NHS: Funding from Increased Taxation (Hansard, 6 June 1990)

§ The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper)
My Lords, the Government's successful economic policies, including our reform of the tax system, have enabled us to increase spending on the National Health Service by 44 per cent. in real terms since 1978-79, leading to the provision of more and better services generally. As an example, we are proud of our success in reducing the number of infant deaths. Infant mortality rates, a key indication of the nation's health, are currently lower than in any previous year.

§ Viscount Hanworth
My Lords, I thank the Minister for her reply. However, does she realise that the ever-rising costs of new technologies, equipment and so on mean that perhaps we should think about providing an 8 per cent. increase in real terms every year? Does she agree that, if the funds are not available directly, it would be as well to find out in this democracy whether the public would be prepared to have increased taxes of some form in order to keep the National Health Service running smoothly?

§ Baroness Hooper
My Lords, we are fully aware of increasing expectations in terms of the National Health Service and, indeed, the increased costs which new technology brings to it. Our aim is to achieve the best possible balance between spending for general basic services, which historically the 1371 National Health Service was created to provide, and hi-tech treatments. Our system of supra-regional services has played an important part in this process.
As I have said, we have ensured that the National Health Service has received a steady increase in real resources over the past 10 years. This, coupled with the measures that we have taken to improve efficiency and obtaining good value for money, has meant that the service has been able to keep pace with the demands of demography and medical advance. We intend that that process should continue.

§ Lord Boyd-Carpenter
My Lords, was it not our experience under Labour Governments that high and increasing taxation diminished the national product and therefore diminished the amount of wealth available for all these good purposes?

§ Baroness Hooper
My Lords, I am grateful to my noble friend for that comment. As the past 11 years have shown, cutting tax rates is not incompatible with spending more on the National Health Service. The Government's economic policies have led to growth, enabling more money to be spent to improve services. While the standard rate of income tax has fallen from 33 per cent. to 25 per cent., real national health spending has, as I said, grown by 44 per cent. It has increased both as a proportion of GDP and of public expenditure.

§ Lord Dean of Beswick
My Lords, the Minister's reply to the main Question referred to the decrease in the infant mortality rate. However, is she aware that in the central area of Manchester and also in other cities the number of deaths of children at birth and below the age of one year is still more than twice the national average, with very little sign of improvement? When will the Government do something about the situation by providing extra resources in this areas for that purpose?

§ Baroness Hooper
My Lords, I take note of the noble Lord's particular pleading in this matter. In general, we are continuing the good trend by the formation of a specialist group to investigate still births and infant deaths; by a critical review of research into cot deaths by the Medical Research Council; and by taking action to improve the capacity of the NHS to undertake post-mortems following infant deaths. We hope that the picture will continue to improve throughout the country.

§ Lord Hailsham of Saint Marylebone
My Lords, is my noble friend aware that if there is the vast volume of people eager for higher personal taxation, as postulated in the original Question, I can give them a nice list of reputable medical charities which they can support to great public advantage by putting their hands into their pockets?

§ Baroness Hooper
My Lords, I am grateful to my noble and learned friend for his suggestion. I should like to confirm once again that it is the Government's low tax policies which have led to economic growth thus enabling the provision of better services.

§ Lord Peston
My Lords, is the Minister aware that her answer is a trifle bizarre? Is she aware that the ratio of taxation to incomes has been higher throughout the Government's period of office than it ever was under the previous Labour Government? If it is true—it is in terms of the Government's published figures—that more seems to be spent on health at present than 10 years ago, how does she account for the acute crisis and lack of beds in all the major London teaching hospitals which, apart from anything else, place at risk the lives of Members of your Lordships' House every day of the week?

§ Baroness Hooper
My Lords, I draw the noble Lord's attention to the fact that the Question refers to personal taxation. I also point out that after social security health is the second biggest item in the Government's spending programme. The figures prove that there is a greater throughput in terms of hospital treatment; so while people may not be spending nights in beds, they are being treated in hospitals. There are more doctors and nurses, and more patients being treated, than ever before.

Lord Bruce of Donington
My Lords, is the Minister aware that the original Question referred to public opinion as to where the burden should be borne? If increased expenditure on the NHS is required—everyone seems to believe that that is true—have not public opinion polls over the past three years indicated a preference that that expenditure should be borne by general taxation? Will she inform her noble friend Lord Boyd-Carpenter that, in addition to income tax, taxation includes value added tax which was doubled by the Government?

§ Baroness Hooper
My Lords, we would be wise to be wary of polls showing that people are happy to pay more tax. In any case, as I have already said, the Government are spending more and improving services. Due to our successful economic policies, the GDP has increased and the NHS share of the GDP has increased.

§ Lord Gisborough
My Lords, to what extent is the problem one of a lack of funding or, alternatively, a lack of proper budgeting by each hospital or board so that they run out of money too early in the year? Secondly, will my noble friend confirm that the amount of money saved each year by the paying off of the national debt is equivalent to running about 170 hospitals?

§ Baroness Hooper
My Lords, I shall have to check on the last point raised by my noble friend. I have already pointed out that there is no question of there being a lack of funds. There has been increased funding. What is important is to achieve the proper management of that funding. All the measures that the Government have taken, and are taking, are intended to create a more efficient service and to improve the quality of clinical care and the delivery of care.

§ Lord Mellish
My Lords, is it not a fact that however much one puts into the NHS it is never 1373 enough because the demands will always be there? With the new technology and all that flows from it, the service will get bigger and bigger and brighter and brighter, and more money will be spent on it by government. So what are we all talking about?

§ Baroness Hooper
My Lords, the noble Lord is right as he so often is. We hope that demand will always outstrip what we can do.

§ Lord Tordoff
My Lords, following the question asked by the noble Lord, Lord Gisborough, and the Minister's undertaking to investigate the matter, if she finds that it is possible to fund 100 and something hospitals by not reducing the national debt, perhaps the Government might consider funding some new hospitals. Would that not be a much better idea?

§ Baroness Hooper
My Lords, we are funding, and have funded, new hospitals.

§ Lord Harmar-Nicholls
My Lords, while my noble friend is carrying out that investigation she might discover how many hospitals could be built out of the interest being saved from not having to fund the national debt.

§ Lord Molloy
My Lord, is the Minister aware that the majority of our royal colleges probably know more about the NHS than any of us; that many price increases have been met to a degree by the Government but that other aspects of the NHS are being neglected; that schemes have been introduced which are deleterious to the NHS; and that we are arriving at the worst possible world? The NHS is costing us more, and it is not nearly as efficient as it was 10 years ago.

§ Baroness Hooper
My Lords, the Government are well aware of the increased costs and demands of the NHS. Our reforms are intended to improve that service, to make it more efficient and to improve its quality.