Public Services

– in the House of Commons at 7:12 pm on 3rd December 2001.

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker 7:12 pm, 3rd December 2001

We now come to the funding of public services. I must announce that the Speaker has selected the manuscript amendment, which is available to Members in the Vote Office.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer 7:23 pm, 3rd December 2001

I beg to move,

That this House
notes that the Chancellor of the Exchequer's statement to the House of 27th November has been contradicted in whole or in part by the Secretary of State for Health, the Chairman of the Labour Party and Mr. Derek Wanless;
further notes that the Chancellor of the Exchequer refused to endorse the statement made to the House by the Prime Minister on 28th November;
and condemns the total confusion over funding the public services which these contradictions have caused among users and providers of these services.

Last Tuesday was a black day for Britain's public services and was especially black for health care in Britain. The Chancellor of the Exchequer, in one breath, called for a debate on health care funding, then announced the result of that debate. It is no wonder that on Friday The Guardian reported one Minister as saying:

"Gordon's idea of a debate is Gordon and a mirror".

The conclusion of that one-man debate is that

"a publicly funded national health service is best for Britain".

The Chancellor arrived at that conclusion not because of any evidence but in the teeth of all the evidence, and did so despite the fact that the Prime Minister said less than two months ago that the barriers between public and private are coming down all over the world. The Chancellor arrived at his conclusion despite the fact that all the countries that provide their people with better health care than we do do not have such a system and despite the fact that the Organisation for Economic Co-operation and Development said only last week in its economic survey of the United Kingdom:

"Overall, the current plans to provide services privately in sectors such as health and education are limited. Such services are provided on a much larger scale privately in many OECD countries and greater ambition in this respect would raise competition and performance in these sectors."

The way in which the Chancellor reached his conclusions speaks volumes; it was the most bare-faced exercise in deception since he was deceived by the Prime Minister over sun-dried tomatoes in Granita all those years ago.

The Chancellor relied on the Wanless report. He said:

"So having examined whether a publicly funded national health service is sustainable . . . Mr. Wanless's view is that the principle of an NHS publicly funded through taxation . . . remains both the fairest and most efficient system for this country."—[Hansard, 27 November 2001; Vol. 375, c. 838-39.]

At all times last Tuesday the Chancellor gave the impression that Mr. Wanless had carried out an objective and authoritative inquiry into the best way to fund health care in this country. Of course, that was a million miles from the truth. First, the Chancellor fixed the terms of reference that he set Mr. Wanless so that Mr. Wanless could consider only a publicly funded health care model.

The terms of reference asked Mr. Wanless to

"identify the key factors which will determine the financial and other resources required to ensure that the NHS can provide a publicly funded service."

Far from asking Mr. Wanless to look at different methods, the Chancellor told him not to do that; he asked a Labour question and he got a Labour answer.

Photo of Phil Hope Phil Hope Parliamentary Under-Secretary, Office of the Deputy Prime Minister

I have a simple question for the right hon. and learned Gentleman. Will the Opposition match Labour's commitment to spending on the NHS and do they support an NHS based on clinical need, not on the ability to pay—his policy, which was leaked to the press?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The hon. Gentleman has asked an interesting question—[Interruption.] Yes, I will answer it. The hon. Gentleman asked whether I would match Labour's spending commitment on the NHS. We do not know what that commitment is—[Interruption.] I am coming directly to the hon. Gentleman's question, which I shall answer in detail; he just needs to be patient for a moment and he will have a comprehensive answer.

The references in the Wanless report to different systems of financing health care are all expressed in terms of their effect on the economy, itself a reflection on those terms of reference. They state that the report should allow the Chancellor

"to consider the possible implications of this analysis for the Government's wider fiscal and economic strategies in the medium term and to inform decisions in the next public spending review in 2002."

Most telling of all, the Chancellor's cover was blown within hours by Mr. Wanless himself. On Thursday, Mr. Wanless said:

"I've not sought to bury anything for good. It would be quite presumptuous and premature for anybody to think they could do that. When the figures are available about what resources are likely to be required that's the time at which people will be looking at the financial options . . . Issues about precisely how they should be financed are . . . not for decision now."

The Chancellor's own carefully picked appointee has given him the lie and directly contradicted him. When Mr. Wanless says that it would be premature and presumptuous of anybody to think that they could bury anything for good, who does the Chancellor think he had in mind? Who could he possibly be referring to but the Chancellor himself? The Chancellor's elaborate attempt to fix that exercise has collapsed about his ears.

It was not just the Secretary of State for Transport, Local Government and the Regions who "contaminated" the pre-Budget report last week; the Chancellor did so himself. His attempt to hoodwink everyone—the House, the nation, even the Prime Minister—has spectacularly imploded. It is not surprising that the Downing street spin machine swung into action.

Photo of John McFall John McFall Chair, Treasury Committee

Will the right hon. and learned Gentleman give way?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

In a moment.

The spin machine claimed that "everything's up for grabs"; that the Government were prepared to "think the unthinkable"; that Downing street is "less protective" than the Treasury; and that there are "no holds barred", but it was too late. On Tuesday the Chancellor had indeed barred the holds. He had boxed everyone in and slammed the door on the debate for which he himself had called. He has robbed our country of the opportunity for the better health care that we so desperately need.

I give way to the Chairman of the Select Committee on the Treasury.

Photo of John McFall John McFall Chair, Treasury Committee

The right hon. and learned Gentleman uses the word "hoodwink" freely. So that we can get it straight and so that he does not hoodwink anyone, will he reflect on his party's manifesto, which stated that the Conservatives would provide a fully comprehensive NHS, free at the point of use? Does he intend to hoodwink people and deny that now?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

We certainly will provide an NHS that is fully comprehensive, and we will spell out our detailed proposals long before the next general election.

Photo of Kali Mountford Kali Mountford Labour, Colne Valley

Is it still the policy of the right hon. and learned Gentleman's party to charge for some GP services? If so, which services does he intend to charge for?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The hon. Lady will have to wait some time before she gets an answer to that question, but she will get it long before the next general election, when the British people will see exactly what we propose.

Photo of John McFall John McFall Chair, Treasury Committee

On a point of order, Madam Deputy Speaker. I asked the shadow Chancellor a question, and I am dismayed that he did not answer the second part, about whether the health service would be free at the point of use. Can you come to my aid and ensure that he answers it?

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

That is a point of debate, rather than a point of order.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

I want the Chancellor to answer some questions when he replies to the debate. I want him to confirm whether, as has been widely reported, the Health Secretary was told of the Chancellor's intentions only on Monday last week, 24 hours before his statement. The Health Secretary is reported to be "furious". [Hon. Members: "Where is he?"] Surely my hon. Friends would not expect the Health Secretary to come and support the Chancellor. We are told, for good measure, that the Prime Minister is also angry, on behalf of the Health Secretary.

One of the most astonishing things about last week was that the Chancellor was disappointed by the coverage that his announcement received in the press on Wednesday. So what did he do? He cleared his diary and rushed down to Wapping to see The Sun. He told The Sun:

"I am going to insist any additional resources must be matched by reforms so that we get the best value for money. There is not to be one penny more until we get the changes".

That must have caused the Secretary of State for Health some alarm. After all, only 48 hours earlier he had been promised an extra £1 billion next year. No mention was made of any conditions. On Tuesday the Chancellor promises £1 billion, and on Thursday he says that the NHS must reform first. This is my first challenge to the Chancellor tonight: what exactly does he have in mind? When does he expect those reforms to be in place? What criteria will he use to decide whether to release the money? When will he make that decision, and when will he announce it?

I can tell the Secretary of State for Health that he need not worry too much. The Chancellor has told The Sun exactly the same thing before. He wrote an article for The Sun on 15 July 1998, in which he stated:

"We are determined you get value for every penny we spend to give you the public services you want. . . Unless standards and targets are met, they will lose money. It's payment by results."

Nothing happened, however. Nothing happened in 1998, in 1999, last year or this year. The money has continued to pour in and, as the Government admit, much of it has been wasted.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

As he is speaking of interviews, does the right hon. and learned Gentleman stand by his remarks in the Financial Times last week, that the NHS is a Stalinist creation?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The NHS is indeed a Stalinist creation. [Interruption.] Yes, it is. That is the age in which it was born, and it does much more to hinder and hamper the efforts of those who work in it—who work heroically despite it—than it does to help them.

Let us see how the evolving saga develops. After 18 years in opposition to consider these matters and after four years in government, what do the Government do? They set up a new committee. Once the Prime Minister got to know the terms of reference of the Wanless committee—he clearly did not know about them until they were produced in the House last Tuesday—he thought that he had better remind people of his own committee, the Adair Turner committee. So important was the Turner committee that the Prime Minister appeared to have forgotten all about it. The Chancellor certainly made no mention of it in his statement last Tuesday, yet on Friday night he was hurriedly dispatched to give an interview to "News at 10", giving the impression that it was an entirely new committee.

It is worth reminding people of the Turner committee. It was set up in October. [Interruption.] Labour Members should be listening to what their Prime Minister's committee—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The word "Order" applies to both sides of the House.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

I am interested that Mr. McNulty, from his usual sedentary position, says that it is not worth reminding people of the Turner committee, but it is his Prime Minister's committee, not mine. The Prime Minister set it up. It was set up in October and asked to do what was described as "blue sky" thinking, looking

"not less than five years and probably 10 to 15 years out".

However, we were told that its conclusions would never be made public. The outcome, Downing street said, would be "private, for private thinking".

My second challenge to the Chancellor is this: is that still the position, or have the Government changed their mind on that as well? Will we ever be told the conclusions of the Turner committee? If so, when? The Wanless committee is supposed to study the amount of money needed for health care. The Turner committee is supposed to examine the way in which health care is managed. It does not seem to have occurred to the Prime Minister and the Chancellor that there may be some connection between the two—between the way in which health care is financed and the way in which it is provided.

What health care in this country needs is not more committees; it needs radical reform so that the dedicated doctors and nurses working in it can be helped, and not hampered by the structure in which they work. It needs action to ensure that the money wasted on the NHS—between £7 billion and £10 billion, according to reports this weekend—is no longer wasted. It needs to be able to put an end to the state of affairs in which people die in our country from illnesses that they would survive in other countries. It needs extra resources, in addition to those that can be provided out of general taxation.

That is what happens in every other country with health care better than ours. It is what the OECD recommends, and what would offer the best prospect of bringing better health care to Britain. That is why today my right hon. Friend the Leader of the Opposition and the shadow Health Secretary are in Stockholm, as part of a series of visits to learn from other health care systems in Europe and beyond. Our party has put health care reform at the very top of our agenda.

Let no one be in any doubt about how badly we need better health care. Even the Prime Minister was unable last week to dispute the claims of his party chairman that far from improving, the national health service has gone backwards since 1997. Even Mr. Wanless says in his report:

"Across a range of health outcome indicators, the picture which emerges is one of generally poor outcomes in the UK relative to comparator countries, with significant gaps between the UK and the best performers for key outcome measures."

Even Sir Stephen Robson, a recent permanent secretary in the Treasury and someone who has worked very closely with the Chancellor, says:

"Don't have breast cancer or lung cancer, don't want to go to accident and emergency, don't want to have a non-urgent operation in the UK—you'd be better off in continental Europe."

This Government have made promise after promise on the health service. They have broken their promises, they are beginning to be rumbled, they have no idea what to do about it and the result is blind panic.

So, is it any wonder that the Chancellor and the Prime Minister are at sixes and sevens? Last Wednesday, the Prime Minister could not have been clearer. When asked whether it was still Government policy to raise health spending to the EU average by 2005, he replied, "Of course it is." The following day, the Leader of the House announced that he wanted to clarify that statement. We were told that when the Prime Minister had said 2005, he meant to say 2006. Conveniently, that means that he will have to be held to account after, rather than before, the likely date of the next general election.

Then the Chancellor got in on the act. In his interview with The Sun, he refused to explain what the Prime Minister actually meant. He refused to say whether the promise applied to EU spending at the time mentioned in the Prime Minister's original promise or in 2005, so the Prime Minister's official spokesman was brought in. When he was asked to shed light on this appalling mess, he said:

"the Prime Minister's words at PMQs this afternoon spoke for themselves".

Unfortunately for him, the Prime Minister took a different view. Yesterday, he decided to downgrade what had been a firm commitment to the status of a mere aspiration "in broad terms"—the Chancellor smiles about that, as he has had his way—and the Secretary of State for Health yesterday described it as an aim.

My third challenge for the Chancellor is this: will he now clarify matters? [Interruption.] Is it a firm commitment or a vague aspiration? Does it relate to European health spending in 2000, 2001, 2005 or 2006? Does it relate to averages including or excluding Britain? Are those averages weighted for population differences, or is Germany being given the same weight as Luxembourg? [Interruption.] And when will it be achieved: 2005, 2006, some time or never? [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. It is clear that the right hon. and learned Gentleman is not prepared to give way at this point.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

This is not some arcane, theoretical dispute, but a matter that is vital for the lives of every person in this country. The Chancellor must make the Government's position clear once and for all.

The confusion does not end there. The Secretary of State for Health and the chairman of the Labour party are reported to have called for a hypothecated health tax. They are said to have the support of the Home Secretary and the Secretary of State for Trade and Industry. Mr. Mandelson has asked the Government to consider compulsory social insurance or a ring-fenced health tax. He said:

"These systems must all be properly examined."

So, my fourth challenge to the Chancellor is this: does he agree with his Cabinet colleagues and the right hon. Member for Hartlepool, or with the Treasury aide who described the idea of a hypothecated health tax as foolish? The Chancellor has called for a consensus, but he cannot achieve it even in his own Cabinet.

If the Government, blinded by their prejudices against the private sector, refuse to put patients first, the Opposition will do so. We genuinely recognise that, in the words of the Prime Minister,

"round the world, the barriers between public and private are coming down".

Our overriding objective is to improve the quality of health care in Britain. We are not so arrogant as to believe that we can achieve better health care for the British people without learning from countries that have already achieved better health care for their people. We are not so dogmatic as to arrive at our opinions before embarking on our review and we are not so blinkered as to set the terms of reference, as the Chancellor did, so as to make the conclusions inevitable.

The Government have demonstrated in the past few days that we will never get the health care that we need so long as they remain in power. We must show that we will do better, and that is exactly what we intend to do.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer 7:45 pm, 3rd December 2001

I beg to move, as a manuscript amendment, in line 1, leave out from "House" to end and add

"welcomes the Pre-Budget Report with its emphasis on delivering high quality public services accessible to all in society as part of the Government's wider agenda to match resources with modernisation to progress reform;
particularly welcomes Mr Derek Wanless's interim report "Securing our Future Health: Taking a Long-Term View", the first comprehensive look at the long term funding needs of the Health Service;
notes Mr Wanless's conclusion that there is no evidence that any alternative financing method to the UK's would deliver a given quality of healthcare more equitably and at a lower cost to the economy;
and reaffirms its support as stated by the Prime Minister and the Chancellor for future increases in public funding and NHS reform to ensure a comprehensive high quality service available on the basis of clinical need and not ability to pay."

I shall answer all the detailed points that have been made and take interventions from the Opposition during my speech.

Hon. Members:

Give way!

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The House must come to order.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Before giving way, I want to set down our argument as a Government.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I have said that I shall give way during my speech, but I want to set down my argument.

First, we believe in a health service that is free at the point of need; the question that we must ask ourselves this evening is this: do the Opposition? Secondly, we believe in a health service that is principally funded from tax revenue—[Interruption.] Oh, indeed. The question is, do the Opposition? Thirdly, we believe in more investment in the health service, but the question is, do the Opposition? Fourthly, we believe in a continuing programme of reform in the health service, but do the Opposition still believe in the health service at all?

My hon. Friend Mr. McFall, the Chairman of the Select Committee on the Treasury, asked the shadow Chancellor a very interesting question at the beginning of the debate. He asked whether the Opposition still believed in a comprehensive health service that was free at the point of use. At the general election, all Opposition Members had no doubt about the answer to that question. Individually, like us and the Liberals, they stood for election on a manifesto—I quote the Conservative one—that referred to

"a comprehensive health service free to all its users."

Why could not the shadow Chancellor repeat that commitment this evening?

I shall tell the House why the right hon. and learned Gentleman could not do so, as I have in front of me the memorandum written by Mr. Flight to the shadow Chancellor on 12 November. It is marked "Private and Confidential". I am sure that the Opposition now wish that it had been kept private and confidential. Let me refer to what the Flight memorandum, as we will now call it, said. [Interruption.] It answers the very big question about why the shadow Chancellor could not say that he supported a free health service at the point of need. I think that Opposition Members should listen, because this will feature in every constituency in the country.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall be very happy to give way after making this point. The memorandum said:

"we remain vulnerable to the irritating attack that we are the Party who will be cutting back on healthcare expenditure to reduce taxation.

We need to resolve and agree how we are going to break out of this, well ahead of the next General Election, or we will have the same problems of emasculation in this territory, that we had this summer. I believe most of our colleagues are looking to the Treasury Team to address this territory, but clearly the key is the fleshing out of the broad policy guidelines which IDS has set out in relation to healthcare."

What is that broad policy guideline? The memorandum continues:

"Quite logically, we will, therefore, be looking to lower the taxes on people at the same time, enabling them to have more of their own money to spend on better and more efficient healthcare . . . Put more simply, what Iain has already said in principle, with regard to healthcare, should have the corollary of reducing taxation to leave people with more of the income . . . to spend on the provision of improved healthcare."

[Interruption.] Conservative Members should listen. We have reached the main point because the memorandum also states:

"The reforms, which we will be proposing, will end the NHS monopoly and will entail those who can afford it making some payment for healthcare services."

That is not simply a suggestion or idea. The deputy Treasury spokesman wrote that. [Interruption.] Conservative Members will have to face up to that in every constituency. I repeat:

"The reforms which we will be proposing . . . will entail . . . some payment for healthcare services."

The memorandum also states that solving problems will require

"a degree of charging for healthcare service."

[Interruption.] The shadow Chancellor already regrets the debate. Should not we be told whether the charges are for visits to general practitioners or to hospitals? Are they for operations? Are they for medical drugs that are currently free? What proportion of people would be expected to pay the charges? What services would the rest obtain? Who would be exempted? What would happen to the terminally ill, cancer patients and old age pensioners?

If Conservative Members call for a debate in the House about the future funding of public services, they have a duty to tell us—[Hon. Members: "No."] Oh yes they do. Every Conservative Member stood on a manifesto—[Interruption.] They cannot get away from it. They stood on a manifesto that stated that there would be a comprehensive health service that was free to all at the point of need. Yet the deputy Treasury spokesman says not that there might be charges, but that there will be charges.

Several hon. Members:

rose

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall give way to Mr. Goodman if he tells me how he will justify a policy of charging to his constituents.

Photo of Paul Goodman Paul Goodman Conservative, Wycombe

Will the Chancellor confirm or deny that the Secretary of State for Health received only 24 hours notice of his plans last week? [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The House must come to order. An intervention has been made and the Chancellor is responding to it.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The Secretary of State for Health received full notice of our decisions, but the hon. Member for Wycombe refused to say whether he supports charges.

Several hon. Members:

rose

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall give way in a minute. First, let us consider another piece of evidence. Nicky Campbell asked the Leader of the Opposition in an interview on Radio 5 on 22 June whether his health plans would involve people paying for treatment. The right hon. Gentleman replied: "Absolutely." Conservative Members cannot answer questions about their manifesto because they are planning charges for the health service.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

Will the Chancellor confirm or deny plans to raise the upper earnings limit on national insurance contributions to pay for health care?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

We gave our promises on taxation at the general election.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

Will the Chancellor clarify early in the debate whether the Prime Minister was right to say that the point of the Chancellor's statement last week was to ensure the fulfilment of the Prime Minister's commitment 18 months ago to raise spending on the health service to the EU average by 2005? Was the Prime Minister right?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Of course that is our policy. That is exactly what the Prime Minister said on Wednesday. The day before, I said that we wanted a substantially increased proportion of the national income to be used for health expenditure.

I shall explain what has happened in the past few years. As a proportion of national income, health expenditure increased from 6.9 per cent. That would not have happened under the Tories when the average was 6.2 per cent. Under us, it increased to 7.2 per cent. The Tories would not have done that. It will go up to 7.4 per cent., 7.6 per cent. and 7.8 per cent. Again, the Tories would not have done that. The Government are keeping their promises.

I want to explain to Conservative Members why charging is wrong. The debate must focus on that central point.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall give way in a minute. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. If hon. Members want to make a contribution, that is no way to go about it.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The shadow Chancellor refuses to tell us whether he supports charges. However, I have a copy of his election literature. He issued a leaflet, in which one item is entitled "The Future of the NHS". What did he say in it? I shall give way so that he can tell us.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The Chancellor is right; we had no such proposals at the last election. However, he has overlooked the fact that his party won the election. The Labour party is responsible for funding the NHS for the next four years. When will he grow up, accept his responsibilities, do what he promised at the outset of his speech and answer the questions that I asked him?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I know why the shadow Chancellor is rattled. He cannot tell us whether he will support charges for the NHS in this Parliament. What did he say at the general election? The leaflet states:

"But there will be no charges".

It goes on:

"Do not believe the lies which are being spread by our opponents.

Conservatives will retain a free and comprehensive national health service".

He was right then and he is wrong now because a free NHS is the right policy for this country on the ground of equity. It means that everybody, irrespective of income, gets the health care that they need. It is right because comprehensive care means that people are not discouraged from using health care services through lack of income. It is right because it is an efficient system, which avoids the form filling and bureaucracy that a charging system would entail.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall give way in a minute. Conservative Members are making a historic decision this evening. They tell us that they are no longer prepared to commit themselves to the principle on which the NHS was built 50 years ago. At the general election, they said that they supported a comprehensive service that was free at the point of need. They no longer support it and they will have to answer to their constituents for that.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. Once again, I call the House to order. The Chancellor of the Exchequer is on his feet.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

On a point of order, Madam Deputy Speaker. You quite rightly admonished me earlier for making an intervention from a sedentary position. You said that I had to ask the Chancellor whether he would give way. Since then, I have tried to persuade the right hon. Gentleman to give way. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. That is not a point of order for the Chair. It is up to a Minister whether he or she decides to give way.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way in a minute, but I want to develop my argument because the issue is not simply that the Conservatives are prepared to contemplate charges for the first time in their history. It is also that they are prepared to abandon a tax revenue-based national health service. The reason that the Flight memorandum says all that is because of the commitments that the shadow Chancellor has made in another direction. He will have to think before he gets to his feet again, because of the speeches that he has been making from 1997 onwards. Those speeches explain why the Conservatives have to cut public expenditure.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The Conservative party does not like—[Interruption.] I will give way to the right hon. Gentleman.

Photo of Michael Jack Michael Jack Conservative, Fylde

The Chancellor has made some comments about charging. Will he explain why he condones and supports the charging of elderly people for many aspects of their social care?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The right hon. Gentleman knows that we are operating rules that have been operated by both political parties over the last few years. He also knows that we are now talking about charges for a visit to a GP. [Interruption.] The Conservatives do not like hearing about this, but it is about time they faced up to it.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way in a minute. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. Can we please let this debate proceed with some degree of decorum?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The health spokesman of the Conservative party has said:

"I think my commitment to the NHS is clear. We have said we will maintain a fully comprehensive NHS, free at the point of use, in our manifesto. I have said it since I can ever remember being in politics, and that's something that will go on."

How can the shadow Chancellor say that once the election is over, the promises will go?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The Chancellor was waxing eloquent a few moments ago about how effective, efficient and equitable the national health service is. Is he proud of a service that tells one of my constituents, who is 83 years old and suffering from Parkinson's disease, that he has to wait 83 weeks to see a consultant neurologist? Is that the national health service of which the Chancellor is proud?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am proud of the fact that the national health service does not charge people for treatment in the way that the right hon. Gentleman wants to do. Under his proposals, the constituent whom he mentioned would have to pay. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. This debate will proceed, and the Chancellor of the Exchequer and other right hon. and hon. Members will be heard, but not all together.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Let us be clear why the Conservatives cannot commit themselves to a health service that is free at the point of use, and why they have abandoned that principle. The reason is that the shadow Chancellor has been going round the country for years making promises about cutting public expenditure.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I have given way quite enough.

The shadow Chancellor has said that we are spending too much money. His whole point is that we are spending too much money—this year, next year, last year. In other words, he is saying that spending should be cut. That is the shadow Chancellor's position. Why? I shall read out this quote, so that people can understand where the Conservative party is coming from:

"With trend economic growth of 2 plus per cent. and real spending growth held to 1 per cent., we would have cut the Government's share of spending to below 37 per cent. I believe we might have done even better."

That was the shadow Chancellor's programme for the last Parliament, which would have meant public spending cuts of £10 billion a year. In 1997, in a speech that now influences the whole thinking of the shadow Cabinet, he said:

"Our aim should be to reduce the proportion of national output taken by the state towards 35 per cent."

[Interruption.] Perhaps the shadow Chancellor denies that he made that speech.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

No, he does not. In the speech, he went on to say:

"I believe that 35 per cent. is a realistic and attainable goal."

What would 35 per cent. mean? It would mean £50 billion of cuts in public expenditure. It makes the Letwin manifesto at the last election look moderate. It is the most extreme proposal for cuts in public expenditure that could be made. What would it mean for the future of the national health service in this country? Could the income of the national health service rise by 6 per cent. a year in real terms under that policy? The answer is no.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way in a minute.

Could the national health service get £5 billion extra a year under the shadow Chancellor's proposals? The answer is no. Why cannot he now commit himself to a free national health service? Because he plans to cut public spending to 35 per cent. of national income—a £50 billion cut—and I say to hon. Members that this is the trouble with having a shadow Chancellor who has a record.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

Instead of taking us on this trip down memory lane, will the Chancellor now keep the promise that he made at the beginning of his speech and answer in detail all the questions that I put to him in my speech?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The problem is that all the questions are now for the Conservatives.

Photo of Paul Goodman Paul Goodman Conservative, Wycombe

On a point of order, Madam Deputy Speaker. Is it in order for the Chancellor to say at the beginning of his speech that he will answer the points made, then, halfway through the speech, to refuse to do so? [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. That is not a point of order for the Chair.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I must explain that I have had to follow this line of questioning because the Conservatives seem to have concluded that the reason they lost the last election was that they were not extreme enough. They seem to have concluded that, if only they had told the electorate that they would abolish the national health service, people would have rushed towards them. They now seem to be planning a pledge card for the next election, which would offer five pledges: charges for GP visits; charges for hospital visits; charges for operations; cutting national health service expenditure; and ending the national health service entirely. That is what the Flight memorandum says. That is what the shadow Chancellor means when he refuses to rule out charges. It is also what he means by his proposal to cut public expenditure to 35 per cent.

Several hon. Members:

rose

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way once more, then I will finish my remarks.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

Will the Chancellor clarify the Treasury's position on hypothecation? I understand that the Treasury is concerned that revenues might rise or fall with the cycle. I wonder whether the Chancellor has had the opportunity to see my article, published this morning in the Institute for Public Policy Research journal, which shows how that problem could be dealt with. [Interruption.]

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I have certainly not seen the hon. Gentleman's article—neither can I hear his comments.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I have been too busy reading the shadow Chancellor's speeches to read the hon. Gentleman's article, but I assure him that I will do so.

Opposition Members know perfectly well that we have embarked on a programme of NHS reform. Seventy-five per cent. of the money is going back to primary care trusts; we are renegotiating contracts for doctors, including consultants, and nurses; and there is a programme of reform at the centre, where we are devolving power to the localities.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Ah! The shadow Chancellor now draws me into a discussion of his view of the national health service as a Stalinist creation. I believe that a Conservative party that holds that it can describe the health service not just as centralist but as a Stalinist creation is making a very big mistake. The shadow Chancellor is saying that when the service was created it was wrong, at that time. That is what he is saying: it is a Stalinist creation, and therefore it was wrong even in 1948. The Conservative party is now abandoning a consensus that was accepted by Sir Winston Churchill, Harold Macmillan and Lady Thatcher, all of whom believed that we should not abandon the national health service.

The debate on hypothecation will continue, but I think all parties—and the shadow Chancellor, representing the last Government, took the same view—would not want to make the funding of the NHS dependent on, or hostage to, the economic cycle. They would not want one tax relating to changes in behaviour to make the service a victim of a situation that it should not have to live through, when what we want is sustainable, long-term funding.

That is what tonight's debate is about. We believe in a national health service that is free at the point of use; it is clear that the Opposition now do not. We believe in a tax-funded national health service; it is clear that the Opposition want a system of private health insurance. We believe in more investment in the NHS; the Opposition want to cut investment.

I say this of the shadow Chancellor: he got every major decision wrong in his past career in politics. [Interruption.] Oh, yes. He was the brains behind the poll tax. He defended the Conservative Government when the interest rate was 15 per cent. He is the man who said that a minimum wage would cost a million jobs—and it created a million jobs. He is the Minister who said that we were the worst-placed country to deal with the economic difficulties around the world—and people know that this year we have been the best-placed country to do that.

The shadow Chancellor has also got it wrong on the national health service. He will live to regret a debate in which he has refused to rule out charging in the service. Labour wants to build the national health service; it is clear that the Conservatives want to destroy it. Tonight, Members should vote to build it.

Photo of Keith Simpson Keith Simpson Shadow Spokesperson (Environment, Food and Rural Affairs)

On a point of order, Madam Deputy Speaker. Will we, at some stage during the debate, hear a speech from the Chancellor about the Government's policy?

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

That is not a point of order for the Chair.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell 8:13 pm, 3rd December 2001

At this point, we should remember where the debate started back in 1997, when the Conservatives, after years of under- investment, left the NHS in truly dire straits. We now know why: it was because they believe the NHS to be a Stalinist institution.

Do the Conservatives not realise that Stalin killed millions of people, whereas the NHS and its staff strain every sinew to save millions of people? NHS staff—doctors, nurses, ancillaries and the rest—would be appalled to hear first the so-called leader of that party and then the shadow Chancellor argue that theirs is a Stalinist organisation. How far from the truth could that be? How can people now believe that the Conservative party is committed to maintaining a national health service that is free at the point of use, and serving every person in the country?

Back in 1997, Labour argued that it had 24 hours to save the NHS. That may be the case at the next election: it was made plain this evening that a Conservative Government, if elected, would abolish the national health service as we know it. Whatever else Labour may have done, however, it failed to save the NHS in 24 hours, or even in a number of years. Its commitment to stick to Conservative spending plans, without even the annual review that the Conservatives would have delivered, led to a fall in the proportion of national wealth spent on the NHS during its early years in office. As a result, doctors and nurses were not trained—which resulted in the Government's current problem.

The error was repeated at the last general election, which the Government fought on the basis that the NHS had effectively been rescued, and that their spending plans would deliver the goods. They have had to admit that they got that wrong too. The Liberal Democrats argued throughout that it would only be possible to find the investment needed for the NHS if the Government faced head-on the raising of taxes that was necessary to increase the proportion of gross domestic product spent on the service.

Let us not give the Government too much credit for their change of mind. We welcome it, but we should recall the blistering attacks launched by both the Prime Minister and the Chancellor on any Members—including those on their own side—who argued that, in the long run, the NHS could secure the investment it needed only if the Government were prepared to invest a higher proportion of GDP, and that that meant facing the tax issue, if the economy was to be managed properly.

In July 1997, just after the general election, the former leader of the Liberal Democrats asked:

"If I were to say to the Prime Minister that one of his Health Ministers has now announced that his Government will spend £350 million less next winter on the health service than the outgoing Conservative Government would have done, would he be surprised?"

All that the Prime Minister could say was:

"As I have already said, we have inherited the spending plans of the previous Administration."—[Hansard, 30 July 1997; Vol.299, c. 334.]

Any Government inherit the spending plans of their predecessors, but not many choose to implement them. That mistake has haunted the present Government to this day.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

Is it the policy of the hon. Gentleman's party to support the principle of raising health care spending by the state to the European average? If so, does his party support the substantial tax increases that would, it appears, be required?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

The hon. Gentleman may have been diverted from this during the election campaign, but our manifesto made both those promises.

More recently, the Government proved still to be making the same mistakes. [Interruption.] I gave Chris Grayling as clear an answer as anyone could give: my answers were yes and yes. I know that Conservative Members find it difficult to give any answers themselves, but they should at least understand when someone else is giving an answer—although I suppose that lack of use of the "yes" bit of the brain, or come to that the "no" bit, and limiting oneself to the "don't know" bit, makes it hard to give or indeed receive a straight answer.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

Will the hon. Gentleman give way again, very briefly?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

I will in due course.

The error to which I referred, however, did not occur just in 1997; it rolled forward. In April 2000 the present leader of the Liberal Democrats, at a time when the Chancellor was delivering a cut in income tax, challenged the Prime Minister thus:

"Does it remain the Prime Minister's intention over five years to get health spending in the country up to European levels? If so, does he believe that a tax cut in April will assist that process?"—[Hansard, 1 March 2000; Vol. 345, c. 418.]

We now know what the answer was. No, it would not assist the process. The Chancellor, having cut income tax in April 2000, now tells us that we may need to face tax increases.

Things did not change in the election of June 2001 either. Labour consistently denied that more money needed to be raised through tax; indeed, the Chancellor could not have been more explicit. That raises a serious question about the honesty of the Government and their approach to the wider electorate. It seems hard to believe that things have changed so dramatically between the election in June and the pre-Budget statement at the end of November. The Chancellor says that it is not due to the change in economic circumstances, so what exactly is it due to? The wheels have come off new Labour's bandwagon and they are all going in entirely different directions.

On spending, 18 months ago, the Prime Minister jumped the Chancellor on the "Frost" programme. The Prime Minister promised:

"We will bring it up to the European average", but immediately the Chancellor worked to obfuscate: it was aims, targets, ambitions, never a commitment. Again, in the pre-Budget report last week, he hinted, flirted but remained no more than a tease.

Again, it took the Prime Minister to let the cat out of the bag. Last Wednesday, at Prime Minister's questions, my right hon. Friend Mr. Kennedy, the leader of the Liberal Democrats, asked the key question, which incidentally the leader of the Conservative party failed even to spot. My right hon. Friend said:

"The Prime Minister committed himself to raising health expenditure in our country to the European Union average by 2005. Is that still the policy of his Government?"

The Prime Minister said:

"Of course it is. That is precisely the point of the Chancellor's announcement yesterday."—[Hansard, 28 November 2001; Vol. 375, c. 964.]

Ever since, the policy of the Government has been in total confusion. It seemed for five days that that had been precisely not the point of the Chancellor's speech. He rushed to The Sun, which said:

"the Chancellor refused to say if the promise applied to EU spending at the time of Mr. Blair's promise—or to the levels which will be reached in 2005."

Perhaps the Chancellor can clarify that.

By Sunday, the Prime Minister had buckled under the force of his Chancellor's will. The Independent on Sunday reported:

"'I am not deciding spending levels now'"— not quite what we thought he said at Prime Minister's questions—

"Mr. Blair said, making it clear he was talking generally . . . his commitment to match European health spending—originally made 18 months ago and repeated in the Commons on Wednesday—was only a 'broad' aim."

At today's lobby briefing, the Prime Minister's spokesman went out of his way to say that the Prime Minister had said that it was only the Government's aim. I quote from the e-mail briefing that we received:

"We are not going to slap on a particular figure when we have a CSR review and we have the Wanless report."

He said that those were important processes that had to be completed before the Government could tie themselves to a figure. He added:

"It is our aim to bring our spending up to the European average by 2005/6."

Now we know how to get a statement from the Chancellor. When it becomes the Prime Minister's aim, when he backtracks, the Chancellor comes charging forward and says, "No, this is our committed policy." If only the Prime Minister 18 months ago had not committed himself to it on the Frost programme; we would probably have heard it previously from the Chancellor.

Photo of Chris Ruane Chris Ruane Labour, Vale of Clwyd

The hon. Gentleman criticises, carps and calls for honesty from the Chancellor. The Liberal Democrats call for an increase in spending on education, health, transport, the environment and small businesses. Can we have a little honesty from them? By how much would they put up taxes to achieve their aims?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

It was all set out in our manifesto. Incidentally, the Institute for Fiscal Studies, the BBC economics department and others all concluded that our figures added up. Clearly, the Chancellor's did not, because he has had to do a complete U-turn in only six or seven months following the general election.

That said, the House may now have the vague impression that the Government's position is clear. The Chancellor has said, "Yes, it is our commitment to meet the EU target by 2005", and that is welcome news. I think that it means some increase in spending for the NHS. Unfortunately, the Treasury is redefining the EU target. Perhaps that is why the Chancellor now feels able to make that commitment.

The King's Fund and the Institute for Fiscal Studies both believe that the position is clear: there is a substantial gap, even on the Government's present spending plans. The size of the countries should be taken into account. Luxembourg, one of the smallest, does not spend so much, but then perhaps it is not overly reliant on the immediate health services in Luxembourg itself. If the reasonable view is taken that the larger countries count for more, on an independent basis, the Institute for Fiscal Studies, the King's Fund and others all conclude that the Government will fall substantially short of their target.

The Government now use an average that includes the United Kingdom. That helps to bring the figure down as UK spending is low in any case, but the humdinger is that every country across the European Union faces similar pressures to those that have caused so much difficulty in the NHS: the increase in demand, the development of technology, the need to pay doctors and nurses a reasonable wage. Across the world, other workers are benefiting from growth in the economies through the wage packet. Doctors and nurses obviously need the same, but the Chancellor is off the hook in one bound because the target is to meet not the EU average, but the EU average as it used to be. It is not to bring us up to the European Union, but to allow us permanently to fall ever further behind.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

May I seek the hon. Gentleman's clarification on an important point? He said that his party was committed to raising health care spending in this country to the European average; he gave the answer, "Yes" a moment ago. Did his proposals at the general election raise sufficient money to do that? If not, where will the money come from to fill the gap? What extra taxation does his party want to raise to meet that target?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

The hon. Gentleman is drawing me down the line of an alternative Budget presentation with the full details. We published such a Budget at the last general election. I shall not deliver it now but, if he is interested, we will continue to deliver our alternative spending plans at each and every Budget, which is more than his Front-Bench team has ever done. We have a clear commitment from the shadow Chancellor not to do it in March.

Photo of David Laws David Laws Shadow Spokesperson (Defence)

What conclusions does my hon. Friend draw about the Conservative party's commitment to the NHS, given its statements in the debate today and given the fact that barely 10 Conservative Members have bothered to turn up for their own Opposition day debate?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

The shadow Chancellor spelt it out: the NHS is a Stalinist institution. We do not need to ask ourselves; he is more than happy to tell us. He believes that those who can afford to should pay towards their health care. That is the difference that he, together with his leader, has brought to the Front-Bench team. Even the old policy that they defend the NHS in theory if not in practice is now abandoned. Theory and practice have come together: they do not believe in the NHS.

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

Will my hon. Friend give me a moment, because I want to turn to other areas where the Government are unravelling?

Who runs the NHS? Early last year, cracks were already appearing between the Chancellor and the Secretary of State for Health. On 27 November 2000, just about a year ago, BBC Online said:

"Early press reports suggested that Health Secretary Alan Milburn had some sympathy with the proposals" for a hypothecated health tax.

On 27 November, The Times said:

Alan Milburn, the Health Secretary, last night signalled that he would risk the wrath of the Treasury by backing proposals to ring-fence half of all income tax revenue for the NHS."

On 28 November, The Guardian said:

"Earmarked taxes are seen by some, including Home office minister Charles Clarke, as the best means of improving the popularity of direct taxes with voters. However, the Treasury dismissed suggestions that as much as half of all income tax should be earmarked for an NHS tax."

We do not need to read into those reports a division between the Treasury and the Secretary of State for Health and his friends, we can see the result of that division—the Secretary of State is no longer in charge of the NHS and health decisions.

The Chancellor commissioned the Wanless report, effectively taking over direct control of long-term NHS policy making. Now that that report has been published, we have learned—first in The Mail on Sunday, on 12 December, and now essentially directly from the Chancellor's own lips—that:

"Referring to Cabinet splits, Mr. Clarke launched into a bizarre defence of his close ally Alan Milburn. 'Obviously it's unacceptable to say 'Alan Milburn is a bastard'' he said."

I do not know who is supposed to have said that he is, but presumably that person is not far from us now, on the other side of the House. Meanwhile, another Minister said:

"Everyone agrees Gordon is a brilliant Chancellor but his treatment of the rest of us is unacceptable".

So who is in charge of the NHS? Today we have received an answer: the Chancellor is in charge of it. In reply to a report in The Mail on Sunday that sources close to the Prime Minister said that he was completely taken by surprise when the Chancellor told hon. Members that he had ruled out any major change in the way in which the NHS is run or funded, and that the Secretary of State for Health had been told only at the weekend of the outcome of the Wanless report, all the Chancellor could say was that the Secretary of State had received full notice. Is that all that the Prime Minister has received too?

It is not only the Prime Minister and other Cabinet members who are subject to the will of the Chancellor. There is a peculiarity in what the Chancellor had to say about Mr. Wanless—whose name came up surprisingly often in the Chancellor's statement, when it was, "Mr. Wanless this", and "Mr. Wanless that". I guess that the Chancellor might be thinking of putting Mr. Wanless in charge of the NHS. From his point of view, it would be better to have him in charge than the Secretary of State for Health, and it would certainly be better than having the Prime Minister in charge. However, the Chancellor and Mr. Wanless seem to have had a falling out.

Last week, the Chancellor told us:

"having examined whether a publicly funded NHS is itself a pressure on costs and thus whether it is sustainable, Mr. Wanless's view is that the principle of an NHS publicly funded through taxation, available on the basis of clinical need and not on ability to pay, remains both the fairest and most efficient system for this country."—[Hansard, 27 November 2001; Vol. 375, c. 838.]

That may be the Chancellor's view, and it is my view, but Mr. Wanless has suggested that it may not be his view. He said:

"I have not sought to bury anything for good. It would be quite presumptuous and premature to do that."

So who is in charge? Is it Wanless, the Prime Minister or the Secretary of State for Health? No, once again, it is the Chancellor of the Exchequer.

The Observer had the most bizarre story of all. Presumably briefed by Labour party insiders—it is quite a friend of the Government, although not always a secure one, and tends to have knowledge of what is said in the inner circles—it said:

"Planning for last week's remarkable announcement on tax—which has set many Cabinet members against one another—has been two years in the making, meticulously pored over, refined and planned during hours and hours of meetings at the Treasury and Downing Street."

They have to be kidding. If the outcome of two years of meticulous planning and co-ordination between No. 10 Downing street and the Treasury is the total mess that we have seen in the past five days, God help us if they ever stop planning.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

Does the hon. Gentleman welcome the announcement of a great national debate on the future of public expenditure and public services? If so, will Liberal Democrat Members rise to the challenge of that debate, or will they continue as he has started by talking about the personalities in various Departments? Does he agree that the reason why we are able to have a debate on the future of public expenditure at all, not to mention the public expenditure increases that the Government are delivering, is that the Government have shown competent stewardship of the economy and that, despite a world recession, growth next year is forecast to remain the same as it has been this year?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

Liberal Democrat Members do indeed welcome such a debate; after all, we pioneered it and for several years suffered a lot of abuse from the Chancellor and the Prime Minister for daring to suggest that what the Chancellor now says is right might have been right even then, just a few years ago.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

Does my hon. Friend agree that the standard of debate that we have had so far today, and the shadow Chancellor's remarks on the Stalinist creation called the national health service, are an insult to anyone who has ever worked in the health service?

Photo of Matthew Taylor Matthew Taylor Liberal Democrat, Truro and St Austell

I am amazed by Conservative Members. If there is an issue that will crucify them at the ballot box, it is their decision not to support the NHS; not to support the principles of care free at the point of delivery for all who need it; their description of those who work in the NHS—doctors and nurses—as working for a Stalinist organisation; and the extremism that has been let in. The extremism that has crept in explains why so many able Conservatives refuse to serve in this appalling Front-Bench team that suggests that it might yet form an alternative Government.

The shadow Home Secretary had it right: not only have the Conservatives not yet won people's trust but they have a very long way to go. At present, all they are doing is going down, down, down. That is what they will find when they go to the ballot box. However, the Government cannot hide behind the Opposition's weakness. We will be there, testing and pushing them, and leading the debate, as we have done since 1997. By the Chancellor's own admission, he got it wrong, we got it right.

Photo of Derek Twigg Derek Twigg Labour, Halton 8:35 pm, 3rd December 2001

I congratulate my right hon. Friend the Chancellor on an excellent speech. It is interesting to examine how what the Conservatives say about health care and privatisation changes. The shadow Health Secretary has said some interesting things. In The Times on 6 August, he said that his party had to have the courage to

"top up state spending with private income of one form or another."

He said that his party's

"failure of nerve in the last Parliament" meant they had not come up with a "credible alternative narrative" for health care—whatever that means.

Why did the Tories have a failure of nerve? Was it because they were not prepared to be honest about their plans to privatise the health service?

Photo of Derek Twigg Derek Twigg Labour, Halton

Indeed.

It is also reported that the shadow Health Secretary

"believes the party must consider proposals that would allow patients to buy themselves better healthcare".

What does that mean? I have no idea. He said that the funding gap comes from Britain's inability to

"top up state spending with private income."

He also said that the party should consider

"employer contribution schemes, tax breaks on private health insurance, or a state-supported savings system."

It would be interesting to know where the Conservatives expect the money to come from.

The shadow Chancellor talks about the Stalinist NHS. Does not that undermine any claim that the Conservatives make that they support the NHS? They did not believe in it in the first place. They did not want it. They would like it to disappear, to be replaced by a privatised health service. They are not prepared to have that debate, though, so they hide behind some interesting words.

Does the Conservative party favour the system in the USA, where 44 million people have none or no adequate health care insurance and everyone else finds that their premiums are rocketing? Even in some European countries, France for instance, people are put off going to see their doctor because of the rising charges.

It is interesting to hear what the Conservatives say about expanding demand for private health insurance. Where are the resources to come from to meet that increased private sector demand? Where are the nurses and doctors to come from to meet this so-called expansion of private health care? Presumably, they will come from the NHS, which is currently increasing the number of doctors and nurses—and we certainly need more.

The Conservatives want tax incentives for people to buy private health care. Where will they find the money to fund that? Their proposals make it clear what they want in the long run: a privatised or at the very least part-privatised health service. Where does that leave areas such as Halton, the 18th most deprived borough in England and Wales, with the country's highest lung cancer rate, the most renal problems and one of the highest levels of coronary heart disease?

People in Halton rely on the NHS and not many can afford private health care. They would be on the bottom rung, with a second-hand privatised system. They would be ignored by the Tories and would not be looked after as they have been by the NHS and Labour Governments.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

Like the hon. Gentleman, I see the frustration of my constituents at the current state of health care. Does he agree that we should look to the rest of Europe, which has much better health care with a much more diverse system of funding? It works better, so should not we learn some lessons from that?

Photo of Derek Twigg Derek Twigg Labour, Halton

I am fascinated by the Conservatives sudden conversion to Europe. The difference between us is simple: I believe in a publicly funded health service. With the investment that we will make, we will see further and bigger improvements over the next few years and we will provide the service that his and my constituents want to see. Privatisation would mean that places such as Halton would be at the bottom of the heap in terms of health care. I am not prepared to let that happen.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

My hon. Friend is rightly coruscating about the overt privatisation plans of the present Opposition. Does he agree that one blemish on our health record so far is our too ready acceptance of the private finance initiative—part of the leaden legacy left to us by the Conservatives—which has been prohibitive in cost, flawed in concept and intolerable in consequence for the taxpayers, patients and NHS staff in the UK?

Photo of Derek Twigg Derek Twigg Labour, Halton

My hon. Friend has strong views on that point, but many new hospitals have been built under that initiative that otherwise would not have been built. It is not perfect and it has flaws, but if the Tories ever got back in it would be a minor issue, because we would then see the wholesale privatisation of the health service.

Photo of Derek Twigg Derek Twigg Labour, Halton

The Tory party certainly has more flaws than Canary wharf.

The Conservative party manifesto said that the party was

"committed to a comprehensive NHS free to all its users."

I did not hear that from Mr. Howard tonight. In fact, I heard the opposite. The manifesto continued:

"There is no question of anyone being forced to take out private insurance."

Again, I heard no reassuring noises on that point. The manifesto, in the section entitled "staying healthy", said:

"Common sense means ending political interference in medical judgments and giving choice to patients".

The first bullet point then states:

"Increase funding for NHS".

We heard no figures for that today, because the Tories do not really mean that they would do that. They mean privatisation.

If the Tories ever got back into power, I would really worry about how people in some of the poorest constituencies would be treated by the health service. What would happen to the handicapped, the mentally ill and those with long-term debilitating illnesses? Unfortunately, that applies to many thousands of people in my constituency, but they would not be looked after under the Conservatives' proposals for privatisation. I could not let my constituents—the people I grew up with—be treated so abominably. Under the American system, 44 million people have no or inadequate health insurance. That is the sort of system that the Tories would introduce in this country.

What should be happening because of the improvements in health care? The Tories talk about a Stalinist system and centralisation. However, over the next three years 75 per cent. of NHS funding will be administered through primary care trusts. In areas such as mine that will mean more local accountability for decisions about how money is spent. In Widnes, which forms a large part of my constituency, after 10 years of trying—because primary care services have been poor for more than 50 years—we will get a primary care resource centre, which will mean more doctors, nurses and specialist staff to treat people on their doorstep in their local community. That is about to come to fruition, under a Labour Government. The Tories did nothing about the problem when they were in power.

The motion covers other public services than health. Significant improvements have been made in public services in Halton over the past four years. For example, standards have risen in schools; class sizes have been reduced; and more and more teachers are in post. The number of nursery places has increased. More funding has gone to schools than for many, many years. Two weeks ago, when I visited a school in my constituency, a senior head teacher told me that there had never been so much money going into schools.

That would never have happened under the Tories, because they would have made sure that we went back to the old way, with grammar schools in a two-tier system. Under the Labour Government, funding has gone into schools—specifically in working-class areas where that investment is needed.

I also want to talk about the transport system in my constituency. We have wanted a second Mersey crossing for many, many years, but we got no help from the previous Government. Last year, my hon. Friend Mr. Hall and I explained to the then Transport Minister that, to get that project under way, we needed money for a feasibility study. We received £600,000 from the Minister towards that study. That help from the Government is for an authority which has to maintain the largest single-span structure of any local authority in the country.

Previously, we unfortunately had a Tory county council in Cheshire. Under that council and the Tory Government, hardly any money was put towards maintaining one of the most important road bridges and its approaches from the M56, M62 and M57: barely £600,000 was allocated in 1997. What is the council receiving this year? It is receiving £6 million this year alone. The amount will increase next year to ensure that the bridge can be maintained in proper order so that it is not a danger and so that traffic can flow more freely. That is the sort of commitment that we are seeing in my constituency.

Furthermore, for the first time, there have been real improvements in bus services, in local transport and in providing access. For disabled people and those with long-term debilitating diseases, there will be investment in community transport schemes. That, too, has happened under a Labour Government; it was not funded under a Tory Government. I can point to tangible examples in my constituency that show not only the Labour Government's commitment to funding public services, but that the way that they have funded those services is bringing about real improvements.

When we consider Tory policy, we recall that Mr. Letwin did a runner during the general election. He disappeared after talking about the cuts and the black hole in Tory funding of public services. We know about that £16 billion black hole.

Photo of Mr Peter Duncan Mr Peter Duncan Conservative, Galloway and Upper Nithsdale

Have waiting lists in the hon. Gentleman's constituency increased or decreased since 1997?

Photo of Derek Twigg Derek Twigg Labour, Halton

They have gone down in the North Cheshire health authority, which covers my constituency. The authority has met its target. The funding increase to the health authority since 1997 was about 70 per cent. Furthermore, to deal with the health inequalities in my constituency, my right hon. Friend the Secretary of State for Health gave the health authority £1.2 million towards health improvement. As part of that, an important health study is taking place in my constituency in order to determine the factors that have led to the poor health that has existed for many generations. That shows the Labour Government making a difference to people's lives. That is happening in my constituency.

The Tories cannot make their figures stand up. Despite the sweet words we have heard this evening and the evasive answers to questions about whether they will privatise the health service—we all know that is what they want to do—they cannot make the figures add up. I repeat that if people vote Tory at the next election, we shall see a privatised health service—as the Liberal Democrats and my hon. Friends have pointed out. That is the dividing line between us.

The debate is about having a publicly funded NHS with a planned stream of funding over the next few years or the alternative of going down the Tories privatised NHS where we will not know what the funding will be from one year to the next.

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

The hon. Gentleman talks helpfully about the importance of planning in health service expenditure, so he will of course recognise the need for specificity. What assessment has he made of the prognosis of the King's Fund for the average European Union level of public expenditure on health by the end of this Parliament? Does he intend that it be equalled by the United Kingdom?

Photo of Derek Twigg Derek Twigg Labour, Halton

Let me put it simply: on the ground, in my constituency, when I talk to GPs, NHS staff and others, they recognise the Government's commitment to ensuring the success of the health service and to extra funding. There may be disagreements as to how the money is spent, but the increased expenditure under the Labour Government will far outweigh what we saw under the Conservatives. The choice is between a privatised health service or a properly publicly funded NHS.

Photo of George Young George Young Chair, Standards and Privileges Committee 8:49 pm, 3rd December 2001

It is a pleasure to follow Derek Twigg. I hope to reply to some of the thoughtful questions that he posed about how we can improve the service for some of his constituents. However, he made a mistake towards the end of his speech by polarising the issue between a wholly privatised system and carrying on with the current system, and I hope to say a few words about that in a moment.

The debate was opened with a quality speech from my right hon. and learned Friend Mr. Howard, who posed four questions in his normal consensual way. It was sad that, after speaking for 30 minutes, the Chancellor did not give us any answers. Indeed, he seemed to be growing increasingly agitated as time wore on. I hope that the Chief Secretary will answer those four question when he replies to the debate.

Last Tuesday, the Chancellor announced the beginning of a debate on health, and at Prime Minister's questions the next day the Prime Minister also referred to a debate on health. I welcome that and think it important that the Government do not foreclose all the options before the debate has got under way. I hope that they will not impugn the motives of those who believe that the time has come for some lateral thinking about how we fund the health service. I am not sure that the Chancellor understands how difficult the position is for the NHS in many constituencies.

I want to make two brief points—one about funding and the other about social services, a close partner of the NHS. On the first, the key question that needs to be addressed is how do we adhere to the principles behind the NHS—free at the point of use and available on the basis of need—while enabling the country and the NHS to perform much better than it does at the moment? I want to develop briefly the analogy with pensions and find out whether the approach that has successfully been adopted can be applied to health.

When the welfare state was founded just after the second world war, broadly the same approach was adopted to pensions and health. On pensions, there was to be a compulsory contributory scheme, leading to a state retirement pension, which was designed to address poverty in old age and reduce dependence on means-tested benefits. It was not to be a funded scheme, but a pay-as-you-go scheme, with today's contributions paying today's pensions. The NHS was born with the same overall philosophy—a state scheme aimed at embracing everyone, designed to address ill health and paid for out of compulsory taxation.

With pensions, the Beveridge vision was never achieved. There was increasing reliance on supplementary benefit, income support and pensioner credits to tackle poverty and no Government were ever able to get the state retirement pension up to the level that would take people out of poverty. Over time, the emphasis began to switch to private provision, based on the workplace. Although the Opposition can claim much of the credit for what I call that mixed economy in pensions, a key player was actually Barbara Castle—as good a socialist as one could come across—whose pension Bill in the mid-1970s contained the architecture for the scheme that we now have.

Over the years, more emphasis has been placed, by Governments of both parties, on good employers having in place a quality pension scheme that complements, reinforces and works alongside the state retirement scheme—an ideal third way. No one has ever asserted that that is socially divisive. The trade unions support good private pension schemes, and this country's pensions are now on a sound financial footing. We lead Europe in funded pensions, given that most other European Union countries have schemes that will need an increase in taxation or contributions.

The question I pose this evening is whether a comparable model might not be looked at for health, against the background of the pressures on funding and delivery that confront the NHS as a monopoly provider. Should not one encourage employment-based insurance schemes to complement the NHS? They could be called, "NHS at work" if it helps Labour Members. It is indeed the case that many firms have private health insurance schemes, but, typically, they cover only senior employees. I believe we should move towards a system whereby not just all the employees within firms are covered, but their families as well. Such an approach would be welcomed by those who represent the work force. It would be in the interests of employers in improving the quality of care that employees and their families receive. I believe that the NHS should welcome it, as the growth of an independent sector of medicine would relieve it of much of the pressure that confronts it at the moment. I think that the Government should welcome it, as it would increase the percentage spend up to European levels. I do not think that anyone could argue that such an approach was socially divisive; rather, it would be an extension of good employment practice, as has already happened with decent pensions.

There are, of course, cost issues for employers, although the bulk purchase of health cover can bring premiums right down to three rather than four figures a year. It could be phased in and the cost could be reduced by cutting employers national insurance contributions. I hope that the debate launched by the Government will permit us to explore that option.

My second point is about joined-up government. The debate launched by the Government is about the NHS, but we should not forget its partner, social services. Right hon. and hon. Members may have seen the letter in The Times today by Councillor Sir Jeremy Beecham, chairman of the Local Government Association, in which he says:

"The Chancellor's announcement of £1 billion extra to be invested in the NHS, on top of the current record levels of increase, will be widely welcomed. By an ironical coincidence £1 billion is the sum which local council social services departments are spending on social care over and above the Government's Standard Spending Assessment for social services.

The work of social services departments with the elderly and with children complements mainline government programmes in health, education and in combating child poverty. It is currently under-funded and many councils face the prospect of cuts in this key area of social provision."

Certainly, many of the problems confronting the NHS in my constituency in Hampshire are due in no small part to the underfunding of social services. There is no point in providing more money for the NHS if it cannot be spent, because the revenue support grant is squeezing local authorities and social services. Let me say in passing, as my right hon. Friend Mr. Jack pointed out, that social services are extensively charged for.

Nine per cent. of all acute beds in the south-east—1,370 beds, or three district general hospitals—are blocked by delayed transfers of care. Some 23 per cent. of those patients are awaiting public funding. In my constituency, 83 beds are blocked in the Winchester and Eastleigh Healthcare NHS Trust.

The Government will say, with some justification, that they have twice in the past 12 months allocated extra sums—cash for change and winter pressure money. Hampshire received £1.9 million last year and £2.4 million in September this year. Of course, that money is welcome, but this simply is not joined-up government. It shows how inadequate the social services standard spending assessments are for local government. This is a one-off sum—local authorities do not how much they will get or when they will get it, but the revenue consequences for social services continue year after year. There is a strategic problem of loss of beds in residential and nursing homes, aggravated by measures introduced by the Government.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

When the right hon. Gentleman was in government, does he recall the representations that were made about changes to the formula that would have meant extra provision for social services and the fact that his Government refused to make those changes?

Photo of George Young George Young Chair, Standards and Privileges Committee

I regard that as a spent conviction. Yes, I remember receiving an unending series of deputations. Any Member of this House with any ingenuity can develop a case showing that his local authority has had a raw deal under the revenue support grant system. I am sure that the hon. Gentleman did not lack ingenuity in making his case, and I hope that he was listened to sympathetically.

Let me return to the strategic problems of social services. There is a net loss of beds in residential and nursing homes, which has a direct impact on the performance of the NHS. The net loss of beds in Hampshire in the past three years has been 62, 277 and 279, with 400 likely this year. So the debate that has been launched must embrace both the NHS and social services.

I hope that the Government's response to the two strategic issues that I have outlined is not to turn their back on the development of a complementary scheme alongside the NHS. I am slightly worried that the Government see a frantic programme of administrative reform of the NHS as an adequate substitute for the more thorough debate that I outlined. The problems are not likely to be put right by a further round of turbulent administrative reform.

The problems that confront the NHS are pay awards and other costs rising faster than the inflation uplift; the formula for distributing funds around the country, which is hopelessly flawed; staff recruitment and retention, which leads to the excessive use of agency staff; and delayed transfers of care, which mean that hospitals have to treat more people than they should. The real debate on the NHS should focus on those problems and the broader issues of funding. There is an appetite outside the House for a proper debate on how we fund the NHS and health in this country. I hope that the Government are listening.

Photo of Frank Field Frank Field Labour, Birkenhead 9:00 pm, 3rd December 2001

My hon. Friend Derek Twigg reminded the House that although many of us want to concentrate on the health service, the debate is on the funding of public services. Like him, I have just finished visiting all the reception classes in my constituency. Their one message is, as he said, that schools have never had so much money to spend in the way in which they wish to spend it. The extent to which we freed up the ability of schools to make decisions is a lesson that we can learn in the health debate, because we have not given that freedom to our local hospitals.

I hope that my hon. Friend will forgive me if, like other hon. Members, I concentrate on the national health service. I also hope that the right hon. Member for North-West Hampshire (Sir G. Young) will forgive me for suggesting later in my short contribution that his comparison between the way in which pensions have developed in this country and the way in which health might develop is, I fear, flawed.

Within the space of a week, we heard two towering performances by the Chancellor of the Exchequer. He is one of the great princes of the platform. He is also one of those politicians who rarely uses his skills, and does so only if he wishes to present a message and, as is often the case, to reposition his party. During the past week, we saw the Chancellor use those considerable skills to reposition the governing party with regard to its views on taxation. Although that debate holds great promise, it also holds great dangers, both for the NHS and for Labour as a governing party. Like all hon. Members, I want more to be spent on health and, certainly like all Labour Members, I want more to be spent through the NHS. I shall dwell on the dangers later in my contribution.

I did not share the euphoria with which some of my Labour colleagues greeted the announcement that we were going to increase direct taxation. I remember fighting, and losing, elections in which we wanted to increase direct taxation. We won in 1997 for a number of reasons: for instance, the Tory Government had been in office for far too long and we had a leader in my right hon. Friend the Prime Minister who was, and still is, a winner.

We also won because we made two specific pledges on taxation. We said that in the first stage we would keep to Tory spending plans for the first two years and would not increase direct taxation. Those are the achievements of my right hon. Friend the Chancellor of the Exchequer. Without my right hon. Friend the Prime Minister and those two pledges by the Chancellor, I do not believe that we would have won in 1997 or obtained the majority that we did in the last general election.

Photo of Frank Field Frank Field Labour, Birkenhead

As the hon. Gentleman has stopped squirming, I will certainly give way.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

The right hon. Gentleman's contribution is thoughtful, but he is basing his comments on two assumptions: first, that it was necessary to make such pledges to beat the Conservative party in 1997 and 2001, and secondly, that there is an implied commitment to put up direct taxes. Is not the problem that the Government hint that they will put up taxes, but the only ones that they will not raise are fair, direct, income-related taxes? The fear is that they will put up unfair, indirect, stealth taxes instead.

Photo of Frank Field Frank Field Labour, Birkenhead

The Chancellor has made it clear that we will, if need be, increase direct taxation. If the hon. Gentleman has not learned that, he has not been paying much attention to the debate over the past seven days.

It is important for Labour Members to read carefully what our electorate tell pollsters, and what they tell us during election campaigns. Voters in Birkenhead, as elsewhere, love the game that they play with pollsters. When they know that there is no possibility of a party that will increase direct taxation being elected, they tell pollsters that they would love to have a party that will increase direct taxation. The response from voters to a Government who feel it necessary directly to increase the contribution to the NHS will be totally different. My experience during the election was that most people feel that they already pay a very large part of their income in tax; some believe that it is far too much, and many do not believe that they get value for money.

It is against that background that we come to a debate about protecting and enhancing the position of the NHS. There is a real danger of some Members in the House reading too simply the messages about Europe. Opposition Front Benchers read the position wrongly in looking to advances in Europe to support their argument that we can increase choice by increasing the numbers of people in this country using private medical care. There is one significant difference between this country and most countries in Europe: in Europe there is an abundance of doctors and nurses, and in this country there is a shortage.

If one suggests that more people in this country should go private, the resources—apart from the consultants, doctors and nurses who might work extra overtime to meet that demand—can come only from the NHS itself. One would be moving the demand around. That is different from the situation in most European countries, where people have paid handsomely in the past for a very large number and an easy supply of doctors and nurses, and where such a policy might be pursued.

As the right hon. Member for North-West Hampshire seemed to imply, there is no major difference between the role that pensions play in Europe and the role that the health service plays in this country. In Europe, it is impossible for Governments to cut back on state pensions. In post-war settlements, pensions have played a part that they do not play in this country. That is why the finances of those countries in the everyone will experience such difficulties in the decade ahead. Germany, France and Italy are planning levels of expenditure for public pensions which are not sustainable, yet when any of those Governments try to cut provision, people move into the streets and the Government quickly withdraw.

That is totally different from the position in this country, where people do not get het up about whether they are to have a private pension, a company pension or a state pension. In this country, the part of the post-war settlement which voters care about is the national health service, and they will vote for parties that support their views on the NHS. The live rail that kills politicians in Europe is pensions, and the live rail that has in the past killed politicians in this country, and might again, is the NHS. Politicians grapple with the NHS with an ever- present sense of danger. Although there is considerable desire for the NHS to be reformed and services to be made more adequate, there is not yet agreement among the electorate on what the level of expenditure should be, or on what steps need to be taken to ensure that the sort of freedom that is beginning to operate in our classrooms begins to operate in our hospitals.

Although the Opposition were rather foolish to describe the NHS as they have this evening, it is fair to say that it is our last nationalised industry and the only one that this country has ever cared about. We face not only the question of funding, but the question of how to use that funding to change a centralised, centrally directed, ration book-type health scheme into a system that far more effectively reflects consumer preferences, in a way that we experience in almost every other part of our lives. If people find that difficult to envisage at the moment, the electorate will teach us the lesson very soon.

My final point follows on from the theme that I have been presenting. The age in which we can have unhypothecated tax increases and easily win elections is over. That is not to say that I do not welcome the debate, or that I do not have views on ways in which additional funds for the NHS can be raised, but if Labour Members think that voters will agree to increases in direct taxation proposed under the banner of the NHS without those increases being directly linked to increases in the size of the health budget, we have another think coming.

We already have a form of hypothecated tax in this country. I implore the Government, when they are giving serious consideration to the alternatives in an open debate on how to raise the necessary revenue, to think carefully about using the national insurance base as the means by which additional funds are raised. However, Labour Members have been peddling three fallacies about that way of proceeding.

Those who read the Prime Minister's interview in The Independent on Sunday will know that he warned of real dangers in using the national insurance base as the means of funding future increases in the NHS. There are employers and employees contributions, and our experience in Europe tells us what increasing employers' national insurance contributions does. However, it is possible to have increases only in employees contributions. Reading the Prime Minister's interview, I was reminded of the statement supposedly made by Sidney Webb when, after the fall of the Labour Government in 1931, the coalition Government led by the Tories immediately came off the gold standard. He said, "Nobody told us we could come off the gold standard." My message to the Government tonight is simple: it is possible to increase only employees national insurance contributions if one decides to adopt the route of having an hypothecated tax for the NHS.

Secondly, it is argued that we should not adopt that course because national insurance contributions would be cyclical. One only has to say it to see the fallacy. Income tax is cyclical and there is no evidence in the figures that are produced that national insurance contributions are more cyclical than revenues from income tax. In fact, if the cyclical argument is to be deployed against using national insurance contributions to raise additional funds for the NHS, the Chancellor's suggestion this evening is also faulty. Direct taxation is not more buoyant than national insurance contributions.

The third reason why I want us to adopt that approach is that although MPs might think that national insurance contributions and income tax are the same thing, our constituents and the electorate do not. One of the reasons why the Conservatives got away for so long with being regarded as a tax-cutting party is that they reduced income tax while more than making up for it by increasing national insurance contributions, and most people in this country did not regard increases in national insurance contributions as increases in direct taxation.

The Labour party has crossed an important threshold. If we are ready to contemplate raising direct taxation, if necessary, to finance the increase in funds needed to secure the future of the NHS, I hope that we will do so carefully and mindfully. I hope that we do not believe our rhetoric about all the things that the Opposition are supposed to be concerned about, or that voters are keen on increasing taxes. We have been in a dreamland where, thanks to a buoyant economy and the skill of the Chancellor, there has been a surplus in the budget. That surplus is about to disappear during this Parliament and, when it does, choices will have to be made and we will have to defend to our constituents the need to increase revenue—I believe that we will have to do so—to finance the NHS and secure its future. Voters may tell pollsters one thing about paying increased taxes when they know that they will never have to do so but, in that difficult terrain, may behave differently when faced with those increases.

On the difficult journey on which we are now embarking, I hope that the Government will not dismiss out of hand a hypothecated approach to our financing. As I said earlier, the age of being able to shove up direct taxes and think that people will vote for us is over. Now, we have to negotiate, increase by increase, with the voters; we could not have a better subject on which to begin those negotiations than the NHS.

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield 9:16 pm, 3rd December 2001

It is always an enormous pleasure to follow Mr. Field, and never more so than tonight; he makes a thoughtful contribution to welfare and social affairs issues. He spoke about the two towering performances that the Chancellor has already given this week; I hope that that did not include the one that he gave tonight. I hope that the whole House agrees that the speeches of the right hon. Member for Birkenhead and my right hon. Friend the Member for North-West Hampshire (Sir G. Young) elevated a debate which sank following the scintillating performance of my right hon. and learned Friend the shadow Chancellor.

The right hon. Member for Birkenhead made two points on which I should like to comment. First, he is right that the lack of doctors and nurses is at the root of our problems; we need to recruit far more of them to the health service, and I shall return to that later. Secondly, to paraphrase the right hon. Gentleman, he said that politicians tamper with the NHS, a much-loved British institution, at their peril. I profoundly disagree that the time is not right for a proper elevated debate on the future of the NHS; the system simply is not working at the moment, another point to which I shall return to later.

Photo of Frank Field Frank Field Labour, Birkenhead

I was not saying that we should not have that debate or that big changes were not necessary. All that I was saying was that there might be huge political costs if we get it wrong.

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield

I am grateful to the right hon. Gentleman for that clarification. It is vital that we take a serious look at the state of the NHS because it is not delivering for our constituents. I very much hope that that debate will not be characterised by comments such as those by the Chancellor, in which he referred to the Tories wanting £50 billion- worth of cuts, or those from the Liberal Democrat spokesman, who said that the Conservatives do not support the NHS and, indeed, that there are no charges on the health service, when significant taxation goes into it.

We must elevate the debate above such comments, which were epitomised by Derek Twigg, who stated as an article of faith that the Tories want to privatise the health service; quite simply, we do not. The interesting analogy that my right hon. Friend the Member for North-West Hampshire drew with the pensions regime is worthy of greater comment than the right hon. Member for Birkenhead suggested. I hope that that too will inform public debate on those matters.

Tonight's debate is timely, as the subject is of immense concern to our constituents. I declare an indirect interest, in that my wife is a doctor in general practice, so I take a particular interest in these matters at home, as well as in the House. I have been away in the real world for the past four years, and on returning to the House of Commons to represent my constituents in Sutton Coldfield, I am astonished at the massive increase in complaints about the quality of the health service that make up my postbag. Complaints about and problems with the NHS are by far the most important element of the post that I receive every day, and I am sure that my experience is not unique in the House.

In a wealthy society, which ours undoubtedly is, it is a basic requirement that our constituents should be able to receive health care of the quality that their counterparts in continental Europe receive. That is not the case at present. I was astonished to see in a French newspaper the headline, "Les anglais exportent les malades". It may be acceptable at the margins for sick people from Britain to go overseas for treatment, but it is not acceptable as a policy that our sick should have to go overseas to Europe to be cured. Were we to behave in that way in any other aspect of life, it would be entirely unacceptable.

The Government's response to tonight's debate and over the past week or so has been cynical. At times it has been irrelevant, and at other times, downright misleading. We were told last week that it was important to decentralise the NHS, so that decision making takes place more at local level, yet only a few days before the House debated a Bill that does exactly the opposite. Under the Bill, which was ill thought out, 58 powers for the Secretary of State were added or reinforced. He will determine the funding of every primary care trust in the country. A chief executive quoted in the Government's own report said that he thought that the changes were the most ill-conceived set of changes in a decade, and wondered whether the intention was to torpedo the NHS plan.

If we have learned anything over the past 30 years, it is that administrative reform—tinkering reform—is not the answer to the problems of our health service. Since Sir Keith Joseph started, we have seen all sorts of reforms. I have sat on Committees that considered Bills introducing such reform. It simply does not work, as everyone seems to realise, apart from the Government.

Photo of Oliver Heald Oliver Heald Shadow Spokesperson (Health)

Does my hon. Friend agree that one of the saddest aspects is the Government's paucity of ambition? In Berlin recently, I was speaking to the Herr Professor Doktor who runs one of the hospitals there. I asked what the waiting list was. He said, "We do have a few troubles. Sometimes we can't get the patients in the same day. They have to wait till tomorrow." I explained to him that our NHS plan has an ambition that in eight years, nobody should have to wait for more than three months. He was horrified. Does not that anecdote reflect the paucity of ambition of the Government?

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield

My hon. Friend makes an extremely good point. He emphasises that in this country we have too few doctors and nurses, as I observed earlier. The problem is getting worse. In Birmingham last year, we had seven vacancies for general practice. This year we have 65—a massive increase.

I said earlier that the Government's approach was cynical. We have heard in the debate about the way in which the Wanless report has been misrepresented, and how its terms of reference made its conclusions inevitable. I should like the Government to publish the terms of reference of the Adair Turner report. We are told that it will not be published. However, the House should hear what Mr. Adair Turner is being asked to do and how that fits into the NHS 10-year plan.

On Tuesday, we heard the Chancellor promising £1 billion more for the NHS, which we welcomed. The following day, after some contrary comment in The Sun, he made a handbrake turn to Wapping to explain that that was not his plan at all, and that there would be no new money until there was structural reform. Only a couple of weeks ago, the Prime Minister said in answer to a question at Prime Minister's questions that when the Tories left office, there were no new hospitals being built. That was completely untrue, as a parliamentary question answered the following week made clear. We also saw the cynicism of saying that there were 24 hours to save the national health service in 1997. No wonder the public are deeply cynical about politicians—a view that will not have been enhanced by Labour's contribution to this debate.

Last week, a clear commitment was made to improve spending on health by bringing it up to the European average, but yesterday, the article in The Independent on Sunday that has been mentioned by other hon. Members said that that was only a target in broad terms.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

Does the hon. Gentleman welcome the announcement of a debate about the future of public expenditure, and does he expect that the Conservatives will come out of it in the same way that they are entering it—by pledging cuts to public expenditure and threatening privatisation of the health service?

Photo of Andrew Mitchell Andrew Mitchell Conservative, Sutton Coldfield

Of course I welcome a debate on public expenditure. That is why I am speaking now. However, the reality is that, under this Government, waiting lists have not decreased, but increased. Waiting lists for in-patients have increased by 63 per cent. since 1997. It is no good blaming the last Conservative Government for that. The current Government have had four and a half years to make an impact after having promised to do so, but have failed to achieve that.

I recently tabled a parliamentary question on in-patient and out-patient waiting lists in the local hospital in my constituency, the Good Hope hospital. I discovered that, in March 1997, five of my constituents were waiting more than 12 months for in-patient treatment, while there are now 152 waiting. When the Conservatives left government in 1997, 18 out-patients of the hospital were waiting more than 26 weeks, but there are now 135 such patients. When we left government, there were 287 out-patients waiting more than 13 weeks—a very high figure—but today there are 750. Throughout Birmingham, we have seen the proportion of patients waiting more than 12 months increase since the last election from 0.1 to 2 per cent. That is an enormous increase and we would have expected more contrition from the Government and more about how they would do better than were contained in the crass allegations made over the Dispatch Box by the Chancellor of the Exchequer.

To add insult to injury for the hard-working doctors and nurses and other dedicated staff in the Good Hope hospital in my constituency, they were recently marked down in terms of the number of stars that were awarded for service to my constituents. When we investigated the reason for that marking down, we discovered on careful analysis that it was done because of lack of beds and trolley waits. However, the reason for those waits had nothing to do with the excellent and dedicated staff in my constituency, but related to bed blocking in Birmingham and the failure of social services. As I said, the result was to add insult to injury, especially as the hospital had managed through its own endeavours to free up some funds to help with an innovative scheme to address the problem.

My right hon. and learned Friend Mr. Howard started an important debate when he said that the Conservative Government had delivered on low tax and that it was now up to the Conservative party to deliver on policies for our public services. I strongly agree with what he had to say. It is very encouraging that my party is considering systems in other countries. My right hon. Friend the Leader of the Opposition is in Stockholm today and we are considering a range of different systems throughout the world.

The issue that we are addressing is how to deliver to our fellow citizens the quality of health care that they have a right to expect. I do not believe that the Labour party can achieve that, as it is wedded to a model of delivery that does not work. It is right that we should be committed to a service that is provided on the basis of clinical need and regardless of ability to pay. On the current system, it is absolutely clear that although Labour has pumped in money just as we did, outcomes have continued to deteriorate. It will discover that public disillusionment will grow as more taxes are spent and as health care of a standard that our constituents are entitled to expect continues to elude them.

The Government should encourage the private sector. My right hon. Friend the Member for North-West Hampshire made a most interesting point about workplace insurance schemes being provided for families. I believe that that is part of the solution in terms of getting more capacity and funding into the health service in the medium term.

I should like to end on a different matter: the benefit to the public services of private finance initiatives or public-private partnership projects—a most important policy that has been seamless between the previous Conservative Government and the current Government.

It is a great thing that the PPP provides for developments in infrastructure that otherwise would not happen for many years. I have written to the Secretary of State for Education and Skills to support an excellent PPP scheme that will benefit the Arthur Terry school in my constituency by replacing old school buildings.

The Secretary of State for Transport, Local Government and the Regions has, however, fundamentally undermined the PPP system. I am not especially interested in whether he has to resign because of his stewardship of Railtrack, but I care about the damage that he has inflicted on PPP. He simply does not understand it. I hope that the Chief Secretary to the Treasury understands that the actions of the Secretary of State for Transport, Local Government and the Regions will increase the costs of PPP schemes. Capital providers will not put up the money when such uncertainty exists. No amount of equity risk premium will compensate for that. For a few cheap cheers from Labour Back Benchers, he has inflicted massive, definitive damage on a good policy that enhances public service delivery.

Morale is falling throughout the NHS. Too many changes have taken place. In the west midlands, 37 per cent. of junior doctors break the working hours limit, primary care lists are closing and the Government have introduced a Bill that will do nothing to help because it is bureaucratic, centralised, rushed and wasteful.

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury 9:31 pm, 3rd December 2001

The debate has been stimulating and revealing in equal measure. My right hon. and learned Friend Mr. Howard opened it in characteristically incisive fashion. He made a series of specific and detailed points, which collectively constituted a penetrating critique of the Government's position. He also posed several challenges. I shall revert to the failure to respond to them shortly and with appropriate relish.

Before I do that, I shall refer to some other important contributions. My right hon. Friend the Member for North-West Hampshire (Sir G. Young) made a typically measured, thoughtful and open-minded speech. He made an important analogy with the pensions industry. We should not skate over that; it cannot readily be dismissed.

Matthew Taylor, who is a worthy sparring partner, disappointed me. I hope that he will not lose too much sleep over that. He drily and unimaginatively supported the retention of the status quo. New Liberal, old policy.

Derek Twigg said that he supported the average EU expenditure on health. However, when challenged to specify the amount of money that would be spent on health by the end of the Parliament, he was unable to answer. If I may so describe him, he was a horse that fell at the first hurdle.

Mr. Field made a characteristically effective contribution. He fired a shot across the bows of the Treasury Bench and warned of the dangers of willy-nilly increases in taxation. He is always polite, sometimes speaks in code and is invariably challenging to the Government. His strictures on the ration book state were welcome and timely. It is time that they were heeded.

My hon. Friend Mr. Mitchell rightly denounced the Government for their cynical approach. He highlighted increasing problems with the provision of health care, excoriated the Government's reactionary attitude to the private finance initiative and demanded a proper, constructive and detailed debate on the inadequacies of the national health service.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

The Conservative party's attitude to public expenditure in general and the health service in particular proved to be the Achilles heel of the previous shadow Chancellor, Mr. Portillo. As the hon. Gentleman is so close to the current shadow Chancellor, will he help him by ruling out once and for all the introduction of medical charges for NHS patients by the Tories?

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

That contribution was as backward looking as it was ill targeted. I have learned my lesson; giving way to the hon. Gentleman is rarely worth the expenditure of time that it entails. He made a mess of his first effort; he would be unwise to make a second attempt.

In the course of my right hon. and learned Friend's contribution, he posed a series of questions to the Chancellor. Those questions fell into four categories and, if the Chancellor was able to add them up, there were 16 specific questions. In the category of questions on reform, my right hon. and learned Friend asked what the Chancellor had in mind, when the reforms would be implemented, what the criteria for the allocation of funds for expenditure by health authorities would be, and when the decisions would be made on those allocation criteria. Answers to those four questions came there none.

We move on to the second category of questions, which might neatly be encapsulated by the term "Adair", on the subject of the Adair Turner committee and, presumably, the potential report resulting therefrom. My right hon. and learned Friend pointed out that the Government had previously said that the deliberations and any ensuing report would be private. Was that, he inquired, still the case, or had the Government changed their mind? Would we be told what the conclusions of that committee were and, if so, when? Answers to those questions came there none.

We move on to the third category, relating to the absurd position at the heart of the Government of total inconsistency, confusion and argument on the subject of meeting the European average level of public expenditure on the health service. My right hon. and learned Friend asked the Chancellor whether he would clarify the Government's position. Was the objective a firm commitment, he asked, or did it amount merely to a vague aspiration? Would the spending on the average level in the European Union be based on the average level in 2000, 2001, 2005 or 2006? Would that average be based on the inclusion of the United Kingdom in the measurement, or would it exclude us? Would the assessment be based on weighted populations or merely on crude numbers? When would there be a delivery on the pledge? Would it be in 2005, in 2006, at some unspecified date in the future or—more likely—never? The Chancellor turns away now, just as he ducked my right hon. and learned Friend's questions earlier.

I shall remind the House of a trait that now bedevils the Chancellor. It is becoming monotonous, predictable, see-through and progressively more ineffectual every time he unwittingly or wittingly deploys it. In the opening sentence of the right hon. Gentleman's speech, he said—I repeat this for the elucidation of the House—that he would answer every single point that had been raised by my right hon. and learned Friend.

Photo of Derek Twigg Derek Twigg Labour, Halton

Will the hon. Gentleman give way?

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

No, I will not.

I am very worried about the Chancellor of the Exchequer, because the shadow Chancellor put 16 specific detailed questions to him in a 20-minute speech, and in the course of a 25-minute speech, the Chancellor, having said in sentence one that he would answer all of them, conspicuously failed to answer any.

Photo of Derek Twigg Derek Twigg Labour, Halton

Will the hon. Gentleman give way?

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

Thank you, Mr. Speaker. I do not think that I need any protection from the hon. Member for Halton, but I am nevertheless grateful for your ministrations.

I simply say to the Chancellor that every time he says that he will deal with the points, he fails to do so. In four and a half years of observing and listening to the Chancellor, I have never heard a worse speech from him, either in the House or outside it. We know that the Government are in total disarray on hypothecation, on social insurance, and on specificity about the means by which the health service is to be funded. On the one hand, we have the position of the Chancellor—

Photo of Derek Twigg Derek Twigg Labour, Halton

Will the hon. Gentleman give way?

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

I am very happy to deal with the organ grinder, Mr. Speaker, but I am not all that interested in the monkey.

The reality is that the Chancellor is opposed by his right hon. Friend—I use the word "friend" distinctly loosely in this context—Mr. Mandelson. He is also opposed by the Secretary of State for Health. Can he look for friendship to the Leader of the House, who somewhat undermined his position at business questions last Thursday? That seems unlikely, given that the two of them have barely been able to stand the sight of each other for the past 20 years.

Does the Chancellor have the support of his right hon. Friend the Secretary of State for Trade and Industry? Apparently, she is ditching him too, because she supports some form of hypothecation. Then we come to the Chancellor's colleague, the chairman of the Labour party and Minister without Portfolio, Mr. Clarke. The right hon. Gentleman has already stitched up the Chancellor in Scotland by getting rid of his candidate for the position of First Minister. He has undermined him on other subjects too: he is second-guessing him on the euro, for instance, and he does not agree with him about this.

The Chancellor must really ask how many friends he has, and the answer seems to be not very many. If someone is rude to his friends, intimidates them, belittles them, ignores them, does not answer them and makes announcements on their behalf without even telling them until the last minute, is it any wonder that he will ultimately be disliked, vilified and plotted against? That is what is happening to the Chancellor.

If the Chancellor is the sort of Minister who offers a prescription before giving a diagnosis, it is a very good job that he opted to come into politics rather than becoming a general practitioner in our national health service. He specialises in not answering questions. Is it any wonder that productivity growth in British manufacturing is so bad, when the Chancellor's productivity in answering questions is even worse?

What does the Chancellor make of existing public expenditure on the national health service? He likes to see himself as the all-powerful figure, the dominant creature in the Government, dictating the course of events, in control of the show. I remind the House that, since 1997, the Government have been responsible for the failure to spend more than £5,000 million that the Chancellor and his right hon. Friend the Chief Secretary have allocated to spending Departments, but which they have not had the wit, competence or sagacity to spend. [Interruption.]

It is no good the Chancellor chuntering from a sedentary position in evident disapproval of what I am saying, when he has failed to do anything about that consistent underspend. The underspend in the NHS means that 70,000 heart bypass operations that would otherwise have been performed have not been performed. What has the Chancellor to say about the £10 billion a year that is being improperly spent in the health service—wasted on fraud, used in the context of bed-blocking, and devoted to sick pay, hospital-acquired infections and the rest?

Despite all that, the Chancellor has the sheer audacity to come to the House and defend his position on the ground of equity. He talks about an equitable national health service, which I interpret as meaning "fair". Does the Chancellor think it fair that people in this country are sicker than they were before? We Conservatives do not. Does he think it fair that more people are having to wait longer than ever before in Labour Britain? If he does, we do not. Does he think it fair that people are dying earlier in this country than they are, on average, in its European counterparts? We do not consider that fair or acceptable. Survival rates in this country for leukaemia, prostate cancer and breast cancer are all pitifully inadequate in comparison with those in the European Union.

Finally, we turn to the interesting issue of private expenditure. I leave the Government and the House to reflect on it. The Government are condemning the use of private funds, yet it is happening all over the country. A private trust recently raised no less than £14 million to assist in the rebuilding of one orthopaedic hospital trust: £2 million was spent on the orthotic unit, £4 million on the creation of a muscular-skeletal disorders research building, £6 million as a contribution to a £25 million private finance initiative project, and up to £750,000 on a hydrotherapy pool. I suggest that the Chancellor use the pool; it will not improve his expertise in health policy, but it might do something to improve his temper.

Where is that hospital? It is in the Oxford, East constituency. It is the Nuffield Orthopaedic Centre NHS trust, in the constituency of the Chief Secretary to the Treasury. I am not going to accuse him of hypocrisy because you, Mr. Speaker, would rule me out of order. I say simply that it is two-faced. It is an example of double standards. It reflects the difference between what the right hon. Gentleman wants to saddle the rest of the country with and what he is pleased to accept in respect of his constituents.

The British public are fed up with the clashing egos, the competing ambitions, the corrosive tensions at the heart of the Government. They are not interested in the Chancellor's ambitions. They do not like the unedifying spectacle. What they want is a decent health service, reliable provision, policies that translate care from a word to a deed for the majority of hard-working, long-suffering people in this country. The Chancellor's policy will not deliver. We are determined to produce a coherent, credible, costed and attractive policy that will deliver. [Hon. Members: "When?"] Members will hear of that policy in readiness for the next general election.

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury 9:45 pm, 3rd December 2001

I have been here throughout the debate and heard Mr. Bercow as well as Mr. Howard. The hon. Member for Buckingham has a thing or two to learn about monkeys and organ grinders. Never could we have heard a better example of someone's eloquence outrunning his judgment than in the hon. Gentleman's speech.

The hon. Gentleman refers to the fund raising for the Nuffield orthopaedic hospital in my constituency. I am proud of that fund-raising effort. I commend the energy and support that Lord Tebbit has put into that out of personal commitment. I would not seek to use that for political purposes, here or anywhere else. [Interruption.]

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. We must have some calmness.

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

There are two striking things about this debate. The first is that the shadow Chancellor described our national health service, a proud creation of this country and something of which we are all proud, as a Stalinist creation. The second is that he refused conspicuously when challenged by my hon. Friend Mr. McFall and others to rule out charging. He gave the game away as to what the Tory agenda is. It is an agenda of privatisation and of charging for the health service.

It is clear where the dividing lines are in the debate. Where we will invest in the NHS, reform it and work with staff to raise its performance, the Conservative Front-Bench team will not commit to NHS investment, it has no ideas for NHS reform and, as it toys with half-baked ideas for private insurance, it would destroy the principles of the NHS, just as the Conservatives opposed its foundation.

As my right hon. and hon. Friends have pointed out, a key principle is at stake. We believe in an NHS free at the point of need, so that patients receive care on the basis of clinical need and not ability to pay. I believe that that principle is strongly supported by the British people. After all, it is about fairness. In walking away from it, as my hon. Friend Derek Twigg pointed out speaking on behalf of his constituents, the Conservative leadership would threaten millions of people with insecurity, with costs that they cannot afford, and with health care being unavailable when they need it most. In promoting their private health agenda for what they describe as the Stalinist NHS, Conservative Members would land a body blow on NHS staff, whose skills and dedication we depend on for better health care. Conservative Members will rue the day that their leaders set off down that road—just as they already regret initiating this debate in which only two Tory Back Benchers spoke after the shadow Chancellor, who could not get out of the Chamber fast enough. They have not one thought-out policy to offer.

I shall reply to some of the speeches. If I followed him correctly, the right hon. Member for North-West Hampshire (Sir G. Young) was urging a supplementary social insurance model. I took his comments in the spirit in which they were made, which was certainly not the spirit of the shadow Chancellor. I think that the right hon. Gentleman believes in a national health service that is free at the point of need, as he promised in his manifesto. He is nodding his agreement. He clearly disagrees with the shadow Chancellor and recognises that charges would be a disaster.

The danger of such schemes is not only that employers and employees have to pay more, but that, as has happened in France, they often increasingly require top-up contributions. Moreover, the administrative burden of such schemes frequently grows—as it did in Germany, where the Government were forced to intervene when administrative charges exceeded 4.8 per cent. of health spending, compared with the 3.8 per cent. of health spending to which we keep administrative charges in the cost-effective NHS.

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

No; if I may, I shall reply to the debate.

In a characteristically thoughtful speech, my right hon. Friend Mr. Field pointed out that, in contrast to most European countries, the key issue for the United Kingdom is that, without a surplus of nurses and doctors, expansion of the private sector would be at the expense of the NHS and those who depend on it. He also pointed out the ever-present danger for politicians of grappling with what he called the "live rail" of the NHS. Today, the shadow Chancellor jumped down on the tracks and grabbed that live rail when he threatened the British people with charges.

My right hon. Friend the Member for Birkenhead also urged that the NHS be funded only with national insurance contributions levied on employees. I am sure that he will understand it if I say that I shall take that as a Budget representation.

Mr. Mitchell said that a lot of things are wrong with the NHS, but, although I listened carefully to his speech, he made not one positive suggestion about what to do about them. He said that there are not enough nurses and doctors, but the Government have already recruited an extra 17,000 nurses and an extra 6,700 doctors. Moreover, what was the position before we entered office? Furthermore, with the funding that we are making available, which would not be made available if Conservative Members were in government, we are bringing forward 20,000 extra nurses and 10,000 extra doctors. We shall achieve that because we are increasing the resources and share of GDP provided to the national health service, not introducing charges or cutting public spending to 35 per cent. of GDP as advocated by the shadow Chancellor.

We believe in the NHS and are ambitious for what it can and must achieve. Moreover, as the interim Wanless report points out, United Kingdom health outcomes have not been good enough, public expectations are increasing, and over a long period we have not invested enough to get the health services that the British people want. As my right hon. Friend the Chancellor of the Exchequer spelled out in the pre-Budget report, we need to spend a higher proportion of national income on health, coupled with reform to improve delivery. If hon. Members accept that, they will accept that the money can come from only three main sources: general taxation, social insurance, or private payments.

We say that it is right that it should come principally from general taxation. We say that because, as the Wanless report states:

"The main disadvantage of a predominantly social insurance based model is that the revenue base is more concentrated, falling on employment to a greater extent than in countries with a higher proportion of general taxation funding. As a result, many countries such as France with a tradition of social insurance, have been shifting the balance in their funding towards general taxation."

On private funding, Wanless said:

"Private funding mechanisms tend to be inequitable, regressive . . . have weak incentives for cost control, high administration costs and can deter appropriate use."

That is the future to which the shadow Chancellor wants to condemn the people of this country with his proposals for charges. I have heard no argument from Conservative Members that calls those conclusions into question.

Photo of Edward Davey Edward Davey Shadow Chief Secretary to the Treasury, Shadow Minister (Olympics and London)

Given that Ministers have been so against charges in the NHS tonight, will the right hon. Gentleman commit the Government to ending charges for eye tests and dental check-ups?

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

It was this Government who ended charges for eye tests for people over 60. If it were not for our commitment to resourcing public services, which would never have been possible with Liberal Democrat policies, that would not have happened. Of course we reject charging for clinical services.

As we have seen in the months since the general election, it is our party and our Government who are reaffirming a commitment to the principles of the national health service, hugely increasing health spending and matching that expenditure with reform, putting 75 per cent. of the funding through the primary care trust, devolving responsibility and empowering front-line staff.

The Conservative party, having promised that no one would be forced to take out private insurance, now wants to introduce charging for health care services but will not say who will be charged how much for what.

Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury

The Chief Secretary has already gone one better than the Chancellor: he has so far provided half an answer to one of the 16 questions put by my right hon. and learned Friend. In the remaining three minutes, will he answer some of the other 15 and a half?

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

There is a lot to debate as we decide how to develop the NHS, but that contribution is barely worthy of our attention.

The public want a publicly funded, comprehensive, high-quality service, available on the basis of clinical need, not ability to pay. One thing is clear: the shadow Chancellor did his party, and indeed many decent Conservative voters, a great disservice last week and again tonight, when he derided this as a Labour question. The truth is that it used to be a Conservative question, too, and perhaps still is for those of his more moderate colleagues who are able to resist the ever increasing power of the fundamentalists in their constituency associations.

The shadow Chancellor and the Leader of the Opposition have confirmed that they are more extreme than ever. Their abandonment of a one nation health service is a final nail in the coffin of one nation Conservatism.

We are determined to secure comprehensive, high-quality services available on the basis of clinical need, not ability to pay. That is not just a Labour question: it is the British people's question. It is in applying the best values and instincts of the British people for fairness and mutual support that we, and not the Conservative party, will provide the answer: a properly resourced national health service that delivers for all the people.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 169, Noes 297.

Division number 97

See full list of votes (From The Public Whip)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 292, Noes 167.

Division number 98

See full list of votes (From The Public Whip)

Question accordingly agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House deplores the attempt by HM Opposition to draw attention away from their lack of coherent policies on public service improvement; welcomes the Government's determination to uphold the highest standards of integrity and honesty in public life; acknowledges that the Government has been open about the standards Ministers, Civil Servants and Special Advisers are expected to uphold; welcomes the publication of the new Ministerial code including the requirements on greater transparency never seen before, attaching the highest importance to the prompt and efficient handling of Parliamentary Questions and correspondence; and commends the professionalism and integrity with which the Government continues to conduct departmental business in the best traditions of public service.