NHS (Private Sector)

Andy Burnham Excerpts

Monday 16th January 2012 Commons Chamber

[Andy Burnham (Leigh) (Lab)]

I beg to move,

That this House believes there is an important role for the private sector in supporting the delivery of NHS care; welcomes the contribution made by private providers to the delivery of the historic 18-week maximum wait for NHS patients; recognises a need, however, for agreed limits on private sector involvement in the NHS; notes with concern the Government’s plans to open up the NHS as a regulated market, increasing private sector involvement in both commissioning and provision of NHS services; urges the Government to revisit its plans, learning from the recent problems with PIP implants and the private cosmetic surgery industry; believes its plan for a 49 per cent. private income cap for Foundation Trusts, in the context of the hospitals as autonomous business units and a ‘no bail-outs’ culture, signals a fundamental departure from established practice in NHS hospitals; fears that the Government’s plans will lead to longer waiting times, will increase health inequalities and risk putting profits before patients; is concerned that this House has not been given an opportunity to consider such a significant policy change; and calls on the Government to revise significantly downwards its proposed cap on the level of private income that can be generated by NHS hospitals.

It is a year this week since the Health and Social Care Bill was introduced in this House. Unlike the Government, we wanted to mark the anniversary, and having this Opposition debate seemed the right way to do it. It is being held because the Government have effectively sidelined this elected House from the debate about the future of the national health service. No single issue matters more to the people who put us all here, but what the future holds for the hospitals in our constituencies is no longer up to us. Instead, it is the unelected House that is right now carving up England’s NHS through back-room coalition deals. Ministers are making a series of desperate concessions in the other place to try to preserve the pitiful levels of support that remain for this unwanted and unnecessary Bill.

For the avoidance of doubt, let me summarise this scandalous situation. Here we have a Bill that nobody voted for. It was not in either the Tory or the Lib Dem manifestos, and it was ruled out specifically by the coalition agreement, yet it was rammed through this elected House so that the real decisions could be taken down the corridor in the unelected House. It is truly an affront to democracy that our nation’s most valued institution should be treated in this way. It thus falls to the Opposition to let this House take a view this evening on the far-reaching amendments to the Bill that are now being tabled, which Ministers were clearly too scared to table in this House.

[Mr John Redwood (Wokingham) (Con)]

As we are debating the role of the private sector in health, does the right hon. Gentleman agree with the former Labour Health Secretary who said “PFI or bust”, and should he not have said “PFI and bust” given the way Labour ran PFI?

[Andy Burnham]

No, I would not agree. I shall explain the policy that our Government adopted on the private sector and how different it was from that of the Government whom the right hon. Gentleman supports. In making our argument we will expose the terrifying gap between the Prime Minister’s rhetoric on the NHS and what he is doing in reality. People will recall the efforts that went into rebranding the nasty party. The Conservatives were at great pains to tell us that they would be pro-environment, a bit less tough on crime and pro-NHS going forward. Many photo calls were arranged to send those messages to the public, but it was poor old NHS staff who featured far more than huskies or hoodies in being brought in to promote hastily made political promises. We were told there would be real-terms increases for the NHS, a moratorium on accident and emergency department closures, thousands more midwives and, famously, no top-down reorganisation—four promises made in opposition: four promises broken in government. I still have not worked out how a Prime Minister can go from agreeing there should be no top-down reorganisation with his coalition partners after the election to bringing forward just weeks later the biggest top-down reorganisation ever in the history of the NHS. How does that work? Perhaps Lib Dem Members will enlighten us this evening.

Our evasive Prime Minister is the master of making statements that sound good at the time only to turn out to be meaningless in practice. Tonight we will focus on his most outrageous yet. On Monday 16 May last year, under pressure to reassure people about the Health and Social Care Bill and in the middle of the enforced pause, the Prime Minister said, in a speech:

“That’s why, when I think about what our NHS will look like in five years time, I don’t picture some space-age institution, a million miles away from what we have now. Let me make clear: there will be no privatisation”.

Those were his words—“no privatisation”.

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

indicated assent.

[Andy Burnham]

The Minister of State says that is right, and he is free at any point to get up and challenge what I say or to prove how he can make that statement. I will give him the opportunity to do so soon.

The Prime Minister could not have been clearer—“no privatisation”. Similar statements were made during the pause by the Deputy Prime Minister. On the Marr programme on 8 May, he promised that safeguards would be brought forward in the health Bill. He said:

“What you will see in this legislation are clear guarantees that you are not going to have back-door privatisation of the NHS.”

He followed that up on 14 June with this promise:

“Patients, doctors and nurses have spoken. We have listened. Now we are improving our plans for the NHS. Yes to patient choice. No to privatisation. Yes to giving nurses, hospital doctors and family doctors more say in your care. No to the free market dogma that can fragment the NHS.”

Those statements from the Prime Minister and the Deputy Prime Minister were significant for two reasons. First, they revealed an understanding at the top of Government about how, more than anything else, fears about privatisation and the market in the NHS were driving professional disquiet about the Health and Social Care Bill—a Bill that was sold as putting doctors in charge but that had a hidden agenda of breaking up the structures of the national planned health system to allow a free market in health. Secondly, they implied that major changes to address those concerns would be made to the Bill and that there would be a return to the existing policy of the managed use of the private sector within a planned and publicly accountable health system.

Let me be clear. As our motion states, we believe that there is a role for the private sector in helping the NHS to deliver the best possible services to NHS patients, and that was the policy we pursued in government. Without the contribution of private providers, we would never have delivered NHS waiting lists and times at historically low levels, but let us put this in its proper context. Our policy was to use the private sector at the margins to support the public NHS. So, in 2009-10, 2.14% of all operations carried out in the NHS were carried out in the independent sector and spend in the private sector accounted for 7.4% of the total NHS budget. I would defend those figures, because that helped us to deliver the best health care to the people of this country.

Furthermore, we supported a system allowing foundation trusts to generate income at the margins of their activity from treating private patients but with a clearly defined cap to protect the interests of NHS patients at all times.

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

Does the right hon. Gentleman accept that the cap was not clearly defined but was very variable according to the hospital, and will he now say that it was wrong for the previous Government to set the cap at over 30% for the Royal Marsden hospital, which is a centre of excellence?

[Andy Burnham]

I agree that the cap varied according to historical levels of private sector activity within the different trusts. The hon. Gentleman is absolutely right about that, but he must agree that it was clearly defined in respect of every individual NHS hospital. They had a clear number and local people were able to hold them to account for that number. Where hospitals had large numbers, the cap froze their level of activity at the level when the cap was introduced.

[Mr Stephen Dorrell (Charnwood) (Con)]

Just to be clear, could the right hon. Gentleman explain why it is in the interests of NHS patients in a particular hospital for that hospital’s capacity to generate additional revenue from the private sector to be limited by a cap?

[Andy Burnham]

I will explain that very clearly. I am sure the right hon. Gentleman will have read the impact assessment to the Bill, which warns of the risk of lengthening NHS waiting lists if existing capacity is made available to private patients. It says that if additional capacity is provided, there might be no effect on NHS waiting lists. That is why this is dangerous, because all the progress that Labour made on reducing long NHS waits would be put at risk by the careless and cavalier policy of simply abandoning the principle of the cap, which has stood us in good stead.

[Mr Dorrell]

rose—

[Mr Simon Burns]

rose—

[Andy Burnham]

I shall give way to the Chairman of the Select Committee on Health once more and then to the Minister.

[Mr Dorrell]

I apologise to my right hon. Friend on the Front Bench. Could the right hon. Gentleman explain more clearly than he has so far why a hospital should reduce capacity at the same time as it is increasing revenue?

--- Later in debate ---

[Andy Burnham]

That is not what I said. I understand that the preferred policy was to have no caps or limits, but even if a generous and liberal cap was introduced there would be a major risk that hospitals under financial pressure would give beds, theatre time and appointments to private patients, enabling them to jump the queue and giving a much worse deal to NHS patients. That is the risk that the cap was designed to mitigate and that is why we support it.

[Mr Simon Burns]

Could the right hon. Gentleman explain the logic, under his Government, of having a cap on a minority of trusts—foundation trusts—while he as the Secretary of State and his Government did not impose a cap on the majority of trusts that were not foundation trusts?

[Andy Burnham]

There is a simple explanation. The right hon. Gentleman will remember, as I do, the debate on the foundation trust legislation. There were worries that if hospitals were made more independent and were not directly managed by the Department they would put the treatment of private patients before that of NHS patients. The cap was introduced to mitigate that risk. He will know that we had a policy that all trusts should become foundation trusts in time—a policy that his Government have adopted—so that the cap would apply to all NHS hospitals in time. I think that answers his question.

[Mr Burns]

If that is the case, rather than that it being forced on the Labour party by a rebellion of Back-Bench MPs in 2002, why did the right hon. Gentleman’s election manifesto in 2010 say that Labour would remove the cap?

[Andy Burnham]

It did not, and I would expect a Minister not to make misleading statements like that in a debate of this kind. It did not propose the removal of the cap: it said that more freedom would be given to NHS hospitals with a modest loosening of the cap. That was my policy as Health Secretary. We did not propose removal of the private patient cap.

[Rosie Cooper (West Lancashire) (Lab)]

Does my right hon. Friend know whether the private operations will be charged at tariff? Is there a limit on the charge hospitals can make? Will it be at tariff or at a premium on tariff? Would that not be a way of increasing the amount of resources coming in? Less work would be done on the NHS.

[Andy Burnham]

My hon. Friend raises an important issue. We have not had those safeguards; there has been no explanation from the Government of any safeguards that will be introduced under this liberal measure. This evening, we need to probe exactly what they have in mind. During the pause, they said that they would restrict any competition on price in the NHS, yet they are bringing forward a measure that would allow NHS facilities to be used for the treatment of private patients with no guarantee that the private sector would not try to undercut NHS tariffs. Those are precisely the questions that the Government have to answer.

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

Does my right hon. Friend agree that the fundamental change in the Bill is that the Government are imposing a new form, Monitor, which directly applies competition regulation in NHS delivery of services and undermines the principles and rules for co-operation and competition—PRCC—that arbitrate between commercial services and the NHS, which controlled the market?

[Andy Burnham]

That is exactly the point. The proposal has to be seen in the context of the health system the coalition Government want to create. They want a broken-down system where one hospital is pitted against another, where there is a duty on the Secretary of State to promote the autonomy of NHS organisations, so that they are out there on their own, having to stand or fall on their merits, with a clear incentive to drive up income gained through a relaxed private patient income cap. I shall come to that point in a moment.

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

Ministers are shouting, “Choice”, but is my right hon. Friend prepared to reflect on the merits of the private sector, both in the UK and abroad, in the efficiency of the service that it delivers?

[Andy Burnham]

When the Bill was introduced, great claims were made that it would improve NHS efficiency. That was one of the reasons the Government gave for subjecting the NHS to a huge top-down reorganisation; they wanted to make the system more efficient, but they made a mistake that many people make over time. They claimed that the NHS is inherently inefficient when in fact international evidence shows the exact opposite: the NHS model is the most efficient health care system in the world. That is because control of the system is democratically accountable, and national standards can be set through bodies such as the National Institute for Health and Clinical Excellence and entitlements can be set at national level. If that control is removed, we will see the emergence of a much less efficient health care system, like the many market-based systems.

[Charlie Elphicke (Dover) (Con)]

The motion

“notes with concern the Government’s plans…increasing private sector involvement in…commissioning and provision of NHS services.”

In Dover, our hospital was run down over the 13 years until 2010 and is now a shell. Why should the GPs not be able to commission another provider if the foundation trust will not fulfil its long-standing pledge to build a hospital and provide proper services for my constituents?

[Andy Burnham]

My argument would be that if those decisions are to be made, the people who make them should be accountable to the hon. Gentleman and the House, whereas the Bill that his right hon. Friend the Secretary of State is introducing proposes to push those things away. There will be an independent commissioning board that GPs and clinical commissioning groups will not be able to overturn; it will make the decisions. That is a completely unacceptable state of affairs.

Before the last election, we proposed a modest loosening of the private patient cap in response to pressure in another place when we were debating the Health Act 2009, but compared with our modest reforms, the Government’s plans are off the scale. Instead of private sector activity at the margins, the Health and Social Care Bill places market forces at the heart of the system. The private sector will not support the NHS, but will replace large chunks of the service in commissioning and provision.

[Chris Skidmore (Kingswood) (Con)]

I should be interested to learn—as I am sure would the whole House—the right hon. Gentleman’s definition of modest loosening. In the four years between 2006 and 2010, the amount of money going to the private sector rose from £2 billion to about £12.2 billion. Does the right hon. Gentleman simply oppose the 49% cap or will he pledge to reverse it if he returns to government? What exactly would the cap be? Would it be 30% or 12%? Please let us know.

[Andy Burnham]

May I refer the hon. Gentleman to the motion? Its request to the Government is not unreasonable; it asks them “to revise significantly downwards” the cap they have proposed.

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

To what?

[Andy Burnham]

I remind the Health Secretary that he is the Secretary of State, not me. It is for him to bring forward proposals. Forty-nine per cent: in that proposal he is saying that NHS hospitals can give equal priority to the treatment of private patients—that it can be as legitimate an objective for an NHS facility, paid for by the taxpayers, to be used equally for the treatment of private and NHS patients. I put it to the hon. Member for Kingswood (Chris Skidmore) that I am not prepared to accept a cap on that scale. It could lead to an explosion of private sector work in NHS facilities and I do not think that is in the best interests of NHS patients. I would be prepared to accept the Government’s bringing forward proposals that fulfilled a modest loosening of the cap, to give the NHS more freedom at this difficult time, but I am talking in single figures. I am not talking about a doubt-digit, 50% cap—a recommendation that hospitals devote half their resources to private patients.

[Mr Simon Burns]

Will the shadow Secretary of State kindly answer the questions put by my right hon. and hon. Friends about what modest means? [Interruption.] If I might read it out, the 2010 Labour manifesto says:

“Foundation Trusts will be given the freedom to expand their provision into primary and community care, and to increase their private services—where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS.”

There was no mention of a modest increase; it was open-ended.

[Andy Burnham]

The Minister is not listening. I answered his question. I proposed a small increase in the cap—in single figures; a couple of per cent, as I am on record saying at the time, to give NHS hospitals more freedom to generate more income, to be put back into improving standards for NHS patients. Can the Minister honestly look me in the eye and tell me that 49% is not a world away from the NHS that he inherited from our Government?

[Mr David Anderson (Blaydon) (Lab)]

The manifesto that we put together in 2010 did not envisage a health service where the Health Secretary had given up control. It envisaged a health service where the Health Secretary would still have control and could set a cap for foundation trusts.

[Andy Burnham]

That is absolutely the point. The Government want to create an NHS where Ministers can no longer say what can or cannot be done, so we have GP practices, such as Haxby in York, sending letters to their patients saying, “We have decided that we are not going to fund your minor operations any more, but by the way, we are now providing those operations. Here’s our price list.” That is absolutely disgraceful, but it is a glimpse of the NHS that will emerge if the Health and Social Care Bill goes through. My hon. Friend is absolutely right: we must consider the wider context, within a system with competition at its heart and where every hospital is on its own and they are fighting each other. That is the context in which this 49% proposal needs to be considered. It represents a break with 63 years of NHS history and a “genie out of the bottle” moment. That is why we ask the House to reject it.

[Tom Blenkinsop]

My right hon. Friend is making a strong point. The Minister says that the cap was flexible during our term, but that was under principles and rules for co-operation and competition rulings. That meant that the servicing out of the contract was based on care quality. Unfortunately, the Bill does not have any area dealing with quality of care; it is purely about price. It is about allowing Monitor to apply the pure regulatory format of the Competition Commission as it exists in other utility markets.

[Andy Burnham]

My hon. Friend anticipates me. I shall come to precisely that point in a moment, and it will backs up his point that the Bill is akin to the privatisations of the 1980s.

[Anna Soubry (Broxtowe) (Con)]

What?

[Andy Burnham]

Just hang on and listen. Nothing has been done to the Bill to bring together the Prime Minister’s and Deputy Prime Minister’s promises that there would be no privatisation. There has been no substantial change since the pause.

Let me come directly to whether the Bill represents a privatisation of the kind that we saw in the 1980s. In doing so, I shall refer to a report from the King’s Fund, which I recommend to the hon. Lady. The Government have failed to introduce measures that they promised, months after the pause, so it is still considered appropriate for a body as respected as the King’s Fund to make a fairly shocking comparison that, indeed, the Bill is similar to the privatisations of the Thatcher Government. The report says:

“The Government’s proposals draw heavily on the regulatory framework developed in telecoms and utilities regulators …Interestingly, Secretary of State for Health Andrew Lansley’s own ideas for the reform of the NHS, developed while in opposition, were born out of his experience of the privatisation and regulation of utilities in the mid-1980s when he was Principal Private Secretary to Norman Tebbit.”

There we—[Interruption.] Okay, there we have it. That is the view of the King’s Fund—this is a privatisation along the lines of those we saw in the 1980s.

To back up that point, the King’s Fund quotes from a speech that the Secretary of State gave in 2005 to the NHS Confederation. He said this of the 1980s privatisations:

“The combination of the introduction of competition with a strong independent regulator delivered immense consumer value and economic benefits.”

There are two problems with that statement. First, there are real questions about whether gas, electricity, water and rail customers feel that they have had immense value. Secondly, it is troubling that the Secretary of State for Health, of all people, considers the delivery of health care directly comparable to telecoms and utilities.

[Henry Smith (Crawley) (Con)]

Does the right hon. Gentleman recall saying in 2007 that he celebrated the role of the private sector in the NHS?

[Andy Burnham]

This is getting a little tedious. May I refer the hon. Gentleman to the motion, which indeed does the very same thing? It recognises the fact that there is

“an important role for the private sector”

in the delivery of good NHS care and celebrates the role that it played in helping us to deliver the lowest ever NHS waiting times. Before intervening in future debates, he might like to read the motion that the House is considering.

Let me quote the Secretary of State’s interesting 2005 speech to the NHS Confederation, which set out the essential ingredients that we now see in his Health and Social Care Bill. His plan was to

“maximise competition, transfer risk to the private sector…appoint a strong, pro-competitive regulator…set out clearly the standards which have to be met and how operators will be held accountable for them…be clear about how and by whom universal service obligations are to be met…ensure high quality information for customers”

and have

“more customers rather than fewer.”

That is, do not have a few monopolistic health authority purchasers. The Secretary of State is nodding in assent that that is, essentially, his Health and Social Care Bill. This is, of course, the basic framework that the House of Lords is considering, despite the Deputy Prime Minister’s claim to have rejected

“the free market dogma that can fragment the NHS.”

A phrase leaps out of that 2005 speech that, in the light of recent events, needs to be challenged. It is

“transfer risk to the private sector”.

While acceptable in theory, I wonder whether recent experience with the private cosmetic surgery industry has led the Secretary of State to reconsider whether and how, in the health context, that can be delivered in practice. In an NHS based on commercial contracts, would there not always be arguments about legal liability when things went wrong? Would it not be much harder to control quality and costs in such a way, rather than through the current planned and managed NHS system that we have?

[Mr Redwood]

On the point about implants, why did the NHS under Labour buy the same difficult implants that the private sector bought?

[Andy Burnham]

The point that I am making is about how to manage the system, how to ensure proper regulation and how to ensure that NHS providers and the system work in the interests of NHS patients. If the right hon. Gentleman is arguing that there would be the same control managing the system through a series of fragmented commercial contracts, I would be interested to have that debate with him. Frankly, I do not believe that he is being serious, if that is his point.

[Lyn Brown (West Ham) (Lab)]

I have been contacted by constituents who access their cancer and cardiac care from Barts and from the London hospital. They fear that as a result of the Bill their health needs will be deprioritised in favour of private patients who can afford to pay. What would my right hon. Friend say to my constituents about their fears?

[Andy Burnham]

I wish I could allay the fears of those people, but when there is a proposal placed at the heart of the NHS for hospitals to devote half their facilities—their beds, their appointments—to private patients, how is it possible to give that guarantee to those patients, particularly when the Government are relaxing the waiting time standards that we did so much to establish in the NHS, with the two-week wait for cancer referrals and 18 weeks for elective operations, and a four-hour wait in A and E? How can we have that confidence when, effectively, the Government are taking those safeguards off the public and giving the green light for a massive expansion of private sector treatment in NHS hospitals?

[Kate Green (Stretford and Urmston) (Lab)]

Does my right hon. Friend have any answer to the question whether private providers with obligations to their shareholders will inevitably face a conflict if risk is offloaded to them when their responsibility to their shareholders is naturally to ensure the best possible financial outcome for them?

[Andy Burnham]

My hon. Friend is absolutely right: this proposal brings that conflict right to the heart of the NHS. At the moment, NHS hospitals have a paramount and overriding duty to the treatment of NHS patients, but considering a health care system whereby services would be delivered through a series of commercial contracts brings that conflict of interest into the health care system—shareholders on the one hand, patients on the other. That is why there is such deep disquiet among health professions about these proposals. It is why those professions applied so much pressure last year, and the pause was ordered. It is why, I am afraid, they are still unhappy today—the Government have not addressed their concerns.

[Mr Lansley]

Before the right hon. Gentleman continues with this wholly erroneous line of discussion, will he reflect on the fact that the Bill introduces, for the first time, a transparency in accounting between NHS activity and any private income in any foundation trust, which he did not put into legislation? The Bill introduces a transparency that there can be no cross-subsidisation between NHS resources and any private activity. It introduces a legal requirement for any foundation trust to explain to the public at its annual meeting how it has used any private income to the benefit of NHS patients. Will he reflect on the fact that the primary purpose of a foundation trust is to provide NHS services? For it to do anything that was to the detriment of NHS patients, involving private patients, would be contrary to its primary purpose and unlawful.

[Andy Burnham]

There are a lot of questions there. The Secretary of State discusses the safeguards, but he has introduced them precisely because he has made a major break with 63 years of NHS history. He needs them because he wants a different health care system in this country, in which much more work is done by private providers and in which the commissioning of services is largely handed over to the private sector. That is why he has had to introduce those safeguards. We had a health service that was planned, managed and publicly accountable, but he is throwing all of that away.

[Dr Poulter]

I thank the right hon. Gentleman for giving way; he is very generous. Does he not agree that the two hospitals with the highest patient cap—the Royal Marsden and the Royal Brompton—use the money that they make through private income very effectively, and put it back in to make them centres of excellence for all patients, particularly their NHS patients?

[Andy Burnham]

That was the policy of the previous Government, but the cap was clearly defined. It was a tight cap, and it reflected historical levels of work. What we are talking about is a liberalising measure to enable the private sector to double if not quadruple the amount of work that it is doing, which is why we are debating the motion.

I shall pose a question for the Health Secretary, who mentioned safeguards. If it is all fine to create a different NHS in which we have many more private contracts, might not the NHS risk register have something to say about the risks of creating such an NHS and the additional challenges of delivering health care through a system based on commercial contracts? Might it not lead to a diversion of spending on lawyers and consultants, away from patient care? Is there not a great irony, as we have heard the Health Secretary bemoan a lack of ability to intervene in the recent situation while, at the same time, here he is promoting a Bill that removes his ability to do so on a much wider basis? He wants to hand over his ability to intervene to the independent NHS Commissioning Board. The irony of his position will not be lost on many people listening to the debate.

[Dr Phillip Lee (Bracknell) (Con)]

I have attended this debate to try to ascertain the direction of travel of Labour policy and to try to gain an understanding of its philosophy and underlying principles. I am somewhat confused, because you seem to be all over the place. Do you believe that health care is a commodity—[Interruption.] I apologise; I meant the right hon. Gentleman. Do you believe that health care is a commodity or not? Do you believe that access to health care is a right or not? The answers to those questions underpin the policies that you will introduce, I presume, in the next couple of years.

--- Later in debate ---

[Andy Burnham]

I do not know whether those questions were for me or for you, Mr Deputy Speaker, but let us assume that they were for me.

I introduced the NHS constitution, which enshrined for the first time the basic rights of NHS patients. I am proud to have done so, so I do not need any lectures from the hon. Gentleman about what we should do to improve health care in this country. I said in the motion that I am prepared to go back to my policy before the election in which we said that we would consider loosening the private patient cap. That is the policy that I have introduced to the House tonight. I am not prepared, however, to accept the wholesale abolition of that control to create a situation in which NHS hospitals can devote half their beds to private patients. If he is happy with that in his constituency, let him make the argument for it, but I am making an argument for a very different NHS from the one envisaged by Ministers.

[Tom Blenkinsop]

Is not the real question for the Government why on earth they have written the Competition Act 1998 into the Bill? Why have they written the Enterprise Act 2002 into it, and why have they allowed European competition law to create the haemorrhaging of a socially provided service under category B legislation? Why have they done that? What is the point? It can only be to loosen enterprise within the NHS for competitive purposes so that the private sector can come in.

[Andy Burnham]

My hon. Friend makes an important point. If the Bill was really about clinical commissioning, as the Government said at the beginning, and putting GPs in control, that could have been done through existing NHS structures. They could simply put clinical teams in charge of existing PCT structures. It could be done without any hassle or cost, but no, they completely broke down and rethought the whole system, because it was an ideological reform. Doctors oppose the measure, because they saw through the Bill, and saw it for what it was: a privatisation plan for the NHS.

Let me give three examples that demonstrate why the Prime Minister has not lived up to his “no privatisation” claim. The first is a letter sent by the Department on 19 July last year to NHS and social care leaders entitled “Extending Choice of Provider”:

“The NHS is facing a period of significant transition and financial challenge. But this is not a reason to delay action to address patient demands for greater choice”.

It went on to require all PCT clusters and clinical commissioning groups to identify three community services by 31 October that would be subject to an “any qualified provider” tendering process. That is significant because it exposes the ideological agenda behind the Bill and explodes the myth that it is about putting doctors in charge. If that was the case, logic would demand that it should be for doctors to decide whether or not any underperforming services could benefit from open procurement. That mandating of compulsory competitive tendering, even before Parliament has given its consent to the Bill, reveals the real direction of the policy. We simply ask how that can possibly be consistent with the Prime Minister’s promise of no privatisation.

The second example is the Department's guidance document to CCGs entitled “Developing commissioning support: towards service excellence”. I shall quote from the beginning of the document, which gives a clear statement of intent:

“The NHS sector, which provides the majority of commissioning support now, needs to make the transition from statutory function to freestanding enterprise.”

It could not be clearer, which is why members of the British Medical Association council called the document a “smoking gun”, confirming their fears of a stealth privatisation. The document confirmed that the Government envisaged large-scale privatisation of services to support commissioning—jobs that are currently carried out by public servants. It puts into practice the comments made by Lord Howe on 7 September 2011 at the Laing and Buisson independent healthcare forum:

“The opening up of the NHS creates genuine opportunities for those of you who can offer high quality, convenient services that compete favourably with current NHS care. If you can do that then you can do well. But you know that won’t be easy, the NHS isn’t a place to earn a fast buck...they will not give up their patients easily”.

On commissioning, he said:

“Commissioning support is an absolutely critical area for CCGs. Some of it will come from the PCT staff who will migrate over to the groups but there will need to be all sorts of support at various levels…There will be big opportunities for the private sector here.”

With reference to that second example, I ask the Secretary of State how on earth is that policy consistent with the promise made by the Prime Minister and the Deputy Prime Minister of no privatisation?

That brings me to the third example, which we have discussed tonight. Just before the Christmas recess, the plan, which threatens to change the very character of our hospitals, was sneaked into the House of Lords. I do not seek to argue that that provision would change the NHS overnight, but in the context of a competitive NHS, where there is an obligation to promote the autonomy of hospitals, I believe that it would completely change the character of our hospitals and the way they think and function over time. The effect of a cap at this scale—a staggering 49%—means that hospitals could give equal priority to private patients. It sets the NHS and private sector in direct comparison with each other, and creates the conditions for an explosion of private work in NHS hospitals.

It is such a liberal provision that the Government’s amendment will have virtually the same impact as abolishing the cap completely, and it is a world away from the current situation. It fails to protect the interests of NHS patients by giving equal priority to other patients. Indeed, it creates a conflict of interest, as trusts could even seek to push patients into their private beds.

[Charlie Elphicke]

I thank the right hon. Gentleman for giving way; he has been extraordinarily generous in accepting interventions. When he discusses privatisation of services, does that include services taken on by charities, social enterprises and mutuals?

[Andy Burnham]

I am not against services being taken on by charities, voluntary providers and, indeed, the private sector. I have never set my face completely against that, but I see clear limits on the involvement and the role of the private sector in the delivery of NHS services. I see the private sector supporting the NHS, working at the margins, providing innovation and support. The Health Secretary sees the private sector replacing large chunks of the NHS, set up in direct competition with it, which is a very different policy. I ask the hon. Gentleman whether he was elected to the House to support such a policy. Do not the constituents of Dover quite like the NHS that we have, and want it to continue as it has for its first 63 years?

I want briefly to mention the impact assessment. It gives this specific warning if hospitals loosen the private patient cap without creating additional capacity:

“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. This is the eventuality that the PPI cap was originally introduced to prevent.”

In other words, there would be a return to that traditional Tory choice in health care—wait longer or pay to go private.

That sums up the big difference between this Government’s approach to the private sector and that of the previous Government. In our system, the private sector was encouraged to throw its lot in with the delivery of the best possible NHS standards of care to NHS patients. By contrast, the world view of this Government sees private health care as a way out of the public NHS, trading on its failures as a means of boosting the private market.

The next question that I ask the right hon. Gentleman to answer is whether the 49% plan can possibly be consistent with the Prime Minister’s promise of no privatisation. We make a reasonable request this evening. We do not reject out of hand any change to the existing PPI cap on foundation trusts. Voting for the motion does not imply opposition to the entire Health and Social Care Bill. But we do reject a 49% cap, which is tantamount to abolition, and we call on the Government to revise it significantly downwards. Voting for the motion will send a signal from the House that the Government need to rethink.

In conclusion, I give notice that we will continue to oppose the Bill outright, and we will put everything we have got into that fight. Let me be clear. The Prime Minister should withdraw his “no privatisation” promise or he should withdraw his Bill. He cannot have it both ways. If the Bill is passed, I do not think there is any question but that it will lead to the privatisation of large chunks of commissioning and NHS provision. The truth is that this is an illegitimate Bill. Nobody voted for it, and it is a Bill that the Health Secretary has mis-sold to the public and professions. He claimed that it was about putting doctors in the lead, but doctors can see it now for what it is. From here on in, we on the Opposition Benches will call it what it is—a privatisation plan for the national health service.

We have called the debate tonight to bring these dangers home to a much wider audience. Time is running out for the NHS and I will give everything I have got to protect the NHS that I believe in. This is worth fighting for because the NHS stands for something different in a world where large parts of our national life have been taken over by profit and money. Recent events have shown the dangers of mixing medicine with the market. People see health as different from other areas and overwhelmingly support the NHS as it is. By and large they trust it and see it as one area of national life where the money motive has not taken over. They want it to stay that way and they look at social care as a warning, showing how a fragmented system can drag standards down. Nye Bevan said there would be an NHS for

“as long as there are folk left with the faith to fight for it”.

This is the moment of greatest threat to our health service and I tell the Health Secretary and the Government straight tonight to drop this illegitimate Bill or face the fight of their lives. I appeal to Members in all parts of the House who have worries about where the Government are going with the Bill to send a direct message to the Government and to vote as their constituents would want them to—for an NHS that will always put patient care before profits. I commend the motion to the House.

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[Mr Lansley]

What the hon. Lady describes is precisely what has happened time and again under the legislation we inherited, which is not transparent. Primary care trusts were not accountable or transparent and an enormous amount of activity went on with tenders that involved the private sector and was not conducted in the way that we want, which is on the basis of a tariff and on the basis of which provider is best able to deliver the highest quality.

Let me deal with the first of the myths propagated by the right hon. Member for Leigh: that we have some kind of privatisation agenda. We do not. As I recollect, the only time any Government had a specific objective to increase the role of the private sector in the NHS was when he was a Minister, his hon. Friend the Member for Leicester West (Liz Kendall) was a special adviser to the Department for Health and Patricia Hewitt was Secretary of State. That was when they were saying they wanted to increase the role of the private sector to 10% or 15%, and the Health and Social Care Bill contains specific provision not to allow such discrimination in favour of private providers in future.

[Andy Burnham]

The Secretary of State says that he has no proposals to increase privatisation. Will he confirm that he has sent a letter through the Department asking clinical commissioning groups to identify three community services that will be subject to a compulsory competitive tender?

[Mr Lansley]

No, because it is not compulsory competitive tendering. It will extend access to any qualified provider—

[Andy Burnham]

That is the same thing.

[Mr Lansley]

It is not. The right hon. Gentleman, having been Secretary of State, ought to understand the difference between compulsory competitive tendering and any qualified provider. Under compulsory competitive tendering, it is the primary care trust that gets to choose who provides the service, but under any qualified provider it is patients who get to choose. One example is access to wheelchair services. Voluntary sector organisations, such as Whizz-Kidz, are setting out to provide a better service. From its point of view, that is not competitive tendering. Wherever Whizz-Kidz provides the service, patients in that area—[Interruption.] If he wants to have a conversation with other Members, he may by all means do so, but I will sit down.

I answered the right hon. Gentleman’s point and I am afraid that it proceeds from a fundamental misunderstanding of the difference between competitive tendering processes, which have been the stuff of primary care trusts—in the past it was they that decided who should provide services—and giving patients access to choice so that they can drive quality. Unlike competitive tendering, which was generally price-based tendering decided on cost and volume, under any qualified provider it is not about price, but about quality.

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[Mr Lansley]

No, it is nothing to do with Monitor in those circumstances; those whom I have mentioned will make the choice.

The more choice there is, the more innovation there is, the more new ideas there are and the more pressure there is on all providers from all sectors constantly to raise their game for patients. The evidence supports that.

[Andy Burnham]

I have been listening to the right hon. Gentleman very carefully, and he made a statement a moment ago about there being no privatisation—that privatisation will not result from the Bill. Is he saying to us that his Health and Social Care Bill will lead to no additional privatisation of commissioning or provision in the national health service? It is a very clear question.

[Mr Lansley]

There will not be any transfer of responsibility for services from the NHS to the private sector; the NHS will continue to be responsible. The balance in the NHS—[Interruption.] No, I shall answer the right hon. Gentleman’s point. He is trying to interpret “privatisation” as every service currently provided by an NHS provider being provided by an NHS provider in the future, but whether services are provided by the NHS or by a private enterprise, a social enterprise or a charity will be determined by patients choosing who is the best-quality provider. So that is not privatisation; the service remains free, and it remains an NHS service. It is guaranteed to patients in exactly the same way, and there is no presumption in the legislation—in fact, it excludes any presumption—in favour of a private sector provider as against an NHS provider.

The right hon. Gentleman is in absolutely no position to make any criticism of that, because he served in a Government who introduced independent sector treatment centres. They went through the process of giving the private sector contracts that were not available to the NHS, with an 11% higher price on average and a guarantee that they would be paid even if they did not necessarily provide the treatment. The net result was £297 million spent on operations that never took place, and the private sector walked away with that money, so he is in absolutely no position to make any criticism, because we are going to exclude such practices. The contracts that the Labour party gave to the private sector when he was a Minister are exactly the contracts that our legislation will exclude.

[Mr Lansley]

Interestingly, under the so-called extended choice network that the Labour Government introduced, the number of elective operations conducted in the private sector went from, I think, 16,000 in 2005-06 to 208,000 in 2009-10—an enormous increase. From the right hon. Gentleman’s point of view, it was marginal capacity that did not really matter, but the point is that patients said that they thought it provided good quality care. In a Care Quality Commission survey, some 96% of NHS patients using independent facilities said that the elective surgery they received was “excellent” or “very good”. The figure for NHS facilities was 79%. On the NHS Choices website, nine of the top 20 highest-rated NHS-funded providers were run by the independent sector; there were no independent-sector hospitals in the bottom 20. The general proposition is that the private sector is worse in the NHS, but there is no evidence to support that.

The right hon. Gentleman will recall that the Royal College of Surgeons conducted a study of the quality of care, and its general conclusion was that the quality of clinical care offered to NHS patients by private sector providers was as good as the care offered by the NHS. So what is his point? He used the private sector, patients used the private sector and patients were happy. What is his point?

[Andy Burnham]

We did, and I have celebrated it already, because it delivered the lowest-ever NHS waiting lists, which I celebrate again. But I am listening to the right hon. Gentleman, and I get the impression that he is completely confused. He cannot admit that his Bill will lead to more privatisation, but that is at its core, and people listening to this debate would have more respect for him if he came to the Dispatch Box and made an argument for what he is trying to do—to create a market in health care. Is he just floundering around? He is no longer able to say what the Bill is really about. It is about more privatisation, so why does he not try to make an argument for what he is trying to do, instead of avoiding the issue?

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[Mr Lansley]

No, I am going to move on. There has to be time for people to contribute to the debate, so I do not want to go on for too long.

The Health and Social Care Bill will, for the first time, ensure that private and voluntary sector organisations have to meet the same exacting standards and be regulated in exactly the same way as NHS organisations when they provide NHS services. Because that extends to any organisation providing NHS services, whether it be private or voluntary, it is disingenuous at best and possibly disreputable for the right hon. Member for Leigh to draw any comparison with the PIP breast implants scandal. There is no comparison between the position of a private company working in the private sector providing private services and the role of a private company operating inside the NHS under NHS controls. He knows that there is no comparison. In the NHS, the patient will be wholly protected. It is our intention to ensure for the first time—this did not happen under the Labour Government—that when a private sector provider operates in the NHS, it has to provide equivalent indemnities to its patients as would be provided through the NHS. That did not happen when the independent sector treatment centres and other things were brought in. There will be better protection. The private sector operating outside the NHS is a different matter.

Myth No. 3 is that raising the cap on private income will lead to a worse deal for patients. The paradigm example is the Royal Marsden NHS Foundation Trust. Its private patient cap is set at 31%. That is because in 2002, 31% of its income was derived from private sources and that was the basis on which it became a foundation trust in 2004. Its current private patient income is 25.8% of its total income. The fact that it has a cap does not mean that it goes up to it. In fact, its private patient level has come down slightly. The effect of setting the cap at 10%, as suggested by the right hon. Member for Leigh, would be to take about a fifth out of the income of the Royal Marsden. The Royal Marsden, like Great Ormond Street, is a classic example of how having a thriving private income from research, joint ventures and patients coming from overseas can get a hospital to a place where it can also consistently be recorded as one of the most excellent hospitals in the NHS, where NHS patients get the best care. It has on one hand the highest level of private patient activity—or, strictly speaking, private income—and on the other hand the highest standard of NHS care. The two things are entirely compatible.

[Andy Burnham]

May I just ask the Secretary of State to correct what he has said about the statements that I made? I did not say that I would reduce the Marsden’s cap. I said that we would allow a small increase on the existing cap that is linked to trusts’ own historical levels of private work. It would help the debate if he would be careful to get my position right. I was not talking about an across-the-board, blanket 10% cap, I simply said that some trusts with a much tighter cap of 1% or 2% were asking for a little extra leeway, which I said should be provided. I am not proposing a 10% cap across the board.

[Mr Lansley]

I think I could be forgiven for not understanding what on earth the right hon. Gentleman was talking about, since he did not put it in his motion and my colleagues had to ask him three or four times before they got anything close to an answer—he was saying “10%, or in single figures, we’re not quite sure what it would be”.

We have always been clear that there is an inherent unfairness in some foundation trusts having a cap set at the maximum 31% and others having it set at 1.5%, as all mental health trusts did when they were allowed to become foundation trusts. Technically, all NHS trusts have no cap at all, and some of them use that flexibility. Great Ormond Street, for example, is an NHS trust, not a foundation trust, and it uses that freedom, mainly to treat patients from overseas. Are we to stop that happening? I ask the right hon. Gentleman where he would set the cap for Great Ormond Street. I will give way to him if he will tell me.

[Andy Burnham]

I am not defending the existing policy. The cap was set for each trust individually to reflect historical levels. The reason trusts such as the Marsden and Great Ormond Street have a more generous cap is the large amounts of private work that they carry out. [Interruption.] Yes, but if and when they become foundation trusts under the Secretary of State’s policy, they will have caps reflecting their historical levels of work if he adopts my suggestion. I have proposed that each individual cap be modestly loosened, but he proposes an across-the-board 49% cap applying to all NHS hospitals, effectively meaning that every NHS hospital could devote half their beds to the treatment of private patients. Will he confirm that that is the effect of the policy that he is bringing forward?

[Mr Lansley]

Answer came there none. The truth is, we are doing exactly what the right hon. Gentleman and his party intended to do. At the election, Labour said in its manifesto:

“Foundation Trusts will be given the freedom to expand their provision into primary and community care, and to increase their private services—where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS”.

That is what we are doing.

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[Mr Stephen Dorrell (Charnwood) (Con)]

It is a pleasure to follow the hon. Member for Easington (Grahame M. Morris). He and I are both members of the Health Committee and, surprisingly perhaps, we more often find ourselves in agreement about the objectives that we are trying to deliver than is obvious from the nature of the debates across the Floor of the House.

I shall focus my remarks on the speech by the shadow Health Secretary. I have some quite good news for him—he was a far better Secretary of State than he himself appears now to believe. As Secretary of State, he did not allow himself to fall victim to the kind of prejudices that have been ventilated this evening. Tonight, he fell into the old trap of eliding two concepts and pretending that they are the same. The two concepts are, on the one hand, privatising the health service, and on the other, involving the private sector in the improvement of care available to patients. As Secretary of State, he was well able to distinguish between those two concepts and pursued policies of involving the private and voluntary sector when there were opportunities to improve care for patients. He now prefers to forget the fact that during his time as a Minister we not only heard plans for involving the private sector in improving the care delivered to patients but saw an open-minded attempt to bring in the private sector to improve the process of commissioning in the health service. That was what world-class commissioning was designed to deliver. We are now asked to turn our mind away from all those ideas.

I, like my right hon. Friend the Secretary of State, am in favour of tax-funded care for patients. I am in favour of equitable access to high-quality care, like my right hon. Friend the Secretary of State and like the shadow Health Secretary. I am also, however, in favour of plural provision, looking for the best solution for patients and the best value for taxpayers. In that respect, I am, as the shadow Health Secretary used to be but apparently no longer is, a straightforward Blairite. This was the breakthrough that Tony Blair taught the Labour party that it now appears to have forgotten. It was Tony Blair who advocated the introduction of private hospitals into the delivery of care and Tony Blair who stressed the importance of the third sector in finding new ways of improving care for patients, yet it is now my right hon. Friend the Secretary of State who has to pick up the Blairite torch that has been so unceremoniously dropped by the shadow Health Secretary.

It is worth reflecting, is it not, on whether this Blairite consensus is the inevitable consequence of the principle of commissioning—

[Andy Burnham]

Will the right hon. Gentleman give way?

[Mr Dorrell]

I would be delighted to.

[Andy Burnham]

If the policy that the Secretary of State is pursuing is a continuation of our policy in government, why do the Government need many hundreds of pages of legislation and a new Bill?

[Mr Dorrell]

The right hon. Gentleman is in danger of creating another consensus. Indeed, there is a debate about whether the Bill moves things forward as far as the rhetoric suggests. I am on the record many times saying that the claims made for the Bill by, if I am honest, both the Government and the Opposition spokesmen are grossly overstated. It introduces greater engagement by clinicians in commissioning and greater engagement by local authorities in commissioning through the health and wellbeing boards, and those are good things. I agree, however, with the tone of the right hon. Gentleman’s last intervention: the new world is not quite as far removed from the old as he sometimes likes to suggest and as he suggested in his speech.

Let us focus for a second on what it means to have commissioners in the health service. When the shadow Secretary of State has more time one day, I would like to hear him talk us through the process, which he would, on occasion at least, advocate, of turning down a good idea that is brought to a commissioner to improve care for patients and good value for taxpayers because that idea comes from the private sector. I hold no brief for the private or public sector in the delivery of care; I hold a brief for tax-funded equitable access to higher quality care from whomsoever provides that care. That is what I mean when I say that I am a straightforward Blairite and I look forward to welcoming the shadow Health Secretary back into the fold.