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Mr. Letwin: Unlike some of the questions from Labour Members, that is a perfectly sensible question and there is a perfectly sensible answer to it. The other half of the cost of our policy in the first Parliament will be met, paradoxically and ironically, by the reduction in means-tested benefits that will be achieved by floating pensioners off means-tested benefits. The second and subsequent Parliaments do indeed require further funding. Part of that funding will also come from floating more and more pensioners off more and more means-tested benefits, giving them dignity and an incentive to save in retirement. We will come forward with detailed proposals about how, in those second and subsequent Parliaments, the remainder of those costs will be met well in time for the election. We can have an interesting debate with the hon. Gentleman. It would be nice if I thought that we could also have an interesting debate with the Labour party, which seems determined to make more and more pensioners dependent and to give fewer and fewer people an incentive to save. It is a tragedy for this country.
Mr. John Redwood (Wokingham) (Con): Given that the Chancellor taxed telephone companies and they crashed, and that he then taxed pension funds and they were driven to near bankruptcy, as a fellow home owner does my right hon. Friend fear that the Chancellor is now going to tax housing to the point where that is destroyed, too?
Mr. Letwin: My right hon. Friend is absolutely right in his suspicion that this is a Chancellor whose ingenuity in designing 60 additional taxes knows no bounds. There may be no limit to the number of things that he will in due course tax. However, I hope that we will see in the pre-Budget report and in the Budget that follows that even this Chancellor desists from what were mooted as plans to tax primary residences. That would be the death knell of this Government.
In the NHS, where the Chancellor has said that
- "the consumer is not sovereign,"
I hesitate to intrude on the private grief of the relationship between the Chancellor and the Prime Minister, but the Chancellor will be aware that the Prime Minister describes the input-output measure of productivity as "bizarre". The Prime Minister continues that it
- "takes no account of improvements in waiting times."
The Prime Minister's argument, however, suffers from another, simpler deficiency: waiting times have not been coming down. According to the Government's latest figures, the average waiting time for NHS operations has gone up from 91 to 99 days. On the Prime Minister's logic, taking account of waiting times, we can presumably say that NHS output has increased by less than 5 per cent. after 37 per cent. more funding has been put into the system.
I fear that other measures of performance in the public sector also give grounds for serious concern. Despite the fact that we have more police, more than 50 per cent. of police officers on a shift are delayed in the station and a crime is committed every five seconds. One in three children leave primary school unable to read, write and count properly. It is true that there are times when the Chancellor seems almost ready to acknowledge that central control can have adverse effects on overall efficiency, but he goes on to assert that central control is nevertheless needed to ensure consistent standards. That argument does not match the facts. The quality of local schools, hospitals and police forces varies widely from one area to the next. Hospital mortality figures show that patients are twice as likely to die in the worst-performing hospital in England as they are in the best.
Mr. Tom Harris (Glasgow, Cathcart) (Lab): Will the right hon. Gentleman give way?
Mr. Letwin: It is very unlikely.
In the 10 best local education authorities in the country, 60 per cent. of pupils obtain five good GCSE passes, whereas in the worst 10 half as many do. It was never meant to be like that. The Prime Minister knows that. He understands that public services desperately need real reform.
Mr. Harris: Will the right hon. Gentleman give way?
Mr. Letwin: As the hon. Gentleman is so insistent I feel some pity for him. I hope that he can make a constructive contribution—if he does, it will be the first time in my experience.
Mr. Harris: I am grateful for the graciousness with which the right hon. Gentleman has given way. In the spirit of helpfulness, it would be extremely useful if I were able to respond to inquiries from my constituents, who might wonder how much a pensioner would have to take to the private health service along with the voucher that a future Conservative Government would
give. For example, if a pensioner in my constituency wanted a hip replacement operation, how much of her own money would she have to take to the private health service under the voucher scheme proposed by the Conservatives?
Mr. Letwin: Blow me down—the hon. Gentleman has made a constructive contribution to the debate. He has asked a perfectly reasonable question. The problem that pensioners face today is that they cannot choose a hospital within the NHS. [Hon. Members: "Answer the question."] I will come on to answer the hon. Gentleman's question directly. The problem that the pensioner faces in the NHS as run by the Chancellor and his acolytes, is that he or she is not able to choose a hospital. That pensioner is not sovereign; the bureaucrats are.
Under our passport, that pensioner will be able to choose which NHS hospital to go to and the amount that he or she will pay for going there will be zero. The pensioner will receive treatment at NHS hospitals that is free at the point of care, as at present. Today, that pensioner may be spending his or her life savings on having an operation in the private sector, and when doing so the amount that he or she will receive from the taxpayer is zero. Under our proposals, that pensioner will get a subvention from the taxpayer broadly equal to the marginal costs that would otherwise be encountered in the NHS. That is a rational policy that the Government, under the Prime Minister, would adopt were it not for the fact that the Chancellor will not let them.
Many in the House will remember the Prime Minister telling The Big Issue in 1997 that
- "the days when government shovelled out more money are just not going to happen any more",
- "we must be bold on reform, opening up public services to greater diversity of supply"—
- "consumer choice and flexibility of working, ending the 'one size fits all' idea of the past."
- "It is a special responsibility to stake out the centre ground of British politics"—
- "how to combine investment in our public services with genuine reform so that they become personalised services built around the individual."
The Chancellor has made a colossal structural mistake. His recent utterances about reform serve only the purpose of masking that mistake; they do not remedy it. In the Queen's Speech, there should have been bold moves to turn the public services round so that they become responsive to their users rather than the bureaucracy—the very point I was making earlier. However, to do that—[Interruption.]
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