§ Mr. Dobson
I beg to move amendment No. 61, in page 8, line 9, leave out 'three months' and insert 'one month'.
The Bill provides that the lifting of Crown immunity should come into operation three months after the Bill is given royal assent. As reasonable people, we all understand that sometimes it is necessary for a period to elapse before a Bill comes into operation because consultations need to be carried out and regulations need to he issued. In some cases it is necessary for the bodies 143 that are covered by the regulations to make special new arrangements to cope with the change in the law, but in this case no regulations are required.
Ministers have told us throughout the discussions that Crown immunity provisions are being lifted from the food hygiene regulations, but that the change is gratuitous because health authorities are carrying out the provisions already without the law having been changed. There is no need for any regulations in this case. Ministers say that there is no need for any change in practice, policy or behaviour by the health authorities. In those circumstances, there seems to be no reason why they should have to wait three months before the law comes into force.
§ Mr. Corbyn
This amendment is an important long-stop. During this rather short Report stage we have found time and time again that the provisions of the Bill are subject to a later decision by the Minister. This is a feature of so much of this Government's legislation. The House votes and then finds that all that it has done has been to give a pen to the Minister. He can decide how the Bill will operate, where it will operate and who will suffer as a result.
The Minister was unable to answer questions on the appeal mechanism for family practitioner committees where pharmacy contracts are to be curtailed or introduced, or on consultations about the location of pharmacies, or on consultations with community health councils. We are awaiting the regulations dealing with the location of pharmacies and the surrounding issues. Therefore, it is not right that the Bill should be brought into operation within a mere three months. Six months is even a little tight. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) was a little cautious in providing for only six months in his amendment. It would be better if there could be a full year before the Bill is brought into operation.
In case any Conservative Member should say that the abolition of Crown immunity would be held up, there is nothing to prevent the Government from saying now that the provisions of the food hygiene regulations and the Health and Safety at Work etc. Act 1974 should be deemed to be operative in NHS premises from now on. There is no need for delay. The least that the House can do is to accept the amendment. The Minister would then be able to think about the answers that he has promised to give to the House.
§ Mr. Hayhoe
The hon. Member for Islington, North (Mr. Corbyn) seems to have been as inaccurate in his comments on this amendment as he was in much else that he said. The amendment proposes to reduce the period from three months to one month. The hon. Gentleman seems to think that the amendment proposes to increase the period from three months to six months. If his understanding of even that simple provision is as incomplete as he has now demonstrated, heaven help us if he were to try to interpret the more complicated provisions of the Bill.
The three-month provision was included in the Bill when it was published. Nobody can say that the Bill has been delayed. It was announced by my right hon. Friend the Secretary of State for Social Services in February. To carry it forward to Third Reading early in June is a fairly 144 significant achievement. It would be unreasonable at this stage to change the implementation date. Therefore, I hope that the amendment will not be pressed.
§ Amendment negatived.1.52 am
§ Mr. Hayhoe
I beg to move, That the Bill be now read the Third time.
This short Bill contains provisions on three important health issues. Clause 1 seeks to apply the food hygiene legislation to health authorities and thus remove Crown immunity from hospital catering. Clause 2 is concerned with the change in the arrangements for retail pharmacists to take up NHS contracts. It provides powers for family practitioner committees to grant an application for an NHS contract only in circumstances where it is considered as necessary or desirable for the adequate provision of services to patients. It carries through an agreement that was made by my predecessor and the industry. The new contract offers many benefits and is a substantial improvement on the current arrangements. Patients will have a service that more accurately reflects their needs, and some of the expected savings will help to finance the development of the pharmacist's wider role. The taxpayer will get some savings and better value for money.
Clause 3 puts beyond doubt the statutory basis for the longstanding and accepted practice of adjusting future payments to NHS contractors to offset past under or overpayments when considering remuneration. That is for general medical practitioners, dental practitioners, opticians and pharmacists.
The Bill has been debated thoroughly in Committee. I think that it has been improved by the amendments that have been agreed during Report and I commend it to the House.
§ Mr. Dobson
We welcome clause 1 of the Bill in so far as it removes Crown immunity from the food hygiene regulations. However, it does not go far enough and will not have a significant effect unless the Government provide the funds that are necessary for health authorities with inadequate kitchens to bring those kitchens up to scratch. We support in clause 2 the idea of rationalisation of the distribution of pharmacies. I can understand why a number of Government hon. Members are not keen on this proposition. It is because it explicitly recognises that the free play of market forces is worse than useless in determining the best locations for pharmacies. There are communities which want pharmacies but the free play of market forces may mean that they will not get them.
We support the licensing system that the Government are introducing. Even with its disadvantages, the Bill will improve the situation and we look forward to a better local pharmaceutical service. I make again the point I made on Second Reading, that we will never get the full benefit of the usefulness and the skill, training and education of pharmacists until they find some way of separating from the pharmaceutical side of the business the sale of rubber ducks and other such items.
Subject to reservations, we welcome the proposition contained in clause 3 and are glad that the law will be changed so that clawback will mean what it is supposed to mean and will not mean just plain claw, because up to now Governments have allegedly clawed back from contractors money that the contractors never had in the first place. That is wholly wrong and unreasonable and 145 held to be so in the courts. My final point will commend itself to my hon. Friend the Member for Islington, North (Mr. Corbyn). The Government have introduced legislation that has resulted in a number of elected local councillors being surcharged for the financial consequences of things they have done. Why has no one been surcharged for the financial consequences of the foul-up which led to the Department of Health and Social Services being taken to court and found guilty of wrongdoing by trying to get money to which it was not entitled? If people at one level of government are held responsible for the financial consequences of their actions, then people at central Government level ought to be held responsible. We would rather it was Ministers than civil servants. Subject to all the reservations that we expressed on Second Reading, in Committee and on Report, we broadly support the Bill.
§ Mr. Neil Hamilton (Tatton)
I owe an apology to my right hon. Friend the Minister for Health and to the House, because I was not in my place to move amendment No. 17. That was because I was listening to the persuasive arguments of my hon. Friend the Deputy Chief Whip about why I should withdraw my amendment. The moment to move it arrived and I missed it. Had I the suspicious cast of mind of the hon. Member for Workington (Mr. Campbell-Savours) I should no doubt have suspected a squalid manoeuvre by a Government Whip to muzzle a Back Bencher. As we know that the Whips do not indulge in tricks of that kind and as I have a rather higher view of the purpose of our Whips Office, I did not think that for one moment. The alternatives with which I was left were either to hold a press conference in a Committee room tomorrow morning or to make a speech on Third Reading——
Mr. Deputy Speaker
Order. I hope that the hon. Gentleman will not seek to make now the speech that he might have made had he been here to move his amendment. That would not be in order.
§ Mr. Hamilton
I stand to he corrected, but as I had intended earlier to confine my remarks to clause 2 and what is in the Bill. I believe that what I am about to say will be in order on Third Reading.
The effect of clause 2 is repugnant because it goes counter to the Government's philosophy of reducing state interference, monopoly and bureaucracy. On Second Reading, my right hon. Friend the Minister for Health said that the Bill's overall aim was to develop the pharmaceutical service, which would better satisfy the interests of the patients, the profession and the taxpayer and that the new contract would enable the family practitioner committees to make progress towards a more even distribution of pharmacies, which would better meet the needs of patients without being wasteful of NHS resources. Clause 2 seeks to achieve that by removing the current automatic right of a registered pharmacy to obtain an NHS contract to dispense NHS prescriptions.
We all applaud the Government's policy of getting better value for money in the NHS. Modest cash savings are claimed from what clause 2 introduces. There is plenty of scope within the NHS for making much larger savings than that. Waste is a byword within the NHS because of 146 the absence of market disciplines and the signals which that gives. Therefore, it prevents a rational consideration of priorities.
The savings that I would have preferred to see are, alas, not included in the Bill and we have instead a net saving of, perhaps, £2 million, as the Government claim, for the effect of clause 2. But the price that we shall have to pay for those £2 million in savings, if we accept them, is the effective cartelisation of the pharmaceutical retail sector. My hon. Friend the Under-Secretary, the Member for Wycombe (Mr. Whitney) said on Second Reading that by restricting the right to entry into the retail sector of pharmaceuticals we would not be restricting the establishment of a pharmacist, in practice, because a pharmacist can set up a practice without an NHS contract. I hope that he will not mind if I say that I thought that that was somewhat disingenuous because the average chemist derives 70 per cent. of his income from NHS prescribing and if he is not able to prescribe medicines on the NHS he will not be able to have a commercially viable business and so will not be able to set up.
Therefore, we see the baleful effects of the NHS monopsony on the monopoly among its suppliers which the Bill will create. In this way we shall buttress the inefficiency of the system and in so doing we shall create a new capital asset for existing contractors, one which has been recognised by the Pharmaceutical General Council for Scotland in the propaganda which it issued designed to encourage us to support what the Government propose. It said that the improved security of tenure would reduce the financial risk in the eyes of a bank because a competing pharmacy will be allowed an NHS contract only where it is necessary or desirable and the security of a loan will thereby increase.
The industry and its apologists accept that a capital asset will be created which arises out of the monopoly privilege which the legislation will give. That asset will be paid for, first, by the taxpayer and the consumer through inconvenience, and would-be pharmacists, through not being able to set up in business as a result of the restrictions.
The £4 million gross savings that that will bring about must be seen in the context of the total NHS dispensing budget of over £350 million a year. Even of that £4 million it is proposed to plough back £2 million into the system. But if the number of closures of existing pharmacies which the Minister wishes to encourage exceeds the 300 which it has been claimed will come about, those cost savings will be correspondingly reduced.
In some parts of the system we shall be increasing costs, because it is proposed to create up to 100 new quangos which will be charged with the duty of deciding who will be able to trade as a pharmacist. We shall be substituting the choices of bureaucrats for those of consumers.
Entrepreneurs build businesses by fulfilling a need or filling a gap in the market. The proposals in the Bill will frustrate such developments, because people will need a permit to trade. It will be difficult for the bureaucracy that will administer the system to anticipate future patient needs or the changes taking place in the retailing sector and thereby enable the market to develop and satisfy the consumer.
In effect, we shall be freezing the existing pattern of distribution of NHS dispensaries, inhibit the development of the retail trade and intensify concentration in the industry. There will be a great incentive for firms to 147 expand by the acquisition of existing pharmacies rather than by setting up in competition and developing new pharmacies to take advantage of the changing demands and desires of consumers.
Several of my hon. Friends think that a Conservative Government should not be going along that road. The Minister claims that there is general support in the industry for the move that he has made. The local pharmaceutical committees contractors' conference in June 1985 overwhelmingly supported the Bill, but that is not surprising, because the conference is entirely comprised of existing contractors and they will acquire a capital asset and the competition to which they will be subject in future will be reduced. They have passed a resolution in support of the Government's proposals, but we can say, "Well they would, wouldn't they?"
Company chemists, comprising 1,500 pharmacies, have come out against the proposals and between 2,000 and 3,000 independent pharmacists who are supposedly represented by the Pharmaceutical Services Negotiating Committee are also against the Bill. In addition, the 34,000 or so members of the Pharmaceutical Society, who might wish to set up in business one day, are not represented by industry representative bodies and had no opportunity to vote or express an opinion. The president of the Pharmaceutical Society has attacked the proposals. He said:They have struck at the basic structure and operation of the entire pharmaceutical profession.We might have chosen an alternative way to achieve the savings that we want to make in the system, but, alas, the Government have not chosen to go down that road. In 1984 the Pharmaceutical Society, the Rural Pharmacists Association, the Pharmaceutical Services Negotiating Committee, the National Pharmaceutical Association, the Co-operative Pharmacy Technical Panel and the Company Chemists Association proposed that by financial incentives and disincentives——
Mr. Deputy Speaker
Order. I hope that the hon. Gentleman is not seeking to make the speech that he might have made on Second Reading or at an earlier stage in our proceedings. He must address himself to what is in the Bill.
Mr. Deputy Speaker
Order. The Chair got a different impression, so I hope that the hon. Gentleman will follow my guidance.
§ Mr. Hamilton
I shall follow your guidance with pleasure, Mr. Deputy Speaker.
I was seeking to explain why clause 2 is misguided. It contradicts what I believe to be highly beneficial principles of economic policy that the Government have embarked on introducing in other areas and, in that context, the proposal is mistaken.
I am aware that the hour is late, and I shall not expatiate upon that at great length, but in the clause the Government have indulged in a flirtation with Socialism, which has led us into a shotgun marriage. We have seen this all before. On prices and incomes policies, we embarked upon one system of regulation, which was doomed to failure, which encouraged us further down the 148 road to regulation and which achieved the opposite of what we intended. We have seen it in relation to milk quotas in the common agricultural policy——
Mr. Deputy Speaker
Order. There is nothing in the Bill about milk quotas. I hope that the hon. Gentleman will stick to what is in the Bill.
§ Mr. Hamilton
I was seeking to draw an analogy which is directly relevant to the system of regulation which the Bill will introduce. What we have seen elsewhere is what we shall see in relation to the provision of pharmaceutical services if the Bill becomes an Act. Costs will become insupportable within a nationalised Health Service, and th need for bureaucratic controls rather than market pricing, as we have had with milk quotas, will reduce consumer choice and increase costs to the taxpayer.
We have supped with the devil on this occasion. Instead of using a long spoon, as we should have done, we have been spoon-fed by the devil. I hope that when the Bill is considered in another place, their Lordships will do what they did last year on the Law Reform (Miscellaneous Provisions) (Scotland) Bill and remove the clause, the better to provide for the needs of consumers and taxpayers.
§ Mr. Kennedy
Clause 1 is still drawn too narrowly and is too limited in its objectives and, therefore, its effect, although its provisions are welcome in their own right. It is a shame that the Government did not take this legislative opportunity to go further. I hope that their Lordships will try to extend the provisions of clause 1 and remove Crown immunity from hospital premises generally.
The Minister did not answer satisfactorily the point made earlier about the way in which the new contract for pharmacists and the right of entry into the NHS contracting base will operate. It has frequently been argued that there is bound to be considerable disquiet among unsuccessful applicants because of what many of us regard as an inadequate appeals mechanism. The Minister promised further discussion on the matter. In the context of clause 2, his remarks were a little woolly. He said that representatives of the pharmaceutical profession could make submissions to him, but he did not give the sort of commitment which we wanted: that he will sit down and discuss with the elected representatives of the profession the appeals mechanism that could be introduced. The Governmemt must give more attention to that matter than they have so far. I hope that the concept of an independent appeal will commend itself to Conservative Members in another place, who tend to be more fair-minded than those who operate from the Conservative Benches in the House of Commons.
On clause 3, the Government are not just storing up trouble, but amassing further power for themselves, although they have stressed that they have no intention of using it. I cannot understand why the Government are taking those powers in the first place if they do not intend to exercise them. That is not the normal practice of Government. However, they claim that they will not try on again their efforts to recoup what they identify to be excessive and unreasonable profits, as happened dramatically last year over the NHS dispensing costs associated with opticians.
The Government had to legislate only because they were taken to court over the considerable sums involved, 149 and were found to be acting illegally. It is particularly ironic that, because of an unfavourable court ruling, the Government have introduced the clause, but, to assuage hon. Members and the contracting professions in the NHS, they have informed us that they do not intend to use the very powers that they have gone to such lengths to grant themselves. We look on that aspect of the Bill with some dubiety.
In some of its provisions, the Bill is sensible. I think for example of the abolition, as far as it goes, of Crown immunity and of the recognition that there is a need for a rational distribution of pharmacies. However, the Bill does not go far enough, or indeed fairly enough in some respects, towards meeting some of the legitimate and sensible anxieties that have been expressed. We shall not oppose it tonight, but we hope that it will be improved further in the other place.
§ Mr. Michael Forsyth
I have no intention of detaining the House. I appreciate the lateness of the hour, but I should like to support the arguments — without repeating a single one of them—put by my hon. Friend the Member for Tatton (Mr. Hamilton)
It is a tragedy that the arguments that some of us made on Second Reading were not pursued in Committee. We are having to consider them at a very late hour when we are under some pressure. The Bill uses public money to ensure the closure of hundreds of small businesses round the country. It rejects competition by allowing pharmacy practice sub-committees to maximise the distance between dispensaries to one kilometre. It sets up more than 100 new quangos and gives no indication of the cost of doing so or of how they will be serviced or will obtain the information that they will need about demographic changes and changes in the nature of their community in order to make their decisions. The Bill will literally destroy thousands of full and part-time jobs. It will diminish choice and force up prices as it will reduce competition for goods sold in chemist shops.
The Bill will do all of those things, and seems to be quite against the basic priciples that I would expect from a Conservative Government. I am sorry that those arguments have not been given proper scrutiny during the Bill's passage in the House, and I look to my noble Friends in the other place to make it a better Bill, and one more fitting for a Conservative Administration to introduce.
§ Question put and agreed to.
§ Bill accordingly read the Third time, and passed.