My Lords, at last we come to the heart of the Health and Social Care Bill-Part 3. On
Our fundamental disagreement with the two parties opposite is that we think that competition should be used only within a managed framework and when it adds value. There has to be freedom to use non-competitive means and to deliver co-operation, collaboration and integration. For a moment we thought that we had a new recruit to the argument, when the Secretary of State announced that he had lost faith in competition. He was all for it in his landmark 2005 speech to the NHS Confederation, and he was all for it when he and his coalition allies launched this Bill with price competition and an economic regulator to promote competition. Now, however, it is reported that he is not so sure.
We on these Benches have not changed our minds. We share the view expressed by the noble Baroness, Lady Williams, that Part 3 should be dropped-a view which is shared by almost all the professional bodies, as well as the staff in the NHS. Even the evangelical GP commissioners are very aware of competition, and we note that the drive to force through any qualified provider for the operating framework for 2011-12 has just been thwarted-a highly embarrassing defeat for government policy.
Making competition central to the reform of the NHS, as opposed to making it one component of a more rational and comprehensive reform with collaboration and co-operation at its heart, remains dangerous. Even with the amendments already agreed, Part 3 is a mess; and even at this late stage the Government should think again and try to build on the very wide consensus that accepts a role for competition only when it adds value for patients.
The three amendments in this group-and the late arrival of a manuscript amendment in the name of the noble Lord, Lord Clement-Jones, which I will return to in a moment-seek to address fears that have been widely expressed about the way that competition will intrude into the NHS in ways that we do not want, and that do not benefit patients. The fear is supported by the legal advice of many experts, who foresee how the Bill will open up opportunities for legal challenge in ways that are not currently acknowledged.
We also see that some clinical commissioning groups are asking awkward questions about how autonomous they will be, and how free to do the job that they are given. We know that they will have to obey the rules set out for them both by the NHS board and by Monitor, but is it worse than that? Will they have to employ legal and consultancy support on a grand scale to avoid being challenged by the courts or by whatever the co-operation and competition panel turns into? Will fear of challenge deter the innovation that the Bill claims will be unlocked?
Amendment 178A is the best effort of many legal minds collectively to solve the problem of ensuring, so far as is possible, that commissioners can do their job. When one looks at the old NHS, or even at Wales, one sees that there is a very high degree of confidence that arrangements made between different parts of the NHS will not be subject to legal challenge on competition grounds. There are no contracts on the arrangements of which the law may get traction. However, even in Wales, if there is a decision that some aspect of provision may require non-NHS providers to be engaged, the full force of competition law applies. We all know that. We are part of the EU so these rules apply.
We know that health services can, as Part B services, get some protection from the full force of EU competition law. We believe that that protection will be chipped away over the years. Although procurement is simpler under Part B, it is still open to challenge if the basics around transparency are not met. If there is an intention to enter into a contract that is enforceable in law, you quite rightly have to go through the correct procedure. This is no different from what is set out in the current principles and rules, which, if you read them, make a lot of sense-as they should, because my Government wrote them.
The doubt and the opportunities for challenge will remain unless you construct in the legislation a framework to protect commissioners of the kind that we set out. Such an approach might not be perfect but it is the best that major brains can come up with. Since the coalition Government's stated intention is that commissioners should be free, we should be able to see either their version or their legal advice-but we have not. The purpose is not to give unfair preference to NHS providers, or, indeed, to prevent third sector providers; the purpose is to free commissioners to make decisions that would have to pass the test of reasonableness in any event. Neither the third sector nor private sector providers would be any worse off, because they would still have to go through procurement procedures under any circumstances if a service went out to tender.
We think that Amendment 163BZZA, at the head of this group, and the following amendment are the right place to recognise this important principle from the outset. Amendment 163D follows a line that our Liberal Democrat colleagues have also explored, which is to define our NHS in a way that makes it clear that it is not a market despite what the Bill states.
The principle of social solidarity is used in the courts to help differentiate national social policy from the EU internal market and competition law. Social solidarity is therefore not an invention of the Labour Party, it is a term used in EU law. Social solidarity means "provided for that purpose as a matter of social policy" and as such may be considered by the courts to restrict the application of EU internal market law. All this has the same objective-to limit the scope for EU law to be applied in ways that do not help.
The noble Lord, Lord Clement-Jones, has, as it were, come to the party somewhat late by tabling his manuscript amendment. My colleagues and I have been in discussion with him and his colleagues, including the noble Baroness, Lady Williams, for many months, and we have shared with them our thinking on this matter. Indeed only last week I wrote to the noble Baroness, the noble Lord and their colleagues about exactly what we thought we should do together on Part 3. In that letter, as point one, I said:
"Your amendment 177"- the manuscript amendment-
"and our 163 cover the same kind of point and should be combined".
I am very pleased that this burst of late enthusiasm from the noble Lord, Lord Clement-Jones, has led to his agreeing that we should combine our amendments, and I am absolutely delighted to say that I would want to accept his amendment as an amendment to our amendment. I hope that noble Lords will have time to work out what exactly is going on here as the discussion progresses. Essentially, however, the noble Lord, Lord Clement-Jones, wants to amend our manuscript amendment with his manuscript amendment-which I am sure he will explain. I apologise to the House that this has been done as a manuscript amendment, but I am happy to report that we seek the same end. When the time comes, I will be very happy to accept the noble Lord's amendment.
Our amendment does not oppose the use of competition, in its place, and will enhance the Bill. I also like its use of the term social solidarity, as that appropriately describes what our NHS is, and why and how it exists. I beg to move.
Amendment 163BZZB (to Amendment 163BZZA)
Moved by Lord Clement-Jones
163BZZB:Line 6, after "functions" insert "in accordance with the provisions of Article 106 of the Treaty of the Functioning of the European Union as set out in section (Service of general economic interest),"