Leading Article: Labour tackles unhealthy record

For more than four years, the Labour party railed against the NHS reforms. The changes, we were told, had no redeeming features. The Opposition struck fear into the electorate and secured votes. Then came the launch yesterday of Labour's new policy. It is an astonishing document. The news from Labour is that the Conservatives have, in fact, been right all along on the essentials.

Not that there is any contrition at the beginning of Renewing the NHS. Indeed the final chapter repeats the traditional mantra that "the NHS reforms have failed". Yet even a cursory reading demonstrates the opposite. The party now accepts and pledges to entrench the central tenet of the NHS reforms: that the planning and purchasing of health care should be separated from its provision by hospitals.

This principle matters because it ensures that the NHS is run for patients rather than staff. The people with the cash are powerful: they can spend their money elsewhere if hospitals behave badly. Throughout the world this structure is now acknowledged as the best way to control the notorious inflation of health care costs, adapt services to changing times, shorten waiting lists and set sensible priorities. The Tories got there first. Labour has just caught up. One cheer for Labour.

Having been converted to the big idea for running the NHS, Labour makes some sensible criticisms of the present system. First, the market has at times turned into a costly, bureaucratic paperchase as thousands of operations are bought and sold. Second, giving GPs budgets to buy hospital treatment has been occasionally inequitable, allowing their patients to jump the queue. Finally, health authority purchasers - making life and death decisions about who gets what - are undemocratic and need local representation; the same is true of hospital trusts.

But Labour is still not quite being honest. For, even where the party says it disagrees with the Tories, the gap is much smaller than rhetoric might suggest. The document says Labour will abolish the NHS market and would have us believe that GP fundholding will end. In fact, under Labour plans, money would still move from purchasers to hospitals, but under longer term contracts. In other words, Labour would simplify rather than abolish the market. And nowhere in the document is there a promise to abolish GP fundholding. Labour merely backs new collective bodies - many of them already permitted by the Government - which allow GPs to influence decisions on spending. The document even expresses interest in local flexibility of pay, anathema to the health unions.

The devil of the party's proposals lies in their vagueness. The future of GP fundholding, despite its many achievements, is left uncertain. The greatest danger is that the purchaser-provider split might yet be sabotaged: Mr Blair's reconstructed health authorities and hospitals risk developing a dangerously cosy relationship. And Labour betrays continuing hostility to the private sector: compulsory competitive tendering is condemned as enriching private contractors.

All this will prompt fears that Labour may yet put the interests of doctors, unions and staff ahead of patients. In Opposition, the party has won votes by allying itself with vested interests. Yesterday's document is encouraging. But Labour has yet to prove conclusively that it is tough enough to challenge old NHS friends in the public interest.