Future of the NHS

Owen Smith Excerpts

Monday 9th May 2011 Commons Chamber

[John Pugh]

I have a different explanation, which is that both interpretations can be sustained by a reading of the Bill. It is a kind of Jekyll-and-Hyde thing. I have a vision of the Bill being drafted during the day by a sane, pragmatic Dr Jekyll-like Minister, but during the night some rabid-eyed Mr Hyde with right-wing ideology breaks into Richmond House and changes many of the sentences. That is the only way I can explain the fact that the explanatory notes to the Bill provided in Committee explained very little.

The House might know that I am a long-term critic of the Bill and the White Paper before it. At the annual Liberal Democrat conference in October, I and the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow) went around with a double act on the Bill—him for, me against. This is not, therefore, as the hon. Member for Easington (Grahame M. Morris) might think, a hissy fit following poor election results. Like nearly everyone in the House, I do not disagree with the Bill’s objectives: more clinical involvement, less bureaucracy and more local accountability. Like everyone else, I am concerned not about its objectives, but about its likely effects. I have met no one who takes issue with the Bill’s avowed intentions, but I have met many who dread its consequences.

According to one reading of the Bill—the Mr Hyde version—the eventual outcome of the Bill will be that the NHS opts out of direct health provision and becomes simply a funding body; NHS hospitals, services and clinics become indistinguishable from private ones; everyone competes on business terms for a slice of whatever funds the Government have allocated for health purposes; and what health care a person gets depends on what can be purchased on their behalf in a largely unconstrained, privately run health market. That is a perfectly consistent view of how a health service can be run, but in our country any party that advocates it commits political suicide. Furthermore, of course, it is likely to accentuate health inequalities and overall costs.

The question for us is this: what will prevent such a situation from arising out of a Bill that appoints a competition regulator along the lines of Ofgem to promote competition, that blurs many of the lines between private and public provision, and which removes the Government’s duty to provide a comprehensive health service? Hence the importance of today’s debate, which, knockabout apart, is crucial to the wider debate on the Bill. To be alarmed by the prospect I have set out is not to oppose competition in principle. The previous Government set up competition and collaboration panels to encourage a degree of challenge in the system. In fact, if hon. Members look at their record, they will see that they were knee-deep in competition initiatives. Neither is holding these concerns to be alarmed by the presence of private business in delivering NHS services. There is not a person here who has not used a private optician or a private pharmacist when they need it. There is a long tradition of involvement by the private sector in the NHS.

Rather, to be concerned about the proposals is to be alarmed by the fear of an unconstrained, uncontrolled market in health—this is a point that has been made previously—partly because it can lead to fragmentation, potential conflicts of interest, profiteering and so on, but mainly because identifying competition as the main engine of improvement in health care ignores the simply enormous gains in service quality, cost reduction, efficiency and patient experience that can be gained through co-operation, collaboration and integration of services.

The NHS is built on the principle of co-operation, in which we, the hale and hearty, make a moral compact to support the lame and the sick. To make commercial competition the main driver of improvement in the NHS, even if it is not competition on price, would be a serious mistake. It would be to subscribe to a perverse and misguided form of social Darwinism. Competition is a mechanism; it is not an end in itself. The role of competition in the NHS, as seen by the Government, is the real issue. The problem is made a lot worse by the hopeless lack of clarity over how European competition law will apply. We struggled with that issue in Committee. We did not resolve it, and I do not think that we will do so.

[Owen Smith (Pontypridd) (Lab)]

Does the hon. Gentleman share my concern that in today’s debate, as in the long period we spent together in the Bill Committee, the Government have failed to clarify how competition law will apply? Indeed, they have sought repeatedly to imply that it will not bite any harder on the NHS. Does not that verge on disingenuousness from the Government, if not downright dissembling?

[John Pugh]

I think that that is a bit unkind to the Government. I have been to the Library and borrowed some very big books on EU competition law, and the main conclusion that I have drawn is that the law is not at all clear when it comes to the provision of public services. But that adds to the risks created by the legislation, and gives rise to the awful thought that the fate of our local services, about which we all care, could be decided not by the NHS, not by the Government and not by the public but by case law—European case law, at that—and in the courts.

If we subject clinical services to the same regime to which we have subjected non-clinical services, we will not get the innovative social enterprises strengthening existing provision that people would like to see; we will get large companies financed by private equity muscling in and challenging tendering processes, backed up by legal teams and looking for every weak link or failure to comply with EU regulations. Indeed, that is already happening with non-clinical services.

That is why there is a problem, and it is why private equity is licking its lips. We cannot additionally expect the private sector to come into this game to bid for the unprofitable, high-risk, complex work and not cherry-pick. That is not what businesses do. Good businesses pick cherries, because they need to make a profit. To suggest, as Clare Gerada of the Royal College of General Practitioners has done today, that there is not a problem of untrammelled competition in the legislation is entirely to miss the point. We are not anti-private sector, and we are not anti-competition; we want to see a level of robust pragmatism supported by those with a lifetime’s experience of running health services, and a recognition that good health care is essentially a collaborative exercise. If we cannot get that recognition and the acceptance of the professional bodies for what is embodied in the Bill, everything we say here and every amendment that we make will be utterly pointless.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

I am delighted to follow the hon. Member for St Ives (Andrew George) and to hear him say that, were this a Third Reading debate and the Bill had remained as it is, he would vote against it. He should not hold his breath, because we have not heard any indication from those on the Treasury Bench that they propose to listen to the reasoned and substantive opposition that we heard in the Public Bill Committee, of which I was a member and where the Government rejected all 250 to 300 suggested amendments, or to that in the rest of the country, where doctors and all the medical professions are united in opposing the Bill.

Earlier, those of us on the Opposition Benches were admonished for the sound and fury coming from us. Mr Speaker was right to admonish us for shouting, but that sound and fury is not born of cynicism; it comes from three things. The first is our outrage at how the history of what the Labour Government did in office is being rewritten and at the suggestion that this Bill represents an evolution of what we did with the NHS. It is not an evolution, but a revolution.

The second is the shameless way in which the Government are misrepresenting that which sits at the heart of the Bill. They present it as trying to bring about patient focus and GP-led improvements to the NHS, but in truth it is about competition and the Government’s belief that competition in health care, like in telecoms or the energy market, is the best way to drive improvements in the efficient allocation of resources, allowing consumer-driven demand to drive efficiency. We fundamentally contest that. We do not think that it is true in many aspects of life, but it is certainly not true in the NHS, a body built on collectivism, co-operation and integration. Those fundamental ethics—the ethos of the NHS—will be undermined by the Bill.

Thirdly, the Bill is a completely unnecessary intervention. We did not need a top-down reorganisation of the NHS, because we got record patient satisfaction and increased productivity in all the ways that matter, as described earlier by my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson). Crucially, we have a far more efficient and better-resourced system than previously. That prompts the question of why the Government are pursuing this change. They are doing so because they fundamentally believe that the way to drive the NHS forward is an unfettered market and greater deregulation.

That brings me to my substantive point. I want to rebut the notion which we have heard repeatedly from the Government that competition will not bite harder on the NHS as a result of the changes. The Government have told us repeatedly that nothing in the Bill says that competition will impact on the NHS to any great extent. As we all know, however, in 100 of the 300 clauses Monitor is established as an Office of Fair Trading-style competition overlord for the NHS, because as soon as the NHS is opened up to multiple entrants in the market and there are multiple providers of health care services in this country, we will no longer be able to argue that it is a state service that ought to be protected and therefore should not be subject to the vagaries of the market and EU competition law. As soon as we allow multiple health providers into the market, we will have to apply EU competition law, and European case law and arguments between lawyers will inevitably lead to the progressive fragmentation of the NHS.

There is one other point with which I want to take issue. Privatisation is a pretty difficult word to bandy about in politics, but I do not shy away from using it in this debate. We are going to see a progressive and creeping privatisation of the NHS. To argue about marketisation and privatisation is to argue about semantics. We will increasingly see many more aspects of the NHS either in the hands of or being delivered through the private sector. Earlier, the Secretary of State asked us to point out where in the Bill it showed that there would be an increased number of private providers in the NHS. My challenge to the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), who is now back in his place, is to point out to me where in the Bill it says that we will not see more private providers entering the marketplace. The Bill provides for that to happen and what will arise from that is the break-up, fragmentation and, eventually, privatisation of the NHS. Those on the Government Front Bench know that—

[Madam Deputy Speaker]

Order.