Steve Webb (Shadow Secretary of State for Health, Health; Northavon, Liberal Democrat)

I have a couple of questions for the Minister. In line 42 there is a reference to two or more applications to provide pharmaceutical services in the same neighbourhood. Would the Minister clarify what is meant by “neighbourhood” in that context? Is it a town, a county or a PCT area? What is the scope of the clause?

I hinted at my other question during my earlier intervention. All of us would want the character of community pharmacies to be maintained. Individual pharmacies have a role, as do big chains, and where applications are made by two pharmacies, or where an application is made by a new one in the same neighbourhood as an existing one, what criteria would the Government use for determining which should be allowed to operate? Do they just wish to encourage entry and competition?

I am worried that if it is a matter of full-blooded, full-throated competition, there is a danger that community pharmacies and the services they provide, which bring something distinctive to our neighbourhoods, might be driven out of business by the chains. They can cross-subsidise, and drive out smaller pharmacies that are not able to do that, to the long-term detriment of variety, quality and customer service. Would the Minister put on record the criteria that the Department require to be used locally in deciding between competing applications in a neighbourhood? It would be helpful if she could do that and clarify what constitutes a neighbourhood.

Jane Kennedy (Minister of State, Department of Health; Liverpool, Wavertree, Labour)

One of the beauties of devolving decision making to a local level is that it allows me to stand up in Committee and say that it is for the PCT to decide what the definition of “neighbourhood” is when it is inviting applications for a particular service. That will be determined by local circumstances. On the hon. Gentleman’s other point about the criteria, to make sure I get it right I will undertake to write to him, if he will allow me. I shall circulate the letter to Committee members so that everyone can see the criteria that we intend to apply.

Andrew Murrison (Shadow Minister, Health; Westbury, Conservative)

The hon. Member for Northavon makes a fair point. There does seem to be the potential for a lawyers’ beanfeast on the definition of “neighbourhood”. In determining the matter, PCTs may decide that two pharmacies are both in a neighbourhood, but one pharmacy might say, “We are in the next town, albeit one that is very close”. There is scope to be a little clearer about what is meant by “neighbourhood”. It might be simply defined as being in one PCT area. “Neighbourhood,” although it sounds very cosy, does not seem to be sufficiently clear to avoid giving lawyers a meal ticket.

Jane Kennedy (Minister of State, Department of Health; Liverpool, Wavertree, Labour)

It has been my regular experience that in devolving decision making to the locality, very reasonable points are raised, like the ones raised by the hon. Gentleman and the hon. Member for Northavon, and I shall consider them. What constitutes a neighbourhood will be greatly influenced by local factors, but in my letter I shall flesh out our thinking on how we expect PCTs to work in relation to the definition of “neighbourhood”, if that is of assistance to the Committee.