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Mr. John Bercow (Buckingham): I am grateful to my hon. Friend for giving way. As usual, he is intellectually right, but is not the reason why the Government may have a problem with the argument that although they have no known ideological objection to children, they have a known and inveterate ideological objection to private health insurance?

Mr. Willetts: When my hon. Friend said that I was winning the argument intellectually, I knew that that was a polite way of saying that he thought I was losing. He may well be right about the reason why the Government may not accept the amendment--because of their hostility to private health care.

I end my brief comments by referring the Minister of State yet again--I promise him that it will be the last time today--to what the Labour manifesto states on the subject. I found a couple of copies of the Labour manifesto remaindered in the fiction section of a bookshop, and I have enjoyed citing quotations from it all afternoon. On taxation, it states:

Taxation is not neutral in the way it raises revenue. How and what governments tax sends clear signals about the economic activities they believe should be encouraged or discouraged, and the values they wish to entrench in society.

That is why my hon. Friend the Member for Buckingham (Mr. Bercow) was absolutely right. If the Government oppose amendment No. 63, it is because they do not like private health care and private medical insurance. That is

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wrong and irresponsible, especially in view of the pressures on the health service. We therefore urge the Government to accept the amendments.

Mr. Laurence Robertson (Tewkesbury): Unless the amendments are accepted, the Bill will discourage people from becoming good employers. After all the Government have said about encouraging people to be good employers, they should accept such amendments, which will enable people to become good employers by encouraging them to look after their staff.

My hon. Friend the Member for Havant (Mr. Willetts) gave some good examples of charging income tax but not national insurance. He could have gone on to say that tax but not national insurance is charged on salaries that are above a specific amount. There are many different ways of viewing the matter. It is wrong of the Government to suggest that there are precedents and that, if something is subject to tax, it automatically has to be subject to national insurance. That is wrong and inconsistent.

I believed that the Government intended to encourage employers to provide child care facilities. We have sat here time and again and listened to such proposals. I would therefore be surprised if the Government did not accept amendment No. 62.

Our national health service is struggling and we have to find not only more private provision, but more money for the health service. We should therefore try to do that. If we are to build the sort of health service that everybody wants and that people rightly demand nowadays, we have to find new ways of putting money into the health service or any health care provision. It would therefore be rather perverse to discourage employers from providing money that would relieve the strain on the health service.

With those few remarks, I support amendments Nos. 62 and 63.

Mr. Desmond Swayne (New Forest, West): The Minister must explain why amendment No. 62 is not a Government amendment. If the Government do not take this opportunity to implement the Chancellor's proposals, what opportunity will they take? I look forward with interest to finding out why the Minister has not introduced such a proposal, never mind his reasons for not accepting the amendment.

In addition to the comments of my hon. Friend the Member for Havant (Mr. Willetts) on amendment No. 63, it strikes me that it is an employment-creating measure. Many small businesses provide insurance through the sort of cover with which the amendment deals because they cannot afford to lose key individuals through medical problems for a prolonged period. That would have detrimental consequences for the employment opportunities of other personnel in the small firm. They therefore provide for private health care insurance so that there is no delay when medical treatment is required for conditions such as hernias. We should encourage such activity by accepting amendment No. 63. That is desirable and will create greater efficiency in the workplace.

With respect to what my hon. Friend the Member for Tewkesbury (Mr. Robertson) said, the Prime Minister has attached a target to the percentage of gross national product that we should spend on health care. He cited

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the European average, but comparable economies such as Germany and France spend a great deal more on health care than Britain--approaching 10 per cent. At the current rate of growth in health expenditure, it will take us 19 and 25 years to achieve their respective levels of provision. Those countries achieve those levels by relying on private sector funding, which is precisely what amendment No. 63 would promote. It may be the answer to the problem for which the Prime Minister has been seeking a solution, and I urge the Minister to give it full consideration.

Mr. Quentin Davies (Grantham and Stamford): My hon. Friend the Member for New Forest, West (Mr. Swayne) pertinently asked why the Government have not tabled such amendments, but we shall not receive a frank answer to that question from Labour Members, and the reason for that must be exposed in the debate. The Government have a double agenda, which they do not want to reveal explicitly to the electorate, but which my hon. Friend the Member for Havant (Mr. Willetts) has exposed, and usefully so, by tabling the amendments.

The first part of the double agenda is the extension of employers national insurance contributions to such benefits. That is one of a range of stealth taxes that have been imposed on the British people since they misguidedly voted for a Labour Government in 1997. They were not least misguided by the Prime Minister's explicit promise, "We have no plans to increase taxes at all." That was a thoroughly dishonest promise: the pensions tax was introduced within a few weeks, there have been enormous increases in petrol duty, and married couples allowance and mortgage interest relief have been removed--an endless series of stealth taxes. The proposal is simply another in the series and it cannot be understood except against the background of the covert Government policy of increasing the tax burden while pretending to the British public that it is not increasing at all. The amendments have exposed that particular purpose and it is no surprise that the Government are not only not adopting them, but, I am convinced, will oppose them if my hon. Friends decide to put them to the vote.

The second part of the agenda is also covert, but it has already been revealed as it has surfaced in a number of contexts and we ought to be alive to it: the Government intend to run down private sector medicine, private sector provision and private health insurance for the most destructive of ideological reasons. That cannot be in the interests of the country's health, and I shall explain why in a moment.

The Government's agenda has already manifested itself in the removal of the tax break provided by the previous Conservative Government to people of retirement age for paying private medical insurance premiums. That compensating tax break was provided because people beyond a certain age, and certainly those in retirement, have to pay much higher premiums, but it has been taken away. That was also a stealth tax, though it has never been admitted as such, and an attack on the private medical insurance system. The Government want to reduce the flow of premium income to the private health sector and the proposal is part and parcel of that agenda.

The Government are penalising employers by taxing them for providing such benefits to their employees and people out there who elected us to the House will think that particularly cruel as the national health service is

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breaking down. This winter, the NHS has been in an unprecedented crisis. Waiting lists are increasing, and the nasty new phenomenon of a waiting list to get on a waiting list has entered the system in our country--and our country alone among EU countries, as my hon. Friend the Member for New Forest, West said.

4.45 pm

Against that background, the Government want to penalise employers who try to help their employees because the national health service is falling down and may not be there when they need it. That is bad not only for the employers who are being penalised, but for the health of the country as a whole. The effect of the Government's proposals will be to reduce the total flow of funds through private health insurance premiums and the private health insurance system into the provision of health care. That is bound to happen. That flow will be reduced unless amendment No. 63 is adopted so as to restore the position. As night follows day, if the price of something is increased, the demand for it is reduced. The net price to employers of providing such protection will be increased by the Bill unless it is amended.

We should clear our minds of any ideological prejudice on this matter, and consider the practical consequences of voting through the Bill without this amendment. If the amendment is not accepted, it will be very bad for the health of the nation for two reasons. If people have their own provision and can purchase private sector care, they no longer claim on the national health service. People can be taken off NHS waiting lists if their employer is providing private sector cover for them, and others who are not lucky enough to have an employer who can afford to provide such cover can be brought forward on the waiting list, all other things remaining equal. Under the Labour Government, no doubt the waiting lists will get worse, but all other things being equal, if the amendment is accepted, the position will be alleviated not just for the beneficiaries of private sector insurance, but for those who do not enjoy such private sector cover.

Another aspect may not have occurred to the Minister of State. More resources coming into the health service means that more people are employed, and that those who work in the private sector and the NHS are provided with a higher total income than they would otherwise receive. It is well known that many consultants practise in the health service under NHS contracts for four days a week, and are at liberty on the fifth and sixth day--they often work on Saturdays--to provide care for their private patients. Those private patients do not therefore have to wait in line, and the consultants, junior doctors and nurses get more income than they would get if we did not have that system.

If doctors and nurses were deprived of that income, the gap between medical earnings in this country and those in other EU countries or in the rest of the civilised world would increase even further. People would be dissatisfied with that, and fewer people would take up a medical career. Many people who practise medicine--especially the best people--would go abroad. They would obviously be allowed to work in EU countries, but they could also work in much of the world, even in countries where work permits are required. It is easy for a qualified doctor or nurse to acquire a work permit. There would be a real

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loss. It would be a double whammy attack on the provision of health care if the Government were allowed to proceed in that direction.

These two amendments are an attempt to save the country from a further manifestation--one more instalment--of the Government's two agendas: stealth taxes and the desire to penalise and ultimately to undermine private sector health provision. Those are two important issues. They are no less important because the Government continually try to bamboozle the British public so that people do not realise what agenda they are pursuing. On those two bases, we should support the amendments tabled by my right hon. and hon. Friends.

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