House of Commons Hansard Debates for 12 Jul 1989

New Clause 4

Private medical insurance (No. 1)

(1) Notwithstanding the provisions of section 56 concerning certification of contracts, premiums paid under such contracts shall be eligible for relief under section 54 whether or not the costs which are the subject of the indemnity in the contract relate only to charges levied by a certified provider.

(2) For the purposes of this clause a certified provider is either :

((a) the National Health Service, or

(b) a person providing treatments and medical services who (

(i) undertake training of staff to a standard which is certified by the Department of Health to be at least comparable to that provided within the National Health Service,

(ii) when recruiting and employing staff trained within the National health service make a payment to the NHS to reimburse that service for the full cost of the training provided, and

(iii) are certified by the Department of Health as providing a full range of treatments and medical services for the elderly. (3) An annual report shall be made by the Board distinguishing relief available in respect of certified contracts covering certified providers.'.-- [Dr. Marek.]

Brought up, and read the First time.

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Dr. John Marek (Wrexham) : I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean) : With this it will be convenient to discuss new clause 10-- Private Medical Insurance (No. 2)--

(1) Notwithstanding the provisions of section 56 concerning certification of contracts, no premiums paid under such contracts shall be eligible for relief under section 54 unless the costs which are the subject of the indemnity in the contract relate only to charges levied by a certified provider.

(2) For the purposes of this clause a certified provider is either :

(a) the National Health Service or

(b) a person providing treatments and medical services who : (

(i) undertakes training of staff to a standard which is certified by the Department of Health to be at least comparable to that provided within the National Health Service,

(ii) when recruiting and employing staff trained within the National Health Service makes a payment to the NHS to reimburse that service for the full cost of the training provided ; and

(iii) are certified by the Department of Health as providing a full range of treatments and medical services for the elderly.'.

Dr. Marek : New clause 4 seeks to tighten up some of the handouts and giveaways that the Government propose with their tax relief on private medical insurance.

When the tax relief was hinted at in the Budget it came as a great surprise to the Opposition. That relief is contrary to the principles and statements that I have heard in Committees considering Finance Bills. It is certainly

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contrary to the principles that have been espoused by the Financial Secretary to the Treasury and by the Economic Secretary to the Treasury. They know that there is only a small difference between the way in which the Opposition would tackle the reform of certain parts of taxation and the way in which they have done it. We are completely at a loss to understand the introduction of tax relief on private medical insurance. The only explanation is that they have had their orders and that, faithful to their mistress, they have simply jumped to it and ordered their civil servants and the parliamentary draftsmen to allow her to get her way once again.

I shall not be accused of not telling the truth when I say that that tax relief is not wanted by the Treasury. For the life of me, I cannot perceive the principles that allow the Treasury to include this relief in the Finance Bill. The Financial Secretary will be replying to this debate, and we and people outside will want him to explain why that tax relief should be in the Finance Bill ; after all, Government Members will have to vote for it later.

This tax relief is contrary to many of the financial principles that have been espoused by hon. Members on the Treasury Front Bench in recent years. It is also a dangerous proposal as it represents part of the scheme to break up the National Health Service. This afternoon we had a statement on the Griffiths report ; it is difficult to say what the outcome of that statement will be in the long run. No doubt it will depend on the amount of money that the Government make available for the proposals that the Secretary of State for Health outlined. If the money is not there, however, it is likely that that part of the Health Service connected with community care will suffer and wither away. What is left will provide a second-class service for people who depend on the NHS while a first-class service will be provided in the private sector. The Government's proposals on medical insurance will play their part in that as tax relief will be given to people who have private medical insurance.

Mr. Ian Taylor (Esher) : The argument has been rehearsed in Committee. The hon. Gentleman should know that that tax relief does not mean the destruction, or even a move towards the destruction, of the NHS. In a sense the proposals are a means of strengthening provision to elderly people across the board by enabling those people, many of whom have already opted for private health care, to continue it during their retirement. It is an wholly interesting proposal and I am sure that the Treasury is as enthusiastic for it as are my hon. Friends on the Back Benches.

Dr. Marek : The Treasury will have to speak for itself in due course. Many hon. Members are extremely concerned about those proposals. New clause 4 would make the operation of those proposals more open and more available to the public for scrutiny.

If many people are already paying for private medical insurance, as the hon. Member for Esher (Mr. Taylor) suggested, what is the point of giving them further money in the form of tax handouts from the state purse? The hon. Gentleman cannot argue that the relief is an incentive to take out private medical insurance if people have already done so. From figures available to me it is clear that only 2.6 per cent. of pensioners are paying the 40 per cent. tax rate. It is those pensioners who will receive the greatest tax handout as they pay the highest rate of income tax.

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We have a deep-rooted objection to the proposals in the Finance Bill. We tried to defeat the relevant clauses in Committee, but the Government had a large majority and we did not have a chance. It was impossible to effect any opposition.

Even though I suspect that at the back of their minds and in their hearts many Conservative Members realise that this runs counter to many other policies in the Finance Bill, they are not prepared to stand up and say so. They are not prepared to say, "We have had to do this simply because the Prime Minister has decided for some reason or another that this tax handout is to be given to the rich and the super rich." I say that because the Financial Secretary would be disappointed if I did not use that form of words at some time while proposing the new clause.

If the proposals are not available for the public to scrutinise, a great deal of money will be given away, the public will be none the wiser and an activity that we believe to be dreadfully wrong will be carried out from year to year without public scrutiny. The new clause would prevent that. We seek to expose what is happening because we believe that the National Health Service is about to be broken up. We believe that not just because of the proposals that we heard this afternoon, but because of the Government's proposals in relation to the elderly and mentally ill, hospitals being able to opt out of the National Health Service and doctors being able to run their own budgets. Our worry is compounded by these proposals because people who take private medical care and opt out will receive tax handouts.

Mr. David Curry (Skipton and Ripon) : Does the hon. Gentleman accept that by repeating the words "opt out of the NHS" he is deliberately misrepresenting the Government's proposals? Hospitals are being invited to opt for self-governing status within the NHS. Will he cease to perpetrate this myth, which is carried on in the media and forms part of a campaign that simply misrepresents the Government's proposals? Can he not see that there is a distinction between hospitals governing themselves and being governed by their own management within the system and the "opt out" to which he refers? It does him no credit to keep perpetrating this myth in the hope that eventually it will be repeated, parrot-like, across the country.

Dr. Marek : For every time that the Opposition can be accused of trying to mislead the public, they can levy the charge 10 times against the Government for using selective statistics or figures. They start in 1979 when it suits them, or in 1983 when 1979 figures are not so suitable, or they use those for the past two or three years when 1979 or 1983 figures are unsuitable.

The Economic Secretary to the Treasury (Mr. Peter Lilley) : The hon. Gentleman admits to misleading the public.

Dr. Marek : I do not admit to trying to mislead the public, as the Economic Secretary suggests ; I am being accurate. Hospitals will opt out of an integrated National Health Service that is free at the point of need. If they become self-governing, the cheque book mentality will come to the fore. But I shall not pursue that line because I could stray a little too far from the new clause, although

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that would ensure that any of these activities is open to public scrutiny and scrutiny by the House and that annual reports will be prepared.

The problem with medical tax insurance is that people must be rich enough to afford it. If they do not pay income tax, the Government will not give them anything. If they pay only a little bit of income tax, they will not receive much. They have to be rich to be able to afford to take advantage of the Government's proposals. The richer one is, the better off one will be. The Government's philosophy is that, to those who have shall be given.

Not only do people have to be rich enough, but they must be well enough to sign up. If they are chronically ill or have a bad medical history, no insurance company will take them on. It is yet again to a small class of people that this Government seek to, and will, give money from the Treasury which could well be spent elsewhere. We are being asked to subsidise, from our taxes, the private medical insurance of people who are already wealthy enough and who, by and large, already pay for private treatment without the need for subsidy.

Our new clause would constrain the Government by making them open their books and to account publicly for how the money will be given away. It also makes them justify the scheme's operation.

Mr. James Couchman (Gillingham) : The hon. Gentleman has just talked about people who are "wealthy enough" and do not need the help offered under the Government's proposals. He will be aware that old-age pensioners receiving state pension use almost all their age allowance with the state pension. Anyone who has a modest occupational pension or even earnings above that level will pay income tax at the standard rate and will therefore benefit from the proposals. By no stretch of the imagination could those people be called wealthy.

Dr. Marek : Exactly--there is much sense in what the hon. Gentleman has said. People with small occupational pensions, who, I agree, are certainly not wealthy, will not have enough money to take out private medical insurance and still have enough left for their daily needs and to be able to lead sensible lives in their old age. Those people are not the targets of this tax handout and giveaway. The targets are those who are much wealthier than people with ordinary occupational pensions. I hope that the hon. Gentleman understands that point. Of course, it is possible for people who are paying income tax to benefit from this tax handout by obtaining private medical insurance. However, I suspect that people in those circumstances will be able to say, "I am sorry. The money that we have available at our disposal at the end of every week is insufficient for us to afford the luxury of private medical insurance." They could rightly say, "We shall stick with the National Health Service."

Mr. Nicholas Bennett (Pembroke) : The hon. Gentleman uses the terms "rich" and "super rich". For those of us who have not had the advantage of serving on the Committee, will he define those terms? Which level of income constitutes "rich" and which "super rich"?

Dr. Marek : The hon. Gentleman must sign up, become a member of the next Finance Bill Committee and take part in our discussions. The question that he posed has

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been asked before. I shall disappoint the hon. Gentleman if he thinks that I am about to give a cast-iron definition so that people with a penny less than the sum stipulated will not be in the super rich category and those with a penny more will definitely be in it. He must take me for being slightly naive. Perhaps I am sometimes, but I am not naive enough to give such a definition.

Some people are extremely rich and have so much money that they do not know what to do with it. They cannot even find out how much money they have. There are people in this country who do not know how much they are worth. They have millions of pounds--or at least hundreds of thousands of pounds-- of ready, available liquid assets over and above any insurances, houses or property. They would fall into the class of the super, super rich. There are people who are not in that class, but I shall not take up any more of the House's time with that definition. I hope that I have been able to educate the hon. Member for Pembroke (Mr. Bennett) a little.

The Opposition object to the proposals because they represent bad taxation policy. There is no case for them. Hon. Members need only to cast their minds back to debates in Committee and yesterday when pleas were made for concessions. Hon. Members from both sides of the House said that this was not the right way to run a fair tax policy with a level playing field. The Opposition would be the first to say that, in some circumstances, we would not want a level playing field, but there must be justifiable reasons for it. Those reasons do not exist in this case.

For private medical insurance to receive tax relief is clearly against every principle that the Financial Secretary and the Economic Secretary espoused in Committee. It is the equivalent of the Financial Secretary going to Lord's on a dark night and digging up the cricket pitch. He had a level playing field but has now decided to roughen it up so that it slopes upwards and forces those without money to bowl uphill, whereas those with money can bowl the other way. That is a reasonable analogy for what the Government are doing. The new clause would also bring under public scrutiny the point that the relief is not well targeted. Instead of targeting those who need more medical care or medical insurance, the Government are targeting those who can stay with the NHS or who already have money and do not need extra handouts. The Financial Secretary does not have up his sleeve an argument to contradict what I have just said. We accept that benefits have to be targeted, and we have listened to the Secretary of State for Social Security, the Secretary of State for Health and other Ministers tell us that every benefit must be targeted so that relief goes to those who need it. However, there is no targeting with this provision. It is a straightforward handout to people who have money and are already using it for medical insurance. There is no incentive argument or targeting argument for it.

Mr. Nicholas Bennett : The same argument applies to child benefit. Why is the Labour party opposed to targeting child benefit and taxing that?

Dr. Marek : I do not want to stray too far, but I can answer the hon. Gentleman. There is a difference with child benefit. It goes to the mother, there is a 100 per cent. take-up and, although the targeting is not perfect, it is not bad. The targeting percentage score for child benefit is between 60 and 80 per cent., but for this measure it is zilch.

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We should like to bring under public scrutiny the fact that if anybody wants family credit or income support, he has to fill up forms and be interviewed, and snooper squads come round to his house if there is any hint of impropriety or if a jealous neighbour tries to get his own back. The full panoply of state supervision and state regulation, and the overburdening authority of the state, are put on those people by the Government and the Conservative party. However, if one wants private medical insurance, one need only send a little note to one's accountant and he will fix everything. There are no snoopers and no reams of forms to fill in. It is all straightforward. One does not have to appear in a social security office, wait in a long queue and waste a morning to get one's entitlement. The philosophy is completely different. That is another difference between the Government's attitude towards income support and family credit and their attitude towards this measure.

Mr. Couchman : I thank the hon. Gentleman for his generosity in giving way again. On this point, will he concede that there is a difference between making an allowance against income tax--that is, not taking away so much income tax--and distributing public funds by way of income support, which is distributing new money to the recipient? The hon. Gentleman said that there would be no snooping, but the Inland Revenue takes a healthy interest in our tax affairs, and if it has any suspicions, I am sure that it will be there just as enthusiastically as would be the Department of Social Security investigating team in other circumstances.

Dr. Marek : I hope that, if the new clause is passed, some of the reports that will be produced will bear out my point. If the Government appointed enough income tax inspectors so that the Inland Revenue could take proper control over those whom it thought were fiddling income tax returns--most of whom have something to do with the City--it would be more efficient. I know that most people in the City are honest, but some are not and they fiddle enormously large sums. Furthermore, if income tax inspectors were paid properly, they would not fly off to private industry as they do because of the Government's Scrooge-like policies.

On the hon. Gentleman's second point, the only difference is administrative. The effect of giving money, either as a tax allowance or as a grant, is to ensure that people can lead decent and dignified lives. Whether people receive that money by way of tax allowance or by way of grant from the Department of Social Security is neither here nor there. There is no effective difference. I hope that the hon. Gentleman will think about that. We have to treat people on the same basis even though the circumstances of some people are different from those of others.

I have here an important figure on which I hope that some of my hon. Friends will expand later : two thirds of pensioner households pay no income tax. Therefore, they will not benefit from these tax handouts. Only 2.6 per cent. of pensioners pay the top rate--40 per cent.--of tax. Only 2.6 per cent. of pensioners will benefit from this measure. It will be worse than that, because pensioners do not have to pay for these benefits. Often their yuppie children will pay for them, so this measure is a licence to allow a yuppie who wants to to pay money for the care of his or her elderly parents.

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The Financial Secretary to the Treasury (Mr. Norman Lamont) : Why does the hon. Gentleman think that it is impossible for non-taxpayers to benefit from what is in the Bill?

Dr. Marek : It is not impossible. I have not examined the statistics, but I think that I am right to say that, by and large, pensioners who do not pay income tax cannot pay income tax and are not in a family group with yuppies so rich that they can pay for private medical insurance. I am prepared to be persuaded by the right hon. Gentleman, but he will have to see whether his civil servants can provide any statistics for his assertion. I think that they probably cannot.

We are against these proposals because treatment in the National Health Service is much cheaper than treatment in private hospitals. I can give a simple example. In the NHS, the cost of a tonsillectomy is £360, but the private cost can be anything from £600 to £1,400. This tax relief is aimed at the wrong target. Instead of using the money by way of tax relief, it should be given to the NHS so that it can provide for the medical welfare of our old-age pensioners direct, and when they need it.

We have tabled the new clause because we object to the original proposals and we want to make sure that the results of the clauses that the Government insisted should be included in the Bill are open to public scrutiny in due course. The sum involved is large--the Treasury suggests £40 million, but we suspect that it will be about £200 million. Some people suspect that it is an open-ended commitment.

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I hope that the Government will recognise our need to be given the details of the scheme. Without those details, the new clause was restricted to providing that an annual report, covering various matters, should be made by the board. The Chief Secretary wrote to my hon. Friend the Member for Dunfermline, East (Mr. Brown) on 6 June, enclosing a copy of a letter to medical insurance companies asking for details of how the proposed scheme would operate. I believe that a copy of that letter has now been placed in the Library. There are some curious aspects to the scheme. For example, treatment must take place at an NHS hospital, at a hospital instituted by a special Act of Parliament or incorporated by Royal Charter, or at premises registered under part II of the Registered Homes Act 1984. Does that mean that the public will be giving tax handouts to rich people staying in registered old people's homes? What is the substance of the Government's argument? Is the scheme supposed to be some sort of incentive? Earlier today the Secretary of State for Health said that, wherever possible, old people should be in the community. The proposals are contrary not only to previous Treasury policy, but to the policy of the Department of Health. I am glad to note that there will be some rules and regulations on qualifying benefits. According to the consultation document, accommodation charges will qualify, including those for parents accompanying a child. Home nursing charges will also qualify. The only people who will benefit from that are the very rich, who would have home nursing anyway and do not need to be given a cash handout as a little sweetener. There will be a cash maternity benefit. It is surely no part of the state's job to give cash handouts to people who want to insure against

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maternity. Of course, it is part of the state's job to ensure that there is adequate maternity and paternity leave for all, irrespective of wealth. Parents should be able to bear a child without hardship. A proposal to give a cash handout to the rich people who want to insure against maternity shows the Tory party for what it is, who its friends are, what its priorities are and who it supports. When we consider other amendments later, I might adopt a different tone because some of the Government's amendments are helpful. However, the medical insurance clauses are ill-advised, ill-thought-out and badly targeted because they serve only the rich. The Government have not even drawn up the regulations. I commend our new clause to the House.

Mr. Kenneth Hind (Lancaster, West) : As is usual in these debates, the Opposition have shown a mindless objection to anything that smacks of individual initiative or of benefit to those prepared to put their hands in their pockets to pay for it. Underlying the Opposition's arguments is their fundamental objection to private medical care. They will oppose any measure, no matter who it benefits, on that principle alone.

I wish to raise one important aspect of our health care. Britain's health spending in the public sector is comparable to that of most European Community and OECD countries. However, on health spending in the private sector Britain is a long way behind. The Opposition forget that, in general, the two expenditures are added together, so they criticise the Government and claim that other

countries--especially West Germany--spend far more than Britain. The Bill will help those in need to redress the imbalance by increasing the amount of private health spend and so provide a more realistic view of our overall health spending. The medical insurance clauses prime pump additional resources into Britain's health care facilities and will attract resources that otherwise would not come into the system. Without those additional resources, the cost of providing health care for the elderly would fall entirely upon the NHS and the taxpayers who fund it. It could even reduce the overall standard of care for all in our community.

Currently 14 per cent. of the population are old-age pensioners, but by the year 2010 the figure will rise to 18 per cent. With that demographic change will come heavier demands for the care of the elderly, especially home and hospital care and community care as a whole. The Bill will assist the provision of future health care for the elderly. Fewer people will be earning a wage by the year 2010, so fewer people, through tax and national insurance, will have to carry the burden of supporting a larger number of pensioners. The Bill looks to the future and provides sensible planning to meet future needs.

The new clause is an attempt to disrupt the Government's plans--

Mr. Couchman : It is a wrecking amendment.

Mr. Hind : My hon. Friend is right ; it is purely and simply a wrecking amendment. The Opposition want to make it as difficult as possible for the Government to give the elderly an opportunity to benefit from private health care. The major aspect of this wrecking amendment is the annual report by the board

"distinguishing relief available in respect of certified contracts covering certified providers."

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As usual, the Opposition are suffering from quangoitis. They want to set up a national body to administer the system, but to restrict the number of people who can provide health care by confining it to certified providers. The Opposition's usual tactic when they cannot defeat an argument because of its intellectual soundness is to try to wreck it by introducing unworkable practices.

The Opposition's new clauses ignore those elderly people who, when they retire, will find that it is far more costly to obtain medical insurance. I emphasise the word "insurance" because it carries with it a risk. The older one is, the greater the risk and the higher the premium--and the less likely it is that people will enter into such a contract. New clauses 4 and 10 will allow people who want private health care to invest in it if they have the means to do so, and at the same time assist the state in providing increased resources. My experience as a constituency Member of Parliament is that many people who have enjoyed private health care all their lives find it disheartening that they cannot afford it when they grow older. The new clauses, together with the increase in the number of pensioners and other demographic changes, will not help to provide good health care for the older members of the population.

The Opposition amendment adds nothing to the Bill. It is not helpful but rather attempts to undermine the Government's proposals. I have no hesitation in saying that my right hon. Friend the Financial Secretary should see the Opposition amendment for what it is and dismiss it.

Mr. A. J. Beith (Berwick-upon-Tweed) : Although the hon. Member for Lancashire, West (Mr. Hind) may speak sincerely on behalf of the elderly, he allowed himself to present a series of fallacies. One is the belief that it is impossible to be in favour of private health care and opposed to the provision of tax relief as an incentive to subscribe to such care. That is manifestly not the case. Even people on the Right among those who advise the Conservative party are in favour of private health care but do not believe that the tax system should subsidise it.

Similarly, it is not the case that we welcome the clause. The Social Services Select Committee, which has a majority of Conservative Members, commented in its fifth report :

"In our judgment, the creation of new tax subsidy on 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."

There are many critics of the Government's proposals in all parts of the House, and the authorship of those proposals is the subject of some discussion and dispute. To me, they are the Dulwich clauses, based on the Prime Minister's concept of retirement and of how she and her husband will be able to provide for their own. The clauses are not based on the perspectives of most ordinary people, on how they must provide for retirement, and on their dependence on a properly funded National Health Service.

The vast majority of people depend on a properly funded Health Service. If any money is available for health care, they want to see it invested in the Health Service, yet at the time when the NHS is under considerable pressure the public can see money being diverted to subsidise those who are able to take advantage of private health insurance.

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Mr. Nicholas Bennett : The hon. Member for Berwick-upon-Tweed (Mr. Beith), like the hon. Member for Wrexham (Dr. Marek), who has left the Chamber, speaks in vague terms about a "properly funded Health Service". Given that there has been a 40 per cent. increase in real terms in Health Service spending since 1979, what percentage increase does the hon. Gentleman think would have been appropriate, and what is his party's projection for the future?

Mr. Beith : In our last general election manifesto, we said that a 2 per cent. increase in Health Service resources is required over and above that projected to meet the immediate pressures on the service. The Social Services Committee presented its own proposals for further funding of the Health Service. The hon. Gentleman cannot go anywhere in the National Health Service without finding people who are well aware that it cannot be properly run without additional resources. If the hon. Gentleman cannot see that, he is blinding himself to the obvious.

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The resources that the Government are currently directing at the Health Service cannot keep pace with the considerable pressures that it faces, which include the increasing number of elderly people--the vast majority of whom are dependent upon the NHS--and the opportunities and demands that improving medical technology create, and of which we are all aware from our constituency case work. They all place on the Health Service a funding requirement that the hon. Member for Pembroke (Mr. Bennett) must be alone in not understanding.

Treasury Ministers in particular have some difficulty defending and explaining the proposals to which new clause 4 are directed. I am sure that in the Prime Minister's mind they are the beginning of a process whereby the private sector will be asked to bear much greater responsibility for the health of the people, based on the mistaken assumption that the private sector is capable of meeting that responsibility. I am not saying that the private sector cannot contribute to the country's health care, but it will inevitably select those activities that are most profitable and which best fit its framework. That will create even more work for the public Health Service. The more that the private sector can contribute to an increase in hip operations, for example, the more aftercare will have to be undertaken by the public service.

Treasury Ministers have moved to a different standpoint. They argue, as suggested by the hon. Member for Lancashire, West (Mr. Hind), that the clause is much more limited in scope and will assist only those elderly people who already have private health insurance and who will find it difficult to continue to meet that commitment when they reach retirement age. If that is the Government's objective, they could have drafted the clause more narrowly, which was the purpose of my earlier amendment. It is difficult for the Government to sustain that argument while maintaining the deadweight argument against other proposals.

Last night, the House debated child care and workplace nurseries. I presented an amendment to provide tax relief for workplace nurseries and for wider child care provisions. The Financial Secretary responded :

"I have to reject his new clause on the grounds of cost and of its very large deadweight element The effect of the new

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clause would give a large tax subsidy to people who are already making this provision."--[ Official Report, 11 July 1989 ; Vol. 156, c. 896-97.]

That is the same argument that the Chief Secretary to the Treasury used to defend the provisions of the Bill. He commented : "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."--[ Official Report, 4 May 1989 ; Vol. 152, c. 351.]

The clause apparently exists to help people who already make provision for private health care to continue doing so. It will also benefit many who do not suffer from the particular disadvantage to which the Chief Secretary referred, of starting in an employer's scheme and then finding on retirement that they no longer benefit from the employer's contribution.

The Government cannot have it both ways. They oppose tax reliefs that have a high deadweight cost because they give a subsidy to people who are already making their own provision, and then argue that the clause's primary purpose is to give just that type of relief. That is a nonsensical argument for the Government to make, and it illustrates that Treasury Ministers are being forced to adopt the Prime Minister's baby.

Mr. Hind : Does the hon. Gentleman agree that private medical care, with tax relief for pensioners, will be a pump-priming measure that will attract greater resources into the totality of our Health Service, both public and private, and that that will not happen unless the clause is implemented? The cost of providing extra health services will otherwise fall on taxpayers overall. The clause will help to improve the standard of health care, not the reverse.

Mr. Beith : I have never heard Treasury Ministers argue that the purpose of the clause is pump priming--that its objective is to enlarge the private health sector through the use of a public tax-relief subsidy. Perhaps they will decide to introduce that argument tonight. The Financial Secretary shakes his head : clearly he does not accept the pump-priming argument. In his view, the measure will help a limited number of elderly people who have already made commitments. The right hon. Gentleman would find it difficult to extend the pump-priming argument, because he must be aware--if he were not, I suspect that the Department of Health would have made him aware--that, far from reducing the total burden on the Health Service, the legislation is likely to increase it. In so far as it has any benefit, it will leave the most expensive kinds of provision in the hands of the Health Service. The Health Service will still be picking up the tab for all the tasks that the private sector cannot perform--all the long-term care, aftercare and residential care--and possibly adding to the volume of work.

Sir William Clark (Croydon, South) : The Health Service--in other words, the taxpayer--is doing precisely that now. The scheme to provide medical care for the elderly is intended not only to help the elderly, but to take some of the burden away from the National Health Service. It will mean more resources for the NHS, because some elderly people will take advantage of private health care.

Mr. Beith : It will not take the burden away from the NHS. It will take away staff who already do the work in

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the NHS--consultants who perform operations, and a work force that the NHS has trained--who will then be used to carry out a much more limited range of functions. The NHS will be left to provide aftercare for the same patients, and to care for all those for whom the private sector has made no attempt at provision.

All the publicity for private health care makes it pretty clear what cannot be obtained from it. It is obvious from a reading of that literature that the private system will be highly selective in what it offers. Many of those who work in the Health Service know full well how they could enhance the service if they had either £40 million or the much larger sums that may go into this form of tax relief in the future.

If Conservative Members really believe that the burden on the Health Service would be reduced by extensive tax relief for private care, they will not stop the pensioners ; tax relief for private health care will become a general provision. I hope that the Minister will deal with that. His hon. Friends' case is that the measure will relieve the NHS of its burden so effectively that the effects will be seen most clearly where the burden is lighter. If the Minister accepts that argument, he will have to explain what further plans the Government have to extend tax relief throughout the system rather than confining it to the elderly. [Interruption.]

I hear hints that some Conservative Members may wish the Government to do that. If they took such a step--which many of us believe to be in the minds of some of their members, if not those of Treasury Ministers--they would deal a terrible blow to the Health Service and its morale. They would also convince the majority of people that they believe in a two-tier Health Service, with a private system for those who can afford it and a public system for the rest--the rest being the majority, who will be expected to accept second best. Those who work in the Health Service do not want to give second best : they are capable of, and have given, the very best, and they are entitled to the resources that they need to provide that level of service.

Mr. Couchman : I had not intended to speak, but I have listened with a growing sense of wonderment to the blind prejudice and dogma emanating from the other side of the Chamber. It was ever thus. It is worth reminding Opposition Members that it was Barbara Castle, when she was Secretary of State for Health and Social Security, who killed off paybeds in the National Health Service--no doubt with the support of every Labour Member who is present now. They would have seen them all go ; and very few are left.

Mr. Tony Worthington (Clydebank and Milngavie) : Will the hon. Gentleman give way?

Mr. Couchman : No, I will not give way so early in my speech. The new clause defines a certified provider as the National Health Service, but there is little private practice in NHS hospitals : that, of course, is the point of this wrecking measure. Subsection (2)(b)(i) goes on to give the extraordinary definition of a certifed provider as someone who will

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