NHS and Private Enterprise

HL Deb 21 January 1987 vol 483 cc932-67

3.4 p.m.

Lord Bottomley rose to call attention to the effect of private enterprise on the National Health Service; and to move for Papers.

The noble Lord said: My Lords, I rise to propose the Motion standing in my name on the Order Paper. It was my privilege to be a member of the post-war Labour Government which passed the Act of Parliament creating the National Health Service. I was then Member of Parliament for Rochester and Chatham. Dame Sybil Thorndike was a strong supporter of mine. She was a Freeman of the City of Rochester and came to speak during one or two general elections. On one occasion there was a memorable meeting at the Corn Exchange in Rochester. In a very emotional speech she told how her father—who was a local clergyman—used to send her to meet friends and ask for bed linen to be cut up and used as bandages in the local hospital. She also mentioned on that occasion that she had started her stage career in that hall. She performed as a pupil of the Rochester High School for Girls. It was therefore not to be wondered that on that occasion she aroused the emotions of a large congregation.

Things have changed considerably since then. We have no longer to depend upon private charity to make provision for supplies to the hospital. We have all cherished the high standards ever since they were laid down by the National Government in 1944. The White Paper at the time said that it was intended to establish a comprehensive service for everyone in the country. The Government wished to ensure that every man, woman and child could rely on receiving all the service, treatment and cure they needed—the best medical advice and facilities available. Receiving these services should not depend upon whether they could pay for them. The aim was that the country's full resources should contribute to reducing illness and promoting good health in all its citizens.

Since that time, successive governments have accepted this statement of policy. For ideological reasons, the present Government have failed to live up to the requirements. There are many agencies, consultants and firms who seek ways of making money out of the National Health Service and are encouraged to do so by the Government as a part of their ideological battle against the National Health Service.

The Government's policy is not based on any evidence that privatisation will produce real savings or an improvement in the standard of the service. In fact, there is an increasing amount of evidence to the contrary. Work has been allocated to private contractors at a cost to the National Health Service greater than that which would have been the cost of direct labour. Many private contractors have failed dismally to maintain reasonable standards set out in the original tenders. This has caused difficulties and frustrations for National Health Service employees, the administrators, the medical staff and the nurses. Health authorities have been compelled to terminate the work of private contractors, leaving National Health Service employees to clear up the mess. Properly trained and experienced staff are as a result leaving the health service.

In the meantime the Government's privatisation policy continues. The Government seek to abolish all public enterprise. Privatisation does not apply only to manual workers, but includes architects, surveyors, engineers, clerical workers and professional services. There are plans to privatise the ambulance service which is in the front line of the National Health Service. In some areas there are attempts to do this. One company, energetically engaged in these activities, is encouraging health authorities to co-operate. The last thing a person involved in an accident wants is to be treated by someone who is unskilled. That is likely if profit is put before service.

There is enough evidence accumulating to show that private enterprise is having a disastrous effect on the National Health Service. My own union, the National Union of Public Employees, has produced a document showing the failures of private enterprise. The document cites some of the expensive retendering when contractors withdraw, additional payments in order to improve standards and labour-intensive monitoring of services when contractors run into difficulties.

Among many examples was that of a private contractor in Birmingham who pulled out of a catering contract at the city's Queen Elizabeth Hospital after the health authority refused to pay an extra £120,000 a year. Meals were served on dirty crockery and cutlery and the contractors were eventually removed from the regional health authority's list. At Addenbrookes Hospital in Cambridge, the domestic cleaning contract has risen in price by more than £250,000, which now makes it £197,000 more expensive than the quotation from the hospital's own cleaners.

At Westminster Hospital, the standards of service have fallen since a private contractor took over the cleaning services this year. The chairman and vice-chairman of the community health council paid a visit to the maternity ward where they found a shower with tray and tile surrounds thick with built-up dirt and the showerhead virtually blocked up by scale. The sinks and draining boards in two ward kitchens were in a disgusting state, encrusted with long-term dirt and grease. In the treatment room where sterile dressings and equipment were stored, the sink and draining boards were filthy, with dust on many shelves.

The South Cumbria health authority had to complain to a private contractor about linen being delivered damp and clothing belonging to patients being lost. The local health authority has been concerned about consistently poor cleaning standards and unacceptable work practices by contractors at Park Side Hospital in Macclesfield.

National health authorities have ended their contract with a private company whose cleaning services were not up to standard at Queen Mary's Hospital, Roehampton. Cleanliness is essential to protect patients with wounds against infection. The contract is now going out to tender in May and it is very pleasing to know that the hospital's own staff are being asked to tender to perform that service.

The Prime Minister has been anxious to speed up the process of putting the catering, laundry and linen services in the National Health Service out to private contract. It appears that because of this one of her junior Ministers, Ray Whitney, lost his job in the recent government changes. Private contractors are recruiting nurses trained in the National Health Service at public expense. Private medicine concentrates on non-urgent cases, leaving the National Health Service to deal with emergencies. When the Prime Minister went into a private hospital in Berkshire to have her eye operation, staff had to call on the local hospital in Windsor for help.

The Comptroller and Auditor General, Sir Gordon Downey, in his recent report, said that private patients were getting major surgery on the cheap from the National Health Service. Commenting on this report, the then Minister in the department said that private patients brought extra valuable resources to the health service. He said that the consultative paper was concerned not so much with the principle of charging, to which the Government remain committed, but with the system for determining those charges. Private patients might not be paying the full cost of major operations in many National Health Service hospitals. It is altogether wrong that National Health Service patients are being deprived of treatment because of the under-charging of private patients.

At the time of the disaster in Brighton, the Minister of Health, the chairman of the Conservative Party and the Prime Minister sang the praises of the National Health Service and the other services concerned. In the next breath they are telling these hardworking, dedicated people that they are going to put out their work to private contractors in order that those contractors can make a profit out of a public service. Some members of the medical profession, who see themselves more as financial entrepreneurs than medical consultants, assist the Government's privatisation policy by encouraging the growth of private hospitals and private medicine. They shamelessly exploit National Health Service equipment and services. To engage private contractors who are not part of the public service and who have no commitments to it is to undermine the whole concept of public service itself.

There is a proposal that private hospitals should help to cut long waiting lists at National Health Service hospitals by offering "bargain basement rates", as one Government spokesman put it. What they really desire is to fill empty beds in private hospitals. The way to reduce waiting lists is to get National Health consultants, some of whom spend much of their time moonlighting in private hospitals, back to the National Health Service.

At one time we could boast that we had the best health service in the world. That is no longer true. A recent report by the Office of Health Economics shows that Britain spends less per head on health care than any nation in Western Europe except Italy and Ireland. It was no surprise to me when Professor John Davies resigned as chairman of the Cambridge health authority. He protested against the Government's policy, and concluded the letter which he sent with the words: If we are not prepared to pay the economic price for acting morally, we may end up paying the moral price for acting economically.". That is something we should all take to heart. We have to ask ourselves whether the privatisation of the National Health Service serves the public well or not. My Lords, I beg to move for Papers.

3.20 p.m.

Lord Colwyn

My Lords, I am sure that we are all grateful to the noble Lord, Lord Bottomley, on two counts this afternoon: first, for initiating our debate; and, secondly, for his long interest in the National Health Service. I listened to his speech with interest and can only apologise that, owing to the diverse nature of the title of our debate, I intend to take the opportunity this afternoon to say a few words about the relationship between the National Health Service and my own—and indeed the noble Baroness, Lady Gardner's—free enterprise profession, dental surgery.

I hope that my noble friend the Minister will be able to tell me later that there were inaccuracies in many of the noble Lord's opening remarks. The Government have just completed what I am sure we would all regard as a valuable exercise—the first full review of primary health care services since the start of the National Health Service in 1948.

The Green Paper debate has focused on the family practitioner services—the front line health care providers in the NHS—family doctors, dentists, pharmacists and opticians. These are independent contractor professions working under contract within the NHS but managing their own work and representing, it seems to me, a very significant private enterprise element in the NHS.

There are some contractual differences between the four groups, but fundamentally they are making their own decisions—including financial decisions about equipment, investment, staff and so on—without the interference of a great bureacratic hierarchy above. They are the people on the ground who can see what their patients need and can offer it, if they can find the money.

The general medical practitioner might decide to set up a screening programme for, say, hypertension; or the dentist might decide to set up a preventive unit to help with health education work with children; or they might install computers to help keep track of follow-up units, or run patient recalls for dental check-ups. This is private enterprise within the NHS benefiting patients, giving taxpayers value for money, and giving the doctors and dentists concerned a high degree of professional autonomy and therefore job satisfaction. It is an arrangement which I hope we can all appreciate and encourage.

The private sector of health care can also stimulate the National Health Service. I hope that we can ignore the doctrinal arguments about the NHS. It seems to me that there is very wide support for the service and that we should not waste time on the private versus NHS argument. We need both. And the private sector, by moving faster and showing the public what can be done, can often stimulate the National Health Service to improve.

Sometimes the lead is a technical and clinical one. This has tended to happen in my own profession of dentistry where new methods and materials are often used first in the private sector, while the NHS is cautious about approving them for general use. I must draw attention to preventive dentistry too, and the very limited opportunities to practise preventively in the NHS general dental service practice.

But the stimulus can also apply to simple things like the manner in which patients are treated. I was much taken with a comment from Rudolf Klein recently: The legacy of 1948 lingers on in bureaucratic lethargy and professional rigidity. What the NHS all too often lacks is plain good manners towards those who use it, perhaps one reason for the growth of the private sector. The last factor that I wish to consider this afternoon is the cost of private health care, particularly the cost of primary health care, including dental treatment. If patients are helped to cover private health care costs through some sort of insurance or prepayment scheme, then the take-up of private treatment will grow, and this must help relieve the pressure on the NHS.

I am sure that we should all regret a rush into the private sector out of desperation and dissatisfaction with the NHS. But many people feel that health care is a top priority and is something they would like to spend more money on. Growth in the private sector in that circumstance is a proper response to patient choice. I should like to see more help for people to make that choice in dental care through new third party funding schemes.

The expansion of provident association membership was responsible for the growth of the private sector in acute medicine. I should like to see the same sort of opportunities growing up in dentistry and in all primary health care. As I said at the beginning, I believe that the family practitioner services of the NHS are very great merits, but they could still benefit from competition. The development of competition in primary health care will depend on funding arrangements to help people spread the cost of services.

My noble friend the Minister made it quite clear to me yesterday that she did not wish me to say anything about my involvement and interest in the many alternative and complementary therapies that I feel are a vital area of free enterprise that will eventually play a major role in the continued health of the nation. I am aware of her sympathetic views on this subject, and I look forward to being able to discuss its relevance at some time in the near future.

3.26 p.m.

Lord Winstanley

My Lords, the noble Lord, Lord Bottomley, introduced this important debate with a sincere, honest and moving speech on matters about which he rightly feels strongly. I hope that the noble Lord will forgive me if I say that he focused his remarks somewhat narrowly in relation to the actual wording of his Motion, and I hope he will forgive me if I spread to other aspects of the influence and effects of the private sector or private enterprise on the National Health Service. Towards that end I shall divide my speech, like Gaul, into three parts; and allowing for these preliminaries that would appear, with eight minutes, to allow me about two and a half minutes for each part. I say without hesitation that if any part exceeds its two and a half minutes I shall take that out of the next part rather than out of the time of the next noble Lord.

In the first part I should like to say a few words about private medical practice, whether that medical practice be in or out of the hospitals. On these Benches we believe that it would be impossible, even were it desirable (and we are not convinced it is) to abolish private medical practice by statute. Therefore taking that view, we believe it is right that private medical practice in and out of hospitals should be allowed to continue, but that does not mean that we may not entertain the hope that perhaps the need for private practice will diminish as the standards of the National Health Service rise.

To what extent does the private sector of private medical practice take away resources from the National Health Service? The plain fact is that the total resources, private and NHS added together, are quite inadequate at the moment to deal with the total workload. To the extent that the private sector adds new resources, then to that extent it is undoubtedly helping.

It also helps in another way. I think the private sector helps not only by adding extra resources here and there but by setting standards of ideal medicine at which the National Health Service must clearly aim. Therefore I think that the existence of a small private sector—which I hope will never get too large—aiming to practise ideal medicine on anybody who goes to it is an important monitor of the standards of the National Health Service. To my mind, if we see areas in which the demand for private practice goes up then we should look immediately at the National Health Service, where we shall possibly find that its standards are diminishing and need attention.

There is an important way in which the private sector of medical practice hinders the National Health Service and it is this. In so far as the private sector removes from the National Health Service the articulate and influential patients who are the very patients who would insist on the maintenance of high standards in the National Health Service, that can be damaging to the National Health Service in the end. That is a reason why we have to look from time to time at the size of the private sector lest, by taking away the influential and articulate patients, it should allow the standards of the National Health Service to diminish more than they would perhaps otherwise do.

As my two and a half minutes are up on that section I shall carry on by saying that I see a hopeful development on the horizon. When the private sector was set up in the very early days with BUPA and the rest, to which my noble friend Lord Wigoder will refer in more detail, they aimed to provide ideal medicine for their members. The members were a very small number of rich and healthy people. It is possible to provide ideal medicine for a small number of healthy and rich people, but as the private sector has expanded and some of the insurance schemes have taken on whole companies and all their employees or whole trade unions and all their members, the private sector suddenly finds that it is meeting the very problems with which the National Health Service is faced.

The National Health Service has a duty to try to provide ideal medicine for every man, woman and child, rich or poor, old or young, and it cannot do it. It is impossible to have a total unlimited commitment of that kind. Therefore, it is possible that now the private sector is finding the same difficulties as the National Health Service. That may be making some people aware of the kind of difficulties, some of them insoluble, with which the National Health Service is faced. Some of the people becoming aware are those who would otherwise not be aware. I have exceeded my two and a half minutes on that part so the next section will be very short.

On privatised services, such as catering and cleaning, I have no objection provided they are better for the patients. What matters is the end result. The one thing I believe, and we all believe on these Benches, is that the decision must be local and not a central one. We do not like the increasing tendency for the concentration of power centrally in the National Health Service. We have the Minister now as chairman of the National Health Service Management Board. This is a matter for the regions. If the people in Penzance want private catering services, so be it, so long as the people who represent them in the region decide. But I do not want decisions of that kind taken centrally at the Elephant and Castle.

I move finally to one other area, and my last part will be quite short—that is, to a very important aspect of health in general, the pharmaceutical industry. The developments in the pharmaceutical industry have revolutionised and totally changed the health prospects of many people alive today. Most of those discoveries and developments have come from a private enterprise pharmaceutical industry. I say to those who are in favour of a nationalised pharmaceutical industry that the Soviet Union—which has produced very distinguished surgeons and physicians and has made great strides in medical research in all sorts of fields—with its wholly nationalised pharmaceutical industry, has not yet produced a single new therapeutic substance of any real value. That is a fact we must all recognise. The real advances in the new discoveries of new drugs have come from a private enterprise pharmaceutical industry and not from a nationalised pharmaceutical industry.

That does not mean that we think everything is happy and well in the pharmaceutical industry: it is not. There are perhaps many controls needed and many things that have to be looked at to provide better and more precise competition. But the general principle is the same.

I finish by saying that anything which helps the National Health Service must be accepted, but the aim must be to recognise that modern medicine is now so complex, so intricate and so very expensive that it is utterly impossible ever to expect the individual to be able to pay the cost of his health treatment or diagnosis himself. That cost must be spread throughout life on a taxation or an insurance basis. How that is done is another matter, but let us not worry too much; let us focus our attention on the National Health Service where our attention should really rest.

3.36 p.m.

Lord Smith

My Lords, when I was appointed a consultant at St. George's Hospital, Hyde Park Corner, it was two years before the NHS began, so I have lived all my professional life from the beginning hand in hand with the NHS. But I feel, as nearly all doctors feel, that the NHS is afflicted by a sickness which provides, in medical terms, less and less for patients year by year. I hope your Lordships will forgive me, but when there is something amiss with the health of a patient, the doctor studies the patient's history for the cause of the illness, the present situation and the prognosis—the future—because these may be very relevant to the treatment.

I hope your Lordships will be very patient with me while I deal briefly with the cause of the trouble. It is produced directly by enthusiastic doctors and research workers. The last 40 years have seen a scientific explosion on every front, and medicine has not lagged behind. The phenomenal advance in scientific knowledge and technical skill has improved the success rate in almost all diseases, but these spectacular improvements in treating patients are very nearly all much more expensive than the previous treatment.

Let us consider enormous advances in diagnostic aids which make the 1986 scanner, costing very nearly £500,000, out of date in 1987. I ask your Lordships to compare the cost of treatment of one common ailment among very many in 1948 and in 1987. In 1948 a patient with angina pectoris was treated with a bottle of vaso-dilator tablets and physical rest, at the cost of a few shillings a week. A patient with angina pectoris today receives a number of very sophisticated and very expensive tests and perhaps a cardiac operation, with all that implies. The difference in cost in that one instance between a few shillings and thousands of pounds is staggering. The cause of the trouble is chiefly the lack of money to pay for medical advances.

I was elected president of the Royal College of Surgeons in 1973. I served as president for 4 years, but 1975 was troubled by a fierce disagreement between the medical profession and the Secretary of State for Health. I am sure I do not need to refer to the pay bed dispute, but naturally it was vitally concerned with the treatment of patients in the NHS. The conference of presidents of all the medical royal colleges in the United Kingdom of which I was chairman, was particularly worried by two things. One was: were we to have industrial action in medicine, on which the conference stated firmly it could not support any action that could harm patients. But the other consideration was the gap in treatment between what the profession could do and what the National Health Service could afford. It seemed to me that private practice and private enterprise must support the NHS and not be evicted from it, or the health service must markedly deteriorate.

I said at the college 10 years ago that before 10 years passed the country in its original medical sense would not be able to afford the NHS. In its original medical sense this is true because we cannot afford all things for all people. The gap has widened sufficiently, the acceleration of scientific knowledge has increased to such a level that if we increased the grant from the Exchequer to a spectacular level and advanced it by 8 per cent. or 9 per cent., the medical world would say "Thank you very much" and ask for more.

A decade ago when Parliament debated private practice and the health service I believe that it should have concentrated upon how private practice could and should support the health service. Instead of this I believe a catastrophe occurred. Private practice was partially evicted from the health service hospitals. This enforced separation between private and health service practice gave a fillip to private practice and accentuated the difficulties with which the health service was competing.

I believe the health service cannot properly survive without reversing this process. Private enterprise should be encouraged to fund private wards in national health hospitals with no restriction on the admission of NHS patients to them. Private enterprise should be encouraged to provide consulting rooms in national health hospitals, with the rent going to the NHS. This would have the added advantage of keeping the consultant in his national health hospital where he would be of maximum use to his NHS patients.

Of course I am aware that theory and practice are not always the same thing. I am also aware that nothing is past like a past president. Nevertheless, my view is supported by many doctors who would rather see private enterprise exposed to persuasion than a health service which rapidly deteriorates, not the least among these doctors being the last PRCS and chairman of the Conference of Presidents of the Royal Colleges; so am not alone. I implore the DHSS to call a conference with the BMA and particularly the Conference of Presidents of the Royal Colleges to work out a plan for the support of the NHS by private enterprise.

My final point is a brief comment about the acrimony which some show to those who hold a different point of view. Let us concentrate upon a single thought: the provision of the best treatment possible for all patients, whether they be national health patients or private patients. Let us beware of subsiding into a state of internecine warfare which leads inevitably to two standards of medical care in this country.

3.42 p.m.

Lord Wells-Pestell

My Lords, it is over 50 years since I attended my first meeting to consider the possibility of setting up a National Health Service. I am glad we are having this debate this afternoon, though to some extent it will not serve the purpose that my noble friend hoped because too many of us are taking part in too short a debate. We should have had many more people taking part in it, and it ought to have been for an unlimited time because we shall not be able to express all the salient points.

I believe the legislation setting up the National Health Service to be one of the finest, if not the finest, pieces of legislation that this country has had this century. It is true that the NHS leaves much to be desired at the present moment because it is far from able to meet the demands of the numbers of people who require its services. I have nothing against the private sector. I live in a democracy, as we all do, and in a democracy we should try to meet the needs of all people in that democracy provided those needs are genuine, worthwhile, and not antisocial. But we are seeing an ever-increasing private service tending more and more people at far greater fees than people visualised, and at the same time watching the National Health Service in a sense falling short of its required standards.

I am looking at an article in The Times of 18th October, which says: Sir Raymond Hoffenberg, president of the Royal College of Physicians, said yesterday: 'Many consultants combining National Health Service and private practice could command salaries of up to £250,000 a year'. I do not think the man has yet been born who is worth £250,000 a year. If this is the sort of thing that is going to happen, I think we must have a very real look at the private sector because it is obviously going to detract from the public sector.

I have found it impossible to discover the exact number of consultants in the private sector. I do not know whether my friend Lord Wigoder will be able to provide the answer. What I have been able to find out is that there are 16,246 consultants in this country, of whom 8,264 are in full-time employment within the National Health Service. That is roughly half. But I cannot find out where the others are. If the Minister can do that, I should be most grateful because I think one should know where they are.

It is true that most of the 8,264 who are whole time in the National Health Service are in fact not barred from working in private practice provided the period is set up in their contract. I think, too, that when we come to consider the private sector we need to bear in mind that a very high percentage of doctors—as I say, I do not know how many doctors there are in the private sector—will probably have cost the ordinary taxpayer in this country something like £100,000 for their medical training. Following the recent inquiry I made, I was told that it costs £100,000 to be trained as a doctor in this country.

What I should like to ask the Minister to do when she comes to reply—and I think she has the most difficult job on the Government Front Bench, regardless of anybody else who sits there; it is a very diffcult subject indeed and it is one which raises its head once or twice a week, so my sympathies are always with her, I having been in that position myself on one occasion—is to move away from saying that the Government have increased this expenditure by 5 per cent. or that expenditure by 7 per cent. and let us know exactly what the position is. As I understand it, the position is very serious from the point of view of people awaiting operations and treatment and waiting to go into hospital.

The director of nursing and in-patient services at Charing Cross Hospital stated recently that the hospital had 149 vacancies for nurses out of an establishment of 670. In Oxfordshire, where I live, it was reported this week that the health authority is short of over 700 nurses. That is not the only region where there is a shortage. In the same local paper it was reported this week that an elderly woman hospital inpatient was raped, and that hospital was short of nurses to the extent of something like 100. We cannot go on allowing extreme skill and expertise as one finds it working in the private sector—able to see anybody who needs help, able to take in anybody who needs a bed—while thousands of men and women are not in a position to get treatment either at home or, for that matter, in hospital.

In Oxford only this week there was a report concerning the Nuffield Orthopaedic Centre which said: Over the next five years the gap between provision and demand to the point where either the service for the elderly will break down or there will be a curtailment of provision for the young, middle-aged and those in need of provision. Neither alternative is acceptable and yet within the present staffing level and financial allocation the Nuffield Orthopaedic Centre cannot meet the problem. This is a story that one hears all over the country. It is not something new: it is happening everywhere. Hospitals are being closed, waiting lists are being increased to a tremendous figure and elderly people have more or less given up ever being able to live without pain, for the simple reason that although the facilities are there the beds are not there and the doctors are not there. If I were to make a suggestion it would be that the two sides should get together—the public side and the private side—and there should be some restriction placed on the private side until our National Health Service hospitals are able to build up a stronger medical staff and far better services than they are able to offer at the present moment.

3.51 p.m.

Baroness Gardner of Parkes

My Lords, I am very grateful to the noble Lord, Lord Bottomley, for bringing such an interesting subject to us today. I listened very carefully to his introduction although of course I do not agree with many of the points that he made. I thought it was most interesting that the noble Lord, Lord Smith, made the point about pay beds because I think that is a highly relevant factor in what has happened to the health service. Indeed, it is often said that the people in Harley Street believe they should almost erect a statue to that 1975 Secretary of State—and a Socialist one, I might add—because she did more to push the private sector ahead than anyone else ever had. Of course that was not her intention.

But by this attempt to throw out all pay-beds from the national health hospitals—and of course it did not really work completely because some have still quite a lot of pay-beds and others have a very small number—to the extent that it happened, it took the private doctors out of the hospitals where they did one round in the evening and they saw everyone in that hospital, private and national health. They are now doing that round somewhere remote from the national health hospital and therefore the national health patient is missing that bit of extra attention. I do not agree with the view of the noble Lord, Lord Bottomley, on moonlighting because I think that in the past national health consultants gave a great deal of extra time to the national health hospitals which now they have to spend in travelling or in seeing patients elsewhere.

It was interesting, too, that he thought direct labour was cheaper. I think the general experience in many fields, in local authorities and so on, has shown that this is not always the case. It is a fact that the hospital's own staff is always open to tender and usually does so on all tenders. As I understand it, many tenders—the majority—have been won by the hospital staffs themselves; and so I think we should clear that point up.

The noble Lord also said that the private patients are getting treatment on the cheap at the expense of the NHS. I do not agree. I am on the Board of Governors of the Brompton National Heart Hospital. Our experience there is that we have a lot of pay-beds and we have always looked on them as a marvellous way of earning extra funds for the hospital. The cost per day is £262 for those pay-beds and that more than covers the cost. We have worked out that for every two private heart operations there we are able to fund one additional national health heart operation; so there is that contribution.

We also have a system of nurse training. We work with the Cromwell, which is a fully private hospital, and the nurses are trained in advanced theatre techniques for half the time in Brompton and for half in Cromwell. That has proved greatly to the advantage of nurse training and at the end of that training period we have been able to retain quite a large number of those nurses.

There is a problem in London about nurses and our recent research has convinced us that it is an accommodation problem. The type of nursing accommodation that was offered in the past is no longer attractive to nurses, or indeed acceptable to them. We are working on that and we are designing a new unit of accommodation which will give self-contained accommodation. That is wanted by nurses today. I was interested in what the noble Lord, Lord Wells-Pestell, said about there being s shortage of accommodation outside London as well. That worries me a little because it may mean that this housing project is not going to solve the problem.

Another hospital of which I have direct experience is the Eastman Dental Hospital, the only postgraduate hospital for dentistry in this country. There all the fees earned by the consultants—and they are allowed to treat private patients at the hospital—are paid to the Institute of Dental Research. Again, that has proved to be a most valuable means of funding dental research and advanced dental treatment for patients. All costs to the hospital are fully covered in the charges that are made to the patients.

Perhaps I may add that the Brompton hospital greatly welcomes the fact that as from 1st April, instead of only being able to charge £262 a day, and to charge that to someone whether very expensive treatment or very much less expensive treatment is required, there will be flexibility. As I understand it, we shall be able to set our own charges and to vary them according to the amount of theatre or other specialist work that is required. That is something for which we have been asking for a long time, and we are delighted to have it.

Another way in which there is a great benefit to the National Health Service from private enterprise is in the way residential homes for elderly people have been set up. I know a lot of people consider that at one time residential homes for the elderly were a bonanza: it was a way to make money. Certainly this no longer seems to be the case and people who have gone into that business recently have found that it is not at all so easy to make money. However, I shall not go into the financial aspects but merely state the fact that if those people were all thrown on to the health service for treatment tomorrow there is no way we could cope with providing the care that would be required. The way that private enterprise and voluntary agencies have worked in together to provide this care has been an excellent thing because the whole pattern of care for the elderly has changed. People now remain in sheltered accommodation or in their own homes until they are at a much more advanced age and then perhaps require hospitalisation right at the end. But these residential homes fill a great gap.

The noble Lord, Lord Bottomley, made an interesting point about agency staff. I deplore the use of agency staff in hospitals because it is either intended to be an economy or it is done because you cannot increase your staff. It has nothing to do with what government happens to be in power, because I remember exactly the same thing happening when the Government of our noble friend on the Front Bench opposite were in power. You are not allowed to take on additional nurses; yet you have to turn round and employ agency nurses, which cost a lot more than if you had been able to have one or two more on your own staff. This applies also in many other specialties and so I think this is a fairly difficult point.

I was slightly amused when he described the visit of the community health council representatives to the hospital because although I believe everything he said about the dirt, it shows how very important it is to have someone checking that the work is done. That was one of the things that went wrong in our hospital reorganisation—making our areas (and now our districts) rather too remote from the actual board of governors that used to be there on the spot. That is where the special health authorities have a great advantage now.

As regards the noble Lord's point that the shower head was blocked by scale, I would say that if it is in London—and Westminster certainly is—that can happen in a week. I find that with my own shower head you have to be at it with a nail brush almost every week because the water is so hard in London.

Time is limited and my number is just about to come up on the clock, so although there are other points that I should have liked to make there is no time for them. This is a most interesting debate and I hope that we shall have a longer time available on a future occasion.

4 p.m.

Lord Porritt

My Lords, I, too, should like to thank the noble Lord, Lord Bottomley, for fathering this Motion and for his rather ingenious method of introducing what has really become a mini-debate on the NHS. I do not imagine for one moment that in this debate it is necessary to express an interest, but I should like to say that I have, man and boy, for the last 70 years been involved with British medicine.

The dominant words in the noble Lord's Motion are "private enterprise", but I do not wish to elaborate on the pros and cons of the various piecemeal efforts that have been made to try to solve the different problems. At the moment, I would rather agree with him that it seems to be a somewhat "hit and miss" method of dealing with what is rapidly becoming an insoluble problem—how to finance the NHS in its present form.

What I might call the minutiae of privatisation as debated this afternoon are just examples of the fragmentation of effort—the "stop-go", or should I say "stop-gap"? policies that have been employed more and more in recent years in a Canute-like series of exercises to stem the inevitable tide that is slowly but very steadily drowning our health service. Nobody in this House or for that matter in the country, or any person with a drop of humanity or compassion in his blood, would for one moment query the ideal behind the inception of the National Health Service. It is the practical implementation of that ideal that has gone so sadly awry. Why can we not, after 40 years of trial and error, admit that present efforts and present methods have failed to produce the expected result?—and this in an era when almost miraculous advances have been made in medicine, as we have already heard this afternoon. These advances should have brought enormous advantages to those most concerned—namely, the patients—if only overall resources had allowed them to benefit from what was available.

Any reasonable person—and that applies particularly to the medical profession—knows, and will frankly admit, that the NHS has done an enormous amount of good. But it is just not on to expect one central source of supply, the Treasury and taxation, to fulfil for everyone the demands of modern medicine, some of which your Lordships have heard mentioned already this afternoon. It has become a dire necessity, therefore, that we are now practising selective medicine in this country, and the trouble is that the selection is being made by the wrong people. It is being made by politicians for financial reasons instead of by doctors for medical reasons. Politicians and civil servants are not trained to treat patients, any more than doctors are trained to manage colossal business enterprises. This is getting back to the basics.

I have had occasion previously to say that you can nationalise a business, a corporation or a company but you cannot nationalise a profession. It is a contradiction in terms. In a profession the supplier and the consumer are essentially working on a personal basis. This is not to say that medical services would not benefit greatly from central government assistance, but surely not on a state-monopoly basis. How can the Government, any government, face up to the bill as we are trying to do at the moment? There are only two ways to do it. One is to reduce standards and the other is to raise taxes, and neither of these, I suggest, is very likely to produce anything but a voter rebellion.

Medicine should not be a political football, and particularly not a party political football. Let us get rid of strong emotion and weak logic. Let us get rid of damaging antagonisms and rabid ideologies and concentrate on co-operation, on co-ordination and, yes, even on competition between all the many methods which are available for providing medical services. Private practice is only one. Grant-aided practice would be essential. Then there are insurance-backed service, fee-for-service practice, endowments, voluntary charity subscriptions and even this morning we hear of lotteries. All these together would be hard pressed to meet the demands of today's medicine. But so long as we go on trying to convert a profession into a business by a series of unpopular and, to date, not very successful managerial schemes, we shall not get back to that original ideal of nobody being denied the medical care required for lack of financial resources.

Last year the BMJ described the NHS as, a political, statistical and managerial battleground. If that was not bad enough, I came across a horror just the other day which described the NHS as, Britain's proudest achievement and their biggest man-made disaster. What has happened to our "envy of the world", the "jewel in the crown of the welfare state"? How good it would be to have a Minister of Health concerned with health, and by that I mean environmental problems, the provision of equipment and facilities, the support of research and the prevention of illness and accidents, leaving the medical treatment of patients to the profession.

Surely the traumatic experiences that this Government, and all governments, have suffered in the last 40 years in trying to finance and administer the present monolithic health service have made it essential and urgent that we should find some viable alternative, to ensure that we do not lose for ever the tradition and prestige of British medicine. It is, I suggest, not possible or politically practical to go on much longer with this highly cost-ineffective organisation, constantly patched-up by a "bits and pieces" policy of ad hoc improvements.

To restore the tradition and worldwide prestige of British medicine, and to be able to give patients anything like a viable guarantee of improving service, we urgently need some very brave and far-seeing man or woman, or group of men and women, prepared quietly to dismantle the health service in its present form and, using to the full the lessons of the last 40 years and the experiences of elsewhere in the world, to indulge in some honest, clear thinking, long-term methods of health provision.

In conclusion, may I revert to today's debate on privatisation and quote the words of Aneurin Bevan in 1948, just before the National Health Service was launched? He said: Of course, in an ideal world we would all be private patients.

4.8 p.m.

Lord Wigoder

My Lords, I do, of course, declare an interest as chairman of BUPA, which is an organisation that insures some 3¼ million people, which overall manages some 12 private hospitals and screens medically through its centres something like 100,000 patients a year. I say that not in any way as a boast, nor as an advertisement, but simply so that your Lordships can get some idea of the size of the private sector as compared to the size of the National Health Service.

The total number of people who are insured in this country is about 5 million or one-tenth of the population. The total resources spent in the private sector are certainly less than 10 per cent. of what are spent in the country as a whole. I make that point in order to indicate that it is perhaps a little absurd to try to regard the private sector and the NHS as being in some way, in deadly competition. One cannot compete, one would not seek to compete, with an organisation 10 times one's own size. Indeed, as an interesting illustration of the way in which they are not in competition, may I deal with the question of nurses that was touched upon by the noble Lord, Lord Bottomley, in his admirable opening observations? There are in this country, on a rather local basis, shortages of nurses in certain specialties. On the last count, it was found that there are fewer nurses employed in the whole of the acute private sector in the country than there are unemployed at present. Therefore, to try to blame the private sector for the problems in regard to nurses is rather artificial.

The point was made by the noble Lord, Lord Bottomley, and the noble Lord, Lord Wells-Pestell, in a sincere and much appreciated speech, that nurses and, indeed, doctors, are trained by the state. So they are. Let us reflect a moment: so are a great many other people. Any civilised community these days regards it as its duty to train its young people. They may be chemists, engineers, nurses or doctors. No one has ever suggested that chemists and engineers, once they have been trained by the state, should work only in the nationalised industries. What is the logic of saying that that should apply to nurses and doctors?

Indeed, putting it in a very simple way that I know the noble Lord, Lord Bottomley, will appreciate, because of his long and distinguished connection with NUPE, a doctor or nurse in the NHS relieving the suffering and treating the illness of a member of NUPE is doing an invaluable job. A doctor or nurse treating a NUPE patient and relieving suffering—a patient who has gone into the Manor House Hospital, which is by far the largest private hospital in the country—is doing exactly the same valuable work so far as the community is concerned and so far as the individual is concerned. I suggest that it is quite wrong to start trying to assess the value of the work done by devoted health care personnel by looking at the means by which a particular patient happened to come to obtain treatment.

I would therefore sugggest that it is not right to say that the two sectors are in competition. They can, I think, occasionally stimulate each other to mutual advantage—in hospital building techniques, for example, in areas of hospital management, in medical screening. We have recently finished training some 50 NHS radiographers in order to assist them in the latest screening techniques when they go back to work for the NHS.

Far from there being cut-throat competition, let me make it as clear as I possibly can that every responsible person in the private sector is full of admiration and affection for the National Health Service. Everybody wants to see it thrive. Everybody recognises that it will be the dominant supplier of health care in the country for the foreseeable future.

The role of the private sector is not to compete with that. The role of the private sector is to supplement that, to try to help by increasing the total resources available in the country for health care at a time when, as everybody would agree, those resources are already in short supply.

Let me give some illustrations. In pure finance, something like £1,000 million a year is provided towards the health service by patients who go privately. It is provided because, of course, they pay their taxes, there is no reason why they should not do so and they certainly do not complain about it. They pay their national insurance, they pay their bed charges and so forth and that very substantial sum of money is then used, not by the people who have provided it, but by those who may not be able to afford other treatment and to whom the NHS seeks to provide services.

The noble Lord, Lord Bottomley, made a point about under-charging in respect of pay beds. This is partly true. It is true, I gather, that for some of the more complicated operations patients were undercharged. Equally the report said that, for the less complicated operations, they were being overcharged. That cannot be held against the private sector. That is a matter where the NHS should put its internal house in order and ensure that it does not continue to happen.

Apart from the purely financial situation, approaching 500,000 operations a year are carried out in the private sector. Where would our waiting lists be—they are already in serious trouble—if one had almost to double their length and add another 500,000 to the figures? There are some 45,000 beds in the private sector looking after the elderly, the handicapped and psychiatric patients. How could the National Health Service, with every good will in the world cope with that number of people unless the private sector were there to help out? Those are some of the figures.

The co-operation between the two sectors, of course, has been very substantial. Machinery has been provided. We spent £1 million providing a machine at St. Thomas' Hospital, which now looks after some 1,000 NHS patients and 400 private patients every year. There are many examples of that sort of practical co-operation. The DHSS contracted out some 9,000 operations to the private sector last year. Some 10,000 long-stay patients are contracted out. All over the country facilities are being shared between the two sectors.

I should like to continue at length. I cannot do so. I will end, if I may, by making this observation. At Westminster politicians talk, and ideology and dogma raises its ugly head. Sometimes things are said that really have very little relationship to what goes on in the real world. If one goes out into the field outside Westminster, one will see the people who are actually providing health care, the doctors and the nurses both in the National Health Service and the private sector, co-operating perfectly happily and perfectly contentedly with each other because they put this sort of political ideology on one side and they are concentrating on the important job, that of making sick people better and, as the noble Lord, Lord Porritt said, seeing that we have the greatest possible quantity of resources in the country to help to that end.

4.17 p.m.

Lord Hunter of Newington

My Lords, I wish to make only a few points as much of the ground has already been covered. First, I add my tribute to the noble Lord, Lord Bottomley, for the way that he introduced the subject. He got the debate off to a flying start, and we have covered a great deal of ground. May I also say that the noble Lord, Lord Smith, was unduly modest, for he was one of the people who gave the National Health service its flying start that lasted for almost 20 years.

At the beginning, it looked as though matters would be fine from the point of view of private practice. A great deal of consideration was given to the issue. It seemed that the way to deal with it in many cases was to give the consultant a nine-elevenths contract, and then allow him to do private practice.

However, there was something else that no government had really done very much about which was terribly important in relation to the patients. That was the provision of amenity beds. These have never been fully developed in the NHS. It was a very important caring provision. People could pay additional moneys to have more privacy, perhaps when a relative was dying. I can remember at the time talking to a Secretary of State—not the noble Lord, Lord Ennals, but another one—about the private bed situation, and almost trying to demand, if one can do that of Secretaries of State, why something had not been done about amenity beds. One reason, I suppose, was lack of physical facilities within hospitals. How were the pay beds to be provided together with a whole range of facilities, many having to be diverted from other purposes?

I know that at the Queen Elizabeth Hospital in Birmingham there was a wing for private practice. I can also recall some 10 to 12 years ago a daughter of mine, who was a staff nurse in the private wing, returning from duty, dropping exhausted into a chair and confessing that there had been no-one on the ward except the consultant and herself while in the consultant's NHS wards, there was a senior registrar, a senior house officer and junior house officer. In other words, the provision that had been made was not adequate to give proper medical care.

Although I personally did not welcome it, in a sense the setting up of hospitals by people from abroad has been a challenge when one considers the amenities now being provided in many countries for private patients. There has been no attempt, really, by any government in this country to cope with the provision of private or amenity beds.

The point I wish to make is simply this. It is still possible to build, near hospitals or in the grounds of NHS hospitals, private wings which are contracted out to groups of doctors or others, perhaps including nurses, to run a private wing. They might use and have made available to them National Health Service laboratory, X-ray and other facilities at commercial rates. The benefit of such an arrangement should go to that hospital or, if not to that hospital, to that district authority. As has already been mentioned, this would mean, among other things, that the doctors would not be far away and could be easily contacted if NHS patients required treatment.

I should like the Minister to say whether it is possible to build such wings to be run privately by the hospital staff. I see no reason why we should not do that. It would seem to me to be a great step towards ridding us of the bitter conflict that is doing so much damage to the National Health Service.

Lord Polwarth

My Lords, I am sure that we are all deeply grateful to the noble Lord, Lord Bottomley, for giving us a chance to talk about this extremely important subject. I think we all equally appreciate the sincerity of the way in which he introduced this subject, even if some of us may not go all the way with him in what he has said. I hope he will forgive me if I do not follow the somewhat narrow line to which he devoted himself. I believe that the terms of the Motion entitle one to range a bit wider, as a number of noble Lords have done.

I should say that my only excuse for daring to enter the lists after so many eminent and experienced speakers is, first, that I am a subscriber (as I have no doubt are a great many of your Lordships) to a private health insurance scheme. As a result of paying my dues—out of taxed income, I hasten to say—over more than 30 years, I have just succeeded in buying myself a beautiful new hip joint at a saving to the National Health Service of well over £3,000 and 11 days' occupation of a hospital bed.

Secondly, I am chairman of the board of the private hospital where this superb operation was carried out. This 60-bed hospital was financed by private enterprise and built in Edinburgh. It opened two and a half years ago. Judging by the use being made of it and the comments on the service provided, it is filling a very real need and demand. For instance, in under two and a half years we have carried out almost 7,000 operations. We have received over 30,000 out-patient visits and we recently opened a screening service which is very much in demand. That service is just getting started and we hope that by early diagnosis it will relieve the health service of some of the subsequent demands that otherwise might be made upon them.

I think that both those examples go to show that rather than being to the detriment of the National Health Service it is to their benefit to have the services available in that they relieve both the NHS and the taxpayer of some of the burden. Surely it is for the benefit of patients that they should have a choice of treatment and for the benefit of staff that they should have a choice of employer, rather than both those groups being the victim of a monopoly.

A point that has been frequently raised is that private hospitals poach their staff (and particularly nursing staff) from the public sector, which has trained them. Of course there is movement between the two sectors. However, I can assure your Lordships that in our case we have found that the movement is not all in one direction. One example I can give is that two of our best sisters, after coming to us from the NHS, have in due course gone back to it with broader and wider experience. They have gone to more senior posts within the National Health Service, and that can only be beneficial all round. We shall of course welcome them back as matrons or suchlike in due course!

We are also able to give more opportunities to older women with nursing experience who are no longer in a position to give full time to the job. I think we are able to employ their services more flexibly, for instance in helping to meet our peak needs.

In conclusion, I should say, as other noble Lords have said, that the problems of maintaining our health service are undoubtedly due to far wider causes than the existence of a private sector. To restrict or clobber the private sector would merely aggravate the crisis. The two sectors can help each other. As the noble Lord, Lord Porritt, has said in a speech which would have justified the existence of this debate for itself alone, there is a plea to be made for co-operation and indeed for competition between the two sides—though I do not think they should be regarded as two sides. It would be for the benefit of the person for whom, after all, this is all in aid of—the patient. I therefore simply echo the noble Lord's plea.

4.26 p.m.

Lord Graham of Edmonton

My Lords, like other contributors to this debate, I wish to begin by saying how grateful we are to the noble Lord, Lord Bottomley. It is quite clear that there are two worlds. One world occupies the National Health Service hospitals and the other world occupies the private hospitals. Other than the arguments concerning entitlement, if any noble Lord argues that there is no difference then there will be a great argument indeed. There is a world of difference between the quality of care, the quality of attention and ultimately the quality of opportunity for survival by those who—for whatever reason, but in the main for economic reasons—are condemned to rely upon the National Health Service facilities and those who rely on the private sector.

A number of noble Lords have indicated that the debate has widened slightly. But what this debate is all about is the effect of the presence of the private sector on the ability of the state to provide a better service than it does. I am not going to knock the quality of the service in the private sector. However, I am concerned with a better quality of service in the public sector.

For my text perhaps I may quote from today's evening Standard. On page 9 of that newspaper there is a report headed: 'Model for disaster' followed by: Patients' group warns on hospital cutbacks". The report says: Hospitals in central London are a 'model for disaster', says a patients' watchdog body". The report comes from Bloomsbury Community Health Council, which covers a great part of central London. It says: The district health authority maintains that its aim ts to provide a model health service. The regional health authority claims it wants a 'caring service' and the Government still asserts that the NHS is safe in its hands. We naturally want the health service to be run efficiently and without waste. But is it a 'caring' or 'model' service that cannot do anything for you until you become an emergency? There may be noble Lords who have little current experience of visiting public wards in our public hospitals. In the past month I have visited Chase Farm Hospital to visit a dear friend. I have visited North Middlesex Hospital as well. I visited both those hospitals in the presence of the noble Baroness, Lady Gardner of Parkes. I visited Edmonton, Enfield and Barts hospitals with my son, who has a medical problem. In regard to all three hospitals, one cannot say a word against the dedication, care or cheerfulness of the people working there. But when it comes to decoration and furnishings, equipment and the standard of care compared to what we would want for ourselves and what we know is provided in the private sector, then there is a great deal to be said.

It has to be said—although it is difficult to quantify—that the private sector bleeds in part the ability of the people in this country to provide a better National Health Service. The noble Lord, Lord Bottomley, and other noble Lords have referred to the way in which the private sector and private patients receive treatment if not on the cheap, then cheaper than at an economic cost level when using National Health Service facilities.

I do not take kindly to what was said by thenoble Lord, Lord Wigoder. There are illustrations where profit is made. There are illustrations where there is a net detriment as far as cost is concerned. Last year the director of finance of the Bloomsbury health authority had to report that his authority was owed £1.3 million by private patients and others. He said: I have experienced considerable difficulty in verifying both the size and the age of this sum … I am obliged to advise the authority that, potentially, up to £500,000 of the sum shown as due at 31st March 1986 should be considered as doubtful". That is one illustration of the manner in which the problem of the private sector and the public sector is affecting the public purse.

The noble Lord, Lord Hunter of Newington, gave an illustration concerning the use of public sector facilities by private hospitals and how the two sectors could work together, perhaps with spare land and private facilities built within easy access. The private hospital is very often deliberately built near to the public sector hospital in order that it can take advantage of the facilities. I am told that private clinics have on average 43 beds. Such clinics are very often built near to NHS facilities. Certainly, that is done to poach the staff from the public sector.

Only 30 per cent. of private clinics have their own pathology departments, only 57 per cent. have radiological departments, and few have intensive care units. The game was given away when a recent report indicated how an independent clinic built in central London was to be projected. The private sector would gain a high quality new hospital with the back-up availability of the full resources of a major teaching hospital. For a private hospital, the availability of sophisticated supporting services and skilled staff within University College hospital would provide a range and quality of services which is not generally available within private hospitals and probably could not be provided by other means.

I use that example to illustrate that the private sector is in part subsidised and takes advantage of the facilities that are made available by the public purse.

I should like to use my remaining one minute to deal with another point. The noble Baroness, Lady Gardner of Parkes, knows from her local knowledge, as I do, of the current practice borne out of the Rayner report,—namely, selling off as many hospital accommodation units as possible. This Government have a mania for transforming those who have access to, and benefit from, public sector housing, forcing them to look for other facilities.

In the Enfield health authority, there is a hiatus where nurses are being bludgeoned, pressed and harassed to vacate nursing accommodation provided for students and those recently qualified. They are urged to go into the private sector and buy their own homes or to go—laughingly—to Enfield council and ask for rented accommodation. I find it quite hypocritical that there are those who argue that it is good to enjoy the right to buy while student nurses in Enfield and elsewhere are being put under enormous pressure at a time when, as the Royal College of Nursing has said, they should be concentrating on passing their examinations.

Certainly, this debate provides a number of opportunities. The opportunity that I wish to take is to show how the incidence of the private sector is certainly detrimental to the quality of service that the vast majority of people in this country are entitled to enjoy from the National Health Service.

4.36 p.m.

Lord Harris of High Cross

My Lords, Edmonton and High Cross are almost adjoining fiefdoms, but I fear that my approach remains somewhat remote from that of the noble Lord, Lord Graham of Edmonton. I must add my thanks to the noble Lord, Lord Bottomley, for introducing this debate so gently and modestly, though I fear he will regard my remarks as an ill reward for those efforts.

I should like to start by saying that, whatever our disagreements, we all accept the desirability, even the urgency, of increasing the health care available to all our people. We want to shorten the queues in the doctors' surgeries and reduce the waiting lists. Standards of comfort and convenience should be improved, as referred to by the noble Lord, Lord Graham of Edmonton, and such improvements should not be confined only to those with social push and political pull.

Yet under governments of all persuasion, since 1948, Labour and Conservative Ministers have been periodically obliged to stop, or slow down, the growth of spending on medical care. It is true that nevertheless the total public outlay has escalated, and employment in the NHS has more than doubled since 1960. Such almost grudging expansion has failed to still criticisms and certainly has failed to satisfy the claims for treatment. Grievances have multiplied despite mounting expenditure, and yet the NHS lobbyists go on pleading that another few hundred million pounds, or perhaps a billion or two more pounds, would solve the problem of inadequate supply. It is with that proposition that I fundamentally take issue.

The folly of such optimism is exposed by the most elementary economic analysis. Where scarce resources are supplied free and financed through taxation, demand will always run ahead of supply. That is not a matter of ideology mentioned by some noble Lords but a matter of economic logic. The everyday function of price is to guide supply and ration demand. It is true that if price is suppressed in the health services you get rid of what is pejoratively called "rationing by the purse". But, you do not get rid of scarcity. Instead you have rationing by politicians, doctors, administrators and others.

The laudable aim always is to ensure that no one is denied access to health care. However, the result in the NHS is to condemn everyone to an inefficient and under-financed medical monopoly. The alternative which I commend is to encourage more spending, by choice, through private payment and insurance.

First, we must leave aside the understandable but regrettable emotional antipathy to paying for medical care. After all, we now pay for food, heating, homes, holidays and other components of good health. We could then concentrate on the social objective of ensuring that finance is available to all. We must accept that the chronic economic anaemia of the NHS is a direct result of relying on the rather thin gruel of public finance. Whatever people say to those nice opinion pollsters, most are more enthusiastic to consume free services than they are to have more taxes deducted from their wages and salaries. This insight was not always denied to conscientious and shrewd Ministers in Labour governments. My noble friend Lord Houghton posed this as a central dilemma almost 20 years ago. In a paper entitled Paying for the Social Services in, I think, 1967, he foresaw: What is in doubt is whether we in Britain will ever give medicine the priority given to it in some other countries … so long as it is financed almost wholly out of taxation". In a similar vein about the same time the wily Richard Crossman acknowledged with reference to superannuation the same dilemma. He said: People are prepared to subscribe more in a contribution for their own personal or family security than they ever would be willing to pay in taxation devoted to a wider variety of different purposes. I believe that the encouragement of private health insurance would confer a number of advantages. As my noble friend Lord Porritt said, it would sharpen competition in catering for consumer preferences; which would, in time, compel the National Health Service to be more cost-conscious and make more efficient use of its resources. Competition, in turn, would galvanise the discovery process which in the United States of America has recently widened choice with the development of health maintenance organisations, one-day surgeries, walk-in clinics, home care agencies and even a home birth movement at a fraction of the cost of prolonged hospital confinements under the NHS.

The major gain from increased private health insurance would, I believe, above all be to enlarge the resources devoted to medical care. It does not take a prophet to forecast that as standards of living continue to rise in the years ahead health care in all its many forms will, like education, holidays, home comforts and hobbies, be among the most rapidly growing parts of the expanding service sector of this economy. So long as they are not held back by dependence on public finance, these labour-intensive services offer a major hope of significant and sustained growth in satisfying employment.

The danger from the well-intentioned but, I must say, backward-looking advocates of the NHS monopoly is that they would inadvertently obstruct this advance in medical care and employment by restricting finance to what can be raised through the single, narrow channel of taxation. They would thereby simultaneously frustrate economic growth through higher taxes, while still holding medical care below what the increasingly prosperous majority would choose to provide for themselves and their families.

4.43 p.m.

Lord Kilmarnock

My Lords, I join with all other noble Lords in paying tribute to the noble Lord, Lord Bottomley, for having introduced this extremely interesting debate. The Alliance is fully committed to the maintenance of a tax-based National Health Service and the "thin gruel" of the noble Lord, Lord Hams of High Cross, seems to have produced some remarkable results over the years.

Apart from anything else, goodness knows how we would cope with such a dreadful problem as AIDS if the service were to disintegrate. Furthermore, it is well known that the administrative costs are much lower than those in other countries with insurance-based schemes. The percentage of GDP taken up by health care, despite the extent and the range of the service, is well below the OECD average. The noble Lord, Lord Bottomley, seemed to regret that, but I interpret it as a tribute to the National Health Service and I do not think I can accept the strictures of the noble Lord, Lord Porritt, on cost-ineffectiveness—the international comparisons point the other way.

Sometimes the spectre of erosion by privatisation is raised, and indeed the noble Lord, Lord Bottomley, spoke of the Government's ideological battle against the NHS. The noble Lord, Lord Colwyn, suggested that we should not be having this argument but instead concentrating on a more fruitful sort of symbiotic relationship, and my noble friend Lord Wigoder went down that road, too.

In 1979 the Royal Commission on the National Health Service reported that the private sector was too small to make a significant impact on the National Health Service except locally and temporarily. It seems to me that the questions to be addressed in this debate are whether that is still true and, if not, whether the present impact is malign or benign; or, as seems more likely, a bit of both. If that is so we have to consider which links between the two sectors should be encouraged and which should not.

The size of the private sector and the relevant statistics are set out in the report Private Health Care issued by the Office of Health Economics in November 1985, a copy of which I have. The facts appear to be that private sector acute beds have risen from 6,578 in 1979 to 10,876 in 1985–86—an increase of about 4,000 beds. Private expenditure on acute health care, 70 per cent. of which is insurance funded, was estimated at £535 million in 1984. This was only about 7 per cent. of the total NHS and independent sector spending combined. In fact, I think that my noble friend Lord Wigoder gave a slightly higher figure, but it was not very different. As he said, about 5 million people are covered by medical insurance schemes of one kind or another, which is just under 10 per cent. of the population. We can live with a private sector of 7 per cent. or 8 per cent. of total health expenditure, but if the figures started to move up to 15 per cent., 20 per cent. or 25 per cent., the alarm bells should start ringing.

On the vexed question of pay beds, it will be recalled that in 1980 the Conservative Government repealed the Labour Government's Health Services Act 1976 which had set up the Health Service Board presided over by my noble friend Lord Wigoder, one of whose main jobs was to phase out pay beds from the NHS. The board reduced the number of pay beds by 911, from 3,444 to 2,533 over a period of three years. Most of those beds had been under-used.

Some of those who promoted this policy in principle criticised it retrospectively on three grounds. First, rather than further diminishing the private sector it encouraged and strengthened it. That point was made by the noble Baroness, Lady Gardner of Parkes. The second was that the administrative effort required by the Health Services Board and by the health authorities and hospitals was not justified by the results. Thirdly, hospital doctors were alienated at a time when the government needed their co-operation on other issues.

Since the repeal of the 1976 Act and under Conservative legislation the number of pay beds has increased slightly to about 3,000. I myself would not want to revert to a deliberate phasing-out policy. It should be left to local health authority decision. Total NHS income from pay beds is in the region of £60 million. Some authorities may price themselves out but, equally, some patients may feel that famous London teaching hospitals at £174 a day are good value. In fact the noble Baroness, Lady Gardner of Parkes, mentioned an even higher figure. As she said, that money can be an important part of an authority's income.

It seems to me that the important thing here for the health service is that proper control systems are exercised, fraud eliminated, the Auditor-General's criticisms met; and not only the consultants but also the junior doctors who assist them should be properly rewarded.

On the question of consultants, we have to recognise that the system of delivery in the NHS is a compromise. It was from the outset, with the recognition of the independent status of GPs by Aneurin Bevan. If good consultants are to be retained in the National Health Service they must have some opportunities for private practice, otherwise they will migrate to the private sector. Some of the figures that the noble Lord, Lord Wells-Pestell, was seeking will be found in the report I have here. One of the statistics contained in it is that in 1984 there were 5,066 part-time consultants. Surely we would not want to lose those from the National Health Service.

Pay beds are a relatively small aspect of the relationship between the private and public sectors. Here it is worth noting an important point from the Review of the RAWP Formula by the NHS Management Review Board, in the section headed Provision of Services by other Agencies. I was going to quote from it but there is not time. The board recommends that the RAWP formula should not take account of the provision of services by other agencies, that is to say, by private hospitals. I take some comfort from that because it seems to me that it reaffirms a commitment to proper provision of NHS acute hospital services across the country regardless of private sector activity, which I am sure is right. At the end of the debate I shall be most grateful to the noble Baroness if she will confirm that this is the Government's intention. At the moment it is just a recommendation of the management board.

Leaving the subject of pay beds, there are much more important sources of National Health income from the private sector. In fact the total is in the region of £1 billion out of a total projected National Health Service budget for 1986–87 of £17 billion. Clinical facilities, such as pathology laboratories come very high on the list: over 40 per cent. of health authorities have contractual arrangements for the use of path labs by the private sector. Here the flow is very heavily weighted toward the National Health Service as provider and the independent sector as consumer. I see no reason why this traffic should not continue, provided that proper commercial charges are made and collected. No doubt the new management board will concern itself with that matter.

On the question of chronic care, the flow is almost exclusively in the opposite direction, with about one-third of health authorities contracting out long-term care to the independent sector. It is almost impossible to envisage how the elderly with chronic conditions are to be cared for without private and voluntary schemes. Here again, I am in agreement with the noble Baroness, Lady Gardner of Parkes. The pressing question is whether this private and voluntary sector is properly inspected and regulated and whether the local authorities have adequate funds for this purpose.

There are other areas in which privatisation is far less desirable. I am sure that in primary care we should stick to and improve the current system, which is a classic compromise, if ever there was one. There is nothing to prevent doctors setting up health maintenance organisations on American lines, as the noble Lord, Lord Hams of High Cross, has said; but at £85 per head and full medication costs the option is expensive for the average person. Good primary care and particularly good preventive care are much more likely to come through practices financed through general taxation as at present.

It is still an amazing fact that only 1 per cent. of all GP consultations take place privately. That seems to me to be an immense tribute to the classic British compromise system that we have built up. It seems to me to be a great pity to erode it. Here I tend to part company with the noble Lord, Lord Colwyn, but certainly improvements should be put in hand along the lines recommended by the Royal College of General Practitioners.

The other area to which my noble friend Lord Winstanley referred and which needs to be carefully watched is that of the ancillary hospital services. On the 9th December last Mr. Barney Heyhoe wrote: The programme of competitive tendering for support services has some way to run". If that means more arm-twisting of districts to privatise at all costs it seems to me to be totally wrong, particularly in view of the miserable, not to say scandalous, conditions in which the employees of some of the tendering companies are employed, leading of course to the poor results that the noble Lord, Lord Bottomley, has described.

The sub-contracting of ancillary services may be necessary and even desirable in some cases, but it should be a matter for regional and local decision, carried out, if at all, on its merits and not as a result of some ideological direction from the Government, to use the words of the noble Lord, Lord Bottomley.

I end where I began: the National Health Service must be maintained intact, but maintenance does not mean rigidity. Some, but not all, private links are acceptable and it is important to clarify whch we countenance and which we do not, and I have endeavoured to show where we think the lines should be drawn.

I have a final question for the noble Baroness. It is a question which was put to her by the noble Lord, Lord Hunter of Newington. Does she have any figures on amenity beds? I too should be very interested to hear her answer.

4.54 p.m.

Lord Ennals

My Lords, I should first like to congratulate my noble friend most warmly on his choice of subject, the quality of his speech and the very wide interest that his Motion has evinced. We are all grateful for the participation of the noble Lords, Lord Porritt, Lord Smith and Lord Wells-Pestell, to name but a few from different Benches, all of whom have made a tremendous contribution to the National Health Service.

May I start by putting this debate into its context. We are debating a service which commands very warm support from all sections of the British public. No other national service is more welcomed and more appreciated than is the National Health Service, partly because of the respect held for its staff and partly because of the quality of the treatment which the public has come to expect. I would say to the noble Lord, Lord Harris, (if he is still in the Chamber, because he is always a little difficult to see) that opinion poll after opinion poll has shown that the general public greatly admire the National Health Service—and that they think it would be safer in our hands, although that is quite a different matter—and would be prepared to pay more through taxation because they believe it is underfunded.

Some words of Aneurin Bevan have been quoted by the noble Lord, Lord Porritt, and I should like to offer another quotation—something he said in 1947: Medical treatment and care should be made available to rich and poor alike in accordance with medical need and no other criteria". I believe that he was right then and that what he said is right now; I see no reason to question that view at all.

Let us make no pretence. As was said by the noble Lord, Lord Smith, the National Health Service has made very great progress during its 40 years and more. There has been a revolution in medical and pharmaceutical knowledge which has been to the great advantage of the British public. But let us also make no pretence—today the National Health Service is in a very serious situation, and anyone who pretends otherwise simply does not know what goes on in our hospitals up and down the country.

I want to give a few examples. Of course the National Health Service is seriously underfunded. If we consider the needs of an ageing population, the growth in inflation in the National Health Service and the very modest pay increases that have to be covered, even with the bonus handed out by the Chancellor in his pre-election mood of generosity, there is room for improvements. On balance there is nil growth. In fact, sadly the number of beds is decreasing, being eroded, partly through underfunding and partly through what is now becoming a very serious and growing shortage of trained staff, which was a point referred to by the noble Lord, Lord Wells-Pestell. There is a growing shortage of nurses, midwives, occupational therapists, speech therapists and so on—I could go on through the list. It is a very disturbing situation.

The Minister keeps telling us that more patients are being treated. She may say that to us this evening, but she does not know, because no figures are available to her except those for admissions, which include patients and there is an increasing number of elderly patients who enter hospital three or four times a year who are registered as new patients. So her statistics are not of patients but of admissions.

I have to say also that there are wards which have never been opened because of underfunding. There are wards that have been closed in many parts of the country in order to save money in what the Government call "efficiency savings". Efficiency savings serve to lengthen the waiting list and to undermine the service.

So what contribution can private enterprise make toward solving these monumental problems? In a sense the private sector, rather like a leech, lives off the National Health Service. I shall not say that it does not perform a service. Not for a moment would I say that one should make it illegal for there to be a private sector of the health service, but I want to say that the private sector lives off the National Health Service. Who trains the doctors, the nurses and members of the professions complementary to medicine? It is the taxpayers who pay for them, not organisations such as BUPA, PPP and other private providers of health care. When it comes to the care of the elderly, the disabled, the mentally ill or handicapped, the poor and the chronically sick, I should be very interested if the noble Lord, Lord Wigoder, could give me some figures to show what proportion is looked after by the private sector compared with the responsibility that falls on the National Health Service.

Lord Wigoder

My Lords

Lord Ennals

My Lords, I cannot give way at the moment. Perhaps the noble Lord will write me a letter. I am sure that the noble Baroness will say the same. That intervention has taken half a minute off my time.

The private sector is also dependent upon the National Health Service for staff, equipment, pathology and blood for transfusions. What damage, if any, does the private sector do to the quality of care? It takes away consultant time from National Health Service work. That is clearly revealed in the figures given by the noble Lord, Lord Kilmarnock. Half of the consultants work part-time in the private sector and part-time in the National Health Service. It would be better if they were working far more in the National Health Service.

Secondly, the private sector distorts the waiting lists by producing a system of queue jumping. The Expenditure Committee of the House of Commons gave evidence of the use of National Health Service equipment and articles such as syringes, scalpel blades, sutures and dressings, which have not been paid for. All the facts and figures are set out in the documents. It has therefore drawn upon the funding of the National Health Service. As my noble friend Lord Bottomley said, the 46th report of the Public Accounts Committee published last July showed that many millions of pounds were being lost to the National Health Service by the undercharging of the private patients by the National Health Service. I urge the noble Baroness, Lady Gardner of Parkes, to read the report.

I should like to quote from that report but time does not permit. It gives example after example of where tens of thousands of pounds have been lost to the National Health Service. That is a scandal. All that the Government have now done in response to that fully documented parliamentary report—the committee had on it a majority of Government supporters—is to say, "We will leave it to the local health authorities to decide how to cope." It is scandalous at a time when the Secretary of State and the noble Baroness are constantly boasting of value for money and increased efficiency.

What about the new private hospitals? What can they offer? They are now offering to help the health authorities with the appallingly long waiting lists. Of course, that is at a price. Why are they doing that? They are doing so because, on average, only two-thirds of the private sector beds are occupied. That is a far lower occupancy than is found in the National Health Service. They are looking for business. However, the National Health Service does not always have the money to pay for the beds that the private sector offers.

My last point relates to contracting-out. What about contracting-out services such as laundry, cleaning and catering? Let us get the situation clear. Health authorities have had that option since the National Health Service was created. All that has happened is that the Government, for dogmatic reasons, have changed the rules to make it easier for private firms to obtain contracts. They have brought maximum pressure to bear upon health authorities to make them go for private contractors.

What is the basis of the savings? Usually, it is in lower standards; always in lower pay. By paying his staff less a private contractor can put in a tender lower than that put in by those already working in the National Health Service. In these days of massive unemployment it is likely to be able to succeed.

Private firms often cancel their contracts because they cannot provide the service or are not making profits. Health authorities often end contracts because of the poor quality of the work. In my view, it is an experiment that has taken an enormous amount of time to little benefit. Such savings as there have been have been greatly exceeded by the losses in services. Once again, I warmly congratulate my noble friend on having initiated this debate.

4.54 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington)

My Lords, I, too, am most grateful to the noble Lord, Lord Bottomley, for initiating this debate. I have listened with great interest to the 14 distinguished noble Lords who have spoken.

When I came to consider what I might say, I looked first at the wording of the Motion on the Order Paper: the effect of private enterprise on the National Health Service. That is indeed a broad topic. I appreciated the sympathy expressed for me by the noble Lord, Lord Wells-Pestell, in my task of summing up. Although the noble Lord, Lord Bottomley, focused in his contribution on competitive tendering and private practice in the NHS, I hope that your Lordships will forgive me if I begin with a few wider reflections.

First, and most basic, without private enterprise to provide the financial basis of the Exchequer there could be no NHS at all. We ignore that at our peril. Secondly, private enterprise has an integral role as a supplier to the NHS—of goods, from soap to brain scanners, and of services, from cleaning to hospital building. Nothing in this private sector involvement is new, although it is growing. Thirdly, private enterprise complements the NHS in many ways: in the provision of contractual services, where the NHS buys services from the private sector; in the provision of care for the elderly; and in the provision of private medicine. Overall, private enterprise is very much involved in the NHS. It always has been involved and it will continue to be involved. That is as it should be.

I shall return to my original three points and, I hope, enlarge on the partnership that exists between private enterprise and the NHS as I do my best to answer the questions asked by your Lordships during this interesting and worthwhile debate. But let me stress one crucial point: our primary objective is patient care. Private enterprise is working in support of that objective, just as all directly employed health authority staff are. The partnership between authorities and the private sector is a partnership in pursuit of one goal: the better care of patients.

I turn now to the points raised by your Lordships. Let me deal first with competitive tendering for support services. Virtually since the NHS began, some services have been provided by outside contractors; for example, equipment maintenance work. For too long, however, almost all health authorities had been accepting without question that hospital support services like domestic catering and laundry services had to be provided in-house. They should have been asking themselves, "What is the most cost-effective way of providing these services"?—services which cost the taxpayer £823 million in the last financial year.

In September 1983, we identified these services as particular areas where the private sector would be able to provide an alternative source of service. This was, and I must emphasise it, a competitive tendering initiative, not privatisation. Our aim—I look at the noble Lord, Lord Bottomley—was not to promote private practice but rather to promote efficient practice. In the absence of competition, for example, from private contractors there could be no cost yardsticks to assess efficiency and value for money. That is not to assume that the private sector is always more efficient; it has no inherent superiority, but it does need to make a profit to survive.

But it is nonsensical to argue, as some trade unions have, that there is an obsolute obligation to maintain jobs in the public sector. The primary job of the NHS is treating patients and NHS staff do that job superbly well. But the NHS may not necessarily always be the best source of the cleaning, catering and laundering services it needs. It must test its ability and its relative efficiency, and the only way to do that is through competitive tendering.

My noble friend Lady Gardner of Parkes referred to the majority of contracts going in-house. She is right. As at the end of September 1986, almost 70 per cent. of those three services had gone out to tender. As the noble Lord, Lord Ennals, said—and let us get this clear—the majority of tenders have been won by the in-house contractors. However, that does not in any way invalidate our initiative. Savings of around £73 million a year have been generated and these resources are going into patient care. Norwich Health Authority, for example, has funded an extra consultant post in psychogeriatrics from its competitive tendering savings.

As the remaining services are tested by competitive tendering, so savings will continue to grow. In addition, this initiative has meant managers looking in a critical, systematic and disciplined way at the standard, quality and type of service they require, looking, for example, at the rationalisation of laundries and at frequency levels in domestic services. This means services will continue to be more cost-effective.

Private enterprise has played a very considerable part in helping the NHS. At the end of September 1986, 173 contracts had been won by private contractors, generating estimated annual savings of almost £25 million. The remainder of the total savings to date, some £48 million, resulted from 773 tendering exercises won by in-house organisations, where of course the private sector tenders provided the competitive spur to the in-house tenderer.

The question of wage rates and job losses has been raised. It is not part of the NHS's job to provide care at the expense of its workforce. But equally it is quite wrong for health authorities to specify the terms and conditions of service private contractors should provide for staff working on NHS contracts. An authority can certainly consider, among other things, whether the wage rates and conditions likely to be offered by that contractor will be adequate to attract the right kind of staff. Beyond that, there is no sensible basis upon which a health authority can interfere in the relationship between the contractor and its employees.

Whether there are any job losses will depend to a large extent on how efficient services were prior to tender action. Where contracts are awarded to the contractor, the current staff are mostly re-employed by the contractor. Those entitled to redundancy payments receive them. Indeed, there have been instances where NHS staff have wanted the contractor to win the contract so that they could draw their redundancy money and then subsequently be employed by the contractor!

The noble Lord, Lord Bottomley, picked out certain hospitals for castigation. Noble Lords can imagine my regret that I cannot talk about Addenbrooke's Hospital where I once had the honour to sit on its board. I have the information but I do not have the time. I can supply that information to the noble Lord afterwards.

I turn now to private practice in the National Health Service, an issue which still generates a surprising amount of excitement. I was very grateful to the noble Lord, Lord Wigoder, for his remarks. I agree with almost all he said. However, I would dispute the assertion of the noble Lord, Lord Wigoder, that insured people pay for the NHS but never use it. I think that it is true to say that 50 per cent. of insured patients use the NHS free when entering hospital. I would accept the point of the noble Lord, Lord Wigoder, that the system of determining charges for private patients needs changing.

On the question of charges for private patients, until now patient charges have been set centrally for different classes of hospital. They are inclusive daily amounts which reflect the average cost of treatment for all patients. This system has been criticised because charges are not related to the cost of the treatment received by individual private patients. After extensive consultation with interested parties we have decided to devolve to health authorities the setting of charges subject to costs being fully recovered. Authorities will be able to choose whether to set charges locally or adopt rates produced centrally. Decisions on the 1987–88 level of these centrally-produced rates will be announced in due course.

The example of Bloomsbury, quoted by the noble Lord, Lord Graham, is indeed deeply disturbing. The authorities concerned have been left in absolutely no doubt as to how we regard their failure. Of course we attach great importance to ensuring that arrangements for collecting income due to the NHS for the use of facilities for private medical practice are operating effectively. More than £1 million weekly is collected; £52 million a year from in-patients and £9 million a year from out-patients in England alone. We have issued revised and consolidated guidance in the form of a handbook on the management of private practice in NHS hospitals. We have told authorities that they must distribute it to everyone concerned and must implement its contents.

The noble Lord, Lord Wells-Pestell, referred to consultants' earnings. Almost all the remaining consultants in the total to which he referred work in the NHS at least part of the time. There are very few who are purely private. Doctors who wish to practise privately have the right to do so, both within and outside the NHS provided their NHS work has priority over private practice. Those with a whole-time NHS contract may not receive a private practice income in excess of 10 per cent. of their gross NHS earnings. If we forced doctors to choose between NHS and private work, some would be lost to the NHS altogether, while the total volume of medical care would diminish. When people obtain private treatment in health service hospitals, this provides extra revenue for the NHS. Even those on NHS waiting lists are helped if it means fewer people seek NHS care.

I agree with the greater part of what the noble Lord, Lord Smith, said in his excellent speech concerning private practice supporting the NHS and that it should not be evicted from it. I shall most certainly try to ask my right honourable friend the Secretary of State to consider his suggestion of a conference.

I listened with interest to the remarks of the noble Lord, Lord Hunter of Newington. He deserves a fuller answer than time permits me today. I do not agree with his scenario but I think that I should bring the idea to the attention of my right honourable friend the Secretary of State and the Minister of Health, as I shall do with all your Lordships' remarks. The noble Lords Lord Hunter of Newington, Lord Porritt, and Lord Smith, by speaking from an academic viewpoint on medicine give me the very welcome opportunity to congratulate most warmly the medical schools who have done such a marvellous job in attracting funding from sources other than government.

In this context one must not forget the givers. By this I mean the work of publicly-supported, medically-oriented charities, for instance, the Heart Foundation, the cancer charities, and so on. The pharmaceutical industry also does a very great deal in helping to fund the medical schools. I pay tribute therefore to the medical schools for their hard work in raising these funds and to the efforts of the many hard-working voluntary people in those charities and the pharmaceutical industry. I am sure that all noble Lords will join me in paying this tribute.

I was most grateful to my noble friend Lady Gardner of Parkes for her remarks concerning pay beds. We are prepared to allow facilities to be made available for private practice in the NHS where a demand for it is demonstrated. There are about 3,000 authorised pay beds, some 500 more than when we came to office, but these are not reserved for the exclusive use of private patients. Other safeguards to ensure that private practice does not interfere with the provision of services to NHS patients include common waiting lists.

The question of amenity beds was raised by the noble Lord, Lord Kilmarnock. I do not have to hand the precise figures of the number of amenity beds. It is almost 2,500 in total. Authorisation of amenity beds is now a matter for health authorities to decide rather than the Secretary of State, who decides the number of pay beds. Far from being a drag on the NHS, collaboration with private enterprise in the independent health sector can also be particularly beneficial. Here the noble Lord, Lord Wigoder, gave excellent examples when speaking about the lithotripter at St. Thomas's Hospital.

Common waiting lists are used for urgent and seriously ill patients, and for highly specialised diagnosis and treatment. The same criteria should be used for categorising paying and non-paying patients. This principle has been accepted by the medical profession since 1980 and was recently endorsed by them. The principle does not require the establishment of any particular type of waiting list system, only that, whatever system is in use, private and NHS patients in those categories should be selected for in-patient admission, or out-patient attendance, according to the same criteria irrespective of whether they are NHS or private patients.

It is worth while emphasising the size of the private sector, and perhaps I may pick up a remark made by the noble Lord, Lord Winstanley. With a total of some 50,000 beds it is still relatively small. Approximately 10,000 of those are in about 200 private hospitals, with the remainder being in private nursing homes, which mainly look after the elderly. The private sector does not represent a comprehensive alternative to the NHS, but there can be no doubt that in some fields of activity it makes a significant impact. More than one in eight of all elective surgery operations are undertaken privately, and more than one-quarter of all hip replacements are performed privately.

There are statutory controls on the number and location of private hospitals but we have not needed to use them. However, we have introduced improved controls of the standards in private hospitals and nursing homes. All must be registered with district health authorities and inspected by them at least twice a year. Fees for this work have been increased to ensure that health authorities recover their costs.

The noble Lord, Lord Wells-Pestell, referred to waiting lists caused by vacancies in the nursing staff because nurses have been taken away by the private sector. I should retort to him that the shortage of nurses in the NHS is not because they all prefer to work in private hospitals because the pay is better. It is unusual for private sector salaries to be much more than the Whitley rates in the NHS. Nurses, like doctors and other professionals, should be allowed to work wherever they wish. We have no intention of introducing artificial constraints in the growth of the private sector. Provided that it does not damage the NHS, there is no reason why the private sector should not be allowed to flourish.

No speech dealing with the private sector could be complete without a reference to contractual arrangements: the system whereby health authorities contract with a private sector health care body for the provision of health services. There is a long tradition of private facilities complementing the statutory services through these contractual arrangements, and we are committed to a full and constructive partnership with the private sector in this as in many other ways.

In a most interesting speech the noble Lord, Lord Colwyn, asked me about general dental services. I can assure him that the Government do not intend to depart from the present arrangements under which general dental services are provided under the NHS. However, we remain determined to ensure that the public receive the best possible service, and the aim of the discussion document on Primary Health Care, which the Government published last year, was to seek ways of improving services to the public. We shall in due course be responding to the comments that we have received.

The noble Lord, Lord Graham of Edmonton, spoke of two worlds. I dispute that there is any difference in the quality of service provided by the NHS and by the private sector. I concede that the surroundings may differ, but not the standards of care.

The noble Lord, Lord Harris of High Cross, sparkling as usual, spoke about competition being good and private medical insurance worth stimulating, and thus gives me the opportunity to endorse some of his remarks. However, I take issue with this description that £18 billion a year spending on the NHS is "thin gruel".

Perhaps I may end in this way. I suggest that your Lordships' debate today has demonstrated clearly that private enterprise is vitally involved at every stage of the NHS. I make no apology for saying that the Government welcome the role of private enterprise in the NHS and see it continuing as an essential partnership in care provision.

Lord Wigoder

My Lords, before the noble Baroness sits down, if I said that those who are medically insured never use the NHS, that would have been manifestly wrong, and I certainly had no intention of saying any such thing.

5.26 p.m.

Lord Bottomley

My Lords, first, I should like to thank the noble Lord, Lord Winstanley, for his kind references. The noble Lord regretted that I did not broaden the basis of my speech. I should have liked to do so but I was under a time limit.

It has been particularly pleasing to me that eminent members of the medical profession have taken part in the debate, and I thank them for doing so. If I mention the noble Lord, Lord Porritt, in particular, it is for personal reasons. Together we have played an active part in Commonwealth affairs, and it is my privilage, with him, to be an honorary fellow of the Hunterian Society. All noble Lords who have taken part in the debate have played their distinctive part and I thank them for that.

My noble friend Lord Ennals always supports me. I am grateful and particularly pleased for his personal remarks about me. I am sure that the Minister will not be surprised if I say that in spite of all her usual charm and persuasion she has not moved me one inch. The fact is that private enterprise ensures that if one has the money one gets priority of service. My Lords, I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.