'(1) In the National Health Service Act 2006 after section 52 insert-

"52A Application of sections 52B to 52E

(1) Sections 52B to 52E apply to-

(a) an NHS foundation trust authorised under section 35 on an application under section 33;

(b) an NHS foundation trust established under section 56 to which subsection (2) applies.

(2) This subsection applies to an NHS foundation trust if-

(a) at least one of the trusts on whose application the NHS foundation trust was established was an NHS foundation trust within subsection (1)(a), or was an NHS trust all or most of whose hospitals, establishments and facilities were in England, or

(b) the NHS foundation trust is the result of a succession of mergers under section 56, any of which involved an NHS foundation trust within subsection (1)(a) or an NHS trust all or most of whose hospitals, establishments and facilities were in England.

52B De-authorisation: regulator's notice

(1) The regulator may give the Secretary of State a notice under this section if it is satisfied that-

(a) an NHS foundation trust to which this section applies is contravening or failing to comply with, or has contravened or failed to comply with, any term of its authorisation or any requirement imposed on it under any enactment, and

(b) the seriousness of the contravention or failure, or, if there has been more than one, of any of them taken together, is such that it would justify the Secretary of State making an order under section 52D.

(2) The notice must be in writing.

(3) With the notice the regulator must give the Secretary of State a report stating the reasons why it is satisfied as mentioned in subsection (1).

(4) Before giving a notice under this section, the regulator must consult first the Secretary of State (unless the notice follows a request by the Secretary of State under section 52E) and then-

(a) the trust,

(b) any Strategic Health Authority in whose area the trust has hospitals, establishments or facilities, and

(c) any other person to which the trust provides goods or services under this Act and which the regulator considers it appropriate to consult.

52C Grounds for de-authorisation notice

(1) In determining under section 52B(1)(b) whether the making of an order would be justified, and in determining whether to give a notice under that section, the regulator must consider these matters (among others)-

(a) the health and safety of patients;

(b) the quality of the provision by the trust of goods and services;

(c) the financial position of the trust;

(d) the way it is being run.

(2) The regulator must publish guidance as to the matters (including those mentioned in subsection (1)) that it proposes to consider in making those determinations.

(3) Before publishing any guidance under this section, including any revised guidance, the regulator must consult-

(a) the Secretary of State,

(b) each NHS foundation trust to which this section applies,

(c) each NHS trust intending to make an application to become an NHS foundation trust, and

(d) such other persons as the regulator considers appropriate.

52D De-authorisation

(1) If the regulator gives notice under section 52B in relation to a trust, the Secretary of State must make an order for it to cease to be an NHS foundation trust.

(2) An order made under subsection (1) must specify the date when it is to take effect, which must be within the period of 5 working days beginning with the day on which it is made.

(3) On an order under subsection (1) taking effect in relation to a body, it ceases to be an NHS foundation trust and a public benefit corporation and becomes a National Health Service trust.

(4) The order must specify, in relation to the trust, the matters mentioned in paragraph 5(1)(a) to (c) of Schedule 4 and, where the trust has a significant teaching commitment, the matters mentioned in paragraph 5(1)(d).

(5) The order may provide for any provision under subsection (4) specifying the number of executive directors and non-executive directors to take effect at the end of a period specified in the order.

(6) Schedule 8A makes further provision about trusts in respect of which an order is made under subsection (1).

(7) If it appears to the Secretary of State to be necessary in order to comply with provision made under subsection (4), or made by regulations under paragraph 4 of Schedule 4, the Secretary of State may by order-

(a) terminate the office of any executive or non-executive director of the trust;

(b) appoint a person to be an executive or non-executive director of the trust.

(8) Within seven days after the day on which the Secretary of State makes an order under subsection (1) the regulator must publish its report under section 52B(3).

(9) In this section "working day" means any day which is not Saturday, Sunday, Christmas Day, Good Friday or a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971.

52E Secretary of State's request

(1) If it appears to the Secretary of State that there are grounds for the regulator to be satisfied as mentioned in section 52B(1), the Secretary of State may request the regulator in writing to consider exercising its power to give a notice under that section.

(2) A request under this section must-

(a) specify the NHS foundation trust to which it relates, and

(b) state the grounds relied on by the Secretary of State.

(3) The Secretary of State must lay before Parliament any request under this section.

(4) If within the required period the regulator does not give a notice under section 52B in response to a request under this section, it must, within that period, publish its reasons for not doing so with a statement as to how it has complied with section 52C(1).

(5) The required period is-

(a) 14 days beginning with the day after the regulator receives the request, or

(b) any longer period specified in the request.

(6) The Secretary of State may by order extend or further extend the required period."

(2) Schedule 2 (which inserts Schedule 8A to the National Health Service Act 2006, which makes provision about de-authorised NHS foundation trusts) has effect.'.- (Mr. Mike O'Brien.)

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following:

New clause 11- Notification of Care Quality Commission special reviews and investigations-

'(1) The Health and Social Care Act 2008 is amended as follows.

(2) In section 39 (bodies required to be notified of certain matters) after subsection (2)(d) insert-

"(e) an investigation under section 48 (special reviews and investigations)."'.

Government amendments 21 to 37. [ Interruption. ] I appeal to Members who are leaving the Chamber to do so quickly and quietly to allow for orderly transition to the next business.

I rise to move Government new clause 13. This amendment would insert the new clause into the Bill to enable a designated mental health NHS foundation trust to earn up to 1.5 per cent. of its total income from income that it derives from private charges. The new clause also contains a definition of mental health foundation for that purpose.

In the course of the Bill's passage through Parliament- [ Interruption. ] Sorry, Mr. Speaker, I am afraid that my speaking notes are not in the right order. I apologise for that. They have just been reorganised, and I think that those who reorganised them did so somewhat more efficiently than they should have. Let me move to new clause 12 and Government amendments 21 to 37.

The Mid Staffordshire Foundation NHS Trust failed its patents and the national health service. Members will be well aware of the history of that case, the House has debated it at length and I am grateful to many hon. Members, from all parts of the House, who during the past year have drawn our attention to the issues at Mid Staffordshire. We have to learn the lessons from that case and ensure that such events cannot take place again. The report of Dr. David Colin-Thomé, the national clinical director for primary care, contained a number of recommendations that are being taken forward, including better co-ordination among both the regulators themselves, and among the regulators and the primary care trusts and strategic health authorities.

Will the right hon. and learned Gentleman give way?

I shall, but I am just introducing the issue.

I am very grateful. On that particular point, following the dreadful events in Staffordshire did the Minister issue to the strategic health authorities throughout Britain a lessons-learned document or any other instructions?

Dr. David Colin-Thomé undertook a report on the issue, so a full report on the lessons to be learned was issued throughout the national health service. It was not issued as a ministerial directive; it was more a clinical examination of the issues that had arisen. We have now started an inquiry into the details of what happened locally in the trust. The inquiry is hearing evidence and will, we hope, report towards the end of this year or the start of next. I hope that that deals with the hon. Gentleman's point.

Improvements have been made: for example, Monitor has formalised and improved its contact with the Care Quality Commission, which needed to be done; and, working with the CQC and Monitor, we are tightening up the quality requirements for aspirant foundation trusts.

The amendments act on just two of the many lessons that we have learned from Mid Staffordshire. First, foundation trust status should not be seen as a one-way ticket. That is an important message which we need to put out off the back of the Mid Staffordshire incident. Secondly, transparent democratic accountability is vital when a foundation trust fails. Members want to know what Ministers will do to sort out the problem, and on that issue there were clearly some difficulties.

Will my right hon. and learned Friend ensure that foundation trust board meetings are held in public? At the moment, the vast majority are held privately and therefore do not reassure the public that there is transparency in foundation trusts as currently constituted.

There will clearly be variation in the work that trusts-whether foundation or, indeed, non-foundation-are able to conduct in public and in private. Some of their work is about contracts, including which contracts they are going for and how they make judgments and arrangements in relation to them, so some matters are commercially confidential. However, we need to ensure that trusts-whether foundation or non-foundation-are accountable publicly, so as much as possible should be in the public arena.

I agree with my hon. Friend as far as that is concerned, but let me say this: the foundation trust model is a key plank of reform, allowing greater freedom and autonomy to those who can demonstrate high performance. FT status is a hard-earned privilege and an incentive to drive up quality, innovation, productivity and local accountability. When an FT has failed to live up to that standard and public confidence has been damaged, it is in our interests to ensure that the privileges of FT status are withdrawn. When I say "in our interests", I am talking about the interests of the public as a whole in ensuring that the foundation trust brand justifies giving such freedom and responsibility.

Will the Minister give an assurance to the rest of the foundation trusts that what happened in Stafford cannot be repeated across the rest of the country? What audit has he carried out to ensure that?

We have set up the Care Quality Commission, whose job it is to ensure that standards in the trusts across the health service are high. The commission can look at how such standards are operated. Furthermore, Monitor, the organisation that oversees the foundation trusts, is responsible for ensuring that the overall operation of the brand is of high quality.

rose-

I shall give way, but there is a lot to get through today and I want to make progress after my hon. Friend's intervention.

My right hon. and learned Friend mentioned the use of Monitor, but would it not be common sense for the organisation that oversees NHS hospitals to oversee foundation trusts as well? The fact is that Monitor does not oversee both; perhaps there would be better similarities if only one organisation investigated.

I take my hon. Friend's point, but in a sense the Care Quality Commission will be considering the quality of the NHS as a whole; it will examine particular trusts and particular issues in relation to trusts where it needs to do so. Monitor's role is different: to oversee foundation trusts and to ensure that that brand of independence, identity and accountability demonstrates good standards.

The amendments need to be viewed in the context of Monitor's existing powers of intervention under the National Health Service Act 2006 and the de-authorisation proposals already in the clauses relating to trust special administrators. The 2006 Act gives Monitor wide powers to intervene on an FT in the event of a significant breach-the word "significant" is important-of the terms of authorisation. Monitor has a range of powers, including removing any or all of the directors of the board or requiring the board of an FT to do, or not to do, specific things. The clauses relating to trust special administrators already enable Monitor to trigger de-authorisation of a foundation trust that is no longer sustainable-again, an important word-in its current form. That is as a preliminary to the de-authorised trust coming under the control of a trust special administrator as part of a clearly defined six-month process.

The proposal under consideration today is a further, distinct piece of the jigsaw. It enables Monitor to trigger de-authorisation when-and this is very rare-a sustainable FT has breached any term of its authorisation or a statutory requirement and the breach is so serious that it justifies that step. A power to de-authorise makes it clear that foundation trusts must maintain the high standards expected of them and gives a strong signal to the public that organisations must earn the right to continue as foundation trusts. A de-authorised foundation trust would become an NHS trust under the Secretary of State's powers of direction. As with the clauses relating to trust special administrators, transitional arrangements would be put in place to allow the continuation of commercial arrangements entered into using FT freedoms and to ensure continuity of services for local people; that was particularly important in relation to Monitor.

Triggering de-authorisation is a complex decision. I make no apologies for the complexity of the process, which is about balancing the freedoms and independence of the FT network with the need for democratic accountability. The amendments establish a framework requiring that Monitor considers the health and safety of patients, the quality of services that are provided, the financial position of the trust and the way in which it is being run. To ensure full and proper consideration of this issue, the amendments propose that Monitor be required to publish guidance setting out in detail the factors that it will take into account. It is also important that before triggering a de-authorisation, Monitor consults key stakeholders to get their views. Accordingly, the amendments require Monitor to consult the Secretary of State, the trust, the appropriate strategic health authority and relevant commissioners of the trust's services. That mirrors the process relating to trusts' special administrators.

In addition to highlighting the need for such a de-authorisation process, the Mid Staffordshire experience highlighted issues of democratic accountability. While Monitor is responsible for the regulation of foundation trusts, the Secretary of State is ultimately accountable to Parliament for the overall provision of NHS services. Monitor's operational independence is a vital component of the regulatory framework, and one that we should seek to maintain, but when considering the most serious risks to patients the Secretary of State should have the ability at least to express formally his view. To enable that, the amendments propose that the Secretary of State will be able to request formally that Monitor considers de-authorising a foundation trust. In such a situation, it will be vital that the Secretary of State and Monitor are able to act quickly and transparently.

We therefore propose that if Monitor believes that a differing course of action is preferable, it will be required publicly to explain its decision, either within a default of 14 days or within such further time as the Secretary of State deems appropriate to the particulars of the case. If there is a case for a longer period, Monitor may ask for that and the Secretary of State will be able to consider it and take a view as to how long it should be.

I speak as a governor of an acute hospital trust. At what stage does the Minister believe that Monitor should be talking to governors, and what time frame should governors have to consider some of the internal operations of the trust? There is not much point in being a governor if the first thing that happens is the disempowering of their role in any such questioning of the trust. Where do the governors come into this arrangement?

Monitor will have to publish guidance on how it will carry out the process, as well as the criteria that it will use. How that is done will be the subject of further discussions between Monitor and the various trusts and/or interested parties, including the Secretary of State. Our view is that if Monitor decides that the way in which a trust has behaved means that it has to go through the process of considering whether that trust should be de-authorised, Monitor will need to carry out appropriate consultation, and it may well be that governors are appropriate people to consult.

The Minister will know from our consultations on the sad episode in Stafford that I have sympathy with his view that Monitor should be able to take sanctions against a defaulting trust. However, having listened to what he has said I am a little worried that the process will be vague and cumbersome. What can he do to reassure me on that?

We have discussed the process with Monitor and made it clear that we want it to be relatively quick. The hon. Gentleman will know from his experience as a Staffordshire MP that there were concerns about how that matter was dealt with and the speed. We therefore need to ensure that there is sufficient time to deal with the issues so that Monitor is able to receive a request from the Secretary of State, in that particular part of the process. The Secretary of State will determine whether he believes that the situation requires such a request. Monitor will then have 14 days-it will be able to apply for more time if it wishes-to take a view as to whether de-authorisation is the appropriate process. If it decides that it is not, and that it can deal with the matter by taking various steps, it will say so and have to set out its reasons.

If Monitor takes the view that de-authorisation is necessary, there will be a further stage in the process. We must not get mixed up about which stage we are talking about. At that stage, Monitor will be able to consult governors, the relevant strategic health authority and the various other parties that are directly affected, including the commissioners for the trust involved.

I make no apologies for the fact that the system is complicated, but in practice, given the urgency and rareness of the situation in question, we need to be able to deal with problems expeditiously. It is important to make the point that, thankfully, we do not expect situations such as that in mid-Staffordshire to arise with any regularity. On the contrary, we believe that the process will be very, very exceptional. However, the criteria need to be set out on which each party that has to make decisions, such as the Secretary of State and Monitor, can do so. The speed at which decisions can be made and the various consultations involved will be allowed for in the process, because various organisations have an interest in the matter.

I should like to reinforce the point that has just been made about the need for decisive action if we have another catastrophe such as that in Staffordshire, which I hope we do not. The frustration in that case, knowing the enormity of what had happened, was the delay in doing anything about it, and particularly the inability quickly to put in a new chief executive and top staff to clean up the place. This machinery sounds rather elaborate; I want to know that it will enable the Department of Health and Ministers to get in and sort the thing out immediately.

The important point is that the system will keep Monitor as the decision maker in the process. Monitor will still have the role of making a decision, but it will have to explain and justify in a public forum why it reached it. I understand from advice that Monitor is comfortable with the position that we have reached. It has gone through the process with us and considered the matter, and it can understand why we feel that in certain circumstances, when a serious case arises, Ministers need to be able to make a request to it. It will then make a decision whether to de-authorise, after which the trust will be in a position in which Ministers can take action quickly.

My hon. Friend will recall that what happened in the case of Mid Staffordshire, with reasonable speed, was that as soon as the report came out Monitor acted to put in place temporary managers. One problem, as he will recall, was that the chief executive, who by all accounts was a talented individual, was part-time and was also working elsewhere for another hospital. That was not satisfactory in the view of much of the public in Stafford, and various local MPs, including my hon. Friend Mr. Kidney, made representations expressing the view that we needed to put in place new, full-time management, particularly a chief executive. Through discussions with Monitor, we were able to ensure that that happened. My hon. Friend Dr. Wright will be aware of the detail of the process, so I do not need to outline it. If my hon. Friend is asking whether Ministers will be able to crash into the whole process, yank out a trust and say, "You are no longer a foundation trust, and as a Minister I am going to do this", the answer is no. Ministers will not have that power, but they will work through Monitor to see whether there is a way of ensuring that the best approach is taken.

Will the Minister give way?

I will give way briefly, but I am reaching a conclusion. If the hon. Gentleman insists that he wants me to give way, I shall do so.

The Minister will recall that the intervention by Monitor took place on the same day as the publication of the Healthcare Commission's report on Mid Staffordshire NHS Foundation Trust. The same thing happened in relation to Maidstone and Tunbridge Wells NHS Trust. Given that the Secretary of State, not Monitor, was responsible for the scrutiny and oversight of Maidstone and Tunbridge Wells NHS Trust, what action did the Department take that was different from the action that Monitor took on Stafford?

Clearly, it was much easier for the Minister to take action directly with regard to Maidstone, which was not a foundation trust-to deal with the problem as soon as we had looked at the detail of the evidence that was presented. The Department took action on Maidstone.

That is not the point.

The hon. Gentleman can stand up and give his response rather than sitting chuntering from the Front Bench. If he wants to ask a question, I will happily give him an answer, but if he just wants to dismiss it and chunter, that is up to him. I am not sure that it is the best way of dealing with arguments, but there you go; it is the way he does it.

I shall now deal with new clause 11, which was tabled by the hon. Members for Eddisbury (Mr. O'Brien) and for Hemel Hempstead (Mike Penning). It seeks to ensure that when the Care Quality Commission undertakes an investigation or special review into a particular aspect of care pursuant to section 48 of the Health and Social Care Act 2008, relevant bodies are informed. In the case of an investigation or review of NHS services, that would mean informing the relevant primary care trust, strategic health authority and Monitor.

I understand the concerns behind the new clause and I am very sympathetic to its aim; in principle, there is no great difference between us. However, an amendment to that effect is not necessary because the intended purpose is already covered under formal agreements that the CQC has made with Monitor and the SHAs. There is a shared view about what should happen, but I am concerned about some of the drafting problems with new clause 11. I could go into those problems, although there is no great difference between us on what the hon. Member for Eddisbury wants to happen and the various levels of contact.

The CQC can carry out an investigation when it has evidence that suggests a serious problem, which may be putting patients at risk. Under the 2008 Act, it also has new, more powerful enforcement powers, which it will be able to use to tackle serious service failings, such as those in the Mid Staffordshire NHS Foundation Trust. The CQC always informs SHAs when an investigation is carried out. That is clearly set out in a memorandum of understanding that has been signed by the CQC and the SHAs. In almost all cases, the CQC would also question the relevant SHA and PCT as part of its investigation. It would therefore be well aware of what was going on.

The CQC also informs Monitor of an investigation involving NHS foundation trusts. Section 70 of the 2008 Act places a duty on the two regulators to work together. A legal duty therefore already exists. A memorandum of understanding between the two regulators states that, in carrying out their regulatory functions, the CQC and Monitor will inform each other as soon as reasonably possible of any matters that may require action or a response from the other. That includes notification in advance where that is appropriate. Therefore, in the case of investigations, the formal agreements that the CQC has in place with the SHAs and Monitor would provide for the notification that the amendment seeks to achieve. We know from experience that the CQC will also publicly announce any new investigation, and will involve all key stakeholders. I hope that that reassures the hon. Member for Eddisbury that we do not have a big difference in principle. We have already achieved what he and I would like through the agreements that have been made and the legal duty to co-operate in the 2008 Act, which is in place. I therefore do not believe that we need new clause 11.

Amendment 25 seeks to correct a minor drafting error in clause 18(8)(b), which lists orders that are not subject to any statutory procedure. The other orders made in connection with trust special administrators are not subject to any statutory procedure and an order made under subsection (5) of proposed new section 65L should also have been included in the list. That makes the drafting consistent with the Government's original intention, which was approved by the House of Lords Committee on Delegated Powers and Regulatory Reform.

Foundation trust status and its regulatory framework have brought significant benefits for patients. We want to continue and enhance those benefits, and to encourage more movement towards foundation trusts. However, the Government new clause and amendments will fill an important gap in the current regulations, to enable some of the issues that arose in the wake of the Mid Staffordshire debacle to be dealt with by Monitor and, in due course if necessary, by the Secretary of State. They also ensure that we can help to protect patients on the very rare occasions when a foundation trust fails its local population.

In addition to addressing Government new clause 12 and speaking to their amendments, I shall address new clause 11, which was tabled by my hon. Friend Mike Penning and I.

Before I address the substantive points, I want to place on record how disappointed I am that the Government have seen fit to make this serious group of changes to the Bill at this very late stage. They are introducing three new areas to what is already a portmanteau Bill. There is little reason why the measures could not have been introduced in Committee. I am sure that the whole House, particularly Back Benchers, will be disappointed that the debates that they wished to have are being squeezed by the Government's last-minute legislating.

Government new clause 12 introduces five new sections to the four clause part of the National Health Service Act 2006 that deals with failing NHS foundation trusts, as we have just heard. The new sections give Monitor the power to give the Secretary of State a notice recommending de-authorisation on the following grounds:

"the health and safety of patients...the quality of the provision by the trust of goods and services...the financial position of the trust" and

"the way it is being run".

The measures give the Secretary of State the power to de-authorise within five working days of such a notice being received, and the power to recommend to Monitor that it give a notice recommending de-authorisation. If Monitor does not give such a notice, the Secretary of State will have the power to ask it to provide a written report as to why not. The other measures are consequential amendments.

The reason for the changes, as was made clear in the Secretary of State's letter to the shadow Secretary of State, my hon. Friend Mr. Lansley, is the Government's somewhat less-than-adequate response to the tragic events at Mid Staffordshire. Indeed, that response was, in part, the result of the absence of a transparent failure regime, which was promised in 2003 but is still not forthcoming.

As it happens, as shadow Minister for the Potteries as well as a shadow Health Minister-Stafford is of key interest to all people in Staffordshire, and above all to everyone in Stafford-I have been closely involved with events since the damning report into the hospital, as have my hon. Friend and the Leader of the Opposition. We must remember that at the heart of the issue is the avoidable deaths of up to 1,200 people. Each of those deaths leaves family and friends with a heavy burden of grief, which is only intensified by the serious questions that need answering. Furthermore, the deaths can only be indicative that many hundreds more patients did not receive the treatment that they deserved and that they rightly expect in our NHS. Before going any further, therefore, we must take a moment to remember all those who have suffered and those who continue to suffer because of the failings at the Mid Staffordshire trust.

Although that need not be a party political matter, sadly there is a choice. The Government are unwilling to have the bright glare of a full public inquiry shine on that appalling scandal, and I pay tribute to my hon. Friends the Members for Stone (Mr. Cash) and for South Staffordshire (Sir Patrick Cormack) and to our party's candidate for Stafford, Jeremy Lefroy, who have campaigned hard for a public inquiry. The Conservatives supported such an inquiry and continue to do so, but the Labour party, including Mr. Kidney, who is now a Minister, opposed it. Jeremy Lefroy has worked hard, along with Cure the NHS, a coalition of deeply concerned people, to call the Government and local bodies to account.

Under existing legislation, the Secretary of State can by order transfer the property and liabilities of the trust back to himself, among other bodies, so there is already a process of de-authorisation. The Secretary of State's hubris lies in one sentence of his letter on the amendments, which states:

"Whilst we have a rigorous system of authorisation, we have no corresponding process to de-authorise."

Could this set of late amendments be a cloak to cover the embarrassment of the Secretary of State and Ministers? Is it, at best, window dressing or, at worst, an attempt to shut the stable door after the horse has bolted? To decide whether the new clause has any merit, we have to examine not only the effect, but the motives that lie behind it.

The simple fact is that the problems at Mid Staffordshire were not the result of a failure by Monitor or, in fairness, by the Secretary of State in his informal oversight of the trust. They were almost entirely due to existing problems in the trust that were ignored during the so-called "rigorous system of authorisation" and the flawed policies of the Government that put targets and bureaucracy before professionals and patient care. The Minister may have quoted the findings of the Colin-Thomé and Alberti reports, but, as has been shown in this Chamber and elsewhere, those reports are both flawed. Neither is independent of a civil service that has seen the chief executive of the Shropshire and Staffordshire strategic health authority become the chief executive of the NHS.

The subsequent chief executive of the West Midlands SHA, Cynthia Bower, has become the chief executive of the Care Quality Commission. She raised mortality rates only once in her routine briefings to the board, and only in relation to the Healthcare Commission's announcement of its intention to investigate Mid Staffordshire in March 2008. On that occasion, she stated that

"there appeared to be nothing to indicate that anything out of the ordinary was taking place on mortality".

Board minutes show that performance is consistently measured in terms of meeting Government targets on waiting times and finance, and that the chief executive officer's briefings invariably focused on the latest strategy from the Department of Health. Neither report interrogates the Government's target culture, explains why the National Patient Safety Agency failed to alert anyone at any level about the high mortality rates or addresses the impact of the cull of the independent-and thus trusted-community health councils in favour of the in-house NHS patient and public involvement forums. Nor do they scrutinise, beyond the warmest and most meaningless words, the ability of local involvement networks, or LINks, to combat such problems in future. We pressed that point, to no avail, in Committee.

Neither do the reports explore the fear culture that silenced nurses at the trust, which was almost the most unfathomable aspect of the episode for anyone who understands nurses. Neither report looked at the impact on the trust of trying to comply with the European working time directive nor examined the role that practice-based commissioning, a flagship Government policy, played in divorcing GPs from the secondary care that their patients were receiving.

Most worryingly, neither report explained why the trust got through the so-called rigorous authorisation process. The House will know that the Secretary of State alone can authorise a foundation trust. He takes advice from the applications committee, but he is not obliged to follow its advice. However, the Secretary of State's predecessor has not apologised for the decision in this case, or explained where the process went wrong.

There are other, potentially suspect, motives. The response to the consultation states that

"some concerns were raised about the use of a public confidence test when the Secretary of State is deciding whether to request interventions. Monitor does not believe the test is appropriate, feeling it risks dragging the Secretary of State into any situation with media interest. Others are concerned that this could risk intervention being based on media perception rather than evidence."

This is not the first time that we have seen the Government make public relations the prime motive for policy. Within this Bill, the regulatory impact assessment on trust special administrators lists in its summary that the first key non-monetised benefit is "maintaining public confidence", and suggests that a public perception that nothing was being done could be damaging to the organisation. The first considered monetised cost is, tellingly, "public perception/media handling".

Why is the new clause flawed?

I see some merit in some of the points that the hon. Gentleman makes, but I do not understand why he seeks to exonerate Monitor from criticism. It was entirely concerned about finance, not about the standard of patient care.

I am grateful to the right hon. Gentleman for that, because my answer to his point enables me to say, first, that I am not aware of any evidence that Monitor was informed by the Care Quality Commission and, secondly, that our argument is that Monitor should be strengthened. That would have enabled it, had it been told, to take appropriate action. Despite the denial, in terms, in the Secretary of State's letter, our concern is that what may lie behind the new clause and the Government's amendments is a cooling-off of their enthusiasm for the foundation trust model and its independence. We therefore want to ensure that that is made clear, although I suspect that that might be more welcome to the right hon. Gentleman than to those on his Front Bench.

There has been a good deal of discussion about the Mid Staffordshire NHS Foundation Trust, although I do not intend to go down that route now. However, in the context of the points made about Monitor, does my hon. Friend accept that some of us believe-I have said this in a reply to a letter that I received from the Minister-that although there is a case in certain circumstances for the Secretary of State to put pressure on Monitor, there are also occasions on which he should completely override it and take the powers to himself to take the necessary action to disband a trust? That may not be what my hon. Friend wants me to say-I am not sure.

What my hon. Friend is seeking, from those on both sides of the House, as well as from all those who have any responsibility for ensuring that the architecture is robust enough to deal with the sort of problems that arose so tragically for his constituents, is that there should be an ability, with information and evidence, for early intervention and then immediate action, which would enable somebody to have the powers to get the thing under control before it is too late. That must ultimately be the lesson. The question therefore must be: what is the best architecture for achieving that? Towards the end of my contribution I will say why we have proposed our new clause 11, which may help my hon. Friend to understand why we have proposed what we have proposed.

I want to be clear about the hon. Gentleman's answer to Mr. Cash. Does he believe that if the situation was very serious, there should at some stage be the ability for de-authorisation, so that the Minister could intervene and take control in order to deal with the problems that had arisen?

We have been clear about the position, which is that if there is a serious failure, there must be the ability to make an early intervention. Broadly, in our view Monitor ought to be the body that can put in new management quickly and take the necessary powers, but under the Government's approach, Monitor has ultimately been a financial regulator rather than the overall regulator. That is why we have urged the Government to increase Monitor's powers, which would give it the retained independence.

Let me move on. The Government's proposal has compromised the independence of foundation trusts and given the Secretary of State more incentive to meddle in them and potentially to play politics with them and the NHS. As even the response to the consultation document admits, Monitor expressed concern that, as framed, the proposals in the document did not adequately reflect the principles of Monitor's independence or of transparency. In addition, foundation trusts disagreed or strongly disagreed with the proposal, arguing that the process of de-authorisation would be detrimental to patients, staff and visitors. Some FTs questioned what the removal of FT status would achieve, considering the existing mechanisms to turn around hospital performance.

As an aside, in the rushing through of the legislation, it has not been possible to see the responses to the consultation, only the Government's collation of them, which does not aid transparency. We have to ask: what have they left out? We are entitled to know.

We could ask why the Secretary of State is pushing what some have described as reactionary legislation. What is clear is that it does not appear to be about patient care. That is why the shadow Secretary of State said that there was a big question mark over wanting to bring everything back under the Department of Health, as though it might be any better than Monitor at doing something about such problems or anything else that might have been proposed, because the only direct parallel from which we can draw evidence of a similar situation is Maidstone and Tunbridge Wells NHS Trust. Despite what the Minister said, the Department did nothing when the trust came under its gaze. There is therefore a real absence of confidence that the Department stands any chance of being any better at dealing with the processes. The question therefore has to be how we strengthen Monitor and the other processes.

The impetus behind the new clause is clear from its wording, which includes phrases such as

"the regulator must consider these matters (among others)...the way it"- the trust-"is being run" and

"the Secretary of State may request the regulator in writing to consider exercising its power to give a notice".

The new clause reads very much as though it has been written not by a lawyer, but by somebody who has PR concerns in mind. We need to be very careful about that.

I have listened with great care to what the hon. Gentleman has said, but I am still not sure what the answer is to the question that the hon. Member for Stone and I have asked. Is there no circumstance in which de-authorisation should take place and the Minister should be able to intervene? If so, there would be a complete absence of parliamentary accountability even in the most extreme cases. Is that the hon. Gentleman's position?

I am very concerned that the Minister is framing his question on the premise that we can allow things to get as far as failure. If there is failure, there is already, as I have described, a de-authorisation process in place because there are already powers to distribute the assets and liabilities. The whole point is to bring about early intervention to prevent the circumstances at Maidstone and Tunbridge Wells and at Mid Staffordshire from arising and to ensure that we can put new management in quickly and early in the process, instead of having to wait until there has been a failure. At that point, all that one will be doing is looking at the past, rather than taking the early action that is required to address the problems. That is why my party has made an alternative proposal.

The problems that manifested themselves at Mid Staffordshire will be solved only by stripping distorting targets out of our NHS, bringing back a strong patient voice that can speak truth to power and strengthening commissioning at the local level. The Conservative party has pledged to do all that-indeed, we pledged two years ago to do so. By using the wrong sledgehammer to crack the wrong nut, the Secretary of State has shown that he does not have what it takes to do the right thing by our NHS, the professionals and patients in it, and the people of Stafford.

We therefore offer new clause 11. I was grateful to the Minister for saying that he broadly welcomed it, that he understood what lay behind it and that it was a fair attempt to ensure that we had in place something on which we could agree. It would ensure that Monitor and local commissioners and authorities had early notification of any special investigations that the Care Quality Commission was undertaking, including into foundation trusts, so that speedy action could be taken where necessary, and that includes replacing the management.

That is the first part of the answer. The Minister keeps trying to drive the idea that the Government have the only concept in town and that they have a full de-authorisation procedure, but they have not proved that they have a rigorous enough authorisation procedure-if they had, Mid Staffordshire would not have got through the process. Moreover, a de-authorisation process assumes that something has to have failed, but we propose that we should get in early enough to prevent things from going wrong in the first place.

The answer must be to strengthen Monitor, which has been one of the most effective regulators, not to divert power from it. However, the real problems would be very much helped by having something along the lines of the autonomy and accountability Bill that we have placed on the table and asked the Government to take up. We have offered it to the Government countless times, and with the Queen's Speech coming up, they will perhaps take this last opportunity to do the right thing. On that basis, I commend new clause 11, but my colleagues and I are not persuaded that the Government have made their case on new clause 12.

I will be fairly brief. To sum up, I have no problem with the general aim of the new clause, but I have some regrets about the lack of time to look at it properly to check whether it does what it says on the tin. However, I appreciate that the timing of the consultation meant that it was not possible to introduce anything any earlier.

Some of the criteria appear to have been plucked out of the air and the Secretary of State appears to have some wide-ranging powers to hire and fire, but I am not clear whether those are different from the powers currently in place. There is also the question of whether 14 days is the optimum length of time for Monitor or any alternative regulator to provide sufficient good-quality information.

The consultation originally proposed seven calendar days. As Mr. O'Brien pointed out, we have seen only the edited highlights of the consultation, but the document itself said that the majority of respondents favoured a longer time. There is some flexibility, as the Minister acknowledged that the time scale could be extended, but according to the consultation document a number of people suggested having a short period for the initial response and a longer back-up period if more detail were required. The actual length of time is not specified, so the concern is that this must be got right-otherwise, there will be a tendency to keep kicking the issues into the long grass. I would like an assurance that that cannot happen.

The main gap that is still to be plugged has been mentioned. Tempting as it is to kick around the Staffordshire football again, we have a great deal of business to get through, so let me make just one point here. Mid Staffordshire was given foundation trust status, so there is either something wrong with the process that awarded that status, given what we know was going on in the background, or something wrong with Monitor.

The hon. Lady was on the Committee that looked at the Mid Staffordshire issues in one, albeit too short, sitting. Does she recall that Mr. Bill Moyes took part in the final meeting when trust status was being conferred? Forty-nine questions were put at the meeting, and I think I am right in saying that 38 of his own criteria, laid down as chairman of the meeting, were on finance and governance and not about patient care. That is the key problem. The hon. Lady is right on her first point.

I thank the hon. Gentleman for that intervention, which relates to my next point. The process of awarding foundation trust status or the old three-star ratings seems to be based on financial information. I never thought that I would regard my hon. Friend Dr. Harris as a soothsayer, but I did when I looked back at what was said when we debated the Bill that created foundation trusts. My hon. Friend asked the then Minister, Mr. Hutton:

"What does the Secretary of State do when a hospital with a three-star or two-star rating is subject to a scandal"?-[ Hansard, 7 May 2003; Vol. 404, c. 730.]

Unfortunately, the Minister was very unhelpful in his summing up and he seemed to think that my hon. Friend was speaking complete rubbish. It is easy to dismiss remarks, buy my hon. Friend was obviously making very prescient comments.

It has been clear throughout-the current Secretary of State for Health was, I think, on the Health Committee at the time-that the three-star trusts usually gain that status because of financial issues. If finance is put alongside quality ratings, there is often a mismatch. I agree entirely with all those who have said in today's short debate that quality is being sacrificed at the altar of financial probity. We cannot separate the two, because quality is something that should not be allowed to drop under any circumstances. My original question about whether the process or Monitor were at fault remains pertinent, as there has clearly been a lack of liaison and a lack of attention to aspects other than financial ones.

The Liberal Democrats will not oppose new clause 12. Although there is some regret about the fact that it has appeared so late in the day, I think that ultimately it is a good thing. It will allow more transparency and make decision making more accountable, and that can only be good.

Dr. Wright is having to chair a meeting of a Committee of the House, which is why he is not present now. He did intervene briefly earlier.

I must make it plain that since 1997, fewer of my constituents have gone to Mid Staffordshire hospital than before. Before the new Stafford constituency was created in 1997, when I represented the whole of South Staffordshire, a very large number of my constituents received excellent treatment in the hospital as it was then. I echo what was said earlier by my right hon. Friend Mr. McLoughlin, our Chief Whip, who cited the excellent treatment received by his late mother before she died in that hospital.

Mr. Kidney-I am delighted to see him on the Front Bench-my hon. Friend Mr. Cash and the hon. Member for Cannock Chase now have far more constituents treated at Mid Staffordshire than I do, but I have nevertheless heard a number of very distressing stories. What happened at Mid Staffordshire was deplorable and inexcusable. All that concerns me in the context of this brief debate-and I will be brief-is that it must not happen again, but if by any unfortunate chance it does, there must be a mechanism to deal with the situation expeditiously.

Mid Staffordshire should never have become a foundation trust, and after it became one, it was judged according to the wrong criteria. We were taken by surprise when it was revealed just how dreadful some of the treatments had been, how shoddily managed the place had been, and what a disgrace to the national health service it was. That should not happen in a civilised country.

I am grateful to the Minister of State and the Secretary of State-as well as their predecessors-for the readiness with which they have discussed these matters with Staffordshire Members. I am grateful, too, for the keen and real interest that they have taken in these matters. I do not doubt for a moment that in presenting the House with the new clause, they are trying to ensure that a terrible disaster like the one at Mid Staffordshire does not happen again.

As I said briefly to the Minister in an intervention, what worries me is that the process that is being proposed is extremely cumbersome, and I doubt whether it can produce the sort of expeditious result that my hon. Friend the Member for Stone and I both want. I would much prefer-my hon. Friend made the same point in his intervention-a quick mechanism allowing the Secretary of State, with whom the buck always stops, to intervene very quickly. When something like the Mid Staffordshire disaster comes to light, there should be no opportunity for long discussions and debates about who does what and all the rest of it. There should be an instant opportunity for dismissal, and for taking over management before anyone else dies or is treated in the inhuman way in which, sadly, so many patients were treated at Mid Staffordshire.

When some time ago the Minister discussed with us-and the Secretary of State-his wish to introduce a mechanism to take away trust status, all of us around the table responded very positively. However, I am not entirely persuaded that the mechanism that he is proposing now will be as effective and expeditious as I would like it to be. Like him, I sincerely hope that what happened at Mid Staffordshire will never happen anywhere else, but human beings are fallible, and it could happen. If it did, I would want a lightning reaction; I would want the culprits to be got rid of, because at the end of the day all that matters is the quality of care that our constituents, wherever they live, receive in the hospital to which they have had to be taken. The tragedy of Mid Staffordshire is that the people who placed their trust in the medical care of that institution were in many cases terribly let down-not in every case, but in many, many cases. That must not happen again. One reason why people did not have too many fears was the fact that this institution bore the flagship label of a foundation trust, and yet never was any flagship holed below the waterline more often.

I just hope that the Minister can reassure me; and because this should never be a party political matter, I would like him to enter into conversations with the shadow Secretary of State and other colleagues on my party's Front Bench to see if we can come up, even at this very late stage, with a solution that is acceptable to all of us, and one that can persuade all of us that there is indeed a remedy if disaster strikes again.

I very much agree with what my hon. Friend Sir Patrick Cormack has just said, and I am very glad that he agreed with some of what I said in an earlier intervention. I also agree with my hon. Friend Mr. O'Brien that we want effective early intervention; I think we are all agreed on that.

I am also very happy to pay tribute to the Minister and the Secretary of State for the manner in which they have looked at this issue in Mid Staffordshire with both some of my colleagues from Staffordshire and me personally on a number of occasions. If I may say so without implying any disrespect, they have dealt with this matter far better than their predecessors; that is my frank opinion

This is a huge issue, and it is about lessons to be learned as well as what actually happened. As I said in my intervention on Sandra Gidley, I am sorry that the Select Committee gave only one sitting to these major issues-although we do now have the Francis committee. As my hon. Friend the Member for South Staffordshire said, the real problem arose in the granting of trust status in the first place, and, as I pointed out in my intervention, that was largely because the chairman of Monitor was present at that meeting and gave clear criteria. I have seen the minutes, and I have handed them over to the Minister-not that he needs me to hand them over to him-because it was astonishing that the Monitor chairman laid down criteria for finance and governance, and that was followed up by a number of questions that showed that that was the primary concern. The consequence was the Healthcare Commission report, and now what the Care Quality Commission is saying as well.

I want the current inquiry under Mr. Robert Francis to be as successful as possible, but both the Secretary of State and the Minister know that I have grave reservations about whether it can achieve its objectives. I still profoundly believe-I am glad that my hon. Friend the shadow Secretary of State is present because we both know this, as does my hon. Friend the Member for Eddisbury-that it is essential that we have a full public inquiry if the consequences of this latest inquiry under Mr. Robert Francis do not work out. This all started with a failure of Monitor, and we must have a full public inquiry if the results of this inquiry are not successful.

I must tell hon. Members that only last week I received yet another letter from a constituent-I have passed it on-about a grandfather who died in the most appalling circumstances, and that demonstrates that things are not going as well as they should in this hospital. The Secretary of State may not recall the letter immediately, but it is with him. I am profoundly concerned about merely leaving these issues to Monitor. As my hon. Friend the Member for South Staffordshire said, this is very convoluted stuff; I have no doubt that many lawyers have sat down to plough through the relative powers and functions of Monitor and the Secretary of State, and are seeking a way to get the right result, by nudging rather than by pushing or, indeed, by having things taken over. This situation would have been a lot more straightforward if we had been given a straight answer to the straight question that I have put so often: why cannot the Secretary of State take for himself powers-like special measures in schools-to override everybody in the interests of the health of our constituents?

I share my hon. Friend's view that restoring public confidence-on the face of it, that is the Government's intention-can now be done in Staffordshire only on the basis of an independent and public inquiry. We are committed to that. However, he must recall that the problems-the quality issues-at Stafford hospital started not with foundation status, but before that. They had started over a considerable period of time when the trust was an NHS trust under the scrutiny of the strategic health authority and the Department of Health, directly under the scrutiny of the Secretary of State. As the events at Maidstone and Tunbridge Wells told us, the Secretary of State's direct line of sight to hospitals does not mean that the Secretary of State knows what is going on and is doing anything about it; we have seen too many instances of that.

I hear with great interest and respect what my hon. Friend says, but I must mention that in this particular case there is a connection involving Mr. David Nicholson, who was the chairman of Shropshire and Staffordshire strategic health authority at the time that is being described. Subsequent appointments followed and he moved seamlessly up through the ranks to become the chief executive of the national health service. I shall not go into some of the more recent commentary that I have seen in the newspapers, but I must repeat a point that I have made on the Floor of the House and in other contexts: the problems do go back, but the real issue is that there is insufficient power for an override. Although Monitor and a degree of regulation can be in place, swift and last resort action can best be undertaken by the Secretary of State.

I am passionate about this subject and deeply concerned about the effect it has had on my constituency. I shall bring my remarks to a close simply by saying that a lot of the problems that arise-we will see how the Francis report goes-relate to gagging clauses. This week, I have been in communication with a number of people, and I must say that gagging clauses on those who want to blow the whistle should be banned. The trouble with the Act that enables whistleblowing to take place-the Public Interest Disclosure Act 1998-is that it is not working. Gagging clauses should be banned by law; they should be made unlawful. It would be extremely helpful if the Minister could refer to that matter, because many of the problems that have accumulated result from people not coming forward. However, in the last resort the Secretary of State has to carry the can.

On the last point that the hon. Gentleman made, I should mention that I was the Minister responsible for the passing of the disclosure Bill; Sir Patrick Cormack was also involved, having many years ago promoted it. We secured an amendment-a change has now been made. It instructs chairmen of tribunals, even where there is a gagging clause or someone withdraws the complaint, that the matter has to be submitted to the regulator. I suggest that Mr. Cash contacts the relevant Minister of State at the Department for Business, Innovation and Skills to ensure that that is being applied. The reason for the provision was to try to prevent people from using gagging clauses or other mechanisms to prevent this type of information from coming out via the tribunal system.

I am extremely grateful for that intervention and I hear what the right hon. Gentleman says with great interest. I had heard of that, but great ingenuity is being used by certain trusts-not just Mid Staffordshire but other trusts of which I am aware-that are using their lawyers and their medical establishment effectively to bypass and shut out consultants-in some cases, as many as 20-odd. I am concerned about that. It is no good having good intentions in an Act if the provisions can be bypassed in the way that they are being bypassed at the moment. I would have thought that it was Monitor's job, and that of the Secretary of State, to deal with that. Will the Minister please take note and get rid of these gagging orders, ensuring that there is no way that the gagging clauses can be used to bypass whistleblowers?

May I begin by responding to the three hon. Gentlemen who represent Staffordshire seats-in particular, I acknowledge the Under-Secretary of State for Energy and Climate Change, my hon. Friend Mr. Kidney, who has been present during this debate? The contributions that we have had from Staffordshire Members have been excellent and have reflected the enormous local concern about Mid Staffordshire. I appreciate and am grateful for the kind comments of several Opposition Members about the way in which the Secretary of State and I have dealt with these matters.

We need to ensure that the deplorable and inexcusable situation, as it was described by Sir Patrick Cormack, does not arise again. We need to ensure that the Care Quality Commission, which is an organisation that has recently been set up, has the power to look at trusts. We also need to ensure that Monitor is much more aware than it has been in the past of the problems that might arise with regard to various foundation trusts and that we have a process that will enable Monitor to de-authorise.

The hon. Member for South Staffordshire asked whether the process was fast enough. The time scale is 14 days. A number of parties are involved and we think that it is right that they should be able to express a view and that an investigation should be conducted. The process looks more cumbersome in legislation than it would be in practice. Our aim is that this should be a fairly brisk process and that everyone should know publicly what the time scale is. The Secretary of State should publicly make a request and there should publicly be a response within 14 days. There is potential to extend that time frame if necessary and if investigations need to be conducted for a longer period. I hope that I can reassure the hon. Gentleman that we recognise the need for expedition and would seek to ensure that we can deal with matters as quickly as is reasonably possible.

The hon. Members for Stone (Mr. Cash) and for South Staffordshire both want the Secretary of State to be able to intervene much faster. There seems to be a difference in opinion from those on their Front Bench. I can detect no wish from their Front Benchers for the Secretary of State to take the powers to intervene. The Front-Bench view seems to be that this should be dealt with by Monitor. That seems to me to be a difficult position for them to take, because the amendments give Monitor the power to de-authorise.

I was struck during the speech made by Mr. O'Brien by the fact that he seemed to think that the insolvency regime-an entirely different regime that has nothing to do with problems such as those that we faced with Mid Staffordshire-somehow already provides powers. It does not. It does not provide powers to intervene. As Ministers, we were not able to intervene. Monitor was. It has extensive powers but the problem was that in this case there was an issue with the way that it was dealt with. Public confidence was not restored by bringing in a full-time chief executive quickly-

Why did not somebody ask Monitor to deal with it?

I hear rumbles from a sedentary position as the hon. Gentleman asks why no one asked Monitor to do it. There were considerable discussions between us and Monitor, which led to the appointment of the new full-time chief executive. Those discussions went very well. Monitor listened to the points of view that were expressed through Government and Opposition Back Benchers who represent the area, and who said, "Look, we need more action." At that stage, Monitor thought that it was all right, but it accepted after discussion that it needed to act more effectively, and I am pleased that it could do so.

May I deal with the points made by Sandra Gidley? Lessons need to be learned, and she rightly suggested that in future Monitor needs to assess problems properly if there is a foundation trust application. She wondered, too, whether 14 days was the right period. If we have discussions with Monitor, we can extend that period if a longer investigation needs to be conducted, so I hope that I can reassure her on that matter. She rightly expressed concern about the timing of some of this, but the long vacation intervened and various other processes meant that we had to act and we were able to undertake a full, proper consultation.

May I respond to the points made by Mr. O'Brien? First, George Alberti and Dr. David Colin-Thomé conducted investigations and there are reports on this. Robert Francis is producing a report, which we hope will enable us to look at the more local issues. We need a rigorous process, and with the various reports that have been produced, we have covered it. The hon. Member Eddisbury appears to have no real wish for the Minister to be able to intervene, even in the most dramatic circumstances, which is not a tenable position for those on the Opposition Front-Bench to take. It is very much at odds with that taken by the Staffordshire MPs, who want to see a circumstance, at least in extremis, in which Ministers can intervene and take action.

I am concerned about the position that the Conservative Front-Bench team have managed to take, which is at odds with the way in which most people would want cases such as the situation in Mid Staffordshire to be dealt with. It undermines, too, in an extreme situation the whole principle of parliamentary accountability. Ministers must be able to come to the Dispatch Box and say that they would take the required action if they needed to do so. Monitor can make a decision in such cases to de-authorise where necessary. To refuse Monitor that power would mean that Members of Parliament would not have the level of accountability that they needed, but that seems to be the position that the Conservatives-at least, their Front-Bench team-have taken. I am glad to see the Staffordshire Members in the Chamber, because Members from all parties share the view that we need a much more effective legal system in place to deal with such situations in future.

Question put, That the clause be read a Second time.

The House divided: Ayes 342, Noes 160.

Question accordingly agreed to.

New clause 12 read a Second time, and added to the Bill.