House of Commons Hansard Debates for 12 Jul 1989

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"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".

What staff? Nurses? Doctors? Paramedical staff? Porters? The new clause does not say, but I think that the royal colleges, which determine the appropriate places in which training can take place, might well have something to say.

Subsection (2)(b)(ii) provides a further definition : a person who will,

"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".

Will that apply for ever? If a nurse has given 30 years of service to the NHS and, in her twilight years of nursing, decides to do some work in a private hospital, will that private hospital then have to reimburse the NHS for the full cost of her training 30 years previously? What nonsense. It is blind prejudice and dogma--but what else would one expect?

What the hon. Member for Berwick-upon-Tweed (Mr. Beith) said was not much better. He talked in a rather pejorative way abut the "Dulwich clauses". That, of course, is the kind of slogan that would appeal to the Liberals-- or are they the Liberal Democrats, the Democrats or the Social and Liberal Democrats? Anyway, it would appeal to whatever party the hon. Gentleman currently supports.

Mr. Worthington : Will the hon. Gentleman give way?

Mr. Couchman : Certainly not. I have not got into my speech yet. I said earlier, when the hon. Member for Wrexham (Dr. Marek) generously gave way to me, that it was not the rich who would primarily benefit. Many people, until they reach the age of 60 or 65, are members of private health care insurance schemes, for which they may pay under a company scheme or which may be paid for by the company. Alternatively, they may purchase individual health care insurance. When they reach the age of 60 or 65, their income drops and their ability to pay for private insurance becomes that much less. An allowance such as my right hon. Friend proposes would provide precisely the incentive that many such people need to continue paying for private health care insurance when they have retired. They have made their contribution through national insurance and income tax, and they will continue to contribute if they continue to pay income tax, as part of that tax funds the NHS. They are only being given back some of their own money.

The elderly, after all, make the heaviest use of health care generally, and private health care resources provide many of the services that enhance their quality of life--cold surgery, hip operations and so forth. It relieves pressure on the NHS at just the point where the pressure is greatest and the waiting lists are longest.

I shall have no difficulty in supporting my right hon. Friend and rejecting the silly, dogmatic ideological prejudice expressed in this new clause.

6 pm

Dr. Lewis Moonie (Kirkcaldy) : I had not intended to refer to the speeches of the hon. Members for Lancashire, West (Mr. Hind) and for Gillingham (Mr. Couchman), and my generally charitable nature will lead me to forbear from commenting in this instance. They may, however, wish to intervene during my speech in order to make the

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same idiotic points as they have already made, using the ludicrously constructed briefs that they have obviously had from the Whips Office.

Mr Hind : Will the hon. Gentleman give way?

Dr. Moonie : No, I shall not give way on that point.

This is one of the least popular and least needed measures in this Finance Bill. The Government are proposing to give a large handout from the Exchequer to suppliers of private medical care, with no requirement being placed on them to account for how the money is spent. The new clauses are a very small attempt to remedy that failure.

Let me explain the reason behind those statements. The proposed tax break will be given to individuals or their relatives, regardless of need. The intention is to encourage more people to take out private health insurance, despite the fact that there must be a large question mark over the advisability of using public funds to entice people to make such a choice, one which they have clearly been free to make up to now but which they have chosen not to make. It surely cannot be a sound use of public money to prop up an expensive and unattractive service.

Moreover, a huge deadweight cost is involved--a tax break of up to £200 a year for all those currently holding such policies who, by definition, can afford to pay the premiums and who are healthy. If they are not healthy, they will not be covered by private medical insurance. Why on earth should we be spending taxpayers' money on people who are healthy and wealthy and who are so manifestly not in need of such help?

As my hon. Friend the Member for Wrexham (Dr. Marek) has made clear, we cannot believe that the Treasury Ministers favour such a stupid move. It is against all the principles of fair taxation and also of those principles that are involved in constructing a broad tax base. Where will the money go? Health care is expensive, especially in the private sector where it is up to four to five times dearer than in the National Health Service. Premiums have risen at a fantastic rate over the last few years. They will rise even faster, now that the Government are to subsidise up to 40 per cent. of the cost. Can any Conservative Member deny that that will be the case? It has been so in every other instance where the Government have stepped in to subsidise private insurance. Instead of the money being used to benefit the individuals concerned, it will go directly or indirectly into the pockets of those who provide health care through increased premiums.

Private medicine does not pay the true costs of the service that it provides. It is not complementary to the National Health Service. It exists in a parasitic relationship with the public service, preying on its skilled staff--nurses, laboratory technicians, scientific, medical and paramedical people, to name the main areas involved. All these staff are trained within the National Health Service. Their training is paid for out of the public purse. All the staff are either in short supply or need to be employed in much greater numbers within the National Health Service to make up for the disgraceful shortages that exist in so many areas.

The statement on community care that was made earlier today, which I welcome, will place additional pressures on the need for trained staff within the National Health Service. It is high time that the private sector

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showed that it feels some sense of responsibility to the service on which it preys. The new clauses would do just that.

If we look at them carefully, we see that new clause 4 provides that a register should be kept of private medical concerns which either provide training themselves or make a payment to the NHS to reimburse it for the full cost of the training of the people whom they employ. New clause 10 goes further. It stipulates that tax subsidies will be paid only to firms that do provide some form of reimbursement for the costs that have been incurred. For example, they would have to undertake staff training to a standard that is similar to or comparable with that in the National Health Service, or they would have to reimburse the National Health Service for the cost of the training that has been provided. Who could quarrel with such a reasonable proposal?

Mr. Nicholas Bennett rose --

Dr. Moonie : Obviously the hon. Member for Pembroke (Mr. Bennett) wishes to quarrel with it.

Mr. Bennett : Given that this country employs large numbers of teachers who have been trained abroad and large numbers of nurses who were trained in other countries, is the hon. Gentleman proposing that a Labour Government, should one ever be elected, would reimburse those countries for the staff who have been trained in those countries and who work over here?

Dr. Moonie : That sounds an excellent idea, one which I could not have imagined would be thought of by the hon. Member for Pembroke, since he contributes so much nonsense to our debates on health care, as witnessed by his comments earlier this afternoon.

The new clauses are reasonable. No fair person could possibly object to them. They will ensure either that private firms which recognise their responsibilities are given fair recognition for their investment or that this subsidy from everybody else's pocket to the private sector is paid only to those who carry out their responsibilities. I commend the new clauses to the House.

Mr. Tony Baldry (Banbury) : The debate provides us with a useful opportunity to highlight the Labour party's inherent hostility to private medicine. Much of the debate on the National Health Service in recent months has naturally tended to concentrate upon the proposals in the White Paper "Working for Patients", supplemented by the Budget provisions that we are considering. Very little attention has consequently been paid to the Opposition's policies relating to health care.

There are two things that we know about the Opposition's health care policy, both of which are damaging. First, they would abolish private practice in medicine, something which Barbara Castle sought to do in 1966. Secondly, they would undermine the concept of competitive tendering.

It is interesting to consider what the implications of the proposals would be if private health care in Oxfordshire were to be undermined, and also how much income private health care brings to the National Health Service. Private patient income in Oxfordshire amounts to approximately £2.5 million in this financial year. Competitive tendering will save the Oxfordshire district health authority approximately £700,000 this year.

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If one combines the effect of private patient income and competitive tendering, the saving amounts to £3,200,000. If competitive tendering were to be abolished and if no private patients were to be treated within the National Health Service, as each NHS consultant costs approximately £46,000, the effect of the Opposition's proposals on Oxfordshire district health authority would be that the funding of about 96 consultants would be removed. That would be wholly negative, wholly damaging and wholly detrimental to the National Health Service, for no reason other than to satisfy Opposition dogma as to private health care and to meet the demands of certain public sector trade unions about competitive tendering. If the Opposition ever came into office, it is important to highlight the fact that almost overnight they would considerably undermine the funding of district health authorities. The effect on one district health authority alone--Oxfordshire--would be the loss of 96 consultants.

Mr. Worthington : The major savings after privatisation have related to staff wages and staff conditions. Does the hon. Gentleman concede that, if we were to pay the staff nothing, we should be able to employ an enormous number of consultants?

Mr. Baldry : It must be for the hon. Gentleman to judge whether he really feels that that was a sensible contribution to the debate. Competitive tendering has led to substantial savings in the National Health Service. Those savings have been and are being used for better patient care. The Opposition are blinded by ideology and trade union commitments.

Mr. Couchman : Does my hon. Friend agree that the tax allowance proposed in the Bill would generate more money than the actual saving in taxation? The figures show that two and a half to three times the amount given away will be generated in additional health care resources.

Mr. Baldry : My hon. Friend makes a very good point, which I had hoped would be taken on board much earlier in the debate. I had hoped that many of the points would be taken on board in Committee of the whole House. For many of us there is a sense of deja vu about the debate. We have covered the ground before, but it seems that the Opposition are incapable of taking on board the essential facts.

Mr. Norman Lamont : Deja non vu.

Mr. Baldry : I bow to my right hon. Friend's superior knowledge of French. Whether it is deja vu or deja non vu, the Opposition are not grasping it, so we have to take them through it yet again. Many people have private health care as part of their remuneration package. Many employers negotiate private health care packages for their employees. Many trade unions now negotiate private health care. While those people are in employment, that private health care subscription is paid as part of their remuneration. When they retire, not only does their income drop but their health care subscription is no longer paid for them. That is nonsense. The provision in the Finance Bill encourages those who have medical insurance cover during their working lives to continue it in retirement. That is a perfectly straightforward provision. Many people in group

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schemes when their employers negotiate insurance cover for their employees could keep that cover, given some fiscal encouragement. The Opposition have said on a number of occasions that that encouragement will simply go to those who are better off. That canard should be dismissed at every opportunity. About 5.5 million people-- or one in 10 of the population--are now covered by medical insurance schemes, many of them through company or trade union schemes. The great majority of the tax relief that the provision would produce would go to standard rate taxpayers. About 80 per cent. of the provision would go to basic rate taxpayers aged over 60 or to those who are not liable to tax. The benefit of the provision will go mainly to those who have worked throughout their lives, and whose employers paid into a medical insurance scheme, and will enable them to continue that scheme into retirement.

Dr. Moonie : Will the hon. Gentleman tell us how many people he knows who pay no tax but could pay £600 a year in private medical insurance? I should dearly like to know.

Mr. Nigel Griffiths (Edinburgh, South) : Ken Dodd.

Mr. Baldry : I hope that the hon. Gentleman accepts the general thrust of my point, that the provision will not affect primarily the higher rate taxpayer, as the Opposition have suggested, but will go to those paying the basic rate. The humorous interventions from the Opposition demonstrate that the Government and the Conservative party have won the intellectual argument. Clearly they are now finding it difficult to make any points of substance against this perfectly sensible provision. The Opposition have to make it clear to the country exactly where they stand on private medicine.

6.15 pm

If one in 10 people now benefit from private medical insurance schemes, and if whole groups of employees throughout the country benefit from private medical schemes, what do the Opposition intend to do for them? Do they intend to revert to the position under Barbara Castle, when private medical health care was forced out of the National Health Service and consequently a number of private hospitals were set up so that the benefits of that did not go to the National Health Service? What is intended? There is no doubt that private medical care makes a considerable contribution to health care in Britain. It relieves pressure on the National Health Service and increases scope for co-operation between the National Health Service and the independent sector.

Dr. Moonie : What evidence is there of that?

Mr. Baldry : The hon. Gentleman asks what evidence there is for private medicine relieving pressure on the National Health Service. I am not sure where he goes, but certainly in Oxfordshire a considerable amount of screening is carried out by the independent sector which, by definition, relieves pressure on the National Health Service. If my constituent, Mrs. Jones, can be screened privately more quickly than she could by the National Health Service, and consequently the National Health Service can fulfil its screening targets much more quickly, that will have relieved pressure on the National Health Service. If the Opposition cannot grasp that or understand how the private sector can contribute to enhancing

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standards in the National Health Service, I weep, as clearly they have a total lack of understanding of how the National Health Service operates.

Dr. Moonie : Will the hon. Gentleman explain the possible economic benefit to a country with a public health service to spend four times as much on providing the service privately? Is he aware of the least-cost approach to analysing expenditure? How can he possibly justify spending that amount of money?

Mr. Baldry : That intervention begs a number of questions. It begs the question whether the National Health Service inviting the private sector to work for it costs four times as much. Often, taking into account all the costs, the independent sector is cheaper. That is one reason why the National Health Service and district authorities have been inspired and have the incentive to look to the independent sector. The independent sector can often deliver services such as screening and ancillary services more cost-effectively than the National Health Service can.

Mr. Jeremy Hanley (Richmond and Barnes) : Does my hon. Friend agree that it is irrefutable that the major pressure on the Health Service is the growing number of elderly people, who, quite rightly, turn to the National Health Service? Many of the people who will benefit by the provision will already use private medicine, and because of the withdrawal of tax benefits through their firm will automatically have to turn to the National Health Service when they retire. They will be new patients for the National Health Service ; therefore, the provision would be of great benefit in reducing pressure on the Health Service.

Mr. Baldry : My hon. Friend is right. It is incredible that the Opposition find it so difficult to understand that point. Of course, all the money that comes into the independent sector of private medicine is--

Dr. Moonie : It is wasted.

Mr. Baldry : It is not wasted. It is extra money for health services in this country as a whole. This year, in Oxfordshire alone, £2.5 million extra is going into the Health Service because of private medicine by way of fees to Oxfordshire district health authority. In addition to those direct contributions there is the money that the National Health Service saves because people who might otherwise go into NHS hospitals are treated by private or independent hospitals elsewhere. The private sector's contribution to health care overall is considerable.

I understand that the Opposition are saying that they do not believe that there is a place for private medicine or independent health care. I hope that they will explain that clearly throughout the land, so that each district health authority can note the impact that that would have on their financing. Taking just competitive tendering and private health care in my district health authority, it is the equivalent of 96 consultant posts.

Dr. Moonie : I am grateful to the hon. Gentleman for giving way to me again. I appreciate that I have intervened twice already. He has twice mentioned the method of tendering and the money coming from private medicine. Is he aware that the money raised from competitive tendering is taken into account and that the Government have calculated the extra money that the health board should get in the following financial year? Surely the hon. Gentleman is not suggesting that the £2.5 million to

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provide private medical treatment all goes in as extra money. That would be nonsense. About 95 per cent. goes into the costs of administration and the treatment of that group of patients.

Mr. Baldry : The hon. Gentleman is wrong about competitive tendering. On occasions too numerous to particularise, Secretaries of State for Health have made it clear that the moneys raised by district health authorities and saved by competitive tendering redound to their credit. That has certainly happened in Oxfordshire and in every other district health authority. The money raised by private health care--£2.5 million in Oxfordshire this year--is money that would otherwise not go into the district health authority's coffers. If one removes the potential for the district health authority to treat private patients, that £2.5 million will no longer go into those coffers.

We have demonstrated beyond peradventure two points about the Opposition. First, they have no intellectual arguments with which they can challenge this sensible provision. Their general hilarity and levity are testimony to the fact that they have run out of sound arguments. Secondly, the Opposition have a continuing and inherent antipathy towards private medicine. Much of their opposition to these provisions, such as it is, is born of their opposition to private health care. They do not understand that, despite their protestations, there is already a growing partnership between the NHS and the independent sector. Through our reforms, that partnership will open up further opportunities for the public and private sectors to work together to provide services for each other, sharing the use and spreading the cost of expensive hospital facilities. That will redound to the benefit of NHS patients and health care as a whole. I hope that the House will pass these provisions, which will enable those who have had medical insurance until retirement to continue with it into pensionable age. I am sure that in five or six years' time we will see that they are continuing to be of considerable benefit to health care.

Mr. Worthington : The provision to which new clause 4 responds is part of the Government's long-term consistent attack on the Health Service. Conservative Members have made several interventions, saying that it is not the Government's intention to attack or undermine the NHS, but we cannot take consolation from that. We know that the Prime Minister takes her principal intellectual support in the Tory party from those who believe that Socialism should be driven out of this country, and the NHS is the prime example of successful Socialism. Some Conservative Members do not believe in the post-war consensus that part of the rights of citizenship should be access to the best possible health care, regardless of issues such as class, income, age, gender or ethnic origin. We want to defend that belief. This provision, giving tax relief for private medical insurance, is but a small part of the larger attack that is being mounted against the NHS. The NHS should give us a universal right to a comprehensive range of services of the best quality.

There is a fundamental division between the Opposition and the Government. Why would people invest in a private medical sector unless it were better? There are no grounds for selling a private medical service unless it is better. Imagine going to a consultant who said, "On the one hand, you can have an operation on the NHS and it will be available in two weeks. On the other, we can offer

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you an operation in the private sector and it will be available in six months' time." Would people like to have that service in six months' time? Of course not. The success of the private health market depends on being able to offer something better--especially reduced waiting times--than the NHS.

It is clear that the Government are stimulating the private health sector so that the comparisons between it and the NHS become increasingly invidious. The intellectual justification for the NHS will become increasingly weaker and people will withdraw their support from it.

Mr. John Butterfill (Bournemouth, West) : Does the hon. Gentleman accept that in some cases--I can cite cases in my constituency--the delay time for certain disciplines is identical in the NHS and the private sector, but the advantage for the person who buys private treatment is that he can specify the date more precisely? For those who need a precise date, it may be worth paying the money.

Mr. Worthington : I have no alternative but to accept the hon. Gentleman's assurance. If that were the normal pattern of relationships between the private sector and the NHS, the prospect for private medicine would be grim. That is not the position. There are long waiting lists for some NHS operations.

Let us nail one myth. We are not talking about two separate services--a private sector and a National Health Service--but about services that are intertwined. A consultant may operate on a patient in the NHS or the private sector. National Health Service premises provide the opportunity for the private sector to lay out its market stall so that the private consultant can say that if one stays with the NHS the wait will be six months, but if one goes into the private sector the wait will be two weeks. It is strange that an employee of the NHS can increase his income by being able to sell his private services on NHS time.

6.30 pm

Mr. Couchman : I am grateful to the hon. Gentleman for giving way. He is more gracious than I was to him.

Is the hon. Gentleman deprecating the fact that some NHS doctors who are not contracted full time to the NHS operate outside the NHS in private hospitals? Has he chapter and verse of anyone who has had a six-month wait for an operation on the NHS, but has been offered an operation tomorrow if he goes into a private hospital?

Mr. Worthington : Every hon. Member has chapter and verse on that because constituents constantly come to our surgeries--a fortunate use of the word in this case--and tell us what has happened to, for example, their children. I can give an example of the condition of glue ear. The consultant said that he could deal with the case within a fortnight if the child became a private patient, but that he regretted to say that if the child simply went on the NHS list there would be a wait of several months. If there is a single hon. Member who cannot give chapter and verse on that constantly occurring, he is not in touch with his constituency, because such cases happen repeatedly. In effect, one goes to see an NHS consultant sitting at an

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NHS desk, who can sell another product while being employed by the NHS. It is a strange relationship in which one's primary loyalty is not to one's major employer.

Undoubtedly, the major inspiration for this provision came from the Prime Minister, and I cannot see Treasury Ministers denying that. The Prime Minister is ignoring one of her basic principles--that one should not fiddle the market place to subsidise private industry. The Opposition have asked frequently for help for firms in particular constituencies, but hon. Members are told that the Government will not support lame ducks or subsidise firms that cannot stand up in the market place. Yet now it seems to be acceptable for public money to be used to support private health care.

I want to ask a question which will be asked by many others who will be paying, even if only in a small way, extra taxes because of this concession. Why should I? What are the principles by which those people who choose not to have private insurance or who cannot afford to do so have to subsidise this tax concession? Why has this tax concession been singled out? We all know that many people pay taxes and, as their income increases, lose benefits. In effect, they are being taxed at 80 per cent. They should be a priority. One would also have thought that the priority was to strengthen the NHS, but the Government say, "No, this concession is the priority." They say that this is how they want to use our money. How can that be justified?

Mr. Hind : Does the hon. Gentleman accept that if there is tax relief of 25 per cent., or of 40 per cent. for elderly people, for every £25 in tax relief, the pensioners themselves are paying £75? That £75 would not be put into health care. What would happen is that the state would have merely the £25. We are increasing the volume of the gross national product going into health care. That must be a good thing.

Mr. Worthington : I am afraid that I did not hear the hon. Gentleman's entire point because a more urgent message arrived in the middle of his contribution. I hope that I can deal with his point in the remainder of my speech.

The essential point is whether the private sector strengthens the NHS. The Government and Conservative Members say that it does. If that is so, why do they not commission research to see whether the relationship between the NHS and the private sector is complementary or parasitic? I can tell Conservative Members that the Government have commissioned such research. I asked whether they had and I received a reply that they had commissioned research from the university of Sheffield. Because of the lack of time I must go through the conclusions quickly, but the study shows that, in terms of doctors and nurses, any further expansion of the private health sector will be achieved only by arresting or reversing the development of the NHS. It states that, with the present level of private activity,

"It is difficult to see how in the short term private sector activity could increase further without NHS consultants doing more work outside the normal working week, which may have consequences for the cost of treatment, or without many full time consultants switching to part time work, thereby reducing their NHS caseload." The nursing pool is finite and will be under great pressure in the future.

I do not have time to quote the research in full, but if the Minister wants to look at it, he will see that it is clear

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that further expansion of the private health care sector will be damaging to the NHS. This proposal is part of that damage.

Mr. Nicholas Bennett : One of the canons of taxation in which I believe most firmly is that the taxation system should be as simple as possible so that it can be well understood by those who pay tax. I am not normally in favour of increasing the number of tax reliefs available, but I have noted that the White Paper on public expenditure said that tax reliefs can be justified on two grounds--first, encouraging savings and home ownership and, secondly, encouraging enterprise and training to make the economy more efficient. I believe that there should be a third category for which tax relief should be available as a matter of public policy ; to increase personal responsibility and encourage people to look after themselves as much as possible. It can be allied with the principle of tax relief for home ownership. It is, in itself, a good principle that people should own their homes and look after themselves as much as possible.

That category applies also to private health insurance. It is a basic principle that it should be public policy to encourage people to help themselves as much as possible, especially when they reach an age at which they would normally find it more difficult to help themselves.

I also believe that tax relief for those aged 60 and over is important because it extends their range of choice. That is a vital argument in its favour. I do not like the idea, regularly expressed by Opposition Members, that we must restrict choice and prevent the staff from working in the private sector and patients from having an alternative to state-provided medicine.

Mr. Dennis Turner (Wolverhampton, South-East) : Will the hon. Gentleman give way?

Mr. Bennett : I am sorry, but the winding-up speeches are about to start and I have only a few minutes in which to speak.

Thirdly, I believe that those who help themselves by paying twice should enjoy some form of relief to compensate them for the fact that they are not only paying for the state-provided service but are providing for themselves in the private service. As my hon. Friend the Member for Lancashire, West (Mr. Hind) said, by encouraging people to take up this tax relief we shall increase the total amount available for Health Service spending. We can increase the total amount spent on health not only by increasing the contribution to the state sector, but by increasing the total sum available to the private sector. We must take advantage of that opportunity. Other countries in Europe do not spend much more on the state sector but they do spend much more on private sector health insurance. Fourthly, those who use private facilities are thus relieving the National Health Service of demand, especially in the case of operations such as hip replacements which are of special benefit to the elderly. If hip operations are performed in the private sector, the National Health Service can concentrate on the more technically difficult operations. That will remove much of the day-to-day surgery from the NHS. The proposal would also increase co-operation between the private and nationalised sectors of the Health Service, and that is important.

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Even with tax relief, those who pay for private insurance are still making a contribution on top of the contribution that they make as taxpayers. We should remember that. It is depressing that the Opposition should talk about handouts and giveaways and that they should fail to recognise that we are talking about relief on money that people have already earned and on which they have paid tax. The hon. Member for Wrexham (Dr. Marek) could not define what he meant by super super rich, super rich, rich or even poor when I asked him to do so.

Finally, it is rather depressing that the Liberal party, which has such a long tradition of pluralism and has long believed that people should have a choice and that there should be a private sector, have now reached the point at which they believe that people should not be able to choose the private sector and that the state must control the entire Health Service provision. No wonder that, having abandoned their philosophy, the Liberals have now abandoned their name.

Mr. Calum Macdonald (Western Isles) : Because of the pressure of time, I have had to throw away the speech that I intended to make. Instead, I shall rely on the words of the Financial Secretary himself, who last night advanced the most cogent argument against the tax allowance for private medical insurance. Last night, of course, the right hon. Gentleman was arguing against a tax allowance in respect of children. So persuaded was I by his argument that I refrained from voting, although I understood and sympathised with the motives of those who argued the case for new clause 23.

The Financial Secretary's arguments on that occasion are entirely applicable to this tax relief--perhaps even more so. The Financial Secretary will correct me if I misquote him. I was so struck by what he said that I took the trouble of writing it down. In rejecting the case for the new clause, he said :

"Governments have to choose in a world of limited resources. The Government were right to decide to deploy resources more to help families in greatest need."--[ Official Report, 11 July 1989 ; Vol. 156.]

If that is true, this tax allowance is certainly not an example of the Government deploying resources to the people in greatest need. 6.45 pm

The Financial Secretary said that he was concerned to do something for people at the bottom end of the scale. If that is the Government's objective, they will certainly not achieve it through this tax relief. Most strikingly, the Financial Secretary rejected a child tax allowance because he said that it would be of no help to the 25 per cent. of families who did not pay tax. How, then, can the right hon. Gentleman justify a tax allowance that will be of no help to the two thirds of pensioners who pay no income tax? His argument is entirely inconsistent.

The Financial Secretary concluded his attack on new clause 23 by describing in some detail how such an allowance would be terribly regressive in its impact. He said that those paying tax at the higher rate would gain much more than those paying at the basic rate. That would also be true of the allowance that the Government are trying to push through. The Financial Secretary said that such a regressive allowance would be difficult to justify, and it seems to me that his words were the epitaph of this allowance.

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Mr. Norman Lamont : So far in the course of our proceedings on this year's Finance Bill we have not heard tirades about the super-rich from the hon. Member for Wrexham (Dr. Marek), but tonight he has reverted to form and type, although even when pressed by my hon. Friend the Member for Pembroke (Mr. Bennett) he refused to say who he thought were the super- rich, except that he thought that they were a few people who had money in the bank. The hon. Gentleman thinks that the super-rich are people who have access to private medical insurance. That means that there are apparently 5 million super-rich among the working population and 600,000 pensioners who are super-rich. I find it extraordinary that the hon. Member should maintain that this was a tax relief that would benefit only the very well- off.

It is time that the hon. Gentleman forgot about the super-rich. In our final debate on last year's Finance Bill the hon. Gentleman paraded a book called "The Super Rich", which had an art deco cover and was published 50 years ago. The hon. Gentleman's political ideas are no more up to date than his rhetoric.

The hon. Members for Wrexham and for Western Isles (Mr. Macdonald) seemed wholly unaware that the scheme to encourage elderly people to take out private medical insurance is technically available to non-taxpayers because it operates on the same basis as MIRAS. That is an important point of equity. Of course, we do not expect it to be widely used in that way, but it is an important point of principle and it was quite wrong for Opposition Members to misrepresent the tax relief, which is, indeed, available to non- taxpayers. A more important point, of course, is that we expect no less than 80 per cent. of the beneficiaries of the scheme to be basic rate taxpayers, who can hardly be classed as super-rich.

The main argument advanced by the hon. Member for Wrexham was that the relief was not targeted, but the whole point of the proposal is to generate additional subscriptions. We want to involve more people in private health insurance so that--as my hon. Friend the Member for Lancashire, West (Mr. Hind) said--we can get more resources into health care as a whole, both public and private.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to what I had said about the deadweight effect of the relief that he proposed. Of course, we should not have proposed this tax relief if we thought that it would have a purely deadweight effect in the long term. Although it will have a deadweight cost for a year or two, over time the relief would act as an incentive and would generate more subscriptions and thus bring more resources into health care. That is the whole purpose of the relief--to generate more resources and therefore, as my hon. Friend the Member for Banbury (Mr. Baldry) said, to relieve pressure on the National Health Service.

My hon. Friend the Member for Banbury was asked what evidence there is that people using the private sector will relieve pressure on the National Health Service. It seemed a strange question, but my hon. Friend gave a good answer by saying that, by definition, a person who uses the private sector for a certain treatment is not using the National Health Service for that treatment at that moment, and is actually saving and releasing resources that can be used by other people.

The strangest intervention in the debate came from the hon. Member for Berwick-on-Tweed. He said that one of the consequences of this relief would be to add to the

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