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Mr. Michael Portillo (Kensington and Chelsea): I want to talk about money and pick up on the excellent speech that my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) made. I also want to show that the way in which we fund the health service is largely an historical accident, and not replicated in any other country in the world.

The source of money in any society is its citizenry. However a service is funded--through insurance or taxes--the people of a country are the only source of money. However, it is easier to raise money for a purpose such as the national health service if the funds available are numerous and varied. If there are several pots from which to draw money, the strain is far less than when the entire burden is placed on one source: in the case of the NHS, taxation.

Mr. Casale: Will the right hon. Gentleman give way?

Mr. Portillo: I shall not give way at all.

The method of funding the NHS in this country came about in an arbitrary manner. Beveridge, who produced his report in 1942, tackled the NHS only briefly. None the less, he commented that

by which he meant previous insurance contribution--

    "is the ideal, better even than free service supported by the taxpayer."

Bevan devised the idea that the service should be funded only by the taxpayer. In a recent history of the NHS by Geoffrey Rivett, he stated that

    "few other countries, outside the Eastern bloc, followed the . . . route"

that Britain took. However, even Nye Bevan recognised that the NHS could survive only if it leant on the private sector. He realised that he could not afford to pay consultants to work in the NHS for the money that was necessary to engage their services. He permitted them to work privately and allowed pay-beds in NHS hospitals. He said:

    "I stuffed their mouths with gold."

In other words, he bought off consultants. Labour Members know that that is true. For some Labour Members, especially the hon. Member for Wakefield (Mr. Hinchliffe), to talk of the private sector as though it were evil or inimical to the NHS is not only stupid but unhistorical. The NHS has changed little, and continues to depend fundamentally on a cross-subsidy from private patients, which enables it to have consultants' services at cut prices.

Bevan invented the principle that the health service should be funded almost exclusively by taxpayers. As Labour Members know, he and the rest of the Labour Cabinet fell out about that because even the Labour Cabinet that introduced the NHS favoured prescription charges and charges for spectacles. Many supported charging for hospital stays. Even the Labour Government who introduced the NHS believed that it could not survive on taxpayers' funding alone.

When Nye Bevan resigned, the right hon. Member for Chesterfield (Mr. Benn)--who was a witness to all those

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events and is in the Chamber now, I think because I told him that I would be quoting him--said, most interestingly:

    "On this question of 'principle' of a free health service, it is nonsense. There are many national scandals it would be costly to correct. This is not a matter of principle, but to the contrary it is a practical matter. There is only one test we can apply and it is an overall one: 'with what we have and can get by way of revenue, how can we lay it to the best advantage of those who need it most?'"

Mr. Tony Benn (Chesterfield): The right hon. Gentleman said that he would quote from the diary. It was from this seat that I heard Aneurin make his resignation speech. If the right hon. Gentleman reads a little further, he will see that I was in favour of increasing income tax to finance the service. Perhaps he will do me the justice of quoting what I wrote 49 years ago.

Mr. Portillo: I am most grateful to the right hon. Gentleman, and my purpose in warning him that I would quote him was intended to enable him to be here if he wanted. His practical approach of all those years ago contrasts sharply with the dogmatic approach of his party's Front Benchers in today's debate. The irony is that Bevan--who resigned in 1950 and was regarded as an outcast, at least by the Labour Cabinet and even by much of the Labour party--subsequently became a hero, and the idea that the health service had to be funded from taxpayers' money alone was raised to the status of a dogma. That dogma, I am afraid, has dogged the debate ever since.

In 1949, the health service absorbed 3.5 per cent. of gross domestic product. Today, that figure is still under 6 per cent. Over 50 years, there has been a minimal increase in the percentage of GDP dedicated to the health service as people--[Interruption.] I do not know what the hon. Member for Liverpool, Garston (Maria Eagle) is crying about. As every Member of the House knows, this country contrasts sharply with most others where health services have not been funded exclusively by taxpayers. Let me cite figures that appeared in The Times yesterday: Britain spends £889 per head of population; France, £1,433; and Germany, £1,634. We have heard that the United States spends twice the proportion of GDP that we do, but it may astound Labour Members to know that 43 per cent. of its health spending was spent by the public sector in 1993 and it is likely that that figure has increased substantially. That means that the United States public health sector spends more per head of population than the British Government. [Interruption.] The hon. Member for Dartford (Dr. Stoate) shakes his head, but it is so. Getting on for 50 per cent. of health spending in the United States is spent by the Government. If that is divided by the population, the figure is more than we ourselves spend.

I want to get on to the point about diversity of sources. In the Netherlands, 68 per cent. of health spending comes from social health insurance; 14 per cent. from private insurance; and only 10 per cent. from taxes. The insularity of the Labour party shocks me, as does the idea that a country that is only a few miles away has a system that must self-evidently be rotten or imperfect. The Secretary of State said that he did not want to look at Germany because things did not work there. That must be news to the Germans, but, for the record, about 14 per cent. of health spending in Germany comes from the Government. Here is the appalling fact for us all to face: not only is the

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NHS not regarded as the best health service in the world, but we now have the most inequitable system in the world. I do not know of many countries where having money makes as much difference as it does in this country to the treatment received. We know that a person with money can get an operation immediately, and that a person who does not may have to wait several years.

Maria Eagle (Liverpool, Garston): Eighteen years.

Mr. Portillo rose--

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but may I say to the hon. Lady that the silence of parliamentary private secretaries is a wondrous thing?

Mr. Portillo: Given that this country has what appears, at least on paper, to be the most socialist of all health services that I can think of--as Geoffrey Rivett would say, at least outside the old eastern bloc--it is a national disgrace that this is the country where having money makes the biggest difference to whether a person receives timely health treatment.

Laura Moffatt (Crawley): Will the right hon. Gentleman give way?

Mr. Portillo: No, I am about to end my speech.

There is an extraordinary paradox: the Prime Minister says that he wants to modernise Britain, but on the health service he is completely paralysed and unable to look outside the blinkers of the way in which we have done things for 50 years. The right hon. Gentleman regards himself as outward looking and internationalist and wants to be at the heart of Europe, but apparently cannot see through the fog of the channel to look at how things are done differently in different places. It is extraordinary to see such a Prime Minister so dug in and so dogmatically wedded to everything that we have done in the past and to the way in which we have done it. There is no other part of the heritage of the Labour Government of the 1940s to which the Prime Minister is wedded in such a way. Exclusively, apparently, the health service has to remain frozen and preserved in aspic.

The Prime Minister's comments have been disappointing and unworthy. The slogan that has been developed--"the only alternative to modernising is privatising"--is downright dishonest, and many of my right hon. and hon. Friends were deeply depressed that the new Secretary of State was content to sloganise and wanted to make the NHS an election issue, apparently refusing to address the serious point. My conclusion is that Nye Bevan may indeed have done a great service to this country by freeing its people from fear of medical bills, but that, by raising to the status of dogma the financing of the national health service by the taxpayer, he has frozen in fear, in perpetuity, the politicians who ought to be addressing this serious issue.

6.27 pm

Laura Moffatt (Crawley): I have a couple of minutes to make my points, in particular about staff. I have been astonished by some of the comments of Conservative Members. There were amazing understatements, such as

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that from the right hon. and learned Member for Rushcliffe (Mr. Clarke), who said, "I believe that we did not leave the reforms of the health service quite at the point at which we would have liked." The right hon. Member for Kensington and Chelsea (Mr. Portillo) said that the health service is preserved in aspic, as though the only issue relating to modernisation is the way that it is funded. Was he entirely satisfied with the state of the NHS when he lost his job in 1997? I suspect not, if what he said today is true.

It is dishonest of the Opposition not to say that the so-called reforms that they put in place have caused these difficulties because they have. There is no question about that. We have gone down a path that has caused the greatest difficulty for our staff in the NHS and the Labour Government are making sure that we get back on the straight and narrow, get people back into the health service and properly respond to their needs, particularly in cash. However, that is not the only issue. It is right and proper to reward nurses, but no one could do the job just for the money.

Not one Conservative Member talked about the safety issues facing the NHS. If people are our most precious commodity, as they are in the NHS, we must respect them and understand that they want to work in an NHS that is safe and does the job that they as professionals expect it to do. It is important that we respond properly to their needs. For example, in the south-east, the availability of affordable housing is an issue and we have to make sure that people can work in places where it is extremely difficult to recruit. The NHS becomes unsafe because we cannot get people to work in it.

We talk about beds, beds, beds and say that there are not enough in the NHS, but that is not the issue. One can go to Ikea and get as many beds as one wants. This is about the people who are working to ensure that the patients in the beds are safe, and are being cared for according to the standards that we all expect.

The modernising agenda is there. The Labour party is responding to the needs. We, not the Conservative party, are listening to people, and that is why we will get it right.

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