The Royal Commission, which was set up by the right hon. Member for Huyton (Sir H. Wilson) in 1975, has presented its report to my right hon. Friend the Prime Minister. That report has been published today. Copies of the full report are available in the Vote Office and some copies have been placed in the Library.
The Government are grateful to the chairman, Sir Alec Merrison, and the other members of the Commission for the time and trouble that they have devoted to this important task. The Commission's report is long and detailed and it merits careful study. Today, I can make no more than a preliminary reference to a few of the issues with which it deals.
The Commission recommends that the administration of the Health Service should be simplified by eliminating, in most cases, one tier of management, and it recognises that management decisions should be taken at the lowest effective level.
A number of the Commission's recommendations will be costly, as the Commission itself recognises. But the Commission states:
It would be unrealistic to suppose that the fortunes of the NHS can be insulated from those of the nation".
On the question of private practice, the Commission sees no objection to a significant expansion of the private sector, provided that the interests of the NHS are adequately safeguarded. Nor does it consider the presence or absence of pay beds in NHS hospitals to be significant at present, from the point of view of the efficient functioning of the Health Service. It is, of course, the Government's policy to welcome the contribution that independent medicine can make to the health care of the nation, and we published our proposals in a consultative letter last month.
I should like to tell the House how we propose to handle the report. This report has been made to the Government, and it is now up to the Government to respond with our own proposals. On the major issues of structure and management we shall put forward proposals in a document in the autumn, and we shall invite early comments on that document from the interests affected. Subject to this consultation, it is our view that early progress is essential to simplify the structure of the Health Service and to devolve management authority to the lowest effective level.
A number of the Commission's more detailed recommendations will be studied by the Health Departments through the ordinary machinery.
Finally, this statement deals with general matters relating to the United Kingdom. My right hon. Friends the Secretaries of State for Scotland, Wales and Northern Ireland will be making separate arrangements for dealing with those recommendations which relate to their separate interests.
I welcome the first major review of the National Health Service since 1948. The Royal Commission is to be congratulated on its three-year effort. I join the Secretary of State in that respect. The Commission has produced a unanimous report, which reaffirms the basic principles that underpinned the establishment of the Health Service over 30 years ago.
I agree with the right hon. Gentleman that in the coming months we shall need to have wide public discussion and debate—and we should like a debate in the House when it resumes after the recess—on the recommendations of the Commission. In the meantime, however, I should like to pose some specific questions to the Secretary of State.
We are dismayed that the right hon. Gentleman has not accepted the Royal Commission's recommendation that there should be no change in the financing of the NHS, which is based on taxation of the whole community. Will he now give an undertaking that he will not consider any other form of financing, or insurance financing of the type headlined in the Daily Mail on Monday?
Secondly, I raise the question of the Health Services Board. I was interested to hear what the Secretary of State had to say about the private sector. The Opposition reject any extension of the private sector in the NHS. The Royal Commission has asked the Health Services Board, which the right hon. Gentleman proposes to abolish, to monitor certain aspects of the private sector. At paragraph 18.39 of its report, the Royal Commission makes specific reference to this matter. If the board is abolished, how does the Secretary of State propose to continue this monitoring?
Now that the Royal Commission has come out against charges, will the Secretary of State reverse the increases in prescription charges and dental charges proposed in the Budget?
As to the administrative structure, I was very interested to see that the Royal Commission criticised the multi-tier structure of administration. I heard Conservative Members cheering that announcement. Of course, that structure was created by the present Secretary of State for Industry. We certainly endorse any improvement. However, we shall want to study carefully whether it is possible to establish a more democratic method of finding members and representatives for the Health Service.
Finally, is the Secretary of State aware that in regard to the public sector of the NHS the Royal Commission recommends increased financing? The previous Government had set about increasing finance. What will the right hon. Gentleman do about this, particularly following the cuts that have taken place and with the increase in value added tax and in the cost of living that will take place over the coming months?
The right hon. Gentleman has asked a very large number of questions.
On the question of changing the basis of financing the Health Service, I am bound to say that the Government do not necessarily share the view of the Royal Commission that a service financed almost 100 per cent. out of taxation is the right answer. No other advanced nation has chosen to go down the same route. We believe that we need to examine alternatives that may provide opportunities for additional finance, for more local autonomy and for more patient choice.
On the question of the extension of the private sector, I think that the House will be not a little surprised to learn what the right hon. Gentleman said—that he wants to see no extension at all. That goes a very long way beyond the policy of the previous Labour Government, under which a considerable extension of the private sector was taking place and is now taking place.
On the question of the Health Services Board, there is no recommendation by the Royal Commission that the board should remain. We published our proposals in the document on 22 June. What has happened is that our proposals have come after the Commission's report was sent to the printers. The Commission took the board and various other things as given. But we have published our proposals on that matter.
On the question of charges, I find it a little difficult to reconcile the proposal that we should eliminate all charges—which would cost about £200 million a year—with the Commission's recognition that additional financing of the Health Service will be very difficult until the economy is on the mend. It scarcely lies in the mouths of Opposition Members to criticise charges when one bears in mind that they raised optical charges twice and dental charges three times during their last period of office.
On the question of structure, again it does not really lie in the mouths of Opposition Members to criticise my right hon. Friend the Secretary of State for Industry. No fewer than four Labour Secretaries of State committed themselves, in 1976, to the proposition that reorganisation provided an improved administrative structure. What the Royal Commission has said is that there needs to be a simplification and a devolution to the lowest possible level of management, which is very closely in line with the proposals that the Conservative Party put before the electorate during the general election campaign.
On the question of democracy in the Health Service, there is one paragraph that refers to the recommendation that 50 per cent. of health authority members should be nominated by TUC unions, and the proposal is not endorsed.
On the question of finance, I have nothing to add to what I said in the debate last night, when I made the point that 60 per cent. of the squeeze that the health authorities are now facing is made under proposals that were approved by our predecessors.
Does my right hon. Friend accept that there will be a wide welcome for the intention to get rid of one tier of administration in the National Health Service, and so save money, and for the intention to encourage private practice, which will bring much-needed additional money into the health services of the country generally?
Will my right hon. Friend comment on one of the important proposals of the Royal Commission with regard to disputes within the NHS? Indeed, will he go further and try to ensure that no-strike agreements are negotiated with the professional and other bodies working in the NHS, so that we do not again see the disgraceful disruption and hardship to patients that occurred last winter?
I am grateful to my hon. Friend. It is apparent that the main thrust of the report follows closely the lines of policy that I and my right hon. and hon. Friends have been discussing publicly during the period when we were in Opposition. There is a great deal in the report that we can endorse. That is why we are anxious to get ahead with implementation. The question of no-strike agreements, after last winter's events, has aroused great interest. This is a matter that we shall wish to carry forward in the course of our discussions with the unions and the professional bodies concerned with the National Health Service. I believe that there is a widespread desire that we should never again see a repetition of the events of last winter.
Does the Secretary of State agree that this is an outstanding and perceptive report on the National Health Service? He has already expressed his thanks to Sir Alec Merrison. I am certain that hon. Members on the Opposition Benches want to do the same. Does the right hon. Gentleman agree with the conclusion of the report, that the National Health Service is not suffering what the report calls a mortal disease susceptible only to heroic surgery? Will he resist the temptation that his right hon. Friend the present Secretary of State for Industry carried through, involving that sort of heroic surgery? Will he ensure that there is the maximum opportunity for all those who work in the Health Service and all in the House to discuss some of the important proposals contained in the report?
I am not sure how far the right hon. Gentleman is entitled to take credit for some of the points that the Royal Commission makes about the state of the National Health Service. The Commission makes the point that the National Health Service is certainly not on the point of collapse. That is the view that I believe is held by most hon. Members on both sides of the House. The Commission equally recognises that the National Health Service can no longer be described as the envy of the world—a phrase with which the right hon. Gentleman was free during his period of office.
I believe that the main thrust of the report dealing with structure will have support in all parts of the House—that we want to make sure that decisions are taken at the lowest possible level within the Health Service, that there should be the elimination of a tier of management, and that there should be a clear distinction between the planning and strategic functions of a regional authority and the operational control by local health authorities.
I declare an interest as a member of the staff of one of the London medical schools. Will my right hon. Friend accept that many of us, particularly those who have had the opportunity to look at the work of the Health Service from close quarters, will welcome recommendation 108 to simplify the administrative structure? Will he give an assurance that in simplifying the structure as compassionately as possible, some of the administrative staff presently engaged will not be re-engaged and redistributed but that there will be cuts in administrative staff?
Will my right hon. Friend also give an assurance that the special position of the London teaching hospitals, with their expertise, will be safeguarded and not subjected to the same type of resource alloca- tion working party reallocation that is true for the rest of the country?
It is inevitable that in the process of simplifying the structure there will be some redeployment of jobs within the Health Service. We shall need to examine with the staff interests concerned to what extent they may have to be met by legislation and some kind of a staff commission. We envisage not a major "big bang" reorganisation but a gradual process which the Royal Commission itself recommends should be spread over a period of two years from the start of the reorganisation. We wish to make sure that more of the scarce resources available to the National Health Service are devoted to patient care.
I recognise that my hon. Friend is closely interested in the question of RAWP and the London teaching hospitals. There is no future for medical education or for the London teaching hospitals if they are starved of the resources necessary to maintain medical teaching of the highest level. This applies to all teaching hospitals. The standards of excellence of British medicine depend upon a high quality of teaching. It was a short-sighted policy that at one stage looked to threaten those standards of excellence. I believe that the principle of RAWP is right and that we should seek to provide a more even balance of resources throughout the country, but this must be a process of levelling up and not levelling down.
Why did not the Secretary of State wait to read the critical report of the Royal Commission on prescription charges before putting them up? In considering removal of a tier of administration by reorganisation, will he take note of the fact that it will not necessarily be the same tier in all parts of the country that is appropriate for removal?
On the first point, we face the choice whether to cut services or increase charges. On the question of prescription charges, unlike my predecessor, I felt it was right to maintain the level of services but to put up charges. I believe that the House has endorsed this proposal. On the second point, the Commission makes the point that a two-tier service is, for the most part, what is necessary in the country. It will be for the health authorities, under the guidance of regional health authorities, in each part of the country to determine what is the best structure in their part of the country.
Reverting to charges, does my right hon. Friend accept that, while it is possible to be opposed to charges in principle, as the Royal Commission appears to be, the practical aspect of the matter is that the abolition of charges would involve additional expenditure of £200 million or a reduction in services elsewhere? Will my right hon. Friend take on board the fact that many of us would prefer to see the continuation of charges rather than to see a reduction of services?
My hon. Friend has restated my own view. It is interesting to note the Royal Commission's estimate—£200 million—is made up of £140 million as loss of revenue and £60 million as the extra use of the service that will be made if there are no charges. One must question the value of some of the extra £60 million that would go on drugs about which there is already a good deal of criticism.
Although the Royal Commission does not consider that the present number of pay beds in hospitals is significant, will the right hon. Gentleman do nothing to encourage or perpetuate these two standards of medical care, one for those who can pay and one for those who cannot? Does he agree that the privilege of quicker treatment and privacy should be decided on grounds of clinical need and not on grounds of who can pay?
I am bound to say that I think that the brewery workers in the Midlands who have decided on Private Patients Plan subscriptions, as part of their terms of service, may be wiser than the hon. Lady. We have dealt with the question of pay beds in our consultative letter issued by my hon. Friend the Minister for Health; I commend it to the hon. Lady. Its proposals represent a fair compromise of most of the views expressed in this House.
In connection with the funding of the Health Service in a time of economy stringency, do the Government recognise that there is a not unimportant part to be played at the margin between adequacy and advance by local voluntary activity and local fund-raising appeals? Will my right hon. Friend ensure that in his response to the report the National Health Service is made sufficiently flexible to take full advantage of this potential extra popular support?
My hon. Friend is absolutely right. We are always prepared to discuss with health authorities and voluntary bodies the way in which voluntary funds can supplement valuably the work of the National Health Service. We are prepared to discuss in some cases the question of leasing hospitals at peppercorn rents to voluntary bodies to run themselves rather than that they should be closed.
May I press the right hon. Gentleman again on the question of charges, in view of the firm case which the Commission has made, on three grounds: first, the social injustice which occurs when some taxpayers pay twice, the only ones paying twice being those who have to pay when they are ill; second, the need for preventive medicine rather than curative medicine, in which also charges play a part; and, third, the economic consequences or the economic case put forward by the Commission, which shows that it is nonsense to spend so much in collecting in many cases charges which are irrelevant in relation to the total amount paid?
May I remind the right hon. Gentleman that 89 per cent. of the National Health Service cost, now amounting to £8,300 million, is paid by taxpayers, and we are talking about the margin of £200 million? Does he agree that it would be right not to do what we did, for example, on Monday this week—that is, put on charges without the House having an opportunity to pray against them? Will he accept the Royal Commission as a holding operation until such time as the House can discuss these matters?
There was a good deal of criticism from the Opposition Benches in the debate last night because of the squeeze on prices and on pay—partly the previous Government's decisions and partly ours—of £100 million, and the right hon. Member for Salford, West (Mr. Orme) sought to jerk our tears over the consequences of what will happen. The hon. Gentleman is now asking that we should find another £200 million to replace the income from charges. I just have to tell him that "it ain't there". In these circumstances, I would rather keep on the charges than cut back the spending.
Will my right hon. Friend recognise that for a long time now a number of hon. Members have been saying that the National Health Service has needed a radical overhaul, and will he take it that we welcome the fact that it will now get it, but is it not true that there has been a decline in medical and hospital services over recent years? If the Opposition are now saying that money is necessary, as is the fact, where would they apply it now if they were unable to provide it over recent years to rectify the declining position?
I think that the evidence of declining standards in some parts of the Health Service is too serious to ignore, and the Royal Commission recognises that there are now grounds for anxiety in some services. Other services have had a low standard for many years, and the efforts of Governments of all political complexions—for instance, in trying to improve services for the mentally ill and mentally handicapped—can be shown to be producing results in many parts of the country. But the difficulty lies in the question of finance, and the Royal Commission says that we cannot separate the finance for the National Health Service from the general economic prosperity of the country. The proposals of my right hon. and learned Friend the Chancellor are set to raise and improve the economic prosperity of Britain, and the National Health Service will benefit from that in due course.
Surely the aim of reorganisation of the Health Service is to revert to what was, I believe, the most successful feature of the service of yesteryear, which was the local management committees. These committees were not only in close touch with the staff, with the doctors, nurses and so on, but they had an importance; they mattered. But that was destroyed. Will the right hon. Gentleman see whether he can put it back? Further, will he do me a personal favour and keep this work of the Royal Commission and its report out of sight from his right hon. Friend the Secretary of State for Industry, because if that character sees it he will destroy the Health Service again?
I know that the right hon. Gentleman echoes the views of a great many people both within and outside the Health Service, and it is certainly the recommendation of the report and the policy of the Government to make sure that the direction, the lay management, of the Health Service is at as low a level as is possible consistent with sound management.
Has my right hon. Friend seen the reference in the report to the cost to the NHS of road accident casualties, which in 1977, it says, was £44 million, and to the saving in Health Service resources which would arise if there were a substantial increase in the rate of seat belt wearing? Does he agree that it will be highly relevant for hon. Members to bear that point in the report in mind when deciding how to vote this coming Friday on the Road Traffic (Scat Belts) Bill?
As my hon. Friend says, the House will have an opportunity to express a view on the compulsory wearing of seat belts when it votes on the Private Member's Bill to be debated on Friday.
Is the right hon. Gentleman aware that the Royal Commission said that the National Health Service as presently financed represents good value for money and that raising prescription charges would neither make for better doctoring nor discourage frivolous use? Is he aware also that the Commission comes out strongly against any shift towards insurance-based schemes on the ground that bad risk groups who would have to pay high premiums tend also to be poor, so that either they could not pay the insurance or a two-tier system would develop between rich and poor? Will the right hon. Gentleman therefore give the answer which he did not give to my right hon. Friend the Member for Salford, West (Mr. Orme) and state categorically that the Government have no intention of moving in that direction?
On the contrary, I indicated to the right hon. Member for Salford, West (Mr. Orme) that the Government did not necessarily share the view of the Royal Commission on this matter, and we believe that there could be advantages from changing the basis of financing. We intend to carry forward our studies on that in order eventually to make up our own minds on the issue.
May we have an assurance that there will be a place for homoeopathic medicine within the restructured Health Service? Second, will my right hon. Friend assure the House that the community health councils will be restricted to dealing with their local communities and will not waffle on about generalities?
It has been made clear by successive Governments that homoeopathic medicine is, in theory, available on the Health Service. The problem lies in the difficulty of persuading enough practitioners to be trained in homoeopathic medicine to be able to provide a service across the nation, which certainly cannot be done at present. But I take careful note of what my hon. Friend says. As regards community health councils, it has always been my view, as was originally the intention of the legislation, that the CHCs are essentially local bodies to concern themselves with local interests in the health services in their immediate area. That is what they are there for, and I hope that they will confine their attention to it. They are by way of being an experiment, and clearly we shall need to review the future of community health councils in the newly simplified and decentralised structure towards which I hope we shall be moving.
May I draw the Secretary of State's attention to paragraph 7.63 of the report, which refers to the urgent need for additional financial resources to be made available to improve the quality of primary care services, particularly in inner London and other inner city deprived areas? Can we really wait three months for the right hon. Gentleman to make his views known about that matter, which, as I say, the Royal Commission regards as one of the greatest urgency?
This is certainly a matter which is engaging my hon. Friends and myself, and clearly it is of considerable seriousness. The problem has developed over a good many years, and it would be idle to pretend that it will be put right in three months. But I must make clear that the proposals which the Government will be putting forward in a document in three months will have to do with structure, administration and management. Those are the matters which we wish to get ahead with, because it is within the new framework that we hope to secure improved services in the future.
I know that my right hon. Friend is aware of the problems in the casualty service at Chorley hospital. May I draw to his attention paragraph 10.24 of the report, where the Commission says:
We think it preferable to leave to local decision the best way of meeting the demands on accident and emergency departments.
Will my right hon. Friend make sure that the casualty departments at small hospitals, away from the larger units, are given his particular attention, especially with reference to their staffing?
I know that my hon. Friend has already taken his constituency problem to my hon. Friend the Minister for Health, and it is being examined. It is one of a great many local problems which hon. Members on both sides of the House are facing, and I think that it underlines the desirability of making sure that local decisions are taken as near to the ground as possible. That is our objective.
Will the right hon. Gentleman accept that the increase in prescription charges has been levied by his Department and his Government because of their tax concessions to the rich, but will he acknowledge that the Royal Commission talks about the gradual but complete extinction of charges, and we are not talking about an immediate production of £200 million? What is his view about the gradual but complete extinction? Is he prepared to accept that, or does he wish actually to increase charges in the Health Service to force people into the private sector?
The truth of the financial dilemma underlying health care is that there can never be enough resources to satisfy all needs. That has been said by every Minister of Health since the NHS started. When Ministers have been faced with the choice of cutting services or putting up charges, some have gone one way, some have gone the other and some have done both. The previous Government chose to cut services and to put up some charges. We have chosen to try to maintain services and to put up charges. I would make the same decision again.
Will the right hon. Gentleman look carefully at the recommendations on geriatric psychiatric care in the light of what is happening in my constituency and his remarks about private practice? The waiting lists get longer for NHS patients, but it is easy to get treatment under private medicine. That is not a situation which anyone can accept.
I am not sure that I accept the hon. Lady's view. If people are prepared to pay and therefore to bring more resources into health care, that will be to the advantage of the NHS and of NHS patients. No one has ever suggested that long-stay care in geriatric or psychiatric hospitals could be the subject of insurance or, except in a tiny minority of cases, appropriate for private care.
However, if one could release more of the resources in the acute hospitals from the burdens carried by the National Health Service by encouraging people to take out insurance and to have private treatment, there would be more resources for the underprovided—for long-stay hospital care about which the hon. Lady is concerned.
The management of the Health Service in the Principality is a matter for my right hon. Friend the Secretary of State for Wales. As I said at the end of my statement, my right hon. Friends the Secretaries of State for Wales, Scotland and Northern Ireland will be carrying out consultations in relation to their own responsibilities. My main concern in this context is for England.
Does the right hon. Gentleman accept that the private medical sector is necessarily parasitic on the NHS, not least, for example, in its recruitment of nurses and doctors who have been trained at public expense? Would it therefore not be appropriate for some sort of levy or tax to be imposed on the private medical sector so that the hidden subsidy could be reimbursed to the NHS?
I am already in discussion with leaders of the private sector of medicine to see how far they can increase their contribution, particularly to the training of nurses. That is something which the nursing organisations would welcome and which the private organisations have said that they are ready to talk about. The point raised by the hon. Gentleman is one of which I am conscious, and I think that the method that I have described is the right way to meet it.
The Secretary of State has been less than clear, to say the least, on the issue of pay beds. The Royal Commission recommended that the Health Services Board should be strengthened. The Commission supported the phasing out of pay beds. If the right hon. Gentleman is to abolish the board, who will monitor the phasing out of pay beds?
It was extraordinary that the Secretary of State's defence against the suggestion that charges should be abolished was that it would cost £60 million more. Does that not mean, therefore, that there are people who need prescriptions and are not able to get them because they cannot afford them?
On the first point, I must refer the right hon. Gentleman to the consultative letter that was sent out on 25 June. That made clear the Government's policy. The Royal Commission sent its report to the printers before that letter was sent out. There is no recommendation to phase out pay beds and no recommendation to keep the Health Services Board. The Commission assumed that the board would remain in existence. If, as a result of our consultations, our proposals are endorsed, the board will go out of existence. There will be one quango less. It will be the responsibility of the Secretary of State to monitor the balance between the public and private sectors. Our consultative letter made that clear.
On the right hon. Gentleman's second point, I find the attitude of Labour Members rather strange. When we debate the problems of the drug industry we are told that it is responsible for forcing large quantities of unnecessary drugs on patients who do not need them. When we impose a disincentive to that we are told that people will be deprived of care that they need. Labour Members cannot have it both ways.
On a point of order, Mr. Speaker. I do not wish to question your calling of hon. Members to put supplementary questions on the statement about the report of the Royal Commission on the National Health Service. However, if you had had the opportunity of consulting the report you would have found in the appendix that the hon. Member for Newport took the trouble to submit evidence to the Royal Commission.