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David Taylor: Is not the hon. Gentleman overstating the case? The NHS will grow in real terms over the next five years by more than 7 per cent. The extra national insurance contributions will impose a burden of perhaps 0.5 per cent., which will trim the total slightly. However, that is part of the way in which the finance is to be raised, and it is not as hugely significant as the hon. Gentleman suggests. Is he not over-egging the pudding?

Chris Grayling: If that is true, will the Minister give a clear undertaking to head teachers, chief constables and care home owners that, in the public sector funds allocated to them next year, they will receive a refund for the money that is being taken away in taxation?

I do not believe that the Government's proposals will transform the health care system. I have not met any health care professionals who think that it will. The evidence from those parts of the UK with higher spending per head of population is that higher spending does not

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improve health performance. No other country runs its health care system as we do, and all other countries do it better. The Budget, on what I fear will be a wing and a prayer, places a huge tax burden on organisations and individuals. The Budget is a gamble, for which there has been no proper debate. It is based on dogma put forward by the Chancellor of the Exchequer. It does not deserve the support of the House.

I should love there to be a modern and excellent health care system in this country. We must have it, and we need it. However, this is not the way to deliver it. I fear that the strategy will fail.

9.17 pm

Mr. Anthony D. Wright (Great Yarmouth): I shall be brief, and concentrate on the effect of the extra resources that have been given already to the hospitals in Great Yarmouth, and on the future needs that will be financed by what is probably the best Budget for many years.

I believe that the James Paget hospital trust in my area has done remarkably well, as the facts show. The national waiting time target for out-patients for the end of March 2002 was that no patient should wait more than 26 weeks for a first out-patient appointment. The trust achieved that target.

Another target was to reduce the total number of patients waiting more than 13 weeks; the target was that no more than 831 patients should be required to wait for longer than that. The trust did well with this target too, with only 463 patients waiting in excess of 13 weeks.

The national waiting time target for in-patient and day cases was that no patient should be waiting more than 15 months. The trust exceeded the target by ensuring that no patient was waiting more than 12 months.

However, the total number of patients on the waiting list rose, and there were some 160 more patients on the waiting lists than the target required. That was due to the lack of elective beds available as a result of the number of non-elective cases on the wards. The trust is working with the local primary care trusts to reduce the number of patients on the waiting lists.

The trust is striving to maintain the standards that have been achieved. By 31 March 2003, it is aiming to achieve the national target that no patient will wait more than 21 weeks for a first out-patient appointment.

The national target for in-patient and day cases is that no patient should spend more than 12 months on the waiting list by 31 March 2003. The trust aims to achieve a maximum wait of nine months.

To achieve those targets, the locality is investing in additional staff and facilities. The additional staff will include medical, nursing and other professional and support staff. There will also be a new dermatology unit, additional theatre facilities, an intensive care unit, a day case ward, and an endoscopy suite. In addition, the trust has planned its largest-ever capital programme, worth a total of more than £7 million.

Problems with staffing exist, but it is clear that the Budget could help. The James Paget hospital trust says that that depends on how the money is spent, and whether it reaches trust level. For example, it appears that a lot of the additional money—quite rightly—will be earmarked for capital expenditure. The implementation of the information management and technology strategy will be

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a significant element of that expenditure, as will making additional equipment available to staff. That is fine, but new IT equipment will be of value only if the staff exists to run it.

9.20 pm

Mr. Michael Howard (Folkestone and Hythe): I begin by drawing the attention of the House to my declaration in the Register of Member's Interests, and by congratulating all those Members who took part in the debate on their contributions. The debate has been distinguished—I wish that I could say the same about the Budget.

The Budget will be remembered for the way in which it breaks Labour's promises; for the way in which it penalises hard work; and for the tax on jobs that is its most distinguishing feature. When the history of the Government is written, it will be one of wasted opportunities. When the Labour Government came into office in 1997, they had an unprecedented opportunity for reform. They had a huge parliamentary majority. They had inherited a strong economy. There was an appetite for and an expectation of reform and they had the unparalleled good will of the British people.

The Government have failed to reform, however. They have squandered all those assets and wasted that golden opportunity.

Mr. Barry Gardiner (Brent, North): Would the right hon. and learned Gentleman's recommendations for reform include changing the tradition that British people receive health care that is free at the point of use?

Mr. Howard: We have made it clear that we entirely support the ideals of the national health service. We want to see a first-class health service available to the people of this country when they need it and entirely without regard to ability to pay. The difficulty is that we are further away from those ideals today than we have been since the national health service was set up more than 50 years ago.

The Chief Secretary to the Treasury (Mr. Andrew Smith): What will the Conservatives do about the health service?

Mr. Howard: I shall deal with health in a moment; first, I want to talk about some other matters.

The Government came to office promising to reward enterprise. They promised to build a new partnership with business, but this is what business leaders have said about the Budget. The head of economic analysis at the CBI said that there is

"an extra incentive to keep employment to an absolute minimum".

In the words of the Forum of Private Business, the result of the Budget will be

"a further disincentive to employ".

The chief executive of recruitment specialists, Reed Executive, said that the national insurance increase goes

"directly against the Government's professed objective of full employment".

He highlighted the warnings from employers that they might move jobs abroad—[Interruption.] The Chancellor says that is nonsense. Of course, he knows much more

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than business leaders about the effect of the Budget on business. In due course, perhaps he will tell us what experience he has of employing people and what experience he has of dealing with those difficulties. What experience does he have of trying to decide where to employ people? What experience does he have of the impact of those bills on his ability to make a profit?

The tax on jobs does not hit the companies with the largest profits but those with the largest work force. What sort of Government preach job creation while introducing a direct incentive for job destruction? What sort of Government talk about helping the low paid, but levy an extra tax on the jobs of the self-employed who are often the lowest paid of all? What sort of Chancellor uses the bulk of his speech to talk about enterprise—a word that he mentioned a dozen times—before outlining a measure that will do as much to undermine and damage enterprise as anything that he has done during the past five years?

The Chancellor does all that at a time when business is already struggling under the weight of £6 billion a year of extra taxes and £5 billion a year of red tape, and when our competitive tax advantage is already being eroded. CBI figures show that, among our top five trading partners, only France has a larger burden of business taxation—that was before the Budget. At the same time, manufacturers are struggling to emerge from recession.

Despite some recent encouraging signs, manufacturing output is forecast to contract this year. The director general of the Engineering Employers Federation—no doubt, the Chancellor will also say that he is talking rubbish—has said that the rise in national insurance contributions could not have come at a worse moment. He said:

"Its timing was awful and its emotional impact was appalling."

Of course some other Budget measures, such as help with research and development, have been welcomed, but as the Federation of Small Businesses has put it,

"all the welcome measures have been undone."

National insurance was not the only business tax to rise. The change in the treatment of United Kingdom branches of foreign companies is likely to hit the financial services sector, particularly foreign banks, the hardest.

An article in yesterday's Evening Standard made it clear that

"the City is home to more foreign banks than any other place in the world. They may or may not pay a lot of tax, but their contribution to critical mass, to the credibility of the City, to its appearing on overseas radar, to broadening and deepening the banking market and to employment cannot be argued against. Changing the tax rules can only mean there will be fewer such banks in future and the City will be the weaker for that."

In fact, apart from and in addition to the £4 billion increase in national insurance contributions, the Institute for Fiscal Studies has estimated that the Budget's net cost to business is £1.1 billion, even after the positive measures for business have been taken into account.

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