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Mrs. Gorman: What would the hon. Gentleman say to an elderly person going into one of our national health hospitals whose card is marked "not to be resuscitated" when, under the previous Government, that person could at least have taken out private medical back-up because tax relief was allowed on it? Such a situation is deplorable.

Mr. Harvey: I am sure that everybody deplores what the hon. Lady describes, but it is an issue of clinical practice and needs to be addressed as such. To suggest that it is pre-eminently a matter of resources is wrong. The situation that she describes is scandalous, but it is not principally driven by resources.

Let me make it clear that the Liberal Democrats have no difficulty with the private sector playing a growing role on the supply side. If those in the NHS who commission care or subcontract it think that they can, in particular circumstances, get better value for money from some element of private sector provision, or if there are temporary capacity problems with which they think that the private sector can help the national health service, so much the better. There is no problem with that. However, that is a world apart from diverting resources that could be used in the national health service into subsidising private insurance for those who, in most cases, already have it.

Over the past year, the Australian Government have offered a rebate to all those taking out private health insurance. In the first nine months, they spent $2.2 billion--nearly £1 billion--on a population a third the size of ours. At the end of that exercise, the number of people taking up private insurance went up by all of 0.9 per cent. For goodness sake, that money could have been used in the Australian health system. The Australian Government have done the equivalent of going into the

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street, picking up a drain hatch and pouring the money down it. If they had wanted to spend that money on health, they could have done it by subsidising the supply side of the private sector. At least they would then have had something to show for it.

The situation in Australia is no different from the situation here. During the 1990s, when the previous Government offered tax incentives to people above retirement age to take out insurance, that had barely any impact on the numbers doing so, and when this Government removed that provision, there was barely any drop-off. This is a dead-weight subsidy to people who already have the insurance.

The Conservatives maintain that that money would not come out of the national health service. I am not about to pre-empt or judge what their costed manifesto will say at the next election. However, wherever the money is coming from, it could have gone into the national health service. There is no way in which the British taxpayer or the NHS patient will get better value for that money by diverting it into private health insurance for people who already have it.

The Liberal Democrats are perfectly relaxed about private sector involvement on the supply side, but we do not believe that taxpayers' money should be used artificially to stimulate the growth of private health insurance. We do not believe that that will give the British taxpayer value for money.

Sir Raymond Whitney (Wycombe): Is the hon. Gentleman aware that the majority of countries in western Europe and Organisation for Economic Co-operation and Development countries have health outcomes--as they are called in the jargon--that are significantly better than those that we achieve? If he accepts that, does he agree that it is worth considering the funding methods adopted by those other countries?

Mr. Harvey: It is fair to say that many other countries have better health outcomes. In our view, that is because they spend a greater proportion of their gross domestic product on health than we do. We believe, for the reasons that I have just outlined, that the way for us to get the British spend as a proportion of GDP up is through greater investment in the national health service. That will secure better value, pound for pound, than using it artificially to stimulate the private insurance market. That is our firm belief, and the hon. Gentleman is perfectly at liberty to disagree with it.

Dr. Stoate: Does the hon. Gentleman agree that America, the largest economy in the world, which spends almost twice as much of its GDP on health as we do but almost entirely in the private sector, has rather worse outcomes than us in most health measures? Does that not illustrate the point that he was making earlier?

Mr. Harvey: The amount that the Americans spend is extraordinary. They spend more even on their state-funded health system than we do, but the fact that so many people in the USA still choose to invest in the private market does not seem to bring about the improvement in outcomes that the hon. Member for Wycombe (Sir R. Whitney) suggested that it might.

Mr. Geraint Davies (Croydon, Central): Will the hon. Gentleman confirm that the position of his party on value

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for money, as articulated by his leader, the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), is simply to pour more and more money into the health service, with no regard for modernisation or change? The right hon. Gentleman has made that clear on many occasions and the hon. Gentleman is making it clear now. Is he not simply talking about putting in more and more money, not about modernisation and change in terms of best delivery and equal access?

Mr. Harvey: I have never heard our party leader say anything of the kind. I have made it clear on innumerable occasions that Liberal Democrats want modernisation, investment and, indeed, reconstruction for the national health service. The consultation that is continuing and the formulation of a national plan are a sensible way to try to do that and Liberal Democrats are contributing ideas in a submission to the Government as to what the national plan ought to be about and ought to do. I will say something about that in a few minutes.

Dr. Brand: Does my hon. Friend agree that one reason why we criticised the Government was that they did not take an opportunity to evaluate what may or may not be useful initiatives. NHS Direct is a good example. There was no report on its pilot stage until it was rolled out across the country. We do not know the effectiveness of £80 million of public expenditure.

Mr. Harvey: That is right. Clearly, we need a combination of additional investment, modernisation and reform. As I have said, we are largely in agreement with many aspects of the modernisation that the Government have undertaken. We think that the reforms in primary care were basically right. We do not necessarily agree with some of the details--we might not have given doctors a majority on the boards--but nevertheless we agreed with the general thrust of the reorganisation.

Again, barring the point that the Conservatives made earlier about affordability seemingly being added to the criteria after the event, we were broadly in favour of the formation of the National Institute for Clinical Excellence, ditto the Commission for Health Improvement. Therefore, it is absolute nonsense to say that we have not been addressing modernisation, or that we are not willing to continue to do so.

Our principal argument is that it is investment that is needed, and that lack of capacity is the biggest single problem. As money goes into dealing with that, it is only right and proper to pay attention to modernisation.

Mr. Hammond: Does the hon. Gentleman also agree with his hon. Friend the hon. Member for Richmond Park (Dr. Tonge), who said in a debate in Westminster Hall two or three weeks ago that the national health service needs more money than the Liberal Democrats have ever proposed?

Mr. Harvey: The Liberal Democrats put forward a manifesto at the election with some commitments to moneys that we wanted to go into the health service, which we stipulated were over and above inflation. As the economic circumstances have improved three years into this Parliament, the state is clearly now able to afford a contribution that is greater than anyone would have thought possible at the time of that election. When we

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make a commitment at election time it is for the minimum that we think that we can do. It does not preclude our coming back later and identifying that, with rosier economic circumstances, more money can be put in.

The long and short of it is that, as we publish our alternative Budget each year and publish our costed manifesto, we will commit Liberal Democrats to putting extra funds into the health service and we will say how much and from where it will come. Like the Conservatives, we will no doubt be poring over the comprehensive spending review when it comes out shortly and taking stock of what we think that the nation can afford in the light of that.

Increasing capacity has to be the first priority. We also think that there are problems with accountability and transparency within the NHS and that those should also be part of the reform process. Patients ought to be able to expect a high quality of care on which they are well informed, and to have access to their medical notes and to the decisions made about them. Patients also have the right to expect prompt and safe treatment.

The complaints procedures need a considerable overhaul. Yesterday, in my speech to the conference of the NHS Confederation, I talked about the need for a review of the compensation procedures used in the NHS. At the moment, about 70 per cent. of the money that has to be spent on compensation is swallowed up in legal costs. Reforms there could also help.

Prevention and diagnosis are also worthy of attention. A huge technological advance is taking place in diagnostic equipment and early treatment procedures. In many cases, British science is at the forefront. We need as a matter of urgency to consider how the NHS can take advantage of that. We have been rather too slow and too luddite about adopting new technologies and have sometimes insisted on trialling things that have already been comprehensively trialled in other industrialised and developed countries. We ought to be more willing to move faster to put some of those procedures in place.

A modernising NHS faces many challenges that it has not had to meet before. A growing population with an increasing number of elderly patients presents new problems and opportunities for existing and prospective NHS facilities. It is crucial that many of the old challenges are met more effectively. Clearly, heart disease and cancer treatments and the provision of mental health services need to be radically modernised. It is right that the Government have identified those as priorities.

The development of primary-led care, joint budgets, cross-disciplinary initiatives and a focus on alternatives to hospitalisation are necessary features of a modernised and capable health service. Some are also aspects where private sector provision might reasonably play a part.

At this exciting and challenging time, it is disappointing and regrettable that there are those who wish to destroy the fabric of the NHS by encroachment and neglect. As the debate has progressed, it has become increasingly clear that the official Opposition no longer believe in the NHS as it has existed until now. It is all too obvious that the familiar reassurances belie a party that underfunded

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the NHS for 18 years and now wishes it to be sidelined--a last resort NHS for the uninsurable, the elderly, the chronically sick and the marginalised.

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