National Health Service: Spending (Hansard, 16 March 1988)

§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale)
My Lords, spending on the National Health Service in the United Kingdom in 1987–88 has been increased from a planned level of £20.8 billion to £21.5 billion, an increase over the previous year of 5.3 per cent. in real terms. Additional allocations made by the Government included £328 million in respect of pay review body awards and, for the hospital and community health services, £145 million to meet both specific and general pressures. The Government's plans for 1988–89 to 1990–91 provide for an additional £3.5 billion for the National Health Service as a whole.

§ Lord Ennals
My Lords, I thank the noble Lord for his reply. Since the consensus among responsible organisations—the BMA, the Royal College of Nursing, the Institute of Health Services Management, the National Association of Health Authorities, the King's Fund and the all-party Select Committee on Social Services—is that the National Health Service still needs an additional £1 billion to cope with severe underfunding, and since the consensus of the four most recent opinion polls is that four out of five taxpayers would have preferred the Chancellor to have given that sum of money to the National Health Service rather than in income tax relief, does the Minister accept that the decision to do the opposite shows an extraordinary degree of insensitivity both to health needs and to the wishes of the taxpayers?

§ Lord Skelmersdale
No, my Lords. I do not think that it shows extraordinary insensitivity at all. As is well known, the Government make known their public expenditure plans in detail in January of each year. The Budget explains how those plans will be financed. However, the House should note that in his Budget speech yesterday my right honourable friend the Chancellor of the Exchequer said that over the coming year we shall be spending at least £1,100 million more on health care than in the year now ending. That can be found at column 998 of the Official Report of another place.

§ Lord Kilmarnock
My Lords, is the Minister saying that the Government propose to disregard entirely 1130 the recommendations of the Select Committee of another place which has a majority of Conservative Members? Among various other recommendations along the same lines, the committee recommended that there should be real expansion in development of the National Health Service of 2 per cent. in 1988–89? Will the Government pay any attention to that?

§ Lord Skelmersdale
My Lords, of course the Government always pay attention to and study with great care the reports of Select Committees of another place. In this case, the Government will be making a formal response in due course. However, my right honourable friend the Secretary of State thought it right to make clear that the Government do not accept that there is any need to provide additional funds in respect of 1987–88.

§ Lord Mellish
My Lords, does the Minister accept that the last time this matter was raised on the Floor of the House he said that an internal inquiry was being undertaken? When is that inquiry likely to be completed? Do the Government intend to announce their intentions and to comment on the report? Can he give more information about the inquiry?

§ Lord Skelmersdale
Yes, my Lords. The noble Lord is absolutely right. There is indeed an internal inquiry, chaired by my right honourable friend the Prime Minister, which is examining the resources, state and management of the National Health Service. It will be for my right honourable friend to make a decision, firstly, as to how long the inquiry will continue and, secondly, whether a report of some kind will issue from it at the end. I shall be very surprised if there is not a report.

§ Lord Orr-Ewing
My Lords, did my noble friend note that the Labour Party was anxious to make Budget day into National Health Service day? Was that a success? Was the National Health Service working exceptionally well yesterday or was it limping?

§ Lord Skelmersdale
My Lords, I observed that it rained for much of yesterday. I did not notice that the health employees who took industrial action made Budget day into a National Health Service day. I already know of 55 operations which had to be cancelled yesterday as a result of that industrial action.

Noble Lords
Shame!

§ Lord Cledwyn of Penrhos
My Lords, is the Minister aware that his right honourable friend the Chancellor of the Exchequer yesterday cut taxes by £1.8 billion and that the Select Committee to which my noble friend referred said that the National Health Service had been underfunded by about the same amount of £1.8 billion? How does he reconcile those figures? Does he think that that is the way to create a just and caring society?

§ Lord Skelmersdale
My Lords, in reply to the noble Lord the Leader of the Opposition, I made clear that 1131 public expenditure plans and paying for them were carried out in two separate operations and announced on two separate days. However, I should make the point that the Budget considerably increases the take-home pay of all employed people. The employees of the National Health Service, which is the largest employer in the kingdom, stand to gain significantly from the Chancellor's tax proposals. The precise position of individuals will vary according to circumstances, but on average a female nurse will be better off by £3 a week and an ambulance man by about £4 a week.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that there is clearly a genuine feeling throughout the country that the National Health Service should be treated fairly and, up to a point, generously? Does he know that the nation is aware of certain groups which are trying to turn that feeling into a weapon of party-political propaganda? Does he agree that his right honourable friend should take that into account so that the conclusions to which he comes will be based upon efficiency and fairness?

§ Lord Skelmersdale
My Lords, I agree absolutely with my noble friend. I should like to see the conclusions resulting from the review to which the noble Lord, Lord Mellish, referred and the various Whitley Council and pay review body awards to be based fairly and squarely upon logic.

§ Baroness Seear
My Lords, is the Minister aware that the change which many of us welcome in the mortgage interest relief, limiting it to the house and not to the number of persons, is likely to have a very serious effect on nurses, who are having difficulty trying to get housed in London and who have been getting together in twos and threes in order to make purchases? I should have thought that this will be a matter of very considerable concern to the noble Lord's department.

§ Lord Skelmersdale
My Lords, I am glad that the noble Baroness welcomes the proposal in general. It will indeed make a difference to those nurses who are clubbing together, because the new arrangements apply per house rather than per person.

Lord Wallace of Coslany
My Lords, I do not wish to make any narrow party political point, unlike the noble Lord opposite. However, will the Minister explain to me why, with these millions of pounds of additional money that the Government have given, in some instances wards remain closed or where they have been partially opened the future looks bleak for keeping them in operation? Why are wards still being closed after all this money has been given?

§ Lord Skelmersdale
My Lords, with the greatest respect, that is a very good question. The basic answer is that services have been allowed to expand to a greater extent than the money available.

The Viscount of Oxfuird
My Lords, is the Minister aware that the Opposition have complained 1132 frequently about the percentage of gross national product devoted by this country to the health service compared with other industrialised nations? Does that mean that people in other countries have better health than the people in this country?

§ Lord Skelmersdale
My Lords, the answers to the two parts of my noble friend's supplementary question are, yes and no. Although the United Kingdom spends less of its GDP on health care than some other countries, it has no worse health as a result. For example, it has a lower rate of infant mortality than Austria, Belgium, Italy and the United States, all of which spend more.

§ Lord Diamond
My Lords, with regard to the figures that the noble Lord gave in his first reply, can he tell the House what account has been taken in them of the relative price effect?
Secondly, can he tell us more generally whether it is considered that the National Health Service is still safe in the hands of the present Government?

§ Lord Skelmersdale
My Lords, yes. On the second part of the supplementary question, the record levels of health service expenditure which I described in my original Answer have been made possible by the Government's economic strategy, which has now seen the longest period of steady growth, at an average annual rate of 3 per cent., since the war. When considering figures—additional amounts of money for the National Health Service—the important factor is to make sure that what is allocated is wisely and properly spent. Therefore, yes, of course we take account of prices and wage inflation within the National Health Service.

§ Lord Ennals
My Lords, does the noble Lord agree that he was able to give the answers yes and no to his noble friend because of the excellent organisational structure of a tax-financed National Health Service? Is he aware that the current underfunding, and the Government's determined squeeze on the National Health Service, with all the consequences that we understand, lead some people to believe that the Government are doing this quite intentionally in order to show that the NHS now needs some major re-organisation with the emphasis on privatisation?

§ Lord Skelmersdale
My Lords, I had better not go into the question of privatisation in answering a question on the health service in your Lordships' House. However, these are record levels and how the noble Lord can possibly describe them as a cut is beyond my comprehension.

§ Lord Nugent of Guildford
My Lords, is my noble friend aware that year by year this Government have provided more for the National Health Service, and infinitely more than the party opposite, in particular, the noble Lord, Lord Ennals? It is a matter of judgment for the Government of the day to decide in their Budget how much can be allocated to each of the major services including the National Health Service. That this Government are getting it about right is indicated by the fact that, whatever other 1133 public opinion polls may show, a political poll shows the Conservative Party firmly 12 points ahead of the Labour Party.

§ Lord Skelmersdale
My Lords, yes, indeed I am aware of that; but quite clearly noble Lords opposite are not.

§ Lord Taylor of Gryfe
My Lords, although the Minister states that more has been spent on the National Health Service, will he accept that for various reasons there is still serious underfunding? In that event, how can he justify the fact that a married couple on £4,000 a year receive £55 remission from tax under the new arrangements but a couple with £70,000 per annum receive £7,914? Is that socially defensible? Are the Government's priorites right?

§ Lord Skelmersdale
My Lords, I find it very difficult to relate that question to the one that I am trying to answer today. However, I would point out that there are quite a considerable number of people—for example, consultants within the health service—who will he helped by the reduction in the higher rates of tax in pursuing their chosen activity.

§ Lord Carter
My Lords, in an earlier reply the Minister referred to the use of resources. Is he aware that in some hospitals it is now extremely hard to admit patients at all? In one hospital in the South-West on Sunday, Monday and Tuesday of last week the surgeons in just one department wished to admit 17 patients for urgent investigations. As a result of the stringency of the budget, there were beds available for only four. The doctors, nurses, porters and technicians still had to be paid and equipment at a cost of £1 million was left idle. The Government sometimes refer to the misuse and waste of resources within the health service. Does the Minister agree that a large proportion of that so-called "misuse" is a direct result of government policy?

§ Lord Skelmersdale
My Lords, no, of course it is not a result of government policy. The noble Lord should understand that we should all be thinking and talking about patients and not furniture. Over 1 million more in-patient cases are now being treated than in 1979. The number of cases is 6.4 million, a rise of 18.8 per cent., and that is the important figure to keep in mind.

§ Lord Carter
My Lords, would the Minister care to explain that to the 13 people who were not admitted?

Noble Lords
Next Question!

§ Viscount Hanworth
My Lords, will the noble Lord agree that we are facing two problems? The first problem is that the increase in high-tech is constantly demanding a substantial increase in the resources of the National Health Service. Secondly, it is arguable that the service may not have been as efficient as it could have been; but that does not excuse the Government cutting off funds with the idea of increasing efficiency when they are considering a long-term solution to the problems. In the meantime, 1134 we should not have to suffer what is being suffered by the National Health Service.

§ Lord Skelmersdale
My Lords, at least £1.1 billion extra for the National Health Service next year is no cut.