Living Standards

Debate between Toby Perkins and Hugh Bayley

Wednesday 30th November 2011 Commons Chamber

[Hugh Bayley]

No; I will make my case, if I may.

In opposition, the Government argued against the PFI, but their investment stimulus, which was announced yesterday—I was one of those who applauded it—is going to be paid for by the same sort of off-balance-sheet private finance as financed the PFI.

Yesterday, I ran the risk of incurring anger from my colleagues by welcoming the Chancellor’s plan B. It is a small plan B, but it is £5 billion of Government money backed up by further off-balance-sheet money from the private sector to stimulate the economy. The Chancellor does not call it a plan B. That would be embarrassing, as he has spent 18 months telling us that there is no alternative to plan A: savage cuts in public investment and infrastructure. But now it is plain for all to see that there has been a U-turn.

I congratulate the Chancellor on having the courage to start to do what is right and necessary for the economy. We heard about the U-turn in relation to a road in Nottinghamshire that was cancelled by the coalition Government and has now been reinstated. The Access York scheme—a £22 million improvement to the city’s park-and-ride system—is another good illustration. It was approved by the previous Labour Government, stopped by the coalition one month after the general election, and has now been reinstated, and I thank the coalition Government for that. In the short term, that green transport system will create construction jobs in my constituency, and in the longer term it will attract more visitors to York who will spend money in the shops and the visitor economy.

Nobody so far has mentioned the situation of the NHS. The Government promised that they would not cut NHS spending in real terms. I asked the Library to look at the figures for my PCT area, where many services are being cut. Gastric band surgery for the obese is not available on the same terms in North Yorkshire and York as in neighbouring areas. Facet joint injections for back pain are available elsewhere but not in York. Assisted fertility is available in neighbouring health authority areas, but not in York.

In the last year of the Labour Government, the increase to the PCT budget was 5.8%, which, with inflation running at 3.7%, was a net increase of 2.1%. In the first year of the coalition Government, the local PCT budget was increased by 2.2% but, with RPI running at 4%, that was a 1.8% cut in real terms. Nationally, the figures tell a similar story. In 2011-12, the real-terms cut in NHS funding is 0.56% on the previous year, and in 2012-13 it is predicted to be 0.33%. The Government gave a pledge not to cut NHS funding, and with inflation running at higher levels than they were anticipating, it is necessary for the Treasury to increase NHS funding to meet that pledge. I ask the Minister to respond to that point particularly.

[Toby Perkins]

What my hon. Friend says about the NHS is absolutely right, but there was also a pledge not to have any major reorganisations of the NHS. In Chesterfield, alongside the financial pressures that the NHS would have been under anyway, additional resources are being spent on reorganisation rather than on patient care. That is the other major problem that the NHS is facing.

[Hugh Bayley]

My hon. Friend is absolutely right. The reason why, under a Labour Government, there was a 2% real-terms increase in the NHS budget is that the cost of an ageing population and the new medical technologies introduced to the NHS is roughly 2% a year. A 2% real-terms increase, therefore, is a standstill in the ability to treat patients, but adding in a costly health service reorganisation and a real-terms cut in the budget means a savage cut in the availability of care for NHS patients.