National Health Service

Lord Liddle Excerpts

Thursday 8th January 2015 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I, too, congratulate the noble Lord, Lord Turnberg, on the way in which he introduced this debate. It has been a civilised and, in many respects, expert debate. I am worried that I may lower the tone because I want to make a couple of more political comments. However, I shall try to do so in a civilised way.

The basic reason I wanted to speak in this debate is that I fear for the future of the National Health Service given the implications of the emerging Conservative approach to public finance in the next Parliament. I do not in any way doubt the sincerity of Members opposite—my friend the noble Lord, Lord Horam, the noble Baroness, Lady Cumberlege, who has just spoken, and the Minister—the Secretary of State for Health or the Prime Minister, or their commitment to the principle of the National Health Service. However, I doubt the sustainability of that commitment given the approach to public finance set out in the pre-Budget report at the beginning of December, particularly the prioritisation of tax cuts when resources become available and the intention to reduce by the end of the next Parliament the share of public expenditure in GDP to 35%.

The Government have done their best in this Parliament, in their way—I congratulate them on that—to maintain NHS spending in real terms, which, given the financial pressures on the country, was a good thing to do. That has worked for a while. The previous Government increased spending on the NHS a great deal. There were productivity gains to be made from that increase in spending and we have continued to see outcomes improving in the present Parliament.

However, the strains are now beginning to show. We know that, because of the increase in population, NHS spending per head is falling. Simon Stevens’s five-year analysis—I confess to being an admirer and friend, having worked with him—is brilliant. It demonstrates that there is a large potential funding gap unless, as the noble Lord, Lord Horam, pointed out, it can be closed by a more rapid rate of efficiency gain. With respect to the noble Lord, that will be difficult to achieve in a highly labour-intensive service. It is not like private sector manufacturing. This is a highly labour-intensive activity and 3% efficiency gains will be very difficult to achieve. So we will need additional investment.

As to what will happen to the rest of the public sector under this public spending outlook in the next few years, we will see severe austerity in welfare and public services, as set out in the pre-Budget report; more strain on poor families; a continuation of inadequate supply of social housing; weaker children’s services unable to protect children at risk; a narrower school curriculum because schools cannot afford to teach more broadly; and local authorities unable to meet the needs of all but very needy people in adult social care.

What will be the consequence of all this? Every academic and expert in public health tells us that if there is an increase in poverty, ignorance, bad housing and social neglect, what we will get is more pressure and problems for the National Health Service. On a holistic view of public spending, the Government’s plans are flawed and we need a more sustainable position. So I congratulate my party on at least indicating what it will do in the first year of the next Parliament in terms of extra spending and how it will be paid for.

Finally, we need cross-party debate and consensus on a long-term funding model for the NHS. I firmly support Frank Field’s ideas for a broadly based hypothecated tax that would take the funding issue out of politics and enable managers in the NHS to plan ahead for a more efficient service.