Health and Social Care (Re-committed) Bill

Andrew George Excerpts

Tuesday 6th September 2011 Commons Chamber

[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.

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[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.

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[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.

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[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.

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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.

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[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.

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[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.

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[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.

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[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.