is that this 8d. is divided as to 6d. and 2d., which more or less retains the division made by the right hon. Gentleman the Member for Ebbw Vale in his original Bill of 1946, when the division was 8½d. for the employed person and 1½d. for the employer. I believed that this was wrong at the time, because health should be financed equally by the employer and the employee. I would like to see in this Bill a division of 4d. for the employer and 4d. for the employed person. That was the division made in the Conservative Health Insurance Act of 1936, when the insurance contribution of 9d. was divided equally between the employer and the employee. I believe that the 1946 Act made a great mistake in that respect.

My second regret is about a more difficult point. I regret that this contribution is not earmarked for a special part of the health expenditure, because that would give a greater consciousness of the price factor. I believe the contribution should be earmarked to the general medical and pharmaceutical services, because, then, all would realise how the insurance is linked with the visit to the doctor and getting the drugs. I agree completely with the right hon. Lady that one of the most worrying signs in the National Health Service is the rising cost of drugs.

We must remember, however, that the new drugs are doing a great deal of good. There are many people alive today who would have been dead if they had not been available. The right hon. Lady is right, however: I am sure that the pressure salesmanship of some of the drug houses is making some young doctors prescribe expensive drugs unnecessarily. I hope that the inquiry being made by the British Medical Association will help in this respect. It would also help if the whole of the 2s. 4d. contribution had been tied to the medical and pharmaceutical services.

Mr. H. A. Marquand (Middlesbrough, East)

If the right hon. Gentleman seriously proposes that, would he agree that the 1s. charge for medicine would have to be obliterated? If this new charge were tied to the pharmaceutical service, it would be only fair to remove the 1s. charge from medicine. If so, and we put down an Amendment on those lines, as we did the last time the contributions were increased, would he support us in the Division Lobby?

Mr. Turton

If the right hon. Gentleman will state in his Amendment that all this expenditure is earmarked to the general medical and pharmaceutical services, remains earmarked, and is tied in as I have suggested, I will gladly look at his Amendment with sympathy and, I hope, with approval, but I must see how he ties it in.

Some may ask what is gained by this earmarking. I agree that no more money will be spent, but the gain will be an awareness of the cost. Too many have said too much about the free Health Service, so that far too many people think that it costs nothing. However, the Health Service has to be paid for and that is why the Bill has been introduced. Somehow, we have missed the contributory factor in the last ten years of the Health Service, when some of its expense has been rising unnecessarily. What we must try to do is to bring back the contributory spirit into the Service.

I am reminded of the Declaration to Electors, in 1945, of my right hon. Friend the Member for Woodford (Sir W. Churchill), who said: The Health Scheme will be made available to all citizens. Everyone will contribute to the cost. So long as the citizen feels that there is no unnecessary waste in the Health Service, so long as he feels that those who are not really ill are not abusing the Service, so long as he feels that those who are really ill have the buildings, equipment and the skill of doctors and nurses to make them—if possible—well, he will pay this increased contribution with a cheerful heart, knowing that it is his insurance against ill-health.

6.2 p.m.

Mr. Douglas Houghton (Sowerby)

Before following some of the remarks of the right hon. Member for Thirsk and Malton (Mr. Turton), I want to make a few observations about the circumstances in which the Bill has been introduced. From the benign appearance and urbane manner of the Minister this afternoon, one would never assume that the Bill is the result of a Cabinet row. During the debate, I have been wondering what the right hon. Gentleman the Chancellor of the Duchy of Lancaster is doing here. [An HON. MEMBER: "Taking notes."] Has he brought the tranquillisers to administer at the end of the debate? I can see something in common between his duties as chief Government propagandist and the Bill. They are both concerned with "dope."

The Bill is the outcome of the convulsions in the Cabinet a few weeks ago, when the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft) and two other Treasury Ministers decided to quit. What we do not know is whether the Bill is what they asked for and were refused, or whether they quit on charges which were proposed and then dropped. The Minister has said nothing about that this afternoon and perhaps the Minister who is to reply to the debate will lift the veil a little more.

Let me draw the distinction between last year's Bill and this year's Bill. Last year's Bill was introduced on 8th May, when we had seen the shape of the Budget and had seen the detailed Estimates for the National Health Service. This year the Bill is introduced before we have seen the shape of the Budget and before we have seen the details of the Estimates of the Health Service. Why has the Bill been introduced now, when we do not have the whole financial picture before us? It is significant.

What we do know is that the Bill is an instrument for announcing to the public a faked economy in Government expenditure. The Government have said, "We have got the total estimate of Government expenditure within £50 million more of the total expenditure for the current financial year, including Supplementary Estimates." That is bogus. What the Government have done is merely to shift something from budgetary taxation to extra-budgetary taxation. It is simple as my eye, yet the Government present this as a calm and considered approach to the financing of the Health Service. It is nothing of the sort.

The right hon. Member for Runcorn (Mr. Vosper), the previous Minister of Health, is in his place. I wonder what has been passing through his mind this afternoon. When he introduced the first Bill last year, did he expect to see his successor introduce another Bill at this stage this year? I do not think that he did. The terms in which he introduced last year's Bill did not suggest that.

What we are discussing today is not the nature of the Service, but how and by whom it is to be paid for. There are attractions about the idea of earmarked taxation. I do not dismiss them. In considering how the Health Service can be paid for, one might dwell upon some of the factors which are increasing the cost of the Service today.

For example, motorists are knocking down many people. Why, then, do we not put an extra tax on them and call it "butchery on the roads tax" and bring that home to the motorists? Again, cigarette smokers apparently intend to persist in putting themselves in the surgical wards of our hospitals. Why not put an extra tax on them and call it "the lung cancer levy"? That might stop them in their headlong rush towards a painful death. Our business tycoons are digging their graves with their teeth. Why not put an extra tax on them and call it the "gluttony tax", to be levied on expensive meals in restaurants and hotels for those who over-eat, largely at the taxpayers' expense? There are all sorts of suggestions which one could make relating extra taxation either to the purposes to which it is to be devoted, or to the cause of additional expense.

Seriously, we have here the choice—and it is a free choice, a political choice as well as an economic choice—about how the expenses of the Health Service shall be spread. I am not tied to Beveridge. Beveridge is out of date in many ways. He thought in a different age.

The right hon. Member for Thirsk and Malton drew comparisons between the proportions directly contributed to the Health Service in other countries and that paid by the Exchequer. He overlooked two things. The first is that few other countries have the same efficient and equitable system of direct taxation as we have. France is a notable example. France could not collect the cost of a national health service by direct taxation. We know that the French do not believe in it and that, even if the Government did, the people do not and would not pay.

One has also to consider differences in taxation structures in other countries and the efficiency of their tax-collecting machines. If the right hon. Gentleman goes behind the Iron Curtain he will find that practically the whole cost is borne by the Exchequer. In some Iron Curtain countries, there are no contributions from either employers or workmen. The whole cost is borne on the Exchequer. That is a political decision.

The second respect in which the right hon. Gentleman went wrong was in suggesting that there is some kind of common denominator, a common factor, in all countries relating to the proportion which the worker should directly contribute to the expense of social services. There is no such common factor. Each country has its own political direction. We have a free choice, as I said, and in making that choice we may decide that more should be put upon the central Exchequer than upon contributions, because we prefer it that way or because we see very strong social and economic reasons for it.

We are not bound to follow Dr. Adenauer, or the Government of Holland or Belgium—still less of France—in our approach to the distribution of social service costs. We are considering how the costs should be distributed. The Minister, in his rejoinder, to the suggestion that flat-rate contributions are regressive, drew a comparison with the tax upon beer and tobacco. He said, "Look at the tax on beer; that is not progressive." It is progressive to the extent that the more one drinks the more one pays, whereas we pay the National Health Service contribution whether or not we have the benefit of it. The Minister can easily get into a state of confusion when indulging in intellectual analyses of different aspects of our taxation.

I am not one of those doctrinaire people who call a contribution a poll tax when they want to inject prejudice against it, or a form of regressive taxation when they want to build up public hostility towards it, and a contribution when, although it is much heavier, it is levied upon a graduated basis. We should regard a contribution of this kind as a contribution, without ignoring regressive tendencies in flat-rate contributions, or the bias that we have in favour of the more equitable form of direct taxation as against the unfair aspects of indirect taxation.

The only reason why we have so much indirect taxation is that Governments lack political courage in levying more direct taxation and relieving commodities—many of them important, if not essential—from indirect and regressive taxation.

Mr. William Shepherd (Cheadle)

Will the hon. Gentleman tell us what forms of direct taxation he proposes to increase?

Mr. Houghton

The hon. Member knows my weakness for the Income Tax; I have believed in it all my working life. I cannot think of anything else that comes readily to mind which would be half as effective. It can be stiffened at the top without very much harm.

No one will suggest that Britain's economic future would be imperilled by the restoration of the reliefs given to Surtax payers in the last Budget. I do not like ramming things down people's throats, but the truth is that that was a significant relief to give at a moment when we were being told—as we still are being told—that we cannot afford to find the higher cost of the National Health Service from Exchequer taxation, but must have extra-budgetary taxation to meet it.

The question that we must ask in these cases is whether a flat-rate contribution is becoming so unfair in its incidence on wide ranges of income as to provide strong criticism for its continuance or, at all events, for any increase in it. I know that much play can be made about this extra 6d. It is the old story, "It is only another 6d.; who will miss it?"

Sir Frederick Messer (Tottenham)

That is what they said last time.

Mr. Houghton

Is it quite obvious that the contribution introduced last year is a temptation to the Government to increase extra-statutory taxation to pay for the Health Service, and to drift away from the obligations of the national Exchequer in this connection.

If this kind of contribution were fair, or fairer, in its application, there might be some saving words to be said for it, but we must remember that the contribution is strictly linked with the payment of the National Insurance contribution. If a married woman, for example, feels that she ought to pay for her own retirement pension because she will reach pension age before her husband, she is thereby compelled to pay a contribution to the Health Service, but her neighbour, whose husband will reach pension age before she does, and who, therefore, does not feel the same need to contribute to a pension in her own right, is allowed to opt out not only of the National Insurance contribution but the Health Service contribution.

The same consideration applies in the case of men and women who have passed retirement age, but who have deferred retirement in order to earn bonuses upon their retirement pensions. They have to pay contributions, and to earn the additional bonuses on their pensions they have to pay National Health contributions on top of their National Insurance contributions. I cannot see anything fair about that.

How rough and ready this system is. The House accepted it last year, thinking that it was perhaps a necessary departure from the financing of the Health Service of previous years, but surely not with the intention of pursuing this additional contribution, with all its unfairness and its increasingly regressive tendencies.

Let us consider the additional burden put upon the employer. It is levied without any regard to the profitability of his industry. If he were paying for his share of the Health Service through direct taxation what he paid would at least be related to the profitability of his business, but upon this basis he pays whether it is profitable or not. We must also consider the effect upon local authorities.

I am obliged to my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) for providing me with figures relating to the Liverpool City Council. The increased contributions for last year and this year amount to £150,000, which represents a rate of 4¾d.—which charge goes straight back to the ratepayer who, after all, is the contributor. We take the money from him in the form of a contribution and levy an additional charge upon him in the guise of rates. Hon. Members opposite have not studied this matter closely enough. They do not see what a bogus system it is.

If hon. Members opposite ask me what I would suggest in present circumstances, my reply would be that this additional charge should not have been brought forward now; it should have stayed where it belonged, as part of the general expenditure of the country upon social services. The Minister disclosed his hand in regard to economic policy a little more clearly than did his right hon. Friends, however. He said that with a disinflationary policy it would be inconsistent to put the whole of the increased cost upon the taxpayer. What he was really saying was that we shall put extra burdens upon the mass of the people, not based upon their ability to pay but with the deliberate object of reducing their consumer expenditure. That is the purpose of the Government's economy policy both in relation to the Rent Act and the additional contribution proposed by this Bill.

The right hon. and learned Gentleman naïvely says, "Of course, you talk about putting this on direct taxation, but look at how many people no longer pay Income Tax. A Conservative Government relieved many millions of people of their obligations under direct taxation. If we put it on direct taxation, or keep it on direct taxation, they will not pay. Therefore, we have introduced this contribution to be fair." The right hon. and learned Gentleman makes that observation as if Moses had brought down from Mount Sinai a line of Income Tax exemption beyond which the right hon. and learned Gentleman cannot go.

But the Government can enlarge the field of Income Tax payers at any time the Chancellor of the Exchequer likes to propose it, and, therefore, if the right hon. and learned Gentleman intended to say, "We cannot bear this and other costs at the present time without increasing taxation," that was something which should have been said by the Chancellor of the Exchequer. If he said, "It will be necessary for me to increase Income Tax or reduce personal allowances to meet the increased cost of the Health Service" that would have been understood as clearly as the contribution which is proposed here.

The truth is that this is a question of political choice and the right hon. and learned Gentleman has made a political choice in favour of what he calls a dis-inflationary policy, which means putting additional burdens on the mass of people to damp down expenditure on consumer goods and reduce the standard of life of the people. That is all it is. When I say "all it is," I mean that is the whole purpose of levying the additional contribution at this time.

If I am asked whether, in considering contributions in principle, I would object to graduated contributions I would say it is fairer than to have a flat-rate contribution. There is no law against a graduated contribution. Last week, when one of my hon. Friends referred to a graduated contribution hon. Gentlemen opposite said, "Yes, but you cannot give graduated benefits." Under the principles of direct taxation in this country, which rest upon the assumed ability to pay, we have never looked for flat-rate benefits. If it comes to that, the Navy is a flat-rate benefit. What bigger share have I, as a substantial taxpayer, in the British Navy than people who pay very much less? I have no more. I do not see the ships either lower in the water or higher out of the water or bigger, or smaller, or with bigger guns or smaller guns, because I pay more tax.

Sir K. Joseph

The hon. Gentleman is pursuing an interesting subject with expertness. When he says that if there were a graduated contribution, may I ask whether, in his opinion, it should take into account the family situation in order to be parallel with P.A.Y.E., or does he prefer a flat rate though graduated—if he understands what I mean?

Mr. Houghton

That refinement in direct taxation has only to do with its incidence. Were Income Tax 3d. in the £, we should not bother about wife, or children, or dependent relative, or life insurance contribution allowances, still less with business expenses. People would say, "There it is and we can pay. We can call it a flat-rate contribution." When considering a graduated contribution in relation to family circumstances it depends on what is the level of the graduated contribution whether we make a simple distinction between single people and married people or carry the refinement still further, as we have been compelled to do in the Income Tax system with the rise in the level of taxation.

I revert now to the question of flat-rate benefits and suggest to the Minister that the wealthier people are the more valuable is their health and there is no reason why they should not pay a bit more. After all, in all our approach to direct taxation we have regarded those with wealth and substance as having a bigger stake in the community than others. They have more to lose, and more to gain from prosperity.

Mr. A. E. Cooper (Ilford, South)

They have their lives to live in the same way as anyone else.

Mr. Houghton

The lengths to which some people go to save their lives suggest that they attach great value to them and I am sure that, were the choice put before them that they should pay a higher contribution to the Health Service because of their more valuable lives which they have to save, they would be in agreement with it.

I do not think that there is anything in the objection to graduated contributions on the ground that one can provide only flat-rate benefits. It is unsound and, in any case, it conflicts with the general approach to progressive taxation; and the agreed contribution can be either progressive or proportionate. Here again, I think that it is largely a question of how big or how small it is.

I have taken up some time in saying this, but I felt that some of these observations, at any rate, were justified, having regard to the subtle way in which the Bill has been introduced, without regard to how it was born; to the need to see the Estimates of the Health Service; to the need to see the shape of the Budget. The Government are just pursuing their policy of last year with no more rational basis to their approach to financing the Health Service than in any other aspect of their economic policy.

6.26 p.m.

Dr. Donald Johnson (Carlisle)

The hon. Member for Sowerby (Mr. Houghton) will excuse me if I do not follow him either into the realms of political polemics or the intricacies of taxation. I think it is possible to state one's agreement with this simple Measure in a few simple words and to get on to the subject which I believe is the most important in the present debate, that is, the tone set by my right hon. and learned Friend when he discussed possible economies which might be effective in the Service. Obviously these things have to be paid for and as a general principle I consider it is all to the good that they should be paid for in as direct a form as possible.

I wish to express my pleasure at the tone set by my right hon. and learned Friend when he discussed the Service on broad lines with particular reference to economies, and I hope that I may be permitted to follow him on those lines. We can accept his explanation of the inflationary nature of the increase in the cost of the Service in recent years, or, at least, that it is mainly of an inflationary nature. But the main miscalculation in the cost of the Service seems to have occurred prior to that. The fundamental confusion that occurred is one that was mentioned in the debate last week. Whereas the original estimate of the cost of the Service in the Beveridge Plan was £170 million, the actual cost in the first year of working was no less than £450 million, or over twice as much as the original estimate. It was this basic fact together with the further yearly increases that led to the appointment of the Guillebaud Committee.

I differ from many hon. Members, particularly hon. Members opposite, when I describe the Guillebaud Report as one of the most disappointing documents of recent times. The fault of the Guillebaud Report was that it failed, or so it seems to me, to see the wood for the trees. The fault lies in that it looked at the details and failed to consider the fundamentals of the Service. The mistaken approach was that it looked at the Service as a fixed one instead of at the possibility of it being operated in a more flexible way.

In the debate last week my hon. Friend the Member for Cheadle (Mr. Shepherd) suggested that there was nothing sacred about preserving the original pattern of the Service. He said that in reference to finance, but I repeat it in reference to the structure of the Service. In considering the question of economies I should like my right hon. and learned Friend to look at the entire Service in that way. One thought occurred to me as I considered the difference between the two figures I have quoted. How much of this miscalculation was due to failure to realise the value of voluntary service in respect of our hospital services?

One of the features of the changeover in 1948 was the complete writing off from any basic point of view of the voluntary services which had been given in connection with hospitals. The result has been that this immense fund of local good will in connection with hospitals, inasmuch as it has been made use of at all, has been sidetracked into trivialities and inessentials, such as radios in the wards and seats in hospital grounds. I appreciate that this attitude may seem old-fashioned, but one cannot help feeling that some of that good will might in other circumstances have been used in the manner mentioned by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) for constructing new hospitals. Can my right hon. and learned Friend look at that point to start with, and see whether the scope of the voluntary service can be extended in some more fundamental way to give help to our hospitals?

The second point I wish to stress, at the risk of repetition, is that economies do not necessarily mean decreased efficiency. Frequently we can have wasteful expenditure and inefficiency going together. The converse is also true. That is why I particularly welcomed what we were told today about the initiation of the organisation and methods department relative to the financing and administration of hospitals.

I should like to know if one particular point comes within the scope of that work. That is the question of the changing pattern of disease which has been taking place in the last few years. As we well know, fever hospitals and T.B. hospitals are closing down for want of patients. The same is starting to happen with children's hospitals. As opposed to that we are getting more demand for hospital services for the elderly, not only in mental hospitals, which we have discussed previously, but also in general hospitals. I had something of a shock when I was told that in the district in which I am living the average age of patients in the men's surgical ward of a hospital at that time was no less than 74. The fact is that the elderly are not only crowding our mental hospitals, but our general hospitals at the same time.

Is my right hon. and learned Friend keeping track of this changing pattern? I know he is familiar with it, but is he taking action quickly enough to make the necessary economies as it is taking place? One can see in Oxford that an old fever hospital is being used very efficiently in connection with the geriatric unit, but is this adjustment taking place quickly enough generally to make appropriate economies? What brings this particularly to my mind is that I know of one children's hospital which quite definitely is under-employed at present. I will give my right hon. and learned Friend its name by correspondence.

I come to the question of the divisions of the Service. The Minister is quite familiar with the fact that he has not one Health Service, but is working three separate services at the same time. That is one of the main problems confronting him. As a general principle, we can say that nothing is more wasteful than duplicated administration. It not only creates duplicated work, but frequently creates further difficulties when disagreements arise, as they frequently do, in the different branches of administration. If my right hon. and learned Friend is not familiar with the problem, I can assure him that the medical profession is by no means immune from such disagreements.

We have to pay tribute in a debate such as this to the increased efficiency brought about by the Service in many spheres. But in one respect the changes made in 1948 were of a retrograde nature rather than a progressive nature, in the creation of yet a third division of the Service by separating hospitals from local authorities on one hand, and, on the other hand, from the general practitioner system after the manner in which the voluntary hospitals had worked in close association with general practitioners. The slogan "Passed to you" does not only apply to Whitehall. Speaking as a poacher turned gamekeeper, I can assure the House that there are few greater reliefs to the medical practitioner than to be able to pass over difficult cases to the responsibility of someone else, clear one's conscience, and feel happy about it. That is exactly what is happening at present in the Health Service with the load put on to hospitals, on the one hand, by local authorities and, on the other, by the general practitioner service. This fact is creating the load on the hospital system, which probably has been the most prominent feature of the development of the Service in the last ten years.

As I mentioned in a previous debate, these institutions appear to have acquired a dynamic of their own. Although they take the load, very often they increase it themselves by telling out-patients to keep attending when they could well go back to their general practitioners. I ask my right hon. and learned Friend to make a special study of this question. I am quite sure that for a fraction of the cost of building new hospitals he could get better results from an economic point of view and from the point of view of the Service if this were done.

I particularly welcome the words he spoke about developing the home care of the mentally ill and the aged. In this the Minister is again faced with the problem of the divisions in the Service, because obviously the problem which will be predominant in this new development, particularly in the mental health service and in the Royal Commission recommendations for the development of local authority services, is that of finance. We do not doubt that, taking an overall balance, we shall save a considerable sum of money if we can arrange for both the mentally sick and elderly people to be looked after at home to a greater extent than is the case at present, but the difficulty is that in the beginning it will be the local health authorities who have to spend the money, while money will be saved in an entirely separate division of the Service run by the regional hospital boards. There is no incentive whatever for local health authorities to save money for regional hospital boards, and it is altogether too much to expect altruism of that kind in committees who have their own responsibilities to the ratepayers.

If my right hon. Friend finds these divisions insuperable, as may well be the case, will he look at the possibility of establishing integrated services for mental health and for the aged on a local level, so that we can have a mental health service working as an integrated whole and an old people's service working as an integrated whole, without disagreements between different administrations over the financial and other problems which I have mentioned. Many people say that these things worked better before 1948 when these services were integrated, when local authorities had both home services and hospital services under their own control and when this division had not been created.

Turning to the vexed question of drugs, about which we heard earlier in the debate, I am not competent to pass any opinion on the prices charged. Without an extremely detailed investigation, devoting a great deal of time to it, I think it is impossible to do so. I make only one main point, speaking from a medical point of view. Naturally, I admit the great benefits which have been conferred by antibiotics and other newer drugs. They have changed the face of illness in the treatment of pneumonia, meningitis and other serious illnesses. In the general practice of medicine, however, they have not been used only for serious illnesses such as pneumonia and meningitis. They have also been used for a wide variety of other ills, such as coughs, colds, sore throats, spots on the face and many other troubles which are quite capable of treatment by very much simpler methods. I am not blaming the doctors entirely for this, because often they are faced with patients coming into the surgery with, say, sore throats or tonsilitis and asking to be cured in twenty-four hours rather than have to wait for two or three days.

It is part of human nature, unfortunately, to squander its blessings. That has happened in this instance. The fact that patients have demanded these drugs for trivial complaints has led to unfortunate effects. Taking the picture over a number of years, what has happened is that fresh strains of penicillin-resistant germs and other drug-resistant germs have been created which have led to other complaints no longer being responsive to the simpler penicillins. This has meant that still further antibiotics have had to be developed at still greater expense in order to cope with these new strains of germs. In that way we have created a snowball of expense in the pharmaceutical world and at the same time have brought into existence a very indifferent form of medical practice.

Mr. Herbert Butler (Hackney, Central)

If I have followed the hon. Member's argument correctly, he is suggesting that these new methods of treating illness should not be used. Does he want us to go back to the use of Epsom salts?

Dr. Johnson

I am sorry if I did not make myself clear. I want these drugs to be used for serious diseases, for which they are useful, and not to be used instead of simple drugs. They are used at the moment to cure trivial complaints. What happens is that a doctor uses one of these drugs, say, penicillin, for the treatment of a sore throat, and when the same patient gets pneumonia six months later he finds that a strain of germs has been created which are resistant to penicillin. Consequently, because the patient was treated with penicillin for a sore throat, the doctor may not be able to cure his pneumonia. The hon. Member anticipated what I was about to say. My suggestion is that when every young doctor qualifies he might well be presented with an illuminated address containing the famous words used by the late Lord Horder, that sodium bicarbonate is the most valuable drug in the pharmacopœia. [HON. MEMBERS: "What about Epsom salts?"] They are almost as good.

Before leaving the question of drugs, perhaps to be settled elsewhere, I want to deal with one other point. I do not wish to get on to the rather contentious grounds of private practice in any way as a general issue, but one point arises from this relative to economies in the Service. A feature in recent years has been the development of insurance by people who are willing to pay insurance for the privilege of private beds in hospitals. These are not wealthy people, but people of moderate incomes who are willing to pay the appropriate amount of insurance for such privileges when they are ill rather than spend their money in other ways.

Possibly my right hon. and learned Friend is familiar with this development, and I hope that he will give it his sympathy, not only from a general point of view, but also from the point of view of economy. This may not save the Minister a great deal, but it will create some economies if a substantial body of people are prepared to pay for themselves by insurance and private fee in this way.

I end by asking my right hon. and learned Friend to look at economies in the Service on these quite fundamental lines, and to look at the Service as being of a flexible rather than of a fixed pattern. I am sure that nobody will begrudge extra payments of this kind if they see developments taking place in the manner I have suggested.

6.50 p.m.

Mr. W. Griffiths (Manchester, Exchange)

Many speeches that are heard in this Chamber can be likened to the curate's egg, and I think that the speech of the hon. Member for Carlisle (Dr. D. Johnson) is no exception. With some of the things that he said I would agree, but some of his other points of view I have not heard expressed here for very many years. For example, he spoke about patients demanding antibiotics for trivial illnesses. Is not the real fact that it is the doctor who is the guardian of the public purse here?

I refuse to believe that my constituents are the sort of people who can browbeat their general practitioner into giving them the drugs that they, as patients, think they need. All experience is to the contrary. The layman is generally completely at the mercy of his medical adviser, and is often far more confident in his abilities than I think is sometimes justified by the facts. In this respect, it is the doctor who is really responsible.

The hon. Member concluded by saying, as have other hon. Gentlemen opposite, that these increases were a trivial matter. I thought that the Minister's speech showed quite clearly the influence of his tenure at the Board of Trade. His was a rather statistical presentation. His right hon. Friend the Member for Thirsk and Malton (Mr. Turton) and others all argued that these increases were a trivial matter. Indeed, I was only waiting for someone to say that it was merely the price of one cigarette.

If there is one thing that I am rather fed up with it is that since the end of the war, whenever there is an increase in the cost of living, or whenever the Govern- ment impose further burdens on the taxpayer, someone will say "After all, it is only the price of another cigarette." I should have thought that had a man who smoked 80 cigarettes a day in 1945 heeded all Ministers since then, he would have given up smoking long ago.

Ministers, and hon. Members opposite should not minimise the effect of these increases. Their present level imposes a very heavy burden on very many people. This point was put to me very well by a ticket collector when I was travelling to my constituency quite recently. He said, "Three of us in my family are now paying about £75 a year to the National Insurance Fund. Last week I went to the dentist, and had to pay £4 10s. for a denture. Two weeks ago, my wife went for some spectacles, and had to pay for those."

That railway man was, in fact, answering the argument of the right hon. Member for Thirsk and Malton, who said that the National Health Service content in the National Insurance contribution, expressed as a percentage, is no different from that in the original Act. The fact is that since the original Act came into force, successive Governments—and this one in particular—have, in addition to increasing the contributions, imposed a whole series of charges upon the contributors. My ticket collector friend was putting it very clearly. He was pointing out that although he was paying increased contributions, when he needed to avail himself of certain parts of the Service he had to pay again. That is the fundamental difference between the situation in 1946 and the situation that now exists.

Most of us would agree with what the right hon. Member for Thirsk and Malton had to say about the need to increase capital expenditure on hospitals, but did he not rather minimise the fact that in the immediate post-war years, immense strains were placed on the building industry as well as upon Government finances? In the conditions prevailing in the early post-war years, I think that it was legitimate that the hospitals should not have been put at the top of the priority list. However, that time has long since gone, and I agree that we have now reached a stage when considerably more money should be provided for this purpose—

Mr. Turton

My point was not that they were not in the forefront of the queue, but that they were not in the queue at all. I am sure that had it been left to the choice of the ordinary citizens, they would have put the hospitals first.

Mr. Griffiths

I am not so sure of that. I think that then, as now, most of my constituents would have put housing first. But I agree that more money should now be found for this purpose.

When we had the previous Bill before us last year I said that when Ministers—as the right hon. and learned Gentleman did today—talk of an increase in real terms in the National Health Service they are striking a note of optimism that does not accord with the facts. Successive Ministers have found it not possible to provide the money for essential capital works—never mind maintenance—in the hospitals, to such an extent that in some parts of the country the hospitals are literally on the point of collapse.

I can illustrate that by the present position in Manchester, about which the Minister knows. There the physical conditions in our distinguished teaching hospital, the Manchester Royal Infirmary, are, in some respects, worse than they were when I first had to go there with a fractured leg thirty-five years ago. We recently reached a stage in the out-patients' department when the teachers, the doctors, the medical students, the public—everybody who goes to that busiest of all parts of a hospital, the outpatients' department—were obliged to exist in surroundings in which one could see through the walls of the clinics into the street. I am happy to say that the Minister has been able to find the money to repair that department, and that work is to be put in hand. I use that as an illustration of what is happening all over the country. The truth is that the real seriousness of the situation has been concealed.

The right hon. Member for Thirsk and Malton said that there was no question here of panic measures, that the introduction of this Bill was not, as my right hon. Friend the Member for Warrington (Dr. Summerskill) had said, an example of Government panic. Be that as it may, it was only on 6th June, 1957, that the previous Bill received its Third Reading. That Measure increased the Health Service content of the National Insurance contributions, and it is on record that some of us who took part in that debate prophesied that, as a result of the obligations that the Minister had to meet, and could not put off indefinitely, he, or his successor, would soon be asking the House of Commons for more money. So it has proved. The fact that the Minister has had to come back to the House of Commons after so short a time is a clear indication of a panic Measure. He just does not understand the size of the problem.

I will give another example of the mess Ministers get into, and I will take it again from my own city. All the hospitals in a group in Manchester did not know until December of last year what the allocations for maintenance were to be for the current financial year. When the original estimates were put in earlier in the year, the hospital authorities were told that they could not be met and that there had to be reductions in the maintenance estimates. The estimates, accordingly, went back from the regional board to the management committee and to the individual hospitals, which had to face the consequences of these imposed reductions. Matrons received instructions that they should not employ further nurses, that wards should be closed and that inferior foods should be used, for instance, no more butter in the hospital, but margarine instead—a cutting down of the ration scale in general.

This happened in the spring of last year, and at once there was a public outcry because members of the committees who were charged with carrying out these measures objected. Back the matter went to the Ministry, and no cuts in the services were, in fact, made. But this was only because it leaked to the newspapers and it was raised in the House of Commons. Eventually, quietly, in about November or December, 1957, the hospital management committee concerned was informed officially of how much money it could spend in the current financial year. What sort of accounting procedure is that? Is that not an example of panic?

Men and women are asked voluntarily to serve on hospital management committees and other hospital committees, and, as everyone knows, it is becoming increasingly difficult to persuade them to do so. At the same time, they are placed in an impossible situation, charged with these responsibilities, yet not knowing until December of the financial year how much money they have to spend.

The Minister talked about seeing a light at the end of the tunnel, and he spoke, quite rightly, about the changes which are taking place in, for example, the incidence of tuberculosis. We are all delighted to know that we can look forward to relief from this scourge. But, as the demand for treatment of tuberculosis runs down, in the same hospitals rises the demand for thoracic surgery for decreasing the toll of lung cancer. Here, again, I should like to use a constituency illustration. In the entire Manchester region, we have only two operating theatres, one in Blackpool and one in Manchester. I am advised that one of them is not equipped in the most modern way for the surgical treatment of carcinoma of the lung.

The Minister, I know, does not exaggerate the relief which will come to him by the rundown in tuberculosis; as medical science conquers one thing, something else comes along. Now it is chest surgery which is making an increasing demand in the treatment of lung cancer. I am sure that the Minister is not optimistic, but I must inform him that, in these thoracic surgery units in Manchester, there is an alarming delay between diagnosis and treatment of the patient in the theatre. This delay is increasing. I am advised that it is absolutely essential, if a patient is to have a chance of survival in such cases, that there should be the very minimum of delay. The gap is widening. As tuberculosis runs down, the other thing becomes the greater scourge.

I believe that the Minister will have to come back again even if he has his £32 million. However he finances it—we can argue about that—the National Health Service will demand more in the next five years than he has now. He has reached the level of what it is possible to obtain from the wage-earner and employer in the present National Health Service contribution. It will be for this Government or succeeding Governments to think how, as I know some hon. Members are thinking now, the burden of increasing costs can be shouldered. Certainly, the correct way to do it is not to come to the House of Commons again and again and ask that the insured worker shall pay increased contributions. Like my hon. Friend the Member for Sowerby (Mr. Houghton), I believe that it should be dealt with more by direct taxation. But, however it is done, the right hon. Gentleman will be back within twelve months to ask for more money.

7.6 p.m.

Mr. Anthony Kershaw (Stroud)

I cannot, I am afraid, follow the hon. Member for Manchester, Exchange (Mr. W. Griffiths) in his local arguments, but I should like to correct one thing which he said, perhaps by inadvertence. I understood him to say that the present contributions, plus the charges, were much higher than they used to be; even though contributions may be low, other charges have become higher. I think that he is wrong in saying that. It is a fact, as I am informed on quite good authority—my hon. and learned Friend the Financial Secretary to the Treasury said it the other day in debate—that if the charges and contributions are added together, they are still slightly below the 20 per cent. which was envisaged as a proper contribution from the individual. I know that these mathematical formulæ, as the hon. Gentleman said, do not get us very far, but I believe that what I have said is correct.

I have a very healthy respect for anything said by the hon. Member for Sowerby (Mr. Houghton) about taxation, and I should not venture to put my opinion very strongly against his. The hon. Gentleman spoke about inflation. There are two aspects to the problem of inflation which the Government have to meet in this situation. One is internal and the other external. I agree that so far as this Bill, or any other Bill, transfers from one section of the population a payment for services which are, in fact, rendered, it has no disinflationary effect within the country, except in so far as it might withdraw some purchasing power. That is an argument to which I do not attach great faith because it seems always to make the assumption that those who had the money taken from their pockets would otherwise have foolishly wasted it. They might just as well have saved it. One does not know.

There is this further aspect of the inflation problem which I think the hon. Member for Sowerby forgot. What foreigners think of our position in this country is extremely important for the strength of the £. If it becomes clear that the Government are committed to very large expenditures, particularly if those expenditures are not within the direct control of the Government, foreign confidence in our financial position is likely to be sapped, with a consequent harmful effect upon our inflationary situation at home. The extra bill which must be paid, the £200 million of inflationary cost and £80 million in real terms, must somehow be met, and the Government have a very difficult problem in meeting it. These costs are really not much within the control of the Government.

The right hon. Lady the Member for Warrington (Dr. Summerskill) explored various economies which she thought might be possible in the Health Service but, in spite of her great experience in health matters, she was not able to put her finger on any important measure which could make any economy. The only suggestion I heard her make was, of course, her familiar one about drugs. Whether or not any great savings in drugs can be made, I take liberty to doubt.

Every day new, more important and more expensive drugs are invented. As the hon. Member for Manchester, Exchange said, most patients take what their doctors give them, and there is not any great tendency to demand expensive drugs. I believe that the average cost of prescriptions at present is not rising, as the right hon. Lady said, but is falling, and has gone down 2d. or 3d. in the past months. I do not believe that great economies would result, although doubtless some economies could be effected if drugs were more intelligently applied at the moment. The right hon. Lady made other sound suggestions. We all believe in the desirability of having more home helps. We had a debate about that matter the other day and I myself raised it also on the Adjournment. I doubt whether much saving could quickly be made in that respect.

The other suggestion that we had from the right hon. Lady was that we should not have so many part-time consultants. That is an arguable case. Some of us may not agree with it, but, even if we had fewer, I doubt whether larger and more important economies could be made by reorganising the consultant service. The only real candidate for making important economies in the Health Service is the concept of work-study which the Minister mentioned in his speech. No doubt there is something in that, but even there I doubt whether really large savings can be made in a bill which this year stands at £740 million and which, as has been said, is likely to rise yearly. It is the future costs of the Health Service to which we must give thought. My right hon. and learned Friend and the Financial Secretary, when they spoke the other day, thought that we might see a fall in the costs as we started to get the better of some of the killer diseases, in the same way that we have seen ourselves so happily get the better of T.B. I wonder whether that time is yet come. As has been said, as one disease is overcome so another disease seems to become more active.

I now return to what I said to the hon. Member for Sowerby. At the moment, no Government could have the cost of the Health Service under control in the sense that they would know in advance what the cost would be. Having decided the standard of care which should be given—and I do not think any hon. Member in this House or outside suggests that the standard should go down—the costs automatically flow from that standard. Therefore, I believe that no Government ought to show, by putting every increase automatically upon the taxpayer, that they have abandoned control of the Health Service, or indeed of any other expenditure. That would have a harmful effect upon our economic position and upon sterling, and it would not be in the interests of the Health Service or in the interests of any part of the population.

I welcome the principle of the Bill. I do not think that hon. Gentlemen opposite should wax too indignant about it, although it is a very good opportunity for them to do so. After all, the contributions and the charges are now no higher than they were when they were fixed by the Labour Government. Since last year, the National Health Service contribution is not a deductible expense for Income Tax, so that the richer man does not, to that extent, get an allowance towards his payments.

I cannot help feeling that to some extent the Opposition are now attacking measures which they supported when they were in office. Of course, it is against the background of rising wages that this extra contribution has been made. If anybody tells me that an extra charge amounts to the cost of one cigarette a week, or something like that, then I have no sympathy. I do not smoke, and I do not know what is the cost of a cigarette.

We must examine further, therefore, the way in which in future the Minister of Health, whoever he may be, will ask for more money, because this is not the last time that he will do it. The annual wrangle—indeed, it is more than annual sometimes—which we have in the House when charges have to go up in some way or other does not further the best interests of the Health Service. It is true that Parliament must have the opportunity to review expenditure as often as is necessary to exercise some sort of control. As I have been trying to make clear. I would not advocate a policy which took away from the Government the power to control expenditure. That is one of the great weaknesses of the French social service tax—it takes away from the Government power to control what the expenditure on a particular service shall be, and, therefore, makes proper budgeting impossible.

Nevertheless, the time has come for us to inquire more fully than we have done in the past into how annual budgeting can be reduced or how the Government can know in advance, whilst still retaining control over expenditure, what the expenditure will be. The annual method, as my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) pointed out, is also harmful for the long-term planning of any service. Perhaps one of the reasons why the hospital-building programme has suffered in the immediate past is because we have been unable to plan more securely instead of just from year to year.

I am sure that my right hon. and learned Friend is considering this matter deeply. I hope that we shall have the fruits of his consideration before very long and that the system which he recommends will be more adapted to the future long-term progress of our Health Service without necessarily meaning any extravagance. For the time being, I welcome the Bill. It is soundly based and it exerts very necessary Government control in a sector in which it should be exerted, and I hope that it will receive a Second Reading.

7.17 p.m.

Mr. Charles Royle (Salford, West)

I do not know whether the hon. Member for Stroud (Mr. Kershaw) will agree when I suggest that he and I are the only hon. Members who have participated in the debate who have no specialist knowledge of the subject of hospitals and taxation. However, from his speech, I feel that he has some intimate experience and knowledge of the hospital service which I cannot claim. I had some sympathy with the hon. Member for Carlisle (Dr. D. Johnson) when he said that he had no intention of following my hon. Friend the Member for Sowerby (Mr. Houghton) with regard to taxation. I have the same feeling about the details of what we are discussing today. The difference between the hon. Member for Carlisle and myself as far as our professions are concerned is that we have more drastic methods in dealing with our patients than he has in dealing with his. It will be seen that I have not the same intimate knowledge of the National Health Service as other hon. Members who have spoken so far in this debate.

My interest concerns the increase in the contribution. I look at this matter as a representative of an industrial constituency which still contains in its midst many hundreds of poorly paid workers. It is for this reason that I have the temerity to speak in this debate, and in so doing I apologise to the House for my lack of knowledge of the subject in general.

It has been said so many times this afternoon—and all of us agree—that the National Health Service must be paid for. The only difference, apparently, between hon. Members opposite and ourselves is how it should be paid for. The difference between our viewpoints is quite clear. Hon. Members opposite regard this proposed increase as the right course to pursue, while we on these benches believe that the only fair method is that of direct taxation. People of greater wealth, approaching this matter purely and simply from the point of view of the contributions, are looking at it in a very selfish way. Surely, if anything at all could be regarded in a community sense, it is the health of the people. I should have thought that it was a privilege for people with high incomes to play their part in seeing that the health of more unfortunate people was properly safeguarded, automatically leading to the sustenance of the service by direct taxation, rather than making everybody pay an equal contribution, whatever his means.

It is with that high ideal in mind that I approach the matter, because with improved health the whole community benefits. I cannot help but think that in an enlightened nation which believes in the health and welfare of its people, as we claim to do, and which believes in the Welfare State as we do, that is the only possible approach. That is the way in which we should deal with the problem in these more enlightened days.

There is a very big difference in principle between the two sides of the House in this matter. I listened intently to the right hon. Member for Thirsk and Malton (Mr. Turton) when he was telling us about the method of payment for health services in Germany, for example. He told us of the proportion of hospital and medical costs paid by the patients themselves. That is the difference. We believe that this is a service which should be borne by the State and, therefore, by the taxpayer.

I would remind the House that when we were discussing this matter in 1946—and there are one or two hon. Members on the benches opposite who were here in 1946—hon. Members opposite never really believed in this scheme as we did. During the Second and Third Reading debates hon. Members opposite voted against the principle of introducing a great National Health scheme. It is all very well for them to excuse themselves by saying that they wanted time to examine the Bill in Committee in order to make it a better Bill. That excuse falls completely by virtue of the fact that they voted against both the Second and Third Readings of the Bill in 1946. That difference in approach is still exemplified by their attitude to the proposed increased contributions in order to pay for any extra costs that the Health Service may incur.

When I decided to try to catch your eye, Mr. Speaker, it was in order to make a specific point on the question of contributions. My right hon. Friend the Member for Warrington (Dr. Summerskill) was referring to a conversation which she and I had had when she was interrupted by the hon. Member for Leeds, North-East (Sir K. Joseph), and she never got back to her point. I said at the beginning of my speech that I was concerned about the question of contributions because of the constant increases. In two months' time we shall probably be discussing the Finance Bill, and from both sides of the House Amendments will be moved asking the Treasury to forego various taxes. I can hear the representatives of the Treasury saying, "It is all very well for hon. Members to say that this would cost only £800,000, and that that would cost only £2½ million, but those figures keep mounting up." The same consideration is in the minds of the workers of this country, and particularly the low-paid workers.

It is not many weeks since we were discussing an increase in the contribution, and here before us today is this further proposed increased of 6d. The point which my right hon. Friend the Member for Warrington intended to make was this. Whilst these increases affect many people very seriously, there is another class of person who is hit even harder. I confess that this class of person has only recently come to my mind. I refer to apprentices.

Earlier this week I received a letter from a young man in my constituency, 18½ years of age. He is apprenticed in the electrical industry, an industry which is of great importance to us. He is the only child of a widowed mother. He has been apprenticed to a very good trade, and at the moment his income is less than £5 a week. Because he is over 18 years of age he has to pay the full contribution of 9s. 11d. a week, after this Measure becomes law, out of that income of less than £5. That income has to help to maintain his mother as well as himself. He has undertaken this apprenticeship to give him a worthwhile future, but because of these increases he is having to consider ending that apprenticeship, in which case he may have to go into some dead-end occupation where at the moment he would be receiving a higher remuneration. Sixpence does not sound much, but this is one of those cases where it means a good deal.

I know that under the terms of this Bill it is impossible for the right hon. and learned Gentleman to consider the whole gamut of contributions—National Insurance as well as National Health—but when future amending legislation comes along the Government might well see whether consideration can be given to young apprentices between the ages of 18 and 21 so that their contributions shall be less than those of people receiving higher wages, over the age of 21, when apprenticeships have terminated. That is a simple point, but it is one which has been neglected.

We rightly think of widows, family men and the like, and of how these additional contributions bear heavily upon them, but the effect on apprentices after they reach the age of 18 is very serious indeed, and I suggest that the matter could be reconsidered without involving the country in much cost.

That is the detailed point which I wanted to make, but that does not alter the fact that this Measure will impose an increased burden on many thousands of people. The Government's approach to this problem is wrong. It should not have been tackled by means of increased contributions. My right hon. Friend the Member for Warrington gave some practical illustrations of how money could be saved on the National Health Service. We all know the tremendous truth of what she said. When I recall what I have noticed in the way of drug purchases and prescriptions, it seems to me quite crazy that we should not be able to save millions of pounds a year in that connection.

If these economies could be practised and if we approached this matter entirely in the light of taxation, we should be adopting the best possible means of tackling this problem. The Government are making a mistake in adopting the means proposed in the Bill, and I support the protests made against it.

7.31 p.m.

Sir Hugh Linstead (Putney)

I am sure that we have all listened with attention to the sincere and moving speech of the hon. Member for Salford, West (Mr. Royle). He has issued a challenge to us on both sides of the House. He would probably agree that it would be a fair summary of what he has said if I put it in familiar words, and said that "From each according to his ability and to each according to his need" is the way in which the National Health Service should be run.

Mr. Royle

That is very sound gospel.

Sir H. Linstead

That is a challenge to me and my hon. Friends which we must face, and I hope, towards the end of my remarks, to try to meet that important issue which the hon. Member put quite clearly before us.

Before I do that, as one who was in the House at the time when the National Health Service Act was passed and who remembers the discussions at that time, I think it is worth while putting on record an error in the historical reference which the hon. Member made to the passing of the Act. I am sure that I have his words right. He said that the party on this side of the House voted against the principle of a national health service. That statement contains an error which needs correcting. The principle of a comprehensive, universal National Health Service was sincerely accepted by the Conservative party in those days and was embodied in the Willink White Paper.

Mr. Royle

I should not like it to go on record that I suggested something which is not true. We have always understood, in the course of our work in the House, that the issue of the principle of a Bill arose on Second Reading. Therefore, if hon. Members opposite at that time had thought fit to do what the hon. Member is now saying, they should have voted for the Second Reading and attempted in Committee to put right those things which they thought were wrong.

Sir H. Linstead

I am extremely sorry that the hon. Member should have taken a purely party political point about this, because, in fact, the 1946 Measure was not a Bill which was capable of being amended at any stage. The hon. Member has only to think of the Opposition at that time, when there was a majority of over 200 on the Government side. To say to us that we should have accepted the Second Reading of the Bill and sought to amend it in Committee is not quite worthy as a political argument. However, the point I want to make for the record is that the principle of a comprehensive and universal Service was embodied in the Willink White Paper. We voted against a Socialist Bill and not against the principle which was embodied in that White Paper of ours.

I was glad to hear from the speech of my right hon. Friend the Minister of Health the report which he had to make on the progress of the Health Service. In spite of party differences, good feeling about the progress of the Service is shared on both sides of the House. I also think that on both sides of the House we recognise that, inevitably, the cost of the Service will increase, for various reasons and in various ways, and that, inevitably, the Minister must come to the House and ask for more money ad hoc, or must persuade the Treasury to take more money out of the country's general funds.

It is very important that those who work in the Health Service should not work under a perpetual cloud of economy and of scraping and making-do with second best. It takes the heart out of the Service if perpetually that is the atmosphere in which those engaged in it have to work. Therefore, it is inevitable, and I do not complain about it, that the Minister has to ask for more money, as my right hon. and learned Friend has to do now.

The problem between us is the problem which the hon. Member for Salford, West put. It is the problem of out of whose pocket we take the money to pay for the Service. It is important to remember that the scope for economy now is very limited, according to my knowledge and experience. In the first three or four years it was possible to squeeze economies out of the hospital service. When the hospitals were first taken over by the Ministry, control was loosened. Wise hospital administrators who foresaw the future made hay while the sun shone. One was not surprised to find expenditure on the hospitals soaring in those early days.

Since then, control of one kind or another has been applied to the hospital service. In the last year or so individual management committees have been overspending on their budgets, whereas in previous years, on the whole, they got by, That is a fairly clear indication that there is not much economy to be squeezed out of the Service now.

The right hon. Lady the Member for Warrington (Dr. Summerskill) raised a point which she perpetually is hammering in the House—the question of economies in drugs. She did far less than justice to those negotiations which have been stimulated by the Committee of Public Accounts over four or five years and which have been going on between the accountants of the Ministry of Health, no doubt with experts from the Treasury, and manufacturing organisations.

When we find that representatives of the Ministry of Health and the Treasury have come to an agreement with the manufacturers, which they can report to the Minister and which he can report to the House as offering a guarantee of fair prices for a period of three years, I should have thought that we could be as reasonably satisfied as it is humanly possible to be that the business is now being conducted between the Ministry and the suppliers on an economic footing.

Dr. Summerskill

The hon. Member always brings up this question, and I understand why. I bring it up because there is gross extravagance. Can he justify an average cost of 6s. for prescriptions and a pharmaceutical bill of £77 million?

Sir H. Linstead

I would justify it, first, by saying that it is what the medical profession has decided it needs to prescribe for the treatment of its own patients, and, secondly, that if there are economies to be made the place to which the right hon. Lady has to look for them—the place where the tap can be turned off, if it has to be turned off—is among the members of her own profession. There, at any rate, we have a hand on a tap capable of controlling it.

I was in Canada in the autumn of last year, and was able to make a comparison of the average cost of prescriptions in Canada, the United States and this country. After we have reduced the figures to make allowances for the different levels of prices and the different standards of living in the two other countries, the figures are 15s. for Canada and £1 in the United States, as compared with our 6s. I know that these seem to be frightening figures, but they are, in fact, the figures which, in those two countries, represent what a general practitioner finds it necessary to prescribe for his patients. If these figures are to be the yardstick, the 6s., contrary to the view of the right hon. Lady, seems not an unreasonable one.

The problem with which we are faced is from which pocket are we to take the extra money which, today and tomorrow, I suspect, the Health Service will need. Nobody has suggested that there should be an increase in charges. Therefore, we are faced with the alternative either of taking it from the National Insurance contributions paid by the man or woman while he or she is in productive employment and full earning capacity, or taking it from the general national taxpayers' contributions.

It seems to me that the question which this dilemma puts before the House is this: can this country, in present circumstances, in any section of our national economy, afford unlimited facilities paid for out of Treasury money? We have to remember that half the cost of the Service is attributable to the hospitals, virtually the whole of which service is free and the cost of which is paid for out of Treasury money. Are we, or are we not, prepared to say that there is some part of national expenditure which should be free of control from this House and should be available to the taxpayer at his will and wish?

I do not think that in the present economic state of the country it could be allowed that any service should be able to run completely away without a ceiling put on it, either by way of Treasury dictate, as was done first by the Socialists and later by ourselves, or by a scheme which provides for increasing the contributions as the costs go up. This must be related, as the hon. Member for Sowerby (Mr. Houghton) related it, to the general economic situation of the country, and I do not think that the general economic state of the country really permits some part of the national expenditure to be unregulated and without any limitation or control at all.

I would call in aid there the excesssively heavy charges which are to fall on the National Insurance Fund in future years. We here are inclined to think of the National Insurance Fund as solvent. It is very far from solvent. The House will remember the White Paper circulated in November of last year, in which the future commitments of the National Insurance Fund were set out. That White Paper makes it clear that in 1960–61 the taxpayer will have to find £126 million for paying retirement pensions, unemployment benefit, and so on, and that by 1979–80, the taxpayer will have to find £475 million for the deficit on the National Insurance Fund.

Against that background, I do not see how we can say that the Health Service is free to take in Treasury money without any limitation at all. At some time, some Government will have to look ten or fifteen years ahead and keep the National Insurance Fund, and, incidentally, the taxable income of the country, sound. Somebody will have to have the the courage to do it; otherwise, we shall be leaving it to the future in the most irresponsible way.

The final point I want to make is that we are here challenging an assumption in the Beveridge Report which was very dear to many of us at the time when that Report was published. I think we called it Assumption B. It was that there was to be a National Health Service, "universal and comprehensive," I think Sir William Beveridge called it, which was to be available without any charge on the National Insurance Fund. There was also another assumption, called, I think Assumption A, which was that there were to be family allowances to be paid by the taxpayer without any relationship to contributions. Alas, as time has passed it has been shown that these two assumptions cannot be valid in the economic circumstances in which the country finds itself at present.

I remember a meeting upstairs at which my party discussed the whole question of the cost of the Beveridge Report. The Chancellor of the Exchequer of that time, the late Lord Waverley—Sir John Anderson, as he then was—said to us with great firmness and sincerity that, on the figures as presented to us, he saw no reason why the country could not afford all that was implied in the Beveridge Report. On those figures, I for one gladly wished to see a universal and comprehensive National Health Service introduced.

Unfortunately, those figures have been proved to be fallacious, and, to my regret, I do not now see how it is any longer possible to fall back on that assumption of Beveridge that the whole of the Health Service can be carried on Exchequer money. Therefore, a system such as this has to be introduced and has to be pursued, I feel certain, if we are to get the extra money which we all want for a service of which, on both sides of the House, we are extremely proud.

7.49 p.m.

Sir Leslie Plummer (Deptford)

It is always a pleasure to listen to the hon. Member for Putney (Sir H. Linstead), because he speaks with technical knowledge which commands the respect of the House, and particularly when he is speaking from the depth of his own experience. I am sorry that on this occasion I have to disagree with him on a political point, without making the party political point which he accused my hon. Friend the Member for Salford, West (Mr. Royle) of making.

Starting off from the hon. Member's premise that we all agree that the National Health Service should be based on the principle "From each according to his ability, and to each according to his need", I think that the argument which he then advanced about the money coming out of the pockets of the patients, as it were, instead of out of general taxation, contradicts his own thesis and what is Socialist doctrine"—From each according to his ability, and to each according to his need."

Listening to the hon. Gentleman, I was worried, as I have been for some time, as to whether we can equate the health of the nation any longer with the National Insurance Fund. My hon. Friend the Member for Sowerby (Mr. Houghton) put the point about meeting the increased costs of the Service from general taxation, and for the life of me I cannot see why that does not appeal to the hon. Gentleman. The health of the nation is a matter which enriches all of us if that health is improving all the time. Every one of us, whether workers or employers, or if we are raising a family, is enriched every time the standard of the health of the nation goes up. Why then should we not all make our contribution on an egalitarian basis towards this?

Sir H. Linstead

The point I was trying to make was that we cannot, unfortunately, isolate the National Health Service from the general economic and finan- cial situation of the country. That is why, as I developed my argument, I came down in favour of increasing contributions as costs went up.

Sir L. Plummer

I accept that, but there are a lot of other things that are being supported out of the national economy which are ridiculous compared with the needs of the National Health Service. I do not believe we can have a viable economy in this country, that we can have increasing production, that we can have an increase in the amount of wealth produced, unless we have a healthy, invigorated population; in other words, unless the stock we are producing becomes better and better with each succeeding generation. Therefore, this is all to the national benefit.

I put this point to the hon. Gentleman: we are not dipping into everybody's pocket alike. The agricultural workers in the village in which I live feel by their 6d. an impact infinitely greater than the engineers in my constituency, because the percentage increase on the farm workers is much higher than that of the man earning between 50 per cent. to 100 per cent. more.

In time, as our civilisation progresses—if it is not blasted by a hydrogen bomb in the next few years—we shall come to the decision that we must regard our Health Service as something which holds a unique position in the economic life of the country, and that it must have more consideration than it is having at the moment both as to the resources we devote to it as well as to the direction of its efforts.

Sir H. Linstead

May I put a question to the hon. Gentleman? Does he or does he not advocate a ceiling on National Health Service expenditure?

Sir L. Plummer

I speak for nobody but myself, but the answer is, no. The Health Service I want to see in this country is what the nation needs, and the nation may need a different expenditure at different times. For example, if plague were to return to this country and it was found that it cost £5 to cure everybody or to give every one injections against it, would the hon. Gentleman say that could not be done because there was a ceiling on the Health Service? Of course he would not.

It seems to me that what we ought to do is to take from those according to their ability and give to those who need the service. This, it think, is the fundamental difference between us. There has been in the course of this debate much discussion about the necessity for economies, and I know that my right hon. Friend the Member for Warrington (Dr. Summerskill) has made a powerful case about a great deal of expenditure on the Health Service that need not occur. Particularly she made reference to the amount of money spent on pharmaceutical products.

The other day I heard of a lady who had a row with her husband and took 45 Aspros. Whether she did it seriously or as a gesture, I do not know, but fortunately they did not kill her. I asked her husband where she got the Aspros from, and he told me she got them from the doctor and that he had prescribed them for her. I said, "If she is going to commit suicide this way she should take Boots' ordinary aspirins, because they are a quarter of the price."

These ridiculously priced medicines and drugs which are inflated in price because of the amount of salesmanship and advertising spent on them, are the cause of so much money being spent. I do not want to get at odds on this issue with my right hon. Friend or with the Chancellor of the Duchy of Lancaster, but I am getting a little tired of the argument that we cannot do anything about this because the doctor must be left free to prescribe.

This argument now means that American pharmaceutical firms in this country are standing outside the medical schools waiting for chaps to graduate and giving them £1,500 a year and a motor car and telling them to go around selling tranquillisers and products of that kind to such a degree that our prescription costs go up. I am hoping that the Consumers' Research Council over here will do some work on the line of the Consumers' Union in the United States, in trying to give information and advice to the doctors about the danger and the expense of these products. I hope that such an organisation will have the assistance of the Ministry, because if we continue with the argument that we must not interfere with what the doctor prescribes there can be no ceiling on prescriptions at any time if the medical profession is irresponsible.

Finally, I want to put one point seriously to the Chancellor of the Duchy of Lancaster because it concerns economies in the Service. In my constituency of Deptford, we have a London County Council lodging house which houses between 500 and 600 men itinerant workers in London. Some work at the docks, some are seamen coming in from the ports, some are migrant workers of one kind or another.

One man who uses that hostel is an infectious tubercular sufferer, if that is the right phraseology. He has tuberculosis, and he can transmit it freely and easily to other people. Now and again he goes into hospital for some treatment and is kept alive as a result. Then he gets bored with it and leaves the hospital, where nobody can keep him. He goes to a cinema or into a public house and drinks from glasses which are then presumably used by other people. Then he goes back to the L.C.C. lodging house and sleeps in dormitories with other people. Then he disappears altogether; no one can find him; and then suddenly back he comes again.

This man is a walking menace to the health of the people with whom he is in contact Heaven knows how many he has already infected and put on the National Health Service. The tuberculosis officer for my constituency, Dr. Rigby, very worried about the situation, took it up with me, and I took it up with the right hon. and learned Gentleman the Minister of Health. He told me, and I paraphrase what he said, "It is perfectly true that there is a law under which this man could be confined, but nobody ever does anything about it, so we cannot do anything." So this man is free to roam about the country—

Mrs. E. M. Braddock (Liverpool, Exchange)

I would point out that under Section 172 of the Public Health Act the medical officer of health or the tuberculosis officer can ask the court to insist that the person remains for treatment over a period of three months, which is renewable. I would imagine that any medical officer of health or person responsible, knowing the situation, would take action. We certainly do in Liverpool. So it is no use saying that there is no power to insist that the man takes treatment to prevent him infecting other people. There is power, and it is for those responsible to use the power.

Sir L. Plummer

All I am saying is that there was no power to keep him in hospital when he was being treated, and in the Minister's letter, of which, no doubt, the Chancellor of the Duchy of Lancaster will have a copy, the Minister says that although there are powers which can be taken they are very limited and it is very difficult to do anything about such a case. At any rate, the net effect is that this man is free to carry the germs around with him wherever he goes.

I remember that when I was once in New York there was a girl called "Typhoid Mary" who went around giving people typhoid. By some ordinance of the New York City Council, she was confined in isolation on an island in New York River—on Governor's Island, or one of the others. This woman was so dangerous that the authorities were constantly tracing her as a carrier. Here is a man in my constituency who is a carrier and, despite what my hon. Friend has said, there seems to be nothing that we can do about it.

One way of saving money, a very small but nevertheless necessary way, is to see whether the powers to which my hon. Friend has referred could be augmented, or whether the Minister could, by circular, remind local authorities of their responsibility, authority and power in matters such as this to prevent this sort of thing occurring in any other part of the country. That is a very small point to the Minister, but it is a very serious point to my constituents and that is why I have raised it.

8.2 p.m.

Mr. Brian Harrison (Maldon)

I am sure that the hon. Member for Deptford (Sir L. Plummer) will forgive me if I do not follow him through the more economical ways of committing suicide and into methods of dealing with the plague.

Although nobody likes a Bill which increases a charge, the most encouraging thing about the Bill is that although the cost of the Service has increased, that has not been due entirely to inflation, but to improvements in the Service. While more money has to be found to maintain the Service, the proportion of the contribution to income, which is similar to that which was recommended in the Beveridge Report, should be maintained. I am certain that this method of increasing the contribution is far better than some of the other suggestions, such as cutting the Service, paying a subsistence cost for hospital beds, or paying when one goes to the doctor. It is eminently desirable that the charge should fall wholly on people when they are well and that when they are ill there should be only a small contribution for the goods which they need.

Speakers from both sides of the House have agreed that we are nearing the stage when we cannot make the contribution any higher. We have heard much about the proportion to average industrial earnings, but it follows that half the community receives less than average industrial earnings from the mere fact that they are average industrial earnings. There is a largish group of people on small fixed incomes who do not have an opportunity to increase their earnings, but who still have to pay their contributions. In particular, I am thinking of clergymen who have to pay a self-employed person's contribution every week, but who have not had an increase in their stipends in any way comparable with the general rise in wages and who, in most cases, are prohibited by their calling from doing other work.

It would be a very good thing if an inquiry, such as that suggested by my right hon. Friend the Member for Thirsk and Malton (Mr Turton), were instigated to consider methods of financing the welfare services. There is a definite advantage in people realising what amount of the national product has to go to welfare services, and there is a very good case to be made for a social service tax to be run in much the same way as P.A.Y.E. This is obviously too wide a subject to discuss now, but it is one which must be considered in considerable detail.

Another suggestion has been a payroll tax, that is, a tax on a fixed percentage of a payroll above a certain figure paid each week by an employer. The trouble about that tax is that although employers would pay it, self-employed men would not, and it would be a disincentive to employers to pay bigger wages. Another objection is the fact that a large proportion of the community would not contribute to it, and that is probably the factor which rules out such a suggestion.

So much for raising the money. Now for spending it. I imagine that every hon. Member—and there are many hon. and right hon. Members who serve on hospital management committees—will agree that they all think that they would make a better Minister of Health than the current Minister. Looked at from a hospital management committee level, every Minister of Health appears as a bogy of sorts, no matter what his party. From that level, there seem to he two or three economies to be made, and made with considerable advantage. I agree that there is nothing which will produce a startling economy in the Health Service or in its administration. By increasing the efficiency of various sections of the Service and by cutting unnecessary expenditure and waste here and there the general level of expenditure may be held, but we shall not get anything very startling.

I wonder whether we could go into the question of the general administration of the Health Service rather in the way that Messrs. Marks and Spencer have just gone into the general administration of their stores. They have managed to reduce their costs considerably by the extensive use of organisation and method investigations. I was specially glad to hear my right hon. and learned Friend say that he was going ahead with the organisation and method branch, although he had not quite decided how it would operate. I suggest that it should do so with the greatest possible independence, within the Health Service, and also that when it takes on a job it operates in the widest possible field. So often when organisation and method people investigate one section of a hospital they cannot reap the full benefit of their discoveries.

Lest anybody should think that works-study or the introduction of organisation and method leads to a cheapening or falling off in the Service I would hasten to assure them that the experience of one hospital of which I know—and it is not the one upon whose management committee I happen to serve—has been that through organisation and method investigation doctors have been less tired and have consequently been able to provide better treatment for patients. That has gone on throughout the hospital. It is a benevolent and not a vicious spiral, and it has been brought about through investigations into organisation and method.

I should like to make one or two small points on the subject of finance. I am no financial expert, but in my little experience I have never struck anything quite so wasteful as the minor capital works programmes which have to be completed by 30th March, or whenever the accounting period ends. I realise that it will probably take a hydrogen bomb at the Treasury to alter the system, but I am sure that nobody who has served upon a hospital management committee can fail to have had experience of a region saying, "We can have £1,000 to carry out certain works, but it has to be done by the next few weeks."

Most hospital management committees are becoming trained in this matter, and they keep a list of vitally important jobs for which they have not received allocations. In that way the money is used fairly reasonably and effectively, but the time limit which is imposed for the spending of the money is often so short as to necessitate committees taking on projects that are not essential, merely for the sake of spending the money offered. I hope that if we drip away long enough on this aspect of the question some method will be devised of carrying forward a credit so that a bigger sum can be built up to carry out a worth-while project.

I want to make a suggestion in regard to hospital buildings and capital works. I wonder whether we are not building too much for the future. During the debate it has been said that one of the chief troubles is the great barn-like structures of hospitals built 100 years ago which we have inherited. There is a very great danger that we shall be building hospitals which, in forty or fifty years' time, will be regarded as just as inconvenient as the hospitals built 100 years ago are regarded now.

I suggest that non-traditional types of building might be considered for many hospital works. I know of one case where about £25,000 has been spent in the building of one operating theatre. When the equipment and the theatre lay-out have become obsolete the building will still have another fifty or sixty years of life ahead of it, and it will have to be improvised for something else, whereas it could have been built very much more cheaply without being any less efficient.

I know that farm buildings are not comparable with hospitals, but I am told that certain successful farmers have fires throughout their buildings every twenty years. Many of our hospitals would suit us much better if, through being built non-traditionally, they could be scrapped from time to time and rebuilt. That would be better than spending a lot of money in rebuilding very solid white elephants, for which the people who will have to run them in future will curse us.

Mr. Sidney Dye (Norfolk, South-West)

Will the hon. Gentleman specify the farmers who manage to get their buildings burnt down every twenty years and then rebuilt at somebody else's expense?

Dr. Summerskill

And the name of the insurance company.

Mr. Harrison

I made no mention of their being built at somebody else's expense.

Mr. Dye

It is no use burning them down unless they can be built at somebody else's expense.

Mr. Harrison

The hon. Member will find that he can write them off in ten years' time quite simply, if he studies his tax procedure. I will give him a little lesson on taxation afterwards.

By altering the time limit in regard to minor capital works programmes, by carrying out non-traditional building, and by going ahead fast with the development of organisation and method teams throughout the Health Service, the whole Service, including the hospital service, can be improved. I feel sure that the additional money which is being found by way of the Bill will be of benefit to patients who are receiving attention under the Service.

8.20 p.m.

Mr. Harry Randall (Gateshead, West)

I wish to apologise to the Minister and to my right hon. Friend the Member for Warrington (Dr. Summerskill) for not being present when the debate opened, but I was engaged on a Committee in the House and it was impossible for me to be present.

The hon. Member for Maldon (Mr. B. Harrison) will want to take my hon. Friend the Member for Norfolk, South-West (Mr. Dye) on one side and impart to him some of the secrets of taxation. I was glad to hear that there are hon. Members opposite who feel that we cannot push up the Health Service contributions much further. That is a most helpful attitude of mind and I hope that it will be demonstrated during the discussions on this Bill. I am sure that when the hon. Member referred to the examination of the Health Service and mentioned Marks and Spencer he did not want a Health Service on the cheap.

Mr. B. Harrison

I certainly did not, and I should like to make that clear. But Marks and Spencer did use organisation and method teams and quite a lot of work and study was carried out in connection with that store. It has also been proved in a hospital not far from here that even though organisation and method investigation may result in cheaper service—do not let us object to it on that score—the hospitalisation is better.

Mr. Randall

I do not wish to do the hon. Gentleman an injustice. May I remind him that an exhaustive inquiry was carried out by the Guillebaud Committee and that the Health Service emerged with flying colours. Others may have thought that there would be a different kind of Report, and might even have been looking for one. But the thorough examination by that Committee showed that there were economies being carried out in the Service and that a good service was being given. Another important Committee, the Select Committee on Estimates, has recently examined the Service and a similar Report has resulted. I do not object to inquiries into the Service, because I think that it can hold its own.

The Bill proves that all the fears and suspicions which we entertained when discussing the National Health Service Contributions Bill last year were justified. When the first suggestion of changing the method of contribution was introduced we suspected that it would not be the last time that an increase would be made in the contribution. Now that Bill has become an Act and it has opened the door to the possibility that every year there is a good chance that the flat-rate contribution for the Service will be increased. During the debates on that Measure we were told from the Government benches that the flat rate contribution would bring stability to the income of the Service. Of course we wish to see stability in the finances of the Service, but at what price to the contributors? It looks as though that stability will be achieved by the contributors having to pay.

I am certain—and this was referred to by the hon. Member for Maldon—that it is impossible for the flat rate contribution to be extended indefinitely. Beveridge gave us several warnings about the need to avoid inequalities in the scheme, and this idea of the flat rate contribution with a gradual increase is clearly introducing inequalities which affect the lower-paid workers. It is also clear that the Government intend to carry on with this idea. I am amazed that nobody asks that this sort of treatment should be administered to education and defence. The economic situation of the country remains the same whether this idea he applied to health, education or defence, and there seems to be no argument—

Mrs. Harriet Slater (Stoke-on-Trent, North)

Does not my hon. Friend realise that the Government are endeavouring to apply this to education by means of the Local Government Bill and their economy circulars?

Mr. Randall

I do not disagree with my hon. Friend. The minds of people in this country have been conditioned so that more and more they have to bear the responsibility of the peculiar economic policy of the Government.

To me it seems all wrong that when the country is facing the present economic situation as a result of the activities of a Tory Government, it should be the contributors to the Health Service and to National Insurance, particularly the lower-paid workers, who should bear the heaviest burden. I am not convinced that this approach of the Government to the financing of the Health Service is in the best interests of the Service or the nation.

In an earlier debate we were told by a Government spokesman that this principle of payment was to relieve the taxpayer. That statement was incomplete. It is also to increase the burden on the contributor which it would seem must fall more heavily on some than on others. I complain about this Bill, as I do about the one which preceded it because they are a means of conditioning the minds of the people to accept the beneficence of the Government to relieve taxes and taxpayers and only later will a substantial section of the community find itself the victims.

I am reminded that we had something of this kind in 1949 and 1950. There was at that time a suggestion that the food subsidies were perhaps not the right way to cushion problems of the cost of living. Propaganda went on until, gradually, even the worker and the housewife became convinced that after all it was in their best interests that the food subsidies should be taken away. Quite a number fell for that only to find later that they were the victims. Here, again, we are finding the same sort of thing happening. It is a conditioning of the mind of the people that it is better not to pay these things by taxes but by contribution. I believe that absolutely wrong. For the nation as a whole there is a fundamental difference between contributions and taxes.

When incomes are so varied it is inevitable that this Bill, one of a series of niggling Measures adding to a considerable amount, could lead to an attitude of mind which might well shake to the foundations our ideas of the Welfare State. I hope I am not exaggerating. Already there are whispers about the burden of the Welfare State. As each increased contribution comes along it bears more heavily on the lower-paid wage earner. Each week as he draws his wage packet his deductions seem to be on the upward trend. What a tragedy it would be for the nation and its future if in any way, without intention or design, we created an attitude of mind which, because of a personal financial burden, caused any section of the community to demand less activity along the road towards the Welfare State. Because I fear this is happening and because the burden of the costs of the Health Service are being shifted and bear more heavily on the lower-paid worker, I cannot possibly support the Bill.

I do not think there has been any disagreement on essentials in this debate. We are not cutting down or restricting the Service. On all sides, I think it true to say, there is the idea that the Health Service has come to stay. It has to continue and remain a national Service, for the economic value of the Service can never be measured. I am again reminded of the time between the wars when the physical standards of the British people were probably as low as they have ever been. They came under very close examination by this House. I never want to see those conditions again. The Health Service can make a great contribution to maintaining the physical standard of our people. I am strongly opposed to this method of payment. The Bill underlies, continues and perpetuates the flat rate principle. It could lead to the undoing of this great Health Service.

8.32 p.m.

Mr. William Shepherd (Cheadle)

I am sorry I was not in the Chamber to hear the whole of the speech of the hon. Member for Gateshead, West (Mr. Randall), but I have been here for the greater part of the debate. I am sorry I missed the beginning of his speech. Had I listened to that beginning I might have learned why the hon. Member is so upset.

I cannot understand the reason behind the speech of the hon. Member nor behind the speeches of most hon. and right hon. Ladies and Gentlemen opposite. I am told that they fear this as the thin end of the wedge, the end of the National Health Service, and as a sinister attack to be made on standards. That is an awful lot of nonsense. We are restoring the contribution to a level not as high as the percentage to which it was originally put by the Socialist Government. Why that should be represented as having all these sinister implications passes my comprehension. It shows a lot of synthetic fury, if I may talk about synthetic fury in so quiet an atmosphere. I hope that we shall get away from this unreality.

A point I want to deal with is that which was made by the right hon. Lady the Member for Warrington (Dr. Summerskill) about drugs, which was another red herring if I may so describe it.

Mrs. Slater

It is not.

Mr. Shepherd

My hon. Friend the Member or Putney (Sir H. Linstead) very properly said that if there is any reality in the fear that too many expensive drugs are being consumed, there is a direction in which we can turn to obviate it. That direction is the profession to which the right hon. Lady has the honour to belong. I do not say that an effort is not being made in that direction, but I think it proper for the right hon. Lady to turn to her own profession in this regard rather than to Ministers on the Front Bench.

Dr. Summerskill

As the hon. Member always brings up this question, although I do not want to be a little unkind, may I ask whether he has an interest in the matter? Many other hon. Members who raise the question of drugs declare an interest in it. As he raises the question so frequently, I should like to know if he has an interest to declare. Can he justify what I think can be rightly called high pressure salesmanship and its relationship with the prescription charge and the £75 million bill for drugs?

Mr. Shepherd

If the right hon. Lady had not such a nasty mind she would know that had I an interest in this particular matter I would unhesitatingly declare it. The reason I have not declared such an interest is that I do not have such an interest.

The right hon. Lady also asked me whether I can justify the bill. I do not have sufficient information at my disposal to justify the bill or to regard it as unjustified. For example, I do not know how the blame ought to be shared between the Government, the doctors who prescribe these drugs, the patients who apply the pressure and other factors, but one thing I do know; we cannot have an efficient, progressive drug industry in this country, which is now well in the forefront of development and research, without paying for it in some way or another. That is one thing of which I am sure.

There are two obvious ways in which one can pay for research and development in drugs. One is by doing what we do now—and that is, subject to careful scrutiny, to allow the firms who involve themselves in research and development to charge a price which covers these costs. Alternatively, we can do what has been done in another industry of which I have some knowledge, the aircraft industry, where it is so organised that the Government place research and development contracts.

If the right hon. Lady objects to the system of allowing firms to charge a sum which covers their reasonable research and development costs, does she believe in the other system? Is it the policy of right hon. Members opposite to say, The present system is no good and we want to give research and development contracts to firms engaged in developing drugs in this country." They cannot merely say that they will wipe off this cost. The cost exists and it must be recovered. What I want to hear the next time the right hon. Lady speaks from that Box is not simply a wholesale condemnation of drugs firms—there are good and bad in the industry, and I think most of them are good—but a practical statement of how she intends to finance research and development. Or is the right hon. Lady prepared to see us lag behind the rest of the world? I am not, but perhaps she is. Perhaps for political spite she is prepared to see us lag behind.

Dr. Summerskill

That is unfair.

Mr. Shepherd

I do not ask the right hon. Lady now to give me an answer off the cuff. What I ask is that the next time she speaks from that Box and tries to slang the drug industry—in which I have no interest—she will tell us whether she prefers to have development paid for by a reasonable charge for the drugs or whether she wants Government research and development contracts to be introduced. From my experience of the aircraft industry, I have no doubt in my mind which is the better system from the taxpayers' point of view.

I welcome the Bill, and I temper my welcome with some doubt only because it does not go as far as I want to go. I was upbraided a little time ago by the right hon. Member for Middlesbrough, East (Mr. Marquand)—in a very kindly way, because he is a very kindly man—because last year I suggested that one-third of the cost was the percentage which the contributor and the employer together ought to pay towards the cost of the National Health Service. Despite his strictures, I am quite unrepentant. I believe that one-third represents a practical, realistic and, from the social point of view, on the whole the most desirable percentage, and I hope briefly to give some reasons why I think so.

Mr. E. Fernyhough (Jarrow)

Will the hon. Member make this clear? Does he mean one-third to be paid by the employer, one-third by the employee and one-third by the State, or does he mean one-third to be paid jointly between the employer and the employee?

Mr. Shepherd

I am not as ambitious as the hon. Member might think. I am content to say that the contribution from employers and employed ought to be one-third of the cost and that, at any rate for some time ahead, we should provide two-thirds of the cost from taxation.

I cannot understand why there is such hesitation on the benches opposite. I could understand it if we were attacking the Service; if we were attempting to limit benefits. I stand very firmly on the principle of the National Health Service giving its benefits to everyone who needs them irrespective of whether or not they contribute—that is, in respect of their families. I firmly believe that. I am a wholehearted supporter of the social services, including this one. I cannot understand the extraordinary rigidity displayed on this matter by hon. Members opposite. Have they really tried to look at this objectively and to decide which is the best way by which this Service can be paid?

One or two things are basic to the question of payment. As far as possible, the Service should be paid for by those who are gainfully employed. I believe that, contrary to what some right hon. and hon. Gentlemen opposite have said, there should be uniformity of contribution for uniformity of benefit. Thirdly, I believe that, in terms of contribution from taxation, the State ought to pay as little as is practically possible. If I am asked why I believe that there should be such a contribution from the worker, my answer is that I do not believe, as hon. Gentlemen opposite do, that it is a good thing for the National Health Service to be regarded as something free and provided entirely by the State—

Mr. Fernyhough

It is not.

Mr. Shepherd

No, but we have had many speeches today indicating that we should take it all from taxation and—

Mr. Herbert Butler (Hackney Central)

It is not free if it is taken from taxation.

Mr. Shepherd

No, but many hon. Members seemed to take another view. I think that that is a bad principle. The hon. Member for Sowerby (Mr. Houghton) may think that he is pleasing his constituents when he says, "Do not take anything from the employer or the worker—take it all from taxation," but I do not think that he is. He is putting his constituents below their real level when he takes that view. I do not believe that the majority of our constituents want to feel that they are the recipients of something for nothing. The majority of them would like to feel that they are making a worthwhile contribution for the service they are receiving.

The hon. Member does not take that view. He may be right, but I feel very profoundly that he is not, and that the great majority of our people are not something-for-nothing layabouts but prefer to feel that they are making a realistic contribution towards the service afforded to them. I deny entirely what he says. I think that he is utterly wrong. I am sure that most people would regard it as an advantage to be able to say, "This is not a benefit given to me at the cost of other people's taxation, but something for which I make a contribution in accordance with my ability to do so."

Some hon. Gentlemen have said. "This is all very well, but how about the low-paid workers?" It is true that the incidence of the contributions is in general terms a flat one and does bear unevenly over different grades of workers, but there has been a great deal of exaggeration over this question of the lower-paid worker. In the first place, a differential is already established. We are not dealing here with just one flat rate of contribution, as perhaps some hon. Gentlemen opposite seem to assume.

For example, we have women over 18 years of age who pay 1s. 4½d. and we have boys and girls—for this purpose, under 18 years of age—paying 10½d. Therefore, if from the numbers of those whom we call the lower-paid workers we take the women and the boys and girls of 18 and under, we have removed from that class a very substantial number of people indeed—and a number much larger than hon. Gentlemen opposite would like to make out.

Last week, one hon. Gentleman opposite spoke about low-paid workers. He referred to railway workers, and there was a great deal of assent to what he said from his hon. Friends. Being somewhat interested in these matters, I took the trouble to write to the British Transport Commission to get details of what were the actual earnings of its staff, and the Commission was kind enough to send me a census which gave certain figures. It does not show the latest wages—the latest wages are higher than these—but these are good enough for my purpose. The ordinary station porter who is, I suppose, the lowest paid man on the railway, receives £9 6s. 5d. a week. A ticket collector, whom one does not imagine to be the highest grade of employee on British Railways, receives £11 1s. 1d. a week if he is at a barrier and £11 16s. 2d. if he is on a train. [Interruption.] Looking at these figures, which I hope no one will contest, in spite of the muttering opposite—

Mr. H. Butler

The reason for the muttering is that we are wondering whether this is average wage or basic wage.

Mr. Shepherd

This is the are paid.

Mrs. Slater

No.

Mr. Randall

Is this the basic, the minimum?

Mr. Fernyhough

It includes overtime and everything else.

Mr. Shepherd

To set hon. Members opposite at rest, I will explain that this is the annual census of staff giving the average earnings of principal groups—

Mr. Fernyhough

And overtime.

Mr. Shepherd

I am concerned with earnings, and so is the man who draws his money. He is not concerned with his basic wage but with what he earns, and so am I concerned with what he earns. Hon. Members may say that we have a very odd set-up in British industry, where there are too much supplementary earnings and basic rates are not right. I may agree with that, but here I am concerned for the moment only to discuss what a man takes home, because what he takes home, less these contributions, is the important thing.

Dr. Summerskill

We should not deceive the House in this important matter. If next week, as is quite probable, overtime ends in any industry, the figures the hon. Member for Cheadle (Mr. Shepherd) has given cease to be valid.

Mr. Shepherd

Of course, if overtime ends on the railways my figures will not be valid, but I am concerned with what now applies and has applied for some time in the past and with what British Railways themselves believe will apply in the future. I am pointing out that this argument about the lower paid workers is by no means as valid as hon. and right hon. Members have been suggesting.

In one respect only do I think that there is a valid argument, and that is in respect of apprentices. I hope that my right hon. Friend will take the point made by the hon. Member for Salford, West (Mr. Royle) and see whether, when the matter is next adjusted, something can be done to deal with the situation in which apprentices find themselves.

Mr. Charles Pannell (Leeds, West)

I am obliged to the hon. Gentleman for giving way. I am sure he wants to be fair about earnings. Surely he appreciates that when British Railways give average earnings they take the average over many people, and within an average for a particular grade, of course, there must be many receiving considerably less. When the figure of earnings of ticket collectors is given, that is an average, depending on all manner of circumstances and vicissitudes in different parts of the country. I am sure the hon. Gentleman wants to be fair and will appreciate that what I have just said is right.

Mr. Shepherd

It is no part of my argument to maintain that no person in the grade of porter, for example, receives less than the average; it would not be an average if that were so. There are differentials for different locations; London men receive more than provincial men. But this is an indication that the argument about lower-paid workers is not as valid as hon. Members opposite would like to make out.

Again, each year on drink, tobacco and entertainment the populace is spending over £2,000 million. A great deal of that may be consumed in Park Lane, and a great deal may be consumed on expense accounts at the expense of the Chancellor of the Exchequer. But I am not convinced that £2,000 million goes in that way alone. I am sure that the figure of £2,000 million, which represents an enormous expenditure on drink, tobacco and entertainment, shows what the figure of £30 million means in terms of hardship on the community. Hon. Gentlemen say that one-third is not right and that it is too harsh. I agree that by putting it up one-third at the moment and putting it on the employees would be inadvisable for various reasons, into which I will not go at this late hour. But it could be done by causing employers to pay more. This will set up a howl from the Federation of British Industries and the British Employers' Confederation.

I want to reply by saying that after a period in which trade has been almost consistently good for twenty years or thereabouts, I am convinced that most employers today have over-loaded administrations and inflationary weaknesses. They could, if they had to, make sufficient savings within their own organisations to offset any effect of a rise in the contribution that they have to pay towards the National Health Service for their employees. I know that that would not be possible in some hard-pressed industries, but the great generality of industries could make good any increased contribution to the National Health Service by making corresponding savings in their administrations.

I feel sure that that is the case. I am only sorry that the Government have not had enough courage to put up these contributions by the employers and reach a stage, which is the right one, of one-third of the total cost of the services paid for in contributions in one form or another.

I want to end by making a comment on the question of taking the money out of taxation. The hon. Member for Sowerby was very keen about this matter. I do not believe that the man who earns £5,000 a year is undertaxed. I believe that he is overtaxed. This rate of taxation upon the executive class is an extremely punitive one from the national point of view. I want to see it reduced. Perhaps the hon. Gentleman wants to see it increased, but he has been a tax collector all his life and I have been a payer. Therefore, we have different points of view.

Irrespective of whether it is desirable or not to increase the level of taxation on individuals, there is a strong economic reason, which I do not think hon. Members opposite have appreciated, for not imposing so large a burden upon the Revenue. Briefly, may I say why? We want to see some of this burden taken off the Revenue, because we want to have a less inflationary situation in the country. Hon. Gentlemen opposite may say, "What difference does it make if you take it off the Revenue and put it on the contribution?" It is not entirely a question of taking that amount of money out of circulation from the point of view of purchasing power, although I would not deny that that is a significant factor in the concept. What is perhaps more important is whether one puts oneself in a position where one can or cannot have a truly deflationary Budget. Last year, when we were facing a severe inflationary condition, we had about £500 million uncovered below the line.

Mr. Fernyhough

And we gave £35 million to the Surtax payers.

Mr. Shepherd

I would defend that. I have no difficulty in defending that on economic, social or ethical grounds. To have a situation in which we have £500 million uncovered below the line, as we have had, is not the way to fight an inflationary pressure. If the Government want to assist the Revenue by increasing the contribution, it is not because they want to kick somebody or to lighten the load on somebody else, but because it is highly desirable that we should cover our expenditure below the line. That is a very valid point.

Some hon. Members opposite have questioned the belief of hon. Members on this side of the House in the National Health Service. I am a staunch supporter of the National Health Service and I dislike intensely those who subject it to unreasonable criticism. I become rather tired of hearing people in the more expensive cocktail bars or on the odd occasions when I am in the sun-drenched South of France, saying that people in this country do not want to work, that they want something for nothing and that everybody in the Welfare State is becoming idle and useless. We have suffered an immense amount of damage in this country from talk of this kind, and it is so utterly, hopelessly and maliciously untrue.

Let me assure those who talk in terms of moral deterioration, whether they be in Monte Carlo or in Bournemouth, that there was more moral deterioration of the fibre in one month of unemployment between the wars than has occurred during the whole of the period of what is called the Welfare State since the war. Of course there are defects, and there are individuals who try to take advantage. But a man cannot take advantage so easily today as he could before the war. Before the war, if a man wanted to live without working it was not a very difficult thing to do, but today people offer him a job which he finds great difficulty in refusing. Therefore, it is much harder to be a real "miker" under this so-called Welfare State than it was in the old days when things were not quite so good.

The Welfare State and the National Health Service are as much a part of our progress as was radar and as Zeta is today. They are part of the progress of the nation, an investment in our future. To have a more healthy and better educated people is an investment which this country has to make if it is to be a leader in twenty years' time. The crabbers and the cavillers have little argument in their favour. We have an excellent Health Service. We have a welfare society which, on the whole, is the envy of the world. In return, hon. Members opposite will not, I hope, be quite so fixed in their ideas. Disaster will not come if we ask for a third contribution. I believe that by making people feel that they are paying more towards these services, we shall create a happier atmosphere, and most certainly it will enable us more readily to have expansions when expansions become necessary.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

The hon. Gentleman quoted certain figures relating to the wages of railway employees. For instance, he quoted the case of a porter getting over £9 a week. In fairness, surely he will agree that the figure which he quoted related to a porter who had been working on Sundays, overtime, night duty and Saturday afternoons. The basic rate of a porter is between £7 10s. and £7 14s., and that of a ticket collector is about £8 10s. The fantastic figures which he quoted must relate to exceptional cases where Sunday duty, overtime and Saturday afternoons have been worked.

Mr. Shepherd

Where the hon. Member would be right would be if every porter worked Saturdays, Sundays, day-time, night-time and holidays.

Mr. Popplewell

That is entirely wrong. The hon. Member should withdraw.

9.0 p.m.

Mr. H. A. Marquand (Middlesbrough, East)

I am sorry to have to cut short this interchange about the wages of railway workers, but before the right hon. Gentleman the Chancellor of the Duchy of Lancaster has an opportunity to reply, I want to adress a few words to the House. This very small Bill, dealing with one method of financing part of the cost of the National Health Service, has given rise to a very wide-ranging debate, in the course of which we have heard, especially from the other side of the House, many speeches mainly devoted to discussing the structure and the methods of operation of the Health Service itself.

I can understand the desire of hon. Members opposite not to talk too much about the Bill and its provisions, but I welcomed this technical irrelevance because it gave the House the benefit of hearing a very remarkable speech from the right hon. and learned Gentleman the Minister of Health. It was really worth while having a little irrelevance in the debate in order that we could listen to his panegyric, his pan of praise for the Health Service. He summed it all up by saying, and I was careful to make a note of his words, that "its increased efficiency and increased service to the consumer are conclusively proved".

We have come a long way since the debates in the 1945 Parliament which some of us remember. We have come a long way, indeed. I could hardly believe my ears when the Minister claimed credit for the increased number of visits to practitioners in the optical service. Hon. Members who were in the House during the 1945 Parliament will remember the screams of horror and shouts of fury at the fact that 18 million or 19 million spectacles had been supplied by the Service during the first two years. Now there is rejoicing, quite properly, that, the initial backlog having been overcome, people are once again seeking and getting proper optical assistance.

I smiled also, though, naturally, I could not help being gratified, when the Minister gave his hon. Friends the same answer about alleged abuses of the Service by foreigners as I and my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) had given at the Dispatch Box some years ago. These things are satisfactory. I am glad that the Minister feels that the advice on the therapeutical value of drugs given by the Cohen Committee, which was set up by my hon. Friend the Member for Ebbw Vale, is now so valuable. And I am also glad that the Prescribers' Notes, which were instituted when I was Minister of Health, are still being regularly circulated and are considered to be doing some good.

We are all delighted at the increased number of beds which are now available to patients and the better rate of bed usage. We are glad that the waiting lists which at the initial stages of the Service were so long are now reduced to quite manageable proportions. I am glad to think that the extension of treatment of tuberculosis from specialist sanatoria to general hospitals which we undertook has borne fruit in a continuing reduction of the number of cases of tuberculosis which have to be treated. That, of course, was not the only cause of the reduction in the number of cases, but it was one of the contributory factors.

We have all shared in this achievement. These improvements, started in 1946 or in 1948, when the Health Service came fully into operation, have gone on continuously. I am not seeking for a moment to say that these improvements are not going on under the administration of the right hon. and learned Gentleman opposite. What pleased us particularly this afternoon was not so much the Minister telling the story of the great and remarkable achievements of the Health Service with such evident pride, but to hear him candidly admitting that a very large proportion of the increase in money cost in recent years has been due to the inflationary pressure in the economy which the present Government have failed to correct or control, and to go on to claim credit for that proportion of the increase which represents a real improvement in the services to the patients.

As I heard the Minister's claim that the services and the size of the Health Service have been increased, that the number of doctors had increased and all these various items to which I have already referred, the thought came to my mind how thoroughly justified was my right hon. Friend the Member for Ebbw Vale in placing these Measures on the Statute Book, despite all the difficulties of that time, as early as 1946. I hope—in fact, I am confident—that the right hon. Gentleman the Chancellor of the Duchy of Lancaster, if I might address a word to him personally, will join with ours his voice in the triumph song when he rises to reply to the debate.

So much, then, we are all agreed about. So much is agreed that I hope there will be no further attempt—there have been attempts in the past; and there was one when Mr. Crookshank, as he then was, became Minister of Health—to reduce the Service itself, or any more of the niggling and cheeseparing economies which have broken out from time to time, such as my hon. Friend the Member for Manchester Exchange (Mr. W. Griffiths) referred to. I hope that these things are at an end. I hope that the Chancellor of the Duchy will tell us that it is the intention of the Government to expand the Service more and more until it fully meets the needs of the community.

Can we really rely on this? Despite all the satisfactory words which we heard from the Minister of Health this afternoon, can we be sure that the Government, even if the right hon. and learned Gentleman himself wants to do it, will be able to continue along the road of expansion? I am sure we cannot if the Government adhere to their present financial policy What the Minister had to say about the positive achievements of the Service, the improvements in its real value and efficiency to the community, was good. What he had to say about the main subject of this Bill, the finance of the Service, was nowhere near so good, and filled me with some misgiving and alarm.

The present Minister of Labour, more than once, when he was in opposition and after he became Minister of Health, has told the House that, in his opinion, the proper course for the nation to pursue was to settle what it regarded as a fair proportion of the gross national product to be devoted to the Health Service and to adhere to that proportion, thus not involving itself in too many irrelevant considerations of figures, and continuing to devote a fair proportion of the real resources of the community to health, because only in that way could we build up the sort of health service that we need and want to have.

That was the view stated more than once by the present Minister of Labour. The Guillebaud Committee, which he appointed to look into the cost of the Health Service, was an entirely independent and impartial tribunal and nobody has ever for a moment tried to deny that. That Committee, the chairman of which was certainly not a member of my party, brought this point out very clearly. It emphasised as clearly as has ever been done before in a public document the need for the community to decide what proportion of the national resources it was able to devote, and wished to devote, to the Health Service, and then to adhere to it.

In our debates, I am sorry to say, we have heard words which sounded like a retreat from Guillebaud, a retreat from the stand taken by the present Minister of Labour when Minister of Health. In the debate on the paving Money Resolution for this Bill, the hon. and learned Gentleman the Member for Middlesbrough, West (Mr. Simon) the Financial Secretary to the Treasury, said: I wonder whether we are right to say that the proportion which the cost of the Service bears to the national income must necessarily be maintained."—[OFFICIAL REPORT, 25th February, 1958; Vol. 583, c. 224.] The Minister also said today that he did not attach the same importance to this concept as other hon. Members appeared to do.

I suggest to the House that to aim at adhering to a positive, publicly known, admitted and accepted proportion of the national income is vital for the future of our Health Service. I see a red light whenever the Treasury begins to dispute this doctrine. I thought that we now had it well established, but when the Financial Secretary says that he is not sure about it, and the Minister of Health seems to back him, then we can see danger coming.

If now, departing from the doctrine of the former Minister of Health who is now Minister of Labour, it be admitted that the proportion of the national income need not be kept at 4½ per cent., but can be allowed gradually to go down, then we have no real hope of maintaining the expansion of the Service which is still necessary. We have by no means yet reached the maximum desirable optimum expansion of the Health Service. And if the national income should begin to expand again, and if this doctrine of the fixed, recognised proportion of the national income which should be devoted to the Health Service be abandoned, then we will find successive Chancellors of the Exchequer wanting continually to maintain an artificial monetary ceiling, and, having abandoned this doctrine, no one will be able to criticise them when they do so.

I suggest to the House that now, for many years to come, and as far as anybody can reasonably foresee, the Service needs expansion and not contraction. The foundation of the Service, as I am sure the Chancellor of the Duchy will agree, the bedrock upon which the rest is built, is, first, the preventive services which are largely in the hands of the local authorities, and, secondly, the general practitioners. In both these directions considerable extra expansion is still required in my judgment.

I was glad to hear that the number of general practitioners has increased and that the proportion of patients per general practitioner has diminished. It is good to know that these figures have changed to some extent, but the maximum permitted list is still 3,500, which is an enormous figure. The right hon. Gentleman must agree that it is an enormous figure. Perhaps he will be able to tell us how many doctors still have that maximum number of patients on their lists, and can give us his expert opinion as to whether that is a satisfactory figure.

There must be more doctors yet in the general practitioner service before we can possibly be satisfied. As it is, we hear far too many complaints, and justified complaints, from general practitioners of overwork and of their inability to give sufficient time to patients who require that time because the doctors are so pressed with the large numbers with whom they have to deal. Those are still the conditions in the sort of industrial areas which I and many of my right hon. and hon. Friends represent.

We cannot be satisfied with this. We need an expansion and hon. Members opposite as well, as on this side of the House, have drawn attention to several directions in which they want to see expansion. The right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton), a former Minister of Health, like every former Minister of Health, was naturally disappointed with the amount of hospital building which he was able to secure when he was Minister—as I was when I was Minister. We all want to see, and we all know that there is, a need for a great expansion in hospital building. We know that there are still arrears of a hundred years of neglect to make up in many parts of the country. One could go on expanding the list and mentioning the need for industrial medical services in our factories and industries.

For many years to come, there will be no reason whatever to contemplate a reduction of the Service or to abandon the ideal of maintaining a satisfactory proportion of the national resources going to it. Now, under the policy followed by the Government today, there is a danger of abandoning this ideal and concentrating again upon a mere monetary ceiling and, inevitably in the end, reducing the Service instead of expanding it.

As my hon. Friend Member for Sower-by (Mr. Houghton) reminded the House this afternoon, there was undoubtedly a clear directive from the Chancellor this year that there must be no increase of expenditure calling for increases in taxation, and that if there were to be increases in expenditure the burden would have to be shifted elsewhere and hidden in another account. That is what is being done. When we are discussing this process of hiding the expenditure in a non-tax account and transferring the burden from the taxpayer to the contributor to National Insurance, it is ridiculous to do so without remembering what we did in the autumn—the increase in contributions for National Insurance which was authorised at that time.

The hon. Member for Cheadle (Mr. Shepherd) seemed to have forgotten all about that in some of his remarks. In the autumn, we had the notorious plan of the right hon. Gentleman the Minister of Pensions and National Insurance for giving 9d. for 10d., for financing the increased cost of old-age pensions and benefits from the pockets of existing contributors and, to a very small extent, from those of the taxpayer. Now we have a similar dodge whereby those same contributors are to meet the cost of the increased wages and salaries in the Health Service.

The result of those two things taken together—and this is what we must remember—was shown by my hon. Friend the Member for Lanarkshire, North (Miss Herbison) the other day when she explained that whereas, in October, 1951, an adult male had to pay a contribution of 5s. 1d. per week, he now has to pay a contribution of 9s. 11d., an increase, as she reminded the House, of 95 per cent. during the term of office of the present Government.

My hon. Friend pointed out that that represented 6.6 per cent. of the agricultural worker's minimum wage and 8 per cent. of the minimum wage of women in the retail food trade. My hon. Friend the Member for Sowerby has given even more important figures this afternoon and has pictured the plight of widows—and there are many of them—who have to continue to pay National Insurance contributions to secure that they will have an adequate pension—I am thinking now of the 10s. widows—when eventually they reach retirement age. Women like that, who are earning £3 or £4 a week, are now to be asked to pay these increased contributions. The percentage of their incomes which goes in this way must be well over 8 per cent. The hon. Member for Cheadle said that we are exaggerating. He proposed an increase in the total contribution, to cover one-third of the cost of the Health Service.

In all the figures that he gave us he did not tell us what percentage of the wage of the lowest-paid worker would have to be paid in contributions if his suggestion were carried out. The figure would be utterly intolerable. In the debates on the National Insurance contributions I said that we had reached the end of this road; that we could go no further with a system of National Insurance and National Health contributions which imposed so heavy a burden upon the lowest paid workers, and that somehow or other we must get round quickly to a system of graduated contributions.

All this addition to the burdens on the poor goes with a corresponding lessening in the burdens upon the better-off sections of the community. That must be remembered. Our complaint is not merely that these burdens are too heavy for the lower-paid workers to sustain but, in addition, that they have always gone with a relief to the higher-paid Income Tax payers. We were rebuked during a recent debate for laying too much emphasis upon the £34 million bonus which was given to Surtax payers, but we are not thinking only of that. We are thinking of a long series of reductions of tax upon the rich and new imposts upon the poor. The Government have a settled policy for the redistribution of wealth in favour of the better-off members of the community.

I made some calculations which show that the total reliefs given to Income Tax payers in four Budgets in the last six years amounted to £427 million, and the reliefs given to the payers of the standard rate of Income Tax—which, as has been pointed out a thousand times, benefit the well-to-do more than the less well-off—totalled £250 million. These are substantial figures.

These reliefs have always been paid for not so much out of an expansion of revenue as by the placing of new burdens upon the poor—by raising the price of bread; by raising the price of milk and by raising the price of school meals, from 7d. to 1s. It is the accumulation of injury to the poor and benefit to the rich about which we complain, and it is because the Bill is part of that same process that we so strongly dislike it. There has even been imposts in the National Health Service itself, to help this process, by the levying of taxes upon cripples and the poorest of the poor who need medicine.

The Minister defended this extraordinary process on the ground that it would be deflationary. How is it more deflationary to levy a tax upon a poor widow who has to pay an insurance contribution than to levy it upon a rich Surtax or Income Tax payer, who can cut down his expenditure without great sacrifice? I have never been able to understand that argument.

Mr. Geoffrey Hirst (Shipley)

And the right hon. Member never will if he talks that way.

Mr. Marquand

I want to ask the Minister very seriously whether it is inflationary.

When the Minister of Pensions and National Insurance made an announcement about the increase in contributions for National Insurance I asked whether he consulted the Trades Union Congress. I was laughed at by hon. Members opposite. My hon. Friend the Member for Lanarkshire, North asked the question again, and again it was not answered. Did the Government consult the T.U.C.? If not, why not? Does the right hand of the Government know what their left hand is doing? The Minister of Health made a rather Left-wing speech today, so he must not blame me if I refer to him as the left hand of the Government.

Does the Minister of Labour know what the Minister of Health and the Minister of Pensions and National Insurance are up to? He cannot know, because if his right hon. Friends told him, the Minister of Labour would say, "Boys, don't you know that the miners have put in a wage claim and that included in the claim for lower-paid workers in the mining industry is an item to cover the increased contribution costs which their members will have to pay?" How can these imposts on the lower-paid workers be tolerated by any decent trade union? They may well be inflationary; they are certainly not deflationary.

This is harsh treatment of the poorest of the community and it is unfair between man and man. It is almost certain to be inflationary in character. It is a threat to, and not a defence of, the Health Service; worse, it is a deliberate and reactionary distribution of the wealth of the country in favour of the rich.

9.27 p.m.

The Chancellor of the Duchy of Lancaster (Dr. Charles Hill)

The right hon. Member for Middlesbrough, East (Mr. Marquand) said that this has been a wide-ranging debate, and he suggested that in parts it was irrelevant. It is fortunate that it was, for it has covered a number of interesting and important topics within the National Health Service, but not necessarily directly related to the particular propositions contained in this Bill. If, as the right hon. Gentleman put it, a desire to talk too much about other things revealed a lack of interest in the Bill, that has been characteristic of the speeches of hon. Members on both sides of the House.

My right hon. and learned Friend the Minister of Health opened this debate with what I think will be regarded as a comprehensive speech. He was followed by the right hon. Lady the Member for Warrington (Dr. Summerskill), who made a wide-ranging, thoughtful and temperate speech, and we have had a number of other speeches from hon. Members on both sides of the House who sought to take advantage of the occasion to probe and discuss some of the more important aspects of the National Health Service.

The right hon. Member for Middlesbrough, East was puzzling to me when on the subject of the proportion of the national product that the National Health Service has commanded and should command. I wondered why he should be pressing for a fixed proportion, bearing in mind that we may reach the day when the cost of the National Health Service, because of its success, would represent a smaller proportion of the national product, without necessarily being inferior because of that, or because of a fall in the national product there might be what looked like a rise in the percentage represented by the National Health Service without it being a real rise.

Do not let us get tied to percentages and averages in dealing with this matter. At least this can be said. Although it is not possible to follow exactly the method of the Guillebaud Committee—partly because it used a special team of economists for the purpose, and partly because it deals with the financial year, and the National Income and Expenditure Blue Book is for the calendar year—although it is not possible to give exactly comparable figures with those of the Guillebaud Report, it is a fact that from 1950 to 1954 there was a declining percentage of the national product. From 1954 to 1956, the last year for which figures are available, at least it can be said there was a modest increase in that percentage proportion.

The right hon. Lady the Member for Warrington gave a number of useful suggestions on what she thought in the long run would be a more sensible way of saving money, of raising the equivalent of the sum of money sought to be raised by this Bill. She spoke of better domestic provisions, home provisions, reductions of out-patient attendances, and was also on her usual theme about drugs, drawing attention very rightly, to the drug bill of £74 million, only £13 million of which is covered by charges, and the £61 million does not include the drugs prescribed and provided in hospitals. It is a tremendous amount.

I am not going further into that matter. I am not going to deal with the difficult problem of the increasing proportion of proprietary medicines in that bill. I make the general observation that we must never forget there is a widespread passion for medicine in this country. There is a belief in the bottle, even though the medicine may not be invariably of therapeutic value.

The right hon. Lady put a specific suggestion as to a way of saving money. In effect, she asked: Why not convert the part-time consultant service into a whole-time consultant service? She drew attention to the fact that the rate of payment for the part-timer is higher than that for the whole-timer. This is one of the matters on which the Royal Commission is taking evidence and asking questions. I say that because we must not go beyond that in a definite answer. I will offer three reflections. If we decided to do this and converted every part-time consultant into a whole-time consultant, we should raise the costs. If, on the other hand, we took the number of whole-time consultants who are needed for the hospital job, we should have to sack certain consultants and deprive them of their hospital experience. Thirdly, even if we did that, on my calculation, which admittedly is rough, the economy would be between £1 million and £1¼ million out of a total bill for consultant services of over £20 million. I think I had better say no more on that, bearing in mind the first consideration I put forward.

The hon. Member for Manchester, Exchange (Mr. W. Griffiths) and my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) dealt with problems of capital expenditure on hospitals. I should like to give the figures because, although it may well be said that there is too little capital expenditure in this direction, it is useful to know that whereas capital expenditure in 1950–51 was £13 million, for the year 1957–58 it is estimated to be £20 million. I put this forward in no party spirit. I am speaking of capital expenditure, including acquisition. In 1958–59 it is estimated that it will be £23 million, and in 1959–60, £25 million.

Many other useful matters were raised. My hon. Friend the Member for Carlisle (Dr. D. Johnson) urged the Minister of Health to be flexible in his administration of the Service. The Minister is watching the changing pattern. He gave evidence of that in his speech by his reference to the tuberculosis service. He appreciates the point which was raised by my hon. Friend.

I will come a little nearer to the Bill, although there were times today when I felt that I might be called out of order if I referred to the Bill itself, so far did we wander from it. I want to deal with the criticisms which have been raised. On the one hand, there is the basic or fundamental criticism that the Beveridge principle is wrong or outmoded, and at the other extreme there is the criticism that this is a hardship to the individual man within a lower paid group.

I will deal first with the basic issue. The hon. Member for Tottenham (Sir F. Messer) put it last week when he said: My objection to the addition to the health contribution is based on my objection to any special contribution for health purposes."—[OFFICIAL REPORT, 25th February, 1958; Vol 583, c. 260.] A number of hon. Members have taken the same line today. The hon. Member for Salford, West (Mr. Royle) took that line in similar terms, and there were times when the right hon. Lady the Member for Warrington seemed to be taking the same line.

Clearly, a good intellectual case can be made out against this system. No one has mentioned it, but one obvious argument is that the Service is available to every member of the community whether he is a contributor or not. The Beveridge arguments were, first, that the contributory principle was accepted for cash benefit and, therefore, should be accepted for medical service; secondly, that the contributory principle had for years characterised medical benefit; and, perhaps looking more into the future, the argument that a good Health Service saves sickness benefit and therefore the contribution from National Insurance funds to the Health Service is a premium against future contingencies. In moving the National Insurance Bill, the right hon. Member for Llanelly (Mr. J. Griffiths) added the simple argument that it was good value for money at a contribution of 10d., 8½d. of which would fall on the individual worker.

Although I can understand the criticism that this method can bear too heavily under a system of flat rate contributions, I am bound to say that the system of the flat rate contribution and the transfer of moneys from the National Insurance Fund to the National Health Service were principles adopted in the 1946 Act. I say that with no desire to arouse controversy. On the basic principle, that is a position which both sides of the House have accepted.

Mr. Aneurin Bevan (Ebbw Vale)

If that were the case, and if it were accepted as a principle and not purely as an historical incident, when was the contribution increased between 1946 and 1950?

Dr. Hill

In the 1946 Act, there was provision for the automatic increase of the contribution after five years, and in fact the contribution rose from 4s. 11d. in 1946 to 5s. 1d. in 1951 by the automatic—

Mr. Bevan

But when was legislation introduced in the House betwen 1946 and 1950–51 increasing the actual rate of contribution from the National Insurance Fund into the National Health Service?

Dr. Hill

Perhaps the right hon. Gentleman will wait until the argument develops. I am saying that the principle of a contribution from National Insurance funds to the National Health Service was included in the National Insurance Act, 1946.

There has been some criticism of the formula, the percentage of 20 per cent., as representing the amount which the National Health Service payment constituted of the original estimate of the cost of the service of £170 million or £175 million in the Financial Memorandum of 1946.

I will just say this. It was what could be done. I frankly recognise that it was exceedingly difficult. In 1946, with many costs unknown, with too little known, I imagine, about the cost of the voluntary hospital service and the cost of the local authority service, it was impossible, I recognise, to estimate the cost at that time. But it was the fact that in 1946, when the rough estimate—the only estimate that could be made—of the cost was £175 million, the proportion, the amount allocated to the National Health Service contribution, was, in fact, £36 million; was, in fact, 20 per cent.—

Mr. Bevan indicated dissent.

Dr. Hill

It was, in fact, 20 per cent. of that amount.

Mr. Bevan

Quite wrong—quite wrong.

Dr. Hill

I will proceed with this statement of the facts. The point I want to bring out is not that there was anything rigid, permanent, sacred about that percentage, but that, in fact, of the estimated cost of £175 million, the proportion that was transferred from the Insurance Fund was approximately 20 per cent. In fact, the sum turned out to be £40 million and not £36 million.

It is as well that we should get clear the various stages of the cost of the Service as the background for our discussion on this Bill tonight. In 1946, it was thought that the gross cost would prove to be £175 million. In 1949–50, the first year of the Service, the cost was actually £452 million. Next year, the gross cost is estimated to be £740 million. In 1946, the Exchequer contribution was estimated to be £126 million. In 1949–50, the actual Exchequer contribution was £345 million, and the estimated amount of the Exchequer contribution next year, without this Bill, is £555 million, and, with this Bill, £531 million. Lest the local contribution be forgotten, the original estimate in 1946 was a contribution from local rates of £7 million. In the first year of the Service, the actual amount was £16 million, and next year it is estimated to be £31 million.

The right hon. Lady said that in order to see today's problem we should look at the last two years, and she recited, very fairly, the increased charges of the last two years. If we are to see this problem in its perspective—

Mr. George Chetwynd (Stockton-on-Tees)

Good health.

Dr. Hill

—we should look at the last seven or eight years for, after all, it was in 1949, after the first full year of the Service—indeed, within the first full year of the Service—that, in the National Health Service (Amendment) Act, the party opposite decided to take power to impose prescription charges. Those charges were not imposed, but the power was taken to impose them, and in moving in the other place that the appropriate words be added to the Bill, Lord Shepherd made it clear that the object behind the Amendment was twofold, to act as a deterrent to excessive or unnecessary resort to doctors and chemists, and to reduce expenditure."—[OFFICIAL REPORT, House of Lords, 17th November, 1949; Vol. 165, c. 796.] So it was that at least the amber light about expenditure was seen by the party opposite in 1949, and power was taken, not to increase the contribution, but to make charges for prescriptions.

In 1951, the party opposite, with the right hon. Member for Middlesbrough, East (Mr. Marquand) as the Minister of Health, actually imposed the charges on teeth and spectacles. The Leader of the Opposition, then Chancellor of the Exchequer, gave his reasons in his Budget speech: We decided that the Health Service estimates must be brought within a total of £400 million, which, for the time being, will have to be a ceiling … it is plain that the only way to keep within this limit without reducing the standards of the hospital, family doctor, and consultant services below what is really necessary is to find some other source of revenue."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 851–2.] Hon. and right hon. Gentlemen opposite found that source of revenue in the imposition of dental and ophthalmic charges.

Miss Jennie Lee (Cannock)

Shame.

Dr. Hill

There it is; I have recited the facts. When the charges were thought necessary, the limit was seen as £400 million, yet hon. Gentlemen opposite criticise an increased contribution on the healthy when we see the Exchequer contribution rising to £555 million.

I know, and the House will recall, that thirteen days after that announcement the right hon. Member for Ebbw Vale resigned. I think it as well to recall what he said in his resignation speech, for in that speech—a tense occasion—there were indications that he had, in fact, voted as a member of the Government and supported the kind of charge which he was then resisting.

Mr. Bevan rose—

Dr. Hill

Will the right hon. Gentleman let me just read this first?

Mr. Bevan

The right hon. Gentleman on three occasions has talked about the imposition of charges. The charges to which he is referring were not made until they were made under his own Ministry in 1952.

Dr. Hill

I am referring to the charges for teeth and spectacles, which were made by the Government of which the right hon. Gentleman was a Member—

Mr. Bevan

I know, and I resigned.

Dr. Hill

—from which he himself had resigned. The right hon. Gentleman is cleverer at histrionics than he is at history.

Mr. Bevan

I would say that I am very much cleverer than the right hon. Gentleman was as a resister of the National Health Service. Will he answer me this question: which way does he want it? Does he want me to say that I was in favour of Health Service charges or resigned because of them?

Dr. Hill

I want to quote the right hon. Gentleman himself. This is what he said: I have also been accused—and I think I am entitled to answer it—that I had already agreed to a certain charge"—

Mr. Bevan

I had not.

Dr. Hill

I am quoting the right hon. Gentleman. He said: I speak to my right hon. Friends very frankly here"— and he then spoke to his former colleagues, saying: It seems to me sometimes that it is so difficult to make them see what lies ahead that you have to take them along by the hand and show them.

Sir L. Plummer

Like the right hon. Member for Monmouth (Mr. P. Thorney-croft).

Dr. Hill

A beautiful picture of the right hon. Gentleman the Member for Ebbw Vale coyly, cosily cajoling his colleagues up the garden path. I must add, in fairness to him, that he went on to say The prescription charge I knew would never be made, because it was impracticable. [HON. MEMBERS: 'Oh.'] Well, it was never made."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 42–3.] The interesting thing, if I may leave controversy for the moment, is that it is now possible to know what it was not possible to know at that time. If we look at the out-turn of Exchequer expenditure over the year 1951–52, ignoring the income from the charges which were imposed, which came to £10 million, the figure was, in fact, less by £1 million than the £400 million ceiling. All I can say is that if that had been known ahead the right hon. Gentleman might not have resigned, and Heaven knows what might have happened. I suppose that that resignation was the beginning of the Bevanite movement. [Interruption.] Well, in those days Bevanites were Bevanites. I saw a horrible word the other day. I think they are called "Mikites" now. Bearing in mind the sporting propensities of their new leader, it will be interesting to see how far they travel and in what direction they travel. I refer to this new little army of bookies' runners.

I want now to come to the criticism of the hon. Member for Sowerby (Mr. Houghton) of the panic character of the introduction of this Measure, as he so described it, and the criticisms of other hon. Members, including the hon. Member for Manchester, Exchange, that, in fact—

Mr. Houghton

I never used the word "panic" at all. I said that the Bill was the outcome of a rough house inside the Cabinet.

Dr. Hill

The hon. Gentleman and others questioned the timing of the Bill. On 18th February, the Vote on Account was published. It was then obvious that the Exchequer contribution for next year would be £531 million instead of £545 million in the previous year. It was clearly desirable that the cause of that difference should be made plain to the House. So my right hon. Friend the Chancellor of the Exchequer made his statement to the House—

Mr. G. Lindgren (Wellingborough)

Which Chancellor?

Dr. Hill

The present Chancellor. I believe that that will be regarded as a proper courtesy to the House.

I want to come to the allegation which was made by an hon. Member last week that there was something wrong about reducing the Exchequer contribution for next year to a level below that at which it has obtained this year. The increase of last year was intended to reduce the Exchequer contribution to £530 million. It did not, for a number of reasons, succeed. The further contribution this year is likely to bring the Exchequer contribution to £531 million.

If I may, I will turn to the hardship argument. The Minister of Health has dealt with the percentage which the contribution bears to income. The Financial Secretary has also given the figures. It will be recalled that he related the contributions to the average earnings today of £12 11s. 7d., pointing out at the same time that this figure was 10s. more than six months previously and £5 10s. more than in 1948.

I want now to take the extreme position which has been pressed, and that is to take a not well-off group, disregard overtime, and take the whole contribution. I want to take the example of the hon. Member for Deptford (Sir L. Plummer)—the agricultural worker. In 1946, it was decided that 4s. 11d. was the right amount. At that time the minimum wage for the agricultural worker was £3 10s. a week, and the party opposite thought that 4s. 11d. was a reasonable deduction from £3 10s. As agricultural wages went up soon afterwards, let us take the year in which the Service came into operation. The minimum wage then for the agricultural worker was £4 10s. Today it is £7 10s. in England and Wales and £7 5s. in Scotland. In short, the increase in the minimum wage as between 1948 and now is £3.

Hon. Members opposite will immediately say, "Yes, but the cost of living has gone up." But if we apply the figures for the cost of living we find that the increase in real wages is 34s. a week. The increase in contribution is 5s. a week, and of that increase in contribution 3s. 10d. is in respect of retirement pension, sickness pay and unemployment pay—a compulsory investment in the future, in fact. I believe that puts it in proper perspective.

We believe that this increased contribution is justified. As my right hon. and learned Friend said earlier, it should be seen in the context of the Government's anti-inflationary steps. Hon. Members opposite may disagree with the methods that are being followed, but surely they agree with the objective of seeking to maintain the value of the £ both at home and abroad.

Mr. Lindgren

Why give the Surtax payers relief?

Dr. Hill

In view of the steps which the Government have taken, regretfully, but definitely, to ensure that capital expenditure in the public sector is kept next year at the level at which it is this year

and that bank advances next year are kept at what they are this year, the Government believe that they should seek substantially to maintain Government expenditure next year at the same level as this year.

I say to hon. Members opposite that it comes ill from the party who first used the 20 per cent. formula, which formula still obtains today, and who first took power to impose a charge on patients to secure a ceiling of £400 million, to oppose this Government when we seek to restrict the Exchequer contribution to £530 million by increasing contributions on the healthy and not, as they did, on the sick.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 308, Noes 252.

Division No. 55.]	AYES	[9.58 p.m.
Agnew, Sir Peter	Cole, Norman	Gower, H. R.
Aitken, W. T.	Conant, Maj. Sir Roger	Graham, Sir Fergus
Allan, R. A. (Paddington, S.)	Cooke, Robert	Grant, W. (Woodside)
Alport, C. J. M.	Cooper, A. E.	Grant-Ferris, Wg Cdr. R. (Nantwich)
Amery, Julian (Preston, N.)	Cooper-Key, E. M.	Green, A.
Amory, Rt. Hn. Heathcoat(Tiverton)	Cordeaux, Lt.-Col. J. K.	Gresham Cooke, R.
Anstruther-Gray, Major Sir William	Corfield, Capt, F. V.	Grimston, Hon. John (St. Albans)
Arbuthnot, John	Craddock, Beresford (Spelthorne)	Grimston, Sir Robert (Westbury)
Ashton, H.	Crosthwaite-Eyre, Col. O. E.	Grosvenor, Lt.-Col. R. G.
Astor, Hon. J. J.	Crowder,Petre(Ruislip—Northwood)	Gurden, Harold
Atkins, H. E.	Cunningham, Knox	Hall, John (Wycombe)
Baldock, Lt-Cmdr. J. M.	Currie, G. B. H.	Hare, Rt. Hon. J. H.
Baldwin, A. E.	Dance, J. C. G.	Harris, Frederic (Croydon, N.W.)
Balniel, Lord	Davidson, Viscountess	Harris, Reader (Heston)
Barber, Anthony	D'Avigdor-Goldsmid, Sir Henry	Harrison, A. B. C. (Maldon)
Barlow, Sir John	Deedes, W. F.	Harrison, Col. J. H. (Eye)
Barter, John	Digby, Simon Wingfield	Harvey, Sir Arthur Vere (Macclestd)
Beamish, Col. Tufton	Dodds-Parker, A. D.	Harvey, Ian (Harrow, E.)
Bell, Philip (Bolton, E.)	Donaldson, Cmdr. C. E. McA.	Harvey, John (Walthamstow, E.)
Bell, Ronald (Bucks, S.)	Doughty, C. J. A.	Harvie-Watt, Sir George
Bennett, F. M. (Torquay)	du Cann, E. D. L.	Hay, John
Bennett, Dr. Reginald	Dugdale, Rt. Hn. Sir T. (Richmond)	Heald, Rt. Hon. Sir Lionel
Bevins, J. R. (Toxteth)	Duncan, Capt. J. A. L.	Heath, Rt. Hon. E. R. G.
Bidgood, J. C.	Duthie, W. S.	Henderson, John (Cathcart)
Biggs-Davison, J. A.	Eden, J. B. (Bournemouth, West)	Henderson-Stewart, Sir James
Bingham, R. M.	Elliott,R.W.(N'castle upon Tyne,N)	Hesketh, R. F.
Birch, Rt. Hon. Nigel	Emmet, Hon. Mrs. Evelyn	Hicks-Beach, Maj. W. W.
Bishop, F. P.	Errington, Sir Eric	Hill, Rt. Hon. Charles (Luton)
Black, C. W.	Erroll, F. J.	Hill, Mrs. E. (Wythenshawe)
Body, R. F.	Farey-Jones, F. W.	Hill, John (S. Norfolk)
Boothby, Sir Robert	Fell, A.	Hirst, Geoffrey
Bossom, Sir Alfred	Finlay, Graeme	Hobson, John(Warwick & Leam'gt'n)
Bowen, E. R. (Cardigan)	Fisher, Nigel	Holland-Martin, C. J.
Boyd-Carpenter, Rt. Hon. J. A.	Fletcher-Cooke, C.	Holt, A. F.
Boyle, Sir Edward	Forrest, G.	Hope, Lord John
Braithwaite, Sir Albert (Harrow, W.)	Foster, John	Hornby, R. P.
Bromley-Davenport, Lt.-Col. W. H.	Fraser, Hon. Hugh (Stone)	Hornsby-Smith, Miss M. P.
Brooke, Rt. Hon. Henry	Fraser, Sir Ian (M'cmbe & Lonsdale)	Horobin, Sir Ian
Brooman-White, R. C.	Freeth, Denzil	Horsbrugh, Rt. Hon. Dame Florence
Browne, J. Nixon (Craigton)	Galbraith, Hon. T. G. D.	Howard, Gerald (Cambridgeshire)
Bryan, P.	Gammans, Lady	Howard, Hon. Greville (St. Ives)
Bullus, Wing Commander E. E.	Garner-Evans, E. H.	Howard, John (Test)
Butcher, Sir Herbert	George, J. C. (Pollok)	Hughes Hallett, Vice-Admiral J.
Butler,Rt.Hn.R.A.(Saffron Walden)	Gibson-Watt, D.	Hughes-Young, M. H. C.
Campbell, Sir David	Glover, D.	Hulbert, Sir Norman
Carr, Robert	Glyn, Col, R.	Hunt, A. R.
Cary, Sir Robert	Godber, J. B.	Hutchison, Michael Clark (E'b'gh,S.)
Channon, Sir Henry	Gomme-Duncan, Col. Sir Alan	Hutchison, Sir Ian Clark(E'b'gh, W.)
Chichester-Clark, R.	Goodhart, Philip	Hutchison, Sir James (Scotstoun)
Clarke, Brig. Terence (Portsmth,W.)	Gough, C. F. H.	Hylton-Foster, Rt. Hon. Sir Harry
Iremonger, T. L.	Maude, Angus	Scott-Miller, Cmdr. R.
Irvine, Bryant Godman (Rye)	Maudling, Rt. Hon. R.	Sharples, R. C.
Jenkins, Robert (Dulwich)	Mawby, R. L.	Shepherd, William
Jennings, J. C. (Burton)	Maydon, Lt.-Comdr, S. L. C.	Simon, J. E. S. (Middlesbrough, W.)
Johnson, Dr. Donald (Carlisle)	Medlicott, Sir Frank	Smithers, Peter (Winchester)
Johnson, Eric (Blackley)	Milligan, Rt. Hon. W. R.	Smyth, Brig, Sir John (Norwood)
Johnson, Howard (Kemptown)	Molson, Rt. Hon. Hugh	Spearman, Sir Alexander
Jones, Rt. Hon. Aubrey (Hall Green)	Moore, Sir Thomas	Speir, R. M.
Joseph, Sir Keith	Mott-Radclyffe, Sir Charles	Spence, H. R. (Aberdeen, W.)
Joynson-Hicks, Hon. Sir Lancelot	Nabarro, G. D. N.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Kaberry, D.	Neave, Airey	Stanley, Capt. Hon. Richard
Keegan, D.	Nicholls, Harmar	Stevens, Geoffrey
Kerby, Capt. H. B.	Nicholson, Sir Godfrey (Farnham)	Steward, Harold (Stockport, S.)
Kerr, Sir Hamilton	Nicolson, N. (B'n'm'th,E. & Chr'ch)	Steward, Sir William (Woolwich, W.)
Kershaw, J. A.	Noble, Comdr. Rt. Hon. Allan	Stoddart-Scott, Col. Sir Malcolm
Kimball, M.	Nugent, G. R. H.	Storey, S.
Kirk, P. M.	O'Neill, Hn. Phelim(Co. Antrim, N.)	Stuart, Rt. Hon. James (Moray)
Lagden, G. W.	Ormsby-Gore, Rt. Hon. W. D.	Studholme, Sir Henry
Lambton, Viscount	Orr, Capt. L. P. S.	Summers, Sir Spencer
Lancaster, Col. C. G.	Orr-Ewing, Charles Ian (Hendon, N.)	Sumner, W. D. M. (Orpington)
Langford-Holt, J. A.	Orr-Ewing, Sir Ian (Weston-S-Mare)	Taylor, Sir Charles (Eastbourne)
Leather, E. H. C.	Osborne, C.	Taylor, William (Bradford, N.)
Leavey, J. A.	Page, R. G.	Teeling, W.
Leburn, W. G.	Pannell, N. A. (Kirkdale)	Temple, John M.
Legge-Bourke, Maj. E. A. H.	Partridge, E.	Thomas, Leslie (Canterbury)
Legh, Hon. Peter (Petersfield)	Peel, W. J.	Thompson, Kenneth (Walton)
Lennox-Boyd, Rt. Hon. A. T.	Peyton, J. W. W.	Thompson, Lt.-Cdr.R.(Croydon, S.)
Lindsay, Hon. James (Devon, N.)	Pike, Miss Mervyn	Thorn on-Kemsley, Sir Colin
Linstead, Sir H. N.	Pilkington, Capt. R. A.	Tiley, A. (Bradford, W.)
Llewellyn, D. T.	Pitman, I. J.	Tilney, John (Wavertree)
Lloyd, Rt. Hn. G. (Sutton Coldfield)	Pitt, Miss E. M.	Turton, Rt. Hon. R. H.
Longden, Gilbert	Pott, H. P.	Tweedsmuir, Lady
Low, Rt. Hon. Sir Toby	Powell, J. Enoch	Vane, W. M. F.
Lucas, Sir Jocelyn (Portsmouth, S.)	Price, David (Eastleigh)	Vickers, Miss Joan
Lucas, P. B. (Brentford & Chiswick)	Price, Henry (Lewisham, W.)	Vosper, Rt. Hon. D. F.
Lucas-Tooth, Sir Hugh	Prior-Palmer, Brig. O. L.	Wade, D. W.
McAdden, S. J.	Profumo, J. D.	Wakefield, Edward (Derbyshire, W.)
Macdonald, Sir Peter	Ramsden, J. E.	Wakefield, Sir Wavell (St. M'lebone)
McKibbin, A. J.	Rawlinson, Peter	Walker-Smith, Rt. Hon. Derek
Maclay, Rt. Hon. John	Redmayne, M.	Wall, Patrick
Maclean, Sir Fitzroy (Lancaster)	Rees-Davies, W. R.	Ward, Rt. Hon. G. R. (Worcester)
Macleod, Rt. Hn. Iain (Enfield, W.)	Remnant, Hon. P.	Ward, Dame Irene (Tynemouth)
MacLeod, John (Ross & Cromarty)	Renton, D. L. M.	Watkinson, Rt. Hon. Harold
Macmillan,Rt.Hn.Harold(Bromley)	Ridsdale, J. E.	Webbe, Sir H.
Macmillan, Maurice (Halifax)	Rippon, A. G. F.	Whitelaw, W. S. I.
Macpherson, Niall (Dumfries)	Roberts, Sir Peter (Heeley)	Williams, Paul (Sunderland, S.)
Maddan, Martin	Robertson, Sir David	Williams, R. Dudley (Exeter)
Maitland, Cdr. J. F. W.(Horncastle)	Robinson, Sir Roland (Blackpool, S.)	Wilson, Geoffrey (Truro)
Maitland, Hon. Patrick (Lanark)	Robson Brown, Sir William	Wood, Hon. R.
Markham, Major Sir Frank	Rodgers, John (Sevenoaks)	Woollam, John Victor
Marlowe, A. A. H.	Roper, Sir Harold
Marples, Rt. Hon. A. E.	Ropner, Col. Sir Leonard	TELLERS FOR THE AYES:
Marshall, Douglas	Russell, R. S.	Mr. Oakshott and Mr. Wills.
Mathew, R.	Sandys, Rt. Hon. D.
NOES
Ainsley, J. W.	Burke, W. A.	Delargy, H. J.
Allaun, Frank (Salford, E.)	Burton, Miss F. E.	Diamond, John
Allen, Arthur (Bosworth)	Butler, Herbert (Hackney, C.)	Dodds, N. N.
Allen, Scholefield (Crewe)	Butler, Mrs. Joyce (Wood Green)	Donnelly, D. L.
Anderson, Frank	Callaghan, L. J.	Dugdale, Rt. Hn. John (W. Brmwch)
Awbery, S. S.	Carmichael, J.	Dye, S.
Bacon, Miss Alice	Castle, Mrs. B. A.	Ede, Rt. Hon. J. C.
Baird, J.	Champion, A. J.	Edelman, M.
Balfour, A.	Chapman, W. D.	Edwards, Rt. Hon. John (Brighouse)
Bellenger, Rt. Hon. F. J.	Chetwynd, G. R.	Edwards, Rt. Hon. Ness (Caerphilly)
Bence, C. R. (Dunbartonshire, E.)	Clunie, J.	Edwards, W. J. (Stepney)
Benn, Hn. Wedgwood (Bristol, S.E.)	Coldrick, W.	Evans, Albert (Islington, S.W.)
Benson, Sir George	Collins,V.J.(Shoreditch & Finsbury)	Evans, Edward (Lowestoft)
Beswick, Frank	Corbet, Mrs. Freda	Fernyhough, E.
Bevan, Rt. Hon. A. (Ebbw Vale)	Cove, W. G.	Finch, H. J.
Blackburn, F.	Craddock, George (Bradford, S.)	Fletcher, Eric
Blenkinsop, A.	Cronin, J. D.	Foot, D. M.
Blyton, W. R.	Crossman, R. H. S.	Fraser, Thomas (Hamilton)
Boardman, H.	Cullen, Mrs. A.	Galtskell, Rt. Hon. H. T. N.
Bottomley, Rt. Hon. A. G.	Dalton, Rt. Hon. H.	George, Lady Megan Lloyd(Car'then)
Bowden, H. W. (Leicester, S.W.)	Darling, George (Hillsborough)	Gibson, C. W.
Bowles, F. G.	Davies, Ernest (Enfield, E.)	Gooch, E. G.
Boyd, T. C.	Davies, Harold (Leek)	Gordon Walker, Rt. Hon. P. C.
Braddock, Mrs. Elizabeth	Davies, Stephen (Merthyr)	Greenwood, Anthony
Brockway, A. F.	Deer, G.	Grenfell, Rt. Hon. D. R.
Brown, Thomas (Ince)	de Freitas, Geoffrey	Grey, C. F.

Griffiths, David (Rother Valley)	Macpherson, Malcolm (Stirling)	Ross, William
Griffiths, Rt. Hon. James (Llanelly)	Mahon, Simon	Royle, C.
Griffiths, William (Exchange)	Mainwaring, W. H.	Shinwell, Rt. Hon. E.
Hale, Leslie	Mallalieu, E. L. (Brigg)	Short, E. W.
Hall, Rt. Hn. Glenvil (Colne Valley)	Mallalieu, J. P. W. (Huddersfd, E.)	Silverman, Julius (Aston)
Harrison, J. (Nottingham, N.)	Mann, Mrs. Jean	Silverman, Sydney (Nelson)
Hastings, S.	Marquand, Rt. Hon. H. A.	Simmons, C. J. (Brierley Hill)
Hayman, F. H.	Mason, Roy	Skeffington, A. M.
Healey, Denis	Mayhew, C. P.	Slater, Mrs. H. (Stoke, N.)
Henderson. Rt. Hn. A. (Rwly Regis)	Mellish, R. J.	Slater, J. (Sedgefield)
Herbison, Miss M.	Messer, Sir F.	Snow, J. W.
Hewitson, Capt. M.	Mitchison, G. R.	Sorensen, R. W.
Hobson, C. R. (Keighley)	Monslow, W.	Soskice, Rt. Hon. Sir Frank
Holman, P.	Moody, A. S.	Sparks, J. A.
Holmes, Horace	Morris, Percy (Swansea, W.)	Steele, T.
Houghton, Douglas	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	Stewart, Michael (Fulham)
Howell, Charles (Perry Barr)	Mort, D. L.	Stonehouse, John
Howell, Denis (All Saints)	Moss, R.	Stones, W. (Consett)
Hughes, Cledwyn (Anglesey)	Moyle, A.	Strachey, Rt. Hon. J.
Hughes, Emrys (S. Ayrshire)	Mulley, F. W.	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Hughes, Hector (Aberdeen, N.)	Neal, Harold (Bolsover)	Summerskill, Rt. Hon. E.
Hunter, A. E.	Noel-Baker, Francis (Swindon)	Swingler, S. T.
Hynd, H. (Accrington)	Noel-Baker, Rt. Hon. P. (Derby, S.)	Sylvester, G. O.
Hynd, J. B. (Attercliffe)	O'Brien, Sir Thomas	Taylor, Bernard (Mansfield)
Irvine, A. J. (Edge Hill)	Oliver, G. H.	Taylor, John (West Lothian)
Irving, Sydney (Dartford)	Oram, A. E.	Thomas, George (Cardiff)
Isaacs, Rt. Hon. G. A.	Orbach, M.	Thomas, Iorwerth (Rhondda, W.)
Janner, B.	Oswald, T.	Thomson, George (Dundee, E.)
Jay, Rt. Hon. D. P. T.	Owen, W. J.	Timmons, J.
Jeger, George (Goole)	Padley, W. E.	Tomney, F.
Jeger, Mrs.Lena(Holbn & St.Pncs,S.)	Paget, R. T.	Ungoed-Thomas, Sir Lynn
Jenkins, Roy (Stechford)	Paling, Rt. Hon. W. (Dearne Valley)	Usborne, H. C.
Johnson, James (Rugby)	Paling, Will T. (Dewsbury)	Viant, S. P.
Jones, Rt. Hn. A. Creech(Wakefield)	Palmer, A. M. F.	Watkins, T. E.
Jones, David (The Hartlepools)	Pannell, Charles (Leeds, W.)	Weitzman, D.
Jones, Elwyn (W. Ham, S.)	Pargiter, G. A.	Wells, Percy (Faversham)
Jones, Jack (Rotherham)	Parker, J.	Wells, William (Walsall, N.)
Jones, J. Idwal (Wrexham)	Parkin, B. T.	West, D. G.
Jones, T. W. (Merioneth)	Paton, John	Wheeldon, W. E.
Kenyon, C.	Peart, T. F.	White, Mrs. Eirene (E. Flint)
Key, Rt. Hon. C. W.	Pentland, N.	Wigg, George
King, Dr. H. M.	Plummer, Sir Leslie	Wilcock, Group Capt. C. A. B.
Lawson, G. M.	Prentice, R. E.	Wilkins, W. A.
Ledger, R. J.	Price, J. T. (Westhoughton)	Willey, Frederick
Lee, Frederick (Newton)	Price, Philips (Gloucestershire, W.)	Williams, David (Neath)
Lee, Miss Jennie (Cannock)	Probert, A. R.	Williams, Rev. Llywelyn (Ab'tillery)
Lever, Harold (Cheetham)	Proctor, W. T.	Williams, Ronald (Wigan)
Lindgren, G. S.	Pursey, Cmdr. H.	Williams, Rt. Hon. T. (Don Valley)
Lipton, Marcus	Randall, H. E.	Williams, W. R. (Openshaw)
Logan, D. G.	Rankin, John	Willis, Eustace (Edinburgh, E.)
Mabon, Dr. J. Dickson	Redhead, E. C.	Wilson, Rt. Hon. Harold (Huyton)
McCann, J.	Reeves, J.	Winterbottom, Richard
MacColl, J. E.	Reid, William	Woodburn, Rt. Hon. A.
MacDermot, Niall	Rhodes, H.	Woof, R. E.
McGhee, H. G.	Robens, Rt. Hon. A.	Yates, V. (Ladywood)
McGovern, J.	Roberts, Albert (Normanton)	Zilliacus, K.
McKay, John (Wallsend)	Roberts, Goronwy (Caernarvon)
McLeavy, Frank	Robinson, Kenneth (St. Pancras, N.)	TELLERS FOR THE NOES:
MacMillan, M. K. (Western Isles)	Rogers, George (Kensington, N.)	Mr. Popplewell and Mr. Pearson.

Bill accordingly read a Second time and committed to a Committee of the whole House.

Committee Tomorrow.