Privatisation of NHS Services

Richard Graham Excerpts

Monday 23rd April 2018 Westminster Hall

[Richard Graham (Gloucester) (Con)]

Perhaps we should start with what we agree on, which seems to me fundamental for all of us in Parliament: the NHS is more precious than perhaps any institution except our monarchy and democracy. We all agree that it is and should remain a public institution available to everyone, no matter what they earn, and free at the point of delivery. We absolutely agree on those tenets of the NHS and the health services that our constituents benefit from. However, there are also things that we disagree on.

I suggest that the debate has frankly more to do with imminent local elections in London and elsewhere than with the health of the national health service. It is at least the fourth time in my short eight years in Parliament that the left, or some of the left, have tried to weaponise the NHS. When I hear Labour MPs talking as the hon. Member for Colne Valley (Thelma Walker) did about the “dismantling” of the NHS, I say to them that if the Conservatives had ever intended to privatise the NHS it would have been done by now, for the Conservatives have been the party of government for much longer than Labour since 1948. Secondly, privatisation of the NHS has never been in a Conservative manifesto. I defy any Opposition Member to find a single Conservative Member of Parliament who would want it, although it is normally possible to find one MP to sign up to most things. There is a challenge to Labour MPs, and particularly to those new ones who have known only the right hon. Member for Islington North (Jeremy Corbyn) as their leader. If anyone really believes that real privatisation is anything more than a fantasy threat, I ask them please to go and find a single Member of Parliament from the Conservative party Back Benches who would support it.

[Stephen Pound (Ealing North) (Lab)]

I have huge respect for the hon. Gentleman and have come to admire him over the years, but clearly he has not visited a hospital lately and seen privatised portering services, privatised catering services, privatised nurses being provided by privatised banks, privatised doctors being provided by privatised agencies, and patients being delivered by privatised hospital car services. I suggest he should pop down to Ealing Hospital while it is still standing. I will show him the true horror of privatisation. It is prevalent, endemic and everywhere.

[Richard Graham]

That is an interesting point, but the hon. Gentleman may not be aware that I volunteer in my local hospital, and have done for the past eight years. I have not only seen porters in action; I have worked alongside them—and ditto for a variety of wards. The situation he paints about what goes on in Ealing is completely different from what happens at the Gloucestershire Royal Hospital in my constituency, where those services are carried out by employees of the NHS—and will continue to be, whether they are in a subsidiary company or not—effectively and well. I pay tribute to all four of the NHS trusts in my constituency, one of which, Gloucestershire Care Services, received a good rating, alongside the already highly rated ²gether mental health trust. I shall put that issue to one side, but the hon. Gentleman is a distinguished Member of the House and knows better than to scaremonger about privatisation. Real privatisation is what happens in America, as he knows. It does not exist here in the United Kingdom.

The narrative today is, I am afraid, about scaremongering, with the favourite Labour bogeyman, privatisation, to the fore. There is one sentence from the petition that in a sense gives it away:

“Companies should not be profiteering from NHS contracts”.

The logic of that is that every single provider of equipment or services to the NHS, from pencils to EpiPens to imaging machinery to software, should do so at a loss. They should not. It is crucial that businesses make profits, invest and innovate for the future, reduce paperwork, increase scientific solutions to all sorts of difficult health issues and improve the life chances of our constituents. The opposite logic, of businesses making no money at all and going bankrupt, and the state trying to do everything, has been tested to death—literally—in both Russia and China. If Opposition Members, as socialists, want to understand why China has been so successful, I commend to them joining my all-party parliamentary China group, to visit China and understand what socialism with Chinese characteristics looks like and means.

[Graham P. Jones]

I hope the hon. Gentleman takes up the opportunity to visit Ealing Hospital. He argues that this is not the USA, but that is not the point being made. Of course the current NHS is not the US healthcare model. Does he accept that we are not privatising purchasers with insurance policies, as in America, but that what is happening in the United Kingdom is the fragmentation and privatisation of providers? That is the issue we are discussing. Does he agree?

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[Richard Graham]

I thank the hon. Gentleman for his comments. That is part of an issue that he is certainly keen to discuss, and part of what is in the petition.

The point I was going to make, which is relevant to that, is that there is a difference between sensible, profitable and innovative businesses and profiteering. There has been, in my view, one clear example of profiteering taking place in the NHS since 1948. It came with the private finance initiative policy during the new Labour period of Blair and Brown, which brought capital into the NHS that was off balance sheet and not recorded in the public finances, at exorbitant cost. It saddled hospitals around our country with interest rates that they could not afford to pay back, and it was the Conservative-led coalition Government who did what was legally possible, although not as much as any of us in this House would wish, to dismantle those contracts.

I think I am right in saying that we took out about £2 billion of costs a year by renegotiating the PFI contracts that could be renegotiated—somebody may know the precise figure. Opposition Members, some of whom were here at that time, should be ashamed of their complete responsibility for introducing the only obvious example of profiteering that has happened in the NHS since it was created.

[Paula Sherriff]

I wonder whether the hon. Gentleman is attempting to remove the architect of privatisation within the NHS, who I understand was Sir John Major. I agree with the hon. Gentleman about PFI; there have been some arrangements where it is difficult to argue that value for money is being achieved. But we must remember history, and it was Sir John Major who introduced the PFI scheme.

[Richard Graham]

I am happy for the hon. Lady to correct the record on John Major’s introducing PFI, but the point about PFI and all private financing is that the devil is in the detail. The principle of bringing private finance into the public sector is fundamentally a good one and approved of by, I think, all major parties. I am afraid that what went wrong during the 13 years of new Labour, as she knows and has implicitly agreed, was rampant exploitation of the NHS, with public servants signing agreements that frankly should never have been signed.

That is in the past—the fairly recent past, but the past. We have moved on since then. Since the petition was written, other things have also moved on. The most important is the issue of pay, with the Government committing several billion pounds from taxpayers to give 1.1 million NHS staff significantly higher pay over the next three years. I think we all strongly applaud what has happened—we know what an enormous job the NHS does in all our constituencies.

I will briefly raise what matters more in the longer term about the NHS, a subject that this petition could have tackled. The real issue is the long-term funding of the NHS. As a nation, we cannot lurch from year to year with the Secretary of State for Health and Social Care effectively going cap in hand to the Chancellor of the Exchequer for more cash to bail out the NHS. We need a longer-term, agreed basis on which to fund the NHS; I suggest at least five and ideally 10 years, so that everyone can plan ahead on what is needed to fund our NHS, with cross-party consensus. That way, never again can we face a situation in a general election of leaflets saying, “24 hours to save the NHS”. It is an old bogeyman that we must do away with.

I believe that the only effective way to do that is by bringing in equal contributions from the self-employed as well as the employed, and from those still generating income over a certain limit in retirement, through a dedicated source of funds or a hypothecated fund. The most obvious of those is national insurance, which does not really insure anybody for anything. It should be renamed the NHS fund. I put that proposal to our party before the last general election; understandably, there was not really enough time for it to be seriously considered. It would be a major change of direction and one not entered into lightly. There would be huge challenges with it. For example, what would we do in times of high unemployment, such as 2008 to 2010? Could the Budget effectively top up the NHS fund in such times?

That is why I am so pleased that the King’s Fund is researching that very issue now—would it be possible to have a hypothecated fund to fund the NHS? Would national insurance be a good starting point? What sorts of hazards and potential would that throw up? The King’s Fund report will be an important guide to hon. Members on both sides of the House about whether we can look at having a serious, long-term source of funding for the NHS around which we can have consensus, so that some of the endless debates and arguments, particularly around the word “privatisation”, can be dealt with and we can know that we have a source of long-term public funding for our NHS.

That is where I wish to finish. I regret attempts by some Opposition Members to try to create differences between political parties on something as precious as the NHS. All of us—all our families and all our constituents, wherever we were educated, whatever sport we like, whatever job we have and whatever sort of retirement we have—depend on the NHS for our health and, I contend, for our care as well. That is the other reason we need to find a hypothecated source of funds for the NHS—so that it can deal with care as well. That is a subject that the Health Secretary is wrestling with in his Green Paper as we debate. That is why in today’s debate we should leave the partisan efforts at point-scoring on privatisation and focus on what we can all contribute to the bigger debate about a long-term source of funding for a fully publicly owned NHS.

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[Kevin Hollinrake]

I agree with that point entirely. We all love the NHS and respect so much the work of the people who work in that service, so congratulations on the fact that Labour introduced the NHS, but that is not the point. This debate should not be about ideology; it should be about what works.

[Richard Graham]

Just on a point of fact, about two weeks ago it was the anniversary of the first White Paper on a national health service, which was presented to Parliament by the wartime Conservative Health Minister, Willink. The thinking behind much of that came of course from civil servants, of whom Beveridge was undoubtedly one of the more important, and he was a well known Liberal. I therefore suggest to my hon. Friend that before conceding the historical point, which we should accept absolutely, that bringing the national health service into being was a Labour achievement, we should point out that there was in fact a huge amount of cross-party consensus, particularly during the war years, in the lead-up to the birth of the NHS. It is important that we all recognise the contribution of all parties in its origins.

[Kevin Hollinrake]

I am very grateful for that historical clarification. One thing I used to say in my business to any people who came to me with new ideas was that ideas are 10 a penny. What matters is how we implement things. What matters is how we implemented things then and how we implement things today. That is what makes the critical difference in whether something will succeed or fail.

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[Martin Vickers]

The hon. Lady is obviously very knowledgeable, as we heard earlier. I cannot compete with 33 years’ experience, although I recognise those faults and I can recall the stories of dirty hospitals, which may have had something to do with poor procurement and bad management.

However, the reality is that the private sector has a role to play. Are we seriously suggesting that we should inconvenience people by forbidding Boots, Superdrug or a supermarket from administering prescriptions? Obviously not. Should we preclude social enterprise operations from taking part in NHS services? Surely not, because they can be extremely valuable and improve patient care.

[Richard Graham]

My hon. Friend makes some good points. Does he agree that the hon. Member for Ealing North (Stephen Pound) makes a different argument from that of his colleagues, who argue against companies that are subsidiaries of the NHS by definition? There is a considerable difference between someone who works for an agency that works for the NHS and someone who works for an NHS subsidiary company.

[Martin Vickers]

I thank my hon. Friend for that timely and helpful intervention.

The King’s Fund report, “Is the NHS being privatised?”, determined that the gradual increase in the use of private providers has improved the choice and service for patients. That must be for the good of everyone. It is the patients who are important; scaremongering does not help them. A focus on process rather than patient outcomes is unwise and a distraction from the real issues. The best interests of the patient are what matters. We must ensure that as much as possible of the resources that are made available goes into patient care.

The Leader of the Opposition has made repeated pledges to “save the NHS”. Frequently, those on the left whip up hysteria about how the Government of the day are doing something that will fundamentally alter healthcare in this country and bring the NHS to an end, but when exactly have these warnings been accurate? Were they accurate in April 1997, when Tony Blair famously declared that we only had

“24 hours to save the NHS”,

or when union leaders have spoken out about the NHS? Such reports have always proved false. As was said earlier, the reality is that the Conservative party has led government for 43 of the 70 years that the NHS has been in existence, so if the aim was to destroy the NHS, we have done a pretty poor job. The reality is that the Conservative party is as committed as any other party in this House to the continuation of the NHS.

What we see is outrageous hyperbole that is designed to prey on the worries of those who rely on the NHS, which—let us face it—is virtually all of us. That is irresponsible and in some cases cruel. Furthermore, it adds to a climate in which we cannot have a sensible discussion about the future of healthcare in this country. Within our politics, there is a paranoid conspiracy theory surrounding the motives of the Conservatives in relation to the NHS. It goes something like this: “Conservatives hate the NHS for ideological reasons, but given the toxicity of the subject and the reverence with which the public quite rightly regard the NHS, they realise the only way to implement privatisation is by stealth.” That is absolute and complete nonsense.

Let us face it, there have been changes to the NHS throughout its existence. We have had mention of fragmentation; I suggest that some of the fragmentation took place during the Blair and Brown Administrations. We spend around 8% of our GDP on healthcare, which is in line with countries such as Belgium and more than is spent by the likes of Australia and Canada, which have large private sector involvement. If, as we are told, we are underfunding healthcare to undermine support for the public system, what would be the motive for the apparent underfunding of healthcare systems elsewhere? The NHS turns 70 this year and, as I have said, the Conservatives have been in power for the majority of that time. There is no masterplan to replace the NHS with a privatised alternative.

There is also the question of what we mean by “privatisation”, which I mentioned earlier. “Privatisation” is a buzzword for ideologues to spread fear and embed an inefficient system that fails patients. Is Germany a private system, or is Switzerland? The answer is no. However, Germany and Switzerland embrace the market, while ensuring that no one slips through the net.

The German system shows that a healthcare system can be fully funded in the style of a pension system. The situation in Switzerland proves that even considerable levels of out-of-pocket patient charges need not be regressive. We can trust people to choose from a range of health insurance plans and identify the best option for them. Throughout Europe, healthcare systems offer universal high-quality care that is free at the point of use. In many cases, they make use of a greater number of private providers than our own NHS.

Social health insurance does not have to clash with the principles of the NHS that are so greatly entrenched in our society. We can still have a universal system of healthcare that is free at the point of use. We may have been the first country to establish a healthcare system based on those principles, but we are no longer unique in that respect. Virtually every developed country has some form of coverage.

The United States is an outlier in this regard. Canada offers universal healthcare that is free at the point of use. Germany offers universal healthcare, and while patients there may have to pay a small amount to see a doctor—around £10—the poorest in society are often reimbursed.

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[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend the Member for Hartlepool (Mike Hill) on the eloquent and knowledgeable way in which he introduced the debate on behalf of the Petitions Committee. He took us through a brief history of the health service and private sector involvement in it, and talked about the fears that have been expressed about the future of private involvement, particularly through the tendering process and the potential trade deals with other countries. I was very sorry to hear about his constituent, Connor McDade, and I would like to send my condolences to his family. I join my hon. Friend in paying tribute to the staff who looked after Connor and to all staff in the NHS, who make it the institution we feel passionately about.

That passion is demonstrated by the fact that, by the time we finish the debate, more than 20 Members will have spoken. Unfortunately, because of the number who have spoken, I am not able to go through every single contribution, but I want to draw attention to some of them.

My hon. Friend the Member for Hyndburn (Graham P. Jones) made an excellent speech in which he told us in detail how Lancashire has fragmented under the Health and Social Care Act 2012, and said that a High Court judge has blocked a £4 million Virgin Care contract. Later, I will talk about some of the adverse consequences of the 2012 Act in terms of litigation.

My hon. Friend the Member for Warrington South (Faisal Rashid) rightly raised concerns about the fact that the pursuit of profit can put patient care at risk. He gave a number of examples of the litigation that has been forthcoming, and he was ably assisted by my hon. Friend the Member for Dewsbury (Paula Sherriff) in that regard.

My hon. Friend the Member for Stroud (Dr Drew) talked about the wholly owned subsidiary that is proposed for his area. He is right that such a major change should not be proposed without being referred to hon. Members or members of the public. He asked a number of pertinent questions, and I look forward to hearing the Minister’s replies.

Similarly, my hon. Friend the Member for Leeds North West (Alex Sobel) talked about the wholly owned subsidiary company in his constituency. I was pleased to hear that his trust has at least responded to hon. Members’ concerns and is taking stock before moving on. I agree that there needs to be equality across all trusts in respect of the funding base upon which they make such decisions. He was absolutely right to say that it is not only clinical staff who make the NHS what it is today. Sometimes we do not recognise the valuable contribution that those who work behind the scenes make to the smooth running of our services.

My hon. Friend the Member for West Lancashire (Rosie Cooper) gave a tour de force of a speech. She is a greatly experienced health campaigner and described three fundamental problems with how the health service is run at the moment: transparency, accountability and the prioritisation of shareholder gain. How can it be right for a publicly funded service to refuse to answer questions from an hon. Member on the basis of “commercial confidentiality”, a phrase that can cover a multitude of sins? My hon. Friend is absolutely right to continue pursuing such matters, as she has done in many areas.

My hon. Friend the Member for York Central (Rachael Maskell), as always, gave a formidable speech about the issues affecting our national health service. She set out clearly how the cherry-picking of some services by the private sector damages the NHS as a whole and loads risk on the public sector.

[Richard Graham]

I was struck by how the hon. Member for York Central (Rachael Maskell), while talking about the need to find cross-party consensus on these issues, took no interventions from anyone on the Government Benches—[Interruption.]

[Stewart Hosie (in the Chair)]

Order.

[Richard Graham]

Furthermore, she made no recognition of the fact that issues such as subsidiary companies and so on are separate from the points she was making and absolutely not about privatisation.

[Justin Madders]

Members are indicating that my hon. Friend the Member for York Central did take interventions. It is not for me to comment on that, but I thought her speech was superb, and it came from many years of experience in the health service. However, on the contribution of the hon. Gentleman himself, I have to say that I disagree with him—this debate is about not a local election or weaponising the NHS, but about the 240,000 members of the public who signed the petition, which was launched some five months ago.

The hon. Gentleman also challenged us to find Conservative Members in support of privatisation—they may not express that support publicly, but we need only look at what has happened to the health service under a Conservative Government to see that privatisation has accelerated since 2010. There is also the famous 2005 pamphlet that advocated privatisation of the NHS. The Health Secretary has, I know, disowned his comments as one of the co-authors, saying that the pamphlet no longer represents his views, but at least five other current Conservative Members were co-authors, so there are questions to be asked about it of those on the Government Benches.

As other Members have said, private sector involvement has of course always been an element of the NHS, but since the Health and Social Care Act came into force there has been a step change in that involvement. After the Act became law, the amount of cash going to private sector partners went up by a staggering 25% in the first year alone. That is part of a broader trend identified by House of Commons Library research—the equivalent of £9 billion a year of NHS funds now goes into the private sector, which is double the figure under the previous Labour Government.

As we have heard, there are also huge problems with litigation arising from the 2012 Act. Money should not be spent on lawyers, procurement processes, tendering and court cases; it should be spent on patients. Given the longest and most sustained financial squeeze in the history of the NHS, we can ill afford money to be used in that way. The financial squeeze has also had consequences for how NHS hospitals are forced to use the private sector. Elective procedures in the private sector have gone up by 58% in the past year alone.