My Lords, I rise to confess my sins and to support the noble Earl's amendment. Before doing so, I should declare an interest. I am a paid adviser to the General Healthcare Group, but I am very even handed as I am also the chairman of NHS London Development Agency and am trying to get more trusts into foundation trust status in London.
It would be honest to say that the provisions in the 2003 Act, as the noble Earl has rather eloquently described them, are a bit anachronistic. They were put in for another time because of the anxieties at the beginning of the foundation trust idea. If we are absolutely honest, they were put in as much as sops to parts of the Labour Party as for any other reason. We need to face up to the fact that we were in that position.
I have confessed my sins. Briefly, because the hour is late, why do we need to change? First, as the noble Earl said, the present provisions are absolutely arbitrary on their impact on different trusts around the country. There is an equity issue on why we should change. Secondly, on occasion they stop particular trusts becoming foundation trusts because part of their business case rests on the fact that they have a particular expertise or specialism. Great Ormond Street would be one such case. It cannot get its business case through in a way that will satisfy Monitor because of the arbitrariness of the cap on its business case. It is counterproductive in some instances.
Thirdly, as the noble Earl said, it is potentially a source of income for trusts that they can use for the benefit of NHS patients. Something that was put in to protect the NHS is in practice often damaging to the NHS because of a trust's inability to conduct its affairs in a way that generates income that can be invested in the development of new services for NHS patients. Fourthly, there is the small matter of UK plc. Some of these hospital trusts have international reputations. People are prepared to come from abroad for services in this country, for which they are prepared to pay and without any detriment to NHS patients. The cap restricts some of that activity so we are at a difficult time in our economic circumstances in denying people the ability to generate foreign earnings. That is a bit counterproductive. Given the challenges that the public finances will face in the next few years, I should have thought that it was a shot in the foot to carry on restricting a public body's ability to generate income for the benefit of NHS patients. That is why I support the amendment.