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Prescription Charges (Exemptions)

Volume 264: debated on Thursday 19 October 1995

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4 pm

With the permission of the House, I wish to make a statement on prescription rate exemption arrangements in the light of the European Court of Justice judgment on the Richardson case which we received earlier today.

Mr. Cyril Richardson is a married man who, in 1993, when aged 64, was required to pay a prescription charge of £4.75. His wife aged 62 had been exempt from charges on age grounds from age 60—whereas men are not exempt until they are age 65. Mr. Richardson contended that, as a result, he suffered discrimination contrary to directive 79/7/EEC, which provides for equal treatment of men and women in matters of social security. In December 1993, he sought leave to apply for judicial review, and in May 1994 the High Court referred the case to the European Court of Justice for a ruling.

Our position has always been that the directive, which is based on article 235 of the treaty of Rome and was therefore approved unanimously by member states in 1978, did not apply to the United Kingdom's prescription charge exemption arrangements; or, if it did, those arrangements were covered by the derogation for state pension age. We have argued that the directive applies to statutory schemes against risks such as sickness or old age and to social assistance in so far as it is intended to supplement those schemes. Our case was that exemption from prescription charges is a health not a social security statutory scheme; nor is it social assistance.

Alternatively, if those arguments were not to be accepted by the court, we argued that the clear link between our exemption arrangements for prescription charges and state pension age should mean that the derogation from the directive for state pension age would enable us to operate different age exemptions for men and women, as we now operate different state pension ages.

However, as many Members of the House will be aware, the court has found in Mr. Richardson's favour. The ECJ has ruled today that our arrangements fall within the scope of the directive, and that the derogation does not apply. That means that the existing clause in the National Health Service (Charges for Drugs and Appliances) Regulations, which provides for men aged 65 and over and women aged 60 and over to receive free prescriptions, is not consistent with European Community law.

It is open to us, within the terms of the judgment, to equalise the age exemption arrangements in a number of different ways—for example, at age 65 for both men and women. But equalising at 60 is, I believe, the right approach, because it protects the rights of those women aged 60 and over who currently receive free prescriptions. The Government accept the court's findings, and will comply fully.

The purpose of my statement today is to make clear to the House and to the public the arrangements that we are making, which will come into effect from tomorrow, for men aged 60 to 64 to obtain prescriptions without charge and, where appropriate, for them to obtain reimbursement of charges.

I have accordingly today made amending regulations to equalise from tomorrow, 20 October, the age exemption arrangements for men and women at the retirement age for women. That means that more than 1 million men in England and Wales aged 60 to 64 will from tomorrow be entitled to free prescriptions on age grounds. My right hon. Friend the Secretary of State for Scotland and my right hon. and learned Friend the Secretary of State for Northern Ireland have today made similar amending regulations.

I shall clarify the position on retrospection, about which there has been ill reporting in the media. Although the judgment was not limited in retrospective effect, it recognised that national procedural rules, such as time limits, will apply. Our regulations specify a maximum period of three months for retrospective claims, and that is the period for which claims will normally be allowed.

The existing regulations also make provision for reimbursement of charges paid by people who were exempt at the time of supply. We shall operate a simple procedure allowing men aged 60 to 64 at the time of supply initially to register a claim for a refund. Details of how those who may have a claim for a refund can register their interest will be published in national newspapers tomorrow, Friday 20 October 1995, and during next week.

We will also be distributing posters and coupons to national health service contractors in the next week or so. Claims for reimbursement should be registered within three months of the date on which the drug or appliance was supplied. The judgment explicitly recognises that national procedural rules, such as time limits, will still apply, although the judgement itself was not limited in retrospective effect.

I shall make a further announcement when the arrangements for inviting claims for refunds are finalised. I am sure that hon. Members will understand why I am not in a position to bring the arrangements to the House today at such short notice. We will at that time take steps to ensure that information is widely available about how to complete the detailed claim form—including what supporting information will be required.

Letters are being sent today to all hon. Members giving information about the case, the Government's response to it, the arrangements for informing the public and the national health service about revised exemption arrangements, and the procedure for registering an interest in claiming a refund. The letter includes details of the freepost address to which eligible claimants may wish to write and which will be in newspapers tomorrow.

In addition to the announcements in the national press, officials have written today to all health authorities, community pharmacists and other interests advising them of the change. A simple black and white notice is included for local display. The information explains that, until a revised print of the prescription form is available, patients should make manuscript alterations to the declaration of exemption on the reverse of existing forms.

As I have already said, I shall make a further announcement when the detailed arrangements for claiming refunds are finalised.

The Minister's message today to Cyril Richardson is surely: "Who dares, wins."

I thank the Minister for his statement. Will he confirm that the Government were first aware that their prescription exemptions were not consistent with European law regarding equal treatment for men and women as long ago as 1985, and that the Government relied on a derogation dealing with pensions and social security benefits? Will the Minister confirm that, although the judgment is retrospective to 1979, today's announcement effectively confines retrospective reimbursement to prescriptions supplied in the last three months?

The Minister told us that the judgment explicitly recognises that national rules, such as time limits, will still apply. What existing national procedural rules is he relying on in order to restrict retrospection to a three-month period? Given that he is accepting the principle of retrospection, albeit in a very circumscribed form, will he inform the House what implications that acceptance will have for other cases that are currently before the court?

What is the cost of equalising the exemption at the age of 60 in a full financial year? Will the Minister estimate the cost of the retrospective element in his announcement today, and will he tell the House whether the money that is to pay for it is new money, or will it be diverted from resources at present allocated to other areas of patient care in the national health service?

Finally, will the Minister confirm that, when the directive was introduced, prescription charges were 20p, and that, if they had been indexed in line with inflation, today they would stand at 53p? Surely that tenfold increase in real terms exacerbates the unfairness of the situation with which the Minister has dealt today.

I will not be tempted to respond to the issues raised by the hon. Gentleman that are slightly wider than my statement today. I can confirm that the Government understood that this course of action was a possibility under regulations and a directive that were agreed to by a Labour Government in 1978 and under a policy of paying at differential ages of 60 and 65, which was also introduced by a Labour Government.

As to retrospection, the answer is very simple: yes, it is for a three-month period only. I am not in a position today to inform the House about other cases. I am sure that hon. Members will understand that, on a busy day, I wish to deal with only this matter.

The cost will be £40 million in a full year, and we estimate that the retrospective element will be about £10 million for the three-month period. I am delighted to confirm for the hon. Gentleman that those costs will not affect money that has already been allocated to direct patient care.

Does my hon. Friend agree that the European Union is a half-formed federal structure which has no means of enforcing its judgments against Britain? Does he agree that the time is rapidly approaching when the only honourable and sensible thing to say in response to the gross interference in our domestic affairs is that we will not obey the orders of the European Court?

No, I cannot say that. My hon. Friend knows full well that it is Government policy to comply with decisions of all courts when they cannot be appealed further—if the Government were to wish to appeal. That has always been the position, and it is well understood by my hon. Friend.

Will the Minister undertake not to recoup the charges by extra charges on the rest of the prescriptions?

I have already told the House that the funds allocated to patient care will not be affected. As the hon. Gentleman well knows, the allocation of health service funds through the year involves decisions being taken at the proper time.

Is not the ruling another argument for a wholesale review of prescription charges? Is it not absurd that, four weeks ago, Mr. Allan Sharpe, a pharmacist, should be fined for dispensing a prescription privately when it was cheaper for him to do so? Has the time not come to restrict exemption categories to those who genuinely cannot afford to pay, and to use the money saved to bring down the overall level of the prescription charge?

My hon. Friend will be well aware that we reviewed prescription charges in 1993. There is no intention of carrying out a further fundamental review.

I welcome the Government's announcement. Having regard to the other options available to them in terms of age of equalisation, it was wholly right that they should act quickly to end any uncertainty. However, I was puzzled as to why the Minister selected three months for the retrospective element. As I understand the judgment, there was no time limit. He suggested that he was founding on some regulations to establish that time limit. I would be interested to hear exactly why he chose to implement those particular regulations.

I am grateful to the hon. Gentleman for his support for the way in which the Government have dealt with the matter. Our main purpose was to deal with it quickly, to end uncertainty and to put in hand arrangements so that people affected can take action as quickly as possible. The rules for applying for a refund of prescription charges have a time limit of a three-month period.

I compliment my hon. Friend on the brisk efficiency with which he has made his statement, but it is a humiliating and demeaning experience to see one of Her Majesty's Ministers changing a settled policy simply because the Government have been told to do so by the European Court. If it was not possible on this occasion to pause and reflect a moment about whether that is a suitable position for the Government, at the very least will steps now be taken within the Government to consider how much longer we can be kicked around by the European Court?

I am sure that my hon. Friend will understand that I am here today to deal with the effects of this judgment. I am sure that others will have heard what he said on the wider matter.

Leaving aside the xenophobia that we have just heard from the Tory Benches, is the Minister aware that many people— although not himself, apparently—will warmly congratulate Mr. Cyril Richardson, who lives in my borough? Is this not a demonstration of a single British citizen fighting for justice, he it in the British courts or the European courts? It is a fine British tradition. Many people will warmly congratulate Mr. Richardson and many will benefit from what he has achieved.

It is certainly a case of a private individual taking determined action against a policy which had been settled in terms of equality of payment by the Government and the Opposition for quite some time. I do not for one second accept that what has happened is good. We have to comply with the finding of the court, but I believe that the settled policy was right, and the Government were right to oppose the action by Mr. Richardson until today's conclusion.

Does my hon. Friend agree that, even before the judgment, the rebate system in Britain was the most generous in Europe, with 80 per cent. prescription charges being remitted compared with only 60 per cent. when Labour was in office?

I agree with that. Of course, the funds from prescription charges—some £310 million—are devoted towards patient care. That is also to be welcomed.

Will the Minister assure the House that those who have prepayment certificates for prescriptions will be dealt with adequately in any refund arrangements that are made?

That will be the case. If they fall partially across the three-month period, there will be a proportional rebate.

I would welcome my hon. Friend's assurance that the decision will not affect patient care. Can he confirm that prescription charges represent only two thirds of the average value of medicine dispensed?

Although I welcome the statement in general, I shall press the Minister further on the way in which the change will be funded. Already, 74 out of the top 100 prescribed items cost less than £5.25. There is already dual taxation on the privilege of being ill if one is working. Will the Minister ensure that that gap will not widen as a result of his statement?

I have told the House of the general principles on which the change will be funded, which will be from general budgets. It will not directly affect patient care.

Will my hon. Friend confirm that European Council directive 79/7/EEC, which is being applied in this case, was passed unanimously during the time of the last Labour Government, and therefore with their support? Despite that, neither the Labour party nor the Government ever thought that that directive would have such an effect, until today's astonishing decision.

My hon. Friend is absolutely right. There was a consensus until the challenge. I find the European Court's judgment somewhat surprising, but that does not mean that we can do anything other than comply.

Will the Minister clarify his answer to the hon. Member for Colchester, South and Maldon (Mr. Whittingdale), when he said that prescription charges were last reviewed in 1993? The previous Secretary of State, in her response to the Health Select Committee's report on the NHS drug budget, promised to review a series of anomalies. I will put one of them to the Minister.

Chronic diabetics are exempt from prescription charges but a new drug, Navopen, has been introduced in such a way that the Government are insisting that chronic diabetics must buy their own needles, which should surely be included in prescriptions. It is inconsistent to provide the drug free of charge, but not the means of administering it. Today, I wrote to the Secretary of State on behalf of a constituent who is a student, who finds it extremely difficult to buy needles to enable her to administer that drug.

I congratulate the hon. Gentleman on reinforcing the point of his letter to my right hon. Friend by raising it in the context of my statement. I was referring to the wholesale review of prescription charges in 1993. No such review is in prospect.

Why did the Government choose to implement this humiliating decision today, Father than put a proposition to the House to decide whether to implement it in this age or in some other age? What is the European requirement to implement the judgment immediately? Was it the Government's choice to do so, without seeking the advice of the House and approval for the expenditure?

As the European Court is becoming a superior, non-elected Government, should not the British Government think terribly carefully before agreeing to further concessions of our freedom and liberty—as they have before, despite clear warnings by hon. Members on both sides of the House?

I have no doubt that colleagues responsible for wider matters will have heard my hon. Friend's remarks, not for the first time. The Government came to the House quickly, simply because of fairness, not compulsion. If the public must claim within a three-month period, it is important to make the arrangements as clear as possible, so that proper claims can be registered.

Is not the truth that the Government—faced with the judgment, and having calculated that it will cost £40 million in a full year and £10 million for retrospection—have already begun to devise ideas for clawing that money back in further prescription charges, with the result that the people will not benefit at all? That money will not come from the Exchequer. If prescription charges rise above the official cost of living index next time, millions of people will know that they have been conned again by this lousy, rotten Tory Government.

Can my hon. Friend make it clear that the regulations concerning three months' retrospection for claims have been in place a long time? They were implemented not because anybody anticipated the decision in the Richardson case, and the European Court was well aware of the existence of those regulations when it gave its decision.

My hon. Friend is right. The fact of the existence of the regulations was before the court and was known to it when it came to its conclusions.

The Minister has confirmed that decisions taken by the supreme European Court cannot be challenged. How confident is he that retrospection of three months cannot be challenged in courts in England or Scotland? Is it not the case that about two years ago the European Court of Justice, in relation to the equality directive, made a decision in a Dutch case involving the Dutch Government that retrospective payments in social security cases could be made up to 1 April 1992? How confident is the Minister that his decision on three months is unchallengeable?

I have, as I am sure the House has, a great deal of sympathy for my hon. Friend in the predicament in which he finds himself. Will he tell the House when Britain decided that decisions as to who should and should not pay for their prescriptions should be made by a bunch of foreign judges, who do not have to find the money, rather than a democratically accountable Government, who do? Were the British people aware that such a decision was taken? If they were not, is it not a constitutional necessity that our powers should be regained?

My hon. Friend knows that I do not intend to wander down the tempting path that he and other of my hon. Friends have offered me. I am restricting myself to the statement. I have no doubt that he will make his views known in his persistent and regular way to others within the Government.