The safeguard structure will be stronger, because commissioners must ensure, for example, that they meet their duty of continuous improvement of quality, their duty of safety and their duty of integration of services and other duties, including a duty to promote patient choice—but of course they have to balance those duties. Whether they extend “any qualified provider” is a matter of judgment. If they took the view that the extension of patient choice would be inimical to the integration of services and the improvement of quality, they would not go ahead with it. The hon. Gentleman and his

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colleagues should recall that they have put in an NHS constitutional right for patients to exercise choice, so if the commissioners think it is possible to promote choice and improve quality by extending the any qualified provider remit, they can do it, but the Bill is not what enables it. It is therefore curious that the Bill should be attacked on that basis.

Toby Perkins: I am grateful to the right hon. Gentleman for giving way a second time. That was a very long answer to a short question, but I understand the Secretary of State to be saying that the BMA is wrong and the Labour party is wrong. Everyone I meet in the health service tells me that it is the Secretary of State who has got it wrong. He has come back here once again, confirming that he is not listening to what people are saying to him. He thinks the BMA is misleading people, but is it possible that he is the one who has got it wrong?

Mr Lansley: I will give the hon. Gentleman a shorter answer this time: he does not talk to enough people in the NHS.

Let me return to the important point that I was about to make. I was saying that criticism of the Bill has typically developed to the point of literally misrepresenting the facts in order to attack the Bill, as was the case with 38 Degrees. I am indebted to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for sharing with me a letter that he prepared for the better information of his constituents. He looked at the legal opinion obtained by 38 Degrees and concluded that it did not support the views that those behind the 38 Degrees website evidently wished it did.

For example, 38 Degrees claims that the Bill removes the Secretary of State’s duty to provide a comprehensive health service. However, its own legal advice makes it clear that the Secretary of State has never had a duty to provide a comprehensive health service—only a duty to “promote” a comprehensive health service, which is exactly reproduced in clause 1.

Clause 1 also makes it clear that the Secretary of State must secure the provision of that service. The “duty to provide” certain services to which 38 Degrees refers is a duty that I, as Secretary of State, currently delegate to primary care trusts. In future, the Bill will—in exactly the same way—pass that duty of the Secretary of State to the NHS commissioning board and to clinical commissioning groups. In other words, the situation will be legally unchanged. The Secretary of State has a duty, and discharges it through organisations to which he or she delegates that power. Strictly speaking, they have more direct statutory duties, but the duty to provide will not change.

38 Degrees also claims that the Bill opens up the NHS to competition law, but its own legal advice—which it obviously did not like—made it clear that there would be no change between the present competition regime and that which would operate if and when the Bill became law.

I am very grateful to my hon. and learned Friend, whose forensic analysis accords with our own view. The provision, under the Bill, of a comprehensive NHS is watertight, and it is equally clear that the Bill does not change the extent of the application of competition law

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and EU procurement rules. The 38 Degrees campaign should be seen for the distorting and misleading political propaganda that it is.

Andrew George (St Ives) (LD): I entirely endorse the Secretary of State’s point about the biased way in which the last Government advanced the private sector, but may I make a point about the changes that have resulted from the listening exercise? The Secretary of State has sought to reassure the House about Monitor’s role of integration and promoting collaboration. Would he be prepared to respond to, and perhaps even accept, amendments that I have tabled—for example, amendment 1226—which propose, I think reasonably and in a balanced way, that promoting the importance and the role of integration should be among the principal duties?

Mr Lansley: As we said in our response to the recommendations of the NHS Future Forum, we recognise the importance of integrating health and social care services—while concentrating on the needs of patients and their families—to the achievement of our aims. However, I do not believe that we would further those aims by changing Monitor’s name, as amendment 1225 suggests. Although I agree with the aims of my hon. Friend the Member for St Ives (Andrew George), we have an alternative approach.

Rather than making it explicit that the Secretary of State could impose requirements on commissioners in key areas through regulations, as my hon. Friend suggests in amendment 1209, the Bill proposes that commissioners should have clear statutory duties to reduce inequalities between patients, in relation to both access and outcomes. That is covered in clauses 20 and 23. Commissioners would also have to promote integration of services in carrying out those duties. That is covered in clause 20, which inserts new section 13M of the National Health Service Act 2006, and in clause 23, which inserts new section 14Y. Those clauses refer respectively to the NHS commissioning board and to clinical commissioning groups.

The Bill would also establish clear duties for Monitor to allow the integration of health care services and the integration of health care with other relevant services, including social care. We have already amended the Bill to make it clear that Monitor should not promote competition for competition’s sake: this is all about quality. However, integration can only ever be a means to that end, not an end in itself. Integration, like competition, is designed to secure continuous improvement in the quality of services and a reduction in inequalities, as clauses 20 and 23 make clear.

Although I understand the point that my hon. Friend is making, I ask him to not to press amendments 1225 to 1228 when we reach the appropriate moment.

Frank Dobson (Holborn and St Pancras) (Lab): The Secretary of State has pleaded the legal view of one of his Back Benchers in rebutting the case made by others about the impact of the changes in his duties. Will he tell us what advice he received from the Department’s lawyers or the Law Officers of the Crown?

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Mr Lansley: It is not the practice of Ministers to publish their internal legal advice, but what I will say to the right hon. Gentleman is very straightforward, because I have said it time and again: our legal advice clearly sets out the duty of the Secretary of State to promote a comprehensive health service and to secure the provision of a comprehensive health service, and that is also clearly set out in the Bill and our amendments to it. We are clear, too, that the Bill does not change the extent of the application of competition law and EU public procurement rules. I have taken the liberty of referring to the comments of my hon. and learned Friend the Member for Sleaford and North Hykeham on the basis that they entirely agree with the legal advice on which we have based our view.

Several hon. Members rose

Mr Lansley: I had better give way to the hon. Member for Pontypridd (Owen Smith) first, as no Opposition Front-Bench has previously intervened.

Owen Smith (Pontypridd) (Lab): Is it not disingenuous of the Secretary of State to keep repeating that the application of competition law is not expanded or changed by the Bill? We know that the change in the architecture of the NHS—the use of competition law, the writing of competition law into the architecture of the NHS, and the entry of lots of other providers into a genuine marketplace—will lead to competition law increasingly being used by people who wish to provide NHS services, breaking up the NHS. Labour Members have repeatedly stated that, and it has been confirmed by independent legal advice. That is our point. It is straightforwardly the case, and I suggest that it is disingenuous to say competition law does not apply.

Mr Lansley: I did not say that competition law does not apply; if the hon. Gentleman is going to attack me, he might at least get what I said right. I said that the Bill does not change the extent of the application of competition law. The House should know that the debate about the extent to which competition law, and in particular EU competition law, is applicable within the NHS is a matter of debate among lawyers. That is because it has not been tested in courts, but it was always going to be tested in courts and it is much more likely to be tested in them if we do not pass this measure, which not only gives Monitor a responsibility to be the concurrent competition jurisdiction, but, through its licensing powers, allows it to take ex-ante steps. The hon. Gentleman therefore misses the point; the point is that by introducing the private sector into the NHS before the last election, his party’s Government inevitably extended the application of EU competition law in respect of NHS providers—not NHS commissioners, I might add. To that extent, he has therefore missed the point. EU procurement rules have applied, and continue to apply. We cannot change that.

Several hon. Members rose

Mr Lansley: I will not give way again, or Mr Deputy Speaker will chide me for not addressing the substance of the amendments.

During the listening exercise, we heard concerns about how we would secure continued access to NHS services in the event that a provider fails clinically or financially.

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We promised then to strengthen our proposals and bring back changes at the next possible parliamentary stage, and we have done that.

What should happen in the NHS when things go wrong has long been the subject of debate in this House, often without satisfactory resolution. Those of us who were in the House when my predecessor stood at this Dispatch Box and said that what happened at Maidstone and Tunbridge Wells was the responsibility of local managers, and that what happened at Mid Staffs was all a local issue, will recall how difficult it was then, and over the recent past, to know what the Secretary of State’s accountability for the NHS actually meant.

In 2003 the Labour Government said that they would put in place a legislative framework for dealing with the failures of foundation trusts. They then failed to do that. The Health Act 2009 regime was contradictory in respect of interventions, but in response to failure it simply enabled foundation trusts to be de-authorised, thereby undermining the integrity of foundation trust status and demonstrating a lack of confidence in foundation trust regulation. Evidence does not support that lack of confidence, however. Monitor has generally handled financial stability more effectively in foundation trusts than strategic health authorities have done in NHS trusts. Putting these measures clearly into legislation is necessary not because providers are more likely to fail—on the contrary, we are putting in place measures that make it less likely that they will fail—but because, as when writing a contract, in writing legislation one must be clear about what happens when things go wrong.

4.45 pm

Our plans are comprehensive and detailed, and there are a considerable number of amendments. So that the House can see and understand the detail, I published last week a document setting out the Government’s approach, as well as detailed briefing notes explaining the effect of each of the amendments. We have revised our plans for ensuring continuity of services with three principles in mind. The first is to protect patients’ interests and improve outcomes; patients must be able to get the high-quality services they need. The second is to maintain local decision making and enhance democratic legitimacy; local authorities would have scrutiny of proposed service changes. The third is to deliver value for money. I am confident these revised proposals will deliver on those principles.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Did not the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) say in Committee that under the relevant clause,

“the OFT could make a reference to the Competition Commission to review foundation trust mergers to test whether they gave rise to a substantial lessening of competition”––[Official Report, Health and Social Care Public Bill Committee, 17 March 2011; c.885.]?

Does that not undermine the democratic element that the Secretary of State has just tried to explain?

Mr Lansley: I said that I would come on to the continuing role of the OFT in relation to mergers, and I will.

Returning to this substantial group of Government new clauses and amendments, the purpose of which is to set out the regime for the continuity of services, our

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new proposals focus on five particular changes. Together, the proposed changes significantly improve upon the existing situation. First, the Bill puts clinically led commissioning at the heart of securing high-quality services for local populations. It is therefore right that commissioners should have a leading role when continuing access to services is threatened. Our amendments therefore strengthen the role of commissioners. For the first time, commissioners will have an explicit role in working with Monitor to agree plans to secure continuity of services.

There will also be an oversight role for the NHS commissioning board. Where issues involve more than one clinical commissioning group, it will be the board’s role to co-ordinate agreement so that a joint plan is agreed. Secondly, commissioners will need to be supported in acting with providers to ensure that they have access to the scope, quality and choice of services they need. It is about promoting high-quality, effective and integrated services, as set out in clause 58. This will be the task of Monitor.

If need be, when continued access to services is threatened because of failure occurring in a particular provider, Monitor will have a range of actions it can take. For example, it could take action to secure sustainability of essential services by adjusting prices. This would be necessary where a provider is otherwise unable to cover the costs of essential services—for example, because of lower patient volumes in more remote areas of the country. That was included in the Bill from the outset, and our amendments strengthen the provisions by ensuring that Monitor must agree the methodology with the NHS commissioning board.

Rosie Cooper (West Lancashire) (Lab): Will the Secretary of State be clear on this issue? Can the enhanced tariff that I think he is suggesting Monitor can use to save a provider apply to private companies as well as the NHS?

Mr Lansley: It would apply in any circumstances where it was necessary in order to secure continued access to essential services for patients, so a methodology would be in place. As I have described, the intention is to have a regime through which, although specific mechanisms will be applied to foundation trusts and to other providers—of course, the overwhelming majority of activity is in the hands of foundation trusts—the principles of intervention will be the same between the two sets of providers. We want to arrive, wherever possible, at a consistent application of failure rules. Why? Our concern is to make sure that we deal with this, which has not been the case in the past. Under Labour’s regime, if a private sector or independent sector provider failed financially, there was no appropriate mechanism for intervention and continuity of services.

Mark Simmonds (Boston and Skegness) (Con): Will my right hon. Friend confirm that the additional funding he is describing will not be used to bail out, in the traditional way, inefficient and ineffective health providers, but will be used to ensure that services continue to be provided, particularly in rural areas, where the cost base may, necessarily, be more than it is in the metropolitan cities?

Mr Lansley: Yes, I understand that and I think that my hon. Friend makes entirely the right point. This is not about a bail-out; the commissioning board and

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Monitor will need to agree the methodology, because neither side will wish to undermine the integrity of the regulatory structure and the price structure that Monitor is responsible for, nor will the NHS commissioning board and commissioners want to pay any more for services than is necessary to secure continued access. None the less, continuing access to quality services for patients is the essential principle, and so there will be circumstances, particularly where it has become evident that in the absence of this there would be an unacceptable deterioration in or failure of services, in which it is necessary for the methodology to add to the tariff price.

Fiona Mactaggart (Slough) (Lab): The right hon. Gentleman will recall that very shortly after Monitor had approved the granting of foundation trust status to my local district general hospital, Wexham Park hospital, it ended up in very serious financial difficulty, and I was grateful to him when he arrived with a loan to ensure the continuation of service. What I am not clear about in the regime that he proposes is who will be able to provide those kinds of resources when something as important as the district general hospital’s future is at risk.

Mr Lansley: I am grateful to the hon. Lady for that. I will deal with that matter in a moment, because subsequent amendments in this group continue the capacity of the Department of Health, for example, to make a loan in those circumstances—that would not change.

Of the five principal changes that I was talking about—

Grahame M. Morris (Easington) (Lab) rose—

Mr Lansley: I have reached the third of them, so I will carry on for a moment, if I may.

Thirdly, if a provider gets into significant difficulties, we have provided Monitor with powers to be able to try to turn around the provider. The aim would always be to support the recovery of the provider, wherever this was possible. Specifically, the amendments require Monitor to maintain an ongoing assessment of risk to the continued supply of NHS services. Monitor must then intervene proactively to help a provider to address problems and, where necessary, agree contingency plans with commissioners. New clause 2 and amendments 100 to 104 achieve this.

Fourthly, we have put in place provisions to deal with the rare event of a provider no longer being sustainable in its current form. In that instance, the priority must be to secure continued access to the services patients need. This protection is particularly important in relation to foundation trusts, which of course are the principal providers of acute, emergency and specialist hospital services.

So we have put forward amendments that would build and improve on the previous Government’s regime established under the Health Act 2009. The improvements would ensure that foundation trusts do not revert to being NHS trusts and that commissioners take the lead in securing continued access to NHS services, and they would increase democratic legitimacy by allowing the Secretary of State to intervene in individual cases to

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protect patients’ interests. At the same time, we are retaining Bill provisions to allow Monitor proactively to regulate to secure continued access of NHS services delivered by companies and social enterprises, through provisions on the health special administration regime, should these providers become unsustainable. New clause 6 and amendments 107, 188 to 193, 195 to 204, 217, 218 and 371 to 372 achieve this.

Fifthly, it is essential that political accountability runs through what hon. Members will all know is central to our responsibilities to our constituents. Our plans therefore strengthen political accountability at both the local and national level. At a local level, the amendments enhance democratic legitimacy by extending local authority scrutiny to all NHS services. That is in contrast to previous proposals, where only designated services would have been subject to such scrutiny. At a national level, we will establish a process for the Secretary of State to veto proposals, in individual cases relating to unsustainable foundation trusts, if he decides that they do not secure continued access to NHS services and, as a last resort, to intervene where he believes that the NHS commissioning board or Monitor has failed to discharge its functions. This veto will ensure that the Secretary of State retains all the powers needed to retain his role—

Grahame M. Morris: Will the Secretary of State give way?

Mr Lansley: In a moment. I want to complete the five points; otherwise people might not see them in their entirety.

The veto will ensure that the Secretary of State retains the powers needed to fulfil his role in promoting a comprehensive health service. Amendments 205 to 207 and 208 to 216 achieve this.

Grahame M. Morris: Will the right hon. Gentleman clarify an issue to do with the Secretary of State’s powers to intervene in the event of failure? I am thinking in particular of the reports about freedom of information requests that appeared in The Guardian earlier in the week, which said that Department of Health officials had been in discussions with Helios about a potential transfer of between 10 and 20 NHS hospitals to the private sector. Is that a scenario in which the Secretary of State would use his powers?

Mr Lansley: I do not recognise such a scenario and in any case there will be no transfer of NHS-owned organisations and the estate and property of such to the private sector. We are not engaging in privatisation, so to that extent the question does not arise.

I must also make it clear that the implication of the proposals I have just described—

Clive Efford (Eltham) (Lab): Will the Secretary of State give way?

Mr Lansley: No.

The implication of these proposals is that we are not continuing with our previous proposals to have a system of prior designation. We are also withdrawing our proposals to apply insolvency law, including the health

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special administration procedure, to foundation trusts, so I hope that Opposition Members will not press amendments 29 and 30.

I hope that that explanation of the purpose of the substantive group of Government amendments will help the House. In a moment, I shall turn to some of the additional amendments that have been presented by other colleagues.

Owen Smith: Let me clarify a remark that the Secretary of State just made to my hon. Friend the Member for Easington (Grahame M. Morris). The Secretary of State said that there would be no instances where NHS properties might be transferred to private companies, but he will know that under schedule 23 there is provision for precisely that. Such companies are described there as a “qualifying company”. A licence holder could be a private company to which NHS material—even staff—and other liabilities might be transferred. Is that not right?

Mr Lansley: The point I am making is that we are not transferring foundation trusts or NHS trusts into the private sector. We are not planning to do that. The particular case to which the hon. Member for Easington (Grahame M. Morris) referred was misrepresented as a proposal to transfer the ownership of NHS organisations. There is no such proposal; we are not planning to do that.

As I have described, the Bill would establish a comprehensive system of regulation focused on protecting and promoting patients’ interests and applicable to all providers of NHS services. The purpose of part 3 is to protect our health services from the unrestrained operation of market forces—otherwise, why would we want this structure of regulation? That is why it is there. The provisions will ensure that services are not destabilised or undermined and will protect the public and patients’ interests.

Let us consider the implications of the Labour party’s amendment 10, which would remove part 3 of the Bill. The impact of removing part 3 would be to expose the NHS to the full force of competition law, as I described earlier, without the safeguard of a health sector regulator and without any sensitivity to the needs of patients, health services and our NHS. It should not be beyond the wit of Opposition Members to recall the impact on the health service and, in particular, on pharmacy services, when the Office of Fair Trading undertook an inquiry into the provision of pharmacy services from a competition perspective without any reference to the health perspective.

Grahame M. Morris: Will the Secretary of State give way?

Mr Lansley: No.

That is what happened in the past and it is important that it does not happen in the future. We must have a health sector-specific regulator to see the health-related aspects of such matters.

Labour’s amendment 10 would potentially expose the NHS to practices that we do not wish to see. That would include paying over the odds for private sector services, as the previous Government did when they paid £250 million extra to the independent sector for operations that were never carried out; the cherry-picking of easier operations by the private sector, which is an issue in the NHS because the previous Labour Government

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let it happen; unreformed payment by results, losing the focus on outcomes and integration; and the retention of a system of payment based on price. We are not introducing payment by results; we are reforming it. Payment by results, as implemented by the Labour party, was simply payment for price and volume, not for quality.

Amendment 10 would leave independent sector providers of NHS-funded services, which serve hundreds of thousands of patients a year, unregulated by Monitor and unprotected if the service in which they are being treated gets into financial difficulty. So Opposition Members will wish to consider whether all of those things are what they want to be voting for when they walk through the Lobby later on.

5 pm

Margot James (Stourbridge) (Con): Does my right hon. Friend think that the previous Government set up the system for private companies so that they could fail without any redress on the part of the Government precisely because the companies had such a favourable financial regime bestowed on them that they could not possibly fail?

Mr Lansley: My hon. Friend is right in relation to the independent treatment centre contracts. They were constructed in a way that effectively removed most of the financial risk from the operators. For other private sector operators in the NHS that is not necessarily true. For example, most of us would recognise that private sector providers are instrumental to continued access to many NHS diagnostic services. There are providers who could fail and at the moment no regulatory structure is in place for that.

Let us continue down the path of the implications of the removal of part 3, which the Labour party proposes. Part 3 includes clause 60. I am sure that Opposition Members are familiar with clause 60, their having served in Committee for so long. It is the means by which, if the hon. Member for Islington South and Finsbury (Emily Thornberry) recalls, we can consider the application of Monitor’s functions to adult social care. So precisely when we are legislating to be able to consider whether the implications of an issue such as that at Southern Cross are such that there should be an additional prudential regulatory regime, the Labour party would take away that opportunity.

Emily Thornberry (Islington South and Finsbury) (Lab): Does the Secretary of State agree that it is unfortunate that the Government have not had an opportunity to table detailed amendments on how they would deal with situations such as Southern Cross? To table an amendment that simply says, “At some stage in the future, the Government may be able to do something about a failing organisation such as Southern Cross”, is not necessarily adequate. Although there will be a White Paper on social care next spring, we understand that there are unlikely to be any further details until that point.

Mr Lansley: I am confused. I understood that the hon. Lady was a member of the Bill Committees. [Hon. Members: “She was.”] She does not seem to have learned what is going on in the Bill. Clause 60 was not an amendment; it was in the Bill from the outset. It was not introduced as a result of what happened at Southern

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Cross. We had anticipated the need to address the extent to which Monitor’s functions in relation to the health sector—

Emily Thornberry: Will the Secretary of State give way?

Mr Lansley: No. I will answer her question. The functions that it exercises in relation to health care include assessing viability and taking action if access to services or the interests of patients or care users are threatened. The Government can consider that by virtue of clause 60. It was not an amendment. So the idea that the measure could not be scrutinised is absurd. It has been in the Bill through all the 100 hours in Committee. If the hon. Lady never said anything about it, that is her own fault and as the shadow care services Minister she should have been more on the ball.

Emily Thornberry: Will the Secretary of State give way?

Mr Lansley: No. She can sit down.

Let me come to the other Opposition amendments. Amendment 10 would delete all of part 3, which would be absurd. Some of the other Opposition amendments are equally absurd. Amendment 28 envisages that part 3 would remain in place, but that Monitor would license providers of NHS services. However, it then takes away any means of enforcement. Perhaps the Labour party has forgotten that in government if you create obligations it is rather helpful to create a means by which they can be enforced.

Opposition amendment 44 would take the Bill down a slippery slope by trying to prescribe the range of factors that Monitor should reflect in setting prices for NHS services. Such a list could never be exhaustive and would inevitably suggest that some factors were more important than others. It would undermine our ability to hold Monitor to account for setting prices that promote patients’ interests. We must focus Monitor on its duties to promote the quality, efficiency and effectiveness of NHS services, not on trying to prescribe in legislation how it goes about it.

Labour Members have tabled amendments to part 4 that indicate that they either do not understand the Bill, or have abandoned their previous, repeated commitment to supporting all NHS trusts in becoming foundation trusts. They gave that commitment back in 2003, when they passed the necessary legislation, and repeated it in about 2006, when they said that trusts should all be foundation trusts by 2008. The Labour party manifesto from last year—2010—said:

“All hospitals will become Foundation Trusts, with successful FTs given the support and incentives to take over those that are under performing”.

Compare our programme for such hospitals as those in Trafford and Carlisle. The manifesto continued:

“Failing hospitals will have their management replaced. Foundation Trusts will be given the freedom”—

additional freedoms—

“to expand their provision into primary and community care, and to increase their private services”.

We will debate that later today, but I should complete the quote, or I might be accused of being selective:

“where these are consistent with NHS values, and provided they generate surpluses that are invested directly into the NHS.”

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That is exactly what we are proposing.

The Labour party appears utterly confused. Does it support foundation trusts or not? The NHS Future Forum said that all NHS trusts should continue to work towards achieving FT status by 2014. It was right: achieving FT status is about demonstrating clinical and financial stability, and we think that all NHS providers should be expected to do that, in the interests of NHS patients and staff. If we maintained the NHS trust legislative model in statute, we would risk losing the change in mindset and the momentum that is being demonstrated by prospective foundation trusts.

Our consequential amendments 219, 220 and 367 to 370 will simply remove references to NHS trusts when they no longer exist—and not, of course, until then. For the hon. Member for Pontypridd, I add that our amendments 185 to 188 make it clear that—sadly for those in Wales—a foundation trust cannot merge with or acquire a Welsh NHS trust.

The Opposition want to take the retrograde step of de-authorising foundation trusts, retaining NHS trusts under the Secretary of State’s direct control, and having them dependent on the layers of bureaucracy that go with that. There would be all the regulatory requirements for foundation trusts and independent providers, and all the bureaucracy that has accompanied NHS trusts and strategic health authorities. That would undermine the FT regulatory regime and the objective of all NHS trusts becoming FTs. Opposition Members who voted in favour of the original legislation establishing foundation trusts in 2003 can have no credibility in supporting Labour now, because the very purpose of that legislation was to give hospitals greater autonomy.

Other Opposition amendments would simply result in duplication and reduced coherence in the Bill. For example, amendments 1166 and 19 seek to retain controls on goods and services, and borrowing and property, but that would duplicate Monitor’s powers through the licensing regime. Deleting clause 166, as the Opposition propose would undermine our intention of increasing transparency in the public financing of foundation trusts. I am looking for the hon. Member for Slough (Fiona Mactaggart); this would have been her moment. Through our amendments, we can show how we can maintain support for FTs, if necessary, in a transparent fashion, including through a requirement, which the Labour party apparently wants to delete, on the Secretary of State to publish an annual report showing what form of financial support has been given to foundation trusts.

I turn to the amendments tabled by my Liberal Democrat friends below the Gangway, who expressed their intention of improving NHS services and ensuring sustainable access for patients. We all share those aims, but I believe that we have in place alternative approaches to meeting those aims. The hon. Member for St Ives tabled a series of amendments emphasising the need to secure sustainability in the provision of NHS services. Securing sustainable access to meet patients’ needs is fundamental to good commissioning. We would expect the board to ensure that there was sufficient competency over issues when it authorised clinical commissioning groups to take on their new responsibilities, and when holding them to account for doing that job.

As the Government have said many times, our focus is on outcomes, including ensuring that patients have access to the services that they need when they need

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them. That the outcomes must be sustainable is obviously implied, but that is not necessarily the same as saying that commissioners must ensure the sustainability of particular providers or particular services, as amendments 1205 and 1209 suggest when referring to the sustainability of “existing NHS services”. In some cases it will not be in the interests of patients to maintain the status quo—for example, where those services may be unable to improve in line with new standards of clinical best practice, or where there is clear evidence that centralising specialist services on fewer sites would improve health outcomes, as we have seen in examples relating to cardiac, stroke and trauma services. So although I agree with the intention behind these amendments regarding the role of commissioners, I must urge the hon. Member for St Ives not to press them.

I addressed earlier the hon. Gentleman’s amendments about integration and collaboration. On integration, we agree with the conclusion of the NHS Future Forum that integrating services around the needs of patients and giving patients greater choice over who provides those services are not mutually exclusive. As the NHS Future Forum made clear, this is a false dichotomy. As the NHS Future Forum’s report stated:

“If commissioners want to commission integrated care they will only succeed in doing this by creating a new market in integrated care services and stopping the current commissioning of episodic services from different NHS organisations.”

As the hon. Member for St Ives will recognise, his amendments 1207 and 1208 are based upon that dichotomy, so I ask him to withdraw them.

Andrew George: Will the Secretary of State give way?

Mr Lansley: No. I do not want to intrude on the time of other Members.

Amendments 1219 and 1220 tabled by my hon. Friend the Member for Southport (John Pugh) would apply the Enterprise Act 2002 to mergers of the activities of foundation trusts with businesses, but would exclude from these arrangements mergers between foundation trusts. I have given careful thought to this proposal, but I am not convinced that it would address two of the problems of the existing regime.

There is currently legal uncertainty as to when and where the 2002 Act would apply to mergers of foundation trusts. As a result, under the current arrangements for the review of mergers involving foundation trusts by the Co-operation and Competition Panel, there is always a potential risk of duplication—or worse still, double jeopardy. The risk arising from a separate regime for foundation trusts would be increased where a trust’s activities extended beyond Monitor’s remit—for example, where a foundation trust provided social care or supplied goods. Consolidating oversight of foundation trust mergers under the Enterprise Act, as proposed by the Bill, would avoid the risk of double jeopardy and eliminate the uncertainty of the current approach.

Mergers are a specialist area. Hence, we think it is right to maintain existing responsibilities and expertise within the Office of Fair Trading and the Competition Commission, rather than resource a further body to consider potential mergers in health care. It may reassure my hon. Friend if I say that the OFT and the Competition Commission would consult Monitor to ensure that they had a full understanding of the health care issues involved.

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Tom Blenkinsop: Will the Secretary of State give way?

Mr Lansley: No.

The OFT and the Competition Commission would obtain Monitor’s view on how a proposed merger would affect competition in the sector and whether it would bring benefits for patients. These views would then be considered, along with other evidence. However, the OFT would have discretion not to refer, where patient benefits outweighed any adverse impacts on competition—further illustration of the fact that competition law is not about promoting competition as an end in itself.

In conclusion—

Fiona O'Donnell (East Lothian) (Lab): Will the Secretary of State give way?

Mr Lansley: No.

I return to the choice offered in this group of amendments between the Government and Opposition Members. The Government are putting forward a range of amendments to protect patients’ interests and to safeguard them when providers run into difficulties and access to services is threatened. The amendments show that the Government have listened and improved the Bill. These amendments are on top of the changes made at earlier stages to strengthen the safeguards and protections offered by Monitor as a new provider regulator.

The Opposition simply want to delete the whole of that part—delete the safeguards to stop price competition, delete the means to stop cherry-picking, delete the means to enable NHS providers to work on a level playing field. The Government’s new clauses and amendments move us forward with the right safeguards in place. Labour would take us back. I urge the House to support the Government new clauses and amendments in this group—specifically, new clauses 2 and 6 and amendments 90 to 107, 113 to 220, and 366 to 372.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): The Secretary of State has insisted that the amended Health and Social Care Bill shows that the Government are listening, but despite their reassurances there are many reasons why the Bill remains a threat to the future of the NHS. Central to the reforms is the proposal to increase competition across the NHS by opening it up to providers, particularly those from the private sector. The Government claim that increasing competition drives down costs and improves quality, but overwhelming international evidence suggests that this simply is not the case in health care.

5.15 pm

Chris Skidmore (Kingswood) (Con): Is the hon. Lady placing on the record her party’s opposition to any form of competition in the NHS?

Debbie Abrahams: As we have shown, we are not opposed to private sector involvement in the UK’s health system. What is important is that it should add value and capacity. The Government’s proposals are a completely different ball game.

Mark Simmonds: Will the hon. Lady give way?

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Debbie Abrahams: No, I will make some progress.

The listening exercise failed to register the concern of many health professionals. Despite what the Government say, many health professionals feel very concerned about the amended Bill. Instead, the Government changed Monitor’s duty from one of promoting competition, as set out in the first version of the Bill, to one of preventing anti-competitive practice. The lawyers will have an absolute field day with that one. The Government talk of reducing bureaucracy, but I think we will see even more bureaucracy as a result of this.

Fiona O'Donnell: Does my hon. Friend recall, as I do, that time and again in the recommitted Bill Committee we asked Ministers and Professor Field what the impact of that change would be? We are still waiting for a satisfactory answer.

Debbie Abrahams: There are many unanswered questions about the Bill, which makes it particularly dangerous.

By opening up competition under the guise of increasing patient choice and clinician-led commissioning, the Government are trying to increase both demand and supply for these services, but the implication for a single-payer health system with a fixed budget, such as the NHS, is that this will inevitably lead to financial meltdown. The only way this can be avoided is by injecting extra capital into the system and the Bill achieves this in many ways. We need to look at not only this cluster of amendments but all the amendments and clauses in the Bill as a whole, because they are interrelated.

First, the Bill allows foundation trusts to borrow money from the City to invest. This is supported by the opening up of EU competition law. Foundation trusts are currently social enterprises and are exempt from part of EU competition, but this opening up will open the flood gates. It means that the trusts will have to compete for tenders with private health care companies. They will have to repay the money they have borrowed by treating more and more patients, including private patients, which will be aided by the abolition of the cap on income from private patients. However, many foundation trusts will still struggle, so the Bill introduces a new insolvency regime to enable private equity companies to buy NHS facilities and asset-strip them, which has direct parallels with the demise of Southern Cross.

Secondly, waiting lists will go up. We are already seeing that across the country, including in my constituency. We have seen that already because unrealistic efficiency measures mean that cash-strapped primary care trusts are rationing access to treatment such as cataract surgery and hip replacements.

Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con): Does the hon. Lady not accept that waiting lists have not gone up in England but have gone up in Wales, where Labour is in control of the NHS?

Debbie Abrahams: It is very interesting that the Government have changed how they measure waiting lists and now use an average, so those indicators are a movable feast.

As waiting lists go up, new health insurance products on the market are enticing people to believe that all their treatment and care can be met fully by the private sector. This will be complemented by new insurance

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markets set up for top-ups and co-payments. We know from the United States that people on low incomes will be less able to afford these products directly, which will impact on the existing health inequalities that the Secretary of State has stressed his commitment to reducing. Why are we doing this? It will increase and exacerbate the inequalities that already exist in accessing care.

Finally, the Bill allows both the national commissioning board and clinical commissioning groups to make charges. I foresee that in the next Parliament there will be more direct patient charges if this Government get in again. As the NHS budget is fixed, the drive for excess capacity will drain that budget rapidly. That will result in clinical commissioning consortia increasingly becoming rationing bodies. As waiting lists increase, they will attempt to manage the issue by reducing the number of core services. That will drive foundation trusts into further debt, forcing closures, mergers and private management takeovers, and we are already seeing that.

Tom Blenkinsop: On the point about foundation trust mergers, when was the last time the Office of Fair Trading was in charge of a merger of one foundation trust and another? Was it not in fact the Co-operation and Competition Panel, which, according to the Bill, will sit within Monitor?

Debbie Abrahams: I am grateful to my hon. Friend for drawing that to my attention. He is absolutely right.

The Secretary of State’s duty to secure and provide a comprehensive health service is a key issue and needs protecting in full. It should not be changed at all. Why are we changing it if is already acceptable? I am sure that we will revisit the matter tomorrow.

Although the Government have supposedly made concessions, recognising that attempting to privatise the NHS, just as the utilities were privatised in the 1980s would not be acceptable to the public, they have changed tack, not direction. Opening up the NHS to EU competition law may dramatically increase the amount of capital available to bring into our health service, but ultimately that capital will flow back to investors at a profit, at the expense of patients and the UK taxpayer. That will only increase income and health care inequalities even further—another way in which the Secretary of State’s duty will not be met. It is clear that the NHS cannot survive the Bill. The NHS needs appropriate reform and proper accountability, but definitely not an opening up of the market in this way.

Caroline Lucas (Brighton, Pavilion) (Green): Does the hon. Lady acknowledge that when her party introduced foundation trusts back in 2003, many of us warned that it would lead to precisely the kind of privatisation that is now being threatened? Does she now regret that?

Debbie Abrahams: Fortunately, I was not a Member of Parliament at that time. As I said earlier, I have no problem with the private sector’s being part of our health system when it adds capacity and value, but the Bill is a whole new ball game.

Tom Blenkinsop: There is a fundamental difference between this Bill and any other on the health service. The Government are writing the Enterprise Act 2002 directly into the Bill, which means that it refers to

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foundation trusts as enterprises and businesses. That extends the ability to merge with business, not just within the NHS framework. That means that the Government have potentially opened up the NHS to European and UK competition law, and they know that full well.

Debbie Abrahams: I thank my hon. Friend for that contribution.

Dan Byles (North Warwickshire) (Con): What does the hon. Lady say to Professor Stephen Field, who was the chairman of the independent NHS Future Forum? He told the Bill Committee:

“When we spoke to the Government and…a lot of senior staff at the Department of Health…we did not, at any time, pick up any feeling that anyone wanted a free open market where people could come in and privatise the NHS, as some people have said in the press.”––[Official Report, Health and Social Care (Re-committed) Public Bill Committee, 28 June 2011; c. 15, Q26.]

Debbie Abrahams: I would be happy to forward to the hon. Gentleman a British Medical Journal article that reproduced in full the concerns of health care professionals that were not included in that account. Unfortunately, there is an element of bias in how they have been reported.

Frank Dobson: Steve Field was a great asset to the Government when he was president of the Royal College of General Practitioners and overwhelmingly welcomed everything that they were proposing. That was probably why he was replaced by a new president who does not do that.

Debbie Abrahams: I thank my right hon. Friend.

When I raised these issues in the recent recommitted Bill Committee, the Minister suggested that I was scaremongering and, with the rest of those on the Government side, refused to accept any of our amendments—not a single one. Given what recent revelations are proving, perhaps he would like to withdraw some of his comments and concede that I have not been scaremongering.

I urge Liberal Democrat MPs who have felt compelled to support this Bill and their Front-Bench colleagues but whose conscience tells them that it is wrong to vote against the amendments and the Bill. This is not what they signed up to.

Mr Stephen Dorrell (Charnwood) (Con): I welcome the amendments that the Government have tabled for consideration. I also welcome the very detailed way in which my right hon. Friend the Secretary of State introduced what is, as I am sure he will acknowledge, a substantial group of amendments. He emphasised that their purpose is to give effect to the undertaking that the Government gave when they set up the NHS Future Forum to ensure that the findings of that forum are reflected in the legislation, and that the Bill, when it reaches the statute book, is built on the work of Professor Field and his colleagues.

One purpose of the amendments is to respond to many of the points that have been made, throughout the passage of the Bill, about the role of Monitor. I completely agree with my right hon. Friend that many of those observations about the supposed role of Monitor

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have been based on a misunderstanding, whether deliberate or otherwise, of the intention behind the Bill when it was first introduced. Whether the misunderstanding was deliberate or accidental, the Government are responding to virtually all those points in order to make it clear that, in the context of the Bill, the central purpose of Monitor is not to be a blind economic regulator based on the assumption that the health service is simply another utility. Various loose words have been used that bear that construction—but never by Ministers, and the implications of those observations have never been accepted by Ministers. As I have understood it—this is why I have supported the Bill throughout its passage—the Government’s intention has always been to ensure that the new NHS envisaged by the Bill gives effect to the basic commitment on which the Government were elected to ensure that the health service secures equitable access to high-quality health care for all patients regardless of their ability to pay.

Fiona O’Donnell: The right hon. Gentleman referred to a misunderstanding of the original Bill. The Secretary of State said that that arose because he was a poor communicator. Do so many organisations still oppose the amended Bill because he is still a bad communicator or because it is still a bad Bill?

Mr Dorrell: In considering these amendments, it is important to refer to the individual functions of Monitor envisaged in the amended Bill and test them against the assertions that have been made, throughout the passage of the Bill, about what Monitor is there for. We must also test them against the Future Forum’s recommendations about how the role of Monitor should be clarified in order to remove these misunderstandings.

First—I warmly welcome this—it is made clear in the Bill as amended and the supporting documentation from the Department that although the Government intend to continue, as did their predecessor, to encourage the conversion of NHS trusts to foundation trusts, there will be no reduction in the standards required to qualify for the status of foundation trust. The registration principles established by Monitor, which are broadly welcomed throughout the health service, are intended to justify the independence that comes with foundation trust status. Those standards will continue as a gold standard under the new NHS, and achieving them, rather than meeting some artificial deadline, is the key determinant of whether a trust achieves foundation trust status. I welcome the fact that the Government have made that clear. It responds to a specific recommendation by the Future Forum, and it is exactly right.

5.30 pm

Secondly, the Future Forum also envisaged that the role of Monitor should not come to an end on the day that a trust achieves foundation trust status. There should continue to be, on behalf of the taxpayer and of patients, an oversight role to ensure that organisations that have achieved foundation trust status continue to meet those standards and to deliver the quality of care required by patients and commissioners. That is now set out clearly in the Government’s supporting paperwork. It is part of the role of Monitor, and I welcome the fact that—having established that there will be no diminution

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of standards in the achievement of foundation trust status—it will have continuing oversight to ensure that those standards continue to be met.

The third point that was highlighted by the Future Forum—once again, it was accepted by the Government in these amendments—is the need to ensure that not only will there be continuing oversight of the achievement of those standards by foundation trusts, but Monitor will have the power to intervene if a threat emerges to the achievement of those standards by a foundation trust. Patients can be confident not only that there will be oversight, but that Monitor—on behalf of the taxpayer and of patients—has the capacity to intervene to ensure that action is taken if management in post at a foundation trust is not delivering the standards required.

Mark Simmonds: As always, my right hon. Friend is making an extremely powerful speech. Does he accept the need for Monitor to ensure that foundation trusts not only continue to meet basic standards but continue to improve those standards year on year, and thereby improve patient outcomes?

Mr Dorrell: I absolutely agree with my hon. Friend. One of the further important clarifications in their position is the stress that the Government have placed—rightly—on the importance of the link between Monitor and the Care Quality Commission to ensure that standards in foundation trusts are not just about the achievement of financial targets, but are about standards of care quality delivered to patients. The link between the two regulators—one of quality and the other of financial standards—is an important part of the regulatory structure that the Government are introducing.

Andrew George: I entirely endorse the point that my right hon. Friend makes about the need to uphold standards and the role of Monitor in that respect. However, with regard to the Secretary of State’s response to me about the sustainability of essential services—acute emergency trauma centres—does he agree that Monitor must safeguard those services and not allow them to be eroded by the competitive environment in which they will operate?

Mr Dorrell: I agree that the sustainability of essential services—or, in the Government’s wording, the continuity of essential services—is a key role of Monitor. If I may interpret what my right hon. Friend the Secretary of State said, the patient’s interest is continuity of service, but not necessarily from the same provider for ever more. There has to be a commitment to sustain the service, and if there is to be a change of provider, the service has to be sustained through the change of provider, but the service does not necessarily have to be sustained by the same provider. Nor has there ever been such sustained service. There are not many people who rely on the service once provided by the Westminster hospital, as it is now a block of flats. I believe, however, that the service delivered to patients in this part of London is better as a consequence of the change that resulted from that decision.

Grahame M. Morris: As always, the Chairman of the Health Select Committee, is making a powerful contribution. He has really hit the nail on the head. The fundamental point, as evidenced in the Bill, is not that

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the provider could change—that has happened in the past, as he said, although the provider has always been a public sector provider, either in an NHS trust or an NHS foundation trust—but that, under the Bill, the provider could well be a private sector provider.

Mr Dorrell: I am grateful to the hon. Gentleman, who is a member of the Select Committee, because he provides me with a link to my next point—I was beginning to wonder how I was going to get on to it.

The health service has not always provided services from a public sector provider. Until this Bill and the powers it gives to Monitor, regulatory bodies in the public sector had not had the opportunity to inquire into the sustainability of services provided by private sector providers. My right hon. Friend the Secretary of State made the point that the role of Monitor under the Bill is to ensure first—if I may repeat myself—that foundation trusts are of a high quality when they are launched; secondly, that they are accountable for retaining their high standards; thirdly, that we intervene early if they start to go off the rails; and, fourthly, that if they get into serious difficulty, we have the capacity, through Monitor, to continue to deliver continuity of service to those who rely on public health provision, whether from an NHS foundation trust or, as a result of the Bill, for the first time from the private sector. I regard that as a significant step forward in the delivery of continuity of care for NHS patients, whether provided, as the vast majority still will be, by public sector institutions or by some of the independent sector treatment centres introduced by the previous Government.

Rosie Cooper: Does the right hon. Gentleman think that standards can be maintained, and be seen to be maintained, in foundation hospitals if they are allowed to do what they are currently doing, which is not to disclose all information relating to, for instance, complaints procedures or whatever? Furthermore, does he not think that board meetings should be held in public?

Mr Dorrell: My understanding is that the Government have clarified that foundation trust board meetings should be held in public and that, in future, it will be a requirement of licensing by Monitor. On the much broader point, I absolutely agree—the hon. Lady, who is another member of the Select Committee, knows that I agree—that providers of care to NHS patients, whether public or private, ought to have an obligation to provide information on the outcomes that they achieve and certainly on any complaints and other processes initiated by patients about the care they receive. That was one of the strong recommendations that the Select Committee made following its work on complaints. I think that that obligation ought to rest on all providers of care to NHS patients, whether they are foundation trusts or any other form of provider.

Barbara Keeley (Worsley and Eccles South) (Lab): Will the right hon. Gentleman provide some clarification? I think that he said “should” and not “must”. For other functions, particularly relating to local government, the Government seem to be into dropping standards and

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codes of conduct—that is certainly the case in local councils—but surely trusts “must” have meetings in public, not “should”.

Mr Dorrell: Ministers can correct me, but my understanding is that, under the obligation being introduced, they “must” meet in public. I have no authority to speak for the Government, but I believe that that is what the Government intend. For myself, as a patient of a trust or other NHS provider, whether in the public or private sector, my interest lies in ensuring that the information about my—

The Minister of State, Department of Health (Mr Simon Burns) Will my right hon. Friend give way?

Mr Dorrell: Of course.

Mr Burns: I am grateful to my right hon. Friend for giving way and allowing me to clarify the point. Let me reassure him that, yes, such meetings must be held in public.

Mr Dorrell: I am grateful to my right hon. Friend, who answers the hon. Member for Worsley and Eccles South (Barbara Keeley) with very much more authority than is at my disposal.

I want to make one final point and it is a direct response to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). Of all the misrepresentations about the intentions of this Bill that we have listened to since the White Paper was published over a year ago, the most persistent is that this is somehow a Bill—a ramp—for the privatisation of the health service.

I was first a Health Minister more than 21 years ago. Throughout that period I have listened to speeches directed first at my right hon. and learned Friend the current Justice Secretary, when he was Health Secretary, and subsequently at all his Labour and Tory successors, including me, although probably excluding the right hon. Member for Holborn and St Pancras (Frank Dobson). All their legislative and other proposals to introduce more flexible and patient and standards-oriented structures in the health service were opposed by somebody or other on the grounds that they were going to privatise the health service. If that was the purpose of those policy initiatives, the one thing that they all have in common is that they have been singularly unsuccessful. If it is the policy purpose of this Bill to privatise the health service—which I do not for one moment believe it is—it will, I am sure, be as unsuccessful as all the other measures that went before it.

Frank Dobson: I begin with a reminder. I was one of those Labour people who voted against the establishment of foundation trusts and the setting up of Monitor. In doing so, I was supported by those on the Conservative Front Bench, so I do not think that the Conservatives should claim any consistency in these matters.

My second point is that although one would never dream it was true from listening to Ministers or their supporters, it is quite clear that the national health service is now working very well and is more popular than ever; and yet we are told that it needs a radical overhaul. However, the popularity of the national health service at the time of the last general election probably

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explains why both the Conservative party and the Liberal Democrats promised that there would be no top-down reorganisation of it. However, if neither the Bill as originally produced nor the post-pausal Bill that we have now is top-down change, God knows how one would define it.

The whole purpose of this Bill is to shift us away from the basic collaborative approach to the provision of health care in this country and to substitute a large amount of competition, gradually involving more and more of the private sector and, I believe, privatisation. In order to put things in perspective, it is worth pointing out that when the right hon. Member for Charnwood (Mr Dorrell), ceased to be the Secretary of State for Health, the national health service was performing 5.7 million operations a year in its hospitals. When Labour left office, it was performing 9.7 million operations a year, an increase of 58%. That was the result of improved working practices developed by—

Dr Poulter: Will the right hon. Gentleman give way?

Frank Dobson: No, not for the minute.

That change was the result of improved working practices developed by the people working in the national health service, not the result of any structural changes. It was also partly the result of the biggest hospital building programme in history, as well as a lot more new and better equipment, newer GP surgeries, 78,000 extra nurses and 27,000 extra doctors. Those were among the reasons that the NHS became so much more popular. It is popular because, for most people in most parts of the country most of the time, it is already doing a very good job. However, that is now going into decline, because many people working in the NHS carrying out pre-legislative preparatory work on the proposed changes are having to divert their efforts into bringing about structural change. That is one of the reasons waiting lists and waiting times are going up—something that the Government deny is happening.

5.45 pm

Lyn Brown (West Ham) (Lab): Bearing in mind the lack of popularity of the proposals among our constituents, is my right hon. Friend as worried as I and my constituents are about the £850 million that is being spent on redundancies and the projected £2 billion of primary care trusts’ budgets that is being held back from patient care to cover the risks and costs associated with the reorganisation?

Frank Dobson: I entirely agree. Nobody could possibly claim that redundancy payments constitute money being spent on improving services for our constituents. That is just money down the drain as far as patient care is concerned.

The fundamental problem behind the proposals is that the Government are, in effect, proposing a further major fragmentation of the national health service. In the past, up to the point at which the previous Tory Government introduced an internal market, the spending on administration in the NHS amounted to 4% of the total. That was largely because great big slugs of money were transferred round the system, and I am prepared to accept that there might be some disadvantages in that arrangement. Since then, however, under that Government

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and the Labour Government, the system has changed to one in which the money follows the patient. That has led to the creation of all sorts of exceptionally expensive systems to bring about individualised transactions, which has resulted in the cost of administering the national health service rising to 12% of the total—an increase of 8%. The NHS is spending about £100 billion a year at the moment, so an extra £8 billion that should have been spent on patient services is now being spent on the administration of the semi-fragmented system. What is now being proposed will involve yet further fragmentation, and I shall explain why I believe we will end up spending yet more money, but not on patients.

Chris Skidmore: The right hon. Gentleman has mentioned the £8 billion being spent on administration in the NHS. I assume that he therefore welcomes the coalition Government’s decision to cut the administration budget by £5 billion by 2015. In his speech so far, however, he seems to be suggesting that the status quo is acceptable. I believe that it is unacceptable. Does he welcome the fact that we will be putting an extra £12.5 billion into the NHS?

Frank Dobson: If the hon. Gentleman—and, for that matter, the Secretary of State and the Chair of the Health Select Committee—had ever listened to what I say, they would know that I think that we need change. We need organic change, however, rather than structural change, because structural change generally costs more than it provides. If the hon. Gentleman thinks that introducing a system in which virtually every transaction will be a legally binding document, with herds of lawyers grasping their share of proceedings, will reduce the amount spent on administration, he obviously believes in Father Christmas and various other mythical figures.

Barbara Keeley: Before we get into any more claims of more being spent, I want to touch on two examples of cuts, caused by the cuts and efficiency savings, which I raised with the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow). The most deprived ward in my constituency is losing its NHS walk-in centre and all the people with long-term conditions are losing active case management. I raised those two cuts made by Salford PCT with the Minister in an Adjournment debate, to which I have received no answer. There is no answer. People in the most deprived wards with the greatest health inequalities are suffering from these cuts. I will not hear any more about more investment being made, because all I see as a constituency MP is less investment.

Frank Dobson: I agree entirely with my hon. Friend. A further point is that I doubt whether there is a single constituency anywhere in the United Kingdom of Great Britain and Northern Ireland that has seen more change in health provision than mine. There are not many places where a virtually trouble-free amalgamation of two major and famous teaching hospitals into one has taken place successfully. There are not very many places that have seen more small GP practices getting together in one location and improving their performance. Those

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things have always been done with my strong support, even when on some occasions, at least at the outset, the ideas were not popular with some local people. Therefore, I do not accept that I do not believe in change. I believe in sensible change, not stupid change, but stupid change is what we seem to be getting.

Mr Stewart Jackson (Peterborough) (Con): I admire the right hon. Gentleman’s chutzpah, but I wonder whether he was missing in action during the last Parliament. Some of us were saying in 2008 that the imposition of independent sector treatment centres—Darzi centres—would have a direct impact on the budget of primary care trusts and would cause the development of structural deficits that would impact directly on poorer areas with smaller primary care facilities. Where was the right hon. Gentleman then, when it came to attacking his own Government on that specific issue?

Frank Dobson: I was attacking them! I am sorry if the hon. Gentleman did not notice, but I believe I was the first person to expose the fact that on average the private sector was paid 11% more per operation than the NHS was getting for the equivalent operation. I shall take no lessons from anybody when it comes to opposing some of the daft things that went on. I did oppose them and I am proud to have done so. What is being proposed now, however, goes far beyond that. As my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who has a great deal of knowledge in these matters, has pointed out, there is scarcely any evidence from anywhere in the world to show that a competitive system delivers better health care than a collaborative system.

To ask the essentially collaborative health care system in this country to turn over to being competitive is a bit like asking the Meat and Livestock Commission to promote vegetarianism: it is simply not what people want to do; it is not their approach and nor should it be. It remains the case that Monitor is still rigged in favour of promoting competition. Let me point out—hopefully without putting my glasses on—that clause 58(3) states:

“Monitor must exercise its functions with a view to preventing anti-competitive behaviour in the provision of health care services for the purposes of the NHS which is against the interests of people who use such services.”

However, it does not say that “Monitor must exercise its functions with a view to preventing competitive behaviour in the provision of health care services which may be against the interests of the people who use such services”. Apparently, then, there is a basic, intrinsic and fundamental assumption that competition must be beneficial and non-competition must be harmful. If the Government say that Monitor is neutral, it should be given a neutrality in respect of competition and non-competition. As I think the hon. Member for Peterborough (Mr Jackson) would agree, the unfair competition of some of the independent treatment centres was harmful to and threatened the services provided by neighbouring NHS hospitals. There is clear evidence here of problems within the private sector.

I recall that, a few years ago, United Health—a subsidiary of the US United Health—took over three GP services in my constituency. It bid that it could provide the range of services for less than the local GPs, so it got the contracts. It has not complied with all the

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conditions that were set, but the primary care trust decided that it could not take it to court because it would be such a lengthy and expensive exercise and it feared that the PCT might not win. Not content with that, United Health recently announced that it was selling the franchise to another private outfit. It did not consult the staff. It did not consult any elected local representatives—neither me nor councillors. Above all, it never consulted the patients. These private sector outfits regard patients as part of the chattels that they can dispose of to maximum benefit and maximum profit.

That illustrates the fact that if we are to have contract-based provision of services, a huge amount of lawyer effort will be put into trying to draw up watertight contracts. What one lawyer thinks is a watertight contract, another lawyer will make a leaky contract by puncturing a hole in it, and we will go over to the system in the United States, where zillions of dollars are spent on court challenges or settlements with the providers of health care.

Furthermore, there is virtually no major American supplier of health care that has not been indicted for defrauding federal taxpayers, city taxpayers, state taxpayers, doctors or patients—and sometimes all five. I thus asked the Secretary of State whether he would rule out giving any NHS contracts to any organisation that had been indicted for defrauding people in another country. He gave me about a page-long answer, which could be summarised as, “No, he would not rule them out.”

We are thus talking about the possibility of European competition law being used to force our Secretary of State to allow people to give contracts to American companies whose greatest claim to fame is that they have defrauded innumerable Americans. I think that that is intolerable. I would have thought that all these anti-EU Conservatives found it rather embarrassing to think that European law was going to be used to allow fraudulent Americans to get contracts working in our national health service. All those things, however, will be possible under the system proposed by the Secretary of State.

6 pm

Many people—including, possibly, me in this speech—will find it quite difficult to mount an entirely logical and coherent response to this collection of amendments, given their nature, scale and variety. Let me return to a point that I made when the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), was introducing the ludicrous programme motion. I believe that to make such fundamental changes to the national health service—changes whose consequences are, at the very least, unpredictable—by means of 1,000 amendments, albeit some of them trivial, and to say to people in the national health service, “Your sovereign elected House of Commons has seriously considered all the changes that the Government are proposing and has exposed them to scrutiny”, is to treat the people who work in the service, and their patients, with contempt.

Grahame M. Morris: May I take up my right hon. Friend’s point about effective scrutiny and the assurances that Ministers have given the House? The knives prevented us from debating two of the Bill’s most significant clauses in terms of costs and implications, clauses 29

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and 30, which deal with the abolition of strategic health authorities and primary care trusts. The redundancy costs will amount to more than £1,000 million.

Frank Dobson: I entirely agree with my hon. Friend. I think that nowadays those who call themselves members of the Conservative party only purport to be Conservatives. The basic Conservative approach in this world is, broadly speaking, not to make great changes without being absolutely certain that substantial benefits will result from them. A proper Conservative recognises the problems that arise during the process of change, and the unpredictability of things in human life. What we have now, certainly in relation in health and possibly in other spheres, is a Government who are going ahead with something which—good God!—cannot be regarded as well thought out, given that they have tabled 1,000 amendments on Report.

Barbara Keeley: I winder whether my right hon. Friend heard the Leader of the House say to the Hansard Society that

“it has simply become too easy for the Government to sideline Parliament; to push Bills through without adequate scrutiny; and to see the House more as a rubber-stamp than a proper check on executive authority.”

He also said that, in the Government’s view,

“a strong Parliament leads to a better Government.”

Does my right hon. Friend believe that the Bill, and the very shortened debate on its recommittal, constitute a good illustration of that?

Frank Dobson: In fairness, I think that given the accuracy of the present Government’s aim, if they tried to rubber-stamp something they would probably miss.

Dan Byles: In view of the speech that the right hon. Gentleman is making and his definition of a “proper Conservative”, I wonder whether he has just come out of the closet as a proper Conservative himself.

Frank Dobson: People have described me as old Labour, but I have moved on from that. I am now heritage Labour. Part of our heritage, however, is the national health service, and it is not the Tories’ heritage either. Those who play with the national health service—which is what I think the Government are doing, purely for ideological reasons—do us a disservice in two ways. They threaten the likely performance of the national health service and the people working in it, and they threaten the relationship between the British people and the national health service.

Fiona O'Donnell: Will my right hon. Friend give way?

Frank Dobson: No, I will not.

I believe that the national health service is popular for two reasons: because, in most parts of the country and for most of the time, it does a good job for people; and because people value the thought that it not only looks after them but looks after their families, looks after their neighbours, and looks after all of us. I believe that, in many ways, that is its most important function.

We live at a time when everyone is filled with growing concern about the divisive elements in our society, and the national health service, along with the feeling that

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people have for it as a collaborative organisation, is one of the few exceptions to that. The health service does not just bind the wounds of people in this country, but helps to bind us together. That, I believe, is why it is so dangerous that the Government are going against its basic principles, thus risking not only its performance, but its relationship with us and its binding function in our increasingly divided society.

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

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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

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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.

6.15 pm

Sadly, I have come to the conclusion that anyone who claims certainty in respect of this area of EU law is probably a fool. There are two reasons for that. First, as Mr Roderick advises me, the definition of “undertaking” in EU law is changing. Secondly, he thinks that schedule B services, which are of some concern to people who are interested in this sort of thing, are under review by the European Community.

I was genuinely impressed by the hon. Member for Leicester West (Liz Kendall) when she summed up the Labour party’s problem in this area in Committee. I circulated her words to my colleagues so that they could survey the argument as expressed in its strongest form. She said:

“I am not arguing, as Ministers have claimed the Opposition have, that the Bill extends the scope of competition law. My argument is that the Bill extends the applicability of competition law to the NHS. It is not just the clauses we are discussing today that will make that happen; so will other clauses, such as those that abolish the private patient cap on foundation trusts, and aspects of the Government’s policy, particularly requiring commissioners to consider any qualified provider for all services”—

which is not in the legislation. She continued:

“All those things will guarantee that the NHS will be considered and treated as a full market, and that the providers of NHS services will for the first time be treated as undertakings for the purposes of competition law.” ––[Official Report, Health and Social Care (Re-Committed) Public Bill Committee, 12 July 2012; c. 400.]

We simply do not know how the EU will define “undertaking”—we do not have that level of certainty—and my view is that we do not currently know much about the applicability of EU law. I am not as pessimistic as Mr Roderick, the 38 Degrees adviser, about what we can do about the situation we are in, however. He claims that the Bill cannot limit the application of competition law:

“nothing in the Bill…can have the effect of preventing the application of competition law.”

So this may all be going to happen regardless of whether we accept this Bill.

I accept that this is an extraordinarily difficult area that interests many health anoraks ad nauseam, but probably loses the general public. However, what makes it difficult is not the Bill per se, but all the changes in the NHS over previous years, on which those on the Treasury Benches and those on the Opposition Benches have usually been at one. However, my contention is that it is clearly better if Monitor takes on the role of carrying out whatever regulation or adjudication will be necessary.

I want briefly to turn to amendments 1219 and 1220 in my name. The motivation for moving them stemmed from the Committee stage, which I am happy to say was

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a thoroughly congenial occasion that all Members thoroughly enjoyed. Through that process we were convinced—as I have tried to convince Members today—of the benefits of a sector regulator: Monitor. However, we then reached clause 71, where we discovered the strange anomaly that mergers of foundation trusts go to the OFT, which has no experience and little inclination, might be disposed to treating hospitals purely as businesses, and which, if it gets involved, will make reconfiguration a lot more complex and difficult.

Given the appalling problems that we shall have in the acute sector over the next few months and years, I certainly would not want to see the OFT wading in and overruling decisions that are sensible rationalisations. In a sense this is slightly ludicrous. If one foundation trust is a public body and the other is also a public body, they are both essentially owned by “UK plc”. Where, then, would we refer that decision? If Marks and Spencer owned those institutions, it would merge them and there would be no issue with which the OFT need detain itself. However, if we accept that such issues should go to a regulator, why this regulator? Why the OFT? Why not instead leave it, as most people supposed would happen, to Monitor?

A variety of answers were given in Committee. One was that such a merger would have to go to the OFT because there could be a combined turnover of more than £70 million. However, then it became apparent that it was not just that revenue or budget threshold that determined whether such matters went to the OFT, because non-foundation trusts, regardless of size, would not go to the OFT. I therefore still ponder where we can go with this.

I heard the Secretary of State say that the problem is that if, as my amendments propose, we take out the reference to foundation trust mergers going to the OFT—which would be a sane and sensible thing to do—we may still fall foul of other bits of legislation. We may also risk double jeopardy. I understand that that is a real problem, which we would want to avoid. The difficulty I have is that if, as the Secretary of State says, this is a very uncertain field legally, it is probably not wholly justifiable to put formally into the Bill the application of part 3 of the Enterprise Act 2002. It is probably better to get the legal situation a bit clearer, and I am fairly confident that that is the view that their lordships will take when they examine this Bill.

Grahame M. Morris: I am privileged to have the opportunity to speak in this debate on an issue close to my heart. A number of Opposition Members—and perhaps Members across the whole of the House—have taken advantage of the opportunity to spend a day with the NHS to see at first hand some of the issues and problems and to discuss with staff and patients their concerns. Many Members have received e-mails and letters from constituents and from various interest groups, and the issues we are considering this evening are very important.

As my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said during his contribution, the NHS holds a very special place in people’s affections. In many respects it is viewed not unlike a religion, in so far as it is loved and cherished. Members who have had the opportunity to travel to other countries and see different health systems will no

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doubt be well aware of the high esteem in which our own health service is held throughout the world. It is a real exemplar—a model of a publicly funded, publicly provided health service. As an aside, I point out as a member of the Select Committee on Health that we have a very frugal Chairman, and the furthest we have travelled is to Hackney. My knowledge is therefore based on reading and on evidence submitted to the Committee.

Let us consider the problem we face with the Bill and the amendments and new clauses. I listened carefully to the Secretary of State’s statement, and the real concern among patients, the public and the Opposition is, what are the motivations behind these reforms? I worked in the health service for a dozen years or more and have taken the trouble to look into the various options in some detail. Ministers have said that there are precedents for Bills of this complexity, but I would be staggered to find that there are. It is incredibly complicated and has been subject to numerous amendments. As members of the Bill Committee who are in the Chamber this evening know, many of the arguments originally made by Government Front Benchers were turned on their heads in Committee, and some of those that were rubbished by the Opposition were taken up and rehashed as part of the Future Forum.

Nicky Morgan (Loughborough) (Con): I am listening very carefully to the hon. Gentleman, as I did in Committee. Indeed, those of us who served on both Committees—the original and the re-committal—deserve a badge of honour. He talks about the Bill being complex. Does he not think that the process has been made more complex by the use of misinformation and emotive language, and by campaigners obscuring the Bill and needlessly causing patients to worry about their ability to access the health service once the Bill has been passed? The point is that free access at the point of need is not changing, and that is what most patients care most about. Does he not agree?

Grahame M. Morris: I am afraid I do not agree with the hon. Lady, as she might expect. The Secretary of State said that it was a question of communication, but I suspect that part of the problem with the Bill is that, far from there being additional clarity, the more that Members of Parliament, the medical profession, health care workers, members of the public and informed commentators have examined the proposals in detail, the greater the number of concerns that have arisen.

If the Secretary of State had been open and honest about the direction of travel and the motivation for these health reforms, perhaps we could have avoided some of the confusions that have arisen. There is no electoral mandate for a huge structural review and reorganisation. I suspect that there is something seriously wrong with the whole privatising agenda and philosophy, which the Secretary of State denies.

Rosie Cooper: Does my hon. Friend believe that misinformation and emotive language almost began and ended when the Prime Minister said that the NHS was safe in his hands? The misinformation began when he fooled the British public into thinking that the NHS was safe. This is the result.

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Grahame M. Morris: I am grateful to my hon. Friend for raising that issue, which I will return to later. There were assurances that there would be no top-down reorganisations, but we should note the scale and complexity of this huge, top-down reorganisation. The Government alluded in Committee to the costs of administration, as did other members of the Committee. During Health questions and in Committee, I raised the question of the huge costs of administering Monitor, which have grown exponentially. We have had various estimates from the Government about the true cost, but over the lifetime of a Parliament it could be as much as £500 million, once we know the full extent of the legal challenges that Monitor will be expected to defend. That is a colossal sum.

I wanted to intervene when the Secretary of State referred to clause 60 of the original Bill and the intention to extend the duties of Monitor into the social care element of health and social care, but he would not allow me to do so. I wanted to ask whether any estimate has been made of the cost of such an extension of Monitor’s remit, which I suspect will be considerable.

Pat Glass (North West Durham) (Lab): The Secretary of State mentioned 38 Degrees, which clearly has touched a raw nerve. Quite apart from the people from 38 Degrees who have contacted me, huge numbers of my constituents have contacted me to express real worries about this issue. Given the concerns of the Opposition, the press and, most importantly, the voting public, how does my hon. Friend think that we all got so out of step with the Prime Minister and the Secretary of State?

Grahame M. Morris: I am grateful to my hon. Friend for expressing that concern, which many people share—even among the Government, although perhaps they conceal it. Such concerns are not restricted just to 38 Degrees and Opposition politicians. Lord Tebbit of Chingford, an outspoken man who could hardly be described as a left-wing agitator, raised real concerns about what he described as these privatising reforms. He said that there is something seriously wrong, and that

“What worries me about the reforms…is the difficulty of organising fair competition between the state-owned hospitals and those in the private sector. In my time I have seen many efforts to create competition between state-owned airlines, car factories and steel makers. They all came unstuck. The unfairnesses were not all one way and they spring from the fact that state-owned and financed businesses and private sector ones are different animals”.

I have rarely found myself in agreement with Lord Tebbit, but on this occasion his analysis is extraordinarily insightful. His comments underline many of the basic contradictions in the Bill and in the subsequent amendments, which number more than 1,000.

Fiona O'Donnell: Apart, perhaps, from his warm comments about Lord Tebbit, my hon. Friend is, as ever, making a well-informed and considered contribution. We face a lack of information, inaccuracy and changing numbers. Does he therefore agree that what we also need, given the concerns raised by many hon. Members about the potential for an increased health inequality gap in this country, is an equality assessment of the Bill?

6.30 pm

Grahame M. Morris: I am grateful for my hon. Friend’s contribution, as that is an excellent point. If hon. Members will bear with me, I shall discuss new clause 6 and what

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I believe the implications of the Government’s proposal would be for the Bill and for health inequalities. I was intrigued by the Secretary of State’s assurances in his opening statement about the responsibilities being conferred on him in the Bill that did not apply when Labour was in power. I believe he said that those powers were devolved to primary care trusts, but if PCTs are disappearing or clustering and strategic health authorities are disappearing over time or being clustered, surely it is right that the Secretary of State, as an accountable politician, should have these powers clearly defined in the Bill. I did not mean to digress, Mr Deputy Speaker. Those remarks related to clause 1 and I shall confine myself to the provisions before us.

As I have said, many concerns have been raised about the approach being taken to this cherished institution, not least those set out by my right hon. Friend the Member for Holborn and St Pancras about patient perception.

Jim Shannon (Strangford) (DUP): Is the hon. Gentleman aware of the survey carried out among the 50,000 members of the Chartered Society of Physiotherapy? It indicated that 81% do not agree with the proposals for NHS reform—that touches on the issue that he just raised. It also indicated that 89%—almost nine out of 10 of those who work in the health service—believe that patient care will suffer and that 84% do not believe that the Government have considered these changes. Does he believe that the level of concern among those workers in the health service, and among the general public, means that whenever the vote takes place tonight hon. Members should be very careful and should oppose the Bill?

Grahame M. Morris: I am grateful for that information. I know that other hon. Members have spent a day with the health service and I am sure that Ministers take soundings, but I can honestly say that what the hon. Gentleman describes is the feedback I have received from talking to health professionals, patients and so on. I recognise that the Secretary of State has said on numerous occasions that a substantial body of GPs support this approach. When I tuned in to this morning’s “BBC Breakfast” I saw Professor Chris Ham of the King’s Fund being interviewed. He is an eminent and respected commentator on health service issues who has given evidence to the Public Bill Committee and the Health Committee. He gave his view that it was a small cohort of GPs who were signed up and committed to these reforms. I agree with his assessment.

These provisions deal with the role of Monitor, the relevant implications and changes to the failure regime. A “Panorama” documentary on the BBC featured Sir Gerry Robinson, who has some standing in the business community and for previous journalistic investigations into the NHS. The conclusion of his report was that he thought that these reforms could mean

“the end of the NHS.”

That is his conclusion. Even after meeting the Secretary of State he remained unconvinced of the value of the reforms.

The Secretary of State has failed to persuade the public and he has failed to persuade NHS staff of his approach. That has been illustrated by various surveys, through the British Medical Association, by personal contacts and in other ways. Even elements of the business

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community recognise the level of public opposition and concern. It seems that the principal backers are overseas US-style private health groups, whose interest is not philanthropic. They see the prospect of substantial profits and unprecedented access to billions of pounds soon to be available from NHS coffers. We hear Ministers and Government Members saying that the NHS was open to private sector providers under the previous Administration, and a very small figure—5% or so—was cited in the Public Bill Committee proceedings.

Frank Dobson: My hon. Friend may like to know that even in the final year of the Labour Government just 2.1% of operations were carried out by the private sector.

Grahame M. Morris: I am grateful that that information has been put on the record.

Andrew Gwynne (Denton and Reddish) (Lab): My hon. Friend is right to talk about the potential role for overseas health companies. He might have seen the article in The Guardian yesterday stating:

“A German company has been in talks to take over NHS hospitals, the first tangible evidence that foreign multinationals will be able to run state-owned acute services”.

That has become apparent only through freedom of information requests. Does my hon. Friend think that this is the slippery slope that this Bill is going to usher in?

Grahame M. Morris: That point was raised during the Secretary of State’s earlier remarks. [Interruption.] Well, it came in response to a freedom of information request. I thought that his response was illuminating, as he assured us that that would not involve the transfer of NHS real estate, although he did not rule out the possibility that private sector providers would take over the running of these things. The report that I saw said that they would take responsibility for the management and staff, and he gave no rebuttal of that report.

Mr Simon Burns rose—

Grahame M. Morris: I will give the Minister an opportunity to do that, if he so wishes.

Mr Burns: There is an air of déjà vu to this debate now, although I am delighted to be taking part in a debate with the hon. Gentleman yet again. May I point out that the only example of what he is saying relates to Hinchingbrooke hospital? What happened there was started by the previous Labour Government—his Government.

Grahame M. Morris: I do not wish to labour the point, but the report in The Guardian said that freedom of information requests to the Department of Health indicated that discussions were taking place between officials in respect of the transfer of between 10 and 20 NHS units—[Interruption.] I am simply reporting what I have read in the paper.

Mr Burns: May I say to the hon. Gentleman that that report is unadulterated claptrap? The trouble is that it was a misunderstanding of the contents of the e-mails. [Laughter.] The right hon. Member for Holborn and

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St Pancras (Frank Dobson) may think that that is funny, but the e-mails were not about these bodies taking over NHS hospitals; the e-mails were about discussing what their views are on hospitals that are struggling. The e-mails were part of an information-gathering mechanism to find out how policy in the NHS could be improved to deal, within the NHS, with hospitals that might be struggling as part of the foundation trust pipeline.

Grahame M. Morris: I do not find this at all funny. I would find it really worrying if this report is an indication of what is in store. It is rather ironic that the Secretary of State quoted from the Labour party manifesto. Perhaps it might be instructive if I were to quote from the Conservative party manifesto. It said that the Conservatives would

“defend the NHS from Labour’s cuts and reorganisations”.

If this Bill is not the biggest reorganisation that we have ever seen—[Interruption.] Well, it is, even though the Conservatives said that they would not proceed with any such huge reorganisation.

Mr Kevan Jones (North Durham) (Lab): Would not the Secretary of State be able to clear that up tonight by giving a categorical assurance that no hospital will be transferred to or run by a foreign entity?

Grahame M. Morris: I am happy to give way to the Minister, if he wishes to give that assurance from the Dispatch Box. It would reassure staff and members of the public. Perhaps we can read something into the Minister’s reluctance to give such an assurance.

The Government, despite the spin, are delivering one of the most radical reorganisations ever and in the view of many Opposition Members it will undermine the basic principles of the NHS. When the Health Secretary was shadow spokesman for the then Opposition, at no point did he explain his plan to apply 1980s-style privatisation mechanisms to the NHS. I am an avid follower of health policy and the idea of creating an economic regulator—as we have discovered through a series of parliamentary questions, the costs of Monitor could be £500 million in a single Parliament—is again ironic when we hear the Government talk about waste and bureaucracy.

As for exposing the NHS to competition law, I accept the point made by the hon. Member for Southport (John Pugh), which was also made by my own Front Benchers, that it is not the provisions on the face of the Bill but the changes to the architecture of the NHS that will expose the NHS to European competition law—the same law, as we have heard, as applies to the utility companies. Health would be considered a commodity and £60 billion of the NHS budget would be handed over to private bodies, by which I mean those bodies that were the GP commissioning consortia, now renamed clinical commissioning groups. Despite the assurances about openness, transparency and accountability, those would be private-sector companies and my understanding is that they would not be open to FOI requests. That must be of huge concern to people who champion civil liberties, freedom and transparency. Over the past six years or so, we had no indication from the Secretary of State that he was planning such a radical change.

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On the subject of the new failure regime, as set out in the amendments, having sat through the Public Bill Committee on the initial Bill as well as that on the re-committed Bill and having listened intently to the arguments, I cannot decide even now whether this is a U-turn or a side-step. I have read this huge document—the weighty tome that makes up the Bill, with all its various chapters and parts—as well as the impact study and the whole justification behind the Ministers’ arguments was that the NHS needed a market and a failure regime to boost productivity. Has that whole idea been left by the wayside?


Dr Poulter: Does the hon. Gentleman accept, however, that the previous Government failed to put in place any adequate failure regime to deal with situations such as that which occurred at Stafford hospital and that the Bill is a step towards providing a proper overview of what to do when trusts fail and let down patients?

Grahame M. Morris: I am not suggesting in any way, shape or form that every NHS organisation—be it an NHS hospital trust or a community-based organisation—is incapable of improvement. My philosophy, as someone with a bit of a scientific background, has always been that we should assemble an evidence base, pilot a proposal in one area, establish best practice, see where the faults lie, tweak it if necessary and then, if it works, roll it out. This leap-in-the dark approach is flawed and will end in tears. The service is hugely important and touches everybody’s life in this country at one time or another. The whole concept of the Bill is flawed and the way it has been prosecuted is compounding the problem.

6.45 pm

As for a number of the new clauses and the changes to the failure regime that we are dealing with, in the recommitted Public Bill Committee we tried on numerous occasions to tease out from those on the Government Front Bench precisely what they had in mind. I was shocked when I saw that there were 1,000 amendments. Admittedly, the Minister said that 715 are so-called technical amendments—

Mr Simon Burns: Changing the name.

Grahame M. Morris: Absolutely. At this late stage in the process, however, these are huge and significant changes.

Nicky Morgan: Just to help the hon. Gentleman, a number of the amendments relate to the continuity of services, which his party and those on his Front Bench asked to have considered by this House on Report rather than being left to the Lords. I am sure that the Ministers can help, but if that subject was not included, I suspect that the number of amendments would be significantly smaller. It is right that they should be considered in this House at this time—does he not agree?

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?

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Grahame M. Morris: Again, that is a really good point. An incredible number of complex and detailed changes have taken place during the passage of the Bill, including the listening exercise and the consideration of a series of complex amendments, and even they did not address every issue that had been raised. Essentially, I am trying to say in a clumsy kind of way that the Bill is poorly thought out. I think it is a bad Bill, and if it is implemented it will cause real problems for the service and the people who use it.

Nic Dakin (Scunthorpe) (Lab): I do not think my hon. Friend is making a clumsy speech at all; he is making a lot of very good points. His point about the Bill being badly drafted and set out is why I have been inundated over the past few days with messages from a range of professionals and service users who are very concerned about where things are going. I applaud my hon. Friend’s approach.

Grahame M. Morris: I am grateful to my hon. Friend for his point and for his kind words. My contention is that the problem with all these reforms is that they tend to unravel once there is an opportunity for not just Members of Parliament but health care professionals and the broader public properly to scrutinise them. Once people have the chance to consider the proposals in detail, there is an outcry such as that described by my hon. Friend.

I have tried to understand the thinking behind the Government’s changes and amendments. As I mentioned earlier, many of the changes fly in the face of the logic of the arguments originally made in Committee and when the Bill was first published. The obvious logical conundrum, if that is the term, can be seen in the fact that the original impact assessments, which were very comprehensive, said that it was essential to create a functioning market to gain the benefit of the reforms. A whole section of the impact study explained why “market exit” was fundamental to reforming the NHS. I heard what the Minister said earlier and I have read the Government’s amendments, but I am not quite convinced—perhaps I am a bit of a cynic—that this is a real concession. If we follow the Government’s logic, that makes the Bill as a package at best inconsistent and at worst it removes the possible benefits that Government Members may wish to promote in terms of the costs of any market system. Instead, we are subject to a strange system. The Secretary of State initially mentioned creating a level playing field to allow access for private health care firms as well as existing NHS and public providers. There are therefore some basic contradictions in the rationale behind some of the reforms, if there was any merit in the arguments initially.

Tom Blenkinsop: Is my hon. Friend concerned, as I am, that 2% of PCT budgets—approximately £2 billion—is being used for this reorganisation? There is a direct effect on my community and the Redcar and Cleveland PCT, where almost £4 million has been taken from health inequality budgets, which could have been used on the front line.

Grahame M. Morris: I am making rather slow progress, but I did want to get on to health inequalities. My hon. Friend makes an excellent and important point. We touched on it briefly in the Bill Committee and it relates

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to new clause 6. I was concerned about the reports that in the allocations to PCTs and SHAs, the element set aside for addressing health inequalities had been reduced. That should concern us all, especially those who represent areas that suffer high levels of health inequality and deprivation.

It is a bit of an achievement that the Government could take the NHS at its most successful point and turn it around. Government Members have highlighted particular failings, but the NHS had a record number of doctors and nurses and a hospital building programme. There had been a transformation from waiting times of 18 months for routine operations such as knee and hip replacements or removal of cataracts to only a few weeks. The previous Government should be given some credit for that. The improvement was confirmed in patient satisfaction surveys and it is a great shame that the Government have decided not to commission the Department of Health to conduct such studies in the future. I suspect their motives in that regard.

Dr Poulter: Will the hon. Gentleman give way?

Grahame M. Morris: I give way to my hon. Friend from the Committee.

Dr Poulter: That is a good point. Under the previous Government cataract and hip operations were done more quickly, but that was because the Labour Government commissioned private providers. The unfortunate thing was that the providers cherry-picked services and did not provide the integrated health care that this Bill will provide.

Grahame M. Morris: We had this exchange many times in the Committee on a variety of clauses. We need to give some credit to the previous Government. I am old enough to remember when people routinely waited a year, 18 months or longer for life-changing operations such as knee and hip replacements. It is a real quality-of-life issue if someone has cataracts and has to wait a long time for an operation. I accept that Labour used the private sector. I am a socialist and make no apology for that, and I want the provision to be public sector. I was not a Member of Parliament and did not vote for the commissioning of private providers, but I acknowledge that the private sector played a role in bringing extra capacity and some innovation to the service.

Barbara Keeley: My hon. Friend is making a wonderful speech. I wanted to make this point when my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) was speaking about the number of operations and the improvements during Labour’s term of office.

In the 1997 general election when I was campaigning in Wythenshawe and Sale, East constituency, I met someone who had been told that he had to wait two years for vital surgery and was desperately worried that he would die while he was waiting. I met someone in my constituency in last year’s general election campaign who received a diagnostic test on Monday, found he had cancer on Tuesday, went into hospital on Wednesday and was operated on on Thursday and his life was saved. From two years to four days—I thought that was the best testament to the improvement that Labour had brought about in the NHS.

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Grahame M. Morris: I am grateful for that example. It illustrates the importance of that improvement, the value that people place on it and how critical it is to people’s health and well-being.

I know that we shall come later to the clauses that lift the cap on private patient work, which the Minister mentioned in his opening remarks. If the cap on private patient work in NHS foundation trusts is lifted and those trusts are under financial pressure—those of us who are in touch with our hospital trusts know that they are under financial pressure, with the reductions in the tariff and other issues—the level of private sector involvement in NHS trusts will increase.

Rosie Cooper: The hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is also a member of the Select Committee, pointed out that Labour reduced waiting lists and private providers were involved. Does my hon. Friend agree that the general public now face longer waiting lists and more private providers?

Grahame M. Morris: This is the danger. Labour Members have attempted to highlight it, and people are increasingly aware of it.

Frank Dobson: Does my hon. Friend accept that if we want to look at how best to increase the number of people who are treated, the best thing to do is go to the people who do the treatment? When I was Health Secretary, the NHS was doing 160,000 cataract operations a year. Following discussions with the experts, some changes were made—no structural changes—and in the last year for which figures are available the NHS did 346,000 cataract operations a year. The private sector’s contribution averaged 6,000 a year.

Grahame M. Morris: I am grateful to my right hon. Friend for putting those important statistics on the record. Government Members often raised these issues in the Bill Committee so it is helpful to have that clarified with such precision.

I want to deal in more detail with health inequalities, if that is in order, Mr Deputy Speaker. While serving on the Bill Committee and as a member of the Health Select Committee, I have always tried to champion the cause of reducing health inequalities. In the Bill Committee, Opposition Members pushed for greater duties to reduce health inequalities to be placed on the new bodies being created by the Bill.

I am conscious that there has been some movement in this direction. New clause 6 is relevant to the special administration of services and makes references to health inequalities. I would be grateful if the Minister gave some clarification in respect of the point that I wish to make. I am delighted that the Government have recognised that a market system in health care will only worsen health inequalities. My rationale in making that statement is that at least new clause 6 says that services must be kept open where closure would adversely impact on or increase health inequalities. Opposition Members are not convinced that the safeguards are strong enough, that the safeguards could not be overturned or that inherent health inequalities that areas such as mine suffer from so terribly, largely reflecting socio-economic patterns in society, would not be exacerbated.

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Jeremy Lefroy (Stafford) (Con): I have been listening carefully to the hon. Gentleman. Will he accept and welcome the fact that clause 3 imposes on the Secretary of State a duty to reduce inequalities? Is that duty not a welcome innovation in legislation that he expects the Secretary of State to apply with rigour?

7 pm

Grahame M. Morris: That is a good point. Like the curate’s egg, the Bill is good in parts—and bad in parts. I am prepared to acknowledge the commitment on health inequalities but, as I have mentioned, there are contradictions in the Bill, and that is what I seek to highlight. My concern is that the new structures proposed in the Bill move us away from a co-ordinated health service and towards a competition-based health service. Failure has been touted by Ministers as a driver of improvement, but following the latest U-turn, that commitment seems to have been dropped. I would welcome Ministers’ views on that.

Our concern is that the health service will be left to the worst elements of privatisation, without the supposed benefits of market competition. Members have referred to the British Medical Association and its calls for a co-operative and co-ordinated environment, which an open market would make impossible. When Dr Clare Gerada, the chair of the Royal College of General Practitioners, gave evidence to the Bill Committee, she raised a number of concerns about the clauses that we are discussing—concerns

“about the duplication of care and fragmentation…the under-provision of care once competition starts kicking in, the pace and extent of change, and the capability capacity and competence of GPs”

to deal with the extent of health needs. Most importantly, she said that

“the Bill risks widening health inequalities and could lead to worse patient care”.––[Official Report, Health and Social Care Public Bill Committee, 8 February 2011; c. 43, Q94.]

Julian Sturdy (York Outer) (Con): The hon. Gentleman talks about health inequalities, but does he accept that under the current system primary care trusts have brought about a number of health inequalities? Certainly in my area of north Yorkshire, the PCT has brought about a number of health inequalities, and I think that that is the case in other areas, too. The system is already delivering that; that is why we need the change.

Grahame M. Morris: The picture is incredibly variable. We should consider many of the policies that the Government are pursuing, not least that on public health observatories, which collect the evidence on which many public health interventions are based. The sustained cuts to their budgets—there is a cut of 30% this year, and 30% next year—are exacerbating the situation. Some PCTs are performing well in this regard, and some are not performing as well. If there are measures that can strengthen our performance, they ought to be welcomed.