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Several hon. Members rose--

Mr. Milburn: I still have more inaccuracies to relate to hon. Members.

The hon. Gentleman's most serious factual inaccuracy was at the beginning of his remarks. He said that the Conservatives would match Labour's record levels of health investment, but they cannot. We have made our choice. We chose to invest more in the health service. They have made their choice, too. They chose not to vote with us when we wanted £400 million-worth of extra tobacco revenue to go directly to the national health service. Just today, the hon. Gentleman is choosing to use £500 million which could have gone into the NHS to subsidise people with private health insurance.

The Conservatives cannot match us on health service expenditure. Indeed, their programme of cuts would result in £900 million less for local health services--the equivalent of £9 million less for every health authority in the country. That is the Tory guarantee on health: £9 million-worth of cuts in every local health service in the land.

Several hon. Members rose--

Mr. Speaker: Order. I want to call as many hon. Members as possible, so I ask for questions to be brief.

Mrs. Alice Mahon (Halifax): On behalf of the people of Calderdale, who will receive an 8.6 per cent. increase in funds, I thank my right hon. Friend for today's announcement. He will know how we suffered under the previous Government's funding. We are delighted that we have a new hospital and will receive the increase.

Will some of the money that has been allocated be targeted on the elderly who, with the right care package, could be cared for at home instead of taking up hospital beds that they do not need and which add to the problems?

Mr. Milburn: I am grateful for my hon. Friend's comments, and I can give her that assurance. When we

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publish details next month of the roll-out of the NHS plan, she will see that it includes commitments to improving elderly care services. We need to ensure that we get rid of some of the perverse incentives and end the practice that puts all elderly people in care homes when they want to stay at home. We can do that by ensuring that there is more co-operation between health care and social care services, by taking advantage of the flexibilities under the Health Act 1999 and, most importantly, by providing the extra investment that we are making in the health care and the social care systems.

Mr. Nick Harvey (North Devon): I welcome the additional money for the health service and the useful innovation of three-year budgeting, but will the Secretary of State confirm whether the new cost of living supplement for key staff is over and above the forthcoming annual pay review? Until we have seen the figures awarded in that review, is it not difficult to assess what the impact will be on each health authority area as it tries to tackle the many targets that the Government set in the national plan and, indeed, again today? Is there a hierarchy of targets?

The Government are committed to providing free nursing care from halfway through the financial year, which is mentioned in today's settlement. How will that money be channelled? Will it go through social services or are we to assume that it is in the budget figures that we have been given today? If so, how can we quantify that?

We have been told that NICE is the solution to postcode prescribing. Will the Secretary of State confirm that the funds to implement all NICE's recommendations over the coming year at local authority level are included in today's figures?

Finally, may I express my regret at hearing that a review of the formula is still some years away? In Scotland, sparsely populated rural areas are already being recognised as having special needs; in Wales, that is coming. I hope that the situation in England will be remedied a great deal sooner than over the next few years.

Mr. Milburn: I am grateful to the hon. Gentleman. We will see what we can do on the formula, but believe me, I and previous Secretaries of State who are present in the Chamber have wrestled with the intricacies of the formula. Trying to get the money to the right areas is like a game of three-dimensional chess. We must make sure that, rather than tinkering, as has been the case in the past, we have a fundamental root and branch review of the formula. That is the right thing to do. It is also the right thing to do in conjunction with the local government review that colleagues elsewhere in Government are undertaking.

On the cost of living increases for nurses, PAMs--professions allied to medicine--midwives and others, I can confirm that the cost of living increases are over and above what the review bodies will recommend. That is the right thing to do, and it is plain common sense that some parts of the country, largely in London and the south-east, have a higher cost of living than elsewhere. If we are to do what we need to do to tackle shortages of nurses, therapists and so on, we must provide extra financial incentives for staff through their pay packets. That is what we will do.

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On free nursing care, yes, I can confirm that at present the money is in health authority budgets. I can also confirm that it is our intention, subject to Parliament, to introduce free nursing care part way through the next financial year.

Finally, on the National Institute for Clinical Excellence, we must make some provision, of course, for an increase in drugs expenditure. As I have said before in the House, if we can get good, high-quality, cost-effective and clinically effective drugs to more and more patients, I have no problem with drugs expenditure increasing, and increasing above the level of general health authority allocations.

Mr. Robin Corbett (Birmingham, Erdington): There will be a noisy welcome across Birmingham and the west midlands for the heavy extra investment in the health service there, not least among the too many people waiting far too long for cardiac care and treatment. Will my right hon. Friend require health authorities to publish the extra allocations to hospitals in their area and the purposes for which that money is given, and also require hospital trusts to report on how they have performed with the money given for those specific purposes, so that we can all monitor, publicly and together, what is going on in the health service?

Mr. Milburn: I am grateful to my hon. Friend. It is one of the deals on offer that in exchange for the extra investment that we are putting into the health service, we must see, in as open and accountable a fashion as possible, improved performance. Of course there will be a lot more measuring. We should measure what is going on in the health service.

We cannot have our cake and eat it. We cannot, as some do, decry the lottery in care and different standards in different areas, yet do nothing about it. It is the right thing to do to make sure that we monitor and account, as a local health service, for the services provided to local communities. I can therefore confirm that we will want much more openness and transparency, not only in the way cash is allocated within a local health authority area, but most importantly of all, the progress and the reforms that we get back for the resources that we are investing.

Mr. Kenneth Clarke (Rushcliffe): I welcome the extra money targeted towards Nottingham, which will bring us closer in line with our health needs. I also welcome the Government's reversion to the previous Government's policy of targeting waiting times, as opposed to the numbers on waiting lists, which has done so much damage in recent years.

Is the Secretary of State promising not to return to the bust and boom in health expenditure which characterised the first years of Labour? He knows that the present crisis was caused by his Government forcing on his predecessor as Secretary of State a cancellation of the annual spending reviews, in which we had always raised health spending in line with needs and events. If the last year of the previous Parliament was a bad one, all the more shameful, then, that the present Government cancelled the annual spending increases for the first two years of their term.

Now that the right hon. Gentleman has an increase for next year which matches the increase that I was able to announce as Secretary of State in 1990, is it wise to set it

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so firmly in stone for three years, expressed in cash terms to make it sound bigger? Is there a let-out clause to allow the matter to be reopened if inflation pressures and the course of events prove that necessary, in order to keep the health service on course and to recover from the neglect of the first three years of Labour?

Mr. Milburn: I am grateful to the right hon. and learned Gentleman for his comments, particularly his welcome for extra money for Nottingham, which, as I remember, is one of the big gainers from the allocations that we have made today.

Mr. Dennis Skinner (Bolsover): A lot more than when the right hon. and learned Member for Rushcliffe (Mr. Clarke) was Secretary of State.

Mr. Milburn: Correct. The right hon. and learned Gentleman touched on his record, but I remind him that, when he was Chancellor of the Exchequer, the increase in net NHS expenditure in 1995-96 was 1.6 per cent. in real terms, and in 1996-97, the final year, it fell by 0.1 per cent. So if the right hon. and learned Gentleman does not mind, we will have fewer lessons from him.

The right hon. and learned Gentleman knows fine well that there is a direct relationship between the number of people on the waiting list and the length of time that they wait for treatment. I bet that, when he goes to Sainsbury's or Tesco--or he may even be a Co-op man for all I know--he always joins the shortest queue at the checkout.

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