National Health Service (Hansard, 24 January 2002)

§ 3. Laura Moffatt (Crawley)
What changes he plans to NHS spending commitments. [27553]

§ The Chief Secretary to the Treasury (Mr. Andrew Smith)
As the Chancellor has previously announced, NHS resources in the UK are planned to reach £69.5 million by 2003–04. That represents an annual average increase of 5.7 per cent. in real terms over the period 2001–02 to 2003–04. Plans for future years will be set out in the 2002 spending review.

§ Laura Moffatt
Towns such as mine are having to cope with unprecedented spending on their public services, especially those provided by the national health service. Rightly, they—and I—want to hear from the Treasury team that the commitments are real and sustained, and will produce the public services that we so richly deserve. Is it not good to hear that spending is sustainable, and will benefit our communities?

§ Mr. Smith
I know how actively, energetically and effectively my hon. Friend has campaigned for health services on behalf of her constituents. She is entirely right. It is because the Government made the tough decisions required to establish the monetary and fiscal framework that the country needs, because we reduced the millstone of debt that we inherited from the Conservatives, because we placed the public finances on a sound basis and made the economic fundamentals strong, and because we are maintaining a platform of economic stability that we can and will sustain investment in our front-line services, which would be at risk if the Conservatives ever came near them.

§ Mr. Hugo Swire (East Devon)
Is the Chief Secretary concerned that the savings ratio has fallen by a third in the past year?

§ Mr. Smith
In fact, the savings ratio has been higher than the low point it reached under the—

§ Mr. Speaker
Order. The savings ratio has nothing to do with this question.

§ Mr. Andy Reed (Loughborough)
Rightly, constituents compare the state of the NHS in this country with other parts of Europe. However, NHS funding here is much lower than elsewhere. Last year, the Chief Secretary confirmed to me in a parliamentary answer that Britain remains one of the lowest tax countries in Europe; it is third from bottom. When will we bring in the resources required from those most able to pay—higher rate taxpayers—to ensure that we have financial security for the NHS not just in the short term but in the long term?

§ Mr. Smith
The share of GDP invested in the NHS was 6.2 per cent. under the Conservatives. It has risen from 6.9 per cent. to 7.4 per cent. this year. It will be 7.6 per cent. next year and reach 7.7 per cent. in 2003–04 995 as we move towards achieving the European average. On my hon. Friend's comments on taxation, we will keep each and every promise on taxation in our manifesto, on which both of us fought the general election.

§ Mr. Michael Howard (Folkestone and Hythe)
I am afraid that if the hon. Member for Crawley (Laura Moffatt) wants an extra £200,000 for her hospital, she will have to ask rather more biting questions than she did a moment ago.
Whose fault is it that the NHS underspent by £700 million last year?

§ Mr. Smith
The figure to which the shadow Chancellor refers is just 1.5 per cent. of the NHS budget. Last year's health underspend was lower than in just about any other Department. With end-year flexibility—this did not happen under the Conservative Government—Departments and agencies can carry forward money from one year to the next. A third of that money was specifically earmarked for expenditure which was known to be coming forward. The NHS plans to spend all the money that it has been allocated for this year.

§ Mr. Howard
In view of last year's history, how can the Chief Secretary possibly explain the letter from the chief executive of the south east region of the NHS, in which she asks trusts in the region, including in my constituency, to reduce spending in the current year by £60 million? Is it not clear that, from top to bottom, despite the heroic efforts of the doctors and nurses who work in it, the NHS is in a state of crisis?

§ Mr. Smith
I understand that the pressures to which the shadow Chancellor refers arise from extra prescribing costs during the year. There is no doubt that his trust, along with every other trust, is getting a very substantial increase in resources under this Government: a real increase on average of 5.7 per cent. year on year, more than twice the level that was provided by the Conservatives. When the Leader of the Opposition accuses NHS staff of treating patients no better than dogs, that is a grotesque slur on NHS staff dedicated to the principles of a caring service.