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Mr. Wilson: That depends--

Mr. Deputy Speaker: Order. I seek an assurance that the point of order is not one on which I have ruled so far.

Mr. Wilson: It is a separate point of order.

Mr. Deputy Speaker: By definition it is a separate point of order, since a different hon. Member is raising it. I wish to make it clear that I will not take further points of order on the issue raised by the hon. Member for Hamilton. If, however, it is an entirely separate point of order, I shall be most happy to listen to the hon. Gentleman.

Mr. Wilson: You will have to be the judge of that--

Mr. Deputy Speaker: Order. The Clerk will now proceed to read the Orders of the Day.

Mr. Wilson: On a point of order, Mr. Deputy Speaker--

2 Dec 1996 : Column 681

Orders of the Day


Order read for resuming adjourned debate on Question [26 November].


Motion made, and Question proposed,

(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable; or
(d) for any relief, other than a relief which--
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.--[Mr. Kenneth Clarke.]

Question again proposed.

Budget Resolutions and Economic Situation

[Relevant document: European Community Document No. 9002/96, concerning the Council Recommendation to the United Kingdom with a view to bringing an end to the situation of an excessive government deficit in the United Kingdom, prepared in accordance with Article 104c(7) of the Treaty establishing the European Community.]

4.12 pm

The Secretary of State for Health (Mr. Stephen Dorrell): I welcome the fact that I am debating this afternoon with the right hon. Member for Derby, South (Mrs. Beckett). It is quite like old times: she was the first of the three shadow Health Secretaries whom I have faced in my time as Secretary of State for Health. I shall spend some of my speech dealing with issues for which she is now responsible, but before moving on to them, it is worth reflecting on the fact that the Opposition plan to spend the whole Budget debate without putting in the shadow Health Secretary to speak on an issue at the very foundation of the financing of the health service--the decisions taken by the Chancellor of the Exchequer on health service funding.

I think it extraordinary that the Labour party should not see fit to field the shadow Health Secretary in the course of the Budget debate. Perhaps that is being done to protect him from the need to produce answers to questions about Labour's intentions--if it ever took office--with respect to financing the health service. This debate would have been an ideal moment for the shadow Health Secretary to answer the questions that he has thus far avoided--

Mrs. Margaret Beckett (Derby, South) rose--

Mr. Dorrell: The right hon. Lady seems keen to answer them, so I give way to her with anticipation.

Mrs. Beckett: As we debated the health service only last week in Opposition time, we find it extraordinary that

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the Government have not chosen to debate the creation of wealth on which funding for the health service and everything else depends.

Mr. Dorrell: The right hon. Lady need not worry about that, because I am coming to the financing of the health service, industry and the economic base. She should have been here last week if she thinks that the shadow Health Secretary answered the questions on the financing of the health service during that debate.

I shall begin with the Budget announcements that my right hon. and learned Friend the Chancellor made on the national health service. Last week's Budget shows clearly the Government's commitment to the NHS. In the context of a public spending round in which the Government faced difficult choices and decisions, they identified three priorities for public expenditure: education; law enforcement; and the national health service.

The biggest growth in this year's Budget--[Interruption.] I am pleased to welcome the hon. Member for Islington, South and Finsbury (Mr. Smith). I was bemoaning the fact that his party had not given him the opportunity to answer the questions that he promised to answer about Labour's plans for financing the health service.

The Government plan to spend £1.6 billion extra on patient services in the next financial year. That is a 2.9 per cent. real terms increase in resources available for patient care--£930 million of real growth available to the NHS. It is £930 million extra for patient care, over and above the amount necessary to compensate for inflation. That substantial growth allowed me to make several announcements last week, targeting new money at the priorities facing the NHS. First, £100 million will be spent on developing primary care.

Mr. Simon Hughes (Southwark and Bermondsey): As the Secretary of State knows, I welcome the new money. Before we get on to the details, however, will he clarify the basis of the calculation? First, will he confirm that it is based on a 2 per cent. inflation rate and that inflation is currently at 2.7 per cent? Secondly, will he confirm that it excludes any extra NHS inflation, whereas for every year of his Administration there has been extra inflation in the NHS--it is currently about 1 per cent.--which has not been included? Thirdly, will he confirm that, according to his figures, after last week's Budget, the health service budget will increase by 0.9 per cent. in real terms, although if we take account of NHS inflation and the higher inflation rate, it will increase by considerably less?

Mr. Dorrell: I do not acknowledge the last figures that the hon. Gentleman quoted, but it is true to say that the gross domestic product deflator underlying the real terms calculation is 2 per cent. Independent of all that, however, is the fact that £1.6 billion extra will be made available for patient services in the next financial year. If the hon. Gentleman wants to feed in different inflation indicators and assumptions, that is up to him.

A cash increase of £1.6 billion in the funds for patient care will be made available next year compared with this year, which is why I can allocate £100 million of development money to the primary care sector. That will allow us to continue to build on our record, which has

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seen a transformation of primary care in the national health service during the past 17 years. The Government have set out clearly our plans for the future of primary care, particularly general practice and general medical services within primary care.

There are three legs to our plans: we shall continue to develop GP fundholding; we shall introduce more flexible contracting on a pilot basis through the Bill that is currently in another place; and we shall provide £100 million of extra cash from the Budget announced by my right hon. and learned Friend last week.

Mr. Kevin Hughes (Doncaster, North): When the Secretary of State goes through that long list, will he tell us about the extra charges that he will impose on sick people, particularly the extra 15p on prescription charges? Since the Government came into office in 1979, prescriptions have risen by about 1,000 per cent. in real terms.

Mr. Dorrell: Prescription charges have gone up by exactly the rate of inflation. I assume that, had I used the calculation of the hon. Member for Southwark and Bermondsey (Mr. Hughes), they would have gone up rather more.

The Government's way forward for primary care is a three-legged stool: GP fundholding; more flexible contracts on a pilot basis; and extra cash from this year's Budget. We need to hear what Labour's alternative would be. The hon. Member for Islington, South and Finsbury has been telling the press for some days that he is to make a major speech tomorrow on the future of GP fundholding under the Labour party. He cannot contain his excitement and wants to share the good news well ahead of the speech. By the end of last week, he was already briefing journalists. In the Daily Express I read:

[Interruption.] The right hon. Member for Derby, South should hear this, as she was so keen on the abolition of fundholding. We are led to believe that her leader

    "has vetoed plans to scrap the Government's fundholding scheme . . . Next Tuesday Shadow Health Secretary Chris Smith will announce that a Blair government would allow family doctors to carry on buying care for their patients."

Mr. Simon Hughes: There is a surprise.

Mr. Dorrell: We have not yet heard the detail. We shall study the speech of the hon. Member for Islington, South and Finsbury with great care tomorrow. We want to know whether GPs who currently have the right to decide, on behalf of their patients, where those patients' interests lie in the national health service will retain that right to decide. That is the first test for the hon. Gentleman.

The second test for the hon. Gentleman is whether he would close the list to every new GP coming forward, so that under his proposals new GPs with new ideas would be prevented from trying them out for the benefit of their patients.

Those are the tests that the hon. Gentleman's proposals must pass: who decides, and is the list open? If he fails on either question, he is abolishing fundholding. The right hon. Member for Derby, South will like that, but the

2 Dec 1996 : Column 684

almost 60 per cent. of GPs in Britain who have opted for fundholding because they think that it offers the best scope for their patients will not like it.

That is the first leg of the Government's health policy, reinforced by the decisions that my right hon. and learned Friend the Chancellor announced in the Budget. The second leg is a £100 million increase in the resources targeted at two particular pressures in the hospital service. I was pleased to announce a programme whereby £24 million would be targeted at improving the provision of intensive care and high dependency beds in our hospitals, and £76 million would be targeted at easing bed blocking so that people are not kept in hospital unnecessarily.

Those two projects respond to known pressures, and the health service can start developing those proposals in the current year, as the Government have announced an extra £20 million this year to allow those programmes to get under way immediately. We have asked health authorities to submit bids targeted at those specific objectives by 23 December.

The third specific targeted increase that I announced last week was an extra £50 million for mental health. One of the first things that I did when I became Secretary of State for Health was to launch an audit of our mental health plans. The audit was led by my hon. Friend the Minister for Health and was designed to ensure that every health authority is aware of the need to deliver a full spectrum of care for those who are mentally ill. We allocated £90 million of growth money in the current year to the achievement of that objective. Next year's budget allows me to allocate a further £50 million, together with the further increase in the mental illness specific grant to local authorities. That reflects the importance that the Government attach to the development of mental health.

Finally, of the targeted funds, £64 million is allocated to expand our commitment to training the doctors and nurses of the future, to ensure that we have the qualified and professional staff the health service needs.

Those are the central priorities to which I allocated specific money last week. In addition to that, the average purchasing power of health authorities in England will rise next year by 2.4 per cent. in real terms--a minimum increase in any health authority of 1.4 per cent. in real terms. All that is made possible by the Government's commitment to real extra cash for the national health service.

That represents the 19th successive real terms increase in health service budgets since 1979. There has been an average increase of 3 per cent. above the rate of inflation in every one of the 18 years that the Government have been in office, and it will continue into the first year of the next Parliament. Health service funding has increased by three quarters in real terms since 1979 and by 30 per cent. since 1992.

The challenge facing the hon. Member for Islington, South and Finsbury is that the Government will not stop there. My right hon. Friend the Prime Minister has made it clear that there will be real terms increases year on year under the next Conservative Government and throughout the next Parliament. It is set out in the Red Book: that is the Government's commitment and that is what we will deliver. By the end of the next Parliament, Conservative Governments will have delivered nearly a quarter of a

2 Dec 1996 : Column 685

century of real terms uninterrupted growth. That is our commitment and Opposition Front-Bench Members have so far refused to match it.

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