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Amendment made: No. 14, in page 11, line 43, at end insert
'(4) In subsection (6), for "subsection (5)" substitute "subsections (5) and (5A)".'.[Dawn Primarolo.]
Schedule 1, as amended, ordered to be the First schedule to the Bill.
Schedule 2 ordered to be the Second schedule to the Bill.
Bill reported, with amendments.
Order for Third Reading read.
Dawn Primarolo: We have had a very good, interesting debate in which the House has explored in detail the Government's plans to use the national insurance fund to raise additional resources for the health service. In one way, the Bill is unprecedented, unlike previous changes to national insurance contributions, which have been linked to changes in the state of the national insurance fund. This Bill increases contributions for the other great pillar of the welfare statethe national health service. In another way, however, it is not new at all. Ever since the post-war Labour Government introduced the national insurance system and the national health service, part of the funding for the NHS has come from national insurance contributions.
National insurance contributions are paid by those who work and by their employers. Everyone who has a stake in the national health service will contribute while they are in work, when they can best afford it, and everyone has an interest in the improvements in the health service that this extra money for investment will deliver.
Let me remind the House of the scale of new investment that we have promised. The plans announced in the Budget represented the biggest ever increase in investment in the national health service, raising spending on average by 7.4 per cent. in real terms in each of the next five years. United Kingdom health spending will grow from £65.4 billion this year to £105.6 billion in 200708. Since 1997, health service investment has already doubled in real terms, and it will increase as a share of national income from 6.7 per cent. in 1997 and 7.7 per cent this year to 9.4 per cent. in 200708. That will mean 35,000 more nurses, midwives and health visitors, 15,000 more doctors and consultants and 42 major hospital schemesreal changes and improvements, giving the people of this country a standard of health care that they can be proud of.
The Government have also published plans to ensure that the public and the House can judge whether those improvements are being delivered. There will be independent audit, inspection and scrutiny of patient complaints, with a duty to account for money spent and standards achieved and to report to the public.
In future, an annual report to Parliament will be prepared by the new independent auditor, accounting for the money allocated to the national health service, stating where it has been spent and the results that have been achieved. There will also be local reports from every primary care trust that will spell out to each household in its locality the services available and the value for money that is being achieved.
The Bill is simple and transparent. We have increased the rates of national insurance contributions for employers, employees and the self-employed by one percentage point. For employers and the self-employed, whose contributions are currently limited by the upper earnings limit and the upper profits limit, we have ensured that the burden is spread fairly, by applying the additional 1 per cent. to all earnings, including those above the limit.
We have also ensured that the national health service gets the benefit of the additional revenue by increasing the proportion of the national insurance contributions earmarked for the NHS by an equivalent amount. The Bill ensures that none of the changes will disturb existing arrangements for determining entitlement to contributory benefits or for the financing of contracted out, personal or occupational pension schemes.
Much of the debate that we have had on the Bill would have sounded familiar to those involved in the introduction of national insurance in the 1940s. We have heard a lot about the supposed unfairness of making employers pay a share of the cost of improving the health service. In response, the Government have quoted the CBI, which said that time off for sickness costs British industry some £10 billion a year.
The Bill shows that the Government are not afraid to be honest about what needs to be done to improve the health service and about the need to pay for it. The public appreciate that and have shown by their reactions to my right hon. Friend's Budget that they are willing to trust us to do what we have promised. The Bill is the first step and I commend it to the House.
Mr. Chope: The Bill has been debated in the House on repeated occasions during the past few weeks. It appears to be almost a dialogue of the deaf. On the Opposition Benches, we are alone in saying that throwing more money at the national health service is no guarantee that there will be a better service. The Government have said on other occasions that they would put extra taxpayers' money into public services and that there would be public service agreements to ensure that that expenditure was worth while, yet they have not fulfilled those promises.
We know that many of the new improvementsthe extra nurses, doctors, hospitals and primary care centres about which the Secretary of State for Health tells usare not even expected until 2008. We know that the Secretary of State merely hopes that legislation to establish the commissions for health care, audit and inspection will be introduced during the next Session, and that the first inspection report is unlikely to materialise before 2005. That is before we shall even know whether the extra billions of pounds taken in the higher taxes that the Government said they would never introduce have been well invested.
The Government, far from being unafraid to be honest about what must be done, as the Paymaster General claimed in her speech, failed to face up to the truth at the general election. They realised that they would have to put up taxes. They needed to put up taxes but denied that they would do so, and they specifically denied that they would increase national insurance contributions.
A host of Audit Commission reports, all of which are set out on the internetsome 10 or 12 of them have been issued in the past 18 monthscontain recommendations on what should be done to improve the efficiency of our health service. What has been done to implement those recommendations? Of course the Government may be embarrassed by the fact that the Audit Commission has been so effective in probing in the past, but the trouble is that the Government have not followed those recommendations.
I certainly have not seen any evidence in recent weeks that employees are saying, "Yes, I don't mind taking a cut in my take-home pay so money can go to the health service." I have not heard people who work in the NHS, the social services or the police, or head teachers say, "I'm looking forward to a reduction in my take-home pay, so more can be put into the health service."
People, especially those in the public sector, seem to be telling the Government, "Give us some extra money to compensate us for the additional national insurance tax, and we'll be content." Indeed, pay demands in the public sector are escalating frighteningly. Obviously, the demands from the fire service are the most prominent at the moment. The Government are fuelling that inflationary pressure by their actions in the Bill. That is why the Bank of England reported as it did in May. I hope that the Paymaster General will say in winding up the debate what she and the Government think of the Bank of England's observations. What the Bank of England has said is echoed by employers and employers' organisations up and down the land.
People working in the public sector and local authorities, as employers, are saying that they will have to pay extra because of the Bill. Will they be compensated? The only way that they can be compensated is with extra public money, again raised from taxes. So we have the spiral that we have seen so often under Labour Governments of increasing taxes to fund public sector organisations, which, in turn, have to spend a lot of money on additional employer costs rather than being able to put that money into better-quality services.
We are therefore extremely sceptical about the value of this Bill. The evidence of the Government's own experts is that, in England alone, waste and fraud in the national health service is of the order of £7 billion to £10 billion every year. We are amazed at the arrogance of a Government who, when faced with that evidence, rather than sort out that fraud and waste and improve the health
The Government did not go into the last general election saying, "We are going to increase taxes. These are the arguments for increasing them. Although we said in 1997 that there are only 24 hours to save the national health service, and we can save it without increasing taxes, we now realise, after four years, that we got it all wrong." What they are saying is, "Oh, now that the general election is behind us, we will increase taxes by stealth as much as we can. People will now have to see those tax rises." The Paymaster General has not heard the last of this. Next year, when people see the impact of this Bill in their pay packets, they will say, "What have we got in return? The health service has not been reformed, and the Government have once again broken their promises. They have put forward a proposition that has not been borne out in reality." That is why experts from the left and the right, from employers' and employees' organisations, are very worried about the Bill.
The Bill is best summed up as having been born out of a broken general election promise. The Government went back on what they said during the climate change levy debatethat imposing increases in employers' national insurance contributions was bad, which is why they made a virtue of reducing the burden on employers' national insurance. They have now abandoned that argument altogether. They have broken their promises and they are facing the country with additional taxes that we can ill afford.
That is why we shall vote against the Bill this eveningit will not deliver the improvements in the health service that we want, it will damage the economy, and it will raise taxes from people who are already being put under severe pressure as a result of stealth taxes introduced by the Government.