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6.19 pm
Mr. Kelvin Hopkins (Luton, North) (Lab): I congratulate my right hon. Friend the Chancellor on committing the Government once again to increasing real-terms spending on health and education. We still have a long way to go, although much improvement has already become evident.
There has been some debate this afternoon about the efficiency of the national health service. I do not think that there has ever been any question about its efficiency; it is its resourcing that has been the problem. Even in the dark days of Tory government, the national health service's output per unit of resource was remarkable. If one compares the NHS with, for example, the privatised system in America, where they spend twice the proportion of gross domestic product on health but millions of their people do not have proper health care, one sees that the NHS is remarkable but has been under-resourced for many decades.
Some Budgets ago, the Chancellor decided to announce massive increases in spending on health. At that time, France spent 3 per cent. more of its GDP on health than us. Three per cent. of GDP is roughly £50 million per constituency every single year. Let us imagine the effect of that sum of money over a 30-year period. At that time, I said that I wanted the £50 million in my constituency every year, and we are moving in that direction, which is welcome. The Germans spend even
more than the French, and it is not surprising that those countries had better health outcomes than ours simply because they were better resourced. As I say, however, we are moving in the right direction.I congratulate the Chancellor on his renewed emphasis on public borrowing for investment; he is absolutely right. United Kingdom gross public borrowing levels are very low by international and historical standards, and there is scope for substantial increases in public investment based on public borrowing. Low long-term interest rates reflect low inflationary expectations, so there is no problem there—public investment is in fact very cheap.
By contrast, our infrastructure needs are great. The Budget shows that the overall quality of our infrastructure compares badly with that in France and Germany. We must invest heavily in infrastructure for the long term, and we should do so through public borrowing. Private borrowing for investment is expensive, and the Exchequer pays a high premium for private investment, which is one reason why I congratulate my right hon. Friend on his emphasis on public investment in this Budget. If we examine the railways, for example, we see that there has been a shift from public to private investment and that the cost of renewing track is four times greater than it was 10 years ago, which is scandalous. That shows how efficient public investment is and how private investment has almost become corrupt.
I welcome the Chancellor's contrasting the performance of the British economy with that of the eurozone. This year, the forecast for growth in the eurozone is 1.7 per cent., which is not enough to sustain employment levels, and one can expect unemployment to rise still further in the eurozone countries. The forecast for growth in Britain is between 3 and 3.5 per cent. That is an enormous difference between Britain and the eurozone.
I shall quote from the Chancellor's speech, although it is not strictly in context. He referred to
- "the flexibility to take the right monetary and fiscal decisions at the right time to sustain stability and growth".—[Official Report, 17 March 2004; Vol. 419, c. 324.]
I have some concerns about the Chancellor's speech, particularly about cuts in civil service jobs. We need more employment rather than less in some areas of the civil service, and particularly in the immigration service.
Many of my constituents come to my surgeries with immigration problems. I have certainly not seen evidence of overstaffing in the immigration service; indeed, I have seen the reverse. We have new tax credit schemes that take a lot of administration, so perhaps we need more rather than fewer staff at the Inland Revenue, but I stand to be corrected.I visited the VAT inspectorate some time ago. It seems that each new VAT inspector can collect six times their salary in tax, and that Inland Revenue inspectors can collect eight times their own salary in tax. More tax inspectors would produce far more money for the Treasury than the cost of their salaries, so there is a case for more rather than fewer tax inspectors. A report published this week states that some 15.7 per cent. of VAT is not collected, and that that figure has increased. That is the equivalent of £12 billion a year, which is a lot of money that the Chancellor could well do with to spend on public services. We also need more benefits officers, because my constituents have problems with the processing of their benefits claims. I am worried about cuts in civil service jobs—no doubt the civil service can become more efficient in certain areas, but I would not want cuts in the services that I have mentioned.
I want to finish by referring to health—this afternoon's debate is essentially about health—and in particular alcohol and taxation. A report published two weeks ago by the Academy of Medical Sciences drew attention to the link between price and alcohol consumption. Over the past 30 years, the cost of alcohol as a proportion of income has fallen by about one half. The Academy of Medical Sciences suggests that a small increase—even a 10 per cent. increase—in the real cost of alcoholic drinks could have enormously beneficial effects. A 10 per cent. increase in price would reduce deaths from cirrhosis of the liver by 5 per cent. in men and 7.1 per cent. in women. It would also lower murder rates and reduce alcohol-related deaths by 28.8 per cent. for men and 37.4 per cent. for women. Those figures are astonishing, and they were obtained by research by the Academy of Medical Sciences. We have a national alcohol problem that must be addressed; we cannot ignore prices or run away from the reality that we must raise them for the consumer to reduce dangerous alcohol consumption.
We should also reduce duty-free allowances and increase the policing of our borders to reduce alcohol smuggling. There is much to be said for restricting the sale of alcohol to the young. I would even suggest minimum retail prices in supermarkets. Pubs and clubs suffer from competition from the cheap alcohol available in supermarkets, and I can see nothing wrong with a health-based minimum price for alcohol in retail outlets, in which case I am sure that we would have better national health, less violent crime, lower death rates, reduced costs to the NHS and would begin to deal with the binge drinking problem.
Mr. Robert Walter (North Dorset) (Con): I am interested in the theory that the hon. Gentleman is expounding, but I wonder whether he will remind the House of what happened in the tobacco market when
duties were increased. At one stage, 90 per cent. of the hand-rolled tobacco in this country was illegally imported because duty was so high.
Mr. Hopkins: I take the hon. Gentleman's point, but tobacco is small and easy to smuggle. We must rigorously police tobacco imports, but I appreciate that it is difficult. Alcohol is larger than tobacco and easier to detect. There is a difference, and it would be easier to control the smuggling of alcohol than tobacco.
Alcohol imposes enormous costs on the NHS, and it also imposes a policing cost. Every Saturday night in my town, the police are on the streets dealing with young people who have obviously abused alcohol. Social services must deal with children from families where alcohol abuse has led to domestic violence.
Mr. Burstow: Has the hon. Gentleman considered that it might be worth examining the fact that policing costs do not fall on those who provide alcohol in pubs? Perhaps those costs should be returned to those who provide alcohol and sell it to drunken people.
Mr. Hopkins: I accept the hon. Gentleman's point, which the Home Secretary is considering. A simple increase in the price of alcohol and the maintenance of a minimum price for it would be effective, but we must take other measures. My proposal is not a complete alcohol strategy and relates to price only.
Finally, the policy would bring the Chancellor enormous revenues that he could spend on public services to benefit the whole population. I am sure that the policy would be popular. A small number of people would, no doubt, complain about a 10 per cent. increase in the price of their drinks, but the great majority of the population would see the sense in raising prices to reduce the harmful level of alcohol abuse, which would lead to a much more civilised life for everybody. In particular, it would reduce the damage that is done to children by their parents' drinking. I urge my right hon. Friend the Chancellor and other Ministers seriously to consider raising the real price of alcohol through alcohol taxation.
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