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Chris Grayling: Can I take the right hon. Gentleman back three years to the Chancellor of the Exchequer's previous Budget announcement of £40 billion of extra spending on public services, including a substantial chunk for the national health service? If the NHS is the vehicle to deliver better health care, why have we seen no signs at ground level in our constituencies of improvements as a result of that extra spending?

Mr. Milburn: The hon. Gentleman obviously lives in a parallel universe.

Chris Grayling: I see problems every day of the week.

Mr. Milburn: Of course there are problems in the national health service; we acknowledge that. I do not pretend that everything is perfect, but the hon. Gentleman should not pretend that everything is hopeless, because it is not. The NHS is growing and expanding. Numbers of nurses, doctors and beds are up; waiting lists and waiting times are coming down. Yes, of course there is a long way to go, but the only way to ensure that we continue to make progress is to get in the investment alongside the reforms.

As I said to the hon. Gentleman before, if he is concerned about the national health service, what will he do tonight to support it now that he has an opportunity to do so? No one should pretend that if we want world-class health care in our country it can come without being paid for.

Mr. Ivan Henderson (Harwich): May I welcome the investment on behalf of pensioners in my constituency? Under the Government's plan, my pensioners will not pay a penny, whereas under the Conservatives' plan they would have to pay—if they could find an insurance policy that would insure them.

Before 1997, two community hospitals in my constituency were threatened with cuts by the Conservative Government. Will my right hon. Friend assure me that this Government will give the investment to primary care trusts that will allow those community hospitals to deliver services for elderly patients at the nearest point to where they live?

Mr. Milburn: That is precisely what we propose. When we came into office, GPs controlled about 15 per cent. of overall NHS budgets. Today, through the primary care trusts, they help to control about 50 per cent., and over the course of the next two years they will control 75 per cent. Indeed, if we can go further than that, we should do so. The money should be out there on the front

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line, controlled not by politicians or by civil servants, but by front-line doctors, nurses and local patients and members of the public.

On my hon. Friend's first point, he is absolutely right. The choice about funding health care is not whether we pay more for improved health care, but how we pay it. The right hon. and learned Member for Folkestone and Hythe and the hon. Member for Woodspring both acknowledged that we need to put more money into our health care system; there is consensus on that. The issue is how best to do so. The choice is not between one system funded through general taxation, which might result in higher national insurance contributions, and another system that comes for free. Every health care system in the world has to be paid for.

Conservative Members are in danger of arguing that the grass is inevitably greener on the other side. Yet when they look at social insurance systems in France and Germany, they will see that although more investment has been going in, it has been going in for decades. The costs of importing the German system would be the equivalent of approximately £1,000 per worker a year; the French system would cost around £1,500 per worker a year. That is the problem with social insurance.

I shall outline the problems with private health insurance; the hon. Member for Woodspring has form on that. I do not know whether he will advocate it, but he knows that it means increased bureaucracy, decreased efficiency and heightened inequity. The British Medical Association review stated more than a year ago that

There are good reasons for saying that the case for a tax-funded NHS is stronger than ever. In a world where health care can do more but also cost more than ever, providing care according to need rather than according to ability to pay is the best insurance policy in the world.

Conservative Members like to pretend that we have a closed mind on learning lessons from other countries. That is simply untrue. Of course there are lessons to be learned from abroad. However, the first lesson is not to abandon our system of tax-based funding, and to make the right supply-side reforms. Our proposals on patient choice are therefore modelled on the success of that approach in the tax-funded health care systems of Denmark, Sweden and Norway.

Payment by results and output-based funding are founded on experiences not only in Scandinavia, but in Australia, Austria, France and Germany. Our plans to reduce delayed discharge, which the hon. Member for Woodspring seems to have taken against, are modelled on those in Sweden, Denmark and Norway. Models similar to foundation hospitals exist throughout Europe, whether in Sweden or Spain. Diagnostic and treatment centres are increasingly common not only in this country but in the United States.

The difference between the Government's approach to lessons from abroad and that of the Conservative party is that we have sought to learn lessons to strengthen the NHS, whereas Conservative Members look for excuses to undermine it. Why else do they refuse to learn the big lesson from countries such as France, Germany, Denmark or Sweden? It is that better health care requires more resources alongside effective reforms. Those countries do

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not have a superior system but a superior level of funding for health care. In the Budget, we apply the lessons that we have learned.

By contrast, the Conservative position frankly lacks principle and credibility. Conservative Members say that health care needs more resources, but refuse to say how much. They say that they will not back our sources of extra investment, but refuse to explain where they will get the resources. They say that the NHS must be reformed but refuse to outline their programme of reform.

There is only one conclusion. Today's Conservative party does not want the NHS to expand, but to decline. Conservative Members do not want a one-nation service, but two-tier health care. When they claim that they want the NHS to be reformed, they mean that they want it to be abandoned.

Labour Members say that that is not the right way forward for health care in our country. Tonight we will vote for investment plus reform. We will vote for increases in funding, but improvements in performance; we will vote to put more in, but demand to get more out. Tonight, we will vote for the NHS. We will do that with our heads as well as our hearts.

4.18 pm

Dr. Liam Fox (Woodspring): I agree with one comment in the Secretary of State's speech. There is much in the current debate on health care on which both sides agree. He is correct that we agree on the need to spend more on health care in the United Kingdom—however the money is raised—and that it should be available to all, irrespective of ability to pay. I go further. I agree with the Secretary of State's comment that

I hope that he was serious when he said on Sunday that private management might well run national health service hospitals by the next general election.

There is undoubtedly a growing appetite for a genuine debate about health care in this country, and I welcome that. The Conservative party will make proposals on organisation and funding, and I should be surprised if they were not vigorously debated in the House and beyond. Many other systems are worth examining and most of them lead to better cure and survival rates and shorter waiting times than the NHS. The Secretary of State is right; in many ways, the grass is greener on the other side, and that is what we would like to see on this side as well.

The Chancellor would have us believe that there is a simple choice between the NHS and a US-style insurance model. That is a completely bogus argument. A whole range of systems of funding and structure shares this country's values of availability to all, irrespective of ability to pay, and delivers to poor and vulnerable people better quality health care than those groups receive in Britain. Just to set the record straight with the Secretary of State, I spent part of my time as a medical student studying in the United States, and I do not find the United States an attractive alternative model for health care in the United Kingdom. I believe, however, that the experiences of a number of other countries could lead to improvement here.

Those arguments are for another time, however. Today, we are discussing the Government's plans for our NHS in the Budget and the reform package. It is the beginning of

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their sixth year in office. We ask whether they offer real hope of improvement or whether, in the Chancellor's terms, the scale of reform matches the scale of his tax and spending plans.

Andy Burnham (Leigh): The hon. Gentleman says that he has an open mind on the future financing of health care, but is there not mounting evidence that he has, in fact, made up his mind? I refer to a message sent to me by the NHS Confederation about a conference that the Conservative party held. It states:

Has not the hon. Gentleman made up his mind?

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