Health and Social Care Bill

Lord Davies of Stamford Excerpts

Tuesday 13th December 2011 Lords Chamber

[Lord Davies of Stamford]

Can I take the Minister back to the all-important matter of Monitor? I think he said this morning that he recognised that there were potential conflicts of interest in Monitor’s role. Monitor will continue to have its role of oversight over foundation trusts until 2016. The Minister has said today that that can be continued beyond 2016. Monitor will now be given responsibility for competition policy: in other words, for all the supply side, whether private sector, independent, or foundation trust. Is there not a conflict with Monitor having this responsibility for foundation trusts and then being responsible for the oversight of the rules of competition and the supply side? Monitor will also be responsible for oversight on the other side: the commissioning and customer side. Is this not an intensely problematic situation, and will the Minister say how he intends to resolve these issues?

[Earl Howe]

My Lords, the noble Lord, not for the first time, is ahead of me. It is no accident that we have a group of amendments that deals with potential conflicts and how these are to be resolved. It might be better, if the noble Lord agrees, to wait an hour or two until we reach those amendments.

My noble friend Lord Newton indicated from his own personal experience that mergers, when they occur, are far too bureaucratic. I fully agree with him. The Department of Health, the Co-operation Competition Panel and, if it involves a foundation trust, Monitor, all currently play a role and may have conflicting views which lead to uncertainty and delay. Our proposals would create a simpler and much more streamlined process for the NHS.

My noble friend indicated his strong view that safety and quality—not competition—should be paramount. I am sure it will not have escaped his notice that improving quality is what these reforms are meant to be about. We have been clear that patients’ interests, especially their safety and the quality of the services they receive, have to be paramount. That is why Monitor’s overriding purpose is to protect and promote patients’ interests. It is why the board will have a duty to improve quality, why the CQC will underpin quality; and why competition will be used only as a means to improve quality. Where there are better ways to improve quality—and there may be—they will be used instead.

My noble friend Lord Clement-Jones, in his extremely interesting and—I do not mean to sound patronising—well-informed speech, took us through some of the intricacies of competition law. Although he did not say this, there has been a suggestion from a number of quarters that we are in a knowledge-free zone when we look at competition laws applied to the NHS. In one sense that is true because there is no case law that can guide us, but in another sense it is not true.

We can say many things with confidence. The point of competition law is to protect people from self-serving abuses like collusion or abuse of market power by restricting access to services. These self-serving abuses that harm patients are already prohibited in the NHS by the principles and rules for co-operation and competition, as introduced by the previous Government. This is not something new introduced by the Bill. Competition law applies to foundation trusts only in so far as they are acting as an undertaking, as my noble friend indicated—in other words, only where they are providing goods and services within a competitive market. Given the lack of directly applicable case law to NHS providers, there is some uncertainty about where that line is drawn.

A body can be an undertaking for some activities and not others. That is very clearly laid out in the OFT’s recent guidance, Public Bodies and Competition Law. For example, the foundation trust might be an undertaking for elective surgery, if it were provided in a competitive market, but it would be very unlikely to be an undertaking when providing NHS services in the absence of competition and while under a licensed obligation to maintain service continuity, which it could well be if Monitor chose to build that into its licence. In so far as foundation trusts may in the future be found to have abused their market power, what would then follow? It is important to understand what the consequences would be. In that situation, Monitor—