My Lords, it was my pleasure too to sit on the Select Committee under the extremely wise chairmanship of the noble Lord, Lord Patel, and I congratulate him on introducing the debate today so well. Perhaps I may say how pleased I am to follow the noble Lord, Lord Prior. What he said very much resonated with me, as did what was said by the right reverend Prelate the Bishop of Carlisle.
Having heard from a huge number of witnesses, the committee came up with a very sensible and practical set of recommendations for the long term, but it was less than encouraging to have, after an extremely long gestation, the Government’s rather anodyne response. Therefore, it was somewhat surprising to hear the Secretary of State on Robert Peston’s programme a few Sundays ago saying some of the things that we had advocated. He spoke of the need for a 10-year plan and a ring fenced funding system—a hypothecated tax, in other words—for health. I just hope that he was not so far off-piste that he will be given the boot. He had already persuaded the Prime Minister that he should be responsible for community services as well as health, if not for the funding of it. I never thought I would ever say this, but I just hope that he keeps his job.
I want to focus on just two aspects: integrated care and a hypothecated tax system. It seems trite now to say that any long-term solution to the problems of the NHS has to include care in the community. Draconian cuts have meant that social services are no longer coping with the increasing load of the elderly and infirm—everyone says that. The whole system is clogged up and we have been talking for ever, it seems, about integrating health and social care in a seamless system.
It is not as though we do not have models of how that can be achieved. The one that I know best and the one that seems to be working most successfully is that run by Sir David Dalton in Salford. I take some pride in that because I spent most of my clinical working life at Salford Royal Hospital, although I am well aware that it has taken considerable advantage of my having left and has done great things. As well as running the hospital extremely efficiently with a very enthusiastic team of doctors and nurses—which is somewhat rare in the health service at the moment—David Dalton has now been given the local authority’s total budget for social services and community care. He employs the social workers, community nurses and two salaried general practices, and has now taken over mental health services too. He works very closely with the single CCG for Salford, as well as with the local authority, and he is now able to see the remarkable fruits of a completely seamless service for the 250,000 population of Salford. Dalton was asked to take over three local NHS trusts that were in financial trouble, and he is now busily turning them round very successfully. That shows what can be done if you have the right leadership, and if we can keep such leaders in their posts for the 17 years that it has taken Dalton to get to this point.
Those factors—excellent leadership that is not distracted by constant efforts to reach savings targets and not moving on every couple of years in some reorganisation or another—are both difficult to achieve. A change in culture requires sustained and persistent effort over a long period of time and is never a short-term possibility. Will the Minister consider ways in which the Government can provide the best conditions to allow this to happen, invest in long-term, high-quality leadership and give them the right incentives, and not get involved in any more reorganisations of the NHS? That does not mean that Salford and others do not need more money; they clearly do. We know that all NHS and social services have been starved of funds for so many years, despite the increasing demand. The question is how more money can be found.
I was one of those members of our committee who strongly favoured a hypothecated tax specifically ring-fenced for health and social care. I was bolstered in that belief by two distinguished economists: my noble friend Lord Layard, who will speak later in the debate, and the noble Lord, Lord Macpherson, neither of whom can be considered amateurs. It is noteworthy that the noble Lord, Lord Macpherson, was the Permanent Secretary in the Treasury, where you might expect some resistance to any form of hypothecation. Of course, there are all sorts of objections to hypothecation: it limits the flexibility of the Treasury to respond to the ups and downs of the economy, and, if it is based on national insurance payments, we know that the current sources of NI would not be sufficient by themselves to meet the costs of health and social care. Let me try to deal with each of those objections in turn.
First, national insurance is currently paid only by those below retirement age, who, by and large, use the NHS much less than those over that age and who themselves do not pay. But why not? They pay tax on earned and other income, so why not national insurance? It may not go down terribly well in your Lordships’ House, but national insurance paid by those over retirement age would go some way to evening out the intergenerational tax burden. Incidentally, polls show that it is true that the public at large would be willing to pay more tax, if it was earmarked for healthcare. We have a listening public prepared for hypothecation and—who knows?—perhaps the Treasury too could be persuaded if it recognised that it would not be under political pressure and bothered every year with bids for yet more resources for the NHS.
Secondly, how can we smooth out the impact of fluctuations in the economy and income? My noble friend Lord Layard—who will no doubt tell me if I have got this wrong—suggests that this could be achieved by a five-year agreed figure plus a 10-year estimated figure accepted by the Treasury, which would be able to take in the excess in good years and dole it out in the bad. I was delighted when, in his recent interview, Jeremy Hunt did not rule this out. I hope the Minister will follow this and be just as brave. Can he tell us anything about the Treasury’s reaction to the Secretary of State’s admission? Listening to the Chancellor recently does not give me much encouragement and so I will not be holding my breath, but at least the idea is out in the open. I await the Minister’s response with interest.