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Is there really 'a secret plan' to privatise NHS’? Labour leadership contender Owen Smith has attacked what he calls a 'secret' Conservative plan to privatise the National Health service.

Labour leadership hopeful Owen Smith has accused Jeremy Corbyn of using his previous career as a lobbyist for the pharmaceuticals industry as “a stick with which to beat me”.

In a speech on the NHS at the University of Salford on Monday, Smith said he was not ashamed to have worked for companies that make medicines to treat conditions such as cancer, diabetes and asthma, and that big pharmaceutical firms provided an important service to the NHS.

“The NHS doesn’t make medicines. It helps with research, but it can’t make medicines,” he said. “It would be physically impossible for the NHS to be able to trial medicines around the world, so of course we will always rely on external forces, companies essentially, to be able to make medicines.”

Analysis How much is the government really privatising the NHS?
Figures show privatisation to be less of an explosion that Owen Smith warns about and more a gradual, inexorable rise in outsourcing of services

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Smith’s early campaign has been dogged by accusations that he lobbied for further private sector involvement in the NHS during his time working for pharmaceuticals companies Pfizer and Amgen. At the launch of his campaign in July, Jeremy Corbyn said medical research should not be “farmed out” to big companies such as Pfizer, but should be funded through the Medical Research Council.

The shadow chancellor, John McDonnell, later said that Corbyn’s comments had been misinterpreted, announcing that Labour would seek to reform or scrap a £1bn tax relief designed to promote innovation in companies, including in pharmaceuticals.

Speaking to the Guardian following Monday’s speech, Smith said: “Medicines have always been developed in the private sector and provided to the NHS. It was frankly a bit silly of Jeremy to say that all medicines should be developed in the NHS.

“That’s obviously totally implausible. It would bankrupt the NHS even if it were possible, which of course it isn’t, and he was just using the fact that I’ve worked for big biotech companies as a stick with which to beat me.

“Truthfully, it’s useful to have somebody who understands how big companies operate and it’s completely wrong to suggest that that in any way means I’m in favour of private provision. I’ve never been in favour of it.”

Asked if he had any criticism of his former employers, Smith said: “Yeah, I think medicines should be cheaper, generally. That’s the key criticism I have. I think medicines should be cheaper across the world.”

In his speech, the former shadow work and pensions secretary spoke about the threat of creeping privatisation in the NHS and highlighted Department of Healthfigures showing that spending on private sector NHS providers had doubled under the Conservatives, from more than £4bn in 2009-10 to £8.7bn in 2015-16. Smith has pledged to increase health spending by 4% a year if he becomes prime minister.

Speaking to an audience of supporters and journalists in Salford, Smith argued that the last Labour government had opened the door for the Tories to introduce an increasing amount of private sector involvement in the health service.

“I do think the last Labour government did use private sector providers in order to clear [waiting lists for] hip operations and knee operations and cataracts, and for those individual patients I think that was a worthwhile thing because we inherited – as we will again – massive waiting lists for those key bits of surgery,” he said.

“The reality is I think we failed to appreciate the way in which the Tories would use those words and use the fact Labour had relied on some private sector provision as a Trojan horse for what they wanted to do, which was to break up, denationalise and privatise the NHS. I think perhaps we were naive about the extent to which they would usurp those themes and subvert them.

“I think we need to be clear in this generation, as I am, that we have red lines and those are that we want this NHS to be publicly owned, publicly delivered – 100% if possible. There will always be some instances, as I said, medicines, that are effectively produced in the private sector and purchased by the NHS, but we should be very, very clear that what we want is something that represents that fundamental Labour belief.”

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