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Column 775benefit. The poll tax is a rigorous means test ; housing benefit is a rigorous means test ; but tax relief on private health insurance involves no means test whatsoever. It is simply an attempt by the Government to make private health insurance and private medicine certain to succeed, even if people do not want it, because the conditions under which it operates are equivalent to living in a tax haven.
We should resist that. It has been said many times during the debate, and it should be challenged, that it is indisputably true that, if someone uses the private health system, they are taking a burden off the National Health Service. I challenge that. I ask Conservative Members to produce the research that shows that the impact of private health care in Britain is taking a burden off the National Health Service.
If I am sitting in front of a consultant, and he says, "I can operate on you next week in the private sector, but I can only operate on you in six months' or nine months' time in the National Health Service," I want to know how that is relieving the National Health Service. I want to know how that doctor can efficiently keep his private health list down so that he can operate next week without shunting someone down his National Health Service list. How does he achieve that? How does he move someone up his private medical list without moving someone else down his National Health Service list? I want to know how that can be achieved, given that there are a finite number of doctors and consultants. What is the consequence of such a doctor giving priority to his private list? It is frequently alleged that the work is then done by the senior registrars or junior doctors in that specialty.
Mr. Couchman : From my experience as a former chairman of a health authority, perhaps the hon. Gentleman would like to know that many consultants are not contracted to perform full time for the National Health Service. Many of them work for the National Health Service for seven elevenths, eight elevenths or nine elevenths of a week. The rest of the time is their own to operate within the private sector. If someone has a hip operation in the private sector, where would he have that operation if he were not able to take advantage of the private sector? The work would be thrown straight back on to the National Health Service. I accept that he might be way down the list and that he has paid for the privilege of going up the list. That may be ideologically unhappy for Opposition Members, but ultimately every operation performed in the private sector means one operation fewer to be provided in a National Health Service hospital.
Mr. Worthington : There are 168 hours in a week, and that number cannot be increased. A doctor can operate for a limited number of hours. The more that that doctor operates in the private sector, the fewer operations he can perform in the National Health Service. We have a great deal more to do. Unsupported assertions are being made by hon. Members on both sides of the House. Opposition Members have asserted that the private health service is parasitical on the National Health Service, while Conservative Members have made unsupported assertions such as the one we have just heard. The necessary research has not been done to bear out my belief that when we support the private health system through such legislation as we are discussing today we
Column 776further damage the National Health Service because no one will pay or should pay for that which is not worth paying for. People pay for the private health system because they get treated more quickly and are dealt with more rapidly.
Ms. Abbott : I have never had the pleasure or the privilege of chairing a health authority, but I am the daughter of a nurse. It is all very well for Conservative Members to talk about consultants, but it takes more than consultants to provide treatment for a patient. Private health care leeches off the work of nurses and ancillary workers.
Ms. Abbott : Perhaps the hon. Gentleman should stand up and intervene. It takes more than consultants to provide treatment. It is the opinion of ordinary Health Service workers--not the chairs of health authorities, but nurses, ancillary workers, cleaners and other staff--that private health care does not provide choice but is a drain on the National Health Service resources, as the private sector trains no one.
Mr. Worthington : It is unfortunate that hon. Members on both sides of the House have tended to concentrate on those at the top of the system without taking into account the contributions that are made lower down.
In conclusion, I emphasise, that private health care flourishes in Britain because it is treated as a lame-duck industry that needs Government assistance in order to thrive. Inevitably it will thrive because it will be in the interest of the Government to create a two-tier system in which people are constantly forced to decide whether the National Health Service is providing an adequate service. If they decide it is not, they will invest in private medicine. I believe that, through provisions such as clause 51, the Government are driving more and more people to choose private medicine by accentuating the differences between private health care and the National Health Service.
Mr. Ian Gow (Eastbourne) : Before I come to the main topic of the debate, I should like to ask my right hon. Friend the Financial Secretary two questions. I had not realised until the debate began that those who are not liable to income tax could claim tax relief. But if I understand clause 51 aright, even those who are not subject to income tax may deduct from their contribution to BUPA or PPP an amount equivalent to 25 per cent. of the premium. Clause 51(6)(b) states that the recipient of that contribution to a private scheme may
"recover from the Board an amount equal to the amount deducted." Supposing that an elderly person, who is not liable for tax, who makes a contribution to a private insurance scheme, deducts 25 per cent. of the premium and the company to which that premium is paid is obliged to regard it as if the premium had been paid in full, can that private company recover from the Inland Revenue the amount of tax, even though no tax is payable by the contributor?
My second point is this. If I understood my right hon. Friend the Chief Secretary correctly, he said, when responding to an earlier observation, that clauses 51 to 54 had been the subject of discussion with the European Commission. That came as a great surprise to me. When my right hon. Friend the Financial Secretary replies to the
Column 777debate, will he tell us in what circumstances we had to obtain clearance from Brussels for clauses 51 to 54? I am pleased that my hon. Friend the Member for Wells (Mr. Heathcoat- Amory) is in his place on the Treasury Bench. He and I have a common view about the legitimacy of interventions from Brussels in affairs that we believe should be the responsibility of this Committee and this House. It would be of considerable concern to me if we had to obtain the sanction of either the bureaucrats or the Commission in Brussels for the proposals.
My right hon. Friend the Chancellor, in his six years in office, has often proclaimed that part of his purpose is to move towards fiscal neutrality and he has already taken several steps in that direction, which I applaud. He has sought, for example, to diminish the perk of the company car, to which the hon. Member for Clydebank and Milngavie (Mr. Worthington) referred. My right hon. Friend has removed tax relief on new life insurance premiums. Clause 51 is not consistent with his previously declared policy. As someone who approves of fiscal neutrality and who believes that it should be up to the individual to decide how to use her or his money, without pressure from the Government or taxation privileges, I am somewhat anxious that we seem to be going in a direction opposite to that in previous Budgets.
Even my right hon. Friend the Chancellor has not said that he wants to achieve perfect fiscal neutrality. He has persevered with tax relief on mortgage interest and with a tax arrangement that allows people to make contributions to retirement pensions and to deduct those contributions when calculating taxable income. Even my right hon. Friend has not said that complete fiscal neutrality is his goal, so the Committee must examine the extent to which the conferring of an additional element of discrimination in favour of particular taxpayers is justified. Clearly, my right hon. Friend the Chancellor and my right hon. Friend the Financial Secretary believe that there are exceptional circumstances, as they believe there are in the cases of providing pensions and purchasing a house.
I want to devote the rest of my speech to the legitimacy of the claim about exceptional factors. This afternoon we are giving legislative effect to the announcement made in "Working for Patients". We have known about it since January, when the White Paper was presented to Parliament. The White Paper, which we are to debate on Thursday, is clear about the proposal. It says :
"There is already a growing partnership between the NHS and the independent health sector."
I pause just to add that I welcome that growing partnership warmly and to note that even the Labour party, and even the late Aneurin Bevan, when he set up the Health Service, did not seek to eliminate the private sector of medicine. Even those who sit on the Opposition Front Bench do not suggest that the remodelled Labour party is about to submit to the British people a policy for the abolition of private medicine. I am sure that I carry Opposition Members with me when I speak in praise of the independent sector of medicine and say that I welcome the growing partnership.
Page 68 of the White Paper says :
"In 1986, contractual arrangements between the NHS and the independent sector led to over 26,000 in-patient treatments". Again, we are talking about lightening the burden on the Health Service and that is a particular example. That point
Column 778was also made by my hon. Friend the Member for Gillingham (Mr. Couchman), who said that without doubt the existence of independent hospitals lightened the burden on the National Health Service. I do not doubt that independent hospitals lighten the burden, so I can understand why my right hon. Friend the Financial Secretary said on Second Reading of the Finance Bill :
"If we can generate just a little additional demand for health insurance, that will relieve pressure on the National Health Service".--[ Official Report, 25 April 1989 ; Vol. 151, c. 893.] I agree with my right hon. Friend. We need to take such steps as we can to diminish the pressure on the National Health Service. I want to read one final quotation. In our White Paper in January, we said that the purpose of what is now clause 51-- which was then only a glint in my right hon. Friend's eye--was to
"encourage both the provision of medical insurance for older people and its take-up".
That purpose is laudable. When clause 51 comes into operation on April 1 1990, there will be an increase in the take-up of private medical insurance. A consequence of that will be to diminish the pressures on the National Health Service and there is not a single member of the Committee who would not agree that there are severe pressures on the service.
Despite my serious reservation about the departure from fiscal neutrality-- a laudable goal that I share with my right hon. Friend the Chancellor--the proposal is justified in the exceptional circumstances in which we find ourselves and I shall support it in the Lobby tonight.
Mr. Thomas Graham (Renfrew, West and Inverclyde) : The clause is an act of political bribery. The Government are trying to gain a few extra votes at the expense of all those who are queueing up for operations. I find it incredible that they should have to play this game and introduce a scheme that will allow the rich--and perhaps those who are not so rich-- between £40 million and £100 million more in tax concessions. That £100 million will end up in the coffers of the Government's friends in the private medical world--folk who will probably spend it on champagne when it could have been spent on medicine if it had gone to the National Health Service. The proposal is obscene, coming as it does after a massive lobby by people all over the country in defence of the National Health Service. It is incredible that we should be talking about a £40 million subsidy to people who do not need it and who can already choose private health insurance, when many people rely entirely on the National Health Service.
I recently met representatives of the Inverclyde Crossroads care attendants scheme. It would break hon. Members' hearts to meet the carers whom I met, who know that that scheme is to come to an end. The £40 million that the present measure will cost could have been used to save the country hundreds of millions of pounds. Throughout Scotland care attendant schemes are having to come to an end because of lack of money. I know one old woman of 64 who is looking after her mother of 84. It broke my heart to see that woman cry. She knows that the care attendant scheme is to end in September because of insufficient funds. At the moment, carers come in two or three days a week to give that woman respite and allow her to take some time out from constantly looking after her
Column 779mum. She does not want her mother to be in hospital or away from her ; she wants to look after her until the day she dies. The £40 million that the clause will cost could have spared that woman the trauma that she faces when the scheme ends in September. She does not know whether she will have to put her mother into care--which, after all, will cost the Government a vast sum. We are not talking about chickenfeed. If the scheme comes to an end, it will cost the Government about £3 million a year. What does it cost to run the scheme? It costs £1,000 a week--a miserable sum. For the sake of that sum, the Government are condemning nearly 60 families to a thoroughly troublesome time. They do not know where to turn now that the Government have turned their backs on them. The Government have not turned their backs on the rich --on those who can afford private schemes. The people whom I met cannot afford private schemes. They need the Government's help.
The Government have a golden opportunity. They can stop this madness. They can reduce the waiting lists. They can ensure that the Inverclyde Crossroads care scheme can continue by releasing money to it and to similar schemes that benefit the country and its elderly people.
I recently met carers in Linwood--another working class town where not many people can afford to belong to BUPA schemes. These folk rely on the National Health Service. Hundreds of people in that community are waiting for all kinds of operations--operations that cost much less in the National Health Service than they would in the private sector. A hip replacement operation costs £2,390 in the National Health Service, whereas in the private sector it can cost anything between £2,900 and £6,000. The Government are always talking about the free market and saying, "If it is cheaper, we must go for it." I do not know, for the life of me, why the Government should want to continue to subsidise private medicine and private health insurance when the National Health Service can do the operations more cheaply. It would be far better if the Government put the £100 million--perhaps £200 million--that the clause will cost into the National Health Service, where it would be much more productive. The Health Service could then conduct the operations which no private hospital can perform more cheaply.
This week I shall be meeting doctors in my constituency who are horrified about the Government's proposals. They are horrified that such measures can be introduced when they have been denuded of funds and when they despair of seeing their patients get proper medical treatment. Those operations are not operations that can be performed in months and years ahead ; the patients desperately need them now. I recently met a woman who is in absolute agony with her arthritis. She is waiting for a hip replacement, and she told me that she is walking in her dreams. She cannot relax or rest. The Government know that there are many men and women lying ill whose illnesses could be cured were it not for lack of money. The Government boast that they are putting money into the Health Service, yet they are squandering £40 million to £200 million in the clause. They can do something about the problem. They can ensure that we get the additional money that we need so desperately in areas such as mine by stopping this nonsense.
Column 780Schemes like the Crossroads schemes are worth their weight in gold. They give relief to families and job satisfaction to the paid carers who work in them. They give voluntary organisations a commitment to provide a service that they know is needed. The satisfaction that carers enjoy when they are granted respite has to be seen to be believed. I sincerely hope that the Government will listen to the cry for help for the Crossroads schemes in Scotland. I plead with them to listen to the cries of those who organise those schemes, which save the country millions of pounds and cost only £1,000 a week to support.
The clause is an act of barbaric piracy at the expense of the poor and the needy. The Government are wrong and they should renounce their mad commitment to supporting private insurance. All over the country people are waiting for help from the Government. At present, they can get help only if they have a few bob and can afford to join a private insurance scheme.
The Government can no longer turn their backs. Last week, they saw the result at the Vale of Glamorgan. I assure them that from now on at every by -election the electorate will return someone who opposes the Government's policies on the National Health Service--a needless policy that will result in more suffering. Men and women rely on their elected representatives to ensure that they get a fair deal. It is time that the Government gave a fair deal to the ordinary men and women who have no money and who rely on state benefit and support and on the fairness of politicians. It is time that they promised to deliver a fair and just system so that those people can live in peace and comfort without the ills and pains that a properly funded National Health Service can alleviate. The Minister should listen to my plea and ensure that the Ardgowan hospice and others like it are given money to care for cancer patients. He should recognise that the carers are invaluable. The Government should forget their private insurance scheme and ensure that the carers receive decent help and support so that people can remain living in the community. They do not want to die in hospital.
Miss Ann Widdecombe (Maidstone) : There has been some discussion as to whether the private sector assists or destroys the National Health Service. Obviously, many of the assumptions about whether clause 51 is an advantage or not will depend on that basic premise. I have heard nothing from the Opposition that has convinced me that the private sector does not act materially to the assistance of the National Health Service. I do not speak, as did my hon. Friend the Member for Gillingham (Mr. Couchman), as a former chairman of a health authority, but merely as an ordinary Member of Parliament. I was grateful a year ago for the private hospital in my area, when our National Health Service hospital, through a technical and not a financial problem, had to cease certain operations for many months. However, those operations were able to be carried out in the private sector. That is the sort of healthy alternative that I believe should be on offer and for which I for one am grateful.
The hon. Member for Clydebank and Milngavie (Mr. Worthington) asserted that, if consultants split their time between the private sector and the National Health Service, that would not assist the NHS, but would simply assist queue jumping. He asserted that an increased number of people would not be treated on the National Health Service. I submit that that is based on what is the
Column 781rather naive assumption that, if one did not let the consultants split their time, they would spend their 100 hours a week entirely in the National Health Service and would not rather choose to spend their time entirely in the private sector, thus denying the National Health Service much expertise.
I believe that the private sector assists the National Health Service and health provision in this country. It must be encouraged through all reasonable and equitable means. If one starts with that assumption and the assumption that alternatives to the National Health Service are an enhancing factor of the nation's health, surely it makes sense to say that a section of the population that puts an increasingly large burden on the Health Service should, especially, be assisted to choose to be treated elsewhere if they wish. I find it difficult to believe that my hon. Friend the Member for Beaconsfield (Mr. Smith) could say, on the one hand, that he thought that the private sector enhanced health provision, but, on the other, that that was no reason for encouraging a section of the population that did not use it quite extensively to take it up. That struck me as an inconsistent attitude.
We know that there is an increasing number of elderly in the population and that they are becoming an increasing proportion of the population, but it is the tax-paying public who maintain the NHS. We, therefore, have a choice. We either encourage all the elderly to use the NHS exclusively and thus bear, through the tax system, the full cost of their treatment, or we say that, if they wish to have an alternative, they should be assisted. We would then bear the tax burden only of the relief which we are offering.
I believe that there is more to it than that. There is the social position and the dignity of old-age pensioners. Last year I welcomed what I saw as a major reforming Budget in the way that it gave recognition to the social and independent position of women. This year, too, we have had a reforming Budget, which gives much greater attention to the social position of pensioners.
Much has been made by the Opposition of the fact that tax relief is being allowed under clause 51 at the higher rate as well as at the basic rate of 30 per cent. However, if younger people are buying a house and pay a higher rate of tax, they receive the higher rate tax relief. If younger people buy a private pension or an occupational pension plan and they pay the higher rate of tax, they will receive the higher tax relief. Why, therefore, have the Opposition got it in for the old folk by saying that they should not receive higher tax relief?
Mr. Beith : The amendment is in my name. The hon. Lady must surely know that in the case of mortgage interest tax relief, too, I have consistently argued that that tax relief should be limited to the basic rate.
Miss Widdecombe : Therefore, I must withdraw my statement that the hon. Member for Berwick-upon-Tweed (Mr. Beith) has it in for the old folks. He obviously has it in for everybody. I think we must just proceed to disagree on that basis.
My hon. Friend the Member for Beaconsfield said that he did not understand that peace of mind was necessarily a major consideration, because there was no way that medical insurance could be comprehensive. It would not, of course, provide the long-term care which much of the
Column 782NHS provides. That obviously must be so, but we should consider the fact that the elderly are the least able to take full advantage of many NHS facilities.
The elderly are liable to suffer from long waiting lists more than anyone else, because the advances in medical science which flow from the Government's considerable investment in the NHS provide surgical and medical advantages which disproportionately benefit the elderly--for example, the new simplified cataract operation and hip replacements. It means, too, that, when those advances are made, there is immediately a concomitant rise in waiting lists. Because the elderly are those who consume those services most, they are the ones who suffer from the rise in waiting lists. Whereas, if it is a rise in waiting lists for ordinary operations, an individual can choose quite reasonably whether to wait for a long time locally or to go elsewhere in the region, or perhaps elsewhere in the country, that choice is not so readily available to the elderly, who find transport difficult, who will not have young spouses to drive them and who will be less willing to be separated from their families. They need, therefore, a much increased choice, as they are less able to exercise the choice that already exists in the NHS for the rest of us. Why should the elderly suffer a lowering of standards on retirement? It does not matter whether they have been paying for private medical insurance through their employers and that that is a benefit to the employers as well as to them. What matters is that they have had that advantage. When they retire and become dependent on a pension and thus a reduced income, the cost of medical insurance can have a major effect on the decision as to whether to keep up subscriptions. If we want the elderly to have the same opportunities and the same freedom of choice as the rest of the population, we must make it fairly simple for them to keep the benefits which they have always enjoyed. Because clause 51 states clearly that, whenever that benefit was acquired, the tax relief will be implemented after pensionable age, that will enable a pensioner to keep up a benefit that he has always enjoyed. It is really having it in for the old folks to say that they can enjoy a benefit right up to retirement age, but after that it will be made difficult for them.
I believe that this is a social as well as a financial piece of legislation. It will enhance health care provision. It will also improve the position of pensioners and bring them into equity with younger people who already benefit from a substantial range of reliefs.
Mr. Win Griffiths : I rise in support of the amendment tabled in the name of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) that deals with the specific question of when, if ever, the scheme should be implemented. It appears that we have a fundamental and significant new tax relief that is, in fact, operating in the opposite direction to which the Government have previously indicated they intend to go. Only a minority of Conservative Members who have spoken have given their wholehearted support to tax relief on medical insurance. The hon. Members for Horsham (Sir P. Hordern), for Beaconsfield (Mr. Smith), and for Eastbourne (Mr. Gow) all expressed reservations about the scheme, although it appears that at least one of them--the hon. Member for Eastbourne--will persuade himself to vote with the Government. The questions that have been raised relate to the fundamental issue of whether we are taking pressure off
Column 783the Health Service by extending the number of people using private medical facilities. The answer must unequivocally be no. We are talking about the amount of money that the Government are making available to support the provision of medical services in the United Kingdom and whether the Government can provide more and better medical services by spending that money in the Health Service or by spending it in the private sector. On any set of comparisons, the only conclusion that any reasonable person could reach is that it is far more cost-effective and cost-efficient for the Government to direct their resources towards the National Health Service. 8 pm
Let us look at some of the factors involved. It currently costs an average of £415 to provide hospital care for a person between the ages of 65 and 74. Under one of the medical plans--a PPP plan--the amount of relief for the taxpayer paying tax at 40 per cent. will be a subsidy of £589 from the Government. For full medical cover for a person between the ages of 70 and 74, the Government will provide a £645 subsidy. That money could be better spent providing further medical treatment for pensioners within the Health Service. Let us compare the occupancy rate of beds in the National Health Service with that in the private sector. There is an occupancy rate in the private sector of between 35 and 50 per cent. The Nuffield hospitals have an average of 61 per cent. and are the leaders in that area. However, in the National Health Service the occupancy rate averages 81 per cent. In Wales the figure is not quite that high. In 1978 the daily occupancy rate was 78.3 per cent. and in 1988 it was 77.3 per cent. Clearly, the National Health Service provides much more treatment in its beds than the private sector.
If the Government wish to target their resources effectively and efficiently it would be far better to provide resources direct to the Health Service than to provide relief for the relatively small number of people who would take advantage of such schemes. Indeed, the Government think that that number is likely to remain relatively small.
Several examples of specific costs of different types of surgery have already been given this evening. The cost of a tonsillectomy in the Health Service is about £360 ; in the private sector it is anything from £600 to £1,400. Obviously, somebody is making a great deal of money out of those costings. A hysterectomy costs £1,200 in the National Health Service but between £2,000 and £3,600 in the private sector. Where is it better to have that operation carried out? The answer is clearly, in the National Health Service. That is why the Government's scheme is so objectionable. It is an inefficient use of the resources that are provided for medical care in the United Kingdom.
We must also consider who benefits and whether the scheme is likely to be extended to more and more people over the age of 60. We have heard the argument about the numbers of people who will receive standard rate relief and higher tax relief, but a far larger group of people do not pay income tax and could receive the 25 per cent. subsidy if they paid for private health care. However, let us consider the cost of the health care that is available to them through private medical insurance. Even with the tax relief, BUPA has calculated that a couple, one of whom is over 70, who receive the standard rate of relief would still
Column 784have to pay £17 per week. Can any Conservative Member imagine a pensioner couple, who are not liable for income tax but who have dangled before them the carrot of a 25 per cent. subsidy on medical insurance, being able to afford £17 per week? Of course, they could opt for the budget plan and would then have to pay only £10 per week, but that offers a much smaller range of treatment. A single person over 61 would have to pay £16 per week for the best range of treatments offered by BUPA or £10 per week if he or she opted for the lesser range of treatments.
However, we must remember that the majority of people over 60 would not be able to take advantage of any of the medical insurance schemes in any case. I am referring to people with on-going chronic illnesses. They are the people who most need attention but they would have no prospect of gaining any help from the schemes that have been forwarded by the Government in clause 51. About 60 per cent. of that group of people nationwide are adversely affected by chronic illnesses.
For people over the age of 74, the proportion rises to 69 per cent. In a country such as Wales which has a great tradition of heavy industry, those percentages are even higher. Although I do not have the precise figures to hand--I should be interested to know whether the Government have any information on this--I guess that less than one quarter of Welsh pensioners would be eligible for this misspending of our national resources.
If the Government wanted to spend that money effectively, they could tackle the ever-increasing waiting lists. We have heard protestations from Conservative Members about how, over the past year or so at least, more money has been put into the Health Service and more patients have been treated than ever before. However, the fact is that waiting lists are increasing. In Wales the out-patient waiting list has increased over the past decade by over 24,000 and the in-patient waiting list has increased by almost 300, yet more patients are being treated. We must ask ourselves why. Have the Government created such social havoc and deprivation that, despite treating more people, more people are still waiting for treatment? I hope that this evening those Conservative Members who have expressed reservations will join us in the Lobby. The only sensible action for the Goverment to take is to get rid of the scheme by accepting the amendment and postponing the implementation date to 1993. Then the issue of the future of the Health Service and the best way that it can be funded to provide comprehensive and effective treatment for all can well and truly be at the forefront of a general election campaign.
I do not have to remind Conservative Members that the issue of the future of the Health Service was right at the forefront of the campaign recently conducted in the Vale of Glamorgan by-election where the Government were resoundingly beaten. The big difference between the Vale of Glamorgan by- election and any other recent by-election in which the Labour party has won a victory over the Government is that that by-election result did not rely on disenchanted Conservative voters not bothering to vote. The Labour vote increased massively because Conservative voters switched to the Labour party, such was the depth of their discontent.
Measures such as the one before us persuade voters everywhere that the Health Service is not safe in the
Column 785Government's hands and that the sooner a Labour Government can take over and get rid of such proposals, the better it will be for the country at large.
I hope that a sufficient number of Conservative Members, who have already expressed reservations about the proposal, will vote with us this evening. I notice that some Members who have publicly expressed reservations are not here this evening. One such is the hon. Member for Epping Forest (Mr. Norris) who was reported in The Observer in March of this year as saying :
"A lot of my colleagues are concerned about this. It sets a dangerous precedent which could take us, in easy steps, to a two-tier health service.
We also think the Government is wrong because it proposes to offer tax relief to the better off, the people who need it least." We are talking not merely about the efficient use of resources but of using the money for those who least need the help. It would be far better if the money were used for those who really need the help. I hope that our amendment will be supported this evening.
I shall first refer to the interest that I declared during the Second Reading debate on the Bill. It related to a specific company that I have lately advised but is not relevant to this evening's proceedings because those treatments which might be available under the relief which the Government propose are considered in clause 53 rather than clause 51. I should also like to make it clear that I have never paid a private health insurance life premium for myself or my family. We are National Health Service patients and have always been happy with the service that we have received.
One fallacy that Opposition Members have offered us over and over again is that the relief that the Government propose, whether £40 million a year or £100 million, will not add to the total of health care resources available in this country. That is absolute nonsense. Not only is this relief more beneficial than a direct contribution of a like sum to the Health Service, but it will encourage many people who are approaching old age, who have perhaps had premiums paid through company schemes-- contributory or non-contributory--to carry on using the schemes.
I have just worked out a few simple arithmetic figures in relation to the money that may be available. If £40 million is the sum of relief that is likely to be allowed in the first year, even if, as suggested, 50 per cent. of that--£20 million--goes to higher rate taxpayers, it would bring in £50 million to the health insurance schemes. A further £20 million, based on 25 per cent., would bring in £80 million, which means that £130 million would be brought in. Even allowing for the 10 per cent. that BUPA finds it necessary to charge for administration- -£13 million--it would seem that £117 million would be brought into the totality of health care resources. Even if some of that is deadweight, there will still be a net benefit over and above the £40 million.
If we look at the figures based on £100 million, they seem much more impressive. Even if 50 per cent. is paid to those who pay 40 per cent. tax, £125 million will go into health care and £200 million will be brought in on the basic rate relief, which means that more than £300 million of
Column 786additional money will be brought into the total of health care resources. The deadweight in this case will be smaller because it will be taken up in the lower figure. The scheme would provide a most worthwhile contribution to resources.
The hon. Member for Clydebank and Milngavie (Mr. Worthington) talked about the contributions that consultants should make to the Health Service. I pointed out during his speech that not all consultants are contracted to the Health Service for 100 per cent. of their time. Many of them work part time for the Health Service, which is lucky for the Health Service because, in many cases, these people are eminent and bring excellence to the Health Service. They could devote 100 per cent. of their time to the private sector. The fact that they do not is a gain for the Health Service.
Comments have also been made that not only consultants contribute to private sector health care, but nurses and ancillaries. However, most of those people have opted out of the Health Service and are fully employed in the private sector. They often prefer the working conditions, if not the higher wages. Some nonsense has been talked about the drain on the Health Service that would be caused by the offer of this relief. I should like the relief to be extended beyond the elderly, but I recognise that my right hon. Friend the Financial Secretary will resist any such suggestion.
Much has been said about whether waiting lists have extended under this Government. Thirty years ago there was no waiting list for a hip operation simply because no such procedure existed. Procedures that have developed during the past 30 years have benefited the quality of life of elderly patients more than that of other patients. I welcome the clause which will allow many people, approaching or having reached retirement age, to continue to pay into private health insurance schemes and to enjoy treatment when it becomes necessary. Without any equivocation, I shall follow my right hon. Friend into the Lobby to vote for the clause.
Mr. Turner : The best contribution that we could make in this debate would be to show the country that the Government's claims that they are committed to the National Health Service are false. This is not an isolated measure ; it is part of the calculated attack on the National Health Service which began a couple of years after the Government came to power.
Wolverhampton's local authority and, I am sure, authorities in the greater part of the country know to their cost that from 1982 onwards the Government have been reluctant to invest the money that is needed in the service. In the past two or three years there has been a campaign of intense destabilisation of the NHS. The Government have invested in it, but they must have realised that they were not investing enough resources to meet the demands of hospitals. Throughout the past year people in my area, although desperately ill, have been turned away from hospitals. There have been deaths every week because GPs have not been able to admit seriously ill patients to hospital. There have been cut-backs in all the acute specialties. GPs, consultants and hospital authorities cry out that they cannot meet the demands made on their services. District and regional health authorities have been told that they must run services with the available money, even though they know that it is not enough to meet the need.
Column 787A fundamental question is are the Government truly committed to maintaining, supporting and cherishing the National Health Service? The answer must be no. This legislation and the coming White Paper in the autumn are all stages in the process of destabilisation and the creation of a two-tier health system.
A false premise lies behind most of the decisions and policies of the Government. It is to be seen not only in the Health Service, but in education and housing. The Government continually pursue division, trying to drive a wedge between people and pit them against each other. A Government truly acting for the people would try to nurture policies that would unify them.
Earlier in the debate I said something that must be true and with which Conservative Members must agree. We all shared the terrible grief at the tragic explosion in the Grand hotel in Brighton. Did any of the people who were taken out of that hotel and placed in ambulances ask which hospital they were being taken to--National Health or private? Did they ask what sort of treatment they could expect? The truth is that they were grateful to be taken to a hospital in which they would get immediate treatment.
I am not talking about people planning months ahead to have tennis elbow treated or a wart removed. I am talking about real illnesses--
Mr. Couchman : No one has ever suggested that the private sector can possibly replace all that is provided by the National Health Service. Why will not Opposition Members see the complementary nature of the relationship between the private health sector and the NHS? By relieving pressure on what is known as cold or non-urgent surgery, the private sector makes its most valuable contribution to the acute services of the NHS, so that people on NHS waiting lists wait a little less.
Mr. Turner : I contend that this measure does nothing but weaken the resources of the NHS, and that it will have no impact on the vast majority, who are taxpayers. Most people in Conservative Members' constituencies and in mine do not want to take out a subscription to BUPA or join a private medical insurance scheme. They want the Government to do what is necessary to build up the NHS, to which they contribute through their taxes week by week.
Most of the queues of patients waiting for treatment are not affected by the clause. It is another signpost on the route which leads to further divisions between people and creates more disunity in the NHS--even though the measure is claimed to assist people over the age of 60.
The good news is that this will not wash. I should have thought that by now Conservative Members would have understood from what happened last week and from what people tell us every day that the country wants a National Health Service for everyone, and wants the Government to commit the resources to make that possible. This Government will not do that, but at the next election we shall return a Labour Government who will do what is necessary to reunite the Health Service and give a better deal to all who are ill.
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I shall comment on several of the points made by the hon. Member for Wolverhampton, South-East (Mr. Turner), whose sincerity I accept. The argument that he adduced about our having attacked the NHS in the last 10 years will not wash because, as the Prime Minister pointed out earlier today, for every £1 that was spent 10 years ago, £3 is spent now. That cannot be described as an attack on the NHS. The hon. Gentleman would do the Committee a service if he would investigate the issue and establish the pressures on the NHS which make it important for us to get extra funds into the service, and achieving that, at least in part, is an aspect of the discussion we are having now.
The hon. Gentleman spoke about what he called a hidden agenda for privatising the NHS. He is not alone in saying that. Many doctors are saying it to their patients. If he looks with sincerity at what is being said on this issue by Conservative Members, he will find that there is precious little argument in favour of privatisation. Many Conservative Members have no health insurance and have relations working in the NHS--my wife is a junior hospital doctor--and have a tremendous love and abiding respect for the NHS and those who work in it. I assure the hon. Gentleman that privatisation is not on the agenda. If he is talking about mounting a campaign on the subject, I will join him on the barricades, but it is a non -issue. The hon. Gentleman talked about our determination to weaken the NHS, for example, by the clause that we are discussing. But in the next breath he said that for the vast majority of our constituents the legislation would have no impact. It is important to recognise that hon. Members in all parts of the Committee want the NHS to be expanded and improved. Opposition Members are making heavy weather of the clause. It is not a major part of the Budget or the health review. It will make a modest contribution and have a beneficial effect at the margin.
As I reflect on correspondence that I have received in the last two years from constituents who will be affected by the clause, I think of the position of those who leave their firms and retire, having had the benefit and protection of a good health scheme while they were in employment, only to be exposed on retirement to the full market cost, at a stage in their lives where premiums rise steeply. As I say, this is a modest proposal which will go some way to alleviating the problem of that group of people.
My hon. Friend the Member for Gillingham (Mr. Couchman) said that the clause would be helpful to the NHS because it would remove responsibility for some elderly people, an area of care which is rapidly expanding. We appreciate the problems that are caused by the increase in the number of elderly people in the population. Magnificent medical advances have meant that many of our elderly constituents are living longer.
The measure that we are discussing will make substantially more money available for the NHS at a time when the NHS is battling to help as many elderly people as possible--because many thousands of people will take advantage of the form of insurance, thereby taking themselves out of the NHS.
Column 789We have reached the stage when much of the care of the elderly already occurs in the private sector. I hope that Labour Members will get rid of the absurd shibboleth they have about private medicine. I put it to Labour spokesmen that perhaps in the next review of policy following the next general election, when they are considering the reasons for their defeat, they might put their attitude towards private medicine on the agenda for discussion at that time. We are discussing a sensible proposal, but it seems to contain a small illogicality. If elderly people are to receive tax relief for an insurance premium, why should they not receive tax relief on medical bills that they pay themselves?
Having voiced my concern about that one illogicality, which I hope the Minister will examine on a future occasion, I support this proposal, which will make a modest contribution, and the effect of which will be entirely beneficial.
Mr. Battle : It will be widely accepted in all parts of the Committee that there is deep uncertainty and unease about the Government's intentions for the future of the NHS. Perhaps that is because historically the service has not been with us for all that long. Many people remember what it meant to have to arrange to pay for the best of health. Because of that, people are worried lest, before the system has been developed to its absolute best, the Government try to privatise it.
Throughout the debate we have heard Conservative Members try to argue both ways. On the one hand they say that they are fully committed to the NHS, and on the other they agree that they are committed to the principles of private health care. That is particularly demonstrated, we argue, when measures to support private health care undermine the NHS. The Financial Secretary must tonight spell out whose intentions lie behind the clause. Has what is proposed been squared with the Secretary of State for Health? Is it just a Treasury device that fits into the Finance Bill? Or is this simply the prejudicial preference of the Prime Minister?
Although the hon. Member for Gedling (Mr. Mitchell) said there had been little argument in favour of privatising the NHS, shortly before he came into the Chamber I heard the hon. Member for Maidstone (Miss Widdecombe) try to make the case for a full blown medical insurance tax relief system, which I regarded as an argument for displacing, if not replacing, the NHS.
Others have tried to soften the blow by suggesting that the measures in the Budget are about helping pensioners. That is surprising when one recalls that the same Treasury spokesmen deal with the DSS, and later I shall speak about the way in which they have dealt with pensioners, not least by not uprating their pensions properly and by reducing the rates of housing benefit.
The general public are no longer sure whether the Government intend to shift health to the private sector, leaving behind only a residue of the NHS that we have known, or whether they intend genuinely to defend and extend the service.
The Chief Secretary said that the Government had no intention of going further than the clause in supporting tax relief for private health. I take assurances such as that with a pinch of salt because I remember, for example, the promises in the Conservative election manifesto to the effect that the child benefit level would be paid "as now". We discovered that that was meant literally, and therefore has been frozen for two years. We cannot rest secure in the