Government Targets

– in the House of Commons at 3:59 pm on 7th July 2003.

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Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer 4:06 pm, 7th July 2003

I beg to move,

That this House
notes the abject failure of the Government to meet its targets for delivery on public services;
believes the current public service agreement regime to be deeply flawed;
is concerned in particular that the volume of targets and their rigid and centralised structure have stifled local initiative, diminished professional responsibility, distorted priorities and diverted time and attention away from the task of improving public services;
regrets that the Government has used targets as a substitute for real reform;
and calls on the Government to embrace the principles of professional autonomy, decentralisation, diversity and choice in the public services, in order to end its policy of taxing and spending and failing.

I draw attention to my entry in the Register of Members' Interests.

This debate is about the Government's record of tax and spend and fail. A fortnight ago, the Leader of the House called for an honest debate on tax. It is little wonder that he was slapped down. An honest debate on tax is the last thing the Government want. This is a Government who promised that they had no plans to increase tax at all, but have increased taxes 60 times and taken almost £44 a week extra in tax for every man, woman and child in Britain.

Every year, the Government excuse their broken promises on tax because, they argue, that is the price that people have to pay if they want better public services. Every year, they say, there will be reform to improve public services. As the Chancellor said:

"There is not to be one penny more until we get the changes."

At the heart of the Chancellor's reforms was his system of public service agreements. They were, he said,

"a contract for the renewal of public services".—[Hansard, 14 July 1988; Vol. 316, c. 188.]

In those heady days, the Prime Minister backed up his Chancellor. He said:

"By publishing clear measurable targets, we are making it possible for everyone to judge whether we meet them."

So it is time to take the Prime Minister and the Chancellor at their word. It is time to judge them by their performance against their targets.

Of course, that is easier said than done. Many of the Government's targets cannot be measured. The Treasury set itself a target of 2.5 per cent. annual efficiency gains. Four years later, it decided that it was unable to measure that.

Other targets were targets to set targets. The Crown Prosecution Service and the Lord Chancellor's Department were set a target to set a target for reducing the time from arrest to sentence. Alas, they have not yet been able to assess progress on that target to set a target. Although the Lord Chancellor's report says that the target to set a target should have been met by March 2001, more than two years later that target, alas, still has not been set. Indeed, it seems that the Lord Chancellor's Department will go to its grave not having met its target to set itself a target.

We must do the best we can, and the reality is that reports admit that more than a third of the targets set in 1998 have not been met, and a similar pattern is emerging for the 2000 targets. I emphasise that that is based on the Government's own information.

What is the Government's response to that failure? Do they intend to change their approach to the public services? Not at all. First, they try to downplay the figures. Failing some targets, they say, is not too bad—they were challenging targets, ambitious targets—so hitting a fair few and missing the rest is really quite good. Of course, that is not what they said when they launched them. Then, the PSA targets were described as agreements between the Chancellor and the Departments concerned—contracts, in return for the largesse that the Chancellor was providing from the taxpayer. If the contracts were not honoured, there would be consequences. The Chancellor said:

"Money will be released only if Departments keep to their plans."—[Hansard, 14 July 1998; Vol. 316, c. 188.]

Downplaying the figures is not all that the Government do; it is not their only response. The Government's second response is to invent a whole new lexicon of euphemisms to disguise failure—their failure to meet education literacy targets: "Falling a little short"; failure on crime: "Further progress is needed in some areas"; and failure to tackle the delayed discharge of older people from hospital: "Challenges remain". In respect of the Treasury's own failed target on productivity, where productivity growth has halved and the gap with the US widened: "Outcomes mixed so far". [Interruption.] The Chancellor says from a sedentary position that I have given this speech before. He is right, and I shall give it again because these charges are true, these charges are sound and these charges demonstrate the failure of the Chancellor and the Government to improve this country's public services.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

Does the right hon. and learned Gentleman accept that another euphemism for failed targets is "Conservative Government"? Does not he accept that the failure to set challenging targets was what brought down his Administration?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

The hon. Gentleman is living in a dream world, and I shall leave him in that dream world.

The Government's third response to failure is to try to hide the truth. With 1 million families not receiving the tax credits for which they are eligible, what of the Inland Revenue target to deliver improvements in the number receiving their entitlements? There is no overall assessment. Today, the Commission for Integrated Transport says that Ministers have "overpromised and underdelivered" on the transport plan. The Government are failing to meet the five targets that really matter. Yet, with one in four trains now late, the Department for Transport has made no overall assessment of its target to secure improvements in punctuality and reliability on the railways.

Even worse, other failures are counted as being passed or on course, such as the Treasury target of achieving an improvement in value for money in public services, year by year. In the real world, a 22 per cent. increase in national health service funding over two years led to a 1.6 per cent. rise in hospital treatments, but in the Chancellor's target world his target to secure better value for money in the public is somehow "on course."

Let us take the education target to cut the number of pupils in classes of more than 30 to zero by September 2001. In the real world, in September 2001, 8,000 five, six and seven-year-olds remained in classes of more than 30, and the figure has doubled since, but in the Chancellor's target world none of that is true. That target was passed, according to the Government. What a wonderful place the Chancellor's target world must be—a world where a failure is a pass, a failure is a success, Tim Henman wins Wimbledon every year and the Government have kept their promises on the public services.

Photo of Mr Ivan Henderson Mr Ivan Henderson Labour, Harwich

In my constituency, two new primary schools have just been built and are about to be opened and a secondary school and another primary school are planned. Why were they not delivered when the Conservative Government were in power for 18 years?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

If the hon. Gentleman thinks that no new schools were built during the years of the Conservative Government, he is living in a dream world too, and he ought to give credit to the Conservative-controlled county council for the part that it has played in delivering those improvements in his constituency.

When this Government make ludicrous claims such as 87 per cent. or 93 per cent. of targets being met, as the Chancellor and the Chief Secretary have, is it any wonder that they are accused of cheating and of misleading people? A memorandum to the Public Administration Committee exposes the fact that they believe that they have missed or have been unable to evaluate more than a third of the targets; they merely hoped that no one would do the arithmetic. Is it any wonder that the credibility of the Chancellor's target regime is now at rock bottom? Is it any wonder that no one believes a word that the Government say? The fact is that, on any reasonable assessment, they have not even managed to keep their failure rate down to a third. In reality, the number failed is considerably higher. Looking at the 2000 targets for which it is possible to make an assessment, it is clear that more than half are currently not on course to be met.

Photo of Charles Hendry Charles Hendry Shadow Minister (Children, Young People and Families), Deputy Chair, Conservative Party

My right hon. and learned Friend will be aware that the Government have set a target that 90 per cent. of people going into accident and emergency should be seen within four hours, and that the target is measured in the last week of each quarter? Has he seen the figures from the Surrey and Sussex strategic health authority, which show that for 12 weeks out of 13 it failed dismally to reach that target, and the figure was about 80 per cent? In the last week, it cancelled leave, brought in supply staff and, miraculously, the figure went up to 90 per cent. Does not that show how the targets are fiddled?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

Indeed. I am grateful to my hon. Friend for drawing those figures to the attention of the House. That is an important target, to which I shall return in due course. That target and its consequences speak volumes for the failure of the Government on public services.

Photo of Tom Harris Tom Harris Labour, Glasgow Cathcart

One of the Government's targets that the right hon. and learned Gentleman has not yet mentioned—perhaps he will later in his speech—is to have 30,000 new nurses and 15,000 new doctors in the NHS by 2008. Does the Conservative party agree with that target?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

I will tell the hon. Gentleman this—[Hon. Members: "Answer!"] I am answering his question. I will tell him this about the number of new doctors in the health service—[Interruption.] The Health Secretary should listen instead of muttering from a sedentary position. The Government are always telling us how many new doctors are in the health service. It takes seven years to train a doctor, so if there are that many new doctors in the health service they must have started their training before this Government took office.

What is most serious, however, is that the sheer number of targets and their centralised nature have often made things much worse. They have distorted priorities, stifled local initiative, contributed to the feeling of disillusionment among doctors, nurses, teachers and police officers, encouraged cheating and diverted time and attention away from the task of improving front-line services.

The Chancellor's one big idea on the public services has not only turned into a shambolic farce but has been counter-productive. It has not only been a substitute for real reform but has taken things in the wrong direction. For example, the Government set a target for reducing school exclusions by a third. They have not met it. In the course of trying to meet it, however, they have achieved a massive decline in standards of discipline in our schools.

The effects on the national health service have, if anything, been even more serious. Last week, Dr. Ian Bogle, the retiring chairman of the British Medical Association, said that the Government were turning the NHS into an organisation governed by "spreadsheets and tick boxes". It had become, he said,

"the most centralised public service in the free world".

One trauma surgeon at the Oxford Radcliffe hospital told the BBC's "Panorama" last week that there are people

"hobbling around now who would have walked" had it not been for NHS targets distorting priorities. "Panorama" reported yet more serious results: because of the target to which my hon. Friend Mr. Hendry referred, whereby waiting times in accident and emergency start when a patient is officially handed over to hospital staff, patients have been left waiting in ambulances outside the hospital for five hours. While ambulances stand idle, it takes longer to answer 999 calls. This is the question that I ask the Chancellor: how many people have died because ambulances are not answering 999 calls as quickly as they would have done had it not been for his targets?

Photo of Edward Garnier Edward Garnier Conservative, Harborough

The situation in the national health service is even worse than the picture that my right hon. and learned Friend paints. Is he aware that, to avoid having to report that people are waiting in trolleys in accident and emergency departments, trolleys are simply moved to corridors outside the departments so that there are no longer trolley waits in A and E departments?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

My hon. and learned Friend is right, and that is only one example of the cheating that occurs in the national health service as a consequence of the targets.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

As the right hon. and learned Gentleman made the poisonous suggestion that people are dying rather than being saved, will he acknowledge that under the Conservative Government there were 400,000 fewer operations every year and 50,000 fewer nurses, and that general practitioner training—in complete contradiction of what he said when he inadvertently misled the House 10 minutes ago—was cut by 25 per cent.? Does he accept that 100,000 people every month now go through accident and emergency departments in fewer than four hours, whereas, under the Conservative Government, people had to sit in pain and discomfort because of cuts in the national health service?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

No, I do not. Let me remind the right hon. Gentleman of one of the statistics that he did not mention. If things are so wonderful in the national health service under this Government, why do three times as many people without any insurance—300,000 people a year—now have to pay for their own operations? It is because they are so distressed by the treatment and waits that they face in the NHS over which he presides.

In the light of all that, is it any wonder that the Chancellor's colleagues are deserting him and disowning his targets? The Secretary of State for Trade and Industry said—

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

It is not surprising that the right hon. Lady is not here because she would not want to hear what I am about to remind the House of. She said:

"I think in the past we have sometimes fallen into the trap of frankly having too many targets".

Mr. Dobson said that the situation had nothing to do with him. He said:

"There've been more and more targets imposed on the National Health Service since I ceased to be the Health Secretary and there weren't very many imposed by me".

Even the Prime Minister says:

"Maybe we have too many".

The Chancellor seems to stand alone. Ever the centraliser, he is the only member of the Cabinet who is still prepared to defend his rigid and centralised targets, and it is for him to justify them today. After six years of tax rises, five years of public service agreements and literally hundreds of targets, where are the improvements to the public services that we were promised?

Photo of Angela Browning Angela Browning Vice-Chair, Conservative Party

I raised with the former Health Secretary, Mr. Milburn, correspondence from consultants in Wonford hospital in Exeter showing that the craven focus on targets meant that they could no longer make clinical judgments about people on the list who had deteriorated and whose treatment needed to be brought forward. Is this not an example of the Government thinking that they know better than people who have trained for many years and who put patients' interests first?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

My hon. Friend is right.

What is the result of all the targets? In the national health service, there are now more administrators than beds. A survey today reported that the national health service ranks between services in Slovenia and Poland for offering choice to patients. As I said, 300,000 patients without insurance were forced to go private last year—not by choice but because the service on the NHS is so poor.

Figures today from the Qualifications and Curriculum Authority show that one in three children left primary school last year unable to read, write or count properly. Last year, more than 30,000 students left school without a single qualification. The gap between children in Britain's inner cities and elsewhere is growing. The British people are right to think that they deserve better. People are right to demand that the Government stop wasting their money. People are right to demand that the Government end their obsession with ludicrous targets, which prevent public service reform, not promote it. People are right to demand a Government who give them a fair deal.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

Given the right hon. and learned Gentleman's diatribe against targets generally, if he were in charge of a major programme of public investment, how would he control it to ensure that the money achieves what is intended; or is it that he does not expect himself or his party ever to be involved in a major programme of public investment?

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

It is certainly not the latter. The hon. Gentleman asks that question at the right time because I am about to deal with precisely that point.

There is another way—a better way: the way of real reform. Real reform means allowing teachers to restore discipline in their classrooms. It means allowing police officers to get back on the streets to fight crime. It means allowing doctors to treat patients on the basis of clinical need, without constant diktats from Whitehall. It means trusting professionals to get on with their job. It means being willing to learn from the success of other countries. We want the priorities in our public services to be driven by the needs and wishes of patients, parents and local communities, not by distant civil servants sitting behind a desk in Whitehall.

Last week, the Prime Minister told us what he had to offer: his 10th relaunch—more of the same. He said:

"Six years is not such a long time in government"

All he needs is a bit more time. He says that better public services are just around the corner, but that is where they always are. In 1997, he told us that there were 24 hours in which to save the national health service. In 1998, he said that the Government were delivering on their promises. In his new year's message, he said that 1999 would be the year of delivery on promises that the Government made, and that 2000 would be

"when things would really start to happen".

In 2001, Alastair Campbell said that

"transformed public services is the key delivery aim of the second" term. But now they say that they need a third term in which to do that. They said they would do it in their first term. Then they said they would do it in their second. Now they say they will do it next term—in other words, some time never. All they have to show for their six years in office are higher taxes, failing services and more empty promises.

The Government no longer even try to claim that services have improved; instead, they admit defeat. As the Secretary of State for Trade and Industry said so memorably on the "Today" programme on Friday:

"When we talked about delivery, that may have been something of a mistake . . . We are not in government in order to show that we can be more competent than the Conservative Party was".

After fiddling the figures and inventing a new vocabulary to disguise their failure, they are finally giving up. They still are not tackling the root cause of their failure: the total absence of real reform of the public services. Instead, they are preparing to ditch the one way in which they said their success on the public services should be measured—the yardstick against which they asked people to judge them. They know that they are being measured and judged. They know that everyone knows they are failing. So what do they do? They ditch the targets.

"I think values are more important than targets", said the Secretary of State for Trade and Industry on Friday.

"It can come across as a bit technocratic, a bit managerial", said the Prime Minister.

"The Government had never said that setting targets was the totality of its approach to public service reform", said the Prime Minister's spokesman. No longer do they stand for delivery, they say. No longer do they stand for any pretensions to competence and no longer do they want their performance to be measured. They have broken their promises on tax, and because they have broken their promises on real reform they have broken their promises on the public services, too.

Can there ever have been a Government who raised people's hopes so high, only to see them so cruelly dashed? Can there ever have been a Government who have promised so much, but delivered so little? All they offer for the future are more empty promises. This is a Government who have lost their purpose. This is a Government who have lost their direction. This is a Government who have now lost every vestige of their legitimacy to govern. The sooner they go the better it will be for patients, parents and all the people of this country.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer 4:29 pm, 7th July 2003

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes the Government's record extra investment in health, education and Britain's other vital public services;
supports the Government's agenda of linking this investment to public service reform through Public Service Agreements to build high quality public services for all;
welcomes the attainment of economic stability, with low inflation, low interest rates, and low unemployment;
believes that the achievement of this platform of stability has made record extra investment in public services possible;
supports the Government's determination to do nothing to put this stability at risk;
believes that after years of neglect between 1979 and 1997 it is even more important to invest in our public services and that to fail to invest in health, education, and other vital public services would be deeply damaging;
and supports this Government's resistance to any attempt at this time of global economic uncertainty to cut public spending."

The Shadow Chancellor failed to tell the House that we have met our school class size target, our school exams pass target and our nursery places target. [Interruption.] The Opposition say that we have not met our class size target. We said that children should not be in classes of more than 30 pupils. When we came into power there were 450,000 children in classes of more than 30, and we have eliminated that problem, so we have met our class size target.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall give way in a moment.

We have also met the main juvenile offenders target, concerning the time between arrest and sentence; our homelessness target; and our debt relief target. It is interesting that the shadow Chancellor should spend half an hour talking about targets and fail to mention all the economic targets. We have met our inflation target, our debt target, our public borrowing target and our employment target. We said that 250,000 young people would move from welfare to work, and we not only met but far exceeded that target.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way in a minute.

We will take no lectures from the Conservative party about meeting targets. The shadow Chancellor was a member of the Cabinet when inflation, which they said would be low went up to 10 per cent; when interest rates, which they promised would come down went up to 15 per cent; when public borrowing increased to 8 per cent; when 1 million people in manufacturing lost their jobs; and when unemployment went up to 3 million. The right hon. and learned Gentleman has no basis on which to lecture us—he is the last surviving member of the 1992 Cabinet on the Conservative Front Bench, and he should be ashamed of what he did.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

Can I now invite the Chancellor back into the real world? Can he confirm that on the last two occasions on which he set growth targets for the economy, he woefully failed to deliver? As for class sizes, can he confirm that his target was to eliminate the number of pupils in classes of over 30 by September 2001, but in September 2001 there were 8,000 five, six and seven-year-olds in classes of over 30, and the figure has doubled since 2001? It is going up, so how can he conceivably say that he met that target?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The right hon. and learned Gentleman exaggerates the position, as he did throughout his speech. On growth, we said that we would raise the trend rate of growth of the British economy, and that is what we have done. We have raised the trend rate of growth from 2.5 per cent. to 2.75 per cent.

How would it be possible for us to do any more on class sizes or any other aspect of education if we accepted the shadow Chancellor's recommendation to cut education expenditure? Under the Conservatives, there were 50,000 fewer teachers; under Labour, there are 25,000 more.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I will give way in a minute.

The great thing about this debate is that we now have the Conservative party's policy documents before us, allowing us to compare what would happen to cost-effectiveness, choice, delivery and the elimination of waste under a Conservative Government with what is happening under a Labour Government. In the last few days, the Conservative party has helpfully published a document entitled "Setting Patients Free". Its theme is moving patients into the private sector by subsidising payment for private operations. It would be helpful for us to compare the effect of that with what the health service is achieving.

We know that the number of out-patient attendances in the NHS has risen under a Labour Government from 11.5 million to 12.9 million. We know that the number of elective admissions has risen from 4.5 million to 5.5 million. But what would happen under the Conservative party's proposals? What would be the cost of operations, as against the cost in the NHS? Can we judge how many people would get operations under the Conservatives' proposals? What would the cost of those operations be? What is the effect of the Conservatives' proposals on administrative waste, and on choice and delivery?

I have a document helpfully published this morning on the internet—not a PhD thesis, just a document from BUPA. [Interruption.] Nobody can claim that the BUPA document has been "sexed up". The cost of a heart bypass, as BUPA helpfully told us today—this is a 10 per cent. rise on the cost that we were told a few weeks ago—is £11,500 to £14,500. The cost of hernia treatment under BUPA is £1,400 to £1,950. The cost of a knee replacement is £8,500 to £10,800. The cost of a hip replacement is £7,000 to £9,000.

The interesting thing, and the reason why I cite those figures, is that they allow us a comparison with the costs in the national health service, so we can now see whether the Conservative policy—[Interruption.] Is the shadow Chancellor denying that the Conservative policy is to subsidise people having private operations? Is he denying that the Conservative policy is to put public money into subsidising private health insurance? If that is the case, are we not entitled to ask, on the basis of the Conservative motion today, what is more cost-effective, what helps reduce administrative costs, and what will deliver the most operations?

Let me give the House the figures. Conservative Members will be interested, because they will have to explain this to their constituents during the forthcoming elections. Let us see which is more cost-effective. A hip replacement under BUPA costs £7,000 to £9,000, according to the table issued today. What is the NHS tariff? It is £4,500. A knee replacement costs £8,500 to £10,800 under BUPA. What is the NHS cost? It is £4,800—half as much. What is the cost of varicose veins treatment under BUPA? From £1,400 to £1,900. What is the cost in the NHS? It is £1,000. A hysterectomy—

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am happy to do so, if the right hon. and learned Gentleman can confirm those costs.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

If the cost of operations in the private sector is so much more than in the national health service, perhaps the Chancellor can explain to the House why the number of people who have elected to go to the private sector for those operations has tripled since the Government came to office—300,000 a year, compared with 100,000 a year when Labour came to office. Is not that whole tirade from the Chancellor doublespeak for saying that the NHS is more cost-effective because people cannot have their operations on the NHS? They have to wait so long for their operations on the NHS that they pay to go private instead.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

No. The reason why I mention the figures is to show that if you want to give patients a better deal, you invest more in the NHS, which is half as expensive as investing in the private sector. The shadow Chancellor and the shadow health spokesman know very well that what they are proposing is that people be invited to pay twice as much in the private sector as in the NHS, but what would be more cost-effective for the country would be to build up the capacity of the NHS by spending more, rather than investing in private care.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am happy to give way to the man who told the Conservative Medical Society that his aim was to run down the national health service and to prove that it could never work.

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

If the Chancellor is giving such great hope to patients in the NHS, perhaps he could explain one figure—the Government's own figure, which said that last year, despite the increase in expenditure, the number of admissions to NHS hospitals fell by 0.5 per cent. What does that say about value for money under the Government?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The number of elective admissions to the NHS has risen from 4.5 million to 5.5 million. The number of out-patient admissions has risen from 11.5 million to 12.9 million. The hon. Gentleman cannot deny that more people are receiving operations, being admitted and getting treatment, and that more operations are occurring.

The policy question that the shadow Chancellor has not faced up to, as he has given way to the shadow Health Secretary on the question of funding, is that the first public expenditure commitment that he made was to put money into private medicine. The second commitment that he made was a tax commitment to give tax relief to private medicine. He has got to explain to this House why it is more cost-effective to put money into private medical care when the cost per operation is twice as much.

Photo of Michael Jack Michael Jack Conservative, Fylde

Will the Chancellor tell the House what the current level of national health service expenditure is in buying operations from the very suppliers that he has mentioned? Will he also tell us how much the national health service is spending to send patients abroad? I have asked two questions, so can he give two answers?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The national health service—the right hon. Gentleman will agree with me on this—is absolutely right to buy operations in the private sector where there is spare capacity and everybody receives their operations free of charge in a national health service that is free at the point of need. The policy question that the Opposition have not worked through is why it is in the interests of the country to invest substantial additional amounts on building up capacity in the private sector when the cost per operation in the private sector, on the basis of the figures that he has not denied, is twice as great as in the public sector.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

Is the Chancellor aware that his lectures on cost-effectiveness will ring very hollow indeed with my constituents? Women in my constituency who are waiting for radiotherapy treatment following breast cancer surgery are having to wait up to 24 weeks under this Government, when their surgeon says that they should be waiting three or four weeks. That figure has spiralled under his Government. It does not matter what the price is in the national health service if the treatment is simply not available.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Given that under the Conservative Government, only 63 per cent. of people suspected of having cancer saw a consultant within two weeks—the figure is now 98 per cent.—that is a ridiculous allegation coming from the hon. Gentleman. I have his election manifesto. Perhaps he will explain to me why he is now saying to his electorate something quite different from what he said in the general election. He said that Conservatives would spend more on the NHS. He also said, by the way, that they would spend more on the police, education and transport. How does he justify the 20 per cent. cuts in public expenditure that the Opposition propose, and the shadow Chancellor's refusal to commit the Conservative party to spending as much on the health service as the Labour party?

Photo of Angela Browning Angela Browning Vice-Chair, Conservative Party

Can the Chancellor not understand that, laudable as it may be that somebody whom a GP suspects of having cancer sees a consultant within two weeks, which is fine, the Government have, by meeting that target, pushed into the distance the vital treatment that cancer patients need? That is what causes the failure in the way in which they are treated. That is what is happening under his Government, and it is wicked.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

More people are receiving cancer treatment in the national health service. The number has risen from 1.2 million to 1.34 million. If the hon. Lady will not admit the facts of the matter, she is seeking, like the shadow Chancellor, to continue to mislead people.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Perhaps the hon. Gentleman will tell us whether he agrees with his Front-Bench policy of not matching our spending on the health service.

Photo of John Bercow John Bercow Conservative, Buckingham

I am most grateful to the right hon. Gentleman for giving way, as this is truly a hysterical speech from a rattled Chancellor in a clapped-out Government under a dodgy Prime Minister. Will he now tell the House why the target to cut by 40 per cent. the number of deaths resulting from strokes has been dropped?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

It has not. We are committed by 2010 to cut by 40 per cent. the number of people who die from heart disease. [Hon. Members: "Strokes!"] I am trying to tell the hon. Gentleman what the commitment is.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

Does the Chancellor know the difference between heart disease and a stroke?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Mr. Bercow asked about strokes. We have made a commitment: there is a 40 per cent. cut to be achieved. We have already achieved 18 per cent. of that. In 1997, there were 39,000 heart operations; now, there are 54,000 heart operations. We have made tremendous advances through our heart strategy, and we shall continue to do so.

Conservative Members have to explain why their main policy plank for the next election, which was announced only a few days ago, is to put extra money into a private sector that is costing twice as much, and therefore to deny the national health service the resources that it needs.

Several hon. Members:

rose—

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am making progress. [Hon. Members: "No, you are not."]

The second question that the Conservatives must ask themselves when comparing the cost efficiency and administrative savings that are likely under our policy, as against theirs, is whether their policy is fair, as well as being more cost-effective. Under the Conservative policy, as the Opposition health spokesman confirmed in his press statements only a few days ago, anybody who has a hip joint operation, a knee joint operation or a heart operation will have to pay a substantial amount of money—

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

It is very clear that the Labour party, whenever it gets into a corner, resorts to the oldest trick of all, which is to lie, lie and lie again on a particular subject. It has been made perfectly clear that under the Conservative plans for a patient passport, patients will be able to take the NHS tariff to any NHS hospital that they want to go to; only if the patient chooses to go outside the NHS will they be able to take some of that money with them. There is a crucial difference between the Chancellor's view of tax and ours. He believes that when taxpayers pay money to a Labour Government, it is the Government's money; we still believe that it is the taxpayers' money.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The Opposition health spokesman can help us, then. Will the persons who are getting the benefit of that patient passport get free operations in the private sector or not? [Hon. Members: "Answer!"] Conservative policy has now been exposed for everyone to see. Not only is the private sector charging twice as much for such operations, but the Conservatives' patient passport would mean that they are not free operations in the private sector—that is, the health service paying for operations that it cannot do. Their policy is to encourage people to move into the private sector, give them a subsidy to do it, then land them with a bill for that treatment. This has been an illuminating discussion.

Is it not the case that the minimum cost of a hip joint operation for a pensioner or someone else, even with the reduction that is proposed by the Conservative party, with the NHS tariff, or part of it, moving into the private sector, would still be £5,000?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

No? Well, the hon. Lady should please correct us.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

On a point of order, Mr. Deputy Speaker. Is it not the case in this House of Commons that when a speaker sits down he has finished his speech?

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

There is a grave danger when an hon. Member sits down for too long that it may be believed that his speech has ended. However, I do not believe that the Chancellor has finished his speech. [Interruption.] Order. Perhaps hon. Members could now settle down; we are debating serious matters and we should listen carefully to the Chancellor. I say respectfully to the Chancellor that the motion relates to Government policies, and he should address them.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am grateful to you, Mr. Deputy Speaker.

Government policies are yielding more operations in the health service, more out-patient and in-patient attendances, more cancer treatment and more heart treatment. The question is whether the scarce resources go into the private sector, under Conservative proposals, or whether they stay in the national health service. The shadow Health Secretary made the illuminating admission that people who move into the private sector, and are encouraged to do so through what is called the patient passport, will have to pay for hip joint, knee joint and heart valve operations. If the proposal involved the 60 per cent. tariff, which operates in Finland and which Conservative Members claim they want to examine, the cost to an ordinary pensioner, who may not have a great deal of savings, would be £5,000 for a hip joint operation, £6,000 for a knee joint operation and £7,000 for a heart valve operation.

Is it fair to tell pensioners who have saved all their lives that their salvation lies in the private sector, when we know that the costs are £5,000, £6,000 and £7,000? The reason is that the administrative costs in the private sector are so much greater. The administrative costs of PPP Healthcare and BUPA are 14 per cent., 15 per cent. and 16 per cent. It is hardly surprising that the private health system in America takes 14 per cent. rather than 7 per cent. of national income. The private sector has also historically charged more for operations.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I shall try to let the shadow Health Secretary rescue himself from the mess into which he has got his party.

Photo of Michael Jack Michael Jack Conservative, Fylde

On a point of order, Mr. Deputy Speaker. A moment ago, you gave the House guidance that the debate was about Government targets. Will you confirm that I did not mishear? The Chancellor appears to have slid away to another debate on the costs of private health care, which is not related to the points that we are supposed to be discussing.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Yes, I said that the debate was about Government targets. The Chancellor should address his remarks directly to those matters.

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

I want to point out to the Chancellor yet again that under Conservative party proposals, all patients could get their treatment free in any part of the NHS that they chose rather than being held in their locality as second-rate supplicants, as happens under the Government. I should like the Chancellor to answer one specific question. He is right that many of those who go into the private sector are elderly and do not have savings. What does it say about the Government's health policy that that number has trebled from 100,000 to 300,000 during the Chancellor's time in office? Why does he believe that they have gone to the private sector? Many of those people, who have few savings and have paid taxes all their lives—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. That intervention was far too long. Let us revert to the motion.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am grateful, Mr. Deputy Speaker.

I am drawing a comparison between the Labour Government's policy, which means investing more in the NHS, leading to increases in out-patient attendances, operations, elective admissions, cancer treatments and heart treatments, and the Conservative party's policy, which would mean paying twice as much for an operation. The shadow Health Secretary has not answered my question. It will cost £5,000, £6,000 or £7,000 for people to get hip joint, knee joint or heart valve operations in the private sector under Conservative proposals. We are increasing the number of operations but we can do even more if there is money devoted to the public sector, not diverted to the private sector.

Our choice is available to all. We want to provide 100 per cent. access to NHS Direct; 100 per cent. access to a general practitioner in 48 hours, and 100 per cent. access for cancer patients within two weeks. We have set those objectives, which are fair to everyone, not only to the few who have £5,000, £6,000 or £7,000 to afford to pay for Conservative party policies. The Conservative policy is a fair deal for BUPA and for private medicine, but not for poor pensioners.

It becomes clear that the dividing line between the two parties in this debate and throughout the country until the general election is that we are making major improvements in the NHS, we are prepared to invest more and we are putting more spending in.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

If the shadow Chancellor will tell us how he proposes to finance the 80,000 new nurses that we are putting into the NHS without spending more money, I am happy to give way to him.

Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

I am grateful to the Chancellor for giving way. He has turned to the Government's stock defence whenever anybody points out the failure of their public services, which is the money that they are pouring in. They are pouring a lot of money in, but has he read today's independent report from Bridgewell Securities Ltd? It contains the following two sentences:

"It is hard for the Government to escape the conclusion that most of the benefit of near-double digit growth in its spending is being lost. This is partly due to rising public sector pay and partly to increasing employment in areas that lead to little or no improvement in public services."

Do not those two sentences sum up the failure of Government policy on the public services?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

The shadow Chancellor is trying to rescue the shadow health spokesman, but he cannot answer the question. We are investing in 50,000 more nurses, which will rise to 80,000. We have 10,000 more doctors, which will rise to 25,000. In all the Conservative years, only 11 hospitals worth over £50 million were built. We are now building 110 hospital developments, many of them worth over £50 million. The Conservatives would not be able to afford any of those things. At the last election, they said that they would match us on health service spending. All Conservative Members stood giving that promise. Now they have to go back to their constituents to say that they cannot make the promise that they would have the extra nurses, the extra doctors, the extra equipment and the extra hospitals.

In that debate, which will run until the general election, the Conservative party has admitted that it wants people to move into private care, that £5,000, £6,000 or £7,000 is what they have to put up to pay for it and that NHS operations costs are half those of the private sector. That is why our reforms of the public sector, matched by the investment that we are putting in, are the right policy for this country.

In advance of the spending review—I think that there will be all-party support for this—I can tell the House today, as part of the review process that we are undertaking for the next spending review, the terms of reference and the changes that we are making with our cross-cutting reviews.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I believe that there will be all-party support for this. All parties are interested in how the voluntary and community sectors operate in this country—it is common ground.

I want to tell the House that we have set up as part of the spending review a review of how voluntary and community sector organisations can play a fuller role in public service delivery. I am placing in the Vote Office this afternoon the terms of reference for a review of five specific areas, including social care, crime and community cohesion, education and learning, housing and homelessness, and children and families. The review will involve a nationwide consultation, which I thought that all sections of the House would support, with the voluntary sector.

We are also conducting in advance of our spending review, to secure the very value for money that people have been talking about in this debate, a review of child poverty and the public services of this country that will consider how we can improve the attack on child poverty by improving public services, as well as financial benefits. That will be part of a review that will go hand in hand with a child care review.

As part of the public spending reviews, there will also be a review of financial support for 16 to 19-year-olds led by the Paymaster General. The House will know that we commissioned some months ago a review of public sector and civil service relocation as well as a review of efficiency. That efficiency review is examining new ways to provide Departments with incentives to provide opportunities for efficiency savings. [Interruption.] I am also publishing today the terms of reference for a review to examine how best to achieve decentralised delivery.

Several hon. Members:

rose—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. We should have a major reduction in the amount of sedentary interventions. The House must listen to the Chancellor.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

Normally, when an announcement is made about a series of reviews taking place in the run-up to a spending review—some of which the Opposition would wish to support, in my view, given what they have said today—an Opposition party would want to welcome what we are doing, instead of shouting from a sedentary position. The fact is that the programme of investment and reform is continuing, and these reviews, as part of the next spending review, show that that will be stepped up over the next year. The shadow Chancellor should support these reviews, because they are about value for money and efficiency going to the heart of public services, including local delivery. The Conservatives have revealed today, through their conduct in this debate, that they have only one target—to cut public spending on the health service and on education—and only one purpose: to move operations, treatment and staff into the private sector. They used to be able to say that the national health service was safe in their hands; it is no longer safe in their hands, and I commend our amendment to the House.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury 5:01 pm, 7th July 2003

I wonder what it tells us about the Chancellor's confidence in the Government's record on public services that he should take the time to come to this House today to respond to an Opposition day debate on public services and Government targets, and in doing so say absolutely nothing about those two issues. All that we have heard from him is a speech three quarters of which was devoted to Conservative health policy, with the remaining couple of minutes given over to a series of reviews that are apparently supposed to address the issues before us some time in the very distant future.

I can only assume that the Chancellor's speech was so extraordinarily vacuous because he is ashamed of Labour's record on public services and on delivering the public service agreement targets. Perhaps he was so unwilling to give way at the beginning of his speech because he anticipated that we might return to the evidence that he gave to the Treasury Committee last July, when he told us that 87 per cent. of the targets from the 1998 spending review, which were to be delivered in the period to 2002, had been delivered. Yet we now discover that, according to this weekend's edition of The Sunday Times, the Government have misled Parliament about their improvements to public services by overstating the number of targets that they have achieved, according to a memorandum from a Cabinet Minister.

That Minister proved to be none other than the Chief Secretary to the Treasury, who is responsible for monitoring public service agreements in the first place. [Interruption.] As this vital issue goes to the heart not only of the Government's credibility but the Chancellor's, perhaps he will take this opportunity to intervene on me—instead of gossiping with other Ministers from a sedentary position—and correct this information, which has been put in the public domain, if it is wrong. [Interruption.]

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. There are too many private conversations going on in the House. I do think that the House should listen to the hon. Gentleman.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

Thank you Mr. Deputy Speaker—I quite agree. You were generous to the Chancellor in allowing him to stray on to Tory health policy for three quarters of his speech, and you are right to point out that he needs to respond to the allegation that is being made. The allegation is that this year, the Chief Secretary to the Treasury misled the House by saying that only 13 per cent. of the PSA targets had not been met, and that the Chancellor repeated exactly that claim to the Select Committee last year, when he said that 87 per cent. of the targets had been met. Now we discover that, according to a memorandum to the Public Administration Committee, more than 90 of the 239 key targets set by the Government in 1998 were missed. Perhaps the Chancellor will clarify whether he now wishes to change the estimate that he gave to the Select Committee last year. I am happy to give way to him on that point.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The Chancellor is very good at giving way to other people when he wants them to speak, but he seems a little more reticent in coming forward when we are told that a memorandum to the Public Administration Committee states that the Chief Secretary and the Chancellor have misled the House on the question of the percentage of public service targets that have been met. That is an extraordinary claim, and I hope that any member of the Treasury Committee who is present will take the opportunity at hearings later this year to return to an issue on which the Chancellor is so reticent.

The Government have been in power for more than six years. On 2 August, they will become the longest-serving Labour Administration of all time. For the first couple of years, it was a passable excuse to say that many problems in the public services resulted from at least two decades of under-investment by preceding Conservative Governments. That excuse is wearing incredibly thin. In less than six years, a previous Prime Minister—Winston Churchill—managed to win a world war, but the present Prime Minister has been unable even to make the trains run on time. Perhaps that was why the Chancellor was so determined to talk about everything other than the Government's record of delivery on public service agreements and public services.

The Chancellor may hope that he can get away with ignoring those things. He may hope that people have not detected the Government's failure. If recent opinion polls are anything to go by, however, he would be mistaken in hoping that people do not see the failure of the Government's public sector policies. In the most recent published poll, the net improvement balance—that is, those who think that public services have improved versus those who think that they have deteriorated—is minus 16 percentage points in transport and minus 10 percentage points on the national health service. I should be happy to give way to the Chancellor if he thought that I had got that wrong. Even on education, where there was previously a positive balance of 12 points, the poll taken after the chaos in school budgets earlier this year shows minus one percentage point: even on education, people believe that performance has deteriorated. The outcome was exactly the same on policing.

The debate gives us an opportunity to touch briefly on alternative proposals put to the Government on public services, including some of those put forward by the shadow Chancellor, Mr. Howard, in a variety of areas. The Chancellor spent much too much time covering Conservative policies on health, but I agreed with his basic analysis, which was summed up in an article in The Times on 6 June by a Mr. Green, who said that the Conservatives had had six years to rethink their health policy but the previous day's patient passports announcement had shown that all that they had come up with was another escape route from collectivism for the relatively well-off.

Problems in the Conservative party's new policies on public services extend not just to health but to education. Only weeks after the Tories announced their intention to abolish tuition fees, there are already divisions in their ranks. According to The Times, Mr. Jackson—a former Education Minister—last week met the Tory leader and Mr. Green, who is shadow Education Secretary, to ask that the pledge on tuition fees be reconsidered. Apparently, the hon. Gentleman led a delegation of MPs including a former Health Secretary, Mr. Dorrell. Critics within the Conservative party are apparently saying that its policy is opportunistic and impossible to implement.

Since we are dealing today with public service agreements, we also want to know whether—

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

The debate is about targets.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I am glad that the hon. Gentleman has mentioned targets; we want to know, for example, whether the commitment given on targets in the 2001 Conservative manifesto on the patient's guarantee on maximum waiting times in particular clinical areas is still in place. We should shed some light on that important issue.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The hon. Gentleman has said a lot about Conservative targets. May I interest him in a target in his own county of Somerset? The local education authority—Liberal Democrat-controlled—has kept back nearly £10.5 million from the county's schools, and Somerset is missing targets. Should he not put his own house in order before he throws stones at other political parties?

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

My Somerset colleague is wrong. Perhaps he is unaware that I had a letter from a Minister at the Department for Education and Skills recently saying that previous claims that the Government had made that Somerset local education authority and others were to blame for the funding problems were inaccurate, and that the problems were caused by the Government. I hope that the hon. Gentleman will welcome that recognition of a funding problem caused by the Government's policies.

When we consider performance in the public services, we must keep in mind the two issues of funding and of delivering through the public service agreements and the other reforms that the Government are pioneering. It is perhaps not surprising that delivery has been poor so far, because on the first issue, funding, we can see that in the Government's first period in office the record was exactly the same as it was under Mrs. Thatcher. In the period from 1979 to 1990, the increase in total managed expenditure was identical to that in the first period of office of the current Prime Minister. It is therefore not surprising that the legacy of underfunding has continued and been so damaging in areas such as education and health.

The shadow Chancellor did not set this out today, but it would be interesting to see at some stage whether he would be willing to match the more significant increase in health and education spending that we have had in recent years, and whether he will offer something more than the paltry funding that we had under the Conservatives, including the slowest period of rise in education funding in the whole post-war period.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

The hon. Gentleman has spent his entire speech criticising either the Government's missing of targets or Conservative party policies. It seems to me that the Liberals have few policies. Before he finishes, can he tell us one or two basic things? What would the total managed expenditure be if the Liberals ever got anywhere near power over the next three years? What would they do about health spending? Would they match the Government's health spending or exceed it, and if so, by how much?

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I shall be delighted to answer all those questions, and I apologise for spending so long criticising Conservative and Government policies, but there is so much to criticise, and it is only right to subject their policies to proper scrutiny.

Year in, year out, since 1998, the Government have been saying that they are about to enter a year of delivery. That year of delivery has never been reached. It is a matter of concern, as the shadow Chancellor said, that the Secretary of State for Trade and Industry now seems to be wondering whether the Government ought to be delivering at all, with her suggestion that it is not as easy in public services as it is in areas such as pizza delivery. It is astonishing that, six years into this Government, when we are about to match the longest term in office of any Labour Administration, the Government are backing away from public service delivery, to the extent that we have had a speech from the Chancellor that was entirely content-free in relation to the issue on the Order Paper. [Interruption.] The Chancellor mutters away, but he is not willing to clarify whether he and the Chief Secretary have misled the House on the targets on PSAs from the 1998 spending review. [Interruption.] I will give way to the Health Secretary if he thinks that he can do better than then Chancellor on that subject.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

We will listen with interest.

The figures calculated last year by both the Liberal Democrats and the Conservative research department are now seemingly being confirmed by the Government, in the memorandum that has gone to the Public Administration Committee, about which the Chancellor is so reticent. Those figures show that at least a third, and probably 40 per cent. of the targets set in the first spending review were not met. Many of the targets have now been changed, and some have been deleted, and of course there is that third classification, alluded to by the Chief Secretary on many occasions, of partially met—which to most of us means not met at all.

Today figures from the Department for Transport—not Liberal Democrat or Conservative figures—revealed by a commission specifically set up to assist the Government to deliver on public services, show that Ministers have been blown off course and are failing on six of the 17 targets set by the Deputy Prime Minister, including the ill-fated target to triple the amount of cycling that was supposed to take place by 2010. We are now told that cycling fell by 17 per cent. in 2001. An excuse from the Department tells us that it is in the nature of transport that it takes a long time for investment to make an impact. Apparently, there will be dips and troughs on the way to meeting the targets. That is yet another partially met target, and we await with interest to discover whether it will ever be met or will be revised away in the meantime.

Then we had the shambolic evidence given by the Chancellor to the Treasury Select Committee in July last year, which appalled even the Labour members of that Committee. I hope that that will be good reason in time for those Labour members to take up the issue of public service agreements in a separate report. The Chancellor confirmed in his evidence the 87 per cent. figure, which we now know is rubbish. Perhaps the Chancellor anticipated it at the time in using the words

"What is said is that 87 per cent. of these have been met", suggesting that he may have known that the Government's figure was entirely bogus.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury

Does the hon. Gentleman believe that the whole targets approach adopted by the Government is practical, given that the private sector gave up on it about 15 years ago because it did not work? It produced distortions, cheating with numbers and all the problems to which my right hon. and learned Friend the shadow Chancellor referred. It would be helpful to know whether Liberal policy is in agreement with that.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman anticipates my next comments in which I shall pick up on the distortions that the existing targeting regime has caused and argue that we would prefer a much lighter-touch approach in respect of overall targets because micro-management by targets has clearly failed.

When the targets were first set up, the Chancellor gave the impression, as he began to emerge from the Conservative straitjacket on spending, that in exchange for additional public expenditure there would be incredibly rigorous monitoring of public service agreements and that anyone who failed to perform in relation to public service targets would be penalised in consequence. In fact, the Secretary of State for Work and Pensions said in a press release in November 2000 that there would be

"a rigorous monitoring process and action will be taken where there is a risk that a Department's performance is off track."

In other words, a clear impression was given that if Departments failed, there would be a penalty to pay.

By the time that the Chancellor gave evidence to the Select Committee, that rather formidable and frightening prospect seemed to have receded entirely. It appeared that there was not only no prospect of Departments being penalised, but that Departments would monitor their own performance on public service agreements and report on themselves. In other words, the Treasury's oversight—and the initial impression that it would be involved considerably—seemed to have disappeared altogether. When the Chancellor was asked by hon. Members from different parties whether there would be any penalties if Ministers failed to deliver on public service agreements—in the Home Office, for example, where 11 out of 16 targets had failed at that time—all the Chancellor could say to me was:

"Are you saying that the conclusion you reach is that no more police are needed?"

In other words, the sanctions that were going to apply at the beginning of the process seemed to have disappeared entirely out of the window.

When we pressed the Chancellor further on that matter and asked what would happen if the Home Secretary did not deliver, we were told that no penalties would be applied and that it would be a matter for the Prime Minister and the electorate. In other words, the great system of Treasury control over public service agreements, the monitoring, penalties, rewards for performance and so forth, had all gone completely out of the window, so it was left to the Prime Minister to consider the problem and to the electorate to hold the Government to account. I am sure that the electorate will hold the Government to account when that opportunity arises.

Photo of John Bercow John Bercow Conservative, Buckingham

Leaving aside the important debate about whether the Treasury or individual Departments should be the arbiters, does the hon. Gentleman agree that for the Government to fail to meet targets set by independent experts would be disappointing, but that for the Government to fail to meet more than a third of the targets that they have set for themselves requires incompetence on a truly spectacular scale?

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman is right, and that is why we hope that the Chancellor will take the opportunity to intervene to tell us whether the memorandum from the Chief Secretary, which has apparently gone to the Public Administration Committee, is accurate. If it is accurate, and the Government have missed a third of their targets, that is a serious matter, because both the Chancellor and the Chief Secretary may have misled the House.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

As a member of the Public Administration Committee—I think that I am the only one present, because the Committee is sitting at the moment—I can tell the hon. Gentleman that we are still considering that issue. The shadow Chancellor has done much work on how many targets have been missed, but we cannot get the answers.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I am grateful to the hon. Gentleman for that insight. I hope that he will continue that probing, because it is very necessary.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

Does the hon. Gentleman see a paradox in the Government's approach to local authorities and Departments? The Government make local authorities meet their comprehensive performance assessments and penalise them if they do not, but the Government do not penalise Departments if they do not meet their public service agreement targets. Is not that a case of do as I say, not as I do?

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman is right. If he read the statement made in the spending review 2002 by the Chancellor about which individual public service delivery units would get penalised if anything went wrong, he would notice that Ministers and Departments were noticeably absent. By that time, the idea that Departments could be held accountable had gone out of the window. It was schools, hospitals and local authorities that would be held accountable, not Ministers and Departments.

The Government's targeting regime has other problems and I hope that the Secretary of State for Health will detach himself from his conversation now, because he may be interested in my points about the health service. Targets in the health service potentially distort performance and priorities in many ways, but one of the issues that must be of concern is the way in which the Government are targeting only the in-patient and out-patient waiting lists. They are not targeting the waiting time from consultant to consultant or the waiting time for diagnostic tests, both of which hon. Members will find raised most often in their post bags and constituency surgeries. In many areas, those waiting times are still more than a year and sometimes more than two years. I welcome the fact that the Government are trying to bring waiting times down, but if we are to make the public service agreement targets meaningful to people, they must apply to all aspects of waiting times, especially to the diagnostic waiting lists, which can be so important for treatment.

I hope that the Secretary of State for Health will scrutinise the way in which the targets are recorded, and whether they are credible. I have an example from my local area of the ways in which the Government record some of those vital statistics. It was raised with me by a constituent who saw in the local newspaper that the local trust had met the six-month in-patient waiting list target. The trust has done a fantastic amount of work to bring its waiting list down, and that is welcome. However, the individual in question contacted me about cataract surgery, because his experience was at odds with that reported in the local newspaper. He had waited for between six and 12 months to have one of his cataracts treated but, in order to speed through the waiting list for cataract treatment, the other cataract was not done at the same time. After he had had the first cataract treated, he was put on what is called a planned waiting list, which is taken in date order and on which the wait is approximately 12 months. In the health sector, we give indicators that pretend that we are treating people within six months, while, across the country, the actual experience of many people is that they have to wait longer. In commenting on the issue, the hospital said that the regulations about what it counted and did not count were set not by it but by the Department of Health.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I do not know about the individual case that the hon. Gentleman raised, but I caution him, as I did Dr. Bogle last week: I have no doubt that, as in any organisation, when there are targets or objectives, people will occasionally try to meet them by means with which we would not agree. The hon. Gentleman should be careful not to add his voice to those who for their own reasons have no sympathy or support for the national health service and want to portray the commonality—

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

The right hon. Gentleman wants to gag them.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I have no wish to gag any criticism, but I do not want anyone to support the impugning of the integrity, hard work, dedication and professionalism of the vast majority of those who work in the national health service.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I was not aware that I was impugning the integrity either of the health service or of people who work in it, and neither was my constituent who raised the issue with me.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

Will the hon. Gentleman accept that it is neither common nor typical? The vast majority of the 1.3 million people active in the health service are dedicated and committed professionals who would not stoop to means of deceit. That is all he has to say. The constant chorus from the Opposition and one or two of their allies in the media to denigrate and run down the NHS will get no support from the Government Benches.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The Secretary of State has been sitting next to the Chancellor for too long. He is using the same tactics of distract and evade as the Chancellor used during his speech. He is trying to take us away from the issue, but I hope that he will take those points seriously.

I understand that the right hon. Gentleman's predecessor was concerned about those issues, especially in relation to diagnostic tests. If we put such an emphasis on waiting times in the health service, they must be credible and understood by our constituents.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I know that it is difficult for the hon. Gentleman, but will he take this third opportunity to say that he does not believe that the practice is common among NHS staff and that the vast majority of them are decent professionals who are wholly committed to what they are doing? It is simple to say; or is he joining the malign attacks by the Opposition on those who work in the NHS?

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

Those are still diversionary tactics. Of course, I am not attacking nurses and doctors—

Photo of John Bercow John Bercow Conservative, Buckingham

The hon. Gentleman is attacking Ministers.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

Indeed I am. I am attacking the Secretary of State, but perhaps I am not doing it clearly enough. A letter from the Somerset trust stated that it abided by the regulations because they were set by the Department of Health. I am not accusing my local NHS trust of fixing or fiddling the figures. The trust is reporting the figures exactly as the Secretary of State suggests it should. The reporting is entirely consistent with what the right hon. Gentleman wants. Nevertheless, the figures are misleading, because a huge number of people are waiting for diagnostic tests and consultant-to-consultant referrals. Perhaps they are on the planned waiting lists, which, of course, were not set up by people at my hospital but by Ministers. I hope that the Secretary of State will look into that, even though he has only recently taken up his position.

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

Did the hon. Gentleman hear the remarks of the outgoing chairman of the British Medical Association? He said:

"You would think . . . that the government would be distancing itself from . . . corrupt and immoral practices . . . Instead, it has turned a blind eye, been triumphalist about its 'achievements' and colluded in deception and doublespeak."

It is not NHS staff who are to blame; it is not their integrity that is being impugned but that of Ministers. NHS staff are as much victims of this culture as are the patients.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman is right. I am certainly not suggesting that people who work in the health service are corrupt. They have to respond to the targeting regime and report information precisely in the manner set down, and daily micro-managed, by the Department of Health. If the Secretary of State wants people to believe in the improvement in public services and in the health service, if he wants people to celebrate the reduction in waiting times, which is occurring in some parts of the country, including my area of Somerset and Dorset, and which I very much welcome, we must ensure that the figures reported by the Government are in line with people's actual experience. At the moment, they are not because we are not picking up the diagnostic waiting lists, the consultant waiting times or the planning waiting times.

Of course there is a whole series of ways in which the present public service targets distort activity and often create priorities that would not be those of the people on the front line. That is the concern, and we see it not only with PSAs, but in many other parts of the public services. We see it in the ear-marked moneys that are handed down by the Chancellor and in his packages that are allocated to capital spending even for schools that have just been rebuilt and have no capital priorities but would like to spend the money on school staff. We see it the class-size limits, which are often welcomed in respect of extra resources, but which may lead to pressures on the ground, so that head teachers are forced into arranging schools in a way that they do not believe is best, as I found in a primary school in my constituency this morning. It is there in the micro-management of chief police constables. When I visited the chief constable of the Avon and Somerset constabulary this year, his own local priorities were being dictated by the Home Secretary, not by the police authority itself.

In all those ways, the Government are distorting the delivery of public services, and they think that they know better than people on the front line when they do not. Even in those areas where the Government claim to have a new localism, giving greater autonomy to the public services, that autonomy has to be earned. In other words, the Government presume that they should hold on to power and others have to earn it if they are to exercise discretion. Clearly, that is entirely the wrong way around.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I will not give way because I have used up far too much time already, although I am grateful to the hon. Gentleman for raising an issue earlier.

Earned autonomy is not good enough. The presumption must be that, in a regime where reasonable inspection takes place, the front-line deliverers of public services are trusted to deliver, rather than the Government shackling front-line public services with their own constraints and so-called earned autonomy.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

On a point of order, Mr. Deputy Speaker. I heard you twice upbraid the Chancellor for criticising Conservative policies. At least we have some policies. I asked the Liberals a few questions about their own policies. The hon. Gentleman has been speaking for more than half an hour. Is it too much to expect that, by the end of his speech, we might hear—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman can safely leave such matters to the Chair.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

I should be delighted to speak for another half an hour or so to outline Liberal Democrat public services policies. In fact, I suspect that half an hour would not be nearly enough. However, I hope that I have made it clear that we believe, uniquely as a party, not only in the funding that has been absent from this Government's first term and that was so lacking in the Tory party's 20 years in power, but in decentralisation, not the Government's phoney decentralisation—their earned autonomy—not the decentralisation that the Conservative party talked about when in power but did not deliver, but real decentralisation to the front-line delivers of public services. If we can have the additional cash, the reform and the decentralisation, we at least have a chance to deliver the improvements in public services that all of us—at least Liberal Democrat Members—wish to see.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford 5:33 pm, 7th July 2003

It is important to recognise that the motion is not about what proportion of targets has been achieved. It is not about the generality of targets or the number of targets. The motion absolutely condemns targets as a concept. It talks about a regret

"that the Government have used targets".

It talks about them diverting

"time and attention away from the task of improving public services".

It is a blanket condemnation of targets as a means of centrally controlling or directing public investment.

As Mr. Howard said in response to a question from me earlier in the debate, the motion refers to targets being replaced by

"professional autonomy, decentralisation, diversity and choice in the public services".

In other words, it is saying that the money provided by the Government should be handed over—blocks of it—and the public services should be left to get on with it. That may be reasonable, but we need to judge that assertion against the record of the people who are putting it forward, because the Conservative party has a record. We also need to judge the motion in the context of the Government's economic policy as a whole, because the investment programme in public services is a major part of that overall economic policy. That programme and its achievement depend crucially on some kind of direction of the investment to ensure that what is intended is achieved.

Let me start, therefore, by examining the motion in the context of the record of those proposing it. In 1997, when this Government came to office, there had been 18 years of neglect of public investment, despite the bonanza of North sea oil, which one would have thought could have been the spur to renewing public investment in Britain. Instead, the advantage that that brought was frittered away on tax relief for the better off. While that was being done, health, education and transport were neglected. Mr. Laws spoke about the fact that the rail transport targets have not been met. It was not appreciated until the Hatfield rail disaster, however, how disastrous the neglect of investment in railways had been for the railway service, and how disastrous it was to compound that neglect with the folly of rail privatisation. It is therefore not at all surprising that we have a more difficult position now than we anticipated—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I say to Paul Farrelly, who has just walked into the Chamber, that he must not walk directly across the line of sight of the hon. Member speaking and the Chair. I appreciate that he did not realise that, but it is an important point.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

These things feed off each other. Some of the targets, particularly in transport, have not been met because the consequences of 18 years of neglect had not been fully appreciated.

At the same time as that neglect of investment, the public finances were left in a dreadful mess, with a £29 billion deficit. By what means was that to be paid off? By a fuel tax that burdened pensioners in particular. The double whammy of 1997 was therefore a neglect of investment and at the same time a Government deeply in the red. It was fecklessness compounded by incompetence. The economic policy that lay behind that was going nowhere. The recession of the 1980s was followed by the recession of the early 1990s, with an interlude of rampant inflation in between. The strategy for the economy was that a country with some of the most capable and ingenious people would compete with the rest of the world on costs. Our future was to out-sweat the sweat shops of Asia. In a perverse way, I suppose that that explains the Conservatives' neglect of state education and the way in which the universities were allowed to decline so disastrously. Against that background of instability and, at the same time, a lack of confidence in Government competence, lay a lack of confidence in business, not surprisingly, and businesses did not invest.

Let us contrast that position and put it as the background to this motion. It is not a record that instils great confidence in the sense of the motion, but let us give the Conservatives the benefit of the doubt for the moment. Let us also examine it, however, in the context of Government policy, and contrast that with the scene of neglect and economic failure that I have been outlining.

First, priority was given to education and to redeeming a lost generation who had been on the dole for far too long through exercises such as the new deal. That was a declaration that this country's economic future depended on mobilising our skills and abilities, on the higher value that they could create and on competing with the rest of the world through our ingenuity and abilities.

The second main point of the strategy was a recognition that social justice and economic growth were not opposed and that it was not a case of choosing one or the other—they go hand in hand. It was not accepted that we could wait for a magic day when the economy would be right and then start to invest in the health service, education and transport, and put things right in sequence. Public finance and economic management had to be put on an entirely different foundation, and public service agreements form part of that general structure. A restraint on spending for two years to help to put the public finances right—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I am sorry to interrupt the hon. Gentleman again, but he has made some general financial remarks and I trust that he will now relate them to Government targets.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

Indeed, Mr. Deputy Speaker. I am attempting to outline the broad structure of Government policy in which public service agreements and, therefore, targets fit. PSAs form a major part of the Government's programme of investment by ensuring that the investment achieves what people voted for and wanted.

The other big rules in the strategy were the independence of the Bank of England and a target of 2.5 per cent. inflation—I wonder whether that will be condemned with all the others—with the rate kept within 1 per cent. above or below. Do Conservative Members want that to go out with all the other targets so that there would there be total devolution to the Bank of England with no further intervention from the Chancellor?

The fiscal rules are part of the general complex. There is a golden rule of ensuring that borrowing occurs only for investment so that we do not return to the previous Government's policies of live now, pay later. The sustainability rule ensures that we do not run up debts and leave them to be paid in the future.

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

I endorse my hon. Friend's point about the sustainability of the repayment of public debt and agree that we should not pass on debt to future generations. However, given the broadening and expanding use of the private finance initiative, is there not a risk that we are doing exactly that? We are requiring later generations to pay for the investment from which others will benefit.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

The reverse is true, and I think that my hon. Friend has misunderstood the nature of payments under the private finance initiative. Under the PFI, the public sector pays year by year as services are used. Consequently, the services gained in one year are paid for in that year. Whatever sins one might adduce to the PFI, burdening people in the future cannot be one.

Photo of John Bercow John Bercow Conservative, Buckingham

I am grateful to the hon. Gentleman for giving way because he is a loyal Government workhorse. Surely one of the central political questions behind the debate is whether the measurement of public service agreement targets is so flawed as to undermine the integrity of the targets themselves. In that context, does he think it right that if a PSA target has five components and the Government miss four, Ministers are justified in recording the target as being "partially met"?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I shall talk about what is amiss about the targets in a moment. I tell the hon. Gentleman that the questions of whether we have quantified the targets that have been adopted sufficiently well and whether that quantification has been adequately measured are the subject of a different debate. If we accept targets, we may consider the way in which they are properly implemented. If he is saying that several of them are difficult to measure or are bound to be subject to judgment, I go along with him entirely. However, that is not the motion before the House. It says that we should not have targets at all. It seems that the targets, which are somehow flawed, should be swept away and everything should be devolved. If he wants to stick to the line that he took, I suggest he thinks about voting against the motion.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

Where in the motion does it say that there should be no targets at all?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

The last few lines state that the House

"regrets that the Government has used targets as a substitute for real reform; and calls on the Government to embrace the principles of professional autonomy, decentralisation, diversity and choice".

I am not against any of those things, but if we use them to replace targets, there is no means by which we can influence how money is invested.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman's comments clarify that the motion does not specify that there should be no public service targets at all. It could mean—this is for the Conservative spokesman to clarify—a much smaller number of key targets without the same amount of micro-management. Does he agree?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I do not. The words speak for themselves. The motion says:

"regrets that the Government has used targets".

It is quite simple.

Photo of John Bercow John Bercow Conservative, Buckingham

I welcome the hon. Gentleman's belated concession of defeat to Mr. Laws. For the purpose of clarification and the avoidance of doubt, I put it to him that the central problem in the Government's position is that when important targets have been set that should have been met, they have not been, and that when they have met a target, it is of the vacuous character, "We will publish a White Paper", which does not represent the apogee of political achievement.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

The hon. Gentleman is adept at making generalised condemnations. I shall give way again if he gives me two examples to support his argument.

Photo of John Bercow John Bercow Conservative, Buckingham

I am very happy to do that. It is overly generous of the hon. Gentleman to give me such an opportunity and a bit uncharitable of me to exploit it, but I appreciate it none the less. A good example is the failure to meet the truancy target, followed speedily by the decision to abolish it. I should like to adumbrate the argument, but I fear that I would fall foul of you if I did, Mr. Deputy Speaker.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I shall not respond directly to the hon. Gentleman because I am about to address the application of targets and their value if they are not met. Plainly, they are not always met, but they are, nevertheless, of value to the administration of large investment projects.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Does my hon. Friend agree that one great benefit of our targets is that they are, at least, made public? Does he remember when the Conservative Administration in the 1980s set targets in secret for the pound against the Deutschmark? We all know where that led.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

In terms of the motion, the Conservative party's record on economic management would have meant us debating the abolition of long division because its Government were incapable of basic arithmetic, let alone anything complicated. However, I shall deal with the points raised by Mr. Bercow in the context of my other remarks.

Having succeeded so well in our economic performance and in providing the money that is vital to regenerate our public services, it is essential that we ensure that the money is spent to best effect. In a nutshell, that is what public service agreements are about. They do not mean putting money into an organisation and hoping for the best, which would be the effect of the motion. Those long-neglected services need not only investment, but modernisation and reform. Although investment is a major issue, the thinking behind the services, the style of service provided and their procedures have not been modernised in the past 18 years. If we are to meet the demands of people in the 21st century for personal and much more immediate service, investment in, and reform of, public services must go hand in hand. Public service agreements are the means of ensuring that.

The targets that we set enable us to monitor carefully whether investment and reform are being achieved. There will be cases in which those aims are not being achieved, and year-by-year monitoring is the means by which attention is called to those cases so that remedial action can be taken. That ensures that we do not wait five or 10 years before we see that the ultimate target has not been met and then wring our hands.

Targets provide a means of making corrections as we go along, year by year. [Laughter.] I am surprised that Mr. O'Brien finds that so amusing. Is he suggesting that, once launched, any of those programmes should be left on autopilot with no one looking at them again? If they were left on autopilot, against what would we judge them if we did not have some idea of where we were going? If, by monitoring performance against a target, we find that the target is exaggerated or too optimistic, we adjust it. I shall tell the hon. Gentleman a secret: every private company in this country that is engaged in major investment runs its programme in that way.

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

Is it not in the interests of the Conservative party, which, in its heart, does not believe in the concept of high-quality, wide-ranging public services, to remove performance indicators from those services, so that the party's success or failure can be judged by journalists who write the editorial column in that esteemed organ, the Daily Mail, and who successfully employ the broad-brush, condemnatory style that Mr. Bercow has made almost his own in the House?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

There is a great deal of truth in what my hon. Friend says.

Photo of Stephen O'Brien Stephen O'Brien Conservative, Eddisbury

I am grateful to the hon. Gentleman for giving way in his increasingly long speech on an Opposition motion. Having already been trounced in his attempt to suggest that the motion proposes the complete scrapping of targets—those words do not appear on the Order Paper—does he now recognise that the Opposition's objection to his statement that all targets need to be corrected is that, because of the Government's abject failure in the delivery of public service targets, corrections occur only when they scrap them or revise them downwards, against the interests of our constituents?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I shall come in a moment to the question of there being too many targets in the beginning. I want first to say a little more on the justification for the general idea of public service agreements.

After 18 years in which the civil service and public agencies had become used to a culture of contraction, in which their projects were constantly thwarted because those started during the boom were cancelled or reduced during the bust, there was no reception of the idea that public services should be expanding. Those who were responsible for carrying out programmes needed an indication of what they were expected to achieve. They could not reasonably be expected to float in a vacuum, with the Government saying, "Here's the money to improve hospitals," and leaving them to work out how to do that. Targets gave those people some direction, and that was the second purpose of targets.

Public service agreements do not arise from the Chancellor or the Treasury dictating what is to be achieved by schools or hospitals but from a discussion between the Treasury and the Department concerned. The latter has connections with the professions and organisations that will be the implementing authorities. The idea, which is constantly put about, that a public service agreement is an imposition by the centre, made for financial reasons, is false. Targets that are not met were previously agreed, not set by some grey eminence in the Treasury.

Targets are not simply a matter of being able to tell when we have got where we want to be; they allow us to see whether we are moving off the track that we ought to be on, and of taking remedial action if necessary. They are the only means of controlling major strategic programmes. It is unbelievable that we could be arguing about that point. Targets are the only insurance that what the Government are spending on health and education will result in the performance that the public need and expect.

I accept that in the beginning there were far too many targets—some 160—and that they were somewhat general and difficult to judge. However, that was the first step towards bringing in a system in which public investment could be controlled in the way that I am talking about. The previous Conservative Government had no such system. Conservative Members are hardly warranted in talking about the discrediting of the system. The system that was discredited is the one in which there was no attempt to control public investment at all.

The motion talks about the PSAs being deeply flawed, but they go hand in hand with targets. The motion says that they stifle local initiative, diminish professional responsibility and divert time from the task of improving public services. I do not believe that for a moment. If one looks at the targets, as opposed to generalising about them, one finds that they are very broad. They leave ample scope for individual teachers and doctors, and indeed hospital administrators, to make judgments. They give a broad guideline and say what the priorities should be. Why should they not do that? The general purpose of the Department of Health is to provide the overall picture. If there are no targets, the overall picture is not represented in the decisions made on the ground.

What targets do not do is leave scope for obstructing reform. The programme of modernisation and renewal cannot possibly allow for obstruction, but there would be obstruction at every turn if nobody were watching and monitoring progress. The Opposition have lined up behind the idea that the old ways are the best. That is what the debate is all about. They want no change. They think that things were perfectly all right as they were.

The Opposition say that PSAs are deeply flawed, but, as I have said, no major company would dream of advancing on an investment programme 1 per cent. of the size of the Government's investment without putting in place a scheme such as this. It is time that the Opposition came not only into the 21st century, but into the 20th century. They are not acquainted with modern management techniques. It seems to me, from the speeches and interventions that we have heard, that they are a party of voyeurs. They have never disciplined themselves by determining what needs to be done to get things done, and that is essentially what PSAs and targets are all about.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

They toil not and neither do they spin, and they do not understand the disciplines of doing either. It is unbelievable that in the 21st century we have a motion against the very concept of a target as a means of managing major projects. I am sure that before long we will be having a debate on the need to abolish long division and double entry book-keeping, because PSAs and targets are as fundamental to managing major projects as long division and book-keeping are to arithmetic and accountancy.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Does my hon. Friend agree that a party that does not believe in public services does not need any targets, because it wants to privatise the lot? We saw what happened with Railtrack, which lost control of all its operations. We are trying to claw back investment, which needs to be carefully measured for improvement in future.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I agree. The reason that the Opposition can be so cavalier with the basic concepts of managing major projects is that they have no intention of managing a major investment project in the public sector again. That is what their policy implies, so they can indulge in these games.

The motion demonstrates that the Tories cannot be trusted with public finance, the economy or public spending—in short, they are not much good with money. The PSA targets are an essential measure to ensure that public investment achieves what is intended and what people outside want.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton 6:00 pm, 7th July 2003

I do not intend to comment on any of the spurious remarks made by Mr. Beard in a half-hour speech that said very little and therefore requires no response.

There is nothing wrong with targets per se. They are a useful measure of the success or failure of management or of a policy. Problems arise, though, when the targets are the policy itself—when the targets are the levers of management, instead of just a measure of the success or effectiveness of a policy. Targets have become, in many instances, a substitute for policy. Foist on an NHS manager a target to reduce waiting lists on pain of the sack and, hey-presto, he will reduce waiting lists, but will do so by distorting other health priorities. It is rather like changing the dial on a thermometer. Moving the pointer up will not change the temperature of the room. To warm a room, one must turn on the central heating.

People argue that targets are a symptom of an over-centralised governmental system interfering in local management and delivery. I believe the opposite is true. It is a symptom of accountability and decision-making power being too decentralised and diffuse, with little management power vested with the Secretary of State, to such an extent that, almost in desperation, his or her only recourse is to targets, inspectorates and increasing volumes of guidelines.

No properly run large organisation in the private sector or successfully run state operations are managed in such a way. What the three key failing public services have in common—health, education and the fight against crime—is that the organisations have diffuse accountability. The NHS is made up of more than 600 separate organisations, each with its own board, chief executive and chairman. More than 130 local education authorities manage education, and the police are accountable to county or unitary authority police committees. It is clear that, despite Herculean determination on the Government's part, these public services are still failing.

Let us take one example, education. Twenty-three per cent. of adults in Britain cannot read properly. That is one of the worst adult literacy rates in the developed world. It compares with just 7 per cent. in Sweden. Children from poorer backgrounds too often go to secondary school with a reading age two years below their chronological age. Twenty-three per cent. of adults in Britain cannot add 50 and two to make 52. The hon. Member for Bexleyheath and Crayford mentioned long division, but a quarter of adults in Britain cannot even add two basic whole numbers.

Those figures come from a recent National Audit Office report comparing international education statistics. They are 1997 figures, but those are the latest available.

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

The hon. Gentleman is obviously very numerate. Will he assess the proportion of the 23 per cent. of fundamentally innumerate or illiterate adults who received their entire education under the 1997 to 2003 Labour Government?

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

I am not making party political points in this debate. It is a sad indictment of the last Conservative Government that when we left office 49 per cent. of 11-year-olds did not reach an acceptable level in reading, but there has been no real improvement since the 1997 election. Standard Assessment Tests tests show that 75 per cent. of 11-year-olds now reach an acceptable level in reading, but that is still way below the target level of 83 per cent. and still means that one in four 11-year-olds go to secondary school unable to read properly. There is also real doubt about the validity of that figure of 75 per cent.

Professor Tymms of Durham university has conducted his own tests, taken by 5,000 year 6 children in the same 122 primary schools every year since 1997. They show no improvement in reading ability. To quote Professor Tymms:

"The children are getting no better. It's just that our staff are better at teaching to the test."

The social exclusion unit has warned that the Government have achieved little in bridging the huge gap in educational achievement, especially among males from unskilled backgrounds.

The question is why are we doing so badly in this country in teaching our children to read. In Switzerland, it takes six months to teach a child to read, compared with between two and three years in Britain, according to a study by Professor Prais of the National Institute of Economic and Social Research. The question that we should be asking in the House is why. The answer seems to be that in Switzerland children are taught to read using a system called synthetic phonics, learning the sounds of letters and putting together those sounds to make a word—for example, C-A-T. In Britian we use a combination of "look and say" and analytical phonics. Children are taught to look at the shape of a word—"elephant", for instance—and to memorise that shape.

In a study by St. Andrews university in co-operation with Clackmannanshire education authority, about a dozen first-year primary classes in which a synthetic phonics approach to reading was used were compared with classes using various conventional British methods. Taken as a whole, the comparison showed that pupils taught using synthetic phonics learned about twice as rapidly as those on conventional analytic "look and say" approaches. The proportion of underachieving pupils was approximately halved.

Conor Ryan, a Labour former special education adviser, agrees and takes the view that now is "an excellent opportunity" for the Government

"to move from neutral toleration" of synthetic phonics

"to more active encouragement of more intensive synthetic phonics at the initial stages of children's reading lessons."

Of course, that has not happened, so improvements in reading, to the extent that there have been any, have, as Conor Ryan says, stalled.

Photo of John Bercow John Bercow Conservative, Buckingham

For the benefit of David Taylor, would my hon. Friend confirm that he is not blaming a particular Government, but rather the system advocated by Kimberley, Meek and Miller, who are, to their eternal discredit as teachers of reading, on the record as saying that within the psychosemiotic framework, the shared reading lesson is viewed as an ideological construct where events are played out and children must learn to position themselves in three interlocking contexts? What nonsense.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

My hon. Friend is right. It is such nonsense and the prevailing—almost exclusive—view of education academics that is the problem that Members on both sides of the House, and Ministers in particular, should be addressing.

On secondary education, the Government like to cite the PISA—programme for international student assessment—international study, which shows Britain's literacy and maths levels among 15-year-olds as seventh and eighth among countries in the Organisation for Economic Co-operation and Development, but that starkly contradicts other, more authoritative and established international comparisons, such as the third international maths and science survey, which shows Britain at a poor 20th out of 41 countries.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

I will not. The hon. Gentleman spoke for long enough.

The PISA study was based on tests that—I quote from PISA—

"assessed young people's capacity to use their knowledge and skills in order to meet real life challenges".

In other words, they were common-sense tests—IQ tests—so it is not surprising that British children do well in them. They were not tests based on knowledge of the school curriculum, which was the basis of questions in other surveys, such as the one that I cited, the third international maths and science survey.

Again, the question is why are we failing so badly in this country at secondary level. The Labour party understood only too well in the run-up to the 1997 election that education was failing and that it was Labour's No. 1, 2 and 3 priority. Labour also understood very well one of the key causes of the failure at secondary level. The 1997 Labour manifesto stated:

"We must modernise comprehensive schools. Children are not all of the same ability, nor do they learn at the same speed. That means 'setting' children in classes to maximise progress, for the benefit of high-fliers and slow learners alike."

That commitment was repeated in the 1997 White Paper, "Excellence in Schools". It is odd, then, that six years later, only 26 per cent. of lessons in year 7 are setted, 39 per cent. in year 8, 45 per cent. in year 9, 39 per cent. in year 10 and 44 per cent. in year 11. Overall, only 38 per cent. of lessons in comprehensive schools are subject to setting. In other words, 62 per cent. of lessons in comprehensive schools take place in mixed-ability classes.

Despite a clear commitment to reduce the amount of mixed-ability teaching, no such reduction has taken place in the past six years. There is a keen debate among education academics in the US, and to some extent in the UK, about the efficacy of setting. It is an ideologically driven debate in which the key protagonists are J. E. Slavin, who vehemently opposes setting on the grounds that it is inegalitarian and undemocratic, and J. A. Kulik, who argues that setting children in accordance with their ability in a particular subject and tailoring the course content to each ability level will produce significant gains at the upper level and modest gains at the middle level, while those at the bottom level will see no improvement, but no decline either.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

If my hon. Friend will forgive me, I wish to continue my argument, as other hon. Members wish to speak.

Moving slow-learning children out of mixed-ability classes does not reduce achievement at the lower levels, but leads to significantly rising standards at other levels. There is also clear evidence that the self-esteem of low-achieving children rises with setting. My view is that setting means that extra resources, including smaller classes or better teachers, for example, can be targeted at the low-ability sets, with a view to raising achievement at all ability levels. That may sound technical and managerial, to use the Prime Minister's words, but it is not. It goes to the very root of the causes of failure in our state education system. The reason we have so much mixed-ability teaching is in many ways ideological rather than merely technical.

I urge Labour Members who are genuinely interested in improving our education system to read the study by Tom Loveless entitled "The Tracking and Ability Grouping Debate". The evidence is overwhelming that setting works, delivers higher standards and is beneficial to children from lower socio-economic groups and ethnic minorities, but it involves eradicating mixed-ability classes in our comprehensive schools. That presents a dilemma for people on the left, including many Labour Members. If we accept the research evidence showing that setting raises standards significantly, especially among able children from poorer backgrounds, we must ask which is more important: the social egalitarianism of including children of all abilities in one classroom or the genuine social equality that is a consequence of the high educational standards—

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

On a point of order, Mr. Deputy Speaker. The hon. Gentleman is making a very learned and interesting speech, but I find difficult to see how it relates to the motion on the Order Paper.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

The motion and amendment on the Order Paper cover fairly wide ground and I have not so far heard anything that is out of order. I appeal to the hon. Gentleman to remember that time is short enough without points of order of that nature being raised.

Photo of Nick Gibb Nick Gibb Conservative, Bognor Regis and Littlehampton

The choice is between the social egalitarianism of mixed-ability classes or the genuine social equality that is a consequence of the high educational standards in state education that result from splitting up children into classes according to their ability in each subject. Education is one of the key Government targets—this may assuage the criticism of David Taylor—and the key to social mobility and opportunity, and it is paramount in eradicating poverty.

If Labour Members are serious about equality, they will join me in urging the Secretary of State to do more to insist on the synthetic phonics method of teaching children to read in primary schools and on eradicating mixed-ability classes in our comprehensive schools.

Photo of George Mudie George Mudie Labour, Leeds East 6:13 pm, 7th July 2003

I am sorry that the previous speech was interrupted by a point of order, as I thought that it was a very good and interesting speech, although I also thought that it demonstrated why there is an argument for targets.

Targets can go wrong and they are a new thing that may need refinement, finessing and so on, but I speak as someone who served in a local authority for a number of years and each year handed a budget to education, which was the biggest spender locally. The education authority took the money and that was the last time that it discussed its budget with us. The comments of Mr. Gibb highlighted one of the reasons why I think that my right hon. Friend the Chancellor of the Exchequer is right not to hand over money to spending Departments and then retreat from the field. He is right to stand in the field and say, "This is taxpayers' money, it has been raised for a purpose and we are going to agree between us what you will spend it on and try to ensure that you spend it efficiently, effectively and in the areas that we as a Government and House of Commons agree to be important."

Photo of John Horam John Horam Conservative, Orpington

Does the hon. Gentleman recognise that there is a difference between proper accountability for taxpayers' money and good management? It is the second point that we are concerned about.

Photo of George Mudie George Mudie Labour, Leeds East

I am not sure whether the Opposition favour that argument. When one looks at their alternative to targets, one sees that it is not to have no targets or to finesse the existing ones. In the light of the first part of the motion, which speaks of doing away with targets and, instead, having professional autonomy, does the hon. Gentleman genuinely feel that it is right to hand over large amounts of public money?

I return to my point about the speech of the hon. Member for Bognor Regis and Littlehampton. As laymen, we work for money and hand it over to the Government. Clearly, he agrees that we hand it over to, professionals who take no notice of us or of what we would like to achieve and spend it in a way that they feel professionally, brooks no interference. It is welcome that we have a Chancellor and a Government who tell what the hon. Gentleman described as the three failing services—health, police and education—that they must achieve certain things.

Of course, there may be difficulties. I confess that, as Mr. Laws will know, I was the culprit in the Select Committee on the Treasury who ambushed the Chancellor with targets when he appeared before us in relation to the spending review. The most memorable target was that of the Foreign Office to maintain world peace, although it contains some of the difficulties that arise without targets. It is very sensible for the Treasury to reach agreements with spending Departments on what we as a Parliament and a Government expect Departments to get out of the vast sums that they are given.

Photo of David Laws David Laws Shadow Chief Secretary to the Treasury

The hon. Gentleman is developing an interesting speech. He is right to say that I noticed his ambush of the Chancellor last year in respect of the spending review. In that exchange with the Chancellor, he mentioned that there were a number of flaws in the existing public service agreement regime. Will he explore some of those flaws and how they might be tackled?

Photo of George Mudie George Mudie Labour, Leeds East

I do not have much time and I am not sure where this speech is going. I might take that route, but other hon. Members wish to speak and we have little time.

I was speaking about the Treasury Committee and foreign affairs, but the hon. Gentleman has taken me entirely away from my argument. In terms of targets, I think that I heard my hon. Friend Mr. Hall, who is sitting in front of me, mutter a word that puts the matter into some context—"ambition". As a taxpayer and citizen, I want a Government to have ambitions. I cannot fault them if they fall short of those ambitions, as long as they have tried and done everything to achieve them. The hon. Member for Yeovil was not in the House when the Conservative party was in government. When we attacked that Government and asked what they were going to do, their answer to every problem in the three failing areas that have been mentioned—the greatest problem was unemployment—was to shrug their shoulders and give the stock reply: "We'll still get elected in five years' time."

They occupied these Benches for the status, the red boxes and the fame; with a few exceptions, they had no ambition for the ordinary people of this country. That was the most unacceptable aspect of their term in office.

Much as targets are open to criticism—I would say the same about reform—they represent ambition. At least this Government have an ambition. If that is translated into targets that we sometimes do not reach, I can live with that. For example, when did a Conservative Chancellor of the Exchequer ever set a target for the abolition of child poverty? I cannot remember any of them ever mentioning it. They never had such a target or ambition. Poverty was about my class: they were a different class. We, by contrast, have a target. When the hon. Member for Yeovil heard me chase up the Chancellor about the subject, it was the target that enabled me to do it, because he had put his ambition on the table and said, "I will tell you the year when I expect child poverty to disappear from this country; and I will tell you, in stages, the point that I have reached." The hon. Member for Yeovil and my hon. Friend Mr. Beard were able to push the Chancellor and to make sure that he understood how important it was that he should meet his ambition to abolish child poverty. Then, as he moved on from the first milestone, we were able to say to him, "You should do this, this and this." If we did not have a target, an ambition and a statement, where would we be?

Photo of George Mudie George Mudie Labour, Leeds East

No, because someone even greater than the hon. Gentleman wishes to speak: Dr. Fox.

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

Does the hon. Gentleman accept that there is a world of difference between aspiration—which he rightly mentions, and which all Governments need to have—and the process by which front-line services are micro-managed from Whitehall through the use of targets?

Photo of George Mudie George Mudie Labour, Leeds East

I accept that it is a learning process. Sometimes, the fault lies partly with spending Departments, which reach public service agreements with the Treasury. I am sure that if the hon. Member for Woodspring sat on the Government Front Bench, he would say, having agreed with the Chancellor that the targets were fine, "I would like to be left alone to put them into operation and, as Secretary of State, to have the opportunity to make the changes that I want." I see nothing wrong with that. Although targets are a good development—

Photo of George Mudie George Mudie Labour, Leeds East

When I have finished my sentence, I will sit down. The targets need to be finessed and changed as we jointly gain more experience.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

I call Mr. Richard Bacon. [Interruption.] Order. I may have misunderstood Mr. Mudie. He said that he was going to sit down, not that he was going to give way.

Photo of George Mudie George Mudie Labour, Leeds East

I am sorry, Mr. Deputy Speaker. I meant that I was going to sit down to allow that very important Member, Mr. Bercow, to intervene, but I fear that he may have tricked me, and I am sure that you would not want to be party to that.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

In future, less ambiguous language would be helpful.

Photo of John Bercow John Bercow Conservative, Buckingham

I am extraordinarily grateful to the hon. Gentleman, who, in his typically understated and kindly way, wishes the Labour Government to transmute contracts to promises and targets to ambitions. Why have the Government's targets on slashing the number of deaths from strokes and on reducing by half the incidence of prescription charge evasion—perfectly laudable targets—simply been dropped?

Photo of George Mudie George Mudie Labour, Leeds East

I am sure that the Secretary of State will be able to deal with that more easily than a layman who has little experience in such finer points of the health service.

Thank you, Mr. Deputy Speaker, for pulling me up on my ambiguous language. It is the first time in my life that I have been accused of ambiguity.

The Government, by setting targets and saying, "We are going to go through this painful business of reform", are making a rod for their own back. However much we muck about here debating the finer points of the meaning of the word "targets", the British people are interested in the ambitions and delivery of a Government who came in promising to make things better: that is what people want to see. If the Opposition's judgment is that the Government have not achieved all their ambitions, I should like—but will not, in deference to other speakers—to go through in detail each of the three areas that the hon. Member for Bognor Regis and Littlehampton mentioned. I should like to speak about the 50,000 additional nurses. If someone asks, "What's the difference between the two parties?", 50,000 trained nurses will say, "The Labour Government gave me a job." There are 10,000 additional doctors and 1,500 additional GPs. I think that that is right. I am trying to read my own writing and having some difficulty; I should have been a doctor. There are 300,000 more operations each year. Waiting lists are below 1 million for the first time in decades. Mrs. Browning, who intervened on the Chancellor to ask about cancer, is not here. I wonder how she could look at herself in the mirror and defend that intervention, given these figures: under the last Government, 63 per cent. of cancer patients saw a consultant within two weeks; now, 98 per cent. do so. The Chancellor was told, "That is only a figure; there is nothing really happening out there." People should come to my city of Leeds, where in the next few months a £400 million cancer block will be under way at St. James's university hospital. One can see the reality of ambition and targets delivering, as opposed to the Opposition's lack of ambition and targets.

I turn to education. There are 25,000 more teachers. I attended a meeting in Leeds where the chief executive of Education Leeds, which is not a body that I support or wanted in my city, spoke to parents and pointed out that capital expenditure in Leeds has gone up by 10 times since the time of the previous Government. That is an amazing figure, and it was given not by a politician, but by a chief executive. That shows the advantages of ambition. As well as 25,000 more teachers, there are 122,000 teaching assistants.

I conclude with reference to the Government's ambition on unemployment. I have one of the poorer constituencies. When we came in, we raised money, against the wishes of the Opposition, from the windfall tax on the privatised public utilities. We spent it on reaching parts of Britain, such as my constituency, that had been ignored for 18 years. The unemployment rate in my constituency went down by 50 per cent. in four years. We halved unemployment in east Leeds, and we have continued to work away at it as the years have passed. For targets, read ambition. I am very grateful to the Chancellor, who is interested not only in money, but in social policy and in converting valuable taxpayers' money into helping ordinary people to raise their families with a decent standard of living.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk 6:29 pm, 7th July 2003

I, too, am interested in money. The Chancellor spent most of his speech boasting about it, as did Mr. Mudie. In the health service, much money is wasted: approximately £1 billion to £3 billion on fraud and theft; approximately £2 billion through bed blocking and late cancelled operations; approximately £2 billion through staff sicknesses and absences; approximately £1 billion through infections that are caught while in hospital; between £300 million and £600 million on over-prescribing drugs; approximately £400 million through clinical negligence, and approximately £230 million on treating patients who become malnourished while they are in hospital. That is a total of some £9 billion, which means that between 16 per cent. and 20 per cent. of the NHS budget is wasted. Those are Department of Health figures.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

Will the hon. Gentleman give way?

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk

No, I do not have time. Before examining and boasting about extra expenditure, we should discuss serious, proper financial management of it. The Government are good at playing fast and loose with taxpayers' money. I recently came across an example of a farmer who succeeded in claiming two different subsidies under the arable area payments scheme and the fibre flax scheme for the same piece of land. He also claimed for territories which, on closer inspection, when people could be bothered to examine the grid references that he had supplied, turned out to be in the North sea between Scotland and Denmark and on the mainland of Greenland and Iceland. Basic management, not targets, is what is needed to deal with that.The reason why £4 billion-worth of Apache helicopters are sitting in a shed on Salisbury plain is not targets but sheer mismanagement and forgetting to train the pilots in time.

We have a chief executive in the health service who was sacked and paid £149,000 in compensation. Most of the payment was found to be ultra vires and it should have been possible to reclaim it, but the six-year time limit had elapsed and it could not be claimed back. The individual was subsequently hired elsewhere in the NHS and later summoned to an industrial tribunal to answer allegations of sexual harassment. He did not turn up and was therefore sacked. However, as any lawyer would tell us, it is unlawful to sack someone for not turning up to an industrial tribunal, so the individual received a further £195,000 in compensation. We do not need targets, but basic management.

A classic example of poor application of targets and its consequences is education. Let us consider the halcyon days of 2001–02, when the Department for Education and Skills underspent its budget by £1.7 billion and £6 billion was underspent throughout the public sector. It is a shame that the Economic Secretary is not present because he was the Minister with responsibility for adult skills at the time of individual learning accounts, which were a model of how not to do something and showed why targets by themselves do not work. The cost was £300 million. Much, possibly even most—the Department cannot say—was wasted. Seventy civil servants are spending two years trying to sort out the mess, which was caused by targets.

In a unanimous report, the Select Committee on Education and Skills stated:

"It should have been possible to design a scheme to encourage new providers that was not wide open to abuse by unscrupulous people posing as learning providers, but the lack of quality assurance made it almost inevitable that it would be abused."

Subsequently, the Public Accounts Committee examined the individual learning accounts scheme. Its report stated:

"In the absence of quality assurance, the decision to give a positive incentive to providers to recruit learners was fundamentally flawed."

In other words, the fraudsters envisaged easy pickings and came steaming in. The PAC report continued:

"Because of ineffective monitoring, the Department was not aware of unusual patterns of activity, including very large payments to individual providers".

The permanent secretary to the Department, Mr. David Normington, said that the large amount of activity on the individual learning accounts scheme was taken as a sign of success. The Department budgeted £199 million for two years, but it was spending three times that rate: £25 million a month, which is a total of £600 million over two years. It did not realise that it in spending that money it was being diddled and defrauded. It believed that it was a sign of success. There was no control of cash. In evidence to the Education and Skills Committee, the Economic Secretary, who was formerly responsible for adult skills, said:

"At the moment because of the uncertain number of individual learning account discount payments we are going to have to pay we simply cannot give you a sense, even a ballpark I regret to say, of what the possible overspends are going to be."

There was a complete lack of financial control, yet the Chancellor had the gall to boast about spending extra money.

How did the Government get into such a mess? They were genuinely interested not in quality but in quantity—never mind the quality, feel the width. The Government had a manifesto target to include 1 million people in their programme. As the Education and Skills Committee said of the individual learning accounts scheme:

"Presented with a manifesto commitment, and a single target of one million users, insufficient attention was given both to the reasons for the previous rejection of an ILA scheme and to ensuring that quantity was balanced by quality."

That is a perfect example of too much emphasis on targets and not enough on information for users of public services.

In the health service, we need to enable people to understand what goes on in hospitals and what happens to waiting lists and mortality rates, and let them make the decisions. In schools, we need to enable people to understand what is happening with class sizes, exam results and university entrance performance and let them choose. Dare I say it, parents should be given the money to enable them to make the decisions. What we need to do is to diminish the emphasis on targets and increase the emphasis on choice.

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health 6:36 pm, 7th July 2003

This has been a short but informative debate. The contributions of my hon. Friends the Members for Bognor Regis and Littlehampton (Mr. Gibb) and for South Norfolk (Mr. Bacon) were especially informative. My hon. Friend the Member for Bognor Regis and Littlehampton made an interesting, thoughtful and informed speech. Perhaps it was the most thoughtful speech of the day; it gave hon. Members much to ponder. My hon. Friend the Member for South Norfolk had a productive seven minutes. He managed to make many points about the way in which money without new reform is wasted and the need for sound financial discipline and good management in public services and taxpayer-financed programmes. He also emphasised the need to give professionals far more autonomy in making decisions about the day-to-day running of the services in which they find themselves.

Much of the debate has focused on targets in the health service. The Government face charges that the targets distort clinical priorities put political interests before those of the patients, and are contradictory and often produce conflicting results. They face charges that they often fulfil the targets by changing them en route or fiddling the figures, and that the targets create a culture that is deeply corrosive to professional people.

There is no better example than that detailed in an article in The Sunday Times yesterday, which stated:

"In one case earlier this year, a team of four surgeons was prevented from operating for five hours while it argued with a performance manager about a patient who was about to breach the 15-month waiting time.

Paul Thorpe, chairman of the British Medical Association's junior doctors' committee and one of the surgeons involved in the argument, said: 'It was decided by the surgeons that the operation should be cancelled because there would not be an intensive care bed available after the operation.

The performance manager came down to the theatre and said, "Don't do anything else; you must do this lady. I could lose my job over this." We spent from 9am to 2pm arguing about this one case because it involved a government target.'"

That happens in the health service throughout the country. It is not the rare event to which the Secretary of State for Health referred; it happens increasingly frequently.

Who should make decisions for an individual patient? Who would be best placed to make them? The best decisions would be made on the basis of sensitive and specific information. However, targets such as the maximum waiting time mean that the decision is taken as far away from the patient as possible. For example, a patient with severe arthritis of the hip can be pushed down the waiting list because someone with an ingrowing toenail has reached the maximum wait. That is illogical.

Even if one agreed with the Government that targets were necessary, these particular targets are wrong. The most logical place for a target is not the time between presentation and diagnosis, which is when doctors have no idea of the clinical urgency needed. Doctors could give a clear waiting time, dependent on diagnosis, from the time of diagnosis to the time of treatment. The Government's targets are upside down.

All this results from a single pledge given by Labour back in 1997 on elective surgery targets. Now all the activity in the NHS is distorted by that one target, which has become the centrepiece. Many of our primary care trusts are having money sucked up from them because the acute trusts have to make their waiting time targets.

Let me give the House an example of how contradictory targets can be. The Government have a target for ambulance response times and a target to reduce accidents. The way to improve ambulance response times is to achieve a better speed between the location of the patient and the acute hospital, yet the Government have been so obsessed with their accident reductions that they have stuck speed limits all over London. Every one-minute delay in getting a patient with a myocardial infarction to hospital results in a 10 per cent. increase in mortality.

The Government have so many targets, which are often completely contradictory, that they are undoing many of the things that they set out to do in the first instance. The first way that the Government meet their targets is to abandon them along the way. In November 1996, the Prime Minister, then Leader of the Opposition, said when referring to mixed-sex wards:

"Is it beyond the . . . wit of the Government and the health administrators to deal with that problem?"—[Hansard, 19 November 1996; Vol. 285, c. 832.]

In January 2000, Lord Hunt of Kings Heath, then a Health Minister, said that mixed wards are

"wholly unacceptable. We are committed to ensuring that those wards . . . disappear by 2002".—[Hansard, House of Lords, 19 January 2000; Vol. 608, c. 1118.]

However, in July 2002, the target was moved from eradicating mixed-sex wards to introducing more single-sex accommodation. That is an entirely different concept—in other words, "If you can't make the target, change the target."

The second way that the Government meet their targets is to force the staff to fiddle the figures. Ian Perkin, former finance director of St. George's hospital, Tooting, said:

"There's a culture that's grown up where the emphasis of management within the NHS has been about achieving targets, you know . . . come hell or high water. It doesn't matter whether achieved legitimately, you just have to achieve them"

That is a terrible thing for a professional person to say.

A former chief executive, who did not want to be named, for understandable reasons, said:

"It was always my understanding, and that of my colleagues, that certain of the targets were what are euphemistically described as P45 targets. What I mean by that is if a particular target wasn't delivered, it was absolutely a sackable offence."

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

Does the hon. Gentleman agree that it is a damning indictment of the culture of fear in the health service over targets that so many managers with real concerns were too scared to have their faces shown on "Panorama" for fear of the repercussions from their political masters?

Photo of Liam Fox Liam Fox Shadow Secretary of State for Health

I will come to that point in a moment, but it is entirely right that there is a culture of fear and intimidation throughout the NHS. Those who might be willing to speak out about what they perceive to be failings in the system are afraid to do that. Indeed, the Government are intent on introducing a gagging clause for consultants in the negotiations on the consultants' contract.

Perhaps the most obvious example of the Government attempting to fiddle the figures occurred in the recent exercise on the four-hour accident and emergency waiting time. The British Medical Association survey, which was mirrored by the "Panorama" survey, said that two thirds of A and E departments in England put special arrangements in place during the monitoring week.

Preliminary results from a questionnaire sent to 500 A and E consultants found that the temporary use of medical and nursing staff was the most common tactic, at 56 per cent., followed by staff working double or extended shifts, at 25 per cent. Indeed, 14 per cent. of respondents were aware of routine surgery being cancelled so that extra beds would be available to admit patients through A and E. The majority of respondents believed that efforts to meet Government targets distorted clinical priorities. That involves not isolated cases, as the Secretary of State would have us believe, but 60 per cent. of A and E consultants.

Don Mackechnie, an A and E consultant and chairman of the BMA's A and E committee, said:

"I am appalled to see how A&E departments have been forced into taking extraordinary measures for a week-long period just to meet political targets. It is completely immoral of the Government to claim that it is raising the standard of performance in the NHS when this is how they measure it. It is quite wrong for patients expectations to be raised in this way . . . the Government's obsession with waiting times is nothing more than bean-counting. Patients deserve better than being treated simply as goods on a production line."

That is what medicine is being reduced to.

It is not only medical staff who are involved. Brian Dolan is an emergency nurse consultant—one of the grades that the Government have been proud to introduce. He confirms the suggestion of further manipulation:

"There's an awful lot of scams and an awful lot of juggling of the targets. For example, 5 cubicles and you count only 3 of them when you're counting the trolley waits. You put a patient on a bed and they say you stop counting the hours they're there because . . . they're . . . effectively admitted . . . Putting a door up and saying, Well that's an observation unit, its no longer a cubicle, so . . . we won't count those trolleys. Putting a bit of a wall up and putting five or six patients in there and saying . . . that's the observation area, so we won't count those ones either. Sending them up to CT scan and stopping the clock. If they're being discharged and they're . . . simply waiting for transport, discharging them off the computer so it doesn't look like they've been there for quite as long."

That is the ethical destruction of what we have, confirmed by the chairman of the Audit Commission, James Strachan:

"The system is being distorted to meet those targets in the sense that money was intended for longer term purposes, like buying medical equipment, buying computers, simply maintaining the buildings, that's being diverted in order to be able to meet waiting time targets."

In other words, what was intended as long-term reform is being sabotaged by the targets that the Government have put in place not to improve the short-term running of the health service but to achieve the headlines that Ministers so like, and also to ensure that their spin gets the right results.

Today's debate began a great new double act—the Chancellor and the new Health Secretary. Interestingly, between them they apparently did not know the difference between heart disease and a stroke. That was either poor evasion by the Chancellor or a deeply worrying indication of the state of medical knowledge in the Government. However, we will give the Chancellor the benefit of the doubt—he was simply being evasive, as usual.

We saw the amazing sight of the Chancellor—swivel-eyed and charging at imaginary demons during his 30 or 40 minutes at the Dispatch Box—abandoning any pretence of defending his record on targets in government. Instead, he ranted about Conservative proposals to liberate patients and to liberate British taxpayers. We saw the man once regarded as the intellectual bedrock of new Labour, if that is not an oxymoron, reduced to the propaganda equivalent of Comical Ali.

Then we saw the even more sinister spectacle of the Health Secretary accusing, first, Mr. Laws and then the Conservatives of trying to run down NHS staff. I remind the Secretary of State that some of us on the Conservative Benches have been NHS staff. We were questioning the integrity not of NHS staff, who are as much victims of the Government's programme as the patients are, but of Ministers, who force NHS staff to act in a way that they find deeply unprofessional. Again, I quote the outgoing BMA chairman:

"You would think wouldn't you that the government would be distancing itself from these corrupt and immoral practices. Instead, it has turned a blind eye, been triumphalist about its 'achievements' and colluded in the deception and doublespeak."

That is the reality of where we find ourselves.

The tactic of claiming that any criticism of Ministers' running of the NHS is an attack on NHS staff is deplorable and disgusting. Using NHS staff as a political human shield shows the deep moral corruption that is new Labour. NHS staff will rightly be appalled that they are being used in that way.

We have had tax, spend and fail. There has been no real reform, just more spin. No wonder no one believes a word the Government say any more. New Labour is as corrupting as it is corrupt. The quicker the Government go, the better.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health 6:48 pm, 7th July 2003

Is it not significant that Dr. Fox—in the very last minute of his speech and the very last minute of 45 minutes of speeches from the Conservative Front Bench—finally had a good word to say about national health service staff? Let me start by paying a tribute from the Labour Benches to every one of the 1.3 million people who work in the NHS. We founded the NHS, we have defended it, we will modernise it and we will stand by it against every attack from the Conservative party.

The truth of the matter is that tonight's debate is not about targets. It is about something much deeper: the great debate that is opening up as a result of the breakdown of the post-war consensus on health in this country. It is about a clear choice for the people of this country: between those of us on the Government Benches, who believe that health care should be free at the point of need to everyone in this country, irrespective of their background; and those on the Conservative Benches, who want to push people out of the national health service with 20 per cent. cuts, and to pull them into the private sector through partial subsidies—a point to which I shall return.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

Sit down—you have had 45 minutes to say your piece.

We make no apologies for targets. Targets identify priorities, and I say that not just because priorities are, as Nye Bevan said, the "language of socialism", but because they are also the language of good business. We should compare the Conservative Front Benchers' observation that targets are not used by business with that of Lord Browne, chief executive of BP-Amoco, who has run slightly bigger businesses than most of the Conservatives. He said:

"Targets are two things really. They set standards for compliance but they do much more important things as well . . . they motivate people to . . . do better."

They identify priorities and they offer delivery, because they drive effort and focus ingenuity towards achievable ends. In the national health service they also represent accountability, because they are a public benchmark of where and how we are delivering improvements.

Incidentally, the Opposition Front Benchers did believe in targets. They told us before the last election that we should have a target not of waiting lists, but of waiting times. That is the policy on which they fought the last election. Of course, they have now changed. The hon. Member for Woodspring tells us that they do not believe in targets any more—they believe instead in setting measurements for quality in the system. The truth is that anyone with objectives that are to be pursued, focused and prioritised would find it reasonable to set targets.

Of course, sometimes we do not meet the targets.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I am sorry, but I must finish as I have only eight minutes. By this year, we wanted nine out of 10 of those who wished to see a GP to have an appointment within two days, on the way to achieving a 100 per cent. figure next year. It is a matter of regret that we failed: we achieved a figure of only 88 per cent., but that is 35 per cent. more was than was ever achieved under the Conservatives.

The hon. Member for Woodspring—who will admit, given that he is the Conservative spokesman on these matters, that he is slightly biased—asked us to consult, so let me tell the House about the comments of Professor Sir George Alberti, who, like the hon. Gentleman, has considerable experience in the health service. He said:

"The target is a bloody good thing because it has finally brought the spotlight onto a piece of the system that was unacceptable."

He is talking about accident and emergency. He continued:

"The A and E community is happier partly because they see the resources coming and partly because of the focus on them."

Despite such effort and achievement this year in making sure that 100,000 fewer people spend four hours in an A and E department, all that the Opposition do is to run down the staff for fiddling the figures. They tell us—it is a disgrace that the Liberal Democrat spokesman did the same—that, somehow, the target was only achieved in a single week, through the giving of certain examples and a fiddling of the figures.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

Let me put it on the record that there was an improvement in A and E figures not over one week or one month; in fact, the figures improved over five consecutive months. That is testimony to the professionalism and conduct of the people who work in the NHS.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

If I misunderstood what Mr. Laws said, I withdraw my remark, but it certainly applies to the Conservative Front Benchers.

Let us ask the question—[Interruption.] They can shout but they cannot run.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

Ever since the Conservatives voted against a Second Reading of the legislation that established the national health service 60 years ago, we have wondered when they would revert—[Interruption.]

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I am sorry to interrupt the right hon. Gentleman, but a difficult situation arises when there is too much sedentary noise from Opposition Front Benchers and he addresses his remarks to a different part of the House. The combination is such that I cannot hear what is being said.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I was trying to be emollient, Mr. Deputy Speaker. If you think that I should eyeball the Opposition, I am more than happy to do so.

Why are the Conservatives so upset when we make advances towards our targets? Are they really upset because we have 50,000 more nurses? [Interruption.] No, they are happy—look at their smiles. Are they upset or disappointed that we have 10,000 more doctors? Do they seriously think it a cause for regret that last year, 450,000 more operations were carried out, or is it a cause for rejoicing? Suddenly, they have gone quiet. Are they really so upset that administration and management in the national health service account for 3 per cent. of staff, compared with the private health system in the United States, in which such people account for 24 per cent. of staff? Do they rejoice in that, or do they find it a cause for concern?

Do they not understand that a reduction in the number of people waiting for an operation for more than a year in discomfort or pain from 22,000—the figure under the Conservatives—to the current figure of 159 is not just a statistic on an accountant's wall, or an entry in a Government ledger? Some 20,000 human beings have been removed from pain, distress and discomfort, at no cost to themselves. We on the Labour Benches rejoice when that happens.

Photo of John Reid John Reid Secretary of State, Department of Health, Chair, Modernisation of the House of Commons Committee, The Secretary of State for Health

I can explain—[Hon. Members: "Give way!"] If anyone wonders why the Conservatives are disappointed when we achieve those targets, through the efforts of those who work in the health service, I can explain by recalling the comments of the hon. Member for Woodspring. He said that the Conservatives' first task is to persuade the public that the NHS is not working, that the second phase is to convince them that it will not work and that it cannot work, and that the third phase is to introduce into the debate themes on how to fund reform. If he did not say those things, let him deny them. [Interruption.] He did say them and he is proud of the fact. If anybody ever wanted to know the true intention that lies behind the synthetic tears of the Conservatives—the intention that lies behind their disappointment at our reaching the targets—they need look nowhere other than to the words of the hon. Gentleman.

If anyone in this country wishes to know the intention behind today's debate, they should do what we do in a whodunnit—follow the money. [Interruption.] The Conservatives have made two pledges: the first is to take 20 per cent. away from the national health service, and the second is—[Interruption.]

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I am sorry to interrupt the right hon. Gentleman again, but I do not want to hear accusations of lying directed at any Member of this House. May I suggest to the House that this debate be concluded in an orderly manner?

Photo of David Maclean David Maclean Shadow Chief Whip (Commons), Opposition Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

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

The House proceeded to a Division.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 178, Noes 336.

Division number 275

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), and agreed to.

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

Resolved,

That this House welcomes the Government's record extra investment in health, education and Britain's other vital public services; supports the Government's agenda of linking this investment to public service reform through Public Service Agreements to build high quality public services for all; welcomes the attainment of economic stability, with low inflation, low interest rates, and low unemployment; believes that the achievement of this platform of stability has made record extra investment in public services possible; supports the Government's determination to do nothing to put this stability at risk; believes that after years of neglect between 1979 and 1997 it is even more important to invest in our public services and that to fail to invest in health, education, and other vital public services would be deeply damaging; and supports this Government's resistance to any attempt at this time of global economic uncertainty to cut public spending.