National Health Service: Sustainability

Lord Fowler Excerpts

Thursday 9th July 2015 Lords Chamber

[Lord Fowler (Con)]

My Lords, first, I congratulate most sincerely the noble Lord, Lord Patel, on his speech and on the debate. He talked about exactly the kind of issues that we should be talking about, and which the public generally should be talking about. As he might imagine, what he said about a commission was music to my ears. We should take note of what he also said about the financial problems in the NHS, which are endemic.

It is spending not just today about which we should be concerned—although I congratulate the Chancellor of the Exchequer on the resources he has made available—but spending in the future. For far too long, there has been a political preoccupation with structures and organisations to the extent that today there cannot be one person in 100 who could say how the National Health Service is actually organised. That includes quite a number of people working in the health service.

I hope that the debate can now change and tackle the obvious problems that we face. The principal one is clear. We all want a health service free at the point of delivery so that people are not denied healthcare because of a lack of income. That is basic. However, we also know that the costs of the health service are increasing because of medical advance, rising expectations and an increasing elderly population. The question is: how can we finance this increasing demand? That is an appropriate question on the day after the Budget. It is also appropriate because it seems to me that the dangers are clear. We are funding health through general taxation but what is crystal clear is the pressure on public spending. That pressure will continue. At the same time we find that large areas of public spending are exempt from economies and reductions. Health, of course, is one of those and 60% of social security spending is another.

The Government are forced to look at the areas not protected for reductions, such as the 40% of the social security budget. It is for such reasons that they are driven into eccentric policies, such as putting the costs of the over-75s television licence fee on to the BBC. I say “eccentric” although I could put it rather higher than that—I might on Tuesday when we debate this issue. The fact that the Government are driven to such policies shows just how uncertain the position is. It raises the question of whether public spending will be sufficient to meet the emerging needs in the long term, and whether we can keep going on the same basis and keep going back to the same departments to make economies.

I raised that issue in the Queen’s speech debate, but received what I term a dusty ministerial reply from the first Conservative Government for nearly 20 years, which was that Derek Wanless had gone into all these issues a few years ago. I find it slightly odd that the Government should rely on a report commissioned by Gordon Brown, published in 2002 and prepared by Derek Wanless and the health trends review team of Her Majesty’s Treasury. It is particularly odd when you consider that the report looked at the resources required, but said quite explicitly:

“Its remit was not to look at how those resources should be financed”.

It also said that there should be further and regular reviews.

To my mind—and I very much echo what the noble Lord, Lord Patel, said—what is required at the start of the new Parliament is a thorough, independent and authoritative review of the financial pressures that the health service will come under, and at the same time to set out the options for financing healthcare. We may find that funding it out of general taxation is the best and most cost-effective method—I certainly argued that it was a cost-effective service when I was Secretary of State—but we cannot have a sensible debate on the way forward without examining the other issues. We could have a ring-fenced health tax, or look at a potential system of health insurance. We should explore the part that charges could play: I always found it extraordinary that, for example, prescription charges caused so much upset, given that about 70% were prescribed absolutely free. We should look at economies that can be made in the drugs bill and a whole range of other things.

These are difficult questions, particularly given how health is exploited as a political issue—any change is alleged to mean the destruction of the health service as we know it—but they are options that should be explored. That is why I believe that a royal commission, made up of independent members and working quite openly, would be the way forward. It would look at the resources needed to deliver a high-quality health service that is free at the point of delivery, but also examine how those resources should be financed. I am sure that many will say that this cannot be done and that it is politically too difficult. Frankly, however, we have an exceptional opportunity, at the beginning of a Parliament, to mount a thorough and open investigation into the financial pressures that the health service is and will be under and how they can be met. That would be supported by those who are concerned about not just the state of the health service today, but its future over the coming years. I very much hope that this is a challenge the Government will not duck.