HL Deb 11 March 1985 vol 461 cc19-27

3.40 p.m.

Lord Glenarthur

My Lords, with the leave of the House I will now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Social Services. The Statement is as follows:

"With permission, Mr. Speaker, I will make a statement on charges to be applied within the health service in the coming year.

"In the next financial year the health service plans to spend an extra £800 million, bringing total spending up to some 17½ billion. That is an increase of over 20 per cent. in real terms since this Government came to power. In England alone the health service will be spending an extra £670 million next year. The great bulk of that extra spending will be paid for from taxation and national insurance.

But, as the Government's detailed spending plans made clear, the Government believe that there should be some increase in the contribution from direct charges.

"In the field of prescription charges we are seeking an extra £19 million of income to help offset the cost of the drugs bill, which now stands at £1 ½ billion a year. Because of the exemptions policy almost three-quarters of prescriptions are dispensed free of charge. This means that the retired, those on low incomes, including those on supplementary benefit and family income supplement, children, expectant and nursing mothers and people suffering from certain conditions do not pay any charges. In addition, more than one in five of the prescriptions which are paid for are covered by prepayment certificates.

"It has been suggested recently that we should narrow the range of exemptions rather than seeking other ways of reducing the drugs bill. The Government believe it is right to protect those in need from the impact of charges and we do not, therefore, intend to make any change in the categories which are exempt from prescription charges. However, we do believe that those who can afford it should make a larger contribution. We have therefore decided to raise the basis prescription charge to £2. Even so, the charge will cover well under half the cost of the average prescription, which is now about £4.50.

"There will also be equivalent increases in the cost of the prepayment certificates.

"In the field of dental treatment there are again wide exemptions from charges. The existing range of exemptions—for children, those on low incomes and expectant and nursing mothers—will continue. These exemptions account for almost half of all chargeable courses of treatment. Dental examinations will continue to be free of charge for all. The charges for specific treatments—crowns, inlays, bridges and dentures—will increase by 6 to 10 per cent. The maximum charge for any single course of treatment will increase by just 4½ per cent. We have decided to change the structure of charges for routine treatment such as fillings and extractions and to relate the charge more closely to the cost of treatment. In future patients will pay the full cost of routine treatment up to a maximum of £17—rather than £14.50 as at present—but will they also pay two-fifths of any cost above that level. This new system will come into effect from 1st April.

"In the hospital service we intend to increase the charges for private patients and overseas visitors so that the charges meet the full cost of the services provided including all overheads, some of which have not been fully allowed for in the past. This will mean an average increase of just over 14 per cent. although there will be variations for different types of charge and hospital. These charges will now make a total contribution of over £60 million a year to health authorities' budgets.

"I am today laying the necessary regulations before the House so that these changes will come into effect at the beginning of April. My right honourable friends the Secretaries of State for Scotland and Northern Ireland will be taking the equivalent steps. A note providing full details of the changes is available in the Vote Office.

"The result will be that the health service remains predominantly funded by general taxation—which accounts for some 86 per cent. of expenditure. A further 11 per cent. is derived from National Insurance contributions. After the changes I have announced today charges will account for only some 3.2 per cent. of total health service spending.

"Mr. Speaker, the net effect of the changes the Government are making to all health charges this April will be to increase total income from charges by some £40 million next year. This will be a contribution towards the extra £670 million of health service spending we are planning for next year. If we want to see more resources going to the health service then charges must make a contribution to that growth, provided exemptions policy protects those who cannot afford to pay".

My Lord, that concludes the Statement.

Lord Ennals

My Lords, I should like to thank the noble Lord for repeating the Statement made in another place by his right honourable friend the Secretary of State, but I have to say that that is about the end of the thanks that I am going to give him except that I am glad that the Secretary of State is not narrowing the range of exemptions; that is one relief.

It is the view on these Benches that the decision announced in another place is a deplorable one. Yet again the sick are being taxed instead of the burden being spread across the bulk of the taxpayers. Is the noble Lord aware that since this Government came to power National Health Service prescription charges will have increased from 20p per prescription to £2 per prescription—ten times the amount, or an increase of 1,000 per cent.? We have seen a steady but sure undermining of the principles of the National Health Service, particularly taking into consideration increases in optical and dental charges.

The 40p increase is a 25 per cent. increase over a period of 12 months when inflation is running at 5 per cent. I want the noble Lord, in his reply, to say how the Government justify an increase of 25 per cent. at this time, particularly after a series of increases which have also been way above the level of inflation. Why should the burden of extra revenue for the National Health Service be placed on people who are sick and in need of treatment? I believe that it is a callous and inconsiderate policy.

Before I sit down I want to put three questions to the noble Lord the Minister. First, is this inflated tax imposed to replace the £25 million lost by adjustments to the limited NHS prescription list? Secondly, is the Minister aware of the very strong criticisms of both the British Medical Association and the British Dental Association at these further disincentives to people to make the best use of the National Health Service? Does he not realise that it is a serious deterrent to people who are not on supplementary benefit, not on FIS, or people who have not yet retired but who have very modest means, and that there are millions of those people in this country today? The third of my questions is: have these people not already paid for their National Health Service by the taxation which they have contributed over the years? Will the noble Lord accept that in our view this is a deplorable Statement which we shall want to debate and shall want to criticise again in detail?

Lord Kilmarnock

My Lords, we on these Benches would also like to thank the noble Lord for repeating that Statement. Again, we cannot welcome very much of its contents.

Can the noble Lord clarify one point for me? Am I not right in thinking that the expenditure of £17½ billion referred to in the Statement is the projected expenditure for 1986–87 and not for 1985–86, which, according to the Government's White Paper on expenditure, appears to be £16½ billion? As to the £800 million increase, can the noble Lord say how much of this is in respect of capital expenditure and how much is in respect of revenue expenditure?

On the prescription charges, as the noble Lord, Lord Ennals, has said, we have a 25 per cent. increase, which is five times the rate of inflation. This is on top of the announcement of the limited list. Would it not have been better to wait for the results of any savings which might come from the limited list before making such a swingeing increase in the prescription charges? Further, is it correct to say that exempted categories do not pay any charges? Surely their exemptions will extend only to the limited list. Is it not therefore likely that many old people will quite simply be unable to obtain the products on which they have been relying unless they can pay the private charge?

The dental charges also appear to have gone up above the rate of inflation. Would the noble Lord not agree that a further review of all the dental services is now required? It seems practically to have gone to pieces and to be no longer, in effect, a National Health Service.

Can the noble Lord say a word about the reported abuse of National Health Service facilities by consultants, which is reported today in the Guardian? If there is anything in that, would he not agree that some of this money—perhaps a great deal of this £19 million—could have been saved by a proper accounting for the procedures of consultants with private patients in National Health Service facilities? Finally, can the noble Lord say how much has been saved since the beginning of the scheme to charge overseas visitors?

3.51 p.m.

Lord Glenarthur

My Lords, I am grateful to both noble Lords for their comments on the Statement. I cannot agree with the noble Lord, Lord Ennals, in a great deal of what he says. He says it is a deplorable Statement and that these sorts of charges should be avoided at all costs. The noble Lord must realise—I am sure he does, if he really thinks about it—that if one wants more resources for the health service then somehow or other they must be paid for. If the noble Lord wants to do many of the things that he challenges me about so regularly across the Floor of the House, then these must be paid for somewhere along the line.

I should like to know—I do not know whether the noble Lord can tell me—how the Opposition proposes to raise the sort of money for the many facilities it wants in the health service without the kind of action I have announced. I must stress to the noble Lord that the people who are really in need are those whose exemptions stand and who will be able to maintain the very real benefits they get from free prescriptions. Seventy-two per cent. of all prescriptions which are issued are free. A further 6 per cent. of items which are paid for by pre-payment prescription certificates are also free; so only about 20 per cent. of the prescriptions are charged for. I think it is hypocritical to call for more spending on health but to condemn the means which we have to adopt to raise the necessary money.

The noble Lord asked me a number of questions. He asked, first, whether or not we were aware of the BMA's views that this is a disincentive to health care. I am aware of many views which the BMA and others take on these cases, but the fact is that, as I have said, somewhere along the line more resources have got to be paid for. The noble Lord should bear in mind that three-quarters of prescriptions are free and that almost half of the dental courses are also free. He feels that it is a deterrent to raise charges in this way, but I have to tell him again that the charges raised are for those who can best afford to meet the cost of prescriptions. As I said, the majority are already free.

In regard to the noble Lord's question about the £25 million lost in the limited list, I would say "No". These charges have risen year on year, as he will be aware. That £25 million was a figure that he produced. We estimated originally that the savings on the limited list would be up to £100 million, and at the end of the day we have a figure of £75 million. The fact is that we have to raise these charges if we are realistically going to meet the needs of the health service throughout the rest of this century. It is all very well for the Opposition to suggest perhaps even getting rid of charges. It did so once, but it had to bring them back again when it realised the financial implications of doing without them. Nor does it say how it will find the extra£½ billion to pay for the service should it not have them.

The noble Lord, Lord Kilmarnock, asked me a number of questions. I am afraid that I cannot give him the breakdown between revenue and capital expenditure on the £800 million, but I shall find out and let him know. In regard to exemptions in the limited list, the charges we are talking about raising—the prescription charges which are being increased in line with the Statement which I have just repeated—refer to all those which can be prescribed, so obviously if a drug is not on the limited list—that is to say, on the black list—it cannot be prescribed, anyway; so it is not covered by the charge. The noble Lord mentioned a general review of the dental service. My right honourable friend the Secretary of State and my right honourable friend the Minister for Health continually look at all aspects of the health service. I do not think the situation calls for a particular review, but of course the whole issue is reviewed from time to time.

The noble Lord asked particularly about the possible fraud implications he read about. All I can say here is that we asked the statutory auditors to investigate the position in 37 health authorities; I think we did that some time last summer. There perhaps is some evidence of financial laxity. This is a finding of the report they were asked to provide. We have written to the authorities drawing their attention to it. There may be more information about this that I can give the noble Lord, and if there is then I shall certainly write to him.

I really must refute the charges that this is a tax on the sick. The fact is that in this particular case only those most able to meet the increased charges will have to do so. The bulk of those who really need to get free prescriptions get them free, and they will continue to get them free. The fact is that, even after the increased charges announced today take place, they will continue to account for only some 3.2 per cent. of total health service spending. That reflects the greatly increased expenditure by this Government on the National Health Service, which is what, apart from anything else, the noble Lord opposite appears to want so badly.

3.56 p.m.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that there are some of us who wish to thank him not only for repeating the Statement but for its contents? Is he aware that in an area in which possible expenditure is all but unlimited any responsible Government have to choose their priorities, as Governments have done in the past, and that it seems to many of us that the present Government have got it about right?

Lord Glenarthur

My Lords, I am very grateful to my noble friend for those remarks; I agree entirely with him. He and I can both see that the National Health Service is a pit into which one could pour the entire GNP and still not make everybody happy. That is why some choices have to be made. Nevertheless, the fact that the NHS has improved so greatly in the hands of this Government over the last six years demonstrates our commitment to it.

Lord Wallace of Coslany

My Lords, is the Minister aware that the interjection by the noble Lord, Lord Boyd-Carpenter, is exactly what one would expect? Therefore, we are not surprised, and we are not surprised that the noble Lord the Minister himself agrees with it. I should like to thank the Minister for repeating the Statement, but I should like to go further and sympathise with him for having to make it, because it is at least reactionary and certainly a Statement which can be—I warn the noble Lord about this—political dynamite.

I want to know the average cost of one item on prescription, and how this compares with the charge being imposed. It is true that some items cost less than the £2 to be charged. But I want to go further—this is the most serious part of what I want to say. I think that this is a penal charge on the long-term sick. If a person who is not exempted has to have two or three items—and there are many like this—the cost to him is going to be a considerable burden, because when you are sick there are other charges as well on the household. I am prompted to think of the stance taken by the Prime Minister when she referred to returning to Victorian values. It would perhaps be a return to Victorian values if the Government, in line with their general approach, published a list of old-fashioned Victorian remedies so that these charges could be avoided.

However, I return to the point about the increase in private charges which was made by the noble Lord, Lord Kilmarnock. The noble Lord the Minister gave an answer which, to say the least, was not satisfactory. There is far more in this situation than some people care to imagine. When there has been a thorough investigation and a thorough tightening up of procedures. I ask the Government to make a statement which this House and the other place should be able to debate. There is evidence of abuse, some of it deliberate and some due to sheer inefficiency. It is about time that the relationship between the private sector and the public sector is sorted out so that there is a fair exchange in one direction or the other. I have no objection whatever to co-operation.

However, at the moment my impression is—and I am not the only one who has this impression—that the private service is doing very well at the expense of the National Health Service. That is not deliberate, but is definitely due to weaknesses and, to some extent, abuses on the part of health service personnel. Therefore, I hope that we shall be able to debate both these orders. Looking back to the start of the National Health Service and looking at the situation pertaining today, in spite of the millions of pounds about which the Government have spoken, the health service is very sick indeed and this increase in prescription charges will certainly not help to improve the service.

Lord Glenarthur

My Lords, the noble Lord, Lord Wallace, asked me for the average cost of a prescription. I did repeat in the Statement that it was £4.50. Therefore, the figure of £2 is not even half the total cost. As regards the increase of charges being a penal charge on the long-term sick, I should remind the noble Lord of the pre-payment certificates which to some extent meet those charges. Those who require long-term medical care can arrange for those prepayment certificates, which mean a considerable decrease in the amount that they would have to pay if they paid the full amount.

At the same time as increasing these charges we are also making arrangements for refunds to be available in the case of pre-payment certificates purchased from 1st April where the holder either becomes exempt or dies within one month of the start of the certificate. This will apply both to the annual and four-monthly certificates.

As regards private charges and possible abuse, which the noble Lord, Lord Kilmarnock, raised and about which the noble Lord, Lord Wallace of Coslany, is concerned, we recognised that there were these problems, so we asked 37 health authorities to look into the matter.The audit revealed problems in many districts and it was a matter of great concern to the Government. Therefore, on 6th December my right honourable friend the Minister for Health wrote to all health authority chairmen asking for action to be taken to ensure that they have proper arrangements for collecting all income due. The regions are due to report back by the end of March on the action that they have taken. In all 17 cases which have been identified and which were mentioned in the article to which the noble Lord, Lord Kilmarnock, referred, the health authorities must take the necessary action to put matters right. My department will certainly check on that. There is no question of sweeping the issue under the carpet. The health authorities consider audit reports in public session unless it is not in the public interest for them to do so. Therefore, I think that the action we have taken in this case has pre-empted many of the criticisms that have been made.

I repeat that, basically, the burden (if there is a burden in this case) falls on those who can most afford to pay their medical charges, in the form of both dental charges and prescription charges. Those in the exempt categories who most need the free services will continue to receive them.

Baroness Sharples

My Lords, can my noble friend say how many people now belong to private insurance schemes?—because surely the vastly increased number must help the National Health Service.

Lord Glenarthur

My Lords, I cannot give my noble friend the figure for which she asks, but I can tell her that the amount of money which comes from contributions by private patients in the case of beds will amount to £62 million. Of course that is a great help to the National Health Service. What the party opposite never tells us is what it would do if it had to replace that money.

Lord Somers

My Lords, I hope that the noble Lord the Minister will accept that I believe he made a very good case for the increase in the charges, but I did not quite understand one point. Will it be possible for those who suffer from some chronic complaint and who have to have their prescriptions regularly renewed to have them at a reduced rate or possibly even free?

Lord Glenarthur

My Lords, perhaps I may explain to the noble Lord,Lord Somers, that there are some disorders for which specific substitution therapy is essential, and those suffering from those disorders are totally exempt. About six or so different disorders are involved. However, in answer to the noble Lord, Lord Wallace, I was referring to the pre-payment certificates which last for either four months or 12 months, for which the charges will now be £11 and £30.50 respectively. By purchasing these certificates those who require long-term medication may have what would otherwise be a much more expensive charge substantially reduced.

Lord Ennals

My Lords, the noble Lord the Minister was kind enough to ask me a question, which is perhaps strange, but I shall try to answer it. He asked how we would pay if we did not use the method that the Government have chosen. Throughout the period of the last Labour Government prescription charges remained at 20p—nothing like £2 at all. Of course there must be a limit to the total cost, but it should be borne by the taxpayer. I argued very strongly—and this is the answer to the noble Lord's question—that in our view it should not be borne by the sick; it should be borne by the whole population who pay taxes. When the noble Lord said that exemptions cover—

Lord Denham

Speech!

Lord Ennals

My Lords, I am answering a question asked by the noble Lord the Minister. He was talking about exemptions. Does the noble Lord realise that there are over 1.5 million unemployed people who are not exempt at all? If he hinks that those people are not entitled and are not in need, then he is absolutely wrong. This level of charge is a deterrent and it is silly, for either Ministers or Opposition spokesmen to think that they know better about their patients than doctors and dentists.

Lord Glenarthur

My Lords, of course I am aware that doctors understand the particular circumstances surrounding any patient. If I may say so, that is a pretty obvious remark to make. But the fact is that at the end of the day the doctors, the nurses and everyone associated with the National Health Service and the good that it provides must be funded. The noble Lord says that he will impose a blanket charge on the taxpayer generally. I am very interested to hear him make that particular remark and I shall note it with some care.

However, our view is that at the end of the day those who must be in a better position than those who are in the low income groups are those who should shoulder the burden. The noble Lord ought to be aware that among those people there are a great many who can well afford to make sensible housekeeping arrangements concerning their own personal finances to meet this sort of charge. That is why the charges have had to be increased. I repeat, over the years the health service has received a considerable boost as a result of the policies which the Government have pursued. Furthermore, we shall continue to do all we can to uphold the best traditions of the health service.