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5.25 pm

Mr. John Redwood (Wokingham): I have declared my interests in the register.

I am glad that Government Members like the Budget. We are told that it is billed as an honest Budget, because the present Chancellor for the first time openly confesses to raising taxes. Of course, Labour Members should have liked all his previous Budgets too, because they have all been about raising tax after tax. More than £100 billion of extra taxation is being raised this year compared with the starting point five years ago—that is about £2,000 annually from every man, woman and child in the country. That is a colossal sum.

Quite a bit of that money has gone into public services, but the public are asking how so much money can be taken away from them to so little effect. My constituents ask why there are no more policemen on the beat—indeed, they think that there are fewer now than there were five years ago. They ask why waiting times and waiting lists for the local hospital are often more difficult to negotiate and longer than they were five years ago, and why there are not more beds open in the local hospital. In fact, there are fewer beds open in the local hospital. My constituents ask why local schools find it difficult to recruit and retain teachers, and why teaching morale is so low. The problem is not only all the instructions and directives from the Department for Education and Skills, but one of money, especially in areas such as mine.

The mystery that the British public want resolved is how so much money can be taken off them in Budget after Budget to so little effect. During this year's lengthy Budget debate, we must explore whether any better results might conceivably arise from the forthcoming big surge in spending than have arisen from the colossal increases in taxes and spending of the past five years.

One reason why there has been so little benefit from so much increased spending is the Government's choice of priorities. Had the money been spent on more nurses, doctors, teachers and policemen in my constituency and others, we might have been a little happier; instead, those

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do not appear to be the priorities that apply when the Budget measures announced are implemented. We read the headline announcements of various extra sums of money, but then we see the money being spent on other things.

The health service has had to announce that there are now more administrators in the NHS than there are beds serving patients. In the education service, more circulars than ever before are being sent out by the Department for Education and Skills, but they do not appear to be resolving problems of teacher morale and pay in hotspots throughout the country.

Mr. Tom Harris (Glasgow, Cathcart): I am surprised to hear the right hon. Gentleman's commitment to raising taxes to spend on the health service. Does he remember writing that the NHS was

and that the principle of charging should be extended to

Are those still his views and are they accurately reflected within the shadow Cabinet?

Mr. Redwood: I am delighted to be reminded of some sensible remarks I made some years ago. If he has been following the debate, the hon. Gentleman will know that my current view and that of my right hon. and hon. Friends on the Opposition Front Bench is that we must review the whole question because there must be both a better way to spend the considerable sums of public money now committed to the NHS, and a better way to channel in more money from outside.

We think that a great deal of private money can be brought into health care in general by backing choice and giving people more opportunities. We think that health service money could be much better spent by devolving power and authority to those in hospitals and doctors' surgeries who daily have to make difficult decisions when dealing with patients than by spending so much on the army of administrators, many of whom stand well back from the action in the surgery or hospital ward. We therefore need reform. The reforms proposed by Her Majesty's Government will not be nearly big enough to deal with the problem. Indeed, I would go further and say that, from what we have heard today, the problem will be exacerbated.

Rob Marris (Wolverhampton, South-West): Will the right hon. Gentleman give way?

Mr. Redwood: If I can make my point, I will give way. The problem will be exacerbated by the Chancellor's proposals, which may be fleshed out a little tomorrow by the Secretary of State for Health.

We are told that the main reform will be a new army of auditors ticking bits of paper and inspecting forms to see whether every penny and every pound that the doctor or nurse is spending is well spent. I dread to think what the health service will look like if, on top of the 200,000-odd administrators we already have, and all the internal and external auditors, we have a beefed-up audit function, perhaps intervening day by day or hour by hour.

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That would not be a productive way of spending the money. I suspect that it could even get in the way of patient care. The Government should learn to back off a little, to decentralise a bit, to start to trust some of the people who are running the service. If they do not trust the people running the service, they should get rid of them and appoint people whom they do trust.

Mr. Gregory Barker (Bexhill and Battle): Has my right hon. Friend ever met a nurse, doctor or consultant who said that what their hospital needed was more auditors?

Mr. Redwood: My hon. Friend makes a strong point. He is correct. Cuts are sometimes made at the end of the year, even under this Government, because they discover that their hospitals do not have enough money. The cuts always seem to be in patient care. They never seem to be in paper clips, bits of paper and administration, which is perhaps where they should look.

Mr. Mark Hendrick (Preston): Does the right hon. Gentleman accept that the audit process is necessary to establish whether we can get value for money? His party peddles the mythology that the health service and other services are getting worse. Is it not necessary to show the facts, instead of living off the anecdotes that he puts over?

Mr. Redwood: I have not been giving anecdotes but describing the day-by-day experience of my constituents as patients, or friends or relatives of patients, and, more importantly, the experience of the nurses and doctors who work under great pressure at the local hospital and the local surgery, who tell me that the problem is a shortage of nurses, doctors and bed spaces, not a shortage of auditors, administrators, paper clips and bits of paper.

Of course, there needs to be audit. I had assumed after five years of a Labour Government that satisfactory audit arrangements were in place. Indeed, I thought that the Conservatives had left satisfactory audit arrangements in place. If they are not satisfactory, they should be revised and changed, but I warn the Government against a massive expansion of the audit function in the belief that that will automatically improve the service on which the money is spent. The reason why money is being badly spent is because the system is top-heavy. It still has too much bureaucracy, too many administrators—more than when the Conservatives left office by quite a large margin. The Government need to allow more local control by a few good managers in each locality.

Gareth Thomas (Clwyd, West): Can we take it therefore that the right hon. Gentleman now regrets the implementation of the internal market, which his Government introduced, which was responsible for a huge mushrooming of unnecessary government, and which this Government have abolished?

Mr. Redwood: I liked the idea of GP fundholding. One of the good things about it was that we introduced it in a permissive way. We did not say to every GP on day one, "You must be GP fundholders." We said, "If you would like it, this is extra freedom you can use." We discovered after quiet beginnings, with an awful lot of opposition from Labour, that a lot of GPs signed up and found that it was extremely good for them and their patients. It is a

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great pity that many of the freedoms that GPs enjoyed have been taken away. They have been put under a much bigger bureaucracy in the new primary care trusts that are emerging.

The hon. Gentleman should not hate choice so much. I want the NHS to offer far more choice to the people who need to use it: we the taxpayers, the patients or potential patients. It would make so much difference to the NHS if people had real choice about which doctor, surgery or consultant they went to, when and where they could have their operation, and proper advice and help about the range of options available.

Because the system is so short of medical and clinical capacity, and because it is so centrally driven by Ministers and their bureaucratic supporters, we do not have that choice and freedom, which I am sure my right hon. Friend the Leader of the Opposition would love to extend to people. It may emerge in one form or another from the policy review that is under way in the Conservative party.

One of the things that this country needs is a big injection of choice, enterprise and private capital into a range of public services. That can be even better illustrated in transport than in health. This Government have proposed a much delayed and over-inflated plan to invest—they call it investment, although a lot of it is spending and not true investment—£180 billion over 10 years in the transport industries. They have of course left out the main way of getting around the country—by motor vehicle—because that is handled by the private sector and there will be massive investment in that industry as people conclude that, given difficulties on parts of the transport system in which there is much more public involvement or public investment, the car is the best way to travel.

Within that £180 billion, the Government are aiming only for some £55 billion of private capital. That is a tiny sum compared with, say, the £180 billion that the British public are likely to spend on new cars alone over the same period. It is a poverty of expectations, but probably realistic, or even a little optimistic, given the way in which the Government are handling the transport industries.

Insisting on putting the main rail-owning company into administration will put people off producing private investment for the rail industry. Insisting on going through four or five years of rows with the Mayor of London and terribly convoluted studies on how we might get private capital into the tube, and coming up in the end with a scheme that lumbers the taxpayer with enormous risks while raising only about £4 billion of private capital, will make it a struggle even to get £55 billion of private capital over 10 years for all the transport industries.

If the Government were prepared to be a little more open and to secure proper private involvement, with some choice and freedom, in the railway and tube system, we could secure many more billions of pounds of capital investment without the same requirement on the taxpayer—estimated in the 10-year plan at more than £120 billion, and likely to spiral well above that given the way in which the Government bungle their handling of the transport industries.

The Government's public spending plans have already been gravely damaged by putting Railtrack into administration. A few hundred million pounds would probably have got the Government through the financing problem that Railtrack brought to their attention, but they

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decided to put that profitable company into administration. As a result, we have a bill for several billion pounds, and we still have not got to the end of the matter, as we do not know when Railtrack will come out of administration.

This Budget should have addressed that central problem, but we know that the Chancellor is at loggerheads with the Transport Secretary. He must be deeply embarrassed by the damage that the Transport Secretary has done to relationships with the private sector, the City of London and the people who are likely to produce the investment. We know that the Chancellor has had to keep quiet about that massive area of public-private investment, which is crucial to our country's future. Given how his colleague the Transport Secretary has handled the transport industries, the Chancellor has had to be pessimistic about how much strain the private sector can take.

I urge the Government to put that right and to revisit all their transport plans with a view to aiming for, say, £100 billion of private investment. That is a perfectly realistic target if all the main companies involved are in the private sector, and they are seen to be fairly regulated—not over-regulated—and to have some support and sympathy from a Government who realise that private companies are the best way to get the trains on the move again, the tube sorted out and the transport industries operating much more smoothly.

It is noticeable that where an industry is largely unencumbered by Government ownership or specific Government involvement—the private motor vehicle industry, the vans, cars and lorries—there is massive investment. No one has to debate in this place how we would make good the investment shortfall in that industry. We do not have day-long debates on how we can deal with lorry, car or van shortages for local enterprises. Yet owing to regulation—and, now, public ownership of the main Railtrack enterprise—we must debate how to deal with the shortage of freight wagons and track for them to run on.

The Government should understand the history of the railways. All capital for the rail network in the 19th century was raised in the private markets. The rail industry expanded massively throughout the 19th century, and into the 20th century, on the back of private capital. As soon as it faced serious opposition from the motor vehicle, the Government took it under regulatory control and subsequently nationalised it, and then it was all downhill to the point when it was privatised. There was a massive slide in its use and share of the market, and there have been great difficulties in financing and investing in it. As soon as it was privatised, the trends reversed. We saw a 25 per cent. growth in passenger usage and a 30 per cent. increase in freight. We saw the beginnings of a big investment revival and then the Government, out of pig-headed ideology, decided that that was not allowed. They now have a big black hole in the middle of their Budget plans.

The Budget should address the central point that if we want, as we surely do, much more investment in health, transport and several other areas where the public sector dominates or has a big influence, we need to relax the controls more. We need to be more inviting to the private sector and allow it to play a bigger part. The difference in health spending between this country and other advanced countries is far more marked in the amount of private money spent than in the amount of public money spent.

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I am the first to defend the proposition that if people are ill and need free care, that is their right under the pledge of the NHS. They, or other people, pay enough in tax, and I would not wish to take that right away from anybody. If people need care, it should be available free at the point of use. However, why stop people using their own money if they want different types of care to be made available and why not give them some encouragement for that? The Labour party is immensely hostile to the idea that people might wish to spend more of their own money in that way, and to any scheme that might promote or encourage that, albeit at a considerably lower cost to the taxpayer than if those people required all their care to be provided by a completely publicly financed system.

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