My Lords, I applaud the noble Lord, Lord Patel, and his committee for this excellent report. It is a huge wake-up call to all concerned about the state of the NHS and social care, which has been given added weight by this morning’s call by the noble Lords, Lord Darzi and Lord Prior, for substantial and long-term increases in funding.
The drivers of change—from demographic factors and changing disease patterns, to technological and medical advances and increasing healthcare costs—are intensifying at a relentless pace. The system, which was originally designed to treat short-term episodes of ill health, is now caring for a patient population with more long-term conditions, more co-morbidities and increasingly complex needs. With the share of the population aged 85 years and above set to increase from 2.4% now to 7.1% in 2066, this represents a formidable challenge for the NHS and social care. That is what makes funding so critical.
On average, spend on the NHS has risen by 3.7% in real terms since 1949-50. Yet at a time when pressures have never been so great, the Government and their coalition predecessor chose to cut adult social care and their spending on the NHS down to a miserable 0.2% per year average in real terms for the whole of the current decade. No wonder the NHS is reeling: targets have been abandoned; waiting times are growing; crude rationing is on the increase; doctors, nurses and other staff are demoralised; and there is huge unmet need in social care.
The Government’s response, to which the noble Lord, Lord Patel, referred, has been what I shall describe as underwhelming. What is remarkable is how many months it took the department to come up with its response. However, it has emerged that the Secretary of State is canvassing support for a long-term funding settlement, potentially embracing a ring-fenced hypothecated tax. This is something the Select Committee gave attention to. I particularly look forward to the comments from the noble Lord, Lord Layard, on this because he has done a lot of work in this area. I can see the attraction. It would enable the public to see a direct link between taxes paid and benefits received in the shape of the NHS.
National insurance is often favoured as the most straightforward way of doing that. English health expenditure in 2015-16, at £119 billion, is remarkably close to NI contributions for the same year, at £114 billion. However, to get to a baseline health and social care figure for England you would have to add another £15 billion for social care. You would then need to add in more to get the kind of settlement that the noble Lords, Lord Patel and Lord Prior, are arguing for, and that would cover only England because the devolved nations, in one way or another, would also have to be factored in. A rise of 1% in national insurance would raise about £5 billion, so to get a reasonable baseline figure national insurance would have to rise considerably. It would also be a huge figure for any Chancellor to effectively lose control of in all the schemes that are being proposed. I am not an expert on national insurance—