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Lord Davies of Oldham: My Lords, the noble Earl has the right to sum up on his amendment and wind up the debate, and this is a further contribution from the Opposition Front Bench.

Baroness Noakes: Yes, my Lords, it is indeed—it is a further contribution from the Front Bench. We believe that these matters to be so important that we should outline why we believe that the Bill should be sent back to another place.

I was about to say that we expect the Minister not to take account of those on these Benches. However, I am surprised that the well expressed views of the noble Baroness, Lady Finlay—who represents the views of so many in the clinical professions involved in the NHS—have not been listened to. We believe there to be very serious flaws in the concept of foundation trusts, and it is because of that that we oppose the Bill and believe that it should be sent back to another place and considered again.

I shall cover some areas that we believe to be particularly important, to show why we believe the concept to be so flawed. Noble Lords opposite may not want to listen, but we believe it to be important that the other place hears why we do not believe that the Bill should pass and that we believe that it has flaws that should be addressed.

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I should like to address first the issue of how the finances will work. When the idea of foundation trusts was first launched, it was supposed to give flexibility to NHS trusts, to give them more access to finance. In practice, those freedoms have not been available. NHS trusts seriously wanted those freedoms because they are shackled by the double whammy of Department of Health bureaucracy and the financial constraints of the Treasury. They had no real freedoms, and they were desperate for freedoms so that they could start to borrow to develop their own delivery of healthcare for their local areas.

The idea of foundation trusts sounded almost too good to be true—and of course it was too good to be true, because the Chancellor of the Exchequer invented the zero-sum games to which the noble Lord, Lord Clement-Jones, referred. The zero-sum game means that for every pound that NHS foundation trusts borrow, the money available to the rest of the NHS will be reduced. The Chancellor will in effect be pulling the strings of the NHS in all ways, including all foundation trusts.

We believed that foundation trusts would be able to access new sources of finance in the commercial sector, but that, too, is an illusion. We learned only yesterday about the fact that they will be fully borrowed, with virtually no capacity to borrow extra from the private sector.

There is a sketchy borrowing code in the Bill, and borrowing limits that seem not to have any meaning whatever. Others have already touched on governance structures, which are deeply flawed, and do not make clear the respective roles of the board of governors and board of directors.

There are other issues in the Bill that are simply not worked out properly. The Minister constantly told us about flexibility, but flexibility really means that the Government do not know the answers. For those reasons—that they have not delivered on financial freedoms, that the government structures are weak and ill thought-out, and because there is so much detail lacking—we believe that the Bill should be sent back to the other place.

Lord Warner: My Lords, I was not intending to speak again but, having listened to some of the contributions from the Benches opposite, I cannot resist it.

The debate is taking place as though we had not spent nine days considering the Bill, and as though there had not been 200 amendments that the Government have moved or accepted, 90 of which were on foundation trusts. Those on the Opposition Front Bench seem to operate on the basis that they can rake up all the things that they have discussed over those nine days. They have not moved amendments on them; if they are so keen to get the Bill right, why have they not moved amendments on those matters and carried them through the House? We have actually

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accepted a lot of the things that they have moved, and they have withdrawn their amendments, but they continue to talk about those things as though the Government had not listened. They simply have not had the nerve to move those amendments and to put them to a vote if that is what they wanted to do.

We have had the same old story from the noble Baroness, Lady Noakes, about the zero-sum game. The Benches opposite simply do not accept the billion pounds more that have been put into the NHS in both capital and revenue. There was a zero-sum game under the administration of the Benches opposite, when people did have to queue for money. However, we are talking about a hugely enlarged pot. It has always been the case that, ultimately, both under their administration and under this Government, the pot is finite. However, this is a much bigger pot in which everyone in the NHS is sharing.

We had the dreary old story of the Scottish MPs. As I understand our constitution, all MPs in the House of Commons are equal. Perhaps the Conservative Front Bench is a bit short of Scottish MPs and that is part of its problem. We also had the same old story from the Liberal Democrats about the first foundation trust applicants being chosen on the basis of star ratings. That is simply not true. If noble Lords go back to Hansard they will see that I have said that that is not true. The Secretary of State will judge those applications on a much wider basis.

I could go on, but the brute fact is that the House of Commons has voted to reinstate Clause 1 and Schedule 1. The Benches opposite do not like it because there was a clear majority. They did their best to ensure that that majority was not sufficient. However, it is a clear majority. It is the will of the House of Commons that Clause 1 and Schedule 1 should be restored to the Bill. I urge noble Lords to let the will of the Commons prevail in this area, to reject Amendment No. 1B and not to insist on Amendment No. 1.

Earl Howe: My Lords, I want to be fair to the Government this evening. The Minister conveyed the Secretary of State's offer to conduct a review of the Government's arrangements after a period of time; that offer is certainly not to be dismissed and I do not dismiss it. I understand the offer to me that the review would precede the approval of further applications for foundation status. If that is right, then I think we ought to recognise the downside of the offer. It will serve to entrench the two-tier system for even longer than will currently be the case. If only the Government had taken the trouble to listen to people before embarking on this policy, if only they had taken their time to get the detail of it right, we would not be having this debate this evening.

Nothing the Minister has said persuades me that this House is wrong in opposing once again these deeply flawed proposals. That is why I now ask the House to accept my amendment.

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10.28 p.m.

On Question, Whether the said amendment (No. 1B) shall be agreed to?

Their Lordships divided: Contents, 169; Not-Contents, 101.

Division No. 5


Addington, L.
Alderdice, L.
Anelay of St Johns, B.
Arran, E.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Barker, B. [Teller]
Bell, L.
Biffen, L.
Blatch, B.
Bradshaw, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Buscombe, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlile of Berriew, L.
Carlisle of Bucklow, L.
Chadlington, L.
Chalker of Wallasey, B.
Chester, Bp.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Courtown, E.
Crathorne, L.
Crickhowell, L.
Cumberlege, B.
Darcy de Knayth, B.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Eccles of Moulton, B.
Elton, L.
Ezra, L.
Falkland, V.
Finlay of Llandaff, B.
Flather, B.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Freeman, L.
Gardner of Parkes, B.
Glentoran, L.
Goodhart, L.
Goschen, V.
Gray of Contin, L.
Greaves, L.
Greenway, L.
Hamwee, B.
Hanham, B.
Harris of Peckham, L.
Harris of Richmond, B.
Hayhoe, L.
Henley, L.
Hereford, Bp.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hogg, B.
Holme of Cheltenham, L.
Home, E.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Jacobs, L.
Jenkin of Roding, L.
Jopling, L.
Kimball, L.
King of Bridgwater, L.
Kingsland, L.
Kirkham, L.
Knight of Collingtree, B.
Laing of Dunphail, L.
Laird, L.
Lamont of Lerwick, L.
Lester of Herne Hill, L.
Linklater of Butterstone, B.
Liverpool, E.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell, L.
McAlpine of West Green, L.
MacGregor of Pulham Market, L.
Mackie of Benshie, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Mancroft, L.
Mar and Kellie, E.
Marlesford, L.
Masham of Ilton, B.
Mayhew of Twysden, L.
Methuen, L.
Michie of Gallanach, B.
Miller of Hendon, B.
Monro of Langholm, L.
Montagu of Beaulieu, L.
Montrose, D.
Mowbray and Stourton, L.
Naseby, L.
Newby, L.
Noakes, B.
Northbourne, L.
Northbrook, L.
Northesk, E.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Onslow, E.
Park of Monmouth, B.
Peel, E.
Phillips of Sudbury, L.
Plumb, L.
Prashar, B.
Prior, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Rees, L.
Rennard, L.
Renton, L.
Richardson of Calow, B.
Roberts of Conwy, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Roper, L.
Rotherwick, L.
Russell, E.
Russell-Johnston, L.
Ryder of Wensum, L.
Sandwich, E.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selsdon, L.
Sharman, L.
Sharp of Guildford, B.
Sharples, B.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Steel of Aikwood, L.
Stoddart of Swindon, L.
Strange, B.
Swinfen, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tordoff, L.
Trefgarne, L.
Ullswater, V.
Waddington, L.
Wakeham, L.
Wallace of Saltaire, L.
Walmsley, B.
Watson of Richmond, L.
Wedderburn of Charlton, L.
Wilcox, B.
Williams of Crosby, B.
Worcester, Bp.


Acton, L.
Alli, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Bassam of Brighton, L.
Billingham, B.
Birt, L.
Blackstone, B.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carter, L.
Chandos, V.
Christopher, L.
Clark of Windermere, L.
Corbett of Castle Vale, L.
Craig of Radley, L.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dubs, L.
Elder, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B. [Teller]
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gibson of Market Rasen, B.
Gilbert, L.
Golding, B.
Goldsmith, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greengross, B.
Grenfell, L.
Hannay of Chiswick, L.
Harris of Haringey, L.
Harrison, L.
Haskel, L.
Hayman, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howells of St. Davids, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Jay of Paddington, B.
Jones, L.
Judd, L.
Kennedy of The Shaws, B.
Kilclooney, L.
Layard, L.
Lea of Crondall, L.
Lockwood, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mallalieu, B.
Massey of Darwen, B.
Mitchell, L.
Morgan of Huyton, B.
Morris of Aberavon, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Powell of Bayswater, L.
Radice, L.
Randall of St. Budeaux, L.
Rees-Mogg, L.
Rooker, L.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Simon, V.
Smith of Leigh, L.
Stone of Blackheath, L.
Taylor of Blackburn, L.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Turnberg, L.
Warner, L.
Warwick of Undercliffe, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williamson of Horton, L.
Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

19 Nov 2003 : Column 2025

10.39 p.m.


4Clause 3, Leave out Clause 3 and insert the following new Clause— "General duty of the regulator

    The regulator must exercise its functions in a manner that—

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