HC Deb 13 March 1980 vol 980 cc1583-663
Mr. Orme

I beg to move amendment No. 4, in page 1, line 13, at end add— '(2) It shall be the duty of the Secretary of State to consider any claim made by a patient or potential patient of the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) that that patient or potential patient was prejudiced by action taken under the authority of the instrument of 1 August 1979 and if upon examination the patient's claim appears to the Secretary of State to be established then such patient shall receive compensation for any losses incurred by him as a result of such action under the said instrument.'.

The Chairman

With this it will be convenient to take the following:

Amendment No. 5, in page 1, line 13, at end add— 'It shall be the duty of the Secretary of State to consider any claim made by a supplier or potential supplier of any goods or services to the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) that the supplier acted or was induced to act to the supplier's detriment by any action taken under the instrument of 1st August 1979 and if upon examination the supplier's claim appears to the Secretary of State to be established then such a supplier shall receive compensation for any losses incurred by him as a result of such action under the said instrument.'.

New clause 1—Damages.

Mr. Orme

We are concerned, first, about the possibility of considering any claim made by a patient or a potential patient of the Lambeth, Southwark and Lewisham area health authority and to secure that he or she shall not be prejudiced by the action taken by the instrument which the Secretary of State introduced on 1 August 1979. There could be cases of kidney operations, for instance, not carried out at Dulwich hospital, or cardiac operations not carried out at King's, because of the intervention of the commissioners. We should welcome an explanation from the Secretary of State about what happened in regard to patient care and the involvement of patients during the period of the commissioners' rule.

Can the Secretary of State perhaps explain to the Committee how he intends to deal with patients who feel that they have a genuine complaint against the Service? There are very difficult problems, particularly for patients who have had operations deferred. This may sometimes be merely inconvenient, but sometimes it can be a great disadvantage to the patient, particularly if a heart complaint or a kidney complaint is involved, which could be of a very serious nature.

We wonder whether the Secretary of State has made any assessment of this situation and what happened when the commissioners were in control, and how any patients who feel that they have been placed at a disadvantage can proceed. There is a difference between a person feeling that he or she has been disadvantaged and proving that that is the case, but I think that such persons have a right to have their cases considered. Will the Secretary of State, therefore, inform the Committee what steps he will take in this particular regard, because we feel that this is an important aspect?

I do not know whether any of my hon. Friends has any specific examples of this, but perhaps one of them, if he catches your eye, Mr. Weatherill, will be able to give a specific example of one of his constituents who has suffered in this way.

Amendment No. 5 deals with the same principle in regard to suppliers of goods or services and contracts which may have been entered into prior to the suspension of the area health authority and its replacement by the commissioners. We should like to know the legal position of such suppliers and contractors and whether the Secretary of State is prepared to look at their cases. We should also like to know whether he has had any such cases brought to him.

We are not seeking in any way to raise hypothetical questions, but we feel that there may be cases which have not come to light and that they ought to be covered by the amendments which are before the House. We believe, in regard to both amendment No. 4 and amendment No. 5, that where it is established that a patient or a supplier of goods or services has been disadvantaged, that person or firm should receive compensation for any losses arising from that situation.

That explains our position very briefly and succinctly, and no doubt the Secretary of State will address himself to the two amendments.

My hon. Friend the Member for Nottingham, West (Mr. English) will argue his new clause if he catches your eye, Mr. Weatherill.

Mr. Guy Barnett (Greenwich)

I intervene more or less at the invitation of my right hon. Friend the Member for Salford, West (Mr. Orme). I was asked by a prospective patient at King's College hospital to visit him at his home on precisely the issue raised by my right hon. Friend and I was in difficulty about advising him.

I speak with some hesitation about this case because clinical considerations are involved. The Committtee will understand why I prefer not to mention the name of my constituent. If the Secretary of State wishes to investigate this case, I shall be happy to let him know in confidence the name and address of my constituent.

I understand that my constituent is suffering from a serious heart complaint. The Greenwich district hospital referred him to King's College hospital for major surgery—I think it was open-heart surgery. My constituent visited the consultant, who told him that he would like to be in a position to operate immediately; that because of the constraints on expenditure which had been imposed by the commissioners an immediate operation was impossible; that he would be all right for the time being and that if his condition deteriorated the consultant would need to go to the commissioners to obtain permission to undertake the operation which he believed to be necessary.

As a layman, I have always understood that a medical or clinical opinion of someone who is highly competent to make a judgment of that kind is unlikely to be overruled by an area health authority or commissioners.

In the brief time available to me I have been unable to check the facts. It may be that the story is other than as I have described, but I went to my constituent's home and talked to him and his wife, and they seemed to be highly reputable people. He is retired, so no question of compensation arises.

I was highly disturbed by the tale my constituent told me. I understand from press reports and discussions with other hon. Members who represent constituencies in South-East London that there may be other similar cases. The Committee would welcome advice from the Secretary of State on the issues that could arise under the amendment.

4.45 pm
Mr. Ronald W. Brown (Hackney, South and Shoreditch)

I support the amendment. In his speech on Second Reading, the Secretary of State prayed in aid the argument of his predecessor that the area health authority had overspent by about £3 million. Later, when explaining how far the commissioners had achieved their objective, the right hon. Gentleman said: Thirdly, they made a few decisions, specifically aimed at reducing patient services as a means of achieving the essential cost savings."—[Ofticial Report, 11 March 1980]; Vol. 980, c. 1171.] To have achieved the savings they did, the commissioners must have had to cut very deeply into patient services. It does not matter now whether the Secretary of State was right or wrong in his judgment of whether they should have done that. What matters is that he was out of order. What he did was illegal.

In putting forward amendment No. 4, we are not arguing the morality of whether in principle the Secretary of State was right and whether his intention was honourable. What he did was illegal. Therefore, in considering the amendment we have to decide whether anyone who suffered from that illegal act should be compensated. It is right that the constituent to whom my hon. Friend the Member for Greenwich (Mr. Barnett) referred, and any others who may be similarly affected, should be invited to make a claim in accordance with the provisions of the amendment. We are not arguing whether what was done was right or wrong. We are arguing that it was illegal and, therefore, that anyone who suffered from that illegal act must be given redress.

The Minister argued that what he did illegally in August should now be made legal. In other legislation that is now going through Parliament, another Minister is arguing that an action performed legally by a person in April should become illegal in November. That is an extraordinary situation. We are saying in one Bill that although he acted illegally we will indemnify the Minister, yet in another Bill we are saying that a decision taken legally by a local authority in April will become illegal at the end of November and financial sanctions will be taken against the local authority. The Government are not in a clear state of mind about what they are doing. These two Bills are incompatible.

The Bill cannot make legal an injury that has occurred. I will not be a party to a Bill that tries to do that. It is against the fundamental rights of the individual. It cannot be right to indemnify the Minister and not to compensate a person who has suffered an injury. Amendment No. 4 is designed to redress that position.

I am not so sure that I would go to the stake for amendment No. 5 on behalf of suppliers. The fundamental issue still remains that an illegal act remains illegal. People who have been injured must be properly taken care of.

Mr. Orme

We are talking about suppliers who employ people and who have been disadvantaged by the Secretary of State's action.

Mr. Brown

That is correct. We are talking about the people on whom there has been a spin-off effect.

Conservative Members must understand that it is no good cutting a little piece out of society and saying that it is a special one-off case and will never be referred to again. Once there is a precedent—we operate on precedents—and someone is hurt, in one way or another, whether personally or through business, by an illegal act of the Government and that is validated, it will happen again in many other areas. We are talking about the Health Service today, but there are a whole range of other areas where it might happen. It will be no use Conservative Members then complaining that the circumstances are different. If they oppose amendments Nos. 4 and 5, they will undermine the basic freedoms of the country. They must not try to persuade themselves that it does not matter.

The House must be prepared to defend the freedoms of people and say that those who are hurt by illegal actions of the Government must be properly taken care of. We are not talking about the Secretary of State or minor issues. We are talking about a great issue. We are talking about the rights of people who have been hurt by an illegal act of the Government. The interests of the individual are as great as those of the Government. The House will rue the day if it forgets that.

Dr. Brian Mawhinney (Peterborough)

The right hon. Member for Salford, West (Mr. Orme) introduced the amendments with feeling and in an appropriate fashion. However, he will not be surprised to learn that I do not agree with the point that he was making. It is not a matter of legality and illegality. The purpose of the Bill is to legitimise actions that were taken that were not legitimate at the time.

I rise to make one point about the amendments and not to explore the territory again. If for no other reason, I do not accept the amendments because of the use of the word "potential". The word is wide in its context. I hope that the hon. Member for Greenwich (Mr. Barnett) will accept that I am not in any way referring to the specific case that he mentioned. I simply wish to make a general point. I do not wish to impinge on his comments. I do not understand what is meant by a "potential" patient. We are all potential patients if we are passing through that area at any given moment.

Mr. Christopher Price (Lewisham, West)

Will the hon. Gentleman accept that there is a point between the time at which the patient has gone to his general practitioner, has been referred to the hospital, has had a preliminary interview with the consultant concerned, and is then waiting? If he accepts that the word "patient" wholly encompasses the case of an individual from the moment he attends the surgery of his GP, whether or not his condition has been fully diagnosed, that is one thing. Some hon. Members feel that the word "potential" protects the individual.

Dr. Mawhinney

I am grateful to the hon. Gentleman. He illustrates the point that I am trying to make, namely, that the matter of who is a patient and who is a potential patient is for debate. We could all claim if we were registered with a practitioner under the Health Service that technically we were all patients, even though we were not activating our patient status by visiting a general practitioner or receiving hospital treatment.

Among other reasons, I do not accept these amendments because of the use of the phrase "potential patient". There is no definition of that phrase. There are no bounds to it. If a person was passing through the area at that time, he would be a potential patient of the area health authority. What does that mean? It does not mean that everyone should lodge a complaint against an AHA on the ground that he is a potential patient. That is not the intention, but it is a possibility under the amendments.

Amendment No. 5 refers to potential suppliers. What constitutes a potential supplier? Is a potential supplier one who on a previous occasion has supplied and has, therefore, staked his claim to future consideration? That may be. However, it could equally be argued that everyone in the country who runs a firm that manufactures, services or sells goods that may be of interest to an AHA could be a potential supplier. I know that it is not the intention of the Opposition that all potential suppliers should lodge a claim against an AHA, but the wording of the amendment would make it a possibility.

I have more substantial disagreements with the amendments, but on this ground alone they are unacceptable.

Mr. Roland Moyle (Lewisham, East)

What would happen in the case of a supplier who submitted a tender for supplies and whose tender would have been accepted because it was the cheapest but for the fact that the commissioners told the supplier that they were no longer interested in purchasing those supplies because they wished to cut back, and who accepted the decision because he thought that it was legal? How does the hon. Member think that that supplier should be treated?

Dr. Mawhinney

When people are invited to tender, they do so on the understanding that the money will be available to pay for the goods that they supply. As I understand, what has been said and what is being regulated in the Bill is that money was not available to meet a particular case. I happily accepted the right hon. Gentleman's intervention, but it does not relate to the point with which I wish to deal.

The word "potential" is too ambiguous, and, therefore, I cannot accept the amendments.

Mr. Christopher Price

It is a little sad that the Chamber is so empty this afternoon when we are dealing with legislation, which is both retrospective and affects the rights of individuals. The House has traditionally taken this form of legislation seriously, even though the issue concerned may have been more trivial than the issue that we are discussing today.

I hope that the amendments will be taken seriously and that they will not be considered in any party political framework. The sort of matter that we are discussing today does not occur often. There have been cases such as that of Tameside. In that case the judgment was made quickly, and no action was taken before the final judgment of the House of Lords.

In these amendments we are dealing with a case where over a period of eight months thousands of transactions took place concerning individuals, the purchase of supplies and the conditions of service of employees. The individuals were treated and the supplies were purchased in a way that, to use Mr. Justice Woolf's words, vitiated the system. I am not as good a lawyer as the Secretary of State. However, the amendments have been tabled to ensure that by correcting the vitiation, which is the purpose of the Bill, we do not simultaneously deprive individuals of rights that they would have otherwise had and to which they would have been entitled.

5 pm

It may be said "If the AHA had been in office and the commissioners had not been called in, there would have been very much the same pattern of decisions." I do not want to argue that contention. It may be true or it may not be true, but that is not the point. The fact is that there has been vitiation. If we are to take the law seriously, we must be careful to ensure that in passing retrospective legislation of this sort we do not simultaneously deprive individuals of their rights.

I shall give one or two examples to support my hon. Friend the Member for Greenwich (Mr. Barnett). It is well known that heart operations at King's College hospital had been proceeding until October-November 1979. Certainly they proceeded until 31 August, when the commissioners took their first big bunch of decisions. It is well known that the operations had been proceeding at a rate which, in the clinical judgment of the consultants concerned, was reasonable having regard to the needs of those requiring such operations.

It is interesting to refer to the minutes of the second formal meeting of the commissioners. It is worth reminding ourselves that they were not public minutes. They had to be leaked by public-spirited people to the citizens of Lambeth, Southwark and Lewisham before we knew what decisions were being made. On 30 August 1979, a few weeks after the commissioners were appointed, among the many decisions that the commissioners are recorded as having taken was one to make the closure of 71 acute beds at King's College hospital. I could mention many consequences that flowed from that closure but I shall pick only one. A number of my constituents and constituents represented by other hon. Mem- bers who were expecting to enter King's fairly soon—[Interruption.]—to have heart operations were not able to do so as quickly as anticipated.

Mr. Douglas Hogg (Grantham)

I am sorry to interrupt the hon. Gentleman. I am having some difficulty understanding his argument. Is he suggesting that we should give additional rights over and above those that already exist, or is he suggesting that we should ensure that existing rights are protected?

Mr. Price

I thank the hon. Gentleman for his apology for interrupting me. He was not the only one.

Mr. Robert Mellish (Bermondsey)

My hon. Friend's speech was causing excitement.

Mr. Price

I want to preserve existing rights. In the event of litigation arising between a patient and the area health authority, I do not want the patient's case to be, as it were, ruled out of court without any argument merely because Parliament has enacted the Bill as it stands. The patient should be able to argue his case, whatever it might be, of the negligence of the hospital and not be prevented from arguing it by anything that we do today.

As I have said, I do not have the expertise of the Secretary of State in these matters. I do not know whether the wording of the amendments is exactly right to cover what I have in mind. A number of cases has been presented to me, and I submitted a test case, as it were, to Sir Frank Hartley. I wrote to Sir Frank because I became so sick of receiving letters from the Secretary of State asking me to write to Sir Frank. Towards the end of the commissioners' regime I took the right hon. Gentleman's advice and began writing to Sir Frank. Sir Frank began to answer letters written by myself and other hon. Members.

I think that my right hon. Friend the member for Salford, West (Mr. Orme) will agree that in the early stages of the commissioners' regime they were uncertain of their relationship to Members of Parliament. In this respect I pay tribute to the right hon. Gentleman. The uncertainty of relationship was ironed out about two-thirds of the way through the period during which the commissioners were in power. I do not know whether my right hon. Friend the Member for Bermondsey (Mr. Mellish) will join me in paying that tribute. Consultation became rather better about two-thirds of the way through the regime than it had been at the beginning.

I wrote to Sir Frank. I do not know whether he passes all the correspondence that he receives to the Department. I think that he probably does. If that is the arrangement, my letter should be on the file. I shall not mention the name of the constituent on whose behalf I wrote. She was expecting to go into King's earlier this year. She has just been admitted. I have no means of telling whether she jumped a queue. She was acutely ill at home for nearly six weeks before she could be admitted for her operation. If the 71 beds had not been illegally closed by the commissioners, there is no doubt that she would have been admitted at a proper time for her to have her operation according to the clinical judgment of the consultant. The consultant has made it clear to all his patients—I know that this applies to patients other than my constituents—that they have not been able to receive the treatment that they were entitled to expect from the National Health Service because of bed closures. I do not think that there is any real disagreement about the facts.

Mr. Roger Moate (Faversham)

I apologise to the hon. Gentleman for not having heard the earlier part of his speech. There have been closures in other areas where the legality of the action is not in doubt. Presumably the hon. Gentleman would argue that in those areas individuals have been prejudiced by closures. Why should individuals in the area in question have rights of redress against the authority?

Mr. Michael English (Nottingham, West)

Because there was illegal action.

Mr. Moate

Whatever the legalities, it would mean that in certain areas some patients, or potential patients, would have a great advantage at law over those in other areas where no such rights exist.

Mr. Price

If the Secretary of State takes action which creates illegality over seven months, our prime duty is to protect the interests of individuals. If there is a problem in the constituency of the hon. Member for Faversham (Mr. Moate) as a result of hospital closures, his constituents have a right to go to law to settle the matter. Those closures took place under legal procedures. These closures took place under illegal procedures. I do not know of one, but if a constituent of mine were to take action against the area health authority for any reason the danger is that unless the Bill is passed with an amendment of this kind in it a judge might say that the House of Commons had exonerated the Secretary of State and the area health authority in every particular and that the action could not continue. We have a duty to safeguard these matters.

The Secretary of State for Social Services (Mr. Patrick Jenkin)

I am following the hon. Gentleman's argument closely, but it may not have been easy for him to appreciate the point made by my hon. Friend the Member for Grantham (Mr. Hogg). We would like those hon. Members who are pressing this amendment to make clear whether the illegality of the direction leads them to argue that their constituents should be put in a more privileged position than someone who would have been affected if the area health authority had legally taken the same decisions as the commissioners. Part of the case made on Tuesday by right hon. and hon. Gentlemen was that the area health authority—though it may not have made the same decision as the commissioners—would, left to its own devices, have brought the expenditure within the limits by the end of the year.

Mr. Price

I understand the importance of that argument and I take the point made by the hon. Member for Grantham (Mr. Hogg). I want a court to be able fully to take into account—should there be litigation between a constituent of mine and the area health authority—not only the situation as it was but also the illegality of the commissioners' position.

The Secretary of State says that that means that I want more favourable treatment for those people who were subject to the decisions of the commissioners. I do not know about that, but the Secretary of State also says that he wishes to prevent a court of law from taking into account—the issues might be covered by amendments Nos. 4 and 5—the fact that the authority was being administered by a collection of individuals who were illegally appointed and whose appointment was eventually vitiated.

The Secretary of State says that if the AHA had governed the affairs of the authority it would have taken decisions which were roughly the same as those taken by the commissioners. I believe that it is important that the Secretary of State understands that there were tremendous differences between the status of the AHA and that of the commissioners. Before the appointment of the commissioners, the AHA took its decisions in public and the four community health councils were consulted on every point. We contend that an AHA operating in a democratic context would be far more likely to make coherent decisions about cuts. Such decisions would be taken sensibly and would not involve risks to the lives of patients as happened under a bunch of commissioners who met in secret.

Mr. David Crouch (Canterbury)

The hon. Member for Lewisham, West (Mr. Price) has argued strongly that the commissioners acted illegally because they were illegally appointed and that as a result some patients and some contractors were put at a disadvantage. The hon. Gentleman seems to forget, however, that it is the status of the commissioners only that is illegal in the administration of health and that above them there is the legal regional authority and that above that there is a Department which is also legal. The commissioners do not act alone. There is a monitoring system written into the Act, and what the commissioners did was monitored all the time. In that way there was some monitoring of their actions.

Mr. Price

I accept that the regional health authority and the Department monitored the situation as best they could a month or two after the appointment of the commissioners. It was some months before we had a clear decision from the Secretary of State as to whether that monitoring role would continue.

5.15 pm
Mr. English

Does my hon. Friend accept that the regional health authority was not particularly loyal to its area health authority? The regional authority did not bring the action against the Secretary of State. It was the district council that brought the action. The regional health authority was prepared to abandon the area authority.

Mr. Price

I do not wish to go into that issue, though there is much that I could say about the regional health authority and its relationship with the commissioners.

Mr. Ronald W. Brown

If my hon. Friend, as a constituency Member, had approached the RHA about the activities of the AHA in his area, he would have been told in no uncertain terms by the RHA that the actions of the AHA were its own responsibility. This was a worse situation because the commissioners were an illegal body set up on a UDI basis.

Mr. Price

I agree that that is what I would have been told. That is what I was told, although I pay tribute to certain members of the regional health authority for taking pains to pursue their monitoring role throughout the regime of the commissioners.

If anyone can believe that the transfer of patients from Guy's hospital to New Cross hospital as happened under the regime of the commissioners could have taken place under a democratically elected Health Service body with community health councils working properly and an area health authority which included democratic representatives, he will believe anything.

Mr. Moate

Does not the hon. Gentleman remember that that is exactly what happened two or three years ago at Hounslow hospital? I remember it well because I was a patient at that hospital and was sorry to see it closed. The circumstances of the transfer from Hounslow were exactly as those described by the hon. Gentleman, and the transfer on that occasion took place under a democratically elected body.

Mr. Price

If the hon. Gentleman wishes to talk about Hounslow, he can make his own speech. I deplored the events at Hounslow as much as anyone else. I know the democratic representatives of Lambeth, Southwark and Lewisham. They took their responsibilities seriously, as is evidenced by the various court cases and the work that they did on the area health authority. Those representatives rightly considered that under the law their duty to patients and their legal duty under the Act came before any extra-legal duty to keep within cash limits. They took their responsibilities seriously. They would not have allowed the disgraceful events that took place at Guy's hospital.

I urge the House not to regard this matter as trivial. It is serious. I see no reason why the Secretary of State should not accept the amendments. He has said that he is sorry. He has humbly apologised for his action. An earnest of the reality of that apology would be the acceptance of the amendments.

Mr. Douglas Hogg

I listened with interest to the hon. Member for Lewisham, West (Mr. Price). I agree with the general premise from which he started, namely, that it is important that the Bill should not take away existing rights. I am sure that he is right.

However, I disagree with the hon. Gentleman on another matter. I have considered the Bill carefully, and I am certain that it does not deprive people of existing rights. I pressed the hon. Gentleman about whether he was trying to give people new rights rather than preserving existing ones, and he said that it was not his intention to give people new and fresh rights; all that he was seeking to do was to preserve existing rights. The reality is that those who put forward the amendments are trying to give people rights of action which are not presently known to the law and which are greatly in excess of rights possessed by other people.

Mr. English

Does what the hon. Member says about the amendments apply to new clause 1?

Mr. Hogg

I would never overlook a new clause standing in the name of the hon. Member for Nottingham, West (Mr. English). I shall deal with it in detail, because it needs specific comment.

The hon. Member for Lewisham, West said that he was anxious that the courts should adjudicate on all relevant matters. He emphasised more than once that there should be a right of action before the courts. He suggested that perhaps the amendment and the new clause were not drafted as happily as he wished. He is right. The new clause and amendments Nos. 4 and 5 deprive the courts of any right of action. They do not give a right of action in the courts, but they give the Secretary of State a wholly arbitrary and unfettered jurisdiction to award whatever compensation he feels fit. There is no precedent for applying to the Secretary of State, and no method of appealing against his decision.

If hon. Members suppose that the new clause and amendments Nos. 4 and 5 give people a right of action before the courts, they are wholly mistaken. They merely extend the discretionary power of the Secretary of State, which can be exercised without appeal. Much as I respect the Secretary of State, I am not at all sure that he wishes to exercise such unfettered jurisdiction.

Mr. Christopher Price

Does the hon. Gentleman agree that the Secretary of State's discretion could be reviewed, as it could be previously?

Mr. Hogg

I wondered about that. The answer is probably "No". This is a departure from existing practice. I do not think that it falls within any of the recognised categories for judicial review. That is my view, but I should be delighted to talk about it at any time.

I deal next with new clause 1, about which the hon. Member for Nottingham, West was so anxious for a comment. I am always willing to comment on the hon. Gentleman's new clauses. The new clause is wholly otiose and unnecessary. It is also badly drawn. If somebody has a right to damages, which is what is being contemplated by the hon. Member for Nottingham, West, or an existing cause of action—for example, in negligence—there is nothing in the Bill which deprives him of that. Although the new clause may have given the hon. Gentleman great pleasure to draw, it is unnecessary and rather unattractive because it does not include the right to go to court on the issue of damages.

Amendment No. 5 caused me considerable surprise. It contains a cause of action that is wholly unknown to the law. What is apparently contemplated is a supplier, or potential supplier, of goods who has acted to his own detriment under the instrument. I ask myself "What on earth is this?" Is it misrepresentation? If it is, the law can act against those responsible for misrepresentation. Is it an alleged breach of contract? If it is, there is an existing cause of action that is not affected by the Bill. What is it? The truth is that it is a new animal which is wholly unknown to the law and which will not be recognised by the courts. It is designed to meet a situation which has never previously given rise to a cause of action.

We have been asked "What about a tenderer? Should not he be compensated?" Anyone who asks that knows nothing about the law. A tenderer frequently changes his position as a result of an invitation to treat. Unless a tenderer has entered into a valid contract, in no circumstances can he have a claim against anyone. Hon. Members are seeking to give a cause of action that is unknown.

Exactly the same comments apply to amendment No. 4. We are told that people who are prejudiced should have a right of action, but what does "prejudiced" mean? Perhaps it means that someone is insulted, upset, embarrassed or made miserable. That concept is not known to the law. Either there is an existing right of action, in which case the right of action is preserved and the Bill does not affect it, or there is not. The amendment is an attempt, by a side wind, to change the law in wholly uncharted spheres.

There is another objection to the amendment. The law has always been anxious to ensure that damages do not become oppressive—hence the concept of foreseeability as the test in damages. I note with some surprise that the amendment excludes any reference to any concept of foreseeability and that compensation is entirely within the unfettered discretion of the Secretary of State.

If there were anything in the Bill that would deprive people of existing causes of action, I should be the first to join the hon. Member for Lewisham, West and support the amendments. However, having considered it carefully, I am confident that there is nothing in the Bill that will deprive people of existing causes of action. That being so, I urge the Committee to reject the amendments.

Mr. Mellish

I have never heard the hon. Member for Grantham (Mr. Hogg) speak before. He really is a chip off the old block. Like his distinguished father, he even laughs at his own jokes. Like his father, when he gives advice he regards that as the end of the matter. He takes the view that we need not ask anybody else because he has spoken. I enjoyed his speech, but I do not quite believe all that he said. I shall want even more distinguished lawyers to advise me. I also wish to listen to the Opposition Front Bench spokesman.

Let us escape from the legal jargon. The commissioners were appointed by the Secretary of State. It is now known that that appointment was illegal. The commissioners did not know anything about the area and they took advice from Mr. Carruthers and others who had been in the district for a long time. Their terms of reference were both short and simple. Sir Frank told me that the Secretary of State had told them to find a £1½ million saving in the Guy's district by October of last year. That body should not have been appointed.

5.30 pm

The commissioners claimed that the only way that they could find that saving was to close down a hospital. At no time did they attempt to justify the reasons for closing the hospital, other than by the fact that they had to comply with the instructions of the Secretary of State to find a £1½ million saving.

The hon. Member for Canterbury (Mr. Crouch) spoke about the regional board, and I respect its position in the matter. As I understand it, the Secretary of State gave powers to the commissioners to do certain things within that saving, with certain limitations. Sir Frank did not come to St. Olave's to see the hospital that he intended to close. I begged him to do so, but he would not come. Instead, he took advice from those who sat around him.

The hon. Member for Canterbury must not think that the regional board had any control in the matter. It was instructed to save £1½ million, and it was advised by local people—who were a pretty contemptuous lot—to shut St. Olave's.

To use legal jargon, the premise I make from that position is that the closing of St. Olave's was carried out by an illegally appointed body and was, therefore, illegal. If that is a correct premise, a number of things follow.

The hon. Member for Grantham spoke about tendering. Anybody who tenders hopes that his tender will be accepted. I hope that the hon. Gentleman will listen to what I am saying.

Mr. Douglas Hogg

I am listening.

Mr. Mellish

I am glad to hear that. If the hospital was closed illegally—as has been proven in the courts—what about the considerable number of firms which held contracts with that hospital? Because the hospital was closed, they lost their contracts. I know of a catering firm which had given years of service to St. Olave's. Some building contracting firms were engaged in work at the hospital until it was closed, and their contracts were broken.

Mr. Hogg

rose—

Mr. Mellish

The hon. Gentleman must let me finish. I know of a small car hire firm which received the bulk of its work from St. Olave's. It provided a first-class service. Its contract was broken when the hospital closed. When St. Olave's closed, 200 beds were lost, and the services that applied to those beds, which were carried out by various firms, were lost also.

Mr. Hogg

I appreciate the right hon. Gentleman's point. I am sure that he does not wish to ignore the distinction between the termination of a contract and the wrongful breach of a contract. Under English law, it is only the wrongful breach of a contract that gives rise to an action in damages. That right is preserved in the Bill. The termination of a contract has never of itself given rise to an action in damages.

Mr. Mellish

I am not a lawyer, but I will argue that point with the hon. Gentleman any time that he likes. It is a matter of common justice. If a firm loses its livelihood because of an action taken by a body—in this case the commissioners—which is then proved to be an illegally established body, is the hon. Gentleman saying that in law nobody wants to know about the matter? I do not believe that to be the case. I do not care how distinguished a lawyer is the hon. Gentleman.

On the assumption that the amendment is defeated, I hope that the hon. Gentleman was right when he said that anybody who has certain claims in law will not be deprived of rights of action. We shall hear whether the Secretary of State has the same interpretation of the Bill when he replies.

One of the saddest aspects of the closure of St. Olave's was that we had established a new ward for incontinent geriatric patients. They are the worst type of patient with which any hospital has to deal. The ward was specially designed to deal with those patients and contained many features such as special toilet facilities and special heating. Those facilities cost a great deal of money. When that ward was about to be opened, the silly commissioners closed the hospital.

That ward would have catered for about 20 patients, and I know of one or two people who should have gone there. I am not a scaremonger, and I am not saying that those patients would be alive today if they had been able to go to St. Olave's. The truth is that, because the hospital closed, those patients never had the chance to use the new ward. Two of those patients died. I am not saying that they would not have died anyway. Their relatives were very distressed. For many years they had asked me to do something for those patients. The residential homes provided by the borough councils would not take them because they were incontinent. Ordinary hospitals would not take them.

Stan Hardy told me that had the AHA stayed in office it would not have closed St. Olave's. It did not consider such a closure to be one of the ways to save money. It believed that in the long run it would cost more money to close St. Olave's. That is why the Secretary of State must consider the figures again. I beg of him not to take any notice of the civil servants. They will give him briefs on any subject, either for or against. That is what they are paid to do. I ask him to use his judgment in the matter. If he does that, I am sure that he will find not only that the closure did not save money but that it actually cost money.

Mr. English

I wish to draw the attention of the Committee to new clause 1. The hon. Member for Grantham (Mr. Hogg) was a little unfair when referring to the new clause. He may be right about the technical drafting, but when he has been in the House a little longer he will realise that we often table amendments in a hurry in order to draw attention to a point. We do not necessarily bother about the finer details of drafting, because we know that if the House takes the point the drafting will be sorted out.

The new clause, in principle, has two advantages. The hon. Member for Grantham was a little confused when he referred to my new clause. He was thinking about the amendments tabled by my right hon. Friend. I carefully left out from my new clause both the Secretary of State and all his civil servants. I made it clear that whatever action was taken should be taken by an arbitrator and not by the Secretary of State. There is that slight—and perhaps fortunate—difference between my right hon. Friend's amendments and my new clause. The hon. Member for Grantham was a little unfair in referring to the Secretary of State when discussing my new clause.

The intention behind the new clause is a simple one, namely, to protect individuals while at the sametime indemnifying the Secretary of State and his civil servants from any action that they have taken. It is phrased in rather more general terms than the amendments that have been tabled, because it covers all the amendments. We are discussing amendments Nos. 4 and 5. Amendment No. 4 refers to patients, and amendment No. 5 refers to suppliers. Later in the debate we shall discuss amendments Nos. 7, 8 and 9, which refer mainly to employees.

I wish to declare two interests. The first is not a financial interest in the normal sense. During the week, when the House is sitting I live within this area health authority's boundaries, as do my wife and child. We have benefited from the services of the authority.

In the Register of Members' Interests it will be found that I am a sponsored member of the General and Municipal Workers Union. Although it does not have members in the two hospitals that were closed, it has members in St. Giles' hospital, where wards have been closed recently.

Let us suppose that all this happened in the United States. The hon. Member for Grantham should know that if his noble father's views had prevailed and if we had a Bill of Rights, it might well include a clause such as the one contained in the American constitution—that there should be no retrospective legislation. In that case, the Bill could not come before the House at all. However, that does not mean that if an American Minister makes a mistake there is not some procedure for dealing with the matter. He could be pardoned by the President, and that would occur. But the point is that anyone who has suffered as a result of that mistake can still be provided with whatever damages he may have been able to receive without the person who has made the mistake suffering. That is the distinction. In America it could not be done by Act of Congress, but it could be done by other means, and it would be done in a different way.

The hon. Member for Grantham is learned in the law—he is also not listening—and he has said that no one would lose any existing rights. However, the Bill states: The instrument…purporting to be a direction…shall have effect and be deemed to have had effect as if it had been a valid direction". Let us suppose for a moment that the Bill were defeated. The present situation would then apply, and a person who had been sacked—[Interruption.] We seem to have a plethora of lawyers in the Chamber, but they are all engaged in talking to one another. Presumably, such a person who had been sacked—I should like the Secretary of State to expound on this—was sacked by an authority which, legally speaking, did not exist. As it had been appointed illegally by the Secretary of State, it had no legal powers. I am not suggesting that it was immoral, but it was illegal. Therefore, I presume that that authority had no power to sack someone. If the Bill were not passed, such a person would have the right to sue for illegal dismissal, which I would have thought was wrongful in any circumstances.

Once the Bill is passed, the instrument…shall…be deemed to have had effect as if it had been a valid direction". Therefore, had it been a valid direction, the commissioners automatically become legal from the point of view of their appointment and their action would also become legal. If they sacked an individual, his dismissal would be perfectly legal. Such a person might be able to take action for wrongful or unfair dismissal in the ordinary sense, just as he could do if he had been sacked by the area health authority. However, that is not what we are talking about. We are talking about a case under which he would not have an action against the area health authority but rather had an action against the commissioners for sacking him at all, because as commissioners they had no legal power to sack anyone. That is the distinction. With the greatest respect to the hon. Member for Grantham, he failed to make that distinction during the course of his remarks.

It is not a question of preserving the existing rights of a person who in any case could appear before a tribunal in respect of unfair dismissal. The point is that any dismissals—even the closure of the hospitals or the wards was illegal —were illegal because they were done by an authority which was illegal and which had no powers in law.

Mr. Douglas Hogg

As the hon. Gentleman is seeking to define the true legal position, does he accept that under the law of England the fact that an act is unlawful does not in the absence of some other recognisable cause of action give a person a right to damages?

5.45 pm
Mr. English

That is probably generally true. If the hon. Gentleman is right, I take it that the Secretary of State will shortly accept my new clause. If that is the case, the hon. Gentleman can have no possible objection to it. The new clause clearly states: Notwithstanding the provisions of section 1 of this Bill, any person who might, but for those provisions, have had a claim for damages against any other person shall be paid such sum as he might so have been entitled to, if the amount of such sum has been agreed by an arbitrator acceptable to both persons concerned or (if agreement between them cannot be reached) by an arbitrator appointed by the Lord Chancellor". I do not think that we wish to pursue the details of that point now, because I know that hon. Members want to proceed to a Division. However, if the hon. Member for Grantham is right, the Secretary of State should not have the slightest difficulty in accepting the new clause. On the other hand, if he is wrong the new clause is essential, because it preserves the rights of individuals which would otherwise be lost under the Bill. That is the object of the new clause, and I hope that the Secretary of State will be prepared to accept it.

Mr. Moate

Many of us have faced hospital closures in our own areas, and we can fully understand the anger and frustration of local residents when such things take place. Those feelings are felt when it is known that the authority is lawful. Therefore, one can well imagine the feelings locally when subsequently it is judged that the authority is unlawful. One can well understand why Labour Members have brought forward amendments of this kind, which seek to provide some satisfaction for local people who feel that they have suffered—I am thinking particularly of patients—as a result of the actions of an unlawfully constituted authority.

Although my right hon. Friend accepts full responsibility for what has happened, nevertheless all of us who defend what he did have a degree of responsibility and must approach the whole question with an element of humility. If there is a case where people seem to be deprived of their legal rights, and if amendments are put forward which would correct that, the Committee should look at them in an open-minded and humble fashion and decide whether it is right to accept them.

I approach the amendment on two grounds. Are people being deprived of legal rights which they otherwise would have had, or will they be given rights that are not enjoyed by other people in other areas? That is what prompts me to make a brief intervention. Two propositions that have been put forward cause me some concern. The right hon. Members for Lewisham, East (Mr. Moyle) and for Bermondsey (Mr. Mellish) suggested that a large number of people who might otherwise have been admitted to hospital were prevented from obtaining hospital treatment, as a result of which they would have a claim for compensation against the hospital authority.

On the grounds of equity, leaving aside the question of legality, it seems to me that that is a proposition which would be hard for any hon. Member to accept. If the right hon. Member for Lewisham, East sees himself as being responsible one day for the administration of the Health Service, I cannot believe that he would countenance a proposition whereby an individual who failed to receive hospital treatment, and failed to gain admission to a hospital, could sue anyone for compensation for the suffering that was caused.

Mr. Ronald W. Brown

The distinction which the hon. Gentleman must draw, in the normal circumstances which he is adumbrating, is that the individual has his rights. But such an individual had no rights under the illegal group which was appointed. That is the issue which is at stake. If the hon. Gentleman supports his right hon. Friend tonight, he is trying to make legal something which was clearly illegal, as a result of which injuries were suffered.

Mr. Moate

The hon. Gentleman is describing the purpose of the Bill, but I do not accept that in normal lawful circumstances a person who is denied admission to hospital has rights to claim compensation because he has not received treatment to which he believes he is entitled. That is my point. Many people are denied admission to hospital. Lawful closures are taking place in many other areas, all of which are deeply regretted, and there are people who feel strongly that they should be entitled to compensation.

Mr. Ronald W. Brown

It is illegal.

Mr. Moate

We know that it is illegal. The object of the Bill is to remedy that situation. We can deal with the problem only by enacting this simple Bill. One would be giving people rights that individuals in my constituency and other parts of the country do not have. Opposition Members referred to people who have been denied access to hospitals. It was said that it was dreadful to transfer from one hospital to another. I am sure that is so. However, it has happened before. Are we to open up the right to claim compensation in other circumstances?

On Second Reading, several hon. Members strenuously argued that the Secretary of State had been ill advised to proceed in that way. They said that it was wrong to assume that the area health authority would resist making the necessary savings which would bring it within the cash limits. Hon. Members cannot have it both ways. It the area health authority had made those savings, it would have taken similar action to that taken by the commissioners. Therefore, I cannot believe that a logical case exists for arguing that individuals have suffered solely as a result of the appointment of commissioners.

Those people might have faced the same problems. It could be argued—as those who kept within the cash limits did—that those savings could and should have been made. My hon. Friend the Member for Grantham (Mr. Hogg) pointed out that if any Back Benchers were to feel that individuals had been deprived of legal rights which they would otherwise have had, we should look at the amendment differently.

Mr. Patrick Jenkin

This has been a valuable debate. Hon. Members have made their speeches in a most moderate and reasonable manner. I am grateful for that. We gave the Bill a Second Reading on Tuesday. The circumstances behind the Bill might well have justified some emotion. However, hon. Members in all parties have approached the issue in a reasonable manner. That has helped the case.

I shall assert once again the purpose of the Bill. Perhaps the purpose has been lost sight of once or twice. The Bill seeks to regularise a position that arose through no act of ill faith on anyone's part. It was a genuine mistake. It resulted in a legal direction which, as the hon. Member for Lewisham, West (Mr. Price) has pointed out, vitiated the appointment of the commissioners. Everything that the commissioners purported to do was therefore illegal. The House gave the Bill a Second Reading on Tuesday and in so doing it appears to have accepted the general intention behind the Bill. The Bill seeks to regularise the position and to ensure that the commissioners should not, and neither should any of the officers of the authority nor I myself—although that was not made much of during Second Reading—find ourselves open to attack through the courts. Someone might claim to have been disadvantaged as a result of events that took place between 1 August 1979 and 31 March 1980.

Hon. Members have rightly addressed themselves to the question of whether the Bill goes further than is needed to achieve its purpose. Does the Bill in any way exonerate the commissioners or their officers from any legal action that might have been brought by a patient had their appointment been legal from the beginning? I can give as firm an assurance as anyone who is not a lawyer can. Indeed, I left the law more years ago than I care to remember. The Bill solely seeks to regularise the position that has arisen as a result of that invalid direction. It does not seek to deprive anyone of any legal rights that he would have had against the authority, or against the commissioners, had the appointment been valid. That is an important point.

Legal action might have been taken by patients, suppliers, employees and others against the authority or against the commissioners. Such actions might have been brought under the law of tort or contract or on the ground of wrongful dismissal. Such actions will be preserved if the case would have been actionable had the appointment been valid. The amendments and new clause concern the question whether there should be some additional right of redress. That is the substantial point. I have used the word "redress" because it is a general term and several different procedures have been mentioned during the debate. That additional right of redress might arise merely because the initial appointment of the commissioners was invalid and might therefore provide some additional cause of action.

During the intervention made by my hon. Friend the Member for Grantham (Mr Hogg) in the speech of the hon. Member for Lewisham, West (Mr. Price), it became clear that the issue concerned whether there should be some additional cause of action simply because my original direction was invalid. Several different propositions have been put forward. I hope that I am not being unkind when I say that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) argued in a by-and-large manner. He argued that anyone who had been disadvantaged should have a right of action merely because the appointment had been illegal. He said that that gave the individual a right that he would not have had if my direction had been lawful. I find that proposition difficult to sustain.

The hon. Member suggested that constituents in the Lambeth, Southwark and Lewisham area should be given some additional right that is not given to those living in Hounslow and Hammersmith. Merton and Wandsworth, or in the City and East London. All those areas have had to face the prospect of hospitals being closed and of changes of use being made because the health authorities in those areas have lived within their limits. Why is it suggested that merely because of the illegality of my direction patients should have an additional right if they have been treated by a doctor or referred to a consultant in that area? I acknowledge the point made by my hon. Friend the Member for Peterborough (Dr. Mawhinney). I agree that we are all potential patients.

Mr. English

I congratulate the Secretary of State on his exposition. He is more precise than the hon. Member for Grantham (Mr. Hogg). Does he not agree that some cases must be clearer than others? It would be difficult to prove that a tenderer who had failed to get a contract would have got it if the authority had been valid. However, it is not particularly difficult to prove that someone who got the sack on a ground other than misconduct, for example redundancy, might not have been dismissed. It would be difficult to prove that he would have got the sack if the authority had been a valid authority. Some cases must be easy to prove on the precise facts, but others can probably never be proved.

Mr. Jenkin

With respect, I do not believe that that is so. Once one goes over the barrier of cases that could have been brought if everything had been validly done, into the grey area of cases where people say that they were injured only because it was the commissioners and not the authority, that the commissioners were illegal and they therefore demand action, I do not see where the line can conceivably be drawn. If we are to have a validation Act of this sort, with the implied indemnity involved, it is inevitable that it has to cover everything. At the same time, to reiterate the point that I made at the outset, it must and does firmly preserve any right of action that could properly have been brought had the appointment been valid. I do not accept the hon. Gentleman's point.

6 pm

The question arises of what happened. The right hon. Member for Salford, West (Mr. Orme) asked what had been done. A large number of things were done in the course of the commissioners' actions. I shall come to how much would have been done had we left the authority in. The case was made forcefully from the Labour Benches on Second Reading that it would have lived within its cash limits. The fact is that the commissioners were there and they made the decisions.

I have a long list of the decisions made. The hon. Member for Lewisham, West has the minutes of the meeting at the end of August, which includes some of those decisions. It has never been concealed that some of the decisions taken under the remit that I gave the commissioners—namely, to bring the spending of the authority within the cash limit for the year—were bound to affect the services to patients.

Mr. Orme

I do not expect the Minister to read out the long list of decisions, but we are entitled to see it, and perhaps he will place it in the Library.

Mr. Jenkin

May I consider that, as I do not wish to give a categorical assurance, but I take the right hon. Gentleman's point?

Part of my discussion on 29 February with members of the authority concerned setting up machinery whereby they could become aware of decisions that had been taken and receive the information so that they could read themselves in. When they took over on 1 April, they should be as much aware as the commissioners of the state of the health authority.

I shall look into the matter and see whether we can make a report available to hon. Members. They are entitled to see it.

Mr. Ronald W. Brown

There is a discrepancy between the right hon. Gentleman's statement on Second Reading, when he said that a few decisions had been made, and the long list that he now mentions.

Mr. Jenkin

I have that list here. The hon. Gentleman is familiar with the minutes of a regional health authority and will know that a great many matters go through minutes. Some of those related to decisions affecting patients. They in-included such things as the closure of St. John's hospital, Lewisham, and the closure of wards and beds in the hospital of the right hon. Member for Bermondsey (Mr. Mellish). I shall always think of St. Olave's as the right hon. Gentleman's hospital.

The point raised by the right hon. Member for Salford, West, which caused us a good deal of anxiety, concerns instructions given to kidney units and the cardiac unit at King's College hospital to slow down operations so that those units, too, should live within their budgets. These were difficult decisions, and it is not disclosing anything to say that the chairman of the commissioners consulted Ministers before finally deciding that that was what he would ask the commissioners to recommend. They were difficult decisions; that has never been concealed.

What happens if there are patients who feel that they were disadvantaged? Should the question of the illegality of the original appointment make any difference? That is what the whole group of amendments is about.

The hon. Member for Lewisham, West said that the courts should be given a chance to examine the matter, but, as my hon. Friend the Member for Grantham pointed out, the amendments moved do not involve the courts but give me a discretion. My advice is the same. It is doubtful whether it was given in a way that would even be justiciable in the courts. Administrative discretion is the alternative. Should I merely have administrative discretion to shell out public money to people who feel that they have been disadvantaged? I hope that I am not putting it unkindly.

The new clause of the hon. Member for Nottingham, West (Mr. English) would establish an arbitration procedure that would do the same thing. All the amendments have one thing in common. They suggest that the illegality of the original appointment should give some cause of action that would not otherwise have been there. That is extremely difficult for the House of Commons to accept.

How could it be argued with any degree of certainty that the area health authority, had it remained, would not have done the same things? I do not know whether it would. The right hon. Member for Bermondsey assured us that Mr. Hardy firmly told him that whatever else he would have done he would not have taken steps in relation to St. Olave's.

Mr. Mellish

Because he did not think that there would be a saving.

Mr. Jenkin

Because he did not think that there was a saving. Two of the commissioners were members of the authority—Mr. Prideaux and Miss Nutta11—and were fully familiar with its affairs. Sir Frank Hartley is an immensely experienced administrator, formerly vice-chancellor of the London university and head of the London school of pharmacy, and a very distinguished man. The commissioners came to the conclusion, on the basis of the information provided by the area administrator and the area treasurer, that it was a way to save money in order to bring their spending within the cash limits. No one can be certain.

Mr. Mellish

To get the record absolutely straight, let me say that Sir Frank told me that the only reason for closing St. Olave's was that he did not see any other way to comply with the Minister's request to save £.12 million in the district. It was with great reluctance that it was decided that the only way was to close the unit completely. At no time did Sir Frank try to justify that.

Mr. Jenkin

I do not quarrel with one word that the right hon. Gentleman says. I shall not repeat what I said on Second Reading, but I fully recognise that that hospital is bound to have a long-term future serving the right hon. Gentleman's constituents and others in that part of London. It merely illustrates the harsh financial necessity of the world that we live in.

On 8 December 1978 the then Secretary of State, the right hon. Member for Norwich, North (Mr. Ennals), wrote to the chairman of the authority. He said: In plain terms your Authority seems intent on spending money which is not its to spend. That is the whole essence of the case and the basis on which the cash limit system operates. It was not the authority's money to spend.

It has been established in the courts that it is the duty of the Secretary of State under the National Health Service Act to provide a Health Service for the nation. It is a duty that can be justiciable, and there have been cases before the courts. In the Hincks case, just over a year ago—I cannot go into details because it is subject to appeal—the judge, in considering whether the Secretary of State was complying with his duty, said: 'to such extent as he considers necessary…' means, in my judgment, that financial resources can and should properly be taken into account by him". The judge went on to say that in that case he had done so. The right hon. Member for Norwich, North was the defendant in that case.

Mr. Christopher Price

I do not think that anyone denies that financial resources are an element that anyone—he or the area health authority—should properly take into account. Will the right hon. Gentleman also accept that although 90 per cent. of the commissioners' actions might have been taken by the AHA, a proportion was intrinsic to the nature of the commissioners and might be viated through that very fact? They are the sort of actions that the commissioners would have taken but the AHA would never have taken. These actions should be subject to judicial review, extending even to the Secretary of State's direction. The right hon. Gentleman should not be so confident that the direction could never be reviewed by the courts.

Mr. Jenkin

I appreciate the point that one must be doubly cautious about expressing any firm legal opinion on anything. The hon. Gentleman was kind enough to say that he was a much less distinguished lawyer than I. He must be a very undistinguished lawyer indeed to say that. I do not think that the hon. Gentleman was present in the Chamber when I explained that my direct experience of the law disappeared well over 20 years ago. I would not claim any special expertise.

The essence of the case made in the amendments and by every right hon. and hon. Member who has spoken from the Opposition side is that the fact of the illegality somehow entitles those who feel that they have been injured to have some form of redress that they would not otherwise have had. The hon. Member for Lewisham, West said that there might have been a few decisions that the commissioners took but the area health authority would not have taken. That could only be founded on hypothesis. But hypothesis seems a poor foundation to establish some form of redress.

I am bound to advise the Committee that it would not be right to accept amendment No. 4 which has been moved in relation to patients who feel that they have been disadvantaged. Amendment No. 5 is even more difficult, for the reasons related to suppliers indicated by my hon. Friend the Member for Grantham. Nor can I recommend new clause 1. As hon. Members recognise, the thread running through the amendments is that people in these circumstances should have an additional claim that would not have been available had they lived in the area of other health authorities in London or anywhere else.

6.15 pm

My hon. Friends the Members for Faversham (Mr. Moate), for Canterbury (Mr. Crouch) and for Peterborough have indicated that the case seems to be based on the proposition that some additional right arises by reason of the illegality, which brings an entitlement to compensation. That cannot be sustained. There is no way that one can draw the line. Everyone accepts that what happened was done in good faith. One wishes that it had been done otherwise. One wishes that it had never been necessary. One wishes that the instructions of the right hon. Member for Norwich, North had been carried out and that the health authority had succeeded in bringing its spending within cash limits, not only in 1979–80 but in 1977–78 and 1978–79. These problems would not have arisen then. The fact is that such action was not taken. All the difficulties then arose.

The hon. Member for Greenwich (Mr. Barnett) raised the case of a constituent that must have touched the sympathies of everyone. I invite the hon. Gentleman to write to me. I should like to look into the matter. Admission to hospital is always a clinical decision and a matter for consultants. I know that cardiac consultants at King's felt deeply aggrieved when asked if they would slow down admissions, but they were already over the budget. It is fair to say that they were asked only to hold back spending to the 1977–8 level, in real terms. That is precisely what the area health authority agreed, in the end, to do. That was before the Budget and before the effects of inflation. Even if one were to accept the line taken by the hon. Member for Lewisham, West, it would be difficult to say that the hon. Gentleman's case would fall on the wrong side. If the hon. Gentleman will let me have details, I shall look into the case.

On general merits, I cannot advise the Committee to accept the Opposition case. I must therefore ask the Committee to reject the amendment.

Mr. Orme

We have listened with close interest to the Secretary of State. We cannot assume that the commissioners acted legally and that actions taken over the last 10 months must therefore be accepted as those of a legal regime. This is a unique case. I do not think that in recent years we have come across a similar case. It demands special action. I would say to my hon. Friend the Member for Nottingham, West (Mr. English) that the Secretary of State created these problems. In a sense, the right hon. Gentleman should answer for them and adjudicate in cases that are outstanding. I ask my hon. Friends to divide on amendment No. 4.

Mr. Ronald W. Brown

I take issue with the Secretary of State. He has not dealt with the issue that by putting in the commissioners illegally in the first place he took away the rights of the people of the area, who were unable to go through normal procedures. Whether or not he thought he was right, the fact is that that was the action that he took. The right hon. Gentleman withdrew deliberately from the people of the area the rights that they would normally have possessed through the area health authority. He took away the democratic process. He cannot argue, now that he finds himself in trouble, that the matter can be put right by indemnifying himself and saying that he must not give anyone more rights than existed before. The right hon. Gentleman took rights away.

The Secretary of State's terminology worries me. He says that he would be open to attack in the courts. If one makes a mistake of the magnitude that he made, that is not a bad thing. It would perhaps dissuade others from doing the same. The right hon. Gentleman argues that others would also be open to attack. Sir Frank Hartley, an experienced administrator, should have made sure that he was all right before accepting what happened.

The right hon. Gentleman argues against giving additional rights. No one is arguing about additional rights. The fact is that people have been hurt and injured by an illegal issue. It is no use the Secretary of State's trying to say that it does not matter. People do matter. The rights of people matter.

I was surprised by the casual attitude of the hon. Member for Grantham (Mr. Hogg). I have never had a high regard for lawyers. Having heard his contemptuous remarks about the rights of the people of the area, I feel sorry for the people of Grantham if they ever go to

him for help. His approach was outrageous.

The amendments may be imperfect in drafting. The right hon. Gentleman knows that there are ways to take care of that difficulty. He has already indicated that he will look at the case to which my hon. Friend the Member for Greenwich (Mr. Barnett) referred, to see whether anything can be done. He has, therefore, accepted the principle of amendment No. 4. That is what the amendment is about. I believe that in the closing phrases of his speech the Secretary of State accepted the principle of amendment No. 4. I beg the Committee to support the amendment.

Question put, That the amendment he made:—

The Committee divided: Ayes 107, Noes 144.

Division No. 220] AYES [6.19 pm
Bagier, Gordon A. T. Grant, George (Morpeth) Paisley, Rev Ian
Booth, Rt Hon Albert Grant, John (Islington C) Palmer, Arthur
Bray, Dr Jeremy Grimond, Rt Hon J. Parry, Robert
Brown, Ronald W. (Hackney S) Hamilton, James (Bothwell) Pendry, Tom
Callaghan, Rt Hon J. (Cardiff SE) Hamilton, W. W. (Central Fife) Powell, Raymond (Ogmore)
Callaghan, Jim (Middleton & P) Harrison, Rt Hon Walter Price, Christopher (Lewisham West)
Cartwright, John Hattersley, Rt Hon Roy Richardson, Jo
Cocks, Rt Hon Michael (Bristol S) Haynes, Frank Robinson, Peter (Belfast East)
Cook, Robin F. Heffer, Eric S. Rodgers, Rt Hon William
Craigen, J. M. (Glasgow, Maryhill) Hooley, Frank Rooker, J. W.
Cryer, Bob Howell, Rt Hon Denis (B'ham, Sm H) Ross, Stephen (Isle of Wight)
Cunliffe, Lawrence Jay, Rt Hon Douglas Sandelson, Neville
Dalyell, Tam John, Brynmor Sever, John
Davis, Terry (B'rm'ham, Stechford) Kerr, Russell Sheldon, Rt Hon Robert (A'ton-u-L)
Deakins, Eric Lamond, James Silkin, Rt Hon John (Deptford)
Dean, Joseph (Leeds West) Leadbitter, Ted Silverman, Julius
Dixon, Donald Leighton, Ronald Soley, Clive
Dobson, Frank Lewis, Ron (Carlisle) Spearing, Nigel
Dormand, Jack Litherland, Robert Stallard, A. W.
Douglas-Mann, Bruce Lofthouse, Geoffrey Steel, Rt Hon David
Dubs, Alfred Lyons, Edward (Bradford West) Stott, Roger
Dunwoody, Mrs Gwyneth McCusker, H. Straw, Jack
Eadie, Alex McDonald, Dr Oonagh Thomas, Dafydd (Merioneth)
Eastham, Ken McGuire, Michael (Ince) Thomas, Dr Roger (Carmarthen)
Ellis, Raymond (NE Derbyshire) McKay, Allen (Penistone) Thorne, Stan (Preston South)
English, Michael McKelvey, William Tilley, John
Evans, John (Newton) McNally, Thomas Varley, Rt Hon Eric G.
Field, Frank Maynard, Miss Joan Wainwright, Edwin (Dearne Valley)
Fitt, Gerard Mellish, Rt Hon Robert Walker, Rt Hon Harold (Doncaster)
Fletcher, Ted (Darlington) Mikardo, Ian Welsh, Michael
Foot, Rt Hon Michael Millan, Rt Hon Bruce Willey, Rt Hon Frederick
Foster, Derek Morris, Rt Hon Alfred (Wythenshawe) Williiams, Rt Hon Alan (Swansea W)
Freeson, Rt Hon Reginald Morton, George Winnick, David
Freud, Clement Moyle, Rt Hon Roland
Garrett, John (Norwich S) O'Neill, Martin TELLERS FOR THE AYES:
George, Bruce Orme, Rt Hon Stanley Mr. James Tinn and
Graham, Ted Owen, Rt Hon Dr David Mr. Hugh McCartney
NOES
Alexander, Richard Berry, Hon Anthony Brinton, Tim
Ancram, Michael Best, Keith Brotherton, Michael
Arnold, Tom Bevan, David Gilroy Brown, Michael (Brigg & Sc'thorpe)
Aspinwall, Jack Blackburn, John Browne, John (Winchester)
Atkins, Rt Hon H. (Spelthorne) Body, Richard Bruce-Gardyne, John
Atkins, Robert (Preston North) Boscawen, Hon Robert Buck, Antony
Baker, Nicholas (North Dorset) Bottomley, Peter (Woolwich West) Cadbury, Jocelyn
Banks, Robert Braine, Sir Bernard Carlisle, John (Luton West)
Bendal, Vivian Bright, Graham Carlisle, Kenneth (Lincoln)
Carlisle, Rt Hon Mark (Runcorn) Hordern, Peter Page, John (Harrow, West)
Chalker, Mrs. Lynda Howell, Rt Hon David (Guildford) Page, Rt Hon Sir R. Graham
Chapman, Sydney Howell, Ralph (North Norfolk) Page, Richard (SW Hertfordshire)
Clark, Hon Alan (Plymouth, Suttton) Hunt, John (Ravensbourne) Parris, Matthew
Clark, Sir William (Croydon South) Jenkin, Rt Hon Patrick Patten, Christopher (Bath)
Clarke, Kenneth (Rushcliffe) Johnson Smith, Geoffrey Patten, Johr (Oxford)
Colvin, Michael Jopling, Rt Hon Michael Proctor, K. Harvey
Cope, John Kershaw, Anthony Rhodes James, Robert
Costain, A. P. Kilfedder, James A. Rhys Williams, Sir Brandon
Critchley, Julian Lang, Ian Rifkind, Malcolm
Crouch, David Langford-Holt, Sir John Rossi, Hugh
Dean, Paul (North Somerset) Lawrence, Ivan Sainsbury, Hon Timothy
Douglas-Hamilton, Lord James Lawson, Nigel St. John-Stevas, Rt Hon Norman
Dover, Denshore Lee, John Shepherd, Colin (Hereford)
du Cann, Rt Hon Edward Le Marchant, Spencer Speller, Tony
Dunn, Robert (Dartford) Lennox-Boyd, Hon Mark Spicer, Jim (West Dorset)
Eggar, Timothy Lester, Jim (Beeston) Stanbrook, Ivor
Emery, Peter Lloyd, Peter (Fareham) Stewart, John (East Renfrewshire)
Faith, Mrs Sheila Lyell, Nicholas Stradling Thomas, J.
Farr, John Macfarlane, Neil Thomas, Rt Hon Peter (Hendon S)
Fenner, Mrs Peggy MacGregor, John Thorne, Neil (Ilford South)
Fisher, Sir Nigel McNair-Wilson, Michael (Newbury) Thornton, Malcolm
Fletcher-Cooke, Charles McNair-Wilson, Patrick (New Forest) Trippler, David
Fowler, Rt Hon Norman Major, John Waddington, David
Fraser, Rt Hon H. (Stafford & St) Marlow, Tony Wakeham, John
Galbraith, Hon T. G. D. Mates, Michael Waldegrave, Hon William
Garel-Jones, Tristan Mawhinney, Dr Brian Walker, Bill (Perth & E Perthshire)
Glyn, Dr Alan Maxwell-Hyslop, Robin Waller, Gary
Goodhart, Philip Mellor, David Ward, John
Goodhew, Victor Meyer, Sir Anthony Warren, Kenneth
Goodlad, Alastair Miller, Hal (Bromsgrove & Redditch) Watson, John
Gorst, John Mills, Iain (Meriden) Wells, Bowen (Hert'rd & Stev'nage)
Griffiths, Peter (Portsmouth N) Moate, Roger Wheeler, John
Grylls, Michael Morris, Michael (Northampton, Sth) Whitney, Raymond
Hampson, Dr Keith Morrison, Hon Peter (City of Chester) Wickenden, Keith
Havers, Rt Hon Sir Michael Murphy, Christopher Wolfson, Mark
Hawksley, Warren Needham, Richard
Heddle, John Nelson, Anthony TELLERS FOR THE NOES:
Higgins, Rt Hon Terence L. Neubert, Michael Mr. Tony Newton and
Hogg, Hon Douglas (Grantham) Onslow, Cranley Mr. Peter Brooke
Hooson, Tom

Question accordingly negatived.

6.30 pm
Mr. Orme

I beg to move amendment No. 7, in page 1, line 13, at end add: (2) The pension rights of any employee of the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) shall not be prejudiced either in respect of contributions payable or benefits earned as a result of any action taken under the instrument of 1st August 1979. (3) It shall be the duty of the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) to review the case of any employee whose pension rights have been so prejudiced. I shall be brief, because basically this is a probing amendment. I ask the Secretary of State to look at the terms of our amendment. We are concerned that any action taken by the commission between the time it came into office last year and 31 March this year should not prejudice the pension rights of any employee. It is possible that an employee had an increase in his emoluments which would mean an increase in his pension rights. Will there now be a reduction in salary which will affect these pension rights?

The Secretary of State must be aware that pension rights are very important to employees of all grades. They guard them very jealously. We are concerned that the illegal actions of last year might have prejudiced the rights of employees and their pension entitlements. I do not need to embellish the point any further.

Mr. Patrick Jenkin

I can give the Committee a reasonable reassurance. The Bill will not do anything but validate what has happened. It will leave the position of those people about to retire as it would have been if my direction had not been invalid.

That is not to say that there might not have been changes in people's emoluments. Some people may have been persuaded to take early retirement as a result of the commissioners' efforts to reduce costs and to bring spending within the limits, but much of this would have happened anyway. One of the recommendations that the area health authority accepted on 30 July last year was the now famous resolution: To achieve the lower staffing levels necessary to reduce expenditure without compulsory redundancy, schemes must be authorised to encourage voluntary retirement and voluntary redundancy, and to effect redeployment of staff where necessary, there should be a vigorous review of all vacancies with a view to delaying replacement or eliminating the post". This recommendation was subsequently accepted and adopted by the commissioners. This is a clear case where many or most of the changes that have taken place in the deployment of staff, including earlier retirement, could well have happened anyway.

Of course, it could be argued that a few people may have been led to exercise the option of early retirement in preference to an offer of alternative employment in the circumstances. In theory, at least, the authority would have been in the same position as the commissioners, but I know of no way in which it could be conceivably possible to draw a distinction between what the commissioners did and what the authority might have done.

I have quoted the resolution passed by the authority before the direction was given, but there is no way of ascertaining what that authority might subsequently have done had it remained in office. Labour Members have argued, both today and on Tuesday, that it had every intention of complying with the cash limits. I do not think that that is true, but if it were there is no possible way of knowing what would have happened.

If individuals were in any way treated unlawfully, in the sense that they would have had a claim against the authority or the commissioners, they will find that that claim is fully preserved in the provisions of the Bill. The amendment would not be appropriate. Therefore, I cannot advise the Committee to accept it.

Mr. Ronald W. Brown

I think that there is another aspect to this. When the commissioners were brought in, many employees found it unacceptable to work for such people, and therefore they could have been persuaded, if offered certain undertakings, to take an early retirement and go. When the Secretary of State put the commissioners in over the heads of the democratically established people, and when the commissioners began the closure process, many people would have gone elsewhere, but they foresaw a period of hassle and trouble. There were difficulties. The trade unions were ill at ease and discussions within them did not lead anyone to feel that it was worth while continuing, because it looked like the demise of the Health Service in that part of London. Some employees might easily have been persuaded to get out and lose the advantages that they might otherwise have had.

Because the Secretary of State's action was illegal, these people have a right to know whether they can have a "recount". The Secretary of State has said that he is very sorry. All that he is saying is that everything that has been done is legal even though it was illegal. People are being prejudiced. I know that the Secretary of State would like to pretend that none of this ever really happened, but it did. People were persuaded to leave their employment earlier than they would otherwise have done, and had the normal processes been operating and had there been a much more harmonious relationship between the unions and the area health authority certain help would have been given. Had the AHA been operating normally, it is likely that these people would not have accepted early retirement or the need to transfer to other work. Therefore, because of the circumstances that exist—not the circumstances that we would like to exist—they have a right.

My right hon. Friend said that this was a probing amendment. There should be elbow room, so that if someone has clearly been deprived of his rights he may obtain redress. There was no longer a relationship between the trade unions negotiating for the staff side and the commissioners in the same way as there was a relationship between the trade unions and the area health authority. That makes a difference. People should be reemployed if possible.

Mr. Orme

I take the point made by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). We cannot assume that events occurred in a legal atmosphere when they took place in an illegal atmosphere. We are not satisfied with the Secretary of State's reply. I shall not press the amendment at this stage. However, if injustices take place we intend to bring these cases to his notice. The Minister and the incoming area health authority might consider ratifying the decisions that were taken, thereby stabilising the situation. I understand that most employees remained. If there are difficulties, the incoming AHA might be able to ratify those decisions and remove the anomalies. Will the Minister take note of that point?

Mr. Patrick Jenkin

I take note of the point made by the right hon. Gentleman. No doubt the authority will wish to consider the position.

Referring to the points made by the hon. Member for Hackney, South and Shoreditch (Mr. Brown), I should point out that we are dealing with few people. That is not a reason for not ensuring that justice is done. If injustice were done to one person, the Committee would wish to consider it. My information suggests that no one was made redundant or retired compulsorily. All those whose posts disappeared were offered alternative employment. There have been 25 voluntary redundancies since 1 August. In the Guy's district there were seven. One part-time clerical worker and six domestic workers accepted redundancy payments. Two are still employed but are considering early retirement. In the King's district one member of the clerical staff accepted a voluntary redundancy payment. In the Lewisham district there were seven voluntary redundancies and seven voluntary early retirements. In the Guy's district 20 staff resigned to take other jobs.

The hon. Gentleman said that perhaps these people felt that the conditions had become so awful that they were moved to change their jobs, although otherwise they might have stayed. It is difficult to see how that could possibly form the basis of a special claim. I do not see how one could judge whether one person made a decision for one reason and another person for another reason.

The amendment seeks to ensure that the superannuation rights should be safeguarded and preserved. The Bill emphatically does that. There is no reason why anything prejudiced by the illegality should not have been put right by the Bill. The Bill was carefully drawn to achieve that result. No one seriously suggests that it does not.

Mr. Orme

We take note of what the Secretary of State said. We shall judge him by his actions. If injustice is created, we expect him to take steps to put it right. We hope that the AHA will take note of the point that we made about its ratifying previous decisions.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Moyle

I beg to move amendment No. 8, page 1, line 13, at end add— '(2) Any employee who has incurred loss of emoluments as a result of actions taken pursuant to the instrument dated 1st August 1979 shall receive compensation for that loss until such date as the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) reaches a final decision on the said employee's future employment, such compensation to be assessed on the basis of increasing the employee's emoluments to a level equal to the average of his emoluments calculated on a weekly basis for the three months prior to the date of loss. (3) The date of loss is to be agreed in negotiation between the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) and the employee concerned or any representative to be appointed by him to act on his behalf.'.

The Chairman

With this it will be convenient to take amendment No. 9, in page 1, line 13, at end add— '(2) It shall be the duty of the Secretary of State to ensure that any National Health Service employee who ceased to be employed by the Lambeth, Southwark and Lewisham Health Area by virtue of any decision reached by the Commissioners appointed under the aforesaid instrument of 1st August 1979 shall have the choice of resuming his previous employment and forgoing any emoluments paid to him for loss of office/or accepting the status quo, such choice to be exercised in writing and addressed to the Area Administrator.'.

6.45 pm
Mr. Moyle

The discussions on the Bill have revealed the formula adopted. All the actions of the commissioners running the Lambeth, Southwark and Lewisham area health authority since they were appointed on 1 August 1979 are to be ratified and made legal. The improvement in the position of those who benefited as a result will be confirmed. A person who was promoted by the commissioners will remain promoted. We shall deal with the employment force whose position was made worse as a result of the illegal decisions of the commissioners for the Lambeth, Southwark and Lewisham health area. Under the formula adopted in the Bill, large numbers of people will remain prejudiced.

On Second Reading, the Under-Secretary of State claimed with confidence—the Secretary of State did so again this evening—that there were no cases of compulsory redundancy in the health area. I see that the Secretary of State nods. I am not sure how the Government can be confident about that. Yesterday I asked the Secretary of State what was the number of unfilled vacancies among the staff of the Lambeth, Southwark and Lewisham area health authority (teaching) on 1 February of the current year, compared with 1 October 1978. I was told that that information was not held centrally. It would be difficult to make an assessment about the precise number of compulsory redundancies in the health area if the information for which I asked was not held centrally. We take the matter with a little reservation.

We were told that there were a number of voluntary redundancies in the area. The Secretary of State gave the figures. I do not challenge those.

I take the point made by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). A number of people felt that the conditions in the health area, as a result of the administration of the commissioners, were such that they wanted to get out. The amendments propose that there should be a review of those cases. If those who voluntarily accepted redundancy now wish to change their minds and return to employment in the area health authority, now that it is about to take over, they will have the opportunity to volunteer their services to the authority and to be accepted. The compensation to which they may be entitled under the amendment may then be assessed and agreed with them. That applies to loss of emoluments and loss of employment.

At least one case of constructive redundancy occurred. It was not covered precisely by the amendments. This might be a good opportunity to raise the matter. I refer to the position of Mr. Stan Hardy, the chairman of the area health authority, who was a particularly loyal supporter of the Secretary of State. On the famous night of 30 July he sought to have a resolution accepted by his area health authority which would have pleased the Secretary of State. For his pains, it was thrown out. In the period during which the authority was in suspension he remained active. He sat on staff appeals committees to allow that side of the authority's work to go forward. Nevertheless, in October his salary, which amounted to about £5,000 a year, was removed from him. It would be interesting and worth while to know how this case of constructive redundancy will be dealt with.

There are, of course, a finite number of cases with which we are concerned. We are not asking the Secretary of State to cast his bread upon the waters. Most of the redundancies or losses of emoluments which occurred and which have to be compensated for would probably fall in respect of St. Olave's hospital. There, of course, nobody who wanted to carry on working for the Health Service was prevented from doing so, but such people were transferred from St. Olave's to Guy's or New Cross hospital in most cases. The idea was that they should be transferred at their St. Olave's salary, but a number of them were earning bonuses at St. Olave's and the terms and conditions of service at either New Cross or Guy's were such that they were unable to earn a bonus, so the result of the transfer was that they lost money.

We have heard from my right hon. Friend the Member for Bermondsey (Mr. Mellish) that there was some disagreement as to whether it was sensible to try to achieve the balance everybody wanted to achieve by closing St. Olave's. Indeed, the area health authority gave pretty strong advice to the effect that it would be financially bad to try to achieve its balance of payments by closing the hospital. So it is quite likely that if the area health authority had carried on none of the employees at St. Olave's would have lost money. Indeed, had they known at the time they were shifted from St. Olave's that they were being told to go by people who had no right in law to be there, it may well be that they would have put up a more vigorous resistance to the whole scheme.

So we should like to know from the Secretary of State how he views these amendments and the principle embodied in them.

We have two other points. First, we hope that if compensation is paid it will not be out of funds allocated for patient care within the area. Secondly, we would normally leave matters of this sort to negotiation between the appropriate trade unions or employees and the area health authority, but this is a unique situation and we feel that the employees concerned require some sort of legal protection by writing these amendments into the Bill.

Mr. Christopher Price

I should like to speak briefly to these amendments and, in particular, to underline some of the points that my right hon. Friend the Member for Lewisham, East (Mr. Moyle) made.

I think the Committee needs to be reminded of the saga of Stan Hardy, who, I think, has been very badly treated. If the Secretary of State thinks back not just to July 30 1979 but to the events of March 1979, which I think must be considered together, he will remember that in March 1979, in the rather rough and tumble pre-election atmosphere, he issued a press release on. Conservative Central Office notepaper accusing Stan Hardy, quite wrongly, of moving a resolution in the area health authority backing COHSE and NUPE in their industrial action and calling upon my right hon. Friend the the Member for Norwich, North (Mr. Ennals) to dismiss Mr Hardy as chairman of the area health authority. These things tend to be forgotten.

I think that the matter was best summed up in a diary paragraph in the Evening Standard of 2 March 1979 entitled "Laurels for Hardy?": Poor Patrick Jenkin. Earnestly seeking to make a bit of capital out of what looked at first sight like a howler from the Lambeth Health Authority the Tory spokesman on Social Services launched a vitriolic attack on its chairman, one Stanley Hardy. In a lettter to David Ennals, Jenkin accused Hardy of patting the health service unions on the back for their industrial action. Such behaviour Jenkin concluded rendered Hardy unfit to continue as chairman. In fact Hardy was only guilty of supporting a somewhat Tory move to curtail industrial action in the health service. When the letter was published he was more than a little annoyed at the slur. Hardy has now written to Jenkin demanding a full withdrawal of the accusations and an explicit apology. If this is not forthcoming I gather from Gordon Marsh, Hardy's number two"— I think that is slightly inaccurate— that Jenkin may find himself the subject of a libel action. So the law seemed to be flitting around this area even before these events took place. In the event, the matter was settled in an exchange on the Floor of the House of Commons, and I think the right hon. Gentleman admitted that Mr. Hardy had moved no such motion and that what he had alleged was not so.

It is in this context that we must look at the treatment of Mr. Hardy from 1 August onwards. When the area health authority was purported to have been put in the fridge by the Secretary of State on 1 August the announcement was made at a press conference. Both the Secretary of State and I remember it very well, even if our versions of it may differ a little in emphasis from time to time. I asked the Secretary of State at that press conference—where, since Parliament was in recess, I was present in my capacity as a journalist rather than as a Member of Parliament—what Mr Hardy's position was and whether his honorarium as chairman of the area health authority would be maintained. The Secretary of State gave me an absolutely explicit answer that it would.

At about this time the honoraria of members of area health authorities quite coincidentally—this is another of those great coincidences in connection with this affair—almost doubled. In fact, some of them more than doubled. Certainly Mr. Hardy was then receiving about £2,000 per year, and now he will be entitled to about £6,000 a year, so it has almost trebled. Almost simultaneously, on 1 October, the Secretary of State went back on his pledge to continue the payment of this honorarium, saying that it would not be appropriate—I think that was the word that he used in a letter to me—that the honorarium be continued.

Judging by the Secretary of State's rather cavalier attitude to Mr. Hardy and the mistakes that he made in the past, I would have thought that he would consider this rather more carefully, because, as I understand it, the whole basis of the Secretary of State's case in using section 86 was that the area health authority had not been dismissed but had simply been suspended. If that was so, there was no case that I could see—and there was no case that he could see on 1 August, certainly—for the chairman of the area health authority—to whom rather belatedly at that time the Secretary of State was beginning to pay a tribute; certainly he did at the press conference on 1 August—for depriving the chairman, who had throughout tried to do his duty as he saw it, of his honorarium.

Nevertheless, it was chopped. I do not know why, but I should like the Secretary of State when replying to the debate to give us a few more reasons than that it was not "appropriate" for his decision on 1 October last year to end Stan Hardy's salary.

The Committee will agree that, after this saga, at the very least common justice demands that Stan Hardy should get his back pay. I see that the hon. Member for Canterbury (Mr. Crouch) is assenting. If he and I agree, who is the Secretary of State to disagree? I ask the Secretary of State to explain why he chopped Stan Hardy's salary and to give the Committee an assurance that he will make up his back pay.

7 pm

Whatever may be the legal position, the Secretary of State must accept that there are employees and former employees of the area health authority who, because they have taken redundancy in circumstances in which they otherwise might not have done, suffer from a sense of injustice and feel that they have a claim on the authority. The difficulty that the authority has in meeting those claims lies in the uncertainty of the law. I suggest to the Secretary of State that he could accept the amendment or, if not, accept the spirit of the amendment and assure individuals who have lost a great deal of money as a result of these illegally appointed commissioners that they will in suitable circumstances receive some compensation.

I agree with my right hon. Friend the Member for Lewisham, East that it would be unfair if the meagre funds available for patient care were to be further eroded by the payment of compensation. My second request to the Secretary of State is that if he agrees that in certain cases compensation should be available, compensation should not come out of the ordinary funds of the area health authority but should be an ex-gratia payment in recognition of the fact that the Secretary of State made a mistake. The Secretary of State must realise that both local auth- orities and the area health authority will be very pinched for funds, and if compensation is to be paid it would be unfair for it to come out of the funds available for patient care.

Mr. Patrick Jenkin

The hon. Member for Lewisham, West (Mr. Price) spoke about Mr. Hardy. On many occasions—certainly at the press conference on 1 August and subsequently in the House, including, I think, last Tuesday—I have paid tribute to the efforts that Mr. Hardy made over the years, not just at the meeting on 30 July, to persuade his colleagues on the area health authority that they had an obligation to bring their spending within the limits of the money made available to them by the region. He was tireless in that. The fact that he was not always successful cannot be held to his discredit. He tried but he did not succeed.

On the question of Mr. Hardy's salary after the suspension of the authority, I made the statement I did at the press conference because it did not seem to me at the time that the non-payment of his salary would have been justified. Subsequently, I discovered that there were all sorts of Treasury regulations relating to the performance of the duties. If the duties are not being performed, it is difficult to justify the payment of emoluments. The salary had been stopped without my being aware of it. It was not until the hon. Member for Lewisham, West wrote and pointed out that that had happened that I made inquiries and promptly reinstated the salary until 31 October. So three months' salary was paid, which I felt, in the circumstances, was not unfair.

I give an undertaking to the hon. Gentleman that I shall look into the position that arises as a result of the illegality. Clearly, there are special circumstances. Mr. Hardy, as the hon. Gentleman rightly said, has played a full part in helping the commissioners to deal with staff appeals, and I should like to see whether there is a way to deal with this matter fairly.

When Mr. Hardy came to see me in October or November—I cannot remember precisely when—he had had the backdated increase in the emoluments that had been introduced. He told me that he felt that he had been treated not unfairly. I understand that Mr. Hardy is a kindly man and that he was anxious not to embarrass me in what could have been embarrassing circumstances.

Mr. Christopher Price

Will the right hon. Gentleman accept that I have not discussed this matter with Mr. Hardy? There has been no pressure from him. Now that the illegality has been discovered, I am simply putting forward the view that, in common justice, Mr. Hardy is entitled to full compensation for his salary by whatever means the Secretary of State may find.

Mr. Jenkin

I shall certainly look into the matter. I know that the hon. Gentleman has the not uninfluential support of my hon. Friend the Member for Canterbury, (Mr. Crouch), who, as a member of the regional health authority, is more closely in touch with these matters than are most hon. Members.

I deal next with the questions raised by the right hon. Member for Lewisham, East (Mr. Moyle). The amendments seek to provide remedies for employees who find themselves disadvantaged, as they would see it, as a result of decisions taken by the commissioners. The disadvantages could take the form of loss of emoluments, loss of overtime, or transferring to a job that carries a lower salary.

As I said in reply to the earlier amendment, the policy of the area was to reduce staffing levels, and it had undertaken to make some reductions in spending. Reductions in overtime working are often made in preference to cutting out jobs, and that was being done here. No possible criticism could attach to the commissioners, nor could there conceivably be any rights established if the commissioners, in pursuance of their task, had found ways of maintaining services but reducing the amount of overtime being worked. In trying to keep cash spending within the limits that have been set, health authorities find every possible way of cutting their costs, and the reduction of excessive and unnecessary overtime is common practice.

I remind the Committee that in paragraph 100 of its report on NHS ancillary staffs and ambulance men published last August the Clegg commission drew attention to the fact that it had had evidence of unsatisfactory working practices, unnecessary overtime, overmanning, bogus incentive agreements, and so on. It has been my policy, as Secretary of State, following that report, to urge authorities, including the commissioners, to use every possible means to eliminate unnecessary expenses that are being incurred through these practices. When I announced the extra cash limits to finance the Clegg award to the ancillaries and ambulance men, I made a specific deduction to take account of the Clegg commission's view that its pay awards made those practices unnecessary. That put pressure on health authorities to squeeze out those practices.

If there have been cases in the Lambeth, Southwark and Lewisham area where overtime has not been worked, where overmanning has been reduced and where unsatisfactory bonus agreements have been eliminated, that would be fully in accordance with the Government's policy—a policy which the Government have pressed not only on Lambeth, Southwark and Lewisham but on every health authority in the country. I hope that that policy has the support of all hon. Members. It cannot be right to justify payments to staff in those circumstances when they would absorb money that would otherwise be available for patient care.

If we accept the amendment we shall place the authority in a specially favoured position. Anyone would be able to claim that he had been disadvantaged by the exercise of this policy and that he should be entitled to be reinstated and to have back his overtime. That would be contrary to the policy exercised across the country, and it would put the authority in a unique and privileged position enjoyed by no other health authority.

The same would be true of amendment No. 9, which seeks to grant automatic rights of reinstatement, particularly to those who may have opted for early retirement or voluntary redundancy in preference to alternative employment. As I said in reply to the previous amendment, the numbers involved are small, and no example has been produced of someone feeling that he had been forced into doing something that would not have arisen had the authority been in office. The reinstatment called for in the amendment would not be practical in a constantly changing situation. No one could be guaranteed the right to return to the same job.

I cannot advise the Committee to accept amendments Nos. 8 and 9. I do not believe that there have been any cases that can be regarded as so unfair as to merit special treatment. The commissioners were scrupulous during the period that they were in office in maintaining their contacts with trade unions and in maintaining in force all the joint consultation machinery, all the Whitley agreements on rates of pay, appeals procedures, and so on. One reason why Mr. Hardy and other members of the former authority were asked to help the commissioners was to enable them to play a part in hearing the appeals—as members of appeals committees—of staff who felt that they had been unfairly treated. That was done strictly in accordance with the Whitley agreements.

Unless more cogent evidence can be produced, I can sec no case for accepting the amendments, and if they are put to the vote I shall advise my hon. Friends to resist them.

7.15 pm
Mr. Moyle

I am afraid that the reply by the right hon. Gentleman is far from satisfactory. We take the point that he tried to do his best for Mr. Stan Hardy but that he did not succeed. That emphasises the point that Mr. Hardy was prejudiced by the illegal actions resulting from the instrument of 1 August 1979. Without those actions, in all probability he would have continued earning his salary until the present day. We take the point that the Secretary of State is willing to look after him, but if there is to be action to look after the generals there must also be action to look after the troops. For that reason, we wish to press the amendment to a Division.

Mr. Patrick Jenkin

The principle that, if one looks after the generals one must

look after the troops is correct. But no one is in a comparable position to Mr. Hardy, in the sense that he suddenly found himself without emoluments. Mr. Hardy was the only member of the authority who was paid, and when he was relieved of his functions, inevitably, under Treasury regulations, he had to be relieved of his emoluments. We understand now that it was illegally done, and that it raises a special position. I have undertaken in good faith to look into the matter.

Mr. Moyle

The comparability arises because Mr. Hardy lost money as a result of illegal actions, and I am sure that others lost money, too. The Secretary of State builds his case on the fact that the area health authority had undertaken reductions in staff. That may be true, but possibly not the reductions in staff that took place. Staff do not think in terms of reductions in staff. They think in terms of what happens to their jobs. A number of people have either lost their jobs or have had their jobs prejudiced, and their plans for the future have been upset and disturbed as a result of illegal actions taken by people who were illegally appointed.

Some play was made of the unique and privileged position in which employees of the Lambeth, Southwark and Lewisham area health authority will be placed if the amendment is accepted. I do not think that that is sustainable, because the amendments merely insist on a review of the posts and their emoluments by the area health authority without any conditions being attached to the ultimate outcome of the review. For those reasons, we wish to divide the Committee on amendment No. 8.

Question put, That the amendment be made:—

The Committee divided: Ayes 89, Noes 127.

Division No. 221] AYES [7.17 pm
Bagier, Gordon A. T. Dormand, Jack Freeson, Rt Hon Reginald
Booth, Rt Hon Albert Douglas-Mann, Bruce Freud, Clement
Bray, Dr Jeremy Dubs, Alfred George, Bruce
Brown, Ronald W. (Hackney S) Dunwoody, Mrs Gwyneth Graham, Ted
Callaghan, Rt Hon J. (Cardiff SE) Eadie, Alex Grant, George (Morpeth)
Callaghan, Jim (Middleton & P) Eastham, Ken Grant, John (Islington C)
Cocks, Rt Hon Michael (Bristol S) Ellis, Raymond (NE Derbyshire) Grimond, Rt Hon J.
Craigen, J. M. (Glasgow, Maryhill) English, Michael Hamilton, James (Bothwell)
Cryer, Bob Evans, John (Newton) Hamilton, W. W. (Central Fife)
Cunliffe, Lawrence Field, Frank Harrison, Rt Hon Walter
Dalyell, Tam Fitt, Gerard Hattersley, Rt Hon Roy
Dean, Joseph (Leeds West) Fletcher, Ted (Darlington) Haynes, Frank
Dixon, Donald Foot, Rt Hon Michael Hooley, Frank
Dobson, Frank Foster, Derek Howell, Rt Hon Denis (B'ham, Sm H)
John, Brynmor Morris, Rt Hon Alfred (Wythenshawe) Spriggs, Leslie
Lamond, James Moyle, Rt Hon Roland Stallard, A. W.
Leadbitter, Ted O'Neill, Martin Steel, Rt Hon David
Leighton, Ronald Orme, Rt Hon Stanley Stott, Roger
Lewis, Ron (Carlisle) Paisley, Rev Ian Thomas, Dafydd (Merioneth)
Litherland, Robert Palmer, Arthur Thomas, Dr Roger (Carmarthen)
Lofthouse, Geoffrey Parry, Robert Tilley, John
Lyons, Edward (Bradford West) Pendry, Tom Tinn, James
McCartney, Hugh Powell, Raymond (Ogmore) Varley, Rt Hon Eric G.
McCusker, H. Price, Christopher (Lewisham West) Wainwright, Edwin (Dearne Valley)
McDonald, Dr Oonagh Robinson, Peter (Belfast East) Walker, Rt Hon Harold (Doncaster)
McGuire, Michael (Ince) Rodgers, Rt Hon William Welsh, Michael
McKay, Allen (Penistone) Rooker, J. W. Winnick, David
McNally, Thomas Ross, Stephen (Isle of Wight)
Maynard, Miss Joan Silkin, Rt Hon John (Deptford) TELLERS FOR THE AYES:
Mellish, Rt Hon Robert Soley, Clive Mr. Terry Davis and
Millan, Rt Hon Bruce Spearing, Nigel Mr. George Morton.
NOES
Alexander, Richard Farr, John Morrison, Hon Peter (City of Chester)
Arnold, Tom Fenner, Mrs Peggy Murphy, Christopher
Aspinwall, Jack Fisher, Sir Nigel Needham, Richard
Atkins, Rt Hon H. (Spelthorne) Fletcher-Cooke, Charles Nelson, Anthony
Atkins, Robert (Preston North) Fraser, Rt Hon H. (Stafford & St) Neubert, Michael
Baker, Nicholas (North Dorset) Garel-Jones, Tristan Newton, Tony
Banks, Robert Glyn, Dr Alan Onslow, Cranley
Bendall, Vivian Goodhart, Philip Page, John (Harrow, West)
Benyon, Thomas (Abingdon) Gorst, John Page, Rt Hon Sir R. Graham
Berry, Hon Anthony Greenway, Harry Page, Richard (SW Hertfordshire)
Best, Keith Griffiths, Peter (Portsmouth N) Parris, Matthew
Bevan, David Gilroy Havers, Rt Hon Sir Michael Patten, Christopher (Bath)
Blackburn, John Hawksley, Warren Proctor, K. Harvey
Body, Richard Heddle, John Rhodes James, Robert
Boscawen, Hon Robert Hogg, Hon Douglas (Grantham) Rhys Williams, Sir Brandon
Bottomley, Peter (Woolwich West) Hooson, Tom Rossi, Hugh
Bright, Graham Hordern, Peter Sainsbury, Hon Timothy
Brinton, Tim Howell, Ralph (North Norfolk) St. John-Stevas, Rt Hon Norman
Brooke, Hon Peter Hunt, John (Ravensbourne) Shepherd, Colin (Hereford)
Brotherton, Michael Jenkin, Rt Hon Patrick Speed, Keith
Brown, Michael (Brigg & Sc'thorpe) Jopling, Rt Hon Michael Speller, Tony
Bruce-Gardyne, John Kilfedder, James A. Spicer, Jim (West Dorset)
Buck, Antony Lang, Ian Stanbrook, Ivor
Cadbury, Jocelyn Langford-Holt, Sir John Stevens, Martin
Carlisle, John (Luton West) Lawrence, Ivan Stewart, John (East Renfrewshire)
Carlisle, Kenneth (Lincoln) Lawson, Nigel Stradling Thomas, J.
Carlisle, Rt Hon Mark (Runcorn) Le Marchant, Spencer Thomas, Rt Hon Peter (Hendon S)
Chalker, Mrs. Lynda Lennox-Boyd, Hon Mark Thorne, Nell (Ilford South)
Chapman, Sydney Lester, Jim (Beeston) Thornton, Malcolm
Clark, Hon Alan (Plymouth, Sutton) Lloyd, Peter (Fareham) Waddington, David
Clarke, Kenneth (Rushcliffe) Lyell, Nicholas Waldegrave, Hon William
Colvin, Michael Macfarlane, Nell Walker, Bill (Perth & E Perthshire)
Cope, John McNair-Wilson, Patrick (New Forest) Waller, Gary
Critchiey, Julian Major, John Ward, John
Crouch, David Mates, Michael Watson, John
Dean, Paul (North Somerset) Mather, Carol Wells, Bowen (Hert'rd & Stev'nage)
Dickens, Geoffrey Mawhinney, Dr Brian Wheeler, John
Douglas-Hamilton, Lord James Maxwell-Hyslop, Robin Wickenden, Keith
Dover, Denshore Mellor, David Wolfson, Mark
du Cann, Rt Hon Edward Meyer, Sir Anthony
Dunn, Robert (Dartford) Miller, Hal (Bromsgrove & Redditch) TELLERS FOR THE NOES:
Eggar, Timothy Mills, Iain (Meriden) Mr. John MacGregor and
Emery, Peter Moate, Roger Mr. John Wakeham.
Faith, Mrs Sheila Morris, Michael (Northampton, Sth)

Question accordingly negatived.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time—[Mr. Patrick Jenkin.]

7.29 pm
Mr. Moyle

I am grateful to the Secretary of State for moving the Third Reading formally. There are a number of matters that I wish to raise with the right hon. Gentleman arising from the fact that we spent a fairly short time in Committee and that a number of amendments were not selected for debate.

I turn first to the central issue that we have been discussing, namely, the period during which the overpayment of the area health authority should be adjusted and brought into line. This is an opportunity to put on record the correct overspend of the authority. Some exaggerated figures were quoted by a number of hon. Members from Kent on Tuesday afternoon. It is unfortunate that none of those hon. Members is present. They kept talking about an overspend of about £9.5 million during those two years—an overspend that never took place. The AHA was certainly heading for an overspend of about £5.5 million in the financial year 1978–79. However, as a result of representations made by my right hon. Friend the Member for Norwich, North (Mr. Ennals), that total was not reached and the overspend for 1978–79 was £4.3 million.

By virtue of the agreement to repay that overspend by 1981–82, the AHA started with a clean sheet on 1 April 1979. It took decisions which would have reduced the expenditure in 1979–80 by £2 million. If that plan had been implemented, the overspend would have been about £3.5 million by now in this financial year.

Two points arise, First, increased VAT imposed further costs of £1 million on the AHA. That figure should have been related to the £3 million to £3.5 million projected overspend for this year. That therefore amounted to an on-cost on the margins of about 33 per cent., not 20 per cent., as I said in my Second Reading speech. That means that the overspend is nothing like £9.5 million; it is much nearer £4.3 million. Nevertheless the AHA—

Mr. Patrick Jenkin

To be fair to my hon Friends, they were adding the figures for the two years together.

Mr. Moyle

Even if the figures for two years are added together, the figure is still nowhere near £9.5 million. It is substantially less than that. No adjustment has been made in the cash limits to allow for the excessive increase in the rate of inflation during the last 12 months. Although we hear that the commissioners have brought the area finances into balance—subject to a small overspending—it means that when it takes over the AHA will face the consequences of having to repay £4.3 million of overspend by the end of the 1978–79 financial year against the background of increased inflation. The authority has a difficult task ahead.

The Under-Secretary chided us on Tuesday for not saying what we would have done had the Opposition been in power. We would have extended the period during which the adjustment should take place, and that is what I now propose to the Secretary of State. I earnestly ask him to consider that proposal. I am not asking him to give a precise answer tonight, but I do ask him to give the proposal a sympathetic hearing.

Legal costs were incurred by the boroughs of Lewisham and Southwark as a result of the action of 1 August last year and it is beyond peradventure that they would not have gone to law if the commissioners had not been appointed. They went to law, and the result is the Bill that we are now discussing. Those boroughs were awarded costs against the Secretary of State, but they also brought two other cases. The first concerned the closure of St. Olave's hospital. That case was brought jointly by the Southwark and Lewisham borough councils. The second case concerned the closure of St. John's hospital, and that case was brought by Lewisham borough council alone.

Those cases were not as decisive as the one that gave rise to this Bill. Nevertheless, they resulted in judgments that were substantially sympathetic to the point of view of the plaintiffs, particularly in relation to the closure of St. John's hospital. In his judgment, Mr. Justice Griffiths said: I think the decision to close the hospital and transfer the VD clinic and transfer the vast majority of abortions being performed elsewhere is a substantial variation in the provision of the services. That judgment was important from the point of view of interpreting the principles that have hitherto been applied in organising consultations on hospital closures. It gave rise to a "Dear Regional Administrator" letter on 7 December last year, which gave advice to health authorities as to what they should regard as a "substantial variation" in view of the High Court judgment. That has made a considerable difference in consultation practices since 7 December as compared with the practices between 3 May and 7 December last year.

So the money spent on legal action was not spent irresponsibly. Something positive was achieved, but as a result the London borough of Lewisham incurred costs of £2,500 in respect of St. John's hospital, and the boroughs of Lewisham and Southwark incurred costs of £2,500 as a result of contesting the closure of St. Olave's. That money would not have been spent but for the act of 1 August last year. Those High Court actions achieved positive and beneficial results for the Health Service in the long term, and it would be nice to know that the Secretary of State would reimburse those boroughs.

If I may use the expression, we are being "legally robbed" as a result of the reduction in the rate support grant. In the case of Lewisham, that is a reduction of £1.3 million in the coming year. It would be unfortunate if—on top of that—there was further robbery, and I hope that the Secretary of State will consider the issue sympathetically.

The community health councils have also been involved in extra activity and expense as a result of the appointment of the commissioners. Shortly after the commissioners arrived on the scene and the AHA disappeared, local people set up a co-ordinating committee under the chairmanship of my hon. Friend the Member for Lewisham, West (Mr. Price) to ensure that the activities of the commissioners were monitored and that there might be a democratic channel through which representation could be made from patients and potential patients and the general public to the commissioners.

The secretary of the Lewisham community health council was appointed secretary of that co-ordinating committee, and she and her assistant secretaries put in a great deal of extra time and work. It would be nice to know whether the community health councils can claim the extra expenses that they incurred.

Looking further into the future, we should be grateful if the Secretary of State would instruct the commissioners to give all the information reasonably required by the AHA so that it can take up its duties again after 1 April. There seems to be some dubiety about whether that will happen, and there may be a lack of precision about the arrangements. Obviously the AHA will need the fullest information if it is to discharge its responsibilities after 1 April 1980. I hope that the Secretary of State will be able to reassure us on that.

There is a further knotty and technical problem, which should have been covered by amendment No. 1, which was not selected. However, I gather that we can raise the matter on Third Reading. That being so, we would like the Secretary of State to confirm that there is no way in which the validated instrument of 1 August 1979 can be extended beyond 31 March this year. I ask that because the Secretary of State has not actually said that the area health authority will return to office on 1 April 1980. Even if he did, we must remember that there is still more than two weeks between now and then. The Secretary of State is an honourable man. He has said enough to make everybody assume that the area health authority will resume office on 1 April. He would be in some personal difficulty if it did not do so. However, he has not said that.

The right hon. Gentleman is fallible. As he goes home tonight, he might be run over or have a heart attack and be dead by this time tomorrow and one of his right hon. Friends might take over. That is not such an unusual event. That is almost exactly what happened to Mr. Brian O'Malley, a Minister at the Department of Health and Social Security. Whoever took over might say that as a result of the Bill he had a valid direction and keep the commissioners in power beyond that dale. I hope that the Secretary of State will confirm that there is no possibility of that.

7.42 pm
Mr. Bob Cryer (Keighley)

I wish to raise a question of principle. The Bill involves a constitutional issue which should not pass without remark. I did not take part in the debate on Second Reading or in the Committee because that seemed to be the task of hon. Members whose constituents were directly affected by the Secretary of State's decision. However, the issue is not only local, because the Secretary of State's action could have applied anywhere.

I want to ask about the Minister's accountability to the House and about the relationship of the Secretary of State to the civil servants who advised him about the decision which resulted in the necessity for the indemnity Bill. Over the years there has been a diminution of ministerial accountability and an enhancement of the power of civil servants. To some degree that is reflected in the Bill.

In July 1954 a not entirely dissimilar but not entirely parallel case occurred, involving the Minister of Agriculture and Fisheries, Sir Thomas Dugdale. The junior Minister at that time was the present Foreign Secretary. The question of ministerial accountability was posed at that time. Since then the Vehicle and General report concluded that a minor civil servant was to blame for what happened in that case. The report said that two or three Ministers had been advised by civil servants about the difficulties of that company but had taken no action. I am anxious that there shall be no shift away from ministerial accountability to the House.

What advice did the Secretary of State receive which enabled him to act as he did? He ignored other legislative powers. As a result of his decision, the Bill was introduced. Why did the Secretary of State use his emergency powers without time limit? It is extraordinary, with the wealth of advice available to the Secretary of State, often from those involved in the drafting of Bills, that the fullest information was not provided.

An indemnity Bill has been necessary before, as my hon. Friend the Member for Nottingham, West (Mr. English) said. However, that was introduced during wartime under a coalition Government and when the circumstances were different. There was a general emergency and the degree of accountability was of a different nature. The responsibility of the Government then was to organise the nation to fight Fascism and the invaders at our doorstep. The position is different today. In July 1954 the then Minister of Agriculture and Fisheries, when faced with a decision which he himself had not taken but for which he accepted full responsibility because he was not given proper advice, made a statement to the House. He referred to advice that he had received. He said that it was his decision finally. Sir Thomas Dugdale said: First, I should like to say a word about the conduct of the civil servants concerned. General issues of great constitutional importance arise in this regard … I am quite clear that it would be deplorable if there were to be any departure from the recognised constitutional position. I, as Minister, must accept full responsibility to Parliament for any mistakes and inefficiency of officials in my Department, just as, when my officials bring off any successes on my behalf, I take full credit for them. That is true. We could not stop a Minister from teling us about a success and trumpeting it abroad in the loudest tones so that editorials the following day give credit to the Minister for the wonderful decisions that he has taken. Now, the reverse is true. The Bill is before us as a result of a Minister's decision. Much of the anguish and concern for detailed issues which my hon. Friends have raised is about the period of illegal activity by those appointed by the Minister. The Minister takes full responsibility.

What has happened to the civil servants who advised the Secretary of State? We recognise that the Minister may have to make a fine judgment which may be mistaken. Nobody can be perfect. We do not expect a Minister to be 100 per cent. right. A Government would not last a day if that were so, because Ministers are always making political judgments which are unsound and mistaken. We are talking about a decision based on legal advice and on legislation. Clearly, a serious mistake was made which necessitated the Bill. What has happened to the civil servants who advised the Minister? He took the final decision.

There was a public inquiry into the Crichel Down affair but the circumstances were different. There were suggestions of corrupt dealings. That does not apply in this case. Many people are worried because a Minister, acting on the advice of senior civil servants, made a decision which was shown to be wholly wrong, has cost money, cost the House time and caused hundreds of people much anxiety.

It would be useful if the Secretary of State laid a report in the Library about the action that he has taken in regard to the civil servants. What investigations has he held? There should be an investigation into the advice that resulted in a decision which was so clearly wrong from the beginning. It is not a fine judgment. There is ample evidence that the advice given was very much mistaken and could not easily be justified.

In the Crichel Down case Sir Thomas Dugdale said: I now turn to the question of disciplinary action. The conduct of the civil servants concerned has been the subject of a public inquiry and of a report and, as a result, they have received public censure and reprimand. This in itself is a most severe punishment. I wonder whether the civil servants involved in this case received a private reprimand. That would be some sort of punishment. In the Dugdale case, the five civil servants concerned were moved from their positions.

Mr. English

To where were they moved?

Mr. Cryer

I have no idea. It may be that they were moved to better positions. That would not have been of benefit to anybody.

My hon. Friend the Member for Nottingham, West points to a matter of concern, namely, the aura of secrecy that surrounds those in powerful positions. At the moment, they have come unstuck. I imagine that the Secretary for State has not been too happy about the matter and that his displeasure has made itself felt throughout his Department. However, he took the decision and, at the end of the day, it is his responsibility. Every Secretary of State receives advice from senior civil servants. Every Secretary of State must be accountable to the House for his decisions.

I should like an explanation of what happened behind the aura of secrecy that surrounds the operations of senior civil servants. Although the Secretary of State is accountable to the House, we wish to know whether there have been repercussions in his Department. The civil servants gave bad advice, upon which the Secretary of State mistakenly acted. It is not simply a case of shrugging off the results so that one or two years later the matter will be forgotten and the power to influence and mould decisions will still lie with those civil servants.

Although the Secretary of State took the decision, he did not follow the highly dramatic action of Sir Thomas Dugdale, who concluded his speech by saying: Having now had this opportunity of rendering account to Parliament of the actions which I thought fit to take, I have, as the Minister responsible during this period, tendered my resignation to the Prime Minister, who is submitting it to the Queen."—[Official Report, 20 July 1954; Vol. 530, c. 1185–94.] He thought that his actions were so grave and so mistaken that he could no longer hold office. In fact, he was not directly responsible for those actions. In a quaint and old-fashioned phrase, it was an honourable action for Sir Thomas Dug-dale to take.

I wish to be sure that this position will not be repeated when reasonably clear legislation is in force, that suitable reprimands have been meted out to those who gave bad advice, and that the Secretary of State understands that he cannot do this sort of thing too often. The precedent set by Sir Thomas Dugdale is remembered as a constitutional one of great importance. The Secretary of State may face pressure of such great momentum that he will create a second precedent in similar circumstances.

7.55 pm
Mr. Martin Stevens (Fulham)

I had not intended to intrude in the debate today, having spoken on Second Reading. I listened with dismay to the approach adopted by the hon. Member for Keighley (Mr. Cryer), as it differs acutely from the generous and civilised approach of the Opposition Front Bench. Both the right hon. Member for Lewisham, East (Mr. Moyle) and the right hon. and learned Member for Dulwich (Mr. Silkin)—who took us through the legal aspects at some length—made it clear that they would support the Bill because there was no question of any wrong-doing by my right hon. Friend the Secretary of State. Nor was there any question, as in the case cited by the hon. Member for Keighley, of a prolonged and disgraceful national scandal, for which the Department was collectively responsible.

In this case, the right steps were taken to cope with an emergency which later proved—we all accept the learned judge's findings—to have been based on a technical misapprehension. The actions themselves were in the public interest. No consequences resulted which were contrary to the public interest. It would be absurd to compare them with the long saga of injustices that culminated in the resignation of Sir Thomas Dugdale—which was a courageous and honourable response on his part to events for which he was not responsible. The hon. Gentleman attempted draw a comparison. He was mean to do so, because there is no comparison.

To seek to put my right hon. Friend in a position where he can, even fleetingly, be suspected or accused of lacking in the standards of honour and integrity shown by Sir Thomas Dugdale is grossly unfair and manifestly untrue. While my right hon. Friend can defend himself perfectly well without my help, I must say that it is extremely distasteful to me that he should be called upon to defend himself in the House on a charge affecting his personal honour, unless there are very grave and serious reasons for being required so to do.

We are debating a technicality. In the Dugdale case the debate was about a serious issue of substance in which, for a prolonged period, the country had recognised that a whole Department had acted in a high-handed and unjustified manner. That does not apply in this case, and the learned judge's remarks show that he recognised that fact.

I suspect that there are hon. Members on both sides of the House who will share my regret that the hon. Member for Keighley should have seen fit to try to impugn my right hon. Friend's honour, when those on his Front Bench were so generously careful to do no such thing.

7.58 pm
Mr. Ronald W. Brown

I am sorry that the hon. Member for Fulham (Mr. Stevens) chose to intervene in the debate, because it has provoked me to proceed along a road to justify the remarks of my hon. Friend the Member for Keighley (Mr. Cryer). I do not think that my hon. Friend was attacking the Secretary of State. He said that if the Secretary of State had accepted advice from his Department, he wished to know who gave him that advice and what action had been taken to put the matter right. As I understand it, my hon. Friend suggested that the DHSS works in mysterious ways. There are eminent civil servants in the DHSS who seem to be able to give bad advice to Ministers, without repercussions. My hon. Friend wanted to know what had happened. I have some sympathy with him on that matter.

Although the hon. Member for Fulham did not mention my name, I hope that I, too, was generous to the Secretary of State in saying that I did not press for his resignation.

Mr. Stevens

I am sorry that I did not mention the hon. Gentleman's name or, more properly, his constituency. I know that he was generous. The matter to which he should address himself is not that of the civil servants involved but whether the hon. Member for Keighley was right to suggest that there was a similarity between this case and that of Sir Thomas Dugdale. I suggest that there is no such similarity.

Mr. Brown

I am addressing myself to the issue. The mistake having been made, I do not think that the Minister can come to the House and merely say "I am sorry. Everything has gone wrong. I shall put it right by introducing a Bill of this magnitude." It cannot be argued that the Bill is minuscule and that it represents the minutia of legislation. It is a serious matter.

My hon. Friend made a comparison between the end of the two episodes and referred to what happened when it came to the attention of the Minister that things had gone wrong in the Department. He applied what Sir Thomas Dugdale did to the present situation and pointed out how Sir Thomas had identified and dealt with people in his Department.

Mr. Cryer

The hon. Member for Fulham (Mr. Stevens) obviously does not hear very well, because at the end of my brief remarks I said several times that the Minister could not afford to do this and that if he did—I am sure that there will be common ground on this—he would find himself in the same situation as Sir Thomas Dugdale. One of my basic questions was what the Minister had done to prevent any such repetition, either through the further scrutiny of advice or by obtaining of better advice.

Mr. Brown

I am grateful to my hon. Friend. However, perhaps I can leave that aspect of the matter and turn to other items.

The DHSS is a mysterious body, which works in mysterious ways. The issue that we are debating merely encapsulates the problem. For example, on Second Reading many hon. Members referred to RAWP. That came about only because people within the Department decided that it should be introduced. Essentially, it was dreamt up within the DHSS, and foisted on to the rest of us, because the Secretary of State at the time was persuaded to buy the argument. In a way, it was suitable to him because it meant that one was taking money from Peter to pay Paul. During a time of monetary constraint, no doubt the Secretary of State felt that that was a useful thing to do.

However, RAWP was never really discussed publicly. It was never discussed in this House. It has never been an issue. Yet it has been implemented. Therefore, I believe that my hon. Friend was right to ask about the DHSS. If people in the Department have that sort of power, will they be dealt with when they make an error of this magnitude?

The RHAs and AHAs are to some extent facades. They have an appearance of independence, but they do not have much influence. The DHSS lays down pretty clearly what one's expenditure is and how one can expend it. Therefore, having been virtually constrained in a straitjacket, there is little that one can do. If one serves on an RHA, one can only distribute the available money to the AHAs in some order of priority on which one can adjudicate. When the AHA receives its money, it can only do the best that it can. There is no form of appeal, and there is no one to whom it can go. Therefore, in this case, when the AHA discovered that more and more pressure was being brought to bear in a way that it felt was incompatible with the needs of the area, it tried to challenge the pressure that was being put upon it. It tried to draw attention to the fact that lives were at stake. It felt that what it was being urged to do was incompatible with the principles enshrined in its work.

Mr. Patrick Jenkin

It seems to me that, faced with the situation which the hon. Gentleman has described, members of an AHA have two options. They can do what they did in Lambeth, Southwark and Lewisham and seek to defy the cash limit which the Secretary of State laid down, or they can do what the councillors did in the Ealing, Hounslow and Hammersmith health authority and resign. Which does the hon. Gentleman think is the more honourable course?

Mr. Brown

That is true, but the Secretary of State should not take me back to the resignation argument. I took myself away from that so that I would not say things that I would regret in the morning, and I beg him not to take me back to that argument.

As the right hon. Gentleman knows, I serve on the RHA that is responsible for Ealing, Hounslow and Hammersmith AHA. I faced a grave problem about what I should do. Only recently I voted against the closure of a particular hospital, which was recommended by an AHA, because I thought that that closure was wrong, but I was outvoted. On the first occasion I won and had the matter deferred, but at the next meeting I was defeated by two votes. Therefore, the hospital is to be closed.

I suffered a crisis of conscience, basically because I believed that the information that I was given was incorrect. I do not believe that all the details were made available. Indeed, I asked for further details but did not get them. I am still trying to get those details. However, the DHSS is a mysterious place, and it is difficult to obtain information. It is even more difficult when one is trying to seek information about other areas that are outside one's region. If one wants to increase the burden—that is, to add money rather than to take it away—no other region wants to discuss it. Consequently, the basis upon which one makes a decision leaves much to be desired.

Mr. Christopher Price

In the interests of accuracy, and as the Secretary of State has again used the phrase "intending to defy cash limits", is my hon. Friend aware that the resolution that was passed on 30 July, if read by a reasonable man, could not possibly have that meaning? The only person who read that meaning into it was the Secretary of State, and in doing so he was found to have acted illegally.

Mr. Brown

I am grateful to my hon. Friend for making that point. However, I should like to return to the matter that was raised by the Secretary of State, because it is constantly raised.

Many of my friends who serve on these bodies are, as a result of this case, wondering what they should do. My own personal view is that the Health Service would be better if all these public-spirited people were to continue in post and attempt to do the best that they can for their areas. It would be wrong if the NHS became just a part of the Conservative Party. That would be wrong in principle, and it would be bad for the people who are being served. However, people are now seriously questioning whether there is any purpose in ordinary folk serving on RHAs and AHAs if they are to be subjected to a political approach from the DHSS which will not allow them any judgment or the use of their skills.

The Secretary of State has heard me argue the case with regard to temporary closures, about which he knows that I am in total disagreement. The right hon. Gentleman knows that I object to places being closed down when they will never be reopened, at least not in the foreseeable future. On Second Reading the right hon. Gentleman averred most strongly that I was wrong and that temporary closures would be reopened. I asked for the date of the reopening of St. Leonard's hospital. I ask him again. As he insists that temporary closures are temporary, can he tell me the day on which I can expect St. Leonard's hospital to be reopened?

I warn the right hon. Gentleman that that district will be overspent by another £1 million by the end of the year. Another hospital will have to be closed. The candidate is St. Matthew's hospital. That will save about £1½ million. The right hon. Gentleman should ask his officials to investigate that. If St. Leonard's has been temporarily closed, I want to know when it will be opened. If money is saved by closing a hospital, it is obvious that reopening it will mean that an authority will be overspent the following year. It is therefore nonsense to say that hospitals that have been closed will be reopened.

Mr. Hardy and his colleagues have been misguided. They will be left in a worse position. Before they were sacked in August, they had developed a general argument. They desperately tried to keep within their cash limits. However, they found it extremely difficult, although they did the best that they could. Having been out of office for some time, they will find it difficult to handle their charge when they return.

Mr. Patrick Jenkin

With great respect, they had the officers' proposal before them. That proposal had been adopted by the members' planning group. It set out proposals that would have achieved the savings demanded by my predecessor, the right hon. Member for Norwich, North (Mr. Ennals). Having passed the original resolution—to which the hon. Member for Lewisham, West (Mr. Price) has referred—the health authority proceeded to vote down the first three proposals suggesting savings. How anyone can say that it intended to remain within the cash limits is beyond my understanding. It specifically voted down the proposals that would have achieved that. No suggestion was made to put anything else in their place. That is the point at which the Government had to act.

Mr. Brown

The right hon. Gentleman made the same point on Second Reading. How much does one accept that the officers' advice at that stage represented the law of the Medes and the Persians? The Secretary of State has highlighted something that will be a powerful influence on me. In the past I have sought the reports of officers and of working parties. I use them to enable me to come to a decision. I had always thought that those reports were privy to me. They represent the tools of my work. I need to make judgments on sound information and on fact. However, those officers' reports have been used by the Secretary of State as a weapon against those for whom they were intended. We should therefore review the way in which they are evaluated.

In all occupations, reports are the working tools of those who have to take decisions. They should not be used subsequently as proof that one did not take certain advice. When a bad judgment has been made that is proved to be illegal, action may then be taken against those concerned. The members did not act in an ultra vires fashion. They attempted to do the best that they could. On the advice of his Department, the Secretary of State took action. He wanted to make an example of someone on the basis that if the Department had not taken issue other health authorities might have exceeded their cash limits.

Mr. Patrick Jenkin

I am sorry to intervene again, but votes were taken. Some of those on that area health authority voted to do the things. Others voted not to. They were in the majority. I do not understand how it can then be said that the authority had tried to comply with the cash limits. The majority of members of that authority specifically refused to take the necessary decisions. That is why I sought to suspend them.

Mr. Christopher Price

It is important to get the facts, not the myth, on record. On 30 July the majority voted to defer taking decisions on three items of cuts. It was decided to defer any decision, before gaining further information. It was not a vote not to make the cuts. That should be put on the record.

Mr. Brown

I agree with that. That is why I have raised the issue of officers' reports. Those reports are relevant only to those who discuss them at the time. I receive the reports of the regional team of officers and the reports of the area teams. I have never met them. I look at the reports and make inquiries about the issues that I have not understood. I sideline those passages where I require information.

The area health authority considered the report. It was not persuaded that three of its recommendations provided the immediate answer. A decision was therefore deferred. The Secretary of State may say that statements were made by various people. The Secretary of State for the Environment now says that he will legislate on the speeches that people make. That is a silly attitude. The right hon. Gentleman has never done such a thing. I beg him not to go down that path. I beg him also not to take action because of headlines in a newspaper or as the result of allegations made about meetings.

Mr. English

I realise that my hon. Friend wishes to set the record straight. However, the judge said that there was one reason for issuing a section 17 direction to which we shall now never know the answer. If the right hon. Gentleman had ordered the health authority to conform to the cash limits and not merely asked it to comply with them, the judge felt that the majority of members of that authority would not have wished to break the law. He felt that a sufficient number might have voted a different way. I sympathise, because in many cases I would resist a proposal from the right hon. Gentleman. However, if that resistance involved breaking the law, I would not.

Mr. Brown

I wish to point out to the Secretary of State that his Department has a tendency to wander away from issues. It leads the right hon. Gentleman astray. He has been led astray on this issue. I beg him to ensure that the Department is not allowed to do that. This is a difficult problem. He is lucky, be- cause he has not had to serve on regional or area health authorities. It is one thing to sit in Alexander Fleming House issuing edicts; it is another if one is on the ground, responsible for trying to get a quart into a pint pot. That is impossible.

It is not sensible to take action against people merely because they have failed to do what the Secretary of State wished them to do. I shall not vote against the Third Reading. However, I am sad that the Secretary of State has found himself in this position. Several issues have been highlighted that will have far-reaching effects. Those serving on regional health authorities and area health authorities will ask a question again and again. If the Secretary of State is suggesting that those who do not conform to his view should resign, we must consider that at a later date.

It was a sad day when the right hon. Gentleman's Department misled him. It is sad that he has had to bring forward the Bill. I only hope that the AHA, when it takes over control in April, will be allowed to try to carry out its work in the best way that it can and not be guided too heavily by the Department.

8.20 pm
Mr. English

I do not propose to follow my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown), who is a London Member and, understandably, wishes to get all the details straight.

The right hon. Gentleman has been given a good going over on Tuesday and today. I am prepared to leave it at that.

I have two brief points to make. I see the hon. Member for Fulham (Mr. Stevens) lurking on the edges of the Chamber but outside the House. When the hon. Gentleman reads his speech, he may regret describing a breach of law as a technicality. I am glad to see that the hon. Gentleman is now in his place. Breaches of the law are not technicalities, whoever commits them, and should not be so described. On reflection, the hon. Gentleman may consider that he could have used a better word.

My hon. Friend the Member for Keighley (Mr. Cryer) said that the former Sir Thomas Dugdale was regarded as an honourable man. He still is. As Lord Crathorne, I believe that he was chairman of the Political Honours Scrutiny Committee.

Mr. Cryer

I did not know that when I praised him.

Mr. English

I am working from memory.

It behoves the right hon. Gentleman when he talks about Hounslow, and perhaps my hon. Friend the Member for Keighley, to forget the talk of resignation. I am more concerned with the remainder of my hon. Friend's speech. I had an amendment down which was not selected—and I do not complain about that—to secure that the Select Committee on social services should have a report from the right hon. Gentleman stating what advice he received, from whom he received it and what he has done to reward those who gave him correct advice and to discipline those who gave him incorrect advice.

It is right and proper that the right hon. Gentleman should accept responsibility for the mess, but that is not the same as concealing the virtues or defects of everyone in the Government machine. It is a matter of great importance to the country.

This country is not the most efficient in the world, and we must attribute that partly to our system of government, which includes Parliament—and many of us are trying to reform our parliamentary procedures to make them more efficient. Over the past 100 years, we have lost an empire and we are no longer the country with the highest standard of living in the world. Those negative achievements are attributable partly to the way that we run our country. However, we have other virtues.

One of our drawbacks is concealment and lack of desire to praise or blame individuals. It shows a certain delicacy of feeling, but is it the way to run a country? I suggest that the right hon. Gentleman reflects on that.

We have too much automaticity in government. Generally speaking, those who are classified on entering the Civil Service as As, Bs and Cs end up in about that order when they retire. Permanent secretaries have generally been classified as As 40 years previously. They attain their position substantially on the basis of what the original interviewers thought of them. It is not necessarily true that they attained those positions wholly because of the good or bad experience that people have had of them.

At this time of night people are gathering for other events, and I shall not go into the matter, but one of the causes is the concealment of good or bad advice. I do not wish that people's names and advice should be revealed only when that advice is bad. That would totally endanger the whole machine. The good should be positively rewarded and the bad negatively. That is done in the United States, where there are long salary scales, which, if necessary, take one—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

That may be so in the United States, but it does not relate to the Bill.

Mr. English

I am aware of that, Mr. Deputy Speaker, but we have wasted two days of parliamentary time to indemnify a Secretary of State and all his servants. All persons acting under him are indemnified by the Bill, and not merely the Secretary of State. The judgment on which the Bill is founded specifically says in the second sub-paragraph of the conclusions that the advice that the Secretary of State received was misguided. I am speaking to that point. We know what the learned judge said about the Secretary of State, and the Secretary of State has carried the can for long enough in these debates.

The learned judge also referred to an anonymous group of people, whose names have not so far appeared. We do not know whether they are lawyers, administrators or what. I do not wish such anonymity to be broken only when people make mistakes.

Mr. Deputy Speaker

Order. The hon. Gentleman should be speaking to the Third Reading of the Bill.

Mr. English

I am simply saying that I am reluctant to agree to the Third Reading of a Bill that indemnifies anonymous people. Surely that is in order, Mr. Deputy Speaker. I have no wish to vote against the Bill. I was hoping to express my view and not vote. If you press me, Mr. Deputy Speaker, I must say that I object most strongly not to indemnifying the Secretary of State, who has honourably come here and defended himself, but to indemnifying people who are not named.

In the interests of the country as a whole, there is a strong case for seeing that people give good advice, which is not the case here. Some people may have done so, but we do not know that. There may be someone sitting in the Department with a halo saying "I told you so" to all his colleagues, but we have not been told.

I hope that the hon. Gentleman will say, if that is so, that there were civil servants who gave him what has turned out to be the correct advice. He might at least praise them before we give the Bill a Third Reading. Otherwise, the anonymity indemnifies people who may have given the right advice. We should not pass over these people.

In 10 or 20 years' time, a person who gave bad advice to the right hon. Gentleman may be a permanent secretary in another Department. We shall not know for another 30 years, when he will have retired and we shall probably all have retired.

There is a constitutional doctrine that Ministers are responsible to this House not only for their actions but for those of their Departments. That is right. But there is nothing in this constitutional doctrine that says that when they are responsible they are obliged to keep secret the names of those who gave them advice and the nature of it. There is nothing in the doctrine of ministerial responsibility that says that. It has been extended by many. It is being extended by the right hon. Gentleman to include that. But that is not what the doctrine of ministerial responsibility is about. It is really concerned with who answers for the Department to this House.

When the relevant person answers—the right hon. Gentleman, in this case—he might also tell the House who answers to him and whether those who answer to him are good or bad. The principle could be generalised through all Departments of State. One of the best ways is the American system under which people get more money if their superiors regard them as good and less money if their superiors regard them as bad. There is also the French system under which people get more money—the so-called primes—if their superiors regard them as good.

None of this happens in this country. People get paid whether they give good advice or bad advice. They get a knighthood on reaching a certain rank and retire at 60 whether they have given good or bad advice. It is one of the weaknesses of our system of government. This is a clear case where the weakness has shown up.

8.30 pm
Mr. Christopher Price

I do not intend to detain the House for long. Other things appear to be happening. It is proper to make some comment before the Bill passes from this House to the other place, which is not quite the toothless tiger that some hon. Members had thought. The other place might wish to say something about ministerial responsibility as well as school transport. I feel, Mr. Deputy Speaker, that if I were to pursue that matter you would pull me up. I shall not, therefore, pursue it.

The Bill exhibits every aspect of double standards that adhere to the present Government and to the Conservative Party. One thinks back to the howling mobs over Clay Cross, compared with the gentle way in which the law-abiding Opposition have treated the law-breaking Secretary of State in this instance. One sees how the defence Estimates are allowed to blow right through cash limits without any chance for the House of Commons properly to control them, but when it appears that those in charge of the health Estimates might allow one small part to go through cash limits the Government show their contempt for democracy by choosing that area of the National Health Service Act that enables them to destroy every democratic element in the control of the Health Service and appoint commissioners more in common with a Fascist regime than with a Govern. ment like this—

Mr. Patrick Jenkin

Five commissioners took on voluntarily—[Interruption]. Of course, they received fees. I understand that. But they took on a task of public duty at my request. For the hon. Gentleman to use language like that about them is unlike him and uncharacteristic. I think that the House would wish him to withdraw that remark.

Mr. Price

If the right hon. Gentleman feels that he can read into the remarks that I have made—I do not think that he will be able to do so—any suggestion that Sir Frank Hartley or any of his four fellow commissioners exhibited Fascist tendencies, I withdraw immediately any such suggestion. I maintain my point of view. Where legislation enables Ministers to destroy those democratic elements in our constitution—local government representatives on area health authorities or community health councils—and replace them by commissioners, I repeat that such provisions in law have more in common with Fascist regimes than with the democracy in which we claim to believe in this country.

Everything that the Government have done, particularly the present actions of the Secretary of State for the Environment, threaten the passing of legislation through the House that will erode local democracy, which has been a pillar of the British way of life for hundreds of years. Everything that the Government are doing makes me feel that my remarks are a proper warning to give to the House. They are a proper characterisation of the use of section 86 of the National Health Service Act.

I reiterate that that clause of the Bill went through the House in 1973 with not one word of discussion in Committee, on Report or in the Second Reading and Third Reading debates. That happened because everyone in the House assumed that the word "emergency" had nothing whatever to do with the dispute between the Secretary of State and the AHA about cash limits. It was thought that it simply referred to an act of God or, perhaps, grave civil disturbance.

The Secretary of State used in a way that was never intended part of the Bill that went through the House undiscussed. It was left to the High Court of Justice to make a decision and not the High Court of Parliament. I wish that Parliament had had the power to call the Secretary of State to account, but it did not. It was left to the High Court of Justice and the democratically elected bodies of Lambeth, Southwark and Lewisham to take appropriate action. I am proud that Lewisham took the lead. It was left to those boroughs to call the Secretary of State to account by submit- ting his decision to judicial review. That should be put on record.

Mr. Ronald W. Brown

I draw the attention of my hon. Friend to the fact that we now have a Select Committee that has the facility and, I hope, the urgency to call the Secretary of State before it and also to call for the papers from the Department. That Committee can pursue this matter to discover the true story.

Mr. Price

An amendment was tabled by my hon. Friend the Member for Nottingham, West (Mr. English) that, quite properly, could not be discussed because it had not been selected, for one reason or another. I hope that the Social Services Select Committee will attempt to call the Secretary of State to account and make him produce the papers on which his decision was based. There is a great deal to be said for the remarks of my hon. Friend the Member for Nottingham, West on this matter.

There is no point whatever in having Select Committees or, indeed, this Chamber—which is supposed to be able to call Ministers to account—if we cannot discover the basis upon which Ministers take decisions. The latest set of ground rules laid down by the Civil Service Department and the previous Prime Minister—broadly termed the Croham directive—is a wholly inadequate basis for enabling Select Committees or hon. Members to scrutinise the actions of Ministers.

I pass on now to a more "meaty" Third Reading point. I understand that my own Front Bench has indicated that it has no intention of voting against the Third Reading of the Bill. However, such pledges do not bind Back Benchers. I shall feel disposed to call a vote against Third Reading unless a number of questions are answered.

First, the London borough of Lewisham has expended money on a court case. I shall not be satisfied that the Bill should be given a Third Reading unless the Secretary of State gives us an assurance that no action will be taken against Lewisham by the Secretary of State for the Environment because it is spending too much money. Some of this money has been spent on litigation that resulted directly from the illegal actions of the Secretary of State. It would be a scandal if Lewisham were one of the local authorities singled out for penal action by the Government at a time when some of its expenditure had resulted directly from the Secretary of State's illegal action. I want a definite indication on that issue.

We have had a lot of discussion about litigation, and I suppose that this will not arise. If the new area health authority should be involved in substantial litigation for action taken by the commissioners, will the Secretary of State at least indicate in his winding-up speech that he will look favourably at reimbursing the authority? I agree that we have rejected the idea of any amendments in this area, but if we are to allow the Third Reading to go through on the nod—

Mr. J. Enoch Powell (Down, South)

It is not going through on the nod. That means without a debate.

Mr. Price

I bow to the right hon. Gentleman's greater linguistic knowledge of the workings of the Chamber. If we are to allow the Third Reading to go through without a Division we want some assurances that if the new area health authority gets into that sort of financial difficulty, consequent upon the actions of the commissioners, it will not have to find more money out of its funds for the aftermath and vestiges of this mess that the Secretary of State has created. That money should be devoted to patient care.

8.43 pm
Mr. Patrick Jenkin

I shall try to reply briefly to all the questions raised in the debate. However, some of the speeches that have been made could have provoked me into giving rather longer and more substantial replies.

The right hon. Member for Lewisham, East (Mr. Moyle), in opening the debate after I had moved the Third Reading formally, asked some specific questions of which he was kind enough to give me notice. He asked me whether I would consider sympathetically an extension to the 1980–81 and 1981–82 period during which the area health authority will be allowed to adjust. No doubt he has in mind the fact that the region will require the area to repay the money that the region lent it in order to cover the overspending in earlier years. I shall seek to make recovery in 1980–81 of the part of that debt that is as reasonable as the circumstances justify. I shall review the position at the end of that financial year and then see how the recovery of the balance should be made in the light of the circumstances then prevailing.

The right hon. Member also asked, as did the hon. Member for Lewisham, West (Mr. Price), how the Lewisham and Southwark borough councils should be compensated for legal costs. That would also extend to community health councils. As soon as I saw the amendment that was not called, I looked at this matter very carefully. I view this with a good deal of sympathy in view of the circumstances in which those cases were heard and the fact that in neither case was an order for costs enforced, although in one case it was made.

I assume that the court recognised that in neither case was it proper for costs to follow the event, or for the unsuccessful applicants to pay the commissioners' costs. It was right to consider this matter sympathetically. I had to take account of the precedents to which it might give rise, as other people might object. In both cases it would have been open to the applicants to take the point that the direction was invalid. That point was finally decided by Mr. Justice Woolf in the proceedings that formed the origin of the Bill. In neither of those cases was it thought proper to take the point. Therefore, I had to bear in mind that point on the other side.

Having considered the matter, it seems to me that the circumstances produced by the judgment on the validity of the instrument dated 1 August—the case that gave rise to the Bill—were so unusual that it would be right to make ex gratia payments to cover the costs incurred by the applicants in proceedings in respect of the closure of the two hospitals. I hope that that precedent will not have a significant effect on other areas of Government responsibility.

The right hon. Gentleman asked whether I would instruct the commissioners to give all the information reasonably required by the area to carry out its job after 31 March. I have already done so. Indeed, one of the matters that I discussed with the area on 29 February was the arrangements that should exist to enable the information to be made available. A little difficulty was caused. Mr. Stan Hardy departed immediately for a long-planned, nostalgic trip to India. His absence made the task a little more difficult than it would have been. I want to ensure that anything reasonable that can be done should be done.

The right hon. Gentleman asked me whether there was any way in which the validated directive of 1 August 1979 could possibly be extended beyond 31 March 1980 so as to preclude the reinstatement of the area health authority. The answer is that I hereby give a categorical undertaking that, subject to any totally unforeseen circumstances—I mean genuinely unforeseen—it is my intention that the area health authority should resume control of the authority's affairs on 1 April. The date in the Bill will be the date when the period runs out.

I must advert briefly to one other point. I refer to the culpability—if that is the correct word—of those who advised me. That point was raised by the hon. Member for Keighley (Mr. Cryer) and was picked up by the hon. Member for Hackney, South and Shoreditch (Mr. Brown). The issue on which this case turned, in the last resort, was what lawyers would call the ratio decidendi—whether a directive that did not specify a time limit could be valid—as section 86 of the National Health Service Act 1977 contained the words: to direct that during the period specified by the directions a function conferred on any body. On the questions whether there was an emergency, whether I could reasonably invoke that clause in these circumstances and whether I acted in good faith, the court held in my favour. On the question whether I acted reasonably, the court held that I could not be held to have acted unreasonably.

Mr. English

rose—

Mr. Jenkin

I know the point that the hon. Gentleman intends to make. In the last resort, it is a question of obiter dictum whether section 17 would have been an alternative. The real question turned on whether I should have had to specify the time limit. I think that this is worth putting on the record.

Mr. English

rose—

Mr. Jenkin

I shall not give way, as we are anxious to get on.

It is worth putting on record the point to which the judge adverted shortly before he reached his conclusion on this aspect of the case. I am quoting from page 26 of the judgment: On this aspect of the case"— and the aspect is the question whether there needed to be specified a time limit for the operation of this direction— I should record that at one stage Mr. BlomCooper"— counsel for the applicants— conceded that he was not relying on the failure to specify, as it was not a mandatory requirement. The point that I am making—I think this has to be borne in mind by those, of whom there have been many on both sides of the House, who have criticised those who gave me legal advice—is that on the very issue on which the judge came down against me in this case and in favour of the applicants, the applicants own counsel abandoned the argument halfway through. So doubtful was the question whether this made it mandatory to specify a time limit that the applicants' own counsel at one point decided not to base his case on that.

If I may say so, some of the extravagant language that has been used during the course of this Third Reading debate and earlier in the proceedings attacking those who give me advice might have taken account of the fact that this is a very narrow legal technicality, but the consequences are immensely serious and I have accepted full accountability to the House for them. [Interruption.] The hon. Gentleman is quite wrong. He could have tabled a censure motion and he could have required my resignation. The House is not powerless in these matters, but nobody has chosen to do that.

On the narrow legal technical point, the applicants' own counsel abandoned the point half-way through the case, and presumably, when he realised that he was losing all the other points on which he had based his case, he came back to this, and in the end the judge held in his favour on that one narrow point. I hope that those who criticise people who advise Ministers and base their criticism on this case will recognise just how narrow and marginal was the issue. We had to decide this in a very short time, faced with a challenge—and it was a challenge—by the majority of the Lambeth, Southwark and Lewisham area health authority.

The question is, what is the duty of members of an authority who find themselves faced with a choice of unpalatable decisions? There may be times when individual members face a situation in which their allegiance to the interest that they represent appears to conflict with their duties and the corporate accountability which they have as members of the authority. I think that we all recognise the dilemma that members face in these circumstances. However, in the last analysis, the collective responsibility of the authority must be overriding, and if individual members find it impossible to reconcile a conflict of interest the remedy is in their own hands—to resign their appointment. In the case of the Hounslow authority, that is what Councillor King and his colleagues decided to do, perfectly honourably. What is not tolerable is that they should continue in office and seek to spend money that they have not got. That was the situation in which I had to act.

I apologise to the House for not making it effective, for the narrow technical reasons that I have just outlined. I remain of the belief that I was wholly justified in seeking to take the action I did, but the Bill is the result of the legal error that we made and I hope that the House will give it a Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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