Finance Bill

Andrew Gwynne Excerpts

Tuesday 28th June 2011 Commons Chamber

[Frank Dobson]

Yes, my hon. Friend is quite right. Government Members are obviously anticipating the expected decline in national health service output, and that decline is the reason why the national health service is going to stop collecting figures on waiting lists and waiting times. One is always rather suspicious of any organisation that collects figures and then stops. One wonders why, and the idea that those figures might be embarrassing is a good explanation.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My right hon. Friend is coming on to precisely the point that I want to make. This week, my local hospital, Tameside general hospital, announced 200 job losses among front-line staff, and its waiting times have shot through the roof. Is not this the real picture of what is happening in the national health service? If money is available, should we not be prioritising care in hospitals such as Tameside, not giving a tax hand-out to people for medical insurance?

[Frank Dobson]

I agree with my hon. Friend. I am sure that he will draw this proposition to the attention of the electors of Tameside, who are facing valuable staff being got rid of and reductions in the number of operations being carried out. I hope that he will also point out, as I did at the beginning of my short contribution, that apparently the first priority of a lot of Back-Bench Tories, who seem to represent the true core of Tory opinion, is to bung £200 million into the hands of the best-off pensioners, some of whom will not agree with it either.

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[Thomas Docherty]

Now the hon. Gentleman is shaking his head. There are many highly paid consultants who split their time between their private practice, their golf course and the national health service. The time that they spend in private practice is clearly time that is not available to the national health service.

[Andrew Gwynne]

Is this not a question of priorities? If there is a pot of money to be given away, would it not be much better to spend it on health care for the many, rather than on a tax give-away for the few?

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[Michael Connarty]

I hear my right hon. Friend say that 40 million people in the United States of America exist without adequate health care insurance or provision. A friend of mine tried to set up a dental care service in New England based on Medicare, and found that the money was not available. Many people in New England are denied any form of dental care when they end up in private nursing homes in their old age. Something is seriously wrong with that. I commend President Obama’s attempts to at least moderate that.

Let me return to the debate. People should not be deluded into thinking that the proposal will encourage more resources into the health service. It will encourage more companies to demand the services of the limited number of available surgeons to carry out operations for their private patients, instead of allowing the surgeons to do the job they should be doing. I would commend a scheme of private health care payments that provided the NHS with new equipment, doctors and other staff on top of those already trained in this country to work in the NHS.

Those who say that this proposal could do that should look at what happened with a hospital built for the private sector on the west coast of Scotland. The idea was to build a huge hospital with private money and to have people come from around the world to use it, but eventually it had to be sold to the Scottish Government when Jack McConnell was First Minister. We bought the hospital at a knock-down price because, in reality, the private sector could not generate new and fresh talent and equipment. That is not going to happen. It will just suck out resources needed by my constituents, who believe that the NHS should be paid for through taxes.

[Andrew Gwynne]

Does my hon. Friend agree that this is not about restricting choice, but about prioritising finite resources and ensuring that any available money goes into front-line NHS services, rather than into a tax giveaway to a small number of people who are already accessing private health care?

[Michael Connarty]

I could not have put it better myself—I commend my hon. Friend for helping me with his analysis.

The Labour Government were right to encourage people to provide resources that the NHS could access using taxpayers’ money where it would be more efficient. That was an excellent scheme that enabled people in my constituency to go to hospitals where beds were available over Christmas for operations that were not being done and could not be fitted into the schedules of hospitals that were short of resources. That was a good initiative, but this proposal is not; it is the opposite. It would be a damaging initiative if it encouraged people to take out private health insurance and so divert resources from the NHS, where they are needed.

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The right hon. Member for Wokingham (Mr Redwood) and others speculated that the change would save the Government money by subsidising people taking out private medical insurance, thereby reducing the take-up of NHS services. However, when the policy was last in place, that was not the case, as the King’s Fund said. I have heard nothing today to convince me that reintroducing the policy would have a different effect.

[Andrew Gwynne]

I am pleased that my hon. Friend has confirmed that those on the Labour Front Bench will oppose this measure. She is setting out the right arguments for why we should do so. Did more people not take up NHS care and treatment under the 13 years of Labour Government because of the improvements in NHS care and treatment that were achieved over the lifetime of the Labour Government?

[Kerry McCarthy]

My hon. Friend makes a good point as always. That is the crucial thing. Under the Conservative Government, the increased take-up in medical insurance from 500,000 to 600,000 did not necessarily have anything to do with the tax relief that was introduced; it happened because the NHS was in absolute crisis. Waiting lists were going through the roof under the last Conservative Government. People were terribly scared and did not feel confident that the NHS would look after them in their ill health. There were significant improvements under the Labour Government, which meant that fewer people felt the need to take out private health care.

Let me turn to the fairness argument. It remains to be seen how much the Health Secretary’s experiment through the measures in the Health and Social Care Bill—driven once again by a preoccupation with private sector involvement in health care—will eventually take from health care budgets. We know that £850 million will be spent on redundancies alone, and the estimates are that £2 billion of PCTs’ budgets are earmarked for what can only be described as—in those infamous words of the coalition agreement—a “top-down reorganisation”. Despite the Prime Minister’s promise of real-terms increases, NHS expenditure is falling in real terms. The King’s Fund has calculated that the NHS will have £910 million less to spend over the spending review period. Patients and staff know all too well that front-line services are being affected, but tax relief for private patients will not help them.

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[Mr Kevan Jones]

New clause 5 would allow married couples to transfer their personal income tax allowances between each other, along the lines of what was said by the Prime Minister and the Secretary of State for Work and Pensions during the election campaign about recognising marriage in the tax system. The new clause is not exactly what the Conservatives were proposing at the general election, and I shall deal with the differences in a while. The important point, which has not been clearly articulated by the hon. Member for Gainsborough (Mr Leigh), is that this policy arose from a 2005 report by a Conservative think-tank, the Centre for Social Justice, on the breakdown of the family. Its main argument was that marriage is the important point in keeping families together, tackling poverty and dealing with all the other arguments that he has covered. It also supported the introduction of an incentive in the tax system to encourage people to marry, and I shall return to that in a moment. I am not sure that most people who get married are thinking about the tax system before they decide to do so.

[Andrew Gwynne]

My hon. Friend makes a reasonable point and one that we were discussing on the Back Benches earlier. I am married and all three of my children attended my and Allison’s wedding in 2003. We did not need a tax allowance in order to get married—that is the important factor here that is being missed.

[Mr Jones]

I am sure that the hon. Member for Gainsborough will be shocked at the fact that my hon. Friend’s children actually attended his wedding. I did not realise that my hon. Friend was such a progressive individual, but he makes a perfectly good point.

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[Mr Jones]

They are mediaeval in some cases, as my hon. Friend mentions.

[Andrew Gwynne]

The Deputy Prime Minister did not just say that this proposal was Edwardian. I believe that he went on to say that it was also patronising drivel.

[Mr Jones]

That is a bit rich coming from the Liberal Democrats, because most of the things that they come out with are patronising drivel. However, they were clearly not happy about this policy, so in the scramble to get the red boxes and cars they had to reach some type of compromise. Thus, the coalition agreement simply states that there will be a provision whereby the Liberal Democrats can abstain at some point in the future when this policy is introduced.

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[Mr Jones]

I think that report has been discredited, but I can look at the north-east of England and my constituency and consider the changes in employment that happened under the previous Labour Government as well as the life chances we gave to individuals, the new hospitals we provided and the investment we made in things such as Sure Start centres. Although I accept that such changes will not have benefits straight away, they will have real benefits over the lifetimes of those individuals. The Government that the hon. Gentleman supports is taking away such provision and says that the state is not important in one respect while, in this case, they want the state to engineer people’s private lives socially. I find that a completely contradictory stance, but, again, the hon. Gentleman is a Conservative and is therefore allowed to be contradictory.

[Andrew Gwynne]

My hon. Friend is being generous in giving way and he is making the point that the state can be family friendly through its policies without having to give away a tax break to people based on their marital status. The previous Labour Government made great changes by giving life chances to young families, in particular, without having to manufacture the tax system in such a way.

[Mr Jones]

My hon. Friend makes a good point. A little later, I shall discuss what our Government did to recognise the fact that if we are to address the issues raised by the hon. Member for Gainsborough about child poverty, the tax system and marriage are not necessarily the way to do it. The way to do it is to ensure that the money goes to the families and children who are affected. That is why the child tax credits and other such provisions were vital in raising people out of poverty. Earlier, my hon. Friend the Member for Alyn and Deeside (Mark Tami) mentioned the minimum wage, which lifted a lot of very poor individuals out of poverty who were getting a pittance. I remember seeing as a trade union official an advertisement in the jobcentre in Newcastle that read, “Night guard, bring your own dog, £1.35 an hour.” That is a thing of the past. I hope that it will remain so, but I do not know, as we hear from Conservative Back Benchers that they might want to change the minimum wage in some way.

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[Michael Connarty]

In the contributions that I have heard via the live feed and in the Chamber, sadly there seem to have been moral overtones that echo speeches in a Victorian Parliament. If moral judgments are behind those arguments and people think that they this is a moral vote, I am quite sad about that. It might be a political strategy, however. Many political strategies were put forward by the Conservative leadership at the election, but hopefully they will not be reflected in the legislation put though this House. I hope that the contribution from the hon. Member for North Cornwall (Dan Rogerson) is more reflective of the coalition, which means that the Government will not do what the new clause proposes.

It is very important that people listening to this debate realise what the proposals are. After the advances that this country has made, in the recognition of civil partnerships, for example, this proposal is about spouses and spouses alone, not civil partners. It is attacking the progress that has been made, which is now being copied across Europe. It does not relate to people of the same gender in firm and committed relationships, which shows that it is not a forward movement at all. It is an attempt to throw out and make a moral judgment on the things that have been done by the joint agreement of this House to advance society’s value of firm and committed partnerships. That is what is important.

[Andrew Gwynne]

Will my hon. Friend give way?

[Michael Connarty]

Not yet.

It is not just a matter of putting a marriage partnership or a firm partnership ahead of any other. My hon. Friend the Member for Stretford and Urmston (Kate Green) spoke strongly and has worked hard on single parenthood, but I happen to believe, in most cases but not all, that a partnership provides a much stronger place for children to grow up in than that provided by any single person—male or female—who has to go it alone. Therefore, our society has a lot of value when we can encourage partnerships.

We still have the oddest situation in Europe—and among many other countries outside Europe—because we do not recognise de facto partnerships. De facto partnerships are not civil marriages but agreements by people without either a civil or Church marriage to remain in a relationship and to commit to themselves and to any offspring.

My son lives in Australia, and he shared a de facto partnership for a number of years, recognising that if he or his partner had died their pension would have transferred to the other. In this country I have friends who, like me and my spouse, have been together for 41 years. They have had to get married because they might be coming to the end of their lives—not for a long time, I hope—and their pensions would have died with them.

That was a moral judgment which the previous Labour Government made, and it was shameful, because we should have had civil partnerships for all who wished to have them, and we should have recognised de facto partnerships as much as same-gender partnerships. That is how we should have looked at things, but we should not give cash incentives, as the new clause seeks. Indeed, that was the contradiction in the contribution from the hon. Member for Strangford (Jim Shannon), because he said that he was not about incentivising partnerships through finances and then spoke on behalf of the new clause—which would incentivise partnerships.

[Michael Connarty]

I have a call from my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) first.

That is what is wrong with the new clause. It is about spouses, it is backward looking and moralistic and it will not help children at all. It is sad that one in five marriages breaks down and that civil partnerships break down, so we must encourage people through the way we finance them and help them to keep their relationships together, because finances as much as personal fall-outs break down relationships.

[Andrew Gwynne]

I agree wholeheartedly that families come in different shapes and sizes, and we need to respect and reflect that in public policy. Is not that why the previous Labour Government were absolutely right to target limited resources on tackling child poverty, irrespective of the child’s family background?

[Michael Connarty]

My hon. Friend has made that point before, and he puts it better than I could.

My mother, who now has sadly passed away, was soured by the Labour Government very early on when we took away the additional money for single parents. From then on, every time I went to her house on a Sunday, she would start by saying, “Welcome,” and then she would say, “You and your Tony Blair,” and for the rest of my visit berate me for what we had not got right. She was a great touchstone, however, because she saw that the defence of children and the future of children were important, not the rest.

The new clause is a backwards step, but I am hopeful that the Minister will not support it and that such legislation will never get through. It states that only marriage—not any other relationship—is good enough or as good as we would wish.

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[Andrew Gwynne]

My right hon. Friend is absolutely right to draw the House’s attention to new clause 10. All it asks for is an impact assessment of the rate of VAT on UK economic growth. Is it not the case that, since the VAT rate was increased, consumer confidence has flatlined and retail sales have fallen?

[Mr Hanson]

It is very interesting that my hon. Friend makes that point about the VAT increase, because following that reckless gamble, inflation, which was 3.1% in September, was 4.5% in April and May, hitting savings, pensions, incomes, jobs and people’s livelihoods. He will know that confidence is important and that consumer confidence is now at minus 31%. Overall confidence was three points lower in April than in March, and lower than at any time since spring 2009.

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[Nia Griffith]

I find that extraordinary, and I also find it extraordinary that the Tories seem to have so little comprehension of the impact of the increase. As I have said, many household items need to be replaced.

[Andrew Gwynne]

Is not the real purpose of new clause 10 to enable us to assess whether the impact of the VAT increase is indeed returning growth to the economy, and does not the evidence so far suggest that the economy is going into reverse as a result of the Government’s measures?

[Nia Griffith]

Absolutely. I shall say more about that shortly.

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[Nia Griffith]

I am asking about the Government’s growth strategies. I am trying to explain by giving some examples of how Governments can stimulate the economy and make a difference. They can choose to kick-start the economy or to allow it to go spiralling down and unemployment to increase. These are active choices that a Government can make. We are asking in our new clause for a proper assessment of the effect of the increase in VAT on what is happening now in the economy.

[Andrew Gwynne]

My hon. Friend has been generous in giving way. She talks about the Government’s growth strategy. It appears to me that they have neither a coherent strategy nor, apparently, growth.

[Nia Griffith]

That is precisely the problem. In spring 2010 we were beginning to come out of the recession, the economy was growing, inflation was low, and unemployment was coming down. Under Labour’s plan, the economy was set to grow strongly. In fact, as more people were getting back into work, borrowing ended up £21 billion lower last year than had been forecast.

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[Toby Perkins]

Absolutely. My hon. Friend makes an important point. The impact is being felt on the cost of everything, even items on which VAT is not charged, because businesses and members of the public are having to spend more on others items. There is the impact on fuel and heating costs and the downward pressure on wages, as we see the failure to achieve economic growth and the public sector being told that it will have no wage increases for two years and that pension contributions will increase. All those impacts are contributing to people spending more on VAT and having less money.

[Andrew Gwynne]

New clause 10 proposes an assessment of the impact of VAT on the economy, and of course we can now make a direct comparison with a fairly recent period when the previous Labour Government introduced a temporary cut in VAT and got the economy growing again. Is it not the case that we need to make that assessment so that we can see where this Government are getting it so badly wrong?

[Toby Perkins]

Absolutely. The new clause could not be more reasonable. It is impossible to imagine even having a vote on it, because I cannot see how anyone could argue against the need for an assessment when there is so little growth in our economy.