Finance (No. 2) Bill

Debate between Geraint Davies and Neil Carmichael

Wednesday 17th April 2013 Commons Chamber

[Geraint Davies]

Yes, and my hon. Friend makes an important point about the growing regional imbalance in the British economy. I realise that the Government have paid lip service to that issue, but if the only place to get a good job is London, that inflates costs, and young people come to London to live in squalid conditions in the hope that they can get the experience to go home at some point. There is a brain-drain as well, so this policy does not make any sense. One of the first things the Government did was to get rid of the regional development agencies. They said that they were no use and cost too much.

[Neil Carmichael]

rose—

[Geraint Davies]

I will give way in a moment.

I went to visit UK Trade & Investment, which has 83 offices around the world. Its mission is to market Britain for trade and inward investment. I was in its office in Dusseldorf and it told me that typically it would market Britain as a great place to come to—a low-tax, stable society with a platform into various markets, a skills base and great universities.

For example, a German distiller might come along and say that it wanted to set up a factory in Britain. That would go on to UKTI’s computer platform and the RDAs would then bid for it, saying, “We want that in Yorkshire” or “We want that in Lancashire” and setting out their case. Immediately after the RDAs were destroyed, there was a queue of companies looking to invest in Britain through UKTI, but there was no one to bid for that investment. It was crazy to destroy them, especially at a time when we want growth and regional balance.

The Government said the RDAs were too expensive, but now they ask why we have growing unemployment, zero growth and increased housing benefit costs in London. It is because rents are going up, we are not building houses and we do not have regional balance. Therefore, the amendment is partly about thinking of creative ways to move forward and engage the banking community in a sustainable growth plan that has a regional dimension.

[Geraint Davies]

I completely agree. There are clearly certain growth markets within the global market environment, and life sciences is one that is of great interest in Swansea, as are biotech and green technologies and all the rest of it. What the public sector can allow is a critical mass of research that benefits from economies of scale and a shared risk that would not be taken by individual operators, and that can attract inward investors. What we want is a benign partnership, as we have in Wales, with a Labour Government and local authorities working with universities, perhaps on a city-region basis, which is the future, to deliver benefits for all. That is what we want, rather than the laissez-faire approach.

I will have to bring my comments to a close in a moment, because obviously other Members wish to speak, but I promised first to give way to the hon. Member for Stroud (Neil Carmichael).

[Neil Carmichael]

I have listened carefully to the hon. Gentleman. Does he welcome the fact that in the long term Hitachi has invested £6 billion in some of the regions he has referred to, such as the north-east, where trains will be made, and in my area, where nuclear power stations will be built? He refers to “heavy lifting”. Does he not agree that through his industrial strategy the Secretary of State for Business, Innovation and Skills has introduced the aerospace centre, which will be a massive investment, essentially in the public sector, to promote the development of aviation? That will also be repeated for the automotive sector. That is precisely what he is talking about, so the Government are doing that already.

[Geraint Davies]

I certainly welcome those things. The trouble is that it is very much a U-turn—although that is fine. One moment the Government were withdrawing and saying, “We don’t have to do anything, because the market will spontaneously grow.” Then nothing was growing in the garden, so they go and put in some pot plants and that sort of thing, which is great. Hitachi is very welcome, and Tata has been mentioned. Some of those big companies, such as Tata, will make strategic investments, particularly because of the quality of the coal and the history of skills and the innovation, such as the partnership with Swansea university, where they are developing a new type of steel that has six layers, generates its own electricity and, when used to clad buildings, lowers the carbon footprint. It is the future.

With regard to aerospace, we of course have Airbus in Wales and, again, a supportive Welsh Government. Any support from the UK Government for strategic investment to boost our export and manufacturing base in modern and growing markets is very welcome. That is something we can certainly support. The more active the intervention from the Government with regard to an industrial strategy, the better. We want to see jobs, rather than people sitting on their hands—that is how the Government see it—and rather than watching bankers take loads of money for doing very little while people in Swansea and elsewhere who want to work are blamed for being unemployed but are not given a hand-up.

Health and Social Care Bill

Debate between Geraint Davies and Neil Carmichael

Monday 31st January 2011 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

I am glad to be called to speak at this hour, Mr Deputy Speaker. It is my joy to celebrate the achievements of the health service that was started by Nye Bevan from Wales and to celebrate the successes of the previous Government, such as the 2 million extra people a year who are now operated on, the 44,000 extra doctors and the 94,000 extra nurses. The question to ask is: why devastate and break a system that already works well?

The Bill risks stripping out the heart and mind of the NHS, in terms of equality and planning, and replacing it with a market of GP business consortia that will focus increasingly on profit maximisation through negotiation of the best prices, bulk purchasing and threatening to withdraw custom from hospitals that cannot survive without them. Huge health retailers will evolve with local monopolies over patient communities. It is all very well saying that patients will have choice, but there will be big consortia saying, “This is what is best for you—buy this”, focusing on the areas of highest profitability. Those consortia might prefer to deal in cataracts rather than, for argument’s sake, chronic conditions. They might choose to focus in certain demographic areas with different health trends. A business focus will be applied according to the returns that can be gained in different areas rather than simply focusing on what is right for each person.

[Neil Carmichael (Stroud) (Con)]

Is it not possible that doctors’ consortia will simply make the right decisions for patients, focusing on giving proper value for money and decent care and on responding properly to local requirements and needs? Would not that apply across the piste in terms of community hospitals and acute hospitals?

[Geraint Davies]

The taxpayer invests in GPs to provide medical and clinical excellence so that they can diagnose people’s health problems. The taxpayer does not invest in them to become small business people who go around trying to maximise profit and work out rates of return on different sorts of health care. That is the problem with introducing privatisation and marketisation: the thought in the back of the business person’s head is how to make money, not simply what is the best diagnosis. The customers whom GPs are facing—patients—are to a large extent ignorant. It is not like buying electricity from npower: patients do not know what is wrong with them. They are in the hands of their GP and they do not know whether what they have been prescribed—perhaps a cheaper drug that makes a higher profit but is not as effective—is right: they just have to guess.

[Geraint Davies]

A GP must always ask what the best treatment for the patient is rather than what the best treatment for their business’s profitability is. That is why this is fundamentally wrong.

[Neil Carmichael]

rose—

[Geraint Davies]

I shall not give way.

The Bill is setting up an incentive system that will make GPs make the wrong choices. It will return the NHS to a sort of pre-Nye Bevan, atomised system of health, rather than a planned system that uses resources efficiently. The system will lend itself, in the new era, to duplication, profiteering, businesses going bust and waste. What is more, there is no political mandate for the Bill; it is a Trojan horse of privatisation that no one knew would come. The changes will probably cost £3 billion or £4 billion to administer and will clearly set us back a number of paces before we move forward—if we do move forward.

A few people have mentioned the excellent work of John Appleby, the chief economist of the King’s Fund, who wrote in the British Medical Journal that the rate of deaths from heart disease is falling much faster here than in any other European country. It is falling to such an extent that it will be lower than the rate in France by 2012 even though we are spending 28% less. In terms of relative efficiency, we are doing well. Breast cancer rates have fallen by 40%, compared to 10% in France. I am not complacent and I do not pretend that there should not be greater productivity. If I had to point to one area in which there should be greater productivity, it would be the fact that we pay GPs too much money. That is the fault of the previous Government for negotiating a situation in which GPs can make more and more money. Now, it seems, we are encouraging them along that track, as though making a load of money were the primary focus.

My basic point is that if it ain’t broke, don’t fix it. Reform, yes: breaking the system, no. The Bill is not evidence-based. We are hurtling ahead, although people do not know the likely downside—the duplication, the amount of profit, the failures and possible hospital closures. The Bill is not economically sound or robust.

I have mentioned other difficulties one of which is that we make GPs subcontractors who want to maximise profit. In Wales, there is a move towards directly employing consultants and GPs, as opposed to giving them free rein on profit maximisation. Assuming that the Labour party wins in the Assembly election in May, we will see over the next five years the emergence of parallel systems, one of which will be a modernised version of the traditional health service and the other a marketised system. There is a conflict of interest between the profit motive and patient care, particularly in chronic conditions.

If aggregate supply is to be provided by a group of GPs, as opposed to a PCT, there is the risk of local shortages—of flu vaccines, for example. There might be local shortages in one area and excess supply and waste in other areas because of the absence of a strategic plan to deliver the right aggregate and match supply and demand.

In terms of customer and consumer watch, something called HealthWatch is to be introduced. Given the Government’s record in getting rid of Consumer Focus and bundling it in with Citizens Advice, I have little faith in the effectiveness of HealthWatch in looking after patients who, as I mentioned, are relatively ignorant of the product they are offered and face a local monopolist.

With reference to lifting the cap on private patients, as my right hon. Friend the Member for Croydon North (Malcolm Wicks) said, there is a risk that BUPA, for example, might suddenly funnel a lot of its patients in one direction because of discounted purchases, crowding out patients in a certain area. That would lead to unpredictability in the system.

We are asked to believe that the abolition of 150 PCTs and 10 strategic health authorities will miraculously save us some 45% of current expenditure. The people of Wales will make the right decision in May.