Ed Miliband pledges 5% profit cap on private NHS providers but whose record is he trying to undo?

Ed Miliband pledged to draw back the involvement of private companies in the National Health Service today as he launched his election campaign in east London.

A Labour government would impose a 5 per cent cap on the amount of private companies can make on providing NHS services.

The cap on profit would be set on outsourced healthcare contracts worth more than £500,000, Mr Miliband said, to ensure “patients are always put before profit”.

Private firms would also be blocked from “cherry-picking” lucrative treatments and the NHS would become the “preferred provider” for all services.

But by vowing to halt "the tide of privatisation" in the NHS, he has invited accusations over hypocrisy and questions over whose record he is trying to undo: that of the last Labour government or the Coalition.

This is because analysis by Newsnight of privatisation in the NHS over the last 10 years shows the rate of outsourcing under the last Labour government increased at more than double the rate it has over the last five years under the Coalition.

However Labour claimed the 60 per cent increase in private sector contracts in the NHS since 2010 had led to a fragmentation of services.

Outsourcing “still has a role to support the NHS”, an aide of Mr Miliband insisted, but added: “we don’t believe the private sector should be able to fragment the NHS.

The number of private sector contracts handed out would fall under a Labour government, the party said.

There are also questions over how it would impose a cap on each company’s profits. Labour said it would enforce “open book accounting,” but just how that would work in practice is hard to imagine and critics pointed out that firms would simply employ skillful accountants to get around the rules.

Faced with the stats showing Labour had presided over a greater rate of privatisation in the NHS than the Coalition, Shadow Health Secretary Andy Burnham insisted the market was "not the answer" for the NHS when he appeared on Newsnight earlier this year.

It was Mr Burnham himeself who was the last Labour Health Secretary. Here he is explaining why his government oversaw such a spike in privatisation:

Mr Miliband announced his latest health policy overlooking the Olympic Park in Stratford.

"We need to rescue our NHS from this Government, and we will," he told Labour activists from his lofty position at the Orbit tower.

"Just think about how far backwards the NHS has gone in the last five years. People waiting longer and longer to see a GP. Ambulances queuing up outside hospitals, because A&E is full. Even a treatment tent erected in a hospital car park.

"For all the promises, for all the air-brushed posters, David Cameron has broken his solemn vow to the British people when it comes to our NHS.

"And that is even before their plan for the next few years. Cuts even deeper than those we have seen in this last five.

"Well, that's not the future I believe in. That's not the future you believe in. And it's not the future the British people can believe in either.

"So we will turn around our NHS. With a Labour government there will be a new double-lock to protect our National Health Service, guaranteeing proper funding and stopping its privatisation."