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Phil Hope: Does my hon. Friend agree that what the Tories are doing is not an accident, but part of a carefully laid out strategy? They are running down the national health service to try to convince people that it does not work. Once they have done that, they can say that they have an alternative—that is, to charge people and force them into private health insurance. Their strategy is aimed at the eventual privatisation of the NHS, and we should reject it absolutely.

Vernon Coaker: I thank my hon. Friend for that important point. Every time we see a Conservative spokesman on television or hear one on the radio, they simply rubbish what is happening in the NHS. When I speak to people who work for the NHS, they say that although there are real problems, we should recognise progress where it exists. We all have people in our constituencies who come to us to complain that they are waiting too long for an operation, there are not enough consultants, the buildings they have to visit are too old, there is not enough of this or that, or that a certain drug is not available. There are real problems and challenges still to be met, but we should reiterate that progress has been made. The solution outlined by my right hon. Friend the Chief Secretary at the beginning of the debate—to increase investment in the NHS through the rise in national insurance contributions in the Bill—is the fair and equitable way to rebuild the NHS and to respond to the difficulties that people describe to us.

We agree with the Wanless report that general taxation is the best way to achieve that. It is the fairest and most equitable system that we have, but it has been rejected by the Tories—they want more private medical insurance or social insurance, which are more inequitable and costly. My right hon. Friend quoted figures on the social insurance systems in France, where employers pay on average some £60 a week towards health care for an employee on average earnings, and in Germany, where employers pay on average £30 a week. We heard about the United States, where family premiums for private insurance average £100 a week and are set to rise on average by £13 a week.

Those are the choices that confront us. It is perfectly reasonable for people to say that we should fund the health service through private health insurance or social insurance, but I am proud that we have rejected those options and said that we want improvements in the NHS to be paid for through increases in general taxation and national insurance. That is because we believe that that ensures equitable access to treatment, that it is the fairest means possible, and that it remains true to the original principles of the national health service.

Mr. Maples: I share the hon. Gentleman's allegiance to the principle of care being free at the point of use, but I want to ask him the question that the Chief Secretary failed to answer. The national health service may be a far better way to fund health care than either social insurance

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or health maintenance organisations—the main component in the United States—but the hon. Gentleman cannot quote figures that hide what is being paid here. When we are spending £100 billion a year on the health service, the average family of four will pay £7,500 a year in tax towards it. That may be good value, but he should not pretend that it is cheaper than what people pay in France, Germany or the United States, because it is not.

Vernon Coaker: With respect to the hon. Gentleman, he will have to put those arguments to the electorate. My argument will be that general taxation is the fairest and most equitable way of funding improvements to the NHS and of ensuring that we have the standards that we want. I am happy to present that argument to the electorate, as are my hon. Friends.

The rise in national insurance contributions is paying for improvements. We all remember what happened under the Conservatives between 1979 and 1997, when national insurance rose from 6.5 per cent. to 10 per cent. without any corresponding improvements in the social wage. Our increase will lead to improvements in the NHS, with a £2.7 billion package for the low paid through a new tax credits system. The 1 per cent. rise that continues above the upper earnings limit ensures that the contribution increase is progressive. That is what people want—a fair and progressive way of raising the additional funds that are needed, then invested, in their health service.

Alongside that investment people want reform, and I am pleased that that will happen. There will be more beds, new buildings, increases in social services spending and structural change. I remind my right hon. and hon. Friends on the Front Bench that although we must ensure that patients are given more choice, that should be based on quality, not price competition.

The new health inspectorate, the Commission for Health Care Audit and Inspection, is important. It will not only audit the use of the new money, but consider private sector quality. More co-operation with the private sector is another important aspect of reform.

Mr. Bercow: I always enjoy listening to the hon. Gentleman, because he is decent, sincere and well informed. I know that he is a Nottinghamshire, not a Scottish, Member, but may I nevertheless ask him this question? Why has Scotland experienced, throughout the same periods, both a real terms rise in health spending of 28 per cent. and an increase in the average waiting time for an out-patient appointment of 25 per cent.?

Vernon Coaker: The hon. Gentleman makes a mistake about the argument being for either resources or reform—it has to be for both, as we propose. We believe that increased investment and reform together will lead to shorter waiting times and a whole range of improvements in our national health service.

The country has faced a choice between publicly funding improvements to our national health service through higher taxation and taking the route of more private money. For many years, I stood for election calling for increased taxes to pay for improved public services. Then, I lost that argument. Now, thankfully, we are winning it. I am proud to be part of a Government who are increasing taxes to improve our public services. Reform must take place alongside that investment.

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The Bill will go a long way towards ensuring that we have the funds and resources to provide the national health service that we need for the 21st century.

6.29 pm

Dr. Evan Harris (Oxford, West and Abingdon): The shadow Chief Secretary is right that much has been said about the subject of the debate—for example, by him, the Chancellor and my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), who is giving me a chance to get my teeth into Government health policy this afternoon. I am pleased to see him in his place.

Several matters have not been tackled, and I hope to cover them this afternoon. It is important to emphasise that Liberal Democrats welcome the additional resources for which the Bill provides, and we will vote for the measure. After all, we called for the resources in the first place, not shortly before the Budget, and not one, two, three or four years before it but five years ago. We called for additional resources from general taxation to save the national health service. The Government made the same commitment in 1997, but without the resources to go with it. Year after year, we called for the very aspect of the Budget that is so popular with electors: increased revenue from fair taxes. Although I do not believe that the Government have gone far enough, the taxes should be as fair as possible in order to pay for the health service.

We welcome the resources, but we have several anxieties and criticisms. The measure is five years too late, and it came as a surprise to those who listened to the Labour party before the election. It said that taxes, which by implication included national insurance contributions, would not go up. Such behaviour damages the integrity of politics, because politicians should be honest with the electorate.

The Chief Secretary has stayed to hear my contribution, and I invite him to admit that, before the election, he did not predict that national insurance contributions would increase significantly. I give him the opportunity to say that he had no idea that that would happen or, alternatively, that he realised that national insurance contributions would rise, but did not believe that it was worth making that explicit to the electorate.

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

Dr. Harris: I was hoping that the Chief Secretary would reply, but I shall give way to a fine substitute.

Mr. Bryant: I am glad that I will do. Does not the hon. Gentleman remember last year's general election campaign? The subject was extensively discussed; many journalists pushed the Chancellor and tried to get him to make specific commitments on the upper earnings limit and various other aspects of national insurance. My right hon. Friend pointedly refused to do so.

Dr. Harris: The Chancellor pointedly refused to say that there was a good chance that national insurance would have to rise significantly shortly after the election. But it is in fact a popular act, and yet refusing to be honest with people before an election is destructive to the electoral process. I shall revert to that briefly later.

The measure is not as progressive as it would be if income tax were used. The 1 per cent. increase in employers' national insurance contributions is a stealth

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tax, which can represent a significant burden on industry and have an impact on job creation. To some extent, it is self-defeating because organisations such as local government, for which some of the money is intended, will lose through having to pay employers' national insurance contributions. I shall consider exactly how much money should be spent on local government later.


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