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Burglar Alarms (Control)
3.33 pm
Mr. Hugo Summerson (Walthamstow) : I beg to move,
That leave be given to bring in a Bill to regulate the manufacture of burglar alarms to ensure that they do not ring for more than thirty minutes after being set off.
Burglaries, assaults and break-ins are far too common. Many citizens today take steps to protect their security, and they take them in many different ways. They may acquire a large dog ; they may even acquire the amplified voice of a large dog, which I gather is rather cheaper. They may join the local neighbourhood watch scheme. They may also obtain a burglar alarm.
When you come to think of it, Mr. Speaker, the burglar alarm is a rather selfish way of protecting one's property. By definition, when people decide to defend their property they are frequently away. They do not think it wise to leave their property unprotected ; accordingly, they set the alarm and off they go. They may go to the Pas de Calais or to the Bois de Boulogne ; they may go further still, to the uttermost ends of the world. They may go down to Antarctica. In any event, if someone breaks into their property and the burglar alarm rings, they will not be there to hear it.
All the local people, however, will be there to hear it. I am talking about entire neighbourhoods. I encountered two instances in my constituency the other day. One was in the Higham Hill area, where a factory owner set his burglar alarm and went away for the weekend. Off went the alarm on Friday night, and it rang for the whole weekend, disturbing--by my calculation--at least 1,000 people.
It can be even worse than that. Relatives up from the country may be staying, and they will not be used to such sounds. Their repose may be disturbed for the entire weekend. Again, there may be a sick infant in the house, or an elderly friend or grandparent. Perhaps they will be light sleepers ; certainly they will not be used to the sound of alarm bells ringing throughout the weekend.
It does not stop there, however. I am talking not only about immobile property, but about mobile property. Just the other day I walked past a car and the alarm went off. I give the House my word that I had neither touched nor even looked at it : it was a particularly nasty modern Japanese model, and nothing would have induced me to go anywhere near it. Perhaps it took grave exception to me. Anyway, the alarm went off.
I went and had a good dinner. When I came back, three hours later, the alarm was still ringing. What is more, I noticed that several more windows were alight in the neighbouring block of flats than when I had walked past earlier. All those people had been roused and disturbed.
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I am sure that we have all heard of people being driven mad by such alarms and taking the law into their own hands. I have heard of someone taking a 12-bore shotgun and shooting the alarm off the wall--although that is not to be recommended, being rather a dangerous practice. Others have been forced to acquire expertise in dealing with the alarms. They have mounted stepladders armed with spades or shovels--I gather that the old-fashioned coke shovel is best--to scoop the alarms off the walls. That is what people have had to resort to in their desperation.I have discussed the matter with the Metropolitan police, and the House will be as horrified as I was to learn that according to their reckoning about 98.4 per cent. of times when they are called to deal with burglar alarms it is a false alarm. The alarms have not been set off by criminal activity. They may, for example, have been set off by a sudden gust of wind. It has been known, in country areas, for a herd of cows to wander past and set off an alarm.
Today I heard of the case of some people who bought a pet, a hamster in a cage. Playing on the little wheel in its cage, the hamster set off the burglar alarm. On that occasion not only were the police called but the RSPCA as well.
I have also discussed the matter with the National Supervisory Council for Intruder Alarms which has been most co-operative and has drawn my attention to the BS4737 with which all the best burglar alarms comply. The standard provides for automatic cut-off after 20 minutes and also that the burglar alarm should be regularly serviced and maintained.
The main thrust of my Bill would be to ensure that people installed high- quality burglar alarms and ensured that they were properly maintained and serviced in the full knowledge that if they were not, and the Bill becomes law, they would find themselves hauled before the beak and dealt with summarily. The amount of disturbance caused by alarms has got competely out of hand and should be stopped. If the Bill becomes law, the police will know in future that if a burglar alarm goes off there is a cat burglar, and there should be fewer cries of "wolf".
Question put and agreed to.
Bill ordered to be brought in by Mr. Hugo Summerson, Sir Geoffrey Finsberg, Mr. Keith Speed, Mr. Norman Hogg, Mr. Keith Vaz, Mr. Menzies Campbell, Mr. Chris Mullin, Mr. Tony Banks, Mr. David Martin, Mr. Max Madden, Mr. James Cran and Miss Ann Widdecombe.
Burglar Alarms (Control)
Mr. Hugo Summerson accordingly presented a Bill to regulate the manufacture of burglar alarms to ensure that they do not ring for more than thirty minutes after being set off : and the same was read the First time ; and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 136].
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Orders of the Day
Finance Bill
(Clauses Nos. 1, 32, 33, 44, 51 and 138)
Considered in Committee
Mr. Harold Walker in the Chair.
Ordered,
That the order in which proceedings in Committee of the whole House on the Finance Bill are to be taken shall be Clause 51, Clause 33, Clause 32, Clause 44, Clause 138, Clause 1.-- [Mr. Major.]
Clause 51
Relief
3.42 pm
Mr. A. J. Beith (Berwick-upon-Tweed) : I beg to move, amendment No. 18, in page 39, line 7 leave out on or after 6th April 1990'.
The Chairman of Ways and Means (Mr. Harold Walker) : With this, it will be convenient to discuss the following amendments :
No. 19 ; in page 39, line 9 leave out (whenever issued)' and insert
issued on or after 6th April 1990'.
No. 20, in page 39, line 9, at end insert--
(aa) the individual making the payment has not entered into any other contract of private medical insurance prior to 6th April 1990.'.
Mr. Beith : The amendments address themselves to the issue of tax relief for private health insurance, one of the most widely trailed features of the Bill, which the Government expected to be greeted with widespread enthusiasm. I see no sign of that enthusiasm but I see it adding even more to the depression among many people working in the National Health Service about the Government's attitude to the entire service. I see it as a further demonstration that the National Health Service is far from being safe in the hands of the Prime Minister.
The amendments are designed to test the purpose of the new tax relief and to discover whether it is intended to open the door to an ever widening opt -out system in which more and more people are encouraged to believe that the only way to get reliable health provision is to buy their way out of the Health Service. In their reply to the amendments, perhaps Ministers will clarify the position.
At a time of such anxiety about the financing of the National Health Service, who but this Government would have chosen to devote at least £40 million immediately this year to tax relief for private health insurance? When the National Health Service is in such crisis, who but this Government would have diverted funds immediately to the private sector?
The crisis in the Health Service is partly but not entirely of the Government's making. Some of it relates to demographic change ; to the increasing number of elderly people with which the Health Service must cope and the widening range of treatments now available for the illnesses and conditions from which those elderly people suffer. That crisis demands greater public funding, as successive reports of House of Commons Select
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Committees, including the Social Services Select Committee and the Treasury Select Committee, emphasised. Even the Government's most ardent supporters in the Health Service--it is quite hard nowadays to find Government supporters anywhere in the Health Service-- remain as anxious as ever, despite the new funds to which the Chief Secretary to the Treasury will no doubt refer, because those funds have not kept pace with the growing need that the Health Service faces and the higher rate of inflation from which it suffers through the commodities that it has to buy.3.45 pm
Where did the proposal for such substantial expenditure on private health insurance originate? It did not come from within the National Health Service, where it is hard to find anyone who welcomes or is enthusiastic about the idea. Nor did it come from the House of Commons Social Services Select Committee which said in its fifth report :
"In our judgment, the creation of new tax subsidy on all private health insurance cannot be demonstrated to extend total availability of health care. It would reduce the total public expenditure from which Health Service resources are drawn while at the same time narrowing the tax base still further."
That is a clear recognition of the force of the arguments against such a proposal.
The proposal did not come from the National Health Service and it did not come from those Members of Parliament who take the closest and most careful interest in the National Health Service. It did not come from the Treasury Ministers who have to defend these clauses today. All the smoke signals from the Treasury were that Treasury Ministers were strongly opposed to the use of tax relief to encourage private health insurance and would regard it as a departure from their stated policy of broadening the tax base and reducing the rate of tax. The Government's declared policy on income tax is surely that the base for that should be as wide as possible and that the rate of tax should be as low as possible. Yet in this measure they are specifically narrowing the tax base and departing from their crusade against all tax breaks and tax incentives. It would be interesting to hear today whether they intend to abandon their crusade and return to an era of widespread tax relief and a narrower tax base or whether they have had to swallow one single inconsistent policy because the Prime Minister insisted on it.
The basis of the proposal is the Dulwich factor, the Prime Minister's view of retirement and old age, which is that the best way to health care is to opt out and therefore that should be subsidised and encouraged.
That leads one to question the purpose of the provisions in the minds of the Treasury Ministers. The amendments test the proposals by arguing that tax relief should not be granted to existing holders of private health insurance. It is necessary that we establish whether the measure is intended to be a growing provision for a widening number of people encouraged to opt out of the National Health Service, or whether it is what Treasury Ministers have recently said it is. I listened with some fascination to the Chief Secretary when he answered questions last Thursday. When he was pressed to give his view of the proposals he replied :
"In a ringfence way it will help many elderly people who wish to continue medical insurance cover on retirement but who are unable to do so because they have lost the benefit of the employer scheme. At the moment of retirement their
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income tends to fall and their premium tends to rise. We are seeking to retain the capacity for these people to sustain and retain the medical insurance they have previously had. That is entirely fair and reasonable, and I support it thoroughly."--[ Official Report, 4 May 1989 ; Vol. 152, c. 351.]I have heard of proposals being damned with faint praise, but that takes the prize for the faintest praise I have heard in a long time. The Chief Secretary was saying that the Government's proposal was nothing that the Prime Minister had in mind and that it was not an attempt to encourage large numbers of people to take up private health insurance, but was for those who had already found themselves in employer-based, employer-funded schemes and who, when they retired, had to decide whether to stay in the scheme. Such schemes become expensive, because at retirement age, people have to pay their own premiums and they are in the age bracket at which premiums are higher. For such people alone, the Chief Secretary seemed to imply, the Government were making special provisions. That is not what clause 51 says and it appears to be intended to be much wider. The Chief Secretary's view seemed to be attempting to find something in the Government's proposals that he could support with a modicum of enthusiasm. He will have to go much further tonight, unless his promotion chances are to be restricted, because he will have to say that he welcomes the proposal in its entirety and not only that small part he singled out when answering questions.
The proposal goes wider. It is part of the route to a two-tier Health Service, in which the better-off do not depend on the public provision. It will undermine the essential principles of the National Health Service, which one of my predecessors as Member of Parliament for Berwick-upon- Tweed, William Beveridge, laid down and which were implemented by the Labour Government in the years immediately after the war. There was the principle of a universal service, available free to all at the point of delivery and which should not require people to take out private insurance to provide for their essential health needs. There is no reason why people should not make provision for whatever they wish, whether health, leisure or a more comfortable retirement, out of their own taxed income. However, there is no reason why the generality of taxpayers, many of whom are struggling hard to make ends meet, should subsidise those who make the choice to have health provision outside the National Health Service. Those who have been called on to subsidise such provision are often those in the greatest need. That is an argument that Ministers are fond of using themselves against many aspects of public expenditure, but they seem unwilling to use it when it comes to the hard-pressed taxpayers at low levels of income subsidising those who are well-off enough to engage in private health insurance.
The provision will bring into the Health Service a further degree of inequity and it will benefit the richer pensioners because it will apply not only to the standard rate of tax, but to those on higher rates, who can claim relief at a higher level at the expense of the ordinary taxpayer. The cost of the provision is open-ended, but is likely to become expensive. I do not know how the Government made an estimate, but they have estimated that in the first year, the cost will be £40 million. That is the basic cost of giving relief to those already insured, who without any incentive have seen fit to take out private health insurance. They have made a free choice to do so as they are entitled to do. The Government propose to
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reward those people with a subsidy of £40 million, although the money could better have been used in the Health Service itself. Amendment No. 18 seeks to take away that element of cost by not providing tax relief for those who are already insured. As the number of pensioners with private medical insurance plans increases, both because of the increasing number of elderly people and because of the increasing proportion of those retiring who have been in company schemes, the cost could escalate considerably, which I presume is the Government's intention. What incentive will there be for private medical insurance firms to control costs when tax relief will make the premiums cheaper? As relief becomes more expensive and more widely enjoyed, Treasury Ministers know that it will become progressively more difficult to restrict and even more difficult to remove.The Government's argument is that the provision will relieve pressure on the National Health Service. That argument is not even supported by those most closely involved in the health insurance industry. The Investors Chronicle analysed the benefits to be obtained from taking advantage of the tax relief and concluded : "private medical insurance should not be regarded as a substitute for the NHS, since it does not provide an emergency ambulance service or cover long-term hospital care."
The article goes on to say :
"BUPA, the leading medical insurer with about 60 per cent. of the market, defines treatment as surgical or medical procedures the sole purpose of which is the cure or relief of illness or injury'. This excludes chronic illnesses such as cancer and on-going treatment such as renal dialysis. Most insurers do not cover alcoholism or psychiatric problems".
The publication then lists a number of other problems not covered by private health insurance.
Private health cover is likely to take up those parts of the National Health Service that can be made profitable rather than those which cannot, by their very nature, be made profitable, such as after-care, community care, preventive medicine and the long-term treatment of conditions such as senile dementia, which is now a great problem for many elderly people. For all those things, most people will continue to depend on the National Health Service and the Health Service will pick up many of the after-care costs associated with treatments covered by private health insurance.
Even though the private sector may succeed in adding to the total of treatment carried out--one can only welcome any additional treatment that it secures--all health experience suggests that it will still give rise to more dependence on the National Health Service. There is no escaping the fact that any diversion of money into the private sector will not help the NHS with its problems but instead will make them infinitely worse. I simply do not understand how Treasury and Health Ministers can blind themselves to that fact--unless it is simply that the Prime Minister has power to override all reasoned argument in her Government.
There are 12 million people over 60, and the number is growing. Of those, 600,000 have so far chosen to invest in private health cover. It is costing £40 million to subsidise that 5 per cent. and it will cost perhaps £200 million to subsidise 25 per cent. of eligible pensioners. That constitutes a large and growing diversion of funds from the NHS, which it is in no position to afford. All over the country, hospitals are crying out for staff--the continuity of resources that will enable them to staff facilities that
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already exist. As Ministers go round opening glossy new hospitals, they should be aware that such hospitals do not add up to much if they cannot be staffed and cannot provide the services that they are designed to provide. The funds that are to be diverted in this way could have helped to keep existing facilities going and to improve them.The amendment would remove that first year burden. I have tabled it as someone who is wholly opposed to the principle of a public subsidy going to private health insurers. In seeking the support of the Committee for the amendment, I also seek its support in opposing the principle of money that is desperately needed in the Health Service being channelled into private health insurance, when those who wish to choose that insurance can already do so freely and need no public subsidy to encourage them.
The Chief Secretary to the Treasury (Mr. John Major) : The hon. Member for Berwick-upon-Tweed (Mr. Beith) has started what I suspect will be a long march through the Committee stage of the Bill--both in Committee of the whole House and in Standing Committee. Although the hon. Gentleman argued against the principle of tax relief, amendments Nos. 18, 19 and 20 admit that principle and simply seek to limit the deadweight cost at the time of its introduction. If the hon. Gentleman will permit me to say so, I think that there is an inconsistency in his approach.
Amendments Nos. 18 and 19 are essentially paving amendments for amendment No. 20, which deals with the substance of the hon. Gentleman's concern, although I think that many of his remarks of principle trespass somewhat on the next group of amendments, which I expect to be widely debated. I know that many hon. Members, including the hon. Member for Berwick-upon-Tweed will wish to debate further the principle of tax relief when we reach that group.
The effect of the amendments of the hon. Member for
Berwick-upon-Tweed would be to rule out any tax relief for people who are now, or who ever have been, covered by private medical insurance. I understand the hon. Gentleman's concern about deadweight cost, although on this occasion it is misplaced. I hope to show the hon. Gentleman that the effect of his amendments goes a good deal further than he intended and further, perhaps, on reflection, than he would think is desirable.
4 pm
I believe it is clear that the central point of the concern of the hon. Member for Berwick-upon-Tweed was the deadweight cost. It is inevitable with relief of this kind that, on its introduction, a significant proportion of the cost of relief will go to those who have already taken out private medical insurance, often at some personal sacrifice. However, it would be neither just, fair nor practical to discriminate against those who are already covered by medical insurance in that way. If we believe that tax relief is merited--I do, although the hon. Gentleman does not-- such a discrimination would be entirely unacceptable. Those people thus discriminated against would feel--I think with some justice--that they were being penalised simply because they had had the foresight to make provision for their future needs, and in that they would be right. On reflection, the hon. Gentleman may not wish to do that. I expect the new relief in later years to go increasingly to people who in retirement would not otherwise have had insurance cover. The deadweight cost, therefore, is not
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likely to run through in the future. It is those people who are the principal target for the new ring-fenced and limited relief proposed in the clause. By how much and how speedily that benefit will build up will depend on the rate at which the take-up of medical insurance increases over the next few years. That, too, is dependent upon uncertanties. To a large extent, it will depend on the way in which the marked is developed by the medical insurers.I have already said to the hon. Member for Berwick-upon-Tweed that his amendments go further than he intended. They do so because they have unwelcome side effects, which I hope may encourage the hon. Gentleman to withdraw them at the conclusion of the debate. First, they would act against the main objective of the proposal, which is--I reiterate in essence what I said the other day--to encourage those who have had medical insurance cover during their working lives to continue it in retirement. Many working people enter into medical insurance contracts, usually known as "group schemes", where their employer negotiates the insurance cover on behalf of his employees as a whole. Premiums are usually significantly less than for cover taken out on an individual basis, and in many cases, as the hon. Gentleman will know, the employer subsidises the cost.
Individuals in such schemes, who bear part or all of the cost of medical insurance during their working lives, were intended to benefit from the relief when they retire, just as much as individuals whose insurance cover is wholly provided by their employer. But the amendments of the hon. Member for Berwick-upon-Tweed would draw a distinction between the two categories. Those who had a contract to make a contribution towards the cost would be debarred from the new relief on retirement, whereas those who had no contract, probably because the whole of the cost was borne by their employer during their working lives, would be eligible for the relief. Whatever other view the hon. Gentleman may have on the general principle, I am sure that he will recognise that that sort of discrimination could not be justified. I do not believe either that that is what the hon. Gentleman intended when he tabled his amendments.
Mr. Beith : The Minister is basing his argument on the case that he advanced at Question Time on Thursday, that the relief is intended to provide for those who had already entered either into a contract or some form of health insurance--I appreciate that there may be a technical difference--with their employers prior to retirement, and who then found it difficult to maintain their contracts after they retired. If that is the case, why is the clause so wide? Why is it not confined to such people?
Mr. Major : The hon. Member for Berwick-upon-Tweed is misrepresenting what I said. In answering questions the other day, I was referring to the people who had difficulty on retirement and to whose difficulty the clause was especially addressed. In no sense was I seeking to circumscribe the relief solely to those people. Other people may wish to take advantage of the relief and that is a decision for them but it is in respect of those people who face the particular hardship that we feel that the clause will go some way to putting right.
The second drawback of the amendments is that they would discourage people who are thinking of taking out
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medical insurance cover before next April. That cannot be justified and I suspect that the hon. Gentleman had not intended that effect when he tabled his amendments.On the hon. Gentleman's central point, the amendments would have the effect of limiting the deadweight cost of the scheme to a negligible level in 1990 -91 as, of course, the hon. Gentleman intended. The great majority of the £40 million cost in 1990-91 will be spent in giving tax relief to those over-60s who have already taken out medical insurance cover. That is the inevitable deadweight cost which, as I conceded a moment ago, is unavoidable with the introduction of a new relief of this sort. However, when considering the deadweight cost, one must bear in mind that it will help many of those people to retain their cover and not to surrender it in the future as some may have found necessary.
It is correct that only a small proportion of the initial £40 million relates to additional take-up as a result of the relief. However, the costing assumes an increase in take-up of about 10 per cent. in the first year from around the 600,000 who are covered at present to around 660,000. The hon. Gentleman's amendments do not limit the relief to those who do not have insurance cover now, but to those who have never had insurance cover at any stage in their lives. Therefore, the amendments would effectively limit the take-up of tax relief contracts to well below the 60,000 additional take-up that we envisaged. In practice, that would mean that any elderly person who had never had insurance cover would be ineligible for the relief, even on a wholly new contract taken out in retirement. Quite apart from the hon. Gentleman's objection in principle to tax relief, such discrimination between people taking out new insurance contracts is not logical and could not be justified under any premise. I hope that for those reasons--and as the issue of principle remains for us to debate later--the hon. Gentleman will realise that the amendments are defective and do not meet the underlying objectives that he had in mind and I hope that he will feel able to withdraw them. However, if he feels unable to withdraw them, I shall advise my hon. Friends to vote against them.
Mr. Beith : I am glad that the Treasury's capacity for detecting hidden snags in proposals has increased since last year when the Chancellor brought forward his mortgage interest relief changes which were postponed until August with such dramatic consequences. I hope that he had the benefit then--but perhaps he did not and that is why he did it--of such detailed advice of the unintended side-effects of such amendments.
The Minister seems unable to see the wood for the trees because throughout our discussion he has seemed unwilling to clarify the essential purpose of this legislation. Amendment No. 18 goes to the heart of that matter and identifies the very group of people on whom the Minister wishes to concentrate relief and would deny them the relief. That gives us an opportunity of finding out what the Minister really thinks about this. The Minister has sought again and again to suggest that the main purpose of the clause is to concentrate relief on a group of people who have already entered into medical insurance but who find it difficult to continue with it when they have retired. He has also suggested that all but 10 per cent. of the cost in the first year will go to such people rather than to people who
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come new into private health insurance. If that is the object of the exercise, the Government should have put a different clause into the Bill.Treasury Ministers are hiding behind a slender tree--there are not many trees that the Chancellor could hide behind even if he tried--when they seek to pretend that the whole purpose of the clause is to help a few pensioners who entered employer-based schemes for health insurance before their retirement. Its purpose is to have a large and expanding opt-out from the National Health Service. It is the first step towards a two-tier Health Service.
I accept that there are technical defects in the amendments and I therefore propose to invite my right hon. and hon. Friend to vote against the principle of the clause at a later stage. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Gordon Brown (Dunfermline, East) : I beg to move amendment No. 5, in page 39, line 7, leave out 1990' and insert 1993'.
The Chairman : With this it will be convenient to take the following amendments :
No. 8, in page 39, line 45, leave out from claim' to deducted' in line 46 and insert
set off against its profits liable to tax the amount.'. No. 21, in page 40, line 23, at end add--
(10) Relief under this section shall be given at the basic rate of income tax only.'.
Mr. Brown : The amendments do not seek merely to limit the scope of private health insurance tax reliefs but prevent them from being implemented until after the next general election, the result of which will show clearly what the country wants done about this matter. On the Treasury's admission, the proposal will cost at least £40 million this year. That money will go, mainly to top rate taxpayers. The Chancellor has already admitted that at least half of it will go to the top 5 per cent. of taxpayers. As the Chief Secretary has just admitted, the majority will go to those who already have private medical insurance, and beyond that, the cash available is open-ended. Under the proposal, the number of pensioners eligible for relief is uncapped. Despite the claim last Thursday in Treasury Question Time that it would be ring-fenced, I shall show that the clause even includes 900,000 people who are not pensioners. The amounts on offer in tax relief are limitless. The proposal is inflationary and liable to push up Health Service costs without controlling them at all.
It will provide an unjustifiable subsidy of incalculable cost and completely unproven value. The proposal does not suggest that the Health Service should buy operations or services from the private sector and the industries within it, but that a minority of people over 60 should have a minority of their operations and treatments subsidised when they are carried out in the private sector. The main effect of the proposal is that a monthly, three-monthly or yearly cheque will go to BUPA, Private Patients Plan and other private health insurance industries. That cheque will be paid straight from the Government to BUPA and the other organisations.
We already know that the private health industry is subsidised by the Government. Employers can set the expenditure on private medical insurance against their tax bills and people with salaries below £8, 500 can avoid paying tax on private medical insurance. We know that the
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Government have set a limit on the amount of new investment that they will put into the Health Service and that there is a limit on the amount of money that they will give to the hospital service this year. They have set a limit on the amount of money to be used for new buildings and equipment. However, there is no limit on the subsidy that is given to the private sector in such an open-ended way. The scheme contains no rate-capping equivalent for BUPA, no cash limit for private medical insurance, and no cash ceiling is imposed by the Chancellor. It is an open- ended subsidy in which commercial medicine receives a signed cheque and effectively writes in the sum. It is not surprising that the proposal has not been defended by the Chancellor in any meaningful way. It was not even mentioned by him in his Budget Statement, even though it has appeared in the Finance Bill. On Second Reading of the Finance Bill, the Chief Secretary said that the proposal had achieved "a false importance." At no point has the Treasury given the scheme anything other than lukewarm endorsement.The reason for this is clear. It is a proposal which comes not from the Chancellor, Chief Secretary or Treasury, but from the Prime Minister. The proposal offends every Treasury principle. It is open-ended and uncapped, and it starts with a huge deadweight of people who already buy private medical insurance and who, therefore, will receive subsidies. It offends the Chancellor's own proposals for the simplification of the tax system.
Mr. Tim Smith (Beaconsfield) : The hon. Gentleman said that there was no cash limit on this tax relief. Can he name one tax relief that is cash-limited?
Mr. Brown : The question that we are debating this evening is whether we should give open-ended subsidies. I think that the hon. Gentleman is genuinely worried about the scheme. He has already said :
"What worries me is the deadweight cost of relief for all those elderly people who already buy private medicine without incentives. It is a subsidy to the private sector paid for by all taxpayers. If we don't stop here then it may spread to other fields such as independent schools."
If the hon. Gentleman wants to pursue his objections to this open-ended subsidy and to prevent it from escalating into other areas, he would do well to support us in the Lobby this evening. I hope that other Conservative Members who have already expressed severe doubts about the advisability of the scheme will join him in opposing it this evening.
4.15 pm
I said that this offended Treasury principles. The Chancellor said in his 1988 Budget speech that the objective behind his tax reforms was to sweep away tax breaks. Yet, this is the introduction of a new tax break--as we had last year--which is even more unjustifiable than some of the tax breaks he is trying to sweep away. It is hardly supported by the Department of Health, either. It was barely mentioned in the Health Service review. It is not mentioned seriously in the working papers, or covered in the £1 million advertising campaign that the Health Secretary launched. The new Tory campaign guide, published only a few days ago, contains 15 pages on the National Health Service and only one sentence on this private medical insurance proposal. It is the proposal that dares not speak its name.
Perhaps the best idea of the Health Secretary's views on this matter was given when he became Secretary of State
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for Health in July and the proposal was first floated. I quote from an interview that he gave and which was mentioned in The Independent on 27 July 1988. Speaking on private medical insurance, he said : "You don't need it. We have a National Health Service."It is not surprising that the hon. Member for Beaconsfield (Mr. Smith) is not the only Conservative Back Bencher who is unhappy about the proposal. I have noted from the debates on this matter that the hon. Member for Horsham (Sir P. Hordern) has opposed the proposal and that the hon. Member for Corby (Mr. Powell) is very unhappy about it. I believe that more Conservative Members, some of whom will have absented themselves today, are unhappy about it.
In the Finance Bill debate that we held only a week or two ago, apart from the hon. Member for Dover (Mr. Shaw), whose excuse is that he has had no research assistance to help him for some time, the only person who spoke in support of the private medical insurance proposal was the hon. Member for Gillingham (Mr. Couchman). He declared an interest in the form of his connection with a company called Denplan which led him to believe not only that the proposal should go ahead but that it should include insurance for dental treatment and operations. So the one Conservative Member who has spoken up strongly in the debate on this matter has had to declare an interest in it. This proposal was not in the manifestos of 1979, 1983 or 1987. It was never mentioned to the public as a possibility before it was thrust upon us as a result of the Health Service review, and the reason why is clear ; it has neither the support of the Health Department nor a great deal of support in the Treasury. In the battle between the Chancellor and the Prime Minister over the garden wall at No. 10, the shriller voice was the more successful. The Chancellor's opposition on behalf of established Treasury principles was shouted down.
Of course, there was a promise of consultation on the Health Service reforms. In January, when the Secretary of State for Health announced the reforms he said :
"We will be consulting we shall, of course, listen particularly to the views of the public and the patients."--[ Official Report , 31 January 1989 ; Vol. 146, c. 173-174.]
But there has been no consultation on this proposal, as the Chief Secretary well knows. There has been a review that was not independent or impartial and which never included a doctor, a nurse, or even a patient. It was staffed mainly by people who use the National Health Service only when the private sector fails them. Within a few weeks of the promise of consultation, this clause is being imposed without consultation, without full information, and even without--as yet--the publication of the regulations which allow us to judge how far the proposal will go.
The only consultations held in the past few weeks have been with the private health industry. So keen are the Government to push the proposal ahead that the one group with which they have been prepared to consult has been the private health insurance industry. Never before has such a significant change been made in the principles underlying the National Health Service with so little consultation. Faced with a choice between listening to patients and doctors in the National Health Service and listening to their friends in business, the Government listen to their friends in the City and in business, first time and every time.
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