National Health Service (Amendment) Bill

HL Deb 28 October 1986 vol 481 cc677-704

7.9 p.m.

Report received.

Clause 2 [Health and safety legislation]:

The Deputy Speaker (Baroness Cox)

My Lords, before calling Amendment No. A1, I should point out that in its penultimate line as printed in the Marshalled List the word "instructions" should read "instruments".

Baroness Trumpington moved Amendment No. A1:

Page 3, line 6, at end insert— ("(1A) In this section— health authority"— (a) as respects England and Wales, has the meaning assigned to it by section 128 of the 1977 Act; and (b) as respects Scotland, means a Health Board constituted under section 2 of the 1978 Act, the Common Services Agency constituted under section 10 of that Act or a State Hospital Management Committee constituted under section 91 of the Mental Health (Scotland) Act 1984; and the health and safety legislation" means (a) the Health and Safety at Work etc Act 1974 and the regulations, orders and other instruments in force under it; and (b) the enactments specified in the third column of Schedule 1 to that Act and the regulations, orders and other instruments in force under those enactments.".

The noble Baroness said: My Lords, at Committee stage your Lordships approved an amendment to Clause 2 of the Bill moved by the noble Lord, Lord Ennals, which had the effect of widening the clause to include the removal of Crown immunity from health authorities in respect of health and safety legislation. As Clause 2 presently stands, it is not enforceable. The Government recognise the concerns which were expressed by the Committee and I am therefore moving Amendment No. A1 and speaking to Amendments Nos. B1 and C1 in order to ensure the desired result.

Clause 2 of this Bill as it stands would remove Crown immunity from health authorities—a term which is undefined—in respect of unspecified health and safety legislation. It would provide power to make regulations to modify that legislation. The first amendment seeks to define the appropriate legislation, to define the health authorities affected, to delete the regulation-making powers and to limit the application of the clause to events occurring after its commencement. Amendment No. A1 defines health authorities in England and Wales and health boards in Scotland in the same way as in Clause 1. Your Lordships are already aware, I hope, of a misprint in the penultimate line, and the word "instructions" should read "instruments".

Amendment No. A1 also identifies the relevant legislation as the Health and Safety at Work etc. Act 1974, regulations made under Part I of the Act and the relevant statutory provisions which are specified in Schedule 1 of the Act (which were Acts in existence at the time of the passing of the 1974 Act), including any regulations, orders or other instruments in force under those Acts.

Subsections (2) to (5) seek to provide powers for regulations to determine who should be treated as occupier or owner of health authority premises for the purposes of health and safety legislation and also to modify health and safety legislation in its application to health authorities, as appropriate. While it is necessary to take such powers in respect of food legislation under Clause 1, the necessary powers already exist in respect of health and safety legislation in Section 15 of the Health and Safety at Work etc. Act. The second amendment therefore seeks to remove the duplicate powers.

Clause 1(8) provides that the removal of Crown immunity under food legislation would have no effect on anything done or omitted before its commencement. We think that a similar provision is necessary in relation to the removal of Crown immunity in respect of health and safety legislation. The first amendment, by inserting a new subsection to that effect, seeks to achieve that. This amendment, together with Amendments Nos. B1 and C1 to Clause 2, would preserve the intention of the clause to remove Crown immunity from health authorities. Without these amendments, I am advised that Clause 2 would not have the effect desired by the sponsors. I hope that your Lordships will accept these amendments, and I beg to move.

Lord Ennals

My Lords, let me first say how much I welcome Amendment No. A1, which has been proposed by the noble Baroness, and, beyond that, that I think the whole House will appreciate the way in which the Government have handled the decision taken at Committee stage. It was quite clear then that there was strong feeling on all sides, and this is how our system works. I congratulate the noble Baroness, and indeed her noble friend the Leader of the House, on ensuring that this was not a matter passed to the other place and then thrown back and forth at the end of the Session.

I am quite certain that there was a strong feeling expressed that here was a clause that was only half a clause. It has now been completely put right, and I can do no more than thank the noble Baroness. It is quite clear from what she said that the amendments which have now been tabled have tidied up the amendment that was carried by a substantial majority in Committee. Therefore, I advise my noble friends and everyone else in the House who supported the amendment that we carried last time to support this amendment which the noble Baroness has, I believe, so generously moved.

Lord Kilmarnock

My Lords, we on these Benches would also like to add our appreciation of what the noble Baroness has done. My name was associated with that of the noble Lord, Lord Ennals, in the amendment, as was the name of my noble friend Lord Winstanley.

It was a remarkable debate and a debate in which, as so often happens in this House, people listened to the arguments. I recall that even the doubts of the noble and learned Lord, Lord Denning, were stilled and that he joined us in the final vote, as did the noble Lord, Lord Boyd-Carpenter. That is one of the best expressions of this House listening to the arguments and drawing the right conclusions. On this occasion also we have to congratulate the Government on having accepted the decision and done some tidying up in order to bring the new provision into operability. I should like to express my thanks to the noble Baroness for a very satisfactory outcome.

Baroness Turner of Camden

My Lords, may I ask one question of the noble Baroness? I understand that for a very long time now the Health and Safety Commission has been absolutely in favour of doing away with the exemptions from the provision relating to prosecutions and notices. Is the noble Baroness satisfied that the wording she is proposing meets the Commission's policy, which has consistently favoured removal of exemptions since they were first considered in 1977?

Baroness Trumpington

My Lords, I am grateful to the noble Baroness for raising that point, and, yes, I am satisfied.

Baroness Turner of Camden

My Lords, I am very grateful.

7.15 p.m.

Baroness Trumpington moved Amendments Nos. B1 and C1:

Page 3, line 7, leave out subsections (2) to (5).

Page 3, line 25, at end insert— ("(7) This section shall have no effect in relation to anything done or omitted before its commencement.").

The noble Baroness said: My Lords, I have already spoken to these amendments. I beg to move.

Clause 3 [Pharmaceutical services]:

Lord Ennals moved Amendment No. I:

Page 4, line 20, leave out from ("granted") to ("secure") in line 23, and insert:— ("unless the Committee is satisfied, in accordance with the regulations, that it is necessary or desirable to refuse it, having considered the application and all relevant circumstances, including in particular the opinion of the Committee of any need to").

The noble Lord said: My Lords, I believe with this amendment we can take Amendment No. 3, which seeks to apply the same principle to Scotland. It is a simple amendment. The issue was touched upon during the debate at Committee stage but I have tabled it in a different form on this occasion.

If we recognise that there will come into existence a committee in each locality which will determine whether a licence shall be granted to a pharmacist to have an NHS contract, if we accept that—however much some of your Lordships may disagree—the question is on whom should be the onus of proof. Should it he a situation in which a contract shall not be granted unless, or should it be a situation in which a contract shall be granted unless? What I am seeking to do in this amendment, together with Amendment No. 3, is tomove the onus of proof from the applicant to the committee so that the committee would need to say why the pharmacist should not be allowed to operate, as has happened throughout 40 years of the National Health Service.

It seems to me that it would be better if that onus were to be transferred so that the presumption would be that an appropriately qualified pharmacist applying for an NHS contract would be granted it unless there were necessary or desirable reasons why it should be refused. The amendments would not take away any of the powers the committee would have but would require it to give good reasons why such a pharmacist should not be established, rather than simply leaving the responsibility on the applicant with the assumption that the application will not be accepted unless full and satisfactory proof is given to the committee.

I think that at present, as proposed by the Government, the Bill is too heavily weighted against the applicant and I do not want to see it weighted heavily against the pharmacist who wishes to establish himself, if it is appropriate. Of course the committee would have a right to say that it is not appropriate, but I believe that the pharmacist should have an opportunity to seek and get a contract unless there are necessary or desirable reasons to refuse it. As I said, this does not in any way affect the powers of the committee to refuse if there are good and logical reasons for doing so.

Baroness Trumpington

My Lords, the Government oppose these amendments, because they are not necessary and because the present provision is clear in its purpose and easier to understand. The noble Lord, Lord Ennals, is concerned that the Bill as drafted puts the onus on the applicant to show to the family practitioner committee's satisfaction that it is necessary or desirable for the application to be granted. That is not the case. There will be an onus on the applicant to prepare his application in the most effective way to maximise his chances of success. There is nothing out of the ordinary in that, but there will also be a different type of onus on the FPC subcommittee that considers the application.

The members of the sub-committee will be responsible for satisfying themselves as to whether it is necessary or desirable to grant the application in order to secure the adequate provision of pharmaceutical services in the neighbourhood—or, I could say, whether it is necessary or desirable to refuse it. It would be for the FPC sub-committee to consider relevant issues such as the present level of pharmaceutical services in the neighbourhood and the ease of access to those services. FPCs are charged with planning local primary care services. The work of the FPC sub-committees deciding applications for new contracts will be carried out in the context of those planning responsibilities. It will be the FPC's responsibility to ensure an adequate provision of services.

As your Lordships are well aware, if the applicant is unhappy about the decision, he or she can appeal. That is the most important safeguard for the applicant and the one that really matters. I think I can best sum up by saying that a distinction that makes no difference is not really a distinction at all. I hope that I have allayed the concerns of the noble Lord, Lord Ennals, and satisfied him that it is not our intention to place any unfair onus upon the applicant. I hope he will withdraw his amendment.

Lord Winstanley

My Lords, the noble Baroness is absolutely right in saying that the amendment is unnecessary, in that the Bill as it now stands is clear. However, while it may be unnecessary from that point of view, there could be a way in which the amendment, although not necessary for the purpose of clarity, is plainly desirable because of the different flavour it gives to the whole exercise upon which we embark. The amendment would alter the presumption. The presumption would be that an application would be granted; whereas the Bill makes the presumption that the application would be refused. I should have thought that in the present situation, where there has been widespread anxiety among pharmacists and particularly among young pharmacists and those who are still studying and thinking of going into practice, an alteration in words—which the noble Baroness herself has said does not in any way destroy the Bill or its purpose—making the intent of the Bill more acceptable to young pharmacists not yet in National Health Service practice would be desirable.

Lord Ennals

My Lords, I am grateful to the noble Lord, Lord Winstanley, for supporting me, because he has said better than I did what I wanted to say. I am not going to press this matter to a vote, but I hope that the noble Baroness will consider this point because I know there are many pharmacists who feel that the Bill in its present form will act against them and against their opportunities as entrepreneurs who wish to develop and use their skills in the community. Although it is a modest amendment, I should like to think that the noble Baroness could give at least a little thought to this before we come to the final stage, which will be at Third Reading. I have no intention of pressing this to a vote this evening.

Baroness Trumpington

My Lords, perhaps I may have the last word on this. There is no presumption against new applications in the Bill as drafted. By phrasing the relevant provision in a negative rather than a positive way—"refuse" rather than "grant"—the onus would revert back to the decision-making body and I think any fears expressed by the noble Lord, Lord Ennals, are groundless for the reasons which I gave earlier.

Lord Ennals

My Lords, if I may have the permission of the House, tabling the amendment was worth while in order to get the assurance from the noble Baroness that there would be no weighting against the applicant for a licence. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Trumpington

My Lords, may I do something rather unconventional? We may take a bit more time on this group of amendments and, although it is not really my job to do so, I wonder whether your Lordships would like to break during pleasure until 8.30. Would it be very awful of me to suggest this or would your Lordships perhaps agree with me? If you do not disagree, may I put it to your Lordships that we should adjourn for an hour and return—

Lord Ennals

My Lords, may I suggest that this is an occasion when we do not need to have a long adjournment? I do not think this debate will last a very long time and an adjournment of an hour may keep us all up later than need be. I suspect that after this amendment the debate will not be a long one and I should like to think that some of us could eat at home instead of here. If the noble Baroness wishes to press the case, I suggest an adjournment of half an hour.

Baroness Trumpington

My Lords, I feel that it would be for the benefit not only of some Members of this House but also of members of the staff if we adjourned now. I take note of what the noble Lord, Lord Ennals, says. I beg to move that further consideration on Report be now adjourned until 8.15 p.m.

[The Sitting was suspended from 7.28 to 8.15 p.m.].

Consideration of amendments on Report resumed on Clause 3.

Lord Harris of High Cross moved Amendment No. 2: Page 4, line 37, 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: My Lords, before we were interrupted I was about to make a very brief statement, by saying that if I correctly understand the purport of Amendment No. 2B in the name of the noble Baroness, Lady Trumpington, I think I can contribute to an abbreviation of our discussions by refraining from moving Amendments Nos. 2 and 4 standing in the names of the noble Lord, Lord Bruce-Gardyne, and myself, while perhaps reserving my position if we are not fully satisfied by her exposition. I beg to move.

Baroness Trumpington

My Lords, I hope that your Lordships will understand why I am speaking mainly to my Amendments Nos. 2B and 2C at this stage of any debate on Clause 3—

Lord Ennals

My Lords, with respect, I understand that Amendment No. 2A has not yet been called.

Baroness Trumpington

My Lords, I hope that I can explain myself away, if the noble Lord Lord Ennals, will allow me. I think that the noble Lord, Lord Hams, has moved Amendment No. 2—

Lord Ennals

My Lords, with great respect, I thought he said that he would not move either Amendment No. 2 or Amendment No. 4 and that he would contribute to the debate which is about to commence. Under that supposition, the next amendment to be taken is No. 2A. Maybe the noble Lord, Lord Harris, can clarify the position.

Baroness Trumpington

My Lords, I understood the noble Lord to say that he reserved his position upon what I was going to say to your Lordships and that he had not withdrawn his amendment. If I have it wrong, perhaps the noble Lord will say so.

Lord Harris of High Cross

My Lords, is it possible for me to exercise the option of re-activating the amendment if the declaration by the Minister on her Amendment No. 2B is not as I understand it to be: that is, on the whole to give us what we wanted, which was to prevent the chemist contractors or their employees on the sub-committees from taking part in the exclusion of applicants to set-up chemists shops?

Baroness Trumpington

My Lords, it is my understanding that we have to decide quite rightly, as the noble Lord, Lord Ennals, said, what we are going to do with Amendment No. 2. As I understand it, the noble Lord, Lord Harris, has not withdrawn Amendment No. 2. The noble Lord, Lord Harris, has to give us his intentions as to what he wants to do with Amendment No. 2.

Lord Harris of High Cross

My Lords, I shall withdraw it in this case and listen to the noble Baroness with close attention. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ennals moved Amendment No. 2A: Page 4, line 37, at end insert— ("( ) for applications to which this subsection relates to be determined by a Sub-Committee consisting of seven persons (including a chairman) appointed by the Family Practitioners Committee of whom three (including the Nominee of the Community Health Council for the district) shall not be registered medical or dental practitioners or pharmacists or employees of such persons) and the remaining three may be registered pharmacists provided they are not specified upon any list under paragraph (a) hereof and employees of such persons.").

The noble Lord said: My Lords, the noble Lord, Lord Prys-Davies, has asked me to move the amendment standing in his name and in the name of the noble Lord, Lord Kilmarnock. It is linked and it may be for the convenience of the House if we take with it Amendment No. 2B, which is in the name of the noble Baroness, Lady Trumpington, something called Amendment No. 2C, which I do not fully understand, and Amendment No. 4. No doubt the noble Baroness will explain when her turn comes; it is always difficult to know whose turn it is.

Before explaining the purpose of the proposal I should like to say that I very much agree that by tabling Amendment No. 2B the noble Baroness has gone a long way towards meeting the concerns that were expressed in the House. For mercies, which are not small in this case, I am extremely grateful. I shall want to put some questions to the noble Baroness about it, although I accept that there is a good deal of common ground.

The proposal contained in Amendment No. 2A is simpler and more comprehensible. So far as I know, there is no other place in the Bill in which the composition of the committee is set out. There have been a great many references to there being a committee of six, of which one is chairman, three are lay members and three are to be something else. It is the nature of the something else that we are debating.

It was argued in Committee that it would be wrong for those who are contracting pharmacists to be involved in deciding whether or not an applicant should be granted a licence through the NHS. It would smack of—and could often involve—someone protecting his own business interests, which I do not think any of us would want to see. This has been substantially recognised by the noble Baroness in her amendment. I shall want to reserve my judgment, as will the noble Lord, Lord Harris of High Cross, until the noble Baroness has given the explanation of the proposal before us. Perhaps I may give my explanation first and then we shall see where the common ground is and what we should do.

If Amendment No. 2A were to be accepted by the Government, we would have a committee of seven, with a lay chairman, and including three lay representatives, one of whom would be appointed by the community health council. We would have three professionals, all of whom could be pharmacists or some of whom could be pharmacists. In any case they would be appointed by the family practitioner committee. But they would not be contracting pharmacists. They might be pharmacists who are working in the health service; they might be pharmacists who are working in industry; or they might be of another profession; although I think most people would feel it right that they should be registered pharmacists—but not contracting pharmacists. So the purpose of the amendment is to establish that the three professionals shall not be contracting pharmacists and therefore would not be in a position to be seen to be protecting their own commercial interests.

If it were to be the case—and I wait to hear what the noble Baroness says—that the three professionals, whether or not they are contracting pharmacists, were not given the right to vote, the decision then would be taken by four; namely, the chairman and three lay people. That seems a rather small group of people to be taking the decision. What would be the role of the three pharmacists or others appointed by the family practitioner committee sitting on the committee? Would they be expected to leave at the moment of decision? I do not know, and I look forward to hearing what the noble Baroness has to say.

But as things are at the moment and until I hear her explanation, I feel that it is more sensible to set out the structure clearly, as this amendment does, and to ensure that all members of the committee can vote but none can benefit in any way as a result of his participation in the decision-making process. I beg to move.

Baroness Trumpington

My Lords, once more unto the breach. I should like to confine my remarks mainly to Amendments Nos. 2B and 2C because I cannot help feeling that if I spend a little time now on the explanation of those amendments, as both the noble Lords, Lord Harris of High Cross and Lord Ennals, suggest, first, your Lordships will realise that we have covered the various worries expressed at Committee stage, and, secondly, you will be convinced that Amendments Nos. 2A and 4 are not appropriate and would not be welcomed by the Government. Therefore, before speaking to Amendments Nos. 2A and 4, perhaps I may put forward our proposals in Amendments Nos. 2B and 2C.

In Committee I agreed to look again at the role of the pharmacist in the consideration of applications for NHS pharmacy contracts. This amendment reflects careful thought within Government on the views expressed by noble Lords from all sides in Committee and the Government's considered position on the right role for contractor pharmacists in both the FPC subcommittee that will make decisions on applications for new NHS pharmacy contracts and in the bodies that will hear any appeals against those decisions. Its effect is to confine the right to take decisions on new pharmacy contract applications to sub-committee or appeal body members who are not already in possession of, or as employees benefiting from, an existing NHS pharmacy contract.

The amendment therefore meets the main point that was raised by your Lordships in debate of the relevant provision of what is now Clause 3 of the Bill; but perhaps I may explain in a little more detail what the Government have in mind. We do not intend any alteration in the size of the sub-committee or the appeal body, which in both cases will remain at six members (excluding a lay chairman). Of the six members, three will be appointed by FPCs and may not be registered pharmacists; the other three will be pharmacists. Of those three pharmacists, two will be contractor pharmacists whose role, if this amendment is carried—as I certainly hope it will be—will be purely advisory. They will not vote on applications; and will indeed he required to withdraw from the proceedings before the sub-committee or the appeal body reaches its decision on the application. The third pharmacy member at both levels will not be an existing contractor-holder, but will be appointed from a list of nominees provided by the Pharmaceutical Society of Great Britain (the ethical body for the whole profession) from other branches of the profession than community pharmacy.

The amendment does not of itself preclude this third pharmacist from having a vote or from taking part in the final decision on applications. The Government will consider further whether it would be right for this third, non-contractor pharmacist to be purely advisory or whether he or she should be part of the voting and decision-taking membership. We shall make an appropriate provision one way or the other in the regulations to be made under this clause once the Bill is enacted.

I am sure that your Lordships will recognise that this amendment meets the major anxiety expressed in Committee—to exclude from actual decisions on new applications those who, fairly or unfairly, might be thought to have a vested interest in the outcome. The Government are satisfied that this is the right course, and that the decision-making structure we now envisage will fairly reflect the interests of local communities in the provision of new NHS pharmacy services, and of pharmacy in its wider professional sense. Contractor pharmacists will remain involved, to offer advice from their own perspective on local pharmaceutical needs. This advice will be important and valuable: but contractor pharmacists will not be able to take part in actual decisions.

The Government are also satisfied that these arrangements do not undermine the principle or the value of limiting the grant of new NHS pharmacy contracts to those which are necessary or desirable. Our assessment remains that FPC sub-committees and appeal bodies will take responsible and informed decisions which balance the NHS's and the taxpayer's interests in restraining NHS pharmacy costs with the need for good local access to services. I make it crystal clear that we would not accept any change which diverted us from the long-term objectives of the new arrangement taken overall. These are: a better distribution of services; a stronger profession, better able to meet the challenges set by the Nuffield Inquiry into the future role of pharmacy; and more cost-effective mechanisms for influencing pharmacy distribution, involving not just the entry limitation arrangements with which Clause 3 is concerned, but the new remuneration structure fully negotiated with the pharmacists' representatives, which backs up the entry limitation with price incentives to efficient pharmacy provision.

I appreciate that some pharmacy interests may regret the loss of the contractor vote; but hope that they will see the issue in its wider perspective, and will accept that the package negotiated on their behalf remains intact and valuable. I take the opportunity, in passing, of dissociating the Government from some of the rather harsh comments made in Committee about the PSNC. The pharmacists' negotiators were, in our view, both effectively and responsibly led in the long negotiations which resulted in a package that will serve the interests of both profession and public.

I should like also to mention two other respects in which, by regulations in due course, we intend to clarify the composition of the FPC sub-committees and appeal bodies which will deal with applications for new pharmacies. In the first place, we intend to exclude dispensing doctors from participation; and, secondly, we intend to ensure that no more than one of the three non-pharmacy voting members can be filled by any single FPC contractor profession other than pharmacy—so that no more than one of these places could be filled by, for example, a prescribing doctor or a dentist. This will help to ensure that the interests of the consumer will be still further strengthened; and that the withdrawal of the contractor pharmacists' votes will not create any problems of balance between the different contracting professions.

I have gone into these points in some detail because I know that your Lordships attach importance to them. In summary, what we propose through these amendments and subsequent regulations will provide a fair balance of advice and influence between the profession of pharmacy, the consumer and other health care professions.

Turning briefly to Amendment No. 4, which applies to Scotland, the noble Lord, Lord Harris of High Cross, will realise that the same points which apply to Amendment No. 2, now withdrawn, have already been dealt with. This also applies to Amendment No. 2A, with the exception of the matter of the community health councils.

The noble Lord, Lord Ennals, raised some points and I shall answer the one regarding the detailed composition of sub-committees and appeal bodies for regulators. Government Amendment No. 2B specifies that no contractor pharmacist can have votes, but the government amendment does not preclude non-contractor pharmacists from voting.

The other point arising from the amendment moved by the noble Lord, Lord Ennals, concerns the role of the community health councils. I should point out to the noble Lord that their role is advisory and it would not be right to bring them within a decision-making process of this kind particularly when, as I mentioned in Committee, they will have both the right to give their views on applications and the right to promote appeals if dissatisfied with the first decision of the FPC. I hope that my amendments are agreeable to your Lordships.

Lord Kislmarnock

My Lords, may I say a few words as my name is attached to Amendment No. 2A? I think we are all agreed that the noble Baroness has attempted to pay attention to the disquiet which was expressed on all sides of the Committee about the composition of the sub-committee. I put my name to this amendment because having seen the draft amendment which the noble Baroness tabled, which she kindly sent to me last night, I had one concern. It seemed to me on a straight first reading of her amendment that if the three contractor pharmacists have no vote one reduces the voting power to four. If someone fell out through illness, or some other reason, the sub-committee would be down to three; and with a disagreement between two of those members there would have to be a casting vote by the chairman. That appeared to me to be a very small voting body to take decisions, and that is why I associated myself with the noble Lord. Lord Prys-Davies and the noble Lord, Lord Ennals.

However, if I understand the noble Baroness right, she now states—although this does not appear in the amendment and, therefore, will not appear in the Bill—that it is envisaged that the pharmacist representation should consist of two contractors who will not have votes and one pharmacist who is not a contractor who will be nominated by the Pharmaceutical Society of Great Britain, who presumably will have a vote. That will give a voting body of five out of a total committee of seven. I hope that that is the right interpretation of what the noble Baroness said.

If that is the case, can the noble Baroness assure me—for, although this is due to come forward in regulations, I repeat, it will not be in the Bill—that it is the intention there will always be one outside non-contracting pharmacist who will have a vote in order to ensure that there will be a voting power of five on the committee? I should be glad to have that assurance because it is perhaps a slightly more acceptable proposition than what I had envisaged from my first reading of the amendment tabled by the noble Baroness.

I am still not at all sure that it would not be better to have a voting committee of seven, on the lines of Amendment No. 2A proposed by the noble Lord, Lord Ennals. After all, pharmacists who are not contractors but who are working in industry or in some other field of pharmacy are likely to have the interests of the profession at heart; indeed, they may well want to open a pharmacy themselves one day. Therefore, it would appear to me that the pharmaceutical profession would have an adequate input but with a voting body of seven on the committee, which I believe is preferable. I should very much like to have clarification on those points from the noble Baroness.

Lord Winstanley

My Lords, I do not wish to go over the ground so admirably covered by the noble Lord, Lord Ennals and my noble friend Lord Kilmarnock, but I should like to go a little further into the point briefly dealt with by the noble Baroness concerning the community health councils. The noble Baroness told the House that the precise composition of the subcommittees will be dealt with by regulation. One accepts that, but it is clear that in dealing with it by regulation the Government will have powers to take certain steps. The noble Baroness said that she felt it would be inappropriate to include on the subcommittee a nominee of the community health council for the district, as referred to in Amendment No. 2A because, as she rightly said, the community health councils are advisory bodies and therefore it would be wrong to place them in a position in which they had an executive function. But the amendment of the noble Baroness puts on the committee people who do precisely that. They are to have no vote and are not to take any part in the decisions but they are to give advice.

We should all like to know that the community health council would be consulted. I think many of us feel that while the views of pharmacists are important, the views of practising pharmacists in the particular area are important too. There are many factors which will have to be taken into consideration by the committees. I should have thought that the view of the community in the district should be paramount.

If we are to understand that the community health council will be free to give its advice—and of course we understand that—is it not utterly clear that the community health council would give its advice if it had a member on the sub-committee? Can the noble Baroness tell us whether in the regulations which will appear subsequently, dealing with the composition of the sub-committee, consideration will be given to some kind of representation of the customer, as it were? I can imagine no one better able to do that than the community health council.

With regard to the points dealt with by my noble friend and other noble Lords concerning votes and how many voices it will contain, and so on, from my knowledge of family practitioner matters and subcommittees it is my belief that in reality it will be very rare to find a case pushed to a vote in which there is an acute division within the sub-committee. I think that, after consultation and discussion of the local needs and a proper consideration of the various factors, in the vast majority of cases these committees will reach a unanimous decision and we shall not have a great deal of trouble with narrow votes. I personally should be a little more happy about the decisions that they will reach if I were satisfied that in the decision-taking process somewhere, if not in the final vote, there will be heard the voice of the consumer; that is, the patient or the person who will go to the pharmacist if the pharmacist is subsequently allowed.

Baroness Trumpington

My Lords, I should like to deal immediately with the last point made by the noble Lord, Lord Winstanley. First of all, the community health councils will be perfectly at liberty—and I hope that they will do so—to put an input into the family practitioner sub-committee on this subject before the sub-committee ever meets to consider the necessity or otherwise for a future pharmacy. There is no question that they do not have that role in an advisory capacity; but the other aspect of their role means that if they do not like the decision which the sub-committee has taken they can appeal against the sub-committee's decision. They cannot have it all ways. You really cannot also expect them to sit on a sub-committee against whose decision they may wish to appeal. It simply does not make sense. When he comes to consider that, I think that the noble Lord, Lord Winstanley, will see that my point has substance.

Let me go back to the points raised by the noble Lord, Lord Kilmarnock, and also—if I can read his mind—those probably in the mind of the noble.Lord, Lord Ennals. It would be very difficult to find three non-contractor pharmacists who are able and willing to sit on so many committees, with perhaps as many as 200 applications a year, not counting any possible appeals—though I must say that I hope the noble Lord, Lord Winstanley, is right in his hopes of there being few appeals and that it will be a matter of local common sense. For instance, community pharmacists—contractors—constitute two-thirds of the profession. In any case, it is not reasonable to expect that hospital or industrial pharmacists will be available on the scale implied in the amendment. It is important that local contractor pharmacists can advise on local pharmaceutical issues which they know better than hospital or industrial pharmacists. Therefore I feel that the Government have the best solution. I can assure your Lordships that we have consulted upon it and have worked very hard over it.

With regard to the vote from the non-contractor pharmacist, as I said originally, the Government's mind is open on this matter. Unless noble Lords take a different view, we shall be disposed to consider sympathetically the idea of allowing the non-contractor pharmacists to vote when we come to make the regulations as I said in my opening remarks.

8.45 p.m.

Lord Bruce-Gardyne

My Lords, I should like to intervene briefly to thank my noble friend Lady Trumpington for introducing Amendment No. 2B. I must say that it seems to me the balance of argument between Amendments Nos. 2A and 2B is really very fine. For my part, I should be entirely happy to take my noble friend's preference for Amendment No. 2B.

All I really want to say is that I personally very much appreciate the trouble that she has taken to meet the anxieties which were expressed in Committee and indeed on the corresponding Scottish legislation last year. I think that Amendment No. 2B certainly goes a very long way to relieve the anxieties that some of us expressed. I should like to apologise to my noble friend for giving her a certain amount of trouble and heartburn on this matter and to thank her very much for what in the end she has produced.

Lord Harris of High Cross

My Lords, I should like to join the noble Lord, Lord Bruce-Gardyne, in congratulating the noble Baroness, and to thank her for purging Clause 3 of one of its most obnoxious elements, which in my view invited pharmacist contractors to allow their commercial interests to override their professional principles. To that extent, I believe that the clause will be less objectionable.

Lord Ennals

My Lords, as I did at the beginning in moving Amendment No. 2A, I should again like to thank the noble Baroness for the amendment which she has tabled, and also now for the explanation that she has given. I agree with the noble Lord, Lord BruceGardyne, that one could argue one way or the other. I think the main point is that the noble Baroness has met the concern expressed at Committee stage that it would appear, and in fact could be the case, that people would be protecting their own commercial interests. Obviously I should like to read again carefully the explanation given by the noble Baroness in case there is some need to return for further clarification at a later stage in this Bill, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Baroness Serota)

My Lords, before calling Amendment No. 2B I should point out that there is an unnumbered amendment following Amendment No. 2B on page 3 of the Marshalled List. The amendment refers to page 6, line 42, and should be numbered 2C. It may also help to clarify matters if I point out that Amendments Nos. 2B, 2C, 3, 4 and 5 have been marshalled in the wrong order and will be called as follows: Amendments Nos. 2B, 3, 4 2C and 5.

Baroness Trumpington moved Amendment No. 2B:

Page 5, line 17, at end insert— ("(5) The regulations shall be so framed as to preclude—

1. (a) a person included in a list published under subsection (2)(a) above; and
2. (h) an employee of such a person;

from taking part in the decision whether an application such as is mentioned in subsection (2)(c) above should be granted or an appeal against such a decision brought by virtue of subsection (4) above should be allowed.").

[Amendment No. 3 not moved.]

Lord Harris of High Cross had given notice of his intention to move Amendment No. 4:

Page 6, line 20, at end insert— ("( ) for applications to which this subsection relates to be determined only by persons who are not specified upon any list under paragaph (a) hereof and by employees of such persons").

The noble Lord said: My Lords, Amendment No. 4 is paired with Amendment No. 2 and just refers to the amendment of the Scottish Act. Therefore it is not moved.

[Amendment No. 4 not moved.]

Baroness Trumpington moved Amendment No. 2C: Page 6, line 42, at end insert— ("(6) The regulations shall be so framed as to preclude—

1. (a) person included in a list published under subsection (3)(a) above; and
2. (b) an employee of such a person;

from taking part in the decision whether an application such as is mentioned in subsection (3)(c) above should be granted or an appeal against such a decision brought by virtue of subsection (5) above should be allowed.").

Lord Harris of High Cross moved Amendment No. 5: Page 6, line 45, at end, insert— ("(6) Notwithstanding the provisions of section 42 of the 1977 Act and subsection (2) of section 27 of the 1978 Act, it shall be lawful for registered pharmacists to provide from premises registered for the provision of pharmaceutical services drugs, medicines or appliances pursuant to prescriptions issued by medical and dental practitioners on payment by the Secretary of State for the drugs, medicines or appliances so provided but not by any person for the service of so providing them, whether or not such registered pharmacists carry on business pursuant to any entry on a list under those two sections, and the Secretary of State shall cause any necessary financial or other arrangements to be made to facilitate the implementation of this subsection.").

The noble Lord said: My Lords, in moving Amendment No. 5, which at first blush seems a little complicated, I should like to explain its effect as follows. The amendment will allow any qualified pharmacist to set up in approved premises to carry on business as a chemist and to dispense National Health Service prescriptions but to be reimbursed only for the drugs, medicines and appliances without claiming a professional fee.

The amendment would have considerable advantages for the NHS, the taxpayer and the customer. It would not discourage the new business ventures which the noble Lord, Lord Young, among others, wishes to spread. It would avoid the strictures of the Office of Fair Trading; it would diminish the bitterness between contractors over the blocking of new entrants; it would avoid litigation over possible wrongful exclusions of applications for new contracts; it would prevent leap-frogging; it would leave open the way for progressive developments in retailing; and at the same time it would save public funds and improve services to the consumer. What more can the noble Baroness ask?

The House must bear with me if I return to the source of much of our anguish over the Bill. The special feature of the pharmaceutical business is that prescription medicines are provided free for most of the population and at a nominal charge for the rest. Accordingly, the Government are responsible for establishing a complex, legal, bureaucratic and financial rigmarole to pay chemists for dispensing. That cannot be left to the uncluttered free market.

However, if the Government make the terms too attractive, they will have an excess of pharmacists competing for the available amount of NHS business; but if they make the terms too strict, they will not induce enough pharmacists to open shop; hence, the various forms of payment by way of basic practice allowance, essential small pharmacies, and doctors' dispensaries, and an on-cost which in my view perversely offers a higher payment to chemists dispensing fewer prescriptions.

Since my Unstarred Question in June last year I have argued that a more rational location of pharmacies could be brought about by relying on financial incentives and disincentives—as the PSNC was originally pledged to do. The amendment would be a large stride in that desirable direction.

It is plain that the present pattern of payment is not optimal; the number of NHS dispensers fell from approaching 15,000 some years ago to about 10,000, until last year when the number began rising by 200 a year. I believe that that was in anticipation of the restrictions threatened by the Bill.

Early this year, the Nuffield Report severely criticised the Bill inter alia on the following grounds: the ability which has been demonstrated over the past eight years to influence numbers through the price mechanism should be fully utilised: if the differentials as between different sizes of NHS contractors are not producing the desired results they should be adjusted. The more accurate the tuning of the differentials, the fewer the applications that will need to be considered by FPCs".

The amendment would have the effect of adjusting the inducements against excessive entry because new pharmacies would be reimbursed on a cost-plus basis for ingredients and handling only, without the professional fee which is almost 20 per cent. of the total cost and amounts to over £400 million in an annual bill to the NHS which now exceeds £2,000 million. There would be no more leap-frogging by small chemists struggling to get their share of lucrative prescription business, as the average pharmacist relies on dispensing for 73 per cent. of his income.

More enterprising chemists can develop their wider service of supplying chemists and related goods without being denied, as they are at present under Clause 3, the facility of offering their customers the essential convenience of dispensing NHS prescriptions.

The amendment would remove the Bill's most objectionable feature, which I have increasingly come to see as having been cooked up by an unrepresentative PSNC and non-responsible civil servants of the DHSS, operating in secret session and in strict defiance of their original brief.

I urge the Government to take this olive branch seriously. It would not only get them off the hook of instigating a restrictive practice which the Office of Fair Trading has said would not have been countenanced from private contractors, but also holds the promise of real savings.

I must reveal my doubts about the predicted economies on which the noble Baroness, Lady Trumpington, set such store in Committee. At col. 832 of Hansard, she produced some figures of hypothetical savings of tens of millions of pounds by checking the recent growth of pharmacies. Thus, it was argued, if their number was reduced by 200 a year, the NHS would save £50,000 on average from each one, making a total saving of some £10 million.

I have at least three reasons for declaring that calculation to be a nonsense. First, the recent faster increase in new pharmacies, which reverses the earlier decline, is almost certainly due to people coming in before the shutters are pulled down by the new restrictive sub-committees. The fear of growth and increased expenditure is largely a phantom. Secondly, the average cost of £50,000 per contract is meaningless. It appears to be based upon the annual total cost of £500 million for 10,000 pharmacies, which relates to dispensing fees which, in turn, relate to the number of prescriptions and not to the number of pharmacies that share them out.

Finally, if there were an increase in the number of pharmacies so that each, on average, dispensed fewer prescriptions, the additional expenditure for the NHS would arise only from the higher rate of on-cost which the present contract perversely gives to smaller dispensers. Based upon the realistic estimate that a new pharmacy may take less than half the NHS business form its nearest neighbour, the cost of a new entrant would be nearer £7,000—one-seventh of the £50,000 dreamt up by the Minister's advisers.

After much discussion and thought over some 16 months since my original Unstarred Question, I am completely persuaded that more could be done to achieve the Government's purpose through financial incentives and disincentives along the lines provided by the amendment. Although I have come close at times to describing the PSNC's proposals in Clause 3 as a pseudo-professional ramp, I am impressed by the probability that over the next few years it is more likely that we shall see a contraction than an increase in the number of local chemists, of which we already have fewer per thousand of the population than most comparable countries.

The Government are not only ending the basic practice allowance and offering compensation to small contractors to surrender their contracts; they are reducing the minimum number of prescriptions for eligibility to the essential small practice scheme from 24,000 to 16,000. The Government are easing out smaller chemists with their present proposals.

Apart from the inconvenience to sick people who will have to walk further to get their prescriptions made up, there is the loss of service, not least in advice and over-the-counter treatments which the Government and others wish to encourage.

As it stands, the Bill does nothing to arrest the consequent decline in service which will almost certainly be accompanied by a rise in costs of additional prescriptions. I believe that my amendment offers not merely the promise of savings but the certainty that any future extension of retail pharmacies will reduce the cost of the total drug bill to the NHS. In short, an improved service can be made available without the NHS having to underwrite a higher cost through subsidising inefficient pharmacies drawn into the business only by the present prospect of an unjustified subsidy. I believe that this amendment offers a more practical, positive, progressive and principled way towards improved pharmaceutical services for the community.

9 p.m.

Lord Kilmarnock

My Lords, as the noble Lord, Lord Harris of High Cross, has referred to a more rational location of pharmacies and also to essential small pharmacies, suggesting that the government plan may have the effect of easing some of them out. I should like to revert briefly to the Scottish dimension and in particular to essential small pharmacies in Scotland, a matter which vexed your Lordships and indeed aroused some indignation at Committee stage. First, I have to thank the noble Baroness for arranging with her noble friend Lord Glenarthur to write to me, as the noble Lord did. I should like to express my thanks in person to the noble Lord, too. He has, I believe, copied the same letter to a number of noble Lords, attaching a note explaining the current difference between the English and the Scottish schemes.

As the noble Baroness explained in Committee, there are significant differences and a separate set of negotiations likely to lead to separate conclusions. I understand this now, and I do not dispute it. I continue to dispute, however, the inequality of outcome north and south of the Border. There are details of importance relating to essential small pharmacies that the noble Lord, Lord Glenarthur, did not include in his note. As I understand the current situation, the Government put £45,000 into the scheme and the profession puts in another £45,000. The Government are planning to increase their contribution to £60,000, while the profession's contribution is going up to £120,000, making a total of £180,000 available for the scheme in Scotland. But in order to guarantee essential small pharmacies an equivalent remuneration to their English neighbours, a total of £270,000 would be required—that is to say, a shortfall of £90,000. This does not seem an enormous gap to bridge, particularly if the Government are interested in extending the scheme in rural and deprived urban areas.

I understand—and here perhaps the noble Lord or the noble Baroness will correct me—the stumbling block is the 10/85ths principle or rule applied by the Treasury, which limits to this fraction the proportion of funds available for Scotland in relation to those available for England and Wales. But this rigid proportion would not seem right and would not seem to apply in this field, as the number of essential small pharmacies in Scotland is 51 out of a total of 1,150 (equivalent to 4.4 per cent.), while the number in England is 200 out of 10,000, equal to only 2 per cent. of the total number of pharmacies. There is a much larger professional pool to fund essential small pharmacies in the rest of Great Britain than in Scotland. This means that the Scots need proportionately more help to fund their ESP scheme, which is relatively larger because of geographical factors.

The essential small pharmacy discrepancy at the moment is about £16,000 for Scotland as against £18,000 for England and Wales. I understand that the Scots can live with this. But under the new scheme the gap would widen to £16,000 against £23,000, which is much less tolerable, even though I understand that the shock/horror discrepancy of £12,000 to £23,000 raised in Committee would affect only one pharmacy in Scotland. Surely, as an earnest of their intention to secure a better spread of pharmacies, the Government should be prepared to waive the Treasury fraction for this relatively small sum of money and put a little more into the Scottish scheme as an incentive for the extension of the ESP scheme.

I gather that negotiations are continuing at present between the profession and the home and health department which I do not wish to prejudice. I should have thought, however, that if the Government were perpared to match the profession's £120,000 pound for pound with an equivalent £120,000—that is only £60,000 up on their current offer—it would be possible for the Scots to reward existing essential small pharmacies more fairly, if not quite up to the English and Welsh levels, and also to expand the scheme to allow for another 10 or 12 essential small pharmacies in Scotland.

If the noble Baroness or indeed the noble Lord—we are glad to have him with us for the debate—can give an undertaking along those lines, he will be going a long way towards allaying the disquiet of Scots. I speak as a London Scot and refer to genuine Scots from north of the Border. He will also go a long way to convincing the rest of us that the Government are serious in their desire for a better distribution of pharmacies all over the United Kingdom, which must otherwise remain a matter for doubt.

Lord Bruce-Gardyne

My Lords, if the noble Lord, Lord Kilmarnock, will forgive me, I should like to revert more precisely to the substance of the amendment moved by the noble Lord, Lord Harris of High Cross. It seems to me an amendment of considerable importance. Indeed, I would go so far as to say that it seems an extraordinarily positive and neat proposition. I was almost going to describe it as a divine amendment. But that would perhaps be going too far for my noble friend Lady Trumpington. I would certainly not go so far as to endorse all the arguments that the noble Lord, Lord Harris of High Cross, advanced in its favour. I thought that the noble Lord, if I may say so, was a little ungenerous to my noble friend and her department in the light of the very considerable efforts that they have made to meet us on this clause.

Nevertheless, it seems to me that as a proposition this amendment has everything to commend it. So far as I understand it, it offers the prospect of combining enhanced access and availability of dispensing chemists around the country with reduced cost to the National Health Service. If that can be achieved by means of a single amendment, I find it hard to believe that there can be convincing arguments against it. I shall listen with interest to my noble friend's response.

Lord Morton of Shuna

My Lords, as a home-based Scot, so to speak, rather than a London-based Scot, I associate myself wholly with the remarks of the noble Lord, Lord Kilmarnock. It seems to me intolerable that the support for pharmacies in Scotland should be at roughly half the rate of support for essential pharmacies in England.

Baroness Trumpington

My Lords, the noble Lord, Lord Harris, says that he is offering me an olive branch. I believe that the noble Lord is trying to offer me an apple. I resent greatly the derogatory remarks that he made at the beginning of his speech. If I may say so, the noble Lord, Lord Harris, is wrong to say that National Health Service pharmacy numbers fell until last year when they started to go up just because control of entry was imminent. Numbers of NHS pharmacies started to rise significantly from 1980 onwards.

The practical effect of this proposal would be that those pharmacies that could afford to operate on a cost reimbursement only basis would be exempt from the necessary or desirable test. Only big stores with multiple outlets, where pharmacy is a small proportion of a bigger enterprise, would be able to take advantage of this proposal. I am thinking of stores like Underwoods and Safeway's. The large multiples could afford to subsidise their pharmacies from the rest of their extensive operation. Even with no profit element available, they would be able through their marketing

strength and economies of scale to obtain discounts not available to the small pharmacist. Their subsequent increase in market share, through being exempt from the necessary or desirable test, would drive out the small pharmacist from the high streets.

Potential small pharmacies would see less opportunity to set up in business themselves except in the more unfashionable localities. This effect could in itself adversely affect progress to a better distribution of services. Extra money would have to be spent to ensure a service in unfashionable areas so that the old and sick received the service that they need.

I hope the noble Lord, Lord Harris of High Cross, will not mind my saying that he is not the first person to come up with this idea. Its effects have been considered by my department before. It is clear that its introduction would load the system in favour of the large multiples. The noble Lord was very keen at the Committee stage of this Bill to ensure that the vested interest of the pharmacy contractor had no part in the new arrangements. I am, therefore, a little surprised that he should now be advocating a proposal which would promote the vested interest of the large multiples.

I stand by our estimates of savings, although I emphasised in Committee that absolute precision is impossible. Because the number of prescriptions dispensed is set by doctors and is uninfluenced by the number of pharmacies, it must be the case that extra and unnecessary pharmacies push up national health costs. All extra fixed costs have to be met by the National Health Service. Since it is impossible for prescriptions to be dispensed without a pharmacist being present, and since it is rare for pharmacists to work on their own without dispensing assistants, the NHS has to meet a most significant proportion of the manning costs of extra and unnecessary pharmacies as well as their fixed costs.

Lord Bruce-Gardyne

My Lords, I apologise for interrupting my noble friend. I find it a little hard to follow this part of the argument. Surely the whole purpose of the amendment is that those fixed costs would not fall on the health service because the purveyor of the prescriptions would be limited to the reimbursement of the cost of the drugs. I also do not follow the proposition that the old and sick would suffer. Why should it he more disadvantageous to the old and the sick to be able to get their prescriptions at a multiple store where they may be doing other shopping rather than to make a separate visit to a small pharmacy in the same locality?

Baroness Trumpington

My Lords, to answer the last part of what my noble friend asks, it is very unlikely that large multiples will be interested in less fashionable sites such as rural areas or suburban housing estates. It is extremely important that those areas should be as well served as the areas where large multiples can and will take advantage of the system. The Government cannot support such a change. To develop a better pharmaceutical service, a better use of the pharmacist's skills and better value for money, we need to maintain a substantial contribution from the smaller pharmacy. In due course I shall ask the noble Lord. Lord Harris of High Cross, kindly to withdraw his amendment. With the leave of the House, I shall ask my noble friend Lord Glenarthur to reply to the noble Lord, Lord Kilmarnock, and others on the question of Scotland.

Lord Ennals

My Lords, for the sake of the record let me say that I cannot possibly support the amendment in the name of the noble Lord, Lord Harris of High Cross. I made it clear from the very beginning that on these Benches our concern was with the small pharmacist and the community pharmacist. The noble Baroness is absolutely right. I presume that the amendment would mean that Tesco or any other large store could set up a little pharmacy in the corner.

We seriously debated the Nuffield Report in this House. The amendment would run absolutely contrary to what it said—that we should seek to improve the quality of service provided by pharmacists to the people whom they served. I do not think that this can do anything other than damage the small pharmacist and perhaps reduce the real quality of service that a pharmacist gives, usually to clients he knows.

The Minister of State, Scottish Office (Lord Glenarthur)

My Lords, with the leave of the House perhaps I may respond briefly to the points raised by the noble Lords, Lord Kilmarnock and Lord Morton of Shuna, with the particular Scottish dimension. I think that it is important for your Lordships to understand that there is, and has been, historically a difference between the ways that these matters have been dealt with in Scotland and England. To equalise any one element of remuneration would have an adverse effect on the other elements. For example, the discount scale and the arrangements for dispensing by doctors—as there is no rural dispensing committee in Scotland—would probably require alterations, and some of those changes would be detrimental to Scottish pharmacists. Probably there would be no justification for continuing separate negotiations for Scotland. However, I can assure both noble Lords that such a change would not have the support of the Scottish pharmacists as a whole. Their representatives have indicated that they would bitterly oppose such a suggestion.

The Government are contributing the same proportional amount of support to the schemes on both sides of the Border. The moneys for the schemes are made up of the Government's contribution and an amount which pharmacists' negotiators agree can be diverted from the balance sheet for that purpose. The negotiations are not complete.

In order to achieve the objective of the agreement that no essential small pharmacies should be worse off, it is by no means certain that an increased contribution from the Government would be required. Under the existing Scottish essential small pharmacy scheme a pharmacy dispensing 1,300 prescriptions per month would receive remuneration which in total exceeds the English basic minimum guarantee of £22,000. Although the negotiations on a revised Scottish scheme to which the noble Lord, Lord Kilmarnock, referred, are not yet complete, we have—and I repeat this—guaranteed that essential small pharmacies will be at least no worse off. When the negotiations are complete it is possible that some will be better off than under the existing Scottish scheme or under the English system. Essentially we must await the outcome of the negotiations.

I return to what I said at the beginning. It really is not proper that we should consider the remuneration system in elements; we should consider it as a whole.

9.15 p.m.

Lord Kilmarnock

My Lords, with the leave of the House, may I ask the noble Lord before he sits down whether he would agree that it is very unlikely that Scottish pharmacists will oppose the Government raising their contribution just on this scheme from £60,000 to £120,000 without changing any of the other arrangements? Would the Minister agree with that?

Lord Glenarthur

My Lords, I am sure that if one arrangement is changed, in view of the fact that we are talking about a package of different subjects, it would be necessary for one to have an effect on all the others. However, I take the noble Lord's point.

Lord Harris of High Cross

My Lords, I must admit that I did not find the opposition of the noble Baroness to my amendment completely persuasive. I think there has been throughout these long discussions some element of uncertainty or conflict in the mind of the DHSS about whether they want a larger number of pharmacies or whether they want to reduce the number of pharmacies in order to reduce the costs to the NHS. I mentioned earlier that the new proposals in a variety of ways will in effect squeeze out a number of smaller pharmacies, by the removal of the basic practice allowance, by compensation for small chemists surrendering their contract and by reducing the number of prescriptions for eligibility for the essential small pharmacy scheme.

The Government are in some difficulty in that they said earlier that of course they would use incentives if incentives could be adjusted to bring about the location that they wish. I discovered that under the present arrangement there are some 3,000 pharmacies that are eligible for the essential small pharmacy scheme; that is, they are pharmacies which dispense fewer than 24,000 prescriptions but more than 6,000 prescriptions per year and are more than two kilometres from the next pharmacist as the crow flies. If the Government wish to load the balance in favour of small pharmacies, they do not have to block out these dreadful large and enterprising chains which cause so much consternation; they merely have to adjust the terms to ensure that more essential small pharmacy payments are made in areas where it is desirable to ensure that a small pharmacy exists.

I have been chastised, perhaps not wholly without some justification, for some rather high-spirited remarks about the PSNC and periodic activities of the civil servants in the DHSS. Very well; I shall try to do better next time. However, meanwhile I must raise a note of objection about the standard "snideries" that are uttered against what are called the large multiples.

We know that Boots has been established for a long time. Boots performs a remarkable service in all kinds of ways and it relies for only 14 per cent. of its turnover on NHS business. It does a damned sight more for the NHS than the NHS does for Boots. Underwoods has, I dare say, the added handicap of having recently forced itself into activity and a presence in the High Street, but it relies for only 4 per cent. of its turnover on the NHS. The idea that those chains are in some way raiding the national purse seems to me to be misplaced and in some ways objectionable.

I do not believe that by allowing new pharmacies to establish their enterprises in the High Street and to offer to serve their customers by dispensing NHS prescriptions on the basis of reimbursement of costs only, can be doing anything other than a service to their customers and to the NHS.

I believe that the merits of this constructive proposal are so outstanding that they will improve with further consideration. I shall leave the matter to fructify in what has proved to be the open mind of the noble Baroness, Lady Trumpington, and I shall pursue my reforming ambitions in private and with some persistence. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 [Remuneration of persons providing general medical services etc.]:

Lord Cullen of Ashbourne moved Amendment No. 6: Page 7, line 22, 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: My Lords, I moved this amendment during the Committee stage and withdrew it saying that I would return to it on Report. My noble friend Lady Trumpington then kindly wrote to me a most helpful letter, which was followed by an informative conversation with her department. I am encouraged by what I have been told and I am moving the amendment again this evening to give my noble friend an opportunity to tell the House what I have been privately told.

Much of my concern about the lack of definition of the term "different information" has been reduced by two factors. First, negotiations betweeen the department and opticians will in future be carried out on an annual as opposed to a four-yearly basis. Secondly, now that the voucher system is operating—and I understand operating smoothly—there will in future be no dispensing fees to be considered and it will just be a matter of agreeing suitable sight test fees.

However, I still say that I do not like to have in a Bill such a wide expression as "different information" undefined. It may not matter in this case, but I should not like to think that it could be used as a precedent in future legislation. That is all I wish to say. I would just ask my noble friend to be good enough to confirm my understanding of her letter to me and my conversation with her department. I beg to move.

Baroness Trumpington

My Lords, I am glad to answer my noble friend Lord Cullen. As I said in Committee, such an amendment would open the way for more arguments and would prove to be too restrictive. I can see the arguments that would take place on whether or not information was, or could have been, available to the determining authority at the time of the earlier determination. There could also be occasions when both the determining authority and the profession wished to use information previously disregarded if better information was not forthcoming.

The provision needs to be widely drawn to accommodate the complexities and differences of the remuneration systems of all four contractor professions, and to ensure that the outcome is fair both to the particular profession and to the taxpayer.

I know that the opticians are concerned that the provision of "different information" could create uncertainty for them if they had to regard any determination of the sight-test fee as provisional. However, the department is well advanced in its negotiations with the opticians' representatives on new arrangements for cost inquiries. This will bring greater certainty and stability to their remuneration system.

The intention is to have inquiries annually, rather than every four or five years as in the past. This will mean that their actual costs will be reflected in their fees much sooner and so minimise the size and period of any adjustment. It is also intended that the conventions for collecting and processing the cost information should be negotiated in advance with the opticians. Thus both sides will be fully aware of the basis on which the sight test fee is to be determined.

These arrangements should ensure that, with the profession's co-operation, it would be exceptional for the fee to be adjusted in respect of a period more than two years back. This qualification is necessary as unforeseen difficulties can arise with any new arrangement. Thus, we are making substantial progress to improve the opticians' remuneration system to the benefit of the profession and the taxpayer. I hope these words will reassure my noble friend.

Lord Cullen of Ashbourne

My Lords, I am grateful to my noble friend for what she has said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 7: Page 7, line 40, at end insert— ("( ) Subsections (1) to (4) above shall have no effect in relation to anything done or omitted before their commencement").

The noble Lord said: My Lords, I, too, have had a most encouraging letter from my noble friend the Minister following what I had to say at Cols. 894 and 895 at Committee stage in expressing my concern at the unfairness of the way in which the calculations related to overpayments. My noble friend has taken my point, as I see it in the letter, and I had occasion to write to her to emphasise it. I hope that perhaps she will also say some encouraging words to your Lordships to make it public at this stage. I beg to move.

Baroness Trumpington

In reply to my noble friend, I hope he will apreciate that I am using the plainest of plain words.

This amendment would prevent the Government from taking into account any overpayment, which has or will occur before this Bill's enactment. My noble friend Lord Mottistone moved the same amendment at Committee stage. He voiced his concern about the position of the opticians with particular reference to the outstanding sight-test fee overpayment. I replied by saying that the amendment was unacceptable to the Government because it would fail to safeguard the taxpayers' interests. It would allow the professions to continue to receive the benefit of past underpayments, but it would deprive taxpayers of recompense for past overpayments up to and including determinations for 1986–87.

However, I know that the opticians are concerned about the implications of Clause 4 for the estimated overpayment of some £15 million since 1983. Given the very large sum involved and the numbers available from whom to effect recovery, the Government wish to assure the opticians that they will not seek to reclaim any of the overpayment arising from the period before 1st January 1985. This will allow the recovery of the remaining overpayment to be achieved over a reasonable period. In doing so, we will take into account the position of those opticians who joined or left the contract since the beginning of the period of overpayment. This will mean that as far as is possible only the fees of those opticians who benefited from the overpayment will be adjusted. Limiting recovery to 1st January 1985 will help considerably in achieving a fair recovery of arrears. I hope that my noble friend agrees that this assurance clearly demonstrates that the Government are fully committed to treating the profession fairly and reasonably on remuneration issues.

9.30 p.m.

Lord Ennals

My Lords, it will be recalled, even if only by me, that in the debate that we had at Committee stage I was involved in the discussion on retrospective payments and expressed some concern about the situation. My amendment was taken as one of a group—to which I have no objection. I was delighted to receive also a copy of these lovely little missives that have been distributed so freely around your Lordships' House. I want to say that I was delighted to receive it and delighted at the news that it gave. I think it will be very reassuring to the opticians that they will not be expected to pay for any ups and downs—or, rather, downs or ups; I cannot think which it will be—beyond the period of 1st January 1985. I welcome the decision taken by the noble Baroness. I think this is the third occasion on which in this Bill she has clearly reacted to the expressed views in your Lordships' House.

Lord Mottistone

My Lords, I thank my noble friend and I thank the noble Lord, Lord Ennals, for his contribution. I thank her particularly for the assurance that it is not intended to reclaim any overpayments made prior to 1st January 1985. That is most welcome, especially as the profession's negotiators have not formally expressed a view about the level of overpayments to be claimed by the DHSS. Also, I welcome the assurance by my noble friend in her letter and in her statement that it is not intended to recover moneys from those who have not benefited; that is, new entrants and retired practitioners.

I am slightly worried (because the letter and my noble friend's statement did not specifically say so) that the arithmetic about which I had occasion to write to her in my letter, which showed that it was possible for those who were still in practice to bear a share of what would have been claimed from those out of practice, might filter through. I am not saying that I want a further assurance from my noble friend at this stage, but I am saying that I want it for the record that every effort will be made by her department to see that there is no unfairness in claiming some sums from those in practice in order in theory to get a few pence extra for the taxpayer. It is only pence to the taxpayer but, as I pointed out to my noble friend, it is hundreds of pounds to the practitioners, or could be.

The profession's Whitley negotiators agreed with my noble friend that the new annual review of fees should avoid any significant overpayments or underpayments in the future. My noble friend's letter and her statement go a long way to reassure the profession. I trust that the troubles that have occurred during the past 12 months or so over quite large sums of money and quite a lot of thinking on some sides that some people have been very unfair to others—and the courts have had to be involved; it really has been a nasty story—will all be at an end with the attitude which it now seems to me that my noble friend and her department are taking. I hope very much that this will be the picture for the future.

In conclusion I thank my noble friend not only for what she has done by letter to me but for what she seems to have done throughout this debate. In earlier amendments she has gone a long way towards meeting what noble Lords said at the Committee stage. I think she has done a first-class job and I just hope that her department keeps it up when in the distant future she goes on to be something much grander. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 8 [Short title, etc. ]:

Baroness Trumpington moved Amendment No. 8: Page 10, line 1, leave out ("Section 1") and insert ("Sections 1 and 2").

The noble Baroness said: My Lords, Clause 8(4) of the Bill provides for the removal of Crown immunity under food legislation to take effect three months after the Act is passed. The Government want the same commencement provision in respect of the removal of Crown immunity under health and safety legislation. We therefore propose amending the subsection to refer both to Clause 1 and Clause 2. I hope that your Lordships agree. I beg to move.