The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I thought it might be helpful to the Committee if I intervened relatively briefly at this point to put this part of the Bill into context and explain what we are trying to achieve. Part 3 has been much discussed and, I am afraid to say, much misunderstood. It is, in my view, fundamental to the modernisation of the NHS. It is worth restating why that modernisation is so important.
We need to improve health outcomes and we need to increase productivity in the NHS. Achieving both of these is essential if we are to meet the challenges of caring for an ageing population, managing increased prevalence of chronic disease and funding the rising costs of new drugs and other technologies.
Part 3 helps to enable this by establishing a clear and comprehensive legal framework for sector regulation to protect patients’ interests, based on the principles and values enshrined in the NHS constitution. Monitor’s distinctive role would be to secure value for money in the provision of healthcare services, in the interests of patients. Its overarching statutory duty, which is crystal clear in the Bill, is to protect and promote patients’ interests by promoting economy, efficiency and effectiveness in the provision of services while maintaining or improving quality. The key words there are “protect and promote patients’ interests”. This overarching duty would provide Monitor with a clear and enduring purpose. The duty would be the guiding principle for Monitor’s decisions, for example in resolving any conflicts that may arise in the exercise of its functions. For example, if in future Monitor were to have any doubt about a decision, it would come back to that guiding principle. Equally, it will not be open to Monitor to do anything that infringes that principle.
Baroness Armstrong of Hill Top
The noble Earl knows that that part of the Bill does that only for a limited period of time. He also knows that many people involved with foundation trusts think that should be a consistent and ongoing role of Monitor. Have the Government reassessed so that that is a more complete and comprehensive approach for Monitor, signalled clearly in the Bill?
Earl Howe
What the noble Baroness says it quite right. It would be open to a future Secretary of State to extend the period under which Monitor retained that role. My purpose at the moment is to set out the Government’s position. I am sure we can come on to debate these things, if the noble Baroness will allow, but it is important for the Committee to have the Government’s prospectus in their minds.
The remit of Monitor would be expanded to cover all NHS-funded healthcare providers. This approach ensures that Monitor and everything that it does is governed by a single, coherent legal framework and that all its functions are bound together by a single, overarching statutory duty—the one that I read out. For that reason, I would counsel noble Lords to resist amendments that may seek to achieve similar aims, but do so by retaining a separate legal framework for regulation of foundation trusts.
Many people have sought to portray the new role for Monitor as some sort of mighty club-wielding behemoth, dictating to commissioners how NHS resources should be spent. This is not the case. Monitor’s role, as set out in Part 3, is intended to support and complement the role of commissioners, as set out in Part 2. Our aim is to empower those commissioners—GPs and other clinicians—to take the lead, arranging access to services to meet their patients’ needs and stimulating innovation and improvement. Commissioners will have various tools at their disposal to do this. They will need to decide how to use co-operation, integration and competition to improve quality or efficiency or reduce inequalities.
In that context, the appropriate role for Monitor would be to support commissioners by enabling integration and where competition is used, ensuring that this operates effectively. Monitor’s role is not—I repeat, not—to impose competition from above. Competition is not now and will not be an end in itself.
Our strategy for improving the provision of NHS services is firmly based on the principle of autonomy and accountability for providers. Building on this, we have proposed functions for Monitor that aim to strengthen incentives for providers to improve, rather than simply relying on the ability for Monitor to set and enforce rules. Promoting competition is part of this, but again the context of promoting is quite different from the idea of driving competition through top-down controls. It will not do that, and it would not be effective even if it did.
What has struck me, looking at these amendments, is that, while there are clear differences between some noble Lords and the Government, I also feel that there is a significant consensus emerging. I want to reiterate that the Government are always willing to listen to how the Bill could be improved. I have listened to the points made by the noble Baroness, Lady Thornton, but I have also studied very closely the amendments tabled by other noble Lords, particularly my noble friends Lady Jolly, Lord Clement-Jones, Lady Williams and Lord Marks, as well as the noble Lord, Lord Whitty and the noble Baroness, Lady Murphy.
I am sympathetic to a number of the concerns raised by noble Lords, which we shall hear about. I would like to highlight four at this point. The first is the Secretary of State’s ability to specify matters that Monitor must take into account. I am sympathetic to noble Lords’ concerns that we should clarify the mechanisms by which this can happen. The second is the conflicts between Monitor’s functions. It has always been our intention that Monitor should take responsibility for making appropriate arrangements within its organisation to avoid potential conflicts. However, I will explore this further with Monitor in time to provide greater clarity and reassurance before Report stage. The third area is failures to co-operate. Again, I am sympathetic to noble Lords’ concerns that Monitor should have the ability to address abuses and protect patients’ interests. We believe that the safeguards in the Bill already achieve this aim, but we will look to ensure that Monitor is properly equipped to enforce this. The final issue is reviews by the Competition Commission, where I sympathise with noble Lords’ concerns that the provisions as drafted may not yet fully reflect the revisions to Monitor’s role that were introduced in response to the NHS Future Forum.
That is all that I propose to say for now. I hope that it has been helpful for me to speak early in this debate to give some additional clarity to the Government’s intentions in this vital area of the Bill.
Lord Clement-Jones
My Lords, I very much appreciate the opening speeches from both sides on this group of amendments. I particularly recognise that the noble Baroness, Lady Thornton, has put a great deal of care and consideration into the amendments that she has tabled and they represent a huge amount of work, particularly without the benefit of a Bill team. It is also clear from both speeches that now is the moment to start the debate about the application of EU and domestic competition law to the NHS.
The Bill contains a number of measures that could increase competition within the NHS at the expense of collaboration and integration and which, in my view and that of many of my noble friends, increase the risk that UK competition law will apply as if healthcare were a utility like gas or telecoms. Amendment 288G is the first of a number of amendments tabled by me and my noble friends seeking to minimise that risk.
I am not against competition in the NHS—I suspect that very few of us are—but it must be where it is appropriate. It is not appropriate in all circumstances. Public and patient benefit can often be secured in other ways. We have discussed integration of services throughout the Committee as an alternative and as a complement to competition. Having a balance and choosing the appropriate mechanism that is best for patients is what the debate about Monitor’s powers has focused on to date.
I accept that EU competition law has had some application within the health service for some years now. However, along with many others, I do not want to see EU competition law apply universally across the health service so that our commissioners and providers are required to operate a market-based NHS, red in tooth and claw, without being able to choose where it should apply and where it should not. In my view and that of my noble friends, the risk, for reasons that I shall explain, of a number of elements of the Bill being taken together increases the likelihood of NHS services being found by English and EU courts to fall within the scope of UK and EU competition law. These include, first, potential deregulation of FTs from 1 April 2016, in terms of Monitor no longer having the power to set special conditions under Clause 109 for foundation trusts. That is what Amendment 288G is designed to address. The stand part debates for Clauses 110 to 112, which I support, are also relevant.
Secondly, there are so many new areas where the Competition Commission is deployed. There is the role where Monitor has given notice to include a special condition in a licence in determining whether the matters subject to the proposed condition are potentially contrary to the public interest and whether the special condition provides a remedy. That is Clause 99. There is also its role in reviewing the development of competition in the NHS in the provision of healthcare and the exercise by Monitor of its functions in relation to the provision of healthcare services. That is Clause 76. Its role where there are objections in setting the method of setting prices for the national tariff by Monitor is in Clauses 118 onwards. Finally, there is oversight of foundation trust mergers as a result of the application Part 3 of the Enterprise Act.
Thirdly, after the potential deregulation of foundation trusts and the role of the Competition Commission, there is the lifting of the private patient income cap for foundation hospitals, in Clauses 161 and 162, which opens the way for some foundation trusts to derive the majority of their income from private patients. In that context, I am very pleased to see Amendment 299ZA, tabled by the noble Earl.
If EU competition law were to apply in an unrestrained manner across the NHS, private sector companies that bid unsuccessfully for NHS contracts could make a European competition complaint and challenge commissioning decisions in the courts, and/or the status of foundation hospitals, undermining the mainstream of the NHS in the delivery of services such as intensive care units, A&E, emergency cover, teaching, training and research. The number of such complaints across the EU has increased over recent years.
It was, of course, to minimise the risk of the unrestrained application of EU competition rules that the rules of co-operation and competition and the Co-operation and Competition Panel were devised in 2008. But this Bill, on the face of it, goes much further in encouraging competition. There is a view that the incorporation of those rules in statute is yet another reason to believe that the NHS is at risk in this way.
The applicability of domestic and European competition law to an NHS body, whether commissioner or provider, essentially turns on whether it is an undertaking for the purposes of competition law. Only a grievance between undertakings and abuses committed by dominant undertakings are within the scope of the Competition Act 1998 and Articles 101 and 102 of the Treaty on the Functioning of the European Union. There is, in fact, no definition of the term, “undertaking”, in domestic or European legislation, so the scope of the term has been developed and considered through case law of the domestic and European courts.
I do not propose to give your Lordships a legal lecture—I do not believe I would be able to—but briefly, there are two cases in particular that are of some importance. The question of whether an NHS trust is an undertaking for the purposes competition law was considered by the Competition Appeals Tribunal in the case of BetterCare Group Ltd in 2002. BetterCare was a UK provider of residential and nursing home care, which complained to the OFT that the North and West Belfast Health and Social Services Trust, acting as a purchaser of nursing and residential care home services, was abusing its dominant market position in Belfast. The OFT rejected the complaint on the basis that the trust was not an undertaking for the purposes of competition law. On appeal of the OFT’s decision by BetterCare, the Competition Appeals Tribunal determined that the trust was acting as an undertaking both in the purchasing of services from BetterCare and in the direct provision of elderly care by its own statutory home. This was for various reasons, but of particular importance in the current context, is that in providing care through its own homes, the trust was also a participant in a market for residential care, alongside independent providers, and the trust was in a position to generate the effects that the competition rules seek to prevent.
In FENIN, a case brought by an association of companies involved in the marketing of medical goods used in Spanish hospitals, the European Court of First Instance in 2003 upheld a decision by the European Commission rejecting a complaint alleging abuse of a dominant position by 26 bodies or organisations, including three Ministries of the Spanish Government, which run the Spanish national health system. The Commission had rejected the complaint on the grounds that these bodies were not acting as undertakings in their dealings with suppliers. The Court of First Instance considered that where an organisation purchased goods not for the purpose of offering goods and services as part of an economic activity but in order to use them in the context of a different activity, such as one of a purely social nature, it does not act as an undertaking simply because it is a purchaser of those goods.
Earl Howe
My Lords, I thank all noble Lords who have contributed to what has been a first-class debate. While I will not repeat what I said earlier, the value of this summing up will be in me responding to some of the specific questions and points that have been raised by noble Lords.
The debate has demonstrated broad agreement, if I am not putting words into noble Lords’ mouths—no doubt they will tell me if I am—that competition, when used appropriately, has an important role to play in realising what we all want to see in the NHS. It should be a means of improving the quality of care and productivity in the health service, and of improving patient choice, including choice of treatment. I would like to believe, from what noble Lords have said, that there is no disagreement about that as a general principle. It is consistent with the policies of the previous Government, reflected in published statements on behalf of all the main political parties over the years.
A further area of potential consensus appears to be on the merits of sector-specific regulation that is applicable to both commissioners and providers, with the starting point being the existing principles and rules for co-operation and competition in the NHS, as the noble Baroness, Lady Thornton, made clear.
Speeches from several noble Lords demonstrated the concern that competition law should never be applied to the NHS. The noble Lord, Lord Owen, in particular, expressed that view very forcibly. However, that is not in the gift of the Bill. The Bill provides for Monitor to consider cases of potential breaches of the Competition Act 1998, to undertake market studies and to determine where and when matters should be referred to the Competition Commission for investigation under the Enterprise Act 2002. Establishing concurrent powers for Monitor would not extend the scope of competition law or its applicability to the NHS.
Baroness Thornton
If that is the case, why do 20 clauses in this part of the Bill refer explicitly to the Competition Commission and the panoply of competition law? Should they not be there?
Earl Howe
They are there because this is the first time that any Government have attempted to bring together under one umbrella the disparate parts of our existing system for regulating and controlling competition. As I said earlier, we have that system in skeletal form, but there are lots of gaps and inconsistencies. By bringing them under one umbrella, as this Bill does—I am afraid that it inevitably occupies a goodly number of clauses—we will have a coherent system of regulation for the future.
Establishing concurrent powers for Monitor would not extend the scope of competition law or its applicability to the NHS; that is an important point for noble Lords to appreciate. Why have a sector-specific regulator? For me, the reason is that, instead of such matters being reserved for the Office of Fair Trading, Monitor will be able to lead on these issues in its capacity as a regulator with statutory duties to protect and promote patients’ interests and to enable integration, and as a body with much greater knowledge and expertise of healthcare compared with the Office of Fair Trading. That would include, for example, where arrangements such as clinical networks, which may restrict competition, deliver overriding benefits to patients. Just because there is no competition, that does not mean that the behaviour in question is anti-competitive.
That view was forcibly brought out by the NHS Future Forum. As I have said, competition is just one of the tools available to the commissioner in securing access and improving services, and it will be the commissioner, not Monitor, who will decide where and how to use it. That is not new. The use of competition—for example, through competitive tendering—is already well established in the NHS. A range of providers—NHS, voluntary, and independent—are contributing to improving services for patients.
Of course I understand the passion with which the noble Lord, Lord Owen, spoke; my concern is that his amendments would remove from the Bill a protection for patients in relation to the actions of commissioners. That is very important; if the noble Lord’s amendments were accepted we would have commissioners taking decisions that were not overseen or checked in any way, which would be very dangerous. It would also be a backwards step from the existing principles and rules that apply to primary care trusts and that were introduced by the previous Government. The noble Lord, Lord Owen, said very interestingly that according to his research the French railway system is not subject to EU competition law. I defer to his knowledge of French railway legislation but, as is made clear in the OFT’s recent guidance, the issue of whether competition law applies requires an analysis of the activity in question. To insert a clause into the Bill just to say that EU competition law shall not apply to the NHS would not achieve that aim. EU competition law is a fact, so we have to ensure that the system that we put in place protects patients against breaches of the law and that when breaches do occur they are remedied effectively.
Earl Howe
I shall indeed look very willingly at that question and I am grateful to the noble Lord for raising it. Although I might not appear to be at times, I am very keen to be as open as possible about as much as possible. Whatever I can do to facilitate this I will, although it is not a matter that I have been directly involved in.
Lord Davies of Stamford
Can I take the Minister back to the all-important matter of Monitor? I think he said this morning that he recognised that there were potential conflicts of interest in Monitor’s role. Monitor will continue to have its role of oversight over foundation trusts until 2016. The Minister has said today that that can be continued beyond 2016. Monitor will now be given responsibility for competition policy: in other words, for all the supply side, whether private sector, independent, or foundation trust. Is there not a conflict with Monitor having this responsibility for foundation trusts and then being responsible for the oversight of the rules of competition and the supply side? Monitor will also be responsible for oversight on the other side: the commissioning and customer side. Is this not an intensely problematic situation, and will the Minister say how he intends to resolve these issues?
Earl Howe
My Lords, the noble Lord, not for the first time, is ahead of me. It is no accident that we have a group of amendments that deals with potential conflicts and how these are to be resolved. It might be better, if the noble Lord agrees, to wait an hour or two until we reach those amendments.
My noble friend Lord Newton indicated from his own personal experience that mergers, when they occur, are far too bureaucratic. I fully agree with him. The Department of Health, the Co-operation Competition Panel and, if it involves a foundation trust, Monitor, all currently play a role and may have conflicting views which lead to uncertainty and delay. Our proposals would create a simpler and much more streamlined process for the NHS.
My noble friend indicated his strong view that safety and quality—not competition—should be paramount. I am sure it will not have escaped his notice that improving quality is what these reforms are meant to be about. We have been clear that patients’ interests, especially their safety and the quality of the services they receive, have to be paramount. That is why Monitor’s overriding purpose is to protect and promote patients’ interests. It is why the board will have a duty to improve quality, why the CQC will underpin quality; and why competition will be used only as a means to improve quality. Where there are better ways to improve quality—and there may be—they will be used instead.
My noble friend Lord Clement-Jones, in his extremely interesting and—I do not mean to sound patronising—well-informed speech, took us through some of the intricacies of competition law. Although he did not say this, there has been a suggestion from a number of quarters that we are in a knowledge-free zone when we look at competition laws applied to the NHS. In one sense that is true because there is no case law that can guide us, but in another sense it is not true.
We can say many things with confidence. The point of competition law is to protect people from self-serving abuses like collusion or abuse of market power by restricting access to services. These self-serving abuses that harm patients are already prohibited in the NHS by the principles and rules for co-operation and competition, as introduced by the previous Government. This is not something new introduced by the Bill. Competition law applies to foundation trusts only in so far as they are acting as an undertaking, as my noble friend indicated—in other words, only where they are providing goods and services within a competitive market. Given the lack of directly applicable case law to NHS providers, there is some uncertainty about where that line is drawn.
A body can be an undertaking for some activities and not others. That is very clearly laid out in the OFT’s recent guidance, Public Bodies and Competition Law. For example, the foundation trust might be an undertaking for elective surgery, if it were provided in a competitive market, but it would be very unlikely to be an undertaking when providing NHS services in the absence of competition and while under a licensed obligation to maintain service continuity, which it could well be if Monitor chose to build that into its licence. In so far as foundation trusts may in the future be found to have abused their market power, what would then follow? It is important to understand what the consequences would be. In that situation, Monitor—
Baroness Thornton
Before the noble Earl moves on, I would like to be completely clear. Is the Minister saying that Monitor will decide which parts of the NHS are subject to competition law—and not the Secretary of State?
Earl Howe
My Lords, competition law potentially applies to the provision of services throughout the NHS. Monitor is there to protect patients from breaches of competition law, as it perceives them to be. The noble Baroness is right that it will not be the Secretary of State who makes those judgments. We are charging Monitor with that duty as a sector-specific regulator. I hope I have answered the noble Baroness’s question; if I have not, I am very happy to write to her on that.
In a situation where a foundation trust was found to have abused its market power, Monitor or the OFT would have the power to remedy the breach and impose proportionate sanctions, which might be a fine, or it might be to set aside a collusive agreement or to apply to the courts for a director disqualification. The effect would be to ensure that the anti-competitive conduct and the associated harm were addressed. That can be only a good thing. It is in the interests of patients, and it prevents the whole thing escalating further. The noble Lord, Lord Rea, indicated his doubts that there was any evidence that competition really did drive up quality. If he will allow me, rather than taking up time now, I will write to him, because there is quite a deal of evidence to indicate that it does drive up quality.
On reflecting upon the question that the noble Baroness, Lady Thornton, asked a moment ago, Monitor will not decide whether competition law applies; Monitor will apply the law as it exists. In the end, only the courts will decide the question that she put—certainly not the Secretary of State.
Baroness Thornton
In a way, that goes back to my original question: will the Secretary of State no longer decide, for example, that accident and emergency will be exempt from competition law? Will Monitor decide? Could the noble Earl please be patient with me and give me an example of what will be exempt and what will not be exempt, and who takes that decision? Is he saying that Monitor takes that decision and that if Monitor gets it wrong, the matter goes to the courts?
Earl Howe
Monitor would ask itself: is the arrangement we are looking at for, let us say, an A&E department that had no competition for miles around, anti-competitive? The answer might well be no, it is not. As I said earlier, the very fact that there is no competition to a service does not mean that it is anti-competitive. Monitor will make a judgment on whether the service is operating in the interests of patients. However, I think that we are getting into an area where it would be beneficial to have a letter from me setting out exactly how the law is applied and by whom.
Lord Clement-Jones
I apologise for interrupting the noble Earl. However, to guide the letter, I want to point out that one of the key things is economic activity by the foundation trust concerned. Whether it is engaging in economic activity will, to some degree, be predicated by the behaviour of the decision of the NHS Commissioning Board and the CCGs on whether it is appropriate that there should be a market in particular services from the provider. That gets another actor, or actors, into the equation. This is one of the matters that concerns many of us, because it means that it will be possible in the future, even where no competition currently exists, for competition to be introduced and therefore for Monitor effectively, legally, to have to treat foundation trusts as undertakings.
Earl Howe
My noble friend speaks with great expertise. It would be helpful if I could cover that point when I write, as he suggests.
The noble Baroness has indicated that it would be better to retain the Co-operation and Competition Panel as a separate body. I am very clear that the noble Lord, Lord Carter, and his team have done an excellent job within the Co-operation and Competition Panel since it began its work in 2009. The panel has published important reports on NHS consultants and patient choice; their specific investigations have resulted in direct benefits to patients, such as improved access to primary care in the Kingston-upon-Thames area—that is one that I know of. However, I would not advocate retaining the Co-operation and Competition Panel as a separate organisation, because that would result, in my view, in unnecessary fragmentation and, indeed, duplication. The arrangement we have at the moment has resulted in undue delays and duplication of resources, as the decision-makers have inevitably sought to review the panel’s investigations before taking any action. My noble friend Lord Newton highlighted that issue once again. I have examples in my brief which replicate his experience. Those delays caused unnecessary uncertainty for the NHS organisations involved and their patients. I emphasise again that our proposals would address this by integrating the advisory role of the Co-operation and Competition Panel as a distinct identity within Monitor.
The noble Baroness, Lady Meacher, spoke of the searing experience of Mid Staffs. Of course, we all recognise that the problems of Mid Staffs must be looked into carefully. That is going on at the moment and I am not able to say too much for obvious reasons. But the problems at Mid Staffs, as she will be aware, predated its becoming a foundation trust. After authorisation, its governors were new and fairly inexperienced. Learning from what happened, I am confident in saying that quality now plays a critical role in the authorisation process for new foundation trusts. The governance of foundation trusts in which they are accountable to representatives of the public and staff should help organisations to listen and act on feedback. The events at Mid Staffs demonstrated the importance of having strong, transparent and accountable governance arrangements for the safe and effective operation of the trust. The changes we are making should provide greater accountability to the public and staff and increased transparency so that they can better challenge and scrutinise the delivery of local healthcare provision.
My noble friend Lord Clement-Jones asked what would stop Ministers creating new markets. I hope noble Lords will agree that it must surely be right for doctors and health professionals to want to do the best for their patients. Under this Bill, it would be for commissioners to decide if, when and how to use competition as a means to an end in improving services for patients. The Secretary of State would not have the power to direct commissioners on these matters and the Bill expressly prohibits the Secretary of State exercising his powers to make regulations on commissioning or in setting a mandate to increase market shares for private providers. My noble friend Lord Clement-Jones cited the BetterCare and FENIN cases as an example of how NHS commissioners might act as undertakings. As we have previously made clear, the Government’s view is that the NHS Commissioning Board and CCGs will not be undertakings. Unlike in the BetterCare case, neither the board nor the CCGs will be able to provide services. They will only be responsible for commissioning services for the NHS, which will not be an economic activity for the purposes of competition law.
Lord Clement-Jones
My Lords, I apologise. I expressly said that the concerns were not surrounding commissioning but around provision.
Earl Howe
That is helpful. My noble friend and I are clearly in agreement. I apologise if I imputed any different views to him.
The noble Baroness, Lady Armstrong, indicated that she felt that the oversight powers for foundation trusts should be retained. As the regulator of all providers of NHS-funded services, Monitor will continue regulating foundation trusts under this Bill. These would be enduring functions, not transitional. I hope the noble Baroness is reassured by that. What would be transitional, however, is Monitor’s power to remove foundation trust boards and board members. That is what Clauses 109 to 112 provide for until 2016, although the Secretary of State would be able to extend the transition period by order, as I indicated earlier, if he or she considered it necessary.
My noble friend Lord Ribeiro sought assurances that all providers will work on a level playing field. I am happy to assure him that all providers will indeed be required to meet the same quality standards for the same procedures. Before being qualified, providers will be required to demonstrate that they can meet those quality standards and Monitor will set fair prices for all providers. Competition, as I have said on previous occasions, will be on quality and not on price. If my noble friend will allow, I shall write to him in some detail with answers to his specific questions, which of course were extremely pertinent. I will copy the letter to all noble Lords who have spoken in this debate.
The noble Baroness, Lady Armstrong, also said that the Secretary of State should not raid the budgets of successful foundation trusts. I can assure her that this Bill would not enable the Secretary of State to direct individual foundation trusts or to raid foundation trust budgets, which she has rightly cautioned against. She said that there was a need to ensure that the new system should allow care to be shifted out of hospital. I share her view on that. It is essential that the new system enables more care to be shifted out of hospital into people’s homes and communities. This will require strong commissioning, and that is a key point made by the King’s Fund.
Lord Hunt of Kings Heath
My Lords, I declare my interest as chair of a foundation trust. It is quite simple for commissioners to be instructed to top-slice, say, 2 per cent of their budget and for the commissioning process to be used to divert money from some foundation trusts to others. What the Minister ignores in his construct of the Bill is the actual practice that is happening in the system at the moment.
Lord Hunt of Kings Heath
My Lords, I do not see how the noble Earl can get away from that. We have recently seen that the Secretary of State, having said that he will not intervene, has made three interventions, twice in relation to PCT behaviour and once in relation to the quality outcomes, and in the last debate the noble Earl said that he would continue to use that mandate in future. It seems to me that we will continue to see these kinds of central interventions. It is as if we were in parallel universes. In one, we have the Bill and the theory. In the other, we have the practical management of the health service. Which is it to be?
Earl Howe
Once again, the word “micromanagement” springs to mind. We want to get away from the Secretary of State micromanaging the health service. On the other hand, we think it is perfectly right and proper for the Secretary of State, on behalf of voters, patients and Parliament, to set broad objectives for the NHS, such as the NHS outcomes framework. That document has been very well thought out by clinicians led by Sir Bruce Keogh in the department and has, I believe, commanded universal approval. Surely this is the territory that the Secretary of State should be on: to drive up the quality of care and the performance of the NHS, but not to micromanage.
I recognise that there are fundamental fears that this Bill would increase the role of competition in the NHS and take us down the road to privatisation. I need to be clear that it is not the intention of this Bill, and I do not believe that it is the effect of this Bill, to privatise the NHS. The Bill reaffirms that the NHS will always be there for everyone who needs it, funded from general taxation and free at the point of use. Extending choice and increasing competition is not about privatisation. We want patients to be able to choose to receive their care from the highest-quality providers. Competition in services, where it is introduced, should only be introduced when commissioners genuinely and for good reasons believe that it will benefit patients and the quality of their care. Should we allow this to happen without any check that it is happening legally and properly? Our answer is no; it needs to be overseen fairly and apolitically by a sector-specific regulator with the interests of patients as its core duty.
As with other parts of the Bill, I am more than willing to enter into discussion with noble Lords on Part 3, and I have already indicated that I am sympathetic to some of the key concerns which these amendments raise. With that in mind, I hope that we can move on and debate different issues arising from this part of the Bill and that noble Lords will feel content for the time being not to press the amendments.
Lord Clement-Jones
The noble Earl said himself that we are clearly in slightly—very—uncharted territory here, and referred of course to the OFT guidance. It is largely a re-run of the 2004 OFT guidance. It is slightly clearer because the case law is slightly more developed, but not a great deal more. We are in the area of assessing risk in terms of the application of EU competition law, domestic competition law and so on. Therefore, in these circumstances, we need the best advice. As I said earlier in my remarks, it is not so much a matter of the department asserting that such-and-such is the case but of having the benefit of some outside, independent legal advice—not that I am promoting the barrister’s profession, being a solicitor. Somebody well versed in competition law should be asked to advise on the risks that I set out at some length earlier today, otherwise we will struggle on with assertion and counter-assertion.
Baroness Thornton
My noble friend comes to my assistance in a very appropriate fashion and puts it much better than I did.
Finally, the question that we need to answer is: does the Bill increase the likely interference of competition law in the National Health Service? Does the Bill transfer power from the Secretary of State to Monitor, and is that a good thing? That is why I was pressing the Minister about who takes the decision about where competition law applies.
The Minister said at the outset that Part 3 is misunderstood. He is absolutely right. If the Government really want to put beyond doubt the issue of competition law and its place in the delivery of our National Health Service, we have to simplify, clarify and delete parts of Part 3 of the Bill. We have to take the NHS out of the danger zone of EU procurement law and competition law. That is the challenge that lies before the House when we return to consider this at a later stage in the Bill.
Earl Howe
My Lords, before the noble Baroness sits down, does she accept that European procurement law already applies? I do not think there is any dispute about that. I hope she will welcome my offer to write to cover issues relating to competition law, including giving my view on my noble friend’s suggestion of having an independent legal view. I have not taken a view about that at the moment, but I will gladly consider it.
Baroness Thornton
I accept both the invitation and comments that the Minister has made about procurement law. I refer him back to my comment about opening the door wide and inviting in the lawyers. I beg leave to withdraw the amendment.