National Health Service and Community Care Bill

HL Deb 12 June 1990 vol 520 cc158-227

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 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 moved Amendment No. 72:

Page 7, line 42, at end insert: ("(4A) In any case where—

1. (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
2. (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
3. (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 moved Amendment No 74:

Leave out Clause 6 and insert the following new clause: ("Transfer of employees from Health Authorities to NHS trusts

1. .—(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. (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. (3) Without prejudice to the generality of subsections (1) and (2) above, regulations under this section may make provision as to—
1. (a) the terms on which a person is to be employed by an NHS trust;
2. (b) the period and continuity of a person's employment for the purposes of the Employment Protection (Consolidation) Act 1978;
3. (c) superannuation benefits;
4. (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. (4) In this section —
1. (a) "Health Authority" means a Regional, District or Special Health Authority; and
2. (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 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 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 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 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 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 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 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 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.

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 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 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.

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 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 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.

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.

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 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 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 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 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 moved Amendment No. 79:

After Clause 11, insert the following new clause: ("Transitional Period: special provisions

1. .—(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. (2) Section 4 shall not be brought into force if—
1. (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
2. (b) such an action would not promote economy and efficiency.
3. (3) Subsection (2) above shall cease to have effect after 31st March 1992.
4. (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 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 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 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 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 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 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 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.

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) 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—

1. (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
2. (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
3. (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 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 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 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—

1. (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
2. (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 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 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 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—

1. (a) the transfer to employment by a local authority of staff employed by an NHS trust; and
2. (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 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 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 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.

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 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—

1. (a) refusals, on any ground, to admit any person to the list of a general medical practitioner; and
2. (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 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 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 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 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 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 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 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 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.

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 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—

1. (a) demonstrate the support of its staff:
2. (b) demonstrate the support of any relevant community organisations; and
3. (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 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 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 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 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 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 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 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 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. 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, 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 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 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 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.

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 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 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 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 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 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 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 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 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 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 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.

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: 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.