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Nic Dakin (Scunthorpe) (Lab): Will the Secretary of State guarantee that these proposals do not allow charitable private schools to buy places at university?

Mr Willetts: That is not the purpose of these reforms.

Mr Rob Wilson (Reading East) (Con): I welcome the broad thrust of my right hon. Friend’s statement, particularly the increased competition and supply-side reforms, which will lead to a much more dynamic HE sector. I hope to respond separately to the consultation on OFFA. In the White Paper, what lessons have been taken from the community college system in the United States, where business plays a part not only in designing but in funding courses?

Mr Willetts: Again, my hon. Friend has a long-standing commitment to this. He describes exactly the type of innovation we hope to see as we liberalise the system. We very much wish to encourage the American model of two-plus-two courses, whereby someone may do two years at a community college and then move on to do one or two years on an honours degree at a university.

Jon Ashworth (Leicester South) (Lab): Does the Minister agree that higher education should be one of our greatest exports? Over many years, thousands of students have come over to study at the two universities in Leicester, yet with his comments on contact hours, the mess over student visas and the cuts to the teaching budget, more and more international students will choose institutions in Australia, Singapore and the USA instead of the UK. Is he not concerned about that?

Mr Willetts: There certainly is growing international competition for students. Higher education is becoming more of a global market. I am confident that British universities, with high standards and no limit on the number of legitimate overseas students, will continue to attract many overseas students.

Duncan Hames (Chippenham) (LD): Fourteen years ago, the Dearing report identified employers, alongside students and the state, as stakeholders in higher education. What measures will the Minister use to facilitate the contribution of employers to the costs of the higher education that they require of the graduates they recruit?

Mr Willetts: This goes back to an earlier question. Let me make it absolutely clear that one of the proposals in the White Paper is to make it easier for employers and charities to sponsor additional places at university. That is an additional flexibility in the system. Already, 6,000 university places are sponsored by employers in that way. However, it is not our intention that these proposals be abused by people to purchase places at university that they could not achieve on academic merit.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): The Minister knows that this is the day of the launch of the higher education commission. All of us who care about higher education want to digest the White Paper, hope that it has green edges, and will see whether we can improve it. The Minister constantly talks about the student being in the driver’s seat, and about consumer satisfaction and student satisfaction. Our universities

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are made of other materials. Their values and principles come from their academic staff and long traditions. Getting the balance right is a difficult task. Please do not let us go just down the consumerist route.

Mr Willetts: There is a real dilemma here and I respect the hon. Gentleman’s raising it in the House. I believe that putting more power in the hands of students, introducing the choice that we put forward in the White Paper and recognising that the student is in many respects a consumer will not destroy the traditional values of higher education, but strengthen them. I think that the proposals will bring traditional, high-quality teaching and close academic engagement with students back to centre stage. We should not fear these forces. Respecting the autonomy of universities is the best single mechanism we have to drive the traditional high academic standards that we believe in.

Jason McCartney (Colne Valley) (Con): I had an enjoyable night last Monday at the students’ union awards at Huddersfield university, where many students are enjoying their student experience. When students are exercising their choice and picking their university and course, what additional information does the Minister envisage being made available to them?

Mr Willetts: There is a lot of important information that we think prospective students should have, ranging from the contact hours through to the employment prospects at the end of a course. We think that such information should be widely available. Which? has given a clear indication that it will deploy the information and help prospective students to assess it.

Bill Esterson (Sefton Central) (Lab): According to the House of Commons Library, there is a funding gap of between £600 million and £1 billion as a result of the mistakes the Minister has made. Are the Government not going too far and too fast on higher education, as on so much else? Is it not true that quality will suffer from his attempts to deal with the funding gap, as we have heard from my hon. Friends? To use his own words, that will be “unfair to students, to universities and to the country.”

Mr Willetts: There is no such funding gap, we are not going too far and too fast, and there is no threat to quality.

Andrew Percy (Brigg and Goole) (Con): When I voted against the rise in tuition fees, I did so because of the impact I thought it would have on some of our more vulnerable young people. I welcome much that is in the White Paper, particularly the increase in choice. However, the problem with increasing choice is that it can increase confusion. Many young people can access advice from their financially literate and educated parents, but for vulnerable children choice can result in confusion. What work will the Minister do with schools and colleges to ensure that proper support mechanisms are in place to support vulnerable young people?

Mr Willetts: This is about the importance of information, advice and guidance in our schools and colleges. Again, I pay tribute to the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) for his work in examining the matter carefully. I urge Members of all

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parties to take every opportunity to visit schools and colleges and get past some of the misinformation, and be absolutely clear to young people that no young person or their family will have to pay up front for the opportunity of going into higher education. I regret the anxiety about the matter, but it is misplaced and all Members, whatever their political views, have a shared responsibility to tackle it.

Paul Blomfield (Sheffield Central) (Lab): There is concern on both sides of the House about the expansion of the for-profit sector in higher education. Will the Minister not learn from the experience of the United States, where the for-profit sector has a higher failure rate than other universities and is currently being investigated for misrepresentation to prospective students? Will he listen to the concerns of HEFCE, which says that the expansion of the for-profit sector here will damage the reputation of our university system?

Mr Willetts: We are not Americanising our higher education system. There are important differences between the system that we are proposing and the American one, not least of which is universal access to Exchequer-financed loans, which is not possible in the US. Also, there is a robust quality assurance system, the Quality Assurance Agency for Higher Education, which we are keeping. We are not Americanising the system.

I noted that in what the shadow Minister said there was no recognition of the fact that under the previous Labour Government, five private providers were awarded degree-awarding powers. That seems to me an indication that even the previous Government were not opposed to the private provision of higher education. I very much hope that Labour is not abandoning that position.

Dr Julian Lewis (New Forest East) (Con): When all sorts of universities were obliged to charge the same, a student from a modest economic background had only to consider how well he or she would do in examinations and interviews in order to get a place at the best universities. Now, that potential student will have to consider how much he or she will be paying to go to a good university compared with the lesser amount required for a lesser university. Is that a step forward for meritocracy or a step backwards?

Mr Willetts: My hon. Friend talks about how much they will be paying, but we should remember that no student will pay up front. What will be crucial in determining their repayments is their earnings, and because we have raised the threshold, their monthly repayments, regardless of the university fee, will actually be lower under our proposed system than under the system we inherited from the Labour Government.

Gavin Shuker (Luton South) (Lab/Co-op): I noted the Minister’s answer to the question about the funding gap, but I have to say that I found it quite inadequate. Will he tell the House by how much he will have underestimated the cost to the UK taxpayer should universities choose to charge an average of, say, £8,000?

Mr Willetts: I will happily share with the House the arithmetic on which we have made an estimate, although nobody can know the exact figure. [Interruption.] I can tell the shadow Secretary of State exactly how it is done.

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We start by assuming that 350,000 students will apply to English universities in October 2012. We assume that 90% of them will take out a student loan, which is actually a rather higher proportion than do so at the moment—who knows whether it will be more or less than that? We assume an average loan, which is not the same as the fee—people may borrow less than the fee—of £7,500. Multiplying all that, we get approximately £2.4 billion of student loans. We are in an uncertain world, but if the hon. Gentleman is claiming, as the hon. Member for Sefton Central (Bill Esterson) did, that there will be £3.4 billion of student loans, I have to tell him that that is very, very unlikely.

Robert Halfon (Harlow) (Con): Is my right hon. Friend aware that Anglia Ruskin university is opening a university campus in Harlow later this year, which will be the first time in the history of the town that we have had a university? I noted that he said in his statement that the Government would extend the scope for employers and charities to offer sponsorship, and talked about the national scholarship programme. Will he explain what that means in practice, so that disadvantaged students in Harlow can benefit from our new university?

Mr Willetts: I do not fully understand my hon. Friend’s proposition, but we are committed to access for students in the circumstances that he describes. Perhaps we can meet to go through his proposition more carefully, but it sounds interesting and imaginative.

Helen Jones (Warrington North) (Lab): Will not the real effect of the Minister’s White Paper be to allow private institutions to cherry-pick those courses that are easiest to deliver, and to drive down costs by driving down quality? What modelling has his Department done of how many courses will cease to exist, and how many existing universities will be non-viable as a result?

Mr Willetts: The hon. Lady and the Labour party must decide whether they are to approach the future of higher education assuming that the private sector is the enemy. If they decide to take that approach, which, as I have said, is different from the one they took in government, they will be making a serious mistake. Students do not think about the exact legal status of the institution they study at; they want to focus on the quality of the education they will receive. We will ensure that any institutions for which students can receive student loans are properly audited, regulated and monitored. That is the right way forward.

Iain Stewart (Milton Keynes South) (Con): I very much welcome the plans to increase the role of business in higher education. Four out of five FTSE 100 companies have sponsored their staff through courses at the Open university in my constituency. Will the Minister say a little more about how he plans to incentivise businesses in that respect, for part-time as well as full-time courses?

Mr Willetts: I pay tribute to my hon. Friend’s strong commitment to the Open university and his close involvement with it. The OU could be one of the main beneficiaries of the new flexibility with the 20,000 extra places, and we very much expect that it will be able to

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offer its degree for delivery at a range of local FE colleges and other providers. Our proposals make the funding available for that.

Diana Johnson (Kingston upon Hull North) (Lab): The Minister has talked a lot about what will happen to the top university institutions and those that were formerly polytechnics, but I am interested in my local university. Hull university is a good, local university, but under the proposals in the White Paper, it will be part of the squeezed middle and will lose places. What is the future for institutions such as Hull university?

Mr Willetts: The future is one in which, year after year, we try to increase the flexibility in the system. We have had to strike a very fine balance in the first year. We wanted a significant shift to more openness and flexibility, but we fully recognise that there is a limit to how much change the system could take in that first year. I do not know the exact intake of the university of Hull, but I very much hope that in future, it, too, can participate in the types of flexibility that we have set out today.

Mary Macleod (Brentford and Isleworth) (Con): I welcome today’s statement. Does my right hon. Friend envisage an enhanced role for colleges such as West Thames college in my constituency in delivering better outcomes in higher education?

Mr Willetts: West Thames college can put in a bid to HEFCE under the 20,000 places scheme that we have launched today. I very much believe that some further education colleges that offer higher education can take advantage of the new flexibility that we have launched.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I very much trust that as a result of the Minister’s White Paper, excellent colleges such as Newman college, in Bartley Green in Birmingham, can call themselves universities. However, may I take him back to the question from my hon. Friend the Member for Warrington North (Helen Jones)? The Minister must have made an assessment that some institutions will no longer be viable. How many will there be, and what provision has he made for the students who will be caught halfway through their courses if their institution becomes non-viable?

Mr Willetts: Successive Governments have never given a guarantee that every institution will carry on. However, it is unlikely that the changes we have launched today will of themselves make any institution unviable—I do not know that, but it is unlikely. Of course, it is also clear that there would be a commitment that any student should be able to complete their studies.

On the hon. Lady’s first point, I very much hope that it will be possible for institutions that have a clear focus on higher education to take the title “university” when they were previously prevented from doing so because they had fewer than 4,000 students. We have said that that should be reviewed, because some excellent higher education institutions would like to take the name “university”. I am sure that any such proposal will be very carefully considered.

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Julian Smith (Skipton and Ripon) (Con): I welcome the furthering of links between business and universities. Which developing and emerging economies does the Minister think we have most to learn from, and when will Sir Tim Wilson produce his report?

Mr Willetts: I hope that it will be possible for Professor Sir Tim Wilson to report to us by the autumn on his observations. Having visited our main trading partners, encouraging legitimate overseas students to study in the UK and building education contacts, I think there are opportunities for us to learn from them, but equally there remains a great desire among them to learn from us. Some of our vocational qualifications are well respected, especially traditional, well-established qualifications such as City and Guilds, HNCs, HNDs and BTECs. I want to see those expanded, as do the Secretary of State and the Minister for Further Education, Skills and Lifelong Learning. Indeed, one of the new flexibilities will be to have a BTECU. It will be possible to take BTECs beyond A-level, so we could imagine a level 4 or 5 qualification—it might not be a full-blown honours degree, but it could be called a BTEC even though the organisation offering BTECs is not a teaching institution. That is the type of new flexibility that we are going to make possible so that higher-level vocational qualifications can be properly studied in our country.

John Woodcock (Barrow and Furness) (Lab/Co-op): I have met the Minister to discuss the difficulties faced by the university of Cumbria in recent years. That institution is trying the difficult process of turning itself around, but does he not accept that the chaotic package of reforms he is suggesting today could increase the risks faced by this university and others like it, which are critical to the economic success of the areas in which they are situated?

Mr Willetts: We on the Government Benches believe in openness, flexibility and innovation, but every time we propose it, Labour Members call it chaos. We are not going to have a central plan, and we are not going to say exactly what the quota is for each individual university—and rightly so. We believe in openness and diversity, and the hon. Gentleman ought to be able to recognise that moving away from a centrally planned system, which of course will mean less central control, does not mean chaos; it means students getting the higher education they want.

Mr Speaker: Order. As I said to the Justice Secretary the other day, Ministers at the Dispatch Box should not operate like rotating cruise ships, constantly turning round to their own side. It is entirely understandable, but we want to see the right hon. Gentleman.

Graham Evans (Weaver Vale) (Con): I very much welcome the White Paper, particularly the provisions for part-time students. Will my right hon. Friend give me more details about his idea for student charters?

Mr Willetts: We invited the outgoing president of the National Union of Students and a vice-chancellor to work together, and they have produced a useful pro forma, which we refer to in the White Paper, and which gives an example of what universities are entitled to expect by way of student behaviour, and what students are entitled to expect by way of respect for them from their higher education institutions.

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Kevin Brennan (Cardiff West) (Lab): I want to ask about the Minister’s private providers. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) mentioned Poundland. Has the Minister thought about approaching BrightHouse? First, BrightHouse university is a great name, and secondly it is expert at loading heavy debt on to people who cannot afford to repay it.

Mr Willetts: If Labour is going to take this approach to private provision, it is making a serious mistake. We are focused, quite simply, on the quality of the student experience, and this kind of snobbery—that some kinds of provision are okay and others are wrong—is out of place in modern Britain. The hon. Gentleman should remember that all universities are, strictly speaking, private institutions; they are not public sector bodies. Government Members believe in maintaining their autonomy. We wish to see a greater range of universities but all sharing the same feature—that they are not part of the public sector.

Mark Pawsey (Rugby) (Con): When the previous Government increased fees, students started to ask about the value for money provided by their courses. What steps is the Minister taking to ensure that in future students get better teaching and a better overall experience at university?

Mr Willetts: Universities will have to provide far more information about that than they have in the past. We hope that they will provide the kind of information that local authorities now provide to council tax payers—that is, about how the money that students have paid in fees is being used. The more information, the better.

Clive Efford (Eltham) (Lab): The Minister has made much of wanting to introduce equality into the system, but one thing that infuriates many students, particularly from my constituency, is having to watch those who go to so-called charitable private schools easily obtaining places in the best universities. I did not hear the Minister say no in answer to the question from my hon. Friend the Member for Scunthorpe (Nic Dakin), so will he now say whether those students will be able to purchase places? If they will, they could get into the best universities not on merit but on their ability to pay.

Mr Willetts: No, they will not be able to do that.

Mr Robin Walker (Worcester) (Con): I welcome my right hon. Friend’s statement. Like many Government Members, I particularly welcome the support for universities working with business. Will he ensure that Professor Wilson’s review does not just cover sandwich courses, but covers the support that they can provide their graduates, such as that provided by the very good paid graduate intern scheme supported by the university of Worcester?

Mr Willetts: I am aware of that scheme at the university of Worcester, which was very imaginative. My hon. Friend is right that the review will go beyond sandwich courses. Again, because we will expect universities to publish information about the employment outcomes for their graduates, this will give them a much stronger incentive to make more efforts to ensure that their graduates are indeed employable.

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Neil Carmichael (Stroud) (Con): I welcome this excellent statement because it paves the way for more quality and better choice. How will we encourage businesses to co-operate with universities to encourage research and development?

Mr Willetts: There are some barriers here. One of our frustrations—I am sure that we have all come across examples of this—is that small and medium-sized enterprises might like the use of a piece of equipment that they could not afford to buy themselves, or they might like some technical advice on a project, but they do not realise that there is a university in the area that might have that piece of equipment or those technical experts. The SME does not necessarily ever step foot inside the university, and does not know what is available. We want to break down those barriers, and that is what we are looking to Professor Tim Wilson’s review to tackle.

Elizabeth Truss (South West Norfolk) (Con): Although I support relaxing the Stalinist quotas that we have had in our universities, I am concerned that a flat AAB hurdle may disincentivise people from taking subjects such as science and maths, which state school students are already half as likely to take as their independent school counterparts. What can the Minister do to address that?

Mr Willetts: In a letter that the Secretary of State and I have sent to HEFCE today we make clear our continuing commitment to strategically important and vulnerable subjects. We will of course monitor the effects of the change in the first year, but we wish to take it further, so that gradually more and more A-level grades are included in the system.

Christopher Pincher (Tamworth) (Con): Will my right hon. Friend work with the Secretary of State for Education to introduce a system of post-A-level university applications? The current system, whereby many students are offered places based on their predicted grades, is bureaucratic and inefficient, and undermines the opportunity of many of our most disadvantaged students to get places, because their grades are routinely under-predicted. Will my right hon. Friend consider this long overdue reform?

Mr Willetts: I have a lot of sympathy with my hon. Friend’s points, which are important. The current system is exceptionally complicated, with a large amount of interaction between the prospective student and the university. We have asked UCAS to look into the situation, and we will await its proposals. The idea would take some time to implement—I suspect that successive Governments have wrestled with this challenge—but it is also one that we put forward in the White Paper.

Mr Philip Hollobone (Kettering) (Con): Does the Minister believe that these proposals, together with the Government’s previously announced reforms, will lead to more two-year degrees, as opposed to three-year degrees, and is that something that he would wish to encourage?

Mr Willetts: I agree with my hon. Friend. That is exactly the kind of flexibility that we wish to see in the new system.

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Mr Marcus Jones (Nuneaton) (Con): Will the White Paper strengthen the link between universities and employers, so that we can get even more of our graduates into employment, post-university?

Mr Willetts: The White Paper is absolutely committed to that, and there are many different ways of doing it. For example, we could do it by encouraging the revival of the sandwich course, or by ensuring that university courses were kitemarked as ones that employers valued. And yes, it might indeed be the case, as we have seen with KPMG, that employers wish to sponsor students at university. If there were no Exchequer costs involved, that could provide extra places, so there are lots of different ways we could achieve what my hon. Friend quite rightly wants.

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Point of Order

5.5 pm

Vernon Coaker (Gedling) (Lab): On a point of order, Mr Speaker. Yesterday, the case of Mr Raed Salah was raised in the House. Today, we have learned from the media that that man was banned from entering the UK on the ground of extremism. Apparently, however, he has just strolled through the border past border control, and we now learn from the papers that the Home Secretary has ordered the police to track him down and arrest him. Do you not think, Mr Speaker, that rather than briefing the papers on this matter, the Home Secretary should be briefing the House on what has happened and how this incompetence has arisen? She promised tougher border controls, but there is no evidence of that in this case. There is just chaos and confusion. Mr Speaker, have you the power to ask the Home Secretary to come to the House and explain exactly how a banned extremist has apparently just walked into this country with no one able or willing to stop him?

Mr Speaker: I thank the hon. Gentleman for his point of order. I am not aware of any intention on the part of the Home Secretary or other Ministers to make a statement to the House on that matter, but his point of order will have been heard by those on the Treasury Bench. Such a statement might of course be forthcoming, but, as the hon. Gentleman knows, there is a range of means by which the presence of Ministers can be secured. I hope that that is helpful to him and to the House.

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Bail (Amendment)

Motion for leave to bring in a Bill (Standing Order No. 23)

5.7 pm

Andrew Stephenson (Pendle) (Con): I beg to move,

That leave be given to bring in a Bill to confer upon the prosecution a right of appeal against judges’ decisions to grant bail; and for connected purposes.

The prosecution’s right of appeal in bail cases currently applies only to bail granted by a magistrates court. I present this Bill in response to the murder of my constituent, Jane Clough. Jane was murdered on 25 July last year by her ex-partner Jonathan Vass, who was out on bail at the time despite a series of charges having been brought against him. Jane Clough, a 25-year-old accident and emergency nurse, was murdered by Jonathan Vass in the car park of Blackpool Victoria hospital just before she was due to start her shift at work. On 14 October last year, Jonathan Vass was sentenced to a minimum of 30 years in jail, but the failure of the justice system before that trial is the reason that I am bringing forward the Bill today.

Jane’s murder occurred while Jonathan Vass was on bail following a series of charges for previous crimes that he had committed against Jane. He had been charged with nine counts of rape, and with four counts of common assault and sexual assault against her. By murdering Jane, Jonathan Vass ensured that the only witness to his crimes could not testify against him. Jane had displayed great bravery in going to the authorities to report the abuse that Jonathan Vass was subjecting her to while she was pregnant with their child. Like many victims of domestic violence, she put her faith in our legal system, but our legal system failed to protect her. Before granting Jonathan Vass bail, Judge Simon Newell was advised by the police and the Crown Prosecution Service that he should not grant bail due to the severity of the crimes with which Jonathan Vass had been charged. However, Judge Newell failed to provide Jane with the necessary protection from a man who posed a real danger to her.

In a statement made by the Judicial Communications Office following Jane’s murder, it was said that Judge Newell was acting within the bounds of the Bail Act 1976, working under the general assumption that bail should be granted in all cases except in specific circumstances. The statement went on to say that the judge was not told of any of Jane’s concerns and that no evidence was presented to make him aware that Jonathan Vass would go on to commit further crime, having been seen as a paramedic with previous good character—a statement that Jane’s parents and the Crown Prosecution Service would strongly contest.

The law needs to be changed to allow the prosecution a right of appeal, so that in such a case the CPS or the Attorney-General could have challenged Judge Newell’s verdict. We need to rebalance the legal standing of bail verdicts. At the moment, the system is unfairly weighted towards the defendant. Even if Jonathan Vass had been denied bail, he would have been able to appeal that decision almost indefinitely, whereas the prosecution currently has no right of appeal to judge-made bail decisions. Even if my right hon. and learned Friend the Attorney-General wanted to appeal the granting of bail to Jonathan Vass, he could not have done so.

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We can all see from the murder of Jane that the warnings given to the judge by the police and the CPS should have been heeded. Jonathan Vass’s history of offences towards Jane should have persuaded Judge Newell that he posed a serious threat to her, which would only escalate once she had reported him to the authorities. The bail conditions applied to Jonathan Vass provided Jane with little protection from any retaliation. In her diary, Jane wrote of her fear that Jonathan Vass would break bail and come for her and her daughter, that he would do something to hurt her and that nothing would stop him once he was released. While Jonathan Vass was free, Jane became a prisoner in her own home: the doors were always locked; she was afraid to go anywhere alone. Jane was scared for her own and her daughter’s safety from the moment she heard that Jonathan Vass had been released. Effectively, the wrong person had been locked up.

It is my opinion that the Bail Act 1976 should be amended to provide more protection for victims of crime such as Jane Clough. If Jonathan Vass had not been granted bail on the 13 charges against him, he would have been able to appeal the decision—a luxury not currently afforded to the prosecution. The amendment I propose would not only give the right of appeal to the prosecution, but give victims and their families more influence over the legal process.

I imagine that many of us here today know of many other legal proceedings where victims and families of victims have felt they had little knowledge or influence over what was being decided. We need to give victims of crime, and particularly of domestic violence, the reassurance that their voices will be heard and that their abusers will not be able to intimidate or hurt them.

The problem appears to be widespread in our legal system. The most recent figures I have been able to find were released in 2009 under the Freedom of Information Act and show that in excess of 30,000 crimes were committed by suspects who were on bail at the time. Most disturbingly, at least 27 murders were among those statistics. Although bail decisions will never be easy to make, surely those figures are a cause for alarm.

At the time that those figures were released, my right hon. and learned Friend was quoted in The Daily Telegraph, making the point that the legal system is set up in such a way that bail is too readily given and too weakly enforced. He went on to say that it was shocking that so many serious crimes were committed by people awaiting trial and that the Government must put public protection first. I hope that as Attorney-General he is still committed to that, as my Bill would empower him or the CPS to challenge bail decisions that are clearly wrong.

By allowing the prosecution to appeal against bail decisions, we will make sure that judges can be held accountable for the decisions they make. Even the best judge will not get every decision right and surely there should be a safeguard for when a decision is made that clearly looks ill-advised or incomprehensible. Making such a change would also protect the rights and freedoms of victims of crime and their families. As I previously mentioned, Jane became a prisoner in her own home. It strikes me as totally unacceptable that Jonathan Vass was allowed to roam free, while Jane lived under the constant shadow of her tormentor and rapist. I have received support from across the House from more than

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50 MPs who want to see this issue addressed. We must ensure that victims of crime are protected from further punishment.

The murder of Jane Clough has highlighted several issues in our legal system that need to be addressed. The case raises questions relating to the accountability of judges, the granting of bail, the treatment of victims of rape, and sentencing policy. I pay tribute to John and Penny Clough, who are in the Public Gallery today, to their friends and family, and to all who are working with them to ensure that there is justice for Jane. They have shown tremendous courage in fighting not just for their daughter but, as they would put it, for all the other Jane Cloughs out there.

I commend the Bill to the House.

Question put and agreed to.


That Andrew Stephenson, Esther McVey, Heather Wheeler, Robert Flello, Mrs Madeleine Moon, Bob Russell, Lorraine Fullbrook, Paul Maynard, Hugh Bayley, Tracey Crouch, Jackie Doyle Price and Lorely Burt present the Bill.

Andrew Stephenson accordingly presented the Bill.

Bill read the First time; to be read a Second time on 20 January 2012 and to be printed (Bill 210).

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Finance Bill

Consideration of Bill, as amended in the Committee and the Public Bill Committee

New Clause 1

Medical insurance (pensioner tax relief)

‘(1) This section applies where—

(a) on or after 6 April 2012 an individual makes a payment in respect of a premium under a contract of private medical insurance (whenever issued),

(b) the contract meets the requirement in subsection (2) below as to the person or persons insured,

(c) at the time the payment is made the contract is an eligible contract,

(d) the individual making the payment does not make it out of resources provided by another person for the purpose of enabling it to be made, and

(e) the individual making the payment is not entitled to claim any relief or deduction in respect of it under any other provision of the Tax Acts.

(2) The requirement mentioned in subsection (1)(b) above is that the contract insures—

(a) an individual who at the time the payment is made is aged 65 or over and resident in the United Kingdom,

(b) individuals each of whom at that time is aged 65 or over and resident in the United Kingdom, or

(c) two individuals who are married to each other at that time, at least one of whom is aged 65 or over at that time, and each of whom is resident in the United Kingdom at that time.

(3) If the payment is made by an individual who at the time it is made is resident in the United Kingdom (whether or not he is the individual or one of the individuals insured by the contract) it shall be deducted from or set off against his income for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (4) to (6) below apply.

(4) In such cases and subject to such conditions as the Commissioners of Her Majesty’s Revenue and Customs (“the Commissioners”) may specify in regulations, relief under subsection (3) above shall be given in accordance with subsections (5) and (6) below.

(5) An individual who is entitled to such relief in respect of a payment may deduct and retain out of it an amount equal to income tax on it at the basic rate for the year of assessment in which it is made.

(6) The person to whom the payment is made—

(a) shall accept the amount paid after deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made, and

(b) may, on making a claim, recover from the Commissioners an amount equal to the amount deducted.

(7) The Treasury may make regulations providing that in circumstances prescribed in the regulations—

(a) an individual who has made a payment in respect of a premium under a contract of private medical insurance shall cease to be and be treated as not having been entitled to relief under subsection (3) above; and

(b) he or the person to whom the payment was made (depending on the terms of the regulations) shall account to the Commissioners for tax from which relief has been given on the basis that the individual was so entitled.

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(8) Regulations under subsection (7) above may include provision adapting or modifying the effect of any enactment relating to income tax in order to secure the performance of any obligation imposed under paragraph (b) of that subsection.

(9) In this section references to a premium, in relation to a contract of insurance, are to any amount payable under the contract to the insurer.’.—(Sir Paul Beresford.)

Brought up, and read the First time.

5.16 pm

Sir Paul Beresford (Mole Valley) (Con): I beg to move, That the clause be read a Second time.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:

New clause 2—Eligible medical insurance contracts

‘(1) This section has effect to determine whether a contract is at a particular time (the relevant time) an eligible contract for the purposes of section [Medical insurance (pensioner tax relief)].

(2) A contract is an eligible contract at the relevant time if—

(a) it was entered into by an insurer who at the time it was entered into was a qualifying insurer and was approved by the Commissioners for the purposes of this section,

(b) the period of insurance under the contract does not exceed one year (commencing with the date it was entered into),

(c) the contract is not connected with any other contract at the relevant time and has not been connected with any other contract at any time since it was entered into,

(d) no benefit has been provided by virtue of the contract other than an approved benefit, and

(e) the contract meets one or more of the three conditions set out below.

(3) The first condition is that the contract is certified by the Commissioners under section [Certification of contracts] at the relevant time.

(4) The second condition is that, at the time the contract was entered into, it conformed with a standard form certified by the Commissioners as a standard form of eligible contract.

(5) The third condition is that, at the time the contract was entered into, it conformed with a form varying from a standard form so certified in no other respect than by making additions—

(a) which were (at the time the contract was entered into) certified by the Commissioners as compatible with an eligible contract when made to standard form, and

(b) which (at that time) satisfied any conditions subject to which the additions were so certified.

(6) Where a contract is varied, and the relevant time falls after the time the variation takes effect, subsections (1) to (5) above shall have effect as if “entered into” read “varied” in each place where it occurs in subsections (4) and (5) above.

(7) For the purposes of this section a contract is connected with another contract at any time if—

(a) they are simultaneously in force at that time,

(b) either of them was entered into with reference to the other, or with a view to enabling the other to be entered into on particular terms, or with a view to facilitating the other being entered into on particular terms, and

(c) the terms on which either of them was entered into would have been significantly less favourable to the insured if the other had not been entered into.

(8) For the purposes of this section each of the following is a qualifying insurer—

(a) an insurer lawfully carrying on in the United Kingdom business relating to insurance;

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(b) an insurer not carrying on business in the United Kingdom but carrying on business in another member State and being either a national of a member State or a company or partnership formed under the law of any part of the United Kingdom or another member State and having its registered office, central administration or principal place of business in a member State.

(9) For the purposes of this section a benefit is an approved benefit if it is provided in pursuance of a right of a description mentioned in section [Certification of contracts] (3)(a).’.

New clause 3—Certification of contracts

‘(1) The Commissioners shall certify a contract under this section if it satisfies the conditions set out in subsection (3) below; and the certification shall be expressed to take effect from the time the conditions are satisfied, and shall take effect accordingly.

(2) The Commissioners shall revoke a certification of a contract under this section if it comes to their notice that the contract has ceased to satisfy the conditions set out in subsection (3) below; and the revocation shall be expressed to take effect from the time the conditions ceased to be satisfied, and shall take effect accordingly.

(3) The conditions referred to above are that—

(a) the contract either provides indemnity in respect of all or any of the costs of all or any of the treatments, medical services and other matters for the time being specified in regulations made by the Treasury, or in addition to providing indemnity of that description provides cash benefits falling within rules for the time being so specified,

(b) the contract does not confer any right other than such a right as is mentioned in paragraph (a) above or is for the time being specified in regulations made by the Treasury,

(c) the premium under the contract is in the Commissioners’ opinion reasonable, and

(d) the contract satisfies such other requirements as are for the time being specified in regulations made by the Treasury.

(4) The certification of a contract by the Commissioners under this section shall cease to have effect if the contract is varied; but this is without prejudice to the application of the preceding provisions of this section to the contract as varied.

(5) Where the Commissioners refuse to certify a contract under this section, or they revoke a certification, an appeal may be made to the relevant Tribunal by—

(a) the insurer, or

(b) any person who (if the policy were certified) would be entitled to relief under section 1 above.

(6) Where a contract is certified under this section, or a certification is revoked or otherwise ceases to have effect, any adjustments resulting from the certification or from its revocation or ceasing to have effect shall be made.

(7) Subsection (6) above applies where a certification or revocation takes place on appeal as it applies in the case of any other certification or revocation.

(8) In this section the reference to a premium, in relation to a contract of insurance, is to any amount payable under the contract to the insurer.’.

New clause 4—Medical insurance: supplementary

‘(1) The Commissioners may by regulations—

(a) provide that a claim under section [Medical insurance (pensioner tax relief)] (3) or (6)(b) shall be made in such form and manner, shall be made at such time, and shall be accompanied by such documents, as may be prescribed;

(b) make provision, in relation to payments in respect of which a person is entitled to relief under section [Medical insurance (pensioner tax relief)], for the

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giving by insurers in such circumstances as may be prescribed of certificates of payment in such form as may be prescribed to such persons as may be prescribed;

(c) provide that a person who provides (or has at any time provided) insurance under contracts of private medical insurance shall comply with any notice which is served on him by the Commissioners and which requires him within a prescribed period to make available for the Commissioners inspection documents (of a prescribed kind) relating to such contracts;

(d) provide that persons of such a description as may be prescribed shall, within a prescribed period of being required to do so by the Commissioners, furnish to the Commissioners information (of a prescribed kind) about contracts of private medical insurance;

(e) make provision with respect to the approval of insurers for the purposes of section [Eligible medical insurance contracts] and the withdrawal of approval for the purposes of that section;

(f) make provision for and with respect to appeals against decisions of the Commissioners with respect to the giving or withdrawal of approval of insurers for the purposes of section [Eligible medical insurance contracts];

(g) make provision with resepect to the certification by the Commissioners of standard forms of eligible contract and variations from standard forms of eligible contract certified by them;

(h) make provision for and with respect to appeals against decisions of the Commissioners with respect to the certification of standard forms of eligible contract or variations from standard forms of eligible contract certified by them;

(i) provide that certification, or the revocation of a certification, under section [Certification of contracts] shall be carried out in such form and manner as may be prescribed;

(j) make provision with respect to appeals against decisions of the Commissioners with respect to certification or the revocation of certification under section [Certification of contracts];

(k) make provision generally as to administration in connection with sections [Medical insurance (pensioner tax relief)] to [Certification of contracts].

(2) In subsection (1) above—

“eligible contract” has the meaning given by section [Eligible medical insurance contracts], and

“prescribed” means prescribed by or, in relation to form, under the regulations.’.

Sir Paul Beresford: The new clauses would provide tax relief on medical insurance premiums for people above a certain age. “Pensioners” might be a better description of them. As a very part-time dentist, I must declare a potential interest, but I had better declare a further potential interest, as birthdays keep relentlessly coming upon me—and the rest of us.

As in much of the south-east, life expectancy in Surrey is somewhat higher than the England mean. The average life expectancy in England is about 78 for males and 82 for females, while in Surrey the figures are about 82 and 86 respectively. Moreover, the proportion of those aged 65 and over in my constituency is about one in five, or 20%. It is obvious to me, as one with a professional interest in health and as an observer of my constituents’ health, that that longevity brings with it a higher demand for health care and imposes large demands on health services, especially cardiac, carcinoma and orthopaedic services. A planeload of Surrey Saga tourists would really set the airport metal detectors buzzing as the hip and knee replacements proceeded towards take-off.

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The Mole Valley constituency is served by three good national health service hospitals: East Surrey hospital, Royal Surrey County hospital at Guildford, and Epsom hospital. Those hospitals have expanded in certain health areas to meet the increasing demand for treatment from the elderly, the best example being Epsom, which has a special orthopaedic unit where more than 3,000 hip and knee replacement operations are carried out annually, almost entirely on elderly people from surrounding areas such as Mole Valley. As a result of those medical problems there has been a call for an enhanced and enlarged cardiac unit at Epsom as part of the retention and refurbishment of that much-loved hospital. I have given those two examples to illustrate the increasing demand for national health service care from, predominantly, those aged over 65. That increasing demand is not specific to Mole Valley or even Surrey, but is, to a greater or lesser degree, nationwide among that age group.

My older constituents are also served by private hospital services. Some are relatively local and some are in London, but there is choice for patients. Approximately 12.5% of the United Kingdom population are currently covered by private health insurance, and about 70% of that cover is corporate while about 30% is individual. On retirement, many may wish to take over their corporate private health insurance, but the personal cost becomes a heavy factor. Additionally, many of those who fund their health insurance personally may not feel able to do so when a regular personal income is just a pension or savings. That means that, just as their need for health care is likely to increase, those individuals turn to the national health service and absorb facilities and costs that they would not use if they could be persuaded to retain or take out private health insurance and use the private sector.

Before March 1997, when tax relief was available to those over 60, it was estimated that tax relief was paid in respect of 400,000 contracts to cover about 600,000 individuals.

Mr Edward Leigh (Gainsborough) (Con): I warmly congratulate my hon. Friend on his new clause. Is he aware that a ComRes poll of 150 Members of Parliament found that 66% of Conservative MPs supported the return of tax relief on private insurance for pensioners? That is hardly surprising when even the Major Government gave that elementary service to our elderly people.

Sir Paul Beresford: I thank my hon. Friend. One of the delightful things about his intervention is the increase in my education.

Over seven years from 1990, tax relief for the over-60s cost £560 million. However, that included a period when the relief was across all taxpayer rates. In 1994, that was reduced to apply to the basic rate of tax only. Unlike in my proposal, the relief started then at 60, not at 65, so my proposal would reduce the cost to the Revenue in real terms compared to pre-1997.

In 1997 the Labour Government cancelled the tax relief for pensioners, and Western Provident Association estimated that 40% of pensioners would discontinue their private health service. Which? magazine reported in 2002 that private health insurance coverage was lowest in the 65-plus age group. Those who choose to have personally funded private health insurance pay

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twice for their health—premiums and tax. It would be safe to assume that nigh on 100% of those aged 65 and above are personally funding their health insurance. It is their choice, and for many it may mean sacrificing other choices that may affect their lifestyle.

Mr John Redwood (Wokingham) (Con): Can my hon. Friend also give us some idea of the saving in NHS expenses that results from people taking out cover and going privately?

Sir Paul Beresford: I would love to, but I am numerically dyslexic and English is my second language so I have some difficulty. I am sure that the next time I raise this possibility, I can bring those facts forward.

Oliver Heald (North East Hertfordshire) (Con): I am grateful to my hon. Friend for giving way and proud to support the new clause. Does he agree that there is real concern about the cost to the NHS as estimates of longevity rise, and that his measure is likely to carve out a portion of that and protect the position for the over-65s, who will be an ever larger group?

Sir Paul Beresford: I agree with my hon. Friend. Not only that, it would allow spaces for the NHS to provide choice and opportunity.

The new clauses would allow basic tax relief at 65-plus and rising, and the age would rise as the pensionable age increased. It would encourage people either to keep or take out health insurance just as they reached the period of life in which demand can be expected to increase. If they do not have or cease to have insurance, they will add to the call on the NHS. This approach in no way degrades my or, indeed, their respect for the NHS, but it is intended to take some of the load of numbers and cost off our tax-paid national health service.

As UK life expectancy increases, as my hon. Friend the Member for North East Hertfordshire (Oliver Heald) just mentioned, and as the wonders of medical research improve, our pensioners’ life expectancy and well-being will increase. That will be an incentive for more to choose not only to pay their taxes—thus supporting the NHS—but to use health insurance to take an increasing load off our NHS, to the benefit of others.

Mr Kevan Jones (North Durham) (Lab): I rise to oppose the new clauses. I have to say that it is pleasing to see the real Conservative party still alive and kicking on the Back Benches, wanting to create a privilege for a small section of the population. I understand that when tax relief was in operation, it affected only about 5% of the population. It feels as if we are going back in time a little, because if we accepted the new clause we would be stepping back to the late 1980s, when the Conservative party introduced relief on private health insurance—I acknowledge that the new clause would apply to the over-65s, rather than to the over-60s, as was the case then. That was introduced to address a lot of the arguments put by the hon. Member for Mole Valley (Sir Paul Beresford); the aim was to try to ensure that people would be given choice. I hasten to add that people have a choice if they can afford it, but they have no choice whatsoever if they cannot. I believe, as I understand the Conservative Front-Bench team does

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these days, that we should seek to improve the health service and opportunities for all, rather than give a tax cut and perk to a very small section of the population.

Mr Leigh: Surely the point is that the proposal applies to pensioners, that they have paid tax all their life and that, just at an age when they might need private medical care, they find that their insurance premiums rocket. Surely it is only elementary natural justice that they should get tax relief on those insurance premiums.

Mr Jones: I disagree with the hon. Gentleman. I do not understand why a low-paid worker in South Stanley in my constituency who has worked hard all his or her life should be given no tax relief or assistance and should pay their taxes just to give a tax relief and perk to individuals who not only might be able to pay for care, but who have an advantage over them. We should seek to ensure equal access to health care.

I understand what has been said about waiting lists and the health service, but when I was elected in 2001 my constituency contained two old hospitals, one of which—the old workhouse—was a disgrace. We now have two new hospitals, thanks to a Labour Government. The hon. Member for Mole Valley mentioned hip and knee replacements, and I can tell him that the industrial legacy of a mining community meant that my area had a long waiting list; it was not uncommon for people to wait for more than two years. I recall people coming to my surgery arguing about how they could get up the list any faster. Waiting lists have more or less been abolished over the intervening 10-year period, which is testament to the changes the previous Labour Government made and the investment we put in. Investment in the health service should be about ensuring equal access to care, not about giving a tax perk to a very small section of the population—the less than 5% who actually have private health insurance—as this proposal seeks to do.

Mr Redwood: I would be more persuaded by this argument if the Labour party had, when in office, prevented the rich from buying the health care they wanted when they wanted it. The truth is that neither the Labour party in office, nor the coalition Government, have had any intention of preventing the rich from using their power and wealth to get the health care they want. The new clause is a measure to enable people who are not that rich to be able to do so.

Mr Jones: The facts do not bear that out, and I shall return to that point in a moment. If people wish to spend their money on health care, that is entirely up to them—I am not opposed to that. What I am saying is that I and others should not be subsidising that choice. We should be putting the money, as the Labour Government did, into ensuring that the general population have access to good-quality NHS care and do not have to worry about the cost.

Mr Peter Bone (Wellingborough) (Con): The hon. Gentleman is making a powerful socialist speech, which is nice to hear in this Chamber. Is he not wrong about the new clause, however, because we would not be subsiding from the taxpayer? Anyone who takes out new private medical insurance because of the subsidy would be saving money for the NHS and so more money could be spent on the people who wish to use the NHS? [Interruption.]

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Mr Jones: Not necessarily, as my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) says from a sedentary position. As I have seen in my constituency, people who have access to the private sector cherry-pick. Routine operations might be covered by private health insurance but with the more difficult, specialist treatments, the last recourse is often the NHS. A few years ago, a constituent of mine came to my surgery and complained that she could not get her knee replaced on the NHS. I found that remarkable, because by that stage the waiting lists were reduced in my constituency, until I found out from the NHS trust that there were medical reasons why she could not have that operation at that time—basically, she had weight and heart problems. She subsequently had the operation in the private sector, against all the advice, and lo and behold, when there were complications they were picked up not by the private sector but by the NHS. A full NHS care package and local social services were needed to support that woman through an operation that she was determined to have against medical advice.

5.30 pm

The proportion of people with medical insurance is skewed towards the top earners who, the evidence shows, would benefit from today’s proposed change. The old scheme went to people who already had private medical insurance and was basically a tax cut for those individuals; by the time it was abolished in 1997, it had cost the taxpayer some £140 million a year. It did little to increase the take-up among individuals who accessed private health care.

A study carried out in 2001 by the Institute for Fiscal Studies and the King’s Fund showed that the argument that such provision would reduce pressure on the NHS was not realised. Likewise, when the relief was withdrawn, providers of private health insurance argued that up to 100,000 people would suddenly give it up and there would be a huge toll on the NHS, but that did not happen. The study estimated that 0.7% of those involved—some 4,000 people—gave up their private medical insurance because they did not have access to tax relief. That goes against the argument that rewarding people who already benefit through such tax relief is a way of saving money for the NHS.

On the question of saving money for the NHS, 4,000 people is not a huge number and the evidence points out that the saving from the withdrawal of tax relief more than outweighed the cost of the small increase in the number of people who had to rely on the NHS. I accept the Conservative party is arguing for choice, and if people want access to private health insurance, they are entitled to it, but the rest of the population should not subsidise it, which is what is being argued for. Some of the figures put out by various organisations suggested that if the relief were taken away, there would somehow be a deluge of pressure on the NHS. For example, the Western Provident Association estimated that the cost to the NHS could be as much as £300 million a year, whereas Bupa estimated that the number of NHS hospital treatments would increase by 48,000. That did not happen.

Likewise, if we are trying to encourage people to take out private health insurance, we should remember that although that is how it was sold by the last Conservative Government, it did not happen then either. The number

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of people who took out additional insurance rose by only a couple of hundred thousand, because most of the people who have access to that type of health insurance, either because they choose to take it out or through their employment contract, are, I stress, in the top 40% of earners. It is interesting to note that less than 5% of the low-earning population has some kind of access to such insurance, mainly through the old friendly societies and others. It is not a choice for most of the population; it is a choice for a small number of people. Having tried this measure in the 1980s, the Conservatives should not go back to it and should not think it would be of assistance to the NHS.

Given that we are told by the Conservative party that money is tight, is this a sensible way of spending scarce resources? The measure would cost about £440 million a year and I would sooner that those scarce resources went into the NHS, which benefits everyone in the general population. I do not think that the idea will fly even on the Government Front Benches. As I said in my opening, it is nice to see, in relation to this and the other amendments in this group proposed by Conservative Back Benchers, that the true face of conservatism is not dead in this place.

Mr Christopher Chope (Christchurch) (Con): I am delighted to be regarded as the true face of the Conservative party, but I am also very pleased that there are lots of other true faces of the Conservative party present to listen to this debate. Not everyone recalls the great excitement that there was in the Conservative party and on the Conservative Benches back in 1989 when the then Secretary of State for Health, who is now the Justice Secretary, said that he was going to introduce tax relief for health insurance premiums. That policy, which was announced in a health White Paper and then put into practice in the 1990 Budget by Nigel Lawson, was the action of a self-confident Conservative Government. That same self-confidence carried on through the years when John Major was Prime Minister, and right up to 2001, when a proposal to restore the relief, which had been taken away by the mean Labour Government, was in our manifesto. Since then, we seem to have rather lost our way.

Mr Kevan Jones: I would never accuse the hon. Gentleman of losing his way, but can he remember why the Labour Government did that? It was not just because the relief was unfair but because they went on to use part of the money to reduce the VAT on heating fuel.

Mr Chope: That was the excuse put forward at the time, but I doubt whether it was the real justification. I suspect that the real justification was a feeling on the part of a lot of socialists—people on the Labour side of the House—who resented the idea that the health service should in any way be funded by the private sector. The problem we have in this country is that although our health service is funded by taxpayer money to the extent of most health services across the G7 or G8 countries, we lag behind those other countries in that we do not have enough private sector contributions to the health service. That is why the new clause tabled by my hon. Friend the Member for Mole Valley (Sir Paul Beresford) is brilliant, because it sends out a very strong signal to people that we want to encourage them to participate in and contribute to the cost of their health care.

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It is good for people to contribute to the cost of their health care, and that of their family, if they can afford so to do. Some people who can afford to do that pay for their health care outright: in a sense, they pay as they go. Others who can afford to do that pay through insurance policies. Yet others who can afford to do that do not make a contribution at all, because they believe that it is in the national interest that the whole cost of their health care should be borne by other taxpayers, many of whom are less well-off than they are. Those are the three categories, and we should try to move more people from the category of those who could afford to pay for, or contribute towards, their health care but do not, into the category of those who do contribute.

Mr Jones: I totally disagree with the hon. Gentleman, but I understand where he is coming from. However, the scheme introduced in the 1980s did not do what he wants. It basically just gave a tax cut to about 500,000 people who already had private plans, so it did not work the last time it was tried.

Mr Chope: Obviously, the Treasury will always say that there is what is described as a dead-weight cost associated with such initiatives, in that people who would be paying for health insurance anyway would get the tax relief—but that is looking at only part of the issue. What I am trying to do—as is my hon. Friend the Member for Mole Valley in his new clause—is to encourage more people to come into that category, so that we grow that cohort of people. We certainly do not want to allow that cohort to be reduced, as it inevitably is when people who were on schemes provided by their employers retire and lose that provision. Taking on that burden, or responsibility, for themselves is a significant expense; my hon. Friend’s new clause would not eliminate that cost, but it would reduce it by a useful amount.

Julian Smith (Skipton and Ripon) (Con): Will my hon. Friend tell us how, in the current financial situation, we could pay for any dead-weight costs? Where would the money come from?

Mr Chope: It is a matter of seeing what the countervailing benefits would be, because obviously, if as a result of my hon. Friend’s new clause a lot more people who are not contributing anything towards the cost of their health care started to do so, thereby reducing the burden on the NHS, the dead-weight cost that my hon. Friend the Member for Skipton and Ripon (Julian Smith) mentions would be exceeded by the overall benefits, and a reduction in the overall burden of taxation. More people who are getting health care in this country would be paying for it, or contributing to its cost, rather than relying on the state and the taxpayer to do so.

Mr Leigh: The dead-weight cost argument is always used against ideas such as school vouchers or tax relief for health insurance, but does my hon. Friend agree that the whole point of such proposals is to help the people in the middle? Quite rightly, Parliament is concerned about the people at the bottom of the heap, and the rich can always buy their way out, but this part of the Conservative party should help the people who struggle all their lives, and pay tax all their lives.

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Mr Chope: Exactly. My hon. Friend is absolutely right. There is a lot of resentment about the fact that people who arrive in this country can latch on to the health service, at no cost to themselves, when they have not made any contribution at all. The new clause would give people who have been making a contribution, either through their employers or by paying insurance premiums themselves, a bit of help in the form of tax relief when they retire. We are talking about modest sums, but that would send a useful message and be an incentive.

Mr Kevan Jones: If we were designing a system to increase the number of people with private health insurance, would not this proposal be a very inefficient way of doing it? I must draw the hon. Gentleman’s attention to the Institute for Fiscal Studies and King’s Fund report, which showed that when the scheme was abolished, 0.7% of people—4,000 people—gave up their policy. It strikes me that for most people, the scheme was a not a great incentive to buy health insurance.

Mr Chope: The hon. Gentleman quotes figures from the Institute for Fiscal Studies that go back, I think, to 2001—10 years ago. What concerns me is that there has been no update of those figures. If my hon. Friend the Financial Secretary to the Treasury, whom I am delighted to see on the Front Bench, comes forward with up-to-date statistics that show that the Government have been considering the issue seriously, obviously I will listen to his arguments, as I always do.

I am concerned that the issue has become one that the coalition Government do not want to discuss, and they are not prepared to commission research into it. They are not prepared to consider the argument put forward by my hon. Friends and myself that our proposal would generate more private sources of income for the health service. The Government are going for the simplistic version and concentrating on the idea that there would be an up-front dead-weight cost. There might be, but that would be outweighed by the other benefits.

5.45 pm

Barry Gardiner (Brent North) (Lab): Can the hon. Gentleman explain why the individual making the payment should not make it out of resources provided by another person for the purpose of enabling it to be made? If he can explain that, does he not believe that it would require a desperately intrusive large state to undertake investigations to ensure that the provisions in the new clause were adhered to?

Mr Chope: The new clauses being considered together are a word-for-word recital of the original legislation. The hon. Gentleman may have some good points, but I hope that those will not be taken by the Minister, because they would be points against the measures that followed the 1990 Budget.

Barry Gardiner: I am grateful to the hon. Gentleman for giving way again. I am simply trying to establish the extent of Government intrusion that would be required in order to enforce the clauses that he supports. The Government would have to intervene and find out whether the funds being made available for the premium had been supplied by a third party—perhaps children who wanted to help their ageing parents. How would the restriction be enforced?

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Mr Chope: In the same way as it was enforced before, as my hon. Friend the Member for Mole Valley says. As the insurance companies will be the beneficiaries, in a sense, because more business will be created for them, the provisions of the new clauses require those insurance companies, in effect, to participate in a regulatory regime supervised by the Treasury. That is the reasonable safeguard that we had before, and it would be a reasonable safeguard in the future. I am delighted if the hon. Gentleman’s only objection to the new clause is that whingeing technical objection, because that must mean that he is in favour of the substance of it.

Charlie Elphicke (Dover) (Con): Perhaps my hon. Friend can help me. I am puzzled that Labour Members oppose the new clause as creeping privatisation, because when they were in office they privatised large sections of the NHS, with the independent sector treatment centre programme. I do not see how those two views sit together.

Mr Chope: As so often, my hon. Friend makes a telling point, which has got Opposition Members back on their haunches as a result of that good intervention.

Let us look at the total contribution made to health spending in this country by the private sector. The hon. Member for North Durham (Mr Jones) quoted from the Institute for Fiscal Studies report that came out in 2001. It said:

“Despite the increase in use of the private sector, private spending on health care makes up only 16.3 per cent of total health spending in the UK, which is lower than in any other G7 country.”

It goes on to describe how low health spending was as a percentage of gross domestic product. I concede, and am pleased, that since then health spending as a percentage of GDP has increased, but the percentage of private contributions to health care has not increased commensurately, as it should have done.

Thomas Docherty (Dunfermline and West Fife) (Lab): That has been used as an argument against privatising the national health service, because the reason why the United States spends such a high proportion of its GDP on health care is that there is a completely free market there. The hon. Gentleman is actually making an argument for the national health service.

Mr Chope: I certainly support the national health service, but I do not think that the hon. Gentleman understands my point. My point is that even in very socialistic countries, such as Sweden, the other Scandinavian countries and others in Europe—quite apart from the United States—the proportion of total health spending that comes from the private sector is much higher than it is in this country. I think that it would be much better if a higher proportion of our total health spending came from the private sector and from individuals and companies.

Mr Bone: My hon. Friend is, as ever, making a powerful speech. Will he explain why some people think that not having private money gives us a better health service? Our European colleagues have better outcomes when they have more private money.

Mr Chope: My hon. Friend makes a good point. I think, and some of the research suggests, that when people contribute directly to the cost of their health

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care they take a greater interest in outcomes and hold the health service to account to a greater extent than when they can be told, “It’s all free, so what do you expect?” We talk about the health service being free at the point of delivery, which of course it is, but I want a health service that is available at the point of need, and the two things are very different. That is the gap that exists at the moment. A little more private sector resource, which would relieve some of the burden on the taxpayer or complement taxpayer resources, would be a good thing.

Mr Kevan Jones: Where is the evidence for that? The old scheme that the hon. Gentleman says was so great clearly did not do that, for example in relation to waiting lists. It would cost £140 million, and it would be far better if that money went into the health service to improve care for all, rather than to the small section of society that he is trying to benefit.

Mr Chope: Of course, the original scheme was brought in on the basis that it would apply to everyone over the age of 60, and initially would give full tax relief to higher-rate taxpayers, so the figures would be nothing like as high under the new clause, because its proposals would apply only to people over 65, and would give only 20% in tax relief.

Mr Leigh: Is my hon. Friend not being very moderate? Surely there is an argument for giving everyone tax relief, which is how we would move to a continental-type system with much better health outcomes, and blur the boundaries between the private and public sectors. That is what we, as Conservatives, should believe in.

Mr Chope: I absolutely agree, but I think that my hon. Friend the Member for Mole Valley, who tabled the new clauses, is a gradualist by nature; that goes back to his time as leader of Wandsworth council, when he was preparing for his time in Parliament and knew that things could not be done immediately but must be done gradually. He can speak for himself when he contributes to the debate, but perhaps that gradualism is part of his thinking.

I will finish soon, because many Members wish to contribute, but let us first put this suggestion in perspective by thinking about roughly how much it would cost. Let us suppose that an average health premium is about £2,000, which a pensioner or pensioner family would be faced with paying, and which previously their employer had paid as part of a contributory or non-contributory occupational scheme. Many pensioners would not pay that, but if we gave them the tax relief, which would amount to more than £400, I submit that many of them would carry on paying for their insurance, thereby contributing towards the cost of the health service, which would be a benefit.

The last time I spoke in a debate on a Finance Bill on Report it was about insurance premium tax. The insurance premiums paid for health insurance are already subject to tax, which the Treasury keeps increasing, so an alternative way forward might be to abolish the insurance premium tax paid on health insurance contributions. That is a separate argument and not the subject of this group of new clauses, but it serves as an example. The Financial Secretary to the Treasury would obviously

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say that we could not afford that—but does he realise that if we increased the number of people taking out health insurance, the Treasury would receive a lot more in insurance premium tax? I am sure that he will take that into account when he—in due course, having done the proper research—tells us the costs and benefits of the proposals in the new clauses.

We should not forget that the dynamic effect of these taxation changes could deliver great benefits and dividends. It is important to send a strong message to those who can afford to contribute towards their health care costs but who currently do not do so, that this would enable them to contribute at a lower cost than would otherwise be the case. I think that it is a well-rounded and sensible proposal, and I am delighted that it is getting so much support from colleagues on the Government side of the House.

Frank Dobson (Holborn and St Pancras) (Lab): I am sure that people across the country would be astonished to discover that the first priority of Back-Bench Tories on health spending is to give a tax concession to people who pay, on average, £2,000 a year towards health insurance, because most people over 65 are in no position to pay such a sum towards health insurance. Most people across the country, including many pensioners, and perhaps even those pensioners who have private health insurance, think that the first priority for spending should be to avoid some of the cuts that the Government are already introducing and to direct spending to the national health service.

Mr Redwood: I just want to correct the record, because our first priority was to have a wider range of drugs to treat cancer, as we thought that the previous system was too meanly constructed, and we were proud of the Government when they made that the No. 1 priority for extra spending.

Frank Dobson: But that decision has been and gone, and I do not think there was any opposition to it across the House, but we are now talking about the Bill. The Government now propose that the first priority should be to spend the best part of £200 million to give a subsidy to people who are already sufficiently well off that they can pay £2,000 on average towards their private health care costs. I do not think that that is a sensible priority for anyone concerned about health care. I hope that no Tory Members, or Lib Dem Members if they support this proposal, will parade outside their local hospitals saying, “Please don’t get rid of 200 nurses, or some of the doctors, or our ambulance and emergency service, and please don’t take away our maternity unit.” That will be because some of their colleagues thought that the first priority was to spend £200 million on people who are considerably better off than the average.

Government Members have said that the rich can afford to buy private health care and that most rich pensioners already have it. Some extreme marketeer right-wingers both here and in the United States think that health insurance should be abolished because, if people have to pay for health care costs out of their income or savings, they will be a source of pressure to bring down those costs, but Government Back Benchers have not reached that extreme marketisation approach yet.

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6 pm

Mr Bone: The right hon. Gentleman is being very generous in giving way, and I should say something nice about his speech, but I cannot think of anything. This Government’s first priority on health, however, was to make sure that we increased health spending at more than the rate of inflation. It was something that his party would not guarantee.

Frank Dobson: Let us turn to a bit of history. When the previous scheme was introduced, neither the Department of Health nor the Treasury made any calculation whatever of what it would cost the taxpayer. It was a decision flying blind—[ Interruption. ] I notice the Financial Secretary looking to the Box, but if those in the Box give him an honest answer, he will have to confirm that the Treasury made no calculation of the cost of introducing the scheme originally and neither did the Department of Health. When I had the scheme abolished, I found it very difficult to discover how much it had cost. It took the Treasury quite a bit of time, too, because it had not logged the effect of the scheme—which it introduced.

The proposition is that, if people have private health insurance, they will not place any demands on the national health service. First, however, they would get the tax concession most of the time, but, during the years—one would hope that there were many of them—when they did not need any health care at all from anybody, they would not be relieving demand on the national health service because they would not have any demand to supply.

Secondly, as my hon. Friend the Member for North Durham (Mr Jones) has already pointed out, large numbers of people—certainly if they have a difficult or complex operation—do not resort to their private health insurance, because private providers are not up to providing them with the quality of care that is needed, so they resort to the national health service.

I remember a proposal to build a private hospital on the Odeon site on Tottenham Court road, and the brochure that the projectors of this brilliant scheme provided had a paragraph that can be summarised as stating, “It doesn’t matter if anything goes wrong in our private hospital, because you’ll be next door to the world-famous University College hospital, so you’ll be transferred there and then you’ll be okay.” Almost all intensive care is provided in the national health service; private sector providers do not generally provide it, so when things go wrong people are shifted.

Mr Kevan Jones: Does my right hon. Friend agree that, if we wanted to move to the market-led initiative that some Government Back Benchers have put forward, we would find that private hospitals had to train all the nurses and doctors whom they currently get through state-subsidy and training in the NHS?

Frank Dobson: The private sector creams off the straightforward, relatively simple and less risky operations for people who are otherwise healthy, leaving the national health service to provide similar operations for people who are unhealthy, which can be much more complex. For instance, if someone needs their hip joint replaced, and they are okay apart from their bad hip, that is fairly straightforward, but, if they have a dickey heart or something wrong with a kidney, it is altogether more

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complex, and you can bet your boots that that operation will take place in an NHS hospital. Similarly, an NHS hospital will provide intensive care, accident and emergency care and emergency beds, and it will carry out the training that by and large the private sector does not.

All those burdens stay with the NHS, none of it transfers to the private sector, and we are being asked to provide a tax incentive for people to do something that they do already. There was no evidence in the 1990s of any increase in the use of private health insurance as a result of the Government’s tax benefit.

Charlie Elphicke: The right hon. Gentleman is being extraordinarily generous in taking interventions, and he has a long-held principled position on the national health service. On the private sector creaming off, as he would say, the easy cases, does he agree that, first, he would not have acceded to the independent sector treatment centres programme and, secondly, that it was wrong for the private sector in that case to charge for operations which were not carried out?

Frank Dobson: When I was Health Secretary, I agreed to the establishment of national health service units that undertook diagnostic and straightforward treatment on straightforward conditions. I thought that it was a sensible idea, but unfortunately my successors decided to privatise it, and it has to be said that then, John, now Lord, Hutton was not good at getting bargains for the taxpayer. He agreed a scheme whereby on average the private sector was paid 11% more per operation than the national health service, and the private providers were also paid when they did not do all the operations that they were contracted to do. Some got 11% more for operations that were not actually carried out, so I am no fan of such arrangements, but, having opposed them right from the start, I do not recall any cries of “Hosanna!” from the Tory party when I attacked the proposition. My memory may be false, but the Tories seemed to be wild enthusiasts for that ridiculous scheme.

Noticeably, however, unlike putting money into the private sector or, in the case before us, a bit more money into the hands of pensioners who have quite a bit to start off with, investing in the national health service had a dramatic effect. When we took office, national health service hospitals performed 5.7 million operations a year; in the most recent year for which figures are available, they performed 9.6 million. If we want to look after the interests of people who get sick, we will find that the way to do so is to ensure that everyone has access to a massive increase in the number and quality of operations, and there has been a massive increase in both.

Barry Gardiner: When considering the situation in 1990, does my right hon. Friend recall that part of the rationale for those people having private health care was that the queues in the health service were so long that it was effectively a way of getting the same care and the same consultant but doing so in the private sector much faster? Does he share my fear that the reason why the proposal is being made now is that Tory Back Benchers know that waiting lists are already going up and will go up still further, so they want to give their friends exactly the same opportunity?

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Frank Dobson: Yes, my hon. Friend is quite right. Government Members are obviously anticipating the expected decline in national health service output, and that decline is the reason why the national health service is going to stop collecting figures on waiting lists and waiting times. One is always rather suspicious of any organisation that collects figures and then stops. One wonders why, and the idea that those figures might be embarrassing is a good explanation.

Andrew Gwynne (Denton and Reddish) (Lab): My right hon. Friend is coming on to precisely the point that I want to make. This week, my local hospital, Tameside general hospital, announced 200 job losses among front-line staff, and its waiting times have shot through the roof. Is not this the real picture of what is happening in the national health service? If money is available, should we not be prioritising care in hospitals such as Tameside, not giving a tax hand-out to people for medical insurance?

Frank Dobson: I agree with my hon. Friend. I am sure that he will draw this proposition to the attention of the electors of Tameside, who are facing valuable staff being got rid of and reductions in the number of operations being carried out. I hope that he will also point out, as I did at the beginning of my short contribution, that apparently the first priority of a lot of Back-Bench Tories, who seem to represent the true core of Tory opinion, is to bung £200 million into the hands of the best-off pensioners, some of whom will not agree with it either.

Charlie Elphicke: I respectfully put it to the right hon. Gentleman that our priority is not to bung £200 million at people, as he describes it, but to see real increases in NHS spending as against the cuts that were in the last Budget of the Government whom he long supported.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I let the hon. Gentleman’s previous question go, but he is drifting way off the mark. This debate is about medical insurance.

Frank Dobson: Let me return to the point. The proposition before us is to divert £200 million of taxpayers’ money to a group of pensioners—not to the national health service, or even to the private health care sector, but to those particular pensioners. I cannot believe that many people in this country, at this moment, believe that that is the first priority of anyone sensible—it is certainly not my priority—but that is what we are being asked to say by those who want us to vote for this new clause.

I can remember the claims that were made when the old scheme was introduced. Despite that, nobody was able to adduce any evidence that it added to the number of pensioners who took out health insurance or stayed as pensioners who had health insurance. When it was abolished, the predictions from the national association of scaremongers, led by Bupa and others, created the impression that the whole system would collapse, that hardly anybody would keep using private health insurance, and that legions of the formerly insured would be pouring into every hospital, clinic and doctor’s surgery. That did not happen. The main function of the scheme was to put a few bob in the pockets and handbags of the better-off pensioners, and that is what it did. It had virtually no impact whatever on health care either in the national health service or in the private sector, and I suspect that the situation would be similar today.

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If we have £200 million to spare—apparently we do—and we want to put it into health care, I would be very happy to see some of it go into my local hospitals so that they were not laying off nurses and doctors and other staff in the next couple of years while having to put up with the ridiculous marketising shambles that the Health Secretary has wished on the country. In case it has not been clear, I am opposed to this proposition and, given the opportunity, will vote against it.

Mr Bone: It is a great pleasure to follow the right hon. Member for Holborn and St Pancras (Frank Dobson), who has been very consistent in his views over the years and, I think, represents the real views of the Opposition.

I congratulate my hon. Friend the Member for Mole Valley (Sir Paul Beresford) on proposing—

Mr Kevan Jones: Will the hon. Gentleman give way on that point?

6.15 pm

Mr Bone: I will not give way on congratulating my hon. Friend because I am not going to change my view about that. He has proposed a very small and sensible measure that I support because it would benefit people’s health. That is its basis; it is not being done for any other reason.

Over many years, I had the opportunity to observe at very close hand someone who was very seriously ill and was being treated in the national health service and in private hospitals, and they got wonderful treatment in both cases. I pay tribute to the staff in all our health institutions. I do not single out any one group as being better than the other; they all did a very good job.

I believe passionately in insurance. People should insure against things that might go wrong in future; they hope that they will not, but they take out insurance and pay a small fee for that benefit. In the case of the person I mentioned, the cost to the private medical company ran into hundreds of thousands of pounds. My argument is simple: had they not taken out private medical insurance, that money would have had to be paid by the national health service. One of the sad things I saw during that period of years was elderly, retired people at the private hospital putting down £10 notes to get a service that they would have got at a fraction of the price had they taken out insurance. By offering tax relief, we will get more people to do the right thing. It is right that we encourage people to provide for their own medical care. It is simple: if someone is getting 20% off in tax relief, the other 80% is a saving to the national health service.

Let me deal with the dead weight argument. I suspect that the Government will say, as Opposition Members have said, that because people are doing the right thing they should be penalised. If they are doing the right thing in saving money for the NHS, they should benefit from it. The new clause would encourage more people to take out private medical insurance—in this case, only those who are retired. Come February next year, when I introduce my private Member’s Bill on extending the proposal to cover all patients, we can go even further, but this would be a small step in the right direction.

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Frank Dobson: The hon. Gentleman is trying to justify this on the grounds that people should be rewarded if they place a lesser demand on the national health service. Is he suggesting tax cuts for people who stay slim, do not drink too much or do not smoke, because that would have a much bigger impact on demand on the national health service?

Mr Bone: Some of those things were tried in the past by the previous Administration—incentives for people to stop smoking, for instance. That is not what I am talking about, and I think you might well say, Mr Deputy Speaker, that I was out of order if I started to drift on to those subjects. One of the great things about today’s debate, of course, is that we have all night to scrutinise the Bill. One of the benefits of having no programming is that nobody can stop our discussions, and so far there has not been any filibustering.

Ian Swales (Redcar) (LD): Clearly we have a financial problem in this country. Has my hon. Friend made any assessment of the number of people who do not currently sign up for private medical insurance but would be likely to do so in order to establish the costs of the new clause?

Mr Bone: The proposal applies to retired people, so I think that it will affect people who have private medical insurance through their companies or who can afford to have it while they are employed, but who drop it when they retire, at the very time when they are most expensive to the national health service. The more people we can encourage to take it up, the better.

Mr Kevan Jones: I am very interested in this point. Will the hon. Gentleman say what evidence there is? When this tax relief was withdrawn, 4,000 people did not continue with their health insurance, so there is no evidence at all that people drop out. Likewise, there is no great evidence that by introducing this measure, the previous Conservative Government increased the numbers. What it did was give a tax break to people who already had private health insurance.

Mr Bone: I am grateful to the hon. Gentleman, because he said first that 4,000 dropped out and then that nobody dropped out. He had already proved that 4,000 people dropped out.

I believe that the proposal will improve the uptake of private medical insurance enormously, which will mean that there will be less of a burden on the national health service and that more money will be put into private hospitals, allowing them to develop. This country needs more health care of a higher quality. That does not need to be centrally controlled, but can be done by a mixture of NHS and private providers.

To get the idea that the priority of this Government has not been the NHS, Opposition Members must have been asleep. A thorough new Bill has come forward, which has been scrutinised by Parliament. There have been slight shrivels on the way, and it has now gone into Committee. This proposal would be a very minor adjustment to the NHS programmes of this Government. It deserves the support of the House and it will be interesting to see what happens when we divide.

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Thomas Docherty: I should say at the outset that I have no problem at all with private health care or education. If somebody wishes to spend their money as they see fit, it is entirely a matter for them. However, we must challenge head-on the argument that has been articulately, though falsely put forward by some Government Members that people are doing their patriotic duty by not using the national health service because they are a burden on it, and that they should be rewarded for having private health care. That is simply not the case. First, private health care is a form of queue jumping. I understand the arguments behind it, but we should recognise that we are talking about people who jump to the front of the queue.

Sir Paul Beresford indicated dissent.

Thomas Docherty: The hon. Gentleman shakes his head, but that is exactly what people with private health care do—they jump right to the front. There might be a six-month waiting time for a minor operation—I suspect that waiting times will get longer—but people who choose to have private health care go to the front of the queue and are seen within a fortnight. I have seen various television adverts for very reputable private health care companies that advocate the services that they provide. I do not think that that should be forgotten.

Mr Kevan Jones: Does my hon. Friend also recognise that when we had long waiting lists, the incentive that a lot of these companies used in their advertising was that people could get to the front of the queue? Is there not an argument that now that we have short waiting lists—for the time being—there is less need for private health care?

Thomas Docherty: My hon. Friend is entirely right. It is interesting that there are now far fewer adverts for private health care. He is right that part of the reason for that is that we have a superb national health service. Having served in the House for longer than I, he should take a great deal of credit for the fact that we have a first-class health service. The second reason why I suspect private health companies are not advertising is that thanks to the policies of the Government parties, people cannot afford to have private health care. Of course, many people are losing their jobs. I will return to that point shortly.

The other huge issue about burden is that the private health system is a burden on the national health service, because it takes doctors, nurses and other medical professionals away from it.

Mr Chope indicated dissent.

Thomas Docherty: Now the hon. Gentleman is shaking his head. There are many highly paid consultants who split their time between their private practice, their golf course and the national health service. The time that they spend in private practice is clearly time that is not available to the national health service.

Andrew Gwynne: Is this not a question of priorities? If there is a pot of money to be given away, would it not be much better to spend it on health care for the many, rather than on a tax give-away for the few?

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Thomas Docherty: I absolutely agree with my hon. Friend. It is fascinating that in this debate, we have seen for the first time who the real deficit deniers are in this House. I appreciate that the parliamentary resources unit, which so ably serves the Conservative Benches, is very good at putting out lines to Conservative colleagues about my hon. Friends being deficit deniers. We have seen this afternoon that the real deficit deniers are sitting on the back row of the Conservative Benches. At a time when there is a real-terms cut in NHS spending—I must correct the hon. Member for Wellingborough (Mr Bone)—because the promised increase in funding under this Conservative-led Government is lower than inflation, whether using the consumer prices index or the retail prices index, these Conservative Members propose that we should take money, which Government Front Benchers often tell us we do not have as a nation, and use it to assist with private health care. We have seen yet again today, as my hon. Friend points out, that they are the real deficit deniers. I look forward to seeing whether they have the courage to push the new clause to a Division, and I look forward to going through the No Lobby later this evening.

Mark Reckless (Rochester and Strood) (Con): On that issue, there is clearly a very large deficit, which we inherited from the hon. Gentleman’s Government. On funding for this proposal, we have seen a 74% increase in our net contribution to the EU, which many Government Members would not like to see paid. The Financial Secretary to the Treasury has made very substantial savings by keeping us out of the Greek bail-out—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I do not think that we will be tempted down that route. We will stick to insurance.

Thomas Docherty: The hon. Member for Rochester and Strood (Mark Reckless) is always tempting. I suspect that you would rule me out of order, Mr Deputy Speaker, if I pointed out that it was this Prime Minister who went to the European Council and failed to live up to his promises. Therefore, let me move back to the substantive debate, which is being so ably chaired.

This proposal is a Trojan horse. Government Members tried hard to cover up their anti-health service rhetoric, but every now and again it seeped out in their speeches. The national health service is an institution that Labour Members are proud of. It is the greatest achievement in 100 years of the Labour movement. It has transformed our country’s health. As you know, Mr Deputy Speaker, I am doing an Open university degree in history. [ Interruption. ] I am asked where I find the time. I have a great wingman in my parliamentary duties. I am currently studying a module on the history of medicine from 1500 to 1930. It is fascinating to see that the pre-war health system that was available to the vast majority of people did not compare one iota to the achievement of the 1945 Labour Government. It was fascinating to hear the disdain of Government Members for the national health service. They are attempting to allow privatisation through the back door and to undermine the national health service. I look forward to hearing what the Minister has to say and whether he agrees with his own colleagues on the issue.

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6.30 pm

There is a sense of déjà vu about this debate. I took part in last summer’s Finance Bill debates, Mr Deputy Speaker, as you will recall. We had an interesting debate about premium taxes, which the hon. Member for Christchurch (Mr Chope) was right to mention. We had two discussions, one about motor insurance and one about private health care. He made a compelling argument about motor insurance, which is a legal requirement about which people have no choice. I am therefore surprised, as he said he was trying to do something for hard-pressed people, that he has not chosen that issue. I suspect that that is because this is a Trojan horse attempt to undermine the national health service.

The hon. Gentleman spoke about the fact that many people have private health care through their employers. Let us remind ourselves why companies have historically offered it.

Mr Kevan Jones: Does my hon. Friend recognise that it is the top 40% of earners who have access to private insurance? In the bottom quartile, less than 5% have it.

Thomas Docherty: My hon. Friend is absolutely correct, and the new clause is, yet again, all about the few, not the many. It would do nothing for the squeezed middle, the people who, thanks to the economic policies of Treasury Ministers, are finding life much harder at the moment. We should perhaps reflect on the fact that for all the passion about tax breaks on insurance, hon. Members of both Government parties did not hesitate to go through the Lobby and vote to raise VAT, which has made life much harder for many of my hon. Friend’s constituents and mine.

There are two reasons why companies have historically offered private health care. One is as an incentive to get people to come and work for them in a competitive market. As I said, thanks to policies of the Government parties, that is not particularly a problem in the current climate of job losses and rising unemployment.

The second reason is a hard-nosed business case for key employees. There is obviously a good reason why companies decide that to minimise the amount of time for which certain key employees are absent from the workplace due to illness or injury, they will provide a fast-track or—wait for it—queue-jumping approach to health care. I understand the argument for that, and it is a matter of choice, but companies have not offered private health care beyond retirement because they have no further use for that employee. That is why we tend not to see companies giving a lifetime guarantee, as they do in the United States. It is therefore a slightly false argument to say that when a company provides private health care up to the age of 65, the state needs to step in after that. It is a hard-nosed business reason.

Mr Jones: Is not one of the hard facts of life in the United States system, as many individuals there are seeing now, that as soon as people become unemployed, their health insurance stops? In some cases the public sector then has to pick it up. Although there may be a benefit when somebody has work, there clearly is not if they do not have work.

Thomas Docherty: My hon. Friend is entirely correct that that is the case for the vast majority of people. Of course, care is often continued for highly paid executives,

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the group of people whom Conservative Members seek to help—as I have said, the Conservatives are the party of the very few, not the many. However, he is entirely right that the vast majority of US citizens lose their private health cover in that situation. That is why Opposition Members have worked so hard to resist the attempts of the Secretary of State and his Liberal cohorts to introduce privatisation by the back door.

I am conscious that the hon. Member for Mole Valley (Sir Paul Beresford) will wish to make his closing arguments prior to dividing the House. We look forward to seeing the strength of feeling that exists, and I urge Liberal Democrat Members to stand up for the health service and stand up to their Conservative allies.

Mr Redwood: I should like to make it absolutely clear that this matter is not my No. 1 priority, and I do not think it is the No. 1 priority of all Conservative Members. We were elected on a manifesto that said that we were going to increase spending on the NHS in the traditional way by several billion pounds a year, and that pledge is going to be honoured.

Thomas Docherty: No it’s not; you’ve broken it.

Mr Redwood: The hon. Gentleman should read the Red Book. It clearly shows substantial cash increases in spending on health every year over the lifetime of this Parliament.

Thomas Docherty: The reality is that the increase in spending is lower than the increase in inflation, so it is a real-terms cut.

Mr Redwood: We have kept the promise to have substantial increases in cash spending. It is now very important that we get the maximum for it. We are in danger of wandering too far from the new clause, but I point out that as we are about to enter a period of wage freezes, a substantial increase in cash funding will obviously buy more health care, because the main cost is wages. I hope that the hon. Gentleman will understand that. The Government’s clear priority was to expand cancer treatments and other drugs, and to ensure that we have more high-quality care. I welcome that very much.

The second thing to understand about the new clause is that it is not a help-the-rich new clause. Opposition Members should understand that the rich are not going to be attracted by an offset on 20% tax, because they are either non-doms paying very little tax or they are paying 50% tax. They are people who self-insure, so they are not going to take out insurance policies such as we are discussing. We are not dealing with the rich, because the rich have always been able to buy the health care that they want under any type of Government. That would not change as a result of the new clause.

We are talking about a specific group of people who are coming up to retirement. Some of them will have had the benefit of company scheme insurance, and some will not have had the benefit of insurance at all. At 65, they often have an important decision to take, because several things happen. First, they lose their company health insurance, if they were receiving it. Secondly, their insurance premiums go up a lot, because they are suddenly thought to be higher risk. Thirdly, they enter the age group when they will need a lot more

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health care than they did in their healthy, earning years when they were executives or whatever. We are talking about whether that group of people should be able to carry on their insurance, and whether such an incentive would make any difference.

Kerry McCarthy (Bristol East) (Lab): Will the right hon. Gentleman give the House some indication of what proportion of the population he is talking about, and what sort of income scale they are on, including retirement income?

Mr Redwood: I will give as much precision as the Leader of the Opposition and say that they are the squeezed middle. They are exactly the people in whom the Opposition are meant to be interested but whom they clearly now wish to attack in the debate.

Mr Iain Wright (Hartlepool) (Lab) rose—

Mr Kevan Jones rose—

Mr Redwood: I give way first to the hon. Member for Hartlepool (Mr Wright).

Mr Wright: Will the right hon. Gentleman tell us how much the measures in the new clause would cost?

Mr Redwood: I will take the other intervention before I respond.

Mr Jones: I can help the right hon. Gentleman and say that the proportion of people who would be helped is 5% of the population.

Mr Redwood: That may have been the case in the past, but what we are interested in is the new clause.

The answer to the hon. Member for Hartlepool is that no, I cannot tell him that. It is not my new clause and I have not researched the matter. I was about to say that I would be more likely to vote for it if a case could be made on the money involved. It seems to me that it would be a good-value purchase if the savings on health care that it generated for the NHS were considerable. We need to balance the two things—we need to know what the revenue loss would be, based on a sensible estimate of take-up, and what the savings to the NHS would be.

The Labour party has to accept that it is not a one-sided matter. The whole point of the scheme is that there would be cost savings to the NHS. That money going into the NHS could then be spent on other people and other treatment. The NHS may still have to do the really difficult things for the people involved, but there could still be an overall benefit both to them and to the NHS if the extra money coming through the private sector led to extra care.

The fundamental mistake that we have heard from the Opposition tonight in their approach to these issues—although it was not the mistake of many Labour Ministers—is the idea that the resources to be provided are finite, to be used either in the private sector or in the public sector. The whole idea, surely, is that we need more resources, more trained people, more treatments,

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more supplies and more medical activity, because people are living longer, they need more health treatments and the population is growing for a variety of reasons.

As some of my hon. Friends have said, the one big gap between Britain and our European partners, which are normally the example held out by the Labour party, is the amount of private sector money that goes into health in Britain. It is a considerably smaller proportion than in countries such as Germany or France or the Scandinavian countries. If Labour Members are interested in the squeezed middle, they would be well advised to consider any scheme that might help to increase or release private sector money in health in a way that creates more resources, more medically trained people, and more medical treatment.

Oliver Heald: Does my right hon. Friend agree that a more substantial private sector would help the NHS, because at times of great busyness in the NHS, it is to the private sector that the NHS looks to do the necessary operations? That happens right across the country, and it is one reason why it has been possible to bear down on waiting times.

Mr Redwood: That is exactly what successive Ministers and Secretaries of State for Health in the Labour Government concluded, with the honourable exception of the right hon. Member for Holborn and St Pancras (Frank Dobson). After him came the modernising Secretaries of State and Ministers who felt that they had to turn to the private sector to achieve better standards—in terms of offering people treatment in a timely way—and to expand the total capacity of the system.

Frank Dobson: My successors, to whom the right hon. Gentleman refers, sometimes make rather wild claims about the number of cataract operations that are carried out by the private sector. When Labour came to power, the NHS did 167,000 cataract operations a year, and in the last year for which figures are available it did 346,000. The private sector made the massive contribution of 16,000 in its best year.

Mr Redwood: The right hon. Gentleman may well be right. It is quite obvious that the NHS is the dominant health provider in our country—it has been for the many years since its foundation, and it will continue to be so under any schemes proposed by any governing party or parties in this House of Commons.

I wanted to concentrate on the cost and benefit of the proposals. I am an agnostic on this issue, which may come as a surprise to the House, because I am far from being a deficit denier, and I believe that we must weigh carefully any proposal for tax relief against other such proposals. In this case, I would be interested to know more about what the savings would be. There could be significant savings. If Ministers do not adopt the proposed scheme, they need to introduce others to promote more private health care of the right kind, because we will need a lot more of that to meet our targets and requirements, alongside the very large, and rightly favoured and supported, NHS.

Perhaps my hon. Friends the Members for Mole Valley (Sir Paul Beresford), for Christchurch (Mr Chope) and for North East Hertfordshire (Oliver Heald), who

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have spoken so strongly for the new clauses, wish to move closer to the Liberal Democrat coalition partners. Perhaps they had ringing in their minds the words of the right hon. Member for Yeovil (Mr Laws), who set out a comprehensive universal insurance scheme for health in the Orange Book. We will have to disappoint him today, because the proposal is modest, and it will not cover nearly as many people as he would like. Were he here, we could debate that with him, and perhaps he would see that caution and moderation is the hallmark of Conservative approaches to such things. This proposal might be the way to get started on the journey that he wished to make.

Mr Iain Wright: In terms of spending on health, does the right hon. Gentleman believe that we should move away from a policy of funding through general taxation and towards comprehensive medical insurance, which is the policy advocated by the right hon. Member for Yeovil (Mr Laws)?

Mr Redwood: No, I was just wondering whether my hon. Friends had that in mind, knowing how much they treasure the coalition with the Liberal Democrats, and knowing that such bold statements were made in the Orange Book by no less than a former Chief Secretary to the Treasury, who presumably knew the price of everything and the value of some things, and who would want to ensure value for money.

I hope that my hon. Friends on the Front Bench consider the wider issue that was rightly raised by my hon. Friend the Member for Mole Valley. How do we get extra resources and money spent on health in a friendly and sensible way, on top of the very great and important NHS, which my hon. Friends the Members for Mole Valley, for Christchurch and for North East Hertfordshire rightly back? If not by their route, what route? May we please have some numbers? The proposal could be a good-value buy, but that depends very much on how much cost would be taken out of the NHS.

Michael Connarty (Linlithgow and East Falkirk) (Lab): I have one or two things to say about this debate, and I was stirred into standing up by the previous speech, because either woolly-headed logic was being used by the right hon. Member for Wokingham (Mr Redwood), or he was making a deliberate statement to try to cover—

6.45 pm

Oliver Heald: On a point of order, Mr Deputy Speaker. Is it in order for somebody to come into the Chamber towards the very end of a debate and then to start criticising how it has been conducted?

Mr Deputy Speaker (Mr Nigel Evans): That is not a matter for me. I have just come into the Chair myself, as I am sure you observed, Mr Heald, so I am the last one to criticise anyone for just coming in and talking.

Michael Connarty: You know, Mr Deputy Speaker, there is amazing technology in this place. Members can sit in their offices and, if they wish, not watch the tennis but follow the debate in detail, and come down to the Chamber when they think it might be useful to add something. I recommend it to Members: turn off the tennis, turn on the Chamber.

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The point I was making is that the logic used by the right hon. Member for Wokingham was possibly deliberately to convince the public that the proposal is an effort to add extra resources to the health services by encouraging people to put money into private health insurance. The logic, of course, is that such private health insurance is available to some people when they are in employment, but is denied them when they retire. If that is the kind of employer that people have, it is a shame that they are deluded into thinking that insurance is a substitute for taxation-based health services.

The right hon. Gentleman stated that resources are not finite, and that somehow this money would bring new resources rushing into the health service. Everyone who has studied the health service over the time I have been in elected politics, which is since 1977, knows what happens. The consultant and the surgeon choose whether to work in the private sector or in the public sector. Sometimes they choose to work in a mixture of those. I commend those who decide to work entirely in the public sector, because they give the best value to our constituents, as my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said when, in an intervention, he cited the number of operations for cataracts.

However, the reality is that only a limited number of people get to the top of the elitist profession that is the medical profession, particularly to consultant level, because we do not train enough people to do the work that is required in the health service.

Mr Redwood: Does the hon. Gentleman not understand that in countries that have a bigger private sector on top of a large public sector, there are more doctors and nurses in relation to the population, because there is more money?

Michael Connarty: The right hon. Gentleman leads me to my next point. He recommended that we look at the EU system. I am glad that in reply to an intervention from one of my hon. Friends he said that he objects to the idea of a comprehensive, insurance-based health service in this country. I, too, have looked at that on the continent and in EU countries, and I have seen that it does not work.

In fact, other EU countries do have a larger number of doctors—there are more doctors per head of population in most of them than in this country—but that is because of the elitist structure of the medical profession in this country. That structure keeps the numbers down and pays huge bonuses to people once they get to the higher gradings. Many of those people are the very same ones who moonlight in the private sector for additional personal financial gain.

Mr Kevan Jones: Insurance-based health systems such as that in the United States may have large numbers of doctors, but those doctors are not accessible to the large proportion of the population who do not have private health care.

Michael Connarty: The figures in the US are—

Frank Dobson: Forty million.

Michael Connarty: I hear my right hon. Friend say that 40 million people in the United States of America exist without adequate health care insurance or provision. A friend of mine tried to set up a dental care service in

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New England based on Medicare, and found that the money was not available. Many people in New England are denied any form of dental care when they end up in private nursing homes in their old age. Something is seriously wrong with that. I commend President Obama’s attempts to at least moderate that.

Let me return to the debate. People should not be deluded into thinking that the proposal will encourage more resources into the health service. It will encourage more companies to demand the services of the limited number of available surgeons to carry out operations for their private patients, instead of allowing the surgeons to do the job they should be doing. I would commend a scheme of private health care payments that provided the NHS with new equipment, doctors and other staff on top of those already trained in this country to work in the NHS.

Those who say that this proposal could do that should look at what happened with a hospital built for the private sector on the west coast of Scotland. The idea was to build a huge hospital with private money and to have people come from around the world to use it, but eventually it had to be sold to the Scottish Government when Jack McConnell was First Minister. We bought the hospital at a knock-down price because, in reality, the private sector could not generate new and fresh talent and equipment. That is not going to happen. It will just suck out resources needed by my constituents, who believe that the NHS should be paid for through taxes.

Andrew Gwynne: Does my hon. Friend agree that this is not about restricting choice, but about prioritising finite resources and ensuring that any available money goes into front-line NHS services, rather than into a tax giveaway to a small number of people who are already accessing private health care?

Michael Connarty: I could not have put it better myself—I commend my hon. Friend for helping me with his analysis.

The Labour Government were right to encourage people to provide resources that the NHS could access using taxpayers’ money where it would be more efficient. That was an excellent scheme that enabled people in my constituency to go to hospitals where beds were available over Christmas for operations that were not being done and could not be fitted into the schedules of hospitals that were short of resources. That was a good initiative, but this proposal is not; it is the opposite. It would be a damaging initiative if it encouraged people to take out private health insurance and so divert resources from the NHS, where they are needed.

John Hemming (Birmingham, Yardley) (LD): I have found it odd recently that some private health insurers will pay those whom they insure to use the NHS. If that is the habit of private health insurance, where does the hon. Gentleman think the saving to the taxpayer is in allowing this tax relief?

Michael Connarty: I did not want to cite that example, although it is a good example of what happens when people use private health care and take resources away

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from the NHS. I find it appalling that through private health care people can actually buy organs donated to the NHS by paying for the hotel care and all the rest of it. They are not allowed to buy the organs any longer; instead they buy the ancillary health care and then use resources that people might have donated thinking they would go to NHS patients, but which end up being used for private care. But that is an aside from this debate.

The new clause would encourage more private money to suck out resources and money needed in the NHS. The right hon. Member for Wokingham kept talking about cash increases. We should not pretend that this is not the same Member who reminded us all of the real effect of cash increases when inflation is running higher than the increase. He was—how can I put this?—dodging the issue unnecessarily and treating us as though we were stupid. Cash increases will not keep the resources at the level they are at, and the new clause will in fact take out resources that the NHS does not have to give.

Mr Stewart Jackson (Peterborough) (Con): I can scarcely believe that the hon. Gentleman is making that case, given that the previous Labour Government paid consultants and general practitioners respectively 27% and 44% more for doing less work, hid billions of pounds off balance sheets with dodgy private finance initiative schemes, which have reduced taxpayers to penury, and foisted independent sector training on primary care trusts, meaning that they could not plan for patient numbers or the money needed to run those centres.

Mr Deputy Speaker (Mr Nigel Evans): Order. Interventions must be brief; otherwise we might find ourselves sitting until the early hours of the morning.

Michael Connarty: If the hon. Gentleman proposed a motion suggesting that all those things should not have happened, I would vote for it. I am a socialist. I did not like the Labour Government overpaying people and changing their hours in such a way that my constituents got less of a service. It seems that even some Conservatives realise that paying people huge amounts of money and asking them to work fewer hours in this elitist organisation—I am very critical of the consultancy-led health service in our country—is something we should be looking at seriously. Our constituents need value for money, which many of the schemes the hon. Gentleman mentioned did not provide. However, it is interesting that this Government have done nothing to change the tax laws, despite 23% of PFIs now being owned by foreign companies that are still getting the tax breaks in this country. Part of the idea of PFIs was that they would bring in tax money, yet 23% of the companies are abroad and put nothing into this country’s economy.

Kerry McCarthy: I can confirm that the Opposition oppose new clause 1. The Prime Minister spent the years in the run-up to the general election and the year since trying to convince us that he valued the NHS, that it was “safe in his hands”. Sadly, however, given the current shambles over the health Bill, which has yet again returned to Committee, it is safe to say that he and his Health Secretary have spectacularly failed. On current evidence, it seems that the Prime Minister did not even attempt to persuade his Back Benchers—it seems that they now want to reinstate a policy introduced by Baroness Thatcher’s Government.