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Mr. John Bercow (Buckingham): Ah!

Mr. Milburn: The hon. Gentleman ought to get a grip.

In recent months, the extra resources that we have made available have reduced the numbers of elderly patients whose discharge from hospital has been delayed. I am grateful for the help that local councils have given us in addressing this problem. Here, however, the long-term solution is not just investment, it is reform. I can tell the House today that, to bridge the gap between health and social care, we intend to legislate, as they have done in Sweden and other European countries, to give local councils responsibility—from their 6 per cent. extra real-terms increases—for the cost of beds needlessly blocked in hospitals.

Councils will need to use those resources to ensure that older people are able to leave hospital when their treatment is completed. If councils reduce the current level of bed blocking so that older people are able to leave hospital safely when they are well, they will have the freedom to use those resources to invest in extra services. If bed blocking goes up, councils will incur the cost of keeping older people in hospital unnecessarily. There will be similar incentives to prevent hospitals from seeking to discharge patients prematurely. In this way, we will provide local councils with the investment and the incentives to improve care for older people.

Taken together, the NHS plan and the next steps announced today amount to the most radical and fundamental reform programme inside the NHS since 1948. I want to pay tribute to the staff of the national health service—not just the nurses, doctors and consultants, but all the staff in the different medical disciplines, the ancillary staff, the secretaries, the receptionists, the porters and the cleaners. They represent the very best of British public service and I believe that, as a nation and as a Parliament, we should be proud of the work that they do. I know and understand the enormous pressure that they are under as the NHS plans to make these big changes. But I know, too, that they share this basic goal: to rebuild the national health service around the needs of its patients.

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This programme of investment and reform will mean that each year, every year, waiting times will fall. Last year, the maximum wait for a hospital operation was 18 months. Today it is 15 months. By this time next year, it will fall to 12 months. By 2005, it will be six months, and by 2008, it will have been reduced to three months. By then, the average waiting time for a hospital operation will be just six weeks. It is our aim that people will no longer have to face the dilemma of having to wait for treatment or having to pay for it.

As a party and as a Government, we are committed to providing opportunities to all in our society and not just to some, so there will be more effort to prevent ill health, as well as treating it. Twenty-five thousand lives a year can be saved by the investment we can now make in preventing and treating heart disease alone.

The balance of services will shift, with more patients being seen in primary and community settings, not just in hospitals. Social services will have resources to extend by one third rehabilitation care for older people. Councils will be able to increase fees to stabilise the care home market and secure more care home beds. More investment will mean more old people will have the choice of care in their own homes rather than in care homes.

Yesterday's Budget and today's reforms mean that the NHS plan will be delivered.

I want to make two further points. First, it is a 10-year plan, as we said in July 2000. By the time of the next election, there will be real and significant improvements. However, that cannot happen overnight. It takes seven years at least to train a doctor and up to 15 years to train a consultant. Expectations will be high—I understand that—but they also need to be reasonable, and people need to understand that a 10-year plan is exactly what it says. It will take time to be delivered in full. At least now, public and patients will be able to see improvements made stage by stage, independently of Government, audited, monitored and inspected.

Secondly, there is consensus in the country on one thing: Britain needs to spend more on health care. There is no mystery about why there are no waiting lists in Germany. It has spent more, and has done so for years.

We can debate endlessly the system of finance, but one thing is beyond debate: the level of finance has to be raised. Once that is accepted, the choice is not between a system funded out of general taxation, which results in higher national insurance, and some other system that comes for free. Importing the German system of social insurance would cost the equivalent of an extra £1,000 per worker per year, and the French system would cost £1,500 per worker per year.

Labour Members believe in the NHS in our heads as well as our hearts. We believe it to be the best and fairest system of providing true health insurance, because it is based on the scale of the person's need, not the size of their wallet. It is the best insurance policy in the world.

It is now for those who want to see the NHS not reformed but abandoned, and who routinely call it Stalinist, to say honestly what their alternative is, what it would cost and how much families and pensioners would have to pay for it.

Yesterday we made a choice, and we ask the British people to make the same choice. We are proud of the NHS and of the people working in it. We are giving it the

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money that it deserves. We are making the changes it needs. Investment plus reform equals results. We will be happy to be judged on them.

Dr. Liam Fox (Woodspring): I am grateful to the Secretary of State for his statement. He is right: there is a measure of consensus in the House. We all agree that more money should be spent on health in the United Kingdom. We believe that health care should be available to all irrespective of their means. The Secretary of State's statement must be judged against the criterion set down by the Chancellor yesterday, when he said that the scale of long-term investment would be matched by the scale of long-term reform. Have we had today anything like the indication of long-term reform that comes anywhere close to the increase in funding announced by the Chancellor? Indeed, the Secretary of State's words mark quite a shift in the Government's position. He said in his statement:

However, the Chancellor told The Sun in November:

We believe that reform is needed, but we are not willing to give the Government a blank cheque—especially after a statement such as this, high on waffle and low on detail. I should like the Secretary of State—yes, he can get his pen ready—to give us some numbers, and some of the details of what the plans actually mean.

First, let me ask about national insurance. What will the changes announced yesterday cost the NHS as an employer, and what will be the additional cost in taxes to a consultant, a senior house officer and a ward sister on average salaries?

Where will the new auditors come from to deal with the Secretary of State's new auditing system? Please let them not be the Prime Minister's cronies in Andersen! How many are envisaged, and how much will it all cost? Who will appoint the new auditors? Will they be free to set their own budgets? The last thing we need is a new set of bureaucrats. Perhaps the most important question is this: will the auditors be able to audit private hospitals? That is especially important when NHS patients are being treated in such hospitals. Will we see the Commission for Health Improvement and the National Care Standards Commission merge with the National Audit Office, or any potential mixture involving the three bodies? [Interruption.] I see that the Government Chief Whip is up to her usual intellectual standard today, although that is not saying much.

When it comes to the question of devolved power, the Secretary of State is pulling a confidence trick. He talks of more money being available on the front line, but he does not say that there are so many strings attached that those on the front line are not free to choose how to spend it. Last week I visited the chairman of a primary care group, who told me that of the extra £13 million made available last year only £55,000 was discretionary money that he could choose how to use.

Perhaps the Secretary of State can give us one or two more details about devolved power. He talks of devolved bodies being able to borrow. Where will they be able to borrow from? Will they be able to borrow from

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the markets? Will the borrowing happen with or without an underwriting by the Government, and how will this affect PSBR calculations?

The Secretary of State said that there would be

What sort of individual financial incentives will those be, how much—typically—will they be worth, and at what level will they be negotiated?

I was delighted to hear the Secretary of State talk of money following the patient: I had thought that that was one of the phrases new Labour had banned. At least he is returning to some of the right ideas. But what exactly does he mean by "importing additional overseas capacity"? Who is being imported and from where, and how will the process be funded?

Perhaps the most appalling part of the statement related to bed blocking. For more than three years, the Government were warned about the consequences of their policy of running down care homes in the community. They were warned that when they lost beds in the community they would block beds in the NHS, and that they would see an increase in the number of cancelled operations and a rise in waiting lists as well as inappropriate care. What is the Secretary of State going to do now? [Interruption.]

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