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8.57 pm

Mr. Bill Rammell (Harlow): I am pleased to make a contribution to this debate on one of the most significant pieces of legislation that the Government will pass in all their years in office. I genuinely mean that. Just as the Tory privatisation programme in the 1980s was emblematic of what the Tories in government were about, and fundamentally changed our society, the Bill and the budgetary changes associated with it define more clearly than anything what the Labour party and the Labour Government are about, and will change this country for the better.

The Bill is the culmination of a careful, deliberate and gradualist strategy to rehabilitate the concept that direct, progressive taxation can be used as a tool to achieve a

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social good. Our arguments make that clear, and they have resonance with people. We are telling them that society does not get something for nothing and that if we want a world-class health service, we will have to pay a little more through extra direct taxes.

There is public support for that view, and I am confident that we are also beginning to win the debate in the House of Commons. Nothing gives me more confidence in saying that than the fact that, although this is one of the most significant pieces of legislation that the Government will introduce, for most of the debate no Tory Back-Bench Members have been present—currently, there is one. That shows that they do not have the stomach for debating this issue. They know the direction in which the public debate is going and how the public mood is moving.

Mr. Wiggin: On a point of order, Mr. Deputy Speaker. I have been here for virtually the whole evening. I popped out to see a constituent, having made you aware that I was doing so. The hon. Gentleman is, perhaps inadvertently, attempting to mislead the House.

Mr. Deputy Speaker (Sir Michael Lord): That is not a point of order for the Chair.

Mr. Rammell: The hon. Member for Leominster (Mr. Wiggin) is the exception who proves the rule. If Conservative Members believed that they were in tune with the public mood and that they could win the argument, they would fill the Opposition Benches and try to make their case. Their absence speaks volumes.

Let us consider the substance of the Bill. I warmly welcome the measure because it firmly establishes the principle that taxation, and sometimes increases in direct taxation, is necessary in a civilised society. The Government are building on the developing consensus by introducing the measure.

In the 1980s, the public mood, to which the Conservative Government responded and which they also led, was tax cuts at almost any price. After more than 18 years, people have realised that such a strategy entails enormous cost in damage to schools, hospitals and public services generally. In 2002, there is greater public recognition that we do not get something for nothing. People look increasingly to Europe and countries such as France and Germany where waiting lists do not exist. People logically conclude that that is not unconnected to the substantially greater sums of public money that are spent on their health care systems. According to figures from the Library, of the 15 European Union countries, Britain has historically spent the second lowest percentage of GDP on health.

I increasingly believe that people are ready to endorse a preference for progressive taxation to fund the improvements that we need in the NHS rather than social insurance, private medical insurance or direct charges. I was interested to listen to the shadow Chief Secretary, who denied that the shadow Secretary of State of Health had advocated direct charges in the NHS. He may not have realised that his comments were recorded, but he went out of his way to advocate what he termed "self-pay". Self-pay or direct charges take no account of ability to pay and are far more regressive than direct taxation to pay for public expenditure. To appreciate how

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disastrous such a system can be, we should consider the United States, where 40 million out of 200 million people simply do not have access to decent health care. That is genuinely worrying.

We are moving in the right direction, but the key question is whether we can convince the public that direct tax changes through increases in national insurance constitute the right way forward. Initial opinion polling evidence gives ground for optimism. The Daily Telegraph poll shows that 77 per cent. of people support the increased expenditure for the health service and 63 per cent. believe that we were justified in raising national insurance.

I urge some caution. People have not yet started paying the taxes and we should never underestimate the capacity of people to support tax rises in principle but, when the crunch comes, to find all sorts of reasons against them. If we are to win the debate fundamentally and in the long term, we need to take some action. First, we must provide the extra doctors, nurses and beds to increase NHS capacity.

Secondly, we must be careful about the way in which the additional money is spent. I speak as a Member of Parliament for a south-east constituency, and I am conscious of the need to increase health professionals' pay, especially to meet additional housing costs. I give a word of warning. If the bulk of the unprecedented, substantial increase in public expenditure is spent simply on additional pay, and the public do not perceive sufficient improvements in the services that they receive, they will not thank us in the long run. I therefore welcome the fact that the Secretary of State for Health went out of his way to say that higher salaries must be accompanied by higher productivity and increased responsibility.

We must also make it clear, in terms of winning this debate, that this is long-term investment for long-term change. We have underfunded the national health service for more than a generation, and this is not going to be a quick fix; it is going to take time to build up the capacity. We need to say that because, otherwise, when the taxes start to bite in a year's time, the Conservatives will say to us, "People are paying the extra taxes. Where are the improvements?" There will be improvements—there are already improvements—but this is a long-term strategy. We need to make the point very clearly that we cannot underfund the national health service for 18 years and expect everything to be put right in just a short period of time.

I shall deal with some of the criticisms that have been put forward today by the Conservatives. First, they said that we had broken our election promises, but I certainly remember the Chancellor and the Prime Minister repeatedly refusing to rule out rises in national insurance contributions during the general election. Secondly, I simply will not take lessons from the Conservatives about keeping our promises on tax during a general election campaign. We all remember the 1979 campaign, in which they said that they would not put up VAT; they doubled it immediately after the general election. Similarly, in 1992, they said that they had no plans to raise the rate or change the scope of VAT. What did they do straight after the general election? They increased it by 2.5 per cent.

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I question the integrity of the Conservatives position when they say that they are committed to extra spending on the national health service. I have been staggered in recent weeks to read some of their statements, particularly when the shadow Health Secretary said:

Forgive me, but I simply do not believe that statement. The Conservatives were in power for 18 years—the longest period of one-party rule in this country since the second world war—but never did we see the increased investment levels that this Government are now introducing.

This is a debate about extra resources, and about the need for those resources. It is also about the fundamental choice that we face: do we want a socialised system of health care that is free at the point of use, or do we go down the road to private medical insurance and charging? The most revealing moment in this debate was when the shadow Chief Secretary was invited three times to say that he supported a national health service that was free at the point of use. Three times he ducked the opportunity to confirm that; he simply said that he was in favour of a better national health service. Put alongside what the shadow Health Secretary has said about wanting self-pay and private medical insurance, that makes it very clear that the fundamental choice is between rebuilding the national health service—free at the point of use—under this Government or being forced to pay for it, in a way that takes no account of the ability to pay, by the Conservative party. I am absolutely confident which way people will go.

9.8 pm

Mr. Bill Wiggin (Leominster): I can see that other hon. Members wish to speak, so I shall take no interventions and try to keep my speech as short as possible. I should like to begin by heaping praise on the hon. Member for South Thanet (Dr. Ladyman) for having actually read the Bill. Labour Members who refer to "ordinary people" should show those people the Bill and see whether they can make head or tail of it. The implementation of the Bill will raise about an extra £10 billion a year, and the Government have earmarked those funds to part-fund a 43 per cent. increase in national health service spending over the next five years. They are demanding yet more of the taxpayer's hard-earned money, but have so far failed to propose any policy for spending the extra cash that even hints at being effective.

My constituents are paying £1,600 a year more in tax than they were in 1997, yet waiting lists are rising again and the chances of surviving cancer in Britain are among the worst in Europe. The Chancellor's increase in employers' national insurance contributions will hit the public services hard. The Government have admitted that their changes to national insurance will cost the public sector £1.2 billion, of which £200 million represents the increase in the total salary bill for employing 1 million national health service workers in England. So, although the Budget has been heralded by the Government as the saviour of the NHS, it will actually start off by costing the health service money.

It is not just the Conservative party that has labelled the Budget as more tax and more talk, but making no difference. The message from the public is clear, too: it

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is not good enough. The British public lost faith in the Government several broken promises ago, so no wonder the Chancellor's latest money-grabbing initiative has not been as well received as they hoped.

Employees and employers are rightly unwilling to pay more of their hard-earned income in national insurance contributions, because of the Government's track record of failing to deliver. In Herefordshire, last-minute cancellations of operations for non-critical reasons have risen by 121 per cent. in the past year. That group, as a percentage of elective admissions, has doubled in size over the last year—and the number of those unfortunate patients not to be admitted within a month of the cancellation is up by 260 per cent. The number of patients in my constituency who are not admitted within a month in the first instance rose by 58 per cent.

In conjunction with the hon. Member for Hereford (Mr. Keetch)—sadly, he is not in his place now—I have recently been involved with a petition that received more than 26,000 signatures from people in Herefordshire. The "Give us the beds we need" petition was part of my campaign for much needed funds to provide the new hospital at Hereford with the additional 120 beds that it needs to operate efficiently. It also needs those 120 beds to make it the same size as the hospital that it is replacing.

A large group of doctors, nurses and hospital workers from Hereford hospital made the 150-mile journey to London last month to present the petition to Downing street and to demonstrate their dissatisfaction with the Government. The message from my constituents is loud and clear: the situation is unacceptable. I am sure that the good people of Herefordshire are not the only ones in the country who have had enough of broken promises, increased taxes and decrepit public services.

The situation in the NHS is that waiting lists are rising again, hospital beds are blocked—mainly because care home beds have been closed—and the odds of surviving cancer in Britain are among the worst in Europe. Last year 250,000 people without insurance paid for their own operations—more than ever before. More talk and more tax will not give people the standard of health care that they deserve. Scotland spends as much as Australia and Holland on health, and Wales and Northern Ireland spend as much as France, yet patients are receiving inferior treatment.

The Budget is a missed opportunity, and the Treasury has a closed mind on health care. It says that we have nothing to learn from other countries, despite the fact that Germany has no national waiting lists, and Danish patients have a legal right to treatment within four weeks of seeing a GP. We have an open mind. We have visited other countries that deliver better health care, simply to see what we can learn from them. Yes, Britain needs to spend more on the health service, but spending it on how the NHS is run today, and raising higher and higher taxes, will not give this country the health care standards that it has a right to expect.

Patients are paying to be treated outside the NHS. When the Independent Healthcare Association says that more than 250,000 people are having to self-fund their operations in the private sector this year, we know that things are not right. An article on BBC Online has revealed that hundreds of British patients are flying to South Africa for treatment to avoid NHS waiting lists in

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the UK. Over the last six months, the number of Britons travelling to South Africa to take advantage of cheaper and quicker hospital treatment has risen dramatically.

The west midlands area health authorities, which cover my constituency, last year reported more than 1,000 delayed discharges from hospitals due to the shortage of care homes. The same was true the year before. To make matters worse, research has shown that over one third of those discharges are delayed by more than a month.

The NHS is in turmoil—we all know that—but the delayed hospital discharge problem could be eased greatly if the Government addressed the shortage of care home beds and the lack of funding for existing homes. Instead, their proposed national insurance contributions tax will have a dramatic effect on the operating margins of those homes—to their detriment, sadly.

Many small care homes in England are running at a 5 per cent. margin, but for an average care home, wages are 80 per cent. of costs. Therefore, the national insurance increase will reduce margins by 20 per cent. That increase may impose costs that are too onerous for many smaller care homes to cope with. Frank Ursell, the chief executive officer of the Registered Nursing Homes Association, said:

In the current year, total NHS spending in the UK is expected to be about £68 billion. The Wanless review estimates that there will need to be a rise of between £154 billion and £184 billion by 2022–23 in order to deliver the high quality service envisaged. That implies total NHS spending increases at an average rate of between 4.2 and 5.1 per cent. a year in real terms over that 20-year period.

The increased activity implied by the projections in the report would result in a substantial increase in demand for health care workers. Derek Wanless estimates that at least two thirds more doctors and a third more nurses will be required over the next 20 years. Under the existing plans, which Wanless describes as "ambitious", the report estimates a small shortage of nurses by 2020, and a shortfall of 25,000 doctors, especially GPs.

That caused the British Medical Association much concern. In a statement to the House, the Secretary of State for Health pledged that the Government's plans for health reform would deliver 15,000 more doctors. I am left wondering where the other 10,000 will come from. It is time that the Government ceased promising everything and actually delivered. I accept that there are no quick fixes, and everyone realises that the situation is difficult and problematic, but the sensible route is not one of unattainable objectives. The Government would do well to forgo their announcements of miracles, because the public are no longer fooled. Only real results and real policies will do for the NHS and for the people of Britain.

Sadly, it is typical of the Government that the Wanless report was released on Budget day, when media attention was focused elsewhere. Perhaps the disparity between the number of doctors needed and the number pledged by the Government led to that attempt to bury the report.

The best insurance policy in the world is one that people can claim on and which delivers without delay. I do not believe that the Bill can do either.

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9.17 pm

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