It's the wrong cure, Mr Brown

Just over two years ago, I was at a party stuffed full of New Labour types. One of Tony Blair's most trusted advisers sidled up to me and asked me a question. "How about this for an idea: do you think we should pledge to increase health spending to the EU average?" I told him that, although it would no doubt be greeted with hurrahs, that was the last thing the Government should do. It would effectively be throwing billions of pounds of taxpayers' money into a money pit, since it would have little worthwhile effect.

It was not the answer I was supposed to give. "But that's what it needs, isn't it? Lots more money," he replied. I pointed out that the rest of Europe spent so much more than us on health not because of any extra tax spending but because of their extra private spending. The adviser started to get tetchy: "Well, Tony's been looking at this, and he's realised that the only way to save the NHS is with an enormous dose of money, and a complete change in its working methods."

I realised even as we were speaking that the venue where our conversation took place would eventually come to seem appropriate: the Dome.

A week later, the Prime Minister made exactly that pledge on Sir David Frost's sofa and it has formed the backbone of the Government's entire political strategy ever since. Barely a day has gone by without either Mr Blair, Mr Brown or the Health Secretary, Alan Milburn, repeating the mantra that extra money, plus managerial reform, equals NHS bliss. So it comes as no surprise that that is precisely what we heard again today from the Chancellor - and, indeed, from Derek Wanless, appointed by Mr Brown to look at and learn from other health systems. As the Wanless Report puts it: "Both additional resources and radical reform are vital: neither will succeed without the other." We have, literally, heard it all before.

But despite the mythology of massive state underfunding of the NHS, the line peddled today by Messrs Brown and Wanless, state spending on health care in Britain is much the same as it is on the Continent. In 1998, the latest year for which comparative figures are available, the Netherlands spent 8.7 per cent of its GDP on health, Italy 8.2 per cent, Austria eight per cent and the UK just 6.8 per cent.

But those figures represent state and private spending; in state (tax-funded) spending alone, the Netherlands spent six per cent, Italy 5.5 per cent, Austria 5.8 per cent and the UK 5.7 per cent - all pretty much the same. The difference is that our neighbours spend more money as individuals rather than through the state, and that they do not provide health care through a tax-funded monopoly but through a mixture of competing providers - what they call social insurance. They manage both to bring more money into health care, and to spend it more efficiently.

The NHS was introduced in 1948 into a system where open rationing was the norm, where doctors were demigods whose word was taken as holy writ, and where we humble patients were grateful for whatever we were given. Today, if Dixons told us we'd have to wait a year for a TV we'd go somewhere else. But the Government proclaims, as if it is something to be proud of, that it has a target of a maximum 15-month wait for an operation.

The reasons why we have such a shameful system are relatively straightforward. One, which does need to be confronted, is that we have so few doctors. We have 1.7 per 1,000 people; Germany has 3.4, France 2.9 and even Poland 2.4. For that, we have the British Medical Association to thank.

Decades ago, the BMA put a cap on the number of trainees to ensure a permanent shortage, and thus everhigher wages. But even if we were to have the same number of physicians, the structure of the system would mean that we still lagged behind. Continental social insurance, where individuals pay into one of a number of competing insurance funds, puts the patient in the driving seat. Hospitals are a mix of state and privately run. But because it is the patient, via his or her insurance fund, who is in control, rather than the state, hospitals compete, invest and innovate. And that means patients are also preparedto spend extra money topping up their services, which adds to the ability of the system to deliver care.

The frustration is that, as today's events show, the debate in the UK is so warped by ideology. On any rational analysis, politicians would have turned to alternatives years ago. But the NHS is, as Nigel Lawson once called it, the English religion, and Labour remains too tied to its ideological past to see that time has left the NHS behind.

IN almost every other area the ultra-moderniser, on health the Prime Minister remains defiantly Old Labour. Because he is never one-dimensional, that's sometimes easy to forget. The idea of standing up and saying: "Money, that's the answer, lots of it, and quickly" is anathema to him. He loves to sound modern, so he has to have an extra tune - managerial reform - to sing.

And so we are stuck with a health care system which is, at best, 30 years out of date. The tragedy is that for an answer to our problems, all we need do is cross the Channel.

Stephen Pollard is senior fellow at the Centre for the New Europe, a Brussels-based think tank.