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Ms Harman: The charge that we are making today and will continue to make is that the NHS is now rationing. If someone needs those treatments but in their area it has been rationed out, that means that he cannot get it on the NHS. He have to go private. Rationing is sweeping through the NHS today, and the Minister is responsible for that.

Mr. Dorrell: The problem with that argument is a minor matter of fact. If one goes and talks to the private operators who offer elective surgery services in competition with the health services, what they actually tell us is not that more and more people are leaving to go private, as the hon. Lady says, but that the service that is available from the NHS on elective surgery has improved so much since the introduction of the patients charter, and the reduction of waiting times, that fewer of them are going into private care, not more. The hon. Lady is simply tripped up by the facts that she uses in support of her argument. She is simply plain wrong.

We come back to the argument whether we should use resources in the health service in a way that reflects priorities. That is not, I should have thought, a revolutionary concept, but let me quote to the hon. Lady a sentence that she might find of interest:

Those are not my words. They are not the words of somebody who has been engaged in some lurch to the right--I imagine that the hon. Member for Peckham would probably not accept that description of herself. They are the words of Mrs. Barbara Castle, as she then was, as Labour Health Secretary in 1976. In that year, she published a document headed "Priorities for Health and Personal Social Services in England". It was an explicit document, which set out to target--

Mr. Tom Clarke: Is that the best that the hon. Gentleman can do--20 years ago?

Mr. Dorrell: Indeed. I have to go back quite a long way to find any quote from any Labour spokesman in office, I am pleased to say. It seems to me to be relevant that Lady Castle--who is not normally regarded as a signed-up supporter of my right hon. Friend the Member for Wokingham (Mr. Redwood) in every argument that he pursues--as Health Secretary published a document explicitly intended to focus the minds of health service managers on the need to assess their priorities and target

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their resources on the delivery of those priorities. The attempt of the hon. Member for Peckham to stir up this argument as some new scandal is one of the silliest arguments that I have heard in a long time. As an editorial in The Guardian made clear on this subject a fortnight ago, it is an approach to the management of the health service, which has been there not merely as a matter of fact but as the duty of health service managers since 4 July 1948. The moment one spends taxpayers' money, one has an obligation to target it on resources. So to seek to open up that argument, frankly, is silly.

Much more serious is the question to the hon. Lady over the extent to which she shares the developing consensus on what should happen in the national health service, because one of the most interesting documents recently about the health service was published by the hon. Lady's predecessor, in June this year, entitled "Renewing the NHS: Labour's Agenda for a Healthier Britain". It was the considered and much fought-over text published by the right hon. Member--

Ms Harman: It was not fought over.

Mr. Dorrell: The hon. Lady says that it was not fought over, but there are some passages in it in which one can almost feel the presence of the right hon. Member for Sedgefield (Mr. Blair), the Leader of the Opposition, leaning over the shoulder of the right hon. Member for Derby, South (Mrs. Beckett), dictating specific text. Nobody will persuade me that it was all the script of one hand. One can see the joins.

Let us go on to look at precisely what is said about the fierce arguments that the right hon. Lady and I used to have when we both previously held the health portfolio. In the run-up to the previous election, the Government introduced a series of reforms. The key reform in that process was the separation of purchasing from provision and the giving to purchasers of health care a choice as to which health provider should meet specific needs for their local population. That reform meant three things: first, calling NHS hospitals to account, establishing an independent accountability mechanism; secondly, giving purchasers a choice about where the health need of a particular area was to be met; and thirdly, because the purchasers had a choice, it meant a degree of rivalry, of friendly competition between the providers of health care. That was the fundamental change that we introduced in 1991.

At that time, the hon. Lady's boss, the present shadow Foreign Secretary, described that reform as "a monumental irrelevance".

Ms Harman: Hear, hear.

Mr. Dorrell: The hon. Lady has to be careful. She needs to read a more up-to-date version of the Labour party text, because this document, which is more up to date than the "monumental irrelevance" text, says--

Mr. Tom Clarke: This is supposed to be a debate on the Queen's Speech.

Mr. Dorrell: This is the Queen's Speech.

The question that the Labour party must face is how it would change the policies that we are pursuing.

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The text on separation of purchasing and provision is now this:

Is that now the policy of the Opposition, or is it not? The hon. Lady appeared to reject it.

Ms Harman: It was then.

Mr. Dorrell: It certainly was not.

Ms Harman: It certainly was.

Mr. Dorrell: The introduction of a split between purchase and provision was the reform over which the hon. Lady fought most vigorously because she said, quite rightly, that that was what created the internal market.

Ms Harman: The right hon. Gentleman is completely misquoting what we said. What we are objecting to is the internal market, with its transaction costs and unfairness. It was always the case before the internal market was introduced that there was freedom of referral and of choice. The internal market restricted that. Before the Government's NHS reforms were brought into place, my hon. Friend the Member for Livingston (Mr. Cook) put forward the proposal that we should have a separate planning function and local devolved management, but what we never agreed with then, what we warned against then and profoundly disagree with now is the unfairness and cost of the internal market.

Mr. Dorrell: Excellent. The hon. Lady is at least on to the key point. Of course it is true that if one separates purchase from provision and gives purchasers a choice-- [Interruption.] Did the hon. Lady say that there should be no choice?

Ms Harman: What I said is that GPs always had a choice. The internal market prevents the choice that was always available for GPs to refer their patients where they thought that they could best be treated. They always had that choice. Indeed, the resources followed the patient. The introduction of the internal market means that the patient has to go where the contracts are placed, and choice is restricted. It was because we are in favour of choice and clinical freedom of referral that we so objected then to the internal market and so object to it now.

Mr. Dorrell: The hon. Lady is completely missing the point, or is eliding two issues. She talks about choice in the referral by GPs. What she does not talk about is the choice of the health authorities as the separate planners, commissioners, purchasers--whichever word one wants to use--of health care. The key question is whether the health authorities have a choice. In terms of creating accountability within the health service, the question is whether health authorities have a choice as to which hospital or provider meets the needs of a particular population. The key change is to introduce a choice for the health authorities between different providers in order that they can compare the service between different providers and create the incentive for the providers to improve their care.

Mr. Spearing rose--

Mr. Dorrell: No, I am going to finish this point.

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That was the key reform in 1991 which the Labour party opposed. It now says that it accepts--indeed, endorses--the separation of purchase and provision. It says something else as well. This is even more important, because it is the fundamental discipline that underlies what the hon. Lady and many others call the internal market.

The same Labour party document goes on to say:

If health authorities are to be given choices in regard to where they place what they call health-care agreements and we call contracts--I accept the amendment--it is clear that Labour has accepted the fundamental change, which was introduced in 1991, and which the present shadow Foreign Secretary described then as a monumental irrelevance.

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