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Mr. Gardiner: On output, given that the number of scans is increasing and that there has been an increase in the number of early interventions made on patients, does the hon. Gentleman accept that it is not correct to measure output simply in terms of the operations that then need to be done? In fact, an operation is not needed if an early intervention has cured the patient. That is a shift in balance, so to use that measure of output is flawed.
Sir Brian Mawhinney: It would be churlish not to recognise that the Government have put more money into the health service in recent years than most hon. Members can remember. Funding has risen by 10 per cent. over the past four years and has produced an increase of 1.25 per cent. in finished consultant episodes, the technical benchmark. I was Minister of State in the Department of Health in the early 1990s. We increased
Dr. Cable: The simple answer is that there are too few staff. One of the more shocking statistics to emerge over the past few days is that, in the past financial year, the Government spent £1.2 billion on health service agency fees, with a premium of 20 per cent. However, the question that the right hon. Gentleman must answer is why that shortage existed in the first place. To their credit, although the Government have spent £5 billion on health service agency fees, they inherited a depleted staff. That is the benchmark against which we must operate.
The key point is that a great deal of public expenditure is misdirected. The example that emerged this morning was that the NHS is paying hundreds of millions of pounds in excessive charges to drug companies as a result of lax procurement policies. Precisely the same problem exists in the Ministry of Defence. We learned last week that the Government are paying hundreds of millions of pounds in excessive commercial rents for property because senior civil servants refuse to accept redeployment to provincial cities, where they would be able to work much more cheaply and efficiently.
The Queen's Speech contained a perfect example of proposed legislationthe Bill on identity cardsthat will result in an enormous waste of public resources. I do not want to rehearse all the civil liberties arguments, but a sophisticated ID card system will require expenditure in the order of £3 billion.
Mr. Foulkes: The hon. Gentleman is in danger of getting carried away with his own oratory, but it is easy for him to nitpick the proposals put forward by the Government, and even by the Tories. Is not it about time that he spelled out the proposals of the Liberal Democrat party? They deserve some scrutiny, as the moneylet alone the compulsory cod liver oilthat his party proposes to give away to pensioners and students amounts to a £14 billion black hole. Is not it about time that he spelled out his party's policies, so that they can be subject to some real scrutiny?
Dr. Cable: I think that I am picking rather bigger creatures than nits. I would be happy to have a debate on the relative merits of higher or lower top-rate marginal tax, or of council tax as opposed to local income tax. Those are interesting matters, but it would help if Labour Members got away from the utterly puerile line of argument that we have heard in recent weeks from the Prime Minister. The imaginary figures that he has plucked out of the air are on the same intellectual level as the claims by the leader of the Tory party that the Prime Minister is, somehow or other, a leading light in the Campaign for Nuclear Disarmament. That level of political debate drags down the reputation of all hon. Members. We need to have a proper and serious debate about economic policy.
I was introducing the matter of the very large costs associated with ID cards. Those costs are not simply financial. All hon. Members have dealt with the immigration and nationality directorate, and know that the Home Office is probably the most incompetent of all Government Departments. Implementing the ID card scheme will require a most sophisticated programme, and the Home Office will have to handle the matter. It has already failed in the delivery of IT systems that are less sophisticated than what will be required for the ID card scheme.
Especially perverse is the introduction of a programme that is very costly and sophisticated at precisely the same time that the NHS is embarking on what it calls the biggest IT project on the planet. The Treasury should have been a little more observant, perhaps. The two projects will compete for the same systems engineers, and make the same demands on a vastly overstretched IT supply industry. Costs will be massively inflated as a result: the capacity is not there, and there is a total absence of anything remotely like planning.
To respond directly to the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I can tell him that my party is concerned with specific ways in which Government expenditure can be cut to finance priority public spending. The leader of my party said at our summer conference that we shall find £5 billion in cuts, and I am happy to endorse that.
In case we are accused of being imprecise, I shall give a concrete example of that. For three or four years, I have shadowed the Department of Trade and Industry. That Department employs large numbers of civil servants, who spend large amounts of money. Increasingly, I came to share the view of most of the Department's clients that it is little more than a regulation factory. As a sideline, it runs various industrial assistance schemes whose benefits are entirely swallowed in overheads. Large areas of its functions could be dispensed with, with no great loss to the public or diminution in public service.
Geraint Davies: Is the hon. Gentleman serious when he suggests that improving productivity in the NHS through investment in IT should be delayed for a few years because there are not enough consultants? Is that Liberal Democrat policy, given that we have heard today that US productivity is at its highest for 20 years because of the dividends accruing from investment in IT? What sort of proposal is that?
Dr. Cable: I was saying exactly the opposite. It is, of course, absolutely necessary that the NHS has an efficient IT system. That system must be successful, or the NHS will not function in the future. We fully
I revert to the other major problem, which is that there are imbalances in the economy. Those imbalances were obvious in the 1980s, and are now reappearing. The Chancellor's great claimwhich has been vindicated so far, and for which he deserves creditis that the old economy of boom and bust has gone. However, it has reappeared in a new form. There is a massive boom in credit and debt expansion, and in the housing market.
So far, that boom has proved to be sustainable, but the indicators are extremely worrying. That is not my judgment alone. The Governor of the Bank of England gave a warning six weeks ago, which he then partially retracted, and the Treasury's Mr. Ed Balls has also warned of the dangers that exist. The debt-to-personal-income ratio is three times what it was 20 years ago and, even with extremely low interest rates, the debt service ratio for households is now over 12 per cent., compared with 9 per cent. when the Government took office. House prices in relation to incomes are way beyond equilibrium levels, and will therefore fall. That is not my judgment, which is not important; it is the technical judgment of the Monetary Policy Committee.
Something is seriously wrong when a reputable bank, like the Royal Bank of Scotland, can send out a gold card with a £10,000 credit limit to a dog called Monty. The irony of the situation is that if Monty had wanted to invest £10,000 for his old age in the kennels, he would have had to bring in a financial adviser who would have spent an hour checking that the product was not being mis-sold. There is absolutely no restraint on excessive credit expansion. Indeed, in supermarkets like Homebase many of us are pursued by people with clipboards asking, "Will you take £5,000 worth of credit from our credit card company?" Is this a sensible, sustainable way to maintain the economy? Both sides would probably answer, "There is not a great deal we can do about it because we have a market economy".
Rightly, we have a liberalised credit market and of course one cannot order banks and credit companies to do this or that. Nevertheless, surely the Chancellor should acknowledge publicly that there is a serious problem. He could start to take various steps. He should be talking to the Bank of England and the Financial Services Authority about whether it is possible, as already happens at an international level with the International Monetary Fund and the World Bank, to define what is sustainable private debt, to set out some objectives for the banks in terms of prudent loan-to-value ratios or income multiples and to name and shame banks that go beyond that level.