National Health Service (Amendment) Bill

HL Deb 15 October 1986 vol 480 cc815-903

3.47 p.m.

Baroness Trumpington

My Lords, I beg to move that the House do now reolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.— (Baroness Trumpington.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 agreed to.

Lord Ennalsmoved Amendment No. 1:

After Clause 1, insert the following new clause:

("Health and sufily legislation.

.— (1) For the purposes of health and safety legislation—

1. (a) a health authority shall not be regarded as the servant or agent of the Crown, or as enjoying any status, immunity or privilege of the Crown; and
2. (b) premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown.

(2) The appropriate authority may by regulations—

1. (a) provide who is to be treated as the occupier or owner of any such premises for any of those purposes; and
2. (b) make such modifications of the health and safety legislation, in its application to health authorities, as appear to the authority to be appropriate.

(3) The powers to make regulations conferred by subsection (2) above shall be exercisable by statutory instrument. (4) A statutory instrument containing regulations made in the exercise of the power conferred by paragraph (a) of that subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament. (5) A statutory instrument containing regulations made in the exercise of the power conferred by paragraph (b) shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House. (6) Section 125 of the 1977 Act and section 101 of the 1978 Act shall have no effect in relation to any action, liability, claim or demand arising out of the health and safety legislation.".).

The noble Lord said: I have pleasure in moving Amendment No. 1, which stands in my name and those of the noble Lords, Lord Winstanley and Lord Kilmarnock. We very warmly welcome Clause 1 as far as it goes. The Government's decision that hospital kitchens and catering departments should no longer be protected by Crown immunity, as they had been in the past, was, I think, welcomed by all sides. However, I indicated—as did a number of other noble Lords at the time of the Second Reading debate—that it did not go far enough. There seemed to me that there was little logic in dealing with just kitchens and catering departments when there were other major parts of the National Health Service which were still to be granted Crown immunity.

Perhaps I may begin with health and safety at work which concerns a major part of the amendment standing in my name and those of the other two noble Lords. The Health and Safety Act 1974 was introduced: to make further provision for securing the health, safety and welfare of persons at work, for protecting others against risks to health or safety in connection with the activities of persons at work, for controlling the keeping and use and preventing the unlawful acquisition, possession and use of dangerous substances. and for controlling certain emissions into the atmosphere; to make further provision with respect to the employment medical advisory service; to amend the law relating to building regulations, and the Building (Scotland) Act 1959 and for connected purposes".

The case for excluding the National Health Service from the protection of Crown immunity does seem to be a very powerful one and the Government have obviously recognised it in view of the evidence brought before the Committee, and another place, about the situation in the kitchens. However, it does seem to be anomalous to continue to give Crown immunity to the National Health Service in respect of health and safety at work, and we recommend that the opportunity should now be taken to resolve the position by amending the National Health Service Bill now before the House.

The DHSS has already accepted the principle of an occupational health service for NHS staff, and appointments of occupational physicians are now being made. Moreover, in 1983 the Health and Safety Commission issued a document, Safety Policies in the National Health Service, setting out guidelines and guidance for employers in the health service to devise and to use effective statements of health and safety policy as required by the Health and Safety at Work Act 1974. So this is on record.

The National Health Service is of course the largest employer in the country. As such, it should not be outside the legislation which was, after serious consideration and a major report, accepted by both Houses. The passage of time should now have given experience of meeting the legal requirements in the health and safety field. The recent introduction of the recommendation of the report of the Griffiths Inquiry into management in the NHS has clarified management responsibilities. Each regional health authority and district health authority has been required to appoint a general manager with overall responsibility for the service in his particular authority, and clear line-management structures are now being laid down.

If a hospital is to be subject to legislation relating to food, then it would seem logical that it should be subject also to legislation which covers health and safety in relation to other aspects of its activity. A visit that any of us may have paid to a hospital would provide examples of the disregard for the Health and Safety at Work Act, which I have already quoted. This concerns laboratory conditions, in some cases the storage of materials—I would say sometimes noxious materials—and the collection and disposal of rubbish, which leaves very much to be desired and which, I believe, in itself often presents a health hazard. Certainly one is aware of smells sometimes occurring in different parts of the hospital or its immediate environment. There are fire hazards which would not be accepted if the health service was not granted Crown immunity. There are ventilation problems which have led, unhappily, to very serious consequences.

While these breaches of the Act may be pointed out by the Health and Safety Executive inspectors, there is no requirement on health authorities to rectify the conditions so that, in the sort of situations which I have referred to, which I think all members of the Committee would agree are very serious, we are now in the same position as we were before the Government decided that they would remove the immunity from kitchens. The logic is that the whole of the National Health Service is sufficiently important, from the workers who work within it to the patients who live within it, to have the protection that those in the private sector are now granted.

There is now no power whatsoever to take action, however strongly it is recommended by the Health and Safety Executive. Much of the wonderful work which is done by the staff can be undone by slipshod hygiene. General practitioners in the National Health Service who employ more than five people are subject to the Health and Safety at Work Act. Hospitals in the private sector are similarly covered by the Health and Safety at Work Act. Local authorities providing services for people who have been recently discharged from hospital are required to meet the requirements of that Act. It seems to me that it would be appropriate now for the National Health Service, as a state-run service and as the biggest employer in the country, to be subject to all the relevant clauses of the 1974 Act.

This does not happen to be the view just of three noble Lords representing political parties. It is the view of the British Medical Association, which very recently passed a resolution that: This meeting believes that health and safety at work regulations should be enforced on Crown property". As I understand it, it is the view of the Royal College of Nursing and many other organisations working in the National Health Service that they should no longer—I was going to say have the benefit of immunity—escape the loss of immunity. They should be subject to the law in exactly the same way as anyone in the private sector. If we are going to tidy up the law in relation to crown immunity and the National Health Service, as we are rightly doing today, we should do it properly and not half do it. I beg to move.

Lord Winstanley

It is a great pleasure to support this amendment which was so ably moved by the noble Lord, Lord Ennals. Speaking for noble friends on these Benches, I think I am right in saying that we would have preferred the total lifting of Crown immunity from the National Health Service, as was suggested in a speech at Second Reading by my noble friend Lord Wigoder, but that obviously is not to be.

The Government intend to apply the provisions of the Health and Safety at Work Act in a very limited way merely to hospital kitchens and to catering, whereas this amendment extends the Bill so that the provisions of that Act would apply in general to the National Health Service for the reasons that the noble Lord, Lord Ennals, has so ably stated.

The noble Lord has also catalogued the list of influential and very important bodies which support what is proposed in this amendment. These are professionals working in the National Health Service who are at the sharp end of the activities which might be affected by the amendment. The noble Lord has also listed the activities within hospitals other than kitchens and catering from which dangers to the health of workers and other people can arise—laboratories, the disposal of noxious materials and infected materials, blood products and many others.

I am a little uneasy about the Government's present intentions. My attention was drawn to an article in the Guardian on the 8th October which stated that health services would be allowed to plead poverty in delaying improvements to hospital kitchens when Crown immunity from prosecutions was removed. The article reported that a draft circular from the Department of Health suggested that health authorities should respond in 28 days to food hygiene recommendations from environmental health officers. A response in 28 days would be rather better, perhaps, than no response at all, as happened recently in a hospital that was the subject of debate in your Lordships' House, but the circular went on to indicate that where major expenditure was required, and other priorities did not permit early action, the reasons and timetable should be explained to the environmental health department.

Perhaps when she replies the noble Baroness will be able to talk about that draft circular from the Department of Health and tell us precisely what it means. It sounds to me as if the Government do not mean precisely what is already said in the Bill as it now stands.

Of course, we should like the Bill to go very much further. The noble Lord, Lord Ennals, has rightly said that the National Health Service is the largest employer in Britain. I suspect that it may even be the largest in Europe but it is certainly a very big employer indeed. For that employer to be exempt in general from the Health and Safety at Work Act seems to me absurd, particularly when we remember, as I am sure we all realise, that private hospitals, of which there are a growing number in this country, are subject to the provisions of this Act wholly and totally; not just their catering and kitchens but all their services are subject to the provisions of this Act.

Indeed it is a fact perhaps not generally realised by general practitioners themselves that most general practitioners working in the National Health Service are subject to the provisions of this Act. The Act provides that those employing five people—and most group practices employ more than five people—are subject to the provisions of this Act. When one looks at those facts surely it is obvious that the Health and Safety at Work Act, if it should apply anywhere, should apply to those people who work in the field of health and safety and do so within the National Health Service.

I hope the Government will not resist this amendment. It is not damaging to the Bill. It merely extends the Bill's provisions in a way which seems to be logical. I hope that in reply the noble Baroness will tell us what is meant by the apparently delaying tactics noted by the Guardian in a circular from the department. In this the department is already telling health authorities that when this Bill becomes an Act hospitals will not have to act all that speedily, and that if they have other problems and financial difficulties then they can plead poverty and ignore it. That would be disturbing indeed. I hope that we shall see, after this amendment is fully debated, the Bill perhaps extended in toto the operations of the National Health Service and all those who work in it.

4 p.m.

Lord Mottistone

As a matter of clarification—and I may have missed this when the noble Lord introduced the amendment—may I ask the noble Lord, Lord Ennals, the significance of subsection (6)? Does that mean that the employees of the National Health Service will not have the protection they now have? When they do various acts in good faith and intention, they are freed from being sued in the courts. Is this amendment nullifying that, or what does it do? Forgive me if I do not have the 1977 and 1978 Acts to hand.

Lord Ennals

I am grateful to the noble Lord for having asked that question. As I understand it, it in no way makes a judgment on actions carried out by medical staff or by nursing staff in carrying out their duties. Clinical judgment, and the way in which a nurse fulfils a clinical judgment, is not affected by that Act, as I understand it, nor would I wish to move that it should be so. I think the health service would suffer if those who are fulfilling their tasks within the health service were to have their freedom of action based on clinical judgment in any way affected by legislation.

Lord Denning

This problem goes back to 1947, the Crown Proceedings Act, when especially this question of Crown immunity was brought in. The particular point of interest is our Armed Forces, and whether one soldier can sue another for driving a tractor negligently, or the like. On the whole as a matter of public policy it was thought best not to let questions as to whether there was negligence or not, with all the great amounts of evidence and so on that would be necessary, be thrashed out in the civil courts: rather, should be dealt with by a form of compensation—compensation perhaps not as large as would be obtained if there was no such immunity, but compensation, for instance, by way of pensions and so forth such as the Armed Services have to protect them.

In a way it is an important question of public policy; how far should we go in letting the forces of the Crown sue one another and letting them be exposed to all sorts of action for negligence; whether within a hospital you should have a nurse suing the doctor, and so forth. In a way I am not sure that the right policy is not what has been adopted from the beginning. Let there be a proper system of compensation for all those who are injured or who have suffered in the course of their service under the Crown without having to prove negligence and the like.

Pensions cannot be got in the civil courts, or anything of that kind. You get only a lump sum for damages. In a way I am not sure that the present system is not quite a good one. At all events it is such an important departure, such an important new point, that it ought to be considered on a Bill especially put forward for the purpose. It is a difficult and important question of public policy and I would hope that it could be dealt with at a later stage on a different Bill and not brought into this one.

Lord Ennals

May I ask the noble and learned Lord before he sits down whether he is suggesting that he does not want the immunity removed at all from kitchens and catering departments? Is that the purport of his remarks?

Lord Denning

I am not suggesting that. I think in a way it is almost too difficult to consider at this stage. I am not suggesting it should be taken away. All I would suggest is leave these important, big questions to another Bill, a comprehensive Bill, and do not deal with it in this Bill.

Lord Boyd-Carpenter

As one who, I am afraid, became rather a bore to your Lordships on the kitchens point earlier, I must express my gratitude to Her Majesty's Government for dealing in this Bill with that issue in Clause 1. I am sure that the Committee universally welcome that, though it took a good deal of pushing from all sides of the House, as it then was, to induce this happy change.

As the noble and learned Lord, Lord Denning, has reminded us, the present amendment is of quite a different order of magnitude. It is an extremely important issue involving a reversal of the original decision made in 1947 when the National Health Service was introduced. I would not seek to argue against it on merit just for that reason. I have never had quite that antipathy to change that one sometimes sees on the Benches opposite, but it is a big issue.

The noble and learned Lord, Lord Denning, has certainly raised a point as to whether, whatever its merits, it is a point that appropriately arises on an amendment in Committee on a Bill of considerably less significance. Nonetheless I must confess that I have considerable sympathy with the general idea behind the amendment, and I shall listen with great care to what my noble friend on the Front Bench says.

Logically, with the development of the National Health Service, it seems a little difficult to treat it as part of the Crown service; an activity on behalf of the Crown with all the privileges and disadvantages that go with that. There is obvious force in the point made by the noble Lord, Lord Winstanley, to the effect that private hospitals, which of course compete in some degree with the National Health Service, are subject to the Health and Safety at Work Act—in my view, properly so.

There is one point that troubles me, the answer to which could affect my attitude to this amendment. Will my noble friend on the Front Bench tell us, either now or when she comes to reply—she may find it more convenient when she comes to reply—whether the effect of subsection (1)(b) of the amendment would be to expose the premises, the hospitals, the installations of the National Health Service, to liability to local rates?

If it were so to expose them, it would have one of two effects. Either it would, particularly in view of the high level of rates in many areas, substantially increase the cost to the taxpayer of the National Health Service, or alternatively it would reduce the amount of funds available for the proper services of the service in the curing of the sick.

If we are to consider so profound a change as is proposed by this amendment, that is a point which would weigh with me a good deal. I would go so far as to suggest that, if the answer to the question were, yes, there would be liability to rates, an amendment which did not take care of that point was unacceptable. However, I have no idea myself what the answer will be. I understand it is being provided from the usual quarters, and in due course no doubt the noble Baroness will tell us. Meanwhile, I say to the noble Lord, Lord Ennals, that he has raised a point of very great importance.

Lord Harmar-Nicholls

Not for the first time, I think the noble and learned Lord, Lord Denning, has given the Committee very wise advice. There is no doubt that the kitchens and the provision of food, as in hotels and other establishments which do that, can be separated and can be seen to be separated from the general hospital service. That is why I think the Government were right in specifying that the food-providing section should be included in the Bill. However, when that is extended to the wards, the laboratories and the private offices that are part of the general office administration, much more thought ought to be given to it as a general proposition rather than adding it on as an ingredient in this Bill, which was not originally intended to cover that scope.

The analogy the noble and learned Lord gave of the armed forces is a real one in the sense that you encourage people who are in the nation's service (and in a national hospital that is what they are) to have this internecine warfare, one with another. We know nowadays that when the power is there, rather more than in years gone by, people tend to rush for their rights to litigate. At this stage, without much further thought being given to it, and it being considered as a separate proposition, I do not think we ought to extend it beyond the point that the Government have made.

The noble and learned Lord gave good advice about the food section being clearly established. It is separate and can be seen to be separate. But while the rest of it may be right (and no one is being critical in theory of the points made by the noble Lord, Lord Ennals) in the context of altering something which has now been worked in this way since 1947, it ought to have even more consideration than the thought we give to it in a Committee such as this. I urge the Committee to take great heed of the general advice given by the noble and learned Lord, Lord Denning.

Lord Kilmarnock

It seems to me that the arguments that have been advanced so far against this amendment have not been very persuasive. The noble and learned Lord, Lord Denning, said that it was simply too difficult. I do not think that is a vety good ground. I shall come to it in a minute. The noble Lord, Lord Boyd-Carpenter, advanced the worry about possibly opening hospital premises to the rating system. I would point out to him that the amendment says in its very first line: For the purposes of health and safety legislation"— not for the purpose of any other legislation.

I can think of only two genuine reasons why the Government should resist this amendment. The first is financial. The Explanatory and Financial Memorandum states that Clause 1 has no public expenditure implications that apply to catering. I should have thought that it did, because if an old kitchen with rotten woodwork is to be taken out and replaced with something modern and hygienic. the cost has to come from somewhere, perhaps from the capital programme which I think the noble Lord, Lord Winstanley, was worried about.

However, if it is accepted that there is no financial effect from this measure I cannot see that there will be any great financial effect from the proposed amendment, which mainly involves applying existing regulations with greater rigour. Surely the Secretary of State would not want the standards to be applied to his famous list of 300 new hospitals which he unrolled with such panache at Bournemouth to be anything less than of the very highest degree. This would surely involve the application of health and safety regulations, too.

The second point concerns accountability and responsibility. This is where I take issue with the noble and learned Lord, Lord Denning, who thought that this was too difficult. I understand the arguments put forward in 1974 by health authorities when they had just undergone a serious reorganisation and did not have the experience of meeting legal requirements for the health and safety of their employees and wanted to concentrate on patients—I do not accept that the two interests can be separated—but the management structure made it too difficult. That was the argument at that time. It was too difficult to allocate responsibility.

Those arguments can surely not stand up now, because many hospitals have been meeting the standards of the Act on a voluntary basis for years. Surely the Government cannot have so little confidence in their new line of management structure imported from the commercial world as to think that the new breed of manager will be incapable of complying with the regulations which their brothers in the world outside take in their stride and which private hospitals have to meet, as the noble Lord, Lord Ennals, and other noble Lords have said. Doctors employing more than five people in their surgeries have to meet those regulations. There is no conceivable reason on the managerial side why this should not be done.

Unless the Government can advance overwhelming financial grounds, they are in a very weak position. Even if some expenses were involved it would surely be dangerous to refuse to contemplate any additional expenditure in the interests of proper standards in hospitals, of all places. In my view, health and safety provisions cannot be divorced from food hygiene. After all, there are just as many infection risks from disposal of other wastes and effluents as there are from poor food hygiene. They are all part and parcel of the same need for hygiene in hospitals, as I say, of all places in the country.

The noble Baroness has to give us a very convincing explanation why the Government are not going to accept this amendment. Perhaps they are—I do not want to put words in her mouth. I shall listen to her with great care.

4.15 p.m.

Baroness Trumpington

Health authorities are not currently subject to improvement or prohibition notices under the Health and Safety at Work Act, or to prosecution for failing to meet the requirements of the Act, though their employees may be prosecuted if they fail in their duties. In 1978, a system of Crown notices was introduced. Health and safety inspectors issue those in circumstances where in outside industry they would issue improvement or prohibition notices. The system provides for referral to the Secretary of State if the notices are not complied with. Although some 330 Crown notices were issued between 1978 and September 1986, there has been no occasion on which such reference was necessary.

Health authorities are liable to comply with the Health and Safety at Work Act in the same way as private bodies, but they may not be prosecuted. Most problems are resolved through co-operation and good will between health and safety inspectors and health service administrators; for example, in setting timescales for improvements which take account of the need for health authorities to continue to provide a service for patients. In any case where this fails, a Crown notice may be issued, either to prohibit an activity or make good deficiencies within a set period of time. Failure to comply with a Crown notice may be referred to the Secretary of State.

From their inception in 1978, as I said, 330 Crown notices, covering over 550 defects, were issued. In no case, as I have said before, was it found necessary to refer the matter to the Secretary of State. I have repeated that because it is very important. This suggests that health authorities are fulfilling their responsibility—a view that is supported by the Health and Safety Commission. The Crown notice system demonstrably provides adequate safeguards to ensure that health authorities comply with health and safety legislation, and the Government do not at present see any need to remove Crown immunity in this field.

Earlier this year, the Health and Safety Executive advised inspectors that, in order to dispel any doubts that Crown bodies were hiding behind Crown immunity, a problem found in Crown premises should receive the same priority as in a private concern, with the same allowance of time to complete any remedial action. Information received from the executive in September shows no indication of any increase in the number of Crown notices issued following this change. This suggests that health authorities are fulfilling their responsibilities, and that view is totally supported by the Health and Safety Commission. Much has been achieved by co-operation and good will between health and safety inspectors and health service administrators; for example, in the setting of timescales for improvement.

In a number of cases health and safety inspectors paid specific attention to a problem following the issue of guidance by the department or by the Health and Safety Executive. The noble Lord, Lord Winstanley, asked me about an article in the Guardian. There is no question of health authorities being allowed to avoid taking action. The contents of the draft circular are intended to recognise that, where major expenditure capital is necessary, health authorities have to insert this into their capital and building programmes. The draft circular recognises that health authorities need to work in close collaboration with environmental health officers so that all concerned know the programme for remedial action and its timing.

My noble friend Lord Boyd-Carpenter asked me a question about rates. I would reply to him by saying that the noble Lord, Lord Kilmarnock, is perfectly correct. The amendment is about applying health and safety legislation but this is not wide enough to cover legislation about rates. There is the risk that if we were to remove the existing system for maintaining health and safety in health service premises and to apply the statutory controls, we should lose the most valuable good working relationships which have been built up and possibly make the provision of health services more difficult.

Finally, I thank my noble friend Lord Boyd-Carpenter for his double-edged compliment to the Government. Clause 1 seeks to remove Crown immunity from the food and hygiene legislation because of widespread concern in the country, and expressed in Parliament, about the state of hygiene in hospital kitchens. The Government share this concern and saw an urgent need to make the change. I share the view of the noble and learned Lord, Lord Denning, and my noble friend Lord Harmar-Nicholls that this Bill is not the vehicle for widespread change. Adequate safeguards are available to ensure that health authorities comply with health and safety legislation, and a case for removing Crown immunity has not yet been made. I urge the Committee not to support this amendment.

Lord Ennals

If the noble Baroness will permit me, I shall touch upon one or two of the points made by other noble Lords before turning to the helpful comments that she made. I took note of what the noble and learned Lord, Lord Denning, said. He said that this is not the time to deal with Crown immunity in anything but the kitchens. I do not understand that. I have to ask him, as I would ask the Government, whether he is proposing to bring forward a Bill at another stage, or whether he expects the Government to bring forward a Bill at another stage. What does he conceive as the right time to deal with this problem?

For the first time since the National Health Service came into existence we are dealing with the Crown immunities which have applied up to now or up to the time when this Bill becomes an Act. It seems to me absolutely clear that this is the time to make any adjustments in the Crown immunity relationship. The noble and learned Lord said that we must have more time for consideration, but the Government and noble Lords who care about this matter have had many months to consider it.

The issue was raised first in another place. An amendment was tabled there, considered and negatived. In my Second Reading speech I made it clear that I would move an amendment designed to do precisely what this amendment does; so that, even if no one follows what happens in another place, anyone who follows what happens in this place has had several months to consider whether this amendment is the right one. If the Government thought that the principle was right, they could have come forward with another amendment which would not have faced them with any difficulties. That does not seem to be the problem. The Minister dealt with the objections more effectively than I could deal with them; I must be modest.

We touched upon liability for rates. That matter was raised by the noble Lord, Lord Boyd-Carpenter, who played a prominent role in securing what we already have in the Bill. He said that he had much sympathy for the amendment. I hope that he will be able to join us now that he has the assurance that he wanted that it does not affect the question of rates. That is clear from the very first sentence.

The noble Lord, Lord Kilmarnock, made what I thought was a powerful argument: it does not make sense to stop at food. The disposal of waste food, and more important than that the existence of dirty material (which is inevitable in a hospital), its disposal or the possible dirtiness of part of a hospital, are it seems to me on all fours with the cleanliness of the kitchens and the supposition that infections could develop in hospitals. In hospital one is more likely to get an infection than at home. I am sure that the noble Lord, Lord Winstanley, and the Minister will confirm that. But infections do not come mainly from kitchens: they come from other situations.

I would also ask what the logic is of having one law for the private hospital and another for GPs and the NHS; and what the logic is of having one law for the GPs and another that affects hospitals.

Baroness Trumpington

I am sure that the noble Lord is going on to other points. I wonder whether I may attempt to pick him up on that. I think I mentioned three times the 336 Crown notices being issued for 550 defects. These cover the sort of items that the noble Lord was talking about, such as pathology, post-mortems and cleaning. In a number of cases health and safety inspectors paid specific attention to a problem following the issue of guidance by the department or by the Health and Safety Executive. For the avoidance of doubt, the HSE has recently advised inspectors that problems found on Crown premises should have the same priority as in a private concern, with the same amount of time to complete remedial action. I repeat that since that time there has been no indication of an increase in the number of Crown notices issued.

Lord Ennals

I am grateful to the noble Baroness for that intervention and I welcome the assurance. But if she and the Secretary of State for Social Services had felt that there was no advantage in the law being able to intervene they would not have taken the action that they have in relation to kitchens. They would have said that notices have been issued and action is being taken. But they have deemed it advisable in the case of kitchens that the law should stand behind any circular, Crown immunity notice or what have you. I am delighted to hear what success there has been in kitchens and I am sure that the very fact that the Bill has been announced before it has become law has had its effect on the cleanliness of kitchens and the dangers that we all face. But it will not have this effect so far as the rest of the hospital is concerned unless we carry an amendment, either the one that I am proposing or one slightly different, if the noble Baroness has any different words to suggest. The fact that hospitals are complying so effectively means that it is unlikely there will be many prosecutions and if it is unlikely that there will be many prosecutions, why is she worried? The same applies to dealing with a dirty situation in one part of the hospital as it does to dealing with a dirty situation in the kitchens.

The noble Baroness also obliterated another possibility that had been raised by the noble Lord, Lord Kilmarnock. It is not going to cost very much, if anything at all, in the case of both kitchens and non-kitchens. Let us be logical, for Heaven's sake! No one has come forward with an argument against the amendment that I am proposing except to say that we should do this at some other time. If not now, when; and why not now?

4.30 p.m.

Lord Boyd-Carpenter

My noble friend Lady Trumpington puts those of us who see considerable merit in this amendment in something of a difficulty. As the noble Lord, Lord Ennals, said a moment or two ago, the only real argument was not directed to the merits of the proposal but, like the argument of the noble and learned Lord, Lord Denning, was directed to whether this was the right vehicle. I think my memory is fairly accurate: my noble friend said something about this not being the occasion and not the vehicle. Any view supported by the noble and learned Lord is entitled to very great respect and certainly it receives that respect from me. But for the argument of my noble friend to have convincing effect, certainly on those of us who see the merits of this proposal, there would have to be some indication that, if this is the wrong vehicle or the wrong time, the Government have in mind proposals for doing this or something like it in the foreseeable future.

I realise the difficulty—I have been a Minister myself—of answering off the cuff from the Front Bench as to what the Government's intentions are or possibly what the intentions of the Secretary of State are. But I think my noble friend must understand that those of us who think this would be a good thing are being put in a position of great difficulty if the Government cannot be more precise than she has indicated so far as to whether they are likely to do it and to do it in the foreseeable future.

Lord Denning

Perhaps I may say one word more. Having listened to the argument, and particularly to the point made by the noble Lord, Lord Winstanley, I ask whether there is any reason whatever to distinguish between the private hopsitals and National Health Service hopsitals. I was hoping that we might hear something from the Government, but I have heard no argument on that. As I said at the beginning, I wondered whether the change could be deferred; but now I question whether it can be. I feel the same unease as my noble friend Lord Boyd-Carpenter.

Baroness Trumpington

We responded to a strong sense of need from the country with regard to hospital kitchens, if the Committee remembers, following a very serious outbreak of salmonella. If we started mucking about with Crown immunity on a piecemeal, ad hoc basis as we went along, there would be difficulty. This proposal needs far more consultation. It may come about one day, but this is not the Bill for it.

The need exists now to remove Crown immunity from the food legislation. There is no Crown notice procedure operating here. A Crown notice procedure available when a central government agency—for instance, the Health and Safety Commission—is involved could not operate where numbers of local authorities are involved. The case has not yet been made in respect of Crown immunity under health and safety legislation because, as I said, the health authorities are already required to comply and there are adequate safeguards to ensure that they do.

Lord Ennals

I have only a few sentences to add at what I presume will be the end of this helpful debate. First, I deal with legislation. The noble Baroness said that this was not the proper time to legislate and she does not want piecemeal legislation. But this is the proper time, because if we do not do so now it will be piecemeal legislation. It is perfectly clear that this is exactly the tiime to deal with the matter.

Secondly, this part of the Bill, which we welcome, resulted from the terrible incidence of salmonella. It is perfectly possible that had we been able to anticipate the situation earlier—and of course none of us could—and legislated earlier, we might have been able to avoid it. It may be on the conscience of the noble Baroness if something happens in relation to a laboratory or to the disposal of waste that we did not take the opportunity now given in the Committee on this Bill. I wish to press this amendment to a vote.

4.36 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents. 110; Not-Contents, 86.

DIVISION NO. 1
CONTENTS
Ailesbury, M.	Banks, L.
Airedale, L.	Bessborough, E.
Amherst, E.	Blease, L.
Ampthill, L.	Blyton, L.
Ardwick, L.	Bonham-Carter, L.
Aylestone, L.	Bottomley, L.

Boyd-Carpenter, L.	McNair, L.
Brockway, L.	Masham of Ilton, B.
Bruce of Donington, L.	Mishcon, L.
Burton of Coventry, B.	Molloy, L.
Carmichael of Kelvingrove, L.	Monson, L.
Chitnis, L.	Morton of Shuna, L.
Cledwyn of Penrhos, L.	Mulley, L.
Collison, L.	Nicol, B.
Cottesloe, L.	O'Brien of Lothbury, L.
David, B.	Oram, L.
Dean of Beswick, L.	Phillips, B.
Denning, L.	Pitt of Hampstead, L.
Diamond, L.	Ponsonby of Shulbrede, L.
Donaldson of Kingsbridge, L.	[Teller.]
Elwyn-Jones, L.	Porritt, L.
Ennals, L.	Prys-Davies, L.
Ewart-Biggs, B.	Rathcreedan, L.
Ezra, L.	Rea, L.
Fitt, L.	Renwick, L.
Foot, L.	Rhodes, L.
Gallacher, L.	Robson of Kiddington, B.
Galpern, L.	Rochester, L.
Gisborough, L.	Ross of Marnock, L.
Gladwyn, L.	Rugby, L.
Glenamara, L.	Sainsbury, L.
Graham of Edmonton, L.	Saltoun of Abernethy, Ly.
Grey, E.	Seear, B.
Grimond, L.	Shackleton, L.
Hampton, L.	Shannon, E.
Harris of Greenwich, L.	Shaughnessy, L.
Hayter, L.	Shepherd, L.
Henderson of Brompton, L.	Silkin of Dulwich, L.
Hooson, L.	Simon. V.
Howie of Troon, L.	Somers, L.
Hunt, L.	Stallard, L.
Hutchinson of Lullington, L.	Stedman, B.
Ilchester, E.	Stewart of Fulham, L.
Jacques, L.	Stoddart of Swindon, L.
Jeger, B.	Taylor of Gryfe, L.
Jenkins of Putney, L.	Taylor of Mansfield, L.
Kennet, L.	Tordoff, L.
Kilbracken, L.	Underhill, L.
Kilmarnock, L.	Vernon, L.
Lawrence, L.	Wallace of Coslany, L.
Leatherland, L.	Walston, L.
Llewelyn-Davies of Hastoe, B.	Wells-Pestell, L.
Lloyd of Hampstead, L.	Whaddon, L.
Lloyd of Kilgerran, L.	Winchilsea and Nottingham, E.
Lockwood, B.	E.
Lovell-Davis, L.	Winstanley, L. [Teller.]

NOT-CONTENTS
Alexander of Tunis, E.	Faithfull, B.
Beaverbrook. L.	Fanshawe of Richmond, L.
Belhaven and Stenton, L.	Ferrers, E.
Beloff, L.	Forester, L.
Belstead, L.	Glanusk, L.
Brabazon of Tara, L.	Gormanston, V.
Brougham and Vaux, L.	Gray of Contin, L.
Broxbourne, L.	Gridley, L.
Caithness, E.	Hailsham of Siant
Cameron of Lochbroom, L.	Marylebone, L.
Campbell of Alloway, L.	Halsbury, E.
Campbell of Croy, L.	Harmar-Nicholls, L.
Carnegy of Lour, B.	Hives, L.
Carnock, L.	Hooper, B.
Cathcart, E.	Hylton-Foster, B.
Chelmer, L.	Keyes, L.
Constantine of Stanmore, L.	Kinnaird, L.
Craigton, L.	Knollys, V.
Cranbrook, E.	Lane-Fox, B.
Cullen of Ashbourne, L.	Layton, L.
Davidson, V. [Teller.]	Long, V.
De Freyne, L.	McAlpine of West Green, L.
Denham, L. [Teller.]	McFadzean, L.
Dilhorne, V.	Mancroft, L.
Eccles, V.	Marshall of Leeds, L.
Ellenborough, L.	Merrivale, L.
Elliot of Harwood, B.	Mersey, V.
Elliott of Morpeth, L.	Monk Bretton, L.
Elton, L.	Mottistone, L.

Murton of Lindisfarne, L.	St. Aldwyn, E.
Newall, L.	Sandford, L.
Norrie, L.	Skelmersdale, L.
Nugent of Guildford, L.	Sudeley, L.
Onslow, E.	Terrington, L.
Orr-Ewing, L.	Tranmire, L.
Pender, L.	Trumpington, B.
Peyton of Yeovil, L.	Ullswater, V.
Plummer of St Marylebone,	Vaux of Harrowden, L.
L.	Vivian, L.
Polwarth, L.	Ward of Witley, V.
Portland, D.	Whitelaw, V.
Reigate, L.	Wise, L.
Renton, L.	Wolfson, L.
Rodney, L.	Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.

4.43 p.m.

Lord Ponsonby of Shulbrede

Before the next amendment is called I am sure that the Committee will wish to know that that is the 100th occasion on which the Government have been defeated since 1979.

Clause 2 [Pharmaceutical services]:

Lord Ennalsmoved Amendment No. 2: Page 3, line 30, leave out ("only")

The noble Lord said: With that good news presented to us by my noble friend Lord Ponsonby, I am delighted to move Amendment No. 2 which is being debated with Amendments Nos. 3, 18, 20 and 21. Apart from some introductory comments, I shall relate my remarks only to Amendments Nos. 2 and 3 standing in my name. The Bill as it is currently worded deals with the question of what measure of control, if any, should be imposed upon the right of pharmacists to be able to open and gain a National Health Service contract for the benefit of themselves and their patients. Under the Bill as it is currently worded, the onus is on the applicant to show to the committee's satisfaction that it is necessary or desirable for the application to be granted.

We shall later be considering the composition of the committee and which members of the committee may vote, but I believe that this particular aspect that I have pointed out, concerning the onus upon the applicant to show to the committee that it is necessary or desirable for the application to be granted, is wholly unreasonable, particularly as the DHSS made it plain that there will be no set criteria for determining necessity or desirability. The applicant would therefore not know what precise criteria must be met. This is a very strange situation in which, for the first time in the 40 years of the National Health Service, pharmacists are being put in a position where their right to have an NHS contract is being challenged and a committee will determine whether or not they should.

This is an issue on which members from both sides of the Committee had strong feelings on questions of principal when this Bill was debated on Second Reading. Appropriately, therefore, this amendment removes what I have called an unreasonable burden upon the applicant and requires the committee to approve the application unless there are grounds upon which it can reasonably be refused. The committee has to say, "No, we are not satisfied," rather than the applicant having to set out all the reasons why he should do what he has been entitled to do over the last 40 years.

Before making an application the applicant must make a commercial business decision. The applicant would not make the application unless he or she felt it was commercially viable. The committee is unlikely to be qualified or equipped to make this assessment as to whether it is commercially viable and it should not sit in judgment on this issue. Rather it should be required to approve the application unless there are grounds on which the application can reasonably be refused.

I will pause for a moment to say to the Minister that there are many people who do not believe that it is right to impose any control since we have not imposed any control in the last 40 years. To some members on both sides of this Committee there is a feeling that this runs against the traditional freedom of pharmacists to be able to provide the service to the community which the community needs and which the pharmacist is satisfied can be provided. This is therefore within the context of introducing a new control and a new restriction, one not known before, on pharmacists. It is within the context, certainly, of an agreement negotiated by the Pharmaceutical Services Negotiating Committee and the Government, but it is an issue on which there are very strong feelings held by pharmacists up and down the country. I have had an enormous amount of correspondence from small high street pharmacists who believe that the Bill will put them out of business. They are right in that they are going to be offered certain payments to enable them to get out of business without suffering. I find this a sad situation.

The whole purpose not only of this amendment but of other amendments I have tabled, is to improve the quality of services provided by contracting pharmacists to the public, to protect the interests of small high street pharmacists many of whom provide a high quality of service because they know personally the people who bring prescriptions from their general practitioners, and to minimise the powers of local contractors to use those powers to protect their own interests without removing the powers to stop leapfrogging. I recognise that the Government are anxious about the problem of new pharmacists setting up opposite a health centre and therefore doing damage to existing pharmacists. I want to improve the participation of consumer representatives, and that will come in other amendments.

It is essential that a new power of the state over an individual should be properly understood in law and properly considered by the law makers. In legislation and the courts the word "reasonable"—and I am sorry that the noble and learned Lord, Lord Denning, is not here to confirm this—has a well interpreted meaning. It therefore introduces an objective test which is not the case with the words "necessary or desirable" of which I wish to get rid. The final resort of an applicant who is dissatisfied with the decisions of a family practitioner sub-committee would be to apply to the court for judicial review. The court will need to understand the test applied by the sub-committee in reaching its decision.

NHS dispensing accounts for 70 per cent. of an average retail pharmacist's turnover. Without that income most dispensing chemists could not continue establishing a business. Thus the effect of the Bill as it now stands would be to debar a person from the practice of a profession by quasi-judicial means. Dentists and opticians may open a practice anywhere and obtain contracts to treat patients under the NHS; and solicitors can do the same and take on legal aid work remunerated by the state. Indeed, the restrictive implications of the proposed system have occasioned adverse comments from the Office of Fair Trading.

This amendment, though it is only one of several that we shall be debating, is fundamental because it transfers from the applicant the right to prove that it is "necessary or desirable". It is a very modest amendment. It does not seek to defeat the contract. Many would like us to table an amendment to defeat the contract. I have sought to table a series of amendments which will make this a more reasonable contract, one more acceptable to pharmacists up and down the country, particularly the high street pharmacists, which is the group that concerns me most.

Baroness Trumpington

These amendments are clearly designed to nullify the provisions setting out the proposed new arrangements for allocating NHS pharmacy contracts. Those arrangements are the main feature of Clause 2. Leaving out the word "only" in paragraph (c) on page 3 would allow an FPC to grant an application even if it was of the opinion that it was not necessary or desirable. The second amendment would remove the "necessary or desirable" criteria completely, while at the same time giving no indication of the factors which would justify refusal. These amendments go to the heart of the matter. I am surprised that the noble Lord, Lord Ennals, should have tabled these amendments following the general welcome to this clause by his party in the Commons. I shall—

Lord Ennals

No.

Baroness Trumpington

I have copies of Hansard here containing several remarks by the Official Opposition speaker generally welcoming this clause.

I shall explain briefly why the Government consider Clause 2 of the Bill essential for the proper and economical provision of NHS pharmaceutical services in the future. There is first the point that a limitation on entry to the NHS pharmacy contract formed part of an important package that was agreed with the pharmacists in a long and complex negotiation completed 18 months ago. Governments like everyone else, should stick to the agreements they reach. But our main reason for promoting this provision goes deeper than its part in a contract negotiation or the savings—£4 million—expected from other elements in the overall contract package.

Our concern is with patient services and their costs in the medium and longer-term. After a period of decline in NHS pharmacy numbers in the 1970s, numbers in England and Wales have increased quite substantially from 9,406 to 10,125 between 1979 and 1985. I am happy to acknowledge the role of the noble Lord, Lord Ennals, in that trend.

Lord Ennals

The noble Baroness will recall that I asked a question during the Second Reading debate and she kindly gave me an answer which I received last night and for which I am most grateful. In that answer she said that she did not believe that there were too many pharmacists. So the noble Baroness is not using that argument, is she?

Baroness Trumpington

I am in the middle of a paragraph, and no doubt the noble Lord, Lord Ennals, will see my intent as I proceed.

Neither the noble Lord, Lord Ennals, nor anyone else could justify a continued indefinite and open-ended expansion of NHS pharmacy numbers in places where local needs are already met and when each new pharmacy costs the NHS extra money—on average up to £50,000 a year. The number of NHS pharmacies is at present growing by about 200—some 2 per cent.—a year. This is adding to NHS pharmaceutical costs (already close to £500 million a year in the United Kingdom, not counting the cost of the drugs dispensed) something approaching £10 million each year. If the trend continues without the checks we now propose, the NHS will have to meet extra costs, perhaps up by £10 million next year, £20 million the following year and so on. Obviously, one cannot be too precise, but noble Lords will see that if this trend continued for a further five to ten years, the NHS could be bearing extra costs of between £50 million and £100 million; and as many of the pharmacies opening now are close to existing pharmacies which already provide a satisfactory service to their local populations, the NHS and its patients will gain very little benefit from much of this extra cost.

The Committee is familiar with the overall expenditure position of the NHS. Indeed, some noble Lords are inclined to exaggerate its difficulties and to underestimate the amount of extra money we have put in, and the effectiveness of our campaign to improve the value we get from those resources. But no responsible government could allow the present open-ended arrangements for the NHS pharmacy contract to continue to push up NHS costs at a time when the NHS as a whole is facing serious demand pressures from an ageing population and the spread of medical advance. Governments are often accused of taking short-term decisions and ducking longer-term problems, but Clause 2 of the Bill has the medium-and long-term objective of restraining further pharmacy growth to what is necessary or desirable for patient services.

Because decisions on applications for new pharmacy contracts are to be made locally on the basis of local perception of local need, it is impossible to estimate with any precision how many unnecessary openings will be prevented or what the cost savings will be. However, if for the purposes of illustration the present rate of new openings were to be halved from 200 a year to 100 a year, the NHS would save some tens of millions of pounds over the next five to 10 years. That money could help meet some of the severe pressures elsewhere in the service. No government have ever allowed or been prepared to finance open-ended cost growth in NHS hospital and community services. No sane commercial entrepreneur would accept an obligation to allow an open-ended and indefinite expansion of his operations without regard to the volume of demand or to what he can afford. On the same basis, the NHS should not be expected to underwrite an indefinite and open-ended growth in its pharmacy costs without regard to its patients' needs.

The noble Lord, Lord Ross of Marnock, when he opposed similar provisions in the Law Reform (Miscellaneous Provisions) (Scotland) Bill, said that he did not want Scotland to be impeded until England had similar restrictions. When we come forward with legislation to provide similar powers on both sides of the Border he now wants Scotland to be different.

I dispute the remarks of the noble Lord, Lord Ennals, concerning the lack of support from pharmacies. This measure is strongly supported by all the main pharmacy interests, not just the terms of service negotiators but also the Pharmaceutical Society of Great Britain, which represents the public interest in pharmacy and the interests of all pharmacists including those still in training who will be looking for jobs in their profession.

The Government see this clause as a rational and essential measure at a time when the NHS pharmacy growth is outstripping patient need. I strongly commend the clause, as it stands, to the Committee.

5 p.m.

Baroness Carnegy of Lour

When we debated this issue in the last Session, in the context of the Scottish law reform Bill, I voted for the equivalent of the amendment we are now discussing. I did so on the basis of the same very persuasive type of argument that we have heard this afternoon from the noble Lord, Lord Ennals. I have since looked into this matter in considerable detail and ascertained the facts of the case, and I beseech the Committee to reject this amendment. I have completely changed my mind.

The aim must be to make the best possible use of resources for the National Health Service. To do that, one must avoid waste and avoid overprovision, which includes overprovision of chemists dispensing National Health Service prescriptions. It is essential to get the money to where it is of maximum benefit for the customers.

The noble Lord, Lord Ennals, said that pharmacists throughout the country have been writing to him. Noble Lords in this Committee may also have had letters, and, if so, they will have observed that there are some perhaps small pharmacists who would like to obtain access to public money by providing National Health Service prescriptions. To have a National Health Service contract represents a considerable sum of public money to the chemist. It is perfectly natural for people to want that.

There has also been at least one large chain of chemists writing letters to Members of this Chamber because it would like to set up a chain of chemists with access to this public money. That is a perfectly legitimate concern. However, I respectfully suggest that the noble Lord, Lord Ennals, is speaking on its behalf and not on behalf of the customers of the health service. The customers of the health service want within geographical reach a chemist where they can get their prescriptions made up. It is the duty of the health service to see that such chemists exist. That is allowed for in the Bill.

The amendment means that anybody can set up a pharmacy provided they have the qualifications, and so on. There could be considerable overprovision. It is absolutely essential to the whole strategy of the increased role of the pharmacists—their developing role in the National Health Service—that this part of the Bill should stand. That is why pharmacists, through their official organisations in England, Wales and Scotland, have unanimously agreed with what is contained in this clause. I beg the Committee to reject the amendment.

The Earl of Halsbury

I was delighted with the robust counter-attack delivered by the noble Baroness, on behalf of the Government, against an amendment which appears to stem from a sentimental interest in Buggins' turn. It is perfectly possible for a very large commercial establishment to have most of its business in toiletries, beauty preparations and the rest of it. It need only engage one pharmacist and it can have a National Health Service contract with some money on the table, though it may be only a minor part of the business.

That is the situation the amendment seeks to procure. The noble Lord, Lord Ennals, might be happy that his money is spent in that way, but it is not how I like my money to be spent. I am glad that the Government are doing their best to economise on unnecessary expenditure on the NHS in order to make room for necessary expenditure. That is important.

I speak on behalf of not only myself but my noble friend Lord Hunter of Newington, who is professionally very close to this problem and who regrets that he cannot be here this afternoon because of a public engagement which he could not cancel. Therefore I hope the Committee will realise that I am well supported by the medical profession.

Lord Mottistone

I shall be brief. I, too, received the brief from which the noble Lord, Lord Ennals, largely quoted, and was persuaded that it was a good argument until I realised, when my noble friend the Minister spoke, that the flaw in the present situation is that the system requires the Government to back anybody who is recommended, regardless of whether it is necessary. That is where the flaw exists.

I am not suggesting that we should rewrite the Bill—though the Government might take my suggestion on board for the future—but if we have the Bill so worded that acceptance of a pharmacist in an area for national health purposes is not automatic if it is approved by a local body, then the commercial situation will change. The brief I was sent made the point, which the noble Lord, Lord Ennals, did not, that the present situation from the pharmacists' point of view is that the pharmacist will make a commercial decision whether to apply. Of course he will, because, as we now understand it, if he wins he is bound to be paid by the Government. If that were to be restricted, his commercial decision would be different because he would not know that he would automatically get the NHS contract. That would be a better way of dealing with the situation.

I am surprised that the noble Lord, Lord Ennals, and his colleagues are behind the amendment, because this is a straight commercial argument. It is not in the interests of the public, or anything of that nature. But be that as it may, I am tempted by it because I think that improved commerce in this country is one way in which we shall survive. However, because of the nature of the National Health Service and its arrangements, it would be singularly inappropriate to accept the amendment. I hope that the Committee will resoundingly reject it.

Lord Kilmarnock

As we so enthusiastically supported the noble Lord, Lord Ennals, on the last amendment and with such resounding success, by which I am delighted, I thought I should say that we on these Benches are in some difficulty over this amendment. In this country the problem is not that there are too many pharmacies but that they are wrongly located. As I understand it, one of the objectives of the Bill is to try to secure some relocation of pharmacies rather than have a drop in the total number.

I do not go quite so far as the noble Baroness, Lady Carnegy of Lour, but it seems to me that this amendment recasts the emphasis of this subsection in the Bill and my fear is that it could lead us back to the clustering and leapfrogging in the high street that I think we all want to avoid, and which I think it is one of the purposes of the Bill to try to discourage. For example, if there are two pharmacies within four hundred yards of each other in a high street and one is dispensing 30,000 prescriptions and the other 20,000, because of the way the system is graded that is more expensive for the National Health Service than is one pharmacy that is dispensing 50,000 prescriptions.

It seems to me that we should not consider this amendment proposed by the noble Lord, Lord Ennals, without also considering the essential small pharmacies scheme. As I understand it, one of the objectives of the Bill is to shift some money out of the overcrowded high street and put it toward an extension of the essential small pharmacies scheme in more remote and more deprived areas. The noble Baroness is nodding at me and perhaps she is confirming that such is the Government's intention. If it is the Government's intention, then we on these Benches support it.

It seems to me that perhaps in later amendments during this Committee stage of the Bill we should be concentrating on getting right the question of the subcommittee which hears the applications, so that there are no unfair decisions made, and on getting right the appeals system in case any unfair decision should be made. Those are two very important safeguards that we want to see in the Bill, and I think that the Government too would like to go a little way down that road. That is the area on which we wish to concentrate our attention.

I have to say to the noble Lord, Lord Ennals, that we cannot support him on this particular amendment. Frankly, I do not think that classic Liberal free trade principles apply in this rather strange little area of pharmacy in which public subsidy is also involved. I thought I ought to say where I and I think most of my colleagues on these Benches stand.

Lord Harris of High Cross

When I hear the noble Lord talk about "classic Liberal free trade principles", which he accepts in principle but with which he often has some difficulty in practice, I think it is helpful to explain that those of us who take a very critical view of the whole of Clause 2, do so partly because the Government have allowed the PSNC to get them into what seems to be an indefensible position. At the very outset of the negotiations, more than two and a half years ago, the main representative bodies in the pharmaceutical business solemnly signed and sealed an undertaking which affirmed that it was possible to bring about what they called a rational location of pharmacies through the exclusive use of financial incentives and disincentives. That was a hopeful line of exploration to pursue.

Of course, as the noble Lord, Lord Mottistone, said, when the health service steps in to violate a fundamental principle of the market place by distributing largesse without charge, then one cannot necessarily allow chemists, in the absence of any guidance whatsoever, to multiply, to accept contracts, and to obtain the benefits. But what one can do is to load the terms. By a structure of inducements and disincentives—and we have them in all kinds of ways at the present time, such as with the basic practice allowance or differential rates of reimbursement for chemists of different sizes depending upon how many prescriptions they deal with—in principle and theoretically one can devise precisely the location that is wished by adjusting the framework of terms of payments in rural areas or urban areas or by size of chemist, and so forth.

The Government were eventually persuaded by the PSNC to abandon that path. I am sorry to tell the Committee that the PSNC repudiated the solemn undertaking that was subscribed to by the six representative bodies and that at the beginning of 1985 went into secret session, abandoned the idea of financial incentives and disincentives and instead plumped for the idea of restriction. I keep coming back to this stubborn point. If it is desired to discourage people from setting up in business for good reasons of public policy, it is one thing to set the financial terms in a way which, on the whole, will discourage all those except the most efficient and persistent, but it is quite another matter to slam the door in their faces and say that they shall not have access to the market place. Therefore, although I think that there are other and better amendments yet to feast upon before the evening is out, I support the noble Lord, Lord Ennals, in this particular amendment.

5.15 p.m.

Baroness Trumpington

I should just like to reply to what the noble Lord, Lord Harris of High Cross, has said because he asked in effect, "Why don't you use financial disincentives and let the market decide?" I ask the Commitee: if that were a viable option do you not think that the Government would have taken it? It was one of the many options considered. In reality, to have gone down that road would have meant that many small pharmacies would unnecessarily have gone to the wall, and that would have been unacceptable to us.

The option that we have agreed allows those in the best position to plan local services and to take the decisions. They are the family practitioner committees. Part of the Government's approach to health service management is designed to have decisions made at the most effective level, and the best way to ensure an improved distribution of NHS pharmaceutical services is to let those who know best decide. Local circumstances, local needs and local knowledge are the key factors.

Lord Ross of Marnock

I am sorry to intrude with a Scottish voice into this debate but those who have grouped these amendments together have included one of my amendments, which I think is No. 18.

I received a special mention from the Minister, who said that I objected when this measure was introduced into a miscellaneous Scottish law reform Bill just about a year ago. I am now objecting again when it is being done in an English Bill. When one looks at this clause, one finds that it is amending the 1978 Act; and that is is not the 1978 Act for England but a different Act altogether. In other words, the background to this National Health Service legislation is purely Scottish legislation. It is a different Act that set it up, and from a legal point of view to jump from one set of statutes to another is just nonsense. If one intends to amend the Scottish legislation it should be done by another Scottish Bill: one does not do it by way of a clause that is aimed originally at English practice.

The Scottish National Health Service is different from the English National Health Service. Even in relation to matters such as the commercial viability of chemists (as we call them in Scotland) the system in England is very different from that in Scotland. That is why I now make my objection. We should have Scottish legislation. The terms are different. I do not have a clue as to what will happen under this clause. Nobody has told me. People talk about a contract but no one has told me about a contract. One thing follows from the other, and I am inclined to agree with the noble Lord, Lord Harris, that there is more than one way of achieving the same purpose. Surely there must be a better way of doing this.

According to this Government's record, if we already had registration we should now have to consider a Bill for deregistration. I wish that the Government had been in Glasgow last weekend to see what has happened to the buses as a result of deregistration. The Government are the last of all people whom one would expect to put forward this proposal. They are now insisting on registration. It is a form of licensing, but they are not coming clean. Are they proposing this measure to cut the number of pharmacists or to save money? I suppose that it is both. They can only save money by cutting the number of pharmacists. They can only cut the number of—

Lord Mottistone

Will the noble Lord allow me—

Lord Ross of Marnock

Let me finish my sentence. They can only cut the number of pharmacists by reducing the rights that people have at present.

Lord Mottistone

The noble Lord did not mention what my noble friend said, which was to stop expansion.

Lord Ross of Marnock

The noble Baroness is hoping to stop expansion. But she is hoping to do more than that according to all the fine ideas that we have heard. We are to have relocation, adequacy and satisfaction. We shall have nothing of the kind. This power is purely negative. Unless the Government are also going to take the power of direction there will be areas which will lose pharmacies, but there is no guarantee that those pharmacies will go to areas which require them.

The Minister is getting ready to make one of her usual speeches. She has said that pharmacists will he better off as a result of loading the money onto essential small pharmacies. They have not said that in Scotland. In a letter to my friend the Member for Maryhill last year the Government said that pharmacists would be no worse off. They will not be better off, but they will be no worse off. That is why I want to see on that Bench a Scottish Minister who knows the Scottish position.

The contract in Scotland is different. I excuse the noble Baroness for being in this position. We have a new Minister of State for Scotland. I should have thought that he would have been bursting with anxiety to show us how he has mastered everything in Scotland and to justify what the Government are going to do. Where is he? I shall tell the Committee where I think he is. I think that he is probably steeped in all the coming legislation on Scottish rates about which he knows nothing. He is getting ready for what will come next year. That is not good enough. I object to the way that Scotland is being handled and to the principle involved.

We had civic government legislation which dealt generally with licensing. We licensed taxicabs, public houses and restaurants. We laid down general principles in relation to licensing applications, the reasons for them and rights of appeal. I do not know who will license the pharmacies. I have heard someone say that there will be a health service sub-committee, of which three members will be pharmacists. Before we are finished, we shall be having publicans on licensing committees. They would be laughed out of court. That is my understanding of the matter, but it is not in the Bill. The only provision in the Bill, and I have a later amendment tabled to wipe it out, is "the prescribed body". What is "the prescribed body"?

There was no Scottish Minister on the Bill and no Scottish Conservatives on the Committee when the Bill was in another place. I do not know what the outcome will be. Will the body be made up of three laymen, three pharmacists and an independent chairman?

I have heard all sorts of things about appeals, national bodies and all the rest. I do not know how national bodies will have local knowledge. I do know that the right of young chemists to set up in business has been taken away from them. It is all right for those already in business. It is a closed shop. The provision has not yet been justified. The Minister mentioned something about saving money. How much more money will the Government spend? How many quangos will be set up? There will be an appeals procedure and so on. How much will that cost? If we are going to be generous to pharmacies in the rural areas, that will also cost more money. I have heard something about compensation. That will also cost money.

There is so much upon which our judgment should depend in relation to the contract that is not in the Bill and about which we have been told nothing. We can take just so much from the noble Baroness, much as we like her, in respect of an act of faith of this kind. It is not good enough. The provision will not restrict entry into the profession but people will not be able to obtain premises.

I should have thought that the local authority should determine who should have premises. The local authority should have a say in whether there is adequate provision in its area. We brought in the local authorities when we were dealing with sex shops and the licensing of public houses. What is envisaged here is not good enough. The Government have not justified that this is the right way to do something that everyone would probably like to see done. There is no relocation here. There is only the right to say, "No" after inadequate judgment.

Lord Boyd-Carpenter

The last two speeches have been intensely interesting. With great respect to the noble Lord, Lord Ross of Marnock, and to—I was about to say "my noble friend" because in everything except the technical sense he is—the noble Lord, Lord Harris of High Cross, neither of their speeches bears on the issue which in a few moments the Committee will have to decide. Both speeches appeared to ignore the practical legislative realities of the position in which we now are.

We are dealing with a fairly small, though not unimportant, Bill. We are close to the end of the parliamentary Session. Basically, the choice before the Committee at the moment is not whether we should adopt the economically much more sensible way of dealing with pharmacies within the National Health Service, such as the noble Lord, Lord Harris of High Cross, advocated, and with which I have every sympathy; it is not a question of whether we should have the pleasure of having not one but two speeches by Scotsmen during the debate; the choice is merely whether we accept the noble Lord's amendment or reject it.

To my mind, the case for rejection was made by my noble friend Lady Trumpington in two or three sentences. As I understand it, the purpose of the clause as it stands is to save expenditure by the National Health Service on the provision of finance for pharmacists when that expenditure, I think most of the Committee will think, could be better applied to the patients whom the NHS serves. The amounts of money involved, even within the scale of the NHS, which is enormous, are substantial.

The noble Baroness, speaking with the authority of her department behind here, talked about an increase of £10 million to £20 million in successive years. When the Committee considers how much good can be done with that money inside the service, with the development of new methods of treatment, the opening of closed beds, and all the rest of it, it would, I suggest, be irresponsible for the Committee to decide that that money should be spent on financing more pharmacists rather than more health. I hope therefore that the Committee will reject the amendment.

5.30 p.m.

Lord Ennals

The noble Lord, Lord Boyd-Carpenter, chided my noble friend Lord Ross and the noble Lord, Lord Harris of High Cross, for not speaking to the amendment. I must chide the noble Lord, because his remarks did not apply to the amendment. I want to explain, since most of the debate has not been on the amendment that I proposed. It is as if I had proposed that the contract should not go through and that there should be no regulatory system. Of course, I was tempted to do that. I was pressed by many to do it. I restrained myself, however, from doing what I was pressed to do. I thought that it was right and proper that the agreement of another place to this would make it difficult and that it would be wrong for us, as non-elected legislators, to decide simply to say "no" to a contract.

I am not seeking to stop the noble Baroness and her friends in the DHSS having a system limiting the opening of pharmacies. I was surprised that the noble Lord, Lord Mottistone, should suppose that I wish to support the interests of big chains. I made clear in my opening speech that my main interest is the protection of the small high street pharmacist who does a valuable job and who is going to suffer most as a result of the contract as it has now been drafted. I would say to the noble Countess of Lour—I am sorry, Carnegy—

Baroness Trumpington

My noble friend is not a Countess.

Lord Ennals

My Lords, I have done this before, have I not? I have upgraded the noble Baroness on a previous occasion. That is only because the noble Baroness normally impresses me so much. That was not the case in her contribution to this debate. If the noble Baroness, Lady Carnegy examines my Amendment No. 6, which we shall reach later, she will see that I am concerned, as was the Nuffield Report, about the quality of pharmacists. I propose in that amendment that we should have a good practice allowance rather than the basic practice allowance. No one could conceivably say that this is to the advantage of chains. It is to the advantage of the small pharmacist who can give an invaluable service to customers and patients whom he or she knows.

So what is it I am proposing? That seems to have been lost by the noble Baroness the Minister as well as by those taking part in the debate. I propose that the Bill should state at line 30 on page 3, that a licence: shall be granted if the Committee is satisfied that there are no grounds upon which they can reasonably refuse such". Fair enough! There are plenty of grounds on which the committee could reasonably refuse to grant a licence. One is that it considers there are too many pharmacies in the area. All right, this goes against freedom. But here I am, not wishing to frustrate the noble Baroness. She could say that a particular application that had suddenly come in was a leapfrogging attempt to establish a pharmacy opposite a health centre and that this would be unfair to other pharmacies in the area.

All the arguments that would be used by the committee in reaching its conclusion could be covered under the words that I propose, namely: that there arc no grounds upon which they can reasonably refuse such". There are plenty of grounds if they are appropriate. The question that arises is whether the responsibility is upon the applicant who, up to now, has had total freedom, or upon the committee simply to prove the case. I am on the side of the applicant. I do not wish excessively to block pharmacists providing a service even if this means in some cases more pharmacies. I accept, as the noble Baroness said in her letter to me, that there are not too many pharmacies. Her letter stated, First, you asked if it is the Government's view that there are too many pharmacies. The answer is no: the problem is that while in some areas there are too many NHS pharmacies, in others—mainly rural areas—there are too few". I agree with her. I accept that there needs to be some system of restraint. I am simply trying, in a series of amendments, to make it easier for the good pharmacist to have his quality recognised and not put him at the disposal of other pharmacists who have a business interest to protect. There is a further amendment dealing with that. At this stage, I am proposing the amendment now before the Committee. It is on this amendment that a vote will be cast.

Lord Kilmarnock

Before the noble Lord decides what to do, can he clarify one matter for me? Is it not the case that he wants to strike out the word "only". In other words, the Bill would read, shall be granted if the Committee is satisfied and not only if the Committee is satisfied That does put a different construction on the wording.

Lord Ennals

The proposal is that the application shall be granted if the committee is satisfied that there are no grounds upon which they can reasonably refuse such". We could list in regulations all sorts of grounds on which the committee could reasonably refuse to grant a licence. Some of those I have touched upon; others I have not touched upon. I do not believe that the noble Lord wishes me to go into details now. It is right that the new committee to be established would be able to refuse. I am not trying to take away that right. I understand that some noble Lords would wish to do so. I am not trying to do so in this or any other amendment in my name.

Lord Harmar-Nicholls

Is the noble Lord saying that he would be prepared to accept a regulation saying exactly the same as the words that he wants taken out? If that is what he is saying—he appears to have said it a minute or two ago—why not leave the words, whether in the regulation or the statute itself? If he desires the words, what is the point of all this hoo-ha about where they appear? I would have thought that in all the circumstances—it is near the end of the Session, as already stated—we have to look at practical considerations, unless we want to lose the Bill altogether. We do not want that to happen. Let us leave the words here rather than switch them to a regulation.

Lord Ennals

I must say, in answer to the noble Lord, although I had sat down, that although we are reaching the end of the Session, this does not in any way lessen the responsibility upon your Lordships to do what we think right and to improve legislation that has often not been properly and effectively considered in another place. This is what I have sought to do. I do not apologise for one moment.

Lord Taylor of Gryfe

Because of the grouping of amendments, as the noble Lord, Lord Ross of Marnock, pointed out, the Scottish dimension intrudes in this debate. Our discussion is not entirely concerned with the word "only" within the limited scope of the amendment of the noble Lord, Lord Ennals. The amendments of the noble Lord, Lord Ross, are included in the grouping, according to my understanding.

I should like, before dealing with the general principle of the Bill, supported in general terms by my noble friend Lord Kilmarnock, to raise a Scottish anomaly, as I understand it. Perhaps the noble Baroness the Minister will take the opportunity to answer the point. I am advised by my local chemist that the practical effect is that ESPs in Scotland will be paid considerably less than equivalent ESPs in England and Wales for doing identical work for the NHS. For example, an ESP in Scotland dispensing 6,000 NHS items a year—

Lord Mottistone

What is an ESP?

Lord Taylor of Gryfe

An essential small pharmacy. It is the social obligation to provide essential services. I was about to say that an essential small pharmacy in Scotland dispensing 6,000 NHS items a year could receive £12,000 a year in Scotland but almost double—£23,000—if dispensing the same number south of the Border. It occurs to me that this is an anomaly that should be addressed by the Government. I hope that the noble Baroness will take advantage of her reply to deal with that point.

In general, we on these Benches support the legislation before us. It is not a free market situation, so much admired and supported by the noble Lord, Lord Harris. We are not talking about opening supermarkets in high streets, which stand or fall on their ability to retail. We are talking about also providing an essential community service; and it is an essential obligation on the Government to see that their social responsibility in the location of chemist shops is discharged.

There are two responsibilities. I have just mentioned one. The other is to ensure that when the Government discharge that responsibility the interest of the taxpayer is also fully protected. It is that balance which the Government have sought to achieve in this piece of legislation. It is argued that by this legislation the existing chemist will have a closed shop and will prevent the expansion of other chemists. As I understand the legislation, the committees reviewing this matter will have four lay members representing the local national health council responsible for health services in the area, as well as three pharmacist representatives. The three pharmacist representatives will obtain no advantage when judging the case before them for a licence. That, I understand, is what has been negotiated between the Government and the pharmaceutical general council, and it gives some protection.

Lord Bruce-Gardyne

I apologise for interrupting the noble Lord. I wonder about the statement that he has just uttered concerning the pharmacists participating in the committee receiving the applications. This issue comes under a later amendment with which I am concerned. Of course the pharmacists have an interest. That is why we have put forward the later amendment.

Lord Taylor of Gryfe

We have to have some respect for the integrity of pharmacists as well as others who may be sitting in judgment in such cases. Perhaps we shall discuss this at greater length when we come to that amendment. However, the taxpayer's interest, as well as social obligations, seem to me to be reasonably balanced in the legislation before us, and we on these Benches support it.

Baroness Trumpington

The Committee will appreciate that I too wish there was a Scottish Minister here, but I am afraid that the noble Lord, Lord Ross, will have to make do with me making, as he said, one of my usual speeches. It seems to me, despite the very kind words of the noble Lord, that he has not done his homework. Almost every one of his sentences began with the words, "I do not know". Last year he was much firmer. I have the excerpt from Hansard. He said: We should be given a little more time and the Government should, without any further prodding from me, withdraw this clause. That does not mean to say they cannot bring it back, perhaps at the same time as the English legislation. They could combine the two". [Official Report, 22,110/85: col. 1012.] Turning from that, I have to say that these amendments make separate provision for England and Wales by amending the National Health Service Act 1977 and for Scotland by amending the National Health Service (Scotland) Act 1978. The same is being provided for Scotland as for England and Wales. There are plenty of precedents for amending English and Scottish Acts by the same Bill—for instance, the Health and Social Security Act 1984. I can confirm to the noble Lord that in Scotland, as well as in England and Wales, the rural pharmacies in areas of special need will definitely benefit from the new arrangements.

Coming for a moment to the points raised by the noble Lord, Lord Ennals, the effect of these amendments would be to permit unnecessary pharmacies. They would not, as the Bill does, make the relevant test that of the adequacy of the services to patients. This is terribly important.

Let me clarify the response of the noble Lord, Lord Ennals, to the noble Lord, Lord Kilmarnock. The amendments, if passed, will not permit regulations to specify the grounds of refusal. In answer to the noble Lord, Lord Taylor of Gryfe, the essential small pharmacies in Scotland will also receive an enhanced payment under the new arrangements but the amounts are subject to negotiations with the pharmaceutical council in Scotland. I shall pass on what has been said to Scottish Ministers. I hope that he will understand that.

I have explained the powerful financial and service reasons for leaving this clause as it stands. I have been encouraged by the support that Members of the Committee have shown in the debate. The amendment has two objectionable features. First, it would not knock a hole through the main objective of the provision. It would also do the reverse of what the noble Lord, Lord Ennals, claimed for it. It would substitute for the clear guidelines we propose—"necessary or desirable"—no guidelines at all. FPCs would just have to invent grounds of refusal of their own. No applicant therefore would ever know what criteria applied because they would be quite unpredictable and arbitrary. My noble friend Lord Boyd-Carpenter summed up the essence of my argument in his last words. I suggest that we now put the matter to the test.

5.45 p.m.

Lord Ennals

I have only a few sentences to add, if I may. I cannot understand why the noble Baroness said that it would not be possible to have guidelines as to what should be the criteria. There is nothing here that says there cannot be criteria. The regulations will still have to be drafted and come before this House and the other House, so that argument cannot possibly be right. I feel that this amendment is too restrictive and too damaging to the normal, recognised interests, particularly of the small pharmacist, and of the pharmacy which wishes to become established in an area where the noble Baroness accepts that there is a shortage. That is the reason that I feel it is necessary to put this to the vote.

Lord Ross of Marnock

The Scottish Minister who was at that time concerned with health replied to Mr. Craigen on 22nd October last year that they were at least no worse off under the existing remuneration procedures. Can the Minister confirm that that is wrong, and that all the essential small pharmacies in Scotland will be better off?

Baroness Trumpington

I cannot answer the noble Lord, Lord Ross, concerning a Bill with which I was not involved and from which he has taken one sentence out of context. I do not think that would be fair.

Lord Ross of Marnock

Yes. However, the noble Baroness must appreciate my difficulty. There is in Scotland a junior Minister whose job is to look after the National Health Service. He replies to a Member of Parliament with regard to the essential pharmacy service saying that it will at least be no worse off. At the same time, the noble Baroness was saying that with the English service there will be greatly enhanced financial support for the essential small pharmacies. They are not the same thing; and the noble Baroness cannot answer for Scotland.

Baroness Trumpington

I have already answered. I thought that I said that essential small pharmacies in Scotland will also receive an enhanced payment under the new arrangements but that the actual amounts are subject to negotiations with the pharmaceutical council in Scotland. I shall pass on what has been said to Scottish Ministers.

5.49 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 123.

DIVISION NO. 2
CONTENTS
Ardwick, L.	Lockwood, B.
Blease, L.	Longford, E.
Blyton, L.	McIntosh of Haringey, L.
Boston of Faversham, L.	Mishcon, L.
Bottomley, L.	Molloy, L.
Brockway, L.	Monson, L.
Bruce of Donington, L.	Morton of Shuna, L.
Carmichael of Kelvingrove, L.	Mulley, L.
Cledwyn of Penrhos, L.	Nicol, B.
David, B.	Oram, L.
Dean of Beswick, L.	Phillips, B.
Elwyn-Jones, L.	Pitt of Hampstead, L.
Elystan-Morgan, L.	Ponsonby of Shulbrede, L.
Ennals, L.	Prys-Davies, L.
Gallacher, L.	Rhodes, L.
Galpern, L.	Ross of Marnock, L.
Glenamara, L.	Rugby, L.[Teller.]
Graham of Edmonton, L.	Seebohm, L.
[Teller.]	Shepherd, L.
Harris of High Cross, L.	Silkin of Dulwich, L.
Houghton of Sowerby, L.	Somers, L.
Howie of Troon, L.	Stallard, L.
Ilchesterm, E.	Stewart of Fulham, L.
Jacques, L.	Stoddart of Swindon, L.
Jeger, B.	Strabolgi, L.
Kagan, L.	Taylor of Blackburn, L.
Kilbracken, L.	Taylor of Mansfield, L.
Kirkhill, L.	Underhill, L.
Lawrence, L.	Wallace of Coslany, L.
Leatherland, L.	Wells-Pestell, L.
Liewelyn-Davies of Hastoe, B.

NOT-CONTENTS
Airedale, L.	Carnock, L.
Alexander of Tunis, E.	Cathcart, E.
Amherst, E.	Cottesloe, L.
Arran, E.	Cox, B.
Aylestone, L.	Craigavon, V.
Banks, L.	Croft, L.
Beaverbrook, L.	Croham, L.
Belstead, L.	Cullen of Ashbourne, L.
Bessborough, E.	Davidson, V. [Teller.]
Blyth, L.	Denham, L. [Teller.]
Boyd-Carpenter, L.	Denning, L.
Brabazon of Tara, L.	Diamond, L.
Brougham and Vaux, L.	Eden of Winton, L.
Broxboune, L.	Elliot of Harwood, B.
Caithness, E.	Elliott of Morpeth, L.
Cameron of Lochbroom, L.	Elton, L.
Campbell of Alloway, L.	Ezra, L.
Campbell of Croy, L.	Faithfull, B.
Carnegy of Lour, B.	Fanshawe of Richmond, L.

Foot, L.	Nugent of Guildford. L.
Forester, L.	O'Brien of Lothbury, L.
Gainford, L.	Onslow, E.
Gisborough, L.	Orr-Ewing, L.
Gladwyn, L.	Pender, L.
Glanusk, L.	Peyton of Yeovil, L.
Gray of Contin, L.	Polwarth, L.
Greenway, L.	Portland, D.
Grey, E.	Rathcreedan, L.
Hailsham of Saint	Reigate, L.
Marylebourne, L.	Renton, L.
Halsbury, E.	Robson of Kiddington, B.
Hampton, L.	Rodney, L.
Harmar-Nicholls, L.	St. Aldwyn, E.
Harris of Greenwich, L.	Saltoun of Abernethy, Ly.
Hives, L.	Sanderson of Bowden, L.
Hooper, B.	Sandford, L.
Hutchinson of Lullington, L.	Seear, B.
Hylton-Foster, B.	Shannon, E.
Ironside, L.	Shaughnessy, L.
Keyes, L.	Simon, V.
Kilmarnock, L.	Skelmersdale, L.
Kinloss, Ly.	Slim, V.
Kinnaird, L.	Stedman, B.
Knollys, V.	Strathclyde, L.
Lane-fox, B.	Sudelcy, L.
Layton, L.	Taylor of Gryfe, L.
Long, V.	Tordoff, L.
Lucas of Chilworth, L.	Tranmire, L.
McFadzean, L.	Trenchard, V.
McNair, L.	Trumpington, B.
Malmesbury, E.	Ullswater, V.
Mancroft, L.	Vaux of Harrowden, L.
Margadale, L.	Vernon, L.
Marshall of Leeds, L.	Vivian, L.
Maude of Stratford-upon-	Walston, L.
Avon, L.	Ward of Witley, V.
Merrivale, L.	Whaddon, L.
Mersey, V.	Whitelaw, V.
Monk Bretton, L.	Winchilsea and Nottingham,
Mottistone, L.	E.
Murton of Lindisfarne, L.	Winterbottom, L.
Newall, L.	Wise, L.
Norrie, L.	Wolfson, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.58 p.m.

Lord Ennalshad given notice of his intention to move Amendment No. 3: Page 3, line 31, leave out from ("satisfied"), to ("application") in line 37, and insert ("that there are no grounds upon which they can reasonably refuse such").

The noble Lord said: This is a relatively brief amendment, which deals with the question of information. As the Committee will recognise the amendment is not only in my name but is also in the names of the noble Lords, Lord Rugby and Lord Kilmarnock. It has been proposed that the regulations made under Clause 2 should include provisions for notification of the application by the committee to certain bodies, such as local pharmaceutical and medical committees, committee health councils, and bodies whose boundaries are within one mile of the proposed premises, and any NHS chemist contractors whose interests may, in the opinion of the committee, be significantly affected if the application is granted. However, there is no regulation under the provisions being discussed—

Baroness Trumpington

I am sorry to interrupt. Is the noble Lord, Lord Ennals, merely giving an explanation? Have we not dealt with this group? I thought we had had the debate on the whole matter.

Lord Ennals

I beg the noble Baroness's pardon. I recognise that the other amendments within the group have not been either voted upon or further debated.

The Deputy Chairman of Committees (Lord Nugent of Guildford)

Is the noble Lord moving Amendment No. 3?

Lord Ennals

Yes. I have already moved both Amendments Nos. 2 and 3. Amendment No. 2 was purely a paving amendment for No. 3. Amendment No. 2 has not been passed. Therefore I shall not move Amendment No. 3.

[Amendment No. 3 not moved.]

Lord Ennalsmoved Amendment No. 4: Page 3, line 47, at end insert— (" ( ) for notices to be published in any newspaper circulating in the locality referred to in paragraph (a) hereof and in any relevant trade publication which may be available in such locality of dates and times when applications referred to in paragraph (b) hereof and appeals referred to in subsection (4) hereof will be considered and determined and for such notices to refer to the names of persons considering and determining such applications and appeals").

The noble Lord said: I apologise to the Committee for having delayed the proceedings for a quarter of a minute. We are now dealing with ways in which the public may know about an application, especially those members of the public who use a pharmacist and who may want to see a pharmacy in an area in which there is not at present a pharmacy. Based on the arguments used by the noble Baroness in her letter to me, there is a shortage of pharmacists in certain areas and the noble Baroness fears that there will be an excess in others. Therefore, particularly in those areas where there is a shortage of pharmacists it is important that the public should know about the committee which has been set up with these quite extensive powers and should be able to use its influence, either through the community health council or through letters to the press or in any other way in which the public exercises influence. Therefore, the amendment requires that there should be public notification of an application by the customary means of newspaper advertisements.

The amendment also requires publication of the names of the members of the committee which will consider the application. It is designed to ensure that respresentations can be made in good time to the committee chairman if a member appears to have a vested interest. As the Bill stands, the alternative is recourse to the courts, after the committee has met, to determine an application. That is a large potential source of delay to applicants, involving financial resources for litigation (which very few have) and it is a source of unfairness for an applicant of limited means.

Therefore, as I said at the beginning of my comments, the purpose of the amendment is to ensure that the public know of the committee in order that representations may be made and so that a decision may be taken on the fairest possible basis by the committee established for this purpose. I beg to move.

Baroness Trumpington

May I be a bore again and ask the noble Lord, Lord Ennals, whether he agrees that we are taking Amendment No. 28 with Amendment No. 4?

Lord Ennals

Yes, I am so sorry that I did not mention it. I am dealing with Amendments Nos. 4 and 28.

Baroness Trumpington

I can understand the wish to ensure that details of the consideration of applications for NHS pharmacy contracts, and appeals arising from those considerations, are widely publicised. However, I do not think we need to go to such extravagant (and probably expensive) lengths as proposed in this amendment.

Last year, before legal difficulties held up the introduction of the new contract for pharmacists, draft regulations and guidance were prepared. A copy of the guidance has been placed in the Library of the House. The regulations and guidance state that when an application is received the FPC will notify the following: the local pharmaceutical committee; the local medical committee; local community health councils; any pharmacy contractor whose interests may be significantly affected by the grant of an application as far as the NHS services he provides are concerned; and any FPC whose boundary is within one mile of the premises in question. That FPC must similarly notify its LPC, LMC, CHC and contractors affected. All those notified will have the right to make representations on the application.

It would be our intention to prepare regulations and guidance on the same lines as previously intended. My own view is that this will be sufficient to publicise the details of applications and appeals. But, I should be happy to consider suggestions for strengthening the regulations and guidance.

I have said on many occasions that there are a number of important safeguards against bias and collusion in the decision-making process. Let me give the Committee some examples. To answer Lord Ennal's point about vested interests, all members of FPCs are already obliged by regulations to declare any interest in a particular issue. Our guidance makes it clear that the chairmen of appeals panels and subcommittees must establish whether or not there is any interest on each occasion. It also defines "interest" as including any employee or associate of the applicant, or any NHS contractor likely to be affected by the outcome of an application or a relative or employee of any such contractor.

I do not think that such matters are for primary legislation. Neither do I think that FPCs would appreciate money going from their budget to be spent on buying publicity which in all likelihood will come naturally, for nothing.

Lord Kilmarnock

I should like to support the noble Lord, Lord Ennals. I should have thought that the Government, having gained their main point on the essential balance in the Bill in the Vote on the last series of amendments, would be well advised to fall over backwards to counter any possible accusations of bias or vested interest that there might be in the system. To plead that a simple notice in a local newspaper or a local trade journal will cause an enormous expenditure, just does not hold up. I believe that, having gained their main point, the Government should go straight for a totally open system with regard to these applications. On those grounds, we on these benches support the noble Lord, Lord Ennals.

Lord Winstanley

I should like briefly to add two points to those which have been made by my noble friend Lord Kilmarnock in support of these amendments. First, the noble Baroness referred to the notes of guidance. She described them and said that they may well fulfil the purpose which the amendment has. She then said that she would be glad to receive suggestions on ways of improving those notes of guidance. I was wondering whether the noble Baroness will be in a position to tell the Committee in a moment by what means those suggestions should be made. Does she mean here and now or that at some stage your Lordships' House will have an opportunity of debating the notes of guidance? Alternatively, does she mean that it should be done through some entirely informal method or other approach? Perhaps she will answer that question in a moment when I have dealt with my other point.

My second point, which is of particular importance, is that in the list of organisations which will be informed under the notes of guidance, the noble Baroness specified one which I regard as being of very great importance; namely, the community health council. Certainly it is important that other contractors and other pharmacists whose interests might be affected should be informed. However, I also believe that perhaps the people who are mainly concerned arc the patients. From the list which the noble Baroness gave us, it appears that the only route of information to the patients and to the general public would be through the community health councils.

I am aware that many community health councils do not at present have the resources which they say they need in order to keep local populations fully informed of various matters. Therefore, if we are to accept the assurance that community health councils will be notified under these notes of guidance, may we be assured that the community health councils will themselves have the resources whereby they can disseminate that information to the general public in the district concerned?

Lord Prys-Davies

I should like to support my noble friend and make one or two comments of my own. The merit of the amendment is that notice of the publication will be made to the general public of the area and not merely to organisations which are active in that area. Secondly, the press itself will be aware that an application has been submitted to the appropriate committee and we can be fairly sure that it will follow the history of the application and the final adjudication. It appears to me that the fact that the press will be aware of the application, will report its history and will report its adjudication, will go some way to make certain that the committee itself will ensure that its decision is fair. After all, the decision would be taken behind closed doors, and this is yet another safeguard which we are seeking to build into the Bill.

Lord Ross of Marnock

Before the noble Baroness replies, she spoke about draft regulations being available in the Library. Would it not be far better to give us a copy rather than have us all queuing up in the Library to see these documents? Secondly, do these draft regulations include the Scottish ones? She gave me the impression that the contract, so far as concerns the Scots, had not yet been signed. Certainly she said in her recent intervention that she would pass information on to the Scottish Minister. Perhaps the Lord Advocate can help us. It used to be the great refuge in another place, when we were anxious for information, to send for the Lord Advocate. Well, he is here. Very often when the Lord Advocate came he could not help us; but I am perfectly sure that he, of all people, will be able to help us with this one. So that the position that was raised about the Scottish emergency small-pharmacy services should be clarified right away, has the negotiation in Scotland been signed? Do the draft regulations that the noble Baroness spoke about, which are in the Library, include the Scottish ones?

Baroness Trumpington

A copy of the draft guideline prepared last year is in the Library of the House. I do not think that it is too far for the noble Lord, Lord Ross, to look at the documents there. Also, there will be full consultations on the new arrangements with those most affected. I should be very happy to consider suggestions in that forum. May I ask whether the noble Lord, Lord Ross, referred to negotiations or regulations?

Lord Ross of Marnock

Both. She spoke about the draft guidelines or regulations. Are they applicable to Scotland? The position is different. The regulations may be different. It is not good enough to say I should queue up and read some English regulations. Secondly, it seemed to be implicit in what she said that the contract, which is signed by the Scottish Office with the pharmacists in Scotland, had not been signed.

Baroness Trumpington

I think the noble Lord, Lord Ross, is correct; this is coming later. The guidelines concern the English and Welsh at the moment, and the Scottish arrangements are coming later.

Baroness Carnegy of Lour

Would the noble Baroness confirm the information that I have? It is that on 9th October last year in Scotland, at a meeting of the Pharmaceutical General Council of Scotland, attended by 39 out of 44 local representatives, the new contract was accepted unanimously? Can the noble Baroness confirm whether that is correct?

Baroness Trumpington

I can indeed confirm that to my noble friend.

Lord Ross of Marnock

Accepted, but not signed.

Baroness Trumpington

I shall put a copy of the draft circular on the new contract—the Community Pharmacists (Control of Entry) Provisions—in the Library if noble Lords so wish.

6.15 p.m.

Lord Ennals

It appears no other Member of the Committee wishes to speak. I must say I am very disappointed. I find the reply most unconvincing. Having worked on a local paper, I know what the cost is of putting a small advertisement into a paper saying that an application has been received by a pharmacist to establish a pharmacy in a particular estate, where there may be no other pharmacy. Not only does it not cost much to put an advertisement in but there is a news story there as well.

When I was a constituency member, I was constantly being asked to try and get a pharmacy opened in a place that was a long distance away from the nearest present pharmacy, or to try and see if there was a sub-post office or what-have-you. I was going to say this was the every day business of country folk, but I mean of Members of Parliament.

I do not see any difficulty at all. Normally, any planning application that goes to a local authority is advertised. It does not cost very much at all. I should have thought it was very much in the Government's interest to make it known, not only for those who would possibly want to see a new pharmacist, and who would be delighted to hear of the possibility of there being a pharmacist nearer to them than there is now, but for those who may be opposed. It is useful from both points of view. I cannot understand why the Government do not kindly and politely say "Yes" to this one. It is the least controversial amendment that anyone could table.

Baroness Trumpington

I do hope that this is my last word. The noble Lord, Lord Ennals, is taking a sledge hammer to crack a nut. This really is not necessary in primary legislation.

Lord Ross of Marnock

If the noble Baroness, Lady Trumpington, will look at the civic government Scotland Act, she will find that in that piece of primary legislation these things were laid down in a very detailed way indeed. Among the people to be informed of this application, she did not mention the police. Police today are very concerned about the number of break-ins of premises. I should have thought that they would have been concerned about that aspect, and she certainly should be, too. She asked for suggestions and so there is one. Constructive as ever, I am sure she will accept it.

Baroness Trumpington

The noble Lord, Lord Ross, has my undying thanks.

On Question, amendment negatived.

Lord Rugbymoved Amendment No. 5: Page 3, line 47, at end insert— ("( ) prescribing specified maximum times between the making of applications referred to in paragraph (c) hereof and their determination, and between the making of appeals referred to in sub-section (4) hereof and their determination").

The noble Lord said: In moving Amendment No. 5, might I draw the noble Baroness' attention to the fact that there are no specific provisions under the Bill that would require the time limits to be set for the determination of applications and appeals. There is already great concern within the pharmacist profession that applications, and consequent appeals which are the responsibility of the rural dispensing committee, and the Secretary of State respectively, are taking a very long time. Many such applications are taking months to be considered; appeals likewise. It is not unusual for an application going to appeal to take as long as 18 months. Such delays are intolerable, particularly as they render impossible reasonable commercial judgment.

On an average, 70 per cent. of a pharmacist's income derives from NHS dispensing. Generally speaking, a pharmacist is not in a position to take a commercial risk until he has a contract under his belt. He will also need to secure premises in order to make an application reasonable. He may delay signing a lease for a few weeks, but not longer. Therefore this amendment requires the regulations to set a maximum time limit for the determination of applications and for appeals.

Baroness Trumpington

Would I be right in thinking that Amendment No. 5 is being taken with Amendment No. 29?

Lord Rugby

Yes.

Baroness Trumpington

One of our main objectives for the new arrangements for allocating NHS pharmacy contracts is to make sure that applications and appeals are dealt with efficiently and promptly. Therefore I support the intentions behind this amendment. However, I am afraid I cannot support the amendment itself. I do not think that setting absolute maximum time limits for the bodies dealing with applications and appeals is the best approach. It would certainly not be usual. Some decisions will take longer than others. Limits would either be too long to be effective or too short in complex cases to allow the time necessary for fully-considered decisions.

The regulations will provide for time limits for those who wish to make representations about an application or who wish to appeal. For example, those notified of an application, such as the local CHC, will have 30 days to submit representations on the application. Again, a person wishing to appeal against a decision of the FPC sub-committee will have to do so within 21 days from when he was notified of the decision.

In addition, the draft guidance says that FPCs should do everything in their power to ensure that decisions are reached and notified quickly. It would be exceptional for a pharmacy practices sub-committee decision to take longer than two months and for an appeal panel decision to take longer than three months. It is also intended that the regulations shall provide that a committee shall, as soon as practicable, notify an applicant, or persons who have made representation on his application, of its decision, the reasons for it and their right of appeal.

This shows our firm intention to ensure that applications and appeals will be dealt with as promptly as good administration allows. Therefore I hope the Committee will agree that this amendment is, in the circumstances, not required. Perhaps I may also give the assurance that if, once the new arrangements are in operation, there is evidence that the time taken to reach decisions is too long, the Government will take all reasonable steps to ensure the efficient and effective administration of the system.

Lord Ennals

I am grateful for what has been said by the noble Lord, Lord Rugby, in moving this amendment. I also welcome the assurance given by the noble Baroness that if things take too long she will reconsider it. I wish she had accepted it as it was. As she hinted, the draft regulations will stipulate the precise limits of the period in which an appeal may be lodged. If that can be done, I should have thought that a time limit could be given for the application. However, the noble Baroness has said that if things go wrong she will look at it again, and I think it would be discourteous of me not to accept that. I hope that the noble Lord, Lord Rugby, will accept it, too.

Lord Winstanley

With respect, I think that the noble Lord, Lord Ennals, is under a misapprehension with regard to what the noble Baroness said. The noble Baroness told the Committee that if, when this Bill is enacted, it subsequently transpires that these decisions are taking too long, the Government will take whatever steps are necessary to remedy that.

Baroness Trumpington

That is right.

Lord Winstanley

That is rather different from saying that she would consider this suggestion and perhaps allow us to do something about it at a later stage of the Bill, which is what the noble Lord, Lord Ennals, appeared to have in mind.

The noble Baroness began her remarks to the noble Lord, Lord Rugby, by saying that she sympathised with the intention of this amendment but did not feel that this was the right way of doing it. She did not tell us the right way. Then she said that an unusual length of time in coming to these decisions would be very rare indeed, but that if at a later stage the Government found it was not rare but was happening, they would take some steps.

All that this amendment suggests is that steps should be taken now to deal with a situation that the noble Baroness has told the Committee is unlikely to occur often. I accept that the amendment is non-specific. It does not say what the time should be, or deal with the difficulties that there might be in prescribing a fixed time limit. But as the noble Baroness has told the Committee that she agrees with the intention of the amendment, would it not be more appropriate if she now agreed to take this away and think about it again to see whether it proves possible to introduce something at a later stage of this Bill? This would make it unnecessary for the Government to act as she said they might if, after the Bill has been enacted, they find that there is a need for what is now suggested. May I ask her to consider it in that way?

Baroness Trumpington

Again, in a way this is not an absolutely vital point of life and death, but it makes it too rigid to immediately set absolute, maximum time limits. This is either something that becomes obvious once the machinery is set up or there is no need for it. Although I understand why the amendment has been moved, I think it would be a pity to set absolute, maximum time limits on something which may take less time, but could take longer. It would be a pity if every possibility had not been examined simply because there was a maximum time limit imposed.

Lord Rugby

I think what I said was that at the moment, on certain occasions, it was taking up to 18 months, which is an intolerably long time. If the noble Baroness will accept that people who wish to make decisions with regard to leases and all the rest of it are entitled to, and should, obtain much earlier decisions, I shall leave the amendment.

On Question, amendment negatived.

6.30 p.m.

Lord Ennalsmoved Amendment No. 6: Page 3, line 47, at end insert (" ( ) for the replacement of the Basic Practice Allowance by a Good Practice Allowance, provided that no pharmacist dispensing less than 16,000 prescriptions per year is worse off financially as a result of the change.").

The noble Lord said: This is a rather novel amendment in the sense that it introduces a quite new basis of patent by replacing the existing practice allowance of £3,000, which goes to almost all. though not all, pharmacists by a good practice allowance. My reason for introducing this amendment—and I shall deal with the second part of it later—is the Nuffield Report.

In the Nuffield Report, a great deal of emphasis was placed on the improvement of the practice of pharmacy and the role that a good pharmacist can play in the community. They recognised (and I strongly support this) that often a small pharmacist—as the noble Lord, Lord Rugby, reminded us, 70 per cent. of the income of most pharmacists, on average, is through the National Health Service—knows his patients. When prescriptions come into the high street pharmacy I have often seen it happen—and many others have told me that it happens—that the pharmacist may say after looking at the prescription, "This seems to be a little different from what you had last time"; or, if it is a new prescription, "Look, dear, did you tell the doctor that you are also on warfarin? If you are on warfarin, then what has been prescribed is not really very safe for you".

Then the good pharmacist will telephone the doctor and say, "Did you really mean this? Did you know so-and-so, and so-and-so", and an adjustment will be made. This is the great value of a small pharmacist who is used to the people in his or her area who come in for service. There is an advisory role that a good pharmacist can fulfil.

We debated the excellent report of the Nuffield Committee at considerable length on the initiative of the noble Lord, Lord Hunter. They themselves recommended, as the noble Baroness will remember, that the payment of pharmacists should move, and that we should work out a system by which pharmacists are rewarded for good service.

Of course it is not just a case of the kind of incident that I described initially. There are other factors. Is there a little consulting room? How much space is allocated within the pharmacy for the pharmacist giving advice to the patient? There is a whole variety of issues touched on by the Nuffield Report that I do not want to go into in detail. We touched on many of them in our debate.

What I want accepted by the Minister is the principle of an across-the-board £3,000 a year basic practice allowance, which often, as she has said, will go to a firm where only a small percentage of the turnover will be NHS prescriptions. As I said from the start, I am concerned about those pharmacists for whom the NHS contract is extremely important. I do not want to see good pharmacists put out of business. One could work out a points system by which the basis of a good practice allowance could be determined, depending on some of the factors I have mentioned and a whole range of other factors discussed in the Nuffield Report.

The second part of my amendment reads: provided that no pharmacist dispensing less than 16,000 prescriptions per year is worse off financially as a result of the change". The Committee will recognise the significance of 16,000 prescriptions, because that was introduced during the time I was Secretary of State and I inherited a situation where the number of pharmacists was dramatically going down. To stop a further decrease I weighted the payments to the advantage of those who were dispensing only a limited number. Fortunately, that was successful and stopped what might have been a dangerous reduction in the number of pharmacists.

I do not want to go contrary to the wishes of the Government and speed up the increase in the numbr of pharmacists in an uncontrolled way. I accept the general principles of the contract, except some of the matters in past amendments and in later amendments. I do not want to see my local pharmacist — on whom I rely very much because he regularly dispenses for me the medicate on that I need, and also dispenses for others who live in my area— go out of business. He knows that under the new contract he will be considerably worse off. There is no question about that.

The Government and the PSNC recognise that several hundred—I believe it has been estimated there will be 300—small pharmacists are likely to go out of business and will receive the compensation that has been set aside, which I believe is £25,000 a year. I do not want to see most of them go out of business. I want to see people improve the quality of the service they provide. We should abolish this basic practice allowance, which bears no relationship whatsoever to the quality of service, and give an inducement for good-quality service. That inducement might vary as the years go by so that people rise in what I was going to call the Richter scale but what I should call the payments scale, for the quality of work they are doing.

I want to see none of the small pharmacists dispensing under 16,000 prescriptions worse off financially as a result of change. I do not want to see some of the best pharmacists in the country—small men and women, often on their own, doing a great service in the community—being pushed out of business as a result of this contract. The Government know that will happen unless something like this is done.

If the Minister says I have worded the amendment badly, so be it. I shall come back at Report stage with something better unless she can promise to come back at Report stage with something better. It would be rather absurd if, having debated the Nuffield Report, having accepted what a good report it is and what good advice it has given, now that we are actually legislating, we did nothing to put into real action some of the recommendations made by the Nuffield Committee. This is one of them. I beg to move.

Baroness Trumpington

I realise that the noble Lord, Lord Ennals, introduced the basic practice allowance and is sad to see it go, but this amendment just will not do. First, it deals with the details of the retail pharmacists' remuneration structure, which is not a matter for Clause 2 or primary legislation. Secondly, consideration of a good practice allowance is a matter for negotiations between the DHSS and the retail pharmacists' representatives. This amendment would restrict unnecessarily any such negotiations.

Thirdly, this amendment would allow, in certain circumstances, the continuation of the basic practice allowance. As part of the new contract package the basic practice allowance is to be abolished because it bears no relation to the number of prescriptions dispensed. This amendment would therefore force us to go back on the agreement reached, after over a year of negotiation, with the pharmacists' representatives. It would also remove the market incentive to efficient practice which we negotiated into the agreement and which a number of noble Lords on my own side will no doubt be sorry to see lost. I should add that in Scotland there is no basic practice allowance. Small pharmacies manage well enough without it.

Fourthly, the new contract package contains two features to help the small pharmacist. The financially enhanced essential small pharmacies scheme will give essential small pharmacies a guaranteed minimum income. Also, under the new contract, pharmacies will be encouraged to be more efficient through changes in the pattern of remuneration. This will put pressure on some small pharmacies which have high unit costs and which cannot be justified in places where there is already adequate National Health Service services. For two years, therefore, there will be a system of payments to pharmacies which wish to relinquish the National Health Service contract—the incentive payments scheme.

A final point: I am not ruling out the concept of a good practice allowance for pharmacists. What I am saying is that it is a matter for negotiation between the DHSS and the pharmacists' representatives in the context of the Nuffield Report into pharmacy and the Government's discussion document on primary care services.

Lord Ennals

I am grateful to the noble Baroness for the comments she has made and for some recognition of what lies behind the Nuffield Report. I do not take credit for that. I am giving credit to the Nuffield Committee for wishing to do something like this.

The noble Baroness said that primary legislation was no place to do it. But it was the Government who decided that they had to bring the basis of the new contract before Parliament. Parliament did not decide. The Government decided that they needed to come before Parliament. They were advised legally that what they proposed to do was illegal unless they had some parliamentary backing for it. Therefore if the Government come before both Houses of Parliament with a new type of contract, most of which will be based on regulations, this Chamber is properly entitled to suggest what should be in those regulations. That is what we are doing at the moment. I am suggesting that this should be part of the regulations.

I can understand the noble Baroness saying that we do not want to return to this 16,000 figure, but I cannot understand why the Government seem so keen to encourage good pharmacists to go out of business. For the life of me, I do not understand why they want to see a reduction in the number of pharmacists, particularly as most of the pharmacists will in a sense be pushed out because of the absence of the £3,000 they receive on the good practice allowance, the absence of the weighting according to the number of prescriptions that they give, and the compensation that they will be paid. I think that is a nonsense. It would be sensible for the Government to consider those matters.

Surely they have studied the Nuffield Report. It is not just I who have studied the Nuffield Report. This is a good opportunity for suggesting there should be this provision within the regulations. The subsection states that the regulations shall include provision for different matters. I want to see some provision for the replacement of the basic practice allowance by a good practice allowance. This is the recommendation made by the Nuffield Report and I do not understand why the noble Baroness thinks that this is not the right time to do it.

I am not going to press this to a Division, I can assure the noble Baroness, but I hope that by the time we come to the Report stage she will have come forward with some proposal that will recognise the wisdom of the Nuffield Report, which she herself expressed, as I did, in the debate in this House opened by the noble Lord, Lord Hunter. If she does not do so. I shall come forward with some other recommendation along these lines which will stipulate some of the provisions which should be in the regulations that the Government have to draft.

Lord Winstanley

The noble Baroness in her reply appeared to suggest among other things that one of the reasons for resisting this amendment was that it would in some way undermine the essential small pharmacies scheme, to which reference has already been made. I know that she has already been questioned about the apparent disparity between the scheme as it would work in England and Wales and as it may work in Scotland. Also, I know that my noble friend Lord Kilmarnock has the intention of raising the point again later. But this perhaps is another time at which I can raise it.

Can the noble Baroness explain clearly how it is that we are informed that under the scheme—the scheme which she has just recommended to us as the reason for not accepting this amendment—an essential small pharmacy in Scotland doing precisely the same work as an essential small pharmacy in England and Wales will receive considerably less money? I believe that my noble friend Lord Taylor of Gryfe asked her that previously and I understand that the answer was not wholly to his satisfaction. I know that my noble friend intends to ask her again on a later amendment. Since she has already raised it on this amendment, may I press her to give an answer? She said that it is the essential small pharmacies scheme which will be attacked by this amendment and that that is the reason why we must not support the amendment. Can she explain that anomaly with regard to the essential small pharmacies scheme?

Baroness Trumpington

Let me go back to something that the noble Lord, Lord Ennals, said. He is mistaken. Only one element of the new contract has been brought before Parliament and that is the control of entry provisions. If I may go back to what I originally said, it was that in Scotland there is no basic practice allowance and that they were managing okay without it. The financially enhanced essential small pharmacies scheme will give essential small pharmacies a guaranteed minimum income. It is a matter of separate negotiation in Scotland and therefore there would be a different conclusion. But under the new contract—and I fear that I am repeating myself—pharmacies will be encouraged to be more efficient through the changes in the patterns of remuneration. The point is that for two years, if they see themselves as not being financially viable under the new scheme, they will have the opportunity to be paid a sum of money which will make it worth their while to move their businesses elsewhere.

If you have in London (which is the example given before) some 40 pharmacies in one street, this from the NHS point of view is ridiculous. Therefore, those pharmacies would have the opportunity for the next two years to claim a premium in order to start again elsewhere.

6.45 p.m.

Lord Winstanley

I have listened closely to that explanation. The noble Baroness will know that some of the points that she mentioned at the end of her speech are the very reasons why we on these Benches were supportive of this part of the Bill at Second Reading. Nevertheless I must come to the specific point raised in a letter to me and, I understand, also to my noble friend Lord Taylor of Gryfe. It says this: An essential small pharmacy dispensing 6,000 NHS items per year could receive £12,000 in Scotland but almost double—£23,000—south of the border". Is that true or is it untrue?

Lord Ennals

Would the noble Baroness like me to say something before she replies? I am coming to her aid. She was referring to what this Bill did and to this small licensing system. But on pages 3 and 4 of the Bill it goes into considerable detail about what the regulations shall include. It goes through heads (a), (b), (c) and (d) and then it goes into what the regulations may include. That is fairly detailed stuff. For fear that she may say that some of my later amendments are going into much too much detail, I want to say that she is laying down in legislation— admittedly part of it is "may" rather than "shall"—the pattern of the regulations which will be issued.

Baroness Trumpington

I had hoped for manna from Heaven but I do not think that I got manna at all! The remuneration of the essential small pharmacy in Scotland may differ from that of a similar pharmacy in England. It depends upon the individual circumstances of the pharmacy. Scotland has separate negotiations and they may come to a different result. The noble Lord asked me a specific question about money. May I write him between now and Report stage and send a copy to the noble Lord, Lord Ross of Marnock? I think that I should answer this specific point.

Baroness Robson of Kiddington

May I ask the noble Baroness whether perhaps the difference does not have something to do with the division of the money that the Government are putting up to support essential small pharmacies, and that too small a proportion is going to Scotland?

Baroness Trumpington

The noble Baroness is asking me to pre-empt my promise to reply in writing to the noble Lord, Lord Winstanley. I simply cannot answer her now.

Lord Ross of Marnock

The noble Baroness will remember that one of her criticisms of me in respect of this Bill and in respect of Scotland was that there was so much of it that I did not know. May I suggest that she admitted ignorance? She does not know, and that is all the more reason why we should have somebody here from Scotland in the Government who does know. It is the Secretary of State for Scotland and not the DHSS who does the negotiations in Scotland. There is a Scottish Minister who has health as part of his concern, and he is not here. I think that we are grateful to the noble Baroness now. She tells us that Scotland is different; she does not know exactly how different. We have the staggering figures sent by Mr. Park, I think, from Paisley and now we are not getting the answer. I trust that we shall get it before Report stage.

It is obvious that this contract is based upon the fact that the Government are going to restrict entry into the profession. That is what we are dealing with here. None of these regulations has anything at all to do with remuneration. They are purely guidelines as to how the Government are to act in respect of the restrictions of the present freedoms to set up in business as a chemist. Is it not time that we were given not only these guidelines but, if and when these contracts are signed, we should be given a copy so that we know both sides of this equation, this balance of interest, with the Government on one side and the chemists on the other?

On Question, amendment negatived.

Lord Ennalsmoved Amendment No. 7: Page 3, line 47, at end insert— ("( ) for applications to which this subsection relates to be determined only by persons who are not specified upon any list under paragraph (a) hereof and by employees of such persons").

The noble Lord said: This amendment also deals with the nature of the licensing system and what should and should not be in the regulations. As I understand it, it is at present proposed that the subcommittees of the FPCs, sitting in judgment on applications, should comprise seven people (including the chairman), three of whom are pharmacists or existing NHS contractors, who may or may not be pharmacists, and three lay people. Thus it is proposed that applications should be judged by a committee, of which three members may be competitors of the applicant or may be employed by a competitor of the applicant.

A requirement that members should declare any interest they may have in an application is not an acceptable alternative to the requirement that contractors and their employees should not play a part in determining an application. At the very most, the role of the pharmacists on the FPC sub-committee of seven should be purely advisory, as the Government have accepted should be the case in respect of the appeals procedure. It seems to me that they were very wise to do that in connection with the appeals procedure, and I believe they should do the same in this case also.

The Government have accepted and announced that appeals will be heard by a committee whose members are drawn from a national panel, but members who are pharmacists will not be allowed to vote. That is quite right. They will sit on appeals only in an advisory capacity: that is quite right. It also follows—and again it is in line with the strong recommendations of the Nuffield Report—that similar persons, sitting as members of an FPC subcommittee, should also not vote in determination of an application. I think it is important that the structure should make clear that those who have business interests are not able to vote against an applicant for a new NHS contract. Of course I am not arguing they should not be present. I think that the sense is in pursuing what the Government have accepted in terms of appeal.

The amendment also largely removes the danger of action in the courts in the event of its being claimed after the determination of an application that an interest in the application by a member of the subcommittee has not been declared or that appropriate action has not been taken in respect of such a declaration by the chairman or the committee. By not allowing the contractors and their employees to play a part in determining an application, the risk of there being interests which require declaration will be diminished.

Apart from that, I think it would be much appreciated and recognised by the public that there is something wrong in a committee of which three members could be practising pharmacists in the same area and would be able to vote down an application from another pharmacist to set up a pharmacy in an area which may desperately need another pharmacist but which may take away some of the business of those who, as things are at present, would have a voting right. I think that not only should justice be done but it should be seen to be done. Unless this amendment is carried, not only will justice not be done but it will be seen not to be done.

I ask that on this occasion the noble Baroness will not simply turn down the amendment, as she has turned down every amendment that has been moved today. It really is not right that the only way in which we can get the Government to see sense is to defeat them in the Division Lobbies. Occasionally there are cases—and I believe this is one—where the good sense of the Committee as well as of the Government says that those who have an interest in keeping pharmacists out should not be involved in the process of keeping pharmacists out.

I ask the Committee's forgiveness. I should have said that, with this amendment, I am speaking also to Nos. 11, 14, 30 and 36. I beg to move.

Lord Bruce-Gardyne

I rise to support the amendment moved by the noble Lord, Lord Ennals. I wish also to support particularly Amendments Nos. 7 and 14, which, as the Committee will be aware, refer to entitlement to participate in the sub-committee of an FPC and also in the appeal procedure.

I should like to say one thing following what the noble Lord, Lord Ennals, was saying, because in a sense, if he will forgive me for saying so, he seemed to be arguing to some extent against the thrust of Amendment No. 14. He was saying that the model we should take is that which the Government have produced for the appeals committee, where members of the pharmaceutical contracting profession could participate but not vote. I must say I am not altogether happy with that, though I concede that it is an improvement on what is suggested for the subcommittee of the FPC, where the local contracting pharmacists would not only participate but also vote. I would rather see them out of this procedure altogether.

On one of the earlier amendments, my noble friend said two things which I must admit left me slightly worried. She will of course correct me if I have misunderstood her. I understood her to say, when we were discussing Amendment No. 2, that the Government must stick with the contract that has been agreed with the profession. I have to say to my noble friend that the Government may propose that we should stick with such a contract, but under this legislation it is for Parliament to determine; and I have to confess that the whole principle of permitting those in a profession to have a powerful, if not a decisive, voice in the access to it from others in the profession sticks in my craw. I still have not heard anything, whether on Second Reading, when we were discussing these matters last year on the Scottish Bill, or during our deliberations on the earlier amendments today which alters my objections to that fundamental principle. It seems to me entirely wrong that we should be giving to members of a profession an effective control over entry into it.

The other remark my noble friend made earlier, which I must admit made me a little anxious, too, was to the effect, "Let those who know best decide". It depends what it is that they know best. If what they know best is, very reasonably, the protection of their own commercial interest then I have to say that I do not think that is the best way to come to decisions.

Let me make the position quite clear. I was challenged on Second Reading by my noble friend Lady Gardner, who is not here this evening, who accused me of suggesting that three was a majority of seven. I subsequently checked the record, and that was not actually the solecism that I perpetrated. Of course I accept that three is a minority of seven—I have got that far in mathematics—but I would still submit that where you have three people engaged in a profession sitting on a committee of seven, of whom the other members are lay members, it is inevitable that those three are going to have a decisive influence on the way decisions are taken.

I remind the Committee—and I believe this is a point which has not so far been made on these amendments; it is highly germane—that the Office of Fair Trading notified the Government that it was deeply concerned about precisely these provisions of this Bill on the grounds of competition policy, and that it believed that if these provisions were allowed to stand in Clause 2 of this Bill, that would have a serious and damaging effect on competition for the custom of the users of chemist shops and pharmacies up and down the country.

I would not for one moment suggest that the Office of Fair Trading is the ultimate arbiter elegantiarum in these matters but it is a significant voice. As I understand it, and my noble friend will correct me if I am wrong, it has expressed its opinions on these matters in fairly forceful terms. I therefore must say to my noble friend that I remain of the view that it is essential that we should have pharmacists, who are themselves in the business of taking a contract from the NHS, taken out of a voting role and indeed, I would argue, out of participation both in the subcommittee of the FPCs and in the appeal committee.

Perhaps I may emphasise one final point about Amendments Nos. 7 and 14, to which I am speaking. There is nothing in these amendments to prevent pharmacists who are not National Health Service contractors—for example, hospital, industrial or educational pharmacists—from serving as members on the committees. We are talking exclusively about a prohibition on participation by those in the trade who are therefore in competition with those seeking entry. To my mind that is a fairly fundamental principle which we should observe in approving Clause 2 of this Bill.

7 p.m.

Lord Harris of High Cross

May I say that from the Cross-Benches one sometimes detects a note of what seems to be somewhat exaggerated contention on many issues. However, I have seldom found myself facing an issue that seems to me to be, in some sense, such a deep outrage. This comes before us as an amendment Bill but it destroys entirely the whole basis of the contract. Perhaps the location of pharmacies has proved to be unsatisfactory, though it seems we are not sure whether there should be more or fewer of them. However, instead of persevering with the effort to find a way of loading the market, if you like, in order to encourage those facilities in urban and rural areas that would be valuable to the National Health Service and leaving it to the commercial judgment of retailers to come into the market and take their chance, the Government have embarked upon a course which is deeply shocking and which says to the vast majority of professionally qualified pharmacists, as the noble Lord, Lord Bruce-Gardyne, has just said, who are in hospitals, research, the academic world or in industry, that there is no future for them in their ambition at some stage to set up as a chemists shop. It says, "There is no future for you because your application will come before a committee which is a hanging committee, a committee with life or death powers (or, more correctly, life or abortion powers before you can get established) and you will be frustrated." That subcommittee, as we have heard, is comprised of three pharmacists who may be contractors or their employees with an interest against further chemists shops being established.

Recently the Home Secretary, with surprising clarity of mind, may I say, suddenly discovered that one of the great problems in our society was that the public and general interest becomes obscured by pressure groups and sectional interests. He might almost have been reading the words of Adam Smith who, 200 years ago, said, in a quotation which people do not always get quite right, People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices". An earlier speaker said that we must have some faith in the integrity of people. I have a lot of faith in that integrity, but I believe that chemists would not be doing justice to their own businesses and their families if they were altogether to avert their eyes from the possibility of shielding their income and the capital value of their business from competition by obstructing free entry of newcomers into the market place. This is so because the economic effect of all restriction on entry, everywhere and at all times, is to increase the incomes and capital values of the incumbents. That is why trade associations are so given to the notion of closing the door to new entrants. I have heard one estimate that, if this monstrous arrangement goes forward, in some areas the goodwill of established chemists may rise by tens of thousands of pounds. Someone wishing to come into the market, faced by the hanging committee devised to keep them out, will find their only way into the market is through buying an existing business. There will be a premium to be paid and the payers of that premium are less likely to be small independent pharmacists than they are to be those large scale pharmacists against which I detected earlier some (as I think) unjustified enmity.

The whole clause is a horror. I implore the Minister to ponder the fact that this is an extremely modest amendment. Amendment No. 7, which goes with Amendment No. 30 applying to Scotland, does not even say that pharmacists shall not sit on this subcommittee which has the power of life and death over new entrants. It says that they may sit but that, if they are contractors or the employees of contractors, they shall not vote. In other words, we have the same situation as that in the appeal procedure which the Government have conceded.

If we are to go through the night with these amendments and see no glimmer of response from the Government, then tempers are liable to become very frayed indeed. Of all the amendments which have my support, this amendment seems to me to be just and the one which the Minister could accept with the least offence. I suppose that we are entitled, in this privileged assembly, to say that it is believed that the department did in fact propose to the Pharmaceutical Services Negotiating Committee that they might do the decent thing and no longer insist on the right to vote if they were contractors. It is believed that some such conversation took place, I think in the month of September. It is rumoured that the PSNC, so determined was it to insist on the right to exercise its influence against any kind of new entry, said that it might withdraw from the contract if the Government had the gall to ask it to do the decent thing and surrender gracefully its disputed right to vote.

I urge the Minister to call the bluff of the PSNC and take away from the contractors' and their employees' representatives on local sub-committees the right to vote on the matter of whether or not a chemists shop should be allowed to establish itself in the high street. If the PSNC then said it would tear up the contract, I privately would be delighted. I predict, however, that it would accept it as a reasonable amendment and a reasonable change and would go along with what it already has—nine-tenths of the cake.

Lord Kilmarnock

Before the noble Baroness replies, perhaps I may say that a powerful case has been put forward against having three local voting pharmacists. It seems to me that the Government may not have properly prepared this part of the Bill. I understand that the Pharmaceutical Society has suggested that, of the three pharmacists on the sub-committee, one should be nominated by the society itself and should not therefore be a local pharmacist. This would reduce the local pharmacists' representation to only two members of a sub-committee of seven. I wonder whether the Government have given any consideration to that.

Secondly, however sympathetic one is to the point made by the noble Lords, Lord Bruce-Gardyne and Lord Harris of High Cross, who certainly put their points with a great deal of passion and conviction, this might produce a little difficulty. If one removes the vote from the three pharmacists and the chairman has a casting vote but not a deliberative vote, a decision on an important matter of this nature could be taken by the votes of only two people within a committee of seven. I am simply suggesting that that ought to be taken into account. The central thrust of the debate has been that the Government ought to take away the whole question of the composition sub-committee and see whether they can come back with something that is a little more satisfactory to the whole Committee.

Lord Rugby

I wonder whether the noble Baroness is inclined to state exactly why the pharmacists are there in the first place. It seems to me that what the committee would require of them would be of a technical description. I cannot see that it would want anything else. The committee is perfectly capable of subpoenaing people to come along to give it such technical advice as and when it is needed. So far as I, and I think most other people, are concerned, the fact that pharmacists are there, can simply declare an interest and then be accepted as though their hands are clean, is utterly unacceptable.

Baroness Trumpington

Perhaps I may answer some of the points that have arisen during this debate. My noble friend Lord Bruce-Gardyne quoted me as saying "Let those who know best"; and that was directed towards the FPCs in deciding on their locality and the services supplied therein for all the contracted professions—doctors, dentists, pharmacists and opticians.

My department has had long and detailed discussions with the Office of Fair Trading. It is true that the Office of Fair Trading has expressed reservations about limiting entry to the NHS pharmacy contract. It is perfectly entitled to do so and we understand its concerns; but it has no responsibility for NHS spending. I must say that it seems to have great difficulty in appreciating the balance of interests that the Government have to reach.

In answer to one of the points made by the noble Lord. Lord Harris of High Cross, we are not restraining trade to achieve a better service; we are changing the system so that the NHS can decide who should provide its pharmaceutical service. Neither are we wiping out the careers of budding entrepreneurial pharmacists. The Government have made it quite plain that the service must repond to changing demand. If, say, a new shopping centre opened or a new housing estate were built, we should expect the pattern of pharmaceutical services to adapt to the new situation.

There will be opportunities for new contracts. The main change is that the prospective contractor will have to consider a little more carefully whether there is an unmet demand for services to be fulfilled. It is illogical to state that just because someone has a professional qualification he is entitled to practice regardless of the demands for his services or the needs of the patient and taxpayer. Neither is our purpose to protect current contractors. Changes in the pattern of remuneration will encourage pharmacists to be more efficient and there will be added incentives to the better practices. As I have already said, why should not the NHS decide to whom it allocates contracts to provide services for its own customers? Just as the Ford Motor Company chooses who should sell its cars, to provide an efficient service the NHS needs to be able to choose who should sell its pharmaceutical services.

On the other hand, I have been listening very carefully to the arguments put forward by noble Lords. I make no commitment but I hope that noble Lords will allow me to take another full look at this aspect of our agreement with the pharmacists, and perhaps we may then return to this matter at the next stage.

Lord Ennals

I am grateful not only to noble Lords from all parts of the Committee for their support for this amendment but also to the noble Baroness for agreeing to take it away and think about it again. We shall look very carefully at her reply when we come to Report stage. I agree with other noble Lords that this amendment raises absolutely crucial principles. The noble Baroness must recognise that; otherwise she would not take it away. With those thanks, I beg leave at this stage to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hooper

This may be a convenient moment to take a break in the Committee's proceedings until 8.15 p.m.

[The Sitting was suspended from 7.15 to 8.15 p.m.]

Lord Ennalsmoved Amendment No. 8: Page 3, line 47. at end insert— ("( ) for any applications from persons who have carried on business pursuant to entries which have been removed under paragraph (d) above not to be considered in prescribed circumstances").

The noble Lord said: I believe that by agreement Amendment No. 27 is to be taken at the same time. During the first two years of operation of the new contract arrangements it is proposed by the department, as I understand it, that compensation—although nothing is said in the Bill. one must learn by leaps—which could amount to more than £25,000, may be paid to contractors who voluntarily surrender their existing NHS contract.

It seems to me that unless specific provision is made it would be possible for such persons, either immediately or at a later stage, to make an application for a new contract under the same name or with a new business name in the same or a different FPC area. I suspect that this could be a substantial loophole, which could prove costly to the NHS and therefore to taxpayers. As matters stand at the moment that could happen, and there is no doubt that the noble Baroness would not want to see that sort of skulduggery any more than I would.

The amendment makes specific provision for the regulations to prohibit the consideration of applications made in the circumstances I have outlined, where a person is using another name or another firm. By using the words, persons who have carried on business pursuant to entries which have been removed under paragraph (d) above", the regulations would embrace new applications by the same person or persons under a different business name. The use of the term "prescribed circumstances" in the amendment is loose enough to allow flexibility in the formulation of regulations so that only deliberate exploitation of the compensation arrangements would be prevented.

I hope this will be seen as a service to the Government and I look forward to a rapid response from the noble Baroness. I beg to move.

Baroness Trumpington

During the debate on the Bill in another place, the then Minister for Health agreed to look again at the system of payments to pharmacists who wished to relinquish their NHS contract or to relocate their business to areas where they could better serve patient needs. The aim was to ensure that the incentive payments scheme will work as intended and that there will be adequate safeguards against abuse. Possible extra safeguards were considered, including changing the primary legislation.

The proposed system already has a number of important safeguards. It will operate for two years only. Small pharmacies only will be eligible. There is no opportunity for someone to open a pharmacy and then quickly close it to obtain a payment. Under the new arrangements a new National Health Service contract will be granted only where it is necessary or desirable for patient services. Therefore, new pharmacies will be opened only where patient needs dictate. Also, both the Pharmaceutical Society of Great Britain and the Pharmaceutical Services Negotiating Committee have given the assurance that they will be playing an active role to make sure that the system operates as intended.

Given the assurances of the PSNC and the PSGB, and the in-built safeguards, the Government do not intend to introduce any extra safeguards, I therefore submit that this amendment is unnecessary.

Lord Ennals

I find most of what the Minister has said very encouraging and reassuring. There is just one little worry—and it was on a previous amendment that the noble Baroness has taken back for consideration—concerning the composition of the committee which will decide on the contracts. If we come back with an entirely different set of seven members—or five or 12 or whatever number the committee consists of—and if none of them is a contractor, it may very well be that the PSNC will be in no position to impose its will upon those whom it does not represent. Since the noble Baroness has undertaken to look at the composition of the committee, will she look again at this issue, which is a related one, because assurances given in good faith by the PSNC might not be able to be carried out if the composition of the Committee is substantially different, as I proposed in the amendment that the noble Baroness was kind enough to agree to consider.

Baroness Trumpington

The noble Lord, Lord Ennals, will probably be aware that this matter was raised in another place and that the then Minister of Health agreed to look at it again. He did look at it again most carefully, and he was not of a mind to introduce any extra safeguards. I rest by that decision.

Lord Rugby

One of the problems with this question is that the capital sum of £25,000 having been acquired, it can then be moved or transferred, possibly to another member of the family or someone with a different name, in a different format, and interest can still be maintained in a business by someone who, having accepted the money, should be in a totally different way of life altogether. I think there are dangers that this activity can be disguised.

Baroness Trumpington

I can only repeat that I think there are sufficient safeguards already.

Lord Ennals

I shall not press the matter at this stage. It is a matter to which one can return at Report stage, so I shall withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Kilmarnockmoved Amendment No. 9: Page 3, line 47, at end insert— ("( ) for a national list of persons approved by the Secretary of State who are willing to serve on appeals panels but must not serve on any appeal against the decision of a Family Practitioner Committee with which they are connected.").

The noble Lord said: I suspect that this amendment is not exactly where it ought to be in the Bill, and that is why I asked to have it disaggregated from the group in which it first appeared. If that is so, I must ask the indulgence of the Committee and the noble Baroness as at this stage I shall not press the amendment to a vote. It is designed to clarify what the noble Baroness said at Second Reading on 30th July (at col. 913 of the Official Report) concerning the Government's welcome decision, under pressure, to abandon the proposed regional list system in favour of a national list for appeals and to agree that pharmacists on the appeals panel should act as assessors but not vote.

We are disposed to support this revised version, if I may call it that, but we should like to know a little more about it first. After all, so far it has only been referred to in speeches. I therefore have three questions to put to the Minister. Can she tell us what size of list is envisaged and what proportion of it will be members of the Pharmaceutical Society and what proportion will be lay people? Will hospital and industrial pharmacists be on it? I assume that there will be a quite large preponderance of lay members, but it will certainly be interesting to hear the Government's thinking on the broad lines of the composition of this panel with this national list.

The second question is: how will this system be financed? is it expected to be carried on the existing FPC budget, and if so could this lead to undesirable pressure on other services? I think that is a rather important point. Obviously it will cost something.

My third question relates to the economic front. What arrangements will be made to cover loss of earnings and expenses? Obviously those who agree to travel on what one might call the appeals circuit must be people of high calibre and probity with a sense of the public interest, but it would be unreasonable to expect them to devote the necessary time and effort if they would incur financial loss. There already exists an FPC scale of allowances—which I have with me but will not read out to the Committee—which I do not think is overgenerous. Perhaps the noble Baroness can say whether it is intended that this should apply or whether the Government have some other arrangements in mind.

It would be helpful if the Minister could flesh out what she said in her Second Reading speech on this matter. I think it would give the whole Committee more confidence in this appeal system, which we certainly want to support, if the noble Baroness could give a few more details about it. I beg to move.

Baroness Trumpington

In July, the then Minister for Health announced two changes to the appeals procedure as originally proposed. One of those changes was that members and chairmen of appeals panels would be drawn from a national list of persons approved by the Secretary of State. The national list would replace the previous proposal of regional lists, as the noble Lord, Lord Ennals will know.

We have considered whether this change requires the Bill to be amended. It does not. Details of the appeals system will be set out in the regulations made pursuant to Clause 2, on which there will be full consultations.

With regard to the national list, we shall be consulting the profession on the details of the scheme, and we shall seek nominations from FPCs, local pharmaceutical committees and the Pharmaceutical Society. The compensation will be subject to further consultations, so I cannot directly answer the first question of the noble Lord, Lord Kilmarnock. On his second question about FPC budgets, I can tell him that the cost of the appeals panel will be met from the existing FPC budgets. Incidentally, we do not expect the cost to be very high. In reply to the third question from the noble Lord, Lord Kilmarnock, on the expenses of appeal panel members, those will be prepared in accordance with current FPC rates. I hope I have answered the questions raised by the noble Lord.

Lord Ross of Marnock

I just wanted to ask whether these considerations apply equally to Scotland. I am not terribly happy about national lists. I do not see how national lists coincide with local knowledge. Nor am I too happy about what has been said concerning who will be consulted. Surely someone will be responsible for the wishes of the local community. They are the people who will provide the customers for these pharmacies and surely they should be consulted in some way.

I should be very much happier if the community health councils were brought into this matter, because they have a much more general call upon them for advice and services in other ways. I know that they have no executive functions at all, and it would be worth while considering the possibilities there, certainly as concerns Scotland. But one cannot just take people from Edinburgh, no matter how learned or well briefed they may be. They just do not know the local circumstances in Stranraer—or Drumnadrochit for that matter. I should like to know whether what the Minister has said, not all of which satisfies me, will apply in Scotland.

8.30 p.m.

Baroness Trumpington

I extend my deepest condolences to the noble Lord, Lord Ross, because I understand that Scotland only drew in the football match this afternoon against Southern Ireland.

Lord Ross of Marnock

The Republic of Ireland.

Baroness Trumpington

Excuse me. The answer to the noble Lord's first question is, yes, what I said applies to Scotland. The answer to his second question is that local people who know the local scene are represented by the members of the bodies that I named. I could well consider adding community health councils or other suitable bodies. In my view there is no reason why they should not be consulted.

Lord Kilmarnock

I am grateful to the noble Baroness as far as she went. She did not go very far, but I understand that that was slightly difficult for her. She said that no amendment to the Bill was thought necessary. It was important to raise the matter so that we could extract an answer from her that we can read in Hansard.

I agree with the noble Lord, Lord Ross of Marnock, that the consultation process that the noble Baroness mentioned seems to be too narrow. I hope that she will accept the suggestion that community health councils should be included. I should like to hear her say that. It seems to me to be a constructive suggestion.

On the question of the cost of the appeals panel being loaded onto the existing FPC budget, we must take on board the fact that a price must be paid for having a national list rather than a local backyard consultation through a regional list. But those costs could be of some significance to the FPC budget. I hope that the Government will watch that point. We do not want other FPC services in any way undermined by this system, which we believe to be necessary.

Lord Ennals

I support the concept that the list should include representatives from the community health councils in the same way that with regard to Amendments Nos. 7 and 11, it was proposed that community health councils should appoint one of the representatives at local level. It is a good idea to have a representative at local level and on appeal.

Baroness Trumpington

To return to the subject of community health councils, I have remembered that they can ask for an appeal if they think that there has been an injustice. It does not therefore appear seemly that a member of a community health council should be both appealing and sitting in judgment.

Lord Ross of Marnock

I am not suggesting that.

Baroness Trumpington

There may well be other local bodies of which we have not thought. If they occur to the noble Lord perhaps he will be good enough to bring them to our attention, because we are looking for suitable names. There is no secret about that. I make it clear that it would not be right if a community health council made a decision on an application upon which it had already made representations. I hope that the noble Lord sees my point.

Lord Ross of Marnock

Surely we are talking about drawing up a national list of persons.

Baroness Trumpington

Yes.

Lord Ross of Marnock

My suggestion was that of those people the noble Baroness is to consult, she could consult the community health council. All it will do is provide a name. I presume that it is up to the Secretary of State to say which of the names shall be drawn upon in respect of any appeal. They will not all be on the appeal. It is obvious that the Secretary of State—although one never knows these days—would not pick someone who may well have an interest in the appeal.

Lord Ennals

The noble Baroness possesses a great deal of information which no other Member of the Committee has unless someone has leaked it. How could any of us know that a decision had been taken on the role of community health councils—which I warmly welcome? It is difficult for Members of the Committee to table amendments in relation to the initial committee and the appeal committee when we do not have the documentation. Can it be published before Report so that we can have all the information? We should then know what we are talking about.

Baroness Trumpington

The community health council's role is that of watchdog for local interests. I said that the point should have occurred to me earlier. Perhaps it should also have occurred to the noble Lord, with or without knowledge.

Lord Prys-Davies

Can the Minister be a little more specific? Will the community health council have a representative on the practices committee appointed by itself? I am not certain—I probably misunderstood her—but did the Minister also say that the community health council will have a right of appeal against the decision of the practices committee? They would have the two things?

Baroness Trumpington

The answer is, yes. The role of community health councils is shown in the guidance.

Lord Ennals

We do not have the guidance. If the guidance could be made available to those of us who are taking part we might be better informed and might not table amendments that have already been dealt with. Will the noble Baroness circulate the guidance before Report?

Lord Kilmarnock

I have to agree with the noble Lord, Lord Ennals. We are rather groping in the dark. A few shafts of light have been shed, but I am not sure that the whole scene is yet illuminated. I associate myself with the request made by the noble Lord, Lord Ennals, for circulation of the guidance, which would be helpful.

Baroness Trumpington

May I say in reply to the rather querulous remarks made by the noble Lord, Lord Ennals, and to pre-empt any further remarks from the noble Lord, Lord Kilmarnock, that a copy of the guidance has been in the Library for the past I do not know how many weeks.

Lord Ennals

How are we to know!

Baroness Trumpington

Ask.

Lord Ennals

No information has been given to us that there is a copy in the Library. We could go to the Library during the Recess and ask whether there happens to be a copy of the guidance; but would it not be easier, if there are guidelines, for them to be made available to members of the Committee who are obviously extremely interested in this subject?

Lord Kilmarnock

We believe the noble Baroness when she says she has deposited something in the Library. As we did not know that she had deposited something in the Library, that does not help us very much. It would be helpful if she would circulate a copy of the guidance to those who have taken part in this debate before the next stage of the Bill.

We shall have to read this short debate carefully to decide whether we need to bring forward an amendment at a later stage of the Bill. The noble Baroness said that in the Government's view that was entirely unnecessary. We must consider carefully what she has said to see whether we should not come back at a later stage. At the moment, I beg to leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Kilmarnockmoved Amendment No. 10: Page 3, line 47, at end insert— ("( ) for specific inducements to secure a significant extension of the Essential Small Pharmacies Scheme.").

The noble Lord said: I always draw my inspiration from the noble Baroness. Noble Lords should not laugh. The amendment is based on a useful assurance that the noble Baroness gave us at column 911 of Hansard, on 30th July, that, the essential small pharmacies scheme will be financially strengthened". Those were the noble Baroness's words, and we were glad to hear them. We on these Benches regard a better spread of pharmacies, and especially their extension into suburban estates and other deprived areas, as one of the main attractions of the Bill. So we welcomed particularly the statement I have just quoted.

I am also grateful to the noble Baroness for a letter that she wrote to me on 14th August—a letter that she has copied, I believe, to other noble Lords interested in these matters—to which she attached two notes, one setting out the present scheme and the second giving details of the new, proposed scheme. Under the existing scheme, pharmacies become eligible for payments if they are located two kilometres or more in a straight line from the next pharmacy and dispense between 6,000 and 23,999 prescriptions a year. The payments are on a tapered scale, recently revised, ranging from £5,500 for those dispensing the minimum number of prescriptions to £200 for those at the top end of the scale.

The proposed new scheme, according to the note that the noble Baroness was kind enough to send me, would maintain the two kilometre qualification but reduce the top end of the scale from 24,000 to 16,000. As against this, the average payment due to a pharmacy dispensing anything between 6,000 and 16,000 prescriptions would come out at about £22,000. This will undoubtedly encourage pharmacies to open in areas where we would like to see them. But, here again, I must ask the noble Baroness to help with further clarification.

The second note relating to the new scheme tells us that the additional costs of the revised scheme will be borne on the "balance sheet", as it is called in the trade. There will be no extra call on Exchequer funds. Is it not the case, however, that the balance sheet is supposed to bear 50 per cent. of the compensation costs of closures, estimated at 250 to 300 pharmacies? That is, I believe, the Government's estimate. If so, how can we be sure that there will be adequate funds to finance new essential small pharmacies? This is perhaps at the root of the Scottish problem to which I shall return.

Is it the case that adequate funds for the essential small pharmacies are expected to be generated by the ceiling for ESP payments (if I may so call them) going down from 24,000 to 16,000, and by the removal of the basic practice allowance? If that is so, what happens to the savings expected to be made out of the new contract, that is to say, the total savings that the Government expect to get out of the new contract?

This leads us to the question of whether this project can be financed without any new money. I am sure that the noble Baroness has all the answers at her fingertips. If so, I look forward to hearing them. If they are satisfactory, I shall be inclined to withdraw my amendment, which is primarily designed to elicit information. If not, I and my noble friends will probably feel that something on the lines of this amendment should be written into the Bill at a later stage.

One further point is the Scottish question. I am sorry to revert to this, but several noble Lords have mentioned the anomaly between the expectations of Scottish essential small pharmacies and English and Welsh essential small pharmacies. My noble friend Lord Taylor of Gryfe was one of those who raised the matter. We seemed to be confronted with the anomaly that an essential small pharmacy dispensing 6,000 National Health Service items north of the Border will receive only £12,000 as opposed to some £22,000 that their English opposite numbers could expect. If this is really the case, is it what the Government intend? If not, how can it be rectified? I thought that earlier I heard the noble Baroness say—in fact, I know I did—that a Scottish pharmacist would receive an enhanced payment. I noted down her words. She was no longer using the words "no worse off" but was referring to "an enhanced payment". In her reply to the noble Lord, Lord Ross of Marnock, she seemed rather to back off this. Then, in reply to my noble friend Lord Winstanley, she said that separate negotiations might lead to separate conclusions. Again, she avoided an answer to his specific question.

Is there any good reason why pharmacies in Scotland should not be on all-fours with those in England and Wales? The noble Baroness has to take on board the disquiet on this apparently blatant unfairness to which attention has been drawn from all parts of the Committee. I should be glad, in passing, if the noble Baroness would add my name to the already lengthy list of people to whom she is going to write on this point before the Report stage which is due to take place, I understand, on 28th October. We do not have long to clear up some of these important outstanding matters.

Reverting to my main theme, we are attracted by the scheme. In some ways, this spreading of pharmacies into areas where they are really needed at the expense of a clustering of pharmacies in the high street is the raison d'être of the Bill. We want the scheme to work; but we must be assured that it will have sufficient funds before we can give it our wholehearted support. I beg to move.

Baroness Trumpington

A major objective of the proposed new contract for retail pharmacists is to make progress towards a better distribution of NHS pharmacies. The means that we have chosen to secure that objective include a substantial strengthening of the financial provisions of the essential small pharmacies scheme. Under the new contract, small pharmacies that were eligible for the scheme would receive a guaranteed minimum income.

The proposed new essential small pharmacies scheme is a substantial improvement, as I said earlier, on the present scheme which has itself been improved recently. At present, as the noble Lord, Lord Kilmarnock, said, eligible pharmacies receive payments ranging from £200 to £5,500 a year. I therefore submit that we have already taken necessary steps to improve the existing essential small pharmacies scheme. Before the new contract is introduced, there will be full consultations with the profession's representatives. Representations made on the essential small pharmacies scheme will, of course. be considered carefully.

However, this is not a matter for primary legislation. Payments to essential small pharmacies form part of the retail pharmacists' remuneration structure. As such, those payments are decided through negotiations with the pharmacists' representatives. This is the right place for the criteria and payments of the essential small pharmacies scheme to be resolved. Primary legislation, I hope it will be agreed. is clearly the wrong place.

With regard to the financing of the ESP scheme, incentive payments will be financed from savings. Improvements in the ESPs will be financed from the balance sheet; that is, the overall total of money from the NHS pharmacy. No new money will be needed over and above the savings from the new contract.

With regard to the Scottish situation—I speak from the Scottish guidance—the relevant paragraph is that dealing with the strengthening of the essential pharmacy allowance. Pharmacies which are further than two miles from another pharmacy and which dispense fewer than 1,300 prescriptions a month may be classed as essential. A guarantee has been given to these essential pharmacies that they will be no worse off under the new remuneration scheme. It is anticipated that additional payments made to these pharmacies will be maintained and hopefully improved. It is proposed to widen the scheme to include isolated pharmacies in housing estates and areas of urban deprivation.

A difficulty exists in Scotland, in that a greater proportion (4 per cent.) of pharmacies than in England (1½, per cent.) is classed as essential. The present value of all allowances paid is £80,000, funded 50–50 by the contractors themselves and the Government. The contractors are willing to increase their contribution from £40,000 to £120,000. But the Government will find only an extra £10,000 to £20,000. If the Government would continue to fund the expanded scheme on the present 50-50 basis the proposed expansion of the essential pharmacy allowance could be more significant.

There are already differences between the remuneration systems in the Scottish and English and Welsh regions. For example, there is no basic practice allowance in Scotland, as I said before. How the amounts due "through the balance sheet" are distributed is a matter for negotiation each year between the health departments and the pharmacies' representatives. Differences of detail do not mean that Scottish pharmacists are disadvantaged vis-à-vis England. I am surprised that the noble Lord, Lord Ross, should want total uniformity between Scotland and England and Wales. The noble Lord, Lord Kilmarnock, referred to an early exchange on a specific amount which was mentioned in debate on which I did not have the figures. That is why I promised to write to any noble Lords who required me to do so. That offer of course stands. The funding of the ESP scheme in Scotland is, as I said before, still under negotiation.

Lord Carmichael of Kelvingrove

I am grateful to the noble Baroness for the figures she gave. I was given some figures by pharmacists. Their figures were somewhat different from those of the noble Baroness, but not materially so. The existing figures are that approximately £35,000 came from the Government and £35,000 from the pharmacy associations for the essential pharmacies allowances. The noble Baroness has said that the proposed new figures are still under discussion. The proposals were that the pharmacists were willing to go as far as £120,000 but apparently the Government were willing to go to £60,000. I do not know whether or not this is jumping the gun but these are the figures which I have been given.

In considering the general tenor of the Bill—which is to try to divert pharmacists from the popular areas to the unpopular areas, an objective with which I think we all agree—I should like to know how much leeway this additional money will give. Will it be sufficient to give a reasonable inducement? If one is talking about a difference from, say, £70,000 to £180,000 one is talking about approximately £100,000. If the pharmacists are to receive between £1,000 and £5,000 one is talking only about 40 or 50 pharmacists in the whole of Scotland who will be diverted. It seems that of potential pharmacists opening up in populous areas one will have only 40 or 50 moving to country areas. That seems to be a fairly puny answer to what the Government have told us is a very severe problem.

I do not expect an answer now because, as the Minister has told us, she does not have the final figures. However, I think that it is a matter in which we shall be interested at the next stage of discussion; that is how, much extra will be allowed and how many new pharmacists in the areas required the Government think that sum will be able to provide.

Baroness Trumpington

I am grateful to the noble Lord for saying that he does not expect an answer now. I have noted what he said. I shall include the noble Lord in my ever-increasing mailing list.

Lord Ross of Marnock

I should be grateful if the Minister would give us the information for which the noble Lord, Lord Kilmarnock, asked. That is the information in respect of England and Wales with regard to the Essential Small Pharmacies Scheme and what it is going to be. The noble Baroness gave us an indication that it will be extended in Scotland. If it is going to be extended and the funding of it is not going to be equally extended, we can then understand why a small pharmacist in England receives £22,000 while a small pharmacist in Scotland—doing exactly the same work—receives so much less.

The noble Baroness says she is surprised that I want them to operate in the same way, but I did not say that. But I shall certainly not accept the situation where a pharmacist in Scotland under the scheme will receive only £12,000 for dispensing the same number of prescriptions as a pharmacist in England who receives £23,000. If the noble Baroness wants to see the rise of Scottish nationalism in Scotland all she has to do is to stand up and justify that. There is nobody from Scotland who will justify that either here or there.

I understand that there are differences. It may well be that to safeguard themselves the pharmacists generally in Scotland have no great desire to provide funds for the extension and the enhanced inducements for the scheme in Scotland. But if we are to achieve the aims of the Government in providing adequate services where they are needed, this kind of difference must not be allowed to continue.

We are at this disadvantage. Even when we come to Report stage I doubt very much whether we shall have the information. These guidelines are in the Library but they will not tell us anything about the contract. They will not tell us about the details—old or new—of the essential services scheme. That is where we are at a disadvantage. I hope that the noble Baroness will try to appreciate that and provide us with the information that we presently lack.

Lord Kilmarnock

Again I am trying to find grounds for thanking the noble Baroness for trying to help us, and I am struggling a little. The noble Baroness has told us of the aspirations towards a substantial strengthening of the scheme and a guaranteed minumum income—a substantial improvement on the present scheme. This is no doubt the case on paper. But the real question is the one raised in my opening speech: will the funds be there? The noble Baroness says that this is not a matter for primary legislation. I think that one must agree with her there. However, our degree of support for the primary legislation depends very much on our confidence that the Government have worked this out properly, have the correct figures and know where the money will come from for their proposals.

As a London Scot, I shall leave to wrath of the Scots to my friends north of the Border, because I am sure that they will be back on this matter. But first we have to await the letters from the noble Baroness. Her mailing list has now grown and is quite extensive. We hope very much that she will be able to get the information to us in time for us to come back on this point at the next stage of the Bill.

I doubt whether the noble Lord, Lord Ross, wanted total uniformity for Scotland and England and Wales. That is by no means in the spirit of the Scots, who usually believe that they do things better north of the Border. However, I think that he was making a point in equity and fairness which we on these Benches would very much support. We look forward to hearing from the noble Baroness; we look forward to her mailing list. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 11 not moved.]

9 p.m.

Lord Ennalsmoved Amendment No. 12: Page 4, line 27, at end insert— ("including decisions to impose conditions or a time limit upon any approval of an application pursuant to paragraph (d) of subsection (3) hereof").

The noble Lord said: I beg to move the amendment standing in my name on the Order Paper, which adds to the words in subsection (4) on page 4. At present it says: The regulations shall include provision conferring on such persons as may be prescribed right of appeal from decisions made by virtue of this section". For reasons that I shall give I think it should also have the words: including decisions to impose conditions or a time limit upon any approval of an application pursuant to paragraph (d) of subsection (3) hereof".

As the Bill stands, under Clause 2(4) it is not clear that there are rights of appeal not only against a refusal to grant an application but against any conditions or time limits that may be imposed by an FPC subcommittee when granting an application. If one looks at subsection (3) one sees that: The regulations may include provision— (a) that an application to a Committee may be granted in respect of some only of the services specified in it". If one looks at subsection (3)(d) one sees that the committee has a right not simply of granting or refusing a licence but of determining both a timescale and also the nature of the service that shall be provided. If it is the intention of the Government, as I assume it is, that the applicant has a right of appeal if dissatisfied, it should be made clear in the legislation that that right of appeal is not only against a rejection of a licence but against any conditions imposed upon that licence. This amendment seeks to clarify the position by specific mention of conditions and a time limit.

Baroness Trumpington

I hope I am right in saying that we are also speaking to Amendment No. 34.

Lord Ennals

Yes.

Baroness Trumpington

This amendment affects only the rural dispensing committee, which regulates dispensing in rural areas of England and Wales. Amendment No. 34 has the same effect in Scotland. This amendment is in my view unnecessary. Existing regulations already provide that a pharmacist may appeal to the Secretary of State against conditions imposed upon the grant of an application to open a pharmacy; the new Section 42(4) permits this to continue.

It is the Government's intention that regulations should continue to provide such appeal rights. The amendment, if the noble Lord will forgive me for saying so, has missed its target. He intends to refer to conditions relating to new pharmacies. However, by referring to Section 42(3)(d)—

Lord Ennals

I am not going to press this amendment. I think it is best withdrawn at this stage. I thought it was a measure of clarification. The noble Baroness says the position will be made clear in regulations and we shall have the opportunity of considering regulations when they are prepared.

Amendment, by leave, withdrawn.

Lord Rugbymoved Amendment No. 13: Page 4, line 27, at end insert— (", such appeals not to be determined by any person selected upon any local basis").

The noble Lord said: The Government have accepted that appeals should be removed from the possibility of taint by local vested interests. It was announced at Second Reading in the House of Lords that appeals will be adjudicated by a locally convened committee drawn from a national appeals panel. This amendment is designed to incorporate in the Bill the Government's commitment to an appeals system which is not open to local bias. The precise operation of the system is still left to the regulations, giving power to the Secretary of State. Indeed, there is no guarantee within the Bill that the decisions can be biased by local pressure groups.

Baroness Trumpington

During debate of the Bill in another place the then Minister for Health agreed to look again at the appeals procedure. All representations received were carefully considered.

We still think that a locally convened appeals procedure is the best solution, for three solid reasons: first, it is consistent with the functions of FPCs; secondly, we have built in a number of important safeguards against bias; and, thirdly, a local system can operate quickly and a centralised system would be a serious bottleneck, which is in no one's interest.

However, as I announced in the Second Reading debate, we have decided on two changes to the appeals system. First, membership of appeals panels will be drawn from a national list (instead of regional lists) approved by the Secretary of State for Social Services. Secondly, although pharmacists will retain membership of appeals panels to give advice and guidance, they will not have the power to vote. These changes will strike a balance between the need for consistency and independence in decision-making and the need to deal promptly with appeals with local circumstances in mind.

We shall be considering further in consultation with the profession the composition of appeals panels. However, we see no advantage whatsoever in convening them at the Elephant and Castle. Locally convened panels will be able to operate more quickly and that has to be in everyone's interest.

Lord Rugby

I thank the noble Baroness for her explanation, which I accept. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 14 not moved.]

Lord Prys-Daviesmoved Amendment No. 15: Page 4, line 27, at end insert— (" ( ) Regulations made pursuant to subsection (4) hereof prescribing rights of appeal shall not purport to negative any right to apply to the High Court or any jurisdiction of the Court which would subsist in the absence of such regulations.").

The noble Lord said: We have heard throughout the day that by virtue of Clause 2 immense power is vested in the practice committee. Clause 2 establishes a licensing system. The power vested in the practice committee can wittingly or unwittingly be abused. Therefore, if we have an aggrieved party, an aggrieved applicant, whose appeal to the appeal panel fails, then, as I understand it, he cannot turn to the Secretary of State. I should not have thought that he could seek the help of the Ombudsman either, but possibly the Minister will be able to enlighten me about that. However, if it appears to a reasonable man that the practice committee has exercised its authority contrary to the evidence or without due regard to all the relevant considerations, then the exercise of that power by the practice committee should be subject to review by the court. We think that the practice committee— the appeal panel—should be fully aware of the fact that its decision is subject to review by the court. That is what we seek to achieve by the amendment. I beg to move.

Baroness Trumpington

While appreciating the sentiments behind the amendment, I have to say that I think that it is misconceived. The regulations under the new Section 42(4) can only confer rights of appeal; they cannot take away any right which someone may have to apply to a court. For example, they could not take away a person's right to ask for leave to apply for a judicial review if he felt that an appeal panel had made a decision which was bad in law as opposed to a decision with which he simply disagreed. If there had been maladministration in the handling of an appeal there is a right to go to the Ombudsman. The amendment says that the regulations cannot do something which they cannot do anyway and, therefore, it is superfluous. I hope that the noble Lord takes my point.

Lord Prys-Davies

I am grateful for the Minister's observations. I have not seen the regulations, but the noble Baroness seems to be saying that the regulations do not exclude or restrict the right of access to the court and in any event they could not do that, and therefore the right to appeal to the court remains. If that is the position then I, for my part, would be content.

Baroness Trumpington

Before the noble Lord, Lord Winstanley, makes any comment, let me just say, "Yes".

Lord Winstanley

In the course of his speech the noble Lord, Lord Prys-Davies, was saying that there was no right of appeal to the Secretary of State. I am puzzled by that observation because the only parallel that we have to this new machinery is the medical practices committee, which exercises precisely the same function in relation to general practitioners setting up in practice. The medical practices committee designates areas as open, intermediate or closed.

Initially, the right to apply to practise goes to the family practitioner committee and it is the medical practice committee which hears appeals. However, under those arrangements there is still a right of appeal to the Secretary of State. Indeed, the Secretary of State has upheld or reversed decisions in many appeals. I wondered why the same practice has not been followed here. It seems that there is a parallel. I wonder whether the noble Lord, Lord Ennals, has any views on this matter. He had some responsibility for operating the other scheme, and he may wonder why this one is not constructed in parallel.

Lord Ennals

I should certainly like to hear the Minister's explanation.

Baroness Trumpington

Actually, I would rather like to hear what the noble Lord, Lord Ennals, has to say first! I suggest that the noble Lord, Lord Winstanley, reads very carefully what I have said. If it is not clear to him, then perhaps he will get in touch with me.

Lord Prys-Davies

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Baroness Cox)

The next amendment is Amendment No. 16. I have to point out that if Amendment No. 16 is agreed to, I cannot call Amendments Nos. 17 to 37.

Lord Ross of Marnockmoved Amendment No. 16: Page 4, line 31, leave out from beginning to end of line 8 on page 6.

The noble Lord said: I can assure the Minister that I shall not be calling a Division in respect of this amendment. The amendment would take the whole of Scotland out of the clause and there is fair justification for doing that in Scotland's tradition of having its own legislation. The amendment also gives an opportunity for a Scottish Minister to justify all that is to be done. However, we do not have a Scottish Minister present apart from the noble and learned Lord the Lord Advocate who is not, in fact, a Scottish Minister; he is the adviser to the Government on Scottish law. He is not a Scottish Minister of the Scottish Office. I hope that the noble Baroness appreciates that point. However, the noble and learned Lord is always willing to help. Perhaps he may well help me over some of the confusions I got into in this respect.

The regulations are to be drawn up by the Secretary of State, I presume, and they come before your Lordships' House. The first question is: In what form? I trust I am right in thinking that they come before the House, but it will be interesting to note whether they do. Secondly, they are going to provide for securing arrangements made by a health board, and the application for inclusion on that list is to a health board. It is also the case that they shall be granted only if the health board is satisfied about the adequacy and satisfactory state of things.

Then we go down to paragraph (d), where it says: where the premises from which an application states that the applicant will undertake to provide services are in an area of a prescribed description, —I presume that prescribed description will be in the regulations— the applicant shall not be included in the list unless his inclusion is approved —not by the health board but— by a prescribed body … Why a prescribed body? Why not the health board?

We become very suspicious when we are asking that the regulations should prescribe a description and a prescribed body which seemingly, according to this, overrides the health board itself. Or am I right in thinking that the final decision has to be made by the health board? What is the prescribed body? Is this the 331 that we have heard about? I hope the Lord Advocate can help us here in this place. It is certainly not clear as to where the jurisdiction of the health board is supreme and why, if it is supreme, the power of this prescribed body can override the power of the health board. Or do the health board just rubber stamp whatever they say?

I was equally concerned about the rights of appeal. I must say I have never seen appeals in such a biased form as were originally intended by the Government. I am glad to say that they have changed it. I am not entirely happy about it. I am not all that happy about national lists making decisions about local matters. No, I am not—a group of people being selected by the Secretary of State. Certainly it is going to be a very long list, but I do not know how local knowledge is to be resolved into it. This is one of the things about which I wanted the Secretary of State's representative here to give me all the information about. I am horrified at the thought that, even in England and Wales, they are going to draw up lists in the Elephant and Castle for the North of England, Wales and all over the place.

I do not think this is the way to deal with the matter at all. You might as well have given it to the Secretary of State and let him decide the appeal, or give it to the local sheriff. Our hands are tied in all this because we have not yet seen this business of guidance. I do not know whether or not it covers this particular point. It certainly will not cover the changed ideas of the Government in reverting to nationally drawn up lists because it conflicts with the business of getting local knowledge and the application of the views of local people.

I wanted this to be justified by a Scottish Minister, and there is no Scottish Minister here. Quite frankly, I do not expect an English Minister to know all the nuances of differences of principle between Scotland and England, which cannot be justified by the difference of circumstances and the fact that the health service in Scotland has gone its own way in many aspects. Long may it be that way, provided there is no injustice or leapfrogging, certainly in respect of the inducements for the essential small pharmacy scheme, to the disadvantage of Scotland. I do not propose to go any further with this amendment. With the leave of the Committee, I will withdraw it.

Amendment, by leave, withdrawn.

Lord Ross of Marnockhad given notice of his intention to move Amendment No. 17: Page 5, line 4, leave out sub-paragraph (ii).

The noble Lord said: I do not propose to move Amendments Nos. 17, 18 or 19; and that goes also for Amendments Nos. 23, 24, 25 and 26.

[Amendments Nos. 17 to 32 not moved.]

Lord Ross of Marnockhad given notice of his intention to move Amendment No. 33: Page 6, line 4, leave out ("such persons as may be prescribed") and insert ("the applicant").

The noble Lord said: This amendment deals with who has the right of appeal. I was very much concerned that under the original decision there were going to be three local pharmacists. I thought it was pretty bad. I know that they may be men of integrity, men of trust and all the rest of it, but in this decision there is an element of self-interest. We should not put such temptation even before people of the highest integrity.

Then, again, no matter what decision they made, because of the fact that they were local and that they were pharmacists, the general public would not believe that they were unbiased in their judgment, and so it would be unfair. I was concerned that the pharmacists who were disappointed by the granting of an application would have the right to appeal. I do not think they should have the right to appeal. It should be a matter for the applicant.

However, I was glad to hear the Minister say that among those who would have the right to appeal (because once they were going to be proscribed, too) are the community health councils. That cuts right across my own amendment. That being so, and having heard the Minister's statement about that, I think it would be unwise to go forward with that amendment. With that explanation, I hope it will be appreciated that I have not yet moved the amendment, and I shall not proceed to move it.

[Amendment No. 33 not moved.]

[Amendments Nos. 34 to 37 not moved.]

Lord Ennalsmoved Amendment No. 38: Page 6, line 8, at end insert— ("( ) This section shall not come into force until a date three months after the Secretary of State shall have published a draft of the regulations which he proposes to make hereunder.").

The noble Lord said: I understood that the noble Lord, Lord Harris of High Cross, was going to move this amendment, but he seems to have disappeared. The amendment says: This section shall not come into force until a date three months after the Secretary of State shall have published a draft of the regulations which he proposes to make hereunder". With this amendment we take Amendment No. 39.

We have all been asking that we should see a copy of the regulations, and this amendment is trying to put into the Bill that this section should not come into force until we have had time to receive the draft regulations and to consider them. It seemed to me that three months was a reasonable time after receiving the regulations to consider them and to consult with the organisations concerned, as the Government have no doubt done but we have had no opportunity of doing. I hope therefore that the Minister will feel that not only should we have a draft of the regulations at the earliest possible moment, but that we should then have three months in order to consult and consider before they come into effect. I beg to move.

Baroness Trumpington

Before I answer the noble Lord, Lord Ennals, perhaps I may say that the noble Lord, Lord Ross, has been most frightfully decent. However, he must not forget that he is talking to a Campbell-Harris, even though he has not got a Scottish Minister; so do not let us think it is all south of the Border here. The noble Lord referred to the fact that he could not see how a national list—and I am making a general point before I come to the amendment—could deal with local problems. The whole point, if I may say so, is that an appeals committee should not have people on it who are local, because the local people will be dealing with the original application. To try to obtain total fairness we have taken the composition away from the local angle and put it to a national list. I believed that I had general agreement on that point.

Returning to the noble Lord, Lord Ennals—

Lord Ennals

The noble Lord, Lord Harris of High Cross, has returned too.

Baroness Trumpington

I submit that Amendment No. 38 is unnecessary for two main reasons. First, regulations will not be laid immediately because time is needed to prepare a national list of appeals panel members for the approval of the Secretary of State. Family practitioner committees will need to have that list before, or at least soon after, the new arrangements come into force. Secondly, assuming parliamentary approval is given to Clause 2, there will need to be full consultations with the organisations which represent those most affected by the new arrangements on proposed regulations and draft guidance to FPCs. Therefore, there will be plenty of further opportunity for the views of those organisations to be made known and considered.

I should also like to draw the attention of the Committee to Amendment No. 55, which proposes a commencement order provision for Clause 2. One effect of the commencement order would be to guarantee sufficient time for full consultations. I should add that the new arrangements will not be introduced in Scotland before they are introduced in England and Wales. Once these consultations are completed and arrangements for the national list well advanced, regulations will be laid and guidance issued. Only then will we proceed with the new arrangements. Given our proposals for consultation on regulations pursuant to Clause 2, I hope the noble Lord, Lord Ennals, feels he is able to withdraw his amendment.

Turning now to Amendment No. 39, the regulations pursuant to Clause 2 will be an amendment to the General Medical and Pharmaceutical Regulations. Regulations concerning general medical, dental and ophthalmic services and pharmaceutical services under the National Health Service Act 1977 follow the negative resolution procedure. It is our intention to continue that practice. There will be full consultations on proposed regulations and guidance before the new arrangements are introduced. In the circumstances I do not think that we need to break away from established practice and there is no reason why pharmaceutical services should be treated differently from other family practitioner services under the NHS.

Lord Harris of High Cross

I am not sure how far I follow the assurances that the Minister has given. The anxiety in the minds of those supporting these amendments is that there is a sense in which this clause is unprecedented. It has a direct effect on the livelihood of intending pharmacists. There is anxiety that a good deal of hole-and-corner discussion and negotiation has gone forward.

I do not want to go back over earlier ground but the argument that the PSNC represents and speaks for all pharmacists is just not true. It speaks for those who are active in the business of chemist shops and the unrepresented majority of qualified pharmacists are wholly outside those categories of company contractors, pharmacists and even representatives of co-operative pharmacists.

It is of enormous significance to this profession. Many of us, as has been clear, regard it as a gross and grave incursion into the ordinary expectations of people to be able to conduct a perfectly ordinary business of dispensing prescriptions along with selling other pharmaceutical goods. As any person well informed on this matter would expect, I have to protest that the regulations and the guidance have not been published. But some of us have had the advantage of seeing them because they fell off the back of a lorry, if I may use that expression. If you look at these regulations, they are very serious. Between two drafts there have been changes which shift the onus of proving that a new chemist is desirable and necessary from one side to the other in an adverse direction.

It is impossible to judge the effect of that until the regulations and the guidelines have been placed out in the open. Why is there this enormous secrecy? Why is everything marked "Secret and confidential" and "To be destroyed before reading" when we are talking about the way of arranging, in a civilised fashion, the conduct of this outrageous provision in Clause 2? It seems to me that the ordinary negative resolution procedure would not be appropriate. We should like to have the regulations in our hands before this Bill comes into effect. The Minister has said that in some sense that will be provided, but we should like the regulations to be subject not to the negative resolution or to annulment by either House but to a positive resolution so that we can go over this ground and satisfy ourselves that an arrangement about which many of us are deeply unhappy, deeply concerned, is being conducted in the best possible way.

I ask the Minister, among all her many burdens and responsibilities, to understand that there is this real anxiety felt by many of us, and that our conduct at Report and Third Reading will be somewhat influenced by the devotion that she shows to our concerns. This whole matter should be brought out into the open and thoroughly discussed without the PSNC all the time trying to force the hand of the DHSS and threatening not to co-operate unless the Government bend to its wretched purposes.

9.30 p.m.

Lord Carmichael of Kelvingrove

I wonder whether the noble Baroness realises that there is fairly strong feeling about the question of the negative resolution. I must say that I picked up from the Minister a slightly different message from that which apparently the noble Lord, Lord Harris of High Cross, picked up. I did not think that we were going to get the actual draft regulations. I thought the Minister merely said that there would be consultation. That is why I feel particularly strongly about the negative procedure. In a complicated business such as this, which is not really quite the same as many of the other parts of the health service, it is really a matter of people's livelihoods and potential livelihoods and also a service to the community.

I think that it should be a positive resolution rather than a negative resolution. It would be a little easier for us to accept the negative resolution procedure if the Minister could assure us that there would be plenty of time to look at actual draft resolutions. Consultation in a complicated matter such as this is not really enough. Many of us really need to see the words in front of us and to see the thing complete or almost complete before we can make up our minds and before we can make as big a decision as this undoubtedly will be for the pharmaceutical industry, the retail industry and the service to the various communities.

I hope the Minister will take on board that the Committee would find it very difficult to accept the negative resolution procedure and that unless we actually see the complete draft regulations she may have considerable difficulty when she brings back the Bill for the Report stage. Perhaps that is something else that she will take away to look at before we have another chance to look at this Bill on Report.

Lord Ennals

I should like to make two or three points. First, I want to make quite clear that I do not follow the noble Lord, Lord Harris of High Cross, in his attacks on the PSNC. Quite often I disagree with it, and when I do so and it is a matter that is before this Chamber, I table amendments or criticise, or what have you. But basically I have had, and hope to continue to have, a good relationship with the PSNC, and I do not feel the same antagonism as is felt by the noble Lord, Lord Harris of High Cross.

In relation to the two amendments, like my noble friend Lord Carmichael, I shall have to read carefully what the Minister said unless she makes it clearer now. I thought she was giving an assurance that since there was to be consultation on the draft regulations we should have the opportunity of seeing the draft on which she was consulting.

I was about to say, until the noble Lord made me feel this was not the case, that I was satisfied with her assurances and at this stage would not pursue this amendment. However, I think it is extremely important that your Lordships, as well as Members of another place, should have these draft regulations three months in advance, as I have said, and have a chance to consider them. That is the reason for Amendment No. 39, so that they shall come for positive approval by both Houses of Parliament.

I shall read what the noble Lord and the noble Baroness have said very carefully and decide whether to return to this issue at the Report stage. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 39 not moved.]

Clause 2 agreed to.

Clause 3 [Remuneration of persons providing general medical services etc.]:

Lord Ennalsmoved Amendment No. 40: Page 6, line 15, leave out from ("deducting") to end of line 16 and insert (", from the remuneration of those persons who provided the description or category of services falling within such a description and to no other persons, an amount to take account of any overpayment made to those persons.").

The noble Lord said: We now turn to a completely different matter. How refreshing it is to start on a new subject! I should like, if I may, to make a few general comments in relation to Amendment No. 40 and refer to Amendment No. 41. The powers contained in Clause 3 relate to the description of services: that is, general medical services, dental services and optical and pharmaceutical services and to the categories of service within those descriptions. Those categories relate both to the supply of appliances where appropriate and to fees paid for the performance of professional services.

It seems to me there are two broad principles which are evident throughout this clause. They appear to be that if the DHSS does not get its sums right when setting the remuneration for a particular category of services, it does not matter very much because it can recover money from other categories. The second principle seems to be that it may at any time in the future go back to any time in the past, pick a particular determination and revise it. There appears to be no time constraint on such action, and the complete clause appears to legislate for what I can only call total uncertainty. It is difficult to see how any of the contractor professions can be expected to carry out their pay negotiations against that curious background. I hope that we shall have clarification from the Government on the broad purposes of the provision and on whether I have misinterpreted the purpose of the Bill.

I accept that no pay negotiating machinery, however carefully structured, can be exact. I know because I was involved in the game when I was Secretary of State. I also accept that small upward or downward adjustments of fees work as much in favour of practitioners as of the department: sometimes it is up and sometimes it is down. But it appears that the Minister is seeking powers which do nothing to reassure the professions that she or the Secretary of State has such accuracy as their principal aim.

The gist of this quite remarkable clause is that if the Secretary of State or the department fails to get the sums right, if they fail to identify categories of service accurately, if they fail to identify individual practitioners accurately or if they decide 10 years later that they have even failed to get the year right, they are free to make all sorts of adjustments as between the practitioners and categories of service. They may at any future time be able to say that they got it right. If that fails, there is of course no limit to the number of times that they may make such an adjustment. I submit that this puts practitioners in an extremely difficult position. The purpose of my amendment is to ensure that there is a complete understanding about the mechanisms to be used for reimbursing practitioners because of a shortfall in their previous fees or for recovering payments shown by subsequent calculations to have been overgenerous.

Amendment No. 40 addresses the anomaly that the clause (unless I have misread it) allows the Secretary of State to recover money from people who have not earned it or to give back money, due to people who had earned it, to another group of people. It has been explained to me that some considerable adjustments in fees, both up and down, have been necessary in the contractors' pay negotiations. It can only be said that until the present unsatisfactory mechanism of these negotiations are adjusted the Secretary of State should not be seeking powers that allow him to tolerate by statute a continuation of these past mistakes. This is the gist of the purpose of these two amendments: in order to provide clarity so that the professions know where they stand, and so that the Minister is not left with powers to go back over innumerable years to recoup what may be profits made by different people when there was a change in contractors. In this amendment I seek to remove anomalies and to create clarity. I beg to move.

Lord Mottistone

Very briefly, I would like to endorse everything that the noble Lord, Lord Ennals, has said. I propose to reserve my major remarks for the amendments in my name which are shortly to follow.

Baroness Trumpington

Dealing first with Amendment No. 40, to be fair and reasonable to the contractor professions means that we may have to take into account the position of the new contractor when considering past overpayments. That is why Clause 3(3) has been included in the Bill. It would allow the determining authority, when considering a past overpayment, to have regard to the period for which a contractor had provided services. Subsection (3) would also allow us to make a necessary distinction between the different professions to take into account their different remuneration systems.

For general medical practitioners the independent Doctors and Dentists Review Body has its own balancing arrangements for resolving under or overpayments. For dentists the Dental Rates Study Group deals with these matters. These arrangements have worked well for many years.

Assurances have been given that this Bill does not demonstrate any intention to change the current pay system for doctors and dentists. That assurance included the current balancing arrangements which ensure that the interests of those professions and the taxpayers are adequately safeguarded.

This amendment would remove the flexibility which is needed to allow us to take into account the different remuneration systems when considering the position of the new contractors. I can assure noble Lords that we are fully aware of the position of new contractors for all the professions: doctors, dentists, pharmacists and opticians. The inclusion of subsection (3) of Clause 3 confirms this.

Concerning Amendment No. 41, I can tell noble Lords that this amendment is also not acceptable to the Government for broadly the same reasons which make the previous amendment unacceptable. First, there is already a provision in the Bill at Clause 3(3) which permits us to take into account the position of the new contractor.

This amendment would, to a certain extent, be repeating that provision. Secondly, it would adversely affect the balancing arrangements for doctors and dentists operated by the DDRB and the Dental Rates Study Group. These arrangements have worked well for many years. We want them to continue, as do the professions involved. It is not our intention to do anything in this Bill to change the current pay system for doctors and dentists. And, as already stated, assurances have been given to that effect.

Lord Ennals

The noble Baroness will know that all the professions to which we have referred by name are not satisfied with the present situation and are not satisfied with the provision that is made in Clause 3. I shall consider very carefully what the noble Baroness has said. I make no bones about it; I shall discuss this and obtain from them their views as to whether what she has said gives them any satisfaction. I shall not press either of these two amendments now but reserve to myself the right to do so at Report stage if, in the light of what she has said, there is still a deep sense of grievance, which I feel is justified, on the part of the professions concerned. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 41 not moved.]

9.45 p.m.

Lord Mottistonemoved Amendment No. 42: Page 6, line 20, at end insert— ("Provided that the determining authority shall make any such adjustment not later than two years after the earlier determination.")

The noble Lord said: I must open my remarks by expressing grave disappointment that my noble friend has grouped my amendments with other ones without consulting me before doing so.

Baroness Trumpington

Perhaps I may immediately apologise to my noble friend.

Lord Mottistone

As it happens, and as it is late, it suits me, but it would not have suited me if we had not wasted so much time on Clause 2. I do not like to keep noble Lords up late; but perhaps my noble friend's department will note that.

I must declare an interest as a vice-president of the Association of Optical Practitioners. Another general point is that I have had a letter from the British Medical Association supporting all my amendments, which include Amendments Nos. 42, 47, 49 and 53. I see that Amendment No. 42 is grouped with Amendments Nos. 48 and 49. I have my name to Amendment No. 49 but in a secondary position. I hope that the noble Lord, Lord Ennals, will not mind if I speak to Amendments Nos. 42 and 49 together.

Lord Ennals

The noble Lord is welcome to do so.

Lord Mottistone

The basic question is what is fair in regard to retrospective payments. My noble friend the Minister said recently and at Second Reading that the intention was to operate them as they have always been operated before. That is questionable. But even if it is not, it seems to me, having now looked into this fairly thoroughly, that what has been going on in the past has not necessarily been fair. I make the point that Amendment No. 42 is what I would call a continuing amendment, because it will always apply if it is accepted; whereas Amendment No. 49, which I share with the noble Lord, Lord Ennals, is in effect a temporary one, in that it seeks that subsections (1) to (4) shall have no effect before their commencement under the Bill—and therefore, once that has happened, other things can happen in future.

Amendment No. 42 seeks to narrow the time in which the figures can be in dispute. We are terribly keen to have the system as accurate as possible and I am advised that the Association of Optical Practitioners is pleased that the department has agreed to negotiate these on an annual basis. That is an improvement because they have in the past been negotiated over as much as five years. This will prevent the accumulation of overpayments or underpayments. The point of this amendment is to make sure that no more than two years elapses between assessments. It seems to me that in these modern times, with computers instead of people with quill pens, it should be practicable for departments of state—and, indeed, professional bodies like the Association of Optical Practitioners—to operate a great deal faster in summing up and collating their figures so that there is less delay in the collection of a group of figures for agreement. When I speak to Amendment No. 49 the Committee will see why that is so important.

Therefore, I hope very much that with regard to Amendment No. 42, which is a longer term type of operation, I shall receive a sympathetic response from my noble friend the Minister to the extent that even if the exact wording cannot be accepted something similar will go somewhere into the legislation.

Turning now to Amendment No. 49, I suggest that if Clause 3 is to be retrospective—there is nothing to say that it is not and the object of Amendment No. 49 is to prevent that—the Government would be seeking to rid themselves of the responsibility of faulty legislation in the past. Indeed, we might find a situation arising in which professional contractors are obliged to pay for the Government's past mistakes, and that is unfair. I suggest that it is quite reasonable to change the rules of the game for the future but not reasonable to back-date the change ad infinitum.

None of the professions affected by this clause is likely to object to a new system starting from a current date which provides for "retrospection in future", but not "retrospection in the past". The need for this Bill, and indeed for the Health and Social Security Act 1984, underlines the enormous complexity of the system which is involved in remunerating the NHS contractor professions.

In the case of the optical professions the system produces an anomaly, among others, that those opticians who have recently joined the NHS are likely to be surcharged for alleged overpayments to opticians of overheads totalling about £15 million. A large number of those opticians have retired from the service or are no longer under contract.

On Second Reading on 30th July, as reported at col. 914 of Hansard, my noble friend spoke about the £11 million which the Government endeavoured to recover in a case which the Association of Optical Practitioners and the Federation of Optical Corporate Bodies fought in the courts and won. My noble friend the Minister said that the Government would accept that position; but in addition there is this £15 million which we fear the Government may seek to collect.

Another anomaly is that these alleged overpayments caused by lack of precision in DHSS calculations may lead to further reductions in the already inadequate sight test fee. That could seriously affect the ability of some practitioners to provide general ophthalmic services. The point is really made by these facts. In the years 1983 to 1986, for which we fear the department might seek recovery of the £15 million after the passage of the Bill, the turnover of opticians was about 1,500—a quarter of the practising profession.

So the real nub of the issue and the reason why I entirely support what the noble Lord, Lord Ennals, said earlier, and why I want very serious consideration of both these amendments, Amendments Nos. 42 and 49, is that because of the slowness of working in the past, which is no fault of the profession but is the fault of the system which has been devised by the Department of Health and Social Security, there is likely to be either an enormously complicated process of approaching each and every separate optician—and I expect it applies equally to other contractor services—or a gross statement that the profession has to find £15 million or whatever it is.

But who is it to come from? If it comes from the present practitioners, a quarter of them will be different and either ought to be paying and are not or will be paying and should not. That seems so ridiculously wrong that I really think my noble friend must come up with something, and I should have thought that the simplest solution for her would be to give serious consideration to accepting Amendment No. 49. That will get the department off the hook, not only as regards an accusation of unfairness and inefficiency, either present or retrospective, but also as to possibly being taken to court yet again and losing—because I think that the courts might find favourably under all kinds of circumstances when this situation is really due to a system which the Government have invented for themselves. So at this stage I beg to move Amendment No. 42.

Lord Cullen of Ashbourne

I should like very briefly to support my noble friend Lord Mottistone. I think that he has put the case extremely well. I am not sure whether the period of two years is the right one but I certainly think that there should be some limitation on the amount of time in which the Government can go back and alter previous determinations. As it stands at the moment under the provisions of Clause 3, there will never be any such thing as a final determination, and any negotiated settlement which becomes the subject of a determination by the Secretary of State will be nothing more than a provisional decision. That is extremely unsatisfactory for the practitioners and I look forward to hearing what my noble friend the Minister has to say.

10 p.m.

Baroness Trumpington

At first sight the aims of the first amendment that we are discussing, Amendment No. 42, appear to be eminently reasonable. I have much sympathy with those aims. However, when one examines more closely the effects that this amendment would have, as I hope to explain to my noble friend Lord Mottistone, a number of difficulties emerge. First, because the remuneration of all the contractor professions includes a number of different elements, arriving at the right amount to be paid becomes a complex process. Therefore it is not always possible to implement an adjustment to take into account an earlier incorrect determination within two years. For example, under the balancing arrangements of the Doctors and Dentists Review Body for doctors and the Dental Rate Study Group for dentists it is not uncommon for the need for such an adjustment to take three years to come to light—and no one would accuse the DDRB of skulduggery.

Assurances have already been given that this Bill will not demonstrate any intention to change the current pay system for doctors and dentists. Those assurances include the balancing arrangements that I have already mentioned. This amendment, if passed, would upset those arrangements. That would be against the interests of both the professions and the taxpayer.

Secondly, one should not forget that time is needed for discussions with a profession's representatives about any such adjustments. It would hardly be fair to the taxpayer if the professions could limit the scope for recovering overpayments by prolonging those discussions.

Thirdly, the Secretary of State accepts that he must act reasonably when fixing remuneration. Not repaying a particular profession money owing to it because it has been owed for more than two years could hardly be considered reasonable.

Of course it is in everyone's interests to keep the period of adjustments as short as possible. For that purpose we have agreed to more frequent cost inquiries for the pharmacists and opticians. However, the remuneration systems must remain fair both to the contractor professions and the taxpayer. A time limit of this kind would be likely to upset those arrangements, which have worked well for many years.

Amendments Nos. 48 and 49 would prevent the Government from taking into account any overpayment which has occurred or will occur before the Bill's enactment without considering future determinations. That is not acceptable to the Government because it fails to safeguard taxpayers' interests.

Let me make the position clear. We are not changing past settlements. The fact that future fees reflect past underpayments or overpayments is part of the remuneration system. Our underlying aim is to be reasonable and even-handed in our dealings with the professions' remuneration. The parties involved in negotiations might produce a mistaken result compared with what they had intended because of, for example, an incorrect forecast of costs. If either the taxpayer owes the profession money or the profession owes the taxpayer money that should be put right.

We are making it clear that we have the right to recover any overpayment or repay any underpayment to the professions. Let me give one example. Following the 1978 inquiry, the Government paid opticians some £92 million to make good past underpayments. We have also agreed not to use these new provisions to take into account the opticians' £11 million unintended profits. A 1983 inquiry showed that overpayment in excess of £10 million had occurred on sight test fees. The Government have honoured their commitment and paid out £92 million. It is now for opticians to follow suit. It works both ways.

Apart from this Bill, the Government have powers under Section 43 of the 1977 Act to rectify underpayments occurring before this Bill's enactment. Therefore, the professions would continue to receive the benefit of past underpayments, but the amendments would deprive taxpayers of recompense for past overpayments up to and including determinations for 1986–87. That is inequitable and unacceptable.

My noble friend Lord Mottistone spoke about the overpayment to opticians and quoted the figure of £15 million. For those not providing ophthalmic services at the time and who did not benefit from the overpayment, Clause 3(3) allows the adjustment downwards not to affect them. They need not suffer. The clause can only influence fees and allowances determined after the Bill's enactment. However, those future pay settlements could reflect underpayments or overpayments which had occurred before enactment. The amendments would prevent the Government from taking into account any overpayment which has occurred or will occur before the Bill's enactment when considering future determinations. That is not acceptable to the Government because it fails to safeguard the taxpayers' interests.

If my noble friend would like me to continue, I can. I hope, however, that I have given him at least one proof that people who have retired will not be liable. I finish for the moment by saying that I am sorry but that no discourtesy was intended to my noble friend. It is my understanding that the grouping of amendments is suggested by the department but that the actual grouping is agreed by the usual channels.

Lord Ennals

I am a little puzzled. If the system is not being changed, as I understand the noble Baroness to say, by the introduction of Clause 3, I do not know why Clause 3 has been included at all. Presumably its purpose must be to change the system. I suppose that this was necessary because the Government were taken to court and lost their case. I should like to put a question, though I do not expect an answer now. It would perhaps be better if I put it on the Order Paper. I should like to know how many times the Government, in the shape of the DHSS, have been taken to court and lost their case. It must run into double figures on many issues where the Government have been forced to think again.

If the noble Baroness can say that I am right in believing that she has introduced the clause because there is some change, I should be grateful for an explanation. Otherwise why has the clause been included at all?

Baroness Trumpington

Ignoring the noble Lord's irrelevant remarks, let me try to make the position clear. We are not changing past settlements. The fact that future fees reflect past under payments or overpayments is part of the remuneration system. Our underlying aim is to be reasonable and evenhanded in our dealings on the profession's remuneration. The parties involved in negotiations might have produced a mistaken result compared with what they had intended becuase of, for example, an incorrect forecast of costs. If either the taxpayer owes the profession money or the profession owes the taxpayer money, that should be put right.

We are making clear that we have the right to recover any overpayment or repay any underpayment to the professions. I should like to give an example that I hope I have not put before the Committee already. Following the 1978 inquiry, the Government paid opticians £92 million. That is, I believe, an example I have already given. We introduced the Bill because the courts found that the principle underlying the present system was wrong in law; that is, the 1984 Health and Social Security Act did not achieve its intended purpose. I hope that this fully answers the noble Lord.

Lord Winstanley

Have I rightly understood the noble Baroness to say that Clause 3 does not change things? It merely legitimises what the Government have been doing for years.

Baroness Trumpington

Correct.

Lord Mottistone

That is a pity. To take the point made about the grouping, if it is the responsibility of the usual channels I hope that they will read Hansard tomorrow. I have always been courteously asked beforehand whether I mind amendments being grouped. That did not happen this time.

I do not wish to prolong the debate indefinitely, but this is perhaps the most important point about Clause 3. It affects the reason for Clause 3 being in the Bill. My noble friend says that the system has worked well for many years. I suspect that it did up to the time that we had very high inflation. I shall not go into how or why that happened. That is political, and I do not wish to become involved. We are all together on the issue before us. It was very high inflation, rocketing year by year, that, I suspect, started to make the system not work very well. There was such an enormous change between one year and another. Someone made an estimate as to what should be the charges, or whatever they are called, for sight tests in the year nineteen something or other. A couple of years later that was far too little, and so there was a gross underpayment.

When one has almost no inflation—as broadly speaking occurred for the first 20 years or so of the existence of the health service—it probably slid along perfectly well. That could happen again. I am speaking in broad terms. We could return to high inflation, in which case this will not work. I do not think that it is therefore right to say that it has worked very well for many years. It has worked for some years but not all.

The other point my noble friend made was that it is fair that it should work both ways. The noble Baroness made a great issue about this having to be fair to the taxpayer as well as to the profession. But that is making groupings of people. The taxpayer in this respect is not "a person" but a whole group of persons represented, in this case, by the DHSS. Global sums such as £92 million, £15 million and £11 million are talked of. It is easy to talk in those terms because these sums can then pass back to the taxpayer. In theory, the taxpayer is charged less taxes the next year because he has his £92 million back, or whatever the sum may be. But that is not a figure which relates to individual people.

In the case of opticians—and no doubt the other contractor services—one is dealing with individual people. I gave Members of the Committee the information that between 1983 and 1986 there was a turnover of some 1500 opticians. That was a quarter of the practising profession. As I understood from my noble friend provisions under Section 3 allow the people who are new to the profession not to be charged their share of the £10 million plus which was the latest figure that, as a rough guess, my noble friend gave as being outstanding. If they are not to be charged that figure, it means that the share of a quarter of these people will be charged to the three-quarters who have not changed. The quarter who have left the profession, for whatever reason (and some of them might even have died) cannot be charged. The scheme is therefore not fair to the individual within the profession. We are talking about some 6,000 people instead of some 60 million taxpayers—though that is not the correct figure, because it includes women and children.

The comparison is not a fair one. The number of taxpayers is much higher. The scheme could therefore be extremely unfair on the individual and could even drive people to bankruptcy in the case of individuals within a comparatively narrow profession who are trying to deal with the same sum of money.

I shall not press this to a Division or anything silly like that; but I implore my noble friend to give serious thought to the practical effects of saying, rather smugly, "Here is this clause which will give us legal backing for what the Government have been trying to do", as she said to the noble Lord, Lord Winstanley. That is assuming that what the Government have been trying to achieve is a good thing. I am telling the noble Baroness that it is not, and will not necessarily be so in the future. It may be suitable for the doctors and the dentists, because there is nobody particularly arguing their case. The noble Lord, Lord Winstanley, may be able to tell us that the doctors are as happy as the day is long. But I can tell the noble Baroness that it is not fair to the opticians.

No doubt there may be other smaller professional bodies which are perhaps less well organised. However, I would remind the noble Baroness that I began my remarks with the fact that the British Medical Association said that they were behind all my amendments. I rather suspect, therefore, that I have the doctors on my side too.

I hope that the noble Baroness will be able to come back with something better than saying, "You have to like it or lump it," and that she will look into this very seriously, so that at Report stage we can attempt to make fair provisions, perhaps on the lines of Amendment No. 49, which was dismissed rather too abruptly, I should have thought. That would do one good turn. The Government also could have a serious look at how we could, using modern equipment, accept something more like the provision in Amendment No. 42, and stop trying to pretend that, "It is all right, Jack, if only we have got the law behind us".

10.15

Lord Ennals

Since Amendment No. 48 is being grouped in this debate and the noble Baroness replied to it, it is not very satisfactory to say that this is not retrospective legislation. If there has been retrospection in the past it is now putting legal approval to retrospective legislation. I do not think legislation should ever be retrospective.

Here we are making some changes in the rules. It is not exactly the same as it was before, otherwise we would not need to have this clause. So I share the concerns of the noble Lord, Lord Mottistone. Like the noble Lord, I have no intention of pushing this or one or two other amendments in my name later on to a Division. However, the Minister will not only have to give some thought to arguments that have been put forward by the noble Lord, Lord Mottistone, and myself, but I think on a cross-party basis we need to look very carefully at what the Government come back with when we come to Report stage.

Baroness Trumpington

Before my noble friend withdraws his amendment, I still think I am right to stress the underpayment as well as the overpayment. If the thoughts of the noble Lord, Lord Ennals, were followed through, that would mean that people who had been underpaid would equally suffer. The adjustment of overpayment and underpayment on fees is the subject of discussion between the DHSS and the opticians' representatives, and I really cannot preempt those discussions.

Lord Cullen of Ashbourne

Before my noble friend withdraws his amendment, if the noble Baroness does not come back on Report with something on the lines of the amendment of my noble friend, it would be worth considering a different period. When, in support of my noble friend, I said that I did not know whether two years was the right period, my noble friend Baroness Trumpington said that that was too short a period. I think it is worth considering three years. At least that would give some limitation and would not make it possible for the department to go on year after year altering past determinations.

Lord Mottistone

I am sorry not to have had a more positive answer from my noble friend. I should have liked her to say that she would have a good look at this and see whether she could come back with an amendment of her own. She is clearly not going to do so. Therefore, I shall certainly put down an amendment on Report outlining what I think she ought to do. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Renton)

Amendment No. 43 in the name of the noble Lord, Lord Mottistone.

Lord Mottistone

The noble Lord, Lord Ennals, has Amendments Nos. 43 to 46. They are not my amendments.

The Deputy Chairman of Committees

There is a mistake on the Marshalled List. I take it that the name of the noble Lord, Lord Ennals, should appear at the top of page 8 of the List.

Lord Ennals

That is correct.

The Deputy Chairman of Committees

I have to point out that if Amendment No. 43 is agreed to, then I cannot call Amendments Nos. 44 or 45.

Lord Ennalshad given notice of his intention to move Amendments Nos. 43 to 45: Page 6, line 27, leave out from ("relates") to end of line 29 and insert ("shall not deduct such amounts from the remuneration of persons who first provided such services on or after a date subsequent to the period for which the deduction is calculated as being due.".) Page 6, line 27, leave out ("may") and insert ("shall"). Page 6, line 29, leave out ("it relates") and insert ("the determination relates, and shall not deduct such amounts from the remuneration of persons providing such services if any part of the period for which the deduction is made relates to a period prior to the date on which those persons first provided services of the description to which the deduction relates.".).

The noble Lord said: I always enjoy having my name at the top of any list and resent it when it is not there. If the noble Lord, Lord Mottistone, has something different to say from what I am going to say, I do not want to undermine his position. I was not proposing to move Amendments Nos. 43, 44 and 45 because they cover many of the issues which have been discussed in debates that we have completed. Therefore at this stage it is not my intention to move Amendments Nos. 43, 44 and 45. However, as I have said, I do not wish to deprive the noble Lord, Lord Mottistone, of that opportunity.

[Amendments Nos. 43, 44 and 45 not moved.]

Lord Ennalshad given notice of his intention to move Amendment No. 46: Page 6, line 30, at end insert— (" "different information" means only such supplementary information relating directly to the information on which the earlier determination was made and which was available to the determining authority at the date of the earlier determination but to which the determining authority did not have regard.".)

The noble Lord said: I believe that Amendment No. 46 is linked with Amendment No. 47. My judgment is that Amendment No. 47 is preferable to Amendment No. 46. I hate conceding that to others, but if it is permissible I should prefer the noble Lord, Lord Cullen, to move Amendment No. 47 rather than for me to move Amendment No. 46.

[Amendment No. 46 not moved.]

Lord Cullen of Ashbournemoved Amendment No. 47: Page 6, line 30, at end insert— (" "different information" means such directly related information which was not, and could not have been, available and known to the determining authority at the time of the earlier determination. It excludes such directly related information which was, and could have been, available and known to the determining authority at the time of the earlier determination but is used in a different manner at the time of the later determination.")

The noble Lord said: I hope that the underlying purpose of this amendment will be fairly obvious. It surely cannot be right to allow the Department of Health and Social Security to have powers to make adjustments to the remuneration of the NHS contractor professions merely because, if an earlier determination by the Secretary of State had been made at the date of a later determination, it would have been made on the basis of "different information". That would seem to be the situation regardless of whether the persons to be penalised had any responsibility for the fact that the determining authority did not have that information, nor even any knowledge of it.

As it stands, the clause is offensive on common sense, practical and financial grounds, if only to the extent—as the noble Lord, Lord Ennals, said regarding an earlier amendment—that the contractor professions are being asked to run their business and professional lives on a completely indeterminate basis. The powers in this clause would enable the DHSS to arrive at a negotiated remuneration settlement with the opticians, the dentists or the doctors in 1986 and yet say in 1987, 1990 or at any time in the future: "Oh dear! we got that settlement all wrong. We now have some different information which neither we nor you knew about".

The professions accept, I think, that it is reasonable to have adjustments annually according to the balance sheet at the end of a period of a negotiated settlement. However, this clause goes way beyond that and would allow the department in effect to re-open previously long-established settlements. The powers are almost a positive inducement towards sloppiness on the part of the NHS negotiators. The clause would enable the department to think that it will not matter too much if it makes mistakes or if it ignores vitally important and relevant information because it can always be swept under the table for the time being and picked up later by way of adjustments in the course of a subsequent round of negotiations, however many years later that may be.

As far as I can see, there is absolutely no limit to the amount of time that the department can go back to make these adjustments. For that reason I hope that the amendment will be accepted. It would prevent the department bringing up as "different information" data which could perfectly well have been available and known to it at the time of an earlier determination. It also seeks to prevent the DHSS from rehashing or reprocessing old information and dressing it up as information which is new and different.

It may be said that if this amendment were accepted there could be long arguments about whether information had been available at the time of the earlier determination; whether the determining authority knew about it; and whether it was old information dressed up in new clothes. All those points are matters of fact which it should be easy to resolve on the basis of documentary evidence.

So far as ophthalmic opticians are concerned, I am advised that the fullest possible disclosure of all relevant information is made during the course of each successive remuneration inquiry. Now that inquiries are to be made on an annual basis, there ought not to be any undisclosed or different information which subsequently comes to light. It ought therefore to be perfectly practicable for the department to make whatever adjustments are necessary to take account of underpayments or overpayments which may have occurred in the past within a timescale agreed with the contracting profession. This amendment would concentrate the minds of all parties to remuneration negotiations and would help to avoid arguments as to what constitutes different information for the purpose of this clause.

A proper definition of different information is, I submit, essential to this clause. As my noble friend Lord Mottistone said, he had the support of the British Medical Association on all his amendments. I equally have its support so far as this amendment is concerned, and am authorised to say so. I beg to move.

Lord Mottistone

I should just briefly like to support my noble friend and to remind my noble friend the Minister again that we have in this world today computers, electronic mail and all sorts of ways of collecting information, assembling it and assessing it. It is a disgrace that central government are so slow off the mark in using these modern devices. If the solution to the problem is to get on with it, let my noble friend accept this amendment—and several of the others—and get herself geared up to do the job properly. Then it will not be a problem.

Baroness Trumpington

If this amendment was accepted, I can imagine the long arguments that would no doubt take place. Was the information available at the time of the earlier determination? Could it have been made available? Did the determining authority know about it? Is this old information re-presented as new information? Some of the data used in considering levels of remuneration are very complex, even given the use of modern technology. It could prove difficult to resolve what was and what was not new.

Situations may also arise where the determining authority and the profession in question might have to fall back on old, long-available information because expected new information was not forthcoming; or information may be treated in a certain manner provisionally, pending the outcome of negotiations.

This amendment would be unnecessarily restrictive. But let me give the following assurance. If this or any other government were foolish enough to put forward spurious old or new information as a means of unreasonably reconsidering past determinations, they would, quite rightly, receive short shrift from the contractor professions' representatives. In no way is that our intention. We are firmly committed to a full and fair negotiation.

Lord Cullen of Ashbourne

That is a decisive reply from my noble friend. I do not quite understand why the Government have not themselves given a proper definition of what "different information" means. Other definitions appear in the Bill, and I think it is surprising that such a wide and vague expression as "different information" is not in any way defined. Of course, I am not going to divide the Committee at this time of night; but I shall reserve my fire for Report stage when I may well come back to the matter.

Lord Ennals

I agree entirely with the case that has been made by the noble Lords, Lord Cullen and Lord Mottistone. That is why I did not move my amendment, which had a similar purpose.

Amendment, by leave, withdrawn.

[Amendments Nos. 48 to 52 not moved.]

10.30 p.m.

Lord Mottistonemoved Amendment No. 53: Page 7, line 29, at end insert— (" ( ) It shall be the duty of the determining authority, in making any determination or adjusting remuneration in the exercise of its powers under this section, to provide fair and reasonable remuneration.")

The noble Lord said: This is a brief point. It deals with the remuneration of contractor professions. Such remuneration should be fair and reasonable, but this Bill does not provide for that explicitly. Following the ruling in a case brought recently by the Association of Optical Practitioners before the Scottish courts—I am sorry that the noble Lord, Lord Ross, is not present to hear this—some legal opinion is of the view that the Secretary of State would be able to reduce arbitrarily the sight test fee paid to opticians by a large amount before the courts agreed that he was acting unreasonably. In other words, if there is no legal duty on the Secretary of State to be fair and reasonable in determining contractors' remuneration, he can reduce it significantly without being required by law to state his reasons for so doing.

The result is potentially one sided in favour of the DHSS—it may be that my noble friend would say in favour of the taxpayer; that amorphous mass of people.

The remedy is to impose a legal duty on the Secretary of State to provide fair and reasonable remuneration. Such a duty would not prevent him from reducing contractors' remuneration, merely requiring him to furnish an adequate justification for doing so. The Secretary of State will claim that it has always been, and will continue to be, his intention to act reasonably. If so, he should not object to this amendment.

The point is that this came to light in the courts, and it therefore should not be treated lightly as something just to be brushed away, because the courts demonstrated that for the Government to appear to be reasonable we need to have something in statute, to make sure that they are. I beg to move.

Baroness Trumpington

It has been said on a number of occasions when this Bill has been debated that the Government are firmly committed to full and fair negotiations and consultations with the contractor professions. Indeed, the Health and Social Security Act 1984 introduced a requirement for consultation before remuneration is fixed. The need to act fairly and reasonably when considering remuneration for the contractor professions is a need of which this Government are fully aware. The Secretary of State accepts that he must act reasonably when fixing remuneration; just as he must act reasonably when exercising any other similar discretionary power. While the Government accept the need to consult, and the need to act reasonably, we do not see the need for this amendment which is, I have to tell my noble friend, unnecessary.

Lord Mottistone

It would appear that the Scottish courts would not agree with my noble friend on her closing remarks. I wonder whether she could have a look at that before we terminate this issue? I shall withdraw the amendment now but may well come back with an identical amendment at Report, in the hope of drawing out of my noble friend the fact that the decision of the Scottish courts had been taken seriously into consideration by her department. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Baroness Trumpingtonmoved Amendment No. 54:

After Clause 3, insert the following new clause:

("Co-operation and advice in relation to disabled persons, the elderly and others.

—(1) After section 13 of the 1978 Act there shall be inserted the following sections — Co-operation in planning of servies for disabled persons. the elderly and other. 13A. —(1) The duty under section 13, in relation to Persons to whom this section applies, includes—

1. (a) joint planning of—
   1. (i) services for those persons; and
   2. (ii) the development of those services,
   being services which are of common concern to Health Boards and either or both of the authorities mentioned in that section;
2. (b) such consultation with voluntary organisations providing services similar to those mentioned in paragraph (a) as might be expected to contribute substantially to the joint planning of the services mentioned in that paragraph;
3. (c) the publication, at such times and in such manner as the bodies who have made joint plans under paragraph (a) consider appropriate, of those joint plans.

(2) This section applies to—

1. (a) disabled persons within the meaning of the Disabled Persons (Services, Consultation and Representation) Act 1986;
2. (b) persons aged 65 or more; and
3. (c) such other categories of persons as the Secretary of State may by order specify.

Joint Liaison Committees, 13B.—(1) The Secretary of State may, after consultation with such Health Boards, local authorities, education authorities, associations of such authorities and other organisations and persons as appear to him to be appropriate, by order provide for the formation and as to the functions of committees, to be known as joint liaison committees, to advise Health Boards and local and education authorities on the performance of such of their duties under section 13 as consist of co-operation in the planning and operation of services of common concern to Health Boards and such authorities. (2) An order under subsection (1) may contain provisions relating to the role of voluntary organisations in joint liaison committees.". (2) Section 15 of the Disabled Persons (Services, Consultation and Representation) Act 1986 is hereby repealed.").

The noble Baroness said: When this Bill had its Second Reading I reminded noble Lords of the Government's intention to introduce a new clause to deal with the statutory regulation of joint planning of health services in Scotland. The introduction of this power was originally proposed for inclusion in the Bill now enacted as the Disabled Persons (Services, Consultation and Representation) Act 1986 but, due to technical difficulties which would have prevented the provision covering all priority groups to whom joint planning presently applies, it was agreed that such inclusion was inappropriate and arrangements were put in hand to transfer the provision to the Bill now before you.

The new clause is the outcome. The Government believe that it represents a significant milestone on the way to the development of joint planning in Scotland. Subject to the Government's desire that joint planning in Scotland should proceed on a voluntary basis, which is reflected in the clause as now drafted, its terms represent the broad objectives set by the sponsors of the Disabled Persons (Services, Consultation and Representation) Act.

The clause inserts two new sections in the National Health Service (Scotland) Act 1978, to be inserted following Section 13 of that Act.

With the leave of the Committee, I shall explain the purpose of these sections. The first describes the duty of co-operation between health boards and local authorities in respect of joint planning of services of common concern. Also, recognising the considerable work done by the voluntary sector, provision is made for consultation so as to enable voluntary organisations to play a part in the process of joint planning. Provision is also made for the publication of plans since the Government consider that it is important that the public at large are aware of how it is intended that services should develop. Finally the section defines the categories of person to whom the section should apply.

It was in respect of this last point that the major difficulty arose in taking forward the provision in the context of the Bill relating to disabled persons. Such a provision could only have applied to disabled persons as defined by that Bill. The measure now proposed extends not only to disabled persons, but also to elderly persons. Moreover, we have been able to make provision for inclusion of such other categories of persons as the Secretary of State for Scotland may wish by order to specify.

The second new section confers on the Secretary of State for Scotland the power to provide by order for the formation and as to the functions of committees to be known as joint liaison committees who will advise health boards and local and education authorities on the discharge of their duties of co-operation and planning of services of common concern. Such committees, of course, already exist and are now engaged in their work. It is the Government's desire that these committees should be allowed to get on with the minimum of statutory intervention. This new power, however, will confer on the Secretary of State a useful sanction which he can apply if it becomes clear that joint planning is not proceeding under the present non-statutory arrangements or is failing to address the proper issues.

This, then, is the substance of the new clause. It improves and clarifies the existing legislation governing the process of joint planning and it confers on the Secretary of State for Scotland new powers for ensuring the progress of that process by statutory intervention if that is considered to be necessary. I commend the clause to the Committee.

Lord Ennals

I am speaking on behalf of my noble friend Lord Ross of Marnock. I should not wish to intervene in Scottish affairs, but I welcome the fulfilment of a commitment that was made when we were discussing the earlier disablement Bill. My only difficulty here is that this appeared only very recently and there has been very little opportunity either for consideration in the Chamber, or for consideration with voluntary organisations that will benefit from extending this Bill to apply to Scotland. I have, for instance, received today a telephone call from the Scottish Council for the Single Homeless, who have some concerns about this matter and who will be getting in touch with me. Through either my channels or those of my noble friend Lord Ross of Marnock we may want to make some suggestions when we come to Report stage. But the basic concept of the Bill is one which we warmly welcome and we may find ourselves coming back to this matter if there are necessary items at Report stage.

On Question, amendment agreed to.

The Deputy Chairman of Committees

I have to point out that Amendment No. 55 is an amendment to Clause 6. Before we deal with that, the Question is that Clause 4 stand part of the Bill.

Clause 4 agreed to.

Clause 5 agreed to.

The Deputy Chairman of Committees

Amendment No. 55 is an amendment to Clause 6, and there is a printing error in it. In the fourth line of the amendment "13A" should read "13B".

Clause 6 [Short title, etc.]:

Baroness Trumpingtonmoved Amendment No. 55:

Page 8, line 10, at end insert— (" (4A) Each of the following provisions of this Act—

1. (a) Section 2 above; and
2. (b) to the extent that it inserts section 13B of the 1978 Act into that Act, section [Co-operation and advice in relation to disabled persons, the elderly and others] above,

shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint in relation to it.").

The noble Baroness said: This amendment introduces a commencement order provision. It provides that once the Bill is enacted, Clause 2, on pharmaceutical services, and the new provision intended to regulate the process of joint planning in Scotland will not come into force until such a day as the Secretary of State may by order appoint. Different days may be appointed for the different provisions. I beg to move.

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

In the Title:

Baroness Trumpingtonmoved Amendment No. 56: Line 9, after ("Act") insert ("to provide further, as respects Scotland, as to co-operation among certain bodies in securing and advancing the health of disabled persons, the elderly and others;")

On Question, amendment agreed to.

Lord Ennals

I was going to say that, in view of the amendment which was passed at the beginning of the debate on Clause 1, we shall need to submit an amendment to the Long Title of the Bill which takes account of the change in Crown immunity. We shall need slightly to adjust it in order that when we come to the Report stage we can have before us a correct Long Title.

Title, as amended, agreed to.

House resumed: Bill reported with amendments.