House of Commons

Tuesday 6th September 2011 Commons Chamber

Tuesday 6 September 2011

The House met at half-past Two o’clock

Prayers

Tuesday 6th September 2011 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

London Local Authorities and Transport for London (No.2) Bill [Lords] (By Order)

Second Reading opposed and deferred until Tuesday 13 September (Standing Order No. 20).

Oral Answers to Questions

Tuesday 6th September 2011 Commons Chamber

The Chancellor of the Exchequer was asked—

[Clive Efford (Eltham) (Lab)]

1. What recent assessment he has made of the level of taxation levied on the banking industry.

[The Chancellor of the Exchequer (Mr George Osborne)]

Her Majesty’s Revenue and Customs published details of total pay-as-you-earn and corporation tax receipts from the banking sector for the first time on 31 August. The official statistics show that tax receipts from the sector increased from £17.3 billion in 2009-10 to £21 billion in 2010-11. A number of other taxes are incurred by the banking sector that the Office for National Statistics did not include in the figures, including the new bank levy introduced by this Government, which we expect will raise an additional £2.5 billion net each year, which is more in each and every year than the previous Government raised in their one-off payroll tax.

[Clive Efford]

I am grateful to the Chancellor for that answer, but the truth is that the High Pay Commission has just published a report demonstrating that high executive pay bears no relation to the performance of companies and that nowhere is this more starkly illustrated than in the banking sector. Meanwhile, youth unemployment is going up. Is it not time we made the banking sector pay its fair share in order to do something for the young unemployed in this country, as advocated by the Opposition?

[Mr Osborne]

That is why we introduced the bank levy, which Labour had 13 years to introduce but did not. It raises £2.5 billion. We are also taking action to clamp down on tax avoidance. We recently proposed a measure to tackle something called disguised remuneration, whereby high earners, often in the financial services sector, disguise their income to avoid tax, but the Labour party voted against the measure.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

As we are discussing banking, may I again put it to the Chancellor that further delay in ring-fencing retail banking from investment banking can only perpetuate the appalling shibboleth that big banks cannot fail? Until we debunk that shibboleth, the capitalist system will remain at risk.

[Mr Osborne]

My right hon. Friend makes a powerful point. We must learn the lessons of what went wrong in the regulation of our banking system and ask deep questions about how, as an economy, we underwrite that system. That is why the Government asked John Vickers and his fellow commissioners to look at the structure of the banking system and at how we can ensure that Britain can be home to global banks but, at the same time, the British taxpayer can be protected should those banks fail. Of course, John Vickers will publish his final report next week and I am sure that there will be plenty of discussion about it.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

With the future jobs fund and education maintenance allowance abolished, Labour Members have been urging the Chancellor to repeat the bank bonus tax on top of the bank levy in order to get young people into work. The Chancellor claims that the economy is recovering, unemployment is falling and that such action is unnecessary, so will he tell the House how many more young people, compared with a year ago, are now not in education, employment or training?

[Mr Osborne]

The number of 16 and 17-year-old NEETs has actually come down, and more than 500,000 new jobs have been created in the private sector over the past year. The right hon. Gentleman talks about the bonus tax, and I will use not the advice I have been given by Treasury officials to respond, but the advice I have been given by the previous Chancellor of the Exchequer, someone we know he is very close to. The previous Chancellor said this of the bonus tax, and he after all is the man who introduced it:

“It will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and... will find all sorts of imaginative ways of avoiding it”.

That is why he did not want it to be anything more than a one-off tax, and that is why we introduced a much more permanent and sustainable tax on the banks, which the right hon. Gentleman never introduced when he was City Minister. It is a permanent bank levy that raises more net every year than the one-off bonus tax did.

[Ed Balls]

Unemployment is rising and the stock market is plummeting—it is no surprise that the Chancellor does not want to answer the question about youth unemployment. Let me tell the House that the number of young people between 18 and 25 out of work and not in education, employment or training has gone up in the past year by 18%: 119,000 more young people are unemployed. Let me tell the Chancellor what my right hon. Friend the Member for Edinburgh South West (Mr Darling) said on “Newsnight” last night:

“The government, by going so fast, is really strangling the economy…if you go too fast you stall”—

[Mr Speaker]

Order. I think the shadow Chancellor will want to refer to taxation levels on the banking industry.

[Ed Balls]

The argument that I am making is that the Chancellor is ignoring the case for repeating the bank bonus tax for a second year, even though youth unemployment has gone up by 18%—119,000 more. Let me ask him a second—

[Mr Speaker]

Order. I say to the shadow Chancellor that what we need now is a very brief question. We need to move on; there are a lot of questions to cover.

[Ed Balls]

The question that people will be asking is if the Chancellor will not change his mind on the bank bonus tax, on VAT and on the pace of deficit reduction, why is he now changing his mind on stalling bank reform? He said that we were all in it together. Why is there one rule for the banks and another rule for everyone else?

[Mr Osborne]

Now we can see why the former Chancellor has said that the Labour party had no credible economic policy. The shadow Chancellor had all summer to think of that question, and the best he came up with was that we were not regulating the banks. He was the City Minister when the City exploded. We have taken action better to regulate the banks. We set up the commission that will report next week. As for downgraded numbers, the fastest falling numbers around here are his economic credibility numbers.

[Mr John Redwood (Wokingham) (Con)]

It would be good to get more tax out of RBS, a state-owned bank, but unfortunately it is still loss making. Will the Chancellor or a relevant Minister have an urgent meeting with its executives so that they can have a better plan for cutting risks, selling assets and making some money for the taxpayer?

[Mr Osborne]

My right hon. Friend is, of course, right that the British banking system has had its challenges—not least over the summer, with its share prices. We are in regular discussion with the banks about that, of course, and we will of course have many discussions about the future structure of banking. We need a profitable banking sector that lends to the real economy. We have in place targets to see an increase in lending to small businesses. But my right hon. Friend is absolutely right that a key part of the recovery is a return to health for the financial services industry and the financial system.

[Vernon Coaker (Gedling) (Lab)]

2. What assessment he has made of the effects on the economy of recent trends in domestic energy prices.

[The Economic Secretary to the Treasury (Justine Greening)]

The Office for Budget Responsibility is now responsible for independent economic and fiscal forecasts for the Government, and that includes taking account of trends in energy prices and their impact on the economy, including on inflation. The OBR will publish a fully updated forecast in the autumn.

[Vernon Coaker]

Thousands of people in my constituency of Gedling and millions across the country will be disappointed by that response from the Minister. Consumer Focus has said that, on average, energy bills will go up by £200 a year, which means that this winter many people —pensioners and families—will be worried about switching on gas and electricity. Has the Minister met the energy companies to discuss that, and will she specifically outline some measures that she and her Government intend to take so that people are not afraid to switch on the heating this winter?

[Justine Greening]

The hon. Gentleman is right to raise the issue because it is important. The challenge that we all face is to make sure that energy bills are affordable not just this winter—the point that he makes—but in winters in 10 and 20 years’ time. The problem that we have as a country is our dependency on fossil fuels. In the long term, we need to get ourselves off that dependency so that we are not so blown about by the international winds that see commodity prices go up and down. In the short term, we are taking steps to support the most vulnerable through the Warm Homes discount. Next year, we will introduce the green deal to help energy efficiency. The hon. Gentleman asks whether we have meetings with energy companies, and of course we do every day. I am sure that he will also—

[Mr Speaker]

Order. Progress is very slow, and it needs to get faster.

[Mr Mark Spencer (Sherwood) (Con)]

The Minister will be aware of how rapidly fuel and energy prices have increased. Am I right in thinking, however, that if the Chancellor had not taken action in the Budget, fuel prices would be 6p a litre higher today?

[Justine Greening]

My hon. Friend is absolutely right. The action that we took, which was part of a £1.9 billion package to support motorists, means that fuel duty was 6p lower than it otherwise would have been under the previous Government’s proposals.

[Mr David Hanson (Delyn) (Lab)]

The Minister will know that the rise of several hundred pounds in energy costs will hit businesses hard, and that on top of VAT and price and pay freezes it will particularly hit consumers and pensioners. What is her assessment of the level of that price rise? How many meetings has she had with energy companies about the price of energy? What does she intend to do about the price of energy other than freezing the level of winter fuel payments for pensioners?

[Justine Greening]

I think I have answered those questions already; and perhaps the right hon. Gentleman should speak to his Back Benchers about their asking his question before he does. I know that it is his wedding anniversary today, and I hope that I do not upset him too much before he has dinner with his wife tonight. I can again assure him that we are absolutely committed to making sure that the Warm Homes discount scheme will support the most vulnerable people in our country so that they can afford to heat their homes.

[Helen Jones (Warrington North) (Lab)]

3. What recent assessment he has made of the effect on inflation of the increase in the basic rate of VAT.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. The OBR published a full analysis of developments and the prospects for inflation in its forecast at Budget, and that can be found at its website. The Office for National Statistics estimates that the impact of the VAT rise on consumer prices index inflation was 0.76 percentage points.

[Helen Jones]

The Minister has failed signally to answer the question. Will he tell the House why only three European Union countries—Estonia, Lithuania and Romania—have inflation higher than the rate in this country? Is it not true that the failed economic polices pursued by the Treasury and the decision to raise VAT have more than doubled the rate of inflation compared with the Government’s target? When is he going to accept responsibility for that and do something about it?

[Mr Gauke]

I am afraid that the hon. Lady might not have listened to my earlier answer. The fact is that the primary cause of the increase in inflation has been global commodity and energy prices. It is also worth pointing out that our currency depreciated in value quite significantly a couple of years or so ago. The VAT increase was necessary in order to reduce the deficit—a policy that was recognised by the previous Chancellor of the Exchequer.

[Gavin Williamson (South Staffordshire) (Con)]

Did my hon. Friend inherit any work by the previous Government on plans to increase VAT if they had won the general election?

[Mr Gauke]

My hon. Friend will be aware that we are not privy to the advice that was given to previous Governments. However, I look forward to reading tomorrow confirmation that the previous Chancellor believed that it was a wise course of action to increase VAT.

[Mike Freer (Finchley and Golders Green) (Con)]

4. What recent estimate he has made of the public sector borrowing requirement.

[The Chief Secretary to the Treasury (Danny Alexander)]

The July public sector finances release issued by the Office for National Statistics estimates that the out-turn for public sector net borrowing in 2010-11 is £142.7 billion, or 9.7% of gross domestic product—£14 billion lower than in 2009-10.

[Mike Freer]

Citibank economist Michael Saunders recently said that

“the major risk to the UK’s fiscal outlook and credit rating would be if the coalition fails to stay the course on fiscal consolidation.”

Does my right hon. Friend agree?

[Danny Alexander]

Yes, I very much agree with that. As my hon. Friend will know, the need to tackle the enormous economic problems that we inherited from the previous Government, including the enormous budget deficit, was the founding purpose of this Government. It is a purpose that we intend to see through, and he can be reassured that we will stick to our plans.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Given the Government’s poor performance on growth, lower tax receipts and higher welfare spending, will the Chief Secretary repeat—a simple yes or no answer will do—whether the Government are still committed to their target of falling public debt as a percentage of GDP by 2015? Yes or no?

[Danny Alexander]

Yes.

[Mr David Nuttall (Bury North) (Con)]

5. What recent assessment he has made of the financial crisis in the eurozone.

[Glyn Davies (Montgomeryshire) (Con)]

12. What recent assessment he has made of the financial crisis in the eurozone.

[The Chancellor of the Exchequer (Mr George Osborne)]

The financial crisis in the eurozone is extremely serious. Fortunately, Britain is not in the euro; unfortunately, however, we are not immune to the instability on our doorstep. The euro area must implement its policy commitments to address the crisis, made most recently at the July summit. As I have said, the euro area should follow the remorseless logic of monetary union with greater fiscal integration. We must ensure that we are not part of that integration and that our national interests are protected and promoted at all points.

[Mr Nuttall]

I thank the Chancellor for that reply. Given that the crisis in the eurozone was caused by some member states having too much debt, would it not be a good idea—rather than increasing those debts with further bail-outs—for this country to press for the European treaties to be amended to allow a country to leave the euro while remaining in the European Union if it still wished to do so? As things stand, that is not possible.

[Mr Osborne]

As my hon. Friend knows, the treaty does not provide for a member state to leave at the moment, and there is no immediate prospect of major treaty renegotiation—something that the German Government have made very clear again this week. In other words, we need to focus on the task at hand, which is implementing all the agreements, communiqués and commitments made in recent months by the eurozone. That is absolutely crucial to the stability not just of the eurozone but of the wider global economy.

[Glyn Davies (Montgomeryshire) (Con)]

Is the Chancellor aware that under the previous Labour Government, of whom the current shadow Chancellor was a prominent member, a euro preparations unit with a staff of 17 worked for 13 years on 11,500 documents to prepare Britain for joining the euro?

[Mr Osborne]

rose—

[Mr Speaker]

Order. I am grateful to the hon. Member for Montgomeryshire (Glyn Davies), but his question bears no relation to the responsibilities of the current Government and we will therefore leave it there.

[Mr Julian Brazier (Canterbury) (Con)]

Would my right hon. Friend accept that the fact that the euro has strengthened as a currency indicates that the markets believe that the weaker countries will not be able to push water up hill for much longer and are bound to drop out of the euro before very long?

[Mr Osborne]

I do not think that it would be appropriate for me to comment directly on the value of the euro, but I would observe that we have a weak US dollar and that that may have had an impact on the value of the euro. As I said just now, it is important for us to focus on the task in hand, which is implementing the agreement most recently signed on 21 July by the eurozone. Of course we can and should have a discussion about the future of the euro and its governance arrangements—and that is important—but the euro is here to stay and we have to ensure that it works for Europe. I do not want Britain to be part of the euro, and there is no prospect of that happening—[Interruption.] Labour Members seem to forget that they are still committed in principle to joining the euro. This Government will not join the euro, but it is in our interests that the euro works.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Is the Chancellor aware that, with the exception of Portugal, growth among member states of the eurozone is higher than ours? If fiscal union is to take place, and there is to be a common euro bond, in which order does he think they should come?

[Mr Osborne]

As I have been saying in recent weeks, we need to follow the remorseless logic of monetary union. That was one of the reasons I was against Britain joining the euro—I thought it would lead to greater fiscal integration and common budget policies. There is obviously an active debate about what that might mean, and I would suggest that the first thing that the eurozone countries need to do is to implement the package agreed on 21 July.

May I correct the hon. Gentleman? It is not the case—sadly—that Britain has the slowest growth in Europe. Actually, the problem is that German growth in the last quarter was 0.1% and French growth for Q2 was zero. That is the challenge—a eurozone where growth is faltering, and the situation in the United States. We have to deal with these international problems as well as addressing the very serious problems that we inherited.

[Mr Speaker]

I am grateful to the Chancellor. We do not want the slowest growth, but neither do we want the slowest questions and answers.

[Mr Andrew Tyrie (Chichester) (Con)]

The Chancellor has made it clear that he thinks that a monetary union requires a fiscal union. Can a credible fiscal union be put in place without a treaty change?

[Mr Osborne]

I think that we can take important steps towards greater co-ordination of fiscal policy by implementing, as I say, the agreements that the eurozone came up with before the summer. That is the task at hand now. Speculating now about major treaty change is unrealistic. It is not going to happen in the next few years. It would take several years to bring about such a major treaty change and get it ratified by all the national Parliaments, even if those Parliaments agreed to it. The challenge this autumn is to bring greater stability to the euro’s governance arrangement, which is what our colleagues in the EU want to do.

[Ms Angela Eagle (Wallasey) (Lab)]

The Chancellor recently boasted that Britain is a safe haven from the problems in the eurozone, so will he tell us which EU countries have grown more slowly than the UK in the past 12 months, not in the last quarter?

[Mr Osborne]

As I said, this year, unfortunately, the German economy, the French economy and other major eurozone economies—[Hon. Members: “Ah!”] If Opposition Members do not want to look at the most recent numbers, it is no wonder they have not got a credible economic policy. Until they get one, and take a view on the eurozone and what is happening in Germany, France and the United States, they are not going to be taken seriously, as the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), has reminded them.

[Ms Eagle]

I do not think that the Chancellor knew the answer to that question, but today’s euro figures have revealed that only two countries—Romania and Portugal—have done worse on growth than the UK in the past year. Only yesterday, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), said from the Dispatch Box that there is a crisis of growth in this country. Was not the Chancellor’s friend, the new head of the IMF, Christine Lagarde, right at the weekend when she said that

“growth is necessary for fiscal credibility… We know that slamming on the brakes too quickly will hurt the”

economy “and worsen job prospects”?

We know that he will not listen to us, but why does the Chancellor not listen to sound advice from his friends, including, we hear, on this weekend’s draft G7 statement, which aims to slow the pace of deficit reduction—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady. I think that we have got the gist of it.

[Mr Osborne]

I can tell the House that Christine Lagarde will be in London on Friday. We will hear what she has to say then.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

6. What recent discussions he has had with his international counterparts on steps to reduce Government budget deficits.

[The Chancellor of the Exchequer (Mr George Osborne)]

At the last G20 summit, advanced countries committed to implementing clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans, differentiated according to national circumstances. I will further discuss fiscal consolidation plans in the G7, G20 and IMF meetings later this month.

[Paul Maynard]

Does the Chancellor agree with the IMF’s most recent assessment that strong fiscal consolidation remains essential?

[Mr Osborne]

That is, of course, absolutely what the IMF said in its recent article IV assessment—and we remember the article IV assessments at the end of the previous Labour Government. It asks explicitly whether the UK Government should change their policy, and it says no. That is the advice of the IMF. Last July, the Labour party voted against Britain paying its subscriptions to the IMF. Frankly, I do not think that Labour Members should talk about the IMF in Treasury questions until they agree with paying the subs.

[Rachel Reeves (Leeds West) (Lab)]

If the Office for Budget Responsibility downgrades its forecast for growth for the fourth time when it reports later in the autumn, and revises up its forecast for Government borrowing, would the Chancellor regard that as a success or failure of this Government’s economic policy?

[Mr Osborne]

Of course, the Government want economic growth and prosperity. We want a stable international situation in which we can trade. We have to take account of the fact that major trading partners, such as Germany, France and the United States, have seen either no growth or very limited growth as well. That is the challenge we face. As the right hon. Member for Edinburgh South West (Mr Darling) reminded us at the weekend, we can either have a credible economic policy that takes note of what is going on in the world or, as he put it, we cannot even be at the races.

[Mrs Anne McGuire (Stirling) (Lab)]

7. What recent assessment he has made of the potential effects on consumer confidence of the change in the basic rate of VAT.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Sustainable public finances will support confidence in the medium term. Decisive action taken by the Government in the spending review and the June Budget, including the increase in VAT, will put the public finances and spending on a sustainable footing.

[Mrs McGuire]

The Stirling constituency has a large number of jobs tied up in tourism and hospitality. On 1 July, the Irish Government introduced a temporary reduction in the rate of VAT on goods and services related to the hospitality sector, realising that such a reduction has the potential to kick-start economic growth; indeed, the rate is now 11% less than the VAT rate in the UK. Given stalling UK economic growth figures, does the Minister not accept that he, too, should consider a temporary change in the rate for the sector, and if not, why not?

[Mr Gauke]

I have had meetings with representatives from the tourism industry at which they have made their case. We will of course keep all taxes under review, but we have to bear in mind the state of the public finances, our limited room for manoeuvre and concerns about adding complexity to our VAT system. None the less, we will look at those arguments.

[Mr Andrew Turner (Isle of Wight) (Con)]

8. What fiscal measures he is taking to reduce the costs of businesses which employ less than 25 staff.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Small businesses play a vital role in the economy and the Government have taken a number of steps to support them. The Government have provided support for small businesses and employers by reversing the previous Government’s planned £3 billion tax on jobs, reducing corporate taxes and introducing a moratorium on new domestic regulation for micro-businesses.

[Mr Turner]

Does the Minister agree that we should make it as simple as possible to set up small businesses in the UK and get rid of unnecessary regulations and red tape?

[Mr Hoban]

My hon. Friend is absolutely right. We need to reduce the burden of red tape to encourage small businesses to set up and to create more jobs. That is one reason why, for example, we introduced a moratorium exempting micro and start-up businesses from new domestic regulation for three years from 1 April 2011.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

A year ago the Chancellor claimed that 400,000 small business start-ups would be assisted by the national insurance holiday in the regions. To date the figure is, I believe, 5,000. Will the Chancellor undertake to bring a report before the House saying how many new jobs have been created by those 5,000 new start-ups and what the cost to the Exchequer has so far been per job?

[Mr Hoban]

The hon. Gentleman should be aware that HMRC is writing to all new businesses set up in the last 12 months to ensure that they are aware of the scheme and to encourage them to apply for it. It is important that they do so, but this is just one of a series of measures that we have taken to ensure that more new jobs are created in the private sector. I would have thought that the hon. Gentleman welcomed the fact that over the last year there have been 500,000 net new jobs created in the private sector.

[Elizabeth Truss (South West Norfolk) (Con)]

9. What steps he is taking in respect of further supply-side reform of the UK economy.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

“The Plan for Growth”, published alongside the Budget this year, sets out the Government’s plan to put the UK on a path to sustainable long-term economic growth. The second phase of the Government’s growth review will report later this year.

[Elizabeth Truss]

I thank the Minister for his answer. In the last decade the UK has fallen from 14th to 89th in terms of burden of regulation and from 14th to 95th in terms of extent of taxation. Does the Minister agree that we should be freeing up companies, rather than spending money that we do not have, to drive economic growth?

[Mr Hoban]

My hon. Friend is absolutely right. Of course, it is part of the previous Government’s legacy that our competitiveness fell so far behind that of our international competitors. That is why we have taken action to reform corporation tax, for example, so that we have one of the best and most competitive regimes in the G20 and more businesses are encouraged to come to the UK. It is also why we are tackling regulation and red tape in the economy, which is why, as I said earlier, we have seen 500,000 net new jobs created in the private sector. That is three and a half jobs in the private sector for every job lost in the public sector, which shows the progress that we have made over the last year.

[Stewart Hosie (Dundee East) (SNP)]

Both this Government and the previous one have taken an axe to tax allowances for investment on the supply side of the economy—for example, the abolition of the industrial buildings allowance under Labour and the reduction of the annual investment allowance of £100,000 to only £25,000. Have the Government turned their face away entirely from the reintroduction of tax allowances, or will they listen to representations that demonstrate the positive growth in investment on the supply side from such tax allowances?

[Mr Hoban]

The reforms to allowances were used to help to fund measures such as the reduction in corporation tax rates for large companies and the reduction in the small companies’ tax rate from the 22p proposed by Labour when it was in government to 20p. We are therefore seeing changes in the rate of tax paid by businesses of all sizes, which is helpful in encouraging economic growth and job creation.

[John Robertson (Glasgow North West) (Lab)]

10. What his policy is on the pay of public sector workers earning less than £20,000.

[The Chief Secretary to the Treasury (Danny Alexander)]

At the June Budget in 2010, we announced that public sector workers earning £21,000 or less would be protected from the two-year pay freeze and receive at least £250 in each year.

[John Robertson]

I hear what the right hon. Gentleman is saying, but not giving those workers a pay rise of £250 as the Government said they would is tantamount to their not getting it. Freezing pay is not an increase. What is he going to do about this? Is he going to honour the undertaking in the Budget last year to give those hundreds of thousands of workers £250 or not?

[Danny Alexander]

The £250 increase applies to all work forces under ministerial control, and it was introduced this year. It will be carried through again next year to ensure that people on low incomes in the public sector continue to receive a pay rise.

[Sajid Javid (Bromsgrove) (Con)]

Will the Chief Secretary to the Treasury assure us that, in drawing up plans on public sector pay, the Treasury has not been impeded by a brutal regime in No. 10 Downing street?

[Danny Alexander]

I can certainly assure my hon. Friend of that. Unlike under the previous Government, No. 10 Downing street and the Treasury work very well together on these issues.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

11. What recent assessment he has made of the level of economic growth.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Our economic policy objective is to achieve strong, sustainable and balanced growth, more evenly shared across the country and between industries. The independent Office for Budget Responsibility’s forecast, published at the Budget, takes full account of the policy measures announced in the spending review and in Budget 2011. The OBR forecast that the economy would grow throughout 2011, and in every year of the forecast. It will publish its updated forecast in the autumn.

[Mr Thomas]

As the level of economic growth over the past 12 months was lower in Britain than in the rest of the G7, is it not about time that the Minister had the courage to persuade his right hon. Friend the Chancellor to start work on a plan B?

[Mr Hoban]

It has been very clear, listening to all the international commentators talking about what is happening in the UK economy, that their advice has been to stick to the course and stick to plan A. That is the action that this Government are committed to—[Interruption.] This is interesting. We have one plan; the previous Government seemed to have more plans than they knew what to do with, and that is why they lost their credibility.

[Claire Perry (Devizes) (Con)]

What does the Minister think is more likely to encourage growth: cuts in corporation tax or the increases in national insurance that Labour was proposing?

[Mr Hoban]

In our first Budget we were able to reduce corporation tax and set out a clear path to reduce it over the lifetime of this Parliament. We were also able to reverse Labour’s damaging jobs tax.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Will the Minister draw to the attention of the Chancellor the fact that economic credibility affects all Treasury Ministers in due course, and that in his case it is affecting him rather earlier than he might have thought? Can he not see that, with a lack of growth, he will not hit his deficit reduction target? Without hitting that target, he will not realise his plan, and without his plan—which is already in shreds—he will lack credibility, too.

[Mr Hoban]

I wonder whether the hon. Gentleman’s remarks about the loss of credibility for Treasury Ministers reflect his own experience.

[Jake Berry (Rossendale and Darwen) (Con)]

Given how badly prepared the UK economy was for the financial crisis, does the Minister think that it was delusional to believe that its effects would be over in six months?

[Mr Hoban]

The previous Prime Minister thought that what we now know to have been the longest and deepest recession since the war would be over in six months. That demonstrates the degree of delusion that existed under the previous regime. We are taking the tough and necessary decisions to tackle the legacy that we have been left by our predecessors.

[Andrew Selous (South West Bedfordshire) (Con)]

13. What recent assessment he has made of the effects on the economy of the public sector borrowing requirement.

[The Chief Secretary to the Treasury (Danny Alexander)]

Sound public finances are essential for sustainable economic growth. The action that the Government have taken to reduce public sector borrowing will help to mitigate the risks to the recovery, underpin private sector confidence and help to keep interest rates low, which will help families and businesses.

[Andrew Selous]

Was it because of a high public sector net cash requirement that forces up interest rates, makes it more difficult for businesses to borrow, increases taxes and means that money spent on debt interest cannot be spent on public services that the outgoing director general of the British Chambers of Commerce said when he left on Friday that, in order to keep the economy going, it is essential that we stick to the Chancellor’s economic plan?

[Danny Alexander]

I am sure that that was part of his reasoning and I very much welcome his endorsement, alongside that of all the other business organisations in the UK that continue to back the deficit reduction plan we have set out. It is worth observing that the proposals put forward by the outgoing director of the British Chambers of Commerce and other proposals are also being taken forward by this Government. There is very strong alignment between small businesses and this Government.

[Tony Lloyd (Manchester Central) (Lab)]

At what point, though, will Treasury Ministers realise that this austerity programme is damaging growth and that what the Government should be doing is beating a track round the world to make sure that there is an international commitment to putting growth back into the economy? That is the way we will get rid of the deficit in our economy.

[Danny Alexander]

This deficit reduction plan is essential to restoring credibility to British public finances, which is critical to keeping interest rates low, as low interest rates help to keep people in their jobs and in their homes. That is the argument for the plan.

[Michael Fallon (Sevenoaks) (Con)]

Will my right hon. Friend confirm that the borrowing and revenue figures are now completely independently audited by the independent Office for Budget Responsibility and are no longer the completely unreliable and overtly political forecasts that, as we now know, were forced on the previous Chancellor by the previous Prime Minister?

[Danny Alexander]

I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

14. What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices.

[The Economic Secretary to the Treasury (Justine Greening)]

The Office for Budget Responsibility assesses the prospects for inflation, which of course factors in any changes in prices from Budget 2011. It will update its forecast this autumn.

[Rushanara Ali]

I thank the Minister for her answer, but with rising energy prices, stagnating real-terms income and rising unemployment, I ask her again what specific actions will be taken to help the more than 4 million households in England and one in seven households in my constituency that will face fuel poverty this year?

[Justine Greening]

We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.

[Richard Graham (Gloucester) (Con)]

Does the Minister agree that although policies to help people out of income tax at the bottom level will show positive results, it is important to maintain the pressure to provide new apprenticeships so that high-value exporting manufacturers, such as Severn Glocon in my constituency, can continue to generate significant foreign exchange benefits.

[Justine Greening]

rose—

[Mr Speaker]

Order. The Minister will want to relate her answer to domestic energy prices. I feel sure that that is what she will do.

[Justine Greening]

I shall try. I am sure that many of those apprenticeships will be in green industry, which is part of how we hope to get this economy back on its feet.

[Mr Speaker]

We are grateful.

[Robert Halfon (Harlow) (Con)]

15. What fiscal measures he is taking to reduce the costs faced by businesses.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

In addition to taking action to reduce the fiscal deficit, the Government are putting in place a number of measures to create the right conditions for businesses to grow. This includes reducing corporate taxes to encourage businesses to invest, establishing enterprise zones, and increasing the support that research and development tax credits provide to small and medium-sized companies.

[Robert Halfon]

Does my hon. Friend agree that the new enterprise zones will transform the fiscal situation for local businesses? As there is a new enterprise zone in Harlow, will he set out the tax advantages that we will gain and when they will start?

[Mr Gauke]

I am delighted that one of the two enterprise zones in the south-east local enterprise partnership will be in my hon. Friend’s constituency of Harlow; 100% of business rates collected on the Harlow site will be retained for 25 years and are to be spent on local economic priorities. This will be possible from April 2013, once the necessary legislation is passed. Businesses will also benefit from simplified planning and Government support to ensure that superfast broadband is rolled out throughout the zone.

[Sammy Wilson (East Antrim) (DUP)]

One proposal subject to consultation, which has now finished, for reducing costs in Northern Ireland is the devolution of corporation tax so that the rate can be reduced for that part of the United Kingdom. Will the Minister assure us that the devolution of corporation tax will not be set at a price that makes it impossible for the impact on the economy to be positive?

[Mr Gauke]

As the hon. Gentleman said, the consultation process is now completed. I know we will be in contact with the Northern Ireland Executive to discuss the results. No decisions have been taken, but we have clearly made progress in this area. I look forward to having future conversations with the hon. Gentleman, including about the particular issue of cost that he mentions, but it is right for the cost as well as the powers to be properly devolved.

[Margaret Curran (Glasgow East) (Lab)]

16. What assessment he has made of the potential implications for the economy of the most recent figures for economic growth.

[The Chief Secretary to the Treasury (Danny Alexander)]

Our economic policy is designed to achieve strong, sustainable and balanced growth that is shared more evenly across the country and between industries. The independent Office for Budget Responsibility has predicted that the economy will grow throughout 2011 and in every year of the forecast, and it will publish a fully updated forecast in the autumn.

[Margaret Curran]

Is the Chief Secretary aware of a survey produced this week by the Chartered Institute of Purchasing and Supply? It shows the sharpest slow-down in growth in the services sector for well over a decade. If Britain is such a safe haven, why is that happening?

[Danny Alexander]

I am aware of the survey, and of course many businesses are experiencing difficulties, not least owing to the headwinds in the global economy that we—along with other countries—are encountering. That is why we are taking measures to help businesses such as those to which the hon. Lady has referred, through our plan for growth and in relation to regulation, the planning system and investment in the transport infrastructure. I am sure she agrees that constitutional uncertainty about independence in Scotland is causing serious damage to businesses and business investment there.

[Charlie Elphicke (Dover) (Con)]

Is not the most important contribution that the Government can make to economic growth to be “united at the top” and to have “a credible economic policy”?

[Danny Alexander]

I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Chief Secretary—whom I fondly recall from the days when he was known as “Danny the euro”—agree that a big problem that we all face is the fact that the purchasing power of the pound internationally has sunk to an all-time low? Do we not have a real problem with the Osborne pound, which is now importing inflation, and do we not need to separate the two? We cannot get rid of the pound, because they will not let us, so do we not have to get rid of the Chancellor?

[Danny Alexander]

The right hon. Gentleman—I shall not tell the House what he was known as—should be aware that the reduction in the value of the pound took place under the previous Government, so he might direct his comments to them. He might also recognise, if he were being balanced, that that is having a beneficial effect on British exporters who are trying to sell into the eurozone, where the difficulties are, of course, affecting us as well.

[Tracey Crouch (Chatham and Aylesford) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Mr George Osborne)]

The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking, and manage the public finances so that Britain lives within her means. I can also announce today that the Office for Budget Responsibility will publish its economic and fiscal outlook on Tuesday 29 November, and that I will make a statement to the House on that day.

[Tracey Crouch]

Many hauliers in my constituency, like ordinary motorists, are concerned about the high price of fuel. Sadly, one Kent haulier went into administration during the recess, blaming diesel prices as a contributing factor. Can the Chancellor assure my constituents that he is listening to concerns expressed by fair fuel campaigners, and that he will do all he can to reduce the burden of high fuel costs on the motorist?

[Mr Osborne]

Of course I am well aware of the pain and burden that the big rise in the international oil price has caused to British businesses and, indeed, British families. That is why we took action in the Budget with a £2 billion reduction in fuel duty.

My hon. Friend mentioned hauliers in her constituency. The average haulier will benefit by approximately £1,700 this year as a result of the measures announced in the Budget, in comparison with the last Government’s fuel duty plans. Those measures were funded by an increase in tax on North sea oil companies, which was controversial and was opposed by the Labour party.

[Mr Kevin Barron (Rother Valley) (Lab)]

T2. The carbon price floor taxation policy within the electricity market reform is designed to push up the cost of electricity produced from high-carbon fuels such as coal. That could close what remains of indigenous coal production in this country, and also vastly increase the costs of energy-intensive industrial users such as steelmakers. Is the Chancellor prepared to look again at that policy, or consider compensating the industries that will fall foul of it?

[Mr Osborne]

We are looking specifically at the impact not just of the carbon floor price but of all the other environmental policies of recent years on energy-intensive industries. I hope, in the autumn forecast at the end of November, to give the House an update of what we propose to do to help.

[Mark Lancaster (Milton Keynes North) (Con)]

T3. As we approach its first anniversary, is the Chancellor happy with the performance of the Office for Budget Responsibility?

[Mr Osborne]

Yes, I am happy with the performance of the OBR, because we have created a new institution in Britain that produces independent fiscal and economic forecasts. The absolutely astonishing revelation of the former Chancellor’s memoirs was how—[Interruption.] Let me tell Labour Members this: that book has not even been published yet, but they will be hearing a lot more about it in the months ahead, because it reveals the truth, not just about the last Government but about how the current shadow Chancellor operated in the last Government—the poisoned politics, the paralysed Government and the lack of a credible economic policy.

[Vernon Coaker (Gedling) (Lab)]

T5. Thousands of working-age households in my constituency and millions across the country are set to lose up to 20% of their council tax benefit from April 2013. What assessment has the Chancellor made of the impact of that policy on incentives to work?

[Mr Osborne]

We published our impact assessments at the time of the spending review, and, like other savings in the welfare budget, the policy the hon. Gentleman mentions is designed to deal with a welfare budget that was completely out of control. Just a few weeks ago, the Opposition said they were going to come forward with a credible medium-term deficit reduction plan. Well, where is it? Every single measure we have put forward, they have opposed.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T4. The Chancellor has stated his clear commitment to planning reforms, and local authorities are coming under increasing pressure to raise more locally than they receive centrally. Obviously, future developments are very attractive to them. Where in the planning reforms does the Chancellor assure the House there will be local democracy and a local voice?

[Mr Osborne]

We are giving a much greater role to local communities in determining their own local plan. We are also protecting the green belt and areas of outstanding natural beauty—of which I am sure there are a number in my hon. Friend’s constituency. I would make this point: these are sensible protections for the countryside, but we must also allow economically productive development in this country. We have to simplify a planning system that is completely unintelligible to most citizens. That is precisely what we are doing and I hope we will be backed on both sides of the House.

[Mr Nigel Dodds (Belfast North) (DUP)]

T6. Will the Chancellor give a categorical assurance to the House that the Government will swiftly and robustly reject any proposal from the European Commission, the European Parliament or any other European institution for a trans-European revenue-raising measure?

[Mr Osborne]

I can assure the right hon. Gentleman that I am certainly opposed to any new European tax.

[Peter Aldous (Waveney) (Con)]

T8. The Lowestoft and Great Yarmouth enterprise zone can play a vital role in promoting growth. Will the Chancellor accept an invitation from me and my hon. Friend the Member for Great Yarmouth (Brandon Lewis) to visit our constituencies to see for himself the area’s great potential and to hear from business and council representatives about the work being done to create new private sector jobs?

[Mr Osborne]

I certainly will visit Great Yarmouth and Lowestoft—and on a couple of occasions during this Parliament, I hope. I am delighted that the bid for an enterprise zone from Great Yarmouth and Lowestoft was successful. It was a very impressive bid, involving intelligent use of East Anglia’s offshore energy resources, and I look forward to seeing how work on that is progressing when I visit.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T7. Given stagnating economic growth in the UK, US and much of Europe, and with forecasts predicting slow to no growth, will the Chancellor acknowledge that his economic plans are hurting but not working, and can he now tell us what his plan B is for driving growth in the UK?

[Mr Osborne]

I think that question involved a contradiction in that the hon. Lady pointed out that there was either slow or no growth in the United States and Europe and then somehow blamed my economic policies for that situation. That points to a broader observation: until the Labour party has some cognisance of what is happening in the world and how our policies are protecting the country with the largest budget deficit in the G20 from being caught in the firestorm that some other European countries have found themselves in, frankly it is not going to be at the races.

[Stephen Williams (Bristol West) (LD)]

Coming back to the crisis in some of the economies of the European Union, out of a crisis can sometimes come an opportunity. Will the Chancellor, next time he is meeting his fellow Finance Ministers, impress upon them the need further to deepen and reform the single market in order to promote trade and growth within the European Union?

[Mr Osborne]

I certainly will. I agree 100% with the point the hon. Gentleman is making, and on Friday we will be meeting as the G7, and then we have the ECOFIN meeting next week. He is absolutely right: as well as needing to tackle the fiscal policies and budget deficits, we need to make Europe more competitive. We need to make the whole of the European continent more competitive, and that involves supply-side reforms, deepening the single market and promoting free trade around the world, and I will be making that point today and in future.

[Diana Johnson (Kingston upon Hull North) (Lab)]

T9. Given the latest data on manufacturing, construction, exports and retail, can the Chancellor explain to me exactly where we will see growth and jobs coming from, especially in an area such as Hull?

[Mr Osborne]

I hope the hon. Lady welcomes the decision we made to make sure that Humberside had an enterprise zone. The way that this and other countries are going to get growth is not by taking yet another fix of the debt-fuelled spending bubble that got us into the mess we are in at the moment; it is by becoming competitive and having successful private sector businesses and a tax and regulatory environment that allows them to compete with not just the rest of Europe but the rest of the world.

[Laura Sandys (South Thanet) (Con)]

Like many of my colleagues, I want to thank the Chancellor for launching the enterprise zone and visiting—[Hon. Members: “Ah!”] Yes, in Sandwich. However, it is not just enterprise but trade and investment that need to come into the country. Does he believe that UK Trade & Investment is going to step up to the mark and ensure that we get the message across that Britain is open for business?

[Mr Osborne]

The short answer is yes. I was delighted to visit the new enterprise site in Sandwich with my hon. Friend, but we do need to promote exports. It is absolutely staggering that we export more to Ireland than we do to Brazil, Russia, India and China. That is the situation we inherited, and we have got to increase exports. The Chinese vice-premier will be in London on Thursday, and I hope we can fulfil our countries’ joint ambition to increase trade between the two countries.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

T10. Given that increasing urban density increases economic productivity, and that countries with lax planning law such as Ireland, Greece and Spain are among the least competitive in Europe, why on earth is the Chancellor so intent on ripping up our planning system and destroying what makes England England?

[Mr Osborne]

I completely reject the premise of the hon. Gentleman’s question. As I say, green belt and areas of outstanding natural beauty will be protected, but we need to allow economically productive development. I have to say that his question is particularly puzzling as he represents the city of Stoke. Stoke applied for an enterprise zone, and one of the features of such a zone was that we were going to relax the planning rules.

[Bob Russell (Colchester) (LD)]

When the Eurostar is in France it is in a eurozone country, but when it comes through the channel tunnel into England’s green and pleasant land, the euro is not the sovereign currency. Last week, Eurostar refused to accept British money, even on the train in this country. Will the Chancellor make a robust complaint to Eurostar? [Interruption.]

[Mr Osborne]

The Opposition remind me of the very good election slogan that we had—although it was not particularly successful—which was “Save the Pound”. We have managed to save the pound on the Eurostar—or rather, the company itself has anticipated questions such as the one from my hon. Friend. I am glad to hear that, as he travels to and from Brussels and Paris, he will continue to be able to buy his meals in pounds sterling.

[Stephen Timms (East Ham) (Lab)]

Before the Chancellor meets the head of the IMF on Friday, will he recognise that in warning that slamming on the brakes too quickly will harm the recovery, she has a point? Does not Britain’s experience illustrate that?

[Mr Osborne]

The point that the IMF has made consistently over the last two years is that countries with fiscal space can of course use it, but that Britain does not have that fiscal space. It made that point in its article IV assessment of the UK just a few weeks ago, and that is also the view of Christine Lagarde. As I say, she is coming to this country on Friday and we will hear what she has to say.

[Margot James (Stourbridge) (Con)]

As the Chancellor has reassured the House that protecting the green belt is not incompatible with reforming the planning system, can he tell the House any more about how the Government can help to reduce the costs of the planning system for business?

[Mr Osborne]

Planning costs in Britain are among the highest in the world and planning delays are among the longest in the world. That is what we are seeking to deal with, so that we get economic development that is sustainable and protects our most cherished environments. That is what we are doing. What people are beginning to see, as this debate unfolds, is that we have to take some difficult decisions in this House if we are to have sustainable economic growth in a very competitive global economy. The planning reforms are part of that plan.

[Albert Owen (Ynys Môn) (Lab)]

The massive increases in energy prices are hitting every family and business in this country. Before the general election, the Conservative party, and indeed the Prime Minister, promised to take direct action and curb excessive rises. What action does the Chancellor intend to take to cure this problem now?

[Mr Osborne]

I took action in the Budget to cut fuel duty.

[Mr Philip Hollobone (Kettering) (Con)]

What would happen to domestic interest and mortgage rates were Britain to lose its triple A status by relaxing its financial deficit reduction targets?

[Mr Osborne]

Of course the benefit of having a credible economic policy and a credible fiscal policy is having low market interest rates. Greece today has one-year bond rates of 82% and Italy’s bond spreads have gone out in recent days. We are borrowing money at 2.3%, and that is, in part, because we have a credible economic policy. If we did not have plans to deal with the largest budget deficit in the G20, we would find ourselves in a similar position to Italy or Spain.

[Naomi Long (Belfast East) (Alliance)]

The Chancellor will be aware that air passenger duty has a particular impact in Northern Ireland, particularly as it places pressure on business and discourages tourism. What action does he intend to take, and when, to ensure that we can maintain our links, particularly our transatlantic ones?

[Mr Osborne]

I am very aware of the issue relating to the continental flight from Belfast to the eastern seaboard of the United States, and I have spoken to Northern Ireland’s First Minister and Deputy First Minister about it. I can see that there is a particular challenge because of the proximity of the airport in Dublin, and the British embassy in Washington has also been very active in dealing with the company in the United States. I can assure the hon. Lady that we are on the case.

[Jo Swinson (East Dunbartonshire) (LD)]

There is still huge public anger that taxpayers have had to bail out the very banks whose cavalier and risky behaviour led to the global economic meltdown. Further to the eloquent question from the Father of the House, the right hon. Member for Louth and Horncastle (Sir Peter Tapsell), when Vickers reports next week will the Chancellor ensure that he acts promptly to introduce any necessary legislation to implement the recommendations, in order to avoid a repeat of the financial crisis, and that he does not listen to the vested interests arguing for delay?

[Mr Osborne]

It was this coalition Government who established the Vickers report. Those questions were simply not asked by the previous Government—we are asking those questions. However, I am afraid that the hon. Lady will have to wait until Monday to hear the Government response to the Vickers report.

[Mr Iain Wright (Hartlepool) (Lab)]

Harold Macmillan, the most successful Chancellor and Prime Minister that Eton has ever produced, once said that effective Governments need to adapt to “Events, dear boy, events.” Could the Chancellor, dear boy that he is, outline to the House the events that would warrant a change in his economic policy, or is he woefully negligent, blinkered and complacent?

[Mr Osborne]

I think the hon. Gentleman is being rather harsh on Hugh Dalton, who I think also went to Eton.

[Matthew Hancock (West Suffolk) (Con)]

Do not recent revelations show that the previous Government were masters of nothing?

[Mr Osborne]

That is a brilliant plug for my hon. Friend’s new book. I am sure that the whole House will want to read it, because it will remind us of everything that went wrong under the previous Government.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Time is up. I would love to call more hon. Members, as I enjoy nothing more than hearing my colleagues ask and answer questions, but I am afraid that we must move on to the ten-minute rule motion.

Currency and Banknotes (Amendment)

Tuesday 6th September 2011 Commons Chamber

Motion for leave to introduce a Bill (Standing Order No. 23)

15:34

[Mr Douglas Carswell (Clacton) (Con)]

I beg to move,

That leave be given to bring in a Bill to amend the Currency and Banknotes Act 1954 to allow banknotes in addition to those issued by the Bank of England to be legal tender; and for connected purposes.

[Interruption.]

[Mr Speaker]

Order. I am trying to be helpful to the hon. Gentleman and I apologise for interrupting him, but I appeal to Members who are leaving the Chamber please to do so quickly and quietly, extending the same courtesy to the hon. Gentleman as they would want to be extended to them in comparable circumstances.

[Mr Carswell]

Thank you, Mr Speaker.

My Bill would amend the Currency and Banknotes Act 1954 to enable a range of different currencies to be used as legal tender in Britain. The idea comes from a 1989 Treasury paper when John Major was Chancellor. What the Treasury proposed as theoretically possible 22 years ago, the internet now makes practically achievable.

The internet has given people unprecedented choice. We have access to a greater range of music, financial services, groceries and books than ever before, so why do we have legal tender laws that create a monopoly currency? Thanks to eBay and Amazon, it is possible to buy and sell hundreds of thousands of items at the click of a mouse. It is even possible to do so using whichever currency we please. By making a range of different currencies legal tender in the UK, my Bill would enable people to go a step further. People could buy things, store wealth and pay taxes in a range of different currencies too. Families would be able to plan their financial future without having to do so using a currency that is set to halve in value in the next 14 years. Businesses concerned about rising prices could protect themselves.

We would not need to carry multiple currencies about us in a multi-currency country. Non-cash payments, which since 2004 have exceeded cash payments, mean it would be as easy as using a debit or Oyster card. The 40 years since the collapse of Bretton Woods have been a grand currency experiment. People in Britain might have been using pounds as the unit of currency for centuries, but for the past 40 years the pound has been a fiat—or paper only—currency. Until 1971, the British state could not simply print as much money as it liked, but since then, a mere 40 years ago, the year that I was born, the number of pounds in circulation—the money supply—has been directed by Government and by the state. With a fiat pound, there has been no external constraint limiting the amount of money in circulation besides the self-restraint of the British state.

Government turns out not to be very good at restraining Government. UK money supply has grown from £31 billion in 1971 to more than £1,700 billion today—many times faster than the economy. For 40 years, monetarists have argued with those who claim that they follow Keynes about the rate at which the money supply should be increased. There has been much debate about which branch of the state should take the decision. Should it be Ministers, who are accountable to this House, or experts sitting in the Bank of England? Monetarists or Keynesians, the Monetary Policy Committee or Ministers: so long as it has been left to Government to manage our currency, our currency has been debauched. State officials proved to be no better at managing a nationalised currency than they are at running nationalised airlines or telephone lines.

Just as a broken clock manages to tell the correct time twice a day, our monetary managers have got the settings right on occasion. More often, however, we end up hearing how the state planners lacked the benefit of hindsight. Perhaps we should stop expecting planners to get anything right.

Our paper-only currency system emerged out of the 1960s and 1970s. Like many ideas that grew out of that technocratic age—such as urban tower blocks, child-centred education or DDT pesticide—what seemed terribly modern, forward-looking, progressive and scientific turned out to be a disaster. A small but growing number of academics now see the west’s unfolding financial crisis not simply as a banking problem. It was not simply caused by inadequate capital ratios or too much short selling. Instead, they see it as a fundamental failure of this fiat currency experiment.

A credit balloon was created by reckless management of the money supply. Using inflation, Governments were able to whittle away their debts. Monetary management favoured the debtor over the saver and the consumer over the producer. Monetary policy has encouraged us to over-consume and under-produce, to over-borrow and to save too little. In the space of a generation, fiat money has seen Government grow and the productive sectors of the economy shrink.

Under my proposal, we would no longer be forced to live under such a destructive regime. If the Bank of England keeps printing off more money—more quantitative easing, more loose monetary policy—there may be a fall in the value of its currency, but not necessarily in the value of the currency that the rest of us choose to use. At the click of a mouse, people and businesses would have an alternative. Incidentally, our ability to opt out as individuals and businesses from the MPC’s monetary monopoly might encourage it to stop taking liberties with our currency.

On both sides of the House Members recognise that choice and competition safeguard the interests of the consumer and the citizen. We do not think twice about people being able to tune into different radio and television stations or choose between different hospitals for medical treatment. One day, I hope that Britain will become a multi-currency country.

My proposal for competing currencies is not a new idea. It was the policy of the Conservative Administration in 1989. An excellent Treasury paper presented to this very House suggested competing currencies as an alternative to the European single currency. Perhaps the euro, which we mercifully kept out of, is the ultimate paper-only currency. It is not even backed by the fiat of a single state authority. It is, perhaps, the fiat currency to end all fiat currencies, although perhaps not in quite the way that the architects of economic and monetary union expected. If, as seems possible, the euro breaks up, we should revert to and revisit the ideas in that Treasury paper. By adopting competing currencies, Britain could save herself by her exertions, and save European economies by her example.

Replacing the monopoly of one failed fiat currency with multiple competing currencies would allow euro members the least painful means of extricating themselves from the monetary monster that holds them captive. With choice and competition, all Europeans might be free from the monetary mismanagement that always comes from on high.

15:41

[John Mann (Bassetlaw) (Lab)]

I rise to speak because I think it is appropriate that someone from the Labour Benches should oppose this true bastion of Conservatism. History demonstrates to us that, given the opportunity and power, the Conservative party will always attempt to undermine, whittle away and eventually destroy the great institutions of this country. We are seeing it with the police service and the NHS. But Conservative Back Benchers want to go much further. Here we have them proposing a motion, which they wish to become legislation backed by their Front Bench, to take on, challenge and destroy sterling. I think that we on the Labour Benches want to defend the great currency of sterling against such an imposition of Euro-fanaticism—for that is what we have grown to expect from the Conservative party, although it is never up front, never to the public.

One recalls of course that, after Harold Wilson, Denis Healey and others blocked European adventurism, it was the Conservative party, inspired by Sir Keith Joseph, that resolutely took us into the European Union. Who was it who introduced all these new employment laws—maternity leave, paternity leave, a range of rights at work? Indeed, we backed them on that, rightly. It was none other than Margaret Thatcher and the Conservative party, who signed Maastricht. That was the fundamental—

[Mr Speaker]

Order. I have been listening to the hon. Member for Bassetlaw (John Mann) in a variety of forums for 25 years, and I see no reason to cease doing so now. However, I gently remind him that the matter under discussion is the proposed amendment to the Currency and Banknotes Act 1954.

[John Mann]

I thank you, Mr Speaker. I was just drawing the parallels with this pernicious motion, which would destroy sterling at the moment of its introduction. We saw the coalition partner, the hon. Member for Colchester (Bob Russell) give an example this very week of how on Eurostar the euro is the currency of use, not sterling. The hon. Member for Clacton (Mr Carswell) wishes to impose the euro on every shop across the country, for every transaction. He would go further: he would allow the Iranian rial and other currencies to be used. When I go to buy my midget gems from the corner shop, I wish to use sterling; I do not wish to use the euro or the Iranian rial.

The idea was inspired by a paper from 1975 by Hayek, which dictated the monetary policy to which the Government are adhering. Hayek first made the proposal, to try to break down boundaries. The concepts of “ever onwards”, free trade, the breakdown of the nation state and the destruction of national currencies are really what Back-Bench Conservative Members are about; they would open the floodgates to euros at every corner shop in Britain.

We should not oppose the motion today; we should give it time, so that the arguments can be developed further, and so that we can hear the supporters’ true perspective—then we should vote it down. I resolutely stand up for sterling and the corner shop, and oppose the euro and the attempt to impose it on us, but I do not seek to divide the House. Let us give the hon. Member for Clacton more time to put his case, and let us then destroy him in the vote.

Question put and agreed to.

Ordered,

That Mr Douglas Carswell and Steve Baker present the Bill.

Mr Douglas Carswell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 226).

Health and Social Care Bill (Programme) (No. 3)

Tuesday 6th September 2011 Commons Chamber

15:47

[The Minister of State, Department of Health (Mr Simon Burns)]

I beg to move,

That the Order of 31 January 2011 (Health and Social Care Bill (Programme)) as supplemented by the Order of 21 June 2011 (Health and Social Care Bill (Programme) (No. 2)) be varied as follows:

1. Paragraphs 5 and 6 of the Order shall be omitted.

2. Proceedings on Consideration shall be taken on the days shown in the first column of the following Table and in the order so shown.

3. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.

TABLE

[Frank Dobson (Holborn and St Pancras) (Lab)]

Is it not treating the people who work in the national health service with contempt to expect the House to consider more than 1,000 amendments and new clauses in two days? Is that not a disgrace?

[Mr Burns]

The right hon. Gentleman’s hyperbole does not match the facts. He mentioned 715 amendments —[Interruption.] Yes, but the right hon. Gentleman mentioned 715 amendments dealing with one issue within the more than 1,000 amendments. May I point out to him that 715 amendments are all technical amendments? They change the name of GP consortia to clinical commissioning groups, following the recommendations made by the Future Forum and others working in the health service, which I would have thought would be welcomed by the Opposition Front Bench team at least. That number bloats and distorts the total number. The other significant number of amendments—121—deal with the continuity of services, which is an issue that the Opposition Front-Bench team implored us to bring before the House, rather than allowing it to be dealt with another place. That is why we have done so.

If we are going to be somewhat churlish, let me point out that 100 amendments were tabled by the official Opposition, of which 41 have been selected, and the vast majority of those amendments have been dealt with in Committee in great detail. So in that respect we will be going over well covered ground.

I do not intend to speak for long as I do not wish to detain the House. There is work to be done. This Government have allowed four two-day Report stages in this Session alone. Let me remind the House of one of those rare Government Bills that was granted a two-day Report stage under the previous Government—the Planning Bill in June 2008, with which I know the right hon. Member for Wentworth and Dearne (John Healey) is extremely familiar and probably very fond of. For that Bill the Government of the day thought that two days were appropriate—an interesting judgment, given that they were tabling 29 new clauses and seven new schedules on Report. Indeed, by the end of Report, the Planning Bill had grown by 25%. That compares with the nine new clauses that the Government have tabled on Report for the Health and Social Care (Re-committed) Bill. So that those on the Opposition Benches get the message, that is nine new clauses under this Government, as opposed to 29 new clauses in the right hon. Gentleman’s Bill.

Let us give the Opposition the benefit of the doubt. They might have forgotten what the right hon. Gentleman said when the Planning Bill was, unusually, allowed two days on Report, so let me remind them:

“My reasons for moving this motion were straightforward… It is true that the Bill is wide-ranging and important, which is why we have, unusually, provided two full days for the Report stage… we have departed from the usual by giving two days to this consideration.”—[Official Report, 2 June 2008; Vol. 476, c. 507.]

He established the fact that it is highly unusual. The Health and Social Care Bill has had far more time in Committee than previous Bills, and we are giving an extra day to allow hon. Members the opportunity to contribute to debates, although I must warn my hon. Friends that some of the debates will be a repetition, particularly for those who served on the Committee. It is for those reasons that I urge the House to support the motion.

15:55

[Liz Kendall (Leicester West) (Lab)]

We oppose this programme motion because it fails to give hon. Members enough time to scrutinise one of the most important Bills of this Parliament and, indeed, of the 63 years of the NHS. It is one of the largest Bills of recent times and the largest ever in the history of the NHS, with 420 pages and more than 300 clauses. It is also one of the most controversial. It will force the NHS through a massive reorganisation, which is already happening even though the Bill has not been passed, when it should be focused on meeting the biggest financial challenge of its life and improving patient care. It also seeks to make fundamental changes to the way our NHS is run, driving competition into every part of the system whether or not it is in patients’ best interests.

Labour has led the arguments against the Bill since the autumn, helping to create the widespread opposition that has already forced the Government to pause and amend their plans. However, the Government, far from what the Minister said, refused to give the second Bill Committee enough time to scrutinise properly the changes after their so-called listening exercise. [Interruption.] The Minister tuts from a sedentary position, as is his wont, but 42 Government amendments and two new clauses were not debated in the second Committee due to a lack of time. They have not even bothered to publish the explanatory notes and impact assessment for the post-pause Bill, so the two days on Report that the programme motion proposes would have been insufficient in any case.

Then, on Thursday, three days before this debate, more than 1,000 new Government amendments were tabled, 363 of which are significant. They include a completely new set of proposals on whether local NHS services and, indeed, entire hospitals will be allowed to fail—proposals that could affect every constituency in England. It is a gross discourtesy to this House, not to mention to patients and NHS staff, to produce such important proposals and give such little time for scrutiny. I am sure that Members of the other place will take that into consideration in their deliberations on the Bill.

We are now faced with hundreds of significant new amendments and a series of fundamental questions about the post-pause Bill, and yet we have only two days for debate. Who will have the final say, and who is accountable for vital decisions about the future of local services? What will the Government’s health care market mean for expensive local services that do not make money, such as accident and emergency services and geriatric care, if hospitals lose services that do make money, such as hip and knee operations? How will NHS patients be protected if the private patient cap is abolished and hospitals are forced to take on more patients who pay in order to balance their books? What will be the true cost to taxpayers of the extra red tape and bureaucracy created by the Bill?

The Government’s failure to give the House sufficient time for scrutiny and provide proper answers about their Bill means that many NHS staff and patients remain deeply concerned. Unfortunately, that seems to have passed the Prime Minister by. Two weeks ago, he claimed:

“the whole…profession is on board for what is now being done.”

I wonder whether “the whole profession” includes the British Medical Association, which says—

[Mr Burns]

indicated dissent.

[Liz Kendall]

The Minister groans. If he thinks that the body representing doctors in this country is worthy of that response, that is a disgrace. The BMA says that the Bill is still

“an unacceptably high risk to the NHS, threatening its ability to operate effectively and equitably now and in the future”.

It calls for the Bill’s withdrawal

“or at the very least further, significant amendment”.

[Chris Skidmore (Kingswood) (Con)]

Is the BMA not the same organisation that opposed the creation of the NHS in 1948?

[Liz Kendall]

The Prime Minister claims that the whole profession is now on board for the Bill, and that simply is not the case. Government Members, particularly those on the Liberal Democrat Benches, should remember that the Government have no mandate from either the election or the coalition agreement for fundamental aspects of the Bill. In fact, the coalition agreement promises to do precisely the opposite—to stop top-down reorganisations of the NHS.

The Government want to railroad the Health and Social Care Bill through the House in the face of widespread opposition and huge controversy, and with no mandate for their plans.

[Andrew Percy (Brigg and Goole) (Con)]

Will the hon. Lady give way?

[Liz Kendall]

I will not, because we need to get on to the substance of the debate. The less time that the Government give MPs to scrutinise the Bill, the more people will think that they have something to hide; the more they hide, the longer it will take to get the Bill through the other place.

Unless hon. Members vote against the programme motion, it will be left to Members in the other place to provide the parliamentary scrutiny that the Bill needs and to get answers to the serious questions that remain. I believe that Members of this House should scrutinise legislation and get the answers to questions that our constituents need and deserve. The Government are refusing to give us the time to do our job. I urge Members to vote against the programme motion.

16:02

[Mr Peter Bone (Wellingborough) (Con)]

I start from the default position of opposing programme motions. The Government have consistently said that they also oppose programme motions and that they will overcome that problem by introducing a House Committee which will, of necessity, do away with programme motions, because the House will decide.

We have to look at programme motions now on the merits of each and every case. In this case, I have to say to the hon. Member for Leicester West (Liz Kendall) that I cannot agree with her. The Government have been very willing to listen to people—politicians—and to redo completely the parliamentary scrutiny of the Bill. They sent it back to Committee, from where it has come here. On this occasion, the Government have bent over backwards for scrutiny, and I will be voting with them in the Aye Lobby.

Question put.

16:03

Division 335

Ayes: 299

---

Conservative: 253
Liberal Democrat: 44

Noes: 232

---

Labour: 221
Democratic Unionist Party: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Independent: 1

Health and Social Care (Re-committed) Bill

Tuesday 6th September 2011 Commons Chamber

[1st Allocated Day]

Consideration of Bill, as amended in the Public Bill Committee

[Mr Speaker]

Before the House embarks on the Bill, it may help if I deal with a matter that has been raised with me concerning the 715 virtually identical Government amendments changing the phrase “commissioning consortia” to “clinical commissioning groups”. These are the fourth group on today’s selection list. It has never been the practice of the House or its Committees to allow a single global amendment to make a series of identical or very similar amendments. The rule that any substantive change to the text of the Bill must be done by an amendment is designed for the protection of the rights of all Members and the integrity of the legislative process. I do understand that in this case it leads to a particularly bulky amendment paper. The fact that a practice is long-standing does not, in my view, mean that it is sacrosanct. Any hon. Member who wishes is of course free to ask the Procedure Committee to inquire into this matter. I hope that that is helpful.

I should also inform the House that amendment 781, which is printed on page 2985, should appear on page 3051, and amendments 945 and 946, which are printed on page 3138, should appear on page 3068. That has no material effect on today’s proceedings, but I know that the House will have wanted me to share those crucial nuggets of information with it.

[Sir Peter Bottomley (Worthing West) (Con)]

On a point of order, Mr Speaker. The House will have noted your comments about the repetitive amendments. Are we to take it that we have to go through quite a lengthy procedure in order just to be able to list the places where the words would be substituted? Is it not possible—is it not in your power or that of the Leader of the House—to make the change without having to go through weeks and weeks of Committees and other consideration? I do not necessarily need an answer now, but that is a consideration to which I would have thought a reforming Speaker might have found a solution.

[Mr Speaker]

I thought that I had found a very satisfactory way forward—one that should appease the hon. Gentleman and perhaps mollify him, putting him in a better frame of mind. There will be a grouping. If he is inquiring of me whether a separate Division will be required to give effect—

[Sir Peter Bottomley]

indicated dissent.

[Mr Speaker]

The hon. Gentleman is shaking his head from a sedentary position to indicate that that is not the burden of his proposition, in which case I am not sure what is. I can nevertheless assure him that no separate Division will be required. I think that at the end of our proceedings he will be in the good humour to which we know he is accustomed.

[Sir Peter Bottomley]

Further to that point of order, Mr Speaker. The point was the one that you have made, which is that the amendment has to be repeated, with different pages and lines. I suggest that an amendment might be tabled setting out a list of the pages and lines where it applied.

[Mr Speaker]

What I am saying is what I have already said, which is that there is no provision for a global amendment. An amendment is required to be made in each case. That does not entail a separate Division or what the hon. Gentleman in his first point of order described with some trepidation as a “lengthy procedure”. There will be no requirement for a lengthy procedure. Ministers seem sanguine; so am I—so, I think, should the House be. Perhaps we can now proceed to the business before us.

New Clause 2

Conditions relating to the continuation of the provision of services etc.

‘(1) The things which a licence holder may be required to do by a condition under section 104(1)(i)(i) include, in particular—

(a) providing information to the commissioners of services to which the condition applies and to such other persons as Monitor may direct,

(b) allowing Monitor to enter premises owned or controlled by the licence holder and to inspect the premises and anything on them, and

(c) co-operating with such persons as Monitor may appoint to assist in the management of the licence holder’s affairs, business and property.

(2) A commissioner of services to which a condition under section 104(1)(i), (j) or (k) applies must co-operate with persons appointed under subsection (1)(c) in their provision of the assistance that they have been appointed to provide.

(3) Where a licence includes a condition under section 104(1)(i), (j) or (k), Monitor must carry out an ongoing assessment of the risks to the continued provision of services to which the condition applies.

(4) Monitor must publish guidance—

(a) for commissioners of a service to which a condition under section 104(1)(i), (j) or (k) applies about the exercise of their functions in connection with the licence holders who provide the service, and

(b) for such licence holders about the conduct of their affairs, business and property at a time at which such a condition applies.

(5) A commissioner of services to which a condition under section 104(1)(i), (j), or (k) applies must have regard to guidance under subsection (4)(a).

(6) Monitor may revise guidance under subsection (4) and, if it does so, must publish the guidance as revised.

(7) Before publishing guidance under subsection (4) or (6), Monitor must obtain the approval of—

(a) the Secretary of State, and

(b) the National Health Service Commissioning Board.’. —(Mr Lansley.)

Brought up, and read the First time.

16:22

[The Secretary of State for Health (Mr Andrew Lansley)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Government new clause 6—Objective of trust special administration.

Amendment 10, page 83, line 5, leave out part 3.

Amendment 1225, in clause 57, page 83, line 13, leave out ‘monitor’ and insert ‘Integrated Health Service Regulator (elsewhere referred to in this Bill as “Monitor”)’.

Amendment 1226, in clause 58, page 83, line 20, at end insert ‘and

(c) is sufficiently integrated so as to reduce any risk to patient care and to provide continuity of service.’.

Amendment 1207, page 83, line 23, after ‘preventing’, insert ‘competitive or, as the case may be,’.

Amendment 1227, in clause 59, page 84, line 42, at end insert ‘bearing in mind that it should be balanced with ensuring the protection of health service integration.’.

Amendment 1228, page 85, line 2, at end insert—

‘(3A) “Integration”, in relation to health services, means the provision or commissioning of health services in a manner to ensure the viability of the full range of health and social care facilities which a community might reasonably expect from the NHS, including the provision of complex and commercially less attractive and difficult to provide emergency and other acute services which require to be provided on a site or in a manner which benefits from its collaboration with other acute health specialities or services.’.

Government amendment 87.

Amendment 1205, in clause 61, page 86, line 14, at end insert—

‘(n) the need to avoid existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research, becoming unviable or unstable due to an unplanned reduction in income or case-load.’.

Government amendment 90.

Amendment 1208, in clause 70, page 92, line 7, after ‘in’, insert ‘competitive or, as the case may be,’.

Amendment 1209, page 92, line 8, at end insert—

‘(d) protect and promote the integration of health services and health and social care services,

(e) improve the equality of access to NHS services and healthcare outcome,

(f) do not undermine the stability of existing NHS services, including but not restricted to, emergency care, intensive care, chronic and complex care, teaching, training and research.’.

Amendment 1229, page 92, line 8, at end insert—

‘(d) do not act in a manner which risks undermining the viability of maintaining essential or designated core health services or the essential integration between health services.’.

Amendment 1219, in clause 74, page 94, line 22, leave out subsections (1) to (3) and insert—

‘(1) Part 3 of the Enterprise Act 2002 (mergers) applies (in so far as it would not otherwise) where two or more enterprises have ceased to be distinct enterprises and specifically the activities of one or more NHS foundation trusts and the activities of one or more businesses have ceased to be distinct activities.’.

Amendment 1220, page 94, line 29, leave out ‘subsections (2) and (3)’ and insert ‘subsection (1)’.

Government amendments 91 to 107.

Amendment 28, page 117, line 22, leave out clause 110.

Government amendments 113 to 115.

Amendment 44, in clause 119, page 123, line 30, at end insert—

‘(10A) A description for the purposes of subsection (9)(b) may be framed by reference to—

(a) the level of workforce training undertaken by the provider, and

(b) the extent to which the provision of its service leads to consequential costs for other providers.’.

Government amendments 116 to 136.

Amendment 29, in clause 130, page 132, line 34, at end insert—

‘(5AA) Regulations under this section must ensure that where transfers of property or liabilities occur, they can only be transferred to another NHS body.’.

Government amendments 137 to 164.

Amendment 30, in clause 134, page 136, line 26, leave out ‘licence holder’ and insert ‘NHS body’.

Government amendments 165 to 180.

Amendment 19, page 156, line 38, leave out clause 166.

Government amendments 181 to 184.

Amendment 1166, page 159, line 2, leave out clause 167.

Government amendments 185 to 187.

Amendment 20, page 163, line 14, leave out clause 176.

Government amendments 188 to 217.

Amendment 8, page 168, line 6, leave out clause 182.

Government amendment 218.

Amendment 9, page 168, line 39, leave out clause 183.

Government amendments 219, 220 and 366 to 372.

[Mr Lansley]

Our plans for modernising the NHS are focused not only on improving the quality of care of patients today, but on ensuring that the NHS is fit to face the challenges of tomorrow—to ensure that the NHS is always there, always improving and always based on the needs of patients, not their ability to pay. Parts 3 and 4 of the Bill are an integral part of achieving that aim. They take forward our commitment to protecting patients’ interests, by establishing a comprehensive system of regulation in part 3, and to promoting high quality services, by supporting all NHS trusts to become foundation trusts in part 4.

The regulatory framework that we inherited from the previous Government simply did not do enough to protect patients. It lacked a way to protect patients’ interests in relation to all types of provider. The previous Government set up two regulators—Monitor for foundation trusts and the Care Quality Commission—but forgot, or neglected, to create an explicit link between the two. They also left independent providers outside much of that regulatory oversight. We have proposed the development of Monitor as a health sector-specific regulator, establishing equivalent safeguards to protect patients’ interests in relation to all types of provider.

By contrast, let us look at Labour’s proposed amendment—amendment 10, in this group—which would delete all of part 3. That would leave the NHS in a position in which inconsistent regulation as between NHS trusts and foundation trusts undermined accountability and performance, in which independent providers were not regulated effectively, in which the Labour Government’s preferential treatment of independent sector providers could carry on, and in which politicians would continue to second-guess regulatory decisions, creating a double jeopardy for providers. On the Government side of the House, however, we recognise the needs of the NHS. We recognise the fact that patients’ interests must be protected, irrespective of the type of organisation providing their NHS services, in a clear, consistent, transparent framework.

These parts of the Bill have been scrutinised in the Bill’s two Committee stages and by the NHS Future Forum. I should like once again to thank Professor Steve Field and the members of the NHS Future Forum for their work in making recommendations on how to improve our plans. We then took those recommendations forward in the recommittal stage. As a result of the listening exercise, we made changes to introduce stronger safeguards, to ensure that fears of a market free-for-all could not happen. Monitor’s core duty has been changed to make it clear that it is there to protect and promote patients’ interests, and that it will not be required to promote competition as if that were an end in itself.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Do not the right hon. Gentleman’s changes to the Bill still emphasise far too much the supposed read-across with competition law, treating health provision as though it were simply another utility? With regard to mergers and changes, for example, the Office of Fair Trading will be the arbiter on competition duties. Why has he chosen the OFT as arbiter in such cases?

[Mr Lansley]

I am not sure that the hon. Gentleman has followed this closely enough. We do not do any of those things. We are very clear that, through the Bill, we are creating, in Monitor, a health sector-specific regulator that will be able to exercise competition powers in a way that is entirely sensitive to the duties that it has for sustaining high-quality NHS services. As I will explain later, there will be a role for the OFT. Indeed, it has a role now. Labour Members should know that the application of competition law inside the NHS at the moment is exactly the same as it will be after the Bill. However, instead of it being done through the OFT as principal competition authority, it will—with the exception of mergers, which I will talk about later—be done through the concurrent powers of Monitor. The NHS Future Forum helpfully discussed these matters at length with people throughout the country, and concluded that it would be in the interests of the NHS for the legislation to create concurrent competition jurisdiction for Monitor, thereby ensuring that the application of competition rules—which is not changed in its extent by this legislation—is achieved in a health-specific context.

[Nick Smith (Blaenau Gwent) (Lab)]

Why will Monitor have no duty to promote collaboration, as recommended by the Future Forum?

[Mr Lansley]

I am sure that the hon. Gentleman will want to look at clause 20, which is very clear about Monitor’s responsibilities. I am sorry—it is not clause 20; I will find it later. Monitor’s duties are very clear, and they include support for the integration of services and for the continuous improvement of quality of services. Across the NHS there is existing legislation making it clear that there is a responsibility for collaboration. As we have made clear in response to the NHS Future Forum’s report on the listening exercise, we are taking an evolutionary approach. The competition and co-operation panel was established under the Labour Government in January 2009. At that time, the panel made it absolutely clear that there should be a health basis for the implementation of competition and procurement rules in the NHS. That panel is now to be incorporated as part of Monitor. As its name implies, it examines both competition and collaboration. Monitor, like other bodies, has a duty to promote the integration of services.

Now, as I said, we have introduced safeguards against privatisation. This Bill, for the first time, stops the Secretary of State—and, indeed, Monitor or the NHS commissioning board—from trying deliberately to increase the market share of a particular type of provider. If the previous Labour Government had put such a requirement in law when they were office, hundreds of millions of pounds would not have been paid to independent sector treatment centres to carry out operations that were not required and never took place. If the Opposition had their way this afternoon, the safeguards that we intend to put in place would not be available.

16:30

In its response to the opportunity provided by Report stage, the Labour party is being not progressive but reactionary, while the trade unions are being misleading in the presentation of their campaign. To be specific, the trade unions and other proxy organisations such as 38 Degrees have gone to some trouble to misrepresent the Bill in order to attack it.

[Toby Perkins (Chesterfield) (Lab)]

I am grateful to the Secretary of State for giving way. Does he think that the British Medical Association, too, is misrepresenting the position when it says that even after Report stage there will still be too much emphasis on using market forces to shape health services? Is the BMA misrepresenting the truth as well, or is it just the Labour party?

[Mr Lansley]

I was interested to read this morning a letter whose lead signatory was Hamish Meldrum, the chairman of the BMA council, whom I know well. It was curious because his objection to the Bill, which he wants to be amended, was about the introduction and extension of the role of “any qualified provider”. However, that extension is not in the Bill. It is not occasioned by the Bill; it is a consequence of the way in which commissioners—[Interruption.] No, it does not. If there were no Bill, it would be open to strategic health authorities and primary care trusts to extend “any qualified provider” and patient choice in the NHS to whatever extent they wished. The Bill does not make that happen.

The point is that under the legislation there is a stronger safeguarding process, because the commissioners—

[Toby Perkins]

rose—

[Mr Lansley]

I will finish answering the hon. Gentleman before letting him intervene again.

The safeguard structure will be stronger, because commissioners must ensure, for example, that they meet their duty of continuous improvement of quality, their duty of safety and their duty of integration of services and other duties, including a duty to promote patient choice—but of course they have to balance those duties. Whether they extend “any qualified provider” is a matter of judgment. If they took the view that the extension of patient choice would be inimical to the integration of services and the improvement of quality, they would not go ahead with it. The hon. Gentleman and his colleagues should recall that they have put in an NHS constitutional right for patients to exercise choice, so if the commissioners think it is possible to promote choice and improve quality by extending the any qualified provider remit, they can do it, but the Bill is not what enables it. It is therefore curious that the Bill should be attacked on that basis.

[Toby Perkins]

I am grateful to the right hon. Gentleman for giving way a second time. That was a very long answer to a short question, but I understand the Secretary of State to be saying that the BMA is wrong and the Labour party is wrong. Everyone I meet in the health service tells me that it is the Secretary of State who has got it wrong. He has come back here once again, confirming that he is not listening to what people are saying to him. He thinks the BMA is misleading people, but is it possible that he is the one who has got it wrong?

[Mr Lansley]

I will give the hon. Gentleman a shorter answer this time: he does not talk to enough people in the NHS.

Let me return to the important point that I was about to make. I was saying that criticism of the Bill has typically developed to the point of literally misrepresenting the facts in order to attack the Bill, as was the case with 38 Degrees. I am indebted to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for sharing with me a letter that he prepared for the better information of his constituents. He looked at the legal opinion obtained by 38 Degrees and concluded that it did not support the views that those behind the 38 Degrees website evidently wished it did.

For example, 38 Degrees claims that the Bill removes the Secretary of State’s duty to provide a comprehensive health service. However, its own legal advice makes it clear that the Secretary of State has never had a duty to provide a comprehensive health service—only a duty to “promote” a comprehensive health service, which is exactly reproduced in clause 1.

Clause 1 also makes it clear that the Secretary of State must secure the provision of that service. The “duty to provide” certain services to which 38 Degrees refers is a duty that I, as Secretary of State, currently delegate to primary care trusts. In future, the Bill will—in exactly the same way—pass that duty of the Secretary of State to the NHS commissioning board and to clinical commissioning groups. In other words, the situation will be legally unchanged. The Secretary of State has a duty, and discharges it through organisations to which he or she delegates that power. Strictly speaking, they have more direct statutory duties, but the duty to provide will not change.

38 Degrees also claims that the Bill opens up the NHS to competition law, but its own legal advice—which it obviously did not like—made it clear that there would be no change between the present competition regime and that which would operate if and when the Bill became law.

I am very grateful to my hon. and learned Friend, whose forensic analysis accords with our own view. The provision, under the Bill, of a comprehensive NHS is watertight, and it is equally clear that the Bill does not change the extent of the application of competition law and EU procurement rules. The 38 Degrees campaign should be seen for the distorting and misleading political propaganda that it is.

[Andrew George (St Ives) (LD)]

I entirely endorse the Secretary of State’s point about the biased way in which the last Government advanced the private sector, but may I make a point about the changes that have resulted from the listening exercise? The Secretary of State has sought to reassure the House about Monitor’s role of integration and promoting collaboration. Would he be prepared to respond to, and perhaps even accept, amendments that I have tabled—for example, amendment 1226—which propose, I think reasonably and in a balanced way, that promoting the importance and the role of integration should be among the principal duties?

[Mr Lansley]

As we said in our response to the recommendations of the NHS Future Forum, we recognise the importance of integrating health and social care services—while concentrating on the needs of patients and their families—to the achievement of our aims. However, I do not believe that we would further those aims by changing Monitor’s name, as amendment 1225 suggests. Although I agree with the aims of my hon. Friend the Member for St Ives (Andrew George), we have an alternative approach.

Rather than making it explicit that the Secretary of State could impose requirements on commissioners in key areas through regulations, as my hon. Friend suggests in amendment 1209, the Bill proposes that commissioners should have clear statutory duties to reduce inequalities between patients, in relation to both access and outcomes. That is covered in clauses 20 and 23. Commissioners would also have to promote integration of services in carrying out those duties. That is covered in clause 20, which inserts new section 13M of the National Health Service Act 2006, and in clause 23, which inserts new section 14Y. Those clauses refer respectively to the NHS commissioning board and to clinical commissioning groups.

The Bill would also establish clear duties for Monitor to allow the integration of health care services and the integration of health care with other relevant services, including social care. We have already amended the Bill to make it clear that Monitor should not promote competition for competition’s sake: this is all about quality. However, integration can only ever be a means to that end, not an end in itself. Integration, like competition, is designed to secure continuous improvement in the quality of services and a reduction in inequalities, as clauses 20 and 23 make clear.

Although I understand the point that my hon. Friend is making, I ask him to not to press amendments 1225 to 1228 when we reach the appropriate moment.

[Frank Dobson (Holborn and St Pancras) (Lab)]

The Secretary of State has pleaded the legal view of one of his Back Benchers in rebutting the case made by others about the impact of the changes in his duties. Will he tell us what advice he received from the Department’s lawyers or the Law Officers of the Crown?

[Mr Lansley]

It is not the practice of Ministers to publish their internal legal advice, but what I will say to the right hon. Gentleman is very straightforward, because I have said it time and again: our legal advice clearly sets out the duty of the Secretary of State to promote a comprehensive health service and to secure the provision of a comprehensive health service, and that is also clearly set out in the Bill and our amendments to it. We are clear, too, that the Bill does not change the extent of the application of competition law and EU public procurement rules. I have taken the liberty of referring to the comments of my hon. and learned Friend the Member for Sleaford and North Hykeham on the basis that they entirely agree with the legal advice on which we have based our view.

[Several hon. Members]

rose—

[Mr Lansley]

I had better give way to the hon. Member for Pontypridd (Owen Smith) first, as no Opposition Front-Bench has previously intervened.

[Owen Smith (Pontypridd) (Lab)]

Is it not disingenuous of the Secretary of State to keep repeating that the application of competition law is not expanded or changed by the Bill? We know that the change in the architecture of the NHS—the use of competition law, the writing of competition law into the architecture of the NHS, and the entry of lots of other providers into a genuine marketplace—will lead to competition law increasingly being used by people who wish to provide NHS services, breaking up the NHS. Labour Members have repeatedly stated that, and it has been confirmed by independent legal advice. That is our point. It is straightforwardly the case, and I suggest that it is disingenuous to say competition law does not apply.

[Mr Lansley]

I did not say that competition law does not apply; if the hon. Gentleman is going to attack me, he might at least get what I said right. I said that the Bill does not change the extent of the application of competition law. The House should know that the debate about the extent to which competition law, and in particular EU competition law, is applicable within the NHS is a matter of debate among lawyers. That is because it has not been tested in courts, but it was always going to be tested in courts and it is much more likely to be tested in them if we do not pass this measure, which not only gives Monitor a responsibility to be the concurrent competition jurisdiction, but, through its licensing powers, allows it to take ex-ante steps. The hon. Gentleman therefore misses the point; the point is that by introducing the private sector into the NHS before the last election, his party’s Government inevitably extended the application of EU competition law in respect of NHS providers—not NHS commissioners, I might add. To that extent, he has therefore missed the point. EU procurement rules have applied, and continue to apply. We cannot change that.

[Several hon. Members]

rose—

[Mr Lansley]

I will not give way again, or Mr Deputy Speaker will chide me for not addressing the substance of the amendments.

During the listening exercise, we heard concerns about how we would secure continued access to NHS services in the event that a provider fails clinically or financially. We promised then to strengthen our proposals and bring back changes at the next possible parliamentary stage, and we have done that.

What should happen in the NHS when things go wrong has long been the subject of debate in this House, often without satisfactory resolution. Those of us who were in the House when my predecessor stood at this Dispatch Box and said that what happened at Maidstone and Tunbridge Wells was the responsibility of local managers, and that what happened at Mid Staffs was all a local issue, will recall how difficult it was then, and over the recent past, to know what the Secretary of State’s accountability for the NHS actually meant.

In 2003 the Labour Government said that they would put in place a legislative framework for dealing with the failures of foundation trusts. They then failed to do that. The Health Act 2009 regime was contradictory in respect of interventions, but in response to failure it simply enabled foundation trusts to be de-authorised, thereby undermining the integrity of foundation trust status and demonstrating a lack of confidence in foundation trust regulation. Evidence does not support that lack of confidence, however. Monitor has generally handled financial stability more effectively in foundation trusts than strategic health authorities have done in NHS trusts. Putting these measures clearly into legislation is necessary not because providers are more likely to fail—on the contrary, we are putting in place measures that make it less likely that they will fail—but because, as when writing a contract, in writing legislation one must be clear about what happens when things go wrong.

16:44

Our plans are comprehensive and detailed, and there are a considerable number of amendments. So that the House can see and understand the detail, I published last week a document setting out the Government’s approach, as well as detailed briefing notes explaining the effect of each of the amendments. We have revised our plans for ensuring continuity of services with three principles in mind. The first is to protect patients’ interests and improve outcomes; patients must be able to get the high-quality services they need. The second is to maintain local decision making and enhance democratic legitimacy; local authorities would have scrutiny of proposed service changes. The third is to deliver value for money. I am confident these revised proposals will deliver on those principles.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Did not the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) say in Committee that under the relevant clause,

“the OFT could make a reference to the Competition Commission to review foundation trust mergers to test whether they gave rise to a substantial lessening of competition”––[Official Report, Health and Social Care Public Bill Committee, 17 March 2011; c.885.]?

Does that not undermine the democratic element that the Secretary of State has just tried to explain?

[Mr Lansley]

I said that I would come on to the continuing role of the OFT in relation to mergers, and I will.

Returning to this substantial group of Government new clauses and amendments, the purpose of which is to set out the regime for the continuity of services, our new proposals focus on five particular changes. Together, the proposed changes significantly improve upon the existing situation. First, the Bill puts clinically led commissioning at the heart of securing high-quality services for local populations. It is therefore right that commissioners should have a leading role when continuing access to services is threatened. Our amendments therefore strengthen the role of commissioners. For the first time, commissioners will have an explicit role in working with Monitor to agree plans to secure continuity of services.

There will also be an oversight role for the NHS commissioning board. Where issues involve more than one clinical commissioning group, it will be the board’s role to co-ordinate agreement so that a joint plan is agreed. Secondly, commissioners will need to be supported in acting with providers to ensure that they have access to the scope, quality and choice of services they need. It is about promoting high-quality, effective and integrated services, as set out in clause 58. This will be the task of Monitor.

If need be, when continued access to services is threatened because of failure occurring in a particular provider, Monitor will have a range of actions it can take. For example, it could take action to secure sustainability of essential services by adjusting prices. This would be necessary where a provider is otherwise unable to cover the costs of essential services—for example, because of lower patient volumes in more remote areas of the country. That was included in the Bill from the outset, and our amendments strengthen the provisions by ensuring that Monitor must agree the methodology with the NHS commissioning board.

[Rosie Cooper (West Lancashire) (Lab)]

Will the Secretary of State be clear on this issue? Can the enhanced tariff that I think he is suggesting Monitor can use to save a provider apply to private companies as well as the NHS?

[Mr Lansley]

It would apply in any circumstances where it was necessary in order to secure continued access to essential services for patients, so a methodology would be in place. As I have described, the intention is to have a regime through which, although specific mechanisms will be applied to foundation trusts and to other providers—of course, the overwhelming majority of activity is in the hands of foundation trusts—the principles of intervention will be the same between the two sets of providers. We want to arrive, wherever possible, at a consistent application of failure rules. Why? Our concern is to make sure that we deal with this, which has not been the case in the past. Under Labour’s regime, if a private sector or independent sector provider failed financially, there was no appropriate mechanism for intervention and continuity of services.

[Mark Simmonds (Boston and Skegness) (Con)]

Will my right hon. Friend confirm that the additional funding he is describing will not be used to bail out, in the traditional way, inefficient and ineffective health providers, but will be used to ensure that services continue to be provided, particularly in rural areas, where the cost base may, necessarily, be more than it is in the metropolitan cities?

[Mr Lansley]

Yes, I understand that and I think that my hon. Friend makes entirely the right point. This is not about a bail-out; the commissioning board and Monitor will need to agree the methodology, because neither side will wish to undermine the integrity of the regulatory structure and the price structure that Monitor is responsible for, nor will the NHS commissioning board and commissioners want to pay any more for services than is necessary to secure continued access. None the less, continuing access to quality services for patients is the essential principle, and so there will be circumstances, particularly where it has become evident that in the absence of this there would be an unacceptable deterioration in or failure of services, in which it is necessary for the methodology to add to the tariff price.

[Fiona Mactaggart (Slough) (Lab)]

The right hon. Gentleman will recall that very shortly after Monitor had approved the granting of foundation trust status to my local district general hospital, Wexham Park hospital, it ended up in very serious financial difficulty, and I was grateful to him when he arrived with a loan to ensure the continuation of service. What I am not clear about in the regime that he proposes is who will be able to provide those kinds of resources when something as important as the district general hospital’s future is at risk.

[Mr Lansley]

I am grateful to the hon. Lady for that. I will deal with that matter in a moment, because subsequent amendments in this group continue the capacity of the Department of Health, for example, to make a loan in those circumstances—that would not change.

Of the five principal changes that I was talking about—

[Grahame M. Morris (Easington) (Lab)]

rose—

[Mr Lansley]

I have reached the third of them, so I will carry on for a moment, if I may.

Thirdly, if a provider gets into significant difficulties, we have provided Monitor with powers to be able to try to turn around the provider. The aim would always be to support the recovery of the provider, wherever this was possible. Specifically, the amendments require Monitor to maintain an ongoing assessment of risk to the continued supply of NHS services. Monitor must then intervene proactively to help a provider to address problems and, where necessary, agree contingency plans with commissioners. New clause 2 and amendments 100 to 104 achieve this.

Fourthly, we have put in place provisions to deal with the rare event of a provider no longer being sustainable in its current form. In that instance, the priority must be to secure continued access to the services patients need. This protection is particularly important in relation to foundation trusts, which of course are the principal providers of acute, emergency and specialist hospital services.

So we have put forward amendments that would build and improve on the previous Government’s regime established under the Health Act 2009. The improvements would ensure that foundation trusts do not revert to being NHS trusts and that commissioners take the lead in securing continued access to NHS services, and they would increase democratic legitimacy by allowing the Secretary of State to intervene in individual cases to protect patients’ interests. At the same time, we are retaining Bill provisions to allow Monitor proactively to regulate to secure continued access of NHS services delivered by companies and social enterprises, through provisions on the health special administration regime, should these providers become unsustainable. New clause 6 and amendments 107, 188 to 193, 195 to 204, 217, 218 and 371 to 372 achieve this.

Fifthly, it is essential that political accountability runs through what hon. Members will all know is central to our responsibilities to our constituents. Our plans therefore strengthen political accountability at both the local and national level. At a local level, the amendments enhance democratic legitimacy by extending local authority scrutiny to all NHS services. That is in contrast to previous proposals, where only designated services would have been subject to such scrutiny. At a national level, we will establish a process for the Secretary of State to veto proposals, in individual cases relating to unsustainable foundation trusts, if he decides that they do not secure continued access to NHS services and, as a last resort, to intervene where he believes that the NHS commissioning board or Monitor has failed to discharge its functions. This veto will ensure that the Secretary of State retains all the powers needed to retain his role—

[Grahame M. Morris]

Will the Secretary of State give way?

[Mr Lansley]

In a moment. I want to complete the five points; otherwise people might not see them in their entirety.

The veto will ensure that the Secretary of State retains the powers needed to fulfil his role in promoting a comprehensive health service. Amendments 205 to 207 and 208 to 216 achieve this.

[Grahame M. Morris]

Will the right hon. Gentleman clarify an issue to do with the Secretary of State’s powers to intervene in the event of failure? I am thinking in particular of the reports about freedom of information requests that appeared in The Guardian earlier in the week, which said that Department of Health officials had been in discussions with Helios about a potential transfer of between 10 and 20 NHS hospitals to the private sector. Is that a scenario in which the Secretary of State would use his powers?

[Mr Lansley]

I do not recognise such a scenario and in any case there will be no transfer of NHS-owned organisations and the estate and property of such to the private sector. We are not engaging in privatisation, so to that extent the question does not arise.

I must also make it clear that the implication of the proposals I have just described—

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State give way?

[Mr Lansley]

No.

The implication of these proposals is that we are not continuing with our previous proposals to have a system of prior designation. We are also withdrawing our proposals to apply insolvency law, including the health special administration procedure, to foundation trusts, so I hope that Opposition Members will not press amendments 29 and 30.

I hope that that explanation of the purpose of the substantive group of Government amendments will help the House. In a moment, I shall turn to some of the additional amendments that have been presented by other colleagues.

[Owen Smith]

Let me clarify a remark that the Secretary of State just made to my hon. Friend the Member for Easington (Grahame M. Morris). The Secretary of State said that there would be no instances where NHS properties might be transferred to private companies, but he will know that under schedule 23 there is provision for precisely that. Such companies are described there as a “qualifying company”. A licence holder could be a private company to which NHS material—even staff—and other liabilities might be transferred. Is that not right?

[Mr Lansley]

The point I am making is that we are not transferring foundation trusts or NHS trusts into the private sector. We are not planning to do that. The particular case to which the hon. Member for Easington (Grahame M. Morris) referred was misrepresented as a proposal to transfer the ownership of NHS organisations. There is no such proposal; we are not planning to do that.

As I have described, the Bill would establish a comprehensive system of regulation focused on protecting and promoting patients’ interests and applicable to all providers of NHS services. The purpose of part 3 is to protect our health services from the unrestrained operation of market forces—otherwise, why would we want this structure of regulation? That is why it is there. The provisions will ensure that services are not destabilised or undermined and will protect the public and patients’ interests.

Let us consider the implications of the Labour party’s amendment 10, which would remove part 3 of the Bill. The impact of removing part 3 would be to expose the NHS to the full force of competition law, as I described earlier, without the safeguard of a health sector regulator and without any sensitivity to the needs of patients, health services and our NHS. It should not be beyond the wit of Opposition Members to recall the impact on the health service and, in particular, on pharmacy services, when the Office of Fair Trading undertook an inquiry into the provision of pharmacy services from a competition perspective without any reference to the health perspective.

[Grahame M. Morris]

Will the Secretary of State give way?

[Mr Lansley]

No.

That is what happened in the past and it is important that it does not happen in the future. We must have a health sector-specific regulator to see the health-related aspects of such matters.

Labour’s amendment 10 would potentially expose the NHS to practices that we do not wish to see. That would include paying over the odds for private sector services, as the previous Government did when they paid £250 million extra to the independent sector for operations that were never carried out; the cherry-picking of easier operations by the private sector, which is an issue in the NHS because the previous Labour Government let it happen; unreformed payment by results, losing the focus on outcomes and integration; and the retention of a system of payment based on price. We are not introducing payment by results; we are reforming it. Payment by results, as implemented by the Labour party, was simply payment for price and volume, not for quality.

Amendment 10 would leave independent sector providers of NHS-funded services, which serve hundreds of thousands of patients a year, unregulated by Monitor and unprotected if the service in which they are being treated gets into financial difficulty. So Opposition Members will wish to consider whether all of those things are what they want to be voting for when they walk through the Lobby later on.

17:00

[Margot James (Stourbridge) (Con)]

Does my right hon. Friend think that the previous Government set up the system for private companies so that they could fail without any redress on the part of the Government precisely because the companies had such a favourable financial regime bestowed on them that they could not possibly fail?

[Mr Lansley]

My hon. Friend is right in relation to the independent treatment centre contracts. They were constructed in a way that effectively removed most of the financial risk from the operators. For other private sector operators in the NHS that is not necessarily true. For example, most of us would recognise that private sector providers are instrumental to continued access to many NHS diagnostic services. There are providers who could fail and at the moment no regulatory structure is in place for that.

Let us continue down the path of the implications of the removal of part 3, which the Labour party proposes. Part 3 includes clause 60. I am sure that Opposition Members are familiar with clause 60, their having served in Committee for so long. It is the means by which, if the hon. Member for Islington South and Finsbury (Emily Thornberry) recalls, we can consider the application of Monitor’s functions to adult social care. So precisely when we are legislating to be able to consider whether the implications of an issue such as that at Southern Cross are such that there should be an additional prudential regulatory regime, the Labour party would take away that opportunity.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Does the Secretary of State agree that it is unfortunate that the Government have not had an opportunity to table detailed amendments on how they would deal with situations such as Southern Cross? To table an amendment that simply says, “At some stage in the future, the Government may be able to do something about a failing organisation such as Southern Cross”, is not necessarily adequate. Although there will be a White Paper on social care next spring, we understand that there are unlikely to be any further details until that point.

[Mr Lansley]

I am confused. I understood that the hon. Lady was a member of the Bill Committees. [Hon. Members: “She was.”] She does not seem to have learned what is going on in the Bill. Clause 60 was not an amendment; it was in the Bill from the outset. It was not introduced as a result of what happened at Southern Cross. We had anticipated the need to address the extent to which Monitor’s functions in relation to the health sector—

[Emily Thornberry]

Will the Secretary of State give way?

[Mr Lansley]

No. I will answer her question. The functions that it exercises in relation to health care include assessing viability and taking action if access to services or the interests of patients or care users are threatened. The Government can consider that by virtue of clause 60. It was not an amendment. So the idea that the measure could not be scrutinised is absurd. It has been in the Bill through all the 100 hours in Committee. If the hon. Lady never said anything about it, that is her own fault and as the shadow care services Minister she should have been more on the ball.

[Emily Thornberry]

Will the Secretary of State give way?

[Mr Lansley]

No. She can sit down.

Let me come to the other Opposition amendments. Amendment 10 would delete all of part 3, which would be absurd. Some of the other Opposition amendments are equally absurd. Amendment 28 envisages that part 3 would remain in place, but that Monitor would license providers of NHS services. However, it then takes away any means of enforcement. Perhaps the Labour party has forgotten that in government if you create obligations it is rather helpful to create a means by which they can be enforced.

Opposition amendment 44 would take the Bill down a slippery slope by trying to prescribe the range of factors that Monitor should reflect in setting prices for NHS services. Such a list could never be exhaustive and would inevitably suggest that some factors were more important than others. It would undermine our ability to hold Monitor to account for setting prices that promote patients’ interests. We must focus Monitor on its duties to promote the quality, efficiency and effectiveness of NHS services, not on trying to prescribe in legislation how it goes about it.

Labour Members have tabled amendments to part 4 that indicate that they either do not understand the Bill, or have abandoned their previous, repeated commitment to supporting all NHS trusts in becoming foundation trusts. They gave that commitment back in 2003, when they passed the necessary legislation, and repeated it in about 2006, when they said that trusts should all be foundation trusts by 2008. The Labour party manifesto from last year—2010—said:

“All hospitals will become Foundation Trusts, with successful FTs given the support and incentives to take over those that are under performing”.

Compare our programme for such hospitals as those in Trafford and Carlisle. The manifesto continued:

“Failing hospitals will have their management replaced. Foundation Trusts will be given the freedom”—

additional freedoms—

“to expand their provision into primary and community care, and to increase their private services”.

We will debate that later today, but I should complete the quote, or I might be accused of being selective:

“where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS.”

That is exactly what we are proposing.

The Labour party appears utterly confused. Does it support foundation trusts or not? The NHS Future Forum said that all NHS trusts should continue to work towards achieving FT status by 2014. It was right: achieving FT status is about demonstrating clinical and financial stability, and we think that all NHS providers should be expected to do that, in the interests of NHS patients and staff. If we maintained the NHS trust legislative model in statute, we would risk losing the change in mindset and the momentum that is being demonstrated by prospective foundation trusts.

Our consequential amendments 219, 220 and 367 to 370 will simply remove references to NHS trusts when they no longer exist—and not, of course, until then. For the hon. Member for Pontypridd, I add that our amendments 185 to 188 make it clear that—sadly for those in Wales—a foundation trust cannot merge with or acquire a Welsh NHS trust.

The Opposition want to take the retrograde step of de-authorising foundation trusts, retaining NHS trusts under the Secretary of State’s direct control, and having them dependent on the layers of bureaucracy that go with that. There would be all the regulatory requirements for foundation trusts and independent providers, and all the bureaucracy that has accompanied NHS trusts and strategic health authorities. That would undermine the FT regulatory regime and the objective of all NHS trusts becoming FTs. Opposition Members who voted in favour of the original legislation establishing foundation trusts in 2003 can have no credibility in supporting Labour now, because the very purpose of that legislation was to give hospitals greater autonomy.

Other Opposition amendments would simply result in duplication and reduced coherence in the Bill. For example, amendments 1166 and 19 seek to retain controls on goods and services, and borrowing and property, but that would duplicate Monitor’s powers through the licensing regime. Deleting clause 166, as the Opposition propose would undermine our intention of increasing transparency in the public financing of foundation trusts. I am looking for the hon. Member for Slough (Fiona Mactaggart); this would have been her moment. Through our amendments, we can show how we can maintain support for FTs, if necessary, in a transparent fashion, including through a requirement, which the Labour party apparently wants to delete, on the Secretary of State to publish an annual report showing what form of financial support has been given to foundation trusts.

I turn to the amendments tabled by my Liberal Democrat friends below the Gangway, who expressed their intention of improving NHS services and ensuring sustainable access for patients. We all share those aims, but I believe that we have in place alternative approaches to meeting those aims. The hon. Member for St Ives tabled a series of amendments emphasising the need to secure sustainability in the provision of NHS services. Securing sustainable access to meet patients’ needs is fundamental to good commissioning. We would expect the board to ensure that there was sufficient competency over issues when it authorised clinical commissioning groups to take on their new responsibilities, and when holding them to account for doing that job.

As the Government have said many times, our focus is on outcomes, including ensuring that patients have access to the services that they need when they need them. That the outcomes must be sustainable is obviously implied, but that is not necessarily the same as saying that commissioners must ensure the sustainability of particular providers or particular services, as amendments 1205 and 1209 suggest when referring to the sustainability of “existing NHS services”. In some cases it will not be in the interests of patients to maintain the status quo—for example, where those services may be unable to improve in line with new standards of clinical best practice, or where there is clear evidence that centralising specialist services on fewer sites would improve health outcomes, as we have seen in examples relating to cardiac, stroke and trauma services. So although I agree with the intention behind these amendments regarding the role of commissioners, I must urge the hon. Member for St Ives not to press them.

I addressed earlier the hon. Gentleman’s amendments about integration and collaboration. On integration, we agree with the conclusion of the NHS Future Forum that integrating services around the needs of patients and giving patients greater choice over who provides those services are not mutually exclusive. As the NHS Future Forum made clear, this is a false dichotomy. As the NHS Future Forum’s report stated:

“If commissioners want to commission integrated care they will only succeed in doing this by creating a new market in integrated care services and stopping the current commissioning of episodic services from different NHS organisations.”

As the hon. Member for St Ives will recognise, his amendments 1207 and 1208 are based upon that dichotomy, so I ask him to withdraw them.

[Andrew George]

Will the Secretary of State give way?

[Mr Lansley]

No. I do not want to intrude on the time of other Members.

Amendments 1219 and 1220 tabled by my hon. Friend the Member for Southport (John Pugh) would apply the Enterprise Act 2002 to mergers of the activities of foundation trusts with businesses, but would exclude from these arrangements mergers between foundation trusts. I have given careful thought to this proposal, but I am not convinced that it would address two of the problems of the existing regime.

There is currently legal uncertainty as to when and where the 2002 Act would apply to mergers of foundation trusts. As a result, under the current arrangements for the review of mergers involving foundation trusts by the Co-operation and Competition Panel, there is always a potential risk of duplication—or worse still, double jeopardy. The risk arising from a separate regime for foundation trusts would be increased where a trust’s activities extended beyond Monitor’s remit—for example, where a foundation trust provided social care or supplied goods. Consolidating oversight of foundation trust mergers under the Enterprise Act, as proposed by the Bill, would avoid the risk of double jeopardy and eliminate the uncertainty of the current approach.

Mergers are a specialist area. Hence, we think it is right to maintain existing responsibilities and expertise within the Office of Fair Trading and the Competition Commission, rather than resource a further body to consider potential mergers in health care. It may reassure my hon. Friend if I say that the OFT and the Competition Commission would consult Monitor to ensure that they had a full understanding of the health care issues involved.

[Tom Blenkinsop]

Will the Secretary of State give way?

[Mr Lansley]

No.

The OFT and the Competition Commission would obtain Monitor’s view on how a proposed merger would affect competition in the sector and whether it would bring benefits for patients. These views would then be considered, along with other evidence. However, the OFT would have discretion not to refer, where patient benefits outweighed any adverse impacts on competition—further illustration of the fact that competition law is not about promoting competition as an end in itself.

In conclusion—

[Fiona O'Donnell (East Lothian) (Lab)]

Will the Secretary of State give way?

[Mr Lansley]

No.

I return to the choice offered in this group of amendments between the Government and Opposition Members. The Government are putting forward a range of amendments to protect patients’ interests and to safeguard them when providers run into difficulties and access to services is threatened. The amendments show that the Government have listened and improved the Bill. These amendments are on top of the changes made at earlier stages to strengthen the safeguards and protections offered by Monitor as a new provider regulator.

The Opposition simply want to delete the whole of that part—delete the safeguards to stop price competition, delete the means to stop cherry-picking, delete the means to enable NHS providers to work on a level playing field. The Government’s new clauses and amendments move us forward with the right safeguards in place. Labour would take us back. I urge the House to support the Government new clauses and amendments in this group—specifically, new clauses 2 and 6 and amendments 90 to 107, 113 to 220, and 366 to 372.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Secretary of State has insisted that the amended Health and Social Care Bill shows that the Government are listening, but despite their reassurances there are many reasons why the Bill remains a threat to the future of the NHS. Central to the reforms is the proposal to increase competition across the NHS by opening it up to providers, particularly those from the private sector. The Government claim that increasing competition drives down costs and improves quality, but overwhelming international evidence suggests that this simply is not the case in health care.

17:15

[Chris Skidmore (Kingswood) (Con)]

Is the hon. Lady placing on the record her party’s opposition to any form of competition in the NHS?

[Debbie Abrahams]

As we have shown, we are not opposed to private sector involvement in the UK’s health system. What is important is that it should add value and capacity. The Government’s proposals are a completely different ball game.

[Mark Simmonds]

Will the hon. Lady give way?

[Debbie Abrahams]

No, I will make some progress.

The listening exercise failed to register the concern of many health professionals. Despite what the Government say, many health professionals feel very concerned about the amended Bill. Instead, the Government changed Monitor’s duty from one of promoting competition, as set out in the first version of the Bill, to one of preventing anti-competitive practice. The lawyers will have an absolute field day with that one. The Government talk of reducing bureaucracy, but I think we will see even more bureaucracy as a result of this.

[Fiona O'Donnell]

Does my hon. Friend recall, as I do, that time and again in the recommitted Bill Committee we asked Ministers and Professor Field what the impact of that change would be? We are still waiting for a satisfactory answer.

[Debbie Abrahams]

There are many unanswered questions about the Bill, which makes it particularly dangerous.

By opening up competition under the guise of increasing patient choice and clinician-led commissioning, the Government are trying to increase both demand and supply for these services, but the implication for a single-payer health system with a fixed budget, such as the NHS, is that this will inevitably lead to financial meltdown. The only way this can be avoided is by injecting extra capital into the system and the Bill achieves this in many ways. We need to look at not only this cluster of amendments but all the amendments and clauses in the Bill as a whole, because they are interrelated.

First, the Bill allows foundation trusts to borrow money from the City to invest. This is supported by the opening up of EU competition law. Foundation trusts are currently social enterprises and are exempt from part of EU competition, but this opening up will open the flood gates. It means that the trusts will have to compete for tenders with private health care companies. They will have to repay the money they have borrowed by treating more and more patients, including private patients, which will be aided by the abolition of the cap on income from private patients. However, many foundation trusts will still struggle, so the Bill introduces a new insolvency regime to enable private equity companies to buy NHS facilities and asset-strip them, which has direct parallels with the demise of Southern Cross.

Secondly, waiting lists will go up. We are already seeing that across the country, including in my constituency. We have seen that already because unrealistic efficiency measures mean that cash-strapped primary care trusts are rationing access to treatment such as cataract surgery and hip replacements.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

Does the hon. Lady not accept that waiting lists have not gone up in England but have gone up in Wales, where Labour is in control of the NHS?

[Debbie Abrahams]

It is very interesting that the Government have changed how they measure waiting lists and now use an average, so those indicators are a movable feast.

As waiting lists go up, new health insurance products on the market are enticing people to believe that all their treatment and care can be met fully by the private sector. This will be complemented by new insurance markets set up for top-ups and co-payments. We know from the United States that people on low incomes will be less able to afford these products directly, which will impact on the existing health inequalities that the Secretary of State has stressed his commitment to reducing. Why are we doing this? It will increase and exacerbate the inequalities that already exist in accessing care.

Finally, the Bill allows both the national commissioning board and clinical commissioning groups to make charges. I foresee that in the next Parliament there will be more direct patient charges if this Government get in again. As the NHS budget is fixed, the drive for excess capacity will drain that budget rapidly. That will result in clinical commissioning consortia increasingly becoming rationing bodies. As waiting lists increase, they will attempt to manage the issue by reducing the number of core services. That will drive foundation trusts into further debt, forcing closures, mergers and private management takeovers, and we are already seeing that.

[Tom Blenkinsop]

On the point about foundation trust mergers, when was the last time the Office of Fair Trading was in charge of a merger of one foundation trust and another? Was it not in fact the Co-operation and Competition Panel, which, according to the Bill, will sit within Monitor?

[Debbie Abrahams]

I am grateful to my hon. Friend for drawing that to my attention. He is absolutely right.

The Secretary of State’s duty to secure and provide a comprehensive health service is a key issue and needs protecting in full. It should not be changed at all. Why are we changing it if is already acceptable? I am sure that we will revisit the matter tomorrow.

Although the Government have supposedly made concessions, recognising that attempting to privatise the NHS, just as the utilities were privatised in the 1980s would not be acceptable to the public, they have changed tack, not direction. Opening up the NHS to EU competition law may dramatically increase the amount of capital available to bring into our health service, but ultimately that capital will flow back to investors at a profit, at the expense of patients and the UK taxpayer. That will only increase income and health care inequalities even further—another way in which the Secretary of State’s duty will not be met. It is clear that the NHS cannot survive the Bill. The NHS needs appropriate reform and proper accountability, but definitely not an opening up of the market in this way.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Lady acknowledge that when her party introduced foundation trusts back in 2003, many of us warned that it would lead to precisely the kind of privatisation that is now being threatened? Does she now regret that?

[Debbie Abrahams]

Fortunately, I was not a Member of Parliament at that time. As I said earlier, I have no problem with the private sector’s being part of our health system when it adds capacity and value, but the Bill is a whole new ball game.

[Tom Blenkinsop]

There is a fundamental difference between this Bill and any other on the health service. The Government are writing the Enterprise Act 2002 directly into the Bill, which means that it refers to foundation trusts as enterprises and businesses. That extends the ability to merge with business, not just within the NHS framework. That means that the Government have potentially opened up the NHS to European and UK competition law, and they know that full well.

[Debbie Abrahams]

I thank my hon. Friend for that contribution.

[Dan Byles (North Warwickshire) (Con)]

What does the hon. Lady say to Professor Stephen Field, who was the chairman of the independent NHS Future Forum? He told the Bill Committee:

“When we spoke to the Government and…a lot of senior staff at the Department of Health…we did not, at any time, pick up any feeling that anyone wanted a free open market where people could come in and privatise the NHS, as some people have said in the press.”––[Official Report, Health and Social Care (Re-committed) Public Bill Committee, 28 June 2011; c. 15, Q26.]

[Debbie Abrahams]

I would be happy to forward to the hon. Gentleman a British Medical Journal article that reproduced in full the concerns of health care professionals that were not included in that account. Unfortunately, there is an element of bias in how they have been reported.

[Frank Dobson]

Steve Field was a great asset to the Government when he was president of the Royal College of General Practitioners and overwhelmingly welcomed everything that they were proposing. That was probably why he was replaced by a new president who does not do that.

[Debbie Abrahams]

I thank my right hon. Friend.

When I raised these issues in the recent recommitted Bill Committee, the Minister suggested that I was scaremongering and, with the rest of those on the Government side, refused to accept any of our amendments—not a single one. Given what recent revelations are proving, perhaps he would like to withdraw some of his comments and concede that I have not been scaremongering.

I urge Liberal Democrat MPs who have felt compelled to support this Bill and their Front-Bench colleagues but whose conscience tells them that it is wrong to vote against the amendments and the Bill. This is not what they signed up to.

[Mr Stephen Dorrell (Charnwood) (Con)]

I welcome the amendments that the Government have tabled for consideration. I also welcome the very detailed way in which my right hon. Friend the Secretary of State introduced what is, as I am sure he will acknowledge, a substantial group of amendments. He emphasised that their purpose is to give effect to the undertaking that the Government gave when they set up the NHS Future Forum to ensure that the findings of that forum are reflected in the legislation, and that the Bill, when it reaches the statute book, is built on the work of Professor Field and his colleagues.

One purpose of the amendments is to respond to many of the points that have been made, throughout the passage of the Bill, about the role of Monitor. I completely agree with my right hon. Friend that many of those observations about the supposed role of Monitor have been based on a misunderstanding, whether deliberate or otherwise, of the intention behind the Bill when it was first introduced. Whether the misunderstanding was deliberate or accidental, the Government are responding to virtually all those points in order to make it clear that, in the context of the Bill, the central purpose of Monitor is not to be a blind economic regulator based on the assumption that the health service is simply another utility. Various loose words have been used that bear that construction—but never by Ministers, and the implications of those observations have never been accepted by Ministers. As I have understood it—this is why I have supported the Bill throughout its passage—the Government’s intention has always been to ensure that the new NHS envisaged by the Bill gives effect to the basic commitment on which the Government were elected to ensure that the health service secures equitable access to high-quality health care for all patients regardless of their ability to pay.

[Fiona O’Donnell]

The right hon. Gentleman referred to a misunderstanding of the original Bill. The Secretary of State said that that arose because he was a poor communicator. Do so many organisations still oppose the amended Bill because he is still a bad communicator or because it is still a bad Bill?

[Mr Dorrell]

In considering these amendments, it is important to refer to the individual functions of Monitor envisaged in the amended Bill and test them against the assertions that have been made, throughout the passage of the Bill, about what Monitor is there for. We must also test them against the Future Forum’s recommendations about how the role of Monitor should be clarified in order to remove these misunderstandings.

First—I warmly welcome this—it is made clear in the Bill as amended and the supporting documentation from the Department that although the Government intend to continue, as did their predecessor, to encourage the conversion of NHS trusts to foundation trusts, there will be no reduction in the standards required to qualify for the status of foundation trust. The registration principles established by Monitor, which are broadly welcomed throughout the health service, are intended to justify the independence that comes with foundation trust status. Those standards will continue as a gold standard under the new NHS, and achieving them, rather than meeting some artificial deadline, is the key determinant of whether a trust achieves foundation trust status. I welcome the fact that the Government have made that clear. It responds to a specific recommendation by the Future Forum, and it is exactly right.

17:30

Secondly, the Future Forum also envisaged that the role of Monitor should not come to an end on the day that a trust achieves foundation trust status. There should continue to be, on behalf of the taxpayer and of patients, an oversight role to ensure that organisations that have achieved foundation trust status continue to meet those standards and to deliver the quality of care required by patients and commissioners. That is now set out clearly in the Government’s supporting paperwork. It is part of the role of Monitor, and I welcome the fact that—having established that there will be no diminution of standards in the achievement of foundation trust status—it will have continuing oversight to ensure that those standards continue to be met.

The third point that was highlighted by the Future Forum—once again, it was accepted by the Government in these amendments—is the need to ensure that not only will there be continuing oversight of the achievement of those standards by foundation trusts, but Monitor will have the power to intervene if a threat emerges to the achievement of those standards by a foundation trust. Patients can be confident not only that there will be oversight, but that Monitor—on behalf of the taxpayer and of patients—has the capacity to intervene to ensure that action is taken if management in post at a foundation trust is not delivering the standards required.

[Mark Simmonds]

As always, my right hon. Friend is making an extremely powerful speech. Does he accept the need for Monitor to ensure that foundation trusts not only continue to meet basic standards but continue to improve those standards year on year, and thereby improve patient outcomes?

[Mr Dorrell]

I absolutely agree with my hon. Friend. One of the further important clarifications in their position is the stress that the Government have placed—rightly—on the importance of the link between Monitor and the Care Quality Commission to ensure that standards in foundation trusts are not just about the achievement of financial targets, but are about standards of care quality delivered to patients. The link between the two regulators—one of quality and the other of financial standards—is an important part of the regulatory structure that the Government are introducing.

[Andrew George]

I entirely endorse the point that my right hon. Friend makes about the need to uphold standards and the role of Monitor in that respect. However, with regard to the Secretary of State’s response to me about the sustainability of essential services—acute emergency trauma centres—does he agree that Monitor must safeguard those services and not allow them to be eroded by the competitive environment in which they will operate?

[Mr Dorrell]

I agree that the sustainability of essential services—or, in the Government’s wording, the continuity of essential services—is a key role of Monitor. If I may interpret what my right hon. Friend the Secretary of State said, the patient’s interest is continuity of service, but not necessarily from the same provider for ever more. There has to be a commitment to sustain the service, and if there is to be a change of provider, the service has to be sustained through the change of provider, but the service does not necessarily have to be sustained by the same provider. Nor has there ever been such sustained service. There are not many people who rely on the service once provided by the Westminster hospital, as it is now a block of flats. I believe, however, that the service delivered to patients in this part of London is better as a consequence of the change that resulted from that decision.

[Grahame M. Morris]

As always, the Chairman of the Health Select Committee, is making a powerful contribution. He has really hit the nail on the head. The fundamental point, as evidenced in the Bill, is not that the provider could change—that has happened in the past, as he said, although the provider has always been a public sector provider, either in an NHS trust or an NHS foundation trust—but that, under the Bill, the provider could well be a private sector provider.

[Mr Dorrell]

I am grateful to the hon. Gentleman, who is a member of the Select Committee, because he provides me with a link to my next point—I was beginning to wonder how I was going to get on to it.

The health service has not always provided services from a public sector provider. Until this Bill and the powers it gives to Monitor, regulatory bodies in the public sector had not had the opportunity to inquire into the sustainability of services provided by private sector providers. My right hon. Friend the Secretary of State made the point that the role of Monitor under the Bill is to ensure first—if I may repeat myself—that foundation trusts are of a high quality when they are launched; secondly, that they are accountable for retaining their high standards; thirdly, that we intervene early if they start to go off the rails; and, fourthly, that if they get into serious difficulty, we have the capacity, through Monitor, to continue to deliver continuity of service to those who rely on public health provision, whether from an NHS foundation trust or, as a result of the Bill, for the first time from the private sector. I regard that as a significant step forward in the delivery of continuity of care for NHS patients, whether provided, as the vast majority still will be, by public sector institutions or by some of the independent sector treatment centres introduced by the previous Government.

[Rosie Cooper]

Does the right hon. Gentleman think that standards can be maintained, and be seen to be maintained, in foundation hospitals if they are allowed to do what they are currently doing, which is not to disclose all information relating to, for instance, complaints procedures or whatever? Furthermore, does he not think that board meetings should be held in public?

[Mr Dorrell]

My understanding is that the Government have clarified that foundation trust board meetings should be held in public and that, in future, it will be a requirement of licensing by Monitor. On the much broader point, I absolutely agree—the hon. Lady, who is another member of the Select Committee, knows that I agree—that providers of care to NHS patients, whether public or private, ought to have an obligation to provide information on the outcomes that they achieve and certainly on any complaints and other processes initiated by patients about the care they receive. That was one of the strong recommendations that the Select Committee made following its work on complaints. I think that that obligation ought to rest on all providers of care to NHS patients, whether they are foundation trusts or any other form of provider.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Will the right hon. Gentleman provide some clarification? I think that he said “should” and not “must”. For other functions, particularly relating to local government, the Government seem to be into dropping standards and codes of conduct—that is certainly the case in local councils—but surely trusts “must” have meetings in public, not “should”.

[Mr Dorrell]

Ministers can correct me, but my understanding is that, under the obligation being introduced, they “must” meet in public. I have no authority to speak for the Government, but I believe that that is what the Government intend. For myself, as a patient of a trust or other NHS provider, whether in the public or private sector, my interest lies in ensuring that the information about my—

[The Minister of State, Department of Health (Mr Simon Burns)]

Will my right hon. Friend give way?

[Mr Dorrell]

Of course.

[Mr Burns]

I am grateful to my right hon. Friend for giving way and allowing me to clarify the point. Let me reassure him that, yes, such meetings must be held in public.

[Mr Dorrell]

I am grateful to my right hon. Friend, who answers the hon. Member for Worsley and Eccles South (Barbara Keeley) with very much more authority than is at my disposal.

I want to make one final point and it is a direct response to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). Of all the misrepresentations about the intentions of this Bill that we have listened to since the White Paper was published over a year ago, the most persistent is that this is somehow a Bill—a ramp—for the privatisation of the health service.

I was first a Health Minister more than 21 years ago. Throughout that period I have listened to speeches directed first at my right hon. and learned Friend the current Justice Secretary, when he was Health Secretary, and subsequently at all his Labour and Tory successors, including me, although probably excluding the right hon. Member for Holborn and St Pancras (Frank Dobson). All their legislative and other proposals to introduce more flexible and patient and standards-oriented structures in the health service were opposed by somebody or other on the grounds that they were going to privatise the health service. If that was the purpose of those policy initiatives, the one thing that they all have in common is that they have been singularly unsuccessful. If it is the policy purpose of this Bill to privatise the health service—which I do not for one moment believe it is—it will, I am sure, be as unsuccessful as all the other measures that went before it.

[Frank Dobson]

I begin with a reminder. I was one of those Labour people who voted against the establishment of foundation trusts and the setting up of Monitor. In doing so, I was supported by those on the Conservative Front Bench, so I do not think that the Conservatives should claim any consistency in these matters.

My second point is that although one would never dream it was true from listening to Ministers or their supporters, it is quite clear that the national health service is now working very well and is more popular than ever; and yet we are told that it needs a radical overhaul. However, the popularity of the national health service at the time of the last general election probably explains why both the Conservative party and the Liberal Democrats promised that there would be no top-down reorganisation of it. However, if neither the Bill as originally produced nor the post-pausal Bill that we have now is top-down change, God knows how one would define it.

The whole purpose of this Bill is to shift us away from the basic collaborative approach to the provision of health care in this country and to substitute a large amount of competition, gradually involving more and more of the private sector and, I believe, privatisation. In order to put things in perspective, it is worth pointing out that when the right hon. Member for Charnwood (Mr Dorrell), ceased to be the Secretary of State for Health, the national health service was performing 5.7 million operations a year in its hospitals. When Labour left office, it was performing 9.7 million operations a year, an increase of 58%. That was the result of improved working practices developed by—

[Dr Poulter]

Will the right hon. Gentleman give way?

[Frank Dobson]

No, not for the minute.

That change was the result of improved working practices developed by the people working in the national health service, not the result of any structural changes. It was also partly the result of the biggest hospital building programme in history, as well as a lot more new and better equipment, newer GP surgeries, 78,000 extra nurses and 27,000 extra doctors. Those were among the reasons that the NHS became so much more popular. It is popular because, for most people in most parts of the country most of the time, it is already doing a very good job. However, that is now going into decline, because many people working in the NHS carrying out pre-legislative preparatory work on the proposed changes are having to divert their efforts into bringing about structural change. That is one of the reasons waiting lists and waiting times are going up—something that the Government deny is happening.

17:45

[Lyn Brown (West Ham) (Lab)]

Bearing in mind the lack of popularity of the proposals among our constituents, is my right hon. Friend as worried as I and my constituents are about the £850 million that is being spent on redundancies and the projected £2 billion of primary care trusts’ budgets that is being held back from patient care to cover the risks and costs associated with the reorganisation?

[Frank Dobson]

I entirely agree. Nobody could possibly claim that redundancy payments constitute money being spent on improving services for our constituents. That is just money down the drain as far as patient care is concerned.

The fundamental problem behind the proposals is that the Government are, in effect, proposing a further major fragmentation of the national health service. In the past, up to the point at which the previous Tory Government introduced an internal market, the spending on administration in the NHS amounted to 4% of the total. That was largely because great big slugs of money were transferred round the system, and I am prepared to accept that there might be some disadvantages in that arrangement. Since then, however, under that Government and the Labour Government, the system has changed to one in which the money follows the patient. That has led to the creation of all sorts of exceptionally expensive systems to bring about individualised transactions, which has resulted in the cost of administering the national health service rising to 12% of the total—an increase of 8%. The NHS is spending about £100 billion a year at the moment, so an extra £8 billion that should have been spent on patient services is now being spent on the administration of the semi-fragmented system. What is now being proposed will involve yet further fragmentation, and I shall explain why I believe we will end up spending yet more money, but not on patients.

[Chris Skidmore]

The right hon. Gentleman has mentioned the £8 billion being spent on administration in the NHS. I assume that he therefore welcomes the coalition Government’s decision to cut the administration budget by £5 billion by 2015. In his speech so far, however, he seems to be suggesting that the status quo is acceptable. I believe that it is unacceptable. Does he welcome the fact that we will be putting an extra £12.5 billion into the NHS?

[Frank Dobson]

If the hon. Gentleman—and, for that matter, the Secretary of State and the Chair of the Health Select Committee—had ever listened to what I say, they would know that I think that we need change. We need organic change, however, rather than structural change, because structural change generally costs more than it provides. If the hon. Gentleman thinks that introducing a system in which virtually every transaction will be a legally binding document, with herds of lawyers grasping their share of proceedings, will reduce the amount spent on administration, he obviously believes in Father Christmas and various other mythical figures.

[Barbara Keeley]

Before we get into any more claims of more being spent, I want to touch on two examples of cuts, caused by the cuts and efficiency savings, which I raised with the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow). The most deprived ward in my constituency is losing its NHS walk-in centre and all the people with long-term conditions are losing active case management. I raised those two cuts made by Salford PCT with the Minister in an Adjournment debate, to which I have received no answer. There is no answer. People in the most deprived wards with the greatest health inequalities are suffering from these cuts. I will not hear any more about more investment being made, because all I see as a constituency MP is less investment.

[Frank Dobson]

I agree entirely with my hon. Friend. A further point is that I doubt whether there is a single constituency anywhere in the United Kingdom of Great Britain and Northern Ireland that has seen more change in health provision than mine. There are not many places where a virtually trouble-free amalgamation of two major and famous teaching hospitals into one has taken place successfully. There are not very many places that have seen more small GP practices getting together in one location and improving their performance. Those things have always been done with my strong support, even when on some occasions, at least at the outset, the ideas were not popular with some local people. Therefore, I do not accept that I do not believe in change. I believe in sensible change, not stupid change, but stupid change is what we seem to be getting.

[Mr Stewart Jackson (Peterborough) (Con)]

I admire the right hon. Gentleman’s chutzpah, but I wonder whether he was missing in action during the last Parliament. Some of us were saying in 2008 that the imposition of independent sector treatment centres—Darzi centres—would have a direct impact on the budget of primary care trusts and would cause the development of structural deficits that would impact directly on poorer areas with smaller primary care facilities. Where was the right hon. Gentleman then, when it came to attacking his own Government on that specific issue?

[Frank Dobson]

I was attacking them! I am sorry if the hon. Gentleman did not notice, but I believe I was the first person to expose the fact that on average the private sector was paid 11% more per operation than the NHS was getting for the equivalent operation. I shall take no lessons from anybody when it comes to opposing some of the daft things that went on. I did oppose them and I am proud to have done so. What is being proposed now, however, goes far beyond that. As my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who has a great deal of knowledge in these matters, has pointed out, there is scarcely any evidence from anywhere in the world to show that a competitive system delivers better health care than a collaborative system.

To ask the essentially collaborative health care system in this country to turn over to being competitive is a bit like asking the Meat and Livestock Commission to promote vegetarianism: it is simply not what people want to do; it is not their approach and nor should it be. It remains the case that Monitor is still rigged in favour of promoting competition. Let me point out—hopefully without putting my glasses on—that clause 58(3) states:

“Monitor must exercise its functions with a view to preventing anti-competitive behaviour in the provision of health care services for the purposes of the NHS which is against the interests of people who use such services.”

However, it does not say that “Monitor must exercise its functions with a view to preventing competitive behaviour in the provision of health care services which may be against the interests of the people who use such services”. Apparently, then, there is a basic, intrinsic and fundamental assumption that competition must be beneficial and non-competition must be harmful. If the Government say that Monitor is neutral, it should be given a neutrality in respect of competition and non-competition. As I think the hon. Member for Peterborough (Mr Jackson) would agree, the unfair competition of some of the independent treatment centres was harmful to and threatened the services provided by neighbouring NHS hospitals. There is clear evidence here of problems within the private sector.

I recall that, a few years ago, United Health—a subsidiary of the US United Health—took over three GP services in my constituency. It bid that it could provide the range of services for less than the local GPs, so it got the contracts. It has not complied with all the conditions that were set, but the primary care trust decided that it could not take it to court because it would be such a lengthy and expensive exercise and it feared that the PCT might not win. Not content with that, United Health recently announced that it was selling the franchise to another private outfit. It did not consult the staff. It did not consult any elected local representatives—neither me nor councillors. Above all, it never consulted the patients. These private sector outfits regard patients as part of the chattels that they can dispose of to maximum benefit and maximum profit.

That illustrates the fact that if we are to have contract-based provision of services, a huge amount of lawyer effort will be put into trying to draw up watertight contracts. What one lawyer thinks is a watertight contract, another lawyer will make a leaky contract by puncturing a hole in it, and we will go over to the system in the United States, where zillions of dollars are spent on court challenges or settlements with the providers of health care.

Furthermore, there is virtually no major American supplier of health care that has not been indicted for defrauding federal taxpayers, city taxpayers, state taxpayers, doctors or patients—and sometimes all five. I thus asked the Secretary of State whether he would rule out giving any NHS contracts to any organisation that had been indicted for defrauding people in another country. He gave me about a page-long answer, which could be summarised as, “No, he would not rule them out.”

We are thus talking about the possibility of European competition law being used to force our Secretary of State to allow people to give contracts to American companies whose greatest claim to fame is that they have defrauded innumerable Americans. I think that that is intolerable. I would have thought that all these anti-EU Conservatives found it rather embarrassing to think that European law was going to be used to allow fraudulent Americans to get contracts working in our national health service. All those things, however, will be possible under the system proposed by the Secretary of State.

18:00

Many people—including, possibly, me in this speech—will find it quite difficult to mount an entirely logical and coherent response to this collection of amendments, given their nature, scale and variety. Let me return to a point that I made when the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), was introducing the ludicrous programme motion. I believe that to make such fundamental changes to the national health service—changes whose consequences are, at the very least, unpredictable—by means of 1,000 amendments, albeit some of them trivial, and to say to people in the national health service, “Your sovereign elected House of Commons has seriously considered all the changes that the Government are proposing and has exposed them to scrutiny”, is to treat the people who work in the service, and their patients, with contempt.

[Grahame M. Morris]

May I take up my right hon. Friend’s point about effective scrutiny and the assurances that Ministers have given the House? The knives prevented us from debating two of the Bill’s most significant clauses in terms of costs and implications, clauses 29 and 30, which deal with the abolition of strategic health authorities and primary care trusts. The redundancy costs will amount to more than £1,000 million.

[Frank Dobson]

I entirely agree with my hon. Friend. I think that nowadays those who call themselves members of the Conservative party only purport to be Conservatives. The basic Conservative approach in this world is, broadly speaking, not to make great changes without being absolutely certain that substantial benefits will result from them. A proper Conservative recognises the problems that arise during the process of change, and the unpredictability of things in human life. What we have now, certainly in relation in health and possibly in other spheres, is a Government who are going ahead with something which—good God!—cannot be regarded as well thought out, given that they have tabled 1,000 amendments on Report.

[Barbara Keeley]

I winder whether my right hon. Friend heard the Leader of the House say to the Hansard Society that

“it has simply become too easy for the Government to sideline Parliament; to push Bills through without adequate scrutiny; and to see the House more as a rubber-stamp than a proper check on executive authority.”

He also said that, in the Government’s view,

“a strong Parliament leads to a better Government.”

Does my right hon. Friend believe that the Bill, and the very shortened debate on its recommittal, constitute a good illustration of that?

[Frank Dobson]

In fairness, I think that given the accuracy of the present Government’s aim, if they tried to rubber-stamp something they would probably miss.

[Dan Byles]

In view of the speech that the right hon. Gentleman is making and his definition of a “proper Conservative”, I wonder whether he has just come out of the closet as a proper Conservative himself.

[Frank Dobson]

People have described me as old Labour, but I have moved on from that. I am now heritage Labour. Part of our heritage, however, is the national health service, and it is not the Tories’ heritage either. Those who play with the national health service—which is what I think the Government are doing, purely for ideological reasons—do us a disservice in two ways. They threaten the likely performance of the national health service and the people working in it, and they threaten the relationship between the British people and the national health service.

[Fiona O'Donnell]

Will my right hon. Friend give way?

[Frank Dobson]

No, I will not.

I believe that the national health service is popular for two reasons: because, in most parts of the country and for most of the time, it does a good job for people; and because people value the thought that it not only looks after them but looks after their families, looks after their neighbours, and looks after all of us. I believe that, in many ways, that is its most important function.

We live at a time when everyone is filled with growing concern about the divisive elements in our society, and the national health service, along with the feeling that people have for it as a collaborative organisation, is one of the few exceptions to that. The health service does not just bind the wounds of people in this country, but helps to bind us together. That, I believe, is why it is so dangerous that the Government are going against its basic principles, thus risking not only its performance, but its relationship with us and its binding function in our increasingly divided society.

[John Pugh (Southport) (LD)]

I wish to speak to my amendments 1219 and 1220, and against amendment 10. The House is right to be sceptical about the blessings of the internal market in health. It is right to be worried about price competition, which everyone thinks is a race to the bottom. It is right to be concerned about the reckless extension of “any willing provider”, and it is correct in fearing that health services will be increasingly exposed to competition law, including EU competition law. It should fear the huge transactional costs that will be incurred in the hardening of the commissioner-provider split. It should fear the threat to integration, and it should fear cherry-picking, particularly in a narrow tariff system based on payment by results. It should also fear the blurring of the difference between public and private hospitals, and the financial incentives given to the private sector under the banner of choice.

That is why I dislike the greater part of what Tony Blair did to the NHS. Those who are now Opposition Members voted for all that, and that is where we are now: it is the default position. As one Opposition Member said, Labour has put all the bricks in place. A few moments ago we witnessed the strange anomaly of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) complaining about a feature of foundation trusts—their ability to borrow on the private market—which I consider to be a direct consequence of Labour legislation.

The choice for the House is not between Aneurin Bevan’s NHS and the Bill, but between Blair’s NHS and Secretary of State’s version. If I were to sum it up neatly, I would say that the Secretary of State’s version most closely resembled Blairism with clearer and more equitable rules. First, there is an overt sector regulator instead of the powerful covert regulating body, the Co-operation and Competition Panel, which has been making all the decisions that Monitor will make in a more overt way. Secondly, there is the outlawing of subsidy to the private sector, which is perfectly possible: the Secretary of State is not minded to take such action at present, but current legislation does not prohibit him from doing so. Thirdly, as Members must acknowledge, the Bill makes a clear attempt to forfend cherry-picking and protect clinical networks by safeguarding integrated provision. It is possible to have an argument about how well that is done, but there is certainly an explicit intention to do it—as, to be fair, there was in some of the activities of the CCP, although in that instance the constraints were somewhat weaker.

Fourthly, since the pause a clear attempt has been made to ensure that Monitor merely regulates, without performing a strategic role in promoting much except the interests of patients. It functions as a regulator and adjudicator on what it is intended to do, rather than occupying an unaccountable strategic role in promoting competition. Clearly much will depend on the mandate that it continues to be given and on its personnel: that will vary over time, and we should be watchful in that regard.

I recently had the benefit—as I think other Members have, too—of the legal advice of 38 Degrees, which is in danger of rapidly becoming the provisional wing of the “Evan Harris organisation.” I carefully read what Mr Roderick said, and I would like to share the details of his comments with the House. He says:

“contracting out services to the private sector is anything but a novel proposition in the NHS”

and

“the government has for some years rolled out the policy of Any Qualified Provider”.

Presumably, that is a reference to the previous Government, not the current one.

Mr Roderick also says:

“the application of procurement law is not by any means new to the NHS”.

Referring again to Labour party principles, he says:

“the current internal Principles and Rules for Cooperation and Competition”—

which were set up by Labour—

“seek to inject…promotion of choice and competition principles into the operation of the NHS”.

On the thorny subject of the definition of “undertaking”, which we debated ad nauseam in Committee, he has this to say:

“The NHS has already developed a structure whereby it is more likely than not that NHS Trusts are undertakings for the purposes of competition”.

Mr Roderick is often cited by Labour Members as representing independent legal advice, but that is what he says. He concludes by saying that Labour’s

“recent reforms…have done much to alter”

the basic

“landscape, even in the absence of legislative change.”

As we have both commissioning and a mixed economy—people are not saying that we ought not to have such an economy—there is a chance that there will be challenges from disappointed providers, and we must try to understand how that would go. In terms of EU law it does not matter how many providers there are out there, as even one will do, and it does not even have to be in the UK. The law can be applied in such circumstances. If these issues are to be taken up by providers who are disappointed in one context or another, it is better for that to be handled by a sector regulator such as Monitor than by the Office of Fair Trading, which would be the default situation.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I have been listening carefully to the hon. Gentleman’s contribution. He has been talking a lot about Labour party principles—but I wondered about Liberal Democrat principles, and whether he feels completely relaxed about the opening up of the NHS to privatisation.

[John Pugh]

Perhaps the hon. Lady has not understood the point that I was making. Her own Government were responsible for the opening up that she talks about and fears, and most Labour Members voted for it. I did not vote for foundation trusts, nor did many of my party colleagues. Clearly Labour Members did, however, and we will return to that.

It is a fair point to say that if we have Monitor, that does not take us out of the whole legal web, as it cannot stop other legal processes, or a disappointed provider going further. However, it dramatically lessens the impact, and dramatically reduces the probability of that happening. We can only escape this legal web effectively if we take Mr Roderick’s advice and re-examine each and every element and characteristic of the NHS structure—or, to put it simply, if we reverse Blairism.

18:15

Sadly, I have come to the conclusion that anyone who claims certainty in respect of this area of EU law is probably a fool. There are two reasons for that. First, as Mr Roderick advises me, the definition of “undertaking” in EU law is changing. Secondly, he thinks that schedule B services, which are of some concern to people who are interested in this sort of thing, are under review by the European Community.

I was genuinely impressed by the hon. Member for Leicester West (Liz Kendall) when she summed up the Labour party’s problem in this area in Committee. I circulated her words to my colleagues so that they could survey the argument as expressed in its strongest form. She said:

“I am not arguing, as Ministers have claimed the Opposition have, that the Bill extends the scope of competition law. My argument is that the Bill extends the applicability of competition law to the NHS. It is not just the clauses we are discussing today that will make that happen; so will other clauses, such as those that abolish the private patient cap on foundation trusts, and aspects of the Government’s policy, particularly requiring commissioners to consider any qualified provider for all services”—

which is not in the legislation. She continued:

“All those things will guarantee that the NHS will be considered and treated as a full market, and that the providers of NHS services will for the first time be treated as undertakings for the purposes of competition law.” ––[Official Report, Health and Social Care (Re-Committed) Public Bill Committee, 12 July 2012; c. 400.]

We simply do not know how the EU will define “undertaking”—we do not have that level of certainty—and my view is that we do not currently know much about the applicability of EU law. I am not as pessimistic as Mr Roderick, the 38 Degrees adviser, about what we can do about the situation we are in, however. He claims that the Bill cannot limit the application of competition law:

“nothing in the Bill…can have the effect of preventing the application of competition law.”

So this may all be going to happen regardless of whether we accept this Bill.

I accept that this is an extraordinarily difficult area that interests many health anoraks ad nauseam, but probably loses the general public. However, what makes it difficult is not the Bill per se, but all the changes in the NHS over previous years, on which those on the Treasury Benches and those on the Opposition Benches have usually been at one. However, my contention is that it is clearly better if Monitor takes on the role of carrying out whatever regulation or adjudication will be necessary.

I want briefly to turn to amendments 1219 and 1220 in my name. The motivation for moving them stemmed from the Committee stage, which I am happy to say was a thoroughly congenial occasion that all Members thoroughly enjoyed. Through that process we were convinced—as I have tried to convince Members today—of the benefits of a sector regulator: Monitor. However, we then reached clause 71, where we discovered the strange anomaly that mergers of foundation trusts go to the OFT, which has no experience and little inclination, might be disposed to treating hospitals purely as businesses, and which, if it gets involved, will make reconfiguration a lot more complex and difficult.

Given the appalling problems that we shall have in the acute sector over the next few months and years, I certainly would not want to see the OFT wading in and overruling decisions that are sensible rationalisations. In a sense this is slightly ludicrous. If one foundation trust is a public body and the other is also a public body, they are both essentially owned by “UK plc”. Where, then, would we refer that decision? If Marks and Spencer owned those institutions, it would merge them and there would be no issue with which the OFT need detain itself. However, if we accept that such issues should go to a regulator, why this regulator? Why the OFT? Why not instead leave it, as most people supposed would happen, to Monitor?

A variety of answers were given in Committee. One was that such a merger would have to go to the OFT because there could be a combined turnover of more than £70 million. However, then it became apparent that it was not just that revenue or budget threshold that determined whether such matters went to the OFT, because non-foundation trusts, regardless of size, would not go to the OFT. I therefore still ponder where we can go with this.

I heard the Secretary of State say that the problem is that if, as my amendments propose, we take out the reference to foundation trust mergers going to the OFT—which would be a sane and sensible thing to do—we may still fall foul of other bits of legislation. We may also risk double jeopardy. I understand that that is a real problem, which we would want to avoid. The difficulty I have is that if, as the Secretary of State says, this is a very uncertain field legally, it is probably not wholly justifiable to put formally into the Bill the application of part 3 of the Enterprise Act 2002. It is probably better to get the legal situation a bit clearer, and I am fairly confident that that is the view that their lordships will take when they examine this Bill.

[Grahame M. Morris]

I am privileged to have the opportunity to speak in this debate on an issue close to my heart. A number of Opposition Members—and perhaps Members across the whole of the House—have taken advantage of the opportunity to spend a day with the NHS to see at first hand some of the issues and problems and to discuss with staff and patients their concerns. Many Members have received e-mails and letters from constituents and from various interest groups, and the issues we are considering this evening are very important.

As my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said during his contribution, the NHS holds a very special place in people’s affections. In many respects it is viewed not unlike a religion, in so far as it is loved and cherished. Members who have had the opportunity to travel to other countries and see different health systems will no doubt be well aware of the high esteem in which our own health service is held throughout the world. It is a real exemplar—a model of a publicly funded, publicly provided health service. As an aside, I point out as a member of the Select Committee on Health that we have a very frugal Chairman, and the furthest we have travelled is to Hackney. My knowledge is therefore based on reading and on evidence submitted to the Committee.

Let us consider the problem we face with the Bill and the amendments and new clauses. I listened carefully to the Secretary of State’s statement, and the real concern among patients, the public and the Opposition is, what are the motivations behind these reforms? I worked in the health service for a dozen years or more and have taken the trouble to look into the various options in some detail. Ministers have said that there are precedents for Bills of this complexity, but I would be staggered to find that there are. It is incredibly complicated and has been subject to numerous amendments. As members of the Bill Committee who are in the Chamber this evening know, many of the arguments originally made by Government Front Benchers were turned on their heads in Committee, and some of those that were rubbished by the Opposition were taken up and rehashed as part of the Future Forum.

[Nicky Morgan (Loughborough) (Con)]

I am listening very carefully to the hon. Gentleman, as I did in Committee. Indeed, those of us who served on both Committees—the original and the re-committal—deserve a badge of honour. He talks about the Bill being complex. Does he not think that the process has been made more complex by the use of misinformation and emotive language, and by campaigners obscuring the Bill and needlessly causing patients to worry about their ability to access the health service once the Bill has been passed? The point is that free access at the point of need is not changing, and that is what most patients care most about. Does he not agree?

[Grahame M. Morris]

I am afraid I do not agree with the hon. Lady, as she might expect. The Secretary of State said that it was a question of communication, but I suspect that part of the problem with the Bill is that, far from there being additional clarity, the more that Members of Parliament, the medical profession, health care workers, members of the public and informed commentators have examined the proposals in detail, the greater the number of concerns that have arisen.

If the Secretary of State had been open and honest about the direction of travel and the motivation for these health reforms, perhaps we could have avoided some of the confusions that have arisen. There is no electoral mandate for a huge structural review and reorganisation. I suspect that there is something seriously wrong with the whole privatising agenda and philosophy, which the Secretary of State denies.

[Rosie Cooper]

Does my hon. Friend believe that misinformation and emotive language almost began and ended when the Prime Minister said that the NHS was safe in his hands? The misinformation began when he fooled the British public into thinking that the NHS was safe. This is the result.

[Grahame M. Morris]

I am grateful to my hon. Friend for raising that issue, which I will return to later. There were assurances that there would be no top-down reorganisations, but we should note the scale and complexity of this huge, top-down reorganisation. The Government alluded in Committee to the costs of administration, as did other members of the Committee. During Health questions and in Committee, I raised the question of the huge costs of administering Monitor, which have grown exponentially. We have had various estimates from the Government about the true cost, but over the lifetime of a Parliament it could be as much as £500 million, once we know the full extent of the legal challenges that Monitor will be expected to defend. That is a colossal sum.

I wanted to intervene when the Secretary of State referred to clause 60 of the original Bill and the intention to extend the duties of Monitor into the social care element of health and social care, but he would not allow me to do so. I wanted to ask whether any estimate has been made of the cost of such an extension of Monitor’s remit, which I suspect will be considerable.

[Pat Glass (North West Durham) (Lab)]

The Secretary of State mentioned 38 Degrees, which clearly has touched a raw nerve. Quite apart from the people from 38 Degrees who have contacted me, huge numbers of my constituents have contacted me to express real worries about this issue. Given the concerns of the Opposition, the press and, most importantly, the voting public, how does my hon. Friend think that we all got so out of step with the Prime Minister and the Secretary of State?

[Grahame M. Morris]

I am grateful to my hon. Friend for expressing that concern, which many people share—even among the Government, although perhaps they conceal it. Such concerns are not restricted just to 38 Degrees and Opposition politicians. Lord Tebbit of Chingford, an outspoken man who could hardly be described as a left-wing agitator, raised real concerns about what he described as these privatising reforms. He said that there is something seriously wrong, and that

“What worries me about the reforms…is the difficulty of organising fair competition between the state-owned hospitals and those in the private sector. In my time I have seen many efforts to create competition between state-owned airlines, car factories and steel makers. They all came unstuck. The unfairnesses were not all one way and they spring from the fact that state-owned and financed businesses and private sector ones are different animals”.

I have rarely found myself in agreement with Lord Tebbit, but on this occasion his analysis is extraordinarily insightful. His comments underline many of the basic contradictions in the Bill and in the subsequent amendments, which number more than 1,000.

[Fiona O'Donnell]

Apart, perhaps, from his warm comments about Lord Tebbit, my hon. Friend is, as ever, making a well-informed and considered contribution. We face a lack of information, inaccuracy and changing numbers. Does he therefore agree that what we also need, given the concerns raised by many hon. Members about the potential for an increased health inequality gap in this country, is an equality assessment of the Bill?

18:30

[Grahame M. Morris]

I am grateful for my hon. Friend’s contribution, as that is an excellent point. If hon. Members will bear with me, I shall discuss new clause 6 and what I believe the implications of the Government’s proposal would be for the Bill and for health inequalities. I was intrigued by the Secretary of State’s assurances in his opening statement about the responsibilities being conferred on him in the Bill that did not apply when Labour was in power. I believe he said that those powers were devolved to primary care trusts, but if PCTs are disappearing or clustering and strategic health authorities are disappearing over time or being clustered, surely it is right that the Secretary of State, as an accountable politician, should have these powers clearly defined in the Bill. I did not mean to digress, Mr Deputy Speaker. Those remarks related to clause 1 and I shall confine myself to the provisions before us.

As I have said, many concerns have been raised about the approach being taken to this cherished institution, not least those set out by my right hon. Friend the Member for Holborn and St Pancras about patient perception.

[Jim Shannon (Strangford) (DUP)]

Is the hon. Gentleman aware of the survey carried out among the 50,000 members of the Chartered Society of Physiotherapy? It indicated that 81% do not agree with the proposals for NHS reform—that touches on the issue that he just raised. It also indicated that 89%—almost nine out of 10 of those who work in the health service—believe that patient care will suffer and that 84% do not believe that the Government have considered these changes. Does he believe that the level of concern among those workers in the health service, and among the general public, means that whenever the vote takes place tonight hon. Members should be very careful and should oppose the Bill?

[Grahame M. Morris]

I am grateful for that information. I know that other hon. Members have spent a day with the health service and I am sure that Ministers take soundings, but I can honestly say that what the hon. Gentleman describes is the feedback I have received from talking to health professionals, patients and so on. I recognise that the Secretary of State has said on numerous occasions that a substantial body of GPs support this approach. When I tuned in to this morning’s “BBC Breakfast” I saw Professor Chris Ham of the King’s Fund being interviewed. He is an eminent and respected commentator on health service issues who has given evidence to the Public Bill Committee and the Health Committee. He gave his view that it was a small cohort of GPs who were signed up and committed to these reforms. I agree with his assessment.

These provisions deal with the role of Monitor, the relevant implications and changes to the failure regime. A “Panorama” documentary on the BBC featured Sir Gerry Robinson, who has some standing in the business community and for previous journalistic investigations into the NHS. The conclusion of his report was that he thought that these reforms could mean

“the end of the NHS.”

That is his conclusion. Even after meeting the Secretary of State he remained unconvinced of the value of the reforms.

The Secretary of State has failed to persuade the public and he has failed to persuade NHS staff of his approach. That has been illustrated by various surveys, through the British Medical Association, by personal contacts and in other ways. Even elements of the business community recognise the level of public opposition and concern. It seems that the principal backers are overseas US-style private health groups, whose interest is not philanthropic. They see the prospect of substantial profits and unprecedented access to billions of pounds soon to be available from NHS coffers. We hear Ministers and Government Members saying that the NHS was open to private sector providers under the previous Administration, and a very small figure—5% or so—was cited in the Public Bill Committee proceedings.

[Frank Dobson]

My hon. Friend may like to know that even in the final year of the Labour Government just 2.1% of operations were carried out by the private sector.

[Grahame M. Morris]

I am grateful that that information has been put on the record.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend is right to talk about the potential role for overseas health companies. He might have seen the article in The Guardian yesterday stating:

“A German company has been in talks to take over NHS hospitals, the first tangible evidence that foreign multinationals will be able to run state-owned acute services”.

That has become apparent only through freedom of information requests. Does my hon. Friend think that this is the slippery slope that this Bill is going to usher in?

[Grahame M. Morris]

That point was raised during the Secretary of State’s earlier remarks. [Interruption.] Well, it came in response to a freedom of information request. I thought that his response was illuminating, as he assured us that that would not involve the transfer of NHS real estate, although he did not rule out the possibility that private sector providers would take over the running of these things. The report that I saw said that they would take responsibility for the management and staff, and he gave no rebuttal of that report.

[Mr Simon Burns]

rose—

[Grahame M. Morris]

I will give the Minister an opportunity to do that, if he so wishes.

[Mr Burns]

There is an air of déjà vu to this debate now, although I am delighted to be taking part in a debate with the hon. Gentleman yet again. May I point out that the only example of what he is saying relates to Hinchingbrooke hospital? What happened there was started by the previous Labour Government—his Government.

[Grahame M. Morris]

I do not wish to labour the point, but the report in The Guardian said that freedom of information requests to the Department of Health indicated that discussions were taking place between officials in respect of the transfer of between 10 and 20 NHS units—[Interruption.] I am simply reporting what I have read in the paper.

[Mr Burns]

May I say to the hon. Gentleman that that report is unadulterated claptrap? The trouble is that it was a misunderstanding of the contents of the e-mails. [Laughter.] The right hon. Member for Holborn and St Pancras (Frank Dobson) may think that that is funny, but the e-mails were not about these bodies taking over NHS hospitals; the e-mails were about discussing what their views are on hospitals that are struggling. The e-mails were part of an information-gathering mechanism to find out how policy in the NHS could be improved to deal, within the NHS, with hospitals that might be struggling as part of the foundation trust pipeline.

[Grahame M. Morris]

I do not find this at all funny. I would find it really worrying if this report is an indication of what is in store. It is rather ironic that the Secretary of State quoted from the Labour party manifesto. Perhaps it might be instructive if I were to quote from the Conservative party manifesto. It said that the Conservatives would

“defend the NHS from Labour’s cuts and reorganisations”.

If this Bill is not the biggest reorganisation that we have ever seen—[Interruption.] Well, it is, even though the Conservatives said that they would not proceed with any such huge reorganisation.

[Mr Kevan Jones (North Durham) (Lab)]

Would not the Secretary of State be able to clear that up tonight by giving a categorical assurance that no hospital will be transferred to or run by a foreign entity?

[Grahame M. Morris]

I am happy to give way to the Minister, if he wishes to give that assurance from the Dispatch Box. It would reassure staff and members of the public. Perhaps we can read something into the Minister’s reluctance to give such an assurance.

The Government, despite the spin, are delivering one of the most radical reorganisations ever and in the view of many Opposition Members it will undermine the basic principles of the NHS. When the Health Secretary was shadow spokesman for the then Opposition, at no point did he explain his plan to apply 1980s-style privatisation mechanisms to the NHS. I am an avid follower of health policy and the idea of creating an economic regulator—as we have discovered through a series of parliamentary questions, the costs of Monitor could be £500 million in a single Parliament—is again ironic when we hear the Government talk about waste and bureaucracy.

As for exposing the NHS to competition law, I accept the point made by the hon. Member for Southport (John Pugh), which was also made by my own Front Benchers, that it is not the provisions on the face of the Bill but the changes to the architecture of the NHS that will expose the NHS to European competition law—the same law, as we have heard, as applies to the utility companies. Health would be considered a commodity and £60 billion of the NHS budget would be handed over to private bodies, by which I mean those bodies that were the GP commissioning consortia, now renamed clinical commissioning groups. Despite the assurances about openness, transparency and accountability, those would be private-sector companies and my understanding is that they would not be open to FOI requests. That must be of huge concern to people who champion civil liberties, freedom and transparency. Over the past six years or so, we had no indication from the Secretary of State that he was planning such a radical change.

On the subject of the new failure regime, as set out in the amendments, having sat through the Public Bill Committee on the initial Bill as well as that on the re-committed Bill and having listened intently to the arguments, I cannot decide even now whether this is a U-turn or a side-step. I have read this huge document—the weighty tome that makes up the Bill, with all its various chapters and parts—as well as the impact study and the whole justification behind the Ministers’ arguments was that the NHS needed a market and a failure regime to boost productivity. Has that whole idea been left by the wayside?

[Dr Poulter]

Does the hon. Gentleman accept, however, that the previous Government failed to put in place any adequate failure regime to deal with situations such as that which occurred at Stafford hospital and that the Bill is a step towards providing a proper overview of what to do when trusts fail and let down patients?

[Grahame M. Morris]

I am not suggesting in any way, shape or form that every NHS organisation—be it an NHS hospital trust or a community-based organisation—is incapable of improvement. My philosophy, as someone with a bit of a scientific background, has always been that we should assemble an evidence base, pilot a proposal in one area, establish best practice, see where the faults lie, tweak it if necessary and then, if it works, roll it out. This leap-in-the dark approach is flawed and will end in tears. The service is hugely important and touches everybody’s life in this country at one time or another. The whole concept of the Bill is flawed and the way it has been prosecuted is compounding the problem.

18:45

As for a number of the new clauses and the changes to the failure regime that we are dealing with, in the recommitted Public Bill Committee we tried on numerous occasions to tease out from those on the Government Front Bench precisely what they had in mind. I was shocked when I saw that there were 1,000 amendments. Admittedly, the Minister said that 715 are so-called technical amendments—

[Mr Simon Burns]

Changing the name.

[Grahame M. Morris]

Absolutely. At this late stage in the process, however, these are huge and significant changes.

[Nicky Morgan]

Just to help the hon. Gentleman, a number of the amendments relate to the continuity of services, which his party and those on his Front Bench asked to have considered by this House on Report rather than being left to the Lords. I am sure that the Ministers can help, but if that subject was not included, I suspect that the number of amendments would be significantly smaller. It is right that they should be considered in this House at this time—does he not agree?

[Grahame M. Morris]

That is a fair and reasonable point and I concede that.

[Diana Johnson]

Does my hon. Friend agree that if this Bill had been properly drafted in the first place and there had been proper pre-legislative scrutiny, we would not have to have this cartload of amendments brought in at the last moment?

[Grahame M. Morris]

Again, that is a really good point. An incredible number of complex and detailed changes have taken place during the passage of the Bill, including the listening exercise and the consideration of a series of complex amendments, and even they did not address every issue that had been raised. Essentially, I am trying to say in a clumsy kind of way that the Bill is poorly thought out. I think it is a bad Bill, and if it is implemented it will cause real problems for the service and the people who use it.

[Nic Dakin (Scunthorpe) (Lab)]

I do not think my hon. Friend is making a clumsy speech at all; he is making a lot of very good points. His point about the Bill being badly drafted and set out is why I have been inundated over the past few days with messages from a range of professionals and service users who are very concerned about where things are going. I applaud my hon. Friend’s approach.

[Grahame M. Morris]

I am grateful to my hon. Friend for his point and for his kind words. My contention is that the problem with all these reforms is that they tend to unravel once there is an opportunity for not just Members of Parliament but health care professionals and the broader public properly to scrutinise them. Once people have the chance to consider the proposals in detail, there is an outcry such as that described by my hon. Friend.

I have tried to understand the thinking behind the Government’s changes and amendments. As I mentioned earlier, many of the changes fly in the face of the logic of the arguments originally made in Committee and when the Bill was first published. The obvious logical conundrum, if that is the term, can be seen in the fact that the original impact assessments, which were very comprehensive, said that it was essential to create a functioning market to gain the benefit of the reforms. A whole section of the impact study explained why “market exit” was fundamental to reforming the NHS. I heard what the Minister said earlier and I have read the Government’s amendments, but I am not quite convinced—perhaps I am a bit of a cynic—that this is a real concession. If we follow the Government’s logic, that makes the Bill as a package at best inconsistent and at worst it removes the possible benefits that Government Members may wish to promote in terms of the costs of any market system. Instead, we are subject to a strange system. The Secretary of State initially mentioned creating a level playing field to allow access for private health care firms as well as existing NHS and public providers. There are therefore some basic contradictions in the rationale behind some of the reforms, if there was any merit in the arguments initially.

[Tom Blenkinsop]

Is my hon. Friend concerned, as I am, that 2% of PCT budgets—approximately £2 billion—is being used for this reorganisation? There is a direct effect on my community and the Redcar and Cleveland PCT, where almost £4 million has been taken from health inequality budgets, which could have been used on the front line.

[Grahame M. Morris]

I am making rather slow progress, but I did want to get on to health inequalities. My hon. Friend makes an excellent and important point. We touched on it briefly in the Bill Committee and it relates to new clause 6. I was concerned about the reports that in the allocations to PCTs and SHAs, the element set aside for addressing health inequalities had been reduced. That should concern us all, especially those who represent areas that suffer high levels of health inequality and deprivation.

It is a bit of an achievement that the Government could take the NHS at its most successful point and turn it around. Government Members have highlighted particular failings, but the NHS had a record number of doctors and nurses and a hospital building programme. There had been a transformation from waiting times of 18 months for routine operations such as knee and hip replacements or removal of cataracts to only a few weeks. The previous Government should be given some credit for that. The improvement was confirmed in patient satisfaction surveys and it is a great shame that the Government have decided not to commission the Department of Health to conduct such studies in the future. I suspect their motives in that regard.

[Dr Poulter]

Will the hon. Gentleman give way?

[Grahame M. Morris]

I give way to my hon. Friend from the Committee.

[Dr Poulter]

That is a good point. Under the previous Government cataract and hip operations were done more quickly, but that was because the Labour Government commissioned private providers. The unfortunate thing was that the providers cherry-picked services and did not provide the integrated health care that this Bill will provide.

[Grahame M. Morris]

We had this exchange many times in the Committee on a variety of clauses. We need to give some credit to the previous Government. I am old enough to remember when people routinely waited a year, 18 months or longer for life-changing operations such as knee and hip replacements. It is a real quality-of-life issue if someone has cataracts and has to wait a long time for an operation. I accept that Labour used the private sector. I am a socialist and make no apology for that, and I want the provision to be public sector. I was not a Member of Parliament and did not vote for the commissioning of private providers, but I acknowledge that the private sector played a role in bringing extra capacity and some innovation to the service.

[Barbara Keeley]

My hon. Friend is making a wonderful speech. I wanted to make this point when my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) was speaking about the number of operations and the improvements during Labour’s term of office.

In the 1997 general election when I was campaigning in Wythenshawe and Sale, East constituency, I met someone who had been told that he had to wait two years for vital surgery and was desperately worried that he would die while he was waiting. I met someone in my constituency in last year’s general election campaign who received a diagnostic test on Monday, found he had cancer on Tuesday, went into hospital on Wednesday and was operated on on Thursday and his life was saved. From two years to four days—I thought that was the best testament to the improvement that Labour had brought about in the NHS.

[Grahame M. Morris]

I am grateful for that example. It illustrates the importance of that improvement, the value that people place on it and how critical it is to people’s health and well-being.

I know that we shall come later to the clauses that lift the cap on private patient work, which the Minister mentioned in his opening remarks. If the cap on private patient work in NHS foundation trusts is lifted and those trusts are under financial pressure—those of us who are in touch with our hospital trusts know that they are under financial pressure, with the reductions in the tariff and other issues—the level of private sector involvement in NHS trusts will increase.

[Rosie Cooper]

The hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is also a member of the Select Committee, pointed out that Labour reduced waiting lists and private providers were involved. Does my hon. Friend agree that the general public now face longer waiting lists and more private providers?

[Grahame M. Morris]

This is the danger. Labour Members have attempted to highlight it, and people are increasingly aware of it.

[Frank Dobson]

Does my hon. Friend accept that if we want to look at how best to increase the number of people who are treated, the best thing to do is go to the people who do the treatment? When I was Health Secretary, the NHS was doing 160,000 cataract operations a year. Following discussions with the experts, some changes were made—no structural changes—and in the last year for which figures are available the NHS did 346,000 cataract operations a year. The private sector’s contribution averaged 6,000 a year.

[Grahame M. Morris]

I am grateful to my right hon. Friend for putting those important statistics on the record. Government Members often raised these issues in the Bill Committee so it is helpful to have that clarified with such precision.

I want to deal in more detail with health inequalities, if that is in order, Mr Deputy Speaker. While serving on the Bill Committee and as a member of the Health Select Committee, I have always tried to champion the cause of reducing health inequalities. In the Bill Committee, Opposition Members pushed for greater duties to reduce health inequalities to be placed on the new bodies being created by the Bill.

I am conscious that there has been some movement in this direction. New clause 6 is relevant to the special administration of services and makes references to health inequalities. I would be grateful if the Minister gave some clarification in respect of the point that I wish to make. I am delighted that the Government have recognised that a market system in health care will only worsen health inequalities. My rationale in making that statement is that at least new clause 6 says that services must be kept open where closure would adversely impact on or increase health inequalities. Opposition Members are not convinced that the safeguards are strong enough, that the safeguards could not be overturned or that inherent health inequalities that areas such as mine suffer from so terribly, largely reflecting socio-economic patterns in society, would not be exacerbated.

[Jeremy Lefroy (Stafford) (Con)]

I have been listening carefully to the hon. Gentleman. Will he accept and welcome the fact that clause 3 imposes on the Secretary of State a duty to reduce inequalities? Is that duty not a welcome innovation in legislation that he expects the Secretary of State to apply with rigour?

18:59

[Grahame M. Morris]

That is a good point. Like the curate’s egg, the Bill is good in parts—and bad in parts. I am prepared to acknowledge the commitment on health inequalities but, as I have mentioned, there are contradictions in the Bill, and that is what I seek to highlight. My concern is that the new structures proposed in the Bill move us away from a co-ordinated health service and towards a competition-based health service. Failure has been touted by Ministers as a driver of improvement, but following the latest U-turn, that commitment seems to have been dropped. I would welcome Ministers’ views on that.

Our concern is that the health service will be left to the worst elements of privatisation, without the supposed benefits of market competition. Members have referred to the British Medical Association and its calls for a co-operative and co-ordinated environment, which an open market would make impossible. When Dr Clare Gerada, the chair of the Royal College of General Practitioners, gave evidence to the Bill Committee, she raised a number of concerns about the clauses that we are discussing—concerns

“about the duplication of care and fragmentation…the under-provision of care once competition starts kicking in, the pace and extent of change, and the capability capacity and competence of GPs”

to deal with the extent of health needs. Most importantly, she said that

“the Bill risks widening health inequalities and could lead to worse patient care”.––[Official Report, Health and Social Care Public Bill Committee, 8 February 2011; c. 43, Q94.]

[Julian Sturdy (York Outer) (Con)]

The hon. Gentleman talks about health inequalities, but does he accept that under the current system primary care trusts have brought about a number of health inequalities? Certainly in my area of north Yorkshire, the PCT has brought about a number of health inequalities, and I think that that is the case in other areas, too. The system is already delivering that; that is why we need the change.

[Grahame M. Morris]

The picture is incredibly variable. We should consider many of the policies that the Government are pursuing, not least that on public health observatories, which collect the evidence on which many public health interventions are based. The sustained cuts to their budgets—there is a cut of 30% this year, and 30% next year—are exacerbating the situation. Some PCTs are performing well in this regard, and some are not performing as well. If there are measures that can strengthen our performance, they ought to be welcomed.

We have in the past mentioned some of the public health issues. As far back as 1977, the Department of Health and Social Security’s chief scientific adviser, Sir Douglas Black, commissioned a report on the extent of health inequalities in the UK. The Black report, published in 1980, brought about a sea change in how Governments would respond to health inequalities and reduce their worst effects, particularly for the lower social classes. It is generally acknowledged in more recent reports by Professor Sir Michael Marmot that the NHS can only do so much to address the situation. There are general issues that must be addressed through a whole plethora of Government policies—child benefit, improvements in maternity allowances, more pre-school education, an expansion of child care, and better housing. I mention that in relation to the amendments that we are discussing to highlight the stark danger of a reversal in relation to health inequalities, which are not only influenced by decisions of the Health Secretary, but greatly influenced by decisions taken across Government.

I shall draw my remarks to a conclusion. I am sure that Government Members will be relieved to hear that. [Interruption.] Well, I could go on for longer if they want; I have another six pages. I draw the House’s attention to the real concerns that the general public, the medical profession, staff who work in the service and patients have about particular details—about the new and expanded role of Monitor, and about the implications for the new NHS. It will not necessarily be Monitor that decides the future of failing services; in the end, that will be decided in the courts. Finally, in parts 3 and 4, we are dealing with some of the most contentious issues in the Bill, and I urge Members to consider the issues very carefully and to think about what is at stake, before deciding how to vote on the amendments.

[Mark Simmonds]

I draw the House’s attention to the Register of Members’ Financial Interests.

I congratulate the hon. Member for Easington (Grahame M. Morris) on a thoughtful, balanced and considered contribution, albeit somewhat lengthy. Some of the key points that he made are worthy of comment. He is absolutely right to highlight the importance of the issue of health inequalities, and it is absolutely right to make sure that the House understands that the Secretary of State and his Ministers are absolutely determined to narrow those inequalities; that is why the Secretary of State has ensured that that is in the Bill.

The hon. Member for Easington is also right to point out that health inequalities are determined not just by health policy. A whole range of factors influence health inequalities, and the best synthesis and summary that I have seen—if he has not read it, he should—is in a report by Professor Marmot.

[Grahame M. Morris]

indicated assent.

[Mark Simmonds]

The hon. Gentleman has read it, which is very good; I see him nodding his head. He also asked a key question about the Government’s motivation for bringing forward the Bill.

[Grahame M. Morris]

rose—

[Mark Simmonds]

I shall finish this point, and then I will happily give way to the hon. Gentleman, because he was extremely generous in giving way. Let me summarise the Government’s motivation in five areas. The first is to improve patient care; the second is to drive up the quality of services; the third is to improve patient outcomes; the fourth is to ensure better value for taxpayers’ money; and the fifth, and perhaps most important, is to ensure that our much-loved national health service has a successful future as a service that is free at the point of need, and a service that is based on requirement, not ability to pay. There should be continued equity of access and, even more importantly, excellence for all.

With the honourable exception of the hon. Gentleman’s contribution, all the contributions from Labour Members, including those on the Front Bench, have completely misrepresented the Bill. There is a degree of complacency creeping into the Labour party. The view that it puts forward—that there is nothing wrong with the national health service, and that it is a perfect, utopian service—is clearly not correct. Its view that no reform or innovation is required is not correct. Its view that no productivity improvements can be made is clearly not correct. The view that there is no problem with patient outcomes across a whole range of clinical indicators compared with the outcomes in our developed-world comparators is clearly not correct. The Labour party’s view that there is no need to reduce the cost of administration and get more resources to front-line patient care is clearly not correct; nor is it correct that there is no need for greater clinical involvement in commissioning and for greater patient choice. The Labour party’s position is purely political. It is not clinical and it does not have the best interests of patients at heart. I urge the Secretary of State and his ministerial team to reject the amendments tabled by Labour.

[Valerie Vaz (Walsall South) (Lab)]

Does the hon. Gentleman recall these words—“NHS” and “no top-down reorganisation”, said by one David Cameron, leader of the Conservative party?

[Mark Simmonds]

I do remember that. The changes outlined in both the original Bill and the amendments that have been tabled as a result of the considered and very professional work of Professor Field and his team demonstrate the desire of the coalition Government to make sure that the national health service survives for future generations as a taxpayer-funded service free at the point of need. All the changes set out in the Bill are determined by that.

The hon. Member for Leicester West (Liz Kendall), who spoke for Labour in the programme motion debate, should be wary of praying in aid the BMA. Not only did it object back in the 1940s to the setting up of the national health service, but just prior to the last election, it said that the Labour party was the enemy of the national health service. We need to engage with all the clinical groups within the national health service to ensure that we deliver the best possible patient outcomes for the amount of resources that we can put in.

I am slightly surprised at the repetitive nature of the debate. I have been told by my hon. Friends who sat on the Bill Committee that many of the points that were made in Committee have been made again today. The Government amendments that we are discussing are a direct result of the forum chaired by Professor Steve Field. I thought it unedifying of the right hon. Member for Holborn and St Pancras (Frank Dobson) to try to undermine Professor Field, who does excellent work in a very socio-economically deprived part of Birmingham. If the right hon. Gentleman has not visited Professor Field and seen the excellent work that he does, I suggest he does so.

[Several hon. Members]

rose—

[Mark Simmonds]

I give way first to the hon. Member for Worsley and Eccles South (Barbara Keeley).

[Barbara Keeley]

The speech of my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) is one of the best I have heard in the Chamber, as I think Opposition Members would agree. People outside the Chamber are saying that too.

On repetitiveness in the points that are being made, Report stage allows Members who did not serve on the Committee to say the things that they want to say. It is our chance right across the House to comment on the Bill, so that is not a valid criticism of what is going on in the debate.

[Mark Simmonds]

I hope the hon. Member for Easington has a better intervention to make.

[Grahame M. Morris]

Can we agree on one thing—that opinions should be evidence-based? I was amazed that when Professor Steve Field was asked whether the Future Forum had taken independent legal advice on the contentious issue of whether European competition law would apply as a result of the reforms—the matter was raised in the Bill Committee or the Select Committee—he said no, he had not taken independent legal advice. That was a major omission.

19:15

[Mark Simmonds]

I will not get into the nuances and the legal battles that other hon. Members have raised. Professor Steve Field and his team did an excellent job thoroughly and comprehensively in a relatively short time. To be fair to the Secretary of State and his team, they looked carefully at the suggested changes and have incorporated some of them in the clauses before us. I agree with many of them, and I highlighted some of these points on Second Reading—a greater emphasis on integration, wider engagement with a broader range of clinical commissioning teams, and greater protection for services which, in financial or quality terms, may not be providing the service that patients expect. All those have been changed in the Bill.

Almost all the Members on the Government Benches would not support the Bill if it was about privatisation of the national health service. It is not. It tries to ensure that the national health service has a future, and that the organisation that is in the best position to provide a particular service in a particular geographical locality has the ability to do so. That is not just the private sector; it is the voluntary sector, the charitable sector, the not-for-profit sector and the social enterprise sector. The mantra coming from the Opposition seems to dictate that those organisations should not be allowed to provide health care—that unless health care is provided by the state, it should not be allowed. That clearly is wrong. What is important is not the delivery mechanism, but patient outcomes and the quality of service provided.

I shall deal specifically with new clause 2 and amendments 100 to 104, 106 and the subsequent related amendments. They ensure that equity of access continues, irrespective of whether the provider is in a good financial state or not. My right hon. Friend the Member for Charnwood (Mr Dorrell) put his finger on exactly the right point, as he so often does. What matters is continuity of service, but not necessarily from the same provider.

The national health service has always changed in that way. It has always reconfigured services to make sure that the patient receives care of the best possible quality. New clause 2 puts in place an essential mechanism to ensure continued access for patients to NHS services. It is right that the Government are putting in place safeguards to protect patients and taxpayers, but the clause does more than that. It also enables commissioners to replace services with higher quality and better value options. Among the major failures of the last decade in which Labour was in charge of the national health service was not only the decline in productivity, but the fact that there was insufficient decommissioning of poor services and insufficient replacement and improvement of poor-quality service provision. Nowhere is that more marked than in Tunbridge Wells and Stafford.

The primary purpose is to enable Monitor to support commissioners to access services and place conditions on a licence holder. Some of those conditions are set out in the Bill. All hon. Members know that there is considerable variation in performance of organisations within the national health service. Providers who are providing excellent services should be allowed to thrive, innovate and drive the quality of clinical care. Those that are under-performing will require challenging, and support where necessary. Ultimately, if they cannot respond to that support and that challenge, they should be replaced by an alternative provider. That should apply both to the independent sector and to state sector provision. It is not acceptable that, purely because a service is provided by the state, it should be allowed to continue as a substandard service.

Some of the key changes in the new clauses and amendments allow that to happen. They make sure that funding is much more transparent. The existing framework has allowed hidden bail-outs to take place, which all too often have hidden poor management, poor service provision, and the need for clinically appropriate and evidence-driven reorganisation. All too often that has not happened, to the detriment of patient care.

I was pleased to see that the Secretary of State had allowed a safety valve in this part of the Bill, which would enable tariffs to be topped up, particularly for the provision of services in rural areas, such as my constituency in Lincolnshire. This must not be seen as an opportunity for the Department of Health to support and subsidise inefficient management and service provision. All too often there are inefficient cost bases and money could be transferred instead to front-line patient care.

I would be grateful if the Minister, when winding up, confirmed some specific points relating to new clause 2 and the subsequent amendments. Will he confirm that the new system will ensure that innovation is not inhibited—that providers and clinicians will have to configure services not only to satisfy patients, but to improve the quality and productivity of services, which, as we all know, have been very poor in the past decade or so? Will he confirm that the structure set out in the new clauses will enable Monitor to intervene early to ensure that the service provided is safe and provides good-quality, patient-centric services?

Will the Minister also confirm that the proposals build on the system set out in the Health Act 2009, which is in line with the Secretary of State’s consistent assertion that the Bill is about evolution, not revolution? Ministers must not allow the importance of integrated services, vital though they are, to be an excuse to maintain poor-quality providers. In the interests of patients, underperforming incumbents must be challenged and continued innovation must be facilitated and incentivised.

If the Minister has time when winding up, I would like him to address the point that I made to my right hon. Friend the Member for Charnwood, which is that the new clauses seem to ensure that Monitor will maintain minimum-based standards, particularly as they relate to acute foundation hospital trusts. We need commissioners, the Care Quality Commission and Monitor to work together to ensure that there is continuing improvement in patient care and continuing determination and drive to make sure that services are better the next year than they were the previous year. It is unclear from the amendments who will be responsible for co-ordinating that effort to drive up standards continually.

I have two final questions. What will happen if Monitor has to step in to provide advice, shore up a service or provide an alternative service provider, but the commissioners cannot agree on who should be the subsequent service provider? Who will resolve disputes between two commissioning consortia? Will it be the NHS commissioning board, Monitor or the Department of Health? Where a provider delivers a service to more than one commissioner, and one of the commissioning groups has access to an alternative provider already in existence but not another, who decides who will provide the service that has failed?

I will draw my remarks to a close. I am, as I believe are most Government Members, an avid supporter of the national health service. I defer to no other group more than I do to those who work tirelessly in the NHS to provide the excellent care that, more often than not, is delivered, and not only in the state service but across the range of NHS providers. However, if we are to continue the NHS, free at the point of delivery and based on need, not ability to pay, it must reform and change. We cannot allow it to stand still. I believe that these clauses and amendments provide an essential framework to ensure continuity of access to service, value for money for taxpayers and better quality patient care.

[Rosie Cooper]

Members of the public listening to Government Members this afternoon might wonder whether we were having this debate in a parallel universe, because they have heard the Prime Minister promise that there would be no top-down reorganisation of the NHS, and what did we get? We got the biggest reorganisation in the history of the NHS. The Prime Minister said only recently that everyone was on board and behind the Bill, and yet we find that clinicians, professionals and the public are far from being on board. The Government talk about the protection of services, but the public will have read only yesterday that the Government are meeting McKinsey about the possible transfer, albeit a slow transfer, of up to 20 hospitals.

[Mr Simon Burns]

indicated dissent.

[Rosie Cooper]

The Minister keeps saying no, but the reality is that, as I told the Secretary of State, you may very well be fooling yourselves, but you are not fooling the public, and the Bill was wrong. That was followed by a pause, and when you admitted that you had got various bits of it wrong, you then said—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Lady must desist from using the word “you”, as it refers to the Chair.

[Rosie Cooper]

I apologise, Mr Deputy Speaker. Each time I said “you”, I meant the Secretary of State.

The Secretary of State simply threw the Bill at the British public after the Prime Minister had promised that this would not happen. I have been very clear in the speeches I have made so far on the Bill that the only people the Secretary of State is fooling are those in the Tory party. He has made changes to the Bill, but we are now beginning the great mix-up and going back to exactly where we were.

The hon. Member for Boston and Skegness (Mark Simmonds) said that Labour did not want progress and good value, and that the coalition programme was all about ensuring that the NHS survived and getting a good return for the taxpayer. Let me tell him that I am absolutely passionate about the NHS. I expect value for money, cutting-edge treatment, efficiency and the best possible care for everyone in this country. The lives of every taxpayer and every family depend on the care they get from the NHS. Second rate will not do for me at all.

However, I do not believe that throwing a grenade into the NHS systems will achieve that. Even breaking big promises will not achieve that, because that will break the trust. I suggest to the Conservative party that the Great British public gave tentative support during the general election and will now withdraw that support rapidly as the Bill progresses. The Conservatives expect the public to believe that the party that promised no top-down reorganisation and then broke that promise can be trusted when it says that there will be no privatisation of the NHS, yet evidence comes to light via freedom of information requests that that is not the case.

What are patients out there actually experiencing? Again, Conservative Members can fool themselves. When they went to accident and emergency units they saw that the four-hour waiting time was being exceeded, so they abolished it. It is already taking longer to treat fewer people, which does not strike me as particularly efficient or good value for money. It took 13 years of a Labour Government to rebuild the NHS after what the previous Conservative Government did to it. Labour reduced waiting lists from two years to 18 weeks. It has taken the coalition Government less than a year to wreck it all again. Broken promises are leading us to an NHS that is broken again.

Let us look at what is currently happening in the NHS. There are two different processes at work: financial efficiency gains and structural reform. The idea was to ask the system to make efficiency gains of 4% each year for four years. On top of that there is the reorganisation, which a Conservative Member has likened to tossing a grenade into the system. We have had muddle, pause, fog and are now effectively back to where we were some time ago.

The reforms do not address the financial challenges, especially the Nicholson challenge. This is costly—making people redundant, throwing organisations into disarray and telling people, “You don’t have a future, you might have a future,” “Let’s have a cluster, let’s not have a cluster,” “Where are you going to work?”, “It’s all going to disappear by 2013,” “There are no PCTs—well, they’re there really, but clusters will do the work,” “No, we don’t have strategic health authorities—well, okay, we’ll keep four of them.” The Marx brothers would be proud of the stops, turns, U-turns, pauses and muddle that there have been. But the bottom line is that the great British public have to watch those antics and are worried about their health service.

19:30

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does my hon. Friend have any idea of how much the reorganisation is going to cost? The hon. Member for Boston and Skegness (Mark Simmonds) made a very reasonable speech, but I noticed that he was confessing at the end that he did not know how some of the central parts would work, and he posed those questions. Does my hon. Friend have any idea of how it is all going to work at this stage, and what it will cost? If not, does she think it conceivable that enough members of the public can know, and have any confidence in the changes?

[Rosie Cooper]

I can categorically say that we have asked the questions over and again and we do not get any answers.

[Mr Burns]

The impact assessment.

[Rosie Cooper]

How much? I will give way if the Minister tells me exactly how much it is all going to cost. I shall happily sit down; there you go. [Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is not a conversation but a debate. I do not think that the Minister indicated that he wished to intervene.

[Rosie Cooper]

Thank you, Mr Deputy Speaker. You will forgive me; my lip reading was obviously slightly wrong. He looked as if he was trying to tell me something, and I hoped that it might be the answer.

In all such situations I always say, “Follow the money.” What is actually going to happen? If this is costing a lot of money—there is a lot of muddle—it has to be really clear that the driver of the reforms cannot be, as the Secretary of State has previously said, the idea that the NHS is unaffordable; we seem to be able to afford a lot of other things. If the reason is not financial efficiency, it has to be purely ideological.

I understand that 85% of respondents to the NHS Confederation survey were very clear: the hardest job that they could have is to deliver both NHS changes and savings simultaneously. That makes it harder for them to deliver objectives for improving efficiency and quality—but that is what I am told that Government Members are all about; the Bill is supposed to improve efficiency and quality.

Who is going to deliver the health care? The Royal College of Nursing suggests that 27,000 front-line jobs, equivalent to nine Alder Hey children’s hospitals, will disappear. I asked the NHS Confederation whether we would see hospital closures, and it is clear that we will; we are seeing that in various reports. The Bill is three times longer than the Act that created the NHS, and it leaves more questions than answers. I say to the Government that if they believe that the great British public will be fooled by any of this, they are sadly wrong.

I do not normally make personal statements about anybody, but Roy Lilley, a former NHS professional, writes a blog in which he refers to the Secretary of State as “LaLa”; I am sure the Secretary of State has seen it. I have been hearing “La la” all afternoon. This is just nonsense. Just because the Secretary of State or the Tory party says that the world is square, that does not mean that it is. They are insulting the public if they think that they will go along with them.

Monitor makes decisions about the future sustainability of individual services and the patterns of local health services under the failure regime. It is unclear how those decisions would be made, and how and to whom Monitor is accountable. Technically it is an independent body and it should be responsible to Parliament and the Secretary of State, but perhaps the Secretary of State will clarify that.

As the economic regulator, Monitor is given a whole series of powers that ultimately focus on enforcing competition in the NHS. There are still fundamental gaps in how that organisation will be held to account. There is a lack of clarity about how health services can engage with and influence the work of Monitor. Having been chair of a foundation trust hospital, albeit only for a month—because I stood for Parliament and had to resign—I can say that Monitor was a law unto itself. And before the Health Committee, Monitor likened the NHS to utility companies, which does not give me any confidence whatever.

I want to talk about Monitor not consulting commissioners on changes to enhance tariff. Private providers can apply to Monitor for an enhanced tariff to preserve the services that they, as private businesses, are providing to the NHS.

[Tom Blenkinsop]

One essential point that we have to raise about Monitor is that it is a replica of an economic regulator of the utilities. The four to six companies in the energy sector have just raised gas prices by 18% and electricity by 11%. How does my hon. Friend think Monitor will be able to cope with private companies and health?

[Rosie Cooper]

I would suggest that it is a failing model, and not one that we should be looking at.

I should like to look at the idea of risk pooling, in which Monitor will have a role. Monitor will be required to top-slice the budgets of foundation trust hospitals to obtain that pool of money. The problem is that if the trust is already in financial difficulty, the fact that Monitor needs to top-slice the FT hospital’s budget could tip it into being unsustainable, and then Monitor would have to act. Does that not seem back to front? It needs looking at. If the foundation trust is unsustainable, Monitor has a duty to take action, yet Monitor may well have precipitated the situation; there seems to be a conflict at the core of that relationship. There is no clarity about how top-slicing will be calculated, or what it will involve. Will the Secretary of State please comment on that?

I shall bring my comments to a close with a quotation that I used in a speech I gave a while ago. In “This Week”, Michael Portillo was asked by Andrew Neil why the Government had not told us before the general election about their plans for the NHS. He replied:

“Because they didn’t believe they could win the election if they told you”—

the public—

“what they were going to do. People are so wedded to the NHS. It’s the nearest thing we have to a national religion—a sacred cow.”

He could not have been more clear. The Government intended to misrepresent their position and mislead voters. I believe that this is the latest stage of that misrepresentation, and the Government must be held to account if they force the Bill through in its current form.

[Dr Poulter]

I was hoping to begin on a more consensual note, picking up on a few things that have been said around the Chamber on which I thought we could all agree. However, I will first remind the hon. Member for West Lancashire (Rosie Cooper) of why the Government are introducing this Bill. We do have problems in the NHS. Far too much money—about £5 billion a year—is wasted on bureaucracy and could be much better spent on front-line patient care. Over the past 10 years, the number of managers in the NHS has doubled, going up six times as fast as the number of front-line nurses; the hon. Lady is very concerned about that. A lot of things need to change in the NHS so that the service can become more patient-focused and patient-centred. That is why we are making these changes and why the reforms in this Bill have to go through the House.

Particularly important—this has come out of the pause for reflection and the Future Forum report—has been an increased focus on one of the key challenges for the health service and for adult social care: better care of our growing older population. People are living a lot longer and living longer with multiple medical conditions, or co-morbidities as they would be termed in medical parlance. That is a very big human challenge for the NHS, and also a very big financial challenge. We must have a service that better meets and better responds to those challenges. The pause for reflection has led to much more focus on improved integration of care, and that will be very much to the benefit of the older patients and frail elderly whom we all care about.

We have had a lot of discussion about the benefits, or otherwise, of using the private sector. The case for the private sector may have been made much more eloquently by Labour Members than by members of the Government. The hon. Member for Easington (Grahame M. Morris) argued that because the previous Government used the private sector to reduce waiting times, it was effectively used to improve patient care for patients with cataracts and for those needing hip operations or waiting for heart operations. That, in itself, was a good thing, but the problem was that the previous Government used the private sector far too much in a way that allowed it to make profits but not to look towards the integrated care that Government Members would like to see as a result of these health care reforms. As regards looking after the frail elderly, for example, there was cherry-picking of hip operations as part of orthopaedics but without the follow-up care that was required—the physiotherapy, occupational therapy and social services that those older people so badly needed. Yes, the private sector can bring value and benefits to the NHS, as the previous Government recognised, but it has to be done in an integrated way, and that is what we will do as a result of these health care reforms.

Why else do we need to reform the NHS? Are we really happy with the status quo?

[Steve McCabe]

Before the hon. Gentleman moves on, I want to make sure that I have understood him. Is he saying that under these plans the private sector is to be given a bigger share—a more total share—of areas of care and that it will not be isolated as a bit of expanded capacity to reduce waiting lists? Is he saying that it will have a broader role involving a total package of care for particular sectors? Is that the aim?

[Dr Poulter]

The aim is consistent with that of the previous Government in bringing in the private sector—to improve patient care. Where the private sector can deliver high-quality patient care—for example, by reducing waiting times—that is a good thing. The private sector can deliver high-quality care but in an integrated way. That is particularly important in the elderly care setting and in rural communities. That is absolutely consistent with what the hon. Gentleman’s Government did and what this Government are trying to build on and develop as a part of this package of reforms.

Are we really happy with the status quo—with the NHS as it stands? I have alluded to some of the waste and bureaucracy and the £5 billion that could be better spent on front-line patient care, but that would be a simplistic view of why we need to improve the NHS. We have heard the names of various bodies being bandied around today. However, on-the-ground surveys of front-line doctors and nurses show, as in a survey conducted in 2009, that in the current NHS the majority of health care staff in hospitals do not believe that looking after patients is the main priority of their NHS trust. What could be more important to a hospital than looking after its patients? The reason for that finding is that the bureaucracy in the processes of health care has often got in the way of delivering good care. Recently, a number of CQC reports throughout my part of the world—the east of England—have indicated failings, particularly in elderly care. The main focus of those reports was that staff were too bogged down with bureaucracy and paperwork and unable to look specifically at the needs of the patients right in front of them.

19:45

[Barbara Keeley]

I think that a few Labour Members are quite surprised by what the hon. Gentleman has said, and the Hansard writers might ask him where it came from. He cannot get away with making a statement like that and not saying where it came from—he should be quoting it. He is saying that the majority of people working in the NHS surveyed in 2009 did not put patient care at the top of the list, and he should quote where that information comes from.

[Dr Poulter]

The point is—I speak as a front-line doctor who still practises in the NHS—that far too often we see form-filling that gets in the way of our doing our job as doctors in hospitals, and that is not for the benefit of patients.

[Barbara Keeley]

Will the hon. Gentleman give way?

[Dr Poulter]

No, sit down. The hon. Lady should listen to this, because it is important. The point is that doctors and nurses need to be allowed to get on and do their jobs.

A key focus is not just about putting more money into front-line patient care but making sure that we have clinical leadership of services. Form-filling for the sake of it does not benefit patients; what benefits patients is allowing doctors to treat those in front of them. Under the perverse incentives that were created previously, the four-hour wait in A and E means that a patient with a broken toe is just as much of a priority as someone with potentially life-threatening chest pain. That is the problem with the service that we have, and that is why the clinical leadership and focus that this Bill is bringing will be so important.

[Valerie Vaz]

rose—

[Dr Poulter]

I am going to make a little progress. Other speakers want to contribute, so I hope that the hon. Lady will forgive me for not taking her intervention.

The Bill focuses on integration and looks to improve the care particularly of our frail elderly. There is too much silo working in the health service—in primary care, in secondary care and in adult social services. The Bill seeks to integrate services through the role provided by Monitor in helping to provide an overarching view of value for the patient and through the setting up of health and wellbeing boards at local level. That is intended to provide better integration of adult social care with NHS care, which has not happened in all parts of the country.

The hon. Member for Easington made a very good speech in which he said that care was hugely variable throughout different parts of England. That is because in many areas we do not have properly joined-up thinking about how things are done. For example, hospitals are paid on payment by results, but there is no incentive necessarily to reduce admissions and to provide much more focused community care, which would be so important in improving the care of the frail elderly in their communities and in their homes. The Bill is starting to take the first steps towards that sort of joined-up thinking.

If Labour Members are concerned about this, the point was well made by Lord Warner in his recent comments as part of the Dilnot report. The right hon. Member for Holborn and St Pancras (Frank Dobson) laughs, but he served alongside Lord Warner in the previous Government.

[Frank Dobson]

rose—

[Dr Poulter]

The right hon. Gentleman did not give way to me, but I will give way to him in a moment and listen to what he has to say. He sat alongside Lord Warner as a member of the Government, and Lord Warner has said that the previous Government did not pay enough attention to how we are better to integrate services and provide adult social care in the context of the NHS and other services.

[Frank Dobson]

I am glad that when I was Secretary of State for Health, Norman Warner did not get anywhere the Department of Health. I can report, on behalf of my London colleagues, that when he became an arbiter of the future of health care in London he must have been about the most unpopular person who has ever had that job.

[Dr Poulter]

The right hon. Gentleman was a part of the party of Government at that time. Lord Warner was a leading member, and it is fair to point out that he has come forward with some good cross-party recommendations that we very much welcome. The recommendations point to the fact that the key challenge for the NHS is better integrating services and providing high-quality patient care, especially in elderly care and adult social care. That has not happened as effectively as it should have done in the last 10 years and we need to ensure that it does happen. That is why this Bill is a good thing.

Members on both sides of the House have generally welcomed the use of the private sector where it can add value to the NHS, especially for patients. That has to be a good thing, but we need to ensure—as the Bill does—that we do not have the cherry-picking that we saw in the past. We need to ensure that we have a health service that provides better value for money, better care and more integrated adult social care and health care for the frail elderly.

[Liz Kendall (Leicester West) (Lab)]

This is a crucial part of the debate that we will have over the next couple of days. Parts 3 and 4 of the Bill are at the heart of the Government’s proposals for the NHS and of the concerns that professional bodies, patient groups, members of the public and Members—at least on this side of the House—have about those proposals. These parts will introduce a new economic regulator for the NHS, modelled on the same lines as those for gas, electricity and railways. They also enshrine UK and EU competition law into primary legislation on the NHS for the first time.

We have also been discussing crucial new amendments that, despite what the Secretary of State says, have not been scrutinised by the Future Forum, about the Government’s new failure regime. That essentially addresses which local services and hospitals—such as we all have in our constituencies—will be allowed to fail.

Each of these subjects should be subject to separate and far longer debates, because they are of such importance to our constituents, our local NHS staff and our local services. However, because the House has been given so little time and the Government have tabled so many amendments, we have been forced to take these huge issues together—[Interruption.] As always, the Minister of State groans from a sedentary position, but Members have a right to question the Government on their proposals for local hospitals and services, and three or four hours is not sufficient. I hope that the other place will take that into account.

The Bill establishes Monitor as an economic regulator, modelled on the same lines as those for gas, electricity and railways. The explanatory notes make this explicit. Page 85 states that clauses in part 3 are based

“upon precedents from the utilities, rail and telecoms industries”.

Indeed, in an interview with The Times earlier this year, David Bennett, the new chairman of Monitor, confirmed that that was the Government’s plan, saying that Monitor’s role would be comparable with the regulators of the gas, electricity and telecoms markets.

Labour Members have consistently argued that such a model is entirely wrong for our NHS. People’s need for health care is not the same as their need for gas, water or telecoms. There is a fundamental difference between needs, ability to benefit, the complexity of services and the fact that they are far more interlinked. The NHS is not a normal market. It is not like a supermarket, or like gas or the railways. There are much more important issues at stake.

The Government have made some minor amendments to Monitor’s duties, but they will not ensure the integration and collaboration that many hon. Members recognise is vital to improving health, especially for patients with long-term and chronic conditions. As my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said, the duties still rig Monitor in favour of competition. It is not only Monitor’s duties that do that. Chapter 2 of part 3 contains 12 clauses that explicitly introduce competition law into primary legislation on the NHS for the first time. The clauses give Monitor sweeping powers to conduct investigations into NHS services; to disqualify senior staff in hospitals and other NHS services; and to impose penalties for breaches of competition law, including the power to fine services that are found to have broken the law up to 10% of their turnover. Not only that, but third parties, including competitors, can bring damage claims against those services.

The Government claim, as the Secretary of State did earlier, that somehow those provisions will not change anything. In that case, why bother to have the clauses in the Bill? As the hon. Member for Southport (John Pugh) said, Labour Members have argued not that the Bill extends the scope of competition law, but that it extends the applicability of competition law to the NHS. It is not just the clauses on Monitor and competition law that do this, but others such as those that abolish the private patient cap on foundation trusts, and other Government policies, such as that of “any qualified provider”.

[Andrew George]

I hope that the hon. Lady shares my disappointment that, despite the fact that we have debated this issue for four hours and that I have tabled nine selected amendments, I have not had the opportunity to explain the purpose of those amendments—even though the Secretary of State referred to them in his opening remarks. Does she accept, for example, that amendment 1207 relates to clause 58(3) and balancing competition versus anti-competitive behaviour? The other amendments seek to give integration a greater priority for the regulator to enforce.

[Liz Kendall]

I understand why the hon. Gentleman tabled those amendments and I understand his concerns. Opposition Members have consistently argued that the Bill threatens to pit doctor against doctor and service against service when they should be working together in the best interests of patients. Our view is that a far better approach than seeking to amend the Bill would be to delete part 3, because it is a fundamentally wrong way to treat our NHS. A few small changes to Monitor’s duties would not alter what the Bill seeks to do, and that is why amendment 10 proposes deletion of part 3.

The Bill will guarantee that the NHS will be treated as a full market, and the providers of services will, for the first time, be treated as undertakings for the purpose of competition law. The Secretary of State said that the Bill would not increase the applicability of competition law, but the Minister of State confirmed it when he told the Committee:

“UK and EU competition laws will increasingly become applicable…in a future where the majority of providers are likely to be classed as undertakings for the purposes of EU competition law, that law…will apply.”––[Official Report, Health and Social Care Public Bill Committee, 15 March 2011; c. 718.]

If the Government wish to claim that that would not be the effect of the Bill, they should publish any legal advice they have taken. Again, we have two different stories. The Minister of State says that the Government have taken legal advice, but in answers to parliamentary questions we hear that the Government have not taken legal advice. Members deserve to know what the advice is about the implications of this Bill.

NHS staff, patient groups and members of the public have very real fears about the consequences of the Government’s proposals and the full market that is envisaged in the Bill. The previous Government saw that giving patients more choice and a greater say in their treatment, and bringing different providers into the system—including from the private and voluntary sectors—can bring real benefits, including improving outcomes and efficiency, especially in elective care. But we always did that using clear national standards that this Government are abolishing and with the ability to manage the consequences that choice and competition bring.

20:00

One of the problems with this part of the Bill is that it does not recognise what some hon. Members have talked about—the interdependency of services. If we remove one service from a hospital, it has a knock-on effect on others. The ability to get the benefits of diversity and competition without destabilising services is a tricky balance, but the Bill does not acknowledge that balance. I am not just talking about the clauses we are discussing now. The Government are also abolishing key organisations, including primary care trusts and, in particular, strategic health authorities, which have an important role in managing the consequences of choice and competition in the system. The two biggest challenges facing the NHS are to specialise and centralise some services in specialist hospitals and to shift other services from district general hospitals out into the community. These changes will have consequences for hospitals. The Bill will make the changes harder to make, and the clauses that we are discussing will prevent the kind of close working and involvement of patients, the public and elected representatives that we need in order to make these changes happen.

The clauses also have consequences and implications for taxpayers. We come to the issue of Monitor’s costs. Chris Ham, the head of the King’s Fund, the well-respected health think tank, wrote in a British Medical Journal article in February that

“the government’s proposals run the risk of replacing the bureaucracy of performance management with the red tape of economic regulation. Monitor will need to employ large numbers of economists, lawyers, accountants, and managers to deal with competition issues, providers who fail, price setting, licensing providers, and other work.”

That is not just a risk; it is a reality. The Minister of State kept changing his position in Committee. Initially he told us that the costs of Monitor would rise from £21 million a year at present to £130 million a year, but he then revised that figure down to £80 million. Of course, however, because the Government have not bothered to publish their impact assessment for the Bill, we have no idea what the costs of setting up this huge new regulatory body will be. It is not just Monitor that will end up having to employ lawyers, accountants and managers; clinical commissioning groups in hospitals will probably need to do it too. They could even be forced to take out expensive insurance in case they are fined, taken to court or even sued because they have fallen foul of competition law.

It is for all those reasons that we are so concerned about the Bill: because we do not think that the NHS should be remodelled along the same lines as the privatised utilities; because we think that competition is not the panacea that the Government think; and because we think that there are very real risks that the legislation will stop hospitals working together and developing their own community services because it could be seen as anti-competitive behaviour.

I turn to Government new clauses 2 and 6 and the series of Government amendments on their new failure regime. It is important that we are clear from the start about the purpose of these amendments, even though we have had only a very brief time to look at them—none of the professional bodies, health experts or managers has had a chance to scrutinise them properly. The Government claim that they are about securing continued access to services for NHS patients. That is an admirable attempt to spin what this is about. In fact, it is a fundamental part of the Government’s plan to create a market in which more services will be likely to fail because it is a way of getting new people into the system. That is the reality of what is happening. The future of local services and whether they will be allowed to fail will be determined not by local clinicians, not by local patients and the public and not by locally elected representatives—I shall explain to the Secretary of State in a moment why his own policies will not do that—but by the new economic regulator, Monitor. I do not believe that this is what people want for their NHS, and it is not supported by Labour Members.

We have heard a lot from some Government Members about how bail-outs and bungs to NHS services have to end. I would just say that many services have received money because we want those services to continue. In my own constituency, Leicester hospitals are facing challenges and problems, and it would be useful to know whether, if their current £11 million deficit was covered by money found within the local health economy, it would be considered a bail-out or bung that would not be allowed under this system. I would be interested to hear from the Secretary of State whether that would be the case. Some Members will have an entire hospital in their constituency at risk of failing financially. We know this because Sir David Nicholson, the chief executive of the NHS, told the Public Accounts Committee on 25 January that there were 20 failing trusts—trusts that cannot become foundation trusts. I have asked the Minister repeatedly for a list of these trusts so that hon. Members who have patients who use those hospitals will know which ones they are and what the Government’s plans for them are. Once again, however, the Government have failed to be open about that, which is a mistake because difficult changes can be made only if the Government genuinely engage with patients, the public and Members of the House on the decisions being taken.

The Bill also proposes removing the ability for foundation trusts to revert to NHS status and the ability to transfer assets and staff from the NHS, including to the private sector. Far from ending cherry-picking, as Government Members claim, it allows Monitor to vary prices for NHS services, including to private providers. That is what these new amendments state. The Government have made much of their claims to the Future Forum that cherry-picking will be ended. We did not get to discuss the cherry-picking amendments, and the new amendments now allow Monitor to do just that, which is a matter of great concern. These issues have not been scrutinised by doctors, nurses, managers, other NHS staff or local councils—and not even by the economic regulator, Monitor, which is running the process, or the Future Forum. It will therefore fall to Members of the other place to ensure that they hear the views and concerns of those bodies when they are scrutinising the Bill.

The situation is even more concerning because of the Government’s poor track record—that is a polite way of putting it—on this issue. They got it badly wrong the first time round with their proposals for Monitor to designate which services are essential for patients and which would be allowed to fail. In the first Bill Committee, we argued against designation because it failed to ensure proper local democratic accountability; because it failed to understand that allowing one NHS service to fail would have a knock-on effect; because it failed to recognise the in-depth local knowledge required to make these decisions; and because it was a cumbersome and bureaucratic process. Above all, we argued that the process was wrong because it should be driven not by the economic regulator, Monitor, which is unelected and unaccountable, but by local people, patients and staff. The Government refused to listen, denying that any of our concerns were valid. I am glad that when the Future Forum made the same arguments as Labour Members, the Government put aside political prejudice and agreed to delete their designation clauses. However, they are making the same mistakes again. The new failure regime will be driven not by clinicians but by the economic regulator, Monitor. It will not give patients and the public a strong voice and it will not ensure effective local democratic accountability.

In reality, Monitor will take the lead in deciding which services are essential for local people and therefore whether they should continue in any form; whether and how it should intervene to try to prevent services from failing; and, if a service cannot improve and needs to close, what will be put in its place. The NHS Confederation says in its briefing for this debate:

“under these proposals Monitor will make fundamental decisions affecting the sustainability and future of individual services…the pattern of local NHS provision and we are concerned that it is unclear how Monitor will take decisions and how it will be held accountable.”

[John Pugh]

Is there not a big difference between making fundamental decisions, as we accept Monitor will sometimes have to do, and what the hon. Lady has just described, which is about taking the lead in the integration and sourcing out of services, which presumably is what the commissioners do? If she has read the other bits of the Bill, as I am sure she has thoroughly, she will be aware that the commissioners have a pivotal role in determining the shape, structure and character of local services.

[Liz Kendall]

I should add that, as the hon. Gentleman will see, page 6 of the briefing notes that the Government published on the Bill says that clause 104 would

“give Monitor discretion in determining where it is appropriate to include standard licence conditions for the purposes of securing continuity of services”.

As the NHS Confederation asks, how will Monitor have the local information and intelligence to make such complex judgments? How should patients and the public be involved? Monitor then has to keep the level of risk of the service under review, as well as taking decisions about whether and how to set differential prices for providers, to ensure the continuity of the process. How it is supposed to do that and how Members of this House, patients, the public or local councils are meant to hold it to account for that process is far from clear.

My biggest concern about the proposals is that they leave Monitor to intervene proactively to prevent services from reaching the point of failure. None of us wants such an outcome, but it is completely unclear when or how Monitor would do that. Page 10 of the technical annexe to the proposals said that the Government would

“expect Monitor to establish transparent and objective tests to determine when intervention is necessary and what level of support a provider would require”,

and claims that

“This would provide certainty to patients and providers”.

However, we have seen none of those details, and nor do we have any way of changing or influencing what Monitor does about the process, which is a real issue for hon. Members. Even under this Government’s flawed approach, it is astonishing that they say that they would only “expect” Monitor to publish criteria for early intervention. Why is that not in the legislation? Why is Monitor not required to publish and widely consult?

I want briefly to set out a couple of other concerns about the process. If it ends up not being possible to prevent a service from failing, what happens next? A trust special administrator will be appointed to take control of the hospital and report to Monitor and then to the Secretary of State. However, there is nothing in the legislation to say that local clinicians, let alone locally elected representatives, have to agree or sign off such proposals. Indeed, page 15 of the technical annexe says that “where possible”, the trust special administrator should

“secure agreement from clinical senates and clinical advisers”.

The idea is that clinicians would not be required to sign off the decision—the trust special administrator might also consult the health and wellbeing board, for example—about which I know many Government and Opposition Members have been concerned. There is nothing in the proposals to say that Monitor has to look at the impact of decisions in one part of a hospital or service on either the rest of the hospital or the wider health community. With the abolition of strategic health authorities, which take that regional view, that becomes a real concern.

The reason these proposals are so important is that there is a risk that there will be more failing services in future, and not only because of the financial squeeze that the NHS is facing—many hon. Members have talked about the real issue out there, which is that services are struggling to keep going, experiencing problems in balancing books and keeping on NHS staff—but as a direct result of Government policy to drive a full market into every part of the service, albeit without any ability to manage the consequences. In fact, the Government’s own documents make it clear that that is the point of competition. Paragraph B112 of the explanatory notes to the Bill states:

“For competition to work effectively, less effective providers must be able to…exit the market entirely”.

The Secretary of State likes to try to explain his way out of this system, but he cannot have it both ways. Either he wants that—for services to fail and new providers to be brought into the system—or he does not.

20:15

I want briefly to talk about two of our key sets of amendments in this group. Amendment 30 seeks to remove the provisions allowing NHS staff and property to be transferred outside the NHS in the insolvency process for failing providers, while our amendments 8, 9, 19, 20 and 116 would maintain the existing regime, by not removing the NHS trust safety net.

The challenge for the Secretary of State is that he likes to argue two different things to two different audiences. On the one hand, he likes to say that he is the champion of competition, diversity, not bailing out failing services and allowing services that are ineffective—however that is defined—to fail. On the other hand, he wants to convince staff, members of the public, constituents and some Members of this House that what he really wants is integration and collaboration—that he wants to give clinicians, patients, the public and locally elected democratic representatives the final say over services, not the market. He cannot have it both ways, and Opposition Members know what the truth is. He wants to see a system in our NHS that would pit doctor against doctor, and service against service—one that would let the market rip without any ability to manage the consequences that choice and competition bring. Opposition Members do not believe that to be the right approach for our NHS or the people we represent. That is why we have tabled our amendments to this part of the Bill, and why we will be opposing it.

[Andrew George]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. If the hon. Gentleman will resume his seat, let me say that the knife comes down at 8.30 pm and I would like the opportunity to give the Secretary of State five minutes at the end of this debate. I would therefore be grateful if the hon. Gentleman would watch the clock and bear that in mind.

[Andrew George]

No pressure, then. I will be as brief as I can. I tabled nine of the amendments in this group, and I had hoped to spend a little more time on them than I have been given this evening. I accept new clause 2, which I shall be supporting; the purpose of that proposal is primarily to rearrange the deckchairs on the Titanic, so that they do not get in the way of the lifeboats. I am happy to support new clause 2, although I have already made clear my views on the Bill and the general direction of the Government’s policy. I am not persuaded by many aspects of the Bill; indeed, I am very unhappy about them. I was very persuaded by the coalition agreement and felt that the balance of policy proposals in it was pretty much right. There were a number of debating points about the role and dynamics of “any willing provider”, but apart from that the themes were absolutely right. However, they were not reflected in the White Paper.

That said, the purpose of my amendments—the right hon. Member for Holborn and St Pancras (Frank Dobson) articulated this point far better, I am sure, than I am about to—is primarily to ensure that Monitor’s role to ensure that anti-competitive behaviour is kept in its box is balanced by looking at the impact of competitive behaviour that might undermine the ability of NHS services to collaborate.

The underlying purpose of amendments 1207 and 1208 is to neutralise or balance the new duty on Monitor to prevent anti-competitive practices that are against the interests of the people who use the services—in other words, patients—by also applying a duty to prevent anti-collaborative practices that would have the same effect. The Government say that that would result in Monitor preventing all practices that were against the interests of patients, but I disagree. Some unsafe practices would be neither competitive nor anti-competitive. The amendments would result in there no longer being a focus mainly on dealing with anti-competitive practices. I believe that that would strengthen the role of the regulator. This is a question of putting competition in its box, and it is important to ensure that it is put properly in its box, properly defined, and that the lid is put on. The purpose of the amendments is to achieve that outcome.

The Secretary of State told me, in response to an intervention relating to amendments seeking to secure a far better ability for Monitor to regulate the integration of services, that it should not be Monitor’s role simply to sustain services that are presumably otherwise unsustainable. The problem with that, in relation to my amendments 1205, 1209, 1229 and others, is that we need to ensure that we sustain the essential services. The important point here, which others have articulated, is that certain services clearly need to integrate. An example is acute emergency trauma centres. If the orthopaedic, paediatric or ophthalmology services were removed from such essential centres, their ability to deal with a wide range of emergencies would be fundamentally undermined. They serve populations of between 250,000 and 500,000 people—sometimes more—and they are absolutely essential. We must ensure that we do not end up with a regulator that allows them to be undermined by imposing a duty on them not to act in an anti-competitive manner.

The purpose of the amendments is to probe these issues, but the Government have made it clear that the NHS will no longer be the preferred provider, which leaves a question mark over the future of those essential and acute services. I will sit down now in order to give the Secretary of State more time than you requested for him, Madam Deputy Speaker, but I want to emphasise that I shall support the Government’s new clause. My amendments are probing amendments, but I wish that we had more time to debate these issues. This is very frustrating.

[Madam Deputy Speaker]

Order. I just remind the hon. Gentleman that the timetable for the debate was not set by me. I am merely assisting the House to meet its deadlines.

[Mr Lansley]

I am grateful to my hon. Friend the Member for St Ives (Andrew George) for the additional time, and I appreciate what he said in his speech. On securing continuing access to essential services, we are in exactly the same place. If a service is essential, it will be the responsibility—and, indeed, the objective—of the commissioners of that service to make it clear that they expect the regulator, or the administrator on the regulator’s behalf, to secure access to those services.

That was one of the three points that the hon. Member for Leicester West (Liz Kendall) mentioned. I thought that she made rather a good speech, but its basic premises were flawed. She also said that Monitor would be responsible for making decisions on what happened to services in the event of a failing or failed provider, but that is simply not true. The whole point of this group of amendments, including new clause 6 and amendments 198 and 199, is to make it clear that commissioners will lead in those circumstances. The proposed structure in the event of failure, through the administrator and the regulator, must be led and approved by the commissioners, who will be clinically led. The fact that the hon. Lady can look at the consultation with, for example, clinical advisors and clinical senates, does not preclude the fact that it will be local clinicians leading the process. Nor does it preclude the fact that local authorities will have an opportunity to intervene, through the scrutiny powers that the amendments will bring in. Indeed, even the Secretary of State will have the opportunity to intervene. It will not simply be a matter of Monitor doing this; the process will be led by commissioners and clinicians, and local people will have the opportunity to intervene.

The hon. Lady also mentioned competition. The Labour party seems somehow to have turned against competition, in a complete shift from where it was in 2006. My hon. Friend the Member for Southport (John Pugh) said that we were bringing in Blairite health reforms-plus, but I think that we are doing something altogether more coherent, purposeful and positive. I would far rather that the comparison involved the focus on quality that the noble Lord Darzi brought in when he was a Health Minister. In so far as Mr Blair pursued these objectives when he was Prime Minister, I think that we are doing it much better.

The amendments, and the Bill, will not allow discrimination in favour of the private sector in the way that the last Labour Government did. We are going to stop that. We are going to stop cherry-picking, because variation in price could not be by virtue of the specific characteristics of the provider. Clause 58(10) makes it clear that Monitor cannot discriminate in favour of the private sector. When the hon. Lady’s predecessor as Member for Leicester West, a previous Secretary of State, set a target for the private sector’s proportion of activity in the NHS, she was wrong. We are not going to do that. The only objective is to secure providers that deliver the best quality for patients. That is what we are all about.

I am grateful to other colleagues for their contributions to the debate, to which I cannot do justice. My hon. Friend the Member for Boston and Skegness (Mark Simmonds) asked whether commissioners would lead improvements in quality. The commissioning board will sort out disagreements, monitoring the commissioners, and together they must draw up plans to deal with providers that have failed.

My hon. Friend the Member for Southport asked whether Monitor or the Office of Fair Trading would deal with mergers. If we were to decide that it should be Monitor, the OFT would still have jurisdiction through its merger regime, so we would be duplicating that regime. I can assure my hon. Friend that, when the OFT is involved in any FT mergers, it will seek sectoral advice from Monitor, and that patient’s interests will always be central to the considerations during the merger.

The hon. Member for Easington (Grahame M. Morris) and other Labour Members were going on about the takeover of failing hospitals by foreign companies. Let me make it clear to them that the last Government, in the National Health Service Act 2006, enabled the franchising of an NHS trust to a private company. That is the legislation under which the last Government initiated the franchising of management at Hinchingbrooke hospital. The last Labour Government then passed legislation in the form of the Health Act 2009, which would have enabled exactly the same thing to be done for foundation trusts, following de-authorisation. Our proposals would specifically prevent that, because we prevent de-authorisation in that way and we are withdrawing the 2006 legal framework for NHS trusts, which, in the long run, of course, will cease to exist.

This group of amendments is part of ensuring that the NHS is and always will be there when we need it. Through this Bill, we will strengthen our confidence in continued access to the services patients need. By contrast, the Opposition would leave the NHS stranded; they would take it back; they are by turns reactionary and opportunist. I invite the Opposition to withdraw their amendments and, if not, I invite the House to reject them. I understand the positive intentions of my hon. Friends who have tabled amendments, but I also ask them to withdraw them. Strengthened by our continuing commitment to listen and to respond, I invite the House to agree to the Government new clauses and amendments.

Question put, That the clause be read a Second time.

The House proceeded to a Division.

[Madam Deputy Speaker (Dawn Primarolo)]

I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

20:29

Division 336

Ayes: 304

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Conservative: 254
Liberal Democrat: 49

Noes: 231

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Labour: 217
Democratic Unionist Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

New clause 2 read a Second time.

20:47

Proceedings interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New clause 2 added to the Bill.

New Clause 6

Objective of trust special administration

‘After section 65D of the National Health Service Act 2006 insert—

“65DA  Objective of trust special administration

(1) The objective of a trust special administration is to secure—

(a) the continued provision of such of the services provided for the purposes of the NHS by the NHS foundation trust that is subject to an order under section 65D(2), at such level, as the commissioners of those services determine, and

(b) that it becomes unnecessary for the order to remain in force for that purpose.

(2) The commissioners may determine that the objective set out in subsection (1) is to apply to a service only if they are satisfied that the criterion in subsection (3) is met.

(3) The criterion is that ceasing to provide the service under this Act would, in the absence of alternative arrangements for its provision under this Act, be likely to—

(a) have a significant adverse impact on the health of persons in need of the service or significantly increase health inequalities, or

(b) cause a failure to prevent or ameliorate either a significant adverse impact on the health of such persons or a significant increase in health inequalities.

(4) In determining whether that criterion is met, the commissioners must (in so far as they would not otherwise be required to do so) have regard to—

(a) the current and future need for the provision of the service under this Act,

(b) whether ceasing to provide the service under this Act would significantly reduce equality between those for whom the commissioner arranges for the provision of services under this Act with respect to their ability to access services so provided, and

(c) such other matters as may be specified in relation to NHS foundation trusts in guidance published by the regulator.

(5) Monitor may revise guidance under subsection (4)(c) and, if it does so, must publish the guidance as revised.

(6) Before publishing guidance under subsection (4)(c) or (5), the regulator must obtain the approval of—

(a) the Secretary of State;

(b) the Board.

(7) The Board must make arrangements for facilitating agreement between commissioners in determining the services provided by the trust under this Act to which the objective set out in subsection (1) is to apply.

(8) Where commissioners fail to reach agreement in pursuance of arrangements under subsection (7), the Board may make the determination (and the duty imposed by subsection (1)(a), so far as applying to the commissioners concerned, is to be regarded as discharged).

(9) In this section—

“commissioners” means the persons to which the trust provides services under this Act, and

“health inequalities” means the inequalities between persons with respect to the outcomes achieved for them by the provision of services that are provided as part of the health service.”’.—(Mr Lansley.)

Brought up, read the First and Second time.

Part 3

Regulation of health and adult social care services

Amendment proposed: 10, page 83, line 5, leave out Part 3.—(Liz Kendall.)

Question put, That the amendment be made.

20:48

Division 337

Ayes: 232

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Labour: 219
Democratic Unionist Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

Noes: 302

---

Conservative: 254
Liberal Democrat: 47

Clause 60

Power to give Monitor functions relating to adult social care services

Amendment made: 87, page 85, line 14, at end insert—

‘( ) Any regulations under this section must apply in relation to England only.’.—(Mr Simon Burns)

Clause 62

Conflicts between functions

Amendment made: 90, page 86, line 30, leave out paragraph (b).—(Mr Simon Burns)

Clause 79

Designation of services

Amendment made: 91, page 97, line 34, leave out clause 79.—(Mr Simon Burns)

Clause 80

Complaint about grant of application for designation

Amendment made: 92, page 99, line 20, leave out clause 80.—(Mr Simon Burns)

Clause 81

Complaint about refusal of application for designation

Amendment made: 93, page 100, line 4, leave out clause 81.—(Mr Simon Burns)

Clause 82

Reviews and removals of designations

Amendment made:94, page 100, line 22, leave out clause 82.—(Mr Simon Burns)

Clause 83

Complaint about grant of application for removal of designation

Amendment made: 95, page 101, line 26 leave out Clause 83.—(Mr Simon Burns)

Clause 84

Complaint about refusal of application for removal of designation

Amendment made: 96, page 102, line 1, leave out clause 84. —(Mr Simon Burns)

Clause 85

Complaints: general provisions

Amendment made: 97, page 102, line 31, leave out clause 85.—(Mr Simon Burns)

Clause 86

Designations affecting more than one commissioner

Amendment made: 98, page 103, line 8,leave out clause 86. —(Mr Simon Burns)

Clause 87

Guidance

Amendment made: 99, page 103, line 25, leave out clause 87.—(Mr Simon Burns)

Clause 103

Limits on Monitor’s functions to set or modify licence conditions

Amendment made: 100, in clause 103, page 111, line 3, leave out ‘designated services’ and insert ‘health care services for the purposes of the NHS’.—(Mr Simon Burns)

Clause 104

Conditions: supplementary

Amendments made: 101, in page 112, line 5, leave out ‘designated services’ and insert ‘one or more of the health care services that the licence holder provides for the purposes of the NHS’.

102, page 112, line 8, leave out ‘designated service’ and insert ‘health care service for the purposes of the NHS’.

103, page 112, line 12, leave out ‘designated services’ and insert ‘health care services for the purposes of the NHS’.

104, page 112, line 14, leave out ‘designated services’ and insert ‘health care services for the purposes of the NHS’.—(Mr Simon Burns)

Clause 108

Standard condition as to transparency of certain criteria

Amendment made: 105, in clause 108, page 116, line 39, at end insert—

‘( ) The following powers must not be exercised so as to omit the condition mentioned in subsection (1) from any licence under this Chapter—

(a) the powers conferred on Monitor by sections 105, 106(7) and paragraph 7(2) of Schedule 10 to modify the standard conditions applicable to all licences, or to licences of a particular description,

(b) the power conferred on the Competition Commission by paragraph 8(5) of that Schedule to modify those conditions, and

(c) the power conferred by section107 on the Office of Fair Trading, Competition Commission and Secretary of State to modify those conditions.’.—(Mr Simon Burns)

Clause 109

Power to require documents and information

Amendments made: 106, page 117, line 19, leave out ‘Chapter 3 and’.

107, in clause 109, page 117, line 21, at end insert ‘, and

(d) Chapter 5A of that Part of that Act (trust special administration)’.—(Mr Simon Burns)

Clause 119

The national tariff

Amendments made: 113, page 122, line 28, at end insert ‘, and

(d) the method used for deciding whether to approve an agreement under section127 and for determining an application under section128 (local modifications of national prices).’.

114, page 123, line 13, at end insert—

‘() the application of the method specified under subsection (1)(d),’.

115, page 123, line 24, leave out paragraph (a).—(Mr Simon Burns)

Clause 121

Consultation on proposals for the national tariff

Amendments made: 781, page 124, line 44, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

116, page 125, line 8, at end insert ‘, and

(d) the method it proposes to use for deciding whether to approve an agreement under section127 and for determining an application under section128 (local modifications of national prices).’.

117, line 28, at end insert—

‘() the application of the method specified for the purposes of subsection (3)(d);’.

118, page 125, line 39, after ‘(b)’, insert ‘or (d)’.

119, page 125, line 39, after second ‘method’, insert ‘, and such guidance on the application of the method specified for the purposes of subsection (3)(d) as is included for the purposes of subsection (6) is only such guidance,’.

120, page 125, line 40, after ‘specified’, insert ‘and included’.

121, page 125, line 41, after ‘specified’, insert ‘and included’.

122, page 125, line 43, after ‘specified’, insert ‘and the guidance that will be so included’.—(Mr Simon Burns)

Clause 127

Local modifications of prices of designated services: agreements

Amendments made: 123, page 130, line 4, leave out from beginning to ‘may’ and insert ‘The commissioner and the provider of a health care service’.

124, page 130, line 5, after ‘service’, insert ‘for the purposes of the NHS’.

125, page 130, line 16, after ‘if’, insert ‘, having applied the method specified under section119(1)(d),’.

126, page 130, line 21, after ‘to’, insert ‘the Secretary of State and’.

127, page 130, line 26, at end insert—

‘( ) If the Secretary of State considers that the modification gives or may give rise (or, where it has yet to take effect, would or might give rise) to liability for breach of an EU obligation, the Secretary of State may give a direction to that effect; and the modification is (or is to be) of no effect in so far as it is subject to the direction.’.

128, page 130, line 27, leave out subsections (9) to (11).—(Mr Simon Burns)

Clause 128

Local modifications of prices of designated services: applications

Amendments made: 129, page 130, line 33, leave out ‘designated’ and insert ‘health care’.

130, page 130, line 35, after ‘service’, insert ‘for the purposes of the NHS’.

131, page 130, line 41, after ‘if’, insert ‘, having applied the method under section119(1)(d),’.

132, page 131, line 9, after ‘to’, insert ‘the Secretary of State and’.

133, page 131, line 14, at end insert—

‘( ) If the Secretary of State considers that the modification gives or may give rise (or, where it has yet to take effect, would or might give rise) to liability for breach of an EU obligation, the Secretary of State may give a direction to that effect; and the modification is (or is to be) of no effect in so far as it is subject to the direction.’.

134, page 131, line 15, leave out subsection (9).

135, page 131, line 19, leave out subsections (10) to (12).—(Mr Simon Burns)

Clause 130

Application of insolvency law to NHS foundation trusts

Amendment made: 136, page 132, line 3 leave out Clause 130.—(Mr Simon Burns)

Clause 131

Health special administration orders

Amendments made: 137, page 133, line 20, at end insert—

‘( ) A health special administrator of a company—

(a) is an officer of the court, and

(b) in exercising functions in relation to the company, is the company’s agent.

( ) A person is not to be the health special administrator of a company unless the person is qualified to act as an insolvency practitioner in relation to the company.’.

138, page 133, line 33, leave out ‘in the case of a provider which is a company,’.

139, page 133, line 35 , leave out ‘company’ and insert ‘provider’.

140, page 133, line 40, after ‘section’ insert ‘—

(a) a reference to a person qualified to act as an insolvency practitioner in relation to a company is to be construed in accordance with Part 13 of the Insolvency Act 1986 (insolvency practitioners and their qualifications);

(b) ’.

141, page 134, line 4, leave out paragraph (a).

142, page 134, line 12, leave out ‘, in relation to a company,’.

143, page 134, line 15, leave out from ‘means’ to end of line 16 and insert ‘a company which is providing services to which a condition included in the company’s licence under section104(1)(i), (j) or (k) applies;’.—(Mr Simon Burns)

Clause 132

Objective of a health special administration

Amendments made: 144, page 134, line 21, leave out from ‘of’ to ‘, and’ in line 23 and insert ‘such of the health care services provided for the purposes of the NHS by the company subject to the health special administration order, at such level, as the commissioners of those services determine by applying criteria specified in health special administration regulations (see section133)’.

145, page 134, line 28 , leave out ‘NHS foundation trust or’.

146, page 134, line 32, leave out ‘licence holder’ and insert ‘person’.

147, page 134, line 33, leave out ‘NHS foundation trust or’.

148, page 134, line 35, leave out ‘licence holders’ and insert ‘persons’.

149, page 134, line 38, leave out ‘in the case of a company’.

150, page 135, line 1, leave out ‘NHS foundation trust or’.

151, page 135, line 4, leave out ‘trust or’.

152, page 135, line 6, leave out ‘trust’s or’.

153, page 135, line 9, leave out ‘in the case of a company,’.

154, page 135, line 10, leave out ‘its’ and insert ‘the company’s’.—(Mr Simon Burns)

Clause 133

Health special administration regulations

Amendments made: 155, page 135, line 33, at end insert—

‘( ) Health special administration regulations may in particular make provision about the publication and maintenance by Monitor of a list of relevant providers.’.

156, page 135, line 33 at end insert—

‘( ) Health special administration regulations may in particular—

(a) require Monitor to publish guidance for commissioners about the application of the criteria referred to in section132(1)(a);

(b) confer power on Monitor to revise guidance published by virtue of paragraph (a) and require it to publish guidance so revised;

(c) require Monitor, before publishing guidance by virtue of paragraph (a) or (b), to obtain the approval of the Secretary of State and the National Health Service Commissioning Board;

(d) require commissioners, when applying the criteria referred to in section132(1)(a), to have regard to such matters as Monitor may specify in guidance published by virtue of paragraph (a);

(e) require the National Health Service Commissioning Board to make arrangements for facilitating agreement between commissioners in their exercise of their function under section132(1)(a);

(f) confer power on the Board, where commissioners fail to reach agreement in pursuance of arrangements made by virtue of paragraph (e), to exercise their function under section132(1)(a);

(g) provide that, in consequence of the exercise of the power conferred by virtue of paragraph (f), the function under section132(1)(a), so far as applying to the commissioners concerned, is to be regarded as discharged;

(h) require a health special administrator to carry out in accordance with the regulations consultation on the action which the administrator recommends should be taken in relation to the provider concerned.’.

157, page 135, line 42, leave out paragraph (c).

158, page 136, line 5, at end insert—

‘() the power to make rules in relation to Scotland is exercisable by the Secretary of State;’.—(Mr Simon Burns)

Clause 134

Transfer schemes

Amendments made: 159, page 136, line 19 , leave out ‘licence holder’ and insert ‘person’.

160, page 136, line 21 , at end insert ‘, and

() for modifications made to a transfer scheme by virtue of paragraph (b) to have effect from such time as Monitor may specify (which may be a time before the modifications were made).’.

161, page 136, line 23, at end insert—

‘(za) for the transfer of rights and liabilities under or in connection with a contract of employment from a company subject to a health special administration order to another person,’.

162, page 136, line 24, leave out ‘rights and liabilities’ and insert ‘or rights and liabilities other than those mentioned in paragraph (za)’.

163, page 136, line 24, leave out ‘an NHS foundation trust or’ and insert ‘a’.

164, page 136, line 26, leave out ‘licence holder’ and insert ‘person’.

165, page 136, line 26, leave out ‘(including’ and insert—

‘() for the transfer of’.—(Mr Simon Burns)

Clause 137

Duty to establish mechanisms for providing financial assistance

Amendments made: 166, page 137, line 10, after ‘to’, insert ‘—

(a) ’.

167, page 137, line 11, at end insert ‘, or

(b) an order under section 65D(2) of the National Health Service Act 2006 (trust special administration for NHS foundation trusts).’.

168, page 137, line 16, after ‘135’, insert ‘or under section 65D(11) of the National Health Service Act 2006’.

169, page 137, line 27, leave out subsection (6).—(Mr Simon Burns)

Clause 139

Applications

Amendments made: 170, page 138, line 16, leave out ‘health’.

171, page 138, line 17, leave out ‘health’.

172, page 138, line 27, leave out ‘health’.

173, page 138, line 32, leave out ‘health’.

174, page 139, line 5, leave out from ‘Chapter’ to end of line 6 and insert ‘—

(a) “special administrator” means—

(i) a person appointed as a health special administrator under Chapter 6, or

(ii) a person appointed as a trust special administrator under section 65D(2) of the National Health Service Act 2006, and

(b) references to being in special administration are to be construed accordingly.’.—(Mr Simon Burns)

Clause 140

Grants and loans

Amendments made: 175, page 139, line 11, leave out ‘designated services’ and insert ‘one or more of the health care services that it provides for the purposes of the NHS’.

176, page 139, line 17, leave out ‘health’.—(Mr Simon Burns)

Clause 141

Power to impose charges on commissioners

Amendment made: 177, page 139, line 32, leave out ‘designated services’ and insert ‘health care services for the purposes of the NHS’.—(Mr Simon Burns)

Clause 146

Amount payable

Amendment made: 178, page 143, line 19, leave out ‘health’.—(Mr Simon Burns)

Clause 147

Investment principles and reviews

Amendment made: 179, page 144, line 12, after ‘6,’ insert—

‘() the procedure for trust special administration for NHS foundation trusts under Chapter 5A of Part 2 of the National Health Service Act 2006,’.—(Mr Simon Burns)

Clause 153

Interpretation and consequential amendments

Amendment made: 180, page 147, leave out line 34.—(Mr Simon Burns)

Clause 166

Financial powers etc.

Amendments made: 181, page 156, line 39, leave out subsections (1) and (2).

182, page 157, leave out lines 7 to 11 and insert—

“(6) In relation to each exercise of the power under that subsection during the year to which the report relates, the report must specify the amount of the loan, issue of public dividend capital, grant or other payment and—

(a) in the case of a loan, the amount (if any) outstanding at the end of the year and the other terms on which the loan was made,

(b) in the case of an issue of public dividend capital, the terms on which it was issued (or, where a decision under section 42(3) is made in relation to it during that year, the terms so decided as those on which it is treated as having been issued), and

(c) in the case of a grant or other payment, the terms on which it was made.’.

183, page 157, line 17, at end insert—

“(7A) A report under subsection (5) must, in relation to each NHS foundation trust, specify—

(a) the amount of the public dividend capital of that trust at the end of the year to which the report relates, and

(b) the conditions on which it is held.’.

184, page 157, line 21, leave out paragraph (a).—(Mr Simon Burns)

Clause 171

Mergers

Amendment made: 185, page 160, line 24, after ‘(1)’, insert ‘—

(a) in paragraph (b), after “NHS trust” insert “established under section 25”, and

(b) ’.—(Mr Simon Burns)

Clause 172

Acquisitions

Amendment made: 186, page 161, line 8, after second ‘trust’, insert ‘established under section 25’.—(Mr Simon Burns)

Clause 175

Supplementary

Amendment made: 187, page 163, line 12, at end insert—

‘( ) In section 271(3)(b) of that Act (territorial limit of exercise of functions under Chapter 5), for “Part 1” substitute “Part 2”.’.—(Mr Simon Burns)

Clause 176

Repeal of de-authorisation provisions

Amendment made: 188, page 163, line 17, leave out subsection (2) and insert—

‘(2) Omit sections 53 to 55 of, and Schedule 9 to, that Act (voluntary arrangements and dissolution); and in consequence of that—

(a) in section 57 of that Act (as amended by section175 of this Act)—

(i) in subsection (3)(a), for “the persons mentioned in section 54(4)” substitute “another NHS foundation trust, an NHS trust established under section 25 or the Secretary of State”,

(ii) omit subsection (3)(b), and

(iii) in subsection (4), for “any of the bodies mentioned in section 54(4)(a) or (c)” substitute “another NHS foundation trust or an NHS trust established under section 25”,

(b) in section 64(4) of that Act (as amended by section 175 of this Act), omit paragraph (b) (but not the following “or”), and

(c) omit section 18(2) to (6) and (11) of the Health Act 2009.’.—(Mr Simon Burns)

Clause 177

Trust special administrators

Amendments made: 189, page 163, line 39 , at end insert—

‘(1A) For the title to section 65B of that Act substitute “NHS trusts: appointment of trust special administrator”.

190, page 164, line 6, after ‘trust.’, insert—

“(3) As soon as reasonably practicable after the making of an order under subsection (2), the Care Quality Commission must provide to the regulator a report on the safety and quality of the services that the trust provides under this Act.’.

191, page 164, line 12, leave out ‘(but not the “and” following it)’.

192, page 164, line 12, at end insert—

‘() in paragraph (c), omit “goods or”’.

193, page 164, line 12, at end insert ‘, and

() after paragraph (c) insert “, and

(d) the Care Quality Commission.”’.

194, page 164, line 26, at end insert—

“(8A) A person appointed as a trust special administrator under this section must manage the trust’s affairs, business and property, and exercise the trust special administrator’s functions, so as to achieve the objective set out in section 65DA as quickly and as efficiently as is reasonably practicable.’

195, page 164, line 34, leave out ‘The Secretary of State’ and insert ‘The regulator’.

196, page 164, line 35, leave out ‘the Secretary of State’ and insert ‘the regulator’.—(Mr Simon Burns)

Clause 178

Procedure etc.

Amendments made: 197, page 164, line 42 , leave out from ‘(2)’ to end of line 43 and insert ‘—

(a) before paragraph (a) insert—

“(za) the Board,”, and

(b) omit paragraph (a) (but not the following “and”).’.

198, page 165, line 4, after ‘regulator.’, insert—

“(5) In the case of an NHS foundation trust, the administrator may not provide the draft report to the regulator under subsection (1)—

(a) without having obtained from each commissioner a statement that the commissioner considers that the recommendation in the draft report would achieve the objective set out in section 65DA, or

(b) where the administrator does not obtain a statement to that effect from one or more commissioners (other than the Board), without having obtained a statement to that effect from the Board.

(6) Where the Board decides not to provide to the administrator a statement to that effect, the Board must—

(a) give a notice of the reasons for its decision to the administrator and to the regulator;

(b) publish the notice;

(c) lay a copy of it before Parliament.

(7) In subsection (5), “commissioner” means a person to which the trust provides services under this Act.’.

199, page 165, line 4, at end insert—

‘( ) At the end of section 65G of that Act (consultation plan) insert—

(4) In the case of an NHS foundation trust, the administrator may not make a variation to the draft report following the consultation period—

(a) without having obtained from each commissioner a statement that the commissioner considers that the recommendation in the draft report as so varied would achieve the objective set out in section 65DA, or

(b) where the administrator does not obtain a statement to that effect from one or more commissioners (other than the Board), without having obtained a statement to that effect from the Board.

(5) Where the Board decides not to provide to the administrator a statement to that effect, the Board must—

(a) give a notice of the reasons for its decision to the administrator and to the regulator;

(b) publish the notice;

(c) lay a copy of it before Parliament.

(6) In subsection (4), “commissioner” means a person to which the trust provides services under this Act.”’.

200, page 165, line 5, leave out from ‘(7)’ to end of line 7 and insert ‘—

(a) before paragraph (a) insert—

“(za) the Board,”,

(b) omit paragraph (a),

(c) in paragraph (b), omit “, if required by directions given by the Secretary of State”, and

(d) after paragraph (c) insert “;

(d) any other person specified in a direction given by the Secretary of State.”’.

201, page 165, line 8, leave out from ‘section,’ to end of line 10 and insert ‘omit paragraphs (a) to (d)’.

202, page 165, line 10, at end insert—

‘( ) In subsection (9) of that section—

(a) after “representatives of” insert “the Board and”, and

(b) for “(7)(a) or (b)” substitute “(7)(b), (c) or (d)”.’.

203, page 165, line 13, after ‘trust’, insert ‘—

(a) in subsection (7)(b), the words “goods or” are to be ignored, and

(b) in subsections (7)(d) and (10),’.

204, page 165, line 14, after ‘regulator.’, insert—

“(13) In the case of an NHS foundation trust, the Secretary of State may direct the regulator as to persons from whom it should direct the administrator under subsection (10) to request or seek a response.’.—(Mr Simon Burns)

Clause 179

Action following final report

Amendments made: 205, page 165, line 25, for subsection (1) substitute—

‘(1) In section 65K of the National Health Service Act 2006 (Secretary of State’s decision on what action to take), in subsection (1), after “a final report under section 65I” insert “relating to an NHS trust”; and in consequence of that, for the title to that section substitute “Secretary of State’s decision in case of NHS trust”.

(1A) After that section insert—

“65KA Regulator’s decision in case of NHS foundation trust

(1) Within the period of 20 working days beginning with the day on which the regulator receives a final report under section 65I relating to an NHS foundation trust, the regulator must decide whether it is satisfied—

(a) that the action recommended in the final report would achieve the objective set out in section 65DA, and

(b) that the trust special administrator has carried out the administration duties.

(2) In subsection (1)(b), “administration duties” means the duties imposed on the administrator by—

(a) this Chapter,

(b) a direction under this Chapter, or

(c) the administrator’s terms of appointment.

(3) If the regulator is satisfied as mentioned in subsection (1), it must as soon as reasonably practicable provide to the Secretary of State—

(a) the final report, and

(b) the report provided to the regulator by the Care Quality Commission under section 65D(3).

(4) If the regulator is not satisfied as mentioned in subsection (1), it must as soon as reasonably practicable give a notice of that decision to the administrator.

(5) Where the regulator gives a notice under subsection (4), sections 65F to 65J apply in relation to the trust to such extent, and with such modifications, as the regulator may specify in the notice.

(6) The regulator must as soon as reasonably practicable after giving a notice under subsection (4)—

(a) publish the notice;

(b) lay a copy of it before Parliament.

65KB Secretary of State’s response to regulator’s decision

‘(1) Within the period of 30 working days beginning with the day on which the Secretary of State receives the reports referred to in section 65KA(3), the Secretary of State must decide whether the Secretary of State is satisfied—

(a) that the persons to which the NHS foundation trust in question provides services under this Act have discharged their functions for the purposes of this Chapter,

(b) that the trust special administrator has carried out the administration duties (within the meaning of section 65KA(1)(b)),

(c) that the regulator has discharged its functions for the purposes of this Chapter,

(d) that the action recommended in the final report would secure the continued provision of the services provided by the trust to which the objective set out in section 65DA applies,

(e) that the recommended action would secure the provision of services that are of sufficient safety and quality to be provided under this Act, and

(f) that the recommended action would provide good value for money.

(2) If the Secretary of State is not satisfied as mentioned in subsection (1), the Secretary of State must as soon as reasonably practicable—

(a) give the trust special administrator a notice of the decision and of the reasons for it;

(b) give a copy of the notice to the regulator;

(c) publish the notice;

(d) lay a copy of it before Parliament.

65KC Action following Secretary of State’s rejection of final report

‘(1) Within the period of 20 working days beginning with the day on which the trust special administrator receives a notice under section 65KB(2), the administrator must provide to the regulator the final report varied so far as the administrator considers necessary to secure that the Secretary of State is satisfied as mentioned in section 65KB(1).

(2) Where the administrator provides to the regulator a final report under subsection (1), section 65KA applies in relation to the report as it applies in relation to a final report under section 65I; and for that purpose, that section has effect as if—

(a) in subsection (1), for “20 working days” there were substituted “10 working days”, and

(b) subsection (3)(b) were omitted.

(3) If the Secretary of State thinks that, in the circumstances, it is not reasonable for the administrator to be required to carry out the duty under subsection (1) within the period mentioned in that subsection, the Secretary of State may by order extend the period.

(4) If an order is made under subsection (3), the administrator must—

(a) publish a notice stating the date on which the period will expire, and

(b) where the administrator is proposing to carry out consultation in response to the notice under section 65KB(2), publish a statement setting out the means by which the administrator will consult during the extended period.

65KD Secretary of State’s response to re-submitted final report

‘(1) Within the period of 30 working days beginning with the day on which the Secretary of State receives a final report under section 65KA(3) as applied by section 65KC(2), the Secretary of State must decide whether the Secretary of State is, in relation to the report, satisfied as to the matters in 65KB(1)(a) to (f).

(2) If the Secretary of State is not satisfied as mentioned in subsection (1), the Secretary of State must as soon as reasonably practicable—

(a) publish a notice of the decision and the reasons for it;

(b) lay a copy of the notice before Parliament.

(3) Where the Secretary of State publishes a notice under subsection (2)(a), subsections (4) to (8) apply.

(4) If the notice states that the Board has failed to discharge a function—

(a) the Board is to be treated for the purposes of this Act as having failed to discharge the function, and

(b) the failure is to be treated for those purposes as significant (and section 13Z1 applies accordingly).

(5) If the notice states that a clinical commissioning group has failed to discharge a function—

(a) the group is to be treated for the purposes of this Act as having failed to discharge the function,

(b) the Secretary of State may exercise the functions of the Board under section 14Z19(2), (3)(a) and (8)(a), and

(c) the Board may not exercise any of its functions under section 14Z19.

(6) Where, by virtue of subsection (5)(b), the Secretary of State exercises the function of the Board under subsection (3)(a) of section 14Z19, subsection (9)(a) of that section applies but with the substitution for the references to the Board of references to the Secretary of State.

(7) If the notice states that the trust special administrator has failed to discharge the administration duties (within the meaning of section 65KA(1)(b))—

(a) the administration duties are to be treated for the purposes of this Act as functions of the regulator,

(b) the regulator is to be treated for the purposes of this Act as having failed to discharge those functions, and

(c) the failure is to be treated for those purposes as significant (and section 66 of the Health and Social Care Act 2011 applies accordingly, but with the omission of subsection (3)).

(8) If the notice states that the regulator has failed to discharge a function—

(a) the regulator is to be treated for the purposes of this Act as having failed to discharge the function, and

(b) the failure is to be treated for those purposes as significant (and section 66 of the Health and Social Care Act 2011 applies accordingly, but with the omission of subsection (3)).

(9) Within the period of 60 working days beginning with the day on which the Secretary of State publishes a notice under subsection (2)(a), the Secretary of State must decide what action to take in relation to the trust.

(10) The Secretary of State must as soon as reasonably practicable—

(a) publish a notice of the decision and the reasons for it;

(b) lay a copy of the notice before Parliament.”’.

206, page 166, line 8, leave out from ‘insert’ to ‘to’ in line 12 and insert ‘—

“(2A) For the purposes of subsection (1) in its application to the case of an NHS foundation trust, the reference to section 65K is to be read as a reference to section 65KD(9); and this section also applies in the case of an NHS foundation trust if—

(a) the Secretary of State is satisfied as mentioned in section 65KB(1) or 65KD(1) in relation to the trust, and

(b) the action recommended in the final report is to do something other than dissolve the trust.

(2B) For the purposes of subsection (2) in its application to the case of an NHS foundation trust—

(a) the reference to the Secretary of State is to be read as a reference’.

207, page 166, line 23, at end insert—

‘( ) After that section insert—

“65LA Trusts to be dissolved

(1) This section applies if—

(a) the Secretary of State is satisfied as mentioned in section 65KB(1) or 65KD(1), and

(b) the action recommended in the final report is to dissolve the NHS foundation trust in question.

(2) This section also applies if the Secretary of State decides under section 65KD(9) to dissolve the NHS foundation trust in question.

(3) The regulator may make an order—

(a) dissolving the trust, and

(b) transferring, or providing for the transfer of, the property and liabilities of the trust—

(i) to another NHS foundation trust or the Secretary of State, or

(ii) between another NHS foundation trust and the Secretary of State.

(4) An order under subsection (3) may include provision for the transfer of employees of the trust.

(5) The liabilities that may be transferred to an NHS foundation trust by virtue of subsection (3)(b) include criminal liabilities.”

( ) For the cross-heading preceding section 65K substitute “Action by the Secretary of State and the regulator”.’.—(Mr Simon Burns)

Clause 180

Sections 177 to 179: supplementary

Amendments made: 208, page 166, line 29, at end insert—

‘( ) In section 65N of that Act (power to issue guidance), after subsection (2) insert—

(2A) It must include guidance about the publication of—

(a) notices under section 65KC(4)(a);

(b) statements under section 65KC(4)(b).”’.

209, page 166, line 38, leave out ‘65K or 65L’ and insert ‘65L or 65LA’.

210, page 166, line 40, at end insert—

‘(ia) a copy of any notice published under section 65F, 65H, 65J, 65KA, 65KB or 65KD,’.

211, page 166, leave out line 42.

212, page 167, line 15, leave out ‘65K(4)’ and insert ‘65 (KC)(3)’.

213, page 167, line 15, before ‘and’, insert—

‘() after “65L(2) or (4)” insert “65LA(3)”,’.

214, page 167, line 21, leave out ‘65K’ and insert ‘65LA’.

215, page 167, line 23, at end insert—

‘(ia) a copy of any notice published under section 65F, 65H, 65J, 65KA, 65KB or 65KD,’.

216, page 167, leave out line 25.—(Mr Simon Burns)

Clause 181

Repeal of Chapter 5A of Part 2 of the National Health Service Act 2006

Amendment made: 217, page 167, line 31, leave out clause 181.—(Mr Simon Burns)

Clause 182

Application of NHS trusts in England

Amendment made: 218, page 168, line 31, leave out paragraphs (b) and (c).—(Mr Simon Burns)

Clause 183

Repeal of provisions on authorisation for NHS foundation trusts

Amendments made: 219, page 169, line 2, after ‘liabilities)’ insert ‘; in consequence of that, omit section 95 of this Act (licences to provide health care services: NHS foundation trusts)’.

220, page 169, line 10, after ‘Act’ insert ‘, and section 95(1) and (2) of this Act,’.—(Mr Simon Burns)

Schedule 13

Part 3: minor and consequential amendments

Amendment made: 366, page 367, line 31, at end insert—

‘Equality Act 2010 (c.15)

In Part 1 of Schedule 19 to the Equality Act 2010 (bodies subject to public sector equality duty), for the entry for the Independent Regulator of NHS Foundation Trusts substitute “Monitor”.’.—(Mr Simon Burns)

Schedule 14

Abolition of NHS trusts in England: consequential amendments

Amendments made: 367, page 368, line 26, leave out from ‘section’ to end of line 27 and insert ‘56 (mergers of NHS foundation trusts)—

(a) in subsection (1)(b) (as amended by section171(1)(a)), omit “or an NHS trust established under section 25”’.

368, page 368, line 27, at end insert ‘, and

(b) in subsection (1A) (as inserted by section171(2)), omit “(that is an NHS foundation trust)”.’.

369, page 368, line 28, leave out from ‘section’ to end of line 30 and insert ‘56A (acquisitions of NHS foundation trusts) (as inserted by section172)—

(a) in subsection (1)(b), omit “or an NHS trust established under section 25”’.

370, page 368, line 30, at end insert ‘, and

(b) in subsection (2), omit “(that is an NHS foundation trust)”.’.

371, page 368, line 40, leave out paragraph 13 and insert—

13 (1) Omit section 65B (appointment of trust special administrator in relation to NHS trust).

(2) In consequence of that repeal, omit section 177(1A) of this Act.’.

372, page 368, line 43, at end insert—

13A Omit section 65C (suspension of directors of NHS trust).

13B (1) Section 65F (special administrator’s draft report) is amended as follows.

(2) In subsection (1), for “the Secretary of State”, in each place it appears, substitute “the regulator”.

(3) In subsection (2)(b)—

(a) omit “goods or”, and

(b) for “the Secretary of State” substitute “the regulator”.

(4) After subsection (2) insert—

“(2A) The administrator may not provide the draft report to the regulator under subsection (1)—

(a) without having obtained from each commissioner a statement that the commissioner considers that the recommendation in the draft report would achieve the objective set out in section 65DA, or

(b) where the administrator does not obtain a statement to that effect from one or more commissioners (other than the Board), without having obtained a statement to that effect from the Board.

(2B) Where the Board decides not to provide to the administrator a statement to that effect, the Board must—

(a) give a notice of the reasons for its decision to the administrator and to the regulator;

(b) publish the notice;

(c) lay a copy of it before Parliament.

(2C) In subsection (2A), “commissioner” means a person to which the trust provides services under this Act.”

(5) In subsection (3), for “the Secretary of State” substitute “the regulator”.

(6) Omit subsections (4) to (7).

(7) In consequence of those repeals, omit section 178(2) of this Act.

13C In section 65G (consultation plan), in subsection (4), omit “In the case of an NHS foundation trust,”.

13D (1) Section 65H (consultation on draft report) is amended as follows.

(2) In subsection (7)—

(a) in paragraph (b), omit “goods or”, and

(b) in paragraphs (c) and (d), for “the Secretary of State” substitute “the regulator”.

(3) In subsection (10), for “The Secretary of State” substitute “The regulator”.

(4) After that subsection insert —

“(10A) The Secretary of State may direct the regulator as to persons from whom it should direct the administrator under subsection (10) to request or seek a response.”

(5) Omit subsections (12) and (13).

(6) In consequence of those repeals, omit section 178(5) of this Act.

13E (1) Section 65I (administrator’s final report) is amended as follows.

(2) In subsection (1), for “the Secretary of State”, in each place it appears, substitute “the regulator”.

(3) In subsection (3), for “the Secretary of State” substitute “the regulator”.

(4) Omit subsection (4).

(5) In consequence of that repeal, omit section 178(6) of this Act.

13F (1) Section 65J (power to extend time limits) is amended as follows.

(2) In subsection (2), for “the Secretary of State”, in each place it appears, substitute “the regulator”.

(3) Omit subsection (5).

(4) In consequence of that repeal, omit section 178(7) of this Act.

13G (1) Omit section 65K (decision on action to take in relation to the trust) and the preceding cross-heading.

(2) In consequence of those repeals, omit section 179(1) of this Act.

13H (1) Section 65KA (regulator’s decision in case of NHS foundation trust) is amended as follows.

(2) In subsection (1), omit “relating to an NHS foundation trust”.

(3) In subsection (5), for “the trust” substitute “the NHS foundation trust in question”.

(4) For the title to that section substitute “The regulator’s decision”.

(5) Before that section, insert as a cross-heading “Action by the regulator and the Secretary of State”.

13I (1) Section 65L (trusts coming out of administration) is amended as follows.

(2) In subsection (1)—

(a) for “65K” substitute “65KB(2) or 65KD(2) or (9)”, and

(b) for “the trust” substitute “the NHS foundation trust in question”.

(3) In subsection (2)—

(a) for “The Secretary of State” substitute “The regulator”, and

(b) for “and directors” substitute “, directors and governors”.

(4) Omit subsections (2A), (2B) and (6).

(5) In consequence of the repeal of subsections (2A) and (2B) of that section, omit section 179(2) of this Act.

13J (1) Section 65M (replacement of special administrator) is amended as follows.

(2) In subsection (1), for “the Secretary of State”, in each place it appears, substitute “the regulator”.

(3) In subsection (2), for “the Secretary of State” substitute “the regulator”.

(4) Omit subsection (3).

(5) In consequence of that repeal, omit section 180(1) of this Act.

13K (1) Section 65N (guidance) is amended as follows.

(2) In subsection (1), for “The Secretary of State” substitute “The regulator”.

(3) Omit subsection (4).

(4) In consequence of that repeal, omit section 180(2) of this Act.’.—(Mr Simon Burns)

New Clause 3

Duration of transitional period

‘(1) Section 117 ceases to have effect in relation to an NHS foundation trust on 1 April 2016 unless—

(a) before that date, the Secretary of State provides by order for that section to continue to have effect in relation to the trust, or

(b) the trust was authorised after 1 April 2014.

(2) An order under this section may provide that section 117 is to continue to have effect for such period as is specified—

(a) in relation to all NHS foundation trusts, or

(b) in relation only to such NHS foundation trusts as are specified.

(3) But an order under this section may not apply to a trust in relation to which section 117 has, by virtue of a previous order under this section, ceased to have effect.

(4) A period specified for the purposes of subsection (2)—

(a) must begin with the day on which section117 would, but for the order, cease to have effect in relation to the trusts to which the order applies, and

(b) must not exceed two years.

(5) In the case of a trust to which an order under this section applies, and which was authorised on or before 1 April 2014, section 117 ceases to have effect in relation to the trust in accordance with that order or any subsequent orders under this section which apply to the trust.

(6) In the case of a trust which was authorised after 1 April 2014 (including a trust authorised on or after 1 April 2016 if, at the time it is authorised, section 117 still has effect), section 117 ceases to have effect in relation to the trust—

(a) if no order under this section is made before the end of the initial two-year period, at the end of that period;

(b) if an order under this section is made in reliance on subsection (2)(a) before the end of the initial two-year period, on whichever is the later of—

(i) the end of that period, and

(ii) the day on which that order or a subsequent order under this section ceases to apply to the trust;

(c) if an order under this section is made in reliance on subsection (2)(b) before the end of the initial two-year period, in accordance with section [Orders under section [Duration of transitional period] that apply to only some trusts](8) to (11).

(7) In this section and section [Orders under section [Duration of transitional period] that apply to only some trusts]—

(a) “the initial two-year period”, in relation to an NHS foundation trust, is the period of two years beginning with the day on which the trust is authorised;

(b) a reference to being authorised is a reference to being given an authorisation under section 35 of the National Health Service Act 2006.

(8) Section 117 is repealed as soon as there are—

(a) no NHS foundation trusts in relation to which it has effect, and

(b) no NHS trusts in existence (whether because they had all ceased to exist without section182 having come into force or there are none continuing in existence by virtue of subsection (3) of that section).’.—(Paul Burstow.)

Brought up, and read the First time.

21:00

[The Minister of State, Department of Health (Paul Burstow)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Government new clause 4—Orders under section [Duration of transitional period] that apply to only some trusts.

Government new clause 5—Repeal of sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts].

Government amendments 88, 89 and 108 to 112.

Amendment 17, in clause 117, page 122, line 3, leave out subsection (12).

Government amendments 282 and 285.

[Paul Burstow]

These Government amendments will make important changes to extend Monitor’s intervention powers over all foundation trusts until 2016. This would give additional time for foundation trusts’ governors to build the capability that they need to be able to hold their boards to account.

As my right hon. Friend the Secretary of State has described, through part 3 of the Bill, Monitor as the sector regulator would have permanent intervention powers over all providers, including foundation trusts. These will allow it to fulfil its duty to protect and promote the patient’s interest and its functions include supporting commissioners in securing continuity of services. That is why we believe that Opposition amendment 17 is not only ineffective, based as it is on non-existent terms of authorisation, but also redundant.

My right hon. Friend the Secretary of State has already confirmed that we agree that it is essential that Monitor, as health sector regulator, can take action to secure patients’ continued access to NHS services, and our plans ensure this. Monitor would have powers under its licensing regime to require a provider to take specific actions if it gets into difficulties. These will be effective safeguards to protect patients’ and taxpayers’ interests, and will support commissioners in securing continued access to services that patients depend on for their care. I hope, therefore, that the hon. Members who tabled the amendment will not press it.

However, the NHS Future Forum raised concerns about the current readiness of foundation trust governors to take on the strengthened role that the Bill provides for them in holding foundation trusts to account as autonomous NHS providers. In response, the Government have agreed that Monitor’s intervention powers should apply to all foundation trusts until 2016, to allow time for their governance arrangements to become fully effective. The amendments provide for the transitional powers to continue until 2016. They also make corresponding amendments to clause 117 on licence conditions supporting use of the powers, and remove clause 116, about identifying which foundation trusts would be subject to the powers.

The amendments do not change the nature of the transitional intervention powers set out in clause 117. Monitor will continue to have the power to remove or suspend members of the board of directors or members of the council of governors. Monitor would also be able to direct a foundation trust to do or not to do specific things within a specified timetable. These powers are similar to those currently available to Monitor in its role as foundation trust regulator, and would allow Monitor to continue to protect the taxpayers’ interest in foundation trusts.

The powers go beyond those that Monitor would have over all providers, under part 3, as sector regulator. They will help to ensure a smooth transition from the current arrangements for NHS foundation trusts. The amendments would allow the Secretary of State to seek further parliamentary agreement to extend the powers beyond 2016 for all or some foundation trusts for up to two years at a time. That power could be used, for example, if there was a significant remaining concern about the governance of some foundation trusts.

If it were decided to extend the powers for some, but not all, foundation trusts, Monitor would be required to go through a process similar to that originally envisaged in clause 116. It would have to publish the criteria that it would use to decide which foundation trusts would remain subject to its intervention powers. Those criteria would be subject to consultation and would require approval from the Secretary of State. The amendments will ensure that the transitional regime proposed in the Bill provides a more secure safety net while foundation trust governors develop the skills and capabilities necessary to hold their boards to account.

The amendments would enable Monitor to rectify avoidable difficulties at a foundation trust while foundation trust governance arrangements developed, ahead of normal regulatory intervention through the licensing regime. They also provide for the extension of the powers, should that prove necessary. I commend them to the House.

[Owen Smith]

I do not intend to take long, because we must get on to the important next group of new clauses and amendments, which is on the private patient cap; there will be huge interest in that outside this place, and there is far too little time to discuss it. I shall say right at the outset that we will not press amendment 17, because we accept that, as the Minister said, it is effectively made redundant by other amendments that have been tabled.

In some respects, the amendments in the group before us tell the story of the Bill in microcosm. Throughout the progress of the Bill, the Government have responded in two ways. One has been to bolt endless obfuscation and compromise on to the Bill to obscure its true intentions. There was clarity at the outset, in the Bill’s first iteration; it clearly aimed to break up a publicly owned, collaborative NHS and replace it with a competitive, market-driven NHS. The Government have sought to obscure that throughout the Bill’s progress, and have done so relatively effectively. Certainly, more gullible Government Members, perhaps even including the Deputy Prime Minister, have bought into the double-speak about this now being a question of preventing anti-competition, as opposed to promoting competition, but we Labour Members still do not buy that.

Nor do we buy the idea that the other amendments that we have considered today add clarity. In truth, they add to the confusion—the chaos, indeed—that will follow the implementation of the Bill. As the Minister has outlined, the clauses that we are considering effectively extend Monitor’s existing compliance and regulatory roles over foundation trusts to all FTs through to 2016. That is what the Future Forum recommended to Ministers, but they did not do that last time, although they did get rid of the arbitrary 2014 deadline that they had introduced. They are now going a step further and extending Monitor’s compliance functions. That might not be such a bad thing, and perhaps many people will agree with the idea; certainly the Future Forum will. The trouble with it, of course, is that it extends the critical conflict of interest that is at the heart of Monitor’s role.

There is a conflict between what is clearly Monitor’s principal function—as an economic regulator, designed to prevent anti-competitive behaviour and facilitate the exit of providers, such as hospitals, from the marketplace—and its compliance role, which is ostensibly about allowing FTs to flourish, and making sure that they do not fail. How will the Government deal with that apparent contradiction? To use their own words as set out in the original explanatory notes, how will they

“mitigate and manage potential conflicts of interest”

between the transitional functions and Monitor’s new functions? Well, rest easy, because the Government have made a very simple suggestion as to how Monitor should square that circle, which I am sure all Members will find satisfactory, as I do. Clause 62(3), subtly amended by Government amendment 89, explains that Monitor must simply

“ignore the functions it has under section…117 when exercising…its functions”

relating to competition, price-setting, or the licensing of NHS services.

So there we go: in Monitor there are to be Chinese walls, as Ministers colourfully put it in Committee. Monitor retains its role in trying to keep FTs from failing, but it also takes on a role in exiting them from the market and helping other providers—Bupa, perhaps, or Helios, which we know are sniffing around the Department of Health right now—to step into the breach. Chinese walls, competition and confusion: those are the key words for this botched Bill.

Question put and agreed to.

New clause 3 accordingly read a Second time, and added to the Bill.

New Clause 4

Orders under section [Duration of transitional period] that apply to only some trusts

‘(1) Where the Secretary of State proposes to make an order under section [Duration of transitional period] in reliance on subsection (2)(b) of that section (“a section [Duration of transitional period](2)(b) order”), the Secretary of State must notify Monitor.

(2) Monitor, having received a notification under subsection (1), must set the criteria that are to be applied for the purpose of determining to which NHS foundation trusts the order should apply.

(3) Before setting criteria under subsection (2), Monitor must—

(a) consult the Care Quality Commission and such other persons as Monitor considers appropriate, and

(b) obtain the approval of the Secretary of State.

(4) If the Secretary of State approves the proposed criteria, Monitor must—

(a) publish the criteria,

(b) determine, by applying the criteria, to which trusts the order should apply,

(c) notify the Secretary of State of its determination, and

(d) publish a list of the trusts concerned.

(5) If the Secretary of State does not approve the proposed criteria, Monitor must propose revised criteria; and subsections (3)(b) and (4) apply in relation to the proposed revised criteria as they apply in relation to the criteria previously proposed.

(6) If, having received a notification under subsection (1), Monitor proposes to set criteria the same as those it set on the last occasion it received a notification under that subsection, it need not comply with subsection (3)(a).

(7) A section [Duration of transitional period](2)(b) order—

(a) must apply to all the trusts that are determined under subsection (4)(b) as being the trusts to which the order should apply (and to no others);

(b) may specify the trusts to which it applies by reference to their inclusion in the list published under subsection (4)(d).

(8) Subsection (9) applies where —

(a) a section [Duration of transitional period](2)(b) order is in force at a time when there is in existence an NHS foundation trust authorised after 1 April 2014, and

(b) the initial two-year period in relation to that trust has yet to come to an end.

(9) Monitor must—

(a) determine, by applying the criteria it applied under subsection (4)(b), whether section 117 should continue to have effect in relation to the trust after the end of the initial two-year period,

(b) notify the Secretary of State of its determination, and

(c) publish its determination.

(10) If Monitor determines under subsection (9)(a) that section117 should so continue to have effect, the trust is to be treated as if it had been authorised on or before 1 April 2014 and as if the order referred to in subsection (7)(a) applied to it; and section [Duration of transitional period] (5) is accordingly to apply in relation to the trust.

(11) If Monitor determines under subsection (9)(a) that section 117 should not so continue to have effect, section 117 ceases to have effect in relation to the trust immediately after the end of the initial two-year period.’.—(Paul Burstow.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 5

Repeal of sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts]

‘(1) Sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts] are repealed immediately after section 117 is repealed; and in consequence of that—

(a) in section 62(2)(a), omit “or under sections 117 and [Orders under section [Duration of transitional period] that apply to only some trusts] of this Act (imposition of licence conditions on NHS foundation trusts during transitional period)”,

(b) omit section62(3),

(c) in section 94(4), after paragraph (a) insert “and”,

(d) in section 94(4), omit paragraph (c) and the preceding “and”, and

(e) omit section 302(5)(e) and (8A).

(2) This section is repealed immediately after sections [Duration of transitional period] and [Orders under section [Duration of transitional period] that apply to only some trusts] are repealed.’.—(Paul Burstow.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 19

NHS Foundations Trusts: phasing out of provision of private health care

‘The Secretary of State must make regulations which provide for NHS Foundation Trusts to be prevented from providing services other than those of the health service in England within three years of Royal Assent of this Act.’.—(Andrew George.)

Brought up, and read the First time.

[Andrew George]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to discuss the following:

New clause 22—Private health care: rules—

‘(1) Section 44 of the National Health Service Act 2006 (Private healthcare) is amended as follows.

(2) Insert new subsection (A1) as follows—

“(A1) NHS Foundation Trusts must act in accordance with the following rules when carrying out their functions under this section—

(a) NHS Foundation Trusts are not permitted to operate NHS functions or contracts in a manner which promotes their private healthcare operation;

(b) any private healthcare service offered should only be within the provision of the services and procedures which are not also duplicated by the Trust’s NHS functions or contracts; and

(c) the Trust should at all times operate any private healthcare interest in a manner which in no way conflicts with its responsibility to provide unfettered access of its NHS patients to its NHS services.”’.

Amendment 1165, page 159, line 24, leave out clause 168.

[Andrew George]

The new clauses deal with a totemic issue that has bedevilled the debate throughout and raised concerns. The question whether to raise the cap or leave it where it is is a ham-fisted reaction to our current situation in the Report stage of a re-committed Bill. There should be an opportunity for further consideration, and I hope the issue will be examined in another place.

There has been much hyperbole about the privatisation of the NHS and other themes that have run through the debate. The general concern is that, as a result of various genies being let out of bottles and caps being lifted, we will end up with an NHS driven more by concern with private profit than by concern with matters of patient care. There is a slippery slope, of which that issue is symptomatic, throughout the Bill.

The purpose of the new clauses is to address that issue and retain the cap to ensure that the matter is kept under appropriate control. The rough and tumble of political debate means that we will end up scoring points off each other and asking who introduced foundation trusts and so on. We have been through that playground before and I do not intend to go in that direction, but I want to make sure that we have an opportunity to explore the matter. We do not have much time so I will not detain the House unnecessarily.

The removal of the cap will give more scope for NHS trusts to compete in the market, which will make them more likely to be considered undertakings for competition law purposes, even in respect of NHS services which the hospitals claim their private work subsidises, thus allowing competition law to reach further and more firmly into the NHS. The Government briefing does not even dispute that fact, as far as I can see. Also, if NHS foundation trusts can muscle in on the private market, rather like the BBC, private providers will feel more justified in arguing for the right to compete for far more NHS services, and the courts may well agree.

New clause 19 recognises that pay beds in the NHS represent a challenge, both ethically—it is about how beds can be reserved for paying patients in the same hospitals where poorer patients with higher needs must wait—and with regard to competition law. It would phase out the reserving of beds for paying patients in NHS hospitals by 2015.

New clause 22 would put a bar on foundation trusts offering private services where that would compete with their NHS provision. I certainly know, having undertaken surveys of the NHS 12 years ago, that the specialties with the longest waiting times—I will not say which, but Members might guess—happened to be those in which the most private practice was going on. One might argue that the private practice resulted from the long waiting times, but the long waiting times could have been part of a system that enabled the private sector to flourish. I fully accept—to save the Minister a lot of time in his response—that the new clause is technically very deficient, so I will not press it to a vote, but I want to express my concern and probe the issue in debate.

I know that there are ethical considerations here and that the General Medical Council and others would not only frown on the kind of practices I am implying might go on, but would rule against them. The concern is that the trusts, or those working for them, might be seduced into behaving in ways that drive their NHS patients into the arms of their private wings. Once we go down that road, many conundrums will arise and will need to be sorted out. I do not believe that the Government entirely have a handle on the issue, which is why I believe that simply lifting the cap, despite all the justifications they have given, needs a serious rethink.

21:15

I do not question Ministers’ intentions, which I think are honourable, but I do think that they have the wrong policy. I do not think that they, as some claim, want to push privatisation across the NHS, but I do think that this could end up being a catastrophic policy that unleashes something that, once it goes through, we will be able to regret at our leisure. On that basis, I simply wanted to raise these matters and ensure that we have an opportunity to debate them, primarily for the purposes of probing the issues.

[Emily Thornberry]

I would like to speak to amendment 1165, which stands in my name and those of my right hon. Friend the Member for Wentworth and Dearne (John Healey), my hon. Friends the Members for Leicester West (Liz Kendall), for Halton (Derek Twigg) and for Pontypridd (Owen Smith), and the hon. Members for St Ives (Andrew George), for Southport (John Pugh) and for Leeds North West (Greg Mulholland). It would delete clause 168, which abolishes the cap on the number of private patients who can be treated in foundation trust hospitals. There has been much interest in this issue, and we will seek a vote on the matter if possible.

Earlier, the Secretary of State assured us that the legislation would not result in a market free-for-all. “That will not happen if this Bill is passed,” he said. But close examination of the clause shows that we will certainly be getting a step closer. It will mean that our national health service, where people are tended by our NHS-trained doctors using our NHS equipment, will be full of private patients, who are able to pay more. Hard-pressed hospitals facing increasingly large shortfalls, desperately trying to balance their books, are bound to take in increasing numbers of private patients.

We have been here before. Many of us remember the last time the Conservatives were in power, when there was a two-tier health service: those who could pay got faster treatment and could skip the queue, while those who could not afford to go private had to wait, and many of them had to die.

I am pleased that the Secretary of State has seen the letter in The Times today. It is often concerning to see how he assimilates data, because he seems to listen only to some things and not to others; he listens to what he wants to hear. I hope that he has realised that in The Times today the doctors, nurses, midwives, psychiatrists, physiotherapists and occupational therapists have said that the Bill will destabilise the national health service. They are particularly concerned about the removal of the private patient cap. Why is that? The Government’s own impact assessment, at B156, acknowledges that

“there is a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients.”

We could not have put that better ourselves, and it is in the Government’s own impact assessment of the Bill.

If we lift the cap on the number of private patients in the time of crisis that the national health service is about to go into, as night follows day the number of private patients in hospitals will increase, forcing out national health service patients. As a result, waiting lists will go up, and what will the public make of that?

[Dr Poulter]

As the hon. Lady is well aware, the previous Government introduced the private sector in a number of hospitals, and at the moment the private sector works alongside the NHS, helping to cut down on waiting times and the like. She is concerned about the private sector working alongside the NHS in hospitals. Does she have any concerns at the moment based on what the previous Government did in introducing that side-by-side service?

[Emily Thornberry]

What is extraordinary is that many people who used to go private felt that it was not necessary to do so under a Labour Government because they did not have to wait as they had to under the Conservative Government—that is one thing that I certainly remember. Yes, we have used the private sector as and when it has been necessary to reduce waiting lists, but we are not talking about that now. We are talking about whether there should be a cap on the number of private patients in national health service beds.

[Dr Poulter]

The hon. Lady is very kind to give way twice. She makes well the point about why the private sector is beneficial. We either agree that the private sector adds value to the NHS and patients or we say that it is a bad thing; it is either working at the moment for the benefit of patients and will work that way in future, or it is not and will not. Which way does the hon. Lady see it?

[Emily Thornberry]

I am sure that that contribution was of some use to someone in this debate, but I am not going to bother to respond to it.

[Helen Jones (Warrington North) (Lab)]

Does my hon. Friend agree that the real difference between what was happening under the Labour Government and what is proposed in this Bill is that we used the private sector to treat people on the basis of need identified by the NHS, not ability to pay? This Government propose to allow more people to pay to jump the queue. In that sense, if waiting lists go up, that helps the private sector: there is no point in paying to jump the queue if there is no queue.

[Emily Thornberry]

Exactly; I am very grateful to my hon. Friend.

The Secretary of State, like the Minister of State, the right hon. Member for Chelmsford (Mr Burns), is fond of quoting the Future Forum. I have a quote from Professor Steve Field that I hope will be of assistance to the House when it comes to discussion of the cap. He said in evidence to the Committee:

“if you opened the cap, it made you more likely to be under attack from EU law, competition and Monitor”.––[Official Report, Health and Social Care (Re-committed) Public Bill Committee, 28 June 2011; c. 14, Q24.]

That is one of the arguments that he used. If the Future Forum is concerned about this being another reason why we should not lift the cap, I hope that the Minister will at least listen to its arguments.

As we heard in Committee, a number of criticisms have been made on both sides of the House about the details of the cap and how it is implemented. Indeed, it is common ground that there ought to be some changes to it. We have no problem about changing and modifying the cap and making it more appropriate, but we do not understand why, just because the cap needs changing, it is simply being lifted completely.

A parallel can be drawn with the carbon emissions cap. If I were working in the Potteries in Staffordshire, I am sure that I would believe that the carbon emissions cap was unfair and went against my personal business. One would need to look at the cap and change it as appropriate in order to make it work properly; one would not get rid of it completely just because there are criticisms of it, unless one had another agenda.

The question is why on earth the Government are considering allowing as many private patients as wish to do so to go into our national health service at a time of crisis, pushing out national health service patients. [Interruption.] If the Minister believes that that is wrong, I will be interested to hear an intervention from him in which I hope he will be able to give us a complete assurance that that will not happen. The fact of the matter is that there are not the necessary safeguards. As we understand it, there will be absolutely no limit. We have no idea how foundation trusts are going to respond to the lifting of the cap. We do not know and neither, with great respect, does the Minister. Why is he allowing this great risk to be taken with our national health service? The clause needs to be looked at very carefully in this place, and I know that it will be looked at very carefully in another place.

[Nicky Morgan]

I am not sure whether the hon. Lady has seen a note from the Foundation Trust Network that was, I believe, circulated to all Members of the House and sets out six positive reasons why the private patient income cap has worked: it has allowed hospitals to build new units, to buy leading-edge technology, to extend mental health support, to offer fertility treatment, and to provide maternity services. There is also the fact that rental income is caught by the cap. There are some positive benefits in allowing private patients access to be treated by hospitals. In particular, at a time of financial crisis, bringing new technology into the NHS must be a good thing.

[Emily Thornberry]

I am grateful to the hon. Lady. I think that if we were to stop and walk away from party politics, we would be quite close on this matter. We do not have a problem with there being a cap; the problem is how it is implemented. I think that, deep down, she agrees with us. The difficulty is that her party wants to get rid of the cap completely, and that will have a completely different effect on the national health service. We are happy to sit down and talk to the agencies that will be affected and to make improvements in the working of the cap, but getting rid of it completely is behaving recklessly with our national health service.

[Nicky Morgan]

The misinformation and emotive language that has been used throughout the whole debate has been using patients at the heart of this. Everything we have heard so far on both sides of the House, perhaps prompted by the hon. Lady’s remarks, has been about how bringing in private patients is bad for the NHS. In fact there are some good aspects. I am pleased to hear that there can be some agreement between both sides of the House.

[Emily Thornberry]

That is why I have been relying on the Government’s impact assessment as perhaps the strongest part of my argument. I have also relied on what Professor Field has had to say. I would now like to turn to Baroness Williams, who wrote an article published on 4 September that I commend to the House, in which she says:

“One thing that remains…is the decision to lift the cap on private beds in foundation hospitals. Not only could that mean that many of our finest hospitals would gradually become private, it also means that inevitably foundation hospitals would be subject to European and British competition law.”

Many organisations and people agree with us on this, and that is why the House should pause and think about what we will be doing to the national health service if we accept this clause. I also pray in aid the Royal College of Nursing’s briefing, which Members who are closely following this debate will have read, in which it says that it is against the removal of the cap and does not believe that it will not have an effect on NHS patients’ access to health care. The BMA has said the same thing.

In essence, the argument is about whether we should have a cap or not. If the House votes tonight to lift the cap, our constituents will ask how it can be that their representative has voted for a clause that allows private patients to fill up the national health service hospital paid for by those constituents’ taxes so that they will be pushed out of it.

21:30

[Mr Simon Burns]

I am grateful to my hon. Friend the Member for Cornwall—I mean the hon. Member for St Ives (Andrew George)—for moving the new clauses and amendment, especially for the constructive and reasonable way in which he did so. He raised several issues and, if I understand him correctly, he sees the amendment as a probing amendment that also puts across several of his concerns about this issue. I hope to deal with the main thrust of his concern in my contribution.

I am also grateful to the hon. Member for Islington South and Finsbury (Emily Thornberry) for her contribution. Her amendment and indeed her comments were more controversial and I have far more disagreement with several of the contentious things that she said, although she will be unaware that I am saying that because she is not listening. She might argue that she is not missing much.

I shall start with a fact. It may have got lost in the telling, but I assume that the hon. Lady realises that there is no cap at the moment for NHS trusts. There is only a cap for foundation trusts. She has not seen the difficulties that she forecasts in NHS trusts, and I hope—although I am not confident of success—that I will convince her that her fears are unfounded.

The Government believe that keeping the cap would damage the NHS and patients’ interests. Removing it would allow foundation trusts to earn more income to improve NHS services, and I will address the safeguards that will be in place to ensure that the armageddon that the hon. Lady predicted will not happen and that my hon. Friend’s concerns are needless.

Removing the cap will enable foundation trusts to earn more money to improve NHS services, and those trusts are telling us that they must be freed from what is an unfair, arbitrary, unnecessary and blunt legal instrument. I do not want to go too far down memory lane, but I must remind the House that there was no intellectual case for bringing in the cap in the first place. It was introduced in 2002-03 in the relevant legislation as a sop to old Labour. The right hon. Member for Holborn and St Pancras (Frank Dobson) says that he has moved on, but he still has the Neanderthal tendencies of old Labour—[Interruption.] Before the Opposition Whip says anything, I should point out that the right hon. Gentleman takes that as a compliment. I am being very nice to him and probably enhancing his street cred. He would not thank the Whip for diminishing that.

The point is that the cap was not brought in after some coherent intellectual argument about protecting the NHS or preventing private patients from overrunning the NHS. It was brought in because the then Health Secretary, Alan Milburn, and the then Prime Minister, Tony Blair, were having considerable problems with some of their Back Benchers on this issue. To avoid a defeat on the Floor of the House, they brought in the cap as a sop to those Back Benchers to buy them off. But it was not introduced consistently for both NHS trusts and foundation trusts—just for the latter.

The cap is arbitrary and unfair. Several NHS trusts that are not subject to the private patient income cap have private incomes well in excess of many foundation trusts. Last year, four of the top 10 private income earners were NHS trusts—that is, without a cap. A few FTs have high private incomes simply because they did a few years ago. The cap locks FTs into keeping private income below 2002-03 levels and means that last year about 75% of FTs were severely restricted by caps of 1.5% or less. Meanwhile, patients at the Royal Marsden benefit from its cap being 31%, and it has consistently been rated as higher performing by the Care Quality Commission.

[Andrew George]

The Minister is making an interesting point. Will he elaborate further on the proportions of the private work to which he refers? Is that private work for private patients or private work for research, innovation and training, which are important functions of hospitals but are often lost in the debate?

[Mr Burns]

The hon. Gentleman raises an important point, but the simple answer is that it is a combination of both.

The cap is unnecessary. I remind Opposition Members that the original proposal was not to have one. To suggest that NHS patients would be disadvantaged if the cap was removed, as the hon. Member for Islington South and Finsbury did, is pure and simple scaremongering. Existing and new safeguards will protect them. NHS commissioners will remain responsible for securing timely and high-quality care for NHS patients. The Bill will make FTs more accountable and transparent to their public and staff, allowing us to require separate accounts for NHS and private income and giving communities and governors greater powers to hold FTs to account in performing their main duty, which is to care for NHS patients.

[Chris Leslie]

Will the Minister give way?

[Mr Burns]

No, because others want to speak.

I can assure the House that FTs will retain their principal legal purpose—to serve the NHS. This means that the majority of their income will continue to come from the NHS. With no shareholders, any profit they make will have to be ploughed back into the FT, and so will support that purpose of caring for NHS patients. The vast majority of FTs have little, if any, potential to increase private income, never mind the desire to do so. For them, NHS activity will remain the overwhelming majority of the work they do, if not all of their work. It is extremely unlikely that even the most entrepreneurial FTs with international reputations would seek to test the boundaries. Their commissioners, public and NHS staff governors would hold them to account in fulfilling their duties and serving their NHS patients.

For these FTs, however, the cap is a blunt instrument that harms NHS patients. FTs tell us that there is potential to bring extra non-NHS income into the NHS, for example, by developing the NHS’s intellectual property, from innovations such as joint ventures and by using NHS knowledge abroad. Additional demand and income can help organisations to bring in leading-edge technology faster, including in the important area of cancer treatment. I hope that that goes some way to helping my hon. Friend the Member for St Ives. Opposition amendment 1165 would harm the NHS, and new clauses 19 and 22 would stop FTs providing private health care altogether. Many of the other protections proposed would be almost as damaging and reduce income.

We want to ensure that safeguards are appropriate, not harmful. For example, a prohibition on FTs offering privately the same services that they offer on the NHS would rule out most of their current private health care. It could even create perverse incentives to stop providing some services for some NHS patients. We are confident that private income benefits NHS patients. On reflection, we are proposing to explore whether and how to amend the Bill to ensure that FTs explain how their non-NHS income is benefiting NHS patients. We will also ensure that governors of FTs can hold boards to account for how they meet their purpose and use that income. I believe that that is an important move forward.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Will the Minister give way?

[Mr Burns]

I hope that the right hon. Gentleman will forgive me, but I will not give way, because other hon. Members wish to speak and the debate finishes in 20 minutes.

To my mind, the private patient cap and the proposed new restrictions are both unnecessary and damaging. Indeed, I know that this will drive some Opposition Members potty, but the former Labour Minister responsible for the cap, Lord Warner, repented his sins in the other place, describing it as

“wrong and detrimental to the NHS.”—[Official Report, House of Lords, 12 May 2009; Vol. 710, c. 936.]

I urge Opposition Members not to repeat that mistake and to heed Lord Warner’s advice. I appreciate that the Opposition Benches are not full of champions of Lord Warner—particularly not at that end of the Chamber from which we heard the earlier comments about him—but he is a respected former Labour Health Minister and I would suggest that he knows what he is talking about.

Let me deal briefly with two final points that were made by the hon. Members for Islington South and Finsbury and for St Ives about the safeguards that are in place to offer protection and ensure that NHS patients would not lose out with the removal of the cap. First, the NHS commissioning board and clinical commissioning groups would be responsible for ensuring that NHS patients are offered prompt and high-quality care, and that good use is made of NHS resources, whoever provides care, through robust contracting arrangements. NHS patients will also maintain their right in the NHS constitution to start treatment within 18 weeks of referral. Secondly, as foundation trusts do not have shareholders and cannot distribute surpluses externally, and as their principal legal purpose will remain to serve the NHS, all proceeds from non-NHS work would be reinvested in the organisation, ultimately adding to the level and quality of the NHS service.

The Bill will make FTs more accountable and transparent to their public and NHS staff. Our commitment that FTs will produce separate accounts for their NHS and NHS private-funded services—as well as Monitor’s use of its regulatory powers to ensure a level playing field between providers—will also help to avoid any risk of NHS resources cross-subsidising private care, thereby protecting NHS money. I believe that those five safeguards will protect NHS patients and the NHS, and will not lead to the situation that the hon. Member for Islington South and Finsbury described in her speech.

[Emily Thornberry]

I do not mean in any way to suggest that the right hon. Gentleman does not believe what he has just said, but what if he is wrong? It is all very well for him to say, “We’re going to lift the private patient cap—we have these safeguards and I believe they’re sufficient to ensure that NHS patients won’t suffer,” and he may be right. However, the difficulty is that he may be wrong, so why are we taking this risk at a time like this? What is the point? What is the benefit?

[Mr Burns]

I do not think that this will come as a surprise to the hon. Lady, but I do not think that I am wrong, and I say that for the following reasons. First, there has never been a cap on NHS trusts, and the problems that she has speculated about during this debate have never occurred where there is not a cap. Secondly, the reasons that I have outlined would suggest to me that there will not be a problem, particularly as the one hospital that I singled out—the Royal Marsden—has an income cap of 30.7%. Nobody is suggesting that NHS patients are suffering as a result of that, and that is where a substantial income comes from non-NHS work. Finally, the five safeguards that I have highlighted will be powerful measures to ensure that what she describes will not happen.

For those reasons, I would be grateful if my hon. Friend the Member for St Ives did not press his new clause to a vote. I would also hope that, on reflection and having made her points, the hon. Member for Islington South and Finsbury will resist the temptation to press her amendment to a Division. I fear, however, that she is not going to heed my advice, and she will regret it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Four Members are seeking to catch my eye, and I should like to give the person who moved the new clause a couple of moments to speak. Members can do the arithmetic for themselves.

21:45

[Caroline Lucas]

New clauses 19 and 22 also have my name on them, and I should like to say a few more words in support of them as I have not been reassured by the Minister. I find it unacceptable that taxpayers’ money has ever been used to allow private patients to jump the queue and use NHS facilities. The history of the cap was all very interesting, but the bottom line is that it serves an important purpose, which is why it should stay. The Government argue that income from private patients is put back into the NHS and ultimately benefits the health service, but the reality is that when people become ill and need treatment, it is hard to justify asking them to wait longer because capacity in our NHS hospitals is being taken up by private patients. The bottom line is that an NHS hospital has to treat NHS patients, and I do not believe that we have adequate spare capacity sloshing about in the system to justify private queue-jumping.

Some Members will recall that foundation trusts were brought in after Alan Milburn visited the state-owned but privately run Fundación hospital in Madrid. The then Health Secretary was apparently impressed when he was told that the foundation hospital outperformed the Government-controlled hospitals. However, he ignored the argument put forward by the local unions that it was able to do so precisely because the more costly and difficult patients were sent to the fully public hospital nearby.

It is often argued that foundation trusts are about choice, but I would argue that such private treatment should be offered only when there is surplus provision in the system. It is one thing to talk about a choice of general goods and services, but it is enormously inefficient and massively costly to apply that mentality to the health service. Now, we see the present Government trying to use the model introduced by the previous one to allow foundation trusts to do as they please, and lifting the cap on the income that can be derived from private sources.

The hundreds of constituents who are contacting me about this do not want private queue-jumping; they want NHS services paid for from taxation. The future of the NHS should be about developing whole systems, not isolated institutions, and private health care in the NHS should be phased out. The NHS needs to be about building networks across professional and institutional boundaries, not about creating new barriers. It needs to be about IT and information sharing, not reducing connectivity, and about getting more people treated in the community and in primary care. The danger with this Bill is that it will do exactly the opposite and return us to the fragmentation of the time before the NHS.

[John Pugh]

I supported the amendment tabled by the hon. Member for Islington South and Finsbury (Emily Thornberry)—or, rather, I tabled it independently. I accepted at the time that it was not the most elegant way of dealing with the problem, but I recognise that there is a problem, as do foundation trusts. The cap as it stands has certain perverse consequences, and the NHS cannot fully profit from sources such as intellectual property. NHS profits help to subsidise public services. As the Minister has pointed out, there is no cap on non-foundation trusts, and the current format was to some extent a political compromise because Labour Members raised certain considerations during the passage of the legislation on foundation hospitals. That does not mean that their concerns were not valid at the time.

I am not concerned by the prospect of dramatic privatisation overnight; nor do I think that queue-jumping is the real danger. By abolishing the cap altogether, however, we run the risk that foundation trusts will run on the wrong side of state aid rules, and that their activity will be perceived as economic activity under EU competition law. The more they subsidise general NHS services, the more they will be perceived as engaging in economic activity.

I do not take a doctrinaire view on this issue. Very sensible people, such as Steve Field and the NHS Confederation, have raised the matter. The hon. Member for Leicester West (Liz Kendall) raised it, as did, if I recall correctly, the hon. Member for Islington South and Finsbury in a spirit of compromise in Committee, making the point—I think I am quoting her correctly—that the only alternative to a bad cap is not no cap at all.

There is a genuine fear, however, among people who are far more expert than most hon. Members in this field, which is caused by the blurring of the boundaries between public and private hospitals. We could end up theoretically with a private hospital that has 90% of its patients provided by the NHS. I know we cannot end up with an NHS hospital filled by 90% of private patients, but there is a threshold at which things could quite easily start to become complicated. This a critical issue, which will have to be dealt with in the House of Lords.

[Emily Thornberry]

The hon. Gentleman has quoted me, so let me clarify that I was quoting the Deputy Prime Minister when I said that the only alternative to a bad Bill was not no Bill at all. I was talking about a Bill as opposed to a cap.

[John Pugh]

I may not have paraphrased the hon. Lady correctly, but I believe that the sentiments I described were expressed by her in discussions of a particular amendment on this subject, but we can go and look at the Committee proceedings to find out whether I am right.

It seems to me that what has happened on this occasion is that the Secretary of State has rehearsed the arguments that we have already heard in Committee. That does not advance things massively. He has supplemented that by saying that better efforts should be made to explain how the cap operates by the foundation trusts themselves, which will be more accountable, as I think he said, to the governing body of the foundation trust. That is an explanation and good explanation is to be desired. The point is, however, that expert opinion—independent of this House— perceives this to be a problem, but it has not been addressed.

[Chris Leslie]

I intended to make only a short intervention, but given the Minister’s cap on interventions, I decided that I needed to find a brief opportunity to say that removing the private patient cap is the wrong thing to do. The Minister’s basic argument— “I do not think I’m wrong”—really does not cut it. Removing the cap will remove an incentive for reducing waiting lists. The two issues of waiting lists and waiting times and the degree of private business within the NHS cannot be separated: they go hand in hand.

In a sense, a bit of ancient history is required, because it is important to note that the previous Labour Administration reduced waiting times so much that many of the private health insurers were, frankly, complaining. Long waiting lists matter because they are also the lifeblood of the private medical industry. We need only look at the advertising slogans of many private medical insurers to see how they try to entice people with promises of “speedy service” and “getting your health situation sorted out quickly”. This, however, can happen in the context of NHS hospitals.

What we must do is ensure that we put the needs of NHS patients first. My worry about removing the private patient cap is that it changes the incentives relating to how the foundation trusts will work, putting revenue generation ahead of patient treatment. The allure of revenue will, of course, be there, but keeping waiting lists high is, in a sense, part of ensuring that revenue continues to come in. I want to see trusts focused absolutely and completely on reducing waiting times. That is incredibly important.

It has been interesting to hear some of the important points raised by some Government Members—and not just about state aid rules. To me, however, the issue of waiting times and, particularly, this Administration’s watering down of the targets set for them and the issue of removing the patient cap are two sides of the same coin. It is all about driving people to go in a direction that they often do not want to go. People might have some savings and feel they have no choice but to use them for private provision because of the fear of long waiting lists in future. That might be the only way people feel that they can get treated quickly. It is all part of the design to change the whole fabric and nature of the NHS. That is the wrong direction in which to head, and I hope that we can retain the private patient cap.

[Diana Johnson]

I support amendment 1165. Although I have a great deal of respect for the Minister, his comments did not persuade me. The proposal to remove the cap is an example of the shambolic way in which the Bill has been presented. There seems to me to be very little evidence to back up what the Minister thinks might happen. He thinks that everything will be OK, but the NHS has never been in the position of having to make £20 billion-worth of efficiency savings—or cuts, which is what they really are. I believe that when the cap is removed, trusts will want to increase the income that they can obtain from private patients. My hon. Friend the Member for Warrington North (Helen Jones) made the good point that when waiting lists lengthen—which we know they are already beginning to do—those who pay will do so in order to receive the medical treatment that they want.

After 1997, NHS waiting lists in Hull fell to their lowest ever level. A private hospital that sat in the middle of an NHS trust—it was then the Hull and East Riding acute trust—was sold to the NHS. It had not been getting enough business, because the NHS was doing so well. We have heard in today’s debate about the high level of support for the NHS and about the current high levels of satisfaction, and I do not think that we should take this step.

Earlier, I spoke of the lack of principles that the Liberal Democrats were exhibiting yet again in respect of the NHS. It was interesting to hear the hon. Member for Southport (John Pugh) say that he was not doctrinaire on the issue. So the hon. Gentleman has no principles, and is not doctrinaire either. I recall that, in 2010, the Liberal Democrats campaigned in my constituency on a platform of saving the NHS, not increasing the number of private patients. I think that when this measure reaches the House of Lords, Liberal Democrat peers must stand up and be counted, because it is a disgrace that Liberal Democrat Members should support it today.

My main concern relates to evidence. Where is the evidence that removing the cap will work? I do not think that the safeguards exist to ensure that NHS patients will be protected, and I know that waiting lists are rising, which means that people in my constituency, and in poorer parts of the country, will not be able to gain the access to health care that they deserve. I believe that removing the cap is entirely wrong.

[Andrew George]

It is a pleasure to follow the hon. Member for Kingston upon Hull North (Diana Johnson), but I do not think she did herself or her party any favours in trying to persuade my Liberal Democrat colleagues and me to follow her or her party’s lead by launching a completely unacceptable attack on my hon. Friend the Member for Southport (John Pugh).

The Minister seemed to be trying to win me over by describing me as “the hon. Member for Cornwall”. His description stimulated my Cornish imperialist tendencies, and I was tempted to change that to “Cornwall and bits of England”. However, I shall leave it for another Bill, perhaps one relating to boundary reviews.

In his response, the Minister said that the cap was a “blunt instrument”. I acknowledged that in my opening remarks: it is indeed a blunt instrument, which does not achieve what I think we all want it to achieve. However, although the current situation is not satisfactory, neither is the proposal to lift the cap. That too is a blunt instrument, as was made clear by many speakers this evening. I do not think the Minister entirely acknowledged that this is a conundrum that needs to be resolved. As I have said before, the Government are right to address the issue and are doing so with the best of intentions, but they have come up with the wrong answer. Indeed, lifting the cap is not an answer at all. Further work is needed, and deleting clause 168 would be a good start.

As I have said, mine are probing proposals. I will support amendment 1165, but I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

22:00

Proceedings interrupted (Programme Order, this day).

Mr Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 62

Conflicts between functions

Amendments made: 88, page 86, line 23, leave out from ‘sections’ to ‘transitional’ in line 24 and insert

‘117 and [Orders under section [Duration of transitional period] that apply to only some trusts] of this Act (imposition of licence conditions on NHS foundation trusts during’.

Amendment 89, page 86, line 27, leave out ‘116 and 117’ and insert

‘117 and [Orders under section [Duration of transitional period] that apply to only some trusts]’.—(Mr Simon Burns.)

Clause 116

Designation Of NHS Foundation Trusts During Transitional Period

Amendment made: 108, page 120, line 10, leave out Clause 116.—(Mr Simon Burns.)

Clause 117

Imposition Of Licence Conditions On Designated NHS Foundation Trusts

Amendments made: 109, page 121, line 7, leave out subsection (1).

Amendment 110, page 121, line 9, leave out ‘the’ and insert ‘an NHS foundation’.

Amendment 111, page 121, line 13, leave out ‘the designation expires’ and insert

‘this section ceases, by virtue of section [Duration of transitional period], to have effect in relation to the trust’.

Amendment 112, page 121, line 33, leave out subsection (7).—(Mr Simon Burns.)

Clause 168

Private Health Care

Amendment proposed: 1165, page 159, line 24, leave out Clause 168.—(Emily Thornberry.)

22:01

Division 338

Ayes: 239

---

Labour: 223
Democratic Unionist Party: 6
Plaid Cymru: 3
Liberal Democrat: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

Noes: 292

---

Conservative: 255
Liberal Democrat: 36

Clause 6

The NHS Commissioning Board

Amendment made: 404, page 3, line 36, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 7

Commissioning Consortia

Amendments made: 405, page 4, line 10, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

406, page 4, line 11, leave out ‘Commissioning consortia’ and insert ‘Clinical commissioning groups’.

407, page 4, line 12, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

408, page 4, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 10

Duties of consortia as to commissioning certain health services

Amendments made: 409, page 6, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

410, page 6, line 8, leave out ‘consortium’ and insert ‘group’.

411, page 6, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

412, page 6, line 13, leave out ‘consortium’ and insert ‘group’.

413, page 6, line 14, leave out ‘consortium’s’ and insert ‘group’s’.

414, page 6, line 16, leave out ‘consortium’ and insert ‘clinical commissioning group’.

415, page 6, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

416, page 6, line 21, leave out ‘consortium’ and insert ‘group’.

417, page 6, line 22, leave out ‘consortium’s’ and insert ‘group’s’.

418, page 6, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

419, page 6, line 35, leave out ‘consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 11

Power of consortia as to commissioning certain health services

Amendments made: 420, page 7, line 3, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

421, page 7, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

422, page 7, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 12

Power to require Board to commission certain health services

Amendments made: 423, page 7, line 31, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

424, page 7, line 39, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 14

Other services etc. provided as part of the health service

Amendments made: 425, page 9, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

426, page 10, line 1, leave out ‘consortium’ and insert ‘group’.

427, page 10, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

428, page 10, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

429, page 10, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

430, page 10, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

431, page 10, line 41, leave out ‘consortium’ and insert ‘clinical commissioning group’.

432, page 11, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 16

Regulations relating to EU obligations

Amendments made: 433, page 11, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

434, page 12, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

435, page 12, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 17

Regulations as to the exercise of functions by the Board or consortia

Amendments made: 436, page 12, line 13, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

437, page 12, line 16, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

438, page 12, line 18, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

439, page 12, line 19, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

440, page 12, line 22, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

441, page 12, line 29, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

442, page 12, line 35, leave out ‘consortium’ and insert ‘clinical commissioning group’.

443, page 12, line 41, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

444, page 12, line 44, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

445, page 13, line 2, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

446, page 13, line 6, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

447, page 13, line 9, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

448, page 13, line 16, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

449, page 13, line 25, leave out ‘consortium’ and insert ‘clinical commissioning group’.

450, page 13, line 33, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

451, page 13, line 34, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

452, page 13, line 37, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

453, page 13, line 38, leave out ‘consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 19

Exercise of public health functions of the Secretary of State

Amendments made: 454, page 14, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

455, page 14, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 20

The NHS Commissioning Board: further provision

Amendments made: 456, page 15, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

457, page 20, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

458, page 21, line 39, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

459, page 22, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 21

Financial arrangements for the Board

Amendments made: 460, page 25, line 9, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

461, page 25, line 11, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

462, page 25, line 13, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

463, page 25, line 22, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

464, page 25, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

465, page 25, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

466, page 25, line 40, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

467, page 25, line 43, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

468, page 27, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 22

Commissioning consortia: establishment etc.

Amendments made: 469, page 27, line 11, leave out ‘Commissioning consortia’ and insert ‘Clinical commissioning groups’.

470, page 27, line 12, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

471, page 27, line 13, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

472, page 27, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

473, page 27, line 20, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

474, page 28, line 6, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

475, page 28, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

476, page 28, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

477, page 28, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

478, page 28, line 16, leave out ‘consortium’ and insert ‘group’.

479, page 28, line 23, leave out ‘consortium’ and insert ‘clinical commissioning group’.

480, page 28, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

481, page 28, line 40, leave out ‘consortium’ and insert ‘clinical commissioning group’.

482, page 28, line 43, leave out ‘consortium’ and insert ‘group’.

483, page 28, line 44, leave out ‘consortium’ and insert ‘group’.

484, page 29, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

485, page 29, line 5, leave out ‘consortium’ and insert ‘group’.

486, page 29, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

487, page 29, line 18, leave out ‘commissioning consortium’s’ and insert ‘clinical commissioning group’s’.

488, page 29, line 20, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

489, page 29, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

490, page 29, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

491, page 29, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

492, page 29, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

493, page 30, line 1, leave out ‘consortium’ and insert ‘clinical commissioning group’.

494, page 30, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

495, page 30, line 6, leave out ‘consortium’ and insert ‘group’.

496, page 30, line 7, leave out ‘consortium’ and insert ‘clinical commissioning group’.

497, page 30, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

498, page 30, line 17, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

499, page 30, line 18, leave out ‘consortia’ and insert ‘groups’.

500, page 30, line 19, leave out ‘consortium’ and insert ‘clinical commissioning group’.

501, page 30, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

502, page 30, line 23, leave out ‘consortium’ and insert ‘group’.

503, page 30, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

504, page 30, line 34, leave out ‘consortium’ and insert ‘group’.

505, page 31, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

506, page 31, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

507, page 31, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

508, page 31, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

509, page 31, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

510, page 31, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

511, page 31, line 19, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

512, page 31, line 20, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

513, page 31, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

514, page 31, line 22, leave out ‘consortium’ and insert ‘group’.

515, page 31, line 24, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

516, page 31, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

517, page 31, line 31, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

518, page 31, line 33, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

519, page 31, line 34, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

520, page 31, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

521, page 31, line 37, leave out ‘consortium’ and insert ‘group’.

522, page 32, line 2, leave out ‘consortium’ and insert ‘clinical commissioning group’.

523, page 32, line 5, leave out ‘consortium’s’ and insert ‘group’s’.

524, page 32, line 8, leave out ‘consortium’ and insert ‘group’.

525, page 32, line 12, leave out ‘consortium’ and insert ‘group’.

526, page 32, line 15, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

527, page 32, line 19, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

528, page 32, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

529, page 32, line 29, leave out ‘consortium’ and insert ‘clinical commissioning group’.

530, page 32, line 34, leave out ‘consortium’s’ and insert ‘group’s’.

531, page 32, line 41, leave out ‘consortium’s’ and insert ‘group’s’.

532, page 32, line 42, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

533, page 32, line 44, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

534, page 33, line 2, leave out ‘consortium’ and insert ‘clinical commissioning group’.

535, page 33, line 36, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

536, page 33, line 48, leave out ‘consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 23

Commissioning consortia: general duties etc.

Amendments made: 537, page 34, line 6, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

538, page 34, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

539, page 34, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

540, page 34, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

541, page 34, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

542, page 34, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

543, page 34, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

544, page 35, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

545, page 35, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

546, page 35, line 15, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

547, page 35, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

548, page 35, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

549, page 35, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

550, page 35, line 31, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

551, page 35, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

552, page 35, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

553, page 36, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

554, page 36, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

555, page 36, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

556, page 36, line 38, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

557, page 36, line 40, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

558, page 36, line 42, leave out ‘consortium’ and insert ‘clinical commissioning group’.

559, page 36, line 46, leave out ‘consortium’ and insert ‘group’.

560, page 37, line 2, leave out ‘consortium’ and insert ‘group’.

561, page 37, line 7, leave out ‘consortium’ and insert ‘group’.

562, page 37, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

563, page 37, line 15, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

564, page 37, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

565, page 37, line 24, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

566, page 37, line 25, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

567, page 37, line 28, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

568, page 37, line 30, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

569, page 37, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

570, page 37, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

571, page 37, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

572, page 37, line 37, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

573, page 37, line 40, leave out ‘consortia’ and insert ‘groups’.

574, page 38, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

575, page 38, line 4, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

576, page 38, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

577, page 38, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

578, page 38, line 14, leave out ‘consortium’ and insert ‘group’.

579, page 38, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

580, page 38, line 17, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

581, page 38, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

582, page 38, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

583, page 38, line 25, leave out ‘consortium’ and insert ‘group’.

584, page 38, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

585, page 38, line 31, leave out ‘consortium’ and insert ‘group’.

586, page 38, line 33, leave out ‘consortium’ and insert ‘group’.

587, page 38, line 34, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

588, page 38, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

589, page 38, line 40, leave out ‘consortium’ and insert ‘clinical commissioning group’.

590, page 39, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

591, page 39, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

592, page 39, line 4, leave out ‘consortium’ and insert ‘clinical commissioning group’.

593, page 39, line 5, leave out ‘consortium’ and insert ‘clinical commissioning group’.

594, page 39, line 10, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

595, page 39, line 14, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

596, page 39, line 17, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

597, page 39, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

598, page 39, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

599, page 39, line 28, leave out ‘consortium’ and insert ‘group’.

600, page 39, line 31, leave out ‘consortium’ and insert ‘group’.

601, page 39, line 37, leave out ‘consortium’ and insert ‘clinical commissioning group’.

602, page 39, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

603, page 39, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

604, page 40, line 3, leave out ‘consortium’ and insert ‘clinical commissioning group’.

605, page 40, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

606, page 40, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

607, page 40, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

608, page 40, line 20, leave out ‘consortium’ and insert ‘group’.

609, page 40, line 23, leave out ‘consortium’ and insert ‘group’.

610, page 40, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

611, page 40, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

612, page 40, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

613, page 40, line 32, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

614, page 40, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

615, page 40, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

616, page 40, line 40, leave out ‘consortium’ and insert ‘group’.

617, page 41, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

618, page 41, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

619, page 41, line 6, leave out ‘consortium’ and insert ‘group’.

620, page 41, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

621, page 41, line 10, leave out ‘consortium’ and insert ‘group’.

622, page 41, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

623, page 41, line 20, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

624, page 41, line 22, leave out ‘consortium’ and insert ‘clinical commissioning group’.

625, page 41, line 24, leave out ‘consortium’ and insert ‘clinical commissioning group’.

626, page 41, line 32, leave out ‘consortium’ and insert ‘clinical commissioning group’.

627, page 41, line 38, leave out ‘consortium’ and insert ‘clinical commissioning group’.

628, page 41, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

629, page 41, line 43, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

630, page 42, line 3, leave out ‘consortium’ and insert ‘group’.

631, page 42, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

632, page 42, line 21, leave out ‘consortium’ and insert ‘clinical commissioning group’.

633, page 42, line 24, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

634, page 42, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

635, page 42, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

636, page 42, line 31, leave out ‘consortium’ and insert ‘group’.

637, page 42, line 35, leave out ‘consortium’ and insert ‘clinical commissioning group’.

638, page 42, line 37, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

639, page 42, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

640, page 42, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

641, page 43, line 1, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

642, page 43, line 2, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

643, page 43, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

644, page 43, line 6, leave out ‘consortium’ and insert ‘clinical commissioning group’.

645, page 43, line 8, leave out ‘consortium’ and insert ‘group’.

646, page 43, line 16, leave out ‘consortium’s’ and insert ‘clinical commissioning group’s’.

647, page 43, line 17, leave out ‘consortium’ and insert ‘group’.

648, page 43, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

649, page 43, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

650, page 43, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

651, page 43, line 43, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

652, page 44, line 1, leave out ‘consortium’ and insert ‘group’.

653, page 44, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

654, page 44, line 15, leave out ‘consortium’ and insert ‘group’.

655, page 44, line 16, leave out ‘consortium’ and insert ‘group’.

656, page 44, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

657, page 44, line 27, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

658, page 44, line 29, leave out ‘consortium’ and insert ‘clinical commissioning groups’.

659, page 44, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

660, page 44, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

661, page 44, line 35, leave out ‘consortium’ and insert ‘clinical commissioning group’.

662, page 44, line 39, leave out ‘consortium’ and insert ‘clinical commissioning group’.

663, page 44, line 40, leave out ‘consortium’ and insert ‘group’.

664, page 45, line 2, leave out ‘consortium’s’ and insert ‘clinical commissioning group’s’.

665, page 45, line 7, leave out ‘consortium’ and insert ‘clinical commissioning group’.

666, page 45, line 13, leave out ‘consortium’ and insert ‘clinical commissioning group’.

667, page 45, line 16, leave out ‘consortium’ and insert ‘clinical commissioning group’.

668, page 45, line 18, leave out ‘consortium’ and insert ‘clinical commissioning group’.

669, page 45, line 19, leave out ‘consortium’ and insert ‘clinical commissioning group’.

670, page 45, line 20, leave out ‘consortium’ and insert ‘group’.

671, page 45, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

672, page 45, line 25, leave out ‘consortium’ and insert ‘group’.

673, page 45, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

674, page 45, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

675, page 45, line 30, leave out ‘consortium’ and insert ‘group’.

676, page 45, line 32, leave out ‘consortium’ and insert ‘clinical commissioning group’.

677, page 46, line 3, leave out ‘consortium’ and insert ‘clinical commissioning group’.

678, page 46, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

679, page 46, line 23, leave out ‘consortium’ and insert ‘clinical commissioning group’.

680, page 46, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

681, page 46, line 43, leave out ‘consortium’s’ and insert ‘clinical commissioning group’s’.

682, page 47, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

683, page 47, line 9, leave out ‘consortium’ and insert ‘group’.

684, page 47, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

685, page 47, line 17, leave out ‘Commissioning consortia’ and insert ‘Clinical commissioning groups’.—(Mr Simon Burns.)

Clause 24

Financial arrangements for consortia

Amendments made: 686, page 47, line 18, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

687, page 47, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

688, page 47, line 22, leave out ‘consortium’ and insert ‘group’.

689, page 47, line 23, leave out ‘consortium’ and insert ‘group’.

690, page 47, line 25, leave out ‘consortium’ and insert ‘clinical commissioning group’.

691, page 47, line 27, leave out ‘consortium’ and insert ‘clinical commissioning group’.

692, page 47, line 32, leave out ‘consortium’ and insert ‘clinical commissioning group’.

693, page 47, line 33, leave out ‘consortium’ and insert ‘group’.

694, page 47, line 37, leave out ‘consortium’ and insert ‘clinical commissioning group’.

695, page 47, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

696, page 48, line 3, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

697, page 48, line 7, leave out ‘consortium’ and insert ‘clinical commissioning group’.

698, page 48, line 9, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

699, page 48, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

700, page 48, line 21, leave out ‘consortium’ and insert ‘clinical commissioning group’.

701, page 48, line 24, leave out ‘consortium’ and insert ‘clinical commissioning group’.

702, page 48, line 26, leave out ‘consortium’ and insert ‘clinical commissioning group’.

703, page 48, line 28, leave out ‘consortium’ and insert ‘group’.

704, page 48, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

705, page 48, line 34, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

706, page 48, line 36, leave out ‘commissioning consortium’s’ and insert ‘clinical commissioning group’s’.

707, page 48, line 37, leave out ‘consortium’s’ and insert ‘group’s’.

708, page 48, line 39, leave out ‘commissioning consortium’s’ and insert ‘clinical commissioning group’s’.

709, page 48, line 40, leave out ‘consortium’s’ and insert ‘group’s’.

710, page 48, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

711, page 49, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

712, page 49, line 8, leave out ‘consortium’ and insert ‘clinical commissioning group’.

713, page 49, line 12, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

714, page 49, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

715, page 49, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

716, page 49, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

717, page 49, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

718, page 50, line 20, leave out ‘consortium’ and insert ‘clinical commissioning group’.

719, page 50, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

720, page 50, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

721, page 50, line 27, leave out ‘consortium’ and insert ‘group’.

722, page 50, line 30, leave out ‘consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 25

Requirement for primary medical services provider to belong to consortium

Amendments made: 723, page 50, line 44, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

724, page 51, line 3, leave out ‘consortium’ and insert ‘clinical commissioning group’.

725, page 51, line 7, leave out ‘consortium’ and insert ‘clinical commissioning group’.

726, page 51, line 17, leave out ‘consortium’ and insert ‘clinical commissioning group’.

727, page 51, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

728, page 51, line 43, leave out ‘consortium’ and insert ‘clinical commissioning group’.

729, page 51, line 48, leave out ‘consortium’ and insert ‘clinical commissioning group’.

730, page 52, line 9, leave out ‘consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 36

After-care

Amendments made: 731, page 69, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

732, page 69, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

733, page 69, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

734, page 69, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

735, page 69, line 40, leave out ‘consortium’ and insert ‘group’.

736, page 69, line 44, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

737, page 70, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

738, page 70, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

739, page 70, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

740, page 70, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

741, page 70, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 41

Notification of hospitals having arrangements for special cases

Amendments made: 742, page 72, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

743, page 72, line 40, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

744, page 72, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 42

Role of the Board and consortia in respect of emergencies

Amendments made: 745, page 73, line 8, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

746, page 73, line 9, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

747, page 73, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

748, page 73, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

749, page 73, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

750, page 73, line 28, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

751, page 73, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

752, page 73, line 43, leave out ‘consortium’ and insert ‘group’.—(Mr Simon Burns.)

Clause 45

Primary care services: directions as to exercise of functions

Amendments made: 753, page 76, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

754, page 76, line 15, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

755, page 76, line 17, leave out ‘consortium’ and insert ‘group’.

756, page 76, line 22, leave out ‘consortium’ and insert ‘clinical commissioning group’.

757, page 76, line 25, leave out ‘consortium’ and insert ‘group’.

758, page 76, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

759, page 76, line 28, leave out ‘consortium’s’ and insert ‘group’s’.

760, page 77, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

761, page 77, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 58

General Duties

Amendment made: 762, page 84, line 9, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 70

Requirements as to procurement, patient choice and competition

Amendment made: 763, page 91, line 45, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 71

Requirements under section 70: investigations, declarations and directions

Amendments made: 764, page 92, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

765, page 92, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

766, page 92, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

767, page 92, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

768, page 92, line 45, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

769, page 93, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 72

Requirements under section 70: undertakings

Amendments made: 770, page 93, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

771, page 93, line 39, leave out ‘consortium’ and insert ‘clinical commissioning group’.

772, page 94, line 1, leave out ‘consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 101

Standard conditions

Amendment made: 773, page 109, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 102

Special conditions

Amendment made: 774, page 110, line 15, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 105

Modification of standard conditions

Amendment made: 775, page 112, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 106

Modification references to the Competition Commission

Amendments made: 776, page 114, line 45, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

777, page 115, line 5, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 107

Modification of conditions by order under other enactments

Amendment made: 778, page 116, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 109

power to require documents and information

Amendment made: 779, page 117, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 115

Notification of enforcement action

Amendment made: 780, page 120, line 1, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 123

Responses to consultation

Amendments made: 782, page 127, line 6, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

783, page 127, line 13, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

784, page 127, line 21, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 127

Local modifications of prices of designated services: agreements

Amendment made: 785, page 130, line 21, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 128

Local modifications of prices of designate services: applications

Amendment made: 786, page 131, line 9, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 129

Correction of mistakes

Amendment made: 787, page 131, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 144

Consultation

Amendment made: 788, page 141, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 191

Annual reports

Amendment made: 789, page 179, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 193

Scrutiny functions of local authorities

Amendments made: 790, page 180, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

791, page 180, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 195

Joint strategic needs assessments

Amendments made: 792, page 183, line 13, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

793, page 183, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

794, page 183, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

795, page 183, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

796, page 183, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

797, page 183, line 28, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

798, page 183, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

799, page 183, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

800, page 183, line 43, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

801, page 184, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

802, page 184, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 196

Joint health and wellbeing strategies

Amendments made: 803, page 184, line 15, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

804, page 184, line 16, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

805, page 184, line 19, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

806, page 184, line 22, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

807, page 184, line 27, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

808, page 184, line 33, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

809, page 184, line 39, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

810, page 185, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

811, page 185, line 8, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

812, page 185, line 11, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

813, page 185, line 20, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 197

Establishment of Health and Wellbeing Boards

Amendments made: 814, page 185, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

815, page 186, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

816, page 186, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

817, page 186, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

818, page 186, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

819, page 186, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 199

Other functions of Health and Wellbeing Boards

Amendment made: 820, page 187, line 31, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 203

Care Trusts

Amendments made: 821, page 189, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

822, page 190, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

823, page 190, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 237

Quality Standards

Amendment made: 824, page 225, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 253

Powers to publish information standards

Amendment made: 825, page 233, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 257

Powers to direct Information Centre to establish information systems

Amendment made: 826, page 235, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 283

Special notices of births and deaths

Amendment made: 827, page 247, line 14, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Clause 284

Provision of information by Registrar General

Amendment made: 828, page 247, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 286

Provision of statistical information by Statistics Board

Amendments made: 829, page 248, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

830, page 249, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 297

Advice or assistance to public authorities in the Isle of Man or Channel Islands

Amendments made: 831, page 254, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

832, page 254, line 42, leave out ‘consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Clause 300

Transfer schemes: supplemental

Amendment made: 833, page 257, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Schedule 1

The National Health Service Commissioning Board

Amendments made: 834, page 267, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

835, page 268, line 13, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Schedule 2

Commissioning consortia

Amendments made: 836, page 269, line 4, leave out ‘Commissioning consortia’ and insert ‘Clinical commissioning groups’.

837, page 269, line 6, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

838, page 269, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

839, page 269, line 10, leave out ‘consortium’ and insert ‘clinical commissioning group’.

840, page 269, line 11, leave out ‘consortium’ and insert ‘group’.

841, page 269, line 12, leave out ‘consortium’ and insert ‘group’.

842, page 269, line 13, leave out ‘consortium’ and insert ‘group’.

843, page 269, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

844, page 269, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

845, page 269, line 23, leave out ‘commissioning consortium’ and insert ‘group’.

846, page 269, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

847, page 269, line 29, leave out ‘consortium’ and insert ‘group’.

848, page 269, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

849, page 269, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

850, page 269, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

851, page 269, line 37, leave out ‘consortium’ and insert ‘group’.

852, page 270, line 1, leave out ‘commissioning consortium in the exercise of the consortium’s’ and insert ‘clinical commissioning group in the exercise of the group’s’.

853, page 270, line 3, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

854, page 270, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

855, page 270, line 19, leave out ‘consortium’ and insert ‘clinical commissioning group’.

856, page 270, line 28, leave out ‘consortium’ and insert ‘clinical commissioning group’.

857, page 270, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

858, page 270, line 41, leave out ‘consortium’ and insert ‘clinical commissioning group’.

859, page 271, line 6, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

860, page 271, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

861, page 271, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

862, page 271, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

863, page 271, line 15, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

864, page 271, line 16, leave out ‘consortium’ and insert ‘group’.

865, page 271, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

866, page 271, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

867, page 271, line 26, leave out ‘consortium’ and insert ‘clinical commissioning group’.

868, page 271, line 31, leave out ‘consortium’s’ and insert ‘clinical commissioning group’s’.

869, page 271, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

870, page 271, line 37, leave out ‘consortium’ and insert ‘clinical commissioning group’.

871, page 272, line 2, leave out ‘consortium’ and insert ‘clinical commissioning group’.

872, page 272, line 3, leave out ‘consortium’ and insert ‘group’.

873, page 272, line 5, leave out ‘consortia’ and insert ‘groups’.

874, page 272, line 6, leave out ‘consortia’ and insert ‘groups’.

875, page 272, line 7, leave out ‘consortium’ and insert ‘group’.

876, page 272, line 8, leave out ‘consortium’ and insert ‘group’.

877, page 272, line 9, leave out ‘consortia’ and insert ‘groups’.

878, page 272, line 10, leave out ‘consortia’ and insert ‘groups’.

879, page 272, line 11, leave out ‘consortium’ and insert ‘clinical commissioning group’.

880, page 272, line 12, leave out ‘consortia’ and insert ‘groups’.

881, page 272, line 13, leave out ‘consortium or any of the consortia’ and insert ‘group or any of the groups’.

882, page 272, line 16, leave out ‘consortium’ and insert ‘clinical commissioning group’.

883, page 272, line 17, leave out ‘consortia’ and insert ‘groups’.

884, page 272, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

885, page 272, line 31, leave out ‘consortium’ and insert ‘group’.

886, page 273, line 3, leave out ‘consortium’ and insert ‘clinical commissioning group’.

887, page 273, line 5, leave out ‘consortium’ and insert ‘clinical commissioning group’.

888, page 273, line 14, leave out ‘consortium’ and insert ‘clinical commissioning group’.

889, page 273, line 19, leave out ‘consortium’ and insert ‘clinical commissioning group’.

890, page 273, line 25, leave out ‘consortium’ and insert ‘clinical commissioning group’.

891, page 273, line 26, leave out ‘consortium’ and insert ‘clinical commissioning group’.

892, page 273, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

893, page 273, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

894, page 273, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

895, page 273, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

896, page 274, line 6, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

897, page 274, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

898, page 274, line 18, leave out ‘consortium’ and insert ‘clinical commissioning group’.

899, page 274, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

900, page 274, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

901, page 274, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

902, page 274, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

903, page 275, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

904, page 275, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

905, page 275, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Schedule 3

Pharmaceutical remuneration

Amendments made: 906, page 276, line 14, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

907, page 276, line 20, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

908, page 276, line 24, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

909, page 276, line 29, leave out ‘consortium’ and insert ‘clinical commissioning group’.

910, page 276, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

911, page 276, line 33, leave out ‘consortium’ and insert ‘group’.

912, page 276, line 35, leave out ‘consortium’ and insert ‘group’.

913, page 277, line 1, leave out ‘consortium’ and insert ‘clinical commissioning group’.

914, page 277, line 5, leave out ‘consortium’ and insert ‘clinical commissioning group’.

915, page 277, line 6, leave out ‘consortium’ and insert ‘group’.—(Mr Simon Burns.)

Schedule 4

Amendments of the National Health Service Act 2006

Amendments made: 916, page 277, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

917, page 278, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

918, page 278, line 12, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

919, page 278, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

920, page 279, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

921, page 279, line 19, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

922, page 279, line 39, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

923, page 279, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

924, page 280, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

925, page 280, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

926, page 280, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

927, page 280, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

928, page 281, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

929, page 281, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

930, page 282, line 12, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

931, page 283, line 6, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

932, page 283, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

933, page 283, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

934, page 283, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

935, page 283, line 34, leave out ‘consortium’ and insert ‘clinical commissioning group’.

936, page 283, line 36, leave out ‘consortium’ and insert ‘group’.

937, page 283, line 38, leave out ‘consortium’ and insert ‘group’.

938, page 283, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

939, page 284, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

940, page 284, line 12, leave out ‘consortium’ and insert ‘clinical commissioning group’.

941, page 284, line 14, leave out ‘consortium’ and insert ‘group’.

942, page 284, line 16, leave out ‘consortium’ and insert ‘group’.

943, page 284, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

944, page 284, line 34, leave out ‘consortium’ and insert ‘clinical commissioning group’.

945, page 284, line 39, leave out ‘consortia’ and insert ‘clinical commissioning groups’.

946, page 286, line 14, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

947, page 287, line 18, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

948, page 299, line 24, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

949, page 299, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

950, page 299, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

951, page 299, line 37, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

952, page 300, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

953, page 300, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

954, page 300, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

955, page 301, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

956, page 301, line 25, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

957, page 301, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

958, page 301, line 34, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

959, page 302, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

960, page 302, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

961, page 302, line 13, leave out ‘consortium’ and insert ‘clinical commissioning group’.

962, page 302, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

963, page 302, line 34, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

964, page 302, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

965, page 302, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

966, page 303, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

967, page 303, line 42, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

968, page 304, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

969, page 304, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

970, page 304, line 33, leave out ‘consortium’ and insert ‘clinical commissioning group’.

971, page 304, line 36, leave out ‘consortium’ and insert ‘clinical commissioning group’.

972, page 305, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

973, page 305, line 7, leave out ‘consortium’ and insert ‘clinical commissioning group’.

974, page 305, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

975, page 306, line 4, leave out ‘“commissioning consortium” means a commissioning consortium’ and insert ‘“clinical commissioning group” means a body’.

976, page 306, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Schedule 5

Part 1: amendments of other enactments

Amendments made: 977, page 307, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

978, page 307, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

979, page 307, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

980, page 307, line 30, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

981, page 307, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

982, page 307, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

983, page 308, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

984, page 308, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

985, page 308, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

986, page 308, line 40, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

987, page 309, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

988, page 309, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

989, page 309, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

990, page 309, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

991, page 310, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

992, page 310, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

993, page 310, line 41, leave out ‘“commissioning consortium” means a commissioning consortium’ and insert ‘“clinical commissioning group” means a body’.

994, page 311, line 17, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

995, page 311, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

996, page 312, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

997, page 312, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

998, page 312, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

999, page 312, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1000, page 312, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1001, page 312, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1002, page 313, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1003, page 313, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1004, page 313, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1005, page 314, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1006, page 315, line 4, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1007, page 315, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1008, page 315, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1009, page 315, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1010, page 315, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1011, page 315, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1012, page 316, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1013, page 316, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1014, page 316, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1015, page 316, line 21, leave out ‘consortium’ and insert ‘clinical commissioning group’.

1016, page 316, line 25, leave out ‘“commissioning consortium” means a commissioning consortium’ and insert ‘“clinical commissioning group” means a body’.

1017, page 316, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1018, page 316, line 46, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1019, page 318, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1020, page 318, line 18, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1021, page 319, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1022, page 319, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1023, page 319, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1024, page 319, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1025, page 319, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1026, page 320, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1027, page 320, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1028, page 320, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1029, page 321, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1030, page 321, line 6, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1031, page 321, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1032, page 321, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1033, page 321, line 19, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1034, page 321, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1035, page 321, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1036, page 321, line 40, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1037, page 322, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1038, page 322, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1039, page 323, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1040, page 323, line 11, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1041, page 323, line 28, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1042, page 323, line 32, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1043, page 323, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1044, page 324, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1045, page 325, line 23, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1046, page 325, line 27, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1047, page 325, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1048, page 325, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1049, page 326, line 8, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1050, page 326, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1051, page 326, line 29, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1052, page 326, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1053, page 327, line 6, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1054, page 327, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1055, page 329, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1056, page 329, line 15, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1057, page 329, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1058, page 330, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1059, page 330, line 9, leave out ‘consortium’ and insert ‘clinical commissioning group’.

1060, page 330, line 15, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1061, page 330, line 33, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1062, page 331, line 2, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1063, page 331, line 30, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1064, page 331, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1065, page 332, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1066, page 332, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

1067, page 332, line 25, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1068, page 332, line 31, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1069, page 333, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1070, page 333, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1071, page 333, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1072, page 333, line 23, leave out ‘consortium’ and insert ‘clinical commissioning group’.

1073, page 333, line 35, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1074, page 333, line 40, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1075, page 334, line 6, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1076, page 334, line 20, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1077, page 334, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1078, in schedule 22, page 334, line 42, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1079, in schedule 5, page 335, line 9, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1080, page 335, line 39, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1081, page 336, line 12, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1082, page 336, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Schedule 6

Part 1: transitional provision

Amendments made: 1083, page 338, line 3, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1084, page 338, line 6, leave out ‘consortium’ and insert ‘group’.

1085, page 338, line 8, leave out ‘consortium’ and insert ‘group’.

1086, page 338, line 13, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1087, page 338, line 14, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1088, page 338, line 15, leave out ‘consortium’ and insert ‘group’.

1089, page 338, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1090, page 338, line 20, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1091, page 338, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1092, page 338, line 38, leave out ‘consortium’ and insert ‘clinical commissioning group’.

1093, page 338, line 39, leave out ‘consortium’ and insert ‘group’.

1094, page 338, line 43, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1095, page 339, line 1, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1096, page 339, line 5, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1097, page 339, line 8, leave out ‘consortium’ and insert ‘group’.

1098, page 339, line 13, leave out ‘commissioning consortium under which the consortium’ and insert ‘clinical commissioning group under which the group’.

Schedule 22

Amendments relating to relationships between the health services

1099, page 408, line 28, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1100, page 411, line 21, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1101, page 412, line 5, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1102, page 412, line 9, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1103, page 412, line 18, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1104, page 412, line 27, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1105, page 412, line 33, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.

1106, page 412, line 38, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1107, page 414, line 16, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1108, page 414, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1109, page 414, line 26, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1110, page 414, line 36, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1111, page 414, line 41, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1112, page 415, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1113, page 416, line 34, leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Schedule 23

Property transfer schemes

Amendments made: 1114, page 417, line 10, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1115, page 417, line 29, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Schedule 24

Staff transfer schemes

Amendments made: 1116, page 419, line 7, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.

1117, page 419, line 22, leave out ‘commissioning consortium’ and insert ‘clinical commissioning group’.—(Mr Simon Burns.)

Title

Amendment made: 403, line 2 leave out ‘commissioning consortia’ and insert ‘clinical commissioning groups’.—(Mr Simon Burns.)

Bill to be further considered tomorrow.

Business without Debate

Tuesday 6th September 2011 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Environmental Protection

That the draft Landfill (Maximum Landfill Amount) Regulations 2011, which were laid before this House on 15 June, be approved.—(Mr Newmark.)

Question agreed to.

Mr Speaker: With the leave of the House, we shall take motions 5 and 6 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Construction

That the draft Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011, which were laid before this House on 27 June, be approved.

That the draft Construction Contracts (England) Exclusion Order 2011, which was laid before this House on 27 June, be approved.—(Mr Newmark.)

Question agreed to.

Northern Ireland Grand committee

Tuesday 6th September 2011 Commons Chamber

Ordered,

That—

(1) the matter of re-balancing the economy in Northern Ireland be referred to the Northern Ireland Grand Committee;

(2) the Committee shall meet at Westminster on Tuesday 1 November at 4.30 pm; and

(3) at that sitting–

(a) the Committee shall take questions under Standing Order No. 110 (Northern Ireland Grand Committee (questions for oral answer)), and shall then consider the matter referred to it under paragraph (1) above;

(b) the chair shall interrupt proceedings not later than two and a half hours after the commencement of proceedings on the matter referred to the Committee; and

(c) at the conclusion of those proceedings, a motion for the adjournment of the Committee may be made by a Minister of the Crown, pursuant to paragraph (5) of Standing Order No. 116 (Northern Ireland Grand Committee (sittings)).—(Mr Newmark.)

Metal Thefts (Electricity Industry)

Tuesday 6th September 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Newmark.)

22:16

[Graham Jones (Hyndburn) (Lab)]

I start by declaring an interest, as my partner and my son are employees of Electricity North West and it is her and her colleagues’ constant concerns that have drawn my attention to this very serious matter.

The increase in metal theft in the UK and elsewhere in the past few years has been alarming. Electricity North West has seen a 40-fold increase in thefts over the past 10 years and there is a growing body of opinion that those involved in organised crime, buttered by the benefits of high scrap prices for copper, aluminium and brass, have a free hand without disruption to steal, sell and profit.

The shocking figures speak for themselves. In 2009 there were about 100 reported metal thefts per month according to the Energy Networks Association, which represents the electricity and gas network and utility companies. Two years later, in 2011, that figure has risen to 700 thefts per month, and in one calendar month—March this year—it rose to a record 900 reported thefts. We can contrast that with March 2009, when there were around 70 thefts. That is an increase of more than 1000% in two years.

The Association of Chief Police Officers put the annual cost of metal theft to the communications, energy, transport and water industries at £770 million per annum. It is not just electricity that is being targeted, however. The Energy Networks Association and Electricity North West both believe organised crime is involved and thieves are stealing from telecommunications, gas and water infrastructure, rail and tramways, local authority street furniture, such as manhole covers and gates, housing, schools and other buildings. BT reported in October last year that it had had 900 cable theft attacks on its network in the previous six months, affecting more than 100,000 customers. Virgin Media says that the cutting of cables in Teesside alone has cost £166,000 and 1,700 stolen back-up batteries have cost the company a further £680,000. The British Transport Police estimate that over the last three years cable theft has cost the rail industry £43 million and led to more than 16,000 hours of delays. There is evidence that the theft of gates from railway stations is leaving rail networks dangerously exposed. Metal thefts affecting the supply of gas equipment have resulted in fires and explosions.

There is a human consequence to all these thefts. I visited Electricity North West and was told by staff that there is daily worry about people’s safety as a result of metal theft. Innocent children gain access to unsecure substations. Customers receive dangerous high voltages. There is danger to those illegally entering substations and a danger to staff undertaking routine maintenance.

Just over two months ago a 16-year-old boy died in an electricity substation. This happened in the course of an alleged theft of copper cable. According to the Energy Networks Association, there have been four such deaths so far and at least 50 injured. In June this year, many saw the BBC TV news item of a Leeds man with electricity cable burns from a 21,000 V strike from a live power line—burns so bad his own daughter did not recognise him in hospital. The impact blew part of his skull off, leaving his brain exposed. Leeds magistrates gave him a 12-month community service order for burglary.

The reality is that on a daily basis thefts are taking place against our national energy infrastructure across the UK. These are malicious and leave sites unsafe as well as causing disruption to the public and the economy. These thefts have led to 750 cases of loss of supply to at least 25,000-plus homes. Of these there were over 2,500 cases involving damage to customers’ TVs, computers and boilers as a result of the outages. In addition there have been 23 environmental incidents and at least 60 fires. A recent theft in Yorkshire cost local residents and insurers over £500,000 in broken electrical equipment and boilers as a result of a theft of just £40 of copper when customers’ voltage rose from 240 V to a dangerous 430 V.

In Castleford two houses blew up after the neutral wire was removed, resulting in a 430 V current in a cooker burning through a gas pipe. The incident was caught on video; it is lucky no one was home. Until this year, thefts had been mainly from substations, but Electricity North West, like elsewhere, has seen an increase in thefts of overhead line wires from the top of 30 metre pylons carrying 132,000 V. In one incident in Chadderton recently a business owner noticed that a power line had collapsed on to his roof when he arrived for work. The thieves had climbed up an electricity pylon and cut the wire. The thieves did this at two further pylons, managing to steal two 400-yard lengths of copper cable. The nearby Crown Business Centre at Failsworth has been hit five times by copper thieves this year, frequently leaving their telephone lines down. Nothing is stopping the thieves. Only days after the Chadderton theft, thieves struck in Middleton where National Grid discovered that another piece of copper cabling running between two tall pylons had been cut down.

In Accrington this week, thieves have even taken to stealing the brass locks from numerous substations leaving them accessible to inquisitive young children. Earlier this year, the theft of a £5 brass valve from an oil-filled transformer resulted in 30,000 litres of oil leaking out. Luckily, this was contained within the site, but if it had not been, it might easily have caused road accidents or damaged the local environment.

Every day ENW suffers theft. Some substations are robbed repeatedly, where even electrified fencing has failed to keep the thieves out. Only last month and for the first time, National Grid suffered the theft of the earth wire from one of the larger pylons carrying a 275,000 V power line. The anti-climbing guard was cut and the pylon was climbed in broad daylight. The earth wire was cut, fell to ground and was then cut up. That all requires specialist knowledge and cutting gear.

The earth wire could easily have fallen on to the live wires below, which could have disrupted the supply of electricity to in excess of 100,000 people. Had it been one of the largest pylons carrying 400,000 V, then this figure would have disrupted electricity supply to some 500,000 people.

Frankly, the police and the Home Office have not taken the issue seriously enough. The paltry amount of Government focus on metal theft and a lack of consistent police action across the country have quietly allowed serious organised criminal groups to muscle in on an increasingly lucrative trade. We are talking about the organised thieves with protected rounds who cruise my back alley each week—and other back alleys in Haslingden and Hyndburn—and expert criminals with know-how. The Government must take the issue seriously; I ask the Minister to consider it at the Energy Emergencies Executive Committee.

In March, two men were sentenced to 20 months for the theft of metal from two substations in Kent. The theft caused £125,000-worth of damage for copper that was estimated at less than £100 in value. The reality is that apprehension for metal theft is rare. If the thief is caught, the offence is punishable only under the Theft Act 1968. While most thefts do thousands of pounds-worth of damage, the law considers only the scrap value, which is a few pounds, and the result is usually just a community sentence, which is completely disproportionate to the consequences of the crime. Metal theft from Electricity North West’s network costs customers approximately £2 million a year.

The electricity and gas industry network companies can only do so much to address the problem. Safety remains their paramount concern. They are making infrastructure as secure as possible, but there are hundreds of thousands of individual sites. In the UK, companies and industries have attempted to deal with the issue by deploying various types of defence, including closed circuit television, forensic marking systems, improved building security, locking and fencing, including electrified fencing, which is used in my area.

Even close collaboration with the police, of the kind that takes place in Greater Manchester, has not stemmed the increase in theft. It appears simply to move the crime to another area, company or private property. It has proved almost impossible to prevent metal theft in a cost-effective way. No industry affected by such crimes has found an effective and enforceable system to deal with the receivers of the metals or deter the perpetrators. With copper prices at £6,000 per tonne, and sky-high aluminium prices, Electricity North West believes that the majority of the metal stolen from its network is either stolen to order and sold through poorly regulated scrap dealers, or bulked at a predetermined location and exported to overseas foundries.

At a recent visit to a reputable wholesale scrap metal dealer, Electricity North West found on site some of its equipment, which had been stolen and had entered the cash-only, no-questions-asked system. The UK is at risk from theft tourism, as our European counterparts are implementing robust regulatory systems governing how metals may be bought and traded. That means that organised crime may choose the UK as a soft option for metal theft. France and Belgium are implementing a process of cashless transactions for scrap metal, and other countries are beginning to address the problem. It is clear that current legislation is not fit for purpose. Even allowing for the redoubling of efforts by companies, metal theft continues to rise at an alarming rate.

There is overwhelming evidence that the Government need to focus on the supply chain, and to reclassify criminal deterrents so that the sentence fits the crime. There must be a focus on the people to whom the thieves sell their stolen metal; they are not always scrap metal dealers. As Electricity North West found out, we may be talking about a container collection point beside the motorway, for movement out of Hull sea port. It is therefore imperative that we close down all means of disposal of stolen metal, and do not just target scrap metal dealers.

So far, the Government have stood idly by, relying on legislation from the age of “Steptoe and Son”. They seem incapable of taking, or unwilling to take, reasonable steps to stamp out criminality and organised crime, despite the warm words of Baroness Browning. The Scrap Metal Dealers Act is from 1964. It imposes no obligation on scrap metal dealers to comply with the law; in fact, it does the opposite. Those who register under the Act can be visited by the police, while those who do not need be visited only if there is a reasonable suspicion that they have stolen metal on their site. That is ridiculous.

I call on the Government to consider making the following changes. They should amend the Scrap Metal Dealers Act 1964. Instead of the current registration scheme, the UK needs a robust licensing regime, with scrap metal dealers paying a licence fee to fund the regulation of the licence. Property obtained through theft should be regarded as criminal assets; that would allow the provisions in the Proceeds of Crime Act 2002 to apply. In line with alcohol licensing powers, police authorities should have the power to search and investigate all premises owned and operated by a scrap metal dealer, and to close scrap metal dealers where criminally obtained materials are discovered. We should restrict trade in scrap metals to cashless payments, and introduce a requirement that scrap metal must not be sold or processed until payments have been cleared. Photo identification and CCTV should be used to identify sellers of scrap and their vehicles. Magistrates should have powers to add licence restrictions and prevent closed yards from re-opening, and criminal gangs should be charged in a way that is proportionate to the consequences of the crime, not the scrap metal value. I ask the Minister to use all his efforts to ensure that something is done before it is too late.

22:29

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I congratulate the hon. Member for Hyndburn (Graham Jones) on securing the debate and thank him for the well researched, thoughtful and constructive way in which he addressed the subject. He has undoubtedly highlighted an issue that is growing in occurrence and severity, and he is right to say that more needs to be done. I hope to set out how we intend to go about dealing with it. I am grateful to the hon. Gentleman for raising the matter today.

In my response I shall focus on three things—the risks posed by metal theft to the electricity industry, what we are currently doing to tackle metal theft in the electricity industry, and how the Government propose to tackle the problem in the future. Let me be clear that the Government fully recognise the serious consequences of metal theft. This is not a victimless crime, as the hon. Gentleman made clear. As he said, a young teenager was recently killed attempting to steal copper cable from a substation in Leeds. That is a terrible thing for all concerned to deal with, and unfortunately was just one of several fatalities that occurred over the past year, along with countless injuries to the thieves themselves and the risk to engineers who are called out in the middle of night to make safe equipment that has been damaged.

It is not only those lives that are put at risk, but those of innocent householders whose appliances can be damaged or catch fire because of a metal theft in their area. The lives of our emergency services attending fires caused by metal theft are also at risk. I, too, was shocked to see the recent footage of a gas explosion at a house fire in Castleford on 8 July. It appeared to me that it was only by pure luck that the firefighters in attendance avoided death or at least serious injury.

Lives lost are not the only consequence of metal theft, as the hon. Gentleman pointed out. Across the energy sector, the main risks are disruption to electricity supplies affecting businesses, households and communities; risks to public safety, including through the loss of communications—999 calls, for example, loss of street lighting, traffic lights and safety-related equipment; and financial losses to businesses. Metal theft does not affect only the energy sector. For example, only this morning thousands of commuters from the south-east, including many from my constituency, were subjected to severe disruption when metal thieves stole 50 metres of signalling cable in the London Bridge area.

I understand that Network Rail has provisionally estimated that the cost of this incident is likely to run well into hundreds of thousands of pounds. Sadly, such thefts cause misery for thousands of commuters, cause damage to the economy and are out of all proportion to the value of the cable stolen. This evening I spoke to the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), about that mindless, irresponsible and utterly foolish attack on the rail network. We are like-minded in our resolve to take action to tackle the problem, and a meeting has already been convened for Ministers across Departments next week to discuss the issue and all its ramifications.

The hon. Gentleman mentioned an incident that occurred in July 2009 in the area around Dartford in Kent, where up to 100,000 properties were left without power as a result of a suspected attempt to steal metal from four 132 kV copper cables. The extent of the damage meant that it took EDF four days to restore supplies fully, causing widespread disruption to homes and local businesses. Ironically, though this incident cost hundreds of thousands of pounds in damage, compensation and goodwill payments, it is thought that no metal was actually stolen.

Owing at least in part to increasing commodity prices, the electricity industry continues to see an increase in the number of incidents of metal thefts experienced across its networks. Figures supplied by the Energy Networks Association, which hosts the security incident reporting system, show that the average number of incidents per month for 2010 was 440. By July this year, after only seven months of data, the electricity industry is experiencing on average 627 attacks every month.

The exact cost to the United Kingdom of metal theft is difficult to ascertain. There is significant under-reporting of incidents and it is not possible to identify and record every cost associated with an incident. In 2010-11, between 80,000 and 100,000 metal theft-related offences were recorded by police. Last year, the Association of Chief Police Officers estimated that the cost of metal theft to the United Kingdom was £777 million a year. The victims cover all sectors of the community, from power and communication supplies and the rail network to local communities, with church roofs and street furniture being stolen.

As we know, and as the hon. Gentleman rightly pointed out, metal theft is driven by a range of factors. Metal is a sought-after commodity, with prices increasing steadily. Current prices on the global exchanges put the value of copper at between £5,500 and £6,000 a tonne. The expectation is that commodity prices will continue to rise in coming years, so we can assume that the incidence of metal theft will continue to rise unless action is taken, which is what we are determined to do.

We take the issue very seriously. Through the security task force of the Energy Emergencies Executive, the Department of Energy and Climate Change and the electricity network operators meet regularly to discuss a range of security issues, and metal theft is a standing item on the agenda. The chair of the task force also represents the electricity sector at the Association of Chief Police Officers’ metal theft working group. Working with the Home Office, we have secured the inclusion of metal theft in its recently published organised crime strategy “Local to Global: reducing the risk from organised crime”, which shows that we share the hon. Gentleman’s view that organised crime is involved in this activity.

The inclusion of metal theft in the organised crime strategy will help to raise the profile of this increasing problem across several critical national infrastructure sectors, including energy, and increase the priority it is given by relevant enforcement agencies. The multi-agency ACPO metal theft working group, which is chaired by British Transport police, has developed a new strategy to tackle metal theft. The working group comprises members from across law enforcement, the utilities sector and Government Departments.

The new strategy covers four objectives: increasing the effort required to steal metal; increasing the risk to offenders; reducing the ease and rewards for offenders selling stolen metal; and increasing the risk for scrap metal dealers of handling stolen material. Progress is being made on a number of actions from this strategy, ranging from developing metal alternatives and considering how to make metals more difficult to steal, which is very much a longer-term action, to developing a more co-ordinated law enforcement approach and intelligence sharing across the utilities sector and police forces on a regional basis.

Although individual progress is being made by police forces and the electricity industry to tackle metal theft, we are conscious that more effort is required if we are to address this problem seriously across all critical national infrastructure sectors. The Government are looking at what more can be done. Discussions, led by the Home Office as the lead Department for crime prevention, are under way with a number of Departments, including DECC, to identify further options for tackling metal theft.

At the recent parliamentary event to which the hon. Gentleman referred, hosted by the Energy Networks Association, my noble Friend Baroness Browning set out the Home Office’s proposals for taking this work forward. This focused on a number of key areas. First, it focused on exploring the feasibility of introducing tighter regulations on the scrap metal industry in order to tackle the ready market for stolen metals. This includes, as he has asked, looking at modernising the Scrap Metal Dealers Act 1964, which does not reflect the current £5.6 billion scrap metal recycling industry. It will also include looking at amending and improving the existing scrap metal dealer registration regime.

[Graham Jones]

I appreciate the Minister giving way on this point and the fact that he is looking at amending the legislation. Will he indicate when he thinks legislation might be brought in to have an impact on scrap metal dealers, or give a time frame?

[Charles Hendry]

The first priority, as I am sure the hon. Gentleman understands, is to decide what are the best courses of action and determine what needs primary legislation and what can be done through secondary legislation. We are at the stage before that, but I hope that I am showing him that, with the new Minister, Baroness Browning, coming in, a great sense of urgency is being given to the sort of solution he has been highlighting.

Baroness Browning also spoke about closer links to environmental legislation and the licensing requirements for waste management and the need for more stringent identification requirements when selling metal, to identify both the seller and the owner of the material. The current regime requires little more than any name written down on the dealer’s records. The power to close scrap metal yards where there is clear evidence of sustained illegal activity is being considered, as is the possibility of moving away from cash as a method of payment for this industry, thereby removing the perceived easy access to cash. We are absolutely looking at the issue the hon. Gentleman has highlighted. If there are any other issues on the list he set out, I will ensure that they are on the agenda for the meeting so that we look at the full range of possible options.

[Jim Shannon (Strangford) (DUP)]

There seems to be an insatiable demand for scrap metal in other parts of the world. Like many others in the Chamber, I suspect that the metals are ending up in the far east. Does the Minister intend to have more stringent export controls?

[Charles Hendry]

Part of the purpose of looking at the issue as an organised crime activity is that it gives us a much greater ability to look at it internationally. The hon. Member for Hyndburn highlighted how action is being taken in other European countries, and there is certainly a need for an international co-ordination of approaches—better understanding and better information sharing—so that when things are happening through an international chain, we can pursue them and make sure that the relevant people are brought to justice in the most appropriate regime.

The Government have no desire to target or hinder the perfectly legitimate and valuable green economy work undertaken by the vast majority of law-abiding scrap metal dealers. However, elements of the industry are facilitating the theft of metals, and steps must be taken to shut such disposal routes.

I thank the hon. Member for Hyndburn for securing this important debate. I assure him and the House that the Government take the issue very seriously. We will be having the meeting next week, on a cross-departmental basis, and the issues that he has highlighted will be addressed then. As I have explained, we are determined to address the issue, which is causing massive inconvenience, great threats and a really serious challenge to people working in the industry.

Question put and agreed to.

22:41

House adjourned.

Petitions

Tuesday 6th September 2011 Petitions

Tuesday 6 September 2011

Consultation on Electricity Transmission in Somerset

Tuesday 6th September 2011 Petitions

The Petition of residents of Wells and others,

Declares that the Petitioners believe National Grid’s consultation on proposals to erect 152 feet high pylons is flawed; that the proposal would blight the beautiful unspoiled Somerset countryside; and further declares that the Petitioners accept that electricity transmission is essential but the Petitioners are concerned that National Grid is offering consultees a choice between two unacceptable routes, chosen by National Grid solely on the basis of cost, to the exclusion of other viable options such as undergrounding, under the Bristol Channel or along the M5 corridor.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to encourage National Grid to stop the current consultation into electricity transmission in Somerset and consider other viable options.

And the Petitioners remain, etc.—[Presented by Tessa Munt, Official Report, 18 July 2011; Vol. 531, c. 762 .]

[P000943]

Observations from the Secretary of State for Energy and Climate Change:

The Government recognise the importance of effective consultation taking place with the communities affected by proposed electricity network infrastructure projects. It is also important to note that new electricity network infrastructure projects will allow new generation to connect and add to the reliability of the national energy supply.

National Grid has a statutory duty under the Electricity Act 1989 to develop and maintain an efficient, co-ordinated and economical system of electricity transmission. Under the same Act it is also required to have regard to a range of impacts any of its proposals may have, and to do what it reasonably can to mitigate them.

The Planning Act 2008 makes extensive provision about the consultation which developers must carry out with local authorities, local communities and statutory bodies before making an application for new electricity network infrastructure. I am aware that local authorities and local people have responded to National Grid’s consultation on the Hinkley Point C connection project.

Decisions will be taken with regard to the energy National Policy Statements which set out national policy and typical impacts against which proposals for major energy projects will be assessed. In respect of electricity networks, in circumstances where visual impact of overhead lines is particularly significant developers are required to give consideration to alternatives including underground or subsea cables. Decision makers are required to take alternatives and other mitigation measures into account when examining and determining applications.

Subject to the Localism Bill receiving Royal Assent the IPC will be abolished in April 2012 and I, as the relevant Government Minister, will be responsible for determining the proposed National Grid Hinkley to Seabank grid connection application. It would therefore not be appropriate for the Government to intervene in this matter before National Grid’s application has been made and examined.

Ethiopia (Human Rights)

Tuesday 6th September 2011 Petitions

The Petition of Ethiopian refugees resident in Britain,

Declares that more than one third of Ethiopia’s budget consists of foreign aid; notes that Ethiopia has made progress towards achieving some of the UN Millennium Development Goals; notes that the Petitioners believe that there is a systemic disregard for human rights by the Ethiopian Government; and notes with concern the systemic violation of civil, political, social, economic and cultural rights enshrined in the Ethiopian constitution and guaranteed in UN conventions to which Ethiopia is signatory, in particular: detention without fair trial of political opponents and critics of the Government; politically motivated extra-judicial killings; routine torture and rape of detainees; crimes against humanity committed by Ethiopian forces in the Somali region and in Gambella, Southern Nations, Nationalities and Peoples’ Region; discriminatory distribution of state assistance, including internationally-funded aid; forced relocation of farmers and pastoralists for the benefit of local and foreign investors; restriction on the activities of civil society, and surveillance and harassment of refugees in the diaspora.

The Petitioners therefore request that the House of Commons urges the Government to withdraw unconditional political and financial support to the Ethiopian Government and to exert effective diplomatic pressure on the Ethiopian Government to: release or subject to fair trial by independent judiciary all political detainees; investigate and punish those responsible for the killing, torture and rape of perceived political opponents, and repeal or amend the Charities and Societies Proclamation and take positive steps to encourage independent civil society, democratic pluralism and a culture of respect for human rights in Ethiopia.

And the Petitioners remain, etc.—[Presented by Malcolm Bruce, Official Report, 19 July 2011; Vol. 531, c. 7P .]

[P000950]

Observations from the Secretary of State for International Development:

From a low base, Ethiopia’s growth and expansion of basic services in recent years have been among the most impressive in Africa. The Government of Ethiopia (GoE) is committed to growth and development, and is a proven partner in making rapid progress towards the Millennium Development Goals (MDGs). In the last five years, with substantial support from the UK and others, Ethiopia has: halved the incidence of malaria; deployed 32,000 more health extension workers; doubled the immunisation rate; rolled out an innovative social safety net to protect almost 8 million of the most vulnerable people; and put 4 million more children in primary school.

Over the next four years, UK aid will help 2 million children go to school, 1.4 million people gain access to water, and deliver 500,000 safe births. We will focus on the delivery of results for the poorest and most vulnerable people in Ethiopia, drive greater value for money for UK taxpayers and become more transparent in the way we work.

Ethiopia became a democracy in 1991, only 20 years ago. The Government of Ethiopia have made some progress towards a fully functioning democracy and increasing respect for human rights, but there is still a way to go. Improved political space in Ethiopia is vital to Ethiopia’s long-term stability and development. The UK Government believe that opening political space and ensuring vital human rights are protected can best be achieved through constructive, but honest, engagement with GoE, and not by withdrawing our support which we know is improving the lives of millions of poor and vulnerable Ethiopians.

Publically and privately, the UK has been at the forefront of advocating on a range of human rights issues in Ethiopia, including the release of opposition and civil society leaders in 2007. During visits in recent months, the Foreign Secretary, International Development Secretary and Parliamentary Under-Secretaries of State from the Department for International Development (DFID) and the Foreign and Commonwealth Office have raised democracy and human rights with Prime Minister Meles Zenawi. During the lead-up to the 2010 elections, we supported the media to provide a more neutral coverage, we initiated and funded a code of conduct, and issued clear and critical statements following the election. We also have a long history of support to improve justice and the standards in prisons.

The Government take very seriously all allegations of politically-motivated detentions, torture and extra-judicial killings. We have previously called on the Government of Ethiopia to allow an independent investigation into allegations of serious human rights abuses in the Somali Region, and continue to raise concerns about the restrictions placed on humanitarian access to this part of Ethiopia. We have lobbied, and continue to lobby, the Government of Ethiopia to adopt the Optional Protocol on the UN Convention against Torture, as well as seeking to ensure that the Convention is implemented in practice.

We are unaware of any cases of the Ethiopian diaspora in the UK being the subject of surveillance and harassment. Were such allegations found to be true, we would take swift and firm action with the relevant individuals and authorities.

We are in regular contact with human rights organisations, including Human Rights Watch, and take their concerns about aid to Ethiopia very seriously. When allegations of misuse of aid in Ethiopia were first made early last year, we took immediate action. Working with other donors, we launched a detailed study into the systems for delivering aid to some 60 million poor people in Ethiopia. That study, published a year ago, found that there were good safeguards for preventing distortion of aid, and made recommendations on how to further strengthen systems and safeguards and improve transparency and independent monitoring. We are now working with other donors and the Government of Ethiopia to put these recommendations into practice.

The UK Government currently support seven state institutions, including the Human Rights Commission and Anti-Corruption Commission, which are designed to underpin democracy, but are still relatively new and weak. At the same time, we also support independent, non-governmental organisations such as Justice for All-Prison Fellowship, Transparency International, and the Human Rights Institute at Addis Ababa University, which advocate on and directly support people’s political rights and access to justice. We plan to expand our support to civil society and democratisation significantly during the next few years.

DFID monitors the relocation of farmers and pastoralist communities under the Government of Ethiopia’s Commune Programme in Gambella, Somali, Benishangul-Gumuz and Afar regions. The programme is designed to increase access to services and strengthen the food security of voluntarily resettled communities. At this time, neither DFID nor the wider international community has received evidence or verified reports that resettlement has been forcibly implemented. However, we recognise the potential risks associated with the implementation of this plan and have engaged in the development of guidelines and principles for all relocations of communities. These guidelines emphasise consultation, compensation, redress and the centrality of a voluntary process in all resettlements across the country. They have been agreed with the Government of Ethiopia.

We share the concerns of many civil society organisations about the possible impact of the Charities and Societies Proclamation on the effective functioning of civil society across the country. In response, we are working with other donors to provide evidence-based advocacy to the Government of Ethiopia concerning the impact of this law, and are strengthening the capacity of the Charities and Societies Agency for constructive engagement with civil society.

Living Wage (Royal Household)

Tuesday 6th September 2011 Petitions

The Humble Petition of residents of London and others,

Declares that cleaners working for the Royal Households in London are paid £6.45 per hour even though the London Living Wage was set at £7.85 until April 2011; declares that cleaners in the House of Commons and House of Lords are paid at the rate of the London living wage; further declares that the Petitioners believe that as £30 million of taxpayer’s money is paid to the Royal family annually for the upkeep of the Royal Households it is clear that the London living wage of £7.85 is affordable.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to encourage the Royal Households to ensure that all cleaners working within the Royal Households are paid the London living wage of £7.85 per hour, a rate that is supported by the Mayor of London.

And the Petitioners remain, etc.,—[Presented by John McDonnell, Official Report, 19 July 2011; Vol. 531, c. 908 .]

[P000947]

Observations from the Chancellor of the Exchequer, Treasury:

The Government thank the hon. Member for Belfast South (Dr McDonnell) for his petition on the salaries of the cleaners who work for the Royal Household.

The Government acknowledge the hon. Member’s passion for ensuring that people working in London and elsewhere should be paid a living wage. Indeed he raised the issue for consideration as part of the Committee stage of the Sovereign Grant Bill, which was debated in the House of Commons in July of this year.

The Royal Household employs a contractor to supply cleaning services to the estates in London.

The Government fully support public sector contractors paying their staff fair and decent wages, subject to the constraints of efficiency and value for money for the taxpayer.

The Government take these issues seriously. However, it would be inappropriate for the Government to impose such constraints on specific contractors.

Westminster Hall

Tuesday 6th September 2011 Westminster Hall

Tuesday 6 September 2011

[Mr Gary Streeter in the Chair]

Bus Industry

Tuesday 6th September 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr Newmark.]

09:25

[Graham Stringer (Blackley and Broughton) (Lab)]

It is a pleasure to serve under your chairmanship again, Mr Streeter. It is now 25 years, a quarter of a century, since buses outside London were deregulated following the Transport Act 1985. We have a great deal of experience of what the implementation of the Act meant. By and large, it has been a very poor experience. It is sensible to call it a disaster for the bus-travelling public. In Greater Manchester, in the past 20 years, approximately 30% of the number of people who travelled by bus no longer do so. Bus deregulation has meant higher fares in real terms, a reduction in the networks and less reliability. It is not surprising, therefore, that the number of passengers has reduced.

I will not say that everything about bus deregulation has been awful—most of it has been. If I had to put a figure on it, it would be approximately 80%. A great deal of it has been bad. Bus deregulation has been successful on radial routes in major urban conurbations, where the service in peak times is often better than it was. The old transport authorities and county councils were guilty of having inflexible bus routes and of sending buses to where people lived 30, 40 or 50 years previously, before areas were demolished and rebuilt elsewhere. The commercial flexibility of the deregulated system has had some benefits, but overall the impact has been negative.

How does one disaggregate that from the natural trends in bus ridership in the past 25 years or so? Well, that is fairly easy because we have a precise comparison. When bus services were deregulated in the rest of England and Wales, they were not deregulated in London. Between 1986 and when the office of the Mayor of London was introduced in 1998, the regulated franchise system in London retained its passengers with very little subsidy. From the time of the election of Ken Livingstone in 1998, the number of bus passengers in London increased and the network became more extensive because a considerable increase in subsidy was put into the system. The period after 1998 does not offer an exact comparison, but the period between 1986 and 1998 offers a very good comparison. Bus passengers were retained in this city, but they were not retained elsewhere. The simple conclusion is that that is because of bus deregulation.

Behind all the statistics that I will use in my speech, there are real people. If people want to get a sense of the damage that has been done to individual lives by the loss of bus services—it affects family life and the ability to get into employment—I suggest that they read the recent Transport Committee report, “Bus Services after the Spending Review”. That report has example after example of people’s lives being blighted, their ability to obtain employment diminished and their ability to see their families reduced because bus services have disappeared.

I thank the officials at the Passenger Transport Executive Group, Sir Howard Bernstein, chief executive of Manchester city council, and his officials at Transport for Greater Manchester. They provided a lot of the statistics in this speech about transport in Manchester and transport nationally. Two thirds of all public journeys take place by bus, even after the reduction in numbers following deregulation. We are therefore talking about something that is important to many people’s lives, often the poorest people in our communities, and something that is vital to the economy.

My main point in this speech is that there will be cuts to an already reduced system. I do not want a sterile debate in which the Government say that it is all the fault of the previous Government that they are making cuts, and we on this side of the Chamber say that the cuts are too fast and too deep. Both those points have their place. What is interesting is that, because we are dealing with cuts to a deregulated system, it is possible to diminish the impact of those cuts by looking carefully at what are likely to be the recommendations of the Competition Commission, and by trying to use more effectively and directly the facilities in the Local Transport Act 2008. That is what I want to concentrate on.

To get some sense of the size of the impact of the cuts that are likely to happen, I will go through what the bus system is faced with. First, there is the 28% reduction in local authority grants, which will affect buses. Then there are changes in the formula for concessionary travel. Estimates on the impact that that will have on the bus system vary between £50 million and £100 million. The best estimate is approximately £77 million. From 1 April 2012, there will be a 20% reduction in the bus service operator grant. In passing, I say to the Minister that BSOG is not used in the most effective way. As a general grant to the bus industry it is fine—it helps. However, it would be better if it were given to transport authorities and passenger transport executives so that they could direct it to environmental improvements or particular enhancements to transport, rather than it just being given generally to bus companies.

Those are the three big areas where there will be cuts, but there is also the abolition of the rural bus grant and the 50% reduction for small and medium-sized public transport schemes from the integrated transport block. There will, therefore, be major changes and reductions in bus services in the coming years. PTEG has tried to estimate what will happen and its conclusions are pretty stark and frightening. It estimates that by 2014 fares will have gone up by 24%—nearly a quarter—in real terms, there will be a decline in service levels of 19%, which is nearly a fifth, and patronage will be down by about a fifth. That is in metropolitan areas, which is what is covered by PTEG.

According to the Transport Committee report, 70% of local authorities in non-urban areas have already cut their grants for buses and transport. My hon. Friend the Member for Hartlepool (Mr Wright) is present and I look forward to listening to his contribution later, but in Hartlepool 100% of the bus services subsidy has been removed, as is the case in Cambridgeshire, although I understand that that is currently subject to legal challenge. In Somerset, North Yorkshire, Shropshire and Northamptonshire, there have also been significant cuts, while in Luton and Peterborough there have been no cuts. The situation around the country is varied but, overall, it looks pretty bleak, given the PTEG projections for urban areas and the known cuts identified in non-urban areas by the Transport Committee.

Transport is a function devolved to local transport authorities but, I ask the Minister as the Transport Committee did, surely central Government have a responsibility, not to make local decisions but to know what is happening in every area, so that when the Government make decisions about their grants and where they spend their money, they can do so as accurately and effectively as possible, and that requires knowledge.

The Office of Fair Trading decided that it would refer the bus industry to the Competition Commission. There was already a great deal of evidence from Greater Manchester and other places that monopoly behaviour was effectively taking place. It has taken the competition authorities a long time to get around to looking into it. More than 10 years ago I wrote to the competition authorities and asked them to investigate—I was not the only person who did that—and they said, “Please produce written documentation of unlawful agreements between different bus operators.” Of course I could not do that—those documents would not be available to a Member of Parliament or anyone else, if indeed they existed—but by looking statistically at what is happening, we can see all the signs of real monopoly behaviour, and that is what the Competition Commission has found.

I will go through some statistics for Greater Manchester. In Oldham, for instance, 85% of the services are provided by First. In my own constituency the figure is about 67%, in Salford 77% and in the whole of north Manchester 70%. In south Manchester, we can see a mirror image of those figures, with Stagecoach monopolising: in Stockport it provides 82% of services, and in the whole of south Manchester about 74%.

My constituents suffer a real disadvantage in fare levels. I was told when I put my case to First that not many people buy the one-off fare, but that people buy weekly tickets. Even the weekly tickets bought from First by people in north Manchester are 47% higher—£17, compared with £11.50—than the price people pay in parts of south Manchester, where the average income is about £10,000 higher than for my constituents. So if they need to use buses, they are paying twice the percentage of their income on fares. Frankly, there is little on-road competition, which is what was originally intended to be the driver of better, more effective and more responsive services under bus deregulation.

Another indication of monopoly or anti-competitive behaviour is what in the system is called gaming the market, where bus companies use the fact that two different transport systems are in operation—the deregulated system, under which anyone can operate a bus service having given a small length of notice, and the subsidised, tendered services. In designed deregistration, the bus company is really saying, “We can make more money from this service, because it is an important service for the public, if we deregister it and then get the transport authority to tender it out.” Then, if it loses the tender, and a tendered service is running, the company reregisters the services, or parts of them, to undermine the subsidised service. An awful lot of such anti-competitive behaviour goes on.

As I said, the competition authorities were slow to get off the mark and to look at the area, but they have got off the mark, and credit to them for that. They have found that profits are much higher in the deregulated area than in London. In the past 24 hours Go-Ahead, for its out-of-London services, has just announced record profit levels of up to 10.4%.

[Mike Weatherley (Hove) (Con)]

The hon. Gentleman mentioned that anyone may enter the bus market, but does he agree that one of the faults of deregulation was that it did not create a perfect market? There are significant barriers to entry, even if one does not go through the subsidised route but sets up an independent service.

[Graham Stringer]

The hon. Gentleman makes a perfectly sound point, which I will come to in my conclusions. The large operators own the garages and can afford to subsidise competition if there are new entrants to the market—it is a long way from being perfect competition.

I was talking about the profits of Go-Ahead but the profits of Stagecoach are truly staggering, especially when the economy is flatlining and we have been in recession. They are up to £153 million from £126 million, which is an increase from 14.4% to 17.1%. In the friendly debates I have with Brian Souter of Stagecoach, he once called Gwyneth Dunwoody and me “dinosaurs” because we believe in going back to a sane system of regulated buses—he even set up little models of dinosaurs. I do not know how many people in the Chamber remember the film made of the James Clavell book, “King Rat”. When the Japanese prisoner-of-war camp in Singapore was liberated by allied forces, there was one very fat prisoner among all the other prisoners, whose ribs were showing—they were starving to death. At a time of austerity and the economy not doing well, Brian Souter and Stagecoach are the King Rats of the British economy, doing enormously well out of public subsidy when everyone else is struggling to get to work and make a living. They are, in effect, subsidy junkies.

The figures in the Transport Committee’s report show that the bus industry outside London receives from the fare pot about £1.8 billion in a total income of £3.4 billion, so 47% of the bus industry’s income comes from taxpayers. It is as simple as that. Whenever a bus leaves a depot, an average of 50% of its costs are paid by taxpayers. Given what has happened with deregulation, is that sensible use of taxpayers’ money? Are we receiving the best possible value?

[Mr Andrew Turner (Isle of Wight) (Con)]

The hon. Gentleman may not know that in my constituency there is only one bus company for the whole island, and there is no competition. What prevents large companies from competing in the parts of Manchester that he mentioned, where that seems not to happen?

[Graham Stringer]

I am the wrong person to ask, but my view is that companies do not compete because then they can exploit the market using informal agreements or in nods and winks, by putting up fares in their own areas without the cost of competing. The statistical evidence in their profits and fare levels is that they are exploiting the market compared with what happens in the London market. That is voluntary. Companies are happier operating in their own areas. They say that they do not like the extra dead mileage if buses must be driven into areas where other companies operate from their depots, but that is a weak argument. They simply do not want to compete because it is more profitable for them not to.

The making of high profits was the first major finding in the Competition Commission’s interim report. The second was that many operators face little or no competition. It is welcome that the commission finally got around to writing the report, but it is flawed in many ways, as such reports tend to be because they look at statistics over the past five years, but the economic world is now different and more difficult. They estimate that anti-competitive behaviour costs £70 million, but they do not include the cost when people abandon buses; if that were included the real cost to the public would be much higher. In addition, they do not look at how the current bus system inhibits the use of simple integrated ticketing, which would drive up the number of passengers using buses.

I have a few requests for the Minister. First, when the Competition Commission’s report is published and he is considering what to do about buses, will he bear in mind that there is a lot of information out there, but it has to be culled at great expense from surveys and other sources, because the bus companies keep much of their information private, despite receiving 50% subsidy? Good-quality information is vital for local transport authorities when planning their services.

My second request is for through-ticketing. We know what brings people back on to buses: a simple, low-fare structure with through-ticketing. It is estimated that if fares are cut by 20%, passenger numbers increase by 13%, with a further increase if the ticket structure is simplified with through-ticketing. What can the Minister do to help that?

My main question, which goes back to the beginning of my speech, is how can the Minister support and help to build on the powers and structures in the 2008 Act? I know that he understands the legislation thoroughly, because he and I served on the scrutiny Committee. There are many barriers facing South Yorkshire, West Yorkshire, and Tyne and Wear passenger transport authorities. They are considering moving back to a regulated system of quality contracts, because the buses, bus drivers and depots are in the hands of the bus companies, which have rubbished the Competition Commission’s interim report—well, they would—and are threatening a scorched earth policy for any passenger transport executive or authority that decides on re-regulation. What help can the Minister give those transport authorities?

Everyone knows that we are dealing with a coalition Government. The Minister’s views are well known from the time before he was a Minister, as are the Secretary of State’s. The Secretary of State is more of a free marketeer, and the Minister believes in the instruments in the 2008 Act, but when the bus industry is declining, the balance between the two parts of the coalition, resulting in a watching brief and agnosticism on the industry’s future, is not satisfactory. I should be grateful if the Minister told us his view.

My final point is that the present Government and Governments for the past 25 years have not done enough for the quarter to one third of people who do not have access to a car and rely completely on buses. One of the most appalling sarcastic comments made by the last Prime Minister, in response to a Birmingham Member who asked what he would do about the loss of a bus service in Birmingham, was that he would immediately call a Cabinet meeting. He said that sarcastically, but Cabinet Ministers should discuss bus services. They are vital for many millions of people in this country and they have been neglected or given too low a priority for long enough. I look forward to the Minister’s support in protecting and helping the bus industry at a time of inevitable cuts. That is possible.

09:58

[Mike Weatherley (Hove) (Con)]

I congratulate the hon. Member for Blackley and Broughton (Graham Stringer) on securing this debate. Although passenger numbers are on the decline throughout the country, I understand that buses remain the most popular form of public transport. Usage is on the increase in Brighton and Hove, which bucks the national trend.

In the city of Brighton and Hove, which includes my constituency of Hove and Portslade, we are fortunate to have a good bus service. We benefit from a network of many routes, frequent buses, and well-maintained bus shelters. I pay tribute to the managing director of Brighton and Hove Bus and Coach Company, Roger French, for his excellent management of the network in previous years. Increasingly, the company has been able to make use of new technology, such as real-time information screens at bus stops and smartcard readers on buses. While that is great news for residents of Brighton and Hove, I would argue that more competition is needed to protect the interests of bus passengers in future.

The Brighton and Hove Bus and Coach Company is owned by Go-Ahead, one of the five biggest bus service providers that together account for 69% of the country’s bus services. In areas such as my constituency, where one company operates over 95% of the public bus services, not much can be done when fare rises are proposed, as will happen later this month. Passengers cannot go elsewhere to get a cheaper ticket.

More competition would go some way towards maintaining best value for consumers and continuing to keep pressure on efficiencies. As the situation stands, however, the many barriers faced by new companies that are setting up bus services effectively restrict competition. Although in theory schemes are open to all companies that wish to take part, the costs of doing so are so prohibitively high that in practice they are open only to large companies that can afford to take part. A case in point is the real-time information system. Electronic display boards are now located on most bus stops in the centres of Brighton and Hove and provide real-time information about bus times. I have witnessed at first hand the system in operation at the Brighton and Hove Bus and Coach Company’s operational centre, and it is very impressive. The system is open to all bus operators, but only if they pay substantial costs for the on-bus radio system, transponders and any necessary back-office equipment.

Some charges levied on transport companies are implemented in a way that penalises small companies. Although some charges vary according to the number of vehicles a company operates, meaning that larger companies pay more, other charges are fixed irrespective of size. Such fixed charges mean that small companies effectively end up paying a higher proportion of their income than larger ones. Charges for the registration of a public service, for example, or an application for an operating licence or a transport manager’s certificate of professional competence, are the same regardless of the size of the company or the number of routes and buses involved, meaning that larger companies can absorb the cost more easily.

In my constituency, there is a small bus company called The Big Lemon that runs its buses on waste cooking oil from local restaurants. It has been beset by problems as a result of being a smaller company, to the extent that, as I understand, it has had to submit evidence to the Competition Commission and the Office of Fair Trading in order to protect its interests and, ultimately, to prevent it from being forced to cease operations. Fare increases have recently been announced by the Brighton and Hove Bus and Coach Company, and much has been made locally of the scale of those increases. In some places, fares will rise by as much as 20% and on most routes a return fare will cost as much as £4. However, on routes where The Big Lemon is in direct competition with the Brighton and Hove Bus and Coach Company, the fare will be only £2.50. That means that passengers in some parts of the city will pay 60% more than in other areas where competition has forced competitive pricing.

The Brighton and Hove Bus and Coach Company has stated that the fare increases are being introduced to reflect the rising price of fuel. However, as the managing director of The Big Lemon, Tom Druitt, pointed out, fuel does not cost more on different routes, and the difference in price seems designed to stamp out the competition represented by the smaller company. The Big Lemon also encountered a barrier to extending competition in the city when it attempted to join the quality bus partnership. As I understand it, that partnership is an informal agreement between the Brighton and Hove Bus and Coach Company and the council, and is not open to other companies or routes at present. The Big Lemon has also encountered difficulties in publicising information and timetables. It found that priority for such matters was given to the Brighton and Hove Bus and Coach Company, with the main information about fares and timetables on the council’s website referring to services provided by the larger company. Smaller providers are mentioned and a link to their websites is provided, but the main emphasis is on the Brighton and Hove Bus and Coach Company. That situation could easily be rectified at no cost to the taxpayer, and it would encourage competition.

The attitudes and actions that I have mentioned are obstacles to increasing competition. If one small company has encountered such difficulties, how many more companies are experiencing problems around the country? Bus companies that benefit from large Government subsidies naturally have an advantage that small start-up companies do not have. In my constituency and across the city, the Brighton and Hove Bus and Coach Company receives a large subsidy from the city council—money that would make a huge difference to small operators such as The Big Lemon. There is a compelling argument that we should encourage the distribution of subsidies on so-called loss-making routes towards new, smaller, innovative companies, thereby increasing competition and benefiting passenger choice and transport quality in Brighton and Hove and beyond. As councils do not have direct control over the fares levied by bus companies, that is one way in which greater competition in bus services could be encouraged.

As mentioned earlier, there are other ways in which the council could assist in making the market more competitive such as providing fair website information and the quality bus partnership scheme. In summary, I would like to see measures implemented that are focused on delivering sensible competition and a code of practice that would put new operators on a level playing field, thereby reducing barriers to entry in the market.

10:04

[Mr Iain Wright (Hartlepool) (Lab)]

Let me begin by saying what a pleasure it is to serve under your chairmanship, Mr Streeter. May I congratulate my hon. Friend the Member for Blackley and Broughton (Graham Stringer) on securing what I think is an important debate? He was kind enough to mention my constituency in his opening remarks, and I think that the example of Hartlepool and its bus users provides an almost perfect case study to illustrate why competition in the bus market is not working.

I would not disagree with the notion of competition in the bus market if it resulted in wider choice and a better-quality service for passengers. We would all agree that in an ideal situation, competition should keep operators on their toes, as they would be mindful of rivals securing a greater share of the market and would offer a more comprehensive service, a better fare and ticketing structure, more punctual journey times and more modern vehicles.

The situation in my constituency, however, is particularly frustrating because Hartlepool has all the ingredients for a good and comprehensive bus service. It is a relatively compact town; there are outlying villages, which I will mention in a moment, but at its heart is an urban centre just 2 miles wide and 5 or 6 miles long. Travel is self-contained and most journeys in Hartlepool take place within that urban centre, which therefore lends itself to a rapid, reliable, co-ordinated and integrated public bus transport system. About 40% per cent of households in my constituency do not have regular access to a car, which feeds into the need for a comprehensive public transport service to avoid isolation for many of my constituents.

Further afield, Teesside university in nearby Middlesbrough, the petrochemical and process industry cluster in Wilton, and the new logistical and distributional commercial opportunities at Teesport could mean that many of my constituents would have access to better employment rates and opportunities to participate in higher education if those places were connected by better public transport links. My constituency would benefit in every possible sense. From my experience in Hartlepool, however, it is clear that no effective market is in operation. My hon. Friend the Member for Blackley and Broughton touched on that with an example from Greater Manchester, and I will discuss that point in more detail later.

Bus services are dominated by one provider, Stagecoach, which has a significant share of the wider UK bus market. Such dominance has led to inefficiencies and distortions in the market—that is true not only in my constituency but, as we have heard, across the country. My hon. Friend quite rightly mentioned the profits made by Stagecoach, and it is worth reiterating that point. For the year ending 30 April 2011, Stagecoach made operating profits of about £200 million. Over three quarters of that operating profit—some £153.1 million—was generated solely through its UK bus operations. The profit margin of its UK bus division was 17.1%, as opposed to a 6.5% profit margin for its north American operations and 4.5% for its UK rail division. In its annual report Stagecoach states—boasts—of “sector leading profit margins” within its UK bus operations.

How was that allowed to happen? The answer is contained in the company’s annual report. Its operating and financial review states that its business model for its UK bus operations in the regions is based on an

“emphasis on lightly regulated bus operations enabling management to vary prices, operating schedules and timetables in response to developments in each local market—”

and this is the key phrase—

“without significant hindrance from regulation.”

It is therefore clear that Stagecoach seeks to cherry-pick profitable routes and discards socially or economically vital services the moment the taxpayer fails to take the risk on its behalf and subsidies are ended. The company is able to do so without the hindrance of an effective regulatory regime that could insist that such services are maintained for the good of the community.

The business model boasted about in the annual report is shown to be true when one looks at my constituency. As I said earlier, Stagecoach is by far the most dominant bus operator in Hartlepool. Arriva and Go North East provide a small number of services that travel in and out of the constituency, but in the main Stagecoach has a monopoly on the market, with about 80 % to 85% of market share.

The bus market in my constituency is striking for the absence of medium-sized bus companies. It has been difficult, as we have heard in relation to other places, for small and new entrants to the market to gain ground. Promising new entrants such as Tees Valley Coaches have provided some new routes, but have found it difficult to gain a foothold in the market and are now pulling back from providing routes.

A far too dominant player in the market has ensured that there is no incentive to improve services. Punctuality is poor. The traffic commissioner’s target is that 95% of buses should be on time. In Hartlepool, that figure is 81%. As my hon. Friend the Member for Blackley and Broughton said, ticketing arrangements, too, undermine choice and competition. In my constituency, Stagecoach operates a ticket discount scheme, but it is available only for Stagecoach services, rather than bus services across the town. Passengers are dissuaded from using other operators—of which they have only a limited choice—because of the additional cost of buying yet another ticket.

Most damning of all—my hon. Friend kindly mentioned this—is the abrupt cancellation of services, which leaves my constituents without access to transport. Hartlepool borough council faces cuts in its budget from central Government of about 25%, and it has decided to stop all subsidised services. That means that there are in effect no bus services in my constituency after 6 pm or on Sundays. Some outlying areas of my constituency—villages such as Elwick or Dalton Piercy, as well as the central area of the Burbank estate—now have no bus service whatever, which has left residents in those areas completely isolated.

The recent report by the Select Committee on Transport, “Bus Services after the Spending Review”, cites many comments from residents of my constituency. Miss Raw, for example, says that the bus service from Elwick to Hartlepool has been withdrawn, leaving the village completely cut off from Hartlepool. She states:

“I do not drive and therefore am finding it very difficult to shop for essentials, visit doctors, dentists, opticians, banks, hospital visits etc. Also I no longer visit friends, go to the theatre, or cinema, especially in the evening. In fact we are completely isolated.”

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that whatever one’s general view on the bus deregulation of the 1980s, the one thing that we know is that it was an unmitigated disaster in villages and very rural areas, as buses were reduced either to a highly limited service or, in many cases, withdrawn altogether? That compounded the problem of rural poverty, which is often not addressed in an urban environment.

[Mr Wright]

My hon. Friend makes an important point, and my hon. Friend the Member for Blackley and Broughton referred to the same issue. Economic activity is very much contingent on the availability of good transport and connectivity. Concerns have been raised with me both by constituents living in the urban part of Hartlepool and by constituents living in outlying areas, who say that they cannot take up a job because they cannot get to the place of work as a result of the absence or removal of the bus service.

Another of my constituents cited in the Select Committee report is Mrs Powers, who states:

“Since the removal of the bus service my daughter…has NO way of getting to and from college…Is she surely not entitled to the education she deserves? My daughter works very hard and gets excellent grades and I feel appalled that her future education is being jeopardised in this way!”

It is important to mention the importance of access to education in rural areas. My hon. Friend the Member for Clwyd South (Susan Elan Jones) will be concerned about that as well.

It is clear that competition in the bus market in Hartlepool has failed. Deregulation since the mid-1980s has not proved to be a success. The market is characterised by too dominant a player, making excessive profits by cherry-picking the busy and popular routes and ensuring that passenger choice is left behind. For those services that remain, punctuality rates are behind what should be expected, because operators do not fear that another company might come along and provide a better service that takes away their market share.

[Mr Andrew Turner]

It is not the case that things have been tested and found to fail—they have not been tested. We have to try the competition route, which should be given the chance to work under the new system. We have to make it work, rather than pretending that it has already happened and been found to fail.

[Mr Wright]

The hon. Gentleman makes an interesting point, but I would suggest that we have had more or less the possibility of open competition and certainly deregulation since the mid-1980s. I accept the point that perhaps that has not meant free and open competition and there may be barriers to entry because of the structure—the way in which the legislative framework has been put in place. However, looking at the examples from my constituency, I would suggest that there has been market failure and, as a Labour politician, I would suggest that where there is market failure, the state should intervene. The hon. Gentleman and I will possibly disagree in our analysis of the reasons for that, but certainly we would agree that there has been market failure. I will ask the Minister, in trying to respond to the issue of market failure, to consider a number of things.

[Graham Stringer]

I acknowledge the weight of my hon. Friend’s remarks. Does he agree that where serious competition has taken place in Glasgow, Edinburgh, Preston and Manchester, where bus companies have set about competing with one another and where, in the short term, bus fares have dropped and there has been a conveyor belt of buses, the consequences have been worse congestion and pollution and then one bus company withdraws?

[Mr Wright]

That is one of the fears because of the way in which the bus market currently operates, with the dominance of four or five big players in the market. They have the bargaining power and, frankly, the cash to be able to hound smaller operators out of business. For example, in the north-east a number of years ago, a new and ambitious operator wanted to come into the market, but the big dominant operator of the time, which was Stagecoach, hounded it out by providing zero fares—free fares—at certain times. Stagecoach had the cash flow to be able to do that, so there is market failure, with domination by big players.

I hope that the Minister will respond to a number of points. I urge him to be bold when considering the Competition Commission’s report on bus services. He needs to examine why there has been so little take-up of the quality contract partnerships introduced by the previous Government. I urge him to undertake further work to see whether such partnerships need to be made easier to operate and enforce. To help with that, the Minister should consider whether franchising of local bus services within an area such as Hartlepool could provide a better quality of service and ensure that local authorities can determine the priorities on behalf of their residents. The Government need to be bold and radical for the good of passengers in Hartlepool and elsewhere. I strongly believe that they should re-regulate the market to ensure that local bus services are run for the benefit of passengers and communities, rather than purely for shareholders.

10:17

[Andrew Gwynne (Denton and Reddish) (Lab)]

I congratulate my hon. Friend the Member for Blackley and Broughton (Graham Stringer) on securing this very important debate, as I know that he has taken a keen interest in these issues for a number of years. I welcome the chance to contribute to the debate from the Opposition Front Bench. It is a pleasure to see you in the Chair, Mr Streeter.

On the specific issue of competition in the bus industry, we need to examine the deregulation of the buses to understand how we have ended up with the current situation. As my hon. Friend outlined, it is now 25 years—almost to the day— since the deregulation of the bus industry outside London. Of course, in London, Transport for London, which is accountable to the Mayor, specifies in detail which services are provided. It decides the routes, timetables, fares—everything down to the colour of the buses. The services themselves are operated by private companies through a competitive tendering process, but there is no on-road competition.

In the rest of the country, such as in the Greater Manchester constituencies that my hon. Friend and I represent, there is, in theory at least, a free market, so anyone can start up a bus service as long as they meet minimum safety and operating standards. Bus operators are practically free to run whatever services they like, charge whatever fares they like and, as we saw with the UK North debacle in Manchester, use whatever vehicles they like. Monitoring and regulation of reliability and vehicle cleanliness is largely minimal. Although it is supposed to be a competitive market, the majority of services are provided by just a few bus companies. As my hon. Friend correctly outlined, the vast majority of commercial services in my south Manchester constituency are operated by Stagecoach, in contrast to his north Manchester constituency, where the predominant provider is First. Local authorities will fill the gaps where there is an inadequate commercial service, and such local authority-funded routes are operated by private companies through a competitive tendering process.

My hon. Friend was right to raise concerns about how some of these big companies play the deregulated system. In 2004, before I came to the House, I was a local councillor on Tameside metropolitan borough council. Just before the general election in 2005, Stagecoach Manchester removed the well-used 375 bus service, which used to link Stepping Hill hospital in Stockport, Stockport town centre, Denton, Ashton town centre and Tameside general hospital. That service between the two district general hospitals was an important link for the communities along the route.

The route was commercially viable, making about £50 a week profit, but it was never going to make Stagecoach Manchester a lot of money. Nevertheless, it was a commercial service, it was commercially viable and it made a profit, albeit at the margins. However, Stagecoach decided to withdraw the service to the two district general hospitals, so that the route went only to Stockport and Ashton. Anyone who wanted to go to the hospitals had to get on another bus at Stockport bus station or Ashton bus station.

Stagecoach then decided to split the new service in two. The 375 became the 317A and the 317B. In the middle of the route, people had to get off one bus and wait for the next one to arrive. That made the service non-profit-making overnight. There was no change to the route, but splitting it in two meant that it was not commercially viable. Stagecoach therefore went cap in hand to the Greater Manchester passenger transport authority for not one public subsidy, but two. That highlighted loud and clear how Stagecoach Manchester played the system, turning a service that was profit-making—albeit marginally—into two subsidised services, which is outrageous.

Across the country, the picture on deregulation is mixed. In some areas, services have undoubtedly improved, as we heard from the hon. Member for Hove (Mike Weatherley), and some bus companies have invested in new bus fleets. In many areas, however, it is fair to say that deregulation over the past 25 years has resulted in a much worse service, which costs taxpayers and passengers alike much more. Figures produced by the Passenger Transport Executive Group on behalf of the passenger transport executives in the six metropolitan conurbations outside London show that bus fares have increased by 94% in those areas in the years since deregulation, while the number of those using buses has fallen by 46%. In some PTE areas, the decline has been even greater, with ridership down by 65% in South Yorkshire since deregulation.

Deregulation has had a number of other negative knock-on effects. It is much harder for local authorities to put in place long-term bus networks or to properly integrate bus services with other transport modes, such as rail and light rail, particularly where those services are operated by competing businesses, as in north Manchester, where, until recently, the trams were operated by Stagecoach and the buses were predominantly operated by First. As my hon. Friends have said, deregulation also makes it much more difficult to provide a competitively priced multi-modal ticketing system like the London Oyster card.

One of the more worrying aspects of the changes is the effect on socially necessary bus services, as we heard from my hon. Friend the Member for Hartlepool (Mr Wright). There has been a gradual reduction in off-peak and lifeline estate services, with more focus on more profitable major bus routes. In a market-driven environment, commercially driven bus operators will of course concentrate more on the more profitable commuter routes and less on socially necessary services. With the scope for cross-subsidy removed, the cost of the diminishing subsidised network has increased massively—

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

It is 10.24.

[Mr Gary Streeter (in the Chair)]

Order. The debate continues until 11 o’clock. Continue.

[Andrew Gwynne]

With many bus services used disproportionately by people on lower incomes and by those without access to a car, the socially excluded are worst hit by service reductions. For example, two out of every five jobseekers say the lack of transport is a barrier to getting a job.

When considering bus services, we really must take account of the policies being implemented by the current Government. Many of the cuts are happening not by chance, but by choice. The Government have made a number of critical decisions that I do not just fear but know will have a real effect on bus services. First, as my hon. Friend the Member for Blackley and Broughton said, there is the 28% cut to local authority funding for local transport, which includes money for subsidising unprofitable bus routes. Support will be reduced by £95 million between 2010-11 and 2011-12.

Secondly, the Government are changing the way councils and bus operators are reimbursed for the concessionary fares scheme for older people, taking £223 million from the scheme between 2010-11 and 2011-12. Thirdly, from January 2012, they are reducing by a fifth the rebate for additional fuel costs for running unprofitable bus services, and that will particularly affect rural areas, as my hon. Friend said. That will take away a further £254 million in support for bus services between 2010-11 and 2011-12.

We are already seeing that these changes mean the end of council-funded rural, evening and weekend buses in many parts of the country. With rising costs, the need to maintain profit margins and the state of local budgets contributing to fare rises, the changes will largely mean service reductions in some of the most isolated parts of the country.

When the Prime Minister made his election pledge to protect free bus travel for pensioners, or at least to protect their passes, he did not tell them that, in doing so, he would take away their bus services instead. The sad fact is that the situation on bus cuts is likely to get worse. Forecasts by PTEG show that, by 2014, fares will have increased by a further 24% in real terms in metropolitan areas, while service levels will decline by 19% and patronage will decline by 20%.

[Mr Andrew Turner]

It is interesting to look at what the Prime Minister said before the election. In my constituency, at least some pensioners would rather pay half fares than face the possibility of having no buses at all. They would like to pay their bit on the buses.

[Andrew Gwynne]

Indeed. In places such as Greater Manchester, there was a long-standing concessionary fares scheme before the national bus pass scheme was introduced, and pensioners paid a small amount. Under the bus pass scheme, the concessionary fare was available on peak services until it was removed this year—in the peak period, pensioners now have to pay the full fare. My constituents make the same point as the hon. Gentleman’s and would sooner pay something than lose their service altogether. It is clear that all parties at the last general election pledged to protect the bus pass, but there is no point people having that bit of plastic if they do not have the buses to use it on.

The situation is already bad, but it will undoubtedly become increasingly difficult to maintain current service levels when spending reductions deepen in successive years. In non-metropolitan areas outside London, there have been significant cuts to supported bus services, with some local transport authorities withdrawing funding from all such services, and we have heard first hand about the appalling situation in Hartlepool.

Let me turn briefly to the level of competition between the bus companies. As we know, the Competition Commission is investigating the local bus market and published its provisional findings in May this year. Its provisional findings included the view that profits are higher than they would be if the market were competitive and that too many operators face little or no competition in their areas. The competition authorities recently looked at tactic co-ordination between bus companies, and that has certainly raised a few questions about how truly competitive the bus industry is. The interim report also found that short-term bus wars on the streets, such as we experienced a few years back in Manchester, when the big bus companies used an extremely aggressive approach to drive out the smaller competition and secure their monopolies, were not the way forward, and that more should be done to facilitate multi-operator ticketing. Although we await the full report later this year, the interim report makes interesting reading and helps to inform our debate today.

Of course it was the previous Labour Government who set the ground for improvements to be made to local bus services. We set in progress ways of tackling some of the worst effects of deregulation. Indeed, quality contracts—or the provision for them—were introduced by the previous Government as a key to improvements in bus standards. In hindsight I think that our party would like to have gone further with those improvements to service provision for passengers, and with the implementation of quality contracts. Certainly, those contracts could allow bus companies to concentrate on developing the local market for bus travel, but it is understandable, given the points that have been raised by my hon. Friend the Member for Blackley and Broughton, and given the burden of risk on local authorities as opposed to the bus companies, that those measures have not been pursued as vigorously as they should have been. Quality contracts would help to set minimum standards, making it possible for them to be more stable, with less frequent changes to fares, times and frequencies. In turn that would help bus services to be more reliable, because they would be monitored and good performance would be incentivised.

It is fair to say that the current set-up does not always benefit the passenger, and we need to consider other ways of making our local buses work more effectively. We need to think about ways of addressing the issues that have been raised today, and ways of empowering local authorities and communities, allowing them more of a say in the way their bus services are run, and what the routes should be. Perhaps we need to look at ways to make it easier for passenger transport executives and local transport authorities to enter into voluntary partnerships, statutory quality partnerships and a more balanced quality contract system. That could allow for a system of franchising bus services to local transport authority specifications, similar to the system used to provide bus services in London, allowing a service that is responsive to what passengers want and reintroducing some long-term planning to the system.

I want to ask the Minister what consideration the Government have given to allowing local authorities more powers over local bus services. What assessment has the Minister made with regard to quality contracts? Does he view them as a way to set minimum standards and to make service levels more stable and reliable? What assessment has he made of the greater powers that Transport for London has over local buses and the performance in relation to bus services in London, as compared with what happens outside London, particularly in major conurbations, although the problem is not exclusive to big cities, but also exists in large and medium-sized towns and rural areas?

There is clearly a wider debate to be had about the way we look at restructuring our bus industry. Deregulation has largely failed, and that has been recognised in the debate. We need to think about restructuring our bus industry. I am sure that the discussion we have had today will help to inform the ongoing debate.

10:33

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I thank the hon. Member for Blackley and Broughton (Graham Stringer) for raising this important subject and doing so in his usual measured and thoughtful way. His knowledge is considerable, as I discovered when we served in Committee on the Local Transport Act 2008. I am delighted to have rather more time than I thought I might to respond to the debate.

The Government are committed to supporting local bus services and markets through concessionary travel reimbursement, direct operator subsidy and our funding of local government. However, as I have made clear before, with those significant amounts of public expenditure invested in the bus market, it is only right to consider whether it is delivering the best service for bus passengers and best value for the taxpayer. The Competition Commission has identified, in its provisional findings, aspects of the local bus market where competition is restricted, prevented or distorted. That cannot be good for passengers if it means that they enjoy less frequent services and have to pay higher fares as a result. If that in turn means that fewer people are able to make use of their local bus, and instead have to travel by other means or cannot travel at all, that has wider, and unwelcome, societal and environmental impacts.

Of course, bus markets are local in nature. Many of the effects will be localised, and I have encouraged the Competition Commission to set out where and in what circumstances it believes competition is failing to materialise. It is important that it should be specific in its comments in the final report. One of the concerns raised by the Competition Commission, which I share, relates to profitability—a point raised by the hon. Members for Blackley and Broughton and for Hartlepool (Mr Wright). Excess profitability is an important indicator of ineffective competition. Evidence commissioned by the Department for Transport suggests that profits are particularly high in the largest metropolitan areas, so I have asked the commission to consider whether it can identify specific areas where ineffective competition is most prevalent. A key test of potential remedies will be whether they result in more people travelling on buses and bring about wider benefits to society by helping to create growth and cut carbon emissions.

The inquiry is ongoing, and with representatives of local government and passenger and bus operators, my Department continues to engage with the commission as it prepares to publish its provisional remedies later this month. Hon. Members will understand why I do not propose to anticipate those remedies in my remarks today: it is important that we let the commission, as an independent body, come to its conclusions on the basis of the evidence placed before it. However, I will take this opportunity to respond to the points raised during this debate.

The Local Transport Act 2008 made changes to the provisions of quality contract schemes and partnerships and introduced new forms of legal partnership working. It came into force only in 2009, and the Competition Commission has indicated that quality contracts and quality partnerships may be remedies for the competition problems that it has identified. It is therefore sensible to wait for the final outcome of the inquiry at the end of the year before deciding whether further changes to the regulatory regime are needed.

The hon. Member for Blackley and Broughton asked about the coalition policy as it relates to the 2008 Act. It is on the public record and therefore no secret that the two coalition parties, when in opposition, had differing views on the Act. The Conservatives were more sceptical about the value of quality contracts than were the Liberal Democrats. When the coalition was formed, the decision was taken that, as the process was already under way, the sensible course of action was to wait for the Competition Commission to analyse the market and produce its findings, so that we could proceed on a sound basis, free of prejudice, relying on proper analysis and collated evidence. That remains the position. I do not accept that that is agnosticism—the term used by the hon. Gentleman. It is a sensible decision to wait for the evidence, at which stage we shall analyse it internally and decide what action, if any, we should take in response to the findings of the commission. That process is under way in relation to the structure and landscape of the market.

The hon. Gentleman no doubt expects me to make the point that the landscape about which he and his colleagues complain is largely the one that their party’s Government created, which we inherited. He and the hon. Members for Hartlepool and for Denton and Reddish (Andrew Gwynne) will also be aware that it is on the record of the Local Transport Bill Committee that, had the amendment that I tabled been accepted, many of the actions that Opposition Members now ask for would be unnecessary—the measures would already be law. We did not make more progress at that time because of the then Government’s reluctance to go further.

Before the Competition Commission report is published, however, I want to encourage joint working between bus operators and local authorities. We have seen good results, with local authorities and operators working effectively in partnership to improve bus services in places such as Birmingham, Brighton and Oxford.

My hon. Friend the Member for Hove (Mike Weatherley) and I are lucky in having good bus services in our area. I too pay tribute to Roger French, who has been most effective in driving up bus patronage. He has shown that it can work and that the moaning Minnies who say that bus patronage is going into decline are wrong, as the examples of Brighton, Hove and other places prove. My hon. Friend complained about the effective monopoly that operates in Brighton and Hove and the difficulties faced by the Big Lemon service; he clearly wants to give the Big Lemon aid in some form. The monopoly of which he complains is not terribly different from that which the hon. Members for Hartlepool and for Blackley and Broughton complained about. One operator having an 85% to 90% market share inevitably makes it difficult for other companies to enter the market, and it can be difficult to challenge. My hon. Friend is right to say that the cost of fuel does not relate to the route on which it is used and that differential pricing is clearly a result of competition along those routes. The absence of competition clearly enables Brighton and Hove to charge a higher rate for its bus services. That is a striking example, but I shall ask my officials to ensure that the entire report of our debate is passed to the Competition Commission so that it can see what has been said and take it into account, albeit quite late in its deliberations.

I want to encourage more of that sort of partnership activity so that bus passengers get the services that they deserve and expect. More partnerships need to tackle punctuality, which is the No. 1 priority for passengers and which can be compromised by any number of issues, from road works to poor planning. It is not clear whether the 81% punctuality figure referred to by the hon. Member for Hartlepool was the result of a failure of the bus company or of, for example, congestion, which is a problem for the local authority. Punctuality is not a matter only for the bus companies; there is also a local authority aspect. That demonstrates the need for authorities to be fully involved and to work sensibly with bus companies in their areas.

The Government are looking for operators and local authorities to work in partnership, sharing punctuality and traffic management data to benchmark and improve performance. To facilitate this, a significant number of Vehicle and Operator Services Agency examiners are being trained to engage proactively with operators and local transport authorities to ensure that proper procedures and lines of communication are in place. That new approach is being introduced gradually and has been in place in the north-west since June. I assure hon. Members that traffic commissioners will continue to take effective enforcement action when performance is poor, and that any lessons learned from the north-west will be absorbed before full roll-out takes place. The hon. Member for Hartlepool may want to contact his local traffic commissioner if he is concerned about punctuality in his area.

As the hon. Member for Blackley and Broughton said, another important concern for passengers is integration, especially in fares and ticketing. I share his view that what he described as a simple fare and ticketing structure, with through-ticketing, can be effective in driving up passenger numbers. I absolutely agree and the Department is focusing on that aspect. My vision is of seamless end-to-end journeys, with tickets being available at a decent price and being valid on all services in a city, not only those of the dominant operator.

I shall continue to encourage the development of integrated multi-operator ticketing schemes, and my officials are actively engaged with the Competition Commission and bus operators in helping to remove barriers to their successful implementation. I firmly believe that bus tickets should be valid with more than one operator, but they should also be valid over much wider areas and easy to use. That will be of clear benefit to passengers. That is why I am committed, with operators and public sector bodies, to delivering the infrastructure necessary to enable most public transport journeys to be undertaken using smart ticketing by December 2014.

In many places, including in Greater Manchester and other large metropolitan areas, smart ticketing is already being introduced by local authorities and major national bus operators. It is fuelled by the smartcard incentive offered by the Government through the bus service operators grant and other pump-priming schemes that we have offered since the election. The hon. Member for Blackley and Broughton referred to the use of BSOG, saying that there was a better way of targeting it. If I understand him correctly, he believes that it may be more effective to hand it to local authorities to be used for general transport uses. However, it is difficult to square the complaint that the money being made available for buses is diminishing with the argument that what is available should be deployed for wider transport purposes.

[Graham Stringer]

I apologise to the Minister if I did not make my position clear. I suggested handing the money to PTEs and local transport authorities, not for general transport use but for the targeted improvement of bus services. It should be used to help particular bus services, not for other transport schemes.

[Norman Baker]

I am grateful to the hon. Gentleman for that clarification; he wants the money to be ring-fenced for bus services.

My right hon. Friend the Secretary of State has asked me to initiate a review of BSOG to see whether it is deployed to the best advantage. As far as possible, our time scale is designed to coincide with the Competition Commission report, so that if changes are necessary to the landscape of the industry or to that form of financial help, things could be combined at that stage. To that end, I have been in discussion with the industry and local authorities to hear their aspirations and views on the matter. I shall try to come up with a solution that is satisfactory for both parties—I shall then go on to deal with the Israel-Palestine problem. I hope that we might make some progress. It is in the interests of local authorities and bus operators to come to a sensible arrangement on BSOG.

We understand that good bus services can contribute to both of the Government’s key transport priorities—creating growth and cutting carbon emissions. By providing an attractive alternative to the car, not only can we cut carbon but we can unclog the congestion that chokes off our local economies. However, it must be remembered that we also have to deal with the budget deficit.

I do not want this to be a sterile debate—a phrase used by the hon. Member for Blackley and Broughton—about why we are where we are, but I have to respond to the comments of the hon. Member for Denton and Reddish, the Opposition spokesman. It would have been helpful if he and his colleagues had acknowledged some responsibility for the financial situation in which we find ourselves, rather than pretending that the cuts are somehow malicious and optional, and could have been avoided. That is not the case. I would like to think that we could work across the House to ensure that the impact on bus services is minimised in the constructive way suggested by the hon. Member for Blackley and Broughton.

I shall deal briefly with the three elements of funding referred to earlier. About 80% of bus services are run commercially. I will leave aside questions about the consequences of that for the market and for local government support. The money from the Department for Communities and Local Government is not relevant to those services. At present, local authorities rely on BSOG. The reduction in that grant was trailed long in advance, at the time of the spending review, and it will not take effect until April next year. There has been an 18-month lead in, and the cut was much less than the bus industry anticipated—and much less than Members of Parliament expected. At the time, the Confederation of Passenger Transport, which represents the bus industry, indicated that the cut was manageable and could be introduced without a diminution of services or general fare increases. That is what it said. It is important to point out that bus companies can take the BSOG arrangements in their stride. That should not, therefore, lead to cuts in services.

The basis of the reimbursement arrangements has not changed one iota. The hon. Gentleman will know that primary legislation stipulates that bus companies should be no better and no worse off from handling concessionary travel. That legislative requirement has not changed, and local authorities are required to reimburse bus companies accordingly. All that has happened is that the Department for Transport has issued some guidance to help local authorities to calculate how they should reimburse bus companies, and that, as Members will appreciate, is quite a complicated business. The ultimate test remains the same. If bus companies are unhappy with the reimbursement they have received from a local authority, it is open to them to appeal and their case will be handled independently.

One of the changes that I have made is to ensure that, if there is an appeal, it is possible for a local authority to win. Hitherto, when bus companies have appealed, their contribution has either been reduced or it has stayed the same. Now the appeal process can assess whether local authorities have had to pay too much and reduce the costs to them. That seems to be a much fairer way of dealing with those matters. The appeal process is open, fair and independent and can deal with any complaints that people have.

As for cuts in funding to local authorities, we all accept that local authorities have a challenging settlement. That is particularly the case, may I say for the benefit of the Member who has disappeared, for rural areas and for those services that are supported by local authority funding because they are not commercial to run. Having said that, the pattern of responses from local authorities across the country is varied. Unfortunately, some councils have taken something of an axe to local services, while others have made very few cuts. That is a matter for localism. It is up to local councils to exercise their increased freedom and to decide how they are going to spend their pot of money. We will increasingly see a situation in which one person living in an area will say, “Why is it that my county council has cut these bus services when the county council next door has not cut bus services at all?” That is a perfectly proper question to ask and one that we are trying to encourage in our drive towards localism.

[Mr Andrew Turner]

Will the Minister consider the wish of some elderly people, in areas where buses have been withdrawn altogether, to make a contribution? At present, the system is no buses, no pay.

[Norman Baker]

I well understand why my hon. Friend made that point, which has been made by a number of others. All I can say is that the Prime Minister has made it clear that the concessionary fares regime for local bus travel is not to be compromised and that requiring a charge would do just that. All I can undertake to do is to ensure that my hon. Friend’s comments are passed up the chain so that others are aware of that view.

The hon. Member for Blackley and Broughton mentioned the monitoring of cuts. Let me assure him that we are taking steps to establish the picture. I have asked my officials to do so on a rolling basis. We are checking where services are being significantly cut and where they are being protected. Ultimately, it is a matter for localism, but we have to understand what is happening.

The hon. Gentleman failed to mention the introduction of a £560 million grant, a significant amount, from the local sustainable transport fund, which can be used to drive up the number of bus services in a particular area as part of an integrated package to create growth and cut carbon. That has been well received. If we take the total package of measures under the loose heading of sustainable travel, the £560 million represents an increase in funding compared with what was available under the previous Government. Therefore, despite the difficult economic circumstances and the budget cuts that have taken place, we have made an increase in funding, which has been well received by councils. Every council that could qualify under that scheme, with the exception of the Isles of Scilly, has applied for funding. We had a good first round. I am happy to say that, in Manchester, the key component bid was approved, which is a cycling project for the city. Moreover, a large project from Manchester has applied for a significant amount of money and it has been shortlisted for the final approval process. Therefore, steps are being taken to address the issue of sustainable transport more widely as well.

[Graham Stringer]

I am not sure whether the Minister is referring to the cross-city bus scheme in Greater Manchester. If he is, will he agree to have a meeting with me to discuss it, because the scheme is not as good as it could be and it is not well thought out?

[Norman Baker]

I am happy to say that I was referring to an entirely different amount of Government funding that may be forthcoming depending on the outcome as regards the local sustainable transport fund. However, I am happy to meet the hon. Gentleman to discuss the particular scheme. He just needs to contact my office to arrange a time.

I am interested that both Conservative and Labour Members have indicated unhappiness—perhaps for different reasons—with the present arrangements in the bus market. Their comments are useful and timely given the nature of the Competition Commission inquiry and its report. I will pass on to the commission a copy of the transcript of this debate from Hansard so that it is aware of the comments that Members have made. I will continue to study carefully the representations not just from hon. Members but from people outside to ensure that we proceed in a sensible way.

[Graham Stringer]

The Minister is being generous with his time. Both he and I have had a lot of time in this debate because it has not been as well attended as it might have been and that is because it clashed with the Transport Committee, so some of the hon. Members who would have been most interested in contributing are on duty elsewhere. Mr Streeter, I wonder whether we could tell Mr Speaker that this has happened and in future scheduling of these debates, we could look to avoid such clashes of obvious interest.

[Norman Baker]

That is not a matter for me, but the comments have been heard and will no doubt be passed on.

The hon. Member for Denton and Reddish mentioned the situation in London. He was advocating that the powers that are held by TFL might be extended to the rest of the country, which would be quite a change in the arrangements. I am not quite sure whether that is official Labour party policy. If it is, I am interested that he has put it forward today. Although his argument interests me, it is not quite the panacea that some people think. For example, when competition started in Manchester, we heard how there were queues of buses down the main street. I have to say that we get queues of buses in London, many of which are empty, because they have, in some cases, been overprovided, so similar problems arise with one operator—TFL. It is also the case that London buses are much more expensive to run overall and there is quite a cost to the public purse. Although I am not negating the argument in total, I am just making the point that counter-arguments have to be taken into account when we consider the landscape after the Competition Commission has reported.

To conclude, buses matter to this Government. My focus is on ensuring that the right funding and regulatory framework are in place to ensure that passengers receive the best possible service, and that taxpayers receive the best possible value from public expenditure.

Care (Older People)

Tuesday 6th September 2011 Westminster Hall

10:59

[Tracey Crouch (Chatham and Aylesford) (Con)]

Thank you very much, Mr Streeter, for calling me to speak. It is a pleasure to serve under your chairmanship for, I believe, the first time, which is an honour.

I am grateful for the opportunity to hold this important Adjournment debate on care and services for older people. As part of the younger generation of MPs, I am proud to initiate a debate on a subject that I hope will be of interest not only to those who are in their third phase of life but to the next generation and to the generation after that who will one day find themselves in need of care and services. The statistics show that those of us who are in our thirties will fuel the ticking time bomb that is the ageing population, so it is incumbent on us to try to provide solutions to meet this challenge.

My initial interest in care for the elderly stemmed from my late grandmother, who worked in community care for much of her life. She strongly believed, as I do, that people want to live in their own home and community for as long as they can physically do so, and that the delivery of certain services can prevent people from entering residential care, which benefits both them and the state. It was with that in mind that I chose such a wide-ranging title for this debate. It is very easy to focus entirely on the issue of funding care, but there is more to looking after our older generation than the issue of how to pay for their care. Services for older people, whether delivered by volunteers, charities or local authorities, also need our attention if they are to be developed and improved.

I want to start, however, by expressing my very strong support for the campaign to appoint an older people’s Minister. I believe that if that post had a cross-departmental remit, as there is for equalities or for women and equalities, it would be of huge value to the Government. Some of the issues to which I will refer do not fall within the portfolio of the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), and although I have the greatest respect and admiration for what he is doing to improve social care, he is not responsible or accountable for issues such as transport policy, local authority spending or the provision of financial products and education.

Having said that, if the Government maintain their opposition to the creation of another ministerial post, perhaps they would consider two other options. First, we could establish a new Cabinet Committee on older people’s issues that would effectively scrutinise emerging policies. Secondly, we could consider introducing a new test within regulatory impact assessments that would specifically examine the effect of proposals on the over-65s, as other tests do for other defined sectors of society. We need to pay much closer attention to the impact of national Government policies on the older generation, and I believe that a Minister for older people or a new Cabinet Committee would help to do that. However, there should also be a far greater assessment of the impact of policies at local level and I would welcome the Minister’s views on that matter when he responds to the debate.

The publication of the report of the Commission on Funding of Care and Support—the Dilnot report—was welcomed as a much-needed examination of how to fund care in the future. It is an accepted fact that we are all living longer and that our care needs are greater but that funding in social care has not increased by anywhere near enough to match our requirements. Significant demographic change is not something that should surprise us—it has been predicted for many years—yet the long-term care system has remained unreformed. Dilnot’s findings are very sensible, and hopefully they will achieve the better and fairer funding system that we need. However, there are some questions that arise from the report that I hope the Minister will address.

The Commission set out a reasonable timetable for the implementation of reforms. If we are to begin a new programme of funding, one that should perhaps be aligned to some of the other changes affecting future pensioners, we need to ensure that legislation is passed soon. It may be brazen for me to say so as a new MP, but Governments of all colours appear to be adept at pushing difficult issues into the long grass and waiting for the next Government to address them. We are seeing that at the moment on public sector pensions, which is another ticking time bomb issue that was ignored for decades; dealing with it now will cause more pain than if it had been dealt with sooner. We must not let the funding of social care become the next big but continuously ignored problem.

With that in mind, I should be grateful if the Minister provided us with an update on the public consultation on the Commission’s proposals and told us when he will publish the White Paper on social care. Does he expect a Bill on this issue to be included in the 2012 Queen’s Speech and will implementation of changes to funding begin in 2013, as per the Commission’s timetable? It would help all of those who are involved in delivering care and those people who are planning for their retirement if we received some clarification at the earliest opportunity about the timetable for implementing the Commission’s proposals.

The Dilnot report rightly focuses on the issue of financial advice, guidance and product availability. It is estimated that about 130,000 people enter residential care each year. Under the current system, around 41% of those people are self-funders—in other words those who have assets exceeding £23,250. The increase in the threshold will raise that figure to £100,000, but given how much wealth is tied up in fixed assets such as housing, that will not necessarily change the numbers dramatically.

I am concerned that self-funders deplete their assets paying for care and end up becoming reliant on local authorities for future care funding. Earlier this year, the Local Government Information Unit estimated that a quarter of all self-funders fall back on the state, costing local authorities up to £1 billion per year. The unit’s own report indicates that key decision makers in councils are unaware of the problem or underestimate its cost by 50%. I was shocked to read that 61% of authorities did not know how many self-funders they have or how many self-funders fall back on state funding.

While we need to improve local authorities’ understanding of funding liabilities, it is also clear that those who are in a position to fund themselves need much better financial advice and planning to mitigate the premature exhaustion of funds. Dilnot mentions the variety of financial products that are available, and I should say at this point that although I entered Parliament after working for an insurance provider I have no registered interest in the sector. Nevertheless, from my time in the industry, I think that it is fair to say that there is an appetite for providing products in this area, but the market is not as wide or as competitive as it could be.

I recently met representatives of Partnership, a provider of immediate needs annuities, which is a product to which Dilnot refers to in his report. Like the Dilnot report, Partnership made it very clear that there is a need for improved advice and education. Raising awareness of long-term care needs is essential, not least because people’s expectation is that when they get old they will be looked after for free. I am not convinced that the Dilnot report changes that expectation. Although care costs will be covered, the so-called “hotel costs” of food and board will not be covered, so we need to improve individuals’ understanding of what they will be required to fund themselves.

[David Simpson (Upper Bann) (DUP)]

I thank the hon. Lady for giving way and I congratulate her on securing this very important debate. I have not read the Dilnot report, but I understand that it indicates that we may have to increase taxes or cut public spending to provide care for senior citizens. All right-thinking hon. Members will agree that it is paramount that we provide that care. I may have misunderstood the hon. Lady, but is she suggesting that we should consider having some form of insurance policy to provide for future care rather than increasing taxes or cutting public spending?

[Tracey Crouch]

I am suggesting that we need to look at various ways to fund care in future. I believe that a market exists for this type of care insurance. There are people who can afford to take out such insurance, but they do not necessarily know that there are products out there that could prevent them from having to fall back on the state. For example, they could afford to take out a premium. It may be a hefty premium at the outset, but it could prevent them from draining all the assets from their home and then relying on state funding for residential care. Such insurance policies are certainly an option that we should look at, and indeed Dilnot himself looks at the financial services sector as one that could relieve some of the burden on state funding.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate my hon. Friend on securing this debate. With regard to the use of resources, we have looked at taxation but we must also look at Medway council, which is the local authority that she and I share and which was rated “excellent” in its use of resources by the Department of Health. Rather than increasing taxation, local authorities have a key obligation to ensure that resources for the elderly are available and are funded. For example, in Medway there is free swimming for the over-60s, concessionary bus fares start at 9 am rather than 9.30 am, and home library services are available for the elderly, so this issue is not simply about increasing taxation; it is about making better use of resources. Medway has done so and it is rated “excellent” by the Department.

[Tracey Crouch]

Indeed. This issue is about using resources wisely. However, it is very well discussing how resources are used now, but the problem lies in the future. At the moment, one in six people are over 65, but by 2050 one in four people will be over 65, and resources will only be able to stretch so far.

We spend a lot of time—rightly so—talking about financial education for young people, but I am enormously sympathetic to the suggestion that we should consider providing free financial health checks for people in their 50s and early 60s, possibly funded by using unclaimed assets in banks and insurance companies, and possibly delivered by financial advisers, charities or through the new money advice service. The provision of good quality care is an emotive matter for all involved. Standards of care, and indeed of care homes, differ dramatically, not just across the country but across constituencies. I recently visited Amherst Court in Chatham, a purpose-built Avante Care and Support home that supports residents with dementia. I was really impressed with what it offered and could tell that a lot of thought had gone into the building and the care provision. Such quality, however, has to be paid for, and unfortunately not all residential homes offer the same standards. When homes close, sometimes because the buildings are no longer fit for purpose, there can be uncertainty for residents and their families. It is that postcode lottery of care that we need to mitigate as best we can through the consideration of our long-term care requirements, which is why one policy that we need to get absolutely right for the benefit of our elders is the one on building more homes.

We have a massive housing shortage in the UK, but it is the older generation who have the least choice as to where they live. If they decide to downsize from their family home, they find that there are few bungalows or smaller houses being built. There are not many purpose-built retirement complexes, whether flats or houses, and any new development with social housing rarely, in my view, considers the needs of the elderly.

[Jim Shannon (Strangford) (DUP)]

There is a great focus on residential homes, but does the hon. Lady feel, as I do, that there should be a greater focus on letting people stay in their own home? They feel more confident there, and it is cheaper. I think that if they had a choice, a great many people would rather be in their own home than in residential care.

[Tracey Crouch]

That is precisely my point, and I hope that it will be the key theme to emerge from my speech. Homes must provide good-quality care for people who have to go into residential care, but we need to try to keep people in their own home for as long as possible. My late grandmother certainly believed, as do I, that if good-quality services can be provided people will have to rely less on expensive residential care, and we should therefore provide a greater choice of available private homes. Not many bungalows are being built, because their capital value is not that of a seven-storey apartment block on the same land, which poses a problem for our older people, who then have the choice of staying in their family home, which is incredibly expensive to heat and often impractical, or of moving into residential care.

We want to rely less on the state to fund our residential care, and it seems logical to put greater emphasis on ensuring that new developments have as much of a duty to provide for older people as for other younger sectors of society. The issue of choice extends into the social housing sector too. In my constituency, a few areas of social housing are allocated to the over-55s, but there is a huge difference in the lifestyles of 55-year-olds and 75-year-olds, which often leads to antisocial behaviour problems. I doubt that many people would consider 55 to be old, and therefore we perhaps ought to consider revising the age allocation up, to the over-65s.

I am pleased to say that Kent Housing Group, which is a partnership of developers and local authorities across the county, is looking precisely at housing for older people, and I look forward to seeing the outcomes of that work soon. However, I fundamentally believe that there is a role for the new homes bonus, which could incentivise authorities to build bungalows or complexes for older people and lead to much more housing choice for those who wish to stay out of residential care. That could be one policy that would have a positive impact on the welfare of older people, and it would also benefit the Treasury by keeping people out of the more expensive residential system.

The funding of social care might be the hardest single problem to overcome in this policy area, but we often forget that the services side is equally, if not more, important. Good delivery of services can prevent people from needing to enter residential care, or from staying in hospital longer than the average patient. We have some excellent charities and volunteers who provide an essential community service, and they can be vital to the health and well-being of the people they look after. As brilliant as individual schemes are, however, our overall community service for the elderly needs to be much better. I heard a heartbreaking story from the WRVS about a lady whose light bulbs broke. She was unable to fix them herself, and so for a month she sat in the dark. As she used her television for light, the electricity company noticed that her bills were unusually high, contacted her and discovered what the problem was. A WRVS buddy was sorted out, and her light bulbs were changed, but it took a month and a concerned utility worker to alert others before she was helped. In these modern days of instant connectivity, I find such isolation utterly unforgivable.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate my hon. Friend on securing this debate. Does she think that when we are considering Dilnot and the future funding of care, we need to look not just at the baseline and at our well-recognised ageing population, but at the unmet need to which she has just referred? In Portsmouth, for example, which is a fairly compact city, we have 1,000 people with dementia who have no access to services.

[Tracey Crouch]

We need to improve the services available for different people with different needs as they age. I am vice-chair of the all-party group on dementia, but I decided not to talk specifically about dementia today because I am hoping for a future opportunity to do so. There are, however, some very good services. They are very localised, but often people do not know about them. For example, the wife of a constituent of mine who happens to be a good friend, has just been diagnosed with dementia. He found out about the excellent Admiral Nurses service by word of mouth; there was no one there to signpost him to it. He could have been provided with a hugely valuable service at the outset of his wife’s diagnosis. We need fundamentally to improve services across the country.

The Centre for Social Justice has produced a report, which I highly commend and which is entitled “Age of Opportunity: Transforming the lives of older people in poverty”. The report states that more than 1 million people aged 65 and over feel lonely, and a similar number feel trapped in their home. Charities can do so much but, as the CSJ says, there is a fundamental role for the state in preventing such isolation. So many older people are already known to statutory bodies, so providing the link to charities is essential. The CSJ recommends a greater role for neighbourhood policing teams, in engaging with extremely isolated older people, and the extended use of the increasing number of health visitors. Those are sound recommendations, which would help to deliver a new relationship between the voluntary and public sectors, and also reduce social isolation.

The authorities and partnership organisations to which I speak are desperate to provide good services, but they are hampered by finances. Although we have to be realistic about the need to make efficiency savings across various services in the short term, that needs to be balanced by an understanding that good-quality services can benefit public finances in the long term. Keeping retired people active, for example, keeps them healthy and less in need of acute primary care. Helping those nearing retirement to plan financially prevents them from draining their assets before falling back on the state. Providing company for people in social isolation not only enriches their lives but improves mental and physical well-being. Good-quality housing designed for the older generation provides greater choice for people wishing to remain in their communities. All those areas are interlinked, and better delivery could save the state a significant amount of money in the long term, but for the people who need care we must ensure that it is of good quality and sustainable for our ageing population, but also fairly funded.

If we are to improve the standard and delivery of care and services for older people we need to deal with this issue today, and I urge the Minister not to let it get kicked into the medium or long grass, and to consult on and implement reform of the system as soon as possible, for the benefit of this and future generations of pensioners.

10:04

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship today, Mr Streeter. I congratulate the hon. Member for Chatham and Aylesford (Tracey Crouch), both on securing the debate and on the sincerity that shone through in her contribution. I strongly agree with a number of the points that she made.

During the summer, I addressed a meeting convened by the Birmingham branch of Carers UK—an outstanding organisation nationally and in Birmingham. What shone through was that there is no more noble cause than caring. At that meeting, 200 were present, including people who were cared for, carers and the organisations that support them. Deep concern was expressed on two fronts, the first of which relates to an issue that we are not here to debate: the cuts to benefits and the work being done by the Hardest Hit coalition, which includes the Royal National Institute of Blind People, Mencap and others. The second issue relates to the growing crisis in social care. In one sense, the crisis is the consequence of a good thing—people are living longer—but there are undoubtedly two major problems. One, I agree, is that successive Governments have failed to implement a long-term solution to the growing crisis in social care. The other is the impact being felt now of cuts in public expenditure. The Government are going too far too fast, and that is having an increasingly serious impact on the most vulnerable in our society.

Looking to the future, the Dilnot review offers a new dawn. Its recommendations have been widely welcomed across the political spectrum. As we move towards implementation, it is key that Dilnot is fully funded and that its recommendations in respect of eligibility are carried through, so that what happened in Birmingham—I will say more about that later—never happens again. I agree strongly with the hon. Member for Chatham and Aylesford that its recommendations must be acted on as soon as possible. She is right that there has been a propensity in the past to kick such issues into the long grass. That cannot be the case in future. I sense that, across the spectrum, there is a desire in the House for the Government to act as soon as possible. They will unquestionably have the full support of the Opposition if they do.

[Margot James (Stourbridge) (Con)]

I share the hon. Gentleman’s enthusiasm for enacting the Dilnot report in law as soon as possible, but I have reservations about whether we should enact it in full as recommended. To give one example of my concern, does he agree that the £50,000 cap above which nobody should have to pay out of their own purse for long-term care or personal care at home might represent a large proportion of some people’s savings and assets, but that for home owners in the property-rich markets of the south-east, it might represent a small proportion? I am concerned on that and various other points. We should not rush but should subject Dilnot to proper critical investigation.

[Jack Dromey]

I accept that some of the issues that Dilnot identified will have to be worked through, but I think that there is a broad welcome for Dilnot ending what has caused so much grief in the past. People have had to sell their homes. People who spent their lives hoping to pass on wealth to their children have found in the twilight of their years that that is not possible. We can have an intelligent debate about the detail of Dilnot, but the cap is welcome. The sooner we implement Dilnot, the better. The problem is that, even if everyone gets a move on, that might be some years away, in which case we must address the here and now during the next two to three years.

WRVS has done excellent work in the field, and has said rightly that the Government must both address the adequacy of the funding that they have made available and ensure that it is wisely spent and properly monitored. The inescapable reality is that the consequences of the cuts to public expenditure are devastating for the most vulnerable in our society. To use the city that I represent as an example, Birmingham city council has cut £212 million from its budget this year—the largest cut in local government history. It cut £51 million from the social care budget, rising to £118 million over three years, and consequently sought to remove substantial need provision for 4,100 people. The council was prevented from going down that path only by a judicial review taken by four brave families, whose cases were heart-breaking.

I have seen some of the consequences in my own experience. One example is an absolutely wonderful couple, Faith and Frank Bailey. Faith Bailey is terminally ill. She left hospital some months ago, so that she could spend the remainder of her time on earth with her husband. They are a devoted couple; it is wonderful to see them holding hands at the age of pushing 80. The problem was that when she left hospital, her night-time care was restricted to two nights a week. She struggled as a consequence, and the impact on her husband was devastating. He was becoming increasingly exhausted, and neither of them could cope. The situation was causing them great distress. I am pleased to say that they are now in the admirable New Oscott village, where they will be cared for properly. However, those decent people who built Birmingham and Britain looked forward, in the twilight of their years, to being together for the remainder of her time, and to see them suffer in such a way was heart-breaking.

This is not just about the human consequences. As the hon. Member for Chatham and Aylesford was right to highlight, it is also about the financial folly of failing to recognise that not investing might cost more in the medium to long term. The King’s Fund report charts what happens in social care as a result: the number of people admitted to hospital rises. I am sure that we have all seen that in our respective constituencies. I remember one example in the constituency next door to mine in Birmingham. A fine young man who was seriously assaulted spent 18 months in hospital as the consequence of a failure to provide a social care package. After he had spent just over 12 months in hospital, he was told that he could leave if an adequate social care package were provided for him, but because it was not, he stayed in hospital. He was desperate to go home and his family wanted him back, and it was costing the national health service £2,400 a week in net additional costs to support him. That cannot be right. The impact on the national health service is an issue.

To give another example from Birmingham, all parties supported building 10 centres, such as the admirable Perry Tree centre, across Birmingham to provide intermediate care as a bridge between leaving hospital and going back home or into a home. Perry Tree is outstanding, and the atmosphere is wonderful. However, sadly, no more centres will be built. That will mean bed blocking on a massive scale in the national health service.

[Tracey Crouch]

Is the hon. Gentleman aware of the report by the all-party group on dementia that highlights that issue specifically? Dementia patients are extending their stays on hospital wards because they cannot go straight back to their residential care homes, and it is costing the NHS about £20 billion a year. It is a massive issue. Intermediate provision must be considered more closely to alleviate that financial pressure on the NHS.

[Mr Gary Streeter (in the Chair)]

Order. Before the hon. Gentleman responds to that point, I would like to say that five other colleagues are seeking to catch my eye and the wind-ups will begin at 12.10 pm. If colleagues can moderate their speeches, I would be most grateful.

[Jack Dromey]

Thank you, Mr Streeter.

The work that the hon. Member for Chatham and Aylesford has done, together with the all-party group, is admirable. She is absolutely right to highlight the dilemma. Before I conclude, I will give one other example of the impact of what is happening in Birmingham. It is a combination of the cuts to big society organisations on the one hand and the impact on carers on the other. On big society organisations, the budget of Age Concern Kingstanding—my constituency is one of the 10 poorest in Britain, and Kingstanding is the poorest area in Erdington—is being cut. A particularly heart-breaking case concerns a group called Elders with Attitude. It has one co-ordinator and a range of volunteers. I remember the first time that I met them. They are inspirational. People were brought together around a table and told their story. One individual—another Frank—said he had had a terrible stroke and had thought that his life was over. The group meets twice a week and, in his words, it brought him back to life. His granddaughter, who was sitting alongside him, burst into tears and said, “My granddad used to just sit at home, looking at the wall. This has given him a fresh lease of life.” This is essentially a voluntary initiative and initiatives of that kind should be supported, not least because, as the hon. Lady has said, stimulating people is of the highest importance to their quality of life and, ultimately, to their not having to go back into a hospital.

I want to give one other example of the impact on carers. In Birmingham, thousands of carers are employed directly by the council. I remember meeting a group of 20 of them in July. They were women who had worked for 10, 15, 20 or 25 years. They were the kind of women who go the extra mile in the job that they do. I remember meeting one of them coming out of Sainsbury’s in Castle Vale the Easter before last. She had a bag of Easter eggs. I asked, “Who are those for?” She said, “Half a dozen people I care for.” I asked, “Who’s paying for it?” She said, “Oh, I am of course.” She was buying Easter eggs for people who would not otherwise get them. Such was her bond of love and affection for the people for whom she cared. Sadly, she and all the people like her are now going to see cuts. They earn typically £14,000 a year. They will see, under the proposed Birmingham contract, a cut of £4,000. That is absolutely devastating.

What I hope unites us here is the focus on the need for the new dawn to be realised and for all parties to work together to put in place Dilnot’s recommendations, and to do so as quickly as we possibly can. Crucially, however, it is about what happens in the meantime, because the hallmark of a civilised society is whether we care for the most vulnerable in our ranks.

11:33

[Anne Marie Morris (Newton Abbot) (Con)]

This is an important issue and probably one of the most important topics that we as a Government and a Parliament will need to consider. On current estimates, the number of 85-year-olds will double by 2026, so it is a serious issue and I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing this timely debate.

Dilnot focused on the financial issues and found that the current system is not fit for purpose. I think that there is another issue in relation to quality. The Government clearly want to ensure that we have a system that, ultimately, is fair, affordable and sustainable. They want to invest in a system that will ensure that we have more care and support in the community, so that we can keep people in their own homes rather than force them into residential care as the only option. However, if we want that quality, we need to ensure that there is proper monitoring and proper regulation. Although I am not a great fan of over-regulation, we have to bear in mind in this particular argument that we are dealing with consumers who are often not very vocal or not able to be very vocal. Therefore, it cannot necessarily be assumed that the way in which a market would normally self-regulate will be the way in which this market will regulate itself.

My comments are based on conversations I have had with the Care Quality Commission, a number of local authorities and private providers. I have a long-term interest in the issue. I was a county councillor and chairman of the health overview and scrutiny committee, and in Devon we currently have the largest number of retired individuals in the country. I will turn first to residential care, then to domiciliary care, look at how they are regulated and monitored, and raise some concerns that need to be addressed by the Minister.

Residential care is commissioned by the local authority. Although provision is monitored by the CQC, the commissioners, per se, are not. I have a concern about that, because it is the local authorities that are determining whether to commission in their own homes—where one might argue that they have a conflict of interest—or in the private sector. What I have found particularly disturbing is the price that is paid for each of these contracts. I hear that local authorities—I give this by way of an example—are paying £700 in the public sector, compared with £350 for a private provider. Whatever the savings might be, there is no way that, for half the price, the same quality of care can be provided.

There is no standardisation of contract in the current system. Although choice is clearly important, I think that, for a consumer who has a difficult time getting their voice heard, it is difficult to ensure that they get consistently good quality. If we are to ensure that there is real choice, genuine quality and fair pricing, we need to look seriously at how the commissioning bodies—the local authorities—might be monitored and regulated in future. I believe that the Government have looked at HealthWatch as a possible source. My concern about HealthWatch is that, first, it does not yet exist and, secondly, it seems to have been conceived as a reactive rather than proactive body.

The provider of residential care is, principally, either the local authority or the private home, and here CQC does monitor. Although the intention was to set out a new framework that, rightly, was more outcome-focused than process-focused, the challenge for the care homes is to comply with this new care quality regulation. I have talked to a number of homes and the majority have indicated that they expected a light touch from Government. They expected that they would be able to provide evidence of compliance and that there would not be many onerous visits. I hear that there are many visits, which surprises them and surprises me. They are saying that it is taking up an awful lot of administrative time. Given that, as a Government, we are committed to cutting red tape, something is clearly not working somewhere. The position needs to be reviewed. Clearly, it is important, because we need to guarantee quality, but let us find a way of doing it better. The other concern that homes have expressed to me is that, with the new outcome framework, there is no guidance as to how to meet the new requirements. In the old days, the CQC used to provide guidance, but now it does not see it as within its remit.

Domiciliary care is, perhaps, one of the most tragic and most important areas of concern. Commissioning of domiciliary care is done by local authorities. Here again, there is no monitoring and, I understand, no regulator; I would love to hear the Minister tell me that I am wrong. I cannot therefore see how we can ensure that our local authorities are really making sensible, informed choices about how they award contracts for domiciliary care. Indeed, I have heard stories of local authorities trying to take out costs and to subcontract their role to lead providers, who then take on the role of subcontracting further to find individuals and more providers of domiciliary care. In all that process, the quality control and the quality test seem to be lacking. I have talked to providers in the private sector who have seen some of what goes on, and the stories are horrifying.

Let me give one example. A provider indicated to me that she had gone into the home of an elderly person who was having to be put on to the toilet. The lady was literally sitting in her chair eating her sandwich lunch and the providers came in and lifted her up in a way that is apparently not appropriate or correct from a nursing perspective. They put her on the toilet, went out, smoked a cigarette and came back in. The sandwich was still in that poor old lady’s mouth. They then took her and stuck her back in her chair. That does nothing for the dignity of the older person.

The provider of domiciliary care is sometimes the local authority but, increasingly, it is the private sector. Unlike the residential end of care, there is no Care Quality Commission monitoring domiciliary care and I understand that there are also no spot checks. Although there is an obligation on local authorities to have a watching brief, what I am hearing anecdotally shows that very little of that is actually happening.

The concept of e-monitoring was introduced to try to assist with that. The idea behind e-monitoring is that, when someone goes in to provide care in a home, they pick up the phone in the individual’s residence and log in. When they have finished dealing with the client, they log in again through the telephone. However, the reality is that once someone has logged in, frankly, they can do almost anything. As in the case I mentioned, that could be putting a lady on the toilet and then disappearing outside and having a cigarette. Therefore, e-monitoring is not an effective way forward. The other thing happening is that, because there is no monitoring of quality, cost rules and consequently quality are going down.

I shall make this a very short contribution. In conclusion, the Minister should carefully consider having a regulator to deal with the monitoring process for commissioners both of residential and domiciliary care. In addition, certainly with regard to domiciliary care, some urgent and immediate action needs to be taken to examine current practice.

11:41

[Alison McGovern (Wirral South) (Lab)]

I congratulate all hon. Members who have spoken so far, especially the hon. Member for Chatham and Aylesford (Tracey Crouch). I feel sure that her grandmother would be incredibly proud of her today. Her contribution was important and she made many points that I wholeheartedly support.

I want to follow on from the comments of the hon. Member for Newton Abbot (Anne Marie Morris), who articulated part of the problem very well. Although we have focused on Dilnot, the review and funding, I argue alongside her that we cannot talk about money without talking about what people get for that money. What people are prepared to pay surely depends on the quality of care that they are going to get.

[Rehman Chishti]

The hon. Lady makes a point about resources. A crucial issue linked to resources is that of the principle and presumption of early intervention and prevention in improving the quality of care for the elderly.

[Alison McGovern]

I agree. In a moment, I will talk about some of the problems that local authorities are currently facing. They have had bigger cuts than any part of Government in Whitehall. Although I wholeheartedly agree with what the hon. Gentleman said, it is a challenge to all of us to support local authorities in that prevention role.

The hon. Member for Newton Abbot rightly made the point that quality matters above all else. Some of the examples given by her and others were compelling in terms of the moral requirement on us all to stand up for the dignity of older people. I firmly believe that, when we hear examples such as the one just given, we know what is happening is wrong. I have heard examples from my constituents: for example, older people are told that a “breakfast” visit to get them up can take place any time between 6 am and 11.30 am, regardless of their personal preference. That is not good enough and is an offence to somebody who prior to needing care was independent and perfectly capable of looking after themselves. We all know that instinctively.

The question is: how do we get from where we are to where we would like to be? I want briefly to make two points on the subject. First, I shall mention enforcement and some of the professional development issues. Leading on from that, I shall talk about the market for care provision and why there is an interesting and difficult problem that the Government will have to tackle regarding the market for providing care. I agree with many of the points made by the hon. Member for Newton Abbot about some of the anomalies surrounding enforcement. I repeat that local authorities are having to struggle with the fact that, if they were a Government Department, they would be experiencing the biggest cuts in Whitehall. That makes the job of having responsibility for the care of older people, which is a fixed cost, very difficult.

[Margot James]

Does the hon. Lady agree that, when we consider expenditure, part of the problem is that, over the past 10 years, the increase in local authority budgets for adult and social care has been minimal compared with the increase in many other local authority budgets, particularly that for children and younger people’s services, to name but one? With adult and social care, we are starting from a base that is already very low, which is one of the problems and is why local authorities are struggling so much.

[Alison McGovern]

I do not know the statistics on that, so I am hesitant to comment. If the hon. Lady says that that is the situation, of course, I believe her. However, I do not know off the top of my head whether that is the case comparatively. I will make some comparisons with children’s services because there are some interesting parallels. If, as she mentions, the budget for children’s services has increased, I can only think that that is a good thing given the importance of child protection and youth services. I live in hope that we can move towards having better funding for older people’s services in the near future.

I return to the point I was making on enforcement. We have all had cases—since I was elected, I have had many cases—of people coming to surgeries who feel that the care provided is not sufficient. There must be a clear, easy process to follow for relatives or those concerned about a poor standard of care. At the moment, the system is confused. I will not repeat what has already been said, but that is my conclusion. If someone feels that the quality of care they have received is poor, the process they have to go through is not easy.

Some of the issues raised by constituents at my surgery have stemmed from the absence of professional development for those providing care. I have seen extremely good quality examples of both residential accommodation for older people and care provided in people’s homes but, by and large, the work force who provide that care are underpaid and neglected. It has to be said that that work force are mainly women who often have not received much workplace training over many years and are some of the lowest paid people in our society. Frankly, it does not do much for the dignity of older people that the job of looking after them is one of the lowest paid and least respected in our society. It is about time that we put that right. We should make it clear that looking after older people and protecting the dignity of our society is an important job. We ought to pay those people a decent wage and give them the training and support that they deserve.

The example of e-monitoring has been mentioned. In my surgery, I have been given examples of that. People are given time to look after people but not enough time to travel between appointments, and they are for ever catching up after themselves. By and large, the whole system is set up to make a profit for the company concerned, rather than to think first about the quality of service for the person receiving care.

[Mrs Anne Main in the Chair]

On the profit issue, I am not an unreconstructed left-winger. [Interruption.] To the chagrin of some, I am not one who thinks that the profit motive has no place at all in public services. However, there is a structural issue here. We have a large amount of competition for the provision of care. Price competition, in an industry where greater profit cannot be extracted through the use of technology—this is a person-to-person service with a one-to-one relationship with the person, so we cannot invest in technology to make more profit—means that wages are the only expenditure that can be driven down. In an environment where the work of care is seen as low, wages have been driven down. There has to be a response from the Government on the structure of the industry, which effectively means that wages have been pushed down lower and lower, and people’s skills and time are not being invested in.

I draw an analogy with the child care industry. In the 1980s and early 1990s we had a similar situation. Frankly, those involved in child care were seen as the lowest of the low and were paid as little as humanly possible to look after children. Those days are over now. By and large, those who look after children are now paid a bit better and are likely to have qualifications. Can we not set ourselves the challenge of better wages and a better skill level for those working in care for older people? That would meet the aspirations of the hon. Members who have spoken so far and would do a great deal to improve the quality of care. That would help us to deal with some of the funding issues. People would feel that what they paid for was worth having and worth investing in. Hopefully, it would also meet the challenge set to me earlier and ensure that the case is made to local authorities to pay for quality.

In conclusion, I agree with the comments that have been made so far. There has to be attention to quality and to standards, and an ability to uphold those standards. There is a problem, however, in the market for care that is forcing a driving down of the quality, and it could be dealt with.

11:52

[Tony Baldry (Banbury) (Con)]

I am definitely going to send for a subscription to “Elders With Attitude”. It sounds like a very commendable organisation.

An aspect of public policy that is far too little debated is the consequences of us all increasingly living with an ageing population. It was about two years after I was first elected that I heard the word “Alzheimer’s”, but if I go around a nursing home in my constituency now, pretty much everyone there is suffering from age-related dementia of some sort. In my brief comments, I shall relate that to the problem of delayed discharge, or what is known as bed blocking. That is where the system needs improving.

Money has tended to be allocated to local authorities based on population and a multiplier of deprivation indexes, but I am not sure that those formulae take sufficient account of the ageing population. When a person is old, their requirements for care and support do not depend on their social background, but that is not sufficiently recognised in the formula. In medicine, at one end people stay for ever-shorter periods of time in hospital—one can now do such things as hysterectomies by keyhole surgery, which was impossible a few years ago, so some people go into hospital and come out very quickly—but at the other end, some people go into hospital and stay longer; largely, they do not need to be there, but an appropriate place cannot be found for them.

I understood, for example in domiciliary care, that the introduction of individual budgets would give individuals more control over their care provision. One hoped that that would lead to more providers coming into the system, but I see no evidence of that in Oxfordshire. Likewise, I do not see, and would be very surprised to see, substantial, or indeed any, increase in nursing home provision on what there was 10 years ago.

If one thinks about it and visits nursing homes, one sees that the point about wages is a good one. In the past decade, most nursing homes in my patch have managed by employing—I mean this in no pejorative sense; it is just the reality—Filipinos and paying them the minimum wage. At the end of their training, they have then gone on to find work in the NHS, and even though, with the cap on non-EU migration, that has become increasingly difficult, nursing home providers find themselves squeezed. On the one hand, the amount of money they receive from local authorities for placements is getting ever tighter; on the other hand, their wage bills and regulatory costs are becoming ever greater. There is little incentive for existing nursing home providers to increase the size or the provision in their own nursing homes, and there is certainly very little incentive for any new providers to come into the marketplace. There is a certain amount that the NHS or primary care trusts can do to fund intermediate care beds, but there is a limit to that and the cost still falls on the NHS.

We need to take a much better grip. I am not entirely confident about who has a grip on domiciliary care and is trying to ensure that there are sufficient providers of day care for those who need it. If we are to avoid ever-increasing fractiousness between the NHS and the social service providers over the thorny issue of delayed discharge, we will have to give more thought to how to ensure that there are sufficient places in the nursing home and residential care sector.

I agree with the point made by the hon. Member for Wirral South (Alison McGovern) about enhancing the professionalism of care staff. Those who provide domiciliary care in residential care homes provide a very important personal service. We should look at ways to enhance their reputation and status and encourage more colleges to offer HNDs and other courses for care staff. We will require more people in care services in the future, so it needs to be seen as an honourable occupation to which people aspire and where there are the highest standards of professionalism. There are important questions that need to be answered about the funding for local authorities for social care and how, with that funding, they are able to support both sufficient nursing home places and sufficient domiciliary care places.

For some time, many nursing homes were able to cross-subsidise, using the fees from private residents to subsidise the fees from local authorities. What I see in my patch is, effectively, two types of nursing home provision. Some nursing homes are now almost entirely privately paid; they are very expensive and provide a very good service. That means, however, that the only source of income for those nursing homes that provide residential care for patients funded by local authorities is the money that they receive from local authorities. They are stretched extremely tight to deliver a good service and have little incentive to expand that service. If we do not get our policies right, all that will happen is that the NHS will spend significant sums of money keeping in hospital people who no longer need to be in hospital and who could be discharged if there were places to discharge them to safely and properly.

11:59

[Gareth Johnson (Dartford) (Con)]

I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing the debate. She feels passionately about the subject and made a robust and fair-minded speech.

Care and services for older people are of increasing importance, and I agree with the sentiments already expressed about how we must deal with the issue sooner rather than later. It is a growing mushroom that must be dealt with fairly soon because the population in this country is getting older, which is placing strains on our systems. That is a good and positive thing—too often we hear about longevity in a negative way, but it is a marvellous tribute to medical science that we have people living longer than they previously did—but greater reliance is placed on our care home provision and local authorities have to adapt to the changes in pressure placed on them as a consequence. I have disagreed publicly with my local authority, Kent county council, on decisions it has made about care home provision in my constituency of Dartford.

I accept that the future lies in a public-private partnership in care provision throughout the country. The Government face a dilemma: they cannot afford indefinite free care home provision and they do not want to penalise those who have saved for their retirement. Free care home provision for all without tax rises is completely unaffordable—I agree with my hon. Friend the Member for Banbury (Tony Baldry) about that. Such rises, especially in the current climate, would have a huge negative impact on the finances of this country. Equally, we should not be punishing prudence and forcing the elderly to sell their homes to pay for care. Prudence should be rewarded by the state, not punished.

Health and safety legislation has often added to the cost of care provision. The apparent necessity for all rooms in a care home to have en suite facilities was used as part of a reason to close care homes in my constituency, yet residents in those care homes would say that what they want is their home preserved and not the health and safety considerations met. I recently visited Emily Court care home in Wilmington in my constituency. The residents echoed the sentiments I have heard in every care home I have ever gone to: they like the facilities, but what is most important to them is that it is their home. That drives the affinity they have for the place.

What has staggered me since the upheaval in my area with the closure of care homes is how easy it is in this country to close them. I find it incredible that no real security of tenure exists for residents in a care home. Travellers have some rights over land they settle on—that is obviously an argument for a different time—and squatters have rights over empty properties that they occupy, yet residents in care homes can be moved almost on a whim. That might need further investigation, because the consultation exercises before any care home closes concentrate a bit too much on the bricks and mortar involved and not enough on the people.

[Alison McGovern]

The hon. Gentleman says what a bugbear health and safety legislation was and then mentioned the lack of security of tenure for residents. I find it difficult to know whether he thinks we need more or less regulation, legislation or sub-legislative guidance. What mechanism does he think is best to improve some of the standards?

[Gareth Johnson]

The two issues are separate. When Southern Cross went bankrupt, for example, it blamed in part the increase in health and safety legislation, some of which was sensible and some completely unnecessary. Ensuring that people who reside at care homes have some rights over the land that they are living on is a separate matter. I do not see that as placing increased burdens on those running the care homes; it simply gives the individual residents the same rights that we would have if we leased a flat. Those living in residential care homes, who are perhaps among the most vulnerable in society, should surely have that extra protection. The challenge for the Government is to find a solution that is both affordable and fair—affordable, so that the Government can cope with the ageing population and the increasing demand on care homes, and fair, so that the elderly are not forced to sell their homes and lose out because of their earlier, sensible financial decisions.

[Esther McVey (Wirral West) (Con)]

I am delighted to take part in the debate, which echoes the conversation I had earlier in the week with the residents of Hoylebank in West Kirby about the diverse and huge issues involved. Those residents believe that they are part of an invisible generation. They would like to be visible and, like my hon. Friend the Member for Chatham and Aylesford, they are calling for a Minister for the elderly to go through everything thoroughly.

[Gareth Johnson]

I am sure that the residents in Hoylebank have similar difficulties to many residents all around the country: they are often screaming loudly and not being heard by anyone. It is incumbent on Government to listen to the messages we hear from care homes and to see where we can make improvements to their rights to ensure that their homes are protected as well as possible. We need to find a more sensible balance than is currently in place. Care homes provide a vital link in the health chain. The hon. Member for Birmingham, Erdington (Jack Dromey), who is not now in the Chamber, made the important point that if we reduce the availability of care home provision, the amount of so-called bed blocking in hospitals will inevitably increase, with all the extra difficulties and costs arising.

We all want to facilitate elderly people remaining in their homes as much as possible, but the ideal should be about choice and not about forcing people who want to go into a care home to stay at home, or forcing people who want to remain in their own homes to go into care. Their individual choice should be paramount, and their opinion should count for a great deal. I therefore look forward to the spring, when the Government intend to announce their intentions regarding the Dilnot report and what happens thereafter. I look forward to finding a balance that works for the whole of the older generation.

12:07

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a great pleasure to serve under your chairmanship today, Mrs Main. I congratulate the hon. Member for Chatham and Aylesford (Tracey Crouch) on securing this hugely important debate.

The terrible consequences of the massive spending cuts are becoming clearer and clearer. They focus in particular on underfunding in the social care system, which is getting to breaking point. Earlier I shared with the Minister my research on the effect of the cuts on local authorities and on adult social care. I am sure he is pleased to hear that I am doing further research.

My preliminary research, which I put together with the House of Commons Library and which is a clarification or an interpretation of data published by the Department for Communities and Local Government, shows £1.3 billion in real-terms cuts in local authority spending on social care in both 2010-11 and 2011-12. For the oldest and most vulnerable, the picture is especially dire, with real-terms spending on social care for the over-65s lower than in 2009-10 by £60 million in 2010-11 and £1.3 billion in 2011-12. The Association of Directors of Adult Social Services has indicated that demographic pressures from an ageing population, physical disabilities and learning disabilities have placed a £425 million squeeze on social care funding in 2010-11, with fewer than half of local authorities allocating the funds to cover the bill. I believe that the Department of Health continues not to be able to provide a borough-by-borough analysis of adult social care funding, so when I have my full report available next week, I assure the Minister that I will let him have a copy.

As a consequence, care packages and care services are being renegotiated, with new and increased charges being imposed. Others are being denied state-funded care altogether, because of changing eligibility criteria. A recent report from Age UK warned that of 2 million older people in England with care-related needs, 800,000 receive no formal support from public or private sector agencies. With spending cuts, that number is likely to top more than 1 million between 2012 and 2014. The evidence is piling up.

The Minister may have heard yesterday’s “You and Yours” programme on the BBC, in which the UK Homecare Association gave an analysis of its recent research that showed a pattern of care in the home being taken away from people. In the cases that it looked at, 82% of councils were reducing the amount of time that people have with carers in their home, there was a widespread increase in very short visits—for example, the notorious 15-minute visits—75% of councils were reducing the number of visits per week, and 50% were trying to reduce the money spent on an hour of care. Fewer safety checks were being made on older people at home, there was a widespread reduction in the time allowed for bathing and washing, and social services were being cut completely. They include a range of services that are not personal care, but help people to stay in their home—vital services such as help with laundry and shopping and decisions about finances. With the cutbacks in all those services, we are heading for crisis.

In making the changes, councils are often failing to consult. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) referred to legal challenges resulting from lack of consultation. I believe that the number of judicial review cases has increased by 45%. The renegotiation of fees for residential care provision by councils is also putting great pressure on the care home market. That was not the only reason for the collapse of Southern Cross, but it was certainly one of the reasons.

I welcome the Minister’s statement today on Southern Cross, and I will take the opportunity to ask him three questions arising from it. First, has he established who all the landlords are? Secondly, he said that there is an expectation of a formal transfer of the care homes, with the second wave by the end of October. That expectation sounds similar to aspiration. How confident is he that that will happen? The third and most important question relates to the reference the hon. Member for Dartford (Gareth Johnson) made to residents’ rights, including their right to know what their future is and where they will live and not have their care home closed. Can the Minister help us by saying whether any Southern Cross homes are likely to be closed; if so, how many and at what stage will residents be told? My fear is that they will be the last to know.

Those are not the only continuing problems. There is a continuing and exacerbated postcode lottery for who gets what services. Tower Hamlets spends five times as much on each older resident as Cornwall, and such disparity leads to unfairness. Our social care system is definitely creaking at the seams.

The good news concerns the Dilnot commission. The Opposition have made it clear that we will work with the Government to find a solution to long-term funding of care based on the Dilnot recommendations, but funding is not the only matter dealt with in the recommendations of Dilnot and the Law Commission. They include less complex matters that may be less financially challenging, such as recommendations to improve available information, to support carers, and to enable portability of care. We want to ensure that that happens, and quickly. Will the Minister assure us that there will be legislation during the next session of Parliament to deal with the Dilnot recommendations? We all agree that we must get on with this.

We must also ensure that the present strains on the care system are dealt with. The concern is that even if we find a solution for the long-term funding of care, we may look at our care system in a few years, and wonder what is left. That is a genuine and continuing concern for all those involved in the sector. I understand that the business in the main Chamber includes an amendment to the Health and Social Care Bill which may help to regulate providers such as Southern Cross, but we have only 10 hours to discuss more than 1,000 amendments, so perhaps the Minister will take this opportunity to explain whether the Bill has been sufficiently changed to ensure that we will be able properly to regulate social care providers, particularly providers of residential care to elderly people, and whether the legislation will be able to help with that.

I welcome the partnership on dignity and care that has been established by the NHS Confederation, Age UK and the Local Government Group to look at standards of health and social care. I agree with many of the contributions that have been made today. There is concern not only about the funding of care, but about the standard of care. I listened to the passionate speeches by many hon. Members about the dreadful way in which some people have been treated. It is clearly hugely important to keep standards are high as possible. I look forward to the report of the Equality and Human Rights Commission, which I understand will be issued in the next few months.

That brings us back to the cuts. I do not want to sound like a broken record, but I take this opportunity again to warn the Minister that if the Government continue to cut local government funding as they are doing, the biggest area of discretionary spend, which is adult social care, will continue to be cut. The much vaunted additional £2 billion that the Minister says is available for adult social care is simply not sufficient. He must not continue to close his eyes to the situation. I know that he feels passionately about the issue, as do we all, but we must be realistic and more must be done to protect the elderly. We must put more money and more investment into social care and ensure that it is not cut to the bone.

12:16

[The Minister of State, Department of Health (Paul Burstow)]

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on securing the debate. The speeches and interventions have demonstrated why we need Back Benchers such as my hon. Friend to raise such subjects, which Parliament has not debated enough over the past 10 or 15 years. That may be one reason why, as several hon. Members have said, social care has historically been the poor relation of the NHS and inadequately funded relative to the NHS.

We should not delude ourselves that many of the problems and pressures that have been amply and passionately described in our debate have emerged in the last 12 months. Indeed, if one takes a run through Hansard reports of the past 30 or 40 years, one sees that they have been raised previously. I do not say that to excuse the obligation that rests with the present Government to address the issues, but I ask hon. Members to bear in mind the fact that we should come to the debate with humility and recognition that past responsibilities were perhaps not fully met.

Attention was drawn to the fact that by 2033 almost a quarter of the population will be over 65. Indeed, some parts of the country have already reached that proportion—my hon. Friend the Member for Newton Abbot (Anne Marie Morris) referred to the situation in Devon. I agree entirely with the point made by my hon. Friend the Member for Dartford (Gareth Johnson) that all too often in these debates we use the language of time bombs and consternation instead of celebrating not just the successes of our health and social care system in supporting vulnerable and frail people, but the contribution that, in turn, older people make in our society, often to their fellow citizens. We should do more of that and I want to make sure that we do.

It is worth saying that if the NHS and social care are to cope, some systems and processes need to change; I will say more about that shortly, but it is also necessary for older people themselves and their families and carers to call the shots about the decisions that affect their lives, so that the system can provide the care that people want, need and feel comfortable with. The whole agenda of personalising services so that people have the resources to be able to make choices and to be in control of those services is important, and the Government are determined to turn that ambition into reality.

Let me say something about the coalition’s commitment to see health and social care provided in ways that achieve better outcomes and deliver more personalised services. A thread running through the comments from hon. Members during the debate is the role of integration, which is a key element in realising better outcomes and better quality in the system. Integration is about care services working together in the interests of people and the local populations they serve, and about learning from one another’s experience and ending up with care and support that is of higher quality, safer, and more comforting than ever before.

We also need a sea change in the nature of the working relationships at local level, so that closer working relationships between local authorities and the NHS become the norm rather than the exception. That is one reason why we have made extra funding available. We can debate and will continue to debate in the House whether that funding is adequate, and I have no illusions about the challenges facing local authorities, but the Government have done much to ensure that local authorities have the resources to address them.

NHS funding that goes directly to local authorities for measures that support social care and benefit health will rise to £1 billion per year by 2014-2015. It is the first time that any Government have made such a significant transfer of resources. This year, £650 million has been allocated to PCTs and transferred to local authorities to invest in social care services. That will benefit health and have an overall impact on well-being. I am under no illusions about the interdependencies between health and social care services to which many hon. Members have alluded during the debate. One must look at both parts of the system to understand and mitigate the impact.

I look forward, as ever, to the next chapter of the report on social care by the hon. Member for Islington South and Finsbury (Emily Thornberry). From what I see, however, and from discussions I have had, I know that the picture is far from clear; it is mixed and different authorities are adopting different approaches to the challenges they face in meeting the Government’s deficit reduction targets. Some local authorities are being smart in the ways they confront those challenges and are looking at using telecare and telemedicine, investing in relevant services, and redirecting resources into earlier interventions that can make a big difference up stream. Other authorities—the ones we tend to hear about in debates such as this—are adopting more of a slash and burn approach and tightening eligibility without thinking through the consequences of such decisions and the impact on services. We need to challenge such actions not only in the Chamber but in our constituencies as constituency MPs. These pressures on the system are not new and we have seen such features for many years. Indeed, the vast majority of local authorities already used substantial need as a basis for eligibility and access to services before this Government came into office.

The £650 million that is being transferred to local authorities from the NHS is on top of the £530 million from the Department for Communities and Local Government that will go directly to social service departments.

[Emily Thornberry]

rose—

[Paul Burstow]

If the hon. Lady will forgive me, I want to ensure that I answer two or three of the key points raised by my hon. Friend the Member for Chatham and Aylesford. One key issue concerned the role of a Minister for older people. I certainly share my hon. Friend’s view that we must ensure cross-governmental dialogue and gain a much clearer understanding of the interdependencies between different policies and actions across the Government as they affect older people. The Government are not currently minded to appoint a Minister with specific responsibility for older people, but my hon. Friend has made a number of suggestions that could be a way to look at the issue. I undertake to take the point away and discuss with colleagues how we might join up services in a better way. A number of colleagues across Government have various responsibilities and we must find ways to ensure a clear articulation of the Government’s approach to ageing and an ageing society. We must ensure that that happens not only nationally but locally.

It would be remiss of me not to pick up on the comments about Southern Cross. I did not quite catch the second question, so the hon. Member for Islington South and Finsbury may wish to remind me of it so that I can answer. She asked about landlords, and the answer is that work to ensure that the transfers could take place required that measure to be concluded. As I understand, all landlords involved have now been identified, but if I am misinformed I will write to the hon. Lady and give her the details.

The hon. Lady also asked about home closures. In the past, I have said that when Southern Cross first made its proposals for restructuring the organisation, it suggested that the medium-term future—the next three or four years—would involve a limited closure programme. It did not specify a number and has not done so since. In some ways that programme is no longer the programme being followed; Southern Cross is effectively managing its own demise and passing homes on to new operators, which will have to make judgments about the economic efficiency of those businesses and the welfare of the people living in the homes, and decide whether they can carry on. We must have good advice and support to manage any closures that take place, which is why I have said on a number of occasions that I welcome the work done by the Association of Directors of Adult Social Services.

The hon. Member for Dartford raised an important point about tenure to which we must give serious consideration. I do not want to make a policy announcement about that today because the issue is complicated. We do, however, need to look at how we can give people a greater sense of confidence in the place they consider their home, and ensure that in the future they cannot be lightly tipped out to find a new care home. I will write to the hon. Member for Islington South and Finsbury about the second question to ensure that she gets an answer.

I appreciate the warm words of support—broadly speaking—that have come from all parties about the Dilnot inquiry and the appetite to get on with action. I will ensure that that appetite is well understood across Government. We are clear that the report submitted by Dilnot in July makes an excellent contribution to providing a framework or scaffold around which we can take forward a wider reform of social care for the future. We will soon set out a further process of consultation not only about the details of implementing the Dilnot inquiry—he sets out a number of parameters in his report that are up for further discussion, not least the one mentioned earlier in an intervention—but about the wider issues of quality in social care that were referred to by the hon. Members for Wirral South (Alison McGovern) and for Newton Abbot. We will approach all those issues in a combined way that will lead to a White Paper next April—that answers the question raised by the hon. Member for Chatham and Aylesford.

It is above my pay grade to announce what is in the Queen’s Speech; that has to be someone else’s job—probably Her Majesty, when she sets it out in detail, and the Prime Minister and the Cabinet who make those decisions. The Government remain committed to legislating at the earliest opportunity to bring in the Law Commission’s reforms and address the question of funding reform. I hope that answers the points of concern that have been raised.

The hon. Member for Chatham and Aylesford also mentioned housing, and she was right to talk about choice. That underscores the need for a cross-departmental approach to ageing and an ageing society, and I will raise her comments with my right hon. Friend the Minister for Housing and Local Government. Given his responsibilities for supporting people, it is important that I do that.

Prevention underlies many points that have been raised today and there is much we can do both to prevent admissions into hospital appropriately and to manage hospital discharges better. The increased roll-out and use of personal budgets will play a part in that, and will provide people with more control over the packages and nature of the care they receive.

The contribution made by the voluntary sector and charities has rightly been highlighted in this debate, in particular the role that such organisations can and do play in tackling social isolation. They also provide practical, low-level help—for example, helping to change a light bulb, which sometimes seems to take for ever. We must ensure that communities feel confident to give that help and are given support to provide mutual aid. Through our work on the big society we are determined to see that through. Local councils have an important role in improving health and well-being through commissioning those low-level services, and that has been well described in the debate.

The hon. Member for Newton Abbot expressed some concern about the role of the CQC. Like her, I met representatives from the care sector to discuss their views about what will soon be the first full year of operation for the CQC. The CQC was established in 2009 but has been fully operational only since October last year. Not all of what it does and will do has been explained to care providers as clearly as it should have been, but some of those defects are now being remedied. Just last week I had the opportunity to visit the CQC and see the work it is doing to establish a new, much simpler website. That website will provide a lot more information to providers about how issues of compliance with essential standards are being addressed.

Energy Powers (Wales)

Tuesday 6th September 2011 Westminster Hall

12:30

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Prynhawn da, Mrs Main. It is a pleasure to serve under your chairmanship. I appreciate the opportunity to open this debate on the Government’s policy on devolution of energy planning powers to Wales, and I look forward to the Minister’s response.

I wished to give this speech in the report stage of the Localism Bill in May, when my new clause 11, relating to the transfer of powers to grant consent for electricity generating stations in Wales, was selected for debate. However, I was not called, as almost 50 amendments were selected for debate within two hours, and the guillotine prevented me from making a contribution. I am therefore grateful for the opportunity to make points today that I wished to make then.

That new clause related to schedule 13 of the Localism Bill, which scraps the Infrastructure Planning Commission, transferring its power to the Secretary of State. During my 2010 general election campaign—as my constituency neighbour, the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), will be aware—I stood on a specific pledge to scrap the IPC. I am therefore delighted that Ministers in London have delivered for me to a certain degree on that point. At the time of the Planning Act 2008, my party, Plaid Cymru, along with the Conservatives and Liberal Democrats, opposed the creation of the IPC by the then Labour Government as undemocratic and taking political responsibility and scrutiny away from Ministers. We therefore welcome the Government’s decision to pull the plug on the organisation. The question, as it was in those debates in 2008, is where those powers should now reside. I fear that is where the coalition Government are undermining the second half of my election pledge, and where there is clearly some convincing work left to do.

The successful referendum in Wales earlier this year showed support and an appetite for devolution among the Welsh public, with around two-thirds voting in favour. The topics included in that referendum did not come from a wider discussion on the whole issue of the devolution settlement, but were chosen by the former Labour Government and included in the Government of Wales Act 2006. The referendum was fought within the narrow confines of the 1997 settlement regarding devolved policy fields. The key point about the referendum was that the yes campaign—which secured an overwhelming victory, far beyond anything I envisaged—used parity with Scotland as its battering ram. Equality with our Celtic cousins is a powerful message in my country, and it is a very dangerous political game for those who underplay that fact.

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate the hon. Gentleman on securing the debate. He will be relieved to know that at the time of the Government of Wales Act 2006, Liberal Democrats tabled amendments to seek the devolution he seeks on energy matters.

There is another inconsistency—not just the territorial one between Scotland and Wales—which is felt by many local people. On the one hand, in TAN8—technical advice note 8—strategic areas are defined by the National Assembly, yet the ultimate planning decisions for power installations over 50 MW rest in Westminster. Many people find it difficult to grapple with that inconsistency.

[Jonathan Edwards]

I am grateful for that intervention, and I am glad that the hon. Gentleman takes a consistent position. I will address some of those concerns later and will allow him to intervene if he wishes to do so. I am glad to hear the thrust of his comments.

We believe that unfinished business with the devolution settlement remains, which will come as no surprise to colleagues. Polls in Wales agree with us that criminal justice and policing should be devolved, as should broadcasting and financial powers. Natural resources and energy are other areas that we believe should be devolved to the National Assembly and our own democratic institutions in Wales. That is not a new discussion point. Indeed, the first bids in relation to the devolution of powers in the area of energy and natural resources were made in 2003, and a not particularly successful working group from the Wales Office, the Welsh Government and the UK Government tried to resolve the situation. The issue was raised again in discussions on the 2007 White Paper which preceded the Planning Act 2008, which created the IPC.

The argument is largely one of common sense, to add to the points made by the hon. Member for Ceredigion (Mr Williams). Local planning authorities in Wales, under Welsh Government policy, currently have the power to consent to new or increased electricity generating stations up to 50 MW, but anything greater on land is dealt with currently by the IPC and—following the introduction of the Localism Bill—by the Minister in London. My key point is that in Scotland planning powers for all energy developments are fully devolved. The 50 MW limit was written into the Electricity Act 1989 and imposed on the National Assembly on its creation in 1999. The 50 MW appears to be an arbitrary figure with no real justification for its existence. It makes little sense that a generating station of 49 MW should be decided upon in Wales, but 51 MW by the IPC in London or by UK Ministers. The issue is one of consistency of approach and of planning.

[Glyn Davies (Montgomeryshire) (Con)]

This matter relates to discussions we had before the general election, when the Assembly seemed to be looking at changing that level from 50 MW to 100 MW. I have a fairly open mind about these issues and, as we have just had a referendum, I am reluctant to consider a change now, which is a point that the hon. Gentleman addressed earlier. Does he feel it is 100 MW—including everything, in Pembrokeshire as well—for these power stations?

[Jonathan Edwards]

That would be the difference between me and some of the London parties. I would favour full sovereignty over energy powers. I will address the specific point that the hon. Gentleman raises about the 100 MW level later and will happily allow him to intervene.

The National Assembly’s research service tells us that 39% of applications have been submitted to the IPC, the body that is about to be abolished; 26% of applications are with the UK Government’s Department of Energy and Climate Change; and 36% are decided by local planning authorities. Therefore, only a little more than a third of all decisions on applications to do with energy generating stations in Wales are based on planning policy devised in Wales. In my view, that is clearly unsatisfactory, as the purpose of devolution is to reflect Welsh feeling and attitudes. There is no denying that Wales wants to be a greener country and wants to specialise in renewables and the green economy. Indeed, sustainable development is written into the constitution of the National Assembly. However, if two thirds of planning applications are decided outside our borders and our jurisdiction, even though they may impact on us on a day-to-day basis, that is not power devolved, but power retained. I would hope that as part of the respect agenda, the UK Government would want to address that enormity.

The Plaid-Labour one Wales Government, to whom we were proud to belong, were very much in favour of transferring further powers to Wales. They were not alone, with environmental and civic organisations such as the Campaign for the Protection of Rural Wales and Friends of the Earth indicating their support and including it in their manifestos for this year’s National Assembly elections. The issue was raised during consideration of the Planning Act 2008, when the IPC was first created. My right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd) tabled an amendment in Committee, but it was not moved. The Liberal Democrats then moved a similar amendment on Report.

The right hon. Member for Wentworth and Dearne (John Healey) told the House:

“We have had detailed discussions, not just with the Department for Business, Enterprise and Regulatory Reform but with the Welsh Assembly Government and the Wales Office.” —[Official Report, 2 June 2008; Vol. 476, c. 518.]

However, there is no easily available record of what those discussions entailed or what the conclusions were. I can only assume that the Labour Government in London denied their colleagues in Wales the right to have the powers I have set out.

To return to the 2008 Act, the Liberal Democrats pushed their amendment to a vote, seeking specifically to exclude Wales from the remit of the IPC. Labour voted against the amendment, and the Conservatives abstained. The Liberal Democrats, of course, voted in favour of their amendment, as did my colleagues and I. Those who voted for it included the right hon. Member for Eastleigh (Chris Huhne), who is now the Secretary of State for Energy and Climate Change, and the right hon. Member for Sheffield, Hallam (Mr Clegg), who is now the Deputy Prime Minister.

Since then, the Welsh Conservatives have published their 2011 National Assembly election manifesto, which commits them to increase the present level from 50 MW to 100 MW. Likewise, Labour in Wales supports raising the bar. Even 100 MW is an arbitrary figure, but it represents a significant improvement on the current situation, specifically in relation to renewable energy-generating developments.

There therefore seems to be cross-party agreement in Wales, and there needs to be progress on the current situation. I can only hope that the London parties’ Welsh colleagues have agreed their proposals with their bosses in London, because there seems to be a divergence between the views of the parties in Wales and what is being said down here in Westminster.

My hope is that the issue can be dealt with in the Localism Bill, and my noble Friend Lord Wigley will table amendments to it in the other place. If the Bill cannot do so, however, I hope that it will be dealt with by the new commission that the UK Government have announced will look into further powers for Wales over the next few years.

I would like to highlight a point that makes a mockery of the current system in my constituency. My constituency is home to TAN8 areas. Those are specific strategic zones, which have been designated by the Welsh Government for the location of large onshore wind projects. Where there is a concentration of such developments, there will understandably be a public backlash, and the hon. Member for Montgomeryshire (Glyn Davies) has been vociferous in setting out his concerns about developments in his constituency.

To mitigate such concerns, councillors in Carmarthenshire have proposed that the local planning authority adopt an enhanced 2 km buffer zone between individual projects and inhabited areas, and the proposal has great support among local people. However, even if Carmarthenshire county council adopts the policy, it will apply only to developments below 50 MW. Clearly, many developments in TAN8 areas will be above 50 MW. It is no wonder local people are confused; to be honest, I am confused myself. It is not only my constituents and me who want clarity. During a recent visit by the Select Committee on Welsh Affairs visit to Düsseldorf, we met renewables investors, who informed us that having different planning guidance was a disincentive to invest.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

On that point, the hon. Gentleman will be aware of the proposal for the Atlantic array, which will construct 417 turbines 15 miles off the south and west Wales coast and also have an impact on the north Devon coast. How would his plans take effect when two countries and a number of other parties have an interest in such a major offshore development?

[Jonathan Edwards]

I was going to say something about that in my concluding comments, so if the hon. Gentleman will bear with me—

[Simon Hart]

I can wait.

[Jonathan Edwards]

That saves me having to rewrite my speech halfway through.

[Mrs Anne Main (in the Chair)]

Order. I ask the hon. Gentleman to continue.

[Jonathan Edwards]

Thank you, Mrs Main.

Let me return to the new clause that I proposed to the Localism Bill. It would have included generating stations not only on Welsh dry land but in Welsh territorial waters. The intention was once again to ensure consistency between the aims of the Welsh Government and actions around the Welsh coast. Under the Marine and Coastal Access Act 2009, consents for generating stations up to 100 MW are given by the Marine Management Organisation and, for levels above that, by the IPC. I see no reason why those powers should not be wholly transferred to the Welsh Government.

This is not an idle debate about devolving powers. A forward-thinking Welsh Government should look at the significant potential of our waters—the chance to generate clean, green energy and the economic potential that arises from it. The most prominent example of that would be the opportunity to develop a tidal lagoon in Swansea bay, which is usually quoted as being able to generate about 60 MW of electricity. The plan has been in the pipeline for decades, but we are still discussing how we can bring it into being. Giving the Welsh Government powers over electricity generating station consents at all levels would allow consistency of approach, add coherence to planning regulations and end the anomaly based on arbitrary figures for megawatt production.

During Third Reading of the Localism Bill, I made an intervention on the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), who agreed to meet colleagues and me. It was a constructive session, and I thank him for the manner in which he listened to the points made by my hon. Friend the Member for Arfon (Hywel Williams) and by me. He has since written to me to confirm some of the points raised in that meeting on 13 June.

First, the right hon. Gentleman confirmed the disparity between energy legislation powers in Wales and Scotland. It exists because, before devolution, planning law was devolved to Scotland but not to Wales. Therefore, the energy consenting role was transferred to the Scottish Parliament on its inception, but it was not given to the National Assembly for Wales. That historical precedent suggests that with planning powers now in the hands of the Welsh Government, energy consent functions should also be transferred. Will the Government confirm that they plan to honour that precedent in the long term?

The right hon. Gentleman’s letter also confirmed that there were more recent discussions with the Welsh Government in September and October last year. At the time, the relevant Welsh Government Minister argued that renewable energy consents in Wales should be increased from 50 MW to 100 MW, a position that has since become the official Labour line and has been taken up by the new Government in Wales. It was rejected by the Secretary of State for Energy and Climate Change, who said that UK Ministers are responsible for meeting the UK’s renewable energy target and therefore best placed to take decisions on applications for larger renewable projects, and that UK Ministers are responsible for drawing up and designating national policy statements. I hope the Minister can explain why the Secretary of State has changed his mind and why he has performed a 180° turn on the position he voted for in opposition during consideration of the Planning Act 2008. I am sure the hon. Member for Ceredigion would like that clarification, as would I.

The argument seems to be that UK Ministers have decided the rules, so only they can participate in the game. That does not make for a coherent argument in a devolved United Kingdom, and it makes for even less of a coherent argument on energy, which is an international issue. On an issue where there is agreement across the board on the need for change in Wales, I would welcome an indication from the Minister that there will be proper bilateral discussion and debate, and that would probably best take place during the proposed Welsh Calman process, which will happen in the next few years.

It is clear that on energy, as on other devolved issues, communication is paramount. The hurdles can be overcome if the UK and Welsh Governments wish to overcome them. To address the point raised by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), my colleague Lord Dafydd Elis-Thomas told the National Assembly in a similar debate on 6 July:

“There is no reason why there should not be a renewable policy that could be co-ordinated between the nations of the UK. It is not for the United Kingdom to keep responsibility for itself in taking actions on behalf of Wales and Scotland, but a matter on which we should work together.

To finish, Wales should have the same responsibility as Scotland over the utilisation of its natural resources. Diolch yn fawr.

12:49

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

It is a pleasure to serve under your chairmanship today, Mrs Main. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this important debate. I think I am going to disappoint him to a certain degree in not being able to agree with him on several matters of substance, but I am glad that we were able to start on a strong degree of consensus, by agreeing that scrapping the Infrastructure Planning Commission is important—not least to help him to deliver on his own manifesto commitments. He raised important issues to do with how major energy infrastructure projects in Wales should be determined in future. I congratulate him on the cogent and articulate way in which he did so.

I have 10 minutes to reply. I will write to the hon. Gentleman to make clearer any points that I am unable to cover in detail. He raised the Localism Bill, the abolition of the IPC, the referendum in May, inconsistencies between devolution settlements in Scotland and Wales, applications for consent under section 36 of the Electricity Act 1989, and recent discussions on devolution of major energy infrastructure. He also raised cross-party agreement in the National Assembly about devolution in Wales, several issues to do with technical advice note 8 strategic search areas, the impact on wind farm developments, particularly in his constituency and the wider area, and the different bodies making decisions on energy developments of different sizes in the same area; I agree that that can seem confusing, but we think that it has some strong underlying logic.

Overall, the Government’s policy on the area in question is clear: subject to the Localism Bill receiving Royal Assent, we believe that the right decision maker for major strategic energy infrastructure in England and Wales is the Secretary of State for Energy and Climate Change. We believe that a streamlined planning system that minimises delay and unpredictability and, importantly, ensures investor confidence, is best delivered through a unified strategic planning system for major energy projects in England and Wales. Some may argue that it is not appropriate for UK Ministers to make decisions on major infrastructure applications in Wales. We would strongly disagree. UK Ministers are as accountable to Welsh voters as they are to English voters and, in the absence of any compelling evidence to support a change, we vehemently believe that it is appropriate for UK Ministers to take those important decisions on major infrastructure of national significance.

A number of reasons have been set out to show why Welsh Ministers should make major energy infrastructure decisions, and I appreciate the points that the hon. Gentleman made, but the Government see no evidence for reconsidering our strongly held position. The coalition Government’s policy on the matter is exactly the same as that of the previous Labour Administration. It is important to consider the referendum on further Welsh devolution that was held on 3 March. There was a 63.5% vote in favour of the Assembly being able to legislate in a further 20 areas. I take this opportunity to wish the Assembly every success as it takes on that large tranche of new responsibilities. However, so soon after an important referendum on the scope of the Assembly’s powers, now is not the time to start to unpick things and revisit the question; it is not an appropriate moment to consider substantive changes to the devolution settlement as it affects energy consents. We need to leave the settlement as it is.

[Jonathan Edwards]

Does the hon. Gentleman recognise that his party fought the recent National Assembly elections, after the referendum, on the basis of increasing the threshold to 100 MW? Is he saying that those manifesto commitments were not worth the paper they were written on?

[Gregory Barker]

No. What I am saying is that the overarching decisions in the area are informed by the coalition agreement of the Government. That is the basis on which we make our important decisions, and we stand by those.

In Wales, the Holtham report suggested that Wales is underfunded, and recommended borrowing powers and devolution of some taxes. The Government have said that they will consider the Holtham report with the Welsh Government and, following the commitment in the coalition agreement, will establish a commission to consider funding and finance for Wales. The Secretary of State for Wales has announced the outline of that, and there will be further announcements to follow.

The Localism Bill is currently going through Parliament. The Bill would amend the Planning Act 2008, abolishing the Infrastructure Planning Commission and returning decisions to democratically elected and accountable Ministers. The Government believe that the Planning Act regime and the changes proposed in the Localism Bill need time to bed in to ensure that important matter of investor certainty. That is another reason why we do not believe we should take the hon. Gentleman’s suggestions forward. It is important to note that the impact of the abolition of the Infrastructure Planning Commission for Wales is minimal, and no different from the impact for England. The pre-application and examination procedures will remain the same and they will be handled by the Major Infrastructure Planning Unit, the IPC’s successor. However, final decisions will be made by Ministers accountable to Parliament.

It has been pointed out by the hon. Gentleman that the current planning system is confusing, as different authorities determine different-sized energy projects. That was an important part of his argument. We acknowledge that, for example, wind farms of different sizes in the same area are given consent by different bodies in both England and Wales: so a wind farm of 50 MW or less would be given consent by a local authority, while a neighbouring wind farm with a generating capacity over the 50 MW threshold would be determined by the Infrastructure Planning Commission, or, following its abolition, by Ministers at the Department of Energy and Climate Change. We believe that thresholds must be set somewhere, and that on balance those I have outlined are the right ones for the national interest. There is still significant scope for smaller projects to be determined by the local authority. Major energy infrastructure, given its national significance, should be determined at a national level.

On whether there is already enough planned energy infrastructure capacity, it is sometimes argued that there is enough in the pipeline. However, projects under construction or with planning consent would only replace the capacity lost through closures, which is currently expected to be about 22 GW. That does not take account of the need to move to low-carbon sources of generation, or of the need to increase the amount of capacity available to take account of the switching that we will need from fossil fuel to low- carbon electricity in domestic heating and transport. There is no guarantee that any given project will receive consent, or, having received it, will be built. When projects have been registered with the IPC those are not applications for consent; the companies have registered their interest in the application process. Projects in the pre-construction phase are not guaranteed to be built. The Department’s White Paper on market reform shows that up to £110 billion of investment in electricity generation and transmission is likely to be required within the next decade.

We also acknowledge that Welsh issues should be taken into careful consideration for major energy infrastructure applications within the Principality, and, of course, they already are. Currently, IPC commissioners with expertise in Welsh issues are appointed to panels for Welsh applications. It is very important that, following the abolition of the IPC, Welsh issues should continue to be considered in major infrastructure applications.

Options are still being considered for how the new unit will work within the Planning Inspectorate. Welsh Government officials are significantly involved in that integration work. The national planning statements require decision makers to take into account where appropriate the technical advice notes in Wales, which have been mentioned at length in the debate. So Welsh policy issues have significance and will be taken into account when an important planning decision is made. We certainly regard the views of local people as important. All major applications for energy infrastructure in Wales are dealt with on a case-by-case basis, after the views of local people have been taken into account. There are two opportunities for local people to have their say: first, when applications are being prepared for the submission to the IPC, the developer must consult widely with the local community; secondly, during the IPC’s examination of an application, any member of the public can submit evidence to the IPC.

The review of TAN8 is a matter for the Welsh Government. If there is a review, we shall take due account of its progress while considering individual applications in respect of which it is a material consideration, but we would not expect to suspend our consideration of applications while any review of TAN8 is being carried out, unless requested to do so by the developers concerned.

I am sorry that, because of limited time, I have not had the opportunity to reply at length to the questions posed by the hon. Gentleman but, as I said at the outset, I shall be happy to write to him on further specific points.

Special Needs Education

Tuesday 6th September 2011 Westminster Hall

13:00

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I shall begin by declaring an interest. I am patron of Diverse Abilities Plus, a Dorset charity that, among a range of activities, runs Langside school. I have a long acquaintance with the charity, which was formerly known as Dorset Scope, and with the school. I have seen the school’s intake change over many years; the children now have extremely complex needs. It is a fantastic school. Sadly, since the last boundary changes, it is no longer in my constituency, but I share its concerns about the future. The Minister will be aware that I have an equal passion for Montacute school, a maintained school that I expect to gain academy status; the children there also have complex needs. I believe that the schools complement one another, and that both should be allowed to thrive to ensure that we give children with disabilities the very best start in life. The charity’s name change reflects well on the positive outcomes that can be achieved with the right support.

I welcome the Government’s recent Green Paper on special educational needs, and its vision to improve outcomes for children and young people who are disabled or who have special educational needs. In particular, I believe that there is widespread support for a joint education, health and care plan, and I share the Minister’s aim to minimise the adversarial nature of the system for families. The role of special schools in providing specialist expertise is also recognised. However, concerns have been expressed about the provision of special needs education by non-maintained and independent special schools, which cater for around 13,000 of the most vulnerable children in the country who have wide-ranging but complex needs.

As well as Langside School, I have been contacted by the National Association of Independent and Non-Maintained Schools—NASS—which reminds me that I know well and value highly another of its members, the Victoria centre in Poole. I have also heard from I CAN, the National Autistic Society and Ambitious about Autism. I CAN has two special schools, Meath school in Surrey and Dawn House school in Nottingham, which specialise in providing intensive support for pupils aged four to 19 who have severe or complex language and communication needs. As well as supporting children directly in their settings, I CAN schools provide outreach to the mainstream, facilitate academic research and provide an assessment service for local authorities and parents. Both schools were rated as outstanding in the 2011 Ofsted inspection care reports.

The National Autistic Society provides six specialist schools for children with autism and complex needs. Inspectors recognise that those schools are excellent and provide good out-of-school services. Ambitious about Autism runs the TreeHouse school, with its outstanding provision; I am proud to have visited it. I mention those schools to give a flavour of the type of school that I wish talk about today.

I thank the Minister for generously allocating time to meet representatives from NASS earlier this year. However, its concerns remain and I am pleased to have secured this debate so that I can seek further clarification about the future of the sector in the Government’s vision for provision for children with special educational needs. There is deep concern that non-maintained and independent special schools are misunderstood or have been overlooked by policy makers. As a result, the sector faces a number of challenges in connection with its funding arrangements and the policy environment in which it must operate.

Ambitious for Autism has written to me, and I would like to share what it says with the Chamber. The Minister will be aware there are over 70 non-maintained special schools; they are approved by the Secretary of State for Education under section 342 of the Education Act 1996. To become approved, the schools have to be non-profit making and have demonstrated that they operate to a level at least equivalent to state maintained special schools. Their day-to-day running must be controlled by a governing body, the articles and instruments of which are to be agreed by the Secretary of State. To keep that status, schools must comply with the non-maintained special school regulations. Local authorities fund pupils to attend them. The schools cater for pupils with extreme and/or low incidence difficulties, and they provide specialist schooling.

The charity writes:

“While we welcome the diversification of provision for children with special educational needs, the creation of special academies and special free schools has created additional complexities and uncertainties for the special school sector.

Non-maintained special schools share many key characteristics with special academies and free schools, in that they are effectively special schools with freedom from local authority control but are not independent schools. However, the funding systems for these types of schools are all different, which creates unnecessary complexity and confusion in the system, as well as the potential for an unfair playing field.

Furthermore, special schools are being asked to apply to become special academies and special free schools without adequate information about the funding implications. This information is essential if the Government is asking schools to consider these options and make informed decisions.

Ambitious about Autism is increasingly concerned that a new and separate model is being developed with very little regard for the impact that this may have on a large number of highly successful schools that continue to provide an excellent education to some of the most complex children in England. We would welcome the opportunity to further engage with Ministers about new funding arrangements.”

For the purposes of this debate, I turn to the Green Paper on SEN, and specifically to page 52, which clearly states that parents will have the right to express a preference for any state funded school, including academies and free schools, but that does not seem to extend to non-maintained and independent special schools. That is despite the Government’s commitment to develop a national banded framework for funding provision for children and young people with SEN that has the potential to create greater transparency of funding. That needs clarification, as both non-maintained and independent special schools are usually funded by local authorities rather than parental placements, which means that in legal terms they are similar to academies and free schools and have less in common with the mainstream independent sector.

NASS is concerned about a response given by the Minister to the Select Committee on Education, which it says implies that parents will get the choice of a non-maintained and independent special school only after other local options have been considered. The association believes that this exclusion is based on untested assumptions that non-maintained and independent special school placements are always more expensive than similar placements in the maintained sector, and it calls on the Government to give parents the right to express a preference for a non-maintained or independent special school.

I hope that the Minister recognises those concerns and that she will give a clear answer on whether parents will be able to choose non-maintained or independent special schools. We also need to know why parents are given the choice of free schools but not schools from the non-maintained or independent sector.

The perception is that places at non-maintained special schools are consistently more expensive than local authority provided packages of support for children with the same level of need. NASS quotes the Minister as speaking of parents pressurising local authorities for expensive independent school places, but that should not be needed if the Government get early intervention right. There are two issues here: is provision more expensive, and will early intervention obviate the need for highly specialist provision?

On the first, as a former chair of education for a small local authority, I understand only too well the financial pressures of providing expensive placements. The costs of providing the right services for a child with complex needs are high. However, a local authority should not have to fund entirely these low-incidence cases, as such highly specialised provision is likely to be provided over a wide area.

In a recent constituency case, a young person with autism needed a highly specialised course that entailed residential provision. Some children and young people with autism and many other conditions have extremely complex needs and need highly specialist provision with perhaps a 24-hour curriculum. Obviously, in this period of reduced resources, it is crucial that the Department for Education and local authorities do more to achieve better value for money in the commissioning and delivery of special educational needs. As there is lack of information available in the SEN sector about cost-effectiveness, I urge the Department for Education to commission research on the cost of placements in the non-maintained and maintained special school sectors. The non-maintained sector obviously has accommodation, social care, health and allied therapy costs that will be reflected in direct financial transactions, so we need true costings for both sectors. That would go some way towards ensuring that there is a level playing field between the non-maintained and maintained special school sectors and that value for money is delivered at this time of fiscal restraint.

What evidence can the Minister point to that indicates that places at independent and non-maintained special schools are consistently more expensive than local authority packages of support for children with the same level of need? If there is no evidence on that at the moment, can it be collected?

There cannot be any disagreement about the value of intervention in early childhood for children whose needs can be identified early. In addition, the SEN Green Paper asserts that good early intervention will reduce the need for placements in non-maintained and independent special schools. NASS is concerned that that reinforces the view that placements in its sector are made only as a result of family breakdown or poor early placements. The small group of children who actively benefit from residential placements would like the Green Paper to say more about the role of residential provision and how it will be supported or explored further. Will the Minister provide some comment on that matter?

NASS would like greater recognition by the Government of early intervention for emergent special educational needs later in childhood. Although those often relate to early life experiences, some social, emotional and behavioural difficulties are not apparent until later in the child’s life. Often such young people are then subjected to multiple interventions before specialist assessment and support is offered. NASS would like to see this group of children and young people better reflected in the Green Paper.

I have two specific concerns about the treatment of this sector compared with the maintained sector, particularly bearing in mind the fact that 99% of places are funded through the public purse as a result of local authorities making placements. In legal terms, it is very similar to academies and free schools, and it has less in common with the mainstream independent sector.

One concern relates to specialist school funding. NASS discovered by chance that funding for non-maintained special education schools had not been allocated as part of the move to direct school grant funding. It was concerned about that, especially as it seemed that those schools under local authority control had actually received a commitment that money would still be passed on to them. It seems that there was a communication problem within the Department, and the schools will now receive only a proportion of the money they were originally expecting. Clearly, there are some concerns, especially around communication.

At the end of July, NASS was made aware that new non-maintained special school regulations had been laid before Parliament on 8 July—they came into force on 1 September 2011. Neither NASS nor the schools had been made aware that that had happened. By then, schools were on summer holidays and were unaware of the new regulations to which they were returning in September. I am aware that NASS contacted officials at the Department for Education and also wrote to the Secretary of State for Education in August 2011, but it is still awaiting an official response.

Finally, special schools in the independent sector are concerned about Lord Hutton’s recent review of public service pensions. There is great concern that teachers in the independent sector might be excluded from the pension scheme, which would affect movement between the two different sectors quite considerably and could affect the supply of highly qualified and specialised teachers.

In conclusion, will the Minister provide assurances that the excellent specialist provision that the sector provides for some of the most complex children is recognised and is not hindered, and that there will be a level playing field in which such schools can operate?

13:16

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this important debate. May I also say that it is a pleasure to serve under your chairmanship, Mrs Main?

I should like to cover three specific points that the independent sector has raised with me. First, will personal budgets proposed in the SEN Green Paper be available to enable parents to purchase provision in the independent sector? Secondly, is there any desire to implement the auxiliary aids and services provisions for education in the Equality Act 2010? That could have a huge impact on independent schools, with schools having to fund additional provision which, historically, individual parents have paid for under their contractual arrangement with independent schools.

Finally, if an independent school does not offer a place to a pupil with special educational needs, the school could be open to a disability discrimination challenge, while mainstream pupils who are refused places have no such rights. Is it right that an independent school should find itself in such a position? The place will have been refused for sustainable reasons yet the schools are “forced” to spend thousands in order to defend their position with no prospect of being awarded costs even if they are successful in defending the claim at a tribunal. I said that I would be brief. Those are the three specific points on which I seek clarification from the Minister.

13:17

[The Minister of State, Department for Education (Sarah Teather)]

It is a pleasure to serve under your chairmanship, Mrs Main. I think it is the first time that I have been in Westminster Hall when you have been in the Chair.

I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this useful and timely debate. I am aware of her long-standing interest in this issue. She kindly mentioned that I attended a meeting that she called with a number of schools from her area and nationally. I am grateful to have this opportunity to place some issues on the record and to clarify some of the points that she has raised.

Independent and non-maintained special schools play a valuable role in supporting some of our most vulnerable children and young people, many of whom have very complex needs, and they also have considerable expertise to offer other schools. My hon. Friend mentioned a number of schools in her constituency, outlined their particular expertise and what they are able to offer to children and families. I pay tribute to the impressive work that schools in her constituency and across the country do in supporting children and families. They make an invaluable contribution to supporting children and to the sector as a whole. Independent and non-maintained schools are an established part of the landscape of special educational needs provision in this country and they form an integral part of the diverse range of schools that we are seeking to establish, in order to improve choice for parents and support for children and young people.

In the time available to me, I want to try to pick up on the points that were made by my hon. Friend and by the hon. Member for Gillingham and Rainham (Rehman Chishti). Both hon. Members will be aware that this debate takes place relatively soon after we published a Green Paper on SEN and disability. We carried out a consultation that received 2,400 responses and we are going through all those responses. They were very varied, coming from education professionals, including teachers, families and health workers. Later this year, we will publish a formal response. So I take this debate in the spirit of that consultation. We are still in a period of gathering information and views about our Green Paper before deciding how to work through some of the proposals that we made and to ensure that we get the detail correct. During this period, we are also establishing local pathfinders to test out some of the best ways of delivering the change that we have proposed. We will announce details of those pathfinders later this month.

My hon. Friend made a number of specific points about naming schools and school choice. It is perhaps worth my placing on record what the Green Paper says. We are widening the range of schools from which parents can choose by enabling parents, teachers and others to set up free schools and by allowing existing schools to become academies. The free schools route also provides an opportunity for non-maintained schools to seek academy status if they wish to do so. We intend to change the law so that parents of children who would have an education, health and care plan have the right to express a preference for any state-funded school and to have that preference considered on the same basis, whether it is for a special school, a mainstream school, an academy or a free school.

My hon. Friend asked why we have not made a similar provision for parents to express a formal preference and then for local authorities to name a school if it is a non-maintained school or an independent school. It is about the original purpose of the legislation, which is to ensure that parents get that choice—often when a school may not choose to take the child. As she will be well aware, the process is that parents are able to express a preference and the local authority will then consider whether that is the right placement for that child, subject to the legal provisions about the best use of resources and whether it will have any detrimental effect on the education of other children. At that point, if the local authority agrees—if it does not meet the conditions, it has to agree—to place the child in that school, it formally names that school and the school is forced to take the child.

Of course, non-maintained schools and independent schools do not want to be forced to take a child and, in a sense, that is a point that the hon. Member for Gillingham and Rainham made when he raised wider issues about disability discrimination legislation. We have a diverse range of schools and there are balances of freedoms and restrictions applied to different schools. If non-maintained schools want to take on slightly different freedoms but also different restrictions, they have the freedom to apply for academy status, and independent schools have the ability to apply for free school status, as I outlined a while ago. In doing so, they trade some of the freedoms that they already have and gain different restrictions. Therefore, it does not make sense in that situation to extend the legislation so that schools would be forced to take a child, and I do not think that that is something that those schools would want to do. However, I stress that parents will continue to have the right to make representations for a place at a school that is not state-funded and the local authority must take those representations into account when it makes its decisions on placements. We are not proposing any change to that process in the Green Paper.

My hon. Friend raised points about whether non-maintained special schools and independent schools are always more expensive. She quoted some things that I had said at a hearing of the Select Committee on Education. I think that they have been taken very slightly out of context. It is true to say that some independent schools and some non-maintained schools are more expensive than state-funded provision, but I have not said at any stage that all non-maintained special schools and all independent schools are always more expensive. It would simply be incorrect to say that. We have spoken to the National Association of Independent Schools and Non-Maintained Special Schools on this point and we have tried to encourage it to submit its own evidence about costs to the review about school funding, which is ongoing. We are out to consultation until about mid-October and we encourage those in the sector to submit what evidence they have about costs and to say whether full costs are being taken into account. Such evidence would be very useful when we are considering what we do with pupils, particularly those high-cost pupils about whom my hon. Friend spoke earlier.

It is also worth saying that local authorities are obliged to make decisions about placements on an individual basis. There is no doubt that for some children attending an independent or non-maintained special school will be absolutely the appropriate and right course of action for them, and the local authority is then required to fund a place for the child at that school. In fact, the number of children who are being educated in the independent sector has risen, not fallen, during the past five years.

My hon. Friend made some points about a local offer and the information that is available to parents. Local authorities already have a statutory duty to give parents information about non-maintained special schools and independent schools in their area. It is up to local authorities to decide whether to include that information in their local offer and that is something that we would like local authorities to develop on a local basis.

My hon. Friend did not mention the issue of the work force, but I wanted to make a couple of points about that because NASS raised it with us in its response to our consultation on the Green Paper. Independent and non-maintained special schools can now apply to become teaching schools if they are rated “outstanding” by Ofsted and have experience of collaborating with other schools. As I said earlier, however, those schools have such a lot of expertise that I want to encourage them to join an alliance with other schools in their area to form a teaching schools partnership, so that we can ensure that we are making use of the expertise that they have.

My hon. Friend very fairly made some criticisms about communication between the Department for Education and other organisations, particularly NASS, in the past few months. Those criticisms are absolutely fair and valid. Indeed, I wrote to Claire Dorer of NASS just this week to say that some of the failures of communication have been, in my view, inexcusable and that I am absolutely determined to ensure that they are not repeated. The Department is in regular contact with NASS on many of the points that my hon. Friend has raised. It is not an excuse, but by way of offering an explanation I will say that there has been some reorganisation within the Department about responsibility for some of these issues and unfortunately that has led to some issues of miscommunication.

I will come back to the other points that my hon. Friend made, but first I will address the specific questions that the hon. Member for Gillingham and Rainham asked. He asked about personal budgets and whether parents would be able to buy provision in the independent sector. The answer is yes, but we think that it is unlikely to apply to the whole school place. That is something that we are testing at the moment through our pathfinder schemes, but we think that it is unlikely to be practical to apply to the whole school place. Of course, as I stated a short time ago, if that provision is correct for a child, local authorities are already bound to fund the whole school place anyway, but they may well be able to pay for some of the extra provision that might be offered in a particular school.

Are we going to implement the auxiliary aids and services regulations? It is our intention to do so. There has been some delay in our doing so. Of course, the regulations will apply to all schools and not just to independent schools; all schools will be bound by them.

The hon. Gentleman also made the point about independent schools being open to disability discrimination challenge if they fail to accept a child. That is the flipside of the other point that my hon. Friend the Member for Mid Dorset and North Poole made earlier about naming a school. If a school is state-funded, the local authority can specifically name it and ensure that it is forced to take a child. It is a similar attempt to protect things for families.

In the last minute available to me, I want to respond to the points that my hon. Friend made about the Hutton report. We are, of course, looking at this issue as we consider how to deal with the detail of the recommendations made by the Hutton commission. There will be some issues to balance about what we do and there are, of course, pros and cons attached to private sector bodies’ participation in public sector pension schemes. That is something that we will have to consider with the teaching profession as a whole, but I understand the points that my hon. Friend raised.

In the time available to me today, I have done my best to answer all the points that my hon. Friend has made. There are two other points about funding on which I will respond to her in writing, but I hope that I have responded to all the other points that she has raised.

Palestinian State (UN Membership)

Tuesday 6th September 2011 Westminster Hall

13:30

[Richard Burden (Birmingham, Northfield) (Lab)]

I am very grateful, Mrs Main, to have the opportunity to debate this very important and timely issue. I thank the Minister for being with us today; I realise that since he has been in government, as Minister for Europe, this matter has not been his brief, but I know that he is well versed in it because it was part of his shadow brief. I very much hope that he will be able to give us some idea of the UK Government’s current thinking. I thank also the hon. Friends and hon. Members on both sides who are present; the level of attendance reflects the interest in the subject.

The context of this debate is the early-day motion that was tabled yesterday by my right hon. Friend the Member for Cynon Valley (Ann Clwyd). She wished to be with us today but unfortunately could not be. The early-day motion calls on our Government to recognise an independent Palestinian state, alongside Israel, and to support its admission to the United Nations. The early-day motion is already supported by over 40 right hon. and hon. Members, and I am sure that more will add their name in the coming days.

Time is very limited, and before I move on to the issue of Palestinian statehood, I want to say that recent weeks have given us all a timely reminder that this conflict has already claimed far too many lives. We have seen Israeli and Palestinian civilians killed, including children on the Palestinian side. At least 15 Palestinians and nine Israelis have been killed in the past few weeks, and many more have been injured. I am also concerned about reports that the Israeli military is apparently planning to train settlers in the west bank and arm them with tear gas and stun grenades, and that it is talking up confrontation around the possibility of a vote at the United Nations in a few weeks’ time. I would be grateful if the Minister briefly explained what representation the UK Government are making to the Palestinian Authority, the Israeli Government and others, to encourage them to avoid any escalation of violence or confrontation in the run-up to the UN meeting.

Every debate and I think virtually every Foreign Office questions I have attended since I have been in this place in which the subject of Palestine and Israel has come up has returned to the fact that we all support a two-state solution. Based on what we say, I think that few things have a greater degree of consensus in this House, but what the Palestinians are asking of us now, in their initiative at the United Nations, is no more and no less than for us to mean it—to do what we say. The Palestinians are not asking for anything that Israel has not demanded and had recognised by the international community for more than 60 years.

I hear opponents of recognition suggest that the recognition of Palestine as a state and its admission to full membership of the United Nations should be treated differently—that somehow it is a way of avoiding the urgent need for a negotiated settlement. I do not believe that those two things are contradictory.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate my hon. Friend on securing this debate at such an important time. I have recently returned from a trip to the Gaza strip, where I learnt at first hand about the plight of the Palestinian people. A third of them depend on food aid, which is under threat. From talks with politicians, the United Nations and others, it appears—

[Mrs Anne Main (in the Chair)]

May I ask the hon. Gentleman to keep his remarks brief? A lot of people might make interventions.

[Alex Cunningham]

Okay. In talks that I was involved in, it was clear that the Palestinians felt that they did not have a voice. Does my hon. Friend agree that the granting of UN membership will provide them not only with that voice but with equality with others on that world stage?

[Richard Burden]

My hon. Friend makes a very good point about equality, because Israel is recognised as a full member of the United Nations and I am not aware of any state that says it should be derecognised as such. Israel has internationally recognised borders, delineated by the green line, and that has not been seen as an impediment to a negotiated settlement; indeed, in some cases recognition of Israel is seen as a precondition to a negotiated settlement. The Quartet has even suggested that individual political parties should be excluded from peace talks unless they sign up, unilaterally and in advance, to recognition of Israel.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Will the hon. Gentleman give way?

[Richard Burden]

Before I give way I want to say that I will take as many interventions as I can, but we are limited to half an hour and I want to allow the Minister time to make some remarks.

[Jack Lopresti]

Does not the hon. Gentleman agree that granting the Palestinian Authority UN membership would embolden extremists, who would view it as a reward for refusing to make concessions for peace?

[Richard Burden]

No, I do not agree. If the hon. Gentleman wishes to talk about the fact that having extremists in government should be an impediment to recognition of the state that that Government represents, he could perhaps look at some members of the Israeli Government, particularly the Foreign Minister.

As I have said, the Quartet has even suggested that some parties should be excluded from peace talks unless they sign up in advance to recognition of Israel, but if recognition is so fundamental in respect of Israel, what is the problem with recognising Palestine as a state, as requested by the Palestinian people, and accepting it as a full member of the same United Nations, with precisely the same borders as those that are recognised for Israel—in other words, the green line?

[Jeremy Corbyn (Islington North) (Lab)]

Does my hon. Friend not recognise that a big problem is that Israel is occupying large parts of Palestine and, more importantly, that Israel refuses to recognise what its own borders are?

[Richard Burden]

Israel does appear to have the problem of not being able to decide exactly where its own borders are, but the international community is very clear about where they are, as are successive United Nations resolutions: the green line.

What the early-day motion simply says, and what I and the Palestinians are saying, is that the same border should apply on both sides, for a Palestinian state and an Israeli state. When the Minister responds, will he give the UK Government’s view on that? Does he see recognition of a Palestinian state as an obstacle to a negotiated settlement, and if so, what impediments has he identified, and why does he believe that they would hinder such a settlement? Why, if they are impediments to the recognition of Palestine, are they not seen to be impediments to the recognition of Israel that we all accept? If the Minister does not agree that recognition is an obstacle, does he agree that recognising Palestine at the United Nations would not prevent the future negotiations, which we all agree are needed to reach a lasting settlement, from taking place?

[Jim Shannon (Strangford) (DUP)]

I declare an interest as a member of Friends of Israel. Does the hon. Member agree that Palestine should also recognise Israel in every sense of the word, and that part of that recognition should be that terrorist attacks coming from Palestinian lands towards Israel should cease? Does he agree that that would be a gesture that should be done as well?

[Richard Burden]

I and, as far as I know, everyone in this room is on record as calling on both sides to cease violence against the other. If the hon. Member is active in Friends of Israel he would perhaps already be aware that Israel is recognised: Palestine recognised Israel many years ago. Israel is a member of the United Nations and no one has called for it to be removed, or for its derecognition.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

When we visited Lebanon in January, we were impressed by the offer by that country’s Prime Minister that if the Palestinian Authority or, in fact, a UN-recognised Palestinian state, gave an identity card to the people of Palestine living in Lebanon, those people would be freed up to take up employment and break through all the barriers that do not allow them to have a decent life in that country. Is that not another incentive for the UN to recognise the state of Palestine?

[Richard Burden]

My hon. Friend makes a very good point. I am not alone in making the points that I am making in this debate. As the early-day motion tabled by my right hon. Friend the Member for Cynon Valley notes, 122 countries, representing nearly 90% of the world’s population, recognise Palestine. Even among Israelis, polls suggest that 48% support recognition and only 41% oppose it.

What is more, last year, President Obama set a target of September 2011 for welcoming the independent sovereign state of Palestine as a new member of the United Nations. That aim was endorsed by the UK last year. The Palestinian Prime Minister, Salam Fayyad, has been congratulated many times by the international community and in this place for the state-building work that he has led, and the Palestinian Authority have been congratulated by many leading international organisations. Recent reports by the World Bank, the International Monetary Fund, the EU and the UN have all said that not only is Palestine ready for statehood, it already operates as a state in many ways. Does the Minister share the view of those major institutions that Palestine has proved itself ready to function as a state? If not, what more does Palestine need to do either to be recognised as a state or to gain full membership of the United Nations? If the two differ, what must Palestine do to meet each requirement?

Statehood does not solve everything. A negotiated settlement will still be needed, and the parties will still need to come together to agree the many difficult issues that lie at the heart of the conflict in the middle east. However, the Palestinians look at it in this way. The international community’s continuing unwillingness to make recognition of Palestine’s right to statehood more than theoretical means that in practice, Palestine’s chance of achieving a two-state solution shrinks with every month that passes. It shrinks with every settlement built or expanded in the west bank. It shrinks with every roadblock that cuts the west bank into Bantustans. It shrinks with every Palestinian home demolished in east Jerusalem, with every Palestinian farmer cut off from the land that he or she cultivates by the construction of Israel’s barrier within the west bank rather than along the green line and with every olive grove destroyed by Israeli settlers. It shrinks with every Gaza fisherman prevented from fishing in waters off the Gaza coast, with every Palestinian workshop prevented from exporting its goods from Gaza into Israel or the wider world and with every truckload of reconstruction equipment prevented from entering Gaza to rebuild homes shattered by war.

That is why Nabil Abu Rudeina, the spokesman for President Mahmoud Abbas, said recently:

“As long as Israel’s settlement activities continue and as long as Israel refuses to accept the 1967 borders, after 60 years of occupation, we have no other choice but to turn to the international community. We are not declaring war. We are applying to the United Nations.”

After the Arab spring, at a time when the UK Government have been at the forefront of support for people calling for self-determination across the middle east, are we really saying that the Palestinian people should be different? If not, we return to the essential question. It is not about what we keep saying; it is about deciding what we are going to do.

The EU has said clearly that individual states must make up their own minds on the matter at the UN. When will the UK decide whether it will recognise Palestine and support its admission to full UN membership, if that is the recognition that the Palestinians ask for? In practical terms, what is preventing the UK Government from doing so now?

It is time to help to level the playing field and to support alongside the independent and recognised state of Israel an independent and recognised state of Palestine. Both peoples’ legitimate right to self-determination must be realised. The two states can then enter into negotiations on an equal footing to agree the details of a lasting and peaceful two-state solution and the final borders between those two states based on justice and international law. That is all that the Palestinians ask. Why is it so difficult for us to agree to it?

13:44

[The Minister for Europe (Mr David Lidington)]

I thank and pay tribute to the hon. Member for Birmingham, Northfield (Richard Burden) not just for securing this important debate but for the way in which, for many years, he has championed the cause of the Palestinian people with commitment, passion and, in my experience, always with immense courtesy to other Members, whether they agree with or differ from him on the issue. The events in the middle east are important to him and to everybody in the House; the attendance at this debate demonstrates the importance that the House gives to the matter.

It is also right for me to say that despite everything else that has been going on the Arab world in the past 12 months—in north Africa, Syria and Lebanon—the Foreign Secretary and the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt) have consistently held the view that finding a just and peaceful settlement between the Israelis and the Palestinians must remain a central part of British and international policy towards that region. I have heard my right hon. Friend the Foreign Secretary say on many different occasions that what has been happening in the Arab world makes it more urgent, not less, that the international community should use every bit of leverage that it has and every bit of diplomatic energy that it can spare to press for that settlement to be agreed sooner rather than later.

This is the 20th year of the middle east peace process, and it has been 20 years since the Madrid conference was launched, but if we are honest, not much has changed for Palestinians and Israelis in the 20 years since the Oslo accords were signed. Israelis continue to face threats from violent extremists, and Palestinians, as the hon. Member for Birmingham, Northfield said, still have no state. The United Kingdom Government, whatever party has been in office, have long made it clear that peace in the middle east enabling a resolution of that long-running dispute has enormous importance for both global and regional security. The goal of the international community should be to ensure that this is the last year of process and the beginning of a lasting agreement between the parties.

After the events of the past few months, the world can no longer claim that change in the middle east will come slowly and incrementally, nor can we allow the middle east peace process to limp along indefinitely as it has done. If the peace process becomes a casualty of wider regional change, that will feed instability and violence rather than democracy and human development.

The Government believe that there is no alternative to negotiations to address all the fundamental issues at the heart of the Israel-Palestine conflict. A solution cannot be imposed from outside, although other countries can influence those directly involved. We want the parties themselves to redouble their efforts to break the impasse and resume negotiations for a two-state solution before the window to such a solution closes. Bold leadership is needed on all sides. Neither Israel nor the Palestinians can afford to let the opportunity for peace slip further from their grasp. In our view, the two-state solution, however difficult it is and however narrow the remaining window of opportunity, is the only way to realise both the aspiration of Palestinians for a state of their own and the long-term security that Israelis deserve.

This month marks the time frame set out by President Obama for welcoming Palestine as a full member of the United Nations. September also marks an important waypoint in the Palestinian Authority’s good work on their state-building programme. I applaud and welcome the progress made by the Palestinian Authority on institution-building and financial management initiatives, which the United Kingdom has supported. We recently signed a memorandum of understanding to continue to support the Palestinian Authority in their work to build up the institutions of the embryonic state and support the Palestinian people. In the current financial year, the Department for International Development expects to provide almost £80 million to this end as part of a total of £275 million allocated to the occupied Palestinian territories for the next four years. We hope that the Palestinian Authority will complement this admirable work on state building with the necessary progress on the political track.

I understand clearly, and remember from the visits that I paid to the occupied territories during my time as shadow spokesman on the middle east, the sense of anger and growing frustration that exists among ordinary Palestinians at the things about which the hon. Gentleman has spoken—the settlement building, the roadblocks, the demolition of Palestinian homes and the construction of a barrier, the reason for which one can understand in terms of Israel’s security needs, but which goes beyond the green line and which, as the hon. Gentleman has said, in too many places separates working rural families from their farmland or makes it more difficult for Palestinian workers to travel to their accustomed place of work in Israeli-administered areas.

The Prime Minister made our position on UN recognition of a Palestinian state clear during President Obama’s visit in May. He agreed with the President that a Palestinian state was a legitimate goal, but the best way of achieving this was through a comprehensive agreement between Israel and the Palestinians.

This is an important issue for Britain for four key reasons. First, as I have said, the Israeli-Palestinian conflict remains one of our top priorities. Secondly, there is a sense of growing frustration and pressure among the Palestinian people, which threatens the stability that we have seen over the past year. At a time when we have seen people all around the Arab world fighting for, and realising, their rights to shape the societies and Governments under which they live, it is only just that the Palestinians too should realise their goal of an independent, viable state of Palestine.

Thirdly, the security of Israel and her prosperity matters deeply to the United Kingdom as an important strategic partner and friend. We have long said that Israel’s own need for long-term security can only be assured if there is a comprehensive settlement to the Israel-Palestine dispute, including the creation of an independent, sovereign and contiguous Palestinian state.

[Ian Lavery (Wansbeck) (Lab)]

Does the Minister agree that, under international law, Palestine fulfils all the requirements to become a recognised state?

[Mr Lidington]

I think that one could find different lawyers who would be prepared to argue almost any point of detail on that question. I want to come on to the point about national recognition and the UN position. I make it clear that the Government’s position is that we believe that, whatever we say or vote for in this Chamber and whatever is voted for in the United Nations, whether in the Security Council or the General Assembly, a lasting, enduring, peaceful settlement on the ground is something that, in practice, will only be secured through negotiation, not by resolutions passed in a particular place.

[Mark Durkan (Foyle) (SDLP)]

In the context of all the negotiations that have taken place or that have, at times, broken down, we have often heard from Israel that the problem from its perspective is that it does not have a reliable, equivalent partner with which to negotiate. Would not some progress in terms of recognition of statehood remove some of the claimed problem that Israel says it has in the context of this very frustrating negotiating process?

[Mr Lidington]

I understand the hon. Gentleman’s argument, but we also have to accept the political reality that various acts have taken place in the past few years that have made it difficult to keep negotiations going. Direct negotiations of a serious character are not now taking place. In the absence of such negotiations, I think that there is simply going to be greater bitterness, greater difficulty and the narrowing still further of that window of opportunity for the successful creation of a two-state solution. I think that the emphasis for the United Kingdom and the international community should be on trying to get those negotiations back on track.

My fourth and final point about why this matters to Britain is that, of course, the dispute deeply affects the politics of the broader region, and the fluid dynamic resulting from the Arab spring makes the prize of stability that would come from an Israel-Palestine agreement even more significant.

We want to see a return to negotiations on the basis agreed by the Prime Minister and President Obama. The United Kingdom Government want to see borders based on 1967 lines with mutually agreed swaps, security for Israel, and the right for Palestinians to govern themselves in a sovereign and contiguous state. We see Jerusalem as being a shared city which will be the capital of both countries, and we also of course accept that there needs to be an agreed and just solution for Palestinian refugees.

[Jeremy Corbyn]

I thank the Minister for giving way; he is being most generous with his time. Can he cast any light on the Government’s views on the plight of Palestinian refugees in Lebanon, Syria and Jordan in particular, and what would happen to their status in respect of recognition of a Palestinian state?

[Mr Lidington]

The detail of that is something that will have to be worked out in negotiations. I think it is fair to say that the negotiations that took place between President Abbas and former Prime Minister Olmert began to address the issue of refugees, even though no final agreement could be reached before Mr Olmert left office. Our view on the humanitarian treatment of those people, particularly in Lebanon where there are some serious problems concerning the treatment of Palestinian refugees, is that we urge the host Governments to treat those Palestinian refugees fairly, humanely and equally.

[Richard Burden]

Will the Minister give way?

[Mr Lidington]

I will give way, but I am conscious that I want to respond to the key point of the hon. Gentleman’s speech.

[Richard Burden]

I hope that the Minister will do that and I will make my question brief. I agree completely with what he has said about the need for a comprehensive settlement to achieve peace, but my question is: do the UK Government see the recognition of a Palestinian state as an impediment to achieving that comprehensive settlement? If not, why do we not do it?

[Mr Lidington]

We think that the recognition of a Palestinian state is something that needs to be achieved within the framework of negotiations. That is certainly the best way in which to go about it. It now looks as if Palestinian action at the United Nations this month is increasingly likely. We are working closely with partners to build consensus on a way forward that recognises the progress Palestinians have made on their state-building efforts, that meets Israel’s legitimate security concerns, and that avoids confrontation at the UN, which would have a damaging effect on the resumption of negotiations. Whatever action is taken in New York, it is important that that increases and does not diminish the prospects for a return to negotiations. We have reserved our position on the question of recognition of a Palestinian state while we continue to urge all parties back to talks. Recognition is a matter for each Government to decide bilaterally and, if needed—no resolution has yet been tabled—we will take a decision nearer the time, in consultation with the European Union and other partners.

It is important to remember that action in the UN is not an end in itself. September is not the closing date for resolution of this conflict. What happens afterwards is vital, which is why our goal remains ensuring that steps are taken now to pave the way for significant and conclusive talks, and why we believe it is vital that any action in the UN does nothing to endanger the prospect of such talks.

[Martin Horwood (Cheltenham) (LD)]

As co-chair of the Liberal Democrat international affairs committee, I would welcome a British yes vote in September. Is not the irony of the American and Israeli position in opposition to this that both the United States and Israel themselves declared their own statehood in advance of the final resolution of their negotiated borders and many other issues?

[Mr Lidington]

The hon. Gentleman makes his point tellingly and well, but I will not be drawn into 1776 and all that. We want the new generation of Palestinians to grow up in hope, not despair, believing in a peaceful settlement with Israel, and not impoverished and not susceptible to terrorist recruitment. I want to assure the House that this Government will not cease in our efforts to support the parties in finding a long-term sustainable solution to this conflict that will make that vision a reality.

14:00

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Tuesday 6th September 2011 Written Statements

Tuesday 6 September 2011

Capital Allowances Anti-avoidance

Tuesday 6th September 2011 Written Statements

[The Economic Secretary to the Treasury (Justine Greening)]

On 12 August 2011 the Government announced a change in legislation to prevent tax avoidance. The Government have set out a clear strategy on preventing tax avoidance and will not hesitate to take action to stop those who seek to obtain an unfair advantage by exploiting unintended tax loopholes. This measure demonstrates the Government’s commitment to act quickly to close loopholes when this happens.

The Government became aware that an avoidance scheme was being promoted that sought to take advantage of an exception from certain capital allowances anti-avoidance rules provided by section 230 of the Capital Allowances Act 2001 (CAA). The scale of the tax potentially put at risk by the scheme was such that the Government decided to announce that section 230 CAA will be repealed by legislation introduced in Finance Bill 2012 in relation to expenditure incurred on or after the beginning of 12 August 2011, to the extent that section 230 provided an exception from section 217.

HMRC published a statement on their website (www.hmrc.gov.uk/budget-updates/hmrcstatement-12Aug.pdf) on 12 August explaining the change, together with a technical document containing draft legislation which the Government intend to include in the next Finance Bill.

Prisoner Voting Rights

Tuesday 6th September 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

In November 2010, the European Court of Human Rights in the case of Greens and MT v UK found that the UK’s ban on prisoners voting was in breach of article 3 of the First Protocol of the European Convention on Human Rights (the right to free and fair elections). In the judgment the Court prescribed a timetable for the introduction of legislative proposals to amend the blanket ban, namely a period of six months from when the judgment became final (which was 11 April 2011). The Government have since been considering the appropriate course of action in order to respond to the Greens and MT judgment.

In July, the Grand Chamber of the European Court of Human Rights accepted a referral in the case of Scoppola (No.3) v Italy. A hearing before the Grand Chamber has been scheduled for 2 November. The legal issues which arise in Scoppola under article 3 of the ECHR are analogous to those which arose in Hirst v UK and Greens and MT.

Given the close relationship between the cases, the Government have sought leave to intervene in the proceedings before the Grand Chamber in Scoppola. The Government also requested an extension to the deadline set in Greens and MT to enable it to take account of the Grand Chamber’s judgment. The Government were notified on 31 August that the Court has granted an extension of six months from the date of the Scoppola judgment, and on 5 September that the Government will have the opportunity to express our views on the principles in the Scoppola case.

The Government welcome the decision of the Court and believe it is right to consider Scoppola and the wider legal context before setting out the next steps on prisoner voting.

Southern Cross Healthcare

Tuesday 6th September 2011 Written Statements

[The Minister of State, Department of Health (Paul Burstow)]

I wish to update the House further on the situation regarding Southern Cross Healthcare.

Throughout, the Government’s overriding concern have been for the welfare and safety of the 31,000 residents in Southern Cross’s care. We are clear that this must be the paramount concern for all parties involved in the discussions about the future of the company.

Over the summer, officials have kept in close contact with Southern Cross’s senior management, landlords and lenders as the negotiations to achieve a consensual and solvent restructuring of the business have developed.

I have previously told the House that the intention is that the company will be wound up and its business transferred to other care operators. This will be done in such a way as to have minimal impact on the residents and staff of those homes. Until a new operator is registered and takes over the services in any care home. Southern Cross will continue with full responsibility for continuity of care.

In the last month, each of Southern Cross’s landlords has been considering which new care operator it will work with. Those discussions have progressed well and now all bar a handful of landlords are coming to the end of finalising the commercial arrangements that will apply in future. Within the next few weeks, we expect agreements to be signed that will effect the transfer of the business and assets of each home operated by Southern Cross to the new operators. The expectation is that formal transfer of care homes will be achieved in two waves, with around 330 homes transferred at the end of September and the remaining 400 homes transferred at the end of October. At that point Southern Cross will no longer be responsible for providing care anywhere in the country and the company will be wound up. Throughout, the Government have strongly urged all parties to agree their plans as swiftly as possible so as to offer reassurance to residents, staff and families. The company has informed all Southern Cross staff, together with residents and their families, of these plans in order to provide reassurance.

Last week, the Association of Directors of Adult Social Services published information for each of Southern Cross’s homes about the position it has reached in its transition to a new care operator. The information also included details of any inquiry or helplines set up locally or regionally by the company and by local authorities which can be accessed if further information is needed. As the new care operators are settled, their names will be added to the information. Within the next few weeks we expect the complete picture to emerge for each care home, and it will be clear who is the landlord and who is the new operator. Members may wish to draw this information to the attention of any constituents that are concerned or have relatives in Southern Cross’s homes. A link can be found at:

www.dh.gov.uk/health/2011/09/transfer-of-southern-cross-healthcare-to-new-operators/

The process to register the new care operators with the sector’s regulators in each part of the United Kingdom and to cancel Southern Cross’s registration has begun. No transfer of homes will take place without new operators having been approved and registered. Alternative operators will need to demonstrate to the regulator that they are capable of delivering high-quality care and of meeting all regulatory standards in the homes they take over. It is important that this process moves quickly and smoothly and, in respect of operators in England, the Care Quality Commission have assured us that they have the resources to complete the necessary regulatory work in time. However, regulators will not lower the regulatory threshold or reduce the rigour of the registration process to achieve that. Standards will not be compromised.

I understand that staff consultation under the TUPE regulations has also commenced and that the staffs elected representatives and the incoming operators are to be invited to attend a series of meetings to discuss these arrangements.

Notwithstanding the good progress that has been made, it is important that I restate the Government’s commitment that whatever the outcome, no one—state-supported or self-funded—will find themselves homeless or without care. We remain in close touch with the Association of Directors of Adult Social Services to ensure that in all parts of the country they are ready to respond to any potential disruption to the continuity of care and to ensure that all residents are protected.

I have previously told the House that the Government will be considering what measures may need to be put in place to prevent similar situations from arising again. Options for financial regulation or other measures will be considered as part of the development of the forthcoming White Paper on social care. To that end, we will shortly publish a policy paper setting out an analysis of the possible options and seeking views.

I will update the House as the situation develops.

Cohabitation: Financial Consequences

Tuesday 6th September 2011 Written Statements

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

I wish to make the following statement to the House announcing the Government’s response to the Law Commission’s report “Cohabitation: the financial consequences of relationship breakdown”.

The Law Commission published its report on 31 July 2007 but no action was taken by the previous Administration who wished to first seek research findings on the Family Law (Scotland) Act 2006. This Government have now carefully considered the recommendations of this thorough report, together with the outcomes of research on the 2006 Act.

The findings of the research into the Scottish legislation do not provide us with a sufficient basis for a change in the law. Furthermore, the family justice system is in a transitional period, with major reforms already on the horizon. We do not therefore intend to take forward the Law Commission’s recommendations for reform of cohabitation law in this parliamentary term.

Convention on Torture (Periodic Report)

Tuesday 6th September 2011 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

I have today placed in the Libraries of both Houses copies of the UK’s fifth periodic report under the convention against torture and other cruel, inhuman or degrading treatment or punishment. I intend to send the report to the United Nations Committee Against Torture immediately, with a request that the committee post the report on its website.

The report sets out how the UK is fulfilling its undertakings under the convention, and updates the UN on developments since the examination of the UK’s fourth report in November 2004. It draws attention to recent initiatives with regard to the treatment of people in detention: publication of guidance on the treatment of detainees, and establishment of the detainee inquiry. Non-governmental organisations and members of civil society in the UK have had the opportunity to comment on the report in draft, and the Government have taken into account many of their comments and suggestions.

Transparency in the Justice System

Tuesday 6th September 2011 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Open justice is a long-standing and fundamental principle of our legal system. Justice must be done and must be seen to be done if it is to command public confidence.

This Government are determined to open up the justice system and have ambitious plans to increase transparency at every stage to allow everyone to see what is happening and how the system works.

Central to achieving this objective is a plan to publish far more and better data on justice:

On 29 September 2011, my Department will publish statistics by region which show the efficiency of the courts and tribunals in progressing cases. This will include brand new statistics on the time from the date an offence is committed to the date the case is finally dealt with by the criminal courts, whether at a magistrates court or the Crown Court.

On 12 January 2012, this will be extended down to court level. These data will include the number and type of cases dealt with at each court or local justice area, how long cases take to complete, as well as how many criminal trials could not commence on the scheduled date and how many had to be abandoned. The data will also allow the public to see the number of civil hearings and trials dealt with at courts in their area, how long it takes these cases to progress, and in family courts how long it takes for care proceedings cases to complete.

On 27 October 2011 we will publish reoffending rates for every probation trust and prison in England and Wales, along with anonymised datasets showing whether individual proven offenders go on to reoffend for each local area.

On 24 November 2011, we will publish, alongside our regular quarterly criminal justice system statistics, anonymised datasets on each case sentenced. This will include the sentence given, the court, the age group, gender and ethnicity of those sentenced, and the time from when the offence was committed to when the case was complete.

From May 2012 onwards, the national crime mapping website, police.uk, will provide the public with information on what happens next for crimes committed in their streets, so they can see what action the police took and the outcome of any subsequent court case.

In addition to providing more data, I am determined to reform fundamentally the way the justice system operates so it is more open. The names of offenders who are unlawfully at large can be—and often are—published by police forces to help bring these people back to custody—where they should be. We are committed to removing all unnecessary barriers to the naming of these offenders and to promoting best practice and consistency across all police forces.

Today, I can also announce my intention to legislate, as soon as parliamentary time allows, to remove the ban on cameras in courts.

As a starting point, judgments in the Court of Appeal will be broadcast for the first time. I want to see this expanded to the Crown Court, but I will work closely with the Lord Chief Justice and Judiciary on how this could be achieved.

I will consult further on the detailed approach, but I am clear that this must not give offenders opportunities for theatrical public display. We will work to ensure this does not hinder the administration of justice and that it protects victims, witnesses, offenders and jurors.

Collectively, these plans will open the justice system in an unprecedented manner, allowing the public to judge for themselves how we are performing and to hold us to account.

Chief Electoral Officer for Northern Ireland (Report 2010-11)

Tuesday 6th September 2011 Written Statements

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The Chief Electoral Officer for Northern Ireland is responsible for all aspects of electoral administration in Northern Ireland, including the successful running of the parliamentary general election held on 6 May 2010. Section 14 of the Electoral Law Act (Northern Ireland) 1962—as amended by section 9 of the Northern Ireland (Miscellaneous Provisions) Act 2006—provides that the Chief Electoral Officer must submit an annual report to the Secretary of State. The annual report of the Chief Electoral Officer for Northern Ireland for the year 2010-11 has been laid before Parliament today.