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Mr. Tom Clarke: Will the right hon. Gentleman confirm or deny the policy of his predecessor, the right hon. Member for South-West Surrey (Mrs. Bottomley), that direct payments should apply only to people under the age of 65 and should be very limited? What do regulations 3, 4 and 5 actually mean? How widespread is the Government's approach?
Mr. Dorrell: The Government's approach has avowedly been to welcome the principle, but not to introduce it for all beneficiaries of community care at the first stage. Instead, we want to focus on specific groups so that we can test the system and ensure that it is well proven before it is implemented generally. [Interruption.] The hon. Member for Monklands, West (Mr. Clarke) seems perturbed by that. The Opposition regularly tell us that new ideas should be tested so that we can find out whether they work before they are made available to everybody. We are taking the Opposition's advice in this case. We accept the direct payment principle and we will introduce it incrementally, starting with defined groups, so that we can determine whether it works.
Both the Bills are modest, but they are important developments in, and underline the Government's commitment to, public services, and in particular the NHS. It is a matter of public record that, since 1979, the Government have put huge additional resources into the NHS. There has also been a huge increase in the number of patients that it treats. Perhaps most important of all, certainly in patients' perception of the NHS, is the dramatic broadening of the range of treatments available. I take no political credit for that. It is the result of medical science developing. Medicine can now treat a broader range of conditions more successfully than it could in 1979. Medical developments have been made available to NHS patients successfully over the past 16 years; a broader range of treatment is available. Furthermore, there are higher-class buildings and facilities in which treatments are made available. We have seen a dramatic development of the NHS over the past 16 years.
Sir Sydney Chapman (Chipping Barnet):
Is my right hon. Friend aware that the outturn expenditure on the NHS this year shows that we are now spending £30,000 million a year more on the service than was spent upon it when the Government came to power 16 years ago? Is that fact not a matter for commendation rather than condemnation?
Mr. Dorrell:
I could not agree more with my hon. Friend. The huge increase in resources that has been devoted to the NHS is widely welcomed by many people, not all of whom are the Government's political sympathisers. The real-terms growth of the money available to the NHS this year compared with 1979 is about 70 per cent. It has grown by nearly three quarters in real terms since the Government came to power. That reflects a commitment to growth in terms of the number
As I was saying earlier in answer to the hon. Member for Newham, South (Mr. Spearing), there is no distinction between the Front Benches about the vital importance to the people of ensuring that we maintain a system of health care that allows the benefits of medical science to be made available to the patients of the health service on the basis of their clinical needs, not of their ability to pay. Unfortunately, Opposition Members are making repeated attempts--the hon. Member for Peckham is involved, as was her predecessor--to create distinctions where there is none. There are plenty of other distinctions but on the principle or commitment, to which I have referred, there is no distinction.
Mr. Stephen Timms (Newham, North-East):
I am pleased that the Secretary of State is talking about resources within the health service. I want to ask him about the allocation of resources within the service. He will know that his predecessor introduced a new capitation formula for distributing resources between district health authorities. It was based on research undertaken by York university, which carried the recommendation that resources should be focused on the most disadvantaged areas. Is the right hon. Gentleman aware of the effect of that formula on the East London and the City health authority, which has by far the greatest concentration of deprivation in the United Kingdom? In fact, it loses £23 million under the new formula whereas other much less disadvantaged areas gain under it. Will he review the outcome? Perhaps he will comment upon it this morning.
Mr. Dorrell:
The formula was reviewed on the Government's authority using the independent advice of York university. To pick up the hon. Gentleman's phrase, it was not York university that recommended that we should target resources on areas where needs are greatest. That was the design criterion. That was the question that we put to York university. We said, "We want to target health resources at the areas where need is greatest. You tell us how to construct a formula that measures health need in such a way as to allow us to deliver our policy objective"--that is the Government's policy objective, not that of York university--"to ensure that health resources are targeted at need."
That is the central purpose of the health service. It has to apply that policy at every level, starting from the top, in allocating resources through the weighted capitation formula. The hon. Gentleman is picking up, as it were, the formula produced by York university and saying that he disagrees with the professors at York in their answer to the question that we asked of them.
Mr. Spearing:
The result, not the answer.
Mr. Dorrell:
Well, the result or the answer. I accept the hon. Gentleman's amendment. The hon. Member for Newham, North-East (Mr. Timms) disagrees with the result rather than the answer that York university offered. The hon. Member for Newham, South accepts that we asked the right question but he does not like York's answer. Perhaps that is something that he had better take up with the university.
Mr. Timms:
I am not disagreeing with the York university outcome. Instead, I am disagreeing with the
Mr. Dorrell:
With great respect, that is not true. The weighted capitation formula that has been introduced by the Government is based squarely on the advice of York university. We asked the university a specific question and it gave us a specific answer. That is the answer that we have implemented.
Mr. Simon Hughes (Southwark and Bermondsey):
There is no doubt that the health service has received substantially more resources since 1979. Will the Secretary of State put on record how much he believes the health service has received in additional resources bearing in mind the amount that is needed to keep pace with inflation in the health service, given the greater number of elderly people who are using the service and the greater cost of the high technology that the service uses? What is the real-terms comparative cost compared with NHS inflation over the period since 1979?
Mr. Dorrell:
I have never understood that argument. Inflation is not specific to any individual part of the economy. Inflation means a rise in the general level of prices. We cannot have a general level of prices in different parts of the economy. The argument that there is a specific cost increase in different parts of the economy that is faster than the increase in other parts would be more persuasive if I could find any part of the economy where it was said that costs had been increasing more slowly than in the economy in general.
The reality is that we do not collect NHS pounds, education pounds or defence pounds in taxation. The reality is that we collect pounds. The extra resources that have been devoted to the health service have been paid for through taxation. The increased moneys made available to the health service reflect more than 1 per cent. of the gross national income increase available to the health service since 1979. The argument is not advanced by trying to invent a specific NHS currency. The currency in which people pay taxes is pounds sterling. We have provided much more of that resource to the health service over the past 16 years.
Sir Sydney Chapman:
Perhaps the hon. Member for Southwark and Bermondsey (Mr. Hughes) will be reassured when I say that, since 1979, the amount of money that we have spent on the health service, as measured by a percentage of gross domestic product, has increased from 4.7 to 6 per cent. That is a considerable and significant increase.
Mr. Dorrell:
My hon. Friend is absolutely right. That is the 1 per cent. plus to which I was referring.
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