Department of Health and Social Care

Caroline Johnson Excerpts

Wednesday 5th March 2025 Commons Chamber

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

I draw right hon. and hon. Members’ attention to my entry in the Register of Members’ Financial Interests, as I am a consultant paediatrician. I congratulate my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown) on securing this important debate on the finances of the NHS.

Labour said that it had a plan to reform and improve our NHS. Unfortunately, it has become clear from the series of consultations—on the NHS plan, the 10-year plan, the patient safety review, leading the NHS and the independent commission to transform social care, to name just a few that are in progress—that Labour did not have a plan, other than to get into power and then consider what its plan should be. As my hon. Friend the Member for North Cotswolds has said, we need improvements in productivity, technology and long-term investment. I completely agree, and as a medic I could give many examples of wasteful spending, especially in relation to paperwork and increasingly inflexible guidance and procedures that are well-meaning but often unhelpful.

There is general talk of productivity improvements from Government Members, but few specifics. I would be grateful if the Minister could provide any specifics in her closing remarks, but let us see what the Government have said and done so far. In the autumn Budget, the Chancellor announced that overall NHS funding would be increased by £22.6 billion over two years—for this year, that is £10.6 billion. The Government are asking us to welcome that extra money. It sounds great, but is it extra or not?

Julian Kelly, NHS England’s chief financial officer, told the Health and Social Care Committee that the proposed 2.8% pay rise for 2025-26 would cost £3.8 billion. The NICs pressure is worth around £1.7 billion, alongside £1.9 billion in non-pay inflation, £0.8 billion for the GP settlement and £3.5 billion for basic demand growth in the NHS. Right hon. and hon. Members will note that those figures add up to more than £10.6 billion, and with the unions having threatened to strike again for even greater pay awards and with Labour’s propensity to capitulate to the unions, it is likely that that figure will increase. Can the Minister confirm whether the £10.6 billion that Labour talks about will really lead to an improvement in services, or will it merely cover inflation, tax rises and the pay rises given by the Labour Government to their union paymasters?

[Several hon. Members rose—]

[Dr Johnson]

I will give way in a moment; let us first look further at those tax rises. It is clear that the Chancellor had not properly considered the effects of the NICs rise on the wider healthcare system. For example, the Government have exempted the NHS from that tax rise, but that exemption does not cover general practice, hospices, charities, many social care providers—including many care homes—air ambulance charities, dental clinics, opticians, private healthcare providers, agency staff, local pharmacies and other suppliers and contractors, to name but a few.

[Alex McIntyre]

I am sure that the shadow Minister is about to come on to this in her speech, but given that she has just criticised this Government for lacking a plan —a plan that is about to come forward to the House later this year—surely she will now put forward her plan for how much extra the Conservatives propose to put forward for the NHS and how they would pay for it, and explain why they did not do that for the past 14 years.

[Dr Johnson]

If the hon. Gentleman looks back at the figures, he will see that there has been a substantial real-terms increase in NHS funding over the past 14 years. That cannot be said for this year, potentially, which is why I am asking the question.

[Mr Betts]

Perhaps I will ask the shadow Minister an easier question, then. She has just rejected the pay deals that this Government have agreed to give a proper reward to our nurses and doctors. By how much does she think that pay deal should be reduced to bring it in line with her policy? If she is opposed to the deal that has been agreed, she must have an alternative in mind.

[Dr Johnson]

One of the key things about the Government’s deal is that they have given in on money without asking for anything in return in terms of productivity. The Government needed to agree a pay deal that was sensible and affordable, not talk about the money that they are giving to the NHS while taking away with the other hand in taxes.

Let us hear what some healthcare providers have had to say about the implications of Labour’s NICs rises for their constituents’ healthcare. The Royal College of General Practitioners has warned that the NICs increase will force GP practices to choose between redundancies and closure. The hospice sector believes that the cost of national insurance rises could be £30 million a year. The Government have given that sector a capital grant worth £100 million, which is welcome and will improve facilities; however, if those facilities are empty and cannot be staffed, they will not deliver much in the way of improvement. Air ambulances are also under threat from the Chancellor’s rise in national insurance and taxes in last year’s autumn Budget, with the local service in my constituency, Lincolnshire and Nottinghamshire air ambulance—which is entirely charitably funded—needing to find another £70,000 just to pay for those national insurance rises.

The Independent Pharmacies Association estimates that the rises in employer national insurance contributions and the minimum wage will cost the average pharmacy over £12,000 a year, totalling more than £125 million for the sector as a whole. Nick Kaye, chairman of the National Pharmacy Association, has warned that

“Pharmacies face a financial cliff edge at the beginning of April, with a triple whammy of rising National Insurance, National Living Wage, and business rates all arriving at once.”

What impact will this have on our constituents’ health? The Government talk a good talk about bringing healthcare closer to the community, but actions speak louder than words, and putting extra pressure on community-delivered services is not a good way of delivering their aims.

The Nuffield Trust suggests that the national insurance rise alone will add a £900 million burden to the adult social care sector. With other new costs factored in, the care sector is believed to be facing a bill of an additional £2.8 billion, dwarfing the £600 million extra allocated to the local authorities responsible for providing social care. This will have a devastating knock-on effect: the amount of care that can be bought by local authorities will fall, the cost of private care will rise—so more people will be reliant on the state, rather than the private sector—and the waiting lists that the Government claim to prioritise will also rise. The Nuffield Trust warns that many small care providers will either have to increase prices, stop accepting council-funded patients, or go bust.

That will have a knock-on effect on the hospital sector, as people are unable to be discharged because there is not adequate social care for them. The Government talk about creating a new national care service, but they have managed to damage the existing one by hiking the costs borne by care homes through national insurance rises and other tax and wage increases.

In January, the Government announced a deal with private hospitals in an attempt to cut waiting lists. The deal, which sounded good to start with, would see private hospitals being paid for each patient that they treated, incentivising them to treat as many people as possible. However, The Times reported that NHS England has recently capped the amount that each hospital can be paid. The chief executive of the Independent Healthcare Providers Network has warned that the policy will actually lengthen waiting times. Will the Minister comment on that?

The Minister is focused on prevention, but when the Government announced that they would be cutting the overseas development aid budget by 40%, the Prime Minister said that the UK would continue to play a key humanitarian role on a range of issues, including global health and challenges such as vaccination. I would appreciate clarification from the Minister on whether the global health budget will be cut, or whether the cuts will be made from other aspects of the ODA budget.

Workforce is the key asset of the NHS, yet sickness levels are running at around 5.5%, which is a considerable cost to Government and drag on productivity. They vary considerably across trusts and professions, with consistently less than 2% of consultants off sick, but almost 8% of ambulance support staff. If those rates could be reduced, it would lead to improved productivity and patients being treated much faster. What is the Minister doing to look at that? Perhaps she will have another one of her reviews.

[Josh Fenton-Glynn]

The hon. Member has frequently been quick to criticise NHS pay rises. Will there be more or fewer sickness absences in the ambulance service if its staff are better paid?

[Dr Johnson]

Is the hon. Gentleman suggesting that whether someone becomes ill is entirely dependent on whether they get another 2% in their pay packet? I am not sure that it is.

The Government promised a great deal when they came into power last July. Since then, they have handed out inflation-busting pay rises, raised costs and abandoned election pledges. At the centre of the Government’s approach is a classic socialist trick—a sleight of hand, taking money away from NHS providers in taxes with one hand, and expecting praise when they give some of it back with the other. The public will see straight through it.