House of Commons Hansard Debates for 26 Apr 1995

Column 820

during the five-year revaluation period. There are some who believe that a rate as low as 35p could have been set. But what is the Government's response to the charge that the overall tax take from business in Scotland is too high during this revaluation period? Further to the inquiry about the process by which the figure was arrived at for this year, on 29 November 1994 the Secretary of State issued a press statement publishing figures of forecast average movements in rateable values for broad categories of business property by local authority region. There was a written answer from the Secretary of State for Scotland to a question tabled by the Minister, who was then at a lower level of life as a Back Bencher, no doubt assiduously doing his constituency work, asking questions that would never otherwise have occurred to him. That was a helpful answer as far as it went, one sentence of which said:

"Taking together the effects of the forthcoming revaluation with this decision on the level of the rate poundage, I estimate that there will be significant local and sectoral shifts in rate burdens."

I repeat:

"significant local and sectoral shifts in rate burdens."--[ Official Report , 29 November 1994; Vol. 250, c. 687. ]

I should like to know exactly what evidence the Minister had of the extent of those changes and differences. I have real fears that the survey system that he used was inadequate for the task. I should like to know what level of information was provided by local assessors, who, of course, are responsible for the process of revaluation in relation to a sample of property throughout the country.

But the decision that was taken to set the uniform business rate at 43.2p in the pound must have been taken only after careful assessment of those estimated average figures by the assessors for regions throughout the length and breadth of Scotland. The figures that were produced by the Government in the process of setting the uniform business rate included an average forecast figure of an increase for the Borders of 23.2 per cent. That was the figure on which the Government's decision to set the uniform business rate at 43.2p in the pound was based.

I was puzzled at the time that that increase was as low as it appeared to be, but I received confirmation of that concern when a report published by the director of finance in Borders regional council in January stated that the provisional estimates provided by the regional assessor to him showed that, on average, rateable values--admittedly, excluding formula-valued public undertakings--would increase not by 23.2 per cent. but by 32 per cent. That is a significant difference.

The director of finance went on to confirm what was said to the Minister in the written answer of 29 November, when he said that the result of the changes would be

"very significant shifts in the rate burden both between different sectors of non-domestic ratepayers and different areas of the country".

I am well aware of the transitional protection scheme. The Minister will make much of that, because he has done so properly in the correspondence that we have had on the various individual cases that I have raised with him.

I have a strong sense of deja vu in all this, because in 1985, when the Minister was otherwise engaged in business, earning perhaps a more honest living than he is as a Minister at the Scottish Office, when the present Lord Younger was the Secretary of State for Scotland, I, through the various opportunities available to Back-Bench

Column 821

Members of Parliament--I think, from memory, that it was a ten-minute Bill--tried to get the Government to see the difficulties experienced by businesses faced with swingeing revaluations. I brought forward a scheme on the information available to me on the increases that were being imposed on businesses, particularly small businesses in the Borders. I openly admit to doing a calculation on the back of a cigarette packet, which suggested that at least £5 million was necessary in order to remedy the problems of the day at that stage.

I remember the ignominy of being taken to task by Ministers, who subsequently recognised the error of their ways and introduced a scheme that eventually cost nearly £15 million. I was then attacked for asking for only £5 million, which was pretty rough justice. I have felt badly about that ever since. I hope that the Minister bears that in mind when he contemplates the result of this afternoon's debate.

I am aware that the transitional protection scheme is in place. It is fine so far as it goes, but it is extremely inadequate in a number of different respects. First, I am sure that the Minister will confirm that transitional protection does not apply to water and sewerage rates. Certainly, in south- east Scotland, water and sewerage rates are a significant factor in businesses' total rate bill. To exclude any transitional protection from that element of bills will be a penal impost on some businesses, especially those that use a lot of water.

Secondly, the transitional protection scheme is to be phased out over a five-year period. The Minister may know that I tabled a prayer to the order that introduced the scheme. I was hoping to have a debate in a Statutory Instruments Committee, so that I could argue that the scheme was inadequate. I was happy and lucky enough to secure this Adjournment debate, which serves the same purpose, so I shall not pursue the prayer and seek a debate.

In considering the detail of the scheme, I was anxious to try to get the Government to be as forthcoming as possible--I understand that constraints exist--about what will happen in the subsequent four years if the protection level that has been announced and is clear for this year is not maintained throughout the five-year period. It would be helpful if the Minister could say a word about that.

The Minister must understand that, even with the benefit of transitional protection, many of my constituents will face an annual increase of 12.4 per cent. for the next five years--the full period of this revaluation. They will not catch up. They will always be in the transitional protection scheme. Those valuation increases will be further compounded by the next revaluation in the year 2000. Those businesses face increases far beyond what we all hope and anticipate the increases in the inflation level will be over that period. In addition, industrial derating is to be summarily withdrawn. I understand the reason for that--it is part of ensuring parity with the position in England--but it places businesses in the Borders and throughout the rest of Scotland in a serious position.

Derating of caravan parks is being abolished. I have already been in correspondence with the Minister about that. As I have said at least twice, he has responded in

Column 822

writing, but that does not take the situation forward very much for Greenlaw caravan park, for example. Last year, it had a rateable value of £7,000; this year, it is £17,700. Of course, the 10 per cent. transitional process will protect it to a certain extent, but it will take years, if ever, to get around the withdrawal of the derating of caravan parks. Such an increase is unconscionable. As if all that were not enough, a 50 per cent. charge is about to be imposed on persons entitled to possession of properties that have been unoccupied for three months. I understand why that has been introduced--again, it is part of ensuring parity with the position in England--but 500 properties that have been left empty in the Borders will suddenly and summarily be hit with a bill. Some of them will be hit on 1 April if they have been left empty for the previous three months and are not in any of the exempt categories. That will come as a shock, and a considerable financial impost, to the 500 property owners in the Borders in that position.

Many of my constituents and the constituents of my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) will face considerable increases in rate bills in 1995-96 and in later years, even with the proposed transitional arrangement. I do not know for sure, because I do not have the same direct experience of other parts of Scotland, but serious and legitimate concerns exist about how the revaluation in relation to the uniform business rate, transitional protection and the other factors will affect the viability of businesses in future.

From a regional point of view, a serious consequence exists. One of the few competitive advantages available to Borders businesses has been in the form of rate poundages, which have consistently been among the lowest in Scotland. Significantly, following the introduction of this year's uniform business rate, that advantage will be lost.

1.44 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): I welcome the opportunity given by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to deal with the subject of non- domestic rates in Scotland. The advent of the uniform business rate, coupled with revaluation, has introduced some misunderstandings and concerns throughout the country. It gives me the opportunity to go through once again some of the announcements which have been made in past months, but which perhaps have not all been brought together so that people can understand the position.

Obviously I welcome the fact that the hon. Gentleman appreciates the advent of the uniform business rate. Clearly, for many years, businesses in Scotland had been looking for a level playing field north and south of the border. In the past five years, the Government have been progressively reducing the rates burden on Scottish businesses. By last year, Scottish businesses were paying some £500 million less than they would have been if the poundages previously set when under local authority control had continued to rise in line with inflation.

Instead, the Secretary of State for Scotland provided the resources to reduce the burden, and all businesses share the lasting benefit of the progressive reduction, with the introduction this year of the uniform business rate at the same level as south of the border.

Column 823

The hon. Gentleman asked whether the Secretary of State could have introduced the uniform business rate at a lower level. To an extent, he could have, but he has already said that the maximum difference that he could have set was between 1p and 2p less. Clearly, he rightly chose to pursue the linkage with business rates south of the border, which was the long-term objective of business in Scotland. It has asked for a level playing field.

If the equation went the other way, the hon. Gentleman would not wish the uniform business rate to be set higher in Scotland, with rates back to being higher than south of the border. My right hon. Friend has taken the long-term view, to try to give business the stability and security it seeks.

The hon. Gentleman has talked about assessment in relation to revaluation. The revaluation draws on recent rental evidence to update the relativities in the rates burden between different properties. As he appreciates, that means that, for some properties, values will go up, whereas for others they will go down. Not surprisingly, at the level of rateable value, more rise than drop. Rates bills take account of those new rateable values, together with the new rate poundage. On that basis, increases in rates bills are not as great as they might have appeared when people received their rateable value assessments. I know that the hon. Gentleman appreciates that, but I state it so that the complete story is on the record.

It was important to the Secretary of State to ensure adequate transition to prevent any significant rise. On the method of revaluation, as the hon. Gentleman will appreciate, to set the uniform business rate level, my right hon. Friend had to have an assessment of what would happen after the revaluation. The assessors had until 15 March to prepare the valuation rolls, which was obviously not in time to determine the rate poundage which would take effect from the beginning of April.

As the assessors were preparing for the revaluation, the Scottish Office sought estimates of the emerging picture from them and from our colleagues in the Department of the Environment who were obtaining similar estimates from the Valuation Office Agency south of the border. On the basis of those estimates--I emphasise that they were estimates of the emerging picture--we determined the appropriate poundage and the transition arrangements. From the figures, which were published in November, it was clear that there would be a wide divergence in the movement of rateable values and rate bills between different regions and between business sectors, as the hon. Gentleman has said.

It is too early to get carried away and to say that the estimates were anything other than good estimates. As the hon. Gentleman will be aware, all of us as constituency Members of Parliament have had a significant number of businesses complaining to us about the high level of percentage increases. However, to get an average, one has to have people who are above the average and people who are below it. Inevitably, those who are below the average and who have calculated the amounts are less likely to come to us than are those who have big increases.

I may be able to give the hon. Gentleman some comfort. I have ensured that my officials have embarked on a detailed analysis of the actual valuation rolls, to assess how close the actual has been to the approximation.

Mr. Kirkwood: That is at least half an answer to my question; half a loaf is better than no bread. I understand that we are in a hiatus, because we shall not know the

Column 824

exact position until the full published revaluation rolls are available in May. Will the Minister undertake in the intervening period to let us know what the sample size was? I do not expect him to give an answer this afternoon. Will he, in the fulness of time, make it absolutely clear what the sample surveys were which informed the decision taken in November to set the UBR at 43.2p?

Mr. Kynoch: I will indeed ensure that a letter is sent to the hon. Gentleman. I am glad that he appreciates that one could operate only on a sample at that stage, to have the estimate on which one could base the calculation for the level of business rate. It is important to ensure that local authorities have adequate funding to provide the services that they have to provide.

I now move on to the transitional period which the hon. Gentleman has rightly welcomed--

Mr. Kirkwood: Grudgingly.

Mr. Kynoch: The hon. Gentleman says that he welcomes it grudgingly. One has to use judgment in the adjustment in the revaluation process which takes place once every five years. In every revaluation process, there can be winners and losers. Some people have seen the prospect of significant gains in their rateable values. Those gains are, as I am about to describe, restricted in the transitional scheme, partially to fund the transitional arrangements for those who will lose.

The extremely important point for the Government in the whole exercise was to try to avoid sudden changes in outgoings which could fall on businesses, especially small businesses. I know that there is a significant number of small businesses in the Borders, and to that extent, the transitional scheme may have a greater effect there than in areas where there is a higher proportion of larger businesses. It is important that we try to ensure that small businesses do not have enormous outgoings.

On that basis, my right hon. Friend the Secretary of State introduced the transitional scheme, which will restrict the amount of business rate increase paid by anyone who has to suffer an increase. The increase for properties with rateable values in excess of £10,000 is restricted to 10 per cent. in real terms. For smaller businesses with rateable values of less than £10,000, the figure is restricted to an increase in real terms of 7.5 per cent.

The good news for the hon. Gentleman is that that protection will continue for the full five years at the level of 7.5 per cent. and 10 per cent. in real terms. It will continue until the next revaluation in 2000. There is no reason for anyone to fear an undue increase in rating bills in the next five years. The scheme is being funded this year, partly through the restrictions on gains for those who have benefited, and partly through the £72 million which the Exchequer has granted to my right hon. Friend the Secretary of State.

The hon. Gentleman talked about the impact on small businesses. I want to get across the point that small businesses have received their revaluation notices. In some cases, the figure is significantly up from previous valuations. Clearly, those businesses have time to appeal against the valuations if they believe that they are not right.

For the sake of the record, I tell the House that businesses have from now until September, or six months from the date of their notice, to appeal. The appeal will,

Column 825

of course, be considered by the local assessor, and, if agreement cannot be reached with him, by a totally independent valuation appeal committee.

The hon. Gentleman referred to the Borders region in particular. Although I do not want to invite a surge of appeals--

Mr. Kirkwood: The Minister will get them anyway.

Mr. Kynoch: From the information that I have gleaned so far-- obviously, it is early days--the level of appeals submitted in the early days is not unexpectedly high; it is at the level anticipated. The appeals procedure is there to try to ensure that a fair valuation is achieved. In some cases, the figure may be brought down on appeal.

The hon. Gentleman talked about industrial derating being withdrawn. The whole point of industrial derating was to try to ensure that there was a level playing field between the methods of valuation north and south of the border. We are assured by both the Valuation Office Agency and by the assessors that we now have complete harmonisation in the valuation procedures north and south of the border, so there is now no longer a need for that derating. The hon. Gentleman referred to caravan parks. I suspect that the reason why he wrote to me about a particular caravan park was that a circular was sent to caravan parks in England and Wales which alerted them to the significant increases they might face.

Derating for caravan parks in Scotland was reintroduced in 1990. We had believed that we had complete harmony between the two methods of valuation. When we discovered that we did not, the assessors agreed

Column 826

that we should have a derating policy for caravan parks. However, I am happy to look at the case of Greenlaw caravan park, to which the hon. Gentleman referred. If the caravan park owner believes that it is not a fair valuation, he should go through the appeals procedure.

Sir David Steel (Tweeddale, Ettrick and Lauderdale): He is not the only one.

Mr. Kynoch: The right hon. Gentleman says that it is not the only case, and I understand that point. His hon. Friend gave the caravan park as an example. If any other caravan park believes that it has not been assessed fairly, it can go for appeal, and it will then have a valuation on which it can work. Caravan parks are protected thereafter by the transitional scheme. I hope that, as a result of all this, there can be a fair basis of valuation.

The hon. Gentleman mentioned water, which I shall refer to briefly in the final few seconds. Water, of course, is a different issue and it is open to any business to apply for metering of water supplies and be charged on that basis if it does not like being charged through the rating system.

In short, I believe that the advent of the UBR and, indeed, the harmonisation of the valuation procedures north and south of the border provide the level playing field which we have all sought for business in Scotland. Business has long sought the ability to compete on a level playing field and I believe that it now has it. It is interesting that the Opposition and the Labour party in particular advocate a clear return to the setting of business rates by local authorities. I say to all businesses in Scotland, God forbid the day that that should ever happen, because if it does, rates will soar, businesses in Scotland--

Madam Deputy Speaker (Dame Janet Fookes): Order.

Column 827

National Health Service (East London)

2 pm

Mr. Nigel Spearing (Newham, South): I am not pleased at having to raise this topic--it should not be necessary to do so. The health services in east London are in a parlous state. None the less, on 5 April, when the Secretary of State was dragged to the House, she said:

"I am determined that, as a result of these changes, we shall have a health service in London that is fit for the 21st century, in which we can all take great pride."--[ Official Report , 5 April 1995;Vol. 257, c. 1736.]

I invited the right hon. Lady to today's debate. The Minister, who is present and who met a deputation on the matter a week before the Secretary of State's comment, is not responsible. The Secretary of State is responsible.

A week before the Secretary of State's comment, five Members of Parliament from east London with eight women officers of the community health councils told the Secretary of State personally that it would be disaster if the changes which she had authorised were to go ahead in the area of the East London and the City health authority. That area has a population of 500,000 --the size of a large city. It is organised by one authority, whose officers and members are agents appointed by the Secretary of State. Indeed, this debate may be the first-ever opportunity for the right hon. Lady, who once again has not come to the House to take responsibility, to look at what is happening in a particular area. It is only when one sees what is happening in one area that one can see the impact of the changes introduced by the present Administration.

In east London, the City of London, one of the highest-earning areas, is next to three boroughs--Hackney, Tower Hamlets and Newham--which, on statistical terms at least, are three of the most deprived in the country. It is interesting to note that today a report has been published about the connection between income deprivation and health. Indeed, I believe that my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) gave an example of that connection which was reported in the media. There is therefore a juxtaposition of some of the most privileged people, and some of the least privileged people, whom my hon. Friends and I represent; those immediately to the east of Aldgate pump and those stretching out in a segment to north-east London.

The main plans were to close hospitals. The 1,035 beds in the East London and the City health authority are to be reduced over six years to 738--a reduction of roughly 30 per cent. That takes account of the net closure resulting from St. Bartholomew's, the closure of the London Chest hospital- -we all know how respiratory diseases are on the increase, especially among children--and the proposed closure of St. Andrew's by Newham Healthcare trust. So two saints in the east are going west and that is not good news for east London at all. The reason for the closures is the belief of the Secretary of State and her officers that the need for beds will go down, despite all the trolleys serving as beds in hospitals in east London, to which I shall refer in the moment.

The key to the operation is the Whitechapel site in the constituency of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Indeed, 165 additional beds are to be provided there, together with

Column 828

supporting services. The figures that I gave take that into account. When will that facility be built and where is the money coming from? I understand that, at current prices, £230 million has been allocated for that development, but Ministers have not given a guarantee of when, that will be available or if it will be available. Letters of comfort to the non-existent North Thames regional health authority chairman, who has now been phased out, do not provide the sort of guarantee that we want. We have heard such stories about replacement beds before and so have people all over the country. We want guarantees that the money will be available and that that facility will be built before the reciprocal numbers of beds elsewhere are reduced. Is that not a reasonable request, given that the commitment to provide them has been given?

The second area of questioning concerns secure psychiatric accommodation. A case arose in an east London magistrates court because at one time there were no proper secure beds available in east London. The Secretary of State could have attended but instead she sent somebody else. The recommended number of secure beds--of course it is more than a bed; it may be somewhere where people may be able to help their condition--is below that recommended by the royal colleges. I understand that secure places have not been found in north-east London for 63 people, and that the 63 places that have been found are scattered over the country as far away as Yorkshire and south Wales. Are those the sort of conditions in which relatives and others may help?

Two horror stories have been supplied by the Hackney and Newham community health council representatives retrospectively and I shall read them out because such stories convey the truth of what is happening much better than statistics, however much they impress those who can read them.

The first case study is of a Hackney man, whose mental state was deteriorating rapidly. He threatened a health worker with a knife, tried to pull out his own tongue, locked a GP in his room and attacked and tried to strangle an elderly woman in the street, yet there was no bed for him in Hackney. Only after the intervention of somebody from the office of the Secretary of State for Health was a bed found. Presumably, somebody was turfed out to make room for him. Such turfing out produces the curious anomaly of 120 per cent. bed occupancy, which I understand is the figure for Newham.

Case study two is of a 15-year-old Newham girl who could not be contained in local authority accommodation. She was eventually put through the courts and sent to gaol because there was no psychiatrist available to see her. Newham currently has one psychiatrist in post to cover the whole adult population of the borough--about 250,000 people.

One of the reasons why people do not fill vacancies in the borough is the extremely hard work load and the unreasonable demands made on loyal, skilled and hard-working staff. Indeed, the health of some of them suffers as a result.

The casualty scene is perhaps the most spectacular. Bart's had a casualty department. Its closure has meant greater pressure on adjacent casualty units--those at the London Chest hospital and the Homerton. I am told that, since January, the Homerton casualty unit has had to be temporarily closed on 20 occasions. Although it may have been for only half an hour or half a day, that means that ambulances have to go further and everybody's morale

Column 829

goes down. To keep the unit's head above water, beds have had to be put in the waiting room. It is not the only casualty unit affected by the closure of Bart's casualty. The closure has had a ripple effect throughout east London, including Newham general, where at the moment patients have to wait anything between four and eight hours in the casualty unit. Eleven posts for junior hospital casualty officers were advertised not long ago, but only seven could be filled, adding to the pressure on those who responded to the call.

I understand that, quite properly, the Government have reduced the pressure on junior doctors. I have also heard that, for some reason, the Royal College of Surgeons--for all I know, the Royal College of Physicians may have done the same--has reduced or eliminated the requirement for young doctors to have such experience. The supply has dwindled. Who would blame young doctors for not choosing to go into a situation in which the stress is greatest and the staff shortages are the worst, if they do not have to? There is a descending vicious spiral.

The Secretary of State--or rather the Minister, as he is here, although it should be the Secretary of State--may know about that problem and want to make inquiries. I hope that he will be able to tell me now whether what I have said is true, because if he cannot it shows that either he or his Department is not up to the job. There was recently a scare story--or rather, not a scare story but a factual story--in The Sun about a theatre orderly being involved in an operation. That may have been medically justifiable--I do not say that it was not--but we know that the orderly had to stand in for a doctor who was called away to fill a gap in the Newham general hospital casualty department. Perhaps he was trying to save somebody who was dying. Who is to know?

A couple of weeks ago a chap came to my advice service and said, "I was driving my van down the street, Mr. Spearing, when I had pins and needles and I went numb all down one side. I drove slowly and quietly to Newham general and said, `I think I have had a stroke.'" Two nurses, no doubt under pressure, assured him that he had not had a stroke, and told him to see his general practitioner. The next morning, having driven quietly home, the man went to see his GP, who confirmed that he had had a stroke. I have verified those facts with the community health council.

Those stories show what problems there are in the casualty departments, which are the most critical facilities of all. And those problems stem to some extent from the ripple effect of the Bart's closure. Last week, my right hon. Friend the Member for Derby, South (Mrs. Beckett), the shadow Secretary of State for Health, asked what use was to be made of the St. Bartholomew's site, and the last sentence of the written answer by the Minister for Health read: "The Royal Hospitals trust has also been in discussion with the city initiative on possible uses of the site for health -related services."--[ Official Report , 18 April 1995; Vol. 258, c. 119. ] I know that the City is worried about the reduction in local emergency facilities. It does not like the disappearance of St. Bartholomew's casualty department. If I were a City financier or somebody with plenty of money and a bit of organisation, I would say, "Can't we use some of that site for a private organisation?" City firms--there are enough of them--could get together and

Column 830

say, "What about some form of accident and emergency facility there?" That is possible; there is talk of it happening. Somebody from abroad might think of such a project as a good thing. It might be a paying game, and make a profit. Someone will say, "What about a market in accidents and emergencies in the City, eh, boys? Shares?" That is the sort of development that the Government are encouraging in health. They think that there is a market in health care. Well, we do not. That is the big difference between us. It is typified, as in a sort of parable, in the contrast between the City, Aldgate and the rest of east London. I do not say that what I suggest will happen, but I suggest to the Minister that it might.

Let us suppose that a taxi driver--John Bull, one of my constituents--had a heart attack at the Bank of England. Would he be eligible for treatment at such a place? We do not know. We can think of other representative people, too. Lots of people live in that great Barbican block. Let us think of a typical name in London--John Smith, perhaps. Would a John Smith in an organisation which had no share in that accident and emergency facility, and did not pay money to it, be eligible? No.

I do not say that that will happen, but I suggest that, under the Minister's philosophy, it could happen--unless he tells us to the contrary, so that people, not only at home but abroad, can hear him. I hope that it will not happen, but there is only one way to stop it--to reopen the much- needed Bart's casualty facility for everybody, as it was designed for the national health service and as it operated until recently.

In the East London and the City health authority, we see an example of what is happening all over the country. We often hear about social and other types of problem in other parts of the country; we read about them in black and white and we see them fuzzily. But in east London, where there are all sorts of problems, we see them not fuzzily but in focus, and not in black and white but in sharp technicolour.

In east London we have seen the closures that the Secretary of State, whose hands are not safe, announced a few weeks ago. My hon. Friends and I, who represent constituents who live in east London in the deprived boroughs, have to bring those facts out, and say that the health service there is not good enough. The Government ought not to be proud of it now, and I fear that, despite what the Secretary of State said, we shall not be able to be proud of it in the next century, either.

2.15 pm

Mr. Stephen Timms (Newham, North-East): I congratulate my hon. Friend the Member for Newham, South (Mr. Spearing) on having secured the debate. I shall add a few brief remarks of my own, because I want to comment on the level of resources available for health services in east London. Before I do so, I shall express one note of commendation for a recent Government decision, because this is the first opportunity that I have had to do so.

I welcome the decision to have three community health service trusts, rather than the one initially proposed, in east London. My hon. Friend and others, including myself, reflecting representations made in east London, have expressed that view to the Minister in earlier debates, and I am pleased that it has been decided to go for three

Column 831

trusts rather than one. That will give us a better basis for the future of community health services in east London than we should otherwise have had.

However, that decision has already shown what an extraordinary disparity there is between the budgets of the three new community health service trusts. That has again thrown into relief the question of the resources made available for the health services in east London to deal with the problems that my hon. Friend has so eloquently described.

We need a funding regime to reflect the immense need created by the deprivation that we endure in east London. We have not yet got that. Of all the myriad examples that could be cited, I shall mention the formula for the funding of the psychiatric services, which contains no reference whatever to the level of unemployment in an area. It has been well known for many years that high unemployment contributes to psychiatric problems, yet that knowledge is not reflected in the funding formula. This morning's King's Fund report, which my hon. Friend mentioned, shows that resources must reflect far more fully than they do the deprivation that leads to and accompanies poor health. If we can make sure that that happens, east London will have a much better slice of the resources than it does, and we shall be able to look forward to resolving some of the problems that my hon. Friend has described.

2.18 pm

Ms Margaret Hodge (Barking): I thank my hon. Friend the Member for Newham, South (Mr. Spearing) for allowing me a brief intervention. I represent a constituency slightly to the east of my hon. Friend's constituency, in which, despite massive local opposition, the Government have given the go-ahead for the closure of the accident and emergency unit at Oldchurch hospital. Hon. Members on both sides of the House have long expressed our real fear that that decision marks the first nail in the coffin of Oldchurch hospital as a whole. The people whom I represent desperately need the services provided by that hospital. They have already lost too much--Barking, Rush Green and now Oldchurch. Now they are to be expected to go to Newham general hospital--we have heard about the problems there. My constituents will be left with one hospital serving almost half a million people.

The people of Barking are more likely than average to be old, to be sick and not to have the use of a car. Yet they are now expected to travel on lousy public transport all the way to Harold Wood hospital or Newham general hospital for accident and emergency services. It will be a catastrophe.

I seek two assurances from the Minister today. Is the impact of the closure of the Oldchurch unit being monitored by his Department? If so, will he report back to the House? Is the future of Oldchurch hospital as a whole secure?

2.19 pm

The Minister for Health (Mr. Gerald Malone): I congratulate the hon. Member for Newham, South (Mr. Spearing) on securing this debate on an extremely important, and controversial, matter. I am pleased to come to the Dispatch Box today to explain the Government's policies and the reason behind them. Rather than

Column 832

concentrate on the general strategy, I should like in the moments that remain to me to get into the meat of the arguments that have been raised by the hon. Members for Newham, South, for Newham, North-East (Mr. Timms) and for Barking (Ms Hodge). I shall deal with as many of the points as I can.

I shall deal first with the points about beds. A range of research published over a period suggested that general bed reductions were required in London. The debate gets off on the wrong foot if anyone suggests that there are prescriptive figures tied to a definite timetable from which no one will depart. I remind the House that health authorities are given by the Government a fundamental statutory responsibility to provide adequate services, whether that means acute beds, what are described in the language of academics as low-tech beds or long-term beds. The health authorities have to get the balance right.

I am sure that the hon. Member for Newham, South will concede that the reductions are not being done according to a strict timetable with a ratio of beds dropping according to some formula that was fixed some time ago, on which the Government are being inflexible. Nothing is further from the truth.

The figures that underpinned Tomlinson were essentially predictions of trends in bed use. Therefore, actual bed reductions are broadly in line with the predicted trend. That is what we have seen. The Government's policy in London, as in the rest of the country, is that it is for individual health authorities to plan what level of provision is appropriate in their area, taking into account all the factors of need, demand and availability, and the desirability and adequacy of other services.

An impression has emerged that the report that underpinned the reforms that are now taking place is out of date. The report is being questioned. It is important to remind everyone who is interested in the matter that the King's Fund still holds to the view that, as a result of changing medical practice and the reduction in referrals to London hospitals from outside the capital, London will need fewer acute hospital beds in the future in general terms. Most people would concede that point.

I understand that those who represent London constituencies wish to make their points in their own way, but the principle is that the number of beds must be adequate. There is an overview. Restructuring will mean that, in time, a different pattern will emerge in London. That is something with which the House is familiar. It is broadly accepted outside London, especially in areas which previously referred to London hospitals to a great extent, but now find that they do not do so as much. The pattern has changed and the demand from the local area is that the hospitals that serve local people should take much more of the case load than in the past.

On a point referred to in passing by the hon. Member for Newham, South, there is one saint in the east which is not going west. St. Andrew's hospital will not close. In-patient services will be transferred to Newham, with concentration of day care and out-patient services at St. Andrew's. That proposal is subject to public consultation, as are all the changes proposed.

The hon. Gentleman asked how we were to guarantee that changes would take place smoothly and services would be preserved. It was a fair point. As he knows, it is impossible for any Minister to give specific guarantees from the Dispatch Box of funding other than on a

Next Section

Home Page