Dobson fights over free prescriptions

Frank Dobson, the Secretary of State for Health, made it clear that cuts in free NHS prescriptions for pensioners would be "over my dead body", in spite of Treasury pressure for a comprehensive review of all government spending.

Announcing a year-long review yesterday in the Commons, Alistair Darling, the Chief Secretary to the Treasury, refused to rule out cuts in free prescriptions when he was challenged by the left-wing Labour MP Dennis Skinner over reports which alarmed pensioners' groups including Age Concern.

Mr Darling said: "We have made it clear all aspects have to be examined. It would be quite wrong to exclude problems in relation to prescription charges where there are anomalies, where one illness is recognised for a free prescription and other are not. The Secretary of State for Health will be looking at that."

However, Mr Dobson made it clear earlier that while he would carry out the wide ranging review demanded by the Treasury, cuts in free prescriptions to pensioners would be politically unacceptable. He told officials it would only go through "over my dead body".

Underlining the thoroughness of the review, ministers have been ordered to look at selling off public assets which are not needed with a view to to reallocating the sums raised to public spending where it is "needed most". The Department of Health is one of the Whitehall ministries which is being forced to "think the unthinkable" by Gordon Brown, the Chancellor, in the search for ways to improve services without increasing budgets.

Other cash-raising ideas being looked at include road pricing and road tolls which could raise revenue and cut traffic in towns, helping to meet the tough anti-pollution targets set by John Prescott, the Secretary of State for Environment and Transport.

Hotel charges could be introduced in hospitals to raise money from NHS patients who wish to pay for better private-style rooms, with more private facilities. Hospitals already charge for providing private televisions and telephones to patients.

The review will look at the possibility of raising more money through charges for visiting art galleries and museums.

Library charges could be included in the year-long review, and new taxes on town-centre car parks could be studied to persuade more commuters to use public transport.

Mr Darling said: "The review will be thorough and far-reaching. All departments and all ministers will be involved. It will take 12 months to complete and its conclusions will inform a new set of public spending plans for the rest of this Parliament. It will take the long-term view."

Kenneth Clarke, the former chancellor, said the review was "all smoke and mirrors" to allow the Government to raise spending and taxes.

Alan Simpson, secretary of the left-wing Campaign Group of Labour MPs, said he would welcome a hypothecated tax for the NHS, but he signalled there would be unrest in the party if more radical charges were introduced for public services.

"Charging is the least efficient way to raise taxes," he said. "I would urge Gordon Brown to think about introducing three measures in his Budget: lift the ceiling on National Insurance contributions; double National Insurance levels for those earning over pounds 100,000 a year; and change employers' National Insurance Contributions to a fixed percentage of gross profits."

"There is the central dilemma facing the Labour government and there are contradictions in our policies which we are going to have to face up to sooner or later. If we want a flexible workforce, we will have to restore a universally-based welfare."