Health and Social Care Bill — Committee (12th Day) (Continued)

Part of the debate – in the House of Lords at 8:35 pm on 13th December 2011.

Alert me about debates like this

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat 8:35 pm, 13th December 2011

My Lords, I shall speak also to Amendment 278H. This is somewhat of a continuation of the debate that we had at the very beginning of the day, and comes back again to the application of EU competition law. However, it also has merit as an amendment which has its own rationale quite apart from avoiding the full rigour of EU competition law.

Under Part 3 of the Enterprise Act, which Clause 75 of the Bill applies to NHS foundation trusts, mergers are normally looked at by the OFT and the Competition Commission. They consider whether the merger would result in anticompetitive outcomes, governed by Sections 35 and 36 of the Act. However, the Secretary of State can intervene under Section 42 of the Act, where he considers that there is one or more relevant public interest consideration specified under Section 58 of the Act. Such considerations are then taken into account in deciding whether the merger should go ahead, even if there are no anticompetitive outcomes.

At the moment, the specified public interest considerations are, broadly, national security; free and accurate news presentation; media plurality and other media issues, which of course have been quite a hot topic of late; and, finally, the stability of the UK financial system. Financial stability was added in 2008 as a result of the banking crisis. It was inserted to avoid competition being the sole relevant issue to prompt intervention in bank mergers.

Competition in the NHS takes place in the context of high complexity, high levels of need and very serious consequences for failure for patients dependent on services if greater turbulence or churn in service providers results. Therefore, it is appropriate to add an additional public interest consideration to reflect these special circumstances. If protection of the public's money was deemed justification for additional public health intervention, protection of their health service warrants at least the same level of safeguard. This amendment seeks to ensure that competition is not the sole issue where health body mergers, including those involving NHS foundation trusts, are concerned, but that a new public interest consideration-the promotion of a comprehensive health service in England-can be taken into account by the Secretary of State when a merger is proposed.

Amendment 278G seeks to ensure that anticipated mergers, as well as completed mergers, involving NHS foundation trusts are subject to the provisions of Part 3 of the Enterprise Act 2002 in the same way as for other enterprises. Section 42 of the Act, "Intervention by Secretary of State in certain public interest cases", will apply to such mergers.

I tabled these amendments as the lesser of two evils. They are intended to mitigate the effects of EU competition law. They are also designed to make sure that foundation trust mergers are not subject to the full rigour of domestic competition law. There was a debate in the other place, which I think we are now allowed to call the House of Commons, on what was then Clause 71, as to whether the OFT or the Competition Commission should have any jurisdiction over mergers of foundation trusts. My honourable friend Mr Burstow explained that the OFT would have discretion not to review mergers where patient benefits outweighed any adverse effects on competition. But that is not explicit.

My honourable friend went on to provide an explanation of the impact of the clause for mergers involving NHS foundation trusts. The clause means that we would have a single regime for merger control which would avoid duplication of resources between Monitor and the OFT. It would also address the current situation whereby the Co-operation and Competition Panel formally assesses all mergers involving acute or foundation trusts where the turnover of the combined entity is more than £70 million.

None of that seems to be enshrined in the Bill. I do not know whether guidance is provided but this seems to be something that requires a considerable act of faith on the part of those looking at these prospective merger proposals. I very much hope that the Minister can give greater clarity than was provided in the House of Commons on this matter. In due course, I hope that the advice that he receives or commissions will also deal with the question as to whether it is safe to have provisions such as this applying directly the provisions of the Enterprise Act are going to be safe for the purposes of EU competition law application. I beg to move.