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5 pm

Matthew Taylor (Truro and St. Austell): The House's formal debate on the Budget has almost come to an end, but I suspect that the debate outside—on the health service above all, but also on the Government's entire approach to public services since taking office, including the decisive change in the funding of those services—is in many senses only just beginning. We welcome that change, which we called for, but so far as the equivalent of a penny extra on national insurance is concerned, I am tempted to say that that was the longest wait to spend a penny in history.

The Budget is decisive for another reason: it has finally forced into the open the floundering position of the Conservative party and its attitude towards the national health service. We now know that it is a party with no arguments—a criticism that the hon. Member for Woodspring (Dr. Fox) levelled at the Government a moment ago. Of course, the Conservatives know only what they do not like, and they do not like the national health service. They cannot offer an alternative, yet they oppose the funding that would tackle the problems that patients face, while asking us to wait until who knows when for them to offer a solution.

Chris Grayling: Does the hon. Gentleman share my desire for a health care system that works and that has no

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waiting lists, as in virtually every other European country? After a decade in which Conservative and Labour Governments have poured money into the national health service with few measurable results, is it not appropriate to consider whether lessons can be learned from methods used elsewhere?

Matthew Taylor: The hon. Gentleman should take a moment to consider the number of doctors and nurses available to the public in every other European country, and spending on their health systems. Various systems all have in common much greater investment and many more staff, which result in much better outcomes. At the front line, it does not matter whether doctors are paid for through a private health scheme, a social insurance scheme or national taxation, provided that they are available to patients. Under private insurance schemes, doctors are too often unavailable because patients do not have such insurance and cannot afford to pay. Under social insurance schemes, patients can be asked to pay more than they would pay under a national health system, or to make a direct cash contribution to treatment by their GP. In other words, such a scheme is less fair, more expensive and does not of itself deliver better care—unless one pays the staff to do the job.

Mrs. Browning: During the Budget debate and in the media, the Liberal Democrat spokesman on trade and industry has opposed the 1 per cent. employers' national insurance increase. Will the Liberal Democrats vote for that tax tonight?

Matthew Taylor: If the hon. Lady casts a glance at the Order Paper, she will discover that there is no such vote tonight, so the answer is that we shall not vote on it and nor will she. I shall deal with the issue that she raises in a few moments, which prompts me to move on a little.

Mr. Barker: Will the hon. Gentleman give way?

Matthew Taylor: I shall give way later, but I want to make progress. I did hope that, in giving way to Conservative Members, we might hear about their alternative proposal, but of course, they do not know what it is. They know only that they oppose the NHS, and no one will grant them credibility while that is so. Worse still, they are asking for no extra resources for the NHS—for the patients who need treatment today and tomorrow—because they believe that an alternative will come to them in a flash of intuition just before the next general election.

Mr. Barker: Will the hon. Gentleman give way?

Matthew Taylor: I told the hon. Gentleman that I want to make some progress.

The first test that we set for the Budget was the test of whether the Government would at last start to tackle underinvestment and underspending—a word that I want to reintroduce to the House. Matthew Parris sadly no longer writes his column in The Times, but he rightly said that the word "spending" has disappeared, and I want to use that proper word. We know that the Government have not been delivering on long-term capital investment. It does not suit the Conservative party to say that, so it does not expose the Labour Government's failure, which leaves them free to get away with cuts in investment.

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The real figures show that public sector net investment from 1992 to 1997 was on average 1.5 per cent. of national income. Under five years of Labour, it has fallen to less than half that. That is why there is not enough investment in public services. In every year since 1997, public sector net investment has been lower than it was in 1995. Only in 2006–07 will it reach the same proportion of gross domestic product as in 1992–93. That is why public services are crumbling.

The Conservatives argue that there has been investment in public services, but that chucking money at the problem has not succeeded. The truth is that no money has been chucked at it, and this Government's record is even worse than that of the Conservative Government.

I want to deal also with spending and the direct day-to-day costs of investment in staff—the teachers, doctors and nurses who have to deliver the service. It is true that tax has risen as a proportion of GDP since 1997, but in 2000–01 total spending as a proportion of national income was lower than in any year of Tory Government between 1979 and 1997. That is true even if we strip out debt and social security. The Government argue that we are paying less on debt and unemployment, but that is not the answer. Labour chose to follow Conservative cuts in the early years, and the later spending increases did nothing to balance that out. At first they were mythical, and even when they eventually arrived they were so late that they were hardly in time for the general election campaign.

Linda Gilroy: Does the hon. Gentleman believe that the Peninsula medical school, which is about to open its doors to its first students from Plymouth, Devon and Cornwall this September, would have been built had the Tories remained in power? Will he acknowledge the fact that such significant ventures are under way in the south-west peninsula?

Matthew Taylor: The hon. Lady argues that the position would have been worse under the Conservatives, and I am sure that it would have been. I doubt that the Conservatives would have reversed the cuts, as Labour started to do at the end of the last Parliament.

Mr. Edward Davey (Kingston and Surbiton): Two wrongs do not make a right.

Matthew Taylor: As my hon. Friend says, two wrongs do not make a right.

The biggest problem identified in the Wanless report is the growing gap between the number of doctors who will be in place and the number that we need. That gap will grow even after the late investment that Labour has made in training more doctors. That investment should have been made when Labour first came to office. I suspect that the hon. Lady agrees with me, and would have liked the Government to have taken those decisions five years ago. Many Labour Back Benchers wanted them to do that.

Linda Gilroy: Will the hon. Gentleman give way again?

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Matthew Taylor: I want to move on, and the hon. Lady may find that I will answer her point. Many Labour Members privately agree with us that the Government's greatest error was to fail to make that investment early on.

Mr. Tom Levitt (High Peak): Will the hon. Gentleman give way?

Matthew Taylor: I shall move on, and then I shall take some more interventions.

Average spending on pensioners was 4.4 per cent. of GDP between 1992 and 1997, but that has fallen under Labour to 4.3 per cent. for the period to 2003–04. Labour's pension credit, which it says is designed to relieve pensioner poverty, has an outstanding problem. The Chancellor, who likes to complicate the tax system, has delivered a change for pensioners that, sadly, will—like so much else that Labour has done—leave without many people whom the Government acknowledge are needy. On the Government's own figures, one in three of those entitled to the pension credit will not find their way through the complicated forms. Indeed, pensioners do not want to be seen to claim benefits to get the money that they need. The fact is that the Government have introduced a system that will means-test millions, but leave some 1.5 million people who are entitled to that pensioner support without it.

Average health spending between 1992 and 1997, when we, like many Labour Back Benchers, campaigned for change and the investment that the health service so obviously and badly needed, was 5.4 per cent. of GDP. In 1997, it was cut, and only after 1999–2000 did it begin to exceed the Conservative averages. Again, the cuts took years to retrieve—years in which patients suffered, doctors were not trained, the number of beds fell and hospitals closed. Exactly the same can be said of education. Average spending between 1992 and 1997 was 5 per cent. of GDP. Under Labour, all the way forward to 2003–04, it still averages only 4.8 per cent.

The fact is that Labour failed to invest. Now we come to the excuse, which we heard from the Secretary of State, "Oh, we had to balance the economy. We inherited an economy with huge deficits and problems." That is true. Taxes rose and spending did not, because Labour spent most of that money on clearing the deficit—the £20 billion every year that the Conservatives spent but did not pay for through taxes. In that process, the Conservatives were, of course, wrecking the economy in the long run. Labour may have put that right, but because it allowed itself no tax rises for health or education, it left health and education cuts in place.

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