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Mr. Blunt: I should like to bring the Secretary of State back to policy, if he can stop inventing Conservative party positions. Why was it satisfactory yesterday to passport money directly to head teachers, but impossible today for the £660 million of the £2 billion to be passported directly to health authorities? Why must it have strings attached by the Secretary of State and his hon. Friends?
Mr. Milburn: If the hon. Gentleman will wait a moment, I shall tackle that point. I hope that he will be satisfied when I have made my announcement.
Mr. Milburn: So do I, because, like the Liberal Democrats, the hon. Gentleman will never be satisfied. The more we give, the more he wants.
No one--not even the hon. Member for Reigate (Mr. Blunt)--should underestimate the significance of the Budget announcement for the national health service. It constituted a key moment in the history of the NHS.
For more than 25 years, the NHS got by on an annual real-terms increase in funding of approximately 3.2 to 3.3 per cent. a year. The Conservative Government's record during their last two decades in power averaged
less than that--approximately 2.9 per cent. Indeed, in their last full Parliament, it was even less: just 2.6 per cent.
Annual growth of 3 per cent. has landed the NHS in its current position. The system, by international standards, is efficient and fair but there are fewer beds, fewer doctors and fewer nurses than in comparable systems. The NHS is, as the Organisation for Economic Co-operation and Development rightly says, a remarkably cost-effective institution.
In Britain, we rightly take pride in what the NHS does and in what its staff achieve, but we know that it is an institution, which, for too long, has been coping when it should have been thriving. It has been surviving, but it should have been modernising. Now, through this substantial new investment, we have the chance to give the NHS a new lease of life and to reinvent it for the new century.
That is what is now on offer. In our first two years in office, we had to stabilise the public finances. That required a tough approach to spending. I believe that it was the right thing to do. Today the country is reaping the benefit. There are 800,000 more jobs in the economy, a record number of people in work, and a record number of vacancies for work. Investment in manufacturing is growing, and youth and long-term unemployment is falling. A strong and growing economy is providing the foundations for strong and growing public services.
The NHS will now reap the benefit of our approach. Prudence has indeed been for a purpose. We increased NHS investment in our first two years by approximately £2 billion over and above the plans that we inherited. We spent what the country could afford. Yesterday's Budget means that the NHS will have grown by 50 per cent. in cash terms by 2003-04, and by 35 per cent. in real terms. For the next four years, the NHS in England will grow by an annual average of 6.3 per cent. above inflation. That is twice the long-term growth trend.
From today, we can draw a line not only under decades of underfunding, but decades of instability in health service finances. There has been too much boom and bust in the economy, but there has been too much boom and bust in NHS funding as well. We now have a platform of sustained increases in funding which provide a sure foundation for the sustained modernisation that the health service needs.
I do not pretend for a moment that the extra resources that we have provided for the NHS will solve every money problem. Like every other health care system in the world--whether public, private or a mixture of the two--the NHS will continue to have to make tough choices about how resources are best used. It will take time and effort as well as resources to give Britain the modern health service that it needs.
Mr. Owen Paterson (North Shropshire):
Has the Secretary of State considered the fact that advances in gene technology mean that in a short time every citizen of this country will be able to give his general practitioner a profile of his family history and the likelihood of his
Mr. Milburn:
There is enormous potential in gene therapy and in genetic technology advances more generally. They will require changes in the way the NHS provides its services. I say one thing to the hon. Gentleman, as he is a signed-up advocate of the Conservative Front-Bench policy on private health insurance: that will not destroy the NHS, but it will destroy the private health insurance market, for a very simple market reason. Those with the advantage of access to genetic technology and genetic tests will find out whether they are predisposed to certain illnesses and diseases--perhaps cancer or coronary heart disease. What will be the private health insurance industry's reaction? It will fail to insure those people, which will be a logical and sensible market decision.
Those who pin all their hopes on the private health insurance sector as the future for health care improvement in our country have got it wrong, because that will not work. Advances in genetics, gene therapy and gene testing will, in my view, render the private health insurance market, which is already unstable, even more unstable in future.
Mr. Milburn:
Let me continue. The resources provide the chance to address decades of neglect and give the NHS the means to modernise its services. I can tell the House that that process will begin at once. Last week, the NHS Confederation, which represents trusts and health authorities throughout the country, called for a £600 million increase for local health services. Today, I can tell the House that next week I shall make available £660 million direct to health authorities and on to primary care groups, NHS trusts and hospitals in England. They will be able to spend that cash to meet the service pressures that they face and to take forward local spending priorities.
Mr. Fabricant:
Will the Secretary of State give way?
Mr. Milburn:
In a moment. Let me finish what I have to say. Those bodies will be expected to show consistent progress and improvement. There will be incentives to encourage good performance and to eradicate bad performance. We shall ensure that the cash reaches front-line patient services, but it needs to be spent wisely and well.
The money will be paid at stages during the year. The bodies that deliver will receive their full allocation and be free to spend the funds in accordance with their agreed local priorities. Those that are unable to deliver will still receive the bulk of their allocation, but will have more support and, if necessary, intervention. They will have the opportunity to make up any lost allocation in one period by upping their performance in the next. That is about instilling a new performance culture in every part of the health service in every part of our country.
The new resources will help the NHS to run balanced budgets year after year. They will fund new drugs, improve services for cancer and coronary care and help
to speed up treatment for patients. There will be resources to help primary care groups to develop their services and resources to develop intermediate care services, building the bridge between hospital and home ahead of next winter.
I can also tell the House that in the weeks to come I shall make further allocations direct to health authorities, and then on to primary care groups and hospitals. I shall keep a clear eye on ensuring that those allocations help to address the very real health inequalities that scar our nation.
Mr. Philip Hammond (Runnymede and Weybridge)
rose--
Mr. Kenneth Clarke (Rushcliffe)
rose--
Mr. Milburn:
It appears I have a queue of Conservative Members who want to intervene.
Mr. Fabricant:
I am grateful to the right hon. Gentleman for his usual courtesy in giving way. I am sure that he can guess what my question is, because he was present at Prime Minister's Question Time. On the face of it--before we have had a chance to read between the lines--what he says sounds remarkable. It is good news if it is to be believed. Does it mean that he can assure my constituents, let alone people throughout the country, that there will be no more hospital closures?
Mr. Milburn:
It is good news. The hon. Gentleman and his hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) have been asking me all afternoon for an assurance that I will get the money out there. I shall get the money out there: that is what will happen. It will go to health authorities and then on to primary care groups. The primary care groups will decide. Local doctors and nurses are in the driving seat--not bureaucrats sitting in health authorities--and it will be up to them to decide where the money goes.
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