Schedule 1 - Constitution of public benefit corporations

Health and Social Care (Community Health and Standards) Bill – in a Public Bill Committee at 8:55 am on 15th May 2003.

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Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health) 8:55 am, 15th May 2003

I beg to move amendment No. 152, in

schedule 1, page 93, line 14, after 'corporation', insert

'under a contract of employment'.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss Government amendment No. 153.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The purpose of the two amendments is to clarify further the eligibility of staff members to stand for the staff constituency of the governing bodies for foundation trusts. As the Committee discussed on Tuesday, NHS foundation trusts will design their own governance arrangements to reflect the needs and circumstances of their stakeholder communities within the framework set out in schedule 1. We have tried to devise the framework with as light a touch as possible. Foundation trusts need flexibility, but it is important that the statutory requirements be sufficiently robust to provide for a fair and representative membership.

The amendments clarify, for the avoidance of doubt, who is eligible to become a member of an NHS foundation trust staff constituency in line with the guide that was published in December 2002. The amendments provide that employees must be employed under a contract of employment of not less than 12 months. The amendments are simple and straightforward.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

The Under-Secretary said that the amendments are simple and straightforward, but I am not convinced that that tells the whole story; it glibly passes over what the Government seek to do.

Amendment No. 152 would allow a member of staff to join the staff constituency only if they had an employment contract with the public benefit corporation. That is perfectly reasonable. It is amendment No. 153 that concerns me, because it would restrict membership of the staff constituency to employees who have an employment contract with that corporation that is valid for a year or more. That time scale causes me some concern, because it would potentially disfranchise many staff who have worked for a corporation for what most people would consider to be a reasonable amount of time.

In recent years, as the Under-Secretary knows, staff in the NHS and elsewhere have increasingly been employed on temporary contracts or through agencies. Dr. Beverly Malone at the Royal College of Nursing

has confirmed, and the Under-Secretary will doubtless acknowledge, that the NHS remains heavily reliant on, for example, agency nurses. Latest statistics show that, on the average ward, 10 per cent. of staff are bank and agency nurses. Over the past seven years, NHS spending on agency nurses has increased to the point that, last year, it reached £520 million. That suggests that a significant number of agency nurses are working in the NHS. The amendment would disfranchise and undermine those who, although agency nurses, have a stake in the corporation because they work there—and not just for the odd week or so.

Photo of Steve Pound Steve Pound Labour, Ealing North

I am not being antagonistic, but I want to make the point—as one who has spent most of his life surrounded by a coven of nurses, be they sisters, wives or whatever—that, by definition, a bank nurse is one who is employed in the NHS and who is working on his or her day off or during a leave period. An extremely high percentage of agency nurses, and almost all bank nurses, are contracted NHS employees who have in their substantive employment precisely the rights that the hon. Gentleman fears that they may be surrendering.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I am grateful to the hon. Gentleman, because I understand his point, which may well be valid. I look forward to seeing whether the Under-Secretary will confirm that when she replies.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

Since we are trading relatives, my hon. Friend may wish to be aware that my sister-in-law is an agency nurse. She does not have a permanent contract of employment, but works on an agency basis, albeit that that sometimes amounts to almost a full-time week.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

My hon. Friend has picked up a point, and I will come to it in a moment, because—notwithstanding what the hon. Member for Ealing, North (Mr. Pound) said—my understanding of amendment No.153 is that, regardless of where bank or agency nurses come from, if they do not have a contract of more than 12 months with that corporation, they will not be eligible to vote. My hon. Friend pointed out that, contrary to what the hon. Member for Ealing, North said, not all agency nurses do extra work in the NHS. I have a problem with that amendment, because the period of more than 12 months is too long and will unfairly impact on corporation staff who have a stakehold in that corporation but who are disfranchised.

The Government may, with reason, say that if part of a work force is transitory because it is sourced through an agency or because the trust employs staff directly only on short-term contracts of less than 12 months, which may or may not be renewed, those people will be disfranchised. If a trust's policy was to employ some staff, not as agency nurses or as bank staff, but as employees on short-term contracts of, say, six months that are open for renewal by the trust at the end of each six-month period, that could be an open-ended process, and under amendment No.153, I assume that staff could work, for example, for up to five years. However, because their contracts are only for six months but are renewable, under amendment No.153 they would presumably, for the whole period they work in that hospital, not be eligible to be part of

the constituency. That is wrong. Had the Government tabled the amendment and specified a month, so that it applied to transitory workers who came to the trust for a month on a contract and then moved on, I would have understood and accepted that that is too flexible and disruptive. A person working only for a month for a corporation does not have commitment. I would understand that. However, more than 12 months seems too long, and disfranchises too many people.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

This is a genuine inquiry. Is someone who works as an agency nurse over a prolonged time an employee of the trust or of the agency who seconds them to the trust?

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

The factual answer is that they are not employees of the trust; they are with the agency that the trust uses to supply a service to that hospital. I hope that the Minister will accept that.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

The hon. Gentleman started by saying that he did not have much of a problem with amendment No.152, but if his view is that agency staff, particularly those working for long periods but still nevertheless employed by the agency, need to be enfranchised, he would have to take issue with amendment No.152. He rightly says that amendment No. 153 is a separate point. If he is concerned about the position of agency staff, he should be opposing the imposition of the condition that they work under a contract of employment with the public benefit corporation.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I am grateful to the hon. Gentleman because, if the Under-Secretary confirms that what he has just said is factually correct, I would agree with him that that is a valid point that would have to be looked at. What I have assumed, perhaps erroneously, is that if a corporation were to use agency staff, the contract that the corporation had with the agency for those staff would, to all intents and purposes, be considered to be employment by the trust, albeit through a third party. For that reason I assume that, presuming that the contract was for more than 12 months, those staff would not be caught up by amendment No. 152 in that respect. I would be grateful if the Under-Secretary could confirm whether that is correct.

Can the Under-Secretary provide better particulars on this? If she confirms that our fears are grounded and correct, is she prepared to think again? Ministers, particularly in this Administration, would not wish willingly to disfranchise people simply because of a time scale that is too long. It is important that everyone involved in the provision of health care through a foundation trust feels that they are part of the system and that they are linked into it, to ensure that morale is high and that they are part of a team that is determined to ensure the success of that foundation trust.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

I am rather surprised by this amendment because it seems to ignore the reality of employment in the NHS in two respects. First, junior doctors in particular often work on relatively short-term contracts, which tend to be in

blocks of six months. I have worked in such a capacity, and I am sure that the hon. Member for Oxford, West and Abingdon (Dr. Harris) has too. Very often, doctors go from six-month block to six-month block, and that can continue for years and years. If this amendment were to be accepted, I fear that such individuals would be excluded from the public constituency.

Secondly, Ministers have ignored the reality of the situation for agency staff. As my hon. Friend the Member for West Chelmsford (Mr. Burns) pointed out, agency staff are not employed by an NHS trust, but may nevertheless have an ongoing commitment to a particular hospital. Perhaps Ministers take the view that agency staff flit from one trust to another. Of course the reality is that many of them are particularly focused on one trust, and will often work in that trust for many years. Were this amendment to be accepted, we might create a situation in which people who work part-time for a trust would be part of the staff constituency, but agency staff who work full-time would not be. That seems to be quite wrong.

I urge Ministers to think about whom they are excluding with this amendment, and to recognise that it would be a real shame if these two groups of extremely valuable staff, on whom the NHS relies very heavily, were to be excluded from the staff constituency.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I have mixed feelings about parts of these amendments, and I wish to take the Minister through those, in what I hope will be seen as a constructive intervention.

I do not have a problem with the idea of restricting the franchise to people who are employed by the hospital. It is reasonable to say that if people choose to work for an agency and hire themselves out to the trusts—perhaps at the higher rates that are available because of the failure of work-force planning in the health service—they should accept that, because they are liable to be employed by various people, and because they want the flexibility of agency work, there will be a downside with regard to the approach that people will take to their long-term commitment to the trust.

I do not deny that that is a valid thing for them to do, but one must accept that choosing to work for an agency specifically means that one does not want to tie oneself, full-time at least, to the trust. Some people work part-time for an agency and are employed by the trust on that basis. My understanding is that they would still qualify for the franchise under these arrangements.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

That is an appalling slur on agency staff. We all know that, because of the way in which the NHS is constructed, it favours people choosing the agency route. Of course, agency staff are a particular group of people. They are self-selected, frequently because agency work suits their particular, very often domestic, circumstances. Agency staff are disproportionately made up of young women with families. I hope that the hon. Gentleman is not seeking to exclude that group from the staff constituency.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

The hon. Gentleman did not listen to what I said. People with family commitments are able to work part-time. In fact, I would argue that the Under-Secretary needs to take even greater strides towards arrangements whereby people can work part-time for their employer and towards producing more flexibility and innovative working, particularly, but not solely, for nurses, in order to do that.

However, that is a different issue from taking the non-part-time employment part of one's time and hiring oneself out to an agency. That is a legitimate thing to do, but I regret that it happens so much because of the additional costs that fall on the NHS. In deciding to work for an agency—very often for multiple employers—it is reasonable for people to see that that may well impact on their enfranchisement and the staff side of a mutual organisation. I do not think that that is contentious, or against people working in the agency; if anything, we must encourage people to commit themselves to the NHS, provided that part-time working arrangements and flexible working are available.

If the hon. Gentleman is saying that Conservative party policy is neutral between established staff and agency employment—particularly nursing staff, where continuity of employment and care, acclimatisation to working practices and patient load and the needs in a particular hospital are relatively important—he will have to defend that. I do not have a problem with that, but there is a particular problem with the 12-month contract of employment relating to junior doctors, as the hon. Member for Westbury (Dr. Murrison) said, and also for locum doctors, who are often employed on a long-term, serial basis.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Under the Bill, somebody with an extended contract would automatically become a member on day one of working for a hospital. Somebody who had worked on short-term contracts—whether as a junior doctor or as an agency nurse—in a hospital for five years would not be. Is that right?

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

It is half-right, and I half agree with the hon. Gentleman. Agency nurses, as the Under-Secretary will confirm—we had an exchange with the hon. Member for West Chelmsford—are not employed by the trust when they are taken on by the agency. Assuming that agency nurses are employed by an agency and supply a service, rather than employment, to the trust, the comparison is not valid.

I was in the process of agreeing on the question of junior doctors working on serial contracts; that applies also to locum doctors, who are much discriminated against and are employed sequentially. I hope that the Under-Secretary will at least undertake to look for a procedure whereby if a junior doctor was clearly working within a deanery, he or she would have some tenure and the ability to be a member of at least one, perhaps the main, hub employer. Many junior doctors' contracts are no longer held, as they used to be, with the postgraduate deanery, but with a single hospital. That may be the way forward but, in terms of good employment practice, the Under-Secretary must recognise that we should be concerned about the position of locum doctors and long-term locum staff.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 9:15 am, 15th May 2003

I am slightly perplexed. When the hon. Gentleman refers to locums in that context, is he making a distinction between locums employed by the corporation and those employed by an agency? Is he saying that the distinction is not, therefore, in whether they are offering a service—in the sense that agency nurses or agency locums might do—but in the contract of employment?

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I am making that distinction. This does not just apply to doctors, but that is the most common model of locum work. Doctors can either decide to be employed part-time or full-time by the trust—employed and, often, I would argue, exploited by the trust—or to attach themselves to a locum agency. Attachment to a locum agency undoubtedly produces far higher rates of remuneration and provides the flexibility of being able to work for multiple employers for different periods or at different times of the working week, month or even day. There is a distinction to be drawn between people who are contracted to a single employer and want to show that they are dedicated to that employment and those who are attached to a locum agency. I hope that the Under-Secretary will give some idea of what she thinks is appropriate practice in that case.

I want to make two other points. First, there is the matter of short-term contracts and the advantages of having a mutual organisation; where there is a staff constituency that can influence policy and, for example, can say to poor employers who have a tendency to employ staff on short-term contracts that that is not acceptable.

Whatever other shortcomings there are in the way the Government are arranging foundation trusts, one of the benefits of having a mutual organisation with significant staff-side input into the management—certainly, more than there is now—is that poor working practices can be lobbied against from within the management structure. That activity ought to improve with foundation trusts. We will be watching to see if improvements in employment practice take place because, if that is the case, they will give added weight to those of us who criticised human resources policy within the NHS as a whole. If employment practices do not improve, the Government will have failed in one of their aims, which is to improve the influence of the staff side in the management of trusts.

My final point on the group of amendments is about what happens to contracted-out services. In many trusts, some of the less-well-paid jobs are contracted out to private companies in a way that never used to be the case. Certainly, when I was a trade union representative for junior doctors in negotiations over terms and conditions, we, the professionals, were, quite rightly, outnumbered by the ancillary workers, who had even greater complaints than the junior doctors and nurses about the way they were being treated. That is no longer the situation, because in many cases long-term workers in a trust, in a hospital or in the health service in general are employed by private sector companies. The problem is that contracting out services could be a way for trusts to

avoid having to take on board the voice of their entire staff.

I believe that the staff constituency will be dominated by those in the clinical and professional side who the Government have, so far, spared from the fate of being contracted out to the highest bidder and the lowest payer. I want the Under-Secretary to respond to the case, which is common and which will be common, whereby many ancillary staff—the less-well-paid workers—will not have a place on the governing bodies of trusts. They ought to have a place if such bodies are to be truly representative of the entire working population. How will people—particularly those with the greatest needs—have a voice within the mutual organisation, because of contracting-out arrangements? Perhaps the Minister could table an amendment that would provide some rights for people who work in a hospital but who are employed by private sector cleaning firms on a long-term basis.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

I have sympathy with what the hon. Gentleman says. Would it not make more sense if the employees to whom he refers could be on a board of governors by virtue of being trade union representatives? Those employees could then genuinely represent the interests of workers in that predicament, rather than being representatives of a privatised, possibly global, company whose interests would not necessarily reflect the interests of local workers.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

Quite so. The hon. Member for Birmingham, Hall Green (Mr. McCabe) has raised a specific problem to which I am not suggesting a specific solution. Under this Government, there still exists—just about—a place-of-work accredited representation system. Perhaps the solution is to ensure that people who are accredited representatives be given a constituency of their own, or be part of a franchise, to represent those interests. I hope that the Under-Secretary will accept what I have said in the constructive spirit in which it is intended and that she will respond to my questions.

Photo of Andy Burnham Andy Burnham Labour, Leigh

I find myself in the unusual position of supporting the last point that the hon. Member for Oxford, West and Abingdon made. This section of the Bill is crucial. Giving staff such a level of input and control over the way in which NHS services are delivered represents a huge step forward for the NHS. As a member of the Select Committee on Health, on several occasions I have been told how staff were excluded from major NHS capital developments and that that exclusion eventually led to poor projects.

With regard to some of the private finance initiative projects that Committee members visited, we were told that if staff had been involved from the outset, a better project would have been delivered. The point made by the hon. Member for Oxford, West and Abingdon is true. The proposed amendments may catch different numbers of staff from trust to trust. In my trust area, many members of staff, right down to porters and cleaners, are employed directly by the trust. The number of first-wave trusts that have large PFI

schemes has now been analysed, and it has emerged that ancillary staff in some trusts may be able to be members of the staff constituency but could be excluded in other trusts if they were contract staff. That is a shame, given that they are permanent trust staff and feel that they are part of a team that makes a hospital work. In addition, they probably have no choice about their contracts of employment being switched from a trust to a company.

That is not the purpose of the Bill, which does not attempt to exclude anybody. The Bill aims to create an inclusive mechanism whereby a range of voices can be heard on boards of governors so that various interests can be considered when decisions are being made on how the affairs of trusts and hospitals are managed. Perhaps there could be some flexibility, so that boards of governors could decide how widely they drew their criteria for staff constituencies. Boards could decide whether contracted members of staff could participate and not be ruled out. The aim of the Bill is to involve all staff in the running of hospitals.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

Many good points have been made, to which I should like to add a further one. Addenbrooke's hospital is in my constituency. It is not only a district general hospital but a teaching hospital. It is a medical school, and the neighbouring Homerton college is a nursing school. Many students live in and work on the Addenbrooke's hospital site. Where do those students fit into the pattern? Students represent a large interest group but, given that they do not have contracts of employment, would they be eligible for the public constituency? Although students would not necessarily think of themselves as having the same set of interests as permanent members of staff, should they be included in the staff constituency? I am not suggesting that students be given a distinct and separate category, but at this early stage in the Bill's progress, it would be useful to try to understand when medical and nursing students might be eligible.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

I had not intended to contribute to the debate but, as my hon. Friend the Under-Secretary said, something that at first appeared to be simple is obviously more complicated. While I was listening to some of the speeches of hon. Members, several issues came to mind.

I can see the point of the Bill in the context of agency staff employed by other NHS hospital trusts. There is a potential conflict of interest. However, people who have long-term intense commitments to particular trusts could be excluded by the amendment. The matter requires further examination. The majority of people who are employed by agencies on a long-term basis are likely to be local people who could participate through the public route. Therefore, the question is probably more difficult in theory than in practice.

I want to probe the Under-Secretary on the issue of conflicts of interest. Presumably hospitals will enter into a contract with an agency. Hospitals may enter into contracts with all sorts of organisations that are designed to deliver all sorts of services, from construction to catering. There are issues surrounding the rights of those employees to

participate in the democratic structure. Is there the potential for conflicts of interest, because employees of an organisation with which the trust has a contract could go to a meeting and influence the sorts of policies and contracts that are negotiated with the organisation that employs them? If that is the case, I can see a strong reason for the Government's position. I would welcome comments on that.

Photo of Steve Pound Steve Pound Labour, Ealing North

It is extraordinary that while the whole world seems to be withdrawing from the general franchise and participating less and less in elections, we are discussing the broadest of all possible churches and considering the most bizarre circumstances in which we could remotely disfranchise someone. I appreciate why we are doing that, and I hope that people flood in to participate and vote. However, I suspect that all our discussions will come to nought, and that only a small group of people will participate and vote.

Photo of Steve Pound Steve Pound Labour, Ealing North

May I just finish my peroration? [Laughter.] I speak not just as a humble Back-Bench Member of Parliament, but as the former branch secretary of 640 Middlesex hospital branch of the Confederation of Health Service Employees; a member of the district health authority, the regional health authority and the area health authority; and a member of the London militant shop stewards committee for some years. I speak with absolutely no authority, and I will give way to the hon. Gentleman.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

If I understand the hon. Gentleman's argument correctly, he is saying that we should not spend too much time worrying about extending franchises because few people are inclined to vote. On the same basis, presumably, we would go back to the 1832 electoral system. Come off it!

Photo of Steve Pound Steve Pound Labour, Ealing North

The hon. Gentleman makes a point that flirts between being tendentious and mendacious, and I am not sure on which side it really rests. He knows perfectly well that I would not talk about reverting to a period before the Catholic Emancipation Act, let alone the Reform Act. My point was quite simply to ask the Under-Secretary to consider the question of staff representation through trade unions.

In my days as, it has to be admitted, an absolute menace in the NHS 30 years ago, there were 18 trade unions in the Middlesex hospital; if only we had had many more. Nowadays there are two or three unions in the average hospital trust. It is a much simpler process to get representatives from the staff side. Most hospital trusts—certainly mine in Ealing—hold regular open days, staff consultation days and public community consultation days, and there are ample opportunities for people to participate. The validity and status of being a staff representative through the trade union structure would underpin a great deal of the good that the Under-Secretary is trying to achieve. I merely ask her to consider that matter.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The Committee has had an extremely interesting debate on what, I thought, were fairly straightforward and simple amendments, and hon. Members have raised some pertinent issues. The amendments seek to ensure that people who have a

stake in an organisation are able to have a say in electing the board of governors, in compiling the forward plans and in setting the strategic direction for the organisation. It is right that we should try to bring together people from the public constituency and the staff constituency who have a real connection with the organisation. That is not to be exclusive; we are embarking on the creation of a new form of organisation. It is crucial that we get the balance right so that members of the new organisation feel that it is their hospital—that they own it—and that it is also important that they have a say in the running, managing and control of the hospital.

It is right to distinguish those people who are employed under contract by a corporation, whose main employment is with the organisation. That is their employer; that is where they work and where they feel the connection. Amendment No. 152 proposes that there should be a contract of employment with the organisation because it is important that people are committed to it. I want to distinguish between agency staff and bank staff in their interface with the organisation. Several members have said that we still have a lot of agency staff working with the NHS. That is the choice of those people who work as agency staff, for a variety of reasons. They may not want to work inside the NHS or for an organisation that has a direct contract of employment with the NHS. Their contract is with the agency, and they can and do work in a range of NHS organisations and health care organisations outside of the NHS.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury 9:30 am, 15th May 2003

The Under-Secretary said that it is important that people associated with the franchise are committed to the organisation. Agency staff are just as committed to patients, and that is what is important; not commitment to an organisation. That is what should be reflected in working out of who will be disfranchised under the Bill.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The hon. Gentleman has not grasped the fact that there is a need for commitment to patients and to the organisation. The NHS foundation trust will be a unique organisation, based on drawing together staff, the public and the patients; everybody who has a stake in the matter. That is why we have created this new form of public benefit corporation. There must be an entity to which people feel committed and can say, ''That is my hospital. This is where I work and live, and I am committed to its success.'' The organisation and the patients are key factors. It should not be a case of one or the other; it is a matter of how it comes together.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I endorse the point that my hon. Friend the Under-Secretary has made. However, does she not think that it would be a small but significant incentive for an agency nurse to come into the NHS if she had a stake in the management of the organisation?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

We want to ensure that the NHS and NHS foundation trusts will be able to provide the terms and conditions, flexibility, part-time working and term-time working that meet the needs of people who are currently working in agencies. One of the

reasons for the growth of the agency sector is that, in the past, the NHS was a fairly inflexible organisation that demanded that people worked full-time, and it was insensitive to the needs of families or carers. Now, the NHS is a more flexible organisation and the work that we are doing on improving working lives is a consideration in staff rating, making the organisation more attuned to the needs of agency staff. In future, I hope that this will reduce the need for people to choose to work in that way because they will be able to get the same conditions through the NHS.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

If the Bill is amended in this way, will it be affected by the proposed EU agency workers directive? I understand that, under the Commission's proposals, temporary agency workers would benefit from the same basic pay and employment rights as permanent staff. What impact would that have on what the Under-Secretary is saying and on the position of agency staff under those proposals?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

In this context, the right to become a member of the foundation trust is enshrined in schedule 1. My understanding is that that would not relate to terms and conditions, pay and the normal matters construed as being employment rights. However, I am happy to look at the matter.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

If the Under-Secretary could re-examine the issue in the next 10 minutes, it would help guide the Committee. I wonder about the term ''employment rights''. If there is going to be a right for an individual, by the nature of his employment—provided that it is over 12 months with a corporation—to have, in effect, a vote, it seems somewhat contradictory, given the proposed EU directive, that agency workers doing the same work in a workplace would not also be able to enjoy that right.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

I shall try to clarify whether that would apply, and I shall try to respond as quickly as possible on the matter.

The hon. Members for Westbury and for Oxford, West and Abingdon raised the matter of doctors who have a series of six-month contracts. The hon. Member for Oxford, West and Abingdon asked whether an overarching contract with a single NHS organisation might be a way forward. I am prepared to consider whether that can be done. However, if people are on a series of short-term contracts, that brings me back to my original point; we are trying to create the sense of an organisation in which people have a long-term stake. Those people will be active members, involved in electing the board of governors, setting forward policy and examining the achievements of the trust.

We want to ensure that people on the public constituency side and on the staff constituency side have the same degree of commitment and long-term involvement with this organisation that will be needed to drive standards for patients.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

I am baffled by what the Under-Secretary has said. When I was a junior doctor, I worked 100 hours a week for the trust that I was employed by on a six-month basis. I had no choice at all in the pattern of my work; that was just the way

that it was for junior doctors. In many cases, that is still the way. The Under-Secretary is basically saying that that does not matter and that, because of the structure, such people are not going to be enfranchised. Such a situation is totally wrong, and I hope that she will consider it again.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

If people were employed on a series of contracts that might take them to work at a range of different organisations, they would not necessarily have the kind of commitment and connection to the NHS foundation trust that we want to see.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I do not share the Under-Secretary's rather pessimistic view. Will she also address the issue of people on short-term contracts that are consequently renewed? Legally, those remain short-term contracts, and they would fall outside the scope—or within the scope, depending on which way one looks at it—of amendment No. 153. Those concerned would be barred from the benefits.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

I take the hon. Gentleman's point. An employment practice can develop whereby people have a series of short-term contracts that take them beyond the 12-month period. It is our intention to ensure that people in such circumstances should be eligible to make a contribution. I agree that where people have a long-term commitment, they should not be excluded simply because of the structure of their contract. I am happy to consider whether we can introduce a measure on that.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I should like to get that absolutely straight. I take in good faith the Minister's comment that she intends to ensure that people on short-term contracts do not lose out, but, of course, good intentions do not always tie in with the resulting legislation. Will the Minister give a categorical commitment at this stage that, either on Report in this House, or in another place, the Government will table amendments to ensure that those types of workers are included? Will the Government bring forward amendments that will meet the point made by Conservative Members' that people on short-term contracts that are constantly renewed so that they go over the 12-month period should not be disfranchised?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

It is important to recognise that we are trying to strike a balance between people who have a genuine and continuing commitment to an organisation that they want to be part of and people who work in an organisation on a transitory basis, from week to week, who will not necessarily have the input to drive the organisation forward.

I am happy to give a commitment to the hon. Gentleman that we will provide for people who have a series of contracts that in effect give them a long-term commitment to the organisation. If necessary, we will introduce proposals to ensure that that is reflected in the legislation.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

The Minister said that a long-term commitment would result from a series of short-term contracts. The only loophole is that many people on short-term contracts may assume that their contract will be renewed after six months. That might mostly be the case, but there is no 100 per cent. guarantee. Those people might lose out, even though their commitment

is no less, because of the force of circumstances beyond their control.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

As I said to the hon. Gentleman, we will endeavour to introduce proposals that meet the policy aim of trying to ensure that people who have a significant and continuing commitment to an organisation have a say in how it is run. We want to create a board that brings together the public and the people who work in an organisation and are committed to it. If we need to table amendments to ensure that that happens, I will be happy to do so.

Photo of George Young George Young Chair, Standards and Privileges Committee

On reflection, does the Minister regret having said some 45 minutes ago that this was a simple amendment that brought further clarity to the Bill?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

Yes, indeed. I entirely agree with the hon. Gentleman. Perhaps it was a little early in the morning to attempt to sail through these amendments. However, it is an indication of the usefulness of the debate in drawing out what we want to achieve as our policy commitments in this case.

One or two other matters have been raised by the hon. Member for Oxford, West and Abingdon and by my hon. Friends the Members for Birmingham, Hall Green and for Leigh (Mr. Burnham), particularly in relation to the position of contracted-out staff as a result of private finance initiative contracts. Members know that we have put an end to compulsory competitive tendering. That means that more staff are increasingly providing services directly within the NHS and playing a full part in the organisation.

The second issue is the new, and I hope welcome, development in the PFI programme of the retention of employment schemes. All new PFI schemes ensure that the vast majority of staff are now retained within the NHS family rather than being seconded out to the facilities managers or providers of those other services. Therefore, increasingly, people can retain their NHS employment, their terms and conditions and their pensions—all of which are crucial to them—rather than be contracted out. In the future, that will be a significant benefit for us.

This is one of the first times that we have talked about a real system of industrial democracy, in which people who work for an organisation will have a say in how it is managed, how it is shaped and what its priorities are. Many members of staff and members of trade unions throughout the country will welcome the opportunity to be involved in this way.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

We all welcome staff involvement in important positions, including PFI contracts. Will the Under-Secretary confirm that this legislation, whether or not the amendments are passed, merely enables a member of staff to sit on the board of governors? Is it not rather the management board that will make day-to-day decisions, including preparing and planning for entering into PFI contracts? There is nothing in the legislation that guarantees that a member of staff will get on to the management board. Why have the Government not introduced measures to ensure that members of staff are sitting around the most important table in a hospital?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

I am delighted that the hon. Gentleman is advocating the establishment of perhaps even more radical workers' councils than those in the European Community. I am delighted to see evidence of his commitment to workers' control. That takes me back some time into my political history on issues of workers' control.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Why has the Under-Secretary not done it?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

If the hon. Gentleman is committed to that, he can table an amendment to that effect. If it is Conservative party policy to pursue workers' control, now is the time to get it.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon 9:45 am, 15th May 2003

The Under-Secretary has said three times today that staff would be involved in the management of a hospital. That is not necessarily true, according to the legislation. Staff will have one person on the board of governors, but there will not necessarily be any staff on the management board. My amendment may come up in the next few days; we are quite a bit behind schedule. Why has she not provided for staff to be represented on the management board?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

If the hon. Gentleman reads the schedule, he will see that it says:

''at least one member of staff''.

My information so far is that most of the people who are considering going down that path seek more than one member on the board of governors so that it will reflect more broadly the staff involved. If the hon. Gentleman wants to take the concept further and advocate workers' control, we would be happy to discuss it with him.

Several of my hon. Friends have made the point about representation through the trade union organisation and staff side. The trade union collective bargaining machinery and the staff side discussions will go on in NHS foundation trusts just as they go on in any other part of the health service. We are genuinely trying to create a sense of joint membership rather than channelling people through the trade union organisation. We want to have them as members of the board of governors working jointly with residents and staff. That is significantly different from the negotiating machinery that carries on through the staff side, which is perfectly appropriate and will continue to be so. I say that as a former branch secretary of a trade union who has conducted negotiations. It is appropriate that that machinery should remain within the collective bargaining framework of the organisation.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

I do not doubt my hon. Friend's sincerity, but why are we saying that we want people to be part of some joint collective enterprise when we refer to trade unions? It is all right to be there as a representative of a PCT or of a dental school, and all sorts of individual constituencies are allowed to be part of this amalgam, but trade unions—the key representative of workers and employees—are not acceptable. That does not sound right to me.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

We are trying to create a kind of direct democracy consisting of people who work in an

organisation. That does not mean excluding their trade union rights or their negotiating rights for terms and conditions. We are trying to create a different kind of organisation in which people will work in a different regard as members of that organisation. They will not concentrate solely on the matters that are important to trade unions and their bargaining role; they may concentrate on wider issues as well.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I do not think that the Under-Secretary is responding to the specific request that I and the hon. Member for Birmingham, Hall Green (Mr. McCabe) made, which was not to duplicate the negotiating system in the board of governors, but to make some provision to enable the trade unions to act as representatives of the two groups that we have identified so far, for whom it will be difficult to make provision, even within her consideration of the issue about long and short-term contract workers—the junior doctors, in general, who put in a huge amount of work in a hospital but often do not work there for more than a year, and the contracted-out workers. Those groups have interests that could be taken up specifically by a trade union representative. Although it is pleasing to hear that fewer jobs are contracted out, the Under-Secretary is effectively saying, ''No. There will be no possibility of representation, even through a trade union place on the board of governors specifically to represent their interests rather than the interests of the wider group who are already entitled to direct membership.''

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The hon. Gentleman may be a bit confused about what we are trying to do. We are not trying to create separate places for the people who are represented through their trade union. They will still have their bargaining rights, and, if they are members of the trade union, they will still have the right for their employment matters to be pursued. However, it is of a different order to ask people if they want to be long-term members of an organisation and for the next few years to try continuously to drive that organisation forward as a successful hospital in their community, whether they are workers or local residents. That is different from seeking to promote the particular interests of a particular group through a specific representative. The hon. Gentleman must get that distinction clear.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

With respect to the Under-Secretary, I am not confused. I am concerned about the people who are contracted out to private sector employers and who do not—in the place in which they work, have always worked, will continue to work, and from which they will probably end up retiring—have any negotiating rights on their employment rights because they are employed by another. They are just as much—if not more—a member of the family of the staff and that hospital as any other. I am not saying that the way is through trade union representation; however, I ask the Under-Secretary to do something other than reassure me that in some schemes there are fewer and fewer of these people, and to say what she intends to do to protect the interests—in fact, any of the interests, because they do not have direct

negotiating rights with the hospital—of this significant group of people who contribute so much to the running and the services provided by the hospital.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

There are two responses to the hon. Gentleman's point. If people are local residents and have worked for ever for the hospital in those roles, clearly they would be able to have an influence on the organisation. However, that would not be in relation to their trade union and bargaining rights, and the hon. Gentleman should realise that important distinction.

My hon. Friend the Member for Birmingham, Hall Green asked whether it might be possible for an NHS foundation trust to include some kind of trade union representation. If they wanted to do that they could submit that in their constitution, because there may be some circumstances in which they would want to do that. However, I would not want to see them seeking to replicate a staff-side interest within the organisation. The distinction is important. We are creating a new mutual, and it is not about sticking within our traditional silos of employer and employee. We are trying to say that to bring all the different stakeholders together is to bring added value and create something quite new where people drive the agenda forward. I am concerned that if people stay within their strictly narrowly defined employee interests, we will not get the extra contributions that we want to see coming forward. I hope that all members of the Committee share my belief that staff can bring their front-line experience to the way the organisation runs and the way services are designed. Very often it is the people at the sharp end who are able to say, very clearly, whether something will or will not work, whether it will be more cost effective and whether it will bring better standards for patients. We must draw on the enthusiasm and imagination of staff locally, and the provisions set out in the Bill will enable us to do that. This is a big step forward.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

I know that the hon. Gentleman wants to go even further on the subject of workers' democracy, but this is quite a big step forward in that direction.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Perhaps I am slightly unusual on the Conservative Benches in that I welcome the involvement of trade unions and I have seen them play a very constructive role in many organisations. One of the roles of the board of governors under the provisions of schedule 1 is to set the remuneration of non-executive directors. Would it not be helpful to have the expertise of trade unions in doing that?

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Before we proceed, I have a minor point. The Committee stretches quite a way down the Room, and it is a convention of Committees that the Chair should be addressed as well. Will Members try to ensure that that happens from time to time?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

I shall try to adopt a wide-angled lens approach to the Committee, and I apologise to you, Mr. Griffiths.

It is important that there be a wide discussion on remuneration. However, the interests and expertise of any one group will not help to get that remuneration right; that is a key issue on which the board could focus.

I have dealt with the points raised by my hon. Friends. At three minutes to nine, I said that these were simple amendments that could be dealt with quickly; that was not to be the case.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

If students are local residents, they are eligible to be members of the public constituency. If they are transitory—that is, without a long-term commitment to the organisation—it would not be appropriate for them to be members. The essence of membership is to have a long-term, substantial and tangible link to the organisation.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

The Under-Secretary was being unduly optimistic an hour ago if she thought that the amendments were simple, if not merely technical. No doubt that heralds the benefit of having an astute Opposition on the Committee. One may assume that many of her hon. Friends—with the possible exception of the hon. Member for Ealing, North, who is a half-rebel on these matters—would not have made those valid objections.

The two amendments, particularly amendment No. 153, raise genuine issues. Earlier, I was minded to ask my right hon. and hon. Friends to join me in dividing the Committee if the Under-Secretary's response was not satisfactory. I was heartened, and even encouraged, by her reasonableness. More importantly, I was heartened by her commitment that she will consider preparing amendments later to deal with what we regard as an important matter; namely, people who have their short-term contracts renewed almost as a matter of course.

I ask her to be as lenient as possible when drafting those amendments, so that the Bill can be as inclusive as possible. I am not convinced that more than 12 months is the right time scale. It is too long in any case, but I will not split hairs because of the Under-Secretary's commitment. I fully recognise that she has not had a reasonable amount of time to get to the bottom of those issues during the debate. However, I hope that, at some point—either in a letter to my hon. Friends and myself, or at an appropriate stage in the proceedings—she will clarify the point about the proposed EU agency workers directive.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

I shall make only one or two brief comments because I do not want to delay unduly our proceedings, which have already extended beyond what was intended.

When the right hon. Member for North-West Hampshire (Sir George Young) suggested that he had somehow caught us out and that our debate was longer than anticipated, my first instinct was to think that Parliament was operating at its best. The Opposition crow about a great triumph for parliamentary procedure, but I have reflected on and listened to their contributions during the hour and five minutes of debate. All that has happened is that

elements of confusion have been introduced into what was, and remains, a straightforward amendment.

Two central principles that inform the way in which we shall establish foundation trusts have been confused. On one hand, there are governance issues, and the democratic issues that arise from those. On the other hand, there are management issues and matters relating to how foundation hospitals will be run and managed, and that is perhaps where the issue of efficiency comes most to the fore.

I am not someone who says that directly involving people who work in an organisation in its management will introduce inefficiency, although an organisation can be run more efficiently that way. I am no longer in favour of total workers' control, which seemed to be advocated by the hon. Member for South-West Devon (Mr. Streeter). I am sure that we will return to the management of foundation trusts and how those can be run more efficiently by directly involving the work force when we discuss another part of the Bill.

However, we are not discussing that issue in relation to the schedule. We are discussing governance issues and the attempt through foundation hospitals to root the governance of hospitals much more closely in their local communities, and to involve members of staff much more closely in the governance of those hospitals for sound democratic reasons. To conflate those two issues—the governance issues and the democratic points that arise from those, with issues relating to the efficient management of a hospital—is to introduce an unnecessary degree of confusion. That, rather than the triumph of parliamentary procedure, has kept us busy for so long.

I am grateful to my hon. Friend the Under-Secretary. She has not had to spend much time defending these amendments because they are technical and clear, and her reasons were set out clearly at the start. However, she has had to spend much time explaining some of the fundamental principles and core values that inform the setting up of foundation hospitals in the first place.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

I was coming to a conclusion.

Photo of Simon Burns Simon Burns Shadow Spokesperson (Health)

I am not sure whether the hon. Gentleman has been in this Committee Room for the past hour and 10 minutes. The most important thing that happened during that time was that a problem was pointed out to the Under-Secretary about amendment No. 153 and a group of people who wanted to be linked to the governance issue. Given her comments, I suspect that the Under-Secretary had not fully appreciated the logical conclusion to the problem. She has agreed that a valid point has been made, and she has generously accepted that she will return with amendments. That is what the debate was about. What the hon. Gentleman is attributing to—

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Order. This is an intervention, not a chance to make a speech.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

The hon. Member for West Chelmsford asked whether I had been in the

Committee Room since the outset. The answer is yes. That begs the question whether the hon. Gentleman, whom I know has been here because I have been looking across to where he and his colleagues sit, has been awake during the proceedings. The hon. Gentleman's point related to EU directives. He raised the issue of employment practices and how those would relate to the democratic governance of foundation trusts. Those are interesting points and I, too, should like to hear what the Under-Secretary has to say about them.

However, I repeat that the reason and the need for the specific amendment have been absolutely clear to me from the outset. It has also been clear that we need to make a distinction between the democratic governance issues and matters relating to the efficient management of the hospital as an organisation.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I welcome the fact that the Under-Secretary is going to look again at the issue of people on serial short-term contracts. However, I stick with my view, and I share the Under-Secretary's view, that people who choose to work on an agency basis for multiple employers are not badly treated by the measures laid out in this arrangement.

However, the Under-Secretary has still not adequately dealt with the specific issue. People who work on a contracted-out basis—they have worked at the hospital, and are likely to continue to work at there all their lives, and who hold the hospital together—will not have the same rights as other workers who may have been there only one year and who may not be as permanently committed to the trust.

The Under-Secretary's first response was that that was not an issue, but clearly it is. I was grateful for the support of the hon. Members for Birmingham, Hall Green and for Leigh in raising that matter. The Under-Secretary's second response was that those of us who are concerned are confused.

Her third response, which was at least something, was to point out that those people might be able to gain membership through the public constituency because of where they live. However, that will not be true in some places, such as London, because many workers cannot afford to live anywhere near the larger central London hospitals and commute from some distance away. In larger constituencies, contrary to the Under-Secretary's assertion, they are unlikely to be able to participate in that way. I do not seek a Division on her amendment, but I ask her to reconsider the position of those who will effectively be disfranchised. It is not a question of union negotiations on terms and conditions—presumably they will be able to argue those with the private company that employs them—but of the feeling of ownership about which the Under-Secretary, as usual, waxed lyrical.

I have some sympathy with that feeling in the context of a proper mutual organisation within which the staff have a say in the governance of the hospital. It is regrettable that the Under-Secretary has been unable to offer any consolation to that group, which forms perhaps even the majority of workers in trusts

within which there has been much contracting-out. I hope that we can revisit that issue.

Amendment agreed to.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I beg to move amendment No. 203, in

schedule 1, page 93, line 16, after 'as', insert 'NHS'.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss the following:

Amendment No. 204, in

schedule 1, page 93, line 17, leave out 'a' and insert 'an NHS'.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I hope for a much shorter debate on this group of amendments.

The amendment seeks to restrict the membership of the organisation to NHS patients of foundation trusts. Those trusts are part of the NHS, inspected by the NHS, subject to NHS standards and, sadly, remain too much under the control of the Secretary of State for Health. The amendment does not extend membership to private, paying patients. They may well be able to become members by virtue of where they live, but they do not require the same franchise rights as NHS patients. It would not be unfair to exclude private patients—I am sure that that will be debated—because, first, they have the option of being NHS patients.

Secondly, given that capacity is limited in every NHS hospital now—as it has been for five years and will continue to be for the foreseeable future—it is unfair that private patients jump the queue and pay for beds. Even if that raises a little money for the hospital, it has never been shown to do so sufficiently in net terms to justify the unethical practice of allowing patients into pay beds when others must wait.

Until the Under-Secretary sorts out the problem of the unfairness and the unethical practice of allowing wealthy or reasonably well-off patients who can afford to ''pay as you go'' to get higher clinical priority than patients without those resources who have waited longer, it is incorrect to say that it is unfair to exclude people from membership of the organisation on the basis of their being private, paying patients.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green 10:15 am, 15th May 2003

I am becoming a little concerned about how much common ground I share with the hon. Gentleman this morning, but his point is crucial. Does he agree that on Second Reading we heard repeated concerns that the measure may be a way of extending the private capacity at the expense of the NHS? In fact, the hon. Gentleman's amendment is a litmus test, because if the real issues are NHS patients and NHS capacity, there should be no trouble in accepting it.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I and other hon. Members raised the issue of private patients on Second Reading. The Government are aware that that is a controversial matter because they will not allow the proportion of pay beds, which are unacceptable in any number when capacity is limited, to rise with foundation status. I recognise that; however, it does not tackle this unethical situation and says only that it will not be allowed to become proportionately any worse.

Clause 5 states that new providers can become NHS trusts under other applications, but the problem is that the Under-Secretary perhaps envisages that non-NHS hospitals will become NHS foundation trusts. That applies to either private or voluntary hospitals, such as her favourite example, the Heart hospital in London, and is really what is required for the hospital at Midhurst. That is good, because it is growing the NHS as a health care provider.

We have no objection to that, but those hospitals will come in with a certain number of patients who pay to go private. However, as is the case with the Heart hospital, the Under-Secretary knows that a notional NHS hospital gives over a huge proportion of its much-needed capacity on priority to those who can pay. Foundation status for such a hospital—or the larger trust of which it is part—would open the door to many of its members, who are already treated very generously at other people's expense. I do not mean to sound too political, but I would not object to private patients being treated in NHS hospitals if there were genuine spare capacity and NHS patients were not made to wait any longer.

Moreover, many paying patients—I am not sure that the measure tackles this matter—do not even live in this country. Again, I have no objection to private patients jumping the queue, whether they are British or from overseas, but is it really the Under-Secretary's intention that one might have influence by virtue of being a privately paying patient from overseas? In cases in which the private wing is well organised or large, the governance of what the Under-Secretary says is an NHS institution within the NHS whose priority is to provide a general good-quality service to the NHS might be significantly influenced. Indeed, that is implied in some of the duties of quality in the Bill. Does the Under-Secretary really mean that she would be satisfied with that situation?

Despite the strong support that I have had from the hon. Member for Birmingham, Hall Green, this is a probing amendment. However, I hope that the Under-Secretary's response will deal with the broader issues that I have raised.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

This is an intriguing amendment that throws into cold light some of the political inclinations of the Committee. I suspect that the hon. Member for Oxford, West and Abingdon has more in common with the old Labour party than with those in his party who believe that the future of the Liberal Democrats is to replace the Conservatives.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I shall not get into the party politics of that, tempting though it is. However, I expected the hon. Gentleman to say some such thing.

I make it clear that my position on pay beds in NHS hospitals when capacity is limited is party policy and is endorsed by my entire party. That is not a flight of fantasy; we have taken a deliberate policy position on the basis of the ethics of allowing people with money to jump the queue at a time when other people without those resources have to wait longer. That is not something that is restricted to my party; there are some in the party to which the hon. Member for

Epsom and Ewell belongs who have told me that they share that view.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

One can never be certain whether national Liberal Democrat policy represents its members' individual views.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

We cannot get into that issue.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

The other issue is that the voices of interest in this amendment from the Labour Benches show that, even in a Committee that is supposedly loyal to this measure, there is unease about the direction in which it is taking the Labour party. Let us be clear: my hon. Friends do not share the direction that this amendment would take. It would be entirely wrong when creating more independent institutions—institutions that have the power to innovate and to bring new kinds of services into the NHS for the benefit of its patients—where there are already, under this Government, increasingly grey areas between the provision that is delivered by the private sector and the public sector in health care, to try to create an arbitrary division in the rights to become a member of a local hospital or a hospital that has provided one with treatment. To my mind, that is an old dogma that has no place in the health care services of tomorrow.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

The hon. Gentleman may recall that, the other day, his hon. Friend the Member for West Chelmsford chastised me for accusing the Conservatives of wanting to privatise the health service. Will he confirm that what he is actually saying at the moment is that it is Conservative policy to give preferment in opportunity to private patients within an NHS foundation trust, paid for by the taxpayer, and that he wants to give advantage to private fee-paying patients at the expense of NHS patients? That is the logic of his position.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

It is not Conservative policy to treat those who end up choosing to pay for their health care as pariahs within our health care system. We respect the rights of individuals to pay for their treatment, and we will not discriminate against them because they make that choice. The truth is that, both under the current system and under this Bill, it is not wrong, improper or impermissible for hospitals to offer private services.

As I said to the hon. Member for Oxford, West and Abingdon, this is not simply about pay beds. It is about a whole range of services that can potentially be offered through public-private partnerships, and through the public and private sectors, on hospital sites. It is not simply an issue of private-paid wards.

What, for example, about privately provided services to the NHS on a hospital site? I see that the hon. Member for Weaver Vale (Mr. Hall) in his seat. He and I go back some years to the time when he was the Member of Parliament for Warrington, South and I became a prospective parliamentary candidate for that constituency. Sadly, he sought safer havens in the constituency next door, but he will remember that Warrington hospital—I remember being briefed by its chief executive—went into partnership with an American company to invest in a privately owned scanner on the hospital site that would be made available to patients across the north-west.

Photo of Mike Hall Mike Hall Labour, Weaver Vale

I am grateful to the hon. Gentleman for mentioning the Daresbury wing at Warrington hospital. He will know that that project failed and that the North Cheshire health authority had to purchase the property, which is now providing patient care for the NHS.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

The point is, Mr. Griffiths, that it is surely right—[Interruption.] I was not aware that the scanner itself had not been successful. However, is it not right that if a private company wishes to come on to an NHS hospital site, invest in a piece of expensive equipment that would otherwise be unavailable to the NHS and make it widely available to a diverse range of providers, it should be able to do that? Is it really right that the patients who take advantage of that service should be discriminated against on the basis of where they come from and who is paying for their treatment? They can enjoy the same service on the same site.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

We are talking about whether private companies should build private facilities on NHS sites. Hospitals are being built by private companies. Does he believe that an available bed on an NHS ward should be reserved for a patient who is in less clinical need but is willing to pay, rather than for a patient who cannot afford to pay but is in greater clinical need? That is a simple question, and I want his view on whether that is right.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

The hon. Gentleman tries to tempt me into a debate on the rights and wrongs of pay beds, and I think that that is irrelevant to the amendment. My point is simple: if a patient is on a hospital site, enjoying a service, his or her right to membership and participation in the management of that hospital should not be affected by whether the service is being paid for by the patient, by a private sector insurer or, indeed, by the NHS.

Photo of Andy Burnham Andy Burnham Labour, Leigh

If private patients are on that site and enjoying that service, it is not because they are patients of that NHS trust but because they are members of the scheme that has placed them with that service. If they have concerns about the service, their concerns should be conveyed to the private health provider that placed them there, not to the management of the trust board, which is entirely separate. I believe that the hon. Gentleman is confused on that point.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I completely disagree with the hon. Gentleman. Many people choose to pay for their treatment out of their own pockets. Why should they be discriminated against? It is not simply a question of whether they are being provided for by private health insurers. There is a substantial self-pay sector within our health care environment. There is no reason why those people should be discriminated against based on who is paying the bill. It is inappropriate for people who receive that sort of treatment not to have the same right of membership as those whose treatment is funded by the NHS.

In addition, it is difficult to define who is and who is not an NHS patient. What about an NHS patient who is on a waiting list and has seen a consultant at a hospital but is sent to a private hospital for treatment because the NHS is unable to provide his or her

operation? Do we treat that person as an NHS patient who is eligible for treatment or not? What about a member of staff who works in a hospital's private unit or ward? Should he or she be treated differently from other members of staff who work exclusively in the NHS facilities? Defining the dividing line between public and private on the same site in the same organisation is extremely difficult. I do not believe that it is prudent, sensible or fair to go down that route.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

My hon. Friend is taking a lot of incoherent flak, which is rolling across the valley from the Labour Benches. In opposing this amendment, he is supporting the provisions drafted by the Government. If Labour Members have difficulties with it, they should take them up with their own Front Bench, whose position my hon. Friend is supporting.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

My hon. Friend makes an extremely valid point. I was about to say that what Liberal Democrat and Labour Members do not seem to understand is that the country is entering a new era of health care. Regardless of which party is in power, there will be greater diversity in health care. We have differences of emphasis. We would go much further than the Government are going. We think that many of their reforms are timid and do not go the distance that is necessary to create genuine change for patients and genuine improvement in services.

None the less, the general direction of diversity of provision, and of greater involvement of the public, private, voluntary and charitable sectors in the provision of health care, is one that is accepted on both sides of the House—at least, on the Labour Front Benches, and, indeed, on Conservative Front and Back Benches. Hon. Members who say that patients whose treatment is not paid for by the NHS should not be permitted to be members of the hospital that treats them represent a health care system that is the system of yesterday, rather than the system of tomorrow.

Other issues will arise within the details of the Bill that will cause complexities and problems. The Bill contains provisions for NHS foundation trusts to invest in new operations. It is perfectly conceivable that NHS foundation trusts will take over other health care facilities or buy health care facilities from the private sector. The NHS has already done so through its acquisition of specialist companies in the United States to provide it with the raw materials that it needs for the future. It is perfectly conceivable that an NHS foundation trust will acquire from the private sector additional capacity that will enable it to treat more patients, or will invest in that additional capacity.

However, if an NHS foundation trust forms a joint venture with the private sector, and patients are treated by that joint venture, how will those patients be categorised? Will they be NHS patients or private patients? The definition of ''patient'' will be extremely difficult to achieve.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

The hon. Gentleman makes an interesting point, because the Government have set a limit and the proportion of private beds in foundation trusts will not be allowed to increase. Does he think that it will be impossible for an NHS foundation trust to take over a small private hospital and absorb it

unless the proportion of NHS patients is suddenly as least as great as it was in the initial foundation trust? That will be difficult. Is he suggesting that if a trust simply runs such a hospital but does not absorb it, patients treated in a private hospital that is not part of an NHS foundation trust should also be members because they are patients there?

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

If a patient receives services from a foundation trust and the foundation trust owns or substantially owns one of those services, I can see no reason why he or she should not be a member of that trust. A trust is not a building or a site. A trust is an organisation that will provide health-care services. It is wrong to say that people can only be members if they use some of those services but not others.

The hon. Member for Oxford, West and Abingdon touched on an interesting point about what trusts can and cannot do, and the investment that this Bill permits them to make; an issue that will undoubtedly be discussed again in Committee. The dividing line between trusts' core operations and operations that they will take over must be a matter for debate.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I should like to ask a tangential question that will help me to clarify whether I have sympathy with the viewpoint of the Liberal Democrats' spokesman or that of the hon. Member for Epsom and Ewell. Does the hon. Member for Epsom and Ewell support the cap on private patients' income, which is included in the Bill, or would his party seek to lift the cap on private patients?

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

If the hon. Gentleman cares to look through the amendment paper, he will get a much clearer idea of the Conservative party's perspective on those issues without my having to divert this debate. For example, if a foundation trust chose to invest in a joint venture with the private sector to take over or to set up a new unit, patients in that unit who were eligible to be members of the trust should not be split from those who are not. That may be impossible to define.

Photo of Andy Burnham Andy Burnham Labour, Leigh

I have listened carefully to the hon. Gentleman's arguments and have concluded that this has more to do with the Conservative party's policy of encouraging people, using taxpayers' money, to pay privately for treatment. Does the hon. Gentleman envisage a future in which more patients are paid—encouraged, even—to take out private treatment? Is that the crux of his objections?

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

This debate is about the definition of an NHS patient. It is not about the number of private or NHS patients. I do not want the debate to stray off course.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I accept that point, Mr. Griffiths, and the Committee will have an opportunity to return to those issues.

The view of my party colleagues is that we should not discriminate in terms of the stipulations in the Bill. Since 1997, there has been a substantial increase in the numbers of people who choose to pay for health care from their own pocket, and we should not discriminate against those people. They were forced to make that

choice because of inadequacies in the current bureaucratic system.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Hall Green

Let us suppose that the hon. Gentleman is being absolutely sincere. What safeguard would he provide to ensure that a majority of private patients did not come to represent the membership on the board, with those private patients then seeking to change the direction of the trust so that it was no longer in the NHS or representing the interests of the NHS?

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

We will return to the safeguards needed to prevent entryism into an NHS trust when we debate amendments Nos. 68, 176 and 177. There is no need to discriminate against public and private patients in trying to ensure that there is a perpetual public sector balance on the governing body of a hospital. Patients are patients and local residents are local residents, and if they choose to play an active role in a hospital, they should be able to do so. I do not see us discriminating against them to prevent their involvement.

My final point on the two amendments concerns the burden of proof. I want to speak specifically to amendment No. 204, which extends the definition not simply to patients but to their carers. My concern about the amendment is much more practical. In my view, patients are still a priority, but it will be much more difficult to come up with a definition of which sector a carer belongs to. Will detailed records be maintained so that the role played by a carer in a hospital can be checked out?

I should be interested to hear the Under-Secretary's view on how we will establish whether someone is a carer or not. What process does the Minister envisage being put in place by foundation hospitals? If a hospital is obliged to check that someone applying as a carer was a carer for an NHS patient rather than for a private patient, that—in addition to all my misgivings about the distinctions between public and private—would place an additional administrative and bureaucratic burden on a hospital, and I do not wish to see that happening. The Conservative party does not support the amendments. We think that the Government's drafting is right, and we do not wish the Bill to change in any way.

Photo of George Young George Young Chair, Standards and Privileges Committee 10:30 am, 15th May 2003

I am sure that when the Committee reaches clause 15, there will be a general debate about the role of private medicine and the percentage of private practice that should take place in an NHS hospital. This is a relatively small amendment that deals with who can become a member. I hope that the Government are going to resist the amendment, and I hope that they remember what they stated in ''A Guide to NHS Foundation Trusts'' in December 2002, under the heading entitled ''Who can be a member?'':

''The policy is about inclusion rather than exclusion''.

I hope that the Government will not wish to exclude the group of people that the hon. Member for Oxford, West and Abingdon wishes to exclude from being members.

It seems that the Liberal Democrats are now reoccupying the ground that the Labour party very sensibly abandoned in the 1980s; the left of medical politics. In 1976 I participated in my first Health Bill; David Owen was present and Barbara Castle was on the Back Benches. The Bill attacked pay beds in the NHS and tried to introduce a medical apartheid. Since then the Labour Government have moved on, and they recognise that there should be a mixed economy in NHS hospitals. I think that they are absolutely right.

The amendment wants to disfranchise a group of people who have paid, through their taxes, for the national health service. They want to pay a pound to join their foundation trust and are then paying out of their own pockets for treatment in an NHS hospital. The hon. Gentleman wants to deny them the right the join the foundation trust. He also wants to disfranchise those people's carers. This is a narrow-minded, nasty amendment, and I hope that the Government will resist it.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I shall respond to the right hon. Gentleman's point when I have heard what the Under-Secretary has to say. However, I want to deal our position on this matter. It is not a question of opposition to pay beds per se at a time when capacity is there; that is very clear. The Select Committee, which has Conservative members on it, shares the position that I have enunciated on the ethics of pay beds in the NHS when capacity is limited. Therefore, it goes wider than what the right hon. Gentleman likes to think of as ''the left of politics''.

Photo of George Young George Young Chair, Standards and Privileges Committee

I should like to deal with the broader issue that the hon. Gentleman has raised.

Photo of George Young George Young Chair, Standards and Privileges Committee

I think that is a clause 15 point, and you agree, Mr. Griffiths. The amendment seeks to disfranchise people who have paid for the NHS through their taxes, who want to join and pay a pound and who want to play a role in how that hospital is managed. I hope that the Government will resist the amendment, and, if it comes to a Division, they will have my wholehearted support.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

Mr. Griffiths, you have been characteristically liberal in your interpretation of what is in order in debating the amendment, even with some of the contributions from my hon. Friends. This is a narrow amendment about who should be allowed to become a member of the board. It seeks to disapply membership to a very small group of people. The example has been given by the hon. Member for Oxford, West and Abingdon of a private hospital being taken over by a foundation. Other than that possibility, I cannot see that the number of people to be excluded will be anything but small, and in many cases there would be difficulties in defining what constitutes an NHS patient and what does not.

In Wales, there are six renal units run entirely by the private sector but which only treat NHS patients. However, there may be some exceptions to that. I do

not want to impose on a foundation board some complicated, investigative process through which it has to determine if a person does or does not qualify to become an entitled member of the foundation trust.

The amendment would apply to only a small number of people, and its application would cause much complication. There could be appeals, and that would involve even more complication. If foundation hospitals are set up, all members—irrespective of their political views—would wish to see the membership board comprising as many active citizens who are willing to take part as possible. The last thing we want is for such people to be excluded; I may be wrong because, over the past half hour, the debate has been about trying to exclude people. I want foundation trusts to be successful, with boards comprising active citizens who are concerned about their hospital. I do not want to see this petty amendment carried.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I sympathise with the amendment, but I recognise that there could be some difficulties in how one defines an NHS patient. Nevertheless, I hope that my hon. Friend the Under-Secretary will be sympathetic and look at this issue outside of the Committee. The essential point is that foundation hospitals will remain NHS hospitals. They will serve NHS patients, operate according to NHS standards and use NHS revenues. Therefore, why should the electorate for the management boards not be exclusively of NHS origin? I am not saying that the Government should not use the private sector to solve some of the short-term capacity issues in the NHS; that is a sensible use of the private sector, and the Government are already doing that. It is using the private sector to help the NHS treat NHS patients.

Private patients have an advantage in respect of their health care compared with others in our country. They are able to get treatment quickly. I do not think that we should have a situation where there are no private pay beds. We should not curb people's right to use the private sector if that is what they want to do. That must be their right.

However, when it is an NHS hospital, it should be an NHS electorate. If we could exclude private patients from the electorate, I would be sympathetic to that point. I hope that Ministers will look at the issue. I recognise the concerns that have been highlighted about how one defines the NHS electorate and realise that they may not be able to accept the amendment in the name of the hon. Member for Oxford, West and Abingdon as such, but I hope that they will give an assurance that they will consider the matter.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

We have had an interesting debate. Perhaps it has been a little too wide ranging, given that there will be several opportunities later to examine the philosophy behind the Bill and the national health service. I draw hon. Members' attention to clause 1, clause 14 and clause 15, all of which set out the primary purpose of an NHS foundation trust to be providing services for NHS patients. These new organisations will be part of the NHS family. They will abide by the fundamental values and principles of the national health service; treatment free at the point of use, based on clinical need and not the ability to

pay. It is beyond doubt that the Bill enshrines the principle that NHS foundation trusts will be grounded and rooted in those values and principles.

It was interesting to hear about the policy of the hon. Member for Epsom and Ewell. We already knew that his policy was to try to increase the amount of self-pay or pay as you go—whatever phrase one wants to use—in the national health service. That is not our policy at all.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

The Under-Secretary, uncharacteristically, is trying to put words into my mouth. I did not say that. I said that they should not be discriminated against.

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The hon. Gentleman may not have said it, but his hon. Friend the Member for Woodspring (Dr. Fox) is clearly on record as saying that he wants to increase the pay as you go or self-pay proportion in the national health service. If the hon. Gentleman does not agree with his hon. Friend's policy, perhaps he will let the Committee know. What was said is clear Conservative party policy, and is diametrically opposed to the direction of the Government. The creation of NHS foundation trusts represents a genuine exercise in a new form of community and social ownership. We want to maximise the involvement of local people, whether as residents, staff or patients. I point out to hon. Members that the main thrust of the Bill is to have local residents and staff. The patients' element is an option that the trust can choose to bring forward if it thinks that it is appropriate.

In a previous debate, we talked about a situation in which most residents would actually be patients in a local district general hospital. However, there will be circumstances in specialist trusts where one will want to draw patients from a wider area. The patient part of the constituency is a second order part, and is optional. That is slightly removed, and we are further defining that patient part.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

What the hon. Lady has said is something of a revelation. Is she saying that it is the Government's intention that patient involvement should be the exception rather than the rule in foundation trusts?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

That is absolutely not the case. In the debate earlier this week, we said that that was a matter for the trusts. We have said clearly that schedule 1 is the minimum eligibility framework. It is a question of trusts bringing forward proposals that meet the needs of their particular local communities. Those needs will be different in different areas and for different organisations. I thought that that was broadly accepted by the whole Committee.

The essence of local democracy is for the local trusts to bring the matter forward. Patients will be an important part, but many of those patients will also be local residents in the organisation; a local hospital providing local services. Patients will be a key driver, but the constituency of patients, above and beyond the local resident qualification, is likely to be a subsidiary category.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon 10:45 am, 15th May 2003

I accept what the Under-Secretary says in that respect. However, in the earlier debate, she effectively excluded the families of patients who would not otherwise qualify as residents. Is she really saying that where we expand the franchise to include patients who live beyond the resident boundaries—for example, Saudi Arabians, Americans or other people who are private paying patients from abroad—such people would qualify under this arrangement, where the trust chooses to allow patients to register separately?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The hon. Gentleman has an intriguing way of illustrating his points with absurd examples. I would not characterise him as an extremist, but he does tend to put forward fairly extreme examples to the Committee.

The NHS foundation trusts will be part of the NHS, and they will be fully funded by taxpayers as a public service. Clause 15, which we will debate later, contains a cap on private patients. It is the only part of the NHS in which such a cap will apply. Therefore, NHS foundation trusts are at the forefront of maximising the service that we provide for NHS patients rather than for patients in the private sector. That is a big step forward for the NHS.

I want to place on record that because the primary purpose of the NHS foundation trust is to care for NHS patients, we expect eligibility for membership of the public constituency, which includes patients, to be targeted at those who have used, or are likely to use, the NHS services provided by NHS foundation trusts.

I sympathise with the sentiments behind the amendment to the effect that there should be services for NHS patients, and to the extension about carers of NHS patients. I do not want to go over the ground that we covered on 13 May 2003 about the definition of carers and how difficult it is to constrain that. Again, we want to leave that matter to local constitutions to introduce in terms of good practice for carers.

My hon. Friend the Member for Cardiff, Central (Mr. Jones) was absolutely right when he said that we want to achieve the maximum number of active citizens—we want to be as inclusive as possible. However, the point must be made that NHS foundation trusts are fully funded by taxpayers as a public service and are part of the NHS—that is where we want our major concentration to be regarding the role that patients play in driving services forward. My hon. Friend the Member for Harrow, West (Mr. Thomas) said that he wanted to ensure that we concentrate on NHS funds and services for patients in that regard.

I understand from the hon. Member for Oxford, West and Abingdon that this is a probing amendment, and I am happy to place on record the Government's acceptance of his points in principle. We want to ensure that all of the people involved—as members of these new organisations—are committed and are part of the whole sense that NHS foundation trusts are embedded within the public services that constitute our NHS.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I acknowledge that the Under-Secretary's acceptance of the principle is limited to the text of the amendment and may not include some of my other comments, but I am unsure what she is saying in response to me and to the hon. Member for Harrow, West. What does being sympathetic to the principle mean? Will she set out guidance? In some hospitals, 20 per cent. to 30 per cent. of patients are private patients, and that includes a large number of patients from abroad. The Under-Secretary will know that in London an overwhelming proportion of private patients are from abroad. Will she allow those patients to be enfranchised? Will she write to me on this? What is the situation? What does being sympathetic to the narrow principle mean?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

What I mean is that we will determine the best way to achieve the best result, whether by guidance or, if necessary, by amendment. We are perfectly happy to see whether there is a way in which we can express our absolute commitment. NHS foundation trusts are fully funded by the taxpayer and are part of the NHS. Governance is an important part of that democratic organisation. We must concentrate on the NHS services and patients.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Will the Under-Secretary clarify whether it is her view that private patients, or patients who fund themselves on an NHS site, should be excluded from membership of an NHS foundation trust?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

If the people receiving services are local residents, they would be entitled, as any other local resident would, to be a member of the public constituency, to have the full rights of membership and to elect people to the board of governance. However, these NHS foundation trusts are about providing services for NHS patients. They will be fully funded by the taxpayer, fully part of the public sector and will provide a public service. Therefore it is right that they concentrate on serving NHS patients. Private patients who are local residents will be entitled to be members of the public constituency.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I am slightly worried at this point. I shall discuss clause 151 later, which deals with the liability of insurers, but is the Minister proposing that people who are reimbursed for the cost of their treatment, which means that the NHS is paid by way of insurance, should somehow lose any of their enfranchisement as a result?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

People who are funded through the NHS, such as those whose treatment is covered by industrial injury recovery costs, are NHS patients. They are treated as part of the NHS and, therefore, would not be excluded. I do not want to go into the territory that the hon. Member for Epsom and Ewell has described, where an increasing part of the NHS is pay-as-you-go self-care, and where those patients become increasingly influential in setting the direction and nature of NHS foundation trusts. That is absolutely not the territory into which we want to go. We want to ensure that the trusts are public sector organisations that look after NHS patients, are funded by the NHS, and, therefore, concentrate on those services. It is the hon. Gentleman who wants to stray into the territory of increasing the influence of the

private sector and the pay-as-you-go self-care market in our national health service. We reject that.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I would like to pursue a couple of points with the Under-Secretary. First, my hon. Friend the Member for South Cambridgeshire made an extremely important point, which the Under-Secretary has failed to answer fully. Under the terms of those clauses of the Bill, if someone who has private health insurance is involved in an accident, for which the NHS provides the treatment, but that person receives a substantial settlement and the NHS has some rights to recover costs, would that person be excluded from membership?

Secondly, given what the hon. Member for Oxford, West and Abingdon said, is it the Under-Secretary's intention to introduce changes to the Bill that would effectively enact his amendment in some form?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

In relation to NHS costs being reimbursed, it is my understanding that that is a contractual relationship between the insurance company and the NHS that would not affect the status of the patient, who would be treated by an NHS organisation as an NHS patient. The reimbursement and the contractual relationship between the two other parties ought not to affect the status of that person. We must consider how to express our intention properly so that people in such circumstances are not excluded from being treated as NHS patients.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

First, I thank you, Mr. Griffiths, for allowing the debate to go, within reasonable limits, beyond the narrow scope of the issue. I accept that clause 15 is the place to have these arguments. That is why I was careful not to read into the record Select Committee reports that support entirely the thrust of my argument on the question of pay beds. I went into those areas only when provoked by hon. Members. It is also right that we do not get into squabbles about the Conservative party policy on this amendment. Clause 15 may be the place to consider it, and that is why I did not go down that path, despite provocation.

I would also like to thank the Under-Secretary for saying that she will examine that matter. I accept that some of my arguments went further than she was prepared to go. I recognise that it might have been better had I been more restricted in what I said. Nevertheless, I am pleased that she is prepared to examine the matter.

I thank the hon. Members for Harrow, West, and for Birmingham, Hall Green, and, I think, the hon. Members for Leigh and—judging by sedentary comments—for Ealing, North. There is partial support at least for some of the things that I said. I want to work constructively with the Government on that narrow issue.

I also recognise that the Under-Secretary may have a point when she said that the examples that I cited about foreign patients were unnecessarily extreme. In some hospitals in London a large proportion of the patient load is private patients from abroad. Inner London—and sometimes outer London—would not necessarily have the people who would need to, or be able to, pay privately. It is a valid point, but I accept

that it is not the strongest of the points that I have made.

I have a question that I would like the Under-Secretary to answer if she feels able, and it is the same question that I asked the hon. Member for Epsom and Ewell. Does she think that it is right that a bed should be reserved for a paying patient of a lesser clinical urgency than an NHS patient waiting to come in? I hope that she will answer that at clause 15 if not—

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I hope that the Under-Secretary will at least answer that in clause 15.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

The hon. Gentleman has practised in the profession. If someone is taking up a pay bed, I imagine that in most cases he would, at some point, have been an in-patient or have accessed out-patient treatment, so there is a blurred line where someone is a private patient and also a NHS patient. How, in practice, would he manage to make that distinction?

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I will come to that. The Minister was rescued from answering the question that I asked, but I await clause 15, because it is an important point. The Under-Secretary said three times in her contribution that these hospitals were fully funded by taxpayers—presumably through taxation. She will accept on reflection that part of the defence for pay beds—in fact, the only possibly defence—is that they make a net contribution to the running costs of the hospital. I question that. Nevertheless, if we accept pay beds, we ought to start changing our language to say that the NHS's real point of delivery is paid for by general taxation and by queue jumpers paying for the right to queue-jump. It is important that we are honest about that, but we will come back to it.

I will deal with the specific points on the measure. The hon. Member for Epsom and Ewell and the right hon. Member for North-West Hampshire argued that this would be an arbitrary division. It is not an arbitrary division; it is a division between NHS patients and non-NHS patients. Those private patients can be NHS patients, particularly if they are citizens of this country or otherwise qualified. It is not being unfair to them, as taxpayers, to exclude them, and that is another point that the hon. Members made. Those patients could be members if they used the NHS and took their places in the queue as NHS patients. They are exercising their right, and I do not deny them their right to buy private health care. This is important: they can buy private health care in the private sector, and they can buy private health care from NHS providers if it is not being unfair and inequitable to patients with greater clinical need who cannot.

Finally, the question of the bureaucratic burden of distinguishing between NHS patients and non-NHS patients was raised. I am sure that the Under-Secretary will be thinking about that as she considers the implications of the principles behind this amendment. However, patients who have been seen as out-patients on the NHS have attended as NHS patients, so they qualify; it is quite simple.

Another point was made about how hospitals can tell whether people are qualified as NHS patients or not. The hospitals would have to check when an application came in to see whether they are allowed to have patient applications and not just public applications, and to see whether someone was a patient. I assure hon. Members that it is stated on the top of the patient registration form whether a patient is an NHS patient or a paying patient. The same exercise to establish whether someone had attended within the right time scale as a patient would clearly tell the authorities whether he or she had been an NHS or private patient.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

Let us imagine a situation in which a patient and a carer have attended a hospital on two occasions. The first was for a consultation with an NHS consultant. The second was for an operation because the person chose not to wait; they decided to pay for a bed in the private ward and to have a privately funded operation. The records will show that they have done both. How should the hospital judge whether the carer is entitled to inclusion or exclusion?

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

Paragraph 3(2) is clear. The patient will have attended as an NHS patient; the fact that they have also done something else is irrelevant to that provision. The sub-paragraph, as amended, answers the question. I do not seek to divide the Committee on this. The Under-Secretary has said that she will look at the matter and that she accepts the principle of what I am trying to say. Although the Committee does not agree on all of this, there has been considerable support from Labour Members and, by proxy, from members of the Select Committee, who would also like to see this sort of measure. I look forward to seeing what the Government come forward with. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 144, in

schedule 1, page 93, line 17, at end insert—

'(2A) A ''carer'', for the purposes of subparagraph (2), means an individual aged 16 or over who provides or intends to provide substantial care on a regular basis for the patient and does not provide the care in question—

(a) by virtue of a contract of employment or other contract with any person; or

(b) as a volunteer for a voluntary organisation as defined in the National Assistance Act 1948.'.—[Mr. Burns.]

Question put:—

The Committee divided: Ayes 8, Noes 14.

Division number 1 Adults Abused in Childhood — Schedule 1 - Constitution of public benefit corporations

Aye: 8 MPs

No: 14 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Amendment made: No. 153, in

schedule 1, page 93, line 19, at end insert—

'( ) Subparagraph (1)(b) does not apply to a person employed by the corporation for a term of less than 12 months (whether or not renewable).'.—[Ms Blears.]

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I beg to move amendment No. 206, in

schedule 1, page 93, line 20, leave out paragraph 4.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss the following:

Amendment No. 68, in

schedule 1, page 93, line 20, after first 'of', insert '50'.

Amendment No. 176, in

schedule 1, page 93, line 20, after first 'of', insert '500'.

Amendment No. 177, in

schedule 1, page 93, line 20, leave out 'each' and insert 'the public'.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I am keen to get to clause 15, so I will spend less than three minutes on this. The situation is clear. The Government maintain that this form of foundation trust will capture the public imagination and will be the best way forward to involve the local population in the running of their health services.

I believe that that is best done through democratising the commissioning side of the NHS and ensuring that the whole electorate locally elects those who have the ultimate responsibility for commissioning. That would be more than 500 people—as my amendment suggests—and certainly more than the 50 that the Conservative party has suggested. There is no necessary minimum number in the Government's proposals.

The amendment states that if the Government are so confident that this is the best way to capture the public imagination, they should set a threshold. For even the smallest hospital trust, 500 members in the public constituency is the minimum that would be required to demonstrate that this idea has the support of the local community, especially since there is no need for the local authority to approve the discussion. Local authorities are elected to represent people's interests, albeit not yet in the specifics of health care commissioning; at least, according to recent Scrutiny Committees.

Amendments Nos. 206, 176 and 177 taken together, as intended, will replace the paragraph:

''The constitution is to require a minimum number of members of each constituency.''

with the words:

''the constitution is to require a minimum number of 500 members of the public constituency.''

Therefore, the amendments must be taken together.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

Is the hon. Gentlemen aware that the very small and highly specialist Royal National Hospital for Rheumatic Diseases in Bath was among the first wave of applicants for foundation hospital status? It would be extremely difficult to find 500 people there to sign up for that.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

It is for the Government to say whether they envisage that there will be no public constituency at all for a small, specialist hospital such as that. I

imagine that they will indicate that, in the model constitution, hospitals such as that will still have a public constituency, not least to capture the poor cleaners and ancillary workers who are contracted out. I do not know the details of that hospital, but those workers are perhaps the bulk of the work force and are certainly the most downtrodden; currently more downtrodden than the clinical staff. Yet the Under-Secretary has said that their only hope of having any say in that mutual is to live in the area of the hospital. That point should be made to the Under-Secretary.

Photo of Andy Burnham Andy Burnham Labour, Leigh

I listen to many of the hon. Gentleman's speeches on health. If they have one unifying theme, it is opposition to targets imposed from the centre. Why does he seek to do that with this amendment, when the Bill, as drafted, leaves that to the local decision making of those on the hospital trust?

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

That is a nice point, which I accept. Our opposition is to politically imposed targets from the centre, not to national standards that have a rational basis. There is clearly a national basis for Government legislation to do all sorts of things. One might argue that everything in the Bill, such as the limit on private patient income, is a nationally dictated standard or target.

It is legitimate for us to ask the Government whether they have the confidence of their conviction in saying that if there is to be a public constituency at all, there should be a realistic minimum number to demonstrate that there is proper public support for it. Such support should not just be for a pure mutual without the quasi-democratic element that we would like and which is best preserved on the commissioning side, where the power to affect NHS provision lies.

That minimum number should be at least 500, but I am open to offers from the Under-Secretary if she thinks that it should be more than that. That is 1 per cent. of a population of 50,000, which is the typical population in the area closest to a district general hospital. Surely that is not too much to ask. I ask the Government to hint at what they anticipate the minimum number will be. If the Under-Secretary claims that it will be 1,000 or 5,000, I may not disagree with that either. She will have to state the percentage of the local population that she thinks is the minimum that is required to show the public support that is so important for this model.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

The Liberal Democrat amendments are an odd set. The first, amendment No. 206, would scrap a minimum limit, and the others would impose one. As ever, the Liberal Democrats are trying to have their cake and eat it.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

We were clear when we took advice on how to draft the amendments. As I understood it, one had to remove that paragraph in order to put in the others. I have already said that the amendments must be taken together. They have been grouped, and I have spoken to them en masse. When he gains a little more experience of how Committees work, the hon. Gentleman will see that if amendments are chopped up in that way, he will fall victim to the same approach. Taking some of his amendments in

isolation would result in the same sham forensic analysis, so I counsel him on that.

Photo of Chris Grayling Chris Grayling Shadow Minister (Education)

I am glad that I did not seek medical guidance from the hon. Gentleman. If my reading of his amendments is correct, it would leave paragraph 4 as reading ''500 and public'', which does not make sense.

I want to speak to amendment No. 68, which is designed to probe and understand the Government's thinking on the minimum constituency levels. The Under-Secretary will be aware of that issue, as it has given rise to much discussion and debate.

The Select Committee spent some time considering the issue and its report stated:

''Another key issue is what proportion of local people will need to be members to achieve a reasonable representation of the local community. While the Secretary of State told us that for his local NHS trust, serving a population of between 300,000 and 500,000 people, a membership of only 50 people would cause him concern, he did not want to commit himself to saying what a minimum proportion might be.''

Given the issues that constituency sizes could generate for foundation hospitals, the Government must indicate what they believe to be the right level. Although, as my hon. Friend the Member for Westbury pointed out, that level might necessarily vary—based on catchment area—and the specific nature of the hospitals, guidance is required in setting the framework of an electoral system. The Select Committee placed a strong emphasis on that in its conclusion to that same section when it stated that

''the proposed system has no minimum standards for involvement and no coherent guidelines for how constituencies will be drawn up to ensure that patients and the public throughout the country have an equal opportunity for involvement. Instead, the Government has left the determination of what is a radical alteration to democratic accountability in the NHS to the unelected leaders of individual NHS organisations, which could lead to a system of patient and public involvement that is fragmented, confusing and inequitable.''

There is some logic to that conclusion.

There will be differences, but if the guidelines are not in place, hospital trusts will experience problems. Most obviously, the result may be too few members of the public being involved in the local hospital trusts to meet the genuine criteria of community ownership. Inevitably, those people who come forward first will have a particular interest and agenda. A small public constituency within a NHS foundation trust might be unrepresentative of the local community of that trust, simply because of the nature of the people who volunteer for involvement. We will discuss some of the issues that that might generate when we debate the next group of amendments.

A small self-selecting constituency could have significant implications for the governance of the trust. The most obvious example, to which the hon. Member for Birmingham and Hall Green has alluded, is entryism. It is conceivable that, in a trust with a relatively small public constituency, a particular group might seek to become deeply involved in the management of the trust, thus using the public constituency system in a way that might adversely affect patients. That might be for religious, moral or ethical reasons. A group of people may be hostile to a

particular form of treatment; abortion is the obvious example, but it is by no means the only one.

Today, there are many ethical issues surrounding medical treatment. Such people may seek to put themselves forward for membership and, subsequently, election to the governing body of a hospital. ''A Guide to NHS Foundation Trusts'' states:

''Registration as a member will bring with it, as a minimum, the right to: participate in the election of representatives to the Board of Governors'',

and to

''receive information about the NHS Foundation Trust''.

Neither of those is problematic in its own right. Those concerned will have the right to

''be consulted, for example, on matters relating to how provision of NHS clinical services by the NHS Foundation Trust could be improved.''

Therefore, they have a right of consultation over what the trust does.

There is nothing wrong with the principle of electing governors, but electing governors with a particular agenda may provide an opportunity to alter the direction of the hospital trust policy. Although it may not be possible for a trust to refuse to carry out a particular form of treatment, it is possible for the governing body to mandate the management to divert resources, ensuring that that treatment can be provided only to the minimum possible level and that other areas have priority. Entryism is possible, whether for religious, moral, ethical, political or other reasons. Unwarranted entryism works against local community interests. Without a framework, and without careful thought at the centre about how to protect foundation hospitals against it, a flawed system could be put in place that ultimately could lead to local incidences of entryism, and none of us wants to see that happen.

My other point concerns staff. The Government talk about different levels of staff membership. It should be universal. The idea that the constitution would require a minimum number of members from each constituency made me anxious. All members of staff should automatically be entitled to be part of a constituency, and we will return to that debate, given some of the entry criteria to register as a member. The word ''minimum'' should not be applied to staff members. I do not wish to see an opportunity for specific groups in the work force to secure undue influence in the workplace by being the minimum membership. A requirement of only 50, 100, 150 or 200 staff members none the less creates the opportunity for a particular group to take control of the staff constituency. The Labour party experienced entryism during the 1980s, when Militant infiltrated some branches and extremists took over some trade union branches. Restricting access, or simply setting a limit for the staff constituency, is wrong. All members of staff should automatically be part of it. Someone who works for an NHS foundation trust should automatically have the right to vote.

For those reasons—our anxiety about the potential threat of entryism and about the use of the word ''minimum'' in respect of staffing—will the Under-Secretary give us her thoughts on the issue? That element of the Bill is seen as vague, and it aroused considerable concern when the Select Committee discussed it at length. Can she explain what programme the Government believe is appropriate to put in place to justify it?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health) 11:15 am, 15th May 2003

It is already on record, in the Secretary of State's evidence, that we do not have a particular or specific figure in mind for minimum membership of a NHS foundation trust. That would go against the principles that we seek to establish. We want to set up a framework, but it is up to both organisations to reflect the diverse nature of their communities and the different circumstances in which they operate and then to prepare a constitution. The Secretary of State must approve it and support the progress of the application to the next stage. The independent regulator, in making up his mind whether or not to grant an authorisation, must also take into account the detailed provisions that will be in that constitution.

On Tuesday, we had a lengthy debate about trying to get the balance right between what we prescribe in the schedule as the framework of what the constitution has to contain, and then said, quite rightly, that it is a matter for the local organisations, together with their local communities, to put forward their proposals.

There is a stage in this process—at second stage application—when the trusts have to consult with the local community, including the private care trusts and the universities, so that there is a general buy-in to the shape of that constitution.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

I appreciate that there is an attempt to get the balance right, that not too much is being prescribed from the centre and that things are being left for decision at local level. However, the current leaders of the NHS trusts in each locality, who have been applying for foundation trust status, are described by the Select Committee as

''unelected leaders of individual NHS organisations''.

Does the Under-Secretary know whether they have any expertise in putting democratic institutions in place?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

They are beginning to gain some experience and expertise. I freely admit—we said so on Tuesday—that this is a new venture, and a new journey that we are asking people to make. Together with the freedoms and flexibilities of an NHS foundation trust comes the connection with local communities, and these will require new skills.

We talked about the support that the centre can offer, because we recognise that we cannot simply ask the new trusts to do it and leave them in a vacuum. That is not our intention at all. It is very clear that freedom and flexibility come with local accountability. They are two sides of the same coin and are crucial to success.

The external reference group, which I have already mentioned, contains a range of people with a great deal of skill and experience in good governance. We are drawing up a source book that the trusts will be able to use. The NHS regularly draws up tool kits on good guidance and practice so that people are not reinventing the wheel. We do not want every single NHS foundation trust to have to start from scratch in terms of governance. There is now a good body of governance experience, not just from the Government but from a whole range of organisations.

We recently set up the Commission for Patient and Public Involvement in Health as a result of the Health and Social Care Act 2001. That body is now up and running, and is charged with a specific statutory requirement to come up with protocols, training, support and guidance to make sure that public involvement right across the NHS, in terms of fulfilling the statutory duty under section 11 of the Act, meets those very high standards of public involvement that we also want to see reflected in the NHS foundation trusts.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

I am fascinated by this source book, and I shall look out for it with great interest. In it, I imagine, there will be guidance, and I hope that some of that guidance will refer to the sort of numbers that hospitals should be looking for in order to establish their membership. If, as I presume, the membership is quite fluid, what would happen if it dropped off dramatically? How would that affect the continuing quorate nature of the bodies that we are discussing today?

Photo of Hazel Blears Hazel Blears Parliamentary Under-Secretary (Department of Health)

The legislation envisages there being a large enough membership to ensure proper elections to both the board of governors and the board of directors. It is necessary for there to be a minimum membership, which is why we have the provision in schedule 1 that the constitutions should set out the minimum membership. There must be enough people to elect a board of governors and a board of directors. The independent regulator, who will be responsible for ensuring that the authorisation is complied with, will be conscious of the need to ensure that the ability to have democratic elections to the board of directors and the board of governors is maintained.

I echo the concerns of my right hon. Friend the Secretary of State. If the minimum number for the organisations were to be specified at 50, that would cause us concern, because we envisage that this will be an active participatory democracy, and there would be a need to keep members fully engaged and informed. It is not simply a matter of joining the organisation and then forgetting about one's membership. There are responsibilities that come with membership, and one of those is to be an active and ongoing member. That is extremely important.

Photo of Andrew Murrison Andrew Murrison Conservative, Westbury

I am having difficulty getting a feel for the size of membership that the Under-Secretary has in mind. She must have a ballpark figure of the proportion of the local population that will be members. Perhaps she will share those thoughts with the Committee. However, I am still concerned about what happens when membership falls off, which it might do. There might be an initial burst of

enthusiasm, after which people disappear into the woodwork. What happens then? In particular, what happens to the legality of the organisation concerned?

It being twenty-five minutes past Eleven o' clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half past Two o' clock.