Health Service Expenditure

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 25th June 1998.

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Photo of Simon Hughes Simon Hughes Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Health) 12:00 am, 25th June 1998

What the implications are of the proposals set out in his oral statement of 11 June 1998, Official Report, columns 1195–201, for expenditure on health services over the next three years. [46157]

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

Plans for the health services over the next three years will be set out in the comprehensive spending review. As I said a few minutes ago, the results of that review will be published before the summer recess.

Photo of Simon Hughes Simon Hughes Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Health)

I thought that the Chief Secretary might give that answer. May I help him by pointing out that there is some money that does not need to wait for the comprehensive spending review? The economic and fiscal report published by the Chancellor on the day of his announcement a few weeks ago revealed that the underspend for the last financial year was £1.5 billion more than expected. Therefore, there is now sitting in reserve, unallocated for this year, between £1 billion and £2 billion. It would be entirely possible both to meet the pay recommendation in full for all those in the health service, instead of its being phased, and to put an extra £1 billion or more into the NHS this year without using any additional revenue, collecting any more money or waiting until the next financial year. Given that the money is available, why has it not been spent?

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

It is well seen, as one political commentator observed, that the Liberal Democrats have not been near the Treasury for some 80 years. The Liberal Democrats' attitude to public spending is such that, the minute they think they see any money, they believe that it should be spent. They pay no regard to any other claims that might come the Treasury's way during the next financial year.

The fact is that the Government have invested an additional £2 billion in the health service in our first two years in office. Incidentally, the Liberal Democrats promised to invest only £1.1 billion in the first two years, so we have invested in the health service twice as much as the Liberals planned to do. The comprehensive spending review, which will be published shortly, will set out how much the Government believe that they can invest in the health service over the next three years. The most important factor that the Liberals have yet to grasp is that, unless public spending is built on sustainable foundations and, unless we ensure that we can afford public spending in the future, we shall return to the stop-go funding of public services, under which the health service suffered considerably. The Liberal Democrats know absolutely nothing about that—which is why it is highly likely that it will be at least another 80 years before they have any chance of getting near the Treasury.

Photo of Stephen Dorrell Stephen Dorrell Conservative, Charnwood

Can the Chief Secretary confirm that, from 1979 to 1997, Government spending on the national health service grew by an average of 3.1 per cent. more than inflation? Can the Chief Secretary commit the Government at least to matching that growth in the resources available to the health service? Failing that—more modestly—can he, at the very minimum, commit the Government to ensuring that the share of national income dedicated to the national health service is not allowed to fall? Will he commit himself to maintaining the higher share of national income that the previous Government committed to the national health service, over and above the record that we inherited from our predecessors?

Photo of Alistair Darling Alistair Darling The Chief Secretary to the Treasury

Since this is a day of welcoming, I welcome the right hon. Gentleman to his unaccustomed place in the Chamber. As a former Health Minister, he will know that one of the mistakes that the previous Government made was certainly to spend more money, but to spend it on health service bureaucracy and not on front-line patient care. The Government took the early step of ending the internal market in the health service, which set hospital against hospital and saw an inordinate amount of money spent on red tape. We are now spending that money on front-line patient care.

As a former Treasury Minister, the right hon. Gentleman will also be aware that, because the previous Government mismanaged the economy and misread the economic signals in the late 1980s, in particular, they were not able to ensure that the health service had a sustainable base for future funding. The health service, like every other service, suffered because of the stop-go nature of public spending.

In his statement a week or so ago, my right hon. Friend laid down a clear and stable foundation for all future public spending. The comprehensive spending review—the results of which will be announced shortly—will make abundantly clear the Government's commitment to the health service, in its 50th anniversary year, for the rest of the Parliament. We set up the national health service, and we shall ensure that it carries on into the next century in a way that the people of this country want.