Health and Social Care Bill

Lord Owen Excerpts

Tuesday 13th December 2011 Lords Chamber

I have seen the department’s response to the counsel’s opinion by 38 Degrees, which raises the European competition issue by reference to a number of issues in the Bill that overlap with those that I have raised, and in some cases go beyond them. This does not essentially argue the case, but it simply makes assertions in response. Simple assertions will not suffice. The Department of Health needs to produce independent counsel’s opinion to back up its assertions that the risks have been properly assessed in respect of commissioning and that the contents of the Bill, particularly those areas that I have outlined, do not increase the risk of EU competition law applying, or that it intends to mitigate them by specific amendments. Failing that, on these Benches we will be seeking major changes to the Bill, and I look forward to the reply of my noble friend the Minister.

[Lord Owen]

My Lords, I hope I will not be spending too much time on the excellent argument that we have heard from the noble Lord, who is a lawyer. I agree with everything that he has said, except that I want to draw attention to the absence of detail that, if we do not move now, we will confront when we face regulations on competitive markets and on the whole question of a qualified person.

Let me first say to the Minister that it should be very clear that there is no consensus whatever on this aspect of the Bill. You cannot be aware of the arguments among general practitioners, among surgeons and physicians and within the nursing and midwifery profession and still believe that there is consensus on this question of competition. There is very considerable concern. As to his assertion that all this was fundamental to the modernisation of the NHS, if this is not changed it will be fundamental to the destruction of the NHS.

Let us start with the first issue. We have evidence— like evidence-based medicine—about what unbridled competition does to a national health service. It has been referred to earlier in the debate. I recommend noble Lords to look at the question raised in the article by Colin Pritchard in the Journal of the Royal Society of Medicine this year, comparing health service competition policies in the USA, the UK and 17 western countries between 1979 and 2005. The conclusion is:

“In cost-effective terms, i.e. economic input versus clinical output, the USA healthcare system was one of the least cost-effective in reducing mortality rates whereas the UK was one of the most cost-effective over the period”.

This is not a health service that deserves to be turned upside down and it does not deserve to be exposed to the American healthcare system. I have had 17 years as a non-executive on the board of one of the biggest American healthcare companies, Abbott Laboratories. Many aspects of American medical scientific research are the finest in the world. Many aspects of medical and surgical care in certain specialised hospitals in the United States are undoubtedly the best in the world. There is considerable excellence, but if you look at the system overall there is a deplorable decay in quality of care in some parts of the United States, which would make a third world developed country ashamed. I am not prepared to be borne along by some vague talk of consensus on this Bill. The Bill is hated in many aspects, particularly this aspect, in the National Health Service. The BMA has said that it should be withdrawn and has calculated that it would be less disruptive to withdraw it now than for it to continue.

Let me take up some other aspects. I shall speak to the Amendments 278AA, 278BB and 278BC in my name. Amendment 278BB would insert,

“shall not commission services through competitive markets through a competition-based mechanism”.

“Competitive markets” is a term of art. It has meaning in the world of competition. The requirement to manage competitive markets arises from supra-national legislation, with a detailed regime that must be applied, specified in EU law and reflected in national law. That is an obligation to reflect the EU regime unless some clawback of sovereignty is made.

That is the situation, and it applies right across the board. Mr David Bennett, who is to be the chairman of Monitor, wrote in an article in the Times in February:

“We, in the UK, have done this in other sectors before. We did it in gas, we did it in power, we did it in telecoms … We’ve done it in rail, we’ve done it in water, so there’s actually 20 years of experience in taking monopolistic, monolithic markets and providers and exposing them to economic regulation”.

First of all, I do not concede that the National Health Service is a monopolistic, monolithic market. It is a very interesting fact, which is frequently forgotten, that the GP is an independent contractor, and has been since 1948. Many of the debates in this Chamber focused on this issue. My father was a doctor before the National Health Service. He charged patients because he had to. He hated doing so. But he was adamant that he was not going to go into a National Health Service—which he wanted and which he voted for in 1945—if he had to give up his independent contractor basis. He may have been wrong or he may have been right, but it is a massive difference in how you describe the NHS when you think of these independent contractors who have been there from the start.

There are many other aspects of the hospital basis of the National Health Service, which took on in 1948 the spirit and commitment of voluntary hospitals up and down the country. Their assets were frankly seized by the state, but fortunately a lot of their moral underpinnings and fundamental values were not. It has been one of the triumphs of the National Health Service that it has been able to take some of that voluntary spirit and keep it within the National Health Service. Why was it that for decades, hospital doctors, surgeons and physicians worked very long hours uncomplainingly? What absurdity it is that that has been taken away from them by EU regulations and we have successive Governments who all agree that it is ridiculous nonsense, but they can do nothing about it. We are about to do the same to the whole National Health Service on this EU point. This is not a minor point.

The noble Earl knows that I respect him very greatly as a parliamentarian. He has shown it day after day in the patient way in which he has examined the debates in this House, many of which have not been controversial, but have been informative and intelligent and could make some addition to this Bill. But I am afraid that on the fundamentals he speaks for a department that shows at every serious part of examination of the Bill that it is not prepared to provide us with the true facts. We had this debate about risk assessment. Let me come to the issue about competition. In 2006, a Labour Government commissioned a major study on competition and the effects on the EU. It is a scandal that I have been trying for months through Freedom of Information to get hold of this document so that we would have it before this debate.

--- Later in debate ---

[Earl Howe]

They are there because this is the first time that any Government have attempted to bring together under one umbrella the disparate parts of our existing system for regulating and controlling competition. As I said earlier, we have that system in skeletal form, but there are lots of gaps and inconsistencies. By bringing them under one umbrella, as this Bill does—I am afraid that it inevitably occupies a goodly number of clauses—we will have a coherent system of regulation for the future.

Establishing concurrent powers for Monitor would not extend the scope of competition law or its applicability to the NHS; that is an important point for noble Lords to appreciate. Why have a sector-specific regulator? For me, the reason is that, instead of such matters being reserved for the Office of Fair Trading, Monitor will be able to lead on these issues in its capacity as a regulator with statutory duties to protect and promote patients’ interests and to enable integration, and as a body with much greater knowledge and expertise of healthcare compared with the Office of Fair Trading. That would include, for example, where arrangements such as clinical networks, which may restrict competition, deliver overriding benefits to patients. Just because there is no competition, that does not mean that the behaviour in question is anti-competitive.

That view was forcibly brought out by the NHS Future Forum. As I have said, competition is just one of the tools available to the commissioner in securing access and improving services, and it will be the commissioner, not Monitor, who will decide where and how to use it. That is not new. The use of competition—for example, through competitive tendering—is already well established in the NHS. A range of providers—NHS, voluntary, and independent—are contributing to improving services for patients.

Of course I understand the passion with which the noble Lord, Lord Owen, spoke; my concern is that his amendments would remove from the Bill a protection for patients in relation to the actions of commissioners. That is very important; if the noble Lord’s amendments were accepted we would have commissioners taking decisions that were not overseen or checked in any way, which would be very dangerous. It would also be a backwards step from the existing principles and rules that apply to primary care trusts and that were introduced by the previous Government. The noble Lord, Lord Owen, said very interestingly that according to his research the French railway system is not subject to EU competition law. I defer to his knowledge of French railway legislation but, as is made clear in the OFT’s recent guidance, the issue of whether competition law applies requires an analysis of the activity in question. To insert a clause into the Bill just to say that EU competition law shall not apply to the NHS would not achieve that aim. EU competition law is a fact, so we have to ensure that the system that we put in place protects patients against breaches of the law and that when breaches do occur they are remedied effectively.

[Lord Owen]

What about the issue of letting the House have the information that was produced for the previous Government before they came forward with their proposals? Is he prepared at least to look at that question, which is currently before the Information Commissioner?

[Earl Howe]

I shall indeed look very willingly at that question and I am grateful to the noble Lord for raising it. Although I might not appear to be at times, I am very keen to be as open as possible about as much as possible. Whatever I can do to facilitate this I will, although it is not a matter that I have been directly involved in.