HC Deb 14 November 2002 vol 394 cc166-250 1.33 pm
The Secretary of State for Health (Mr. Alan Milburn)

The Queen's Speech has at its heart a commitment to public services. Government Members stand for public services because we stand for a fairer society. For us, public services are social justice made real. On the national health service, we stand where we have always stood—for an NHS that is paid for by all and available to all, and provides patients with care that is free, based on the scale of their need, not the size of their wallet.

The NHS plan that we published two years ago sets out how we can build on those values to implement our programme of investment and reform for the health service. The Bills in the Queen's Speech drive forward the reforms, just as the Budget drove forward the investment. Just six years ago, spending on the NHS was falling in real terms. By 2008, it will have doubled in real terms. There is a similar story for social services. Whereas just six years ago, real terms spending there was rising by just 0.1 per cent. a year, it is now set to rise by 6 per cent. a year. Britain today has the fastest growing health care system of any major country in Europe.

The Budget laid to rest the decades-old fallacy in this country that somehow or other we could have world-class health care on the cheap. We cannot. A cheap health service delivers what the Conservatives delivered: cuts of 60,000 hospital beds, cuts of 23 per cent. in nurse training places and of 25 per cent. in general practitioners in training, and 400,000 more people waiting for hospital treatment at the end of their term in office than at the beginning. If we want world-class health care, it has got to be paid for. We on the Government Benches believe that it is right to ask people to pay a little more in tax to get a lot more into the national health service.

The Opposition imposed a three-line Whip against extra health spending—not a soft three-line Whip, but a hard one. Amazingly enough, there was not a single Tory rebel in sight.

Mr. Peter Lilley (Hitchin and Harpenden)

No one denies that the Government have accelerated expenditure, but can the Secretary of State confirm that the number of in-patient operations has grown more slowly since 1997?

Mr. Milburn

I think that I am right in saying—if not, I shall correct myself in writing to the right hon. Gentleman—that the number of hospital operations has grown by about 500,000 since 1997, the number of people seen in out-patients has grown by well over 1 million, and the number seen in accident and emergency has grown by about 500,000. However, the right hon. Gentleman must not become fixated by what happens in hospitals alone. I do not know about his constituency, but in mine, for example, procedures that used to take place in hospital are happening in the community, in out-patient departments, in GPs' surgeries, or in health centres. It is of course important that the appropriate care be given in the right place, but if he believes—I am sure that he is not falling for this fallacy—that national health service treatment is purely about hospital treatment, he has got it sadly wrong.

Conservatives often call for extra investment in their local health services, and I am prey to interventions from right hon. and hon. Members on such matters. However, if they are going to argue—as they do in interventions, Adjournment debates and questions—for more money for their local health services, they have to explain why they voted against more money for the whole health service. Conservative Members are not stupid—that is the preserve of the Liberal Democrats—and they know that resources deliver results. Why have we got 40,000 more nurses working in the national health service than in 1997? For the simple reason that we put the money in. Why are 10,000 more doctors working in the NHS? Because we put the money in. Why is the biggest hospital building programme in the history of the NHS happening, and why are there more, rather than fewer, beds in hospitals for the first time in 30 years? Because we put the money in.

Gregory Barker (Bexhill and Battle)

No one doubts that, in keeping with the Secretary of State's comments, the taxpayer is paying a great deal more for the NHS than when Labour came to power in 1997. However, can he tell us why, after five years, 1 million people are still on NHS waiting lists?

Mr. Milburn

If I were the hon. Gentleman, I would exercise caution in two respects. First, when the Conservatives were in office for 18 years, they managed to increase waiting lists by 400,000. We have been in office for five years, and we have cut hospital waiting lists by 100,000. Secondly, it is no good his arguing that what is needed is more investment in the national health service if Conservatives are not prepared to put investment into it. We will not get waiting lists or waiting times down unless we grow the capacity of the NHS.

The hon. Gentleman must have read—I have read it, for heaven's sake—the Conservative policy document that was launched last month, entitled "Leadership with a Purpose". If ever a title expressed the triumph of hope over experience, that was it. The document states in bald terms: Conservatives do not support the tax and spending increases the Government has announced. The hon. Gentleman and his right hon. and hon. Friends should be extremely cautious about arguing for more money for the NHS, unless they are prepared to vote for more money for the NHS.

It is true that waiting times for hospital operations are still too long, but it is worth recalling that the number of patients waiting more than 12 months for NHS treatment is down by 40 per cent., compared with March 1997. A year ago, the maximum wait for a heart operation was 18 months; today it is 12 months, and by next April it will be nine months. That is still too long, but the trend is in the right direction and, most importantly, during the past few years death rates for cancer have fallen by 6 per cent. and for heart disease by 14 per cent.

The Conservatives often say that they are opposed to our targets to reduce waiting times for treatment, yet they also know that waiting is the public's No. 1 concern about the NHS. By and large, once people get into the system they are satisfied with the quality of their treatment. Why? Because the doctors, nurses and other staff provide a high quality of service. It is the wait for that service that is the problem for far too many people. Does anyone seriously believe that waiting times would be falling so consistently had it not been for those targets?

We know what the Conservative strategy is. The hon. Member for Woodspring (Dr. Fox) expressed it eloquently when he said that the Conservatives have to persuade the public first that the NHS is not working, secondly, that it never worked, and thirdly, that it never will work. However, for millions of our fellow citizens the NHS is working. It is delivering high quality care for millions of people every week.

We should be candid about two things, however. First, although there is progress, there is a long way to go. Turning around decades of neglect is not a battle for the short term; it is one for the long term. We have a 10-year NHS plan for one simple reason: it will take time and effort, as well as sustained resources, to deliver the world-class health care that we all want.

Secondly, investment alone will not deliver. The NHS needs reform as well as resources. Why? Because the world has changed and the NHS must keep pace.

Mr. Edward Garnier (Harborough)

Will the Secretary of State remind me which year of the 10-year plan we are in?

Mr. Milburn

I think that I answered questions from the hon. and learned Gentleman when I introduced the plan in the House. We published it in July 2000, so I think that he can work out where we are.

Mr. Frank Dobson (Holborn and St. Pancras)

Not without a fee.

Mr. Milburn

I am grateful to my right hon. Friend—at least, I am at this stage.

Sometimes, people in this country pretend that we are the only ones having to confront change—that our health care system is the only one to face changes in demography and an ageing population, the enormous possibilities but new pressures brought by new drugs and treatments, and the rise of a more consumerist set of public expectations. However, those waves of change are washing over every health care system in the world. That is why health care reform is at the top of the political agenda in almost every developed country.

The NHS is in a better position than most to confront those pressures. In a world where health care can do more but costs more than ever before, it is an enormous strength to have an NHS providing services that are free, and based on need, not on ability to pay.

The NHS provides what some call the security—what Nye Bevan called the "serenity"—of knowing that we all pay in when we are able to do so, so that we can all take out when we need to. The health of each of us depends on the contribution of all of us. That is the great strength of the NHS. Those values and principles are as strong for Britain today as when the national health service was first formed.

We must be honest, however; there are weaknesses, too, in the organisation of the NHS. In 50 years, health inequalities—the gap between rich and poor in terms of health outcomes—have widened rather than narrowed. Figures released by the Office for National Statistics just last week show that a boy born today in Manchester will live on average ten years less than a boy born in Dorset.

Uniformity in provision has not produced equality of outcome, nor has it produced equality of opportunity. Too often, the poorest services are in the poorest communities. If we want an NHS that is more tailored to the needs of local communities and more attuned to different local problems of poverty and deprivation, we have to move away from monolithic services and centralised control.

Different communities have different needs.

Mr. Paul Goodman (Wycombe)

Will the right hon. Gentleman give way?

Mr. Milburn

In a moment.

Overall, levels of infant mortality in our society are falling—thankfully—but in some of the poorest sections of society they are rising. In parts of London, 100 languages are spoken, which puts pressure on the NHS. In a city such as Bradford, the incidence of heart disease among Asian men and women makes the work of the NHS there different from its work in other parts of Britain. Fairness rightly demands that standards in heart or cancer services should be broadly the same in one part of the country as in another. That is why we have put in place a national framework of standards.

Mr. John Bercow (Buckingham)

Given that one of the weaknesses of a national pay bargaining system is that it inevitably fails to take into account higher costs of living in parts of the country where there are staff shortages that we need to tackle, will foundation hospitals have absolute discretion and control over pay? If not, how and to what extent will that freedom be circumscribed?

Mr. Milburn

I will deal with foundation hospitals in general in a moment, but pay is a very important question, and not only for those hospitals. Today, NHS trusts have discretion and have had it for many years. Indeed, many exercise it. When trusts are recruiting an anaesthetist or a nurse, there will often be an element of local discretion in their pay.

As the hon. Gentleman is aware, we are negotiating with the trade unions that represent the 900,000 health workers—nurses, porters, cooks, cleaners, scientists and technicians and so forth. This is the fourth year of our negotiations for what we call the agenda for change pay system. Those negotiations are going well. I hope that we can reach fruition before too long. At their heart is the simple idea that in a national system in which people rightly demand equity we need a broad national framework for pay so that people have some certainty about the sort of pay that they are likely to receive. However, as the hon. Gentleman and all right hon. and hon. Members know, different parts of the country have different housing and labour market pressures, so there needs to be some local flexibility in that national framework. That is what we need—a national framework and some local discretion.

I expect the first generation of NHS foundation hospitals as well as subsequent generations to want to take on board the agenda for change agreement, provided that we can reach it. They will therefore be able to exercise discretion and flexibility, but there will be a broad national framework too. We will see where we get to with the negotiations. I am not pre-judging the outcome and there is clearly some way to go, but we are making progress.

Dr. Brian Iddon (Bolton, South-East)

I am pleased about my right hon. Friend's statement on dealing with constituencies with real health need. He will know that I have been campaigning for five years on behalf of my constituency, which started second from bottom in terms of being furthest from target. Although we have had a lot more money—I praise the Government for delivering that—we are still in that position relative to all other health authorities. Will he assure my constituents that we will target the real need that exists in certain constituencies—for example, in Manchester, which he just mentioned?

Mr. Milburn

I cannot assure my hon. Friend about that particular case. As he knows, the formula is still under review. However, when we make allocations to primary care trusts later this year, those will be based on a new formula that will give greater recognition to the problems of health need and health inequality of which he is all too painfully aware—and so am I. We have to get the balance right between recognising that there are different labour markets and different pressures, which the hon. Member for Buckingham (Mr. Bercow) mentioned, and acknowledging that there are different health needs and big health inequalities. The formula will need to address that balance.

Mr. Dobson

Will my right hon. Friend confirm that after the 1997 general election we found that places such as Bolton and Tower Hamlets were far behind the notional sums to which they were entitled under the national formula, whereas Surrey, for example, was far in advance of its notional sum?

Mr. Milburn

My right hon. Friend's memory is serving him extremely well. That is precisely the case and, as he knows, in the past couple of years we have adjusted the formula to recognise, first, that the current formula does not properly respect the health needs of different local communities—parts of Greater Manchester and the surrounding areas, for example, have benefited from that change—and secondly, that we also face labour market pressures in different parts of the country. Incidentally, those pressures are not confined to London. We made those adjustments pending the full-scale review of the formula.

Dr. Jenny Tonge (Richmond Park)

Is the Secretary of State not being rather stupid himself in assuming that the inequalities of health in the population are due solely to the provision of health care? Surely they are as much to do with poor housing, environment and education, which are also the responsibility of the Government.

Mr. Milburn

I am almost deeply wounded by the hon. Lady's accusation. [Interruption.] The party of the vulnerable knows how vulnerable I feel.

The hon. Lady is clearly right to say that there are background causes for health poverty. Poverty is one, poor housing another and a bad environment a third.

Mr. Eric Forth (Bromley and Chislehurst)

And lifestyle.

Mr. Milburn

The right hon. Gentleman is right; lifestyle is another issue. However, the hon. Lady is wrong in one fundamental respect. My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who intervened earlier, could also have said that when we considered these issues, there was inequality not only in outcomes but in access to service. People in the better-off parts of Leeds, for example, have three times the access to heart surgery that those in the poorest parts have, despite the fact that the incidence of heart disease is higher in the poorest parts.

That is because there is, unfortunately, an iron law about the provision of public services. People who are more articulate and better off—the middle class—tend to do better out of the public services than working-class people. We must put that right. I do not believe that national standards or uniformity of provision will, on their own, necessarily address the very different problems in various communities. National standards are beginning to deliver results to reduce unfairness in areas such as cancer, heart disease, care of the elderly and mental health. In the next few weeks, we will publish similar plans to improve diabetes services.

While I am on the subject of mental health, let me say that we will press ahead with reform of the mental health laws. The laws today are rooted in the 1950s. We need to strike a better balance between safeguarding the rights of individual patients and protecting both patients and the public. The draft Bill that we issued for consultation, after we had consulted following a Green Paper and a White Paper, has produced around 2,000 responses. When we have finished considering them, we will bring forward the Bill during this Session.

Dr. Julian Lewis (New Forest, East)

Will the Secretary of State confirm that the Bill will not concentrate solely on the understandably controversial matter of people with untreatable personality disorders, but will also pay attention to an issue that has worried many of us—that people who have to have in-patient care for serious depression are put cheek by jowl with people who are seriously psychotic? In other words, there should be separate therapeutic environments for people with very different types of mental disorder.

Mr. Milburn

The hon. Gentleman makes an extremely good point. Inevitably, all the headlines will be about one aspect of the Bill; that is understandable. However, the Bill in its entirety is not about that issue. It is about how, from a system fundamentally based on 1950s legislation, to get a better balance between safeguarding individual patients' rights, and protecting the community as well as individual patients. It is absurd that, although most treatment takes place in the community rather than in hospital, because the current legislation does not allow compulsory treatment for the minority of patients who need it in the community, doctors must wait until they become so seriously ill that they are a threat to themselves or to others before they are admitted to hospital for compulsory treatment. That is palpable nonsense, and it is not good for the patient or for the community. That is what we must change. We will consider the responses extremely carefully. Make no mistake, reform must happen in mental health services, just as it must across the whole national health service.

National standards make a difference. Through the Commission for Health Improvement, the very real variations in performance that exist in the NHS are being tackled. Indeed, as the Queen's Speech made clear, we will now strengthen the system of national inspection so that there is more information, not just about health services in the public sector, but about health services in the private sector too. Wherever NHS patients are treated they have not just the right to a common ethos and a common system of inspection, but a right to know that standards are high. Our objective is to have good services not just in some places, but in all.

Laying down national standards does not by itself raise standards. That can happen only when staff feel involved and communities are more engaged. The top-down, centralised structure in the NHS has too often inhibited local innovation. Too often when I talk to front-line staff, they feel disempowered. Local communities feel disengaged. Individual patients have little say and precious little choice.

In today's consumer age that structure is no longer sustainable. Therefore, our reforms are designed to shift the balance of power in the NHS so that standards are national, but control is local.

Mr. Andrew Lansley (South Cambridgeshire)


Dr. Evan Harris (Oxford, West and Abingdon)


Mr. Milburn

I give way to the hon. Member for South Cambridgeshire (Mr. Lansley).

Mr. Lansley

While the Secretary of State is talking about national standards and access, will he tell the House to what extent the intention that there should be specialist stroke units in each district general hospital, which was the April 2002 target, has been met? In addition, will he reiterate the intention that all stroke patients should be treated in specialist stroke units by April 2004?

Mr. Milburn

The hon. Gentleman is referring to the national service framework for elderly care services. He is right that the intention is to have specialist stroke services by April 2004 in all parts of the country. We have made progress towards that, and I know that it is happening. We have two years to go, and we are making good progress. We have to learn from the stroke services that are being set up. I visited a specialist stroke service in the Freeman hospital in Newcastle, and I know what a difference it makes, not just to the care of the patients but to the morale of staff, who feel that they can use their specialist skills for the purpose for which they were designed—is to make sure that older people, in particular, get the quality of care that they need. We have made a start and I am confident that we will achieve our ambitions.

Dr. Harris

The Secretary of State talked about the importance of reform, and in these exchanges he has given the impression that only his party supports reform, and the Liberal Democrat and Conservative parties do not. I am happy to accept that the onus is on Opposition parties to recognise, as I do, that radical reform of the health service is necessary. Having started with insults, if he remains to hear my contribution, which he does not usually do— [Interruption] —he will have an answer. The Secretary of State cannot start by insulting parties and then slope off before they are given a chance to respond. I accept his challenge that before criticising the reforms proposed by the Government, Opposition parties have to have their own proposals. That would be a test of effective opposition, and I hope that he will remain to hear what is offered on the menus today.

Mr. Milburn

As for my attendance at the hon. Gentleman's speeches, there are questions of decorum and good taste. I have heard him speak in this place and say different things almost in the same sentence to the same audience. I will stay and listen to him today. How is that? I must have nothing better to do.

Mr. Kevin Hughes (Doncaster, North)

Now that my right hon. Friend is coming to the part of his speech about reform, will he take time to explain to the House how the introduction of foundation hospitals will not lead to a two-tier service? In addition, if foundation hospitals are going to improve services, will he say why they are to be introduced only in those areas where existing hospitals already give their communities good service?

Mr. Milburn

I will answer my hon. Friend's question, but I hope that he will let me get to the relevant section of my speech. If he wants to intervene then, I shall be happy to allow him to do so.

As I have said, we want to have national standards and local control. Next year, local PCTs will control three quarters of the NHS budget. They will have three-year budgets so that they can plan and deliver a better balance between prevention and treatment, and between services in the community and services in hospital. They will also be free to commission services from the most appropriate provider, regardless of whether that provider is in the public, private or voluntary sector. That will permit a greater diversity of provision and greater choice for patients.

In our country, of course, there has always been choice in health care, but it has been the exclusive preserve of those who can afford to pay. Equity demands that that choice is available to all, not just to some. People should not have to opt out of the NHS to get high quality treatment. They should be able to get choice on the NHS.

We have made a start, with heart patients now choosing where they should be treated. Our plan is to extend choice to all NHS patients. The more that hospitals do and the more patients they treat, the more resources they will get. Those local services that are doing less well will get more help, more support—including financial support—and, where necessary, more intervention. They will not be left to sink or swim. Conversely, those doing better will get more freedom.

Mr. Hilton Dawson (Lancaster and Wyre)

Will my right hon. Friend assure me that everything that he has said about improving the quality of health services can be read across to the social care services? Will the important measures that he is introducing to extend devolution and local decision making refer to both health and social care, and to crucial partnerships at local level?

Mr. Milburn

My hon. Friend makes an extremely important point, and perhaps I have been remiss in not making it clear that a common set of principles should apply to all our public services. We want to raise standards everywhere, not just in some places. That is why we instituted national standards and systems of inspection, and why we made available the help and support that we now give. When the Government came to office, we had no way of generalising good practice. There was no mechanism by which we could tell the best clinicians and managers to take the lessons that they had learned from their working environments to other organisations that needed help, so that those organisations could learn the same lessons. However, that is what we do now.

My hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) will also be aware that the response should always be the same where there is consistent management failure, be it in the private or the public sector. In such cases, we should change the management and bring new people in. The purpose of the new franchising proposals is to bring in new management. In those places where we have adopted it, that approach is beginning to produce results.

The same disciplines must apply in the social services as much as in the health service. That means that help, support and, where necessary, intervention are available in those areas that are not doing very well. Conversely, there are also incentives to improve, which brings me to the issue of NHS foundation hospitals.

NHS foundation hospitals will be part of the national health service. They will treat NHS patients according to NHS principles and to NHS standards, but they will be controlled and run locally, not nationally. Indeed, they will draw on traditions that many Labour Members will recognise— the traditions of the co-operative movement and of friendly societies and mutual organisations in this country and abroad. NHS foundation hospitals will be owned and controlled by local communities, replacing central state ownership with a modern form of local public ownership.

How will that work? People living in communities served by a hospital will be its members and, therefore, its owners. Staff will also be members. Local people will elect representatives to serve as hospital governors. Those directly elected hospital governors will make up an absolute majority on the trust stakeholder council. The council in turn will hold the management board that is responsible for the day-to-day work of the hospital to account, elect the chair and non-executive members of the board and approve the appointment of the chief executive.

For the first time since 1948, the public will be genuinely at the heart of our key public service—the national health service. This reform will help bridge the democratic deficit that has for too long kept the public out when they should have been brought in. I will shortly publish a prospectus setting out more details on NHS foundation hospitals, but I can tell the House one more thing today.

Some people have concerns that foundation hospitals are about privatisation. That is simply not true. NHS foundation hospitals will be there to serve NHS patients, not to make profits or to distribute dividends. To prevent any future Government pursuing a privatisation agenda in the NHS, there will be a legal lock on the assets of NHS foundation trusts to protect them from the demutualisation that we have seen in the building society sector in recent years or any future threat of privatisation. Our reforms are about giving life to the Labour ideal of common ownership, not resurrecting the corpse of Tory privatisation. Our aim is to bind NHS hospitals ever closer to the communities that they serve. In that way, NHS foundation hospitals will be part of the NHS and will always remain part of the NHS.

Mr. Gareth Thomas (Harrow, West)

As someone rooted in the co-operative traditions to which my right hon. Friend refers, I warmly welcome the proposals for foundation hospitals, not least because they offer the prospect of replacing local quangos, which are too often not accountable to local people, with democratically elected boards. Will my right hon. Friend be sympathetic to those local communities that are unhappy with the way in which their local hospital is run when they come to him asking for their hospital to be made a foundation hospital?

Mr. Milburn

I sympathise with my hon. Friend's point. I am aware of the views he has expressed and the measures that he has tried to take forward in the House to bring co-operation and mutualisation out of the last century and into this one. We have an opportunity to do that now through the NHS foundation hospital model. I want to deal with my hon. Friend's question and that asked by my hon. Friend the Member for Doncaster, North (Mr. Hughes).

We will start with the best performers; the first generation of foundation hospitals will be drawn from existing three-star trusts. Forty per cent. of the three-star trusts are in 25 per cent. of the most deprived areas in the country—places such as Bradford, Hackney, Liverpool or Sunderland. I do not know whether those hospitals will want to apply for foundation trust status, but I do know that, as more hospitals improve, more will become foundation trusts. As my right hon. Friend the Prime Minister has said, there will be no arbitrary cap on the number of foundation hospitals, so the charge that the policy is about creating a two-tier health service is simply not correct. This is not elitism; it is localism. It is not privatisation; it is a genuine form of public ownership. It is aimed at getting the best health care for the public by giving more control to the public.

Glenda Jackson (Hampstead and Highgate)

I am particularly concerned about localism. My right hon. Friend has previously given examples of how, for example, working class areas do less well than middle class areas in obtaining access to national health services. How will everyone's vote be equal? In my constituency, there are huge disparities of wealth and for many people English is not their first language. How can we be assured that foundation hospitals will genuinely reflect local issues? That is central if we are to make a success of them.

Mr. Milburn

The ballot box will be the great equaliser. In the end, whether people obtain access to services is at least in part dependent on their background and, sadly, their class, but their ability to exercise the vote is dependent on their willingness to exercise it. Everyone will have an equal vote and an equal say, and they will be able to determine who serves as a hospital governor. For the first time we can ensure—within the framework of the standards we have set, and with a common NHS ethos and a common system of inspection—that hospitals genuinely serve the needs of the local community.

I know that many Members will have their doubts, but I fundamentally believe that we have an opportunity to construct a new model that is consistent with the values and principles of the national health service, while giving more control to those who need it: the staff on the front line, and the communities that they serve.

Mr. Peter Mandelson (Hartlepool)

My right hon. Friend does indeed seem to be describing an entirely new and imaginative model for the entire public service. Would he characterise it as the end of old-style, centralised, Morrisonian nationalisation as we know it?

Mr. Milburn

I do not really want to intrude on family matters, but I think that it does mark a break from the past, in terms of structure but not of values. Values endure, and I believe that the values of the national health service are fundamentally right—although views differ in different parts of the House.

It is clear from what happens in other European countries that it is possible to have both diversity of provision and the right values for care. We can have a range of service providers, but the service that they give to public health care can be based on a common set of values. I think that that is right, not because diversity should be an end in itself but because alongside the national standards for the delivery of equity must be local services that meet local need. If we are honest, we will acknowledge that over the last few decades that has not been possible, and that we must change the structure and the organisation.

Mr. Goodman

If a foundation trust falls in the Government's rankings from three-star to two-star status, will it remain a foundation trust?

Mr. Milburn

As I have said, in due course we will present a prospectus that will deal with issues such as that. I can say, however, that if foundation hospitals are part of the NHS family and are delivering services to NHS patients, they must abide by the same disciplines as other NHS hospitals. That means that they will receive ratings, and will be subject to the same inspections as other parts of the NHS.[Interruption.] If the right hon. Member for Hitchin and Harpenden (Mr. Lilley) would stop chuntering and start listening, it might be helpful to all of us. If he wants to intervene, I will happily give way.

Mr. David Tredinnick (Bosworth)


Mr. Milburn

I will have my dose of complementary therapy in a moment. First, let me deal with the question from the hon. Member for Wycombe (Mr. Goodman).

The expectation must be that as we are going to introduce the new arrangements in phases, and as the phases will begin with the best performers, foundation trusts will maintain—with greater freedom—a high level of performance.

Mr. Bob Blizzard (Waveney)

Where foundation hospitals are operating in the way described by my right hon. Friend, fully accountable and responsive to local communities through the ballot box, will money from the Department of Health go to them directly rather than through local primary care trusts? Would that not make foundation hospitals more accountable to the community than PCTs?

Mr. Milburn

No. I think it right to have one form of commissioning. As I said earlier to the right hon. Member for Hitchin and Harpenden, we must ensure that all the growing resources for the NHS do not end up in the hospital sector. Hospitals will not be able to do what they need to do—reduce waiting times for treatment, improve the quality of care and so on—unless there are good services in the community, and in primary care as well. That is why we need strong local commissioning of services, which is the purpose of PCTs. They must be able to decide where resources should go in order to benefit the local community. Some will go to the hospital sector and some to the community sector; most, I expect, will go to the public sector, although some may go to the private sector. But alongside the providers must be commissioners of services.

Mr. Tom Levitt (High Peak)

I am attracted by the model that my right hon. Friend has described, but what exactly does he mean by "accountable to local people"? There is no hospital trust in my constituency, and the four major hospitals that serve it are outside not just the constituency but the region. How might my local people be involved, at some time in the future, in this form of local democracy?

Mr. Milburn

I hope that when my hon. Friend sees the prospectus, he will agree that our proposals will achieve that.

Different trusts serve different populations, and not all trusts are the same. The Royal Marsden is a specialist cancer hospital. In a sense it does not really have a local community; its community is the community of patients whom it serves. They come from all parts of the country, because it is a tertiary centre. In my part of the country there is a very local trust that serves a distinct set of local communities. I do not know about my hon. Friend's area.

We must establish some principles for governance, but the governance structures must be flexible enough to take account of different needs and different local communities. That is why we will not lay down hard and fast rules, apart from saying one simple thing: if direct elections are to take place and if the mandate is to come from the local community, there must be an absolute majority of people from the local community serving on the stakeholder council, so that the public drive the changes that are necessary.

Rob Marris (Wolverhampton, South-West)

When British Rail went through its botched privatisation we experienced fragmentation and then, following redundancies brought about by the privatised railway companies, a shortage of engine drivers in particular. Wages went through the roof. If we are to have local autonomy with regard to foundation hospitals, how will the Secretary of State avoid fragmentation and a consequent wage explosion when there is a shortage of health professionals?

Mr. Milburn

We will avoid fragmentation by means of the national framework of standards that we have established over recent years. Much of that framework, incidentally, was opposed by the Opposition. When my right hon. Friend the Member for Holborn and St. Pancras introduced legislation to create the National Institute for Clinical Excellence and the Commission for Health Improvement, and when we started to establish national service frameworks, both moves were opposed, because the Opposition genuinely want a free market in health care. We do not want that. We want national standards, and equity in the system.

My hon. Friend asked about wages in a constrained labour market. That applies to many, although not all, professions in the NHS, but even today there is an element of local pay bargaining. As I tried to convey earlier, we must have—and can have—a national framework, while respecting the fact that different local labour markets face different pressures. For instance, there is a problem at the John Radcliffe hospital, in the constituency of my right hon. Friend the Member for Oxford, East (Mr. Smith), the Secretary of State for Work and Pensions. That is largely because of local housing costs. It is different in my constituency.

Unless we can enable employers to act, we will never be able to tackle the different recruitment and retention problems.

Mr. Jim Cunningham (Coventry, South)

Is my right hon. Friend saying that the new structures will replace the trusts?

Mr. Milburn

Yes, in a word. As we said in the NHS plan, the more performance improves, resources bite and reform takes hold, the more autonomy will be earned throughout the health service. This is a big change, but I believe it is the right change.

That brings me to the final measure in the Queen's Speech, the delayed discharges Bill. I believe that we owe a duty to today's generation of older people, because it was they who built and sustained public health and social services in our country. They deserve dignity and respect in old age, but being trapped in hospital when they want to be cared for at home denies them both. Delayed discharge from hospital is a serious problem. Since we put in an extra £300 million last year to deal with it, rates have fallen by more than 20 per cent., but even today, 5,000 older people are needlessly in hospital when they are ready to leave.

The Community Care (Delayed Discharges etc.) Bill, which we have introduced today, brings fundamental reforms to deal with that problem once and for all. Under the current system, for as long as the elderly person remains in hospital, for good reasons or bad, they remain there at the cost of the national health service. Under the new system, when the patient is ready and able to leave hospital, the cost will pass to social services. Where social services fulfil their responsibilities, we will look to give them extra rewards. Where they do not do so, they will have to pay the hospital for the costs that it incurs in providing care for the patients.

The interests of older people are not served by a blurring of responsibility. The costs of care should fall where they belong. The Bill will help to ensure that the money that we have made available to social services is spent on them, so that capacity can be built up and not cut.

Mr. Stephen Pound (Ealing, North)

I am very grateful to my right hon. Friend for giving way. A decent, well—performing social services authority such as the London borough of Ealing will find itself being charged £2.2 million a year, on its anticipated figures, through the £120-a-night charge, because of forces beyond its control. I am sure that he has considered the fact that, in many cases, the beds that are needed to move people away from hospitals providing acute care are simply no longer available in the community.

Mr. Milburn

I understand the capacity problem, but we will again have a problem if we think that the only way of caring for older people is placing them in residential care homes. Of course, the care homes sector is extremely important, but it is worth listening to what older people themselves say about where they would like to be cared for. Overwhelmingly, they would prefer to be cared for not in a care home, but in their own home.

I understand the difficulties in different parts of the country. That is precisely why we provided in the Budget for a doubling of social services investment from this year to the next. That is not a 5 or 10 per cent. rise, but a doubling in the resources available to social services. However, social services must fulfil their responsibility. If my hon. Friend the Member for Ealing, North (Mr. Pound) stops to think about it, he will recognise the current problem. The hon. Member for Woodspring may stand up in a minute and say that what is happening is all about fining social services, but I disagree with that language. If he wants to use it, I say to him that social services are effectively fining the health service, because the costs are incurred in hospital, which cannot be right. Partnership works only when the health service and social services each accept their responsibilities, so we need an incentive for them to do so. That is what the Bill provides.

The reform programme set out in the Queen's Speech draws on the traditions of social and community ownership that I believe inspired the founders of the national health service. It sticks firmly to the principles on which the NHS was founded, but places a new premium on local accountability for local services. Reform cannot be achieved by holding on to the structures of the last century; it has to be shaped by the expectations of this century. Reform means investing not only extra resources in front-line services, but power, trust, ownership and control.

We on the Labour Benches have had the courage to raise the resources; we must now have the courage to make the reforms.

2.23 pm
Dr. Liam Fox (Woodspring)

W. H. Auden once said that propaganda is a monologue that seeks not a response but an echo. Sadly, for too long in the Government's approach to health, propaganda rather than substance has been the main currency. That is a very useful ploy when it is advanced by someone as plausible as the Secretary of State, but rather than getting a rational analysis of the current state of health care in the United Kingdom, we tend to be bombarded with statistics that too often seem to patients and medical professionals to belong to some sort of parallel universe rather than to Britain's NHS in 2002, the Labour party's sixth year in office.

As was obvious in the Secretary of State's remarks about foundation hospitals, the Government seem increasingly to make up policy as they go along in a series of knee-jerk reactions that occur when they are worried about their lack of delivery. Before we drug ourselves on yet more Government promises, let us take a rational view. We can see the clarity of thought and the intellectual cutting edge that Labour brought to health policy when it was elected in 1997 by looking at its manifesto. Indeed, it is very clear: New Labour is a party of ideas and ideals but not of outdated ideology. What counts is what works. The objectives are radical. The means will be modern". That is the sort of psychobabble that we have all become used to in recent times. The manifesto says that Labour will not return to the top-down management of the 1970s". [Interruption.] There is no point in Front Benchers shouting; they can make their point later. The manifesto also says: The key is to root out unnecessary administrative cost, and to spend money on the right things". It goes on to say: under the Tories, the administrative costs of purchasing care have undermined provision and the market system has distorted clinical priorities. Labour will cut costs by removing the bureaucratic processes of the internal market. So has Labour returned to top-down management, cut administrative costs and dealt with distorted clinical priorities? When it came to power, there were 190,000 beds in the NHS; now there are 186,000—a reduction. There were 173,000 administrative staff; now there are 188,000—an increase. We now have more administrators than beds. When Labour came to office, the cost of administering the NHS was £270 million; the projected cost of administration for 2003–04 is £360 million—an increase in cost.

What about distorting clinical priorities? In the wake of the recent story that a senior surgeon at St. George's hospital in London had been told not to accept urgent surgical referrals from outside the London catchment area, the BMA warned that the performance targets had a distorting effect on clinical priorities. It said: This is a stark example of the perverse pressures which waiting list targets can create. Of course we want patients needing routine surgery to be treated promptly, but this must not be at the expense of life saving surgery for patients with complex injuries. If the concept of the NHS is to have any practical meaning, surgeons with highly specialised skills must be able to offer their expertise outside the narrow catchment area of their own hospitals. However, the Government's centrally driven ideals are interfering with delivery locally and, worse, interfering with clinical priorities.

The problem for the Labour party is that, for far too long, it has believed its own propaganda. Essentially, its message in 1997 was, "There is nothing basically wrong with the NHS; if only those wicked Tories would spend more money on it." For five and a half years, they have therefore thrown more money—billions and billions of pounds—into the NHS, but what do we have in return? Despite a 10.8 per cent. funding increase between 1998–99 and 2001, hospital admissions have risen by only 0.9 per cent, as has been pointed out. Finished consultant episodes have risen by 2.3 per cent. The Secretary of State spoke about the maximum waiting time for a coronary bypass, but the average waiting time for a coronary artery bypass graft is now two weeks longer and there are still more than 1 million people on the waiting list. Some 80,000 fewer people are receiving domiciliary care. Emergency readmissions are increasing and have risen by 23,000 in the past two years. The Audit Commission, which is hardly an organ of the Conservative party, stated that in 1996, 73 per cent. of hospital patients in accident and emergency were seen by a doctor within an hour. That figure has now fallen to 53 per cent. Similarly, 90 per cent. of patients were admitted within four hours, but that has now fallen to 76 per cent. Some 60,000 fewer care home places exist than when Labour came to power in 1997. Those are the things which are causing the real difficulties for patients and which the Secretary of State is trying to get away from. Perhaps worst of all, 77,000 operations were cancelled last year—a 54 per cent. increase on 1997–98.

How can it be that such a big funding increase is taking place while things are getting so much worse at the front end? That is the question that the Secretary of State has to ask. If the public could ask one question, it would be: "Why is it that, with all this spending, our hospitals are so dirty?" It is this Government's sixth year in office, but 5,000 patients a year will die of the infections that they contract while they are in hospital. That is the equivalent of three Clapham rail disasters a week, which puts things into perspective.

Mr. Dawson

What does the hon. Gentleman think of the commitment to clinical priority and need of a consultant who told one of my constituents that he could not perform his operation on the NHS for approximately 10 months but that he could fit him in in the next fortnight if he wanted it done privately? What would he say to the consultant heart surgeon who responded to a question from me about waiting lists by stating, "We are dealing with more people, older people and sicker people than ever, with techniques that we were never able to use before."

Dr. Fox

The hon. Gentleman makes some important points. First, there will always be a difference between waiting times in a publicly funded service and those in a private service. That happens in every other country. The Secretary of State said today that the two sectors would continue to exist side by side. However, we should get proper value in the NHS for the consultant time for which we pay. All hon. Members would agree with that.

One problem, especially with cardiology, which the hon. Gentleman mentioned, is that management determines theatre time according to the maximum waiting time targets rather than according to clinical need, because funding depends on it. A reason for consultants' hostility to the Government's proposed contract is their fear that that trend will continue and worsen.

The hon. Gentleman made valid points, but the answers are much more complex than he suggests. Even if we accept the general points, pretending that a specific case is generic is typical of the Government's approach to health care.

The Government believe that they must always present the health care system in as rosy a light as possible. If they cannot distort what is happening, they change the presentation of the overall figures. One in eight hospital managers admits to distorting targets to fit the Government's NHS figures. One manager recently said: All chief executives in the region contrived to make the same 100 per cent. return to the Department of Health on absence of waits in A&E. This was done with the encouragement of the regional director because we all agreed the requirement was meaningless. What sort of ethics is that on which to run a system?

Let me cite another example. The Government knew that their target of 2,000 extra GPs by 2004 would not be met, and they therefore merged two targets. They now say that 15,000 new GPs and consultants will be in place by 2008.

Delays for cancer treatment as opposed to diagnosis remain lengthy despite the Government's continual bragging. The number of patients who start radiotherapy within the Government's four-week target fell from 68 per cent. in 1998 to 32 per cent. in 2000.

Some Ministers are experts at breaking promises. For example, £50 million was promised for palliative care but only £4 million has reached the hospices. What is more, and worse, the Minister of State, who is not in his place, had the gall to launch the scheme in his constituency, but its hospice has not yet received any money.

The cumulative effect of centralisation, distortion and downright deception is shown in the plummeting morale of those who heroically work to keep the NHS running. The deprofessionalisation that they suffer is obvious in a growing crisis in the work force. For example, 24 per cent. of nurses on the UKCC register are over 50 and therefore eligible to retire soon. One third of all new entrants in 2001 were from outside the United Kingdom. NHS Professionals, which was set up to end the reliance on commercial nursing agencies, is in financial crisis, with up to £10 million in unpaid bills. It also relies on the very agencies that it was meant to replace.

The Royal College of Nursing claims there are around 20,000 nursing vacancies still—roughly the same as the number of agency nurses working in the NHS on a normal day…A third of new graduate nurses are not registering to practise". What about nurses who leave the UK? A total of 6,021 left in 2002. That is the largest number for 10 years. Most headed for Australia or New Zealand.

Despite a Government pledge to recruit 2,000 extra midwives by 2004, the number has fallen since the target was set. The Royal College of Midwives said that there are now 45 fewer midwives than when the Government set the target.

James Purnell (Stalybridge and Hyde)

Is not the hon. Gentleman's problem his inability to say that he would match our spending? Will he deny the widely circulated rumour that he asked the shadow Chancellor for such a pledge in order to solve the problem, but that his request was turned down?

Dr. Fox

I would not discuss with the hon. Gentleman any confidential conversations that I held with my colleagues. On expenditure, we will set amounts that are appropriate to our plans. The Government have set expenditure that is appropriate to their plans. Clearly, they are not delivering. The hon. Gentleman falls into a common trap for Labour Members. They believe that simply throwing money at the problem will solve it. One cannot solve the problem of a lack of professional people by throwing money at it. People have to be attracted into the professions. Demoralisation throughout the NHS makes recruitment and retention more difficult.

If nurses are demoralised, let us consider consultants. They have become increasingly disillusioned by the restrictions on their clinical freedom, manipulation of waiting lists and the burden of red tape. Let me give one example. Professor Irving Taylor, professor of surgery at University college London listed the various bodies that assess, appraise and validate his performance and activity. Nationally, they are: the General Medical Council, the UK Council for Regulation of Healthcare Professionals, the National Clinical Assessment Authority, the National Care Standards Commission, the Commission for Health Improvement, the National Patient Safety Agency and the cancer accreditation teams.

The bodies in Professor Taylor's hospital are: the clinical governance committee, the continuing professional development committee, the professional advisory panel, the clinical audit committee, the annual consultant appraisal, the junior doctors' hours action teams, the pre-registration house officer and senior house reviews for postgraduate dean, and the specialist registrar review for postgraduate dean and Royal College of Surgeons.

The university organisations are: the internal quality assurance committee, the staff review and development committee, the annual university appraisal, the quality assurance agency, the research assessment exercise, the peer review of teaching and the research governance committee. Twenty-two different bodies examine his professional life. Yet the Government were going to cut red tape.

Glenda Jackson

I am intrigued by Conservative party policies. Does the hon. Gentleman argue that he could attract more professionals to the NHS by reducing the amount of money that they would be paid? Does he claim that he would increase professional standards through training? When the Conservative party was in office, it reduced training places for nurses and doctors. Is reducing wages and educational opportunities the way in which to attract more professionals and to increase competence?

Dr. Fox

The hon. Lady is making Conservative policies up; we will determine the genuine policies. We can attract people to any profession if they are given professional satisfaction, the freedom to value their vocation and are allowed to use the skills that they have developed without interference by someone who has little understanding of what they do well.

I shall give an example of the way in which to demoralise nurses. A nurse with whom I worked for a long time, and who must have performed thousands of ear syringings tells me that she now has a 12-page protocol for ear syringing. Someone else is trying to tell her how to do a job that she has performed for many years. That is the way in which to demoralise and fail to retain professional people. We have experienced the effects of deprofessionalising the teaching profession. Surely we do not want that to happen in the nursing and medical professions.

Mr. Dawson

Will the hon. Gentleman give way?

Dr. Fox

I have already given way to the hon. Gentleman.

One of the other problems is that consultants have had pressure put on them to remove the longest waiters from the list irrespective of clinical urgency, and that has been done by failing to treat an increasing number of people waiting for under six months, resulting in the bunching up described in the recent King's Fund report.

Consultants were also outraged by the sheer clumsiness of the handling of the proposed new contract. In particular, they were upset by the Department of Health's presentation, which made it clear to them that management would use the new contract to instruct doctors what to do and which patients to see. That became a headline issue as a result of the infamous "slide 9" of the Department of Health's presentation. Everyone in the profession talked about it. It was big news. It appeared in the medical press. Yet the day after the contract was rejected, the Secretary of State said that he had never heard of it. That makes him either the most clueless or the most disingenuous Secretary of State that we have had for a long time.

But if anyone thinks that we have problems with consultants, they should look at general practice. One of the biggest problems—

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle)

Tell us what you would do.

Dr. Fox

The Minister may not have gathered that we are debating the Queen's Speech. The reason why we come to the House of Commons is to discuss the Government's programme, which is what we are doing today, and point out the flaws in the Government's approach, which are all too easy to find.

One of the biggest problems with the Government's approach was summed up in the words of just one hon. Member when he said that it is all about schools and hospitals. The Prime Minister is the one who is most responsible for putting forward the idea that hospitals matter and nothing else, irrespective of the fact that 90 per cent. of our patient contacts take place elsewhere. To the Prime Minister it is all about hospitals, reinforcing the idea that it is the secondary sector that is important. What about the GPs, district nurses, midwives, practice nurses and all the therapists that my hon. Friend the Member for Bosworth (Mr. Tredinnick) is for ever going on about? All those people are important parts of the health care system and need to be recognised.

Mr. Tredinnickrose

Dr. Fox

There are times when looking ahead is the best policy. I will give way later—much later.

When it comes to the national plan, for the Government to meet their GP targets they had to recruit an extra 2,000 GPs between 2000 and 2004. The net increase throughout the country in 2000 was 18, and in 2001 it was also 18, according to the Government's own figures in a written answer. GPs increasingly look to early retirement to escape from the burden of red tape and paperwork imposed by the Government. It is frightening that fewer GP trainees—those junior doctors who have undergone GP training—are deciding to go into a full-time career in general practice.

We have a particular problem that will hit us when the crisis of south Asian retirement arrives. Most hon. Members will understandably not be aware of that problem, but one in six GPs practising full-time in the NHS qualified medically in a south Asian medical school and two thirds of them will retire by 2007. It is unlikely that doctors who qualify in south Asia will be a source of general practice recruitment in the future. The posts from which south Asian qualifiers are retiring will be the most difficult to fill because they are often in the practice areas of highest need. So the biggest problem will be in the areas of greatest need and often the areas of greatest social deprivation.

The Secretary of State keeps telling us that the money that the Government are putting into the NHS will buy us more GPs and consultants. Where does he think we will buy them from—from GP Argos or the GP supermarket? There are not huge numbers out there waiting to be employed in the NHS. We will have to encourage them into the service.

Management is not immune to demoralisation. The Government's bungling approach to the NHS has resulted in the paradox of a system that is under-managed at the front end but over-bureaucratised from the centre. In other words, those at the sharp end are not allowed to manage because of endless interference from the centre. Is any of that the Government's fault? No. On "Newsnight" the Secretary of State said: We have national standards in place, if we have poor performance that is because of poor management"— never poor policy.

Mr. Dobson

Does the hon. Gentleman not recognise that if the Government cannot find additional GPs and consultants it is because for 20 years the Tory Government did not recruit enough people into medical schools and postgraduate training?

Dr. Fox

It does not surprise me that the right hon. Gentleman fails to understand the essential point, which is that doctors undergoing GP training are not becoming full-time GPs because they find it an unattractive part of health care. That is the problem, and it is a cultural problem within medical employment. As long as the Government make things more and more difficult for GPs by increasing the amount of red tape, paperwork and restrictions that they face, that problem will continue. All that adds up to a picture of a Government who do not really understand that in a free society people cannot be forced into professions; they have to be attracted to them.

One other area that must worry us is the recent trend in the number of those applying to study medicine. Applications fell from more than 13,000 in 1996 to under 10,500 last year. We have seen a slight increase in the headline figure, but most medical experts have expressed worries about the quality and qualifications of applicants this year.

I said that I must give way to my hon. Friend the Member for Bosworth, and of course I must.

Mr. Tredinnick

I am grateful to my hon. Friend for giving way to me, as he put it, much later. Surely the health service shortages that he is addressing must also be addressed from another angle, and that is by bringing in those who do not work in the health service but who are medical practitioners. Does he not agree that properly regulated herbal therapists, acupuncturists and homeopaths, for example, could ease the burden on doctors tremendously? Are not foundation hospitals a great opportunity for new initiatives in terms of spreading the burden of the delivery of care—initiatives about which we have heard nothing from the Government?

Dr. Fox

As my hon. Friend is well aware, I think that we should be using all our medical professionals at the ceiling of their ability and skills, to ensure that we are using all our health professionals in the most appropriate way. Moreover, we must be able to prove that any expenditure on such solutions from the public purse is of equal validity and worth to that of other treatments in mainstream medicine. With those two provisos, I have no problem whatever with what my hon. Friend says.

That brings me to the issue of foundation hospitals, which my hon. Friend mentioned. That is one of the relatively few areas in which, if we drew our policies on a Venn diagram, the Secretary of State and I would find that there was quite an intersection. The concept of foundation hospitals is a good one and the policy is in a direction with which an incoming Conservative Government would be comfortable. We were therefore delighted this morning to hear that the current wave of foundation hospitals will be only a start and that the programme will be rolled out to encompass the whole of the NHS where possible. We want all hospitals to be foundation hospitals. If the principle is that they will provide better care to patients in the locality, all patients should be able to access such improvements. We should like to see the hospitals free, self-governing, independent and very much on the not-for-profit basis that the Secretary of State mentioned. We want to see an enabling state that will ensure that our health care is provided but does not see itself as a monopoly provider.

There are contradictions and confusions in the Government's approach, however, and there was certainly a strong feeling among Opposition Members that the Secretary of State had not previously considered many of the questions put by hon. Members on both sides of the House.

One of the most important issues affects my constituency. As has been said, local communities must hold trusts accountable, but what happens in constituencies such as mine that have no hospital trust? Which trust do we hold accountable? Those issues lie at the heart of the workability of the Government's scheme. My hon. Friend the Member for Wycombe (Mr. Goodman) raised the question of star ratings. If a hospital trust goes from three stars to two during the transition process, will it be ineligible for that transition or will hospitals simply not be subjected to star rating at all when they become foundation hospitals? Will the convenience of the system be put before the quality of rigour that the Government claim for the policy?

Clearly, there is huge tension in the Government between the so-called modernisers and those in No. 10 and the official voice of the Chancellor, Ed Balls, who gave the Chancellor's clear view when he spoke to The Guardian recently: We have to have the confidence to accept that there is a limit to how far you can apply market principles. The NHS and our public services depend upon an ethic of public service and a commitment to the services. In an area like health or education, if you go down the marketising route, you run grave risks with that ethic of public service. We all know exactly what that means in the code used by the Chancellor to fight turf wars with his Cabinet colleagues.

The briefings that we have received from the Secretary of State in the House differ from the reported briefings to chief executives across the health service. According to the Health Service Journal, the Government said in their latest briefing that foundations in five to 10 years would be the norm rather than the exception in the NHS. To me, that implies a rather faster rolling out of the programme than that suggested by the Secretary of State today. The chief executives who went to the briefing by the Secretary of State and the Department of Health report hearing that freedom over pay and conditions would be 'absolute' for foundation hospitals. Again, that emphasis is rather different from that which the Secretary of State gave us today. In fact, he had already moved in that direction when, in January, he told the Daily Express: To argue that we should simply pay everybody the same regardless of labour market conditions is absurd. I absolutely agree, and if he is willing to hold that line in the light of the undoubted reservations among those on his own Benches, he will have our particular support.

We need to move quickly, because of the points raised by many Labour Members on the risk of a two-tier system. The British Medical Association has laid the position out clearly: These freedoms ought to be available to all hospitals. Our prime concern must be to avoid creating a two-tier service in which patients who live near to Foundation Hospitals or are vocal and assertive in pressing to be referred to them, receive better services than those who are treated in other hospitals. That is the essence of the point made by the hon. Member for Hampstead and Highgate (Glenda Jackson). The BMA continues: Similarly, if Foundation Hospitals have more ability to borrow money with the result that there is less opportunity for other hospitals to obtain the resources they need, inequity will result. That will be a worry throughout the system, and it can be resolved only by not moving to a foundation model or by accepting at the outset that, in time, all hospitals will move to that model.

I hope that we get clear confirmation that all NHS hospitals will be foundation hospitals, because there is a worry for many of us who have been considering some Government reforms constructively, not least the relationship between primary care trusts and the aim of passing more money and more freedom down to them. There is a rumour, which I hope that the Secretary of State will dismiss now, that there will be new arrangements for foundation hospitals whereby PCT funding will be locked into contracts for five to seven years, thereby negating everything that the PCTs are supposed to be doing: exercising greater freedom over what they do with their funding and, according to the Government's release of a few weeks ago on NHS flows, money moving with the patient.

If the Government are saying that the freedom of PCTs will be sacrificed to give an element of stability to foundation hospitals, that is a significant policy change and the Secretary of State should tell us right now whether the reports are correct or incorrect. That is vital to today's debate in the House. I take his silence to confirm that many of those rumours are correct.

Glenda Jackson

The hon. Gentleman has already told the House that the Conservatives welcome the idea of foundation hospitals because of the freedom that it would afford them, but, with respect and given his previous contributions, the freedom to do precisely what? He has already argued that money is not achieving any improvements in the NHS, that there are insufficient nurses and doctors and that there is far too much red tape. Given that that is his position, what will the foundation hospitals afford his party the freedom to do?

Dr. Fox

Making a mistake once is understandable, but making it twice—giving way again—is plain stupid. The hon. Lady must ask those questions primarily of the Secretary of State, as it is Government policy to introduce foundation hospitals. I have told her that I agree with the principle.

We studied foundation hospitals overseas and I asked what their most useful freedom was. They said that it was the freedom to borrow externally, because they can make quick decisions about investment, most notably in diagnostics, where patient treatment bottlenecks tend to occur. Such hospitals can also set their own pay and conditions to deal with recruitment and retention problems in their locality, and they can determine information technology strategies in line with their local health community.

There are three freedoms, for a start, that I would have thought most hon. Members agree with. The Government are right to move down that route and we shall support them, but we shall not support their proposals on the problem of delayed discharge, or bed blocking as it is known. The Secretary of State is quite right—he intends to fine local authorities. The Government say that they got that example from Sweden, but they could not have spent much time examining it, as they would have discovered that there are huge differences between the model employed in Sweden and that being used in the UK.

The Government would have found that Swedish local authorities are responsible for social care as well as hospital care, so they can affect the patient flows that result in bed blocking and delayed discharge. The problem in Britain is that the PCTs are responsible for patient throughput and patient flows, but local government is to be made financially liable for delayed discharging. In other words, local government will be punished for something over which it has absolutely no control. The proposal is preposterous. Have the Government thought about what it will mean on the ground? It will result in the worst perverse incentives in general practice.

Imagine a hard-pressed GP trying to get an elderly patient into a care home on a Friday afternoon—it is difficult to get a place. Under the Government's proposal, patients in an acute hospital will necessarily get first call on any care home beds that become available, so there will be an incentive for doctors to admit patients to acute hospitals as they will get first call and be most likely to get a care home bed as a result. That is a crazy policy, and its effect will be exactly the opposite of what the Government expect. If anything, it may worsen delayed discharges in the health system.

The Government have proposals on mental health. The Secretary of State told us on this morning's "Today" programme, as he has just told the House, that the Bill will return during this Session after the consultation has been considered. He said that the number of consultations is one reason for the delay, but it cannot be that hard to understand the point that nobody supports the Bill. All the consultations are hostile, and the Royal College of Psychiatrists, Mind, SANE, the BMA, the Royal College of Nursing, the Conservative party, the Liberal Democrat party, many Labour MPs and most Labour peers are all totally against what is proposed. The Bill is not a mental health Bill, but a personality disorder Bill dressed up to look like a mental health Bill.

If the Government bring the Bill back in its current form, they are as stupid as they are arrogant. It is stigmatising, regressive and an affront to our civil liberties, and we shall join forces inside and outside Parliament to stop it, as it must not become the law of this country.

Where the Government's programme will improve health care and coincides with our views, we will support it, even if the Government cannot muster support on their own Benches, but we will continue to expose the distortions of the truth, the propaganda and the spin that is this Government. Some things are for sure: they will tax more and more, they will spend more and more but they will disappoint and fail to deliver. The real losers, sadly, will not be the politicians but the patients.

Several hon. Members


Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I remind the House that a 12-minute limit on Back-Bench speeches will apply.

3 pm

Mr. Stephen Byers (Tyneside, North)

This is my first contribution in the House from the Back Benches for more than eight years. I no longer have the convenience and comfort of resting on the Dispatch Box, sometimes using it as a means of physical protection, or the tumbler of water always ready. I have to admit that there have been times when I have addressed the House in the past 12 months when something stronger than water might have been helpful.

On the Back Benches, I have the time and opportunity to reflect on the direction of the Government and the way in which they should respond to meet people's needs and aspirations. I have the opportunity to challenge the Government if they slow the pace of reform and modernisation that will be vital if we are to introduce policies for the common good of the people of our country.

The Queen's Speech and the Budget are perhaps the two timetabled items in the parliamentary calendar that say everything about the Government of the day. They identify priorities and reorder the programme of the Government. They should underpin the values and principles of the political party that has been elected to office at that time.

In government, it is often a race against time. It is worth reflecting on the fact that when the period of the Queen's Speech is over and the programme is put into place by the autumn of next year, half the lifetime of this Government will be over. In the autumn of 2003, we will probably be less than two and a half years from the next general election, so it is a race against time for the Government, with people's expectations rightly raised.

This Queen's Speech gets it broadly right. Stressing the need for a strong society based on rights and responsibilities is what people want. We need to push forward with our reform of public services, so that they are more responsive, meet the high standards that people want and give them choice.

This stage of a Parliament is often the most challenging for a Government. Vested interests regroup, voices call for consolidation and some even argue for a change and reconsideration of our objectives and direction, but this is not the time to stand still, cling to the comfort blanket of the status quo and opt for a quiet life by leaving things as they are.

We live in a world whose chief characteristic is change. Force of change outside our country is driving the need for change within it. Our people have new ambitions, different priorities and raised expectations. If the Government or indeed any political party fail to reflect that reality, they will quickly become redundant and their ideas will become dogma.

That is why the Labour party has changed. That has been reflected in the Queen's Speech. We have made changes, not to betray our principles as the Labour party but to fulfil them by being in office, not to lose our identity as a political party but to keep our relevance to the people of our country. I appreciate that for many in the Labour party that has been a difficult and sometimes painful process but in this modern world—I think that the Conservative party may be learning this—to fail to embrace change is to condemn oneself to almost permanent Opposition.

It is vital that, in government, we continue to make the changes necessary to ensure that we keep in touch and reflect the needs and aspirations of the British people. To achieve that in office will require as much fresh thinking, new ideas and courage as was necessary during the 1990s to make the Labour party electable again. That is why I congratulate my right hon. Friend the Secretary of State for Health, who, in making the proposals for foundation hospitals, has shown how fresh, new thinking to identify and meet the needs of the present day can be embedded in the values and principles of the Labour party that was founded over 100 years ago.

We need to change the political landscape so that it reflects our values and principles. We need to seek a new political consensus to sustain us in office. That consensus must recognise that social justice and economic efficiency are two sides of the same coin—they are not in conflict with each other; one feeds off the other. Opportunities should be extended to our people so that everyone can achieve their full potential with their talents. Rights must be coupled with responsibilities. It should be recognised that an individual does best in a strong community and a society of others, and that greater investment is needed to improve public services, which must be reformed and modernised to meet the demands of the 21st century. That is the consensus around which we can unite as a country and that is reflected in the Queen's Speech.

We like as a Government to say that we are for the many and not the few. We must show that that is more than just a political slogan or a convenient soundbite and put real substance on it. That is a challenge for the Government.

There are a number of ways to meet that challenge. It is important because it identifies a key political division, a divide between political parties. The Conservative party, although it may say otherwise, will always be the party that wants to pander to an elite. That runs deep in its history and I do not believe that it is ever going to change. We, however, based on our history as a political party, recognise that there is too much wasted talent, too much inequality, and that people with potential are being wasted.

It is a challenge for the Government to change that, to ensure that we can deliver for all our people and to liberate those individuals. We do it for them and for our country because we all benefit. We will not have a strong and robust economy if we have a weak and divided society. That is why all people have a part to play.

The Government need to deal with the difficult issue about inequality of assets and wealth. We have done a lot to tackle the inequality of income. We have introduced the national minimum wage, the working families tax credit and the child tax credit. All that will make a difference. It will take many people out of the daily grind of poverty, but we now need to turn our attention to a far more difficult issue: inequality of assets. By that, I mean people who have no savings, who do not own their own home and who do not have investments in shares and so on.

That is important because an increasing number of people in Britain are without assets and the position is getting worse. The new divisions that we have to tackle are between the asset-excluded, the asset-poor and the asset-rich. In 1996, according to the Institute for Public Policy Research, 10 per cent. of the UK population had no assets. Now 20 per cent. of those aged between 20 and 34 have no assets. Figures given to me just this week by the House of Commons Library show that in 2001, more than 50 per cent. of the population had savings of less than £1,500. We have to find ways of ensuring that all people can have assets that they can call their own.

The Labour party manifesto in 2001 contained two proposals that could make a real difference. The first was the introduction of equity shares for tenants in social housing and the second was the creation of a child trust fund through an endowment paid by the Government. That is sometimes referred to as a baby bond. The lump sum would not be means-tested. It would be paid into an account on birth and drawn down at the age of 18. Every person from whatever background would have access to their own opportunity fund at the age of 18. The cost would be significant as an endowment fund of £1,000 would cost some £700 million in benefit, but I consider that it should be a priority. Equity shares should also be pursued.

As I said earlier, the Queen's Speech gets it broadly right. It addresses the need to reform our public services and rebalance our criminal justice system so that people recognise their rights and responsibilities. It meets the challenges of the day. The public want it and it is now the Government's responsibility to deliver. I am confident that they will discharge that responsibility.

3.12 pm
Dr. Evan Harris (Oxford, West and Abingdon)

It is a pleasure to follow the right hon. Member for Tyneside, North (Mr. Byers), whose speech reflected the usual tone of Queen's Speech debates—that new thinking is the order of the day, as well as more profound reflections on the topics in the Queen's Speech. In contrast, Front-Bench Members are forced to deal with the detail of the proposed measures and with party political differences. The right hon. Gentleman was correct in his view that the Government need to think about reform and to have fresh ideas, and that requires courage. However, the same applies to Opposition parties. It is a particular challenge to Opposition parties, who could just about get by simply criticising the Government. That is tempting in many ways, but democracy—particularly with a lower turnout—requires us to provide an alternative option where we disagree. I have heard the Secretary of State say, when presented with opposition to some of his reforms, "What was the alternative?" That is a question that he has fairly asked the Liberal Democrats and the Conservatives. We have now developed our policies and I shall share them briefly with him, as he will probably want to oppose them. The right hon. Member for Tyneside, North referred to the challenge of recognising that times are changing and that there is a need for reform, and that challenge applies to Opposition parties, too.

Before getting into the detail of NHS reform, I want to say how much I welcome the remarks of the Secretary of State about the mental health Bill. It is wrong for an Opposition party to call for a measure to be withdrawn for further consideration and then to attack the Government for doing just that. My right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy) stressed the need for wider legislation on mental health and said that the matter should not be shelved simply because the Government were experiencing difficulties in attempting to tackle what it perceives as an unreasonable risk to the community. The Government are taking the right approach in looking at the consultation and, we hope, bringing back the Bill in a more acceptable form. I accept that we will still have disagreements, but Opposition parties need to recognise that these are difficult issues.

It is not the case, as the hon. Member for Woodspring (Dr. Fox) suggested that there is no organisation in support of the Government's proposals on people with severe personality disorders who pose a potential danger to the public. The Zito Trust, which was founded as the result of a homicide by someone who was mentally ill, supports those measures. As the Secretary of State said previously, such incidents create difficulties for the Government, who are under pressure to ensure that the public feel safe—and, indeed, are safe. So the disagreement is not over the principle of the need to do something, but whether the need is as serious as the Government seem to state it and whether the particular way in which they wish to tackle it is right. I agree with the hon. Member for Woodspring that it is wholly wrong. Part of the problem is that there is a perception, stated previously by the right hon. Member for Holborn and St. Pancras (Mr. Dobson) that community care has failed so we have to do something. I hope that the right hon. Gentleman has had a chance to reflect on that pronouncement, which he made at the Dispatch Box. Many people would argue that community care was never tried properly because it was never properly funded. In that respect, I welcome the resources that the Government are putting in. It would be unfortunate to say that the die is cast and the sentence has been passed even before those resources work through the system.

Mr. Dobson

We are talking about reality, not about what we might have liked to happen when the Tories were in government. The fact is that there was not enough money to make care in the community work and that was one of the reasons why it failed.

Dr. Harris

The point that I was trying to make is that saying that because care in the community had failed—mainly due to lack of resources—we needed to lock people up, and that providing care in the community for people who may pose a danger, mainly to themselves rather than to other people, is wrong, seems to be the wrong approach. We should try putting in more resources, because, as the right hon. Gentleman knows, most of the homicides—which have not increased in number over many decades—are due to the failure of services to connect with vulnerable people who need support, not to people being maintained on care plans in the community who then go out and commit these acts. The resources have to be given a chance to work.

Dr. Fox

Does the hon. Gentleman accept that it is a fair representation of the position to say that there is an overwhelming consensus that we need to update our mental health laws and that that would be entirely possible in a very constructive spirit, but that the stumbling block is the Government's inflexibility and their insistence on putting severe personality disorders and a specific way of dealing with them at the centre of the Bill?

Dr. Harris: The

hon. Gentleman is quite right about that. Mental health legislation is rather like measures on adoption and children, in that there should be no need for significant cross-party oppositionitis—[Interruption.]—although some people still manage to disagree on party political issues. It is a good thing for the hon. Member for North-East Hertfordshire (Mr. Heald) that there will be no need for him to miss out in participating in a mental health Bill now. He has been most assiduous in his work on the subject and I congratulate him on his promotion in the recent shadow Cabinet reshuffle.

On the general issues regarding reform, there is a temptation to call the Government's latest NHS reform Bill the "re-re-re-reform" Bill as it is the Government's fourth attempt. That is not to say that we are opposed to reform, although we are opposed to serial structural changes when they are the wrong reforms. However, the onus is on Opposition parties to come up with alternative reforms.

To use the same language as the Government, the Liberal Democrats are proposing decentralisation and democratisation, of the commissioning function in particular. We believe that whether or not it is the case at the moment, the key decisions in the health service should be made by commissioning bodies in charge of the strategy for the health service and what it should or should not provide. It is not a provider issue, but a commissioning or, to use an old-fashioned term, a purchasing issue. That function needs to be more decentralised and more in touch democratically with the local community.

The hon. Member for Wakefield (Mr. Hinchliffe), the Chairman of the Select Committee on Health, unusually is not here today. I understand that he is away on Select Committee business. He has said clearly that if local authorities can decide what social services to commission, there is no reason why they cannot also decide what local health services to commission. It would do away with the so-called "Berlin wall" if the same local authority committee was dealing with the commissioning of both health and social services. Two further things are needed for that to work. First, there must be tax-raising powers locally so that commissioning bodies have the ability to increase or, possibly, decrease taxes according to what the public want. It would be wrong and inconsistent to call for more decentralisation of responsibility for commissioning without giving those concerned the ability, through fair local taxation, to raise the resources needed, as they see fit, to increase the amount of services that can be provided.

Secondly, those bodies must be explicit and honest about rationing and what can and cannot be afforded. I know that there are Conservative Members who have come round to this view, most notably the right hon. Member for Maidstone and The Weald (Miss Widdecombe) while she was shadow Secretary of State for Health. Part of the problem at the moment for those of us who want to see the NHS grow is that people think that that can happen without putting in the resources.

It would be easier for the Secretary of State and me to promote the idea of paying for a bigger, wider and more universal NHS through fair taxation if the voters knew that because they were not providing enough through that means, certain things were not available. Hiding behind rationing decisions made by organisations such as the National Institute for Clinical Excellence or local clinicians leads to an unfortunate side effect, which is that people do not recognise how much rationing there is.

We want decentralisation to democratic regional bodies that can look after the strategic role in decision making, and we want the decentralisation of commissioning to local authorities. The problem with primary care trusts is that there is no democratic local representation on them, and that is required. Local authorities need to be informed by a strengthened public health function, bringing together all public health functions including housing and environmental health, which are currently already the responsibility of local authorities. They also need to be informed by the PCTs and by patient stakeholders. However, the responsibility must lie with decision makers.

I understand that the Secretary of State has to leave shortly and I am grateful that he has listened so far, if only so that he is better able to attack the policies that I have proposed, rather than the personalities involved. We see the need for greater diversity in provision, so we are with the right hon. Gentleman in respect of the Government's proposal of foundation hospitals as new public benefit organisations and their move away from the one-size-fits-all approach to the question of who provides NHS care. We see a role for public benefit organisations, but they must not be top-down. The fact that the Government are centralising as they claim to decentralise is unfortunate. Why force that status on a select group of hospitals? Why not allow local communities—whatever the star status of the hospitals in these sham performance ratings—to choose whether the hospitals are public benefit organisations? There should be no cash incentives or bribes for that status because that would create the sort of inequity that has been referred to already by a number of hon. Members. That is not the way in which public benefit organisations should develop—just as it is wrong that the private sector should have any advantage, such as not having to train the health service workers whom it employs. The private sector should not cherry-pick or poach them from the health service. In the same way, new public benefit organisations should not have advantages handed down.

The next criterion is that foundation hospitals must be independent from the Department of Health, if the Secretary of State is serious. I question how independent from Department of Health policy they will be. In a press release on 22 May, the Secretary of State talked about NHS foundation hospitals being established as free-standing legal entities, free from direction by the Secretary of State for Health. However, he recognises that, by proxy, there are plenty of ways in which the Secretary of State has influence over those hospitals. For example, they will be subject to inspection by the new commission. One of the concerns we have about that commission is that it will inspect on the basis of performance targets that are set by the Department. That is not a truly independent inspectorate; it should be allowed to choose its meaningful performance measures, rather than the distorting, meaningless ones that have been discussed here.

In the same vein, the Secretary of State will admit—because he has written it in a document—that the hospitals will not be independent because they will be subject to performance monitoring from the commissioners. I have nothing against that, but the right hon. Gentleman has admitted that the commissioners, the PCTs, who are contracting with the foundation hospitals, will have to commission to the targets that he sets. In a document on foundation hospitals that was published in the summer, he talks about: Hard-edged cash for performance contracts with commissioners In paragraph 3.7 of the document, the Secretary of State says: Commissioners will be able to hold NHS Foundation Trusts to account for service delivery and for their contribution to delivering on local health strategies and meeting targets through legally enforceable 'arm's length' contracts. Contracts will encompass both incentives for good performance and penalties for poor performance. That encapsulates our two concerns: first, that the Department's centralised target culture will impact on all the hospitals—certainly those that are still under the cosh in terms of targets and even the new foundation hospitals, through the contracts that commissioners will be forced to enforce—and secondly, that there will be cash incentives and fines for sometimes putting patients' needs before politicians' needs by meeting the needs of patients rather than distorting clinical priorities.

The mark of a sensible politician is to say that a Secretary of State from his party would not be allowed to set these targets. I know that that is tempting when the Secretary of State says that the first concern of patients is the amount of time that they have to wait. However, there is an added onus on politicians and those who provide the service, which is to treat the sickest quickest. The problem with maximum waiting time targets—even in terms of coronary heart disease, which the Secretary of State just mentioned—is that the most urgent patient is the one coming up to the politically imposed deadline. As the hon. Member for Woodspring said, the people who need more urgent surgery—for example, people with left main-stem disease or critical ischaemia, who are at risk of dying if they are not treated within a week—may well find their operations postponed so that the political targets are met first. In those two respects, the Government have still to demonstrate how foundation hospitals will be as truly independent of Whitehall control as the Government's rhetoric suggests.

There are a number of issues about foundation hospitals on which I would like clarification. First, what will be the constituency for elections to the boards? That point has been made also by the hon. Member for High Peak (Mr. Levitt). How truly democratic will the elections be when one will have to elect to be a member of the public benefit organisation? As the hon. Member for Hampstead and Highgate (Glenda Jackson) rightly said, that will mean that the middle classes—who tend to have the luxuries of time and health which enable them to be more involved in these issues—will tend to dominate. How will the Secretary of State tackle the democratic deficit and the mismatch between the accountability of provider organisations and the commissioning organisations—the PCTs—which are professionally run and accountable only, and too much, to the Department?

Will the Secretary of State answer the question about the disposal of assets of these organisations? For example, he said in a press release on 18 April that the first foundation hospitals would have freedom and flexibility within the new NHS pay systems to reward staff appropriately—I shall come back to that—and full control over all assets and retention of land sales. Some hospitals often have greater land assets than others. That is not because they deserve them; it is a quirk of history. In some areas—for example, the south-east—that land value will be greater than in other areas. Is it equitable that the revenue from those sales is not redistributed according to need, rather than history, as seems to be the proposal?

We are concerned about freedom over pay. There is a need to ensure that there can be more local pay flexibility, but it seems rational to avoid cherry-picking by foundation hospitals by allowing local pay only where there is local revenue raising. If communities want to respond to the labour market, they should recognise that they may have to do so through higher local taxes, feeding into higher pay in those hospitals. That is a consistent approach, and must be better than simply giving money to certain hospitals and allowing them to cherry-pick. Not only the British Medical Association and the Royal College of Nursing but the NHS Confederation is equally concerned about that.

For the commission for health care audit and inspection to be truly independent, it must be allowed—from the beginning, not some way down the road—to set its own targets rather than simply measuring how hospitals jump through hoops set by central Government. I hope that there will be cross-party support, perhaps in another place, to ensure that it has that true independence. It is unfortunate, to say the least, that this is now the fourth reorganisation of inspectorates. The first NHS reform Bill set up the Commission for Health Improvement, which we supported, with reservations on its independence, then the National Care Standards Commission was set up under the Care Standards Act 2000, then the next NHS re-reform Bill amended the provisions affecting CHI, and as soon as the NCSC was set up the Government agreed to merge the inspectorates so that private and NHS hospitals, for example, have the same inspection regime. If media reports that Sir Ian Kennedy has been appointed to head the new commission are correct, I have more confidence that it will be truly independent, but if the statute says that it must do the bidding of the DOH in its performance monitoring, independence will be a major concern.

It is important to consider the delayed discharges measures. Not a single organisation supports the proposals. If there is no capacity, there is no capacity. Fining hard-pressed local authorities and social services departments for the failure of investment from the time of the Conservative Government until 1999–2000, which marks the end of cuts in real terms for social services, is not only unfair but an insult to those local authorities who work so hard to make ends meet.

We have already heard about some of the distortions that the fines will create. There will be a distortion of resource allocation, as local authorities seek to avoid losing money overall. In some areas where there is still discretion within the tight standard spending assessment boundaries, some services will be de-funded in favour of social services, because of the double jeopardy created by the fining. There will also be a distortion of resource allocation within social services, as the vulnerable young, the mentally ill and the disabled suffer cuts in their allocations by local authorities desperate to avoid losing money through fines for delayed discharges. There will also be a distortion of resource allocation within care services for the elderly, as money is provided for intermediate care and care packages for elderly people leaving hospital at the expense of other provision for the elderly.

Dr. Andrew Murrison (Westbury)

Will not fines on social services inevitably be levied on council tax payers, and as the representative of a party that is so keen on local taxation, does not the hon. Gentleman welcome that?

Dr. Harris

I am delighted that the hon. Gentleman asked me that, because we have made it clear that we want council tax to be abolished and replaced by a fair tax. Even if there is a fair tax, such as a local income tax, it is wrong for the Government to transfer responsibility— [Interruption.] The hon. Member for East Worthing and Shoreham (Tim Loughton) asks why local income tax is fairer than council tax. I do not think that the idea of progressivity in taxation, which should be understood by a party purporting to support the vulnerable, has filtered down to him on the Conservative Front Bench. He would find it hard to argue in front of any audience for a property tax in which the highest band is barely twice the level of the lowest, even though the disparities in ability to pay—a foreign concept to him, perhaps—may be much greater.

The hon. Member for Westbury (Dr. Murrison) was right to imply that it is wrong for the Government stealthily to transfer central funding responsibilities to local tax payers. That would be so even if there was a fair tax, but it is even worse when there is a regressive tax. Council tax rises, which have been above inflation, have the greatest impact on people on fixed incomes, such as elderly widows and widowers who have been left in larger houses that attract a higher council tax. Council tax rises are already increasing as a result of the reallocation of taxation from central to local government. Central Government take the praise for cutting tax or holding it down, while blaming local authorities—even their own party's—for raising it.

Dr. Tonge

I am not clear how much the fines are going to be. If the fine is less than the local authority would normally pay for a person in a residential home, there is no point in its trying harder to find a place. Would not it be better to charge the same as the cost of a residential home, levying it in the same way, with the patient having to sell their home if necessary—although that might mean the local authority leaving them there indefinitely—and would it—

Madam Deputy Speaker (Sylvia Heal)


Dr. Harris

The level of the fines is a concern, although not the major concern, and the Government have produced different figures and have not been clear. In a parliamentary answer to my hon. Friend the Member for Sutton and Cheam (Mr. Burstow), the Minister of State, the hon. Member for Redditch (Jacqui Smith), said that the reimbursement—the fine—for delayed discharge should be £120 a day in London and the south-east, and £100 throughout the rest of England. That is hundreds of pounds a week.

The problem is not only the level of the fine but the fact that people will be fined for something that is not in their control. The fines will create resource allocation distortions and we will end up with game playing between hospitals seeking to discharge or get the fine, and local authorities, and indeed carers, concerned about whether patients are fit for discharge. Indeed, we are already beginning to see premature discharge from hospital departments. Between April 2001 and March 2002, 122,881 people over the age of 75 were readmitted as an emergency within 28 days of discharge. That is a 14 per cent. increase over the period between April 1999 and March 2000. There was a 5 per cent. increase in the total number of people readmitted as an emergency within 28 days in 2001–02, despite what the DOH document on implementation of the NHS plan says is the Government's intention: Nationally, to ensure that average growth…in the per capita rate of emergency admissions for people aged 75 and over is less than 2 per cent., and that the rate of emergency readmissions within 28 days of discharge does not increase. There will be greater conflict between hospitals and social services, and with carers, who have been completely forgotten in this matter. Carers often bear the brunt of looking after people who have been discharged from hospital, not all of whom go to care homes. Carers UK is wholly opposed to the measure, although it would support an honest and sensible approach to tackle delayed discharges.

In Scotland, a different approach is taken—trying to identify and share good practice. The Government in Scotland, who have a Labour influence, have rejected the approach proposed by the Westminster Government, and I hope that, even at this late stage, the Government will reconsider their approach.

Although there are some aspects of this legislation that we will support, there are plenty of others on which we will oppose the Government. If they are serious about reform, I hope that they will listen to the concerns raised and alternatives put, recognise the need for true independence for the health care inspectorate, for example, and recognise that, if we are to go down the path of public benefit organisations, equity must be protected. There must be no cherry-picking of staff, and no bribes or incentives. The Government must be consistent. They cannot say, as they did in 1997, that they oppose two-tierism in general practice, and then say that they support it in hospitals. They cannot say that they oppose GP fundholding, and then introduce hospital fundholding. More than anything else, after this Queen's Speech the Government have more questions to answer than they have answered so far.

Mr. Forth

On a point of order, Madam Deputy Speaker. Earlier today, I raised with the Leader of the House the question of the new procedure for written ministerial statements. I was particularly worried about the fact that they might trickle out during the day, and that Members might not therefore have proper access to them. There are 10 such statements listed on today's Order Paper. I have just checked with the Library, and one of them was in the Library at 9.30 this morning—demonstrating that that can indeed be done—another arrived at 11.30 am, and six arrived between 12 noon and 1 pm. However, one statement has yet to reach the Library.

I hope that you agree, Madam Deputy Speaker, that it is unacceptable for the Government to handle the new procedure in this shoddy way. Members must have a reasonable expectation of when written ministerial statements will arrive in the House and be available for them to deal with as they wish. I hope that at this very early stage, the House authorities will make it clear to the Government and to Departments that we expect written ministerial statements of which notice is given on the Order Paper to be available to Members in the Library in a timely fashion each day, rather than trickling out. The House has already sat for four hours, yet one such statement—from the Office of the Deputy Prime Minister—is still not available to Members. I hope that the matter will be looked into.

Madam Deputy Speaker

I thank the right hon. Gentleman for raising that point of order. There is no rule of the House that says what time such statements should appear. Perhaps it would be appropriate for him to take up this matter through the usual channels.

3.42 pm
Mr. Frank Dobson (Holborn and St. Pancras)

I am sorry that the Secretary of State has had to leave. As he knows, I go around supporting the Government and their health policies behind his back. As I am going to criticise them today, I thought that I should do so to his face—or rather, because of the layout of this place, to the back of his head—but unfortunately that is not possible.

When I first heard of the proposal for foundation hospitals, they sounded to me like a bad idea, and the more I have thought about them, the more I have concluded that they are. I believe that, as currently proposed, they would inevitably lead to a two-tier health service, with some hospitals getting better and better at the expense of others that were getting worse and worse. The proposal does not address the most serious problem faced by patients; indeed, it makes matters worse.

Some NHS hospitals are doing a very good job, some need lesser or greater amounts of improvement, and others are doing really badly. Surely the priority must be to bring the worst up to the standard of the best, and until now that is what the Government have tried to do. They have introduced national standards of treatment for cancer, heart disease, diabetes, the mentally ill and the elderly, they have set up the Commission for Health Improvement to check on standards and give advice on improvements, and they have established the National Institute for Clinical Excellence to try to tackle the problem of postcode prescribing. All those measures were introduced with the opposition of the Conservatives, but with the support of the professionals involved, across the board.

However, foundation hospitals as currently proposed will not be introduced across the board. The 12 best performing hospitals will be singled out for privileged treatment. They will be allowed to borrow money, both from the City and from the Exchequer, and also to keep the total takings from land sales. They are also promised relief from Government interference through the earmarking of funds. Consequently, they will have more money and be better off. They will be able to attract scarce professional staff from neighbouring hospitals by offering better pay, better working conditions and newer equipment—so they will be doing better at the expense of the rest.

The situation is probably best summarised in St. Matthew's gospel, chapter 25 verse 29: For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. I doubt whether those who drafted the Authorised Version of the Bible realised that they were introducing the motto for our foundation hospitals.

The question is: why should the best hospitals be singled out for special and advantageous treatment? If Government interference hinders improvement, why not stop interfering with all hospitals? The argument appears to be that the best hospitals should be rewarded for their performance, but that betrays an obsession with institutions rather than patients. We have only to ask one question to expose the irrationality of the proposal for foundation hospitals: which patients are getting the worst deal, and how do we get them a better one? We know that those who are getting the worst deal are those who have to rely on the worst run hospitals. We also know that they will benefit only if we can narrow the gap between the performance of their hospitals and that of the best hospitals, by levelling up performance. Foundation hospitals will achieve the reverse.

My right hon. Friend the Member for Tyneside, North (Mr. Byers) —I am glad to see him here—talked about consensus. Until now, we have had a consensus on the national health service—just about—and it has been a Labour consensus. However, we are now in danger of setting out to establish a consensus that is basically Tory.

I cannot see how the current proposals will lead to anything other than a two-tier national health service, with one group of hospitals permanently doing better than the other. Moreover, hospitals will have to start competing again. We said that we would abolish competition between hospitals, and we did—but apparently, we are bringing it back: we are re-introducing the internal market. Indeed, we may be introducing something a bit beyond that. If such hospitals borrow, and their income from the trusts that commission their services is not enough to meet their outgoings on borrowing—all borrowing involves paying interest and, eventually, repaying the principal—they will be increasingly tempted to look for private patients. Instead of advertising for doctors from abroad, perhaps some will end up advertising for patients from abroad, to make up any shortfall in funds.

This whole idea springs from certain Government advisers' obsession with the concepts of choice and diversity. People like them may want such choice, but I doubt whether most people do. I doubt whether people in Bristol want to choose to go to Gloucester to benefit from a foundation hospital, or whether people in Leicester want to choose to go to Nottingham for the same benefit. What such people want is prompt first-class treatment and care close to home, at their local hospital—but their local hospitals might lose talented staff to foundation hospitals in Gloucester and Nottingham.

The proposals are likely to widen inequalities between hospitals, and inequalities in health. For example, land values in London and the south-east are much higher than in the rest of the country. If a foundation hospital in the south-east decides to sell off some of its property, it will be able to keep all that money, which will prove a great advantage. That money will no longer be spread across the country. Since 1997, £1.6 billion has gone into the NHS from the sale of property, but it has been shared out throughout the country. Members who represent midlands or northern seats should watch out: some of the money that used to go to their areas will no longer do so if there are many foundation hospitals in the south-east.

Very recently we have heard the proposal that there should be elected boards. Apparently they are not to be elected by the whole registered electorate of an area, but by a self-selected group of people. I am not sure whether those people will be residents or patients—but patients of which hospital? I was talking to my wife about that this morning. We worked out that during the years when our children were still at home, we had made use of University College hospital, the Elizabeth Garrett Anderson hospital for women, Great Ormond Street hospital for children, Barts hospital, Moorfields eye hospital, St. Mary's hospital and the Royal Free hospital. Will we have a vote in all of them? There is no answer to that. The proposal has not been thought out.

If that electorate is to choose itself, it could be subject to manipulation, or something that some of us in the Labour party have a long history of resisting—infiltration. As my right hon. Friend the Secretary of State pointed out in another context, there is always the problem of what Tawney described as the "sharp elbows" of the middle classes. It seems to me that their sharp elbows will get the middle classes on to those electoral rolls, and other people will not be there. If there are to be elected boards, they should cover everyone in every part of the country.

Finally, there seems to be a complete lack of logic in the Government's proposition. If the present arrangements are fundamentally unsound, how did the best hospitals get to be as good as they are, and why are the Government saying that non-foundation hospitals will have to continue to operate under those unsound and flawed arrangements in order to improve themselves? If it is true that the structure is fundamentally unsound, as the Government say, there would be no possibility of improvement under that system for the hospitals that need it.

I do not believe that the Government really have faith in the foundation hospital idea. If they did, they would choose 12 places at random to see whether the proposal would work not only in hospitals that have been well run, but in those that have been moderately run and those that have been badly run. I do not think that the proposal will work. It will be divisive, and I shall do my level best to oppose it at every stage.

3.53 pm
Virginia Bottomley (South-West Surrey)

Now we understand why the Secretary of State had such a pressing prior engagement this afternoon. I greatly appreciate the opportunity to speak in this debate as, in part, it identifies the Government's priorities. There were many omissions from the Queen's Speech, which worry many of my constituents and my colleagues—most notably, the whole issue of pensions.

There is rising panic about people's security in old age. In their first flush, the Government rushed in and raided pension funds to the tune of £5 billion. The right hon. Member for Birkenhead (Mr. Field), my first boss, was appointed to think the unthinkable, but he has disappeared from the Government and we have heard all too little about that. When all are united in the view that one of the greatest priorities is protection and safety for people in their later years, it is extraordinary that there is such silence on the subject.

The fact that there was no mention of a civil service Bill is a serious error. I was disappointed that the right hon. Member for Tyneside, North (Mr. Byers) did not refer to that issue. I am sorry that I am making that point in his absence from the Chamber, because I welcome him back to speaking in the House. The Government have found it particularly difficult to resolve questions about the boundaries between political engagement and the role of a public servant.

I commend the Public Administration Committee, whose work on the public service ethos is extremely important. I remind the House that my right hon. Friend the Leader of the Opposition made an excellent speech yesterday—and my hon. Friend the Member for Woodspring (Dr. Fox) made an excellent speech today. The three of us have a shared background: we have spent most of our lives working in the public sector. That contrasts sharply with the majority of Labour Members who have contributed to the debate.

Those of us who care so much about the public service and its traditions are worried about what is happening to the civil service—the public service—and the degree to which there is a real erosion of its values and principles, so it is disappointing that the Government could not find time to introduce a civil service Bill, especially as the distinguished outgoing Cabinet Secretary, Sir Richard Wilson, made it clear in some of his valedictory speeches that the time had come to do so.

That point is closely related to the issues that we are discussing today. The challenge for public services is not about policies; it is about delivery, leadership and management. There is confusion at the heart of the Government about the nature of leadership in a public service for which, inevitably and rightly, there is political accountability.

I ask hon. Members to make a contrast with the way in which the BBC is managed. Nobody thinks that Greg Dyke's speeches are written for him by the Secretary of State for Culture, Media and Sport. The clarity of his role and his relationship with the people who work for the BBC contrast sharply with the problems faced by people in other parts of the public sector. We have heard far too many accounts of bullying, intimidation, blame culture, micro-managing and too many targets. Those are serious issues in the public sector, especially the health service, at present.

Health service managers are among the best public servants whom I have come across. Indeed, I should have declared an interest earlier, as I currently spend a lot of time in executive search, especially in the not-for-profit sector. Few charities would not give their eye-teeth for someone who had been an NHS manager to lead them, yet in the health service and in this place those managers all too rarely receive the praise and recognition that they deserve. When we get to the point where health service managers are found to have been fiddling the figures to please their political masters, everyone in the NHS and Parliament should take that very seriously indeed.

I welcome many of the initiatives that have been introduced. The extra money is an opportunity that the health service should seize with open arms. The national service frameworks and, after attempts at modification and improvement, some of the agencies and commissions for health audit and inspection, are making an important new contribution.

At the same time, however, it is important to let go and to trust the people who are leading the service. For that reason, I entirely disagree with the right hon. Member for Holborn and St. Pancras (Mr. Dobson). I do not doubt his commitment and I am sure that he does not doubt mine, but we see public sector leadership and management in a very different light.

I commend to the House Onora O'Neill's Reith lectures. She talked at length about what is happening in the public service, and about the appalling problems created by ever more targets, ever more micro-management and ever more audit. Since the Government came to power there have been 8,000 targets; the NHS plan alone introduced 400 targets.

The Government were criticised—gently—by Lord Simon of Highbury, who pointed out that Ministers have muddled ideas about accountability and responsibility and that politicians now see themselves not only as accountable for defining the overall direction and main objectives, but also as providing the services. He said: Ministers and civil servants should not, and cannot, be responsible for producing the desired outcomes. That is the job of managers of those services To quote Onora O'Neill: For those of us in the public sector the new accountability takes the form of detailed control. An unending stream of new legislation and regulation, memoranda and instructions, guidance and advice floods into public sector institutions. Many … will have looked into the vast database of documents in the Department of Health website, with a mixture of despair and disbelief. Central planning may have failed in the former Soviet Union but it is alive and well in Britain today. The new accountability culture aims at ever more perfect administrative control of institutional and professional life. She then went on to say how that is undermining professional satisfaction and commitment, and that it has become a distraction from the work that needs to be done.

We have heard a series of such comments. Charles Leadbetter, in the Demos pamphlet, talked of the centralised, micro-targeted approach. Will Hutton has also been making some important points—I hope that the Government will listen to him—about the plethora of institutions at the centre within the health service. There is the modernisation agency and there are different teams within the Government, such as the delivery unit. There is an endless brain drain up the service to the centre, instead of down into delivery on the front line. The perception remains that those who can, think. Time and again, career progression hinges on managing upwards rather than motivating and managing staff to deliver more efficient, high quality services. Plum jobs in the civil service remain in the private offices, and in the policy-making units in No. 10, the Cabinet Office, the Treasury and the Foreign Office.

We should welcome the opportunity offered by the move to foundation hospitals and see it as a move for the delivery of quality public services not only here but throughout the world. One of the frustrations of coming out of government was hearing the right hon. Member for Holborn and St. Pancras blaming public officials or, more likely, blaming those benighted Tory Ministers who had "led the country to rack and ruin" for the past 18 years, only to be asked to visit countries that were emulating examples of the new style of public service management. I am pleased that with primary care trusts and foundation hospitals we are returning to that example. It would be better if members of the Government had the generosity of spirit to recognise the origin of some of their ideas. I do not expect them to be nice to members of the previous Government, but they could have greater generosity of spirit towards people in the service. Ministers getting the credit every time something goes right and officials getting the blame every time something goes wrong is not the way to bring out the best in people.

Mr. Dobson

Can the right hon. Lady give a single example of my blaming any health service official when I was Secretary of State for Health? I cannot think of one.

Virginia Bottomley

It may have been after the right hon. Gentleman's time, but when the chief executive of the Bedford trust was fired, it caused a great ripple throughout the service. If he really wants to debate the matter here, I can inform him that many people in the service—including many of his political persuasion—felt that his treatment of Sir Colin Walker was extremely harsh because his ethos and values in the Cambridgeshire and East Anglia area reflected the NHS values of equity, efficiency, access and innovation.

Mr. Dobson

The right hon. Lady seems to forget that those on the Conservative Front Bench welcomed my decision to sack Sir Colin Walker, because he was doing a bad job.

Virginia Bottomley

I think that the right hon. Gentleman knows that one reason why I am leaving party politics is that I am less concerned about going backwards and forwards across the House in this vein; I would rather say what I want to say about the delivery of public services and the improvements that can be made in the national health service at a critical time.

A further omission from the Queen's Speech that is a great disappointment to many people is that of the mental health Bill, which the Secretary of State mentioned today. His failure to mention that Bill to the Queen is extraordinary, given that he managed to slip it out today. My constituents are bemused by the priorities—how we can apparently find more time to bring to a conclusion the question of hunting with dogs when we cannot find time for other legislation is beyond me.

My constituents would feel that I had failed them if I did not remind the House that 125 people are now waiting more than a year for treatment in west Surrey. They would feel that I had failed them if I did not say that another five criminal justice measures will not help with problems in Surrey and the home counties, where we have to lose even more police.

The Secretary of State constantly points to equality of outcome. There is a growing inequality of service, whether in social services, policing or the health service. We should welcome the opportunities that foundation trusts will provide to allow greater flexibility in pay and greater responsiveness to local people. I only hope that the Government will think carefully before they encourage the election of trust governors. Sir Cyril Chantler and many others have talked of trusts becoming more like universities. If governors are to be elected, it may bring a whole different agenda to their leadership and management. People are reluctant to become involved in elections at present. I fear that many of the most distinguished trust and health authority chairmen, as well as many chancellors of universities, will not be prepared to stand for election. I welcome the trusts, but I hope that hon. Members will think carefully about their governance.

4.6 pm

James Purnell (Stalybridge and Hyde)

Pensions are often a dangerous subject. One of our colleagues spoke to members of Age Concern recently and told them that pensions was an important subject because they did not have much time left. After that, the audience gave him a rather hard time.

The cruel irony of the health inequality figures is that my constituents in the north-west literally have less time to live than people in other parts of the country. Life expectancy in the north-west is about five years lower than the average in the rest of the country. Indeed, The Guardian reported this week that Manchester is the most dangerous place in Britain to live.

It goes without saying that the national health service is one of the great creations of any Government in this country. Since the 1950s when it was created, however, health has not improved in the north-west according to many indicators. One reason is that we have spent much more money on acute services and hospitals than on primary care. Recently, I met primary care workers from my constituency and I was extremely impressed by their dedication and professionalism. They pointed out that until we have a big shift in resources from curing problems to preventing them, we will not be able to deal with health inequality. I hope that we will see more attention paid to that in these reforms of the health service.

We will be able to tackle health inequality only if we have a health funding formula that reflects the problems. At the moment, the formula does not reflect deprivation or health problems. I was encouraged to hear the Secretary of State say that the new formula will take that into account when it is published and I look forward to that being the case.

Unlike my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), I support foundation hospitals, and I make no apology for that. It is a deception to say that we have had only one tier of hospitals. There has been a great variation in the performance of different institutions. If we can have a mechanism that will encourage institutions to aspire to foundation hospital status, it may lift average performance throughout the service and everyone will benefit. Foundation hospitals could also be an engine for innovation, allowing things to be pioneered that are not possible in the rest of the service, which could then spread to the rest of the NHS. I would certainly welcome that.

The health service alone cannot tackle health inequality, which is caused by poverty, poor housing and basic lack of information on parenting and nutritional skills, among other reasons. My right hon. Friend the Member for Birkenhead (Mr. Field) has done some interesting research showing that many health and educational problems can be predicted by looking at children's birth weight and focusing on those whose weight at birth is significantly lower than average. I therefore find it incredible that Conservative Members seem to be saying that they will not support sure start—I give them the opportunity now to deny that. Sure start is aimed exactly at that problem of inequality—it gives people early parenting advice, as well as nutritional and health advice that can address that very fundamental inequality of opportunity. I am not surprised that no one from the Conservative party has stood up to deny that principle. As on so many other issues, their problem is not so much disunity as having made the wrong judgment on major policy issues.

The hon. Member for Woodspring (Dr. Fox) refused to say that he would match our spending commitments. Yet again, his defence was that he was not writing the health budget now. However, the Conservatives have already written their budget for defence spending; they have said that they will match the Government's spending. If they cannot say the same for health, the suspicion is that they have a hidden agenda of cuts.

It is not surprising that the Conservatives have fallen back on the tired idea of encouraging people to opt into the private sector. That is a counsel of despair. They have decided that as they will never be convincing on public services, all they can do is give a very few—the richer few—the ability to opt out of the NHS and go into the private sector. In that way, they are giving up on the right goal of improving public services in general.

The Conservatives have the same problem regarding spending on pensions. Since the last election, we have spent more on helping pensioners than it would have cost to restore the earnings link. We will continue to do so through the pension credit, which was supported by the Conservative members of the Select Committee on Work and Pensions and also by Lord Fowler. I am not sure whether the Conservative Members who are here will support that.

Mr. Goodman

Will the hon. Gentleman acknowledge that the Select Committee report was critical of the pension credit in some, though not all, respects, especially with reference to take-up rates, to which I will be referring later?

James Purnell

The hon. Gentleman has a good record of campaigning on these issues. He will know that the Committee welcomed the principle of the pension credit. It made some comments but they were, in my view, mainly on the implementation and the detail of the policy.

It is quite right that the pension credit is being introduced, because it is targeting the first major problem in pensions—the poverty of current pensioners. The second major problem is that workers are not saving enough, and I want to float an idea for dealing with that.

There is a growing consensus among some people that we should raise the retirement age to 70 to fund a much higher universal state pension. I do not share that view.

The recent YouGov poll showed that about two thirds of people were opposed to raising the state pension age. We must ask ourselves why. It may be all very well for people in sedentary occupations, like ourselves, to work beyond the age of 65, but it is the exception for those in manual occupations to work beyond the age of 60, and many do not work after 55. It would be difficult to persuade them that it was reasonable to wait another five years before they get their state pension. Nor am I attracted to the idea of compulsion. It is illiberal and poorer people would end up saving money towards a pension when they would be better off using it to spend on consumption today.

I should like to suggest a third way, if I dare call it that, between those two options—that of introducing a presumption to save. As in many 401(k) systems in America, we would have an automatic opt-in. People would automatically be included in a second tier of private saving. We would deduct from their salary a proportion of their income; that would be invested in private pension funds, which would be chosen and regulated as they are in Sweden by an independent pensions agency. Because of the size of those funds and because their recruitment and advertising costs would be low as they would attract members automatically, the pensions could operate with very low charges. In Sweden, they expect charges to be somewhere between $25 and $40 a year. That is significantly lower even than the current limit in stakeholder pensions.

Under that system, people would have a proportion of their salary deducted to put into saving for a pension. That money would go into safe investments which would be regulated and weighted towards low-risk investments, with low charges. If they wanted, people could opt out completely. If they wanted to spend the money on current consumption or to save in a riskier pensions vehicle, they could do so. It would not be a tax. We would be using the basic problem with the current pension system—inertia. People do not get round to saving, they are put off by charges and the choice on offer. Basically, they never send off the forms. Instead of inertia creating a problem, it will help to solve the pensions problem.

In the United States where this system has been tried, the evidence suggests that between 85 per cent. and 95 per cent. of people stay in the pension scheme to which they are automatically allocated. The evidence also shows that the policy is effective at reaching those groups that currently save less than they need to for a good income in retirement—women, part-timers, people from ethnic minorities and those in lower paid occupations. The system would be well targeted at the current policy problem—the lower and middle income earners who are not saving enough. It would not have the problem of illiberality, which compulsion does and because people would be saving from day one of their working life, it would reduce the need to raise the retirement age.

As the Government approach their Green Paper proposals, if they reject compulsion and raising the retirement age, people may be waiting for a big idea that will respond to the scale of the perceived problem in pensions. I think that introducing a presumption to save would be an effective way of targeting the real pensions problem of people not saving enough. I commend it to the House, and I commend the Queen's Speech to the House.

4.17 pm
Mr. Peter Lilley (Hitchin and Harpenden)

We have had some interesting, constructive and distinguished speeches in this debate, not least from my right hon. Friend the Member for South-West Surrey (Virginia Bottomley) and her counterpart, the right hon. Member for Holborn and St. Pancras (Mr. Dobson). I have to say, however, that of the 20 or so Queen's Speeches that I have heard in my time in Parliament, the speech made by the Prime Minister in introducing and defending the programme in the Gracious Speech was probably the worst$the thinnest, the least substantial and the one which contained the least attempt to justify any of the measures in the programme. At first, I wondered why that was so. I think that it is because the Prime Minister sees those measures essentially as pegs on which a headline can be hung by the complacent elements of our media, rather than as substantive measures to make real changes to the governance of this country.

I want to begin by speaking about health—rather rashly, perhaps, given that two former Secretaries of State for Health have already spoken. I spelled out in a recent ten-minute Bill speech, and previously in a Demos pamphlet, my views on the need to restore patient choice in the health service. Choice is the dynamic force which drives improvements in quality and efficiency when it is allowed to operate and people are given a choice between different suppliers. Unfortunately, choice within the NHS was abolished by the Government in 1999 by circular 117. We no longer have the right to choose a hospital other than that to which our local health authority, or health bureaucracy, is contracted to send us. We cannot choose to go to one with a shorter waiting time, with better outcomes, for a particular operation, or to one which is known to be cleaner or is more convenient for any reason.

When I put forward my proposals for restoring choice, they were, sadly, derided, by the present Front-Bench health team. They said that to restore choice in the health service would mean individuals running all over the country looking for better care or shorter waiting times. That is a bit rich, coming from a Government who subsequently have sent people running all over the Mediterranean on the same search. But today the Secretary of State invoked the language of choice and diversity of provision. Have the Government changed? Have they been converted? If so, no one would be more joyful than me. There is more joy in heaven-and in Hitchin and Harpenden—over the conversion of one sinner who repenteth than over 99 of my colleagues who need no repentance.

Dr. Tonge

I am a little puzzled, because I seem to remember that when the right hon. Gentleman's party ran the health service, although there was an internal market, the patient followed the money in the form of a contract from the health authority and had very little choice, except in the occasional extra-contractual referrals.

Mr. Lilley

Unlike the hon. Lady, I do not think that everything my party did was right and that we cannot learn from experience. I spelled out in my speech and pamphlet both the ways in which I thought that some of the changes that we introduced had unforeseen consequences which we did not approve of, and the improvements which should be made in future. I hope she will give credit for that rather than make silly, knocking points about the past.

I am not sure that the Government have substantively changed their policy on this issue, certainly not as much as I would hope. To harness the dynamo of choice within the NHS would need four things. First, there is the need to restore the right of patients to choose which hospital they are treated at. Sadly, there is no proposal to repeal circular 117. Secondly, we need to give patients information about waiting times, hospital outcomes, cleanliness and so on. There was no mention of that in the Secretary of State's speech. Thirdly, we have to make money follow the choice. Again, there is no reference to that in the financing mechanisms for new foundation hospitals or otherwise. Fourthly, we have to make hospitals genuinely independent. There was reference to greater independence for hospitals in the Queen's Speech and the Secretary of State's speech, but it seemed to be an element of typical new Labour tokenism rather than the mark of substantive change.

The Secretary of State spoke only about new control mechanisms and new accountability at democratic local level in addition to centralised control. There was nothing about greater freedom or replacing centralised control by local control. He said nothing about removing the application of the several hundred targets. My local hospitals have 248 targets applying to them. Are they to apply to foundation hospitals? The Prime Minister strongly defended the use of targets, so I must suppose they are. There was no indication of whether the ring-fencing of funds by Ministers for certain applications is to apply to local trusts. There is no indication whether the star-rating system is to apply to foundation hospitals.

It looks as though the Government are talking essentially about a change in local democratic representation on hospital boards, to which I have no objection—indeed, I am rather sympathetic to it, although I appreciate that there are enormous difficulties in working out where the electorate lies—but not about any serious independence for NHS hospitals.

In practice, we observe that the Government are in the business not of widening choice and diversity for patients but of narrowing it. Throughout the country, they are busy closing and merging hospitals. They always claim that such decisions are medically driven. Theoretical arguments exist that bigger hospitals may in certain circumstances provide better standards of care, but where is the practical evidence that those mergers and closures work and produce improved outcomes for patients?

I have repeatedly asked Ministers to carry out such studies. Indeed, there is a Minister on the Front Bench now whom I have previously asked and who has previously refused to give us that evidence or to commission research that would provide evidence of whether or not mergers which have taken place have worked. In Hertfordshire, we saw the merger some years ago—the hon. Member for St. Albans (Mr. Pollard) will remember it—of the accident and emergency and acute services of St. Albans with those of Hemel Hempstead.

Although I have asked for evidence repeatedly year after year, no evidence has ever been provided that a merger has resulted in the improvements in medical care that every consultant who advocated that merger said it would bring about. Now we are seeing more proposals for mergers and centralisation, including the closure of what remains of St. Albans hospital. We should have the evidence first, before we see any further mergers and closures.

I want to see a new teaching hospital in Hertfordshire, but not as an excuse or a way of dressing up the centralisation of existing capacity in one place. We are told that the proposal for a new hospital will simply siphon off capacity from existing hospitals and result in no extra beds.

In practical terms the Government are talking about choice, but they are reducing choice. They are talking about decentralisation but they are taking decisions centrally. In substance, there is still the bureaucratic centralism which the right hon. Member for Holborn and St. Pancras clearly still believes in and at least has the integrity and honesty to defend.

I welcome the constructive and interesting speech on pensions from the hon. Member for Stalybridge and Hyde (James Purnell). Pensions are in crisis, yet there is nothing in the Government's programme to deal with that. The Government ignore this issue at their peril. In my time in Parliament, the largest single postbag I have ever had was when it was rumoured that the Government were going to change the taxation treatment of pensions. It was larger than that received on any other subject in my 20 years here. People now are concerned because they are seeing the damage done already by the £5 billion tax change imposed on pension funds.

Kevin Brennan (Cardiff, West)

Did the right hon. Gentleman have a large postbag at the time of the Tories' mis-selling of pensions scandal?

Mr. Lilley

No I did not. That was partly because the regulator ensured and guaranteed that no one would lose from that scandal. I had a large postbag at the time of the Maxwell scandal when the hon. Gentleman's former colleague stole £500 million from the pension funds—a feat only ever exceeded by the Chancellor of the Exchequer, who steals 10 times that amount every year from current pension funds with his Robert Maxwell memorial tax.

We are told that the reason why the Government are not proceeding with any relevant measures is that they are looking for a consensus. That is usually a symptom of indecision or an attempt to silence criticism. Although many people think that our adversarial mode of parliamentary government leads an incoming Government to uproot everything that has gone before, that rarely happens. It has never happened with pensions. Governments have always built on the measures introduced by their predecessors rather than reversing them. Therefore, the Government do not have a need for a prolonged royal commission to achieve consensus. They should go ahead and act now to improve the current situation. They can be sure that an incoming Conservative Government will build on that rather than simply uproot any new measures that the Labour Government introduce. It will be our duty, however, to criticise the proposals that they put forward and that, I am sure, we will do in a constructive spirit.

4.29 pm
Ross Cranston (Dudley, North)

I had intended to contribute yesterday, but I fell off the end at 10 o'clock last night. I apologise to the respective Front-Bench spokesmen for the fact that because I did not anticipate being here today as well as yesterday, I will not be able to stay for the winding-up speeches.

I want to talk about the philosophical underpinning of important measures in the Queen's Speech. Because of the subject matter of today's debate, I shall illustrate that with references to the health service.

As has been the case for the past six years, the programme set out in the Queen's Speech continues a commitment to social justice. The objective is a more equal, inclusive society, where marginalisation is reduced and the vulnerable are cared for but where citizens have duties and responsibilities as well as rights and opportunities. Crucially, the programme continues to reflect the belief that Government intervention—notably, but not exclusively, in the form of public services such as the NHS—is necessary to achieve that objective.

Social justice and equality remain critical concerns because inequalities still exist in our society between socioeconomic groups, ethnic groups and regions, and along a range of dimensions that include income and wealth, educational opportunities and health. My right hon. Friend the Secretary of State mentioned the recent Office for National Statistics figures on health, and an independent inquiry into inequalities in health was chaired by Sir Donald Acheson. As a result of that inquiry, the Government last year announced two targets. The first target was to reduce the differences in mortality rates between manual groups and the population as a whole, and the second was to reduce differences in life expectancy between people in different geographical areas.

At its simplest, our reaction against such inequalities originates in the belief that it is unfair for people who cannot be held responsible for their poverty, physical disability, state of health and so on to be disadvantaged. The equality that we pursue is quite straightforward in some areas. An example is equality before the law, or when people are treated as being of equal worth. In other areas, we are dealing with equality of opportunity. However, there are circumstances in which it is not sufficient for everyone to be at the same starting post despite having different handicaps.

In yet other areas—such as protection against crime and access to good health care—equality has more to do with outcomes. However, it is important to stress that equality is not the same as uniformity, and that it is not always equality of outcome. Moreover, equality is not inconsistent with difference, or with the pursuit of and rewarding of excellence.

In his great lectures of 1929, which were later published in his book "Equality", R.H. Tawney made that much clear. He was passionate about achieving a more equal society, but he spoke about the need to respect excellence. He deprecated mediocrity. He argued that progress depended on the recognition of the outstanding, although he had contempt for unfounded pretences to it. There needs to be a balance between recognising difference and excellence on the one hand, and the pursuit of a fairer society on the other. It is against that background that we can better appreciate proposals such as the foundation hospital idea.

I shall turn from those philosophical underpinnings to deal with three themes that run through the Queen's Speech. The first theme is the economy. It is not surprising that the Queen's Speech should begin by setting economic stability as one of the Government's three main priorities. My right hon. Friend the Chancellor has delivered that stability, with inflation, interest rates and public debt all low. That economic success feeds through to higher employment, and to welfare assistance such as tax credits. Importantly for this debate, it has also fed through to the huge additional investment that has been made in the health service.

The second theme of the Queen's Speech is public services. We must invest in public services, but we must also refurbish them to ensure greater flexibility and transparency and greater responsiveness to the needs of consumers and patients. Public services have long had a role in ameliorating inequality. At one point in his lectures, Tawney says that the standard of life of the great mass of the community depends not simply on income from work but on the social income that people receive as citizens. As I have said, public services have to be financially viable. One of the challenges is to provide first-class public services that are affordable.

Another challenge is universality, which allows everyone in society to benefit, for example, from good health. One problem in redressing inequalities in service provision is that there is a burden of the past. My right hon. Friend the Secretary of State mentioned that, and the primary care trust in my area faces an immediate financial strain in meeting need because services have historically been skewed to other, wealthier parts of the borough.

Public service reform has to be at the core of the Government's agenda if the health service and other public services are to deliver a service that responds to individual need. One aspect of reform is countering the conservatism of bureaucracy. Not surprisingly, producers of a service are attached to the comfortable ways of doing things, even if that is not in the interests of the consumers of that service.

A second aspect of reform is the need to overcome the natural tendency of bureaucracies to operate as silos. There has been some discussion today about the need for health authorities and social services to deal better with the problem of delayed discharges. A third aspect is possibly the most important, and it involves liberating from the dead hand of bureaucracy the innovative health official or institution. Obviously, that entails consumers of public services—in the NHS, that means patients—having a larger say.

I have no philosophical objections to high-performing hospitals becoming foundation hospitals, as long as equality of access to good quality services is continued and the ethic of public service is maintained. We cannot go back to having a postcode lottery for public services. There is a need for high minimum standards around the country, enforced by targets and inspection. I particularly welcome the establishment of the commission for social care inspection anticipated in the Bill on health and social care reform.

However, I repeat that people who think that uniformity in the NHS is possible or even desirable are missing three factors. The first has to do with practicalities: it is simply not possible to control tightly from the centre an organisation as vast as the NHS, which in terms of size is a rival to the Chinese army or the Indian railways.

The second factor involves the health inequalities that I mentioned earlier. Unequal treatment is needed to address those inequalities. Thirdly, and as Tawney recognised, there is no philosophical inconsistency between social justice and the rewarding of excellence.

The third theme of the Queen's Speech involves responsibilities. Social justice confers rights and opportunities, but also imposes on citizens duties and responsibilities. In that respect, there has been an historical failing in our thinking. People such as Tawney recognised that rights involved duties, and they spelled out the implications for people with power and privilege, but they did not deal with the implications for people who benefited in a more equal society.

One area identified in the Queen's Speech where responsibilities are crucial is the welfare state. People have the responsibility to work if they can, and the responsibility not to defraud the system. Responsibility has links with social justice. On the one hand, we must make sure that people get a fair return and, on the other hand, we must deny rewards to those who cheat.

The notion that citizens have responsibilities is most evident in those parts of the Queen's Speech that deal with criminal justice, but the notion also has an application in the context of the health service. Patients have responsibilities— in simple matters such as turning up for appointments, for instance, and in more important matters such as access to particular services.

The three themes are linked. We need a sound and growing economy to fund the health service and other public services. In turn, good public services such as the NHS mean that trust in Government, and thus social cohesion, increases. Thirdly, the hope must be that that will generate a greater public-spiritedness and a renewal of civil society that will lead to a more socially just society. I recognise of course that that cannot be achieved by Government alone. It depends on a range of decisions by individuals in their vast network of everyday activities. The measures in the Queen's Speech will make a welcome contribution to social justice.

4.40 pm
Sir Michael Spicer (West Worcestershire)

Like the hon. and learned Member for Dudley, North (Ross Cranston), I want to talk about the relationship between the economy and public services, although the hon. and learned Gentleman will forgive me if I come to rather different conclusions from his, if I understood them. I suppose that I am more of a Trevor-Roper man than a Tawney man. Before I forget, Madam Deputy Speaker, I ought to declare an interest as stated in the Register, in case it is necessary, although I do not think that it is relevant.

I do not believe that we can consider health and pensions without reference to the general state of the economy. That is particularly true given that the Government's primary solution, whatever they have said this afternoon, is to throw more money at the problem. The specific issue is the way in which the Government are funding the health service. If the extra money were really being spent on specific, discrete front-line investment projects, that would be one thing. But it is not.

Through a combination of private finance initiative funding, which has long-term expenditure implications, and wage increases, unstoppable spending increases are being set up which will have relatively little impact on the quality of services provided but will make enormous medium and long-term demands on financial resources. In that context, the firemen's dispute is highly relevant. If we assume, despite what the Deputy Prime Minister said this afternoon, that what will finally emerge is a wage increase of approximately 16 per cent. over two years, that would be four times the rate of inflation. The knock-on effect of that on the rest of the public sector will be enormous, and it will be largely the Government's own doing.

The fault has been to leave the impression that, especially in the health service, there are vast public resources slopping about for employees' taking. So enormous public sector pay settlements lie ahead. The question is whether the economy can afford them and how strong the economy is. The Government's answer is that the economy is very strong. We have heard the points made this afternoon. The Government say that we have low unemployment, low inflation, low mortgage rates and high earnings.

However, that is the veneer. Peel off the outer skin and a different picture emerges. Let us begin with Britain's competitiveness, and particularly her ability to pay her way in the world. This has been slipping very fast indeed, as IMD showed last week. According to IMD, Britain has just moved from 13th place in the world to between 16th and 19th. Part of the reason for that is that Britain's employment costs are rising rapidly. Until recently, we had the most competitive labour costs in Europe, but the UK is now superseded only by Germany and France. With the £8 billion in new national insurance rates biting in the new year, the British position will be further greatly weakened in Europe. Europe's position is itself weak compared with competitive areas such as the United States and the far east.

One remedy for high labour costs is high investment. Indeed, that is what sustained the United Kingdom in the mid to late 1990s. Recently, however, low net returns for investment, largely due to rising taxes and regulatory controls, mean that investment rates have collapsed. The effect has been declining rates of productivity. In fact, productivity rates have been weak since Labour took office, but recently they have become so bad that the Government no longer publish them in what is ironically called "Productivity in the UK"—a pamphlet that they produce once a year.

The impact of the decline in the competitiveness of the British economy is already being felt in our balance of payments. In 1997, the current account deficit was £1.7 billion. By 2000, it had risen massively to more than £19 billion and by 2001 it was more than £20 billion. No economy can continue to sustain this kind of haemorrhage without matching inflows of capital. Something will have to give. What will go first is the projected growth rate, currently forecast by the Chancellor of the Exchequer at some 2.5 per cent. per annum. That brings me back to public expenditure, especially on health.

The pattern of PFI-related expenditure and irreversible wage increases makes it highly unlikely that public expenditure will slow down as the economy declines. Indeed, the reverse is likely to be the case. So we will have exploding public expenditure and falling growth rates. That can mean only one of two things—rising public borrowing and with it rising interest rates, or rising taxes. As the Adam Smith Institute recently showed, taxes are rising faster in the United Kingdom than anywhere else in Europe.

Tax rises of such magnitude, especially rises in indirect taxes, which the Government have chosen, hit the poorest hardest. They also deter investment and enterprise and so further slow the growth rate. We have the classic socialist vicious circle—high taxes, low growth, higher taxes and lower growth. That is not so much boom and bust as bust and bust. We need the opposite—low taxes, high growth, high revenue take and thus even higher growth. We have in prospect the opposite—higher and higher taxes and lower living standards.

When they rumble the situation, as they probably will when the national insurance tax bites in the new year, the British people are likely to react angrily. In that case, the polls will look very different next year from the picture that they present today.

4.47 pm
Kevin Brennan (Cardiff, West)

In welcoming the Queen's Speech, I am pleased to see a Bill designed to meet the needs of the NHS in Wales. It is an example of devolution in action that there seems to be a guaranteed annual slot in the Queen's Speech for legislation specifically for Wales. The National Assembly for Wales does not have primary legislative powers, so it is welcome to see Bills introduced annually in the Queen's Speech.

We have heard some interesting speeches, and I shall focus on pensions. We have heard some thoughtful speeches about pensions—for instance, from the right hon. Member for Hitchin and Harpenden (Mr. Lilley), although I did not agree with all that he said, and from my hon. Friend the Member for Stalybridge and Hyde (James Purnell). My hon. Friend spoke of the "engine of change", while the right hon. Gentleman referred to the "dynamo of choice". I did wonder whether the dynamo of choice drove the engine of change—

Mr. Pound

Into the lay-by of lost dreams.

Kevin Brennan

My hon. Friend finished the sentence better than I could have.

We look forward to the Green Paper on pensions. They are not a quick-fix subject, although the right hon. Member for Hitchin and Harpenden seemed to suggest as much. My hon. Friend the Member for Stalybridge

and Hyde told me earlier that when Sweden wanted to change the law, it took 14 years to conduct a review. The Government are right to reflect and consult, and to move slowly and deliberately. Those who legislate on pensions in haste repent at leisure—and there might not be much leisure in retirement if the Government get it wrong.

I liked my hon. Friend's proposal—it could be called a third way proposal, which is hardly surprising, given that it came from him—to introduce compulsion with a small "c". People would be automatically registered with a pension scheme, but could opt out and consider alternatives if they thought that that scheme was not in their interests at that time or, indeed, throughout their working lives. There would have to be a proviso: they could not expect the state to pick up the pieces during their retirement if they chose that option.

There is an injustice in pension law, with which I hope the White Paper will deal. I am thinking of what happens to those with occupational pensions whose companies subsequently go into receivership and liquidation. That recently happened to workers at Allied Steel and Wire in Cardiff—and to Allied Steel and Wire workers in Sheerness, but obviously I was particularly interested in what had happened in Cardiff.

Some workers in that company were required, when they joined it or its predecessors—it had had various guises—to join an occupational pension scheme as a condition of their employment. They had no choice. Some have been with the scheme for well over 20 years, and are approaching retirement. They have paid 5 per cent. of their salaries into the scheme throughout that time. The company has made contributions, assuming that it was building a pension at an accrual rate of one sixtieth. It was assumed that those who retired after 30 years with the company—as many would have done— could reasonably expect half their final salaries, and a fair chance of security in retirement.

When the workers signed up to that arrangement—as I said, in some cases it was a condition of employment—they thought that they were signing up to something that would give them security in retirement. They did not think that it was a risky investment; they thought that they would be guaranteed a reasonable pension. What they did not understand, and what I think is little understood by those with occupational pension schemes, is that when companies go into receivership—as, sadly, they do from time to time—and the pension funds are wound up or frozen, their pension-holding employees may lose everything. It turns out that final-salary occupational pensions are not the risk-free, or low-risk, investments that those workers believed them to be, and that some of them might have done better to leave their money in building societies. Pensions should be about security, not risk.

It is bad enough to lose a job, but when those workers lost their jobs they suddenly discovered that, owing to recent sharp downward fluctuations in the stock market, the pension fund had fallen significantly in the last 12 months or so. The company had been meeting its minimum funding requirement, laid down in legislation since the Pensions Act 1995, but there was not enough in the pot to meet the needs of the deferred pensioners— the current workers who are not yet drawing their pensions.

Under current law, those who have made additional voluntary contributions are first in line and existing pensioners second, but the last in the pecking order for anything left in the scheme when a pension fund is wound up when a company goes into receivership are the existing work force. They are often the best and most loyal workers who have stuck with the company for decades and who will not have been laid off or sacked.

In the case of Allied Steel and Wire in Cardiff, the latest information that we hear from some members of the work force—we do not have hard and fast information, because we have not yet seen the interim report by the independent trustee appointed to wind up the pension fund—suggests that some of the deferred pensioners may end up receiving from the occupational pension scheme a pension that amounts to as little as 20 per cent. of what they might have expected from their final salary scheme if the company had not gone into liquidation. It is a jaw-dropping injustice for people to pay into an occupational pension scheme and face that prospect after being loyal workers in a company.

Worse still, under the current system, if such people are concerned about what is happening and write to the independent trustee who is appointed to value the fund, purchase the annuities for existing pensioners and do whatever is necessary to wind it up, he will charge the fund £300 for his reply. In some cases, the independent trustees of smaller occupational pension funds that have been wound up have depleted the bulk of the resources, leaving the workers with nothing. There is no limit on what the trustees can charge for their services. Very few companies engage in such work, so they can charge whatever they like. Their position is the only example I know of one in which the person who is appointed can write their own cheques for as much as they like in return for doing the job. There is every incentive in the system for trustees to prevaricate and drag their heels.

Another injustice is the way in which occupational pension funds are used to provide early redundancies, especially for those in management. In the case of Allied Steel and Wire, two of the company's managers, who had inside knowledge of its financial status, left less than a year before it went into receivership, taking with them a large chunk of the pension fund. Those people, who are in their 50s, are now back in employment, working as consultants in highly paid positions, leaving the workers with nothing.

I had thought that it was shareholders and the banks that lend money to companies that are supposed to bear risks. In this case, however, the people who bear the greatest risk to their livelihood in retirement are the workers. That cannot be right, and I hope that the Government will put it right. The pension fund does not even have secured status when it comes to seeking the money that is to be paid back. That cannot be right and is a fundamental injustice.

I hope that, when the Government publish their Green Paper on pensions, they will consider that issue closely and ensure that what they publish is about security and fairness in retirement for workers, and not insecurity and injustice of the sort that has been suffered by the steelworkers from Cardiff.

4.59 pm
Mr. John Butterfill (Bournemouth, West)

The debate on the health service has been interesting. I believe that foundation hospitals are a good idea provided that they

are given the opportunity of raising their own money. The proposal to constrain them means that the exercise will not be as good as it might be.

The Government were probably wise to drop the proposal for those with severe personality disorder. The prospect of Members of Parliament legislating to detain compulsorily people with severe personality disorders might be viewed in some quarters as resembling turkeys voting for Christmas.

I want to concentrate on pensions. I am sorry that I missed the speech of the hon. Member for Stalybridge and Hyde (James Purnell). I gather that his contribution was interesting and I shall take care to read it. The hon. Member for Cardiff, West (Kevin Brennan) also made an interesting speech in which he mentioned some subjects to which I shall refer, albeit briefly.

I disagree with the hon. Gentleman that the Government were right to take their time. The pensions problem has existed for a long time. The Government have been in office for five years and they have been much too dilatory in dealing with it. If the health service is in crisis, the pensions system is a disaster. It needed much more urgent attention than it received. The Sandler and Pickering reports have been belatedly published. They should have been produced a long time ago. I look forward to the Green Paper, but I should have preferred to look forward to legislation in this Session.

There are two crises, the first of which is in occupational pension schemes. Why is there a crisis? It is partly due to the regulatory burden on pension providers—that is, employers. That is partly our fault because some of the provisions in the Pensions Act 1995 imposed unnecessary burdens and that needs to be redressed. The crisis is partly due to FRS 17—the new accounting standard—which has drawn to shareholders' attention the true burdens of pensions on companies. However, it is mostly due to lack of funds.

The falling stock market has led to a serious predicament and, as my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) said, the Government's advance corporation tax changes are criminal. They bear a huge responsibility for the crisis.

As the hon. Member for Cardiff, West said, there is a severe problem when the schemes get into trouble. That happens for some of the reasons that I outlined. There is not enough money, and the schemes rely on the employer's continuing prosperity to sustain them. When they begin, there is no money, and employees and employers decide that if they stay together for 25 or 30 years, pensions will be provided. However, as the hon. Gentleman said, the hierarchy is wrong. Moneys should be withdrawn from partially completed schemes in proportion to the amount that people paid in, the length of time that they served and the amount that they can reasonably expect to take out. The nearer they get to retirement, the greater the difficulty of finding alternative employment or making up the contributions in another scheme.

The hierarchy should reflect the proximity of the employee to retirement and the amount that has been paid in over the years. An employee who was approaching retirement and had served less time would therefore get less than another who had served longer and paid in more. That is logical and fair and I hope that the Government will deal with that when they produce a Bill.

I also hope that the Government accept the need to provide incentives for employers to produce such schemes. Everything that the Government have done so far has proved a disincentive to the schemes. If we are to continue with final salary schemes, which are the best that most people can expect, the Government must reintroduce some form of incentive.

I come now to personal pensions—people's private savings where they do not have a company scheme. Here there has been a terrible loss of confidence among the public, most notably because of the difficulties with Equitable Life, but also many others. Again, the ACT changes and the stock market falls have meant that bonus rates are considerably reduced and people are wondering whether such pension schemes are really a good place for their money.

The other disincentive is the rumours about possible tax changes. The Government do no service to the industry by letting rumours float about that they are about to abolish the tax-free lump sum and higher rate tax relief. All that creates uncertainty in the eyes of those who are saving for their retirement.

There is a huge anomaly in any suggestion about the tax-free lump sum. The tax-free lump sum encourages people, many of whom should not do so, to take the tax-free lump sum to obtain their tax relief. In fact, the Government should be telling many people with smaller pension pots that they should put all their money into the purchase of an annuity, and then perhaps say, to offset the fact that they do not get the tax-free lump sum, that they should have a 25 per cent. reduction in the tax that they will pay on that part of the annuity that they might have taken as a tax-free lump sum. That is what happens elsewhere in Europe.

For example, the Spanish say that an annuity is largely a repayment of capital and only a small amount of it reflects interest earned by that capital. Therefore, they charge people on only 25 per cent. of their annuity; 25 per cent. becomes taxable income and all the rest is tax-free. That happens throughout Europe. Europe has much lower rates of taxation on pensions than on other forms of income.

If the Government want to encourage people to save for themselves, they will have to look at what happens elsewhere in Europe and take such action. The problem with pensions is that they are inflexible and a long-term lock up—30 or 40 years—compared with alternative forms of saving.

The difficulty is that many people prefer an alternative means of saving because they are not prepared to accept such a lock-up and the risks that are inherent in pensions. Many young people today put their money in buy-to-let properties. That has the beneficial effect of increasing the pool of properties available to let, but it also adds to instability in the housing market. A lot of buy-to-let purchases have forced up the price of property and contributed to a huge escalation in property prices. If, as it appears, some of the buy-to-let properties are now proving difficult to let because of over-supply, that may contribute to an artificially steep downturn in property prices. It has induced an element of instability in the property market.

The Government should consider all those aspects and urgently introduce legislation. I hope that once they have the results of the consultation on the Green Paper they will bring legislation to the House with all possible speed.

5.8 pm

Glenda Jackson (Hampstead and Highgate)

I endorse the remarks made by my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). Not only do I share his dubiety over the creation of foundation hospitals but we share constituency boundaries, we comprise the parliamentary seats within the London borough of Camden and we also share, in a sense, the health facilities that are provided in that part of north-west London, which are not exclusively within the borough of Camden. There is close working with Islington, and the Royal Free hospital in my constituency takes patients from Brent and Haringey and the whole of north-west London.

I shall not reiterate the points made by my right hon. Friend. I am concerned that the creation of foundation hospitals could have a deleterious effect on other hospitals. The hospitals that comprise health provision within my constituency in north-west London already work closely with each other and with other partners both within and without the NHS. I do not believe that the creation of a foundation hospital in the area of London that my right hon. Friend and I represent would necessarily achieve an improvement across the range of treatments for people who require them, whether they live in the area or travel to it every day to work.

I am also concerned about who will be the voters in this particular democratic process. I intervened on my right hon. Friend the Secretary of State to ask whether he could give more detail on what comprises localism, and he attempted to allay my fears about who would be the decision makers in the creation of a foundation hospital by pinning his faith on the ballot box. Well, I am no psephologist, but I have read sufficient reviews of general and local elections to know that a great many more Labour votes are required in certain parts of the country to return a Labour representative to the House.

In other parts of the country, a great many more Conservative votes are required to return a Conservative MP to the House. Of course, the Liberal Democrats believe that there will be no genuine representation of the feeling that resides in the country for their party and their policies until there is a complete abdication of the first-past-the-post system, under which people are sent to sit on these green Benches.

Dr. Tonge

Hear, hear.

Glenda Jackson

I share the hon. Lady's view, but that is not the point that I am attempting to make here.

It is not the case that everyone who lives in my constituency and depends on the NHS has the same quality or volume of voice on making decisions about the priorities for health care provision in that constituency. I very much welcome the changes that the Government have implemented in attempting to make the voice of the patient more pertinent and more directly heard by those who decide health provision, but we still have a long way to go to ensure that everyone has an equal voice. One of my concerns is that the creation of foundation hospitals, far from increasing transparency, openness and—that dread word in this context—choice, will have exactly the opposite effect.

I am concerned about choice because every year it is the big issue in educational provision in my constituency. My constituents who are parents believe that such a choice is in fact a right to the first choice of school for their children as they go into secondary education. All the schools in Camden are extremely good. All the secondary schools are invariably oversubscribed, and they all have waiting lists. That is the one issue that turns up every year when parents discover the truth that they have a choice, but no right, and we must examine it in respect of health care provision.

I can think of individuals and many groups that will campaign vociferously and vigorously for what they perceive to be their choice and, indeed, even their right with regard to health provision. If they win that argument—there is no bottomless pit of money, although I understand that foundation hospitals will be able to borrow—the pursuit of a priority health need by a particular group could have a deleterious effect on people whose health needs may be just as great, but whose ability to phrase their argument, capacity to make it, and access to those who should be listening are limited.

I am somewhat concerned about whose voice is listened to most closely in the still-hierarchical structure of the NHS. I am all for modernisation if it achieves an improvement of our public services, but I do not believe that the voice of a consultant carries equal weight to that of a hospital porter or a hospital cleaner. I am sorry, but I have never yet come across such a situation.

There is also not the same equality of voice when it comes to a patient who may be elderly, who may be chronically alcoholic, who may have certain personality disorders, who invariably smells, or who can be more than a little abusive when receiving care and treatment from hospital staff. I am not arguing that anyone who works in the NHS should put up with abusive treatment, be it physical or verbal, but fortunately our NHS is served by human beings and they can be as selective in their prejudices as in those areas that they wish to support.

If a foundation hospital is created, for example, in the area that I and my right hon. Friend the Member for Holborn and St. Pancras serve in this Parliament, other hospitals that are doing a sterling job and that may have not three stars but two could feel that their contribution had been diminished, demeaned and reduced. Their patients could easily feel that the quality of service that they as users of the NHS will receive there may not be as good as that at a foundation hospital a little further down the road. If funding, up to a point, and the prioritisation of services still depend on what general practitioners tell primary care trusts their patients require, and if patients say, "I do not want to go to hospital A because hospital B is a foundation hospital," despite the arguments that my right hon. Friend the Secretary of State has advanced, I can see there being a diminution in funds for those hospitals that do not achieve foundation status.

As we all must know, inevitably there would be poaching. We have seen poaching in every area of virtually every industry and business over past years. If foundation hospitals come into being, I have no doubt that managers, boards and the chief executives of hospitals, probably at the behest of their consultants, will attempt to poach individuals.

Dr. Murrison

Does not the hon. Lady agree that her dilemma may be resolved if the Government give us a proper timetable for the rolling out of foundation hospitals? If that timetable were tight, the issues that she is describing would not arise.

Glenda Jackson

I regard the hon. Gentleman's intervention as somewhat flippant. We are talking about major fundamental changes in the provision of health services by the creation of a new tier of hospitals. The Secretary of State pointed out that a much more detailed presentation of what will constitute a foundation hospital will be published, but I have been at some pains to point out that not everyone is as capable—by virtue not of a lack of intelligence but, certainly in my constituency, of not having English as a mother language, for example—of voicing their concerns. If there is going to be genuine consultation on the issue, that consultation must enable everyone who will be affected by the creation of foundation hospitals to voice their opinions. I deeply regret allowing the hon. Gentleman to intervene. [Interruption.] I am entitled to voice my opinion. If Conservative Members do not like it, it is their hard luck.

Centrally and essentially, my concerns stem from my perception that foundation hospitals will not present to users of the health service a more open, more transparent service, where they are genuinely in control and truly the drivers of the quality, type and range of health services that they require. I am open to argument. It would be nice if my mind could be changed by what the Government produce for us to view, but at the moment I am deeply suspicious. It seems that the move will create a two or even three-tier NHS. That is not what the NHS should be about. It is certainly not what a Labour party and a Labour Government should be about.

5.19 pm
Mr. John Horam (Orpington)

I am very glad to be called before I succumb to deep vein thrombosis, which might result from sitting on these Benches for a prolonged period. That would be particularly unfortunate during a health debate. However, I am sure other hon. Members have similar complaints.

A fortnight ago, the chief executive of my local hospital trust, the Bromley Hospitals NHS trust, held a meeting in response to the concerns of local residents about hospital treatment in the area. This was occasioned by an incident where a disabled and blind 87-year-old man who had had a series of strokes was kept waiting on a trolley for 32 hours in Bromley hospital. He was neglected to the extent that when his daughter arrived to see him on the day he died, he was lying in a pool of his own vomit. It is said that he spent his final hours praying to God for help—he got none from the local hospital. The hospital acknowledged that it had clearly failed in his case.

Although that case is a shocking example of what can happen, in terms of waiting times in accident and emergency it is far from unique. Indeed, at the meeting to which I referred, the chief executive responded sensibly by agreeing to set up a committee of hospital users and relatives to look at cases where hospital care had clearly gone inexcusably wrong. He has also implemented a number of welcome short-term measures to do with accident and emergency. This shows that managers in the health service, of which that chief executive is a fine example, are genuinely very responsive to the problems that they face. The difficulties are certainly no reflection on the staff, who are not only responsive but caring and hard working. The problem is that all too often hospitals are overwhelmed by staff shortages, particularly nurse shortages, and by poor facilities.

Bromley hospital operates on three different sites. Indeed, until a few months ago, Orpington hospital operated in prefabricated buildings that were built during the first world war. However, help is at hand as a new hospital is due to open next April. It is a happy coincidence that I was a Minister in the Department of Health when most of the planning took place, although I give the present Government credit for continuing with the plans and bringing them to fruition. The right hon. Member for Holborn and St. Pancras (Mr. Dobson) was Secretary of State at that time and I give him and the Government due credit for that. As he will be aware, there is one problem, however. The new hospital, which is a PFI hospital, has fewer beds than are now spread over three hospitals. We have already discussed delayed discharges, and as the present hospital has only one star, it is far from being a foundation hospital because of the number of cancelled operations, the readmission rates and the waiting times in accident and emergency to which I have referred. As a consequence, although there might be a shiny new hospital, the circumstances facing local residents may well be worse.

In addition, the plan suggested that the space that patients occupied should be turned into offices for accountants and administrators. As a consequence, I started a campaign, together with a local group, the community care protection group—a dedicated group of women who campaign locally on health issues—to save the beds in the Orpington hospital. Our slogan, not unnaturally, was "Beds not bookkeepers". It was rather obvious, but effective. As a result, we got 11,000 signatures and we were able to go to the primary care trust to present the case for keeping the beds.

Our first suggestion was that the beds be kept for intermediate care because, as health experts will know, there is a severe shortage of care beds and private care facilities. If we are to deal with bed blocking or delayed discharge, some intervening care facility must be available, and here was a hospital with beds in it that could be used for precisely that purpose. To begin with, the PCT was somewhat chary about the suggestion; possibly because it was entirely new and, as a result of the continual reorganisation of the bureaucracy of local health, had been in existence for only a few months and had succeeded another organisation that had lasted only a year. Therefore, the trust felt that it had to hang on and be careful before committing itself to something of that kind.

In the end, the PCT agreed that the beds in Orpington hospital should be kept open—for the purposes, possibly, of intermediate care—for 18 months, which will at least see us through the period until April 2003 when the new hospital is up and running. However, the fact was that it was only an 18-month reprieve, but the Bromley Hospitals NHS trust came forward with a better solution when it applied for inclusion in the Government's programme for diagnostic and treatment centres, a programme that the Government have been rolling out for some time.

Bromley was not in the first tranche but has applied to be in the second tranche, on which decisions have to be taken. I should be grateful if the Under-Secretary would convey to her right hon. and hon. Friends my request that a decision be made on the issue. Is Bromley Hospitals NHS trust to be included in the current tranche for diagnostic and treatment centres in south London? I understand that that is a possibility, and that Guy's is another candidate for the programme. I would like an indication this evening as to whether that decision will be made in the near future. We understood that the decision was to be taken in October; it is now November and we need a decision as soon as possible. In that respect, I pay due regard to the Government's decisions on these matters, which have been helpful.

As the Secretary of State said, investment is not the only issue; there are also the issues of recruitment and reform. I, too, welcome the fact that the Government are climbing out of Labour's long-held views about the need for institutions such as the NHS to be run in a monolithic, state-funded way with heavy trade union organisation. I agree that it is a step forward for Labour to move towards Conservative ideas of greater diversity of supply. That is sensible.

What I fear—and what, I think, the Prime Minister fears—in the light of the opposition we have heard today from the right hon. Member for Holborn and St. Pancras, and the hon. Members for Hampstead and Highgate (Glenda Jackson) and for Doncaster, North (Mr. Hughes), as well as in coded phrases from the Chancellor of the Exchequer and from trade unionists, is that that opposition will prevent the Prime Minister from going fast enough and on a broad enough basis to bring about the improvements in public services, and particularly health, that we desperately need.

5.29 pm
Mr. Kerry Pollard (St. Albans)

The hon. Member for West Worcestershire (Sir Michael Spicer) was complaining about the Tories' poll position. I have some comfort for him: I do not think that they can go much lower. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) mentioned the downscaling of my hospital in St. Albans and the shutting down of the accident and emergency department some time ago—10 years ago, in fact, when he was the Member for St. Albans as well as a Secretary of State.

I welcome the modernisation of the health service and the freedom that it may give to local hospitals, with devolution of decision making and local accountability. Our primary care trust is ready to take up that responsibility in the fulness of time. In preparation for this debate, I looked up how much money was given to our local health economy in 1996: just over £400 million. This year the figure is just over £800 million—double that amount. Outputs have not doubled, but some improvements have taken place and more will surely follow.

I visited my local hospital yesterday and went to the day surgery unit, which is very ably run by Sister Eileen Kent. She is willing and able to increase throughput so that more operations are done and there are more good outcomes. I also visited the minor accident and emergency unit that remains. The sister in charge, the consultant, Rita Dunkerley, is also pleased to add more facilities to what she already provides. The will is there among the health professionals, and all they want is the freedom to act.

A theatre and two wards were reopened in the hospital two years ago, and a planning application has been lodged for a new theatre to support the four that are already operating. I am sure that that will help with our waiting lists. There is also a plan to provide some much needed key worker accommodation on the site.

About nine months ago, our special care baby unit at Hemel Hempstead hospital was shut because it proved impossible to recruit staff. I am pleased to report that just yesterday, I received a letter from the chairman of our health authority saying that a midwife-led unit would be opened at the hospital to provide facilities for women expecting a low-risk birth.

We are about to undertake a second review of our acute hospital services—we had one three years ago, and I believe that inappropriate decisions were taken then. I hope that this time, the Secretary of State will make a more robust decision, looking to the longer term. There has been discussion about having a big new hospital, a centre of excellence, in the area. Two sites have been identified, one in Frogmore, in my constituency, and the other at the British Aerospace site in Hatfield. Recently, a third site—the old Harperbury mental hospital site—was suggested by Councillor Malcolm Macmillan. It is a huge site very close to the motorway, and should provide all the land needed for a big new hospital. We need extra capacity, and the new hospital should take care of that.

As the right hon. Member for Hitchin and Harpenden said, we want a new teaching unit, a medical school, at the university of Hertfordshire. Next week I will meet the vice-chancellor to further that aim.

I am concerned about outcomes, not about who provides the facilities. My wife suffers from debilitating arthritis and is waiting to see a specialist. I hope that she will be off the waiting list very soon, and will start some treatment. My Auntie Pam, who is very dear to me, is recovering from cancer, and I hope that, having had her sixth chemotherapy treatment yesterday, she will continue to recover.

Close to my constituency there is a BUPA hospital. BUPA stands for British United Provident Association—and provident is the right term to describe providing much needed additions to our national health service provision. It is a not-for-profit organisation that provides good services, and we should use it where we can.

Finally, I have a serious matter to draw to the attention of the Front-Bench team. A resident of St. Albans has been waiting 50-plus years for an operation to have his tonsils removed.

Mr. Pound

Fifty years?

Mr. Pollard

Fifty-plus years. My mum took me to Rochdale infirmary 50 years ago to see about having my tonsils out, and I have been waiting ever since. The hospital has since shut down, and I believe that my records have been lost. I have to report to the House that my tonsils are well now, so I am really pleased that I did not have them out. I commend this Queen's Speech.

5.35 pm
Dr. Jenny Tonge (Richmond Park)

What the hon. Member for St. Albans (Mr. Pollard) has just said shows what a useless operation a tonsillectomy was in many cases. How good it is that it does not happen quite so often nowadays.

Before I became an MP I spent nearly 33 years in the health service, and I can remember that there has been a minor or major reorganisation every year since 1974. That is why those working in the health service regard it as a bit rich for the Health Secretary to tell them that they must get used to change. There has been change every year for more than 20 years, and another one is not welcome.

It is certainly true that a lot more money has been put into the health service under this Government, and we welcome that, but as the hon. Member for Woodspring (Dr. Fox) said, unfortunately it has been accompanied by far more bureaucrats. Two thirds of the pages of the Health Service Journal are now occupied by advertising, whereas it used to occupy less than a third of the pages. The bureaucrats are setting up so many schemes, and have to employ so many people to fulfil the targets set by the Department of Health, that they are preventing money from reaching the patient. I wish that the Government would take that point on board.

An example of bureaucratic meddling recently occurred in my own area, in Kingston Hospital NHS trust. In August the chief executive was suddenly magicked away. The hospital needed refreshing, we were told, and he went just after the new strategic health authority was formed. He was the first health service manager I have come across in my entire career who was popular with all the hospital staff. They would do anything he wanted them to. The consultants supported him en masse, and the medical director resigned. What a fine decision that was from the top! In some extraordinary way, another chief executive has already been appointed without advertisement or interview. All of a sudden, someone was magicked up to fill that place. Such meddling from the top is absolutely outrageous.

The patients, too, are not very happy. I shall cite just one example. A year ago, a constituent of mine was given an appointment for a bone scan, which was to take place this month. She has just received a letter from St. George's hospital, saying that her bone scan cannot be done this month, and asking her to come back in November 2003. She will have had to wait two years for a routine scan that she needs. Things are not looking good. When I saw the Government's proposal on foundation hospitals, I must say that I thought it was quite a good idea. There is no question but that hospitals need freeing up; they need to be freed from the bureaucracy that is fed down from the top.

I am glad that I attended this debate because, as some hon. Members have said, it has been excellent. The right hon. Member for Holborn and St. Pancras (Mr. Dobson), my hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris) and the hon. Member for Hampstead and Highgate (Glenda Jackson) have made me think hard about this notion, and I should like to pose a few questions for those on the Government Front Bench. I am all in favour of pilot schemes. Let us choose a few foundation hospitals from all ranges—a good one, a middling one and a bad one—as the right hon. Member for Holborn and St. Pancras suggested. Let us see what happens in 12 months' time, and then spread the idea across the whole NHS, if it proves a good one. However, a two-tier system is a bad idea, for all the reasons that have been given by other hon. Members.

I remain extremely worried about the concept of membership of the proposed mutual organisations. As hon. Members have asked: who will be the members and who will be the voters? The local hospital for my constituency is in Kingston. Other hon. Members have talked about the crossover of patients between primary care trusts, many of which will place their contracts with different hospitals, so who will have ownership of those hospitals? Who will decide who can be members of those mutual societies? How long will it be before a charge is levied on people who want to be members of a hospital and they have to pay a membership fee? If a person is a member and a voter at a particular hospital—as if they were on its electoral roll—will they be able to obtain treatment anywhere they choose, or will they have to stick with that hospital? We need clarification.

Dr. Murrison

I, too, should like clarification. In her opening remarks, the hon. Lady said that there was too much change in the NHS and referred to her 33 years in the service, yet she went on to give a broad welcome to the idea of foundation hospitals. Does she want change or not? Although she is a Liberal Democrat, she cannot have it both ways.

Dr. Tonge

I fully appreciate the hon. Gentleman's comment. However, I was pointing out that people in the health service are thoroughly sick of change because there has been so much meddling. Nevertheless, they would welcome freedom from top-down management; there is no question about that. On this occasion I am speaking on behalf of colleagues and ex-colleagues in the NHS and not for myself or as a Liberal Democrat.

Hon. Members have observed that foundation hospitals in the south-east with a great deal of land would become rich, but that those riches would no longer be shared with the rest of the health service. However, what happens if foundation hospitals are mismanaged and get into debt? Will the Chancellor be happy to pay off those debts? Much more thought needs to go into such considerations.

During my years in the NHS, I served as chair of social services in the London borough of Richmond for five years, so I saw both sides of the divide and the constant buck passing between social services departments and health authorities. Because of my health service days, I have much sympathy with the Government's desire to get patients out of hospital beds quickly. For example, some social services departments make an absolute meal of home care packages and the process goes on for weeks and weeks. It should be speeded up and home care should be carried out by social services if it is within their resources.

Residential care is a big problem in the south-east, especially in south-west London. Local authorities should be given more time and more financial help to manage the movement of patients out of acute beds and into residential care. What happened to intermediate care beds? What happened to the plans for low-tech beds?

I shall not dwell on the mental health Bill. I am delighted that the Government are thinking again. Many changes are needed in mental health services, not least proper funding for the scandalous care in the community scheme, which rapidly became neglect in the neighbourhood. Before the Government even think about reorganising mental health services, however, we need proper funding not only for more psychiatric nurses and social workers in that field, but also for more beds. Everything will depend on their availability.

I am sure that we shall have further opportunities to discuss changes in mental health services, and as I know that other Members want to speak in this debate, I shall conclude my remarks. I do not envy the Government in their task. I know enough about the health service to realise how difficult the problems are. I share some interest in and have some sympathy with what they are trying to do, but they should think again—and hard—before they take the route that they propose.

5.44 pm
Mr. Stephen Pound (Ealing, North)

We have heard much that is wise and well informed this afternoon. We have also heard, from the hon. Member for Richmond Park (Dr. Tonge), an extraordinary description of the strange goings on in Richmond—a strange part of the world where consultants and chief executives apparently appear, reappear and disappear in a puff of smoke in what is clearly Hogwarts hospital. She described a circumstance that I have never before suspected, although I had often wondered what strange magic in the air made people vote Liberal Democrat.

Dr. Tonge

Given what has happened at Kingston hospital recently, Harry Potter would have been very useful. He would have made a much better job of it.

Mr. Pound

From the hon. Lady's description, I rather suspected that Lord Voldemort was in charge of the hospital.

Talking of evil, my hon. Friend the Member for Stalybridge and Hyde (James Purnell), the golden boy—in fact, the increasingly golden-haired boy—of a future Labour Administration, described foundation hospitals as the dynamo of change driving the engine of choice, or vice versa, using that graphic expression so elegantly enunciated by my good friend the hon. Member for Cardiff, West (Kevin Brennan). I take some issue with my hon. Friend the Member for Stalybridge and Hyde, as it is not good enough to say that foundation hospitals will enable best practice to spread throughout the national health service. There is nothing to prevent best practice from spreading throughout the NHS now. All one and two-star hospitals should by all means aspire to the higher tier, but I dread the thought of a replication in the health service of the scandal of sink secondary schools. I sincerely hope that that will not happen, and I have confidence that those on the Labour Front Bench will ensure that it does not. However, we have to put a marker down now.

I declare an interest, as the national health service and I were born together, in the first week of July 1948. I know what it is like to be 54 years old, fairly rocky, and in need of modernisation and an urgent cash injection. The important point is that although—as we did not have television in Fulham in those days—I am one of a great many children, my eldest brother, who was born in 1946, died at the age of three months and my next brother, who was born in 1947, also died at that age. I was born in 1948 under the NHS—one of the first children to be born under the NHS—and although it may not please all right hon. and hon. Members, I live in rude good health. I experienced the two-tier health service. I do not want to see it again.

I raised the subject of cross-charging policies between social services and health services with my right hon. Friend the Secretary of State for Health earlier. Many hon. Members have touched on that issue. Local authorities in London can be charged up to £120 per night for any patient who is what is colloquially known as bed blocking. Earlier, I mentioned the situation of the London borough of Ealing, where 38 patients who are the responsibility of the borough are still in various hospitals—Ealing, Hammersmith, Central Middlesex and Charing Cross—even though they are fit for medical discharge. That is not because of any idleness or lack of activity or interest on the part of the borough, but because we have lost more than 100 beds in independent nursing homes in the past year. That was caused by house prices in London, and we do not have any control over it.

The local authority faces the prospect of having to transfer £2.2 million to the acute hospitals as a result of something that is beyond its control. Ealing is performing well as a local authority, particularly in social services, but we have a £5.2 million overspend. Social services are demand led. One cannot tell people not to claim. Although there is a virement from central Government, we are still overspent because we have spent above the standard spending assessment. A substantial proportion of that overspend—about £2 million—is entirely due to elderly person placement costs, and cross-charging policies can only exacerbate that situation.

In his response to my earlier question, the Secretary of State referred, quite rightly, to the additional money that is flowing into the national health service. The figure works out to about 6 per cent. of additional funding in 2003–04. The trouble is that the local authorities will not receive these funds until the financial year 2003–04, but they are faced with a £120 per night per patient impost now.

Dr. Murrison


Mr. Pound

There was much talk earlier of the Swedish model, but before I move to the Swedish model, I will give way to the hon. Member for Westbury (Dr. Murrison).

Dr. Murrison

Does the hon. Gentleman share my concern that because bed blocking is particularly acute in London and the south, the transfer would actually represent a bed-block tax that would disproportionately affect London and the south of England?

Mr. Pound

I saw the hon. Gentleman stooped in the posture that I assumed to be that of the thinker. Had I but realised that he was crouching like a footpad to ambush me, I might have resisted his intervention. This is not a bed-blocking tax, and it would be absurd to describe it as such. It is a matter to which the Government must give their attention, and I have every confidence that they will.

The annual social services conference in October was honoured by the presence of the Secretary of State for Health, and there was much discussion of the Swedish model. May I point out some of the differences between that model and what we have been discussing today? In Sweden there was a two-year lead-in time before the proposals were implemented. In addition, local authorities had responsibility for a vast range of alternative provision, including direct commissioning of health care. There is very little exposure to the variable pressures of an independent care market—that simply does not happen in Sweden. So there are structural advantages in Sweden, plus the two-year lead-in time.

Sweden also has additional investment in sheltered housing schemes to increase capacity, because this is a capacity issue. Before we start referring to the model that was tried in Sweden, let us consider what else that meant. Bed blocking is ultimately about capacity; it is not about sloth, incompetence, medical malfeasance or local authorities not doing their job. I cannot believe that there is any right hon. or hon. Member in the Chamber tonight who has not dealt with the relatives of elderly people who have lived independently all their lives but suffer a serious medical operation and move to some sort of sheltered accommodation. They do not like this home, they do not like that one. They want the place that is closer to the bus route, near the post office or near the Royal British Legion. It is not simply a matter of placing person A in home B. A delay can often be the result of good practice, not bad practice. As long as there is that constraint of capacity, the time delay will exist and lengthen.

I have confidence in my right hon. and hon. Friends on the Front Bench. I know that they take cognisance of this issue and they have the intelligence to see their way around it. I hope that they will look at the report of the Association of Directors of Social Services. Its members have made a powerful presentation, which I know that the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears) has seen. It would be churilish of me to say other than that 99 per cent of the Queen's Speech was excellent. fine and represents a great future for the country I would just that one area to be addressed.

5.53 pm
Mr. Edward Garnier (Harborough)

The hon. Member for Ealing, North (Mr. Pound) is an example of someone who can make a speech that contains many serious points, but does not burden it with seriousness. I will leave the philosophy to the hon. and learned Member for Dudley, North (Ross Cranston). The speech of the hon. Member for Ealing, North was the more powerful for containing elements of humour. He is, if I may not quote Dr. Spooner, a shining wit.

I should like to talk about an aspect of the health service that was not dealt with in the Queen's Speech or in the remarks of the Secretary of State for Health this afternoon. I refer to national health service dentistry. I have been concerned about the absence of such dentistry in my constituency, particularly in Market Harborough, for about eighteen months. I have asked questions twice of the Prime Minister. Once was at Prime Minister's Question Time, either late last year or earlier this year, and I received no answer—or certainly no comprehensible answer—from him on that occasion. I intervened upon him on Wednesday when he opened for the Government in this debate. Again, it seemed that he was wholly incapable of getting to grips with the problem, which, I am afraid, his Government have delivered to my constituents. I asked the Secretary of State for Health about what he proposed to do about the absence of NHS dental provision in my constituency. He, too, has been unable to provide any sensible answer.

I was first alerted to the problem in July 2001 when the chief executive of Leicestershire NHS health authority wrote to me to say that the largest dental practice in Market Harborough was intending to deregister its NHS patients. From memory it had about 10,000 patients on its register. There was a three-month delay period for the notice to bite, so it was November until those NHS patients were taken off that practice list. As a consequence they either had to become private patients of that practice, which is expensive, or to search the county and over the boundary in Northamptonshire to find alternative NHS provision. That was not easy.

Leicestershire health authority let me know by letter that it would take the following steps. It was going to advise NHS Direct of dental practices in the Market Harborough area accepting NHS patients. There was one and it soon filled up. Sadly, this spring, that practice deregistered its NHS patients. The health authority said secondly that it would deal with calls received as a result of the letter that this particular dental practice had distributed and would provide information to patients on dental practices in the Market Harborough area currently accepting NHS patients. As I have said, that has proved fruitless. It said that it would advise other dentists in the area of the action that it was taking to ensure regular communication on progress in re-registering patients in the Market Harborough locality. Those were all well intended actions, but useless in their effect.

The position got no better between July and the beginning of this year. It is not surprising that I, as the constituency Member of Parliament, received many letters from people living in and around Market Harborough asking what I could do to assist them in finding an NHS dentist. Once again, in February, I wrote to the health authority. In March the director of public health of Leicestershire health authority told me that he had been able to reach agreement in relation to two further mini-personal dental service sessions based in Oakham in Rutland. I do not know whether he has ever looked at a map, but Oakham is not readily accessible by public transport from Market Harborough and is about 20 miles away. He told me that two practitioners had entered into an agreement to set aside a total of four hours a week to provide care of individuals with urgent treatment needs. The round journey by public transport from Market Harborough to Oakham is about four hours. He said that the service would be charged through NHS Direct and treatment provided under occasional treatment regulations. Together with the mini PDS scheme operating in Melton, 30 miles away, it would mean that sessions would operate on Tuesdays, Wednesdays, Thursdays and Fridays. He told me that the Melton scheme was operating and the Oakham scheme should come into operation by 27 March this year. That is all fine and dandy if one lives in Melton or Oakham, but if one lives in Market Harborough one can go and suck one's teeth.

One would have thought that after nine months, and questions to the Prime Minister and the Secretary of State for Health, the Department of Health might have thought that there was something amiss. It is not as though this is peculiar to Market Harborough. I do not suppose that anyone on the Government Front Bench listened to the BBC Radio 4 programme "You and Yours" on the Wednesday before last, but the hon. Member for Rossendale and Darwen (Janet Anderson), my parliamentary pair, raised a similar question about the provision of NHS dentistry in her part of Lancashire. The problem of the absence of NHS dentistry—or at least of the decline in access to it—is therefore not limited to south-east Leicestershire. I suspect that hon. Members will have encountered the problem in constituencies across the country.

I have been sent a paper prepared by the body currently looking after the provision of NHS dentistry in my constituency. The Melton, Rutland and Harborough PCT came into existence on 1 April this year. It published the paper in July, in an attempt to set out the background to the problem that I have described. It said that NHS dentistry was available in three ways—through general dental services, through community dental services, and through something called personal dental services. It said that there were short-term solutions, and that there were a number of future developments that needed to be looked at.

The long and the short of the matter is that the PCT had no funding to provide that important aspect of NHS provision that it felt under a duty to provide. The paper concluded by stating: An important factor that needs to be considered is access to funding to implement any of the above options. Melton, Rutland and Harborough PCT do not have resources, which can be easily allocated to primary care dental services. Funding would have to be sought from the Department of Health when the best way forward is identified. I cannot imagine why the best way forward—or any way forward—has not yet been identified. The paper added: We may also be able to identify funding through the LIFT initiative. The trust is providing some short-term solutions, but they are wholly inappropriate for Market Harborough, and the paper said that they do not cover the needs of the whole PCT population. In parenthesis, I should add that the PCT covers a geographical area that borders on Nottinghamshire in the north and Northamptonshire in the south, and covers almost all of eastern Leicestershire. It is a large rural area with a dispersed population, and it is no good for the Government, through their officials in the country, to say that setting up portakabins here and there miles away from Market Harborough is any answer to a real problem.

The paper concludes by stating: Longer—term solutions need resources that the PCT does not have access to. There is a national problem with the recruitment of NHS Dentists. Also we do not have the powers to mandate dentists to provide NHS services, so are dependent on a different approach to NHS dentistry being considered by the Department of Health. I have yet to hear from any Department of Health Minister what intellectual activity is going on to sort out this problem, or what communication they have had with the Chancellor and the Treasury about the funds that will be made available to ensure that the NHS can do its duty to my constituents. It is a picture of indolence and incompetence that I see when I recite the history of the absence of NHS dentistry in my constituency.

I concede that there are practical and other difficulties in arranging for the purchase by the NHS of private dental services, but something needs to be done—and done quickly—if the absence of NHS dentistry in any meaningful sense is to be dealt with in the near future. We cannot go on wishing that something may happen. We cannot go on "looking into the matter", as the saying goes, without some firm proposals being made in the near future.

I therefore ask the Government to use their best endeavours to rearrange the way in which my PCT is funded so that the NHS dentistry that my constituents pay for through their taxes can be provided to them. Like all other citizens of this country, they are entitled to access to the NHS for dentistry as well as hospital services. They are not getting that access, and they are being short-changed.

That is bad enough, but matters are made worse when one considers that, if we are not careful, children may not get into the habit of going to the dentist, with all the health consequences in later life that that will entail. I therefore urge the Government to get off their bottom and do something about this problem very quickly indeed.

6.4 pm

Angela Watkinson (Upminster)

I start by echoing the sentiments expressed by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill). A great opportunity was missed yesterday to address the looming crisis in pensions. It was a notable omission in the Gracious Speech that no mention was made of pensions, savings or benefit reform, which is needed urgently. The problem has multiple strands. The level of savings is now so low that many people are heading towards an impoverished old age. The withdrawal of pension fund tax credits by the Chancellor to the tune of £25 billion already—that is £5 billion a year over five years, and in fact it is worse than that because that funding would have been invested and would have grown—is the single most damaging contributory factor to the problems that beset both money purchase and defined contribution pension schemes. It is the worst stealth tax of all, with the possible exception of the council tax.

The London borough of Havering has historically been underfunded to the tune of £30 million, and last year received a 12.5 per cent. increase. As a result of the long-awaited review, which we all expected would benefit the borough, Havering now faces a worsening situation and another massive hike in council tax rates, possibly in the region of 30 to 40 per cent. Pensioners on fixed incomes will be affected worst.

Add to the withdrawal of pension fund tax credits the £1.5 billion a year shortfall in rebates on contracted-out schemes, and the current regime is unsustainable. People who have been making pension contributions during their working lives now receive pensions on retirement way below former expectations, and their standard of living is not what they had looked forward to or planned for. Add to that the urgent need to simplify the pensions and benefits system, which is far too complicated for most people to understand.

I often have people come to my surgery who have been utterly defeated by 40-page benefit application forms. On one occasion, an elderly couple came with their younger neighbours, who had attempted to assist them. The form had defeated not only the couple in question but their neighbours, and they had filled it in incorrectly. That put my elderly constituents in a worse position than they were in the first place because their application was rejected.

There is also a worryingly high level of personal debt in the country, running to several thousands of pounds per head. Rather than save, many people choose to spend not only the money that they have but money that they do not have. One wonders what prospects some borrowers have of ever becoming free of debt.

I am sorry that the right hon. Member for Tyneside, North (Mr. Byers) is no longer in his seat, because I would have been happy to assure him that there is nothing elite about this Conservative. I was brought up as what used to be quaintly known as respectable working class. I think that the respectable bit referred to not getting into debt, paying one's bills and managing one's budget, however small it was. I remember debt being something that was whispered about. Banks required references when people sought to open a bank account, to ensure that the account holder was of good standing. These days, we are all plagued by unsolicited offers of credit cards and loans, with little or no investigation as to the ability of the person to repay.

There must be countless people who are heading for an impoverished retirement on an inadequate pension, with debts that will have to be settled from their estate, if they have one. The problem of estate values in Upminster may not apply because property values have rocketed in recent years, but I have many pensioners who are asset rich and cash poor. They have never been rich. Many have earned only modest incomes during their working lives, and they are house owners only as a result of a lifetime of hard work, prudence and making economies—of turning out lights, turning down heating to save on electricity and gas bills and not going to the pub. Home ownership has not come easily to them, but has come from the constant struggle to keep heads above budgetary waters. Many find this struggle difficult to sustain in retirement, as huge increases in council tax hit fixed incomes hardest.

Moving house to realise capital is not an attractive option for elderly couples, still less for individuals, who have lived for decades in the same familiar home, of which they are rightly proud.

The number of elderly and disabled people who approach me for advice is increasing all the time. The Department for Work and Pensions does not provide a local pension office; instead it uses local voluntary organisations such as citizens advice bureaux, Age Concern and, in Havering, the Havering Association for People with Disabilities, which runs advice surgeries.

That is a positive step in one sense because it makes venues more accessible in the community, but no funds are available. The Havering association has only £18,000 in core funding. It seems very unfair that small local charities helping their communities should be expected to subsidise the Department. The association loses income by making a room available for an advice surgery that would otherwise have been let to another group at a charge.

I hope that the Department will consider transferring some of the savings made from not running local offices from its petty cash or its paper-clip fund to help small local charities like the association, which are providing services for local people. The Government must take up the challenge this year: they cannot afford further delay. They must now simplify the system, enabling and encouraging more people to provide for a secure old age.

6.11 pm
Dr. Andrew Murrison (Westbury)

Let me begin on a positive note, by welcoming the omission from the Queen's Speech of the threatened mental health Bill. I hope very much that the illiberal measures it would have contained will never see the light of day. What a pity that the much-needed overhaul of the Mental Health Act 1983 has been delayed by the Government's disappearance down a rabbit hole of their own making!

The loose definitions in those proposals, the apparent intended role of Ministers, and the misconstruction of detainment as treatment were unhelpful and sinister. We do not summarily detain or disadvantage those in this country who seem odd or unusual on the pretext that they might pose a threat to themselves or others. If I may sound pompous for a moment, let me say that to do so would be distinctly un-British.

I might add that of all the occupational groups I have encountered professionally and socially, ours presents itself as one of the greatest repositories of strange characters and odd behaviour. I am sure, therefore, that other Members joined me yesterday in breathing a sigh of relief.

The community care Bill reminded me of my own Bill to deal with bed blocking, introduced under the ten-minute rule. I am not about to confound the model that I proposed, which was based on a system that had been used quite successfully in Scandinavia. For what this is worth, it also found favour with Wanless.

The concept of cross-charging has merit, provided that it is construed in an administrative rather than a punitive way. At its heart must be a redistribution of resources from hospitals to less glamorous sectors. The reimbursement scheme suggested by Ministers must surely involve the expectation that fines will be levied on social services departments. They cannot "magic up" facilities in the community. Such fines will, I suspect, become part of the normal exchange between health and social care departments, and will have to be financed by central Government rather than—as I suspect is the intention—through council tax, at least in part. Otherwise, council tax payers would effectively underwrite, among other things, the loss of nursing home beds over which the Government have presided. The bed-block tax would of course apply unequally, with the south shouldering a particularly heavy burden, given the amount of bed blocking in London and elsewhere in the south.

The Secretary of State's assertion on 18 April that fines imposed on hospitals in the event of emergency readmission would stop them from discharging people too soon was disgraceful. Bureaucrats may think like that, but if the Secretary of State seriously believes that dedicated health care professionals would be motivated by incentives of that kind he gravely misunderstands what motivates those at the coal face of the NHS. My ten-minute Bill has, of course, sunk without trace, but its intention was to keep clinical decision making at arm's length from administration. In the context of reimbursement charges I believe that that is an important safeguard for clinical care—albeit one that looks increasingly naïve in the "command" NHS favoured by the Chancellor, if not the Secretary of State.

Ministers might also like to reflect on why emergency readmissions have increased. Could the reason be that people are being inappropriately placed as the number of available nursing home places shrinks? If so, acute units could rightly claim that readmissions were the fault of social services or social service structures, and fining hospitals on the over-simplistic basis that they are wholly responsible would therefore be inappropriate. I urge the Secretary of State to think twice about that incentive.

The Government's proposals include an incentive that health care professionals will willingly observe. It is a perverse incentive that acts in individual patients' best interests. If the quickest way to get a patient the community care that they require is to admit them to a district general hospital, with the consequential imperative for social services to avoid a fine and get cracking, let us be quite sure that GPs will admit them. I believe that that would wind back general practice several decades and that it would no longer enjoy its current position, which we would all celebrate. Once again, district general hospitals would be the nexus of health care provision in this country. That would be highly regrettable both for patients and professionals.

The flip side is that people who were not admitted through district general hospitals, for whatever reason, would be ascribed a lower priority. Effectively, the only gateway to services might become the DGH. I am sure that there are ways of moderating those effects and I would be very interested to hear about Ministers' plans in that regard.

The NHS Confederation is right to point out that the Government's timing is over-ambitious. It is also concerned about the lack of adequate piloting, which means that Ministers are taking a remarkable leap of faith. Unfortunately, Christmas is almost upon us and we are told that the systems that are necessary to implement the reimbursement system must be in place by Easter. I welcome the Government's sense of urgency; bed blocking is a tragedy both for the poor, hapless bed blocker and for the thousands whose admissions are cancelled because of lack of room. However, I believe that the NHS Confederation is right to counsel caution.

The Bill on health and social care reform brings forward grant-maintained or foundation hospitals; one can call them what one likes. They are a nice, if unoriginal, idea, but the devil is in the detail. One of the two DGHs that serve my constituents is unlikely to be in Ministers' sights. The clinically excellent Royal United hospital in Bath is acknowledged as an administrative disaster area. It is on such hospitals that I expect Ministers to focus first and foremost. I would oppose strongly anything that would drag resources and personnel from trouble spots such as Bath. For me, that is the priority and I hope that it is the priority for Ministers too, although I see little evidence of that in yesterday's proceedings. I wonder how the Secretary of State would address the leaching of top staff from, let us say, Bath, to the highly starred and potentially foundation Gloucestershire Royal hospital, given the pay competition that he proposes to introduce into what remains a monopoly sector.

My quest for bias not towards the swept up, but towards the struggling, is not purely parochial. I am pleased to have an unlikely ally in the right hon. Member for Holborn and St. Pancras (Mr. Dobson). I was fascinated to hear that foundation hospitals would have elected representatives on their boards. Having struggled through the National Health Service Reform and Health Care Professions Act 2002 and tried to identify who on earth we would get to volunteer for patients forums, I do not know where the Secretary of State thinks he can get people who will be willing to serve on the boards in the numbers that he expects.

It was remarkable to hear the comments made by many hon. Members about the likely composition of the boards, which will, of course, be middle class. Voluntary organisations throughout the country have middle class members. Indeed, they overwhelmingly populate our voluntary organisations and that will be the case in respect of the new measure, if it is adopted. With respect, however, making such criticisms in the House is a case of the pot calling the kettle black. The House might like to look at itself before criticising volunteers throughout the country who will presumably be called on to serve on the boards of foundation hospitals.

The NHS Confederation is worried that foundation hospitals appear to constitute the Government's flagship health service reforms. It is right to worry. The organisation shares my view that we should not view health care as bricks, mortar, beds and hospital buildings or even as surgical operations, but refocus on managing chronic disease and the clinical networks necessary to do that. We should be less exercised and constrained by the administrative boundaries that have been the hallmark of the Government's stewardship of the NHS.

6.20 pm
Mr. Paul Goodman (Wycombe)

In my constituency lies Hughenden Manor, which was once the home of Benjamin Disraeli. Disraeli spoke of two nations, the rich and the poor—or the vulnerable, as Conservative Members might say nowadays. I want to speak about poverty in relation to the Queen's Speech.

No Conservative Member should doubt the commitment of the Government in general and the Chancellor in particular to relieving poverty and social exclusion. The main means that the Government use to achieve that are programmes that appear to be devised in and controlled from the Treasury, and targeted at people whom the Treasury or Downing street identify. It would be churlish not to acknowledge that some programmes have played a part in providing opportunity and inclusion.

However, it would be foolish not to acknowledge that the regime of centralised command, which controls most programmes, has flaws and, indeed, a fatal error. I hope to have time to consider that later. I want to concentrate on three aspects of the flaws. The first weakness involves means-testing and the take-up of benefits. I know that that is a theme that has often preoccupied the right hon. Member for Birkenhead (Mr. Field), who is in his place.

Up to a third of all benefits are means-tested. That particularly affects pensioners, for three reasons. First, many pensioners do not realise that the benefits exist. In my constituency, that applies especially to pensioners from ethnic minorities, many of whom speak English as a second language or perhaps not at all. Secondly, some pensioners, especially older pensioners, are too proud to claim. Thirdly, as my hon. Friend the Member for Upminster (Angela Watkinson) said, some are simply confused, baffled and frustrated by the sheer number and depth of the forms that they have to complete. Anyone who doubts that is welcome to accompany me to a meeting with the Wycombe citizens advice bureau, which has to advise pensioners in difficulties.

The consequences are apparent in the figures. Between 1979 and 1995, the proportion of pensioners on means-tested benefits fell from 57 per cent. to 38 per cent. However, according to the House of Commons Library, the proportion will increase to between 56 per cent. and 59 per cent. by next April. Last year, almost 600,000 eligible pensioners were not receiving income support; more than 200,000 eligible pensioners were not receiving housing benefit, and more than 1 million eligible pensioners were not receiving council tax benefit. Pensioners who do not take up such benefits tend to be older and women. They are the principal victims.

Next April, the new pension credit will be introduced and the Government estimate a 67 per cent. Take-up rate by 2004. Even the Department of Health described that target as "ambitious". However, there is no firm proposal for hitting the target. I should like to quote from the report of the Select Committee on Work and Pensions, on which I serve, which is dominated by Labour Members. The report states: We were concerned about the Department of Work and Pensions' inability to produce reasonable estimates for such an important figure as the take—up of a key Government benefit. I appreciate that the Minister is short of time, but will he tell us when we can expect to see the income-related benefit take-up figures for last year? They are normally issued in September. Alas, there is nothing in the Queen's Speech to ease the burden of means-testing.

The second weakness of centralised control involves area-based regeneration. I shall list six of most deprived boroughs in the country and state the number of schemes in them to help local groups relieve poverty. Manchester has 22 schemes; Tower Hamlets has 21; Liverpool has 21; Newham has 20; Hackney has 19, and Hartlepool has 18.

At this point, I want to quote the words of my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) in a debate on poverty in Westminster Hall earlier this year. He said: I ask the Minister to put himself in the position of a playgroup leader who wants better facilities, or of a community group leader who wants closed circuit television in a local park to protect playgrounds from vandalism…There is a strong argument for much more single-pot funding to make it easier for such groups to improve the environment that so many people who live in poverty have to put up with. "—[Official Report, Westminster Hall, 18 July 2002; Vol. 389, c. 145WH.] There is indeed a strong argument for more single-pot funding, but again, regrettably, I see few measures in the Queen's Speech that will permit that—and that leads me to the third weakness.

Last summer, the Select Committee on Work and Pensions produced its report on the Government's employment strategy. I would describe the biggest problem that it identified as that of low social capital. Those people who find it hardest to find and keep work are usually those who lack social capital—the connections and self-confidence that some of us take for granted. Many of those who lack social capital have not had the childhood love and security that some of us are prone to take for granted, and it is often those who lack social capital who are causing the antisocial behaviour that was a theme of the Queen's Speech, as it was in 2000 and in 1997. A good appearance, punctuality, courtesy, and the ability to work in a team are the soft skills that help people to find and keep work. It was the lack of soft skills and the social capital that builds them up that the Committee identified as the biggest barrier of all to finding and keeping work. It is significant that the Committee stressed that the best means of allowing people to develop their soft skills and thereby build up social capital was to extend flexibility and local discretion in the provision of the schemes that help them.

As the Secretary of State and all hon. Members will know, one of the themes of all three main parties during the party conference season was devolution, but it is becoming increasingly clear that the only real way of extending flexibility and of building up the social capital the lack of which is at the heart of so many of our problems today is a radical programme of devolution. I do not see the breaking of the regime of central command anywhere in the Queen's Speech.

If there can be a social exclusion unit and a neighbourhood renewal unit in the Office of the Deputy Prime Minister, why can there not be at the centre of Government, as the Conservative party suggested at the last general election—my hon. Friend the Member for Havant (Mr. Willetts) is on the Front Bench and I hope to hear that suggestion raised again—an office of civil society or equivalent that would take the lead in devolving power to the local councils, charities, schools, clubs, faith institutions, voluntary groups and communities that are best placed to build up the social capital that we need?

There is a paradox here. It is curious to be calling for another Government office to solve the problem of devolution, but only the centre can devolve power from the centre and there needs to be an engine in Government to do that. The Treasury is not that engine. We are not getting the devolution that we need to build up the kind of one nation society to which Disraeli was looking forward, and I am only sorry to say that such measures are not in the Queen's Speech.

6.28 pm
Mr. David Willetts (Havant)

We have had a lively debate on the Queen's Speech, during which I think 20 hon. Members have spoken. Interventions have ranged widely, and I hope to comment on a few of them, but what has been particularly striking is that no fewer than four previous Secretaries of State have spoken. It is a bit like those wild west movies where the old gunslingers come out of retirement for one last appearance—in this case, out of retirement as Ministers, I hope not as Members of Parliament.

I was struck by the contrast between the interventions by the four previous Secretaries of State on the Conservative and the Labour Benches. My right hon. Friend the Member for South-West Surrey (Virginia Bottomley) spoke about her concern about the state of the health service. We also heard from my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley). My right hon. Friends' speeches were striking because of the two themes that emerged: my right hon. Friend the Member for South-West Surrey referred to trusting the professions and the importance of allowing professionals to exercise their medical judgment, while my right hon. Friend the Member for Hitchin and Harpenden spoke about patient choice. Of course, we believe that those two themes together are the way to raise standards in our NHS. We think that the dynamism achieved by the combination of patient choice and professional freedom produces the best possible patient care. My right hon. Friends' two speeches referred to the true and best way to raise health care standards—what a contrast they made with the speeches by the two Labour former Secretaries of State, whom it is good to see in their places.

The right hon. Member for Tyneside, North (Mr. Byers) spoke for new Labour, while the right hon. Member for Holborn and St. Pancras (Mr. Dobson) spoke for old Labour. They were indeed the smooth man and the hairy man. Strikingly, whereas our two former Secretaries of State combined provided a coherent alternative approach to the NHS, the right hon. Member for Tyneside, North, in what he described as his first intervention from the Back Benches for many years, produced a lot of rhetoric about new Labour, but not much reality as to what it means in practice.

The right hon. Member for Holborn and St. Pancras, speaking as one who was Secretary of State for Health in this very Government, gave a critique of the Government's health policies. It was hard to follow exactly what he proposed, but he seemed to say either, "Do not do any of it," or, "Do it properly so that all hospitals have the opportunity to enjoy the freedoms that are only on offer to 12 elite hospitals"—if I remember correctly the expression that he used in an article in The Observer recently.

We believe that the right way forward is to give as many hospitals as possible as soon as possible the full freedoms that will supposedly be enjoyed only by the foundation hospitals. I do not know whether the Secretary of State follows films, but "Groundhog Day" is to be shown on Channel 4 at the end of this week. For those of us who were involved in the health reform debate in the early 1990s, it is "Groundhog Day" all over again: we are hearing all our arguments on the need for greater freedom for individual hospitals to run their own affairs.

When I heard the Secretary of State trying to answer all those specific questions, I was reminded of nothing so much as the arguments that we made on how much freedom we wanted to give to self-governing hospital trusts. The right hon. Gentleman could do a lot worse than simply re-publish our consultation documents on how much freedom we wanted to give such trusts, which the Government abolished and are now to reinstate.

James Purnell

The hon. Gentleman is referring to his time as an adviser to the Conservative Government. In April, I asked him whether he would apologise for the fact that, when he advised that Government, the income of the bottom 10 per cent. fell by 17 per cent. in absolute terms. He said that he did not recognise those figures. Does he recognise them now, and how does he square them with his commitment to the vulnerable?

Mr. Willetts

If the hon. Gentleman is talking about the absolute income of the poorest members of our society, and if we are to measure that in the way that the Prime Minister now wishes to measure it—in other words, considering not the measure of poverty with which the Prime Minister began, but median income in 1997 and whether more or fewer people are poor against that measure years later, which is what he now talks about—I believe that, on the Prime Minister's chosen measure of poverty, we succeeded in reducing poverty during our period in office. If the hon. Gentleman wants to use a relative measure, we can argue about the case for relativity; if he wants to use the Prime Minister's preferred measure, I think that we have a proud record.

I want to speak briefly about the health agenda before discussing welfare reform. On our Front Bench, we have at least one new health spokesman—I welcome my hon. Friend the Member for Billericay (Mr. Baron) to his post—and that shows how much talent we have on this side of the House. We have fresh faces who will carry forward the battle—[Interruption.] I also welcome my hon. Friend the Member for Epsom and Ewell (Chris Grayling), who has also joined our Front-Bench health team. We believe that more centralised control is not the right way to reform health. The way to improve the quality of our health service is to have greater freedom for hospitals. That must be the right way forward.

There are many Bills dealing with health in the Queen's Speech. There is also a Bill dealing with antisocial behaviour. I hope that the Secretary of State for Work and Pensions will be able to tell us whether his proposals on antisocial behaviour will include measures that concern the benefit entitlements of families who may be suspected of involvement in such behaviour. The right hon. Gentleman knows the history. At one point the Prime Minister proposed that child benefit should be taken away from families who were suspected of involvement with antisocial behaviour. It was one of those classic front-page "crackdown" stories. We all heard how the right hon. Gentleman was going to get tough on antisocial behaviour. Then he beat a hasty retreat. As often happens, it was the right hon. Member for Birkenhead who proposed an alternative that looked as if it might rescue the Prime Minister. The right hon. Member for Birkenhead said that housing benefit should be used instead, as it was the most effective device in using the benefit system to tackle antisocial behaviour.

Hon. Members on both sides of the House who have serious problems of antisocial behaviour in their constituencies know that one of the things that most concentrates the minds of the families who, sadly, seem to be responsible for such behaviour is the thought that if they carry on they may lose their house. None of us wants them to lose their houses, but the threat must be credible. If it is, it often leads to parents at last getting a grip on their children.

The right hon. Member for Birkenhead took the measure into Committee as a private Member's Bill. The Conservatives approached it constructively.

Mr. Frank Field (Birkenhead)

indicated assent.

Mr. Willetts

I am pleased to see the right hon. Gentleman nod. I want to hear from the Secretary of State whether a proposal for withdrawal of housing benefit from people who behave in an antisocial way will be part of the legislation on antisocial behaviour. Will there be a proposal on child benefit as the Prime Minister originally suggested, or have the Government completely given up on the idea of using benefits to tackle that serious problem? I hope that the Secretary of State will be able to tell us about that. The Conservatives have no objection in principle to using the benefit system as a lever to tackle the problem. We want to hear what the Government's approach is.

Although there is that measure on antisocial behaviour, we do not have anything in the Queen's Speech on pensions—I declare the interests that appear in the Register of Members' Interests. I hope that the Secretary of State will offer us some account of what policies he will put before the House to tackle the pension crisis. So far, we have had confusion and uncertainty about what exactly the Government will do.

We have had debates about compulsion. Some Ministers are supposed to favour compulsion, others not. Will there be any reduction of the tax incentives for people to save? It is good to see a Treasury Minister on the Front Bench as I ask these questions. Do the Government recognise that, especially at a time like this, we need to give people more incentives to save, rather than taking away the modest incentives that exist? Is the Secretary of State looking at other incentives to encourage people to save? Does he recognise the serious long-term effects of the spread of means-testing on people's incentives to save—something on which the right hon. Member for Birkenhead has spoken eloquently?

Mr. Field

May I ask the hon. Gentleman to move a stage backwards in his argument? When he asks whether the Government will move on compulsion, is he not posing the wrong question? We have compulsion in the system. The question is how should we levy that compulsion? At the moment, because previous Governments have failed to ensure that everyone has a decent pension, taxpayers compulsorily pay 5p on each standard rate of tax to make good that deficit. Surely the question before the Government is whether we should continue with that form of compulsion to add to failure, or switch the compulsion to build for success?

Mr. Willetts

The right hon. Gentleman has put forward ambitious proposals to compel people to build funded pension saving. As he knows from the many discussions we have had on the matter, I do not agree with his proposals—I shall not detain the House by explaining why—but at least he has made a bold contribution to the debate. So have organisations such as—most recently—the National Association of Pension Funds and the Association of British Insurers. The one voice missing from that debate has been the Government's. We have not heard what the Department for Work and Pensions plans to do about the crisis. We want to hear what the Secretary of State thinks he can do. That might be too much to hope for, however. It might be over-ambitious to expect the Secretary of State to have a policy on pensions, although I must say that in the conditions of this debate we could promise him almost complete secrecy. He could unveil a confidential draft discussion document this evening and I am sure that we could assure him that there would be absolutely no media coverage, but even if a promise of complete confidentiality is not good enough and the Secretary of State feels unable to offer us any policies, could we make two more modest requests? First, will he at least accept that there is a crisis?

One thing that we have found most frustrating as we have debated the subject over the years is the sort of approach that is captured very well in a quote from the Secretary of State's colleague the Minister for Pensions, who said in May, when quoting one of the many sets of figures on pension saving which were subsequently shown to be wrong: These figures emphasise that the basic structure of pensions in this country is right. It is reasonable to ask the Secretary of State whether he registers the scale of the problem. Does he plan to continue on working on the basis that the basic structure is right, that it does not need to change and that we should just tinker at the edges, or will he measure up to the scale of the crisis by proposing something big, bold and radical, which is what the crisis requires in order for it to be tackled? If I lower my expectations, and settle for the Secretary of State not offering a policy, will he at least offer some frank assessment of the scale of the problem?

Finally, if the Secretary of State is not going to offer us a policy or any assessment of the scale of the crisis, will he at least tell us how the Government propose to set about formulating policies to solve the problem? Will he at least tell us the framework within which he will set out the policies? Not only are we unsure about the Government's policies, we are not even sure about how they will unveil the policies that may emerge in future.

Kevin Brennan

Will the hon. Gentleman give way?

Mr. Willetts

No. I have only three minutes to conclude my speech.

We have had endless consultation documents—Pickering, Sandler and Myners. We have had various legislation too, yet we now have a debate in the press about whether there will be a Green Paper at the time of the pre-Budget report, whether there will be a separate Inland Revenue document and whether the Government will set up a royal commission. My view on royal commissions is that Harold Wilson put it very well when he said: Royal Commissions take minutes and waste years. We do not have the time to wait for a royal commission, but if the Secretary of State can offer a framework that we can work within to try to tackle the crisis, I will end with the assurance that Opposition Members recognise that this is a problem that can be solved only with longterm planning and on the basis of some recognition of the need for stability in future, just as I gave an assurance that we would not get rid of stakeholder pensions. When the industry came to us and said, "We need to know that stakeholder pensions will continue" we gave that assurance, despite our concerns about stakeholder pensions. I hope that the Secretary of State will set out at least the framework within which he will approach the problem. So there we are. I have lowered my expectations. I am not asking for a policy. I do not necessarily expect an assessment of the scale of the problem. Even an account of how the Secretary of State might set about thinking about how to solve the problem would in itself constitute progress.

I am sorry that I have not had time to comment on the many speeches from hon. Members on both sides of the House. I was particularly struck by the number of speeches from Opposition Members on the subject of health. I particularly enjoyed the contribution from my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) on pensions. I always listen attentively to him and to my hon. Friend the Member for Wycombe (Mr. Goodman) on poverty and social capital. We now look forward to hearing whether the Secretary of State can at least inch us forward by setting out the framework within which he will solve the problem.

6.44 pm
The Secretary of State for Work and Pensions Mr. Andrew Smith)

As the hon. Member for Havant (Mr. Willetts) said, the debate has ranged widely—as is the case on these occasions—making it very difficult to do justice to all the interesting contributions from both sides of the House. However, one thing is clear: in the Queen's Speech this year, we can build on what we have achieved over the last five years in sorting out the economy, tackling poverty and social exclusion, getting people into jobs, investing in our public services and cutting crime. But as we recognised in putting forward the Queen's Speech, there is very much more to do, including in health and pensions, which we have been addressing today.

There has been a sharp contrast in the debate between the positive case that the Government can make and the weakness and contradictions from the official Opposition. While the Government can, on the basis of economic stability, carry forward investment matched by reform and opportunities matched by responsibilities so that we improve front-line service delivery, get to grips with antisocial behaviour and build a stronger society, it is clear that, despite some thoughtful contributions—I listened with great interest to the hon. Member for Wycombe (Mr. Goodman)—no coherent alternative is being advanced by the Opposition. So much for the 25 shiny new policies that they launched at their conference, which have been practically unmentioned during the debate. It is clear that the quiet man's approach is beginning to catch on on the Opposition Benches.

It is striking in these health debates that we always get at least one Conservative Member, and usually more, getting up and pointing to the health needs in his constituency, which invariably require more resources. The hon. and learned Member for Harborough (Mr. Garnier) made a powerful case for dentistry in his constituency, and good for him as a constituency Member. However, he asked Health Ministers whether they had been to the Chancellor to ask for more money. The Conservatives cannot put that argument across credibly while trying to convince people that they want lower public spending and to cut taxes nor, moreover, when they voted against the huge investment in the NHS that the Government are making.

Mr. Garnier

Let us assume that the Chancellor will not give the Department of Health any more money. How will the Government provide dentistry to Market Harborough?

Mr. Smith

As we have set out in our NHS plan and through the measures in the Queen's Speech, we will do that by devolving more power to localities, by putting more power in the hands of the front-line professionals and by structuring things so that there can be more response to local needs.

The hon. Member for Woodspring (Dr. Fox), who speaks on health for the Opposition, made a real doom-and-gloom speech in which he tried to persuade the public that the NHS was not working, that it had never worked and that it could not work; yet the Conservatives profess to believe in the NHS. He claims that administrators outnumber beds, but he does not tell us that he includes within non-clinical staff hospital cleaners, porters, catering staff and receptionists, all of whom provide direct support to NHS patients. He claims that we cut training for GPs. Wrong; between 1997 and 2001, the number of GPs in training has increased by 40 per cent.

Dr. Fox

The Secretary of State for Health did not understand the point that was being made. It is not that the numbers in training have not increased. The point concerns the numbers who have been trained but have decided not to take up a career in general practice. That is the problem that the Government face. The proportion of those trainees going into general practice has fallen, despite the fact that the number of training places has indeed gone up.

Mr. Smith

I am glad that the hon. Gentleman accepts that we have increased the training of GPs. He ought to accept also that we would be in a much stronger position had the Conservatives not cut the training of GPs by about 25 per cent. There would have been 1,000 more GPs in the NHS now.

The NHS is working. Thanks to the efforts of staff, it is delivering for many millions of patients. We are ensuring that there are 39,000 more nurses and 10,000 more doctors; 1 million patients are treated every 36 hours; 300,000 more operations are carried out each year; and there is the first increase in general and acute beds in the NHS for 30 years.

I was very pleased to see my right hon. Friend the Member for Tyneside, North (Mr. Byers) in the Chamber. He underlined just how important it is to maintain the momentum behind radical reform, matching social justice with economic efficiency and matching rights and responsibilities. That is precisely what the Queen's Speech does, with its reform of the criminal justice system, the comprehensive strategy for tackling antisocial behaviour and our proposals for public service reform.

My hon. Friend the Member for Hampstead and Highgate (Glenda Jackson) voiced apprehension about foundation hospitals but said that she was open to argument. My right hon. Friend the Secretary of State for Health will shortly publish a prospectus, which I think will address the concerns of the hon. Member for Oxford, West and Abingdon (Dr. Harris). As the innovation and development of foundation hospitals goes ahead in practice, I hope that my hon. Friend and my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) will be persuaded of the merits of the approach.

From my constituency experience—like that, I am sure, of many hon. Members—I believe that, given the strength of community, patient and staff support for good local and indeed specialist hospitals, giving them a bigger say, through a stakeholder council, with greater freedom to respond to local needs, will certainly result, as my hon. Friend the Member for St. Albans (Mr. Pollard) said, in improvements and give a greater sense of local ownership, responsibility and achievement, consistent with the strongest traditions of mutuality and co-operation that have been so important to our party.

I want to respond to the points on pensions made by the right hon. Members for Hitchin and Harpenden (Mr. Lilley) and for South-West Surrey (Virginia Bottomley). They, and the hon. Member for Havant, asked whether it was the Government's policy to put the whole pensions issue to a royal commission. As I told the Select Committee recently, it is vital that the difficult policy choices confronting us on pensions are faced up to in our forthcoming Green Paper—as they will be—and not simply parked in a commission. The public would not thank us for that. I do not, however, rule out the possibility of external bodies helping us to develop the way forward on specific issues, once the policy has been set after consultation on the Green Paper. I announced just such a proposal at the CBI last week, when I said that we wanted to create an employers' taskforce on pensions, to pull together examples of good practice, to spread and promote that good practice and to ensure that employers, along with the TUC, are fully involved in the further development of pensions policy.

My hon. Friend the Member for Cardiff, West (Kevin Brennan) made some important points about the position of employees affected by scheme closures, such as those at ASW. We can all imagine how dreadful it is for people who were counting on those schemes to provide a substantial proportion of their retirement income to have that cut away from them. We should never understate the anxiety and anger to which that gives rise. There are existing measures to protect the members of those schemes, but I understand the shortcomings to which my hon. Friend referred, including the situation when directors, often with privileged information, jump ship before the problems really hit.

Of course we are considering all those matters in the Green Paper, and they will be an important part of the national debate, which must go wider than just the Government, as we develop our policy. Within what has been a voluntary system, there is a balance to be struck between the protection afforded to those who are in a scheme, and requirements that could mean, if they are overly burdensome, that more schemes close or are never established in the first place. We cannot escape responsibility for dealing with that balance.

My hon. Friend the Member for Stalybridge and Hyde (James Purnell) spoke of a third way between voluntarism and compulsion, which I think was described as "assertive choice". I look forward to discussing that concept with him further. Compulsion has always struck me as something that is either there or is not, but his inventiveness in devising third way solutions is legendary. I await the detail of his proposal.

I am obviously unable to tell the House this evening what will be in the Green Paper, but I can confirm that it will be published later this year. I have set out the principles that we need to follow: fairness; security in retirement; informed choice for consumers on the savings and pension products available; simple and proportionate regulation; ensuring that incentives are effective and well-understood; promoting employment among older workers; and flexibility, which gives individuals more choice about the pace at which they retire from the labour market. In carrying those principles forward, we will need to build on partnership between Government, employers, employees and the financial services industry. In so doing, we need to ensure that the particular needs of different sections of the population are addressed. Here, I should emphasise the position of women, which, as the Liberal Democrats have pointed out, has often been neglected in respect of pensions policy.

The challenge is to build on the changes that we have already made—the way in which we have strengthened the state system—so that more employers and individuals can, and do, make provision for their pension. As I told the TUC and the CBI, we need to take a hard-headed look at the options. We need reforms that have the confidence of business, as well as trade unions. We need to recognise that it is no good preaching at workers to save if they lack the means to do so, or if they lack confidence in the products available. However, it is no good loading employers with so many requirements—so much red tape or so many costs—that they cast off any responsibility for helping their employees to build up a pension. It has to be worth while for employees to save. They must be confident in what they will get in return, and it must be easy for employers to contribute.

Mr. Butterfill

Can the Secretary of State comment on the existing anomaly whereby those who take their 25 per cent. tax-free lump sum get a tax break, but those who put all their pension pot into the purchase of an annuity get no tax break?

Mr. Smith

Those are the choices available to people within the system. The hon. Gentleman's expertise on these matters is acknowledged, and in asking his question he enables me to knock on the head the repeated claim that we will somehow use the tax system to end reliefs, and to hit high earners' pension contributions. Let me repeat the commitment that I, and Treasury Ministers, have given. We have no such proposals, and if we did, we would tell the House of Commons.

The hon. Member for Havant asked whether we had backed off on housing benefit sanctions, and about the position on child benefit sanctions. As I said in my opening remarks, this Queen's Speech puts forward a range of measures to tackle antisocial behaviour. On nuisance neighbours—the neighbours from hell—there are measures such as injunctions, fast-track evictions and antisocial behaviour orders. As far as those who truant from school are concerned, we are looking at the effectiveness of fixed penalty notices, fast-track prosecution and parenting orders. The test is what works: the measures that will be speedy and effective in stopping nuisance neighbours, and in stopping children truanting.

In this Queen's Speech, our approach to both health and pensions is to devolve power to front-line staff, to couple investment with reform, and to ensure that we can simultaneously build a strong economy and a strong society, in which we each fulfil our obligations to one another.

Debate adjourne—[Mr. Ainger.]

Debate to be resumed tomorrow.