Clause 1 — NHS foundation trusts

Part of Health and Social Care (Community Health and Standards) Bill – in the House of Commons at 4:30 pm on 19 November 2003.

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Photo of Kenneth Clarke Kenneth Clarke Chair, Tax Law Rewrite Bills (Joint Committee), Chair, Tax Law Rewrite Bills (Joint Committee) 4:30, 19 November 2003

I must admit that I had some hopes of the new Secretary of State when he took over his responsibilities. I thought that he would continue in the direction of reform and modernisation that has just been welcomed by Mr. McCabe. Since the Labour party first came to office—after a rather regrettable two years of reaction under Mr. Dobson, of which he is proud—it has moved steadily in the direction of combining finance for the health service with radical reform. I thought that the Secretary of State might take that forward.

It is therefore a matter of considerable regret that, at a comparatively early stage in the Secretary of State's period of office, he has got himself into a terrible mess on the agenda of reform. He finds himself in a difficult debate before the House, defending a dog's breakfast that seems to have brought against it an amazing combination of opponents. It is not often that Mr. Hinchliffe and myself are on the same side in a health debate, but we both think that what the Secretary of State has produced is nonsense and that he should go away and think about it again.

Let me assure the Secretary of State and the hon. Member for Wakefield that I remain totally committed to the idea of a free national health service that is based on equal access to treatment for all patients and financed largely out of taxation, and I will not waiver from that. For more than 20 years, I have been accused, as has my party, of having a secret agenda to undermine that, but our entire period of office demonstrated that we never moved one iota in that direction. I will be bitterly opposed to any suggestion that we should move in that direction now. I do not believe that we will.

The principles underlying reform should unite certainly those on both Front Benches in this House. We all now profess a belief in patient choice. Far be it from us to dwell on the bitter opposition to that proposition that the Labour party used to evince. We all propound the benefits of diversity of provision of health care from the public, private and voluntary sectors. I echo what my hon. Friend Mr. Yeo said, as I was the Minister of State who saved Tadworth Court and allowed it to go the private trust. It is a demonstration of how what was described as a failed hospital has now become a beacon of excellence because of the way in which an independent trust was able to develop it. We actually believe that with properly directed patient choice, a certain amount of competition among providers will lead to improvements to the quality and efficiency of the service.

Foundation hospitals could have marked a considerable step forward, and at times I thought that they would. I regret that I have not looked up my voting record but I think that I abstained when the measure came before the House in July. I shall not speak for my hon. Friend Mr. Lansley, who I am glad to say is our new shadow spokesman on health, but I suspect that he would have been considerably embarrassed if the Government had introduced measures to give effect to the local independence, liberalisation of the service and decentralisation that the Secretary of State said formed such a key part of his proposals. In fact, however, the Government have not persuaded people who believe in those things.

Many Members of the House of Lords would have moved in favour of the Government if they had delivered on what appeared to be the objectives of foundation hospitals. They would lose many Conservative opponents today—they might lose the lot of us—if they introduced genuine decentralisation for foundation hospitals, because we would support them. However, they have made half-baked concessions to the Labour Members who have been intervening on speeches for the past two hours, so they have wound up with the worst of all possible worlds. The Bill will not create an important new type of institution with the ability to exercise more local control in the service. It will create a body with a strange construction that will be even sillier than Network Rail, which is a precedent for the non-profit-making and accountable bodies to which the Labour party seems to be converted. The Government have not satisfied the dinosaurs who want to go back to the old NHS, and they certainly have not satisfied sensible reformers here, in another place, or in bodies such as the King's Fund, which is totally non-political and would certainly support any sensible modernising agenda.

Other hon. Members want to speak and share my frustration, so let me say why the Government have failed to win support and why I am convinced that the measure must be opposed. We must consider the role of the regulator. The Bill is covered with the regulator's constraints over the powers of new foundation hospitals. The regulator will have considerable control over their borrowing. I have some sympathy with the previous Secretary of State, Mr. Milburn, who first introduced proposals for foundation hospitals. He lost the same battle with the Treasury that I lost when I was planning the precursors of NHS trusts. I wanted the most successful parts of the service to have the freedom to borrow and raise capital so that they could respond to rising demand. The Treasury turned me down. When I got to the Treasury, as Chancellor, I found that the Government were so battered over reform that no one wanted to change the system any more, so I was not able to reverse the decision. [Interruption.] The Labour party was accusing us of privatisation at the time, so my successor as Secretary of State for Health did not dare say that hospitals should be allowed to go to the private markets, because the present Secretary of State would have been in the vanguard with the hon. Member for Wakefield saying how dreadful it would be to privatise the service in such a way if that had happened.

The right hon. Member for Darlington had a go, but he failed. If hon. Members look at the way in which the new foundation hospitals will be constrained when raising capital, they will see that the situation is a complete nonsense that is made worse by the fact that when they get approval to borrow and make capital investment, it will be at the expense of the rest of the national health service. That point has been repeated by hon. Members on both sides of the Chamber, but the Secretary of State has not responded to it.

The cap on income from private practice is reminiscent of Barbara Castle. I cannot understand why on earth NHS hospitals should not be allowed to raise more income by attracting private practice and why doctors who carry out such practice should not do that in the NHS hospitals in which they work—it is a ridiculous constraint.

After listening to the debate, I do not understand quite how constrained the hospitals will be by national pay agreements. It seems that if a left-wing Member makes an intervention, the House is assured that hospitals will be bound by "Agenda for Change" and national pay terms and conditions, but if a Conservative or Liberal Member makes an intervention, there is a suggestion that they may move away from that a little. The NHS should not be in a straitjacket of national terms for pay and conditions regardless of regional and local needs. The management of the service would be improved if foundation hospitals had more discretion.

I do not have time to deal in detail with the elected boards of governors, but they are an appalling idea. With a membership that has yet to be defined, they will be elected on a tiny turnout. They may be dominated by the trade unions, or the membership will vote for local party politicians or various special interest groups, such as pro-life groups. That is not democracy. It is a ridiculous way to establish a system of governance for a local service.

I agree with those who say that we are too obsessed with hospital management. The commissioning side of the service—