Charles Kennedy – 1985 Speech on NHS Pay

Below is the text of the speech made by Charles Kennedy, the then SDP MP for Ross, Cromarty and Skye, in the House of Commons on 15 July 1985.

From one argumentative Scot to another I beg to move,

That this House believes that district health authorities and Scottish health boards should not be expected to find the extra resources in the current financial year that are now necessary to implement the Government’s decisions arising out of the recommendations of the pay review bodies; and further believes that if no extra money is provided from the Contingency Reserve there will be a damaging in and unacceptable reduction in real terms in standards of health care.

Mr. Speaker

I have selected the amendment in the name of the Prime Minister

Mr. Kennedy

In moving the motion, our task and objective is to highlight the disgraceful state of affairs into which the Government are plunging the National Health Service and important branches of it by rather inadequate and third-rate stealth, and to offer a constructive solution to the present financial paralysis facing many health authorities and the nation.

My hon. Friend the Member for Woolwich (Mr. Cartwright), in a question to the Prime Minister, asked whether

“any pay settlement for the nurses which is above 3 per cent. must be paid for by savings inside the National Health Service? … Is that not an appallingly unfair way to treat a dedicated profession?”—[Official Report, 4 June 1985; Vol. 80,c. 153.]

If the Minister for Health speaks this afternoon, he may have to behave more in his capacity as a Queen’s Counsel than a Privy Councillor. The more one studies the Government’s financing of the NHS, the more one realises that the description applied to the former Chancellor of the Exchequer in the previous Tory Government could well be applied to the Minister for Health, who displays all the attributes of a barrister trying his best to defend his client without realising that his client has seen the light and changed his plea to guilty.
The unfairness which my hon. Friend tried to highlight was that the lack of extra cash to fund the rewards would lead to job reductions. The complete lack of extra cash in the aftermath of the pay review body recommendations will, as an inevitable and direct consequence of ministerial decisions, lead to a lowering of health provision and a decline in the quality of patient care. That is why the alliance describes the Government’s NHS policy as cuts by stealth at the expense of patients. Today we seek to highlight the plight of the NHS, and to persuade the Government to make extra cash available from the contingency reserve.

It is worth putting into context the role and position of nurses within both the NHS and the community as a whole. Who better to quote than the Minister? In a debate on the NHS, referring to the nursing profession’s pay increase, the Minister said:

“The Government have made it available to them, because we recognise their abstention from industrial action and the fact that the country, the Government, and the patients in particular, owe them a great obligation. It is irrefutable that it is good news for nurses to have major pay increases, in the second instalment, particularly for the staff nurses and ward sisters. It is irrefutable ​ that it is a major advance for the nursing profession to have a lasting system.”—[Official Report, 2 July 1985; Vol. 82, c. 216.]

Those are noble and honourable sentiments, which will command support from both sides of the House. It is sad that, characteristically, the Minister is not living up to his rhetoric at the Dispatch Box in his funding of the NHS.

The Minister and the Secretary of State for Social Services have confirmed that the cost of the pay review body awards would be about £240 million in England in 1985–86. The Under-Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay) who is responsible for health in Scotland, is present, and I shall deal with the Scottish position later. DHSS Ministers make great play of the fact that this year they are cash allocating an additional £500 million, which is equivalent to 5·5 per cent., to branches of the NHS. They refer in particular to the hospital and community health services, and rightly so. However, we must consider what the figure means when it is analysed carefully and beyond the rhetoric of Ministers.

The January 1985 public expenditure White Paper notes that the hospital and community health services will account for more than 70 per cent. of the NHS budget. In 1985–86, current expenditure will increase by 5·8 per cent. over last year’s total. The inflation rate, which the Government estimate at 3·5 per cent. and which will produce a notional real terms increase of 2·3 per cent., reflects the Government’s general illustrative assumption of a 3 per cent. pay rise in the public sector and a 5 per cent. general price rise in the NHS sector. Those figures are taken directly from the Government’s White Paper.

However, there is an important qualification and, for the purposes of the debate, a fundamental point to be made. The assumptions about wage and price increases are fundamental to the forecasts, because the 2·2 per cent. real growth figure has disappeared as a result of the 6 June doctors and nurses pay review body reports. The additional pay costs in 1985–86 for cash-limited NHS services will be 5·4 per cent. for doctors and 5·6 per cent. for nurses. The inflation rate or relative price effect estimate has been pushed up to nearly 6 per cent.—I shall return to that figure and quote the Minister shortly—according to the Social Services Select Committee’s sixth report, which was published on 22 June. That would mean a real terms decrease of about 0·3 per cent., which is 0·2 per cent. higher than what the DHSS now concedes was one tenth of a 1 per cent. decrease in 1984–85.

Those detailed figures are based on a careful and serious analysis of the projections and on hard accurate statistics, which the Government have made available in their forecasting and White Paper. The figures are extremely damaging because they point the way to further reductions in patient care and health service facilities to fund the costs of legitimate and well-deserved pay increases for the professions allied to medicine—nursing, health visiting and midwifery.

Mr. Richard Hickmet (Glanford and Scunthorpe) rose

Mr. Richard Tracey (Surbiton) rose

Mr. Kennedy

I shall take my pick, but it is something of a Hobson’s choice.​

Mr. Hickmet

That is not a nice way to describe my hon. Friend and me.

The hon. Gentleman talks about further cuts. Why does he expect further cuts when, since May 1979, the NHS budget has increased by 20 per cent., there are 55,000 more nurses, 6,000 more doctors and dentists, more outpatients and inpatients have been treated, and there are more day patients and home visits? Why does he speak of further cuts when that is manifestly not the case? Does the hon. Gentleman concede that the Government’s record on the NHS is the finest since the war?

Mr. Kennedy

I have been a Member of the House for only two years, but I must tell the hon. Gentleman, who entered at the same time as me, that the gullibility of Tory Back-Bench Members never ceases to amaze me. Let us consider the real world and leave the Thatcherite monetarist universe which the hon. Gentleman seems to occupy. Let us consider what those in the front line of the service say about the figures. The hon. Gentleman did not listen—[Interruption.] The public school boys on the Treasury Bench should keep quiet, because we are quoting their figures.

The hon. Member for Glanford and Scunthorpe (Mr. Hickmet) did not listen to what I said. When he talks about last year’s figures, he should remember what I said about a 0·1 per cent. cut in real terms, which, on current predictions, will be trebled this year. That will be extremely damaging.

I hope that the hon. Gentleman will agree that the National Association of Health Authorities is aware of the difficulties and realities of providing health care. The Minister for Health visited Cardiff last month, and much good that did the Tory party when the voters were asked for their opinion—[HON. MEMBERS: “Cheap.”] It was not cheap. I was an expensive mistake for the Tory party to send the Minister to address the annual conference of the National Association of Health Authorities. To be fair to the Minister, we should argue on his terms this afternoon and use his words as the parameters within which the debate should be conducted. When the general manager of West Lancashire health authority asked him what the funding consequences would be for next year’s allocation, the Minister said:

“I do not accept that the award poses any threat to standards of care.”

Within the NHS, the Minister’s is a lone voice compared with what is being said in the authorities of England and Wales and in the Scottish boards. He continued:

“I just hope we are not looking too far ahead”—

it is good to know that the Health Service is being governed by ad hoc expediency

“with the implications of this”—

—[Interruption.] Those are the Minister’s words. Hon. Members should heckle him, not me. The Minister continued:

“After all, we have until next February to fund the full award and I hope we will not hear about cutbacks, which I frankly regard as the routine small talk of NHS politics and not necessary in a well-managed and well-run health service.”

That demonstration of arrogance and insensitivity to those who must make the painful choices that will be made necessary by having to fund the nurses’ pay award is extremely disturbing.

We should examine what some of those who live in the real world said in response to the Minister’s comment. The ​ national association passed a motion calling on the Government fully to meet the costs of the award. The member of Salford health authority who moved the motion said that her authority had already used its efficiency savings—no doubt the Minister will try to tell us about those—and faced a burden of £1 million for wage claims during next year. The person who seconded the motion, who came from North Tees authority, said that patient care would suffer if authorities had to find the cash for awards. Simply to balance the budget, his authority would have to make a 2 per cent. cut, and he referred to this as “crisis management” leading to inefficiency. I ask the House to compare that statement with the Minister’s statement that the routine small talk of NHS politics is

“not necessary in a well-managed and well-run health service.”

We now know who realises the damage that will be caused by the Government’s decision in relation to the nurses’ pay award.
However, the matter goes deeper and further than that. During a debate on nurses’ pay on 25 March this year, the Minister talked about the expected outcome of the pay review structure. Hon. Members should not let him off of that hook this afternoon. He said:

“The result is that all we are doing is facing everybody—Government, health authorities, staff and review body—with the reality that there is a relationship between pay and service provision.”—[Official Report, 25 March 1985; Vol. 76, c. 195.]

I am glad that we have established that reality, because the thrust of the argument by alliance Members today will be that, given that the Minister has signalled clearly that we cannot divorce the two elements of Health Service management and delivery of patient care, it is wrong for the Government to argue that, even if they do not provide additional funds to meet the pay increases, there will be no detrimental impact on patient care.

Mr. Tracey rose——

Mr. Kennedy

We have had Tweedledum, so we had better have Tweedledee.

Mr. Tracey

Perhaps the hon. Gentleman will give serious instead of frivolous consideration to my point. He talked about service provision. Has he heard about cost effectiveness in service provision? Will he say anything about putting ancillary services out to tender? Has he said a word to the officers of his local health authority about putting services out to tender? He must realise that many costs can be saved in that way.

Mr. Kennedy

Like the hon. Member for Glanford and Scunthorpe, the hon. Gentleman did not listen to what I said at the outset. I quoted from a representative of one authority at the NAHA conference, which the Minister addressed, who recognised immediately that the efficiency savings that the authority had achieved, and which I hope the Minister will confirm have been achieved in many cases, have already been swallowed up as a result of the Government’s decision. I was extremely interested to note that the Institute of Health Services Management said that it makes nonsense of Health Service management to try to encourage efficiency savings and then to tell managers that those savings cannot be ploughed back into providing better patient care.