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3.30 pm
Mr. Hutton: I beg to move, That the Bill be now read the Third time.
Today and in Committee we have had the opportunity to look carefully at the Bill and its purpose. We are trying to streamline, improve and manage more effectively the existing scheme for recovering the cost to the national health service of treating road traffic accident victims. We are determined to do that for a number of reasons that we have repeatedly spelt out during proceedings on the Bill.
The NHS needs the extra resources that the scheme will provide, and the Bill is badly needed. It will free hospital staff from the burden of questioning patients when the care and treatment of those patients should be uppermost in everyone's mind. Patients will no longer be confused or worried about a scheme that does not affect them directly.
It is worth emphasising that since the 1930s the insurance industry has had the primary obligation to meet the costs of treating road traffic accident victims. We want there to be no misunderstanding about the Bill.
The scheme will raise a good deal of money for the NHS, not, as some hon. Members wanted, going to another tier of NHS administration--an outcome that the Liberal Democrats tried to secure in Committee--but going directly to hospitals, where it can be used to the immediate benefit of patients. In the overall scale of NHS finance, the amounts may not be great, but they are substantial injections to the budgets of the hospitals that stand to receive them and the sooner the Bill is enacted, the sooner the benefits will be received.
A number of specific concerns have been raised and it would be helpful if I took the opportunity to set the record straight. We reject the accusation that we are imposing a
new tax or a new charge. It is vital to remember that NHS charges can be recovered only when it has been recognised that the patient has a claim against another person in respect of his or her injuries. In such cases, insurers have always known that the victim is entitled to use and claim for private sector treatment if he or she so wishes. The insurer has no choice but to pay. However, insurers have largely escaped paying equivalent NHS charges simply because of the lack of a system for their recovery. The Bill will fundamentally address that by putting into place a new, effective, streamlined costs recovery system.
There has also been concern about the new scale of charges. What is new about the Bill is the move towards recovering amounts more closely in line with the actual costs to the NHS. Many of the points made during scrutiny of the Bill have concerned the move to those new, higher costs and some unease has been expressed about their calculation and their future uprating. Much of that concern has been needless and has involved party political point scoring, primarily by the Liberal Democrats.
The figures have been arrived at openly and honestly using information which is in the public domain and freely available. Our costs have been derived from work undertaken by the Transport Research Laboratory and published in its research paper 272, with co-operation from the police, the NHS and the Department of Social Security compensation recovery unit. The calculations and source data were all contained in the regulatory appraisal--we have nothing to hide.
We have rightly rejected calls for reports to be filed at set intervals on the tariff, the amounts collected and so on. The Bill is no different from any other--including all the previous road traffic measures which have governed NHS charge recovery. Its subordinate legislation, which I understand is the source of some concern to hon. Members, will come before the House in the normal fashion and hon. Members will have every opportunity to question and discuss planned changes. In response to a direct question from the hon. Member for Runnymede and Weybridge (Mr. Hammond) today, I made it quite clear that it is the Government's intention to assist hon. Members in discussing the impact of the Bill and the new arrangements that we are introducing and to make sure that all hon. Members have access to the most up-to-date, relevant and timely information to allow them to reach their own decisions about the operation of the new arrangements.
Some concern has been expressed about the effect of the changes on the motorist. Much of it has been based on ill-informed speculation. Large insurers have gone on record as saying that the measure probably will not affect their premiums, yet the scaremongers persist. Let me make it quite clear today that we have calculated and openly published our estimate of what the scheme would mean if the total NHS charges were averaged out and spread evenly among all drivers. If that were the way in which the insurance industry raised the charges, we estimate that the effect would be an increase of 2 to 3 per cent., or £6 to £9 on the average premium.
Mr. Hammond:
I understand what the Minister is saying, but does he accept that the costs will not be averaged out and will affect some motorists more seriously than he suggests?
Mr. Hutton:
The hon. Gentleman has tended to anticipate my remarks and he has done so again.
The allegation by some Opposition Members that the Bill would affect rural motorists as a specific group of drivers is completely unfounded. The premiums will reflect risk. Drivers at high risk will pay more. Safe drivers should face no increase.
Sir Robert Smith:
Will the Minister give way?
Mr. Hammond:
I should make it clear at the outset, as my right hon. and hon. Friends have done during the Bill's progress, that we do not object in principle to the Government's purpose in introducing the legislation. Indeed, I welcome the shift in the Labour party's thinking that it represents.
The Minister is sheltering--as Ministers have done before--behind the claim that the measure represents no new charge. That is disingenuous. The Minister has made it quite clear that the Bill will increase tenfold the yield from road traffic accident victims. It is currently £15 million or £16 million. Technically I am sure that the Minister is right to say that it is not a new charge, but the impact on the tax and charge-paying public will be that of a new charge. One cannot increase something tenfold and then say that nothing has changed.
To say that, because the charge was there in theory but was not used in practice, starting to use it is a mere technicality and not a change in policy is similar to saying that because we have had nuclear weapons for 50 years, suddenly starting to use them would not be a major decision or a major change.
The Government have also sought to gain some comfort from the fig leaf of indirect charging. I understand the political attractiveness of that, but the fact that insurance companies will pay the NHS charges and then recover the cost through premiums to motorists is not intellectually distinct from directly charging users of the NHS. Worse, perhaps, is the fact that taking the fig leaf and using it to protect themselves has led the Government to set their face against the logic of the Bill, and the way in which, quite possibly, that logic must be extended.
The Bill represents an important turning point. The Labour party has crossed the Rubicon with this measure. After years of arguing against charges, the Labour Government have used precious legislative time not to abolish a charge that was yielding very little, but to beef it up so that it produces substantial sums. The Government
could have abolished the charge in the same amount of legislative time that it has taken to make it effective and productive of large amounts of revenue. It appears that Labour has overcome its objection to the principle of charges.
I do not seek to beat the Government over the head, as this is a small but important victory in the battle to end the dominance of dogma in their approach to the health service, but to begin the rational debate, for which my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) and I have called--as have the Liberal Democrats today--about how to fund the voracious appetite of a modern health service for resources.
The Government and the official Opposition are both publicly committed to year-on-year, real-terms increases in spending on the NHS from general taxation. That is not an issue. Except for a few diehards--who are usually to be found, although not today, below the Gangway on the Government Benches--and the Liberal Democrats, almost no one now believes that we still live in a era where taxes can be jacked up endlessly to meet the demands of the NHS.
Notwithstanding the commitment to year-on-year, real-terms increases--and whether it is 0.5 per cent. more over the life of this Parliament, as the Government are now delivering, or 0.5 per cent. less is very interesting, but makes no real or meaningful impact on the resource constraints facing the NHS--the fact remains that a health service that is funded exclusively from general taxation in an environment of broadly low tax, both domestically and internationally, will remain heavily resource-constrained.
My right hon. and hon. Friends and I argue that without compromising or eroding in any way that commitment to year-on-year rises in spending from general taxation on our health care system, the system in its totality needs more resources than general taxation is likely to be able to provide. To address that issue, we must think laterally. If the Bill signals the Government's willingness to consider any source of funding for the NHS, it is a small but important start to the process.
The basis for considering any method of providing additional funds for health services must be the test of whether it is fair, equitable and sensible. It might surprise the Minister to learn that, for the most part, we believe that the Bill passes that test. It is sensible to introduce it and to put on the statute book the measures that the Minister proposes.
The principal area where, in our opinion, it does not pass the test--and the principal concern that we have expressed throughout the Bill's passage--is the discriminatory targeting of the motorist. We have seen the interesting spectacle of two Labour demons colliding in the Bill; the taboo on NHS charges has run smack into the desire to clobber the motorist at every opportunity. The charge on the motorist to be introduced by the Government is regressive, and has an anti-rural basis. It comes on top of the £9 billion of extra taxes that the Chancellor is imposing on the motorist over the lifetime of this Parliament.
In effect, the motorist is being double-taxed. He is being asked to pay more than his fair share into the Consolidated Fund of general taxation through the dramatic increases in motoring taxes proposed by the Government. He is then being asked to pay again, on a discriminatory basis, for his use of the NHS.
The Government have done something else--they have accepted the principle of insurance as a basis of spreading the burden of costs of health care. Indeed, they are sheltering behind the existence of compulsory motor insurance as an argument for the motorist being a unique category. Everybody would agree that the Government would never have considered introducing a £10,000 cap on the charge to be levied on an individual without any means test if the individual himself had had to pay the charge, rather than its being paid by his insurance company and the very considerable costs involved being spread across all motorists through the mechanism of insurance premiums.
There are other areas where those treated on the NHS--often at very great expense--are insured. It is not logical for the Government to ignore that and say that the motorist is in a unique category and everybody else is different. Some poor, rural motorists may find it odd that they are being targeted to pay the additional charges when people returning to the United Kingdom from expensive skiing holidays with broken arms or in need of complex knee surgery--with insurance companies that have paid for their treatment in Switzerland, France or Italy--have their often very expensive treatment here on the NHS, without any requirement at all for them, or more precisely their insurers, to contribute as motorists are being asked to contribute.
Ministers have often said that the principle of equity in the NHS is important, and Labour Back Benchers support that. One is bound to ask, "If motorists, then why not also other insured, compensated victims who need NHS treatment?" I did not know much about the operation of the compensation recovery unit until I started to look at the provisions of the Bill. I have learnt that one of the unit's main functions is to recover benefit that has been paid out in cases where, for example, employers have paid compensation after industrial accidents. If benefit is clawed back by the compensation recovery unit on behalf of the Treasury--where it has been paid out to the victim of an accident who, subsequently, has been reimbursed or compensated by the insurer of the employer--why should the NHS charges that that person has incurred, or has imposed upon the system, not similarly be recovered from insurers?
I cannot understand the logic of the Government's position. They are saying that someone who carries compulsory motor insurance must be expected to pay for the cost to the NHS caused by treating third-party victims, while someone who carries compulsory employers' liability insurance need not reimburse the cost of NHS treatment carried out following an industrial accident or another insured risk--while the insurer must reimburse the cost of the benefits paid out. Where is the logic? There is none--it is as simple as that.
It is unfortunate that the Government have closed their mind to the logic, as that has led to a clearly inequitable outcome, with motorists being the victims. Effective charging is being introduced for one group of the population only, and that charging is being introduced without any form of means testing. Undoubtedly, if the Government were to propose any wider form of charging, they would be looking at the ability of those charged to pay. In this case, everyone's insurance premiums will go up. As Liberal Democrat Members noted, the effect will be highly regressive, and I believe that it will be especially burdensome in rural areas.
The Government have repeatedly assured the House that the proceeds of the charges will constitute extra money and be a little bonus for the NHS hospitals involved. I do not believe that. The original statement of the intention to make the charges effectively collectible was made by the Chancellor in his 1997 Budget. It is not credible to suggest that the revenue to be raised in that way had not been factored into the Government's calculations in deciding what total Treasury spending on the NHS should be. Surely the Chancellor must have considered that revenue as part of the wider equation in setting the Department of Health budget in aggregate.
I am concerned about the impact on individual health authorities. The measure will channel about £150 million from insurers to individual hospital trusts, but it is extremely unlikely that that money will be spread evenly, principally because the incidence of road accidents varies. Certain hospitals specialise in high-level trauma such as is often suffered in accidents, and hospitals near the motorway network routinely treat many accident victims. It is likely that the revenue will be heavily skewed towards such hospitals.
In allocating money to individual health authorities, will the Government ensure that the revenue that a hospital trust receives as a result of the Bill will not be taken into account and used as a reason for reducing the overall allocation to the hospital's health authority from general taxation? I am tempted to suspect that, over time, the Department of Health will take into account the revenue streams flowing to hospitals that specialise in trauma when setting the allocation to the host health authority. At a disaggregated level the money from the charges could be used to reduce the receipts of the authorities involved.
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