LAMBETH, SOUTHWARK AND LEWISHAM AREA HEALTH AUTHORITY (Hansard, 3 March 1980)

§ The Secretary of State for Social Services (Mr. Patrick Jenkin)
With permission, Mr. Speaker, I wish to make a further statement about the future of the Lambeth, Southwark and Lewisham area health authority (teaching).
I reported to the House last Tuesday. On Wednesday I had a meeting with Mr. Stanley Hardy, chairman of the AHA(T), who told me that the soundings he had taken among members of the authority led him to believe that the authority would in future accept its responsibility to comply with cash limits. On Thursday I received a letter from the solicitor for the London borough of Lewisham, writing on behalf of the three London boroughs which were the applicants in the case before the court informing me that his clients would not object to the commissioners remaining in a purely caretaking role until 31 March 1980. He envisaged that the authority, on resuming control from 1 April, would have freedom of action to review decisions taken by the commissioners, but accepted that the authority's expenditure should stay within cash limits. As the House knows, there is a clause in the Health Services Bill now in Committee which, if approved by Parliament, will impose a statutory duty on all health authorities to comply with the Government's requirements on cash limits.
The House will, I know, recognise the importance of these expressions of intent and the recognition they imply of the position which it was always my intention to sustain. In these circumstances, I thought it right to invite members of the AHA(T) to meet me last Friday to review the position, and I am grateful to the many members who at such short notice attended the meeting. The discussion took place in a helpful and constructive atmosphere. For their part, the members present, nearly two-thirds of the total membership, unanimously assured me that they will be prepared to accept an obligation to keep the authority's expenditure within cash limits. For my part, I assured the members that on that basis they would be free to review any of the decisions taken by the commissioners, and, moreover, that during the short care-taker 30 period up to 31 March the commissioners would not initiate any changes of major significance. I saw the commissioners' task as preparing for an orderly handover to the members of the authority, taking only such routine decisions as were essential to maintain services in the meantime.
It seems to me that this would be a not unsatisfactory outcome and I have accordingly decided not to appeal against the judgment of Mr. Justice Wolff but instead to arrange for the members of the authority to resume their functions from 1 April next.
The solicitors for the three councils may seek a formal order from the court within the next day or so. Since the judgment effectively declares invalid the directions that I gave last August, legislation will be necessary to regularise the position over the past seven months and to give immediate backing to the status of the commissioners up to the end of this month. The Government are therefore laying a Bill before the House to give legal effect to the decisions and actions taken under the directions from 1 August 1979 up to and including 31 March 1980. Copies of the draft Bill are available in the Vote Office.
My right hon. Friend the Leader of the House will make a statement about the arrangements for the Bill in due course, following discussions through the usual channels. I offer my full and unqualified apology to the House in this matter and in particular for the trouble and inconvenience which the Bill will cause to right hon. and hon. Members.

§ Mr. Orme
The Secretary of State's statement reflects the serious misjudgment that he made as Secretary of State. He cannot hide from that. He has come to the House today with a full apology but it might have been better if he had made a full apology last Tuesday. His statement shows that his advice and his Department's advice was radically wrong. I am sure that the House will take note of that.
I give credit to my hon. Friend the Member for Nottingham, West (Mr. English) for raising the matter last week He put his finger on the central point. The Government must now introduce a retrospective Bill. My hon. Friend 31 deserves credit for his parliamentary astuteness.
The Secretary of State referred to cash limits and the undertaking which he says he has received from the area health authority. What steps did he take last July to ascertain from the AHA whether it was prepared to live within the cash limits? Does he agree that he acted in a rather peremptory manner in dismissing that authority without consultation? We shall require to discuss several issues when we have sight of the Bill. My hon. Friends and I have not yet been able to obtain a copy of the Bill which contains retrospective elements which we shall want to examine.
What is the position of the two hospitals which have been closed by the commissioners? Will the AHA be able to reopen them? Is the Secretary of State talking about retrospective cash limits or those which affect the next financial year? What about the patients who have been removed from those hospitals? Have any patients suffered because of the commissioners' action? What about the staff who have lost their jobs or who have been promoted? Will salaries be reduced and will those who have lost their jobs get them back?
The Secretary of State spoke about taking action to protect the commissioners. I hope that he will allow employees and patients who have cause to take action to take that action. The proposed Bill is a constitutional measure which should be taken on the Floor of the House. There must be adequate time to deal with it.

§ Mr. Jenkin
The right hon. Member for Salford, West (Mr. Orme) has asked me many questions. He said that it was inappropriate that I did not offer the House an apology last Tuesday. On that day only 24 hours had elapsed since the court's decision and I had not seen a transcript of the judgment. I had not decided whether I should appeal. I am sure that the right hon. Gentleman will recognise that had I appealed successfully there would be nothing for which to apologise. I decided not to appeal but to take the necessary action to give effect to the judgment of the court. It is right that I should offer my full apologies to the House, which I now repeat.
32 The right hon. Gentleman asked whether the cash limits referred to the past or the future. The members of the area health authority have recognised that it is sensible for the commissioners to remain in power until the turn of the next financial year. Therefore, the undertakings refer to the cash limits for the next financial year. The right hon. Gentleman also asked whether I had acted in a peremptory manner in purporting to make a direction. Such a charge is valid only without reference to the long period which preceded the decision on 1 August during which the authority consistently overspent its limits.
The right hon. Gentleman said that the Bill would be retrospective. He asked whether it would be possible for the area health authority to reopen the two hospitals. In order to regularise the position for the past, the Bill must have retrospective effect. That point was made by the hon. Member for Nottingham, West (Mr. English) in his Standing Order No. 9 application last week. The future of the two hospitals is for the new authority to decide. It is free to change decisions reached by the commissioners but it must do that within the context of the cash limits which we have laid down.
The right hon. Gentleman asked about patients and staff. Precisely to avoid the legal doubts and wrangles that could arise without a Bill, I ask the House to approve the Bill. I understand that if the applicants go to court and obtain an order for a prerogative writ giving effect to the judgment of Mr. Justice Wolff everything that has taken place since I made the directive last August will be held to be invalid. Since that could give rise to considerable personal and corporate difficulties it is sensible for the House to pass the Bill. We shall discuss such matters when we debate the Bill.

§ Mrs. Fenner
I regret that my right hon. Friend was so badly advised legally. Is he now totally satisfied that the cash limits to which the Lambeth, Southwark and Lewisham area health authority has agreed will mean that the Medway health district will not be as deprived as it has been in the last several years, by up to £3 million, because of the continuing profligacy of the Lambeth, Southwark and Lewisham authority?

§ Mr. Jenkin
I assure my hon. Friend the Member for Rochester and Chatham (Mrs Fenner) that it is the other areas in the South-West Thames region that have had to bear the brunt of the overspending by this authority in the past. I am given to understand by the commissioners that last month they were on course to ensure that expenditure would be within the cash limits this financial year. Perhaps I can add this, to reassure my hon. Friend: it is imperative that all units in the area should continue to exercise financial constraint for the remainder of the financial year and beyond. Uncontrolled spending now will only make the area health authority's task next year even more difficult.

§ Mr. English
We must all be grateful to the right hon. Gentleman for following the precedent of the late right hon. Herbert Morrison, although a little belatedly. We should also be grateful to him for proposing to restore this health authority slightly more than a month after judgment was given in its favour.
Now that the right hon. Gentleman has read the judgment, does he realise the distinction between its first, second and third conclusions? The second conclusion says that the advice on which he acted was seriously misleading. The third relates to his own personal actions. Why is the right hon. Gentleman asking members of this health authority to obey cash limits when even now he has not issued a direction under section 17 asking them to do so? In other words, the statutory duty that he says will be introduced for every health authority he could have introduced for this authority or any other by a direction under section 17. Why did he sack the members of that authority first instead of asking them, or laying a duty on them, to do what he is still only asking them to do in a non-formal way?

§ Mr. Jenkin
The hon. Member for Nottingham, West (Mr. English) certainly made his points clear when he spoke last week. However, it is a little hard for me to be charged with announcing a Bill belatedly when if I had decided to appeal against this judgment clearly a Bill would not have been necessary and the matter would have remained outstanding until the appeal had been heard.

§ Mr. English
So did Herbert Morrison.

§ Mr. Jenkin
I do not think that the Herbert Morrison precedent is on all fours with this case. There are other cases of Bills going through to validate past actions of the House and I think that each one has to be judged on the facts of its case. The main burden of the hon. Gentleman's case was to ask why I did not issue a direction under section 17. This was exactly the point put last Tuesday by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) who spelt out very clearly what the process would have been. It was stated in my affadavit to the court that I considered whether a directive under section 17 of the Act would have been appropriate, because if it had not been observed I would have been able to take powers, not under section 86 but under section 85, to dismiss the area health authority. The reason why I did not choose that course was one of timing. I was advised that it would have been necessary to delay so as to give the authority time to respond or fail to respond to the directive under section 17. I had in mind that five months of the year had already passed and that every month that overspending continued the task of bringing this authority back within its cash limits would have been that much more difficult. It was for that reason that I considered that urgent—indeed, emergency—action was necessary, although in the event it turned out that I did not take the action in accordance with the provisions of the section.

§ Mr. McCrindle
Given the unfortunate advice originally tendered to my right hon. Friend the Secretary of State, will he accept from me that to have achieved his financial objectives while obeying the letter of the law is, for some of us, a reason for congratulation rather than continuing condemnation?

§ Mr. Jenkin
I wish to make entirely clear, as I did on Tuesday, that I am answerable to this House for the activities of my Department. I accept that responsibility in full. That is why I am here today answering questions.

§ Mr. Tilley
Does the Secretary of State realise that while he may be able to achieve retrospective amnesty for his commissioners and their staff he can in no way compensate those of my constituents who had to suffer prolonged illness 35 and pain because of the illegal cuts in health services that he has imposed? Will he accept and recognise in the House that much of the tragic medical harm caused by this decision can never be put right?

§ Mr. Jenkin
I am not sure that that was a helpful contribution. If the health authority had done last August what the majority of its members agreed with me on Friday they would do in future, that health authority would have had to take some difficult and unpalatable decisions and I am far from clear that those decisions would have been necessarily different from the decisions taken by the commissioners after I appointed them. That will be a matter on which the health authority can comment when it reviews the decisions—as it no doubt will wish to do—once it has resumed control of the area. What is perfectly clear is that there are 90 area health authorities in England, and when 89 of them were prepared to take the decision to live within the cash limits and one was not, it was simply not tolerable that that authority should be allowed to continue to get away with it. The authority has now recognised that and I am grateful for its undertaking. I hope that the future will be happier than the past.

§ Mr. Mellish
This is a very sad, sorry and abject story. I regard it as appropriate that 1 April is the day on which the area health authority will be reinstated—especially for the present Government Front Bench. If the area health authority decides—I understand it is more than likely that it will do so—that the closure of the hospital in which I have great interest should never have taken place and had nothing whatever to do with the arguments about the cash limits to which the right hon. Gentleman refers, and decides to reopen that hospital, may I have a personal and categoric assurance from the right hon. Gentleman that he will not interfere as Secretary of State but will allow the authority to reopen the hospital?

§ Mr. Jenkin
I can tell the right hon. Member for Bermondsey (Mr. Mellish) that the date of 1 April was a date that was suggested first in court by the applicants' counsel and, secondly, in a letter from the council's solicitors when they wrote to me last week. I was happy to 36 accept that date. It seemed to me to be a sensible date which would allow for an orderly return of responsibility to the members of the authority.
As regards St. Olave's Hospital, I am well aware of and sympathetic to the right hon. Gentleman's profound concern for that hospital. I have made clear that it is open to the members of the authority to review the decisions that have been taken. I have no doubt they will want to do that, but they will have to work within the constraints of the money which will be made available to them in the next year. If the authority accepts that, there is no reason why I should not equally accept a decision that the authority may come to.

§ Mr. Moate
May I say to my right hon. Friend that it will not be a sad, sorry and abject story for others living in the South-East Thames region if this area health authority abides by the cash limits which in the past it has blatantly, flagrantly and persistently abused? The way in which my right hon. Friend has apologised to the House for what has happened reflects immense credit upon him

§ Mr. Jenkin
I am obliged to my hon. Friend.

§ Mr. Christopher Price
Will the right hon. Gentleman confirm that at the press conference on 1 August when he announced his policy—a press conference that I attended—he was warned that his action was illegal? Does he agree that he was warned on at least five subsequent occasions that he was breaking the law in approaching the matter in this way? Will he further confirm that his response to Mr. Stanley Hardy's letter in setting up the area health authority without constraints means that he has no intention of applying any section 17 directions within the 1980–81 financial year? Finally, when will King's College Hospital be able to resume fitting pacemakers?

§ Mr. Jenkin
If the hon. Member for Lewisham, West (Mr. Price) was able to say on 1 August, without having seen the terms of the direction, that the direction was illegal he must have second sight beyond the capability of most hon. Members. It is a fact that on every ground bar one on which the applicants' counsel 37 sought to upset my direction the argument was held to be wrong. Perhaps the hon. Member should consult his hon. Friend the Member for Nottingham, West (Mr. English) on the question of a section 17 direction. The hon. Member for Nottingham, West was asking me to put on a section 17 direction, and I gather that the hon. Member for Lewisham, West is implying that I should not make such a direction.
My answer is that I am considering whether a section 17 direction should be applied, but I have to bear in mind that there is a provision in the Bill now before Parliament which, if Parliament accepts the clause, and when the Bill becomes law, will apply an automatic statutory duty to all authorities to comply with their cash limits.
The question of cardiac pacemakers at King's College Hospital is a matter for the local management to decide in conjunction with the consultants, but I emphasise that all units in this area must continue to constrain their expenditure or they will make the task of the area health authority when it resumes control after April even more difficult.

§ Mr. Pavitt
Is the Secretary of State aware that the rigid application of cash limits on this and all other authorities has a multiplicity of short-term and long-term results? Therefore, will the right hon. Gentleman publish a document to enable the health authorities and all those working in the Health Service, people who have to operate within the limits, to be aware of those consequences? Is he aware of the effect on nursing ratios in the four years following the year in which the cash limit is applied? Is he aware of the bonanza of equipment spending that took place in February this year in order to spend certain sums—within cash limits, it is true?

§ Mr. Jenkin
The hon. Gentleman's questions go a little wider than my state- ment. With the cash limit regime we are using the same machinery that our predecessors established and which, as I think is now widely recognised, is essential in order to constrain public spending within the limits established by the Cabinet.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I propose to call two questions from the Opposition Front Bench and one Opposition Back Bencher. Clearly, the House will have a chance to debate the matter at greater length if legislation is on its way.

§ Mr. Archer
Does the Secretary of State accept the proposition which he says was put to him by the solicitor for Lewisham council, namely, that when the authority resumes control it will have freedom of action to review decisions taken by the commissioners? If that is so would it not follow that those who believe that they have acquired contractual rights may find them revoked? Is it proposed in the indemnity Bill to deprive these people of a remedy?

§ Mr. Jenkin
I would have thought that I had broadly accepted the point that was put to me by Mr. Joy, the borough solicitor, that the authority, on resuming control, should be entitled to review decisions. But it seems to me that the consequences of any Bill—and doubtless the right hon. and learned Gentleman will wish to examine carefully the terms of the Bill—would be to validate the decisions that have been taken by the commissioners in the meantime in order to create the certainty which it must always be part of the process of law to create. If the members of the authority then wished to change the decision which had been made by the commissioners, they would do so in the full knowledge of any legal consequences of making those changes. However, these are matters which we shall no doubt wish to examine in greater detail when we come to the Bill.

§ Mr. Race
Given that the Lambeth, Southwark and Lewisham area health authority (teaching) will be reorganised, as will be every other area health authority under clause 1 of the Health Services Bill, will the Secretary of State give an assurance that the cash limits for the Lambeth, Southwark and Lewisham authority will imply that no variations to services to patients need take place in 1980–81 until the reorganisation envisaged in the Bill is effective?

§ Mr. Jenkin
I do not think that it would be for me to give such a direction to the area health authority. Every area health authority is always concerned to 39 look at its priorities and to ensure that the totality of its spending is the best that it can organise for the purposes of serving the public who live and work in the area.
On restructuring, it has been widely felt for some time that this area would benefit from restructuring on the lines perhaps of the proposals outlined in "Patients First". The Government intend that the structure of all health authorities should be reviewed on those lines, and it would certainly be worth considering the Lambeth, Southwark and Lewisham area in the context of that review.

§ Mr. Moyle
Will the right hon. Gentleman confirm—and this is what the chairman of the area health authority was on record last July as having said—that the first communication that he received from the Secretary of State was one which sacked him and his authority? How does he square that with the attempts said to have been made to persuade the area health authority to toe the Goverment's line?
It is not clear what happens to those who have sold goods to the area health authority. Will they be paid? What happens to people who have been promoted since last July? Will they be held to have drawn illegal increases in salary?

§ Mr. Jenkin
The procedures which were adopted before I purported to give a direction were clearly spelt out in my affidavit to the court, and are clearly on record in the judgment of the court. I think that I do not need to elaborate on that now.
It is precisely in order to avoid the kind of difficulties to which the right hon. Gentleman is referring that we have now considered it necessary to introduce a Bill. Notice has been given today and the Bill will be available and printed tomorrow. There is a draft Bill in the Vote Office now. If we did not have a Bill, having now decided not to appeal and to accept the judgment, there would be a risk that decisions that have been taken whether on promotion, the purchase of goods, the dismissal of staff, or a whole range of other matters, could be open to attack in the courts on the ground that the decisions were not properly taken. It must be in the interests of the entire House, of the area and of the NHS that 40 that situation is remedied just as swiftly as possible.

§ Mr. Cryer
On a point of order, Mr. Speaker. The subject we have just been discussing is a matter of a Minister accepting responsibility for a serious error of judgment. Yet again, a copy of the statement was not provided for right hon. and hon. Members which, if provided, would have given us greater information. However, as the Minister stood up to make his statement, copies of it were being handed round to the press. I see no reason why the press should not have them, but, equally, I think that Members of Parliament should have copies in advance so that they are better informed and can ask better informed questions, particularly where a Minister who admits that he has made a serious misjudgment is coming to answer to the House.
We cannot simply leave this matter to the discretion of the odd Minister who feel some sort of obligation to provide Members with a statement as well as providing them for persons outside. Can you use your influence, Mr. Speaker, to press on all Ministers to issue their statements in the Vote Office in advance as a matter of course?

§ Mr. Speaker
The hon. Gentleman knows, as the House does, that he has raised that question with me on another occasion. It is a long-established custom, so I understand, that copies of statements are handed out for those who have to report them. I have heard and understood the point which the hon. Gentleman has raised, but it is not a matter within my discretion or control.

§ Mr. Price
Further to that point of order, Mr. Speaker. The Secretary of State said that the Leader of the House would make a business statement on when we might consider the Bill, which, if passed, is to be cited as the National Health Service (Invalid Direction) Act 1980. May we have an assurance now from the Leader of the House that he will not rush that business through this week and that he will give us all due time to consider the matter?

§ Mr. English
Further to the point of order, Mr. Speaker. I wonder whether you could confirm that there are two 41 sorts of Act of Indemnity—the non-controversial sort, when the Bill goes through all its stages instantaneously on the Floor of the House, and the more controversial sort, which it has been customary upon occasion to refer to a Select Committee? The latter would seem an appropriate procedure in this case. A Select Committee can call evidence and determine who misadvised the Minister, how far he himself was responsible for his own official action, and so on. Will you confirm, Mr. Speaker, that there are those two sorts of precedent?

§ Mr. Speaker
It is not for me to decide the course which will be followed in connection with this Bill. What I am quite sure is that we have not heard the last of it.