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8.16 pm

Mr. Desmond Swayne (New Forest, West): It is interesting that—merely in passing—the Chancellor mentioned that the economy was well within the Maastricht criteria. Given the importance that many Labour Members attach to the potential for this country's joining the euro, he could have dealt with the subject rather more thoroughly. After all, the decision has been taken in principle; it merely awaits an assessment based on the tests. I could understand the Government's sensitivity if they had bucked a decision in principle—if such a decision had yet to be taken; but given that the decision has already been taken and it is merely a question

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of assessing economic convergence, I expected the Chancellor to take the opportunity to discuss the convergence criteria in greater depth.

The Chancellor mentioned in passing one or two statistics. For example, he said that the growth rate in the eurozone was 1.5 per cent., whereas our own growth rate was much better at 2.2 per cent. That begs important questions about the rate of convergence. It would have been interesting to hear the Chancellor's assessment of whether it is suitable for our economy to enjoy a growth rate so much greater than that of the eurozone that we anticipate joining and with which we anticipate sharing an interest rate. It begs the question what differential effect an interest rate suited to an economy with 1.5 per cent. growth would have on an economy with 2.2 per cent. growth. I suggest that it would make us much poorer. I would have welcomed the Government's assessment, but the Chancellor bucked the opportunity.

With great flourish and rhetoric, the Chancellor advertised his decisions on corporation tax on small businesses, but there is a trick: for small businesses to benefit from a reduction in corporation tax and from a new corporation tax regime, they have to be making a profit. That is the difficulty facing many of our small businesses. The critical factor is not the tax they pay on their profits, but whether they are able to make a profit as a consequence of the regulatory environment in which they exist. The key thing that the Chancellor and those on the Treasury Bench can do in determining the profitability of small businesses is to alleviate the regulatory regime; it is not to change the corporation tax rate.

I take one example. One industry has been literally decimated by regulation: the intermediate care industry, or residential nursing homes. In the past four years, we have lost 10 per cent. of capacity—10 per cent. of the beds. From my experience in my constituency, that has arisen as a consequence of the stifling regulation that has been imposed on the industry, and the determination by the Secretary of State for Health to control that industry from the centre.

When he set up the NHS, Bevan said that he wanted to hear a bedpan in a provincial hospital drop in his office in Whitehall—such was his determination to control his new creation from the centre. It has taken until this Secretary of State to deliver that centralised control. What business can it be of the Secretary of State to determine the widths of the doorways of a residential home in Milford on Sea? What business of his can it be to impose a regulatory regime that determines the number of baths and the size of the rooms? These regulations are not important to me. They are measurements that are easy to make but by and large they do not measure the important things that determine the quality of care in a home. However, if those regulations were important to those on the Treasury Bench—

Mr. Hendrick: Will the hon. Gentleman give way?

Mr. Swayne: Let me develop the point. If they were important to the occupants of the Treasury Bench, the way to achieve them would be to pay a premium to homes that met the requirements of those regulations. The market would quickly follow.

The regulations were introduced with no regulatory impact assessment. Standing here, I asked the Minister what they were going to cost and he admitted that he had

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no idea. No assessment had been made of the cost. I can tell hon. Members what they have cost: 10 per cent. of capacity at care homes. As a consequence, there has been a huge effect on the health service itself. As a result of those beds being lost, elderly people with nowhere else to go have occupied acute care beds—some 7,000 at any one time on an average stay of six weeks.

The knock-on effect of that is the cancellation of some 78,000 operations. In order to expedite the turnover in beds, where there is somewhere else for someone to go, they are taken out too early. As a result, we have the shocking statistic that nearly 500,000 people had to be readmitted to hospital within months of their discharge, presumably because they were discharged too early. We see the enormous consequence of the determination of the Secretary of State to get his way by regulation. Reductions in corporation tax will not retrieve the situation.

Rob Marris: What has happened is a concern to many hon. Members. There seem to be two ways forward. Perhaps the hon. Gentleman will agree, or perhaps he will disagree. One is to get rid of the Care Standards Act 2000, which appeared to be his approach, although he can clarify that. The other is that, in order to meet the increased costs for residential care home owners—I have talked to some in my constituency—of complying with the standards, which I support, the social services budget could be increased by, for example, 6 per cent. a year in real terms, which the Chancellor has already proposed in his Budget. We can either increase taxes and Government spending to deal with that problem, or we can dilute or abolish the standards. Which would he like?

Mr. Swayne: I made my approach clear on Second Reading of the Care Standards Bill. I said that I did not believe that the standards were important. I predicted entirely what subsequently happened.

Mr. Hendrick: Will the hon. Gentleman give way?

Mr. Swayne: I will answer the point that has been made before I take another intervention.

There was no suggestion from the Chancellor this afternoon that the proposed increases in social services budgets will be used to carry out the structural changes that are required at care homes in order to make extra beds available. If the right hon. Gentleman wants a way out of the problem, he should remember our approach at the last general election.

I have concentrated on the effect of the regulations on the structure of the industry. Another underlying problem is that social services departments have been unable to fund clients in residential care homes sufficiently. In other words, the argument must be that there should be greater expenditure on social services budgets.

Our proposals at the last general election would have dealt with that. Paradoxically, the best way of assisting acute care is to readjust the budgets so that some of the expenditure goes into intermediate care, which would unblock many beds. An amelioration could have been delivered without an increase in overall expenditure.

Mr. Hendrick: Does the hon. Gentleman seriously think that it is not important for an elderly person in a care

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home to have enough space in which to move around? In some cases, one can just about fit a bed into the room—the person is almost like a rabbit in a rabbit hutch. Is it not important that a wheelchair can get through a door if one of the people at a care home happens to be disabled? Is it not important that there are minimum nutrition standards, so that people are fed properly and not starved, as a minority have been in some of the worst-run care homes—although most of them are run very well? Is it not the Government's job to govern?

Mr. Swayne: It is appropriate that there be an inspection regime that stamps out abuses—a light regulatory touch. The hon. Gentleman is right. It may be very important that a particular doorway accommodates a wheelchair but in a significant number of the homes in my constituency there are no wheelchairs, so there is no requirement for those doorways to accommodate a wheelchair. By and large the buildings are very old, so changing the width of the doorway would present a major structural problem. There is no reason to do that.

The nonsense is that the decision is made in Whitehall. It has a disproportionate and catastrophic effect in Milford on Sea. That is the problem with the regulatory regime that the Government have designed.

I come to the main thrust of the Chancellor's Budget. He himself defined it is a question of how we deliver the expenditure to provide world-class public services. He concentrated on the NHS. As hon. Members will accept, we have heard some distortion in categorising the different positions of the parties. We must be honest and mature about the debate. By and large, there is a consensus. The consensus is that we want a comprehensive health service providing services that are available to those who need them and not based on the ability to pay. There is generally an acceptance of that principle. The difference between us is how we deliver that situation—what policies we pursue to achieve that ideal.

We do not serve the profession of politics well by pretending that that consensus does not exist, and by categorising our respective positions as a determination to destroy that ideal, rather than to achieve it. We may differ profoundly about the means by which to achieve it, or there may be shades of grey about the way in which to pursue the ideal, but it is monstrous for Labour Members to suggest that the Conservative party is determined to destroy the NHS and to create something different in its place.

I do not think that the electorate are taken in for one moment. Some of the turn-off from politics that ordinary people experience is to a great extent a consequence of the way in which we sometimes conduct our arguments—painting a bleak picture of one party vis-à-vis the other. We would do the debate and the public much greater service if we concentrated on a proper argument about how to deliver the services that we generally agree the electorate should have.

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