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Mr. Geraint Davies: We have heard a lot of hot air about the aims and objectives of the amendments in terms of clarity, fairness and helping the national health service. In my view, they represent a cynical attempt to frustrate the Government's efforts to bring about a fairer and more equitable system through the Budget measures relating to the health service and VAT on fuel.

The facts are clear and simple. We are all aware of the distorted industry views that the Opposition have obtained from various lobbyists with vested interests. The Inland Revenue has published figures that the Opposition have failed to read or to recognise. Between 1990 and 1997, the number of private medical contracts increased from 350,000 to 375,000--an increase of less than 10 per cent.--and the number of people involved rose from 500,000 to 550,000. At the time, the Opposition, then in government, were doing everything they could to make the distribution of power and wealth less equitable, so it is surprising that the number of people using the private sector increased by only 10 per cent. It is clear from the statistics that the demand for private medicine is not elastic at the margins and that the saving that the Government make as a result of the Budget measures will not result in a mass exodus from the private sector. That is rubbish.

Mr. Gibb: If the hon. Gentleman insists on quoting those figures, should he not also quote the overall figures for people of all ages who had private health insurance in the period he mentioned? I suspect that those figures would show a fall in the overall number taking out health insurance, demonstrating that the relief has encouraged those over 60 to take out private health insurance.

Mr. Davies: I think that the overall figure has grown. The relief pays public money to people to do something that they would do anyway. They are quite capable of paying for the services and will continue to do so. It is a regressive relief, in sharp contrast to our stance on VAT on fuel. The reduction in VAT on fuel will help health, because fewer old people will die of hypothermia and cold-related diseases. That is a good investment in public health.

I suspect that the Opposition really want a two-tier NHS in which some people are drained out to the private sector by bribing them with public money. That would undermine the universal stakeholding of the NHS and result in the atomised society that Lady Thatcher often spoke about. It would create an American-style system that costs more overall and leaves a large section of society with no health cover. That is their real agenda,

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but the British people saw through it. That is why we have a Labour Government and why we shall make these changes.

9 pm

Mr. Woodward: We have heard much from the hon. Members for Redditch (Jacqui Smith) and for Croydon, Central (Mr. Davies) about principles. Principles matter a great deal. The hon. Member for Croydon, Central has made much of the importance of vested interests. He referred to the possible vested interests of my hon. Friends. I do not know what their vested interests may be, but my view is straightforward. When debating a health policy, we should always ask whether it will help the patient.

We are all aware that the national health service will consume as much money as can be put its way. There is nothing wrong with that. When resources allow, we should make more money available to the NHS to make more patients better. I am sure that nobody disagrees with that.

Labour Members have not addressed whether the clause will help patients. The NHS still has lengthy waiting lists. We hope to reduce waiting times, but the reality is that waiting lists exist. I do not approach these issues ideologically. In all cases, I apply the acid test. Will the clause help more patients to be treated more effectively and more quickly?

The clause is the application of old-fashioned Labour ideology. We heard from the hon. Member for Redditch a gross dislike of the principle of private medicine. She suggested that the measure was a way of clearing up tax distortions to create a fairer medical system. Is it fair if the measure leads to an individual having to wait even an hour longer?

Labour Members pooh-poohed private medical companies' suggestions that the measure will lead to people withdrawing from private medical insurance policies. It almost certainly will. Labour Members have made much of the suggestion that the changes in relief led to an increase of only 10 per cent. in take-up. Even if we apply the same standard and assume a decline of only 10 per cent. in the number taking up private medical policies, the money will still have to be found to fund those people.

Where will the money come from? We all accept that NHS waiting lists are too long. In their manifesto and in election speeches throughout the country, Labour Members made much of the importance of reducing waiting lists yet, as sure as the sun will rise tomorrow morning, their policy will mean that waiting lists have to increase. They will increase because some people will decide that this measure is the straw that breaks the camel's back--the moment when, due to the loss of relief, they can no longer afford to continue the policy.

Liz Blackman: Several of my hon. Friends have made the point that the amendments are merely a smokescreen--and not a very good one--to hide Opposition Members' total opposition to the Government's policy. The hon. Gentleman is merely illustrating that point. I do not think that he has once touched on the amendments.

Mr. Woodward: The hon. Lady--if she would be kind enough to listen to the answer that she sought--is much concerned suddenly with not discussing the principle. She has suddenly been faced with the reality. She must realise that the statement is effectively, "No, we shall not in any

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way encourage private medicine." In the name of distortion removing, it is possible to remove tax relief from those who would seek to spend their money--and exercise their choice and freedom--on enhancing their medical coverage.

Elsewhere in the Budget, however, the Government will provide as many tax reliefs as they like, such as in the film business. There is an obvious contradiction in the Government's policy. When it comes to pleasing their own particular sector, they are more than happy to provide any tax relief that is requested, but when it comes to looking after patients, due to their ideological principles, bang: down comes the scythe and they will not help people who wish to help themselves.

The kernel is that the Labour party still believes in good old-fashioned Labour envy. It wants to remove the opportunities of those who have saved and remove the opportunities that come from freedom and choice. We see that in the way the Government will sponsor tax relief on films but remove it from those who wish to make proper provision for themselves in their old age.

Mr. Swayne: May I point out to Labour Members that it is precisely because we are so wholly opposed to the principle of the measure that we are attempting to secure, on the basis of the amendments, some narrow relief for the categories that have been described?

I draw to the House's attention the extraordinary topsy-turvy world in which Labour Members appear to live. It has been suggested by a number of them that those who benefit from the relief are somehow getting something unfairly in comparison with other taxpayers. The word "subsidised" was used. The reality is the opposite. It is very simple, but I shall explain it for the benefit of Labour Members.

Someone who is over 60 years old and therefore benefiting from this relief would, having paid their taxes throughout their life, be entitled to NHS health care. Indeed, even if they had not paid those taxes they would still be entitled to NHS health care. Should they find that they need, for example, a hip replacement operation, they would be entitled to apply to the NHS for the operation.

However, this person applies instead to their insurance company and has a private health care operation. The Exchequer and the NHS therefore benefit from the fact that, although a person was entitled to make a claim and therefore incur a charge against the NHS, they have not done so, preferring to take advantage of payments that they have made throughout their life--certainly in the latter part of their life. Far from being smitten by a bill, the taxpayer has enjoyed a relief. In fact, with tax relief at 20 per cent., the general taxpayer has had something of a bargain.

Dawn Primarolo: Follow that! I decided, before today's debate, to consult the book written by Nigel Lawson, now Lord Lawson, called "The View from No. 11", because I thought that he might have something to say about the introduction of relief for private medical insurance. He does, and very interesting reading it makes. On pages 616 to 617, he describes his opposition to the implementation of private medical insurance relief for the over-60s. He says that he was forced to introduce it by the then Prime Minister and that

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Clearly, that embarrassment continues this evening as Conservative Members seek to defend a relief which, even when it was introduced, their own party seriously questioned--Conservatives questioned whether it was right to give a subsidy to people who had already decided to take out private medical insurance.

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