Health and Social Care (Re-committed) Bill

Diana Johnson Excerpts

Tuesday 6th September 2011 Commons Chamber

[John Pugh (Southport) (LD)]

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

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

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

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

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

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

and

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

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

Mr Roderick also says:

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

Referring again to Labour party principles, he says:

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

which were set up by Labour—

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

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

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

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

“recent reforms…have done much to alter”

the basic

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

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

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

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

[John Pugh]

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

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

--- Later in debate ---

[Grahame M. Morris]

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

[Diana Johnson]

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

--- Later in debate ---

[Chris Leslie]

I intended to make only a short intervention, but given the Minister’s cap on interventions, I decided that I needed to find a brief opportunity to say that removing the private patient cap is the wrong thing to do. The Minister’s basic argument— “I do not think I’m wrong”—really does not cut it. Removing the cap will remove an incentive for reducing waiting lists. The two issues of waiting lists and waiting times and the degree of private business within the NHS cannot be separated: they go hand in hand.

In a sense, a bit of ancient history is required, because it is important to note that the previous Labour Administration reduced waiting times so much that many of the private health insurers were, frankly, complaining. Long waiting lists matter because they are also the lifeblood of the private medical industry. We need only look at the advertising slogans of many private medical insurers to see how they try to entice people with promises of “speedy service” and “getting your health situation sorted out quickly”. This, however, can happen in the context of NHS hospitals.

What we must do is ensure that we put the needs of NHS patients first. My worry about removing the private patient cap is that it changes the incentives relating to how the foundation trusts will work, putting revenue generation ahead of patient treatment. The allure of revenue will, of course, be there, but keeping waiting lists high is, in a sense, part of ensuring that revenue continues to come in. I want to see trusts focused absolutely and completely on reducing waiting times. That is incredibly important.

It has been interesting to hear some of the important points raised by some Government Members—and not just about state aid rules. To me, however, the issue of waiting times and, particularly, this Administration’s watering down of the targets set for them and the issue of removing the patient cap are two sides of the same coin. It is all about driving people to go in a direction that they often do not want to go. People might have some savings and feel they have no choice but to use them for private provision because of the fear of long waiting lists in future. That might be the only way people feel that they can get treated quickly. It is all part of the design to change the whole fabric and nature of the NHS. That is the wrong direction in which to head, and I hope that we can retain the private patient cap.

[Diana Johnson]

I support amendment 1165. Although I have a great deal of respect for the Minister, his comments did not persuade me. The proposal to remove the cap is an example of the shambolic way in which the Bill has been presented. There seems to me to be very little evidence to back up what the Minister thinks might happen. He thinks that everything will be OK, but the NHS has never been in the position of having to make £20 billion-worth of efficiency savings—or cuts, which is what they really are. I believe that when the cap is removed, trusts will want to increase the income that they can obtain from private patients. My hon. Friend the Member for Warrington North (Helen Jones) made the good point that when waiting lists lengthen—which we know they are already beginning to do—those who pay will do so in order to receive the medical treatment that they want.

After 1997, NHS waiting lists in Hull fell to their lowest ever level. A private hospital that sat in the middle of an NHS trust—it was then the Hull and East Riding acute trust—was sold to the NHS. It had not been getting enough business, because the NHS was doing so well. We have heard in today’s debate about the high level of support for the NHS and about the current high levels of satisfaction, and I do not think that we should take this step.

Earlier, I spoke of the lack of principles that the Liberal Democrats were exhibiting yet again in respect of the NHS. It was interesting to hear the hon. Member for Southport (John Pugh) say that he was not doctrinaire on the issue. So the hon. Gentleman has no principles, and is not doctrinaire either. I recall that, in 2010, the Liberal Democrats campaigned in my constituency on a platform of saving the NHS, not increasing the number of private patients. I think that when this measure reaches the House of Lords, Liberal Democrat peers must stand up and be counted, because it is a disgrace that Liberal Democrat Members should support it today.

My main concern relates to evidence. Where is the evidence that removing the cap will work? I do not think that the safeguards exist to ensure that NHS patients will be protected, and I know that waiting lists are rising, which means that people in my constituency, and in poorer parts of the country, will not be able to gain the access to health care that they deserve. I believe that removing the cap is entirely wrong.

[Andrew George]

It is a pleasure to follow the hon. Member for Kingston upon Hull North (Diana Johnson), but I do not think she did herself or her party any favours in trying to persuade my Liberal Democrat colleagues and me to follow her or her party’s lead by launching a completely unacceptable attack on my hon. Friend the Member for Southport (John Pugh).

The Minister seemed to be trying to win me over by describing me as “the hon. Member for Cornwall”. His description stimulated my Cornish imperialist tendencies, and I was tempted to change that to “Cornwall and bits of England”. However, I shall leave it for another Bill, perhaps one relating to boundary reviews.

In his response, the Minister said that the cap was a “blunt instrument”. I acknowledged that in my opening remarks: it is indeed a blunt instrument, which does not achieve what I think we all want it to achieve. However, although the current situation is not satisfactory, neither is the proposal to lift the cap. That too is a blunt instrument, as was made clear by many speakers this evening. I do not think the Minister entirely acknowledged that this is a conundrum that needs to be resolved. As I have said before, the Government are right to address the issue and are doing so with the best of intentions, but they have come up with the wrong answer. Indeed, lifting the cap is not an answer at all. Further work is needed, and deleting clause 168 would be a good start.

As I have said, mine are probing proposals. I will support amendment 1165, but I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.