Lords Sitting of 12 June 1990

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

Baron Soulsby of Swaffham Prior
Ernest Jackson Lawson Soulsby, Esquire, having been created Baron Soulsby of Swaffham Prior, of Swaffham Prior in the County of Cambridgeshire, for life—Was, in his robes, introduced between the Lord Kimball and the Baroness Blatch.

European Community: Fraud
2.48 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they are satisfied with the resources at present available to detect and prosecute EC fraud affecting the United Kingdom.
The Paymaster General (The Earl of Caithness): My Lords, yes, but the situation is of course kept under review. The Government are particularly conscious of the need to ensure that, in allocating scarce resources, high priority is given to combating fraud and irregularities.
Lord Campbell of Croy: My Lords, I thank my noble friend for his Answer. Will the recent report from the European Court of Auditors help? That drew attention to particular incidents. Is it possible to ensure that prosecutions are not started without supporting evidence so that they do not collapse like the case last month at Winchester?
The Earl of Caithness: My Lords, yes, we welcome the report of the Court of Auditors on export refunds. We will look at it carefully. We have already taken some action to cover the deficiencies that were identified with regard to the United Kingdom.
On the second point that my noble friend raises, it is of course a fact that there might be a lot of evidence, but at the end of the day it is a question for the judge and jury on the weight of the evidence.
Lord Cledwyn of Penrhos: My Lords, does the noble Earl agree that this is a matter of the utmost gravity? Will he say what response he received from the Chancellor of the Exchequer when he approached him after I last raised the matter in the House on 30th April? Is not a White Paper giving the country and Parliament some idea of the range of the problem and the steps being taken by Her Majesty's Government to deal with it now very necessary as we approach 1992 and all the problems involved in that?
Can the noble Earl say whether the Government have in mind to set up a supra-national agency to
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deal with this, as was indicated some months ago by Mr. Peter Brooke when he held his previous office?
The Earl of Caithness: My Lords, I certainly agree with the noble Lord the Leader of the Opposition on the importance of the subject. I discussed the possibility of a White Paper with my right honourable friend the Chancellor of the Exchequer. We are still considering the matter and a decision has not been taken. However, there is a great deal of evidence in front of everybody at the moment. It is important to remember that this problem cannot be solved by the United Kingdom alone; it is a matter not only for all other member states but also for every country in the world that benefits from trade.
Baroness Robson of Kiddington: My Lords, is the Minister aware that the funding for the special fraud unit is now almost double the funding for the Court of Auditors? Is it not rather a matter of shutting the gate after the horse has bolted? Would not the right answer be to give increased funding and powers to the Court of Auditors?
The Earl of Caithness: My Lords, that is a question which the noble Baroness has asked me before. If I remember rightly, it is something that we might consider if there is a second IGC, which has still yet to be decided at the forthcoming meeting of foreign affairs Ministers.
Lord Boyd-Carptenter: My Lords, can my noble friend quantify the loss to the United Kingdom over the last year or two as a result of these frauds?
The Earl of Caithness: No, my Lords. It is extremely difficult not only to assess the level of fraud but also the amount of the loss. In 1989 13,206 cases were dealt with by the intervention board and Customs.
Lord Bruce of Donington: My Lords, I must apologise for being absent while the noble Earl gave his initial Answer. Have his replies taken into account the devastating report produced by the National Audit Office and published last Thursday? It stated:
"Failure of an element of the Board's accounting systems temporarily prevented effective debt management and the UK currently faces a potential disallowance of £1.3 million in respect of uncollected and aged debts".
Will the Minister say whether this report as a whole has been taken into account and whether action will be taken upon it?
The Earl of Caithness: My Lords, the report to which the noble Lord refers has been taken into account. We shall study it very closely.
The Viscount of Oxfuird: My Lords, will my noble friend say whether the auditors' report has been discussed in the European Council?
The Earl of Caithness: Yes, my Lords. As a result of an initiative by my right honourable friend the Chancellor of the Exchequer, the report was put on

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the agenda for discussion at ECOFIN yesterday. It was duly discussed and some useful presidency conclusions were agreed by everyone. It was agreed that a working party under the heads of representatives in Brussels should be set up to report both to the Agriculture Council and to ECOFIN ministers as soon as possible in view of the urgent nature of the report. I shall be at Strasbourg tomorrow to continue the good work of the United Kingdom's initiative.
Lord Benson: My Lords, is the noble Earl aware that in the past 16 months there have been no less than three reports? There was the Select Committee report of 21st February 1989, the Court of Auditors report of 5th April 1990 and the report of the National Audit Office issued last week on 5th June. All the reports draw attention to numerous examples of failure to detect and prosecute fraud in the United Kingdom. Will the noble Earl be good enough to tell the House what machinery is in post or is proposed to clear up these deficiencies in administration?
The Earl of Caithness: My Lords, I agree with the noble Lord that there have been three reports in the recent past. I am sure the noble Lord agrees with me that there has never been such an intensive effort on this matter within Europe as has occurred during the past 12 months. We agree that that is not enough, however. We know that every country has a lot to do, and we know that the Commission has a lot to do to put its house in order. However, we have taken action and we shall continue to study the reports. Where there is a need to take further action we shall do so.

Carbon Dioxide Emissions
2.55 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What measures they are taking to reduce carbon dioxide emissions from vehicles.
Viscount Davidson: My Lords, carbon dioxide emissions are directly related to fuel consumption. The Government already encourage motorists to keep fuel economy in mind and we are considering whether further measures are appropriate. We are also awaiting proposals from the European Commission.
Lord Hatch of Lusby: My Lords, I have two questions for the noble Viscount. First, is he aware that on 30th April the Secretary of State for Transport declared to a conference held by the Worldwide Fund for Nature that no substantial reduction in carbon dioxide emissions from vehicles could be expected over the next 20 years? Does that not suggest a conflict in policy between the Department of Transport and the Department of the Environment? Secondly, will the noble Viscount tell the House why the British Government have chosen the year 2005 as a target for stabilising emissions whereas the rest of Europe, except for Spain, has chosen the year 2000?
Viscount Davidson: My Lords, I am afraid that I was not at the conference to which the noble Lord refers. However, if that is the estimate of my right honourable friend I have no reason to quarrel with him or to differ from him. As regards the second part of the question, the Government are taking a realistic view of what is achievable by the year 2005.
Lord Renton: My Lords, does not the first Answer of my noble friend clearly indicate that the amount of carbon dioxide produced by any vehicle driven by oil or petrol depends on how it is driven? Will the Government consider including within the Highway Code advice on minimising the production of CO2 if I send them some suggestions?
Viscount Davidson: My Lords, I look forward to hearing the suggestions of my noble friend. We have urged the Commission to look into ways of reducing CO2 emissions from vehicles and it is now committed to doing so. Meanwhile CO2 emissions can be minimised by improving fuel consumption. We urge motorists to keep fuel economy in mind. Smooth, careful driving and good regular vehicle maintenance are the key.
Lord Ezra: My Lords, does the Minister agree that carbon dioxide emissions from vehicles could be minimised by diverting more passengers to public transport with its larger carrying capacity? Does he further agree that that should be part of government policy?
Viscount Davidson: My Lords, I look forward to hearing the noble Lord advise me how I can divert people from private cars to public transport.
Lord Carmichael of Kelvingrove: My Lords, are the Government still involved in the development of the lean burn engine as well as the catalytic converter? The Minister will be aware that perhaps the best way of reducing emissions of carbon dioxide from internal combustion engines is a combination of the two. Have the Government made any effort to discuss with governments of other countries ways of encouraging the production of smaller cars? One feels that large cars which mostly carry single individuals must be wasteful.
Viscount Davidson: My Lords, the Government recognise that the lean burn engine is one of several technologies that can show improved fuel efficiency and thus lower CO2 emissions. We are keeping a close eye on efforts in the motor industry to develop lean burn engines that would also be able to meet the emission standards for carbon monoxide, hydrocarbons and oxides of nitrogen that have been set for the European Community. As regards small cars, the Government are looking at that matter, at the moment.
Viscount Cross: My Lords, will my noble friend say whether Her Majesty's Government recommend the tuning of engines for maximum efficiency? Will he also confirm that, most regrettably, catalytic converters and "green" petrol provide fewer miles to the gallon and, therefore, greater discharges of

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carbon dioxide into the atmosphere for any given distance?
Viscount Davidson: My Lords, I am not the scientist that my noble friend is, but my right honourable friend the Secretary of State for Transport disclosed in an interview in the Independent of 8th June some of the ideas he is considering for controlling CO2 emissions from road transport. One of those, the MOT testing of vehicle emissions, has already been agreed with the Prime Minister and other colleagues.
Lord Stoddart of Swindon: My Lords, is the noble Viscount aware that one measure which is certain not to persuade more people to use public transport is the building of more and larger roads? Is he aware that county councils up and down the country and his own department propose huge capital expenditure on roads which will simply attract more private traffic? Would it not be better if that money was spent on providing a proper infrastructure for public transport, both in town and elsewhere?
Noble Lords: Hear, hear!
Viscount Davidson: My Lords, that goes rather wide of the Question. If all road-building were to stop, congestion would continue to increase and accidents and pollution would increase with it. One cannot just wish a problem away. The department would be overwhelmed by people who have been waiting years for bypasses and now see their hopes dashed. I cannot agree with the noble Lord.
Baroness Nicol: My Lords, when the noble Viscount said that the Government are keeping a close eye on the development of lean burn engines, what exactly did he mean? Are they offering inducements for the development of such engines or is there some other way of keeping a close eye on the matter?
Viscount Davidson: My Lords, there is only one way of keeping a close eye on it, and that is keeping a close eye on it. I said that we were keeping a close eye on developments.
Lord Molloy: My Lords, would it be possible for the Government at least to consider having talks with the larger district councils, the metropolitan boroughs and the London boroughs to see what can be done to improve standards of public transport and so make a contribution to easing the problem?
Viscount Davidson: My Lords, I am grateful to the noble Lord for that question, but it is rather wide of the Question on the Order Paper.
Baroness Sharpies: My Lords, does my noble friend agree that animals such as cattle produce one-third of the total carbon dioxide emissions within the global system and that it would be rather more difficult to cope with that problem than with the motor car?
Viscount Davidson: My Lords, I do not think that I can answer that question.
Lord Hatch of Lusby: My Lords, the noble Viscount says that the British Government have asked the European Commission to look at the matter. Is it not a fact that the environment commissioner has stated that the year 2000 is the very latest by which carbon dioxide emissions should be stabilised and that the British Government have disagreed with him? If the noble Viscount is looking for means of improving public transport, will he consider transferring the £2·8 billion subsidy allocated to company cars each year to improving public transport facilities?
Viscount Davidson: My Lords, I believe that that last question amounts almost to a record for being wide of the Question on the Order Paper.
Noble Lords: No!
Viscount Davidson: My Lords, it is wide of the Question. The Government are committed to applying strict European Community standards. We understand that the Commission has now proposed a consolidated directive on emissions of the regulated pollutants but we still await the final text. The directive will require catalysts for all types of cars from 1992. It will set standards for evaporative emissions and will introduce an extra urban driving cycle into the test procedure. I have already answered the point about the difference between the year 2005 and the year 2000 by saying that the Government are taking a realistic view of what is achievable.

Inflation: Policy
3.04 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
When they will achieve their declared intention of zero inflation.
The Earl of Caithness: My Lords, the Government remain firmly committed to the defeat of inflation. Tight monetary and fiscal policies will ensure that inflation falls from its current level.
Lord Dormand of Easington: My Lords, will the Minister accept that we on this side of the House appreciate that the Government have reduced inflation? They have reduced it from 10.3 per cent. in 1979 to 9.4 per cent. in May 1990. It has taken only 11 years to reduce it by 0.9 per cent.! As high interest rates have now been in operation since 1988 and are affecting inflation at the same rapid rate, will the Government stop talking nonsense about zero inflation and look at the way in which other countries are successfully tackling inflation without relying solely on high interest rates?
The Earl of Caithness: My Lords, I know that the noble Lord will be keen to know that for much of the 1980s the UK inflation rate was below that of

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the Community average. The noble Lord will also be pleased to know that at ECOFIN yesterday everybody said that tight monetary policy—meaning high interest rates—to counteract inflation and a tight fiscal policy were the two ways of improving the stuation.
Lord Grimond: My Lords, would it not help if, by way of example, some of those who are exceedingly well paid stopped taking enormous increases in salary every year?
The Earl of Caithness: My Lords, there is indeed a link between unearned wage costs and inflation. However, there is a much greater and longer link between unemployment and higher wage costs.
Lord Williams of Elvel: My Lords, did the noble Earl imply that some of the increases which chairmen and directors of public companies have awarded themselves are unearned?
The Earl of Caithness: No, my Lords. I did not imply that at all, as the noble Lord knows full well.
Lord Donoughue: My Lords, is the Minister aware of, or if he is not will he promise to read, the recent publication by Kleinwort Benson Securities, one of the Government's most loyal supporters in the City, which shows that the largest single element producing an increase in inflation in the past year—a third of the total—is induced by the Government's own actions in raising prices? Will he tell the House how he reconciles the Government's actions in raising prices with their rhetoric about reducing inflation?
The Earl of Caithness: My Lords, I have not read the docuent to which the noble Lord referred. Therefore it is difficult for me to answer the question because it was rather general. However, I shall be happy to try to do so when I have a moment.
Lord Bruce of Donington: My Lords, is the noble Earl aware that it lies in the Government's own hands to bring a substantial and immediate reduction in the annual rate of inflation, at least to the extent of 3.2 per cent. which is by no means negligible? Is he aware that they could do so if they decided to reduce value added tax from its current 15 per cent. to the rate of 8 per cent. which applied when they took office?
The Earl of Caithness: My Lords, it would be possible to reduce inflation by the means that the noble Lord suggested. It is the first time that I have heard anybody on those Benches suggest a tax cut.
Lord Bruce of Donington: My Lords, the noble Earl should be aware that this subject was dealt with by the Minister for the Department of Trade and Industry on 9th June 1988 when he confirmed the reduction of the figure by 3·2 per cent. Does the Minister agree that that is not negligible?
The Earl of Caithness: My Lords, I have never said that it was negligible. As the noble Lord's party
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is, always has been and will continue to be intent on raising taxes and therefore raising inflation—
Noble Lords: Oh!
The Earl of Caithness:—it is interesting to hear the noble Lord put forward a proposition for reducing it.
Lord Harmar-Nicholls: My Lords, bearing in mind the last question which came from the Front Bench opposite, does my noble friend understand that the official policy of the Opposition now is to reduce VAT from 15 per cent. to 8 per cent.? Ought he not to ask them to explain how they will make up the leeway to finance all the other measures that have been promised?
The Earl of Caithness: My Lords, my noble friend certainly has a very valid point and some very valid questions if one is to believe that that is the policy of noble Lords opposite. I do not believe that.
Lord Bruce of Donington: My Lords, if the noble Earl wishes to carry that logic to its extreme, is he aware that we on this side of the House would be happy to replace him on that side of the House in order that Questions may be put to us?
The Earl of Caithness: My Lords, it is clear from the way that the Labour Party presents its policies that it will do anything to try to sit on this side of the House.
Lord Stoddart of Swindon: My Lords, is the noble Earl aware that, far from reducing taxation for the many, the Government have increased taxation for the many while reducing it for the few?
The Earl of Caithness: My Lords, the noble Lord is wrong on those figures. Taxation has been dramatically reduced under this Government. The one factor that he does not take into account is the consequences of the high borrowing which the noble Lord's party instigated.
Lord Cledwyn of Penrhos: My Lords, when the noble Earl and his noble friends turn to this side of the House and ask about our policy, is it not the case, and will he not face up to the fact, that we have the worst inflation of all our competitors in Europe, the highest interest rates, the lowest growth rate and the largest trade deficit? When will the noble Earl and his noble friends get out of cloud-cuckoo-land and deal wih those problems properly?
The Earl of Caithness: My Lords, the answer to the first four questions of the noble Lord the Leader of the Opposition is, no. I believe his figures to be wrong and not justified by those that were given to me by the Commission yesterday at ECOFIN. With regard to the fifth question, the situation is being remedied by a tight monetary and fiscal policy.
Lord Monkswell: My Lords, are the Government aware that, over 10 years ago, they were elected on a promise of cutting taxes and that the average

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person in this country currently pays more in taxation now through income tax, VAT, poll tax and national insurance than he paid 11 years ago? When will the Government fulfil their promise of over 11 years ago?
The Earl of Caithness: My Lords, the noble Lord is wrong. He includes various assumptions which are not taxes. They are not and have not been classified as such. We have dramatically reduced the tax burden for people in this country because, what we have paid for, we have paid for out of taxes, not by high borrowing.
Lord Marsh: My Lords, does the noble Earl agree that there is some danger of the next general election campaign peaking too early?
The Earl of Caithness: My Lords, the noble Lord is right to bring us back to the Question on the Order Paper.
Lord Dormand of Easington: My Lords, does the Minister accept that there is at least considerable evidence that the high interest rate policy is not working as satisfactorily as the Government think it is? In those circumstances, will he give the House an assurance that the Government are at least thinking about the possibility of other ways of restraining inflation?
The Earl of Caithness: My Lords, we use a tight monetary policy to reduce inflation. That has been the proven way and the way accepted by everyone in the Community. That is backed by a tight fiscal policy which buttresses a tight monetary policy.

NHS Costs of Treatment of EC Nationals
3.13 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton asked Her Majesty's Government:
Whether they will ensure that money refunded by EC member states to the United Kingdom in respect of medical treatment received is returned to the district health authorities concerned.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, following consultations and as part of the implementation of the National Health Service review, the Government have decided that from 1st April 1991 providers of hospital care in Great Britain will be reimbursed for the actual cost of the treatment of EC nationals as in-patients or at out-patient clinics. That is facilitated by the new contractual system.
Baroness Masham of Ilton: My Lords, I thank the Minister for that encouraging answer. Is she aware that it has been discouraging for staff at some of our expert units, such as liver units, when they have not seen the rewards of their work and that they need every encouragement and money to support their much needed units?
Baroness Hooper: My Lords, although the cost of treating patients from European Community member states is met by the health authorities and any moneys received in respect of that treatment from those states is retained in central funds and the health authorities are not therefore currently reimbursed for the treatment that they provide for overseas visitors, perhaps I may remind noble Lords that neither are they charged for treatment provided overseas for UK nationals from their catchment areas.
Lord Ennals: My Lords, perhaps I may say how much we on this side of the House welcome the Minister's announcement. Will she tell us roughly the size of the sum involved and why it has taken all this time to move away from a system that was disadvantageous to the district health authorities?
Baroness Hooper: My Lords, as I said in my original response, those arrangements have been the subject of consultation which has had to take place with the territorial health departments as well as with the National Health Service. The service will be consulted further on the detailed working arrangements. Because of the current system, the number of treatments and the costs of treatment are not known precisely, so exact figures are difficult to provide. Our best estimate is that about £9 million per annum will be required in all.
Baroness Masham of Ilton: My Lords, does the Minister agree that it is excellent that we have some of the best specialising services which we can offer to other EC countries and that they want to come to us?
Baroness Hooper: Yes, my Lords. We are fortunate in that other countries wish to refer their patients to this country for specialised treatment. I should add that not only does that happen under special arrangements and on the National Health Service, but that referrals are sometimes made for specific payment.
Lord Monkswell: My Lords, will the Minister advise the House what proportion of EC nationals treated in the National Health Service come here specifically for that treatment and what proportion receive treatment under the NHS because they are here for other reasons; for example, if they are on holiday or on business?
Baroness Hooper: My Lords, as I said earlier, it is difficult to give precise figures because of the nature of the current system. Clearly, that is particularly true of accident and emergency cases, which form part of the system. With the further costs of ward admissions, out-patient clinics and general practitioners, it is estimated that on balance the cost of treatment received by UK nationals overseas is slightly higher than the cost of treatment of EC nationals treated over here, so the balance is in our favour.

Business
Lord Denham: My Lords, it may be for the convenience of the House to know that the Report stage of the National Health Service and Community Care Bill will be adjourned at about 7.30 p.m. for about one hour and that during that adjournment the Committee stage of the Government Trading Bill will be taken.

Penzance South Pier Extension Bill
3.16 p.m.
Read a second time, and committed to an Unopposed Bill Committee.

Avon Light Rail Transit (Bristol City Centre) Bill [Petition for Bill]
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Perhaps I should give a brief explanation of the Motion. Under private business Standing Order No. 25, promoters of a Private Bill authorising the construction of a tramway must obtain the consent of the local authority of each area through which the tramway is to run. The promoters of the present Bill were unable to obtain the consent of Bristol City Council before they appeared in the usual way before the Examiner of Private Bills. For that reason the Examiner certified non-compliance with Standing Order No. 25 and the petition for the Bill was accordingly referred to the Standing Orders Committee.
The standing order, however, sets no time limit by which local authority consent must be obtained and a certificate has been deposited to the effect that the city council has now given its consent to the proposed Bill. The promoters are therefore now in a position to prove compliance with Standing Order No. 25 before the Examiner and, if your Lordships agree to this Motion, the proposed Bill will be duly referred back to the Examiners.
Moved, That the reference of the Examiner's Certificate to the Standing Orders Committee of 18th December last be discharged and that the Petition for the Bill be referred again to the Examiners.—(The Chairman of Committees.)
Lord Dean of Beswick: My Lords, does the noble Lord agree that there was resistance to this because local authorities in general are becoming increasingly angry it organisations by-passing the local planning authorities by promoting Private Bills in the other place is well as in your Lordships'. House? When shall we end this situation in which the local people literally have no say in such matters?
The Chairman of Committees: My Lords, that is a rather different question, which raises the whole position with regard to Private Bills. The fact of the matter in this case is that Bristol City Council have now agreed to this Bill.
On Question, Motion agreed to.

Business of the House: Debate, 20th June
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Viscount Caldecote set down for 20th June shall be limited to 5 hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to the debate with the substitution of "5 hours" for "2½ hours" and "25 minutes" for "20 minutes".—(Lord Belstead.)
On Question, Motion agreed to.

National Health Service and Community Care Bill
3.20 p.m.
Baroness Hooper: My Lords, I beg to move that the Bill be now further considered on Report.
Moved, that the Bill be further considered on Report.—(Baroness Hooper.)
On Question, Motion agreed to.
Clause 6 [Transfer of staff to NHS trusts]:
Baroness Hooper Baroness Hooper moved Amendment No. 71:
Page 7, line 18, at beginning insert ("Subject to subsection (4A) below").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 72, 85 and 86. Our proposed arrangements for the transfer of staff from health authority to National Health Service trust employment are designed to ensure that staff interests are protected and that the transfer takes place with the minimum disruption for the staff concerned. Clauses 6 and 7 of the Bill provide for staff to transfer to National Health Service trust employment with their terms and conditions of service intact and make various other protective measures.
These clauses deal with the vast majority of staff who transfer on the trust's operational date—that is, the date on which the trust takes on its full range of functions. However, a small number of key staff may need to transfer to trust employment earlier than that; that is, between a trust's establishment date and the operational date. Such staff will typically include the future chief officer of the trust and a few senior staff who are needed to carry out important preparatory work; for instance, negotiating National Health Service contracts and preparing for the transfer of staff and the ownership by the trust of its own assets.
Clauses 6 and 7 do not extend to staff who transfer to trust employment before the operational date. The purpose of these amendments is therefore to ensure that such staff receive the same protection as all other National Health Service trust staff will enjoy on transfer. We believe that these amendments will provide a very reassuring measure of statutory protection to the small number of people concerned. I beg to move.
Lord Ennals:My Lords, I welcome these amendments as far as they go but they do not really go very far. As Amendments Nos. 74, 75 and 79 seek to tackle the problems touched on by the Government's amendments, I think it will be best to leave the arguments until those amendments are proposed.
On Question, amendment agreed to.
Baroness Hooper Baroness Hooper moved Amendment No. 72:
Page 7, line 42, at end insert:
("(4A) In any case where—

(a) an order under section 5(1) above provides for the establishment of an NHS trust with effect from a date earlier than the operational date of the trust. and

(b) on or after that earlier date but before its operational date the NHS trust makes an offer of employment by the trust to a person who at that time is employed by a health authority to work solely at, or for the purposes of, the hospital or other establishment or facility which is to become the responsibility of the trust, and

(c) as a result of the acceptance of the offer, the person to whom it was made becomes an employee of the NHS trust, subsections (3) and (4) above shall have effect in relation to that person's contract of employment as if any reference in those subsections to the operational date of the trust were a reference to the date on which he takes up employment with the trust.").

On Question, amendment agreed to.
[Amendment No. 73 had been withdrawn from the Marshalled List.]
Lord Ennals Lord Ennals moved Amendment No 74:
Leave out Clause 6 and insert the following new clause:
("Transfer of employees from Health Authorities to NHS trusts

.—(1) In connection with arrangements relating to NHS trusts made by virtue of this Part of this Act, the Secretary of State may make regulations with respect to the transfer to employment by an NHS trust of persons previously employed by a Health Authority.

(2) Regulations made under this section may also make provision with respect to the return to employment by a Health Authority of a person to whom the regulations previously applied on his transfer (whether from that or another Health Authority) to employment by a NHS trust.

(3) Without prejudice to the generality of subsections (1) and (2) above, regulations under this section may make provision as to—

(a) the terms on which a person is to be employed by an NHS trust;

(b) the period and continuity of a person's employment for the purposes of the Employment Protection (Consolidation) Act 1978;

(c) superannuation benefits;

(d) the circumstances in which, when a person ceases to be employed by a Health Authority or NHS trust, he is not to be regarded as entitled to benefits in connection with redundancy.

(4) In this section —

(a) "Health Authority" means a Regional, District or Special Health Authority; and

(b) "NHS trust" has the same meaning as in section 5 above.")

The noble Lord said: My Lords, this amendment stands in the name of my noble friend Lord Peston—for this purpose he and I are the same person—and the names of the noble Lord, Lord Walton of Detchant, and the noble Baronesses, Lady Robson of Kiddington and Lady Cox. This is an extremely important amendment, as is shown by the
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breadth of its sponsorship. Because it is so important, it will inevitably take a little time to present the case.
The new clause is concerned with the terms and conditions of employment of those staff transferred to self-governing trusts. The clause mirrors almost exactly Clause 50, which the Government inserted into the Bill during the Committee stage. The new clause allows the Secretary of State to make regulations governing the transfer of staff and also allows him to make regulations as to the terms and conditions under which they might be employed. Clause 50 already makes identical provision for the transfer of staff between health authorities and local authorities.
If the Government do not accept this new clause, they will be leaving an inexplicable anomaly in the Bill whereby some staff transferred from health authorities have statutory protection whereas others do not, dependent on where they are being transferred. That is a very unsatisfactory situation. It simply will not do.
The new clause is a very modest one. In a sense it is far too modest for the liking of those who have their names attached to it. It does not guarantee the maintenance of a system of national pay and conditions for staff in a National Health Service trust. We want to do that but we want to have an amendment that the Government will accept. The clause gives the Secretary of State reserve powers to regulate trust employment if necessary. It would allow but not require the Secretary of State to instruct trusts to follow the recommendations of the pay review bodies, for example, or the Whitley Council. At the very least the new clause would provide a safety net for trust employees to prevent any bad employment practices.
Under the Bill staff working for a hospital or other unit which becomes self-governing will automatically have their terms of employment transferred to the new trust. Although such staff will be transferred with their existing terms and conditions of employment, there will be no duty on the trust to maintain such conditions. As things now stand it would be perfectly possible for a trust to terminate all contracts and replace them with new ones, negotiated either individually or collectively with their staff. That is grossly unsatisfactory.
As part of the new contracts, trusts would be entirely free to set aside previous arrangements such as clinical grading for nursing staff. Indeed, a whole range of employment conditions in relation to nursing staff might be subject to change by trusts. For instance, the system of clinical grading for nursing staff was introduced in April 1988. The introduction of the system remains one of the Government's most notable contributions towards the development of nursing and was warmly welcomed at the time by the Royal College of Nursing. For the first time nurses have pay scales aimed at rewarding clinical expertise and responsibility. It has been a great step forward.
Against that background it seems all the more unusual that the Government should jeopardise clinical grading at the very time that the storm

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surrounding its implementation may be subsiding and the Government at long last are able to reap its rewards. Are the Government prepared to see their initiative on clinical grading undermined and conceivably made redundant by self-governing trusts which decide to set aside these arrangements? Trusts may wish to depart from the clinical grading arrangements possibly for use of the new education grades and will probably want to exclude managers from the scope of collective bargaining. A more casual approach to grading arrangements could also lead to a dilution of the skill mix.
So far as concerns pay rates, nursing staff pay is at present determined by an independent review body. The body was established in 1983 and makes recommendations with regard to nurses, midwives, health visitors and professions allied to medicine. A further review body makes recommendations with respect to doctors and dentists. As I said, the establishment of the review body for nursing was warmly welcomed by the RCN as a very positive step. It is a fair system to determine fair rates of pay. More important, such a system avoids the kind of destructive conflict which can often plague direct confrontational pay negotiations. It was a great step forward.
The trusts will not be required to adopt pay rates as recommended by the review body. Indeed, any significant move away from NHS grading would make it difficult for them to do so. We discussed this matter briefly last Thursday on the first day of Report. Certainly it can only undermine the role of the review body, with the danger that nursing will be plunged into the same kind of chaos as was recently experienced within the ambulance service.
The arguments apply across many other important issues: leave and allowances, sick pay, maternity pay, premature retirement benefits and other Whitley Council agreements as well as representational rights. In short, without going into detail, by allowing self-governing trusts completely to disregard adjusting arrangements for nursing pay and conditions, the Government would undermine many of their own positive initiatives in this field, often introduced at great cost to themselves politically and financially.
On staff mobility, a departure by trusts from NHS pay arrangements will render it more difficult for staff to move between trust and health authority employment. They will be very reluctant to do so. Currently staff mobility within the NHS and the nursing profession is high and brings a variety of benefits. The flow of qualified, skilled nurses, as with consultants, has been altered over the past few decades to ensure an availability of those skills throughout the country. If a series of élite centres of excellence emerge under the guise of self-governing hospital trusts, and if those are able to set their own pay and conditions, it is likely that they will draw towards them a great deal of the talent and excellence which is currently more evenly dispersed around the country.
In consequence high quality staff are drawn away from other hospitals and the National Health Service suffers. Variation in wages would make it less likely that a nurse, having benefited from the experience
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of a centre of excellence, would feel inclined to return to other parts of the service to spread that knowledge and experience. If the labour flows are towards the self-governing hospitals, it would mean a return to pre-1948 problems. Straying from nationally agreed pay scales would lead to serious distortions in the NHS labour market where trusts top up or, more likely, undercut salaries. To allow self-governing trusts to determine their own pay and conditions would undermine the Government's aim of introducing competition into the health service. Trusts that were able to determine their own rates of pay completely would have an unfair advantage over their DHA-managed neighbours who abide by national agreements.
By squeezing staff benefits, a self-governing trust would be able to undercut a directly managed unit which maintains fair remuneration for staff. Even if it so wished, a directly managed unit would be unable to respond. The competition would be unfair and, I believe, damaging to the service.
The new clause would minimise such unfair competition. By allowing the Secretary of State powers to regulate terms and conditions offered by trusts, a level playing field would be maintained. That would be to the long-term benefit of management, staff and patients.
It will be no surprise to the Government that the amendment has been drafted following close consultation with the principal professions working in the National Health Service. It is a matter that they have considered very deeply for many months since the government proposal came forward. In view of the fact that the Government accepted this same principle when they introduced it at Committee stage—Clause 50—I hope that they will decide to take the same attitude on this proposal which so closely resembles it. I beg to move.
3.30 p.m.
Baroness Cox: My Lords, I rise to indicate how strongly I support the amendment. I shall not repeat the arguments put so comprehensively by the noble Lord, Lord Ennals: perhaps, however, I may highlight some of the implications of the situation for the nursing profession of which I have most personal experience. I do not believe the examples to be inappropriate. I am not undertaking special pleading but I believe that in so far as nurses represent the largest group of employees in the National Health Service, the implications for the profession and in particular for the provision of high quality care throughout the National Health Service are extremely serious.
I shall highlight two points raised by the noble Lord, Lord Ennals. The effects of clinical grading are potentially very serious. One of the most constructive contributions that the Government have made to the morale, the standing and the effective operation of the nursing profession has been the introduction and agreement of a clinical grading structure. It has been widely welcomed. Its significance is that it enables qualified, experienced nurses to stay, at the patient's bedside, or in clinical care in the community, in clinical positions. Prior

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to the clinical grading structure and its associated pay scales, nurses used to reach a ceiling, in terms of clinical posts, which was very low indeed. One could meet experienced nurses in charge of intensive care units or in the community who had been in post for many years and who had been stuck at a senior salary which was outrageously low taking into account their experience and responsibilities.
The clinical grading structure has allowed nurses to be paid in a way commensurate with their experience, responsibilities and contribution. No longer do they have to move out of the clinical field into either education or management if they wish to enjoy a salary increase. Any provision that jeopardises that important principle and profoundly important development in the nursing profession is a serious matter. I oppose very strongly and passionately on principle any possible danger to the clinical grading structure.
I shall not amplify the arguments of the noble Lord, Lord Ennals. He has mentioned the significance of pay review bodies. That is another contribution made by the Government in recent years and warmly welcomed by the profession. It would be very sad indeed if the principle of the pay review body were to be in any way jeopardised.
I wish finally to touch on the problems involved in the provision of a comprehensive system of high quality health care throughout the National Health Service. The commitment to the National Health Service by so many people is related to the principle of that service; namely, ensuring that high quality health care, free at the point of need on a comprehensive basis, is universally available throughout the country. In so far as the implications of the Government's proposal might jeopardise that commitment, they are very serious.
One consideration is the freedom of the trusts to offer different pay scales which might well attract staff from related hospitals in the district. Those hospitals might be left very short of staff in areas where there are already acute staff shortages such as intensive care units, special care baby units and some areas of care for the elderly. The amendment is designed to provide a fallback, a safeguard. As the noble Lord, Lord Ennals, said, the proposal is modest. It does not interfere with the freedom of trusts to establish their own working arrangements unless they do so in a way that will be detrimental to staff and/or to the operation of the National Health Service. In those circumstances there must surely be provision for safeguards. The amendment allows those to be at the discretion of the Secretary of State. It could not be more minimal. It is essential if the staff working for the NHS are to be reassured and the fundamental principles of the National Health Service are to be protected.
Lord Walton of Detchant: My Lords, I shall speak very briefly in support of the amendment which also stands in my name. Let me assure your Lordships that it is not another attempt to try to require the Government to impose nationally agreed salary scales for all grades of staff within self-governing hospital trusts. That is a matter to which my
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profession, in its majority view, has attached great importance.
However, when the matter was considered in Committee and at an earlier stage on Report, it was quite clear that the Government had a very strong view. We did not press the point to a Division last Thursday.
As the noble Lord, Lord Ennals, said, the new clause is much more modest in its aims and objectives. It does not guarantee the maintenance of a system of national pay and conditions of staff in NHS trusts but simply gives the Secretary of State reserve powers to regulate such trust employment if that is thought to be necessary. It would allow, but not require, the Secretary of State to instruct trusts to follow the recommendations of pay review bodies and of the Whitley Council. Therefore, it allows a greater degree of flexibility but gives a substantial degree of protection to individuals working in the National Health Service in all professions who will transfer from NHS employment to the employment of self-governing trusts. For that reason I warmly support the amendment.
Baroness Robson of Kiddington: My Lords, I too warmly support the amendment. I shall not speak for more than one minute because the case was more than adequately put by the noble Baroness, Lady Cox, and the noble Lords, Lord Ennals and Lord Walton. One of the most important functions of the amendment is that it will help to keep the mobility of labour within the service. Inevitably National Health Service trusts will be dealing with the acute section of the service. It will be increasingly difficult to staff the caring services such as community nursing. It is essential that such a provision is inserted in the Bill.
Lord McColl of Dulwich: My Lords, I wish to take a contrary view and explain why I oppose the amendment. I give as an illustration a certain district health authority which had more than 200 people employed in its finance department. To be fair to those people, not one had a financial qualification and not one was paid adequately. That was probably why the finances of that health authority were in such a mess.
If 40 people had been employed in the finance department, each of whom was paid four times as much, the right calibre of people would have been obtained. Furthermore, there would have been a saving of £400,000. It is essential that local pay should be locally determined. It is also essential that we break free of national agreements and set up a service which is better orientated to serve the patients. I believe that the amendment should be rejected.
Baroness Hooper: My Lords, we believe that, although the amendment may have been presented as being modest, it is unnecessary. Provision is already made in the Bill to ensure that staff who transfer from health authority to National Health Service trust employment do so with all their contractual rights intact. Similarly, statutory continuity of service which governs redundancy and

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unfair dismissal rights and compensation, will also be preserved. That means that their service with their present employer and the trust will be continuous. Any trust will think twice before terminating all contracts in the manner suggested by the noble Lord, Lord Ennals. Any changes to existing contractual arrangements must be negotiated.
Your Lordships will know that the terms and conditions of employment for the majority of NHS staff are negotiated in the national Whitley Councils. The Whitley agreements provide for the service of staff who move between health authorities without a break to count for various contractual benefits such as annual and sick leave and redundancy pay. Any necessary changes to Whitley agreements to give that effect will be for the managements of the Whitley Councils to propose and I expect that some will do so. However, that is entirely a matter for them.
An important part of the greater freedom of NHS trusts—and it is a matter that we have consistently argued—will be the power to determine the terms and conditions of service for their staff, including pay, and to introduce changes in contracts of employment. The effect of the proposed new clause will undesirably restrict those freedoms.
I shall not follow the noble Lord, Lord Ennals, in discussing the general freedom of National Health Service trusts to set their own pay and conditions. Noble Lords have already agreed that in principle by endorsing Schedule 2 of the Bill. However, the amendment does not bite on those issues; indeed it achieves no more than is already provided in Clauses 6 and 7.
It will also be open for trusts to follow review body recommendations on the pay of nursing staff; the example particularly quoted by the noble Lord, Lord Ennals. However, it is right for trusts to have the freedom to design their pay systems to meet their needs. That flexibility will help and not hinder the development of the staff needed to provide high-quality care. As regards nursing and clinical grading, I believe that other arrangements will not be affected by the transfer.
If a National Health Service trust pays over the odds for staff it will soon find that it is unable to win contracts and so fund its staff. Therefore, in my view there is no danger of trusts "sucking staff—an expression used by my noble friend Lady Cox—into employment to the detriment of the directly-managed sector.
Existing staff who transfer to National Health Service trusts will be able to remain in the National Health Service superannuation scheme and new staff will be eligible for scheme membership. Staff not wishing to join will be free to make their own arrangements.
I hope that I have made the case that the provisions in the Bill before your Lordships already contain sufficient safeguards to protect staff. At the same time they provide the freedoms which are the essence of the future of the National Health Service trusts. Therefore, I urge the House to reject the amendment.
3.45 p.m.
Lord Ennals: My Lords, I am disappointed by the Minister's reply. She said that the new clause is
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unnecessary and that those being transferred will be transferred with all their contactual rights. Surely she accepts that any trust can terminate such agreements instantly. Therefore, the rights that employees are taking with them can instantly be removed. I do not understand how she can say that the clause is unneccessary to protect the rights of those being transferred.
Secondly, the Government must have had that thought in mind when in Committee they introduced Clause 50. That established the same principles for those transferred between health and local authorities. Why did the Government believe that it was right to do so between those authorities but not right to do so between the two authorities mentioned in the new clauses?
Thirdly, the Minister said that we shall not enter into an argument about whether it is good that NHS trusts should be totally free to scrap any national agreements reached by Whitley Councils, review bodies for nurses, doctors and dentists or whatever. What consultation was there between the Government and the medical profession, the Government and the RCN, and the Government and the professions allied to medicine? All those bodies were involved in the statement which was introduced and collectively published about three months ago. What consultation was there? Can the Minister tell me whether any of the principal professions affected by the Government's decision agreed with her? What makes her think that any of them agreed with her? What makes her think that in relation to pay levels for those professionals the Government know better than them? Can the Minister answer those questions?
Baroness Hooper: My Lords, the noble Lord asked, why Clause 50 and not his amendment? Clause 50 is necessary because the provisions of Clauses 6 and 7, which cover the position foreseen by the noble Lord's amendment, do not apply to the transfer covered by them.
As regards consultation, the noble Lord knows very well the history of the matter and the fact that the Government's proposals which were originally made in the White Paper have been welcomed on some although not on all fronts.
Lord Ennals: My Lords, it was this particular front about which I was asking.
Baroness Hooper: My Lords, that is one of the many fronts on which there have been considerable discussion and frequent meetings with representatives of the medical profession. I believe that even in your Lordships' House there are members of the medical profession who welcome this aspect of our proposals.
Lord Ennals: My Lords, I am grateful to the Minister for her comments. One of her supporters is the noble Lord, Lord McColl, who gave an example of quite extraordinary incompetence by a health authority which seemed to me to be quite irrelevant to the new clause which we are seeking to persuade the Government to accept. None of us in his right

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mind would justify the sort of nonsense described by the noble Lord, Lord McColl, in which there is a grossly inflated financial department. He knows that one of our fears about this Bill is that it will require health authorities to have grossly inflated finance departments and teams of accountants which they do not have at present and which we do not wish them to have. That is the basis of some of our criticism.
The Minister has said nothing to satisfy the movers of this amendment and I wish to test the feeling of the House.
3.52 p.m.
On Question, Whether the said amendment (No. 74) shall be agreed to?
Their Lordships divided: Contents, 102; Not-Contents, 132.

DIVISION NO. 1

CONTENTS

Addington, L.

Listowel, E.

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Alport, L.

Ardwick, L.

Lloyd of Hampstead, L.

Aylestone, L.

Lloyd of Kilgerran, L.

Birk, B.

Lockwood, B.

Blackstone, B.

Longford, E.

Bonham-Carter, L.

Lovell-Davis, L.

Boston of Faversham, L.

McFarlane of Llandaff, B.

Bottomley, L.

McNair, L.

Briginshaw, L.

Marsh, L.

Broadbridge, L.

Masham of Ilton, B.

Brooks of Tremorfa, L.

Mason of Barnsley, L.

Bruce of Donington, L.

Milner of Leeds, L.

Campbell of Eskan, L.

Molloy, L.

Carmichael of Kelvingrove, L.

Monkswell, L.

Morris of Castle Morris, L.

Carter, L.

Mulley, L.

Cledwyn of Penrhos, L.

Murray of Epping Forest, L.

Cox, B.

Nicol, B.

Darcy (de Knayth), B.

Oram, L.

David, B.

Peston, L.

Dean of Beswick, L.

Phillips, B.

Diamond, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Prys-Davies, L.

Dormand of Easington, L.

Rea, L.

Ennals, L.

Richard, L.

Ewart-Biggs, B.

Robson of Kiddington, B. [Teller.]

Ezra, L.

Fisher of Rednal, B.

Sainsbury, L.

Gallacher, L.

Saltoun of Abernethy, Ly.

Galpern, L.

Seear, B.

Gladwyn, L.

Seebohm, L.

Graham of Edmonton, L. [Teller.]

Serota, B.

Shackleton, L.

Grey, E.

Shaughnessy, L.

Hampton, L.

Somers, L.

Hatch of Lusby, L.

Stallard, L.

Hayter, L.

Stedman, B.

Hirshfield, L.

Stoddart of Swindon, L.

Hollis of Heigham, B.

Strabolgi, L.

Holme of Cheltenham, L.

Taylor of Blackburn, L.

Houghton of Sowerby, L.

Taylor of Gryfe, L.

Hunter of Newington, L.

Thomson of Monifieth, L.

Hylton-Foster, B.

Varley, L.

Jacques, L.

Wallace of Coslany, L.

jay, L.

Walston, L.

Jenkins of Hillhead, L.

Walton of Detchant, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Kearton, L.

Willis, L.

Kennet, L.

Winstanley, L.

Leatherland, L.

Young of Dartington, L.

168

NOT-CONTENTS

Aldington, L.

Kimball, L.

Alexander of Tunis, E.

Kinnaird, L.

Allerton, L.

Lauderdale, E.

Ampthill, L.

Layton, L.

Annaly, L.

Lindsay, E.

Arran, E.

Liverpool, E.

Balfour, E.

Long, V.

Bellwin, L.

Luke, L.

Beloff, L.

Lurgan, L.

Belstead, L.

Lyell, L.

Bessborough, E.

McColl of Dulwich, L.

Blake, L.

Mackay of Clashfern, L.

Blatch, B.

Macleod of Borve, B.

Borthwick, L.

Mancroft, L.

Boyd-Carpenter, L.

Manton, L.

Brabazon of Tara, L.

Margadale, L.

Brigstocke, B.

Merrivale, L.

Brookeborough, V.

Mersey, V.

Brougham and Vaux, L.

Monckton of Brenchley, V.

Caithness, E.

Monk Bretton, L.

Campbell of Croy, L.

Monteagle of Brandon, L.

Carnegy of Lour, B.

Montgomery of Alamein, V.

Carnock, L.

Mottistone, L.

Cavendish of Furness, L.

Moyne, L.

Chelmer, L.

Munster, E.

Clanwilliam, E.

Murton of Lindisfarne, L.

Cockfield, L.

Nelson, E.

Colnbrook, L.

Nugent of Guildford, L.

Constantine of Stanmore, L.

O'Brien of Lothbury, L.

Cottesloe, L.

Onslow, E.

Cross, V.

Orkney, E.

Cullen of Ashbourne, L.

Orr-Ewing, L.

Cumberlege, B.

Oxfuird, V.

Davidson, V. [Teller.]

Pender, L.

Denham, L. [Teller.]

Quinton, L.

Donoughmore, E.

Rankeillour, L.

Eccles, V.

Reay, L.

Eccles of Moulton, B.

Renton, L.

Ellenborough, L.

St. John of Fawsley, L.

Elles, B.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Sempill, Ly.

Elliott of Morpeth, L.

Shannon, E.

Elton, L.

Sharpies, B.

Erroll of Hale, L.

Skelmersdale, L.

Ferrers, E.

Slim, V.

Foley, L.

Soulsby of Swaffham Prior, L.

Fortescue, E.

Fraser of Carmyllie, L.

Stafford, L.

Fraser of Kilmorack, L.

Strange, B.

Gainford, L.

Strathcarron, L.

Gainsborough, E.

Strathclyde, L.

Gardner of Parkes, B.

Strathmore and Kinghorne, E.

Gibson-Watt, L.

Gisborough, L.

Strathspey, L.

Greenway, L.

Swinfen, L.

Gridley, L.

Swinton, E.

Grimthorpe, L.

Terrington, L.

Harmar-Nicholls, L.

Teviot, L.

Havers, L.

Thomas of Gwydir, L.

Henley, L.

Thorneycroft, L.

Hesketh, L.

Trefgarne, L.

Hives, L.

Ullswater, V.

Hood, V.

Vaux of Harrowden, L.

Hooper, B.

Wade of Chorlton, L.

Ingrow, L.

Wedgwood, L.

Johnston of Rockport, L.

Whitelaw, V.

Kaberry of Adel, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
4 p.m.
Baroness Robson of Kiddington Baroness Robson of Kiddington moved Amendment No. 75.
After Clause 6, insert the following new clause:
(" . No provision in this Act relating to NHS trusts shall prevent a person's employment being deemed to be continuous within the NHS for contractual purposes so long as that person

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pursues uninterrupted employment by any health service body as defined under section 4(2) above.").
The noble Baroness said: My Lords, we have just debated and voted on Amendment No. 74. I have the pleasure of moving Amendment No. 75. It is quite different in context from the previous amendment, which dealt with issues laid down in the Employment Protection (Consolidation) Act 1978. Amendment No. 75 deals with the contract arrangements within the NHS that do not have the same statutory powers as those discussed under Amendment No. 74.
The new clause will ensure that NHS staff transferring to trusts retain continuity of employment should they subsequently seek employment elsewhere in the NHS. Although NHS staff transferring between different health authorities at present are not deemed to be continuously employed by the NHS for statutory purposes, such continuity is granted for NHS contractual purposes. That means that if an employee has been working for one health authority for three, four or five years, and then moves across to another health authority for a further three, four or five years, those years are taken together as being continuous employment within the NHS. That gives the employee specific entitlements in respect of maternity, sickness and other benefits.
I understand—I stand to be corrected—that under the Bill any members of staff transferred to a trust who subsequently seek employment back in the NHS will lose their continuity of service. A nurse or any other employee may work for a number of years in the NHS, transfer to a trust and work for a number of years there—let us say 10 years—and then wish to transfer back into the NHS; all that long service will be discounted. I find that situation difficult to understand in view of the fact that the Government insist that NHS trusts are still part of the NHS.
Once a hospital or other unit has been granted trust status the majority of staff in that hospital will be automatically transferred into the NHS trust with little say regarding whether or not they wish to be transferred. If they leave, their long service will be discontinued. Bearing in mind that in many cases they may not have had the chance to be consulted regarding the change of their employer, it is wrong that they should not have the right of continuity of employment when they desire to move back into the general run of the NHS. I beg to move.
Baroness Cox: My Lords, I rise briefly to support the amendment both because of the problems that it adcresses and also the anxieties that those problems are already causing among National Health Service staff. Those anxieties are entirely understandable and are not part of the so-called scare-ongering which some Members of your Lordships' House sometimes suggest are fostered for political reasons.
I shall not repeat the fundamental arguments so cogently stated by the noble Baroness, Lady Robson, but I will highlight for a moment some of the problems associated with involuntary change in conditions of service. One of the most acute of those problems relates to the mobility of staff.
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Mobility of staff is important, if not essential, for professional carers. For example, junior hospital doctors have to change their jobs as frequently as every six months. It is highly desirable for nurses to gain experience through post-registration courses in different specialities; very often those courses are offered in different parts of the country. Nurses may have to move in order to obtain experience and qualifications in post-qualification areas; for example, in relation to special care baby unit nursing, intensive care or coronary care nursing. Nurses may also need to move from hospital to community settings in order to obtain a broader base of clinical experience.
The problems arising from lack of continuity of service will also exacerbate the already, in many places, desperately acute problems of recruitment and retention, particularly of nursing staff. The number of new recruits to nursing has fallen dramatically in some places. For example, a number of London teaching hospitals in recent years had to cancel entire intakes for some of their programmes because of a shortfall of suitably qualified applicants. Figures on vacancies show that in 1989 there were over 21,000 nursing posts unfilled, with nearly 11,500 unfilled for more than three months. Accounts of ward and unit closures due to shortages of nursing staff reflect the seriousness of those problems.
One of the ways of tackling the shortage of staff not only in nursing but in other areas in the National Health Service is to encourage staff who have left to return to the service. It is calculated that around 30,000 nurses leave the NHS every year. The Royal College of Nursing estimates that there is a pool of around 85,000 qualified nurses in the United Kingdom who are currently out of nursing. It is hoped to encourage many of those to return to practise, given favourable employment conditions.
The preservation of contractual employment continuity is clearly a matter of great importance in that context. Some reassurance by the Government on that important issue is needed as a matter of considerble urgency. I therefore wish to support the amendment in the strongest possible terms.
Lord Ennals: My Lords, I support the amendment, which also carries my name. I thank the noble Baronesses, Lady Robson and Lady Cox, because they have put forward reasons that can hardly be refuted. When the noble Baroness, Lady Cox, speaks, she speaks from the depths of experience of a profession in the National Health Service, an experience that most of us do not possess.
I wish to consider two issues mentioned by the noble Baroness; the first is mobility. Mobility among nurses—it also applies to other professions—is very important in the gaining of wider experience. There have been great difficulties in encouraging an increasing number of nurses to move from hospital to community settings. That is important when considering continuity of service in the Bill.
The establishment of self-governing trusts without contractual continuity is likely to make it more difficult to encourage nurses to spread their skills throughout the health service or to gain broad-based

171
skills, especially those arising from care in the community. The inevitable emphasis on the acute sector within self-governing trusts will distort career patterns, it will shift the commitment of many nurses back to a medical and curative model and away from the more broad-based policy objectives adopted by nursing and health organisations in the past decade.
The noble Baroness, Lady Cox, referred to skill shortages. At this stage and in the immediate future shortage of nursing skills sets the NHS an enormous challenge particularly with the problem of the reducing numbers in the generation from which nurses will be recruited. In order to recruit and retain sufficient nursing staff throughout the decade the National Health Service will need to prove itself a flexible and amenable employer. Breaking contractual continuity would seem to be heading in the wrong direction.
I hope that the Minister will accept the amendment. My suspicion is that she will disagree with it, say that it is not necessary, or both. If that is the case, the Government are building up for themselves such resentment, such concerns and anxiety among the professions on whom the National Health Service depends for its success that they may live to rue the day. In fact, they certainly will rue the day. It is extremely unwise for the Government to continue on issue after issue to fly in the face of the professional skills and knowledge which are available in the country and especially in this House. I support the amendment.
Baroness Hooper: My Lords, I recognise the importance of mobility of service and that is why the Bill has made provision to protect staffs who move or intend to move in accordance with the provisions of the Bill.
The effect of the amendment would be twofold, as has been said. First, trusts would be required to recognise service with health authorities for contractual purposes such as the calculation of annual sick leave. On that, I can only repeat my assurance that Clauses 6 and 7 provide for the transfer of staffs to NHS trusts with all their contractual rights intact. In that context, therefore, the amendment adds nothing because it means that service with a health authority will count towards contractual benefits.
It is important to draw a distinction between statutory continuity of employment, which governs rights such as appeal to industrial tribunals, and recognition of service for purposes such as the calculation of leave entitlement. There is no statutory continuity of employment between health authorities, nor will there be between authorities and trusts. However, the recognition of NHS service is laid down in Whitley Council handbooks. If amendments to those agreements and handbooks are needed to recognise service with a trust when an employee moves back to a health authority, that will be a matter for negotiation in the Whitley forum.
As I said on the previous amendment, an important part of the greater freedom of the proposed NHS trusts to conduct their own affairs
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will be this power to determine the terms and conditions of service for their staffs. If a trust judges it necessary, it will therefore be free to negotiate changes to the relevant terms of the existing contracts at any time after transfer. Of course, any termination of a contract which has been suggested will be subject to redundancy and unfair dismissal rights. Nevertheless, once negotiations are completed and agreement is reached, if the staff continue in employment the question of recognition by NHS trusts of service with other NHS bodies will then be entirely a matter for the employing trust.
I have been dealing with the transfer from health authorities to NHS trusts but I now refer to where an employee chooses to move back to direct employment by health authorities. The amendment provides that health authorities would then be required to recognise service with trusts for similar purposes. Again, I must return to the point I made during our previous debate. Any necessary changes to Whitley agreements to give this effect will be not for us on this Bill but for the management sides of the Whitley councils to propose. I hope that your Lordships will agree that this is a matter for negotiation in the proper forum. On that basis I hope your Lordships will agree that this amendment is not necessary, and perhaps the noble Baroness will consider not pressing it.
Baroness Robson of Kiddington: My Lords, I thank the noble Baroness for her reply but I regret to say that it is not at all satisfactory. I cannot see why, according to the reply we have just been given, trusts will take account of service with the NHS prior to transfer to the trust, subject to any new agreements made with the staff, but where an employee leaves the trust and goes back into the NHS the same contractual security does not exist.
That contractual security has always existed between health authorities, and according to the Government an NHS trust is just another health authority. I should have thought that the same transfer of continuity of service should apply both ways. I am afraid that I am not happy with the Minister's reply and I must ask for the decision of the House.
4.15 p.m.
On Question, Whether the said amendment (No. 75) shall be agreed to?
Their Lordships divided: Contents, 101; Not-Contents, 141.

DIVISION NO. 2

CONTENTS

Addington, L.

Bruce of Donington, L.

Airedale, L.

Campbell of Eskan, L.

Alport, L.

Carmichael of Kelvingrove, L.

Ardwick, L.

Aylestone, L.

Carter, L.

Birk, B.

Cledwyn of Penrhos, L.

Blackstone, B.

Clifford of Chudleigh, L.

Bonham-Carter, L.

Cox, B. [Teller.]

Boston of Faversham, L.

Darcy (de Knayth), B.

Bottomley, L.

David, B.

Broadbridge, L.

Dean of Beswick, L.

Brooks of Tremorfa, L.

Diamond, L.

173

Donaldson of Kingsbridge, L.

Masham of Ilton. B.

Dormand of Easington, L.

Mason of Barnsley, L.

Ennals, L.

Milner of Leeds, L.

Ewart-Biggs, B.

Molloy, L.

Ezra, L

Monkswell, L.

Falkender, B.

Monson, L.

Falkland, V.

Morris of Castle Morris, L.

Fisher of Rednal, B.

Moyne, L.

Foot, L

Mulley, L.

Gallacher, L.

Murray of Epping Forest, L.

Galpern, L.

Nicol, B.

Gladwyn, L.

Oram, L.

Graham of Edmonton, L.

Peston, L.

Grey, E.

Phillips, B.

Halsbury, E.

Pitt of Hampstead, L.

Hampton, L.

Porritt, L.

Hanworth, V.

Prys-Davies, L.

Hatch of Lusby, L.

Rea, L.

Hayter, L.

Richard, L.

Hirshfield, L.

Robson of Kiddington, B. [Teller.]

Hollis of Heigham, B.

Holme of Cheltenham, L.

Sainsbury, L.

Hughes, L.

Seear, B.

Jacques, L.

Serota, B.

Jay, L.

Somers, L.

Jeger. .

Stallard, L.

Jenkins of Hillhead, L.

Stedman, B.

Jenkins of Putney, L.

Stoddart of Swindon, L.

Kearton, L.

Strabolgi, L.

Kennet L.

Taylor of Gryfe, L.

Kilmarnock, L.

Thomson of Monifieth, L.

Leatherland, L.

Varley, L.

Listowel, E.

Wallace of Coslany, L.

Llewelyn-Davies of Hastoe, B.

Walpole, L.

Walston, L.

Lloyd of Kilgerran, L.

Walton of Detchant, L.

Lockwood, B.

White, B.

Longford, E.

Williams of Elvel, L.

Lovell-Davis, L.

Willis, L.

McFarlane of Llandaff, B.

Winstanley, L.

NOT-CONTENTS

Aldington, L.

Eccles of Moulton, B.

Alexander of Tunis, E.

Eden of Winton, L.

Allerton, L.

Elibank, L.

Ampthi, L.

Ellenborough, L.

Annaly, L.

Elles, B.

Arran, E.

Elliot of Harwood, B.

Balfour, E.

Elliott of Morpeth, L.

Bellwin, L.

Elton, L.

Beloff, L.

Erroll of Hale, L.

Belstead, L.

Ferrers, E.

Bessborough, E.

Foley, L.

Blake, L.

Fortescue, E.

Blatch, B.

Fraser of Carmyllie, L.

Blyth, L.

Fraser of Kilmorack, L.

Boardman, L.

Gainford, L.

Borthwick, L.

Gainsborough, E.

Boyd-Carpenter, L.

Gardner of Parkes, B.

Brabazon of Tara, L.

Gibson-Watt, L.

Brentford, V.

Gisborough, L.

Brigstocke, B.

Greenway, L.

Brooke orough, V.

Gridley, L.

Brougham and Vaux, L.

Grimston of Westbury, L.

Caithness, E.

Grimthorpe, L.

Campbell of Croy, L.

Harmar-Nicholls, L.

Carnegy of Lour, B.

Havers, L.

Carnock, L.

Henley, L.

Cavendish of Furness, L.

Hesketh, L.

Chelmer, L.

Hives, L.

Clanwilliam, E.

Hood, V.

Cockfield, L.

Hooper, B.

Constantine of Stanmore, L.

Hunter of Newington, L.

Cottesloe, L.

Hylton-Foster, B.

Cross, V.

Ingrow, L.

Cumberlege, B.

Johnston of Rockport, L.

Davidson, V. [Teller.]

Kaberry of Adel, L.

Denham, L. [Teller.]

Kimball, L.

Derwen, L.

Kinnaird, L.

Donoughmore, E.

Kitchener, E.

Eccles, V.

Lauderdale, E.

174

Layton, L.

Quinton, L.

Lindsay, E.

Rankeillour, L.

Liverpool, E.

Reay, L.

Lloyd of Hampstead, L.

Renton, L.

Long, V.

st. John of Fawsley, L.

Luke, L.

Saltoun of Abernethy, Ly.

Lyell, L.

Sanderson of Bowden, L.

McColl of Dulwich, L.

Sempill, Ly.

Mackay of Clashfern, L.

Sharpies, B.

Macleod of Borve, B.

Shaughnessy, L.

Mancroft, L.

Skelmersdale, L.

Manton, L.

Slim, V.

Margadale, L.

Soulsby of Swaffham Prior, L.

Marshall of Leeds, L.

Merrivale, L.

Stafford, L.

Mersey, V.

Strange, B.

Monckton of Brenchley, V.

Strathclyde, L.

Monk Bretton, L.

Strathmore and Kinghorne, E.

Monteagle of Brandon, L.

Montgomery of Alamein, V.

Strathspey, L.

Mottistone, L.

Swinton, E.

Munster, E.

Teviot, L.

Murton of Lindisfarne, L.

Thomas of Gwydir, L.

Nelson, E.

Thorneycroft, L.

Norrie, L.

Ullswater, V.

Nugent of Guildford, L.

Vaux of Harrowden, L.

O'Brien of Lothbury, L.

Wade of Chorlton, L.

Onslow, E.

Wedgwood, L.

Orkney, E.

Whitelaw, V.

Orr-Ewing, L.

wise, L.

Oxfuird, V.

Wynford, L.

Pender, L.

Zouche of Haryngworth, L

Plummer of St. Marylebone, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.24 p.m.
Clause 9 [Originating capital debt of and other financial provisions relating to NHS trusts]
Baroness Blatch Baroness Blatch moved Amendment No. 76:
Page 9, line 39, after ("representing") insert ("subject to subsection (1A) below").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 78, 87 and 88. We have consistently made clear, both in published documents and in Committee debate on this Bill in another place, that it is the Government's intention that when assets which have been donated to the National Health Service since 1948 are transferred to a trust they should not be included in the calculation of the trust's originating capital debt and trusts should not be obliged to make a financial return on them. Rather, trusts and directly managed units should be able to use donated assets to benefit either specific groups of people, or NHS patients more widely, in line with the wishes of the donors.
These amendments will ensure that where such assets are transferred to an NHS trust the Secretary of State will be able to exclude them from the calculation of the originating capital debt. These amendments would put trusts on a similar footing to NHS units which remain under health authority management in this respect. I beg to move.
Lord Peston: My Lords, I thank the noble Baroness for explaining what the amendments mean. I have been puzzling over them. I believe I am right in saying that she referred only to assets donated to the hospitals. I have the obvious question: why does the amendment not use the actual words "assets

175
donated"? When I read the amendments my concern was that Amendment No. 78 states:
"there shall be left out of account such assets … as are … determined for the purposes of this section by the Secretary of State".
The amendment does not state what assets. My own notes in the margin ask "What assets and why?"
The noble Baroness has told us what assets and why, but the Bill does not say so. Though what she has said makes perfectly good sense, am I not right in saying that the amendment tabled will enable the Secretary of State to take any assets out of the original valuation? That is a power that the Secretary of State should not have because it is very important that, since the NHS trusts will be competing in the supply of contracts with other hospitals, their costings should be made on what is called a level playing field. All the accounts and costings should be done in exactly the same way.
I can see nothing here to prevent the Secretary of State, if he so wishes, from biasing the capital structure of the NHS trusts in their favour or against them. I emphasise that I am not opposed at all to what the noble Baroness has said. It is not clear to me that this amendment says what she wants it to say. Obviously, I will not divide the House on what is a technical amendment. However, it may be that the noble Baroness wishes to take the amendment away and reflect on it and then return with an amendment that actually says what she has just told your Lordships' House.
Baroness Blatch: My Lords, with the leave of the House, I confirm that the noble Lord is correct in his assumption that this amendment does not specify donated assets. He is right to say that the reserve power could be used, if it were deemed sensible and if the particular circumstances were appropriate, to exclude other assets or liabilities.
Lord Winstanley: My Lords, the noble Baroness explained what is meant by assets in this amendment, but she has not explained what is meant by liabilities. Can she give an example of a liability that will be disregarded?
Baroness Blatch: My Lords, with the leave of the House, I can readily think of donated assets but I cannot think of a liability at the moment. Therefore, if there is confusion on that point we shall wait for a very quick example which may come from the Box, but, if not, I shall have to write to the noble Lord.
Lord Peston: My Lords, with the leave of the House, perhaps I may say that the noble Baroness has changed her answer, which was most cogent and acceptable. She now agrees that the amendment gives the Secretary of State much wider powers. The Minister said that the amendment was for a particular purpose and she did not say it was for any other. Does she insist on her broader answer? That is a matter of much greater seriousness when we come to study the operations of the trusts. In principle, and purely theoretically, once a provision
176
is in a Bill it can be used in practice. That could undermine the whole basis for the NHS trusts and non-trusts in the health service.
Baroness Blatch: My Lords, with the leave of the House, I say that I have not changed my answer but expanded it as a result of the question. I confirmed that the assumption made by the noble Lord was that there was a general power there which allowed the Secretary of State, in one-off cases and if particular circumstances were appropriate, to exclude other assets or liabilities. As a rule, they will be used only for donated assets.
On Question, amendment agreed to.
4.30 p.m.
[Amendment No. 77 had been withdrawn from the Marshalled List.]
Baroness Blatch Baroness Blatch moved Amendment No. 78:
Page 9, line 42, at end insert:
("(1A) In determining the originating capital debt of an NHS trust, there shall be left out of account such assets or, as the case may be, liabilities as are, or arc of a class, determined for the purposes of this section by the Secretary of State, with the consent of the Treasury.").
On Question, amendment agreed to.
Lord Ennals Lord Ennals moved Amendment No. 79:
After Clause 11, insert the following new clause:
("Transitional Period: special provisions

.—(1) It shall be the duty of the Secretary of State to ensure that this Act (or any part of it) is brought into force in a manner which is best calculated to promote economy and efficiency.

(2) Section 4 shall not be brought into force if—

(a) the Secretary of State has received representations from a significant number of health service bodies as defined under section 4 above against the principle of that section; and

(b) such an action would not promote economy and efficiency.

(3) Subsection (2) above shall cease to have effect after 31st March 1992.

(4) Nothing in this section shall prejudice the establishment of NHS trust and fund holding practices within the meaning of this Act.").

The noble Lord said: My Lords, I beg to move the new clause standing in my name on the Marshalled List. There is at present a very great deal of confusion in the National Health Service about what will happen on 1st April 1991. When we discussed this earlier the Minister said that it would not be a big bang. However, I think that it will be quite a big bang. There will be very great difficulties and I have said this time and time again. I have said that the DHA managers will not be ready; that new communication procedures, together with service cuts, will create chaos; that maybe the Secretary of State is beginning to realise this because there is a great deal of very concerned evidence.
I do not know whether the Minister saw the leader in the Health Service Journal on 10th May. It reads:
"In an organisation as complex as the NHS there are many management styles and theories. The macho authoritarian school is doomed. Any scheme of change which does not carry the support of staff and public will not succeed."
Here is a case where the staff and the public have by no means been carried by the Government. Attitudes

177
have not moved one iota towards the Government in the past 15 months; in fact, just the opposite has occurred. Clearly the NHS reforms do not have the confidence of management, public or staff. Consequently managers must doubt their ability to deliver. Any who dismiss the public's concerns and say that they are ill-informed, and who resolutely believe that managers know best, should ask themselves whether they are not coming perilously close to fulfilling Bernard Shaw's description of a profession as a conspiracy against the laity. Managers exist to serve the public, not their own ends.
A lot of strange things have been happening. We have seen a very important general manager, Dr. Elaine Murphy, resign. She was general manager of the Lewisham and North Southwark authority in South London which includes Guy's Hospital. Though she broadly supports the Government's proposals, she resigned only two or three weeks ago in protest against the way in which changes were being made.
I saw in a report recently in the press that health service managers were told last weekend to put aside any idea of making big changes when the Government's health proposals take effect. Peter Griffiths, the deputy chief executive of the National Health Service, told managers to concentrate on simple changes, to produce small but demonstrable improvements in the quality of patient care. His comments at the annual conference of the Institute of Health Service Management in Torquay showed the extent to which official expectations of the changes had been scaled down.
Someone said that the reappraisal reflected a more sensible view of what could realistically be achieved in the next 40 weeks. Apparently, Mr. Griffiths said that the NHS management board was not expecting radical changes in the way in which patients were referred for treatment; nor was it looking for highly sophisticated contracts between the purchasing health districts and providing hospitals. Managers were simply being asked to break the mould—a phrase which is quite well-known in this House and within the field of politics. You break the mould and what happens a few years later? That is what he said, that it would break the mould in terms of quality to write into basic care contracts some provision to reduce waiting times etc.
It seems to me, with all the evidence that has come forward, that it would be helpful if the NHS had power not to be required to do everything all at once on 1st April 1991. As I said, evidence is emerging that the pace of change in respect of contracting is simply too fast.
The Department of Health's own timetable document Developing Skills admits that some of the staff arid skills needed for contracting, particularly in the finance field, are in "short supply". Some of the research work into the new role of DHAs will not be ready before health authorities need to finish preparations for the first round of contracts.
In another place, the Public Accounts Committee's report on financial management in the NHS, published on 24th May, told a similar story. The
178
committee found many parts of the financial management of the NHS already in turmoil and expressed concern at the shortage of skilled finance staff. Perhaps some could be borrowed from the district health authority, referred to by the noble Lord, Lord McColl. Perhaps he would offer 50 or 60 finance officers to help with the rest of the service. The committee expressed concern at the shortage of skilled finance staff. In this context, how can health authorities effectively implement contracts?
The purpose of this amendment is to create efficiency, and if a significant number of representations were made from health service units, the Secretary of State would be empowered to postpone the introduction. This period of transition would last only until 1992 and after that the contracting process could be brought in at any time.
The Government's answer to the mounting evidence that the changes are coming too fast is to say that contracts will be simple to begin with and will reflect existing referral patterns. But in that case why not wait till the information systems are available to allow a contract system to be tried out on a less superficial level? What point is there in going through a great reorganisation and then on 1st April just having a little nudge of a change? If this is to be a major change, let the authorities be ready.
More importantly, there is a great danger that simple, crude contracts could be inefficient. Without adequate information systems to ensure that prices charged adequately reflect costs incurred, a contract system could easily lead to the misallocation of resources. Without adequate information, the provider may easily over-charge so that a purchaser gets less value for money, or under-charge creating deficits for itself. Without adequate information, a contract system would be wasteful and have inefficiency built into it. Would it not be more efficient simply to phase in these new changes, if changes must be introduced? That is what this new clause is about.
Your Lordships will remember that during the Committee stage we made attempts to establish an evaluation of the plan. All those ideas were rejected. So, not looking at NHS trusts or GP budgets and putting them aside, and simply looking at the contract system, it seems that the Secretary of State would be wiser if he were to phase it in slowly, steadily and efficiently, rather than coming in in a way that will not and cannot represent the new changes that are envisaged in the Bill. I beg to move.
Lord Rea: My Lords, I support fully my noble friend's amendment. I have only one question about the amendment in relation to subsection (3), which states that subsection (2) shall cease to have effect after 31st March 1992. In other words, the measures embodied in the amendment will cease to apply after that date.
I cannot honestly see why the resource management costing and accounting systems, which my noble friend described as probably not being in place throughout the country by April 1991, should be in place by April 1992. I should have thought that the clause would be better without subsection (3). It should continue to apply until the Secretary of State

179
is satisfied that the economy and efficiency which is desired can be obtained, and there should not be a time limit on it. Nevertheless I support the amendment as it is at the moment.
Lord McColl of Dulwich: My Lords, perhaps I may add to the usual funereal dirge of the noble Lord, Lord Ennals, about all the disasters that are going to occur next year. I should like to quote this passage from certain sections of my own profession.
"The ills within the NHS are serious and, by threatening standards, threaten the health and wellbeing of the community. There is a real danger of standards deteriorating to a point from which recovery will be impossible within a foreseeable term".
Lord Ennals: Hear, hear!
Lord McColl of Dulwich: My Lords, the noble Lord, Lord Ennals, says "Hear, hear", but I need to tell him the date of this funereal dirge. It is 1974. We have had these statements for the last 40 years. My advice to the noble Lord, Lord Ennals, is to cheer up a bit.
Lord Ennals: My Lords, would the noble Lord say from what he is quoting and to what it relates?
Lord McColl of Dulwich: My Lords, it was said in October 1974, and is a statement by the deans and presidents of the Royal Colleges.
Lord Ennals: My Lords, my question was to what they were referring when they made that statement.
Lord McColl of Dulwich: My Lords, the problem is that if ever you feel that you are short of money, the only way to get money, or seem to be able to obtain more money, is to bring out these funereal dirges about how terrible everything is, that everything is about to collapse, and that the great ship of state, the NHS, is about to sink. It has been "sinking" for a long time, but it seems very much afloat to me.
Lord Ennals: My Lords, it was well before I became Secretary of State for Social Services, but I thought that in the interests of my predecessor I ought to find out.
Lord Winstanley: My Lords, to intervene most briefly, the statement that the noble Lord, Lord McColl, read relates to a totally different situation. The problem at the moment is that the authorities and the various bodies within the National Health Service are faced with new problems, one of which is how to cost various procedures. We have contracts that will come into force on 1st April 1991. I do not see how we can have a contract unless we know the prices. There is great doubt as to whether all the different authorities will in fact be able to calculate accurately and effectively the actual cost of the things they are either selling or buying.
That was the point made very clearly by the noble Lord, Lord Carr of Hadley, in a recent debate. It did not refer at all to the problems way back in 1974 or even 1964, or however long the noble Lord wants to go
180
back. There have always been problems. I welcome an attempt now to remedy some of those problems. I hope that the measures contained in this Bill will do that; I think that some will do that. As the noble Lord, Lord Carr of Hadley, said in his speech on the same subject, we now have a downward pressure on costs. Where there is very heavy downward pressure on costs I think there is a danger of errors if new arrangements are made too rapidly.
I think that is the point. It is not that it has taken X-years to arrive at the point where we are having a reform of the National Health Service, but that we now have to start making entirely new calculations on a basis that has never been used before. The noble Lord, Lord McColl, knows as well as I do how difficult it is to cost different procedures bearing in mind that different patients and different hospitals have different costs for necessary and proper reasons. That is the business that is going to take time. If these new arrangements are introduced before all that has been satisfactorily concluded, then we shall be in trouble.
4.45 p.m.
Baroness Hooper: My Lords, one of the main aims underlying the entire Bill before us is, as the noble Lord, Lord Winstanley, has just pointed out, to improve the quality of care and the delivery of care in the National Health Service, and to do this we certainly need to promote economy and efficiency. But by putting stress on this I would not wish in any way to relegate what is perhaps the most important of the triumvirate of "Es", and that is "effectiveness". And I mean by that not just cost-effectiveness but effectiveness in the widest sense, including clinical effectiveness.
As I have said on many occasions now, the firm intent of the Government is to introduce the provisions of this Bill in a way which enables the benefits to patients and staff to flow, certainly, but at the same time does not in any way lead either to patient or staff uncertainty or to disruption of services. That will be the position on 1st April next year. The new framework will be in place, benefits will flow, but there will be room to build upon them in subsequent years, and that is entirely consistent with our evolutionary approach.
The health service is working to a challenging but, we believe, feasible timetable, because unless we maintain a determined pace then the momentum and enthusiasm which has developed within the health service could falter. I would draw to your Lordships' attention that a great deal of work has already been done on the contracting principle, and it would be quite a blow to those people who are carrying things forward if delay were introduced in any way.
So while I welcome the spirit of the amendment and its references to implementation in a manner calculated to promote economy and efficiency, I would say that that is the approach that has characterised our preparations for implementation. Once the Bill has received Royal Assent, as I sincerely hope it will very soon, that approach will be fully reflected in all work instituted by my right

181
honourable friend the Secretary of State and indeed the National Health Service Management Executive.
However, I would point out that if we were to introduce the concept of this amendment into the Bill as it is proposed, it would, or could, at some stage be a matter for the courts to interpret what we meant by that. This is always the problem with general statements. They would seek to interpret what special meaning or purpose we had in introducing this specific provision into the Bill when it was not thought necessary in any other Act of Parliament.
In making this point with reference to the introduction of the words "economy and efficiency" I would also point out that the guidance issued by the department on the contracting system places great emphasis on the need to develop quality measures and to ensure that contracts are as much about quality as about cost. We have of course already discussed this in your Lordships' House in some detail, and I believe that it is the key principle for the introduction of National Health Service contracts. It is one that the Government intend to continue to stress. Implementation of the provisions of the Bill, and in particular those in Clause 4, would not be assisted by any countervailing emphasis solely on economy and efficiency. Though intended to be a statement of the obvious, the new clause may well give the wrong emphasis and could even potentially militate against an emphasis on quality. I am quite sure that that is not what the noble Lord had in mind in proposing the amendment.
I want to make two final points. The first concerns the transitional provision for contracting in subsection (2) of the new clause. I must say that I find it most unlikely that a significant number of health service bodies, as defined in Clause 4, would object to the principles of National Health Service contracts. On the contrary, most health authorities are very supportive. It is most certainly not the Government's view that wholesale delay of the implementation of Clause 4 would promote economy and efficiency. Quite the reverse.
However, I repeat what I said at Committee stage; many of the contracts introduced in April 1991 will be in relatively simple block form, and there will be little difference from existing patterns of service. They will be the starting point, and the process will develop and evolve from there. There will be—and again I repeat this, as the noble Lord, Lord Ennals, also mentioned it—no big bang, no overnight change, and no disruption of services. Nor shall we push, or even allow, health authorities to go faster than they have the competence to do. We shall proceed only at a pace that we are satisfied health authorities can handle. The degree of competence, the ability to make progress, could differ from region to region and district to district. A single nationally prescribed deadline will not be helpful in that respect.
Finally, the new clause purports not to prejudice the establishment of NHS trusts and fund-holding practices' but both will be dependent upon the existence of such contracts: trusts for their income, and fund-holders to enable their referral decisions to be funded. It would be impossible for any trusts to
182
be established and any fund-holding practices to operate in the year 1991–92 if the amendment were passed, despite the words of the last subsection of the new clause. There is therefore a contradiction between the clause's apparent intention and its probable effect. It could never be implemented as drafted.
I have said that we should avoid generalisations in legislation. Equally, we should try to avoid contradiction and impracticality. I hope that with that somewhat lengthy response, the noble Lord will feel able to withdraw his amendment. Failing that, I hope that the House will reject it.
Lord Ennals: My Lords, I am grateful to the Minister for replying. The amendment was designed to help and not to be obstructive. I believe that the Minister sensed that. She referred to wholesale delays. I have to deal with wholesale delays on one side and on the opposite side my noble friend who says that the delay is not long enough. I believed that the proposal to introduce a year's delay was reasonable. I am sorry that the Minister has not accepted that proposal.
The noble Lord, Lord McColl, seemed to have the impression that the doom and gloom that comes from me originated with me. It does not. I only reflect the doom and gloom that I hear from people within the health service. That does not come only from the professions. At the conference of the Institute of Health Service Management last weekend, I quoted Peter Griffiths, the Deputy Chief Executive of the NHS. He also said, although I did not quote it, that managers were in for a difficult time during the three-month consultation period of hospitals seeking to opt out of district control. I leave that aside for a moment.
Mr. Griffiths advised the conference not to talk about business plans, not to talk about marketing, not to talk about market share and segmentation and not to talk in the kind of commercial language that switches off every member of staff. Presumably he also meant that one should not talk about how to calculate costs. The noble Lord, Lord Winstanley, put his finger on the point. One cannot calculate costs if one does not have the information or the technology to do so. What does one do? Does one make a guess and say, "Well, the nearest figure that we can think of is this"? That is a recipe for incompetence and inefficiency.
No serious management consultant would say to the department at this stage in the process that it is better to do something even if it is not what one plans to do. That can lead only to inefficiency. The Minister said that there was no precedent in legislation for such delay. It might have been helpful had there been such a precedent. I suspect that if there had been a provision in the Bill that introduced the poll tox, or the community charge, that if there was a worry as to whether we were ready to implement it it could be introduced a year later, the Government might have jumped at the opportunity of escaping from a desperate situation from which they may never recover politically.
There are sometimes advantages in precedents. There may not be a precedent, but let us create one

183
so that the NHS is not plunged into a situation of the Minister's making. Nothing that the Minister said convinced me. We must once again take the view of the House.
4.54 p.m.
On Question, Whether the said amendment (No. 79) shall be agreed to?
Their Lordships divided: Contents, 84; Not-Contents, 129.

DIVISION NO. 3

CONTENTS

Addington, L.

Jeger, B.

Airedale, L.

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Aylestone, L.

Kearton, L.

Birk, B.

Kennet, L.

Blackstone, B.

Kilbracken, L.

Bonham-Carter, L.

Leatherland, L.

Boston of Faversham, L.

Listowel, E.

Bottomley, L.

Llewelyn-Davies of Hastoe, B.

Broadbridge, L.

Brooks of Tremorfa, L.

Lloyd of Kilgerran, L.

Bruce of Donington, L.

Lockwood, B.

Campbell of Eskan, L.

Longford, E.

Carmichael of Kelvingrove, L.

Lovell-Davis, L.

Macaulay of Bragar, L.

Carter, L.

Mason of Barnsley, L.

Cledwyn of Penrhos, L.

Milner of Leeds, L.

Clinton-Davies, L.

Morris of Castle Morris, L.

David, B.

Morris of Kenwood, L.

Dean of Beswick, L.

Murray of Epping Forest, L.

Diamond, L.

Nicol, B.

Donaldson of Kingsbridge, L.

Northfield, L.

Dormand of Easington, L.

Oram, L.

Ennals, L.

Peston, L.

Ewart-Biggs, B.

Phillips, B.

Ezra, L.

Pitt of Hampstead, L.

Falkender, B.

Prys-Davies, L.

Fisher of Rednal, B.

Rea, L.

Foot, L.

Richard, L.

Gallacher, L. [Teller.]

Seear, B.

Galpern, L.

Serota, B.

Gladwyn, L.

Stallard, L.

Graham of Edmonton, L. [Teller]

Stedman, B.

Strabolgi, L.

Grey, E.

Taylor of Gryfe, L.

Hanworth, V.

Tordoff, L.

Hatch of Lusby, L.

Varley, L.

Hirshfield, L.

Wallace of Coslany, L.

Hollis of Heigham, B.

White, B.

Holme of Cheltenham, L.

Wigoder, L.

Houghton of Sowerby, L.

Willis, L.

Hughes, L.

Winstanley, L.

Jacques, L.

Young of Dartington, L.

Jay, L.

NOT-CONTENTS

Ailesbury, M.

Borthwick, L.

Aldington, L.

Boyd-Carpenter, L.

Alexander of Tunis, E.

Brigstocke, B.

Allerton, L.

Brookeborough, V.

Alport, L.

Butterworth, L.

Ampthill, L.

Caithness, E.

Annaly, L.

Campbell of Croy, L.

Arran, E.

Carnarvon, E.

Balfour, E.

Carnegy of Lour, B.

Bellwin, L.

Carnock, L.

Beloff, L.

Cavendish of Furness, L.

Belstead, L.

Chelmer, L.

Bessborough, E.

Clanwilliam, E.

Blake, L.

Constantine of Stanmore, L.

Blatch, B.

Cottesloe, L.

Blyth, L.

Cross, V.

184

Cumberlege, B.

Monckton of Brenchley, V.

Davidson, V. [Teller.]

Monk Bretton, L.

De L'Isle, V.

Monson, L.

Denham, L. [Teller.]

Monteagle of Brandon, L.

Derwent, L.

Montgomery of Alamein, V.

Donoughmore, E.

Mottistone, L.

Eccles, V.

Mountevans, L.

Eccles of Moulton, B.

Munster, E.

Eden of Winton, L.

Murton of Lindisfarne, L.

Elibank, L.

Nelson, E.

Elles, B.

Nugent of Guildford, L.

Elliot of Harwood, B.

O'Brien of Lothbury, L.

Elliott of Morpeth, L.

Onslow, E.

Elton, L.

Orr-Ewing, L.

Ferrers, E.

Oxfuird, V.

Foley, L.

Pender, L.

Fraser of Kilmorack, L.

Plummer of St. Marylebone, L.

Gardner of Parkes, B.

Gibson-Watt, L.

Porritt, L.

Gisborough, L.

Quinton, L.

Grimston of Westbury, L.

Rankeillour, L.

Halsbury, E.

Reay, L.

Harmar-Nicholls, L.

Renton, L.

Havers, L.

Rippon of Hexham, L.

Henley, L.

Saint Albans, D.

Hives, L.

Saltoun of Abernethy, Ly.

Hood, V.

Sanderson of Bowden, L.

Hooper, B.

Sharpies, B.

Hunter of Newington, L.

Skelmersdale, L.

Hylton-Foster, B.

Slim, V.

Ingrow, L.

Strange, B.

Johnston of Rockport, L.

Strathclyde, L.

King of Wartnaby, L.

Strathmore and Kinghorne, E.

Kinnaird, L.

Kitchener, E.

Swinfen, L.

Lauderdale, E.

Teviot, L.

Layton, L.

Thomas of Gwydir, L.

Lindsay, E.

Thorneycroft, L.

Liverpool, E.

Ullswater, V.

Lloyd of Hampstead, L.

Vaux of Harrowden, L.

Long, V.

Wade of Chorlton, L.

Lurgan, L.

Walton of Detchant, L.

Lyell, L.

Wedgwood, L.

McColl of Dulwich, L.

Whitelaw, V.

Macleod of Borve, B.

Wise, L.

Manton, L.

Wyatt of Weeford, L.

Margadale, L.

Wynford, L.

Marshall of Leeds, L.

Young, B.

Merrivale, L.

Zouche of Haryngworth, L.

Mersey, V

Resolved in the negative, and amendment disagreed to accordingly.
5.3 p.m.
Clause 30 [National Health Service trusts]:
The Minister of State, Scottish Office (Lord Sanderson of Bowden)The Minister of State, Scottish Office (Lord Sanderson of Bowden) moved Amendments Nos. 80 to 88:
Page 31, line 32, at beginning insert ("Subject to subsection (1A),").
Page 31, line 41, at end insert:
("(1A) The Secretary of State shall by regulations provide for such consultation as may be so prescribed to be carried out by a Health Board or the Agency, before he makes an order under subsection (1).").
Page 31, line 47, after ("who") insert (", subject to subsection (4),").
Page 32, line 15, at end insert ("or may be suspended from performing the functions of the office").
Page 32, line 20, at end insert:
("(cc) the circumstances in which a person who is not an employee of the trust is nevertheless, on appointment as a director, to be regarded as an executive rather than as a non-executive director;").
Page 33, line 4, at beginning insert ("Subject to subsection (4A),").
Page 33, line 34, at end insert:
("(4A) In any case where—

(a) an order under section 12A(1) provides for the establishment of an NHS trust with effect from a date earlier than the operational date of the trust; and

(b) on or after that earlier date but before its operational date e NHS trust makes an offer of employment by the trust to a person who at that time is employed by a Health Board of the Agency to work solely at, or for the purposes of, the hospital or other establishment or facility which is to become the responsibility of the trust; and

(c) as a result of the acceptance of the offer, the person to whom it was made becomes an employee of the NHS trust,

subsections (3) and (4) shall have effect in relation to that person's contract of employment as if any reference in those subsections to the operational date of the trust were a reference to the Sate on which he takes up employment with the trust.").
Page 35, line 48, after ("representing") insert (", subject to subsection (1A),").
Page 36,line 4, at end insert:
("(1A) In determining the originating capital debt of an NHS trust, there shall be left out of account such assets or, as the case may be, such liabilities as are, or are of a class, determined for the purposes of this section by the Secretary of State, with the consent of the Treasury.").
The noble Lord said: My Lords, Amendment No. 80 has already been spoken to, as have Amendments Nos. 8 to 88. I beg to move them en bloc.
The Deputy Speaker (Lord Nugent of Guildford): My Lords, with the leave of the House, unless any noble Lord wishes to speak to any of the amendments, I shall put Amendments Nos. 80 to 88 en bloc.
On Question, amendments agreed to.
Schedule 6 [Schedules to be inserted after Schedule 7 to the National Health Service (Scotland) Act 1978]:
Baroness Young Baroness Young moved Amendment No. 89:
Page 85, line 20, leave out ("whether") and insert ("where").
The noble Baroness said: My Lords, I beg to move.
On Question, amendment agreed to.
Baroness Young Baroness Young moved Amendment No. 90:
Page 85, line 21, leave out ("and, if so").
The noble Baroness said: My Lords, I beg to move.
On Question, amendment agreed to.
Baroness Young Baroness Young moved Amendments Nos. 91 to 93:
Page 85, line 23, leave out first ("or") and insert ("with").
Page 85, line 28, at end insert:
("(1A) For the purposes of sub-paragraph (1)(d), an NHS trust is to be regarded as having a significant teaching commitment in the following cases—

(a) if the trust is established to assume responsibility for the ownership and management of a hospital or other establishment or facility which, in the opinion of the Secretary of State, has a significant teaching and research commitment; and

(b) in any other case, if the Secretary of State so provides in the order.").

Page 85, line 32, leave out ("or medical or dental school").
The noble Baroness said: My Lords, I beg to move Amendments Nos. 91, 92 and 93.
The Deputy Speaker: My Lords, unless any noble Lord wishes to speak to them, I propose to take these amendments together.
On Question, amendments agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 94:
Page 86, line 50, leave out ("accounts and annual report") and insert ("audited accounts, its annual report, and such other documents as may be prescribed,").
The noble Lord said: My Lords, this amendment makes a slight adjustment to the documents which must be submitted to the annual public meeting of a National Health Service trust. The present wording specifies that the accounts and annual report must be submitted to the meeting. The amendment makes it clear that it is the audited accounts which are to be submitted. It adds a requirement for the submission of,
"such other documents as may be prescribed".
This is intended to cover any reports which may have been made by the auditor. A similar amendment was made in Committee to the English and Welsh provisions in paragraph 7 of Schedule 2.
The position in Scotland is a little more difficult because the Bill allows for two audit regimes. First, the Bill extends the present statutory audit arrangements, involving auditors appointed by the Secretary of State, to cover National Health Service trusts as well as health boards and the like. But Clause 35 and Schedule 7 also allow the Commission for Local Authority Accounts in Scotland to assume responsibility for National Health Service statutory audit in Scotland. It would therefore have been quite complex to specify in the Bill which auditor's report was to be submitted to the National Health Service trust's annual meeting. The amendment leaves this to be specified in the regulations, which are in any case required to prescribe the time of the public meetings. Initially these regulations will refer to the reports by auditors under the present regime. If and when the accounts commission assumes responsibility for National Health Service statutory audit in Scotland, the regulations will be altered to refer to reports by the new set of auditors. In that way, the amendment achieves the same as the equivalent English provision which already appears in the Bill. I beg to move Amendment No. 94.
Lord Peston: My Lords, I do not wish to delay your Lordships. I hope that this is a technical matter. Can the noble Lord confirm that the effect of the amendment is to leave the position in Scotland no less open and accountable than that in England? I take it that that is exactly what he is saying.
Lord Sanderson of Bowden: My Lords, with the leave of the House, yes, I can answer that in the affirmative.
Baroness Phillips: My Lords, I wish to ask the Minister what are the "other documents". I have just gone to an annual meeting of a trade association. Obviously the accounts referred to in the Companies Act are audited accounts. I do not quite know why one has to specify "such other documents". What

187
could be the documents that they have to be mentioned in an Act of Parliament?
Lord Sanderson of Bowden: My Lords, with the leave of the House, I cannot specify what those documents may be. However, there may be a special report which the auditors wish to bring before an open meeting which indicates something that the auditors feel may need to be attended to.
On Question, amendment agreed to.
[Amendments Nos. 95 and 96 not moved.]
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 97:
Page 88, line 13, at end insert:
("16A. In connection with arrangements relating to community care services (within the meaning of section 5A(4) (local authority plans for community care services) of the Social Work (Scotland) Act 1968), the Secretary of State may by regulations make provision with respect to—

(a) the transfer to employment by a local authority of staff employed by an NHS trust; and

(b) the transfer to employment by a National Health Service body of staff transferred to employment by a local authority by virtue of this paragraph, and for the purposes of this paragraph "National Health Service body" means an NHS trust, a Health Board or the Agency.

16B. Regulations made under paragraph 16A may make such incidental and consequential provision in relation to staff transferred by virtue of that paragraph as may be made in relation to officers and servants of a Health Board transferred by virtue of regulations made under paragraph 8A of Schedule 1.
16C. Before making regulations under paragraph 16A, the Secretary of State shall consult such bodies and organisations as appear to him to be concerned.").
The noble Lord said: My Lords, I beg to move Amendment No. 97 which was spoken to with Amendment No. 23.
On Question, amendment agreed to.
[Amendment No. 98 not moved.]
Clause 12 [Functions of Family Health Services Authorities]:
Lord Peston Lord Peston moved Amendment No. 99:
Page 13, line 36, at end insert:
("(6) It shall be the duty of a Family Health Service Authority to ensure that any document published by any general medical practitioner within the boundary of the Authority for the purpose of promoting general medical services provided in accordance with section 29 of the principal Act shall not include any reference designed to promote any goods or services offered by any person for financial gain.").
The noble Lord said: My Lords, the amendment refers to what are called "GP practice leaflets". This about the first time on which we have had a chance to say anything about them, for obvious reasons. Until this moment they have not been specified, actually or potentially, on the face of the Bill. In introducing the amendment I should say right away that I am not opposed to GP practice leaflets. On the contrary, I believe that a leaflet of a practical nature containing factual information about the services that the GP is providing, opening hours and other such matters is wholly desirable. I am not at all opposed to GP practice leaflets.
I shall now deal with a matter which gets me closer to what I am concerned about: I do not believe it is a bad thing if GP practice leaflets also contain information about various clinics that may exist in the area of the practice—I am now wearing my pharmacy hat—and information about the names and addresses and opening hours of local pharmacies. That all seems to me to be perfectly satisfactory and not a problem. However, I have tabled the amendment because I am concerned about advertising. I should like some Government comment on this matter.
One hesitates to raise the whole question of ethics and medicine at this stage. However, I believe I have noticed the General Medical Council trying to come to grips in the past couple of weeks with the question of advertising in medicine. As someone who takes the traditional ethics of the professions seriously, I should say that I worry a trifle about the direction in which we are going in respect to advertising and other such matters. I shall say no more about the GMC but merely utter those words of worry.
Nonetheless, within the GP practice leaflets there are other advertising concerns that we should interest ourselves in. One such matter concerns pharmacies. I have already said that I see no objection to any of the local pharmacies taking space in the GP practice leaflets to state their address and when they open full stop. However, the question that arises in the case of pharmacies is whether they should be able to include advertisements of a more active nature or of a more "come to our pharmacy" nature. This is a difficult question as regards the ethics of the pharmacy profession. Speaking as a member of the council of the Royal Pharmaceutical Society of Great Britain, I am aware that the council is looking at ethical aspects of the problem. However, the matter goes further because it is part of our system of medicine in this country that we have tried hard to avoid conflicts of interest between general practitioners on the one hand and pharmacists on the other.
Although there are controversial aspects of this matter, essentially the basic theory is that a general practitioner prescribes according to his professional judgment—we shall have one or two amendments on that matter in due course—and the patient goes to whichever pharmacy seems to him to be appropriate. However, one worry that I have concerns any suggestion that might appear in a practice leaflet that there are specific pharmacies which a general practitioner recommends or attaches to himself. I believe that genuine ethical issues would arise within the practice of medicine if that situation were to occur.
Let me add that I am aware that pharmacies are also thinking of entering the leaflet business. In connection with the ethics of a pharmacy leaflet, I would raise the matter of whether pharmacies should take advertisements from general practitioners which implied that some general practitioners were favoured. Without overdoing this matter I merely state that I would worry about the ethical side of the matter.
However, there are three or four other points which I wish to raise. One concerns whether

189
pharmaceutical companies would be regarded as appropriate bodies to take advertising space within G.P. practice leaflets. Noble Lords will know that I am not an opponent of pharmaceutical companies. Indeed I much appreciate the contribution that they have made to the improvement of medical care in this country. I should also say, wearing my economics hat, that I appreciate the contribution they make to the balance of payments and general economic growth. Therefore I am not opposed to the pharmaceutical companies although I occasionally look askance at their advertising and sales methods. However, it is again not obvious to me that a GP practice leaflet is the correct place for major pharmaceutical companies to advertise. G.P. practice leaflets will cost money and I do not believe that we should wish to see a state of affairs in which, essentially, pharmaceutical companies are financing the leaflets.
There are many other points that could be raised and, as with all matters of ethics, one could go on for a long time. I know that academics like myself have to be restrained from speaking of our concern on ethical matters. However, there is another point which I wish to raise. I should like the Government to comment on whether they would regard it as appropriate that the general practice should itself make money from advertising in its practice leaflet. I ask that question because, ethically, it worries me a little that the G.P. practice leaflet might essentially become an advertising medium from which the practice gained money.
Those are the worries I have. The only way I can raise them is within the context of an amendment to the Bill because there is no other path into these matters. I would welcome a statement from the Government as regards their views on these matters and on whether there will be regulations and/or guidelines on the leaflets. I never speak on this subject with any degree of expertise and for all I know there already exist guidelines and regulations. However, those are the kinds of topic I wish to raise. I look forward to hearing the Government's response to then'. I beg to move.
5.15 p.
Lord Walton of Detchant: My Lords, I wish to comment on this amendment not from my present experience but from my experience until February of last year as president of the General Medical Council. During my presidency we relaxed the advice given to the medical profession about the dissemination of factual information to the public by agreeing that it was proper and appropriate that general practices should prepare informative leaflets giving information about the range and nature of the services that they provided. We agreed that these leaflets could be placed in centres of public information such as public libraries and other similar places.
During my presidency the General Medical Council was referred by the Office of Fair Trading for a hearing before the Monopolies and Mergers Commission. As noble Lords will be aware, the commission recommended that the rules or the guidance for the profession should be relaxed further
190
to allow general practitioners to advertise within certain terms. It is my understanding that only some three weeks ago the General Medical Council promulgated its new advice to the profession. That new advice will allow, within certain restrictions, advertising by general practitioners although not by specialists. Specialists will not be able to advertise directly to the public, so as to preserve the gatekeeper function through which patients in this country arc normally referred to specialists by general practitioners. However, GPs will be allowed to advertise and will be able to produce more informative practice leaflets provided the information in the advertisements and in the leaflets is legal, honest, decent and truthful in the terms of the Advertising Standards Authority. It is specifically provided that the material which is so promulgated and included in advertisements does not in any way seek to promote the services offered by those general practitioners and that it does not seek specifically financial gain. It should not in any way include material which makes invidious comparisons between the services offered by those respective practitioners and other colleagues. It must not in any way disparage the services given by other colleagues. I believe that the General Medical Council is capable of policing this matter appropriately. For that reason I must say that I personally feel this amendment to be unnecessary.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, I appreciate that the amendment is probably just a probing amendment. However, I should say that I think it goes slightly further than I expect the noble Lord intends, in that, as he receives payment for those services, it would, as worded, have the undesirable effect of preventing a doctor using his practice leaflet to promote several of the services he provides to his own patients under the National Health Service, such as health promotion clinics and other services. I am sure that was not the intention of the noble Lord but I thought it would be worth pointing that out in replying to the amendment.
Practice leaflets form part of our package of measures introduced with the new GP's contract—which is why they are not in the Bill—to inform and empower the consumer of general medical services. Other elements of the package include local directories of family doctors, consumer surveys and simpler arrangements for changing doctors. Under the new terms of service each practice has to produce a practice leaflet. It will represent the public face of the practice. Prospective patients will use it as a guide to the practice's services and, I am sure, to its individual style. Doctors will therefore be anxious to present a good image and will therefore, I believe, use their freedom to accept advertising sensibly.
As a result we do not accept that doctors taking advertising in their leaflets will do any harm. On the contrary, we believe that there could be benefits in sponsorship and advertising. Money received, for example, would be available to improve the services provided to patients. I know that the noble Lord has ethical worries on the matter but I cannot share them.

191
The noble Lord, Lord Walton of Detchant, spoke about the General Medical Council and its recently reissued general medical and pharmaceutical regulations which govern practice leaflets. The noble Lord quite rightly said that it would no longer be a breach of conduct for doctors to take advertising in this way. He also said that he felt that the General Medical Council was the appopriate body to police the matter. I can only agree with the noble Lord. I hope that the noble Lord Lord Peston, will accept that the noble Lord, Lord Walton, has done much of my job for me in explaining that particular matter.
To pick up one other point, the noble Lord was worried that a doctor or practice taking advertising from a particular pharmacist might be seen as giving an endorsement of that pharmacist. Everyone is familiar with advertising and can distinguish advertising from an editorial. I do not see that this will cause any problems. With that in mind I hope that the noble Lord will feel able to withdraw his amendment.
Lord Peston: My Lords, I thank the noble Lord, Lord Henley, and also the noble Lord, Lord Walton. I apologise to the Minister for not saying at the outset that this was a probing amendment.
I was somewhat reassured by the noble Lord, Lord Henley, except when he referred to sponsorship. That worried me. I would not wish to see a GP practice leaflet sponsored, particularly if the sponsors turned out to be the type of companies, for example tobacco and drinks companies, which sponsor so many other things. However, perhaps that is excessive anxiety on my part.
I was reassured by the intervention of the noble Lord, Lord Walton. As the noble Lord, Lord Henley, said, the noble Lord had done his job in answering the question. He emphasised that these are informative leaflets and that leaflets seeking to promote a practice would not be acceptable within the normal ethical standards of the medical profession.
Perhaps I may say en passant in connection with the OFT and the professions that I hope that we shall debate the subject again in the near future. Although I am a strong supporter of the OFT and of professional competition I believe that its onslaught on the professions is beginning to go too far.
I am encouraged that the GMC will continue to have a policing role. I regard that as highly protective of the standards that we want, just as the Royal Pharmaceutical Society of Great Britain's policing role regarding pharmacists will also provide a great deal of reassurance.
The questions that I had in mind have been answered. However, I believe that we should keep an eye on the matter. Who knows, in a year or two at Question Time someone may brandish an unattractive GP practice leaflet and we shall discuss the matter. I thank the noble Lord for his reply and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Masham of Ilton Baroness Masham of Ilton moved Amendment No. 100:
Page 13, line 36, at end insert:
("( ) No Family Health Services Authority shall be exempt from their duty under section 29 of the principal Act to arrange for the provision of general medical services to all persons in their locality solely on the ground that the treatment of any person is likely to be expensive.
( ) The Secretary of State shall by regulations prescribe a procedure for appeals against—

(a) refusals, on any ground, to admit any person to the list of a general medical practitioner; and

(b) removal of any person from the list of a general medical practitioner.")

The noble Baroness said: My Lords, I hope very much that the Government will accept the amendment as there is no doubt that our very valuable National Health Service is being considerably changed. When there is change there is a certain amount of insecurity, and the most insecure are the very people who need support.
I am sure that most noble Lords will agree that at times relationships between all kinds of people break down. The amendment has nothing to do with the problem of relationships which break down when doctors and patients fall out. The amendment deals with the matter of patients who may have serious handicaps or conditions which may need expensive treatment or just take more time. There are some patients who are difficult to understand and others who may take time because they are mentally ill, physically disabled or elderly. Extra time could mean that they are expensive, in the same way as those who need extra visits or drugs.
In 1981 I was very pleased to accept the honour of being made a Fellow of the Royal College of General Practitioners. I am pleased to be patron of the Yorkshire Faculty of General Practitioners. Most doctors are caring people who will try to do the best for their patients. However, there are some who may not be so tolerant and understanding. A mother who has a severely disabled child can be very anxious. An elderly, frail person can feel lonely and isolated. A drug addict or an alcoholic, or someone who is mentally ill, may not be easy at times. Some doctors have already had their practices overloaded with certain types of patient because they have been sympathetic. That means that other doctors have not given the help needed. Word soon gets around among groups of patients.
The amendment gives patients a right of appeal, once a procedure has been worked out by the Secretary of State. Doctors have a right of appeal. Why should patients not also have a right of appeal? We do not have to legislate for good practice. It is for the rare cases of injustice and bad practice that we need some safeguards. We also have to stop any escalation of the practice of removing patients from doctors' panels because they are expensive or inconvenient. I once heard a doctor say: "Good patients are the ones we never see". I have always hoped that he was joking, but I was not sure.
As the emphasis of the Bill is on marketing there is real fear. I am not scaremongering. Several patients have said to me that patients with long-term disabilities or who are elderly may have difficulty in being accepted on a doctor's list if they move to

193
another part of the country. We need to give patients a feeling of security.
If Patients First and Working for Patients mean more than just words this amendment could help. It is not clear how much previous legislation will be removed when the Bill takes over. I have not been given any reassurance that unexpected problems will not arise. I beg to move.
Baroness Gardner of Parkes: My Lords, I wish to speak to the amendment because I believe that there is a very real problem at the moment, particularly as regards the matters referred to in the first part of the amendment. I do not feel at all the same way about the second part of the amendment, which deals with appeals.
I have heard within the last month of several cases of geriatric patients about to be discharged from central London hospitals. When the house officer has phoned the patient's GP the GP has given a very curt reply and been put out that the patient is being released from hospital, saying that he will have to remove the patient from his list. That is quite alarming. I seek confirmation from the Minister that the same system exists which has always existed in the past; namely, that if people cannot get onto a certain list they are placed on a list. In small country areas, there were many patients who were extremely difficult. No doctor wanted them and they had to be moved from doctor to doctor every few months so that everyone got a fair share of them.
That is probably the ideal answer, but it is wrong that people should be able to reject patients simply because they will mean more work. The health service has always worked on the basis of swings and roundabouts. If you had a difficult patient, you also ha d an easy one; if you had a time-consuming patient, you also had a quick one. It all worked out so that you could cope. If a doctor already has a full list of patients, will the local health authority still be able to put such a person on his list and thus make him take his fair share, or will the list remain full so that he cannot take a turn?
On the appeal issue, I think quite the reverse. It is totally useless. If the relationship between a doctor and a patient has broken down to the extent to which a person would go to appeal, what would be the answer if he or she won the appeal? It would be rather like an industrial tribunal where people ask for reinstatement. It never works because such bad feeling has developed between the two parties. An appeal in this case would have the same effect. How would you like to be reinstated on the list of someone who did not want you and did not like you? You would never feel confident of receiving satisfactory treatment.
I cannot support the amendment, particularly the appeal section, wholeheartedly, but I am concerned about the first point and I hope that we shall receive a satisfactory answer on that.
5.30 p.m.
Lord Winstanley: My Lords, I too am sympathetic to the amendment for the clear reasons that the noble Baroness, Lady Masham of Ilton, has
194
explained—there are grave difficulties—and for the reasons which have been underlined and illustrated by the noble Baroness, Lady Gardner of Parkes. However, at the same time, I am a little uneasy about the amendment, partly for the same reasons that the noble Baroness, Lady Gardner, has expressed.
There is a problem here and there is at present machinery to deal with it. We have written into our practice over the years an assumption that a patient should have a free choice of doctor. I believe that he should have such a choice. In practice, the choice is not often as real as it should be, but, if there is to be free choice of doctor by patient, up to a point there must also be free choice of patient by doctor.
The noble Baroness, Lady Masham, said that the purpose of the amendment was not to deal with the problems when a relationship had broken down. Such relationships often break down. There is nothing to be gained by compelling to remain together a patient and a doctor who hate the sight of each other. Many patients do not care for their doctors and the same is true the other way round. When the author, Dr. Richard Gordon, whom many noble Lords will remember, was asked on television why he had given up medicine, he replied that he liked medicine very much but that he could not stand the patients.
As a doctor, I must admit that many of my patients were not all that keen on me. There was a certain kind of patient who came into your surgery every week. The moment he came in, your heart sank and, groping at the bottom of the barrel of human compassion, you reached for his notes, looked up and asked, "How are you this week, Mr. Smith?" Slowly his face would crack into the inevitable smile with the word, "Worse". That is the kind of patient who remains faithful to you till death do us part—your death, not his.
The amendment is not designed to meet that kind of situation. It is designed to meet a practical situation. Why do doctors sometimes refuse to take a patient onto a list? Often, it is merely because the list is full. That is particularly so in urban areas where a doctor has to say, "I'm sorry. My list is already full". When she replies, the noble Baroness will explain that many doctors' lists contain in excess of the permitted number of patients. That situation is changing. It may change further later, but that has been the case in the past.
There is a procedure whereby a patient who cannot get onto the list of a certain doctor is allocated by the family practitioner committee to another doctor's list on which there is room. It is not a satisfactory procedure, but that is the procedure at present. Can we devise a better procedure?
What about appeals? The amendment states:
"The Secretary of State shall by regulations prescribe a procedure for appeals".
If every patient who is refused the right to go on a certain doctor's list is allowed an appeal, that could go on for ever. Similarly, if every patient who is removed from a doctor's list is allowed an appeal, that too could go on for ever. However, I agree that it would be highly regrettable and objectionable if it was discovered that a doctor refused to accept a

195
patient on his list merely because he thought that the patient might happen to be ill at some time and need medical care. The purpose of going on a list is to be looked after. There is a risk and a danger that, unless matters are looked after properly, doctors will tend to seek out healthy patients and perhaps not accept patients who will lead to a great deal of work and expense and be an extra burden for the practice. We must consider and monitor that matter continuously. However, frankly, I doubt whether it can be monitored by a succession of appeals on an ad hoc basis relating to a number of different and unrelated cases.
I await the Government's reply to the amendment. I am not sure whether the existing machinery is entirely satisfactory, although it must certainly be kept in order until there is something else in its place. I shall look forward to hearing the Government's proposals. There should be some way of dealing with a situation in which it becomes apparent that a patient with a certain condition—perhaps a psychiatric illness—who moves from one district to another finds it impossible to get on a GP's list. That is offensive and objectionable and should be dealt with. It is doubtful whether it can be dealt with by a system of individual ad hoc appeals. I shall await the Government's reply. The noble Baroness has done us a service by raising the matter.
Lord Boyd-Carpenter: My Lords, I hope that when my noble friend the Minister replies she will either accept the amendment or give a sympathetic reception and an indication of what the Government propose in lieu, for it deals with a matter on which there is a good deal of anxiety.
With the introduction of the system of budgeting, it is natural that a medical practitioner might be a little nervous about taking on a patient whose treatment will be highly expensive. One of the obvious examples that leaps to mind is the case of a patient who requires treatment with a series of highly expensive modern drugs over a considerable length of time, or, as was suggested earlier, who requires constant attention, perhaps even in the middle of the night. There is some anxiety about the matter which I hope my noble friend will be able to relieve.
I note what the noble Baroness said about the second part of the amendment—the appeals procedure. There is obvious force in what she said about the difficult relationship between a doctor and a patient where the patient has succeeded in appealing against the doctor. On the other hand, if noble Lords look at the first half of the amendment on the basis that there is no second part, one is left with a highly respectable statement of principle, but without any apparent sanction behind it.
I suspect that, if you leave the appeal procedure in—as on the whole, subject to what my noble friend says, I am inclined to agree that one should—it would rarely be invoked, but its very existence would have a salutary effect on a doctor where the would-be patient showed signs of objecting to being excluded. On the whole, therefore, whether the appeal procedure as drafted is particularly good is perhaps
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a more open question, but simply to leave the suggestions of the amendment in the first paragraph would be to leave a splendid declaration of principle, but without any teeth to it. This is a matter on which there is very real anxiety outside. It is not in any sense a political point. It is in fact one's own experience. It comes from having spoken to various people. I think that it is up to Her Majesty's Government to relieve that anxiety either, as I said, by legislation or by some other means. I wait to hear what is proposed.
Lord Mottistone: My Lords, I too should like strongly to support the whole sense of this amendment. To mention briefly the matter of appeals, I think that my noble friend Lord Boyd-Carpenter put his finger on the point. To take up the point made by my noble friend Lady Gardner, there is nothing to say that if someone appeals he automatically is put back to the same doctor. Part of the procedure would be that they would have to find some way of solving the problem. It is essential that there should be an appeal measure to this amendment to go with the first part of it.
As noble Lords will know, I am advised by the National Schizophrenia Fellowship. It is for schizophrenics that I particularly welcome this kind of amendment. At the moment there is nothing in the Bill to fill the gap. Schizophrenics, poor people, probably experience more difficulty in getting access to a GP's list than most other types of people. In a sense one can understand the doctor's point of view. GPs deal with a wide range of people and are not all that familiar with how to deal with the mentally ill. It is very difficult to know at any one time when someone who is mentally ill is actually ill or not ill. It is confusing for doctors. It is much more difficult for them than with the average run of patient.
So these people have a particular difficulty and for their sake alone we certainly need to have something along the lines of this amendment in this Bill. I too hope most desperately that my noble friend on the Front Bench will be able to offer us some encouraging remarks which are strong enough to show that some such measure will go into the Bill before it leaves Parliament.
It is absolutely essential that there should be some way of making sure that people have a doctor. I understood all the problems that the noble Lord, Lord Winstanley, raised so amusingly. It must be very difficult for doctors. But it is difficult for other people also. It is difficult for barristers and we are told that it will be difficult for solicitors because they will be treated in the same way. It is difficult for all sorts of people who have to do a difficult job. There are lots of activities in life where there is difficulty. For example, an engineer who is trying to mend the engines of a ship which is rolling at sea when he is feeling very seasick has just as much of a problem as a doctor who has to deal with a schizophrenic whom he does not like as a person let alone not liking him as a patient.
Therefore I do not think that it is a good argument to say that the doctors must somehow be allowed to leave people alone. I also think that there ought to be enough strength in this measure—I am not sure that the amendment has it—so that there is not a

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long delay. The talk about someone having to go from doctor to doctor and almost having to move house to get a doctor strikes me as ridiculous. I hope that my noble friend will be able to give all the support that is needed to put this proposal into the Bill.
Lord Kilmarnock: My Lords, I do not think that the noble Baroness will be surprised to receive from me, as chairman of the All-Party Parliamentary Group on AIDS, a brief probe as to what the position would be if the therapeutic drug bill for a particular patient on a drug such as zidovudine, for example, exceeded £5,000 a year. That is a figure which I believe has been mooted in this context.
I thank I am right in understanding that there is intended to be some kind of top-up mechanism in that sort of case. I should be grateful if the noble Baroness could describe to me what it is, how it would be made effective and how brought into effect in time to allow the treatment to continue. It is an important point. Although these drugs are very expensive when prescribed outside hospital, the hospitalisation of the person in question will be even more expensive. It is very important that we have a proper mechanism for this.
5.45 p m.
Lord Renton: My Lords, on this amendment three important principles arise including that there is an analogy with the cab rank rule. The first principle was established in the original National Health Service Act of 1946; namely, that everybody in this country should be entitled to medical care and hospital provision irrespective of means and up to a point, although public cost might in some cases be quite considerable in the provision of those services. I regard the first of the two subsections in the amendment as a practical application of that important principle.
With regard to the other two principles, the first one has been mentioned. It is that every patient shall have a free choice of doctor. That also involves freedom to refuse to have a particular doctor. That means that those who have the responsibility under the legislation of ensuring that there are general medical services provided, strictly speaking should, if those services are available, be able to provide enough to provide a free choice and a free choice of refusal. There must be a little competition there.
I come to the medical cab rank rule. That is a very ancient and well established one. I do not know whether doctors are still required to take the famous oath which, I believe, derived from the Greeks. It was an oath which said that no doctor should ever deny treatment to a patient, whether the patient could afford it or not.
To the extent that this amendment is an attempt to put into practice those three principles it deserves consideration and indeed support. If I had any doubt about the effect of the amendment, my doubt would arise on the wording of the second subsection. I must say that if it comes to what are in effect legal proceedings on appeal against refusal to admit any person to a list, it is not something that can be made
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absolute. As the noble Lord, Lord Winstanley, said, there must be certain cases when it might be difficult to apply an absolute standard.
Therefore, although in broad terms I support this amendment, I believe that the Government may wish to see whether this last subsection will be workable just as stated or whether it ought to be modified in some way.
Lord Swinfen: My Lords, I also should like to support this amendment, bearing in mind particularly the plight of physically disabled people. The House will know of my interest in that direction. I want to tell the House briefly of two situations. One was when the people for whom I work opened a home for severely physically disabled young people; the other was when, with the assistance and connivance (if that is the right word) of the National Health Service, we took very severely disabled people from long-stay wards in a local hospital into homes that we set up in order to help that particular hospital to close. In both cases it was extremely difficult to find general practitioners who were willing to take as their patients these physically disabled people.
It was not a question of money but of time, and the fact that they thought that they would be called out on home visits frequently, in particular in the middle of the night. My noble friend Lady Hooper knows of the second case about which I spoke to her informally some months ago. No doubt she will bear it in mind when considering the amendment, which has a great deal of merit.
The amendment may need to be slightly rephrased. Some noble Lords have cast doubt on the second part of the amendment. Perhaps we may consider the first line. It states:
"The Secretary of State shall by regulations prescribe a procedure".
Surely he and his advisers will have the wit and the ability to prescribe a procedure which will enable appeals to be managed in a way that is fair to both patients and doctors. It is extremely important that we make certain that everyone in this country is able to find with relative ease a general practitioner who will take him on his list.
Lord Peston: My Lords, I support the amendment which also stands in my name, for the reasons that the noble Baroness, Lady Masham, put forward so cogently on introducing it. Having listened to the noble Lords, Lord Boyd-Carpenter, Lord Mottistone and Lord Swinfen, I now feel more strongly that I was right to do so.
When putting forward the amendment I had in mind practical cases such as those that have been mentioned. I did not expect to become involved in the fundamental issues of the rights of doctors and other such matters. Those are serious matters, but I hope that noble Lords will agree that we should not be deflected from pursuing practical issues. We can become philosophers and discuss the rights of doctors endlessly but I do not believe that we ought to do so. This is a practical matter.
Having listened to the noble Lord, Lord Winstanley, I make two points. Doctors are

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professionals. True professionals do not regard work as a burden; it is what they wish to do. We must not therefore assume in this context that we are opening up a major problem of threatening vast numbers of doctors all of whom wish to spend their time playing golf. We want to give specific protection in specific cases.
In doing so, I do not believe that the rights of doctors and of patients are symmetric. I refer to patients with physical or mental handicap, and others. The consequences to them of having either no services of a doctor or of having services that are less than stable are more serious than the burdens that might be thrown on a doctor under pressure to accept patients. I do not regard their positions as being symmetric.
I can add nothing more. The key issues have been discussed. If we are lucky, the Government will accept the amendment. If we are even luckier, the Government may reformulate the amendment to improve it. Either way, I hope that we shall hear a positive response from the noble Baroness.
Baroness Hooper: My Lords, I certainly share the concern for patients which has motivated the amendment of the noble Baroness and many of the contributions that we have heard this afternoon. I recognise the anxieties that have been expressed.
Before responding to the substance of the amendment, perhaps I may say that we do not accept that the changes that we are introducing will mean that some patients are more uneconomic for their GPs. That applies equally to the new contract for GPs and to the changes that we are introducing under the Bill for indicative prescribing budgets and GP fund holding. In general practice it is recognised that some patients will need more care and attention than others. That has always been the case. Our reforms take that fully into account. For example, under the new GP contract, the capitation fee for a patient aged over 75 is two and a half times that for a patient aged under 65.
In the same way, indicative prescribing budgets and GP practice funds will be set at realistic levels to take account of the age and health patterns of the patients concerned. That would include the cost of the treatment for AIDS, about which the noble Lord, Lord Kilmarnock, specifically asked. The figure of £5,000 that he quoted refers to the cost of hospital treatment to be met from a practice fund. The district health authority will meet hospital costs above the level. There is no curtailment of the amount spent—just the amount that will come out of a practice fund.
Lord Kilmarnock: My Lords, perhaps I may interrupt the noble Baroness. I understand that. However, I am sure that she is also aware that there are therapeutic drug treatments which can be expensive. They may almost reach that figure. Will they be covered?
Baroness Hooper: My Lords, we have obviously made it less than crystal-clear that indicative prescribing budgets mean precisely what they are
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called: indicative. If there is justification for spending more on more expensive drugs or on a longer period of treatment in a particular case, that need will be met. Indeed, arrangements will exist to ensure that patients continue to receive the treatment that they need. I hope that makes it clear that a doctor will have at least no financial reason for refusing to accept a patient or for removing a patient from his list. It is generally agreed that it would be thoroughly unprofessional for any doctor to do so. I believe that there is no need for a provision in the Bill to deal with that situation.
On the detail of the amendment, Section 29 of the 1977 Act is quite emphatic, and will remain in force. Under that provision, every FPC or FHSA (as it will become) has the duty to arrange with medical practitioners to provide personal medical services for all persons who wish to take advantage of them. I can categorically assure the noble Baroness, Lady Masham, and my noble friend Lady Gardner of Parkes that the Bill removes none of the present safeguards to allow people to be placed on a list. On the contrary, we have strengthened the position. Under FPCs' enhanced management role in general medical services, they have the new task of developing services to ensure that they meet the needs of their populations. We have given them additional management resources to discharge that task. There is no question of anyone going without a doctor. I hope that that reassures my noble friend Lord Boyd-Carpenter, among others.
While I understand the intentions behind the second part of the amendment concerning appeals, we also have to reject that on practical grounds. It would be hard to prove that a patient had not been removed from a doctor's list for good reason. I suspect that doctors would quickly become skilled at finding plausible reasons for not accepting or rejecting patients if they really wished to. Moreover, it seems to me that there could be little advantage to the patient. Like the noble Lord, Lord Winstanley, I find it difficult to imagine anyone wishing to be reinstated on a doctor's list where the doctor has made it perfectly clear by his or her actions that he or she does not want that patient. As has been said, when trust has broken down there is little to be gained on either side by claim and counter-claim about the reasons for the breakdown. A better and more effective method is that which already exists and to which I have referred. The FPC must have a role. It must be alert to excessive removals and take action if it appears necessary.
As we are discussing a fundamental issue on the nature of the doctor-patient relationship I must point out that, like any other professional relationship, it has always been freely entered into by both sides and terminable by either side without notice or reason being required. That has been the case since the establishment of the National Health Service. In the past the bureaucratic obstacles in the way of changing a GP meant that the advantage was slightly on the side of the doctor. For that reason we introduced reforms last November in order to make it easier for patients to choose and change their doctors. The balance is now fairer and we should be reluctant to change it further.
6 p.m
Lord Winstanley: My Lords, the noble Baroness says that the arrangement has always been freely entered into or abandoned on either side. It is not quite so free. A doctor is not allowed to ask for a patient to be removed from his list at a time when the patient needs treatment. That is the present position and I presume that it will remain so. Therefore, the position is not as unequal as the noble Baroness suggested.
Baroness Hooper: My Lords, the noble Lord is right. I confirm that the safeguard will remain in place. I sought to explain the fact that a patient must have the permission of his GP before he could change and find another doctor. It is that aspect which has been changed.
I recognise the anxieties and understand the thinking behind the amendment. I hope that I have convinced the noble Baroness that her worst anxieties and fears are unfounded. The arrangements that are in place and the changes that are being introduced improve the position substantially; certainly, they do not worsen it.
Lord Boyd-Carpenter: My Lords, in addition to what she has said, does my noble friend not believe that if, in the statute, there were explicit provision preventing exclusion of a patient on financial grounds that might strengthen the hands of all concerned? In any event, what harm would be done?
Baroness Hooper: My Lords, it is always difficult to argue with my noble friend, as Members on the Benches opposite are well aware. However, if a provision is not necessary we prefer not to have it in legislation.
Baroness Masham of Ilton: My Lords, I thank all noble Lords who have supported the amendment. I am not sure whether it is perfect but the feeling of the House is that some kind of provision is required. I wish that the Minister could have said that she would take it away in order to put a provision in the Bill herself.
I wonder what we should do. Perhaps if the House votes on the spirit of the amendment it can be corrected at a later stage with the right of appeal improved. As regards the appeal, I wished to make doctors think again. I do not want people to appeal; indeed, for many reasons, one hopes that they will not. The provision is intended to protect a small number of people who are experiencing difficulty. If one has a handicapped child and is told by a doctor, "No, I do not have the time to take you on because I may be called out at night", one has the demoralised feeling of not being wanted. It is bad enough having to look after the child oneself for 24 hours; one needs support. For that reason people outside this House are worried.
If the amendment were agreed the Minister could do something about it. I believe that she has pressure from those in another place and that the situation is difficult for her. A Minister once said to me, "Go on pushing because it helps me to get legislation through". I must ask for the opinion of the House.
6.5 p.m.
On Question, Whether the said amendment (No. 100) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 95.

DIVISION NO. 4

CONTENTS

Addington, L.

Jenkins of Putney, L.

Alport, L.

Kagan, L.

Ardwick, L.

Kearton, L.

Aylestone, L.

Kilbracken, L.

Baldwin of Bewdley, E.

Kilmarnock, L.

Birk, B.

Kinloss, Ly.

Blackstone, B.

Kinnoull, E.

Bonham-Carter, L.

Kitchener, E.

Boston of Faversham, L.

Listowel, E.

Boyd-Carpenter, L.

Liverpool, E.

Brooks of Tremorfa, L.

Llewelyn-Davies of Hastoe, B.

Bruce of Donington, L.

Carmichael of Kelvingrove, L.

Lloyd of Kilgerran, L.

Lock wood, B.

Carnock, L.

Lovell-Davis, L.

Cledwyn of Penrhos, L.

Macaulay of Bragar, L.

Clifford of Chudleigh, L.

McFarlanc of Llandaff, B.

Craigavon, V.

McNair, L.

Darcy (de Knayth), B.

Masham of Ilton, B. [Teller.]

Davies of Penrhys, L.

Mason of Barnsley, L.

Dean of Beswick, L.

Morris of Castle Morris, L.

Diamond, L.

Morris of Kenwood, L.

Donaldson of Kingsbridge, L.

Mottistone, L.

Dormand of Easington, L.

Nelson, E.

Ennals, L.

Nicol, B.

Erroll, E.

Northfield, L.

Falkender, B.

Oram, L.

Fraser of Kilmorack, L.

Peston, L.

Gallacher, L.

Phillips, B.

Galpern, L.

Pitt of Hampstead, L.

Gladwyn, L.

Porritt, L.

Graham of Edmonton, L. [Teller.]

Prys-Davies, L.

Renton, L.

Grantchester, L.

Russell of Liverpool, L.

Gregson, L.

Seear, B.

Grey, E.

Shackleton, L.

Grimston of Westbury, L.

Swinfen, L.

Hampton, L.

Tordoff, L.

Hanworth, V.

Turner of Camden, B.

Hatch of Lusby, L.

Varley, L.

Hayter, L.

Wallace of Coslany, L.

Hollis of Heigham, B.

Walston, L.

Houghton of Sowerby, L.

Walton of Detchant, L.

Hughes, L.

White, B.

Hunter of Newington, L.

Williams of Elvel, L.

Hylton-Foster, B.

Willis, L.

Jacques, L.

Wyatt of Weeford, L.

Jay, L.

Young of Dartington, L.

Jeger, B.

NOT-CONTENTS

Aldington, L.

Cavendish of Furness, L.

Alexander of Tunis, E.

Chelmer, L.

Allenby of Megiddo, V.

Clanwilliam, E.

Allerton, L.

Colwyn, L.

Ampthill, L.

Constantine of Stanmore, L.

Balfour, E.

Crickhowell, L.

Beloff, L.

Cumberlege, B.

Belstead, L.

Davidson, V. [Teller.]

Bessborough, E.

Denham, L. [Teller.]

Blake, L.

Derwent, L.

Blatch, B.

Dilhorne, V.

Borthwick, L.

Eccles of Moulton, B.

Brabazon of Tara, L.

Eden of Winton, L.

Brigstocke, B.

Elibank, L.

Butterworth, L.

Elles, B.

Caithness, E.

Elliott of Morpeth, L.

Campbell of Croy, L.

Ferrers, E.

Carnarvon, E.

Forester, L.

203

Fraser of Carmyllie, L.

Murton of Lindisfarne, L.

Gardner of Parkes, B.

Norrie, L.

Gibson-Watt, L.

Nugent of Guildford, L.

Gisborough, L.

Orkney, E.

Gray of Contin, L.

Orr-Ewing, L.

Harmar-Nicholls, L.

Oxfuird, V.

Havers, L.

Pender, L.

Henley, L.

Pennock, L.

Hesketh, L.

Quinton, L.

Hives, L.

Reay, L.

Hood, V.

Rees, L.

Hooper, B.

Renwick, L.

Ingrow, L.

Rippon of Hexham, L.

Johnston of Rockport, L.

Saint Albans, D.

Kaberry of Adel, L.

Sanderson of Bowden, L.

Keyes, L.

Sharpies, B.

Lauderdale, E.

Skelmersdale, L.

Lindsay, E.

Strathclyde, L.

Lloyd of Hampstead, L.

Strathmore and Kinghorne, E.

Long, V.

McColl of Dulwich, L.

Thomas of Gwydir, L.

Macleod of Borve, B.

Trefgarne, L.

Margadale, L.

Ullswater, V.

Marshall of Leeds, L.

Vaux of Harrowden, L.

Merrivale, L.

Wade of Chorlton, L.

Monckton of Brenchley, V.

Wedgwood, L.

Monk Bretton, L.

Westbury, L.

Montgomery of Alamein, V.

Whitelaw, V.

Mountevans, L.

Wynford, L.

Munster, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.13 p.m.
Clause 14 [Recognition of fund-holding practices of doctors]:
Lord Ennals Lord Ennals moved Amendment No. 101:
Page 14, line 38, at end insert:
("(1A) Within eight weeks of this Act receiving Royal Assent, the Secretary of State shall publish a detailed statement setting out the criteria on which a Regional Health Authority shall grant recognition to a fund holding practice under subsection (2) below, which may include requirements on the part of any prospective fund holding practice to—

(a) demonstrate the support of its staff:

(b) demonstrate the support of any relevant community organisations; and

(c) demonstrate adequate information systems for the purposes of entering into NHS contracts.").

The noble Lord said: My Lords, when we debated the circumstances in which the Secretary of State establishes NHS trusts, I sought to make certain requirements about consultations with staff and with the local community. I did not get very far although the Government introduced an amendment requiring regional health authorities to consult, to report to the Secretary of State and to publish the results of their consultation. At the time I expressed my thanks to the Government for that concession. I hope that they will take the same view about this amendment which is in the same spirit and which seeks to do the same in relation to fund-holding budgets.
There is still a great deal of opposition concerning GP fund holding among the public and, indeed, among the medical profession. It is important that views for and against should be taken into consideration by the Government as they have said will happen in relation to NHS trusts.
The British Medical Association representing the doctors firmly opposes the concept of GPs becoming
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fund holders. A survey of public attitudes to fund holding was carried out by the NOP over the weekend 26th and 27th May among a sample poll of 634 people. Fifty nine per cent. believed that patients would receive cheaper treatment but not the best; 62 per cent. disagreed with the statement that patients would receive better treatment; 62 per cent. thought that fund holding would make it more difficult for the elderly and chronically sick to obtain treatment; and 67 per cent. felt that fund holding would result in doctors' budgets being too small to provide necessary treatment.
My view is that the Government should take seriously consultation about the establishment of GP fund holding in the same way that they say they will take seriously consultation about the establishment of NHS trusts. The amendment pursues themes of amendments previously tabled to the clauses dealing with self-governing trusts. It would oblige the Secretary of State to set out the final conditions on which budget holding status will be granted, including some demonstration of local support for the move and proof that the practice has adequate information support.
Amendment No. 102 requires the Secretary of State to publish an annual report reviewing the development of budget holding practices. The aim is to seek to create greater openness. The amendments establish a framework for accountability within which budget holders would be established and operate. A statutory statement of the criteria for granting budget holding status would enable greater consultation and allow local interests a greater say in the development of primary health care services.
A desire to allow wider consultation and enhance accountability should be entirely compatible with the Government's stated aim of putting patients first. I hope that the Government will agree that this is a very modest and reasonable amendment and that they will not, as on so many other occasions, simply reject it. I beg to move.
Baroness Hooper: My Lords, the Bill already provides for regulations to be made setting out the conditions to be fulfilled for obtaining recognition as fund holding practices. That will be supplemented as necessary by detailed guidance. Therefore, the criteria will be a matter of record and no one will be left in any doubt about the basis on which applications are considered.
On recognition, our intention is that a practice must demonstrate that all the partners wish to join the scheme, that it has the ability to manage a practice fund and that it possesses an adequate computer support system. That system will enable GPs to manage their funds by keeping track of activity and expenditure.
The hospital element of the fund will be set primarily on the basis of past usage of hospital services. Working with regional health authorities and family health services authorities, practices will need to provide details of past referral and treatment patterns in order for the budget to be set and contracts to be made with hospitals.
The amendment refers also to the support of relevant community organisations. That would

205
cover a very wide range of organisations and would effectively give a veto to groups of people who are not necessarily involved in the practice. We believe that all GPs will explain the benefits of the scheme to their patients so that the patients may judge for themselves whether the scheme is bringing real benefits to them. If the patients are unhappy they will be free to change their GP. We do not think it likely that patients will wish to do that simply because the practice wishes to participate in the scheme.
I turn to Amendment No. 102 which deals with annual reports. We discussed the question of reports in general last Thursday. I explained the mechanisms already in place to monitor and review the implementation of the new arrangements. We expect regional health authorities to monitor the workings of the new scheme in their regions. The regional reviews conducted by the National Health Service management executive will provide an opportunity for those matters to be reviewed and for any central management input which may be required. Routine annual reports will not add anything of value to that process.
I recognise that your Lordships and Members of another place will wish to keep an eye on the development of the scheme, but there are existing mechanisms for that which work well. An annual report will add paper but very little of value. I cannot remember whether the noble Lord said that I should not as usual reject the amendment. I do not reject the amendment as usual. I hope the noble Lord will withdraw it.
Lord Ennals: My Lords, for once the Minister has been very persuasive. She has convinced me to withdraw the amendment, not because I do not agree with it nor because I thought her solution was better than mine, but because I appreciate that there will be detailed guidance. The practice will be required to prove that all partners agree, which is very important. They must be able to provide the information necessary (that is also important); and there will be certain requirements on standards. I want to read again what the Minister said on that point.
The Minister is quite right in saying that we shall require to keep an eye on developments. She said that there are procedures or organisations that will monitor the position. Was she talking of community health councils with which she established that there should be consultation when it came to NHS trusts? Was she thinking in terms of some method of monitoring that already exists? Perhaps she can answer that point before I withdraw the amendment.
Baroness Hooper: My Lords, the mechanisms in relation to general monitoring indeed include the CHCs, but primarily will be the regional health authorities and, above them, the National Health Service management executive.
Lord Ennals: My Lords, in the light of that helpful explanation I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 102 not moved.]
Clause 15 [Payments to recognised fund-holding practices]:
Lord Peston Lord Peston moved Amendment No. 103:
Page 15, line 37, at end insert ("having due regard to factors such as the age composition of the practice list, proportions of chronically sick and disabled people on the practice list and the social and economic characteristics of the area.").
The noble Lord said: My Lords, in moving Amendment No. 103 I speak also to Amendment No. 104. These amendments follow earlier themes and I state immediately that they are not amendments on which it would be appropriate to divide. They are amendments designed to enable the Government to throw some light on the questions posed.
The main text of the Bill refers to payments being,
"a sum determined in such manner and by reference to such factors as the Secretary of State may direct".
One understands why governments make statements of that kind. Equally one understands—it has been debated on many occasions—why other Members of your Lordships' House require something more specific.
By this amendment one is asking a straight question: what factors will the Secretary of State consider in determining those budgets? In my amendment I set out some of the important points which should be borne in mind. They are points not unrelated to the amendment so narrowly lost by the noble Baroness, Lady Masham, and myself.
As always, we are entering the area of asking about regulations and guidance. I do not seek to persuade the Minister to accept the amendment; I seek to persuade him to tell us more of the Government's thinking. At least two kinds of people need reassurance on the matter. The people who might hold fund-holding practices need some degree of assurance. I believe fund-holding practices are already a dead duck; I do not think we need to worry any further. It is a wheeze the Government dreamt up and it will come to practically nothing except to waste a great deal of administrative time. That is a matter for the Government. I am a great believer in employment creation for bureaucrats because otherwise they are added to the unemployment statistics.
I am not overstating the position, but if we are to accept the provision we need to know how the Government propose to set the sums and I await the Minister's reply.
Lord Henley: My Lords, I am glad that the noble Lord said that these are merely probing amendments. I totally reject what he said regarding fund-holding practices, but as he will appreciate the amendment refers to the general principle of fund-holding budgets.
The noble Lord moved a similar amendment at Committee stage. I spoke to it at that time. Practice funds will be set on an individual basis—that is important—after detailed discussions with each practice interested in participating in the scheme. Obviously a wide range of factors will be taken into account by the regional health authorities. Previous hospital treatment and prescribing patterns will be

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examined. Account will be taken of such matters as the age and sex composition of a practice's list, the number of chronically sick and disabled people and other potentially high cost patients that it may have.
The Secretary of State will issue directions on the factors which need to be taken into account by the RHA when setting the fund. They can be added to or amended in the light of experience more easily than if they were contained in the Bill.
Both parties must agree. If the individual fund holder does not think that the appropriate factors have been taken into account in the appropriate manner and that due weight has been given to factors in his area which he thinks might cause his practice greater expense, he will say so. Further negotiations will then take place or he will say, "Sorry, I am not interested". From that point of view, as the noble Lord appreciates, the amendment is unnecessary. In the light of that explanation I hope the noble Lord will feel able to withdraw it.
Lord Winstanley: My Lords, before the noble Lord replies perhaps I may say something.
Lord Henley: My Lords, there has been some slippage on procedure. It is Report stage. If the noble Lord wishes to put a question so be it, but the general rule is that no one intervenes after the Minister has spoken other than the mover of the amendment. However, on this occasion, if the noble Lord wishes to ask a question, he may.
Lord Winstanley: My Lords, I thought it would be for the convenience of the House if I did not speak before the noble Lord replied. Not having done so, I accept that I must not speak now but must couch my words in an interrogative form.
I am not wholly reassured by the Minister's reply and feel that the amendment is more necessary than I had previously thought. He said that if the arrangement was not satisfactory the budget holder might say, "Right, we are finished. We are walking out". That is not the way we wish to proceed.
Lord Henley: My Lords, the noble Lord misunderstood. The budget holding practice may say that they do not wish to be a budget holding practice and therefore will go back to their original status. If they wish to have budget holding status they will only accept that position if they feel that the amount of money offered is sufficient. That is all I said.
6.30 p.m.
Lord Winstanley: My Lords, the noble Lord has said precisely what I said but in different words, which I have no doubt is within the rules of the House. However, that is not satisfactory. I ask the noble Lord a question. Let us suppose that a fund holding practice in a certain area of London happens to be burdened with a great many homeless people. The noble Lord knows as well as I do that homeless people have great difficulty getting on to a general practitioner's list. Some find it impossible. Their
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children are not immunised or treated. If a fund-holding practice in one of those areas provides special arrangements for health care for homeless people, would it then qualify for an "allotted sum", to use the words in the Bill?
Lord Henley: My Lords, a budget-holding practice, before it agrees to become one, or if it wishes to continue as one, will have to satisfy itself that the resources offered to it by the region are sufficient for what it considers are its patients' needs. Surely that must answer the noble Lord's point.
Lord Peston: My Lords, having fallen foul of the rules last week I do not propose to have an argument with the noble Lord this week. I shall, so to speak, keep my powder dry for another occasion when we know what we can or cannot say. I thank the Minister for his reply. Much of what he says makes good sense. In particular, I see the logic of what he says about the budget when it is first set up. I have some anxiety, but it is for general medical practitioners to decide what they want to do. They will find themselves more involved with accounting than medicine. But, as the noble Lord said, no one is obliged to be a fund-holding practitioner, if that is the word. We obviously differ. Not only is no one obliged but few, I believe, will want to do it. The noble Lord thinks that more will agree to become budget-holders.
I accept entirely the point that getting started will be a free negotiation. However, what I had in mind in part—I simply place it on record because the Government will have to think the matter through—is that it is a continuing process. The budget is not fixed for all time. The Minister indicates that it is the same but it is not the same, because the rules for ceasing to be a fund-holding practice are themselves extremely complicated. Therefore, there is a sense in which GPs will feel themselves locked in. Their negotiating position will not be at all the same as the position at the outset. However, that does not mean that the noble Lord, Lord Henley, is wrong. Although I do not accept that the position is the same, the fact remains that in the end there is an "out". However, what we look for is what happens in practice—another aspect of what I seek to put on the record. In a way one would like to see a few fund-holding practices purely to get some information on the experiment. But it is a pity that we need such experiments.
I thank the Minister. He has thrown some light and logic on the subject. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 104 not moved.]
Lord Ennals Lord Ennals moved Amendment No. 105:
Page 17, line 14, at end insert:
("(10) A recognised fund holding practice as defined in section 14 above shall provide the relevant Family Health Services Authority with an annual report for publication.").
The noble Lord said: My Lords, in Amendment No. 102 I sought to persuade the Government that the Secretary of State should be required to publish an annual report on the functioning of fund-holding

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practices. The noble Baroness, Lady Hooper, said that she would leave this responsibility to her right honourable friend. I hope that she will take a different view on this amendment, modest as it is, which would put a responsibility upon the fund-holding practice to provide an annual report to the relevant family health services authority.
If we are having anything like an experiment there must be some basis on which to judge how it is working. Part of that basis is a report to the FHSA. I should have thought that the FHSA would require that. The noble Baroness may reassure me by saying that such a provision will be in the guidelines, that the FHSA will expect to have an annual report and that t is all part of the system but that it will not be written into the Bill. To that extent this is a probing amendment. I beg to move.
Lord Winstanley: My Lords, I support the amendment in so far as it would appear to result in the work of a fund-holding practice, within those terms, being continuously monitored. I could not stand here and honestly say that I support an amendment that would necessarily impose a duty on fund-holding practices to spend a great deal of their resources and energy on preparing annual reports. However, I agree that an annual report should be prepared. We should know precisely what is going on in these fund-holding practices. I support the amendment as a way of ensuring that such practices are constantly and continuously monitored. However, I am not entirely sure that the practices themselves should be given the burdensome task of preparing formal annual reports.
Baroness Hooper: My Lords, I hope that I can be reassuring on this amendment. The principle behind the practice funding initiative is to use GPs' undoubted expertise and experience so that NHS money can be used in the way that fund holders judge best for their patients. The scheme provides GPs with greater flexibility in the way they provide care to their patients.
However, under another of the measures introduced by this Government to improve service to patients, all GPs will be required to produce annual reports on the activities of their practices. These will include information about the number of referrals to hospital, the number and duties of practice staff and changes to the practice premises. A report dealing with the running of the practice fund would, in large part, be a duplication. The new contract will also require all GPs to provide patients with more information about the services available in their practices. We have already discussed practice leaflets in that respect.
I stress that the activity and expenditure of fund-holding practices will be monitored by FHSAs on a monthly and annual basis and that fund-holding accounts will be subject to audit procedures. So public money will be safeguarded. FHSAs, and through them RHAs, will therefore have a great deal of information about fund-holding practices. I hope that the noble Lord will recognise that his proposal is a duplication of existing arrangements.
Lord Ennals: My Lords, I am most grateful to the Minister. I am glad that we do not at present have a Liberal-Democrat government, wildly unlikely as that is. The Minister's reply was a jolly sight better than I could have expected from the noble Lord, Lord Winstanley, who does not want such a report. I am very satisfied with the reply which shows that the amendment is not necessary. It was a probing amendment which has produced a reply for which I am grateful. I beg leave to withdaw the amendment.
Amendment, by leave, withdrawn.
Earl Baldwin of Bewdley Earl Baldwin of Bewdley moved Amendment No. 106:
Page 17, line 14, at end insert:
("( ) In making regulations under this section and in specifying goods and services to be approved under subsection (7)(b) above the Secretary of State shall secure that the members of a recognised fund-holding practice may avail themselves of such alternative and complementary therapies as they may deem appropriate.").
The noble Earl said: My Lords, this amendment seeks to give fund-holding GPs the right to make use of complementary medical practitioners for the benefit of patients within their allotted NHS budgets if they wish to do so. The amendment was withdrawn in Committee in order that its proposers might study the Government's reply. Since then we have corresponded with the noble Baroness the Minister in an attempt to clarify our respective positions.
We now bring back the amendment after much thought because we are persuaded that it offers the best way forward. Our reasons are these. We feel—I know that quite a number of your Lordships agree—that the time is now right for a degree of formal recognition of natural, or complementary, medicine. The full debate which we had on the subject on 9th May served to highlight the advances which the complementary therapies, such as chiropractic, osteopathy, acupuncture and herbalism, have made in recent years and the great interest in them which patients and doctors are now showing. Research is making their benefits ever more apparent.
I am sure that many of your Lordships will have seen in the newspapers last week the results of the MRC trial of chiropractic, which established its superiority over conventional treatment for that common affliction, back pain. I was delighted to read that there was an alternative approach which had proved its worth. But why has it taken 90 years for the public and the medical profession to become aware of its benefits? Just think how much suffering could have been saved if our health care system had been geared up to the maintenance of good health from whatever source. Let us waste no more time in welcoming into the fold those who can make a contribution to the alleviation of sickness.
It is unrealistic to expect that doctors are going to find the time and money to train in these therapies as thoroughly as they need to do to practise them safely and effectively, at least for a long time to come. We need all the current experts in the field.
Anything that makes for a wider choice in effective health care must be welcomed. I do not think that a Conservative Government would quarrel with that.

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There is no real choice at present. Chiropractic may be able to save the nation £16 million annually, but the patient still has to find well over £100 for each course of treatment. I have had a great number of complementary medical treatments and I have spent a lot of money. I have a friend who was as ill as I was, and she does not have that kind of money. As a result, I am on my feet addressing your Lordships while she is still in bed, a chronic invalid. That should not be. It is time for complementary therapies to be made available to those in society who are not so well off, just as mainstream treatments are available.
When doctors can work with acupuncturists or osteopaths in the same practice, barriers will start to come down, bridges will be strengthened and prejudices will be begin to melt away. I believe that that is one of the most urgent needs if patients are to be properly served. Much progress has been made, but life is still decidedly uncomfortable for the patient who wants to take advantage of what both orthodoxy and heterodoxy have to offer. We are talking now about one-third of the patient population, not some small minority of health cranks. If the rigour of mainstream practice can learn from the often wider view of complementary medicine, and vice versa, we can have a system which really begins to make inroads into the intractable problems of today.
In seeking to achieve these benefits we believe that the slow approach is best. This amendment is not a charter for the wholesale introduction of complementary medicine on the National Health Service. With one or two exceptions the therapies are not ready for this. Before a patient can go as of right to consult a naturopath or a herbalist, all kinds of questions of training standards, registration and so on will need to be addressed. Then, and only then, will be the time for the Secretary of State to use his powers under the 1977 Act to extend the list of treatments universally available.
That is where I believe we were at cross-purposes at Committee stage with the noble Baroness, Lady Blatch. In her reply (Official Report, 30/4/90; col. 850) I believe she assumed that that was what we were after. We are not. What will happen under our amendment is that a limited number of doctors, and only those who want to do so, will begin to introduce some of their patients to therapies which they judge will benefit them. For that we do not need to be specific in the Bill.
Clearly they will do this only where they are satisfied as to the effectiveness of the practitioner concerned. The GP will retain control. We believe that that is the right approach at this moment. A gentle introduction will allow the benefits of complementary therapies to be monitored and comparisons to be made with practices which do not use them. Passions will not be stirred. This is still a sensitive area. Probably very little will happen for quite a long time.
Of course, this widening of choice will cost nothing: it must cost nothing. If a practice cannot achieve it within its allotted budget, then it will not happen. It is as simple as that.
I have explained why I think that the Government missed the point of what we are trying to do and why the Secretary of State's powers are irrelevant in this case. We are not attempting to go so far so fast. I am advised that there is no legal objection to the way this amendment is framed and that no other change of existing law will be called for.
There remains the Government's objection to what they term a "two-tier service". I can understand that argument. If our amendment goes through, some doctors—the fund holders—will be able to provide what other doctors cannot. We differ from the noble Baroness in believing that that is not a bad thing. If the time is right to begin to extend to patients the benefits of the complementary therapies, for the reasons that I have given, here is a good place to start. Besides, what is the Bill creating here if not a two-tier service, where certain doctors will be given more scope to find treatment from a variety of providers? All we are doing is making that scope a bit wider.
Freedom of choice cannot be bad. While we would not be averse from granting this choice to all doctors and their patients, in legislative terms it is not so straightforward. We are asking for less than that. We believe it is better that some patients should have these advantages than that none should.
This modest amendment could, in a gradual and non-threatening way, become a milestone in British health care. I do not think that it should be a difficult one for the Government to accept. If the Minister feels that it can be improved in some way while not losing the essence of what we are proposing, even at this stage we would consider withdrawing it and coming back with different wording. We shall listen to what she says with care. I beg to move.
6.45 p.m.
Lord Hunter of Newington: My Lords, in the recent Cross-Bench debate which explored complementary medicine and to which the noble Lord referred, the Government made a very valuable statement. I believe it became clear that it is not possible to admit to the health service all that which is classified as complementary medicine. Each therapy must be examined. For example, I refer to the recent examination by the Medical Research Council and the success of chiropractic treatment for back conditions.
Before that there is the diagnosis. In the National Health Service that requires registered medical practitioners. However, I believe that large group practices in the future should include homoeopathic and chiropractic services as proposed in the amendment. A European draft directive about homoeopathic medicine is under discussion. It has also been under discussion in a Committee of your Lordships' House. But when does it become a matter for the Committee on the safety of medicines? Is it a medicine, is it an innocuous remedy or what? These matters remain to be resolved on a European basis. At least they are receiving attention. The amendment allows doctors in their budgets to pay for complementary medicine, having diagnosed the situation themselves. I support the amendment.
Lord Harmar-Nicholls: My Lords, I am terribly disappointed that this is not a government amendment. Right up to Committee stage one understood the various professional arguments that had been produced against this extension. After that, between Committee stage and now, I was hoping that the Government themselves would add an amendment to the Marshalled List along the lines of the amendment which the noble Earl, Lord Baldwin of Bewdley, has just been discussing. Even at this late stage I hope that the Government will do something about, it.
This amendment is merely giving what is now a clearly accepted part of our medical service a chance to grow. Nobody is forcing anything; the door is merely being opened so that if complementary medicine can justify itself, it will grow through general demand and the results that flow from it. I support this Government in 99 per cent. of the measures they try to implement. I should like them to have the credit for having overcome this barrier and allowed the amendment.
I doubt whether there is anyone in your Lordships' House whose family has not found the absolute benefit that flows from complementary medicine in one Form or another. I know that my family has benefited, as have my neighbours and everyone else I know.
One understands that the people who have been trained to practise medicine in the form that we have experienced until now believe that their methods have been a great success. The real test of the success of the procedures which have continued until now is the fact that people are living longer. They are also active longer than they used to be. But if the Government accept something like this amendment, there is a chance of not only allowing people to live longer but living longer freed from pain, which is unnecessary in the light of experience. So I urge my noble friend—I do not know what power she has at this stage to give some sort of indication; and perhaps she does not have a written power—to realise that this is the day to put the telescope to the blind eye and make a move. That would help my noble friend as well as her department.
More than that, the Government would be making a commonsense next move in medicine, as in practical experience we have found that this can work. It ought not to be delayed and I should hate to think that it was a government of my party who were not giving this help forward when the case is now so clearly made out.
Lord Colwyn: My Lords, perhaps I may also support this amendment and say how pleased and encouraged I am to hear the support that we are getting this evening from all sides of the House. As the noble Earl, Lord Baldwin, has said, we are moving the amendment again in the hope that the Government will have had time to reflect upon the arguments and to agree to this very small change in the Bill which would be welcomed by all practitioners of the complementary or natural therapies.
All we are suggesting is that fund-holding practices may be able to use,
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"such alternative and complementary therapies as they deem appropriate".
This very minor change that we are seeking surely fits in with the Government's intentions for this Bill. The Health Reform Group, which I know has some influence, says in my briefing:
"the group believes that NHS trusts"—
and here I assume that it is talking for fund-holding practices as well—
"will provide an open and challenging environment in which staff of all disciplines will be able to develop their abilities to the full. Since resources will be earned on merit, trusts will strive for excellence and efficiency. They will have more opportunities to be innovative and flexible".
It goes on:
"through the sensitive use of their new financial freedoms, trusts will also be able to provide a greater choice for patients".
It is a fact that the natural therapies are becoming more popular and that many may eventually become available within the NHS. The innovations of this Bill must surely allow fund-holding practitioners to buy in whichever form of treatment they feel is best suited to their patients. The amendment does not say that fund holders must use complementary therapies; it says that they may consider the use of complementary therapies.
As the noble Earl, Lord Baldwin, said, many of your Lordships will have read of the Medical Research Council's findings that chiropractic was a better treatment for low back pain and disability than treatment by conventional methods in hospital. It recommended that the treatment should become available within the NHS, and said that the overall saving might be in the region of £13 million in lost output and £3 million in social security payments.
In previous debates I have mentioned many examples of the advantages of complementary therapies. Perhaps the most important is the treatment of back pain. Another is the treatment of generalised stress which is highly effective without the use of any synthesised drugs, particularly the benzo-diazepines, some of which cause more harm and more addiction than the so-called hard drugs. Upper respiratory tract infections, most skin disorders such as psoriasis and eczema, allergies and arthritic conditions are all effectively treated by the complementary therapies. I have personally referred many children to osteopaths or cranial osteopaths for the treatment of otitis media or glue ear, rather than subject them to the surgical placement of grommets under a general anaesthetic. The list is endless. This Bill is an important step forward in health care and this minor change to include the therapies should be very carefully considered.
Baroness Seear: My Lords, very briefly, we should like to give support to this amendment. It is permissive; it is not compulsory, and it opens up new opportunities. We very much hope that the Government will support it.
Lord Young of Dartington: My Lords, I should like to join in the happy consensus and express the hope that the proverbial blind telescope may for once be used. The fact is that there are general practitioners and general practices which are following exactly the

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lines which are being proposed here, and they are able to provide an excellent service with the GP responsible for the diagnosis, which the noble Lord, Lord Hunter, was talking about a moment ago, and which is so often the essential point, but then where appropriate referring patients to a chiropractor, an osteopath or a counsellor, including in some cases a spiritual counsellor who can be of great service to some people.
What one would be doing, if only the telescope can be used, is giving encouragement to the general practitioners and alternative practitioners who are already proceeding in this way, and also encouraging others to do the same. It would be helping to bring within the bounds of respectability what until recently was not within those bounds, so that as a signal it could be quite important. I am very much for the amendment.
Lord Ennals: My Lords, my name is one of those giving support to this amendment and I want to support it very strongly. I want first to congratulate the noble Earl, Lord Baldwin of Bewdley, on the way in which he moved it, because he brought together all the arguments. He very kindly sent me a copy of the letter that he sent on 8th June to the noble Baroness, Lady Hooper, the Minister. I thought the letter was very succinct in its presentation of the case. That was the first point that made me glad about this debate.
The second was the reaction of the noble Lord, Lord Hunter of Newington, because, when we had a very much broader debate on 9th May, he was cautionary in his normal cautionary way. But he recognises that this is the way forward. It is a first step and it is most important that the amendment should be accepted.
As each month goes by there is growing conviction among the public that very often complementary natural therapies are preferable to the traditional methods of treatment. I was fascinated when I was last in China to realise that all Chinese doctors are trained in both Western methods of medicine and traditional methods. Some of them opt for two-thirds traditional and one-third contemporary, while some are the other way round. I also was very impressed by the report in the British Medical Journal about chiropractic, which showed that after two years the chiropractic patients had improved by 7 per cent. more than those treated in hospital, and after three years their benefit was nearly 10 per cent. greater. The study found that the chiropractic group received almost 44 per cent. more treatment than NHS patients, and so on. It was a very encouraging report.
Since 9th May, when we had the debate in the House, I have also had an opportunity of spending some time at the Marylebone health centre led by Dr. Pietroni, which is perhaps the only group practice that includes complementary therapies among those who provide service from that health centre. They will shortly be publishing the results, in terms of their ordinary patients, of those who are benefiting from complementary therapies in a very limited way. It is not every complementary therapy that is to be found there, and we would be very
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unwise if we embarked at this stage, without trial or test, on a whole range of therapies that are not yet proven. They may have great advantages, but they are yet to be proven, and we are on the first step of a very important development indeed.
I very much hope that the Minister will feel that the breadth of support from this House for this modest amendment enables her to go forward and agree that this amendment should be carried. I agree with the noble Lord, Lord Harmar-Nicholls. Although we are old boys of the same school, there are not many things upon which we agree except that we like each other in an old-boyish sort of way. In terms of judgment there is hardly anything on which we agree. I think he would recognise that that is so. But if the noble Lord has come round to it, then the case must be proven.
7 p.m.
The Earl of Clanwilliam: My Lords, I thank noble Lords for raising this point. Those who put their names to the amendment have spoken most eloquently. I think that perhaps your Lordships would have expected me to put my oar in on the subject of medical herbalism. I should like to take up the point made by the noble Lord, Lord Hunter, who said that it is important that the training programmes of the practitioners of these therapies should be thoroughly reviewed. Indeed, great efforts are being made in that direction.
I speak of course in respect of herbal practitioners in particular. A recent review has shown that they are increasing their patient numbers at the present moment at the rate of 75,000 patients per annum. That is a large number. It is not only a question as to whether they are being treated with a medicine or a therapy, the point surely must be that these people are voting with their pockets. They are paying for these therapies out of their own pockets without help from anyone else. Presumably they must therefore be assumed to be doing them good. The therapies were clearly defined in the Supply of Herbal Remedies Order 1977, No. 2130, which clearly states which herbs can be used in what doses, as well as what remedies should be prohibited. The order bears the signature of the noble Lord, Lord Ennals, to whom I am sure all practitioners in the field of herbal medicine will be grateful.
There are some 300 registered members of the National Institute who are seeing a swelling number of patients—if that is the right word—using these remedies, and no ill effects or suggestions of ill health have been pointed at them—despite previous suggestions earlier in this House—in the intervening 13 years since 1977, let alone the last 126 years since the National Institute of Medical Herbalists was formed. It is surely time, as has been clearly stated by other noble Lords, that this amendment should be passed, and I beg leave to support it.
Baroness Hooper: My Lords, as has been said, we have discussed this subject before. Then, as now, I listened with great interest and considerable sympathy. However, it is not so simple a matter as the noble Earl, and indeed others, have suggested. Indeed his step-by-step approach in itself creates

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difficulties. He acknowledged as one of them the creation of the two-tier system. It is not our intention to allow fund-holding GPs access to treatments for their patients which are not available to the patients of non-fund holding GPs. While the noble Earl finds nothing to quarrel with in that, I should expect to be criticised if we did so.
Nevertheless, if my right honourable friend the Secretary of State, under the powers given to him in Section 3 of the National Health Service Act 1977, should decide to have specified complementary therapies provided under the National Health Service, then the matter can of course be reconsidered. This may prove necesary as a result of the European Community directive to which the noble Lord, Lord Hunter, referred. I would remind your Lordships that homoeopathy treatment is already provided under the National Health Service, so it would be possible for other alternative and complementary therapies also to be included, but they would have to be specified by the Secretary of State under this Section 3 power.
The other issue of difficulty is that of clinical responsibility. I should make clear that at present any GP is entitled to provide natural therapies for his patients either himself or through a member of his practice staff. Under the new doctors' contract it will be open to FHSAs to contribute to the costs of such a member of staff. In this case the GP himself remains clinically responsible for his patients' treatment.
We believe that this flexibility may well be used by more GPs in the future as the range of services provided by GP practices develops and so long as the GPs have confidence in the value of such treatments for their patients. In the light of the contributions that have been made in the debate today, it should not be too long before that in fact happens. We shall certainly keep these development under review from our point of view, but I regret that I am not able to accept the noble Earl's amendment.
Earl Baldwin of Bewdley: My Lords, I am most grateful for the support that I have had from all sides of the House. I could not have asked for more, nor indeed have expected more than I have had unanimously from all except the noble Baroness. Obviously I had been hoping for some accommodation from her on this matter. Sadly, it has not come. We have simply had a repeat of the arguments advanced last time with the issue of clinical responsibility thrown in, which would not be a problem under the wording of our amendment. Believing as I do that this is an important issue, as I believe do your Lordships, there is nothing left but to test the opinion of the House.
7.6 p.m.
On Question, Whether the said amendment (No. 106) shall be agreed to?
Their Lordships divided: Contents, 74; Not-Contents, 77.

DIVISION NO. 5

CONTENTS

Addington, L.

Blackstone, B.

Airedale, L.

Boston of Faversham, L.

Baldwin of Bewdley, E [Teller]

Bruce of Donington, L.

Carmichael of Kelvingrove, L.

218

Carnock, L.

Kilmarnock, L.

Clanwilliam, E.

Kinloss, Ly.

Cledwyn of Penrhos, L.

Kitchener, E.

Cobbold, L.

Listowel, E.

Cocks of Hartcliffe, L.

Lloyd of Kilgerran, L.

Colwyn, L.

Lockwood, B.

Cullen of Ashbourne, L.

McFarlanc of Llandaff, B.

Darcy (de Knayth), B.

McNair, L.

Dean of Beswick, L.

Masham of Ilton, B.

Diamond, L.

Mason of Barnsley, L.

Dormand of Easington, L.

Monkswell, L.

Ennals, L.

Monson, L.

Erroll, E.

Morris of Castle Morris, L.

Ezra, L.

Morris of Kenwood, L.

Gallacher, L.

Nicol, B.

Galpern, L.

Northfield, L.

Gladwyn, L.

Oram, L.

Graham of Edmonton, L. [Teller.]

Peston, L.

Pitt of Hampstead, L.

Greenway, L.

Prys-Davies, L.

Grey, E.

Rea, L.

Hampton, L.

Richard, L.

Harmar-Nicholls, L.

Roskill, L.

Harris of Greenwich, L.

Russell of Liverpool, L.

Hayter, L.

Seear, B.

Hollis of Heigham, B.

Seebohm, L.

Houghton of Sowerby, L.

Shackleton, L.

Hughes, L.

Sherfield, L.

Hunter of Newington, L.

Tordoff, L.

Hylton-Foster, B.

Turner of Camden, B.

Jay, L.

Varley, L.

Jeger, B.

White, B.

Jenkins of Putney, L.

Williams of Elvel, L.

Kearton, L.

Young of Darlington, L.

NOT-CONTENTS

Aldington, L.

Liverpool, E.

Allerton, L.

Long, V. [Teller.]

Balfour, E.

McColl of Dulwich, L.

Beaverbrook, L.

Mackintosh of Halifax, V.

Beloff, L.

Macleod of Borve, B.

Belstead, L.

Margadale, L.

Bessborough, E.

Marshall of Leeds, L.

Blake, L.

Merrivale, L.

Blatch, B.

Mersey, V.

Borthwick, L.

Monk Bretton, L.

Boyd-Carpenter, L.

Montgomery of Alamein, V.

Brabazon of Tara, L.

Mottistone, L.

Brookeborough, V.

Mountevans, L.

Butterworth, L.

Munster, E.

Caithness, E.

Murton of Lindisfarne, L.

Campbell of Croy, L.

Nelson, E.

Cavendish of Furness, L.

Nugent of Guildford, L.

Cumberlege, B.

Orkney, E.

Denham, L. [Teller]

Pender, L.

Eccles of Moulton, B.

Rankeillour, L.

Eden of Winton, L.

Reay, L.

Elibank, L.

Renton, L.

Elliott of Morpeth, L.

Saint Albans, D.

Ferrers, E.

Sanderson of Bowden, L.

Gardner of Parkes, B.

Sharples, B.

Gisborough, L.

Skelmersdale, L.

Grantchester, L.

Strathclyde, L.

Grimston of Westbury, L.

Strathmore and Kinghorne, E.

Henley, L.

Hesketh, L.

Swinton, E.

Hives, L.

Teviot, L.

Hooper, B.

Thomas of Gwydir, L.

Ingrow, L.

Trefgarne, L.

Johnston of Rockport, L.

Ullswater, V.

Kaberry of Adel, L.

Vaux of Harrowden, L.

Keyes, L.

Whitelaw, V.

Lauderdale, E.

Wise, L.

Lindsay, E.

Wynford, L.

Lindsey and Abingdon, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.15 p.m.
Clause 16 [Renunciation and removal of recognition as a fund-holding practice and withholding of funds]:
[Amendments Nos. 107 to 112 not moved.]
Clause 18 [Indicative budgets for doctors' practices]:
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 113:
Page 18, line 42, leave out ("by way of a budget").
The noble Lord said: My Lords, my noble friend Lord Butterfield has unfortunately been taken ill and has asked me to move the amendment on his behalf. With the leave of the House I shall speak also to Amendments Nos. 114 to 117. The amendments make simple changes to the clause and I trust that they will be accepted by the Government. I beg to move.
Baroness Hooper: My Lords, we accept that the term "indicative budget" has been misunderstood and misrepresented, despite our best efforts to assure doctors and patients that the word "budget" does not represent a limit on funds. We are happy therefore to accept the amendments. We shall put forward a necessary but slight consequential drafting change on Third Reading. If the House agrees with the proposition put forward by the noble Lord, Lord Walton, on behalf of the noble Lord, Lord Butterfield, my noble friend Lord Sanderson, will bring forward parallel Scottish amendments also on Third Reading. I am happy to accept the amendments.
Baroness Seear: My Lords, why did the Government use the word "budget" in the first place? It has a clearly understood meaning. Do the Government not understand what it means?
Baroness Hooper: My Lords, I can only say that that was before my time.
On Question, amendment agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendments Nos. 114 to 117:
Page 18, line 43, leave out ("indicative budget") and insert ("indicative amount").
Page 19, line 13, leave out ("indicative budget") and insert ("indicative amount").
Page 19, line 16, leave out ("indicative budget") and insert ("indicative amount").
Page 19, line 18, leave out ("as that budget").
On Question, amendments agreed to.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 118:
Page 19, line 21, after ("section") insert ("and section 97 of the principal Act.").
The noble Lord said: My Lords, with the leave of the House I shall speak also to Amendment No. 119. These amendments were tabled in Committee but due to a misunderstanding were not at that time debated. They relate to indicative drug budgets in general practice. I have retabled the amendments
220
because, despite the clear assurances that your Lordships received in Committee from the Minister, there is still some concern that the present proposals in the Bill will exert a subtle but unrelenting downward pressure on the sums available for drug budgeting in general practice.
We were much reassured in Committee to hear the Minister say that there would be no cash limits upon the sums available to general practitioners for prescribing purposes. We were also much reassured to be told that reserve funds would be available in the event that a practice happened to have a series of patients on its list who had special needs which required highly expensive medicines which would distort its prescribing costs in relation to other practices.
There is clear evidence that throughout the United Kingdom there is at present a substantial variation in prescribing costs. Some practices may have costs which are too high and some may have costs which are too low. In many cases those variations are not dependent upon the prescribing habits of the doctors concerned but are dependent upon the variation in their patient populations.
It is a matter of concern to many able and dedicated doctors that unless the amendment is placed on the face of the Bill—not this Government—a subsequent government may impose cash limits to the detriment of patient care. That is why the amendments have been tabled. Your Lordships are fully aware that some immensely costly drugs are continually being introduced into treatments. One recent example has been the development of a drug called erythropoetin for the treatment of anaemia in patients with chronic renal failure. It is an exceptionally expensive drug and yet its benefits to patients are enormous. The problem we all face is that if that drug were to be widely prescribed in hospitals or general practice it could substantially distort prescribing costs and might well cause certain general practitioners with many patients on their lists suffering from that condition to have a prescribing level far higher than the indicative drug budget originally assigned to that practice.
It is interesting to note that pharmaceuticals, as a percentage of the total NHS bill, have remained almost constant over the course of the past few years: 10.2 per cent. in 1984; 10.2 per cent. in 1985; 10.1 per cent. in 1986; 10.3 per cent. in 1987 and 10.4 per cent. in 1988, the most recent year for which figures are available.
If we compare pharmaceutical costs per capita in this country with those in other countries we see that in France in 1988 the total cost was £89; in West Germany, £87: in Italy £76; in Sweden £64 and in the UK £44. From this we can assume that UK doctors are conservative in their prescribing habits. They accepted—admittedly with some reluctance—the limited list of drugs which they could prescribe in general practice. They have functioned effectively within that constraint which is now generally accepted by the profession.
The pharmaceutical industry of this country is one of the jewels in our industrial crown. The 1986

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Touche Ross report showed it to be one of our greatest and most effective earners of overseas income.
The problem is that if drug budgets in general practice were to be imposed too rigidly, this would take no account of the morbidity, the age structure and the demography of practices; of screening programmes; and of local hospital policies on prescribing. The new family health services authorities will not receive their global drug amounts until 1991. They will have little time to discuss them with individual practices.
Our special concern is the needs of a generally ageing population. The evidence is that the elderly—and by that I mean those over 65—consume about 42 per cent. of all medicines prescribed in the NHS. However, they represent only 15 per cent. of the population. Between 1977 and 1988 prescriptions in the NHS grew by 51 million, but 96 per cent. of that growth was accounted for by patients over the age of 65.
We are concerned that without the amendment there will be a subtle, continuing downward pressure on drug costs in the National Health Service. We were grateful for the assurances given by the Minister in Committee: nevertheless, we feel that it would be more appropriate to have the two amendments on the face of the Bill. I beg to move.
Lord Peston: My Lords, I recommend the amendment in the names of the noble Lords, Lord Walton of Detchant, Lord Hunter of Newington and myself. I hope very much that we are pushing at an open door. Given that the Government have accepted the amendment of the noble Lord, Lord Butterfield, we must now refer to "indicative amounts" and not "indicative budgets". That presents me with a great problem. I had become accustomed to "indicative budgets"; I shall now have to try to get into the habit of using "indicative amounts".
I do not believe that the amendment can be interpreted as criticising the Government. As the noble Lord, Lord Walton, pointed out, it seems that the problem of drugs is taken very seriously and that National Health Service expenditure on drugs has been kept under control. Many of the moves and pressures the Government have tried to introduce have been effective. Perhaps I may underline the point that the noble Lord, Lord Walton, made. By any international comparison we are not excessive spenders on drugs. That does not mean that we should not always scrutinise what we are doing. When we are discussing scarce resources it is agreed that we should scrutinise all forms of expenditure.
I said that I hoped that we were pushing at an open door. The reason is that the Secretary of State himself has given reassurances on the matter. The noble Baroness has intervened and spoken cogently on the subject. I believe that in terms of how we should like to see general practitioners work there is nothing between us. We want rational prescribing with general practitioners taking due account of the fact that drugs use up scarce resources. On the other hand, we are dealing with professional people who
222
must exercise their professional judgment to prescribe the drugs they think their patients ought to have.
The only issue is our old friend: what goes on the face of the Bill. I plead with the noble Baroness to put this provision on the face of the Bill for two reasons. One reason, as the noble Lord, Lord Walton, said, is that another Secretary of State could use the Bill in quite a different way. I should not want that to happen. In many ways it is impertinent that I should give advice to the Government, but they could do with one or two friends in the medical world and the medical profession.
The other reason is that I can think of few actions more appropriate than accepting the amendment to reassure the medics that the Government's intentions are what they say they are. I do not remotely believe that the amendment has any political quality; it is just a matter of judgment as to whether or not it ought to be on the face of the Bill. My view, like that of my two noble friends who put down the amendment, and, I should have thought, of most noble Lords, is that this is a clear cut case where, whatever one thinks of other aspects of the Bill, it would be greatly improved is the amendment were accepted.
Lord Hunter of Newington: My Lords, I strongly support what has been said and wish to make two points. First, can the Minister say how the Government see the role of the prescribing medical adviser to the family practitioner committee? This is a key person. We need an agreed normal procedure, agreed clear rules about the exceptions, but freedom in any place to prescribe in a certain situation. Any examination is to be carried out, if I understand it correctly, by the doctor's peers on behalf of the authority.
Lord Young of Darlington: My Lords, I agree very much with what has been said cogently by the noble Lords, Lord Hunter, Lord Peston and Lord Walton in particular. The indicative drug budgets are still a cause of concern. The matter has not been completely dismissed from the minds of GPs and others, despite what happened earlier this year. The fear is bound to exist that so long as there is downward pressure on costs—we have heard so much about it and know that it will come in greater measure in the future—there could be pressure at some point to bring in by the back door the cash limits which are so abhorred at any rate at the moment.
Whatever happens with the pressure on costs, it surely should not affect the medicines which GPs can prescribe for their patients. The Secretary of State gave way or appeared to give way—there is a good deal of doubt about what happened earlier this year in discussions with the BMA—on cash limits. It looked as though he and the Government would put cash limits behind them and not bring them up again at any rate for some considerable time.
In view of what has happened, I believe it most desirable that the matter should be made completely clear, as it would be if the amendment were accepted. It should be made completely clear that cash limits are out of bounds, and that there is no question of

223
their being introduced at any rate during the period of office of this Government. That would be reassuring to general practitioners and also to their colleagues in hospitals. Perhaps, above all, it would be reassuring to consumers.
I am sure in my own mind that this clause would have the full support of the Consumers' Association, of which I have the honour to be president. I am glad to say that the Consumers' Association has taken an increasing interest in health matters in response to the express concerns of its members, who have been canvassed. The association has about 1 million members so it is a force to be reckoned with. I am sure that if the 1 million members were here—that is a terrible thought—they would be very much in support of the amendment which was so ably proposed by the noble Lord, Lord Walton.
The Consumers' Association has many elderly members. They are the people who are especially concerned about this matter and who would be especially reassured by the acceptance of the amendment partly because their GPs would know about it—not many ordinary consumers would know about the clause—and they would be able to reassure their patients that they were not skimping in any way and that they were not under any pressure to skimp on health and clinical considerations, which should be uppermost in their concerns. I greatly support the amendment and hope that the Government will be able to support it also.
7.30 p.m.
Baroness Gardner of Parkes: My Lords, I am sorry to have to disagree with those who have ably supported the amendment. The noble Lord, Lord Peston, said the amendment is not at all political. I agree with him on that, but I think the matter is one of common sense. All of us would like to have an open cheque and I believe that is what is being asked for. The noble Lord, Lord Walton, explained that if a particular drug was given to a patient it could use up the entire budget of a GP. That seems to me to contradict the argument that GPs should have open-ended budgets so they can spend the vast amount of money that is required for that particular drug.
Within the health service as a whole there must always be a balance between what is spent on the general practitioner service, what is spent on the pharmaceutical service and what is spent on surgical procedures. Recently I visited Cuba, which prides itself on having a fantastically high medical standard which is out of all proportion to the standard of everything else in the country. However, Cuba is now desperately worried because it has discovered that the provision of medicine is unlimited and unending. The budget for medicine is eating up a great amount of money, but the Cubans do not know what to do about that because people's expectations have been raised to the point where they want to receive unlimited treatment, unlimited drugs and unlimited everything else. We must be realistic about this.
I recall clearly the time when a limited prescribing list was introduced for doctors. There had always
224
been such a list for dentists but when it was introduced for general practitioners there was a terrible fuss. We were told that their practices would be damaged and they would not be able to care properly for patients. However, I do not think the list made any difference at all. I believe patients are still being treated perfectly adequately with the list of drugs that is available.
It has been mentioned many times in your Lordships' House that quantities of medicines are thrown away. When people are asked to hand over unused medicines thousands of pounds' worth of unused medicines roll in. I am now at a stage when I can tick my National Health Service prescription and obtain it for nothing. If someone offers me medicines for nothing I can happily go and get them whether I use them or not. The Government must retain powers to look at drug budgets. To ask for such an open-ended measure as this is too drastic. For that reason I cannot support the amendments.
Lord Young of Dartington: My Lords, is the noble Baroness in favour of cash limits despite what the Secretary of State has said?
Baroness Gardner of Parkes: My Lords, with the leave of the House, I shall reply to that point. I believe that all of us would like to have no cash limits on anything. However, whether it is a case of my housekeeping budget or the national economy, that is not the way the world operates. Sooner or later we all have to think of how we spend our money. I am no economist. I do not talk about cash limits but of what can be afforded.
Lord McColl of Dulwich: My Lords, I wish to rise to defend the patient. Half the drugs that are prescribed are not taken. We know that many patients have been put on large doses of Valium for long periods of time. That has certainly reduced the quality of their lives. That is a fact. Downward pressure on the drug bill is therapeutic. We have to protect patients from over-prescribing.
I have to declare an interest here as I am a surgeon. I have a fundamental suspicion about massive quantities of drugs that are prescribed to patients. My consultant physician friends tell me that they do an enormous amount of good simply by taking patients off the 10, 12 or 14 drugs that they are on. Patients tend to be given too many drugs. I believe that a downward pressure on the drugs bill can be therapeutic. I believe we should reject these amendments.
Baroness Hooper: My Lords, this is an important subject. It has been useful to hear the contributions from my noble friends and indeed from others who have emphasised the need for account to be taken of the amount of spending on drugs. In that sense I recognise that we have the agreement of the House that the proposal of the Government is acceptable. It is important that in prescribing drugs GPs should be conscious of the facts of life that were so aptly described by my noble friend Lady Gardner. We simply wish to ensure that GPs think about the prescribing process. However, if need is established for further drugs in any particular case, moneys will

225
be available to supplement whatever amount has originally been indicated. We discussed this point earlier in relation to a comment made by the noble Lord, Lord Kilmarnock.
The Government have been at pains to make it quite clear that the indicative prescribing scheme will not represent cash limits on drugs expenditure at any level. That is another reason why we were happy to accept the previous amendment as we recognised that the use of the word "budget" was rather misleading. We are realistic enough to expect the drugs bill to go on rising to meet the needs of an increasingly elderly population and of medical advance and the availability of new drugs.
Indicative prescribing amounts exist, as I have said, as indicative amounts. They are just one of the management tools that will be used by GPs, family health services authorities and regional health authorities in furtherance of the Government's objective of improving the overall quality and cost-effectiveness of prescribing in general practice, thereby improving patient care.
As I have said, these assurances have repeatedly been given by the Government and I know that they have been accepted in that context. Your Lordships may also wish to note that on 23rd May we published a detailed paper explaining how the indicative prescribing scheme will operate and putting it into the wider context of the Government's overall approach to prescribing. The working paper reflects the outcome of extensive discussions that have taken place since the publication of Working Paper 4. Both Ministers and the NHS Management Executive officials have been involved in discussions with interested parties, including the BMA, the GMSC, the joint Department of Health/NHS liaison groups set up by the NHS Management Executive and regional general managers, with a cross section of NHS membership, the Royal Pharmaceutical Society of Great Britain, the Association of the British Pharmaceutical Industry, several individual pharmaceutical companies and FPC general managers. Many Members of Parliament, voluntary organisations, community health councils and members of the public have written to Ministers and the management executive with their views. The discussions and correspondence have enabled the details of the operation of the scheme to be developed and the Government's plans are contained in the working paper. I am sure that your Lordships will find it a sensible, useful and informative document which will finally lay to rest the misunderstandings which have been held by some.
The noble Lord, Lord Hunter, raised a question about the role of the medical adviser. Within the FHSA it will be the medical adviser who will promote the indicative amount and discuss the reasons for any variation with individual GPs.
Having given those assurances, the Government see no reason to move from the present legislative position, which was approved by this House during the passage of the Health and Medicines Act 1988. More importantly, while the Government have no plans to cash limit the vast majority of expenditure on drugs, medicines and listed applicances, to enable
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the implementation of the GP funding scheme it will be necessary to include that portion of drugs expenditure which flows through GP practice funds within regions' overall cash limits.
I was particularly grateful for the intervention of my noble friend Lady Gardner in emphasising that at the end of the day there will be some limit. I reiterate that in practical terms the GP practice funds will not be individually cash limited. But a cash limit will obviously apply at national or regional level.
Lord Peston: My Lords, I hope that the House will forgive me if I interrupt the noble Baroness, but it is very important that we do not debate at cross-purposes. Does she accept that the amendment was put down as a result of the reassurance that her right honourable friend the Secretary of State gave? Her noble friends may have made good points but they have nothing to do with the amendment. We live in a finite world and there are finite resources. The purpose of the amendment is simply to put down what her right honourable friend the Secretary of State said. Does she agree that the remarks of her two noble friends are totally beside the point?
Baroness Hooper: My Lords, I would not say that they were totally beside the point. We are discussing what seems in the eyes of some people to be unlimited amounts of money. I am very happy to have the reassurance of the noble Lord, Lord Peston, that it is appreciated that there are ultimate cash limits. I thought it worth mentioning that in the context of these discussions. In saying that, I hope that the assurances that I have been able to repeat will be felt to be adequate and satisfactory.
Lord Walton of Detchant: My Lords, no responsible doctor could ever believe that the sky is the limit so far as concerns prescribing. We must recognise that there must be constraints upon all forms of expenditure within a national health service. That includes expenditure on drugs and particularly on very new and extremely expensive drugs which inevitably must be rationed to some extent on the basis of some assessment of priority, as happens with all new and expensive developments in medical care whether surgical, medical or otherwise. I believe that that is a principle that the medical profession in general accepts.
Our purpose in tabling the amendment, as the noble Lord, Lord Peston, has said, was simply to try to encapsulate on the face of the Bill the assurance that we were given by the Secretary of State to the effect that indicative drug amounts—as they are now to be called—were exactly what was meant by that term. They are indicative, and so far as concerns individual practices they will not be the end of the day. I believe that we have received the assurance that we sought; namely, that in the light of the patients in their practice GPs will not necessarily be restricted to a specific sum in any one year and if in the view of the family health services committee the nature of their patient population justifies a greater amount than is suggested in the indicative sum they will be able to call upon those additional funds. I believe that we have that reassurance.

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The working paper to which the noble Baroness referred—Improving Prescribing—which has recently been published lays down a number of very important issues relating to the work of the family health service committee in relation to prescribing and a very satisfactory professional review machinery which will be able to take action to limit the prescribing of those doctors who appear to be exceeding reasonable limits. It has been generally welcomed by the profession.
In the light of the assurances that we have heard tonight, although I should have much preferred to see the amendment on the face of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 119 not moved.]
Baroness Blatch Baroness Blatch: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage should begin again at 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Access to Health Records Bill
Brought from the Commons; read a first time, and to be printed.

Government Trading Bill
7.47 p.m.
The Earl of Caithness The Earl of Caithness: 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.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clause 1 [New provisions in connection with government trading funds]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 1:
Page 2, line 23, at end insert:
("(5A) An order establishing a trading fund for operations carried on by a person appointed in pursuance of any enactment may provide—

(a) for the fund to be under the control and management of that person instead of the responsible Minister and, accordingly,

(b) for this Act to have effect as if—

(i) the reference to the responsible Minister in section 3(1) of this Act and the first reference to him in section 4(1), and

(ii) such other references in this Act to the responsible Minister as may be specified in the order, where they are references to him in the exercise of his function of controlling or managing the fund,

were references to that person.").,
The noble Earl said: This technical amendment is designed to enable a trading fund to be established where the operations of the proposed fund are
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carried on by a statutory office holder. Under the Bill as currently drafted and the 1973 Act, which it amends, it is implicit that the responsible Minister will be carrying on the funded operations and accordingly all the powers and responsibilities in relation to the management of the fund are his. However, there is a difficulty if operations carried on by statutory office holders are to be funded.
Of the agencies and agency candidates listed in Annex A to Cmnd. 914 there are two cases, the Land Registry and the Department of the Registers for Scotland, where the carrying on of the activity authorised by statute is placed squarely on the shoulders of the office holder who heads the department. Financial management of the activities is for him and he oversees income and expenditure in connection with the discharge of his statutory functions. A trading fund for such activities would not be under the control and management of the responsible Minister.
The amendment deals with that difficulty by providing that, where operations which are to be funded are carried out by a statutory office holder—a person appointed in pursuance of any enactment—an order establishing the fund may provide for it to be under the control and management of the office holder and the Act is to have effect as if relevant references to the responsibility are to him. I beg to move.
Lord Bruce of Donington: We are grateful to the noble Earl for having explained this technical amendment. On behalf of the Opposition, I should like to extend our thanks to him for the co-operation which we have received since Second Reading from him and his department in elucidating the more abstruse parts of the Bill, which, as he well knows, is in part very technical.
There is one further technical query that I should like to clear up. Under the provisions of the interpretation of legislation Act of 1978, the term "person" includes a corporate body. I should like to be certain that there is no possibility of any corporate body being appointed by statute to run a particular aspect of the agency involved. It is necessary to do that because otherwise one is not clear about the matter.
The amendment refers in other parts of the Bill to the responsible Minister and the transfer or reallocation of his functions. I should like to be reassured that the other functions of the Minister in relation to the agency are not disturbed by that in any way and that we are talking about day-to-day management. I should also like to be reassured that the ultimate responsibility, in terms of responsibility to Parliament and scrutiny and examination by the National Audit Office, remains intact in all cases and that therefore, aside from the operation of the fund in the way described in the amendment, the final responsibility for accountability to Parliament will remain with the Minister of the Crown.
The Earl of Caithness: On the noble Lord's second point, I am sure that I can give him the assurance that he seeks. As he so rightly said, it is a question of the day-to-day running. I took that point even

229
further by saying that there were two cases in which that was laid down by statute to be the responsibility of the official rather than the Minister. However, with regard to the overall responsibility, I understand that that remains with the Minister.
On the first point raised by the noble Lord, I do not believe that there is a need to cover corporate bodies because the Bill refers to a person appointed pursuant to any enactment.
Lord Bruce of Donington: That was precisely the point that I made; namely, that under the interpretation of legislation Act, "person" was held to include in all future legislation a corporate body as well as an individual. That was the only reason that I raised the point. In view of the recent development concerning the Intervention Board for Agriculture, which as I shall explain later appears to have attained agency status more recently than the noble Earl's correspondence suggests, will the noble Earl assure me that the board and its head are in no way involved in the operation of the clause?
The Earl of Caithness: As the noble Lord intends to raise the matter a little later, perhaps I may deal with the point then.
On Question, amendment agreed to.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 2:
Page 5, line 41, leave out ("£2,000") and insert ("£500").
The noble Lord said: In moving this amendment I should like to speak also to Amendment No. 3.
This amendment seeks to amend the Bill by substituting for the figure in the Bill the figure of £500 million and by deleting any further reference to it. As the noble Earl will be aware, under the original Trading Funds Act 1973, the aggregates of the limits in force in respect of all trading funds shall not exceed £250 million at any one time. The Bill puts the limit up to £2 billion and there is further provision by stages to a maximum of £4 billion.
I wonder why that increase is necessary. The total expenditure of all the agencies, according to the papers published on the financing of those agencies, amounts to some £9 billion. That is the total expenditure of all the agencies, not simply those that are included in this trading sphere. Why should it be necessary suddenly to move up to £2 billion and after that, if necessary, by stages to £4 billion? Can the noble Earl give me an assurance that no part of that sum is part of any future transaction to advance money for the purpose of securing a leverage buy-out by staff in a privatisation effort at some later stage? If there is no intention by the Government to become involved in that quasi junk fund field—as I am sure there is not—will the Minister kindly explain what kinds of expenditure are anticipated? Presumably capital expenditure is envisaged because the rest is provided out of the Vote.
It seems extraordinary that those figures should increase so greatly. Even the rate of inflation, about which the noble Earl is extremely sensitive and about which the country is sensitive, if added to the original £250 million would not account for the ultimate
230
figure of £4 billion. Even the United Kingdom has been a little more restrained in its inflation record than that.
Unless the noble Earl provokes me, which is unlikely, this is purely a probing amendment to find out the Government's intentions. If he can reassure me on the matter, I am sure that we can arrive at an amicable solution. I beg to move.
The Earl of Caithness: Our aim in setting the initial limit was to make it sufficient to cover the lifetime of a Parliament; that is, a period of five years. Beyond that, we would expect the Government to have to seek an order increasing the initial limit if they wished to set up further trading funds. That is consistent with most other statutory provisions covering the borrowing limits of public sector organisations, although I admit at once that determining the precise figure is subject to many uncertainties, not least on how quickly new trading funds will be set up.
In order to reach a judgment of what would be a suitable figure, we first looked at the present day equivalent of the limit of £250 million set in the 1973 Act. That gave us a figure of some £13 billion. However, given that we expect significantly more trading funds to be set up under the new powers, the presumption must be that that figure is too low. I am sure that the noble Lord will wish to take that point on board.
Accordingly, we looked at the number of bodies which might become trading funds in the course of time, based on agencies already established and the candidates listed in Annex A of the White Paper. That is not an easy judgment as it does not necessarily follow that all bodies listed in Annex A which fall within the powers will necessarily become trading funds.
Equally, other bodies not listed in the annex could become trading funds within five years of the Bill being enacted. What is clear is that the initial list of likely candidates in terms of both numbers and size is significantly more than the number of organisations named in the 1973 Act. All things considered, this suggested that a figure of £2,000 million was not unreasonable and that is the figure that was accepted in another place. Equally, I have to say that on the reasoning set out already and which I have described, a figure of £500 million would certainly be too low. In real terms it is less than two-fifths of the limit set in the 1973 Act. Further, it takes no account of the fact that the Government's clear intention set out in the White Paper is to set up significantly more trading funds under the amended legislation.
The second amendment would remove the power to increase the initial borrowing limit by affirmative resolution order up to a maximum of £4,000 million. I find it difficult to understand why the noble Lord takes exception to what is a well precedented and sensible approach adopted by governments of both parties. I know that the 1973 Act itself does not contain such a power but subsequent legislation—for example, in relation to nationalised industries—normally does so. The requirement for affirmative resolution procedure for any order ensures that Parliament will always have an opportunity to consider and debate any proposed increase.

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The provision raised no difficulty in another place where it was expressly considered, because by accident the Bill as originally introduced left out the order-making power which is now contained in Section 2B(9).
On the question of the coverage of borrowing limits, capital expenditure and working capital are the important points to remember. There is no clear relationship between a body's annual expenditure and its accrued borrowing requirement over time.
With regard to privatisation, I note that Amendments Nos. 4 and 7 tabled in the name of the noble Lord, Lord Bruce, deal more specifically with this matter. I can give the noble Lord an absolute assurance on privatisation: namely, that the Bill does not contain power to enable a trading fund to be privatised without subsequent primary legislation.
I hope that I have now been able to calm the worst fears of the noble Lord and that he will see that the Government's solution to the problem proposed by the increased number of trading funds is indeed the right one.
8 p.m.
Lord Bruce of Donington: I am most grateful to the noble Earl for his reply. The fact that the other place did not seem to worry very much about this matter raises the point that this Chamber very often tends to take a rather closer view than is sometimes possible in the other place. I must say that I am a little surprised that 17 years after the passage of the original Act in 1973, which involved only a £250 million borrowing power, the increase should have been so large.
The noble Earl says with some justification that the Government's wish to form outside agencies knows no bounds. We are well aware of the general political and philosophical thrust of the Government in these matters: privatise wherever possible, hive off wherever possible and take detailed responsibility away from Ministers wherever possible. One understands that. But the figures still remain very large indeed.
I gave the figure for the whole of the expenditure of the agencies on an annual basis, which was disclosed in the document to which I referred; but the very essence of the agencies that will be subject to trading funds is that they are already trading and that by and large their receipts exceed expenditure. Indeed, almost by definition they are already successful trading entities which derive the bulk of their income from the sales or proceeds of the services that they provide. Prudence would surely dictate that out of the profits that they make—and I have to refer only to Her Majesty's Stationery Office which must make a considerable profit—they ought to be able to make provision for their own working capital and, certainly so far as concerns HMSO, for the bulk of their capital expenditure as well spread over a period of time.
Therefore I still cannot understand the reason for those extremely large figures. I sincerely hope that on reflection the noble Earl will investigate this matter a little further with a view to complying with
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my original request to give some indication as to what these funds would be required for by trading agencies, in addition to the funds already at their disposal or made available from time to time through the Vote or even by realisation of capital assets which may become obsolete.
However, I do not desire to pursue the matter, especially when we are discussing tonight rather more controversial matters that are already before this Chamber in the Bill on Report. I shall leave the matter there, and I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 4:
Page 6, line 8, leave out ("or be Financed by other means").
The noble Lord said: The amendment is designed to deal with the vexed question of possible privatisation of some of the agencies already operating under the control of Ministers. The amendment seeks specifically (at page 6, line 8 of the Bill) to delete from the existing subsection the words:
"or be financed by other means".
The subsection as amended would therefore read:
"This section applies where any operations for which a trading fund is established are to cease to be funded operations (whether the operations ceasing to be funded represent the whole or part of the funded operations or are to cease altogether or be funded operations of another fund)".
There is no explanation so far as to what the words,
"or be financed by other means",
imply in terms of law. Therefore I am anxious that this subsection should be rather more closely defined.
Associated with this amendment is Amendment No. 7, which seeks to insert a new clause after Clause 2 in order to button up the matter satisfactorily. The new clause reads:
"Save as specifically provided for in section 4A of that Act none of the powers conferred or delegated under this Act shall be interpreted as permitting the disposal of any or all of the assets of any agency to which this Act applies or dealing with any or all of its liabilities otherwise than in the normal course of its business or related activities".
I am well aware of and accept the fact that the noble Earl has informed me in writing and has repeated today that there is no intention to privatise these agencies. Unfortunately the matter is still not without some doubt. I refer to the evidence given by Mr. Richard Luce to the Treasury and Civil Service Select Committee, reproduced in its eighth report dated July 1988 (which is quite recently). He said:
"We confess to being slightly confused by the relationship between the Next Steps and the Government's privatisation policy".
As the Committee will recall, Next Steps was the Government paper dealing with the Government's intention to set up various agencies.
The Eighth Report states:
"The essential thing in any individual case is to avoid uncertainty. If an announcement that part of a department is to become an agency is greeted by suspicions that it might later be

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privatised, such uncertainty could well damage efforts to improve efficiency and the quality of service. If the organisation is to be privatised it should be made clear at the outset that this is so".
However, that is refuted a little later by further evidence given to the Public Accounts Committee in its 38th Report of October 1989. It states:
"Next Steps is primarily about those operations which are to remain within Government. But it cannot be ruled out that after a period of years Agencies, like other Government activities, may be suitable for privatisation. Where there is a firm intention of privatisation when an Agency is being set up, this will be made clear".
As recently as 23rd January of this year, in giving evidence to the Treasury at the Standing Committee stage of the Bill, Mr. Peter Lilley, Financial Secretary to the Treasury, stated:
"The vast bulk of the agencies are by their nature, unsuitable for privatisation. However, we cannot rule it out absolutely across the board because in certain cases it will be appropriate, and circumstances may change so that some agencies fall into the category which were not there initially. But that will be comparatively rare".
There are already therefore sufficient statements on the record that would make it possible for a government, if they were so minded—on the assumption that the Government are returned after the next general election; I agree that that is a matter of some doubt—to be able to cross their hearts and say, "We warned you of this policy in the evidence that we gave to the Treasury Select Committee and to the Standing Committee." It is for the avoidance of doubt that I venture to put forward this series of amendments so that the position will be completely buttoned up.
I accept that the declaration of the noble Earl that there was no such intention was made in good faith. I do not question the Minister's integrity in the slightest. However, governments change and, as we have seen over recent years, their personnel are occasionally subject to reshuffles. It would be far safer, in my view and that of my colleagues, to have legislation on the statute book which closed that possibility.
The words of my amendment may not be those which become legally enforceable or which would pass the eagle eye of the Government draftsman. At a later stage I may seek the noble Earl's aid to secure a satisfactory form of words to achieve what I wish to accomplish. If the noble Earl agrees that there is no possibility of privatisation of the various agencies, he should raise no objection to the incorporation of such wards within the statute. After all, the Bill has been under consideration for some considerable time and one; could hardly complain if an endeavour were made to sharpen it up, and to insert clauses which incorporate the intentions that the noble Earl has been kind enough to indicate. I beg to move.
The Earl of Caithness: The noble Lord, Lord Bruce of Donington, has the respect of all members of the Committee. I was grateful to him for reaffirming his strong belief in his party's principles of nationalisation.
From what the noble Lord, Lord Bruce, said, noble Lords will have noted the enormous amount of work and diligence that he has put into preparing for the Bill. On a previous amendment he stated that another place does not necessarily devote the time
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that we do to scrutinizing legislation. But without question the noble Lord has put in many hours on the Bill. We are grateful to him.
The Committee will agree that it is not the time to discuss the merits of privatisation, on which I know there are genuine differences. Those are so great that the noble Lord and I would never agree on the correct solution. However, I wish to take the opportunity to make it clear that the new Section 4A provides a means by which operation may cease to be funded by a trading fund. It is intended to cover three options. First, it provides for the case where activities cease altogether. Secondly, it allows activities to be funded by means of another trading fund. Thirdly, it allows activities to revert to being funded through the normal processes of parliamentary supply rather than through a trading fund.
The wording is new Section 4A(1), which provides for the third option, is,
"or to be financed by other means".
It is that wording which has raised what in my view are perfectly understandable doubts. I am therefore happy to make it absolutely clear on the record that I am advised that, read in the context of the Bill, the words, "financed by other means" have to be construed as carrying the implication of continuing Government finance. They do not, therefore, provide for privatisation.
The noble Lord quoted some extracts from the Treasury Select Committee reports. Like my honourable friend Mr. Lilley, the Financial Secretary to the Treasury, I cannot absolutely rule out privatisation of a trading fund for the future; nor indeed would I wish to do so. However, if it were to happen, it would require further primary legislation as indeed is happening with the Crown Suppliers. The Bill does not provide a means of bypassing the need for further legislation.
I understand the noble Lord's concern on the matter. Perhaps he will allow me to reflect further to see whether or not there is a form of words which will satisfy him. I give him no commitment but obviously I shall try.
Lord Bruce of Donington: I am most grateful to the noble Earl for the very careful way in which he has phrased his reply to the arguments that I have ventured to lay before the Committee.
In view of the very emphatic assurances that he has given, and his undertaking for a further review, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.15 p.m.
Clause 2 [Minor and consequential amendments related to section 1]:
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 5:
Page 8, line 21, after ("accounts") insert ("prepared and presented in both form and content complying with good commercial practice and accepted accounting standards currently in force").
The noble Lord said: The amendment seeks to amend Clause 2 at page 8, line 21 after "accounts" by inserting the words on the Marshalled List.
There is little argument between the noble Earl and myself on the desirability of the accounts of these agencies, in particular those involving government trading funds, being presented in proper form. The question is: what is proper form? In their original White Paper the Government agreed that accounts in commercial form would be published. That goes part of the way towards meeting the requirement for good accounting.
A point is given to the amendment by the fact that the Intervention Board for Agricultural Produce, which recently attained agency status, was the subject of detailed comment by the National Audit Office. I do not wish to weary the Minister too much or to detain the Committee for too long. However, we should note the findings of the audit office in relation to the accounting and financial reporting systems currently used by the intervention board which has become an agency for the purposes of the Next Steps procedures already adopted. I wish to quote from the report because the findings are important and they lie at the root of a great deal of my anxiety. Paragraph 14(b) states;
"The Board's two UK Parliamentary Vote accounts relate to the UK financial year, are cash-based, show administration separately from scheme expenditure, do not link Community contributions to individual schemes, and do not disclose assets and liabilities".
If agencies are to operate and have proper accounts prepared and presented to the public they must provide as correctly as possible for assets and liabilities of the agency. Sometimes they will include contingent liabilities for which provision in commercial accounts is often made by the next report on the accounts. We all know that commercial accounts, even accounts prepared under the Companies Act 1985 and those passed since, frequently exhibit deficiencies. However, that is no reason why one should not attempt to present accounts, particularly for trading agencies which are the subject of the Bill. Why should not the effort be made to prepare and present accounts in what we call good commercial form? Incidentally, the term "good commercial practice" used in relation to accounts is a phrase well understood in law. Its definition has been accomplished many times within various judgments given by the courts in relation to commercial accounts. Likewise, currently accepted accounting standards are progressively becoming the rule and are being taken into account by the courts which are often called upon to adjudicate upon them.
I wish to go even further, particularly in relation to the intervention board which is now an agency. Paragraph 14(c) states:
"The Board's Intervention Buying Accounts show the year-end position and movements in the Board's intervention stockholdings—an an accruals basis—and the direct costs of stockholding. But they do not show the indirect administrative costs of stockholding or link operational costs to individual commodities".
Paragraph 14(h) states:
"The Board's accounting systems, while sufficient for producing the cash-based UK Vote accounts, do not contain all the information needed to assemble the accounts required by the Community or the Intervention Buying Accounts. These have to be compiled and reconciled manually and laboriously. A new accounting system will be phased in during 1991".
That is one example.
We all know, and it has often been a matter of comment, that because they find it convenient so to do the Government generally prepare their accounts on a cash-in and cash-out basis. Occasionally they indulge in creative accounting; for example, by treating income received from the sale of assets in their possession not as receipts but as negative expenditure. That is a rather tongue-twisting term that has avoided the necessity for including it among ordinary receipts.
We wish to make sure that the agencies which fall within the ambit of the Bill prepare their accounts in the ordinary and conventional way. The noble Earl was kind enough to provide me with the pamphlet Trading Accounts: A Guide for Government Departments and Non-Departmental Public Bodies as published by the Treasury. Annex A makes quite clear the kind of profit and loss account and balance sheet formats, as appropriate, that would normally be required. Why they should not be required within such agencies eludes me. Surely there can be no reason why such agencies, particularly as the detailed day-to-day responsibilities are taken away from the Minister, should not conform to the best commercial practice. After all, the main thrust behind the formation of such agencies, particularly those which are subject to the Bill, is to make them more efficient in commercial terms.
The dead hand of government would be taken away from them. Presumably the dead hand of government includes the ridiculous concept of keeping one's accounts on a cash-in and cash-out basis, so beloved by the Treasury. Therefore, why should the Government resist incorporating what I intended to be a perfectly helpful amendment in order to give statutory sanction to the presentation of accounts as is done by ordinary trading organisations?
It is difficult to make cross-references to the Companies Act 1985 and to succeeding Companies Acts. A particular contortion of wording would be required in order to convert the limited company situation into that of an agency. Limited companies have certain statutory responsibilities in regard to their accounts which are inseparable from their share and capital structure, the rights given to certain types of shares, the various lengths of time for the satisfaction of their liabilities, the nature of their assets, and so forth.
However, within the scope of the document—and the noble Earl was most careful to provide me with a copy—I believe that the words of my amendment square amply with the principle of the pamphlet. In fact, this pamphlet is tailor-made for the job. Why should it not be given a statutory authority for the avoidance of any doubt?
I have a professional interest in such matters and I may have been a little discourteous, for which I apologise to the noble Earl. I believe that he understands the general thrust of my argument, and for the life of me I do not see why the provision cannot be incorporated in statute in the words that I ventured to place upon the Marshalled List in my amendment or in a suitable amendment which may occur to the noble Earl upon reflection. I beg to move.
8.30 p.m.
The Earl of Caithness: I am grateful to the noble Lord for moving the amendment. It gives me an opportunity to set out clearly for the Committee the Government's intentions with regard to the form of trading fund accounts.
I agree with the noble Lord. I do not believe that there is any difference between the noble Lord and the Government with regard to our ultimate objectives. I have discussed these matters with the noble Lord outside the Chamber and I have explained the Government's intentions in a letter to him which forms the basis of what I shall now say to the Committee. I have also listened carefully to what the noble Lord said in moving his amendment. If there is any difference between us, it relates to the best means of achieving our objectives and not to the objectives themselves.
Our intention, which I know the noble Lord shares, is to have a clear, consistent and transparent framework for the preparation of trading fund accounts. That is why the Bill follows the normal precedent as, for example, in nationalised industry legislation of giving the Treasury power to issue directions in relation to the form of accounts and the methods and principle on which they are to be prepared either generally or in relation to specific funds. We intend to make any general directions available to Parliament by laying copies of the directions before Parliament. Where directions are specific to any particular trading fund, we would expect that fund to publish those directions as part of its accounts which, by virtue of Section 4(6) of the 1973 Act, would be laid before Parliament.
The reason for dealing with these matters in directions, rather than in primary legislation, is the one which the noble Lord himself stated during the Second Reading debate. Accounting concepts have changed considerably over the years, and we would expect continuing development in the future.
I must congratulate the noble Lord on his skill and ingenuity in trying to draft a suitable amendment. However, I have to say that his amendment, and I believe any similar approach, fails on two counts. First, by referring to good commercial practice and accepted accounting standards, which are essentially private sector led, it implies that private sector requirements should dictate, both in spirit and in detail, what is best for the public sector. I am sure that the noble Lord recognises fully that there are some genuine differences between the public and private sectors which can require different accounting treatments. However, the amendment does not recognise that. Secondly, the amendment implies that innovation to meet the requirements of the public sector should be constrained by private sector practice. Again, practical experience, for example, in relation to inflation accounting, shows that this is not so.
I should also make clear that in encouraging best accounting practice we supplement accounts directions with guidance. We have recently consolidated and updated existing guidance on trading accounts in a Treasury booklet which has the title Trading Accounts: A Guide for Government
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departments and NDPBs. Indeed, the noble Lord referred in particular to Annex A. I am sure that the noble Lord has taken clearly on board Annex C which deals with accruals-based accounting. Agencies are either government departments in their own right or part of a government department. I believe that that guidance gives the clearest possible indication of our intention that trading fund accounts should be commercial-style accounts reflecting best practice.
The noble Lord raised the question of the NAO report on IBAP. We shall read the report with great care and interest before responding to it.
I believe that the proven arrangements which I have described are the best way of achieving the underlying objectives of both the Government and the noble Lord. I must be honest with the noble Lord. I cannot give to this amendment the same consideration as I said I would give to the previous amendment.
Lord Bruce of Donington: Once again I am grateful to the noble Earl for his explanation. I am even more grateful for the publication which he was kind enough to leave with me, produced by none other than the Treasury itself. That underlines precisely what I have said. For example, Annex A sets out the draft format of a profit and loss account and balance sheet prescribed in the Companies Act 1985 and recommended for public sector bodies. These are public sector bodies. Annex B sets out some aspects of the accounting and disclosure requirements of the Companies Act 1985 and statements of standard accounting practice as they apply to accruals-based accounts prepared by public sector bodies. There is nothing between us as to the concept.
The Government have been kind enough to put themselves into print in the particular document to which I have referred. I am rather at a loss as to why they are afraid of giving their own publication official sanction within a Bill which deals with the public bodies to which the noble Earl referred.
I hope that the noble Earl will give this matter further consideration. I take note of what he said about the wording which I have used. However, I believe that there must be a way of marrying what appears to be the Treasury concept and my own. They appear to be identical. There must be some way of expressing that in the Bill. On the basis that I intend to return to the matter again on Report, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 6:
Page 8, line 28, after ("require") insert:
("(6B) Where any enactment (other than this Act) requires, in whatever terms, a report to be prepared for any period as to the funded operations and sent to any person, or laid before Parliament, or both or so sent or laid by any time or times, an order may provide for that requirement to be treated as satisfied by preparing the report for the financial year and sending it to that person, or laying it before Parliament, or both or, as the case may be, so sending or laying it by the time or times specified in the order.").
The noble Earl said: This amendment is intended to deal with a problem which so far as we know is confined to the Patent Office, although the

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amendment would also cover any other similar cases. The Patent Office is required by legislation to produce an annual report on a calendar year basis. The intention underlying Sections 4(6) and 4(6A) of the Bill is that trading funds should be able to produce and publish a combined annual report and accounts.
Since the Patent Office works on an April-March financial year (which is also likely to be the financial year if the Patent Office were given a trading fund), to meet this requirement the Patent Office would either have to change its financial year to the calendar year or publish two separate annual reports. On consideration I am sure that Members of the Committee will understand the necessity for trying to amalgamate that. The amendment would solve the problem which I have highlighted by making it possible for a report produced for a fund's financial year to be treated as satisfying any other statutory reporting requirement. I beg to move.
Lord Bruce of Donington: I do not wish to detain the Committee very long on what may be a technicality. The noble Earl said that, so far as is known, the Patent Office provides the only exception of which account must be taken. Let us assume that that is so. What is the objection within this Bill to amending the appropriate sections of the statute which require the Patent Office to do certain things and bring it within the ambit of the Bill? One would need only to change the Act which lays down what the Patent Office must do and incorporate the amendment at the end of the schedule into the existing Bill. Why contort oneself into perpetuating the exception which is being made in respect of the Patent Office? That seems to me the last word in administrative convenience. Perhaps the noble Earl can elucidate on that point. Would it not be simpler to bring the Patent Office into line rather than make the particular exception which the noble Earl proposes to make by his amendment?
The Earl of Caithness: I apologise to the noble Lord for not making myself as clear as I should have liked in moving the amendment. It is for convenience that we seek the amendment and hope that the Committee will agree to it.
It is for the reason given by the noble Lord, which I mentioned earlier, that we have phrased the amendment as it now appears on the Marshalled List. Should there be another example in addition to the Patent Office I am sure that the noble Lord agrees that further primary legislation would be required to deal with the matter. The amendment prevents that.
Much as I should enjoy debating such a measure with the noble Lord, on reflection I am sure that he will agree that this is the better way of achieving our purpose.
Lord Bruce of Donington: I am grateful to the noble Lord for his reply at this stage. I do not wish to nit-pick over a small matter of this kind. I was curious. I sincerely hope, given the Government's impending colossal legislative programme, it will not
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be necessary to distort the position further by passing a special Act to accomplish the purpose I had in mind.
I accept the explanation given by the noble Lord. I was merely trying to help—always a dangerous thing for the Opposition to do. On the basis of the reply that he has given I am prepared to support the amendment.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
[Amendment No. 7 not moved.]
Remaining clauses and Schedule agreed to. House resumed: Bill reported with amendments.
Lord Henley: I beg to move that the House do now adjourn during pleasure until 15 minutes before nine o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.42 to 8.45 p.m.]

National Health Service and Community Care Bill
Consideration of amendments on Report resumed.
[Amendment No. 120 had been withdrawn from the Marshalled List.]
Lord Young of Dartington Lord Young of Dartington moved Amendment No. 120A:
After Clause 19, [In substitution for Amendment No. 120], insert the following new clause:
("Clinical and General Standards Board
.—(1) There shall be established in accordance with this section a Clinical and General Standards Board (in this section referred to as the Board) which shall have the following functions in connection with clinical and general care—

(a) in accordance with a request made by the Health Ministers or any one of them, to provide advice on the standards of clinical and general care for, and the access to and availability of services to, national health service patients and, in this connection, to carry out such investigations into such matters (if any) and to make such reports in relation thereto as the Health Ministers may require;

(b) in accordance with a request made by one or more health services bodies, to provide advice on. to carry out investigations into and report on the standards of clinical and general care for, and the access to and availability of services to, national health service patients for whom services are or are to be provided by or on behalf of the body or bodies concerned:

(c) to initiate and carry out its own enquiries as and when it deems necessary;

(d) to set clinical and general standards, assess trends and give independent advice to the Health Ministers on the performance of the health service nationally;

(e) to monitor and secure improvements in the quality of the health services at all levels and in all regions;

(f) to identify and make known more widely good practice and promising developments and draw attention to weaknesses requiring action;

(g) to make an annual report to Parliament:

(h) such other functions as may be prescribed by regulations.

(2) The Board shall consist of a chairman and other members appointed by the Health Ministers from persons nominated by

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the Royal Colleges, the other health professions and consumer orga isations or other such body or bodies as may be specified in regulations; and

(a) such regulations may provide that one or more of the members who are not appointed from persons so ominated must fulfil such conditions or hold such posts as may be so specified; and

(b) regulations shall provide that the Board shall appoint a Director of Clinical and General Standards who shall report to the Board on particular bodies within the health service and make such reports public.

(3) Regulations may make provision as to—

(a) the appointment, tenure and vacation of office of the chairman and members of the Board;

(b) the appointment of and the exercise of functions by committees and sub-committees of the Board (including committees and sub-committees consisting wholly or partly of persons who are not members of the Board);

(c) the procedure of the Board and any committees or sub-committees thereof; and

(d) the attendance at meetings of the Board or any committee or sub-committee thereof of persons appointed by the Health Ministers and the extent of their participation in such meetings.

(4) Proceedings of the Board or of any committee or sub-committee of the Board shall not be invalidated by any vacancy in membership or by any defect in a member's appointment or qualifications.
(5) The Health Ministers—

(a) may pay to the chairman and members of the Board, or of any committee or sub-committee of the Board or any persons appointed as mentioned in subsection (3)(d) above, such sums by way of remuneration and travelling and other allowances as the Health Ministers, with the consent of the Treasury, may determine;

(b) shall make available to the Board and to any committee or sub-committee thereof such professional staff and other services or facilities as are necessary to enable them to carry out their functions; and

(c) shall defray such expenditure as is reasonably incurred by the board in carrying out their functions.

(6) Where the Board carry out an investigation or make a report in accordance with a request made by a health service body, that body shall reimburse, in such manner as the Health Ministers may determine, so much of the expenditure incurred by them under paragaphs (a) and (c) of subsection (5) above as they certify as being attributable to the carrying out of that investigation or the making of that report.
(7) In this section—
"clinical and general care" means any action which is taken in connection with the diagnosis of illness or the care or treatment of a patient;
"the Health Ministers" means the Secretaries of State respectively concerned with health in England, in Wales and in Scotland;
"health service body" means—

(i) a health authority, within the meaning of the National Health Service Act 1977,

(ii) a Health Board or Special Health Board constituted under section 2 of the National Health Service (Scotland) Act 1978,

(iii) a State Hospital Management Committee constituted under section 91 of the Mental Health (Scotland) Act 1984,

(iv) the Common Services Agency for the Scottish Health Service,

(v) a National Health Service trust constituted under Part I of this Act or under the National Health Service (Scotland) Act 1978, and

(vi) a Family Health Services Authority;

"national health service patient" means any person for whom any services are or are to be provided by or on behalf of a health service body;
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"regulations" means regulations made by the Health Ministers and any such regulations may make different provision for different cases or descriptions of case, including different provision for different areas; and
"services" means services provided—

(a) in England and Wales, by virtue of directions under section 13 or section 14 of the National Health Service Act 1977 or section 5 of this Act; or

(b) in Scotland, by a health services body under Part I or Part III of the National Health Service (Scotland) Act 1978; or

(c) pursuant to an NHS contract, as defined in section 4(1) of this Act or section 17A of the National Health Service (Scotland) Act 1978.").

The noble Lord said: My Lords, noble Lords will have noticed that there are two apparently very similar amendments in the Marshalled List—Amendments Nos. 120A and 198. Both concern the broad question of monitoring and quality assurance. Both fall for consideration, one being tabled by the Government and one by myself in conjunction with the noble Lord, Lord Kilmarnock, my noble friend Lord Ennals and the noble Baronesses, Lady Masham and Lady Cox. For once there are five and that seems a good precedent, especially on something so important.
The similarity is deliberate. The proposers of the amendment wish to show how much common ground there is between us. I understand that the Minister will speak directly after me and I express the hope—without telescopes or anything of that kind—that she will be able to stress the common ground to a considerable extent, perhaps going the whole way.
I must say at once that I am grateful to the Minister and the Government—I am sure that other noble Lords who have an interest in the question agree—for taking the action that they have since Committee stage when my amendment, which proposed the establishment of Her Majesty's Inspectorate of Health, was narrowly defeated. We should all rather have the Government's Clinical Standards Advisory Group than nothing. However, that does not go far enough in two crucial respects. As the name of the group makes clear, its concern will be with clinical standards. And it will be an advisory body. On both counts, according to our arguments, the government body will be too narrowly restricted. Its functions need to be widened.
In taking that view and putting forward an alternative amendment—even though there are not so many Peers present as one would like to express their support—I can say that we have the support of the Royal College of Nursing and other consumer bodies with which I am, and have been for a long time, actively connected. They are the College of Health, the National Consumer Council, the Patients' Association and the community health councils of England and Wales. They all want the functions of the new body to be widened so that it is not just advisory and is not concerned only with clinical standards but with standards of performance more generally.
The first issue on which there is a difference between the two amendments is about the new body being advisory. As I see it, the Government want I the body to be yet another body advising itself. We

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think that is wrong. A purely advisory body has no clout. We want the status of the body to be upgraded so that it carries more weight in the health service and beyond, generally, among patients. It should, in our view, be a board and not an advisory group, let alone an advisory committee, and as such the board and its professional staff should have a certain independence with the power to launch inquiries on its own initiative and not just when requested to do so by health Ministers and health service bodies. It should have the power to give independent advice to Ministers and to make an annual report to Parliament on the state of the health services.
When we discussed these matters in Committee I spoke about the admiration that I have for Her Majesty's inspectors of education. I refer to the kind of annual report which is produced every year by Her Majesty's senior chief inspector of schools, with the whole inspectorate behind him. It is always an important document in the current history of education. It summarises the state of the problems, and not only that but the achievements in any one year. It is very much what I hope this board, if it were set up, would be responsible for every year, and it would come to Parliament.
The second, more important, issue which divides us is whether the new body should be confined to clinical standards alone. This restriction suggests that the Government have still not grasped the point made by all the people who at various stages of this Bill have argued for accreditation, monitoring, quality control and inspection; and all of us have had our proposals rejected.
The royal colleges already monitor clinical standards, as the noble Lord, Lord McColl, pointed out in Committee. I would say that there is relatively little disquiet about clinical standards in the health service. It is recognised widely that our doctors and nurses are second to none. However, there is disquiet about other standards in the health services and particularly a fear that as a result of the extra pressure to get down costs which is to come from this Bill—indeed, it is in part a purpose of the Bill—the quality of the overall service given to patients could suffer.
The noble Lord, Lord Carr of Hadley—I am sorry to see that he is not in the Chamber tonight—put the point very trenchantly in Committee when he said:
"The bigger the downward pressure on costs, the more important it is to have a very strong quality assurance control. I beg my noble friends" —
I join with the noble Lord on that—
"on the Front Bench and the Secretary of State to come forward with a convincing, credible system of quality control".
I am afraid that the form in which the government amendment appears has not satisfied the call made by the noble Lord, Lord Carr. It is still true that the public, patients and their families need to be reassured and have their confidence in the overall quality of the health service in these difficult times restored and maintained to the highest possible extent. Hence our amendment and the main difference between it and the Government's amendment.
Our amendment proposes that the board should be concerned with clinical and general standards. We want the new monitoring body to be concerned with both; that is, with standards generally.
I now come to my argument that I am not going to be able to set out at great length—no one would want me to—but I intend to give one or two examples which I hope will make the point clear. It is a nonsense to separate the two. The highest clinical standards cannot be maintained unless general standards are also maintained. However good the conditions, they depend on proper standards being observed by all the people concerned.
I am sure that on this point the noble Lords on my left—the noble Lords, Lord Walton and Lord Hunter—will agree (I hope they agree) that the conditions depend on all sorts of people if a good job is to be done: the cleaners, if cross-infection is to be avoided; the way in which the waiting lists are managed by administrators; and the efficiency with which medical records are kept and produced at exactly the right time, or as near exactly the right time as is possible. All their work may be brought to nought unless proper arrangements are made for the after care of discharged patients and unless patients are properly informed about what they need to do to look after themselves. Clinicians' letters and discharge summaries must be sent off to GPs before it is too late for them to be relevant.
Those are just a few examples but surely they are telling and bear out the general point that a hospital or a GP's practice does not just need high standards in one area, even if it is the most important area of all—clinical standards of treatment. There must be an array of standards and teamwork, with all the people in the team concerned with quality encouraged to maintain quality. If the government amendment is passed it will be a slight on all those people whose work in its own way is also vital even though their lot may be in some way humble compared with that of great clinicians and important doctors in hospitals.
What clinicians know, patients also know. Those of us who have been patients—and most of us have been patients at some time in our lives or have had relatives or friends who have been patients—surely know that our worries and their worries, if they exist, are not just about clinical treatment but about everything else that goes on in hospitals and GPs' surgeries within the community health services that need to be closely linked with the acute services.
I give one example before I conclude. It is of a lady whose case came to my attention recently. This elderly lady was waiting, like so many others, for a hip replacement. She knew that she had to wait for a long time because her doctor told her so, and in any case she reads the press. After two years of patient waiting she telephoned the hospital and asked when her turn was to come. There was a commotion at the end of the telephone and eventually the hospital staff apologised and said that they were very sorry but her papers had been mislaid. As they therefore had no record of her ever having been on the waiting list she had to go to the bottom of the queue.
She waited another two years and again contacted the hospital to ask when her turn was coming. Incredibly, again her papers had been mislaid. The poor lady eventually, after six years, had the hip replacement. She had to suffer protracted pain. She did not badger the hospital, as some people would. Her husband, seriously ill through much of that time, died. She felt that she was never going to get any help from the health service and was in despair; but she was not in despair about the clinicians.
I expect that the clinical standards at this orthopaedic hospital, for that is what it was, were of the highest possible level. But other things went wrong which stopped people getting the right medical treatment, reassurance or even a roughly firm date when they might get relief. The problem was nothing to do with the clinicians; it was to do with poor management. Good management and good management standards can be particularised in many different ways. They are a vital supplement and back-up to what clinicians do and can do.
The public need to be assured that in our great health service the overall quality will be maintained. The body proposed in this amendment will at least go some way towards giving that assurance. I appeal in particular to the Minister opposite to support this amendment, and, if necessary, I shall appeal more widely. If this amendment is supported it will achieve a double purpose. Noble Lords will be supporting the Government's amendment in the important essence of it. They will be going even further. It will be more than just simple support for the amendment, for noble Lords will be recognising that if clinical standards are to be maintained and improved we need more than just concern. In a sense we could achieve two ends for the price of one vote if it comes to that. I hope that there will be support for this line of thought. I beg to move.
9 P.m.
Baroness Hooper: My Lords, it has been suggested that it would be helpful if I intervene at this stage to speak particularly to Government Amendment No. 198. Since we are speaking to a much wider grouping, I will happily respond at the end to any points raised in the course of further debate.
During our debate on earlier amendments I said that the contractual process will focus attention on quality of care and on areas where improvements in health standards are needed. In the debate on this group of amendments we are considering what impact national bodies can have on quality. Local and national initiatives should complement each other in this key area. We see the role of national bodies as one of assisting, informing and encouraging work at local level.
Central action cannot replace detailed local effort but it can inspire and enhance it. I hope that these initial remarks help to place in context the Clinical Standards Advisory Group which Government Amendment No. 198 will establish. Your Lordships will know that the decision to establish the group was announced jointly by my right honourable friend the Secretary of State and the conference of royal colleges following a meeting on 15th May. I am pleased that the conference of royal colleges
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welcomes the decision to establish the group as a significant step forward in promoting high clinical standards everywhere in the National Health Service following implementation of our reform programme.
It might be helpful if I set out in some detail the way in which we envisage the Clinical Standards Advisory Group operating. The group will consist of a lay chairman, members appointed on the nomination of medical, dental and nursing royal colleges and the chairmen of the standing medical, dental and nursing advisory committees. It will have a wide remit to provide advice, carry out studies and submit reports at the request of the Secretaries of State on issues relating to standards of clinical care nationally, regionally or locally.
In addition, the group will be able to provide advice on specific local issues at the request of health service bodies. That will enable it to provide valuable help to districts seeking to monitor the quality of service obtained through a particular pattern of National Health Service contracts or to help a National Health Service trust looking for independent advice on aspects of the services which it provides.
The group's programme of work will be settled between it and the Secretaries of State. They will consider together proposals for studies, including those from health service bodies and other organisations; for example, the royal colleges. It will also give priority to those which they consider to be of the greatest value to the health service as a whole.
The noble Lord, Lord Young of Dartington, suggested that the group should have more clout. I believe that it will have ample clout. Both the Government and the nominating bodies will ensure that the membership will be highly experienced. Its reports will be authoritative. Nobody will want or indeed be able to leave its views sitting on the shelf. I do not believe that Amendment No. 120A which we are considering adds to this and might even detract from the group if lines of accountability and responsibility remain vague.
Lord Ennals: My Lords, is the Minister saying that the group will be able to act on its own or will it still act at the request of the Secretary of State or the health authority?
Baroness Hooper: My Lords, as regards the independence of the group, I believe that the expertise of its members will enable it to become a respected source of advice on clinical quality, complementing the drive to improve standards in the National Health Service both locally and nationally. In answer to the specific question which the noble Lord, Lord Ennals, has just raised, there will be nothing to prevent the group initiating activity, though we would largely expect it to respond to requests.
I believe that its establishment fully meets the concerns of your Lordships and others outside your Lordships' House who have sought ways of guaranteeing that our proposals have an impact where they matter most; namely, in connection with the quality of clinical care provided to patients. Therefore, I commend to the House the Clinical

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Standards Advisory Group and the new clause establishing it.
Perhaps I may comment on the amendment which has just been moved by the noble Lord, Lord Young of Dartington. I believe that your Lordships will agree that this board will operate in many ways in much the same way as our Clinical Standards Advisory Group in providing advice on standards of clinical care. The board would have power,
"to set general standards, assess trends and give independent advice to the Health Ministers on the performance of the Health Service nationally [and] to monitor and secure improvements in the quality of the health services at all levels and in all regions".
These are worthy aims, but I fear that they would cast the board's role so widely as to reduce its effectiveness in examining any specific area and, in particular, in advising on the specialist matter of clinical care.
The wide remit advocated by this amendment would cut across the valuable work already being undertaken by the National Health Service management executive in monitoring and improving the performance of the health service generally. This role was neatly encapsulated in an amendment in the name of the noble Lord, Lord Hunter, which we did not, unfortunately, manage to discuss last Thursday. I say "unfortunately" because the National Health Service management executive has a key role to play in improving quality and performance in the health service. Indeed, it was established very much for that purpose. Quality was an agenda item on all the reviews of the regional health authorities' performance which were undertaken by the management executive last year. This trend looks set to continue in this year's review programme.
Additionally, the National Health Service management executive has earmarked £10 million for quality initiatives this year, with £7.5 million allocated to regions for local projects and £2.5 million retained centrally for national demonstration projects and centrally funded initiatives. Also, much has been achieved through a series of meetings between the director of operations and the medical director of the management executive with regional managers this year to discuss initiatives, to evaluate and to improve quality of care around the country.
I fear that the clinical and general standards board, with its director of clinical and general standards, would compete with rather than complement the work of the National Health Service management executive on quality. Quality is surely an inherent part of the work of each of the National Health Service management executive's directors. It should not be isolated and shunted off into the hands of a single individual or body. Indeed, doing so would only restrict the management executive's current range of activities in the field of quality improvements.
As I said earlier, the Clinical Standards Advisory Group's programme of work is intended to be settled between it and the health Ministers. This means that they will be able to decide together which studies
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would be of greatest value in enhancing clinical standards and giving benefit to patients. They will consider proposals from a whole range of sources—from the group itself and from the health Ministers but also from the health service bodies and other bodies such as the royal colleges.
Baroness Seear: My Lords, may I interrupt? The Minister has made a very important statement. She said that they will decide together. The whole point of our amendment is the independence of this body. The Minister said that they will decide together. But Amendment No. 198 states that the group shall have functions:

"(a) in accordance with a request made by the Health Ministers or any one of them…

(b) in accordance with a request made by one or more health service bodies…

(c) such other functions as may be prescribed by regulations."

They will carry out requests, which means orders sent down by the Ministers. The whole point of what the rest of us want is that these people should be as independent as possible, not creatures of the Minister, carrying out his requirements. This is a totally different concept.
Baroness Hooper: My Lords, that is why it is most useful to have this opportunity to explain the intentions behind this amendment. It was certainly on this basis that the agreement was reached with the royal colleges—an agreement which I hope your Lordships will all feel is very valuable and will be very important in having an effective body in this area.
I intended to go on to say that with the combined strength of the health Ministers and the advisory group in considering the programme of work, they will be in a position to consider proposals from a whole range of sources—from the group itself, from the health Ministers, as the amendment states, but also from health service bodies and other bodies such as the royal colleges. We hope that the clinical standards advisory group will include members with a wealth of experience of the health service on clinical issues in particular. The group will be perfectly able to put forward its own ideas in its discussions with the Secretary of State, without the need for the protective power proposed by this amendment.
I believe that the working arrangements that I have outlined pave the way for constructive co-operation between the health Ministers and the Clinical Standards Advisory Group; and that co-operation, I repeat, is surely the best guarantee of an effective role for the group. In urging your Lordships to consider sympathetically the Government's amendment when we come to it—and I feel that I almost do not need to urge in that way—I would say that I feel that Amendment No. 120A would add nothing to smooth working relationships, and it cannot therefore be helpful to our consideration.
9.15 p.m.
Lord Hunter of Newington: My Lords, the Minister mentioned the amendment that I put down for last week with the noble Lord, Lord Carr. For the reasons

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that were given I withdrew it, but it was substantially a question which asked the Government to say more about the management board. Some 18 months ago the Government announced the formation of this policy board and a management board for the National Health Service. The Secretary of State himself would chair the policy board, and among its members was the Chief Medical Officer of the National Health Service sitting there by personal invitation. There was no nurse on it, so far as I understood the matter.
The appointment of the chief executive of the management board, Mr. Duncan Nicol, was made shortly thereafter, and the board has been active in strengthening the management side of the National Health Service, particularly on the general practice authorities. More recently the Government decided that the chief of research and development, whom they had proposed in response to the report of the Select Committee on Science and Technology on medical research with reference to the National Health Service, should be redesignated Director of Research and a member of the management board. This would add to the R&D input to that board.
With other developments to which the Minister has referred, particularly the proposals about clinical matters agreed with the medical profession, there remain; a large and vitally important area of quality control that has been mentioned—that of the management of scarce resources provided by the National Health Service. Apart from these clinical matters there is this wide range of services where effective management is vitally important to the patients and the quality of service.
The research and development of this large enterprise will be the responsibility of the Director of Research and Development, with the input to the management board. It seems to me that the quality control designed to improve the general standards of orgalisation should be the responsibility of that board, and in fact its main function. The Minister has told us something about this. Perhaps she may wish to tell us more about it later.
Coming to the proposed amendment, I do not agree with the inclusion of clinical matters as just part of the general management function and control. I believe that the Government and the medical profession got it right in the amendment proposed by the noble Baroness, Lady Hooper, and if the management board is responsible for studies of management throughout the health service it should still hold that central role. It should decide if there is to be inspection or something of that sort, or other methods of control. A great deal has been spent on management in recent months, and it is important to find out if the managers are effective in a somewhat difficult role where close collaboration with clinicians is necessary for success. I have discussed this matter with the noble Lord, Lord Carr, who is unable to be here tonight. He has agreed that the general management should be dealt with in this way.
Baroness Cox:My Lords, may I briefly intervene and say that I concur wholeheartedly with the noble Lord, Lord Young of Dartington, in welcoming the
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Government's amendment as a significant step in the right direction. It must be apparent, from the fact that my name appears mysteriously in, I think, an unprecedent fifth place as a supporter of the amendment, that I have some concern about the fact that the government amendment does not go far enough. I shall not spell them out, but I should like to reiterate four areas.
I have been appreciative of the account of my noble friend the Minister of the government amendment and the way it is intended that it should work. But I must confess that I am still not quite convinced by what my noble friend said about the genuine degree of independence in the board as proposed in the Government's amendment. Nor was I really convinced by the interpretation of the powers of independent initiative that the board should have in instigating inquiries of its own accord. It seems to me from the wording of the Government's amendment that the board would still depend upon an inquiry being instigated at the behest of others rather than having its own absolutely independent initiative.
Thirdly, while I welcome the focus on clinical standards—I am a great believer in any measure which will ensure and maintain the highest possible clinical standards—I support the wider interpretation in respect of quality assurance implied by including "general standards" with the word "clinical". It is not sufficient specifically to focus on clinical diagnosis, treatment and procedures. Other aspects of care must affect clinical practice; for example, standards of hygiene in clinical areas or the nutritional adequacy of diets for sick people.
Fourthly, it is important that the report should be published and be in the public domain. It is the basis of accountability and learning. What will happen under the new dispensation in the provision of health care? The amendment to which my name strangely appears in fifth place is an important addition to the Government's amendment. It does nothing to violate the spirit of that amendment; it would greatly enhance the board's effectiveness, including its effectiveness in monitoring standards of clinical care, which is why I support the amendment moved by the noble Lord, Lord Young of Dartington.
Lord Ennals: My Lords, I support the amendment. My name appears on the list. It has reached third place. The first time the amendment appeared, my name did not get there at all. Perhaps I got into the middle and pushed the others outwards. I too warmly welcome the Government's initiative, which is an important step forward. It is very much in line with concerns which were expressed on both sides of the House on Second Reading and in Committee. I agree with all that has been said: it is too small a step.
I should like to think that, having got that far, the Government might be prepared to be influenced by this debate and the debate which might conceivably take place on Third Reading. Who knows? I should like to express my views by asking questions which I believe will indicate where my concerns lie.
The first and most important question is how independent will the body be. The Minister said that it could initiate its own work. I intervened to ask

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the question and she gave an answer: "Yes, it could if it so decided". However, there is nothing in the amendment to suggest that it could initiate its own inquiries. If it can, that should be written on the face of the Bill. How will the body operate? Will it operate with teams of—I will not say inspectors—experts rather as the Health Advisory Service has operated? If so, how many hospitals and health service units would it expect to be able to visit in the course of a year? My real question is: how big a job is it going to do? I know that in the first discussion that the royal colleges had with the Secretary of State, he put in single figures the number of hospitals or units that might be visited in the course of a year. That seems to me to be inadequate. What goes with that point is: how many staff would the body be expected to have to do its job?
I believe that the Minister answered the question about how much the board would cost. She gave the figure of £10 million, plus £7.5 million, plus £2.5 million. If my arithmetic is right, that amounts to £20 million in the course of a year. Perhaps she will confirm that I have the figure right. How will the body be set up? I am aware that there will be some nominations by professional bodies, but does she not think that it should include—"representation" is a word that we dare not use—some persons who are known to have special experience of community and consumer interests? There is no reflection of that point which I believe would add to the degree of independence that the Minister suggests the body should have.
How will the body report? To whom will it report and, in particular, will those reports be made public? My last question is the same as my first. Is this body to be a tool of the Secretary of State, able to act at the request of health service bodies, or will it be a truly independent body? Many people, professionals and others, would be much more confident if they felt that it was an independent body which was not merely beholden to the Secretary of State.
Lord Mottistone: My Lords, my amendment is grouped with these amendments because unfortunately the printers were a little muddled last night. For those noble Lords who do not already know the secret, page 37 of the Marshalled List shows my name on Amendment No. 198A, which is correct. However, what was line 7 last night when I put the amendment down is line 6 of the new clause under Amendment No. 198. My other amendments are down under the name of the noble Lord, Lord Ennals, and his name has crept in more than once, as it crept in in the middle of the names on Amendment No. 120A. My other amendments arc Nos. 199B and 199C, which I put down last night.
Lord Ennals: My Lords, both our names are down, jointly.
Lord Mottistone: My Lords, yes, I accept the noble Lord's name. Normally I do not readily accept names from the other side of the House because they tend to diminish my amendments. I am cautious about it. However, that is another matter.
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It is unfortunate that this happened. Thank heaven that I put the amendments down last night because otherwise they would not be there at all. As my noble friend the Minister knows, I normally like to tell her why I have put down amendments in order to give her and her officials a chance to understand their purpose and accept them. Unfortunately, my amendment has been grouped with the other amendment put down by the noble Lord, Lord Young. From my point of view, it is a disaster because it has given rise to the debate today instead of on Thursday when I would have been ready for it. So there is a bit of a muddle.
In passing, to cover the situation, I should say that Amendment No. 120A suffers from the same deficiencies in my terms as Amendment No. 198. My three amendments need to be inserted into Amendment No. 120A, if your Lordships decide to accept it as the alternative. I think that noble Lords will not do so because it seems to me that the difference between the two is nothing like as great as has been suggested. It is rather surprising that Amendment No. 120A was not put in the form of amendments to Amendment No. 198. The seven subsections are almost identical and it is muddling for those of us who are not in on the secret.
On Amendment No. 198, in my Amendment No. 198A I suggest seriously to the Government—and I hope that they will take it on board—that it is a good point that advice should be given on,
"the standards of clinical care for, and the access to, continuity and availability of services to, national health service patients".
As your Lordships know, my guidance in this matter is given by the National Schizophrenia Fellowship. One of the great worries of schizophrenics is that there tends to be a break in continuity of services. It is sometimes caused by the patients themselves because part of their illness causes them to ask for a break in continuity when it is not in their best interests. That is the conundrum.
The reason for putting "continuity" into subsection (1)(a) and (b) is entirely to make sure that it is not overlooked in those areas in which continuity of health services is vital to the people concerned, even if at a particular time they say they do not want it.
So far I have spoken to Amendments Nos. 198A and 199C. However, my Amendment No. 199B is of a slightly different nature. Amendment No. 120A has the same aim as Amendment No. 199B. Amendment No. 199B asks that as well as provision for a request to be made to the Clinical Standards Advisory Group by one or more health service bodies, there should also be an opportunity for a request to be made by reputable voluntary organisations.
The two voluntary organisations with which I am associated, the National Schizophrenia Fellowship and Sane, both have the highest quality of medical and psychiatric advice at hand in the advisory groups that work with them. It must not be thought that we are talking about any old voluntary organisation that will not be well supported. However, as I see it, there is no reason why what one might call a less well supported voluntary organisation should not make

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such a request. The advisory group could give that request the respect that it deserved. After giving a lot of thought to the wording of the measure, I decided it would be better to refer to voluntary organisations in general.
Whatever people may think about the advisory group, I believe it will be made up of a reputable body of people. My noble friend the Minister made that point. That advisory group will be able to pay such regard to these matters as is necessary. We should not limit these requests for services to be provided by the advisory group purely to health ministers and health service bodies. Even though I have not been able to brief my noble friend the Minister in advance, I hope she will give consideration to my amendment. If she cannot give me an immediate reply now, I hope she will take the amendments away, think about them and perhaps come back with them on Third Reading.
9.30 p.m.
Lord Ennals: My Lords, I hope that before the noble Lord sits down he will not mind changing his last sentence to refer to "our" amendments. The amendments stand in my name and I fully support them, Therefore, I wish them to be known as our amendments.
Lord Mottistone: My Lords, as I have not yet sat down I shall stand up again. I take that generosity exactly as it is given and I accept it on this one occasion.
Baroness Masham of Ilton: My Lords, I believe my co se is simpler as I am one of five people involved in an amendment. It is encouraging that there has been some progress but, like other supporters of the amendment, I feel that an independent body is needed. I shall give the House an example of bad patient access to the National Health Service which came my way on Sunday. I was telephoned in Yorkshire and told that the access for people in wheelchairs to the sexually transmitted diseases clinic at the Westminster Hospital had been closed. Many people who have AIDS have to use wheelchairs when they are ill because of weakness. The route they used to take was by lift but now the only route they have is outside and runs past the morgue. How insensitive and uncaring can management become?
This matter has made me feel strongly that there must be an independent body so there is no cover up and these cases do not occur. For people in wheelchairs not to have access to any clinic in a National Health Service hospital must be bad practice. Will the government amendment grouped with this amendment consider standards of food and of transport to hospitals and other needs? Will it have any teeth?
Lord Walton of Detchant: My Lords, I have considerable sympathy with the principles underlying the amendment which has been proposed by the "famous five". Having said that, I am concerned lest the issue of clinical care on the one hand be confused with the issue of management control and quality assurance on the other. My
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concern is that, as the noble Lord, Lord Young of Dartington, said, clinicians are dependent upon all of the services within the NHS. Many of those he specified in proposing the amendment clearly have an impact on the standard of clinical care which clinicians provide.
The word "clinical" implying in its broadest sense services which directly affect the care of patients and services directly available to patients, it seems to me that the monitoring of the standards of such clinical care should be separated from the monitoring of managerial standards, which are, as the noble Lord, Lord Hunter, said, the remit of the NHS management board.
It is for that reason that I have reservations about supporting Amendment No. 120A. Therefore I am very pleased that the Government arc proposing their own amendment, Amendment No. 198. I wholly agree with the noble Baroness, Lady Cox, and the noble Baroness, Lady Masham, to the effect that this body must have a degree of independence, not only from government but also an independence enabling it to take action on its own initiative and to sponsor and initiate investigations into standard clinical care.
Some small points appear to be missing from the government amendment. They were raised at meetings between the conference of colleges and the Secretary of State. For instance, preventive services are not mentioned. I believe that it was understood by the representatives of the colleges that these would be included in the remit of the proposed body and also that the term "clinical care" should be interpreted to include continuing care.
Secondly, no mention is made specifically of the colleges or other similar bodies being able to ask the Clinical Standards Advisory Group to intitate studies. However, I was pleased to hear the noble Baroness, Lady Hooper, in her opening statement say that they would be among the groups that would be in a position to initiate studies. Nevertheless, that is not included in the amendment. Thirdly, as the noble Lord, Lord Young of Dartington, said, it is true that the noble Lord, Lord McColl, said previously that the royal colleges already monitor standards. They monitor educational standards. They monitor the standards of appointments held by junior hospital staff in relation to their educational content. At present they do not monitor directly the standards of clinical care provided for patients, although clearly that is relevant. It is very important that this new body should have that role at the forefront of its activities. The issue will not be solved simply by including colleges with health service bodies—which they are not. The colleges point out that under subsection (6) of the government amendment they would have to reimburse all the costs involved, which gives them certain concerns.
I wish to support the view expressed by certain noble Lords that the reporting system must be an open one. I believe that the colleges understood from their discussions with the Secretary of State that the reports of the advisory group would normally be published and that his response to the reports of that group would also be published.

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With those reservations I wish to say how much I welcome the Government's initiative in establishing this body, but I do not believe that the amendment has quite got it right as yet.
Lord Kilmarnock: My Lords, as the only remaining member of the "famous five" who has not yet spoken perhaps I may be allowed to make a few remarks about the amendment. I cannot remember who first coined the phrase "famous five" but it is very appropriate. I believe that it is the first time that an amendment has had five sponsors in your Lordships' House. Perhaps it will become a precedent. The whole issue of quality assurance has united those who dislike the Bill very much, those who quite like it and even some who like it very much.
The noble Lord, Lord Mottistone, wondered why the noble Lord, Lord Young, had tabled this long amendment when it was so close to the Government's, but if he had read it carefully he would have seen that there were crucial differences. It would have been messy to take the Government's amendment and pepper it with a great number of minor amendments. That is not a discourtesy of the House; it is intended for clarification.
There are several respects in which the amendment is superior to the Government's version, some of which have already been mentioned. The first is the power to initiate. Unless the board, the group, or whatever it is to be called, can initiate inquiries, it will have no credibility whatsoever as an independent body. I discussed the matter the other day with an experienced regional manager who is sympathetic to the Bill. He told me that quality assurance must be systematic and comprehensive. That means that the board must have the power to initiate, otherwise there will be no belief in its independence. It is to the Government's advantage that it should be seen to be independent, otherwise it will simply be seen as the Government's poodle.
In her opening remarks the noble Baroness said that there was nothing to prevent the group from initiating activity. That provision is certainly not in the Bill. Subsection (1)(c) of the Government's amendment states that regulations may provide for other functions, but it does not state that the group can initiate activity. That is an important point which the noble Baroness might like to bear in mind when she winds up.
The noble Baroness also referred to the nominating bodies, but the Government's version does not set out any nominating bodies. They are left entirely to regulations, so there is no prescriptive right of any kind for consumers to nominate on to the Government's group. That is another weakness in the Government's version.
The amendment moved by the noble Lord, Lord Young, also incorporates a director, which the Government's version does not. That is important because if there is no director to select staff who are appropriate for the job, who will do it? Subsection (5)(b) of the government amendment states:
"[The Health Ministers] shall make available to the Advisory Group and to any committee or sub-committee thereof such staff
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and other services or facilities as are necessary to enable them to carry out their functions".
Who will those people be? They will probably be civil servants, but they are not the right people to do the job. We need other health professionals. If there is a director on the scene, he will ensure that the right people are contracted to do the job. That is a further weakness in the Government's proposals.
There is also the important point regarding the lack of an annual report to which the noble Baroness, Lady Cox, referred. We should know what is going on.
Finally, we come to the objections that have been advanced to the inclusion of the word "general". The Government's version refers to "Clinical Standards" and the version of the noble Lord, Lord Young, refers to "Clinical and General Standards". It has been implied that that might muddy the pure waters of clinical standards.
When I consulted the experienced manager the other day, I asked him what were the main points of quality assurance. He gave me nine: control of infection; investigations of deaths; investigations of accidents; readmission rates; use of blood; peri-operative deaths; waiting lists; medical audits; and hygiene, food, and so on. He then gave me a number of what he called softer points; namely, those concerning customer relations, courtesy and all the other slightly less definable matters which are also extremely important.
At least five of those quality assurance points probably fall within the generic term "clinical". But there are several others which do not and which, as the noble Lord, Lord Young, said, are equally important to the final delivery of treatment and care in a hospital.
I do not think that we need go to the stake for the word "general". However, the intention behind it—that the powers of the body should be to investigate all those matters, whether or not under the label of the word "general"—is an important matter which we ought to have in consideration. It is the whole delivery of the service of the hospital. Obviously the strict clinical standards are the starting point of the whole thing, but there are wider circles which develop from those clinical standards. It seems to me that they ought to be incorporated. On all those grounds, it seems to me that the amendment moved by the noble Lord, Lord Young of Dartington, is in many respects superior to the Government's version. I agree with him that we are grateful for that so far as it goes.
I should like to make a final point following from the remarks of the noble Lord, Lord Mottistone. Also grouped with these amendments are Amendments Nos. 199 to 204 which are relatively minor amendments to the Government's version. Owing to misprints, to which the noble Lord, Lord Mottistone, has already referred, this group has become detached from its sponsors, who are in fact myself, the noble Lord, Lord Ennals, and the noble Baroness, Lady Cox. Although I do not want to speak to those amendments tonight because I think that we should address the rival merits of the general packages advanced by the noble Lord, Lord Young, and by the Government, I want to give notice at this

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stage that we certainly reserve the right to return to the lesser amendments at a later stage when they are called, which of course cannot be today.
Having said that, I hope very much that the Minister will be able to be helpful to us this evening. I hope that she will take on board some of the concerns that have been expressed and perhaps even come some way to meet us on some of the points. In particular I attach importance to the power to initiate inquiries. That seems to me practically the most important power that this board wants and currently lacks.
9.45 p.m.
Lord Ennals: My Lords, before the noble Baroness winds up the debate, with the leave of the House, I should like to make a proposal. As the noble Lord, Lord Kilmarnock, said, the series of amendments to the government amendment have not been taken. We have not spoken directly to them. I hope that at the end of our debates, whether it is today or on Third Reading, we shall not be making a choice between the Government's proposals and those of the noble Lord, Lord Young.
There was a degree of flexibility in the Minister's first reply which I certainly warmly welcome, particularly concerning the possibility of initiating inquires. Perhaps I may ask the Minister whether it would be possible for there to be a meeting of minds or persons—of amenders—between now and Third Reading in the hope that we might be able to find some more areas of agreement before we come to a final date.
Baroness Hooper: My Lords, I understood that we were discussing the whole grouping now. Certainly my noble friend Lord Mottistone has spoken to a number of amendments in the group, as indeed have other noble Lords. Naturally, if I am unable to satisfy any areas of doubt in noble Lords' minds this evening and at this stage, in order to avoid a rediscussion of the whole issue on Third Reading I shall certainly be willing to have a meeting as the noble Lord suggests
With the leave of the House I shall attempt to respond to a number of the issues that have been raised, specifically perhaps on Amendments Nos. 198A, 199,199C, 199A and 200, which seek to define more precisely what is meant by the Clinical Standards Advisory Group's function of providing advice on standards of clinical care in the health service. I have tried to make clear that the remit of that group is to advise on all aspects of the provision of high quality clinical care. In saying that, I point to subsection (7) of the new clause proposed in government Amendment No. 198. That gives a very clear and wide definition of clinical care. It was on the issue of clinical care that the anxieties of the medical profession and the royal colleges were so forcefully expressed. It seems an appropriate as well as an agreed remit which gives the group the freedom to agree a programme of work with the health Ministers in the way that I have described.
I can certainly give the noble Lord, Lord Ennals, the assurance that he seeks that the group's activities will be able to extend to the quality of clinical
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care in the community health services. But a list of specific functions defining the group's activities in the way suggested by the amendments would add little to its freedom of action and independence and might restrict it by excluding subjects not specifically mentioned in the clause. I hope that the noble Lords will not feel it necessary to press the amendments.
Much has been said in the short debate about the independence, or lack of independence, of the body proposed in the government amendment. But I have very little doubt that, with a membership consisting of distinguished nominees of the medical, dental and nursing royal colleges—I emphasise that to my noble friend Lady Cox—as well as the chairman of the standing advisory committee, the group will have no hesitation in providing forthright independent advice on the issues which it is asked to tackle. Certainly, representatives of those groups to which I have referred have had no hesitation, without such a statutory request.
I can assure your Lordships that the group will receive the necessary funding to enable it to discharge its functions effectively. However, it will not wish just to be asked. We expect it to be active in proposing a work programme to the Secretary of State. The scope of the group's remit has deliberately been drawn to cover standards of clinical care rather than care in general.
The clause makes clear that that includes the questions of access to and availability of high standards of clinical care. It is the single most critical aspect of the service that the patient receives. I believe that it is right to allot this field to the group, leaving other more general aspects of care—for example, the quality of hospital food, to which the noble Baroness, Lady Masham, referred—to be tackled through the NHS management executive's continuing programme of quality improvement, to which I referred earlier.
The noble Lord, Lord Ennals, and my noble friend Lord Mottistone, asked about other groups being able to commission work in deciding that programme. As I said earlier, the programme would be agreed between the Clinical Standards Advisory Group and the health Ministers. In deciding that programme it will be free to consider suggestions for studies from any person or body or make suggestions itself. It was in that sense that I said there was nothing to prevent the group from initiating discussion or consideration of an issue.
I also mentioned the royal colleges as a valuable potential source of suggestions. Voluntary organisations are another source. That is the best way to ensure that the group has a manageable and effective programme of work.
The noble Lord, Lord Ennals, asked how the group would operate. Its working methods will evolve over time, without a doubt. The use of ad hoc teams has worked very well in the case of the health advisory service and may be appropriate in this case. As I have said, the programme will be discussed with Ministers. We shall need to have the group in place before we can finally fix the scale of its activity in any one year. I assure your Lordships that the group's activities will be fully funded and that appropriate staffing support will be provided.

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The £10 million to which I referred earlier was for a quality initiative to take place this year. The full cost of the group's functioning has yet to be determined and will depend largely on its work programme. I assure your Lordships that funding will be adequate for its purpose. Similarly, I cannot give firm figures for the number of visits that the group is likely to make. That would make no sense before at least the chairman is in place. However, I suspect that the amount will be more than the single figure sum suggested by the noble Lord.
The noble Lords, Lord Ennals and Lord Walton, asked whether the reports would be made public. We believe that the clinical standards advisory group will play a most constructive role in advising health Ministers and individual health service bodies on standards of care. Therefore, its report on specific and general areas will be of value to all parts of the health service. I expect that it will become normal practice for the reports to be published and made widely available in most cases, certainly as regards national issues. However, that matter must be decided between the group and the Minister or body commissioning a study.
The noble Lord, Lord Kilmarnock, quoted nine key areas. I assure him that, with the single exception of catering and hygiene standards, all the areas he mentioned will fall fairly and squarely on the remit of the group as defined in the Government's Amendment No. 198.
The noble Lord, Lord Young, asked about the ability to look at waiting lists. I assure him that the group will have the ability to look at access to services as well as at the services themselves. That is explicit on the face of the Government's amendment and therefore the group will be able to look at excessive waiting times.
I hope that I have touched upon and answered most of the points that were raised. I reiterate that it would not be helpful to spell out all the aspects of the advisory group's constitution and remit in excessive detail in the Bill because that would only restrict its activities in the long run. We have had a most useful discussion on this group of amendments. I hope that my comments have convinced the noble Lord, Lord Young of Dartington, and the co-movers of his amendment and that they will feel able to withdraw the amendment with the assurance that their anxieties are covered by the Government's amendment.
Lord Mottistone: My Lords, I do not believe that my amendments have been dealt with properly. I propose to speak to them and move them when we deal with the Bill on Thursday. I hope that arrangements can be made to accept that position.
Lord Kilmarnock: My Lords, before the Minister sits down, I wish to remind her of my question about her statement that there is nothing to prevent the group from initiating activity. I made the point that the Government's amendment contained nothing to that effect. Subsection (1)(c) of their Amendment No. 198 refers to:
"such other functions as may be prescribed by regulations".
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Other words then fell from the Minister's lips when she was winding up. She said that she assumed the group would be active in proposing a work programme to the Secretary of State. Is she prepared to put those two commitments onto the face of the Bill; that is, the right to initiate and the right to be active in proposing a programme to the Secretary of State? That is an important point. She has used both phrases and it would be most helpful if they could be put on the face of the Bill.
10 p.m.
Baroness Hooper: My Lords, with the leave of the House—our procedures on Report are becoming rather irregular—I have tried to convey that the best way forward is that the wording of the amendment should be as general as possible and as we have agreed it with the royal colleges. It is not necessary to do as the noble Lord suggests in order to meet his anxieties.
Lord Young of Dartington: My Lords, I very much welcome what the Minister said. It certainly went beyond what I was expecting or hoping for. I particularly welcome what I took to be an assurance that there will be further consideration and discussion before the Bill is finally put to bed on what action should be taken as regards the very difficult issues of monitoring, quality control and so on. I hope that as a result of that it will be possible for the Government to come back with a different amendment either when we reach Amendment No. 198 or at Third Reading. That would be very welcome. I hope that I am not expecting too much.
I should like to point out what seemed to be the implications of the attitude taken by the Minister, especially in her last remarks. Many of us, including the noble Lord. Lord Walton, have put a good deal of weight on the necessity, as we see it, for the board to have the power to initiate its own inquiries. If that could be written into the Bill, that alone would make a difference.
We have also placed a good deal of weight on the desirability of the board being able to make an annual report to Parliament. Again, that would make a difference.
The most important point still remains; that is, what are thought to be the boundaries of clinical care. My noble friend Lord Kilmarnock read out a list of matters which should be considered. If those could be brought within the purview of the board, then one would be very near to being satisfied about the matter.
The first function of the proposed group or board is that it will provide advice on standards of clinical care and access to and availability of services to National Health Service patients. It has never been clear whether the access and availability of services reference applies to clinical standards in the first place and whether or not the legal ejusdem generis rule applies. If it does not—and the Minister's remarks suggested that it does not—then the provision about access and availability of services could be taken out of that clause and put into a clause on its own. There would then be an extension

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of the functions of the board beyond clinical care but all related to it. We should then be sure as to how far the Government's remit to the board will extend.
If we go as far as that, then the question will rise as to what will be the name of the board or group. The name Clinical Advisory Group seems to be misleading. It would be much less misleading if it was ca led a clinical and general standards group or board.
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Those are the points implied by what has been ably expressed in the debate. We hope that the Government will come back later. In view of that I am prepared to withdraw the amendment, but if things do not work out then I shall bring it back again at Third Reading. However, we hope that it will be with us before that time in the form of a government amendment.
Noble Lords: No!
On Question, amendment negatived.
Clause 20 [Extension of function etc. of Audit Commission to cover the Health Service]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 121:
Page 21, line 11, at end insert:
("(1A) Section 27 of the Local Government Finance Act 1982 shall continue to apply to health service bodies.").
The noble Lord said: My Lords, Amendments Nos. 121 and 123 concern the scope of the work of the Audit Commission. The Bill very properly imports the Audit Commission into the scrutiny of its operations and extends the functions of that body to some extent to the National Health Service. As I pointed out on a previous occasion, Section 26 of the Local Government Finance Act 1982 will apply fully to the National Health Service.
Section 26 is the section under which the Audit Commission carries out what are generally called value for money studies. They are extremely useful but of limited scope. For example, the two which were initiated before the introduction of the Bill—although I understand work is in hand on them—concern energy use in hospitals (which is of great importance to the proper use of resources) and surgical dressings. Those arc useful but limited studies on specific topics.
The Bill as written largely prevents the operation of Section 27 of the Local Government Finance Act from applying to the health service. Section 27 gives the Audit Commission wider scope. It enables it to undertake studies on the impact of policy on the delivery of services. For example, the management arrangements may be scrutinised. In relation to schools the objective was to develop a set of indicators for monitoring performance under the new LMS regimes. The work of social services concentrated on the difficult area of monitoring performance in the care of children. Section 27 studies include reviews of auditors' project reports and management letters. They also focus on areas where the improvements achieved seem to be lower than expected.
From those few examples it will be seen that the Section 27 studies carried out by the Audit Commission are somewhat wider in scope than those carried out under Section 26. When I last raised the topic I ventured to suggest that it would be helpful for the Audit Commission to preserve its scope in that slightly wider field in relation to the health service, particularly at a time of far-ranging reform.
The Government replied. In fact, I am grateful to the noble Baroness, Lady Hooper, who wrote to me. The noble Lord, Lord Henley, in replying to the previous debate, made the same point; that the Government are not prepared for these powers to be construed as entitling the commission to question the merits of the policy objections of the Secretary of State. That was the phrase used:
"to question the merits of the policy objectives of the Secretary of State".
As a result of the previous debate I have taken that point on board. I am prepared to concede that it would not be appropriate for the Audit
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Commission to do that, However, it still seems to me appropriate that the Audit Commission should remain broadly with its Section 27 powers, which, incidentally, it will retain over the community care end of the Bill. Therefore, there will be a slight anomaly, which was pointed out by the noble Baroness, Lady Cox, last time round. The Audit Commission will have full Section 26 and Section 27 powers over community care but will only have, in effect, Section 26 powers over the NHS end of the Bill. That seems to be a slight anomaly.
It was also suggested to me when we debated this matter previously that, as the National Audit Office is the auditor of the National Health Service, it is not appropriate for the Audit Commission to be involved. My understanding of the role of the National Audit Office in relation to the NHS is that it audits the main accounts of the department. There seems to be no reason why the Audit Commission should not take over for the district and regional authorities.
The main point of the revised set of amendments which I have tabled is that I again seek to preserve the general scope of Section 27 in relation to the health service but I have accepted the Government's point that the main policy objectives, the broad thrust of the Government's policy, should not be questioned. That is embodied in Amendment No. 123, which states:
"Powers conferred by this subsection shall not be construed as entitling the Commission to question the merits of the policy objectives of the Secretary of State".
Incidentally, in Section 27 there is in any case a power for Ministers to veto publication of reports which they do not think are appropriate. Therefore, the Secretary of State has the last word. All I suggest is that he does not deprive himself of this valuable management tool and that the Section 27 powers are broadly extended to the National Health Service. I beg to move.
Lord Mottistone: My Lords, I do not see Amendment No. 123 as being consistent with what the noble Lord, Lord Kilmarnock, has been saying. What the amendment does, before it puts in the reference to policy, is to remove everything from line 14 to line 28 on page 82. It takes out paragraph 19(2) and the new subsection (6) from Section 27 to which the noble Lord was speaking.
That removes an amendment which was accepted in the Commons to give the Audit Commission, as we saw it, more rather than less power to look into the effect of Government's statutory provisions, directions and guidance from the Secretary of State. It seems to us—that is, myself and my advisers from the National Schizophrenic Fellowship—that there is a great deal to be said for the commission having the power which Mr. Andrew Mitchell, who moved the amendment in the Commons, spent a long time explaining was a good way of strengthening the powers of the Audit Commission.
The Audit Commission is much admired in the caring world. It can be said that its report Making a

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Reality, of Community Care published in 1986 led to the Griffiths Report and in turn to this part of the Bill. On the whole, I strongly discourage support for Amendment No. 123. In the meantime I recommend the noble Lords who tabled it to take another look before striking out this rather important part or the Bill.
10.15 p.m.
Lord Henley: My Lords, I shall deal first with the anomaly which, according to the noble Lord, Lord Kilmarnock, exists between Part III and the health side of the Bill. I thought that I had made myself clear at Committee stage: if I did not, I do so now. There is no anomaly here. The community care services are managed by the local authorities. At the end of the day the NHS is directly accountable to Parliament through the Secretary of State. That is the key difference. Local authorities and the NHS are very different animals.
During our debate in Committee noble Lords expressed some uncertainty about what we are aiming to achieve in the provisions in Schedule 4 to the Bill relating to value-for-money studies. I shall seek to clarify this. In relation to local government, the commission has two distinct powers on value for money. One is contained in Section 26 of the Local Government Finance Act 1982. This requires the commission to undertake or promote studies into economy, efficiency and effectiveness. The Bill applies this provision in full to the commission's new role in the National Health Service.
The other power is the one in Section 27 of the 1982 Act which allows the commission to report on the impact of statutes, directions and guidance. Initially, we simply excluded this provision from the new arrangements for NHS audit because of the major difference between the accountability of local authorities to their electorates and the position in the NHS where it is Parliament which holds the Government to account on its policies. But in another place we did accept that we could strengthen the commission's hand by making it explicit that it could take full account of the implementation of statutes, directions and guidance, subject to its not questioning the policy objectives of the Secretary of State.
That is the provision contained in paragraph 19 of Schedule 4. This was agreed by all those concerned, including the commission, as reflecting a proper balance and the reality of the constitutional position. It also mirrors professional audit practice. It is the auditor's role to report on regularity and value for money in the implementation of policy rather than dispute the underlying objectives.
Let there be no doubt about the importance we attach to value-for-money studies. Indeed, the whole point of the transfer of responsibility to the Audit Commission is to put more emphasis on value for money and to make this work independent of government. We shall look to the commission to be vigorous and forthright in carrying out its new
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responsibilities, backed by the very considerable armoury of powers which the Bill contains.
Turning to the amendments of the noble Lord, Lord Kilmarnock, I recognise that he has reflected on the Government's position and has tried to find a way forward in the constructive spirit which we have come to expect from the noble Lord. I regret to say that his proposition will simply not work. It is inconsistent, on the one hand, to allow the commission to report on the impact of government policy and, on the other, to say that policy objectives shall not be questioned. The two are inseparable.
I do not believe that we should saddle the commission with a statutory basis that leaves so much room for doubt and dispute. What we want is a clear-cut power for the commission to take full account in its reports of the implementation of statutes, directions and guidance in a way which does not question the underlying policy objectives.
I hope that the noble Lord will accept that the Bill promotes rather than hinders the commission's essential value-for-money role and that he will therefore not press his amendments.
Lord Kilmarnock: My Lords, I am very grateful to the noble Lord, Lord Henley, for his reply. I say to the noble Lord, Lord Mottistone, that Amendments Nos. 121 and 123 had to be read together. The first restores the full power of Section 27 to the audit of health service bodies. Amendment No. 123 then restricted that power in the way that I described; in other words, inhibiting the questioning of the merits of policy objectives of the Secretary of State. In fact it would not have undermined the compromise that was achieved by Mr. Andrew Mitchell in another place but would have slightly extended it. That is my understanding of what the effect of these amendments would have been. So the noble Lord's criticism of the amendment on those grounds does not stand up.
Turning to the remarks of the noble Lord, Lord Henley, I should have thought there was somewhere a halfway house in which Section 27 studies could be made. After all, they are objective studies without overtly questioning policy objectives. If the Government then come to reflect on their policy objectives, that would be another matter, and I should have thought would have been quite a healthy thing for them to do.
In view of what the noble Lord said and of what has already been achieved by the amendment in another place, I shall not press this matter further and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 [Amendments of Part III of the Local Government Finance Act 1982]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 122:
Page 80, line 7, leave out ("To the extent that") and insert ("In such circumstances and to such extent as").
The noble Lord said: My Lords, I beg to move Amendment No. 122 and will also speak to Amendments Nos. 124 to 129 inclusive. These amendments to the English and Scottish provisions of the Bill dealing with the statutory audit do two things. First, they phase the coming into effect of the audit provisions. In order to ensure continuity of the expertise, the Bill provides for the transfer to the English Audit Commission and the Scottish Accounts Commission of the civil servants working on National Health Service statutory audit. At present the provisions dealing with the transfer of staff cannot come into effect until the dates on which the two commissions take over the work. In practice, we want job offers to be issued beforehand, so that affected staff have time to consider them and, if they accept, transfer to their new employer on or before the operative date. Amendments Nos. 124 to 127 pave the way for that transfer.
The remaining amendments deal with the frequency of audit of individual GP practice funds. In general, we do not think it will be necessary for the auditor to do a detailed audit of the relevant accounts of each fund holder more frequently than once every three years because the accounts of every fund holder will be summarised and included in the accounts of the relevant FHSA or health board. That is why the Bill at present says,
"To the extent that regulations made by the Secretary of State so provide, this Part of this Act shall not apply to the accounts for any year of the members of a recognised fund-holding practice if those accounts are submittted to a Family Health Services Authority and summarised in that Authority's accounts".
But we also want to allow the auditor, if he is concerned about the financial affairs of an individual fund holding practice, to do a detailed audit more frequently than once every three years. These are the "circumstances" referred to in Amendments Nos. 122 and 129. I have no reason to think that it will often be necessary for the auditor to intervene in this way, but it is right that the Bill should make proper provision for the auditor to investigate any cases of concern about the spending of public money.
On Question, amendment agreed to.
[Amendment No. 123 not moved.]
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 124 and 125:
Page, 82, line 43, leave out ("section 20 or) and insert ("paragraph 22 of Schedule 4 to").
Page 83, line 4, leave out ("section 20 or) and insert ("paragraph 22 of Schedule 4 to").
On Question, amendments agreed to.
Clause 35 [Accounts and audit of NHS trusts and fund-holding practices]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 126:
Page 43, line 30, leave out ("subsection (1) above") and insert ("paragraph 14 of Schedule 7 to this Act").
On Question, amendment agreed to.
Schedule 7 [Amendments relating to Audit of Accounts of Scottish Health Service Bodies]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 127 to 129:
Page 93, line 16, after ("or) insert ("paragraph 3(3) of").
Page 95, line 24, leave out ("(1A)") and insert ("(1B)").
Page 95, line 25, leave out ("1B) To the extent that") and insert "(1C) In such circumstances and to such extent as").
On Question, amendments agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 129A:
Insert the following new clause:
("Schemes for meeting losses and liabilities etc. of certain health service bodies
(" .—(1) The Secretary of State may by regulations made with the consent of the Treasury establish a scheme whereby any of the bodies specified in subsection (2) below may make provision to meet—

(a) expenses arising from any loss of or damage to their property; and

(b) liabilities to third parties for loss, damage or injury arising out of the carrying out of the functions of the bodies concerned.

(2) The bodies referred to in subsection (1) above are—

(a) health authorities;

(b) NHS trusts; and

(c) the Public Health Laboratory Service Board;

but a scheme under this section may limit the class or description of bodies which are eligible to participate in it.
(3) Without prejudice to the generality of the power conferred by subsection (1) above, a scheme under this section may—

(a) provide for the scheme to be administered by the Secretary of State or by a health authority of NHS trust specified in the scheme;

(b) require any body which participates in the scheme to make payments in accordance with the scheme; and

(c) provide for the making of payments for the purposes of the scheme of moneys provided by Parliament.

(4) Without prejudice to any other power of direction conferred on the Secretary of State, if the Secretary of State so directs, a body which is eligible to participate in a scheme shall do so.
(5) Neither the Secretary of State nor any health authority or NHS trust administering a scheme under this section shall, by virtue of their activities under the scheme, be regarded as carrying on insurance business for the purposes of the Insurance Companies Act 1982.").
The noble Baroness said: My Lords, in moving Amendment No. 129A I shall speak also to No. 138A. These amendments flow essentially from the establishment of National Health Service trusts. They will give the Secretary of State power to make regulations to enable him, or regions acting under delegated powers, to meet the liabilities of trusts or other defined health service bodies, and for the Secretary of State for Scotland to do likewise.
As your Lordships will be aware, health authorities currently bear their own risks and do not insure. Many regions run arrangements whereby the costs of particularly large clinical negligence claims are met from funds held back by the regions, thus spreading the cost between districts. In Scotland and Wales pooling arrangements to share the costs of high value liabilities are operated by the Secretary of State. These arrangements will, in all probability, take on more significance in future as health authorities will be responsible for meeting liabilities

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arising from the medical negligence of their employees.
The National Health Service trusts will of course be liable to meet the costs of any claim against them. As the legislation stands they would, however, not be able to participate in existing pooling arrangements or any other arrangements that might be devised for sharing the risk of major claims between health authorities. There is no power for the Secretary of State or the regions to meet the liabilities of trusts in return for the payment of agreed contributions from them.
Trusts would effectively have to meet their own liabilities without the option of spreading the risk. We do not believe that it would be right for trusts, which will remain fully part of the National Health Service, to have to meet liabilities on a different basis from health authorities. These amendments therefore give the Secretary of State the necessary power to establish schemes for meeting the liabilities of defined health service bodies, including trusts. I commend both these amendments to your Lordships. I beg to move.
On Question, amendment agreed to.
Lord Ennals Lord Ennals moved Amendment No. 130:
Before Clause 21, insert the following new clause:
("Exercise of primary functions with regard to homelessness
. In Section 72 of the Housing Act 1985 (which provides that, on a request by a local housing authority for assistance in the discharge of certain statutory functions relating to homelessness, or threatened homelessness, a body of a description specified in the paragraph shall cooperate in rendering such assistance as is reasonable in the circumstances) there shall be inserted the following paragraph—
"(aa) request a family health services authority or district health authority within the meaning of the National Health Service and Community Care Act 1990 to exercise any of their primary functions under that Act with special regard to homeless persons and persons threatened with homelessness.".").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Marshalled List. This new clause seeks to provide a more effective statutory framework for the provision of primary health care for the homeless. It places a statutory duty on health authorities and FHSAs to co-operate with local housing authorities in the care of the homeless. This will be brought about by amending Section 72 of the Housing Act 1985 which already exists to secure the co-operation of a range of other bodies and authorities with local housing authorities.
Under that clause, for example, social services departments are bound to help if a local housing authority makes a request. This amendment extends that precedent to the provision of health care. Under the Housing Act 1985 local authorities are under a duty to find suitable accommodation for homeless families. In 1988 local authorities in England accepted over 117,000 households as homeless under the terms of the 1985 Act, which Shelter estimated as translating into 337,000 people. This is the only official measure of homelessness,and it is generally agreed that it is simply the tip of the iceberg.
In 1988 local authorities actually turned away more families than they accepted under the relatively strict legislative definition of homelessness. The truth is that no one knows for sure how many people are homeless in the United Kingdom. Shelter puts the figure at over 500,000—half a million—while surveys carried out by the Salvation Army put the figure at 75,000 in London alone, Whatever the figure, everyone agrees that it is growing. I think there are signs that it is going to grow very seriously.
What can be done? The amendment is deliberately non-prescriptive as to the action that might be taken to improve health care services for the homeless. This is not because of a lack of ideas. The few specialist units already working with the homeless have provided many lessons such as using patient-held records to improve continuity of care and arranging special surgeries for homeless families. Health care professionals have also put forward positive proposals such as DHAs and FHSAs establishing objectives for monitoring and delivering health care to homeless families with a homeless persons' liaison officer in each locality.
The amendment does not prescribe any of those possible solutions because it recognises that in different cases different solutions may be necessary. Without the amendment it is doubtful whether such collaboration would be forthcoming in the new market-drive NHS. Pressures on health authorities, in particular, are likely to force them back to an old style curative model, neglecting policies of health promotion and illness prevention and forgetting completely the needs of the homeless. It would be wrong if the Bill were allowed on to the statute book without recognising that one of the major causes and consequences of ill health is homelessness, a scourge that is rapidly growing in our society. I beg to move.
10.30 p.m.
Baroness Blatch: My Lords, homeless people have exactly the same rights as anybody else to health and social care services and they too will benefit from the general improvement in services which will flow from the radical changes introduced by the Bill and from other recent measures.
However, we are conscious that some homeless people will have difficulty in gaining access to services. We know that some need to be encouraged to make full use of the services which are already available to them. We hope that the new fee payable to GPs under their revised contract for registering and giving health checks to new patients will encourage them to register homeless people as patients. The White Paper Promoting Better Health also lays a specific responsibility on family practitioner committees to assess the health needs of all their residents and actively to develop services to meet those needs. In areas where there are homeless people they will need to take account of their special requirements.
The pivotal role given by the Bill to district health authorities will also lead to specific improvements in services for homeless people. The Bill gives district health authorities specific responsibility for the provision of a comprehensive range of high quality services for all their population. That will, of course,

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include homeless people. In addition, the community care proposals in the Bill will ensure a better quality of care for all service users.
Those improvements are expected to take effect over the next few years. But the Government have already taken concrete action to help homeless people. They have set up the emergency assistance scheme for rough sleepers in severe weather. That scheme, which has already proved its worth, provides emergency shelter and food in harsh weather and is administered on behalf of the Government by the Single Homeless in London organisation.
There has been particular concern in recent years about how to make effective arrangements for the continuing care of mentally ill people being treated in the community. The plight of homeless mentally ill people has been singled out for particular attention. Ministers and officials at the Department of Health are currently in discussion with health and social services authorities and voluntary bodies in central London, where there is a particular concentration of homeless mentally ill people, with a view to identifying practical steps to get them the support they need. We hope that any approach developed for central London will prove a useful model for other parts of the country.
Given that all citizens of this country have full right of access to services, the Government can see no need for any specific mention of the entitlement to health care of homeless people to be enshrined in legislation. In the light of that explanation, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Ennals: My Lords, the Minister is right. Homeless people have the same rights as others: the problem is that they do not have the same opportunities. I am afraid that for many years the Government have said that they recognise the problem of homelessness but have not taken action to deal with it. Homelessness has worsened year after year.
I do not take seriously the Minister's optimistic hopes that somehow things will come right in the end. They come right only when some action is taken which leads to their coming right. That is what the amendment is designed to do. It will not reach the statute book. I beg leave to withdraw the amendment, not because I am satisfied with the Minister's answer but because, having put the case and heard the answer, I do not want to go any further.
Amendment, by leave, withdrawn.
[Amendment No. 131 not moved.]
Lord Ennals Lord Ennals moved Amendment No. 132:
After Clause 21, insert the following new clause:
("Services for the elderly and disabled
At the end of section 56 of the principal Act (which enables the Secretary of State to make special arrangements to secure the adequate provision of services) there shall be added—
"(2) In performing his duties under this section, the Secretary of State shall have special regard to the provision of services for elderly and disabled persons." ").
The noble Lord said: My Lords, this clause provides a safeguard against poor service provision and gives the Secretary of State special powers to correct situations where services are deemed to be inadequate. The background is that in the new market-driven National Health Service the elderly and disabled, whose chronic conditions are unpredictable and cannot easily be costed, are likely to be among the first to experience any problems which might occur. It seems only right, therefore, that the Secretary of State should have specific regard to protecting adequate service provision for them. That is what the amendment is designed to do.
The contracting system may lead to more rigid discharge policies by hospitals, with the effect that patients are discharged quicker and sicker. Elderly patients especially, who take longer to recover from hospital treatment, may find themselves in the community with inadequate support.
It is interesting that in the East Anglian simulation exercise, to which I have referred on a number of occasions, one of the causes of the market crash on the third day was the complete swamping of community services by patients discharged too early. I fear that that was an all too true prediction. Although it is not within the scope of the Bill, this new clause would also have the advantage of plugging any gaps in services caused by the new GP contract. In short, for any period of change there is bound to be some turbulence. It seems only right that an amendment of this kind should be written into the Bill as a safeguard, providing a safety net for some of the most vulnerable members of our community. I beg to move.
Lord Henley: My Lords, we share the noble Lord's view of the importance of services for elderly and disabled people which, as he would be one of the first to point out, do not have the glamour that certain other services possess. However, this amendment would provide a fairly poor mechanism for improving them. For a start, services would have to reach a demonstrably inadequate state before action would be taken to improve them.
As with other services in the National Health Service, the level of provision is and will remain a matter for individual health authorities to determine in the light of local needs and priorities and competing claims on resources. In planning these services, we expect health authorities to work closely with FPCs. This collaboration should be improved by the changes which we are introducing to FPCs to ensure that the best possible services are provided to local people.
Elderly people are already recognised as a priority group. Thus health authorities are required when preparing their service provision plans to give special consideration to their needs. The level of service to be provided is for each health authority to decide.
Under the community care provisions in this Bill, health authorities and local authorities will be required to plan jointly their service provision for all people who require social and/or medical care. FHSAs will be involved in this process. In drawing up these plans health and local authortities will have to take into consideration the needs of the local

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population and demographic factors such as the ageing population. We therefore already have a major programme of action in hand to improve services to people in these groups. No doubt we have a great deal of further debate still to come on community care. I hope in the meantime that the noble Lord will withdraw his amendment.
Lord Ennals: My Lords, it has been noted that during the Committee and Report stages I have endeavoured to ensure that there is written into the Bill the awareness of the Government and Parliament that we need to make special provision for the elderly and disabled and for other underprivileged groups. Successive Ministers have given reassuring answers. I have always had to say that I was not satisfied with those reassuring answers and that is what I say now. In a year's time, when the Bill comes into operation, we shall see whether the needs of these people, whether they be homeless, elderly or disabled, are better looked after or worse. I have my fears, but 1 shall not press the amendment to a vote tonight. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Walton of Detchant Lord Walton of Detchant moved Amendment No. 132A:
Before Clause 22, insert the following new clause:
("Grants for health care research
—(1) Section 97 of the principal Act shall be amended in accordance with this section.
(2) After subsection (1) there shall be inserted the following subsections—

"(1A) The Secretary of State shall make grants to each relevant authority to be used solely for the provision of postgraduate, vocational and continuing education programmes for medical and dental practitioners, nurses and other health care professionals.

(1B) The Secretary of State shall maintain a fund for the purposes of making grants to any hospital or other NHS establishment where research is undertaken using funds provided by a registered charity." ").

The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendment No. 142A. Those two amendments stand in my name and that of the noble Baroness, Lady Robson of Kiddington. I shall be brief because in Committee the noble Baroness, Lady Hooper, gave an assurance that finds available to health authorities for the provision of postgraduate, vocational and continuing education programmes would be protected. Considerable concern had been expressed over the fact that in the recent past certain health authorities, finding themselves short of funds to fulfil their obligations, had withdrawn support for a number of those activities for all professions. I have to say that there is still considerable concern on the part of the medical profession and on the part of postgraduate deans that funds which are available for the continuing postgraduate and vocational education of medical practitioners may in the future be under similar threat. I trust that we can have a similar assurance from the noble Baroness that these funds will in future be protected.
A second issue which is particularly related to Amendment No. 142A and to the proposed new
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Subsection (2)(1B) of Amendment 132A relates to research in the National Health Service. One of the fundamental features of our National Health Service and its support for medical research is that the NHS provides the environment, the situation and the facilities in which medical research can be carried out and in which the Medical Research Council and the research granting charities provide the funds for the direct costs of undertaking that research. However, there have been circumstances where health authorities have found themselves in great difficulty in accepting much needed funds to support research and where research funds have been perforce diverted into providing clinical services to patients and patient care for which they were not in the first instance intended.
The hope in the proposed new Subsection (2)(1B) of Amendment No. 132A is that the Secretary of State shall maintain a fund to provide the infrastructure against which the funds from charities and the research councils can properly be used for the support of research, which is what they were provided for. When the Secretary of State met the Select Committee on Science and Technology of this House he gave an assurance that the Government's commitment to the support of research in the National Health Service was absolute. We trust that his commitment will extend to the support of this particular provision. We also hope that in accordance with Amendment No. 142A the service increment for teaching might perhaps more properly be called—this has been the case in effect for a good many years—a service increment for teaching and research. I beg to move.
Baroness Robson of Kiddington: My Lords, in Committee I supported the noble Lord, Lord Walton, in an amendment similar to this one except that it did not include the proposed new Subsection (2)(1B) in Amendment No. 132A. I raised that issue because I am concerned about the amount of money devoted to medical research in the present day. At least 50 per cent. of the money devoted to research is raised by medical research charities. The noble Lord, Lord Walton, referred to the fact that the charities are having to spend a large amount of their funds not on pure research or clinical research but on paying for back-up services in National Health Service hospitals.
One of the biggest medical charities has carried out an analysis of its expenditure in two big London teaching hospitals. I referred to this in Committee. The expenditure comes to somewhere between 35 and 40 per cent. of its funds. The people who donate money to the research charities do not expect that money to be spent on back-up services. Moreover, we spend less on research than most other countries in the world. It is important that we use every penny that is raised by the medical research charities for research and not for back-up services.
This amendment came up at 10.50 p.m. at Committee stage. The noble Lord, Lord Walton, and I put it down again for Report stage in the hope that it might come up a little earlier. Well, it is five minutes earlier, but that does not make much difference. It is a desperately important amendment

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for the future of the National Health Service. It is a tragedy that it has again come up so late in the day.
Regarding the assurances that the noble Lord, Lord Walton, mentioned with respect to postgraduate vocational training, I hope that the noble Baroness will be able to assure us that the Secretary of State will maintain a fund for the purposes of making grants to other NHS establishments where research is undertaken by medical charities. That would not entail an enormous sum of money but it would make all the difference to the way in which the research charities could spend their money. It would also help to improve the research facilities that we so desparately need in the National Health Service.
10.45 p.m.
Baroness McFarlane of Llandaff: My Lords, at this time of night I do not wish to prolong the debate by repeating what has already been said so adequately, but I wish to support these two amendments. I see them as particularly important amendments. In particular I should like to underline the reference in subsection (1A) of Amendment No. 132A to the need to support the provision of postgraduate, vocational and continuing education programmes.
In the nursing profession there has been ample evidence of the way in which authorities cut back on the funding of post-basic education. This is leading to severe problems in manpower provision in the health service. I am thinking particularly of the cutting back on funding education for community nursing—district nurses and health visitors—and also the crucial under-funding for paediatric intensive care nurses of which we have been made so very much aware. Therefore I wish to add my support to the amendments.
Baroness Hooper: My Lords—
Lord Peston: My Lords, the noble Baroness will not wish to speak before I say simply that we support the amendments. I am not clear that they are of equal importance, but I should particularly like to agree with the noble Baroness, Lady McFarlane, in emphasising the importance of continuing education. I do not seek to undermine the importance of research, but nothing can be more important than that the Secretary of State should see to it that vocational and continuing education for all health care professionals is an obligatory part of the NHS in whatever new form it takes.
Baroness Hooper: My Lords, when we discussed a similar amendment at Committee stage I explained that the Government were looking actively at the funding of continuing and postgraduate education for the caring profession and that a group of interested professionals led by the Chief Medical Officer had helped in those deliberations. I also explained that we had already decided that there should be a clearly defined budget for postgraduate and continuing education and that we were examining further how best that budget should be
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managed. No amendment is needed to operate such a budget. The powers under Section 97 of the National Health Service Act 1977 are sufficient to allow the funds to be separately identified and managed at both regional and district level.
Your Lordships should also be aware that the Government are already consulting research interests about the establishment of a fund to be used for supporting charitably funded research. The fund would be available to those hospitals which do not have access to the service increment for teaching (SIFT), which since 1st April last year will also cover the service costs of research. The membership of the Association of Medical Research Charities on the steering group on undergraduate medical and dental education in the next phases of its work also shows our commitment to working constructively with the charitable sector, which makes such an important contribution in this area. I am happy to underline that point again. Again, Section 97 powers could be used to operate such a scheme. I hope that that goes some way to reassure the noble Baroness, Lady Robson.
Because the amendment commits the Government to a single fund for all hospitals when the problem of service costs of research is peculiar to non-teaching hospitals, we find that it is in that sense too prescriptive. In addition, it might cast doubt on the use of the power in Section 97 to which I have referred, which has been used for many years for the general funding of the health authorities and for the payment of sums to health authorities for specific purposes.
Turning to the second amendment, hospitals are protected from the costs of medical and dental education through the SIFT programme. This was increased from 1st April this year to meet 100 per cent. of the cost instead of the previous 75 per cent. of the average excess costs of teaching hospitals, including those attributable to research. The increase in SIFT this year of £26 million brings the total to £343 million.
The steering group on undergraduate medical and dental education made some useful recommendations which the Government have accepted and, as a result, SIFT will be clearly targeted to supporting undergraduate medical and dental education and research. That fulfils the aim of the second amendment, which we also believe to be rather too specific.
The amendment also seeks to make the regional health authority give everyone responsible for research, even in non-teaching hospitals, a slice of the cake. Yet we are looking at a quite separate arrangement for the non-teaching hospitals and this amendment would make us fund them twice. Because of the way SIFT is calculated, it would not make sense simply to increase its value and support all research anywhere from it: we strongly believe that we need the two separate schemes.
I hope that I have been able to make it clear that we share the same objects of supporting education and training, both undergraduate and postgraduate, and research. I hope that the noble Lord will not feel it necessary to press the amendment.
Lard Walton of Detchant: My Lords, in the light of the clear assurances given by the noble Baroness, for which I am most grateful—I am sure that the noble Baroness, Lady Robson, shares my view—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 [Distribution of general medical services]:
Lord Ennals Lord Ennals moved Amendment No. 133:
Page 23, line 32, leave out ("for") and insert ("to fill a vacancy created by the withdrawal from the medical list of a single-handed practitioner in").
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 134 to 137.
The issue is simple. It is a question of the powers of family health service authorities in selecting medical practitioners. Clause 22(2A) states:
"If in the opinion of the Medical Practices Committee, a medical practitioner is required for a particular part of the locality of a Family Health Services Authority, then, in such circumstances, as may be prescribed,—
(a) the Authority (instead of the Committee) shall, in accordance with regulations, select the medical practitioner whose application they wish to be considered by the Committee."
When that issue was debated in Committee, I believe that the Minister said in reply that the power would be used to fill a vacancy created by the withdrawal from the medical list of a single-handed practitioner and that that was not a general power which the Government wished to transfer from the Medical Practices Committee to the FHSA. I wish to write into the Bill what I think was an assurance that was given at that time. If that were done, I think that it would be of considerable assurance to the medical profession. I beg to move.
Baroness Blatch: My Lords, I shall reply to Amendment No. 133 and my noble friend Lord Sanderson of Bowden will speak to Amendments Nos. 134 to 137 inclusive. We understand the motives behind this amendment but it would not achieve what the noble Lord has in mind. There is a practical difficulty. We all know what we mean by "single-handed" but there is no definition of it in the 1977 National Health Service Act, nor indeed in the relevant regulations.
There are some occasions when a vacancy which is, to all intents and purposes, single-handed, has actually been shared, for example, by a husband and wife or by more than one part-time doctor. If this amendment were to be accepted, the FHSA would not be able to select the doctor to fill such a vacancy. In addition, when the Medical Practices Committee creates a new single-handed practice vacancy, the FHSA would not be able to select the doctor to fill it. I am sure that the noble Lord does not intend that that should happen.
I believe that there is no difference between us. The Bill will not permit FHSAs to appoint doctors seeking to set up new practices from scratch, not in
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response to an advertisement. I can inform the noble Lord that when the regulations are made they will define FHSAs' powers and will specifically exclude partnership vacancies. I can also undertake that we shall consult the Medical Practices Committee and representatives of the profession on these regulations in due course. I cannot commend this amendment to the House.
Lord Ennals: My Lords, I quite understand why the Minister could not do so. It is an unsatisfactory amendment. I was just doing my best. That is all it was. The Minister has convinced me that the amendment in its present form is not satisfactory; but she has gone further than that. She has given two very important assurances which I think will be very satisfactory to the medical profession. In particular I am glad that there will be consultation before the regulations are drafted. With that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 38 [Distribution of general medical services]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 134:
Page 45, line 10, leave out ("Committee") and insert ("Secretary of State").
The noble Lord said: My Lords, this amendment is grouped with Amendments Nos. 135, 136 and 137. These amendments bring the Scottish Clause 38 into line with the English and Welsh Clause 22, which was amended in a similar way at Committee stage. They provide that the Secretary of State rather than the Scottish Medical Practices Committee should handle a doctor's appeal on a point of law against a health board decision not to select him for a GP practice vacancy. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 135 to 137:
Page 45, line 12, leave out ("Committee allow an appeal under paragraph (c) they") and insert ("Secretary of State allows an appeal under paragraph (c) he").
Page 45, line 43, leave out ("for") and insert ("after").
Page 45, line 44, leave out from ("be") to ("and") in line 45 and insert ("inserted").
On Question, amendments agreed to.
Clause 23 [Limitations on right to be included in list of dental practitioners]:
[Amendment No. 138 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 138A:
After Clause 39, insert the following new clause:
("Schemes for meeting losses and liabilities etc. of certain health service bodies
. After section 85A of the 1978 Act there shall be inserted the following section:—
"Schemes for meeting losses and liabilities etc. of certain health service bodies
85B.—(1) The Secretary of State may by regulations made with the consent of the Treasury establish a scheme whereby any of the bodies mentioned in subsection (2) may make provision to meet—

(a) expenses arising from any loss of or damage to their property; and

(b) liabilities to third parties for loss, damage or injury arising out of the carrying out of the functions of the bodies concerned.

(2) The bodies referred to in subsection (1) are—

(a) Health Boards;

(b) the Agency;

(c) a State Hospital Management Committee constituted under section 91 of the Mental Health (Scotland) Act 1984; and

(d) NHS trusts,

but a scheme under this section may limit the class or description of bodies which are eligible to participate in it.
(3) Without prejudice to the generality of the power conferred by subsection (1), a scheme under this section may—

(a) provide for the scheme to be administered by the Secretary of State, the Agency, or a Health Board or NHS trust specified in the scheme;

(b) require any body which participates in the scheme to make payments in accordance with the scheme; and

(c) provide for the making of payments for the purposes of the scheme out of money provided by Parliament.

(4) Without prejudice to any other power of direction conferred on the Secretary of State, if the Secretary of State so directs, any body which is eligible to participate in a scheme shall do.
(5) Neither the Secretary of State nor any body administering a scheme under this section shall, by virtue of their activities under the scheme, be regarded as carrying on insurance business for the purposes of the Insurance Companies Act 1982.")."
On Question, amendment agreed to.
Clause 24 [Transfer to DHA of certain functions relating to private patients]:
Lord Ennals Lord Ennals had given notice of his intention to move Amendment No. 139:
Page 25, line 30, at end insert—
("(d) Notwithstanding paragraph (a) above, a District or Special Health Authority shall not make available accommodation and services for private patients which exceeds one quarter of all such accommodation and services at a hospital or hospitals for which they have a responsibility.")
The noble Lord said: My Lords, this is another simple amendment which is tabled in my name. It is clear—I do not think that any of us would doubt it—that the National Health Service has a positive duty to seek in every way that it can to eliminate racial discrimination.
Lord Peston: My Lords, perhaps I may interrupt the noble Lord. I think that we have got the amendments out of order. It was not intended to move Amendment No. 139.
Lord Ennals: My Lords, in that case Amendment No. 139 is not moved.
[Amendment No. 139 not moved.]
[Amendments Nos. 140 and 140A not moved.]
11 p.m.
Lord Ennals Lord Ennals moved Amendment No. 141:
After Clause 24, insert the following new clause:
("Exercise of functions
. It shall be a duty of every health authority, Family Health Service Authority and National Health Service Trust to make appropriate arrangements with a view to securing that their various functions are carried out with due regard to the need—

(a) to eliminate unlawful racial discrimination: and

(b) to promote equality of opportunity. and good relations between persons of different racial groups.").

The noble Lord said: My Lords, as I was saying, before I was so rudely but quite properly interrupted, it is clear that the National Health Service has a positive duty to eliminate racial discrimination and to promote racial equality. I have never produced such unity in the House by anything that I have ever said before.
At the time when the Bill was published, the Commission for Racial Equality was anxious that this concept should be written into the Bill, and I warmly agree. The CRE's social policy division director, Jean Coussins, said:
"We said in our response to the White Papers which preceded this Bill that inequalities and discrimination within the health service and community care provision, in both employment and service delivery, needed to be explicitly addressed. This has not happened. The Government should take the opportunity of fresh legislation to make it absolutely clear that their aims to improve patient care and value for money apply equally to all citizens".
I am sure that the Government will say—and they are right—that that is their intention. As we have argued on a number of other issues, this is so fundamental, so important to our society, that in my opinion—and I know that others support it—that simple view should be written on to the face of the Bill.
In proposing the amendment, there has been consultation with and approval by the National Association of Health Authorities, the Overseas Doctors Association, the King's Fund Task Force on Ethnic Minority Health, the National Council for Voluntary Organisations and other health authority and local authority organisations.
It is a simple amendment. However, I believe that it would produce not only a good response by those who care about equal opportunities for racial minorities but would point out to local health authorities the need at all times almost to fall over backwards to show that they are being fair and equal in their treatment. I hope that the Government will give a favourable wind, or at least a favourable answer, to the amendment. I beg to move.
Baroness Seear: My Lords, I wish strongly to support the amendment. Everyone nowadays is an equal opportunities employer except when one examines the results, only to find that they are very difficult to discover.
I know that the Government will tell us that it is the law of the land and the policy of the authority. However, the fact remains that when one considers the detail very little happens. I hope that the Government agree that the principle should be on the face of the Bill.
Baroness Blatch: My Lords, I shall say that it is the law of the land and that there is recourse to law if there is any breach of the law. We have continually demonstrated our commitment to equality of opportunity in all walks of life for people from ethnic minority communities.
In employment, it is for health authorities, as for other organisations, including National Health Service trusts, to ensure that they comply with the law. It is for individual health authorities to determine how their responsibilities should be met. But I should like to stress that we have on many occasions emphasised to them the importance which we attach to ensuring that the particular needs of people from different racial groups are adequately catered for.
It was this commitment, coupled with our concern about the rate of progress within the health service in implementing the Commission for Racial Equality's code of practice, which led us to join with the King's Fund in 1986 in establishing a special Task Force on Racial Equality in the National Health Service. One of the main objectives of the task force (which is due to complete its work in December this year) has been to provide guidance and practical assistance to health authorities seeking to implement the code of practice.
On family practitioner services, we have been taking steps to increase the access to these services of people from ethnic minority communities. For example, first, details of GP practices at which languages other than English are spoken will be available from the new local directories of family doctors which we are requiring FSHAs to produce to help patients to choose a doctor. Secondly, the new GP contract will encourage more women GPs to practise, thereby helping women, including those from ethnic minorities, who prefer to see a woman doctor. Thirdly, doctors are now being better rewarded by the new deprivation payments for practising in inner city areas, where large numbers of people from ethnic minorities live.
On services for which district health authorities will be responsible, each authority will be responsible for ensuring that a comprehensive range of services is provided to its resident population. They will assess the health needs of that population, including any special needs of particular groups such as ethnic minorities, and agree contracts with providers for services to be delivered. In developing contracts for individual services, district health authorities will agree standards with providers of health care designed to improve the quality and responsiveness of care to all patients.
Through the regional review process we shall continue to pursue the adoption of action plan tasks on equal opportunities with regional health authorities. While there is still a considerable way to go, we are confident that these initiatives are having a strong impact and that we now have a firm base on which to continue to build. The amendment would not only be out of keeping with the spirit of the reforms by adding to the central direction of health authorities which are charged with ensuring the appropriate delivery of health services to all their
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community but it would also be unnecessary because it duplicates the effect of existing legislation and government policy on health authorities. I cannot commend the amendment to the House.
Lord Ennals: My Lords, I accept what the Minister said—that this would not be in conformity with the views of the Government about the errors of any central direction. That is where the Government, and I and those on these Benches, must part company. This happens to be one issue. I believe that there are certain issues which the Government must state as a matter of national policy. This is one such issue on the basis of equal treatment. I agree with the Minister and I am sure that everything she said is being done. I believe that she would have wished to have an even stronger impact provided in an amendment such as this.
During the Committee and Report stages we on these Benches have sought to argue that the Government should insist on certain matters. The ways in which the principles are carried out are for health authorities to decide. We have looked at the different aspects of society; for example, people who are facing particular difficulties and disadvantages, elderly and disabled people and now ethnic minorities. We have sought to say that there should be some central direction not on how it should be done but that it should be done.
Therefore, there is a difference between us. The amendment was my last attempt to persuade the Government to write into the Bill some of the essential principles. They have decided that they do not wish to do so and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 142A not moved.]
Lord Ennals Lord Ennals moved Amendment No. 142:
After Clause 24, insert the following new clause:
("Duty of health authorities etc. to promote preventative measures
. It shall be a duty of every health authority, Family Health Service Authority and National Health Service trust to make appropriate arrangements with a view to securing that their various functions are carried out with due regard to the need to provide information on preventative health measures and health promotion.").
The noble Lord said: My Lords, it would be extraordinary if the National Health Service and Community Care Bill said nothing about prevention. The amendment seeks to ensure that in carrying out its functions any health body has a role in preventing ill health. There is no difference of view as to whether our health service should also have preventive, educational and screening roles. As with the last amendment, it is a question of emphasis.
The Bill aims to make the health service more responsive to the health needs of the general population but it says nothing about health promotion. It is important that the value of health promotion is recognised by the health service providers and is seen as being an integral part of patient care. That applies at every level of the service, from primary care to post-operative discharge. Patients need to be informed about how to improve

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their health recovery and how to prevent further illness. Health promotion is an important part of a comprehensive health care system which aims to provide more than a curative service. That such a provision finds no place in the Bill is an extraordinary omission. I beg to move.
Lord McColl of Dulwich: My Lords, I am not sure what good it will do to put the words of the amendment on to the face of the Bill. People know what to do but it is impossible to force them to do it. For example, the noble Lord, Lord Ennals, is very keen on preventing people from smoking. And yet, on National No Smoking Day, there was a photograph in the press showing noble Lords and Members of another place smoking their pipes in defiance of that day.
Lord Ennals: My Lords, I was not one of them.
Lord McColl of Dulwich: My Lords, the noble Lord, Lord Ennals, was not among them nor was any noble Lord on this side of the House.
Baroness Hooper: My Lords, I remind your Lordships that it is World No Smoking Day this Thursday.
The legislative basis for disease prevention and health promotion is clear. Section 1 of the 1977 National Health Service Act makes clear the duty of the Secretary of State for Health,
"to continue the promotion in England and Wales of a comprehensive health service designed to secure improvement—

(a) in the physical and mental health of the people of those countries, and

(b) in the prevention, diagnosis and treatment of illness".

This places as much weight on the Secretary of State's responsibilities for prevention and promotion as it does for the provision of services for the diagnosis and treatment of disease. Legislation is not required to ensure that NHS authorities carry out diagnosis and treatment, and likewise it is not necessary for health promotion and disease prevention.
The Bill is concerned with the organisation and management of services rather than definitions of the elements which make up a comprehensive health service. This clause separates out health promotion from other responsibilities which fall to health authorities and family health services authorities to provide rather than ensuring that health promotion is an integral part of all their services to patients. Health promotion is an integral part of the work of all health professionals in their day-to-day dealings with patients and should be a core part of the role of the new authorities.
While I fully support the aim of the new clause, the Government are taking action in the field of preventive medicine. I need refer only to the new GP contracts in that respect. I trust that the noble Lord will be reassured by my comments.
Lord Ennals: My Lords, the Minister said politely and constructively what the noble Lord, Lord McColl, said in brief. He said, "I do not know what good this amendment will do". The Minister said
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the same and explained what the Government are doing. I respect much that the Government are doing in this area. I say to the noble Lord, Lord McColl, I do not know what good this Bill will do. It is before us. I should have liked to improve it and my success rate so far is pretty bloody awful. I have done my best. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143 not moved.]
Baroness Blatch: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at fourteen minutes past eleven o'clock.