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Mr. Brown: I gladly give way to the shadow Chancellor so that he can explain his plans.
Mr. Letwin: I am delighted that the Chancellor has given way. I tried to explain it earlier, but perhaps he was attending to his notes. It would be helpful if the Chancellor focused on one issue. Under our scheme
every patient who seeks a hospital place in the NHS will receive that place free—as at present—but they will have choice. The Chancellor hopes to deny them that choice and he wants to prevent the Prime Minister from providing it. Will the Chancellor explain why he is so opposed to the choices of patients?
Mr. Brown: There is, and should be, choice for patients. Patient choice is being extended. However, the right hon. Gentleman's proposals—we welcome any debates on the subject in the House, because they will expose the Conservative party—would remove funds from the NHS and run down capacity that should be built up in the NHS. It achieves that in two ways. There is a deadweight cost for subsidising private health insurance through tax relief, which is at least £1 billion, and there is the additional cost of the vouchers themselves. Those deadweight costs, which apply before anyone who does not use private care benefits, amount to another £1 billion. How can the Conservatives say that the health service is safe in their hands when their fundamental proposal is to take several billion pounds out of the NHS and put it into private care? They do not want to build up capacity in the NHS even though we know that the average cost per operation in the NHS is only half that in the private sector. It is therefore more cost-effective to invest in the NHS.
Mr. Brown: I happily give way so that the right hon. Gentleman can explain the full contents of his pamphlet for the privatisation of the health service.
Mr. Letwin: I was hoping that the Chancellor would tell us—it would help enormously in respect of the debate that he mentioned—whether he accepts that there is some sort of problem on some scale or other about putting 37 per cent. more into something and getting only 5 per cent. out. If there were a problem of that sort, could it be a reason for engaging in some sort of fundamental reform?
Mr. Brown: I am grateful to the right hon. Gentleman, but let me read out what has happened in the NHS over recent years. When we came to power, 11.5 million out-patients were treated, by comparison with 13 million now. In elective surgery, 4.4 million patients compares with 5.3 million now. The 11.6 million consultant episodes then contrasts with 12.8 million now. Ambulance services dealt with 3.5 million people when we came to power, as opposed to 4.9 million now. There were 473,000 magnetic resonance imaging scans, but 786,000 now. With ultra-sound scans, 4.8 million compares with 6.6 million. The 166,000 cataract operations have become—[Interruption.] Conservative Members do not like it, but it is the truth about what is happening in the NHS. Prescriptions of statin have increased from 4 million to 19 million. If the right hon. Gentleman is trying to suggest that that is not an improvement both in the capacity and the productivity
of the national health service, he is making a terrible mistake and is indicting nurses, doctors and good public servants for what they do.
Mr. Brown: I am happy to give way, but perhaps the right hon. Gentleman will now explain his proposals for privatisation of the health service.
Mr. Letwin: I am grateful to the Chancellor for giving way again. Of course I understand the therapeutic effects of reading out lists of that kind for his hon. Friends, but I beg him to enter serious debate about a matter that he says is serious, and we agree with him. Is there not a problem about putting that amount of money in and getting so little out? What is his proposal for curing that problem, if not to introduce choice, competition and contestability? He is in favour of those principles in the rest of the economy and society, so why does he think that they will not produce results in the national health service?
Mr. Brown: Let us talk about productivity between the different sectors. The cost of cataract removal under BUPA is £2,275; the NHS cost is £1,000. A hip replacement costs £8,000 under BUPA, but £4,500 under the NHS. The BUPA cost for a knee replacement is £9,650; the NHS cost is £4,800. A heart bypass costs £13,050 under BUPA; the NHS cost is £6,000. Let the right hon. Gentleman tell me which is more productive. Furthermore, administrative costs in BUPA and the private sector are three times the percentage of income compared with the NHS.
Perhaps the shadow Chancellor can explain another avenue that is being tentatively explored by the Conservatives: charging. In principle, that could be extended to the point of universality. Can he explain that?
Mr. Deputy Speaker: Order. Has the Chancellor finished his speech?
Mr. Brown: Mr. Deputy Speaker, we know where the Conservatives stand. They would abolish the new deal, cut public spending to 35 per cent., privatise much of the national health service and introduce a system of vouchers and private health insurance that would deprive the NHS of billions. That is the vision of Britain that the Conservative party offers the country. That is why people want a Labour vision of stability, employment, growth, investment in public services and a commitment to a national health service free at the point of need. I commend our position to the House.
2.32 pm
Dr. Vincent Cable (Twickenham) (LD): We have not heard much debate on the Queen's Speech, but there have been extensive exchanges about the achievements and failures of the British economy and its management. I am happy to join that debate, but in any intelligent discussion of British economic performance we must
recognise from the outset that there have been achievements as well as failures and I acknowledge some of those achievements.We have had steady growth. There has been low inflation—as there has been in the rest of the industrial world—falling unemployment and rising employment, and a framework has been established for stable monetary policy. All those things are positive. However, just as it is dangerous to ignore the achievements, it is also dangerous to exaggerate them. The following comments were made in the recent past about the performance of the British economy:
- "the British economy is stronger than at any time since the war."—[Official Report, 15 March 1988; Vol. 129, c. 993.]
"In Britain today we have more people in work than ever before in our history; they are better motivated than ever before, and their living standards have improved beyond recognition."—[Official Report, 14 March 1989; Vol. 149, c. 294.]
Kevin Brennan: Before the hon. Gentleman goes on with his impression of Private Frazer from "Dad's Army" and tells us that we are all doomed, will he say whether he recognises that one of the Government's great economic achievements is the national minimum wage? Does he support that?
Dr. Cable: I was the Liberal Democrat spokesman for trade and industry when the national minimum wage legislation went through. I supported it then and have done so constantly; indeed, I have argued that the minimum wage for younger workers was deficient—
Mr. Gardiner: You were in the Labour party then.
Dr. Cable: I was not in the Labour party. I was the Liberal Democrat spokesman and I supported the national minimum wage and I continue to do so.
A feature of Nigel Lawson's period as Chancellor was that—
Mr. Deputy Speaker: Order. May I point out to the hon. Gentleman that it is usual to refer to a Member of the other place as the noble Lord rather than his former name?
Dr. Cable: When the noble Lord was a Member of this place he made one significant achievement: he progressed reform of the tax system and greatly simplified it—something that the present Chancellor has done much to reverse. Indeed, I sense that in many ways the Chancellor's management style at the micro level bears a strong resemblance to the management style being practised at Stamford Bridge under its present manager, Signor Ranieri, who is affectionately referred to as "Tinkerman". The problem with tinkering, whether with economic policy or football, is that it
works well at satisfactory periods, but when problems arise all the distortions and waste associated with tinkering come to light.Before I discuss the Government's record I want to say a few words to the Conservative spokesman. A week ago, the right hon. Gentleman gave an interview to a newspaper about his ambitions for his new office. In his characteristically charming way, he said:
- "I am extremely determined not to turn into a creep".
- "Michael Howard has insisted that there is no conflict between improving public services and cutting taxes, and claimed that the Conservatives' reform plans have received the blessing of the Financial Times . . . The Financial Times has not given such an endorsement. None of the Tories' plans identified significant net savings that would allow for tax cuts".
I now turn to the Government's record. I want to address two central weaknesses: the first relates to the Budget and the second to imbalances in the private household sector.
Next week, we shall hear the pre-Budget report and there will be an opportunity for detailed comment. The Liberal Democrats supported the increased resources that the Government have put into public services, especially the NHS, and we supported the tax measures that were necessary to deliver them. We continue to support those measures. We acknowledge that in many cases there has not been an output—the awful word that is applied to the public services—and that the money has often gone into raising wages and salaries for public service employees in health and education. Of course that is right, because it is necessary to attract and retain staff.
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