Health Spending (Hansard, 17 October 1994)

§ The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege)
My Lords, the OECD's figures take no account of the different definitions of health spending that are used nor of the greater efficiency and effectiveness with which the UK uses its resources.

§ Lord Jenkins of Putney
My Lords, I thank the noble Baroness for that Answer. But is she not aware that, in spite of those differences, the fact that we are 19th out of 26 in the recent examination of health spending in Europe gives cause for concern? Does she recognise that, while it is certainly true that our method of financing gives us a certain advantage, if we were to move from our present 6 per cent. up to the average of about 8 per cent., in reality that would bring us into the top half? I am sure that the Minister will agree that that is a position from which we should never have resiled.

§ Baroness Cumberlege
My Lords, I do think that this is a spurious argument because internationally there is no accepted definition of health. If one looks at the Netherlands, for example, it includes expenditure on private nursing homes; and other countries include social services. To concentrate on the amount that we spend, ignoring the efficiency and effectiveness with which resources are used, ignores our responsibility both to patients and to taxpayers.
The fact is that the NHS treats more patients than any other country and twice as many per bed as in Germany. We do not have the costly system which exists in countries such as France where large numbers of clerks need to be employed to process patients' claims for charges which they have paid for health services. Only three other EC countries provide free and universal access to both GPs and hospitals. Our record is very good.

§ Lord Orr-Ewing
My Lords, is my noble friend aware that in 1979 we spent £22 billion and in real terms we are spending here a total of £35 billion? That is an increase not of 6 per cent. or of 8 per cent. but of 57 per cent. in real terms in this country. Is that not a fine result?

§ Baroness Cumberlege
My Lords, my noble friend is absolutely right, and of course we have also given a cast iron commitment in our manifesto that spending will continue to grow.

§ Lord Peston
My Lords, is the noble Baroness aware that it is the case that the National Health Service is an efficient organisation and it always has been? Will the noble Baroness explain therefore why the Government have spent the past few years messing around with it? In particular, will she explain why their interventions have been based on American ideas in view of the fact that America, which has a market-driven system, is 8 universally regarded as having the least efficient system of health provision in the world? Why do we not stick to our own methods instead of undermining the service?

§ Baroness Cumberlege
My Lords, our system is very different from that which exists in the USA. I thought that the noble Lord was trying to draw an analogy with the USA. I am saying that our system is very different. If one looks at the system in the USA, there are between 30 million and 40 million people who are uninsured and who have no access to health care.
However, the OECD document praises our reforms. It says that the improvement in the annual rate of efficiency gains has been considerable; that we have had a surge in hospital activity, including a doubling in the rate of increase of day cases; that the success of fundholders as purchasers is to be applauded; that the focusing of DHAs' attention on local health needs and priorities is to be commended; that the initial encouraging indicators regarding the performance of trusts is also good; and that in our The Health of the Nation policy we lead the world.

§ Lord Hayhoe
My Lords, while the case can always be made out for increased spending on our NHS, will my noble friend endorse the fact that we need to ensure that the increasing resources which this Government have made available to the NHS are spent wisely and efficiently and that that requires good management? We are lucky to have so many dedicated and devoted managers in the health service backing up and supporting the clinical staff.
Will my noble friend take this opportunity also to repudiate in the clearest possible terms the absurd and wholly inaccurate and alarmist assertion made by Labour's shadow health minister in an article in the Evening Standard today that Guy's Hospital is to close? It is not closing. Indeed, the very expensive building to which she refers in the article is to be used broadly for medical care as was always planned.

§ Baroness Cumberlege
My Lords, my noble friend is absolutely right in his assertion that the National Health Service needs good managers. In fact, managers have delivered many of the reforms, albeit that they represent only 2 per cent. of the NHS workforce and 3 per cent. of expenditure on salaries and wages.
With regard to the future of Guy's Hospital, there is nobody better placed than my noble friend for he is the chairman of the board and clearly knows what lies in the future.
I believe that it is very wrong that the Labour Party should make those allegations when one realises that it was the Labour Party which cut NHS spending by 2.8 per cent. in real terms, the only real-terms cut in total NHS spending in recent history. It was the Labour Party which cut capital spending when it was in power by nearly 30 per cent., whereas we have increased it by over 70 per cent. in real terms. It was the Labour Party which cut nurses' pay, whereas the Conservative Party has increased nurses' pay by 52 per cent.

§ Lord Stoddart of Swindon
My Lords, do not the figures from the OECD simply confirm the criticisms of the health service and its spending which have been 9 made by experts in the field, including doctors and nurses? Therefore, would it not be as well for the Government now to accede to the request that I made before the Summer Recess; namely, that we have a Royal Commission into the working of the health service so that there can be no doubt as to who is right and who is wrong?

§ Baroness Cumberlege
My Lords, in its economic survey which was published in July of this year, the OECD said: The NHS was and is a remarkably cost-effective institution. It achieves comparable health outcomes with other large OECD countries". There is no doubt that, compared with the rest of Europe, we use our resources extremely well and that the health of this nation is improving.

§ Lord Stallard
My Lords, will the Minister give the same assurances to Baits Hospital as she has just given as regards Guy's?

§ Baroness Cumberlege
My Lords, as noble Lords will be aware, the future of Barts Hospital is still subject to consultation. No decisions will be taken until that process is complete.

Noble Lords
Next Question!

§ Lord Jenkins of Putney
My Lords, does the Minister recognise the fact that it is very easy to score party points on such an issue? However, if she will look at the Southampton study, about which she is aware, and study the report of the Financial Times on it she will see that on the balance of argument the United Kingdom is falling sadly behind. Can we look at it from an impartial point of view as it is matter of universal concern, rather than being given wholly biased figures such as those produced by the Minister this afternoon?

§ Baroness Cumberlege
My Lords, there is no body more impartial than the OECD, and it has given this country a clean bill of health.