Lords Sitting of 26 April 1990

Preamble
The House met at three of the clock; The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bradford.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business I take the opportunity to inform the House that I have accepted an invitation from the Canadian Bar Association to attend an advocacy symposium in Toronto from Thursday, 3rd May 1990 to Monday, 7th May 1990. Accordingly, I trust that the House will agree to grant me leave of absence for Thursday, 3rd May 1990.

BAA: Commercial Policy
3.7 p.m.
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether, in view of the press release of the Office of Fair Trading, dealing with the commercial policy of the British Airports Authority, of 15th February, they will amplify their answer of 8th June 1989 (H.L. Deb., cols. 935-6), and whether they can give any details concerning date and duration of the review of BAA's London airports referred to in the press release.
Viscount Davidson: My Lords, the Director General of Fair Trading announced on 15th February that, following BAA plc's review of its commercial policies, he would not be asking the Monopolies and Mergers Commission to carry out a monopoly investigation. Under the Airports Act 1986 the commission's regular, five-yearly review of BAA's. operations must be completed in time for the Civil Aviation Authority to impose the regime for the next five-year period, starting in April 1992. I believe that the MMC's review will get under way towards the end of the year.
Baroness Burton of Coventry: My Lords, I have much respect for the Director General of Fair Trading and understand the reason why he decided not to recommend referral to the Monopolies and Mergers Commission. However, many well-informed people regret that decision. Is the Minister aware that Sir Gordon Borrie spoke of the wide-ranging complaints that he had received and said that a monopoly investigation would have been timely? Do the Government realise that the central complaint is that the British Airports Authority is pursuing monopoly profits at the expense of its customer airlines and their passengers?
Viscount Davidson: My Lords, it will be for the commission to decide how to arrange its work. One
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might expect it to follow its normal procedures in carrying out a review including the announcement of the start of the review and provision for people to make their views known. In addition, the Civil Aviation Authority is required to seek comments from interested parties before imposing a new regulatory regime. No doubt the noble Baroness will be pleased to hear that.
Lord Underhill: My Lords, will the noble Viscount confirm that my reading of the 1986 Act is correct; namely, that notwithstanding the provision for the five-yearly review the CAA may at any time seek reference to the Monopolies and Mergers Commission? Secondly, am I right in saying that when this issue was first raised (I think it was on 15th March last year) I was informed by either the noble Viscount or his noble friend Lord Brabazon that the Bus and Coach Council had sought a reference from the Office of Fair Trading? Can he say what happened to that reference?
Viscount Davidson: My Lords, I think I answered that earlier question. I understand that following discussions with the Office of Fair Trading the BAA has substantially modified its proposals for bus and coach charges which have now been agreed with the operators for the next three years. I think that answers the more general question he asked and shows that the BAA can raise matters with the OFT at any time.
Baroness Burton of Coventry: My Lords, I thank the noble Viscount for the information that he has given us already. Can he go a little further? Can he tell the House whether any statement will be made publicly during the progress of that inquiry? If it is to start at the end of this year, am I correct in thinking that it may take two or three years to complete?
Viscount Davidson: My Lords, I believe that it will take two years to carry out. The commission must report by 1992 when the new regime will come into force. Section 43 of the Airports Act 1986 requires the commission to consider both the maximum amounts which the airport operator should debit by way of airport charges for the next five years and, more generally, whether the operator has pursued any operation or course of conduct which is against the public interest. I am aware that that does not answer the noble Baroness's question as to whether it will be reporting during the progress of the review. I shall have to find out and will write to the noble Baroness about it.

LRT Board and Public Travel
3.12 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they will make it a condition of the appointment of a member of the board of London Regional Transport that on one working day of each week the director concerned shall travel exclusively by public transport.
Viscount Davidson: My Lords, London Regional Transport board members already have adequate and regular experience of travelling by public transport. Two of the three full-time members travel to work by public transport and the third member uses London Transport's services whenever appropriate. One member, who has a PSV licence, goes even further and regularly drives buses in service. Therefore the Government conclude that no useful purpose would be served by the imposition of the suggested condition.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that rather entertaining Answer. Can he confirm that the distinguished gentlemen use public transport during the rush hour when they have an opportunity to share the miseries of many of their fellow countrymen? Secondly, can he confirm that the gentleman who is a bus driver is in a very privileged position because he at least has a reserved seat?
Viscount Davidson: My Lords, I suppose that he also has an interest in getting to his destination. On the first part of my noble friend's question, those members certainly travel in the rush hour. So far as concerns the bus driver, he regularly drives buses in service. He and his colleagues on the board of LRT make a point of travelling on their bus services as frequently as possible.
Lord Grimond: My Lords, is the Minister aware that his Answer shows a very welcome improvement over the years in the conduct of the authority? Will he now consider extending this admirable suggestion still further and apply it to Ministers of the Crown, and in particular to the Secretary of State for Transport and his immediate minions?
Viscount Davidson: My Lords, I can tell the House that my right honourable friend the Secretary of State for Transport regularly travels on public transport in London.
Lord Molloy: My Lords, in view of the frustration of the travelling public on London's Underground in particular, and bearing in mind the question of the noble Lord, Lord Boyd-Carpenter, would it not be helpful if the director of London Regional Transport stopped travelling on London's Underground and buses?
Viscount Davidson: My Lords, I do not think so. I believe that it would have the reverse effect.
Viscount St. Davids: My Lords, has the noble Viscount noted the old saying that the farmer's boots make the best manure? Has he also noted that every chairman of a nationalised industry so far has shortly afterwards left the Labour Party?
Viscount Davidson: My Lords, I cannot find a connection between that question and the one on the Order Paper.
Lord Ezra: My Lords, does the noble Viscount agree that there is increasing concern by the
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travelling public in London that the policy on public transport is one of make do and mend and that the mending, in particular of escalators, seems to take an inordinate amount of time?
Viscount Davidson: My Lords, the last time that I answered a Question on this issue I was able to tell the House that there had been a considerable improvement in maintaining and repairing escalators. That improvement is continuing.
Lord Boyd-Carpenter: My Lords, does that answer cover the escalator on the westbound section of Sloane Square Underground? It has been out of action for three months and shows no signs of ever being put back.
Viscount Davidson: My Lords, I do not have the detailed information in front of me. However, I shall certainly draw that to the attention of the chairman of LUL.

The Tower of London
3.15 p.m.
The Earl of Halsbury: My Lords, by leave of the House, I should like to prefix my Question with a short personal statement together with a declaration of interest. I have been assured by the noble Lord the Leader of the House that it is in order for me to seek it.
On the assumption that I have it, I should like to begin 25 years ago. The Constable of the Tower was the late Field-Marshal Sir Gerald Templer, who asked my late wife to undertake the beautification of the Chapels Royal at the Tower of London. She made this her number one priority for the remaining balance of her life. When I became a widower I was asked whether I would become President of the Association of Friends of the Chapels Royal at Her Majesty's Tower of London.
Your Lordships will appreciate that for 25 years I have known personally all the constables of the Tower, all the lieutenants, all the resident governors, all the chaplains and many of the yeoman warders. During this period it has been, to borrow a term from the other service, a happy ship. It is now a most unhappy ship due to the way in which the yeoman warders learnt that their peaceful Sunday mornings were under threat.
With that much preamble, I beg leave to ask the Question that stands in my name on the Order Paper.
The Question was as follows:
By whose authority the Historic Royal Palaces Agency was set up, and why the Constable and resident Governor of HM Tower of London have ceased to be members of the Royal Household, and who is now Keeper of the Jewel House and in command of the armed garrison that protects it.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My

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Lords, the Secretary of State for the Environment has for many years been responsible for the management and financing of the historic royal palaces, including the Tower of London. The Historic Royal Palaces Agency is an executive agency established by his authority within his department. That is purely an administrative change.
The Secretary of State is responsible to Parliament and to the Queen for the safety of the Crown Jewels, and the holder of the office of resident governor has for many years been a civil servant in his department. The resident governor is the Keeper of the Jewel House and is responsible for the management and security of the Tower of London under the agency's chief executive. Under arrangements agreed between the department and the Ministry of Defence, the General Officer Commanding London District provides an armed guard, primarily to ensure the security of the Crown Jewels. The officer in charge of the guard reports to the resident governor.
I understand that the Constable, though appointed by Letters Patent, has never been a member of the Royal Household. Membership of the Royal Household is not a matter for Her Majesty's Government.
The Earl of Halsbury: My Lords, I thank the noble Lord for the recitation of the status quo. I should like to ask two supplementary questions. On morale, is it not the first duty of any commander or chief executive to care for the morale of his subordinates? Can anything be more erosive of morale than altering the structure of command at top level and leaving subordinates to find out from a Parliamentary Question in another place and the Answer of the Minister, without any process of consultation?
On the question of command, I have this to ask. In the event of a raid upon the Tower of London, the armed guards being provided with ammunition, who gives the order, "Load and return fire"?
Lord Hesketh: My Lords, with regard to morale, the yeoman warders have long been staff of the Department of the Environment, and we believe that they are a loyal and committed body of staff who command the full confidence of the governor. With regard to the command of the armed garrison, with the agreement of the General Officer Commanding London District, troops on duty at the Tower are on detachment and form a separate garrison headed by the officer of the London Tower Guard, reporting to the resident governor. They operate under written orders agreed with the Ministry of Defence to ensure the security of the Crown Jewels.
Baroness Birk: My Lords, I should like to ask the Minister a little more about the warders of the Tower of London and their feelings of loss of morale. I understand that what has been put forward by the noble Earl is quite true. But at any point have there been consultations with them about that change? Does the noble Lord agree that there have been changes or talk of changes? There was quite a lot about that in the press. When I telephoned the agency I was given absolutely no information apart from being told that what was in the press was
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incorrect. Will he agree that if something to do with the Government is being rumoured which is quite incorrect, it is for the agency to issue the correct version instead of upsetting, which it did, the 40 yeoman warders of the Tower of London who are very anxious about their future?
Lord Hesketh: My Lords, I am very conscious that the noble Baroness feels that she received a short answer. I suspect that the reason is that there are no proposals for change at present. If any changes are proposed they will take place over the next year or longer period, after consultations have taken place. The difficulty is that the answer which the noble Baroness received reflects the truth of the matter. There was more speculation in the press than was warranted by the facts.
Lady Saltoun of Abernethy: My Lords, I understand that the Palace of Holyrood House is not at present run by the Historic Royal Palaces Agency. Can the noble Lord give an assurance that it never will be?
Lord Hesketh: My Lords, I believe that the Historic Royal Palaces Agency operates south rather than north of the Border. However, if the noble Lady wishes to table a Question regarding north of the Border, I shall be happy to answer it.
Lord Cledwyn of Penrhos: My Lords, is it not the case that the governor of the Tower of London was always directly answerable to Her Majesty the Queen? What is the present position? Is it not the case that he is now answerable to a civil servant? If so, can the noble Lord tell us the grade of that civil servant?
Secondly, is it not the case that the yeoman warders work a 50-hour week? They are men who have given great service to this country. Is there now a danger that they may be asked to work on Sundays? Is it proposed to employ more yeoman warders so that they do not work more hours than are reasonable?
Lord Hesketh: My Lords, I shall answer the last question of the noble Lord, Lord Cledwyn, first. As I said in my previous answer, there has been a great deal of speculation for which there is no basis of fact. As regards the position of the govenor, for the past 20 years he has been a civil servant. The present governor was the first governor from a military background who won the job on the basis of open competition. The position of the governor in the Royal Household is entirely a matter for the Royal Household and not a matter for the Government.
Lord Cledwyn of Penrhos: My Lords, the noble Lord has not answered my question. Whereas the governor was directly responsible to Her Majesty the Queen, is it not the case that the governor—a retired general—is now responsible to a fairly junior civil servant?
Lord Hesketh: My Lords, for the past 20 years the governor has been responsible to a civil servant in the Department of the Environment. His position

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as regards the Royal Household is not something over which the Government have any influence.
Lord Campbell of Alloway: My Lords, further to the question put by the noble Lord the Leader of the Opposition, one assumes that these people are Crown servants. Who settles their terms and conditions of employment? That is putting in another way the question of the noble Lord the Leader of the Opposition.
Lord Hesketh: My Lords, the governor and the yeoman warders are employed by the Department of the Environment. It is through that system that their terms and conditions are agreed.
The Duke of Norfolk: My Lords, I have a remote interest in that there is a herald's museum in the Tower of London and obviously I have some interest in that. Why are the Tower armouries to be moved, having been in their present position since 1070? I believe that they are to be removed to Sheffield after that long period in the White Tower which was almost built for them by William the Conqueror. That is to take place because of a desire to make money rather than to preserve our heritage. Is that what the Government really want?
Lord Hesketh: My Lords, only 25 per cent. of the entire and invaluable collection of the Royal armouries is available to be seen. There are real problems of display within the confines of the Tower of London itself. The Royal armouries desire the opportunity to investigate the possibility of a bigger display in better circumstances, and are reviewing a number of options in order to provide that for the benefit of the public and in the interests of the heritage of this country.
Baroness Birk: My Lords, in view of the Minister's answer to my noble friend, does he agree with the Answer which his ministerial colleague, Mr. Trippier, gave in another place on 21st February of this year? He said:
"I am happy to tell my honourable friend that the practicalities and economics of early or all-day Sunday opening are currently under review".—[Official Report, Commons, 21/2/90; col. 921.]
He then went on to explain the current position; namely, that there are no Sunday openings. Is the Minister saying that Sunday openings are currently under review? He said that the agency gave me that answer because that was the true position. If what the Minister said in another place is correct, why could the agency not have given me that information, because that is the core of the problem with the yeoman warders?
Lord Hesketh: My Lords, the noble Baroness is slightly incorrect because there is already Sunday afternoon opening rather than no opening at all on a Sunday, which she suggested. The position of all royal palaces and great heritage sites will be reviewed constantly in the years ahead. I also point out to the noble Baroness that Hampton Court, where the other royal chapel exists, is already open on Sunday mornings. However, any changes will take place on a basis of investigation and not speculation.
Lord Jay: My Lords, does that also cover Buckingham Palace and Windsor Castle? What are the changes which may or may not take place within the next few years?
Lord Hesketh: My Lords, the basis of review is that I cannot provide an answer with certainty today.
The Duke of Norfolk: My Lords, we are talking about the White Tower, the central tower, built by William the Conqueror. Are the Tower armouries to be removed from there? Why can those which are there at present not be left there and the surplus moved away? To evacuate the whole of the Tower armouries from the Tower after so many centuries merely to make money is something which we should not do.
Lord Hesketh: My Lords, last night I dined in the White Tower and was completely unaware of any suggestion that the armouries were to be taken out of the White Tower.
Lord Napier and Ettrick: My Lords, are the Government satisfied that the chief executive has enough to do?
Lord Hesketh: My Lords, I am sure that the level of interest in the Question in your Lordships' House this afternoon reveals that he has.
The Earl of Halsbury: My Lords, to wind up this matter, will the noble Lord remember that the yeoman warders in Her Majesty's Tower of London are not just decorative symbols in out-of-date military costume? They still wear the Queen's Colours and are not nobodys to be pushed around at convenience like the furniture. All of them are highly decorated ex-regimental sergeant majors—warrant officers of the highest rank—and should be treated as such.
Lord Hesketh: My Lords, I assure the noble Earl that the department fully understands that the reason that the Tower of London is the most important tourist attraction in the United Kingdom is in great part due to the very facts which he has given to us this afternoon.

Oxide Emission Levels
3.30 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What were the levels of emission for nitrous oxides, carbon monoxide, carbon dioxide and volatile organic compounds in 1988 compared with 1987.
Lord Hesketh: My Lords, estimated emissions (million tonnes) of carbon dioxide, carbon monoxide, nitrogen oxides and volatile organic

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compounds in 1987 and 1988 for the UK are as follows:

1987

1988

Carbon dioxide(1)

159·0

158·0

Carbon monoxide

5·3

5·5

Nitrogen oxides

2·4

2·5

Volatile organic compounds

1·8

1·8

(1) Emissions of carbon dioxide are expressed as carbon.

These data are extracted from the Digest of Environmental Protection and Water Statistics No. 12, a copy of which has been placed in the Library of the House.
Lord Hatch of Lusby: My Lords, I thank the noble Lord for that Answer. Perhaps I may ask whether he and the Government are satisfied that those figures show any substantial reduction which, as I understand it, is the policy of the Government. If not, what do the Government intend to do about it? Can the Minister tell the House when the figures for 1989 will be available so that we can see what progress, if any, is being made?
Lord Hesketh: My Lords, I do not have the exact date for when the 1989 figures will be available. As with all the emission figures—as the noble Lord, Lord Hatch, is well aware—we are waiting for the results of the IPCC conference, which comes in the autunm, at which time we shall be able to look further at the results and see what are the challenges that lie ahead.
The Earl of Halsbury: My Lords, does the noble Lord care to remember that there are no nitrous oxides in the plural in exhaust gases? Nitrous oxide in the singular is known as laughing gas and I could prescribe it as an excellent remedy for some of the noble Lord's questions.
Lord Hesketh: My Lords, I am extremely grateful, having had a patchy educational career in physics, to have had the error pointed out to me by the noble Earl.
Lord Graham of Edmonton: My Lords, will the Government tell the House what fresh initiatives they have in mind to deal with these matters and how high a priority the Government give to research into the resources which are being wasted and which are damaging to health? Does the Minister have any statistics regarding the impact upon health in general caused by these emissions, and particularly the costs to the National Health Service?
Lord Hesketh: My Lords, if the noble Lord, Lord Graham, tables a Question with regard to the impact on health and the National Health Service, my noble friend Lord Henley will be happy to answer him. The most important feature of resolving the difficulties that lie ahead for the world is that they must be dealt with on a worldwide basis. That is why the Government stick strictly to the basis that we wait for the results of the IPCC conference in the autumn whereby on a universal basis—which is the only way we can tackle these problems —we can start to reach judgments.
Lord Ezra: My Lords, as the noble Lord seems to have so many statistics on emissions at his disposal, can he advise the House what were the emissions of sulphur dioxide for the two years in question?
Lord Hesketh: My Lords, if the noble Lord, Lord Ezra, tables a Question on that point I shall be more than happy to answer him. I might otherwise mislead your Lordships' House on the basis of the huge number of facts that I have with regard to the four points raised this afternoon by the noble Lord, Lord Hatch, on the Question on the Order Paper.
The Earl of Selborne: My Lords, will my noble friend confirm that a very real contribution can be made to pegging the increasing levels of C02 in our atmosphere by forestry and that therefore the present lack of planting, particularly in the private sector, is a matter of long-term concern in that respect?
Lord Hesketh: My Lords, I not only confirm my noble friend's suggestion, which is absolutely correct, but I also suggest to the noble Lord, Lord Hatch, that he should enthusiastically support nuclear power, which would have an enormous effect on reducing carbon dioxide emissions.
Lord Hatch of Lusby: My Lords, it would indeed reduce carbon dioxide. It would also greatly increase nuclear waste. That is not the Question I am asking this afternoon. Is the noble Lord aware that when he answered my Question he seemed to be very complacent regarding waiting for the IPCC conference? He added in answer to a supplementary question that the only way of dealing with this menace to society is by waiting for the IPCC conference and acting internationally. Surely he is aware that a Select Committee of this House, chaired by the noble and gallant Lord, Lord Carver, pointed out the weakness and danger of that argument. Will he now take responsibility for the Government giving a lead to the rest of the world in reducing these emissions, in particular carbon dioxide, and will he—
Noble Lords: Too long!
Lord Hatch of Lusby: —attempt to persuade his right honourable friend the Secretary of State for Transport that one of the main ways of reducing carbon dioxide is to have fewer vehicles on our roads?
Lord Hesketh: My Lords, in response to the first part of the question of the noble Lord, Lord Hatch, of course the Government take very seriously any Select Committee report. In answer to the second part of his question, this is a global problem. The only way that we can attack a global problem is with a global answer, which is why we are awaiting the IPCC report.
Lord Hatch of Lusby: My Lords—
Noble Lords: No!

Business
3.35 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Ferrers will, with the leave of the House, repeat a Statement that is to be made in another place on disturbances in Her Majesty's Prison, Manchester.
It may be for the convenience of the House if I announce that the Committee stage of the National Health Service and Community Care Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Committee stage of the European Parliament Electoral Reform Bill will be taken.

War Crimes Bill
Brought from the Commons; read a first time, and to be printed.

Aviation and Maritime Security Bill
Viscount Davidson: My Lords, on behalf of my noble friend Lord Brabazon of Tara, I beg leave to move the Motion standing in his name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Aviation and Maritime Security Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 8,

Schedule 1,

Clauses 9 to 43,

Schedule 2,

Clauses 44 to 53,

Schedules 3 and 4,

Clause 54. —(Viscount Davidson.)

On Question, Motion agreed to.

South Yorkshire Light Rail Transit (No. 2) Bill
Read a second time, and committed to an Unopposed Bill Committee.

National Health Service and Community Care Bill
3.37 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee. —[Baroness Hooper.]
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 5 [NHS trusts]:
Lord Hunter Lord Hunter of Newington moved Amendment No. 94D:
Page 6, line 6, after "(1)" insert ("Subject to subsection (lA) below").
The noble Lord said: In moving Amendment No. 94D I shall speak also to Amendment No. 95D, which concern NHS trusts. I shall also make brief reference to Amendment No. 96 dealing with the hospital incentive fund proposals regarding the type of stimulus and opportunity which is proving so successful in Canada and which avoids any suggestions or dangers regarding two-tier systems.
The Government asked for volunteers to develop trusts. Out of the 70 or so applicants in 1991 they will have a trial run of 30 of the most promising. I hope that those were the words of the noble Baroness, Lady Hooper, when she spoke to us. There is a dilemma here. What criteria have the Government applied to the applicants to make that choice? Some said that these trusts were the flagship proposals of the health service Bill, but others seemed to be concerned that the trusts were divisive and would encourage two-tier systems in hospitals and other facilities.
There are situations where specialist facilities should be treated in a special way. Perhaps I may take the example of the Christie Hospital in Manchester. There is no doubt that it should be a special trust. I must confess an interest. My eldest son is a senior consultant to the hospital and keeps me informed. The service that the hospital provides is a specialist and expensive one. It meets the needs of the North West of England. The treatments require special skills in the field of radiotherapy and chemotherapy and also in the field of counselling for the very special problems that the patients have. Such is the nature of that facility that it should be special. It is also in a position to command the regard of the medical charities who know that resources expended there on staff and equipment will be well spent. In fact the hospital has a world-wide reputation. One can also see the case for specialist bums or accident units to be treated in this way.
To make a London hospital a trust seems to me most difficult and could result in the opposite effect to that intended. London medicine is in the process of change and has been since the Todd Report of 1968. Reorganisation and other changes have a long way to go. It has also suffered more than most from a decade of RAWP—Resource Allocation Working Party—reports which effectively removed considerable resources from the London teaching hospitals.
In my view, the Guy's Hospital experiment has shown that doctors must be effectively involved in the management of resources. At the same time I agree with the majority of staff and their concern about the concept of a trust.
I pose a problem that is not unusual in these days of motorway expansion. A new road is built within the territory of a country hospital which is equipped to meet the needs of the local population. It is decided that it is necessary to develop a modern accident wing to meet the needs of the hospital's

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new responsibilities. How is that to be done? Should it be made into a trust hospital? A much better way, which is successful in Canada, is to have a hospital contingency fund. I shall discuss that when we come to Amendment No. 96. One of the important features of such a scheme is that it is open to all in the health service to improve their lot and if they do not do well their resources are cut. Does not that proposal present a challenge to the whole of the service?
I now come to Amendment No. 95D: that the Secretary of State be required to publish his reasons for setting up trusts. Views may differ on the need to consult a community health council but the essential reasons for the approval of this proposal must become known to hospital staffs and managers alike. There is another aspect that concerns me and where I look forward to the results of the first study. The White Paper referred to an aspect that I mentioned recently—the amalgamation of district hospital authorities with family practitioner authorities. I believe that there is a need for one authority, particularly if group practices of the future develop with special diagnostic and treatment skills. That may take 20 per cent. of patients away from hospital attendance and could cut hospital waiting lists substantially. Nothing should be done to prevent such a change. Would it be more difficult, I ask the Minister, if trust hospitals were involved? They might be concerned at losing their special status and therefore resist an important and effective change which ravours the patients and is cheaper.
A group of noble Lords have made a special study of teaching hospitals, particularly medical centres, and how they should fare in this situation. I suspect they are more concerned about adequate resources for teaching and research than becoming a trust, but they must speak for themselves. Main teaching hospitals have had special treatment since the beginning of the health service, as was pointed out by Sir Christopher France in his report on knock-for-knock principles.
I believe that the proposals under Amendment No. 95 D are a minimal request in the circumstances that I have described. They would do much to reassure many of those who are similarly concerned. I beg to move.
Lord Ennals: This amendment originally appeared in the name of the noble Lord, Lord Hunter, and also that of the noble Lord, Lord Carr, who, unfortunately, cannot be here at the moment. I added my name to this amendment which is grouped with my own Amendment No. 95G which refers to consultation with community health councils.
I warmly support everything said by the noble Lord, Lord Hunter. This is the first opportunity that the Committee have had to discuss the proposals for NHS trusts. There can be no escape from the fact that there is substantial fear in each area where an NHS trust may be established that the pattern of health care delivery will be disturbed in a way that could create real problems for patients. I am not saying that it will but that at the moment that fear exists. The fear is a little like the consequence of a cuckoo in the nest; that a trust might eat up all the resources.
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The concerns are several. First, there is concern that there will be increasing emphasis on the more glamorous acute services at the expense of the generality of hospital services. I have in mind, particularly, the Cinderella services; the needs of the elderly, mentally ill and mentally handicapped. The danger is that commercial pressure will shape the future of medical specialities, that a financial director will want priority given to high volume rapid turnover specialties which maximise the rate of return per bed. Specialties which treat chronic conditions at high expense with low prospect of permanent cure will be at risk for the same commercial reasons that private hospitals do not attempt to provide them.
There is a fear that there will be some loss in terms of continuity of service as between the general practitioners, the hospitals and other services in the community. That has been highlighted by the Royal College of Nursing which states that discharge planning and the continuity of care are already not the most successful features of our existing system and that self-governing hospitals could disrupt an already imperfect system by increasing the number of patients travelling outside their district of residence and dislocating the management link with the district authorities.
The problem of travelling longer distances for treatment if certain services are cut for commercial reasons is of serious concern to the public, particularly with our increasingly elderly population. There is also concern that the NHS trusts will suck in the best staff, undermining national pay agreements and conditions of service. We will be discussing that aspect in a later amendment. It is certainly envisaged that NHS trusts should be in a position to offer more lucrative contracts and inevitably that must be to the detriment of other hospitals that do not have that special privilege. It is seen by the medical profession as a danger in introducing competition on a financial basis, with self-governing hospitals as a major part of the proposed means of achieving this commercial approach.
There is the danger that a two-tier service will develop in which inevitably there will be not only winners but losers; and we must look at the losers as well as at the winners. There is a fear that national assets—units often paid for originally from private contributions—will serve the interests of the minority rather than the majority. After all, most of the great hospitals have had enormous amounts of money pumped into them by the public. We have to look at them as public assets. Somehow or other the Secretary of State will have to find current extra money to ensure that these trial run trusts really work. As we go along, there can be no satisfactory evaluation of the success of these NHS trusts if more money is put in than is available for those hospitals that are not trusts. That would not be reasonable competition. I hope that we can have an assurance from the Minister.
In any event there will be great cost involved. News is coming in daily about cuts. Yesterday there was a report concerning cuts at St. Thomas's Hospital; today there is news of cuts being planned at Westminster Hospital. One wonders whether in

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the history of the National Health Service this is the time to be adding all the extra costs that the trusts will demand. There is concern among many that National Health Service trusts will pave the way for privatisation. That is an issue of fundamental importance which will come up in a later amendment.
The health authorities themselves have their own fears. The National Association of Health Authorities has pointed out that the aim is to introduce a competitive approach and that that is bound to lead to a rationalisation of services. In my view rationalisation almost always means a cutting down of certain services. The association says that in a modified way that is all to the good, but taken to its ultimate extent it could seriously reduce access to some services for many patients.
Those Members of the Committee who heard the noble Lord, Lord Nugent, speak at Second Reading and subsequently know that five of the six hospitals which have been taking part in the resource management initiative to try out the market techniques have already expressed to the Secretary of State their feeling that the time is not yet ripe for moving forward. Guy's Hospital did not associate itself with the letter which was sent to the Secretary of State. The opinion given reflects that of hospitals across the country, in Newcastle-upon-Tyne, the Wirral, Huddersfield, the Pilgrim Hospital in Lincolnshire and the Royal Hampshire County Hospital, which I drove past this morning. The letter states:
"We believe that we should continue to direct our energy towards the successful development of resource management … rather than be diverted towards what would undoubtedly be premature consideration of self-governing status for these hospitals".
As I said, only five hospitals agreed with that view. At that stage Guy's Hospital did not associate itself with that view. However, the vast majority of the staff at Guy's have indicated that they do not want to see it becoming a National Health Service trust. There is a great deal of concern. The day before yesterday we discussed evaluation, but that subject will not be raised in the course of this debate. If the noble Lord, Lord Carr, were here he would repeat what he has said time and time again concerning the timetabling of the establishment of these new trusts.
In a sense this amendment is another way of controlling and limiting the rate of change so that it can be effected after careful consideration, place by place, the Secretary of State having looked at the situation, presented his report, as suggested by the noble Lord, Lord Hunter, and consulted community health councils on the part of the community.
The question of the pace of change was emphasised by Sir Geoffrey Howe in a speech that he made yesterday. He warned a Conservative meeting in London:
"We can secure widespread public support for the far-sighted reforms we are bringing forward. But we will only enjoy that support over the long run if they are pursued at a pace that can be sustained politically. That does not mean discarding our basic diagnosis. But it does mean matching the style of our reforms to the mood of the electorate at large. This is one of the central challenges we face between now and the next election".
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I hope—and it is part of the purpose of this amendment—that there will be nothing automatic about the Secretary of State giving his approval to a group of enthusiasts within a hospital. It will not be enough to say that there is great enthusiasm which must not be dampened. What is required is that the Secretary of State should look at every aspect of the issue —what is in the best interests of the community, whether the hospital itself is ready, whether its staff are trained, whether it has the information technology at its disposal and the database to enable all this work to be done. These matters should not be light heartedly handed over to a group of directors. I hope that the Committee will be impressed by the arguments contained within these amendments.
It is especially important that the interests of the community are looked at. That is why I have my own amendment to which I have made reference. It seeks the views of the community health council and of other bodies. I hope that those other bodies will include the health authority itself. It certainly means that the Secretary of State should satisfy himself very carefully and systematically before proceeding to introduce a provision into a particular area which may have great merit but which may do great damage. He must make an assessment before he enters into that commitment. I hope that the Committee will accept the amendment.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): As the noble Lord, Lord Ennals, said, this is our second opportunity to discuss more generally National Health Service trusts. I say that it is our second opportunity because they were discussed to some extent and in some detail at Second Reading.
I begin by making one or two general points about National Health Service trusts. The Bill merely provides a framework for establishing these trusts as self-governing units within the National Heahh Service. Management freedom of NHSTs will enable them to respond more effectively to patient needs and improve the quality of services. Freedoms available to NHSTs will include the freedom to employ staff, retain surpluses, borrow money and acquire, own and dispose of assets. Most important, NHSTs will be an integral part of the National Health Service and will be accountable to the National Health Service Management Executive.
The noble Lord, Lord Hunter, feared that developments in family practitioner services could be hindered by the development and creation of NHSTs. I do not believe that these fears are justified. Like all hospitals, trusts will have to be responsive to general practitioners. They will depend on contracts for their income and will have no incentive to develop services which GPs provide themselves and which they do not wish to refer to the hospitals.
The noble Lord, Lord Ennals, referred to what has been described in the past as Cinderella services. He said that they would suffer. All types of units, including long-stay hospitals, community units, district general hospitals and teaching hospitals of all types, have expressed interest in trust status. All these bodies are eligible and the Government believe that all can benefit. I believe that the noble Lord

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knows well that the key is the role of the district health authority in planning comprehensive care for its resident population. All care needs should be met and there should be no danger of services for priority groups being squeezed out.
Neither do I feel that the fears of the noble Lord that trusts will poach their staff are justified. We shall be discussing these trusts in connection with later amendments. The trusts will be free to set their own pay and conditions and so respond flexibly to the local labour market. However, I do not believe that it will lead to the poaching of staff That would simply drive up their costs across the board and make them less able to win the contracts.
4 p.m.
Lord Ennals: I am most grateful to the noble Lord for giving way. If the NHS trusts are able to offer something above the going rate, will that not automatically force up the "going rate" so far as concerns other health services? That would be the end of national agreements. However, if that does not happen, surely they would automatically be pulling away staff attracted by the higher rewards which they would receive in NHS trusts?
Lord Henley: The noble Lord knows very well that in many parts of the country we already have problems with recruitment. That is true not just in the National Health Service but also in a great many other areas of employment. NHS trusts will have the flexibility to respond to that situation. It will be up to them to set their own limits. As I said, there is no incentive for them to push up their prices to such an extent that they cannot compete effectively.
I have made those general points first before dealing with the details of the amendment tabled in the name of the noble Lord. He is asking for two provisions: first, for details of the consultations required; and, secondly, for a document to be published by my right honourable friend the Secretary of State three months before he makes any order setting up a National Health Service trust.
We made it clear back in June 1989 in a document of which noble Lords will be aware entitled Self-governing Hospitals: An Initial Guide that we expect all applications for trust status to be subject to proper consultation and that we expect regional health authorities to make arrangements for such consultation. We have also indicated that such consultation will cover a wide range of interests: the local community, health authorities, community health councils, local general practitioners and, of course, the staff of any potential trust. We will expect regions to arrange for consultation to be carried out over a three-month period.
So far as concerns community health councils which are referred to in the second half of the noble Lord's principal amendment, I should make it clear that consultation on the establishment of trusts will be undertaken under the provisions of the 1985 regulations which require health authorities to consult with the relevant CHC when they are considering proposals which would represent a significant change in National Health Service services in the district. That consultation would take
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place at the same time as consultation with other interests. Any views expressed by the CHC would be passed to the Secretary of State so that he could consider them with the application and with the views of others consulted.
I should stress that the key to our approach is that the process of consultation should be flexible and tailored to meet the needs of the people who will be most affected by the establishment of the potential trust concerned. We do not believe that this aim would be furthered by prescribing in statute either how the consultation should be undertaken, the period of consultation, or that it should be the responsibility of the Secretary of State, rather than the region, who will be best placed to identify those groups and individuals who should be consulted.
We have made clear that the application prepared by a potential trust will be the key document on which consultation will take place. I do not believe that any benefit would flow from the Secretary of State preparing a separate document for consultation. As I said, consultation will take place on the application document prepared by the trust. The document will set out its plans in some detail covering among others matters: the benefits to patients; proposals to develop services and ensure quality; leadership and management arrangements in trusts; and personnel information and finance matters.
Lord Ennals: I am most grateful to the noble Lord for giving way a second time. He said that the basic document will be prepared by the trust. However, the trust will not have been established. Will it simply be submitted by the enthusiasts as opposed to a structure such as a trust?
Lord Henley: Perhaps I misled the noble Lord on the matter. The document will be put forward by those applying for trust status. As I said, there will then be consultation on that document. We see no need for there to be a repeat document from the Secretary of State.
As I said, the document will be wide-ranging. It would, therefore, seem strange for the Secretary of State to have to prepare a separate document setting out the reasons for establishing a trust. That would either repeat the application document or provide for consultation proposals which differ to a greater or lesser extent from the terms of the trust's applicants. That would not seem the right way to go about the process of consultation. That is why we believe that such consultation should be carried out by the regions, as I stated, on the basis of the document prepared carefully by the trust applicants.
I can assure Members of the Committee that responses to consultation from interested bodies will carry weight in the Secretary of State's decision. However, I do not believe that it would change the weight which the Secretary of State placed on the results of consultation if he was bound by a statutory duty to take account of such responses. He will take account of all relevant factors when reaching his decision and will decide upon the option which he believes will be best for National Health Service patients.

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I should explain that the functions specified in the establishment orders of trusts will be based upon the services they provide, as set out in their applications for trust status. As I have already made clear, CHCs will be consulted on the applications. Therefore, the suggested amendment, Amendment No. 95G, tabled in the name of the noble Lord, Lord Ennals, would I think merely duplicate this process to no real purpose.
I hope that the information about consultation, and also my answer to the noble Lord, Lord Hunter, as regards his proposal that a document should be published by the Secretary of State, will reassure the Committee that the Government are fully committed to consultation on trust applications and that these amendments are unnecessary.
Lord McColl of Dulwich: Perhaps I may deal first with the issue which the noble Lord, Lord Ennals, frequently mentions; that is, commercialism. I should like to ask this question. Who was it who brought up the subject of the sordidness of money and cash limits? Who introduced cash limits into the hospital service in the first place? The noble Lord, Lord Ennals, will no doubt correct me if I am wrong, but I believe that it was the noble Lord himself who did so. Therefore the great emphasis on controlling the amount of money which is spent came initially—quite rightly—from him.
I should like to take Members of the Committee back to the time of one of the noble Lord's predecessors; namely, Mr. Richard Crossman. One day he found himself in the lift with a clerk to the board of governors of a famous London teaching hospital. He said to the clerk, "You are overspending and you must cut down on the amount of money being spent". The clerk responded by saying, "I have no intention of controlling the spending; I shall encourage them to go on overspending". Thus we had this difficulty of limiting or controlling the expenditure of hospitals. The noble Lord, Lord Ennals, then brought in these cash limits. However, he does not seem to me to be very enthusiastic about the matter.
Lord Ennals: I feel I must respond to the noble Lord's remarks. I admit that I introduced cash limits. If a Secretary of State has established cash limits he must then decide, if the rate of inflation is running over the estimate made at the time of the establishment of the cash limit, whether the health service ought to be protected against the higher rate. Further, if there has been a major increase in remuneration by agreement, he must also decide whether that should be covered or whether both aspects must come out of patient care. That is part of the task of the Secretary of State.
Lord McColl of Dulwich: I thank the noble Lord for that answer. However, it is also true to say that no Secretary of State has ever given enough cash to cover inflation. If inflation is estimated at 5 per cent. and it turns out to be 8 per cent. it is part of the technique of the Treasury to ensure that it remains at 5 per cent.
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I wish to return to the patient and the hospital. Let us bring in a little commercialism, in which the noble Lord, Lord Ennals, may be interested. Right now, in January this year in one hospital not 40 miles from here one surgical unit managed to carry out operations at a cost of £40 per hernia equivalent. That is a unit which is a way of measuring how much surgery costs. In this same hospital another unit operated at a cost of £200—that is a five-fold difference. That is what is happening now. We have no way to control that.
We believe that the introduction of the Bill will, especially in the case of the self-governing hospital enable there to be an enormous incentive to find out why those differences occur, to iron them out and to obtain real value for money. That is what it is about.
The noble Lord, Lord Ennals, also mentioned St. Thomas's Hospital and asked why it was experiencing these cuts. He himself said repeatedly that every year more and more money is spent on the National Health Service. The costs increase every year. What then are these cuts? If he were to go out one day to do the shopping and spent five times more than he should on the food, he might find that his household had to institute cuts in the following months. Is that a true cut or part of his failure to control expenditure?
Lord Peston: Perhaps I may interrupt the noble Lord, with respect. I have some connection with St. Thomas's Hospital. Is he saying that St. Thomas's has to make these cuts because it mismanages its resources? Does he wish to place that on record at this time? I should be grateful to know what he has said because in due course I could take the opportunity to rebut it.
Lord McColl of Dulwich: I do not wish to go into details or to blame anyone. I should like to say that at a particular hospital there is a solution which answers the problem of St. Thomas's. There is apparently something called the suspense account. If one receives a bill and is not sure what to do with it, one puts it in the suspense account, which is also known as the dustbin. That is a reasonable technique so long as one keeps looking in the dustbin and paying the bills. However, if it is left for a long time one may find oneself in difficulty.
I do not wish to go into the details of particular hospitals, but I emphasise that there is not the slightest doubt that we do not have proper financial control in the hospitals of this country. We must achieve that and I believe that the Bill will go a long way towards instituting that control. It is essential.
Lord Ennals: Since this is the Committee stage perhaps I may respond to some of the points made by the noble Lord. He is not right that no government have provided additional funds because the rate of inflation is different from the one they estimated. That is not true and I am able to furnish him with the information.
I live basically on my pension. The noble Lord asked what I do about shopping. My pension is linked to the rate of inflation. I get an index link

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every year so that my pension has the same value as the year before. All right. The cuts now being carried out in the health service are because the rate of inflation is several points higher than estimated by the Government. Also, quite properly there have been paid increases that have not been totally covered by the department. If the department leaves the situation that way, there will be headlines such as, "Hospital to feel the axe", which appeared in a newspaper today concerning Westminster Hospital.
I see nothing in the Bill which will make it easier for health authorities to keep their accounts properly. The first point I wish to make to the noble Lord is that inevitably, if there is a system of cash limits, it must be administered. If anybody had said in the lift to Dick Grossman or to myself that he would not observe his cash limits, we would have put in commissioners. Indeed I put in commissioners at a time when it was perfectly clear that the health authority would not live within the means available to it. There has to be a discipline. I see nothing in the Bill that will increase that discipline; in fact exactly the opposite.
The point that I tried to make when I spoke at the beginning of the debate was that, if there is a National Health Service trust which is not part of the health authority, all right it may be directly responsible to the Secretary of State but not to the health authority, and that health authority will have a much more difficult job in balancing its budget and knowing what expenditure it has to cope with. It will live with a cuckoo in the nest in the middle of the district for which it is responsible.
I believe that in the present situation, with the lack of additional money to make all this possible, with the uncertainties on whether the staff are trained and whether the money and the information technology will be available, this will produce chaos. I say again that it will produce financial chaos in the National Health Service which will start on about 1st April 1991.
Lord Henley: I do not wish to increase the political nature of the debate, but it is worth correcting some points that the noble Lord made. I do so purely for the sake of the record. He implies that there have been cuts in health spending under the Government. As he knows perfectly well, there has been a growth in real terms since 1979 of 45 per cent. There has been a growth in spending per capita in real terms of 41 per cent., which brings the expenditure on the health service under this Government—indeed under all governments—to an all time high.
4.15 p.m.
Lord Hunter of Newington: I am sorry to say that the noble Lord, Lord McColl, has only confirmed my view that the situation is as I described it. In other words, it does not require a self-governing hospital to achieve his objects because a good number of years ago one hospital which I served did just that without having been made into a self-governing hospital trust.
The issue is essentially medical people being involved with managers. I do not think there would be any disagreement on that on any side of the
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House. Managers and medical people must work together. I am grateful to the Minister for what he has said but, with respect, a great deal of it has a familiar ring. I am still in a position where I have no idea what criteria the Government used in choosing the 30 people on trial, and whether there will be a period of consultation or examination after they have been on trial for a while. I do not know whether the Minister wishes to answer that.
Lord Henley: As I said, there will be further guidance. Perhaps I may return to the document put forward by the applicants. As I explained, that document will cover in some detail quite a range of issues, and I spelt them out: benefits to patients; proposals to develop services and to ensure quality; leadership in management arrangements and trusts; personnel information and financial matters. Having had such a wide-ranging document from the applicants for the trust, I do not think that it will be necessary for the Secretary of State to produce another document on which there would be yet further consultation. There would be consultation on the document produced by the applicants for trust status.
Lord Hunter of Newington: I still find myself confused. I feel that the matter is so critical that I must determine the views of the House on it.
4.20 p.m.
On Question, Whether the said amendment (No. 94D) shall be agreed to?
Their Lordships divided: Contents, 101; Not-Contents, 103.

DIVISION NO.1

CONTENTS

Addington, L.

Harris of Greenwich, L.

Adrian, L.

Hatch of Lusby, L.

Airedale, L.

Hayter, L.

Annan, L.

Hirshfield, L.

Ardwick, L.

Houghton of Sowerby, L.

Aylestone, L.

Howie of Troon, L.

Birk, B.

Hughes, L.

Blackstone, B.

Hunt, L.

Blease, L.

Hunter of Newington, L. [Teller.]

Bonham-Carter, L.

Bottomley, L.

Hutchinson of Lullington, L.

Bruce of Donington, L.

Hylton, L.

Callaghan of Cardiff, L.

Hylton-Foster, B.

Campbell of Eskan, L.

Ilchester, E.

Carmichael of Kelvingrove, L.

Jacques, L.

Jay, L.

Cledwyn of Penrhos, L.

Jeger, B.

Cocks of Hartcliffe, L.

Jenkins of Putney, L.

Craigavon, V.

John-Mackie, L.

David, B.

Kilbracken, L.

Dean of Beswick, L.

Kilmarnock, L.

Diamond, L.

Leatherland, L.

Ennals, L.

Listowel, E.

Ewart-Biggs, B.

Llewelyn-Davies of Hastoe, B.

Falkland, V.

Fisher of Rednal, B.

Lloyd of Hampstead, L.

Fitt, L.

Lloyd of Kilgerran, L.

Gallacher, L.

Lloyd-George of Dwyfor, E.

Galpern, L.

Longford, E.

Graham of Edmonton, L. [Teller.]

Lovell-Davis, L.

Macaulay of Bragar, L.

Grantchester, L.

McFarlane of Llandaff, B.

Hampton, L.

McGregor of Durris, L.

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Masham of Ilton, B.

Serota, B.

Mayhew, L.

Shackleton, L.

Molloy, L.

Shaughnessy, L.

Monson, L.

Stallard, L.

Murray of Epping Forest, L.

Stedman, B.

Nicol, B.

Stoddart of Swindon, L.

Oram, L.

Swann, L.

Orr-Ewing, L.

Taylor of Blackburn, L.

Peston, L.

Thurlow, L.

Phillips, B.

Thurso, V.

Ponsonby of Shulbrede, L.

Turner of Camden, B.

Prys-Davies, L.

Underbill, L.

Rea, L.

Wallace of Coslany, L.

Robson of Kiddington, B.

Walton of Detchant, L.

Russell, E.

White, B.

Sainsbury, L.

Williams of Elvel, L.

Saltoun of Abernethy, Ly.

Winchilsea and Nottingham, E.

Scanlon, L.

Seear, B.

Winterbottom, L.

Seebohm, L.

Young of Dartington, L.

NOT-CONTENTS

Alexander of Tunis, E.

Lauderdale, E.

Annaly, L.

Layton, L.

Arran, E.

Long, V.

Balfour, E.

Luke, L.

Beaverbrook, L.

McColl of Dulwich, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Beloff, L.

Mancroft, L.

Belstead, L.

Marshall of Leeds, L.

Bessborough, E.

Merrivale, L.

Blatch, B.

Mersey, V.

Boyd-Carpenter, L.

Monk Bretton, L.

Brookes, L.

Mottistone, L.

Brougham and Vaux, L.

Mountevans, L.

Butterworth, L.

Mowbray and Stourton, L.

Caithness, E.

Moyne, L.

Caldecote, V.

Munster, E.

Campbell of Alloway, L.

Murton of Lindisfarne, L.

Campbell of Croy, L.

Nelson, E.

Carnegy of Lour, B.

Newall, L.

Carnock, L.

Norfolk, D.

Colwyn, L.

Nugent of Guildford, L.

Constantine of Stanmore, L.

Pender, L.

Cork and Orrery, E,

Plan of Writtle, B.

Cottesloe, L.

Quinton, L.

Cranbrook, E.

Reay, L.

Crickhowell, L.

Kenton, L.

Davidson, V. [Teller.]

Renwick, L.

Denham, L. [Teller.]

Romney, E.

Eden of Winton, L.

St. Davids, V.

Elliot of Harwood, B.

St. John of Bletso, L.

Elliott of Morpeth, L.

Sanderson of Bowden, L.

Elton, L.

Selborne, E.

Ferrers, E.

Sempill, Ly.

Fortescue, E.

Sherfield, L.

Eraser of Kilmorack, L.

Stodart of Leaston, L.

Gardner of Parkes, B.

Strathclyde, L.

Gisborough, L.

Strathcona and Mount Royal, L.

Greenway, L.

Gridley, L.

Strathmore and Kinghorne, E.

Hailsham of Saint Marylebone, L.

Swansea, L.

Havers, L.

Swinfen, L.

Hemphill, L.

Swinton, E.

Henley, L.

Teviot, L.

Hesketh, L.

Trefgame, L.

Hives, L.

Tryon, L.

Hood, V.

Ullswater, V.

Hooper, B.

Vaux of Harrowden, L.

Howe, E.

Whitelaw, V.

Iddesleigh, E.

Willoughby de Broke, L.

Killeam, L.

Wolfson, L.

Kimberley, E,

Wyatt of Weeford, L.

Knutsford, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Baroness Blatch: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Royal Assent
4.27 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Education (Student Loans) Act,
Greater Manchester (Light Rapid Transit System) Act,
Happisburgh Lighthouse Act.

Manchester Prison: Violence
4.28 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, with the leave of the House, I should like to repeat a Statement about the serious disturbance at Manchester prison which is now being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"As the House will be aware, at about 6.20 p.m. yesterday evening, prison staff regained control of the prison. One of the six inmates who remained in the prison was taken back into custody earlier in the day, and the remaining five surrendered later. All prisoners in Strangeways on 1st April have been accounted for, and certainly nothing has been found to substantiate the wild stories which appeared in the press in the early stages of the incident. That yesterday's operation to recover the prison was concluded without further injury to staff or prisoners in what were very difficult and dangerous circumstances is a great tribute to the skill and discipline of the prison officers.
"The House will, I am sure, wish to pay tribute to the considerable courage and professionalism displayed by the officers who did the job yesterday and all those in the prison service involved in bringing this incident, and indeed the recent disturbances in other prisons, to a successful conclusion. In particular, I wish to express our gratitude to the governor of Manchester prison, Mr. Brendan O'Friel, and his colleagues who have worked tirelessly to bring the disturbance there to an end with minimal danger to life. I also wish to thank the police, fire and ambulance services for their invaluable and unstinting help here and elsewhere. Among the very many I was able to thank at Strangeways last night was a representative of the Board of Visitors who had been there all day, and indeed someone from the Board of Visitors was present throughout the disturbance. I thank them all most warmly.
"Events at Dartmoor, Bristol and Pucklechurch show that the prison service is not loath to bring to a swift end disturbances of this sort. But circumstances obviously vary a great deal and

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different tactics have to be adopted in different situations. But our strategy throughout each of these incidents has been to regain complete control at the earliest moment consistent with incurring as few casualties as possible among both prison staff and prisoners. I believe that that was the right strategy here and that events have vindicated it.
"I greatly regret the sad loss of a prison officer who died after serving loyally during the disturbance, and the loss of life of one of the remand prisoners. I wish to offer, once again, my deepest sympathy to the families concerned. The Greater Manchester police have already embarked upon a major criminal investigation and I want to make it absolutely plain that those who commit criminal offences in this sort of incident must expect to face the full rigours of the law. There are already a number of very serious criminal offences—riot, violent disorder and affray—let alone murder and grievous bodily harm which are available in the sort of circumstances which we have seen at Manchester. But I want to make absolutely sure that the courts do have all the powers necessary and am reconsidering the possibility of creating a new criminal offence of prison mutiny.
"The House would not expect me to say that all we need to do now is wait for the outcome of Lord Justice Woolf's inquiry. Much has been done already, but there are other things we must do urgently. This incident has led directly to the loss of over 1,500 prison places at Manchester, at a time when we were making significant inroads into solving the problem of prison overcrowding, and will inevitably lead to difficulties in other prison establishments until the places can be regained. We are taking urgent steps to make available as many secure places as are needed.
"I have already made it clear that we are bringing forward the recruitment of 200 more prison officers to help establishments that are under particular pressure caused by these appalling incidents. We shall consider urgently whether there is any need for additional training of staff to deal with incidents of this sort. Over 3,000 officers have been specially trained in the past 12 months, and more are being trained. We have already placed orders for an extra £¾ million worth of equipment and clothing for the personal protection of officers.
"New prisons are designed so as to minimise the risk of events developing as they did at Manchester. But we need to consider what physical improvements can quickly be made to existing establishments. Officials are conducting an urgent review of structural and other means of preventing prisoners getting on to roofs in these old Victorian prisons. We will also examine how to make it easier for prison staff to get on to roof areas and the higher landings. Officials will also examine methods of locking doors and the issue and carrying of keys, the storage of inflammable items such as cooking oil, and how we can improve protection to kitchens, pharmacies and medical treatment rooms. There is then the physical
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protection of vulnerable prisoners. We must study whether that can be strengthened.
"We must also recognise that large numbers of prisoners in the same place at the same time can give rise to considerable risk. There is a difficult balance to be struck between restricting the numbers alowed to congregate, which can itself lead to trouble, and creating a constructive regime, which can make a contribution to the maintenance of control in prisons. But I am certain that this is something we must look at.
"The results of this work will be reported to me during the coming weeks. None of it pre-empts the outcome of Lord Justice Woolf's inquiry which is now in progress and we shall make available to him the results of this work. The House will recognise that vigorous action is now needed to try to prevent further disturbances'".
My Lords, that concludes the text of the Statement.
4.34 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Earl for repeating the Statement. Like everyone else, we are glad that this appalling criminal disorder at Strangeways prison has come to an end after 25 days. The initial riot involved about 1,000 out of 1,600 inmates, a figure which was progressively reduced as time passed.
On behalf of my noble colleagues I should like to join Ministers in conveying our appreciation and gratitude to the governor and prison staff for their patient and courageous conduct through this painful and difficult period. We should also like to pay our tribute to the police, fire brigade and other public services for their contribution. We are conscious that more lives could have been lost if they had not behaved thoughtfully and with restraint. It has become clear to everyone that the task of prison officers, more especially in Victorian buildings like Strangeways, is fraught with great problems, that there are very important lessons to be learnt and that the building of new prisons should be given more urgent priority by the Government.
In view of Lord Justice Woolfs inquiry, which I understand begins today, I shall put only a few brief questions to the noble Earl. First, may we assume that the Woolf inquiry will investigate the copycat outbreaks which took place in more than 20 prisons during the Strangeways siege? Furthermore, will the inquiry be looking at the implications of Fresh Start? Is it not the case that there would have been 30 more officers in post at Strangeways if Fresh Start had not been introduced there?
Secondly, it has been reported that the governor of Strangeways had planned to send in a riot team on 2nd April, the day after the violence erupted, but that a higher authority—presumably the Home Office—overruled that plan. Can the Minister confirm whether that is the case? Did a discussion on the question of physical intervention on the second day take place between the governor and Home Office officials, or even with the Home Secretary himself?
Thirdly, many people are concerned by the publicity which has been given to this criminal

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episode, especially on television. They argue that it has prolonged the agony and given a herioc aspect to criminals. Will the Woolf inquiry consider that aspect of the case?
Furthermore, it has been reported that the estimated cost of the damage caused during the 25 days of the siege could be as high as £80 million. Can the noble Earl confirm that and can he say whether Manchester Corporation will be expected to pay in whole or in part for that damage?
Finally, the main cause of unrest is the size of our prison population in the United Kingdom. We note with appreciation the actions which are proposed by the Government and which are listed in the Statement read by the noble Earl. There is a way in which the Home Secretary could reduce the population significantly and rapidly; namely, by reducing the number of remand prisoners by applying the 110-day trial deadline throughout England and Wales and by ending the 28-day custodial remand introduced four years ago in the Criminal Justice Act. Will the noble Earl please ask his right honourable friend to consider that possibility urgently? Such action need not necessarily await the result of the Woolf report. We on this side are of course anxious to co-operate with the Government in any reasonable measure to improve the prison service generally.
Lord Harris of Greenwich: My Lords, perhaps I may also thank the noble Earl for having repeated the Statement and once again say how much we are indebted to Mr. O'Friel and his colleagues for their cool and professional judgment throughout the entire dispute. I regret the extremely ill-informed and foolish attacks made upon Mr. O'Friel by some elements of the press.
Perhaps I may ask one or two questions arising from the noble Earl's Statement. First, the noble Earl rightly thanked the Greater Manchester police, fire service and ambulance service for their work. What reply will the Greater Manchester Police Authority receive from the Home Office to its request for financial support, given the high level of expenditure in which it has been involved during the dispute?
My second question concerns prison places. The noble Earl referred to the fact that the department has lost 1,500 places at Manchester. How many places have been lost at Pucklechurch, Dartmoor and Bristol? It is necessary to recognise the extent of the short-term crisis regarding prison numbers following the events at Strangeways.
Thirdly, the noble Earl referred in his Statement to the necessity to strike a balance between the need to restrict the right to congregate and the need to create a constructive regime at establishments such as Strangeways. Does he not recognise that when men are being locked up for 23 hours out of every 24, many of them living three to a cell and slopping out in really obscene conditions, the idea of further limiting the rights to congregate is not a serious practical possibility?
May I ask him, following from that, whether he does not recognise also that one of the most obvious
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problems which arose at Strangeways was the fact that there were over 1,600 inmates when there was a CNA of 970? Does he not recognise that so long as such conditions apply, there will be a substantial number of people living in grossly uncivilised conditions and, more than that, that this is the very tinder which is being provided for riots? These can always take place in establishments such as Strangeways, making it more necessary for the Government to consider what short-term steps can be taken to improve the overcrowding in prisons, which will be substantially worsened as a result of the number of prison places that have been lost?
Lastly, we all recognise that Lord Justice Woolf will be making a number of judgments on these matters, and some of us would prefer to await his report before necessarily associating ourselves with the suggestion that there was a shortage of prison officers.
Earl Ferrers: My Lords, I am grateful to the noble Lord the Leader of the Opposition and to the noble Lord, Lord Harris of Greenwich, for what they have said and particularly for conveying their expressions of gratitude to the governor and his staff, and also to the police and fire services. They have all been under very considerable strain, and I think we are all proud of the way in which they have carried out their task, which has resulted in this outbreak having been drawn to a conclusion without any loss of life at all, other than the two cases we know about. That is something for which we can all be immensely grateful.
The noble Lord the Leader of the Opposition asked whether Lord Justice Woolf would be able to investigate the copycat outbreaks which occurred after the original one at Strangeways. His terms of reference are to inquire into the events leading up to the serious disturbances in Her Majesty's prison at Manchester, and they have been subsequently widened to include the other outbreaks as well. Therefore the "copycats" will come under that heading and he will be able to address himself to those issues.
The noble Lord the Leader of the Opposition also asked whether there would have been 30 more officers on duty at Manchester had Fresh Start not been in place. I do not think it is possible to make a simple comparison like that, because the circumstances are different. What is a fact is that they were seven officers short of the total complement required. If I remember the figures correctly, out of a complement of 542, three were not in place at the time because they were not part of the establishment. That brings the number down to 539 and in fact there were 532; so that means the figure was only seven short of the correct number.
With regard to the noble Lord's suggestion about the governor wanting to take action, I have to point out to him that clearly in matters of this nature Ministers look to the operational managers of the prison service for guidance, and we continuously received advice from the governor of Manchester prison and from the Director-General of the Prison Service, who is himself an experienced former

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governor, on the best way to handle the situation. We though it right to accept that advice.
The noble Lord also said that it would cost £80 million to carry out the repairs, and he asked whether Manchester Corporation would be expected to pay for them. We shall have to wait and see exactly what the situation is. It will be necessary to take a structural survey of the place and assess the damage that has been done. Then we can find out what the cost will be and whether the building should be repaired. Until those steps have been taken, it is difficult to pontificate further.
The noble Lord, Lord Harris of Greenwich, referred to what had happened in Pucklechurch, Dartmoor and Bristol. In Dartmoor no places have been lost because although one wing has been lost, it will be possible to bring in another wing which was due: to be refurbished and was temporarily empty. Now that will be able to be used. In Manchester, Bristol and Pucklechurch some 2,000 places have been lost, and of course people will have to be accommodated elsewhere. It is desirable to get that accommodation made available as efficiently as possible, spread as best we can over various establishments.
I understand the noble Lord's concern about limiting further the rights to congregate. Of course, he is perfectly right to make that comment. The Statement says that my right honourable friend is going to consider the difficulties. If you give people more freedom and more congregating together results in this kind of action, it may be necessary to consider where and if such rights ought to be limited.
The noble Lord asked whether the Manchester police would be reimbursed. We are grateful to the police for their unstinting work over this. Where it can be shown that forces were undertaking work which could not be held to be within their area of responsibility—for example, holding prisoners in police cells—then the prison service will certainly be happy to consider meeting the costs involved. We have already been in contact with a number of forces, and no doubt the Manchester Police Authority, if they feel it is desirable for them to be reimbursed, will let us know what their views are. We shall then consider them.
4.45 p.m.
Lord Renton: My Lords, will the Home Office be considering whether, and to what extent, the copycat outbreaks in other prisons were prompted or aggravated by what the prisoners in those prisons saw on the television about the things that were happening at Strangeways?
Earl Ferrers: My Lords, I am quite certain that will be one of the matters to be considered, because it is in everyone's mind without question that the fact of being able to see this kind of thing happening on television does encourage others to carry out the same tactics. Therefore it will be necessary to address our minds to the question of how we can prevent that happening, but I need not spell out the complications.
Baroness Seear: My Lords, the noble Earl said in reading the Statement that there are other things we must do urgently. I am sure the noble Earl would agree that one of the great disadvantages of prison life is the extreme enforced idleness. Would he therefore also not agree that one of the things we must do urgently is to give very much higher priority to the establishment of effective and relevant training programmes, and to see that such programmes are used? In many cases there have been good training programmes; but their takeup, for a whole variety of reasons, has been woefully inadequate. If the noble Earl and his department believe this, are they prepared to back a high priority for training not only with words but also with sufficient and additional financial resources? I should declare an interest in asking this question because I am chairman of the Apex Trust, which is at the moment with the knowledge of and with some degree of support from the prison department launching new initiatives in training within prisons.
Earl Ferrers: The noble Baroness is perfectly correct. The infuriating part is that a great deal had been done in Manchester recently in order to give people more training, to get them out of their cells and to give them some work to do rather than just sitting confined. Now all that has been put back, but certainly we shall be considering that aspect.
Lord Elton: My Lords, I declare an interest as chairman of the Intermediate Treatment Fund. I also apologise to my noble friend for not giving notice of my question but that was in part due to the fact I took over as chairman only yesterday afternoon. In the wake of the demonstration of the dangers of a high prison population, will my noble friend ask his department to give all possible support to programmes designed to prevent young adults and juveniles offending? Furthermore, will he ask his department to consider relieving pressure on the remand wings by reducing the pressure of business in the Crown Courts? As a result of that pressure, people are kept waiting in remand wings while queuing for their cases to be heard. That could be achieved by removing the need for imprisonment for offences where it is not suitable; for example, first offences of handling goods of small value. I am advised that currently such cases occupy 8 per cent. or 9 per cent. of Crown Court business in the Greater London area.
Earl Ferrers: My Lords, I am grateful for my noble friend's observations. I congratulate him on the position that he has recently accepted. He need not trouble about not having given me notice of his question because, apart from one, no other noble Lord has, and therefore he is in good company.
The position in respect of remand wings is most important and in the Home Office we are considering ways in which to relieve the pressure upon them. The points raised by my noble friend will certainly be considered. At present we are trying to discover the pressures that are put upon prisons and prisoners which are exacerbated by the fact that they must go to prison in the first place. What has happened during the past few weeks will intensify that pressure.
Baroness Ewart—Biggs: My Lords, the Minister said that 2,000 cells were lost. Can he say whether the Government have considered using army camps to house offenders? Can he also say whether they are considering using the procedure used successfully by the noble Viscount, Lord Whitelaw, in 1980 following the national prison officers' dispute? He circulated the courts asking them to exercise restraint when sentencing. Can the Minister say whether in future it will be possible for the Prison Department to declare when a prison is full to capacity? Strangeways Prison was allowed to take 600 prisoners in excess of its normal capacity. Surely there is now a case for allowing prisons to declare when they can take no more prisoners.
As regards Lord Justice Woolf's inquiry, will its investigation into the underlying causes be taken seriously? We are the only European country which has had major disturbances in recent years; in 1986, 1988, 1989 and this year. Therefore, there must be a good reason for investigating the underlying causes as well as those relating to this particular riot.
Earl Ferrers: My Lords, I understand the noble Baroness's concern. It is not our present intention to use army camps for the simple reason that it is necessary to keep those who have been removed from prisons such as Strangeways in secure accommodation. Army camps do not necessarily provide that. We have not yet circularised the courts suggesting that they impose more lenient sentences and I cannot tell the noble Baroness whether that will be done. It is all very well to say that we should declare when a prison is full to capacity, but had such an attitude been taken we might have found that a number of prisons which were regarded as being full had to take additional people. The fact is that if the courts sentence people those people must be put somewhere. I do not wish to widen these questions into a debate on the prison system but I point out that it is our desire to provide more prison places and build more prisons—and that we have done—in order to meet the concerns expressed by the noble Baroness. However, if the courts sentence people to prison the prison system must take them.
Of course the inquiry into the underlying causes will be taken seriously. We are as concerned as the noble Baroness and all noble Lords about the causes of such riots. They are disgraceful, bad for the prison system and the country, and we wish to discover what can be done and the cause. Everyone knows that there is no simple answer but I assure the noble Baroness that Lord Justice Woolf's recommendations will be considered most seriously.
Lord Callaghan of Cardiff: My Lords—yes, I shall give way to the noble Lord.
Lord Hunt: My Lords, does the Minister agree that one of the unfortunate effects of the publicity given by the media to the recent events at Strangeways has been to give a totally false impression of the relationships which exist between prisoners and the prison staff? They displayed acts of violence and hatred by a small number of prisoners against the prison officers below. Will the Government consider ways and means of trying to correct that impression?
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I recall some excellent documentary films which appeared on BBC television, I believe, a year or two ago. They showed the correct picture, the normal relationships, the good order, the humane treatment and relaxed atmosphere obtaining in our prisons despite the appalling conditions which exist in some of them. The pendulum can swing too far giving an impression of total chaos that is barely held in check.
Earl Ferrers: My Lords, one of the difficulties with any story which reaches the media is that it it blown out of all proportion. What is shown on the screens is that which the transmitting companies concerned wish to show. The result is that it has the effect described by the noble Lord, Lord Hunt; it gives a bad impression of the relationship between staff and prisoners. That relationship must be good and, on the whole, it is good. The way in which we can recover the position must be considered and I am grateful for the noble Lord's suggestions.
Lord Callaghan of Cardiff: My Lords, I was happy to give way to the noble Lord who gave me such good advice many years ago when he was chairman of the Parole Board. One of the questions asked by my noble friend was not adequately answered. If, before the incidents at Strangeways, any of us had been told that it would take 25 days to recover one of Her Majesty's prisons, we should have regarded that with absolute incredulity. While it is right to concentrate on the fundamental underlying causes, should we not also look at the tactics which were followed? Perhaps we should do so, especially in view of the continued reference that has been made to the governor's proposal to recover the prison after two days. I am sure the Minister will agree i that the 25-day lapse of time will cause profound \ consequences within the prison service for many years to come.
Without prejudging the accuracy of the statements will Lord Justice Woolf's inquiry cover not only the events leading up to the outbreak but also the tactics that were followed afterwards? Public opinion will be deeply disturbed by the length of time taken and the tactics that were followed. I do not believe that public opinion will be satisfied unless there is a detailed examination of the reasons why the course was followed. I do not wish to create difficulties between the governor and the Home Office, but does the Minister not agree that it is the Home Secretary, regardless of the advice that he received, who must accept responsibility for the tactics that were followed? I urge that the matter should be looked into.
Earl Ferrers: My Lords, the noble Lord, Lord Callaghan, is entirely right in making that observation. He expressed the concern, which has been felt by everyone, that the events continued for a long time. From his experience as Home Secretary the noble Lord knows that my right honourable friend must accept responsibility.
Perhaps I may put this point to the noble Lord, because I think it is important. We all wanted to see it finished earlier. When an outbreak such as this occurs a great deal of thought is given to it. All kinds of different ideas are produced. Eventually one has

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to decide on a policy. The policy that was concluded was that one should proceed by a form of attrition to try to wear down people rather than go into immediate confrontation. Everyone knew that there was chaos within the prison. There may have been boobytraps and if severe action had been taken it was very likely that loss of life might occur. Had that happened, the noble Lord, Lord Callaghan, might have accused my right honourable friend of having taken precipitate and over-quick action. He might have done that and others might have done so.
The noble Lord will also bear in mind that when the disturbances at Strangeways first occurred there were 1,600 people there and it was necessary to evacuate many of them. The prison staff were largely taken up in dealing with that. There were 200 prisoners left in the building and the number of staff available to try to take on 200 prisoners would have been disproportionately small. As it was, in the end there was a ratio of staff to prisoners of about 25 to 1 to deal with the situation. At the beginning there had been a ratio of about 2 to 1.
Of course that will be considered very carefully to see whether different action in different circumstances might be taken in the future. I can assure the noble Lord that Lord Justice Woolf's inquiry will enable him to investigate those matters. He is required to look into the events leading up to the serious disturbance and the action taken to bring it to a conclusion.
Lord Annan: My Lords, perhaps the noble Earl will meet a point which follows from one raised by the noble Lord, Lord Callaghan. Is it not always right that the commanding officer—in this case, the governor of the prison —is the person who is responsible for the place and that one follows his judgment unless in the event it proves to be the wrong judgment, when one has to take action? However, in this case it seems clear that he was overruled and quite different instructions then began to be given.
In 1974 I analysed many of the disturbances that took place in our universities. It became clear to me from that analysis that in many cases, if an injunction had been taken out against the students who were in revolt, there would have been peace within the university in a very short space of time. However, if a disturbance is once allowed to continue, one is in grave difficulties because it generates publicity.
That is one reason why I ask the noble Earl whether he will make a particular point of bringing to the attention of his right honourable friend the Home Secretary the necessity to back the judgment of the man on the spot.
Earl Ferrers: My Lords, of course I shall inform my right honourable friend of the noble Lord's remarks. In the final analysis, as the noble Lord, Lord Callaghan, said, the responsibility is that of my right honourable friend the Home Secretary. He has advice tendered from the governor, the prison department and his officials and takes the advice in the light of his own views. He took the advice and he takes full responsibility for it.
Lord Hutchinson of Lullington: My Lords, does the Minister agree that one of the vital lessons to be drawn from this matter is the necessity for the Government to review their policy with regard to prisons? Should not they now abandon once and for all a policy that has been attacked month after month and year after year by many Members of this House; namely, the policy of keeping in the same institution those who have not been tried and not been sentenced alongside those who have been tried, convicted and sentenced? Is not that a policy that has contributed to many of the disturbances over recent years?
Earl Ferrers: My Lords, in the eyes of the noble Lord maybe it is. When a riot of such a nature takes place, everything is considered. But it is not all that easy suddenly to remove a whole batch of prisoners from one establishment and place them into another one which is already full. If this were a perfect world and one could construct separate establishments, doubtless the results would be better.
Lord Hailsham of Saint Marylebone: My Lords, does my noble friend agree that the true constitutional position is that responsibility to Parliament rests with the Home Secretary and him alone? However, if he were to take operational command of a situation such as that which we have all witnessed through the media, he would be a very unwise Home Secretary.
Earl Ferrers: My Lords, I am grateful to the noble and learned Lord for that observation. If my right honourable friend had overruled advice—I cannot say what that advice was—and been successful, everyone would have said, "How wonderful". If he had overruled the advice and been unsuccessful, he would have been roasted over a very hot fire indeed.
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that he has still not dealt with this very important matter? The allegation is made—and has been made several times in the media and the press—that the reason for the delay in settling this matter was not the action of the governor and his staff but actions by the Home Office, presumably by the Government, which restricted the operations that the governor and his staff wished to undertake? That is the question put to him and we have not had an answer. It was originally put by my noble friend on the Front bench at the beginning of questioning. Will the noble Earl now answer that question?
Earl Ferrers: I thought that I had answered it.
Lord Stoddart of Swindon: I do not think so.
Earl Ferrers: My Lords, the noble Lord, Lord Stoddart, has a happy knack of intervening as soon as I open my mouth and does not give me the opportunity to conclude what I intend to say. I was trying to tell him that when such an action occurs my right honourable friend takes advice from the governor and the deputy director of the Prison Service and acts upon that advice. There are all kinds of advice floating about the Home Office.

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Some of it even comes from Ministers of State in the House of Lords. However, it would be impertinent and imprudent if I were to single out which person gave which piece of advice to my right honourable friend. I can assure the noble Lord that he took his decision on the advice that was given.
5.9 p.m.
Lord Denham: My Lords, perhaps I could intervene at this stage. There is a rule recommended by the Procedure Committee and accepted by the House as a whole to the effect that the questions and answers on a Statement should last for 20 minutes from the end of the Minister's first reply to the Front Benches opposite. I think it is the general feeling of the House that those 20 minutes should be kept absolutely firm. Whether I misinterpret the feelings of the House on this occasion it is for the House to decide, but I think that we should be unwise to breach what has proved to be a good rule.

National Health Service and Community Care Bill
5.10 p.m.
Baroness Blatch: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee on the Bill. —(Baroness Blatch.)
On Question, Motion agreed to.
House again in Committee accordingly.
[The LORD AYLESTONE in the Chair.]
[Amendment No. 95 not moved.]
Lord Ennals Lord Ennals moved Amendment No. 95ZA:
Page 6, line 14, at end insert ("but the Secretary of State shall make no such order unless he has first held a ballot of all those working in the hospital or other establishment or facility and a majority voting in that ballot are in favour of the Secretary of State establishing a National Health Service trust.")
The noble Lord said: In moving this amendment I should like to speak also to Amendments Nos. 95A, 95C, 100E and 101EA, the last two being Scottish equivalents. The last vote in this Chamber showed a degree of concern about the Government's plans for NHS trusts which I believe that the Government would be unwise to ignore. The NHS is a service provided for the people. The resources that would be taken over by NHS trusts belong to the people. The NHS is a public service. If the Secretary of State is sincere and is not planning the privatisation of the service, in part, eventually or whatever, the NHS trusts must be responsive to the needs of the people.
It is essential that NHS trusts are approved by the Secretary of State only if they have the support of those who would principally be involved in their success. That includes the doctors, nurses, other professions, those who work within the health service, and the consumers. We are told that there are enthusiastic groups. It should not be for enthusiastic groups within a National Health Service to determine how things should be done.
The purpose of these amendments is to ensure that the views of those involved are taken fully into consideration and that decisions do not lie with a small group of enthusiasts—however enthusiastic they may be —be they managers or consultants. They must be able to create the same enthusiasm among both the staff and local community. If those enthusiasts are unable to carry their colleagues with them, it would be quite wrong for the whole hospital to cease to be under the control of the health authority.
Amendment No. 95B deals with staff. Amendment No. 95C deals with doctors and consultants. Amendment No. 95A deals with local community. In our Second Reading debate I asked the noble Lord, Lord McColl, who should decide. He gave the answer that the consultants should decide. It is in Hansard if he cares to look it up. He gave a straight answer: the consultants. Those are the only two words that he said in that reply.
Lord McColl of Dulwich: Will the noble Lord give way? I said that it should be management. It is a management decision. I believe that the decision should be made by those who manage the hospitals.
5.15 p.m.
Lord Ennals: I am sorry. It was a slip of the tongue. The noble Lord said, "the managers". Please forgive me for having misled the Committee. The noble Lord referred to managers and I thought that I had said "managers".
It cannot be right that managers should decide. It is the job of managers to manage. It would not be right for management to make a decision of such a fundamental resource, with massive capital assets and a huge staff fulfilling a great community responsibility. Such a fundamental decision cannot be for management alone. The Bill gives the responsibility to the Secretary of State. The amendment requires the Secretary of State to ascertain the views of those concerned before proceeding.
At col. 472 of the Official Report on Tuesday last I put these questions to the noble Baroness who was dealing with the amendment. I asked:
"Is there any single hospital which has expressed an interest in becoming an NHS trust in which any but a small minority supported the proposal? Is there a single hospital where there has been a ballot in which the majority of staff have said yes …? Is there a single hospital where there has been a community ballot?".
The noble Baroness said:
"I am aware of only a few ballots on the subject".
I said, "No, no", because I know of 80 ballots that have been conducted in different parts of the country. I shall not refer to all of them. The noble Baroness said:
"There are many individual members of the profession … who believe that our proposals are the way forward".
That is right. The noble Lord, Lord McColl, is here as evidence of that. She continued:
"We believe that we need to continue working with those people taking their advice and learning with them".
The emphasis is mine. It is not good enough simply because a few consultants or managers have said,

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"This is what we should like to do", that it therefore should be done.
I shall be very interested to hear how the Minister justifies the Secretary of State proceeding to establish NHS trusts if their is no support for them among the consultants and others who work in the establishment. At one stage the Secretary of State said that hospitals would be accepted for self-governing status only if a substantial number—he did not say a majority—of senior staff supported the application.
There have been many ballots. I am aware of 80. Some have been in hospitals and involved only consultants, some have involved all staff, and some have involved local communities. Some were based on questions which most of us would consider were leading questions. One example is, "Do you believe that so-and-so will be damaging and harmful?" If one puts such a question one is leading people to say, "Yes, we think that it will be damaging and harmful." Many ballots have been undertaken systematically. Some have been organised by district health authorities; some have been organised by medical committees and some by reputable polling organisations.Some ballots have been supervised by the Electoral Reform Society. Most had massive majorities against the proposals that we are discussing. I did not consider the ballot in Mr. Kenneth Clarke's constituency —which showed 97.1 per cent. against with 2.9 per cent. in favour of Nottingham University Hospital becoming an NHS trust —as being scientifically conducted. I do not say that that is the best example. However, even the most reputable ballots have rarely shown more than 20 per cent. of any group in favour. They include many of our great hospitals, including many of our great London hospitals.
Perhaps we may consider St. Bartholomew's. The result of a ballot among 167 consultants out of 201 at Bart's and two other hospitals in the same district, St. Mark's and Homerton, showed only 30 (18 per cent.) approved plans to reorganise the NHS. They had a ballot at Bart's specifically about self-government. A total of 91 consultants (75 per cent.) voted against going ahead with an application to become self-governing.
Other votes have taken place. We have previously referred to Guy's. I shall not do so again. However, the official ballot of the staff of West Lambeth Health Authority a couple of weeks ago produced a vote of 82 per cent. against the plan for St. Thomas's Hospital to opt out of authority control. The ballot was the first to be called by a health authority on hat issue.
I have lists of ballots that have been held. They cover different parts of the country. At the Royal Scottish National Hospital in Larbet, the figure was 94 per cent. against opting out. In the Borders General Hospital 831 staff (80 per cent.) rejected a proposal for their local hospital to become an NHS trust. I can refer to York, Halifax, Doncaster and communty ballots up and down the country. I referred to Nottingham. In central Manchester, 93 per cent. were against opting out. I could refer to the Central Middlesex Hospital and Lewisham Hospital.
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In Lewisham Hospital 90-2 per cent. of the staff were against opting out.
On the basis of such massive opposition by the staff, consultants, doctors, and other professionals, and by the community where there have been community ballots—of course with a handful of enthusiasts—it cannot be right that the Secretary of State should decide to proceed.
I know what the Government will say: that all these people have got it wrong, that they have all been misled by the doctors, and that the BMA with its terrible propaganda campaign has worked its influence. They will say that all these people, whether or not they work in the health service, have got it wrong. I suppose after general elections that we win or lose we say, "The people were wrong. They just did not understand our policy. We ought still to be in power." However, that does not wash. The amendments are in favour of genuine ballots organised on behalf of the Secretary of State so that he himself or the department can approve of the way in which the questions are put. I hope that some local authorities may do that in their local communities. If not, the health authorities should.
I believe that the enthusiasts for these particular changes must be able to convince their working colleagues of the wisdom of their recommendations. Until the Secretary of State can prove that there is real majority support at least among consultants, certainly among doctors and the rest of the staff and preferably among the community, he should not proceed. If those enthusiasts cannot convince their colleagues, they are like politicians who cannot convince the electorate at a general election and who afterwards say "The people were wrong". The people are always right. I beg to move.
Baroness Carnegy of Lour: I should just like to say—
Lord Winstanley: This is an all-party amendment and as one of the sponsors of it I thought I should make my position clear straightaway. The noble Baroness, Lady Cox, is not in her place but had she been there perhaps she could have spoken first from that side of the Committee.
Lord Ennals: The noble Baroness sent me a note to say that she was sorry that she could not be here but authorised me to say that she fully supports the amendment.
Lord Winstanley: I meant no discourtesy to the noble Baroness, Lady Carnegy, but as one of the sponsors of the amendment I thought I should speak first. It is right that the noble Baroness, Lady Hooper, should know that this is an all-party amendment which has all-party support. She should also be aware that on all sides of the Committee there are Members who believe that, properly carried out and with proper safeguards, the National Health Service trusts could be successful. There are also those who believe that there are great dangers in this unless it is done properly. That is our anxiety here.
I should like to refer to what I said on Second Reading. The noble Baroness will recall that I said

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at that time that I was in favour of the Manchester Royal Infirmary, from which I had just been discharged, opting for independent status. It had such monumental problems facing it that the only way of overcoming them was with an entirely new structure such as one of these trusts.
Where a teaching hospital is to become a National Health Service trust, I should like to see the university concerned becoming a trustee. That is not something on which an amendment has been tabled. However, I said that decisions as to which hospitals should opt for independent status were being taken largely by senior consultants. The noble Lord, Lord Ennals, said that those decisions are taken by managers, and I accept that. But it seemed to me that they were being taken largely by senior consultants.
I also said at that time that I thought that senior consultants were probably the best people to make those sort of judgments. I went on to say—and I repeat it now—that a new trust will not be a success unless it carries with it the confidence and support of all the people who will be working in it. There will not be that confidence and support if those people are bypassed in the decision-taking process. That is why I am strongly in favour of this amendment.
The noble Lord, Lord Ennals, has made much of ballots which have already been held. Perhaps he will forgive me if I say that I do not believe that they are relevant. What is relevant is the opinion of all those people when they genuinely understand that they are being consulted and what they say will have a bearing on the decision taken. When that decision is finally taken and the hospital opts for independent status under the trust, if all the people working there have been effectively and properly consulted and feel that they have had a say in the decision, that hospital will have an infinitely better chance of success than it would otherwise.
I also believe that once there is a statutory provision rather than the informal ballot to which the noble Lord, Lord Ennals, referred, the ballots will be conducted very differently. An amendment such as this would make those senior consultants and managers, who are so very important to the outcome of the decisions, approach their job in a slightly different way. They would make absolutely certain that at every stage they carried the staff with them. They would talk to them, consult them and persuade them. It will be impossible to persuade some. We should never persuade some Members of this Committee of some things even if we stayed here for ever because they can never be persuaded. However, I genuinely believe that, if it is in the interests of a hospital that it should be independently governed in this way, the senior consultants and managers should be capable of persuading the majority of the staff that that is the case.
I believe that they will be capable of so persuading them. Having persuaded them, they can then proceed. Then, when that hospital or group of hospitals is established as an independent trust, we shall have something which will be a going concern and will demonstrate the merit in this part of this Bill.
Baroness Carnegy of Lour: I apologise to the noble Lord, Lord Winstanley, that I attempted to speak before him. I am very glad that he spoke first because he has made half the points that I wanted to make. I wanted to answer the noble Lord, Lord Ennals, because I was bothered by his tone and the atmosphere which he seemed to be attempting to engender into the whole matter of changing the National Health Service.
I agree with the noble Lord, Lord Winstanley, that what is needed is to carry people along, persuade them, sell them the ideas and inform them. That is very important. I also agree with him that so far the ballots have probably been based on emotion, fear, misinformation or no information at all. We should not pay too much attention to them; but they show that we still have a long way to go.
However, I say to the noble Lord, Lord Ennals, that the very last way to achieve change in the National Health Service is to turn everything into a political, with a small "p", exercise. Amendment No. 95A suggests that those living in the community should be balloted as to whether there should be an NHS trust. I do not believe that that is practical. It is not possible to know what the community of a hospital is. Where I live there is a great criss-crossing between hospitals according to people's needs and preferences and the location of certain facilities. Therefore, I do not believe that a ballot of the hospital community would be possible or practical.
That does not mean that the people in the hospital who wish to create a trust will not have to do a great deal to carry along the community. Nobody wants to have a hospital which is resented by its local community. Where I live that process had begun and I assure the noble Lord, Lord Ennals, that it would not have been helped by the kind of ballot he suggested. He would not like that if he wanted NHS trusts, which he does not. He is trying to do all he can to stop them and his party does not like devolution down to the ground.
Lord Ennals: The position which I have taken is not that I wish to stop NHS trusts. I want them to be tried out and to see what are the advantages and disadvantages. However, I feel passionately about the right of people to be consulted.
Baroness Carnegy of Lour: I do not believe that anyone could conceivably try to set up an NHS trust without consultation and that consultation will have to be over a period of time. Much information will need to be given and the hearts and minds of people will need to be won. However, a ballot is no way to do that and I am sure the noble Lord knows that. I am not sure that he does want NHS trusts from the way in which he has spoken in the debate so far, but of course we take his word on that. The same situation applies to the amendments concerning ballots of doctors and consultants. It is not only doctors and consultants who need to be persuaded, but other people who work in the hospitals. I think I am right in saying that they are covered by other amendments, but everbody has to be persuaded. Their enthusiasm has to be engendered, as the noble Lord, Lord Ennals, said.

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To use the divisive process of canvassing opposite opinions, the status quo, the new idea and finally bringing it to a vote and saying that the majority will win is not a satisfactory way to start a new enterprise in a hospital. Those of us who have tried to change anything know perfectly well that that is not the way to do it. The point is well made that enthusiasm has to be engendered and people need to be persuaded. If these amendments are probing amendments then I would agree, but to incorporate any of them in the Bill would be extremely unwise.
With regard to obtaining the agreement of consultants beforehand to work under the new arrangements in the hospital, anyone who tried to get a hospital off the ground without that agreement would find that they had a hospital without consultants. I do not think that that is likely to happen, To include that in the legislation is slightly insulting to the new trust.
If we want NHS trusts, we need to try them and see whether they work. We have already heard from my noble friend on the Front Bench that that will be done in a gradual way and that the NHS trusts will learn from their mistakes. We must leave them to persuade the local community, the people who work in the hospitals—doctors, consultants, dentists and the consultants who will come in—that it is a good idea and that they should work with it. If they cannot persuade them, then the trust will not be put forward. If by chance any hospital tries to do so without the necessary agreement, I am sure that it would not be agreed that they should be a NHS trust.
I do not think that any of these amendments are at all wise. I hope that the Chamber will not be asked to vote on them, because we will not accept them.
5.30 p.m.
Baroness Phillips: I support the amendment, but perhaps for slightly different reasons. The Minister may refute this, but to me the lovely name of "National Health Service trust" is just another form of privatisation by the back door.
I recently spent a period in Westminster Hospital. I cannot speak highly enough of the consultants, the doctors, the nurses, the radiographers; all the people employed directly under the National Health Service. The weakness was in the cleaning services that had been privatised. During the four months that I spent in hospital nobody ever cleaned under the beds. If we did not clean under our beds at home we would be told of the terrible germs we were harbouring there. The weaknesses of privatisation were shown very clearly. I do not complain of the people who did the work; they were charming people, but underpaid. I checked what they were paid and found it to be £1.50 an hour. That is what they were paid to clean the hospital. That is the way this project will work.
The nurses and the doctors, perhaps not so much the consultants—I am not certain that they have all the answers—are the people in the National Health Service who must be consulted on this issue. They will know what this is about. There is no evidence that the Government, bearing in mind all their changes, really want something that will be part of
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a public service. It all sounds marvellous, but it is privatisation by a back-door method. It is therefore essential to consult everyone in the hospital.
The Government are not keen to do that because they know that they will not like the results. We heard the noble Baroness say that it should be tried somewhere. When that proposal was suggested in connection with another Bill it was turned down. The Government did not want that. Of course they do not want it; they certainly do not want to listen to the practitioners. We had the debate on student loans and heard some splendid evidence on behalf of the practitioners. The Government did not want to listen to it. There is no reason to suppose that they will listen now. At least let us put a word in. The introduction of these trusts is a major change. It is all very well to talk of carrying people along, but they can only be carried along if they are consulted.
If I were to pick on the weakness of the National Health Service, I should say that it was the management. When people change things they never change the administration—the people in mysterious offices whom we never see. They always change the people on the line, the people who are producing and creating the services. They are the important people. Make no mistake, the important people are those who give the real service to the patient. Also, why cannot we ask the patients? After all, they are at the end of the line; they not only pay for the service; they are the consumers. I support the amendment.
Lord Nugent of Guildford: The atmosphere which has been created in the country has certainly been unfair and unkind. The NHS trust is seen, as the noble Baroness, Lady Phillips, said, as privatisation by the back door. But the National Health Service trust will be just as much within the National Health Service as district hospitals. Nevertheless, one must face the fact that the general feeling is that the creation of the trust is a step towards privatisation and therefore there is opposition even though people do not really know much about it.
I hope I shall not bore the Committee by repeating a point I made earlier. Before any hospital can become a National Health Service trust it must engage in what my noble friend calls her "resource management initiative", which means establishing modern technological information so that the whole hospital is under a comprehensive management system plus modem cost accounting. That will take several years to put into practice.
I do not believe that any hospital will want to become a NHS trust—in other words self-governing—until it has a strong enough management and can see how it will work. If my noble friend was prepared to consider establishing the trust in two stages—that is to say, inviting all hospitals to engage in resource management initiatives—there would not be many who would say that they did not want to do it. After all, my noble friend has said that she will pay for it and make a lot of new money available for it. That is absolutely necessary because it will be expensive.
When that has been achieved in the hospital, management will have an enormously improved

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grasp of the management of the hospital and the use of resources. Much better service will be given to patients; resources will be that much better used. Management will be able to prepare a budget which it can submit to the Secretary of State with its annual demands or requirements for funds based on that subject. That would be a marvellous improvement over the present hit and miss situation.
I should have thought that all hospitals and staff would say, "Yes, we will go for that". It may be said "Let us make that the first objective"; every hospital having achieved that admirable position of greater strength can then decide whether it wishes to become a NHS trust. Some may and some may not. As I said, a good deal will depend on the locality and how local people feel.
Strong self-governing hospitals will be able to give much better service within the National Health Service than those which are entirely within the present structure. Whether they become self-governing or not, they will still be within the National Health Service. There is no question about that. I urge my noble friend to take on board the point that there is a strong feeling of opposition to these trusts which the noble Lord, Lord Ennals, has very effectively deployed. But we are not giving the concept a fair chance by putting the proposal to hospitals and to the country in the present atmosphere. Most of them do not understand what they are being asked to decide upon.
I urge my noble friend to go for the bull —resource management initiative—which would massively improve the whole management structure of the health service and make better use of our resources. Having achieved that, we can then go for national health trusts for those hospitals which wish to do so. I am sure that that is the way forward. If my noble friend did that opposition would melt away like snow in the sunshine. However, to go ahead and put forward trusts as an option for hospitals throughout the country is asking for trouble.
Lord Rea: Perhaps I may make an analogy with the education service and schools which opt out. The three bodies concerned are the school governors, who can be taken as equivalent to the management of a hospital; the staff of a school, who can be considered as equivalent to hospital staff; and the parents who can be considered the equivalent of the patients.
I happen to have knowledge of what went on at a school in Camden —the William Ellis school —where the chairman of the governors was keen on opting out. He explained to the governors that it was a good idea. However, the staff then held a ballot and came out strongly against the proposal. The governors thought again and decided against opting out because they felt that there was no point in pressing the move against a strongly opposed staff.
I feel that that is exactly the point that the noble Lord, Lord Winstanley, was making about staff working in hospitals which might decide to opt out. The staff have to be carried along in favour of the experiment. It could be that the experiment will be worth making but everyone working in the hospital,
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and preferably everyone who is to use the services of that hospital, need to be carried along too.
Lord Wallace of Coslany: I know for a fact that many area health authorities—in fact, the management of the health authorities —decided to opt out in principle without committing themselves completely. However, I want to make the point mainly in regard to district hospitals. District hospitals serve the community and are part of the community in which they are situated. People regard them as such. Apart from taking account of the views of staff, the people of the district should have their views considered too.
I have another point to make. Hospitals are served by many voluntary workers—the friends of hospitals and other organisations. Will those workers be consulted as well as the staffs of the hospitals? I have a personal interest in Queen Mary's Hospital, Sidcup. Way back in 1947 the Minister, Aneurin Bevan, decided that the old cottage hospital was not suitable for the district. I saw him in the Division Lobby behind me and within a fortnight he had completely changed the Government's point of view and the hospital came into the National Health Service. I hope it will remain there.
I know personally many of the voluntary workers at the hospital and I realise to the full the value of their work. These people are the community and they should be consulted after the facts have been put to them appropriately and in detail. They should be consulted because that is the democratic way of deciding. I believe that the majority of people connected with a district hospital would opt to remain in the health service as it is today rather than for a trust.
It is a different matter for the teaching hospitals, though there is no unanimous opinion in that respect. I understand that Guy's Hospital is definitely against the proposals and other hospitals hold the same view. Therefore I hope the Government will agree that there should be a degree of consultation, not on a narrow scale but on a wide scale so that the people of all shades of opinion have the proposal before them, make their decision, and, whatever that decision, so be it.
5.45 p.m.
Lord McColl of Dulwich: It is my understanding that this country is not governed by referendum. Therefore, I am puzzled as to why the Labour Party now seem to be so keen on having ballots. I have always understood that the Labour Party have never believed in ballots in various walks of life. Indeed why did the Labour Government not have a ballot in 1974 on the controversial issue of phasing out pay beds? So why is the Labour Party now so keen on ballots?
The noble Lord, Lord Ennals, said that he does not want to stop some hospitals from becoming self-governing, but he knows very well that if we do have to rely on ballots of all the people who work in those hospitals the ballot will go against self-governing. But why will the ballots go against the proposal? It is because of all the propaganda that

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has been put out. The propaganda is, first, that becoming self-governing is to leave the National Health Service. That is not true. The second—
Lord Winstanley: Before the noble Lord deals with his seccnd point will he accept that this is not a Labour Party amendment? The amendment is supported by all parties. It bears the name of his noble friend Lady Cox. What the Labour Party happens to think or does not think has nothing to do with me.
Lord McColl of Dulwich: I withdraw, it is not a Labour Party amendment but to me it has the stamp of the noble Lord, Lord Ennals. I continue with my second point. The propaganda is that NHS trusts are privatisation by the back door. That is not so. We do not want privatisation of our hospitals. We have seen in other countries what privatisation does. We have seen the situation in the United States. The average American citizen has twice as much surgery done on him or her as the average British patient. Is that what we want? I am a surgeon and I am all for surgery, but do we really want our citizens operated on to that extent? Of course we do not. We want them to have the right amount of medical care. We want to focus on need rather than on demand. That is essential. Thirdly—
Lord Peston: I am sorry to intervene and it is unfair to interrupt the noble Lord so often. However, I want to say how much I agree with him. Almost everybody I have spoken to in the hospital service believes that devolution to self-governing trusts is the first step towards privatisation. There is no shadow of doubt that that is right. The question that the noble Lord might address himself to, and then might ask his noble friend on the Front Bench, is whether the Government will put down an amendment to guarantee that what he says, with which I agree, about moving in the American direction cannot possibly happen. If one were to ask for some way of reassuring those who work in the hospital service that there is no danger that trusts are the first step towards privatisation, one would ask for precisely that. There is no doubt that what the noble Lord said is right. In my experience all over the country people are saying that the Government are playing games and that they want to privatise.
Lord McColl of Dulwich: It is not for me to answer on behalf of the Government, but the noble Lord should perhaps ask the Secretary of State for Health whether he has private medical insurance. He has not. He relies entirely on the NHS. I believe that the Government do not want to privatise the health service. Health considerations are different from any other walk of life. To go down the privatisation line is to end up with the British people having twice as much surgery, and we do not want that.
We want people to be involved in every district by sitting down and trying to work out what are the real needs of the people in that district. This Bill will go some way towards that. It certainly starts off the process. I am very pleased for any noble Lord to interrupt at any point because we can then hammer
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home the difficulties. The noble Lord, Lord Ennals, has had difficulty in grasping some of the more modem concepts of management in the NHS.
The third point which has terrified patients and the people of this country generally is having been told in very clear terms that when the money runs out the drugs will no longer be available. They have been told: " The drugs will no longer be available. I am sorry, you will have to die". That is a wicked, evil lie. The people who put that about in no uncertain terms have a great deal to answer for.
The only way we can progress is to allow those hospitals which are in a position to become self-governing, which have put in the necessary equipment and accounting systems and which have the necessary financial control to go ahead if the mangement is willing and keen to do so. I suspect that what will happen is that those who work in these hospitals will be very pleasantly surprised. They will find that they are paid a proper rate for the job. Those who work hard will be rewarded. They will like that because basically the British people believe that a labourer is worthy of his hire. Ballots will be totally out of place. We should reject this amendment.
Lord Henley: I start by giving an absolutely firm assurance to the noble Baroness, Lady Phillips, who is not in her place, and to the noble Lord, Lord Peston, who intervened, that, as my right honourable friend the Secretary of State has said on many occasions, there is absolutely no intention other than that the National Health Service trusts shall remain part of the National Health Service. That is not privatisation by the back door, and it is positively mischievous to suggest that it is.
I greatly welcome the conversion of the noble Lord, Lord Ennals, to National Health Service trusts. Having said that, the noble Lord then spoke about massive opposition to what he referred to as opting out. There might be massive opposition to opting out, but as I and my noble friends have told the noble Lord before, these hospitals are not opting out. The noble Lord and others and various bodies have suggested that they are opting out, but those are purely scare stories. I do not believe that such stories are worthy of the noble Lord.
We have already had a very full discussion on consultation. I strongly emphasise our commitment to there being full consultation on National Health Service trust applications. I made that clear as regards the previous amendment which the Committee considered and decided on. I also made it clear that such consultation will cover a wide range of interests; namely, the local community, health authorities, CHCs, local GPs and the staff of the potential trust.
To be successful an NHS trust will need the support and commitment of staff. As I have already said, we have made it clear that they will be consulted on applications. We expect those hospitals that are developing proposals for application to discuss their plans with staff. For the reasons so cogently set out by my noble friend Lady Carnegy of Lour, I do not believe that staff ballots are the best way to proceed. It is important to win the support of the staff for trust status and not to divide them by ballot.
Lord Peston: I apologise for interrupting the noble Lord once again, but that is a terribly important matter. Is he saying that when the Secretary of State receives the documentation he will ask the people seeking to become self-governing trusts whether they have consulted all the various groups which the noble Lord mentioned and ask them to say what the consultations have produced? Will the Secretary of State then make clear the basis of his response as regards all the documentation? Can the noble Lord also say whether he is aware of the fact that there are hospitals which are preparing at the moment to become self-governing trusts, which have drawn up all the necessary documentation and which cannot wait for the Bill to become law so that the application can be submitted? Such hospitals have no intention of consulting. Is he not aware of that situation?
Lord Henley: It is for the region to consider consultations. The applicants will forward their applications for National Health Service trust status to the region. It is for the region then to consult. It is then for my right honourable friend and the region to take into account the consultations to the extent that is necessary.
I shall read out part of the document Self Governing Hospitals: An Initial Guide which was published last year:
"Any successful proposal [for a self-governing hospital] would need to demonstrate that it carried the substantial commitment of those likely to be involved in the new management".
Once an application has been prepared the regional health authority,
"will seek the views of those with an interest, particularly the health authorities concerned, staff at the hospital, general practitioners, Community Health Councils and the local community".
Each application will be subjected to careful consultation, given the complicated service, management and financial implications involved.
Before I turn to the amendments themselves I shall deal with a point made by my noble friend Lord Nugent about trust status not being possible without more resource management. We are extending the resource management to all major acute hospitals and investing £78 million in this financial year. Undoubtedly that will help to improve management in all hospitals, but I do not believe that full resource management has to be in place before trust status can be considered.
The information base and management systems available at present are adequate for trusts to fulfil their functions. That is a judgment shared by senior NHS staff Moreover, strength of management systems will be a key criterion in deciding whether to grant trust status. On Tuesday my noble friend described the evolutionary approach. He said that at first there would be only a few dozen units drawn from many which have expressed an interest. As part of that evolutionary approach improvements will continue to be made. I believe that we have a sufficiently firm basis to allow that first wave of National Health Service trusts to go ahead.
The amendments before us propose that there should be ballots of various groups of people. Amendment No. 95A refers to local residents,
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Amendment No. 95ZA concerns staff of the potential trust and Amendment No. 95C refers to medical staff. Those groups will have to be consulted before a trust can be established. I do not believe that this will be sensible for a number of reasons. First, applications for trust status will include complex and detailed proposals on service, management and personnel matters. These cannot be sensibly reduced to a few simple words as the basis of a ballot.
Secondly, such an approach would effectively give powers of veto to one or more groups of people on an issue where they are not the only people involved. The comparisons that have been made by the noble Lord, Lord Rea, concerning which schools wish to move out of local authority management miss the point. In the National Health Service there is no single clearly defined group of people which is or could be in a position to decide the most appropriate future management arrangements for a particular unit. For example, potential patients could be said to have an interest but such people obviously cannot be identified as a group let alone balloted. Ballots of the local population might be considered as a proxy but it would be a poor one, as some local residents will not be treated at the potential trust while others who live outside the area will be.
Thirdly, there are practical difficulties with the proposals for a ballot. For instance, it is unclear what would happen if the various ballots produced different results. If local residents voted against the trusts and the staff voted in favour, should local residents who may have less information on the proposals than the unit staff be able to prevent a unit opting for trust status against the wishes of its staff? If not, who is to decide between the ballot results? What would be the position if, as may happen, the turnout of local residents was poor but that of the staff was high? Finally, who is to decide the wording of the question and how are we to ensure that it is seen to be fair to all parties?
Ballots would undermine the purpose of the very consultation process which I have described earlier and which we intend to take place. Those consulted would know at the end of the day that their views could be completely discounted by the result of a ballot of a completely different group and could well conclude that the consultation process was a sham. We have heard much about the need for democratic decisions on trust applications but I do not believe that allowing the decision on applications to be subject to the veto of any group would be truly democratic. Rather, it seems to me that these decisions should be taken by the Secretary of State, who is accountable to Parliament, in the light of the views of all those consulted, weighing up carefully the various views which they have expressed. I hope that the noble Lord will feel able to withdraw the amendment.
6 p.m.
Lord Ennals: This has been an interesting debate. I am grateful to all those who have taken part. I have agreed with so much that has been said. I say to the noble Lord, Lord Winstanley, and my noble friend Lord Rea that we are not referring to past ballots.

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Past ballots simply show an attitude of the public at that time. I do not suggest that they should be used as a means of determination. If those past ballots had shown a great enthusiasm I would perhaps be a little less worried. I would not wish to make ballots prescriptive in the sense that they would be part of the consultation process. I accept that the Secretary of State must himself decide. If ballots are to be used as a process of consultation, I would want the Secretary of State, a health authority or both together to determine the wording. Of course I want a ballot to be fair.
Lord Henley: This is important. I thought the noble Lord said that ballots should not be prescriptive and that my right honourable friend or whoever might be the Secretary of State would not be bound by them. My reading of the three amendments is that they are exactly that and that the Secretary of State would be bound by them.
Lord Ennals: If the noble Lord were to write into the Bill the words which he read out from the consultative document about the way in which consultation would be carried out, who would be consulted and how the decisions would be taken I should be very pleased. It may be that when I sit down he will say that he is prepared to write into the Bill what he has told me is just what the department intends to do.
Trusts are simply not proven. I would be impressed if, first, there were some system of evaluation. The Government have said that there will be no evaluation and that we must take it at its face value. Like it or not, that is what they are going to do. They are not going to evaluate. If there had been wholehearted support among those affected—doctors, consultants, patients and the community—that would be quite satisfactory. But all the evidence shows that there is great opposition. Perhaps it is based on inaccuracies. Perhaps the Government have not tried to persuade people. Perhaps they have tried and failed. Perhaps the enthusiasts have not tried. I agree with the noble Baroness, Lady Camegy of Lour, that a job of persuasion has to be done. All I have shown is that at the present moment, rightly or wrongly, there is a great deal of opposition.
I would be further impressed if the Secretary of State were prepared to make a statement in advance, as suggested by the noble Lords, Lord Hunter and Lord Carr, in an earlier amendment. The Government say no to all the proposals we have put forward. I would be happy if the noble Lord would give me an assurance that he will write into the Bill the wording that he read out about the method of consultation. At the present time none of the hospitals is advanced enough, as the noble Lord, Lord Nugent, pointed out, to go into this business. The experiment has not been tried. It is said that another two or three years —the noble Lord said four years—will be required. Perhaps he is exaggerating. I do not know. I would be delighted to see the initiative extended to other authorities.
This negative approach and this insistence that regardless of the views of consultants, of the other
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doctors and staff and of patients this will be done because it is in the wording of the Bill is something I shall not accept. I shall not withdraw the amendment unless the noble Lord tells me that he will put the words which he read out into the Bill itself.
Baroness Carnegy of Lour: Before the noble Lord sits down, does he not agree that this process of winning the hearts and minds of people to the idea, which is what it will be—he has accepted that the idea is a good one and that therefore this is a quite legitimate thing to do—may involve a series of meetings? It cannot be set down in legislation. Some of the hospitals that are thinking of becoming self-governing trusts are quite small. Some are cottage hospitals. That might happen in one meeting. Perhaps the vast majority would not be in favour of it but a considerable majority might. Then there would have to be a decision on whether it should wait and have another meeting. In a larger place it might take a long time to persuade people. I am not sure how things worked in the noble Lord's department when he was Secretary of State but anyone who has run a smaller and less important organisation knows that one achieves change only through consultations and talks and by seeing what other people are doing and receiving information from other places. That is not susceptible to legislation.
The noble Lord has not answered my point. Would not a ballot in a hospital which was narrowly won —I do not agree with my noble friend Lord McColl that ballots would necessarily go against the proposal —be immensely divisive and damaging to the hospital? That would be a very bad idea. I hope that the noble Lord will not press the amendment.
Lord Ennals: Neither I nor other noble Lords who have spoken would have put forward the idea if the Government had indicated that they were prepared to have effective consultation and be ready to take their time. I did not say that I was either against or in favour of NHS trusts. The case is unproven. I do not know whether or not this will be helpful to the health service. That is why I have been so involved over long months in seeking to persuade the Government that they should evaluate proposals before they start changing—whether the number is 36, 78 or 279—across the country. If the noble Lord will give an assurance that he will write those words into the Bill, I shall withdraw my amendment. Otherwise, I shall certainly proceed.
Lord Henley: The noble Lord will understand that I will not give him an assurance that those words will be written into the Bill. But I shall repeat, if the noble Lord would like it, the assurance I gave about the commitment of the Government and of my right honourable friend to have consultation. Would the noble Lord like me to repeat it now?
Lord Ennals: No, I have read it several times.
Lord Henley: The noble Lord says that he has read it several times. I repeat that assurance and that commitment. There will be further guidance as well,

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which will strengthen that. I hope that in the light of what I have said the noble Lord will feel able to withdraw the amendment.
6.8 p.m.
On Question, Whether the said amendment (No. 95ZA) shall be agreed to?
Their Lordships divided: Contents, 65; Not-Contents, 104.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kilbracken, L.

Ardwick, L.

Kissin, L.

Birk, B.

Listowel, E.

Blackstone, B.

Llewelyn-Davies of Hastoe, B.

Bonham-Carter, L.

Bottomley, L.

Lloyd of Kilgerran, L.

Callaghan of Cardiff, L.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

Mayhew, L.

Meston, L.

Cledwyn of Penrhos, L.

Molloy, L.

Cocks of Hartcliffe, L.

Murray of Epping Forest, L.

Cox, B.

Nicol, B.

David, B.

Oram, L.

Dean of Beswick, L.

Peston, L.

Ennals, L.

Phillips, B.

Ewart-Biggs, B.

Pitt of Hampstead, L.

Ezra, L.

Ponsonby of Shulbrede, L. [Teller.]

Falkender, B.

Falkland, V.

Rea, L.

Gallacher, L.

Robson of Kiddington, B.

Galpern, L.

Russell, E.

Graham of Edmonton, L. [Teller.]

Serota, B.

Shackleton, L.

Grey, E.

Stallard, L.

Hampton, L.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Thomson of Monifieth, L.

Hatch of Lusby, L.

Tordoff, L.

Houghton of Sowerby, L.

Turner of Camden, B.

Hughes, L.

Underhill, L.

Hylton, L.

Wallace of Coslany, L.

Jacques, L.

White, B.

Jay, L.

Williams of Elvel, L.

Jeger, B.

Winstanley, L.

Jenkins of Putney, L.

Young of Darlington, L.

John-Mackie, L.

NOT-CONTENTS

Adrian, L.

Crickhowell, L.

Aldington, L.

Dainton, L.

Alexander of Tunis, E.

Davidson, V. [Teller.]

Arran, E.

Denham, L.

Balfour, E.

Derwent, L.

Bauer, L.

Elliot of Harwood, B.

Belhaven and Stenton, L.

Erroll, E.

Beloff, L.

Ferrers, E.

Belstead, L.

Fraser of Kilmorack, L.

Blatch, B.

Gardner of Parkes, B.

Boyd-Carpenter, L.

Gisborough, L.

Brabazon of Tara, L.

Greenhill of Harrow, L.

Brookes, L.

Hailsham of Saint

Brougham and Vaux, L.

Marylebone, L.

Butterfield, L.

Hemphill, L.

Caithness, E.

Henley, L.

Campbell of Alloway, L.

Hesketh, L.

Carnegy of Lour, B.

Hives, L.

Carnock, L.

Holderness, L.

Clanwilliam, E.

Hooper, B.

Coleraine, L.

Howe, E.

Colwyn, L.

Killearn, L.

Constantine of Stanmore, L.

Kimball, L.

Cork and Orrery, E.

Knutsford, V.

Craigavon, V.

Lauderdale, E.

Cranbrook, E.

Lloyd of Hampstead, L.

Crathorne, L.

Long, V. [Teller.]

712

Lucas of Chilworth, L.

Renwick, L.

Luke, L.

Richardson, L.

Lyell, L.

Romney, E.

McColl of Dulwich, L.

St. John of Fawsley, L.

Mackay of Clashfern, L.

Saltoun of Abernethy, Ly.

Mancroft, L.

Sanderson of Bowden, L.

Merrivale, L.

Shannon, E.

Mersey, V.

Stodart of Leaston, L.

Mills, V.

Strange, B.

Monk Bretton, L.

Strathclyde, L.

Monson, L.

Strathcona and Mount

Morris, L.

Royal, L.

Mottistone, L.

Strathmore and Kinghorne, E.

Mountevans, L.

Mowbray and Stourton, L

Swansea, L.

Munster, E.

Swinfen, L.

Murton of Lindisfarne, L.

Terrington, L.

Nelson, E.

Thomas of Swynnerton, L.

Nugent of Guildford, L.

Thurlow, L.

Onslow, E.

Trefgarne, L.

Oppenheim-Barnes, B.

Ullswater, V.

Orkney, E.

Vaux of Harrowden, L.

Polwarth, L.

Walton of Detchant, L.

Prior, L.

Whitelaw, V.

Quinton, L.

Wolfson, L.

Reay, L.

Young, B.

Renton, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.16 p.m.
[Amendment No. 95A not moved.]
[Amendment No. 95B had been withdrawn from the Marshalled List.]
[Amendment No. 95C not moved.]
Lord Hunter of Newington Lord Hunter of Newington had given notice of his intention to move Amendment No. 95D:
Page 6, line 14, at end insert:
("(lA) Three months prior to making an order under subsection (1) above the Secretary of State shall —

(a) publish a document setting out the reasons for establishing each NHS trust and including such detail as is required under this section;

(b) seek the views of the relevant community health council and any other bodies or persons he thinks appropriate, on the document published under (a) above;

and he shall take into account the views expressed before making an order under subsection (1) above.").
The noble Lord said: I have been interested in what the Minister said on various occasions during this afternoon's debate. In my view if he thinks about what is proposed, and what he said, he may well wish to bring forward a provision to clarify the situation. However, if not, I shall be inclined to bring forward a proposal on Report concerned with the Secretary of State ensuring that this was published —that is, all this information about which the Minister has told us—but not that he himself should publish it.
[Amendment No. 95D not moved.]
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 95E:
Page 6, line 19, after first ("directors") insert ("including within the latter a specified number of health care professionals employed by and providing clinical services to the trust").
The noble Lord said: In previous debates in this Chamber, and in Committee, I have made it clear that I do not oppose the principle of the formation of NHS trusts, subject to very specific safeguards

713
which I believe are required to control their operation. Indeed, if it were the case that their structure, function and governance were to prove to be in some respects comparable to that of the old teaching hospitals under boards of governors, then there are many aspects about the trusts which I would strongly favour. I am also very much in favour of value for money in the health service, of the introduction of better accounting systems, of quality control and assurance and of the resource management initiative.
As I see it, the three main problems about NHS trusts—self-governing hospitals—are those to which this group of amendments relate. The chairman of such a self-governing trust is to be appointed by the Secretary of State. That is all well and good. However, there are to be a group of executive directors and a group of non-executive directors. As the Bill stands, Clause 5 and Schedule 2 make it clear that employees of the trust, employed in whatever capacity, cannot be appointed as non-executive directors.
However, in Schedule 2 there is a clear specification that in those self-governing trusts which have a major clinical teaching and research commitment there can be a non-executive director appointed by a university. I would hope to see two such university members in order to represent the interests of that university in relation to the teaching and research role of the trust. It is made clear that they shall not be regarded as employees for this purpose.
One of the anxieties that I know is shared by myself and many other members of our profession and the other health caring professions is on the requirement that members of the medical, nursing and other caring professions employed in the National Health Service cannot be appointed as non-executive directors of such trusts. That requirement makes it theoretically possible at least that the entire board of directors could lack a medical, nursing or other professional member employed within a hospital or authority governed by the trust.
I appreciate that in an earlier debate in Committee the noble Lord, Lord Jenkin of Roding, explained his reasons for opposing earlier amendments which we set out which proposed that doctors, nurses and other health care professionals should be specified as members of health authorities. He said that this was because in his view it could result in a potential conflict of interest between providers and purchasers. In self-governing trusts no such conflict of interest could arise, because the self-governing hospital trusts are to be providers.
Hence this group of amendments relates to a single objective: to withdraw the provision within the Bill which would exclude all health care professionals employed in a self-governing trust and its associated hospitals from the opportunity of being appointed as non-executive directors. I beg to move.
Lord Rea: The amendment is similar to the group of amerdments moved on the first day in Committee relating to the constitution of the various levels of
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the health authority. There is no point in going over these at great length.
I remind your Lordships of what the noble Baroness, Lady Seear, said. She pointed out that it is important when making management decisions for professionals who are actively involved and expert in the services provided to the board to be there with power to argue or discuss on an equal basis with the administration what is to be carried out in the institution. It is only through that action that decisions will be obtained that have a proper chance of being carried out and are based on reality. Otherwise, there will be erroneous decisions that are not likely to be correct. I strongly support the amendment.
Lord Richardson: For 16 years I was a non-executive medical member of the teaching hospitals and governors before they were abolished. I find it difficult to imagine how they could possibly come to the conclusions that would satisfy the non-medical governors if the experts were not present and if those experts did not have local significance as well as medical eminence. I strongly support the amendment.
Lord Ennals: We on these Benches totally support the amendment. I point out to your Lordships the phrase:
"number of health care professionals".
We are not talking just about doctors; they could be nurses, occupational therapists or physiotherapists, but the concept of the professional should be involved. I totally support the amendment.
Baroness Carnegy of Lour: The noble Lord, Lord Richardson, knows everything there is to know about the subject. I am sure that we all appreciate and can imagine that it would be impossible for health service trusts to take decisions which would involve expert opinion without taking that expert opinion.
However, this kind of body takes greater account in many ways of expert opinion if the person is present and makes a professional input. Everybody will listen to it and take more account of it than if a representative is there all the time when sometimes he or she knows all about the subject and sometimes is doing it at second hand. I admit that my own experience was not in the health service. It was on boards running several big further education colleges, but it is not completely dissimilar. The principals of those colleges are not members but are in attendance. Very often principals prefer that because they feel that their opinion carries greater weight than if they are members. I can imagine a health service trust and the professionals getting far better value from the exchange of opinions if those experts come along when their area of interest is considered.
I disagreed with the noble Baroness, Lady Seear, when she made the point. She did so persuasively. She has the experience and holds the opposite view. But that is my experience. I hope that the noble Lord, Lord Walton, will take this point on board. It would lessen the influence of the professionals if they simply had a representative there. Everybody

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always thinks it best to have a representative present. They think, "That's all right, we shall be there". However, in reality it does not work that way with these bodies. I am inclined to hope that the provision stays as it is and that the professionals are brought in, as of course they must be.
Lord Nugent of Guildford: I disagree slightly with my noble friend Lady Carnegy, with whom I usually agree. I have been privileged to be chairman of a small religious hospital for several years. We formed a board with three consultants on it from the start who are enormously useful. They are high-powered people by their nature as consultants.
I feel that in the whole of this great development which my noble friend contemplates it is vital that leading consultants should be prepared to give time and energy to the management of trusts or to the hospitals which will not be self-governing. At present the management has a great problem in dealing with consultants who are able, high powered and extremely difficult to manage. If one can get a few of them on the board it makes it a little less difficult to deal with the others. That has certainly been my experience.
I hope that my noble friend will be able to give a helpful answer to the noble Lord, Lord Walton, who moved the amendment so cogently. It touches on an important point in the future development of the health service. Consultants generally should give some of their great abilities to the management of the service as well as to the vital part that they play on the medical side.
Baroness Carnegy of Lour: Would my noble friend say that to have one or two consultants as members of this small body is preferable to having them as assessors? I am interested that he has found this to be so. I understand what he says very well, but he has heard the point that I made.
Lord Nugent of Guildford: I speak from experience, although it is narrow experience. We have three powerful personalities who have been extremely helpful. They do not always agree with me, nor I with them; but the total outcome is that we have got things right as we have gone along. We have made major developments on this line that on a much larger scale the NHS trusts will have to make with modem management, computer systems, cost accounting and so on. We have to live with this with some difficulty. I hope that my noble friend will be able to give a helpful answer.
6.30 p.m.
Lord Walton of Detchant: Before the noble Baroness responds, I wish to take up a point that was raised by the noble Baroness, Lady Carnegy. These amendments are very carefully phrased and they do not seek to have a representative of the health care professions on the group of non-executive directors. They simply propose that the present provision in the Bill which excludes them from membership should be removed.
Baroness Hooper: Perhaps I should start by confirming that we are speaking to Amendments Nos. 95E, 95F, 100A, 100B and 100BA. Does the noble Lord, Lord Dainton, wish to speak?
Lord Dainton: I should like to speak on Amendment No. 100BA. This matter follows on rather nicely from the previous point. It is inconceivable to me, and it certainly would be inconceivable to the chairman of my special health authority at Hammersmith, that there should not be a medical man as a director in some form or another of the trust, were it to become a trust, for the simple reason that he handles a large budget. He has his own cost centre, which is extremely important. How he spends his budget is of vital importance financially to the operation of the hospital.
However, my Amendment No. 100BA relates to the question of persons who may be appointed executive directors of those NHS trusts which have responsibility for teaching hospitals. Clause 5(2)(a) makes it clear that executive directors must be employees of the trust. I underline the word "must". I think that has been explained. However, non-executive directors cannot be employees. Paragraph 3(2) of Schedule 2 to the Bill, to which all these amendments refer, underlines the latter point by stating that a person paid by a university, but who holds an honorary contract with the trust, must nevertheless be deemed not to be an employee of the trust and therefore may not be appointed an executive director of the trust.
The Committee may regard that point as being somewhat trifling and of little practical significance, and a matter that is of only academic importance in both meanings of the word. However, in some teaching hospitals some of the full-time academics are chiefs of service. They come into the category that I spoke about at the beginning. In one hospital, Hammersmith, almost every one of them is a chief of service. If there were to be a trust established at Hammersmith herefore, it is inconceivable that the person best suited to be an executive medicaldirector of the trust would not be one of those full-time academics. In my view, that they should be disbarred from that post is not only plainly ridiculous but would work to the great disadvantage of the trust and the operation of the hospital.
The effect of this amendment, if passed, would simply be to remove that barrier. I should explain that the problem has already been raised by the Standing Committee on the National Health Service and Community Care Bill in another place by Sir George Young. That committee tabled an amendment at the Report stage, but because of lack of time it was not discussed. In those circumstances this amendment, or some equivalent, seems essential if we are not to become the victim of a ridiculous situation. I hope that at the very least I can gain an assurance from the Government that they would be prepared to remove this obstacle to the appointment of a full-time academic clinician as an executive director of an NHS trust, where such a person is clearly the most suitable.
Baroness Hooper: I have listened with great care to the arguments on these amendments about the

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position of health care professionals and academics in relation to non-executive and executive membership of National Health Service trusts.
I shall deal first with Amendments Nos. 95E and 95F standing in the name of the noble Lord, Lord Walton of Detchant. The Government believe that health care professionals have a vitally important role to play on the board of directors of trusts. To that extent we are totally in agreement. However, we believe this can best be achieved through their appointment as executive directors, not as non-executives. We have made clear that in the majority of cases the executive directors will include a senior nurse manager and medical director, and we shall provide for this in regulations. This will ensure that the view of the professionals is properly heard on the board. That assurance was given in the White Paper and in the course of debates in another place and it is referred to in our Notes on Clauses.
Further, the appointment of health care professionals employed by the trust as non-executive directors would blur the distinction between executive and non-executive directors, which we consider to be important. In appointing non-executive directors we and regional health authorities, which will also be involved, will be looking to appoint people who can bring different skills and experience to bear on the complex job of managing a trust—my noble friend Lord Nugent emphasised that point—in the same way as companies do when they appoint non-executives. We shall also expect at least two of the non-executives to be drawn from the local community and thus to provide links between the trust and the locality. These very important aspects of board membership would be lost if the board were to consist largely of health care professionals, important and valuable as their input is.
As in the case of the district health authorities and regional health authorities that we discussed previously, we have made clear that the non-executives will be appointed for the personal contribution they can make to the management of the trust and not to represent any particular interest group. Again we are at one with the noble Lord, Lord Walton, on that. I do not wish to suggest that any professionals appointed as non-executives would not always act with the best interests of the trust in mind, but there must be a concern that they would be seen as representing particular professional interests.
I do not believe that the proposal contained in these two amendments would strengthen the management of trusts. Rather it may weaken it by depriving trusts of the variety of skills which they will need at board level. While I understand the noble Lord's concern, I hope that, in the light of the points I have made, he will not press his amendments.
Turning next to Amendments Nos. 100A, 100B and 100BA, I am much closer here to the noble Lords, Lord Walton and Lord Dainton, although I still cannot fully endorse their amendments. The Government are firmly committed to improving collaboration between the National Health Service and universities. We have already touched on this
718
matter in our discussions. I hope to explain how we intend to act on this commitment in relation to NHS trusts in more detail when we come to Amendment No. 97 shortly.
For the present, let me stress that membership of NHS trusts will take account of their teaching role where appropriate. Each teaching trust will contain a non-executive member drawn from the university or medical or dental school. This member could also be an employee of the trust —the Bill contains special provision to allow for this. I believe it is right that this role is non-executive, so that its holder speaks clearly with a university voice.
Moreover, the Bill allows university employees who are also employed by the trust to be appointed as executive members of the board. We accepted amendments in the other place to ensure that this possibility was not inadvertently precluded—the amendment of my honourable friend Sir George Young may not have been discussed but it was accepted by the Government—for any potential trusts where senior doctors are primarily employed by the medical school or institute concerned. In the example mentioned by the noble Lord, Lord Dainton, I assume that although there was full-time employment by the university, some kind of honorary contract also existed with the unit.
There are therefore two routes—executive and non-executive—by which the voices of those having split contracts with both NHS trusts and medical schools can be heard on the NHS trust board. That is certainly our aim. I shall consider carefully what is now provided in the Bill as a result of amendments in another place and what has been said today, and if necessary I shall bring back suitable amendments at a later stage to make the position absolutely clear if it is felt that it is not.
The Bill does not prevent full-time university employees who are not also employed by the trust from filling other non-executive places on the board in a personal capacity. The criterion in such case will, as always, be finding the best person for the job. On that basis I hope that the noble Lords will be reassured and will feel able to withdraw their amendment.
Lord Walton of Detchant: In the light of the assurances given by the noble Baroness, and in particular in the light of her comment to the effect that the executive directors shall include by regulation a specified number of health care professionals, I am delighted to withdraw the amendment.
I am very pleased to hear that a university employee may be appointed as a non-executive director. That might even —and I speak surrounded by four past university vice-chancellors—on occasion be a vice-chancellor. I am therefore delighted to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 95F and 95G not moved.]
[Amendment No. 95H had been withdrawn from the Marshalled List.]
Clause 5 agreed to.
Lord Hunter of Newington Lord Hunter of Newington moved Amendment No. 96:
After Clause 5, insert the following new clause:
("Hospital Incentive Fund.
x2014;(1) The Secretary of State shall establish a fund to be known as the Hospital Incentive Fund ("the Fund").
(2) The purpose of the Fund shall be to encourage hospitals to develop new approaches to more effective management of hospital resources and to provide enhanced care for patients.
(3) The resources of the Fund shall come partly from hospitals and partly from the Secretary of State who shall contribute an amount equal to that contributed by hospitals up to a limit of £250,000 in each case.
(4) The provisions of this section shall apply to all hospitals including those falling within NHS trusts and authorised to hold a budget.").
The noble Lord said: It is obvious that the question of the trusts is a complicated business. One wonders what opportunities exist for modest initiatives in the health service to make employees feel that their own efforts can achieve something and also to help them change to meet the needs of the population.
This is being sentimental, but I remember well when we took over the Poor Law hospital in Dundee in 1948. As a result of all the help that we received, in 10 years' time we had a hospital which was worthy of the name.
It is suggested that there should be a hospital initiative fund. Such a fund has already been introduced in Canada with great success. Any hospital could apply to do something which it considers important in its own circumstances although it may be modest in relation to the formation of hospital trusts.
A few moments ago in connection with a previous amendment I cited the example of the hospital near a motorway which decides to change its role from that of simply a district hospital to one with a very heavy responsibility for accident and emergency surgery. It is suggested that the fund should be established and that it should be known as the hospital incentive fund. It should be open to all hospitals to encourage them to develop new approaches to more effective management or enhance the care of patients. The provision should apply to all hospitals, including those falling within trusts and authorised to hold a budget. Perhaps the Government might like to give the idea some consideration. I beg to move.
Lord Butterfield: Before the Minister replies I should like to say that I believe that this kind of fund could be of immense help, particularly to the young managers who will have to emerge to help the trusts forward. My only concern is whether what I take to be a total of £500,000 each year will be enough when divided between the total number of hospitals which might apply. I should like to support the noble Lord, Lord Hunter of Newington, and his proposals.
Lord Kilmarnock: I also should like to support the amendment. In times gone by my party had a commitment to a National Health Service development fund, with the somewhat ambitious sum of £500 million. Various National Health
720
Service units would submit bids to the fund for the ideas that they put forward. On reflection I believe that the scheme proposed in the amendment is rather better because it is related to the individual hospital. According to my calculation, if 260 acute hospitals all took up the offer, putting their share on the table and requiring the Secretary of State to put his share on the table, the operation would be a great deal cheaper. It would also be more closely related to the needs of the individual hospital. I believe that that is an improvement on our idea.
The only query that I have relates to the fact that the noble Lord, Lord Hunter, referred to all hospitals. I am not sure whether he included small hospitals such as community hospitals and cottage hospitals. If not, I believe that some provision should be made for them, possibly at a lower rate.
6.45 p.m.
Baroness Blatch: I listened with care and interest to the points made by the noble Lord, Lord Hunter, and the support that he enjoyed from the noble Lords, Lord Butterfield, and Lord Kilmarnock. I note the points that he made including that relating to the experience in Canada.
The Government share the objectives of making the most effective use of hospital resources and improving patient care. They underlie the changes in the Bill and those already under way in the National Health Service. Perhaps I may give a small number of examples of the type of initiative already in hand.
Many Members of the Committee will be familiar with the resource management systems which will be introduced into large acute hospital sites by 1993. Those systems focus on organisational development and the involvement of doctors and nurses more fully in the management process. We are investing £78 million in resource management in the present financial year.
We are also investing in management development, and £60 million has been allocated in 1990-91 to help authorities to recruit and train staff. All regional health authorities are preparing integrated management development programmes. In addition the NHS Management Executive, the Institute of Health Services Management, the Open University and the NHS Training Authority are also playing their part.
In addition the National Health Service Management Executive has embarked on an ambitious programme to improve communications within the NHS. A series of regional meetings with chief executive Duncan Nichol has provided a strong launch pad for this exciting new development.
I hope that those examples demonstrate our commitment to improving quality and standards and our willingness to invest in them. Of course it is not a task only for central government. Health authorities often pioneer such developments themselves. We do our best to spread the results throughout the NHS.
I am not convinced that a special fund is essential to ensure that those developments take place. The Government already have power to fund

721
developments such as resource management and there is nothing to prevent health authorities using their funds to support the innovative projects suggested by the noble Lord. Indeed there must be a theoretical danger that the existence of a central fund, far from acting to stimulate initiative, could hinder locally inspired and funded projects. Our proposals as a whole are designed to give local managers and doctors every incentive to take forward innovation and quality at the local level. I believe that they will rise to the challenge.
In putting the amendment the noble Lord, Lord Hunter, made a very important point. I hope that I have been able to reassure him that we share both the aims and objectives of the amendment. However, it is the view of the Government that they will be achieved in the way set out in my response to the amendment. Perhaps the noble Lord will feel able to withdraw his amendment.
Lord Hunter of Newington: In view of the Minister's very helpful reply and the great deal of information which she has supplied on what is going on in the management field which has not been available to all Members of the Committee, at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 [National Health Service trusts]:
Lord Dainton Lord Dainton moved Amendment No. 97:
Page 65, line 33, at end insert:
("(3) A draft of the first order to be made under section 5(1) of this Act in relation to NHS trusts which have a significant teachirg and research commitment shall be laid before each House of Parliament and that order shall not be made unless the draft has been approved by a resolution of each House.").
The noble Lord said: I am sorry that the noble Baroness, Lady Young, is not able to be present. Therefore, I must speak on her behalf In speaking to Amendment No. 97, I should also like to speak to Amendments Nos. 98, 99, 100, 101, and 101B to 101F.
I am quite clear from the debates on Second Reading and the earlier debates we have had during this Committee stage that your Lordships are fully seized of the vital importance of good teaching and research now in order to secure a high quality of health service in the future, however that health service comes to be delivered, whether through health authorities, as at present, or through the trusts proposed in the Bill.
The present position is that health authorities will still have a duty under that part of the 1977 Act which will still apply to provide the necessary resources and support for medical and dental teaching of high quality where that is required because of the operation of a university medical or dental school in hospitals which are administered by that health authority. However, the NHS trusts to be established under this Bill are not so required to provide these facilities. Instead, it is stated in paragraph 11 of Schedule 2 on page 67 that such a trust,
"may undertake and commission research and make available staff and provide facilities for research by other persons [and]
722
may … make facilities and staff available in connection with training by a university".
The Committee will notice that this is purely permissive and does not represent a requirement on the trust. We who have put forward this amendment believe there should be a requirement. Amendment No. 101, which is the last of this group, would impose a specific duty on the trust to provide those facilities and staff which are reasonably required by the university for clinical teaching and research in medicine and dentistry.
Furthermore, because we believe your Lordships will attach great importance to any order which the Secretary of State may make under this Bill if it becomes an Act —-an order which relates to teaching and research commitments which the NHS trusts should have—we would also propose Amendment No. 97, which is the first of those I have mentioned and which would make such an order subject to affirmative resolution by each House of Parliament.
The intermediate amendments, Nos. 98, 99 and 100 respectively, provide for various other things. Amendment No. 98 couples research with teaching so that sight shall not be lost of the extra cost associated with research. That is a matter which I understand from discussions that members of your Lordships' Select Committee had with the Secretary of State yesterday is already under investigation by the department.
Amendment No. 99 strengthens the provision to secure not just one non-executive director but more than one. In view of what was said by the noble Baroness in reply to an earlier amendment, I take it that that can mean two medical people, if necessary. That is of particular importance in cases where there are both medical and dental schools and also where there is a very large medical school spread over many hospitals. Moreover, those likely to be appointed will usually have clinical patient care responsibilities which must necessarily have the first claim on their time. I know from my own experience, not as a clinician but having to chair a committee on which we want clinicians to be present, that quite often they are unable to be there. To have two members would ensure that at least one well-qualified university director would be present at all board meetings.
Amendment No. 100 would simply delete the words "medical and dental schools", for the simple reason that there is no medical or dental school in the country which is not part of a university. Therefore that phrase is redundant. Incidentally, this correction would also bring the phraseology of the Bill into line with that of the principal Act or those parts of it which are unchanged.
I very much hope that the Government will be willing to accept these amendments or to incorporate something like them in the Bill at Report stage. I hope that they may, because the Government's response to the report from the House of Lords Select Committee on Science and Technology states:
"Research is crucial to the future ability of the NHS to meet the needs of its patients".
It was also clear from the meeting of your Lordships' Select Committee with the Secretary of State yesterday and with the Minister responsible for

723
higher education that the Government do indeed attach great importance to providing facilities for high quality teaching and research in hospitals where this is needed by a university medical or dental school. I beg to move.
Lord Walton of Detchant: I wish to support very warmly this group of amendments proposed by the noble Lord, Lord Dainton. The present position is that hospitals which do not opt for trust status have a duty to provide the necessary resources and support for medical and dental teaching of high quality under the National Health Service Act of 1977. However, there is no such requirement in this Bill where NHS trusts are concerned. All that is provided is a reserve power for the Secretary of State under Schedule 2, paragraph 6, which can be summoned up in the event of a failure of the discretionary powers contained in Schedule 2, paragraphs 10 and 12. A trust might be tempted to cut comers and save money by not supporting either the range or standard of disciplines and facilities required for teaching and research concerning medical and dental students and other professional staff.
I believe it is essential that research and teaching are maintained and enhanced by this legislation and that there are proper safeguards at all levels on the face of the Bill to ensure that this is the case. Research in the National Health Service cannot be separated from patient care and service delivery. There is a tripartite nature of medical practice: treating patients today, teaching and training future staff and undertaking research and development, since today's development in basic research is tomorrow's development in patient care—a point which I think was stressed by the noble Lord, Lord Beloff, in his contribution to the debate just a week ago tonight.
Finally, let me just say that Schedule 2 as it stands merely enables and empowers NHS trusts, even those which are at present in teaching hospitals, to undertake and commission research and to make facilities and staff available in connection with training. It does not require them to do either. Reliance upon reserve powers for the Secretary of State is not, in my view, sufficient. I therefore wish to support this group of amendments.
Lord Adrian: I too support this group of amendments. In doing so, I should like to cite just one example of the kind of research done in Cambridge. However, there are countless other examples that could be described. Everyone has heard of Professor Sir Roy Calne and the pioneering work he has done in liver transplants at Addenbrooke's Hospital. The work was developed at Addenbrooke's as a result of the efforts of a university professor and his team working in a teaching hospital. The approach is now known to be successful and the work is funded by a special supra-regional mechanism through the National Health Service.
However, the question arises: how would a new form of treatment, as liver transplantation was at one stage, untested and potentially very expensive,
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be introduced in tomorrow's health service? Managers will be under very great pressure to take a short-term view and they will be well placed to judge the costs of treatment, but will they have the wisdom to recognise the long-term benefits? This is especially likely to happen in a situation comparable to liver transplantation, as it was when Sir Roy Calne started his work, where the number of patients available in the district served by the hospital was too small to provide a sufficient financial return to offset the cost of developing the treatment.
It seems to me and, I think, to the other supporters of this group of amendments that unless teaching hospitals which become NHS trusts have a duty to provide facilities and staff for both teaching and research, research and teaching will suffer and ultimately the National Health Service itself will be the loser.
7 p.m.
Lord Peston: The group of amendments includes two separate sets of ideas. Amendment No. 97 deals with procedures in this Chamber and in another place with respect to affirmative resolutions rather than the other way round. The other amendments deal with matters of substance. We support the amendments by arguing that the best way is to put the matters on the face of the Bill.
I do not know what the noble Baroness will say in reply but if the amendments are not acceptable to the Government I hope that she will use the few minutes that we have to comment about two matters which would then be relevant. The first is the point made by the noble Lord, Lord Walton, about the reserve powers of the Secretary of State. If the amendments are not acceptable will she say that she is clear in her mind that the Secretary of State will use his reserve powers to guarantee that the interests of the teaching hospitals are fully protected?
The second point that the noble Baroness could clarify arose in our earlier debates about ballots and so forth. The proposed NHS trusts will be putting proposals to the Secretary of State. Will the noble Baroness state in terms that the Secretary of State will not accept from any hospital proposing to become an NHS trust a set of proposals which do not fully guarantee the position of teaching and research? Furthermore, will such a set of proposals, if accepted by the Secretary of State, then become binding? That is central to all of our concerns.
The easiest way is to follow the suggestions of the proposers of the amendments; namely to accept them. However, the alternative is to comment on how the Secretary of State will use his reserve powers, how the proposals will be treated and what will be the legal status of the proposals once they are agreed.
Earl Russell: I should like briefly but warmly to add my support to the amendments. A teaching hospital is a beast a little like a centaur. It is both a university department and a hospital for treating patients. If you wish to produce an immaculately turned out centaur you have to supply it with both a groom and a valet. In this context I hesitate to suggest which might be which but it is our suspicion

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that the Bill provides for one a great deal better than for the other.
The life of a teaching hospital depends on its being recognised both as an academic institution and as an institution for treating patients. It is the classic example of what academics have always said; that the processes of teaching and research cannot be separated. In that context, unless they are both equally secure, we cannot feel secure about the future of our teaching hospitals. Many of them have served this country with great distinction and I should like to see them continue to do so.
Lord Butterfield: I wish to support the amendments and to raise a further question. It harks back to some pointed and well chosen remarks made recently late at night by the noble Baroness, Lady Robson about research being carried out by the medical charities. The total number of people under the research umbrella in the direct university central teaching hospitals and in hospitals where university teaching: is carried out in the regions is rising and keeping pace with the research demands that are emerging. The work is being carried out more and more by young people who are supported by the medical charities. As regards the number of clinical teachers who are working for the universities there has been a 19 per cent. drop in the resources available to them from the university funding centres.
I hope the group of amendments will be bundled up and carried. I am anxious that there should be someone in a powerful administrative position able to keep an eye on and look after the future of the growing number of young people who are carrying out research which is a reflection of what people want. People make their contributions to research in cancer, the heart, lungs and kidneys—we have heard about Roy Caine —and they wish to have more research carried out in those fields. The people who come forward to carry out that work will be helped if hospitals have to have someone in the central administration who can understand the needs of those young people.
Baroness Hooper: We have previously touched on the important subject of the relationship between National Health Service trusts and universities. It will be as important for NHS trusts as for the rest of the NHS to develop effective and close working relationships with universtities. The Government are most concerned to build on these links at all levels in the NHS. That was made quite clear in the letter sent in February to all NHS managers by the Permanent Secretary at the Department of Health. The Permanent Secretary's steering group on undergraduate medical and dental education is continuing to work on the issue.
As I said previously, I do not share the fears of some that NHS trusts will somehow seek to abandon their teaching responsibilities and place universities in an impossible situation. High quality teaching will be a touchstone of the quality of service offered by a NHS trust. No trust which was seen to be reneging on its teaching commitments would inspire confidence in any potential purchaser of its services in order to survive. We recognise the anxieties that
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have been expressed not only today and therefore we are taking very clear steps to ensure that that does not happen.
If close working is to be maintained and enhanced clearly a voice with university experience is needed at the highest level in the decision-making bodies of the trusts. We recognise that. I hope that I have clarified the fact that clinical academics are now able to be appointed as non-executive or executive members of NHS trusts, depending on local circumstances.
Turning to Amendment No. 99 in detail, I am not convinced that in all cases there needs to be more than one person drawn from a university on the board of a NHS trust. The size of the boards will be limited in order to ensure that they operate in an effective and business like manner. It will not be necessary to designate more than one of the non-executive directorships to a university appointee. There is of course no reason why other non-executive members should not be drawn from a university if they have particular skills which can be used to help in the effective management of the trust. They would of course be serving in a purely personal capacity but would nevertheless bring their wider experience to bear.
Membership of the board alone will not be the only link which exists. Clearly, arrangements will evolve at working level between the two organisations. Many of the arrangements which evolve for working level co-operation will be non-statutory, but I draw the Committee's attention to the fact that NHS trusts will be able to form sub-committees composed of members and non-members of the main board to aid them in specific tasks. I am quite sure that in appropriate circumstances people drawn from universities will be involved.
The noble Lord, Lord Dainton, raised a particular question on the precise wording of the Bill and the phrase covering the appointment of a non-executive member "from a university or medical or dental school", which is based on precedent in the National Health Service Act 1977. I have not been made aware that that has caused problems in the past in any way, but I shall look again at this matter in the light of the points that have been raised.
With regard to Amendment No. 98, the effect of the proposed amendment would be to bring the provisions for membership which I have described into play only where a trust had a significant commitment to both teaching and research. The Government's commitment to research has consistently been emphasised in our debates including the one last Tuesday about the director of research and development and by my right honourable friend the Secretary of State at the Select Committee yesterday. I emphasise simply that the provision for the appointment of non-executive directors is intended specifically to cover the interests of undergraduate education. It is, of course, extremely unlikely that any trust with a significant teaching commitment would not also be involved in research, but there seems no reason to limit non-executive directors appointed from a university in this respect.

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I now turn to Amendment No. 101. Because of the importance which we attach to undergraduate medical education and research, we shall specifically recognise it in the establishment orders of teaching trusts. The Bill contains express provision for that. This in itself is an improvement on the present legal situation, where there is no statutory definition of the teaching role of any National Health Service authority or unit. Secondly, we have made clear that National Health Service trusts will be expected to continue to play their part in making clinical facilities available, as I have already explained to the Committee. The Bill gives trusts specific powers to enable them to do that. Moreover, it gives the Secretary of State powers of direction in respect of the exercise of such powers by trusts. I do not believe that the behaviour of trusts will be such as to make the use of those powers necessary but it is important that they are in place so that any problems which arise can be tackled swiftly.
Moreover, as was pointed out in the Permanent Secretary's letter, to which I have referred. National Health Service trusts will be directly accountable to the Secretary of State, who will wish to satisfy himself not only that a trust has undertaken to provide adequate facilities for teaching and research and has made the necessary arrangements for collaboration, but, above all, that these undertakings have been met in practice. NHS trusts will be expected to include an outline of the provision which they intend to make for teaching and research in their annual reports and forward business plans. I am confident that this process and the process of monitoring a contract by district health authorities will ensure that the Secretary of State has ample early warning of problems. It is not therefore in my view necessary to make any further special provisions with regard to teaching NHS trusts.
Perhaps I may explain this by turning to Amendment No. 101 in detail. That duplicates, in part, Section 51 of the National Health Service Act 1977 which requires the Secretary of State for the whole National Health Service to make available such facilities as are reasonably required by a university medical school for clinical research. That section will remain in force. But it is a duty which bites on the Secretary of State. As far as National Health Service Trusts are concerned, the Secretary of State will ensure that his duty is met by the process of careful scrutiny of plans and performance and, if necessary, use of reserve powers to which I have just referred. I hope that in some way that reassures the noble Lord, Lord Peston. I believe that the amendment would not add to this and could in fact create a new and unnecessarily rigid system as well as undermining a trust's freedom to manage its own affairs.
As we have already discussed we believe that the correct way for health authorities to negotiate service delivery patterns will be through the contracting process. If we are to tie National Health Service trusts as rigidly as the amendment proposes, their ability to provide services through negotiated contracts would then be limited. I do not believe that that would be in the interest of the trust, nor of
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the health authorities which arranged services with it. Nor would it ultimately be in the interests of the medical school or university, as it might tend to ossify service patterns and prevent teaching being spread to centres away from the main university hospitals, a trend on which many Members of the Committee have commented with approbation. The necessary safeguards are, however, there in the duty and powers of the Secretary of State.
Finally, perhaps I may turn to Amendment No. 97, which proposes that the establishment of NHS trusts with a significant teaching and research commitment should be subject to affirmative resolution by both Houses of Parliament. As we have established, our plans for the creation of National Health Service trusts will be preceded by thorough consultation. The university and medical school will obviously have views on the subject and these will be most carefully considered. Similarly, all views from members of the public and local and community organisations will also be taken into account. I do not believe that additional scrutiny in this Chamber is a necessary addition to that process.
I say that for two reasons. First, the creation of a National Health Service trust is primarily a management change at operational level. It is not about an issue of principle. After all, the issue of principle is being debated today, as is the legal framework which is necessary to carry the principle into effect. I do not think it is right that the individual application of that principle, if the Committee agrees with it, should then be tested in case after case. It is the duty of the Secretary of State to manage the National Health Service, a task for which he is fully responsible to Parliament. Of course either Chamber can raise questions about his stewardship and both will no doubt want to track the progress of the National Health Service trusts with particular care. Indeed, I can certainly see one Member of the Committee who will do that. However, that is a rather different proposition from saying that they should second-guess him in each individual decision, which is the spectre that this amendment raises in my mind.
Secondly, such a move would be wholly unprecedented in the National Health Service. At present the Secretary of State has power to establish health authorities, vary their boundaries and create special health authorities. None of those powers is exercisable by affirmative resolution. However, I can assure the Committee that we shall take very careful account of any points made about any individual application for trust status when reaching a decision on whether it should go forward in the first place.
The Committee has been very patient and I have spoken at great length because I appreciate the depth of interest and concern that this issue arouses. I am pleased to have had an opportunity to put the Government's response fully on record and I hope that I have said enough about plans in terms of both management and legislation to persuade the movers of these amendments to withdraw them.
7.15 p.m.
Earl Russell: Before the noble Baroness sits down perhaps she could answer a question raised by the

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noble Lord, Lord Walton of Detchant. Can she say why, since the Government's commitment to research continues they have chosen not to continue the duty to undertake research which exists in present law?
Baroness Hooper: I am sorry but I am not sure that I follow the question of the noble Earl.
Earl Russell: It is very simple. I asked why the Government have chosen not to continue the duty on hospitals to do research which exists in present law. The point made by the noble Lord, Lord Walton, was that the duty exists at present. The Government are causing it to cease to exist. I wondered why.
Baroness Hooper: I am not aware that that is the case.
Lord Walton of Detchant: The point that I made was that under the 1977 National Health Service Act there was a duty to provide the facilities for teaching and research within NHS hospitals. It is not prescribed in the Bill as a duty upon NHS trusts. The Secretary of State simply has powers to take action if the trusts do not fulfil that function, which is binding on hospitals which will not be self-governing trusts.
Baroness Carnegy of Lour: As a total layman, my concern is to ensure that if a hospital trust takes on the task of being a teaching hospital, the requirement to do what a teaching hospital now has to do should not be weakened. That is the point, however it may be accomplished.
Members of the Committee may smile at my simple example but it is one which I know about. When I visit the dean of medicine at the university in Dundee, I go to his room at the hospital which the noble Lord, Lord Hunter, founded, Ninewells Hospital. If Ninewells Hospital was at any time to become a self-governing trust, I hope that it would be no easier for it to say, "We are short of money. We cannot give the dean of medicine a room", than it is now. That is basic to the way in which the hospital operates. It is a very small example but one that I am sure my noble friend will understand.
Lord Butterfield: Perhaps I may help the noble Baroness as she answers the question raised magnificently by the noble Earl, Lord Russell. We have to be very careful. Some of the NHS trusts may not be hospitals. In East Anglia the ambulance service in Norwich is anxious to explore the possibility that it should be a trust. I hope that that provides some excuse for the omission. Nevertheless I stand firmly behind my support for this very important amendment.
Baroness Hooper: I am most grateful to my noble friend and to the noble Lord, Lord Butterfield. I am sorry if I appeared obtuse. It seemed to me that I had responded to the question raised by the noble Lord, Lord Walton, in my reply when I said that the relevant section of the National Health Service Act 1977 would remain in force. That is a duty which bites or the Secretary of State. However, it is
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perfectly true that, while that duty will remain in relation to hospitals, some trusts will not be hospitals, as the noble Lord, Lord Butterfield, pointed out. It therefore cannot be a duty for all trusts in that sense.
Lord Dainton: I find myself in considerable difficulty. Although the noble Baroness has spoken at very great length and I have heard a large number of words, I am still perplexed at the reply. If she has stated that the Secretary of State in his approval of the trusts would ensure that the duty would in practice, by whatever means, fall upon those trusts which have within them responsibilities for providing the facilities for teaching and research at university medical and dental schools, I shall be satisfied.
Baroness Hooper: Perhaps I may clarify that that is the case.
Lord Dainton: I am greatly relieved to know categorically that that is the case. It makes my job a good deal easier. But it leaves me with the strange logic that one has two institutions—on the one hand the health authority and on the other the trust—performing very similar tasks. One has a constitution under which it is not required to provide facilities for university medical and dental schools and the other has nothing so prescribed within the Bill. I still find that extremely strange.
However, I shall read the noble Baroness's words with very great care. If the matter seems adequately covered at that stage I shall withdraw the amendment. I withdraw it at present, but I hope that it will be possible to return to the matter if on careful examination what has been said seems to merit a re-examination and a return to the point. It is rather complicated. I thank the noble Baroness for that long explanation. I believe that we are all ready for dinner now.
Amendment, by leave, withdrawn.
Baroness Blatch: I beg to move that the House do now resume. In so doing I suggest that the Committee does not reconvene on the Bill before twenty-five past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

European Parliament Electoral Reform Bill [H.L.]
7.25 p.m.
Lord Bonham-Carter: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee. —(Lord Bonham-Carter.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MURTON OF LINDISFARNE in the Chair.]
Clause 1 [Amendment to European Assembly Elections Act 1978]:
Lord Bonham-Carter Lord Bonham-Carter had given notice of his intention to move Amendments Nos. 1 and 2:
Page 1, line 5, leave out ("Assembly") and insert ("Parliamentary").
Page 1, line 8, leave out ("Assembly elections") and insert ("Elections to the European Parliament").
The noble Lord said: In Clause 1 I have put forward a series of amendments of a technical nature which also carry through to Clauses 2 and 3. I am advised that there is a minor technical error in all these amendments. I shall reintroduce them on Report with the Committee's permission. I propose not to move them at present.
[Amendments Nos. 1 and 2 not moved.]
Lord Underbill Lord Underbill moved Amendment No. 3:
Page 1, line 9, leave out from ("of) to end of line 10 and insert ("a system of proportional representation as set out in an order to be submitted by the Secretary of State and approved by Resolution of both Houses of Parliament." ").
The noble Lord said: I must make it clear at the outset that, although I speak from the Opposition Dispatch Box, as is customary on a Private Member's Bill I speak in a personal capacity. My noble friends will act completely freely. There will be no whip on the amendment or on the Bill.
Some surprise has been expressed at the nature of the amendment. I should like to make it quite clear at the outset that as an individual I have never been opposed to proportional representation despite what some people may have thought, but I have been concerned about the possible political repercussions and consequences of certain aspects of proportional representation. At Second Reading I outlined the consideration being given by the Labour Party policy review to various systems of election for different institutions and that different forms of elections may be considered for differing institutions.
The Bill makes a constitutional change. I do not believe that it is a matter that ought to be the subject of a Private Member's Bill. As I said at Second Reading, I fully appreciate the explanation given about the Bill by the noble Lord, Lord Bonham-Carter, and the support that he had from noble Lords. However, the Bill cannot be left as it is.
At Second Reading (Official Report, 23rd March, col. 513) the noble Lord said
"I make it clear … that the measure does not in any way alter the way that Members of Parliament are elected to the House of Commons".
That was a very important proviso that the noble Lord made. He also stated:
"The Bill is so constructed that Parliament can approve the principles of proportional representation in regional constituencies without committing itself to the single transferable vote system".
He added:
"Other options are open for consideration".
Later in his speech the noble Lord said:
"I have opted for the single transferable vote for a number of
The amendment that I propose provides what I believe the noble Lord, Lord Bonham-Carter, suggested; that is, to adopt the principle of proportional representation for European parliamentary elections without laying down any precise system. There may be some comment, in view of the frequent criticism that has been made about leaving too many powers to the Secretary of State, that it is a little dangerous to insert in my amendment that a system should be such,
"as set out in an order to be submitted by the Secretary of State and approved by Resolution of both Houses of Parliament".
That appeared to be the only way to tackle this matter without infringing what are generally regarded as the conventions of the House and removing from the Bill the power to do anything whatever.
Without my amendments, the Bill would simply transfer the system used in Northern Ireland to the rest of Great Britain. Again, that is stated by the noble Lord, Lord Bonham-Carter, at col. 514 of Hansard. In effect, that is to transfer the single transferable vote system operating in Northern Ireland to the rest of Great Britain.
If we leave Clause 2 as drafted, we shall have large regional constituencies. I must repeat what I said on Second Reading: that will mean that in Scotland there will be one European constituency—72 Commons ones will return eight MEPs. Wales will have one European constituency—38 parliamentary constituencies will return four MEPs. I do not know how candiates will be selected, but that seems to me to open the way to a list system by either the Scottish or Welsh executive committees of the different parties. That system is one to which I have always been opposed, and I believe that my party has generally disliked it. In England at present there are 66 European constituencies. Those are already large, covering 523 parliamentary constituencies with an average of eight parliamentary constituencies for each European one. On Second Reading, I explained why, when we in the Labour Party set up the European constituencies, we laid down that there should be accountability with a minimum number of meetings of the delegate and executive body each year. The Bill will provide just nine European constituencies for England. That will be approximately 58 parliamentary ones for each MEP.
Clause 3 is really consequential. The Boundary Commission would work on the basis of large regional constituencies.
Acceptance of my amendment would mean that the principle of proportional representation for the European elections is provided for but the system will not be laid down in the Bill. That is not desirable in a Private Member's Bill. Moreover, there should be greater consultation on different types of systems, but it should be subject to an order approved by the resolution of both Houses.
What I have said explains why I moved this amendment, the purposes behind it and why I believe it so desirable that this amendment should be carried so that the principle but not the actual system on which the elections shall be conducted is accepted. I beg to move.
7.30 p.m.
Lord Tordoff: It may be helpful if I speak immediately from these Benches. Of course, as the sponsor of the Bill my noble friend will reply. First, we understand the problem which the noble Lord, Lord Underhill, faces. We have considerable sympathy for his position. However, it is true to say that had we come before this Chamber without specifying which electoral system we wished to see, we should have been ridiculed from all sides. Therefore, we felt that we had to put a system into the Bill. We very carefully put that into a schedule so that it could be seen to be free-standing from the rest of the Bill and capable of amendment at a later stage, or indeed modification by an amending Bill by a subsequent government of whatever colour.
Therefore, I want to be quite clear that we are not trying to railroad STV through this Chamber. We believe that that system is the best available. We may be wrong on that; and we are prepared to listen to argument, and we are prepared to be convinced. However, we have a very firm belief that STV is the best system.
Perhaps I may take a few moments of the Committee's time to explain why that is. To do that, I must compare the various voting systems.
Broadly speaking, voting systems divide themselves into two—proportional and non-proportional. Of the non-proportional systems, first-past-the-post, which is the one used in this country except for European elections in Northern Ireland, is the one that we know best. The alternative vote, which is often regarded as a form of proportional representation, is non-proportional. I shall not go into the details of the first-pass-the-post system because we all know about that.
The alternative vote can produce in certain circumstances a slightly fairer result by a qualified majority. However, it can also produce some quite weird results. As I say, it is not proportional and a party which came second in every seat in the country at the first count could still win every seat in the country by the redistribution of votes given to third, fourth, and fifth parties.
Proportional systems are roughly of two types —that is, list systems of one sort or another and STV. There is also the additional member system which is used in West Germany. That is a sort of half-way house.
The Labour Government in 1977 proposed the D'Hondt system which is a system of multi-member constituencies as all proportional systems demand. As the noble Lord, Lord Underhill, says, that leads to large constituencies, but proportional systems with only 81 seats at stake are bound to lead to large constituencies. One may question whether the direct constituency connection between an MEP and his locality is quite as strong as that between a Member of another place and his constituency. The connection between a Member of Parliament and his constituents is important and is seen as important. However, I sometimes wonder whether it would not be of greater help—and this applies to another place, but particularly to Europe—if people had the opportunity of having at their disposal, as it were, a
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Member of Parliament of their own party. There are large tracts of this country which have no Conservative Members of Parliament, and those which have no Labour Members of Parliament.
I do not always feel that, much as those in another place, and indeed in Europe, may try to look after the rights of all their constituents, that the constituents necessarily feel comfortable in going to a Member of Parliament of a party other than that which they support. There are certain questions which I, as a voting member of the public before I came to this place, would not have wished to have taken to elected Members of Parliament, particularly when I have stood as a candidate against them.
Under the D'Hondt system the voter has an X vote with no second, third or subsequent preferences. The party with the highest vote gets the first seat which goes to the candidate of that party with the highest vote. There is then an average highest counting system, and the result is fairly but by no means totally proportional. There is no chance of cross-party voting. In the end your vote may go to someone of whom you do not approve in the party for which you voted. That is a problem with all party list systems. They leave power in the hands of the party machine, whether they be national or regional list systems or any other list or pseudo-list system. It leaves too much power, in our view, in the hands of the party bureaucracy.
The other system, which is a sort of halfway house, is the additional member system as used in Western Germany. One half of the MEPs are elected in constituencies and the other half are elected on national party lists. The voter has two votes, one for the candidate and one for the party. There is a topping-up system to ensure reasonable proportionality. The problem with that is that it creates two classes of member and it still leaves the power to choose the ranking in the national list in the hands of the party.
STV, where the voting is on a one, two, three basis rather than an X system, as someone said, is as simple as one, two, three. The elector can express the widest possible choice for as many or as few candidates as he wishes. It is a simple voting system, though the counting is rather more complex. I myself have counted at STV elections within my party and if I can do it it cannot be all that complicated. It certainly is not beyond the wit of returning officers in the North and South of Ireland.
As noble Lords are aware, a winning quota of votes is established by simple calculation based on the total number of votes cast and the total number of seats to be filled. A candidate who exceeds the quota on the first preference is elected. Surplus votes are then redistributed on the basis of second preferences. If another candidate reaches the quota, his or her surpluses are again redistributed and that process continues until a candidate fails to be elected on a particular round. At that point the person with the smallest number of votes is deleted and his or her second preferences are redistributed.
Each elector therefore has a chance of casting a vote for a successful candidate. It is not absolutely proportional, but it is very nearly. It has the beauty

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that voters can express choices across party lines, which is a very useful facility. Because of that it encourages a wider range of candidates. Parties will tend to, and indeed do, put up candidates who cross ethnic and sexual barriers. There is a far better chance of women being elected under that system than under first-past-the-post.
It is a system which is not unknown in the United Kingdom. I have a list of organisations which use STV, and some will be well known to the noble Lord, Lord Underbill. The list includes the Association of University Teachers, the EETPU, the National Association of Teachers in Further and Higher Education, the National Union of Journalists, the National Union of Teachers, the General Synod, Church of England, the Royal Arsenal Co-operative Society and many others. I think your Lordships will agree that that is a broad spectrum of organisations.
In the short time available I have tried to encapsulate the thinking behind our belief that STV is the system best applied to a proportional system for Europe. It is not a totally entrenched view; if someone will persuade us of something different we shall be perfectly prepared to discuss that. We had to put something into the Bill. We put in something which we believe to be correct. I hope it is possible to resist the noble Lord, Lord Underbill's amendment, because that is a mistake.
I have great sympathy for the noble Lord and understand why he is in that position; the Labour Party is still making up its mind in relation to this difficult problem. I do not want to inhibit the process of thinking going on in the Labour Party as it moves towards a belief in proportional representation for the European elections, which is clearly expressed in the amendment tabled by the noble Lord. I have a suspicion that his noble friend sitting behind him, if he does not actually explode before I sit down, will have a word or two to say later in this debate.
I hope that noble Lords present tonight will sustain the Bill as it stands in the knowledge that changes can be made at a later stage. It is not enough to leave the matter in the hands of the Secretary of State to bring by order before both Houses of Parliament such a significant change in the voting pattern. I cannot support the amendment.
7.45 p.m.
Lord Monson: Despite the persuasive argument of the noble Lord, Lord Underbill, I oppose the amendment. If this assembly/Parliament, in which small countries have been allocated a quite disproportionate share of the voting power so that the United Kingdom can easily be outvoted by countries with a combined population less than 52 per cent. of our own, is to exert increasing control over our lives—I hope that it will not, but I fear that it may if we are not careful —it is essential that as many people as possible of genuinely independent mind be elected by voters in the United Kingdom.
By "independent mind" I do not only mean those with no party political affiliation, but also those independent minded members of political parties who are not afraid to reject the strict party line
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whenever they feel it right to do so. The only realistic way that one will have any chance of such individualistic individuals, if I may use that term, being elected is by adopting the electoral system proposed in the Bill as it stands.
Earl Russell: I should like briefly to take up the suggestion of the noble Lord, Lord Underbill, that a Private Members' Bill is not the appropriate method of proceeding in this matter. The precedernts are against him. When my great grandfather introduced the great Reform Bill in another place, I admit that he did it from the Government Front Bench. However, he was only in a position to do that because more times than I care to count he had introduced it as a private Member and gone on and on until people were persuaded. This is entirely the appropriate way to begin the consideration of an issue of this sort.
Lord Stoddart of Swindon: Before this evening I had not interested myself in this particular measure. I am afraid I have to say to the Liberal Democrats that the reason I have not done so is because they are a party without any chance of power. They are unlikely to gain the government of this country and indeed have reached a situation where they have fewer votes now and much less support than they did 10 years ago. It therefore seems to me that they have not been able to persuade the great British electorate of the benefits of this particular policy nor indeed of any other policy which they have espoused.
Under those circumstances it was probably right for me to ignore the Bill. However, when my noble and respected friend—I mean that very sincerely —proposed an amendment from the Front Bench which gave support to the principle of proportional representation, I felt that I had to take some note and publicly express my disagreement with him.
I intended to ask on what authority my noble friend moved the amendment. He has explained the position; that although he spoke from the Front Bench—and it is important that we distinguish this—he was speaking not for the Labour Party in the House of Lords, nor for the Labour Party n any sense at all, but for himself. Of course, he is entitled to have an opinion of his own and he is entitled to express it. I ask again with the utmost respect —my noble friend is a man for whom I have huge respect, and always have—whether it was wise for him to have put that view and to have moved this amendment from the Front Bench.
The fact is, of course, that the Labour Party has given no authority for any change in the present circumstances. It may well be considering matters at present but there is no agreement within the party that we should proceed with proportional representation or any type of proportional representation. The Labour Party conference has not given its authority and if there is one matter on which the Labour Party must give its authority it is on the method of voting for all elections in this country. It is the Labour Party which fights those elections. It is the Labour Party which provides the candidates. It is the Labour Party which provides

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the wherewithal to fight elections. Therefore, it must be the Labour Party conference which ultimately decides.
Indeed, the Leader of the Labour Party has publicly announced his opposition to proportional representation. He does not believe that it is the fair system which is claimed for it by the proponents of this Bill, and others. He does not necessarily believe that it is more democratic to elect representatives by proportional representation as against the first-pass-the-post system. Therefore, the Leader of the Labour Party has declared his opposition and the Labour Party has not yet made up its mind, but my noble friend is perfectly entitled to his own point of view as, indeed, I am entitled to mine.
Arguments have been put forward that, although proportional representation might not be good for electing our government, it could be acceptable for electing such a body as the European Assembly or Parliament, call it what you will.
Lord Bonham-Carter: Or a Scottish assembly.
Lord Stoddart of Swindon: Do we have a Scottish assembly? I did not think we had a Scottish assembly. Are we to have one?
Lord Bonham-Carter: I understood that the Labour Party is committed to a Scottish assembly and that the executive decided that it should be elected by a system of proportional representation.
Lord Stoddart of Swindon: Yes, but that is for the future and the Labour Party has not yet decided as to whether a Scottish assembly should be elected by proportional representation. The Labour Party conference has not yet given its go-ahead, even though the Scottish executive might like to have a future assembly elected by proportional representation. However, I have been diverted from my argument about the European assembly.
I was saying that arguments have been put forward that as this assembly in Strasbourg, this polyglot assembly, is not at present a legislative assembly, it does not matter whether it is elected by PR as it has no powers. However, the fact is that the assembly in Strasbourg wishes to gain many more powers; indeed, it wishes to gain many more powers than this Westminster Parliament has now. Certainly the view of the leader of the Conservative group in Europe —I forget what it calls itself now —believes that this Parliament should be subordinate to the European Parliament; so the matter becomes very much more important.
I happen to believe that proportional representation is not necessarily more democratic than our present system. Indeed, it is a system which can cause all sorts of difficulties and problems when there is no certainty about the government who exercise that government and the sort of people who exercise that government. For example, on three occasions in Greece a criminal conspiracy which called itself a government was elected and because of the system of PR the people were unable to get rid of those elements which made it a criminal
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conspiracy. Even in Ireland we presently have a situation where strong government cannot proceed because of the electoral system.
Therefore, all that PR represents is not necessarily good and the system will not necessarily produce the results which are claimed for it. As I said, I very much regret that I cannot support my noble friend Lord Underhill in his attempt to improve this Bill. Certainly he is attempting to improve it and there is no question about that. His amendment is infinitely better than what is contained in the Bill but because I disapprove of and disagree with the principle I very much regret that on this occasion I simple cannot support him.
Lord Simon of Glaisdale: The noble Lord, Lord Underhill, has put forward this amendment with his usual fairness and frankness but, with respect, there are two conclusive reasons why it is unacceptable. First it is quite unacceptable that the electoral system should be fixed by ministerial order under delegated legislation. That would be so if one simply left it there, but one goes further. It is still not conceded that it is not a convention of this House that your Lordships do not vote against an order in delegated legislation.
I argued as strongly as I could on the student loans Bill that you Lordships should vote, in a proper case, against any order presented by way of delegated legislation. I thought that the noble Earl, Lord Caithness, had conceded that at the Report stage of that Bill, but the noble Lord the Lord Privy Seal was far more cautious on Third Reading and merely said "if your Lordships should vote against an affirmative resolution. He seemed to go further last night but nevertheless it is not yet conceded that your Lordships can properly vote on such a matter. That merely reinforces the objection against so important a constitutional matter as the system of voting being fixed by ministerial order.
The second reason is that although the noble Lord, Lord Underhill, does not so intend it, this is a wrecking amendment. Obviously there are many systems of proportional representation—quot homines, one is tempted to say —and the noble Lord, Lord Tordoff, clearly explained the principal one. The noble Lord, Lord Stoddart, controverted any system of proportional representation but it is not necessary to go into that at all because this amendment proposes that the elections shall be by such system of proportional representation as the Minister shall put forward by way of a statutory order.
However, there is no obligation on him to put forward any order at all and neither is there any time limit within which he must do so. We know perfectly well from what the noble Earl, Lord Ferrers, said at Second Reading that this Government will have nothing to do with the Bill. From what the noble Lord, Lord Stoddart, has said, I strongly suspect that the same view may well be expressed by a Labour Home Secretary. The result would be that there would be no obligation to put the Bill into effect in any way or to have any system of proportional representation whatever for European elections. I therefore hope that the noble Lord, Lord Underhill, will not press this amendment.
8 p.m.
Lord Cockfieid: I do not propose intervening in the internecine strife between members of the Labour Party though my sympathy is very much more with the noble Lord, Lord Underbill, both on constitutional grounds and on personal grounds, having on more than one occasion found myself at variance with the leaders of my own party.
The institution in question is correctly known as the European "Parliament".That was settled once and for all in the Single European Act, as re-enacted in this country in domestic legislation. There is a strong argument for saying that the original translation into "assembly" was incorrect. The Treaty of Rome is a French document which was written in French. The French Parliament is the Assemblée Nationale and not unnaturally the drafters of the treaty used the word "assemblée".
If one refers to any of the leading French dictionaries on this matter it will be found that the terms "assemblée" and "parliament" are largely interchangeable. What is more, the Robert dictionary describes both the House of Commons and the House of Lords as "assemblées". I am sure that that will upset the noble Lord but that is the position.
There is another point that I wish to take up. I refer to the campaign of the noble Lord, Lord Monson, against the voting rights accorded to countries such as Luxembourg, Belgium and Holland. The reason for those voting rights is perfectly simple. When the treaty was first signed the votes were deliberately weighted in favour of the Benelux countries to prevent them being oppressed by the larger countries. That formed part of the acquis communautaire. We were bound under the Treaty of Accession to respect the acquis communautaire and there is no way whatever in which we can resile from our obligation to respect the rights of Luxembourg, Belgium and Holland. The noble Lord is entitled to complain about anything he likes, but there is nothing whatever that he can do about it.
I come to the substance of the amendment tabled by the noble Lord, Lord Underbill. As I said at Second Reading, I do not believe that any valid comparison can be drawn between what is done or needs to be done in relation to the elections to the Parliament at Westminster and what is done in relation to elections to the European Parliament. I explained that in great detail at Second Reading and I do not propose repeating what I then said.
I entirely agree with the noble and learned Lord, Lord Simon of Glaisdale, that if one has a Secretary of State or government opposed to proportional representation, no order would ever be laid. I know that it is regarded as an abuse for a Minister to frustrate the intention of a statute by refusing to make an order to bring it into effect. But we all know that it has been done and that it will continue to be done. Therefore, in effect, however admirable the motives of the noble Lord, Lord Underbill—I entirely understand and respect the arguments that he put forward—de facto this amendment would destroy the Bill.
There are also the points that were deployed in this Chamber at very great length over the Education
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(Student Loans) Bill, that it is vesting unreasonable and unacceptable powers in the hands of government to make what in effect is not only primary legislation but primary legislation of great constitutional importance.
The only other argument I bring forward is that the system which this Bill proposes is one which has been enacted for Northern Ireland and is in force there. Therefore, there is a very sound precedent in our own country for implementing it.
Lord Holderness: I wish to take issue with the noble Lord, Lord Stoddart, who claims certain democratic credits for the present system of first-past-the-post. I expressed my view earlier to noble Lords. I said that it was very difficult to claim democratic credit for a system which denied any representation to a party winning one in four of the votes cast. Therefore, I was delighted to hea:" about the move which the noble Lord, Lord Underbill, has made from what I thought—I hope rightly—was the comparatively resistant position which he seemed to suggest when we debated this Bill at Second Reading.
There are only three broad alternatives for future elections to the European Parliament. The first is to continue the system of first-past-the-post, which is not being discussed at the moment and about which I have strong views. The other alternatives ane either to have some kind of a list system, as the noble Lord, Lord Tordoff, suggested, or some rather purer proportional system such as that suggested by STV. I would prefer a purer proportional system to an additional member system, in which I have been interested in other connections.
Apart from that reason, and because I like supporting definite rather than indefinite propositions, I would find it very difficult to accept the position of the noble Lord, Lord Underbill, because I would not know where I was. Therefore I shall continue to support the principle of the Bill and resist his amendment.
Viscount Ullswater: I recognise the purpose of the noble Lord, Lord Underbill, in bringing forward this amendment. My noble friend Lord Ferrers pointed out to noble Lords during the Second Reading debate that there are different systems of proportional representation. Indeed, different systems or systems with variations are used by several member states within the European Community. For some time the European Parliament has been pressing for the introduction of a uniform electoral procedure for its members throughout the Community. However, no consensus has so far been reached. Therefore, it would be premature to seek to devise a system of proportional representation for Great Britain in advance of a consensus.
We should wait to see what proposals finally emerge from the European Parliament and the Council of Ministers and consider them on their merits at that time. However, to adopt the device now proposed by the noble Lord, Lord Underbill, to meet this situation would, I suggest, raise objections of a constitutional nature. The system and its details by which members of the European Parliament should be chosen are matters of too great importance

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to leave to subordinate legislation, as the noble and learned Lord, Lord Simon of Glaisdale, has emphasised, notwithstanding that the draft instrument would require the approval by resolution of both Houses of Parliament. In electoral matters even points of relative detail are reserved for the primary statute. I refer, for example, to the specification of the precise layout and content of the ballot paper. If the amendment were to be adopted further consequential amendments to the European Assembly Elections Act 1978 would be necessary — amendments of which it appears the noble Lord, Lord Underhill, has given no indication of an intention to table. For all those reasons I am opposed to the amendment.
Lord Bonham-Carter: It has been an exceedingly interesting debate so far and I should like to thank all noble Lords who have participated in it. I should like to avoid various booby-traps which lie in my path such as getting involved in an internal Labour Party dispute in which I feel I would be ill-equipped to engage. I assure the noble Lord, Lord Stoddart of Swindon, who made a most admirable Second Reading speech in opposition to the Bill, that the Bill discusses the future. If he thinks that we should not be discussing the future, he should not in a sense be discussing the Bill.
The main objections have been that it is in some sense unconstitutional for a matter of constitutional importance such as this to be put forward in a Private Member's Bill. That objection was smashed at the net and was dealt with finally and conclusively by the brief and effective intervention of my noble friend Lord Russell. He referred to the performance of his great grandfather whose example I would not hope to emulate but which I shall anyhow attempt to follow. I would further say that the discussion as to the nature of the proportional representation system which we would adopt has been extremely well covered by my noble friend Lord Tordoff.
I made it perfectly clear at Second Reading that we were not unalterably and inescapably attached to the single transferable vote though on balance we thought it was the best system. If someone else should come up with a better system, and if that system received general support, we should be perfectly ready to consider it. But everything else being equal, we thought that the single transferable vote had a number of extremely important arguments in its favour. In putting it in the schedule we were not in point of fact making an important statement but a suggestion that we were not unalterably attached to it.
I must also avoid getting involved with the noble Lord, Lord Stoddart of Swindon, on the right of Members on these Benches to put forward arguments in favour of policies on the ground that we were unlikely in the near future to become the government. That has been the fate of all political parties at some time in their history. It has never been an argument against their putting forward proposals in which they believe. Indeed we have in the past proposed that this country should join the European Community when the other parties
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disagreed with it. It is only the noble Lord, Lord Stoddart of Swindon, who still maintains that point of view.
Lord Stoddart of Swindon: And 13 million other people.
8.15 p.m.
Lord Bonham-Carter: I remind them that we exist and that we shall continue to put forward policies in which we believe.
When I was elected to another place a very long time ago I was asked to have a drink by no less a person than Mr. Churchill, as he then was. Also having a drink at that time was Sir Reginald Bullingham-Manner, as he was known, Mr. Churchill said, "It's nice to have Bonham-Carter in the House of Commons, isn't it?" Sir Reginald Manningham-Buller said, "Not at all". Mr. Churchill replied, "They worm themselves in, they worm themselves in". That is the position of parties like mine. We tend to worm ourselves in.
I shall come to the body of the matter. It was encapsulated in the speech of the noble Lord, Lord Underhill, which as always was worth listening to and to which one has to pay attention. He expressed a real difficulty which he has tried to resolve. I welcome what he said, just as I welcome what the noble Viscount, Lord Ullswater, said, as a significant advance as spoken by two people from their respective Front Benches. For the reasons given by my noble friend Lord Tordoff, we have to set out a form of proportional representation in the Bill. To have failed to do so would have been regarded as totally ridiculous. From speeches we have heard from both sides of the Chamber—I agree that not a great many noble Lords have been present—that system has received a reasonable degree of support. If any other system were chosen for European elections there would have to be an amending Bill. Therefore, I do not think that the problem is insuperable.
More important in my reservations concerning what the noble Lord, Lord Underhill, said is the constitutional matter which was dealt with so authoritatively by the noble and learned Lord, Lord Simon of Glaisdale, the noble Lords, Lord Cockfield and Lord Holderness, and the noble Viscount, Lord Ullswater. I do not think that I have a great deal to add to that. It seems to be constitutionally unacceptable that a change in the electoral system should be put through by an order which is in itself unamendable.
I hope therefore that those arguments and the tenor of the debate will allow the noble Lord, Lord Underhill, to consider withdrawing his amendment. I trust that what I have said will help him to do so.
Lord Underbill: I thank noble Lords for the kind words they have uttered in damning my amendment and I appreciate their sentiments. I did not go into the details of the different systems of PR because, as has been rightly said, some systems that people call PR are not PR at all. I refer in particular to the alternative vote. I believe it was Mr. Churchill who said that it is a system which gives the most worthless

743
votes to the most worthless candidates. I have studied the various systems and I shall not be moving my next amendment which deals with the Long Title.
I have dealt previously with the position of the STV in the Republic of Ireland. I studied carefully in the Irish newspapers all the results of two of the Republic's elections. When I see that someone well down the list eventually becomes elected because of the transfer of votes, I feel there is something wrong with that system. Nor can one call that proportional representation. Therefore I did not want to go into the detail of the systems of election.
My problem in dealing with the matter is the one which has already been advanced. I fully recognise the danger of a matter of this kind being dealt with by secondary legislation. One cannot amend an order—an argument I have used from this Dispatch Box time and again. On the other hand, to let the Bill go through without attempting to improve it would have been completely wrong. I think that I would have been open to criticism if I had just let the matter go through.
The danger of putting a precise system in a Bill is that it requires very detailed discussion, with a fair amount of consultation taking place beforehand, on the various systems, and you cannot possibly do that on a Bill of this kind. The interesting thing is that the noble Viscount did not tell me what the Goverment intend to do. What is their attitude to the Bill? We were told on Second Reading that they were neutral. However, at some stage they will have to decide what they intend to do with the Bill.
I do not intend to withdraw the amendment. However, in view of the very few people who have heard the arguments this evening, I shall not divide the Committee. I shall deal with it by voiced opinion.
On Question, amendment negatived.
Clause 1 agreed to.
Clause 2 [The electoral system]:
[Amendments Nos. 4 to 13 not moved.]
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Underhill: Perhaps I may point out at this stage that I intended at the outset of the debate when dealing with Amendment No. 3 to state that I was speaking also about my intention to oppose the inclusion of Clauses 2 and 3 in the Bill but I omitted to do so. However, in the light of my previous statement, I do not propose to press the matter further.
Clause 2 agreed to.
Clause 3 [Assembly constituencies in England]:
[Amendments Nos. 14 to 33 not moved.]
Clause 3 agreed to.
In the Title:
Lord Underhill Lord Underhill moved Amendment No. 34:
Line 3, leave out from ("representation") to end of line 5.
The noble Lord said: Perhaps I may say a few words about this amendment. Obviously, in view of
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the attitude I have taken thus far, I shall not be pressing it to a Division. However, in order to be able to speak upon it I must move it.
Reference has been made to the system in Northern Ireland, but I hope that noble Lords read very carefully what the noble Earl, Lord Ferrers, said on Second Reading. He explained the constitutional position of STV in Northern Ireland. He outlined how it was first used in local elections, and in Stormont elections and then brought back again for the purpose of European elections.
I repeat what I said on Second Reading. There are special problems in Northern Ireland and it was always understood that what was adopted in the Province would never be used as justification for adopting the system in the rest of the United Kingdom. As I have said before, statements made by Ministers do not mean a thing. In saying that, I do not mean to be rude. However, it is what is written in the Bill that is important.
It is wise to draw attention to the fact that there are special conditions in Northern Ireland They were first adopted in 1920. But I do not believe that that is any justification for the words contained in the Long Title that the system in Northern Ireland should be adopted for the rest of the United Kingdom. That is what the Long Title suggests. I beg to move.
Lord Bonham-Carter: I do not propose to keep noble Lords very long with what I have to say. We are not using the Northern Ireland precedent as a justification; we are simply saying that it is a mechanism which has worked well and that it is a simple way of introducing proportional representation into the rest of Great Britain. As I said, it is not a justification; it is an example and one which we suggest should be followed.
Lord Underhill: In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

National Health Service and Community Care Bill
8.26 p.m.
House again in Committee on Schedule 2.
[Amendments Nos. 98 to 100BA not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 100C:
Page 66, line 14, leave out ("provision") and insert ("transfer").
The noble Baroness said: This amendment and Amendment No. l00D are essentially technical. When an NHS trust is first established some time before it becomes fully operational it will have no premises of its own. The premises which it will own will be transferred to it from the Secretary of State. Paragraph 4(1) currently allows for an order to require a health authority to make premises available to a trust free of charge until the trust itself provides premises.
However, it is possible that the transfer of premises may not be completed until after the trust becomes fully operational when it could be deemed to be providing premises. The trust would then be liable to pay rent for any premises it uses. It would not be right for a trust to be penalised because of a delay in the completion of the conveyance of the property, which may well be none of its fault. The amendments therefore specify that the period during which authorities may be required to make premises available to a trust free of charge will run until the premises are transferred to the trust. With that not very lengthy explanation, I commend the amendments to the Committee. I beg to move.
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 100D:
Page 66, line 15, leave out ("by it") and insert ("to the trust").
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 100DA:
Page 66, line 28, at end insert:
("(3) If an order nnakes the provision referred to in sub-paragraph (1) above, the order may require a Regional, District or Special Health Authority to discharge such liabilities of the NHS trust as —

(a) may be incurred during the period referred to in that sub-paragraph; and

(b) are of a description specified in the order.").

On Question, amendment agreed to.
[Amendment No. 100E not moved.]
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 100F:
Page 66, line 37, at end insert ("The trust shall also be required to provide such clinical, teaching, research and other services as the relevant Regional and District Health Authorities shall specify.").
The noble Lord said: One of the strengths of the National Health Service since its inception has been that the planning and distribution of health care facilities have been based upon the regional and district structure. However from time to time there have been changes —for example, when for a period of years there were area health authorities.
One of the difficulties one sees in countries such as the United States is that in the absence of such regional planning there is a tendency for many small hospitals to embark upon highly specialised and extremely expensive services. All too many small hospitals in parts of the country which are not capable of maintaining and sustaining such specialised facilities embark upon, for example, neurosurgery or even cardiac surgery. The consequence is that although in the United States these specialties can provide some of the best care available anywhere in the world, in many smaller hospitals such facilities are attempted but with considerable detriment to patient care. The level of mortality in some of those hospitals is far higher than in the specialised centres.
In the National Health Service we have seen from time to time in the past few years in the regions and to a lesser extent in the districts a squeeze on undergraduate teaching and research and on funds
746
available for postgraduate and continuing education. This is an issue to which we have referred in earlier debates this evening. However in earlier debates we have had some important assurances from the noble Baroness about protected funding for teaching and research. We are also aware of the provisions of SIFT.
The problem is that under the Bill it would be possible for a self-governing trust running a hospital to be over-ambitious in establishing highly specialised and highly expensive services in specialties which were inappropriate to the hospital. This might be at the expense of what may appear to be rather more mundane and less glamorous services such as those to the elderly and the mentally ill.
This is a probing amendment and simply seeks to ensure that a self-governing trust plans and provides services within and under the overriding authority of the district and regional health authorities. That is the purpose underlying the amendment. I beg to move.
8.30 p.m.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): I think that it would be for the convenience of the Committee if we considered not only the noble Lord's amendment but also Amendments Nos. 101 AH and 101AJ. If the Committee will forgive me, I shall cover all three amendments, because the other two throw a slightly different light on the problems that have been raised by the noble Lord, Lord Walton.
The duty of the Secretary of State to specify the functions which a National Health Service trust must carry out is a guarantee that trusts will have to provide a minimum range of services which the Secretary of State, after careful consultation with local health boards, authorities and other relevant interests believes are needed. Teaching, training and research would be included in these functions where appropriate and particularly in the case of a teaching hospital. The functions order will therefore act as a safety net.
In addition, trusts will make their contribution through the National Health Service contracts system to the overall level and pattern of services secured by health boards and authorities. Boards and authorities will decide and procure a pattern of health services after careful assessment of local health needs and full consultation with the medical profession. National Health Service trusts, along with other service providers, will run the services which are needed by the local population under contract to boards and authorities. The boards and authorities will be able to make stipulations about a trust's teaching role where necessary. Where a National Health Service trust is the major service provider in an area, it follows that the trust will be providing something approaching the full range of health services. In other circumstances, National Health Service trusts may make a more modest contribution to the overall level of service. In either case, there is no question but that patients will receive and have access to all the services they need.
Turning to the individual amendments under this grouping, perhaps I may take Amendments Nos.

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101AH and 101AJ first and then come to the noble Lord's amendment after that. Amendment No. 101AH would prevent Scottish teaching hospitals becoming National Health Service trusts. All types of hospital stand to benefit from self-governing status, which will encourage a stronger sense of local ownership and pride, and stimulate the commitment and initiative of those who are directly responsible for providing services. It would make no sense to exclude any particular type of hospital, least of all teaching hospitals, from this major opportunity.
As I have indicated, the Secretary of State will be able to specify teaching as one of a teaching trust's functions and the relevant health board will be able to make further stipulations about a trust's teaching role under the terms of the National Health Service contracts it makes with that trust. But there are further safeguards for teaching and research. To underline the importance which the Government attach to continued co-operation between teaching hospitals and universities, the Secretary of State will be required to appoint one of the non-executive directors of the teaching trust from the relevant university or medical or dental school. This will be possible, even if that academic holds an honorary contract with the hospital which would otherwise have made him or her ineligible to be a non-executive director.
There is nothing in the Bill, or the White Paper Working for Patients, which would in any way hinder the ability of a National Health Service trust to maintain full co-operation with a university, including such matters as the awarding of honorary contracts. Indeed, Schedules 2 and 6 explicitly state that National Health Service trusts have the power to provide training and to make staff and facilities available to universities or other bodies in connection with training. In the unlikely event —and this is important—of such arrangements appearing not to be working properly the Secretary of State would be able to step in under his powers in paragraph 6 of Schedules 2 or 6 to issue appropriate directions to the trust.
Amendment No. 101AJ would require a Scottish hospital, because it was self-governing, to continue to provide all the services it was providing before. The National Health Service has two duties to fulfil. It must guarantee the continued provision of essential services but it must also look to the future in terms of developing services, adapting to changing needs and making the best use of resources. While change can be painful, it is clearly essential for health bodies to have the freedom to develop new specialties, build new units and, where appropriate, run other units down. If anyone suggested that all hospitals should continue in perpetuity to provide the same services they are providing now, they would not be taken seriously.
Yet this is the same—I have to say—rigid prescription that I believe is embodied in the spirit behind the amendments we are discussing, particularly Amendment No. 101AJ. Trusts, like other National Health Service hospitals, need to be able to adapt to changing circumstances.
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Perhaps I may turn to Amendment No. 100F, which was proposed by the noble Lord. It would require trusts in England and Wales to provide the services which RHAs and DHAs specify. Again it makes specific mention of teaching and research. I hope I have already made clear that what this amendment seeks will actually happen in practice. Trusts will be required by law to provide the services specified in their establishing order and will be under contract to provide services demanded by health authorities. Indeed, to be viable, trusts will have to sell services to health authorities, since they will be the dominant purchasers. It will be a question of authorities paying the trust piper and thus calling the tune.
I am sorry to have spoken at such length but these three amendments are slightly different. I know that the Committee will appreciate that it is important to give a full explanation. As the noble Lord said that this was a probing amendment, I hope that I have given enough information to reassure him.
Lord Carmichael of Kelvingrove: The Minister mentioned two amendments standing in my name. I was pleased with the explanation that he gave. He has gone a little further than his honourable Friend went in Committee in another place, but he still has not gone quite far enough in terms of the representation of a member of the teaching staff on the board of the hospital as a non-executive director. The Minister has given us all kinds of assurances on this matter. I take his word for it that one of the teaching staff will always be a non-executive director. However, the Minister will be aware that his word is not binding.
I cannot find on the face of the Bill any specific reference to such appointments. The White Paper said that non-executive directors in teaching hospitals would need to include someone who was drawn from the relevant medical school. I have checked this matter because of what happened in Committee in another place, but perhaps the noble Minister can clear it up.
Lord Sanderson of Bowden: I shall have the natter checked, but it is my understanding that the Secretary of State will be required to appoint as one of the non-executive directors of the teaching trusts someone from the relevant university, medical school or dental school. I hope that that reassures the noble Lord.
Lord Walton of Detchant: In the light of the assurance given by the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 100G and 101 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 101ZA:
Page 67, line 14, after ("its") insert ("audited").
The noble Baroness said: These amendments are essentially technical in nature. They relate to the information which trusts will have to present at their annual meetings. The Bill currently provides that the trusts' annual accounts shall be presented to those meetings. It is clearly right that those accounts

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should have been subject to proper audit before they are presented. The first amendment provides for that. It will, of course, be the responsibility of the Audit Commission to audit the accounts of the trusts.
We also believe that it is important that where an auditor issues a report in the public interest on the accounts of a trust, that too should be presented at a public meeting, or else its force will be lost. I hope and expect that such reports will be rare because they would reflect serious failings or improprieties by a trust. Nonetheless, it is right that where such a report is made on a trust it should be presented publicly, just as it would for a health authority. I beg to move.
On (Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 101ZB:
Page 67, line 14, after ("report") insert ("and any report on the account;; made pursuant to subsection (3) of section 15 of the Local Government Finance Act 1982").
On Question, amendment agreed to.
[Amendment No. 101ZBA not moved]
Lord Butterfield: I am sorry to interrupt the Committee but I was hoping that I might be able to speak to Amendment No. 101A which we seem to have passed over.
Noble Lords: That comes later!
Lord Peston: I am not sure whether one is allowed to intervene on a procedural matter, but I should say that Amendment No. 101A was grouped with Amendment No. 100G. The noble Lord, Lord Pitt, was not present when Amendment No. 100G was called. We are hoping that when we reach the other amendments in that group we can proceed. I hope that that is agreeable to the Committee.
8.45 p.m.
Lord Ennals Lord Ennals moved Amendment No. 101ZC:
Page 68, leave out lines 5 to 8.
The noble Lord said: On a number of occasions both in another place and certainly in this Chamber, the Secretary of State and his Ministers have assured us that this Bill is not designed to privatise the National Health Service or even to prepare it for privatisation. Yet repeated assurances have not killed the concern. Part of the concern is caused by the paragraph that I seek to delete. It states:
"According to the nature of its functions, an NHS trust may make accommodation or services or both available for patients who give undertakings (or for whom undertakings are given) to pay, in respect of the accommodation or services (or both) such charges as the trust may determine".
At this stage I am only probing, but I find those lines disturbing. It seems to me that an NHS trust would be empowered to sell its accommodation — accommodation presumably means the buildings of an NHS trust —or its services. It could perhaps rent out the accommodation. That matter is not clear to me. I have glanced through the Bill, but I can find no similar right to sell services to the private sector accorded to those hospitals that are administered by authorities. I believe the right of a trust to sell
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whatever of its services or accommodation to the private sector that it wishes is limited only by the discretion of the Secretary of State. Nowhere can I find the obligation on a National Health Service trust to meet the health care needs of its local population being given priority over the private sales that I have just referred to. Any reference to any obligation on a trust to provide NHS health care is absent. In theory such a hospital could sell any part or even all of its NHS services to the private sector. That is restricted only by the Minister's discretionary powers. Perhaps that is not the intention of the Secretary of State and perhaps I am misreading this part of the Bill. However, I am sure that the private sector can and will bid for part of the NHS services. I should imagine that if the private sector had that opportunity, it would bid for the best medical opinions, the best operations, investigations and other things that the NHS can offer. I find that disturbing.
I hope that the Minister will be able to convince me that I have misread what I have termed "the privatisation clause". Perhaps it can simply be deleted. If it simply concerns pay beds or some similar matter, presumably the Minister will explain that. However, as long as the provision remains in the Bill in this form some suspicious people will think it is a part of the Bill which is in a sense a gateway, controlled only by the Secretary of State, through which the whole pantechnicon of privatisation can ultimately flow. It could be an administrative virus that is inoffensively tucked away in a little schedule of the Bill. However, perhaps I am being too suspicious. I beg to move.
Lord Sanderson of Bowden: I hope to prove to the noble Lord that his fears are without foundation. These amendments would create an anomaly in the National Health Service because they would deny to National Health Service trusts the right that is enjoyed by all directly managed hospitals to provide pay and amenity beds. This power allows hospitals to generate useful income for the benefit of patients as a whole; increases choice for patients and reduces the burden on the NHS.
We believe that this amendment will be of no help to patients and it could indeed harm their interests and put trusts at a disadvantage compared with NHS hospitals. I could understand the concerns underlying the amendment if there was any possibility that a hospital's pay bed work could harm its National Health Service functions. In fact pay and amenity beds have been provided in National Health Service hospitals for some years, as the noble Lord knows, without in any way undermining the interests of the National Health Service patients.
There are various reasons for that, including the power of the Secretary of State to intervene if National Health Service patients' interests are seen to be at risk and the fact that all National Health Service hospitals must conform to a detailed code of practice on the provision of pay and amenity beds.
Similar and very explicit safeguards will apply to National Health Service trusts. First, as the noble Lord said, subsection (6) of Clause 5 and of the

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equivalent Scottish NHS trust clause in the Bill makes it clear that a trust's power to provide pay and amenity beds can only be exercised if it does not to any significant extent interfere with the performance of its obligations under the National Health Service contract.
Lord Ennals: Perhaps I may ask the Minister whether the clause uses the term "pay and amenity beds". I could not find it anywhere.
Lord Sanderson of Bowden: I need to look that up. Perhaps I may finish and then check that point.
Secondly, the Secretary of State will be able to direct National Health Service trusts on any aspects of their provision of pay and amenity beds if that appears necessary. Thirdly, under the Bill the Secretary of State can direct trusts to comply with any guidance issued to health boards. We intend that National Health Service trusts should comply with the code of practice which I have already mentioned.
Apart from the provisions relating specifically to pay and amenity beds, I remind the noble Lord of the very detailed specification which will be made concerning the National Health Service services which are to be provided by every trust and which will firmly establish the National Health Service trusts' prior commitment to their National Health Service work.
As I have mentioned in relation to previous amendments, the Secretary of State will have a duty to specify in the establishing order all the National Health Service functions which he considers a particular trust must provide. Furthermore, the range of National Health Service services which a trust will have to provide will be spelt out in the National Health Service contract under which it will provide services to health boards and other purchasers. Those contracts will not only detail which services are to be provided, but will specify quality, outcomes and monitoring. In practice therefore it will be very difficult for a National Health Service trust to fall down on its National Health Service work without it very quickly being picked up and rectified.
I should not want to end on a negative note. It is important to emphasise the safeguards which exist, but I should also like to stress the positive side; namely, that National Health Service trusts will have a clear incentive to provide the best quality National Health Service services.
Turning to the noble Lord's intervention, he is quite right that the Bill does not use the term "pay beds"; but the wording follows that used for the equivalent power of the health authorities.
As a further explanation, paragraph 14 of Schedule 2 gives trusts the specific power to provide accommodation and services for paying patients. The separate provisions giving National Health Service trusts the powers specified in the Health and Medicines Act 1988 to undertake income generation activities include the power to provide accommodation and services for private patients.
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I shall look carefully to see whether as the noble Lord suggested, there is a loophole in line 5 of page 68. However, as I read it at the moment there is not a loophole. Nevertheless, I shall certainly consider the matter in order to see whether that is the case. I hope that from what I have said the intention of the Government is clear. With that assurance, I shall certainly look at the matter and see whether the clause needs tightening in any way.
Lord Ennals: I am grateful to the noble Lord for his detailed explanation. He went through it at a cracking rate. I do not criticise him for doing so. I shall have to read very carefully what he said. He will obviously have to do some careful reading. I have a little document that I can send him to help him in the course of that reading.
It may be that he will feel on reflection that the term "pay beds", which is an accepted term and is understood, is one that might find its way into the Bill. The Government ought to use every legitimate means at their disposal. If it is not their intention to use any part of this Bill for any part of privatisation, they should let the world know that. One of the ways of letting the world know is to write something in the Bill which makes it specific. That was what I wanted to do in moving this particular amendment.
Perhaps together we can come back with something that writes this very important principle into the Bill very clearly. It is one thing for Ministers to say, "Don't worry, we have no intention of doing this". That is a very different matter from having it in the Bill. At some stage there may be another Secretary of State —and I am not thinking of one from this side of the House—in some other place who does want to privatise the NHS and who might use the facilities here to do it in this way.
If we both agree to look at the matter very carefully, I am happy to withdraw the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 101ZD were agreed to, it would pre-empt Amendments Nos. 101 A, 101AZA and 101AA and I should not be able to call them.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 101ZD:
Page 68, leave out line 23 and insert:
("(d) to employ such staff as the trust may require to fulful its duties under this Act on terms and conditions no less favourable than those recommended by the General Whitley Council and any relevant Pay Review Body recognised by the Secretary of State in relation to specific groups of staff.").
The noble Lord said: In speaking to the amendment, I wish also to speak to all of the other amendments which are grouped with it. From the very inception of the National Health Service, a fundamental principle has been a uniform distribution of standards of provision. A crucial factor in determining improved equality of care has been the distribution of consultants in the service.
Salary and terms and conditions of service have always been of considerable importance in ensuring

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that even geographical spread. As long ago as 1948 the report of the inter-departmental committee on the remuneration of consultants and specialists noted that equality could be achieved only by increasing the mobility of specialists throughout the service and facilitating the interchange of staffs between teaching and non-teaching hospitals. The report emphasised the great importance of regional hospital centres not being inferior to teaching centres, stating that both should be able to attract specialists of the highest calibre and concluding that the same range of remuneration for clinical work should apply to specialists in both teaching and non-teaching hospitals. In that regard the health service has been extremely successful.
Forty years later those same considerations continue to apply. Inequality in the provision of health care was identified as a major problem before the introduction of the NHS. In medicine the movement away from national salary scales could result in the best consultants being concentrated in areas where the highest salaries were to be paid and a consequential reversion to inequality of standards. National terms and conditions of service and salaries therefore provide considerable protection for both patient care and the medical profession. The terms of consultants' contracts give them freedom to exercise judgment in clinical matters.
Perhaps of even greater importance is the question of mobility, especially for junior staff in training. It is important that junior hospital doctors should be enabled to move between different hospitals. However, if they do so, they must surely be secure in the knowledge that they will not suffer from fluctuations in basic salary. Extensive experience must be available to all hospital staff to provide equality of opportunity.
What is of even greater importance is the position in teaching hospitals where clincal staff employed at all levels —training grades and consultant grades —in the NHS work alongside, on equal terms with, university academic staff of clinical departments who are carrying out almost identical work in patient care, teaching and research and whose salary scales at present equate with those in the National Health Service. If self-governing trusts were in a position to provide differential salary scales, there would be serious problems in the inter-relationship between those paid on the one hand by the National Health Service and those paid on the other by the universities. That would give all of us very great anxiety.
The existing national negotiating machinery has many major advantages. First, it makes economic and administrative sense. Local pay and conditions bargaining would involve considerable manpower and time on the part of health managers and representatives of the professions involved and similar negotiations would be occurring across the country in all self-governing hospitals using major NHS resources.
Structures have evolved over many years to deal effectively and objectively with NHS salaries and terms and conditions of service. The independent Doctors and Dentists Review Body was set up in
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an attempt to avoid recurrent pay disputes. More recently a similar review body for members of the nursing professions has also been established with the objectives of arriving at settlements that are fair both to the profession and to the taxpayer. Despite some problems, the system has retained its credibility and I hope very much that it can be preserved.
To turn to the details of the amendments themselves, Amendment No. 101ZD would simply require that staff should be appointed and remunerated in self-governing hospital trusts on salary scales not inferior to those agreed by the general Whitley Council and the review bodies for the professions.
The noble Lord, Lord Butterfield, will be proposing Amendment No. 101A, which, if it were passed, would effectively make it clear that only non-clinical staff could be employed on other than national salary scales. Amendment No. 101AA, also standing in my name and that of the noble Lord, Lord Rea, would mean that staff would be employed in the medical and other caring professions—indeed in all NHS grades —only on nationally agreed salary scales and terms and conditions of service, subject only to the provision that local allowances could be paid to assist for local reasons in the recruitment and retention of staff These are in a way linked amendments, all with the similar objective of not losing the enormous advantages which the National Health Service has gained by having nationally negotiated terms and conditions of service and salary scales. I beg to move.
9 p.m
Lord Carmichael of Kelvingrove: In supporting this group of amendments, I do not think I can do as well as the noble Lord who has just spoken. On going through the amendments, I should like to emphasis to the Minister the difference in the Scottish amendment. After all, in the Bill we are not starting new legislation but amending an existing Scottish Act, the 1976 Act. Amendment No. 101KA refers to the schedule and I should like to stress that that would be included in the same group for the same reasons. I am very glad to be able to say that one of the good things about the health service is that national agreements have given us relatively good stability in the service and I hope that that continues.
Lord Butterfield: I should like to speak to Amendment No. 101 A. I deliberately chose to reduce to a minimum the interference with the Bill by inserting "non-clinical" in this way. It would mean that the leaders of trust hospitals keep their salary offers in line with those which have been nationally agreed. I am grateful to my noble friend Lord Walton for his very able introduction of this clutch of amendments.
I was hoping to show that my amendment might provide a means of achieving some reconciliation between the profession and the Secretary of State. All through the run-up to this debate there has been an innuendo that the inevitable consequence of developments in trust hospitals must be a tiering of the quality of service as between the trust and the

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other hospitals. I have not been susceptible to that argument. It has always seemed to me that the quality of hospital care in any place depends on the people there, and at certain stages of their careers consultants are more up to date and more lively than at others. I imagine there is an infinite graduation of the standard of care in any hospital with the passage of time, and also between hospitals.
My area of concern has been illuminated very well by my noble friend Lord Walton. In the days when I was a schoolboy, if you wanted a second opinion in Warwickshire you probably went on a train to Harley Street. One of the great triumphs of the development of the National Health Service, from the days of Nye Bevan onwards, has been that gradually over the intervening 40-odd years since it was started the quality of care has been brought up on the periphery, so that, as was indicated, regional hospitals can have standards of care as good as one would find in the teaching hospitals.
I want to make it clear that that is the ethos that one finds in the medical profession, in the medical schools, in the nursing profession and among dentists generally. It is still possible to say to any young person completing his or her training, "I can assure you that in terms of your contribution to the people of this country it does not matter where you work: it is the quality of work that you perform which is going to make its mark".
I want slightly to extend the argument about the salaries settled upon by the review bodies. Incidentally, let me at this point assure the Minister that on those review bodies are just the kind of people I would expect to find, as we all would, among those serving on the administrative bodies of the trust hospitals.
The noble Lord, Lord Carr, has asked me to apologise because he cannot be here. He was in the Cabinet in 1971 which set up the Doctors and Dentists Review Body. On that body and also on the body concerned with the midwives, nursing and ancillary professions and the health visitors review body there are people from the large accounting companies and people who are great captains of industry—the admirals of industry one might almost say—as well as experts in industrial relations, insurance and pay scales generally.
I am intrigued—I hope the noble Baroness will not mind if I pull the Government's leg over this—that these people were deliberately set up to report to the Prime Minister. I hope that the Prime Minister does not mind that there is now a risk that that direct link will be bruised if the trust hospital administrators take advantage of their new-found authority.
At one time or another during their careers 60 per cent. of consultants will receive merit or distinction awards in addition to their basic salary. They are most carefully monitored; they are the beginning of the idea of professional audit. I was chairman of such a committee for East Anglia. Each year I and the committee went through the names of all the consultants in all the specialties in East Anglia. We looked at their track records and decided whether
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to recommend them for an augmentation of their salaries.
I wish to point out that in doing so we were anxious to try to equilibrate the proportion of every specialty as regards the consultants who were receiving distinction awards. Up and down the country as a whole —including Scotland, Wales and Northern Ireland—persistent efforts are made by those concerned to ensure that across the country there is an equality of reward for merit and distinction. Many of us in the profession are worried about that —it is hardly spoken about —and for that reason I wish to make what I hope is a helpful suggestion. People are worried by the fact that perhaps the trust hospital authorities will disturb the careful and smooth distribution of our best and most able graduates throughout the country.
I have already told the Committee that I qualified at Johns Hopkins University in America. The dreadful thing about the American scene—and I say so without offending my American doctor friends because they all recognise it to be true—is the maldistribution of specialisms and high quality care. There are fewer than 100 citizens on Manhattan Island per specialist doctor. We have 3,000 people per consultant spread evenly across the country.
I do not wish to drive the point too hard but I do not know that many doctors in this country wish to have said of them what is said about the medical profession in New York whenever one asks a New York taxi driver what he thinks about the doctors. We shall be assured that that will not happen if all doctors in the NHS—and let us remember that the trusts are in the NHS—have the same basic salary scale.
I do not wish to inhibit trust hospitals helping the people who work for them in any other way. I may be wrong but my experience shows that NHS hospitals cannot hold trusts for research. If there are trusts for research in ordinary, that is district, hospitals they must be held outside the hospitals' accounting systems. Throughout the development of the Bill I assumed that, like the old board of governor hospitals, the trust hospitals would be able to have trusts under their authority. That was one of the ways in which the great board of governor hospitals were able to conduct such a wide-ranging research programme. When they were drawn in under the NHS the able men in the teaching hospitals passed those trust funds over to their medical school as a way of ensuring that the rules were not broken. I imagine that when the trust hospitals come back—I do not worry about them because I had a happy time at Guy's as a board of governor hospital—it is almost certain that they will be in a position to raise money for their research and different activities. In that way the trust hospitals will be able to ensure that their able people receive the kind of help and remuneration that they want.
I was about to suggest—and I do not mean it entirely in jest—that there are various ways in which the Secretary of State and the department can bring help and reward to its staff. As regards the NHS consultants, one way might be by helping them with resources for their private patients. I can imagine that perhaps medical beds are being used during the

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summer and might be made available to ear, nose and throat or ophthalmic surgeons. Under those arrangements some private patients may obtain pay beds. As regards the teachers in trust hospitals, nothing would make them happier than the prospect of the hospital giving them sabbatical leave. That is extremely difficult to obtain even under the university regulations. As regards the true academics and the research workers, research facilities could be given They attract the large number of applicants for posts in the old board of governor hospitals and still attract them to the main teaching centres.
I wished to end by indicating my keeness to achieve reconciliation. I hope that the Secretary of State will not consider it impossible that, rather than having Nobel prizes in the trust hospitals, they might have Kenneth Clarke prizes. If the individual wants it, this might be a new motor car; a more discerning person might want a valuable oil painting.
It seems to me—and this backs up everything said by my noble friend Lord Walton—that if we can possibly maintain a smooth and even distribution so that there is no feeling of jealousy between the peripheral hospitals and the district hospitals and the centres of excellence that are likely to arise and if we can avoid any jealousy over basic salaries, we shall breathe more easily about the future prospects for the health service. I beg to move.
9.15 p.m.
Baroness Hooper: We believe that the amendments proposed would compromise trusts' freedom to manage their own affairs and to determine the terms and conditions of service for all their employees, which we believe to be an important—not to say fundamental—part of the greater freedom that we are giving to trusts.
In this context it is important to remember that the introduction of contract-based funding will exert a powerful moderating influence on pay in National Health Service trusts. Trusts will compete with other National Health Service providers of services, both other trusts and directly managed hospitals, for contracts on the basis of quality and cost. So trusts which pay exorbitant salaries, whether to medical staff or others, are likely to price themselves out of work. Our intention is to give all units the greatest possible measure of freedom to operate to their maximum effectiveness. The contractual process will ensure that those freedoms are exercised so as to bring maximum benefits to patients.
Amendment No. 101A, to which the noble Lord, Lord Butterfield, spoke, is aimed at exempting clinical staff only from the general freedom that we intend for trusts. I have listened with interest to the reasons that have been set out for adopting that approach. I understand the concern that has been expressed that trusts might offer very high salaries to clinical staff and therefore affect the standard of services offered in other units by enticing staff to their employment. However, I do not believe that allowing trusts to determine their own terms and conditions will lead to that. After all we are gradually introducing pay flexibility in all parts of the NHS to ease recruitment problems and reward skills and performance, and I believe that the greater freedom
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which we are giving trusts in this respect will be used wisely by them to the ultimate benefit of patients. Furthermore those to whom this freedom will be given will already have demonstrated their capacity to make proper use of the whole range of freedoms which trust status confers.
I also believe that excluding clinical staff in that way from the general freedoms being given to trusts to set their own terms and conditions of service would be wrong in principle as well as practice. It has often been said that teamwork is at the heart of medical practice and leads to the high standards of care on which we pride ourselves in this country. This proposal could be inimical to the continuation of such teamwork in trusts and would lead to claims of double standards in relation to pay arrangements. Furthermore, it would seem perverse for clinical staff, however defined, to be unable to benefit from any improved terms and conditions of service which a trust might wish to make available to its staff. I understand the points being made about the need for a common approach to setting terms and conditions of service for clinical staff on a national basis, but I believe that it is much more important for there to be a common approach to setting the terms and conditions for all staff working in a trust.
I should like to reassure the noble Lord, Lord Butterfield, on one or two of the points that he raised. With regard to merit awards, I can assure the Committee that the staff of National Health Service trusts will remain eligible for distinction awards administered by the advisory council in the same way as at present. There is a specific power of direction in the Bill to ensure that that happens.
I believe that the noble Lord also suggested that National Health Service trusts cannot hold money on trust.
Lord Butterfield: My point is that I believe that trust hospitals will be able to hold trusts and that the district non-trust hospitals will not be able to do so. That is something that we need to see resolved because it will tell us whether it is worth while going into a trust hospital to try to raise money for the various things that one may want to do there. That, I believe, is inherent in the notion of a trust hospital. As I understand it from my experience in East Anglia, if one is in a district hospital one is unable to hold any trust moneys in the hospital's own budget and one has to operate from outside. That means that one is setting up sub-divisions of all the charitable organisations that are being run centrally by excellent organisations in London.
Baroness Hooper: I must have misheard the noble Lord previously. I was about to reassure him of what he already knows: that National Health Service trusts can hold money on trust.
Lord Peston: I believe that I am right in saying that a National Health Service trust of the kind which the noble Baroness is about to introduce in the Bill is not a trust in a legal sense. It therefore cannot hold money on trust. The point is completely wrong. Many of the great teaching hospitals have trustees who have such "free" money. If they wish for research funds the NHS trust hospitals will have

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to set up similar trusts. One is using the word "trust" in a quite different sense. We ought to get the point right. I do not fully understand it, but I believe that what I have said is right.
Baroness Hooper: I agree that the term "National Health Service trust" does not mean "trust" in the legally defined sense. Nevertheless when I say that National Health Service "trusts" can hold money on trust, it would obviously involve setting up a special trust fund. There is no doubt about that. They are empowered to do so by Clauses 11 and 32 of the Bill. I hope that we are all relatively clear on that point.
It has been suggested that the technical effect of Amendment No. 101A might be totally to prevent trusts from employing doctors. I regret to tell the noble Lord, Lord Butterfield, that the amendment could be interpreted as going further than merely restricting their power to set pay and conditions at any level.
I should also like to deal with the point raised by the noble Lord, Lord Walton, with reference to the mobility of junior doctors. We made it clear in the publication SelfGoverning Hospitals an Initial Guide that regional health authorities will be responsible for determining the arrangements for rotational training programmes, which, like all training posts, will continue to require educational approval by the royal colleges. I hope that the noble Lord, Lord Walton, will accept that the establishment of trusts will not affect the current arrangements for providing this rotational training. I hope that that goes some way to reassure him.
On the specific amendment, two amendments would also give trusts limited flexibility to move away from nationally agreed terms and conditions of service for their staff although as a minimum both would require the trusts to meet the nationally agreed terms and conditions. I am confident that trusts will use their greater freedom in that area wisely and carefully. They will be committed to delivering a high quality of patient care and will wish to recruit and retain the right quality and mix of staff to achieve that. If their terms and conditions of service are perceived to be inadequate, they will have difficulty in so doing. However, we do not believe that trusts should be tied statutorily to providing terms and conditions of service no less favourable than those agreed nationally. Rather they should have the flexibility to determine their terms and conditions in the light of their own circumstances.
Similarly I do not accept that trusts should be able to deviate from nationally agreed terms and conditions of service only by paying local allowances. Apart from the more general arguments that I have set out, such an approach would prevent trusts from offering non-financial benefits such as improved leave arrangements to help recruit and retain staff.
Amendment No. 101AZA falls within that grouping. It is perhaps the most basic in the whole group of amendments because it requires trusts to employ all their staff on nationally agreed terms and conditions of service. To do that would take away completely the very important freedom which we
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think is part of the raison d'étre of the creation of trusts and is one of their most distinguishing features. It would lock them into the rigidities of national bargaining and stifle their ability to provide the best deal for their staff in response to their local circumstances.
I trust that I have said enough to convince the Members of the Committee who have proposed these amendments to withdraw them.
Lord Ennals: Before the noble Lord who proposed the amendment replies, perhaps I may say that I found the Minister's reply very disturbing. It seems to me that if this new freedom is given for self governing hospitals to determine their own pay and conditions of service for medical staff without reference to national agreements, that is the way towards a two-tier service.
What is achieved by this flexibility—and the Minister spoke about the quality and conditions of service—is that if you get the best people, someone else will get the worst people. If you pay more, you get what you pay for. None of us knows how many of these trusts there will be. However, surely we shall find that the great NHS trusts with all this additional freedom will pull in the best people. What will then happen to the other hospitals? What is to happen to the rest of the health service? Is that not an absolute recipe for a two-tier service, which is what many of us have feared for a long time?
Furthermore, is it not going to be extremely expensive? Self-governing hospitals will need large and experienced personnel departments to deal with local negotiations and disputes. Let us not imagine that there will be no disputes to be settled. These days most can be settled at a national level. Local representatives of staff groups will find that negotiations will mean a considerable time commitment, and that is money—it always is. Those arrangements must be duplicated in every hospital where national agreements have been abandoned.
I found almost every word that the Minister said so cheerfully in giving freedom to this one group of trust hospitals utterly depressing for the rest of the health service. I am saddened by the whole tone of the Minister's response.
Baroness Hooper: At the outset I made it quite clear that National Health Service trusts will be competing with other National Health Service units in gaining contracts. If they price themselves out of the market they will not obtain the contracts necessary for their wellbeing.
In answer to the noble Lord's question as to what will happen to the other hospitals, in seeing the competition from National Health Service trusts, they will raise their standards in order to win the contracts themselves.
Lord Ennals: Does the Minister think that they will be able to do that if the best of the medical and nursing staff have been sucked into the trust hospitals? Will they be able to compete effectively for contracts with the trust hospitals? My fear is that they will not.
Baroness Hooper: We believe that, given the increased freedom and ability to manage their own resource, they will become more efficient and be in a better position to compete.
Lord Walton of Detchant: On many occasions in the course of our debates in Committee in relation to this Bill I have been greatly reassured by the answers which we have received from the Minister. However, I regret to say that on this occasion I cannot feel reassured. It is difficult to underestimate the strength of feeling in the medical, nursing and allied professions over the single issue of nationally agreed salary scales for staff in the NHS whether or not they serve in hospitals, under district health authorities or in self-governing trusts in the future.
The problems relate not only to the concerns which I and the noble Lord, Lord Butterfield, expressed, but also to the position of the review bodies for doctors, dentists and nurses and the problem of the university interface—the clinical university staff working alongside NHS staff. Hence, with the utmost and greatest reluctance at this late hour on a Thursday, I find it difficult to take any other course of action than to test the opinion of the Committee.
9.30 p.m.
On Question, Whether the said amendment (No. 101ZD) shall be agreed to?
Their Lordships divided: Contents, 17; Not-Contents, 36.

DIVISION NO. 3

CONTENTS

Butterfield, L.

Richardson, L.

Carmichael of Kelvingrove, L.

Robson of Kiddington, B.

Russell, E.

Carter, L. [Teller.]

Saltoun of Abernethy, Ly.

Ennals, L.

Stoddart of Swindon, L.

Hatch of Lusby, L,

Thomson of Monifieth, L.

Houghton of Sowerby. L.

Tordoff, L.

Hunter of Newington, L.

Walton of Detchant, L. [Teller.]

Hylton, L.

Peston, L.

NOT-CONTENTS

Arran, E.

Hives, L.

Balfour, E.

Hooper, B.

Belstead, L.

Kimball, L.

Blatch, B.

Long, V.

Brabazon of Tara, L.

Lyell, L.

Brougham and Vaux, L.

McColl of Dulwich, L.

Caithness, E.

Mills, V.

Caldecote, V.

Monk Bretton, L.

Carnegy of Lour, B.

Morris, L.

Carnock, L.

Mottistone, L.

Cork and Orrery, E.

Murton of Lindisfarne, L.

Craigmyle, L.

Reay, L.

Cross, V.

Sanderson of Bowden, L.

Davidson, V. [Teller.]

Strathclyde, L.

Denham, L. [Teller.]

Strathmore of Kinghorne, E.

Glenarthur, L.

Torrington, V.

Henley, L.

Trefgarne, L.

Hesketh, L.

Ullswater, V.

Resolved in the negative, and amendment disagreed to accordingly.
9.37 p.m.
[Amendment No. 101AB had been withdrawn from the Marshalled List.]
[Amendments Nos. 101A to 101AA not moved.]
[Amendment No. 101AC had been withdrawn from the Marshalled List.]
[Amendments Nos. 101AD to 101ADC not moved.]
Schedule 2, as amended, agreed to.
Clause 6 [Transfer of staff to NHS trusts]:
[Amendments Nos. 101AE to 101AF not moved.]
Clause 6 agreed to.
Clause 7 agreed to.
Clause 8 [Transfer of property, rights and liabilities to NHS trust]:
Baroness Blatch Baroness Blatch moved Amendment No. 101 AG:
Page 9, line 6, leave out from ("section") to end of line 7.
The noble Baroness said: This amendment need not detain us for long. The purpose is to delete two clauses of the Bill which would exempt NHS trusts from paying stamp duty on transfers of property. I beg to move.
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 101AGA:
Page 9, line 28, at end insert:
("( ) In the case of any transfer made by or pursuant to an order under this section, a certificate issued by the Secretary of State that any property specified in the certificate, or any such interest in or right over any such property as may be so specified, or any right or liability so specified, is vested in the NHS trust specified in the order shall be conclusive evidence of that fact for all purposes.").
The noble Baroness said: This is a technical amendment which seeks to ensure that all property which the Secretary of State transfers to NHS trusts is properly registered with the Land Registry on transfer. I beg to move.
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9 [Originating capital debt of and other financial provisions relating to NHS trusts]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 101AGB:
Page 9, line 365, leave out from ("assets") to ("over") in line 36 and insert ("which, on or in connection with the establishment of the trust, are or are to be transferred to it (whether before, on or after its operational date)").
The noble Lord said: In moving this amendment, I shall speak to Amendments Nos. 101AGC, 101AM and 101AN. This group of amendments simply makes it clear that the originating capital debt to a National Health Service trust takes account of the value of any assets transferred to the trust irrespective of whether the transfer takes place under an order under the new Section 12B(1) for Scotland or Clause 8(1) for England and Wales and irrespective of whether the transfer takes place before, on or after the operational date of the trust. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 101AGC:
Page 9, line 37, leave out from ("liabilities") to end of line and insert ("which are or are to be so transferred").
The noble Lord said: I beg to move.
Lord Hylton: Public dividend capital is mentioned at the bottom of page 9 of the Bill. Is that a device for extracting dividends from some super-efficient hospital; or, on the other hand, is it a way of avoiding paying loan interest on debt which might possibly be attributed to it?
Lord Sanderson of Bowden: That question has obviously been uppermost in the mind of the noble Lord for some time and I am glad that he has come to join us. I shall certainly seek to have this matter checked as quickly as possible; but so far as I am aware the whole object of the exercise here is that the amendment makes it clear that the originating capital debt of the National Health Service trust takes account of the value of the assets. Looking at the rate of interest of 6 per cent. which is available for National Health Service hospitals, it is unlikely that a National Health Service trust will go for a higher rate of interest.
I shall look very closely at what the noble Lord has said about dividends. I suspect that I shall have to write to him very urgently. I shall seek advice on what to say.
Lord Ennals: One must get a Treasury view on this issue.
On Question, amendment agreed to.
Clause 9, as amended, agreed to.
Clauses 10 and 11 agreed to.
Schedule 3 agreed to.
Clause 30 [National Health Service trusts]:
[Amendments Nos. 101AH to 101AK not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 101AL:
Page 34, line 50, leave out from ("section") to end of line 52.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 101AM:
Page 35, line 37, leave out from ("assets") to ("over") in line 38 and insert ("which, on or in connection with the establishment of the trust, are or are to be transferred to it (whether before, on or after its operational date)").
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 101AN:
Page 35, leave out line 39 and insert ("which are or are to be so transferred.").
On Question, amendment agreed to.
Clause 30, as amended, agreed to.
Clause 31 agreed to.
Clause 32 [Trust property of NHS trusts]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 101AP:
Page 37, line 15, at end insert:
("(4) Trustees appointed by virtue of subsection (2) shall cause proper accounts to be kept of the capital, income and
764
expenditure vested in, received by and expended by them; and shall cause such accounts to be audited and an abstract thereof to be published in such manner as the Secretary of State may approve.").
The noble Lord said: I should like to speak at the same time to Amendment No. 118D. This amendment specifies the arrangements for the keeping and auditing of accounts of the trustees responsible for the endowment property of NHS trusts. It parallels an amendment made at Report stage in another place to the equivalent English clause, which now appears as Clause 11(7) of the Bill. I beg to move.
Lord Peston: I do not wish to delay the Committee but the question of trusts arose a little earlier. I for one found it rather difficult. Would it be possible for the noble Lord to write to me and to other interested noble Lords clarifying the question of trust property, meaning trusts in the legal sense of NHS trusts? I should find it helpful to have that clarified. I do not seek to delay the Committee at the moment.
Lord Sanderson of Bowden: I shall be happy to do so and to explain in detail what the English amendments and the Scottish equivalents are.
On Question, amendment agreed to.
Clause 32, as amended, agreed to.
Schedule 6 [Schedules to be inserted after Schedule 7 to the National Health Service (Scotland) Act 1978]:
[Amendments Nos. 101B to 101E not moved.]
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 101EZA to 101EZC:
Page 79, line 38, leave out ("provision") and insert ("transfer").
Page 79, line 39, leave out ("by it") and insert ("to the trust").
Page 80, line 5, at end insert:
("(3) If an order makes the provision referred to in sub-paragraph (1) above, the order may require a Health Board to discharge such liabilities of the NHS trust as —

(a) may be incurred during the period referred to in that sub-paragraph; and

(b) are of a description specified in the order.").

The noble Lord said: These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
[Amendments Nos. 101EA to 101J not moved.]
[Amendment No. 101K had been withdrawn from the Marshalled List.]
[Amendment No. 101KA not moved.]
[Amendment No. 101L had been withdrawn from the Marshalled List.]
[Amendments Nos. 101M to 101Q not moved.] Schedule 6, as amended, agreed to.
Baroness Blatch: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Spitfire Quay (Southampton) Bill [H.L.]
Committed to a Select Committee.
Greater Manchester (Light Rapid Transit System) (No. 3) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.

Happisburgh Lighthouse Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at ten minutes before ten o'clock.