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Mr. Barry Gardiner (Brent, North) (Lab): Does the right hon. Gentleman appreciate that the privatisation of cleaning services in hospitals, which his Government introduced, precipitated the crisis, which, as he said, has a long-term tail on policy?
Mr. Lilley: We are talking about a problem that kills between 5,000 and 20,000 people a year. It is not the sort of problem about which we should make party political points. If the cause were what the hon. Gentleman suggests, I would support any change that would solve the problem and thereby cure it. However, the Government have decided that that is not the cause, and they have been in power for seven years. Why is that? Ministers go to other countries, as the Conservative Government's Front-Bench health team did, accompanied by the BBC. They went to Germany and saw sparkling, pristine hospitals. They said, "I bet you don't contract out your health care to private cleaners." They replied, "Of course we do. We want specialists involved in cleaning while we specialise in health."
The BBC journalist said, "We have had privatisation and all the unions say that that is the cause of all our problems. They say that the contractors do not keep things properly clean." The German official replied, "Why don't you change the contractors?" The benefit of the process is that, if it is not good enough, an improvement can be made, which would be more difficult if the system were run in-house.
If that analysis is mistaken and the hon. Gentleman is correct, let us all agree to change the system, but let us not make silly party political points when lives are at stake. It must be a silly party political point; otherwise he would have raised it with his right hon. and hon. Friends and urged them to make changes, and condemned them for tolerating something for seven years that he thinks is the cause of 5,000 people dying each year.
Mr. Stephen Dorrell (Charnwood) (Con): I entirely agree with every word that my right hon. Friend has said in response to the point made by the hon. Member for Brent, North (Mr. Gardiner).
Is not the fundamental argument that my right hon. Friend is advancing that our health structures are not as efficient as they need to be to deliver the services that patients require and that taxpayers are entitled to see for their money? Is not that argument exactly the one that the Chancellor made two or three years ago, when he said that the extra money that he intended to provide for the health service must be conditional on fundamental reform of the delivery mechanism? The basic point to be made against the Government is that they have made the money available but forgotten about the conditionality that the Chancellor understood at the beginning of the process was fundamental for success.
Mr. Lilley: My right hon. Friend is absolutely right, and I shall address that point. Undoubtedly, the Government have increased the level of spending more rapidly than happened on a sustained basis under the previous Government, but they have seen a slow-down in performance improvement, and deterioration in some key areas. That is partly because they have intensified the central problem that the NHS and other public services face in achieving improvements: centralisation.
We know that centralisation does not work. We have seen its failure on a massive scale in the Soviet Union, in the former eastern bloc and in centralised services in this country. We have seen it even in centralised companies in the private sector. An attempt to run a large organisation from the centre, top down, with command and control does not work. The resources that are thrown in never seem to filter through to the sharp end. Mr. Gorbachev, a well-intentioned man, thought that he could transform the Soviet Union without changing its fundamental structure just by setting targets, urging people to do better and sacking them if they did not.
The Prime Minister is perhaps Gorbachev's last remaining disciple on earth, because the Government have made centralisation worse. Though they have given up socialism, their belief in it has been replaced by a belief in spin and press manipulation. The whole public sector is run for good headlines. If a Government are trying to get good headlines about the health service, there must be centralised initiatives announced from Downing street that determine how money is spent. Ultimately, that means that decisions about how money is being spent that should be taken by individual hospitals or by people who are aware of clinical priorities are taken by Alastair Campbell or someone who is aware only of newspaper priorities.
Centralisation in the health service has been intensified in all respects because the Government want to take credit at the centre for everything that the NHS does that is good and for any initiative that they can think up that will win the next day's headlines. When I visited a hospital, I was told that the Government had set a waiting list target, which made a good headline. They then announced, to get another good headline, that they were appointing a waiting list manager in every hospital, which was duly done. Finally, they announced that they were going to set a centrally allocated waiting list budget for every hospital. In the hospital that I visited, the waiting list manager, to meet his waiting list target, had used his waiting list budget, ring-fenced from everything else, to introduce operations on a Sunday performed by locum consultants. That was more expensive but, in theory, should have reduced the waiting lists. However, the hospital did not employ extra sterilisation teams, so by the end of Sunday all the equipment had to be sterilised and no operations could take place on Monday. However, money to deal with that came out of the hospital's general budget, which was not ring-fenced. There was therefore an absurd procedure that resulted in no net improvement in the number of operations but an increase in cost.
That is just a micro-example of the consequences of centralised decision making. The other problem that we face in the health service, which my party is working to remedy, is the fact that the NHS and other public services tend to lack the dynamic forces that drive up quality and efficiency in most areas where choice prevails. If the user of a service can choose between providers, those providers must compete to be at least as good and efficient as the alternative, and that dynamic force of choice determines where resources go. Providers get the extra resources only if they satisfy more customers or users leading to a constant dynamic to improve quality and efficiency.
We therefore need three things in the NHS. First, patients need to be given choice again. We should not forget that one of the early decisions that the Government made for the first time in the history of the health service was to remove the right of patients referred by their GP to go to the hospital of their choice. They can no longer do so, except under the reintroduction of patient choice, whereby they must go through an incredibly bureaucratic procedure with appointed choice advisers. The Government have removed that choice, and we must restore it. Secondly, we must make taxpayers' money follow that choice. In the NHS, if a patient goes to hospital A rather than hospital B, hospital A should get the extra money to provide the resources to treat that patient and reward it for doing so. If hospital B is not getting enough patients, it must take action to remedy the situation. That does not mean closing down or starting a spiral of decline—indeed, there is usually a pattern of improvement. If a hospital realises that people are not coming because, for example, it has a reputation for dirty wards, it will clean those wards. If it has a reputation for not washing hands between operations, it will remedy that practice.
Those things do not cost any extra money. A hospital's consultants may not be performing as well as they should, and may need to be retired and replaced by new consultants. It may cost less to employ a relatively young but extremely able consultant instead of a senior consultant who is past his prime. Those things do not cost extra money, but they drive up quality if we have choice and the taxpayer's money follows that choice. Thirdly, patients must have the information on which to make informed choices if that dynamic is be reintroduced in the health service.
The same applies to schools and elsewhere. The Government deserve some credit for not undermining the long-term benefits that began with the reforms of the 1980s, and for introducing improvements such as the independence of the Bank of England and so on. However, they have started a policy of tax and spend that will undermine our relative advantage and, in due course, our economic performance. It is already undermining our productivity. I remind the House of an issue that I raised in the Budget debate last year. The Chancellor claims credit for a growth rate of 2.3 per cent. this year. Growth is made up of two things—growth per head of those employed and the number of people employed. The number of employed people is rising quite rapidly, partly because we are continuing to reduce unemployment, which is excellent and to the great credit of all those policies that brought it about. The big increase, however, stems from net immigration. I have asked the Chancellor what share of our growth rate is due to net immigration—it is 0.4 per cent. of that 2.3 per cent. Without net immigration, the growth per head of the indigenous or resident population is less than 2 per cent.
We should recognise that it is only if output per head rises that income per head will rise, along with our well-being and the standard of living throughout the economy. The Chancellor should not pretend that growth that comes from increasing our population will necessarily increase net wealth per head. Indeed, it can create problems, which show up on the other side of the equation—housing problems, congestion and increased use of all the public services, to which people who come
to work here naturally have the right of access. That does not show up in the Chancellor's figures, but it shows up in the demands on his Budget. The Government have therefore pursued policies that reduce productivity growth per head, and unless and until those policies are changed, there will not be an improvement in the average wealth or the growth of wealth per head, which everyone in this country wants.
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