Andrew Lansley and health spending: what's your view?

This morning's Times has a wide-ranging interview with Andrew Lansley, the Shadow Health Secretary. He said that "any rational politician" sees the need to raise spending on health as a proportion of GDP. It is 9 per cent at the moment, he said, adding that, while 14 per cent is probably too high, 11 per cent (£28 billion in today's prices) would probably happen. He also suggested that the party had not broadened its appeal enough, saying that there was "a way to go" on the modernisation project and suggesting that the Conway affair had hurt the party as a whole. There was even criticism, in terms, of Margaret Thatcher.

Here are some longer extracts from the interview to give more of a flavour of what he said. Errors and omissions are mine.

Do you think it's important to keep to EU levels of funding?

There is no magic about being related to the European level of spending because European countries have really quite divergent levels of spending anyway. Quite a lot of people say wouldn't it be great if we could have the same level of healthcare as Switzerland. Yes - terrific. You do realise it's 14 per cent of GDP. So you have to be careful about that.

And I don't subscribe to the Blair approach, which is: "let's achieve a given level of spending". What we are keen on is achieving high levels of results.

If you can achieve a high level of results without having to spend a great deal of money obviously you would aim to do it.

Do I think we can achieve higher level of outcome without rising real terms health expenditure? No I don't. I think we are bound to have rising real terms health expenditure and I don't think we're alone in that…

I don't think any rational politician would believe that we are going to see anything other than rising real terms health expenditure because in any economy which has a degree of public choice about this matter, the wealthier a country gets the greater the proportion of its wealth that the country spends on health.

Health is a merit good, it is a matter of choice. People will pursue it, to the point where in America again it is 14 per cent plus.

However we have a system where overwhelmingly health expenditure is channelled through the State and it is funded out of taxation. So, as we plan public expenditure, we clearly have to plan that there is rising real terms health expenditure within the constraints of growth being able to fund both increases in public expenditure and reductions in the burden of taxation, that means that health expenditure is going to be a rising proportion of total public expenditure.

Now, the point about Wanless that matters is not setting arbitrary projections for health expenditure. The Government have actually departed from that. If Gordon Brown was pursuing the original Wanless scenario, because we are on the worst-case scenario, from memory it is something like 5.7 per cent increases. And it isn't. They have gone for a much lower figure. They have gone for a figure that is below the best-case scenario. So the Government is off Wanless from that point of view anyway.

So the issue is about productivity and achievement, what we can achieve with these resources…

We have poorer public health. We have poorer presentation and early diagnosis. We have people who, because of their diet, are more likely to get cancers. So of course the central Wanless proposition that we subscribe to is that if we do not achieve better public health outcomes, we will have increasingly - unsustainable is a hard word - but in the end unsustainable demands upon our health service.

Which is why we have attached such importance to a reformed public health structure. That is why David and I are putting so much effort into talking about and thinking about how we can deliver a better public health outcome. And it is challenging, like climate change is challenging, because it is not just about policies, it is about behaviour and leadership.

Just to be clear, over the lifetime of a Parliament, you would expect the proportion of health spending to rise as a proportion of GDP?

Yes, because health expenditure in every developed economy, and when you look at the demographics health expenditure is clearly rising in every country as a proportion of its GDP.

See below for more on health, and his comments on the party

But your colleagues around the Shadow Cabinet table will see the consequences of this ...

It is tough, and we have already set out that it is tough. That means there are places where the future of public expenditure is for it to decline as a proportion of GDP or indeed in some cases in absolute terms in order to manage the overall ...

And where is the fat going to be trimmed?

Well that is not for me to say [laughter] ... I just think we are being realistic here. The long term, actually under the last Conservative Government the average increase was 3.1 per cent in real terms per year. That was including some very, very unpleasant settlements. Now if the trend rate of growth was 2.5 per cent that was a rising profile. I just don't think, with the demographic - leave aside the public health changes - the simple demographics with age pointing towards rising spending on health and social care. We just have to work with it.

Are we in a situation, with the public health problems that exist now, where you could envisage unsustainable demands? If not, how far away?

No, no. I am talking about the Wanless projections. There is a gap of something like £30bn in 2030 depending on the overall public health outcomes. So we are talking over 25 years if we don't achieve better public health outcomes we become potentially unsustainable, or they will be unsustainable in a purely taxpayer-funded system.

America, arguably, is itself moving towards a situation where its healthcare expenditures are unsustainable but they are not all funded out of taxation. Probably half is funded out of taxation and half through employer and personal contributions but we don't want to get to that position. We are at, what, 9 per cent of GDP. We don't want to get to 14 per cent of GDP. We are going to get probably to 11 simply through the progress of rising health expenditure and life.

So because it is quite interesting, people [point to] the American system. The American system is not more effective than ours, it is enormously expensive and there are serious inequalities that result from it. Most of the European system: the French healthcare system is basically bust and this is in circumstances in which they have doctors on the streets demonstrating because they regard themselves as underpaid. Well, we cannot - our doctors are not underpaid in comparison with the French. So we cannot get to a French or indeed a German system where we have that sort of scale of expenditure with the third party payment problem brought back into the system.

If you start to allow in effect a system where people can demand healthcare and pass the bill to somebody else you get into serious trouble.

What we are aiming for therefore is, we are not planning to import a system from elsewhere. The NHS has some characteristics which are unique, and other people would do well to emulate and when I go to places as I have been - Massachusetts - and I am talking to colleagues - actually Conservatives do talk to other colleagues in Europe - they understand that and they actually say what you've got in Britain ... The two characteristics you've got which you should hang on to is firstly a single insurance pool. Everybody like the Americans and the Dutch are trying to work towards a very large insurance pool. Well the National Insurance is the largest insurance pool in the world. So we aggregate into this very large system and that is enormously helpful.

The second thing is you have a system of managing demand through primary care and general practice in that sense is extraordinarily important because you do really have to manage demand in a way which means people cannot just go demand in healthcare for the sake of it that is rational. It has to be cost effective, and you can meet people's needs and their choices, but there has to be in the context of doing something that is both clinically effective and cost effective, operating as it does not just as gatekeeper but trying to manage the process of people's healthcare for delivering that.

What do we not do which other countries demonstrate we need to do? We give people much better choices and information than we do now. We are worst in the developed world, which means people's experience of healthcare and their engagement with their own healthcare is dramatically underprovided for in this country.

And secondly, we don't do competition, and competition is essential to the increase in productivity.

Has the party modernised enough?

I think there is a way to go. I think Derek Conway just demonstrates that you have got to live for change, haven't you? Which means you have got to understand the changes that are going on. I find as I go round it's actually quite interesting, because as a Member of Parliament, you visit, or if you're in my position, you visit lots of constituency associations. Some have dramatically changed. Their attitude has dramatically changed. Interesting where we need to win next time but we do not have (victory assured), the associations are far more likely to have changed.

The greatest test we have associations that have always won their elections, and by a mile, actually you are far more likely to meet people whose attitude has not changed. I have been reading Robert Peel's book about the 'ultras' [ultra Conservatives]. The Conservative Party always has ultras.

I was a moderniser before we thought of the term.

You do meet people who on the face of it should be ultras but have completely changed their attitude. Quite clearly at some point they said this is going to have to happen and we have to embrace it and they switched, and I think quite a lot of the Conservative Party have switched. The idea that you can simply hold back the tide of progress. A lot of people for whom that might be an instinctive reaction a few years ago now don't think that.

I think there is actually quite a mature thought around a lot of my colleagues around the country. Britain has changed. We do have a multicultural society, we do have a very diverse society, we do have an attitude on social issues is far more "small-l" liberal. It has changed and it is not going to change back and it is far better that those people feel they have a government capable of representing them and doing so in a way that is ... Their head might say they need a Conservative government now, because the economy is being mismanaged and the public services are being mismanaged and the ability of Brown and his Government to deliver on any of his promises. So their head is telling them they need a Conservative government but their heart is holding them back.

This is a substantial part of that. The most important people is those in their heart is social liberal. And what they have seen in David Cameron's Conservatives Party is one that is capable of being a rigorous free-market orientated party, a Eurosceptic party and a social liberal party.

Have people accepted the Conservatism in their heart. Do they completely trust the Conservatives?

No, I still think we still have a way to go with people, in their feeling. Which is why what Derek Conway did and his attitude was so unhelpful. It just reminded people of one of the reasons they didn't support. It is not what Derek Conway did that is unique, you can easily find MPs with their expenses in every party. The point is of course that people feel that the characteristic of the Conservative Party they want to see change is that they want to see a party which isn't all for itself, looking after themselves.

On Thatcher

We may be the inheritors of classical liberalism, we may be the inheritors of the Tory philosophers that understands and supports the institutions which give greater purpose and shape to society, like as the family which David believes in, but we are also inheritors of the One Nation tradition, and that One Nation tradition got lost. The Conservative Party has always been the inheritors of liberalism, One Nation and of Toryism. Under Margaret, we were classical liberals, but we lost those other bits. Under David Cameron we are finding all three again.

Comments

[Geoff]

So CCHQ are knocking this story down now?

[JD]

This is a very revealing and excellent interview.

What is missing from Mr Lansley's analysis of the expense of the service is any appraisal about what the service costs and what it could provide if it had more money-- or would be unable to provide if it had less.

Using percentages of GDP is not the measure that he should be using-- although it is quite legitimate for you to use it to ask him where any increase would come from.

There have been vast technical and medical advances which mean that some treatments and care cost a lot less than they used to and some things are possible that were not. Unless the financial appraisal contains these, the political argument always sounds like the public purse is used without any thought for those who fill it.

Not very impressive for a shadow minister. And as for the language about Mrs Thatcher-- what was all that about? Classical Liberalism? What's that? Gladstone?

If this group want to create 'Cameron worship' like this man seems to wish, they would do well to start by speaking English and being straightforward.

[bill edmunds]

Wasn't Andrew Lansley the Tory who derailed John Major's Back to Basics campaign by stating that it was a moral campaign linked to Christian Beliefs which was never Major's intention. However once Lansley had spoken Major was stuck with it and had to cuddle up to Barbara Cartland amongst others. Lansley might be untouchable but it might be better if he was inaudible.

[Jack Cardiff UK]

Let us have a reality check on Wanless. I am rather sick of fawning references to 'Wanless said' this and 'Wanless said' that. The facts : Wanless was ousted from NatWest in 1999, as he lost all credibility following a disastrous set of decisions. He moved to Northern Rock in 2000 and was ousted again
(or euphemistically retired) for 'not doing his job'. Not my words, but the words of the influential All Party Commons Treasury Select Committee. Wanless was deemed highly culpable for the problems at Northern Rock. Forget all these unctuous remarks about Sir Derek's NHS Funding Report, and consider for a moment how much healthcare could be purchased for £100 billion. The latter is the taxpayers potential loss at Northern Rock - nice one Sir Derek !