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Dr. Reid: I have waited a long time to hear with what ingenuity someone could turn a 10 per cent. expenditure increase into a bad news story. Today we have heard an attempt at that. I have to tell the hon. Gentleman that it is not Labour that is out of touch either with addressing people's needs or with improving the national health service; I fear that it is the Conservatives.

I shall deal with some of the points that the hon. Gentleman raised. As usual, there was a dig at vast administrative costs, bureaucracy and waste. There is always a sting in the tail, with an attack on the staff of the NHS—but Labour will defend them. I shall give a couple of figures. In fact, PCT management costs are 1.5 per cent. of total expenditure. The costs of senior managers in the NHS, who number about 38,000 out of 1.3 million staff, are between 3 and 5 per cent., which is about a quarter of the management costs in private health care and about one fifth of the administrative costs in the American health care system, so is it not time that we praised the NHS for its efficiency?

The hon. Gentleman raised the issue of deficits, as he has done before. I have two things to say to him on deficits. The first is that they are forecasts: every year for the past few years there has been a forecast deficit in the NHS, but in fact over the past four years the NHS has been in financial balance at the end of the year.

The hon. Gentleman wants to talk about forecast deficits, but I can tell him that the problem occurs when there are actual deficits. The last time there was a significant actual deficit—£500 million, twice the size of those forecast deficits, in a budget half the current size—was in the last year of a Conservative Government. In other words, the actual deficit then was three times higher than the forecast deficit the hon. Gentleman is worrying about now.

The hon. Gentleman asked me if we would reconsider the market forces factor. We keep it under review, but as he knows, the market forces factor was identified by the resource allocation working party as far back as 1976, so it is not new. Its development is overseen by the Advisory Committee on Resource Allocation, and it is the result of many years of analysis by academics. The population figures from the 2001 census that we are using are, first, more accurate and, secondly, adjusted to pay some degree of attention to forward projections. There are four areas, including that of my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and the Thames gateway area, and they will be glad to know that we are taking account of that
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projected need. I was asked whether deprivation would be taken into account. The answer is that the projections take account of actual as well as assumed need. I could go on at length about that but I do not think that we need to take up more time, because for the past five years we have taken independent advice on the matter.

I finish on this point: the hon. Gentleman started off by challenging the methodology for, and thus the legitimacy of, the allocations. Does that mean that he intends to revisit them? Is he going to tell Members that these huge increases may be taken away from them? If so, he should say that today, because that will be another reason for people to be extremely careful about even considering voting Conservative when the election comes along. The truth is that under the plans of a Conservative Government, £1.2 billion will be removed from that expenditure: £4 million will be taken from every single PCT to subsidise the relatively well-off to jump the queue and go to the private sector if they can afford half the cost of their operation. That is an attack on the founding principle of the NHS, and I am sure that people out there will recognise the difference between investment in the NHS and an Opposition party committed to the virtual destruction of the ethos of the NHS.

Mr. Paul Burstow (Sutton and Cheam) (LD): I thank the Secretary of State for early sight of his statement. As ever with these statements, the devil is in the detail. In broad terms, the Liberal Democrats welcome the allocations announced today and the increased investment that they imply. We see it as our task to continue pressing the Government to make sure that the investment going into the NHS is spent as wisely as possible.

The Secretary of State talked about primary care trust allocations. Can he tell us when he plans to make announcements about central allocations, too? He had a lot to say about improving public health and tackling health inequalities. In earlier proposals, he set out his plans for a partial ban on smoking in public places. If the intention really is to protect people's health, why does the health of customers and workers in pubs not need protection unless they are consuming food? How will that policy close the health gap between the richer and poorer areas of our country, which is, it seems, a Government priority?

Given that the latest National Audit Office report found that many GPs were seriously worried about the effects of the Secretary of State's patient choice policy on equity in the NHS, can he tell us what measures will be taken to address the real concerns of practitioners up and down the country? Does he agree that the NHS at local level should have the maximum possible freedom to decide how best to meet the health needs of local people, and that meeting those local health needs rather than hitting politically dictated targets should be the priority?

The Secretary of State said that there would be no more hidden waiting lists, but when will that be? Will he agree to publish, before the election, the hidden waiting times for scans and tests so that people can judge the Government's record for themselves? Will he also confirm that his target is that by 2008 up to 15 per cent. of procedures paid for by the NHS will be undertaken by the private sector? Does that not mean that in future
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the private sector will no longer simply be adding extra capacity to the NHS but replacing existing quality NHS provision?

What assessment has the Secretary of State made of his targets for PCT budgets? Will he confirm that the guaranteed contract payments for independent treatment centres mean that they will be paid regardless of the work they do, and that that is why 73 per cent. of NHS chief executives say that that does not offer good value for the taxpayer? Will the Secretary of State tell us why he thinks that after eight years of Labour Government, top NHS managers describe his approach as political, prescriptive and bullying?

More people are getting sicker in the NHS because of superbugs. More people are having difficulty in finding dentists on the NHS. More people are struggling to get appointments with GPs when they want them, and more people are waiting on hidden lists for scans and tests. That is the Government's real record, and that is what will count with our constituents.

Dr. Reid: The estimate that up to 15 per cent. might be added to capacity, or might be private operations, is just that—an estimate; it is not a target and it is not being driven. It will depend on patient choice. We are expanding the NHS and diversifying the type of treatment, making it much more efficient. It is free at the point of need, and in addition we are buying in bulk to push the price down and to give the patient the choice of quicker access to services. That is precisely why we have halved waiting times, and why we have taken 340,000 people off the waiting lists that we inherited from the Conservatives. Ultimately, it will be the choice of the individual—[Interruption.] I cannot hear what the hon. Member for Sutton and Cheam (Mr. Burstow) is saying from a sedentary position. If he is asking whether that is a substitute for NHS operations, I can tell him that when the Government came to power NHS operations were below 5 million, and that about 6.5 million operations will be carried out directly through the NHS, so we are not taking anything away. In addition, there will be another 500,000. That is good for patients. For heaven's sake, I wish that for once the Liberals would think of these things from the patient's point of view, rather than always from the producer's or the provider's point of view.

For 60 years, no Government of either party have measured hidden waits, and we do not have the mechanisms to do so at present; but I have pledged that if the Labour Government are re-elected not only will we ensure that the maximum wait is 18 weeks, as opposed to 18 months under the previous Government, but that that will be the time for the whole patient journey. Previously, one third of the journey took up two years, we shall now pledge the time right through from the GP to the door of the operating theatre.

The hon. Gentleman asked about local decision making. At present, 75 per cent. of all money is distributed to PCTs, and they take responsibility for it. He asked about GP front-line engagement. Yes, we need more GP engagement in a range of areas, including the introduction of IT, which is why, recently, I put not only more effort but £95 million into that.

The hon. Gentleman asked about workers in restaurants and pubs. They will be protected to the maximum where smoking is banned completely. No
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restaurants will allow smoking, but even in the minority of pubs that continue to allow smoking, there will be restrictions around the bar area to protect all workers.

Finally, I thank the hon. Gentleman for what he said when he started: he appreciated the 8.1 and 8.2 per cent. increases in his constituency—£35 million followed by £37 million. He was not in the least bit churlish, and he should not be, because he is getting an 8.1 per cent. increase. To put that in context, the person who was churlish—the hon. Member for South Cambridgeshire (Mr. Lansley), the Opposition spokesman—is actually getting a bigger increase: 8.2 per cent. I thank the hon. Member for Sutton and Cheam for his charitable and non-churlish response.

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