House of Commons Hansard Debates for 20 Nov 1996 (pt 31)

Mr. Smith: The Secretary of State is talking as much rubbish as the Chief Secretary did. He must concern himself with what is happening now in the health service.

The right hon. Gentleman must also show particular concern for the position in Northern Ireland. The Under-Secretary of State for Northern Ireland has publicly acknowledged that the 3 per cent. efficiency savings that the Government have required of the health service in Northern Ireland cannot be made through efficiency alone. The Labour party did not say that and nor did anyone in the health service--it was the Government's own Minister who said that the effect of the 3 per cent. cut in funding for Northern Ireland, supposedly for efficiency purposes, actually involves 1.5 per cent. of cuts in the service. I am surprised that the Secretary of State shows such a cavalier attitude to a Minister in his own Government admitting that the requirements of funding in the current financial year in Northern Ireland mean a cut in service of 1.5 per cent.

Mr. Simon Hughes (Southwark and Bermondsey): The hon. Gentleman will know that I endorse his criticism of both the deficit in funding for this winter and the risk of deficit in the years to come and that I share his commitment to the NHS. However, he owes the House an obligation to confirm whether it is currently Labour policy that the only additional funding committed to the NHS by the Labour party is £100 million to be derived from bureaucracy savings; and that, as the shadow Chancellor confirmed this morning, there will be no more money from the Labour party for the NHS in the foreseeable future.

Mr. Smith: I am surprised that the hon. Gentleman has fallen into precisely the trap that the Tories want him to fall into. Before we can go with any real confidence to the Chancellor, the shadow Chancellor or the taxpayers of this country to argue for additional funds for the national health service, we have to be able to demonstrate that every single penny that is currently raised and spent is being spent wisely. I have to tell the hon. Gentleman that that is not the case at the moment--it is self-evidently not the case from the bureaucratic procedures that have been introduced with the internal market.

Indeed, it is precisely that competitive internal market that is worsening the current winter crisis. It is setting hospital against hospital and doctor against doctor; it is leading to the fragmentation of the service and a lack of strategic planning; and it is distorting decisions on patient care.

Mr. Cynog Dafis (Ceredigion and Pembroke, North): Will the hon. Gentleman give way?

Mr. Smith: I have given way a lot, but I shall give way for the final time to the hon. Gentleman.

Mr. Dafis: The hon. Gentleman speaks of hospitals being set against hospitals. May I draw his attention to

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the situation in mid-Wales, where it is clear that the only way in which Ceredigion and Mid-Wales NHS trust will be able to cope financially next year is by either reducing the range of services at the district general hospital, or closing community hospitals? Is not that an intolerable dilemma?

Does the hon. Gentleman agree that community hospitals have an essential place and that trusts should not be put in that sort of position? Will he make it clear that his party, when in government--I ask this question in all sincerity--will ensure that hospitals and trusts of that sort will be protected against the unreasonable rigours of the internal market?

Mr. Smith: The hon. Gentleman is right to draw attention to the problems confronting community hospitals and cottage hospitals throughout the country. The Conservative Government told us at the Tory party conference that they believed that reinventing the cottage hospital was the way forward. They are right to regard that as an essential ingredient of a good-quality health service of the future, but perhaps they can tell us why they have closed 250 cottage hospitals in the past five years. As always, the Government's rhetoric on the Tory party conference platform is not reflected in what is happening in the health service.

The introduction of the internal competitive market has introduced a two-tier service into the NHS. Anyone who doubts that need only consider what is happening in Lincoln County hospital. It has written to all non-fundholding GPs in its area, saying that it is cancelling all out-patient appointments for the rest of the financial year; but out-patient appointments are continuing for the patients of fundholders.

Norfolk and Norwich hospital has cancelled all routine surgery for patients of non-fundholding GPs. Edinburgh Western General hospital has told patients of fundholders that they can be given diagnostic scans in one or two weeks, but patients of non-fundholders must wait a year.

Yesterday, The Times published a letter by the consultant orthopaedic surgeon at St. Thomas' hospital, just the other side of the river from the House. He said:

"At St. Thomas' Hospital surgeons have been advised by the local purchasing authority that it will pay only for patients who are medically urgent or who have been on the waiting list 18 months. A fundholding patient can be seen and treated much more quickly."

That is the reality in hospital after hospital throughout the country. The patients of fundholders are able to obtain access to treatment in a very different way from patients of non-fundholders. That situation is a fundamental breach of the principles of equity, fairness and equal access to treatment that are supposed to be at the heart of the national health service.

Mr. Dorrell: The hon. Gentleman has just made an oft-repeated charge against the fundholding scheme. It is a golden opportunity for him to tell the House his policy for the future of fundholding.

Mr. Smith: Before I do so, perhaps the Secretary of State will tell us what he will do about restoring equity to the national health service, because the Government in which he serves and his policies have created the unfairnesses and the injustice. It cannot be right that

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patients living in the same street, with the same condition and the same needs, are treated differently because they have a different type of general practitioner.

The Secretary of State says that everyone now accepts the market changes that the Government have introduced. He said frequently on radio and television last week, backing his White Paper, that he was seeking to draw a line under the changes to the health service because everyone agreed with them now, so he wanted to move on to other things.

I must tell the Secretary of State that everyone does not agree with the changes. One of the reasons why we do not agree is that the two-tier nature of the service that has been created fundamentally undermines what the NHS is supposed to be about. As the hon. Member for Southwark and Bermondsey (Mr. Hughes) pointed out, we want among other things to take money out of unnecessary bureaucratic procedures--the invoices for every patient, the paperwork chasing itself from one end of the system to the other, and the fact that a hospital such as Great Ormond Street each year has to establish 60 contracts with health authorities around the country and 1,500 contracts with fundholding practices. There are now 20,000 more managers in the NHS than there were five years ago and 50,000 fewer nurses. That speaks volumes about the Government's priorities for the health service.

The British Medical Association estimates that the internal market bureaucracy which the Government have imposed on the health service costs £1.5 billion a year. Certainly, we want to take money out of red tape and put it into patient care, because that is what is desperately needed.

Ministers will say that everything is fine because of the Prime Minister's commitment to increase funding for the health service year on year. The people of Britain will recall that he is the same Prime Minister who promised tax cuts year on year at the election, yet the Government have ended up putting up taxes 22 times since then.

What does this supposed commitment from the Government actually mean?

Mr. Dorrell: More money.

Mr. Smith: How much more money? How much do the Government actually mean to spend on the health service? What are the figures? The Chancellor of the Exchequer gave a revealing interview just a few minutes after the Prime Minister had made his speech to the Conservative party conference. On Sky News, a reporter pressed the Chancellor on how important the commitment was. "What is the minimum?" he asked. The Chancellor replied:

"Oh well, there's . . . What we actually did was not say"--

whereupon the reporter interrupted as follows:

"You can't say. It could be £1 above inflation!"

The Chancellor replied:

"We've not planned for five years ahead, it could be a lot of, um . . . everything depends on getting the economy right."

So much for the pledge that the Government have given us--it all depends on getting the economy right. Under pressure from the reporter, the Chancellor had to admit that he could not say what the expenditure would amount to.

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It is always useful to read the book instead of gazing into the crystal ball. During the 20 years to 1992, under Governments of both political persuasions, average real-terms growth in expenditure on the health service--even under Lady Thatcher--was 3.1 per cent. And what have the Government managed during the past five years? They have managed an average of 2.9 per cent. The Red Book which accompanied last year's Budget tells us that there will be a 0.6 per cent. increase in real-terms NHS-expenditure next year, and a 0.1 per cent. increase the year after that. If the Government match that, they will have fulfilled the Prime Minister's promise--but by an amount way below the solid average rate of increase achieved by previous Governments.

We are told that the Secretary of State for Health has fought the good fight with the Chancellor and secured extra resources over and above 0.6 per cent. for next year. I expect that the sum will be rather more than the £500 million that has been leaked to the press, probably by his own Department, because he likes to massage public opinion in advance and create the expectation of a particular figure. Lo and behold, when a larger amount is allocated, a great triumph is proclaimed.

Whatever the figure is, I bet you, Madam Deputy Speaker, that it will be below the 3.1 per cent. average that previous Governments achieved. For the record, the last five years of the Labour Government achieved a 16 per cent. increase in real-terms in national health service expenditure. During the past five years this Government have achieved a real-terms increase of 14 per cent., so they have performed worse than the previous Labour Government and we will take no lessons from them about our commitment to the funding of the NHS.

The Prime Minister made no mention of capital spending in the national health service. There is no mention of it in the White Paper. There is no mention of the Government's 17 per cent. cut in capital spending in the health service. They will tell us, of course, that the private finance initiative will close the gap. That is what they told us in the Red Book last year. At the time of the Budget last year, the Red Book stated:

"Several large hospital private finance schemes are due to complete the procurement process and receive approval in 1995-96"--