Manufacturing

Nick Smith Excerpts

Thursday 24th November 2011 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

All too often, the issue of defence management is sidelined, so it is good that we discussed BAE Systems earlier. I see this debate as an opportunity to emphasise the importance of defence manufacturing and procurement, which a colleague mentioned earlier.

I have been lucky enough to be a member of the Public Accounts Committee for the past 18 months, during which time we have focused partly on questioning top Ministry of Defence officials, making defence one of our Committee’s themes and, crucially, visiting our country’s manufacturing base by going to Govan in Glasgow and Rosyth in Edinburgh where our new Queen Elizabeth-class aircraft carriers are being built. In doing that work, we have considered a number of instances in which the MOD has not secured value for money in procurement. I raise those instances today because I think they undermine our manufacturing capability and make the work of our armed forces much more dangerous.

As a country, our priority should be to provide our troops with the equipment they need for the best possible value for money. Having a sustainable skills base is vital for that. In Britain, we have a thriving defence manufacturing industry, as I saw for myself at this year’s Defence and Security Equipment International exhibition. We have skilled engineers and fantastic research and development skills. Under the Labour Government, firms such as BAE had the opportunity to invest as the defence budget increased by 10% in real terms. The defence industry provides valuable exports for our country, as well as important skilled jobs. Having the latest technology can also be valuable as it gives our troops an edge on the battlefield.

What are the key figures? Defence spending has been cut, meaning we have £2.63 billion less to spend on our military over a five-year period. This leaves 7,000 fewer members of our armed forces needing armour, four fewer frigates to equip and 40% fewer Challenger tanks to arm. As a result, we cannot afford to sustain our domestic capability to produce the kit we need. Last year’s strategic defence and security review was criticised by the Select Committees on Defence and on Public Administration. It was seen as a tug of war between the Ministry of Defence and the Treasury.

Cost-effectiveness is important. Initially it was hoped that the decision to change the type of aircraft flown from the new aircraft carriers would save money. However, it has resulted in a multi-billion pound refit for the carriers because catapult and trap technology have to be added. That type of indecision can rapidly increase costs for manufacturers and, ultimately, for taxpayers. It also means that we will not have carrier capability until 2020 and that the carriers will not be fully operational until 2030.

The best way to ensure value for money in procurement is by ensuring there is genuine competition in the tendering process. One way in which the MOD has discouraged competition is by gold-plating its procurement plans. Yes, our soldiers should have the best equipment, but that can lead to delays and leave our soldiers without the kit they need for a very long time. Competition is key in achieving value for money in defence manufacturing. Competitive tendering has been the Government’s aim, but National Audit Office figures show that fewer than 20% of the current major projects nearing their service date were awarded through genuine competition. Some 40% of contracts, representing £8.7 billion a year—these are big numbers—have been awarded by single-source procurement, under which the MOD invites only one firm to tender. There is a danger that by excluding firms from the tendering process we are reducing our skills base and our capacity to produce certain equipment in the long term as firms build up monopoly status.

In conclusion, the best way for us to maintain domestic manufacturing capability is to have a number of firms with the ability to produce the equipment we need. That would protect more jobs throughout the industry, enable us to achieve better value for money and provide an incentive for firms to produce good-quality equipment on time. The point about being on time is particularly important. In future, both Government and industry must work to ensure that we have sustainability in our domestic defence manufacturing industry. Then we will better protect and arm our brave servicemen and women.

Oral Answers to Questions

Nick Smith Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Mr Burns]

I join my hon. Friend in congratulating staff at Kettering general hospital on their responsible attitude, and urge other NHS staff throughout the country to follow their example. I am heartened to note that, as a result of the planning and activity that has taken place in the NHS, more staff are having flu jabs than did so last year.

[Nick Smith (Blaenau Gwent) (Lab)]

2. What plans he has to implement the recommendations of the strategic review of health inequalities by Professor Marmot.

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

The public health White Paper “Healthy lives, healthy people” gave details of our response to the Marmot review, and addressed the social determinants of health in people’s lives. I am sure that the hon. Gentleman has read it. Yesterday we launched the University college London institute of health equity with Professor Sir Michael Marmot as its director, supported by the Department. The institute will help to promote the findings of the review across the NHS, public health and local government, and will ensure that health inequalities remain a priority.

[Nick Smith]

Parts of my constituency are more than 1,200 feet above sea level. We know about the impact of cold homes and fuel poverty on health. According to the latest figures, cold has caused 25,000 excess deaths in England and Wales. What discussions has the Minister had with the Chancellor about the need to invest in making our homes warmer to reduce the number of such deaths?

[Anne Milton]

I thank the hon. Gentleman for that question. He will be aware of the 27,500 excess winter deaths that occur across the country, which is an increase of 17% on the deaths that occur at other times of the year. We have invested £30 million in total—£10 million to the Department of Energy and Climate Change and £20 million that local authorities can bid for—which will help to reduce those figures. It is encouraging that despite a very harsh winter last year the number of excess winter deaths has not risen.

Hinchingbrooke Hospital

Nick Smith Excerpts

Thursday 10th November 2011 Commons Chamber

[Mr Burns]

I am extremely grateful to my hon. Friend. I have every confidence that what has been decided today is in the best interests of getting Hinchingbrooke hospital back on its feet. I am heartened not only by his support, but by the fact that the vast majority of people living in the Huntingdon and Cambridgeshire area fully support it, as do clinicians and the NHS locally. I was particularly heartened by a rational statement of fact by the RCN’s area organiser for Cambridgeshire—he was on the negotiating board—who said that he was very impressed when dealing with Circle and was looking forward to working for it. The ultimate point is that there was a possibility two or three years ago that if nothing could be done to turn the hospital around it would have been closed, which would not have been in the interests of local people.

[Nick Smith (Blaenau Gwent) (Lab)]

Will Circle be able to sell off any of the organisation’s assets and separate the ownership and operation of the hospital, as was the case with Southern Cross?

Obesity

Nick Smith Excerpts

Wednesday 9th November 2011 Westminster Hall

[Mr Campbell]

I thank my hon. Friend for that intervention. I hope that the Minister will respond to it. I want to come on to some of the things that Health Ministers throughout the United Kingdom—in the devolved regions as well as here—can do to deal with the issue, but my hon. Friend’s point is certainly well made.

Having diagnosed the problem, as it were, I want to consider what is being done. It is not all negative. A considerable series of measures is being taken, not just nationally but locally. Various councils, various health trusts in Northern Ireland and other bodies are actively engaging in trying to come to terms with the problem. Many programmes that promote healthier food choices are being actively promoted. I am aware of the healthy eating awards, and of course we are all aware of the food labelling issues that have come to the fore in recent years. There have been other programmes aimed at reducing the salt, sugar and fat in some foods. All those things are creating greater awareness among the wider community, but we are fooling ourselves if we think that the measures currently in place will arrest the problem.

I will turn at this point to what needs to be done now and for the foreseeable future. Obviously, the fast food industry is a key player in relation to the problem. Some people in that industry are quite responsible. Some have responded to the campaigns driven locally and introduced more healthy eating options—they are to be commended for doing so—but some have not. We need to see best practice not just nationally but internationally being analysed and then promoted, so that we can see significant progress.

At the moment, there is—certainly in Northern Ireland, and I assume across the UK—a better educational approach in schools. Our young children, particularly primary school children, are now getting information that simply would not have been proper protocol 25 years ago. Many people then would not have even seen the need for primary school children to receive that type of education. That is changing, but again, more needs to be done to increase awareness. We have all seen issues where, for example, healthy eating has gone wrong. Sometimes we see photographs in newspapers that show parents queuing up to give other types of food to children because healthy eating standards have gone awry. We need to ensure that the whole educational process about healthy eating for children is properly assessed and rationally implemented.

When we ally the fast food sector—I do not want to name any of the organisations—with a sedentary lifestyle, I think we can account for 80% to 90% of the obesity problem.

[Nick Smith (Blaenau Gwent) (Lab)]

The hon. Gentleman’s point about a sedentary lifestyle is important. The Welsh health survey 2008 showed that 21% of the population in Wales were obese. Does he agree that encouraging people to exercise and to avoid the sedentary lifestyle that he is talking about is important to reduce the alarming obesity rates, in addition to eating more healthily?

[Mr Campbell]

I agree with that; I was just about to come to the issue of exercising. I love walking, and when I get the time to walk, as I try to weekly, I despair at the rarity of seeing other people walking and exercising.

--- Later in debate ---

[Mr Burns]

My hon. Friend makes a valid point.

I will address a number of issues that some of my hon. Friends have raised. My hon. Friend the Member for Totnes (Dr Wollaston) talked about the important issue of weighing and measuring children. I hope that she will be reassured by the national child measurement programme. It measures children in reception class—four to five-year-olds—and in year 6. Those measurements and weights are fed back to parents, so that they can not only know the information, but make informed choices about the lifestyles of their children.

My hon. Friend the Member for North Swindon (Justin Tomlinson) made some valid and good points about the planning regime and open spaces that enable parents and children to exercise. His points were well made and sensible. It would be worthwhile for local government, which has responsibility for the issue, to read what he has had to say, particularly, as the hon. Member for Hackney North and Stoke Newington has said, because certain inner-city areas do not have the advantages of some of the more rural and smaller town constituencies, which have far more access to open spaces.

As a Government, our general approach to tackling the problem is based on the latest scientific evidence on the underlying issues and causes of obesity, as well as what has worked best previously. Ultimately, there is a simple equation: people put on weight because they consume more calories than they need.

[Nick Smith (Blaenau Gwent) (Lab)]

Will the Minister give way?

[Mr Burns]

No, I will not, because I have only three minutes. People need to be honest with themselves. We need to recognise that we are responsible for controlling our weight. That means eating less, drinking less and exercising more.

We are also calling on the food and drink industry to play a much bigger role in reducing the population’s calorie intake by 5 billion calories a day, to help close the crucial imbalance between energy in and energy out. That will build on commitments that businesses have already made, through the public health responsibility deal, on things such as eliminating trans fats, reducing the amount of salt in food, and proper calorie labelling.

Of course, it is for each of us to make our own decisions about how we live our lives. The best and most sustainable changes come not when people are ordered about, but when they are given the tools to change, given the justification and then take responsibility to do it themselves. That is why we need to work together to make sure that the healthier choices become the easier choices. Everyone has a role to play—the food industry, the drinks industry, the many organisations that encourage physical activity and sport, employers who can support the health of their employees, and the local NHS staff in talking to people more about obesity and its consequences.

Under the new public health system, local leadership will be critical. We want to move away from the days when legislation and demands came down from Whitehall like thunderbolts from Mount Olympus. Local authorities will be supported by a ring-fenced budget and will bring together local partners, including the NHS, to provide the most effective services for their communities. We will support local people and local authorities by making sure that they have access to the best possible data and evidence.

We will not shirk our duty to provide national leadership where it is necessary—by working, for example, with business and non-governmental organisations, and making sure that Government Departments work together in supporting better health. That is already happening. The Department for Transport is providing more than half a billion pounds of funding for local authorities to increase sustainable travel such as walking and cycling. The new teaching schools programme, led by the Department for Education, will explore how schools can support and encourage children’s health and well-being. We will also continue to try to inspire people, young and old, to embrace a healthy, active lifestyle, via, for example, Change4Life. Moreover, the London Olympics, as many of my hon. Friends have mentioned, give us the golden opportunity to perpetuate that legacy after they have finished.

The new national ambitions provide a clear goal that we can all aim for. We should all play our part in raising awareness. Once again, I congratulate the hon. Member for East Londonderry on securing this debate, and I hope that he sees the benefits in our strategy. I hope that he supports it and that he will continue to be an advocate for his constituents on the matter.

NHS Care of Older People

Nick Smith Excerpts

Thursday 27th October 2011 Westminster Hall

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate the hon. Member for Stourbridge (Margot James) on securing this debate and on her thoughtful contribution. Other hon. Members have also shown great insight in their representations.

Like others, I was sickened by the reports that we received from the Care Quality Commission earlier this month about the treatment of elderly people in the NHS in England. Unfortunately, we are now receiving a catalogue of such reports. In March, the older people’s commissioner in Wales told us that the treatment of some older people in Welsh hospitals is “shamefully inadequate”. The commissioner found instances of people not being helped to the toilet, poor communication and inadequate attention to patients’ need for food and drink.

One son reported how his mother begged for water after an intravenous drip was removed. Elderly patients in a Cardiff hospital day room were given tambourines to attract nurses’ attention. Again and again, we hear stories of patients not being treated with sufficient care, dignity and respect. Having said that, I should point out that there were also many examples of good practice. My own father has received good care in the Royal Gwent and Caerphilly District Miners hospital in recent years.

Nevertheless, given the blizzard of bad news on treatment for older people, the NHS Confederation succinctly says:

“We are well aware of the problems of poor care. What is less clear is why this has not always been tackled and what needs to happen to effect change.”

People have talked about a culture of indifference or, worse, of neglect, and ask what has happened to common compassion and kindness. It will take time to turn care around, but change must come. Recommendations in the report “Dignified Care?” include four key points: empowering ward managers to run their wards in a way that enhances dignity and respect, equipping staff to support people with dementia, prioritising continence care and looking further at whether there are sufficient numbers of the right kind of staff to care properly for older people in Wales.

We must ensure that we make things better this time. It is unacceptable that hospitals and care homes can flout their legal responsibilities to patients and residents and just be told to do better.

In Wales, the older people’s commissioner has reminded health providers that she has the legal powers to effect necessary change. Those powers must be enforced, key staff must be seen to be accountable and, most of all, patients should be heard. The Minister for Health and Social Services acted swiftly to increase spot inspections in Wales and I am pleased that the Secretary of State for Health has followed that course in England.

Strong professional leadership at ward level is of the utmost importance in securing change. We need the right skills mix in our hospitals and care homes to deliver the care that elderly people want and need. The involvement and feedback of patients and relatives is crucial, but we should not have to rely on relatives and friends to provide basic care, even if it were practical.

As someone who has spent some time working in the voluntary sector, I know that it can be a sensitive and sensible provider. The WRVS has informed us about some of its voluntary services on wards, which include befriending patients and help with feeding. I understand that it is keen to expand those services, which is something that I support.

Residential care is in some flux. One of the largest UK providers, Southern Cross, has collapsed. After a year of worry and anxiety for elderly people in its homes, we must now seize the opportunity to ensure that companies in the sector have a sound business model. They must invest for the long term and deliver high quality care for our elderly.

As a member of the Public Accounts Committee, I recently talked to Department of Health officials about the future of the social care market, which has changed dramatically in the past 20 years from a local market with single owners of individual homes to consolidation of ownership. Southern Cross owned about 9% of the UK market, and 30% of that was in the north-east.

I am not saying that all individually owned homes are perfect. Operation Jasmine is an ongoing investigation in Gwent, looking at the maltreatment of elderly residents in care homes in the late 1990s and early 2000s. The investigation is also looking at some small homes. The first prosecution of an owner and a manager is expected soon.

The position of Southern Cross, which was the subject of a number of takeovers and a massive profit grab by the venture capitalists Blackstone, is perhaps summed up by the reported admission of a former executive, who said:

“It really did seem like we were in a land flowing with milk and honey.”

The money men were working on a substantial projected increase in the elderly population. This week, for example, the Office for National Statistics predicted that the current number of people over state pension age will rise from 12.2 million to 15.6 million by 2035, which is an increase of 28%. The money men thought that with a growing elderly population and the subsequent rise in local authority funding, a rosy future with a rosy profit was guaranteed. The Department of Health’s director of care services said:

“Arguably, the people who invested took this to be an infrastructure project, like toll roads, rather than a care business.”

As someone once said, “If it looks too good to be true, it usually is.”

Southern Cross ran into the buffers, as the squeeze on local authority spending saw referrals and fees go down and occupancy rates drop to unsustainable levels. Given that the budget squeeze is likely to continue for some time, the stability of the care sector is of considerable concern. Yes, it is a business, but it is one that looks after frail and vulnerable people, so low cost and low quality is not an option, nor is it right for such people to live with the constant fear that they may have to move home; some certainty must be part of the care package.

I have said before that the Department of Health was slow to act on Southern Cross. I wish I was confident that Four Seasons, which is taking over a large number of former Southern Cross homes and which has more than £1 billion in debts, has a sound business model to deliver long-term care. It is unlikely to be the only operator under pressure as all private providers are dependent on revenue income from cash-strapped public authorities. Of course, as the PAC was told, the Department of Health does not commission services; such decisions are made by local authorities. None the less, the Department of Health sets the framework for social care providers and that must be robust.

The Department is now consulting on what measures it may need to ensure the effective oversight of the social care market. I hope that we will have more comprehensive measures in place early next year. The challenge for us now is to ensure that wherever our elderly are treated or looked after or helped to look after themselves, quality is embedded in the service, and dignity and respect are accorded without question. Together with our high-tech surgery and sophisticated drugs, we must ensure that we feed patients properly and give them the time, company and comfort they need, so that they can cope with the chronic ill-health, dependency, or terminal illness that will at some point come to us all.

Ovarian Cancer

Nick Smith Excerpts

Wednesday 12th October 2011 Westminster Hall

[Nick Smith (Blaenau Gwent) (Lab)]

I, too, congratulate the hon. Member for Pudsey (Stuart Andrew) on securing today’s debate. It is good to follow hon. Members who have made powerful and reflective comments.

Like other hon. Members, I have a personal interest in the issue. My mam died from ovarian cancer when she was aged just 42, in our hometown of Tredegar in Blaenau Gwent—too, too young. My two sisters were just teenagers. I want women in my constituency and across the UK to have the best possible treatment if they have ovarian cancer today, or the earliest possible diagnosis if they get it in future.

A comprehensive report on cancer in Wales is published every three years. The latest was published just last month, and there are good stats on Wales that are important. The report covers nearly 15 years from 1995 to 2009, and, as the hon. Member for Pudsey said, it notes that ovarian cancer is the fourth most common cancer in females. We have to shout that out loudly across the UK from here today and hope that it is picked up in other places—it is a powerful statistic.

As in the rest of the UK, there has been a slight decrease in incidence over time, but of the countries studied, most of which are European, Wales is top of the incidence table. Wales has an incidence rate of 18.8 per 100,000 of population, which is significantly above the UK average. I know that Wales has a larger older population than other parts of the UK, which leads to higher levels of cancer, but the particular worry about ovarian cancer is that women seek medical help only at a relatively late stage, so the survival rate is poorer than for other gynaecological cancers. The “Cancer in Wales” report notes:

“There is no clear link with incidence and degree of deprivation”

but there

“seems to be a slight trend towards increased survival in patients with lower levels of deprivation.”

The mean age of diagnosis in Wales is 65.1.

What has particularly struck me—this has come out in today’s discussion—is that women who often take responsibility for the health care of their families, particularly children, and visit the family GP do not themselves recognise the symptoms of the cancer. In Wales, 29% of the public said that they were not at all confident, and a further 29% were not very confident, in identifying the symptoms. Together, that makes a high 58%. As others have said, only 2% were confident in recognising the symptoms. Public Health Wales is running important public education campaigns on skin, bowel and mouth cancer, but not, to my knowledge, on ovarian cancer. It is important, again as others have said, that we have a wide public health campaign on the issue.

I have long experience of working in the voluntary sector, most recently for the National Society for the Prevention of Cruelty to Children, and, before that, the Royal College of Speech and Language Therapists. I know that the sector is fertile ground for innovation. For example, I understand that some charities in the sector have developed training programmes for women and GPs, including an online symptoms tracker called Ovacome. That will be a good initiative. Such programmes are excellent and clearly show commitment to provide early diagnosis. However, like others, I ask the Minister to give assurances that the Government will look into providing a nationwide campaign to help women to identify symptoms of the cancer and build on the important work that is taking place with other charities.

I note that there are two screening trials under way—one for women in the general population, the other for women with a strong family history in this regard, such as my two sisters. I hope that the evidence from those trials will support a national screening programme. As we know, if ovarian cancer can be caught in its earliest stages, survival rates can be above 70%, which is a strong stat. We could save the lives of hundreds of women in the UK and save their families from the pain of a premature and preventable death.

Where they live also impacts on the support received by women with ovarian cancer. The Minister will be aware of the significant impact of the clinical nurse specialists and what they can do to support women with ovarian cancer, yet the 2009 Target Ovarian Cancer pathfinder study showed that many clinical nurse specialist posts were under threat, with a lack of cover for sickness and leave, and with a heavy work load. Many women cited the clinical nurse specialist as the single most helpful point of contact throughout their cancer journey, yet in large parts of the country the nurses are sole operators, as it has been phrased. Certainly in Wales, we have experienced difficulty in providing such posts. Elsewhere, I hear of posts being frozen and sometimes not filled.

Finally, while ovarian cancer is noted with respect to the lack of available and new drugs, a couple can be accessed via the cancer drugs fund, but again, where someone lives determines whether they get access. I hope that the Minister will give us the assurance that, no matter where a woman lives, she will receive early diagnosis and access to the high-quality treatment she needs. I hope that I have emphasised the importance of increased care and support for the large number of women with that terrible condition, which is often fatal, but, if caught early, survivable.

Health and Social Care (Re-committed) Bill

Nick Smith Excerpts

Wednesday 7th September 2011 Commons Chamber

[Andrew George]

I hope so, but sporting my cricketing injury I hope that that analogy does not apply.

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate the hon. Gentleman on this point and think that he should absolutely stick to his guns. In my constituency, the birthplace of the national health service, 40 people have written to me about the issue in just the past few days, so it is important that he sticks to his guns and we get the message over to the Secretary of State this evening.

[Andrew George]

I am grateful to the hon. Gentleman, but I should also say that the Minister acknowledged in his opening remarks that there was an issue that needed further work and clarification. I entirely welcomed that statement and will be happy to be involved in any discussions that might advance the point. However, in spite of the discussions and debates so far, the issue remains unresolved. It might be resolved in another place, but until then it is important to make the totemic point that the matter is of such significant concern that it is worth our while pressing the matter further.

Health and Social Care (Re-committed) Bill

Nick Smith Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Lansley]

I am not sure that the hon. Gentleman has followed this closely enough. We do not do any of those things. We are very clear that, through the Bill, we are creating, in Monitor, a health sector-specific regulator that will be able to exercise competition powers in a way that is entirely sensitive to the duties that it has for sustaining high-quality NHS services. As I will explain later, there will be a role for the OFT. Indeed, it has a role now. Labour Members should know that the application of competition law inside the NHS at the moment is exactly the same as it will be after the Bill. However, instead of it being done through the OFT as principal competition authority, it will—with the exception of mergers, which I will talk about later—be done through the concurrent powers of Monitor. The NHS Future Forum helpfully discussed these matters at length with people throughout the country, and concluded that it would be in the interests of the NHS for the legislation to create concurrent competition jurisdiction for Monitor, thereby ensuring that the application of competition rules—which is not changed in its extent by this legislation—is achieved in a health-specific context.

[Nick Smith (Blaenau Gwent) (Lab)]

Why will Monitor have no duty to promote collaboration, as recommended by the Future Forum?

[Mr Lansley]

I am sure that the hon. Gentleman will want to look at clause 20, which is very clear about Monitor’s responsibilities. I am sorry—it is not clause 20; I will find it later. Monitor’s duties are very clear, and they include support for the integration of services and for the continuous improvement of quality of services. Across the NHS there is existing legislation making it clear that there is a responsibility for collaboration. As we have made clear in response to the NHS Future Forum’s report on the listening exercise, we are taking an evolutionary approach. The competition and co-operation panel was established under the Labour Government in January 2009. At that time, the panel made it absolutely clear that there should be a health basis for the implementation of competition and procurement rules in the NHS. That panel is now to be incorporated as part of Monitor. As its name implies, it examines both competition and collaboration. Monitor, like other bodies, has a duty to promote the integration of services.

Now, as I said, we have introduced safeguards against privatisation. This Bill, for the first time, stops the Secretary of State—and, indeed, Monitor or the NHS commissioning board—from trying deliberately to increase the market share of a particular type of provider. If the previous Labour Government had put such a requirement in law when they were office, hundreds of millions of pounds would not have been paid to independent sector treatment centres to carry out operations that were not required and never took place. If the Opposition had their way this afternoon, the safeguards that we intend to put in place would not be available.

Southern Cross Care Homes

Nick Smith Excerpts

Tuesday 12th July 2011 Commons Chamber

[Paul Burstow]

My hon. Friend is right to bring to my attention, and that of the House, the concerns of his constituents. I certainly hope that the statement I was able to make today is of some reassurance, along with the commitment I made to continue to keep both the House and individual hon. Members informed as this matter goes forward.

[Nick Smith (Blaenau Gwent) (Lab)]

This is the second time this month that this Minister has been dragged to the Dispatch Box to answer urgent questions about Southern Cross. The Government need to get a grip. May we have a ministerial taskforce from across Government to manage and monitor the transfer of homes to landlords? We need to ensure stability and give peace of mind to Southern Cross residents and their relatives.

[Paul Burstow]

I note that the hon. Gentleman seems to be a bit like a stuck record, repeating the point that he made last time. The reality is that the Government are taking the necessary steps, are exercising their responsibilities correctly and are making others responsible and accountable for discharging their legal responsibilities as well. What the hon. Gentleman left out from his question was any suggestion of what specific powers his Government put in place that would have allowed us to deal with this issue. There are no such powers.

Southern Cross Healthcare

Nick Smith Excerpts

Thursday 16th June 2011 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

(Urgent Question): To ask the Secretary of State for Health what action the Government are taking in respect of the crisis in Southern Cross.

[The Minister of State, Department of Health (Paul Burstow)]

The Government have made it very clear that the welfare of residents living in Southern Cross homes is paramount. We appreciate that recent events and media speculation have caused concern to residents in Southern Cross care homes, to their relatives and families and to staff. I very much regret that.

I should like to reassure everyone that no one will find themselves homeless or without care. The Government will not stand by and let that happen. Department of Health officials have been in frequent contact with Southern Cross’s senior management over the past three months, and that will continue. We are engaged with the company, the landlords and the lenders, and we are monitoring the situation closely.

The Government are acting to ensure that all parties involved are working towards a swift resolution with a comprehensive plan for the future, which must have the welfare of residents at its heart. It is for Southern Cross, its landlords and those with an interest in the business to put in place a plan that stabilises the business and ensures operational continuity of the care homes. That work is happening, and we must let it continue.

Let me be clear: this is a commercial sector problem, and we look to the commercial sector to solve it. All the business interests involved fully understand their responsibilities, but the Government also have a role to play. That is why we are working closely with the Association of Directors of Adult Social Services, the Local Government Association, local authorities and the Care Quality Commission to ensure that robust local arrangements are in place to address the consequences in the event that the company’s restructuring plan failed to put in place a business that was on a stable footing.

Yesterday, a meeting took place between Southern Cross, lenders and landlords in a committee. They agreed to work together to deliver a consensual solution to the company’s current financial problems over the next four months. They also made it clear that continuity and quality of care for all 31,000 residents will be maintained and that every resident will be looked after. That is a welcome development and the Government are encouraged by that positive agreement by the main stakeholders.

The exact details of the restructuring plan over the next four months will be set out over the next few days and the following weeks. The joint statement issued yesterday by the company, the landlords and the lenders provides further reassurance that the continuity of care of the residents is at the centre of this consensual restructuring. The Government will continue to keep close contact with all involved in the process, and I will continue to keep the House informed.

[Nick Smith]

I thank the Minister for his statement. In recent months, we have seen a drip, drip, drip of negative news stories about the financial stability of Southern Cross. After yesterday’s meeting with the 80 different landlords, the company’s future is still very uncertain. However, residents of Southern Cross, their relatives and the directors of social services will need further information—sooner rather than later—on what comes next for the company.

Residents and their relatives need peace of mind, and they need it now. The company appears to be hanging by a thread; the numbers speak for themselves. It has reported half-yearly losses of £311 million and its share price has dropped by 97% since 2006. Forty thousand staff work for the organisation, but 3,000 redundancies have been announced. There are 31,000 residents in 750 care homes; this is a UK problem, with 400 constituencies affected in Wales, Scotland, Northern Ireland and England.

The Government have been too slow to get a grip on the situation. The issue has been live since last December, but Age Concern says that the Government have allowed it to reach this crisis point. Questions that need answering include the following. Newspaper reports say that Southern Cross owes Her Majesty’s Revenue and Customs £20 million. Will the Government allow the company to be dragged down by that £20 million debt? What banks are owed money by Southern Cross? How much is owed and what actions will the banks be taking? How are the Government working with the company’s landlords—particularly NHP Ltd, whose parent company is hidden in a fog of complex overseas equity holdings? What are the Government doing to ensure financial probity in this crucial sector? We need to stop the get-rich-quick merchants preying on our elderly relatives.

Who will lead on this issue at the very highest level? This is a cross-Government matter that needs health, business and regulatory intervention. We need reassurance that residents will be safe in their homes, that continuing care will be of the highest standard and that, in the coming months, the Government will focus on ensuring stable financial governance for companies that care for our old and our vulnerable.

[Paul Burstow]

The hon. Gentleman asks a number of questions, some of which are for Ministers and others of which are for the landlords. He asked about NHP Ltd, and he is right to identify the fact that it is the largest landlord. He also asked about bank lending; obviously, the lenders have a key part to play in a solvent restructuring of the business, and that is why they were at the meeting yesterday. He mentioned HMRC, which, as an autonomous Government body responsible for making these decisions, is considering those matters at the moment.

The hon. Gentleman asks about the financial problems and the seeds of the problems. I urge him, in looking at the history of this, to look back several years to the restructuring of the company and the business model that was established and that caused the problem, and to ask himself who were in government at that time.