National Health Service Funding

HC Deb 09 May 2002 vol 385 cc257-61

2. Mr. Henry Bellingham (North-West Norfolk)

What discussions he has had with Mr. Wanless since the 2002 Budget on the contents of the final version of the Wanless report. [53544]

The Chancellor of the Exchequer (Mr. Gordon Brown)

In response to recommendations in Mr. Wanless's report, the Budget announced a five-year settlement for NHS spending—more than £40 billion extra by 2007–08. Because resources must be matched by reform, in line with Mr. Wanless's recommendations, the White Paper "Delivering the NHS Plan", published by my right hon. Friend the Secretary of State for Health, announced further major reforms. I have not met Mr. Wanless since he completed his report.

Mr. Bellingham

I thank the Chancellor for that extremely courteous reply. However, is he aware that in my constituency, the Queen Elizabeth hospital is facing serious shortages of radiologists, radiographers and nurses? Given that inflation in the NHS is running at 4.5 per cent., that 45 per cent of its budget goes on wages, that many employees who will be worse off as a result of the Budget will want inflation-busting pay increases, and that the NHS, as an employer, will have to pay out much more in national insurance contributions, what guarantee can the right hon. Gentleman give my local hospital that the much-needed resources will go to patient care? Surely it would have been better if Mr. Wanless had been asked to look at all aspects of health funding, as then we could have had a proper, constructive debate on the future.

Mr. Brown

If the hon. Gentleman wants more money to go to the hospital in his area he should support the Budget, which puts an extra £7 billion a year into the national health service next year and £40 billion extra by 2007–08. Perhaps he should be telling the shadow Chancellor that the Conservative party should change its position on the Budget.

Mr. James Plaskitt (Warwick and Leamington)

I am sure that my right hon. Friend will recall the Wanless report concluding: Success or failure will ultimately depend on how effectively the health service uses its resources. In the light of that conclusion, what mechanisms will my right hon. Friend put in place to ensure that patients get a real return on this record investment in the service?

Mr. Brown

As my hon. Friend knows, side by side with the Budget were the proposed reforms of the national health service that were agreed by the Secretary of State for Health and announced by him the next day. One set of proposals covers statutory audit, statutory inspection, the statutory right of patients to make complaints and for them to be dealt with independently, an annual report that has to be published each year for Parliament by an independent regulator of the health service, as well as local reports and prospectuses that must be published by each health authority. Information, the power to scrutinise and to carry out proper audit of the use of money, is enshrined in the way in which the health service works for the first time in its history. Equally, we have set national standards but are giving hospitals locally, through rewards for better performance, incentives to do better.

I believe that the combination of those factors as well as dealing with the performance of failing hospitals means that we will secure value for money. I hope that we can restore in this country the consensus on the national health service that existed for 50 years but has unfortunately been broken by the Opposition.

Matthew Taylor (Truro and St. Austell)

The Liberal Democrats would have preferred an increase in income tax rather than national insurance. However, we welcome the money that is being put into the NHS and the fact that the Government have at last admitted the obvious—that saving the NHS needed investment, which needed tax rises.

Did the Chancellor honestly have no idea that tax rises were necessary when he fought a general election campaign just a year ago? If he did know, why did he not have the courage to put that to the electorate so that they could choose the tax rise rather than have the Chancellor choose it after the election? Is that not an act of cowardice?

Mr. Brown

Not at all. We set up the Wanless inquiry in 2000; it worked through 2001 and made its interim report in December 2001. When we received its final report, we made a decision on what resources were needed. The more sensible way to go about things is to consider what resources are needed, to make a decision on what we need for the next five years, and then to make a decision on how to raise the money, but I know that that is not how the shadow Chancellor makes policy for the Liberal party.

Mr. John McFall (Dumbarton)

Will my right hon. Friend keep in mind the views of business on Wanless? The Select Committee on the Treasury received a submission from the CBI stating that £10 billion was lost in workplace absences in 1999. Does my right hon. Friend agree, therefore, that the huge cash injection will be good for both employers and employees, getting more people back to work and giving us a healthy nation?

Mr. Brown

I am grateful to the Chairman of the Treasury Committee for putting those views. We know that business loses about £10 billion a year as a result of people being unable to go to work due to ill health. We also know that in every major health care system in the world employers as well as employees make a contribution. The contribution of 1 per cent. from employers and employees is, in our view, the fairest way of going about funding the health service for the long term.

I am pleased that almost all political parties in the House, including the Liberals, support a health service free at the point of need. The unfortunate thing is that the only party which no longer supports a health service free at the point of need is the Conservative party.

Mr. David Ruffley (Bury St. Edmunds)

The Budget's fiddled assumptions can no longer conceal the £7 billion black hole in the Chancellor's NHS spending figure for five years' time. Will he confirm to the House whether taxes will have to rise, borrowing will have to rise, or both will have to rise, if he is to fill that black hole?

Mr. Brown

Once again, the hon. Gentleman, who is also a member of the Treasury Committee, does not conduct his research properly, despite the fact that he was a political adviser—[Interruption.]—probably because of the fact that he used to be a political adviser to the Conservative Government who failed to be re-elected. As was pointed out to him at the Select Committee, the costings for the NHS are given up to 2007–08. It is stated that, prior to the spending plans being set in the 2004 spending review, the fiscal projections assume departmental expenditure limit growth after 2005–06 of 2.5 per cent. in real terms, supplemented by an addition to allow for the five-year health settlement. That should answer the hon. Gentleman's question—as he should have known before he put it.

Mr. Dennis Skinner (Bolsover)

Does my right hon. Friend agree that when the Liberals open their mouths, we expect them to talk as their belly warms? On this occasion, they have already announced that they want to get rid of council tax at a cost of several billion pounds. They have been very revealing. Will my right hon. Friend comment on their policy? Would he adopt it? They have just announced that it would be a good idea to raise money for the national health service by increasing income tax. There are 11 million pensioners and about half of them probably pay income tax, so the Liberals are calling for a policy to tax pensioners.

Mr. Brown

It is absolutely correct that the national insurance change means that pensioners do not have to pay the tax rise. People who have served the community all their lives and who need the national health service will not have to make the additional contribution that they would have to make if there were an income tax rise. The shadow Chancellor who lives in Truro, as opposed to the shadow Chancellor who lives in Folkestone, must face up to the fact that he spends all his time going around the country talking about local decision making, but he wants to abolish the local taxation available to local councils through council tax. It is time that the Liberals thought out their policy before announcing it.

Mr. Christopher Chope (Christchurch)

I am disappointed that the Chancellor has not met Mr. Wanless since the Budget. Was not Mr. Wanless appointed on the basis that his report would be the beginning of a debate on reform of the health service rather than the end of that debate? Is not it clear that Mr. Wanless is saying that unless there is reform in the health service, much of the extra investment will be wasted? Does the Chancellor recall that the Secretary of State for Health stated that public service agreements set out the concrete improvements to be delivered in return for the extra investment we are making"?—[Official Report, 24 June 1999; Vol. 333, c. 458W.]

Those 1999 agreements did not deliver concrete improvements, unless the Chancellor thinks that the extraordinary record of more administrators than hospital beds is an improvement. When will we see improvements in return for the investment?

Mr. Brown

The improvements are taking place and will continue to take place, and the reforms that we have made as a result of the Budget will ensure that the £7 billion extra a year and the £40 billion extra by 2007–08 secures the value for money that is necessary, but sooner or later hon. Members will have to face up to their responsibilities in this matter. If Conservative Members no longer believe in a health service free at the point of need, they must tell us which charges they would introduce, who would have to pay private health insurance and what they would charge to visit GPs and hospitals. They must face up to the fact that the health service has to be paid for in some way and, if that is not done through taxation, it has to be done through charges or private insurance, which is now their policy.