Health and Social Care in England

Lord Desai Excerpts

Thursday 11th July 2013 Lords Chamber

[Lord Desai]

My Lords, I, too, thank my noble friend Lord Patel for initiating this debate. We have heard many innovative speeches already. I think I am the only professional economist speaking in this debate so I had better stick to economics.

First, all projections for 10 years’ time should be ignored. If you predicted backwards, you would find that you were spending negative sums of money 30 years ago. NHS growth has been very uneven. The NHS grew from 3.5% of GDP to 4.5% over 30 years and then from 4.5% to 9% in 20 years, the fastest growth being since 1997. We have been accelerating growth and we did that because of the determination of the Labour Government to increase the proportion of GDP spent on health. There was a target and that target was achieved. GDP growth was good at that time. GDP growth will not resume at anything like the level we had up to 2007. We will have much slower GDP growth with much more attention paid to reducing the size of the state’s share in total spending. We spend up to 48% now and we are going to reduce that to 44% by 2017, but once upon a time we spent only 36%. We will have to reduce it to something like that, and within that smaller share we will have to find money for the NHS. Productivity will have to grow. I must disagree with my noble friend Lord Turnberg. Productivity did not grow between 1997 and 2010. As the King’s Fund report shows, it fell by minus 0.2% per year. Between 2011 and 2015, it will grow by 5%. That is not my number; it is the King’s Fund’s number.

What is to be done? The first thing has to do with universality, which is one characteristic. The noble Baroness, Lady Boothroyd, was quite right. How do we ration this to only people who are entitled? When I arrived in 1965 I was given a card by the NHS with my number on it and I was told I had to show it. Nobody has ever asked me for the card. Why can we not have that very simple thing? The Labour Party abandoned the idea of an identity card. It would be very simple to have our NHS number, which exists somewhere in the ether, and to be asked to show it whenever we go to the doctor. That would sort out the tourists from the citizens. That is one thing.

Secondly, we have to make people aware of what they are getting. My biggest worry about the NHS is that people are not aware of how much they are costing the organisation. If we are spending, say, £2,000 per capita, give everyone something like an airline loyalty card containing 2,000 points and say, “These are your points for this year”. Every time you used the NHS, you would be shown how many points had been deducted. If you missed a GP appointment, it would cost you twice as much as going to that appointment. No one would need to pay anything, but this would make people aware that there are costs for what they do. As people in middle age typically will not need treatment, they would accumulate points over a lifetime so that they could finally spend those points when they needed them. You could have a lifetime budget of shadow points. This would be very good for people. Since I do not have much more time to speak, I think I can sit down.