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9.36 pm

John Mann (Bassetlaw): We have heard lots of bluster and a smattering of supposition from hon. Members on the usually empty Opposition Benches, but that is not surprising because they are in a quandary. Last week, I challenged the hon. Member for Aylesbury (Mr. Lidington) to ask his voters, through his website, what they thought of the NIC increases. Unfortunately, he does not appear to have done so. Let me help him out. Last Thursday, I visited Bassetlaw hospital with the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears). The hospital presented 60 staff, from consultants to cleaners, and not one of them had any opposition to paying more NICs for the NHS. My hon. Friend also asked every patient whom we saw at random in the hospital what they thought of the NHS. Every single one was positively in favour of the NHS and what the Government are doing.

I have asked several times what model is preferred. I was told repeatedly, and Hansard will show, that the American model has been discounted, which can leave only the west European high taxation model. My hon. Friend the Member for Gloucester (Mr. Dhanda) mentioned Sweden and Canada, but my example is Germany. The German model is a pluralist, corporatist and regional model. Many of the hospitals are funded by organisations. For example, the trade unions run their own hospitals through the Workers' Welfare Agency—the Arbeiterwohlfahrt—as do the Lutheran church and the Roman Catholic Caritas agency.

If the Opposition have discounted the American model and the British model, do they prefer the German model? If so, which trade union will they invite to run the hospitals? Will they be honest and tell people that is what will happen? In fact, in the German model, health care funding is overseen at the regional level by the trade unions and the employers. One similarity between Germany and the US is collective bargaining. Some 99 per cent. of large employers in the US which run an insurance scheme have collective bargaining. The Teamsters in Ohio have five separate schemes that they attempt to negotiate with their members' employers. That is why the employer cost is higher. The employer cost in Germany is also higher, thanks to the system built up since the war and first created by Bismark. The trade unions are a full part of that system. Social insurance costs employers in Germany three times more than employers in the UK, and it costs employers in France six times more.

I am not sure what Baroness Thatcher would make of the Conservatives' move towards the social partnership model, but if they discount the model of the NHS and the model of privatisation in the US with its collective bargaining, that leaves only the high-tax Swedish model

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or the decentralised German model. It is make-your- mind-up time. Perhaps the Conservatives' spokesman will tell us when he winds up which one they are plumping for.

9.39 pm

Mr. Christopher Chope (Christchurch): Three things have been established during the debate: first, the Government have broken their promises; secondly, there will be damaging tax rises for employees, the self-employed and employers; and thirdly, there is no evidence that concrete improvements will flow as a result of the additional expenditure—any more than there was on any previous occasion.

The Government are always talking about extra concrete improvements as the return for extra concrete investment. On 24 June 1999, the then Chief Secretary to the Treasury—the present Secretary of State for Health—stated:

Those concrete improvements have not been delivered, yet the Government are talking about massive extra investment with no guarantee that we shall get the reforms.

Let me dwell on those broken promises—a serious issue. During the—

Phil Hope: The hon. Gentleman is running down the NHS.

Mr. Chope: That is exactly what the hon. Gentleman and his party did while we were in government—they ran down the NHS and tried to undermine confidence in it.

During the last general election campaign, the Chancellor of the Exchequer was repeatedly questioned as to whether Labour intended to raise the national insurance ceiling. His spin doctors briefed journalists in a dishonest way. On the BBC 6 o'clock news bulletin on 22 May 2001, Mark Mardell said:

At that time, no one was much closer to the Chancellor of the Exchequer than the Chief Secretary. Earlier in the debate, the hon. Member for Oxford, West and Abingdon (Dr. Harris) challenged the Chief Secretary to deny that he knew a year ago that national insurance would have to be raised.

Mr. Andrew Smith: I had no such knowledge.

Mr. Chope: It is a pity that the right hon. Gentleman did not say that earlier. I am glad we have pressed him into saying it now. Perhaps it shows that he is not as close to the Chancellor as he thought.

Dr. Evan Harris: Does the hon. Gentleman find it surprising that the Treasury No. 2 could not foresee such

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a huge increase in taxation and NHS spending six months or a year before it happened? One would have thought that the Treasury team would be capable of predicting that.

Mr. Chope: I agree with the hon. Gentleman; many people would think that surprising, but our experience teaches us otherwise.

We shall continue repeating the comments of the Secretary of State for Trade and Industry on the "Powerhouse" programme on 29 May 2001. She said:

This is the fourth debate on the national insurance changes since the Budget, but the Government have still not apologised for having blatantly misled the electorate on the issue.

Let me conclude my account of the broken promises by referring to the Prime Minister's words in Mr. Desmond's Daily Express. The right hon. Gentleman said that the Government had not "the slightest intention" of hammering people on £30,000 and £35,000 and the higher income brackets. Of course, if we consider the Prime Minister's words carefully, we realise that when he said that they had not slightest intention, that left the way open for them to have the greatest intention. That is an example of the way the Government use words to deceive the electorate. It is no surprise that the leading article in The Economist, referred to by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley), attacked the brazen claim that the Government had not broken any promises in the Budget.

A more important consideration for some people is whether extra employers' national insurance contributions will damage industry. On 6 October 1999, the Government's response to the Select Committee on Trade and Industry stated:

That is what the Government were saying in 1999. By the Government's logic, therefore, the Bill will add to the cost of labour and discourage employment opportunities throughout the economy. That is endorsed by businesses large and small.

Mr. Anthony Goldstone, who was quoted selectively by the Chief Secretary in his opening remarks, said at the British Chambers of Commerce conference:

That will have severe implications for the public sector as well. It is interesting that the Treasury is going back on what Lord McIntosh of Haringey said in another place:

He also said that

Those figures now seem to be disputed by the Government's spokesmen, but that was what was said immediately after the Budget.

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Are these national insurance increases necessary? The hon. Member for Strathkelvin and Bearsden (Mr. Lyons) said that they were particularly fair because they were going to the NHS. He and his constituents are the victims of a massive confidence trick. If one looks at the Red Book and the Budget in detail, one sees that they add £4 billion to departmental expenditure limits for next year, £2.4 billion of which has been immediately allocated to United Kingdom health spending and £0.4 billion to personal social services. That adds up to £2.8 billion extra next year for the health service. The additional national insurance contributions, however, will yield £7.9 billion, and freezing income tax, personal allowances and national insurance thresholds will yield a further £700 million, which is again justified on the basis that it is needed for the NHS. Last week, in winding up the debate on North sea taxation, the Economic Secretary justified the £450 million taxation increase on North sea producers on the basis that it would be

If we add that yield of £450 million to the total, we are talking about tax increases of £9 billion next year, only £2.8 billion of which is necessary for the national health service.

This is a massive confidence trick. Like a child who says, "I'd like some more pocket money to spend on books, Daddy", and then spends it on sweets, the Government are saying to the taxpayers of this country, "Please pay up because we're going to spend it all on the NHS", whereas they are going to spend a heck of a lot on dealing with the waste already incurred in other Departments.

We have debated whether we will be able to achieve proper improvements in the NHS as a result of this expenditure. Nobody was able to show any evidence of improvements in the NHS as a result of increasing expenditure from 6.7 to 7.7 per cent. of GDP. Nobody was able to answer the question: why are a record 250,000 people paying for their own treatment? In many respects, performance is deteriorating. That is confirmed by the King's Fund five-year health check. Under the NHS plan, there were targets for July 2000 that no one should wait more than six months for in-patient treatment. By December last year, 277,500 people were waiting, which was more than in March 2001. Similarly, in July 2000, the NHS plan set a target for attainment by March 2002. No one was to wait more than 26 weeks for an out-patient appointment, but we now know that, by December 2001, the figure was 84,300 and higher than it had been in March 2001. That shows that performance is moving away from the targets that have been set and that bad performance is continuing with impunity, as far as the Government are concerned.

People have spoken in the debate of what things were like under the Conservatives. At least under the Conservatives, 89 per cent. of accident and emergency patients were admitted within four hours. By 2000, the figure had dropped to 76 per cent. So the proportion of accident and emergency patients not admitted within four hours has more than doubled under this Government. In 1996, 73 out of every 100 patients were seen by a doctor within one hour. In 2000, only 53.5 patients in 100 were seen by a doctor within an hour. Again, that is a manifest deterioration in the quality of service. The Audit Commission has said that there appears to be no link between work load and the speed of treatment.

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Since 1996, there has been a drop of 49,700 in the number of places for long-stay residential care for the elderly and the disabled, and a host of care homes have closed as a result. In 1997, 50,505 operations were cancelled but, in 2001, 77,818 operations were cancelled. In 1996, there were 30,000 fewer administrators than now, but there were 13,000 more beds. Is it surprising that an increasing number of people say, "Bring back the Conservatives"? We know how to administer the health service.

My hon. Friends the hon. Members for Stratford-on-Avon (Mr. Maples) and for Leominster (Mr. Wiggin) drew attention to what has been happening in Scotland. Of course, as people know, expenditure on health in Scotland is extremely high compared with in England. In 1999, NHS spending per head in England was £740; in Wales, it was £822; and, in Scotland, it was £904.

Before Labour Members troop into the Lobby to support the Government, they should be reminded of an interesting article that appeared in Public Finance on 29 March this year. It said that

That is what is happening in Scotland, and that is what will happen in England if we have more expenditure without reforms.

The Government have been presiding over an NHS that is riddled with fraud and waste—[Hon. Members: "Oh!"] We want a better system. Labour Members seem surprised. The amount of fraud was revealed by a senior civil servant, Stuart Emslie, who estimates that of the £54 billion annual budget of the health service in England, between £7 billion and £10 billion has been lost through waste and fraud.

The Labour party is not interested as long as it can carry on taxing. That is the difference between Labour and the Conservatives. We believe in getting value for taxpayers' money, and that is why we will oppose the Bill until we see reforms.

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