NHS Funding (Hansard, 23 July 1998)

§ 2. Mr. Tony McNulty (Harrow, East)
What representations he has received on proposals in the comprehensive spending review in terms of the funding of the NHS. [50488]

§ The Chancellor of the Exchequer (Mr. Gordon Brown)
Within a falling debt-to-gross-domestic-product ratio and a current surplus over the next three years, we have made £21 billion available for the NHS, money for modernisation to improve services to patients. To deliver that agenda, responsibility in pay will continue to be necessary but, as a result of our decisions, 30 new hospitals are planned, 1,000 general practitioner surgeries will be renovated, and 7,000 more doctors and 15,000 more nurses will employed in the health service over the next three years. Our proposals have brought a favourable response in the representations that we have received.

§ Mr. McNulty
I welcome that response and the real increase of 3.7 per cent. over the next three years in NHS funding, compared with 2.5 per cent. under the previous Government. Will the Chancellor confirm that modernisation goes hand in hand with that additional funding? Does he believe that the public will welcome that approach, rather than the approach that involves cutting NHS spending, which is the policy of the Conservative party?

§ Mr. Brown
I agree entirely with my hon. Friend. This is money in return for modernisation. Resources will be available for reform in the NHS. As a result, £8 billion will be invested in new hospitals, clinics and GP premises. It has been possible to raise real-terms health service spending by 5.7 per cent. next year, 4.5 per cent. the year after and 3.9 per cent. the year after that. That is an 1241 average growth of 4.7 per cent. in real terms, far more than was ever achieved by the previous Government. Because of their policies now to cut public spending, the Conservatives will have to tell us which hospitals and which schools they would close.

§ Mr. Andrew Tyrie (Chichester)
Increases in NHS spending have frequently required calls on the reserve. Does the Chancellor think that it was prudent to announce a reserve that is smaller than any reserve announced by the six predecessors in his post?

§ Mr. Brown
The whole point of three-year plans is that Departments now make their decisions within the resources allocated to them. I would have thought that, as a result of seeing the stop-go in public spending under the previous Government, the hon. Gentleman would prefer three-year plans that will allow us to break from the short-termism of the annual cycle and to plan the proper delivery of services. The Conservative party has some questions to answer about its future policies.

§ Mr. Jeremy Corbyn (Islington, North)
What proportion of the increased expenditure on the NHS capital programmes comes from the private finance initiative? What will be the real cost to the NHS in the longer term of repaying private finance both in terms of the funding of each district health authority and each hospital and in terms of democratic control of the NHS which, in my view, might be handed over in part to the private sector through the PFI?

§ Mr. Brown
The difference between the private finance initiative under this Government and what happened under the previous Government is that, under the previous Government, public investment was replaced by private investment and, under our Government, public investment is being enhanced by private investment. That has made possible the 30 new hospitals that are being planned—work is already under way on eight. Private finance initiative schemes will produce the new hospitals and they will be very much part of the £8 billion invested in new hospitals and clinics. As a result of the changes that we have made, from a failed PFI unit in the Treasury when we took office to a new and reinvigorated public-private partnership unit in the Treasury now, we are determined to achieve the value for money that I should have thought was wanted by both sides of the House.

§ Mr. Edward Davey (Kingston and Surbiton)
Will the Chancellor explain why he seems so determined to leave the NHS totally unprotected and uninsured against the possibility of high inflation? Does he not realise that high inflation could have a damaging effect on the NHS? Why can he not simply say that he will use the higher tax revenues that will come with higher inflation to give a cast-iron guarantee to the House that he will maintain the spending on the NHS announced in his review in real terms?

§ Mr. Brown
The hon. Gentleman speaks as if we are not increasing NHS expenditure in real terms. It is being increased by 4.7 per cent. a year in real terms. The whole purpose of a three-year settlement is that, within the health budget, with the total increase of £21 billion, all the 1242 decisions about the use of resources can be made. It ill becomes the Liberal Democrats, who were suggesting that we should spend an extra half a billion a year on health—that is £1.5 billion over the next three years—when we have now allocated £21 billion, to start complaining about a Labour Government who have delivered when they can never deliver. It is a party that wants publicity without responsibility. That is all that it is.

§ Mr. Jim Murphy (Eastwood)
I listened to my right hon. Friend talking about the party that seeks publicity without responsibility. Has my right hon. Friend listened to the pledges and commitments of the Scottish National party in previous weeks and months? I notice that not one of them is here—

§ Madam Speaker
Order. The hon. Gentleman must ask a question about Government policy and not about other parties in the House.

§ Mr. Murphy
Has my right hon. Friend had time since the announcement of the spending review to investigate how his announcement compares with the pledges of other parties? Is he aware that the investment in Scotland's health service that is threatened by the SNP and its policies would mean 3,000 fewer nurses, 300 fewer doctors, 400 fewer intensive care beds and 4,000 fewer beds in our hospitals? Is it not true that, under the SNP, we would have cuts, cuts, and cuts again?

§ Madam Speaker
Order. The hon. Gentleman will resume his seat and it will be some time before I call him again.

§ Mr. Michael Fallon (Sevenoaks)
How can the Chancellor be so sure that his spending plans are securely based when independent survey after survey—Ernst and Young on Monday, the National Institute of Economic and Social Research this morning—all conclude that he is seriously over-estimating economic growth and tax receipts? Are all those reports wrong, or is it the type of self-opinionated arrogance that has driven prudence away?

§ Mr. Brown
Labour Members will not take lectures on arrogance from the hon. Gentleman. I urge him to read the NIESR report that he mentioned. It states: Despite our different assessment of future receipts, our forecast shows the Government's fiscal plans being broadly met. I hope that the hon. Gentleman will take note of that, and of what major economists and others have said about our plans.
Richard Jeffrey, chief economist at Charterhouse, said: This is an incredibly conservative package that…wasn't imaginable from an old Labour Chancellor.
Andrew Dilnot, of the Institute for Fiscal Studies, said: The rate of growth of spending is going to be slower than under the last Government". [HON. MEMBERS: "Oh!"] Yes—and Conservative Members accuse us of imprudence.
Adair Turner said: A reasonable combination of tight control of current spending and a welcome increase in capital expenditure. 1243 Conservative Members had better now make up their minds. Last Tuesday, when I made my announcement, they said that they wanted to cut spending. Every day after that, with each of our announcements, they have been anxious to increase spending. They must make up their mind whether they will be a serious party of opposition, or simply in opposition for years to come.