HC Deb 05 November 1986 vol 103 cc991-9

Lords amendment: No. 2, in page 4, line 27, at end insert— (5) The regulations shall be so framed as to preclude—

  1. (a) a person included in a list published under subsection (2)(a) above; and
  2. (b) an employee of such a person;
from taking part in the decision whether an application such as is mentioned in subsection (2)(c) above should be granted or an appeal against such a decision brought by virtue of subsection (4) above should be allowed.".

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Mr. Newton

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker

With this it will be convenient to take Lords amendment No. 3.

Mr. Newton

I think that the House is familiar with the background to the amendments in terms of the Government's general propositions on changes in pharmacy contract arrangements and the provisions in the original Bill, The amendments reflect the further consideration of views expressed in another place on the right role for contractor pharmacists, both in family practitioner sub-committees which will make decisions on applications for new NHS pharmacy contracts and in the bodies which will hear any appeals against those decisions. The effect of the amendments is to confine the right to take decisions on new pharmacy contract applications to those members of sub-committees or appeal body members who are not already in possession of, or employees benefiting from, an existing NHS pharmacy contract.

I should say in making clear this change in the decision-making process—the voting position—that we are not intending or suggesting in the amendments any alteration in the size of the sub-committee or the appeal body, which in both cases will remain at six members plus a lay chairman. There will be three non-pharmacist members and three pharmacy members, of whom one should be a non-contractor pharmacist. However, the two contractor pharmacists will now play only an advisory role. They will not vote on applications and, indeed, will be required to withdraw from the proceedings before the sub-committee or the appeal body reaches its decision on the application.

The third of the three pharmacy members, at both levels, who will not be an existing contract holder, will be appointed from a list of nominees provided by the Pharmaceutical Society of Great Britain—as the ethical body for the whole profession—from branches of the profession other than community pharmacy. I must make it clear that the amendments do not preclude that third pharmacist — the non-contractor pharmacist — from having a vote or from taking part in the final decision on applications. As my noble Friend the Under-Secretary of State made clear in the other place, the Government will consider further whether it would be right for this third non-contractor pharmacist to be purely advisory or whether he or she should be part of the decision-taking membership. We shall make an appropriate provision one way or the other in the regulations to be made under this clause once the Bill is enacted.

I hope that on this rather tangled subject I shall carry the House with me in recognising that the amendments placed in the Bill in the other place by the Government meet a major anxiety expressed not only in the other place but in this place at certain earlier stages of the proceedings to exclude from actual decisions on new applications for contracts those who, whether rightly or wrongly, might be thought to have a vested interest in the outcome. We have concluded in the light of consideration that this is the right course and that the decision-making structure which we now envisage will fairly reflect the interests of local communities in the provision of new NHS pharmacy services and a pharmacy in its wider professional sense. Contractor pharmacists will remain involved to offer advice from their own perspective on local pharmaceutical needs. That advice will no doubt be seen as important and valuable, but contractor pharmacists will not, in the end, be able to take part in the actual decisions that are made once that advice has been given.

I should like to make clear our intentions towards regulations. We intend to clarify the composition of the FPC sub-committees and the appeal bodies which will deal with applications for new pharmacies. In the first place, we intend to exclude dispensing doctors from partipation, for reasons which I think will be obvious. Secondly, we intend to ensure that no more than one of the three non-pharmacy voting member positions can be filled by any single family practitioner committee contractor profession other than pharmacy. In other words, we intend to make sure that no more than one of those places can be filled by, for example, a non-dispensing doctor or a dentist. The aim is to ensure that the interests of the consumer will be still further strengthened and that the withdrawal of the contractor pharmacists' votes will not create a problem of balance between the different contracting professions. We seek a fairly delicate balance, as I suspect any hon. Member who has ever had cause to look into this problem will realise, and we think that we have probably got it about right in these proposals. I would not wish to pretend that I think that that view will be unanimously held by all those concerned with this difficult matter.

Mr. Weetch

If, in the course of time, this elaborate structure which the Minister has built up is found not to work or to work in an unsatisfactory way, will he not hesitate to intervene again, identify the problem and put it right at a later stage?

Mr. Newton

In the light of my experience of this subject in the past two months since I became Minister for Health, I can certainly say that I should hesitate to intervene again, but I say that in a slightly jocular spirit. Of course, if it turned out that these arrangements did not fulfil the objectives set for them or in some way they proved unsatisfactory, I would be prepared, as one who is, I hope, a reasonably sensible and pragmatic man, to look at them again. We believe that, as matters stand, this is a reasonable balance to have struck, which will work in fulfilment of the objectives set.

Our assessment remains that the FPC sub-committees and appeal bodies as now constituted will take responsible and informed decisions which balance the National Health Service's interest and the taxpayer's interest in restraining NHS pharmacy costs with the need for good local access to services. We certainly would not have accepted further changes that diverted us from those long-term objectives.

As I have said, it is a difficult and delicate balance in view of the differences between some of the contractor professions and the different perspectives of other groups concerned with these issues. We have sought to find a fair and reasonable balance, and I think that we have achieved that. On that basis, I commend the proposals to the House.

Dr. Marek

These proposals were the subject of much concern in Committee. The principal worry was that some members of family practitioner sub-committees might have an interest in deciding who would or would not be able to open a pharmacy in a particular area. Hon. Members on both sides of the Committee shared that concern, as did those in the other place. The then Minister, the right hon. Member for Brentford and Isleworth (Mr. Hayhoe), gave an undertaking to look at the matter again and, following the keen interest shown in the other place, we now have a set of proposals which are vast improvements on the originals.

I am sure that it would he possible to pick holes in the proposals. It is possible that sometimes they will not work as well as they could. I was pleased to hear the Minister's response to my hon. Friend the Member for Ipswich (Mr. Weetch) that if, at some time, the proposals were seen to have faults, he would look at them again and perhaps correct them. Having said that, it is an important principle that people who have an interest in the opening of pharmacies should not make decisions on them. That raises questions about what happens in the other sub-committees of the family practitioner committees. I am sure that I would he ruled out of order if I went into any detail on that, but the principle is that in this sub-committee the people who make the decisions on opening pharmacies must not have an interest in the matter. What does that mean for the other sub-committees of the family practitioner committees? The principle contained in the amendment is right.

The regulations have yet to be considered. I hope that they are phrased so that the original committee will decide the matter conclusively, not in nine cases out of 10, but in perhaps 49 cases out of 50. We do not want the committee to go through all this and decide who may set up a pharmacy and then have a rerun, in many cases, at the appeal stage. The right to appeal should be kept simple. One should he able to appeal only on very few principles —for example, if something has been done wrongly or if the decision which has been taken is one to which a reasonable person could not hold. However, people should not be allowed to appeal if the only reason for doing so is that, on the balance of probabilities, the decision might have gone the other way. That will depend on drafting of the regulations. In another place, the wording was debated. Their Lordships wondered whether the onus should be on the committee to show that the application should not be granted or on the applicant to show that the committee should grant him permission to open a business. I ask the Minister to consider the matter seriously, because I hope that he will agree that unnecessary quangos are not wanted. If they are not wanted, nor are unnecessary appeals. If unnecessary appeals are not desired, we must get the original committees right so that they reach decisions which are manifestly seen to be fair.

I hope that the decisions and the reasons for them will be made public. I hope that the community health councils will be involved in the decisions and will make representations, because only through an open system can we ensure that the original sub-committee decision will be the right one. We can then tighten the rules on the appeals side.

With that, I cautiously welcome the Lords amendment. It is a big improvement on the previous position and Labour Members will not seek to divide the House on it.

Mr. Weetch

I wish to voice some of my misgivings about the position that still obtains in the Bill. My speech will also give me the chance to question the Minister on matters about which I am still unclear.

I regret the absence of the Adam Smith lobby on the Government Back Benches, because earlier in debate on the Bill they made much thunder about the loss of opportunity for people to enter the pharmaceutical services market and offer them to the public. I expected that, now that the Bill had reached its last gasp in the House, they would be here for a bravura finish, but they have almost entirely fled the field. That is regrettable because there are still some comments to be made in this area, where the Government are doing something pretty serious to the supply of pharmaceutical services.

Under the clause, the supply of pharmaceutical services will be organised according to the principles of regulation as opposed to open entry and unregulated competition. That is a pretty odd approach to be taken by a Government who are dedicated to free enterprise. I do not object to that approach, but it contains, at least at first sight, some philosophical contradictions. The main virtue of the provision is to avoid over-supply and the increase in cost to the taxpayer from the Government having to pay on-cost expenses to too many suppliers. In aggregate, this will increase the unit costs for pharmaceutical supplies throughout the country.

6.15 pm

I accept the Government's approach as sensible, but if people are restricted from entering the pharmaceutical profession to supply services, it is for the Government to ensure that any system of appeal is absolutely watertight.

It is a bad step to allow local opinion to determine the matter as that will be influenced to a great extent by people who stand to lose or gain from the regulation of the supply of the services. The Government's statement that a national appeals system could not be set up because it would be overloaded with bureaucracy and be slow and cumbersome fills me with great dismay. If the Government cannot set up such a system without strangling themselves with red tape, it is a pretty sorry state of affairs.

Out of the blue this week on two large estates in Ipswich —the Chantry estate and the Gainsborough estate—arid not in response to any inadequacy of the present service, because the two established chemists involved are models of good suppliers, it was proposed that two new suppliers set up in business when there is already adequate provision. Why should that be? The new suppliers are entering the market before the curtain comes down when the Bill comes into operation. In Ipswich, at least, someone is trying to slide under the door at the last minute to offer services so that he will be in position before the Bill affects what he proposes to do.

I have received two letters this week from separate existing suppliers who argue that they will be damaged because they can cope adequately with the existing demand. Therefore, those two estates do not need any more suppliers. The existing suppliers argue, as do the Government on a general principle, that the increasing costs which the taxpayer will incur through supporting the new entrants will not result in an improved service over the status quo. Therefore, it is difficult to understand how new entrants can be justified. Is it true that throughout the country new suppliers are trying to enter the system at the last moment before the die is cast on the legislation? Is that the case? Have there been many examples elsewhere?

If these new entrants succeed in entering the market for new services, although extra supply is not needed, will they be told to go or will they be allowed to remain for ever now that they have slid under the door at the last minute? If they are subsequently told to go, will they be compensated? Have they come in at the last minute to collect the compensation at the eleventh hour?

I wonder whether the Government can give me some guidance on all those points. While the Minister is replying, I shall be taking down a draft reply that I can use for the two chemists who have written to me this week. I will then be able to say that the reply came straight from the horse's mouth. For the moment, I shall content myself with that.

Mr. Kirkwood

I agree with what has been said in this short debate about the changes contained in these amendments. This legislation is implementing an important step. It is a vast improvement on the rather ham-fisted attempts that the Government were trying to foist upon the profession in Scotland about a year ago when they tried to tag some provisions on to the back end of a miscellaneous legal Bill that applied to Scotland. The House of Lords was quite right to sling the whole lot out.

The worry that was expressed in the House of Lords at that time was the fact that that could be construed, to a certain extent, as a restraint on trade. As the hon. Member for Ipswich (Mr. Weetch) has said, we must try to avoid that at all costs. However, we have to balance that against the other needs and requirements of the Health Service. We must be fair—equally we must be seen to be fair—to all parties involved. Although it has taken us a little time, this amendment is a substantial improvement and has every prospect of success.

I am slightly worried about the question of the success or otherwise of the system. Of course, that can be raised when the regulations are brought to the House. However, it is important that the Department should carefully monitor the membership changes that we are making to the committees and the impact that that will have on the system as it works in practice after the Bill has been implemented. I do not know what machinery, if any, exists to do that. I am fresh to this Bill and did not serve at any of the earlier stages. It may be that that point was considered in Committee.

However, I share the anxiety expressed earlier about the machinery that the Government will use to ensure that the appeals procedure is not only working well but is seen to be working well. Steps must be taken to ensure that the way in which decisions are taken by the individual appeal committees is, by and large, consistent throughout the country. Of course, I understand and accept the problem that was referred to earlier about establishing a national appeal system. However, if we end up with a patchwork quilt of differing standards of decisions that would be a matter of concern. I listened carefully to the Minister when he said that he would not stand back and ignore that. However, how will the Minister know whether the system is operating satisfactorily?

The hon. Member for Ipswich indirectly touched upon the question of what steps are to be taken in the course of the appeal process to notify other interested parties—consumer groups, community health councils and so on— that applications are being considered and that the appeals are being heard. Looking at the provisions on the face of the Bill, I am not clear as to what procedures would be necessary in order to notify the public and interested parties about how this new committee and appeal system is working from day to day so that representations can be made by appropriate people at the appropriate time. It may be that those points can be considered when the regulations come before the House. I accept that. However, if there are views in the Department about those major areas, it would help the House in considering the amendment if the Government could say something about them.

This is an important and significant step and should not be taken lightly. I do not think that the Government are taking it lightly. The appeals procedures put in place by this amendment are a vast improvement and I endorse them on behalf of myself and my right hon. and hon. Friends.

Mrs. Currie

We hope that the change in the amendments before the House will be welcomed on both sides. They present an excellent example of the revising role of the other place and the importance of the careful negotiations that have taken place between the Government and the pharmaceutical societies concerned. I should say that my brother-in-law is a retail pharmacist in north Devon and, although I have no financial interest in the business that he runs so efficiently, it does mean that I appreciate the role of the retail pharmacist, especially in rural areas, and the excellent work that they are able to do.

The clause as amended produces a balance between the two wide possibilities that might be considered, the first being a free-for-all that some members of the other place have advocated. Indeed, the Office of Fair Trading has drawn our attention to the problem that comes from restriction of trade. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) also drew our attention to that. There is a case for saying that there should be a complete free-for-all and that retail pharmacies should be treated like any other retail business, subject perhaps only to planning permission. The fact is that retail pharmacies are not retail businesses like any other. They provide health care and they are, at least in part, funded in order to provide that health care with taxpayers' money through the National Health Service. Therefore, we have an obligation to ensure an adequate provision of health care as far as possible throughout the country and to be guardians of the public purse. The amendments before us and the clause they amend do that adequately. We have taken careful note of the points that have been made.

The amendment is specific on the decision-making process, the system by which we might get appropriate decisions made. One way of doing that would be if the Elephant and Castle was to decide. However, that would fill all of us on both Front Benches and everywhere else with complete horror. We have enough to do with all the decisions that do come to us. Therefore, it is appropriate that the family practitioner committees and the system that has been established for a long time should be the way it is done.

While allowing retail pharmacists to sit on the panel of the FPC sub-committees to decide and discuss appeals, we felt, and it will be agreed if the House accepts these amendments, that they should not be able to vote. The extension of that exclusion to dispensing doctors will redress the balance. In our view, that is natural justice. The people who serve and vote on the committees must be seen to be independent. There must be seen to be no conflict of interest and, as was pointed out in the other place, we must ensure that there is no danger of subsequent court action as a result of any failure to disclose. That is what has happened. Whether another pharmacist on the panel who is not in retailing but is qualified and working in another area, such as in hospitals, might be able to vote is still a matter for discussion and will be dealt with in the regulations.

We share with the hon. Members for Wrexham (Dr. Marek) and for Ipswich (Mr. Weetch) a passionate dislike of red tape and we are determined that in drafting regulations we will take note of what has been said in this House and the other place. We share the determination that the system should be simple, speedy and acceptable to all concerned with the interests of the patients being absolutely paramount.

The hon. Member for Ipswich asked about the appeals system. The matter was also raised by the hon. Member for Roxburgh and Berwickshire. The proposed new arrangements for allocating pharmacy contracts include an appeals system that is in line with the FPCs' functions, which can operate quickly and will include important safeguards against bias, as we have already discussed. But one of the changes that was agreed by the former Minister for Health after debates was that membership of the appeals panel should be drawn from a national list instead of a regional list, and that the national list should be approved by the Secretary of State for Social Services. The changes aim to balance the need for consistency and experience, which is what the hon. Member for Roxburgh and Berwickshire was aiming at, the need for independence in decision making and the need to deal promptly with appeals, bearing in mind local circumstances. We believe that the appeals system satisfies the concerns expressed by Opposition Members.

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The hon. Member for Wrexham wanted to know about regulations governing procedures of FPCs in other professional work. He may not be aware of the regulations laid down in statutory instrument No. 213, governing the membership and procedure of family practitioner committees. It was laid before Parliament on 28 February 1985. I am sure that the hon. Gentleman knows this already, but let me remind him that the statutory instrument says that, subject to the provisions of the regulation, if a member has any pecuniary interest, direct or indirect, in any matter and is present at a meeting of the Committee at which that matter is under consideration—

  1. (a) he shall at the meeting and as soon as practicable after its commencement disclose the fact that he has such an interest; and
  2. (b) he shall not take part in the consideration or discussion of that matter or vote on any question with respect to it."

Dr. Marek

Of course, I am aware of that, but the amendment seeks to introduce a slightly wider implication, that if one is in the same profession, one should not be making a decision on an application. As I am sure the hon. Lady knows, doctors and all sorts of people on FPCs may not have a pecuniary interest, but they are in the same area, and they are making decisions.

Mrs. Currie

What we are trying to do is tie down the measure as hard as we can for the pharmacy profession, in the light of current interests and discussion on the placement of pharmacists. But the regulations are there. We merely want to ensure that, in the case about which we are concerned, with the amendments before us, we tie them down as hard as possible. We expect those regulations to be adhered to as they are set down.

The hon. Member for Ipswich wanted to know about pharmacists opening up in his area recently to beat the regulations and the law that we are trying to create, and asked about compensation. He was kind enough to call me the horse's mouth. If he wants a considered reply from the horse's mouth, it would help the horse enormously if he were kind enough to provide some details of what has happened in his constituency in the past few days. I should be pleased to see them. I can say in general terms that the arrangements for pharmacists coming in before the new arrangements start were agreed as long ago as May 1985. There has been some increase in the numbers of new pharmacies — indeed, the increase has been steady in recent years, which I think many hon. Members will welcome, following a decline during the 1970s. I am advised that there has been no evidence of large increases to beat the new arrangements. I should be glad to hear if that is not so, or if there is any evidence to the contrary.

With regard to compensation for leaving the contract, I refer the hon. Member for Ipswich to the question tabled by my hon. Friend the Member for Northampton, South (Mr. Morris), which was answered on 25 July this year. My hon. Friend asked what safeguards the Secretary of State intends to introduce into the new pharmacy contract to prevent a pharmacist who has received compensation from a closure from opening a new pharmacy. The answer was: During the debate in Committee on the NHS (Amdt) Bill I agreed to look again at the system of payments to pharmacists who wished to relinquish their NHS contract, or to relocate their business to areas where they could better serve patient needs, to ensure that the system will work as intended and that there are adequate safeguards against abuse. The proposed system already has a number of important safeguards. It will operate for two years only and small pharmacies only will be eligible; there is no opportunity for someone to open a pharmacy and then quickly close it to obtain a payment". Those are exactly the circumstances hypothesised by the hon. Member for Ipswich. The answer continues: Under the new arrangements a new National Health Service contract will be granted only where it is necessary or desirable for patient services, so new pharmacies will be opened only where patient needs dictate … Both the Pharmaceutical Society of Great Britain and the Pharmaceutical Services Negotiating Committee have been consulted and both have given the assurance that they will be playing an active role to make sure that the system operates as intended."—[Official Report, 25 July 1986; Vol. 102, c. 735–6.] I hope that that deals adequately with the point made by the hon. Member for Ipswich.

Mr. Weetch

indicated assent.

Mrs. Currie

I see the hon. Gentleman nodding assent. Overall, a great deal of work has gone into the amendments and the clause.

Mr. Kirkwood

I wonder whether the hon. Lady can help me tonight. Perhaps a little more time is necessary. Under the new machinery of the amendment, do the Government have any direct method of finding out quickly that the system is not working if it happens locally in different parts of the country?

Mrs. Currie

I have no doubt that we shall be watching closely what happens. As I mentioned a few moments ago, the two main societies involved, to which retail pharmacists belong, the PSGB and the PSNC, will be co-operating with us actively to ensure that the regulations are followed. In other words, if a problem comes up quickly, we expect to be notified quickly so that we can ensure that the regulations are followed. But I am sure that the amount of work and negotiation that have gone into the clause and the amendments, and the effort that has been made to ensure that the system is fair to the pharmacist, the taxpayer and, most of all, the patient, will produce a better system than the one we have now.

Question put and agreed to.

Lords amendment No. 3 agreed to.

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